iPhone, the 'Personal' Computer - Future of the Mobile Web

By Mark Sigal
September 15, 2009 | Comments: 4

reset-button.jpgWelcome to Mobilize, aka the Apple iPhone-induced 'Industry Reset' Conference.

We join our program, already in progress.

Once upon a time, Carriers had the exclusive Billing Relationship, and it was good for them.

As a Handset Maker or Software Developer, it could be good for you, too...if you recognized who was the Sheriff in town.

Unsurprisingly, in those days things like User Experience and Product Design were somewhat gated by what the Carrier would allow the Handset Maker to do, which was not much. It was a heavily-fortified, walled garden.

For third party Software Developers, the game then was as much about supporting (and QA'ing) a dizzying array of handset devices as it was about building cool software.

Moreover, because supporting such a byzantine structure takes brute force (and VC dollars), there were some companies that did really well by inculcating themselves within the protected confines of the money flow (e.g., Jamdat) but there were far more busts, and more to the point, there was no point of even trying if you were a tiny venture.

Then Apple introduced the iPhone, and the good old days for Carriers were no more. Too much ink has spilled on the "Why" side of iPhone as a game-changer, but let me add one more thought to the mush.

Simply put, the iPhone is the first truly 'personal' computer; more personal to its owners than the PC ever was. Talk to iPhone owners (not to mention, the 20M iPod Touch owners), and this truth bubbles to the top again and again.

Needless to say, this has completely disrupted a once horizontally oriented value chain (Carrier, Handset Maker, Software Developers, Consumer), and as such, a lot of dollars and destiny is truly at stake.

No less vexing, as the iPhone is a vertically integrated platform (hardware, software, service, SDK, marketplace footprint) it's not so easy as 'emulating by imitating.'

The most honest answer I have heard on the state of the market is from Sprint's CEO, when asked about iPhone versus the Palm Pre (Sprint is its exclusive reseller). He cooly noted that, "It's like comparing someone to Michael Jordan."

mobilize_logo.pngIn a panel discussion at Mobilize, user experience guru Jesse James Garrett (founder of Adaptive Path, who also coined the term, Ajax) summed it up best, noting that "iPhone has brought design back to the fore as a core differentiator in the competitive marketplace."

In any event, that's now the standard experience that customers aspire to, and to not be able to deliver it, is to raise all sort of existential questions for carriers and Handset Makers alike.

As a result, if there was any singularity of purpose at Mobilize it was this: To Beat Apple at its Own Game.

In this Corner...Android!

android.pngFor the Anyone But Apple Coalition, there is Google Android. Mobilize underscored this truth in no uncertain terms.

I have two intersecting thoughts in my head on this point.

One is that Apple has secured some really prime real estate for the industry completely reboot itself and collectively organize around the only other company that disrupts entire industries (and value chains) as much as Apple, and that's Google.

Two is Android's Andy Rubin assessment that what's good for the Internet is good for Google. He's right, and it once again illuminates the interesting (unique) polarities between Google and Apple (read 'The Chess Masters: Apple versus Google' for further analysis on this point).

So why are Carriers and Handset Makers doing this?

In Android, the 'Anyone But' Coalition hopes to harness one broadband platform that can modulate to the individual definitions of broadband in different geo nationalities and market segments, not to mention, different form factors.

To them, Android is Open because it's open to carriers, handset guys, developers, and no less important, the underlying source code is open so you can take it in-house if you want.

Plus, it's not like Apple is available on any and all carriers (like RIM's Blackberry) so while I see plenty of splintering of this would-be open but unified alternative to iPhone playing out, the market's not zero-sum (i.e., there are plenty of non-iPhone aspirants out there), and for them Android is a viable answer.

So, that's the game that's afoot, and towards that end, there was a lot of talk about Design, and the need to change the mobile Brand Experience to extend the durability and depth of the Customer Relationship (ala Apple).

