Rivals focus on biting Apple

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Marcio Jose Sanchez / The Associated Press Scott Forstall, Apple�s senior vice-president of iOS Software, talks about features for the new iOS 6 software in June. (CP)

TORONTO -- Another year, another iPhone. More surprisingly, Apple fans were tempted with not just one new iPad, not two, but three, including the latest mini-sized tablet.

Research in Motion released new phones but not many noticed.

Microsoft was set to close 2012 on a big note but missed the mark.

There were baby steps made to introduce mobile commerce to Canadian consumers, while digital video viewing went mainstream.

Here's a look at the trends that emerged in 2012 and are likely to develop in the year ahead, and the busts of the past year.

APPLE FACES MAJOR CHALLENGES IN '13

It took a very long time for any other manufacturer to develop a tablet that came even close to Apple's iPad, but that gap has now closed considerably -- particularly with solid tablets released this year by Asus and Samsung. Google struck a major pre-emptive blow against the iPad mini by pricing its small Nexus 7 tablet at just $209 and up. When the iPad mini was released months later, it looked expensive starting at $329. Apple will need game-changing hardware or software for its next iPad or it risks losing a large chunk of the tablet market to cheap -- and just as capable -- competition.

There's a similar smartphone threat as cheaper Google Android phones have overtaken the lower end of the mobile market and the top-of-the-line models have proven to be real iPhone rivals. Windows phones have yet to catch on, although they've shown promise, and it remains to be seen if RIM can successfully re-establish itself as a mobile leader with its new BB10 operating system.

Apple will also have to rebound from the Google Maps controversy that forced the company to acknowledge it made a mistake in dropping the popular app without having something just as good ready for its customers to use.

WEB VIDEO CONTINUES TO GROW; IS MOBILE NEXT?

Earlier this year, a survey suggested almost one in four Canadians were spending more time watching online video over the course of a day than time on the couch in front of their TV. Another 16 per cent said the time they spent watching content online and on TV was about the same. Between watching a few minutes of video at a time on YouTube, catching missed TV episodes on network websites and streaming movies off Netflix, Canadians have learned there's plenty to watch even when there's nothing good on the dial.

A recent survey commissioned by the federal government found one in three Canadians said they now download or stream films online and 12 per cent said they do it either daily or at least once a week.

The same survey stated that 48 per cent of respondents had a smartphone and 24 per cent had a tablet they could watch video on. But mobile viewing is still being held back by data prices, which make streaming of high-quality video too pricey to be a daily habit. Luckily, coffee shops, fast-food outlets and airports have begun to offer free WiFi that can be used to watch a TV show or YouTube clips while waiting around. If mobile pricing doesn't come down in 2013 -- and it's not expected to -- mobile viewers will have to hope the encoding efficiency of video is drastically improved so less data is used per stream.

BREAK OUT YOUR DIGITAL WALLET

Starbucks regulars have probably noticed fellow customers occasionally handing over their smartphone to pay for their coffee or latte. It's one of the first popular examples of the digital- wallet concept, electronically storing purchasing power on a smartphone. In the case of the Starbucks app, it's a link to a customer's prepaid credit that's commonly stored on a gift card. The latest Apple devices come loaded with something called Passbook, which allows users to store electronic copies of flight boarding passes, movie and sports tickets, travel points and coupons. The next step is a technology called near-field communication, a way to securely send data wirelessly, including payment information for purchases. CIBC took a small step in that direction this past year by starting to offer digital-wallet services for its customers with NFC-capable BlackBerrys. Royal Bank signalled it will be following suit and you can expect other financial institutions will add their names to the list in 2013.

Mobile e-commerce -- shopping on a smartphone or tablet while on the go -- is also expected to rise next year, although it may see somewhat slow growth in Canada. A poll commissioned by Google and released in May suggested only 20 per cent of Canadians had ever made a mobile purchase and only 16 per cent expected to boost their mobile shopping in the following year.

A YEAR TO FORGET

It was a tough year of waiting for those holding out hope for Research in Motion as its BB10 operating system, the company's last hope of staying alive in the smartphone space, was built up and prepped for an early 2013 release. Those who have had a sneak peek have suggested RIM has finally caught up and developed a slick mobile experience that may rival the iPhone and Android phones. But it doesn't appear there are enough consumer-friendly bells and whistles to sway Apple fans and the company is instead expected to focus on re-establishing its dominance in the corporate market. Meanwhile, it was a stomach-churning roller-coaster ride for stockholders who watched their investment cut in half from the start of the year to the summer, before rebounding in the fall. But just when it looked like the ride was over, the company's latest earnings release spooked the market and prompted another steep stock decline of more than 20 per cent on Friday.

It could've been a monster year for Microsoft with the huge releases of its Windows 8 PC operating system, a new mobile phone operating system and the new Surface tablet, but all hit the market without much fanfare. Windows 8 was panned as a confusing, unfocused user experience that left many users with a frustrating first impression. Windows Phone was better received, particularly for its fresh, new approach to displaying apps, photos and social media content on its home screen. But it hasn't connected with the mass market yet. And despite a large marketing campaign, the first version of Microsoft's Surface tablet managed to attract some early attention but failed to be seen as a real iPad rival.

-- The Canadian Press

Republished from the Winnipeg Free Press print edition December 29, 2012 B10