The Rapture Apple Tablet is nigh. This Wednesday, Apple is set to announce its latest status-symbol-cum-killer-device. And par for the course for Apple, no one – that is, no one outside of 1 Infinite Loop and a privileged cloister of vendors, publishers and tech heavy hitters – has any real idea what this fabled device looks like. But boy, it sure is fun to guess, isn’t it?

What we can safely assume based on the last few months of rumors, industry trends, and an analysis of Apple’s product strategy over the last decade, is that the Apple Tablet will certainly be a game-changer for the consumer electronics industry, ushering in a new era of convergence and pervasive social computing. It’s supposed even that Jobs himself considers this his magnum opus. More relevant to our interests, it will also redefine (yet again) how we interactive marketers target an increasingly “always on” audience.

(Without referring to it as the iPad, iSlate, iTablet or any of the other unconfirmed monikers it currently bears, let’s add our own cute rumor and say that our “sources” have confirmed† that the product is actually called the “AppTab” – Apple Tablet – get it?).

It’s not just the AppTab that we’re talking about here, but tablet PCs in general. At this year’s Consumer Electronics Show, every major laptop manufacturer indicated their intent to jump into the tablet fray, from Sony and Toshiba to the seemingly doomed HP/Microsoft Slate mashup. It’s somewhat certain that the last several months of Apple rumors have had a part in expediting these announcements, yet none of these manufacturers have convinced the mass market of their confidence in becoming a market leader, let alone the standard bearer that Apple has become for music, mobile and general coolness.

If the AppTab really does exist, here’s what we can safely assume of its features, in order of likelihood:

1. It’s an Apple product. So everyone and their mother want one, even if they can’t afford it for another two to three quarters.
2. It very likely shares the same long-range connectivity features as the current iPhone, including WiFi and 3G. Given Apple’s conservative stance on implementing “unproven” standards until mainstream adoption, it likely won’t be optimized for the even faster 4G LTE standard, regardless of Verizon’s potential involvement.
3. It will be faster than the iPhone and perform competitively in performance with current netbooks and even laptops.
4. It likely has a 10.1 inch screen with a standard 1024×600 resolution. The iPhone and other popular smartphones provide a 3.5 inch screen with 480×320 resolution. Do the math and this means a 400% increase in screen real estate for more viewing area and a greater multitouch canvas.
5. It’s highly probable that the AppTab will be based on the forthcoming iPhone 4.0 OS and SDK, and not a stripped version of Mac OS X (similar to their OS approach for the AppleTV). Thus, Safari will be the default – and likely only – web browser.
6. It may possess GPS or assisted-GPS for detecting location, similar to the iPhone.
7. On the topic of a new OS/SDK, it may finally be possible to run multiple applications and always-on background services (remember the promise of Apple Push?).
8. It will cure lupus.

HTML5 and Web Applications on the AppTab

The new HTML5 standard – which appears to be surprisingly fast-tracked by Apple – allows for native browser support of media with less of a reliance on plug-ins like Adobe’s Flash Player or Sun’s Oracle’s Java. This translates into a more seamless browsing experience that not only decreases page load times and improves overall performance, but also provides room for more interactions within the browser (see here for five advantages of HTML5). This point deserves a blog post of its own, given the tremendous improvements that HTML5 provides over the currently widespread HTML4, and the impact it will have on browsing and web applications, and ultimately ad delivery and placement.

But more to the point, by making the most of HTML5, Apple can continue to push Safari as the sole browser on the AppTab, enabling developers to create a new breed of rich internet applications (RIAs) alongside tablet-specific applications (TSAs) built with the new iPhone SDK. This will create a higher potential for integrating ads within or alongside these new web applications (see ‘Social Gaming’ below).

Use Cases for the AppTab

As laptops and mobile internet devices have become more accessible over the past several years, they’ve become more pervasive in mainstream usage. This transition away from the desktop browsing paradigm has brought about a substantial shift in how users search for and view information, not only in terms of usage (stationary vs. mobile) but also immediacy (static web vs. real-time web). Subsequently, this shift has also created tremendous opportunities for advertisers to hone their targeting and capture more engagements.

