The Rise of the Machines

Rob Enderle

Next week begins the post PC era, what could be the one of the most important events in technology since the launch of the Apple II. Apple launched a revolution and then watched other companies take that revolution away. This time, with an older and wiser Steve Jobs, the company will get a second chance to both change the future and be the primary beneficiary of that change. But instead of facing a young Microsoft this time, it is facing a young and successful Google.

 

The outcome of this battle will be no surer than the outcome of the last one in the early '80s. Let's explore this a bit as we ramp to what might turn out to be the launch that defined this decade much like the iPod helped define the last one.

 

The Promise of the Tablet

The market is in the hunt -- and has been since the inception of the thin client -- for something to replace the PC. Thin clients didn't make it, PDAs didn't make it, and while smartphones have made a significant amount of progress, they didn't make it either.

 

In addition, ebooks have been unable to move in education because they fall short of the multimedia and color requirements, and other mobile platforms such as gaming have fallen short of the market potential of the PC.

 

The Apple tablet, regardless of the name, holds the promise to correct all this. Details continue to leak out at an impressive rate, building a frenzy only slightly more twisted then the discussion on NASA airbrushing out a secret alien moon base. The iSlate -- or whatever is is to be called -- is large enough to provide a viable replacement for a small laptop. It is -- or will be -- capable of embracing what ebooks do, plus add color and multimedia, and since it leverages the iPhone, it already has a significant amount of gaming capability.

 

Wrapped with an improved new interface with entertainment such as movies and TV, on paper it looks like the perfect replacement for a lot of expensive devices in one slim package. With Apple's unique ability to persuade buyers to try something new, this could be one of those rare products that catapults a company to even greater heights, much like the iPod and iPhone did.

 

The Risk

However, this product does potentially cannibalize the Mac, iPod and iPhone. And someone else such as Google could get it right first, scale to multiple hardware suppliers and vastly more application builders, and take this emerging market away from Apple. This effectively is what Microsoft did to Apple in the '80s.

 

The problem is that the screen and low-cost data plan Apple needs to make this offering ideal are still some time out. The screens (like Qualcom MIrasol) are about six months out and the low-cost wireless services are about three years away. In addition, the content licenses that Apple needs for movies, TV, publications and books are, depending on type, six months or more out as well.

 

This suggests that the ideal product, even from Apple, might be the second- or third-generation offering, which allows time for the rapid development of strong competitors who partner better than Apple does.

 

Because so much of the success of this product will depend on back-end services and content access, Apple's historic inability to partner well might be its critical weakness.

 

Could Microsoft Help?

With Apple and Microsoft already in rumored talks to convert theiPhone from Google Search to Bing, there is a potential for the two companies to partner so that Apple could use Microsoft's ecosystem as a stronger hedge against Google dominance. However the amount of bad blood between the two companies and Apple's unwillingness to license technology broadly stands in the way of a more substantive partnership.

 

Wrapping Up: Change Is Coming

This launch will formally begin a process that will dramatically change the way we communicate, enjoy content ranging from text to video, and access the Web while mobile. This could bring change as big as that Apple initially created when it launched the first real personal computer. Apple has even more potential to transform the world this time, but could be limited by the same factors as before. This time, with a more experienced CEO, Apple doesn't face Microsoft, but an even faster-growing Google. Regardless of the outcome, this launch will be an event for the history books.



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