Slow Brand

taking a slow approach to brands

Entries Comments



Revisiting my thoughts on what Apple should do with cash hoard – Feb 2013

7 February, 2013 (17:32) | business design, technology | By: Shannon Clark

A bit over a year ago I posted my thoughts on what Apple should with their cash hoard, at that time it was nearly $70B. While I stand by most of my thoughts then, now they have over $130B in cash, even after planning to disburse over $45B in dividends over the next 3 years.

Earlier today my friend Ben Parr was on CNBC to discuss his thoughts about what Apple should do with their cash hoard now – his suggestions echo many of mine. Instead of trying to issue more stock or pay even higher dividends he suggests that Apple should be using (and probably are) their cash hoard to reinvest in the components they current use and plan on using the future like Flash Memory.

I still stand by my core suggestions from a few years ago with some updates:

  1. Apple should invest in the Enterprise. Apple’s Enterprise successes are not as well known as their consumer successes. But they have made significant traction in getting iOS adoption within enterprise companies and the willingness of Enterprises to support Macs has been growing. However Apple’s Enterprise offerings in terms of servers and large scale enterprise purchasing and deployment of computing devices is not as well known or well managed. There are many opportunities for Apple inside of the Enterprise to build on the popularity of the iPad and the iPhone to expand upon their successes. Innovative firms and startups as well as independent consultants have for many years now be early adopters of the MacBook line, especially the MacBook air and more recent Retina Display models.
  2. Apple should consider buying Foxconn (if possible) and buying more of their supply chain in general. Apple since their switch off of Intel processors and onto their own processors has seen their biggest years ever. Buying Foxconn may not be possible due to Chinese laws (and the costs) but they should be looking closely at ways to continue to own much of their core components and their full supply chain as they have shown the very big value they can extract when they do so.
  3. There is a growing window for an Apple gaming console not (just) an Apple Television. I still think that Apple has a major opportunity to dominant the living room if they were to seriously explore a new gaming console (which also embeds all of the functionality of the latest generations of the AppleTV devices) and which might be paired (though would not require) any new screen that Apple offers as an Apple Television. In 2013 we almost certainly will see the announcement of new consoles from Sony and Microsoft, though whether those will arrive in time for the holiday season in 2013 or won’t show up until 2014 is still open to debate. In either case Apple has an opportunity to explore a new platform to compete with the WiiU, Playstation and next gen Xbox. I said this could happen years ago, I stand by that – in particular the growing power of iOS for immersive games suggests that Apple could do something interesting with a game console. And imagine if instead of a proprietary controller w/screen (ala WiiU) if Apple could allow iPads and/or iOS devices like the iTouch or iPhone to pair with the games console and be used for navigation, data entry and at times as a second (secret) screen. Apple could look at buying a new firm like Ouya (for their controller designs more than their device) or swinging even bigger and far more costly look at trying to buy Valve (and get Steam in the process). There were rumors to this effect in April of 2012 after a visit to Valve by Apple’s CEO but I think it should be given serious consideration. I would, however, guess that the cost might be in the multiple billions.
  4. Apple should consider buying PayPal from Ebay. Okay this is a wild speculation and new (not part of my previous speculation) but I think that Apple should look at buying PayPal from Ebay. The intersection of a global payment processor with the iOS device global ecosystem (and the new Passbook offering) could be quite significant. Apple could potentially help PayPal find a route into use by millions (hundreds of millions actually) consumers and integration with thousands of developers building upon the iOS and Mac platform. PayPal however suffers from a UI and UX problem (for consumers, merchants and developers) which Apple could potentially help through allocation of Apple designers and developers (and management). What Apple could get is a further extension upon their massive payment processing – i.e. the millions of payment cards linked to iTunes accounts. And among payment processors and applications PayPal is among the most global and Apple is very much a global company today.
  5. Apple should expand even more globally. Apple is very global already with stores globally and manufacturing on a global scale, but this suggestion is that Apple should also be looking to aggressively hire staff at all capacities globally. This suggestion isn’t, I should note, that Apple should be looking to do this as a cost saving method. In fact I would argue that this should be done whether or not the staff hired globally is cheaper than US alternatives. Instead I’m suggesting that to keep up with a global demand for Apple products Apple should be looking to hire the smartest technologists, designers and business people wherever they live and whatever languages they speak. And I would bet that if they do this aggressively it will be an idea sparked by one of these non-US employees that will lead to their next $1B+ (many times plus) product line. LIkely a type of very Apple product that might never occur to their US based staff (either in type or in the business potential)
  6. I still think Apple should attempt a national (at least) Wifi network. Legal issues and barriers may make this functionally impossible (liability for open Wifi hotspots in particular) but if Apple could find a way to help support the richer spread of municipal wifi networks as well as the overall expansion of actually good broadband throughout the US that can only help their ongoing sales (in all categories). However there may be too many issues around this for them to consider.

