Cairns Apple

With about $100 billion just lying around, Apple’s received a number of suggestions for how it can spend that cash. The latest comes from Erick Schonfeld at TechCrunch, who argues that Apple could use that money to invest in a new type of subscription TV service to compete with Comcast, Time Warner Cable and the like. But that suggestion overlooks a few very important facts about Apple, and about the economics of today’s pay TV business.

What Apple does and doesn’t do

For a clue into how Apple approaches the video market, you need look no further than how it’s dealt with every other part of the media ecosystem to date: It creates good user experiences across an ecosystem of great products that publishers can sell their content on.

It introduced the iPod and iTunes and allowed the music industry to sell their songs on the platform, and it took a cut. It introduced the iPhone and the App Store and allowed developers to create games, utilities, productivity tools and the like, and it took a cut. It introduced the Apple TV for the Hollywood studios and TV networks to rent and sell their movies and shows to consumers, and it took a cut. It introduced the iPad, iBooks and the Newstand and allowed book and magazine publishers to sell digital versions of their titles to consumers, and it took a cut.

You notice a trend here? Product, platform, revenue share. That model has been extremely profitable for Apple, in part because it’s had to bear little risk to collect whatever revenues and profits come from its partners’ content sales. What Apple does not do is pay upfront to have the luxury of carrying content and then shouldering all the risk while attempting to create a sustainable new business model for its partners.

The economics of the situation

But let’s talk about the actual economics of subscription pay TV. Time Warner Cable announced in its earnings Thursday that it paid somewhere around $25 a month per subscriber in content costs last quarter. Think Apple could do better? It can’t. Any new entrant to the pay TV market acquiring content licenses does so at rates higher than what others have previously negotiated. This was true when the satellite TV companies entered the business, it was true when Verizon and AT&T began offering IPTV services, and it will be true for anyone that attempts to create a virtual cable company.

Starting costs for Apple — or anyone else for that matter — to build a subscription TV service will be in the mid-$30s at the very least. Which means it’s not going to roll out a $25 or $30 subscription service or undercut your local cable company on price anytime soon.

You know how every quarter analysts dissect however many billions of dollars Microsoft has lost in its Internet services business? That would be Apple TV’s media business, quarter after quarter, if it decided to go down this road. Sure, Apple has a lot of money. And sure, Apple could bear those costs. But why would it? What’s the actual benefit for Apple or its investors?

The misplaced dream of a la carte

“But what if I don’t want all of the channels? That’s where Apple could really disrupt things!” It’s a familiar refrain to hope and wish and pray that someone like Apple will be able to do what others have failed at so far, and negotiate a la carte pricing for individual networks. That sure sounds good, and I’m sure consumers would love it! That is, until they saw the price tags associated with each of the networks that they would want to buy.

Even if Apple were able to convince Disney, for instance, to separate ABC, the Disney networks and ESPN’s sports networks from the bundle, it would be just like breaking up any other bundle: the cost to sell each network separately would be egregiously expensive. Prohibitively so.

As a consumer, would you pay $5 just for ABC? Another $5 each for CBS, NBC and Fox? $15 or $20 for ESPN? $25 for HBO? It’s not like these guys are just going to give those channels away at a small premium over what they get from cable. If they’re going to break the subscription bundle, they’re going to want to get paid to do it. In that world, how many channels do you think you could buy before the cost became more than what you already pay for a cable subscription each month?

The actual market opportunity

Put all that aside, though, and the truth of the matter is that streaming video is still a relatively niche market. How many people are out there who actually have an interest in a streaming TV service? In theory, the addressable market is every broadband household that also pays for cable service. But take a look at the number of Apple TVs that are out there (just 4.2 million) or the connect rate on smart TVs today, and you see that very few people are actually taking advantage of broadband-delivered video. That could change with the introduction of the mythical iTV, but it seems pretty tiny today.

