Category: Featured Tech.pinions

Human-Computer Interface Transitions will Continue to Drive Market Changes

As a former executive and product manager for end consumer products and technologies, I have planned and conducted extensive primary research on Human-Computer Interfaces (HCI) or Human Machine Interface (HMI). A lot of this research was for the industrial design of consumer products and their mice, keyboards, and even buttons. I conducted other research for software and web properties, too. Research was one input that was mixed with gut instinct and experience which led to final decisions, and in those times and companies for which I worked, were #1 in their markets. Only recently have innovations in HCI come to the forefront of the discussion as the iPhone, iPad and XBOX Kinect have led in HCI and in market leadership. I believe there is a connection between HCI and market leadership which needs more exploration.

For years, the keyboard and mouse dominated in HCI. For the previous deskbound compute paradigm, the keyboard was the best way to input text and perform certain shortcuts. The mouse was the best way to open programs, files and also move objects around the desktop. This metaphor even impacted phones. Early texting was done on 12 keys where users either forced it with one, two, or three strikes of a key to represent a different letter which was then improved with T9 text prediction. Thankfully, Blackberry popularized the QWERTY phone keyboard for much improved texting and of course, mobile email. Nokia smartphones then popularized the “joystick”, which served as a mini omni-directional pointer, once the industry shifted to an iconic, smartphone metaphor.

Then Apple changed everything with the iPhone. They both scrapped the physical keyboard and the physical pointer and replaced it with the finger. We can debate all day long if it were the capacitive touch screen, the app ecosystem, or something else that drove Apple to its successful heights, but we can all agree that Apple needed both to make a winner. Just use on of those $99 tablets with a resistive touch screen and you will know what I’m talking about.

The touchpad has gone through many noticeable changes as well. Remember when every notebook had a touchpad and two, sometimes three buttons? Now look at Dell’s XPS 13, the MacBook Air and the MacBook Pro. We are now looking at a world with giant trackpads that can recognize the multitudes of gestures with minimal effort.

Then Microsoft changed the game with the XBOX Kinect. Interestingly enough, like Apple, Microsoft eliminated physical peripherals and replaced with a body part or multiple body parts. Nintendo reinvented gaming with the Wii and its bevvy of physical controllers, and then Microsoft removed them and replaced them with major limbs of the body. In the future, Microsoft could remove the gaming headset microphone, too, once Kinect can differentiate between and separate different player’s voices.

Voice is of course one of the most recent battlegrounds. Microsoft has shipped voice command, control and dictation standard with Windows PC for nearly a decade but has never become mainstream. They do provide a very good “small dictionary” experience on the XBOX Kinect, though. Apple has Siri, of course, and Google has Voice. Microsoft may look like the laggard here based upon what they’ve produced on PCs and phones, but I am not counting them out. They have mountains of IP on voice and I wouldn’t doubt it if the industry ends up paying them a toll for many voice controlled system in a similar way OEMs are paying Microsoft every time they ship Android. This is just one reason Apple licenses Nuance for the front-end of Siri.

We are far from done with physical touch innovations. Just look at Windows 8 notebooks. Windows 8 notebooks are experiencing a dramatic shift, too, with their multiple gestures using multiple fingers. Just look at all the innovations Synaptics is driving for Windows 8. Their Gesture Suite for Windows 8 “modern touchpads” adds supports for the eight core gesture interactions introduced with Windows 8 touch, specifically supporting the new edge swipes to navigate the fundamentals of Windows 8 Metro experience. Interestingly, with the addition of all of the Windows 8 gestures on the trackpad, for certain usage models, the external mouse actually starts to get in the way of the experience. I can see as touch displays and advanced touchpads become commonplace, this could eliminate the need for a mouse. This would be interesting as in previous HCI shifts, it resulted in the elimination of a physical device to improve the experience.

The long-term future holds many, many innovations, too. I attended this year’s annual SIGCHI Conference in Austin, TX, which I like to describe as the “SIGGRAPH for HCI” and it is truly amazing what our future holds. Multiple companies and universities are working on virtual keyboards, near field air touch using stereopsis (2+ cameras), improved audio beam forming for better far-field and a bevy of other HCI techniques that you have to see to believe.

What can we take away from all of this? One very important takeaway here is to realize that those companies I cited who led with major HCI changes ended up leading in their associated market spaces. This was true for Blackberry and Nokia during their haydays, and now it is Apple, Microsoft and maybe Google’s turn. It doesn’t always stand true, though in commercial markets, but in many cases, stands true for consumer companies. Just look at SAP. In the future, it is important to keep your eyes on companies investing heavily in HCI technologies; companies like Microsoft, Google, Apple, and innovators and enablers like Synaptics who I believe will continue to surprise us with advanced HCI techniques which will lead to market shifts.

Why I am Convinced Tablets are the Future

During the course of many conversations I have been having lately with industry insiders there is still a drastic underestimation of the importance of tablets. There are some I talk to who get it but I still feel that largely the sentiment around tablets and the iPad in particular is that it is a toy and not a personal computer. So in this column I am hoping to articulate my view on this subject.

More Consumption and Light Production Than Heavy Lifting

I know thinking objectively from other peoples vantage points is a challenge for many people. I am close friends with many of these people. However considering many different views and specifically trying to get inside peoples heads and see things from their perspective is something I greatly enjoy. That probably explains why I love anthropology and ethnographic research. The key point is that just because one consumer can not replace their laptop with a tablet does not mean that another consumer can not. Consumer preferences and usage models are not universal.

My conviction, which stems from my observational research with consumers, which we conducted at Creative Strategies, is that a large amount of consumers do not do complex things with their computers. I recall some research we did four years ago trying to gauge the importance and perceived demand of increased CPU performance by mass market consumers. In this research consumers shared with us how they use their PCs. What we observed was that the majority of consumers we interviewed used less than five primary applications on a daily basis and none of those applications were CPU intensive.

To further highlight this observation I want to share a chart containing some research from Alpha Wise and Morgan Stanley. In a large survey with mainstream consumers, their research findings came back very similar to our observational research. Specifically that roughly 75% of the time consumers were not using their PCs to do things we would consider “heavy lifting.” Although I am not sure that term applies to the mass market consumer.

Now the question I have after looking at that chart is: Which of the above tasks can not be done on an iPad? The answer is none.

Now if you are like me and you have large numbers of friends, family, social acquaintances, people who come up to me when they see me using my iPad with a keyboard at Starbucks, etc., then you probably give advice on what types of technology to buy. So when I ask them what they use their computers for, the answer almost always comes back the same. Not much they say, I mainly browse the internet, check email, watch videos, and occasionally need to make a spreadsheet or use a word processor.

Interestingly the overwhelming majority of conversations I have had around this topic, the person asking me the question is already leaning toward an iPad because they recognize it can do most of what they need it to the large majority of the time. So the question generally centers around whether or not they need a new notebook or whether they should just get an iPad and keep using their old notebook.

The long and short of it is that unless the person asking the question is a power user, creative professional, etc., it is very hard to not recommend them getting an iPad and just keep using the notebook they have for the less than 15% of the time they may possibly need it. You can probably guess what my advice generally is and I know many happy consumers who have taken this path.

Things We Hold We Love

Now I want to make one last point. The fascinating thing about tablets besides the points I made above, is that we don’t just touch them when we use them, we hold them. I am convinced there is something psychological about this that makes the tablet more personal than a notebook. With a notebook we touch (the keyboard and mouse / trackpad) but we don’t hold it while using it. The notebook form factor is not conducive to this usage model because it must be sitting on a flat surface, like a desk, table, or lap to be used.

We also hold tablets much closer to our person while we use them the majority of the time. Whereas with notebooks, we keep them at arms length. This fundamental difference in closeness is another reason I believe there is a deeper psychological attachment and lure to tablets than with notebooks.

If I was to rank emotional attachment to devices of a personal nature I would say the smartphone comes first, then the tablet, then the notebook. Smartphones and tablets we touch to use and hold to use, while the notebook we just touch, and I use the word touch loosely with the notebook form factor because it is not a touch computer like the smartphone and tablet–and I am not convinced it ever will be.

The fundamental truth is that there is a distinctly different relationship consumers are beginning to form with tablets that they never developed with notebooks. We continually hear in consumer interviews how much people love their iPads and can not live without it. Had this attachment developed with notebooks they wouldn’t have delegated them to the back room. And think about the millions (and growing) of kids who are developing this relationship with tablets in their formative years. I am confident my kids will have no use for a notebook in the future. Desktop maybe, or perhaps central home server, but notebook– not so much.

Following my logic, it should not be tough to see why we are so bullish on tablets. There are the above reasons, along with many more than I have time to get into (but will in our upcoming tablet report, shameless plug), which are all transforming and reshaping this industry before our eyes. The challenge is not everyone sees it.

The Opinion Cast: Is there a 7-Inch Tablet Market?

In this episode of our opinion cast Steve Wildstrom, John Kirk and myself discuss the potential for a 7″ tablet market.

We explore Amazon’s strategy, Apple’s potential entry with an iPad mini, and Google’s Nexus 7″. Business model issues were a key part of the conversation as well as whether or not Apple needs to make a 7″ tablet.

You can also subscribe to our opinion cast in iTunes here.

PC Growth isn’t Flat, Windows Is

We are living in fascinating times as the personal computing industry is undergoing its biggest transformation since its inception. Tablet computing is leading the charge and forcing nearly everyone in the industry to relearn what they knew about personal computing and its future.

There is no doubt that personal computing is evolving and transforming. With my role as an industry analyst, I believe it is important to present information to the industry which reflects what is accurately happening in the market at any given time. It is for this reason that I believe that not including tablets in industry wide PC sales numbers and forecasts is disingenuous and does not accurately reflect market conditions.

Recent quarter estimates from IDC and Gartner made headlines as they point out that PC growth is remaining relatively flat. There are more theories surrounding this point than I have time to get into but the bottom line is that there is simply no growth happening right now with desktops and clamshell notebooks.

So what is happening in the market and what can we learn about the current conditions within consumer markets? A series of interesting data points lead to an important observation. That observation is that PCs aren’t flat or in decline, demand for the Windows platform is.

Horace Dediu at Asymco created a fascinating chart and series of data points where he broke down the Windows platform advantage and how it is eroding. In the following chart he created he points out how in 2004 the Windows platform peaked in its multiple of Windows products shipped per single Mac shipped. After 2004 multiples began to decrease and starting in 2007 with the release of the iPhone, there is a steady and rapid decline of the Windows platform advantage.

This chart can be summed up with the following significant point Horace makes in his article:

“If we consider all the devices Apple sells, the whittling becomes even more significant and the multiple drops to below 2. Seen this way, Post-PC devices wiped out of leverage faster than it was originally built. They not only reversed the advantage but cancelled it altogether.”