And while its ultraportable form-factor makes it seem like an attractive alternative to today’s netbook, the AppTab’s capabilities point to it being used primarily as a stationary access device. A tablet can not yet replace an “everywhere” device like the iPhone, nor can it be a device to capture and create content like a desktop, let alone a productivity solution like a netbook or laptop (try building a PowerPoint with a virtual keyboard). So for the first generation or two of the product, we should assume its primary use setting will be in the home, classroom or cafe. And all signs point to the AppTab’s source of content coming mostly from publishers, from the cloud and through peer-to-peer sharing with other AppTabs. As such, display, social gaming and video ads will be an area of opportunity for advertisers in the short-term, with location-based services picking up as tablets become more ubiquitous in the long-term.

So based on these assumptions, let’s take a quick look at how the AppTab affects marketers in four key areas: Video Ads, Display Ads, Social Gaming and Location-Based Search.

1. Display Ads

Confidence in display advertising has taken a beating over the past few quarters, as the recession has forced CMOs to focus more on performance-based campaigns like CPC campaigns and paid search. And with an increasingly savvy audience that’s trained itself to avoid banners.

However, despite losing its luster among brands, display is finding itself amidst a rebound with the search giants pushing for increased diversification of inventory within their respective networks. Case in point, Google CEO Eric Schmidt stated this past Thursday that the search giant will be placing a heavy focus on display in 2010. Now this could be in anticipation of higher-than-expected industry growth projections for laptops and tablets, or an indication that Google’s very own rumored Android tablet will be the catalyst for their display strategy. Either way, it shows that the AppTab may be contributing to the revived interest in banner and interactive ads.

Consider also that major publishers are gearing to use the tablet as either a complement or a substitute for their print pubs. Time Warner, Hearst, Condé Nast and other houses have all recently showcased “concepts” of their magazines and newspapers as viewed on a tablet like the AppTab. To maintain the similar look and feel of these publications, the preferred (if not only) method to advertise is via display ads that would replace the quarter, half or full-page ads that are found in their print counterparts. Granted, video ads could also be implemented in place, but from a cost perspective, it’s in the advertiser’s best interest to view display as the commodity approach on the tablet.

2. Video ads

Advertisers are still soul searching on how to capitalize the growing usage of videos. And with an increasing number of newspapers using video to deliver information, publishers are testing a wide range of placement tactics in an attempt to capture more eyeballs and more clicks. Yet from pre-roll ads, in-between ads and post-roll ads to complementing banners and video overlays, there’s still no clear indication of effectiveness or consumer preference for any one advert format. Not to mention that the numbers for interaction and clickthrough for video ads in general are still nothing to gloat about – contrary to what we all have been reading.

The AppTab could hopefully boost those numbers. For publishers who want to push online subscriptions to the AppTab, there’s the expectation that video ads will become much more contextual and relevant, e.g. if I read a breaking story on 49ers’ Coach Singletary trading Alex Smith for a more competent QB, I’m presented with a video report and a pre-roll that promotes season tickets for next year (which in such scenario, I’d snap up). In addition, where the ads are placed within these videos will likely adapt to both the user’s interaction with the content and their settings – thus lending to more interactions and more clickthroughs. Ultimately, the publishers and advertisers will have a clearer indication of consumer preference, and can use this data to apply to other channels and formats.

Considering the use case, an AppTab will also be able to deliver high quality Internet video to the user in a setting that they’re more comfortable with (say, on a couch or at the beach), as opposed to sitting in front of a laptop or desktop. This will naturally provide an increased incentive for him to sit through more ads. And with rumors abound of TV subscriptions and a new cost model for the AppTab, this could allay advertisers’ fears of never being able to match the margins of television ad revenues on the Internet, as users will likely watch longer form videos in extended sittings.

