Big-Box Retailers are Not Helping PC Sales

Last week, I wrote about the “softer” and arguably some of the more important PC attributes. Toward the end of that column, I threw out there a few examples of how U.S. big-box retail isn’t helping market those softer features. I want to dive a bit deeper into that this week as I think U.S. big-box retail shares a large part in the decline in PC sales and outline why I believe that. I will start with a little background.

I’ve been involved in and around electronics retailing since 1993 when I worked for AT&T Computer Systems then with Compaq in the late 90’s when they were #1 in consumer PCs. Back in those days, U.S. retail for computers looked very different than it does today, primarily a combination of big-box electronics stores, regionals, department stores, and office super stores. Manufacturer stores and online really didn’t exist. My how things have changed. E-tail is huge (Amazon), manufacturer store(s) (Apple) are lauded, only one national electronics retailer is still alive (Best Buy), mass merchants have aggressively entered the space, and clubs are as aggressive as ever. And, of course, there’s Microsoft and their stores.

What hasn’t changed in 20 years is just how poor the PC buying experience is in the big box retailers…… and that poor experience is negatively impacting sales at a time when the industry can least afford it. Big box retail does best when the category has been established and there is minimal change. In the PC world, everything is changing. Windows 8 brought a brand new UI that had not fundamentally changed since DOS. Gestures and PC display touch is new too. Let’s not forget about convertibles and hybrids, all new. How did big-box retail respond? The same way they have for the last 20 years.

Big box retailers responded by selling more end-caps to manufacturers, they added more demo days with manufacturer’s reps and did more promotions….. and it’s not working. It’s not working because fundamentally there exists a massive disconnect between what consumers want to and need to know about the latest generation of PCs. I’ll use Windows 8 notebooks and convertibles as an example and drill into that experience.

As we all know, Windows 8 brought with it a new, multi-mode UI and a new gesturing system that is used with mice, trackpads, and touch displays. Even Microsoft acknowledged recently it took a few hours for consumers to get comfortable with Metro. Windows 8 also brought instant on when paired with the right hardware. A consumer may even want to try out instant on and even compare certain notebooks. New notebooks are also bringing better battery life with thinner and lighter designs. To gauge how heavy the system is, you would want to pick it up and maybe carry it around. Maybe you would want to compare notebooks and how quickly the Ultrabook boots versus the $299 notebook.

How many times have you walked into a big-box retailer and walked down the notebook aisles and saw Windows 8 notebook PCs that:

  • Shells with no electronics inside
  • Turned off
  • Error messages on the screen
  • Not connected to the internet
  • Running a demo loop that required a retail password to interact
  • Had unsavory data visible from a prior consumer
  • Batteries removed to protect from theft
  • Tied down with security wires and could not be lifted
  • Touch display and backlit keyboards not merchandised

I am asking the question rhetorically because I know the answer. We all do. All of us have experienced this. I’ve heard all the reasons why big-box retail provides this kind of experience for the last 20 years. The reasons typically involve profit margins, security concerns, and the challenges of managing a distributed workforce, etc. Interestingly, I never see the above examples at an Apple store. Never, ever. I can sit at the Apple store there for hours and literally do a test drive like I would a car. I’ll bet Apple would let me download apps if I asked.

The unfortunate outcome is that the big-box retail experience is actually playing against increases in Windows 8 sales. The stores just do not provide, for many, the environment that meets the needs of someone trying to buy a new Windows 8 notebook. Consumers need a way to “test drive” Windows 8 and big box retail isn’t delivering. I believe one of the consumer reactions is to not buy a new Windows PC because they deem it risky. What do they buy instead? One of the consequences is that it helps nudge the consumer to buy a $199 smartphone or tablet which, when weighed against the big box retail experience, is a much lower perceived risk than buying that new PC.

iPhone 5 Versus Galaxy S4 A War Of Less Versus More

Last week, within the span of 24 hours, the two dominant players in the global smartphone wars released…not new smartphones, but new commercials. Both were very well done. They are also very different. Both ads reveal the core differences between Samsung and Apple, and possibly between Android and iPhone users.

First up, Samsung.

Now, the latest iPhone commercial from Apple.

Corporate Values Revealed

Apple’s latest iPhone ad is sixty seconds of creamy, delicious awesomeness. The commercial spurns crass marketing appeals. Rather, it uplifts us, revealing that life is spread over an infinite number of sparkling moments which may occur at any time, at any place, and all ready to be captured forever, thanks to Apple.

The images are so powerful, so palpably iconic – and so emotionally directed – that words only get in the way. Indeed, there are almost no words spoken or presented until the very end: “Every day, more photos are taken with the iPhone than any other camera.”

Contrast Apple’s focused, less is more approach with Samsung’s newest commercial. It starts loud and bold, the music of Vivaldi framed with brash, confident slogans.  The Samsung ad shows off the device’s camera, the screen, the speakers, bludgeoning the viewer with an audio and visual assault clearly meant to match the power and functionality of the device itself.

The Galaxy S4, the ad suggests, is all about…more. More display. More sound. More features. More of everything.

For Apple, less is more. Emotion trumps function. Not so with Samsung – and by default, Android. More is more, and function – not emotion – matter most. More is better. More is bigger, bolder, louder, crisper, more functional. More is more.

Less Versus More

Which ad is best? Standing on their own, that’s easy: Apple’s ad is great while Samsung’s is only good. Yet on the more important question – how will each new ad help its respective company win the smartphone wars – well, that’s harder to answer. After all, design, innovation, product focus, global supply chain, carrier relationships, retail footprint, content, apps and services are all extremely vital to the two combatants, no matter how good or bad the advertising.

However, on the values level – emotion versus function, less versus more – I suspect this is a war without end.

For Apple, there must always be that deep emotional connection between the user and the product. The product should uplift, possibly ennoble the user. Apple products, as their commercials reveal, strip everything away until the end result is (near) perfection. Less is more.

Score one for Apple.

But this value, while it resonates with many, will not convince everyone. The global smartphone market is big. Really big. It’s already over 1 billion strong and growing. Smartphones are now outselling feature phones. It’s wise to assume that before this decade is out at least 2 billion and potentially 5 billion people will possess a smartphone. That is a staggering number, nearly unparalleled in product history.

Do five billion people on this planet consume wheat? Corn? Meat? The scope of the smartphone market is nearly incalculable.

These devices, then, like cars, like the PC that sat on our desk for years, like food, must serve a purpose – many purposes, in fact. I already use my smartphone to write blog posts, monitor my finances, track my fitness, edit presentations and outline my next book. Soon, I will use it as my car key, house key, credit card, debit card, glucose monitor. What next? I can’t say but I know my next device must offer more.

Score one for Samsung.

The Smartphone Wars Continues

It seems unlikely that any rival or any new technology, Google Glass, for example, is going to unseat Samsung or Apple anytime soon. Expect these two companies to remain the dominant “personal computing” companies through at least this decade. They will battle it out in the marketplace and in the courts. They will fight over suppliers and content licensing. They will seek to win on pixel counts, integration, UI, features, price and innovation.

But I suspect the biggest difference between the two will remain just as it has been revealed in their latest commercials: Apple will remain focused emotional appeal, a less is more approach, and on what the product means to you. Samsung will stay focused on adding new features, increasing old specs, and promoting what their product can do for you.

These are core values, deeply held, and unlikely to change. Which side you choose likely reveals far more about you than simply which platform you prefer, iOS or Android.

Android’s Leaky Bucket

John Paczkowski over at AllThingsD covered a report written by Carl Howe, VP of the Yankee Group. Carl makes a bold statement, indicating iPhone ownership in the US will exceed Android US ownership by 2015.

Carl has developed an analogy using the idea of a leaky bucket. In short, he proposes that if platforms are a thought of as a bucket and their buyers comprise the water that fills it. Therefore how "leaky" a bucket is refers to a consumer intent to buy something else. What Carl's consumer survey research shows is that the Android bucket is leaking faster than the iPhone bucket.

A couple of stats to highlight from the Yankee Group survey.

  • 91 percent of iPhone owners intend to buy another iPhone
  • 6 percent plan to switch to an Android device with their next purchase
  • 76 percent of Android owners intend to buy another Android phone
  • 24 percent of Android phone users plan to switch to another platform
  • of those professed (Android) switchers, 18 percent plan on buying iPhones.

While 76% plan on remaining faithful to Android, 91% plan on remaining faithful to the iPhone. Carl's point is that the Android bucket is leaking faster than the iPhone's.

So ultimately platform loyalty is the key indicator here from a sustainability standpoint. The key to Carl's theory, however, will be the decisions of the lower end and new smartphone buyers, not necessarily purely switchers.

I'd again argue that the anticipated behavior of both the lower end market, who probably bought a cheap or free Android devices as their first smartphone, along with smartphone intenders, favors Carl's theory. How many smartphones on the market will be able to compete with a $99 subsidized iPhone 5? Probably only the Galaxy S3, arguably.

I'm not sold on the idea that everyone in the US who wants an iPhone has one. However, I'm also not convinced that the category is fully mature from a consumer adoption standpoint. What I specifically mean when I say that is, i'm not sure the market has fully experimented with different devices, platforms, software, etc., in order to fully define their needs, wants, and desires. Once this happens we will truly see a much clearer picture of platform share and sustainability.

One thing our research continually shows, as does the Yankee Groups and a host of others, is that once consumers get into the Apple ecosystem, they rarely leave.

Which makes one single point perhaps the most significant. The key for Apple is not necessarily to get consumers to buy all their products at this very moment. Rather, to just get consumers to buy one, which acts as the gateway to their ecosystem.


* Caveat. Surveys are, of course, not always an exact indicator of future behavior. However, I have seen more than a few solid data points that support this data. Also, without knowing specific device plans of Apple or competitors the timing is also hard to predict. What Carl proposes could happen sooner or later. This is why I mentioned the market adoption cycles and experimentation still taking place.

