Apple Ups the Ante with OS 4

Apple held a news conference today to announce several enhancements to the iPhone operating system. This fourth generation of the OS will include:

Multitasking: One of the biggest gripes about the iPhone is that it only allows access to one application at a time. Now if developers integrate the new APIs several applications run at once. In addition if you’re using an application like AOL Radio or Shoutcast you can start using another app and the music will continue streaming. The same can be done for location. Instead of shutting down Mapquest and losing navigation, the iPhone can continue accessing location and providing turn-by-turn directions. Finally VOIP applications like Skype can also function in the background so calls can be received even if Skype isn’t running.

Another feature related to multitasking that was discussed during this segment was “push notification” and “local notification.” In lieu of multitasking Apple had devised a system in which an application could send a user a SMS-type alert even when the application wasn’t running. This was useful in apps like AIM where messaging was occurring in real time but it wasn’t practical to keep AIM running all the time. Now rather than relying on Apple’s servers for this feature, notifications can be run off of developers’ own servers.

Multitasking will be available for the iPhone 3GS and the third generation touch but not for second generation devices. (If you are a first gen user doesn't look like Apple is even targeting these handsets anymore).

Game Center: Here Apple is taking direct aim at Nintendo and Sony. There are more than 50,000 games available for the iPhone (out of 180K apps total). Apple is upping its support of gaming by creating APIs that allow users to invite their friends to play a game and allow for matchmaking between all users of a particular game. Additional APIs allow for leaderboards and achievement lists.

iAd: Through its recent acquisition of Quattro wireless, Apple will begin to challenge Google in the mobile display ad marketplace. Apple’s premise is that users spent 30 minutes a day using apps on the iPhone. By integrating a user friendly (oxymorn?) ad format and app-like functionality it can turn mobile advertising from an annoyance to something tolerable – maybe even entertaining for users. In a clever bit of cross promotion Apple showed an ad for Disney’s Toy Story 3 (Steve Jobs sits on the Disney Board) which included a video in the HTML 5 format (diss to Adobe). Currently technology from AdMob and Millennial Media force the app a user is using to shut down. The new iAds allow for display within the application itself. Apple will be splitting ad revenues with the developers 60/40 (in the developers favor) and hopes that this will encourage the monetization of free apps.

Folders: OS 4 allows users to organize their applications into folders. This essentially expands the number of applications a user can have on his device. Previously an iPhone was limited to displaying 180, now its 2,130. A folder is created by moving one application over another and naming a folder.

Unified Messaging: The mailbox feature in the iPhone let you set up multiple accounts but each one had to be looked at separately. The unified messaging feature allows mail from multiple sources to be mixed, including supporting multiple exchange servers. The option to have messages threaded will also be supported. Finally attachments to mail can be opened with apps that are resident on the iPhone.

iBooks: The iPad launched this week with a new e-book reader and store called iBook. It’s currently not available for the iPhone but will be as part of OS 4. Now you can get your free Winnie The Pooh book too.

Enterprise: The iPhone is not only a consumer device. According to Apple 80% of Fortune 500 companies use iPhone in the enterprise. OS 4 builds in better encryption, better device management, support for multiple Exchange servers and other features that will make life easier for IT administrators and make them less hostile to the notion of letting iPhones on to their networks. Obviously Apple is going after RIM here. There are many people I know who carry both an iPhone and a Blackberry. As Apple incorporates Enterprise support the need to carry that other phone lessens.

Given the above there was obviously a lot packed into today’s announcement but there still seem to be those with a vested interest in Flash that seem to be grumbling. For example I received an e-mail from Dominique Jodoin, President and CEO of Bluestreak Technology which bills itself as the 2nd largest provider of embedded Flash solutions in the world. Jodoin says, “Until the iPhone supports Flash technology, like most other wireless devices do, and, specifically, many competitive Android-powered devices, it will never offer a complete data services experience to consumers.”

I’m not so sure I would agree. There are 75 million iPhone/iPod Touch/iPad users in the world. Even though an awful lot of content companies use Flash they will be forced to use HTML 5 in order to cater to this large user base. If they start doing that and web browsers also adopt the HTML 5 standard, then developers will start to abandon Flash.

So in the short term while Jodoin may be right, he’s playing defense to Apple’s juggernaut .

My Initial Thoughts on the iPad

I got my hands on an iPad yesterday morning. I had originally pre-reserved one but ended up on a family ski trip over the weekend so a friend picked it up for me.

