The Apple Cloud

An Executive Summary

The Goal:

Host as many of our users’ core data and apps as possible to create the best mobile experience possible.

Differentiate via apps seamlessly integrated across devices

Re-think

Every major web app works GREAT on iPhone / iPad

Discontinue investment in Mail serviceInvest very seriously in storage and data

center technologyRefocus on differentiated arenas

(Safety, Security, Family)

Media iPhoto (Gallery), iMovie, iDVD, iWeb

GarageBand

Communications Mail (mail.app, me.com), Contacts,

iCal (Calendar),

Safety & Security Find My Phone, ???

Re-organize & Re-Brand Search? Maps? iDisk?

Apple’s Mobile / Cloud Product

Contacts

Maps &Location

Search

Browse

ID &Ph. #0

Three models

Where we shouldn’t fight: Mail / Search (for now on both)

Current battles: ID, address book, calendar, photos, documents, …

New battles (security, privacy, family)

Always battle to work great where we lose the battle. Exchange and mail are the models. Contacts and calendar are where we have it wrong.

Points to make The cloud is winning (Billy and Lala. Once you go you never

go back) But technology doesn’t matter as much as data does. So

storage key. Moving data sucks for us but more for the user. Storage cost gap is huge and growing with GOOG. The cloud is perfect for us, exactly the opposite of iWork web

logic. Our users are on PC’s. We need Apple experiences for them

and the web gives us that opportunity (another reason it is perfect for us)

Apple is THE Mobile Company

Amazing, Innovative Products

Amazing User Experiences:

Simple, Seamless, Beautiful

Cloud Software

Hardware

+

+

Local Software

Seamless Experience

“Holding the internet in your hands”

Goes Beyond Browsing…

Data and Logic

vs Web Apps

Data

Client Apps

Logic

Data

vs Cloud Apps

Logic

Each is the right choice at times:

But…

Cloud apps create truly seamless integration across devices

For a developer, Cloud Apps are:

Simpler

Easier to develop

Easier to update and maintain

Easier to keep consistent across platforms

Easier to split into re-usable front-end and back-end components

For the consumer, Cloud Apps

Never require install or update

Give identical experiences everywhere

Are available any time you are connected

Example: Lala

Because the owner of a cloud service can make it work BETTER on their device

Why an Apple Cloud?

The Ultimate Opportunity

Apple devices from Mac to iPhone to iPad are simply better at the web.

Which Fight?

Why cede the cloud advantage ?

The Goal:

100% of Apple users use Apple cloud

Recommendation

1. Invest in cloud expertise and infrastructure as key ingredients to mobile success

2. Focus on iLife as the key brand for seamless experiences across all devices

3. Invest / promote product categories where Apple can dominate

4. Re-organize to bring product teams together to develop those experiences

Apple’s Cloud Today

Apple’s Cloud

MM Quotes

I can't stress enough that MobileMe is failing me because I'm not willing to do what it's asked, which is to leave behind my other web-based services from Google and Flickr.

I find it inconceivable that anyone who has used other web mail clients such as gmail, yahoo, or msn, would say that MobileMe's email client is great. In fact, I'd say it's about the worst of the webmail clients I know of. Note I'm only talking about the web interface, not using MobileMe as an IMAP or POP server with a desktop client, which works fine.

In short, I'd be perfectly happy to pay $100 a year for over-the-air syncing if MobileMe allowed me to use other services than those from Me.com. But that's not what they're selling, so I'll just have to go without.

Ultimate verdict? Great for some people, but that body of people is rather wee.

MobileMe = Sync = Dumb Google = Cloud = Smart I am too far deep into MobileMe to feel like I could get out, but if i were just

starting out I would go with Google.

MobileMe

Favors This

At the expense of this

All the while offering poor functionality, performance, and reliability, and at a price 20x the competion.

