On July 16th, Apple held a press conference to discuss the iPhone 4′s antenna. On the whole, Apple’s approach was good—they explained what the problem was and how they would resolve it for customers. Providing a free case for anyone experiencing signal attenuation is a sufficient gesture.

Nonetheless, Apple made two errors—one serious, and one slightly less so.

The slightly smaller mistake was made at the press conference itself. Apple not only explained what was causing signal attenuation on the iPhone 4, but did two things: they tried to argue the media was looking for a good story rather than reporting things factually (effectively positioning Apple as the victim) and that this problem isn’t unique to the iPhone 4, but is an industry-wide problem.

While it may be accurate that the media dramatized the story, and it is somewhat unfair that Apple garnered so much criticism over it when most phones exhibit similar issues, they did so because Apple is different than RIM, HTC and Motorola. Consumers expect those companies to put out products with issues, because that’s how most companies work. They put out products with problems, but consumers either don’t notice them or ignore them. But because Apple is so good at what they do, and we buy Apple products not just because they are functional but because Apple puts so much effort into their design. Apple has become a symbol of exceptionality, of making something whose quality and detail is beyond what we expect. Any issues become a lot more glaring in that case.

Apple made a mistake in arguing “hey, everyone else has this problem, too” because they aren’t everyone else, and they shouldn’t want to be. They should accept their unique position, acknowledge there is a real issue (whether it was a conscious trade-off they made or not) and move on. “They did it, too” is never a valid excuse when your entire advantage is your uniqueness.

The second, and more damaging, mistake Apple made was early on. When the iPhone 4 was released and the signal attenuation story was just breaking, Apple put out a response basically saying most phones experience this problem and that users should just avoid holding the bottom-left corner.

Well, first, no, not all phones experience this problem. While all phones do suffer signal degradation if your hand covers the antenna, the iPhone 4′s signal degradation is much worse than comparable phones. Anandtech compared the iPhone 4′s signal degradation to the iPhone 3GS and HTC Nexus One, and the iPhone 4′s signal was reduced much more significantly than the other two. This doesn’t result from some forced, awkward way of holding the phone, either—it results from holding the iPhone 4 so the bottom-left seam touches your hand, and in use it results in more dropped calls. When held like this (the natural way I hold my iPhone), my iPhone 4 will garble or drop calls where my iPhone 3G had no problem holding a connection.

Worse, though, Apple didn’t get out ahead of the problem. By refusing to acknowledge there was a problem at all, Apple allowed this to develop into a full-blown controversy. We’ve all experienced it—over the past few weeks, people who see me using my iPhone 4 don’t ask me how great the screen is but whether I have the antenna issue. Apple chose to allow this to develop by not acknowledging the issue immediately.

That’s the worst mistake a company can make when they have a potential disaster and the impact has been clear. The iPhone 4 has still been a terrific success, but the antenna issue is a black mark on what is Apple’s most successful product launch ever. Sometimes, even Apple needs to show a little humility.

In defending their healthcare “reform” bill passed in March, the Obama administration is arguing the individual mandate is constitutional because it is a tax:

In a brief defending the law, the Justice Department says the requirement for people to carry insurance or pay the penalty is “a valid exercise” of Congress’s power to impose taxes.

Congress can use its taxing power “even for purposes that would exceed its powers under other provisions” of the Constitution, the department said. For more than a century, it added, the Supreme Court has held that Congress can tax activities that it could not reach by using its power to regulate commerce.

I’ll just get the tragically amusing part of this in real quick, because it isn’t what I want to focus on. During the push for their bill, Obama insisted the mandate wasn’t a tax, because it would amount to a tax increase and thus would violate his pledge not to raise taxes on individuals with less than $250,000 of income. So he lied to get his bill passed. I’m sure you’re shocked.

But what concerns me more about this story is the final line of the above quoted section. Congress has the power to levy taxes to provide for the general welfare of the nation, and the article goes on to say that in the Supreme Court’s decision on Social Security, they held that it is Congress’s duty to decide what is for the general welfare, not the courts’. Thus, the Obama administration argues, the individual mandate is constitutional because Congress has decided this tax is toward the general welfare of the nation.

Think about that for a second. Under the Supreme Court’s 1937 decision, Congress is free to levy a tax on almost anything it wants—provided they believe it to be in the “general welfare” of the nation—and there’s no check against it. There’s no court that can overturn it, no legal test to decide whether something is toward the general welfare of the nation, nothing. The court completely abdicated its power to Congress.¹

A tax is an incredibly powerful tool in influencing societal behavior. If the individual mandate, which requires every American to purchase health insurance or be fined, is constitutional, then why can’t Congress tax anyone who doesn’t donate x percentage of their income to charity each year? Why can’t Congress tax companies without unionized labor? Why can’t Congress tax music or filmmakers whose work is deemed indecent or obscene, to discourage their polluting of society?

A “tax” is not just a means for government to raise revenue. The power to tax is also a bludgeoning tool to make certain practices prohibitively expensive for people to do so they are less likely to do it. Basically, it’s a tool for government to control individual behavior. Using the power of taxation in this way is terribly contradictory to the spirit of the Constitution and the intent of our nation: to allow people to live their lives how they choose, without a government dictating to them. It is an end-run around the Constitution, which was created to limit the federal government’s power to very specifically defined powers. As interpreted, and as used by the Obama administration to justify their individual mandate, the power of taxation becomes an arbitrary power for Congress to control society however it pleases.

This should be quite disturbing for all Americans, including people who support the Democrats’ healthcare “reform.” In this case, you might believe being forced to purchase health insurance is a small price to pay for covering the medical needs of more Americans. But please remember, you may not like some of the controlling and authoritarian laws this produces in the future. Your guy will not always be in office. This marks the road toward authoritarianism, and it is a trail of tears no matter what your party.

1. Please note that the Supreme Court could, technically, overturn this decision. But under current case-law, this holds true. ↩

For my final undergraduate business paper, I wrote an analysis of Apple as it transforms into a mobile company. I am posting it here in its entirety (except for financial exhibits) below.

Especially since they released the iPhone in 2007, Apple has been spectacularly successful. In 2009, sales totaled more than $36 billion, compared to just $5.3 billion in 2001, and their market capitalization is nearing Microsoft’s. This growth is driven by incredible iPhone and iPod touch sales and Windows users switching to Macs. In second quarter 2010, for example, Mac sales increased by thirty-three percent.

Mac sales, though, offer little future opportunity. The PC is a mature market with little growth and innovation potential. Therefore, Apple should be looking toward other markets to offer their next growth opportunity. Apple started down this road with the iPhone in 2007 and it has proved to be the next growth market. In 2010, just three years after its release, iPhone sales now account for a greater percentage of Apple’s net sales than Macintosh sales. As such, since the PC is mature and mobile devices are the future, Apple should shift to a mobile focus. Their goal should be to define what these mobile devices are and take a controlling share of the market.

This paper will consider Apple’s purpose, briefly look at what Apple has done recently, what corporate strategy they need to achieve success in the mobile market, and finally what their mobile business strategy should be.

Changing Things

In Apple’s 1997 “Think Different” ad campaign, the narrator declared, “And while some may see them as the crazy ones, we see genius. Because the people who are crazy enough to think they can change the world, are the ones who do.” The ad was referring to a number of the twentieth century’s great minds, but it aptly captures Apple’s purpose: to change the world for the better. Bill Gates spoke of a computer on every desk, while Steve Jobs spoke of computers as “bicycles for the mind”. For Apple, creating computer devices is not their ultimate purpose. Rather, they are a means for changing things.

With each major new product, Apple has either created a new product type or completely changed an existing one. The Macintosh was the first personal computer as we know it; the iPod defined the MP3 player; iTunes changed the music business; and the iPhone has done it for mobile devices.

Apple’s purpose also informs their overall strategy. In Leading with Purpose, Richard Ellsworth writes,

Purpose brings meaning to the eternal environment. It provides individuals with the assumptions and beliefs that form the lenses through which they view external circumstances (94).

Because they are seeking to make a significant impact, Apple should choose markets or product types that are ready for radical change. In Management, Peter Drucker argues there are two ways to do this. First, companies can look for “discontinuities” in society that can be exploited, and two they can impose a vision of the future on the status quo that will shape what is to come (113-114). Apple tends to be somewhere between these two; for example, the smartphone certainly existed before the iPhone, but its full potential was not realized until Apple released the iPhone. Apple imposed its vision of what smartphones should be on the industry. This also means that Apple’s overall strategy is differentiation—their products are substantially better than and different from competing products, and as a result, they should seek higher profit margins.

Recent History

While announcing the iPad in January 2010, Steve Jobs declared Apple the world’s biggest mobile devices company in the world by revenue. This claim was a bit of a stretch, as it includes revenue from Mac notebooks, but it indicates how Apple conceptualizes their company.

The iPad, a tablet device based on the iPhone OS, was released on April 3. The release was very successful; in a month, they sold more than a million units. This is especially impressive because the iPad is a completely new type of device—unlike the iPod and iPhone, Apple is creating this device type.¹ Apple has, for the first time since the Macintosh, created a successful new device type.

It has defined what a tablet is. It is a device designed specifically for touch input, for media consumption (text, video, music, web browsing) and for alternative creative work (“painting,” for example).

Mobile is the Future

Apple is becoming a mobile computing company. There is good reason for this. The personal computer, Apple’s main business until this year, is a mature market. U.S. sales of PCs, for example, only grew by 5.3 percent in 2007. This means growth for Macintosh sales must result primarily from converting Windows users rather than organic growth. Just as important, the PC has matured as a device, which leaves little room for Apple to do what it does best—innovate. Apple’s desktop and notebook lines have not changed substantially in their design since 2003. Apple has introduced innovations in recent years, such as multi-touch trackpads and substantially better batteries than their competitors, but these are not the huge leap forwards Apple prefers to introduce. They are improvements to a relatively static set of devices.

The mobile market, though, is wide open. Gartner expects worldwide smartphone sales to grow to 525 million units in 2012 from 179 million units in 2009, and this is just smartphones, a single kind of mobile device. This is an incredible growth market for the future. This is confirmed by the iPhone’s success. In the second quarter of 2010, iPhone sales overtook Mac sales.