The Soft Improvements in new PCs Could be their Biggest Draw

Last week was an ugly week for the computer world. The IDC figures that came out for Q1 said that it was the biggest contraction the PC market that had ever been seen since their tracking began. The best Apple could muster was a slight YOY decrease in Mac sales, which looked great compared to the rest of the industry. I spend a lot of time as an industry analyst dissecting the “why’s” and thinking about what it will take for the PC market to rebound. I talk to other analysts too, like Tech.pinion’s and Creative Strategies’ Ben Bajarin, and we’ve had some recent conversation that helped clarify the PC conundrum. I’m convinced that the “softer” improvements of new PCs could be the most important, yet under-communicated and understood reason to buy a new PC. By “softer” I mean those things that don’t have hard metrics or measurements. I want to peel back the onion a bit and let’s start with a little background.

Intel estimates that there are 500M computers actively being used that are over 4 years old. Think of just how many thick, chunky and poor experiences that equates to. If that’s your PC experience and haven’t experienced a new one, I can see why a new tablet or phone will be your next purchase. Consumers don’t really know the reality that new PCs offer a significantly improved experience and while I’ve already hit the “hard” reasons to buy a new one, I want to hit on the softer side. Let’s start with starting up a PC.

Waking an old PC from sleep or even worse hibernation is like starting an old tractor. With a Vista-based PC, it can take nearly three minutes to get it to the point you can actually do something with it. Compared to a phone or tablet this is ridiculous, which is one key reason consumers gravitate to the tablet and phone. The reality is, though, that the latest notebooks based on Intel and AMD technology wake up almost instantaneously. Intel’s Atom designs are literally instant-on like the best tablets and notebooks based on Intel’s Core and AMD’s Trinity with SSD storage isn’t too far behind. I think many consumers would be surprised just how far the PC has come.

Similar to “boot” time is the advancements in application load time with a new PC. The human brain amplifies wait time, and before smartphones and tablets, consumers settled for the lousy experience of an old PC. SSD’s and software optimizations changed the expectations when consumers used their phones and tablets. This put the burden on the PC industry to improve the experience, which it has done very well. App load time is nearly instantaneous due to advances in SSDs, software cache, and application architecture. Let’s move to physical UI.

Older PC notebooks have small track pads, typically three buttons and don’t support gestures. With this configuration, you really need an external mouse or trackpad to get anything old touchpaddone. Compared to a new PC, this is archaic, but if a consumer never experienced it, how would they know? Windows 8 PCs with high quality touchpads are a lot different. Systems like the Dell XPS 13 have a large trackpad without buttons and support all the Windows 8 gestures. We have to all thank Apple for raising the experience bar here. Touch is another great adder in new Windows PCs at prices as low as $499. How many times have you reached up from your notebook to touch the display? While Apple has ignored this so far on Macs, I believe it’s inevitable that touch display becomes the $499 PC standard in 2014.

Fan noise is another “soft” feature of new PCs that gets overlooked. I had the first MBA and it was loud as the fan seemed to always run. Today, even the thinnest Mac, Ultrabook or premium ultrathins barely make a sound. This has driven by many factors, including a lowering of the CPU TDP from 35 watts to 17 watts but more than that, a major decrease in idle power draw. There has been literally a 5X improvement in idle power draw and the result is the fan rarely kicks in. See a pattern here? Like a tablet.

Backlit keyboards are another feature that has made its way to the $499-$599 price point. The feature literally determines if we can use the notebook in the dark or low light conditions on a plane or in bed. Old PC notebooks don’t have this and new generation Windows 8 notebooks and MacBooks do. While some scoff at the importance of the feature, research I have conducted shows consumers value it and will pay dearly for it. Again, it is one of those “soft” features that can make the difference.

The final “soft” variable I want to discuss is design. Led by Apple, the entire PC industry raised their game in the last five years. Cheap looking, shiny ABS plastic has given way to magnesium, aluminum, textured plastic and rubberized surfaces on the newer class of notebooks. If you are reading this on your five year notebook, look and compare how it looks versus something you can buy today from $499-999. It’s ugly and you know it.

While these “soft” improvements in new PCs are difficult to measure, I believe they could be the strongest reasons to buy a new PC. Whether it’s improvement in looks, their silence, or the speed at which they start programs, newer notebooks are light years ahead of their predecessors. The PC industry has been spending a lot of money on this, but challenges exist. The first is legacy. Macs had such a premium perception for so long that it’s hard for consumers to accept that a Windows PC can have the feel of a tablet or smartphone. Therefore it could take a while for the new reality to sink in. Retailers are a big part of the problem, too. How many times have you walked into “big box” retail and the PCs weren’t turned on, weren’t connected to the internet, had an error message on the display or had some silly protection device that gets in the way of the trial. Net-net, the PC industry needs to shift a lot of their marketing spend to increasing awareness and motivating trial to point out the softer improvement in PC or face a very painful few years.

Apple In Perspective

Apple has been taking a real beating on Wall Street and in the press lately. But are we losing our long-term perspective by focusing so intently on quarterly results?

Stock Market

The Stock Market is a predictor of future growth, but it is hardly infallible. Seven months ago the market was predicting spectacular growth for Apple. Today it’s predicting almost no growth at all, worse than Dell and HP. Was the market wrong seven months ago or is it wrong today? Or both?

Growing Markets

Take a broader look at the computing markets. We are transitioning from notebook and desktop computers to mobile phones and tablets. No one is in a better position to benefit from this changeover than Apple. They were first-movers in both phones and tablets and they continue to devour the bulk of those sector’s profits. Apple’s path is not unimpeded, but they still have the inside track.

iPhone & iPad Sales

Last quarter, Apple sold 37.4 million iPhones for 7% growth and 19.5 million iPads for 65% growth.

Remember all that talk about suppliers cutting orders and how it meant that Apple wasn’t selling as many phones and tablets as before? Yeah, not so very much.

China

“iPad experienced very strong year-over-year growth in every operating segment, particularly in Greater China and Japan where sales more than doubled year over year.”

The highlights for the quarter in China were that iPads grew 138% year-on-year, and we set new records for sell-through both for iPhone and iPad during the quarter.” ~ Peter Oppenheimer

Remember all that talk about Apple not doing well in China? Yeah, not so very much.

Business

“…the Good Technology’s data that says that iOS accounted for 77% of all their activations by their corporate customers. Now that would not include BlackBerry, but it would include all the other guys. and so we seem to be doing really well and honestly, I don’t see the recent announcements changing that at all. I’ve seen more and more people developing more and more custom apps for their businesses on iOS to be used on iPad and we’re very, very bullish on it. As a matter of fact, just to quote you some numbers, iPad now is being used in 95% of the Fortune 500 and what’s even more impressive probably is on the global 500 companies, we’re now in 89%.” ~ Peter Oppenheimer

Remember all that talk about Apple’s iPhone and iPad not doing well in business? Yeah, not so very much.

Unique Advantages

Critics dismiss Apple as un-innovative, passé and niche. But Apple retains distinctive differences that give it unique advantages in the the newly emerging mobile markets:

— App Stores in 155 countries

— iTunes in 119 countries

“Today, our iTunes store offer the broadest combination of geographic reach in content depth in the industry, and they surpassed quarterly billings of $4 billion for the first time ever in the March quarter, that’s a $16 billion annual run rate making our digital content stores the largest in the world. The quarter’s iTunes billings translated to record quarterly iTunes revenue of $2.4 billion, up 28% from the year ago March quarter with new quarterly revenue records for music, movies, and apps. ~ Peter Oppenheimer

— 300 million iCloud users

— Highest loyalty and customers satisfaction rates in the business

“A recent study by Kantar measured 95% loyalty rate among iPhone owners, substantially higher than the competition, and iPhone remains top in customer experience. Last month, we were very pleased to receive the number one ranking in smartphone customer satisfaction from J.D. Power and Associates for the ninth consecutive time.” ~ Peter Oppenheimer

“The most recent survey published by ChangeWave indicated a 96% satisfaction rate among iPad customers.” ~ Peter Oppenheimer

— Developers

…(W)ith App Stores in 155 countries that encompass almost 90% of the world’s population, our developers have created more than 850,000 iOS apps, including 350,000 apps made for iPad.”

“Cumulative app downloads have surpassed 45 billion and app developers have made over $9 billion for their sales through the App Store, including $4.5 billion in the most recent four quarters alone. Canalys estimate the sales from our App Store accounted for 74% of all app sales worldwide in the March quarter.”

“…(W)e are now paying very happily our developers more than $1 billion every quarter.” ~ Peter Oppenheimer

Revenues, Profits And Margins

Apple had $43.6 billion in revenue. What other company had comparable revenues?

Apple had $9.5 billion in profits. What other company had comparable profits?

Apple had 37.5% margins which is astonishing for a hardware company and compares quite favorably to the margins of both Google and Microsoft, which are primarily software shops.

Screen-Shot-2013-04-25-at-4-25-10.06.04-AM

Courtesy of Asymco

It seems that Apple compares favorably to every other company in the world other than the Apple of 12 months ago.

iPhone 4

“Now, that said, we see an enormous number of first time smartphone buyers coming to market, particularly, in certain countries around the world. And so what we’ve done with that is and we started last quarter is we’ve made the iPhone 4 even more affordable and which has made it more attractive to first time buyers and we caught up on the – our supply – demand towards the late in the quarter last quarter and we are continuing to do that in other markets. And we believe that the phone or the price point that we are offering is an incredible value for people, that allows them to get into the ecosystem with a really, really, phenomenal product.”

One thing that hasn’t been getting enough attention, or rather hasn’t been getting the right kind of attention, is the continued sales of the iPhone 4. The iPhone 4 is now over two and a half years old but it continues to sell well in developed markets like the United States and Europe and in developing markets like China, India and Brazil. How can this be? Is there any other phone manufacturer who could successfully sell a phone that is two generations and two years out of vogue?

The iPhone 4 is proof that buyers are buying Apple’s ecosystem, not just their hardware. So long as Apple maintains a lead in integrating hardware, software and services, they will maintain an edge in mobile computing.

And as an added bonus, while the iPhone 4 may be bring the iPhone’s average sale price down, the sale of this older technology should be bringing the iPhone’s margins up.

Apple’s Long-Term Outlook

“We are managing the business for the long-term and are willing to trade off short-term profit where we see long-term potential. The iPod is a great example of this. When we launched it in 2001, its margins were significantly below the margins of Apple at that time.

