Insight

iPad 3 release: The dark side of Apple’s iOS

Insight

The media madness machine is already approaching fever pitch in advance of Wednesday's expected iPad 3 announcement in San Francisco. But don't be fooled into thinking yet another smash hit product is enough to guarantee Apple's future. Lurking in the shadows of yet another blockbuster launch are a number of risks that could take the company down a peg or two if it fails to address them:

1. It focuses on evolution and not revolution

Apple risks falling into a black hole if it gets too comfortable with its existing product lines and simply bumps up the specs every year or so. A slightly faster, slightly feature-enhanced iPad will obviously boost sales in the near term, but longer-term growth demands more.

For that, the next iSomething - perhaps iTV - needs to establish the company in an entirely new market. Apple's greatest successes have traditionally been derived from products that defied existing convention. It's never invented entirely new categories - media players, smartphones and tablets all existed before the iPod, iPhone and iPad came along - but each of these products represented a complete break with convention and helped the company establish entirely new markets. As Tim Cook solidifies his hold on the CEO's office, he'll need to roll the dice on new product categories in addition to extending existing ones.

2. It becomes an app also-ran

Apple's App Store may lead all others with 650,000 titles and climbing, but it's no longer the only game in town, and a fast-growing Google Android Market - it tripled to over 500,000 titles in the last year alone - is poised to challenge Apple's app dominance.

Numbers only tell part of the story, however. The greater risk to Apple is its failure to address known weaknesses in its App Store experience. App discovery - or surfacing - is a hit-and-miss affair that leaves a very long tail of apps to gather dust. Human-curated top-app lists can only go so far when you're dealing with such a huge installed base of titles.

Apple's just-announced purchase of Chomp reflects just how much is at stake here. If someone comes up with a better app store experience - for both consumers and developers - then Apple is vulnerable. It needs to close the gap, and soon.

3. It innovates too slowly

As competing tablet vendors like Samsung gain market traction, Apple's ability to control the pace of innovation by limiting the rate at which new features are introduced will erode. The iPad 2 was a perfect example of this: Apple could afford to push ahead with an admittedly modest feature set improvement because the market at the time offered no real competition. Fast forward to today and Apple's feeling more heat on that front. Either it loosens the brakes on bringing compelling new features to market, or it risks being eclipsed by hungry Android vendors with nothing to lose.

4. It keeps too tight a rein

The future of the tablet market is boiling down to a holy war between Android's forces of openness and Apple's forces of control and consistency. Apple has long insisted its tight, integrated framework makes for a more consistent and safe experience for developers and consumers alike. There's clearly still a market for it, but the less constrained Android community could just as easily out-innovate the more retentive iOS one if Apple doesn't listen to festering concerns over developer relations, approval processes, business development and revenue sharing.

Already many formerly iOS-only developers have dipped their toes into the Android waters and realized there's money to be made there, too. Microsoft's upcoming Windows App Store will only broaden the competition. Apple needs to up its game to keep its community focused on its side of the fence.

5. It ignores the smartphone market shift

With North American Android smartphone market share already topping 50 per cent, the tablet market is similarly primed for a bit of a realignment in favour of Google and its partners. iPad global market share is already dropping in a rapidly growing market — down from 68 per cent to 58 per cent in the last year alone according to Strategy Analytics. This will compel Apple to come down from the mountain, somewhat, and adjust its strategies to a more competitive tablet market reality.

6. It gets distracted by litigation

Long-running intellectual property battles - including the particularly bruising international fight with Samsung - could divert the company's attention at a time when it can least afford it. Apple continues to navigate the first few months of post-Jobs existence, and investors are watching closely for any sign of a wobble. All hands need to be focused on bringing new product to market - and not sucked into endless court action that saps energy and sucks the life out of innovation.

Carmi Levy is a London, Ont.-based independent technology analyst and journalist. The opinions expressed are his own. carmilevy@yahoo.ca

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