The new age of connected devices?

Does the iPad herald a new age of connected devices, or is it “just a big iPod”? Reviews have been mixed.

Apple's iPad: With WiFi for $499; with WiFi and 3G for $629

And even if you love it, will you be willing to pay the extra $130 upfront and $29.99 per month for 3G service, or is WiFi sufficient? (Particularly given that a 3G chipset adds only $7-10 to the BOM).

I suspect WiFi is sufficient, and that the price of 3G connectivity is too steep. It is too steep, in particular, because in a new era of multiple connected devices each new device cannot come with its own expensive data plan. It is one thing to pay for home broadband ($40-50) and a smartphone data plan (~$30). It is another to add a netbook, a MiFi, a connected camera, an eReader, and/or an iPad and have each of these carrying its own contract.

Would you buy a separate data plan for each of these devices?

My family looked at netbooks for Christmas this year, and chose to buy without the subsidy and wireless broadband contract. The most common use cases for netbooks and iPads are still likely to be in places with WiFi connectivity: Home, office, hotel, café. And if you own more than one connected device, then you are better off buying a MiFi portable WiFi hub (from Verizon or Sprint) and sharing 3G connectivity across multiple devices than having a 3G connection for each device.

With this in mind, it actually could make more sense for wireline broadband providers to subsidize netbooks and iPads and connected consumer electronics than for wireless companies to do so. In our case, the netbook bundled with FiOS Internet or Comcast’s DOCSIS 3.0 service would have been more compelling than the 3G offer. For the iPad, a purchase for less than $499 with WiFi and a bundle of pre-loaded apps and services (such as Verizon Media Manager or a Comcast TV Everywhere app) from a broadband service provider would be interesting indeed.

Nokia's not-a-netbook

Nokia’s netbook, the Booklet 3G, has been being lambasted for its high price, particularly given its slow processor and smallish hard drive:

Nokia's Booklet 3G

It seems that many of the people critiquing it are focused on its high price, without recognizing the impact of the features which differentiate it:

1. wide area broadband, not just WiFi


2. built-in location services with GPS


3. a rugged case, of Aluminum, not plastic


4. very long battery life, twice that of many netbooks.

These features change the function of the device, the job that potential users might hire it to do.

The function of a netbook is to connect quickly and cheaply to the web via WiFi in the home; this is the job that users hire netbooks to do.

What about customers who want a netbook-like device, that they can use while either mobile, or where WiFi is not available:

• in much of the world, there is little if any fixed broadband and less WiFi, let alone the hotspots that US road warriors can rely on being able to find as they refuel with caffeine; these potential customers are looking for a robust device that connects quickly and cheaply to the web via 3G cellular


• for US road warriors, a lightweight rugged long lasting device with good connectivity and location smarts might be a great candidate for their job: enabling me to connect quickly and easily while traveling.

A very long battery life may even eliminate the need for a top-up charge during the day, and hence for carrying a wall wart and scavenging for power.

The right way to look at an innovation is from the perspective of the function of the innovation. For Nokia that means how does its Booklet 3G stack up against the other candidates for this job:

• Nokia’s own high end smartphones such as the N97 or Apple’s iPhone


• rugged or lightweight laptops, plus 3G connectivity, such as Verizon’s MiFi device


• or even a conventional netbook, to which a 3G modem and large capacity battery have been added

The trade-off amongst these candidates is then very different:

• a lot bigger which is good for usability but bad for portability, a little more expensive than a smartphone


• cheaper and simpler and smaller than something like a MacBook Air or Dell Adamo


• even competitive with something like Dell’s own netbook for which adding a 3G modem and a large capacity battery boosts the price by $275.

Seen through this lens, moving into these adjacent markets makes a lot more sense for Nokia; its Booklet 3G netbook is the not-a-netbook. The interesting question for Nokia then becomes: are there enough customers in the developing world where it is so strong, leveraging 3G rather than fixed broadband, or enough road warriors who prefer their candidate for the job of portable companion?