The Gillmor Gang - Mike Vizard, Loren Feldman, and Marc Canter - discuss iPhone 3G, Android, and the rest of the mobile media market. Recorded Tuesday, June 10, 2008.

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Gillmor: Hi, this is Steve Gillmor, welcome to the Gillmor gang. It’s Tuesday, June 10, 2008. We are going to continue the conversation today about what Apple has brought with the latest version of the iPhone and some additional services.

Joining me today, let’s see, somebody from 4015, is that Dan Farber?

I don’t know who that’s. And Mike Vizard, are you there?

Vizard: I’m here, how are you doing?

Gillmor: Good, what’s going on?

Vizard: It’s sweltering here in New York. It’s is like 97+, I will hunker down.

Gillmor: Have you looked into the Apple announcements at all?

Vizard: Yeah, I looked into some of them. I’ve got to say that was pretty impressive all across the board. I expect to see a lot more pickup of the iPhone inside business environments. And I thought what they did with Sync was pretty clever. I mean I don’t think the idea is all that novel and I think people have been working on the concept for a while, but it looks like suddenly they’ve started a march on Microsoft and they look pretty sharp.

Gillmor: Now what do you mean by Microsoft or where is the march on Microsoft?

Vizard: Well, Microsoft’s talking about its Sync strategy about a couple of months back and it looks like the Apple’s got an interesting implementation of Sync right now. I mean it may not be as elaborate as everything that Ray Ozzie has been talking about, but it shows a general direction that’s more tangible.

Gillmor: Why do you say it’s more tangible?

Vizard: Because it’s going to be shipping sooner and the people can use it.

Feldman: And they also have that..

Gillmor: Who is that?

Feldman: I’m sorry, it’s Loren. It’s Loren, I was just going to jump in for a second, I didn’t mean to interrupt though.

Gillmor: No, that’s all right. Yeah, just let Mike finish. Go ahead, Mike.

Vizard: I mean I think that Apple will get, I guess, a footprint out there of people using that service and kind of getting used to that service before Microsoft is able to do something similar around Windows Live and getting their basic services, but it gets people into habit.

Gillmor: Loren, you were saying?

Feldman: I was going to say it’s more tangible because they have that cool little cloud icon, but I agree completely the habit thing is really important. Just like iTunes and the Store kind of thing. I agree the whole same thing, just made easy and here. So I think it’s huge.

Gillmor: Well, I disagree with both of you. I think the problem is that it’s $99 as opposed to free. I think free always wins.

Feldman: Yeah, I mean the real competitor is Google in a way, more than the Sync, I think they are going up.

Vizard: There are a lot of dirt cheap MP3 players that aren’t going anywhere out there, so I don’t know if free is always going to win.

Gillmor: Well dirt cheap and free are two separate things. We are not talking about cost when we talk about free services. I mean Google has done extremely well in terms of disrupting some of the inviolate constituencies that Microsoft has been enjoying for years.

I mean people no longer think necessarily or don’t think and just go ahead and buy Office these days. Some of them think to themselves, “Do I really need that?” I’ve got it at the office, but for home, I don’t think so. And it’s forcing different models on the part of Microsoft in terms of selling the Office and also the operating system. They are having to repo back to XP, they are selling student versions of Office, and in some cases they’re giving it away for free.

Feldman: I agree with you, it would be awesome if it was free or bundle it for a year for something, but again I see it more as like the Google thing, because like I know in my phone, I decide my calendar, bookmarking, Google and all of that. I have even recently started just using Gmail on the web as my main mail app on the phone.

Gillmor: Because you can search with it.

Feldman: Well you know, I don’t know for some reason at least with my setup, I’m using the iMap, but other than that the Gmail is always instant and up to date for real where sometimes there is a little bit of a lag with the mail app.

Gillmor: I mean are you talking about the iPhone mail app?

Feldman: Yeah.

Gillmor: I haven’t noticed that, but I mean the iMap, have you used the iMap version on the iPhone?

Feldman: Yeah, that’s what I’m using now.

Gillmor: Right.

Feldman: So, it’s setup like that now and just sometimes I don’t know, it’s just not perfect for some reason. There always just seems to be a little bit of a lag, but I don’t know, maybe that’s just me.

Gillmor: Well why would that suddenly get better by spending $99? I don’t think so.

Feldman: I don’t know. I mean, it’ll definitely be a nicer interface or certainly at the very least as good. Listen, I’m a huge Mac guy, I have never used any of the online stuff. Do I think that I would use this? I don’t know, probably not. Do I care about the $99? No. But in theory I agree if you, it sucks. I don’t know if it’s going to be that much a hold back though.

Gillmor: I don’t think it’s odd.

Feldman: I don’t think it’ll be that much of a barrier, though.

Gillmor: I think it’s a smart idea. I think that Apple’s done a really good job — as Mike puts it — of introducing something that’s coming down the road from Microsoft and eventually Google introducing it right now at a price point that will probably at the high end, people will just absorb it. I mean I have never had .Mac account except as a journalist.

Vizard: Do you guys think though that Samsung or somebody who is selling more of a Windows-based platform and is talking about coming out with their own iPhone-like capabilities next month. And I just wonder will they offer some more similar services as these and will each of the carriers have a similar type of service?

Gillmor: Who is doing this?

Vizard: Samsung.

Gillmor: What’s Samsung?

Vizard: They make a whole lot of phones out there. They have a large share of the mobile phone market.

Gillmor: I know but I have never bought a Samsung anything.

Vizard: Well, a lot of people have. So, there are a lot of people on different carrier networks that aren’t on AT&T that are sitting around going, you know what, I think I will wait for my carrier to bring me something that looks similar to an iPhone.

Gillmor: I completely agree, but I think they’re all going to be running Android as a matter of fact.

Canter: Yeah me too, I mean, I have AT&T service, I also have Verizon. I have a real nice LG touch screen vibration, it’s really cool, even a reasonable — I don’t know what OS they use over there at Verizon, but it’s certainly better than what I have in my N95 on AT&T. It’s not so much the hardware. Samsung make nice phones.

There are other people who can make nice hardware, but you know it always the OS that kills you. Any of that simian bullshit or whatever is left of that consortium of little companies in Windows Mobile, I think they’re all done. I agree with Steve on that where I think eventually you are looking at Android and this. I think the other guys are in deep shit when it comes to it.

Gillmor: Mike?

Vizard: The other guys have millions and billions of dollars to throw at marketing issues and to them this maybe and they might be a couple of revs behind the tech side, but they are willing to go spend all kinds of money on the marketing side, so I wouldn’t count them out just yet.

Feldman: Well, I don’t know, marketing, it’s tough. I mean, how are you going to market against Apple. The N95 is awesome, it’s great, it’s cool, it has so many more cool geek-tech features and nobody cares. It’s tough. I mean, the Nokia guys, when they get defensive, when someone’s talking about the iPhone, their big rap is, “By the time it took you to say that, I sold 12 phones.”

I get that they sell billions of phone and stuff, but for whatever reason they are having a very hard time despite the big dollars, getting any kind of substantial mind share here. I mean, any of these other guys are.

Vizard: I just think the nature of the captured phone market around different carriers gives them a shot still.

Feldman: Right.

Gillmor: I agree with what Mike is saying, but I think you’re not factoring in the power of what Android is.

Feldman: I think Android is huge, like I said.

Gillmor: I didn’t say you were thinking it. You agreed with me already. I was trying to get..

Vizard: I just don’t think I’m going to see an Android phone any time soon.

Gillmor: Well, I already saw one. And it was already interesting enough that it made me start to think there was going to be significant pressure. Not necessarily on Apple, but on Microsoft, for example. I think Microsoft’s only play in the fairly near future, like in six months, is going to be to open up their architecture with Mesh and join up with Android as the OS for their phones.

Canter: So you think Microsoft has to have OS Google at the front end? And they’re just going to take care of the Syncing technology?

Gillmor: I think they’re more natural allies. I think that what’s going to happen is that Apple and Microsoft have been natural allies in a way due to this hardware lock for quite a while. Essentially Apple has gotten themselves into the position of being the best PC in the marketplace, and what’s happening right now is that there’s going to be a tension between Google and Apple that’s going to be exploited by Microsoft.

And the only way to do that, to exploit that, is by coming some distance in that direction in terms of their support of open technologies. There’s no reason why Microsoft can’t build a skin just like they’re doing with Moonlight, which is he mono version of Silverlight. There’s no reason why they can’t incent that in the marketplace. Basically an open source implementation of Android that has deep ties into Silverlight and the Microsoft fundamentals.

Feldman: I can see the Silverlight angle, I just wonder if Microsoft would — it their ego would allow it to be reduced to kind of the backend plugin almost, you know?

Gillmor: I don’t think that Silverlight — it’s one aspect of this. The other aspect is the Mesh.

Feldman: No, I mean the Mesh. The Silverlight I like and that makes sense.

Gillmor: I understand what you just said. What I’m saying is that the Mesh part of — Mesh is not Silverlight. Silverlight is a backend. It’s a UI and a rich client interface that’s among the targets of Mesh. But Mesh is built on open protocols. And there’s an opportunity for Microsoft to go open in this way, because they can basically wire up in the same way that Apple is doing to its hardware to the max, with Micro-Me or whatever it’s called.

They can do the same thing to all the PCs out there. But if they try and push a third platform around Windows Mobile, I think they’re going to get their clock cleaned.

Vizard: Right now the market share numbers we’ve seen indicate that Linux is taking it hardest on the phones. Windows Mobile seems to be flat. Blackberry and the Mac seem to be doing most of the growing.

Gillmor: Right. And once the reference implementation of an iPhone-like Android phone hits the marketplace, you’re going to see that one growing substantially quickly. The thing that’s interesting about the price point of $199, is that not only does it in the short term lock out the rest of the marketplace — most specifically the Nokia phones, which have yet to be manifesting themselves in terms of a web UI, particularly. They’re still stuck on video and all that stuff.

But also, in the medium term, it opens up the possibility that another carrier or two can come in with an Android phone that has 80% of the functionality of the iPhone and can do much better. Because what they can do is they can go where the iPhone has been restricted, which is in synchronization, streaming, all the 3G stuff where the iPhone business play, where the restrictions that they have in place in order to keep AT&T at bay and the record and the film companies at bay — all of the sudden that starts to go away.

And I think there’s going to be a lot of competition there.

Vizard: Yeah, I think there’s going to be a lot of happiness about the native capabilities to talk to Exchange, especially compared to a Blackberry. A lot of people are going, “Exchange to the phone is the killer app.” And here we go. So there’s not additional hidden cost hiding in the phone in terms of connecting it back to Exchange.

Gillmor: So what about this Mobile-Me Exchange replacement. That’s a pretty powerful play. It’s kind of like a combination of Gmail and access to an Exchange-like server. It’s potentially pretty important.

Vizard: Yeah, it could be important. I just think from a business perspective there’s a lot of commitment already down on the Exchange side, and how many people are looking for a new email account to replace Gmail or Yahoo Mail, or whatever they’ve got on the consumer side?

Gillmor: Yeah, but we’re not talking the consumer side here. When we’re talking Exchange, we’re talking about business mail.

Vizard: Yeah, I know. But there’s not much heavy movement to rip out Exchange and put something else in there just yet. I don’t think a service from Apple is going to get every business user or every business organization or client going, “OK, now’s the time to pull out Exchange and go over to Apple Mail.”

Gillmor: OK, so then you’re kind of with me, which is that the Mobile-Me is not going to have a significant impact.

Vizard: On the business side, no, but on the consumer side I think there’ll be a lot of consumers that’ll find a function for that. Or even small business, where it’s five guys and under, that might be viable.

Gillmor: So for $99 a year, you get three data types, but none of the other data types that people are going to be more and more interested in, namely streaming, audio, and video, which is basically outlawed on the iPhone.

And instead what you’re going to get is this — essentially you get Push, Rim, Blackberry-like email. As opposed to doing it on demand, as Arrington talked about yesterday. He says what I think: “Yeah, for free.” And by free I mean if it was ad-supported or behavior-supported the way Gmail is. Or you can run it the way Microsoft is, and I would probably wholeheartedly support it.

But to spend actual money to get services which are already being given away by both Microsoft and — or will be Microsoft and are by Google. I just think it’s a non-starter.

Vizard: So how long do you think they’re going to hold their position on $99 before they just say, “What’s the point? Might as well give that one away for free because it sells the rest of the service anyway?”

Gillmor: The only time that they haven’t held their position on marketing products at Apple is when they withdraw them from the — when they’re failures. I think it’s possible — .Mac has been largely a failure for a long time, and I don’t see that it’s much more attractive now.

At $99. So they’re going to give it away for two months. What are they going to do, extend the time that it’s given away.

Vizard: Sure. He’ll just do what he did last time. He’ll get up there and say, “We’re not perfect. We overpriced the phone and we’re sorry, and now we’ve got volume manufacturing in place and we’re coming out with a cheaper phone. Sorry, everybody.”

And everybody kind of just blinked and moved on. So he could do the same thing over again.

Gillmor: OK, but where are they going to replace the revenue? What about the pressure that’s going to come at them to unbundle from the WiFi prison only access to any kind of a data type other than music that you buy from the iPhone store, from the iTunes stores.

Vizard: Well, that they can probably hold off longer just because of their position around the iPhone. I mean the iStore software. And they’ve got their music kind of trapped in those environments anyway, so they’ve kind of got a gilded cage there. They can probably resist that for quite a while.

Gillmor: What if Android comes out with a Nokia or a — what’s the name of that company that you were talking about?

Vizard: Samsung.

Gillmor: Samsung. What is there’s a Samsung Android phone that hits the marketplace in four months?

Vizard: With or without a big music library to back it up?

Gillmor: With the sort of a Last.fm Pandora type of streaming deal?

Vizard: I just don’t know how many people are sitting out there going, “Having streaming video is critical to me.”

Gillmor: I don’t think video is critical at all, but I think audio is totally critical. Once you get the last mile to the car, or the device that you can plug in — which is what I think the iPhone is — if there’s a second one that plugs into the same slot, are they going to protect that with patents? Do you really think that they can protect the form factor of the plug that goes into the car?

Vizard: No, I doubt that.

Gillmor: OK, there’s the universal adaptor that accepts an Android phone just like an Apple phone. And once it’s there, it contains not only everything that you’re doing, the GPS stuff comes up and tells you where you are. You don’t need a GPS. You take the GPS with you when you leave the car.

You take all your preferences, all your email, everything else, it all is portable to the car and it’s coming in over streaming 3G. The people that are going to be afraid of that are the satellite guys. It’s a huge disruption and we’re right on top of it.

And you don’t think that Google has some impetus to be able to compete against Apple in this space? They’ve got one carrier that they can lock down in this country.

Feldman: Well, the AT&T thing is ending.

Gillmor: No, in 2012.

Feldman: What do you mean, 2012?

Gillmor: According to the people in the chat room.

Feldman: I don’t know. I just read today that AT&T announced in the thing that at least the rev-share part is ending. They’re going to be out before 2012.

Gillmor: Well, I don’t think so. But let’s say that — first of all, it’s not ending, it’s just that they’re switching it from the sweetheart deal that they had to one that’s much more similar. According to KShep in the chat room, AT&T had a five-year exclusivity on the iPhone.

Now obviously they can make some sort of a negotiation and an adjustment to that. But let’s just say that at least for another two years or so..

Feldman: No, I agree. It’s funny you brought that up. I’ve always hated satellite radio. I’ve always said it’s about national WiFi. Super WiFi, WiFi Max, whatever. National coverage. And that’s why Sirius and those companies were dead. And I completely agree with you.

Android — I’m not a huge fan of streaming necessarily. These Samsung devices, whatever, still have gigs to spare. But again, it’s game changing and huge. It’s huge. Android needs to get to market fast.

Vizard: Most people are already plugging their iPhone into their car and are already quite happy.

Feldman: Yeah.

Vizard: It’s music they have locally, and I don’t think that streaming audio is going to change that behavior.

Feldman: No, but suddenly having a phone with an OS that you can get to it in three clicks and opposed to 30, is going to mean more devices that they can add to that.

Gillmor: I’ll give you an example of why it’s going change everything and why it’s going to do it fast, Mike. Right now there are two or three shows that I would really like to be able to have on the road while I’m traveling. My kids go to school in San Francisco, we’re on the road two hours a day. That’s a two-hour window that’s just not reclaimable any other way.

And there are lot of people. You take the train in, there’s just a lot of people who are in that situation. And that’s extremely valuable. In the radio business that’s what is called drive time, and it’s where 80% of the revenue is.

There are shows that I would very much like to be able to have access to in that environment. One of them would be “Hardball” on MSNBC. Another one would be “Countdown with Keith Olbermann.” These are political shows, they’re not available right now. I would say that within the next month or so we’ll start to see podcasts becoming available of these things. What?

Vizard: That may be to a certain degree, but I suspect the vast majority of people are listening to their music that they loaded onto their iPod or iPhone. They’re not going to be listening to Chris Matthews or the Gillmor Gang.

Gillmor: No. I’m not trying to say that there are going to be large numbers of people. This is not about the Gillmor Gang. This is about the ability to be able to have a combination of interactive real-time feedback to the cloud and a combination of persistent stuff that you like listening too and real-time news.

It takes the lock-in of the licensees of the FCC signatories in terms of the large television networks, the large cable networks, all those guys, and puts it basically on the same level as smaller consolidations of more targeted information.

And when that happens it’s going to be a big deal, because so much of the broadcast models are disrupted by the fact that they have to service a sort of mediocre middle sort of an audience. And these kinds of strategic, targeted information are much more desirable. And there’s a lot more — if you’ve got a feedback loop — there’s a lot more up-sale of the economics of it from an advertising and marketing perspective.

And I think that’s going to be available within a few months. On July 11, there’s going to be a crippled version of it. How much longer after that’s it going to take Google to be able to make a phone — which I already have seen operating — with a significant degree of similarity to the look and feel of the iPhone. I saw that a month ago, in public. They’re not that far away.

Vizard: I don’t know, I don’t think that having 500 channels on cable TV has helped improve the quality of cable TV. And I wonder if having 10, 000 channels of audio is going to improve the quality of the content experience.

Gillmor: It’s not about the number. You’re experiencing this, we’re all experiencing this, in the media business, that it’s a flight to quality. It’s not about these broadcast audiences any more. Certainly those broadcast audiences are going to maintain a tremendous amount of share, mostly in the sort of Rush Limbaugh live kind of audience.

And then public radio has “All Things Considered” and it has a tremendous market share, a real resource for them. If that was available not just over the licensed stations in each market… On a previous show I asked somebody who was calling in from Texas about a drive across Texas basically, whether or not you can go from one 88.X radio station in public service to the next one.

I used to be able to do that in South Carolina, and I would never lose the signal. But that’s not easy to do. With a 3G network that’s reasonably easy to do. Now all of the sudden you have a national information network that isn’t necessarily controlled by Rupert Murdoch and four other guys.

Canter: But you’re going to have to be able to index all this content with metadata, right?

Gillmor: What’s the point?

Canter: Well, you can’t find anything if you don’t know what’s on the podcast.

Feldman: But it’s always something new. It’s going to be moving so fast anyway. Like, yeah, you do have to index it, but it’s a small screen, people aren’t going to be scrolling. It’s constantly — content’s going to be pushed to it.

Gillmor: RSS works in large part because it creates an indexable — it creates shelf space. And what I think Mike’s talking about is that the big vendors are going to continue to have access because of the amount of marketing dollars they can throw at it, to these big indexes. That’s not going to go away.

Vizard: Right. Look at the game that happens on the Web today where everybody’s playing for Google page rank. Now it’s going to be I’m playing for page rank on an index for audio. It’s going to be the same thing, and they’re just going to throw a lot more dollars at it.

Gillmor: Marc, is that you?

Canter: That’s me.

Gillmor: OK, can you mute when you’re not talking?

Canter: All right.

Gillmor: Thanks. Go ahead. Sorry, Mike, go ahead.

Vizard: You want me to repeat that?

Gillmor: Yeah. Go ahead.

Vizard: It would be the same game that they play on the Internet today where everybody’s going to be gaming the index engine to get as a high a Google page rank as they can get. And it’s going to be an index of podcasts that they’ll game the same way with the same SEO-type techniques. And whoever has the biggest amount of SEO /marketing dollar budget winds up at the top of the index list.

Gillmor: But once you get a core audience that you can build out, where you can find success at certainly say 10, 000 listeners or around there — 10,000 to 100,000 listeners would be the range between the Gillmor Gang and Leo Laporte’s shows.

At that point, there’s an opportunity to be able to build out that network and basically be able to own a large share of that audience’s time. And once that happens, that’s a considerable market penetration. You don’t need to try to talk to millions of people. And there are syndication possibilities to get to that marketplace eventually.

There are people who listen to this show and the previous their show, they spend maybe 30% of their listening time listening to this. Obviously that can be rewarding or not. The point is that this kind of a model is going to have a substantial take-away in a streaming-enabled marketplace.

I mean, I hate streaming. But have you ever tried listening to the radio in the car? I’ve got two daughters, one of them in the back seat, you can hear her coming through her headphones, and it’s driving the little one insane. And then she wants to listen to Disney Radio, and we end up not listening to anything because there’s such a difficult time with all of that.

So to have a streaming thing that coming in through earphones or very quietly on one earphone, it may not be the most exciting sense-surround experience, but it’s going to work pretty good.

Feldman: Yeah. I mean the radio function in iTunes was always like a sleeping giant to me. You know? And I like the concept, Steve. I always have I’ve spoken about it in a bunch of videos. Yeah. That’s just huge. Once you have that national coverage. You just can’t have the drop-outs.

I still think it’s years away, of having that real kind of coverage for the whole coverage.

Gillmor: What do you think that Apple thinks that they’ve bought here, with this next generation of stuff? Do you think that it’s just going to be — Marc Canter, can you come in on this?

Canter: Yes, gentlemen.

Gillmor: So what do you think that Apple is going to get out of this 3G generation of iPhones? Forget about from the core iPhone audience. What about from a media perspective?

Canter: There’s a lot of different aspects to it. Integrating the iTunes and iPod functionality into a phone is key. How this unfolds — you know, EMI is laying off all the record presidents, so there won’t even be people running the labels. It’ll just be lawyers that are selling off rights, and they will look for distribution channels like iTunes to partner with.

So Apple continues to spread their control, though hopefully other will learn from that, hopefully Nokia. The data path, the pipeline that they’ve set up to be able to push stuff onto the phone is pretty interesting, from my perspective. And it provides an opportunity to extend itself. So Meebo and Twitter and a bunch of other should really like that future.

But as I said to you earlier, Steve, when we prepared for this call today, I think one of the things that people aren’t taking into account is what Apple does in the living room when they take on Microsoft’s Home Media Center. Because clearly Microsoft doesn’t understand what it’s like to be human, and in theory Apple does.

So I expect them to do Apple TV 2.0, the next version of that platform, where once they’ve got all these infrastructure things established, the real payoff is when they can put boxes into the living room and integrate television, your music and video collection, online.

And that’s the real payoff, to create that integrated convergence platform. That’s where Apple’s headed towards.

Gillmor: Mike, what do you think?

Vizard: I think he’s right about all those elements. And I think that’ll be a bigger plan. But I think the streaming audio thing is a bridge too far, and the quality of that scares Apple right now. So we might be looking at another two or three revs before that happens.

Feldman: But the living room is where the real money is, you know?

Gillmor: The what is?

Feldman: The living room.

Gillmor: Before we get into it, I don’t want to leave what Mike said unchallenged, but I’ll just bookmark it and come back to it. What makes you think that Apple’s going to be able to grab the living room?

Feldman: Well, so far at all, the only one who’s attempted to get there is Microsoft. They have this thing called Windows Home Media Center. It’s has 100 million installed base, but very few people actually use it. But they also have this thing called the Xbox. So at the end of the day, all of these devices connect to the Web and everybody want to by media.

So Microsoft hasn’t been very good at the media devices, but they did invest $5 billion. They lost that on the Xbox and at the end of the day they kicked Sony’s ass.

Gillmor: My younger daughter has a Mac in her room, and she has a cell phone. She gets on that Mac and goes to websites, whatever they are — she is seven — so you can imagine what those sites are. Then she calls up her friends, and they do stuff over the network.

Now, she doesn’t have an Xbox, she doesn’t have an Internet connected phone or device, but she basically mashes it up. Something that’s happening right now.

Canter: Right. When I go on the road, I use my Slingbox to dial into my home to look at all the recorded shows that are on my Comcast box. That’s totally a scenario I use. And let’s not forget the car, as well. As you are getting ready to go out onto the road, that’s when you listen to all these podcasts, when you’re driving in the car.

So you want to download from your home machine, your home network into your car and load up the playlist for that day’s journeys.

Gillmor: Yes, and my point would be that you don’t need to download it if you have a 3G connection. You just stream it from your box at home.

Canter: Yeah, and by the way, I think the most significant announcement of yesterday was not the iPod. It was them finally retoolin.Mac. Apple having a clear cloud strategy and a set of services in the cloud to do anything of a number of things. They have been really good at photo sharing and creative video editing stuff. But tying it into iTunes, so my permanent iTunes collection is there in the cloud.

All the synchronization stuff, gatewaying over the communication, gatewaying over the games, connecting into living room in the homes, that’s where the future is. And Apple has a vision of that. They can implement in a relative fashion. They have got a war chest. They have got a machine that crank up these kinds of experiences. I think that’s where Apple headed.

Gillmor: OK. What Loren and Mike and I were talking about before you got here was basically, yes, of course, that’s the Apple strategy. However, I think that there is another very large player that has a really good strong chance of being able to become the number two and the volume player. And that’s not Microsoft. It’s Google.

And I think Android is a huge play, part of it.

Canter: Alright, so may I ask a dumb question? Let’s extrapolate that to desperate Motorola goes ahead and builds these Google Android phones…

Gillmor: Well, that’s for Nokia.

Canter: Well, OK. So maybe there is Nokia too, though they are in a much stronger position.

Feldman: No, I like the Motorola angle. That’s cool.

Canter: What’s the cell system they are going online with? How do they communicate?

Gillmor: Via Google.

Canter: So Google is going to implement their own separate system?

Gillmor: They already have. It’s called Gmail. It’s called the engine, the app engine.

Canter: They will use WiFi?

Gillmor: They have all these services.

Canter: So these are WiFi phones using void.

Feldman: No, you are talking about what carrier they are going to be on?

Canter: Yeah, carrier.

Gillmor: Any of the four others that are not AT&T.

Feldman: Right, any of the other carriers.

