Year: 2013

Making the Case for Better Document Management on iOS

For my birthday two years ago, I treated myself to an 11-inch MacBook Air. I bought it with the intention of using it mainly as a writing machine away from home, for my blog and for school. It was (and still is) a terrific little dynamo of a computer, but I eventually grew tired of the burden of managing multiple Macs. Thus, I decided to bequeath the Air to my sister, and committed myself to using my iPad 3 as my "laptop".

I adore working from my iPad, but there is one constant point of friction that at times makes me yearn for my old Air: managing files — in my case, text files — is a pain. It's a problem that certainly isn't insurmountable, but one that throws a wrench into my otherwise seamless workflow.

Like most nerds I know, I use Dropbox to store and sync my data across my devices. All of my important documents are spread across folders inside of folders. Dropbox's hierarchical file system works well for the most part, but it's not perfect. I still have to navigate folders and then use iOS's 'Open In' command to get to the file I want. On an operating system where Apple's purposely abstracted the file system from users (nerds included) in an effort to eliminate complexity, using one effectively bolted on (the Dropbox app) feels weird and, as Rene Ritchie writes, downright archaic.

By contrast, I don't know anyone who uses Dropbox outside of my fellow nerd friends on the Internet. That is to say, none of my "regular" user family and friends have a Dropbox account. In fact, I would go so far as to say that most of them have no clue what Dropbox is or does. Moreover, I'm positive that these same family and friends have no clue (or care, really) about the complexities of iCloud — more to the point, they don't understand iCloud's many idiosyncrasies involving sync.

iCloud For Everything

Given this context, and given how much Apple pushes iCloud as the "everything" solution, I think it would make sense for them to give users a central location on their iOS devices from which to access and browse their documents. Apple's servers will always be the canonical place, of course, but an iCloud Documents app would, in my view, be a more straightforward and easier to understand concept than having to remember which app one used to create a document, and bear in mind that said document can only be opened in the same app. While I feel completely comfortable navigating my myriad of files in Dropbox, I would like a simpler, more forward-thinking way to manage my documents. Ideally, such a solution would use iCloud because, when it works, it works like magic. To that end, an iCloud Documents app for iOS is highly desirable to me. All your documents, all in one convenient place. If Apple sells iCloud as being "the easiest way to manage your content", then it surely should include a one-stop shop for one's important documents.

Here's how I envision such a hypothetical iCloud Documents app working. First, as I stated before, it would house all the user's documents within the app. Apple could design the user interface in such a way that it would automatically separate document types. You could have a toolbar at the top with tabs allowing you to switch to and from text files and Keynote decks, for example. Most of all, though, it would be searchable, as well as offer optional folder creation, a la Photos today. Programmatically, Apple would create a Photos app-type app where, instead of the ImagePicker API, it used a FilePicker API to find and display documents.

In addition to the iCloud Documents app, Apple could also incorporate a dedicated iCloud Documents Web app into iCloud.com. The idea would be the same as on iOS: one central place that keeps all your documents, all up to date. Furthermore, it could be built could so that a user could choose to open, say, a text file in Byword or iA Writer on their Mac, or Notepad if on Windows.

While using iCloud to sync documents would seem to be the perfect solution — I use it for a few things, and it generally performs well for me —, it does have its share of hiccups. For one thing, iCloud can be notoriously unreliable. Another issue is that documents in iCloud are confined to their own silos. iOS itself is similar in this regard, which is great in terms of security, but not so much when it comes to accessing documents.

Yet another stumbling block is iOS's Open In command. It works, but it only works so well. The big problem with Open In, as Federico Viticci writes, is that users end up with multiple copies of files spread across a multitude of apps, which in turn causes headaches when deciding which copy is the canonical version. Again, Open In does work to an extent, but it's messy and far from the ideal solution. I try my best to avoid Open In, because I know its limitations, and, frankly, Dropbox is much easier to use.

You might ask, "What makes a hypothetical iCloud Documents app better than just directly going to the app in which you created the file?" That works, to be sure, but the my point is I believe documents needn't be strewn across a bunch of apps. If you're like me and use your iPad for productivity, there should be one place, one app, where you can see all your documents — and it should be different from Dropbox or Google Drive or whatever. You shouldn't have to remember that you created that parent newsletter in Pages. Rather, you should just be able to open iCloud Documents, tap on the file, and have it automatically open in Pages on your iPhone or iPad. Again, the current methodologies work, but they're far from ideal.

To be clear, The ideas I posit in this piece are not meant to imply that Dropbox is bad, or that I don't appreciate it for what it does. On the contrary, I love Dropbox. My argument is simply that I agree with Rene Ritchie insofar that Dropbox is a system built on the past, whereas iCloud, with all its mystic magic, feels like the future. Steve Jobs himself said as much when he said "the truth is in the cloud". More to the point, Apple gets a lot of flak, and rightly so, for not doing Internet services well. I feel iCloud has a lot of good points, but right now it isn't living up to its full potential. And, frankly, I feel, with all the talk of past and future, that a solution built on iCloud is better suited than Dropbox for the long-term, indispensable as Dropbox may be at this point.

I so enjoy working from my iPad not only because the tablet, hardware-wise, is so thin and light and power-sipping, but because iOS is so powerful. Thanks in no small part to third-party developers, the app ecosystem is rife with desktop-class apps that are so good that I don't require a Mac to get the majority of my serious work done. Add in iOS's one-app-at-a-time approach, which I find refreshing and which helps keep me focused, and the iPad truly is one terrific productivity device. As a writer, I couldn't be happier that my iPad's become my laptop. On the whole, the experience of getting real work done on my iPad has been awesome. That I (and others) are able to do so is a testament to just how powerful Apple's made the iPad and iOS. The reality is that, as a nerd, I get by fine with Dropbox. However, just because one solution works for me doesn't mean Dropbox is the answer, or that iOS and iCloud are above improvement. On the contrary, this piece (hopefully) illustrates that iOS and iCloud can be much better at certain things, like document management.

It's only one piece of a very complex puzzle, but it's my opinion that an iCloud Documents app would be a big step in solving the problem of how to directly access files on a system where, at least on the surface, the classic file system doesn't exist. My hope is that sooner or later, Apple will give users direct access to documents much in the same way Photos gives direct access to photos, and Passbook gives direct access to movie tickets, boarding passes, and so on. Such access would make working from my iPad orders of magnitude better, and make me quit longing for my old MacBook Air.

Tablets, Desktops, Laptops: How the Tools Fit My Life

© Sergey Nivens - Fotolia.com

With the endless arguments about tablets’ productivity or lack thereof, I decided to take a close look at the computing tools in my life. The result is a seemingly contradictory conclusion: We truly live in a post-PC era in which the traditional PC remains a vital player.

I think my habits are fairly typical of a knowledge worker in 2013. The main differentiations are probably that I am older than average and am self-employed, working from home. I spend pretty much all of my waking hours with some sort of connected device readily at hand.  My primarily tools are a oldish 27″ iMac, a 13″ MacBook Air, and an iPad (as of last Friday, an Air; before that an iPad 3.) I use an aged Windows 7 desktop less frequently and a Windows 8 ThinkPad less still. I use a Samsung Note 10.1 tablet only when I want to check something Android. And at any given time, I have assorted other equipment in for evaluation. And a Kindle Fire, which I use exclusively as an ebook reader.

A desktop for the desk. Most of each working day when I am in town is spent at my desk, and that means in front of my iMac, equipped with an aged USB keyboard that I think is left over from a Macintosh G4. For many things, it is my tool of choice. I do technical writing that  requires having lots of windows open at once and the use of Word, Excel, PowerPoint–not those functions but the actual Microsoft Office programs–and SharePoint. I make a lot of use of Adobe’s Creative Cloud–Photoshop for pictures, Premiere Pro for video, Audition for Audio. All of that is work from a legacy PC, in my case, mostly a Mac.

But there are many things for which I much prefer the iPad, even if the desktop Mac is available. I have the Tweetbot Twitter client on my Mac, iPad, and iPhone, but the iPad version is by far my favorite. On the Mac, when I click on a web link in a tweet, it opens the page in a tab that appears on the far right of my tab list. When I’m done and close the tab, I’m left in the browser in what had been my rightmost tab. The iPad version, by contrast, makes great use of the single-window, one-app-at-a-time interface. When I click a link, the page fills the screen. When I’m done, I click the Close button and in Tweetbot, exactly where I left off. (The iPhone version works the same, although web pages, of course, are harder to read on the small screen.) The Mac and iPad versions of the Feedly RSS reader work more similarly, but the iPad model is still slicker at opening web pages.

A iPad away. When I’m away from my desk, the iPad is generally with me. Mostly, I use it to keep up with incoming mail, my tweet stream, the odd game, and whatever else needs doing. For more serious work, I have a Zagg Flex keyboard. The iPad, over time, has largely enlaced the Mac book, with DropBox, Google Drive, and SugarSync giving me access to key documents. But it isn’t quite a laptop replacement.

I have done many Tech.pinions posts on the iPad, but it has its deficiencies. I usually write in the Byword markdown editor and then transfer the contents to WordPress, because the browser-based WordPress editor is not very well suited to touchscreen use. Handling art work remains a lot clumsier than it ought to be. but I can do it in a pinch.

My biggest frustration is trying to moderate Tech.pinions comments on the iPad. The Disqus moderation page really, really does’t like mobile Safari and handling comments is painful. It’s weird, but the need to moderate comments can be the one thing that causes me to take a laptop on a trip that I otherwise might leave at home. There’s an interesting distinction here. Some tasks, such as spreadsheets or video production, are inherently unsuited for the tablet. But many, such as Disqus moderation, are being held back simply because no one has optimized the software yet. In time, more and more of these chores will become accessible.

I find there are plenty of tools for writing on the iPad. Pages works fine for the sort of simple document you might want to create on a tablet, and both Byword and Editorial are great for straight text or HTML. I don’t do slide presentations much, but Keynote is fine.

The pain of Numbers. I haven’t used Numbers much, but I tried last weekend to use it to create a not-too-complicated budget document on the iPad. It quickly sent me scurrying back to my Mac and Excel. Trying to enter spreadsheet data from the on-screen keyboard was horrible. I found Apple’s system of modal keyboards–one for pure numerical entry, one for text, one for functions–slowed me down insanely. I understand why they do it–using the full regular iPad keyboard covers too much of the screen–but I just couldn’t get used to it. Using an external keyboard helped some, but Numbers just is not a very good program; it’s a case where simplicity actually gets in the way and the minimalist user interface actually makes things harder. But, in general, spreadsheets, unless they are very small and simple, are one of those things that really belong on a traditional PC, the bigger the display, the better.

Would Microsoft Office on the iPad make it even more useful. I can see some edge cases where it would be nice to have it, but only if Microsoft could produce apps that really fit the device. Their inability so far to do this for Windows tablets is not encouraging. I agree with my colleague Tim Bajarin (Tech.pinion  Insiders only) that this ship has sailed.

You’ve probably noticed that the device that gets lost in this workflow is my MacBook. Most days it just sits on the desk or in a bag, closed and forlorn. It gets used on longer trips when I know I am going to need the power of traditional PC applications, or when I have to work on something that must be done in Word because of the need to handle long, highly formatted documents or a requirement for Word-compatible change tracking. But most of the time, the desktop and the iPad handle my workflow (with the iPhone filling in) and the laptop that has become the tweener that gets left out.