 More important for Apple, though, there is incredible opportunity for significant innovation. Apple redefined what a smartphone is with the iPhone, and since these devices are so new, has the opportunity to continually do so for these devices.

How should they do this, though? To answer that, we will first consider their corporate strategy.

Corporate Strategy

In Corporate Strategy, Collis and Montgomery explain there are two kinds of diversification—linked and constrained. Companies using linked diversification enter new businesses when it relates in some way to another business they are already in (it is linked to it), but does not necessarily have any connection to their other businesses. If they are using constrained diversification, however, they only enter a new business if it is based on their core resources or competencies. Companies based on linked diversification have little coherence to their overall corporate strategy, while companies using constrained diversification tend to be more focused. Constrained diversification allows companies to maximize the effect of their resources because they are shared (100).

Apple uses constrained diversification. Apple is, inherently, a personal computer company (hardware and software), and their businesses utilize their competencies in developing hardware and software. The Macintosh, iPad, iPhone, iPod and AppleTV are all computers, which allows Apple to share resources between businesses. For example, the Macintosh, iPad, iPhone and AppleTV all run OS X, Apple’s operating system. This creates economies of scope, which, Collis and Montgomery point out, create cost savings for the company because their resources are shared across multiple businesses (72).

Rather than just have related businesses, though, each business is a focused platform with no extraneous products or product types. The Macintosh, for example, consists of two kinds—desktop and notebook. These separate product lines each share resources and complement each other. The iMac and MacBook Pro are both primarily constructed from aluminum and glass, so not only do they share the same materials (which reduces costs), but they resemble each other, creating unity between product lines.

Each platform, too, complements the other. Apple’s Macintosh computers sync their media and personal data (calendar, contacts, email) seamlessly with the other platforms. Because they work so well together, owning products from each platform benefits users by creating an experience where their devices “just work.”

The platform advantage does not apply just to Apple’s devices. Through iTunes, users can purchase music, movies and television shows that syncs across all of their devices, or even do so from their iPhone or iPad. The App Store allows users to download applications for their iPhones and iPads wherever they are, and now the iBook Store, released in April, will allow them to do the same with books.

Because Apple has chosen what businesses to enter carefully, these platforms reinforce the others and make them more powerful. The sum is greater than the parts. This creates a complete package for consumers to choose, and it is difficult for competitors to match. Their platform strategy makes each individual business more valuable than it would be as a separate entity.

Their strategy can be improved, however. Currently, MobileMe—a service Apple offers that keeps contacts, calendar, and email in sync across multiple devices over the air—is a premium service that costs $99 per year. This is the wrong approach. Rather than a premium service, MobileMe should be free and integrated into Apple’s platforms. MobileMe should act like the “glue” that integrates the platforms and as a draw for users. Apple’s goal should be to get as many MobileMe users as possible. Once someone is happily using MobileMe across their various devices, they are less likely to switch to a competitor’s product.

The iBook Store, too, can be much more. At the moment, it is just that—a book store. Instead, it should become a print media platform for books, text books, newspapers and magazines. The print industry is at a juncture in its history, where it is switching from print to digital. The digital print industry is in its infancy, but is vital for the future. This provides Apple a significant opportunity to establish its platform as the preeminent one.

This fits Apple’s platform strategy well. With iTunes, Apple’s intent is to make the major forms of media used on their devices immediately and easily available, and the iPad is positioned as a reading device and is perfect for it. Establishing the best print media platform would strengthen their media offering and make the iPad much more convincing as a device.

Mobile Business Strategy

Apple’s goal for their mobile business should not be to take a Microsoft-like monopoly of the industry, but rather to take a sizable portion—twenty-five to thirty percent or so. Since Apple is fundamentally about innovation, differentiation, they can seek high profit margins, and thus do not need overwhelming market share. Strong profit margins allow them to have a high percentage of the industry’s profit share without a corresponding market share.

It should be asked, then, why they should seek a market share as high as twenty-five to thirty percent if they are targeting higher profit rather than market share. The reason is that some level of market share is necessary to attract developers, both in quantity and quality, to develop for the platform. Just like for the PC, a solid group of third-party developers is necessary for a mobile platform’s success.²

Gaining market share, however, should not be Apple’s primary goal—it is just a means. Market share today does not guarantee market share tomorrow. Rather, Apple’s goal should be to define what these devices are, again and again, so the competition responds to Apple. Peter Drucker wrote that “What makes the future happen is always a business’s embodiment of an idea of a different economy, a different technology, a different society. It need not be a big idea; but it must be one that differs from the norm of today” (117). This means defining what the devices are (e.g., a pocket-sized device, or a tablet-sized device), and what they do. Apple must do this through constant innovation.

By constantly defining what these devices are and what they do, Apple can secure for itself the role of industry innovator, and thus a position of strength. If they are constantly redefining the industry, they do not need overwhelming market share.

The iPhone’s release in 2007 is a perfect example. Before the iPhone, no smartphones used touch as a primary means of input. After its release, however, most smartphones use large touch screens and even resemble the iPhone.

 The similarities extend to the software, too. They try to match the iPhone’s features—specifically, its excellent web browser and the App Store. The iPhone defined what smartphone devices are (all screen, touch input) and what they do (browse the web, run user-downloadable applications). Competitors have tried to make incremental improvements, such as a higher-resolution screen or a physical keyboard, but none have made serious changes to the basic definition laid out by Apple in 2007.

There is an interesting parallel between the nascent mobile market and the personal computer market of the mid-1980s. Apple dominated the early personal computer market with integrated hardware and software (only Macintosh ran Mac OS, so consumers could only use the Mac OS by purchasing a Macintosh), but Microsoft licensed its operating system to any computer manufacture who wanted it. Microsoft ended up dominating the market.

In the mobile market, Apple is following a similar path as it did with the Mac: hardware and software are integrated. With Android OS, however, Google is using Microsoft’s strategy (with a few differences). In an attempt to grab market share, Google allows any device manufactures to use Android on their smartphones. By giving away the operating system and taking a majority of the market, Google can ensure a place for the company in the mobile market, entice developers to their platform and commoditize their competitor’s main advantage—the operating system.

They are grabbing significant market share in the smartphone market. In first quarter 2010, Android’s market share grew to twenty-eight percent, up from twenty percent in fourth quarter 2009. Apple’s market share in the same period stood at twenty-one percent.³ Going forward, Android’s success may come at the expense of Apple’s own market share, and thus could marginalize the platform. The question, then, is whether Apple should follow Google’s strategy and license the iPhone OS to other companies in an attempt to negate Android’s advantage.

This is not the proper strategy. Apple’s basic business model is to sell hardware. Everything else—the operating system, iTunes, the App Store—are used to make their products more valuable and thus to increase hardware sales. Apple enjoys high profit margins on their products not because the hardware is better than what others offer (although that is a part of it), but primarily because their software is better. At the 2007 All Things Digital conference, Steve Jobs said,

If you look at what a Mac is, it’s OS X, right? It’s in a beautiful box, but it’s OS X. And if you look at what an iPhone will hopefully be, it’s software.

If Apple were to license the iPhone OS to other manufactures, this would give away their hardware’s main advantage and thus significantly cut into their sales. Apple would have to find a different business model.

In Leading the Revolution, though, Gary Hamel provides an even more compelling answer. Hamel wrote,

What is not different is not strategic. To the extent that strategy is the quest for above-average profits, it is entirely about variety—not just in one or two areas, but in all components of the business model (72).

If Apple merely follows Google’s strategy, but plans just to do it better, they are playing on Google’s terms, and that is a difficult game to win.

Instead, Apple should differentiate the platform. Because the Android platform is spread over a large number of devices and manufactures, it is necessarily fragmented. Some devices have 3.5 inch screens while others are 4.3 inches; some have track balls; some have hardware keyboards while others do not. Worse, because Android devices are manufactured by different companies with unique versions of the operating system, and are dependent on them for software upgrades, some Android phones are stuck on older versions of the operating system that cannot take advantage of new features or applications. This is confusing for users and makes it difficult for developers to build applications that can run on the entire platform. Android may have twenty-eight percent of the market in the last quarter, but developers can only build applications for a portion of those devices. This is terrible for users and developers.

Apple’s hardware-software integration strategy eliminates this problem. Because Apple controls the iPhone’s hardware and software, they can guarantee that users can access operating system updates immediately and that the hardware characteristics are uniform across the entire platform. For developers, this means if their application is on the App Store, every iPhone user can use their application, and for users, this means if an application is available on the store, they can use it.⁴ They do not have to worry whether their iPhone is stuck with an outdated version of the operating system, or whether their hardware is incompatible with the application. They just use it.

Their integration strategy provides other advantages as well. By controlling the hardware and software, Apple can guarantee a level of quality their competitors cannot. Moreover, they can build hardware and software features their competitors cannot access, and thus make their products more valuable. For example, the iPad’s battery lasts for ten hours of use. For its weight, thickness and price, this is an incredible advantage over competing devices, and it is due to Apple’s own battery and processor technology. Apple is doing this in software, too, with iPhone OS 4 (announced in April), and recent acquisitions like Siri, a natural speech recognition company.

Controlling the hardware and software together is the best way for Apple to differentiate their products, because they can guarantee the quality of their devices and create innovations and features exclusive to the platform. This not only is Apple’s best strategy for succeeding in the mobile market, but it serves their goal of constantly re-defining it. Controlling the hardware and software allows them to make substantial changes quickly—there are no other manufactures to deal with.

1. “Tablet computers” released in 2003 were not tablets in the current sense of the term, but rather notebook computers with touch screens. They are very different devices and should be understood as such. ↩
2. It should be noted that while market share is important for this (developers do not want to build applications for insignificant platforms), excellent developer tools and environment is even more important. That is outside the scope of this paper, however. ↩
3. This is somewhat misleading, though, because it excludes iPod touch devices, and they are estimates. The trend it indicates is what matters, and other estimates—such as Gartner’s—agree. Android is gaining significant market share. ↩
4. This is somewhat overstated. The iPhone platform has some fragmentation as well, due to improved processing speeds in newer iPhones and new hardware capabilities, but this fragmentation is immaterial compared to Android’s. ↩

Last year, I assembled my best articles from 2008, designed a book, and made it available on Blurb. It turned out really well–but because printing something with high quality paper, ink and binding is expensive, it costed $26. Ouch.

