Rapid Reactions: That's One Small Step for Microsoft; One Giant Leap for Cable Cutters

The Facts:

• Microsoft announced multiple new content partners for the Xbox 360
• ESPN will bring 24/7 live streams of their major TV channels
• The NBA and NHL are bringing their apps as well
• Other providers include Revision3, Twitch.tv, Comedy Central, and Paramount
• A full list can be found here
• A subscription to Xbox Live Gold (~$60/year) is required to access this content

Initial Reaction:

At the annual gaming love-fest known as E3, there have been a lot of great games announced. Games that will surely sell millions of copies and make many millions of revenue. Nintendo is even set to reveal everything about the first of the next generation of consoles, the Wii U, tomorrow at their main press conference (which might also be their last home console, but that is for another post). But only one announcement has really left me feeling I have seen the future, and it isn't a videogame.

ESPN is coming to the Xbox 360. And no, I don't mean the online-only offerings of ESPN 3; I am talking about the full force of 24/7 live feeds from the ESPN, ESPN 2, and ESPN U TV channels. Buy an Xbox 360, Xblox Live Gold, and have Internet access (and, if my Dad is to be believed, possibly pay a small fee to ESPN as well) and you now have the first real a la carte TV experience. And this is not coming from Apple, who has fumbled for years with the "hobby"-status Apple TV, or Google, whose Google TV program has been at best a flop for them and hardware partner Logitech, but Microsoft. Yes, the same company that thinks we want a smartphone UI for desktop computers.

Microsoft seems to have been trying to reach this point for several years. It was one of the first companies Netflix partnered with to get their streaming service onto every screen in existence. Hulu and ESPN3 were added alongside movie rentals and purchasing in Zune. On the PC, Windows Media Center has allowed users to buy a TV tuner card, plug it into a PC, and watch live TV in a window on your monitor for years. Earlier, I wondered aloud on G+ the possibilities if the next Xbox were to come with an internal or external TV tuner. Microsoft may not have had the first connected set-top box or the best content deals for some time, but they have made lapped the "big boys" while no one was looking. It is probably safe to say that there are more Xbox 360's hooked up to TVs than Apple TVs, Google TVs, Boxee Boxes, and Roku boxes combined. And the usage numbers are probably in Microsoft's favor to an even greater degree.

ESPN on the Xbox 360 will now become the first real toe of a major cable network in the water of a la carte channel offering. It's success could prompt others to follow; it's failure could leave us with the current model of paying the cable company for channels we never watch. Time will tell. Sooner or later, time will tell.

Questions moving forward:

• Will the new ESPN app be free or be an additional monthly fee?
• Will ESPN offer a similar deal to Apple, Google, or other players?
• Should Xbox Live Gold be free now that it mostly covers 3rd party digital content?
• Will Apple, Google, and others really get behind their set-top box and/or connected TV efforts?
• How will other networks and the cable companies react?

How Samsung can beat Apple at their own game in the tablet market

Samsung dropped quite the little megaton on attendees of their press conference at CTIA today - the redesigned Galaxy Tab 10.1 and 8.9. Taken together, they personify Android's core philosophy that openness drives down cost and drives up quality due to competition. Samsung knew back in the early part of this month that anything over $499 wasn't going to cut it for their entry-level device, and boy have they delivered. 

Rather than going over the specs, which can be read in full here straight from Samsung, let me compare the Galaxy Tab 10.1's specs to the iPad 2's-

• Same price
• Comparable processor (as Samsung makes the iPad 2's and iPhone 4's chips)
• Same memory (16GB for $499 model)
• microSD slot lets you add more memory for cheaper (16GB micoSD card costs ~$25)
• Thinner
• Lighter
• Higher-resolution screen. (Apparently screen resolution only matters to Apple when its the iPhone 4)
• Better front and rear cameras
• Full Flash support allows experiencing the full web as currently constructed (HTML 5 is the future, not the present)

Samsung is acutally one of the largest chip and memory manufacturers on the planet. And that isn't all, they also make the screens used in tons of mobile products. They can compete (and perhaps best) Apple on component price thanks to their vertically-integrated supply chain. Apple, for all of their engineering and design wizardry, still largely has to buy their components from 3rd parties (as do other competitors like RIM, HP, and Motorola). So, in a sense, Samsung wins no matter if you by an iPad 2 or Galaxy Tab or even an iPhone or a Nexus S. 