 

 

Why Microsoft will regret not doing MS Office for iOS

I was rather intrigued by the comment made by a Microsoft executive after the iPad was announced that basically stated that Apple’s iWork is not for real work or productivity. For that, he says, only Microsoft Office is a true productivity tool. I took personal offense to this remark since I use many of the iWork tools for productivity and it meets the majority of my needs. In fact Keynote is actually a better presentation tool for us at Creative Strategies then Powerpoint. Pages has become a very robust word processor allowing us to do all of our newsletters and client Perspectives documents in this rich and graphically oriented word processor. We also do almost all of our charts in Numbers, the third product in Apple’s iWork tool kit. So if I read Microsoft’s executive’s comments correctly, I do not do real work–I apparently only do pseudo work or productivity since I use iWork.

Of course, his comment was just silly posturing and made him and Microsoft just look clueless. I continue to be amazed that Microsoft still does not give Apple the respect it deserves and from this comment it suggests that they still don’t take Apple seriously even if the iPad has taken close to 100 million PCs out of the annual PC buying cycles. Three years ago we sold close to 400 million PCs a year. In 2013 we will be lucky if we sell 300 million. That means 100 million less PCs are sold each year that could use MS Office than in the past. Yet, Microsoft has still not created a version of MS Office for iOS!

I believe that it is actually too late for them to do MS Office for iOS for three major reasons-

1-Apple’s new iWork suite of tools is now free. Knowing Microsoft, if they did do a version of MS Office for iOS I highly doubt it will be free. In fact it would probably be at least $60.00 to match the yearly fee of MS Office online. Perhaps 5-7% of iOS iPad users might be tempted but given the quality of iWork tools today, free always beats paid for software and if productivity on iOS 7 is needed, the majority will opt for iWork.

2-iWork will only get better. Apple never stands still when it comes to improving their software. You can expect that Pages, Numbers and Keynote will gain even more features and give users even greater controls over the next 18 months, trumping anything that Microsoft might deliver in an iOS version of MS Office. Also iWork in the cloud is so much better than Office in the Cloud already and it too will only get richer given Apple’s laser focus on apps and services.

3- I believe Apple has a killer productivity device in the works that could be even more disruptive to the PC market than the original iPad. If you think the iPad has had a detrimental impact on the PC market to date, just wait. Although Apple has not done any serious push for the iPad for use in business and the enterprise, the iPad has emerged as a very rich productivity tool in its own right. Add a Bluetooth keyboard to the iPad and in many ways it replicates the laptop experience in a much smaller, thinner and lighter physical platform. The iPad Air makes the iPad even thinner and lighter and is already in high demand in many IT accounts I have talked with recently.

There is a reason Apple named the new iPad the iPad Air. Some think Apple will do an iPad Air Pro and others think they will do some type of hybrid. They may be right but I suspect Apple has something else in mind that may have elements of these two ideas but in a different package. Of course I am just speculating here but I sense something big is up and if they do create an iPad that is optimized especially for productivity, I predict it could take at least another 30-50 million PCs and laptops out of the yearly PC pipeline by the end of 2015.

Had Microsoft brought out a version of MS Office for iOS 7 within a year of the iPad being on the market, it would have been a big success and serious money maker for them. Now it is too late. You also can’t count out more and more people moving to Google’s productivity tools. I recently found out that a major national newspaper just moved everyone over to Google Docs and away from Office. I have heard that same thing happening at other big firms and big government accounts too.

With a shrinking PC market and a looming larger iPad/iOS market continually growing along with new productivity tools from Google and others, MS Office will have a hard time attracting new buyers and I am afraid that this franchise will only recede instead of grow in the future.

Smartphones Are Transforming Retail Not With Technology But With Messy Humanity

I believe a profound transformation in retail is now underway, one set to equal the changes in buying and selling formed during the modern industrial age. Only, it’s not what you think.

It started with Apple, which launched the smartphone wars. With smartphone in hand, we can now assess competitor price, global availability, level of service, and overall quality of any product anywhere on the globe, even while browsing inside a small store on the very edge of the farthest reaches of our planet.

For today’s retailers, it gets worse.

Amazon has constructed a platform that enables it to sell virtually any item at a lesser price than any competitor anywhere, with all necessary adjustments on price and availability made in real-time.

With Google, we can know everything around us and can locate exactly what we want, whether down the street or on another continent. There are no boundaries, no safe places.

With social media, we are always in contact with family, friends, followers and all manner of experts. Meaning, we need never pay more than the absolute best price available. We never need to choose the wrong product for our unique needs — nor be persuaded by crafty or misleading sales entreaties.

Thanks to smartphone payments apps we have our requisite coupons and loyalty points always at the ready. We can also now instantly send (digital) cash to another person’s mobile device, bypassing all manner of legal and non-legal intermediaries.

Retail — the entire shopping, buying, paying, servicing, researching, promoting ecosystem — is being de-constructed by smartphones, social media, location data and the cloud, with power flowing outward to every potential buyer.

This is only the beginning.

[pullquote]Values equal profits.[/pullquote]

The more profound change, and one that industry analysts seem utterly blind to, is that the very same technologies which enable shoppers to receive the best price, the best service, the best value, will similarly guarantee that their money itself generates maximum impact.

For every $100 you spend, would you prefer that most of it, if possible, stayed within your community? If you could choose between having your next $100 go to retailers that support your child’s school, your neighborhood, your political and social views versus to a faceless corporation of undetermined origin and values, would you? I suspect the answer is a resounding yes and I believe our technologies are rapidly leading us toward this new reality.

When able to easily determine and demand the very best price and the very best product, what comes next is to make sure we spend our (limited) dollars in a manner that fosters and extends our political, social and community goals to optimum levels. Retailers will have to adjust to this new world. Their new reality is thus:

Values equal profits.

We can now get anything, anytime, anywhere and at the very best price available. How then to choose? Simple. We choose Brand X and Retailer Y because the product’s origin, its composition, the people who make it, those who sell it, those who service it, all support a world and a future that most closely aligns with our own.

Seen in this light, smartphones and the mobile web are not merely upending retail and relationships, fostering new services and business models, they are transforming the very notion of retail. No longer will it be about profits first. Rather, values first, then profits.

We can already see the beginnings of this change, of course. Fair trade coffee, handmade crafts, and restaurants that emphasize “local” as much as the food itself. These are merely brief flashes of what’s to come. I predict that within a decade, maybe less, values will be a primary driver behind most consumer sales in the developed world.

Note: I do not mean “values” as practiced in the traditional (20th century) marketing sense. Apple, for example, does a masterful job promoting their values — aspiration, liberation, creation. These are, however, feel-good values designed to please everyone. This will no longer be sufficient. In a world when we can easily find equivalents and get them at the absolute best price, values will become the prime differentiator. No doubt, the values of some retailers will be highly offensive to many. This will not slow this new reality down.

Indeed, with so much information readily available, it may soon no longer even be  possible to make a purchase decision without knowing the values of a product or the political leanings of its sellers. With instant price comparisons, location-aware search, real-time data streams, constant connectivity to friends, family, followers, spiritual advisors, political leaders and product experts, the act of purchasing based on values becomes not just possible but commonplace, probably even expected. In the near future, you don’t merely check in to a place to tell your friends where you are, you check in to make a declaration of who you are — and you can do so with every purchase.

Retail will become less about profit and more about a larger social purpose. To promote particular religious or social views, gun rights, a greener planet, transgender equality, Christian fundamentalist practices, polygamy, animal welfare; the options are as expansive as humanity itself.

Yes, it can get messy. It will get messy. Humanity is messy. Despite such messiness, I believe this trend is inevitable — and ultimately far more liberating. I also expect this new reality, in fits and starts, to be absolutely embraced. Very soon we will have a difficult time comprehending 20th century retail.

We have spent our whole lives focused on price, quality and convenience. We won that war. Anything, anywhere, at anytime and at the best price is now the base level expectation. Deeply personal, values-based shopping comes next, enabled, ironically so, by mass market computing technologies and globe-spanning social media platforms.

We are only now entering a era where we can search and find shops that match our values for whatever we want. We are only now able to instantly declare our purchases to all our friends and followers, telling them and the entire world in semi-permanent digital ink who we are and what we believe in with the very money we spend.

Values will drive sales. Values will drive profits. Values cannot be matched by Amazon, Google or any global conglomerate.

Image courtesy of The Guardian 

At Last, the Last Act for BlackBerry?

Interim CEO John S. Chen
Interim CEO John S. Chen

This may be the exception that proves Betteridge’s Law. ((The law, named for Ian Betteridge, states that any headlong ending in a question mark can be answered no.)) It’s too soon to put a number on the days remaining to the once high flying BlackBerry, but the latest financial developments suggest that the sand is running out.

To recap: Back in September, a major shareholder, Fairfax Financial Holdings, offered to take BlackBerry private for $9 a share. That deal never got beyond a letter of intent and today it fell apart. Instead, BlackBerry is issuing $1 billion (U.S.) in convertible debt securities. Fairfax will take $250 million and plans to place the other $750 million privately. The securities have a 6% interest rate and a $10 conversion price, which becomes worth anything only if shares rise nearly 50% from their current price of $6.55. In addition, Thorsten Heins is out after a couple of miserable years as CEO. John S. Chen, former CEO of Sybase, will take over as executive chairman and interim CEO.

The big question is just what this deal does for BlackBerry. The company has been exploring “strategic options” for months, but doesn’t seem to have found any. BlackBerry doesn’t seem to need the cash urgently. It burned through $368 billion in cash in the quarter ended  Aug. 31 but still had $1.2 billion is cash and equivalents on hand. The company’s plan to reduce operating costs by 50% by February should slow the hemorrhage, though we won’t know until year-end whether it suffered a big drain on cash from massive layoffs in the current quarter.[pullquote]If management had come up with a compelling turnaround plan, firing the CEO would be a very strange way to begin implementing it.[/pullquote]

It seems unlikely that this new financing can do more than delay the inevitable. The company has been trying to sell itself for months with no takers, at least not at a price that the board would accept. If management had come up with a compelling turnaround plan, firing the CEO would be a very strange way to begin implementing it. BlackBerry’s relevance to the smartphone market is trickling away, day by day.

The remaining question is what’s in this deal for Fairfax. Maybe it’s CEO, Prem Watsa, is a true believer who thinks BlackBerry is on the verge of a comeback. The financing is structured in such a way that Fairfax and whomever else it gets to take the BlackBerry debt stand to make a lot of money out of even a modest recovery, especially if the stack price tops $10. But there are less happy possibilities. Writing in the New York Times DealBook blog, Steven M. Davidoff speculates it may have more to do with Fairfax’s standing in an eventual BlackBerry bankruptcy:

One way to look at this investment is that it positions Fairfax and the other investors for a BlackBerry bankruptcy. BlackBerry has no long-term debt on its balance sheet, so this investment would now jump Fairfax ahead of the equity line for controlling BlackBerry in any bankruptcy proceeding. And remember that BlackBerry is a Canadian company, so the bankruptcy would be there. Canadian rules are different than those of the United States, but they do allow the creditors to have a substantial say in any restructuring plan, including approving it.

It’s been a long, strange trip for BlackBerry. But the end of the line is getting close.

 

 

 

Only Apple, Only Google, and Only Amazon

Every company, in order to compete, must have a secret recipe. Something that helps their offering in the market standout from a sea of competitors. Those companies best poised to succeed in the future and adapt as necessary in a fast paced industry such as technology are the ones who know exactly what their recipe is and why it is successful. This is something I believe only a few companies have a strong grasp of.

Sports provides a context that I feel helps to best understand the idea of the secret recipe. All good sports franchises understand this concept. The secret recipe runs deep into a team’s philosophy, playbook, recruiting, culture, etc. While preparing to compete a team must understand what its strengths are and what its weaknesses are. This is the best way to create a plan that not only caters to your team’s strengths but also exploits your opponents’ weaknesses. The best teams in sports build around what makes them unique and creates a path forward based on that recipe.

Three companies in tech–I believe–do this well.

