Author: Steve Wildstrom

Apple’s latest product announcements were improvements to existing iPads and iMacs. This, not surprisingly, caused mild disappointment among those who had no reason to expect more but somehow felt they’d be surprised anyway. The fact is, modesty is the reasonable move to expect from Apple. And that can be fine for Apple’s business.

The latest announcements included thinner iPads, upgraded iMacs, including a new Retina Display model, and the new Yosemite version of OS X unveiled at the World Wide Developers’ Conference in June. A bigger iPad may still be on the way but it wasn’t ready in time.

The new iPhone 6 and 6 Plus may be the last to yield a massive rush of buyers and even there we don’t know how long the rush will continue after the most avid iPhone owners have bought the new one. The year old iPhone 5s and even the two year old iPhone 5 remain quite usable. (I have a 5s and so far I don’t see a rush to get a 6. The 6 Plus is just way too big for me.)

Apple is doing a fine job of maintaining the software of its existing models. iOS 8 is available on models back to iPhone 4s. While new iOS releases have new features that won’t support some old hardware, many users don’t feel disappointed because they lack, say, the fingerprint touch device. The changes on iMacs are even more modest. I’m almost embarrassed to use a 2010 iMac (a bit enhanced) and a 2011 MacBook Air. Unless the upgrade to Yosemite brings real trouble to either of these, and tests suggest it performs fine, I plan to keep them in service for a while. (I wish I could argue that 2012 Windows articles are satisfactory.)

Years ago, this would have been a crisis for Apple. The only way the company could sell most of its Macs was by getting existing customers to upgrade. iPhones and iPads continue to grow, but the expansion is at best flattening out, especially in the U.S. In fact, the dramatic improvement of Android offerings, and its own new Lollipop software version, will made it harder to get customers to jump to the iPhone.

Microsoft’s miserable Windows 8 sent many Windows users to Macs and helped generated a very strong shift. It’s too early to forecast if Windows 10, now out in an early test version, will re-ignite PC enthusiasm of Windows users, many of whom seem happy with Windows 7. But if Windows 10 delivers solid design and features Microsoft has promised, Apple may find it harder to sell Macs.

But this is not a crisis for Apple. For most recent years, Apple has grown from generating massive markets for new products. Today, its markets will depend on slower growth and the product replacements by current customers. It may be unexciting, but it is the future of a maturing, successful company.

Hewlett-Packard’s decision to split the company into two businesses, one selling PCs and printers, the other offering services and high end business network equipment, marks the end of their run in the 35-year computer industry. In a sense, it’s an overdue shift of the business to companies designed to function as low margin and mostly Chinese. But it is worth considering the history. (Apple, of course, is another business that flourishes on computers for its own reasons)

In many ways, IBM shapes the story. The personal computer moved from being a consumer system, such as the Apple ][, into a business dominated market. The key was the introduction of the Model 5150, better known as the IBM Personal Computer, in 1981. But IBM broke its own way of controlling hardware. The PC was based on freely available systems, most importantly the Intel 8086 processor, and IBM freed Microsoft to make its operating system available to all comers. The market swelled from big tech companies, such as Digital Equipment and Texas Instruments, to arguably the most important start up, Compaq, in 1982.

IBM tried to strike back at the surging market share of “IBM PC clones”. In 1987, it came out with a redesign called the Personal System/2, which would require the  use of IBM-designed computer cards such as graphics controllers in place of an industry common design. The only successful component of the PS/2 design was an improved round plug to connect keyboards and mice. At about the same time, IBM issued the OS/2 operating system to compete with MS-DOS and Windows. It was another dismal slump, although IBM wouldn’t give up, issuing a version called Warp aimed at business and consumers in 1994.

In the end, IBM’s last real hit was the first truly successful laptop, the ThinkPad, introduced in 1990. But even it could not hold off the competition from Compaq, HP, and a plethora of other laptop makers.

By the end of the 1990s, IBM was in serious trouble in just about all its businesses (more trouble, in fact, than HP has ever been in). As the last stage of a long effort to reconstruct the company, it sold its PC business to Lenovo, which managed to become a very successful computer company as a global, low margin leader. Earlier this year, IBM finished off the last bit of its low end hardware business by selling its X-series servers to Lenovo.

Needless to say, HP didn’t study IBM as an example. In 1999, it sold off its original instrument business (now Agilent Technology) to favor the printer and technology business and in 2002 bought Compaq, a dominant if not very profitable player in the computer industry. It also generated internal management and shareholder struggles that have never completely gone away, though CEO Meg Whitman seems to have calmed the chaos.

In a sense, the decision to get out of the PC and printer business has looked obvious. The company’s last dramatic computer move was the 2010 catastrophic purchase of Palm. HP’s big acquisitions have been EDS consulting, 3Com, with network equipment and services, and Autonomy, a controversial big data software maker.

In the new world, Hewlett-Packard Enterprise, with a focus on corporate technology needs and competition with companies such as IBM and Accenture, will be run by Whitman and many of her top executives. Dion J. Weisler, executive vice president in charge of the PC and printer division, will be CEO of HP, Inc. The deal should close some time late next year.

