I’ve been on a plane and offline for the last 16h and as a result I missed the reactions to Amazon’s mega announcement of the $199 Fire plus a $79 e-reader. However, I know there is an obvious question everyone is asking: is the Fire a legit threat for the iPad? The early reactions I read either left the question unanswered or dismissed the Fire as a contender in the “grown-up” tablet space. Let me say this upfront: the Kindle Fire is the biggest threat the iPad has faced (granted, the competition so far has set the bar pretty low) and I wouldn’t be surprised if the tablet war became a thing of two – Apple and Amazon.

Those who dismiss the Fire as a competitor because it’s a different type of device (smaller, cheaper, less features), I’d like to remind you Steve Ballmer’s words right after the iPhone launched. If you have no idea what I’m talking about, I strongly recommend you to watch the video. It’s one of those moments that would force most CEOs to resign, except apparently Steve Ballmer.

Let me elaborate on the last paragraph. The problem with looking at a market from a feature standpoint is that you’ll miss the next big threat. This is a statement, not a hypothesis. You know the famous Ford statement “if I'd ask customers what they wanted they would have said a faster horse”. Feature focus will have you looking at incremental innovation and will make you miss the fast train that will run over you. Recently examples show it: Netflix broke the video rental market, not Blockbuster (and Blockbuster didn’t see it), Zipcar is disrupting the rental car business (and the car industry?), not the low-cost rental car company, the iPad is disrupting Microsoft’s Windows/Office business, not OSX or Linux or some other OS, and the original example, the clunky reception-challenged unable-to-message iPhone changed the whole wireless communications business, not some feature-packed phone. Clients don’t really care about features, they care about their needs and how you’re helping them.

The Fire is a contender and a very serious threat, not just to Apple who has the quasi monopoly of the tablet market, but especially to all those trying to survive the whole tablet wave (hello Microsoft?). Here’s why.

1. Hardware/Content Integration. Apple showed the way – you know what beats free? Easy. Users weren’t willing to trade Naspter for expensive CDs but they embraced ¢99 songs as long as they were at the distance of a click and immediately available on their mp3 player. I’m not a fan of walled gardens but they work and Amazon is in a privileged position. The Fire comes with seamless integration with Amazon’s e-books ("Earth’s biggest bookstore"), songs, movies, series.  Plus, they already have you credit card, so all you need to do is to click on the “Buy” button and voila, you can immediately enjoy your purchase. Apple is ages away from being a contender in the e-book space and Amazon is on par or almost in the music and movie space.

2. The Ecosystem. The tablet app world is iPad’s kingdom – Android apps for tablets suck because so far the hardware hasn’t received any decent traction. How do you beat that? With a $199 device. At this price point, there is no question that the Fire will sell like crazy and that will lure developers to churn out apps for Android. A more attractive Android ecosystem will probably hurt Amazon but it will mostly hurt Apple as it will entice manufacturers  (what else are they going to do, webOS?) and create a reinforcing loop around the ecosystem. And by the way, Amazon App Store will be there to help you navigate an increasingly complex app world – with seamless integration with their hardware.

3. Vision. Everyone else’s strategy seems to be to copy whatever Apple is doing – with a 6-month to 2-year lag (4 years if you’re based in Finland). Ask RIM, Nokia, and Microsoft how that plays out. Amazon is so far the other visionary in this space. If you believe, as I do, that we’re entering a post-PC era, this is a huge advantage.

Another post, another prediction, another take on a tech giant. It’s possible that in a few years when I revisit this I’m going to think it was the stupidest thing I’ve ever said, like when in 2000 I predicted that Pocket PC was going to fail (which it did) and Palm would be the king of mobile platforms (wow!). I’m actually mildly proud of that one as iOS mimicked a bunch of good things Palm had – monotasking, fool-proof navigation, developer ecosystem. And it’s about Apple that I want to talk about, particularly about one key feature where 2000 Palm and current Apple are dramatically different – openness.

