Ed Roberts RIP

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From this morning’s NYTimes.

Not many people in the computer world remembered H. Edward Roberts, not after he walked away from the industry more than three decades ago to become a country doctor in Georgia. Bill Gates remembered him, though.

As Dr. Roberts lay dying last week in a hospital in Macon, Ga., suffering from pneumonia, Mr. Gates flew down to be at his bedside.

Mr. Gates knew what many had forgotten: that Dr. Roberts had made an early and enduring contribution to modern computing. He created the MITS Altair, the first inexpensive general-purpose microcomputer, a device that could be programmed to do all manner of tasks. For that achievement, some historians say Dr. Roberts deserves to be recognized as the inventor of the personal computer.

For Mr. Gates, the connection to Dr. Roberts was also personal. It was writing software for the MITS Altair that gave Mr. Gates, a student at Harvard at the time, and his Microsoft partner, Paul G. Allen, their start. Later, they moved to Albuquerque, where Dr. Roberts had set up shop.

Dr. Roberts died Thursday at the Medical Center of Middle Georgia, his son Martin said. He was 68.

This is touching, because Gates and Roberts were famous for not getting on. Wikipedia entry for Roberts is here.

LATER: Just noticed that Steven Johnson found a way of linking his Wired piece about the iPad to news of Roberts’s death:

I was pretty much sold on the idea that the time was right for an iPad-like tablet to bring us to the next step in computing, and using the actual iPad has only strengthened my view.

Despite what looks like a big initial wave of buyers, this shift won’t happen overnight. Lots of people will balk at paying between $500 and $830 for something that they think is an unnecessary complement to what they already have.

But eventually, as prices come down, power and connectivity increase and developers create unexpected and wonderful apps, I think this format will find its way into people’s hands as ubiquitously as smartphones. And though Apple has thrust itself into an early lead, there will be competition for the Third Way, and we’ll all be better for it.

Back in 1975, Ed Roberts’s Altair cost $397, only a bit less than the iPad does today. But it had no screen, no web, no apps and you had to assemble it yourself. We’ve come a long way since then. And as of Saturday, we’re a little way further.

P-day arrives

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Stand by for TV news footage of the faithful queueing outside Apple stores in the US. It’ll be like the iPhone all over again. Or will it?.

“The first five million will be sold in a heartbeat,” said Guy Kawasaki, a Silicon Valley entrepreneur who was a marketing executive at Apple in the 1980s. “But let’s see: you can’t make a phone call with it, you can’t take a picture with it, and you have to buy content that before now you were not willing to pay for. That seems tough to me.”

Apple and other technology companies that are introducing a wave of touch-screen tablets face an ambitious challenge. The industry wants to create a market for a new type of device that most people do not really need — or do not yet know they need.

Tablets are intended to allow people to watch video, browse the Web, play video games and read books, magazines and newspapers everywhere they go without the bulky inconveniences of a full-fledged laptop.

The people who have already ordered an iPad or will show up at the Apple store on Saturday “are technophiles — the phrase ‘leading-edge technology’ sends goosebumps all over their skin,” said Eitan Muller, a professor of high-tech marketing at New York University’s Stern School of Business.

But those people make up only 16 percent of the total potential market for the iPad, Professor Muller said. “The main market is made up of pragmatists, and the same phrase sends them into convulsions.”

My hunch is that those people who already have iPod Touch devices will be the hardest to convince. Either way, Apple’s big bet is that the iPad can create an entirely new market niche between smartphone and netbook.

Which brings to mind James Surowiecki’s thoughtful piece in the New Yorker recently about the way the market for devices has evolved. Here’s the nub of his argument:

For Apple, which has enjoyed enormous success in recent years, “build it and they will pay” is business as usual. But it’s not a universal business truth. On the contrary, companies like Ikea, H. & M., and the makers of the Flip video camera are flourishing not by selling products or services that are “far better” than anyone else’s but by selling things that aren’t bad and cost a lot less. These products are much better than the cheap stuff you used to buy at Woolworth, and they tend to be appealingly styled, but, unlike Apple, the companies aren’t trying to build the best mousetrap out there. Instead, they’re engaged in what Wired recently christened the “good-enough revolution.” For them, the key to success isn’t excellence. It’s well-priced adequacy.

These two strategies may look completely different, but they have one crucial thing in common: they don’t target the amorphous blob of consumers who make up the middle of the market. Paradoxically, ignoring these people has turned out to be a great way of getting lots of customers, because, in many businesses, high- and low-end producers are taking more and more of the market. In fashion, both H. & M. and Hermès have prospered during the recession. In the auto industry, luxury-car sales, though initially hurt by the downturn, are reemerging as one of the most profitable segments of the market, even as small cars like the Ford Focus are luring consumers into showrooms. And, in the computer business, the Taiwanese company Acer has become a dominant player by making cheap, reasonably good laptops—the reverse of Apple’s premium-price approach.

While the high and low ends are thriving, the middle of the market is in trouble.

Very perceptive IMHO.

Sad but true: the iPad won’t save the magazine industry

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Insightful piece by Rory Maher.

Some believe the iPad will enable magazines to reverse course in the near-term, but we believe these expectations are way off the mark. In particular:

* It’s going to be years for mobile ad revenue to become material.

* As a result, in the near-term magazines will need to look to subscription revenue to drive incremental profits.

* But, even if iPad sales wildly exceed expectations and users rush to purchase lots of magazine subscriptions (we don’t think they will), this will not be enough to drive meaningful revenue at most magazines.

He does some calculations, based on assumptions that :

* iPad owners are early-adopters that consume a lot of content so let’s say 50% of them subscribe to two iPad magazines each.
* Magazine subscriptions on the iPad are higher than print subscriptions (most magazines plan to charge more initially), so assume an average $15 per monthly subscription.

