Among some other things that really caught my ear, however, was one thing Steve said that I haven’t so far heard anyone else really pick up on: at about the 1:33:30 point in the video, talking about FaceTime, he made a very bold statement that Apple would sell “tens of millions of FaceTime devices in 2010.”

Note the use of the term “devices” rather than “iPhones,” or even “iOS devices.” What did he mean by that?

Of course the iPhone 4 will do very well, but I don’t think it will sell “tens of millions” of units in six months. The iPad cannot (at present) do FaceTime either, so that’s out, and while a new iPod Touch in time for the holidays would hardly be surprising, it isn’t going to sell tens of millions either.

In fact, if you added up all the anticipated sales of iPhone 4s and iPod Touches, you might get well over 10 million, but still not “tens of millions” of units.

Oh, and this doesn’t include retrofitting all the Macs out there with Facetime via a software update either. Steve said Apple will sell tens of millions of units.

But even if you throw in let’s say 6 million or so camera-carrying Macs that Apple will likely sell in the next six months, you’d still be (in my opinion) lucky to move much more than 20M units, and that’s not really enough to qualify for an expression like “tens of millions of units.”

Thus, my speculative conclusion is that Apple has more coming, and whatever it (or they) is (or are), it (or they) have cameras.

A new iPad, for example, most of you are thinking. Maybe, but I just don’t think so. Not this year. Not with them selling so incredibly well right now.

What else could Apple be talking about that they are so sure will be a hit, so revolutionary and irresistible that Steve feels comfortable they will be able to make, let alone sell, millions more units than have already been (speculatively) accounted for? That developers don’t even know about?

To my way of thinking, it would have to be something inexpensive and aimed at the mass market. Probably something that the public are already familiar with but will now have a high-quality camera and internet connectivity added to it. Or possibly something totally new, but if I were a betting man I’d say we should look for a totally revamped iPod lineup later this year. What else could move tens of millions of units in six months?

Man if this keeps up I’m-a gonna need a second job!!

As the trolls, nay-sayers and Apple-haters’ initial wave of “I fear what I don’t understand” type rants have faded away, they’ve been replaced by comments much more insidious IMHO: the dismissive “it’s just a big iPhone/iPod Touch” comment.

Well, first of all, saying that like it’s a bad thing is fairly ridiculous. The iPhone/iPod Touch products have been huge successes for Apple, jacking up their already-high reputation with the younger demographics, increasing sales of Macs, and making Apple a ubiquitous presence in all walks of electronic life (not to mention throwing a few sheckles into Apple’s already-sizable coffers). Now that they’ve been out for a few years, I notice also that the older crowds are really starting to pick up on them as useful entertainment devices as well.

But the iPad is not just an iPod Touch “for people with fat fingers” or “for the nearly blind” as I’ve heard in some of the more snooty posts I’ve read. It’s a great deal more, which is why publishers and developers are so incredibly excited about it. Read on for 12 more reasons why the iPad moves into its own space and adds up to more than a Reader’s Digest Large Print Edition of  the iPod Touch.

1. Certainly the iPhone/iPod Touch and the iPad have a lot in common, starting with similar-looking hardware. When its switched off, and perhaps to some even when its first turned on, the iPad just looks like a big iPod Touch. I grant you that. But starting right with the lock screen, which doubles as a large, beautiful digital picture frame … the iPad shows off how its going to be different.

2. The thing is — it won’t be used as “just a big iPod Touch.” Because of its larger size, it brings an entirely new dynamic to the multi-touch screen. On an iPod Touch, your finger takes up (and effectively blocks) about a third of the screen, meaning that what you are able to do with it is limited. On an iPad, the bigger screen makes the influence of your finger at least 4x more accurate, which opens up a lot of possibilities in software that just cannot be done on an Touch. Gestures that would be awkward on the iPod Touch can be accomplished on the iPad. iWork on the iPad is just one example — that same app would be utterly impossible to use on the iPod Touch. Likewise the revised Mail, Contacts and Calendar. It’s not just more screen space, its the freedom for developers to take advantage of what the iPad brings to the table.