The future of HP, Inc. is unclear. It could be like Dell, a U.S. seller of Chinese computers pursuing a low end market. Or it could end up being bought by a Chinese manufacturer — speculation having even included Lenovo. Either way, the HP we know is gone.

I have been visiting Washington area Apple Stores since the first one in the country opened at Tysons Corner, VA. So I was a little shocked today when I discovered a chaotic Apple Store at the Montgomery Mall in Bethesda. The problem appears to be mainly a smallish store that simply has more business than it can handle. It showed the Apple Store is not always keeping up with its customers.

I went to an appointment at the store with my wife, Susan, to have her iPad 2 repaired — it had stopped powering up. We had an appointment at the store and were surprised by how mobbed it was, with a line out front for purchasers of the iPhone 6 and 6 Plus. It was the first time I could recall walking into an Apple Store without being asked for my business as soon as I walked in. I ended up standing in line at the Genius Bar only to find out there was room only for iMacs (somewhat oddly, the store has more business with Macs than anything else) and I’d have to find someone else in the store.

After several attempts with the scheduler at the door, I was told we would be seen at the Genius Bar. I’m glad to say although we were nearly 45 minutes behind our appointment, things finally got back to normal with the kind of response I am used to at Apple Stores. The genius promptly checked the iPad and found it would not respond to power. I couldn’t be told whether the problem was the battery or the power supply, but it doesn’t matter since you can’t replace either. So we paid $100 to replace the iPad, not a bad price since my wife is happy with the iPad she has and a new updated unit would have cost at least $529.

It was the first time I can recall being annoyed by poor customer service at an Apple Store. It’s probably the result of a store too small and too understaffed to deal with success. But many companies have made customers unhappy by failing to offer prompt service (not, I must say, a problem that Microsoft has suffered from) and doing too well can be a problem.

Last spring, after surgery for removal of a brain tumor, I thought I’d be back after a couple of months of recovery. The process however turned out to be much slower and more complex than I expected — to the point where I am still suffering from a number of problems. I’m still not ready to return, but let me bring you up to date on progress.

The good news is there has been significant physical progress, especially in recent weeks. I’m now getting around a lot better and am even about to make my first brief out of town weekend trip. I’ve especially made progress in recovery on a blood clot.

I’ve made a lot of psychological progress, too, but here there is a very long way to go that is effectively keeping me away from work. I have two related problems. One is the ability to read any complicated material. By the time I get to the fourth paragraph, I’ve forgotten the first (interestingly, I can do better with material read to me). It’s getting better, but it is a slow process and limits me to a tiny share of the vast amount I should be absorbing.

More frustrating is my inability to remember lots of words. For example, I was recently watching a moving with a well known actor. I knew him in lots of movies including Cool Hand Luke and The Sting though it took me a while to remember either the name of the actor or the title, though I could remember Robert Redford. Similarly, I have trouble remembering the prescriptions I am taking though I can recall their purpose. It’s getting better, slowly, but remains a huge problem, especially for writing.

The question is of my ability to handle material with enough skill to interpret and write the analysis. For now, at least, that remains an open issue. It was all I could do to write this and it was a difficult accomplishment, slowly written. I hope I get better and faster and in a way that lasts a long time, but right now I cannot say. I’ll try to keep you posted.

Mary Meeker has a very checkered record as an analyst during the dot.com boom days, but her recent record as a forecaster and industry analyst is hard to challenge. Attendees at the Code conference, the reborn version of the D: All Things Digital conference, had Meeker present her forecast, and share it with the public at Re/code.

The central core of Apple executives has mostly remained intact since Steve Jobs returned to the company in 1996. But Katie Cotton, senior vice president for worldwide communications, announced yesterday she is retiring after 18 years.

Unlike figures such as marketing chief Phil Schiller, design guru Jony Ive, and (until becoming CEO) COO Tim Cook, Cotton has maintained a low public profile. But on the relatively frequent public events in Jobs’s career, Cotton was rarely far from his side and she has remained close to Cook.

By all reports, Cotton’s role has been a quiet but influential one, especially in the Jobs era. She’ll be missed.

It’s been March since it took a leave to recover from brain surgery and, for a variety of reasons, my comeback has taken a lot longer than I expected. I had surgery for succesful removal of a brain tumor, a setback due to a MRSA infection, and now have started daily radiation treatments. But the real difficulty in getting back to work has been a vision problem that makes reading and writing difficult; I hope to deal with that shortly.

Facing difficulty in reading the volume of material needed to keep up with events in the industry makes it even harder to write. With luck, this problem will soon be behind me. That will help me to get back in the swing of work in the next week or so.

Meanwhile, I want to thank the many among you who have extended their good wishes. You can keep up with regular posts on my progress on Facebook.

Even though the surgery won’t be until tomorrow afternoon, they have me all prepped. Those funky dots are some sort of MRI positioning indicators–I’m not sure what their precise function is, but they have to do with increasing the surgeons’ already incredible accuracy.

The doctor is extremely hopeful my brain won’t be too much the worse for wear when he is finished. The good news out of extensive MRI testing is the tumor is located a bit further away from critical speech centers, reducing the risks of damage. If all goes well, I should be home by the end of the week, though I figure it will take a while for my brain to clear before I can do any truly useful work.