Four years later, the iPod and the iTunes Music Store comprised half of Apple’s revenues and inspired us to build the iPhone. The iPad mini is another great example. We have priced it aggressively and its margins are significantly below the corporate average. However, we believe deeply in the long-term potential of the tablet market and think that we’ve made a great strategic decision. We’ll only make great products and this precludes us from making cheap products that don’t deliver a great experience.”

If you look at Apple’s numbers for this quarter and the next, you might think you see a company in decline. But if you look at Apple’s numbers over the fiscal or annual year, you see anything but decline. Let’s put this in perspective: Would you rather have Apple’s profits or those of Google, Amazon, Microsoft or Samsung? Once you put it that way, the answer as to how Apple is doing becomes clear.

Apple dominates the most dominant tech sectors of our times. And unless I’m gravely mistaken, that’s a good thing. A very good thing.

Why Internet Sales Taxes Are Inevitable

Later today, the U.S. Senate will consider, and probably pass, a bill that allows states to collect sales taxes on online purchases shipped from other states. Though its fate in the rabidly anti-tax House is uncertain, sooner or later this bill or something like it will become law. And it’s about time.

The taxation of online, and earlier, mail order, sales has long been a mess. In 1992, the Supreme Court said that states could only tax the sales of companies that had a physical presence (or “nexus”) within their jurisdiction. The court recognized this would cause a lot of problems and more or less begged Congress to fix them, a pleas that has gone unanswered for two decades.

Beyond general anti-tax sentiment, two arguments were raised against allowing states to impose taxes. One is that complying with the crazy quilt of state and local sales tax rules and rates was simply too complicated for sellers. The second, which arose with the birth of 0online commerce in the late 1990s, was that taxation could kill a promising new form of business in its cradle.

The first argument is still being made, most vociferously by eBay. But it no longer makes much sense. A database can quickly tell a merchant whether a given product shipped to a given address is subject to tax and at what rate. And at a time when Amazon.com is threatening to devour traditional retailing, the argument for infant-industry protection is ridiculous.

Indeed, it is the success of Amazon and other online sellers that make new tax rules inevitable. As long as out-of-state sales consisted mainly of Land’s End polo shirts and L.L. Bean duck boots, the loss of taxes was annoying to states, but tolerable. No more. I’m probably ahead of most shoppers, but if it’s not something I have to check out physically, if I don’t have to try it on for fit, and if it isn’t perishable, I buy it online. Yesterday, I received four separate shipments from Amazon (one of them actually a book, albeit a used volume I would have had great trouble finding in a store.) With shoppers flocking online, states can no longer forgo the revenue.

The Senate bill would let the jurisdiction where the buyer lives collect the taxes. Adam Thierer of George Mason University’s Mercatus Center favors an alternative system where taxes would be collected by the seller’s state. This does have the advantage of being considerably simpler for sellers, since they would only have to pay taxes to their home jurisdictions and would only have to follow one set of rules. But I fear it would lead to large-scale gaming of the system, with sellers rushing to establish headquarters in the few states, such as Oregon and New Hampshire, that do not impose sales taxes. (Thierer argues that competition among states to attract business with lower rates would be a good thing.)

The complexity of having to distribute tax collections to hundreds of state and local governments is a legitimate complaint about the coming system. But I suspect the ingenuity of American business  will spring to the rescue  with the development of services that will handle the chore for you. Come to think of it, who would be better able to use its cloud computing expertise and vast knowledge of state and local tax regulations to provide such a service than Amazon?

 

 

FileMaker Can Settle the iPad Productivity Argument

Filemaker screenshot Of all the endless arguments that roil the tech world, there is none I find more tiresome than the endless debate over whether the iPad can be used for “real work.” My iPad has been an indispensable part of my working toolkit since I bought one on the day the original model shipped in 2010. Over time I have learned what it does well and what it is not so good at, but I have never doubted that this go-anywhere tablet made me a lot more productive. For those who still need convincing, however, the results of a new survey from FileMaker should help. Of course, there’s something more than a little self-serving about FileMaker promoting its success on iPads and iPhones–the database management software is owned by Apple. But the survey of 499 customers –I’m surprised they couldn’t find one more to make it an even 500–sheds some interesting light on how tablets are being used in business.

The most striking finding is the extent to which devices are being used from within an organization’s home network rather than out in the field. (The survey unfortunately does not distinguish between iPhone and iPad use, but a Filemaker spokesperson says the majority of the respondents used iPads. Certainly, the Filemaker Go mobile app is more comfortable on a tablet, as pictured above, than on a phone.) Those survey said that 59% of the time they connect to databases over a local area network rather than over the internet or a virtual private network. Unsurprisingly, just over half said the mobile database was being used to replace pen-and-paper processes and that the most popular taks were CRM, inventory, and invoicing, quotes, orders and estimates. It’s a bit ironic that the iPad is pulling off the original mission that Microsoft saw for the Windows Tablet PC when it released it to general disinterest a decade ago.

It’s hardly surprising that the iPad is succeeding where the Tablet PC failed. Tablet PCs were either laptops that converted to a slate-like configuration with a tricky hinge or a few pure slates that were far bigger and heavier than today’s tablets. Battery life fell far short of the all-day usage we have come to expect and the resistive single-touch displays had severe limitations. Worse yet, except for a few applications aimed at verticals such as health care and some customer line-of-business apps, Tablet PC users had to peck with their fingers or styluses at software that was designed for a mouse and keyboard.

FileMaker, by contrast, is a nice example of how Apple uses its software to drive its hardware business. The FileMaker Pro server and desktop versions run on both Mac and Windows (it’s Apple’s only paid Windows software product, but the FileMaker Go mobile gap is for iOS only.) But a key is they way apple made it extremely simple to deploy a FileMaker Pro application to iOS devices. It takes some database and form design skill to put together a decent FileMaker Pro app on the desktop, but once that is done, creation of a FileMaker Go touch-ready mobile version is a matter of pushing a couple of buttons. FileMaker Go apps are not free-standing iOS apps–you must have the fileMaker Go application installed. But they behave like apps and connect automatically and securely to the server or desktop database. You can use the app to read, edit, and create records and you can take advantage of the special abilities of mobile devices, for example, using the iPad or iPhone camera to fill a photo field.

It’s true that tablets are less than ideal for what are regarded as classic productivity applications. Writing or editing large or complex documents is somewhere between difficult and impossible. The display size renders tablets near-useless for any but the smallest spreadsheets.  An iPad is great for viewing a slide presentation, but terrible for creating one. At the same time, however, some imaginative software, such as the FileMaker Pro/Go combo, enables new uses of mobile devices, increasing the productivity of workers away from their desks (if they have desks to begin with) and sometimes replacing much more expensive and more limited specialized devices.

———

As a side note, the illustration at the top of this article is an example of a simple little database I created to catalog artworks in my house. I can go around the house to create the records  and snap pictures of the art (by the way, the first use I have ever found for an iPad camera.) Later I can fill in data I don;t have in my head from filed records.

 

Can Carriers Handle a Low-End iPhone?

There is a good discussion happening online at the comment that I want to comment on. Horace Dediu has written several good pieces on the job the iPhone is hired to do. In his latest installment he looks at the average revenue per user in numerous countries and distills that data to browser share on iOS and Android.

Screen-Shot-2013-04-23-at-4-23-11.21.37-AM

What the data highlights is the fact that right now the iPhone is the most valuable device for the networks that carry it. Carriers have been in a transition the last few years to move their value from voice to data. The key for carrier services going forward is to capitalize on the consumer consumption of their data services not their voice services. Therefore device which are excellent at consuming data services are highly valued. This, as Horace points out, is the reason the carriers are willing to pay the high price of the iPhone and subsidize it to their customers.

The key question remains to the other devices, like Android, which certainly don't generate the same ARPU as the iPhone (or specifically iOS). We know that Android devices are heavily skewed to the lower end of the market. This market certainly behaves differently and although they browse the web and consume data, the evidence shows the engagement is less than with iOS.

Android devices do not maintain the same ASP line as the iPhone and often drop in price and add promotions quickly, often within 3-6 months. The iPhone stands strong in its price and its value to the operators.

A key question here is that if the low-end of the market does indeed behave differently, and this part of the market is not as valuable to operators, then why should Apple cater to it? Either we believe that this market will always behave this way, or it is the device itself (meaning a lower-end, less capable device) that is causing them to behave this way. I've always found a fascinating question to be whether the low-end market behavior with engagement and data consumption would change if they used iOS.

Read:
The Job the iPhone is Hired to Do Part 1
The Job the iPhone is Hired to Do Part 2

Along these lines, Ben Thompson (@monkbent), on his site Stratechery, offered up more useful points to this discussion topic.

Ben brings out a point regarding the iPhone's role as a premium network device that I think is interesting.

"Take three quick examples: Verizon, NTT DoCoMo, and China Mobile. If the iPhone as “Premium Network Services Salesman” is the only explanatory factor,1 then all three should have been clamoring for the iPhone from Day One. Yet Verizon resisted for years, and NTT DoCoMo and China Mobile have yet to give in. In fact, the iPhone has generally launched on the 2nd or 3rd-place carrier in any given geography."

Read:
Why Do Carriers Subsidize the iPhone

This is true and a valid question. If the iPhone is a premium device driving ARPU and operator value/CapEx recoupment, then why are certain carriers holding out?

The answer, I believe, lies in the iPhones success being both a blessing and a curse. The device in its early days nearly took down AT&T regularly due to the network demands. Many of us remember how awful AT&T was here in the Silicon Valley for many years as a result of the network demands from the iPhone. Many networks, Verizon included, have quality of service demands in which I'm sure their concerns over their own network capacity are or were an issue. Verizon adopted the iPhone when they were ready and prepared (also after the AT&T exclusive was up obviously). I'm sure others will as well when they feel they are prepared.

There is no question that the iPhone drives value so I do not believe the lack of universal carrier support is completely or even largely a business model question. It is, in my opinion, an infrastructure question. The question is can the operator networks handle the iPhone?

In this theory and to my earlier question about the low-end. If Apple went low-cost and grew their market share substantially by catering to the low-end, bringing hundreds of millions of new iOS users onto the networks, I have a strong feeling it would put monumental stress on all current network infrastructure. Bottom line is, I’m not sure the carriers can handle a low-end iPhone.