3. Likewise, the new processor (at least 3x more powerful than the one in the iPod Touch) means, at least for a while, that a lot of functions and power in the iPad can be leveraged in ways you cannot manage on an iPhone. We’ve only seen a bare hint of that power in the demos so far, but I did notice for example that Google Maps and video player were far more responsive than I’ve seen on my iPhone, suggesting that Apple has added dedicated onboard components for specific jobs (like decoding H.264) that you can’t fit in a Touch. This too will be documented to developers and exploited, resulting in apps that could actually require the iPad’s architecture — like this new version of iWork — and don’t run on iPhones, Touches … or even Macs! Think about how the iPhone went for seven months without any apps other than the ones Apple included, and the App Store was not an overnight sensation. Think Apple won’t pull that rabbit out of the hat again for the iPad?

4. You may not have noticed it, but Apple barely paid any attention to the iPad’s built-in iPod features. Why was that, if the iPad is just a big iPod? The reason is because although it can play music, that will almost certainly be the least used of its main functions (not counting playing music in the background while other apps are running). This is Apple’s first totally new product in a very long time that didn’t have music as its main focus. This is because the potential of the iPad far outweighs the (now realised) potential of the iPod Touch.

5. Though we have only seen a demo of it, it’s already pretty clear that reading a book on the iPad will be a hugely different experience (not just “bigger”) than it would be using (say) Classics on the iPod Touch. They didn’t go into it, but iBooks is likely to have features normally found on the Kindle rather than just the same feature set of something like Classics (which, incidentally, I love) running pixel-doubled.

6. The social aspect will be sooo different with this product. Let’s say you were surfing on your iPod Touch, and found a funny LOLcat picture you wanted to show your wife, sitting on the other end of the dining room table. Or a great YouTube video you wanted to show everyone in your living room. With an iPod Touch, you have to either hand the device over and let it pass round the room, or everyone has to be within a foot of you. It’s kind of awkward sharing things with someone else, even those very close to you. With an iPad, you just flip it over, and everyone in the room can see it (and probably hear it if they’re quiet). Or anyone sitting next to you can enjoy what you’re watching exactly as well as you can. The iPad isn’t just bigger, it has an entirely different and much higher-quality screen on it than the iPod Touch does. Don’t underestimate how this factor will change how people interact with it, or the impression it will give others in terms of a desire to buy.

7. Built in mic means that Skype, IM, voice recorders and other such voice apps don’t require a headset mic to work (though of course you have that option). Very nice.

8. Real, full Bluetooth 2.1 + EDR that supports lots of different kinds of devices (including, according to Apple, any kind of bluetooth keyboard). Can’t get that from a Touch either.

9. Connecting it up to a projector. Ever since the iPhone came out, I’ve been wanting to hook it up to a projector and run a Keynote (or PowerPoint, I suppose, if you must) slideshow. I can use the iPhone as a remote, sure, but I still needed a laptop to create and run the actual slideshow. Not anymore I don’t.

10. It may not fit in a pocket, but it does fit rather perfectly in a folder, a notebook, a knapsack, a purse, a briefcase — even Stephen Colbert’s tux!  It’s just so much more portable than a laptop, and (perhaps this is a big YMMV thing, but) I don’t tend to do much “computer” work when I’m away from my workdesk, I tend to want to do more “relaxing/recreational” things; surf/email, read a book, chat, play a game. Perhaps a little bit of writing or tinkering with a slideshow. That’s what I tend to do when I’m in a coffeeshop, and that’s why I don’t bring my laptop to coffeeshops much anymore – because the iPhone can do most of that. But even when I do have my laptop with me, I still tend to do that “light” stuff when I’m using the laptop in waiting rooms, airports, airplanes, ferries (etc), probably because I know my time in those places is going to be limited (at least, I hope so!), so I tend to want to do either short-duration tasks (catch up on my “to-do” list for example) or time-killing exercises (“Die Zombies! DIE!!”).

The iPad truly does mean I can leave the laptop behind almost 100% of the time, and perhaps even trade it in towards a bigger and more powerful desktop for the home. As I mentioned in my previous post, because I’ve needed a laptop for all the presentations I do, and only wanted to keep one machine in sync, I felt constrained to only own a laptop – but the iPad frees me up to make my “home” computer anything I want, and reduces my dependence on a bulky laptop down to the point where I might not need one at all! I like laptops, but I also like freedom and options.

11. Seniors and other non-nerds would love to own a zero-configuration, zero-maintenance computer that’s actually large enough for them to see. You kids of today with your sharp eyesight (grumble grumble) can do most of that on an iPod Touch, but people of a certain age need something a) more accurate and b) larger than that for us to use it the way a teen might use the iPod Touch. Not just bigger, mind you (we’re old, not blind!), but bigger and more accurate. I promise you this much — middle-aged and senior non-nerds are going to eat this thing up, and this is the exact same group that is generally pretty “meh” to the iPhone and iPod Touch.

12. Lastly (at least for now till I can get my hands on one), that dramatically longer battery life will make a huge difference in how its used. At least IME, the iPhone and iPod Touch crap out pretty quick with sustained use. The iPad’s claims haven’t yet been really tested, but Jobs indicated that with “normal” use (let’s call that “using the apps it ships with” for arguments’ sake), it should last all day. This means the iPad represents more freedom than an iPhone or iPod Touch can generally give me, allowing me to further divide my “real computer” tasks from my “on-the-go” tasks. I could see a lot of people basically leaving the iPad on the coffee table or their nightstand almost all the time, using it as the “den computer” or the “bed computer” so they can spend less time at their “desk” and yet don’t have to lug so much “equipment” around to achieve “mobility.”

When the iPhone came out — when the iPod first came out — its spec sheet really didn’t make it stand out from its competitors at the time. In the case of the iPod, it really took about three years and three generations before it dominated the industry. The iPhone did it quicker, but still did have that seven-month period where it was very unclear if Apple would even meet its first-year sales goal.

But look at how fundamentally both products changed — and the success they enjoyed — over time, even without huge changes in hardware (the iPhone has essentially the same feature set and hardware today as it did when it came out 2.5 years ago!). I think the iPad is a continuation of Apple’s recent trend in making hardware that is in itself not full-featured (the aluminum keyboard, the magic mouse, the iPhone etc) but really shines once you add in the software. I have no reason to think the iPad will not stand apart from its iPod Touch “cousin” more fully as the rest of 2010 goes by.

I now think the question of ultimate success may come down to who can provide a better on-line marketplace for things that can be downloaded.  And that requires defining how to compare marketplaces, especially digital marketplaces for digital goods.

Some thoughts on a good marketplace:

- large base of suppliers to make the goods

- efficient transport of goods

- efficient & secure exchange of money for goods

- large base of consumers to buy the goods

- effective means for consumers to consume the goods (computer devices for digital goods)

- builds and retains high consumer and producer confidence and trust

A financial specialist can add a lot to the list, I’m sure.  And when I say “efficient”, I include quick, low-cost, and easy-to-use.

Did Apple succeed in an mp3 player market by competing better in all the same old ways?  Apple’s products cost MORE. They usually had less storage capacity. Apple actually delivered fewer features.  What Apple did have was a better marketplace for the digital goods that customers consumed with the Apple’s products.  (Example: 99 cents for the one song you wanted, not $18 for the whole CD, and you get it now, with one-click.)  Customers have shown us their opinion of that value proposition.

Did they succeed in cell phones by competing on the same terms as everyone else? The iPhone was expensive, even for a smart-phone. It did have that nifty voicemail trick to go right to the one you wanted.  And it was an iPod, albeit a low-capacity iPod.  But it had always-on access to the song marketplace and a need to make sound to announce calls.  It extended the marketplace to songs-as-ringtones and extended the sales opportunities to include the consumers’ musical whims. Need a song to fit the current mood?  Heard a cool song on the radio and want to buy it?  Apple made a deal with the trendy Starbucks company to allow their Macs and iPhones to make free wifi connections to iTunes and not only buy songs, but see a display that could let them know what song was playing in Starbucks at that moment.  The current-song feature no longer works, and apps can recognize music for you, but you can still connect to Apple’s marketplace for free in a Starbucks.  Starbucks still distributes free-iTunes-song-of-the-week cards.  Perhaps it is no coincidence that AT&T now powers Starbucks’ internet in place of T-Mobile.