Meanwhile, I have nothing but the deepest gratitude for the kind words from dozens of friends. And nothing but the highest praise for everyone at Johns Hopkins Hospital, truly one of the world’s greatest medical institutions.

Keep track of my progress on Facebook, and I’ll be back soon.

In our fascination with tablets and smartphones, new paradigms have drastically simplified the way we interact with our daily technology. But have we forgotten how much of the growing capability is based on soaring computational capability on the back end? Just the existence of ubiquitous computing clouds, from companies such as Amazon Web Services and its competitors, has brought oceans of low cost capacity to startups. And rapidly growing analytical abilities can draw large insights from readily available data.

There may not seem to be an immediate connection here, but those of you who have been following my medical saga over the past couple of weeks know I have quickly become a bit obsessed with the benefits an explosion in computation has brought to neuroscience. It wasn’t long ago brain surgery, vastly skilled as it was, remained somewhat crude and mechanical. Surgeons depended on good hands, good eyes (well, they still do) and sometimes probes that could distinguish tissue based on the reactions of the patient during the operation.

No radiation, but no pictures. Magnetic resonance imaging (originally called nuclear magnetic resonance, but “nuclear” was dropped because it sounded scary) uses magnetism to stimulate weak radio emissions that are then read. Unlike CT scans and other x-ray based technologies, it requires no potentially harmful ionizing radiation. But it also produces no natural pictures. The term “imaging” is actually a bit of a misnomer – it depends entirely on computation. MRIs are used extensively for soft-tissue examination – they are particularly helpful for examining sports injuries – but may be at their most important for sensitive brain imaging. I have had the good fortune to go significantly beyond standard MRI exams thanks to the extraordinary capabilities of Johns Hopkins Medicine in Baltimore.

While a standard MRI does very sensitive imaging, a functional MRI (fMRI) can detect brain activity in real time. The goal in my case was to determine as precisely as possible the very fine boundary between a tumor in the left temporoparietal lobe of the brain (near the skull, just above the left ear) and normal brain tissue. I have been extremely fortunate. I’ve been on pretty high doses of corticosteroids, and while it has some nasty side effects, the brain swelling that was the original problem very quickly resolved and my language skills returned to normal (I’m hoping for a surgical miracle that will improve my poor typing skills, but I guess that’s too much to ask for.)

Exhausting experience. So the bottom line was I was in good shape for the fMRI, which turned out to be perhaps the most difficult and exhausting experience of my life. The process requires extremely fine measurement to differentiate between oxygenated and de-oxygenated blood within the brain. The Center for Functional MRI at the University of California-San Diego gives a through, if somewhat technical explanation:

The discovery that MRI could be made sensitive to brain activity, as well as brain anatomy, is only about 20 years old. The essential observation was that when neural activity increased in a particular area of the brain, the MR signal also increased by a small amount. Although this effect involves a signal change of only about 1%, it is still the basis for most of the fMRI studies done today.

In the simplest fMRI experiment a subject alternates between periods of doing a particular task and a control state, such as 30 second blocks looking at a visual stimulus alternating with 30 second blocks with eyes closed. The fMRI data is analyzed to identify brain areas in which the MR signal has a matching pattern of changes, and these areas are taken to be activated by the stimulus (in this example, the visual cortex at the back of the head).

It is not because the MR signal is directly sensitive to the neural activity. Instead, the MR signal change is an indirect effect related to the changes in blood flow that follow the changes in neural activity. The picture of what happens is somewhat subtle, and depends on two effects. The first effect is oxygen-rich blood and oxygen-poor blood have different magnetic properties related to the hemoglobin that binds oxygen in blood. This has a small effect on the MR signal, so if the blood is more oxygenated the signal is slightly stronger. The second effect relates to an unexpected physiological phenomenon. For reasons we still do not fully understand, neural activity triggers a much larger change in blood flow than in oxygen metabolism, and this leads to the blood being more oxygenated when neural activity increases. This somewhat paradoxical blood oxygenation level dependent (BOLD) effect is the basis for fMRI.

What this means in the real world is you are required to lie absolutely motionless – for nearly three hours in my case – inside this extremely uncomfortable and rather claustrophobic machine. The tests are, in their own way, fascinating. In the first series, for example, a voice reads text to you. It was difficult enough to hear, given the assortment of beeps and strange noises an MRI generates nearly all the time, but the reading began in a nonsense language that sounded vaguely but not quite Scandinavian, something like a totally deranged Swedish Chef. Then the language would abruptly shift to English (though the text was an oddly northern scene read still in a vague Scandinavian accent) and I was supposed to concentrate on what I was hearing. Then it would change to nonsense, then again, repeatedly, to that chilly English. At no time did I speak, merely thought. (I don’t think the machine is capable of telling what you are thinking, just that you are thinking, where your thoughts are occurring, and the intensity of the thought.)