Now turning to the flat notebook and desktop growth trend. My conviction is that tablet computers (defined as tablets with screen sizes larger than 9.7 inches) is an evolution of the computing form factor but still a personal computer. This is why I agree with Canalys who includes tablets as PCs in their market data.

I shared my opinion about tablets and the new era of personal computing in this column.

If we were to include tablets into the data for personal computers we would see that the market is not in decline but actually a steep incline. In fact if we were to include tablets into personal computer shipment forecasts for 2012 we would see over 100% year over year growth.

By choosing to not include tablets we will be lucky if we see 20% growth in this calendar year. But as I stated at the beginning of this column, to not include tablets in PC shipments would not be an accurate reflection of what is happening in the market.

We can debate semantics all day as to whether or not tablets should be considered PCs. All the while our interviews with consumers are consistently proving that they are using their iPads as computers to do many, and in some cases all, of the regular tasks they used to do with their notebooks. Given the ways we see consumers using iPads there is simply no denying that the iPad is a personal computer. Some people will have their personal computing needs met by a tablet, others by notebooks, and others by desktops, or even perhaps some combination of the three.

The iPad, and tablets in general, simply represent an evolution of the form and function of a personal computer. Therefore we should count them as PCs but breakout their specific shipment growth amidst other computing form factors like we do already with desktops and notebooks.

Now obviously if we did this we would show that most if not all of the PC growth belongs to Apple. But as I said at the beginning I am interested in accurately presenting what is happening in the industry and most of the growth does in fact belong to Apple.

So now the question remains as to whether or not Windows 8 will be the great equalizer and inject growth into PCs, both clamshell and tablet, for non Apple vendors. That is a question I will let linger until a later time.

However, this fact remains and needs to be continually emphasized. If we step back and look at what is happening holistically in the personal computer market, it is clear that we are not in a phase of flat or declining growth, rather we are at the beginning of a rapid and exciting growth phase.

Does Apple Hate the Environment?

No EPEATApple has had a complicated relationship with environmentalists. The company prides itself on its greenness in many ways, having been a leader in eliminating lead, bromides, PVC, and excess packaging from its products and building renewable energy sources for its North Carolina data center. But it has tangled frequently with environmental groups, especially Greenpeace.

Some of Apple’s clashes appear to result from tension between a narrow, regulation-based view of environmentalism and the demands of product innovation. Apple ignited the latest round in a running battle this week by pulling out of EPEAT, a organization dedicated to, as its mission statement says, “a world where the negative environmental and social impacts of electronics are continually reduced and electronic products are designed to accelerate the world’s transition to sustainability.” Not only will Apple not submit new products for EPEAT certification, but it asked to remove 39 already certified products from the EPEAT registry.

Apple, as usual, remains opaque about its motivations and intentions. It is stoic in the face of criticism–a Greenpeace spokesman said Apple “has pitted design against the environment — and chosen design. They’re making a big bet that people don’t care, but recycling is a big issue.” Prodded by The Loop’s Jim Dalrymple (a Tech.pinions contributor), Apple’s Kristen Huguet said: “Apple takes a comprehensive approach to measuring our environmental impact and all of our products meet the strictest energy efficiency standards backed by the US government, Energy Star 5.2. We also lead the industry by reporting each product’s greenhouse gas emissions on our website, and Apple products are superior in other important environmental areas not measured by EPEAT, such as removal of toxic materials.”

Pulling out of EPEAT could cost Apple. The City of San Francisco has a policy that requires it to buy EPEAT certified products and it says it won’t be buying any more Macs from Apple. (EPEAT standards cover laptops and desktops, not phones or tablets.) Federal agencies that wish to buy Macs would have to seek waivers to purchase non-certified products. But it’s worth noting that while enterprises have begon to buy iPads in large numbers, they have not be major Mac customers.

There may be less here than meets the eye. With the newest iPads and MacBook Pros, Apple has moved to more integrated designs. Display electronics are bonded to glass and batteries are bonded to the case. This violates EPEAT standards, which require that that electronic product be easy to disassemble into recyclable components. This doesn’t mean that Apple products can’t be recycled or even necessarily that they are harder to recycle (though they may be.)  All we can say for certain is that the new Apple products fail to meet a set of prescriptive rules that define “sustainability” in a very specific way.

This is a frequent problem with regulation. Regulators, whether government agencies or private alliances of “stakeholders” like EPEAT, love to prescribe solutions. Follow the checklist and you get certification. It’s easy for the regulators, the regulated, and for the compliance-assistance industries that inevitably spring up. But it is hell on innovation. Prescriptive regulations are most easily complied with if you go on doing things the way they have always been done. Regulators, public or private, respond more slowly than markets and often serve to discourage the adoption of new technologies that don’t fit well into the existing regulatory paradigm. Regulations also tend to lag well behind changes in the markets; witness the fact that EPEAT has not yet caught up with smartphones or tablets. (If you want a particularly horrible example of regulatory lag, consider the Federal Communications Commission, which is trying to shoehorn rapidly evolving radio technologies into a regime of spectrum allocation that seems stuck in the mid-20th century.)

Because of Apple’s reticence, I don’t know whether its new products are really less “green” or “sustainable”–whatever, exactly, that means. Perhaps, the difficulty of disassembling them is offset by less use of materials, or elimination of toxics, or other gains. The company, in its magnificent indifference, is losing the PR war by refusing to fight. But we should be very careful not to assume that just because Apple has withdrawn from a voluntary standard that is has decided to rape the environment–or even that it is sacrificing responsbility on the altar of design.

Microsoft to Apple: “Not On Our Watch”

“Declaring that Microsoft and its partners had in the past “ceded some of the boundary between hardware and software innovation” to Apple, Microsoft CEO Steve Ballmer told CRN on Monday that the company’s Surface tablet marks a new era in which the computer software giant will leave no “stone unturned” in its innovation battle against Apple.

“We are trying to make absolutely clear we are not going to leave any space uncovered to Apple,” said an exuberant Ballmer in a 30-minute interview after addressing some 16,000 partners at the company’s annual Worldwide Partner Conference in Toronto. “We are not. No space uncovered that is Apple’s.

“But we are not going to let any piece of this [go uncontested to Apple],” shouted Ballmer. “Not the consumer cloud. Not hardware software innovation. We are not leaving any of that to Apple by itself. Not going to happen. Not on our watch.”

Photo of Steve BallmerWho’s On Watch and Exactly What are They Watching?

Now if one were a cynic, one might well ask Ballmer: “If Microsoft is not ceding anything to Apple on your watch, then who exactly has been on watch for the past dozen years?” But let’s not go there.

Instead, let’s focus on the rest of Ballmer’s statement because, in my opinion, it epitomizes exactly why Microsoft has been struggling of late.

Eyes Not On The Prize

Do you think, for even one-second, that the executives at Apple ever sit around and talk about not leaving “any space uncovered to Microsoft?” Of course not. That would be counter-productive. Apple spends its time implementing its strategy and doing what it does best, not “covering” what its competitors do best.

Chasing, Not Leading

Trying to “cover” what Apple is doing is not new behavior for Microsoft. Over the past ten years, Microsoft has followed the same strategy of not leaving anything Apple does uncovered by attacking the iPod with the Zune, attacking the iPhone with Windows Phone 7 and now, attacking the iPad with the Surface. The results, so far, have not been encouraging. The Zune was officially discontinued this year. Come to think of it, Windows Phone 7 was officially discontinued this year too. That only leaves the Surface and, while it may hit the ground running in October, it’s already ceded a two and a half year lead to Apple’s iPad. And that’s too long.

Play to Your Strengths, Not to the Strengths of Your Competitors

The problem, as I see it, is that while Apple is forging ahead on the path that they’ve mapped out for themselves, Microsoft is following Apple around and playing catch up. Instead of acting on their strengths, they’re reacting to their weaknesses.

Further, instead of creating new and innovative devices of their own, Microsoft is playing a game of one-up. They see what Apple has done, they study it, they come up with a differentiated product – perhaps even an arguably better product, and then–two years later–they bring their one-up product to market and declare themselves the victor. Only thing is, by the time they bring their product to market, Apple and the market have already moved on.

Microsoft needs to stop trying to one-up the competition. Apple didn’t one-up the competition with the iPod–they re-invented the MP3 market. Apple didn’t one-up the competition with the iPhone–they re-invented pocketable computing. Apple didn’t one-up the competition with the iPad–they created a whole new category of computing.

A Word of Advice

Microsoft, a word of advice: If you’re so insistent on doing Apple one better, maybe Apple’s attitude toward their competition is just the kind of strategic advantage that you should be adopting and improving upon. Stop worrying about what Apple is doing on your watch. In fact, stop watching Apple altogether. It seems to me that you’ve been watching Apple far too long and far too much already.

Instead…

  • Stop focusing on doing the competition one better and focus, instead, on doing what you do best.
  • Stop focusing on not leaving anything uncontested and focus, instead, on only entering those contests that you’re best suited for.
  • Stop focusing on what you’re going to do TO the competition and start focusing, instead, on what you’re going to do FOR us, your customers.
  • Stop chasing the competition and, instead, start chasing your dreams.

Are Wearables the Next Wave of Computing?

Two weeks ago at Google I/O, Google thrust wearable computing into the mainstream, public eye by performing one of the most incredible stunts I had ever seen on the technology stage.  Wearing Google Glass and communicating via real-time voice and video, daredevils jumped out of a blimp, landed on the Moscone Center roof, rappelled down its side and biked into Google I/O to throngs of cheering participants.  Is wearable computing great for “show” but making no sense in reality, or is this technology truly the future of computing?

We need to first define wearable computing.  This may appear simple in that it’s “computing you can wear”, but it’s a bit more complicated than that as I have seen some very confused news articles on it.  Let’s start with what they aren’t.  Wearables are not computing devices that are implanted into the body.  This may appear at first glance to be an odd thing to even discuss, but over the next ten years there will be very many compute devices implanted to help people with their medical ailments to help with sight, hearing, and drug dispensing.  Related to this, wearables are not implanted into prosthetic limbs either.  Wearables are compute devices embedded into items attached to the body.  Some are hidden, some are visible.  Some are specific compute devices; others are embedded into something we view today as something totally different like glasses, contact lenses, clothing, watches and even jewelry.

So now we know what wearable computers are, let’s look at the current challenges making them more than a niche today.  For all wearables, input and output are the biggest issues today that keep them from being useful or inexpensive.  Today, keyboards and pointing devices (fingers included) are the most prevalent input methods for today’s computer devices.  Useful voice control is new and gaining popularity, but isn’t nearly as popular as keyboard, mouse, and touch.  For wearable input to become popular, voice command, control, and dictation will need to be greatly improved.  This has begun already with Apple Siri and Google Voice, but will need to be improved by factors of ten to use it as a primary input method.  Ironically, improvements in wearable output will help with help with input.  Let me explain.  Picture the Google Glass display that will be built into the glasses.  Because it knows where you are looking by using pupil tracking, it will know even better what you are looking at which adds context to your command.  The final input method in research right now is BCI, or brain control interface.  The medical field is investing heavily in this, primarily as a way to give quadriplegics and brain-injured a fuller life.

