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Apple's iPAD is a lost naming opportunity. Apple should have expanded on its iTouch product branding.

Apple Inc., a company that normally takes great care in keeping its product names highly descriptive and simple, stumbled last week at the launch of the its iPAD web tablet device last week.  It seems a lot of people, especially women just did not take kindly to the iPAD name.

The Apple iPAD, is basically an iTouch (WiFi-only models) or an iPhone (WiFi/3G models) with a larger 9.7" screen and using the same iPhone operating system and capable of leveraging the iPhone App Store.  Of course, some existing iPhone features have been stripped out (the camera for instance) and Apple does not see too many users wanting to hold up the bulky device to the ear and talk into it, replacing their mobile phone.  Other key features users were hoping to see are still sadly missing: Multitasking support in the OS, Flash player support, and dual-cameras for video chatting.

As an owner now on his third iTouch, I just cannot understand why Apple picked to build a new product category under the name "iPAD" when it could have easily extended its popular "iTouch" product branding to the new tablet devices.  Customers and the press would have easily understood the capabilities and the method of operation with a simple name like:

•    iTouch 10", or
•    iTouch XL, or
•    iTouch Pro, or
•    iTouch Tablet

Of course, Apple is the same company that made popular the iPOD brand to represent its portable music/media device.  Not exactly the Sony "Walkman" brand simplicity out of the gate, but Apple made iPOD work for them!  The only thing that matters is success, and Apple is way out in front of everyone when it comes to portable digital music players, touchscreen mobile phones and now larger touchscreen mobile tablets.

On a side note, an overseas contact of mine estimated that the iPAD build cost for a company ordering parts in the millions per year, would be around US$171 for the 3G 16GB unit and about US$17 less for the simpler WiFi-only model (not including the microSIM card or packaging).  I'm sure iSuppli will publish their own tear-down cost estimates in the coming weeks.  Add in R&D amortization costs, packaging, shipping, Q/A and Sales costs, and Apple still has plenty of room to make its 40%+ margins plus throw in some AT&T commissions and margins on App Store and media content sales and you can see why Mr. Jobs wants to build this into a key fork in Apple's income stream.

Personally, given that I have continuously upgraded my iTouch annually from 8GB, to 16GB and now 32GB, I am trying to quash any inner thoughts to purchase an Apple iPAD in its current first generation.  I'm sure that by Fall 2010 or at least in Winter 2011, Apple will have at least upgraded the iPAD product line to include at least one camera, multitasking support and upped the base memory to 32GB.  Hopefully, Apple also will give the users what they want and stop playing their corporate games and support Adobe's Flash Player.

VON Radio - Canadian Podcast on Canadian ILEC scene

As part of Jon Arnold's Canadian IP Thought Leaders series on VON Radio, he invited me to join in a quick discussion on the Canadian ILEC landscape, including BCE's recent divestiture of a large portion of its media holdings.

I know its not like me to post twice in one day to Bitpad.com, with the Microsoft Paid Search post below, but in this case Jon Arnold and the Pulver team did most of the work in getting the Podcast online.

People interested in VoIP should seriously spend some time looking over the recently upgraded VON Radio website that is part of ever growing Pulver portfolio.

As part of his work with the Pulver organization, Jon Arnold of Jon Arnold &  Associates airs a weekly podcast titled "Canadian IP Thought Leaders" and was gracious enough to invite me to join him last week.  It's a quick 15 minute discussion on discussion on BCE-Bell Globemedia divestiture deal, and the ILEC landscape in general in Canada.  You can listen to the Podcast directly at VON Radio or even subscribe to its RSS feed.

In the end, neither Bell or Telus will have it easy going into 2006; and the relatively slow push (not as price competitive as Videotron) by Rogers and Shaw Cable on their VoIP offering may allow the ILECs time to re-think their revenue cannibalism equation as their own VoIP and IPTV offerings come to market.

Jon and I continue to discuss the industry quite frequently, and a more detailed version of the Podcast should lead to a new posting very soon on some of the opportunities and threats that face the entire Canadian Communications landscape (Cable, Wireless, ILEC, VoIP) going into 2006.

Please share your thoughts and any international readers, I'd love to learn parallels of what is taking place in your country. 

Thanks! Ash.

George Cope New Prez & CEO of Bell Canada

The Canadian Telecom market-place will be a lot more interesting in 2006.

Early this morning BCE announced that George Cope, who was the CEO & President of Telus Mobility, would join its Bell Canada unit as the President and COO.  His responsibilities at Bell will include: residential (wireline, internet and video) as well as Enterprise, SMB and Wholesale units.  He will start the new role in January.

Getting George Cope to join the BCE family is a tremendous win for Bell; and something that Darren Entwistle, CEO of Telus Inc., should have foreseen and could have avoided with progressive succession planning.  Mr. Cope is widely respected within the industry.  This is a gentleman who made his fortune getting Mr. Entwistle to bite on an over-valued Clearnet, yet operationally exceeded every target thrown at the Mobility group within Telus.

