Will the iPad Mini die or evolve?

Rumors are pointing to a larger iPad (iPad Pro?) this year and an uncertain future for the iPad Mini. The Mini was only given a minor update (essentially Touch ID and a new gold color option) last Fall while the larger Air received a full spec update and slimmer design. The Mini is being squeezed between larger iPhones and the technically superior iPad Air 2. The iPad Mini 3 (or 2) is still an attractive option for people that want a small tablet, but I believe there are less of those people than there were in 2012 when the Mini debuted. Furthermore, the $100 difference between the Air 2 and Mini 3 isn't as much of a value as it was a year ago and there isn't much room to lower the price further because the Mini's margins are already tight. Tablet sales are flat overall, and the same is true of the iPad. Tablets under 8" make up approximately 50% of the tablet market, at least partially due to their lower cost. Perhaps larger phones is dragging down sales of small tablets. If so, it seems plausible that Apple would try to reinvigorate the iPad lineup with a larger model targeted at professionals and creatives with new features such as split screen multitasking and new input methods. Smartphones are getting bigger, why not tablets too? Just a year or two ago a 12-13" iPad would have been too heavy and bulky to hold for extended use, but after seeing the Air and Air 2 a larger model seems possible.

So, where does that leave the Mini - will it die or evolve? I've always been curious about using the Air suffix in the naming of the iPad. Was it a familiar name used to make it distinct from the Mini? Or was it carefully planned years in advance of a shakeup in the iPad lineup? It just doesn't make much sense to me for the Air be the largest iPad. If Apple does launch a larger and more capable iPad Pro, would they keep or discontinue the Mini? There is another option I see: resize the Air to about 9" (keeping the screen resolution the same), splitting the difference between the 8" Mini and original 10" iPad size and discontinue the Mini. I think the new 9" Air would be a nice compromise of portability and utility, while filling a nice space between large phones and an iPad Pro or MacBook. This would also allow Apple to maintain their pricing convention while getting rid of the low-margin Mini.

What the Apple product lineup may look like in 2017

I've been thinking about what Apple's future product lineup may look like ever since they announced the Apple Watch and new iPhones.  In the past week we've had an iPad and Mac event, plus an earnings release that has shed a little more light on how the lineup may evolve over the next few years.  Here are a few predictions based on past observations, some hunches, and a dash of logic.  I can't wait to see how wrong I am.

iPhone and  Watch will finally kill the iPod line

Apple quietly discontinued the iPod Classic in September, but the Shuffle, Nano, and Touch still remain available although sales continue to decline.  In today's earnings release quarterly unit sales were down another 24% year-over-year to 2.6 million units.  Apple also announced they would start including iPod sales in the 'other' category instead of reporting their results directly.  iPhone (and the smartphone category in general) continues to grow, which has clearly hurt iPod sales and may also now be hurting iPad sales.  The Watch, which will have the ability to play music over bluetooth, has the potential to hurt iPod sales further.

If Apple were to upgrade just one of the iPod models it would probably be the Touch, which reportedly makes up about 50% of iPod sales, carries a higher price, and brings people into the iOS ecosystem.  The Touch runs the 3.5 year old A5 CPU, the same chip that powered the iPhone 4s, iPad 2, and original iPad Mini.  These devices are a little long in the tooth, and don't run iOS 8 or the newest apps as smoothly as they should.  However, I don't think it is worth their effort when so many people clearly prefer to listen to their music on an iPhone, and some may prefer a Watch in the near future.

Perhaps Apple will keep the Shuffle and/or Nano around for several more years without updating them, as they don't really need the latest processors or more RAM to provide a good user experience.  Even if this is the case, I think we will effectively witness the slow death of the iPod over the next few years.

Redefining the iPad

Personally, I think the iPad is a great product.  I also don't need to own one.  As phones get bigger and laptops get more iOS-like (better battery life, quicker wakeup, etc), iPads are getting squeezed in the middle.  Apple sells twice as many iPads as they do Macs, but the iPad growth curve is going in the wrong direction.  Apple and its developers need to invent new use-cases for the iPad.  They need more people to think 'I need an iPad because it is the best possible device for task X.'  Today, it's easy for many people to complete that sentence for a smartphone or a laptop, not so much for iPads and other tablets.