Output for wearables will be primarily auditory, but of course, displays will also provide us the information we want and need. Consumers will be able to pick the voice and personality as easy as they get ring-tones.  Music stars and even cartoon character “agent voices” will be for sale and downloadable like an app is today.  Some users will opt for today’s style earphones, but others will opt for the newer technology that fits directly into the ear canal like a mini-hearing aid, virtually unnoticeable to the naked eye.

Display output is the most industry-confused part of the wearable equation.  The industry is confused on this because they are not thinking beyond today’s odd-looking Google Glass’s glasses form factor.  Over time, this display technology will be integrated as an option into your favorite’s brand of designer glasses. You will not be able to tell what are regular glasses and ones used for wearables.  Contact lenses are being reworked as well.  Prototypes already exist for contact lenses that work as displays, so like all emerging tech, will make it into the mainstream over time.  The final, yet most important aspect to the wearable display is that every display within viewing distance will be a display.  Based on advancements in wireless display technology and the prevalence of displays everywhere, your wearable will display data in your car, your office, the bathroom mirror, your TV, your refrigerator…… pretty much everywhere.

So if the input-output problem is fixed, does this mean wearables will be an instant success?  No, it does not.  Here, we need to talk about the incremental value it brings versus the alternatives, primarily smartphones.   Smartphones may actually morph into wearables, but for the sake of this analysis, it helps to keep them separate.  On the plus side, wearables will be almost invisible, lighter, more durable, and even more accurate for input when combined with integrated visual output.  New usage models will emerge, too, like driving assistance.  Imagine the future of turn-by-turn directions with your heads-up-display integrated into your Ray Ban Wayfarers. On the negative side, wearables will be more expensive, have less battery life, less compute performance and storage, and almost unusable if a display isn’t available all the time.  This is a very simplified view of the variables that consumers will be looking look at as they make trade-offs, but these same elements will be researched in-depth over many, many years.

So are wearables the next wave of computing?  The short answer is yes but the more difficult question is when and how pervasive.  I believe wearables will evolve quicker than the 30 years it took cellphones to become pervasive.  The new usage models for driving, sports, games and video entertainment will dictate just how quickly this will evolve.  I believe as technology has fully “appified” and Moore’s law will still be driving silicon densities, wearables will be mainstream in 7-10 years.

Can You Be Identified from Anonymous Data? It’s Not So Simple

For the past several years, a highly technical but very important debate has raged among privacy experts: How easy is it to identify an individual from a collection of data that supposedly lacks personally identifiable information? Those who say that it is relatively easy argue for greater restrictions on the release of data and more stringent efforts to anonymize it. Their opponents argue that worrying too much about the risk of “re-identification” deprives researchers of valuable data in fields such as epidemiology.

Daniel_Barth-Jones Photo
Daniel Barth-Jones (Columbia Univ.)

A centerpiece of the debate is a 1997 incident in which Latanya Sweeney, then an MIT graduate student and now a computer scientist at Harvard, identified the medical records of Massachusetts Governor William Weld from information publicly available in a state insurance database. The incident led to important changes in privacy rules for medical information, especially under the Health Insurance Portability and Accessibility Act (HIPAA), and 15 years later it is still influencing the debate over data privacy.

But a new draft paper by Daniel C. Barth-Jones of Columbia’s Mailman School of Public Health suggests the Weld re-identification may have been a fluke that depended on Weld’s prominence as a public figure who suffered a highly publicized medical incident. For ordinary folks, the risks of such an identification are much lower.

The facts of the Weld case are not in dispute. On May 18, 1996, Weld collapsed at a public event. He was diagnosed with the flu and released after a brief hospitalization. With knowledge of Weld’s date of birth and zip code, Sweeney was able to locate Weld’s records in the Massachusetts Group Insurance Commission (GIC) database and verify them with a cross-reference to Cambridge voter-registration records.

Barth-Jones points out that this is not at all the same as finding the records of an arbitrary individual. For one thing, the date and place of his hospitalization were public information. But his bigger concern is with the use of voter registration data to confirm that the GIC records, which had no names associated with them, were truly Weld’s. The danger of a false positive arises from the possibilities that there might be individuals in the  zip code with the same date of birth who are not registered to vote in Cambridge and therefore do not appear in the database. In fact, Barth-Jones concludes that there was only a 62% to 66% probability that the re-identification of Weld through the voter list was correct. The U.S. has no universal listing of citizens by name, let alone by name and address. Voter lists are about as good as it gets.

This is not merely an academic dispute. Barth-Jones credits Sweeney’s 1997 paper for bringing needed limitations on the amount of medical data made public under HIPAA. For example, published records may now only contain a three-digit rather than a five-digit zip code and year, rather than year and day, of birth. This means a much larger number of individuals will share the same basic information, making successful identification far more difficult.

Privacy advocates, however, sometimes continue to argue as if these changes had never been made and that the Weld re-identification is a typical event. For example, Paul Ohm of the University of Colorado Law School argues, “Thus, easy, cheap, powerful re-identification will cause significant harm that is difficult to avoid. Faced with these daunting new challenges, regulators must find new ways to measure the risk to privacy in different contexts.” Barth-Jones maintains that re-identification is nowhere near as cheap and easy as Ohm suggests.

And there is a cost to further restrictions on the availability of data. In a paper entitled “The Tragedy of the Data Commons,” Jane Yakowitz Bambauer of the Brooklyn Law School, who has collaborated with Barth-Jones, writes: “[A]nonymized data is crucial to beneficial social research, and constitutes a public resource–a commons–under threat of depletion…. [S]ince current privacy policies overtax valuable research without reducing any realistic risks, law should provide a safe harbor for the dissemination of research data.”

The Case for 7-inch Tablets

Last week the rumor mills and tech blogs were bustling last week about the possibility of a 7-inch iPad, potentially called the iPad Mini. Rather than focus this entire column on why it makes sense for Apple to make a smaller version of the iPad, I figured I would point out why I think there is a market for 7″ tablets and how such a product may fit in Apple’s and others portfolio.

The Evolution of Portable Entertainment

In my view the 7″ tablet represents the evolution of portable entertainment. In many of the same ways that the iPad itself represents the evolution of portable computing, so would a smaller iPad represent the evolution of portable entertainment. I spoke about this and was quoted on the subject last week with many press, and my overall point was that the right way to think about a smaller iPad is that it represents more the evolution of the iPod than the evolution of the iPad.

7″ tablets may very well be the ideal size for an ultra-portable entertainment focused tablet. The form factor itself makes it highly portable. It can fit in purses, coat pockets, and many other places easily. The screen size is more enjoyable for entertainment than the most pocketable computer (the smart phone) but still small enough to be more portable than a 9.7-10.1 inch tablet.

The larger tablets like the iPad are more mobile than notebooks but still capable of being used for productivity. In my view the iPad is a general purpose tablet where a 7″ tablet is more specialized and its value will be centered around entertainment.

For the iPad customer I don’t see the value of owning an iPad and an iPad mini. The iPad in my opinion is capable of fulfilling the task of personal computing for the vast majority of mass market, non power user consumers. In our talks with this specific group of consumers were are finding that their iPads are slowly replacing their traditional PCs and we expect this trend to continue.

However, there will still be plenty of consumers who still desire, want, need, a new notebook. This market may very well benefit from a more portable media companion like a 7″ tablet. The notebook plus a 7″ tablet combo will be an ideal solution for a certain segment of the market. And the sufficiency of the iPad as a portable media companion and personal computer will meet the needs of other segments of the market.

An iPad mini strengthens Apple’s ecosystem plain and simple.

For Google, and Amazon, a 7″ tablet is not an ecosystem strengthener it is an ecosystem extender. Amazon’s strategy is to drive commerce and they desire their screen to be consumers personal window to spend money in the Amazon commerce engine and consume Amazon services.

Google’s desire is to extend all of the Google services to a market broader than smart phones. The Nexus 7 is the first solid step in this direction and has all of Google’s services tightly integrated.

For all the above companies a pure media tablet play makes sense. All the above companies have more ways to make money on these devices than just the hardware. So where does that leave everyone else?

There was no MP3 Market

I recall the saying that there was not an MP3 market there was only an iPod market. The same case can be made for the iPad to date. The question in my mind is whether or not this 7-inch tablet market is sustainable for many or just a few. More specifically can anyone but Apple, Google, and Amazon make any money from this form factor?

I use the MP3 market illustration because I am willing to bet that the fundamentals of the 7″ tablet market will function very similar to the iPod market. Namely because the 7″ form factor represents the evolution of portable entertainment, which the iPod was an evolution of as well. These devices will also likely not see subsidization from a carrier any time soon or heavily discounted from a retailer. They are also highly dependent on a rich media ecosystem of services like music stores, video and TV show stores, digital books and magazines, etc. In many ways these devices represent to consumers a larger version of what they knew and loved about the iPod.

The devices being positioned primarily as entertainment devices, and their subsequent dependence of rich media services, only strengthens the case that this market favors the few over the many. I am in no way saying others can’t compete only that it will be very difficult and they may need to turn over new stones in order to find partners who own all or parts of a rich media ecosystems.

Where is Microsoft?

This discussion about the 7-inch tablet segment begs a fascinating question. Can Microsoft play in it? Microsoft has fundamentally built their next generation operating systems as the purest blend between a full desktop and full tablet software platform. This philosophy is not going to work on a segment that is focused purely on media. Metro may all by itself but not Windows 8. So is the answer Windows Phone? Is Windows Phone the solution Microsoft can offer any potential customers looking at the 7″ segment? Microsoft has Nook assets at their disposal but the Nook platform was built on Android. Do they need to revamp Windows Phone or create something new around Nook assets? Or does Microsoft let Android have the 7″ market as the platform of choice for any company not named Apple?

Microsoft is on the eve of simply trying to gain a foothold in tablet computing at large, while on that same eve a new category is dawning that I don’t believe the are even remotely prepared for. Microsoft’s reaction to the 7″ tablet market will be one of the more interesting story lines to watch.

All in all the tablet category is still the fastest growing segment in personal computing. Even though 7″ tablets will be focused on entertainment and media they will continue to ignite this new growth phase of personal computing. I think we can again confidently predict that tablets will be hot again this holiday.

It’s Time for New Industry Innovations

First I wanted to thank the many folks who through Facebook, twitter and other social media found out that I had a heart attack that led to a triple bypass. So many of you sent get well notes and notes of prayers and good thoughts and they were all greatly appreciated. The doctors told me I was 30 minutes from a major stroke and 60 minutes from losing 50% of my heart muscle. I am glad I listened to my body and went to emergency and that saved me.
I am now in serious healing mode and am told I will be good as new by Sept . That is why I have not written any columns here at Tech.pinions for about 6 weeks. Only now am I getting my strength back to start writing again.