Sure, Apple created the modern smartphone market with the iPhone or the tablet market with the iPad. But it’s not into creating new services. And it seems unlikely that Apple would introduce a new service like this, especially one that is likely to be risky, unprofitable and targeting a market segment that doesn’t yet exist.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• Q4 Wrap-up: SOPA and the future of digital content
• Connected Consumer 2012: A year of consolidation and integration
• Connected Consumer Q3: Netflix fumbles; Kindle Fire shines

No one can doubt the sheer awesomeness packaged in Apple’s recent quarterly performance. However, for me the real story is the company’s iCloud and CEO Tim Cook’s assertion that with 85 million sign-ups in three months, Apple is only getting started with iCloud. “It’s not just a product, it’s a strategy for the next decade,” Cook declared. The recent elevation of Eddy Cue to SVP of Internet Services and his generous stock options are a sign of how serious Cook is about iCloud. The $1 billion data center in North Carolina is more proof of the company’s seriousness.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• The future of mobile: a segment analysis by GigaOM Pro
• NewNet Q4: Platform mania and social commerce shakeout
• Quality of the cloud: best practices for ISVs

Trying to count who sold the most smartphones is a difficult business. That’s mostly due to Samsung’s decision to stop releasing unit sales figures for its smartphone sales. The company has taken to releasing sales growth percentages, and it is on these figures that market research firms are basing projections of how many phones Samsung shipped last quarter and all of last year.

On Friday, IHS iSuppli is the latest to weigh in. The firm says that while Apple came in first place in the last calendar quarter of 2011 in smartphone sales with 37 million, Samsung actually took the crown of world’s largest smartphone vendor of the year with 95 million shipped. (That’s not “sold,” so this is not a great way to compare, as we’ve previously discussed, but it’s what we’ve got.) Apple sold 93 million iPhones during the year.

IHS iSuppli is basing its Samsung numbers on information gathered when the company announced its quarterly earnings earlier Friday. I asked iSuppli analyst Wayne Lam how he arrived at the number and he said he was basing it off the “approximately 30 percent growth” figure that Samsung publicly announced. He interpreted that as “under 30 percent but over 27 percent.”

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• NewNet Q4: Platform mania and social commerce shakeout
• Connected world: the consumer technology revolution
• Flash analysis: Steve Jobs

Recent studies from Forrester  and Good Technology show that Apple’s iPad is doing very well in the enterprise, with new activations soaring. One company just deployed 1,300 of the Apple tablets across its sales force, because combined with the right software, it believes there is no better tool a salesperson can carry.

A recent report at InformationWeek details the story of Level 3 Communications, which recently equipped its entire sales workforce with iPads loaded with apps that provide access to pricing information; presentation creation; and display, corporate email, customer records and inventory checks. The iPad proved more than up to the task of supplementing and mostly replacing laptops.

InformationWeek goes into much more detail about what the iPads meant for Level 3, but the advantages for salespeople on the ground can be boiled down to three main categories:

1. Instant on. The iPad’s ability to instantly wake from sleep and pick up right where a user left off exceed that of even the fastest SSD-equipped notebooks, and it only sips power in tiny amounts in order to provide that functionality. That, combined with its superior portability, makes it the perfect tool for doing “quick checks between meetings, at an airport, or in a taxi,” InformationWeek says. With a laptop, five minutes in a taxi might not seem like enough time to make powering up worth your while; with the iPad, that’s a nonissue.

2. Connectivity. The iPad (at least the 3G models) provides always-on cellular network access, as long as you are within coverage range. Some laptops can offer that, but the process is still often more complicated than just tapping the wake button and being ready to surf, email or chat. But it’s not just cellular radios that make the iPad great for sales; built-in GPS positioning means salespeople can get locally relevant information, like clients or potential clients in the immediate area, in only a few short steps via task-specific software.

3. On-device demo. A laptop is an ineffective replacement for a catalog, and presenting a slide show on one is awkward. Using an iPad as a presentation tool, on the other hand, is natural. The tablet is easily passed around, can be read like a magazine, and can also output to external displays with less hassle and fewer steps than a laptop. And apps like OnLive Desktop and Iongrid make it even easier for iPads to sub in for notebooks capable of running desktop presentation tools.

Level 3 isn’t the only company to realize the value of iPads in the hands of a sales force. Sears, of all companies, announced in October it would begin rolling out iPads in 450 stores that same month, and TUAW noted at the time that Lowes and Pacific Sun were also expanding iOS deployments.

