1. Achieve maximum supply volume,
2. Place large enough bulk orders to minimize its component costs, and
3. Sap the global 10″ LCD market of supply so that their competitors in the tablet market are forced into constrained supply situations, preventing them from competing with Apple at the iPad’s price points.

On a personal note, I’d be bummed to be right on this one; while FaceTime is quite spiffy, that Retina Display really is the killer iPhone 4 feature for me.

From the article:

Verizon Wireless is in talks with Apple to distribute two new iPhone-like devices, BusinessWeek has learned. Apple has created prototypes of the devices, and discussions reaching back a half-year have involved Apple CEO Steve Jobs, according to two people familiar with the matter.

Interestingly, the devices are described thus:

One device is a smaller, less expensive calling device described by a person who has seen it as an “iPhone lite.” The other is a media pad that would let users listen to music, view photos, and watch high-definition videos, the person says. It would place calls over a Wi-Fi connection.

This seems to dovetail with predictions made by commenter Richard Monson-Haefel.

I think they’re on-point with respect to the tablet form-factor, as well as the fact that it will certainly be a fabulous platform for media consumption, and the like.

But I just don’t know about this Verizon business. My salt grain here comes from Apple’s insistence that GSM is the way to go for mobile, whereas Verizon’s networks are CDMA. Then again, that comment was in direct reference to the iPhone itself.

See also:

• Audaciously Premature Apple “Netbook” Conjecture
• A Bit of Apple “Netbook” Follow-up

adding the finder would make it far too macbook-ey, and I think they’d want to keep that distinction [from becoming] blurry; neither a macbook nor an iPhone, something else entirely. By that token I wonder if the “hybrid mode” is realistic, since it reduces the need to have a macbook…

Now, I’d given this matter some consideration myself, but I don’t see any real danger of that.

The “iBook” [again, a name I personally resurrected for it] is clearly neither iPhone nor an iPod Touch: it’s not pocket-sized and doesn’t place or receive calls. In fact, as I thought about the iPhone in relation to this device, I wondered if maybe “tether” mode might have as much to do with this new device, as with MacBook users.

With respect to resembling the MacBooks or iMacs, this machine will be comparatively underpowered and simply won’t have the software (read: no iLife). Additionally, there will be a huge difference with respect to display; this new device will likely not offer an external display connector of any sort, either. I believe display size alone may be enough to incentivize a consumer capable of affording the extra cash towards an alternative system.

So, while it’s fair to expect there will certainly be some cannibalization, I don’t foresee it happening to any greater degree than the extent to which the iPhone cannibalized iPod sales, or the iPod Touch cannibalized iPhone sales.

And, as Steve Jobs once himself said: if someone’s going to cannibalize Apple’s sales, better that it’s Apple.

Plus, with as well as the App Store has performed for Apple, I would venture to guess that whatever they might lose in minor cannibalization will likely be more than compensated for on the app sales side of the unit purchase.

Speaking of apps, another commenter to my original post, Richard Monson-Haefel, writes:

It’s my theory – and that’s all it is – that the 10” screen will be a new video platform. Where the iPod came to dominate music players and the iPhone has become a seemingly unstoppable force in the mobile phone industry, the 10” mystery device will be Apple’s foray into a portable video game and video movie players. [...] And I tell you another thing: the 10” tablet is not intended for productivity applications any more than the iPhone was meant for word processing.

I sure have to agree with respect to the media and gaming opportunities on this thing; in fact, I’m willing to wager that games will port over from the iPhone relatively easily (at least as compared with many of the other apps), as they tend to use customized UIs largely based on CoreAnimation and OpenGL.

I must, however, disagree with the argument that a 10″ screen would be unsuitable for productivity apps, as the Eee PC 10″ models—now in its third generation—are performing well with respect to sales (and even sell units with 9″ and even 7″ screens. I’m confident that 10″—particularly with a good pixel density—will be fine for rudimentary productivity needs.

Having a Mac Pro at home, I’d personally opt to trade my MacBook in for this hypothetical hybrid device.

Relatedly, my skepticism about a June announcement may prove overly-conservative, as Apple is apparently taking bids for the manufacture of this device; that’s not something that can happen until all the hardware decisions are locked down.

