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2012, The Next iPhone, And LTE

The iPhone 4S, released in October, was supposed to feature LTE connectivity, at least according to some of the rumors that were floating around at the time. The device turned out to feature faster 3G downloads at 14.4 Mbps through HSPDA, which is an enhanced version of the 3G protocol that has been around for a while, but still isn’t as widely adopted as you would expect from a technology that Apple decided to use in a major iPhone upgrade. In Italy, for instance, few areas have access to HSDPA, not to mention HSPA+.

(Note: although commonly referred to as “4G” the current revision of LTE doesn’t meet the requirements for 4G connectivity yet. The LTE Advanced standard does conform to 4G requirements, but it’s likely that you’ll see the term “LTE” associated with 4G simply because it’s a major leap forward in terms of wireless connectivity)

Now, the debate as to whether Apple should have made the 4S an LTE iPhone or should have an LTE iPhone 5 this year is making the rounds again. Unlike previous debates, fortunately this time we have someone who’s trying to make some sense out of this and cut through the haze of rumors and theories to point out that, actually, it wouldn’t make much sense business-wise for Apple to implement LTE in the near term. Why? Because of all those 37 million iPhones Apple has sold in the quarter that ended on December 31, very few of them were sold in areas where LTE is available. Read: the United States, some parts of Denmark and Sweden, some cities in Canada, and Saudi Arabia. The “4G” rollout in countries other than the US is a slow process, and the ones mentioned above have a very small percentage of their spectrum covered by active LTE networks – they’re basically in the middle of initial testing right now. And even in the US, Chris Foreman assumes that whilst the major carriers have all implemented LTE or will start relatively soon, only half of subscribers would be covered in 2012, thus reducing the potential addressable market to 15% of iPhone customers worldwide. Why would Apple make an LTE iPhone for 15% of its entire customer base?

According to fourth quarter 2011 results, AT&T activated 4.1 million iPhones, while Verizon activated 4.2 million. Sprint would not disclose the number of iPhones it activated last quarter, but we feel safe in assuming that number is less than 4 million. Assuming Sprint was able to activate (perhaps a generous) 2 million or so iPhones, only a little over a quarter of iPhones were sold in the US. The other three-quarters, then, are sold in areas with practically no LTE coverage.

It goes deeper. You might argue that, yes, Apple could make an exception because they have made some in the past. But the WiFi-less 3GS and camera-less iPhone 4S were necessary modifications to get these devices on sale, otherwise they wouldn’t have gotten regulatory approval. It’s not like Apple is forced to implement LTE, especially considering the enhanced 3G still isn’t as widely adopted as the company hopes.

The LTE iPhone is primarily the result of months of speculation and countless rumors based on nothing. No evidence. Perhaps a few code strings here and there, but then again – go trust those code references these days. For all we know, the LTE iPhone doesn’t exist.

Or does it? A popular counterargument I often get is that Apple experiments with all kinds of new technologies in their labs; they take a look at new specifications and standards, and consider whether they should be worth investing more research and development resources for possible future implementations. I get it, and it’s entirely plausible that Apple engineers have at least looked at current LTE chips utilized by several Android handsets. But I don’t know how far they may have gotten into actually testing these chips, if only for verification purposes, at the light of Cook’s multiple remarks in the past about concerns regarding the effects these chips have on battery life. Those bigger screens Android makers tout in their commercials might be a requirement, rather than a feature. But I digress.

Another popular theory is that new LTE chips by Qualcomm, a component supplier Apple is already using, should become available in the first half of this year and, based on published specifications, allow device makers to considerably cut down on battery usage and required space. These new chips are smaller, consume less power and are made by a company Apple already buys components from. The next iPhone will have LTE! Not so fast. Read more

The Apple Community

I read this great piece by Stephen Hackett today, and while I was reading it I figured I’m often asked why I (and to an extent our team) do what I do every day. So here’s a brief explanation.

It’s about technology and getting to make a living out of writing for this community, the Apple community. Communities are made of people; in this case, the Apple community is made of developers, readers, fans of Apple devices, journalists, designers, PR guys – everyone who has at least some interest in following technology and the stuff Apple comes up with.

I don’t work for myself. I mean, sure, technically I do work for myself, but that’s not what gets me out of bed in the morning. I work for my readers. I work for the developers who come up with amazing solutions and ideas every day. I work for my team. Ultimately, I don’t work because I have to, but because it feels good to write about and for the Apple community.

“I do what I do” because I can provide for myself and my family thanks to what I love writing about – technology and software.

Because with the iPhone I have a world of information and data in my pocket; data that travels from a server who-knows-where in North Carolina, through a series of cables and pipes from the U.S to Italy, from another server to a cell tower, from a cell tower wirelessly to my device, and it turns into pixels I can see on a screen that, however, shows no pixels. When I stop to think about it, I still look at my iPhone with the amusement of a three year old kid seeing the night sky for the first time.

“I do what I do” because software is helping me make my life a little better. I can take photos and show them to my friends and archive them online. When I’m at the hospital, I can send text messages to my friends for free, in real-time, and feel good about knowing that someone on the other part of the screen is reading my words. With Rdio, I can listen to any song I want whenever I want, from any device I own, and tell my girlfriend she should check out the latest hit from Noel Gallagher. With Dropbox, I can write my articles on one device, pick them up again on another one, take a break and finish them up on a mobile phone that magically got the latest versions of those files over the air. Software is disrupting every industry it touches. I get to write about it, and even choose which app to use.

