What can Google's tablet deliver?
Bring on the clones
Google is in cahoots with Verizon developing a tablet device, reports the WSJ. But with the world and his dog also developing copycat iPads, it's hard to see what Google in particular can bring to the market.
The brutal lesson Apple has handed to the phone business is that unless you can deploy very high quality design experience, and do so in a very focused way, your heritage and brand name counts for nothing. Ask Sony or Nokia, who have consumer electronics in their DNA, but have struggled to create a successful new product line.
There was a curious turn of phrase in the Journal's interview with Verizon CEO Lowell McAdam that made me wonder if he'd met the right company.
"We're looking at all the things Google has in its archives that we could put on a tablet to make it a great experience," Lowell told the paper.
Um, shurely shome mistake? Google is not a Warner Music, or a Pearson, whose archives (say, Columbia or Motown Records or Penguin Books) reach back to the start of 20th century culture, and contain many of the highlights. Google's archive is ten years' worth of web scrapings, and the valuable bits there are not owned by Google. In fact, the closest Google comes to an "archive" is its YouTube liability, currently burning a hole in its pocket in two ways: the escrow fund for copyright holders, and the cost of running an operation that's good enough to be massively popular, but repellent to sponsors and advertisers, and not quite good enough to pay for.
Archives of stuff are not what Google is good at. It has huge scale, and can develop attractive desktop services quickly. It is reasonably adept at putting these on mobile platforms. But since these are already available universally, there's no special Googley-ness to running Gmail on a Google tablet. And certainly, none of Google's services is unique enough to sway a purchasing decision. When you think about it, the biggest success stories of the past decade are people taking ubiquitous me-too services and putting them in a proprietary box: Palm, TomTom and BlackBerry were all 'software in a box'. Each was a fairly mundane software app, turned into an appliance.
The fashionable mania for hardware companies to launch free web services really baffles me; it promises a world of pain for the operator, who is obliged to put stuff out for free, but get clobbered when things go down. Users have turned out to be far more promiscuous than anyone predicted, so there's no 'stickiness' or loyalty, other than with email. I suppose it's fashion.
Even with a reasonably strong hand of services and Android, which has a lot going for it, Google doesn't have what it takes to create a compelling consumer gadget. Android is a deservedly popular development environment, the cost is attractive (ie zero), it's reasonably capable, and the pace of improvements to Android gives everyone involved a lot of confidence. No, I mean the bigger problem facing anyone not in control of the design. When it comes to internet appliances, owning one (or even several) components is not going to give you any kind of advantage.
Let's have a quick reality check, and see what Apple's advantages are with the iPad. They're really quite frightening.
Apple has good relationships with the people who have real archives - the copyright holders. Apple respects them enough to do business: its flexibility over the publisher's agency model demonstrates that. Whistling Kumbaya and the virtues of user generated content doesn't really cut it, here. Apple also promises developers a mass market, 80 million it reckons, and with 4.0, the addition of a ready-made, built-in advertising option. That's going to force Google to hand over money it would rather keep.
But most of all, Apple controls every part of the design, and it produces just one model at a time. (There are variations in capacity and 3G or no 3G, but customers and developers know there's just going to be one iPad this year. And another next year.) So there's an enormous amount of effort devoted to making an Apple tablet a nice experience. Apple knows it's implicitly competing with other entertainment (or wasting time) options, which are themselves easy to use (a TV) familiar (a book) or mature (a games console).
It's all about design. To design a good appliance, you need to control every piece in the chain. If you can't do it, you really shouldn't be in this race. ®
Who's copying who?
"But with the world and his dog also developing copycat iPads"
Funny how some of those "copycats" were in production before the iPad was even announced. In fact, I saw my first iPad copycat back in 2008 from Archos. Creative had iPod copycats before iPods came out. LG had an iPhone copycat before the iPhone was out.
None of those were Apple's ideas in the first place. The last good innovation I can recall actually coming from Apple was MacOS back in the mid-80's. Please, get over it.
...Oh yeah, almost forgot about the iMac copycats that people have been knocking pins down with for ages. I'll admit though, iMacs are indeed much more satisfying for that sport.
Agree and disagree
First off Andrew, nice work. I love your sense of timeless sobriety and skepticism while most reporters / analysts are caught up in whatever the current trend is.
And secondly, I have to say you've hit the nail on the head with device sales. If you look at revenue, the closer to the hardware a company is, the more money it makes. HP is 100 billion, Microsoft and Apple about 60 billion, Google 20 and Adobe only 8 billion.
The problem? As you've pointed out, people see software as intangible, and pirate it. Not only are people more willing to pay for hardware, but they are less likely to steal it as well.
So that pushes companies to tie their software too hardware. So far, Apple is the best example of this vertical integration. But if you really look at Android, although the OS is open source, the radio drivers that actually interface to the cell phone are Google property, which they license to phone manufacturers. This is Google's attempt at a Microsoft style revenue model.
But which products succeed? If you look at Apple, they won against the cell carriers closed models because they had something more open. Android sales are now surpassing the iPhone, because Android is more open that the iPhone. The truth is that consumers favor the products that favor them, in terms of control and price.
I would argue the exact opposite of your premise in this article. That consumers favored the iPhone not because of it's integrated designed, but because they could run a variety of apps, and because they had a real web browser, and full access to a data network. In other words, consumers favor freedom and utility, not pre-packaged vertical control. And Android's success only continues to confirm this view.
Google on the right track...
The overpowering (and rapid) success of Google's Android platform and marketplace shows that Google knows what it is doing, and is doing it well (as does the size of Google's net worth). For example, they apparently know how to COOPERATE with other companies, such as hardware manufacturers, advertisers, and so on. Apple, on the other hand, apparently feels the need to absolutely control and bully all those they do business with (including their customers).
Saying that "Apple respects them (the copyright holders) enough to do business" I would argue is a false statement. Apple demonstrates little respect for anyone, and they "strong-arm" publishers, media companies, app developers, and wireless carriers to drastically reduce their "cuts" in favour of forking much of the profits into Apple's bank accounts.
Google, on the other hand, is comparatively benevolent; they give things away (like multiple web and cloud-based services, operating systems, free ebooks, and so on). Advertising pays their bills, so they do not have to gouge their customers and business partners mercilessly (as Apple does). But above and beyond that, Google uses a "nice guy" business model and serves as an example to other businesses that mutual trust and cooperation CAN be tools that allow various companies to coexist and prosper. Google is not suing others for using or modifying Android, it is a gift. Sure, some companies are changing the default web services in Android, but this gives Google a reason to compete with these other services on the merits of its own products, NOT by using litigation (as Apple would most assuredly do, eg: the "Psystar" issue).
Being "nice" is the best advertising any business could hope to have. Apple and Microsoft do not get this, but Google does. People -- customers and business partners -- like to feel respected, and that they can trust who they invest time and money with. You cannot trust a company that is like a pit-bull, unpredictably ripping other businesses apart (and sending threatening legal communications to talk show hosts who "dare" to humorously depict its product, aka Ellen Degeneres). Or a company which turns a blind eye to the use of child-labour, employee abuse, and the high suicide rates at the factories which make its shiny gadgets...what's "good" about that?
Just my two bits worth as to why I think this article is so much Apple-funded hogwash.