Last Tuesday, Xinhua quoted a spokesperson for a key Chinese political advisory body, Zhao Qizheng, as strongly denying Google’s allegations of Chinese malicious hacking, specifically the implication that the government was involved. But being consistent, Qizheng and the Xinhua report were careful not to call Google’s accusation a “charge.”
If one reads the Xinhua reports at face value — putting aside Reuters’ interpretations of them — they could represent China’s attempt to call Google’s bluff. Ever since the incident, the state-run news agency has reiterated that Google has threatened to pull out of the country, but has not done so. And a political cartoon published by Xinhua last Friday, entitled “Google and the Spooks,” depicts the political association it would prefer Chinese citizens draw in their minds. It shows the familiar Google search page, with the logo embellished with Nixonian eyes and an American flag necktie bearing a National Security Agency seal.
The prevailing theory, put forth last month in The New York Times, is that the perpetrators of the alleged incident may have been vo-tech students of a certain Ukrainian professor who has been suspected of online mischief before. While on the surface that might appear to exonerate the Chinese government, the Times’ source, a noted intelligence research analyst, warned readers not to draw that conclusion too quickly, saying the Chinese “have a different model” for exploiting targets. That source may have helped the Times uncover that Google had been working with the NSA to determine the source of the incident.

What other competitor will offer another choice to iPad through such aggressive marketing? You tell me. The first commercial is very benefits oriented, putting common PC-like functions in the lap instead of on the tabletop. Apple should be wary of consumer confusion. Some potential buyers might not easily understand the difference from iPhone or iPod touch. Whom that might be will become more apparent in a few paragraphs.
I predict that within a few months of release, unless there is a shortage of storage cards, Apple will reconsider the 16GB model — as it did the original 4GB iPhone; 16GB is the new 4GB, but for different reasons. From the start, summer 2007, 8GB iPhone quickly outsold the lower-cost 4GB model. Buyers wanted more storage. At $499, I expect the 16GB iPad to easily outsell the $629 16GB 3G or 32GB WiFi model. But in short order, many iPad buyers will find that 16GB storage is inadequate. They’ll want more storage, which they didn’t get at first because of price — how affordable is $499 compared to $629. There are reasons why retailers use prices like $19.99 or $599. The six in $629 seems so much more than $499. I expect Apple to make price adjustments by summer. Latest. But only after an iPod touch price reduction or introduction of 128GB model at $399.
All this meandering finally leads to the question posed by this post’s title: Who should buy iPad? With no backing data — but a good sense about marketing — I’ll predict early iPad sales will skew across four consumer demographic groups (ignoring institutional segments like education or training) that also likely wouldn’t fit nicely into analysts’ survey spreadsheets:
People Steve Jobs’s age or older. The iPad is first and foremost a device for the old. Apple’s CEO may run a company producing hip products, but Jobs is middle aged. Jobs turned 55 on February 24. He’s a Baby Boomer, and iPad is for his generation and that of his parents. It’s computing made easy, with all the basics covered in a device simply and comfortably handled.
Yesterday, a friend asked if his 85 year-old dad should buy an iPad. “Absolutely,” I said. He was surprised because of my post “12 reasons why I won’t buy an iPad.” The iPad will get the dad on the Web with email and other connected features, serve up ebooks and provide applications that are easily chosen, purchased, installed and used.

Apple’s tablet isn’t right for me, or many other people comfortable with technology and used to multitasking. In its first iteration, iPad is more a single-task device, which is right pace for many older folks (Hey, this isn’t agism just the reality of aging). Among the Boomer-plus set, I expect iPad will appeal most to digital immigrants, meaning those people who didn’t grow up with computers and aren’t all that comfortable with them (Gen Xers tend to be digital resident aliens and the Millennials digital natives).
The iPad as a device for the old (55 and older) could be quite good for Apple. According to a recent AdMob report, 65 percent of iPod touch users are 17 or younger. By comparison, 72 percent of iPhone users are between 18 and 54. Neither device has much pull with those 55 or older, 14 percent and 5 percent, respectively. The 55 and over crowd is a desirable market segment. Marketers assume this group has more discretionary spending because of savings and less pull by outside factors — children, for example. Then there is the large number of Baby Boomers (in the United States about 77 million still living out of 309 million total population, according to Census data). The oldest Boomers reached retirement age in the Noughties.
The Mac faithful. It’s often called the cult of Mac for a reason. Anecdotally, this group can be relied on to buy pretty much anything new with an Apple logo.
Mac wannabes on a budget. From a marketing perspective — looking at Apple computing products as a range of features and prices — iPad fills a gaping hole in the Mac product line between the $399 iPod touch and $999 MacBook. More importantly, iPad lets people pining for a portable Mac get one for less than $500. Suddenly, the cheapest, functional Mac portable is $499. The average consumer doesn’t care about the operating system, whether iPhone OS 3.2 or Snow Leopard. Mac wannabes will care more about what the device can do for them. Apple has packed most of the basic, most appealing functions of the Mac portable — including iWork — into iPad. Then there’s the App Store offering loads of fun applications that are cheap and easy to install.
Niche buyers. Singly, niche buyers won’t amount to much. Combined, they could be a sizable buying segment. Among them I see people interested in ebooks, gadget collectors (especially those obsessed with geek envy) and artists.
To many artists, iPad should be a desirable canvas. Anthropologically, used together, the mouse and keyboard are an unnatural user interface. Human beings are tool users. We experience and interact with the world through five senses. The best tools are really extensions of the hands; the mouse and keyboard UI is neither. Hands, fingers and touch are especially important for experiencing and manipulating objects or surroundings — and for artistry. Apple’s tablet is the canvas for which many artists’ hands will create. What will the hand and finger create on the touchscreen? Who knows, the answer might be a future iPad commercial.