Apple further extended their marketplace with big-name TV shows and Movies in conjunction with an iPod Video.  In another move, they extended their audio marketplace by adding audio-book and talk-show content from “Audible.com” This partner enjoys continued success and expansion of its product line. Inclusion of such extremely long audio content caused some problems in the iPod players, but Apple upgraded the software to fix them and customers continued to buy.

The NeXT extension to the marketplace: inclusion of software to subscribe to the new audio category called “Podcasts”.  Now large amounts of totally free audio programming is available to marketplace customers.  Most of these programs were shows with too narrow an audience for radio broadcasters, or were too time-sensitive for traditional physical distribution or were just experiments by enthusiasts.  But many podcasters have succeeded financially.  Some now have audiences that radio shows would envy greatly.  Since some podcasts send video, that expanded Apple’s video marketplace.  And all Apple did for these podcasters and consumers was make it easy to find, subscribe, download and listen..  The audience for podcasts exploded. The number of podcasts grew (and continues to grow). Audio professionals have a whole new industry. Apple never spent any money to distribute the shows.  Apple did introduce a means of putting images and chapter markers into audio shows. Now an Apple device can show a picture on the screen at the show’s direction. A consumer might see the topic of discussion. The chapter markers allow a consumer to jump around a long show more easily.   This was, in a way, a first test of doing large amounts of business with small producers.

Now consider Apple’s extension of the marketplace to include Apps for the iPhone. Apple reportedly gave up the deal that netted a percentage of AT&T’s large monthly fees for iPhone data service. Apple opted instead for control of the App sales in their marketplace instead.   This marketplace has new wrinkles: a very large number of very small producers making very large numbers of very small transactions.  It started out slowly and had a lot of growing pains, but Apple basically built a means of making a large number of deals with a large number of small developers to sell their low-priced apps for a 30/70 split. Unlike the free podcasts, Apple helps deliver the free apps to marketplace customers.

Putting aside the gold-rush urban legends, the real question is “did those producers find the marketplace a good deal?”  App developers chafe at some of Apple’s rules and restrictions.  But do many profit well? Even after Apple takes 30%?   Do customers do well?  Are they paying more or less for the goods they buy? Do they get more value or less value?  Does the system build and retain trust of both?  The answer is apparently “Yes”.   But consider this: Apple does not dictate price in the App marketplace.  And yet the prices have continually gravitated toward the minimum of 99 cents.

An upcoming question: If a similar marketplace is created for book authors and musicians, would they prefer it over traditional publishing/distribution companies?  (Some books are already sold on the App Store as Apps.) Maybe not for the authors of books with large mainstream audiences.  But what about all the others?  The books that would barely rate a “yawn…OK” from a traditional publisher?  Books with a niche market?  Books that are enjoyed, or are good references, but not convenient to keep around in paper?  (High School and college book-bags can get really heavy.)

For producers of any kind, 70/30  may look a lot better when you recall that transaction and distribution costs comes from Apple’s 30% (and the $100 annual fee), not the producer’s 70%.  For small producers, the work Apple does for the money may be indispensable. Recreating the infrastructure, marketing and financial deals Apple has would be impossible.  And thousands of very small modest marketplaces are not as interesting as one big, really good marketplace.  And who makes things easier to use than Apple?  Also,  Apple actively markets the devices and even picks some Apps for inclusion in their TV commercials.  I’m told those lucky apps gain large sales, but none of them had any influence in their selection.  (Agreeing to let them do this is part of the contract to get a developer account.)

Its possible there is still much for the world to learn about building and running a successful digital marketplace. Most business practices are based in lessons from producing, delivering and selling  physical goods. Still, the trust and confidence issues may prove to be the biggest frontier.  Can producers trust the marketplace?  Will Apple raise their cut? Will Apple make restrictions that are too tight? Will producers be put out of business by out-of-control copying?  Can consumers trust it? Are they safe from rogue producers?  Will their purchases be worthless if something happens to Apple, AT&T or the producer or the deals between them?  Will the purchase be worthless if a particular device is no longer available or a system upgrade is incompatible, or a new device takes over?  Will Apple or the producer simply decide to take it back? (Remember Amazon’s “1984″ take-back from Kindles?  Perhaps this is why DRM-free music sells better?)