So, hardware is on the side of Samsung. But what about software? Well, for now the iPad 2 is the unquestioned winner in number of tablet-centric apps, but that will even out in time as more and more Android tablets hit the market and they start making a dent in Apple's marketshare. By this time next year I would expect Android tablets to be ahead in overall marketshare. Just look how far Android on phones has come since the launch of the OG DROID back in November 2009 and it doesn't sound so crazy. 

I've said how I was interested in the Xoom but for the mass consumer market, the iPad 2 was simply a much better value considering its $499 price point. But the Galaxy Tab 10.1, upon launch, will be the best tablet on the market in terms of specs and pricing. You simply get more for the same amount of money on the hardware side. Software is still in Apple's favor, but that lead will erode quickly. It is no longer a matter of "if" Android will become the dominant tablet OS, it is a question of "when." 

Oh, and if you do the math a 48GB Galaxy Tab 10.1 (16GB model plus 32GB microSD card) ends up being less than a 32GB iPad 2. So, so much win. 

Why the iPhone is the Model T of the 21st Century

I have been thinking for a long time about how to exactly describe the iPhone and what it has done for mobile computing. Plus, there arises the question of how to describe its competitors, such as Android, WP7, and webOS. Then it came to me: the iPhone is the Ford Model T built for the 21st Century.

The following is taken directly for the beginning of the Model T's Wikipedia article: 

The Ford Model T ... is an automobile that was produced by Henry Ford's Ford Motor Company from 1908 through 1927. The Model T set 1908 as the historic year that the automobile became popular. It is generally regarded as the first affordable automobile, the car that opened travel to the common middle-class American; some of this was because of Ford's innovations, including assembly line production instead of individual hand crafting.

Does that sound familiar to a certain phone made by a certain fruit company? No? Let me help you out:

The Apple iPhone ... is a mobile device, or smartphone, that was produced by Steve Jobs's Apple, inc. from 2007 through the present day. The iPhone set 2007 as the historic year that the smartphone became popular. It is generally regarded as the first affordable smartphone, the device that opened mobile computing to the common middle-class American; some of this was because of Apple's innovations, including a touch screen-based application-centric mobile operating system.

It is quite scary just how much sense the iPhone makes when put into this context. The iPhone and the iPad put Apple on the leading edge of the two most rapidly growing markets in the tech industry: smartphones and tablets. Along the way, Apple has become the most valuable tech company in the world and the second most valuable company in the world of any kind behind Exxon Mobil.

Apple has achieved this success largely in spite of offering almost no customization choice when buying an iPhone or iPad. Every other computing product Apple sells offers many customization options -- 13, 15, and 17 inch MacBook Pros. 21.5 and 27 inch iMac's. The iPod Shuffle, Nano, Classic, and Touch. The iPhone offers no customization other than increased storage. But hey, you can always buy last-year's model!

The iPhone will likely remain the best-selling smartphone for many years. The iPad is probably in the same category. But that will increasingly become irrelevant as Android continues its incredible rise on the backs of multiple devices from multiple carriers. Apple may sell 5 million iPhones per month, which is an amazing figure and will surely bring them huge profits, but we will soon see Android phones selling 15 million phones per month or more. There are already at least 300,000 Android phones activated every day - that's 9 million per month, folks - and this number will continue to grow into 2011.

So Apple will retain the "best selling smartphone" and "best selling tablet" crowns for the near future. But there  is no denying that Android is the best selling mobile operating system. And in the war for application developers, that is the only number that matters at the end of the day.

Remember, any customer can have any iPhone in any color as long as it is black.