The Big .Mac Mystery

On the heels of the WWDC next week, comes news of a possible, ever-so-slight shift in strategy on the part of Apple. From the New York Times Bits Blog:

...there is a flurry of speculation about improvements to a minor icon an the Apple Pantheon: the .Mac online service. For six years, .Mac has been a $100 a year bundle of handy Internet services, now including e-mail, online hosting, backup, photo sharing, and tools to synchronize calendars and address books. Industry reports say Apple has between 1 million and 2 million subscribers."

"Now is certainly a great time to expand and rename .Mac. Much of the energy in software development is around online applications, which would be a logical evolution for Apple’s iLife and iWork software. Moreover, the iPhone and iPod Touch are particularly suited to services that blend small local applications with storage and other processing handled on an Internet server.

I find this analysis much more consistent with my own than with Forrester Research's speculation about Apple's shift towards home entertainment services. The gorgeously designed, yet deceptively useful devices that are entering the marketplace courtesy of Jobs et al are all but useless without some hefty services to make them sustainably unique.

As an example, I was aghast to discover that I couldn't directly subscribe to a podcast on my iPhone, with Apple preferring me to sync through iTunes on the desktop. There is a third-party app that will let me download and listen to podcasts over my data or WiFi connection, but Apple does not natively support it... This is due, I believe, to Apple wanting to maintain control over what content enters its media player. A .ME service suite (with a web-service-based iTunes) will take us a long way towards the ubiquity of service that Mr. Hansell is speaking about.

Will Steve Jobs Set Me Free? - NY Times Bits

Time Warner Gets Into The IPTV Game

Conventional wisdom pits the cable companies (or MSOs - Multiple Service Operators - as they're known in the trade) against the likes of Apple, Microsoft and Sony as the next-generation delivery providers for entertainment content.

Time Warner broke that mold this week with the announcement of their own IPTV strategy: One that unites PC-bound content and HDTV's through a home networking device that democratizes the Web to TV link:

"Right now it's pretty hard to get Internet stuff on your TV," [CEO Glenn] Britt said at the Sanford C. Bernstein Strategic Decisions Conference in New York [on Friday].

"We're actually going to have equipment we make available to subscribers," he said. "It's actually going to be a new wireless cable modem that will allow you to network everything in your house."

What's significant about this is that there is renewed interest in converging the Web and TV. What's different about this is that the interest is not in driving lean-forward iTV, where the internet's presence in TV is used to deliver "Value-Added" content and shopping opportunities. Rather, this move is about getting the lean-back experience of Web video to the living room. Moreover, it's about competing with IPTV set-top boxes that have similar features but also allow movie and TV show purchases and rentals.

As mentioned on this blog last week, Forrester has predicted that Apple is going to throw itself full-force into this market, delivering products and services to support the home-entertainment convergence. I continue to disagree with this sentiment, and see Apple continuing to want to wrap up its products into opportunities to own the content-conduit-commerce services that live underneath the experience, rather than furthering the front end applications. This play by Time Warner looks to compete with THAT plan, and is further indication that the content distributors and aggregators see that VEBCAR (Value Exists Between Couch And Remote) is the focus of their model.

Link to Reuters Article

The Revolution Will Be Home-Brewed.

I have a modded XBOX hooked up to my TV.

In addition to playing XBOX games, it has a few custom applications courtesy of a few hundred amateur developers. These non-standard features include a dashboard that shows me current and forecast weather conditions. It's connected to my network, allowing me to play rips of my DVD collection (wirelessly) and Music CDs. I can search and view videos on YouTube and Comedy Central. I can download and play amateur freeware games. I can point it to a folder on my computer with all my pictures and run a slideshow (with music) on my TV. Apparently, although I haven't tried, I can even download video on demand through BitTorrent, timeshift with a DVR (TiVo) application and remotely control it using a Facebook application.

This nifty modified device comes to me courtesy of a chum who is familiar with the XBOX Homebrew community. Homebrew, a sort of Do-It-Yourself open source development kit for hackers, is predicated on the notion that the information should be free (as in speech, not beer), and that if I buy a device, I should be able to modify or change that device in any way I see fit. This point of view is not shared by the computing and media industries who feel that if they can't control the distribution conduit, they'll quickly lose control of the mass distribution system that they are the gatekeepers to. As a result, and thanks to the industry-friendly Digital Millennium Copyright Act (DMCA) Homebrew style 'tampering' carries criminal penalties in the US (a version of the DMCA is soon to be proposed in Canada, according to University of Ottawa Law Professor Michael Geist).