One interesting by product of this is the fact that for 2 weeks I was completely disconnected. I suppose if you keep a guy on morphine you can keep him disconnected. So once I was switched to a regular room the first thing I asked for was my iPad and Macbook Air. It took me a week to catch up and when I got home I devoured as much industry info I need to do my job.

Although a lot of news passed under the bridge, to be fair, I found nothing earth shattering. Even more disappointing was as I perused the products from Computex and they all seemed the same. Most of what I saw was just some type of variation on the same theme. This was played out later in the week when Microsoft introduced their Surface Computer. It too was a variation of things already done albeit with their version with their unique touches to it.

It seems to me that the industry is at a standstill. Where is the innovation going to come from? Where is the next iPad that revolutionizes personal computing? Where is the new user interface that change how we interact with our computer? Where are the flexible screens that would change the way we view things? When does the network become the computer?

It appears to me that Apple leads and then the industry spends the next 5 years catching up. That has been good for Apple but devastating for competitors. At some point, the industry needs to step up and make some bold steps of innovation on its own. HP has one of the richest labs known to man. They need to commercialize some of their great technology. Xerox PARC is known for their technology and mostly for things that got away such as Postscript, The Mouse and the graphical User Interface. They have great stuff Inside. In fact, nearly all of the OEM’s have innovation labs of their own and it is time for them to dig deep and start innovating from within.

I expect Apple to continue to innovate and lead, but for this industry to really make some strides and start changing the compute landscape dramatically, it is going to take more then Apple to make it happen. I am normally an industry optimist but those two weeks away from everything has made it clear that we are kind of stuck in a circle. Apple innovates and the rest of the industry spends the next 5 years playing catch up. Apple should innovate but the rest of the industry needs to innovate as well and at warp speed. If they do, the future of personal computing can be bright. If not, it will only be bright for Apple.

Smartphones, Tablets, and PCs: A Computer for Every Purpose

View of SantoriniI’m fresh back from a couple of lovely weeks cruising the Mediterranean. In addition to providing some needed relaxation, the trip convinced me that we are truly living in a golden age of computing. Whatever your need, there’s a device ideally suited for it–and this specialization will shape the future of the tech market.

I traveled with more equipment than was strictly necessary: A 13″ MacBook Air, a third-generation iPad with a Zagg keyboard, iPhone 4S, and a Kindle Fire (plus my wife had an Acer 10″ Honeycomb tablet.) The iPhone proved to be the workhorse. It was the device for which I had arranged international data service, so it was where I read my mail, checked my Twitter feed, and generally kept in touch.

When Wi-Fi was available (I refused to use the ship’s very expensive, very slow satellite-based connection), I’d fire up the iPad. At need, I would connect it through the iPhone, but I avoided tethering as much as possible to minimize the drain on a very limited data plan. I hardly used the MacBook at all. On one occasion when I decided to write a full Tech.pinions post on shipboard, I used the laptop because it was there, but could have done the job on the iPad. Mostly I used the MacBook just as a pipe to transfer photos from my camera to a small external hard drive. The Kindle was used exclusively for reading, and I ended up wishing I had brought a an E Ink Kindle rather than the Fire because the LCD screen was hard to read on deck.

My point here is that each of these devices fits into a usability niche and it makes sense, especially given the trend of falling prices, for people to have multiple computers–and all these devices are computers of varying capabilities–and choose the one they need for the job at hand. The devices I took all slid easily into my daypack with lots of room left for other stuff, and together they weighed less, and probably cost less, than the laptop I would have taken instead a few years ago.

The experience leads me to agree with Jim Dalrymple’s conclusion that Bill Gates is way off the mark with his argument that competitive pressure will force Apple to come up with a more versatile device along the lines of Microsoft’s forthcoming Surface tablet. Microsoft has always championed the idea that the most versatile device is the best device and that Windows is literally an all-purpose operating system. Microsoft is again missing the point in coming up with hardware and an operating system, Windows 8, that tries to be all things to all people at all times.  Apple continues to have a much better idea of device segmentation: the iPhone (and its cousin, the iPod touch), the iPad, and the MacBook  each fits into a specific niche of usability and each comes with core software closely tailored to that functionality. The iPhone is the device you always have with you. You turn to the iPad when you need a bigger display and software capable of greater complexity. And is you need multiple windows, true multitasking, lots of local storage, and maximum software flexibility, you fire up the MacBook. And if Apple does produce the hotly rumored mini-iPad, I suspect it will come with features that will determine its distinctive niche.

The do-it-all general purpose computer had a nice quarter-century run. But its day is over.

 

Bill Gates is wrong

In an interview with Charlie Rose earlier this week, Microsoft’s co-founder Bill Gates said it is “a strong possibility” that Apple may have to create a Surface-like device. Gates also said the introduction of Microsoft’s Surface tablet “is a seminal event.” I completely disagree on both counts.

By trying to combine what people do on their PC with what they want to do on a tablet, Microsoft feels it is offering the best of both worlds.The problem with that, as I’ve said before, is that people interact differently with a tablet than they do a computer. So, in reality, you don’t get the best of both worlds, but rather a mishmash of each.

The interaction people have with a touch device is something Apple understood early on and they embraced it. In doing so, they created a new way to interact with apps that includes using multi-finger gestures, as well as utilizing hardware components like accelerometers to enhance gaming.

Perhaps this isn’t what Microsoft had in mind for the Surface. It could be that Gates is referring to working on spreadsheets and word processing documents. This is why one model of the surface will allow you to use current desktop apps, like Office.

You can work with spreadsheets on the iPad too, using Apple’s iWork suite of apps. The major difference between the two is that with iWork on the iPad, you use your finger to interact with the app. You swipe, tap, touch and type all on the screen — exactly the way you would expect a touch app to work.

I’m not sure how Microsoft expects people to work with apps on the Surface. Desktop apps don’t work like touch apps, so the experience will undoubtedly be confusing. Some apps you swipe, others you using a stylus and still others you… do something else?

I still give Microsoft credit for not blindly following Apple into the tablet space, but I’m not convinced that this hybrid PC/Tablet model is the way to go.

I can see why Gates would consider the Surface such an important release. He’s betting the company on its success, and let’s face it, Microsoft hasn’t exactly been releasing successful products over the last 10 years.

Dumb or Disrupted? The Demise of RIM

Poor, dumb, old RIM

There sure has been an awful lot of talk of late about just how awful things have gotten for poor, dumb, old RIM. Some of the talk is sympathetic: “How could it have come to this?” A lot of the talk is apoplectic: “What is wrong with the players in the mobile industry?” Some of the talk is sad and regretful: “Oh, those poor people in Waterloo, Canada.”

But much of the talk has been downright giddy, spiteful, and soaked through and through with twenty-twenty hindsight.

“RIM,” the critics chortle, “was too arrogant to recognize the dangers posed by the iPhone and Android; too slow moving to react when they finally saw the danger; and too dumb to know what to do when they finally did react.”

“Keyboard loving co-CEO’s Jim Balsillie and Mike Lazaridis got exactly what was coming to them. Their sanctimonious, self-righteous, self-assured, sanguinity finally caught up to them and now they, and RIM, are paying the price for their arrogance and their ignorance.”

Hmm. Maybe. Maybe so. But then again, maybe not.

A Littler Perspective

In 2006, the crown princes of smart phones were RIM, Palm, Nokia and Microsoft. They were smart, successful companies run by smart, successful men.

Today, Palm is gone, Windows Mobile is gone and its replacement, Windows Phone 7, is running in place unable to gain any traction in the market. Meanwhile, Nokia has given up its independence and become a vassal to Microsoft and RIM has one foot in the grave.

Did all of these powerful companies and all of these smart CEO’s suddenly become incompetent and deadly dumb all at the same time? Or did something external happen that made them just look stupid to unsympathetic and unforgiving critics like you and me?

The iPhone Happend

In 2007, the iPhone happened. it’s not like the industry wasn’t watching. But what they saw didn’t scare them at all. It was pretty obvious, even at a cursory glance, than the iPhone was no phone competitor. They were oh so right. But that’s what made what was about to happen so very, very bad. Bad for them, at least.

Market disruption is caused when an innovation creates a new value network. Prior to 2007, smart phones were phones that did a little computing on the side. The iPhone was a computer that that did a little phone calling on the side. RIM, Palm and Nokia were phone companies. Apple, Google and Microsoft are computer companies. When the value shifted from the phone to the pocket computer, the advantage moved from the phone companies to the computer companies.

Palm, Nokia, RIM and Microsoft’s Windows Mobile thought they were safe from another phone competitor – especially one that wasn’t that great a phone and didn’t even come with a keyboard. They were right. But what Palm, Nokia, RIM and Microsoft didn’t realize was they weren’t competing with a phone. They were competing with a pocket computer.

The value chain had shifted. The incumbents were still – successfully – defending the old value chain. But their customers weren’t leaving them for better phones, they were leaving them for better computers. They fact that those computers sent texts, did email and even made phone calls was simply a bonus. The phone makers were blind-sided. The pocket computers were good enough to compete with them. But they had no answer to the superior benefits provided by the pocket computers.

  • Google

    • Google (Android) was the first to react. They dumped their RIM-like phone designs and (eventually) created a superb alternative to the iPhone. Their market success is a testament to their flexibility and their programming prowess.

    I don’t want, in any way, to diminish the stellar job that Google did with Android, but, in addition to being good, they might also have gotten just a little bit lucky too. (Nothing wrong with that.) Their timing was ideal. Their OS was ready, they hadn’t yet committed to the market and when the newly minted iPhone arrived on the scene, the Android team pivoted on a dime and took advantage of a gap in the market and what turned out to be a golden opportunity.

    The stuff of champions.

  • Palm

    • Palm was the next company to see the writing on the wall. They ditched their existing OS and went all in on webOS. Unfortunately for Palm (and perhaps for us all), they didn’t have the resources to sustain their efforts. They ran out of money, ran out of time and they ran out of chances.

    (I’m not going to rehash their second chance with HP. Too painful.)

  • Microsoft

    • Microsoft was the next company to see the light. We can mock Ballmer all we want for initially laughing at the iPhone but once Microsoft decided to act they acted decisively. Microsoft unceremoniously dumped Windows Mobile and entered into a massive effort to create the wholly re-imagined Windows Phone 7.

    Their reward? A tiny sliver of the market and no traction whatsoever. All of Microsoft’s business connections and all of their resources couldn’t buy them back into the market. Most didn’t know it at the time, but the window of opportunity to climb back into mobile phones that were really pocket computers had already closed or was closing fast.

  • Nokia

    • Nokia was the next to see the light or, in their case, they were next to see the “burning platform”. Ex-Microsoft executive Stephen Elop shoved Nokia off the platforms that were Symbian and MeeGo right into the icy waters that are Windows Phone 7. Their efforts, not unexpectedly, were met with a chilly reception. Nokia isn’t sunk yet but they may be going down for the third time. If circumstances don’t throw them a life preserver soon, we’ll be writing requiems for them next.

  • RIM

    • RIM was the last to have the scales fall from their eyes. And while it’s true that RIM’s co-CEO’s kept us all constantly entertained with their oh-so-dumb,-we-obviously-don’t-get-it quotes, it was probably over for them long, long ago.

    If it was already too late when Palm tried to make the switch; it if may have already been too late when Microsoft tried to make the switch, what chance did RIM’s belated efforts really have?

    Not an Excuse, but an Explanation

    It may be true that RIM was arrogant, RIM was slow to change and RIM made some bad choices. But if you had been in their shoes, you too may well have followed the same path that they did.

    In 2007, RIM was a bastion of strength and the iPhone was an impudent interloper. Go back and read the commentary from the time and you’ll see that even as the iPhone started to catch on and even as Android started its meteoric rise, RIM’s future was assured.

    RIM had an impenetrable moat built around their business. BBM’s instant message service and RIM’s security gave RIM two unique and competitor-proof features. Customers adored (and still adore) using RIM’s BlackBerry phones for texting and emailing. And business and government entities were never going to give up their CrackBerry’s and the airtight security that came with them.

    For RIM to have changed in 2007, 2008 or even 2009 would have seemed like madness. Why abandon one’s strengths to chase a chimera? Let consumers play with their Apple and Android toys. Real phone lovers loved to do real work on real phones like the RIM BlackBerry. And RIM’s loyalty and sales retention were second to none. They didn’t call those phones “Crackberries” for nothing.

    Requiem for RIM

    We can make fun of RIM and their codependent CEO’s all day long or – maybe, just maybe – they deserve our understanding instead of our derision. Maybe, instead of mocking RIM, we should be whispering a silent prayer of thanks that Apple didn’t come into our back yard and disrupt our business and make us all look as dumb as a box of rocks.

    Was RIM really dumb or were they doomed from the get go? The iPhone and the Android phones were pocket computers. Apple and Google and later Microsoft were computer companies with tons of experience in creating computer software and computer operating systems.

    RIM was a phone company that did computing on the side. Compared to Apple and Google, they had little experience in computers and computer operating systems. They would have had to abandon their roots, toss out everything they knew and chose to compete with computer companies on their terms, all while their current business model was still, not only viable but, very successful and profitable as well. When you think of it that way, it’s asking a awful lot.

    Conclusion

    Maybe RIM did wait too long. Or maybe their so-called window of opportunity never really existed in the first place. When the iPhone first appeared, RIM could have tossed everything that had worked for them in the past and chased a device that, by all rights, was sure to fail or, at best, become a niche product. They could have done that. But most likely, RIM never really had a chance at all. They were finished that moment, in January 2007, when Steve Jobs lifted the iconic device over his head and declared: “…and we call it..iPhone!”

    Further Thoughts on Apple and Investors

    In a post this morning, Ben Bajarin speculated on what it is in investors’ thinking about Apple that keeps the stock price relatively depressed. Like Ben, I am not a financial analyst, but I think the mystery is even deeper than he suggests.

    Price/earnings ratio chartApple’s stock price has move up smartly in recent months, but it has stayed pretty much in step with earnings–and the remarkable thing is how little investors think $1 of Apple profit is worth. The chart shows the price/earnings ratio–the recent stock price divided by per share earnings over the past 12 months–for Apple and a number of other tech companies. Apple’s PE of 14.2 actually puts it below the average of 15.4 and the median of 14.5 for the S&P 500.

    None of the explanations advanced skeptically by Ben can begin to explain this. I think it is inevitable that the meteoric growth that Apple has enjoyed in recent quarters will soon slow if only because it is gradually saturating its markets–and the larger your base is, the harder it is to sustain high growth rates. But there is every reason to believe that Apple’s growth over any reasonable period in the future will exceed that of IBM, Oracle, or SAP, all of which enjoy higher PE ratios. And it makes no sense that a dollar of Google earnings is worth 24% more than a buck of Apple profit. It all seems a sort of anti-magical thinking.

    The fact is that even if Apple falls to earth with slower growth and no new blockbuster products, its stock should reasonably fetch more than it does. But Apple’s PE ratio has been flat for about a year and was falling before that, so this isn’t a prediction that the price will go up anytime soon either.

    (Disclosure: I do not directly own any Apple stock, though funds I invest in may.)

     

    Do Investors Truly Believe in Apple?

    Image: Fool.com
    I am not a financial analyst and I don’t do the kind of analysis solely to be used for making short or long term investment calls. I have provided analysis for some financial institutions as a part of their internal analysis but my role as an industry analyst is to study markets, trends, and the industry at large. So I plan on tackling this issue of Apple’s stock fluctuations, and most importantly Wall Streets somewhat hesitant stance toward Apple, from an industry analyst perspective not a financial analyst perspective–since I am not the latter.

    Apple’s stock is where it is today because Apple has continued to post quarter after quarter revenue and profit growth. Apple has done this primarily on the back of key fundamentals like vertical integration, their ecosystem, attention to design and user experience, solutions based thinking, and a focus on satisfying customers rather than Wall St. just to name a few. Although Apple’s stock has been relatively consistent on its upward trend there are still interesting fluctuations despite their unchallenged dominance in many product segments over the past 10 years. I know many firms who are bullish on Apple. Yet there seem to always be folks who are hesitant to embrace Apple as a long term growth stock and the question is why?

    Too Good to Be True

    There is a theory I have heard a number of times that there is a belief that Apple’s growth trend is too good to be true. I suspect that there is some truth to this and that there are investment firms out there with this belief. I believe this is an incorrect perspective, but if the too good to true belief is out there we must be aware of it.

    Financial investment firms are in the business of not just predicting what the long term stock potential is but also what other firms may do. If investors, regardless of their long term trust in Apple’s stock, know there are those who may sell shares if there is a hint of bad news, then they have to be ready for a potential sell off. Investors often have to bet with or against the market and the key is to know which and when.

    So if the too good to be true theory is partially to blame then it has to be taken into consideration by a firm if they are to make an educated guess on when to bet with or against the market.

    Even though the too good to be true theory is wrong in my view, there are bound to be some who cling to it regardless of the facts. However, I feel the root of some hesitancy about Apple’s long term stock is rooted in something deeper.

    History is Not on Apple’s Side

    I tend to believe that the main thinking affecting investors with a negative sentiment in Apple’s long term future is one of historical perspective. Apple with their closed and vertical model lost to the more open model of Microsoft long ago. So the conventional thinking would be that both Google or Microsoft with their more open platform approach will again rise to dominance if history does repeat itself. There are, however, several things I believe are wrong with the thinking that history will repeat itself.

    To see the first error all we need to do is observe many recent events. If the conventional wisdom is that open always wins then those open platform players just committed suicide. Microsoft with Surface and to some degree Google with the Nexus program, but more specifically what they may do with Motorola, are both a step in the vertical direction. In fact if you read between the lines from statements from both Microsoft and Google around the importance of tightly integrated hardware with software, then you will observe that those statements are in fact a validation that Apple’s vertical model is not only the right way forward but the superior way forward.

    The other flaw in focusing only on historical perspective is that it does not take into account that the market has changed drastically. Specifically, the market for personal computers has matured. To use historical perspective to compare an immature market with a mature market is nearly impossible. The buying psychology of customers in a mature market vs an immature market are fundamentally different.

    In fact I would argue that for most of the time when Microsoft dominated the industry, the mass market consumers were not the main purchasers of computers but rather corporations and institutions were. Therefore in the 90s specifically, corporate IT were the customers where in todays markets end consumers are the customers and they buy fundamentally differently than IT historically has.

    The market is also significantly larger than when Microsoft was dominant. Nearly every person on the planet will someday be a candidate for a personal computer of some kind. Which means that there is still a tremendous amount of growth ahead of us and my conviction is that Apple is in this for the long haul.

    For these reasons, it is impossible to use historical perspective or the argument that history is not on Apple’s side as a reason to be bearish.

    Where Do We Go From Here?

    The biggest question in my mind, which needs further analysis and thought is whether or not there can be more than one leader in the industry at a time. It is clear that right now Apple is setting the trends and to a degree dictating where we are headed with personal computing.

    When a market is maturing or even in the process of becoming post mature there tends to be a leader responsible for standardizing a solution. But in mature markets of other industries like packaged goods, consumer electronics, automobiles, etc., we don’t typically identify a clear leader, rather each company charts out a course and stays with it.

    Of course the market for personal computers may be very difficult to compare with other mature markets but if we were to find one that is closest I would say it is automobiles. I don’t have an answer, or a fully formed opinion as to whether the personal computing industry can have multiple leaders but I am sure that topic will make for good discussion.

    If we can make the case that there can only be one, or at the least very few, leading a segment then I believe we can confidently make a strong case that two decades of leadership–or more– is not out of Apple’s grasp. This and the fact that there is so much headroom for growth in personal computers globally.

    When you add market growth potential, with Apple’s fundamentals, the vertical trend, and their constant success in customer satisfaction, it is my opinion that it is hard to bet against them.

    Why is Microsoft’s Surface obsessed with Keyboards?

    IS THE KEYBOARD THE KEY TO THE SURFACE?

    On June 18, 2012, Microsoft announced it’s new Surface Tablet. There are many questions swirling around the Surface, but one the more subtle, yet more important, questions is why Microsoft is so obsessed with the Surface’s add-on Keyboard.

    Microsoft devoted a large portion of their Surface keynote to the keyboard. The word “keyboard” was used dozens of times during the 45 minute presentation. Further, the Surface is never depicted without the keyboard and, in fact, the keyboard is always prominently highlighted whenever the Surface is displayed.

    The emphasis on the add-on keyboard did not escape the attention of the press either. Some sample headlines tell the tale:

    – Microsoft’s Surface: when the keyboard is key
    – Microsoft Surface Keyboard Is Here
    – Microsoft Surface Takes On iPad With Secret Weapon: The Keyboard
    – Microsoft’s Surface Tablet Brings The Keyboard Back
    – Microsoft takes on tablets with keyboard-equipped Surface
    – Microsoft’s Surface tablet: The keyboard is the key

    MY KINGDOM FOR A KEYBOARD

    As if all that wasn’t enough, Microsoft founder, Bill Gates, recently had this to say about computers in the classroom:

    Just giving people devices has a really horrible track record. You really have to change the curriculum and the teacher. And it’s never going to work on a device where you don’t have a keyboard-type input. Students aren’t there just to read things. They’re actually supposed to be able to write and communicate. And so it’s going to be more in the PC realm—it’s going to be a low-cost PC that lets them be highly interactive. – Bill Gates

    (Emphasis Added)

    Dear Microsoft, Steve Balmer and Bill Gates: What is up with your obsession with keyboards?