Projected tests. Some tests were visual, projected on a not very good-quality screen above my head. I was shown pairs of words and was supposed to press a button – the only time I was allowed to move at all – when I identified the pairs as rhyming. This proved a lot more difficult than expected, since there were lots of near-rhymes that would depend considerably on specific, individual pronunciation. Mixed in with the words were patterns of lines. I was supposed to press the button when the patterns matched, and, again, it was made a bit tricky by close but not-quite matches.

I was shown a series of nonsense squiggles, which I was supposed to ignore, intermixed with a series of cartoony images of hearts or cars or birds, which I was supposed to concentrate on and identify. Then there were the word patterns. Something like
Ghhe fpet Smrgy gjtj mrogy Quen _______
would appear on the screen. This and a few more “sentences,” with or without blanks, would pop up and I was supposed to ignore them all. Then I would see a sentence like
There is no school on Saturday or ________
and mentally fill in the blank, followed by a few more valid sentences. Finally, I was given more squiggles intermixed with letters, and when I saw a real letter, I was supposed to think of a series a words that began with it.

None of this sounds all that difficult, but done under noisy, uncomfortable, and stressful conditions for several hours and I felt my mental acuity sapping away. I think I finally fell asleep at the very end, fortunately just for the part where they needed me to be perfectly still while a contrast dye was injected.

The data collected by an fMRI is extraordinarily complex and the machine doesn’t just spit out results (and I don’t yet know just how well I did; I will probably get a more detailed report just before the surgery next week.) In fact, a key technology that has made the fMRI possible is the use of extremely power general-purpose graphics processing units (GPGPU) from companies such as Nvida and AMD. These are super-parallel processors with vast numbers of simple but extremely fast processors that use single-instruction, multiple-data (SIMD) architecture. In this case, the goal is not traditional imaging at all but very intense statisitical processing.

There’s an awful lot going on here that’s on the cutting edge of computation. The data may be even bigger than the analytics that play a growing role in the the cloud operations behind business computing. But there is no doubt that behind the pleasantly simple facade of our app-based computing, there is an awful lot of truly deep work going on.

Reading my reports here and there, probably mostly on Facebook, you may have heard the stories about me, so I’ll fill in quickly. I only had a very slight headache, but on Sunday afternoon, I started pronouncing some things very oddly and by midday Monday, I was both talking and writing what would best be called nonsense. I went to the doctor Monday afternoon, where an MRI showed either a stroke or a tumor, so I was sent to the hospital, where a more detailed test showed a tumor above my left ear and brain swelling around it.

Fortunately, medication quickly treated the swelling and by the time I was sent home yesterday, I was mostly better and the recovery continued today. I’m taking medication to continue the shrinking and I’m getting back to work. I’ll be heading up to Johns Hopkins Hospital in March for detailed testing, to be followed by surgery to remove the tumor. A lot will depend on just what kind of tumor it is, but if I am lucky, I’ll soon be back to normal for good. I’ll keep you posted on the news as I learn.

Meanwhile, I managed to learn a surprising amount in a couple of days.

Personal Devices for the Hospital

Even with a swollen brain, I was bored to death in bed. Suburban Hospital in Bethesda, affiliated with Johns Hopkins, may be a wonderful hospital but it is not very comfortable and has a ghastly TV system. Until they let me out into a chair with a table a couple of hours before I went home, it was very hard to use my PC efficiently. My salvation was a phone and an iPad. I suppose my Android phone, currently a Moto G, would have done fine, but I had an iPhone 5s, and I spent more time than usual on the phone describing my situation to colleagues and friends. The iPad Air was the most critical equipment, much more so than say my Samsung Galaxy Tab would be. I used the iPad for email, Facebook, LinkedIn, the web, and finally, when I got clear of the work, Netflix. I have no idea why the hospital has such weird Wi-Fi, but it had lots of things blocked, including Facebook and part of email. This required me to keep switching between having Wi-Fi off and on when I needed something available. Fortunately LTE service on both my phone (AT&T) and my iPad (Verizon) were good.

Once I made it into a chair, I tried using my MacBook Air. Unfortunately, the Wi-Fi was a real pain in the neck because of blockage, so I just gave up and started either the iPhone or the iPad as a personal hotspot. I shouldn’t really have had to, but it turned out to be a big help.

I really do wish that a hospital provided Wi-Fi for patients. Those who are conscious and in need of something for either work or entertainment faced a terrible quality TV offering such wonderful choices as Fox TV News and HLN Network. Proper network availability is a big help for a variety of uses. Fortunately, at least Netflix did work through Wi-Fi, which could keep the cost under control.

Medical Devices

My sleep Tuesday night–having gotten nearly no sleep Monday–was  desperately needed. But patient sleep seems to be low on the list. I was woken up every hour or two by a nurse who took my blood pressure and pulse-oximeter reading. The odd thing is that I had a blood pressure cuff attached to some sort of automatic reader, a pulse-oximeter connected to my finger, and a EKG device wired to chest sensors plugged into a radio unit stored in my gown pocket.

Unfortunately, no one seemed prepared to use this. The nurse woke me up once an hour or so, which made me more and more angry as the night went on. The nurse used a separate pulse-oximeter on my right hand while the cabled one on my left hand eventually came disconnected, leaving a couple of feet of cable attached. The EKG cables gradually came disconnected from my chest, leaving me with a useless but tangled-up collection of wires. It’s pretty difficult to tell what it was really supposed to do, but it mostly just left me uncomfortably snared in wires that did no good. And I managed to stop listening to the alarms beeping on the screen over my bed since the warnings seemed not really to mean anything important.

You would think that modern, remotely connected sensors could greatly simplify the systems that gave important information to the nurses responsible for supervising the patients while avoiding the constant wake ups. They do not seem to be quite ready for that.

(Then there’s the disgusting part you may want to skip. To urinate, a frequent problem because I had so much to drink, I was supposed to push a button to call the nurse who would show up to help me empty. Unfortunately, the nurse tended to take plenty of time at night and the bladder wasn’t so patient. It was nasty and there must have been a better way to deal with it, but we’ll skip the details.)

The Importance of Facebook

I have been a member of Facebook for many years, probably going back to its first non-campus dates, and I have to admit that I have never really cared for it very much. I am set up for my Tweets to get posted on my Facebook stream and I take a quick look every day. But I have never looked at it more than I have to.

My illness drastically changed my view of Facebook for the better. I guess I probably horrified some of my friends and acquaintances with my first postings yesterday before my brain was yet working correctly. Fortunately, it got better somewhat quickly as the day went on so that by the afternoon and this morning I could write intelligent reports. And I am deeply thankful to old friends, including Walt Mossberg of Re/code and Josh Weinberg of Digital Life Group, both dear old friends, for posting my condition.

Instead of ignoring Facebook the usual way, I found myself receiving wishes and greetings from dozens and dozens–maybe hundreds–of people who follow me on Facebook. They ranged from t0day’s friends  to acquaintances  I haven’t communicated with in years, maybe decades. The wishes from everyone, their thoughts and their offerings have dramatically helped me feel better quickly. My only regret is that I have not had time to answer every one who has sent me greetings because they all deserve responses.

But this also tells me a lot more about Facebook than I expected. I’m not quite sure who Facebook belongs to. Maybe today it is older participants than the younger members who created it, but it gives us important ways to communicate information directly. In the old days, some of your friends would probably hear about your health condition in a  third-hand phone call, by which point the information had gotten thoroughly confused. Now you, or at least a close associate, can send the information one-to-one in a direct way. This never used to happen, and it is a big, big deal. Although I still run into plenty of silly stuff posted on Facebook, I now finally understand why it is really important in a way that changes our communications. And that truly matters. Maybe when Mark Zuckerberg was getting started at Harvard, he understood something that changed the world in an important way. I’d like to believe that.

—–

For those of you interested in a little report on my condition, my ability to communicate has improved massively as medication eliminated swelling of my brain. I think I’m now maybe 80% to 90% better–I still have occasional difficulty remembering a word, but I can read and type pretty much normally now–and I hope I’ll be back to 100% tomorrow. Because there seems to be no emergency need for surgery, the technique is to let everything proceed to shrink as much as possible before the testing and surgery. I hope it will be something I can recover from quickly and permanently, but there’s still a lot to learn. I’ll share the information with you when I know about it.

What a crazy world has been created by the dealings of giant telecommunications companies and cable operators, not to mention broadcasters, video producers, content creators, and internet subscribers. It is almost impossible to predict what the situation will be five years from now, as everyone is scrambling with relationships that seem to rearrange from day to day.

Let’s look at today’s situation:

• The Federal Communications Commission’s attempt to set network neutrality requirements on wireline internet providers was struck down by the Court of Appeals, which is likely to seconded by the Supreme Court.
• Comcast, the country’s largest cable operator wants to swallow Time Warner Cable, the No. 2 operator. If approved, the deal will probably require Comcast to extend the network neutrality promised when Comcast acquired NBC Universal to TWC at least through 2018 and perhaps to the combined cable company for several years beyond that.
• Some Verizon FiOS customers complain that Verizon is throttling the delivery of Netflix video, especially in the evening. Both Verizon and Netflix deny that throttling is a problem but it appears more likely that Netflix’s peering agreements are not providing enough bandwidth to handle the traffic at peak hours.
• In another case before the Supreme Court, a gimmick that lets Aereo deliver broadcast television stations over the internet may explode the billions of dollars in “retransmission consent” fees cable companies pay to broadcasters.

Are you confused by how these varied tangled affairs affect each other? That’s hardly a surprise.

Advocates Bumping. The situation is such that advocates seem to be bumping into themselves. For example, advocacy groups such as Free Press and Public Knowledge oppose the merger of Comcast and TWC even though such a deal would extend net neutrality requirements both in scope and time. A major reason for their opposition to the merger is the growth of a monopoly, although Comcast and TWC effectively are already cable monopolies in the separate geographies that they serve. And an net-neutrality bound, Giant TWC, would probably effectively cause Verizon, AT&T, Cox, Cablevision, and other smaller cable operators to stick with net neutrality as well. But the same advocates also want the ISPs to be regulated as common carriers, and arrangement that will push everything back into the 20th century.

In fact, the whole network neutrality fight is more about the past than the future. If an internet service providers customers want Netflix (or Amazon Prime Instant, or Hulu Plus,  or YouTube), ISPs, whether Comcast or Verizon or AT&T, are going to be feeling pressure to make their customers happy.