What are your suggestions for how Apple should spend their billions? 

What Apple could do with $70B – my alternatives to Jason Calacanis’ LAUNCH suggestions

13 September, 2011 (17:58) | branding, games, social media, technology | By: Shannon Clark

Earlier today Jason Calacanis sent out his latest edition of his Launch email newsletter with a bunch of alternative suggestions for what Apple should do with their $70B+ warchest. Apparently earlier this week a Wall Street analyst made the stupid suggestion that Apple should pay a dividend (which in my opinion as well as Jason’s would be a massive mistake by Apple and a negative signal to the market).

While some of Jason’s suggestions are good ones, a few are, I think, mistakes as well. Jason also misses the biggest and most valuable moves Apple could (and is) making with their warchest – namely ongoing investments into their supply chain efficiency and scale as well as the highly profitable investments they have been making in opening up additional Apple stores (which have the highest per sq. ft sales of nearly any retailer anywhere in the world).

To be specific I think Jason’s suggestion of offering a massive discount on the iPad for the educational market is a mistake (and based on a bunch of faulty ideas). Any discount beyond what Apple already offers if big enough will be gamed and used to fuel resellers (i.e. students and others buying at 60% and selling at 30% off on eBay). Apple is relatively unique amongst all consumer electronics businesses in rarely offering any sizable discounts and likewise they are unique in being amongst the most profitable of consumer electronics companies. I don’t think this is coincidental. Apple maintains strict price controls on their small set of goods for sale and in place of deep discounts offers new, better products on a regular schedule as well as bundles of goods for the educational market (notably this year they offered $100 iTunes credit in place of their more traditional offer of a free iPod to students). Apple has massive volume without massive discounts – and they already do have millions of tablet users (if not quite yet 100M they are selling iPads nearly as fast as they can make them) and they do have well over 100M iOS devices (a lot more).

I also don’t fully agree that Apple should pay 100% out to developers. Apple’s 30% does more than just pay Apple. It covers credit card payment fees, it pays (small) affiliate fees and it means that the App store (and iTunes) are viable, more than self-sustaining businesses. This rigor is good for Apple. It also helps curb, a bit, the general downward pressure on prices (since most businesses are bad at setting prices Apple’s floor of $0.99 for apps which aren’t free is a good thing). I think that the Mac App store as well as the iPad have started to slowly shift sales off of the $0.99 price point to higher prices which is better for developers. In-App purchases also have been very successful for many developers. Apple could, perhaps, waive fees on certain CLASSES of sales – for example perhaps paying out a higher percentage on in-app purchases of CONTENT (magazine subscriptions, music, videos) while retaining the 30% on the sale of apps and app functionality. Sure the line between content and app can be blurry but I think this could help grow the app market even further (and let Amazon as well as many music companies turn back on sales of content inside of apps). Apple could also waive or eliminate any requirement to clear content sales (with a process to ensure that if an app claims to be for all ages it doesn’t offer adult content – if it does the app could face a penalty)

Apple is about to “pull a gmail” with the pending launch of iCloud, though the actual figures for size are a bit more complicated than Jason’s proposed 50GB. Apple will be offering 5GB for free with additional space available. However since Apple has stated that music and photos don’t count (if you sync them to the cloud) it is a bit hard to compare directly to Dropbox etc. See The Next Web’s coverage in August for some more details on the pricing.