A lot has changed in the past year, however. In mid 2009, reading ebooks was a very new (and small) thing. No one knew how many Kindles were in use and the Kindle application for iPhone was just getting started. Publishing a book exclusively for digital devices was not a great idea.

But things have changed. We now know there are something like 3 million Kindles, 100 million iOS devices, and more specifically, more than 2 million iPads sold in just a few months. These devices are all great for reading digital content. I’ve read several books on my iPhone and iPad.

So: I am doing TightWind in Print for 2009, but there is no print. No paper, no ink, no time spent waiting for the book to arrive (and no plane and truck used to deliver it). It is instant.

I’ve taken my best articles from 2009, assembled them into a book, and published it on the Kindle store. It’s a fantastic way to read the articles; I’ve been reading it (and fixing formatting errors) on my iPad for the past week.

Here it is. You can read it on all of your devices, wherever you are, like you would a good book. But here’s the best part: it’s only $4.99.

I’m really excited about this. Hopefully you will be, too.

Apple announced the next iPhone today, and they characterized it as the biggest update since the original iPhone’s release in 2007. I don’t think that’s hyperbole.

Although Apple is certainly padding the iPhone’s feature list with this release, they aren’t attempting to compete with Android phones feature-by-feature. Instead, they are trying to continually redefine exactly what a smartphone is, and thus force their competitors to compete on Apple’s terms. They’re trying to make everyone else respond to them, rather than the other way around.

iPhone 4′s new screen is a perfect example. While several Android phones have high-resolution screens, iPhone 4′s dwarfs it. With 326 pixels-per-inch, it is difficult to even see the screen’s pixels. Think about what that means for your videos, photos and, more importantly, text. Reading text on this device is going to be incredible. It will be more like reading a beautifully-printed page than a screen. Moreover, it uses an IPS screen (like the iMac and iPad), so almost any viewing angle is readable.

The camera, too, received a fabulous update. iPhone 4 takes five-megapixel photos, and can record 720P video. Rather than cram on a small, mediocre sensor that is technically five-megapixels, but takes subpar photos due to the sensor’s size, Apple increased the photo sensor’s size. This is the attention to detail Apple has that its competitors struggle to match: rather than add a feature so they can lengthen the feature list, Apple ensures the feature is a solid improvement over what came before. Apple is interested in making a truly great product, not just selling it.

The device’s industrial design is another example. Just look at it–it is beautiful. Who else’s phones have a stainless steel chassis that also serves as the antenna, or glass exterior that can stand up to a lot of abuse?¹ Who else builds a phone that is not only brilliantly functional, but legitimately a piece of art?

No one is. No other device even approaches iPhone 4′s industrial design, nor its screen. While Apple’s competitors are building phones, functional but cold, Apple is building something alive. You can see the work that went into every inch of it, the obsession Apple has with coming as close to perfection as they can. This is what I love about them–they never settle, and never accept something as good enough. Nothing is good enough for them, and they work relentlessly in the pursuit of perfection. There is little more admirable than that.

1. Watch the stress test in the iPhone 4 video. It is incredible what the glass can withstand. ↩

There is a reason Apple included their new advertising platform, iAd, as one of iPhone OS 4′s seven “tent pole” features. Apple’s future is mobile devices, and iAd is an integral part of their goal to define the mobile market.

Google’s Threat

Apple’s strong response to Google in the past few months isn’t a surprise. Google, like Apple, knows the next big market is mobile devices. Both companies have prioritized their mobile platforms, and are trying to define the market. But while their general goals are the same, their strategies are quite different.

Apple’s strategy is hardware-based. Apple profits primarily by selling iPhone, iPod touch and iPad devices. They do not make much money from content–application–sales. Rather, the iPhone OS and the App Store are the primary reasons people buy iPhone-devices. They make money by selling their own hardware, but the selling feature is the OS. As such, Apple will not license out the OS. Even though this would increase market share substantially with little work, it would commoditize the iPhone’s biggest advantage, the OS, and would thus destroy the platform.

Google’s main source of revenue, though, is through advertisement. Their Android OS is a means. Google allows anyone to use Android because they do want to have a majority of market share, and they want it so everyone will use Google services. If most mobile devices run their OS, and they are using Google’s services, then they are tied to Google and are subject to Google advertisements. This is how they intend to control advertising in the mobile market.

Whereas the iPhone OS is Apple’s central advantage, Android is Google’s loss leader. Android is what gets you in the store, so you use their services and see their ads. For Google, then, commoditizing the OS benefits them. Allowing anyone to use Android for free hurts Apple’s competitive advantage. In fact, this is Google’s general strategy–commoditize their competitors’ main businesses. Chrome OS, Android, Google Docs, Google Maps Navigation–they all commoditize one of their competitors’ businesses.

Google does not want Android to be a mere player in mobile devices, peacefully coexisting with other competitors. Google wants Android to dominate the market, and that threatens Apple’s entire future.

Attacking Back

That is the context for iAd. When Jobs explained why Apple created iAd, he said that on mobile devices, people don’t use search–they use applications. This means, Jobs argues, that advertising must be centered around applications on mobile devices.

This is the weakness Apple sees in Google, and Apple’s advantage. Until Google bought AdMob, Google had very little presence in mobile advertising. But even with AdMob, their mobile advertising is weak. AdMob’s ads are fundamentally poor–they are little more than banner ads displayed in applications.

Jobs emphasized that there will soon be 100 million devices running the iPhone OS because they want mobile to be the platform advertisers focus on. And the reason is that Apple has an advantage over Google in the mobile market.

Through iAd, Apple wants to threaten Google’s main business in the mobile market (and thus their future). Google is the established and untouchable leader of advertising on the web, but on mobile devices, they are weak. Their offering is poor. A convincing advertising platform will make the iPhone much more attractive to advertisers.

Apple plans to do this by reinventing mass-market ads. Rather than just show banner images, Apple wants advertisers to create interactive mini-applications that engage users and provide something useful. At the iPhone OS 4 special event, Jobs showed off a mock Toy Story 3 ad that allows users to look at the characters, download wallpaper, watch clips, purchase a game, and check movie times. This is a very different kind of advertising than Google provides, which creates an advantage for the iPhone. If done well, ads of these sort should be much more engaging than mere text and banner ads. This provides a better return for advertisers, and higher rates for application developers that include these ads in their applications.

If companies choose to advertise on the iPhone in place of competitors, the iPhone will be much more likely to become a market standard, and it will crimp Google’s advertising business in the next largest market. By threatening Google’s main business, Apple can marginalize Android, the main threat to the iPhone.

Apple has little choice but to enter advertising. For the iPhone to define the mobile market, it requires a great way for companies to advertise on it. Even more important, though, is Google has made it their strategy to destroy the iPhone with Android. Because the iPhone is the future of Apple, they must try to strengthen their own platform and hurt Android. The Mac will continue to grow, but the PC market has reached its apogee. Apple will do everything it can to make their future, the iPhone, as strong as possible.

There are a number of interesting angles to analyze Apple’s new advertising platform, iAd. What I want to focus on, though, is what it means for how advertising is conducted, and what advertising should be.

Apple’s proposition is that ads, to be most effective, must be emotional and interactive. When Jobs talked about emotion in an ad, what he was really saying is ads need to be convincing and real–something in it must grab you. Something in it has to resonate with you.

That’s exactly right. All good advertisement does this. Apple’s “Think Different” campaign was effective because it was genuine. At its heart, Apple believes in changing society, in improving our lives. They don’t like making devices for the sake of making them. They like it because it is a medium for change. Watch Jonathan Ive talk about designing the iPad, and you’ll see it. This was immediately clear in the campaign, and it clicked with people that believe in creating.

All advertisement, in some way, must convey what’s genuinely special about the product, service or company to the viewer. If it doesn’t do that, it’s a waste of time. That’s the important part of what Apple’s trying to do: they want to create an advertising platform for quality ads that are actually worth looking at.

Ads do not need to be interactive to be emotional. Indeed, there are many cases where a simple image, or question, is much more convincing than something the user can manipulate. How convincing an ad is depends on the content of it primarily, not how it is presented. Interaction certainly does not equal emotion.

That isn’t why Apple wants ads to be interactive, however. Interactivity can amplify how convincing an ad is, if done well. Look at the Toy Story 3 ad Jobs demoed during the iPhone OS 4 event. The character browser, video, and especially the local showtimes for the film, make the ad much more useful to the viewer. They can get insight into the film, and then decide if they want to go see it–all without leaving the “ad.” Apple wants interactive ads because, if done well, it transforms ads into something immediately beneficial. The Toy Story 3 ad isn’t just seeking to plant its name in your memory, but to give you useful information on the film.

That’s a big step for mass-market advertisement. We all are better off–viewers, advertisers–with unobtrusive adverts that provide useful information, and Apple should be commended for it.

There is only so much you can do with mass-market advertisement, though. These are, fundamentally, still advertisements–that is, something asking for our attention that we really aren’t that interested in. Advertising can do better than this.

I use Fusion Ads on TightWind because I trust Chris Bowler and Michael Mistretta. I know them, I know what motivates and interests them, and so I also know that if they allow someone to advertise on their network, there is a good chance whatever that person is doing will excite me, and my readers. Fusion isn’t an ad network. They’re a recommendation network.

That’s completely different than what iAd does. At best, iAd will provide advertisements for things I’m not really that interested in, but do so in a respectful and useful way. Fusion, though, knows what excites me and my readers, because they get excited over the same things, and so they can tell me there’s someone doing something that I’m likely to be genuinely interested in.

Yes, they’re paid to do so, but that doesn’t really matter, because they have standards. Their entire business is dependent on choosing advertisers that are relevant to their readers. They could make a lot of money by accepting anyone and everyone who wants to advertise on the Fusion network, but it would only be a few months before their network members and readers complain or, worse, stop paying attention to the ads. Once they’ve lost the trust of their network and readers, they’re finished.

