Apple’s Triple Hitter

Apple showed Monday at its developers conference that it has become conscious of its weakest link in the New Economy – a flock of new competitors. The enemy is not just Microsoft but Google with the Android Netbook and Mobile Phones, Amazon with the Kindle and Cloud Computing; Palm with the Pre and WebOS; and perhaps most tellingly with Taiwnese electronic firms like Asus and Acer starting to do their own design innovations which are garnering both domestic and world attention….and big chunks of PC and mobile phone market share.So at its Webworld conference, Apple delivered a triple hitter – some powerful punches aimed at its competitors.

First: Knockout Blow to Sprint/Palm Pre?

The new iPhone 3gs at $199 provides double the memory (16GB vs 8Gb for the Pre), unique video taking capabilities as good as the Flip, plus improved speed of operatio plus a whole set of features embedded in amajor Snow Leopard OS update. And iPhone already comes loaded with an App Store with thousands of apps availabe for free or $10-35 in price.

To defend itself, PCWorld’s competitive matrix shows Palm leading in 2 categories: a real keyboard versus Apple’s screen consuming one and true multi-tasking versus very limited multi-tasking even with the new Snow leopard version of the iPhone.

Some would argue that the Palm Pre with its combo of gestures and multi-tasking makes it a smother interface. But having only seen but not worked hands on with the Palm Pre, I cannot vouch for it capabilities versus the smoothworking Apple iPhone.
But I can say that iPhone 3gs’ speed of operation, larger screen, goodies like voice control, Compass, iLostrecovery feature and many more apps means that the iPhone has a distinct competitive advantage. In sum, the new iPhone features and price are (especially the $99 price for the previous iPhone are a staggering blow. However, it will not snuff out the Pre because Sprint/Nextel users will have in Palm Pre a compelling (but not cheaper)reason to stay with their network.

Second: Solid OS Phone 3 and Snow Leopard Jabs

OS Phone 3, available June 17th 2009 at no charge, will not deliver multi-tasking but will add a wide array of features that will be attractive to smartphone users:
1)MMS-Multimedia Messaging Service includes audio, video, images, etc;
2)Tape recorder – works as voice memos;
3)Spotlight search – extends to all apps/data of iPhone and attached iPod;
4)Internet Tethering and Syncing – connect vis USB or Bluetooth to Mac and PCs;
5)Cut, Copy Paste – for notes, improved calendar,
6)Improved Safari and JavaScript speed +features;
7)Improved iPhone app capabilities;
8)A slew of connectivity improvements: Bluetooth stereo, YouTube signin, WiFi login, etc.
These improvements will help iPhone to blunt incursions from Blackberry, Palm Pre webOS, and Google Android. As smartphones become crucial link/relay devices in the connected world, the smartphone’s OS and its easy expandibility become critical in an expansion to wider (and more profitable) business markets.

But perhaps the biggest importance of the new OS is the speed improvements it engenders for the overall operation and specifically for Apps. This will make two opposites more acceptable: gaming and business apps. See this NYTimes article on gaming opportunities on new iPhone 3gs and 3.0 devices while Computerworld sees a number of business features that will make iPhone much more attractive in the Enterprise – not the least of which are hardware encryption, Exchange support, and tethering to various servers and devices.

Likewise Snow Leopard which will be available on September 19th 2009 for $29US upgrade price, also packs a punch with its many improvements and new features. Since Google with Android Netbooks appearing in September and Microsoft’s Windows 7 on October 22nd get the advantage of last entry into the OS arena – Snow Leopard will have to be impressive. There are a host of improvements detailed by Apple here with dramatic speed improvements throughout the OS, 64bit operations, Safari’s vastly improved speed and standards support, a completely revamped QuickTime X, and a passle of integration solutions. 64bit operations, videos processor optimizations, Grand Central optimization and the Safari updates appear to be geared as much to developers as end users. Apple Snow leopard will be nicely positioned as OS battles breakout in full force this Fall among Apple, Google, and Microsoft for smartphone and PC supremacy.

Third: Strikeout on PC Prices?

For the first time in a longtime Apple has announced substantial cuts in MacBook pricess at the same time as increasing the machines capabilities and specs. The 13inch Macbook is typical:

Here is a comparison of the new Macbook 13 versus a Dell on a variety of key factors:

Measure	Dell Vostro 1320	Macbook Pro 13
Processor	Intel Core Duo 2.53GHz, 800FSB	Intel Core Duo 2.53GHz, 1066FSB
RAM Memory	4GB, 800Hz	4GB, 1066Hz
Hard Disk Size	250GB, 7200RPM	250GB, 5400RPM
Screen Size	13.3″	13.3″
Video Card	NVidia GForce9300	NVidia GForce9400M
WebCam	Yes	Yes
Battery	9cell 4+hours	7hours, 5year
Cost in $CAD	$1549CAD	$1749CAD

The Apple MacBook Pro is now down to $200CAD more than a Dell Vostro(earlier this spring I did a similar pricing exercise and the difference was nearly $750 more for the comparably equipped Apple Macbook Pro). The Apple has faster Front Side Bus Speed, and better Nvidia graphics card while the Vostro comes with a faster 7200RPM versus 5400RPM hard disk drive. There is no special application software loaded in either system.

So Apple has brought its laptop prices down closer to Dell and HP; but there is a still a ways to go. Even more telling, Netbooks at the Computex 2009 show in Taiwan were at the $250-450 level with ARM processors 2GB of memory, 160GB drives and Linux OS. So this will be the new floor. The conlusion is that for a class of users (not the graphics, developer and designer crowd that Apple currently serves), Apple’s cost for computing power is still way too high.

Summary

This announcement was interesting for three reasons. First and foremost, it was done with Steve Jobs no longer completely at the helm. No appearance of Steve at the Developer Conference as per usual and an unknown amount of his leadership during development for the past 5 months. Assume half-time and the people at Apple can be graded pretty highly for the goodies delivered. Second, Apple responded to a number of competitive thrusts in the mobile, OS, and laptop marketplaces with decreasing effectiveness. Top marks for the mobile effort, good but mixed marks in the OS efforts(mobile OS Phone still does not match Palm’s WebOS). A sense of disappointment in the laptop arena as Apple pricess start to approach domestic US laptop makers but are not even “horseshoes close” on the Netbooks problem. But maybe the rumored 2010 touchscreen tablet will rectify this. Third, there was no knock your sox off innovation – that may be coming with the Apple Server product with ZFS and 64bit OS and a bunch of enterprise caliber capabilities along with the 2010 touchscreen tablet. So for domestic competition, Apple is responding price and feature effectively; but for China+Taiwan competition – Apple is still missing some game.