I write for the Apple community because in the past three years I got to know some amazingly talented and honest and caring people that, however, I’ve never met in “real life”. But isn’t this real life? What about having a team of four people around the world that greet you with “good morning buddy” every morning isn’t real? How could you exclude from real-life the works of developers who pour their souls into making a little piece of software – often just to make something work better for their customers – and are kind enough to tell you about it, in advance, with honest words and ready for any feedback you might have? Just because we haven’t shaken hands yet it doesn’t mean this, all this, isn’t real. Actual businesses are built every day on top of our community, ideas flourish and turn into projects with deadlines, projects that I will likely write about and share with other people that have decided to listen to what I have to say. The things we write, the feedback we give, the links we share – they do matter. Right now I’m writing this post on my iPad, in my living room, with my dad trying to understand how Gmail works. In a few minutes, these digital words will travel through a network, and end up on a website on a server somewhere in the United States. What’s not real about this, exactly?

“I do what I do” because I don’t think I’m better than anyone, but my words can make life slightly better for someone else. Maybe a developer who would really like to see his dream come true and hours of coding turned into an app anyone can see and use. Maybe a reader who needs help with his computer. Maybe someone who was having a bad day, but suddenly felt inspired in reading about Steve again. I don’t think the Apple Community is better than other circles of people who share a common interest. But I do believe we are better human beings because of it, because of what we decide to do to make even the smallest dent in the universe.

It’s easy to lose motivation though. Because the Internet allows for these kinds of communications that don’t require a physical confrontation or debate face-to-face, it’s easy to lose track of a conversation, misinterpret someone else’s words, or think a reader is “hating you”. Not that “online fights” and controversies aren’t real. They are very much so. But even when I’m reading about the latest Gruber-Thurrot (or anyone, really) blogging face-off, I like to think if they ever met “in real life” they would grab a beer together, look back at their “Internet fights” and say “Oh, screw it – what do you think of the latest iPhone?” with the enthusiasm of two people who are genuinely excited and passionate about technology.

Because, ultimately, it’s about the people. Even when we write about Google or Apple or Twitter and we imagine these big, faceless corporations in glass buildings “somewhere in California”, we’re actually writing about big corporations in glass buildings “somewhere in California”. But made of people. Of ideas. Of passion and genius and willingness to run a business successfully, to spread innovation and collaboration, to provide services that weren’t possible before. To show up every day because “it’s worth it”. Are tech companies greedy? Sure they are. But you have to believe there’s still a genuine, intact spark of passion in their core values. Otherwise they wouldn’t be here. Greediness alone doesn’t get you anywhere.

Which brings me back to the Apple Community. It’s easier to see what I’m talking about with the “smaller guys”, the indie developers and the bloggers. It’s easier to get to know them, work with them, maybe grab a beer with them and show them pictures of my kids someday, too.

And that’s why I do what I do.

“Our Next Big Insight”

From my iCloud overview in October, titled iCloud: The Future of Apple’s Ecosystem:

The problem Apple had to face in the past four years is that for millions of people iPhones and iPads have become substitutes to the PC. Over a third of iTunes Store content is now purchased on iOS devices, Apple’s Eddy Cue said at the Let’s talk iPhone media event last week. What started and was celebrated as the hub of the digital revolution became a burden for Apple as millions of customers began using iOS devices as their main devices. Apple was once again faced with a challenge: if people no longer want to use the hub and accept the trade-offs required to manage our digital lifestyle, where’s the new hub? And how will content be distributed in the ecosystem if there’s no visible hub to start with?

[…]

iCloud changes the way we interact with our devices. Ten years after the digital hub revolution led by the Mac and iPod, Apple’s ecosystem has evolved and turned into a variegate selection of notebooks, desktop computers, iPhones, iPods and iPads. iCloud goes beyond the simple function of a new digital hub: iCloud, built into iOS 5 and Lion, is the new soul of Apple’s hardware that unifies music, videos, photos, apps, books and documents. iCloud is a huge change for Apple’s ecosystem not just because of its new technology — it’s a new software paradigm that will deeply affect Apple’s devices and how we work with them in the next years. Ten years from now, when it’ll likely be time for another digital revolution, we’ll look back at 2011 and iCloud’s launch.

During today’s earnings call – in case you missed it, Apple today reported its biggest quarter to date – CEO Tim Cook seemed to agree with this vision. He said that “iCloud is more than a product, it’s a strategy for the next decade.”

What strikes me as remarkable about this statement isn’t the simplicity of the message alone, it’s how well it plays with Steve Jobs’ original Digital Hub strategy in retrospect. The way I see it, today’s comments from Cook about iCloud declared the historic Digital Hub officially dead, yet sounded amusingly familiar at the same time. That Apple is a product company that also happens to do business with services isn’t new – but listening to Tim Cook and Peter Oppenheimer discussing the results, the future projections, the customer feedback and overall strategy in a single conference call is enlightening in a way it provides insight into Apple’s core values. Products matter, but what customers expect to find around a product is equally important – the ecosystem matters. Every recent move from Apple can be seen as part of the iCloud big picture: the 4S with an amazing camera that shoots photos that are backed up online; iTunes Match and its cloud-based music library; content deals for Apple TV; iBookstore and Textbooks that are backed up to your iCloud account. And when you think about it with today’s numbers in mind, it all starts to make sense not just from a conceptual standpoint, but from a business perspective as well.

Apple customers are willing to pay for a superior user experience through a solid ecosystem. And Apple is betting on that.

The “strategy for the next decade” that we’re covering today is what, I believe, the majority of users will see as the operating system in 10 years. And if you need a quick recap as to why Apple moved on from the Digital Hub, let Steve remind you.

“We’ve got a great solution for this problem. And we think this solution is our next big insight. Which is we’re going to demote the PC and the Mac to just be a device. Just like an iPhone, an iPad, or an iPod touch. And we’re going to move the Digital Hub – the center of your digital life – into the cloud.”