So my 79$ XBOX hacked with so-called Homebrew software provides me with a perfect lean-back IPTV experience that is, in some ways, far superior to the experience I would get with a 400$ AppleTV, XBOX 360, or PS3. In fact, virtually all the IPTV features on these 'advanced consoles were, for the most part, inspired by the Homebrew version. Everything from the feature set to the User Experience Design are being copied from the Homebrew versions to the newer consoles by the big guns at Apple, Microsoft, Sony and Nintendo.

Still, what's the big deal? If these other devices all have the same features, so what? Well again, it's a matter of access. For the most part, only 'signed' (read: paid-to-play) applications can run on the non-Homebrew machines, and each of these consoles makes it very difficult for all but the most savvy to stream videos from their computers, preferring that consumers rent or purchase their videos (again, read: paid-to-play). Homebrew (access and information want to be free like speech) are decidedly NOT paid-to-play and represent a loss of control by the major distribution channels.

Now comes word from Slashdot that the venerable Wii has been hacked (without hardware mods) to include a Homebrew 'channel.' From Slashdot:

"The Homebrew Channel is a tool that can be installed on any Wii (no hardware mods required) that lets you run unsigned homebrew software from an SD card, or upload executables via WiFi or a USBGecko. We've tried to make it friendly for users with a simple GUI, and powerful for developers with direct upload features and reloading..."

While the Wii isn't a multi-media experience per se, with its focus on interactive gaming, it is an IPTV play, and you'll find weather, news, a Web browser (that can play back YouTube) social networking, and a game store on most every console. The Wii Homebrew Channel will provide the fuel to feed that fire, and with the recent port of the VLC player, it might even see some media applications make their way onto the system.

At the end of it all, this channel will be just another niche hobbyist's playground, installed on a paltry minority of Wii consoles. If history is any guide however, this channel may provide Nintendo with the Next Big Thing for their product. I wonder if they'll pay to play.

Slashdot | Unofficial Homebrew Channel For the Wii

Forrester: The Future of Apple?

ITNews.com.au out of Australia is running an article today on a new report by Forrester entitled "The Future of Apple." Rather than cite the ITNews article, here's the abstract from Forrester:

Consumer product strategists frequently ask Forrester how Apple's product strategy will evolve: What will Apple's product portfolio look like five years from now, and how is Apple preparing for that future today? Forrester notes that Apple has completely remade itself from a PC maker to a consumer devices and digital music leader over the past eight years — thus setting the precedent for additional radical change over the next five. While there are a number of speculative industry hypotheses for the future of Apple — including scenarios like Apple as a media pure play or Apple as the "American Sony" — Forrester sees a future that ties together many of these hypotheses into a coherent consumer product strategy: Apple will aim to become the hub of the digital home, offering eight key products and services to connect PCs and digital content to the HDTV-stereo audio-visual infrastructure in consumers' homes. To fulfill this strategy, we predict that Apple will launch new products, re-engineer the Apple Store, and expand into in-home installation services.

For those with Forrester access, the fulltext is available here.

Do I think they're right? Maybe... Forrester rightly points out that Apple has never been into the idea of open platforms:

"Apple’s commitment to controlling the user experience through closed systems manifests itself in the locking of iPhones to outside applications and its unwillingness to license Mac OS X to clone makers.13 This inclination toward closed systems would inhibit mass-market success in the digital home, where a wide variety of manufacturers’ products must be tied together.

Interestingly, however, this is not truly the case. Apple's flagship computing product, the iMac, is essentially an open platform. Indeed, Apple's computing products are a hardware-software solution designed for delivering services. Early services include media delivery (iTunes, AppleTV, iPod, iPhone), while the commitment to A/V production (iMovie, Garage Band, iDVD, Aperture, Final Cut Studio, Logic) continue to grow, even to the point of causing credible speculation that Apple will buy Adobe. With the end-user software-hardware platform, Apple satisfies the delivery, or the conduit part of the 'triple-C' trifecta. With their media aggregation and production software, they hit the content portion. It's the Commerce part that they're after next, and it's the one that's the brass ring. They've started with the iTunes store, but I think that's not the end of it. The real prize is the end consumer.

While the Forrester article argues that Apple won't go after Cloud computing, I believe Apple wants to use .Mac as their entry point to the Platformization of the their products to enable services. I've wondered aloud about the play for Safari and .Mac, and this article brings it into sharp focus. Forrester speaks to this, albeit dismissivley:

The era of cloud computing is dawning, with more and more applications being delivered over the Web... Apple already is a great software company, from OS X to .Mac platform applications to iTunes. Perhaps that’s exactly why this won’t be Apple’s future: Software always has been, and will continue to be, integral to what Apple does. There’s no need to pivot strategically, and it’s difficult to imagine Apple foreswearing its virtuosity in developing stylish hardware. Apple’s strong suit continues to be in integrating software and hardware into one continuous, best-in-class user experience.