Only Apple
Tim Cook has said a phrase several times over the last few earnings calls that consistently struck a chord with me. Several times  Tim Cook ended with “only Apple can deliver.” Tim Cook understands the secret recipe at Apple, perhaps better than any current CEO of any company.

Apple’s vertical approach, specifically its deep desire as a part of the recipe to own hardware and software, was the single biggest roadblock to  success in the early days of computing. In that time, Apple was an incompatible player in a market that grew based on compatibility. However, where Apple’s recipe was a barrier then, it is an enabler now. Apple has spent the last 37 years perfecting the recipe. Everything from philosophy, playbook, recruiting, culture, etc., has been focused on being the best at this recipe. This recipe, and this recipe alone, yields genuine differentiation. Genuine differentiation is the only way to fight the battle against commoditization.

Apple’s recipe is obvious, it is clear for all to see. Yet extremely difficult to duplicate.

Only Google
Google also has a secret recipe. Google is the largest machine learning project in the history of computing and it is evolving before our very eyes. Only Google can provide the kind of superior search experiences it delivers. Google’s recipe is based fundamentally on cream-of the-crop engineering related to web search, web services, machine learning algorithms, and more.

In fact, I could create an argument that only Google could have done with Android what they did. Android’s role is often overlooked. When Google bought Android with the intention of releasing a free OS for smartphone makers, I do not believe it was targeting it to be an Apple competitor. Android was developed and driven by Google to go specifically where Apple had no intention–the low-end. This is where 85% of Android’s growth comes from. Android was released as a defensive play for Google to go after the market where Apple’s recipe simply doesn’t enable them to go. Android was deeply strategic to keep Microsoft from going after the part of the market Apple never would and it did its job well. ((Google did buy Android prior to the iPhone be released. Regardless of what then CEO Eric Schmidt may have known about the iPhone prior to its launch, I still believe he targeted Android at the low-end and specifically to disrupt and keep Microsoft from dominating mobile devices.))

Google has done as good of a job as any as building its playbook based on its recipe. This again is everything from philosophy, playbook, recruiting, and culture.

Google’s recipe is obvious, it is clear for all to see. Yet extremely difficult to duplicate.

Only Amazon
Amazon is another company with a unique recipe whose success is tied fundamentally to this recipe. Amazon is a retailer, fueled by the best e-commerce experience on the Internet. It has built arguably the best logistics, inventory management, and supply chain infrastructure outside of Wal-Mart. Every business Amazon invests in becomes profitable. Once it does, those profits are re-invested in new businesses that eventually become profitable.

Like Apple and Google, Amazon has a clear philosophy and playbook and its recruiting and culture support the unique recipe.

Amazon’s recipe is obvious, it is clear for all to see. Yet extremely difficult to duplicate.

Concluding Observations: ((Each of the three companies outlined above make up the majority of conversations I have with Wall Street analysts. Fascinatingly Google and Amazon’s secret recipes are viewed as valid long-term barriers for competition yet Apple’s is not. Something I strongly disagree with on yet I’m not surprised by. Until Wall Street can evaluate Apple with a fresh set of eyes, the company will continue to defy their logic and outdated templates. ))
What is interesting is who is left out of this conversation. For example, Microsoft. When I think about this, what strikes me as intriguing is what is Microsoft’s recipe? For a company that did so well for decades it is intriguing to me that it is having so much trouble adapting to current market conditions. Its recipe was built with business customer in mind and that recipe is being challenged. Intel is another whose recipe may need adaptation. What about the PC OEMs, smartphone OEMs, wearable technology companies, Facebook, etc. There are many companies for whom this analysis can be done.

What are the secret recipes of these companies that are not only defensible but difficult to duplicate? Every company has to wrestle with what they are uniquely positioned to deliver and recognize it as a key to strategy planning.

A Note To Commenters

At Tech.pinions we value and encourage spirited debate in our comments. You can argue with our writers and you can argue with other commenters, even vociferously. But we have a very low tolerance for personal insults.

The fastest way for your comment to end up in the bit bucket us to call someone, or even a company, “gay.” In addition to making you sound like Eric Cartman, it gets your comment bounced. Avoid the use of “fanboy” or “fanboi” as well. Even if you are using it without accusing someone of being one, or in jest, it is going to trigger a filter and, at the least, delay posting of your comment until one of the moderators gets around to approving it.

Above all, just be civil to one another and behave like adults.

 

 

 

 

J.D. Power Explains Its Inscrutable Tablet Rankings

jdpower-tabletJ.D. Power caused a bit of a stir today when it put out a new survey in which Samsung had displaced Apple as the leader in U.S. tablet satisfaction. While the headline of the McGraw-Hill Financial unit’s press release declared “Samsung Ranks Highest in Overall Tablet Customer  Satisfaction with Tablet Devices,” the featured table (above) seemed to tell a different story: Apple outscored Samsung in every category except cost.

It gets even stranger when you drill down a bit. J.D. Power weights each of the categories for importance: Performance 0.26, ease of use 0.22, physical design 0.19, features 0.17, and cost 0.16. The unweighted average of Apple’s scores was 4.4 to Samsung’s 3.6. Weighted, Apple outscored Samsung 4.52. to 3.52.

So how did Samsung come out on top? According to a J.D. Power spokesperson, the flashy “Power Circles” chart doesn’t really have much to do with the overall satisfaction. Rather than try to explain this, here’s the relevant section of the email I received in response to my inquiry:

Thank you for your interest in the  2013 U.S. Tablet Satisfaction Study–Volume 2. It’s important to note that award is given to the brand that has the highest overall index score, not the company with the most Power Circles.  In this study, the index score is comprised of customer’s ratings of five key dimensions or factors.

The Power Circles Rankings are something we provide to consumers to understand the relative rank of brands within each of these five dimensions. The Power Circle Rankings  denote the brand that has the highest score within each factor regardless of how much higher their score is.

In the case of Apple in the tablet study, although it did score higher on four out of five factors measured, its score was only marginally better than Samsung’s.  At the same time, however, Apple’s score on cost was significantly lower than that of all other brands.  In comparison Apple’s ratings on cost was more than 100 points lower than Samsung’s.  As such, even though its ratings on other factor was slightly higher than Samsung’s,  Apple’s performance on cost resulted in an overall lower score than Samsung.

In this cost-conscious environment, cost is a key factor in many products purchase and services they use.  Tablets are no exception, where cost is a key driver of the overall customer experience with their device. Although “cost” has the lowest weight among the five factors that drive satisfaction, the notable difference between Samsung’s and Apple’s score in the cost factor was enough for Samsung to rank highest in the study.

Mathematically, this does’t make much sense. Apple outscored Samsung by two “power circles” in each of two categories with a combined weight of 0.48 and by one circle in each of two categories with a combined weight of  0.36. Samsung outscored Apple in one category with a weight of 0.16. Unless the score difference between two circles and four is much, much bigger than the difference between three and five–in which case the whole circles chart is grievously misleading–there is no way Apple’s loss on cost could outweigh it winning in the four other, more heavily weighted, categories.

J.D. Power does not reveal the raw scores by category, but gives Samsung’s overall satisfaction score as 835 (out of 1000) and Apple’s as 833. Curiously, Amazon and Asus, which received only three circles for overall satisfaction, had scores of 826 and 821–only a 1.8% spread between first and fourth place. Asus–two circles–was a fairly distant fifth at 781.

I don’t put much stock in J.D. Power ratings, but they do get used heavily in advertising by whatever company comes out on top. If people pay attention to this sort of “data,” they should be getting more transparent methodology.

 

Facebook’s Conundrum

I used to be very bearish on Facebook. I’d say I’m more skeptically neutral now. Each quarter Facebook has posted significant growth in terms of monthly active users. Yet when we talk to consumers, particularly younger ones primarily in the US, we kept hearing of declining usage. Patrick wrote a great article earlier this year called Facebook is for old people based off things he was hearing from his kids and their friends.

For some time we had been hearing the same with the younger demographic. We did find some interesting related data that even many consumers of all ages who had been on Facebook more than three years noted a decline in their daily usage. So Facebook’s own admission that teen usage on their service is declining came of no surprise.

Before I dive into what I think the conundrum is let’s take a look at their growth as a user base at large then also the growth of mobile users on Facebook.

Screen Shot 2013-10-31 at 3.30.13 PM

The key to this chart is the growth of mobile active users which is now nearly every active user on Facebook. My hypothesis all along for the steady growth of Facebook’s quarterly increase of monthly active users was that emerging markets were coming online and joining the Facebook revolution. We know that many emerging regions have helped spike the adoption of smartphones very sharply over the past 12-18 months. In these regions many of these consumers do not own PCs so their smartphone was their sole portal to the Internet. In fact it is possible that Facebook itself was one of the primary driving factors for many consumers in these regions to get smartphones in the first place, buy a data plan, and connect with the broader world.

Benedict Evans eloquently stated this in a recent tweet:

iPhone is a tool to sell data plans in the USA. Facebook and Whatsapp are tools to sell data plans in emerging markets

This statement hits the nail on the head as to the growth and sustained active users for Facebook. Interestingly the same is true of Whatsapp which is adding about 50m new registered users per quarter. Another is LINE which has added 100 million active users since January of 2013 and is now currently at 280m users. As the world comes online via their mobile devices they are looking to discover and connect. But what happens three years from now when they are mature users. My suspicion is that these types services which acquire users quickly can also lose them just as quickly.

All of these companies are mobile first companies. Facebook used to be a PC social network and now they are a mobile company first and foremost. This is evidenced by their continual growth of mobile ad revenue. It is truly a mobile world.

Facebook’s Conundrum

Plain and simple, Facebook’s challenge is engagement. Early Facebook users find the joy of discovery and connecting with friends, family, those they lost touch with, etc., as a very sticky experience. Facebook’s on-boarding(initial sign-up and discovery of the service) experience is quite quick and clean because fairly quickly you can start connecting with schools, alumni, friends, family, etc. Within a few hours there is a wealth of active social data available to you.

But overtime, that discovery fades and Facebook becomes more about maintaining than connecting. Checking in and the occasional sharing rather than discovery. The challenge for Facebook is to continue to evolve the service to encourage and maintain engagement even after it moves from the discovery phase. [pullquote]Facebook would be a great service if you un-friended 90% of your friends[/pullquote]

One theory I have is that so many of us grew our friends list so big that the amount of noise vs. genuinely interesting things becomes so overwhelming that stop engaging heavily due to that noise. Someone once told me that Facebook would be a great service if you un-friended 90% of your friends. This is a fantastic point but also one that would come with a cost. The value of having a large network is that the timeline is fresh. The problem with that, to my earlier point, is that most of that is noise..but it is fresh noise! If we were to unfriend most our friends except the ones we are truly close to, the content would most likely be more relevant but it would also not be as frequent. So by nature Facebook would be better, but it may not make it that much more engaging.

Contrast this with Twitter. Twitter is my favorite and easily my most time consumer app of my day. I may actually be on Twitter more than any app including email. Twitter has the opposite problem of Facebook in that the on-boarding is an issue. You sign up for Twitter and it takes a significantly longer amount of time to find relevant folks to follow. And Twitter, unlike Facebook, gets better the more content sources you follow. Once you have curated your own network of hand selected interesting content sources, you find your timeline stays fresh and stays relevant. This is why I spend so much time on Twitter. I have hand selected content sources that I find relevant and interesting. I follow 793 sources and the quality of my timeline is so relevant that I do what I can to not miss any tweets by playing catchup throughout the day. With Twitter taking the time to invest in volume sources makes it better. With Facebook taking the time with volume sources arguably makes it worse.

Twitter may or may not reach mass market status. For me and what I do it is an invaluable resource, network, and communication tool. Facebook is clearly a mass market product but they have a challenge. They may or may not figure this engagement problem out. Perhaps they don’t need to. So long as they continue to find relevant ways to deliver engaging advertising on mobile devices and continue to run a healthy business they should be fine. But they are now a public company and investors are relentless about growth. Engagement is one of the keys to Facebooks growth metrics that investors care about. That is why I remain skeptical.

