Technology Futures

Steven Levy has a Wired article that illustrates some of the problems that Google, and by extension, all cellphone users face. The new Google Nexus One can be purchased unlocked and without a cellular contract. You can then (in theory) go to any provider and get a service contract. Except, as Levy points out, even if you paid $500 for your dandy new Nexus One phone, you are not likely to a) find a provider willing to sell you service, and b), if you do find a provider (T-Mobile is the only one so far), you won't get a discount on the service contract.

The only glimmer of hope is that with all the new iPhone imitations coming to market, the increased competition for smartphone customers, who tend to spend more because they buy both voice and data service, has lowered prices a bit. But the lower prices is so far limited to the unlimited contracts, which were already very expensive. The cost of these contracts is coming down by $20 to $30, but are probably still very profitable. When there is real competition, prices can and often do come down. But the cellular business looks a lot like a cartel, with cartel-like pricing.

This is an illustration of why open access networks, with community ownership, are so important. Only by making investments in owning some of the infrastructure do users (local governments, schools, businesses, residents) get some control over the market space. When telecom infrastructure is owned entirely by one company (e.g. phone/DSL, cable TV/cable Internet), the company that owns the infrastructure gets to set the pricing--and rightly so. I don't subscribe to the notion that incumbents are bad. They are making intelligent pricing decisions based on their asset and business models. Communities that want better and more affordable telecom services have to introduce different asset ownership models and different business models. It's not hard or complicated, and many communities are already doing this with excellent results. Call Design Nine (540-951-4400) if you want more information on how to get started.

Hong Kong Broadband Network Ltd. is offering 100 megabit symmetric connections to its customers for $13/month. Costs are going to be lower for them because most of the customer base is living in high rise apartment buildings, which are less expensive to cable. I don't know about Hong Kong, but in Japan, the building codes require telecom duct to every apartment from the ground floor, meaning it takes under an hour to run fiber to a new customer in a Tokyo apartment. Meanwhile, in the United States, many of us are still getting our broadband via copper cable technology invented in the late 1800s.

This article from MacWorld does a nice job of highlighting the emerging class of the titans. Apple and Google are ramping up for an epic fight, and we all win when two big companies compete for marketshare. Google has announced the Nexus One smartphone, just the latest of several Android-based smartphones. Android is the open source operating system developed by Google which powers not only the Google phone, but the Droid phone from Motorola (distributed by Verizon). And alongside Android, Google has also announced the Chrome operating system, which wont' see the light of day for another year. Meanwhile, Apple has purchased an online advertising firm. So Google is aiming at Apple, and Apple is aiming at Google. The next couple of years will be interesting, and both companies will be forced to work harder and be more customer-focused--especially Google, which has little experience actually selling anything except ads.

Here is a roundup of rumors about the new Apple tablet. Apple has announced a media event late this month, but is not saying what the announcement is about. Until very recently, most pundits were guessing Apple's table computer would not be announced until June of this year, but I think the increasing interest in the Google Android phone may have caused Apple to move up their announcement to suck all the oxygen out of the room and take the media focus off Android.

If that is Apple's strategy, it is likely to work. The iTablet or iSlate (nobody really knows what the final name will be) will relegate the Amazon Kindle and other bookreaders to strictly second tier status, much like the iPod put all other MP3 music players into a permanent also-ran status, and completely transformed the music industry.

There is still much debate about whether the new device will have an iPhone style interface or a Mac style interface, with the conventional wisdom betting on the iPhone. But what a lot of people forget is that it probably does not matter very much, because the iPhone is a Macintosh underneath. Every single iPhone has the full power of a desktop or laptop Macintosh. So the iSlate may look more like an iPhone, but as it evolves, Apple can easily and quickly add more functionality just by peeling away the cover on the hidden power.

Why is this device going to be revolutionary? It won't be just the technology--Microsoft has a tablet operating system for years. What Apple is likely to unveil along with the iTablet is a new section of the iTunes Store, stocked with magazines and newspapers. iSlate owners will be able to subscribe to a wide variety of publishing content and get the content wirelessly on their iSlate. This will save the rapidly collapsing magazine and newspaper businesses, which have been unable to find or build their way out of the two century old paper-based distribution model. With the cost of distribution of a newspaper or magazine slashed to nearly zero, papers and magazines will be able to focus on high quality writing and reporting, which is always in short supply.

As with other breakthrough Apple technologies, new kinds of opportunities will emerge quickly, creating new businesses and jobs where none existed before. One big sea change will be in higher ed, where colleges and universities that are smart will simply issue every student an iSlate on the first day of freshman year. Faculty will be able to provide their students with very high quality (book quality) class notes, multimedia presentations, and even administer tests via the iTablet. Can't they do all that now? Sure, but not with the kind of high quality interface and superb usability that the iSlate will bring. And textbook prices should come down, although some textbook publishers will resist.

The iTablet will allow new college textbook writers to enter the marketplace quickly and easily, just the way the iPhone App Store has created thousands of new software publishing businesses. Writing a textbook will no longer require years of negotiation with publishing houses still operating on a business model developed during the era of Charles Dickens. Instead, textbook writers will be able to market directly to faculty at colleges and universities, with the textbook distributed at very low cost via the iSlate Textbook Store.

The big, sheet of paper size screen of the iTablet will allow colleges and universities to create "virtual registrar" interfaces that will give students the ability to fill out and submit forms quickly and easily from anywhere, with much better interfaces and ease of use than Web forms (because of the direct input pen interface).

The iSlate will also boost TV show and movie sales, with the existing iTunes TV/movies section all ready to send video content directly to a large, comfortable, easy to watch screen.

Apple has been planning this for years. Note that Apple has had wireless keyboards and mice for some time, and continues to roll out improved wireless devices like the popular Magic Mouse. Prop the iTablet up on a desk, start typing away on your wireless keyboard, and you have most of the functionality of a laptop.

If the first decade of the 21st century was dominated by Apple and the iPod, the second decade will be dominated again by Apple with the iSlate. Stand by and watch the fun begin as the publishing world is turned upside down.