Shaking things up: a new paradigm of online ad consumption breaks the staus quo.

I hate ads. They are annoying. Yet we cannot live without them. Who would want to read a magazine without ads? Case and point, no respectable fashion magazine would ever go to press without advertisement. They are part of the content, they are expected. We want them. Why? They *can* be informative of new products, new trends etc. and we dear not be the last one to know about the latest and greatest. We do not want to be left out.

The same cannot be said for the online ecosystem. The online alter-ego of those printed ads are horribly invasive. The way they are pushed onto us consumers is just plain horrible.

So I tried an experiment with one of my start up. We built a simple app called "Just Ads". As the name clearly suggests, this (iPhone) app does one thing and one thing only, it shows a list of location aware ads. That is it.

What is so innovative about that?

Well, there is no other content but ads. That is, the user is not in the midst of consuming some other content (like reading this blog ;-) so the ads are no longer competing for attention. They are the content. The mind switch is what is innovative. Users of Just Ads are willingly opening an application that shows them (somewhat) targeted ads of things they may want to have. They are in the state of mind of consuming advertisement. Better yet, as if by magic, we have transformed advertisement into content that people want to consume.

Do not rush to your AppStore to download this little magic box though, AdMob (our ad provider) had to pull the plug on us in just 24 hrs so we had to remove the app from the store. Why?

Too much traffic.

You would think that generating a lot of eyeballs and clicks would be a good thing but when you do it in an innovative fashion, the status quo is often unable to cope and it stares back at you like a deer in the headlight of a car. Obviously we hit on something good so we will try to get it back online soon. Wish me luck.

[update] negotiation with AdMob failed, they refuse to serve ads to this app claiming that it does not provide an enjoyable experience for users and advertisers. What do you think?

[update] we signed up with MobClix, JustAds is on its way back to a device near you. Given the difference in content (ad format) we had to make some modifications and rethink this product. We hope you will enjoy it once it is out.

Why Apple cannot build just an iTablet

There is a lot of rumors about a tablet (let's call it iTablet) coming from Apple. I have a problem believing them face value and I question what else is there, that we all missed, that would motivate them to build such device.

Tablet pc are nothing new, there are many on the market and they are not selling well. Why? Positioning and pricing. There is not enough room between a smart phone (iPhone, Pre) and a laptop to justify a tablet PC. And for "room" I am referring to pricing. $90 (and a two year contract) today gets you the phone + portable computer AKA iPhone 3G. $500 will get you a laptop from a name brand other than Apple, of course. So let's say those are our boundaries

>$90 and <$500 Well, it gets worse. Now we need to add Kindle to the equation. After all I would expect that if I buy an iTablet, I can read books with it. The reader should note that this open a whole new problem with display technology that we will omit for the sake of brevity. Let it just be said that paper like display (like Kindle's e-ink) consume a lot less energy and they have no refresh rate making them as comfortable as paper to read. Back to our superficial market analysis. As I was saying, we are not done yet, the dagger in the hearth comes from net-books. Virtually that shrinks our range for an iTablet to >$90 and <$200 (with data plan...) That is a though place to make money in considering the amount of hardware that must go into one of these devices. Namely I would expect that an iTablet must...

• have comparable screen size to a Kindle DX
• have comparable battery life (in read mode) to a Kindle
• have wireless access (3G/wifi)
• have all the bells and whistles of an iPod Touch
• use touch and stylus (so you can actually write on it like you would on a paper notebook)
• and last but not least, have access to a ton of books, movies, music and let's not forget (drum rolls...) games! See yesterday comments during their PR event in San Francisco that their iPod Touch is a PSP competitor.

Perhaps that is too much and some features should be dropped but let's assume for the sake of argument that they can pull all of that off and still not become another Sony/PS3 story. Well if they can do that they may have a killer product that does not replace a smart phone and that does not replaces a laptop but that has its own niche. Niche that is currently occupied mostly by net-books that would instantly become obsolete. So far so good. Who pays for all of this though?

Note: they have done something like this already with the iPod as it virtually killed all MP3 players already on the market by addressing the same need but with a superior user experience. Can they do this for the tablet PC market? Maybe. The question is how do they make money. Let's explore.

A quick glance back to what I just wrote should convince you that this is a monumental challenge as you must do all of the above and still end up in the $200 ballpark, street price. Now we all know that Apple excels in convincing its buyers that their products are worth a premium and let's say they can position it at $500. Let's also say that they pull another AT&T partnership so they can effectively subsidy the iTablet, forcing buyers to subscribe to 3G service. That would be a masterful plan. The question still stands, why go through all of this trouble given the high cost and risks. Where is the money?

My take is as good as antibody's but I hope that this brief post convinced the reader that if Apple does this, they must have more up their sleeve than just a better tablet PC. They must have come up with a better overall experience or even a new ecosystem that perhaps displaces more than just net-books. Perhaps what this is about is a better way to work, play and interact with a digital device that becomes part of our daily lives much as they managed to do with smart phones.

I for once would be very happy to be proven wrong and if they do build it, I look forward to be one of the first to adopt it, use it and exploit the benefit of a well executed tablet PC platform.

Thoughts and comments are appreciated. Tell me, what did I miss!?

Innovation in ubiquitous computing

If you miss the news from Apple PR today, they have added mic and camera capability to their iPod line up. That is a quiet storm brewing if I ever saw one.
Why? You may ask.
Well considering that more than half of the AppStore download comes from iPod Touches (see AdMob report on the matter), I am starting to see a trend emerging. Granted that the iPhone already does what the iPod and iPod Touch does, the message from consumers is clear: "we want more capabilities and we cannot afford to pay $70 per month to get them!"
So what is the storm I see coming? With the introduction of push notification and VOIP there is really little that an iPod Touch device has to envy to an iPhone and...it costs $0 per month. If you are in a urban environment where you can pick up a WiFi signal, well, chances are you really do not miss having an iPhone at all. You can call with VOIP, you can IM instead of SMS and now you have your camera too. The best part, it costs you nada. If you are a student or a teen, that is the right price for you and your parents, is it not?
So, is this the dawn of a new class of devices? Is an iPod Touch device the next "pager" whereas it is a more limited device but considerably cheaper than the full fledge smart phone?
Food for thoughts.

NOTE: why do I always talk of iPod or iPhone and never of the competitors. Because they are the ones breaking new ground. With that said, assume I am referring to an "iPod Touch like" device and an "iPhone like" device from now on. Sooner or later Apple will do what Microsoft did, license the iPhone O/S and then history will repeat itself (see what happened to PC in the 1980s).