It's not the Apple tablet that's important, it's the content
To say there's a lot of excitement around Apple's scheduled event this week would be an understatement. Since the company's unveiling of the iPhone more than three years ago, Apple has managed to corner the market on hype in the wireless industry. And the company's promise to show off its "latest creation" at the Yerba Buena Center for the Arts Theater in San Francisco Wednesday has fueled a seemingly endless stream of rumors about the company's planned announcement.
According to a variety of reports (sources range from the Wall Street Journal to Fox News to third-party companies to blogs), Apple will unveil a tablet device and content specialized for that device, as well as a new version of its iPhone operating system and an iPhone distribution deal with Verizon Wireless.
Now, if all this is true, it's not terribly surprising. A deal with Verizon makes sense as it would expand the iPhone's potential U.S. customer base by roughly 90 million, and it would dovetail with Apple's recent moves in countries like the United Kingdom away from single-carrier exclusivity arraignments. As for the tablet, that too wouldn't really come as a shock since it would generate additional hardware revenues via a new category of devices for Apple fans to purchase.
But here's where I think Apple is playing it smart--and where the rest of the wireless industry is not. According to various rumors, Apple has been in contact with a variety of media outlets ranging from magazine publishers like Condé Nast to newspaper vendors like the New York Times to book publishers like McGraw-Hill Education to bring a variety of publications to the tablet. And this I think represents one of the key pillars to Apple's successful business strategy--marrying devices with content.
Think about Apple's entry into the digital music player space: The company's iPod debuted with iTunes, a simplified system of purchasing and listening to music. ITunes was an acknowledgment that users don't just want to own the latest shiny device, they want to be able to use it. I suspect the introduction of the iPad/iTablet/iSlate will carry a similar reason for users to purchase it. And I'll bet that whatever content Apple debuts for its tablet will also be available to the iPhone.
But what does all this have to do with the wireless industry? Despite some scattershot attempts by a handful of players (think Nokia's Comes with Music, Verizon's VCast service or the Amazon MP3 store for Android), it appears that most smartphone vendors have no intention of pairing their platforms to content. Instead of developing an answer to iTunes, they've been working on launching their own app stores. While I think app stores are important, Apple's App Store for the iPhone is just one component of its larger iTunes strategy.
For example, how would an Android phone user watch Jon Stewart's "The Daily Show?" How would a BlackBerry enthusiast rent "The Hangover?" ITunes has both.
What's more, Apple appears poised to dramatically expand the capabilities of its already capable iTunes platform. Via its acquisition of Lala.com, Apple will be able to sell music, and perhaps other content, through a streaming scenario--and may be able to charge less for the stream than for the straight download. The company also is rumored to be planned a Web-based version of iTunes, which would make the platform more user friendly and nimble than its current 100-or-so megabytes. Couple these advances with the addition of newspapers, magazines and books to iTunes and the platform becomes a one-stop content shop for iPhones, iTablets and the rest.
Of course, there are alternatives. Amazon.com houses a comparable content collection, replete with movies, music and books, and doubleTwist offers a relatively smooth synching service that covers a variety of phones. Further, the new Digital Entertainment Content Ecosystem, or DECE, organization may provide some relief on the TV and movie front. But there remains no clear rival to iTunes, a situation highlighted by Palm's persistent efforts to synch its webOS devices to Apple's iTunes.
If Apple does indeed introduce a tablet tomorrow, I suspect much of the focus will be on the hardware. But, as the San Jose Mercury News points out, tablets have been around for more than two decades. Apple rivals ought to be focused more closely on the content side of the equation--or, to be clearer, the reason Apple is giving people to buy the tablet. --Mike