Perhaps a larger iPad Pro that really takes on laptops for light productivity will spur sales.  I don't know what the answer is, but I'm pretty sure it's not to make thinner/lighter/faster rectangles of glass year after year.

Another new iPhone size

I think we'll see another new iPhone size by 2017 - except instead of being called iPhone nano, it will be called Apple Watch.  I am confident the technology will be ready for a wrist-worn device capable of making phone calls over cellular, getting directions through GPS, and lasting a full day on a charge.  I think this was Apple's plan all along, but it will take them a few years to get there.  If Apple is successful, I think the Watch could have the same impact on iPhone sales that the iPhone is currently having on iPad sales.  That is, iPhone sales growth will stall and Apple Watch will take off.  That's a big 'if' though.

What they won't do

An Apple television set.  I've outlined the reasons before, and they still hold true.  This product simply doesn't make much sense.  Apple has enough work to do on the Watch and their existing product categories.  Perhaps (hopefully) we'll get a more capable set top box, but that's all I'd expect.

More gold?

There's a lot more speculation to be had on the iPhone and Mac product lines.  One thing that wouldn't shock me is if they started making products out of different materials for the purpose of price discrimination.  Gold iPhones, stainless steel MacBooks anyone?

Product categories the  Watch will make obsolete - do they add up to a large enough market?

I was confused after the announcement of the  Watch - partially because it wasn't what I was expecting, and partially because the presentation was muddled and generally not up to Apple's standards.  They never really answered the question 'why does this exist?'.  After thinking about it some more and reading Ben Thompson’s piece, I’m convinced that Apple’s ambition is to create a general purpose computing platform (eventually with its own cellular and wifi connections, GPS, and the ability to run native apps, all without an iPhone).  That's what Apple does:  they design great hardware with the user experience in mind, make some nice apps for it, and let developers create new and interesting experiences for the platform.  They've done this with the Mac, iPhone, and iPad.  The iPod is their only major product category that hasn't fit this description. The iPhone and other smartphones that followed made several product categories all but obsolete:  mp3 players, point and shoot cameras, portable GPS navigation units, PDAs, and more.  I was thinking about the Apple Watch the other day on my run.  I always wear a watch when I run to keep track of my time.  Sometimes I take my phone to use a GPS running app and listen to music.  If I don't have my phone I usually take an iPod Shuffle.  All of those products would be unnecessary if I had an Apple Watch (well, a future version that had its own GPS).  I think future versions of the Apple Watch could kill or take a big bite out of:  pedometers and activity trackers, GPS watches and heart rate monitors, and small mp3 players such as the iPod Shuffle.

These categories are smaller than the categories smartphones killed.  In fact, they probably don't add up to a market large enough to support the Apple Watch's R&D budget and ambitions.  The smartphone market grew to be massive and is much larger than the combination of all the products it replaced.  Apple is clearly betting that its watches can do something similar, perhaps on a slightly smaller scale.  However, smartphones also made one other product category obsolete:  feature phones, which already had a huge and lucrative market of their own.  Furthermore, cellular phones had already made wristwatches unnecessary for many people, or relegated them to specific activities and occasions.

Wristwatches are the category smartwatches could most clearly make obsolete.  There is still a large market for wristwatches, but it is very fragmented with price points from $5 - $50,000 and up, whereas feature phone prices were all on the same order of magnitude with a few exceptions.  Many people wear watches as fashion pieces and expressions of their individual personality as much as they do for the utility they provide.  It's not clear to me that the Apple Watch can make a significant number of these timepieces obsolete the way smartphones made feature phones obsolete.

The question I have for the (future version of the) Apple Watch, then, is will it do enough to convince lots of normal people to buy it.  People that wouldn't otherwise buy a Fitbit or Pebble smart watch or $400 GPS running watch.  People that don't wear a watch every day.  I'm confident a few years from now the hardware will be at a point where the watch will work without a smartphone with a day or more of batter life.  Will developers create enticing use cases that only work on a watch (just like Uber and Snapchat wouldn't have worked without smartphones)?  I can also imagine the  Watch being a fashion item and status symbol.  I just don't know if all of that adds up to a large enough market.  I'm not betting against Apple, though.