That said, it seems increasingly likely that Apple will reveal a new product intended to compete in the netbook product space in the near future, with the world largely expecting an announcement at this year’s WWDC in June.

Steve Jobs was famously quoted in 2008 as saying:

We don’t know how to build a sub-$500 computer that is not a piece of junk.

Indeed many pundits in the tech media have criticized Apple’s lack of a netbook offering.

A number of critics have even cited Apple’s absence from this market space as evidence of their inability to recognize market trends, or complete disconnect from the realities of consumer tastes… because there’s no company in the world with quite as poor a sense of trends and consumer tastes as Apple.

But when Apple’s COO, Tim Cook, was more recently asked about whether Apple had plans to ship a netbook, during Apple’s Q1 2009 conference call, he responded:

We’re watching that space, but right now from our point of view, the products in there are principally based on hardware that’s much less powerful than we think customers want, software technology that is not good, cramped keyboards, small displays.

We don’t think people will be pleased with those products. It’s a category we watch, we’ve got some ideas here, but right now we think the products are inferior and will not provide an experience to customers they’re happy with.

While some critics have interpreted Cook’s statement as further evidence that Apple is altogether snubbing the product category, it seems to me instead that Tim is rather simply stating that they’re not competing in that space because they’re working on fixing everything that sucks about the products presently in the category.

And with news that Apple has placed an order for a batch of 10-inch LCD screens from Wintek, it seems like they may feel like they’re on the verge of solving these problems since nothing on their current product line utilizes that screen size.

And so I strongly anticipate a new Apple product that will occupy a slot between the MacBook and the iPhone / iPod Touch.

But what will it look like?

The Speculation Framework

Now, I’ve long been itching to speculate about Apple’s rumored “netbook” product here on Uncarved, so I’m going to sketch out the product that I think Apple should—and, just as importantly, could—make. I’ll keep the sketch within the confines of hardware and software technologies that Apple is known already to have (many of them part of the iPhone OS 3.0 announcements).

I’d also like to mention that the compilation of thoughts that follow have been fleshed out by drawing on various facts, rumors, and ideas from conversations I’ve had with colleagues and friends.

At least, most of the time.

Finally, let me also briefly state that I will be going by the naming framework for Apple’s software stack that I put together last month. Specifically, I’ll be using the following terms: OS X Variant, Desktop OS X, and Touch OS X.

Speaking of names, let’s start by giving this new product a name: iBook.

I don’t want to spend time justifying this choice, but I will simply say that it feels right because this device will be about the size of a book, and because the name iBook is no longer in use (their consumer grade laptops are now called MacBooks). To be clear, I am not predicting this to be the name under which the product ships (though I could frankly imagine it); it’s simply the name I’ll use to refer to it throughout this post.

Product Overview

Unlike other “netbook” computers, I suspect the iBook will not be designed after the laptop-inspired clamshell form factor. I rather expect that iBook will likely be iPhone-meets-iMac.

I don’t think it’s useful to speculate with too much detail on the form factor, but I will make the following hardware predictions:

• This new product will be modeled after a tablet form factor.
• It’ll have the same capacitive touch glass surface the iPhone does.
• Unlike the iPhone, its primary orientation will be landscape, rather than portrait (please keep this orientation in mind whenever you find me talking about what might be “above” or “below” the screen).
• Like the iMac, it will have an iSight above the screen, as well as a built-in mic.
• I can go either way on the “home” button, but for simplicity will predict that the iBook will have one, too.
• No physical keyboard.
• Its only data port will be the “dock connector,” which will be located below the display (remember the predicted orientation”)
• It will have built-in stereo speakers
• There will be a headphone jack that supports the playback controls and mic found on the Apple’s in-ear headphones.
• Ambient light sensors will be mounted somewhere on the front side, to allow the iBook to adjust its screen’s brightness according to room lighting levels.

Before I proceed with what I would say are the more interesting bits of my prediction, let’s take a quick look at the general picture, so far:

But so far, we kind of just have a “big iPhone,” which frankly doesn’t make for a compelling netbook.

The Netbook Value Proposition

The netbook is essentially meant to fill in as a super light-weight laptop. People expect to be able to surf the Web, deal with their email, IM their friends, read their PDFs, take notes in class, and type research papers and/or letters. They might likely also want to occasionally print something they’ve written or found, copy files to or from a network drive, or unload stuff from their digital camera or Flip.