The iPad and PCs

A few years ago I started making the point that our behavioral research findings kept indicating that once consumers started using iPads that their PC usage declined. My overall point was not that the iPad was being purchased to replace a PC but that it was being purchased because they could do more with it than their PC. It covers the basic needs of web browsing, social apps, word processing and more, but also into the areas of e-reader, portable dvd players, art canvas and more. When you see how versatile the app ecosystem has turned the iPad into, it is no wonder it is selling in droves and effecting PC sales.

When I wrote about my experience with the iPad, I took the angle that for most it will become their primary computer. I took a lot less flak this time around than when I made the same claim when the iPad first came out. But there is still the debate. To this discussion of iPad vs. PC i’ll add a little more context.

First, there is a gigantic segment of the PC market who we classify as lite computing users. A few years ago when processor specs got to a point where each increase was hardly noticed many in our industry started saying PC performance is good enough. While I don’t entirely agree, the point was that for most consumers they did have enough performance simply because they weren’t doing a whole of performance intensive tasks with their PC. I blame this on software/apps actually particularly in the Windows ecosystem. This is one of the fundamental reasons why Netbooks took off the way they did. Most consumers realized they didn’t need all the power being pumped into PCs at their high price points and they reasoned a Netbook was all they needed. This didn’t last long and I blame the form factor and the apps.

Enter the tablet. All the same fundamental observations remain yet this form factor is more inviting than a PC and the touch interface makes it a delight to use. The app ecosystem grows and depth and breadth turn it into something much more than a PC while all the basic PC tasks remain intact. This realization by most consumers that their usage with the iPad remained high and PC usage declined was a key point.

This is why for many consumers the iPad is easily the mass market PC for the masses. In fact, with the iPad in the lead, tablets are becoming and will increasingly become the most important software development platform for the advancement of personal computing.

Based on how I look at things, I decided to start tracking the iPad as a segment with the overall PC segment. Based on my estimates of the mix of full size iPad’s in the market over the past few quarters, I estimate that the full size iPad to account for 8% of the PC sales over the past few quarters. And with PCs declining and my optimism that the iPad Air will move in significant volumes, I expect Apple’s iPad share of computing to increase.

Screen Shot 2013-10-31 at 2.19.23 PM

Apple’s Tablet Market Share

As I pointed out last week, we have to be very careful with statistics that generalize data. Like the one making headlines the past few days stating that Apple’s tablet market share has dipped below 30%.

As I pointed out last week, when general statistics that are not contextualized get thrown around it can mislead readers. So let’s look at the updated data doing what I propose, which is to separate legitimate tablets–devices being used for some form of computing function–from the tablets which are largely dedicated devices competing more with portable DVD players, e-readers, etc.

Screen Shot 2013-10-31 at 6.20.06 AM

As you can see, if we just break out the branded OEM segment, Apple’s tablet market share is 46%. An important point, however, is that Samsung has been steadily gaining tablet market share. Our estimates are that Samsung’s lower-cost tablets like the 7″ Galaxy Tab are still a healthy majority of that mix. The Galaxy Tab 7″ is now lower than $200 in the US and in many other markets as well. In fact, ‘other’ as a category slightly declined last quarter going from 38% of shipments to 35% of shipments. Samsung went from 18% to 20% sequentially and it helped the branded OEMs gain against the non-branded white-box tablets.

Tablet’s are slowing, this is true. However, as we and others have routinely pointed out, tablets are becoming extremely cyclical. At least the branded OEM tablets are. Companies like Samsung, Amazon, Apple, etc., continue to experience that cyclicality in the market.

Those who raise concerns that developers may flee to Android in tablets simply because of market share are fooling themselves. The dedicated tablet apps on Android are few and far between and I see no evidence that is changing. We must remember this about Google when we think about Android as computing platform competition. Google makes most of its money off search. Anytime a consumer is spending time in an app, they are not searching the web. Apps are quite contrary to Google’s business model. Even if you take the angle that they are learning about you as you use certain apps, that is only true of certain apps. Most time spent on Android devices is playing games. Most revenue from Play stores come from games and in app purchases.

The tablet becoming a computing platform is one of the most important market developments in the advancement of personal computing. This is why I hope Microsoft makes headwinds here. We need actual computing platforms to advance computing. Android on tablets is not that.

Apple’s Definition Of “Winning”

We are winning with our products in all the ways that are most important to us, in customer satisfaction, in product usage and in customer loyalty. ~ Tim Cook, Apple earnings call

Customer satisfaction. Product usage. Customer loyalty.

Is Tim Cook right? Is Apple really winning in those areas? And is that really what’s most important?

Customer Satisfaction

Based on their most recently published research, ChangeWave measured a 96% customer satisfaction rate among iPhone users and a 99% customer satisfaction rate among those who owned iPads. Impressive, to say the least.

Product Usage

Experian reported that iPhone users spend an average of 53% more time each day on their phones than Android phone users. Nearly two-thirds of iOS devices are already running iOS 7. The App Store now has over 60 billion downloads. And Apple has nearly doubled its total payout to app developers this year — now at $13 billion, up from $7 billion in January.

“Regardless of what you might hear or read about how many are bought or sold or activated, iPad is used more than any of the rest. And not just a little more, a lot more. The iPad is used more than four times more than all of those other tablets put together.” ~ Tim Cook

Now before your read on, stop and think about that for a moment. The iPad is used four times more than all other tablets put together. Astounding.

Industry analyst, Alexander, noted that “In an increasingly bifurcated tablet market, Apple has yet to experience any serious competition for the premier customer, particularly those users wanting to do more with a tablet than watch videos, surf the Web, and do email….”

If usage is the defining criterion, then there are actually very few tablets that are directly competing with the iPad.

Customer Loyalty

Based on the most recently published research, Kantar measured a 92% customer loyalty rate among Apple customers, significantly higher than that of the competition.

Summary

Based on the above, I think it’s fair to conclude that Apple is “winning” in Customer Satisfaction, Product Usage, and Customer Loyalty. But is that what matters? What about things like profits, growth, innovation, and market share? Aren’t they what really matter?

But, Apple Is Not Growing…

True enough. Apple has not released any significant new products over the past year and, consequently, they have not grown over they past year either. But they have remained extremely profitable.

apple-profitsFor example, Apple’s sales of 33.8 million iPhones earned more than the combined sales of 211.2 million phones sold by the rest of the world’s top 5 phone makers.

Still, profit without growth is like sex without love. It’s an empty experience…

…but, as empty experiences go, it’s one of the very best.

Eventually, Apple will have to grow or die. But in the meantime. Apple, can take solace in the fact that they’re making money hand over fist, while simultaneously screwing the competition, to boot.

But, But, Lack Of Innovation…

Many analysts covering Apple are bearish, citing ‘dwindling catalysts.’ But seriously, who are they to judge? Those self-same analysts missed every catalyst that Apple ever caught on their ride from last to first.

They are ill discoverers that think there is no land, when they can see nothing but sea.” ~ Francis Bacon

Apple naysayers act like small children who think that if something is out of sight, it ceases to exist. Just because THEY can’t see what’s coming down the pike doesn’t mean that Apple and others can’t see it. As always, it’s a question of vision. And I’d put Apple’s vision up against the analysts’ any day of the week.

But, But, But, Growth Should Be Constant, Continuous, Ever Upward…

Really? Show me an example of something healthy, where growth was constant and ever upward and I’ll show you the exception to the rule.

A child of five would understand this. Send someone to fetch a child of five. ~ Groucho Marx

NO ONE is always at their best. Well, I take that back…

Only the mediocre are always at their best.” ~ Jean Giraudoux

Sun Tzu said that “Energy may be likened to the bending of a crossbow; decision, to the releasing of a trigger.” A bowman needs to pull the bow before releasing the arrow. The arrow won’t go very far if he doesn’t take the time and effort to do so. Similarly, a company needs to do the preparation before releasing a new product.

I means, seriously, do I really need to cite Sun Tzu in order to make this point? New products take time to prepare. Duh.

There Is A Season For Everything

You’d be a pretty poor farmer if you planted the seed and then walked away before the harvest. And you’d be a pretty poor investor if you thought that every season was harvest season and no season was to be set aside for the planting.

Don’t judge each day by the harvest you reap, but by the seeds you plant. ~ Robert Louis Stevenson

Apples critics deny the realities of life. They want rain without thunder and lightning. They want crops without plowing the ground. ((Inspired by Frederick Douglass))

When clouds form in the skies we know that rain will follow but we must not wait for it. Nothing will be achieved by attempting to interfere with the future before the time is ripe. Patience is needed. ~ I Ching

I mean, are you prepared to argue with the freakin’ I Ching?

I didn’t think so.

When you walk through a farm, some see the (beauty), some only observe the manure. ~ Henri Matisse

Manure is often used to fertilize crops. If you can’t stand the sight of manure and you can’t patiently wait for the seed to ripen, don’t become a farmer. And if you can’t stand the turmoil of the market and you can’t patiently wait for an investment to mature, don’t become an investor.

Warren Buffett said Apple is run ‘for the investors who are going to stay, not the ones who are going to leave.’ Which are you? Do you walk away in the Spring or do you wait for the Autumn to arrive?

But, But, But, But, market share, Market Share, MARKET SHARE!!!

If you see the world in black and white, you’re missing important grey matter.” ~ Jack Fyock

Apple regularly fires some of its customers for the sake of empowering its target market. News Flash: Apple has been “ignoring” a large portion of its potential customer base since 1996. They could have done worse.

For example since Google’s IPO, Google is up 833.8%. On the other hand, since Google’s IPO, Apple is up 3200.2%. Not bad for a company that doesn’t cow-tow to market share.

What the heck do you think the phrase “target market” means anyway? If you “target” everyone, you target no one. Seems to me that Apple is aiming for the premium market and their aim, so far, has been spot on.

And remember, just because YOU’RE not the target market doesn’t mean there is no target market.

The Critics Have Big Buts

“Critics? I love every bone in their heads.” ~ Eugene O’Neill

There seems to be a law in human nature which draws us to passionately condemn the preeminently successful. For every action there is an equal and opposite critical reaction.

The critics are always ready to give Apple the full benefit of their inexperience and are never without multiple ways for how Apple should spend its wealth. Some critics even think that they are more powerful than God. After all, Jesus was only able to turn water into a wine but critics are able to turn anything they focus upon into a whine.

Look, everyone has the right to be stupid. But some of Apple’s critics are abusing the privilege.

Watch Carefully What Apple’s Competitors Are Complaining About

Companies like Samsung and Microsoft spend their time criticizing those very aspects of Apple that they would most like to emulate. Samsung mocks Apple’s customer’s for standing in line? Microsoft mocks Apple’s tablets for their inability to do “real” work? Don’t kid yourself. They’d both cut off your right arm to have what Apple has.

Watch what people are cynical about, and one can often discover what they lack. ~ George S. Patton

Turns out that copying products is easy. Copying the culture that produced those products is hard.

Investors

The eight most terrifying words for any CEO must be: “I’m Carl Icahn and I’m here to help.”

Sheesh, thanks but no thanks.

And as if Carl Icahn weren’t bad enough, other investors are demanding that Apple lower its prices in order to capture more market share. Market share sounds great and all, but what they’re really talking about is a price war. As Pliny the Younger put it, “An object in possession seldom retains the same charm that it had in pursuit.” A price war is a delightful thing to those who don’t have to participate in it, but a rather frightful thing for those who have to pay for it.

When the gods wish to punish us, they answer our prayers. ~ Oscar Wilde

Sadly, A CEO must always be prepared to defend his company against his investors.

The right to be heard does not automatically include the right to be taken seriously. ~ Hubert H. Humphrey

Lessons To Unlearn

We should be careful to get out of an experience only the wisdom that is in it—and stop there; lest we be like the cat that sits down on a hot stove-lid. She will never sit down on a hot stove-lid again—and that is well; but also she will never sit down on a cold one anymore. ~ Mark Twain

I think that most critics are like a cat that sat on a hot stove-lid. They got burned when Apple fell in the nineties, misdiagnosed the cause of that failure as missing market share, and they haven’t stopped lecturing Apple on the wrong lesson ever since.

Memory is the greatest of artists… ~ Maurice Baring

Meanwhile, the very actions that the critics are begging Apple to stop taking are also the very actions that have made Apple successful for the past 13 years. It’s like telling a football coach that wins Super Bowl, after Super Bowl, After Super Bowl, that he’s doing it all wrong.

New Facts Demand New Conclusions

Logic?” Jim says. “What’s that?” The professor says, “I’ll give you an example. Do you own a weed eater?” “Yeah.” “Then logically speaking, because you own a weed eater, I presume you have a yard.” “That’s true, I do have a yard.” “I’m not done,” the professor says. “Because you have a yard, I think that logically speaking, you have a house.” “Yes, I do have a house.” “And because you have a house, I think that you might logically have a family.” “Yes, I have a family.” “So, because you have a family, then logically you must have a wife. And because you have a wife, then logic tells me you must be a heterosexual.” “I am a heterosexual. That’s amazing! You were able to find out all of that just because I have a weed eater.”

Excited to take the class, Jim shakes the professor’s hand and leaves to go meet Bob at the bar. He tells Bob about how he is signed up for Logic. “Logic?” Bob says, “What’s that?” “I’ll give you an example,” says Jim. “Do you have a weed eater?” “No.” “Then you’re gay.”

Apple’s critics seem to rely upon a similar chain of “logic” to predict Apple’s future. Apple doesn’t have majority market share (a weed eater) so they must be doomed.

We should all be so lucky as to be as “doomed” as Apple is.

After a battle in the War of the Spanish Succession (1701–14) Villars, the defeated commander of the French forces, was justified in writing to King Louis, “If God gives us another defeat like this, your Majesty’s enemies will be destroyed.” His judgment was prophetic in so far as the battle proved to have cost the allies their hopes of victory in the war.

Apple could rightfully claim nearly the same as Villars. Should Apple “suffer” another “disastrous” year like 2013, their competitors will be utterly destroyed.

Look, maybe Apple is doomed, maybe they’re not. But Apple’s critics have got to start coming up with better reasons for predicting Apple’s demise ’cause the same tired old reasons they keep trotting out and using over and over again just ain’t cutting it.

Attention, Attention! The naysayers have been predicting Apple’s demise since 1997 – and for the very same reasons. All the while Apple, by ignoring their critics, has merely grown to become the richest company in the free world.

Criticize Apple all you want, but please, come up with something that hasn’t been proven wrong year after year after year for the past 13 years.

“We’ve clearly never seen a tech company like this before. Perhaps it’s time to stop using tired PC tech company metaphors to predict their future.” ~ Ben Thompson

Listening For Genius

The principle mark of genius is not perfection but originality, the opening of new frontiers.” ~ Arthur Koestler

If a company values its profits more than its vision, it will first forfeit its vision and subsequently forfeit its profits, too.

Talent hits a target no one else can hit. Genius hits a target no one else can see.” ~ Arthur Schopenhauer

Look, there’s risk in everything. But Apple has proven itself successful by doing things their way.

I’d rather be a failure in something that I love than a success in something that I hate. ~ George Burns

The Stoic Philosopher, Thales, when asked “What is difficult?” replied “To know oneself.” When asked “What is easy?” he said “To give another advice.”

Critics shout boldly, but genius speaks in a whisper. Perhaps, in lieu of shouting instructions at Apple, we should be quietly listening and learning from them, instead.

Why Motorola Won’t Offer a Modular Phone

Project Ara photo (Motorola Mobility)

Motorola created a lot of buzz this week with its announcement of Project Ara, a sort of Lego kit mobile phone that would allow users to pick and choose components. I know this is going to be a disappointment to the folks who build great things from Arduino boards and Raspberry Pi computers, but Project Ara is never going to happen, at least not as a commercial product.

The modular phone is an appealing idea, but there are so many things wrong with it in practice that it’s hard to know where to start. So I’ll just list a few:

Integration. When you are building a desktop PC, you can afford to be sloppy in the efficiency of the design and make of for its shortcomings with pure power, which makes the traditional open design of desktops possible. Laptops offer less leeway, and handhelds provide no tolerance at all. Today’s mobiles are masterpieces of integration. Hardware components are carefully selected and the software painstakingly optimized so that everything works together with maximum efficiency.[pullquote]Today’s mobiles are masterpieces of integration. Hardware components are carefully selected and the software painstakingly optimized so that everything works together with maximum efficiency.[/pullquote]

The iPhone is probably the extreme example of this. When Apple started making its own system-on-chip processors, it eliminated all the components from the ARM reference designs that it would not be using. No SD slot, so no need for an SD slot memory controller. Trimming components translates to a smaller die size and lower power consumption; every milliwatt counts.

Modular design flies in the face of this optimization. The software and SoC have to be designed to accept whatever hardware the user chooses. This means that the operating system cannot be optimized specifically for the hardware in use, a process that all good Android OEMs have to go through. And lack of optimization is going to carry a price in performance, battery life, or both.

Size. Modular systems are necessarily bigger than integrated ones. Modules have to be at least partially self-contained and they must have a way to hook up with each other. Enclosures and connectors add bulk and weight. Just making the battery removable adds a couple of millimeters to the thickness of a handset. A modular phone is going to be much bigger than an integrated phone of the same capabilities.

Physical Integrity. I love Lego. It can be used to built fabulous models. But they are models, not the real things as you find out if you ever drop one. It would be very hard to design any sort of snap-together modular phone that provides the sort of structural integrity and durability we expect for mobile devices. You can improve things by increasing the strength of the “endo”  and connectors that hold it all together and, but again you will pay a penalty in size and weight.

I find the idea that there would be much of a market for a modular phone a dubious one. Most people accept the idea that the engineers and designers responsible for handsets have a better idea of how the choose components and but them together than the average user. But even for the makers who really want the freedom to roll their own designs, the modular phone just has too many disadvantages to ever be practical.

iWork vs. Office: Apple Chooses, Microsoft Faces a Dilemma

iWork photos (Apple)

Apple took a big step last week when it made its iWorks apps–Pages, Numbers, and Keynote–free to buyers of new iPhones, iPads, and Macs. But the redesign of the programs themselves may have been a bigger, if less commented-upon move. Apple has finally decided what it wants iWork to be, and the decision should cause some real unease at Microsoft.

Apple has always been ambivalent about these productivity apps, first announced for the Mac in 2005. On the one hand, it seemed to want to challenge Microsoft Office. On the other, it wanted them to be simpler tools for the rest of us. As is often the case with indecision, Apple landed squarely between stools. Although the apps, particularly the Keynote presentation program, were embraced by some professionals, they never posed a serious threat to the domination of Office, even on the Mac, in business. At the same time, the desktop programs, which were last updated in 2009, were more complex than necessary for most consumers.

The rise of the iPad forced a choice. Apple knows that its customers are increasingly using iPad as primary computing devices, so it is promoting the use of its tablets to create documents, not just look at them or edit them lightly. To promote this, it has redesigned both the OS X and iOS versions of the software to be as alike as possible in both appearance and function.

Pages Mac and iPad screenshots

A Rich UI for the Mac. The apps are still significantly different. The OS X version has a considerably richer user interface that takes advantage of the larger displays and pixel-precise selection available on Macs. The only real storage option available on the iPad is iCloud, though that does make syncing documents between devices simple (The real time updating demonstrated in the Apple keynote was an illusion; in the real world, it takes up to a few minutes for documents to sync across the internet.) And the Mac, you has access to all the fonts installed on your system, but if you go beyond a core selection, substitute fonts will be used on the iPad (I’m assuming that no one wants to do much of this on an iPhone) because on iOS, the fonts you get are the fonts you have. But in many key ways, the apps are remarkably alike on different types of devices.

Of course, the price paid for this is a considerable simplification of the OS X versions. This set off predictable protests from the vocal minority of professional users who had come to depend heavily on the advanced features. Apple support forums filled with complaints, especially about Pages. (Keynote, perhaps because it is widely used internally to create Apple presentations, underwent less change. No one seems to much care about Numbers.) Seth Godin, who understands why Apple made the choices it did, complains, “Features and the goal of building for a craftsman are exchanged for the cross-platform ease and gimcracks that will please a crowd happy enough with free.”

Upsetting the faithful. It is unfortunate that in simplifying iWork, Apple has upset some of its oldest, loyalist customers, who may now need another program for creating complex documents (and it will be interesting to see where they turn, but that’s another article.) Apple wants iWorks to be software for the mass market, a customer base that increasingly wants to create on their iPads. For most of them, iWork is good enough on the Mac and the best thing available on the iPad. Consumers who don’t need to create (or handle; iWork apps can read Office document formats, but the conversions are often imperfect) large or complex documents or formula- and macro-laden spreadsheets don’t need Office. And if they want to switch freely between Macs and iPads, they don’t want it.

Microsoft, meanwhile, doggedly refuses to get it. In a blog post following the Apple announcement, communications chief Frank Shaw wrote:

And so it’s not surprising that we see other folks now talking about how much “work” you can get done on their devices. Adding watered down productivity apps. Bolting on aftermarket input devices. All in an effort to convince people that their entertainment devices are really work machines.

In that spirit, Apple announced yesterday that they were dropping their fees on their “iWork” suite of apps. Now, since iWork has never gotten much traction, and was already priced like an afterthought, it’s hardly that surprising or significant a move. And it doesn’t change the fact that it’s much harder to get work done on a device that lacks precision input and a desktop for true side-by-side multitasking.

As Harry C. Marks wrote in a Tech.pinions post yesterday, Microsoft has long avoided making hard choices between consumers and enterprise, between tablets and traditional PCs. The result is “no compromises” hardware and software that, in fact, represent the most dreadful compromise of all. So far, Office has remained true to its heritage.  It exists primarily to serve enterprise and government users, who are dependent on such features as very sophisticated, fine-grained change tracking and citations. But even the touch-enhanced Office 2013 remains all but unusable on a pure touchscreen tablet.

Choices for Office. Microsoft has promised touch-first versions of Office apps next year for both Windows and iOS and Android tablets, and it will be very interesting to see what choices they make. The complex, multilayered interface has to be simplified drastically, and unless Microsoft has found some until-now unimagined UI trick, that means that a lot of features are going to have to be stripped out.

But Microsoft has far fewer degrees of freedom than Apple. For one thing, Office is crucial to the company’s continued prosperity, while iWorks wasn’t even a footnote for Apple. Apple could afford to throw iWork power users overboard because, despite their passion, their numbers are small, while the users of advanced Office features are the heart of the market. Microsoft can afford to lose the Office consumer market, but it cannot ignore the growing use of tablets, most of them Apple’s, in the enterprise.

Will a redesigned Office be simple enough to work well in a touch-only environment? Will it still be Office in more than name? Apple has made its choice, though, in fairness, it wasn’t a terribly hard one. Microsoft has no easy way out of its dilemma.

 

The iPad Air –A Truly Mass Market Personal Computer

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With the iPad Air, Apple has created the world’s thinest and lightest full size tablet. And by adding their 64-bit A7 processor they have made it extremely powerful as well. After using the iPad Air for the past week I’m convinced that it is the perfect personal computer for the masses.