To get back to the iPad:  while it is new and unproven,  it ships with a considerable, ready marketplace. It does something to expand that marketplace by being a consumption device with more screen size and cpu power.  It expands the ability to consume the goods. Its connectivity will make the opportunity for sales larger by making the marketplace available at the consumers’ whim (heard that song in the restaurant, bought it;  thought there might be an App for that, bought two; didn’t have to remember to find it on the home computer later on.)  Indeed, the connectivity and power mean that a separate computer is not needed to access the marketplace. Access to the marketplace is easier and cheaper than ever since setup for 3G internet access can be accomplished on the device itself, requiring no long-term contracts for subsidies, no intervention or assistance from cell-savvy personnel,  no activation with a desktop computer (like EVDO modems). AT&T might opt to sell them with subsidies and contracts, but options are now available.

An interesting twist on consumer trust and value propositions in a digital marketplace: ownership is not necessarily tied to possession of a physical thing.  If someone steals your iPod, you still “own” all the goods you’ve purchased (Apps, songs, books).  You can put them right back into use for the cost of another device. You can’t say that for a CD in a CD-player.  And really, which investment is usually bigger? The songs or the player?  The computer or the software?  The games or the game system?

Chas

At this writing I haven’t had a chance to view the video of the keynote yet, but I’ve heard the audio and read all the news sites and the many Mac forums I monitor.

The reaction, at least initially, reminds me a whole lot of what we got from this same community regarding the iPod at the time of its introduction. Which is to say “mixed opinion,” followed by historical revisionism as the mainstream decided (slowly) that it was actually a pretty awesome product.

As I listened and read, I too had a mixed opinion about this thing: I liked many of the ideas, but some things seemed to be missing, and I wasn’t sure that there was a place in my power-user’s life for one. I did think and do think that this new product passes the “Grandma” test in a whole new way and may well prove to be a big hit with normal people, book lovers and educators. It may even be revolutionary (starting with killing off the Kindle, the Nook and so on — what staggeringly awkward and primitive failures of imagination those products look like now).

Then I thought about it some more. Second impression — oh dear, I may just have to give Apple even more of my money.

As I’ve gotten busier, I have allowed all my magazine subs — including some of the Mac mags I used to write for — to disappear. I barely read magazines anymore, despite enjoying them. Ditto for newspapers. The iPad would make this much easier for me to do, particularly when I’m lounging in a coffeeshop/airport (or at home for that matter!). If I had spare cash, I’d be spending it on Starbucks stock (or any other chain that is also an AT&T wifi hotspot) — I think business will be booming in a few months. Imagine being able to buy any magazine every published — even back issues — for a modest price and start reading them instantly. For me, at least, the doctor’s office will never be the same again.

If the AppleTV is the “den” Mac, and the MacBook/MBP is the “on the go” Mac, I think the iPad may be the “La-Z-Boy” Mac. I can certainly see myself enjoying it greatly in such a chair.

I’ve also been enjoying Classics on the iPhone, but have been very hesitant to get into eBooks properly. My wife has a Kindle, and it’s … okay . The iPad, on the other hand, has real potential for eBooks (particularly that they are using the ePub format — very smart), magazines, comic books (sorry, graphic novels), and even other written formats. Finally, I can invest some time and money into Canadian mags I’ve been wanting to check out!

So yes, I think this will inject new life into newspaper and magazine-type publications, and open the field to new voices (desperately needed, particularly on the political and investigative journalism fronts). That part, I think, I think will be revolutionary. Heck, its only been out a few hours and its already changed the eBook publishing industry, particularly when it comes to pricing.

A second example: I am typing this to you on an extended keypad attached to my BlackBook. Some years ago, I got tired of trying to keep a laptop and a desktop in sync, since I give a lot of public presentations. So I went all-laptop, and built myself a little base station here at home that the laptop plugs into. So now I carry a laptop with me on every airplane trip, carry the laptop on every presentation (and hope there’s working wifi where I’m going), carry the laptop on the ferry rides to Seattle or Vancouver. The iPhone has turned out to be quite good in a lot of these situations, allowing me on occasion to go without the laptop, but it’s never been sufficient for me to leave the laptop behind when I had any real work to do — particularly since the main reason I travel is to do presentations, which like the lackadaisical schoolboy I used to be, often get, er, “revised” on the way to the gig.