The future of computing is pervasiveness, and connecting a personal computing experience from the living room to the subway to the office is going to require a very cloud-like platform strategy. This strategy requires a framework for the services that will make up that pervasive experience. RIght now, digital media, whether professionally or personally produced represents a cornerstone and a gateway.

Just as the Mac is only as good as the software that runs on it (Adobe's Creative Suite is a prime example, as are Panic's great applications), the end-to-end computing experience will require value-driven applications beyond word processing, media, and media creation. And here's the rub. Apple can't build 'em all.

I believe Apple built their Final Cut Suite and Logic to raise the bar and help their OS compete with SGI, Sun and Microsoft. I believe Apple is architecting it's next play to compete with Google and possible Microsoft. They know the only way they'll compete is to define the leading value proposition for the industry and own the relationship between consumer and computer. This leads me to a new acronym based on one borrowed from the customer service sector: VEBCAK: Value Exists Between Chair And Keyboard.

Netflix to Sell a Device for Instantly Watching Movies on TV Sets - New York Times

IPTV's slow march takes another step, and then yawns...

Given that the blog title tells the whole story, I'm not sure that this is really 'news.' The one bit of interest here? Long tail darling Netflix is fighting back against Apple & Amazon, to be sure. But... can they beat Blockbuster/Circuit City?

We're years away from meaningful IPTV applications... But that's because we're depending upon a LOT of legacy business infrastructure and the molasses of consumer adoption.

Netflix to Sell a Device for Instantly Watching Movies on TV Sets - New York Times

In Play... New Media Consolidates (again)

Yahoo is still in play, according to Jerry Yang, Cringely has suggested that Adobe is in the cross hairs of Apple's sights, Adobe has opened up Flash (and Air) as a service-based platform, Amazon & Apple both have rich-media pervasive devices, Microsoft is 'meshing' up Live, and Google is holding Verizon's feet to the fire. Are these related? I think so...

New media as a concept is comprised of three critical pieces that have been touted and revisited for as long as the Web has been commercialized:

Content - User- or -corporate generated, Content is the killer app of new media; and it's the reason that people want pervasive broadband access.

Commerce - The monetization of content, Commerce (either via advertising or retail) represents the underwriting of all content in new media.

Conduit -As the method of connecting consumers with content (so traffic can be monetized), the Conduit is the way that people engage with new media.

Yahoo!, as the 800 lbs Web 1.0 gorilla, represents access to vast amounts of users and traffic that can be monetized. They have consistently placed themselves as a media company, even going so far as to hire traditional media mogul Terry Semel as their CEO. While recently deposed and replaced with interim CEO (and Yahoo! founder) Jerry Yang, Semel's implemented strategy remains largely unchanged: Continue to 'portalize' their offerings and function as the entry point to the internet. If they can be the starting point after the conduit, they can commercialize or monetize the traffic they draw.

Google and Amazon, both of whom have made a business connecting commerce and content, are each exploring ways to extend themselves out into the ether; providing services to better draw and convert traffic into dollars.

Microsoft, Apple and Adobe are all engaged, in their own unique ways, in generating the mediums by with which the content and commerce connect with the conduit - i.e. the OS (Microsoft & Apple), the hardware (Apple and to a degree, Amazon), and Adobe (The rich-media platform).

Finally, Verizon (along with Comcast, AT&T and T-Mobile) in the US, along with major wireless and terrestrial providers around the globe are regarding themselves as the gatekeepers, and are beginning to recognize that access fee revenue (while perfunctory and profitable), are ultimately being threatened by commodification. They are seeking methods to monetize the traffic they deliver to content and commercial interests. This has led to the Net-Neutrality fight, and the rise of IPTV as a conduit.

Microsoft is waiting and seeing, as is their way, ready to use their muscle when they need. They made a (as-yet-incomplete) play for Yahoo!, hoping the union of their Web 2.5 vision and Yahoo!'s Web 1.0 stability would lead to security in the marketplace. Google is pressing Verizon to make good on its wireless ambitions, knowing they're in the best position to deliver next-generation services. Adobe is opening up itself to wireless and, yes, IPTV partners to secure its position as the content and commerce platform that can provide the richest end-user experience. and Apple? Well, as Cringley points out, they just want to control all three (consider the power of an Adobe-Apple-AT&T version of Content-Commerce-Conduit trifecta).

