Over the last 5 years Apple have changed the face of consumer electronics. While it could be argued that they have done very little innovation they have sold their products exceptionally well. Until now.
The are showing no signs of slowing down with their sales figures and it is because of this that they constantly flirt with the most valuable company in the world. They are also sitting on a pot of cash larger than $100 billion. A truly uncomprehendable figure. Unless they buy a company valued at that much they probably can’t spend all that cash. But for the first time in many years they are innovating and not catching up with other companies.
Apple were not the first with a MP3 player. They were not the first with a touch screen phone. They were not the first with an app store. They were not the first with an SDK to build on a powerful OS and powerful hardware. However,
They are the first with a marketing campaign like no other, and a screen that is beyond amazing and they are rolling that out faster than any company can count to 2048×1536 pixels. I am sure you have all seen one of their ads, or maybe you live under a rock?
Apple are selling the ipad faster and faster with every generation and the new iPad (3) already accounts for 10% of all iPad traffic in the USA and it is barely 1 month old. That screen in this quantity could cause a problem for landline ISP’s let along mobile network carriers who cry about every single bit and byte that goes across their network. Looking back in history, the iPhone 3g crippled AT&T’s network in America. You can be sure that they all won’t want the same to happen again.
The problem is that in order to “retina” levels of quality on the screen a huge amount of data has to be transferred. iOS apps used to be limited to 512mb in size. The iPad has forced this limit to be increased to 2GB. That is larger than the fair use policy on all the UK mobile networks. A problem for the consumer and the carrier. They dont want you using all their bandwidth, not necessarily for the downloading of the app, but higher res images may need to be transferred when playing a game. The new phones are also increasingly more powerful and server side rendering can deliver more and more data to the phone/pad. It won’t just be the carrier that cries when you get a huge bill through the door for going way over your data limit.
When the iPhone first launched all the carriers gave you unlimited internet because there was no device worth using the internet on. They all also had exclusive rights to sell the iPhone. They had to swamp their network to capacity to get the customers to sign up. That all changed. Unlimited is hard to get, trust me “3” offer it at the cost of your soul and the worst imaginable customer service. I have a 3 month unlimited trial with Vodafone. 14 days in, and 10GB’s down, they won’t be giving that to me permanently.
Apple’s innovation (finally) could be the thing that harms them the most. Carriers will have to make it so expensive to the point of putting people off it, so they can expand their network to cope with the super fast LTE data that the iPad will ship.
Apple now depends on these networks to sell its phones and its tablets. This is the first time that for an Apple product to work they need a 3rd party’s system to work. This removes an element of control from Apple. They need the carriers as much as the carriers need Apple. There is no way that Apple are going to like being in the position. It goes against their entire closed loop ecosystem. There is an intruder in their house and they are going to release the dogs.
I do think there is a solution to this, there is a solution to most things when you have $100 billion in cash and just hit a market capital of $600billion. Part 2 the solution and the new era for Apple is coming soon!