Apple’s Q1 2012: Quarter Recap and Estimates

At 2 PM PT, Apple is set to announce its financial results for the quarter that ended on December 24th, 2011. According to several analysts polled in the past weeks and Apple’s own guidance for the quarter, Q1 2012 is on track to become Apple’s biggest quarter to date both in terms of sales (with expected record iPhone and iPad sales) and revenue. Until today, Apple’s most profitable quarter has been Q3 2011 with $28.57 billion revenue. Below, we’ve compiled a breakdown of Q1 2012 estimates with a recap of what happened during the quarter.

Estimates and Previous Quarters

During last quarter’s earnings call, Apple said they were expecting $37 billion in revenue and diluted earnings per share of around $9.30 for this quarter. As Apple’s guidance for future quarters is historically low and conservative, the already high projection of $37 billion led bloggers to speculate Apple’s Q1 2012 would be a blowout quarter; some analysts, on the other hand, usually don’t pay attention to Apple’s guidance as the company lowballs expectations for the upcoming quarter.

Analysts and bloggers polled in the past few weeks had different takes on what Apple will report later today. Some of them, such as Robert Paul Leitao, Horace Dediu and Navin Nagrani projected revenue above $44 billion with iPhone sales of 34-35 million units and iPad sales in the range of 13 million units; as we reported three weeks ago, Asymco’s Horace Diedu estimates that Apple will report earnings of $12.3 on revenues of $44.6 billion, with the street price aiming at $9.75 EPS on $37.99 billion. As Philip Elmer-Dewitt also noted, analysts’ estimates need to be taken carefully, as several of them were released after the previous quarter’s results, and were never updated reflecting changes that took place through the quarter (such as fluctuating iPhone demand and international product launches).

Fortune’s comprehensive list of estimates for Q1 2012 is available here.

As far as iPhone sales are concerned (in Q4 2011, the device accounted for 47% of Apple’s revenue), this quarter will see Apple finally providing some actual insight into the iPhone 4S’ performance on the market. The device is well-regarded as a success on various international markets and the United States, but the only real numbers Apple posted referred to the opening weekend. Predictions for Q1 2012 go as high as 35 million units sold (those would indicate cumulative sales for iPhone 4, 4S and 3GS, not just the iPhone 4S), with an approximate figure of 30 million units sold being shared the majority of analysts and bloggers.

According to Nielsen, the launch of the iPhone 4S had an “enormous impact” on smartphone owners:

Among recent acquirers, meaning those who said they got a new device within the past three months, 44.5 percent of those surveyed in December said they chose an iPhone, compared to just 25.1 percent in October. Furthermore, 57 percent of new iPhone owners surveyed in December said they got an iPhone 4S.

This morning, Verizon Wireless reported 4.2 million iPhone activations. Reuters wrote Verizon’s “business was hit by the high costs of sales of advanced phones such as the Apple Inc iPhone.”


In Q4 2011, Apple posted revenue of $28.27 billion, with 11.12 million iPads, 17.07 million iPhones and 4.89 million Macs sold. The company posted quarterly net profit of $6.62 billion, or $7.05 per diluted share. iPhone represented a 21 percent unit growth over the year-ago quarter; iPod sales were down 27 percent from the year-ago quarter, and Apple reported the best iPad quarter to date with over 11 million units sold and a 166% increase over the year-ago quarter. In the year-go quarter, Apple posted revenue of $26.74 billion with 7.33 million iPads, 16.24 million iPhones and 4.13 million Macs sold. Read more

MacStories Reading List: January 15 - January 22

At MacStories, we strive to produce great content every day. From news to stories and app reviews, we care about quality content to deliver to you, our readers, with insight and our personal analysis every day. But we can’t cover everything. And there’s some great writing on the Internet that we often can’t link to in our daily coverage, if only because there isn’t much we can add to an already excellent article.

Today we are introducing MacStories Reading List, a weekly selection of great stories from Authors that you should read. Every Sunday, we’ll publish a collection of links that we think you should read, such as the ones below. A very simple format for the great writing that is happening in the Apple community.

Even better, you can subscribe to the Reading List in your favorite RSS reader or Instapaper. We have created an Instapaper account dedicated to the Reading List, so head over this link to get the Instapaper feed for the links we’ll post here every week. You’ll also be able to able to find us in Instapaper if you’re already following @macstoriesnet and linked the service to your Twitter account.

On behalf of the entire MacStories team, I wish you a good reading. - Federico Viticci

–

World of Apple’s Alex Brooks reflects on his past few years of blogging, and ultimately decides that quality content, not the page views alone, is what matters. A must-read.

The site I want to read and will produce will post thoughtful commentary on Apple. The kind of commentary and prose that that’s sensible, articulate and adds value to a wider discussion happening across the internet. There are already a handful of sites just like this, authors who have in some cases taken grave risk to quit their day to day lives to produce content just like this. I value those sites, I enjoy reading their content.

- Reflecting on Change, Alex Brooks (@alexbrooks)

Every month or so an analyst comes out and claims the iPad can’t be included in the same market share numbers of PCs, and vice versa. Asymco’s Horace Dediu collects actual numbers and puts things in perspective, revealing the true effect Android and iOS devices are having on the PC market.

This last view corresponds to the data in the first graph (line chart). If iOS and Android are added as potential substitutions for personal computing, the share of PCs suddenly collapses to less than 50%. It also suggests much more collapse to come.

- The rise and fall of personal computing, Horace Dediu (@asymco)

How has the App Store third-party ecosystem evolved in the past four years? Is there still much of a difference between smaller developers who actually want to charge for their apps, and bigger studios that have adopted the “freemium” or in-app advertising models? App Cubby’s David Barnard has an insightful article from an indie developer’s perspective that’s worth reading and reflecting upon.

Ultimately, the users become the product, not the app. Selling users to advertisers and pushing in-app upgrades/consumables is a completely different game than carefully crafting apps to maximize user value/entertainment. It’d be a shame if the mobile software industry devolved into some horrific hybrid of Zynga and Facebook.