    A NICETY, NOT A NECESSITY

    First of all, let me say that I’m a touch typist and I simply love my notebook’s physical keyboard. Adore it. I even named my first child, Qwerty, after a keyboard. (She still hasn’t forgiven me.) But do I think that keyboards are essential for computing? Heck no. Let’s not get carried away.

    Do you remember (seems like only yesterday – because it WAS only yesterday) when the only way to text on a phone was to use the numeric keypad? The number “1” meant “a”, and pushing the “1” twice meant “b”, and so on and so forth? Painfully tedious.

    Yet I saw kids typing faster on their phone’s numeric keypads than I could type on my computer’s keyboard. And if you don’t think that kids can type faster on a virtual tablet keyboard than most adults can type on a physical keyboard, it’s only because you aren’t paying attention.

    Keyboards are a nicety, not a necessity. If you own a tablet and you find that you need to type faster, you switch to an attachable keyboard – you don’t switch to an entirely new operating system.

    THIS ALL HAS A FAMILIAR RING TO IT – A PHONE RING

    All of this “keyboards are essential” talk has a familiar ring to it. Let’s see, now where have I heard it before?

    Oh yeah, it was in 2007 when the iPhone was introduced. The iPhone didn’t have a physical keyboard either. Let’s step into the Wayback machine and see what tech luminaries have had to say over the years about the iPhone’s lack of a keyboard.

    RESEARCH IN MOTION

    First up, Research in Motion (RIM) co-founders Jim Balsillie and Mike Lazaridis

    “As nice as the Apple iPhone is, it poses a real challenge to its users. Try typing a web key on a touchscreen on an Apple iPhone, that’s a real challenge. You cannot see what you type”
    Jim Balsillie, Co-CEO, Research in Motion, 7 November 2007

    “Not everyone can type on a piece of glass. Every laptop and virtually every other phone has a tactile keyboard. I think our design gives us an advantage.” – Mike Lazaridis, Co-CEO, Research In Motion, 4 June 2008

    Say, how’s that whole keyboard advantage thing working out for you fellas, anyways? What’s that you say? The keyboard’s gone. And you’re gone. And what’s happening to RIM is a dog gone shame?

    DROID

    Well, surely Android got it right with the Droid. Let’s take a look at one of their earliest commercials:

    iDon’t have a real keyboard.
    iDon’t run simultaneous apps.
    iDon’t take 5-megapixel pictures.
    iDon’t allow open development.
    iDon’t customize.
    iDon’t run widgets.
    iDon’t have interchangeable batteries.
    Everything iDon’t…Droid does.

    Verizon, 18 October 2009

    And how many prominently promoted Droid devices are still sold with keyboards? (crickets) Hmm, maybe iDon’t need a “real” keyboard on my phone after all.

    DEJA VU ALL OVER AGAIN

    But, of course, I’ve saved the very best for last:

    “$500 fully subsidized with a plan! I said that is the most expensive phone in the world and it doesn’t appeal to business customers because it doesn’t have a keyboard, which makes it not a very good email machine …. I like our strategy. I like it a lot….” – Steve Ballmer, Microsoft CEO, 17 January 2007

    Now, is that the very same Steve Ballmer who just introduced us to the Surface…with an attachable keyboard? Not to rub it in, Mr. Ballmer, but your strategy of relying upon the importance of a physical keyboard was wrong…and not just a little.

    This week marks the fifth anniversary of the iPhone. The iPhone now generates nearly $25 billion in revenue per quarter or over $100 billion per year. And – are you ready for this – the iPhone, all by itself, is bigger than ALL of Microsoft. That’s right, one single product, that didn’t exist five years ago, is now bigger than Microsoft…

    …and it doesn’t even have a keyboard.

    JUST SCRATCHING THE SURFACE (Pun Intended)

    To be fair, Microsoft’s obsession with keyboards may merely be a single symptom in an even larger problem. The Surface is, perhaps, a bit too aptly named. With a keyboard and a kickstand and an upturned rear-facing camera, it’s very clear that Microsoft intends the Surface to work best of all on…well…on a suface. A flat surface, to be precise

    But tablets want to be held, not held down. Tablets want to be touched, tablets want to be moved, tablets want to be “free”.

    A WORD OF ADVICE

    Microsoft, in 2007 you thought that keyboards were essential. Here it is, 2012, and you appear to be making the very same mistake all over again. A word of advice. A keyboard is a peripheral device, not the principal device. Focus on what matters or soon nothing else will matter at all.

    Android’s 7-Inch Tablet Future

    It wasn’t a secret that Google was going to announce a 7-inch Nexus tablet made by Asus and running Nvidia’s Tegra 3 chipset. And announce it Google did yesterday to much applause and fan fare. As we and a great many anticipated the tablet is designed as pure media tablet rather than a general purpose tablet like the iPad. As we watched the demo it became clear the Nexus 7 is targeted right at the Kindle Fire and nothing else.

    I have been thinking a lot about what Android’s future in tablets may hold and I believe we now have the answer. Android’s sweet spot for tablets may be 7-inch pure media and entertainment slates. These devices will be built and optimized specifically with entertainment not productivity in mind. They will also be very low cost and derive a significant amount of value from cloud services. This also fits right in line with Google branding their store “Play.”

    This makes sense if you think about the fact that the most successful Android tablet to date, the Kindle Fire, is a 7-inch pure media tablet. With the iPad, and now on the eve of Windows 8 tablets all targeting the 9.7 to 10.1 tablet screen sizes with more general purpose tablet strategies, I anticipate the larger screen Android tablets to struggle.

    Android has struggled as a tablet solution in the general purpose segment due to the immature nature of Google’s tablet ecosystem. Apple remains dominant in this area and it seems like many firms strategies are to avoid competing with Apple entirely. This is clearly the direction Google is taking with the Nexus 7.

    With that context I want to point out two areas important for this segment. One that favors Amazon and one that favors the Nexus 7.

    Cloud Services and Consumer Trust
    The Kindle Fire commerce ecosystem both in terms of digital media and consumers trust in Amazon as a commerce vendor are key areas where Amazon has an advantage of the Google right now. Amazon has over 100 million credit cards of consumers on file who all trust Amazon as a vendor. I don’t believe Google has released how many accounts they hold but I guarantee you it isn’t nearly as many as Amazon, or Apple for that matter.

    Amazon has a more mature ecosystem when it comes to digital media and consumer trust for commerce. This is an area Google is attempting to strengthen with the Nexus 7. During the announcement of the Nexus 7 the statement kept being made that the device was built for the Google Play store. Google is clearly hoping that this device will generate more trust for their commerce platform and strengthen their commerce ecosystem.

    Retail
    This is an area where Google 7″ tablets may have an advantage over the Kindle Fire. Google has not yet stated when or if the Nexus 7 will ever appear in retail but you know other OEM will come out with 7″ media tablets who will get them in retail.

    Retailers have been understandably conscience of Amazon’s commerce strategy with the Fire being potentially disruptive to their own brick and mortar store strategy. If that trend continues you can imagine more retailers not carrying the Kindle Fire and filling that hole with other OEMs Android 7″ media tablets.

    To the extent that retail will be important for this segment the advantage goes to Google in this area.

    I am not sure the extent the tablet market is ready to segment into specialty tablets but if they keep their prices low and overall time investment low then I think they have a chance to become companion media devices.

    Of course if Apple jumps into this segment with a 7″ tablet I will have to re-consider some positions I am taking currently. However, if Apple does this it will only validate the 7″ media tablet segment at which point I would expect OEM investments in the category to ramp extremely quickly.

    Surface vs. UltraBooks

    Last week I pointed out the competitive dilemma for OEMs when it comes to Surface. A key point in my mind is how tablets are becoming the next generation computers for the mass market. What I pointed out in my column about notebooks becoming history is that the notebook will remain relevant but it will do so for only a segment of the market rather than the market as a whole, which has historically been the case.

    When we started doing consumer research with the late adopters (anyone not an early adopter) we started realizing that for a large majority of consumers a notebook was overkill with respect to what they did with the product on a daily basis. We discovered that many consumers purchased notebooks due to their convenience around portability more than anything else. It is this fundamental point which leads me to be convinced of the tablet form factor. This is also why the tablet + desktop solution becomes even more interesting.

    Further Reading: Notebooks are the Past, Tablets are the Future

    With that context in mind, I am beginning to wonder if Microsoft launching their own line of tablets hurts the OEMs in a much more important area than just competing with them –namely with their notebook products. If this industry is headed in the direction I think then more interest may be given to Surface like products, by the masses, than notebooks in 2013 particularly. I am wondering if by launching Surface Microsoft has not just potentially hurt interest in their partners notebooks over the short term.

    If what we write here on our site as well as feedback I have received from many media outlets is an indication of market interest, then what I am proposing would be on track. Our content on tablets and recently Surface far exceeds the amount of reads than we write about notebooks and UltraBooks in particular. I have heard similar things from other media that tablet content does better than notebook content in terms of interest.

    Intel is trying to inject life into the notebook category with their UltraBook campaign and Microsoft has just injected life into tablets built for Windows 8. Surface’s form factor is different enough from what most consumers are used to with a notebook that I believe there will be serious consideration for it by anyone who is in the market for Windows notebook. Time will tell how many will buy surface but I believe it matches up with enough trends we are seeing to at least generate interest.

    However, if there is enough interest, Surface may very well impact notebook sales for Microsoft partners which will hurt OEMs more in the short term than Microsoft competing with them in a segment. In this case Surface is more disruptive to OEMs notebook strategy than their tablet strategy.

    Of course another scenario could be that Surface plays the spoiler for both Win 8 tablets and Windows notebook. It may be that the wide array of differences in the Windows 8 ecosystem may be confusing for customers who then turn and consider the Apple ecosystem. In fact 2013 will be a very interesting year because the feedback we are getting from both tablet and notebook intenders will heavily evaluate both ecosystems before making a decision. Consumers will choose with their wallet and perhaps more importantly with their loyalty and it will make 2013 and fascinating year.

    Why I Love Twitter

    I don’t expect everyone to love twitter. In fact I anticipate that many have mixed feelings about the service. Twitter is one of those things that I believe works great for some people but not everyone. And in a world of consumer choice that is perfectly fine. I would not expect a piece of technology, service, product, etc., to become universal.

    I, however, particularly love the service. It works for me within the context of my career as well as how I prefer to consume information. I don’t think my appreciation of the service hit me until it went down for nearly two hours this past week. Twitter has become my source for real time information about a range of different things. I follow sports writers of my favorite teams for real time updates about games. I follow certain news outlets for updates on the news in real time. I follow a range of technology industry colleagues and journalists for real time updates on the technology landscape.

    This point of real time information became clear when Twitter went down. Since Twitter is where I get all my real time information, my first instinct when I couldn’t access Twitter was to try and go to my Twitter feed to see if it was down. I eventually had to actually go visit a technology blog in order to confirm if Twitter was down. Twitter is my source for information to as close to real time as I can imagine.

