The iPad: New Day Or False Dawn?

What The iPad Means For Brands

2/6/2010

The iPad: New Day Or False Dawn?

2/6/2010

The iPad: New Day Or False Dawn?

Table of Contents

Year of the iPad ................................................................................................................................. 2

A Mass Market Device? ...................................................................................................................... 3

Open Platform or Walled Garden? ...................................................................................................... 3

Future of Publishing?......................................................................................................................... 4

Advertising Nirvana? ......................................................................................................................... 6

Don’t Believe The Hype? .................................................................................................................... 7

Year of the iPad

People seem to be liking the iPad…We’ve sold one every three seconds since we

launched it.

Steve Jobs, June 2010

In terms of technology, 2010 has undoubtedly been the year of the iPad.

Announced in January, after several years of rumours, released in the US in April

and nine more markets in May, by the end of July it should be available in around

20 countries. It has been hailed by many as being the future of everything from

computing to publishing, whilst, as with the iPhone, publishers & advertisers alike

have pounced on the new device, launching apps for their products and services.

But will the iPad live up to its hype, and should brands & publishers be falling over

themselves in the way that they are?

As with most things, the answer is a mixture of yes & no.

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The iPad: New Day Or False Dawn?

A Mass Market Device?

Customers around the world are experiencing the magic of iPad, and seem to be

loving it as much as we do.

Steve Jobs, May 2010

Sales of the iPad have certainly been exceptional, with the international release

being pushed back due to higher than expected demand in the US. As of June 1st

Apple stated that it had sold 2 million iPads, which is pretty good going for a

product that’s only been on sale for 60 days: to put it in context, it sold its first

million iPads in just 28 days, half the time it took to shift the same number of

iPhones.

However, when we consider that in 2009 there were around 200 million PCs and

240 million web enabled mobile devices shipped globally, it shows that the iPad is

still a niche item, which is something that isn’t always obvious when one counts

the column inches it’s generating. However, with that niche being made-up of

cash-rich early adopters, the opportunities for brands to benefit from a

relationship with the iPad are obvious.

Whether Apple will be able to do with the iPad what it did with the iPod, and

appears to be doing with the iPhone – that is, to turn a niche device into something

that becomes truly mass-market – remains to be seen, particularly considering its

price (especially outside of the US).

Open Platform or Walled Garden?

We believe that Apple…has taken a step that could undermine this next chapter of

the web…in which mobile devices outnumber computers, any individual can be a

publisher, and content is accessed anywhere and at any time.

Chuck Geschke & John Warnock (Adobe Co-founders), May 2010

However even if the iPad doesn’t become mainstream, it seems likely that tablet

devices in general will become much more common: Asus has just announced two

tablet devices, which are likely to be more affordable than Apple’s, whilst One

Laptop Per Child has stated that it plans to develop a $100 tablet for distribution in

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The iPad: New Day Or False Dawn?

both developed and developing markets. Interestingly, the Asus & OLPC devices

will run on Windows & Android respectively, both more open platforms than

Apple’s. And openness might yet become a defining factor in the tablet wars.

Though Apple continues its battle with Adobe, refusing to support Flash on the

iPhone or iPad, other platforms have no such qualms: both Nokia and Opera have

said that they will continue to support Flash. Meanwhile, on the content producer

side, a number of major Hollywood companies, including Time Warner & NBC,

announced in May that they wouldn’t be converting their video libraries from Flash

in order to run on Apple’s devices.

Whilst iPads are undoubtedly sexy, there has to be a question over whether a

device can truly go mainstream if it doesn’t have the content to back it up.

Future of Publishing?

I got a glimpse of the future last weekend with the Apple iPad. It is a wonderful

thing…it may well be the saving of the newspaper industry.

Rupert Murdoch, April 2010

Much of the hype surrounding the iPad’s release has come from, and been about

its impact on, the world of publishing. Book, newspaper & magazine magnates

have all been breathless in their praise of the device and its potential to save their

businesses from the shocks of the dotcom era, whilst much of Apple’s advertising

has shown the device being used to read digital newspapers.

In the US, a conglomerate of publishers has come together under the name Next

Issue Media, with the aim of mapping out a future for newspapers & magazines in

the digital world. They demonstrate the ability of the iPad to render the reading

experience in exciting new ways, with embedded video, images & audio. They’re

working on ways to harmonise ecommerce, ad formats and output protocols for

publishers, all with the aim of turning the iPad (and iPhones, etc…) into the future

of publishing.

But how realistic is this? Not very, argue a number of respected commentators.

Paul Carr suggests that whilst the iPad might kill Amazon’s Kindle e-reader, it is

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The iPad: New Day Or False Dawn?

unlikely to lead to a surge in the purchase of digital books as its display is simply

not designed to support the consumption of long-form content. Basically, it makes

your eyes hurt.

And at that point the iPad will indeed have killed the Kindle. But, for millions of

casual readers, it will also have killed something far more valuable: the experience

of reading for pleasure.

Paul Carr, April 2010

And what about newspapers and magazines?

Well, the app for Wired magazine was purchased 24,000 times in its first 24 hours.