Though resolved for the time being, this heated disconnection and re-connection is another example of the much larger-scale fight between content owners, local station affiliates, and the cable monopolies.
There are many who believe this fight will only result in all of our cable bills going up.
Broadcasters want to brace their weakened advertising revenue and shrinking viewership by negotiating higher retransmission fees from cable companies. These fees are frequently expressed as a per-subscriber charge, and the negotiating price thus far has been $1 per month per viewer.
That’s the retransmission price that Fox tried to get from Time Warner Cable late in 2009, and reportedly the same price WABC sought from Cablevision. On New Year’s day, Fox and Time Warner reached an agreement on the fees, but the amount of money was not disclosed.
Analysts at the time said the deal opened the door for a $5 billion increase in overall cable fees.
According to the Federal Communications Commission, “Every three years, broadcast stations must decide whether to demand carriage on local cable systems without receiving compensation or elect to negotiate a retransmission consent agreement. In return for allowing a cable system to carry its signal, a television station may require the payment of a fee or other consideration (for instance, carriage of another programming service or advertising time). Any new or additional costs incurred as a result of retransmission consent agreements may be passed through to cable subscribers.”
Over the weekend, when it still appeared the Oscars would be blacked out for some New Yorkers, President and CEO of the American Cable Association Matthew Polka issued a statement, reading in part: “The Federal retransmission consent regime is a badly broken system that permits signal pulling and flagrant price discrimination against smaller cable companies that consumers should not be forced to tolerate.”

Herding the subscriber sheep
It doesn’t take a rocket scientist to conclude that Apple and its carrier-partners weren’t particularly pleased with this trend. I’m going to assume the wizards at AT&T didn’t much appreciate the potential long-term thinning of subscriber revenue, and quietly encouraged Apple to squash it before it became rampant. I’m singling out AT&T because it’s such an easy target of consumer discontent, but this may as well apply to any other carrier in any other country. They’re all cheering Apple’s move because it tilts device traffic back onto their own wireless networks.

Never mind that developers have been begging Apple to open up the API so that they don’t have to get in through the back door. Never mind that tech-savvy consumers now have another reason to jailbreak their devices. Never mind that this is yet another example of near-Draconian (or maybe full-on Draconian) control over a platform that, despite its extreme popularity, remains a prime example of the risks of leaving too much control in the hands of one provider.
What’s to stop Apple from summarily choosing another category next week, or next month, or whenever, as a candidate for pruning? What’s to stop Apple from deciding that developers, whose only option up to then was to creatively work around deliberately baked-in limitations in the SDK to bring consumer-friendly offerings to market, have gone too far and need to be taught a lesson?
To be blunt, no one can stop Apple from doing whatever it wants. I’ve said before that this is Apple’s playground, which means it can make the rules, interpret them as it sees fit, and change them on a whim. And developers and other stakeholders have no say in any of this. They simply have to hope that the elephant they chose to sleep with doesn’t roll over in the middle of the night and crush them.
I don’t say this with malice or anger. It simply is what it is, and despite the platform’s overwhelming success over the better part of the past three years, it leaves consumers and developers with a choice to either put up with Apple’s model or seek alternatives.
Please hold that thought for a second.
A case of non-coincidental timing
All this comes just as Apple gets set to begin shipping iPads to an adoring public. Retail availability in the US is now set for April 3, and sometime toward the end of April in Canada. This means potential buyers are already deciding how much hard-earned cash to bring along when they wait in line overnight to buy one. Will they cheap out for the basic Wi-Fi version, or will they go full-on for a 3G-enabled iPad?
The timing of the latest app takedown is no coincidence: Apple and AT&T clearly want to influence potential buyers to stretch for a 3G-capable version to at least hold out the potential of ongoing subscription-based revenue. Think of this latest move as a scorched-earth strategy for wannabe-Wi-Fi-only iPad users. I’m betting that around this time next month, Wi-Fi-only iPads will be only slightly more difficult to find than two-headed Lincoln pennies, as Apple’s carrier-friendly/consumer-unfriendly supply chain strategy snaps into focus.
Which brings us to the alternatives. As Microsoft is painfully learning, no platform remains dominant forever. Sooner or later, the conditions that allowed the market leader to become the leader in the first place will shift, and in so doing, will allow challengers to lay down roots and eventually outflank them. The incumbent’s vulnerability to defeat in this manner can be influenced by how it treats its market. Do so with cooperative partnership and you stand a better chance of getting stakeholders — namely developers and consumers — to stick with you a bit longer. Do so with a cynical sense of arrogant protectionism, and they’ll happily dance on your grave.
The crack in Apple’s foundation?
Does this mean Apple’s latest App Store move will lead to its ultimate demise? No. But does it shift a few more grains of sand in a different direction? I strongly believe that it does. And we all know how massive tectonic market shifts can begin with a few simple moves. It could be years before the rats begin to abandon any sinking ship with an Apple logo on it, but don’t think for a second that seemingly small acts like this won’t play an eventual role.
The iPhone/iPod touch/iPad universe remains the place to be if you’re looking to build mobile apps. Google’s Android is a distant second fiddle, and RIM is barely out of the gate. But Google’s approach — open source and decidedly less school marm-ish in its definition of what developers can and cannot do — may yet be the kind of landscape that developers will target if Apple’s mercurial form of relationship building becomes too onerous. Apple’s Wi-Fi move is pushing things with this sensitive audience yet again. At some point, they may yet decide enough is enough.