The Next Evolution In User Interfaces

With the introduction of the iPhone, Apple introduced the touch UI and literally changed the way people interact with their smartphones. When they extended the touch UI to the iPad, it set in motion an industry stampede to create PCs, laptops, tablets, and smartphones with touch based interfaces. In the world of technology, this was a real milestone. For decades the way we navigated through our PCs was through a keyboard, mouse or Trackpad. While Apple was not the first to bring touch to tablets or smartphones, they clearly get credit for commercializing it and making it the defacto standard for next generation user interfaces.

But there were two products released recently that I have tested that I believe gives us an early glimpse at the next evolution of user interfaces. These, perhaps, will be just as ground breaking as the graphical user interface and touch UIs in the market today.

Touch Freedom

The first is a couple of gesture features that are in the new Samsung Galaxy S4 smartphone. The first is called Air View. If you are in the email application on the S4, you can just “hover” your finger over the email you are looking at and the subject line and first 2 or 3 lines of the email pops up. It hovers over the actual email line so you can see what the email is about at a glance and decide if you need to read it or just move onto the next to check it out. The Air View gesture only works on the email app now but the software community will likely get the tools to be able to use it on other apps shortly. This gesture alone is a game changer in that it takes limited information on a small screen and blows it up in context so-to-speak so you can gain more info on the item you are looking at.

The second feature is just as cool. It is called Air Gesture. Have you ever been working in the kitchen with a recipe and gotten your hands dirty yet needed to go to the second page of the recipe to get the rest of the details? Well with Air Gesture, all you do is wave your hand in front of the tablet and it moves to the next page without ever touching the screen. I often take my tablet with me to restaurants when I am alone on the road and catch up on the days news, or even read a magazine or book while chowing down. Often my hands are full with knife and fork and today I actually use my knuckle to touch the screen to open a page or turn it.

To be fair, Microsoft has had gesture based user interfaces on the Xbox for almost two years, but to date it has only been designed for game consoles and has not transferred over to PCs or mobile devices yet. Both of these features on the Galaxy S4 smartphone represent the first major shift to making gestures an integral part of a mobile UI. While these two gestures are only on the S4 today, I’m sure it will eventually find its way to Samsung’s Galaxy tablets perhaps later this year.

The other gesture-based technology introduced recently comes from Leap Motion. This pad like device is used on a PC and sits in front of the monitor and between the keyboard and turns Windows into gesture based UI for supporting software. It can also be used with a laptop via a USB dongle with the device sitting in front of a laptop keyboard. Leap Motion has seeded over 10,000 developers with SDKs to make their apps work with their Leap Motion Controller. After it ships this summer, we should start to see a good amount of leap motion enabled apps later this year. HP has considered this so important that they did a major deal with Leap Motion recently and HP has committed to using it in their products in the future.

Similarly with Kinect, what is appealing about Leap Motion is the way you can interact with a game in 3D. Just use your hands as the controller, or use it to add hand controls to manipulating 3D objects. However, with support from the software community you can imagine eventually being able to just wave your hand and turn Web pages or use your hands to mold pottery on the screen, etc. The key thing here is that the Leap Motion technology is an enabler and once the software community gets behind it, it could become the next major step in making a user interface more friendly and even easier to use then it is today.

The reality is that Apple, Microsoft, Intel and others are all working on gesture based UI technology and believe that gestures represent the next significant evolution in computing interfaces. In fact, Intel has a human factors project around gestures and while not much is known about it, I would not be surprised to see the controller for gesture UIs even part of the SOC in the future.

While many had hoped voice would be the next big thing in user interfaces, there is still a lot of work in this space to be done to bring it into mainstream computing. I have no doubt that voice commands, such as the one HAL used in 2001: A Space Odyssey will eventually be the main way we interact with computers. However, for now, the next evolution will be gesture based. The technology used in Samsung’s Galaxy S4 smartphone and Leap Motion will most likely help define how gestures may soon become a major part of the interface we have on all of our computing devices.

The PCs New Role as an Appliance

I have written and spoken often about my conviction that the role of the PC is changing. The personal computer as defined by a desktop and clamshell form factor was, for many years, the only PC in our lives. Now we have tablets and smartphones in our lives and they have usurped the value the market once attributed to traditional PCs.

On Friday I outlined how the traditional PC, by definition of desktop or notebook, used to be the benchmark for the health of the technology industry. Every year we looked at PC sales as an indicator for growth. This is why many in the media and pundits made such a big deal at all the recent news that PC sales have been slumping. On the surface it seems like a big deal but in reality it is simply a sign of the paradigm shift the technology industry is going through. One where ultra mobile devices like tablets and smartphones will define the future of personal computing.

A Shift in Value

When I was first learning to do consumer market research, one of the things I found most interesting was to discern where the consumer mindset found value. There is a great deal of mindset diversity in the consumer market as value is percieved differently across many segments and sub-segments. The key to understanding price points fundamentally lies at understanding what is valued and what is not.

It is my conviction that the traditional PC is not longer valued the same way that smartphones and tablets are in todays market. In fact I would argue that the true consumer market never really valued the PC in the first place. They valued the Internet the PC form factor brought them.

I say this because of the many observational studies we did in the 2003-2005 time frame where focused on consumer sentiment around desktops and notebooks–all Windows based. In these studies and rounds of consumer interviews several themes kept emerging.

The first was that most consumers did not feel knowledgeable about how to use their PC. It was clear there was a huge computer literacy gap between the early adopters and majority. Because of this many did not use very many applications on their PC regularly. Common tasks were browsing web, email, light gaming, word processing, instant messaging, etc. Light computing tasks were being done by heavy computing hardware. This is why I continually make the claim that in my opinion the traditional PC vastly over serves the mass markets needs with computing devices.

The other theme that seemed to emerge during our studies was that the PC had a very much love/hate relationship with many consumers. We heard many times about extremely frustrating experiences with technical problems or other issues that stood in the way of a delightful experience with PCs. I can’t tell you how many times I heard the phrase “sometimes I want to throw my PC out the window.” Think of the scene from Office Space and the copier, which they hated and later destroyed. This was a common theme I picked up discussing computing with the mass market.

There were experiences which were valued by the mass market in which the PC brought them. Things like email, the web, new ways of communicating, learning, etc. But the problem for the PC is the majority of experiences which are valued by the mass market are not unique to the desktop or notebook form factor. In fact some are vastly better on other devices.

The Appliance Mentality

All of this adds up to what I am calling an appliance like role for PCs. Appliances play important roles in the lives of consumer but not all of them play every day roles or even central roles. They have a specific set of uses and are used only when needed. Similarly the PC in the form of a desktop or notebook will likely be in a majority of homes. However, it will play a role and only be used as necessary. For this reason consumers will hold on to them longer, something they are doing arleady. But also will buy them more with a budget mindset not paying premium prices. This is why the coming low-cost revolution we see happening with PC prices fits right in line with this trend.

Of course the PC will always have value to some key markets but not the majority. This is why I think the “PCs are trucks” line of thinking is apt. Trucks are valued to some but not all. Those who know they need a truck for work or something else, know it and are willing to pay for it. This is where the premium price category will stay strong for many vendors.

Upgrade cycles are the culprit. Consumers don’t feel a need to upgrade, or its simply inconvenient or too difficult to move their data or programs. Whatever their reason it is clear that the desktop and notebook are pshchologically more like an appliance in nature. This means upgrade cycles are simply going to be longer in the 4-5 year range.

The bottom line is the PC simply has a longer shelf life. This is the new normal.

The PC Industry of the Past Is Not the PC Industry of the Future

We are, without question, an industry in transition. The 500 lb. gorillas who once dominated the technology industry are experiencing and undergoing major transitions and a new type of growing pain. And for many, this is extremley painful. These titans will rise or fall based solely on their ability to manage this transition and these new types of growing pains. So what is growing exactly? The opportunity.

From Business to Consumer

For the past 30 years, the computing industry only appealed to a small group of people–namely the business community. Many companies from Microsoft, IBM, Dell, HP, Intel, RIM, etc., got their start bycreating products and solving problems for a business user. What many of these companies are learning is that business users are as different as night and day than ordinary consumers. In fact, I specifically peg Apple’s turnaround to this observation. Apple has and always will be a consumer company. They simply struggled until there was a true consumer market. Now they find success where others have not simply because they have always had a vision of creating products for ordinary folk. Apple simply had to wait more than two decades for their true market to emerge. Now, emerge it has and it is billions strong.

A key point signaling this shift was the recent news about the PCs decline in Q1 sales. Who usually bought PCs in bulk in the first half of the year? It wasn’t consumers. It was businesses. In years past the bulk purchases of enterprise and business buyers helped offset the lack of consumer spending for PCs in this buying cycle. With business shifting to BYOD, it’s doubtful the first half of the year will yield the volumes it once did. What we are witnessing in clamshell PC sales is not really massive declines. It is simply the new normal.

The consumer market will dwarf the business/pro market by magnitudes. The PC industry of the past, is not the PC industry of the future. The opportunity has shifted from business to consumer and it is growing faster than many anticipated. Many were not prepared and the pain of this reality has been life changing for all PC vendors.

From Stationary to Mobile

We were not meant to sit at desks. Yet that is exactly the paradigm that desktops and notebooks brought. Innovations around mobile devices are among the most important innovations for the PC industry of the future. When we first learn to ride a bike we don’t just sit on it and not move. We take it out and explore the world. Smartphones and tablets deliver on a truly mobile computing vision and we are barely scratching the surface of mobile computing. There is still massive software innovation ahead and we still don’t have devices that truly know anything about us. Anyone who believes innovation is dead is wrong and lacks vision. We still have billions of new customers to bring into the digital age and they want innovative products, Many that have not even been invented yet.

At the moment, we are in an adoption cycle phase, not an innovation phase. Why should we expect revolutionary new smartphones, for example, when half the planet doesn’t even have their first smartphone? Do we expect revolutionary new cars every year or even every few? Until the advancements of hybrid technology the industry had hardly changed in decades. People don’t freak out and scream about the collapse of Toyota because they don’t release a revolutionary new car every few years. It’s not a perfect analogy, I admit, but I do believe the consumer market for automobiles brings out applicable insights for the PC industry of the future.

The companies I am not worried about and the ones who will be in the PC industry of the future understand mobilility and understand consumer markets. Right now that is a very short list.

This is also the crux for many who are experiencing growing pains. They have the wrong definition of mobile computing. Couple that with a lack of understanding of consumer markets and it is bad news for the traditional PC vendors unless they really get the mobile religion and deliver mobile products that meet the needs of all their current and future customers.

Touch Computing Is Touching Every Part Of Our Lives

We Live In Amazing Times

We live in amazing times. The modern smartphone (really, a portable pocket computer) is only 6 years old. The modern tablet is only 3 years old. Yet the combination of the internet, simplified touch computing, wireless data downloads and the availability of cheap, innumerable applications on demand, has wholly revolutionized what computing is and will become.

Affecting Our Lives

Touch computers are already a pervasive part of our lives:

49% of the entire U.S. population uses a smartphone. By 2017, the percent of smartphone users is expected to reach 68%.

Tablet ownership increased 177 percent over the past year.

Already, 23% of teens own a tablet.

Affecting Our Lifestyles

The effect on our lifestyles has been even greater:

Four out of five smartphone users check their phones within the first 15 minutes of waking up. 80% of those say it’s the first thing they do in the morning.

79% of smartphone users have their phone on or near them for all but two hours of their waking day; 63% keep it with them for all but one hour. A full quarter of of smartphone owners couldn’t recall a single time of the day when their phone wasn’t in the same room as them.

Mobile users can’t leave their phone alone for six minutes and check it up to 150 times a day.

25% of those aged 12-17 access the Internet “primarily” via a cell phone or smartphone. Among teens with a smartphone, however, 50% access the Internet primarily via the mobile device. Girls are more likely than boys to rely on their smartphone as their primary Internet access device.

More than 80 percent of consumers are multitasking while watching TV.

More people now watch TV and movies on tablets in their bedrooms than they watch them on TVs.

Dissolving The Digital Divide

Surprisingly – at least to me – black and hispanic teens are more likely to own a smartphone than their white counterparts. Some feel that the smartphone could be the tool that eradicates the digital divide. In any case, phones are now the new personal computers of our age, allowing the poor and the isolated to enjoy computing power that was formerly unavailable to them.

Multiple Screens

If, in 2006, you had predicted that individuals would own, not one, but three computers, you would have been laughed at. First, few needed three separate computing devices and second, even fewer could afford them. Yet today, twenty-six percent of consumers in the United States own a laptop, smartphone and tablet.

Let me re-remind you that the modern tablet has only been in existence for a mere THREE YEARS. If 26% of consumers in the United States already own the trio of smartphone, tablet and notebook, then the explosive growth of multiple screen computing ownership is only just beginning.

Touch Computing Is Only Just Beginning

Most technology observers look at phones, and even tablets, as maturing markets. I feel otherwise.

— Phones are just beginning to invade our lives. People who formerly didn’t need a phone – the young, the old, the technologically uninterested – are all adopting smartphones as their go-to computing device.

— People who formerly didn’t have any access to computers – the poor and citizens of third world countries – are also adopting smartphones as their first – and perhaps only – computing device.

— Where we used to own a single family computer, now every member of the family will want to possess their own personal tablet.

— Most people who own a tablet will own a smartphone too, and perhaps a notebook as well.

Our Lives Will Never Be The Same

Most technology observers seem to have a very poor grasp of economics and consumer behavior. They speak in terms of limited resources and assume that technological growth is limited. The truth is that we don’t buy what we need, we buy what we want. And a further truth is that when we want and value something highly enough, we shift our limited resources in order to find a way to obtain it.

In 2006, we only needed a single, cheap desktop or notebook computer. Today we expect and demand access to multiple mobile computing devices.

We don’t NEED tablets, but we WANT them and we’re going to find a way to buy and possess them. And smartphones are rapidly moving from the category of a WANT to something that we both WANT AND NEED in order to merely function in modern society.

Sales of mobile touch computers are about to explode and our lifestyles and our lives will never be the same.

Cord-cutters Beware: It’s Going To Get Expensive

Photo of cable cutting (Fotolia)The are many reasons why television viewers choose to cut the cord, to be among the 15% or so of Americans who get by without a cable or satellite feed. But probably the most important is the desire to pay less for the content by grabbing it out of the airwaves or finding it on the internet.

I have some bad news for penny-pinching cord-cutters. The more people choose to do without a cable subscription, the more expensive the over-the-top alternative is going to become.

The economics of this are stark. Charlie Ergen, CEO of Dish Network, describes the current U.S. environment as “90 million [households] paying $1,000 a year. I don’t think in my lifetime that number goes up.”

Broadcast stations still rely heavily on advertising, but the retransmission fees paid by cable and satellite providers, estimated at about $3 billion a year, are an increasingly important part of their revenues. That’s why broadcasters are so scared of, and are fighting so hard against, Aereo, which provides over-the-air TV over the internet without compensating the stations.

Basic and lower-tier cable-only networks also get advertising revenue, but their rates are often much lower and cable fees represent a larger part of their income. Premium channels depend mainly on subscription fees. Except for the relatively small amounts they pay through subscription internet services such as Netflix and Hulu+, cord cutters are not part of this economy.

Comcast, which plays in pretty much all aspects of the TV game, provides a good look at these economics. Last year, its cable operations generated $20 billion in revenues from video services. Of that, by far the biggest chunk, $8.4 billion, went to pay for content. Its NBC Universal unit received $8.8 billion from its cable channels, $8.2 billion from broadcast (including both the NBC network and 10 owned-and-operated local stations), $5.1billion from movies, and $2.1 billion from theme parks.[pullquote]Somewhere, money will have to be found to feed the content beast. Otherwise, it will be goodbye Game of Thrones, hello Survivor: Mall of America.[/pullquote]

By contrast total Netflix revenues last year were $945 million, the great bulk of it from 27 million U.S. streaming subscribers.

Somewhere, money will have to be found to feed the content beast. Otherwise, it will be goodbye Game of Thrones, hello Survivor: Mall of America.

A number of things are going to have to happen if a significant fraction of customers cut the cord. There’s going to be a lot less free stuff available and the paid content is going to cost more. TV show owners who now regard whatever they get from Netflix for old seasons of Mad Men as gravy will have to drive up the cost if that becomes the primary channel of distribution—and the $9 all-you-can-eat monthly Netflix subscription will be a thing of the past.

HBO will eventually decide to sell content to viewers without cable companies acting as intermediaries; it already has the infrastructure to do this in place with HBO Go. But don’t expect the cost to be much less than the $10 a month or so you’d currently pay for an HBO subscription (the bundling practices of both the cable operators and the content providers make it very hard to figure out the charge for any particular service.) Similarly, access to ESPN sports is going to cost at least as much as the $5 or so per customer per month that cable operators pay for the service.

A second thing that will happen is that content providers are going to become a lot less sanguine about account sharing. Trust me, the services know that you and your three closest friends are sharing one Netflix streaming account or that your college-student son has “borrowed” your Verizon FiOS login credentials to watch HBO Go and ESPN 3. For now, it’s more trouble than it is worth to stop these practices. But as over-the-top revenues grow in importance, the content providers tolerance of such cheating will shrink. A crackdown is inevitable.

Fortunately, getting your television over-the-top has some advantages other than price. You get to watch what you want, where you want, and on the device you want. But all those charges are going to add up, and by the time you’re done, you could be paying as much as you do for a cable subscription. Or more. The byzantine cross-subsidies created by bundled prices mean that at least some customers are getting more than they pay for. In the end, that one payment a month for a big bundle of content may look at lot better than it does today.

 

Google “Plays” With Android Activation Numbers

“…there are now 1.5 million Android devices being activated every day, Google Chairman Eric Schmidt said Tuesday. That’s led to more than 750 million Android phones currently in use.” ~ Erica Ogg, Gigaom

Google changed their methodology to only count user visits to the Google Play store when determining which versions of Android are in use. So exactly how many of those 1.5 million daily activations and 750 million overall activated units have actually connected to the Google play store?

Google isn’t saying.

Now why do you suppose that is?

Facebook Home’s Uniquely Flawed Experience Examined

Facebook announced last week their new experience for Android smartphones, called Facebook Home. This is Facebook’s first major attempt to control more of the phone’s experience without actually selling a phone.   Facebook Home is pre-installed on the HTC First and also users of select HTC and Samsung phones can install it from Google Play.  I primarily use an HTC One X+, installed Facebook Home, and I am sorry to say, the experience was everything I was afraid it would be… a thick and clunky launcher that drains your battery, slows down and gets in the way of everything except Facebook.  I want to share with you my experiences, and based on that and other data points, piece together the implications.  Let me start with some background.

Facebook has received significant investor scrutiny to increase mobile monetization ever since they went public.  Every quarter since they went public, they have been dogged by institutional investors, so the pressure was on Facebook to improve their mobile strategy and execution.  It started with an improved Facebook, Messenger and Camera app (iOS) and it appeared that Facebook was on a little bit of a mobile roll.  Speculation grew that Facebook would in fact, partner with HTC on a “Facebook Phone”, but instead launched Facebook Home.  Let me talk about my experiences…

From the start, Facebook Home looked beautiful, with edge to edge photos of my timeline.  It looked like a combination between XBOX 360 animations and Path simplicity.  If all one wants to do is breeze through timeline and “like” and comment on items, it’s great, but using the other 99 smartphone features the experience starts to unravel.

Swiping my Chat Head up exposes my apps that were in folders or on the top screens.  Note I say “were in folders” because my folders were removed, the apps pulled out and spread out onto four screens that I need to scroll horizontally.  Heck, even Apple learned that phone app icons worked better in folders.  The change is simply confusing. My weather app is now on page four, which defeated the purpose of having it on page one where I wanted it.  If you scroll all the way to left you see “All Apps”, which, of course you scroll vertically to scroll through.  Confused yet? What would really help here is something like Apple’s Spotlight Search.  But hey, Facebook is now at war with Google, so maybe they feel they have to remove search and choose rivalry over usage…. or they assume people don’t have a lot of apps.

After using a non-Facebook app like Pulse Reader, you press the phone’s home button and you are back into Facebook world, which took between 5-10 seconds if over a telephone network.  The screen would be black and a white swirl would spin counter-clockwise, Facebook Home’s version of the hour-glass.  The experience was much better over a WiFi connection. Let’s talk notifications.

