InnoWiser

When it comes to innovation, no one does it quite like Apple. After all the buzz in the blogosphere about Apple’s intentions, Apple rewarded the faithful with the latest iPod lineup. In a word, the new iPods are simply amazing. Beautiful and totally drool-worthy, just like the previous models. This time the interface is the same, but new. A bummer for early adopters is that Apple has slashed the price of the iPhone by $200 in anticipation of the coming holiday season. However, more significant than the revamped user interface is a more subtle change - the evolving ecosystem. And no one is at a better advantage than Apple itself.

The most significant changes include the new nano, now with video; a new iPod touch; and a new iTunes WiFi store.

Nano
The new nano is now more round and has a bright video display. As if the earlier models weren’t stunning enough, the new one looks even more so. And it’s available in black, white/silver, red and pastel colors. The models come in 4Gb and 8Gb capacity. As far as the lower end of the MP3 segment is concerned, they’ve got it covered.

The regular iPods are now iPod Classic, with 80 Gb and 160 Gb capacities, priced at $250 and $350. Now these make my 2-year old video iPod look positively old.

iPod Touch = No PC Required?
The biggest introduction is the new iPod Touch, which has the multi-touch interface Apple introduced on the iPhone. Gone is the familiar scroll wheel, in favor of the multi-touch controls. It looks like the iPhone, operates like the iPhone, but is not an iPhone. Infact, it looks like it’s the iPhone minus the phone capabilities. But the biggest features present are the Safari web browser and WiFi capabilities, until now not available on any iPod (barring the iPhone).

This is an extremely smart move on Apple’s part, because it feeds into the third big piece: integration into the iTunes WiFi portal. In effect, users will be able to browse, listen to, buy and download songs from the iTunes website without being tethered to a PC/Mac. In one swoop, Apple has provided seamless mobility like no other device has. Sure, Microsoft’s Zune has WiFi and users can even share their music (with restrictions), but given that Zune is perceived as an also-ran, no self-respecting geek would wait several hours in line for the Zune. I am not certain if a PC/Mac is required at all, but this WiFi feature is certainly in the correct direction.

User input for the browser is through the virtual keyboard (as on the iPhone), meaning users will have to get used to the non-feedback-giving touch screen, which may be a hassle for some. (I’ve tested it a few times on some iPhones, and it takes a little getting used to). On the other hand, Apple is perhaps priming up its user base to go for the iPhone by providing an interface similar to it. The first rule of usability is providing users a consistent and familiar interface, and in this the iPod Touch succeeds in going two steps forward, but perhaps one step back (in removing the scroll wheel).

Partnering Across the Ecosystem
While the iTune WiFi store is a critical piece in the user experience of the iPod Touch, Apple has gone one step further. Apple has a partnership with Starbucks where the new iPod Touch devices will automatically detect the WiFi hotspots at Starbucks locations. Not only that, the songs currently playing at the location will be available for instant download and purchase. At the click of a (virtual) button on the screen, users can sample the tracks and purchase them. All the purchases will be automatically synced up with their iTunes on the PC.

At the same time, the iPod Touch is integrated with YouTube. YouTube’s featured videos are available at the touch of a button, as are other features. See Apple’s guided tour video here.

The Missing Mobile VoIP?
Considering that the iPod Touch is complete with WiFi (an Internet connection), browsing capabilities, and *almost* a phone, how much of a stretch is it to imagine using it as an actual phone? With the addition of microphone accesory and some neatly hacked software, perhaps somebody might just be able to convert it into a device with a mobile communicator, with voice over WiFi (mobile VoIP). I’m pretty sure that hackers somewhere are thinking along similar lines, if not already in the process of doing it.

Which begs the question whether the iPod’s closed system will really made open at any time for applications. A smarter move on Apple’s part would be to attract developers to both the iPod and iPhone. Not only will Apple earn even more devotion from users, it will also attract establish it as a platform of choice for mobile applications.

What Price Early Adoption?

The biggest surprise was a $200 price drop for the 8Gb iPhone, just months after it was introduced. That’s a 33% drop. The 4Gb iPhone will be phased out. Where does it leave the early adopters? Has Apple just alienated its most ardent followers? To be sure, Apple is giving the $200 back to users, but only if they’ve purchased it in the last 14 days. What about those who stood in the lines for days to buy it? Read Om Malik’s post on it here: how to get your $200 back.

What do you think? Would you go and buy the iPod Touch? Or or would you buy the iPhone? Or wait for the true 3G version of the iPhone?

I shall be writing posts on the mobile industry. This is a first one in the series.

Forecasting a nascent market is difficult, risky and sometimes embarrassing in hindsight. Market uptake depends on multiple factors: clear business propositions, deployment of infrastructure, marketing of services, customer experience, availability of compelling value proposition (for the customer/user, the complementary service providers/partners), network effects, and the like. Nevertheless, forecasting is itself a big business. Forecasting requires constructing a model that includes making assumptions about these and other factors, applying some sort of complicated formulae, and making relevant predictions. Often forecasters come up with best-case, worst-case and most-likely scenarios to cover the entire range.

As such, most forecasts should be taken with a pinch of salt.

When it comes to new, emerging services like Mobile TV, there are various ranges I have seen. Three years ago when I first started researching this area, most people were very skeptical about mobile TV. The most common responses I heard were: Who would want to watch TV on their mobile phone? Why would they watch it? What would they watch? There’s nothing on it! Who provides these services? I don’t even get a good voice signal. Video on mobile sucks, and variations of it.

Now it seems like almost every mobile-related firm is, or wants to be, in the mobile TV/video business. There’s money to be made in mobile content, mobile advertising, mobile broadcasting, mobile gaming. Understandably, many companies have jumped in hoping to get a share of pie.

Moconews reports, citing an ABI Research report, that mobile video services (service revenues for video messaging, video calling and video sharing) will grow from $1 billion in 2007 to $17 billion in 2012. Most of these (~90%) will come from N. America, Europe and industrialized regions of Asia/Pacific. ABI Research, in a June 2006 report (I know, it’s old) mentions that Mobile TV users (broadcast and unicast) will reach over 500 million in 2011. Now, both the scenarios are possible… but main question is exactly how probable are they?

I don’t have any point answers: it’s pointless to forecast to the second decimal anyway. What I do know is that there are compelling drivers for this emerging market of broadcast mobile video, and there’s significantly higher interest in the past year or two from many players in the value chain.

Roughly, the Mobile TV value chain looks like this:

Network operators <-> Infrastructure Vendors <-> Content Developers/Aggregators <-> Mobile Device Manufacturers <-> Consumers

This is a huge and complicated market, with multiple players, competitors, complementors and stakeholders. I shall cover the players, the technologies, and some of the issues in later posts.