Gillmor: And probably two of them.

Canter: They are not going to do that, dude.

Gillmor: Are you sure?

Canter: Why is it called a closed shop? That’s called brew.

Gillmor: I think Microsoft is the ultimate closed shop. I bet you anything that they are going to go open with this stuff in order to be able to get in the game.

Canter: And they are going to hurt Windows Mobile?

Gillmor: Yeah.

Vizard: I think the carriers are going to be forced to the table when you think what Google and Intel are up to. The WiMax that they want to build out. There is a global network which just a talking horse to bring the carriers to the table.

Feldman: And Google also has the mobile edge, that’s going to be licensed into the carriers.

Canter: To me, I’m fascinated with the conflict between Derek Smith, beyond Apple’s board. He is privy to this information. I mean, absolutely Apple is going to the living room, and as long as Google is not in the consumer devices game, it’s a complimentary relationship.

The moment that Google puts out the Android, it gets into the consumer services, now they are competing with Apple. How does that work?

Vizard: I don’t think there’s a living room to go to anymore. Yeah, to Steve’s point, people are consuming. There isn’t going to be much of a “television” experience. I may watch a high-definition television show on my laptop with someone in my family who happens to like that show.

But the days of everybody sitting around the living room watching that television are not coming back. Display for television is going to be either your Mac or your PC. Right?

Feldman: Part of the reason is no conflict there with Google and Apple in the big picture, is because Apple has the horns of the play. They don’t care what it’s going to be, that you are going to be watching on a piece of Apple hardware that’s hanging on the wall. Google’s on it, no problem.

Gillmor: That’s the theory that the Apple TV is going to be transformative, which I think it was when it was first shipped. But that it’s also going to grab the lion’s share of actual sales at the marketplace. History doesn’t show that.

Apple can continue to do really, really well, by garnering at the most, 10% of the market share. It’s high end, high value customers, etcetera. Nobody is saying that Apple is going to lose here. But there is plenty of opportunity for a consolidation that doesn’t come from the locked-box, closed system scenario that Apple has pioneered and won with.

Nor is it necessarily going to come from Microsoft kind of partnership with vendors with weaker experiences, that they really can’t keep under control. Google’s situation, in some ways, is the best of both worlds. If Android becomes a significant play, if Android is simply the switching system to get the bits, sort of like the super Slingbox, and just basically directs the bits to wherever you are, then that’s a very interesting play.

Isn’t that what the software architecture of their application environment is?

Canter: I think you are taking a lot for granted. For one, it will be 10 years before the mainstream world witnessed the launch of the cell phone. IPTV 10 years ago was an idea. Now 10 years later, maybe it’s scratching the surface.

Gillmor: I would agree with you. As I said in this show yesterday, I was sitting at the Google I/O conference with my head down playing with my Macbook Air, having a grand old time. All of a sudden I looked up just casually, not expecting to see anything, and I saw an Android phone that was significantly interesting in terms of its development.

Feldman: I’m a Slingbox guy. Do you think 3G is fast enough to be a true WiFi replacement, where I can get Last.fm playing on my iPhone all day?

Gillmor: Well, I have got a 3G card for the Macbook Air, and Comcast has gone down here several times while I have been on the Air streaming this video down to Los Angeles, where Jerry uses it. The delta, the latency, was significantly longer. But most people didn’t notice it, number one, because it’s sort of surreal to begin with.

And I switched over and I have been using this 3G stuff for two months now, with the Air. In other words, a very small, portable client with 3G. I’ve gotten used to it, even if I’m in a place where there is WiFi, particularly at conferences, where I can’t count on it, I just don’t use it, because 3G is substantially good enough.

Feldman: I guess it’s not going to be as big of an issue for audio. It sounds like it could be fine, but for the quick video stuff…

Gillmor: We just took down a rather substantial technology called radio.

Canter: I agree.

Gillmor: OK. So, radio is to vulnerable to this mix of technologies in a significant way. And the iPhone or a competitive clone of it, which is what I think Android is, are going to be… If you’ve got two platforms, then the kind of innovation that we’re looking for on the iPhone — which won’t come with only the iPhone in the marketplace — namely the ability to be able to get rid of the docking station and be able to get music and information, whether it’s produced and sold by Apple or not, to be able to get that over the public airwaves through a carrier.

If you’ve got one carrier providing that for a certain price, and then, all of a sudden, you have got two, and you’ve got pressure coming from an Android phone, that allows pretty much what the Zune is allowing from what I have been told, even though I don’t care about the Zune. If there is an analog to that, in an on-demand world, that’s a big deal. Against Marc Canter’s point, that’s going to push the marketplace forward rapidly, not ten years.