This is why Microsoft’s TagReader, which was released in the Android Market today, is worth checking out. It’s similar to any number of barcode scanners available on the Android platform, except that it is designed to read Microsoft’s unique “Tags.”
Microsoft Tag is currently in beta, and lets Windows Live users create unique optical codes that Microsoft calls HCCBs (High Capacity Color Barcodes) — such as the one pictured above — which link to Web-based content when scanned by a mobile phone’s camera.
Microsoft Tags are similar to QR codes in that they can carry a text message, trigger a browser link, link to a vCard, or automatically dial a phone number. They can then be rendered as PDF, WMF, JPEG, PNG, GIF, or TIFF files in sizes from 0.75 inches all the way up to 120 inches.
There are a number of practical uses for optical codes which have already been exploited in the real world. Advertisements sometimes incorporate them to link to additional Web-based content on the viewer’s phone, and business cards sometimes feature them automatically place a call or send a message to the card’s creator. But uses are not limited to promotion and advertisement, any real-world item can be endowed with Web-based context. For example, you could attach an optical tag to a sealed box, and the tag could tell you the contents of the box when scanned.
But how is Microsoft Tag any different from the free online QR makers one can easily find on the Web? First, it’s linked to an account where every tag a user makes is treated as a campaign. They are stored in a big list of tags, and each record in this list shows when the tag was activated, whether it’s currently active, what type of content it links to, and detailed analytics showing how many times the code was scanned and accessed. If you were adding Microsoft Tags to a billboard or a newspaper advertisement, the tags could provide a rough gauge of the real-world penetration of those ads.
The Android app itself is actually the most forgettable aspect of the Microsoft Tag ecosystem, and is simply a way to get more users scanning tags. The application is available now in the Android Market.

The R480 laptop comes with an Intel Core i3 processor, 14″ LED backlit HD LCD, Blu-ray drive, 4 GB of RAM, Intel GMA 4500MHD integrated graphics, Wi-Fi, HDMI out, and 500 GB of storage. The R580 steps up to an Intel Core i5 processor, 15.6″ LED backlit HD screen, Blu-ray drive, 4 GB of RAM, Nvidia GeForce 310M graphics, Wi-Fi, HDMI out, and 500 GB of storage.
The R780 subtracts the Blu-ray, but leaves in the Intel Core i5 processor. It then adds a 17.3″ LED backlit HD screen, DVD drive, 4 GB of RAM, Nvidia GeForce 330M graphics, Wi-Fi, Bluetooth, and 500 GB of storage.
Each of the three laptops from Samsung will ship with Windows 7 Home Premium (64-bit) pre-loaded.

One of Samsung’s new netbooks, the N210, is also exclusive to Best Buy, and is already available in stores for $379. Other Samsung netbooks — including the N135, N150, and ruggedized and “spill proof” NB30 — are being sold in multiple venues. Samsung’s netbook sales are particularly brisk on Amazon.com, said Shultz. The N220, also launched at CES, is not yet available to US consumers. All Samsung’s new netbooks use Intel Atom 450 processors.
According to Schultz, research by Samsung indicates that, while consumers might intend to tote their netbooks along with them outside the house, 70% of all netbooks are actually still used strictly at home, as “secondary PCs” that are moved about only from room to room.
In the home office vignette, the company demo’d a “concept model” of an all-in-one PC. With the demo, aimed to gauge feedback from journalists for a possible product in this space, Schultz said.

Samsung rivals such as Sony and HP have long been out on the market with all-in-one PCs for the home. Now, Lenovo plans to introduce an enterprise-oriented all-in-one PC over the next year or two.

Other publishers are in the iPad game as well, unfortunately with a lot less to show off than Penguin. When the iPad launched in January, Apple said HarperCollins, Simon & Schuster, Hachette Book Group, and Macmillan were all partners in the iBookstore. At the end of February, Macmillan introduced Dynamicbooks, the company’s burgeoning line of online interactive textbooks. The company only has 11 titles available now, but expects more than a hundred by next Fall.
The company said it would reach out to Apple about creating iPad-formatted Dynamicbooks, but there is no evidence that Macmillan will be launching with anything other than standard ePub books.