    Before I was a heavy Twitter user, which only happened in the last year, I used to frequent the home pages of all the big tech blogs several times a day at a minimum. This process for me was how I tried to stay up to date with the most recent pulse of the tech industry and other related news. But most technology blogs and news websites contain way more information than I am interested in and I found that I wasted quite a bit of time trying to find information that was useful to me. This is where Twitter comes in.

    Twitter has become for me my curated information filter between me and the world wide web. I have carefully selected who I follow and built specific lists in order to make sure I am only presented with information from sources I trust or find the most beneficial. Twitter is acting as my aggregator for the information I have chosen is the most important for me. When I end up going to a website it is always the individual article promoted by a source I trust from Twitter. I rarely go to news sites home pages any more and I am quite pleased by this. In fact I have learned most of the major breaking news from the past six month’s via Twitter.

    Of course I still use the web for a range of different things but when it comes to news, especially related to tech, Twitter is the door between me and their websites. I am sure this is true for a wide variety of folks and perhaps even readers of this article. Maybe you were referred to from a tweet or a retweet of a trusted source. Perhaps you came from another source of curated content. Either way it is more likely you got to our site and this article from another means than the homepage.

    When Twitter is used this way it can be quite a useful tool for saving time. I don’t find myself needing to frequent blogs or news sites home pages in order to get caught up with what is happening in my industry. As long as I have checked Twitter in the past few hours I am completely caught up. Checking Twitter takes a matter of minutes to catch up where going to four or more blogs or news sites could take upwards of ten minutes to accomplish the same thing.

    I am not sure what this means long term for the news media websites if Twitter is one of many useful aggregators to come. On this point we came across an internal research report that had caught wind of groups of Twitter users only using the service to consume useful media not to actually tweet anything. I don’t have enough data to proclaim that a trend yet but in light of my point it is an interesting development.

    All of this brings up an interesting question to Twitter’s long term business model. After the outage I become convinced that I would pay a fee to use Twitter due to the value it brings to me in my daily work flow. Maybe I would pay just to keep it ad free but if it was a matter of not having it or paying to have it, I would choose to pay for it every time.

    Maybe Twitter will add more value to their service for people like me and charge for premium features. Maybe they won’t and will keep the whole service free but allow ads, however, I hope this is not the route they choose.

    Whatever the case of a business model, Twitter has become embedded into my work flow. I find Twitter as a valuable resource for curated information. Twitter may not be for everyone but it definitely is for me.

    Usefulness Is the Greatest Feature of All

    “The simplest way to achieve simplicity is through thoughtful reduction.”

    “Simplicity is about subtracting the obvious and adding the meaningful.”

    – John Maeda from his book The Laws of Simplicity: Design, Technology, Business, Life

    Years back Palm had a slogan I liked quite a bit. It was a slogan but also a vision statement for the kinds of products they wanted to make. The slogan was simple, elegant, and truly useful. A few months back I wrote a column on how Apple turns technology into art. I dove into some of the psychology behind creating objects of desire and how things that are beautiful are more often than not useful.

    On Wednesday our latest team member John Kirk, wrote a terrific column contrasting the philosophically different approaches that both Apple and Microsoft are taking with tablets. The key message from John’s column was that simplicity is king. I tend to agree but I would add that what we perceive as simple is actually being perceived as useful.

    I remember the first time I got my wife to switch to the iPhone. She is the first to tell you that she is not tech savvy, in fact she hates most technology especially printers. She has never been much interested in computers mostly because she wasn’t comfortable on them–yes even Macs. But the first time she used the iPhone, and started really using it, I remember vividly that she never said it was simple, rather she kept proclaiming how useful it was.

    Technology at its best is packaged up and designed to be useful to its owner. What is useful may very well differ between segments. For example those who like to tinker and control more of the technology the own may define usefulness differently than someone who is not a power user and finds technology generally scary or unapproachable. For some more is more and for others less is more. This is fine and to each his own, however, I would contend that there are more humans out there who prefer simplicity over complexity.

    Creating something complex is easier than creating something simple. Simple solutions require sophisticated technologies. However, to create something simple I don’t believe you start with the goal of simplicity. To create something simple you need to focus on creating something useful. Simplicity leads to usefulness, and as I stated in the beginning, usefulness is the greatest feature of all.

    Consumers aren’t turned on to technology products because they are simple. They are more interested in them being useful.

    The Surface and the iPad

    I have ridiculed companies like Samsung for simply copying Apple’s tablet strategy and for not showing any vision, so I’ll give Microsoft credit for at least coming out with some new ideas with the Microsoft Surface. However, I’m not sure it will work for them.

    Microsoft has been in the tablet business for a long time with its partners and it has failed miserably. The company has tried to convince consumers that a tablet needed to be like a PC, but consumers didn’t buy it.

    Apple on the other hand drew a line between the traditional laptop and tablet. The iPad is a touch device and apps are made so you can interact with it using your fingers and gestures. Apple contends that there is no need for a mouse with a tablet because your finger is the pointing instrument.

    Just because Apple says this is the way it should, doesn’t mean it’s the law. However, consumers have clearly spoken by purchasing millions of iPads. The iPad is the type of device that people see fitting into their lifestyle.

    From what I’ve seen, it seems to me that Microsoft is trying to do a similar type of dance with the Surface that it did with previous tablets. The company is trying to convince consumers that this device can be a computer and a tablet at the same time. Based on the sales of the iPad, I’m not sure that’s what consumers really want.

    I’ve seen people argue that Windows now has the largest app library by default because you can use all of your Windows apps on the Surface. I don’t see that as a good thing.

    Apps made for a desktop or laptop are not designed to work on a touch-enabled device. That just makes sense. Interacting with those apps on a tablet will be cumbersome and frustrating for users. I think that’s a given.

    Of course, you always have the Surface’s stylus, but then you seem to be getting away from a touch-enabled device and going back to devices that were around years ago. That’s not a step forward in the industry, although it still may be for Microsoft.

    It’s well known that Steve Jobs hated the stylus. He told Walter Isaacson about a Microsoft engineer who kept talking about a tablet years ago.

    “But he was doing the device all wrong. It had a stylus. As soon as you have a stylus, you’re dead,” said Jobs.

    I’m certainly not saying that Microsoft’s tablet offering is dead in the water — it’s much too early for that. But unlike some in the mainstream media, I’m definitely not ready to proclaim the Surface will overtake the iPad either.

    There is still a lot we don’t know about the Surface because Microsoft wasn’t exactly forthcoming with details, so for now we play the waiting game.

    Microsoft Surface and the OEM Dilemma

    On Tuesday Patrick pointed out that the dynamic between OEMs and Microsoft may be forever changed. The primary reason for this being that Microsoft has signaled intent to compete directly with their partners in the tablet PC arena. What I want to examine in this article are the major points of concern from an OEM (Microsoft partner and original equipment manufacturer) perspective.

    Trust
    The Microsoft partner dynamic is one that has historically been based on trust. The company providing the main software layer, in this case Microsoft with Windows, needs to be closely working with the company making the hardware which will run said software, in order to assure some level of quality assurance and user experience. Of course this has not always been done well but it is none the less the goal. Because of this reality both Microsoft and hardware partners need to be in communication very early in the hardware process.

    In many cases OEMs share specific details of their hardware roadmap with Microsoft. If Microsoft intends to be a competitor then any hardware OEM will have to think twice about how much roadmap and hardware detail around tablets they share with Microsoft. In this scenario there is a significant risk that the software and hardware are not tightly integrated (and it should now be obvious how important that is) thus resulting in poor user experience and a poor reflection in the market for all companies involved.

    Tablets are the Future
    Many of the authors in our forum here at Tech.pinions are proponents of the critical role that tablets play in the future of computing. This is an incredibly important category and arguably more important to the future of computing than the notebook category. With that in mind, and depending on your opinion on the matter, Microsoft is getting into the game in one of the most important segments going forward.

    I can entirely see Microsoft’s reasoning for this move and honestly, based on my convictions on where this industry is going, if I worked at Microsoft I would heavily advocate this direction . They simply can not afford to sit back and watch the iPad completely destroy any competing tablet. Microsoft is a platform company and is responsible for an ecosystem. Every customer that enters Apple’s ecosystem, whether that entry point is an iPad, iPhone, Mac, etc., is potentially a customer who will not be leaving Apple’s ecosystem any time soon–if ever.

    In reality, Microsoft partners are likely to be more focused on notebooks in the short term than tablets. Which means there is a possibility that Windows 8 would have lost more time in the tablet space. So it makes sense that Microsoft felt the need to make sure a compelling product was available at launch. However, the tablet segment is one that OEM’s need to focus more on, perhaps more than notebooks, and can not afford to not have a compelling play themselves. My concern if I am an OEM is that Microsoft intends to compete with me in one of the most important categories going forward.

    The challenge will whether or not Microsoft can walk a line that few have tried. In this case be vertical in a segment but also be open in the same segment and others.

    Brand
    Lastly, and this point could prove the most costly for the Windows ecosystem. Microsoft will have Surface, other brands will have what? Slates? Tablets? or perhaps some other new name they come up. So if I am a customer shopping for a Windows 8 based tablet, I need to learn, study, then decide between Surface, Slates, Tablets, or any other number of names and tablet brands. All with different looks, feels, ports, CPUs, versions of an OS, keyboard accessories, general accessories, capabilities, etc.

    Contrast that with Apple. If I want a tablet in Apple’s ecosystem, right now my options are the iPad (2 or current). Yes with minor different configurations but my point is the brand. The iPad is Apple’s tablet, now choose which iPad you want. The environment around Windows 8 tablets is going to be much more confusing.

    The tablet sector is one that is maturing. Consumers, who have not yet owned a tablet, are interested in what a tablet means to them and how it fits in their life. I would argue that right now consumers don’t know what they want in a tablet. Therefore if they are presented with too many choices which confuse and frustrate them how can they feel comfortable making an informed opinion. Take USB for example. A consumer looks at this option and says I have USB in my notebook. Why do I need it in my tablet. Maybe they do and maybe they don’t but having not owned a tablet yet how do they know? This is one small observation of the overall consumer adoption cycle and how it works. This is also generally why a market like this favors the market leader and in this case the iPad. Once a market segments the door opens for specific feature differentiation. The market for tablets has not yet segmented.

    I firmly believe that any platform or ecosystem that offers confusing choice to consumers around tablets is going to have an uphill battle.

    Of course one possible way Microsoft can maneuver in light of everything I have pointed out is to let Surface be a general brand and product strategy that others OEMs can participate in. I suggested this on Tuesday when I stated that Microsoft should let other OEMs participate in the Surface program. Time will tell what path they take.