Thinnest and Lightest
I use more tablets of different sizes and operating systems than I care to admit. At last count I now have in my possession 12 working tablets of different varieties. When I compare the iPad Air with all of these and others on the market it is clear that Apple’s claim’s that the iPad Air is the thinnest and lightest full size tablet on the market is accurate. The new iPad Air is so light you have to feel it to believe it.

The iPad Mini weighs .69 pounds and the iPad Air weighs 1 pound. But when you hold them at the same time the weight difference feels negligible. The iPad Air distributes its weight in a way that holding it and using it feels about as light as the iPad Mini.

The iPad Air is easily the best designed iPad yet.

Notebook or iPad?
Every year, I field many questions from friends and family on whether I can recommend that they buy an iPad rather than a new notebook. Of course, this question has to be followed with another question related to how they primarily use their notebook. If you sit at a desk all day, use a keyboard and mouse to input, and run software that requires a hard-core Intel or AMD processor then you probably need a notebook or desktop. However, for most consumers when they are at home or even if they don’t have a desk job, the iPad is the ideal personal computer.

The iPad has become as versatile as any personal computer on the market. In fact, any time I need to be reminded of the role of the iPad, I remember a quote from Steve Jobs when it was launched:

“The iPad is more intimate than a notebook and more capable than a smartphone.” — Steve Jobs

The iPad, iOS and the entire ecosystem of over 470,000 iPad apps all built with a touch interface are simply easier to use, less intimidating, and often more empowering than many apps that exist only on notebooks and desktops. My kids use the iPad to play games, read, create movies, make music, paint and draw, and a host of other things they would never be able to do on a PC with its mouse and keyboard input. The iPad is not computing dumbed down; it is powerful computing simplified. And simple solutions require sophisticated technology. That is exactly what the iPad and the new iPad Air is–powerful computing. And for many consumers the iPad Air will be the most empowering personal computer they have ever owned.

I am a heavy PC user. So I tried an experiment. Over the past week, I used the iPad Air to do many things that I normally only do on my MacBook Air. I used the iPad Air to make movies using iMovie. I used it to record some music in GarageBand. I used it to respond to emails, some very long. I used it to create and edit documents for our clients. I used it to write articles for our site here. In all of these use cases and more the iPad exceeded my expectations as a creation tool.

Apple has strengthened the value proposition of the iPad and the new iPad Air as a mobile personal computer by offering iWork and iLife apps for free. Now the iPad can be used  out of the box to create movies, make music, create documents and presentations, and a lot more, at no extra cost. Unless you are a Microsoft Office power user, iWork will more than meet your needs. ((iWork can open Microsoft Office documents and export them in Office formats as well. photo )) iLife opens the door to a creative world unparalleled on any other tablet platform. Where iWork may have a competitor on other platforms, iLife does not. When it comes to the creative arts, the iPad is unparalleled from a software standpoint.

The iPad has proven to be more than just a simple consumption device. A lot of that has to do with the breadth and depth of apps particularly in the creative arts for the iPad. While it is true that existing iPad owners benefit from all the software advancements I mention above, the new design of the iPad Air and the power of the A7 make it more usable than ever. And for most, this may be the only personal computer they really need.

The A7 and Future Proofing
When recommending products to consumers I always encourage them to look at it as an investment. Whether someone is buying a PC, TV, smartphone, or tablet, it is best to get one that is worthy of your money and will last. What makes the iPad Air interesting–from the view of personal computing–is the A7 processor.

Much has been written about the power of the A7. Creativity apps like iMovie and GarageBand run extremely smoothly and fast on the A7. I made a 4-minute high definition movie on the iPad Air and it exported in just under one minute. When I attempted the same on the iPad 4 it took just over three minutes. When it comes to exporting movies or even compressing video or a photo to upload to the web, send in an email, or even using AirDrop the A7 does it all faster.

The A7 being a 64-bit processor has laid a new foundation in mobile computing and it is one will help the iPad Air stand the test of time. There was a time not too long ago when PC purchasing advisors recommended to consumers to buy as much processor as they could afford. These were the days when megahertz were going to gigahertz. While I don’t recommend consumers buy products solely based on specs, I think the same advice applies to the iPad Air. The A7 helps future proof the iPad Air helping to extend its life and the performance of the tablet well into the future.

For many who do not depend daily on a desktop workstation or portable desktop (notebook) the iPad Air will more than suffice as their everyday personal computer. Thanks to the holdable form form factor the iPad is much more mobile than a notebook as well. The iPad Air starts at $499. Here is a link to compare prices and specs across the iPad lineup.

Apple Isn’t Hurting Microsoft, Microsoft is Hurting Microsoft

We always hurt the ones we love, and nobody loves Microsoft more than Microsoft. In a recent blog post, Frank Shaw, the company’s Corporate Vice President of Communications, took aim at Apple’s October 22nd keynote–specifically the part where Apple made its iWork suite of productivity applications free for new Mac and iPad/iPhone buyers.

Now, since iWork has never gotten much traction, and was already priced like an afterthought, it’s hardly that surprising or significant a move. And it doesn’t change the fact that it’s much harder to get work done on a device that lacks precision input and a desktop for true side-by-side multitasking.

There are many parts of this post that read like Shaw wrote them half curled up on his bathroom floor, slowly rocking himself back and forth, so it’s entirely possible he couldn’t see the differences between his company and Apple. I’ll try to spell them out.

Apple is not a software company. It is a hardware company that makes software. Want to know why Apple didn’t release a cheap-o plastic iPhone running lower-end hardware for the Chinese market as so many tech pundits wrongly assumed would happen? Margins. And because Apple derives so much of its profits from hardware, it’s able to give away its operating system and first-party apps without taking a significant hit. In fact, it may help boost sales of desktops and laptops if potential customers learn they won’t have to shell out money every time they need to update.

On the other side of the coin, there’s Microsoft, which obtains a solid chunk of its revenue through software (Windows and Office), as well as through its enterprise deals. There is no right way or wrong way here. Both methods are completely valid as long as one knows what one is doing. This is where Microsoft starts to fall apart.

Since Jobs’s return to Apple in the late nineties, the company has been primarily a consumer electronics company. The iMac, iPod, iPhone, iPad, MacBook, and all the rest were designed for average consumers (read: non-enterprise customers). That’s not to say businesses haven’t benefited from these devices, but they were not the original targets. Apple knew that in order to penetrate the business sector, it had to become a hit with consumers first, which it inevitably did and led to a massive increase in the BYOD trend.

Unfortunately, Microsoft hasn’t had as much success in the consumer market since the early 2000s. What was once a major player in the smartphone arena pre-2007 lost out on market share and customer loyalty when the iPhone hit the scene. The soon-to-be-ex-CEO’s arrogance at the time also did not help things. Microsoft introduced tablets in 2002 and they went very few places except certain industries, like engineering and medicine–and they weren’t even that widespread there, either. It wasn’t until Apple unveiled the iPad, complete with its own App Store, that non-business consumers saw the benefit of a personal touchscreen slate device.

It’s not the nineties anymore. Microsoft can’t rest its laurels upon its ubiquity, especially in the new areas being dominated by Apple and Samsung. In the phone and tablet markets, Microsoft is, sadly, irrelevant. But why? Where did it go wrong? It wasn’t just because it skipped a few cycles and emerged on the scene later than it should have. And it’s not because Microsoft isn’t capable of making good hardware. It comes down to one simple problem that has held the company back for a long time: Microsoft refuses to choose.

Apple chose to focus its products on the consumer market. Even its Pro desktops and laptops, which are used in high-level industries like video and audio production, are accessible enough for customers of all types, not just professionals. Its operating system, Mac OS X, is a one-size-fits-all regardless of your needs (servers excluded). There are no versions for “Home”, “Business”, “Home Plus Except on Weekends and the High Holy Days”, et al.

Microsoft, however, tried to have it both ways. It wanted to retain the grip it had on the consumer space in the 1990s, while also catering to its loyal business users and what it got was an operating system and a tablet/laptop (tabtop? laplet? tabletoplet?) with an identity crisis. By refusing to make a decision as to which direction the company should go–consumer vs. business–it alienated both segments equally.

Windows 8, specifically the RT version, doesn’t know what it wants to be. Is it a touchscreen OS? If so, why does the user have to access legacy Windows to run certain apps? And if old-style Windows is there, why doesn’t it run regular Windows applications like Windows 8 proper does?

As for the Surface, Microsoft can pretend its creation is a tablet all it wants. Frank Shaw’s imagination certainly hasn’t slowed down:

And it’s why the Surface is the most productive tablet you can buy today. We also knew that it would make our competitors take notice. That as consumers got a taste of devices that could really help them get things done, they would see alternatives as being more limited.

If you watch the video Tim Cook introduces about 62 minutes into the keynote, it really drives home the fact that the iPad is as productive as its owner wants it to be. The device is not limited by an extra attachment, nor must it be situated in a single position in order to be useful. Would combine operators be able to manage their machines if they had to balance their tablets on their laps with a flimsy keyboard attached? Are desktop tap targets still as tappable when you’re trying to see them while navigating a shipwreck? How long will you be able to hold a Surface one-handed while drawing plays on the sideline so the rest of your team can see?

The reality is the Surface tries to be a laptop and it tries even harder to be a tablet, but it doesn’t accomplish either particularly well. The running joke among the tech press has been that Microsoft’s “no compromise” approach is actually one big compromise. The sad reality is that it’s not a joke. The other reality facing Microsoft is that one of its two major cash cows is no longer the reason people buy its devices.

[The Surface and Surface 2] come with full versions of Office 2013, including Outlook, not non-standard, non-cross-platform, imitation apps that can’t share docs with the rest of the world.

You used to buy a Windows PC because everyone had Windows PCs. All the major programs were written for Windows and it became the de facto standard for almost every office and home on the planet. Windows ran the world and because of its wide reach, we all grew accustomed to the Office suite of applications. Writing a report? You used Word. Needed to do a presentation on plant life in the rainforest? PowerPoint and its atrocious sound effects were there to add glass-shattering emphasis to that clip art on slide two. Your email was stored in Outlook and your numbers were crunched in Excel and there was nothing you could do about it because nothing else came close to the power and reach of Microsoft Office.

Then came the iPad.

Netbooks all but died out. PC sales declined. Customers opted for small and lightweight vs. big and cumbersome. And all the while, PC makers and Microsoft assumed customers would come crawling back because the iPad was for fun, not work.

While Apple may not have the most capable productivity software suite around, its App Store has opened the gate for independent developers and larger software houses to fill the gap left by Microsoft’s absence. No one seemed to care that Microsoft Office was missing and they certainly weren’t won over when it finally arrived for only the iPhone and as a subscription service.

As for the other work you’re able to get done on the iPad, name an industry and you’re sure to find an app (or six) that perform the work as easily, if not more so, than their desktop counterparts.

Apple chose to attack a market it knew it could penetrate by creating beautiful, focused products that ran easily accessible software. Does Apple make the best software? Not always, but the user experiences afforded by its devices combined with fabulous third party software more than make up for its shortcomings.

Microsoft chose to hit two different segments at once. Windows 8 promised the same great taste people have enjoyed for over 20 years with the new shininess of Metro. Its refusal to commit to one OS, or at the very least one OS per form factor a la Apple, left a sour taste in customers’ mouths. They were confused and angry and Microsoft was forced to back-pedal on some of its more “egregious” decisions. Businesses are just starting to upgrade from XP to Windows 7 and it doesn’t look like Windows 8 is even on their radars.

On the hardware side, the Surface hit the same flat notes as Windows 8 did. Customers didn’t want a heavy, widescreen tablet with a bulky cover they couldn’t operate with one hand. Oh, but it has Office? How about OmniFocus? Editorial? GarageBand? The countless niche apps one may need to perform certain specialized tasks? Microsoft has yet to learn that productivity does not begin and end with Office.