Worrying About the Future. And for the future, companies that are providing both internet broadband and cable content–and it really doesn’t matter whether it is a cable company like Comcast that doubles as a landline ISP or a telco like Verizon that doubles as both an ISP and a cable company–are all worrying about the future plans of content providers. For now, HBO (owned by Time Warner, which has now fully separate from Time Warner Cable) will provide its HBO GO over-the-top service only to customers who already subscribe to HBO via cable or satellite. But HBO execs have made it clear that when selling HBO Go directly to internet subscribers who want to cut the cable, the company will make that move in time. Disney’s ESPN may make the same maneuvers with over-the-top ESPN 3. And the producers of sports content are considering going around both the broadcast networks and ESPN to sell events over-the-top to fans on the internet. Today, it’s World Wrestling Entertainment, but next year it may be the Big Ten Network.

One thing that would clearly be a big help is the government could step in and provide a framework that looked out for consumer interests and provided an orderly framework for the 21st century. The main legal framework, the Telecommunications Act of 1986, was a mess when it was created and has gotten a lot worse over the past 30 years. Basically, congressional Republicans let the big cable companies such as the now extinct TCI write the cable sections and the phone companies, the old AT&T and the Baby Bells, write the phone sections. Broadcasters got their piece too. Every time the Federal Communications Commission has tried to go beyond the provisions of the Telecommunications Act, it has been slapped down  by the courts.

Trouble on the Hill. Congress was forced to write the 1986 law primarily because every one was tired with the efforts of the federal courts to deal with the complexities created by the breakup of AT&T. Unfortunately, there is no similar issue driving congressional involvement and deep divisions among both Republicans and Democrats make it very unlikely that any serious effort will come from the Hill. Chairman Tom Wheeler sees and opportunity for more aggressive FCC, but he also seems to have a solid understanding of just what Congress and the courts will allow.

This means we can expect a complicated and confused situation, in which big companies will try to rearrange things and the courts and the government will plunge in ways that add to the confusion. It’s going to be and interesting time.

As Apple looks about for ways to extend the iPhone-iPad ecosystem, personal health care seems like a natural. The iOS devices are already extremely popular with health care professionals, and apps that supply health information to doctors are among the most expensive products in the App Store. In a Tech.pinions Insider article, John Kirk figures that health care-based wearables could be the next big frontier for Apple. While I agree that health care will grow as a important element of the iOS ecosystem, Apple will likely leave the devices to third parties that are better equipped to compete in this specialized market.

The reason, in a word, is regulation. Throughout its history, Apple has wisely steered clear of highly regulated markets, whose hallmark is slow moving cautiousness. And markets don’t get much more regulated, or slower moving, than health care. Anything the Food & Drug Administration classifies as a Class II medical device ((Class I devices, “not intended to help support or sustain life or be substantially important in preventing impairment to human health” (Code of Federal Regulations) are simple  items such as canes or walkers and can generally sold without advance approval as long as they are safe. Class II devices, which includes most things that do any measurement or assessment, require proof of both safety and effectiveness. Class III devices are  the most regulated and are almost never sold except through medical professionals.)) , especially if there is anything novel about it.

The 23 and Me Challenge. The same sort of regulatory regime that cracked down on the Google-backed genetics company 23 and Me can make the consumer market for medical devices a big challenge. The AliveCor Heart Monitor (photo above) is a two-contact electrocardiogram that works as a case for an iPhone or a Samsung Galaxy S3 or S 4. But even if you know how to read an EKG yourself, you cannot just use it that way (at least not legally.) Although you can now order the $199 device without a prescription, you must send  the readings off for interpretation by either an AliceCore “cardiac technician” or clinical review by a board-certified cardiologist.

An executive of one company, who wanted to remain anonymous because of ongoing negotiations with the FDA, gave me an example of the frustrations. As part of a comprehensive home care system, the company had developed a connected blood glucose monitor. A diabetic patient would take regular readings, which would both be sent to a physician and measured against a database to give an interpretation and advice, say to go for a walk or eat something soon to regulate the glucose level. The FDA was fine with the physician notification part, but said absolutely no to advice and interpretation because that was practicing medicine and could only be done by a licensed professional.

The Challenge of Integration. Another impediment to entry into this market that the for mobile healthcare devices–glucose meters, pulse oximeters, blood pressure monitors, or pretty much anything else–they need to be part of an integrated system that pumps data into providers’ systems and specifically into their electronic medical records. This is an extremely complicated integration task and is almost certainly left to companies such as Verizon, AT&T, and Qualcomm that have made major investment in these systems. And even then it isn’t easy. It took Verizon more than two years to win full FDA approval for its machine-to-machine Healthcare Enabled solutions network.

The complexity of the approvals process makes for a painfully slow path to market. The realities of the system means that most purchasing is done not by consumers and often not healthcare providers, but third-party payers. Prices are high and markets are relatively small.

