Lots of speculation going on out on the internets these days about the Apple Tablet. Everyone's going crazy. They're like "OMG! One week left!! What's it gonna look like? What's it gonna do? How much is it gonna cost? What are they gonna call it??"
Apple has done a great job of keeping this under wraps. No one really knows the fun parts of what the tablet is--except for people who have been given very clear instructions to keep their mouths shut. Based on everything that I don't know, it seems to me like the Tablet is going to be an iPod for a wider range of digital content. It will be an iPhone minus the phone, with a bigger screen--optimized for websites, movies, and digital publications. This is just a big duh.
What's really interesting to me is how Apple is going to make money, and quite honestly this tablet is going to be a money machine for Apple--even more than the iPod and iPhone mixed with iTunes. Let's take a look:
First, they sell you the tablet. My guess is that it will be cheaper than people expect. Many people are saying $1000, but I wouldn't be surprised if it's closer to $600. I don't want to go on about why I think it'll be so cheap, but take a moment and think about how HP Printers are like $80, and print cartridges (which have to be purchased over and over) cost $40. HP isn't making the money on the printer, and Apple isn't going to be making the money on the sale of tablets, just like AT&T doesn't make any money selling iPhones. UPDATE! This is now being backed up by Gizmodo. You read it here first.
So, you throw down your money, and you now have a shiny (of course!) tablet device. Of course, out of the box, it doesn't do too much. Sure, you can get online and add your contacts, but that's kinda boring. The tablet becomes a bit more interesting when you use it to download and view content. But first! Before that content gets on your shiny new tablet, let's take a look behind the scenes.
I'm a content provider. Let's call me the "New York Zeitgeist". I have tons of people on staff doing research and writing great stuff, and people love it. A long time ago, people were paying a premium price for that content printed on paper. In addition, people were paying big bucks for us to print their ads in there. Then, the internet happened, and to get with the times, I put all that content online. Of course, now the advertisers are still there, but the readers aren't paying anything for the content. It's OK in a way because I don't have to print as much, but those revenues just aren't what they used to be. Then, this California dude driving an SL-55 shows up at our offices with a halo over his head, and a magical device in his hands. When this guy talks, people listen.
Here's what he proposes:
Keep creating good content, there is a market for it.
Translate that content to digital, with some little spaces where we'll put ads.
Charge a small fee for access to that content.
Sit back and relax while our device figures out who is reading the content, and what media they consume. Meanwhile, we've got a whole ton of advertisers paying big bucks to be placed in those ad spaces.
Next, a user views your content on our device, and they're shown ads that reflect their taste.
You get paid. CPM = An amount per 1000 views. CPC = Anytime a user clicks an ad. CPA = Everytime a user clicks an ad and makes a purchase.
In the past, you got paid for ads one time, but you had to continue to create content to keep that money coming. Now, you create the content once, and the money keeps coming. Forever.
You don't need to waste money and resources to print. You don't need to spend big bucks to distribute your content. We just built a fat data center to handle all that. We'll collect $ from the advertisers, and we'll pass it over to you.
Your troubles are over. Oh, and welcome to the future, print media.
...And of course Apple. They're taking a little chunk of every ad that gets displayed. Every app that's sold, every movie, every song. Remember Apple's cross-town rivals named Google? Apple is gonna be Google 2.0, except instead of serving ads on questionable SEO'd content, they'll be serving ads on quality content from publications we trust.
When you get your new, shiny Apple tablet in just a few short months, you can bet that the first thing you'll want to do is log on to their all-new content delivery service (whether it's called iTunes or something else), where you'll be exposed to ads from Quattro (which will probably have a cooler name soon), all served from their massive data center in North Carolina. The app/music store model has done very well for Apple, and you can bet that this new device will be Apple's biggest win yet.
No wonder analysts are saying the Apple stock is headed to $1000.
MD on January 22nd, 2010 at 9:53 pm says:
The problem here is: so what? Isn’t “ads” what the web does already? How different is this content?
The key is to get people to pay for content. If Apple uses ITunes store to do so, THEN they will have hit the gold mine. Nobody has really done that yet, except in very specialized circumstances. But even if I pay $7 for The Economist or Scientific American or Atlantic or People magazines, will I pay even half that for an electronic copy? Will it be portable, or will it (like iTunes today) need to be sufficiently unlocked that I can read it on any of my 5 computers of various makes and my iPhone too?
The people who paid $20 for a CD will pay iTunes $10 for an electronic version; but usually prefer $1 for a single tune. Will iTunes sell individual articles out of New Yorker or Altantic? For what? 50 cents each? A dollar? Does this mean the equivalent content will disappear from the “free web”? Which of New Yorker’s 50 pages of ads will appear with my article? Or will dynamic user-to-ad matching be one of the included iTunes services?
If Jobs can pull it off, good luck to him, much as I would hate to see the free web disappear!
I still have not paid for single online song, let alone ring tone or movie. I still buy the occasional CD and buy or rent DVDs frequently, but I dislike paying almost the same amount for content that it know cost the supplier significantly less.
Really – what is the real value of a file downloaded (no different than a picture or video on a free web site) vs. shipping a disc through 3 layers of wholesalers and sitting it on a store shelf for a week or 10? I just don’t see the “worth” of downloads.
Alan on January 23rd, 2010 at 7:52 pm says:
I feel like the professional publishers (People like the NY Times, et. al) are tired of giving their content away for free. The NY Times already has stated they they’re going to begin charging for their content, and I expect many other publishers to follow suit. The Apple Tablet is going to make this “OK” with the consuming public. It’s kinda like with music, we had physical media (records, CDs), then we had MP3s, and music was free for a few years. Then, we had Apple come in with iTunes, and because the experience was so much better than trying to download music through P2P, people were OK paying the $1 per song. Let’s face it–free websites are obnoxiously loud. We’ve got ridiculous ads all over the place, crowded interfaces, slow loading times, scripts, flash, etc. all running all over the place. What ever happened to just words and pictures? The Tablet is going to return the elegant design that print media is famous for, without all the noise, and I think that’s worth paying for–especially since the content is excellent quality than much of the stuff out on the web.