His conclusion:

Even if iPad sales soar past expectations and reach, say, 16 million units over the next two years total magazine subscription revenue would equal about $2.8 billion per year under the above case scenario. That’s less than 30% of annual circulation revenue for the entire magazine industry and only about 10% of overall industry revenue (circulation + advertising).

Sobering but true. As Derek Thompson points out in The Atlantic:

It’s useful to step back and consider the long game for publishers. Magazines get money from (1) readers and (2) advertisers looking for readers. The problem today isn’t the readers, who are all over the Internet. It’s the ads. Magazine advertising has slipped in the last two years by 12%. Nobody expects print ads to rebound to their early 2000s levels, and everybody is still waiting for That Big Idea that helps publishers monetize their online content. Maybe it comes from location-based ads. Maybe it comes from cross-publisher partnerships and a Netflix model that bundles magazine subscriptions and distributes them electronically to computers and e-readers. Nobody knows.

But this is the key to the story: magazines are losing ad revenue, but they’re not losing readers. In fact most of them are gaining readers — they’re just gaining them online, where our eyeballs are poorly monetized. All publishers really want is a platform where they can charge readers for reading. The iPad gives them that opportunity. It’s fair to say publishers are being overly-optimistic with their prices for iPad apps. It’s not fair to say they’re wrong for trying.

The basic problem, I suspect, is that the traditional print newspaper and magazine businesses were cash cows for so many generations that those who were conditioned in them simply cannot conceive of a future in which returns are much more modest. They grew up in a world where a TV franchise or a big newspaper or magazine brand was a licence to print money. There is a future for journalism and publishing, but it’s one in which companies work harder, smarter and in much more diverse ways. And for lower margins.

Cloud computing: the carbon footprint

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In an astute move, Greenpeace is capitalising on iPad frenzy by launching a new report into the carbon footprint of cloud computing.

Make IT Green: Cloud Computing and its Contribution to Climate Change shows how the launch of quintessential cloud computing devices like the Apple iPad, which offer users access to the ‘cloud’ of online services like social networks and video streaming, can contribute to a much larger carbon footprint of the Information Technology (IT) sector than previously estimated.

To be clear: We are not picking on Apple. We are not dissing the iPad. But maybe someone can come up with an app that calculates the carbon footprint of using different web sites based on their location and energy deals. Apple is the master of promotion, and while we marvel at the sleek unpolluted design of the iPad, we need to think about where this is all leading and how like all good surfers we can make sure our environment stays clean and green.

The report builds on previous industry research and shows that at current growth rates data centers and telecommunication networks will consume about 1,963 billion kilowatt hours of electricity in 2020. That is more than triple their current consumption and more than the current electricity consumption of France, Germany, Canada and Brazil combined. However, the report also shows how IT can avert climate chaos by becoming a transformative force advocating for solutions that increase the use of renewable energy.

The Register has a helpful summary of the report which also highlights an interesting difference between Apple and Google as cloud proprietors:

Apple’s $1bn data center in Catawba County, North Carolina, currently under construction, will get its energy from a local electrical grid that contains only 3.8 per cent renewable energy, and a full 50.5 per cent from dirty ol’ coal and 38.7 per cent from nasty nukes. Google’s data center in The Dalles, Oregon, by contrast, gets 50.9 per cent of its juice from renewable sources, according to Greenpeace.

Greenpeace is also pretty critical of Facebook’s carbon footprint.

The only thing you really need to know about the iPad

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From David Pogue’s Review.

The iPad is not a laptop. It’s not nearly as good for creating stuff. On the other hand, it’s infinitely more convenient for consuming it — books, music, video, photos, Web, e-mail and so on. For most people, manipulating these digital materials directly by touching them is a completely new experience — and a deeply satisfying one.

His iPad ran for twelve hours playing continuous video.

Kleiner Perkins doubles its bets on Apps

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The thing that convinced me that the iPhone was a game-changer was the announcement in 2008 by John Doerr, the world’s smartest venture capitalist, that his firm was setting up a $100 million investment fund for Apps developers. Now, with the iPad looming, his firm has announced that it’s doubling its bets on Apps technology.

MENLO PARK, California, March 31, 2010 – Kleiner Perkins Caufield & Byers (KPCB) today announced the doubling of its iFund to $200 million of venture capital for applications for Apple’s revolutionary iPhone OS family of products, including iPhone, iPod touch, and iPad. Established in 2008 as a $100 million investment pool, the original iFund is now fully committed across 14 companies. iFund companies have been supported by an additional $330 million from follow-on investors.

KPCB also announced iFund-supported companies have more than 20 applications in development for the soon-to-be-released iPad, with 11 available at first ship on April 3. KPCB noted the iPhone has created an inflection in mobile content consumption and the iPad will lead the next wave of innovation in mobile computing. The iFund is increasing its investment dollars to back entrepreneurs and build companies that focus on these areas. Particular areas of interest on iPad include entertainment, communication, social networking, commerce, health care, and education.

“Welcome to the brave new post-PC era where a swoosh of fluidity replaces the traditional mouse-bound GUI. A new, truly revolutionary platform is rare, and a prize for entrepreneurs,” said John Doerr, KPCB Partner. “We expect all ventures to have an iPad strategy. We will fund many more ventures for iPad, and the iFund will accelerate their success.”

The firm thinks that the first $100 million was well spent. The claimed results for companies it has backed include:

  • Over $100 million of 2010 mobile revenue
  • Over 100 million aggregate mobile downloads
  • 18 titles by investees reached the Top 10 on the App Store.