Thoughts on the market for a large iPad

Speculation around a larger iPad won't go away.  The biggest rumored feature of the 'iPad Pro' is its 12.9" display.  The device will also reportedly have superior display resolution, higher internal specs, and perhaps an exclusive split-screen mode.  Perhaps there's fire near this smoke, perhaps not.  Regardless, what does the market for such a device look like? Studies have shown that tablets are primarily bought by consumers (as opposed to enterprises) and used as media consumption devices to watch video, play games, read books, view photos, etc, as well as for email, social networking, and web browsing.  Although portable in nature, tablets are primarily used in the home, in contrast to smartphones.

This is only anecdotal evidence, but I've noticed some people are using a tablet instead of a TV.  Children are using them to watch Netflix and YouTube in their rooms or the back of the car.  I also know some couples that use a tablet along with the TV to watch two different programs at the same time, even though they are both in the same living room.  A larger tablet could be useful to these types of users.  It might also be valued for video gaming, drawing, and other creative applications that could take advantage of the larger screen size.

However, roughly half of all tablets sold are under 8".  This is partially driven by the lower price points of the iPad Mini and several quality small Android tablets, such as the Nexus 7.  Personally, I prefer a smaller tablet that is easy to hold in one hand for reading, and this may be a driver as well.

So, could a big iPad bring new users to the tablet category and spur sales, or is it just a small segment that some existing users will upgrade to?  I'm leaning towards the latter.  I think it will be a nice product that some users will find valuable, but most purchases will be from replacements, not new tablet users.  If and when it is unveiled, the announcement may shed some light on Apple's thinking.  Perhaps the iPad Pro will be all about enterprise productivity, which likely has more potential to greatly expand the category.

iPhone 6 Plus impressions - too much of a good thing?

I got my iPhone 6 Plus yesterday.  I've wanted an iPhone with a larger screen for a while.  I used the iPad Mini as my smartphone for most of 2013 before moving to the 5" Nexus 5.  I got fed up with Android after 6 months and have been using an iPhone 5 for the past few months.  I found the Nexus 5 very manageable and figured an extra 0.5" of screen would be no problem.  The 5.5" iPhone 6 Plus feels a lot larger and heavier though.  The Nexus 5 is actually about the same weight and size as the 4.7" iPhone 6, though the iPhone is a few mm thinner. Holding and typing

The 6 Plus is great when using it with two hands to read, browse the web, play games, etc.  As expected, doing anything anything with one hand other than scrolling is all but impossible for me, a tradeoff I am willing to make.  I thought thumb typing with two hands would be a big improvement due to the larger keys, but it's actually somewhat frustrating.  In portrait mode the extra weight and height of the phone makes it feel top heavy, like it could slip out of my hands easily.  In landscape mode a few columns of keys have been added on either side of the keyboard, so the letter keys don't get any larger and they are located in the middle of the screen where it's a bit of a stretch to reach.  I tried out a 3rd party keyboard that has slightly larger keys and it's actually nicer to type on than the stock keyboard.

What is all that screen good for?

The big screen is really nice for watching video, playing games, and reading.  I primarily use my tablets for reading, watching short videos, and web browsing, and I was hoping the 6 Plus could pull double-duty and replace my iPad Mini.  However, a lot of apps and websites (mine included) simply scale up to show the same amount of content they would on a regular iPhone 6 or even an iPhone 5.  This doesn't really put that extra screen real estate to use, at least not yet.

Many of Apple's apps have a split-pane view.  For example, in Messages or Mail you'll see a pane on the left with recent message threads.  The home screen also works in landscape mode.  These are nice touches, but it's frustrating when opening something that doesn't support landscape mode, such as the Phone or Podcast apps.  I wonder if split pane views would work on the regular 6, I'm willing to bet some third party apps will try.  There aren't any other software modes or special apps that take advantage of the additional space (yet).

6 or 6 Plus?

I'm guessing that many of the software issues I've mentioned will be fixed, either by Apple or with 3rd-party apps.  There is also the possibility those enhancements come to the smaller 6 in time.  I still like the idea of a really big iPhone, but only if it does more than its smaller counterpart.  Right now I think I’d be happier with the 4.7” iPhone 6.  In most places I'd see the same amount of content, and it feels better in the hand to me.  Maybe I'd start to miss my iPad Mini though.  I'd be giving up some battery life, but gaining a hundred dollars.  I'm going to give it a few more days, but I'm leaning towards trading it in for the regular 6.