I like Jason’s suggestion for buying Boingo Wireless and for investing widely in a nationwide (and ideally global) network of free (for Apple devices at a minimum) hotspots. This make sense though Apple would likely need to invest more than Jason estimates to buy wireless hotspots Internationally. Also there is a valid argument for paid hotspots in meeting the business needs of the venues where those hotspots are located – but perhaps Apple could find creative alternatives to compensate venues and minimize freeloading (or overloading of a hotspot from neighbors). This is less of a concern in locations such as airports where most people are passing through, but it is an issue in urban venues where people may live upstairs or next door. It is also a case that wifi hotspots get used for less-than-legal purposes or just for uses that tie up significant bandwidth – such as large downloads. Apple, however, does have a business need to promote high bandwidth use cases (such as downloading large OS updates, downloading purchased apps and movies, streaming content from iCloud etc) so Apple might have a business reason to upgrade the wifi networks. If Apple does this purchase they might also face carrier pushback (though since Boingo likely purchases bandwidth from some of those carriers this may be muted).

While I see the argument for Apple investing $10B in building their own search engine to compete with Google (Jason suggests offering this without ads – I don’t see why that would be so compelling however as ads against search is now a clear and interesting business). But that isn’t, actually, hitting Google where they are strongest.

What Apple SHOULD do if they really want to all out compete with Google is invest $10B (or more) in building out their iADs platform into a valid competitor for Doubleclick. This would be hard but the profits in building up a valuable ad serving business on a massive Internet (and mobile Internet) wide scale could be immense. This would require likely some highly creative purchases as well as deep investments into core technology and into a massive salesforce and agency outreach. Apple might start by looking to buy parts of Yahoo and AOL (but likely not all of both companies) though there is an equally strong argument that the industry needs new approaches not the same old approaches.

My personal suggestion beyond the billions in supply chain investments which Apple is already making – buying up capacity and funding the building of new plants and manufacturing capacity for the components that go into Apple’s devices would be to look at the following additional investment options.

  1. Consider, if Chinese law permits it, the full purchase of Foxconn. Yes this would mean adding 1M+ employees to Apple’s books and yes this would mean that Apple would “own” the working conditions. But it would further ensure that Apple fully owns their supply chain and manufacturing process in a manner that few other companies do at the moment. This might, however, have downsides. Not least of which is that it could limit their ability to use new suppliers in the future and it could have major legal hurdles (as Chinese law may not permit the foreign ownership of big Chinese firms). Baring this Apple should continue to invest in improvements in the working conditions of their manufacturing processes and look at ways to diversify their manufacturing into other countries than just China (to minimize future supply chain disruption risks). If any company in the world could figure out how to profitably manufacture in the US (or other “Western” countries once again it is likely Apple).
  2. Many pundits have suggested that the next logical move for Apple is to offer an Apple TV. I don’t think this is bold enough. I think Apple should look at investments in a home gaming console – one that builds on the Apple TV (and iOS) but which is a full fledged competitor to the XBox, Playstation and Wii (including the next generations of each of those consoles when they come out). One possible approach which would be “different” would be for Apple to buy OnLive which would likely cost $2B or more especially if they also purchased the related Reardon Companies whose Shannon’s Law breaking wireless technology if it works and can be deployed could go far beyond Onlive (or Boingo) in applications and value to Apple. Onlive isn’t riskless in the least but if Apple purchased them and made a massive investment in growing them as well as in adding Apple TV capabilities to the Onlive box (and leveraging Onlive’s successes in being integrated into other devices) it could be a really really big shift in the gaming landscape. And if, as has been rumored, OnLive becomes more than just a PC (as in Windows) gaming platform this shift could be even larger. The potential in the Onlive model exists for games that run on hardware that dwarfs that of any modern (or even future) console system – while displaying on today’s laptops and TV’s.
  3. Apple should invest in “getting” Social. For all that Apple is design focused the one area of modern design they haven’t cracked is Social. The deep Twitter integration into the Apple platform that is coming is a good starting point but it shouldn’t be the end game. Apple should invest in ways to leverage their massive brand value as well as deep consumer relationships and touchpoints into a real, engaged and valuable social experience. Already iTunes (and the credit cards and credits in iTunes) represents a massive network of users – albeit one that hasn’t been socially engaged – yet. Ping doesn’t count. Apple could and I think should make some bold moves to get Social. They could buy some social assets on the cheap (MySpace for example) and work on migrating those social experiences to better run and better designed Apple experiences. However a counter argument could be made that Apple’s lack of “Social” has left room for massive innovation by iOS developers leveraging Apple platforms as well as the web in building new social experiences and that any move by Apple might disturb this valuable ecosystem.
  4. Apple should invest in the Enterprise. Apple’s Enterprise story is far larger than most pundits understand – the iOS and iPad platform is seeing massive corporate deployments all the time and I suspect IT departments everywhere are seeing greater demand for Apple devices as alternatives to PC platforms (and as the price competitiveness and performance of Apple devices keep growing the IT arguments against Apple computers in the Enterprise diminish rapidly). The shift of many corporate software platforms from internal networks to SAAS (software-as-a-service) also minimizes the need for a uniform enterprise platform. That said, Apple’s Enterprise story could be far larger – they could offer more from their server offerings and they could invest in SAAS offerings themselves (Salesforce however might not be a great fit though it might be worth exploring).
I think as Apple continues to grow they will also, soon, be competing with some companies few pundits expect them to be competing with. Game companies for example (though the iOS devices already are seen as winning against dedicated portable game consoles) but also more Enterprise and niche companies such as Salesforce, Cisco and others. I could see Apple, perhaps via an investment in/purchase of a company such as Boingo and/or Rearden Companies suddenly being a competitor of many networking companies. Apple might also purchase additional chip companies to further control the supply chain for their devices – a company that makes radios and other networking chips for devices from the iPhone to the iPad to the Macbook Air might be a very logical (and relatively small) purchase for Apple to make in the near future. If Apple also purchases an IP shop such as Reardon Companies they might further compete via offering better devices for a better price than a company such as Cisco can offer today.
These are my suggestions – what are yours?