InformationWeek thinks 2012 will be a breakout year in terms of actual iPad deployments, just as 2011 saw a huge uptick in pilot programs. If that indeed comes to pass, we should see Apple easily beat the 40.7 million iPads it sold in 2011.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• NewNet 2012: companies and technologies set to disrupt
• NewNet Q4: Platform mania and social commerce shakeout
• LTE changes everything; LTE changes nothing

The sky is falling again in cellular land, and this time Siri is to blame. At least, that’s the assessment from an opinion article in the Washington Post  Friday morning claiming Siri not only unleashed a huge new pattern of data consumption on mobiles, but that in return, her piggy ways destroy the experience for the rest of us because of the shared nature of cellular networks.

From the article:

And building new capacity isn’t cheap. Everyone — not just the first-class passengers — ends up paying for it. So prepare for higher cellphone bills. And in the meantime? Prepare to sit and wait. That call to Grandma might not get through until the congestion clears.

Other alternatives might be less palatable, especially to anyone who wants immediate downloading gratification. We could stay off the grid or utilize fewer data-intensive functions. Or we could put some traffic cops on the beat to regulate our data demands and limit the traffic snarls and bottlenecks.

But if you think Siri is somehow responsible for the data overload, you ain’t seen nothing yet. Siri is the first generation of interfaces that will make it seamless and easy for us to surf the web from anywhere, and on any device or vehicle. So the author’s problem is one that’s only going to get bigger. Thankfully, it has a solution — one which he seems to ignore.

Paul Farhi, the author of the piece, makes a couple of errors (or maybe omissions is kinder) that are worth pointing out to the policy wonks in D.C., especially as they contemplate bills that would gut the FCC’s ability to make spectrum policy in the U.S. for the sake politics. Onto the problems:

Siri as data hog

Siri, the natural language processing service Apple introduced on the iPhone 4S, doesn’t consume the data Farhi says it does in his article when he says, “Siri’s dirty little secret is that she’s a bandwidth guzzler, the digital equivalent of a 10-miles-per-gallon Hummer H1.” Siri consumes very little data in sending your voice back to the servers to figure out what you want the phone to do, but what it does is make it that much easier to surf the web. Farhi seems to understand this, but his first characterization is blatantly false. Siri isn’t guzzling data; she’s making it easier for us to do so. We’re the guzzlers.

The airwaves as highways

The second problem with the article is more complicated. Farhi uses the popular highways analogy for how we send cellular traffic and explains that building out more infrastructure takes time. (One reason is because it takes about 10 years on average to get spectrum into the hands of carriers thanks to the politics associated with spectrum auctions.) But what he misses, and what is crucial to his point, is that there is more than one set of wireless highways. There are multiple types of licensed airwaves that are used for everything from satellite radio to cellular, and there are unlicensed airwaves where data is currently sent using Wi-Fi, Bluetooth and soon, WiGig.

When we’re talking over the air, there’s not one single highway to get us from Point A to Point B; there are multiple spectrum bands, technologies and costs associated with them. In this age, using wireless is like engaging in multimodal commuting. You use cellular to drive to the train station and the high-speed rails of Wi-Fi fly downtown. Meanwhile, you’re sharing those rails and highways with thousands of other commuters in neighboring airwaves that are the equivalent of bikers, skateboarders etc.

We can keep Siri and still call grandma. Here’s how:

That’s where Farhi missed a big opportunity to tell D.C. that instead of focusing on cars and the single highway, it should look around at all the other technologies out there. Stop listening to the carriers, who actually do have spectrum they can deploy if they want to work a little harder and spend a little more, and start thinking about how Wi-Fi or white spaces broadband (Super Wi-Fi) can play a role in taking congestion off over the air data networks.

Passing a spectrum bill that allows for more unlicensed airwaves would be a start, as would leaving the FCC to deal with the highly technical issues surrounding spectrum auctions. Pushing the FCC to investigate special access fees would also help, as it might lower the rate of bringing a fiber pipe out to areas so ISPs can support large-scale Wi-Fi or white spaces networks. But first, we have to understand how the wireless and cellular networks work, so we can propose viable solutions instead of blaming applications that make our lives better for congesting our network.