Ideally, the device should have an hours-long battery life, and if the device could connect to the internet over the cellular network, all the better.

Most of all, it’s gotta have a small physical footprint.

Nobody expects to be editing their next feature length film on their netbook, nor to be pwning n00bs in some MMORPG (that’s gamer speak).

iPhones Make Poor Netbooks

There are a number of physical problems to attempting to create a netbook-like device that is simply an enlarged iPhone, since the latter is specifically designed to meet a handheld usage context. Everything about it—from the hardware form factor to the implementation of its touch screen gestural UI—was meticulously crafted to perform in that handheld use case.

Netbooks, by contrast, will see a significantly greater amount of typing activity.

One major shortcoming in this regard for the product I’ve described so far is the anticipated lack of a physical keyboard. While a phone can largely get away with it, such an omission would kill a netbook class device, which are largely intended to be replacements for laptops, and so must live up to writing longer-form material.

Enter iPhone OS’s new External Accessory framework, whose functionality Apple explains as follows:

Using the new External Accessory framework, your application can now communicate with “Made for iPod” hardware accessories attached to iPhone or iPod touch through either the 30-pin dock connector or wirelessly using Bluetooth.

The feature was introduced during the iPhone OS 3.0 media event by showcasing integration with medical equipment (specifically a blood sugar reader for diabetics, accompanied by an app that displayed and recorded its readings).

While that most certainly is inspiringly cool, there’s a much more basic set of devices this opens the door to: a bluetooth keyboard. Perhaps even one with a trackpad-like gestural surface area (more on this later).

But even with a physical keyboard, a tablet-like device would be a pain to use in the library, or at the coffee shop.

Tablets, you see, like to lay on their backs.

This would make it very difficult to look at the screen while typing, as it would require the user to take an uncomfortable position to be able to look down upon it. Holding such a position will become painful before long; something is still missing, so let’s finish painting the picture for the iBook.

The Hybrid Machine

This new iBook will come with a base (or dock of some sort), which will allow it to be propped perpendicularly to a table top surface.

A profile view of the idea might look like this:

Of course, Apple would never ship anything with lines like that. The idea, naturally, is that there would be some accessory that serves this perpendicular mount function for the iBook. In fact, the base may instead take a tripod-like form factor, or maybe even an “arm” that hoists the device (imagine a tiny little echo of an iMac).

Having a dock connector, this accessory would also be able to provide power to the iBook, as well as provide additional ports (say, a few USB ports to connect hard drives and other devices).

Now, imagine a keyboard and mouse on the surface in front of it.

So let’s take a moment to review what’s been concocted thus far. The iBook will be a tablet form factor device with a touch screen interface, allowing people to surf the net, check their email, and apply the finishing touches to their term paper on the subway ride to class, or while soaking up rays before class in the quad.

When a more conventional surface is available, its users will also be able to cradle it on a dock of some sort, along with a keyboard.

The Software

Naturally, this new device will be running some OS X variant. Because of the consumer success of the iPhone, I anticipate this product will offer a Cocoa Touch for its user interface. Apple’s touch interface implementation is particularly well-suited to devices with smaller screen sizes, since it has obviated the need for many conventional types of UI controls like scroll bars (to navigate a document), magnification sliders, next / previous buttons, and others.

Fewer pixels devoted to such UI controls leaves more pixels on the screen available to display the content you’re actually engaging with: photos, a web page, the powerpoint attachment in the email your boss sent this morning, or the blog post you’re writing.

With the expected 10″ LCD screen size this device is expected to have, every last pixel of screen real estate will count.

That said, the iPhone OS—as is—exhibits a number of shortcomings when examined as a prospective solution for a netbook-like device.

A Pain in the Neck

If I’m correct about this “table top” mode of use, however, there will necessarily need to be some differences—or, at least some additional interaction modes—in the iBook’s touch interface implementation, because prolonged direct-to-screen gestural interactions with the device in this mode will result quickly in fatigue and muscle strain.

Try it yourself. Extend your arm towards your screen and hold that pose for 30 seconds. It’s tougher than it initially seems, isn’t it?

