More Than Meets The

In a few days time, though we don’t know what to make of it, but everyone keeps talking about, Apple iPad will officially go on sale. When first announced, pundits, consumers, analysts, etc. didn’t know what to make of the device. Late night comedians pulled out their iPhones and talked about their new iPad mini’s. While technology writers looked at the iPad and struggled where to place it. Is it an e-reader? Is it a netbook style machine for surfing and email? Do you use it for videos? It won’t have phone functionality and it doesn’t make sense as a music player. Two months ago, its sales prognosis looked rather tepid, given the lackluster to non-existent demand for tablet style computers. Now, certain analysts predict not quite iPhone level sales, but much closer than you might expect for an in between device without as obvious a purpose as the iPod or iPhone.

Not knowing actual sales or even how people plan on using it hasn’t stopped a consensus from forming, namely that the iPad will be important. A large part of the expectation comes simply from the fact that Apple will release a new consumer electronic device, and by Apple, they mean Steve Jobs. His announcements have always drawn a crowd, but the company today, in some respects, resembles the Apple of old, but in so many other ways, it has become something entirely different. Many in our space use Apple products for everything, but they most likely don’t remember ten years earlier when it was simply a computer company struggling for market share. It always had a die hard fan base, and professionally, those in more artistic roles preferred working on a Mac, but businesses? They didn’t run on Macs, and regular consumers? they didn’t buy Apple products. It was a company that seemed stubborn and bent on creating products (namely computers) that only ran on its proprietary operating system without the interoperability and software suite that others did. Oh, and it cost more.

We all know of Apple’s billionaire founder and Machiavellian leader Steve Jobs. It’s easy to think that he made his billions from Apple, but it was his work while away from Apple that made him his first billion. In what has been described as his best investment, he purchased the assets and people that became Pixar for $5 million after being forced out of Apple in 1984. If we say that his first major disruption was the personal computer, then we could say his second was animation. Movies have not been the same after Toy Story. After taking the company public and going back to Apple in 1996 on a then interim basis, he didn’t exactly reinvent the computer at the time, but he showed his leadership for having a team create distinctive and user-friendly consumer devices. The iPod absolutely put Steve Jobs on the map in a major way, and his ability to create not just an MP3 player but later the digital store which has become practically the only place to buy digital music has altered music and cemented Apple’s role as the technology leader.

Even in the face of constant criticism, the company found a way to come up with commercially appealing models and turn the iPod into their single biggest product line. For the fourth quarter of 2009, Apple sold $3.39 billion worth of iPods. It would still be their biggest product line had it not been for the second major industry disruption of this decade alone, the iPhone. Hard to believe it came out more than two and a half years ago on June 29, 2007. Even though sold in the US through just one carrier, domestically and worldwide iPhone sales topped $5.5 billion fourth quarter of 2009. Arguably, though, it wasn’t the sleek user-interface or the touch screen that has changed the mobile world the most. It is their acting as the middle man between the user and content for the device made by Apple, i.e. the App Store, which has forever altered our notion of not just mobile, but presumably all of computing, planting the seeds of a URL less world. All of which brings us to the iPad and something we never saw coming. The emergence of Apple as a media and advertising company, anchored not just by their devices but also the acquisition of the mobile ad network / ad serving company Quattro Wireless acquired earlier this year plus the much anticipated "iAd." They have the hardware, software, and now access.

The transformation of Apple from simple purveyor of gadgets to owner of eyeballs and the starting point for wired activity has led to the current showdown between Apple and its one time bedfellow Google. The folks at Google clearly understood the threat posted by Apple before the rest of us did, even though Google has benefited from the iPhone. The company has rushed to own the user outside the computer the way they do with the computer, moving into territories seemingly foreign to their DNA, mobile operating systems and branded hardware. Despite their achievements, it’s hard to currently see Google except as the Microsoft of mobile – a company with vast resources but a fundamental lack of creating products users will fall in love with. Better Google apps synch isn’t going to compel enough users, even those who use Gmail as their primary account to switch to their phone.

Apple the media company will presumably alter not just ebook reading but those in the print world look to it to breathe new life into all aspects of print, especially newspapers and magazines. Advertisers have already lined up and committed fairly hefty dollars to secure spots in the iPad versions of many newspapers. Where it goes from there is anyone’s guess, and like the iPod and iPhone certainly depends on the number of users. As for the product itself, the Wall Street Journal’s Walter Mossberg writes, the "iPad lacks some of the features—such as a physical keyboard, a Webcam, USB ports and multitasking—that most laptop or netbook users have come to expect." And, "If people see the iPad mainly as an extra device to carry around, it will likely have limited appeal. If, however, they see it as a way to replace heavier, bulkier computers much of the time—for Web surfing, email, social-networking, video- and photo-viewing, gaming, music and even some light content creation—it could be a game changer.."

The performance marketing world will not have to worry about the iPad just yet, but we will need to keep a very close eye on it. Apple has surpassed Google in market cap, and for the time being, it only looks like Google will remain in their rearview mirror. The challenge for us will be access, that is how we will be able to reach our users as they spend more time on Apple devices, using their fingers instead of a mouse. In some ways, the iPad makes a great lead forward for brand dollars, but it will remain a question mark for the performance marketing space. Not one that needs to be answered or addressed now, but we are witnessing something few would have guessed even a year ago, and not something obvious from the announcement of the iPad – Apple forever changing the advertising world. And hard as it would have been to predict, we will be following not just Google and Facebook but Apple for understanding the ad landscape.