Amazon Makes It Clear It Will Survive iPadmania

James McQuivey

This is a phenomenal week to be covering the publishing industry. Tuesday, Apple released its quarterly earnings. Big surprise, another record-breaking quarter for the folks in Cupertino. A few billion here, a few billion there, blah, blah. How amazing is it that we're not really surprised by such overperformance in an otherwise still-troubling economic environment? Of great interest to me, the eReader guy, was the final iPad tally for the quarter ending June 26th: 3.27 million units worldwide. Still no good guidance on what the US split is, but no matter how you slice it, iPads are hot. (And, no, I still have not bought one, still holding out for iPad 2.0).

And if you follow the implications of that success, as many in the media have, Amazon should just concede the eReader business, pack up its cream-colored Kindle and go home, right? 

Wrong. And to prove it, Amazon made a point of announcing some news of its own, the day before Apple's results were public. Amazon flaunted its own success in selling both Kindle devices and eBooks. That's right, despite that iPad upstart, the Kindle is still flying off the shelves, selling more units each month than the month before it all through Q2, when the iPad challenger was supposedly pummeling it. And it's dominating the eBook business as well, selling as much as eight in ten of the eBooks of major bestsellers, seeing its eBook sales rate triple over last year. Oh, and Amazon indicated it sells 1.8 eBooks for every hardback book it sells. That's right, even though it discounts hardbacks to paperback prices for many bestsellers.

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How Are You Using iPad For Business?

Ted Schadler

We are getting many requests for help on iPad strategies for the enterprise. It's clear why. iPads are a tremendously empowering technology that any employee can buy. My colleague Andy Jaquith has a report coming real soon now on the security aspects of iPhones and iPads, and I'm launching research on case studies of iPad in the enterprise.

I am currently hearing about three business scenarios for iPad and tablets, but I'd love hear of your experiences, plans, concerns, or frustrations. Ping me at tschadler(at)forrester(dot)com. Here are the three scenarios:

  1. Sales people out in the field. This is the "Hollywood pitch deck" scenario. The iPad, particularly with a cover that can prop it up a bit, is a great way to scroll through slides to show a customer or demonstrate a Web site. In one situation, I heard that there's a competition brewing for who can manipulate the Web site upside down (so the client across the table sees it right side up) without making any mistakes. Now there's a new skill for sales: upside down Web browsing.
  2. Executives on an overnight trip. No, iPad doesn't replace a laptop (at least not yet; more on this below). But it's great for email, calendar, reviewing documents, and presenting PDF or Keynote decks.
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iAd -- Is $60M A Big Deal?

Julie Ask

Most of the news this morning at WWDC was around iPhone 4 and iOS 4. Will leave the new device and platform play to my colleague Charles Golvin. I can't wait to get one of the new phones . . . very slick as it looks like a mini iPad in a modified format.

iAd . . . $60M committed for the second half of 2010. Initial advertisers include: AT&T, Best Buy, Campbell Soup Company, Chanel, Citi, DirecTV, GEICO, GE, JCPenney, Liberty Mutual Group, Nissan, Sears, State Farm, Target, Turner Broadcasting System, Unilever, and The Walt Disney Studios.

Pretty impressive. How do they get to $60M? Rumor is that the minimum buy-in is $1M, but it goes up from there. They claim to have 50% of mobile ad market share according to a J.P. Morgan study. I think it is a bold claim unless this is purely the media spend and doesn't include creative. Our number is comparable -- but without creative. Advertisers can count on the buzz surrounding iAd's launch on July 1. That alone may justify the initial buy. These initial advertisers are a smart bunch. A few million dollars isn't much to any one of them, but these are sizeable buys for mobile.

I think there are a lot of interesting questions to be answered. Many will be "wait and see," but here's my wishlist:

- What do I get for $1M+ in mobile advertising? Am I buying creative, development, ads, and analytics?

- How much targeting do I get?

- Is it performance-based? Or CPMs?

- What will work well on the i OS4 devices? Branding? Or, will the ads leverage context -- the context of how, where, and when I use these devices? Will the ads drive me to online purchases or into a nearby store to make a purchase?

- How much control do I get over where my ads are placed?

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iPad Mobile Marketing Applications ... 2008 Revisited, But Much Cooler

Julie Ask

When the Apple iPhone App Store launched a couple of years ago, we saw a flurry of marketing applications released. Some were exceptional. Many were average. iPhone apps were "hot," and consumer brands rushed to build them. They were somewhat expensive with most of the return based on press mentions and buzz. Brands felt that the perception of tech-savviness generated by the presence of an iPhone application would enhance their brand. I think they were right, but soon consumers began to expect iPhone applications. Initally, the iPhone didn't offer much reach. The iPod touch helped build the numbers. Apple's most recent announcement put total sales at over 80 million. Pretty good.

Two years ago, consumers mostly used their cell phones for communication. They also listened to some music and got a bit of weather, traffic and news. Now ... they do just about anything. They shop. They research products. They blog. They look up recipes. Are they doing so in large numbers? No, not yet. Consumers are a lot more likely to do more complex tasks on smartphones like the iPhone. The stakes are much higher for marketers - the potential return is higher with the ability to generate real leads and sales.

