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  • The Future of PC and Mobile Processors PC Magazine logo

    I've spent a lot of time with a number of hardware manufacturers recently, trying to get a glimpse into the next generation of processors and the ways in which they'll impact future gadgets and PCs. In all my meetings, one term has arisen time and again: SOC, or system-on-a-chip.

    Traditionally, chips have been created independently and then coupled together to provide multiple computing features. For example, a manufacturer would create a core processor like an Intel Centrino with a built-in Wi-Fi radio, and then attach that to a systems board, perhaps linking it together with a separate graphics co-processor, in order to deliver enhanced PC graphics. Another might take an ARM core processor and then add on additional features like extended graphics to enhance device functionality.

  • Apple's iPad: Live up the Hype? It Will....
    It was interesting to hear all the chatter after last week's iPad launch. Most reactions I heard from other analysts and media were lukewarm at best...which was what I expected. If you think about it, how can anything live up to the kind of hype leading up to this launch? But there was a lot missed in the media about the event and the product that I hope to share in order to maintain our perspective on not only the iPad but on Apple and their products.  
  • Innovation Abounds - CES 2010 Post Show Analysis

    This year's CES was very interesting. I had felt for the past few years that CES was sorely lacking in the innovation department. But this year it looks like things have changed in the technology industry. Technology companies have realized that to reach the consumer the pace of innovation needs to accelerate, and this year's CES was a start in that direction.  Several things stuck out that I'd like to highlight:  

  • Apple's Competitive Advantage

    One of the primary things about being an effective technology industry analysis firm is that we have to clearly communicate our perspectives about the technology industry as a whole to our clients. This requires more than just the regurgitation of information as we gather it in the field. It requires explaining more fundamental elements of what is happening and why. It is because of this that we seem to get one question common to many of the companies that we speak with and provide services to. That question is: "Why is Apple doing so well and what can we do to compete?"


    Particularly of interest to many is why Apple appears to be recession-proof while many others in the hardware business had a rough 18 months or so. There are more reasons then I have time to go into in this article as to why Apple appears to be unstoppable, so I will highlight just a few. I am a big picture strategic thinker by nature and I love thinking about and strategizing around competitive advantage and differentiation. That is why I love analyzing Apple, because they play the strategic game extremely well, particularly when it comes to developing strategies to defend their competitive advantage. There are three key areas that stick out to me as particularly defensible for Apple. 

Apple's iPad and its Impact on Competitors

Written by Tim Bajarin Thursday, 28 January 2010 17:31 Last Updated on Tuesday, 09 March 2010 16:41

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When Apple introduced the iPad this week, most of the world was mainly focused on it becoming a new version of a tablet, a mobile computing form factor that has been on the market for almost 20 years. And while it is a more consumer friendly version of a tablet, I believe the iPad will have a more far-reaching impact on the mobile computing market and all of Apple’s competitors.

What Apple did is nothing short of introducing a completely new concept of portable computing. The iPad clearly will work well in the slate or tablet mode. However, in that mode, it is mostly a device for accessing and viewing content. And contrary to what Steve Jobs says about the virtual keyboard being great for input, it is not very likely that people will use it for any serious data input while in the tablet mode. But they had three pieces of technology tied to it that does extend its functionality and allows it to deliver a completely new concept in portable computing.

First, it includes Bluetooth. Phil Shiller, Apple’s Executive VP of Marketing, told me that this so that it can work with a Bluetooth keyboard.  Second, they also introduced a slick keyboard docking accessory that allows people to do real work on this device. And third, their creation of a version of Apple iWork for the iPad was very telling. They wanted to show people from the start that a tablet is great for productivity as well. Thus, it is more then just a new fangled tablet. It is a new approach to mobile that makes the screen the center of the computing universe but also has a keyboard that can turn it into a netbook of sorts for real work.

The iPad poses a real problem to competitors on a couple of fronts. The big one is the fact that Apple uses their own processor to power the iPad. No Intel tax in the bill of materials. And, they own the OS, UI and apps SDK and content and apps distribution layers as well.  I suspect that even with bill of material costs for screen and memory being an issue, Apple is still able to get margins of over 20% for the entry version at $499 because of this vertical integration of Apple IP.  On the other hand, any competitor doing a tablet will have the screen and memory component costs as well as the processor costs and at a competitive price of $499, they would have much smaller margins to work with.

Also, Apple is able to tap into its rich eco system of easy to use multi-touch interface and 140,000 apps that give it additional functionality from the start. At the very least, it puts them two years ahead of competitors who will try and create competitive products in this same category with similar app ecosystems.

But I want to be clear on this issue. The iPad introduces a new approach to mobile computing; one where the screen is the star and it shines really bright in its ability to deliver the full Internet and all types of applications that can be viewed and accessed in tablet mode. But it can also be transformed into a serious productivity tool with the addition of a mobile keyboard at any time. It has the potential of upending the whole mobile computing paradigm that we know of today.

My prediction is that the iPad will really shake up the competitors and really hurt their netbook business in the long run. And, the competitors will really struggle this time to find a way to create tablets that are equally as unique and competitive with Apple. Sure, they will create similar designs, but Apple’s ability to deliver a complete eco system of hardware, software, apps and services tied to the iPad is their real advantage. And with iPads starting at $499, it will make it much easier for Apple to push a new mobile computing agenda that goes well beyond the interest of techies and will tap into the mobile computing interest of a large market of consumers.

 

 

 

 

 

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