Apple Fall Keynote: Lack of Surprises Creates an Opening for Google and Microsoft

Today's Apple (APPL) Fall Keynote was a parade of updates -- new iPods, new Apple TV and new music interfaces. Apple's announcements were all incremental, evolutionary and not revolutionary, which means Google (GOOG), Microsoft (MSFT) and other competitors still have a serious chance this holiday season. In short, Apple's gonna need more ammo to maintain supremacy.

Apple announced four updates today:

  • Next generation iPod Shuffle, Nanos, and Touch
  • iTunes 10
  • iOS 4.2 with Game Center and HDR
  • New Apple TV
iPods: As expected, the iPod Touch gets an iPhone 4 update: Retina screen, HD video recording, Facetime over Wi-Fi and a front-facing camera. The new line starts at $229. The Nano finally gets a multi-touch touchscreen update. It also can carry photos now, but it's unclear who would actually view pictures on 1.5-inch screen. The smallest, 8GB model is running $149. Finally, the new iPod Shuffle wisely ditches the interface-less design and restores the retro, full-button front face. It still starts at around $49.

Again, nothing spectacular on the iPod front.

iTunes 10: The wrinkle here is Ping, a new iTunes-based "social network" that tells users what their friends are listening to. Artists can also be followed: Onstage Steve Jobs showed what his "friend" Yo Yo Ma was doing, Facebook-style. Ping is less a shot at Facebook as it is to growing music company Google. MySpace may be virtually dead but Twitter, Facebook and other social networks still haven't found an elegant way to integrate music playback. However, Google Music is in the position to influence social networks in a big way.

Apple is cutting out the middleman and, as usual, is trying to create a walled garden -- in this case, for music social networking. Ironically, because Apple is determined to have it only within iTunes, Ping is for niche audiences or simply an iTunes add-on versus any type of social network killer.

iOS 4.2: Next week's software update adds a few interesting features, including GameCenter and High Dynamic Range (HDR). A direct attack towards the upcoming Microsoft Windows Mobile 7, GameCenter creates an online community for iPlatform gamers to compete, share scores and chat. As mentioned in my previous BNet post, next week's GameCenter release could take the wind out of Mobile XBox Live before it arrives later this year.

An interesting nugget is the High Dynamic Range (HDR) photo capability. For every one photo shot, the iPod will take three pictures of different lighting and combine them to make a single, impressive picture. The results were fairly impressive.

Apple TV: Apple's redheaded stepchild finally got a $99 revision. The twist is that it actually doesn't hold content: It rents it. Hoping to revolutionize TV like music, Apple is pushing $.99 TV show rentals and $2.99 movie rentals ($3.99 for HD movies). Netflix is available, too.

The idea of purchasing a media device and not being able to own the content is crazy. Apple introduced Airplay, a nice wireless way to play iPhone or iPad media on the new Apple TV, but that still means buying and owning another Apple product as a hard drive. Media is available for 24 hours after purchase, which means Apple is, essentially, making consumers pay for a Pay Per View device. It could be a risky, but very profitable move for Apple, as it assumes that people are ready to bring the mobile digital-only idea to their DVD-stocked living room. We'll see: As my BNet colleague Chris Dannen says, "TVs simply work best as big, dumb screens that can simply play, stream and record."

There are some holes here: Ping is limited to the still-awkward iTunes interface, Apple TV competitor Google TV will presumably allow users to keep content, and the iPod touchscreen and media upgrades probably aren't enough to drive more sales this holiday. I'm assuming the mind-blowing changes, like a much-needed iTunes overhaul, will be announced next year.