While Telus Mobility was treated as a high-performance fiefdom within the organization, with its own style of management, marketing and "team orientation", this level of independence will no longer be available to Mr. Cope.  Regardless, Bell desperately needs George Cope, no doubt it will help reinvigorate the organization and its brand.

To summarize my thoughts:

• Its not a money issue for George, so expect him to prove to Telus and its board, that he is the Canadian Telecom rain maker.  Expect Entwistle to try and beat Bell at every turn or react very quickly.
• All the Canadian telco's go crazy trying to protect a low margin $20M/year enterprise account, yet pay little executive attention to the ever changing mass market.  Expect Cope to  continue this focus, but take risks  in  the mass market to help margins and get back some much needed growth back to Bell.  Here, small improvements in retention, service or pricing strategies can move hundreds of millions of dollars over the P+L.
• Any Non-Compete Mr. Cope has on the wireless side with Telus will be honoured,  however interpretations related to bundling may be loose.  If longer than a year, Bell & Cope will always have the option to challenge the viability of a Non-Compete in a telecom market as small as Canada's.
• Expect Mr. Cope to make sound brand decisions and focus efforts to build on Bell's core strengths and out, with a strong emphasis on the brand, mass-markets, service levels, and retention.
• Watch out advertising companies!  Mr. Cope won't be mollified with what has satisfied Bell in the past.  Agencies like Grip, seeing its Bell account orbit back and forth to Cossette may have another chance.  Mr. Cope was a key driver behind keeping Clearnet's Taxi agency over to the larger Telus organization.  Expect him to come out swinging at Cossette, but with an open mind to everyone else.  Telus and Taxi would be smart to lock down key resources for the next 12 months.
• Telus should probably use Cope's departure as an opportunity to re-shape its organization.  With the Telus Mobility King gone, the fiefdom no-longer needs to exist; bringing Telus' Wireline and Wireless organizations together for the first time.
• While never working with Mr. Cope directly, any Bell employees reading this should feel pretty comfortable with the leadership announcement.  From what I have seen and heard, Cope is very loyal to his organization and rewards performance well.
• Investors should also like this move, now Sabia can focus on lobbying, convergence, deals and BCE's needs; Cope can focus on the market.  Not to mention a defined succession plan post-Sabia that should become much clearer after Cope notches a couple of wins.

Having worked for and/or consulted for senior executives of both Telus and Bell, both organizations are incredible strong, deep and should be well respected.  Having some long-term savings in both company's stocks (like most Canadians); and over the past few years being well rewarded holding onto Telus, I see this as an exciting time to see two great organizations compete.  Hopefully, Bell's rewards to its shareholders will catch-up to those of Telus.

Watch both Jon Arnold's and Mark Evans' blogs for more.  My intermittent posts will continue, but hopefully something every week or two.  Since I'm not trying to make ad revenues or anything, I only want to share with readers content and thoughts that are different.  I hope this is a value-add to all.  Please feel free to comment or send me an email.

Apple as a Wireless Opperator: Great Idea!

Apple as an MVNO would have a fighting chance:  Stevie Just Do It

Forbes' David Walt recently posted what Om Malik termed a "seriously speculative" piece, on how Apple could enter the wireless market in the U.S..  Highlighted in the Forbes article was how by becoming an MVNO (Mobile Virtual Network Operator) like Virgin Mobile or the recent Disney wireless announcement; Apple could do an end run around the few network operators to control the revenue sharing of the soon to be released iTunes-enabled cellphones.

I like the idea.  Apple is one of the few brands in the U.S. that could do it, do it well, and sustain the operation.   Of course, Dell could do it, Walmart, Sony, AOL, NASCAR and a dozen or two other ubiquitous brands.  The reason why I would love to see an Apple entry is that Apple is already a progressive hardware company known for style, and as an operator Apple wouldn't have to play in the discounting games that most brands would centre their USPs around.  I believe they could attract premium prices or at least those ARPUs similar to what wireless carriers have attracted from the better SOHO and corporate segments.

Apple could leverage the coming avalanche of audio-enabled cellphones from Motorola, Sony Ericsson, etc. and stylize their iFon (see comments) models to suit the what Apple customers expect (iPOD/iBookish white, Power-based silver models, etc.).  As their iPOD success has shown us, Apple would not have to discount or subsidize (much) their iFon's and as long minute packages are comparable to carriers; Apple would likely attract a strong loyal niche following.  Add to this, Apple's ability to bundle in iTunes tracks (weekly ringtone of your favourite iTunes genre based on the charts, etc.), multi-platform licenses support (access your purchased music library via iFon or your desktop), integrated iChat/iPhoto/iMovie/.mac support, etc.   There's plenty of opportunity for Apple to attract higher than average MVNO margins.  The back-office carrier may even benefit from monitoring this Apple application iSandbox(?) to see take-up rates and grow their internal learning's.

As someone who in the past has had to negotiate directly with Apple executives to gain exclusive "official Australian Apple ISP" status; I know how well Apple can negotiate deals with carriers.  They would rather delay a launch, then see their brand risked or their vision sandbagged by an inflexible partner.  I can't imagine a progressive mobile carrier saying No to Apple; risk losing its brand momentum and market niche to a competitor just because Apple won't share its iTunes margins.