    Regardless one last point on hardware needs to made with respect to open platforms like Windows, Android, etc. Hardware only exists as a gateway to a software and service ecosystem. Thus a platform like Windows creates platform loyalty but it does not create hardware loyalty. Therefore, those who compete only in hardware will have to do so with every upgrade cycle. This means for Microsoft its a win-win for their platform either with their hardware or others. If this plays out how I think it might, I can’t say it’s a win-win for OEMs.

    The Apple iPad Tablet vs. the Microsoft Surface Anti-Tablet

    Last night, Microsoft introduced us to the their Microsoft branded Surface Tablet. Never have we seen such a clear line of demarcation between Apple’s and Microsoft’s visions of what a tablet should be. And at the end of the day, it is those differences in outlook that will determine the fate of each company’s respective tablet offerings.

    Historical Background

    For ten long years Microsoft tried to get us to use their desktop operating system on a tablet device. What we really wanted, they told us, was the brain of a desktop in the body of a tablet. Didn’t work.

    In 2007, Apple introduced us to the first modern tablet to use touch – and only touch – as the user input. They called it the iPhone. Three years later, Apple introduced us to the iPad, and while the tech world sat on its collective hands, Apple proved that size really does matter – at least when it come to tablets.

    Microsoft’s Tablet Vision

    Now here we are just over two years later and what is Microsoft telling us with the introduction of the Surface Tablet? They’re telling us that what we really want is a keyboard so that our tablet can be used more like a notebook computer. What we really want is a pen so that our tablet can be used like a PDA. What we really want is a kickstand so that our tablet can stand more like a notebook computer. What we really want is a trackpad so our tablet can BE a notebook computer. (A trackpad on a tablet computer? Really? Just think about how redundant that is.)

    The Microsoft Surface is not a touch tablet, it’s the ANTI-touch tablet. While Apple is doing everything in its power to embrace touch on the tablet, Microsoft is doing everything in its power to negate the influence of touch on the tablet. Microsoft is saying: “Sure, touch is nice, in a pinch, but what you really wanted all along is a tablet that runs like a notebook.” With the Surface, Microsoft has come full circle, back to where their tablet efforts began. But they’ve added a twist. Not only did they put the brain of a notebook in the body of a tablet but they made the tablet look and act like a notebook too.

    The Lure of Everything and the Best of Both Worlds

    “But wait,” you say. “Microsoft is not giving us the anti-tablet. They’re giving us a tablet AND a notebook. They’re giving us both. They’re giving us the best of both worlds.”

    It’s a compelling argument. Why not do both? Why not have both a desktop and a touch OS on a tablet? Why not add a pen? Why not add a keyboard? Choice is good. Why not let the customer choose to use the device the way they see fit? Why not have it all?

    Before we answer that question, ask yourself this one: Do you think for even one second that Apple – who had a two year head start on Microsoft – could not have added a kickstand, added an integrated pen or added an integrated keyboard to the iPad? Apple did not neglect to do those things…they CHOSE not to do those things. Why?

    Focus and Simplicity.

    “That’s been one of my mantras — focus and simplicity. Simple can be harder than complex: You have to work hard to get your thinking clean to make it simple. But it’s worth it in the end because once you get there, you can move mountains.”-Steve Jobs

    One of Steve Jobs’ greatest talents was as an editor, selecting what not to include in a product. Think of all the products that have way too many features. Now think about the iPod. The iPhone. The iPad.

    “…the result of that focus is going to be some really great products where the total is much greater than the sum of the parts.”-Steve Jobs

    Every iPod killer, iPhone killer and iPad killer had one thing in common – they all had more features than did their Apple counterparts. Yet they all had less success. How could this be? Simply put, simplicity may be the greatest feature of all.

    “Simplicity is the ultimate sophistication.”-Steve Jobs quoting Leonardo da Vinci

    Apple realized – long before anyone else did – that touch was the key to tablet computing. Styluses and keyboards are useful, but they pull the tablet away from its essence. They’re to be used, if required, to supplement, not sustain, the tablet.

    “People think focus means saying yes to the thing you’ve got to focus on. But that’s not what it means at all. It means saying no to the hundred other good ideas…”-Steve Jobs

    Diverging Philosophies

    Now, more than ever, we can see how differently Apple and Microsoft view tablets. Apple thinks less is more. Microsoft thinks more is more. Apple thinks “both” is the enemy of focus. Microsoft thinks “both” is the best of all worlds. Apple thinks that simplicity is the key to everything. Microsoft thinks that having everything is the key to success.

    Apple’s philosophy is clear. The iPad is a touch device. It excels at doing the things that tablets are excellent at doing. If you want the benefits of a computer, buy a computer. Preferably one of ours.

    “…we have a vision for the tablet. It’s a tablet that works and plays the way you want to. A tablet that’s a great PC. A PC that’s a great tablet. Surface.”-Steven Sinofsky, introducing the Windows Surface Tablet

    Microsoft’s philosophy is also clear. The tablet is a PC. The PC is a tablet. If you want a PC that functions as a tablet, buy the Surface. If you want a tablet that functions as a PC, buy a Surface. Heck, we’ll make this easy for you to understand: Buy a Surface.

    There Can Be Only One

    To paraphrase that great philosopher, Sesame Street:

    One of these things is not like the other,
    One of these things just doesn’t belong,
    Can you tell which of these won’t work like the others
    Which is right and which is wrong?

    Was Steve Jobs and Apple right about the what’s important in a tablet or will Steve Balmer and Microsoft’s vision prove to be the more perceptive of the two?

    I’ll tell you this much – we’re about to find out.

    Microsoft Surface Reveals the Cost of HP’s webOS Folly

    HP's TouchPadWith Microsoft’s planned launch of the Surface tablet, the full cost of Hewlett-Packard’s grotestque mishandling of the purchase and abandonment of Palm’s webOS has become clear.  HP’s Personal Systems Group now finds itself in the worst of all possible worlds, facing competition from its most important supplier in what should be its hottest market.

    HP’s purchase of Palm in early 2010 was a strategic move by PSG chief Todd Bradley and then CEO Mark Hurd both to move HP into the increasingly important smartphone market and to win a measure of independence from Microsoft. The key was webOS, a rough-edged but highly promising operating system.

    HP’s plans for webOS were ambitious. A tablet, the TouchPad, was added to Palm’s planned lineup of new phones and a version of webOS was being developed to run on top of Windows to create an HP webOS ecosystem across a wide variety of devices.

    Alas, the whole project was caught up in HP’s boardroom melodrama. Mark Hurd was replaced by Léo Apoteker, who had little love for PSG in general or webOS in particular. The TouchPad was rushed to market before it was ready and sold poorly. Barely two months after the TouchPad’s launch, Apoteker killed the entire webOS effort, leaving HP with nothing but a huge writedown for development costs and inventory.

    Although the replacement of Apoteker by Meg Whitman spared PSG from possible spin-out or sale, it hasn’t solved its fundamental problem. It’s the dominant player in a PC business that is barely profitable and seems doomed to continue its slow shrinkage. It’s not a player in smartphones and by the time it enters the tablet market, if indeed it still plans to, it will be competing directly with Microsoft-branded products.

    It is becoming painfully clear that the future of personal computing belongs to those who control integrated platforms: Apple, Microsoft, and maybe Google. It’s impossible to say where the webOS vision would have taken HP had it been given the investment and time it needed for success. But it is all too clear where its failure has left the company.

    HP is a stool with three rickety legs. Personal computers produce neither growth nor a lot of profit. The cash cow of imaging and printing also faces a long, slow decline. And the enterprise business—servers, software, and services—is heavily dependent on partners such as Intel, Microsoft, and, on a good day, Oracle.

    The cost of the webOS misadventure was far less than the $10.3 billion HP for analytics software maker Autonomy, an Apoteker acquisition on which the jury is still out. But the price of the failure may end up being far higher: The loss of HP’s ability to shape its own destiny.

     

    Microsoft Should License Surface Technology and Brand to Partners

    Microsoft’s Surface PCs are yet to hit the market so it may sound odd for me to propose what I am about to propose. However, the potential impact of a Microsoft branded tablet for their partners is significant if Microsoft is actually choosing to compete with them. I tend to believe Microsoft may be challenging them and in the process creating some useful and innovative solutions designed to help their partners not compete with them.

    Surface PC is being positioned as a new family of computers. There is some truth to that and there isn’t at the same time. This is a class of computer some call convertibles but we refer to them as Hybrids. We have written many articles about this form factor and why we think it is interesting. The key takeaway is that to truly engage in productivity tasks a keyboard is a necessary accessory and we already see demand in professionals and many consumers to use a keyboard with their iPad.

    The demand is there and Microsoft believes Windows 8 is uniquely positioned to meet the needs of the customer who wants true tablet and true notebook functionality in the same device–and they may be right. I say that because if there is a sweet spot in the market for a product like Surface, Microsoft is the only one merging touch and mouse / keyboard computing to a single OS. Microsoft may not have been the first to create a product like this but they may be the first ones who make it work.

    With all of this context I believe the smartest thing Microsoft can do is license the Surface Brand and many of their hardware innovations like the Touch Cover, Type Cover, Vapor MG, Digital Ink, etc., to any hardware partners who wants to make a Windows 8 Tablet. 


    In this scenario Surface could be to Microsoft what UltraBooks are to Intel. Microsoft can influence the specifics of the hardware and provide them with the tools to create Surface PCs. Microsoft could still sell keyboard accessories or perhaps others they come up as well, which is a model they are already successful with.

    This path would also allow Microsoft to build the Surface brand and keep all Windows 8 tablets under the same brand. This is a good positioning strategy so consumers are not confused when they see an OEM tablet which is not a surface computer but is similar. Given the youthfulness of the tablet category, and the challenge of a horizontal platform while a market is maturing, the less confusion in the market the better. Given what I have seen so far the best path forward is for every Windows 8 tablet to be a Surface PC whether it has the Microsoft brand on it or not. 

Lastly, this move would not put Microsoft in a position to compete with their partners but rather spur interest in a category that is beneficial to the Windows ecosystem. They can then let their hardware partners take it from there and come up with differentiators that fit the surface computing paradigm.

    This direction would require Microsoft to work much closer with their hardware partners going forward. Something I believe Microsoft should have been doing all along and yet they have not. This has led to quite a bit of frustration with some partners to which I have first hand knowledge of.

    From what I have seen so far there are enough interesting features to generate interest in Surface PCs. The bottom line is many professionals and some consumers are looking to unite a keyboard with a tablet. For those a Surface PC may be a viable option. However, we believe that even though the hardware is compelling, it will not change the fact that for Microsoft to be successful customers have to want more than the hardware, they have to want Windows 8.

    The challenge staring Microsoft in the face is convincing customers Windows 8 is a software platform worth their time, energy, and overall commitment.

    The bottom line is I am excited by what I saw. More importantly I am impressed that Microsoft did something bold and took a risk. Whether it works or not, this is the kind of thing they needed to do to stay relevant in the new era of personal computing.