Windows 8 on ARM: The Big Questions

Microsoft released a lengthy blog post yesterday on their website specifically around Windows 8 on ARM. Although the post shed some insight into a number of the looming questions we all have about Windows on ARM, there are still a few things I am concerned about.

Windows 8 on ARM has the potential to be either wildly successful and disruptive but it also has the potential to fail in the short-term.

How Will Microsoft and Retail Position the X86 vs the ARM hardware Versions?
When I put myself in the consumer buying mindset for a new Windows-based PC, I see some potential confusion when it comes to product positioning. Microsoft has a challenge on their hand that I am fascinated to see how they figure it out.

What Microsoft, their hardware partners, and their retail partners can not do is position ARM notebooks or other form factors as limited devices. So they can’t use terms like “full Windows experience” or “the Windows you know and love” types of terminology for non-X86 devices. Taking this direction would cause consumers to ask of their ARM counterparts: “I don’t get the full Windows experience I know and love on these products”? Which would essentially deem Windows on ARM devices to fail because they would be positioned as truncated.

This is actually an area where I am intrigued to see if the Intel inside branding efforts of years past have any relative spill over. It actually could if consumers are on the fence. Consumers may consider going with a product with Intel, or AMD for that matter, the “safe bet” if there is any confusion what-so-ever.

Unfortunately, or fortunately depending on who you are, I don’t think any of the ARM companies benefit by touting their brand name in a Windows 8 on ARM device. For example saying “Runs Nvidia Tegra 3” or “Qualcomm Snapdragon”. In fact that may add to the confusion rather than help clear it up.

It is of course possible that Microsoft and retail partners ignore trying to position Windows on X86 and Windows 8 on ARM differently at all. However, unless the device experiences have no difference at all this would be a mistake.

Will All Drivers Be Supported?
To quote the blog post directly:

“Our device strategy uses standardized protocols and class drivers extensively”

“Of course Windows has many class drivers inside, which you experience when you plug-in a wide variety of USB devices, such as storage, mice, or keyboards.“

“The majority of printers selling today are supported using the class driver, which means you’ll be able to “plug and print” on WOA without additional drivers”

This must be true and must be delivered upon. I want to be optimistic about this and take Microsoft at their word that drivers won’t be an issue, as they appear to insinuate. However, I will feel better once I see Windows 8 on ARM working with a wide variety of peripherals.

Are Consumers Willing to Invest in New Software?
This may be perhaps the biggest point to wrestle with. As I have stated before, I believe Microsoft, with Windows 8 in general, has come as close to fundamentally starting over with Windows as they possibly could without completely starting over. Windows 8 is a step in the right direction to optimize Windows for the future of computing.

Consumers being willing to start fresh with software is the wild card for me. Unfortunately I have no hard data (yet) on this but I will offer some observational logic as to why this may be the case.

Firstly, consumers switching to the Mac platform at incredible rates is an indicator. Apple continually mentions their stats on each quarterly call that 50% of Mac sales are to first time Mac buyers. This would mean that many of those customers have made investments in Windows software and are willing to start over. Perhaps this same buying psychology could translate to Windows 8 on ARM with a reality that legacy Windows software isn’t as important as many would think.

Secondly, reports came out in late December from Flurry that on Christmas day there was a 125% increase in app downloads mostly coming from the 353% increase in device activations on the same day. This leads us to believe that as consumers get a new device they go app shopping.

Lastly, the economics support this trend. The reality is that the new app economy has driven the cost of software down. This is not only true of mobile devices but of desktop / notebook as well. The days of selling software and software bundles in the hundreds of dollars are over. If you look at the top-selling apps in the Mac OSX App store there isn’t a single one over $29.99 and most are well south of that figure. With lower overall app pricing becoming the norm it makes it feasible for consumers to actually start over with software.

Could it be Netbooks all Over Again?
In all of these scenarios I am generally concerned that Windows 8 on ARM devices may be headed down the path of Netbooks in their early days if we are not careful. Netbook return rates were north of 30% in their early years mainly because consumers bought them expecting a “full PC” experience and early Netbooks didn’t deliver. This was primarily because early devices were Linux-based. However, even once the devices ran Windows, they were still positioned as “not full PCs” mainly because they were underpowered. It was a positioning mess in my opinion.

I am not as concerned of these devices being underpowered as much as I am them fully delivering on the full PC experience. This will have to include a robust list of software, which Microsoft and partners are working on. There are a number of form factors outside of the clamshell PC design that I think will be more successful for Windows 8 on ARM vendors and Hybrids being the most interesting potential.

Even with all the questions still looming, ultimately the positioning of these products is what will make or break Windows on ARM devices.

Fun & Games: Cross Digital Distribution Takes Movies into a Whole New Realm

A few months ago I had the privilege of interviewing Thomas Dolby and getting an insider’s view into the extremely creative way he was introducing the first new album he’d created in over two decades.  Fans would go through the portal of a game, The Floating City, and only when they had reached certain benchmarks in the game did they get to download some of the best tracks.

As the digital revolution reaches what seems to be an absolute frenzy of technological advances and debuts, more and more we’re seeing the cross-platform promotion and collaboration around product distribution. The latest (and one of the biggest) entries into this virtual world is set to be Suzanne Collins’ popular novel, “The Hunger Games.”

According to Digital Media Wire, Social game developer, Funtactix has partnered up with Lionsgate around the movie’s debut this spring The Hunger Games Adventures is set to launch on March 23, the day the first movie opens in theaters.

Lionsgate started the cross-digital campaign months ago with “The Capitol” a web presence for the government of Panem, where “The Hunger Games” stories take place. They also created a strong social media launch, featuring a YouTube channel in addition to other social spaces.

The Hunger Games Adventures game is set to be a strong player in the multi-digital branding of the three Lionsgate movies. Players move through The Capitol and the key Districts in the story, becoming more engrossed at each level of game.

“As a company that wants to align itself with the most beloved entertainment properties and passionate fans in the world, joining forces with Lionsgate on The Hunger Games was a very easy decision,” said Sam Glassenberg, CEO of Funtactix.

This isn’t the only foray Funtactix has made into the world of branded film releases.  They recently created a game built around the Mission Impossible franchise.

Since its founding in 2006, Funtactix has earned an industry reputation for rapid innovation in web-based gaming. They were first to deliver connected 3D multiplayer action gaming through  deeply-integrated avatar-based games.

They’re also poised to release The Hunger Games Adventures through Facebook as well, and with a following of millions and the realm of Harry Potter coming to a close, it will be interesting to see where Funtactix – and other branding gaming companies – will reach as the digital revolution continues to evolve.

Kelli Richards
President and CEO
The All Access Group, LLC

Windows on ARM to Include Desktop Office. But What About Outlook?

Office logoWhile Microsoft has said a lot of Windows 8, it has revealed very little about its almost equally important software partner, Office 15. In in a post on the Building Windows 8 blog today, Windows boss Steve Sinofsky disclosed a vital bit of information about Windows on ARM (WOA), the version that will run on ARM, rather than Intel 86, processors and is especially important for tablets:

“WOA includes desktop versions of the new Microsoft Word, Excel, PowerPoint, and OneNote. These new Office applications, codenamed “Office 15”, have been significantly architected for both touch and minimized power/resource consumption, while also being fully-featured for consumers and providing complete document compatibility. WOA supports the Windows desktop experience including File Explorer, Internet Explorer 10 for the desktop, and most other intrinsic Windows desktop features—which have been significantly architected for both touch and minimized power/resource consumption.”

I don’t know how much to read into this but there is one critical application missing from the list: Outlook. Sinofsky says the Windows 8 Metro mail app will support Exchange Active Sync (EAS) for mail, contacts, and calendaring. But supporting EAS does not necessarily mean the full Exchange policy support that enterprises want to see. Android phones, for example, can connect to Exchange servers for mail, but do not natively provide full Exchange support (some OEMs have tweaked Android to do this, and there are third-party solutions.)

I think Enterprise adoption  is going to be key to the success of Windows 8 tablets, so this is a big deal. On the other hand, porting Outlook as it currently exists to ARM is a non-starter. Outlook is a notorious resource hog and ARM programs are going to have to be resource sippers because of the relatively limited processing and memory power available on tablets. And Outlook’s massive databases would swamp the storage available on a tablet.

A Microsoft spokesperson declined to elaborate on Sinofsky’s blog, so I guess we’ll have to wait a while longer to find out.

 

 

Do Apple Competitors Make Bad Products?

I often engage in discussions with the financial community on matters related to tech for their portfolio management. One of the things I was asked in a recent conversation intrigued me. The question was around why Apple seems to be dominating their competition with such a limited product portfolio mix.

Tim Cook continues to emphasize with each investor, earnings, and public event that Apple’s laser focus is to continue striving to make the best products on the planet. Given that Apple seems nearly unstoppable, it appears their strategy is working. And it does make you wonder what Tim Cook’s statements about Apple continuing to focus on making the best products and Apple’s dominant position (especially with iPhone and iPad) says about other products on the market.

So the question thrown at me was “Do Apple Competitors Make Bad Products?” In light of Apple’s continual progress forward and other companies’ struggle to keep up, this is an interesting question. The answer is simply that many Apple competitors make very good products. I happen to like quite a few of them. The problem—for competitors—is that Apple makes exceptional products and perhaps more importantly, extraordinary experiences with those products.

To dive into this deeper, three fundamental points need to be established…

Apple Has More Competition Than Anyone—Yet No True Competitors

When you think about Apple’s vertically integrated business strategy of having a dedicated hardware business, software business, and services business, you realize that Apple competes toe-to-toe with almost the entire tech industry. Yet no company competes toe-to-toe with Apple.

What I mean by that is Apple competes directly with hardware companies, meaning people who make notebooks, desktops, all-in-ones, smartphones, tablets, and set-top boxes to a degree.

They also compete with those who make software, particularly in operating systems, but also in core apps. They compete with Microsoft at an OS level and at an Office level with Pages, Keynote, Numbers, etc. They compete with companies who make media management and creation software like Adobe, or ArcSoft etc, with iMovie, iPhoto, etc. They compete with Google with Android. The list could go on.

They also compete with services companies. iTunes and iCloud as a service competes with a host of online services providers from email, to calendar, to movies, music, storage and backup etc. Google and Microsoft again are competitors here along with a long list of others.

They compete to a degree with retailers. Apple retail competes with Best Buy, Wal-Mart, Target, Staples, etc. Note that Apple doesn’t compete on all levels with these retailers, but we have to acknowledge there are some crossovers.

When you look at the sum of their businesses, because of their vertically integrated strategy, it is not quite obvious the large list of competitors Apple has all over the industry. Yet the reality is that no other company has such a tightly integrated vertical strategy as Apple. So my first point is that at a fundamental level, Apple doesn’t actually have any true competitors who compete with them on every level they way they do with the rest of the Industry. This, at its core, is what sets them apart.

Granted we could debate that with Google’s acquisition of Motorola, they have all the parts on paper to compete with Apple toe-to-toe, but for the time being I still consider that a stretch.

Apple’s “Works Better Together” Philosophy

What is truly unique about Apple is the relationship that all their products have with each other. It is as if each product was made for the other, yet alone each one is still a solid standalone product. We call this the “Works Better Together” approach. It means that your products or “consumer end-points” can work fine as standalone products, but work even better as a comprehensive whole. In concept this sounds like a no-brainer, but the reality is that Apple’s vertically integrated approach is essential in executing this strategy.

Too many companies who make consumer products organize their business units to compete for PNL. Sometimes even worse than competing for PNL, they work as a silos and never have a clue what the other business groups are working on. This makes it extremely difficult for a company to create a “works better together” portfolio even if they have all the parts to make it work.

By developing this strategy as a part of the “iDevice” ecosystem, Apple benefits by creating a user experience that is not related to simply one device, but to the entire Apple ecosystem. This and more is what we mean when we talk about the Apple ecosystem being sticky and creating consumer loyalty.

Technology as Art

Lastly, Apple has a culture that is completely unique, which is another part of the reason for its success. Steve Jobs in his many keynotes has pointed out that Apple’s approach to products is that they are at the union of liberal arts and technology. And nobody in the industry so far has been able to match Apple’s eye for design.

What this means is that there is an added dimension of design and technology as art that influences the thinking of those who work at Apple. This group is like a passionate team of artists who happen to turn their art into technology.

This is the major reason that Apple emphasizes simplicity. Steve Jobs has in many keynotes and demos said that Apple’s various products “just work.” What we must not forget is that creating technology products that are simple is no trivial task. Simple solutions require sophisticated technologies. Apple knows this better than anyone and it has oriented itself to succeed at just that.

So it is not that Apple competitors make bad products. Their hardware competitors and OS competitors make good products. It is simply because of their vertically integrated model, paired with a works better together product philosophy, coupled with incredible execution, and a hardware as art design strategy, that Apple simply makes exceptional and extraordinary products.

Which is why one can argue that they truly do not have any real competitors.

Apple’s Quiet, Brutal War on Wireless Carriers

Steve Jobs made no secret of his disdain for wireless carriers. In 2005, when Apple was still denying any interest in getting into the phone business,  Jobs sneered at the four major U.S. carriers as the “four orifices” through which the wireless business passed. With the launch of the original iPhone, Apple made a concerted, but failed, effort to change how the wireless carriers did business by getting AT&T to sell the phone without a subsidy.

iPhone 4SJobs had to make a peace of sorts with the carriers because that was the only way  to get the iPhone into the hands of customers. But now he seems to be wreaking posthumous revenge on his old foes. The problem is simple. The carriers are selling tons of iPhones. and  Apple is collecting all the profit. Sprint reported yesterday that it sold 1.8 million iPhones in the fourth quarter, 40% of them from customers new to Sprint.  But the massive subsidy cost, at least $300 a unit, contributed to a $1.3 billion loss in the quarter (and to Apple’s staggering profit in the same period.) As PCWeek.com’s phone maven Sascha Segan tweeted, “Sprint’s quarterly results show once again how the iPhone is a way to transfer $ from carriers to Apple.” In a CNNMoney post headlined “The iPhone is a nightmare for carriers,” David Goldman quoted Nomura Securities analyst Mick McCormack as saying: “A logical conclusion is that the iPhone is not good for wireless carriers. When we look at the direct and indirect economics that Apple has managed to extract from the carriers, the carrier-level value destruction is quite evident.”

There’s not a lot carriers can do about it. The original deal Apple offered in 2007 was almost certainly better for them. Apple relented after  AT&T pushed to renegotiate the deal and, more important, additional carriers outside the U.S. refused to go along with Apple’s terms. The carriers got what they wanted, and now they are paying the price, having yielded control to Apple over pricing, branding, apps. and just about everything else in the customer experience.

Cable operators might want to take a close look at what Apple has done to the mobile phone industry. It has been widely reported in the last few days that Apple has been talking to cable operators, including Rogers communications and BCE in Canada, about partnering in a long-rumored Apple television venture. Apple has no more love for cable operators than it does for wireless carriers, but it needed the carriers because they control the spectrum and it needs the operators because they control the content. Somehow, though, these partnerships have a way of becoming terribly one-sided. I hope Apple can revolutionize the television experience, but I’d advise the cable guys to watch their wallets.

Wolfram Alpha: Analytics for the Rest of Us

Wolfram Alpha may finally be making the big leap from interesting curiosity to generally useful tool.

For the 2 1/2 years of its existence. Alpha has had something of an identity crisis. It’s sort of a search engine, but instead of crawling the web for results, it relies on a large set of curated databases. At its heart is the computational engine of Mathematica, so it can do some amazing things with that data. When you asked it a question that it knew what to do with, it could produce very interesting, sometimes surprising, analytical results. But it often bombed on simple queries that Google handled with aplomb. It could tell you the distance between San Francisco and Buenos Aires (6,456 miles or 35 light milliseconds) but not where to find a nearby pizza. Alpha got a considerable boost when Apple chose it to handle computation-based queries from Siri–the New York Times reports that Sire generates a quarter of Alpha’s traffic–but it  remained a bit of an oddball service.

With the launch today of Wolfram Alpha Pro ($4.95 per month, $2.95 for students), the service is promising to get a lot more useful. There are loads of new features that make the pro option well worth its modest cost. One big change is that you get a persistent account, in which past analyses are remembered and can be modified. Another the ability to upload your own data for analysis and then to download any of the analytical results, including some very sophisticated graphics.

As a simple test, I uploaded about 65 years worth of government data on U.S. growth of gross domestic product, change in the Consumer Price Index, and the unemployment rate. After an initial glitch, in which Alpha interpreted a column headed “Real GDP” as representing amounts of money in Brazilian reals, it gave me an instant deep analysis of my data. As I would have expected, it should a fairly strong relationship between GDP growth and unemployment,  but no significant correlation between inflation and either growth or unemployment.

bubble chartThe bubble chart on the left is an example of the sort of thing Alpha does automatically. It’s a sort of three-dimensional graphic, in which the y-axis represents GDP growth in a given year,  the x-axis is inflation, and the size of the circle represents the  unemployment rate.  Other data generated include scatter plots, histograms, a regression equation, a covariance matrix, and principal component analysis for analysis of variance.

Using Pro, you can also perform analysis on Alpha’s extensive databases  and  download not only the results but the raw data (there are some restrictions on data exports imposed by Wolfram’s licensing agreements with the data suppliers.) CEO Stephen Wolfram describes the service as “all the tools a data scientist would have combined with knowledge of the world.”

Another feature offered by the Pro service is analysis of images. Upload a photo and alpha will perform a range of  analyses on it, including metadata, color analysis, intensity histograms, edge detection, and even some basic editing tools. Nothing that Photoshop can’t do, but its quick and easy.

The real prize in Alpha Pro, though, is the data analytics. You can learn a lot when you start looking at your data in more depth than yu can get from a spreadsheet. Alpha makes it cheap and easy to get started.

 

 

 

What Intel Must Demonstrate in Smartphones (and soon)

Intel made a big splash at CES 2012 with the announcement that Motorola and Lenovo committed to Intel’s Medfield clip_image002smartphone solution. This came on the heels of a disappointing break-up between Intel and Nokia as well as a lack of previous traction with LG. While Intel has come farther than they have ever come before with one of their X86 SOCs, they still have a long way to go to claim smartphone victory. Of course Intel knows this and is working diligently and sparing no expense. The biggest challenge Intel faces is attacking a market where the incumbent, ARM ecosystem partners Qualcomm, NVIDIA, and Texas Instruments have almost 100% market share. To start gaining share in smartphones, Intel must demonstrate many things in the near future.

More Design Wins with Key Players

The Motorola announcement was impressive in that Moto has a respected name in smartphones, but they won’t carry Intel that far alone. Lenovo is an even smaller player and while very successful in PCs, hasn’t been able to secure a lot of smartphone market share even in their home country, China. Intel knows they need a few more partners to start chipping away at market share and I expect them to announce at least one at this year’s Mobile World Congress.

One of the challenges is that many of the top players are already locked-in in one way or another, Intel has some negative history with, or has rapidly declining share. Apple already has their own A-Series SOC, Samsung has Exynos SOC, and Nokia rebuffed Intel last year and is clearly locked into ARM and Microsoft for the time being. RIM as a partner is a shaky proposition and HTC is an aggressive player but is recently dropping share. That leaves lower smartphone market share holders LG, Sony, Sharp, NEC and ZTE in the short term.

Longer term, I don’t expect Apple or Samsung to get out of the SOC business because they have been successful with their own strategies. I cannot see Nokia or Microsoft motivated to drive a change or provide dual support for X86 until Windows 9. RIM is in a free-fall with no bottom in sight. Intel is forced to take the long-term approach as they are with Lenovo by developing smaller smartphone players to become larger ones. ZTE certainly is a good long term prospect as is Huawei. If Intel can leverage their PC franchise with them I could see them being successful.

Relevant, Differentiated, and Demonstrable Usage Models

In fighting any incumbent, the new entrant must provide something well above and beyond what the incumbent offers to incent a change in behavior. I am assuming that Intel won’t lead in low price or lowest development cost, so they must offer handset makers or the carriers a way to make more money or get consumers to demand an Intel-based smartphone. Regardless of which variable Intel wants to push, they must devise relevant, differentiated and demonstrable usage models that ARM cannot.

By relevant I mean that it must be fixing a known pain point or creating a real “wow” feature consumers never asked for, but is so cool it cannot be passed up. One pain point example is battery life. Battery life is simply not good enough on smartphones when used many times daily. If this weren’t true, car chargers and battery backs wouldn’t be so popular. Wireless display is useful and cool but not differentiated in that Apple can enable this via AirPlay. Demonstrable means that it must be demonstrated at the store, an ad, or on-line on a web site. If something isn’t demonstrable then it may as well not exist.

I would like to see Intel invest heavily in modularity, or the ability to best turn the smartphone into a PC through wireless display and wireless input. Yes, this is dangerous short-term in that if Intel does a great job at it then they could eat into their PC processor franchise. But, this is the innovator’s dilemma, and a leader must sacrifice something today to get something tomorrow. I could envision an Intel-based emerging region smartphone that enables PC functionality. ARM cannot offer this well today but will be able to in the future with their A15 and beyond-based silicon. Intel should jump on the modularity opportunity while it lasts.

One other opportunity here is for Intel to leverage their end-to-end experience from the X86-based Intel smartphone to the X86-based data center. If Intel can demonstrate something incredible in the end-to-end experience with something like security or a super-fast virtualized desktop, this could be incredibly impactful. One thing that will be with us for at least another 5 years is bandwidth limitation.

Carrier Excitement

Outside of Apple, the carriers are the gatekeepers. Consumers must go through them to get the wireless plans, the phones, and most importantly, the wireless subsidy. Apple’s market entry strategy with AT&T on the iPhone was a strategic masterpiece in how to get into a market and change the rules over time. Apple drove so much consumer demand for iPhones that the carriers were begging Apple to carry the iPhone, the exact opposite of the previous decade.

Intel must get carriers excited in the new usage models, bring them a new stream of revenue they feel they are being cut out from, or lower their costs. Intel doesn’t bring them revenue from content side but could I can imagine Intel enabling telcos to get a piece of classic retailer’s PC action once “family plans” become a reality. While telco-distributed PCs weren’t a big success in the past, this was due primarily from the absence of family data plans. I can also imagine Intel helping telcos lower the costs of their massive data centers with Xeon-based servers. Finally, if Intel could shift traffic on the already oversold “wire” by shifting processing done in the cloud and onto their SOCs, this would be very good in a bandwidth-constrained environment.

Competitive Handset Power

At CES, Intel showed some very impressive battery life figures for Medfield handsets:

• 6 hour HD video playback

• 5 hours 3G browsing

• 45 hour audio playback

• 8 hour 3G talk time

• 14 day standby

This was measured on Intel’s own reference platform which is somewhat representative of how OEMs handsets will perform. What will be very telling will be how Medfield performs on a Tier 1 handset maker, Motorola when they launch in Q3 2012. There is no reason to think the Moto handset won’t get as impressive battery life figures, but Intel could gain even more credibility by releasing those figures as available.

When Will We Know When/If Intel’s Smartphone Effort is a Success?

Intel has slowly but surely made inroads into the smartphone market. Medfield is impressive but competing with and taking share from an incumbent with 99%+ market share is a daunting task. The easy answer to measure Intel progress is by market share alone but that’s lazy. I believe that Intel smartphone efforts should first be measured by handset carrier alliances, the number of handset wins, the handset quality and the new end usage models their SOCs and software can enable. As these efforts lead to potential share gain does it make sense to start measuring and scrutinizing share.

Why Tablets are Important to eCommerce

I recently noticed something about my tablet usage that really intrigued me. Since using the iPad, it has become a constant companion to me and along with my iPhone and Droid, I carry it with me all of the time. Although my smartphones are quite important to me, I have always had a bit of a difficult time reading their small screens and as I get older, I have to admit that the size of the screens I use in my life are becoming an important part of my user profile. And while I would often buy apps on the smart phones for use on them, I very seldom used them for any real eCommerce purchases. For that I mostly deferred to my laptop.

But over the last six months, I began noticing that my preferred screen for buying things started shifting over to the iPad. This particular fact came into even sharper focus for me recently when I read a piece in Wired that pointed out that Amazon’s tablet might actually serve as a powerful vehicle for their overall large store.

In this same article, they recounted a Wired interview with Steve Jobs in 1997 where they asked him what opportunities he saw with the Web. Here is what he said:

Wired: What other opportunities are out there?
Steve Jobs: Who do you think will be the main beneficiary of the web? Who wins the most?
Wired: People who have something –
Jobs: To sell!
Wired: To share.
Jobs: To sell!
Wired: You mean publishing?
Jobs: It’s more than publishing. It’s commerce. People are going to stop going to a lot of stores. And they’re going to buy stuff over the Web!

As you can see, even back then, Jobs saw that there would be a major shift in user buying habits and that the Web would become a serious vehicle for eCommerce. And over the last 13 years that has happened in a big way. eBay, Craigslist, Amazon, iTunes, etc have all driven eCommerce into the mainstream and they are now just a normal part of the way most of us buy things, especially things that we cannot find at our local mall. Of course, the irony of this quote from Jobs is that while iTunes has driven his eCommerce vision, he also created stores that have become one of the most successful retail chains in the world.

Now, if you look closely at peoples shopping habits these days, much of how they search for a product through search engines and review sites like PC Mag’s product reviews, and then buy them over the Web, should give you an understand that the Web has literally become the most powerful medium for commerce next to the grocery store. Sure, people will always go to the mall, but the mall and local stores will always have a limited supply of goods. But through the Web, you can buy just about anything. Although people will still use desktops and laptops for eCommerce, if my experience with the iPad is any guide, then the tablet, with its bigger screen then a smart phone and its full access to all Web eCommerce in this highly mobile for factor, could actually drive even more eCommerce purchases in the future. Another way to look at this is that the tablet is Amazon’s Brick and Mortar and a tablet is to Amazon what a physical store is to Wal-Mart.

If you think about Amazon’s business, it started with selling books online and then quickly became a place where consumers can buy just about anything and shop competitively from one single location. It just so happens however that this location is not physical; it resides fully within your browser. Amazon’s location is virtual.

To contrast, a company like Wal-Mart is evolving into the digital age with a strategy that includes their brick and mortar stores. To some degree Barnes and Noble is doing something similar but only in the realm of books. Amazon however has no intentions of creating a physical location where you walk in to experience their service. I believe however that Amazon is very interested in giving you a virtual physical storefront and it started with the Kindle.

Any retailer will tell you how important the overall retail experience is to their success. Some companies do retail poorly and others do retail extremely well. The Kindle for Amazon started completely around discovering, purchasing and reading books. The Kindle is the retail storefront to Amazon’s digital book library.

I believe that the evolution of the Kindle will follow Amazon’s business evolution. It started with books then included everything else. Which is why this next device that will most likely be a fully featured tablet will also come with Amazon’s complete shopping experience built in. This includes not just digital storefronts like books, music and movies but physical items as well. Since Amazon is one of, if not the largest digital storefront, it benefits them to get devices on the market where they control the entire shopping experience.

This is one of the reasons Amazon re-jiggered their iOS app strategy to stay away from Apple’s transaction model and fees. I don’t believe this move was just about avoiding management fees but that Amazon wanted to control the user experience with their storefront instead of Apple.

Reflecting on that point briefly, it becomes clear that Apple’s app store commerce model works for those for whom billing and storefronts are a problem but it does not work for those companies who have spent millions of dollars perfecting their own e-commerce experience. This leads me to believe that if the entire eCommerce experience is baked into the tablet experience then Apple’s new big purchase might be an eCommerce “etailer” that offers a broad range of products that Apple can integrate into the complete user experience of the iPad.

Amazon also has an interesting strategy with their Prime service that could be strategically integrated as well within their tablet offering. Perhaps Amazon gives better deals or promotions to those who own the tablet and are Prime customers thus incentivizing more purchasing from their store directly on the tablet.

This is why I believe a tablet is actually strategic for Amazon. Of course they can and will make sure their services are available on every device imaginable. However if they bring a device to market that is a full blown tablet and also includes the most elegant and seamless experience to research, discover and purchase from, then that device becomes the retail storefront to everything Amazon sells – and more.

Hulu’s Latest Hot Ticket

When it comes to digital distribution, one of the big online commercial sites for video has certainly been Hulu. In only four short years of life, Hulu has carved out a tremendous niche with a huge tribe of trusting, loyal fans and users.  While Hulu is “independent” to some degree, NBCUniversal, Newscorp and even Disney are part of the ownership team.

For anyone not familiar with Hulu yet, at its core, it is simply an online video service providing formally, commercially produced content, such as movies, television shows, clips, and other content, coming in from a very wide variety of sources, such as FOX, NBCUniversal, ABC, Criterion, A&E Networks, TED and a very long list of other content providers.

So why, after four years of great digital distribution, am I writing about Hulu?  Because they are about to take a huge leap of faith and add another original production to their arsenal – original content is a journey that even Oprah Winfrey herself can tell you is fraught with danger.  So in addition to movies and primetime TV hits such as Modern Family, Glee, The Office, etc., etc., etc., viewers can also download Hulu’s own creations (A Day in the Life and The Morning After), as well as their newest addition, “Paul, the Male Matchmaker” (launching on Monday, February 13th exclusively on Hulu).  The launch date is no accident – the 10-episode comedy is a mockumentary about a socially inept man who inherits a matchmaking service – who then does out brutally honest dating advice in the sincere belief that he is helping women find love.

Actor/writer Paul Bartholomew (Mad Men; Yes, Dear), who stars in the series, said, “This show is for anyone who has ever been set up on a horribly misguided date by their sister, friend, co-worker — and then been blamed for it not working out. Which is basically everyone.”

Finally, original, full-length commercially produced web series’ are starting to find a foothold – and a distribution portal like Hulu is exactly the venue to bring enough attention and a strong enough fan base to move audiences to show up week after week. Rock on Hulu, we’re looking forward to where you go next!

Kelli Richards
CEO
The All Access Group, LLC

 

 

The Tablet is the Ultimate Mobile Personal Computer

Our firm has been doing an extensive amount of tablet analysis over the past year. The more I study the role of the tablet in the industry and in the lives of consumers the more fascinated I become with this form factor. To clarify, we believe and classify the tablet as a PC. We simply view it as a form factor within the PC landscape.

One theme of late that has some of my mind share is around tablets going where traditional PCs can not. I am not just speaking of overall market share, although that factors into my thinking, but rather I am thinking about location. Now to be clear, I am not saying PCs (clamshell notebook PCs specifically) literally can not go to the locations I will talk about. Rather, what I want to point out is that the traditional PC/Notebook PC is the wrong form factor for a growing number of use cases and market pain points.

Prior to tablets, I believe the technology industry at large looked at nearly every consumer use case, as well as every vertical market, as an opportunity for the sale of a traditional PC/Notebook PC. What this led to was the adoption of the traditional PC into scenarios, where although sufficient, was the wrong form factor for the job. If you follow much of what I write you will notice that I am fond of Clayton Christensen’s philosophy in The Innovators Dilemma that consumers “hire” products to get jobs done. Prior to tablets the market “hired” the PC to do jobs that we are now finding tablets are better suited to do.

Last week I looked at the adoption of the iPad by a growing number of enterprises for specific mobile workforces like field force and sales force automation. In many business related scenarios we are seeing the iPad step in and take the place of notebook PCs primarily because it is better suited for the specific task at hand. Enterprises are finding that for their most mobile workers the iPad is a better tool for the job than a clamshell notebook.

Late last year I wrote in my TabTimes column about how small businesses are using iPads for things like point of sale retail and even mounting an iPad for interactive product/ media placement. I even talked about some examples where restaurant owners were going digital and integrating iPads for the uses of taking orders, showing pictures of menu items to customers, and adding other relevant information for customers to make dining decisions. In both those later use cases the job could have never been solved by a traditional clamshell PC because who wants to hang that device to the wall at retail or walk around a restaurant holding a clamshell notebook? This is at its core what I mean when I say that tablets will go where PCs can not. This is what I mean when I say that the tablet is the ultimate mobile PC.

Further to this point, I highlighted yesterday in an article how the iPad makes the perfect learning companion. I have been very vocal about how touch computing removes barriers to computing presented by mouse and keyboards and therefore are better tools for learning for all ages but kids specifically. We have been using PCs in the classroom because they were the only tools available. Now there is a better tool, the iPad, and it will find itself fitting into educational environments better than the PC ever could.

The list goes on from legal firms, to financial management firms, to hospitals and doctors, pilots and airlines, public safety, and more, who are all finding that the iPad is better suited than a clamshell PC for their specific computing needs. Consumers are waking up to this reality as well.

Although, the notebook PC is portable you don’t typically see consumers move around, walk around, or stand up and use their notebook. This is because the form factor lends itself to a desk or a lap where the screen sits at arm’s length away. Tablets are very different. Consumers are comfortable using them while standing, walking, sitting on the couch, laying in bed, in the bathroom, by the pool, at the beach, in the kitchen, etc. The tablet is not designed to be viewed at arm’s length and because of that our relationship with this form factor changes. We can use it in different ways and more importantly take it places we would not or could not take our clamshell PCs.

I would argue the tablet form factor lends itself to more mobile computing use cases than a clamshell notebook. Because when consumers use a clamshell notebook they are not truly mobile–they are stationary. Whereas one can actually use a tablet and truly be mobile. I know I am tweaking slightly the classically held definition of mobile computing. However, due to the nature of tablets impact on the market I believe the traditionally held definition of mobile computing needs to be challenged.

The PC, tablet, smart phone, and perhaps something new down the line, are all tools to get jobs done. Each one has its place and each will remain relevant in some way shape or form. However, when it comes to mobility the tablet is mobile computing in its purest form.

The iPad: The Perfect Learning Companion

If we are honest with ourselves we have to admit that our country’s educational system has some serious fundamental issues. Our educational infrastructure is ranked 23rd in the world and seems like it declines even more every passing year. For a country that has always prided itself on progress our educational system has progressed very little. Apple and the iPad could stand a chance to change all of that. If the powers that be are smart, they would jump on the iPad bandwagon and begin integrating it at every level–especially elementary school.

Credit - OnlineEducation.net

I came across a recent info-graphic from the folks at OnlineEducation.net which visualizes quite a bit of good data about the state of US education. The graphic shows the bad and then presents some of the hopeful points from successful iPad trials in schools. The most encouraging statistic so far shares that through multimedia platforms student interest and retention goes up 25%. I encourage you to check out the full info-graphic here.

As much as I believe the iPad, and tablets in general, present one of the most exciting advancements for education in some time integrating it successfully will not be easy. For this to work, the system has to change and we need to begin to think more creatively about how we educate our youth.

One of the most important and fundamental principles that has at least been acknowledged over the past 20 years is that not everyone learns the same way. My 8-year-old, for example, has no problem learning through repetition and busy work. For her the system works. There are of course ways the system can develop and be more effective even for her learning style but the point is it works. For my youngest, who is now seven, the system does not work. She learns very differently, she learns through interaction and engagement, needs more hands on work filled with examples, and more importantly (just like me) she learns through trial and error most effectively. She gets frustrated with the current systems process but that doesn’t change the fact that she is hungry to learn. She simply needs a better tool. She is not alone.

That is why I have been integrating the iPad into both their learning processes since it first came out. That is why I stated in a previous column, as well as in my TIME column, that I believe the iPad is one of the best investments in a child’s future. You can choose to agree with me or not.

As I stated earlier, the system needs to be reformed. The iPad, and technology in general, present the best opportunity at a fundamental level to re-build our current system. It won’t be easy but there are several keys required for this to work.

Integrate Technology Early
Getting kids started early with technology is key. We want them to be comfortable and embrace technology as a part of their lives. This doesn’t mean they need to be entertained in order to learn but rather technology presents a way for them to engage with what they are learning in ways not possible before.