Apple’s Cloud Investments today

Detailed Proposal

1. Own The Core

2. Build or buy key technologies and expertise

3. Ensure awesome experiences for all major web apps on Apple devices

4. Leverage strength in entertainment

5. Create new cloud product categories which are differentiated and valuable

6. Rebrand most products as part of iLife across devices

7. Deprecate MobileMe brand

8. Reorganize around key products

1. Own core services and ensure that AppleID is central.

The Core

Contacts

Maps &Location

Search

Browse

ID &Ph. #0

Search Web Search Devices

Apple

2. Build or buy a scalable, cost effective storage solution.

Investments

Storage

Data Centers

Search

Maps / Navigation

Web technologies / Scaling

Networking

3. Ensure great experience for all key mobile apps on all Apple devices.

gmail, ymail, gcal, etc.

4. Leverage dominant position in music entertainment and mobile applications to drive adoption of Apple cloud.

5. Create new Safety, Security, and Family product starting with Find My iPhone

6. Focus on iLife as Apple’s key brand spanning devices.

1. Merge MM gallery into iPhoto. 2. Create new iLife Communications product and start

with MobileMe’s calendar, contacts and me.com.3. Add Safety, Security, and Family

Include free and pay components as today.

Apple’s Mobile / Cloud Product

Contacts

Maps &Location

Search

Browse

ID &Ph. #0

7. Reduce cost in MobileMe as much as possible…Milk the cow.

$40 / Year --> $10 / Year

Gallery

Me.com Mail

Contacts

Calendar

Find My Phone

iDisk

Photos

Mail

Contacts

iPhoto

Mail

Contacts

iCal

8. Organization: Today

The Apple Cloud

iLife v.Cloud Media:

Comms:

Safety, Security, and family

iPhoto/Gallery, iMovie, GargeBand, iWeb

Contacts, Calendar, me.com email

Find my iPhone, …

iWork v.Cloud

Gilligan + iDisk

iLife Default (Free)

Push / Synced email from gmail, ymail, mobileme mail, etc.

Push / Sync’d calendaring via gcal, ycal, ical Permanent cloud Address Book (forever) sync’d to

Yahoo, gmail, etc. Sync’d photos everywhere (Lo Res) Cloud document storage up to X GB Basic cloud iTunes (Lala) Basic Find my phone (Definition TBD)

iLife Premium ($100 / yr)

40GB Disk Space @me.com email address with unlimited storage [move to

basic?] Unified view of email inbox. Perhaps include messaging and

voice as well? Advanced Find My Phone (definition TBD) Anti virus across devices Limited free streaming (Lala) on iTunes Discount on n Movies / Songs / TV shows (promotional) Discount promo on applications Free 1 year use of AppleNav (turnbyturn) Family stuff: monitor phone usage, review email / sms, find your

child

5. Bring iWork to the web and use iDisk as the core storage mechanism. Kill both Office and Google docs.

Competition

Google’s Cloud

Microsoft’s Cloud

Pricing

Basic: 12 months Free, then $1 / MonthOr simply free forever (yes!)

Premium: $49.99 / year

What?

For Mac Users

Offer MobileMe but with radically reduced cost.

For Everybody

Basic

Offer core: Maps, Search, Contacts, Payments

Universal Apple (Web) Id Special Entertainment / itunes offer Offer safety / security package Offer a Great calendar Me.com address for a price Ensure that other mail / PIM services

work great

Premium

@gmail.comgChatGroupsOpenSocial

Youtube (video)Google NewsGoogle Reader

Youtube (video)Picassa WebGoogle Docs

Google CalGoogle ContactsGoogle Notebook

Contacts

Maps &Location

Search &Browse

Payments

Advertising

me.com email

iTunes / Lala

GalleryiDisk

MM CalendarMM Contacts

Contacts

Maps &Location

Search &Browse

Payments

Advertising

Find my phone

Mobile Product Ecosystem

MailIM / ChatGroupsSocial Net.Voice CallingSMS / MMS

My Photos

My Documents

VideoMusicNews

My Videos

CalendarContactsNotebook

Contacts

Maps &Location

Search &Browse

Payments

Advertising GamesShopping…

Anti-VirusKid TrackerLost Phone Finder

Apple’s Mobile Product Ecosystem

MailIM / ChatGroupsSocial Net.Voice CallingSMS / MMS

My Videos

My Photos

My Documents

VideoMusicNews

CalendarContactsNotebook

GamesShopping…

Anti-VirusKid TrackerLost Phone Finder

Apple Google Microsoft

Search Spotlight (device only) Google Bing

Mail @me.com @gmail.com @hotmail.com

Instant Messaging Ichat Gchat msn messenger

Calendar MobileMe Cal Google Cal Windows Live Cal

Address Book MobileMe contacts Gmail contacts Windows Live People

RSS Reader Reader

Documents Google Docs

Notebook Google Notebook

Photos My Gallery Picassa web Windows Live Photos

Media iTunes storeLala

Youtube (video)