Canter: Do you think that they will hook up with You Tube and all these videos will be available through that Android? Is that it?

Gillmor: They already are. That’s already there.

Feldman: The thing is, I completely agree it’s a good thing. The key to all of these is a GUI thing. It has to be like two buttons, which it will be on Android. It will be about Internet radio, or just radio. And you click on it, that’s the first click. And then there will be a list…

Gillmor: It’s a URL on Twitter. You know? TinyUrl on Twitter.

Feldman: I agree, but the only game in town that will be able to get you there within two clicks…

Gillmor: No, it won’t be the only game. It will be Apple and Google.

Feldman: And Android, and that’s it.

Gillmor: And Microsoft will be surrounding both of those, to Marc’s open Mesh point, providing failover services and connection to the larger hardware base.

Canter: It’s going to be an historic day when Microsoft can provide backup services for Apple and Google.

[laughter]

Vizard: No, I think we are getting pretty close to that. I keep coming back to the big “So what?” So now I’ve got Internet radio on a mp3 player that I can plug into my car. Now, instead of me listening to Bloomberg or “Tintin Wins Here in New York” over the radio, I’m going to listen to it over the Internet radio. Big deal.

I mean, I’m still going to listen to the shows I’m going to listen to.

Gillmor: The shows that you are going to listen to are going to be all the same ones that you already listen to, but eventually, aggregators will carve out a certain amount of time for more personalized information. Those of us who have iPhones already are dealing with time-slicing.

Because we are listening to something on the iPod part of it, system, and a call comes in, it ducks down the music and you talk on the phone. When the phone call is over, it goes back to the song, rewinds it a couple of seconds and then continues to play it. That kind of multiplexing and aggregation, aka Twitter, is going to become the dominant mechanism for time-slicing information.

Yeah, it’s going to sound a lot like what we have now, but it’s going to have a lot more about what your friends consider to be interesting and important that just happened, whether it’s on the network or maybe not on the network.

Maybe all the news networks are being shrill, gamed around Fox, MSNBC, either to the right or the left, and then there is a bunch of people who are talking. Maybe you get the direct conference call from the campaign, be it a Weiner server or something like that, which a significant number of people vote on, on Twitter, with the idea that they would rather hear it from the horse’s mouth.

That’s going to start coming out, and that’s going to change the way the major news networks create their programming. I think it’s going to have a huge effect.

Canter: I think, certainly, interactivity is the key here. There has to be some sort of value added, that differentiates old radio from the new interactive radio.

Vizard: I would just like to remind you that I’m driving in this example, bouncing around the different time-slices and Twitter and checking who is saying what about what in my one-hour drive, isn’t probably what I’m going to do.

Gillmor: No, but it’s real easy. Bill Gates was right about a couple of things, and one of them is that you can teach the computer to tell you what is going on, when you don’t have your hands free. The information from the Twitter stream can be expressed in a number of different ways.

It can be synthesized by a conversation like this one, where instead of you reading all the stuff, we have already read it and we are arguing about it, and the takeaway can come in seconds, as opposed to half an hour. This kind of compressed, organized information — the synthesis of a bunch of surrogates for people will become more and more valuable.

It already is, at the so-called broadcast level. But, to Marc’s point, the ability to be able to feed back to the network, if you are able to Tweet back at the stop light — God help us all that we can survive this innovation.

Vizard: Then this becomes like the web version of a basketball game, because everybody is going to time-slice till the last five minutes.

Gillmor: Yeah, it’s going to look ugly. Trust me.

Alright, let’s go around the table once more and we’ll wrap this one up. Loren Feldman?

Feldman: Yeah.

Gillmor: I know you said it already, just say it again.

Feldman: Yeah, I said iPhone and Android world, period.

Gillmor: OK. Marc Canter?

Canter: I’m amused that everyone again just kowtows to whatever Apple puts out, they love Apple until they actually start to count up how much these Gphone contracts are worth at $10 a month more, so God bless Apple.

Gillmor: Mike Vizard?

Vizard: It’s going to be hard to say you’re a thought leader if you’re up in Redmond and everything you’re doing looks like you’re copying an Apple.

Gillmor: I think I’ve already said everything that I needed to say. This is Steve Gillmor. This has been the Gillmor Gang for Tuesday. I want to thank everybody who showed up, particularly Loren Feldman, Marc Canter and Mike Vizard. And especially thanks to those who couldn’t make it.

We’ll see you again tomorrow. Bye-bye.

[music]

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