Let's face it, carriers aren't used to making money from mobile music in the USA anyway, so they aren't losing too much if they benefit from the learning's, the partnership,  and  Walmart-inspired margin pressure.  Apple customers may actually use the capabilities of a mobile 3G network! Apple would rather a flexible partner and pay an extra cent per minute (as an example only) then do without a partner that can see the benefits of muual market development.   I can't see this iPOD tidal wave going on for another three years, and Apple moving into the wireless business would have better margins, long-term recurring revenue streams and a better effect on its stock than focusing on just its Macs and iTunes markets.

All the rampant speculation online about Apple entering the the MVNO market-space maybe speculation, just as my comments above, however I see far fewer negatives for Apple behind this move and a lot of strengths.  The time is right for a market move in 2005 or early 2006; any later and Apple risks a slow-down in its iPOD business that would seriously cut the brand's current momentum amongst its users and investors.

What Pro's and Con's have I left out?  Ideas?  Please share your comments!  On the weekend, I'll post a review on the perfect mobile phone that Apple could launch with; I've been using it for two weeks and its near perfection!

Thanks,
Ash

Why the fuss over the AOL Internet Phone Service launch?

Has AOL done anything right this millennium?

We all know the answer to this (and yet I continue to hold a few shares).  Then why does Jeff Pulver go on to say "I believe AOL will end up teaching the rest of the IP Communications Industry on how to market cool and geeky technologies to the masses. I look forward to being one of their students." (see: Jeff Pulver's blog)

It is disturbing to see the number of respected VoIP professionals supporting AOL's announcement.  I wonder if its time for bloggers to declare any affiliations with the company they mention overtly (i.e. consulting revenues, etc.). 

As some background, the company's membership continues to dwindle, with 4Q'04 results in its core domestic market dropping 464k* members in the quarter ending December 31st.  A 2mil member decline in a year, down to 22.2mil total.  This tells me that AOL ISP customers don't feel they are getting value and cannot avoid the offers being made by Telco the CableCo broadband bundles.  The gains in its domestic high-speed Cable offerings are still insufficient (with YE'04 total subscribers of 3.9M, up less than 700k during the entire year) to make up for the above retention issues. (* all figures come straight from filings posted on the AOL/Time-Warner corporate website).

Why do I regard today's AOL announcement weak?

• They are six months late!  With everyone and their brothers already in the market and many other great brands (Vonage, Packet8, Verizon) offering very competitive products and most at better price points.
• Speaking of Pricing, AOL's is off and clumsy from a customer value perspective.  AOL should be looking at VoIP as a retention tool (for the number of loyal customers who have stuck by them) and mirror the Apple iPOD "halo" effect to hopefully attract ISP customers via a competitive VoIP offering.  The current short-term promotional pricing is kind of attractive, but after a few months there really is no customer pull in the offer.  G4TechTV's AOTS "The Feed" segment already commented on tonight's episode that the pricing&plans AOL offers appear to be written in Latin.  Why not just do a simple value-add option to existing AOL users?  AOL needs to start looking at profitability from a customer bundle perspective rather than a product-centric view.  Imagine the confusion if they try and mix in a cellphone offering into the pricing?!?  AOL needs to make its pricing and plans more compelling... or customers just won't care.  AOL Canada's offered VoIP for a couple of months now, anyone think they are even close to 5000 sign-ups?  I'll take the action!
• More confusion and missed opportunities - People don't expect perfection from VoIP, and AOL should be able to easily meet these expectations.  AOL/Time-Warner have already been offering their Digital Phone service to Cable subscribers, so a VoIP offering (even if a little cheaper) just sounds like more technology being shoveled down to their customers.  They definitely need to clear up the confusion here!  On the plus side, why not use perceptions to their advantage?  Just the mere fact of using the same backbone and reducing hops should allow AOL to promise better quality to AOL callers within their network (aka "on-net").  Sure they could use QoS, etc... but just marketing the perceived notion of better quality could lead to some customer-get-customer pull through (think of MCI's Friends&Family).  Throw in a referral program and you've got viral marketing going!  Remember the good old LD days of the 80s/90s?  Sprint worked on improving their quality perceptions with a simple pin dropping next to their fiber network.  Of course, they didn't have any special network that others didn't, but they worked on the perceptions and their customers thought the Sprint lines were cleaner.  AOL needs to bring its network and heritage to the deliver the same kind of perceptual advantages.

What has AOL done right?

Simply, their web dashboard.  Something easy and interactive for customers to use and feel the benefits of using an Internet Phone.  Add in presence, integration with AIM (isn't it time for AOL to consolidate AIM and ICQ?), uniform buddy lists, audio calling via instant messenger users worldwide, SMS capabilities to the AOL IPS telephone number and smart call forwarding options (again integrated into the presence capabilities of AIM); and AOL may get a unique VoIP service that delivers retention benefits, all via delivering convenience and a seamless service.  AOL has the ability to leverage its product portfolio, why aren't they leaving it all on the field?

Please share your thoughts on the AOL IPS offering and most of all let us all know if you think customers will care!