It's time to bring streaming video boxes out of the dark ages - a few improvements to increase usage and revenue

I don't have cable television, so I rely on my Apple TV and mobile devices to stream a lot of TV shows, movies, and sports.  Before the Apple TV, I used a game console or computer.  I've also tested out the Chromecast and products from Roku.  All of these devices are perfectly adequate for watching Netflix, Hulu, or watchESPN, but they leave a lot to be desired in the user interface and content discovery departments. When the Apple TV only had a few apps it seemed appropriate to display them in a grid on the home screen.  It was also familiar to iPhone or iPad users.  However, as the number of apps grew, this interface started to feel dated.  (It is possible to move or hide apps, which I've done, but that doesn't fix the underlying problem.)  Roku and its 1,000+ channels faces the same issue, perhaps more so.  Further complicating matters, there is no simple way to see what content is available through the various apps on these boxes.  When someone sits down on the couch to watch something they might check Netflix, Hulu, ABC, PBS, HBO Go, and Amazon Prime before finding something to watch.

Think how ridiculous it would be if TV guides worked this way, only showing a grid of all channels currently broadcasting.  Instead, a TV guide displays a list of what shows are on, whether they're new/live or reruns, and perhaps some info on the plot or cast.  TV guides are far from ideal, but they are fairly accurate and informative across hundreds of channels.

Roku's universal search feature does a much better job of content discovery across multiple channels than anything on the Apple TV or Chromecast, but it still puts the onus on the user to think of a title and enter it through a remote or companion mobile app.  Can I Stream It? is a great service to see where movies and TV shows are streaming, but it's still up to the user to manually navigate to the title after finding out what app it's on.  Neither of these is an ideal input method or user experience.

It's time to bring streaming video boxes out of the internet dark ages.  Why can't a 'now playing' guide be integrated into the home screen, showing new or popular content from the apps and channels I select?  Even better if the content is custom tailored to my tastes.  This guide could alert me when new episodes or seasons of my favorite TV shows are released,  display titles from seldom-used free apps such as Crackle or SnagOn that I may enjoy, big events currently live streaming, and display titles in my queue expiring soon.  It should allow me to jump directly to the title with one click.  I'm unaware if Netflix or other services have an API for their content recommendation engines, but this would be a natural fit if they did.

This guide could also enable an additional revenue source.  Sponsored content or advertisements could be listed along with the titles automatically being displayed.  Sponsored listings could take the form of native advertising, which advertisers seem to desire on today's web.  The Roku does display some titles on the home screen, but it was always unclear to me if these were at random, ads, or something else.

I love streaming videos on my Apple TV, but the experience of finding and selecting something to watch could be much better.  It could also generate more revenue for manufacturers and indie content producers.  I really hope Apple, Roku, Google, or someone else is working on this.

Why I'm selling my iPad and the challenges tablets face

I'm selling my beloved iPad Mini.  I've used it as a smartphone, then as a complement to an Android phone, and now along with an iPhone.  Since going back to an iPhone I've used it a lot less.  My iPhone is always with me, and does everything the iPad can do.  I still use the iPad for reading and web browsing on the couch or while in bed, but that's about it.  I occasionally use it to play a game, check email, browse Twitter, or watch YouTube videos, and there are some great apps for gaming, drawing, DJ'ing, and music creation.  However, all of those things can be done on a smartphone or laptop, some much more efficiently.  Now large screened phones are becoming more mainstream and battery life is slowly getting better, and that will squeeze tablets even further.  I think that's the challenge in the tablet market: inventing and communicating use cases where tablets excel.  It will be interesting to see if Apple, Google, and developers can come up with those unique use cases. I should also mention that part of the reason I'm selling the iPad is to offset the cost of an unlocked iPhone 6 Plus (which costs $850!).  I never thought I'd spend that much money on a phone, but it's easier to justify if it replaces my iPad.