- Free and Low-Cost Apps, David Barnard (@drbarnard)

Wandering Coder’s Pierre Lebeaupin makes an excellent case for iOS needing some sort of file management system at this point. You can disagree with him, but it’s undeniable the majority of users who want to use iPhones and iPads in a professional environment are still working with documents, and iOS doesn’t offer a native, integrated way for easily managing and searching them.

Let us contrast that with another situation. My father is a high school teacher; for the last 20+ years he has been working using computers, preparing teaching notes, transparent slides to project, diagrams, tests and their answers, student average note calculation documents, etc. on his Macs (and before that on an Apple ][e). He shares some of these with his colleagues (and back) and sometimes prints on school printers so it’s not like he is working in complete isolation, but he cannot rely on a supporting infrastructure and has to ensure and organize storage of these teaching material documents himself. He will often need to update these when it’s time to teach the same subject one year later, because the test needs to be changed so that it’s not the exact same as last year, because the curriculum is changing this year, because the actual class experience of using them the previous year led him to think of improvements to make the explanation clearer, because this year he’s teaching a class with a different option so they have less hours of his course (but the same curriculum…), etc. Can you imagine him using solely an iPad, or even solely an imaginary iOS 5 notebook, to do so? I can’t.

- iOS lacks a document filing system, Pierre Lebeaupin (@wanderingcoder)

An amazingly detailed and in-depth overview of the iOS gaming scene with a series of post-mortems and sales figures for “blockbuster” and smaller iOS games. If you only read one article about mobile gaming this week, make it this one.

Eighteen months ago, when I left Ubisoft to start an independent game studio and focus on making my own games, I looked online a bit to get an idea of how much income I could expect to make as an indie. At Ubisoft I used to work on big AAA console games, and I had some figures in mind, but I knew they wouldn’t be relevant for my new life: $20M budgets, teams of 200 hundred people, 3 million sales at $70 per unit… I knew being an indie developer would be completely different, but I had very little information about how different it would be.

Angry Birds had taken off, Plants vs. Zombies was already a model, Doodle Jump was a good example of success, and soon after I started my “indie” life, Cut the Rope was selling a million copies a week. But except for what I call the “jackpots,” there were very few public stories or numbers on the web, and this meant we were a bit in the dark when we started SQUIDS. I have been tracking figures since then, and I’m writing this article to share what I’ve learned with my fellow indie dev buddies who might be in the same position I was, a year and a half ago.

- Money And The App Store: A Few Figures That Might Help An Indie Developer, Emeric Thoa

Dov Frankel explains how the iPhone’s mute switch and audio controls really work.

On the last episode of The Talk Show, Gruber and Dan Benjamin discussed the design tradeoffs at length. During the discussion, they mentioned that you can set the iPad’s volume level to 0, but you can’t with the volume buttons on the iPhone. I understand the difference, and it’s something it took me a little while to figure out, way back in the early days of the first-generation iPhone.

- Different Levels, Dov Frankel (@MrDov)

Last week, Apple unveiled its iBooks Textbooks project as the result of deals with major US publishers that have agreed to release digital versions of their textbooks in a new iBooks format. Brian Lam has an interesting interview with former Apple intern Joseph Peters, who might have fueled Apple’s interest in textbooks back in 2008.

In 2008, Apple had its iContest in its Town Hall building. The iContest is sort of an American Idol for great ideas that gives interns a chance to present their best thoughts to executives. Here, Joseph Peters and some friends outlined the idea of bringing Textbooks to iTunes, before the iPad even existed to the rest of us. They won a set of Macbook Airs for their idea.

- Open-Mindedness, Brian Lam (@blam)

Much has been said and written about Apple’s decision to make iBooks Author a proprietary file format that only allows for selling eBooks into the iBookstore. Daring Fireball’s John Gruber looks at the “issue” from Apple’s perspective.

Glazman looks at these new iBooks books and sees a nonstandard proprietary format. Apple looks at these new iBooks and sees layouts and design features that no other e-book platform offers today. One man’s nonstandard is another man’s competitive differentiation.

- On the Proprietary Nature of the iBooks Author File Format, John Gruber (@gruber)

Egg Freckles’ Thomas Brand looks back at Apple’s platform history and how the company has built its success on directly controlling the user experience in every possible way, from content sources to delivering software to the end user.

The iPhone may have been destined to become the world’s most popular smartphone due to the amazing multitouch technology it introduced, but Apple’s control over the iOS operating system, Xcode developer environment, and App Store distribution model have made the iPhone the central member of a new application ecosystem that can’t be beat.

Yesterday’s introduction of iBooks 2 and iBooks Author were significant announcements because they complete the platform pyramid Apple needs to enter the Textbook Market with the same control as its previous successes.

- The iBooks Platform, Thomas Brand (@ThomasBrand)

Macworld’s Serenity Caldwell follows up on Apple’s iBooks Author announcements and notes how authors welcome Apple’s entry in the digital publishing industry, but are still looking forward to a broader ePub-compatible publishing tool with advanced features, a polished interface, and Apple’s refined user experience.

It’s crazy that we have so few options after five years: The ebooks market is clearly making money. If Apple’s release of an authoring tool has shown anything, it’s that the demand is certainly out there. The publishing industry needs a Dreamweaver or Hype-type ePub application—one that won’t be limited by EULAs, or insistent on proprietary formats.

I’ve already written a wish-list for my perfect app; had I the talent, the skills, and the time to build it, I’d be half-tempted to try coding it myself. Silly, of course, but when it comes down to it, I just want to be able to make awesome ebooks. It shouldn’t take two weeks and six programs to create a book with images and interactive content.

- Holding out for an ePub hero, Serenity Caldwell (@settern)

Fraser Speirs, who knows a thing or two about iPad in schools, thinks that textbooks aren’t necessarily the future, but a way to get there.

Apple already revolutionized education when it invented the iPad. While iBooks textbooks are a bridge from the past to the future—and we do need a way to get to the future—they are not that future. If Henry Ford had been an educational publisher, his customers would have asked for electronic textbooks instead of faster horses.

- Apple’s announcements further iPad revolution in education, Fraser Speirs (@fraserspeirs)

How does Apple’s iBooks Textbooks initiative look from a teacher’s perspective? Kieran Healy’s post on the subject is insightful and detailed.

Apple’s proposed model would kill the used market, dead. The presentation emphasized that once you buy a book you always own it, and you can download it to any new devices you buy. But a corollary is that once you’re done with the book you can’t give or sell it to anyone else. So, at least initially, publishers can charge much less for their textbooks and make it up on volume. That’s fine by me if students end up paying less, though I immediately wonder whether the next step would be for publishers to modularize the books. Instead of your one giant Bio or Calc or Econ book for $14.99 rather than $129.99, you can have various shorter books available for the same price, but have to buy all of them over the course of a year or semester—like 19th century serial novels. This would likely be pitched to faculty as allowing for greater flexibility in curriculum construction, but again it’s the students who end up paying for the books.

- Apple for the Teacher, Kieran Healy (@kjhealy)

iBooks Author From Apple’s Perspective

In following the interesting debate that has arisen with the release of iBooks 2.0, iBooks Author for Mac and a EULA that doesn’t allow authors to sell iBooks outside of the iBookstore, I’ve seen two kind of reactions: it’s either a draconian move or the “obvious choice” for Apple. I think the reasoning for Apple to release iBooks Author 1.0 today lies somewhere in the middle, so I’m trying to analyze this story from Apple’s perspective, if possible.

Earlier today I tweeted:

John Gruber posted similar thoughts on Daring Fireball:

Second, it’s about not wanting iBooks Author to serve as an authoring tool for competing bookstores like Amazon’s or Google’s. The output of iBooks Author is, as far as I can tell, HTML5 — pretty much ePub 3 with whatever nonstandard liberties Apple saw fit to take in order to achieve the results they wanted. It’s not a standard format in the sense of following a spec from a standards body like the W3C, but it’s just HTML5 rendered by WebKit — not a binary blob tied to iOS or Cocoa. It may not be easy, but I don’t think it would be that much work for anyone else with an ePub reader that’s based on WebKit to add support for these iBooks textbooks. Apple is saying, “Fuck that, unless you’re giving it away for free.

To recap: iBooks created with iBooks Author can be given away for free or sold through the iBookstore, where Apple takes a 30% cut. iBooks created with iBooks Author cannot be sold outside the iBookstore, as stated in the iBooks Author EULA

Now let’s consider the complicated scenario Apple must have faced when deciding as to whether iBooks Author 1.0 should have been a broader authoring tool, or a desktop editing suite for the iBookstore. Many devices nowadays are capable of displaying eBooks: smartphones, computers, tablets. There are several participants in the eBook race with the biggest player being Amazon, followed, I guess, by Apple with the iPad/iBookstore and many others including Barnes & Noble, Google, and so forth. eBooks are variegate: there are many file formats, different distribution networks with their own licenses and terms, different desktop editing programs that comply to a few standards, the most popular one being EPUB, which Apple also accepts for iBooks and the iBookstore. Apple is not alone in the eBook market.

Apple, however, doesn’t make much revenue off Internet services and the various Stores it operates. It’s a known fact iTunes and the App Store have been a break-even operation for many years, with the main goal of providing content and not making a serious profit. I assume the numbers for the iBookstore fall in line with iTunes and the App Store – Apple doesn’t make much money out of iBooks, nor did they ever plan to base their business on it. But: iBooks, apps and media are ways to get people to buy iOS hardware, which is where Apple makes money. Apple is a hardware company that produces fine software that helps them sell a lot of hardware. The iBookstore is, ultimately, a way for Apple to tell people that an amazing eBook reading experience is possible on iOS devices. iBooks is a brand that Apple should care to protect and maintain because it is associated with its main source of revenue – the hardware. Other companies, too, seem to understand that software and content drive hardware sales.

Because iBooks is Apple’s brand and platform now, Apple obviously wants to have some kind of control on the whole experience and distribution. And this is where things start to get tricky. On the App Store, apps have technical limitations that force them to go through the approval process before a user can install them. You can’t install apps in any other way, unless you’re willing to hack into your device’s operating system. Apps are made with Xcode and sold by developers enrolled in the iOS Developer Program. The setup is fairly similar with the iBookstore: iBooks are created in iBooks Author by writers/editors enrolled in the program, sold in the iBookstore so a user can download them. But there’s a big difference: we learn today that iBooks can be distributed for free elsewhere. This is not possible for iOS apps, and this is the reason I believe today’s announcement has been so controversial.

The problem, I think, is that allowing iBooks to be distributed for free anywhere but forcing authors to sell them only through Apple is seen as a pretentious move from a company that many were expecting to announce a grand plan to save the publishing industry today. It’s the sort of gray area that’s open to discussion and generally causes the sort of debates we’ve seen on the Internet. But, in fact, it is a move from a company that wants to make money: if you were to run a business you know it’s going to break even, giving away a great desktop application that costed thousands of dollars in research and development knowing that you’ll have to maintain it for years to come, wouldn’t you want to have products in your own Store and at least ask for a 30% cut?

Others say the main issue is not with the 30% cut itself – we’re used to it now – it’s with the requirement of having paid editions of iBooks only in the iBookstore. It’s not like it’s technically impossible to sell them elsewhere, right? It’s not like apps – and that is correct. In theory, Apple could allow .ibooks files to become just another file format that you can distribute digitally online, and even sell it for a price as several designers do, for instance, with .psd files. But the problem lies deeper, not in the revenue cut but in the locking-in philosophy that is leading some people to believe this is akin to banning free speech. So let’s look at this from a more conceptual standpoint.