My 9-year-old son enthusiastically opened the box. After admiring sleek design for a few minutes he summed it up thus: “It doesn’t have a camera and it doesn’t have a phone.” I had to explain to him the rationale of buying a first generation WiFi only version.

My 6-year-old daughter also bounded up the steps to get her hands on Dad’s new toy. Her takeaway: “It’s like your iPhone only much bigger.”

That just about sums up what most professional reviewers had to say about the iPad, but wait there’s more…

Form Factor and Connectivity

The iPad is slightly larger than a paperback book and weighs about 1.5 pounds (I have a 16GB but found that the 64 GB was a bit heavier). It’s also heavier and bigger than the Amazon Kindle.

With these dimensions the iPad is not something you casually carry in your hand as you walk down the street. This is definitely a device that you use sitting down in a chair and consume media.

Besides the bulkiness there is a sense of fragility. I get the sense that phones are designed to withstand a few drops. The feeling I got dropping an iPad was akin to dropping a baby (No I haven’t dropped any of mine) – the horror I felt compelled me to buy a case for it immediately.

When I initially considered the prospect of buying an iPad I was convinced that 3G connectivity would be unnecessary, however I’m beginning to have second thoughts about this assumption. I really got to use it the first time on my train trip to work. As I sat rolling towards NYC I realized that I couldn’t read the New York Times or check my email, things I was used to doing on my iPhone. Even in WiFi hotspots there may be problems. There are some reports circulating about poor connectivity. I experienced this myself at my office in NYC, but that may have been due specifically to the quality of reception in that space. One of the best things about the iPad is the batter life. I used it yesterday continuously for 12 hours and I still had juice left. In contrast my iPhone dies after a few hours of use.

Applications

The iPad is all about the screen. The 9.7-inch LED-backlit IPS display on iPad makes everything pop. Unlike the iPhone I don’t believe that websites need to be customized for this device except to mitigate the lack of Flash support. Regular web sites show up just fine albeit a little smaller.

As for native applications certainly with a larger screen, the UI for many apps can be altered to take advantage of the larger canvas. As such the interface can be made much richer and easier to use.

Although iPhone apps can be used on the iPad they appear in their original iPhone size shape. They can be magnified, but I found that making these larger pixilated the text and you could definitely see a marked quality difference between iPhone and iPad applications. This means that serious developers will have to create separate iPhone and iPad versions, not to mention Android and desktop. That’s a lot of development effort and one that should be rationalized (ie. Publishers should ask themselves

Ultimately the bigger screen size means that the content experience will be richer. One free app that I downloaded, A Story B4 Bedtime, displays children’s stories. The narration is recorded via webcam by parents, and the book and video/voice track are bundled up. (Presumably this is for kids to use when their parents are traveling but I could see publishers distributing versions read by authors.)

Another app that I thought took advantage of the screen was a comic book reader from Marvel. The Hulk and the Fantastic 4 never looked so good backlit.

iPad vs Kindle

I also downloaded the iPad Kindle reader and so I could continue reading Ken Auletta’s “Googled,” which I had started on my iPhone (in sheer coincidence his literary agent was sitting next to me on the train). The larger screen meant I didn’t have to hold the device up to my nose. Apple also has a books app called iBooks. “Winnie the Pooh” is a free download and shows-off the iPad’s superior features.

The first think you notice is that the books available on the iPad can have color pictures just like real books. That’s infinitely more entertaining than page after page of gray text. Second, with a flick of a finger the iBooks reader simulates the turning of a page. No more Kindle flash. Both features make iBooks a much natural reading (and learning) experience.

The multi-purpose nature of the iPad ensures that it is a Kindle killer. The latter is a one trick pony while the iPad is a swiss army knife.

Rafe Needleman of CNET has an in depth look at the issue and feels the opposite, but the shortcomings of iBooks are only temporary and will be bridge by the time the next version of iBooks comes along.

The Takeaway

Even though it debuted at $600 the iPhone was a utilitarian device which exposed millions Americans (and the world) to the notion that a phone could be much more than a phone. In contrast, even with its benefits, the $500 iPad is an expensive toy for the media consumer. It offers convenience and a better experience. It doesn’t necessarily solve a big pain point or create a new need.

However the price point will decrease over the next year, and as it does more and more people are going to buy one to complement their iPhones.

Additionally the bigger market for Apple may exist among the 19 million high school and college students. Once they start getting their course material (and movies, games, and web surfing) on one device that will create a very large user base for Apple