May 212009

Apple does not respond to market trends by introducing “me too” entries. If there is something of value to be extracted from a market, Apple takes it and packages it into products that have a more intuitive UI, a better industrial design and consequently higher margins.

When MP3 music players were first introduced, Apple didn’t shove some ham-fisted music player out the door.  It thought a lot about how to navigate content, came up with the idea for the clickwheel, and made it the joystick of a UI.  The iPod Classics and Nanos still use this combination and the UI is also at the core of Front Row and the Apple TV.  With the hardware‚ we also got iTunes – the eventual portal to the iTunes Music Store.

Cell phones had been on the market for over two decades before Apple decided to enter it. It did so after carefully considering what was good (almost nothing) and what sucked (nearly everything) about cell phones.  From those musings, we not only got a revolutionary UI and a new model in carrier relationships, we also got advancements in SDK and app propagation.  The point is Apple didn’t compete in markets by conforming to them.  It redefined them through a marriage of form and UI,  backed by other Apple services.

This is why, when red-faced analysts jump up and down screaming about Apple losing out on millions of potential customers by not introducing a netbook, Apple is content to quietly utter “fuck you” through their smiles.

People have been proposing what Apple’s response will be to the netbook craze for at least the past 8 months. Every time Apple acquires, hires or delivers a keynote, speculation runs rampant. I think Apple will introduce a product that will be perceived as a “response” to the netbook‚ but I believe it will be a very different animal.

What’s Good about the Netbook Market?
Apple will not release a product that conforms to today’s definition of the netbook.  Besides already having a presence in that space (the Air)‚ the specs on these machines would tarnish the Apple brand — they’re simply antithetical to what the company’s about.  My speculation about “one more thing” is based on what‚ if anything‚ makes the netbook market worthwhile. If we accept the premise that Apple deconstructs a market and extracts its value before entering it‚ one could summarize the value of a netbook thusly:

– its form factor is small enough not to require a bag designed specifically to carry it.

– a margin that‚ while less than premium, will still sell in volume and therefore hook more users into other Apple offerings.

My Totally Uninformed Opinion about the Apple Tablet (yes‚ Tablet)

I share some of the speculators’ opinions that the next device will be a tablet.  It’s a market with a lot of potential (Windows XP Tablet? Really?).  A tablet would allow a feature set at the intersection of things that represent an evolution of Apple’s past or current offerings (i.e. handwriting recognition) and the integration of things that they do well (i.e. touch).  It also doesn’t cannibalize an existing product line.

I agree with the bulk of speculation about its size: it will be in the 7-9 inches diagonal range. This is the spec that will lead the majority of clueless analysts to conclude that this is “Apple’s response to the netbook”.

It will carry a standard complement of ports including USB and display port to allow “docked” functionality. It will probably incorporate 3G/ wireless broadband functionality, possibly allowing it to be subsidized.

I believe that the UI will be a hybrid of MacOS X and the iPod touch/iPhone UI.  Think back to Apple’s previous game-changers. Each of them had a UI specific to its form.  This is where the extracted value in the market gets expressed.  This is where Apple has been spending its time.  It’s what separates products like the iPhone, the iPod and the Mac OS from their competition.

Stay tuned.

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