That is what is so special about Fusion and the Deck. They rely entirely on that trust–the trust that they are just as excited by these things as the reader is, and they only accept advertisers who meet that standard. That’s the difference between mass-market advertisement and recommendation networks: mass-market advertisement is agnostic to the advertiser. If someone provides enough money and meets minimal standards, they’re in. Recommendation networks, though, know exactly who they are advertising to, because really their audience are people just like themselves, and they are exceedingly picky about who they let in.

That’s what advertising should be. Advertising as recommendations is an added service, rather than just an annoyance readers put up with. Fusion and the Deck add to the sites they’re on, because the ads are convincing. They are unobtrusive ads for things readers are actually interested in. That’s emotional.

And that’s also why iAd, as much as it is a step forward for mass-market advertisements, ultimately will not fully achieve the emotion Apple wants it to. The platform, even if it has high quality standards and seeks to make ads useful, will still accept almost anyone who wants to be on it. iAd is just that–ads. Fusion and the Deck are a service to readers in the guise of adverts.

So here’s what’s new in iPhone OS 4: multitasking, application folders, Mail updates, iBooks, and iAds.

Multitasking sounds good. You can double-click the home button, and a dock will pop up with all running applications. When applications are “running,” though, they aren’t taking processor cycles–it saves its state, and opens it up again immediately when you move back to it. For applications that need to do things while they’re not open, Apple has built several multi-tasking services for them to tap into. There’s background audio, so applications like Pandora can continue playing music when not open; VoIP, so Skype can receive calls and text messages; background location service, so applications like Loopt can receive location updates without running; task completion, so if you close an application while it is uploading a photo it can complete the process in the background; and fast app switching (mentioned above).

That’s big. Applications should be able to multitask without using as much power and processing cycles as merely letting them run in the background would.

It sounds like, though, that notifications are going to increase even more. These are already a problem. If you’re using another application and a notification pops up, you either have to stop what you are doing to deal with it, or dismiss it and go and find the application when you’re done. This is fine when the only notifications you receive are text messages and calendar reminders, but this hasn’t scaled with third-party notifications. It’s distracting and poorly done.

Apple didn’t announce a new notifications scheme to deal with this. That’s what OS 3 needed most, let alone OS 4.

Mail is receiving some great updates. Unified inbox, message threading, and the ability to open third-party attachments in their application.

“iAds” is, along with multitasking, the most important update in OS 4. Rather than unobtrusive ads, Apple is building interactive, mini-application ads. They showed a few examples; one of them was a Toy Story 3 ad that lets you look through characters, videos, and posters for the film, play a small game, and check local showtimes.

Jobs says they want ads that are interactive and have “emotion,” too. The ad concepts are interesting, and could be convincing–but this still has the same problem all mass-market ads have: they aren’t targeted to the user. Fusion Ads and the Deck work because they know what readers and users are interested in, and so the companies advertising are directly relevant to them.

Apple got part of it right–ads need to be meaningful and useful–but being relevant is just as important for ads to be useful. At this point, they’re still delivering ads, whereas Fusion and the Deck are more delivering recommendations than they are ads. There’s a big difference, and I suspect many developers would rather use ad services like them rather than iAds. There should be room for both on the device.

I’ll have some more thoughts on iAds specifically later on.

OS 4 is a solid update. Multitasking looks solid, Mail received some great updates, and iAds is an interesting, if imperfect, entrance into advertising. Nonetheless, Apple needs to address the notifications scheme. That is the OS’s biggest liability at the moment.

Surprisingly, the iPad received more hype than the iPhone did. Even more than with the iPhone, Apple is taking a huge risk. With the iPhone, Apple created a completely new device, but it was still fundamentally a mobile phone, and it was a well-established market. The iPad, however, is creating a new product category.

We have had tablet computers for years, but save for a few niche uses, no one bought them. As far as we should be concerned, it was a non-existent product category. There are difficult questions to answer about tablet devices—should they be a full computer with a touch screen, or designed—both hardware and software—to work based on the new input mechanism?

Apple has decided on the latter. The iPad is designed around touch, and as a result, loses a lot of a regular computer’s functionality. Many have complained that the iPad is merely a large iPod touch. So, Apple has released a new device in a new product category with limited functionality.

So is it just a large iPod touch? I’m not going to do a detailed review. Rather, I want to consider what the iPad means for how I use a computer.

Hardware

First, the hardware. In photos, the iPad did look to me like a larger, wider iPod touch. In person, though, it looks more like an iMac screen shrunk down to handheld size, along with the black bezel and Apple symbol on the back.

Even more than the original iPhone, the iPad feels like a single piece of aluminum. There’s no flexing or give. It’s incredible to hold.

The bezel width looks too wide in photos, but does not look funny at all in person. It’s quite convenient to hold onto without interfering with the screen.

It’s smaller than I expected, but that’s a good thing. It makes it easier to hold and move around with.

It’s a little heavy, though, for holding while standing or reading a book. It’s much more convenient to rest it on your lap than hold it. This is unfortunate, because this limits how you can use it comfortably. The weight needs to be reduced about half a pound, but I’m not sure this could be done without eliminating the aluminum back and glass screen.

Something New

We can answer that original question right now: no. When you pick it up and use it, it’s very clear that while it is the same iPhone OS, this is something different. Others have said that the iPad is what the iPhone was supposed to be.

That’s exactly right. It feels very different than the iPhone. The iPhone feels tight and constrained—you can only look at one kind of data at a time. For example, while in a Twitter client, if you click on a web link, you are moved spatially to the right into a new view. That’s all you can see. It’s either a list of tweets, or a web view at one time.

In Twitterrific for iPad, though, the web view opens up in a window centered on top of the list of tweets. Although functionally this isn’t very different, it *feels* completely different. It’s like you’ve had blinders removed.

This is even more pronounced in other areas. I read Jason Snell’s lengthy iPad review in Safari, and reflexively went to hit my MarsEdit bookmarklet in the bookmarks bar—then I remembered I didn’t have MarsEdit on the iPad.

That’s how using the iPad is: I forget I am using a mobile device, or a device at all. The only thing I am thinking about is the content—the web page, article, tweets, book or whatever else. The iPad is a frame.

That’s something new. This is a single device that can handle most things I do on my MacBook Pro (RSS feeds, web browsing, music and writing), and because of its size and design can do much more.

How I Plan On Using It

Some have said they are going to use the iPad primarily at home, on the couch and in bed. I don’t see myself using it primarily at home. (Or in my room at school, for that matter.)

Currently, my morning routine goes something like this. I wake up, check email and news headlines on my iPhone, and then go to breakfast. While eating, I read the day’s New York Times, and try to remember any articles I’d like to link to or write about on TightWind. Finally, when I get back to my room, I check RSS feeds and post links.

It’s a convoluted and inefficient process, and other than reading the newspaper, one I don’t enjoy very much. The iPad, though, can combine all three. I can wake up, grab my iPad, and go to breakfast. While eating, I can check email, read the newspaper, and read RSS feeds on a single device. And hopefully soon, I’ll even be able to post to TightWind from it, too.

Throughout the day, I’ll read articles in Instapaper, and at night, read books in bed.

I am expecting my MacBook Pro to get a little lonely, because most things I use it for I can do on the iPad as well, and it serves so many more functions. The few things I expect to do with it are write especially long essays and papers, web design and then little graphic design I do.

I’ve already noticed differences in reading. While reading articles on my MacBook Pro, I’m tempted to check Twitter, or my inbox, or NetNewsWire. The dock icons, menu bar items, and even the desktop background that surrounds the content are mental noise that make it difficult to focus. The iPad doesn’t have this problem, because the content is all you see. There’s nothing to distract you.

That’s a big change for reading and writing. What you’re currently doing has your complete attention. It’s much more like reading a book or writing in a notebook—there’s nothing else on your mind.

As for the keyboard, well, I’ve written this small review entirely on the on-screen keyboard. It works surprisingly well.

Like Jorge Quinteros, Ian Hines was in the process of interviewing me for his weblog, but had to shut it down for personal reasons before we finished it. Below is the full interview.

Ian: First of all, thanks for agreeing to be interviewed. I think this is going to be a lot of fun.

Let’s start at the beginning: How long have you kept a weblog, and what made you get started in the first place?

Kyle: TightWind is my first (and only) weblog, and I began writing it in April 2008. This wasn’t the first time I wrote online, however. In late 2006, I discovered Newsvine, which at the time was a rather intimate community of people who posted articles on technology and current events and discussed them. The conversation on Newsvine at that point was wonderful. The group, due to its size or everyone’s shared interests, tended to have informed, deep, and honest discussions based around people’s articles. It was an ideal place to write, because the conversation was so good and the group self-regulated. Everyone expected respectful and insightful comments, and they also expected well thought-out, well constructed and written articles. I made some good friends on Newsvine, and still talk to a few, like Faruk Ates, one of the nicest guys you’ll ever meet.

I have been writing in some form or other for a very long time. I wrote short stories in the first grade, and after the September 11th attacks, I began writing political and international relations commentary privately and on various forums across the web. Newsvine was very exciting for me, because I had found a place where I could have my own “column” of sorts, and publish my thoughts, and people I respected actually read them. So I wrote consistently on Newsvine until April 2008. My writing became more refined, and I was quite happy with what I was doing, but unfortunately the quality of Newsvine contributors dropped by that time. I wasn’t happy with the discussion that was happening anymore, so I decided to try something new and create my own site.

I created TightWind for a very specific purpose, but not a specific subject: to write as well as I possibly can, and continue to improve. Luckily after writing for a few weeks I stumbled into Michael Mistretta’s weblog, and through Michael found a bunch of great people: Pat Dryburgh, Jorge Quinteros, and Chris Bowler. All four are talented, smart, motivated and all-around good guys, the kind of people you want to surround yourself both to work with and have as friends. That’s the second reason for starting it that I didn’t even know was a reason: becoming a part of a great community of people.

Ian: I had a very similar experience when I decided to restart my blogging earlier this year: I began blogging with the intention of sharing stories about my newborn son, but it soon evolved into much more. Like you, I stumbled upon Michael’s weblog and, through him, Pat, Jorge, Chris, and you (among others). Since then my blogging focus has expanded and I’ve come to feel a part of a larger community. It’s good to know that I’m not the only one with that story.