Here we are in 2010. Apple recently announced sales of 1 million iPads. Forrester believes that number will at least triple by year end. Apple has launched the iAd platform and promised consumers an engaging media experience that will include advertising, but not be disrupted by it. iAd includes the iPhone platform. iPads add another dimension or canvas that will unleash advertiser/agency creativity. We are now seeing our first marketing (first perhaps) and commerce (secondary?) applications. They are engaging. They offer rich media. They are interactive. They offer opportunities to link to videos, music, social networking sites, and shopping.

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Though Miffed, Media Companies See Silver Lining In Apple-Adobe Tiff

James McQuivey

 

The Apple-Adobe tussle is heating up to bizarre proportions, with Steve Jobs yesterday issuing a public defense for Apple's anti-Flash stance. Call it a blog-heard-round-the-world due to how quickly Jobs' comments spread, much appropriate focus has been placed on Jobs' technical arguments, including this write-up in The Wall Street Journal that quotes my colleague Jeffrey Hammond

But there's another big story behind this Flash fiasco that has successfully remained off the radar of most. It's the answer to this question: How do the media companies -- you know, those people who use Flash to put their premium content online everywhere from Wired.com to hulu.com -- feel about having their primary delivery tool cut off at the knees?

Answer: Media companies hope to complain all the way to the bank.

First, a bit of disclosure. I'm the one who went on record explaining that the lack of Flash is one of the reasons I am not buying an iPad. So I'm clearly not a fan of the anti-Flash rhetoric for selfish reasons: I want my Flash content wherever I am. But I've spent the last few weeks discussing the Apple-Adobe problem with major magazine publishers, newspaper publishers, and TV networks. Their responses are at first obvious, and then surprisingly shrewd.

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What CIOs Should Know/Do About HP's Acquisition Of Palm

Tim Sheedy

HP's acquisition of Palm is all over the twitterverse at the moment. And everyone has an opinion on it, and what it means (which brings to mind one of my favorite movie quotes). There are precious few facts around at present - and only time will tell exactly how the acquisition will pan out. Either way, CIOs should know the following facts about HP and the acquisition of Palm:

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Why are folks so interested in Apple's ad inventory?

Julie Ask

It has the potential to be more valuable than inventory on many phones.

Why?

People who own smartphone devices are more active on their cell phones than your typical cell phone owner. For simpler tasks like SMS, they are moderately more active. For more complex tasks such as shopping, using maps, banking or doing product research they are significantly more active. iPhone users are some of the most active smartphone users when it comes to commerce-related activities.

Advertisers have held back on spending more on mobile marketing for many reasons. One of the primary reasons has been their inability to demonstrate the effectiveness of the medium or calculate an ROI. It gets a lot easier to calculate the ROI when consumers are buying items or using services such has mobile banking to deposit checks. Consumers are spending real money. My colleague Sucharita Mulpuru will be working on a mobile commerce forecast later this year. Anecdotally, we saw consumers spend in the hundreds of thousands of dollars with individual merchants/hotels/restaurants in 2009. We're likely to see run rates in the low millions for a few companies within a few industries by the end of this year.

The more consumers spend, the more advertisers will be motivated to spend. Consumer product and service companies will invest in mobile services such as "find the nearest," consumer reviews, available inventory, etc. to support commerce-related activities. The greater the supply of services (of great services), the more adoption and usage we'll see among consumers. Then consumers will spend more because the experiences will be convenient - it'll be easy to buy books or toothpaste.

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Stop the Madness! Payment Apps are on the iPad too soon.

John Kindervag

Even though the iPad is barely birthed, there is already a push to provide payment applications for the device. It's time to pull the emergency brake on this trend. Are these applications PA-DSS certified? Do they have swipe devices with crypto hardware built-in? Has the Pin Entry Device been rigorously tested and meet all the PIN Transaction Security Guidelines? There are so many things consumers should know about the security of these new methods of payments *before* they allow their credit card to be captured by an iPad or iPhone. Is the card's Personal Account Number (PAN) encrypted at the moment it is swiped by the device? Does the device establish an encrypted tunnel to transport the transaction to the payment gateway? Doe the iPad store the PAN? Is that storage encrypted or unencrypted? Does the processor support a tokenization scheme to keep the iPad out of PCI scope? Is the payment app the only thing running on the iPad?

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The Ultimate Grocery Shopping App?

Nigel Fenwick

Apple iPadGeorge Colony nailed it when he wrote “the iPad signals the future of software”. So where do smart-device app’s go from here? Basically, any application that focuses on saving people time is likely to be a winner but the biggest game changer will come when consumers start to benefit from customized services that save time and money while increasing brand loyalty. For example, here’s a glimpse into how we might see applications for our phones and tablets evolve to make food shopping and preparing meals at home easier…

Let’s imagine the future of a typical suburban home. In our future world we’ll follow Mr. and Mrs. Smith, working parents with little time to spare.

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Amazon’s Post-iPad Fight Strategy

James McQuivey

Round 1 goes to Apple. The iPad, as expected, has caused a big stir and gave people like Walt Mossberg reason to gush with enthusiasm about the death of laptops.

Throughout, as various members of the press have mused about the death of Amazon's Kindle, I feel compelled to point out that, contrary to popular belief, Amazon is in a better position now than it was before the iPad. That's right, if Amazon comes out swinging, Round 2 will go to Amazon. Here’s why: 

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