Pushing the limits of the iPad – complaints with answers

6 April, 2010 (12:11) | technology | By: Shannon Clark

What are the limits of the iPad?

Many earlier reports about the iPad complain about various elements – missing multitasking, the weight of the device or the lack of built-in cameras but I think these reports are missing a great deal about what is already possible on the iPad and where in just a little while the device may be heading.

  1. The lack of multitasking or the “I can’t listen to music while I work” complaint. While it is true that at the moment you can not run two or more third-party apps at the same time, it is, however, not at all true that you can’t listen to music while working in another app. In fact there are at least two different ways to accomplish this on an iPhone or, I think, on an iPad. see below for how to do this
  2. The missing built-in cameras or “how can I get photos onto the iPad” plus the related “you can’t do video calls/chat”. While it is true that the iPad does not have a built-in camera there are at least two ways to get photos onto the iPad. And see below for another possible third way which may even offer an opportunity for video on the iPad!
  3. The weight or “this thing is very heavy” (usually compared to an iPhone/iTouch). As the nearly 4+ year owner and daily user of a tablet convertible ThinkPad, a tablet which weighs in at over 5.5lbs with the extended battery and over 6lbs with the charger I have to carry with me (as even with the extended battery my battery life is only ~4hrs now) I do not have much sympathy for this complaint. But see below for a few ideas about how & why this isn’t much of an issue actually.

How to listen to music while doing other things on the iPad (or iPhone/iTouch)

To listen to music while you are working inside of other applications on the iPad you have at least two easy solutions.

Option 1 – iPod application. As you can see in Apple’s Guided Tour for the iPod application on the iPad, you can play music via the iPod application while you are running other applications. You can sync your favorite music from your iTunes on your PC or Mac and play back on your iPad. I would suggest you construct Smartplaylists (I’ll post an article in the future about how to do this – I use dozens) to have fine-grained control over what portion of your library you keep on your portable devices. You can also download and purchase additional music from the iTunes store (I don’t think you can download podcasts directly but I always sync my latest podcast subscriptions to my portable devices)

Option 2 – Streaming via Safari. A not entirely well know feature of Safari on the iPhone/iTouch & now on the iPad is that it is capable of playing back streams of audio (or video) which are formated correctly for HTML5 & Safari. And these streams will, at least on the iPhone/iTouch (and I suspect also on the iPad) continue running in the background if you close Safari and open another application on the device.  This is not, to be sure, all sources online but it includes a large and growing number of sites. The MLB (Major League Baseball) iPhone application uses this “trick” to offer access to streams, via Safari, which can play while you are running other applications. Friends use this to stream NPR while they run other applications on their iPhones today.

