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Friday, 09 April 2010 13:33

iPaid too much


Most observers would suggest that the pricing for Apple's new iPad tablet device is 'about right.'  So what is it with the latest announcement to permit in-application advertising?  Are we about to be taken for a ride?

The Age claims today, with some degree of exaggeration: "iPhones and iPads to be plastered with iAds".

Reading the article, one can easily see that the proposed advertising platform, to be called iAds is intended to be in-application, not plastered all over the display.  Steve Jobs is specifically quoted as saying that the platform is intended for application developers to include advertising within their products, with the advertising delivered by Apple servers

Jobs goes on to suggest that the platform has "the opportunity to make 1 billion ad impressions a day on tens of millions of Apple mobile device users."

He is also quoted as saying that he doesn't like the current style of mobile advertising; offering specific scorn for search advertising.  The intention being to "foster more engaging advertising that will not pull users away from the content within apps."

iAds is a part of the new iPhone OS 4.0 to be made available as part of the expected 'technology refresh' due around the middle of this year.

This announcement gels very nicely with the rather strident comments made by Nintendo America President Reggie Fils-Aime.

Reggie Fils-Aime, Nintendo's American President was widely reported yesterday (here for instance) as saying that the iPhone "isn't a viable profit platform for game development."

The first reaction is, "well he would say that, wouldn't he!"

However, think about it - unless you can sell hundreds of thousands (or even millions) of copies of a $5 app, how on earth can you make any real money?

Fils-Aime is further quoted, "If our games represent a range between snacks of entertainment and full meals depending on the type of game, (Apple's) aren't even a mouthful, in terms of the gaming experience you get."

It seems to me that Apple might just have identified both the elephant in the room (Nintendo) and also, to maintain the food analogy, the method of consuming it (one mouthful at a time, as the old adage goes).

Coming back to the (somewhat) whimsical title to this piece, it's quite clear that the average consumer has been trained by the industry to expect to pay around $US500 for a reasonably full-featured ultra-portable computing device, such as the iPad.  Furthermore, they've also been trained to expect to pay no more than $5 for an App for their iPhone, iPod Touch or iPad.

End-of-story.  That's all there is to pay. 

Or is it?

Suddenly, there is the opportunity to receive targeted advertising within the Apps you thought you had paid for in full; and you can be very sure that extensive profiling will be done to ensure that you only receive suitable advertisements. 

I'd suggest you watch out for the 'free upgrade' to your favourite App once OS 4.0 is installed on your device.

Also, it sounds to me that this is a fabulous opportunity for the Telcos to make even more out of the iPhone bundles that they currently provide on their various plans as Steve Jobs has said that 60% of advertising revenue will go to the developer and Apple will take 40% for buying and serving the advertisements. 

And 100% of the data download cost will (as usual) be carried by the device owner.  Which leaves me to ponder, at $US499 or more for the device, perhaps iPaid too much.

'¦and let's not even start on the iAds vs Aids jokes.  What is it about Apple and poorly-considered product names these days!



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David Heath

David Heath has had a long and varied career in the IT industry having worked as a Pre-sales Network Engineer (remember Novell NetWare?), General Manager of IT&T for the TV Shopping Network, as a Technical manager in the Biometrics industry, and as a Technical Trainer and Instructional Designer in the industrial control sector. In all aspects, security has been a driving focus. Throughout his career, David has sought to inform and educate people and has done that through his writings and in more formal educational environments.



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