In a really good discussion on mobile device, web and user experience design, the following nuggets bubbled to the top:

  1. Look Beyond the Digital Realm (and that of your competitors) to all of your real and virtual world experiences. Work backwards from where and when you expect to be using the Device, including the constraints on the user when they are using the device (e.g., on a crowded, noisy bus). One example here is to think in terms of runtime and workflow constraints that span 3 minutes, 30 minutes and/or three hours so as to come up with appropriate interaction models for each mode.
  2. Make sure that your product exposition process is holistic and measured across all stakeholders, including the technical support folks. Too often, this process excludes a key stakeholder, thereby failing to uncover critical gotchas or worthy aspirations to satisfy.
  3. Multi-Touch is evolving from single touch a truer Multi touch engagement model, and this simple extension of the experience will lead to bigger devices as more fingers must be touching the device in this model. Needless to say (as the panel noted), this presents some design challenges as there as no accepted conventions, and bottom line, more fingers equals exponentially more potential permutations.

This brings me to Motorola's Last Best Hope; namely, announcing Motorola CLIQ, an Android-based Motorola handset (to be distributed by T-Mobile) that features a Motorola directed user experience, which Moto calls MotoBlur.

(Sidebar: If you are looking for a 'How Far the Gorillas have Fallen' example, look no further than Motorola.)

Back to Motorola CLQ and MotoBlur, do yourself a favor and give Lance Ulanoff's article on the product's launch at Mobilize a read - Motorola CLIQ: A Lesson on How Not to Launch a Product. His assessment pretty much mirrors my experience of watching this launched live.

Netting it out, MotoBlur pushes the ball forward a bit. It's interesting in the sense that if offers up a top-level integrated feed oriented multi-service experience (SMS, Facebook, Twitter, pics, vids, email), premised on the ideal that a 'glance-able' front end to the Internet is worth aspiring to. Good, but no game changer.

For the moment at least, it seems like everyone knows that the rarefied air of iPhone 'like-ness' is not yet on the horizon.

Location, Location, Location

real estate.gifIn real estate, there is a saying that to understand the business, all that you really need to know is that it's all about location, location, location.

This is no less true in the mobile realm, where location is the real-time anchor for context; a context that is surrounded by an embarrassment of data riches, including the fact that GPS is ubiquitous and free, not to mention really good Wi-Fi positioning/Cellular Tower triangulation-based locative services that fill in the gaps for non-GPS users.

Consider the following. Skyhook Wireless (a Wi-Fi based positioning service provider) serves up 200 million location updates a day.

Now, a restaurant chain wants to be able to target lunchtime audiences according to a time of day and geo zone overlay, so as to serve up lunchtime offers when consumer are in a ready mode to buy (lunch).

Expanding this concept out a bit, imagine a trip to Vegas, and the Travel and Entertainment experiences such a device could satisfy.

Simply type in a keyword (or short phrase), geo-radius, $ budget or other like filter, and click, "GO."

It's easy to see lots of monetize-able events in this equation, isn't it?

A couple of the panel discussions at Mobilize flagged the fact that the low hanging fruit here is to piggyback off of core data SMS revenue and being the 'rounding error' for that large number by building value add on top of a pre-existing business versus trying to carve out a wholly new standalone revenue segment.

Plus, Alerts and SMS are natural as bridging functions between 'lite' ubiquitous web apps and native apps, a bifurcation that has played out to the benefit of the Twitter Ecosystem.

In fact, the opportunity is so vast that social mobile handset maker, INQ (they make Facebook and Twitter centric phones) sees a market for standalone LBS (location based services) wireless devices emerging in the not too distant future.

ViewMaster.jpgMeanwhile, in the category of "Bubbles to Watch," a soon to be white-hot market in Augmented Reality is beginning.

Foursquare (a real-time social status updating tool, with a bit of game-ification thrown in) just got funding, and they had the luxury of choosing among a furry of term sheets, extremely rare in the mobile segment, let alone this economy.

While Foursquare largely is focused on text based messages , the iPhone and Android phones are opening up a realm of real-time visual overlay capabilities that ride on top of the camera, video views supported by these devices.

compass.jpgThe most simple analog for how AR works in this construct is the billboard. Imagine walking in a neighborhood, holding up your phone, and the combination of touch, tilt, location and compass yields any of the following: a static picture overlay so you can see a push-pin of notes from previous visitors; an interactive avatar that can give you a tour of the area; or an information billboard that spotlights the best pizza in the neighborhood.

No less, there are a myriad of ways that such an interface can be represented, so it's ripe for innovation (subject to broadband and computational resource realities, not to mention privacy concerns).

Concerns aside, this is the one segment that the VCs get most excited about, as observed at both Mobilize and O'Reilly Foo Camp, which is ironic in that VCs are writing very few early stage checks for Mobile at all.

Surprised? I was. What it comes down is that Apple has so totally unwound the old value chain that a new monetization arc that scales to the levels of VC worthiness has not yet formed. Plus, there is plenty of past experience of VCs getting burned by investing in carrier dependent startups (a point underscored in the VC panel at Mobilize).

Worth noting here is that among VCs there seemed to be a uniform sense that Carriers were largely tone deaf to customer-centric innovation, a trend that is different outside of the US, where owing largely to carrier nationalization, there has been more of an open service gateway for third party development to flourish.

The best quote here (as one VC noted) is that we are "Starting to see the unbundling of what a cell phone company is." Amen to that, given the legacy of non-innovation relative to non-US carriers and the rest of the computing and communications landscape.

Netbooks, Notebooks and the iPad

ipod-hd-tablet.jpgOne final hot topic at Mobilize was the Netbooks segment, an area that I have spent a lot of time reading and writing on so I wanted to close this piece by sharing some information on key takeaways from the event.

First off, Netbooks is outgrowing notebook computers (Laptops) as a segment in terms of unit count by a two to one margin.

Second, in terms of utilization environments, this is the device that you take with you to Class/School; when you are Traveling; Lying on the Couch; it's the Extra Computing Device for your kids. It serves Verticals like Hospitals and Field Workers.

In other words, it doesn't replace the notebook but it targets segments where the notebook is less convenient, too bulky, too hot or too expensive.

What remains to be seen is whether such a device cannibalizes or complements that general computing market (notebook or otherwise), but the data suggests that this is a 'dog that will hunt.'

Ironically, this device is potentially the perfect overlay for the Carrier that wants to deepen their relationship with their Mobile, Satellite, DSL and/or POTs customer by extending their account across more devices.

As such, it's a leverage play that could beat Apple at its own game, although my guess is that many will do so by reselling Apple's forthcoming, iPad Tablet Computing Device.

Related Posts:

1. Why Innovation is Hard

2. Surplus, Scarcity and the App Store

3. Apple's forthcoming iPad Tablet Computing Device

4. Virtual Reality, Meet the iPhone

5. Touch Traveler: London, Paris and only an iPod Touch


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4 Comments

As the article lightly touches on open/closed models...

What's to become of the carriers? For example, AR seems equally as interesting and exciting as mobility. One can easily imagine a smart phone as a new PC and AR as a new interface between people and places and the internet. There is a lot of value in the AR overlay.

The most obvious question for the moment is who supplies the overlay? The most obvious question for the future is how to get to the point where we create and share our own overlays, mapping the information over the world on the fly. This is one of those values that's too important and valuable to be left to business. No one can do it justice - only everyone can.

Both smart-phones-as-PCs and AR depend on an open internet. They need ubiquitous WiFi or they become very limited. Useful, but 99% lost potential. Mobile carriers are like training wheels that are quickly a hindrance: slow, closed, exclusive, expensive, limited, patchy, and on their way to obsolescence. (Mr. Chatterbox found he could not converse naturally once he discovered he would be charged 1 cent for every gerund he used. He found himself saying things like, "I'm not go for lunch today.")

So how do we get there? How do we wrestle our new 'PCs' from the carriers, and how do we develop the potential to map any and all the internet over the world? Is that the base line for developers, or are we just gonna screw around getting a cut from the carriers for a couple decades? Whatever happened to municipal WiFi, anyway?