3. Social gaming

It’s no secret that Apple has had its eye on the portable gaming market for some time now, especially after introducing the “funner” generation of their iPhone/iPod Touch back in September 2008. The iPhone is capable of providing a similar quality gaming experience as the Playstation Portable (PSP) and Nintendo DS, with its graphics capability and accelerometer and touch inputs. However, Apple maintains a strategic advantage over the PSP and DS in that a) games are cheaper, downloadable and growing in selection by the day b) the iTouch is a converged platform that combines phone, media player and gaming system all in one solution c) through WiFi, games are richer in social and multiplayer interactions, and d) developers can both profit further through in-game advertisements.

The AppTab is naturally a more appealing draw for game developers and gamers, given its greater canvas area for display and multitouch input, potentially even delivering games and applications that can be used by multiple people at once. With the potential for more simultaneous views, advertisers increase their reach and ultimately their premiums. And it’s not just within downloaded App Store apps, but as indicated before, browser based games too. Social gaming sites such as Kongregate and social network applications developers like Zynga have pushed more users to adapt to the browser for gaming. It remains to be seen whether these developers’ games will see the light of day on AppTab, considering how most are built on Adobe Flash, which may or may not be permitted on the AppTab. But Apple would be remiss to not capitalize on browser-based games from Playdom, Playfish, Pogo and others as an opportunity to make the AppTab a preferred device for social gaming. Let’s not also forget the tremendous traffic and valuation figures that many of these companies maintain, and the net effect they pass on to advertisers as a result.

4. Location-Based Search

Now when we consider the long-term potential of the AppTab becoming a ubiquitous “everywhere” device like the iPhone, there’s tremendous potential for developers to use it as the driving force for the next generation of  location-based services. While LBS has somewhat accelerated in deployment with the iPhone and viral applications, marketers have long waited for an optimal delivery and capture platform (like the AppTab) to create a stronger engagement between consumers and local businesses. Not only would an always-on tablet be the ultimate augmented reality device, but one that marketers view as pushing their Minority Report dreams into execution.

LBS is nothing new, and many existing apps on the iPhone like Foursquare and Yelp provide information to the user based on current location or breadcrumbs of previous visits. However, the limited screen size on smartphones only allows so much space for location-based ads – whether contextual, display, interactive, etc – as they compete for valuable real estate. Plus, given how the App Store has proved itself as a more viable revenue model for developers (although becoming more challenging as of late), there’s a much lower incentive to build an ad-supported application. Considering all this, the AppTab can finally push the LBS ad model into top gear for mainstream adoption.

The tablet’s larger screen would provide more space for developers and advertisers to coexist information with relevant ads, whether contextual ads based on location searches, or graphical coupons and promotions for nearby businesses based on current location provided by GPS. Again, a 1024×600 screen provides 400% more real estate to display viewable (that’s the key – viewable) ads and larger graphics, required for efficient usage of coupons at a point of sale. QR codes, which haven’t really taken off yet in North America (but show promise with devices like Android making a push for them), could also become the preferred standard for opt-in lead capture. Add in better cookie management and visit analysis and marketers have the basis to create more relevant and personalized loyalty programs.

So all said and done…

If the AppTab does in fact make the leap from dream to reality on January 27, this will be an adventurous foray into new territory for device manufacturers and interactive marketers alike. With the potential to redefine how users interact with content and share with one another, marketers are viewing this as opportunity to not only develop new methods of engagement, but also optimize views and margins via existing platforms, while breathing new life and instilling confidence into platforms that are already past their prime, or deployed before the markets were ready for it.

In any case, we’re looking forward to Wednesday with great anticipation, and can’t wait to see what this announcement has in store for us.

Additional links

1. A Playland for Apps in a Tablet World, Jenna Wortham, NY Times
2. Publishers Talk About Apple’s Tablet, Seth Weintraub, 9 to 5 Mac
3. Apple: The Tablet Prophecies, Jack Purcher, Patently Apple

† We have no confirmed sources

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