Back to your blogging, I’m curious where you developed your interest in foreign policy? I’ve always been more of a domestic policy guy myself, but I can see that you clearly have an interest in the way the United States fits into the larger international community (particularly Sino-American Relations).

Kyle: September 11th. When I woke up that morning, I was just an eighth grade student not interested in much besides music. I knew a decent amount about the world, just because I liked reading things about the world and my Dad reads the news voraciously, but I was still just a kid; what I knew was mostly of abstract interest. By the end of the day, I was more aware than I’d ever like to be of just how important knowing what’s going on in the world beyond our own borders is.

I followed the news on the attacks every day for months, waiting to find out more about what had happened and what our response would be, and this became a habit. Just months prior, during the controversy surrounding the 2000 election, my Dad watched the news on it every night, and it annoyed me — I wanted to watch something entertaining. After that day, though, I sat down and watched the news immediately after school, and at night with my Dad, and began asking as many questions as I could about everything. The Middle East, al Qaeda, our own political process. I wanted to know as much as I could, but my focus was on Islam, the Middle East, and al Qaeda.

Foreign policy was my main interest because I saw just how important it was on that day. Throughout high school, I didn’t just read the news, but I dove as deeply into studying Islam and Middle Eastern history as I could. I read the Qu’ran, I read Bernard Lewis’s works, I read long-ranging histories of the region, and anything else I could get my hands on. I wanted to know as much as I could, because the explanations given for the attack in popular media were so terribly shallow. My goal was to understand the historical, rather than the immediate, causes of the attack. My thought was, that if we can understand the world better, then we can insure that something like it doesn’t happen again to us or anyone else.

So my focus, actually, has been on the Middle East and Islam. My interest in China is something of a fluke; my first year of college, I took an early Chinese philosophy course, and quite enjoyed it — philosophy is a personal love of mine that developed during high school doing debate, so reading Kongzi, Laozi, Mengzi, Xunzi and Zhuangzi was fascinating. So then I decided to take a Chinese history course, and loved it… You can see where this is going. I found parallels between China’s struggles during the last years of the Qing dynasty, and after its collapse, its struggles to “modernize” due to its economic troubles and influx of Western ideas and interference, and the Muslim world’s struggle to do the same in the latter years of the Ottoman empire and after its collapse. Both are suffering in part because of the difficulty of modernizing while protecting and extending their rich histories and culture.

So how other parts of the world (particularly Middle Eastern countries and China) can develop and move toward some form of democracy while retaining their culture and history, and what role the U.S. plays in this process, are my central interests. Technology is a mostly ancillary interest, relevant to me in how it can benefit our lives and the lives of people around the world.

Ian: That’s really cool that the interest is derived from 9/11. I don’t know a single person who can’t remember exactly where they were when they heard that news, and I think for so many of us it really shaped the world in the aftermath.

Your writing is so sharp, and so insightful: it’s wild to think that you’re still in college. How do you hope to see your writing evolve over the next year or so? What are your plans for after graduation?

Kyle: I see a lot of things to improve on. There’s small things — better word choice, sentence structure, et cetera — but I’d like my analysis to become more technical, rather than just scratching the surface. John Gruber, while explaining what he’s trying to do with Daring Fireball, said that with each article, he’s trying to write something for the New Yorker. Something that doesn’t just wade in the shallows of a topic, but dives in to the details, while still retaining an overarching focus (the intent isn’t just to be detailed, but to use the micro to illuminate the macro). That’s my goal, too: to find meaning in whatever I’m writing about.

I’m trying to expand into fiction writing as well. A well-written story can tell us something about ourselves, and the world, in a more truthful and fundamental way than any non-fiction piece can. I’ve always had some kind of reverence for how moving fiction can be. So for the past few months, I’ve been working on a short story.

I don’t know if anyone will ever read it, because as of now, it isn’t that good. Non-fiction writing is easy to write: you put down your thoughts in a logical manner. But a story, to be convincing, requires so many more things. Well-constructed story and dialogue that is both believable and entertaining, and most importantly, a perfectly-conceptualized idea that you are trying to convey through actions, symbols, and bits of dialogue. It’s magnitudes more challenging to do, and I suppose that’s also why it’s so rewarding.

I’ll be graduating from college in May. (Wow, it’s hard to believe it’s finished already.) After, I am immediately going to graduate school for my Masters of Accounting, and then I plan on doing public auditing for a few years. The reason for this is that accounting gives you a firm and tangible grasp of how a company is operating.

I want that understanding, and experience, because my intent is to either start a company, or work for a startup. I don’t really want to work for a large company — it doesn’t seem very fulfilling to me. I’d much rather be starting something with a real vision, with the intent of doing something fundamentally better than it is now. Business isn’t about making money. It’s about doing something worth doing, and making money as a result, in that order. I always go back to what Walt Disney said: We don’t make movies to make money; we make money to make movies.

I want to be a part of a company which has that as its core belief.

Ian: Very cool. I like the Walt Disney quote, and I could easily apply it to politics (in my mind): You work for change to gain power, you gain power to bring change. I like the sentiment.

I’m curious: do you have a favorite piece that you’ve written for Tightwind?

Kyle: My favorite piece is “Alone With Our Triumphs“. I think it’s my best piece, both in the writing and how well it conveys the idea. It’s something I’ve thought about for a while — that the most successful people aren’t concerned with what other people are doing. They don’t criticize others for doing things wrong, complain that they can’t do what they want to do because someone won’t let them, or buy into what others say they can and can’t do. They see what they want to achieve, and they just find a way to do it.

It’s a powerful mindset, and it can change how a society functions. If individuals knew exactly what they want to accomplish, and were unswervingly-focused on finding ways to make it reality (rather than find problems with what others are doing), many of the problems we have would disappear. I think that, too often, we’re too concerned with how other people are living their lives, and we replace focusing on ourselves with criticizing others.

Ian: I remember that piece: it was (is?) wonderful. There are so many great lines / thoughts in it, it’s hard to pinpoint the key phrase or theme (which is good). I linked to it at the time, which is an around-about way of saying I think it’s one of your best, as well.

What about other people’s writing? What are some of your favorite blog posts that you’ve read–the ones that make you think, “Man, if only I could write that well…”?

Kyle: Shawn Blanc’s interview with John Gruber in 2008 was a huge inspiration to me. The questions were excellent, and Gruber’s answers were insightful. Even better, the interview developed, each question building on Gruber’s last answer. How Shawn conducted the interview, and what Gruber said, were both motivational for me. I read every word of that interview.

Gruber wrote:

My other suggestion (also, I think, stolen from Graham) is to concentrate on writing things with lasting value. I’m not sure I’ve been doing a good job of this at all lately — I think too much of what I write currently at DF is about stuff that’s only relevant right now. There are a lot of people writing for the web today; but there aren’t that many at all who are trying to do great writing for the web.

That was my goal when I started TightWind: to write pieces that contributed something, and were worth reading.

Paul Graham wrote a fantastic essay in April 2008 titled “Be Good.” Graham’s thesis was that when starting a business, you shouldn’t focus so much on how it will make money. Rather, you should focus on making your product or service as great as possible. Make something people will love to use, and revenue will follow. I don’t agree that you should ignore how you will make money, because 1. making money is what sustains the business, and 2. if someone isn’t willing to pay, then it might not be such a great idea.

But the sentiment is exactly right: a business should exist for a purpose, to make something better. Graham then asked a question that slapped me upside the head. He asked, could a for-profit company exist whose purpose is to solve problems for people that don’t have any money? Could a for-profit company solve problems like malaria that affect the poor almost exclusively, and that is addressed almost exclusively by non-profits now?

His essay made me think about the world in a much different way, and those are the ones I value the most.

Ian: I think those essays fit nicely into a larger theme I’ve noticed,
which is the overarching value you place on having a sense of adding value in everything that you do. To that end, if you could offer any advice to someone considering starting a new, serious blog—say, yourself back a few years ago—what would it be?

Kyle: To take a little time, and find what you are passionate about. Whatever it is you find yourself reading about constantly, and thinking about when you should be thinking about something else; that thing that just grabs your attention like nothing else does, and leaves you terribly excited… That’s what you need to write about.

But you need to go deeper. Think about why it excites you so much. What is it about the subject that fascinates you so much? It’s not enough just to say that you love the Mac. Why do you? Is there something about Apple’s approach to business that excites you? Can you find a deeper meaning in that, which can be applied to other businesses or even how people live their own lives? Use what excites you as your theme for exploring the subject.

And once you’ve found that, write — a lot. Whenever you have inspiration. Not everything will turn into something worth posting, but that’s how it works. Also, find other people interested in the same (or similar) things, and read everything they write. See how they write, what it is that makes their writing so effective, and learn from it.

But don’t read in silence. Send them an email with your thoughts. Form a community out of shared interests. That’s the most important thing writing has opened up for me.

Ian: You recently shared your thoughts on how web-based authors can monetize their content (Permalink), and I must say none of the options look particularly good. The best sounds like this idea of a “content store,” but you don’t seem very optimistic about it coming to fruition. I’m curious: don’t you think this sort of store would stifle the dialogue we’ve all come to enjoy about the web?

Kyle: Let me digress for a bit.

The best option for everyone—readers and writers—is some kind of Content Store along with a content application. It would make publishing for writers dead-simple, and it would be in a well-designed application, so readers could easily subscribe to their favorite writers and read their content in a standardized format.

I hate the idea of individual applications for each writer or publication I want to read. It clutters my iPhone (or iPad) with unnecessary icons, and it forces me to learn a new application for every writer or publication. There’s too much time focused on the application rather than the content, and any time a reader is thinking about the former rather than the latter, that’s a bad thing. Nonetheless, I thought through what a TightWind application of this sort would look like, and tried to make it as attractive as possible for readers. I know what I think about it, but I wanted to see what readers thought. The results have been that a dedicated application isn’t what they want.

Here’s the problem with writing: because the web as a reading medium is absolutely terrible, and the web made writing free to read, we’ve gotten used to the idea that writing isn’t worth anything. And why should people pay for it when (1) they have to read it through a web browser, (2) publishers treat their writing like it has no value (pagination, poor typography, obstructive, annoying ads for worthless products), and (3) most writing online has become a vehicle for pageviews, rather than for the sake of writing? I don’t want to pay for that, and I won’t ever pay for it.

