iPod touch: the first mainstream Wi-Fi mobile platform?

"We believe one of the iPod's future directions is to become the first mainstream Wi-Fi mobile platform." So said, Apple CFO Peter Oppenheimer at their recent earnings call.

Okay, so let’s play this scenario out. Start with the premise that in most homes these days, reliable wireless connectivity is pretty much a given.

Now, add to this environment a device that fits in your pocket, generates no heat, has Wi-Fi capabilities, a touch screen and killer integrated media capabilities (it’s an iPod, after all).

Finally, give this device - the iPod touch - the ability not to only browse the Web, but to run local ‘client’ applications as well (e.g., the iTunes Wi-Fi music store, maps, widgets).

To be sure, there are some caveats (there always are with new platforms) but the possibilities for such a platform are pretty amazing.

The Wi-Fi Mobile ‘Platform'
Some time in February, Apple is due to release an SDK for building applications that run on iPhone and iPod touch devices.

The addressable market for such applications is potentially quite large. Apple’s own estimates suggest that it will move 10M iPhones this year. If a quarter of the 100M iPods sold to date can be converted to iPod touch owners, that is a combined market that dwarfs the size of Nintendo’s breakout Wii gaming system.

If Apple is smart, they will get religion about making it easy for developers to build local applications and services that are native to the iPhone/iPod platform versus artificially limiting them to ‘pseudo-applications’ that are wholly web-based.

If they got religion on this point they could cultivate a devoted ecosystem of third-party developers, penetrate new verticals and achieve even deeper synchronicity across the universe of Apple/Mac devices, software and services.

To Apple, I would say this. Remember the lessons of Microsoft and the importance of building a thriving ecosystem. It secures the consummate ‘unfair advantage’ to its progenitor by offering greater platform diversity to consumers, making them want to lock themselves in, which has the net effect of giving pricing protection to the platform builder at the center of the ecosystem.

Twenty years ago, Microsoft figured this out and played chess to Apple’s checkers, almost extinguishing Apple in the process. I remember this time well since, at the time, I was selling to Apple’s base of schools, entertainment and graphical creative types. It was painful to watch a great company’s demise.

It remains to be seen if Apple drinks the Kool Aid this go around or not. If they succumb to exercising too much control and force developers into a hobbled web-centric apps model, they risk turning off what would otherwise be a naturally evangelical following. I hope they make the right call.

Mobile Platform Envy
In the scenario that I envision, applications/services would be targeted at two primary use cases. One is living room spaces, where connectivity is assured. The other is intermittent connectivity environments, where having local applications with local data enables users to strike a balance between online dynamism and application availability/persistency. Consider:

- How useful would a Quicken application be that could sync between your iPod touch and the desktop? Application scenarios come to mind for receipts inputting, bill payment, balancing of your checking account and daily cash management. Who doesn’t struggle with this one? A rich application environment with touch screen, input forms and drop-down menus feels like a winner.

- About 15 years ago, the Interactive Network was service that allowed you to participate in an interactive fashion with TV game shows and sporting events. Unfortunately, it was pretty limited and required that a special hardware box with a dedicated phone line be connected to your TV. Plus, no one knew what the hell interactivity meant since the Web was still pretty nascent, so it failed. But with an iPod touch, an interactive TV programming guide application becomes possible that allows you to systematically interact with your favorite TV programs (think: sports, game shows, finance, reality TV, etc.) and connect with others who are watching the same program - in real time.

- What if all of the businesses that you frequent could maintain an interactive version of their customer loyalty program with you? You could always have coupons and discounts of interest at your fingertips, and could manage communications with them just as easily (information requests, booking reservations, etc.). Such an application is perfect for intermittent connectivity.

- Imagine a virtual DJ application where iPod touch users could allow third party DJs to ‘program’ what users see and hear on their iPod touch by pushing information feeds, video, audio, photos and the like. Users could choose to IM, SMS or talk live with others in the 'audience' in a one-to-one or one-to-many fashion. It’s like Pointcast for the Web 2.0 generation.

- It seems really clear that role-playing games (RPG) and virtual worlds have a logical place in this landscape. Similarly, there are a bunch of games that could take advantage of the input and movement functionality of the iPod touch device. What about playing backgammon with someone remotely but in real time?

- Finally, I would be willing to bet that A LOT of people would want to use such a device as an e-wallet application. Far from waxing poetic about futuristic services that require integration and customization that does not exist today, there are a bunch of products that can be ordered online and either delivered to you or that are local enough that you could pick them up. What about a service that aggregates all of the menus in your area of restaurants offering delivery service?

Given that it could be the perfect device for local and ultra-targeted advertising, making the ROI seem clear, one wonders if this is the killer device for an ad-supported Wi-Fi service.

Maybe that explains rumors of a reference design integrating Google’s Android (open handset platform) with the iPod touch. Perhaps this also explains Google’s recent announcement that they are upping their commitment to iPhone optimized applications.

Is the iPod touch destined to be the first mainstream Wi-Fi mobile platform? Or jut the Newton revisited? What do you think?

(Disclaimer: I just bought one so I am voting with my pocketbook.)