Just the sort of business the Apple hates.  I do expect that Apple will enter the wellness and fitness market with sensor devices that take advantage of the M7 sensor chip, which made its debut in the iPhone 5s.This is a crowded field, with companies such as Fitbit, Jawbone, and Nike already established as incumbents, but I would be surprised to see Apple do something new and exciting in coming months. But the broader healthcare business is a cup Apple may well prefer to let pass its lips.

When Richard Nixon was elected president, Herblock, the ascerbic Washington Post cartoonist who loved to draw Nixon with a menacing 5 o’clock shadow, promised the new president a clean shave. I’ve been a bit rough on Microsoft lately, but the appointment of Satya Nadella as chief executive officer merits a fresh look. And while the company faces many challenges, especially in consumer markets, Nadella also takes over a company with tremendous strengths, many of them in the areas for which he has been responsible.

The important thing to note about Microsoft is that while the company faces serious long-term problems resulting from the stagnation (at best) of its traditional PC business and its failure to gain notable traction in the growing mobile market, the company is nowhere close to being in crisis. It is not IBM in 1992 or Apple in 1997 or even Nintendo today.[pullquote]In effect, the choice of Nadella to head the company is a decision by the board to reward strength rather than reinforce failure.[/pullquote]

The money machine. In fact, Microsoft remains a money machine. In the six months ended Dec. 31, Microsoft earned an operating profit of $14.3 billion on revenues of $29.7 billion, a gross operating margin of 48% (the profit would, of course, have been significantly lower if the losses of the Nokia handset operations Microsoft is buying were incorporated on a pro forma basis.) Microsoft’s commercial operations, of which Nadella’s cloud and enterprise group is a large part, account for 55% of the sales and 66% of the profits of the corporation. In effect, the choice of Nadella to head the company is a decision by the board to reward strength rather than reinforce failure.

Technology journalism and analysis is so tightly focussed on consumer and mobile markets that it has largely ignored Microsoft’s remarkable success in business software and services. The enterprise, and to a very significant extent, small and medium business, remain Microsoft territory. Tablets, mostly the iPad, are gaining ground but business is still overwhelmingly PC country, it is likely to remain so, and it runs on Windows and Office. Corporate mail and collaboration is largely Exchange and SharePoint, SQL Server has a big chunk of the mid-range database business and Dynamics has been coming on strong in CRM, ERP, and analytics.

Cloud success. Microsoft has had considerable success converting its software business into a subscription model for both business and consumers. And it has made great strides moving into the cloud, from  its Azure Platform as a Service business to OneDrive (formerly SkyDrive, until it lost a trademark battle with Sky Broadcasting.)

As venture capitalist Brad Silverberg, who headed Microsoft’s Windows 95 development, wrote for Cnet:

Satya has reinvigorated Microsoft’s server and tools business. He’s done a remarkable job getting Microsoft to move fast on the cloud and begin staking out a strong position against difficult competitors, such as Amazon. Most of all, he recognized that the world has changed and that to be relevant and become a leader again, Microsoft needs to embrace those changes and offer solutions for customers that fit in that new world. Whereas once open source was regarded as a cancer at Microsoft, Satya has found a way for Microsoft to add value while supporting new standards, like Linux, Hadoop, Ruby on Rails. It’s exciting to see Microsoft play well in this new world and offer differentiated solutions.

Keeping the parts of the company he knows well on track is the easy part for Nadella. Fortunately, the cash that continues to pour out of the Microsoft enterprise engine buys plenty of time to fix the not so good parts. The first challenge is dealing with Windows. Not being a stupid company, Microsoft realizes that it made a fundamental mistake in the design of Windows 8. The notion that cramming both touch-based and keyboard-and-mouse driven user interfaces into a single package and forcing both table and traditional PC users to deal with both to varying extents was a really awful idea. But Microsoft took a step back with Windows 8.1, is about to take another with Windows 8.1 Update 1 and may go the rest of the way with what may or may not be called Windows 9. due to be previewed at the Build developer conference in April.

Winning the  enterprise. To win enterprise support for Windows 9 and keep Windows 7 from becoming the XP for the next decade, Microsoft needs to give customers the good stuff from Windows 8, such as the cloud integration, while freeing it from a touch-first UI that no one wants on traditional laptops and desktops that are still the backbone of business. At the same time it needs to free tablet users from the legacies of the desktop, which require that the Surface be shackled to a keyboard. The answer may be a rebirth of Windows RT, but this time backed by a rich suite of touch-only apps, including a new version of Office.

Fixing Windows Phone is even more difficult. Many of the same people who hate Windows 8 actually like Windows Phone and also like the new Nokia handsets. But outside of a few markets in Europe and Latin America, it just hasn’t gotten much traction in a field dominated by Apple and Android. Microsoft’s existing hardware business, which consists of both Surface tablets and Xbox consoles, along with a profitable range of accessories, eked out a gross margin of $617 million on sales of $6.1 billion last year–Microsoft did not report the operating margin for hardware, the but the businesses were probably in the red after expenses were fully allocated. Nokia is continuing to lose money by the bucketful.

Struggling phones. There’s no easy way out of this mess. Microsoft has picked up all the business it can from the collapse of BlackBerry, leaving it to fight iPhone and Android. Windows Phone gains have come mainly in the low end of the market, where sales are easier to come by than profits, and it could end up fighting for share with the Nokia Asha feature phones it will still own. Fortunately, the losses from the phone business are modest, even with the Nokia red ink added in, and Microsoft can go on absorbing them for some time while it looks for a solution.