That’s why the iPad is so important: we need a change of medium. Reading on the iPad can be a wonderful experience, even better than reading print. Because the medium can respect the content, the content will become better, too. I think people would be willing to pay for that.

But to your question: it’s possible it would lessen dialogue if writers and publishers do not also retain a free web version.

The potential is we won’t be able to freely link to articles and discuss them, because the only people who will be able to read them are those who subscribe.

This doesn’t worry me. I don’t think independent writers have any desire to gate off the web version of their content—the readership left after they did so would be a fraction. For large publishing companies, e.g. magazines and newspapers, there is more of a desire to wall off their content. But they will run into the same problem as independent writers. Moreover, the industry is moving toward a premium approach—the New York Times is considering a free/pay approach where you can read a certain number of articles per month but beyond that you must pay, and the Associated Press is developing an iPad application as well.

This will end up limiting discussion somewhat, but if paid-for writing succeeds, consider how beneficial the change in content will be to discussion. If a writer depends on their readers directly paying them for their writing, rather than on advertising, they are much more likely to write quality content their readers want, rather than attention-grabbing, shallow crap that attracts pageviews. The medium, and the payment mechanism, all influence the writing. Better, more thoughtful, writing can only improve our discussion (in quality if not in quantity). I think that outweighs any potential decrease in the amount of discussion happening.

Ian: I’m still not sure I’m entirely clear on what would make the “content store” so interesting. Basically it would be a really slick, print-like RSS reader through which I’d receive content from my favorite authors? How would the formatting of the content vary from author to author? How would the content differ from what was available on the web—if at all?

I see the appeal of it, but the specifics seem hazy to me.

Kyle: I just have ideas for what I’d like to see, no firm answers to those questions. I’d like to see writers treat this as separate from their web content. They would only publish their long-form pieces that they’ve labored on until they can’t any more.

I’m hoping for a content store, like what Neven Mrgan detailed in January : one where you can publish the work you’re proud of, and it can be read, listened to or watched in an equally good format.

What’s interesting to me about it, both as a writer and a reader, is it’s a place where I can eliminate the noise and just read pieces that are lovingly written, on a device that doesn’t have any distractions—just the piece I’m reading, with beautiful typography and layout.

I want an application that has the same feeling as print, that allows me to become engulfed in the piece. Every time there’s a new piece, I want to set aside some time, sit somewhere quiet, and just read it, with my fullest attention. This would be an application where I only subscribe to the writers I love to read, so every new piece that pops up is worth my attention. I don’t want to sort through posts, trying to find something worth reading. In this application, I want to subscribe to writers whose every piece is worth reading.

I want something it both as a reader and a writer, because an application like this—where readers pay you for your writing, and read it in a convincingly-good format—encourages a different kind of writing than what we’re used to on the web. The web—because people are typically reading when they have a small amount of time, the format is terrible for reading (they’re distracted, and the web browser isn’t ideal), and pageviews-based advertising encourages more posts rather than better posts—creates demand for short, quick posts. That’s most of what we read online. But because this application would be excellent for long-form pieces, and writers are paid directly for their work, quality pieces are encouraged.

That excites me. This could just be an especially good RSS reader, where you only subscribe to RSS feeds you especially like, but that doesn’t really solve any of this. You still get the link-list posts and the short posts, and that’s all still encouraged, because nothing’s really changed. (Not that link-list posts are bad—they’re very useful. But that’s what I see RSS readers as for.)

I don’t know how many people are interested in this sort of thing. I suspect there’s quite a few. We are all willing to pay for great software by independent developers, because we know exactly how much thought and work they put into it. We know it’s something they love to build, and they deserve to be supported for that. If the format is right, I think the same applies for writers.

The Democrats are proclaiming their (apparently) final version of health care reform as fiscally responsible, because the CBO scores it as reducing projected deficits by $138 billion over 10 years.

But those “savings” are illusory. Former CBO Director Donald B. Marron explains:

Similar problems afflict the other prominent claim: that health reform will reduce the federal budget deficit by $138 billion over the next ten years. That’s not true either. The entire legislative package—combining both the Senate bill and the reconciliation adjustment—now reforms the government’s student loan program in addition to the changes to health care. The student loan reforms account for $19 billion of the deficit reduction in the legislation. Thus at best health-care reform will reduce the deficit by $119 billion over the next decade.

But that’s not the only problem. The health-care reform also includes a budget gimmick that exaggerates the potential budget savings. The ingeniously-named CLASS Act would create a new federal insurance program for financing long-term care. Because premiums would start flowing faster than benefit payments, the program scores as reducing the deficit by $70 billion over the next decade. But those savings are temporary. In future years, benefit payments will accelerate and eventually consume the initial surpluses in the program. For that reason, most budget experts believe that the CLASS Act should not be counted as real deficit reduction. After netting that out, health-care reform reduces federal deficits by only $49 billion over the next decade, almost two-thirds less than the headline figure.

So the actual savings are closer to $49 billion, and that’s over a decade. That’s $4.9 billion a year–it’s absolutely meaningless.

Even then, those savings are dependent on (1) $172 billion of cuts in Medicare spending, and (2) significantly increased taxes, including $210 billion (from 2013-2019) from a new Medicare tax on capital gains. It is quite possible, even likely, that future Congresses will not allow the cuts to be implemented in the future.

These Medicare cuts and tax increases are necessary to pay for a massive new entitlement program, which provides new health insurance subsidies to the poor and middle class. These new subsidies are estimated to cost $800 billion over 10 years. And that’s how much they’re estimated to cost. Reality is often different.¹

So, here’s the net effect: in a time when Medicare and Social Security are quite literally bankrupting our country (Medicare alone will, at current rates, grow to 12% of GDP by 2050; for comparison, the entire federal budget averages 19% of GDP), and our debt is ballooning, this bill does nothing to arrest health care costs, and adds a third entitlement program that costs at, minimum, $80 billion a year for the next decade.

Worse, to fund this new spending (which, if history is a judge, will out pace the taxes used to fund it), we are using up valuable means of reducing our budget-deficit. That’s the height of irresponsibility: in a time when we cannot pay for our current level of spending, we are increasing our spending, and using difficult tax increases and other spending cuts, which could be used to put us on a more sustainable path, to fund it.

Calling this “fiscally responsible” is monumentally dishonest. This is making an already dire financial situation even worse. Anyone who has supported this bill should be thrown out of Congress.

1. Medicare, when implemented in the 1965, was estimated to cost $9 billion by 1990. In reality, it costed $67 billion. This is typical of government programs. They rarely cost what they are expected to. ↩

Since Apple released the iPod, mobile has been an important part of Apple’s business. The iPhone, for perspective, accounted for a third of Apple’s revenue in the first quarter of 2010. While mobile devices have played an increasingly important role in Apple’s business, the Mac was still integral to it all. The iPod and iPhone are all “satellite” devices–that is, they rely on Macs (or PCs) to sync content to them. The Mac is the hub.

The iPad changes that.

Apple’s Hub Strategy

At Macworld in 2001, Steve Jobs announced a new strategy for the Mac. Jobs saw the Mac as the hub for people’s “digital lifestyle”–their music, video, movies, and personal data. The Mac would work with their MP3 players, digital cameras, video cameras, PDAs, and phones, and make each of these devices more powerful than they are on their own.

This strategy defined Apple’s products for the entire decade. Apple developed iLife, which allowed users to manage their photo and music libraries, edit video, burn DVDs, and even create music. They created the iPod, so users could listen to their music while away from the desktop.

This treats all mobile devices as “satellite” devices. They have defined functionality (e.g., they take photos, or play music), and that’s it. They depend upon the Mac for syncing media, buying new music, and turning photos or video taken into a usable product. They depend upon the Mac.

The iPhone still followed this strategy, even with its wide range of functionality. The iPhone depends on the Mac in that the iPhone is primarily a consumption device. Users listen to music, watch movies, browse the web, read and make short replies to email, and almost anything else you can think of. But for any kind of work (creating rather than consuming), a Mac is still required because of the iPhone’s small size.

The iPhone pushed the definition of “satellite device,” but it was much closer on the continuum of “satellite” and “standalone” to the iPod than the Mac.

The same isn’t true for the iPad.

iPad Will Stand Alone

This seems a little hard to believe considering at present, the iPad still relies on the Mac to sync media and update its operating system.¹

The correct criterion for deciding whether it is standalone or not, though, isn’t whether it will need to be plugged in to a Mac or not at some point; it’s how the device can be used. The iPhone, whether they want to or not, cannot be used by even basic users for serious productivity work. The screen is simply too small to do more than minor editing on documents, spreadsheets or presentations.

The iPad doesn’t have this limitation. For most users, the iPad more than fills their needs. It browses the web as well as the desktop, it plays music and movies (and users can purchase more), it plays games, it has the power to edit photos (and I suspect we’ll see an application for this soon), it has excellent address book and calendar applications, it has iWork, and it has the App Store.

Users can do all of these things without ever connecting the iPad to a desktop. For most users, this functionality is more than sufficient. They will rarely need to use a desktop computer. For them, the iPad can replace the desktop.

The iPad, even more powerfully, is better than a desktop or notebook in many ways. The iPad is a much more elegant device to browse the web on, watch video, or read a book or article. It replaces the desktop for a basic user’s productivity needs, and allows them to do many additional things that a desktop or notebook isn’t very good at.

Mobile Company

There currently are limitations, of course. Users cannot edit photos on the device, for example. But these limitations are, for most users, not inherent limitations of the device (due to its screen size and input mechanism), but rather software limitations that can be fixed.

The iPad introduction in January made clear that Apple intends the device to be seen much more as a standalone device. Before unveiling the iPad, Jobs declared Apple the “biggest” mobile devices company in the world. The iPad demo spent a large amount of time showing iWork in action on the iPad, and their goal was obvious: to show that serious work is not only possible, but easy, on the iPad. Then, after the demo, Jobs encouraged Walt Mossberg to write his iPad review on the device itself.