I mentioned above iBooks is a brand that is functional to Apple’s primary way of making money. Imagine this: if Apple were to allow distribution of paid eBooks anywhere, nothing could stop an author from selling it on other channels – I’d say Google and Amazon but let’s assume “his website” for now. What would stop this author from selling his iBook at a lower price on his website, and at a 30% more on the iBookstore to make up for Apple’s cut? And now with the second scenario: imagine Google rolling out support for .ibooks files in the eBookstore. Why would Apple want Google, of all companies, to get to brag about .ibooks? And even if it’s not about the .ibooks published format (of limited use outside of iBooks 2.0), why wouldn’t Apple require a small kickback for the result of a desktop program they gave you for free?

Keeping a brand, lock-in, revenue cut: it’s all part of a bigger plan, which is selling hardware people want because of the experience it provides. This experience is provided by content. Again, ecosystem.

So, in a way, iBooks aren’t too different from apps. I could even argue that in Apple’s vision, everything that goes through iTunes has some sort of exclusivity attached to it. Yes, even music and movies: iTunes Extras and LPs aren’t as popular as apps and books, but they’re an example of the integrated media/platform experience that Apple sells.

From my perspective, of course I would have been more excited to see a broader authoring tool announced today with no licensing terms for paid eBooks and full EPUB support. But as I’ve stated in a Twitter conversation with Jason Snell, this is a 1.0 version of a tool that was clearly meant for textbook publishers, and released today for other authors as well. What I could really argue is that it’s not like Apple doesn’t have the resources to come up with a full-featured authoring tool on Day One, and it would have been much better to appeal to all kinds of authors and audiences starting today with a great format and a great app. But: not all apps are perfect on day one. Not even Apple’s. Political speculation aside, I wouldn’t be surprised to know they had to get this out of the door today in preparation of the big iPad 3 launch. We’ll never know why iBooks Author was released today and not in two months with more features, but we know that Apple is a company that in the past months hasn’t been afraid of reversing a couple of unpopular decisions.

As usual, we wait.

iBooks Textbooks Commentary

Following the announcements Apple made this morning about iBooks 2.0, textbooks and iTunes U, some interesting discussions have surfaced online in regards to Apple’s willingness to improve the education system – and reinvent textbooks – using iBooks and the iPad. Being based in Italy, I can’t comment specifically on the U.S. school system and what these new products mean for students, school districts and educational institutions, but I do have a few ideas and links to share.

iBooks has turned into a platform. No more just an e-Reader, with the addition of textbooks and books created through iBooks Author Apple seems to be betting on iBooks as a platform that stands on its own, just like iTunes and the App Store. You could argue that this was already clear from the start with the dedicated iBooks app and iBookstore within iOS, but it’s even more relevant now because of one key factor: content creation. Provided you have an iBookstore account, you can now create content-rich books on your Mac and sell them through the iBookstore. You can also export them locally, and preview them on your iPad. I have no idea how smaller, independent publishers and authors will respond to iBooks Author in the long term, but as far as creating content goes, Apple’s latest desktop app looks fantastic. The double nature of this announcement (rich textbooks, books by authors) combined with the existing features of iBooks has a real chance of creating “an iBooks ecosystem”.

Software sells the hardware. Obvious consequence: books created with iBooks Author (packages, not the actual content) can only be sold through the iBookstore. Now, assuming authors like the functionalities and workflow enabled by iBooks Author and assuming they also like money, if this initiative proves successful in the long term, what devices are authors going to recommend?

…It depends. iBooks Author looks like a great eBook creation app, but some authors are skeptical. We will have to wait and see if authors will adopt the software, if Apple will provide continued support with updates and, ultimately, if iBooks Author can be used effectively for all kinds of eBooks, not just those heavy on media and fancy effects. For instance, it doesn’t look like EPUB is supported right now as the format seems to be different. Ben Brooks is right: Apple seems to be targeting Kindle Singles directly with iBooks Author.

Rich content made simple. iBooks Author simplifies the process of creating content-rich books with drag & drop, pop-out menus, auto-align controls, and more. From iBooks Author’s Help section:

  • Gallery: Add a sequence of images your readers can swipe through, each with its own custom caption.
  • Media: Add a movie or audio file readers can play.
  • Review: Add a sequence of interactive multiple-choice or drag-to-target questions.
  • Keynote: Add a Keynote presentation (exported as HTML).
  • Interactive image: Use labels (sometimes called callouts), panning, and zooming to provide detailed information about specific parts of a graphic.
  • 3D: Add a 3D COLLADA (.dae) file readers can rotate.
  • HTML: Add a Dashboard widget (.wdgt).

By using web technologies, desktop-class content creation software and an iWork-like interface, with iBooks Author Apple is offering what Xcode is to the App Store. For free.

Accessibility. iBooks Author fully takes advantage of VoiceOver and other Accessibility technologies to let people with disabilities read and experience books. Apple takes Accessibility seriously, and it shows.

Other uses for iBooks Author? I haven’t played with it yet, but I wouldn’t be surprised to see iBooks Author being used for other purposes.

iBooks Textbooks remind me of Push Pop Press. And guess what, the folks behind PPP (acquired by Facebook earlier this year – coincidence?) sound pretty pissed off.

Prices. iPads are expensive! But so were PCs and Macs. As Stephen Hackett correctly points out, Apple doesn’t disclose educational pricing, and several schools already have leased Macs in the classrooms. Will Apple provide a 1-1 “switching program” for schools that don’t need Macs anymore? And what will base pricing of leased iPads look like? The Verge spoke to Apple’s Phil Schiller, who told them “he thinks the numbers work out favorably for school districts if you weigh the costs of textbooks and classroom computers against iBooks content and iPads”. Joshua Schnell has a slightly different take and suggests that iPads may only end up being used in “rich white kid schools”. I think we don’t have enough details to speculate on Apple’s educational pricing right now (as usual, a Volume Purchase Program for apps and books is available). The only data point we have is that iBooks Textbooks will be cheaper than physical textbooks…if publishers don’t change their minds.