This ain't over, by a long shot. A laissez faire marketplace assures us a competitive landscape. A consolidated 3-C landscape assures us that only those with the right relationships or the right value will reach consumers. Devices like the iPhone (mobile/pervasive access), the XBOX360 (IPTV/Terrestrial access), and Verizon's proposed pervasive broadband network (upon which, of course, Google can deliver their own services), will ensure that these closed and semi-closed networks can control each of the 3 components of monetization. Moreover, they are seeking, in no small way, to dismiss the home-brew and open source communities.

By locking down the networks, not only do they each control the flow of information, they are also seeking to control the flow of cash across the Content-Commerce-Conduit value chain.

I, Cringely | Iron Man

All I can say is read this... To the end.

Comments forthcoming...

Link

It's Official: Rogers bringing iPhone to Canada

The Globe and Mail are reporting this morning that, as expected, Rogers is indeed going to carry the iPhone in Canada sometime "later this year." No word yet on whether or not there will be any movement on flat-rate data and voice plans (a hallmark of the Apple deal with AT&T and other carriers).

"'We're thrilled to announce that we have a deal with Apple to bring the iPhone to Canada later this year,' Rogers chief executive officer Ted Rogers said on Tuesday in a statement. 'We can't tell you any more about it right now, but stay tuned.'”

Taken in line with the recent commentary from Rogers Wireless Prez. Rob Bruce, I'm not sure that this deal has been fully fleshed out. It wouldn't be the first time that Rogers jumped the gun on this announcement tho...

Link to G&M Article

And Bringing Up The Rear...

Live Mesh, announced today, is Microsoft's version of the strategy I described in yesteraday's post. I'll reserve judgement until I've had a chance to read more, but from what I've seen thus far, it's likely that MS will not be great at the one thing that they'll need to do to make this work: Make it simple and transparent...

"Live Mesh embraces the industry trend toward "cloud computing" in which information is centrally stored on Web sites rather than on local devices, giving users easy access from any computer."

"The software will also let friends and colleagues collaborate and share documents more easily. For example, if a shared document is changed on a work computer, those changes will be instantly updated and available on any device or computer that the user has registered with Live Mesh."

Link to story
NYTimes Coverage
Link to Wired Blog Coverage

So I've been wondering...

...What is Apple's strategy with Safari, exactly?

Really... I mean with Firefox, Opera, IE, and others, what's the reason that Apple is aggressively entering the Browser wars? Marc Andreesen can tell you that IE is a monster to compete with, and Firefox is whomping butt in the space.

The other day, it struck me: Apple's pattern has thus far been to take open-ish standards, re-brand them and then build services around them. The examples are many: iTunes/iPod (mp3), iMovie/Quicktime (MOV/MPEG-4), iDVD (DVD), Airport(802.11x) - the list goes on.

Why a browser? Because a browser is, and this is important, just another kind of media player. If Apple wants to create an end-to-end new media publishing platform (and they seem to want to), they don't want to depend upon other platforms to support the technologies and engineering they want to apply in displaying their services.

OK, so Web2.0 is the 'platformization' of the Web. Services are delivered as web applications that deliver value through the 'cloud' in other channels. Those other channels include IPTV (AppleTV, XBOX, Wii) Mobile (iPhone, Blackberry, etc.), desktop apps (Adobe AIR, iPhoto), and so on. Consider YouTube: I can upload a video to YouTube, and it will almost instantly appear (formatted correctly) for each of these mediums!

Safari is Apple's play at creating a walled garden for their own (and their partners') web applications.

Then I saw this; an Apple patent for improving the online shopping experience by delivering more in-store-like eCommerce applications.

This would allow you to see what products people are looking at, and by clicking on one of the other visitor icons, customers could even ask questions to users about why they'd left one product or gone to another product. This visual representation can be used to help with live real-time changes in interest:

It looks like (and it really looks like) Apple is going to use Safari as a primary point of introduction to deliver Web2.0 services to their other devices. .Mac is already doing it! You can edit and organize photos in iPhoto that are then uploaded to .Mac (in addition to Facebook, Flickr, and others); you can edit and polish a video in iMovie and upload it to .Mac; you can create a Website and blog in iWeb to upload to .Mac; you can even create a compelling and moderately interactive video in Keynote and export it to Flash for inclusion in a .Mac Website!

All of this points to a circling of the Wagons around the big Long Tail brass ring: Democratized tools for producing and distributing user-generated media in the same platform and locus of the hit-driven stuff. The question remains to be seen: Will this play, and will users see the value. Moreover, will this lead to greater Mac, iPod, and iPhone sales, or will people demand that Apple 'open up?'