Apple is, if anything, a strategy-driven company, and chooses its marketing messages very carefully. These aren’t things a company says of a dependent device.

After Apple announced the iPhone 3G, I wrote:

I think what this means is Apple not only still believes in software-hardware integration, and selling devices with high-profit margins, but that Apple’s long-term strategy is to dominate the post-PC market. The “post-PC” is a mobile device that, in Apple’s vision, complements a desktop PC, and is specific in function.

The iPad and iPhone are the first two devices of Apple’s strategy for the next decade–building post-PC devices. Apple knows the PC has peaked; they can’t gain new customers from market growth (they can only gain customers by taking them from their competitors), and the PC’s basic use won’t change. We will still require the desktop for serious work (heavy video and photo editing, for example), but the PC market has reached its apogee. It’s a staid market, both in growth and innovation potential.

We are using the desktop for less as time passes, and are increasingly using mobile devices. Apple recognizes this. The future, as they see it, is mobile devices–the phone, and now the tablet. Apple’s goal is to control this market.

Their pricing strategy for the iPhone and iPad make this clear. Apple’s goal with the Mac isn’t to control a large share of the PC market; if it happens, great, but their goal is to make strong profit from a small percentage of the market. The iPhone, however, was aggressively priced since fall 2007, and especially since summer 2008 with the release of the iPhone 3G². The iPad has a very low price-point, too, starting at just $499.

Apple is seeking to define these new devices for the future, if not to dominate the market. The former is the most important to them, because a controlling proportion of the market alone isn’t an end–it doesn’t do anything for Apple (and, in some ways, is harmful). What’s important is that these devices, the future of computers, are molded in Apple’s image. This allows them to innovate and create new devices in the future without constraints. Unlike in the PC market, they define the terms.

The importance of defining these devices is already apparent with the smart phone. Just three years after Apple announced the iPhone, nearly all new smart phones are molded around a large touch screen, browse the web, play media, and have an application store. Apple has defined what the smart phone is, and now every other maker has to base their devices on the iPhone. They can try to improve on it, but to do anything inherently different than the basic iPhone model is suicide.

That’s an incredibly good position to be in. Because the market responds to Apple, rather than vice versa, Apple is free to re-define it as they please. Apple, then, is positioned to be the post-PC’s main innovator, the company that will continually re-think it and push the devices forward. As a result, if Apple’s changes are good ones, they can be the sole recipients of the higher profit margins innovating companies can charge before their competitors catch up.

There’s good reason for Apple switching to mobile devices as their primary source of growth. The PC market is a dead-end for the future. Apple will continue to see growth in this market, due to PC users switching to the Mac, but it cannot be their primary means of company growth, because growth potential is limited. Moreover, the developing world isn’t as interested in PCs–they’re buying mobile devices. They’re cheaper and more useful. So mobile devices have the greatest potential for growth, because the market for them both in the developed and developing world aren’t saturated.

Apple is positioning itself for the future, which is coming quickly. We will still use desktops, but only for specific tasks, like editing video, but for everything else–browsing the web, reading, consuming media, the things we do all of the time–we’ll use a mobile device, because they’re much better at doing these things than a computer.

The iPad, then, isn’t just a big iPhone. It’s a new way of computing, one that will enable new applications of computers we haven’t seen, and that could become even more ubiquitous than the PC is today. In a few years, we might not be able to go to the doctor’s office, school, or coffee shop without seeing one.

Or at least that’s what Apple is betting.

1. I think this will change rather quickly. Using home sharing, the iPad (and iPhone) could update their media libraries whenever the host Mac gets new media, and vice versa. With this arrangement, the iPad wouldn’t be any more of a satellite device than the Mac itself would be. ↩
2. Interestingly, when Apple first released the iPhone, they seemed to be using the same strategy as the Mac: sell less, but make more through a higher profit margin. This changed in September 2007, when Apple dropped the 8GB model to $399, and changed even more dramatically with the iPhone 3G, which launched at $199. ↩

Subtitle: I’m hoping for a Content Store, but since we may not get it, what are your thoughts on the best way to do this?

I love writing. I write for my own benefit; writing forces me to develop the thoughts I have every day into a coherent whole, and throw out what doesn’t make any sense at all. It clears the underbrush of my mind. I’ve written privately since I was a kid, for that reason. It is my meditation.

Publishing online, though, is something different. I still write for the same reason, but whereas I was my only reader before, now people read what I write. Sometimes they send me an email, or a note on Twitter, replying to something I wrote. This creates a conversation, and sometimes even a dialogue. This has changed my writing; whereas before I would write only when some thought catches in my head, and the only way to shake it loose is to write about it, now I write quite consistently. Now I have two reasons to write: first for myself, and second for my readers.

Fortunately, I have the privilege of time. I am a college student, and my schedule is free enough to where I find time to write almost every day. This means that I can write without considering time — I have time to spare. But starting this summer, that will change. I will finish undergraduate school, and start an intensive Masters program. And after that, I’ll be working full-time in some fashion or another. I will have to justify spending as much time as I do writing. If I am going to continue writing as much as I do, I have no choice but to make money to justify my time. In just a few years, too, I will be married, and thus have responsibilities beside myself, so this is a question that weighs heavily on me.

Which means I’ll have to face the reality most writers already have: how do I make money from my writing?¹

There are two basic ways to do that. You can run advertisements, or your readers can pay you in some way.

I, of course, am a member of Fusion Ads, because they provide ads worth looking at. But there’s an inherent problem with advertising as a sole means of revenue for small writers like myself: it can’t provide enough to justify my time. That isn’t their fault. It’s just how it works for small writers. Advertising, then, is a part of the solution, but not it completely.

So this leaves charging customers. In the last six months, I’ve had a long debate with myself on how best to do that. My first answer, and something I nearly launched, was to offer a yearly “subscription” to TightWind, which would open up some additional content (all current kinds of content would have remained free). This fell through when Contenture shut down late last year.

Pay for the Experience

Customers paying for content is different than advertising. Even a very small readership could provide a writer a respectable income. One hundred readers, as far as advertising is concerned, is miniscule. But one hundred readers that pay $20 a year? That’s a fine side income. There’s a lot of power in doing something every other industry does: charge customers.

You may wonder, then, why I don’t simply make TightWind pay-only. The reason is because reading TightWind on the web isn’t a convincing enough product to be. I wouldn’t pay a subscription to read it in a web browser, because compared to other mediums I do pay for, it isn’t very enjoyable. Reading content in the web browser just isn’t a good experience. I won’t charge for a subpar experience.

My goal is to write content that is worth your entire focus — the same focus you give to a book or good magazine. That’s why I started TightWind in Print last year, so readers would have the option of reading it exactly as they do a book: somewhere quiet, with something warm to drink and nothing on their mind but what they’re reading. You can’t do that on a computer.

Here’s where the iPad fits in. Unlike reading content through a web browser on the computer, the iPad offers a reading experience every bit as good as print. Imagine being able to subscribe to your favorite writers, large and small, and read them all in a wonderfully-designed application on the iPad. You could read them in the morning with a cup of coffee, like you would a newspaper, or while relaxing on the couch in the evening, or in bed, or… Or anywhere else you would read a newspaper, magazine or book, and it would be just as enjoyable. No dock icons, email badges, or Twitter messages to distract you. Just content.

That is worth paying for. I would subscribe to a number of writers immediately if I could read them in a dedicated application on the iPad, and I’m hoping many of you would, too.

But How?

The best way is a Content Store, just as there is an App Store, where content creators can publish their work and users can purchase or subscribe to it. It’s easy for publishers, it makes content discoverable for readers, and it provides a consistent reading experience for them. It’s a good thing for everyone. Neven Mrgan explained why this is such a great idea last month. This, more than anything else, is what I want to see Apple do. Unfortunately, it isn’t at all clear they will.

The second way is to create an individual application for TightWind. You would purchase the application for a reasonable amount. This would give you access to all past original content since the application was released, and all original articles published after that, in a finely-designed application with an absolutely great reading experience.

You can think of the application price as a lifetime subscription to all articles, past and future. A second kind of original content that I’m working on at the moment, which may or may not ever see the light of day, would be available through in-app purchase.

This would be the premium version of TightWind: everything would still be available through the web browser for free, but if you want to read it how it is meant to be read — in a print-like reading experience on the iPad and iPhone — then you can.

I Want Your Thoughts

I usually don’t talk about my future plans, but this is something altogether new and I want to have your thoughts. Would you pay for an application like this? If you wouldn’t, why not, and what do you think is a better way? What about it do you like or dislike? Why?

1. Some may say that writers shouldn’t focus on this at all, as if seeking payment for their work somehow cheapens the work. But good writing is very difficult, and those writers absolutely deserve compensation, just as great developers do. I’ve tried to move my writing into that category, and I continue to improve. Hopefully I’ve reached that point. ↩

I wrote last week that the CCP (Chinese Communist Party) will either open the government to multi-party elections, or will eventually be overthrown.

I want to provide more detail on exactly why I believe this, and on a possible route to this reform I think is possible. I wrote a paper in May 2008 that sketches the possibility for a Confucian constitutional democracy in China.

I am publishing it below in its entirety for those of you interested.

China, many say, is rudderless. It is being pushed quickly, but has no direction; it lacks an underlying ideology and base for its continued growth. After the collapse of the Qing dynasty, and with it the imperial system, China’s standing moral and political systems were discredited, and the Chinese were forced to find a new system.

For a while, it seemed that Marxist-Leninist inspired Maoism would be China’s defining philosophy, an all-encompassing political, social and economic model for society. But Maoism, too, was discredited by the horrors of the Great Leap Forward and the destruction of the Cultural Revolution.

These criticisms are not entirely with merit. While the effects of the opium wars, and the imperial system’s collapse, on Chinese identity should not be understated, it is important how these things are conceptualized in their effect. The horrors the Chinese suffered from European imperialism and the decline of the Qing empire were not simply because of the discrediting of their political and social philosophy (empire-based system, and Confucianism, respectively), but because of the discrediting of China itself.

The Chinese today are proud of their nation not because of its superior political and social structure (although the culture is of prime value), but because of its economic success, and international political strength. This points to a fundamental resilience and flexibility in what constitutes being “Chinese,” and it indicates that it is more than belief in particular social norms and form of government.