Storage (backup) MobileMe iDisk

Social Web Opensocial (?), Orkut, and groups

Windows Live Groupsand Spaces

Todo List

Cloud Services

Questions Is this the right competitive set? Nokia? RIM? Does the cloud make a difference in the main

battle for personal computing (smart phone) supremacy?

Should Apple compete in search? Should Apple compete in communications? Does it matter where / how you store and use

your personal information (calendar, address book, todo list, photos, etc.)?

Differentiation Seamless Integration Speed Ease of use Coolness / sexiness Apps Price Quality -- hardware, screen, camera, voice Brand

Threats

Search

Maps

Web Mail

Web Docs

Web XYZ

Switching Barriers

Installed Applications

Purchased Music

Brand

Love

Strategy A: Apple Classic

May the best phone win

Create a connected experience on the iPhone which is best with Apple products

Focus on MobileMe

Focus on iTunes+Lala

Focus on App platform and consolidate lead

Strategy B: Apple Web

Compete with Google in Search, Email, and Maps

Expand cloud offering to best in class for core services

Offer these all at competitive prices

Bring all media into the cloud

Consolidate UI to web UI (for core)

Google Strategy Go Vertical

Buy RIM (gRIM), Nokia (Noogle), Motorolla (Goto), Palm (?)

Build out media offering Build a headless client for local play Build a Lala-like library Use gears or HTML5 for a local Web UI License everything

Build new services Keep everything an open platform Invest heavily in App Store / integration with payments Continue to over-invest in search and maps/local

MobileMe Differentiation

Easy Set-up

Push Contacts, Calendar (nuevasync works with Goog)

Supported integration across Mac software, especially iCal and iMail.

Find My iPhone

MobileMe Shortcomings Speed

Search (speed, across folders, attachments, etc)

Reliability (single data center, monolithic architecture, solaris, 3rd party software)

Cost (Google is selling 20GB for $5 / yr with unlimited transfer).

Spam control

Playing catchup on many features such as rich text compose, attachments, search, filterning, SSL

No third party integration other than iMap (see Y! Mail)

No integrated chat

A Compelling MobileMe

Over the air sync of Me mail, gmail, ymail, any calendar, contacts, etc.

Maybe disk space (gallery plus idisk), but maybe not -- only if we can do it cheaply

Find my phone Access to your music (Lala) Gallery App (work with Flickr and Picassa) Promotion of videos, music, etc. Extended Support (?) $25 / year

MM Target CustomerHypotheses

Apple customers who already own a Mac or who could be led to buy one due to MM integration

Any iPhone customer who is not already wedded to a PIM solution

Any iPhone customer

Goals

100% (>95%) of iPhone purchasers sign up (purchase?) for AppleWeb

>75% use the core services daily. (Weekly? Monthly?)

> X% pay a subscription for a (the?) AppleWeb product

Misc Strategy

Own Search GUI -- outsource web search (return to Yahoo! circa 2000)

Own Maps and location. Nav outsourced

Own Contacts and Calendar

Keep me.com but give up on Mail (continue to provide service at premium to current users and extract max. cash)

Keep Current Business

Kill Costs -- outsource mail / storage

Sustain on lower growth (short term)

Why? Own key value delivered to user

We can make our cloud services work better with our software and hardware

Complete the solution in Apple style

If we don’t the competition will

Deepen brand connection

Companies

Mobile Security -- lookout.com (Julie H)

Search

Disk Space -- Zetta

Photos -- Shutterfly, Phanfare,