Yes, physical books are more “durable” if you drop them. But what do you use today, an encyclopedia with a typewriter or a PC? Time to move on.

Other devices. I’m hearing reports of iBooks 2.0 and iTunes U not running smoothly on the original iPad and older iPhones, confirming my theory that textbooks seem to be heavily targeting the speedy A5 processor of the iPad 2 (I have no idea why would iTunes U and regular books run slower on older-gen devices though). Let’s not forget that an A6-enabled iPad 3 is rumored to land soon, and Apple may keep the iPad 2 around at a lower price.

Digital books are still heavy. Pearson’s Biology textbook is a 2.77 GB download. We complained about iPad magazines and their absurd download sizes, but it looks like there isn’t much you can do about heavy content like images and video. When I was a kid, I often needed a bigger backpack for textbooks. Now kids will need bigger flash memory.

It’s up to schools and teachers. Pricing issue aside (and that is a huge “aside” for now), schools and teachers will obviously have to learn how to deploy and manage iPads, as well as integrate textbooks and new learning experiences into their curricula. In the current scenario, it’s very likely that kids already know how to use iPads, and their teachers will have to play catch up. On the technical side, I’d suggest schools to look for inspiration in Fraser Speirs’ experiences.

Apple doesn’t want to fix textbooks. They want to improve learning. The underlying message of today’s announcements isn’t strictly about textbooks – surely they play a big role in education, but the scope of Apple’s mission is much broader. Apple wants to re-imagine learning and improve current standards with new technologies: content management systems for classes are nothing new, but iTunes U takes it to a whole new level with a beautiful, always-connected, interactive application. There are big corporations that control the education/textbook market and who knows if they’re really willing to give Apple the leading role in this game with distribution, standardization of technologies and guidance. As Dan Frommer notes, change is not going to happen overnight but you can’t believe in paper textbooks as “the future”.

Apple’s revamped education strategy will be interesting to follow.

New Twitter Clients

Justin Williams writes about the current state of Twitter clients for iOS:

What iOS needs is the Twitter equivalent to Adium: a well maintained, open source Twitter client that is targeted at the most hardcore and passionate users of both Twitter and the iOS platform.

That, of course, is easier typed than done. Many open source projects fail because of lack of vision or direction. Others fail because they are just badly engineered software that aims to shove every pet feature into a unified product. Projects like Adium succeed because there is an established hierarchy of managers, developers and contributors. Each release has a focus and direction much like a commercially produced project.

My first Twitter client was Twittelator Pro by Andrew Stone, which I installed soon after I got my first iPhone in 2008. After that, I switched to Twitterrific, which I kept until Tweetie came out. For a few months I bounced back and forth between Tweetie, Twitterrific and Birdfeed but, eventually, I settled with Tweetie 2. I loved Tweetie 2. It was the perfect Twitter client for my needs, it was fast and Loren was (is) a great guy. But then Twitter bought the app, started doing all kinds of crazy things to it, and the excitement wore off. I went back to Twitterrific, but it wasn’t the same – I had become very accustomed to Tweetie (now Twitter for iPhone) and the simplicity of Twitterrific was disorienting. Like Justin, I’ve always had a problem with inline DMs in Twitterrific.

Throughout 2010 and 2011 there’s also been a period when I went back to trying every Twitter client out there, including Twittelator Pro (again), but also Echofon, Tweetings, HootSuite, Osfoora, TweetList and TweetLogix. I was addicted to trying Twitter clients until Tweetbot came out and, as I wrote in my review, proved to be a Twitter app for iPhone I could once again fall in love with. I’ve been using Tweetbot for iPhone ever since, and the app keeps getting better on each release. Personally, I don’t agree with Justin’s point that Tweetbot is “the best designed Android app available for iOS”, but this isn’t the main problem.

The real issue is that these days iOS Twitter nerds are left with Tweetbot and nothing else. Twitterrific clearly isn’t targeting power users – maybe a better expression would be “users that don’t just casually check on Twitter” – and Twitter for iPhone, well, let’s just say it’s not exactly focused on Twitter geeks anymore. How about the other clients? I see very few innovators around, and the only third-party app I’m excited about (again, except Tweetbot, which I use every day) is Twittelator Neue – Stone’s app has a good chance to reinvent a few things especially if it ever comes to the iPad. But looking at the whole Twitter software landscape today, it’s clear to me there isn’t the kind of verve and anticipation for new clients that we experienced three years ago, with developers constantly updating their clients, one-upping competitors in terms of features, and teasing new products that (sadly) never came to be.

In a scenario where the less popular Twitter clients are either a) maintained through bug fix releases or b) updated with minor features every once in a while, lacking major additions like iPad and Mac counterparts, I see a glimmer of hope in Tweetbot – Tapbots are always up to some great stuff – and services like Tweet Marker: available for free to developers to implement in their apps, Tweet Marker is the first step towards that kind of client-side unification whose lack made switching Twitter clients on a daily (or even hourly) basis so painful in 2009. Check out the apps that already support Tweet Marker, and note how they’re the same names that I’ve mentioned above.

Building an Adium-like model for the ultimate Twitter client might be a viable plan, albeit an elaborate one considering all the technical complexities and frequent changes behind the Twitter API. An ideal modern Twitter client for power users should have delightful and powerful iOS apps and an outstanding Mac client that makes it extremely easy to switch environments without user fatigue; you have to make sure the apps are always brought up to date with the latest Twitter features from Twitter itself and iOS 5 (I’m fairly sure the technologies and APIs behind AIM aren’t updated nearly as often as Apple releases new iOS betas), and when everything’s distributed for free you have to make sure you’ve got a dedicated, kick-ass team of contributors and leaders, or things start to get messy (and slow) because of updates, user support, feature request, and so forth.