In Android, notifications display on the top band of the phone. Facebook Home default installation removes that band, so if you get Twitter, email or low battery notifications, you won’t see them.  Facebook, Instagram, and text notifications show up as Chat Heads.  To see non-Facebook notifications, users must swipe once to see them then swipe twice to pull down the notification menu. If you want to see the status bar, you need to go into Facebook Home settings and click “show status bar”.  Facebook Home also covers up alarms that come through my “Alarm” clock.  You can hear the alarm clock, but you don’t see it and need to plow through menus to snooze or shut it off.  This isn’t what I want to be doing at 5AM.  Let me move to heat and battery life.

Facebook Home is on most of the time and therefore like all active apps, uses power.  I will estimate that my battery life was reduced by 30%.  This is very unscientific test, but what was most telling was the error message that kept popping up. It said, “Battery is low.  The charging current is not enough for device power consumption.  Please switch to AC adapter”.  Problem was is that I was connected to an AC adapter, but my phone and Facebook Home was sucking more power than could be replenished.  As you would expect, Facebook Home heated up my phone, warmer than any game had done.  This is simple physics, but not something you expect from a social media app.   Let me finish off my experience with privacy.

There is no default-privacy with Facebook Home, period.  Your timeline is defaulted “open” for anyone to see.  It is above the lock screen and is just like a screen saver.   Literally, I could walk over to someone’s phone with Facebook Home and watch their timeline…. And “like” and even comment.  Like all Facebook privacy invasions, you can shut this off in settings.

So is it just me who found major issues with Facebook Home?  Absolutely not.  47% people who rated Facebook Home on Google Play gave it a 1 out of 5 stars.  As I dig into the comments, I definitely see most of the issues I outlined below.  This isn’t some anti-Facebook conspiracy as Facebook’s other Android apps receive rave reviews.  As a comparison, Facebook Messenger received 5% one star rating. Net-net, my Facebook Home experiences were shared by many others.  So I have spent a lot of time on the experience, but what about the implications?

As we have seen so many times before with apps like V1 of Apple Maps that received very polarizing rankings, large companies do act as quickly as possible and make quick improvements to their app.  I believe Facebook, who is famous for their all-night hackathons, will move quickly, but with such fundamental and major issues, I’m skeptical they can remove all the issues. Removing folders is a major mistake and Facebook will end up adding those back in or adding some kind of search.  Making it nearly impossible to find your apps isn’t a good way to get the focus on Facebook and without that, many will just uninstall it.

I believe the lagginess, heat generation and the battery life-sucking nature of Facebook Home will be very extremely difficult to fix on current devices like mine without a major architectural change or major sub-optimizations of the code.  Because this most likely won’t get fixed, many people will just uninstall it and move on.

Facebook had an extremely rocky start on a strategically important endeavor.    It demonstrates just how difficult it is to “own” an experience by putting a skin or launcher on top of an operating system.  Facebook will need to go deeper like Amazon did with their own device and experience or sit in “no-man’s land” between themselves, Google, and the handset manufacturers.  While this is a very risky move and not what investors want to hear, Facebook may need to do this to completely monetize mobility.  You will see small baby-steps on this path as Facebook starts to control more of a certain brand’s experience but ultimately Facebook will get out of this middle ground and do their own phone or remain a collection of apps in someone else’s experience.

Forget Mad Men Or Breaking Bad. Give Me The Recurring Tales Of Microsoft.

People are often surprised to discover that I rarely watch television. Make no mistake, though. I’m no culture snob. It’s just that tracking tech companies is so much more fascinating. None more so than Microsoft.

No, not Apple, not Oracle, not Google or Facebook, not even a Marissa Mayer-led Yahoo. Microsoft stands alone, equal parts The Office, Lord of the Rings, and and a really bad, big budget Tom Cruise flick. The stories tumble out, one after the other, always somehow both a shock and painfully obvious.

Founder Bill Gates, we all know, has gone from despised to beloved. Once the face of the evil monopolistic digital land baron, now the big data soul of 21st century philanthropy.

Next, of course, there’s Steve Ballmer, Gate’s Salieri. Ballmer has spent most of his adult life fighting Gate’s wars, living in Gate’s shadow. Small wonder that, despite his many billions earned in sweat and blood and equity, he is now loathe to relinquish his role as lord of Microsoft.

Ballmer is worth as many stories as Gates, and most of them even better. For decades, Ballmer has faithfully spent his days and nights aggressively, angrily growing Windows – convinced it was the very same thing as growing Microsoft. Too late, he discovered the truth. No. Comically, he has yet to discover this truth even though everyone else has.

There’s so much more…

How many billions has Microsoft poured away in its futile efforts to catch up to Google?

How many billions more will it spend now that it has decided catching up to Apple is also necessary?

How many worthy competitors has Microsoft destroyed over the years – obliterated, in fact – only to suddenly later find itself rebuffed by a bumbling Yahoo, or scorned by a geeky Mark Zuckerberg, who decides to stake the future of his company on something as inconsequential as an Android launcher?

I cannot be the only one that finds watching Ballmer transform from an angry grizzly to a toothless Pooh Bear far more entertaining than anything put out by Hollywood.

I cannot be the only one who lived through the Microsoft Terror, watched as Microsoft took on GM, IBM, GE, even governments, now staring dumbfounded as Microsoft runs to France, crying about Google.

The stories write themselves…

The biggest, baddest personal computing company of our age spent years talking about, developing, showing off and building all manner of mobile computing devices. After years of toil they arrived at the gates of the promised land, inexplicably turned around, then mocked Apple and Google as they passed through that magical portal.

Then were turned away when they finally got mobile religion.

Microsoft destroyed Netscape, yet somehow missed out on the Internet’s greatest riches.

Microsoft rode in on a white horse and saved Apple, only to be mesmerized by the wizardry of Steve Jobs.

On its mighty shoulders, Microsoft alone raised up PC companies to the heavens – like Dell and HP – only to sit idly by as they quickly fed upon themselves in a foolish race to the bottom.

The company spent a king’s ransom to destroy Sony only to discover – too late – that Apple was the future of music, movies and gaming.

Microsoft developed the best ever PC operating system – after PCs became damn near irrelevant.

Worse. The company may no longer possess even the ability to right itself as Ballmer has spent the last decade swiftly excising all who possessed even the hint of challenging him.

But you want to see what’s on Netflix?

The company continues to earn ungodly profits – yet their stock refuses to budge.

Their software licensing model, once considered impervious to attack, is now beaten and bloodied. Only, not by free and open but by pricey consumer hardware.

They’ve spent so much over the years on media relations that now no one in the media can stand them.

Microsoft is everywhere yet ignored. Microsoft is giant yet mocked. Microsoft is rich yet may have no future. There is no better story in tech, in fiction nor on the silver screen.

The Revenge of Steve Jobs

steve-jobs2Steve Jobs’ original vision for Apple was to own the PC market. When he and Steve Wozniak created the original Apple PC, they fully expected to be the company that brought the PC to the masses. However, once IBM came into the PC market the game changed. By 1983 the IBM PC was the defacto standard in personal computers and Apple was pretty much left in its dust.

When Jobs introduced the Mac in 1984, he was convinced that his new Apple PC would be considered easier to use than the IBM PC and as a result leapfrog the IBM PC and become the PC for the masses. But at that time, the masses could not afford the price of the Mac or the IBM PC and the real growth in PCs was driven by the business market, a market which IBM compatibles helped define and continues to be the top selling PC even today. Even more galling to Jobs was the fact that Bill Gates, with the intro of the Windows UI, basically took Jobs’ implementation of a GUI and put it onto all PCs and in essence made GUIs the defacto standard in how a person navigates the PC experience. Up to now, Gates and team reaped most of the financial benefits from the growth of the PC market.

Although Jobs introduced the first commercial version of a PC as well as commercialized a radical new UI, the PC market under the leadership of IBM compatible vendors and with Gates’ software, fundamentally has been at the center of the PC revolution and even to date, IBM PC compatible products dominate the market overall for personal computing and Jobs never realized his goal of Apple owning the PC market.

The PCs Run is Over

Earlier this week, IDC updated their forecasts for Q1 of 2013 and gave some guidance about the future growth of PCs throughout this year. In late 2012, IDC forecasted that the PC market would see a negative growth of 7.7% in Q1 of 2013. But in their updated report on PC sales for the last quarter, PC sales were actually down 13.9%, the worst quarterly decline since they began tracking PC shipments.

All Things D published both the IDC and Gartner numbers for Q1, 2013 and wrote about both companies guidance for PC sales for the rest of the year. Even though the IDC numbers and Gartners numbers are a bit different, they both conclude that demand for PCs is in a real decline and that the likelihood of them recovering is slim.

In this article, Arik Hesseldahl of All Things D states “At this time, it has to be said that much of the blame for the damage being done to the PC businesses of all the companies around the world can be laid at Apple’s feet: Sales of the iPad, the world’s leading tablet brand, have a lot to do with the collapse in PC sales.”

When Jobs introduced the iPad, he clearly stated that this product would drive the post PC era. I think he knew that his tablet was finally the reinvention of the PC he had longed to bring to market and that it would actually cause the decline of PCs, even if it meant eating some of his own children (the Mac). More importantly, by the time he introduced the iPad, he had in place all of the hardware, software, and services needed to connect the iPad to his ecosystem and even with any decline in the Mac business, he was fully insulated from the impact any downturn in Mac sales would have on his business. On the other hand, HP, Dell, Acer and other PC OEMs who were totally PC driven are feeling the shock of the decline in their PC businesses and are not any where insulated like Apple to withstand the impact of these sharp declines in PC demand. Their only hope is that Microsoft can deliver key software and services that they can use on tablets and convertibles of their own. But it may be too late for them given the strong position in tablets Apple already has and from strong competitors like Samsung, Amazon, and others who are in many ways better insulated through their own ecosystem of products and services already up and running.

While Steve Jobs is no longer with us, I think he knew that this would happen. Perhaps his last major act was to give us the iPad and finally have revenge for the years of toil in the PC market where he always ended up #2, even though he was first with many of the innovations that actually drove PCs to the masses. If he were with us today I suspect he would not shed any tears to see the decline of the PC market and instead revel in the role the iPad played in bringing his PC competitors to their knees.

Office for Tablets: Delay Could Be Death

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The usually very well-informed Mary Jo Foley reports at ZDNet that we won’t see major improvement in Microsoft Office for tablets until next year, spring of 2014 for Windows RT and fall for the long-awaited iOS and Android versions. If true, this is big trouble for Microsoft’s cash-cow Office franchise.

The huge threat is that this long wait gives everyone a year to 18 months to continue to learn to live without Office. In tech time, that is more-or-less forever. The longer people go without Office on their tablets and the more that tablets become the dominate computing tools, the less people will want or need the Microsoft software. It will hold on in the enterprise in those roles where Office is indispensable, but that will be a steadily shrinking market.

The bizarre thing is that Microsoft foresaw the future of tablets with the development of the Tablet PC in 2001, but utterly failed to recognize their importance once Apple released the iPad in 2010. The brand-new version of Office relies on Windows’ classic Desktop user interface and its applications are unsuited for use even on Microsoft’s own tablets unless they are effectively configured as laptops with keyboards and a stylus or mouse. Outlook, a key component of the Office suite, is not available at all for RT, the tablet version of Windows (Foley says Outlook RT is fall 0f next year.)

As the latest sales figures suggest, the world is moving decisively to tablets. To the extent that people need Office-like apps, companies more nimble (and less riven by internal politics) than Microsoft will provide them. If Microsoft doesn’t get around to releasing tablet versions of the applications until the fall of 2014, it is likely that very few people by then will care.

Google’s New Android Math Doesn’t Add Up

Smartphone-Sales-to-End-Users-Feb-2013-Gartner

According to Gartner, Android sold 144,720,300 units in the fourth quarter of 2012. But let me ask you this:

Who cares?

Does Samsung care how many “Android” units were sold? No, they do not. They only care about how many of their devices they sold.

Do the various Android manufacturers in China care how many “Android” units were sold? No, they do not. They only care about how many of their respective devices they sold.

Does Amazon care how many “Android” units were sold? No, they do not. They only care about how many Amazon devices are being used to direct traffic to their web site.

Do Android developers care how many “Android” units were sold? No, they do not. They only care about those Android units that their software can address and, even more specifically, they only care about that portion of the addressable market that is interested in purchasing their product or downloading their product and consuming their advertising.

Does the Google Play store care how many “Android” units were sold? No, they do not. They only care about how much is purchased from the store.

Why Do We Count Android As A Single Entity?

“Android” is not a single entity. So why do we add all of the “Android” numbers together? We do it because we assume that higher numbers mean a stronger platform. We use it as a proxy for the strength of the platform. But it just ain’t so. Total numbers mean nothing. The only numbers that matter are those that strengthen the platform.

And do you know who agrees with me? Google.

Android’s New Math

Google reported that the number of Android units using Android versions 4.1 to 4.2 jumped from 16 percent a month ago to 25 percent this month. Impressive, no?

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No.

The reason for the big jump was that Google changed the way they count the numbers. Previously, devices were counted when they checked in to Google’s servers. But Google is now only counting user vistits to the Google Play Store. Google argues that the data more accurately reflects users “who are most engaged in the Android and Google Play ecosystem.”

I agree. This is a better way to count the meaningful numbers rather than just the gross number of Android activations. However, did you notice the inconsistency in Google’s new math?

One Of These Is Not Like The Other

Google hasn’t recalculated and lowered the total number of Android activations.

In other words, when it comes to telling you how many activations they have, Google uses devices that check in to their servers. But when Google wants to tell you which versions of their operating system are in use, they only count user visit’s to the Google Play store.

Hmm. So we now know that versions of the Android pie are divided into different sized slices but what we don’t know is just how big that pie is. Exactly how many of the 144,720,300 units sold in the fourth quarter of 2012 are actually accessing the Google Play store?

We don’t know. Because Google isn’t saying. And until they do, those total unit sales and activation numbers have little meaning in determining the overall strength of Google’s portion of the Android platform.

Android’s Total Numbers Conceal Rather Than Reveal

“Android” shouldn’t be counted as a single operating system any more than Europe should be counted as a single country. Heck, Android doesn’t even have a “common market“.

If we’re going to use numbers as a proxy for determining the strength of various operating systems, then we have to use meaningful numbers. Perhaps we should be comparing the units running the latest version of iOS with the latest version of Android. Perhaps we should be counting the Amazon, Google, and the various Chinese portions of Android as distinct and separate entities. Perhaps we should even be counting that portion of the Android phones that run Facebook Home separately too.

What we most certainly should NOT be doing is lumping all Android sales and activations together and pretending that they’re one and the same and that their total numbers are advantageous to all of Android’s separate participants, such as Samsung, HTC, Amazon, Google, developers, etc. If an activation or a unit sale doesn’t count towards the strength of the whole operating system, then it shouldn’t be totaled. Totaling Android’s numbers together doesn’t make sense because there isn’t a single, unified Android platform.

Numbers should be used to reveal, not conceal. And Android’s numbers aren’t revealing its strengths, they’re concealing its weakness.

The HTC One: Setting a New Bar for Android Phones

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I’ve been using the HTC One for a few weeks now as my primary smartphone and I have to say it is an impressive device on many levels. The HTC One is undoubtedly the best Android device I have ever used.

Through the years, HTC has shown that they can create extremely well designed and unique hardware. The HTC One is the pinnacle of the companies efforts and rasies the bar for all Android, and Windows Phone devices for that matter, going forward. The HTC One is the first smartphone that even comes close to the iPhone in terms of hardware and in some respects it is superior.

From my experience with the HTC One there were three key things that stood out to me.

Speakers and Sound

The speakers on the HTC One are incredible. Hands down the best speakers I have ever encountered on a mobile device. At first, I was impressed at the sound quality but questioned how practical the feature was. After a day or so, I quickly changed my mind and realized the feature was incredibly valuable. I started listening to music in more locations, contexts, and situations than before. Although I own the Big Jambox by Jawbone, I don’t always have it with me. Even when my family and I go to the beach or the park, we always try to pack lightly. Bringing the Big Jambox is not always an option. But I always have my phone with me and with the HTC One it’s like having a boom box with you at all times.

HTC includes the Beats audio feature which is a hybrid software and hardware audio processing solution. This feature worked well on the phone but interestingly the Beats audio feature was applied to audio that was being streamed to other devices. I stream music from my phone to my cars speakers frequently and I noticed the audio coming through my cars speakers was benefitting from the Beats feature.

HTC positions the enahnced audio and speakers on the One by calling it BoomSound. I’ve used many portable audio solutions and the distortion at high to full volume on many devices makes them simply unusable in louder or outside environments. This was my primary knock on the smaller JamBox. So I decided to test the HTC against other devices and this is what I found.

The iPhone 5 has great speakers but its max volume is 65 db and at that volume has minor distortion. My Retina MacBook Pro at full volume hits 95 db with excellent audio clarity and no distortion. The HTC One’s max volume hit 85 db with excellent audio clarity and no distortion. Suffice it to say, impressive for a mobile device.

Those stats aside, whenever I gave a demo of the speakers to friends and family, they simply said “wow.”

Camera

I think we would all agree that the camera on our smartphones may be one of the most valuable features. Every generation smartphone manufactures look to integrate better optics, sensors, software, and capabilities to the camera function. The processor and the camera are the two features that annually get signicant performance bumps.

HTC has always been pushing the camera envelope, mostly around megapixels, but you won’t find megapixel claims much with the HTC One and for good reason. Megapixels no longer matter. What matters now is what you do with those megapixels. HTC has packed a number of relevant features into the One that are typically rerserved for high end point-and-shoot and mirrorless DSLR cameras. The result is the best low-light pictures of any smartphone I have used. Low-light images are the trickiest to shoot with a mobile device and I generally travel with a DSLR for this feature alone.

Bottom Line is that the HTC One will rival many mid-range point and shoot cameras. Impressive for a smartphone.

Software

I’ve always appreciated HTC’s attempt to add value on top of Android. Their strategy with the Sense UI has been solid since the beginning. As Sense evolved, it got more refined and more polished. The hardcore tech community has generally bashed Sense in this regard because HTC is not targeting the hard core tech community with Sense. They are targeting your casual smartphone users who don’t want to fuss with their smartphone but favor ease of use over heavy customization and software tweaking.

Many of the UI changes HTC made helped Android get out of the way rather than get in the way. And for the masses that is a good thing. I have not been shy about my frustration with Android as a UI but HTC has done much to add elements of simplicity and convenience to the platform. HTC’s much simplified app launcher is a great example of this placing most recent apps, a search bar, and quick link to the Google Play store all near the top of the app drawer.

HTC has easily created the best Android phone to date for the mass market. Its uses for portable sound and image capture are best in breed of any smartphone. Considering how the masses use their phones, those two features alone will stand out.

The HTC One will distinguish istelf from the pack with the hardware alone. The key for HTC and the carriers that carry it is to market it appropriately. If they can do this, then I think HTC could have a winner on their hands.

My personal preference is still to iOS. Using the HTC One with its larger screen size and iPhone like design convinces me even more that I want iOS on a larger smartphone screen than 4-inches. In fact several times I remarked to people that I wanted iOS on the HTC hardware. Specifically the speakers and the camera.

I give many technology recommendations to friends and family alike. I recommend different devices depending on the type of consumer they are. However, If someone were to come up to me and ask my advice on which Android smartphone they should get. I would tell them without hesitation, the HTC One.

The School Standards Debate: Time for Tech To Weigh In

School kids (Photo c Monkey Business-Fotolia

 

Tech people are very fond of whining about the U.S. educational system, complaining that it is not producing the sort of workers they need. With a few notable exceptions–Bill and Melinda Gates and Dean Kamen come quickly to mind–the are much less good when it comes to doing anything about the problems of schools.

OK, here’s your chance. It won’t even cost you anything–calls for better education seem to die quickly in places like Silicon Valley when the talk turns to taxes–except some leadership.