"Simply put, the iPhone is the first truly 'personal' computer; more personal to its owners than the PC ever was"

This is such bollocks. It might be true for the hoi poloi but many people have been falling in love with their personal devices for yonks. I have a Psion 5 that I only stopped carrying when mobile 'phone connectivity became so useful (can't be arsed to carry two devices). The Psion 5 is still a hundred times better than an iPhone as a personal computer and it's over 10 years old! Loads of less geeky friends feel the same way about their Palm hand helds.

The iPhone is pretty and personal and shit.

@Brad, great question, and carriers especially are struggling with this question, inasmuch as they have tremendous infrastructure advantages, a large installed base with a billing relationship and a proven (relatively), durable spend. The counter is that at least domestically they have a legacy of fear of innovation and a need to wall up their sandbox. If carriers are smart, they will figure out which layers of the equation they can differentiate on (e.g., billing, authentication, multi-service access/reach), which layers they can plant low-cost seeds in (and invest R&D only after results bear out) and which segments they should get out of the way of and focus on being the best SERVICE PROVIDER. For carriers, it is not so easy as saying that what's good for the (open) internet is good for Google; or what's best when it's deeply integrated, and end to end is a virtue is what's good for Apple. I think that they can be both dumb pipes and value add, but a simple example where they have tough choices is SMS. SMS messages are highway robbery. Twitter tweets are free. That is an inefficiency that they can wait until the big revenue disappears completely or they can figure out an AND story that is palatable to them, consumers and a developer/partner ecosystem.

@bob, when you say that it might be true to the hoi poloi, which of the 50M iPhone/iPod Touch owners are you referring to? That's a lot of hoi poloi for such a seemingly non exclusive (read: large, mainstream) base. Now as to your love of the Psion 5, more power to it. Everything is derivative, and not suggesting that Apple split the atom, but folks that try to reduce this to 'fanboy,' monikers, hoi poloi or what not miss the mass, mainstream adoption and adulation across techies, non techies, men, women, americans, international, etc.

> This is such bollocks.
> I have a Psion 5

Can you really give up a PC for a Psion 5?

I mean like totally forgo using a PC at all and just use the Psion 5 for all your Web browsing, email, calendars, contacts, games, book reading, music listening, video watching, photo galleries, streaming audio video, and so on? Everything a modern personal computer does? Because I think that's what the author meant here. The iPhone becomes your primary device; other computers are secondary, they're accessories.

I used to think of my Mac as my personal computer, and other devices were Mac accessories. Since I got an iPhone, I think of my iPhone as my personal computer and the Mac is an iPhone accessory. It's for when I need a bigger screen or touch typing keyboard or want to run big apps like Photoshop. I even got the smallest Mac this past time (MacBook Air) because I wanted iPhone-type mobility, I bought the Mac that matched my iPhone. And the MacBook gets at the Internet via the iPhone, it really is an iPhone accessory. I'm downloading a movie rental to my iPhone right now, and later it will sync to the Mac where I will watch it. A few years ago I would have downloaded the movie to my Mac. I didn't even consider that this time. It is actually easier to do on the iPhone.

If you like the Psion you should actually be proud of the iPhone, because they use the same ARM CPU. Apple and Psion and ARM have much history.

> hoi poloi

The iPhone is US$99. I don't buy the argument that it is for rich people only at all. My monthly phone bill went down when I got an iPhone (replacing a candy bar phone) and has gone down further still since Skype for iPhone shipped. Plus iPhone has unlimited Internet, so many times instead of making a call I look up a map or look up something on the Web instead.

And I have a friend who got a promotion and $10,000 raise because of his iPhone. He introduced text messaging to his team at work and it worked so well the whole company adopted it and he started training people how to do text messaging. This is a guy who is 63 and never text messaged before. Not only did he make his iPhone pay for itself, his raise would pay for 8 iPhones per year.

Rich people can afford to buy a phone that is 5 years behind the curve and talk about crystal goblets all day long with them. Regular people have to be on top of their game to get ahead. iPhone is like having a PC in your pocket. It's worth much more than they charge for it.

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