Frankly, I’m not sure how Apple would solve this. Perhaps some of the more basic gestural interactions (swiping to scroll, pinching to zoom, etc) can be implemented by including a trackpad-like touch surface on the keyboard, much the way it’s been implemented on modern MacBooks trackpads.

Multitasking

Another departure from the iPhone user experience that I’m expecting is for this device to be capable of running multiple applications concurrently. This is something that the iPhone currently does not allow for third-party applications, due to concerns over battery life. Because the device will be larger, however, I expect that Apple will be able to find the internal space to accommodate a large enough battery to work around this concern.

In any case, I suspect that any product designed to compete in the netbook category cannot be without this capability.

But if that’s the case, it’ll need some sort of mechanism to allow its user to switch between applications. Desktop OS X has the Dock and the application switcher (triggered by pressing ⌘-Tab).

It Looks Good, But It Feels a Little Tight

As I’d mentioned in an earlier post, I had been strongly expecting the announcements made during the iPhone OS 3.0 event to reveal a collection of features that screamed: Hey, this will be running your next netbook!

But Apple has a record (and talent, really) for delivering extremely clear messages.

Instead, Apple (wisely) focused on framing the iPhone as the baddest smart phone in the market, and iPhone OS as the best software platform for mobile phones. They delivered long-awaited features such as robust system-wide cut and paste, undo, landscape mode for apps like Mail, voice recording, cross-application search, a third-party device API, and in-app purchasing capabilities, to name a few.

But there were no overt hints at netbook-like features in iPhone OS 3.0.

On the other hand, every one of those features does also have potential utility in the context of a netbook platform.

What’s largely missing from Touch OS X, really, is some way to switch between applications that are running concurrently; relaying through the home screen is just too clumsy a solution for copying text from a web page into the essay you’re writing, or jumping into your IM application to answer your friend.

Well, that and a non-modal notification system of some sort.

The Right Touch

Now, I’ve already long since abandoned caution in my predictions so far, so I’m going to just commit to the reckless abandon and predict that there will be a new OS X variant introduced with the arrival of the iBook, which will be another form OS X Touch.

With that, I present a revised summary of OS X variants, as follows:

• Desktop OS X (Macs, iMacs, Macbooks, etc)
• Touch OS X
  • Handheld OS X (iPhone, iPod Touch)
  • Tablet OS X
• Media OS X (Apple TV)

Apps

I don’t expect apps written for the iPhone to work on the iBook (or vice versa). I am, however, expecting that iPhone developers will have a greater head start on writing apps for this new product than Desktop OS X developers.

I believe that Apple will create a separate iBook App Store, but not immediately.

Pricing

The final consideration I’ve yet to address is the price; the majority of the netbooks presently on the market are all priced below $500. Certainly this device would have to sport a competitive sticker price.

Frankly, I have no idea what it’ll cost.

I can, however, point to the fact that the component technology would be the same as in the iPhone. The device itself wouldn’t need any more equipment than it’s got (and doesn’t even frankly need the 3G antenna and associated chipset).

The iPhone itself retails for $599 and $699 US without a plan (and therefore without subsidy by AT&T), which is a reasonable starting point for inferring the potential price of such an iBook. Part of the cost for its components comes down to size: “tiny” is expensive; you can be that Apple’s paying a bit of a premium for it.

Given that a larger device offers more interior room to play with, it’s reasonable to assume that Apple can find comparable larger components at a cheaper price point to help drive down material costs.

But then the screen is larger, and they may decide to spring for a little extra juice.

It’s really hard to tell, and Apple will likely offer one or two different models, at different price points, but it’s not tough to imagine that they may be able to land in an appropriately competitive price range. Plus, if Apple does decide to include the 3G hardware, they could leverage the opportunity for subsidies, and land this thing at $400 US, like Orange is attempting to do with MacBooks in the UK, and AT&T is doing with the Acer Aspire One.

Wrap Up

So that’s it. I’ve basically described the product I wish existed, and that Apple could build with the technologies it already has in place; one that occupies the slot between iPhone and MacBook Air.

We all know that whatever Apple does ultimately announce will end up making the product I’ve described utterly pedestrian; that’s just what they do. This has definitely been fun, though.

To review, I’m betting Apple’s upcoming netbook product will have a tablet-like form factor, offer purely gestural and touch-based user interface for “on the road” usage contexts, offer a more iMac-like experience in table-top usage contexts (with the addition of a dock to allow it stand vertically, as well as a bluetooth keyboard for extended typing sessions). It’ll run a modified Touch OS X, largely resembling that of the iPhone OS, but with additional capabilities to offer application switching and improved notification capabilities.

All that’s left is to wait and see.

21 Apr @ 21:26: I’ve posted a small follow-up, after some feedback from friends and readers.

This is the first product coming to market that will be competing with the design of the iPhone.

The rest—including the T-Mobile G1, featuring Google’s Android platform, the BlackBerry Storm, and any number of other handsets from Nokia to LG—are merely “Hey, I’ve got a touch-screen, too! Buy me!” products.

I’ve frankly chosen to look past the argument the Android platform represents something much larger, and with deeper and brighter promise than anything merely available in the G1. The future promises of a technology or platform is not a matter I’m going to mind when considering what the current incarnations of the technology offer. Frankly, the only people even looking at that platform are developers and gadget geeks. By and large, consumer reception to the G1 has been luke-warm, driven by consumers that don’t like the iPhone or love Google.

The Pre, on the other hand, demonstrates an effort to replicate implementation details that work from the iPhone, and a thoughtful attempt to improve upon those things in a smart way.

The three things that have me most excited are:

1. the extensions and enhancements to the gestural UI implemented for the device,
2. the “deck” multitasking metaphor, and
3. Synergy, the Pre’s framework for interconnecting the all your data.

Synergy is the most exciting part. In fact, I believe that it’s the one feature that should most concern Apple, provided—of course—that Palm actually pulls it off properly.

But what exactly is Synergy?

Ars Technica published an article describing it back in January. From the article:

Users just make changes to their data (contacts, calendar, mail, etc.), and Palm’s webOS handles committing those changes to whatever canonical data source it is accessing in the cloud. And herein lies the most important difference between the webOS and Apple’s iPhone OS: the iPhone was originally designed under the assumption that the canonical source of a user’s data (contacts, calendar, music, tasks, etc.) is [their computer]. Palms webOS, in contrast, presumes that cloud-based services are the canonical source for your data…

Looking at someone’s contact information in the address book, you might see their phone number, three email addresses, an AIM screen name, Facebook profile URL.

Although you might largely be able to see this information on someone’s contact info on your iPhone, the information in the Pre’s address book has likely been pulled together from a number of different sources on the network. Your contacts were loaded from your GMail address book, Facebook friends list, and AIM buddy list. The key is that Synergy needs to be smart enough about figuring out who’s who, in order to properly merge the details of your friend, Kevin Smith, who appears both in your GMail adress book and Facebook friends list into a single entry in your address book.

But the idea behind Synergy is that it’s access to this data is meant to be bidirectional. That is, once you update Kevin’s email address on your Pre’s address book, Synergy would then update his address on GMail, etc.

But Synergy isn’t just for contacts.

It can manage events, too. Check out the demo in this video from Mobile Crunch, wherein the presenter is showing off and talking about the Fandango app in development. Like the website, the app’s purpose is to allow people to buy movie tickets to movies they’d like to see.

The statement that floors me occurs at 00:47:

One of the things they did interesting on it is: once you purchase a ticket, it’ll actually make a meeting request for you. So, it’ll go into [the] calendar that I have a ticket to go to the show at this time, and I can actually invite other people with that…

And you can bet that if Synergy is pulling your calendar data from your Google Calendar, the new event will show up your Google Calendar next time you login from your computer. Can you picture how this could work for concert tickets? OpenTable reservations? Travel itineraries?

Now that’s some serious wu wei.

If Palm gets Synergy right (and assuming they don’t bomb on the hardware or battery life), their Pre is going to give Apple’s iPhone a serious run for its money.

While technically managed to I land a 50/50 hit rate on my specific feature predictions, I had predicted that — when all was said and done — today’s announcements will have revealed features that declaratively positioned the iPhone OS as a capable netbook OS product.

Specifically, I was really expecting the application switcher, so I was a bit bummed.

In retrospect, however, this doesn’t conform to known Apple announcement behavior. Neither to their secretive practices, nor to their marketing talent for focusing with razor-sharp clarity on a particular message.

Today was about the product they have on the market: the iPhone.

The announced features all basically add up specifically towards making the iPhone a better smart phone.

That said, many of the features announced today will certainly contribute towards a wonderful netbook product. I’ll discuss which ones in a later post — stay tuned.

18 Mar @ 01:26: After having personally watched the Spotlight demo portion of the video, I’m going to actually award myself a half-point on the arrival of a new application launcher; Spotlight’s search results lead with apps whose name contain the search text.

Rather than get carried away nitpicking on specific features that will or will not be announced, however, I will instead offer a prediction about what I anticipate to wind up being the the common thread to them; their long term purpose.

My prediction:

Apple’s 17 March 2009 iPhone OS 3.0 event will essentially announce a collection of new capabilities that will largely aim to position the OS as a suitable for use in netbooks.

I’m wagering that iPhone OS 3.0 is to iPhone OS what Snow Leopard will be to Mac OS X. In fact, I’ll even bet that the brunt of the development that will ultimately ship in Snow Leopard will ship first in iPhone OS 3.0.

From the Snow Leopard product page:

Taking a break from adding new features, Snow Leopard — scheduled to ship in [2009] — builds on Leopard’s enormous innovations by delivering a new generation of core software technologies that will streamline Mac OS X, enhance its performance, and set new standards for quality. Snow Leopard dramatically reduces the footprint of Mac OS X, making it even more efficient for users, and giving them back valuable hard drive space for their music and photos. [Emphasis added.]

Streamlining the codebase of the OS and reducing its footprint are admirable goals for any desktop OS, no doubt — bloat anywhere sucks — but as of this writing, there are no Macs that ship with a hard drive smaller than a 120 GB hard drive, or with less than 1 GB of RAM. These pursuits, however, really become a critical when you’re looking to use that OS to run on smaller mobile devices that have dramatically lower hardware resources to offer than a desktop or even a laptop.

We already know that Mac OS X and iPhone OS share significant parts of their code base, and offer many of the same developer APIs.

With a release date currently expected for this summer, little stretching of the imagination is necessary to expect this iPhone OS release to indeed include the majority of the optimization efforts that will ship with Snow Leopard.

So what does this mean with respect to the features that will be announced tomorrow?

For one, I’m pegging a system clipboard as a certainty. Not because there seems to be strong consensus on the internets [sic], nor because the writers of countless blogs, forum posts, and comment threads have been moaning about its absence, but rather because it would be a glaring omission from a netbook.

I’m also wagering that rumors of the ability to run multiple applications concurrently will pan out, again because a netbook would need it.

Finally, I’m anticipating — albeit with less conviction — a new application launcher, because Gruber’s right; the UX for organizing apps has totally become a pain in the ass, once you exceed three or four screens of icons.

But even if all these features are useful in a netbook, why should Apple necessarily decide to develop and ship them now?

I can think of two reasons:

1. the release cycle fits, and
2. competitors on the horizon

The release cycle is an important consideration. First, as features go, these are each ones that — as a software product manager — I would certainly decide to schedule into a major release cycle (eg, a “something-point-oh” version). Since Apple are clearly attempting to consolidate their engineering efforts behind the Mac and iPhone versions of their operating system software, there seems to be enough evidence to imply that they’d aim to synchronize their release cycles, as well.

Apart from production planning and resource coördination concerns, it’s important to remember that some seemingly formidable competitors to the iPhone are about to hit market. One that is likely to have Apple genuinely attentive is Palm’s Pre.

Being that Apple is unlikely to pump two major releases of the OS out before the Pre ships later this year, I’m wagering that they will attempt to ship (or at least announce) these features with 3.0.

I’m also expecting that we’ll see some features that are more focused on iPhone’s “mobile phone” user experience, which is why I’m also going to buy into the scuttlebutt that cites MMS as a likely inclusion. Although it’s less interesting with respect to the platform, I — and countless others — will certainly be glad to be rid of having to deal with AT&T’s awful viewmymessage.com site.

So, that’s it! Let’s see what the heralds of Apple will announce tomorrow morning.