Since many of those solutions will require action (or inaction) from Congress and the FCC, the Washington Post missed a golden opportunity to educate its readers about possible solutions and push the debate forward with mobile operators about using Wi-Fi more strategically, making it possible for rural areas to use unlicensed airwaves to create broad coverage areas without paying an arm and leg for a gigabyte and helping Congress understand how the industry actually works.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• 2012: Data, spectrum and the race to LTE
• Confused about the wireless markets? Here’s a breakdown
• The future of Wi-Fi in the enterprise

While the target audience for Macworld | iWorld is your typical consumer, there are a few vendors in attendance focused on reaching developers. If you’re a developer yourself, or maybe work with developers in your company, you might want to stop by the following vendors during the show, or check out their sites if you aren’t able to attend.

SDKs and services

Audible Magic is showing its new TViD content recognition engine which can identify TV shows, including live events or first-time broadcasts. It creates a way for developers to build a second-screen experience tailored to what their users are watching.

Heatma.ps UI Testing SDK allows you to integrate touch tracking in your app to collect aggregate data from beta testers and/or real users of your app. Results are sent back heatma.ps’ server so you can view the data as a heat map of how users are interacting with your software, including where exactly their fingers are tapping.

MLState is demonstrating its Opa programming language targeted at web and social app development. Nuance is at the show talking about its consumer apps, but you could hit the company up for info on its mobile developer program if you’re looking to integrate voice in your iOS  software.

Payment solutions

For vendors that sell digital goods direct to consumers, eSellerate is at the show representing its e-commerce platform. You would use this instead of the Mac App Store, either to save money over the 30-percent fee Apple charges or because your app is prohibited from the App Store sandbox for whatever reason.

Fastspring is also present, talking about its all-in-one e-commerce, merchandising and fulfillment solution, which makes getting your sales tools in order an easy task, so you can focus on zapping bugs and getting a product shipped.

Prototyping and rapid development

TapDesigner is a new tool for prototyping mobile apps. It uses a drag-and-drop, WYSIWYG interface to allow you to rapidly build visual representations of what your app will look like, complete with custom navigation and menu bar elements.

WidgetPress FormEntry is in the Mac OS X Zone, talking about its tool for creating forms-based apps for Mac and iOS. This could have potential applications in any number of industries; for example, a realtor could quickly deploy surveys for customers to help them identify exactly what kind of property they’re looking for.

Consulting services

Carr/Ferrell Attorneys are there to guide you with IP, licensing, contracts, and other legal needs, which are still a big concern with ongoing problems like the Lodsys saga. This is one of the thorniest aspects of software development, and ongoing legal disputes between the biggest companies involved could always potentially result in fallout for smaller players, too.

That’s my bite-sized overview of what iOS and Mac developers might find most interest at this year’s Macworld | iWorld conference. Chime in down in the comments if you saw some other interesting displays or vendors aimed at developer’s at the show.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• 2012: Data, spectrum and the race to LTE
• A clouded view of Google Music
• Connected world: the consumer technology revolution

Online community cooking portal KeepRecipes launched an “iTunes for recipes” on Friday, in hopes of building an online marketplace for culinary ideas where cooks and gastronomic publishers can buy and sell individual digital recipe cards and eventually whole cookbooks.

KeepRecipes is starting out small. It has signed deals to distribute the contents of five cookbooks from two publishers, Gooseberry Patch’s 101 Recipes and Harvard Common Press’ Not Your Mother’s cookbook series. The site is also hosting individual recipes from seven famous chefs and authors, including Masaharu Morimoto of Iron Chef fame and New York Times food columnist and cookbook writer Mark Bittman, giving the portal’s members access to 1,000 different dishes, priced at 99 cents each. But CEO and founder Phil Michaelson said he is hoping he can build off that small core of cuisine, proving to publishers that there is money to be made distributing their cookbooks online and convincing consumers that some online recipes are worth paying for.

The comparison to iTunes isn’t just a gimmick. It is uncanny how closely KeepRecipes is following Apple’s music distribution model, all the way down to direct integration with the iPhone. The recipes are bought and stored through KeepRecipes’ online portal, where they can be sorted and searched, organized into collections — recipe playlists, if you will — and shared with up to five friends in the KeepRecipes community. A mobile app allows members to access their collections through the iPhone.

What’s more, those paid recipes become part of the members’ overall digital recipe collection within the portal. Michaelson said KeepRecipes is trying to do away with the concept of the digital cookbook as just another e-book, trapped in between electronic covers. Instead, the portal aims to help its members build a comprehensive digital cooking library — a task I can tell you from experience is almost impossible to do — by bringing in recipes from multiple sources.

“We want to provide a place where you can keep all of your recipes in one spot, whether it’s your family recipe, a web recipe or premium content,” Michaelson said.

Recipes found online can be grabbed through KeepRecipes’ bookmarklet or by entering its URL through the website. You can enter your own recipes manually, and you can “keep” any nonpaid recipe in your friends’ collections. Just as customers can annotate, comment and add pictures to their own recipes, they can do the same for the ones they have paid for.

The remaining obstacle to building a complete digital cooking library is integrating the thousands of recipes that sit bound on our bookshelves. But Michaelson is working on that problem as well. KeepRecipes is working with its publishers to allow members to download the digital contents of their physical books for a fee of $5 per cookbook.

If you read my post earlier this month on why digital recipes need to emulate digital music, this idea might sound eerily familiar. I thought I was being pretty creative at the time, but it turns out Michaelson and his developers have been developing that concept since KeepRecipes’ inception. Michaelson has already found solutions for problems that I merely posed, such as how to deal with digital rights management and controlling distribution.

In fact, KeepRecipes seems to have all the tools in place to make a comprehensive online recipe library possible. What it lacks is scale. That is understandable, considering KeepRecipes only launched in August, has only 10,000 members — of which about 15 percent are active — and is still in its early stages of funding. For a company of that size to have attracted the attention of even small publishing houses is impressive.

Michaelson said he has found cookbook publishers are eager to go online, but many of them see the inherent limitations of the e-book format, which is why they are working with KeepRecipes. Publishers are also concerned that once they make their cookbooks more digitally accessible, their recipes will escape into the wilds of Internet, where they won’t be able to charge for them. “They are very intrigued by the idea of a social portal and sharing on Facebook and Twitter,” Michaelson said. “But they’re also fearful of a total loss of control.”

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• Forecast: the future of the digital music industry
• Connected world: the consumer technology revolution
• Facebook and the future of our online lives

Samsung suffered another reversal in its patent battle with Apple on Friday morning, as the Mannheim Regional Court in Germany dismissed the Korean company’s second patent complaint related to 3G/UMTS technology. Last week, the same court had rejected another complaint involving a separate patent that also dealt with 3G.

Florian Mueller of FOSS Patents was in attendance at the court’s announcement of the ruling on Friday and said that Judge Andreas Voss didn’t specify any particular reason for the decision. The first ruling against Samsung last week also didn’t include a reason. Mueller said at that time that the reasons could either be that Apple had been found not to infringe the patent or that Samsung’s rights in exerting the patent had been deemed exhausted, which would result in Apple’s being granted a license by default. The same reasons could also be applied to Friday’s ruling.

For Samsung, this is definitely a setback, but it isn’t the end of the road; the company still has three other 3G/UMTS patents at issue in separate complaints filed with the Mannheim court. As long as the reasons behind the dismissals of these two lawsuits aren’t somehow related to all the patents in question, it could still claim a victory on one or more of those remaining.

Samsung could also still appeal the decision, and given that it, like Apple, posted record earnings for its most recently completed quarter, there is no financial barrier preventing it from doing so. With two companies at the top of their game slugging it out in the legal arena, there is little incentive for either to stop.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• LTE changes everything; LTE changes nothing
• Updated: Forecast: global mobile subscribers, 2010–2015
• 2012: Data, spectrum and the race to LTE

With about $100 billion just lying around, Apple’s received a number of suggestions for how it can spend that cash. The latest comes from Erick Schonfeld at TechCrunch, who argues that Apple could use that money to invest in a new type of subscription TV service to compete with Comcast, Time Warner Cable and the like. But that suggestion overlooks a few very important facts about Apple, and about the economics of today’s pay TV business.

What Apple does and doesn’t do

For a clue into how Apple approaches the video market, you need look no further than how it’s dealt with every other part of the media ecosystem to date: It creates good user experiences across an ecosystem of great products that publishers can sell their content on.