So here’s another possible scenario. Let’s continue to diversify the offer of available Twitter clients, and settle with one app for power users. Justin doesn’t like Tweetbot, but perhaps one year from now Tweetbot will be available on more platforms with changes and tweaks that everyone will like and use on a daily basis, even Justin. Around that Twitter client for power users, I imagine a flourishing ecosystem of innovative Twitter apps that don’t simply focus on building an alternative to Tweetbot – a daunting task at this point – but provide a unique experience that can live alongside the main, full-featured client. I’m thinking Tweet Library, also by Tweet Marker’s Manton Reece: instead of just focusing on being the perfect regular client, Tweet Library’s built-in client is functional to the app’s real feature: curating tweets and archiving them. This is the path I believe developers should strongly consider for building Twitter-connected apps: focus on APIs, services and interactions with other software. Where’s the Twitter app that integrates with Evernote and lets you annotate tweets? Where is the app to run, manage and archive online polls exclusively via Twitter? Where’s the service that lets you use your custom vanity URL and get beautiful, real-time, reliable click analytics instead of the ugly mess that’s HootSuite?

You see where I’m getting at – I believe developers are (obviously) completely free of investing their time and resources into competing with Tweetbot, but on the other hand I don’t think focusing on other aspects of Twitter means admitting defeat. It’s easy to say “Tweetbot won” or “Twitterrific is the best” when, really, the story is much more complex than that and also goes back to a company that has shown a “peculiar” approach to guiding its own third-party developers.

Will we ever go back to the Birdfeed and Tweetie era? I don’t think so. Twitter is now integrated in iOS 5 and seeing massive growth because of it, thus justifying the prospect of creating an app “for power users” even less. Yet I can’t help but think about a time, not too distant from now, when the power users will finally settle on a single solution for their power-hungry needs, and let other developers innovate atop of the Twitter platform in disruptive new ways. The ideas, devices, APIs and users are waiting.

[Photo by Jorge Quinteros]

Why I Use Todo.txt

I’d like to briefly elaborate on my Todo.txt setup, which I only started using last month as a way to keep my “todo articles” separate from general “todos” that I now keep organized and synced through Remember The Milk. Several readers have emailed me asking why I chose Todo.txt of all text editors and task management systems, so here it goes.

Todo.txt has a simple syntax that requires no learning curve. I can fire up Todo.txt’s iOS app or TextEdit on my Mac, and add a new line for a new todo, which in my case is an article I’m working on or I know I’ll be working on in the immediate future (this week or next week, I try not to project too distant in the future as blogging priorities can rapidly change). I’ve tried other text-based todo solutions like TaskAgent and TaskPaper, and I like them a lot as apps with outstanding support from their developers, but I just feel more comfortable using Todo.txt’s syntax, which appends new lines as todos and marks those beginning with an “x” as complete. Obviously, Todo.txt comes with much more complex possibilities and interfaces such as a full-featured CLI and support for contexts and priorities, but I use none of these features. To me, Todo.txt is the easiest way to maintain a list of “todo” Vs. “not done yet” articles that I want to have on MacStories.

For this reason, I keep the Todo.txt iOS apps (on my iPhone and iPad) as simple and clutter-free as possible. Developer Gina Trapani made sure that you can sort by date and todo ID, enable app badges and date new tasks but, again, I haven’t found myself needing any of these (I could have enabled badges on the Mac too). In the Todo.txt iOS app, I chose to display line numbers to give me an easily scannable overview of just how many items I have, and I’ve disabled everything else as you can see in the screenshot. With this setup, it takes 30 seconds to open the app, quickly see what’s up while it’s syncing (takes a few seconds as the file to load is very lightweight) and enter a new todo. I don’t use contexts and projects either: as I mentioned last week, I don’t need a “context” for my MacStories articles, and the project is always the same, writing for the site.

If possible, things are even simpler on my Mac. Todo.txt is synced via Dropbox and alias’d on my desktop. When I need to check on the articles I have in my queue I can use TextEdit or, better, nvALT, which also displays all my other Dropbox notes synced inside a “Notely” folder (no particular app preference here, I just liked the name). Adding new todos to the file requires a few seconds, but if I’m feeling really keyboard-junkie I can append a new todo to the end of the file using an Alfred extension. I use Alfred for a lot of different tasks on my Mac (adding items to Remember The Milk, converting currencies, generating new random passwords, etc.), so it helps that I’ve found a way to integrate Todo.txt with my existing workflow.

And when an article is done and a todo is complete? I just delete it. I don’t archive, “review”, flag or categorize. Articles are just there and it’s up to me to write them.

Text-based todo management systems go back a long way. In learning about Todo.txt’s history, I stumbled upon relatively old articles that described how it was popular “back in the day” (we’re talking pre-Tiger days as well) to keep everything, from notes to passwords to long-form articles, inside a giant .txt file formatted in some way for easy scanning. These days we’re using the modern versions of those systems, which may be Evernote, Yojimbo, or other anything buckets. These services come with a fantastic set of features – I’m a huge fan of Evernote myself – but as far as my articles go, I want them to be highly portable in an environment that’s open to any other app for access and modifications. With plain text, I can have my MacStories-related todos synced in a text file that can be opened and correctly read by any text editor – and I’m sure it’ll remain that way for the next 20 years when .docx files will be corrupted and biting the dust.

Some parts of Todo.txt are modeled after David Allen’s GTD methodology and, at least for my articles, I’m not using GTD at all. But I am getting things done, for real, with a system that I can trust, is reliable and works anywhere.