the impact of iPad

What was the impact of iPad?

Right. I used the past tense. Anticipating Apple’s move, Amazon opened its Kindle platform on Jan 20. Also, two days before Steve Jobs introduced iPad, New York Times announced that it is creating a new segment for “reader applications”.

On Monday, The Times also announced that its media group division had created a new segment for “reader applications,” and named Yasmin Namini, the senior vice president for marketing and circulation, to head it. Executives said the timing was coincidental, prompted not by the Apple device specifically, but by the growing importance to The Times of electronic reading devices in general.


It seems to me that Apple is about to do what it did to mobile operators and handset manufacturers with iPhone to media publishing companies and e-book manufacturers with iPad. iPhone opened what used to be tightly vertically integrated mobile service market that was dominated by mobile operators on one hand and handset manufacturers on the other hand. It forces the separation of the “service” and the “device” in mobile industry, creating spaces for hundreds of thousands of applications. The arrival and success of iPhone prepared the way for Android which is even more open than iPhone. Before iPhone, mobile operators and handset manufacturers wanted to vertically control user experiences of mobile services, albeit from the opposite directions. Now, with iPhone and Android, the contents and services are liberated from the tyranny of limited hardware and the control of operators who used to control what users can and cannot do with their mobile phones.

Before iPad, Amazon and publishing companies (including news media) were trying to do the same thing. They have been engaged in a battle over the control of vertically integrated publishing market. What Amazon wanted to do with its Kindle was simply replacing one physical device (paper) with another (Kindle) with digital capability. Yet, its approach to the consumer experience is remarkably similar with that of old publishers in the sense that it wanted to integrate device, network, service and contents, all under its tight control. It is like changing one evil with another from a user’s perspective. What iPad will do is to challenge this vertical thinking by introducing a horizontal thinking with loosely coupled layers of devices, networks, services and contents. iPad is in no way a perfect hardware. It does not have camera. It does not have GPS. It only supports AT&T network. And, it does not do multitasking. It is like a big iPod Touch. But, with all its hardware limitations, Apple’s iPad is forcing others to move from vertical thinking to horizontal thinking. After all, iPhone was not and is not the best hardware either. iPhone however executes the horizontal approach beautifully, fundamentally challenging the strategies of both mobile operators and handset manufacturers whose strategies are based on vertical thinking. Apple is yet again approaching to the publication and media industry with the same horizontal approach.

The horizontal thinking does not respect industry boundaries, which is vertically formed around physical device which controls network (delivery mechanism), services (function) and contents. Instead, it see things through loosely coupled layers that cuts across different vertical stacks of what used to be different industries. At the end, perhaps, it will be Google who will introduce an Android-version of tablet device that will completely decouple these layers across several different industries.

Professor | Writer | Teacher Digital Innovation, Design, Organizational Genetics Case Western Reserve University

2 thoughts on “the impact of iPad

  1. Hi,
    i would disagree slightly with your point about what Apple did was to totally remove “vertical integration” per se in that it replaced the mobile operators’ vertical ecosystem with its own itune ecosystem albeit with space for other providers to come in. Similarly, its foray into the ebook reader with the iPad is doing the same thing i.e. enlarging the ecosystem of iTunes to another set of emerging devices.
    Essentially Apple’s iTunes ecosystem is the key competitor albeit it uses its devices as a “trojan horses” to gain a foot in the door of these network industries (mobile phone and in a some sense the book distribution network).
    My view is that your example of Google’s Android is probably the one that hits the nail on the head of what it means to really disrupt vertical industries. By truly opening the apps and service platform i.e. challenging the iTune ecosystem, Android is driving a platform that is closer to making horizontal the service space. Of course, the interesting thing here is the revenue model for Google is very different from Apple’s and Amazon. is that something that drives fundamental rewriting of competitive rules or boundaries?

  2. There are two things that are being discussed here. One is the transformation of industry structure that is vertically oriented to horizontally stacked. The other one is who’s at the center and how open it is. I was focusing on the former and the role that Apple played. Whether Apple’s iTune is in the center of the ecosystem or not is another matter. What Android is doing is pushing it further by making it open even further. Google is in a unique position to do so as it is not intending to make money from the mobile eco-system directly. Instead, it is simply expanding the search market where it is making profit.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: