Month: August 2011

Why iPhone Competitors Should Release Less Products

The Next Web asks an interesting question in this article titled “As Apple’s smartphone sales boom, should its rivals release fewer handsets?”

As I pointed out in my article “Why it matters that Apple is the number 1 smart phone maker,” Apple only needs one product each year to dominate the smart phone market. They are the only company that takes this approach. Every other smart phone manufacturer releases a plethora of handsets each year, many of them based on Android.

Arguably this massive amount of handset choice is one of the leading reasons Android has such a large market share. The interesting question TNW brings up is whether or not Apple’s strategy of one handset each year is a better strategy for each manufacturer.

For Apple they focus all their research, design, engineering, hardware, software, and services teams on just one product. The result is the single best selling handset year after year.

There are rumors that Apple may fragment the iPhone line and offer different priced options but for that we will have to wait and see. Even if Apple did that it would still be the iPhone brand.

The challenge Android has, which TNW brings up, is the Android brand – more specifically the Droid brand. This brand did wonders for Android in the very beginning as Motorola and Verizon spent millions of dollars marketing the Droid brand. Now however it is unclear to the end consumer what devices are “Droids” and which ones aren’t.

On top of the Droid brand we have manufacturers launching products with random names all the time. The Bionic, Sensation, Revoluion, Captivate, Status, Thrill, Photon, Triumph, and XPRT to name a few of the most recent. You have to be a gadget freak or gadget blogger to know what the difference between all those devices I just listed are and those are only half of the Android devices released since January of this year.

Putting yourself in the consumers shoes and trying to research and make a decision on which Android phone to buy could be daunting. I pointed out in a column I wrote for SlashGear earlier in the year that too much choice can be paralyzing for many consumers.

This is why the iPhone strategy has been so brilliant. It simplifies the decision making progress but is also arguably the best handset on the market as evidenced by huge sales. Apple’s less complicated product strategy and laser focus on making THE best handset is paying off.

The biggest benefit I can see for iPhone competitors to release less handsets each year would be that those competitors could pour more resources into fewer designs. The result I would assume would be better smart phones.

Personally I would love to see what a company like HTC, Motorola or Samsung could do if they poured all of their resources into one single device to try and take on the iPhone.

The problem is I don’t think they will do it.

Here’s to the NeXT 20 Years of the World Wide Web

Tim Berners-Lee's NeXT Computer

Saturday August 6th marked the 20 year anniversary of Tim Berners-Lee publishing the first website. Whether he knew all that the web would become or not he still had the foresight to start the W3C (World Wide Web Consortium) to ensure that standards drove compatability. If it wasn’t for the W3C I am not sure the web as we know it today would exist.

Internet standards have been one of the central forces that got us to where we are today and will be one of the central driving forces that will get us where will go tomorrow.

Interestingly enough Berners-Lee published the first website on the World Wide Web using a NeXT Computer. For those not familiar with history NeXT was the company Steve Jobs founded after his departure from Apple. That same NeXT computer that Berners-Lee used also became the worlds first web server.

I say I find that interesting because here we have yet again another Steve Jobs creation involved in a monumental moment in our industries history.

The World Wide Web has changed quite a bit in 20 years but I believe the web will change in the next five years more than it has in the last 20. Several things will drive this change and the first will be new advancements in semiconductors.

Silicon Advancements Will Lead the Way
We can track a great deal of technological progress to the microprocessor; it again will be at the heart of the next generation web.

At a fundamental level with each new process technology we are able to pack more transistors onto a single piece of silicon. This is key because the more transistors on a single chip the more that chip can do. The more that chip can do the more the hardware and software community can take advantage of its power and efficiency.

I’ve heard a great quote from time to time and it goes like this: “a software engineer will never tell you that we have enough microprocessing power.” Basically if we build it the software community will take advantage of it.

When I analyze the long term roadmaps from both X86 providers and the ARM community, I am convinced that not just local software like operating systems and applications but web software and web apps will all be transformed.

What we are seeing today from visual computing, speech and voice processing, graphics and media is still only scratching the surface. Next generation silicon is what will make next generation software possible.

Don’t Forget About Web Standards
Standards are the second thing that I believe will drive the future innovations of web software. The bottom line is HTML and JavaScript are some of the most, if not THE most, important programming languages for our future.

The comittee’s that drive these standards and the companies who help define them play a critical role in establishing the technical vision for the future of the web.

As I said near the beginning of this article that without the web standards we woudln’t have the web today. Had we not had standards the web, like many other technologies, would have fragmented and cross platform compatability may have never happened. Could you imagine if each company had their own version of the web and only their hardware could access their version of the Internet? That is why standards were key to the early web and will be key to the future web.

The Invisible Internet
Still today in the consciousness of many is the concept of getting ” on the Internet.” We are getting close to a world where the Internet is invisible but we are not quite there yet. Someday this consciousness about being “online” will dissappear and there will be no online or offline.

The Internet will be so deeply embedded into nearly everything that we will interact with it on any number of levels and we won’t even think about it. Crazy and somewhat scary to think about now but I believe it’s true.

We have a long way to go with a tremendous amount of innovation still ahead of us. I am also interested in which companies will be the leaders in bringing us the future web. To the point about NeXT being involved in the first web page, i’m willing to bet a Steve Jobs creation will be in the mix with the future web as well.

I for one am excited to see what the next 20 years has in store for the world. In closing I leave you with a great info graphic on the history of the World Wide Web.

Click here to see the full image.

Has the Economic Downturn Ended Mobile Advertising Before it Began?

Is Mobile Advertising Over Before it Began? One or Two Standouts Still in the Game

Unlike social media marketing, social advertising seems to be taking a big hit from the never-ending recession we find ourselves in as a nation.  I say this because it seems that the newest golden egg in advertising, Mobile, had hit a new low before it ever reached any kind of high. And if you look deeper, what it’s really indicative of is click based marketing overall.  It’s been interesting to watch mobile marketing come to life.  I worked in this space with Virgin Mobile several years ago; and at that point it was more of an evangelism exercise trying to educate major brands and media companies about what this was all about. Now it’s an evangelism to get them to stay the course and build an audience.

How does this all play out in the new digital age, if audiences and ROI aren’t born overnight? With 56% of Fortune 500 marketers dissatisfied with or simply not using click-based mobile advertising, it’s possible that only a few strong companies will be able to ride the wave, approach smaller marketing businesses, provide a good service at the right price, and hang in there until the economy turns.

One of the few standouts who seem to be weathering the storm and getting it right is Augme Technologies. Augme has created what they call the “AD LIFE™ Ad Network” to help marketers engage with their best consumers. Basically, by using sophisticated targeting options, Augme reaches 100+ million unique visitors (and 9+ billion impressions) each month. It’s the targeting that makes this unique and successful, with options that range from region to behavior to platform and device, as well as a huge array of demographic combinations.

If you follow the old-adage that the best customer is one you already have, then the mobile marketing industry should first be able to count on repeat business from established clients before creating a trajectory of higher profits.  In this case, it doesn’t look like that will happen, not at the present time anyway. But having an example of a company that’s navigating these new waters successfully does give some hope.

With Smartphones taking over the mobile industry at a phenomenal rate, the mobile advertising world should look like a wide open field of opportunity, but right now, the numbers just don’t support this.  A recent survey showed that although 93% of marketers would move further into mobile ad spending – 43% of that group cites a low return on investment as a block to continuing with the platform.

Another statistic worth mentioning is that the most effective mobile ad campaigns were email based, where consumers had signed up and chosen to participate. Just a note, this is something that social media marketers have known for over a decade. 

“Signup ads are native to mobile advertising,” said Zephrin Lasker, CEO and co-founder, Pontiflex, one of the largest players in the mobile ad field. “People have a new sense of control and meaningful experiences with brands.”

 

In the end, this forum also demands a new level of creativity, collaboration and UE, user experience.  If Angry Birds can become a phrase and experience that 78% of mobile phone users know and have participated with, then Angry Birds who drink Dr. Pepper makes perfect sense.

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For more information on Social Media Marketing, especially in how it affects the Music Industry, grab a copy of my new eBook: “Taking the Crowd to the Cloud – Social Media for the Music Industry.”

The music industry has turned into a very complicated space, and marketing was NEVER easy to begin with.  Written by industry insider, Kelli Richards, “Taking the Crowd to the Cloud – Social Media for the Music Industry” raises the bar and demystifies social media marketing, helping musicians, agents and anyone in our industry to THRIVE – it empowers and transforms the marketing mindset.  Featuring TEN top social networks for musicians, this eBook maximizes your social media to build (and keep) your audience. It holds the key to eMail Marketing, YouTube, Facebook, Twitter and several hot secrets in Social Media. (It even covers how to port your MySpace contents to Facebook Music.) For $37 this is easily the million dollar choice.

 


Why Public Wi-Fi Isn’t Doing the Job

The easiest and best way to relive many of the pains of mobile wireless is to offload traffic from 3G or 4G networks to Wi-Fi. But this doesn’t work nearly as well or as smoothly as it should.

Wi-Fi logoFor the past couple of days, I’ve been at Mathfest, the summer meeting of the Mathematical Assn. of America in Lexington, Ky. There’s free Wi-Fi,  of variable quality, in the Louisville Convention Center. Like many public networks, free or paid, it is set up so that network access requires login on a web page. And, as with the case of many such networks, you have to log in every time your network connection is broken and reestablished, effectively every time you move from one room to another.

It’s not a good idea to run completely open Wi-Fi. Even if you don’t care who gets on the network, communications over open networks, other than those with secure sites supplying their own encryption, are wide open to anyone who cares to listen in. Since most users are unaware of this, they are very dangerous.

The best way to provide free public service is using Wi-Fi Protected Access (WPA). This requires giving all potential users a passphrase (you could oost it on the wall.) The advantage is that once the passphrase is entered, most devices will store the configuration and automatically reconnect as needed.

Unfortunately, this approach does not work for paid services, whether pay-by-session or subscription, because there is no way to authenticate individual users. I think the best solutions for these is to provide apps for all devices that will automatically handle the authentication, requiring the user to enter a username and password at most once (you start talking like that after a couple days as a math meeting.)

Boingo does something like this for its subscribers. You give your Boingo credentials to the app–typically just once–and Boingo takes care of the mechanics of logging you on to a wide variety of networks. Unfortunately, Boingo’s coverage is far from universal; it did not, for example, work in either my hotel or the convention center.

Wireless carriers should really be leading the way in making this happen. They are increasing anxious to move traffic onto Wi-Fi and are building hotspots to facilitate this. But sometimes even getting onto your own carrier’s Wi-Fi is nowhere near as seamless as it should be, and using a rival carrier’s network is often impossible.

 

 

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Why Google Hates Patents

In a rather testy blog yesterday, Google’s Chief Legal Council David Drummond lamented the fact that Android is under attack from competitors who are using a patent war to thwart Androids growth.

Mr. Drummond calls these patents that attack Android “bogus” and suggests that Apple, Microsoft, Oracle and others are ganging up to keep Android from being competitive and impacting its growth.

He especially calls out Apple and Microsoft’s purchase of Nortel’s patents and suggests that while normally Apple and Microsoft are at “each others throats” he believes that something sinister is going on. But Mr. Drummond does not know Apple and Microsoft’s history. In 1997, Apple and Microsoft entered a major cross licensing deal that spans a great deal of technologies, especially user interface issues. And over the years, behind the scenes, they’ve expanded their cross licensing deals with an eye on making sure that they kept up with the changing technologies that were behind their original deal. Although the Nortel patents were a high profile case, many of these patents actually were very much in line with their quest to keep their original cross licensing deals up-to-date.

Ironically, Microsoft actually asked Google to bid with them and they refused.

I also found it interesting that Mr. Drummond was pleased that federal regulators are “ looking into” whether Microsoft and Apple acquired the Nortel patents for anti-competitive means.” Given what I stated above, Apple and Microsoft will just show them the history of their cross licensing deals and this point will be mute. By the way, if I were Google I would keep as far away from prodding federal regulators on any issue given the fact that they are also under major federal anti-trust scrutiny

Also if Google is so opposed to patents, then why did they shell out $100 million for patents from IBM? This seems contradictory to their view that patents are bogus. An interesting aside here is that none of these patents from IBM will help them ward off Apple. These IBM patents are mostly related to semiconductors and servers and Apple already has license to most of these from their original IBM/PPC partnership created during the mid 1990’s.

Now, I understand that Drummond’s is just doing his job. In fact, Google’s management has a fiduciary responsibility to defend Android just as Steve Jobs and team have a similar responsibility for defending their patents. However, I believe there is really more of an ideological issue in play and represents Google’s more Open Source approach to life that feels that all technology should be free for use by all. Versus Apple’s strong view that their IP is the result of serious investment and hard work and needs to be protected through the legal patent process to, as Steve Jobs has said, “keep people from stealing” their creative innovations.

I like what Daring Fireball’s John Gruber asks in his post on the subject:

“How is Google’s argument here different than simply demanding that Apple, Microsoft, Oracle, et al should simply sit back and let Google do whatever it wants with Android, regardless of the patents they hold?”

The other thing in play is that Google has always touted the fact that Android is free. But it is clear that if Oracle wins their suit against Google and Android’s use of Java , Oracle plans to charge each Android vendor $15.00 per license. And Microsoft has already gotten HTC to pony up at least $5.00 per HTC device that uses Android to cover Microsoft’s patents used in Android. In Apple’s case, if they win, they won’t even consider licensing that piece of the technology to anyone. So that part of Android that would be in violation of any of Apple’s patents would mean that Google and their licensee’s would have to find a work around and that could be costly to Google and every Android licensee.

And this takes a big bite out of Google’s argument that Android is free and would make any future licensee’s think hard about using Android if there are potentially sliding costs involved to cover any other patent claims that could pop up over time. No wonder they are bashing patents. They fear their impact on what has to be one of their big cash cows where Android is given out freely and they get the add revenues tied to it.

We have suggested to our clients that license Android from Google to begin factoring in at least $20.00 for a possible upcoming Android license fee in any future products. And we have warned them that if Oracle wins, they could try and collect that $15.00 for any Android device already shipped. This is obviously still a legal issue and we don’t know for sure how it will play out. But it would be foolish for any Android licensee not to be prepared for what they have to view as a worst case scenario if the legal battle goes in favor of Oracle and others challenging Androids use of their patents.

And don’t think that Apple, Oracle or Microsoft will back down on this issue. They know the stakes are high and will keep pressure on Google through the legal channels until it is resolved one way or another. It will be great theater watching these tech giants go after each other in the coming months.

The iPad Does What No Other Tablet Does

There actually may be a number of things that can be pointed out that truly differentiate the iPad. I however would like to focus on just one – battery life.

For the past week I have been camping in Lake Tahoe for vacation. All though i’m on vacation and not “working” I still like to check in from time to time as well as post new things on our site.

I brought a slew of electronics on this trip knowing that I would need multiple ways to get online and have very limited options and time to charge my gear.

So here it is Thursday and the only thing with juice left is my iPad. My Macbook Air, several other Android tablets, my iPhone, and several of the latest Android phones all dead. The only thing left standing is the iPad.

20110804-085913.jpg

There are many reasons why this is the case but the biggest reason I believe this is possible is because Apple made the hardware (including designing the processor) and the software. When you can “tune” all the elements of your hardware and software together you can accomplish optimal efficiency in the areas you purpose to. One of the many areas Apple had accomplished and continues to strive for in all their products is battery life.

This is not always easy and some devices like phones simply can’t have as large of batteries as others like computers and tablets. But it is still a goal.

It is of course the goal of the industry as well. I don’t believe companies launch products with poor battery life as a goal. Only there are so many factors for other vendors who don’t control the critical parts of the supply chain like software and hardware, so it becomes a greater challenge.

Battery life is still perhaps in my mind one of the biggest things the industry still needs to progress with. Several years ago I would have never thought that I would have a device that I could use to do work and a slew of other tasks with that would last well over a week on single charge. I’m blown away the iPad is still going.

It is Thursday and i’ve been using the iPad normally since Saturday and it sill has 34% battery life left. In fact i’ve been using the iPad more than any other piece of electronics I brought since Saturday and they all still died.

The Stage is Set for An iPhone Christmas

Data from Piper Jaffray analyst Gene Munster was released Monday that resulted in similar data to research my firm has been conducting. The conclusion of Munster’s data is that there is huge pent up demand for Apple’s next version of the iPhone, the iPhone 5. Munster’s data revealed several key points.

  • Among those who do not have an iPhone but plan to buy an iPhone next, 60% are specifically waiting for the iPhone 5
  • Of those Verizon subs who do not have an iPhone but plan to buy an iPhone next, 74% are specifically waiting for the iPhone 5
  • Among existing iPhone users, 94% expect to buy another iPhone (6% expect to switch to Android)
  • Among existing Android users 47% expect to buy another Android smartphone (42% expect to switch to iPhone).

Granted his sample size was relatively small at 216 people however the data resulted in similar findings to our own independent research. Our interest was in non-smart phone customers primarily but we did survey a mix of current early generation smart phone owners as well. This research is still underway but early conclusions are showing something similar to Munster’s, which is a large amount of consumers are waiting for the iPhone 5.

Over 75% of those we have surveyed so far state that they are waiting for the iPhone 5 for their first smart phone. In fact I was speaking with a college student who has a two year old and very worn BlackBerry. When I asked him what his plans were for his next phone he looked at me like I was crazy and said “duh the iPhone 5.”

What else is interesting is that when we dig into the kinds of consumers we are talking to we find out that they are largely in the early majority and late majority. These happen to be the largest group of consumers and demand for smart phones is entering into the largest sector of the market. What Munster’s data and our early analysis is showing is that a significant number of people will be in the market for new phones this holiday season, smart phones in particular, and their overwhelming choice appears to be the iPhone 5.

Another interesting bit of information we are finding is that a large number of BlackBerry consumers are due for upgrades this holiday season and are in the market for a new smart phone. We are in the process of finding out the mix of Android to iPhone preference in these consumers and will release those stats when we have them.

The bottom line is if you combine the number of new consumers in the market for a smart phone this fall who are leaning toward an iPhone with the number of consumers upgrading, the result is a huge holiday season for smart phones in general but may tip heavily in Apple’s favor with the iPhone 5.

I would not be surprised if in the US this holiday season more iPhones are sold than Android phones.

Consolidating Federal Data Centers Won’t Be Easy

Map of planned data center closings
Planned data center closings (from CIO.gov)

Derrick Harris at GigaOm offers an enlightening look at why the Office of Management & Budget’s plan to close 800 of the federal government’s 2,094 data centers (map) isn’t likely to happen. The problem: Federal agencies run tons of legacy apps that are going to resist the push for consolidation and virtualization.

Federal IT is a mess. Much of the software ranges from old to ancient. On workstations, Windows XP and Office 2003 is often still the rule. May agencies run multiple, tiny data centers.

The budget situation is not making things any easier. Data center consolidation, done right, could save a lot of money in the long run. But it will cost up front and the squeeze on agency funding makes that sort of investment difficult.

Can Google TV be Saved?

As of yesterday Logitech has been offering their Revue Google TV set top box for $99. I was at Logitech’s media day where they launched the Revue and I remember the mumblings from the media and analysts when they announced the price of $250. It was as if everyone knew that Logitech clearly priced themselves out of the market. $250 is quite a lot to spend on a product that was truncated at launch.

I was also at Google IO where they first announced and demonstrated Google TV. I remember at the time thinking that this product had potential but that it also had a good deal of hurdles to overcome. The experience from the first Google TV reminded me of many experiences I had with early products in the digital media adapter segment. Many of the products worked to a degree but did not necessarily nail the overall experience.

In fact i’m yet to see a product in the connected TV / Smart TV sector that nails all that a connected TV should be. If I was to nail down what I feel the biggest hindrance to connected TV moving forward it’s Hollywood.

I worked and consulted with the entertainment industry very shortly but long enough to understand how hard it is to work with Hollywood. Ask anyone who has been serious about looking into connected TV solutions and you hear constantly that lack of content is the biggest missing piece.

We are yet to see an offering in the connected TV space that has the depth and breadth of content as our cable or satellite service provider. The main reason for this is because they pay Hollywood and the network studios a massive sum of money to have the rights to broadcast their content.

Generally speaking the Internet is not yet a fully functional substitute for a cable or satellite service provider. Some consumers depend less on things like real time news and sports and can therefore come closer to being able to replace their service providers. Others have no problem waiting days, weeks or month’s to watch their favorite TV shows after they have aired. In some cases you can have your programming needs met from the Internet. Those situations however are the minority not the majority.

For the technology industry to bring to market a full connected TV solution that can replace a TV programming service provider is going to require the help from Hollywood.

For more interesting reading on the subject check out Jared Newman’s article at Techland called “How Google TV Can be Saved.”

Why Apple Scares the Wintel Vendors

You might think that this is a trick question. On the surface, the answer should be the iPad and its eco system. But the iPad is a new category and while it is true they fear Apple’s potential of owning this market and making it hard to create products that are competitive, this is not the product that they fear the most.

The product they fear the most is Apple’s MacBook Air. When Apple first introduced the MacBook Air, a lot of the PC vendors thought it was a gimmick. While it was very thin and light it was very underpowered. And well over $1000. PC Vendor’s thin and lights (their definition, not mine) had broken $1000 and PC”s under $700 were dominating the overall market for laptops. And this first generation MacBook Air had no impact on their laptop market at all.

The only company to kind of take this Apple move serious was Dell, who created the Adamo XPS, supposedly their version of the MacBook Air. But while it was relatively thin compared to all of the other “thin and light” laptops on the market, it was also so high priced that people stayed away from it in droves. At least for the short term, Apple’s MacBook Air was considered the thinnest and lightest laptop albeit slightly underpowered and with Apple’s upper end pricing scheme behind it.

In the mean time, the demand for cheap PC’s started to take off. In fact, a new category of thin and lights called netbooks was all the rage for about two years. And while Steve Jobs considered netbooks toys, he watched its growth with interest. While he publicly said Apple would never make a netbook, it was pretty clear that Jobs and company had decided to make the next MacBook air lighter and thinner than a netbook yet as powerful as most mid to high end laptops. And, while their starting model is $999, their proprietary unibody casing and integrated graphics chips still make these the most powerful ultralights on the market today.

But when Apple also decided to kill their MacBooks, or their entry level laptops and only bring to market MacBook airs at prices close to their older entry level models, the PC vendors sat up and took note of this quickly. To them it signaled that Apple is getting ready to start a full out assault on what has been sacred territory for them. Sure, they can still create laptops under $500 and sell them all day long. But they also realized that Apple is now setting the bar for laptops at a new level by using the MacBook Air to help define the next generation of laptops and, they know that with Apple’s buying power and International reach Apple could price them even more aggressively in the very near future.

The PC industry itself had somewhat anticipated this and is working on creating what they call Ultrabooks, Windows based systems that are much like the MacBook Air. But the one that is on the market today that is the closest to the MacBook Air is the Samsung 900 3X which is priced about $1600 Euro’s in Europe and well over $1800 in the US. Apple’s comparative model is $1599. Although the Samsung 900 3X is a solid product, Apple’s lead in these types of “ultrabooks” along with their stores will help them sell even more of these in the future. In fact, in the last earnings call, Apple said they sold about 4 million computers in the last quarter and that 73% where laptops. And we believe that 75% of those where MacBook Airs.

Given the MacBook Air’s pricing and Apple’s apparent commitment to be even more competitive with the mainstream PC vendors with this model, signals to me that they really want more of the hallowed ground that traditional PC vendors tread today. And it looks like Apple is about to crank up their laptop supply chain prowess, industrial design skills and marketing and retail emphasis and will go right at the heart of these PC vendors most profitable laptop segment.

Oh yeah, and they will soon have their iCloud offering that will bring their eco-system in sync to their laptops and desktops as well, another value added piece of technology that I am sure will strike a chord with users. And given the possible halo effect of the new iPhone 5 when it comes out as well as the iPad and the iCloud, I am certain that Apple will drive even more people into their stores and will put an even greater effort on selling MacBook Airs and MacBook Pro’s in the future.

Yes, the iPad is a real concern for the PC vendors as Apple has a huge lead in tablets and strong demand. But if Apple starts eating into their laptop market share, this will have the greatest impact on these PC vendors in the future and make it even harder for them to make strong profits on this part of their laptop business.