So, with Microsoft’s dominance waning and its software sales slipping, where does it go from here? It could prove worthy competition for Android in the low-end smartphone market, but it will still continue to struggle against Apple in the high-end. But other than that gamble, there’s nothing about the company’s current consumer strategy that’s hope-inducing–and yours truly is doing his best to remain hopeful. Some might chalk it up to a lack of focus or too much focus on the wrong things, but Microsoft’s biggest challenge right now is making up its mind.

Its dominance in the business sector is still relatively unchallenged, but times are changing and the Surface isn’t generating the numbers it needs to thrive with consumers. Which market does Microsoft want to focus on? Until it’s able to answer that question with anything other than “both”, it will continue to stumble along. The question then becomes for how long?

Stop Believing Apple Invents Stuff! Where I Interview The Biggest Android Fanboy In The World.

He is known simply as Charbax. You can find him on Twitter, on Youtube, and very often in the comments section of any post that trashes Android. He is in my opinion the biggest Android fanboy — fan, fanatic, believer, evangelist — in the world. His numerous first-hand, homebrew videos showcase the incredible innovation occurring across the Android ecosystem, be it in China, in Europe, or America.

What fuels his passion? Apple makes gorgeous physical products, easy to love. Android, by contrast, is a string of ones and zeros, cold, unfeeling code. There are many more questions, of course. If Android is “winning” then how does he explain Apple’s massive profits? Or the pre-eminence of iPad? Why care about an OS whose primary reason for being is not to get more people online but to capture more personal data to sell to advertisers? And what of Google’s continued moves to tighten control around this once aggressively marketed “open” platform?

Charbax arrived in San Francisco last week and did not shy away from any of my questions — though his numbers are often suspect.

Disclosure: I have followed Charbax online for at least three years. As that rare pundit who has gone on record stating that Android is, well, not very good, and almost certainly to be eclipsed by a far more functional and cohesive platform, I have faced his wrath many times over. Watch his videos, however, and you must admit that no person, no company — not even Google itself — has so well documented the stunningly rapid spread of Android throughout the globe, and into all manner of computing devices, be they phones, tablets, toys, cameras or sensors. If Android does come to rule our world, as Charbax absolutely believes it will — maybe already has — then history will lean heavily upon his work.

Author note: I have edited responses for the sake of brevity and clarity.  

His real name is Nicolas Charbonnier. He is from Denmark. He tells me that he funds his work primarily through his well-trafficked pro-Android website and popular Youtube channel.

What explains the rapid global spread of Android?
Android is the first embedded Linux for smart devices platform that got enough investment to reach full usability.

What are some current examples of innovative development taking place with Android?
Android is reaching sub-$25 Phones this year and it’ll be in sub-$15 phones next year. Android has reached sub-$20 Desktop HDMI Sticks now and it’s going to reach sub-$10 desktop prices next year. Without Android, there would be nothing of interest going on in the tech world.

Android is enabling the next 5 Billion people access to smart technology. You can fly to China and buy an iPhone 5S copy on MediaTek MT6572 (dual-core ARM Cortex-A7, Android 4.2.2) for the same total price as buying a “real” iPhone 5S in America.

It seems as if only Samsung has profited from Android. What if they abandon the platform?
This is the dream of the same morons that sank Nokia and Blackberry. Samsung is hugely profitable only thanks to Android. Android subsidizes Samsung, Sony and LG’s HDTV business and other businesses. Companies make money on Android because it’s free, open source, and optimized for the most advanced consumer products.

Are you affiliated with Google?
Nope. If Google wants to give me a job, they are welcome to hire me.

Why are you an Android “evangelist”?
I’m basically an evangelist of technology.  I think technology is the solution to all world’s problems and all the (latest) technology is powered by Android. I video-blog at 20 consumer electronics shows per year and 99% of what is happening there revolves around Android. Without Android, I would have nothing to video-blog about.

Charbax

How do you support your globe-spanning work documenting Android?
My Youtube channel passed 25 million views and I make money from ads. A few companies pay for my flights and hotels when they want me to video-blog at their conferences. I have some 300+ members paying me $20/year on my website. I also earn money by offering advice on sourcing devices out of China.

What do Apple users get wrong about Android?
The world is bigger than Cupertino. Most technological innovation is not happening in the USA and especially not in Cupertino!

Stop believing Apple invents stuff! Apple never invented anything! Even selling overpaid hardware pre-dates Apple by millenia. Apple is simply a cash machine. They invest money wisely in components at the right time for them and they make absurd amounts of profits selling those devices.

They convince consumers that it’s worth paying $2,500+ with a 2-year contract for a device that cost Apple less than $150 to manufacture by underpaid workers in China.

While you may stay in love with your Apple plastics if you want, there is much more happening out in the rest of the world. Android has 100 times more engineers and 100x more R&D being invested throughout the thousands of Android companies working on Android innovation right now.

Author note: I did not ask Charbax if he was referring to me with his “stay in love with your Apple plastics” remark or to Apple users in general.  

What is the future of Android?   
Android has about 90% market share today (where it matters, growth markets and non-US developped markets). It’ll be 98% in 2 years. It’ll power everything in the world.

But isn’t fragmentation a significant problem for Android?
With retail prices for Android devices ranging from $20 to $2000, you cannot expect everything to work on all those different types of devices. On the other hand, even without “official” support on perhaps 50% of the Android device output to date, most apps and most Android features work perfectly fine on 98% of the Android devices on the market.

Author note: Again, Charbax did not offer verifiable evidence for his assertions.

Android was very ingeniously designed since day 1 for both massive backwards compatibility and forwards compatibility. The Android apps SDK enables 99.9% of the 1 million Android apps to work perfectly fine on 99.9% of Android devices being used on the market right now. Even your 3-4 year old Android device will support above 99% of the 1 million Android apps today.

This is absolutely not true of Apple iOS. iPad apps don’t work right on iPhone. iPhone apps don’t work right on iPad. iPad (2) apps don’t work right on iPad Mini. iPad Mini apps don’t work right on iPad Mini Retina.

Android is built to accomodate for just about any screen size, pixel density and any optional hardware features. You do not need to design “tablet optimized” apps for Android for example as you must absolutely do so for iPad.

What else is better about Android than iOS or Windows Phone (or any other operating system)?
Android is 100% open source. This is the most important thing. Android is like the web. iOS and Windows are like proprietary competitors to the web. Android is 100% free.

What about claims that Android or Android makers infringe on other’s patents?
All those patent lawsuits against Android are complete bullshit. Anyone who believes Microsoft or Apple have the right to sue Linux open source on smart devices is just out of his mind. Nobody must touch Linux, it’s free and open source. End of story. Nobody can patent any touch UI, any device shape, any essential user interaction idea, or anything that somebody else would have come up with.

Google appears to be transitioning away from the very open source view you espouse.
Admittedly, Android needs to be even more open source and even more free. That means open source GPU drivers, open source WiFi, Bluetooth, and other source drivers. It means perhaps 100% free alternatives to HDMI, USB, H264, Mp3, Dolby, as well as alternatives to whatever else other people are claiming licence fees against Android device makers for. That practice is just wrong and needs to stop.

Connectors, codecs, graphics engines, all those things need to be free to use for any device maker. Google needs to ramp up their involvement in providing 100% free alternatives to the market for these things so that device makers can in fact produce 100% free and open source Android devices worldwide.

But is this something Google should do? What about controlling the Android brand name, the use of Google apps, and controlling development of future releases?
(I suspect) Sundar Pichai‘s role overseeing Android may be to prepare Android 5.0+ to be totally open. Google should (and soon may) allow any third party developer access to see in real time all the future features of Android that Google is working on. Google should release dailies and accept way more third party patches and feature requests. Any improvements to Android that any third parties want to submit should get integrated in real-time.

You think Google will do this?
I think Google knows they are so far ahead of anyone else now that it really doesn’t benefit either Google or Google’s hardware partners to offer exclusive access to future Android development anymore. Give everyone equal, real-time access.

I also think Google will un-licence and un-restrict the use of their Android apps so that anyone will be allowed to ship Android with Google Play, Google Maps, Gmail, and whatever other apps Google offers, as much as they want, with no more need to ask for Google certification first.

Google should also count all Android activations in the future, and not only count certified Android devices. The 1.5 million Android activations per day are only certified Android devices being activated. That does not include the 500,000 – 1 million non-certified Android devices that are sold worldwide and activated each day.

Why are you visiting San Francisco?
I want to interview HP, Intel and others in the region. I will also be attending a Samsung developer conference. Before this, I was  in Shenzhen, China and purchased some Android phones for $36, and Android-powered devices that copy both Windows Phone and iPhone.

Thank you.

Author note: below are some of my favorite Charbax videos: 

Archos Childpad

A $29 Android tablet

Shenzhen Tablet Factory tour

Tablets: The Future Of Education

“(O)ur share of tablets in education is 94%. I mean, it’s sort of unheard of. I’ve never seen a market share that high before. ~ Tim Cook

Which Computing Form Factor Is Most Likely To Dominate Education?

Handicapped students.Phones? No way. Too small.

Notebooks? Possible. They’re so much smaller and lighter these days. And they can be easily carried to and fro and set up on desktops.

Tablets? Far more likely. Tablets can be used in so very, many, more ways than notebooks can and they can be also used as a notebook, if required. The most flexible, the least expensive, the most likely choice for education.

Which Operating System Is Most Likely To Dominate Education?

Student holding digital tabletWindows? Not likely. First, Microsoft is still not making a true tablet. More fool they. Second, Microsoft’s tablet products are woefully behind in the app software market.

Android? Not likely. Security, anyone? No true tablet software. And putting your entire school’s data in the hands of the world’s largest advertising agency? Android’s chances seem highly dubious.

iOS? Far ahead already. Massive lead in education-specific software. Apple’s business model promotes user privacy and device security. The winner so far. The most probable winner in the near term.

If You Grow Up Using An Apple iPad In School, When You Graduate What Will You Want To Use At Work?

beauty childI haven’t seen any one talking about this, but if the current generation grows up using Apple iPads in school, what long-term effect will that have on their computing preferences?

The answer seems obvious. And the implications could be profound.

Apple Upbeat About The Holiday Quarter

There were a number of key takeaways from Apple’s Q4’13 earnings call. iPhones continue to beat estimates and grow. We expect this trend to continue into the holiday quarter. Even though many are pessimistic about the iPhone 5c (some un-intelligibly calling it a dud) we anticipate the 5c to continue to do well as a mid-tier offering. Tim Cook was clear on the phone call that the 4S is the entry level iPhone, the 5C is the mid-tier offering, and the iPhone 5S is for those who want the latest and greatest. He even pointed out that we should expect demand to be high for the 5S due to the predictability of the early adopter market. We expect the 5C to gain steam once the early adopter phase passes.

The iPad sales were lower than most expected but easily explainable by the increased seasonality of the iPad for the mass market. One has to assume that the bulk of the sales last quarter came from markets like education, business, and other verticals. I also expect the iPad 2 to have made up a healthy mix of iPad sales. Mainstream consumers likely held off in anticipation of new devices for the holidays. Given no new iPads in all of Cy’13 14.1 million iPads is impressive. We anticipate significant pent up demand for iPads going into the holiday quarter and expect Apple to yet again set all time record sales for iPads.

The one growth story we are still anticipating is with regard to the Mac. It is significant that Apple spent as much time as they did at their fall unveiling on the Mac. It is also significant that the theme of last weeks event was personal computing and that Apple included the iPad in that event. Although Windows PC sales are down, the Mac has largely outgrown the segment for over two years. We believe that there is still a growth story for the Mac to continue to grow its share in the PC segment and take share from Windows. Annually we still sell upwards of 300m PCs every year and Apple has approx 6-8% of the WW PC market (higher in the US) but is poised to grow that share over the next few years.

