Apple, iPhone/iPod/Apple TV Thesis backgrounder

this needs to be edited really, and...I'm just not in any space of caring about that right now, but there's some good thinking here if you can sift through it.
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I’ve had a few experiences where I felt WOW about technology in a big way and they were:

1. My first experiences with getting a 300 Baud modem to work. That was a WOW experience.
2. The first time I saw QLink, then AOL, then AOL for Windows
3. The first time I saw the WWW that was another WOW. -this made total sense to me. I e-mailed everyone I knew. I e-mailed Steve Case a lot but I didn’t have his "real" address then (this was probably from May ’93 thru Sept ’93. I launched my newsletter 2 months before Netscape’s 1st beta in September '94, but I had been using Mosaic a while – on slow ass 14.4 and 28.8! it was still cool to see the future.
4. When I saw the iPhone at MacWorld in January
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A long time ago I figure out that someday my media library would be truly liberated, and have even been playing with usable tech for 3+ years, but I never saw any application I thought would anywhere near it towards mass adoption not even the current top of the line stand alone iPod..though I LOVE the device. (much more in the 'read more').

I’m going to tie it back to what will perhaps be a new concept for you, and one that involves television in a way. I understand the wow of this as a handheld internet application, but it’s not the only wow in there for me, and not the biggest one. I expected that piece years ago. The windows mobile people just never delivered (I’ve tried a few handhelds running that OS).

Right now, today the whole space is more 300 Baud modem than Netscape in some ways, but in other ways if you’re a little geeky there’s absolutely a lot of stuff you can do . I do not know whether out of the gate the iPhone will allow me to stream in my streaming set-up – I will know by Saturday.

But Walt Mossberg assures me that if my 3GP streaming (which Apple is supporting for youtube) doesn’t work , the Flash upgrade to the iphone will be fairly soon and that will definitely work with the set-up I have for streaming. I will be able to watch my TV via ORB on the iPhone via Wifi.

But I don’t need to wait. I decided to buy now anyway, because like the 300 baud modem, I want to be hands on with all this stuff at the beginning. and I have been messing around with the back end of it for about 3 years now, this is the first front end that I thought: WOW!.

My setup works fine on any laptop with an internet connection already and has for 2 years, but handhelds…no good handheld. Let alone one that is a cellphone, a camera, an ipod, that fits in my pocket comfortably with a freaking microphone built into the earbuds. I miss calls all the time even with my phone on vibrate because I use the ipod a lot.

Ok, here’s the thesis: people will spend more time watching video media. (Nielsen has data stating that average TV watching time is still going up, I will share this data at a later time).

On the subway, in the 12 minute starbucks line in manhattan., at the airport when you have a 2 hour delay. You will someday have full access, in the airport lounge, with a device like your iphone to:

1. -everything on your cable/satellite box (live television) at home
2. whatever’s on your on-demand for those products (the Comcast on-demand offering here is extremely robust, especially if you have pay channels.)
3. whatever’s on your dvr
4. whatever movies/media (all this is music/audio and pictures too, of course) you have in digital format which will eventually be everything you buy. The DVD revenue stream is not long for the world as a cash cow (5-10 years max), and in 20 years, only iconoclasts and purists will buy CD’s and DVD’s (that will be a market, just like there is still a market for vinyl and laser disks, but how interesting are those markets to you?).
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Apple was the Apple of its space, then AOL was the Apple of its space, and now, somehow someway, I think Apple is going to be the Apple of…both spaces, and new spaces too and my heart is in the new spaces.

How I view Apple in the space of fully portable media is the way I viewed AOL in the internet/online space between 1986-2000. “These people get that making the stuff easy to do and visually appealing is really important! Easy to use trumps whatever freaking gazillion databases CompuServe and Prodigy will charge you $2/minute to access”.

Steve Jobs totally gets it. Totally gets it. He gets it more than me (how often do you think I admit anything like that?!) But I think the strategy for the phone is brilliant and will build large demand for a cheaper, stand alone ipod that has all the features of the iPhone except the actual phone. it will be a portable wif internet device with a bigger touch screen. When I can’t say, they can’t be too quick with this because I think they really do want to hit 10 million phones by the end of 2008.

I can’t take you exactly through the timing curve of “very early adopter” (me) to mass adoption. But I believe there will be mass adoption. Whether that’s 10, 15 or more years, I don’t know, but I think this curve is going to be steeper/quicker than the curve with my modem in 1982 to the world starting to care ~1995 (Netscape 1.0 release).

It’s going to change how all the deals are cut too. Ultimately, the NHL will want to just stream all the games itself. And iTunes, which doesn’t do streaming right now..well they plan it with their AppleTV (it is already a media extender that streams from your PC to your TV), but I believe ultimately a vital part of the apple strategy will be to become something of a “Cable/Satellite” alternative, and they will need Live TV to do this (sports is always going to be popular live).

There are technological challenges to overcome, just as there were with the 300 baud modem and the first browsers, but these challenges will be solved and I’ll be able to buy from AppleTV, for $199 or whatever it is, the NHL hockey package, and I’ll be able to:

- Stream it to your big screen in high definition
- Stream it to any video appliance you have (computer, other tvs, handheld devices, laptops, etc) wherever I am.

I already know hockey doesn’t think like the MLB. MLB will HATE this for a while, but it’s just being slow to realize control is important and that it might get more subscribers if people felt like they could maximize paying $200 for it to begin with. I always hated when I was a directTV NFL Sunday ticket subscriber and was out of town on a Sunday. I felt like I was paying for something I couldn’t use, and wished I could use.

Whether compared to the internet curve this is 1985 or 1995…I lean towards 1985 in terms of complexity, but with really good results for some of the work (I can stream high quality video all over my house, and typically reasonable quality video anywhere I can get a wifi connection) but that set-up is WAY, WAY too hard for the average joe.

I predict Steve Jobs will make it easy, maybe even fun. He’ll get some of the “non live” stuff sorted out with the next AppleTV . I’m sure it will probably have DVR functionality and I’m sure it will make getting something from the DVR to the iPod much easier than what I have today.

On the iPhone there are space considerations because its only 8GB right now, but they can get it down where you could have 3 hours of programming from the night before in around a 1GB of space and maintain very high quality video (for a 3.5” display)

these are still very early days, with no focus and nobody really going after the portable media market with ease of use/design in mind. Nobody, except Apple. Different space, different time, but I think the comparison to AOL holds up. I was facetious with Steve Jobs 4 keys to total world domination headline, but I wasn’t kidding around at all about the thinking.

There are lots of implications here, I have only begun to consider:

- Still MORE attrition for primetime ratings/share (though since they count back in DVR viewership w/in 7 days into the weekly #’s they will ultimately be forced to track how many people watched Gray’s Anatomy on their iphones into the ratings.
- Many, many new distribution opportunities
New opportunities for advertising…

My head is spinning, but it’s fun.