The Common Core State Standards are the most important school reform to come along in many years. The standards fo mathematics and language arts lay out what we expect students to learn, year by year, from kindergarten through high school. They are not a curriculum, but a set of mileposts for what curriculum should cover, and they inject a badly needed dose of rigor into education. If you have any interest in K-12 education, you should take the time to read them here.

dear_industryDespite a studied effort by their authors and sponsors at the National Governors’ Association and Council of Chief State School Officers to avoid political pitfalls, the standards have come under increasing attack from both the left and right. CCSS was initially adopted by 48 states and the District of Columbia, but three states have withdrawn their support and their is pressure in many others to do the same.

On the left, opposition to CCSS is closely tied to opposition to standardized testing, based on the assumptions, not necessarily warranted, that the standards will lead to increased testing. The anti-testing advocacy group FiarTest argues:

More grades will be tested, with more testing per grade. [No Child Left Behind] triggered an unprecedented testing explosion (Guisbond, et al., 2012). The Common Core will compound the problem….

Lured by federal funds, states agreed to buy “pigs in a poke.” The new tests do not yet exist except for a few carefully selected sample items, so it is not possible to judge their quality. Nevertheless, states are committing large sums of taxpayer money for the equivalent of “vaporware”—much hype, little substance. New drugs must be carefully tested before release lest they do more harm than good. Yet, these new measures are being pushed through with at most one year of trials. There’s no guarantee that they will function as advertised and many reasons to believe they will not.

The argument that more study is needed is especially pernicious. CCSS has been in development for more than a decade and, unlike the radical math and science curriculum reforms of the early 1960s (remember New Math?), the new standards are mostly a compilation of best practices already in use. Then there’s the obvious paradox of demanding more evaluation while opposing the testing the could provide the data. (The National Education Association and the American Federation of Teachers, which oppose the use of standardized tests to assess teacher performance, both are on the record in support of CCSS.)

But the truly fevered opposition to CCSS is coming from the right, and this is what is threatening implementation in the states, largely through interference by state legislatures. The main objection, despite evidence to the contrary, is that CCSS represents a federal takeover of local education. Then there’s the complaint that CCSS is both untested and that the government is trying too hard to test it. Tiffany Gabbay, writing on the conservative site The Blaze, syas:

According to the conservative think tank American Principles Project, Common Core’s technological project is “merely one part of a much broader plan by the federal government to track individuals from birth through their participation in the workforce.” As columnist and author Michelle Malkin has pointed out, the 2009 stimulus package included a “State Fiscal Stabilization Fund” to provide states incentives to construct “longitudinal data systems (LDS) to collect data on public-school students.”

With attacks, often ill-informed (or completely uninformed; many of the people attacking CCSS show no sign of any knowledge of what they contain) coming from all sides, CCSS could use some friends, and I think its time for the tech industry to step up. I am much more familiar with the math standards than language arts, both because it is my area of interest and because by the nature of the beast, the language arts standards or vaguer and harder to interpret. The math standards, if properly implemented, would represent a huge step forward. They aim both at increased computational skills, largely deprecated in the standards in use for the past 25 years, and deeper understanding of the connectedness of critical topics in mathematics. Curriculum based on these standards should produce students better able both to do math and to think more deeply and critically.

This is exactly what tech companies is looking for in its future labor force. So instead of complaining about the deficiencies of American students, get out there and work for some constructive change.

 

HP’s New Servers Take a Page from the Smartphone Playbook

Yesterday, HP launched the Moonshot 1500 server, targeted at scale-out HPMoonshotSystem_HPProLiantMoonshot_serverdatacenters that drive today’s and tomorrow’s mobile applications, internet, big data and IoT. In its its first instantiation, Moonshot increases density, or the numbers of servers in a given space, by up to 8X. So for every rack of HP Proliant servers today, you could put up to 8X the number of servers in its place at the same power and space.  This equates to a huge cost savings in power and building space.  One of the more interesting parallels is that HP is taking a play out of the smartphone playbook to accomplish this.  Let me start with a brief review of smartphone technology ecosystems.

Today’s smartphones are powered by an SOC (System on a Chip) designed and sold by a collection of companies like Qualcomm, Apple, Samsung, Nvidia, Intel, Huawei, MediaTek and TI.  SOCs, unlike processors, have all the capabilities to run an entire phone, making capable the wide myriad of functions from texting to updating social media status, playing games, watching videos, listening to music, making and editing videos, taking and editing photos, and of course, talking.  The SOC that makes this happens is actually made up of multiple different accelerators that just happen to be packaged in one chip.

In fact, each smartphone has the following “accelerators” to accomplish a specific task, which I will GROSSLY simplify here:

  • CPU– boots the OS, runs serial app code well, multitasking, and is the orchestrator of the phone
  • GPU– accelerates games, UI and more and more doing parallel computing functions assisting in things like editing photos and videos
  • Video decode– plays back the high density, 1080P and even 4K video
  • Video encode– converts video to another format when doing things like video editing and even AirPlay to the TV
  • Audio- plays back music at extremely low energy
  • ISP (image signal processor)- required to take pictures and make them look pretty
  • VSP (video signal processor)- required to take videos and make them look pretty; sometimes bundled with the ISP

As you can see, all of the smartphone functionality comes from many different accelerators.  The alternative would be to use a general purpose ARM Intel or MIPS-based processor and do everything on it.  The problem is, that this could use 20-100X the power and heat.

So what on earth does this have to do with HP Moonshot servers?

The new HP Moonshot servers take a very similar approach to smartphones as they are designing specific servers for specific workloads or applications, just like a smartphone uses an SOC. Instead of playing games or watching a video, these servers will execute specific workloads like web serving, web applications, streaming content, analytics, cloud, database and caching.  Like an SOC’s accelerators, HP will be offering different server cartridges with on-board accelerators:

  • Processor– general purpose from AMD, Applied Micro, Calxeda and Intel, great on serial workloads and integer parallelism
  • GPU– used for visualization, remote access, cloud gaming, facial recognition, GPU compute
  • DSP– semi-custom, useful in many ways, but starting at video encode and decode
  • FPGA (Field Programmable Gate Array)– extremely custom, popular with government agencies and aerospace for a myriad of tasks you will probably never hear details about.

Like smartphones, HP Moonshot’s design addresses specific workloads and applications with a specific accelerator.  HP packages these different accelerators in a server cartridge that can be slid in and out of the Moonshot chassis very easily.  I have actually done this and it is very easy.  It’s not like installing a PCI Express card but is more like opening and closing the door of a sport car- very fluid with a “click” at the end.

One other analogy between smartphones and HP Moonshot servers I’d like to share is in regards to ecosystem.  I think we can all agree that much of the success of Apple and Google is around their app store ecosystems.  Well-oiled ecosystems that enable growing economic opportunity for both sides of the equation work very, very well.  Without the iOS ecosystem, Apple would have a handful of apps they wrote and then pointers to web sites for other content.  We all know how horrible that would be.  Also, the iOS ecosystem enabled applications I am sure were never thought of in the beginning.  These are apps like Instagram, Snapchat, Foursquare, and Pulse.  This is a testament to the combined innovation, creativity, and ingenuity a broad and thriving ecosystem can provide.

HP is setting up an ecosystem called the HP Innovation Ecosystem (a mouthful).  Its goal is to create a hardware and software ecosystem where, like in the case of iOS, all parties win and the combined innovation creates deliverables much larger than it could on its own.  HP has a really strong start with the hardware, as yesterday, I saw no less than 7 unannounced server cartridges and am promised there are many more on the way.  HP will essentially give you the specifications for what the card needs to plug into and a company can design their own cartridge.  In fact, for some government applications, HP may never see the actual server cartridge. This type of hardware ecosystem will be very interesting to watch.

On the software side, HP has enabled multiple OS, tool and app vendors, too, with an early focus on open source Linux.  To make coding and testing easier, HP has what they call the Discovery Lab, where ISVs and developing customers can install their code on HP’s servers in Houston, eliminating the need to buy a server for development.

This is the most comprehensive ecosystem I have ever seen and I look forward to seeing some applications we would have never thought of in a closed environment.

Ironically, the smartphone and tablet phenomenon has driven the need for a radical new approach to server and datacenter designs.  It’s even more ironic that to accomplish this, HP Moonshot servers have taken a page from the smartphone playbook of executing tasks on specific accelerators and creating broad ecosystems.

Who says servers aren’t cool?  If you would like a very deep dive, I have published a white paper here.

Fox, Aereo, and the End of TV

Aereo antenna array (Aereo, Inc.)

News Corp. Chief Operating Officer Chase Carey’s threat to pull the Fox network from the airwaves if Aereo wins its legal battle to retransmit over-the-air TV signals without paying for them is probably nothing more than bluster. But the fact that he could make such a threat with a straight face, and in front of the National Association of Broadcasters, no less, is a clear indication that the end of TV as we have known it is approaching.

The broadcast networks, especially Fox and the old big three of ABC, CBS, and NBC–are still tremendously important players in the TV world. Far more people watch their content than any of the cable-only channels. They still dominate news and live sports (though ESPN and to a lesser extent Fox have made significant inroads in the latter).

But over-the-air is no longer how they reach most of their viewers. And while we still think of broadcast TV as ad-supported, the retransmission consent fees paid by cable carriers–and avoided by Aereo–have become a tremendously important source of revenue to local stations. In a sense, they already are pay TV stations from the point of view of most viewers, and that is why  Carey’s threat is not an empty one.

What would it mean if over-the-air broadcast TV disappeared? For one thing, we could forget about the hideously complex incentive auction now being planned by the FCC to free a bit of the prime spectrum now occupied by TV stations for wireless data use and just turn the whole thing over to wireless.

Some of the more interesting consequences would be for politicians. Members of Congress depend on local stations to keep their names and faces in front of voters, especially as local newspapers fade away. Politicians are also the beneficiary of regulations that require local stations to sell advertising to candidates for federal office at the lowest rates they charge any customer. In fact, if stations stopped broadcasting over the air, the Federal Communications Commission would lose essentially all ability to regulate their content, rates, or much of anything else.

Even the most anti-regulation Republican doesn’t really want that to happen. That’s why Carey’s real audience may have been Congress. If Aereo wins in court, as seems increasingly likely, the broadcasters are likely to turn to Congress for relief. Carey’s statement was likely a shot across the bow in that fight.

But history has shown us that depending on favorable treatment from government to save you from the forces of change can work, but only for a little while. The times they are a-changing for television.