and of course there is the less elegant but equally valid

Option 3 – listen to music via another device. Many iPad owners, including myself when I buy my iPad in a few weeks, will also own an iPod and/or an iPhone/iTouch. I certainly expect that as having my iPad will mean I need to use my iPhone for data & applications less frequently that I could easily play music either via the iPod application or via an application which does Internet radio (Pandora for example) on my iPhone while I run other application on my iPad. Though I have heard that the Pandora iPad application is a great experience.

And don’t forget that a solution to the complaint about the location of the iPad headphone jack is to use a bluetooth wireless headphones which I suspect will see greatly expanded sales in the coming months.

The missing cameras.

There are many options to get photos onto the iPad already. On the Apple website they list three.

  1. Sync via iTunes
  2. The camera accessory for the iPad which offers SD card reader & USB connection options via the dock connector
  3. Save photos from email to the iPad
  4. not listed by Apple but likely you can also save images from Safari to the iPad

But there is an interesting possibility which I have not see mentioned anywhere – neither on Apple’s website or in any coverage of the iPad. With the advanced Bluetooth capabilities of the iPad potentially Bluetooth enabled cameras, including video cameras, could be attached to the iPad.

Now as I mentioned I don’t know if this is a possibility and to be sure the current models of Bluetooth capable web cameras are mostly pretty ugly devices intended for use in an office, but it possible wearable Bluetooth capable cameras could open up an amazing range of applications to the iPad.

The weight.

As I mentioned, I have been accustomed to carrying around with me all day long over 6+lbs of tablet computer & related devices. I don’t know if the iPad will be a full replacement in my daily usage but in a large range of situations the iPad will offer capabilities impossible with my current tablet and for me shaving off over 5lbs of devices I need to carry along with the ability to use a vastly smaller and more lightweight bag are huge advantages. I am eagerly looking forward to shifting to a much lighter and smaller bag, a bag without the weight of extensive padding to proteect my heavy laptop in favor of carrying an iPad (safely in a protective case that doubles as a multipurpose stand) in a much smaller & lighter (and to be frank better designed) laptop bag.

For a great collection of additional articles and coverage of the iPad see this Pearltree:

iPad

Creating on the iPad or a few million dollar ideas

1 February, 2010 (01:30) | technology | By: Shannon Clark

A few days ago here in San Francisco Apple announced the iPad. On Twitter and across the web the reaction was swift and overwhelming some positive and much negative. The follow on press hasn’t been very positive – much of is has been people complaining about features which are lacking or trying to define who the iPad is for – typically coming to the conclusion that is for some group of “others” (non-computer savvy folks, “your mom” etc).

I think most people are flat out wrong.

I didn’t attend the Apple Press event so I have yet to play with an iPad in person myself, when it goes on sale I hope that I’ll have had enough consulting (or writing or a new full-time position) to allow me to buy one for myself.

But I think that most people writing about the iPad are missing MANY important details about the device and the opportunities which these pose. Below I outline a number of business ideas which I think will be multi-million dollar businesses and which, in many cases, I think will drive many purchases of iPads.

A few important points.

  1. I see a lot of content creation and not just content playback opportunities with the iPad
  2. I see many serious business uses not just individual personal uses
  3. I also see some hardware & software combo opportunities (but need to confirm they are feasible)
  4. While I think there will be a huge, mass audience of iPad users I think it is actually the very technically savvy and demanding who will find great value from using the iPad especially as they (and others) build great & powerful applications.

Content creation and authoring

Apple demonstrated their full iWork suite for the iPad – Keynotes, Pages and Numbers. These will be very useful and powerful applications for any author or presenter. Indeed as an entrepreneur and writer I am looking forward to using an iPad w/Keynote to give adhoc presentations, using Pages to write anywhere and even using Numbers (making it likely the first time I use a spreadsheet on a regular basis) to track various things.

But I don’t think that begins to scratch the surface of the types of content creation applications which will be created on the iPad.