However, Wired’s audience is a very tech-literate one, and so it shouldn’t come as

much of a surprise that many of them are the early adopters who have bought

iPads.

But as Peter Preston of The Observer points out, the revenue from such apps is

unlikely to staunch the losses newspapers are racking up. Quoting analysis by

Enders Analysis he suggests that whilst revenue for publishers in the UK might

reach around £250m (minus Apple’s 30% cut), British newspapers generated over

£3bn in 2008.

So, just as The Guardian’s iPhone app, which sold 70,000 in its first month

generating an estimated £117,000, is hardly likely to plug its rumoured £100,000

a day losses, any media exec pinning his future on the iPad might want to hedge

his bets. Especially as a number of commentators have suggested that the apps

released to date actually provide a less enjoyable browsing experience than

viewing the content in a simple browser for which the consumer pays, in most

cases, nothing.

The future is never now. And the future of journalism is definitely not a stack of

banners spiced with videos, exported from a paper layout program. You need to

try harder.

Oliver Reichenstein, May 2010

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The iPad: New Day Or False Dawn?

However it’s quite likely that Apple’s foray into the tablet market, and the upsurge

in new product announcements from competitors, could yet create what is, to all

intents and purposes, an entirely new sector. And whilst this might not prove to be

the savior of publishing, it certainly paints a (digital) picture of what the future

might look like for these companies.

The real challenge is not how to monetise the iPad (which Apple’s iAd should go

some way to doing) but how to cut the costs of the print-side of the businesses

and still maintain the same structures – and that’s something even Steve Jobs is

unlikely to be able to solve.

Advertising Nirvana?

Well, we’ve got a lot of free apps — we like that, users like that…What some

(developers) are starting to do is put mobile ads in their apps… and most of this

advertising sucks.

Steve Jobs, April 2010

So what does all of this mean for advertisers?

Well, as already discussed, at present the iPad is very much a niche device, but one

which punches above its weight in terms of the desirability of that audience and

the publicity it generates. And the audience it attracts certainly seems keen to test

everything that the iPad has to offer, with over 1 million apps being downloaded on

its first day of release.

As a portable device, but one with a browsing experience far beyond that of even

the best mobile phones, the iPad opens up new ways for brands to connect with

consumers. Targeting content and experiences based on location and

demographics, but with rich media experiences, means that brands could create

deeper and more durable interactions with consumers.

However, the app rush also exposes two potential issues for brands.

Firstly, the fact that the iPad is definitely much more than simply an oversized

iPhone means that you can’t simply port your old iPhone app across, at least not if

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The iPad: New Day Or False Dawn?

you want it to provide a high-end experience. And, just as the iPhone’s app library

is now full to bursting, so a similar rush to develop iPad apps could mean that it

becomes very hard to stand out from the crowd.

With more things than ever clamouring for consumers’ attention, any brand app or

experience will have to be exceptional to really break through.

Don’t Believe The Hype?

What then is the final reckoning for the iPad?

Whilst it has generated enormous publicity it is still a niche product, and likely to

remain so in the near to mid-term future. But by, once again, creating a new

sector, Apple is likely to spark a wave of competition that should drive costs down

and specs up.

Outtake: Brands shouldn’t simply throw money at tablet apps, but should definitely

be thinking about how their audiences are using them, if at all, and how they could

fit into that usage.

The continuing battle between closed environments and open platforms will

continue, with no winner obvious at the moment. Whilst it would be stupid to

ignore Apple’s latest uber-gadget, it would be a very brave exec that bet

everything on one or the other.

Outtake: In the mobile wars, all the major operating systems have announced a

common app language. Bar Apple. Investing in iPad apps is certainly not a bad

idea, but be prepared to have to recreate it for other systems as they come along,

Tablets start to show us what the future of content consumption might look like.

At present however too many magazine/newspaper/book apps simply recreate the

printed page in a digital format, whilst the revenues likely to be generated won’t

plug the massive defecits saddling so many publishing companies.

Outtake: Forward thinking brands will be working with publishers to re-imagine

the world of publishing. Just as Time Warner & Toyota’s Mine showed how printed

magazines might evolve, so there are opportunities to do the same on tablets.

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The iPad: New Day Or False Dawn?

Advertisers will want to test the capabilities of the iPad, and use it to create more

immersive experiences for consumers. But the challenge will be to stand out and,

as always, it will come down to creative, rather than technical details.

Outtake: Just because you can do something on the iPad, doesn’t mean you

should. Ask yourself why anyone should care about what you plan to do, and keep

asking until you have an answer. To paraphrase Bill Clinton, It’s the creative,

stupid.

And what about us, will we all be rushing out to buy an iPad? Well, I’m no Apple

fanboy, but as the owner of a Macbook, iPod and iPhone I’m clearly not immune to

their wiles either.

But for all of that, I’m going to follow the advice of British satirist Charlie Brooker,

and wait till it’s cheaper and lighter, and in the meantime I’ll continue to stare

enviously at my friends who have bought what Brooker describes as the world’s

most expensive rectangle.

Author: Ciarán Norris, Head of Social Marketing