Another interesting dynamic for Nadella will be the role played by Microsoft founder Bill Gates, stepped down as nonexecutive chairman to be succeeded by John Thompson, a former IBM executive and one-time CEO of Symantec who headed the search committee. Gates will become a part-time, but potentially highly influential technology adviser to Nardella. There has been much speculation of where Gates thinks Microsoft should move but he, typically, has kept his own counsel. Ballmer also surprised many observers by keeping his seat on the board, though he will have no management role.

On the surface, the television business seems to be sailing through stormy seas on a relatively even keel. Viewership is holding up even in the face of ever-growing alternatives. Comcast, in the course of reporting a strong quarter, said that subscribers rose in the fourth calendar quarter. It was an increase of just 43,000, not much more than rounding error, but it came after seven years of steady declines. Intel had grand plans for a disruptive internet-based TV service, but fled with its tail between its legs, selling the aborted project to Verizon.

But the weather could be getting rougher for the incumbent powers of the TV business. The threats are disparate and affect different players in very different ways. Power is moving slowly but inexorable from distributors to content owners and producers, and distribution itself is moving from traditional cable, satellite, and over-the-air channels to the over-the-top internet.

Over-the-top wrestling. One of the more intriguing developments was the CES announcement by World Wrestling Entertainment that it will launch an over-the-top channel,  including what had been pay-per-view events, for a $10 monthly subscription. In the style that has become typical of over-the-top providers, WWE will make the channel available on just about every device capable of displaying the video: PCs, iOS, Adroid, Kindle Fire, Sony PS/3 and PS/4. Mirosoft Xbox 360, and Roku will be supported at launch.  Xbox One and smart TVs will be aded this summer.

This is a clear threat to cable’s pay-per-view business, but the bigger and more imminent threat may be to over-the-air broadcasters. The U.S. Supreme Court has agreed to hear a case on the legality of Aereo, a rather odd technology that uses banks of tiny TV antennas, one per subscriber, to deliver broadcast TV over the internet. Broadcasters claim that Aereo, which is backed by Barry Diller’s IAC/InterActive, is violating their copyrights and appeals courts have divided on the question, opening the way to a Supreme Court hearing.

The real issue in the case is that Aereo (and competitors using similar technology) do not pay broadcasters to retransmit over-the-air content. These rapidly growing fees, estimated at $3.3 billion this year by SNL Kagan, are negotiated between broadcasters and cable operators and have become a a major source of revenue to broadcasters.

A Supreme Court ruling in favor of Aereo will certainly bring dramatic changes to the broadcasting business. A legal way to circumvent retransmission fees could give content owners, particularly sports leagues, a powerful incentive to switch their content from over-the-air broadcasts to cable and over-the-top internet. Fox Network has already threatened that it may do just that.

(A secondary effect, with important implications for mobile data, is that a threat to retransmission fees may make broadcast licenses less attractive and make station owners more willing to surrender their licenses and participate in the incentive auction of TV spectrum, now scheduled for next year.)

Easier delivery. Another threat to the traditional TV model is that the delivery of over-the-top content to TV sets is getting a lot easier. One impediment has been the requirement for multiple set top boxes to receive all the content and my ideal remains a single box that integrates cable and internet content with a unified interface. There is not technical barrier to this, but it will happen when cable operators are ready for it and not before.

TV makers have tried to simplify things by handling over-the-top content directly on internet-connected smart TVs, but these have been hobbled by generally horrible user interfaces. LG has achieved something of a breakthrough by taking the ex-Palm webOS assets it bought from Hewlett-Packard and turning the software into a surprisingly good user interfaces for the new TVs it showed at CES. Also at CES, Chinese TV makers Hisense and TCL showed sets featuring built-in Roku services, which include the broadest assortment of over-the-top offerings.

Of course, content owners still hold the real keys, and here the trends are somewhat contradictory. Netflix, and to a lesser extent Amazon Instant Video, have found some success getting original content produced for over-the-top distribution. Netflix’s House of Cards and Orange Is the New Black are the first authentic internet hits.

A tough nut. Live sports continue to be the toughest nut to crack, for the good and sufficient reason that sports leagues have not found a path to internet distribution that comes close to the gold mine of  cable and broadcast distribution. ESPN, the richest property in cable land, offers a lot of content online, but only to viewers who are already ESPN subscribers via their cable systems.

ESPN has considered a standalone over-the-top service sold directly to subscribers, but President John Skipper told The Wall Street Journal “it’s not close yet.” Like other content owners and distributors, ESPN finds the current cable-based business model very lucrative and plans to stick with it for as long as it can. Says Skipper: “Our calculation right now is we’re going to ride this. We’re going to ride it as long as it makes sense.”

The one potential disruptor you did not see me mention was Apple and the mythical Apple television set. Maybe this will happen some day, but 2014 doesn’t seem any more likely than the last several years. For now, Apple TV is just another player in the crowded over-the-top set top box field with a nice, but not terribly compelling project.