If the Apple Watch is the original iPod I'm waiting for the iPod Shuffle

If the Apple Watch is the original iPod, then I'm waiting for the iPod Shuffle of smartwatches.  Something inexpensive with great battery life and an interface so simple it doesn't even need a screen.  Just like the iPod Shuffle made me realize there was a place for a small and simple device that didn't store one's entire music library, I don't need to launch apps or send doodles from my wrist.  I would like to track my movement, sleep, and heart rate though.  I would like to get a light buzz when I receive a notification, even better if I can select which apps send notifications to my wrist.  I would be interested in using a wrist-worn device with Apple Pay or to unlock my Mac.  Maybe it could also be used for basic controls like the Apple headset is (pausing/playing music, answering/ending calls, activating Siri, etc) . The Shuffle also greatly improved on the iPod's battery life.  I anticipate the Apple Watch will need to be charged daily.  A simple wristband without an LCD screen could last several days on a charge.  Of course, it would also be less expensive and could come in several different colors.

I'm trying to reserve judgement on the Apple Watch until I get to personally use one, but I just don't see what it does that my iPhone can't (there are a few though, such as the remote iPhone camera viewfinder, which is pretty cool).  A Jawbone Up is a simpler, less expensive, and more appealing option to me for the time being.

Notes from the iPhone 6 event

Apple made a lot of announcements today.  Here are a few things that stood out to me that may be a little under the radar of the big tech blogs. iPhone 6 Differentiation:  There are some subtle features (other than size and price) that differentiate the 5.5" iPhone 6 Plus from the 4.7" iPhone 6.  The 6 Plus's screen is larger, and also has more pixels at a higher density.  The camera on the 6 Plus has optical image stabilization, which helps reduce shaky videos and blurry photos, while the 6 only has digital image stabilization.  The 6 Plus has a larger battery, which gives it better battery life across various use cases.  However, the increase in battery life from the 5s wasn't quite as much as I'd hoped for.  The 6 Plus's software also makes use of the larger screen in landscape mode in some apps, much like the iPad does.  For example, you'll see a list of emails on the left quarter or so of the screen and the current message in the rest of the screen.

None of these features alone should be enough to convince average consumers to buy the 6 Plus over the 6.  They do help justify the $100 price premium, especially for users concerned with battery life or photo enthusiasts.

Margins:  The introduction of the 6 Plus at a $100 premium to the (already premium) 6 and some tweaks to pricing of storage tiers should be a boost to Apple's gross margins.  The base models of the 6 and 6 Plus both come with 16GB of storage, but an extra $100 bumps up to 64GB (instead of 32GB on previous iPhones), and they added an additional 128GB tier.  The 5s also starts at 16GB, but an extra $50 now gets you 32GB.  16GB is starting to feel pretty small, and this will likely entice more users to spend a little more to get more storage.  That extra $50/$100+ is basically pure profit for Apple.

Branding:  We got Apple Watch and Apple Pay, not iWatch and iPay.  Will the 'i' prefix be deemphasized for future products and features?

Cloud Security:  Apple didn't address last week's iCloud breach.  They did unveil Apple Pay, which stores information in the cloud, but not actual credit card numbers.

Speaking of cloud, the live stream itself was atrocious.  It cut out at least a dozen times, froze my Apple TV twice, and there was a very annoying and distracting Chinese language audio stream layered on top of the English stream for about the first half of the event.  Apple gets a lot of things right, but cloud stuff just isn't one of them.  I can't help but think Google wouldn't have had these problems.

How should we define phones, tablets, and computers a few years from now?

Smartphones are getting bigger, tablets are being used to make phone calls, and laptops bend and fold in all sorts of new ways.  So, how should we define all of these device categories a year or two from now?  Is anything with the ability to make a phone call a phone?  Should tablets and phones be differentiated by screen size, maybe 6 or 6.5 inches?    How about the line between PCs and tablets - should it be based on primary input method (touch vs keyboard/mouse) or the capabilities of the OS (file manager, multi-window support, etc)? Market research firms are going to have a tough time with these questions, and will shoehorn some devices into legacy categories where they don't seem to belong.  Perhaps the most useful way to think about device categories will be based on their primary use cases:  portable devices that one carries with them at all times vs productivity devices with a range of input methods and more software compatibility.  There is probably another category in between them somewhere, and perhaps more categories on the edges.  Time will tell, it will be interesting to see how this all evolves.