I was thinking about this when last week I was looking for a tasklist software for my Mac. Several months ago I decided I was giving up on Mac Mail. It happened that I also migrated all my domains to Google Apps so I could either use gmail or a better email client. I finally chose the latter and started using Sparrow (awesome email client in case you’re looking for one). But Sparrow was lucky that I had the chance to play with it on a friend’s laptop before actually buying it. Otherwise I would have picked Gmail web client, which is better than most email clients and it’s free. The thing is, there is no way I’m going to pay $10 for an email client before I try it out. It’s not about the money, it’s about the idea of paying without trying. The problem is that Sparrow bought into Apple’s policy and doesn’t allow a trial download.

So when last week I decided to pick a tasklist software that could integrate with my other productivity tools, I was faced with the same problem. After reading a bunch of reviews, I made a shortlist of applications to try. The problem? Some of them were exclusively sold through the Apple Store and I couldn’t give it a try before buying. As a user I still had a lot of options as fortunately not every developer has yet stuck to Apple’s exclusivity. But it worries me that Apple is trying to build the same ecosystem for OS X as it did for the iOS – if you want to build an app, you have to comply with Apple’s rules and sell exclusively through the App Store. It’s going to be a lot harder to build that ecosystem for OS X as there’s a stronger legacy and users won’t easily give up on their freedom to download software from wherever they want, but Apple’s intentions seem very clear.

The problem with the walled garden that Apple is building is that is doomed to fail. I know it sounds like heresy but no walled garden has ever survived to openness and freedom. This is not a tech issue; it’s a social one. We (humans) don’t like walled gardens. Between perfection and freedom, we will always choose the latter. I don’t know if Apple thinks it’s better than any previous giant but no giant is big enough or good enough to fail. Everyone thought that AOL’s walled garden was rock solid. If in 1994 of 1995 you criticized AOL you’d be called insane. Is AOL even relevant these days? In 1998 we were afraid we would have to live under Microsoft’s tech dictatorship. Today that sounds laughable.

It looks like Apple is trying to stretch the borders of its kingdom to unthinkable limits and that is bad for innovation, and therefore for the end user. The limitations of Apple’s policy are already visible. If you’re a developer, don’t you want your users to download a free trial before buying your product? I do. Don’t you want to invite a select group of users to your beta? I do and 100 is not enough. Don’t you want to have the freedom to choose different price strategies? I do but it took Apple years and plenty of complaints until they allowed any sort of subscription models.

History shows that walled gardens don’t work and that’s why I say Apple’s walled garden is doomed. I don’t know how it’s going to happen (competitor? Apple changing its rules?) or when it’s going to happen but I’m positive it’s going to happen. So if I were you, I’d keep an eye on open platforms (HTML5?) and be ready to change rapidly. Just in case.

 

Image: Ambro / FreeDigitalPhotos.net

This week started with “shocking” news that every iPhone records location information of its owner (actually, user). My twitter world went nuts! Apple is the biggest brother! Apple is controlling us! Apple is evil! It was as if Steve Jobs was personally tracking every single user location.

Then yesterday came the PlayStation hack issue and suddenly my twitter world found out that worst things happen, like someone stealing actual money from people and not just the location of the motel where someone got laid with the underage intern.

The underlying question is: Who Cares About Privacy anymore? Do you? Then should you be reading this post, where you probably landed because you saw the twitter or Facebook linkt? What?! You’re on Facebook? I hope you have a fake name and, of course, I’m assuming you didn’t include any personal information there, let alone a photo of you drunk in high school.

Are you feeling the sarcasm? My actual point is, excess drives commoditization. The more information someone has about you, the less valuable each individual data point is. If I have 10 or 12 location data points, I can easily map them and tell whether or not you were at the aforementioned motel. What if I have 1000? Not so much.

I’m not excusing Apple, which may or may not know this is happening. And I’m well aware that my location blob as a whole is tremendously valuable, as valuable as my Facebook profile. But does that really justify the rage? My location blob says a lot about what I am but nothing about who I am. Is that really invading my privacy?