As we understand and experiment with how best to integrate things like the iPad into the classroom, we will make progress in better understanding the right approach and educational philosophy. The key is not for educators to be afraid of this change but to embrace the iPad as a new tool in their toolbox to better lay learning fundamentals and prepare our kids for the future.

We Need New Software
The second thing that needs to happen is dedicated software or apps for teachers and kids at every learning level. We are constantly taking steps in this direction but the software development community has yet to fully catch on and take this category as seriously as they should.

What we need is something akin to a fund, whether a specialized VC fund or government grant fund, to encourage our best and brightest software developers to use their talents and invest not just in gaming apps but education apps as well.

Apple Needs to Lead
Apple has taken a leadership position with the iPad and we need them to do so with their educational strategy as well. Luckily this is exactly what they are doing. This section of their website is dedicated to providing resources and education on using the iPad in education.

Apple is continuing to develop a dedicated ecosystem around the iPad and education. iBooks Author and iTunes U are good examples of Apple continuing to invest and focus on this area. As Apple actively engages the academic community, I hope we continue to see a mass of quality multi-touch textbooks as well as educational apps for every subject at every learning level.

The one area I would personally like to see more progress is in the app curating part of the iTunes App Store. There are so many apps that “app shopping” can become a burden. Apple already curates some areas of this with their “Apps For” categories. It would be great to see a more expansive curating process for education like breaking out apps for learning by age, or subject, or topical interest.

Teaching Teachers
Lastly, we need to teach our teaches as well about the benefits of using technology and specifically the iPad in the classroom. My wife is a teacher, and she like many of her friends who are teachers, needs a little help when it comes to technology. Generally speaking, they are not the tip of the early adopter iceberg.

Along those lines having courses at the college level or as a part of the teaching credential process on using things like the iPad would be extremely helpful. I assume that over time this will happen but hopefully it happens sooner than later.

Our teachers are valuable assets to this nation. Empowering them with the right tools to educate and encourage our youth is a legacy the technology industry needs to focus on.

For further interesting reading I encourage you to check out this online Ning social forum that was created for teachers to share stories and leaning experiences on using iPad in the classroom. http://ipadeducators.ning.com/

The Mysteries of Office 15

As Microsoft works on the next release of Windows, it has been remarkably forthcoming about its details. The Building Windows 8 blog has not only laid out the changes in the new version, but the thinking behind them.

Office logoBut Microsoft has said almost nothing about the new version of Office it is developing in parallel with Windows 8. It has distributed an early version to a select group of testers, but wrapped it in a non-disclosure agreement. We’re not likely to get the full details on Office 15 (a development name unlikely to be used for marketing) until a public beta is released this summer.

The new Office is a big deal, perhaps the most important release in the suite’s history because Microsoft has to pull off a number of difficult and contradictory things. On one level Office and its associated back-end components such as Exchange and SharePoint are both mainstays of enterprise technology and by far the most important source of Microsoft profits. The last thing enterprise customers want to see is a drastic change in Office.

At the same time, Microsoft must deal with a revolution in user devices. Conventional PCs are giving way to tablets and, to some extent, smartphones. Even in the enterprise, where desktops and laptops will continue to rule for a long time, mobile executives and field workers are depending more and  more on tablets and phones.

Office as it exists today is a catastrophe on any sort of touchscreen device, let alone one with a 10″ or smaller display.  Starting with Office 2007, Microsoft began replacing Office applications’ traditional cascading menus with a “ribbon” of choices. For a traditional mouse-driven user interface, this is probably an improvement, but it’s no help for touch.

The Word 2010 ribbon
The Word 2010 ribbon

 

 

 

 

 

The little icons on the ribbon (above) are too small to hit reliably with a finger, and most of them open a window or drop-down with additional icons or menu choices. In addition to the difficulty of navigating this clutter by touch, the ribbon occupies an amount of real estate that is intolerable on a tablet, let alone a handset. And Office as it exists today is way, way too big for the limited storage capacity of tablets.

Still, the richness of functionality that all those icons represent is the essence of Office. It’s true that many consumers never use 90% of the functions, but in a business setting, complex options such as edit tracking, table of contents creation, and mail merge are often regarded as essential. It’s not at all apparent how this sort of rich application can exist in a simplified, touch-optimized user interface like Metro, which will be the default paradigm for Windows 8.

It seems likely that Microsoft will end up with two versions of Office, a classic UI for traditional PCs and a stripped down and simplified Metro UI for tablets. How seamlessly can these two versions co-exist? Will the simplified version be able to display complex content correctly (this has historically been a problem with all programs that purported to offer limited editing of Office files)? How do you even begin to make Excel useful on a tablet? Can  Microsoft developers find a way to bring full offline functionality to Outlook without downloading a multi-gigabyte database?

This is only the beginning of a very long list of questions about how this new two-headed Office should work. And it doesn’t even touch on the question of how much Office functionality will be available in the version that is to run on tablets powered by ARM rather than Intel processors. (Intel users will, in theory, have the option of running older, classic versions of Office. ARM users will not.)

Depending on how strictly testers adhere to their NDAs (and how serious Microsoft is about enforcing them) we may begin to get some answers soon. A version of Office that makes business users productive with their key applications could be a big competitive advantage for the forthcoming Windows tablets. But making this work will be one of the biggest challenges Microsoft has ever faced.