In the comment section of a Chinese weblog, one Chinese native commented on the identity of nations. He wrote that while many nations, such as the U.S., are founded upon defined principles, and thus its identity is tied directly to them, China is not. He writes:

For me personally, the love for my country lies with the land, the land of ‘middle Kingdom’, it matters not to me, whatever prefix one adds, may it be PR, or RO, my sentiments stay the same. The land has never done anything bad to anyone, what could I possibly cirticise it for? To me and many other chinese, it is the country (the Land, not the government) comes first, then the people. Without China, then there will not be chinese (not in any meaningful way by chinese standards).

For this writer, Chinese identity is not even necessarily defined by their history; being “Chinese” is connected to the land itself. This does not mean that Chinese identity is disconnected from their social structure and norms, political system and history. Instead, it indicates just how flexible Chinese identity is. It shows that what defines being Chinese can evolve over time, with just as strong of a connection for the people to being Chinese.

A historical tradition of language and common beliefs is important. Whether Confucianism as a social doctrine was officially rejected or not by the PRC, it still defines daily Chinese life today, and they should not lose that.

From this point of view, then, this paper will first consider a past example of China’s cultural flexibility, then identify how Confucianism in a modern incarnation can serve as a viable framework for Chinese society, and finally explore how human rights and the rule of law should fit into the “new China.”

Continue reading →

The day finally came, and the tablet — err, the iPad — is public. Expectations are high; Apple had to create a device that has no easy niche to fill, and make it so compelling that we’d love it anyway.

Others have, and many more will, post their thoughts, so I’ll try to keep this as non-comprehensive as I can. I’d like to talk only about a few things of particular interest to me.

The Concept

More important than the hardware design, or even the software, is what this device is intended to do, and how it fits together with Apple’s other devices.

Last August, I wrote about where I thought the tablet would be positioned — that is, how Apple would intend it to be used. I wrote,

That’s where the tablet fits. The iPhone is the device you use to browse the web and check Twitter while running errands or at a friend’s house; the Mac is the device you use to get real work done; and the tablet is the device you use to read a book, edit a document, or watch a movie while in bed, on a plane, or in a coffee shop.

You won’t use it because it can do things the iPhone, or a notebook, can’t. You’ll use it because it’s much better at doing them.

So I’ll take a second to bask in the glory of getting something right. That’s how Jobs set up the iPad: you’ll use it to do all of these things because it is a lot better at doing them than the other options. But what I missed, and John Gruber nailed, is that Apple means for the iPad to replace a MacBook for most users.

I cannot possibly overstate how important this is. Apple today showed us what they think is the future of computing: handheld, all-screen, touch.

Many people were disappointed with the device, considering it little more than a big iPod touch. But this simply isn’t just a large-screen iPod touch. Watch the the demonstration, and you can see just how powerful it is. You can browse the web in its entirety (except for Flash, notably), play music and video beautifully, read books in a great application, and even create and edit documents, presentations and spreadsheets in a surprisingly-powerful iWork suite. And that doesn’t even count what third-party developers will create for it. All on a device not much larger than a portfolio.

Those who are unhappy with it would point out you can’t do “real” work on it. You can’t edit video. You can’t design web sites. You can’t develop applications. My response is: that only matters to a small portion of computer users, and for them, Apple is still making MacBook Pros, iMacs and Mac Pros.

Of course you can’t do those things. But most users do just a few things: they create documents, listen to music and watch video, and browse the web. That’s true for college students on up to seniors. The iPad does all of those things really, really well.

Think about just how powerful an iPad is for these users. It’s magnitudes easier to learn and use — you just touch it, and as a result there’s no extraneous UI widgets and keyboard shortcuts to learn. Because it weighs only one and a half pounds, and is really thin, you can carry it anywhere you can bring a book.

I shake my head when I think about that. You can bring it anywhere, but the iPad can turn into the best mobile web browser on the planet, the best media player, a fantastic book reader, and can create and edit documents, presentations and spreadsheets. Anywhere. All in something the size of a portfolio.

Now imagine what it will be when developers create applications just for the device. For artists, it’s a canvas they can use anywhere, and share on the web instantly; for people who enjoy reading books and publications, they can read them all in wonderful clarity and color all on one device, anywhere; for architects, they can make building design changes on site, or sketch a new building whenever a new idea strikes them; and…

Are you getting it?

I’ve dreamed about the mythical tablet device of the future, the device that we carry around with us and can do almost everything with. I’m sure most of you have, too. This is the first version of that very device.

In case you couldn’t tell, I am ecstatic for Apple’s vision. There isn’t another company today that could present such a well-conceived vision, something that is so difficult to achieve, and then deliver something incredibly close to it.

I do, however, have some thoughts and issues that I’d like to discuss. These do not detract from what Apple has done. They are mostly nitpicks in light of the overall concept, but nonetheless there are problems.

Text Entry

The iPad, of course, uses an on-screen software keyboard that is quite similar to the iPhone’s. This creates the same advantage: special keyboard layouts for special circumstances. One look at Number’s number and date keyboards and you’ll be sold on that.

The iPad’s size, though, makes it more difficult to type. When it is horizontal, the keyboard is nearly full-size. But you must either rest it on a table or your lap to type on it with two hands, and so this doesn’t strike me as a particularly great way to type. Jobs’s comment that it’s a “dream” to type on don’t seem very believable.

Apple has acknowledged this, and provided three other ways to type on it: with a wireless keyboard, a keyboard dock, and with their leather case. The leather case flips back so the iPad can sit on a table at a shallow angle, much like the keyboards themselves do. This most interests me, because if it works decently, you’ll be able to use the iPad for typing moderate amounts of text almost anywhere, and the leather case is something most people are likely to buy anyway.

The keyboard is a concern because it is the upper-bound of how much real computing functionality the iPad can cover. If it is only usable for small text entry — searching Google, quick emails — then it is mostly an entertainment device with strong drawing capabilities when mobile, while if it has moderately-good typing abilities, it’s in an entirely new category.

It’s clear Apple is nervous about this. Creating a keyboard dock alone shows Apple knows this is a problem, as it’s a very un-Apple thing to do. When Jobs showed it, he did so awkwardly; he said, “and when you need to type War and Peace, you can use this.” His tone seemed to waver. I think this is what worries them the most.

My other concern here is it appears to have no handwriting recognition at all. I carry a Moleskine around with me most everywhere I go, because I get inspiration at unpredictable times and places. I would love to use the iPad for this purpose (if not replace my Moleskine with it completely), but I can’t brainstorm by typing. Writing things out both encourages my creativity and forces me to whittle the ideas down. I won’t give that up for the convenience of having them all on one device.

Multi-Tasking

It’s ridiculous that we have this super-fast, super-efficient device, but we still can’t listen to Pandora while browsing the web in Safari. It’s so ridiculous that I suspect Apple is holding this back for a future version. I bet mobile OS 4.0 (or whatever Apple is calling it now) will have multi-tasking built-in for iPhone, iPod touch and the iPad.

Reading

The “iBook” application (small note to Apple: you’re beginning to mock yourself with these names. Can we drop the i-prefix already?) looks quite good. The text looks fantastic, and I can imagine myself lying in bed reading it, and just as immersed as with a real book. The bookshelf looks great, too, but the resemblance to Delicious Library is unseemly. While the bookshelf is the only metaphor they really could have used, and Delicious Library’s look has been ripped off more than a few times already, it looks just like it. Couldn’t Apple have given Wil Shipley some kind of recognition, whether it be monetary or verbal? He is a fantastic developer, and he deserves it.

I have a few other questions about the application.

The books are in the ePub format, but it isn’t clear if they’re wrapped in DRM. So my first question is: can we share books? And if we can, will other devices that support the format be able to read them? This is a make-or-break question. I can’t completely switch to ebooks unless I can share them with others.

Can I read ePub-format books not from the Apple book store in the iBook application? If not, it isn’t much of an issue; a third-party reader will solve this, but it would be ideal to have all of my books in one application.

Can I highlight text, bookmark pages and take notes? This is another make-or-break. The main reason I haven’t bought a Kindle yet is that it isn’t as easy (nor as elegant) to highlight text and make notes on the Kindle as it is in a book. I want to be able to reference these excerpts and notes later on, and ideally have them automatically sync to other applications (and my Mac).

Will independent writers be able to publish their work?

Those are my main concerns with the iBook application.

iWork

Here’s my only concern: those icons are hideous.

The iWork demonstration was incredible. Apple didn’t just create an iWork lite for the iPad — they created surprisingly-full featured applications, and that work just with touch. You can inset text, wrap it to fit objects, add builds to presentations, formulas to spreadsheets…

They created some new forms of interaction that I found particularly interesting; just in the demonstration, I saw at least three. In Keynote, if you want to re-order multiple slides, you drag one out of the list, and then tap the others you want to move. They then fall into a stack, so you can move them wherever you want.

If you want to images sized exactly the same, you begin re-sizing one, then tap the one who’s size you want it to be.

To move through a document in Pages, you scroll along the right side, it scrolls page by page, and a loupe pops up showing you which page you are on.

Smart. There’s all kinds of interesting things in these applications, but those were the three that caught me eye.

Even more important, though, is that iWork is introducing us to “real” applications that don’t use files or a file system. You don’t look through a Finder application to open a Pages document on the iPad; rather, you open Pages, and it shows you all of your documents. The documents live in the application. There are no “files,” just documents, presentations, and spreadsheets.

Apple’s vision for the future of computing is something even more simple than what they created in OS X.

These are my immediate thoughts on the iPad. I do have other minor complaints, like the “iPod” application’s (it looks like iTunes) ugly top bar, but I expect those to be addressed between now and the release.

Apple should be commended for their audacity to create a new way of computing. Only Apple could, or is willing to, create such a daring concept. Most other companies wouldn’t even consider it, because it’s so different — it’s so different, they can’t guarantee it will sell enough for them to break-even.

But Apple has never been about making what will merely sell. They’ve always been about creating something that is as great as they possibly can, something that will capture the minds of people who look at it — both the ones that love and hate it. They’ve always been about, as Wayne Gretsky said, skating to where the puck will be, not where it is.