It introduced the iPod and iTunes and allowed the music industry to sell their songs on the platform, and it took a cut. It introduced the iPhone and the App Store and allowed developers to create games, utilities, productivity tools and the like, and it took a cut. It introduced the Apple TV for the Hollywood studios and TV networks to rent and sell their movies and shows to consumers, and it took a cut. It introduced the iPad, iBooks and the Newstand and allowed book and magazine publishers to sell digital versions of their titles to consumers, and it took a cut.

You notice a trend here? Product, platform, revenue share. That model has been extremely profitable for Apple, in part because it’s had to bear little risk to collect whatever revenues and profits come from its partners’ content sales. What Apple does not do is pay upfront to have the luxury of carrying content and then shouldering all the risk while attempting to create a sustainable new business model for its partners.

The economics of the situation

But let’s talk about the actual economics of subscription pay TV. Time Warner Cable announced in its earnings Thursday that it paid somewhere around $25 a month per subscriber in content costs last quarter. Think Apple could do better? It can’t. Any new entrant to the pay TV market acquiring content licenses does so at rates higher than what others have previously negotiated. This was true when the satellite TV companies entered the business, it was true when Verizon and AT&T began offering IPTV services, and it will be true for anyone that attempts to create a virtual cable company.

Starting costs for Apple — or anyone else for that matter — to build a subscription TV service will be in the mid-$30s at the very least. Which means it’s not going to roll out a $25 or $30 subscription service or undercut your local cable company on price anytime soon.

You know how every quarter analysts dissect however many billions of dollars Microsoft has lost in its Internet services business? That would be Apple TV’s media business, quarter after quarter, if it decided to go down this road. Sure, Apple has a lot of money. And sure, Apple could bear those costs. But why would it? What’s the actual benefit for Apple or its investors?

The misplaced dream of a la carte

“But what if I don’t want all of the channels? That’s where Apple could really disrupt things!” It’s a familiar refrain to hope and wish and pray that someone like Apple will be able to do what others have failed at so far, and negotiate a la carte pricing for individual networks. That sure sounds good, and I’m sure consumers would love it! That is, until they saw the price tags associated with each of the networks that they would want to buy.

Even if Apple were able to convince Disney, for instance, to separate ABC, the Disney networks and ESPN’s sports networks from the bundle, it would be just like breaking up any other bundle: the cost to sell each network separately would be egregiously expensive. Prohibitively so.

As a consumer, would you pay $5 just for ABC? Another $5 each for CBS, NBC and Fox? $15 or $20 for ESPN? $25 for HBO? It’s not like these guys are just going to give those channels away at a small premium over what they get from cable. If they’re going to break the subscription bundle, they’re going to want to get paid to do it. In that world, how many channels do you think you could buy before the cost became more than what you already pay for a cable subscription each month?

The actual market opportunity

Put all that aside, though, and the truth of the matter is that streaming video is still a relatively niche market. How many people are out there who actually have an interest in a streaming TV service? In theory, the addressable market is every broadband household that also pays for cable service. But take a look at the number of Apple TVs that are out there (just 4.2 million) or the connect rate on smart TVs today, and you see that very few people are actually taking advantage of broadband-delivered video. That could change with the introduction of the mythical iTV, but it seems pretty tiny today.

Sure, Apple created the modern smartphone market with the iPhone or the tablet market with the iPad. But it’s not into creating new services. And it seems unlikely that Apple would introduce a new service like this, especially one that is likely to be risky, unprofitable and targeting a market segment that doesn’t yet exist.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• Q4 Wrap-up: SOPA and the future of digital content
• Connected Consumer 2012: A year of consolidation and integration
• Connected Consumer Q3: Netflix fumbles; Kindle Fire shines

No one can doubt the sheer awesomeness packaged in Apple’s recent quarterly performance. However, for me the real story is the company’s iCloud and CEO Tim Cook’s assertion that with 85 million sign-ups in three months, Apple is only getting started with iCloud. “It’s not just a product, it’s a strategy for the next decade,” Cook declared. The recent elevation of Eddy Cue to SVP of Internet Services and his generous stock options are a sign of how serious Cook is about iCloud. The $1 billion data center in North Carolina is more proof of the company’s seriousness.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• The future of mobile: a segment analysis by GigaOM Pro
• NewNet Q4: Platform mania and social commerce shakeout
• Quality of the cloud: best practices for ISVs