The Brushes application which was shown during the Apple iPad announcement and which was famously used (on the iPhone/iTouch) to create a New Yorker cover) is just the beginning. I predict that a very soon someone (likely more than one company) will create a comics illustration application (or likely suite of applications) for the drawing, coloring and lettering of comics. With output for the web, for eComic readers including on the iPad and even print-on-demand or just regular print publication. Idea #1 – comics creation tools (okay this might not be multi-millions but should generate real revenues & excitement, already existing eComics readers should also get a major boost by the iPad – but that isn’t a “new” idea)

On the music front the many single instrument iPhone apps will continue and grow in complexity given the greater surface area and thus greater amount of control and flexibility which the iPad could offer. Combined with either complex hardware devices connected via the 30 pin dock of the iPad, via Bluetooth or via the headphone jack the possibilities are quite complex. I also suspect that very quickly  someone will create an iPad based sampler with a wide range of options, beat generation and remixing. Using the microphone (or Bluetooth connected microphones) to record additional samples as well as in-app purchasing of samples and even additional instruments. I can imagine a full ecosystem within a single music creation & remixing application. An application which very likely could rival physical samplers in capabilities and which could support a rich ecosystem. Idea #2 – music creation/remixing/performance + licensing of instruments, samples & content to remix = big $ opportunities for many different apps, artists & companies

The lack of a built-in camera may seem a limitation but the iPad will also build on the many existing iPhone applications which offer a wide range of photo editing and manipulation capabilities. The larger screen size of the iPad will offer greater ease of editing large photographs as well as more complex manipulations such as editing together panoramic shots. Many of these applications, such as Adobe’s existing Photoshop iPhone application will connect with a web based service for hosting and sharing the photos. I would also expect that professional image licensing services such as iStockphoto and Getty will offer iPad applications for browsing their images libraries and licensing those images.  Idea # 3 – iPad app based stock photography (and perhaps video) stores combined with iPad based content creation tools as well as expanded features of photo editing applications

Writing on the iPad is more than just document creation it will also involve writing for web. Currently WordPress has a great iPhone application. I expect that the iPad version will make the creation of blog posts on the iPad even easier and more complex. Most competing web content creation services will have iPad (and iPhone) applications soon and I predict there will be a growing range of specialized iPad applications for content creation driven needs. For example applications for liveblogging events, for moderating & managing high volume online discussions and more. Idea #4 – iPad based web content creation tools which expand on what WordPress offers today.

Augmented Reality Games

But wait you are saying, the iPad doesn’t have a camera so how could you do Augmented Reality on it?

Well, and here is what I meant  above, what the iPad does have which many people haven’t fully noticed yet is full support for Bluetooth 2.1 + EDR. Apple notes that this could be used to pair wireless headphones or a wireless keyboard. But that may not be the only things which could be paired – there are already a handful of Bluetooth 2.1 enabled cameras on the market with some specifically marketed to pair with Macs.

I predict that a number of creative companies will make a wide range of input devices via Bluetooth for the iPad. Cameras would be a very logical starting point for this and done well would expand the capabilities of the iPad immensely while addressing the many issues which a built-in camera would face.

One of these uses could be a Bluetooth camera which you would wear on your head or affix to your lapel and which would then be used with your iPad to drive an augemented reality application. Ideally this device, if this is possible via Bluetooth, would also contain a digital compass & GPS and pass that information back to the iPad as well. If not then the internal digital compass and GPS (if the iPad has is the 3G version) could be used to locate the device. But even without a GPS the digital compass could be sufficient for a number of really creative augmented reality uses – for example an app which when it fires up directs you to a known, fixed starting point and then uses the digital compass from that point onward to help direct you.

Idea #5 – Bluetooth connected devices beyond headphones or keyboards – cameras, microphones, sensors and controllers. Done well these products & the apps to leverage them could be major businesses.

These are just a few immediate ideas I have for how the iPad could be a driver of a lot of content creation as well as very creative applications and services. Far far more than just being a frame for content consumption the iPad will be a platform and connected device driving content creation and interaction.

UPDATE – after I wrote this I found http://emergentbydesign.com/2010/02/01/699/ which is by far the best summary of blog coverage of the iPad reactions I’ve seen yet.