The iPad + iWork changes that very significantly in several ways:

• I can do “real work” on an iPad, whereas on an iPhone that’s all but impossible. Porting iWork over to the iPad was a stroke of serious genius.
• The 3G option makes it possible for me to have internet almost anywhere, which will be a godsend to my presentations when wifi isn’t available. The minute I heard you could hook an iPad to a projector, I was almost totally sold. This is a game-changer for road warriors, educators, and maybe even students.
• The greatly increased battery life means I can be away from my “base station” for a lot longer, but do almost everything I need to (including Back to My Mac if I need it). I don’t need to lug a “real computer” around with me at all anymore. My “real computer” can stay at the house, which means I can get a better/more powerful “real computer.”
• 9.7″ screen = easier on my aging eyes. There, I said it.
• Bigger than an iPhone, but still able to be used usefully in coach seating. Try that with a regular laptop. HAH!
• As Steve said (and I fully concur) … beats the crap out of a netbook for most things. Amen.
• Assuming (hehheh) that Rogers (our Canadian primary 3G provider) goes along with some similar pricing for an unlimited data plan a la AT&T for the thing … I think that will cause a revolution in its own right.

The Apple iPad

So, whereas yesterday I had been thinking about whether I wanted to finally upgrade to a 13″ or 15″ MBP, today I’m thinking my next computer(s) will be a 27″ iMac at home (I have really been wanting one, but couldn’t justify it because of my need to do presentations) and an iPad for the road. Much easier to sync, particularly for me as a MobileMe member. Much lighter. Does pretty much 100% of the things I would want to do on the road. I can have 3G when I need it, for a very reasonable price, and not pay for it when I don’t need it. No contracts, no ongoing mandatory expense. Fantastic battery life. Beautiful LED backlit IPS screen. Large (albeit virtual) keyboard. All my favourite iPhone apps.

There are a few other things I could have wished for, and the first one that came to my mind was a mic. Turns out it has one, along with speakers (just wasn’t mentioned in the keynote for some reason). This means I can use Skype. With Bluetooth, even. Sold!

I would have paid extra for a model with an iSight in it, and an iChat app. It would have been really nice if it had at least one in-built USB port instead of making us buy and use a little dongle, but OTOH now that functionality will (probably) be available to the iPhone/iPod Touch as well, which opens up all kinds of interesting possibilities.

So the thing’s not perfect. But it’s highly, highly intriguing. I think I’ve found a place for it in my life, mostly near the couch.

Still, I have little doubt that third-parties will plug the little gaps in short order, and as Jonny Ive said “there’s no wrong way to hold it,” so using it “upside down” with a webcam attached to the dock port could be huge. My wife will never get me lost again — I could have a GPS app on this thing!*

*It is, of course, always my wife’s fault if we get lost.

Obviously this is just my life and YMMV, but I certainly predict this to be a big hit (though I suspect there will be a slow start till the accessories and apps are fully built up. That’s okay, though — the iPod had a slow start too) and I do think it will change the world, at least a little. I think it will kill the Kindle/Nook/etc  (which may have the unanticipated effect of further hurting libraries), and I think it will revitalise the magazine/graphic novel and newspaper publishing companies, take e-reading mainstream and continue to solidify Apple’s grip on the media world, which has so far been pretty mutually beneficial (but I can see where some people would be concerned about that).

I think it will largely kill netbooks that aspire to be anything more than bargain-basement Microsoft Office machines. After today, they finally look like what they really are — toys.

Steve + Tablets

On the other hand, I think seniors and newbies and switchers — and heck, most non-nerds — would be very well-advised to give the iPad a test drive as soon as possible. I think this is exactly the right amount of computer for the average person, reformulated in a way that drops some of the barriers and makes learning it much easier. And it’s a pretty fine supplement to a “real” computer even for geeks (at least, this geek).

Finally, I think the iPad will draw netbook owners who want something more, tablet owners (particularly artists) who want it done right, and adults who would have otherwise bought an iPod Touch (which is now pretty much a kid’s device). If Apple had offered a nice set of bluetooth headphones (and the aforementioned webcam) I think they would have made it just about perfect.

I’m sure I’ll have more to say about this later, but those are my initial thoughts.