Apple has strengthened the value proposition for Macs by making all future versions of OS X, iWork, and iLife free for customers. They have also been aggressively lowering the price of their Macs annually. I believe Apple smells and opportunity to gain share of the WW PC sales against Windows OEMs and will begin being very aggressive to capitalize on this opportunity.

Those are the three categories we expect holiday season upside with. Tim Cook said it is likely to be an iPad Christmas but is more likely to be an Apple Christmas like so many Christmases before.

Understanding Apple Part 2

If you follow Apple in the press and talk to analysts, you’re probably confused. There are three conflicting narratives being presented: Apple is doomed, Apple is disappointing, or Apple is dominating. So many journalists have written about Apple’s lack of innovation without Steve Jobs that, “Apple is doomed,” has almost become a meme. Most financial analysts are in the “Apple is disappointing” camp – the P/E ratio of Apple’s stock price is certainly depressed relative to the competition, yet market analysts – including yours truly – describe Apple as clearly dominant. How can all these be true?

Part 1 of this article covered how Apple is Doomed and Apple is Disappointing.

Apple is Dominant

On the whole, I have found market analysts to be far more positive on Apple’s position than financial analysts. At Current Analysis, Apple garners the highest scores possible in every category except “Partnerships.” Most market analysts focus on the competitive impact of Apple’s products and strategy, not the stock price. Apple is dominating the most profitable segment of the market. If you are a vendor competing with Apple, what matters is whether you can profitably sell products against them. Samsung can. Everybody else is losing money, treading water, or is selling hardware as a loss leader to make money some other way.

Moreover, Apple’s ability to profit in the future seems clear. Apple has a reputation for secrecy, but its product development strategy is transparent. It develops products in markets adjacent to its existing products, and builds on the investments it already has in software and services platforms – OS X/iOS, iTunes, the App Store, and iCloud. Apple often takes advantage of new component technologies to enter new markets, but it designs the product around a specific – and limited – set of use cases rather than building something because the technology enables it to be built.

When it comes to creating new markets or taking an early adopter market and making it mainstream, Apple is in rare company. There are not many companies that can integrate technology and design on top of existing software and services platforms; it helps if you control the ecosystem, and building one from scratch is terribly hard. Apple will certainly have competitors in any market it enters, but the bigger danger is choosing the wrong set of problems to solve. This is the area where Steve Jobs’ absence is the biggest loss – Jobs seemed to have an unerring eye for what could be left out of a product and still be left with a compelling version 1.0 product. Apple is fortunate that its executive staff has had relatively low turnover – many of the people who helped Jobs make those choices are still at the company and are working on new products today. I do not pretend to know what those products are. Wearables and living room devices certainly fit nicely in Apple’s ecosystem, but Apple could be working on something else entirely.

Apple also has more room to grow its phone and tablet business. Global distribution can be expanded further – Apple still has room to appeal to upper income users in China and India. Over time, the iPhone 5C should drop in price somewhat, enabling upper middle class consumers in emerging markets to buy in. In developed markets, there is still plenty of room for late adopters who are still using featurephones today. This group will not be kept away by the high price of the iPhone because carriers distort the true cost of the phones with subsidies. Even after the iOS 7 refresh, the iPhone still has the simplest user interface of any smartphone, which should be appealing to late adopters, especially technophobes.

Apple could also expand the size of the iPhone to appeal to the segment of the market that can afford an expensive phone, but wants a larger display than Apple offers. This product category has more appeal in Asia than in the West, but Samsung has sold 37 million Galaxy Notes, and Apple is certainly paying attention. I expect Apple to address this market eventually, though it is taking a long time doing so. My guess is that the sticking points are finding a form factor that is manageable while still whetting the appetite for a larger display, and picking a display that doesn’t impose screen resolution fragmentation costs on developers.

Pad sales growth is down, but new models could change that. The iPad Air reinvigorates Apple’s full sized offering, and the retina iPad mini takes away a key differentiator of small Android and Windows tablets. Apple has all but telegraphed that Touch ID is coming to an iPad near you – and your IT manager – with the next update.

Three Narratives

That is how we ended up with such divergent narratives in the press and analyst communities. Journalists are reporting on whatever is deemed newsworthy – and launching incremental improvements is not exciting, even if it is wildly successful. Financial analysts are trying to assess Apple’s future profit growth without betting on Apple being successful in markets that don’t exist. Some of them also don’t trust that Apple’s current profit level is sustainable, even if they don’t actually question Apple’s market dominance in the slightest. Market analysts look at Apple’s platform and see possibilities where it could be extended. In the meantime, Apple’s strategy of selling a lot of phones and tablets and making a lot of money on them seems fundamentally sound.

Obamacare: Where Did 500 Million Lines of Code Come From?

Healthcare.gov screenshot

Anyone who knows even a little about enterprise software has to be horrified by the events surrounding the rollout of the Affordable Care Act. Not so much the obvious flaws in the enrollment process, though they are bad enough, but but the inane statements of politicians, the glaring lack of knowledge in both the tech and general media, and even the statements of a lot of people who should know better.

An example: It has now become commonly accepted knowledge that that Healthcare.gov consists of 500 million lines of code. And where does this wisdom come from?Digging into its origin, it appears the first reference was in an Oct. 20 New York Times article whose last paragraph read:

According to one specialist, the Web site contains about 500 million lines of software code. By comparison, a large bank’s computer system is typically about one-fifth that size.

No indications of who that specialist was, no indication of his or her credentials, and no reason why anonymity was granted for uttering what is presented as a statement of fact. And the reader is given no explanation of why a bank computer system is a relevant standard of comparison. (The same article cited a “specialist”–not clear if it was the same one–as saying that 5 million lines of code might need to be rewritten, with an equal lack of provenance.)

Meaningless metrics. In fact, “lines of code” is meaningless as a measure of complexity or anything else. For example, this is a completely valid, ((Assuming that there’s a matching { somewhere.)) and common, line of code in the C language:

}

On the other hand, a sufficiently clever Perl programmer could probably compress a million lines of code into a single incomprehensible and totally undebuggable, but functional, line. To a considerable extent, the number of lines of code required for a task is a function of the programming language used and the style of the coder as much as anything else. But as a general rule, using more lines than fewer for a given task produces code that that easier to read and easier to debug, especially if a lot of those lines are comments explaining how the code works.

Of course, the argument about the number of lines was high-level debate compared to Texas Republican Joe Barton’s attack on Helathcare.gov’s alleged assault on privacy. At a hearing Oct. 25, Barton got extremely exercised about “code” that stated that users of the site had “no reasonable expectation of privacy.” Of course, if Barton (or his staff) actually knew how to read HTML, they would have realized that the offending line was in a block of code that had been commented out and thus was of no significance. (For the curious, this slightly blurry PDF of the code shows comment markers at lines 1406 and 1411.)

Was a waterfall to blame? One of the stranger analyses of Healthcare.gov’s woes blames the use of “waterfall” rather than “agile” development. Agile and waterfall are two different approaches to organizing major software projects, and their devotees can argue their relative virtues with the fervor of religious fanatics. But no one has ever demonstrated the superiority of one to the other in all cases and  no one, including developer Larry Fitzpatrick in the cited article, has shown that waterfall was responsible for the problems or even that it was the technique used.

Instead of a lot of random speculation, we could use some serious investigation of what really happened in the development of Healthcare.gov. This isn’t going to come from politicians, who are more interested in scoring points than fixing anything, but it might come from some hard journalistic work.

I’ll throw out my own question. An article by Sarah Kliff of The Washington Post (her expertise is healthcare, not tech, but she has been doing by far the best coverage of Healthcare.gov) explains the error-ridden process by which applicant information is transferred from the government to insurance companies. The key is a standard insurance industry form called an 834 that is transmitted using an antiquated technique called electronic document interchange. Why was the system based on EDI rather then the current approach of storing the data in XML files and transferring it via an API? Was it the old fashioned government? Or was EDI all the insurance companies could handle (the same process is widely used to communicate between employers and insurance companies)? Might not Healthcare.gov have presented an opportunity to modernize the process rather than enshrine early 1990s technology?

This sort of question, not random speculation, is what analysis of the Obamacare mess should be focusing on.

 

 

When Genuine Data Leads to Disingenuous Conclusions

I genuinely love the industry analyst business. I love the role we analysts, our data, and our commentary play in helping companies make strategic decisions. However, I’ve noticed a disturbing trend. ((It’s a “Jump to Conclusions” mat! You see, you have this mat, with different CONCLUSIONS written on it that you could JUMP TO! — Tom Smykowski from the movie Office Space))

The challenge with data is that the truth lies in the interpretation. Without context genuine data can lead to disingenuous conclusions. This is why data cannot be put out in the public without context. Yet this is exactly what happens. It creates a scenario where a media industry who thrives on negativity can take genuine data, miss the context, and create stories around a false narrative. It is not their fault entirely. It is the fault of the data firms who release data to the public, without proper interpretation or context, and allow the media industry to draw their own conclusion, and often a false one.

Genuine data should point out market truths. However, when presented in the wrong way, it has the potential to do just the opposite.

Why We Count Things

The bottom line is data matters. If you are a company that makes touch-based displays or sensors you need a fairly accurate view of shipment growth related to the areas you care about so you can plan your long term product cycle. If you are a company that makes screens you don’t necessarily care what the operating system market share is of specific platforms. All you care about is how many screens will be sold over the next few years, and what the likely segment mix of screen size will be. For you, the data matters because you need to know how many to make. This is why forecasts and segment tracking statistics are relevant.

Data, forecasts, and other statistics, should help reveal an opportunity to the interested party. It should also help point out where there are not opportunities.

Not all data that gets put out in the public leads to disingenuous conclusions. However, it is the market share statistics that do so more often than any other. To make my point, and highlight how this happens, I will use the tablet market share narrative as an example.

The iPad Has Lost to Android

When you track the global sales of tablets, it is easy to look at the market share statistics and say that it is game over for the iPad. You can stare at the chart and conclude that the iPad can no longer grow as the world and the growth shifts to Android. There is some truth to the global statistics of Android’s tablet market share. At face value we create charts that look like this:

Screen Shot 2013-10-25 at 7.10.08 AM

That is genuine data. Android is being shipped on more tablets than iPads. Therefore, the narrative that Android tablets outsell iPads is accurate at a bullet point level. However, the graph does not tell the whole story and yet so many are left to conclude it does.

If you are a software developer ((Software developers are ones for whom a market share discussion does matter. Perhaps the investment community does also but at large it is irrelevant for most.)) you will look at that chart and say “I should be writing tablet apps for Android.” The problem is… that is an incorrect conclusion when you have the context of the market share data points.

The picture starts to get more clear when we look at the market share of each vendor as a makeup of total sales. Here is that chart. ((Graph viewed with a stack chart. Screen Shot 2013-10-25 at 11.43.31 AM ))

Screen Shot 2013-10-23 at 4.48.10 PM

When we look at that chart we realize that the name brands shipping Android tablets are not shipping nearly as many as the iPad. We will also notice that the largest segment of Android tablets being sold come from this category labeled ‘other.’ Upon learning that ‘other’ makes up a significant portion of the number of Android tablets being sold; we must seek to understand what ‘other’ is and ask if it represents the same opportunity as the vendors who are shipping Android as a tablet platform tied to services and app stores.

Understanding Other

The category ‘other’ represents the no-name brand white-box tablets being sold at razor thin margins mostly in China and other emerging markets. Here are some visuals to help with some context.

hero

I wrote about this point in particular where I dug into the gray market for tablets in China. It is a big market.

As I have been digging into the white box segment–which makes up the bulk of Android tablet shipments–I have been trying to understand what consumers are doing with these extremely low-cost devices. As we know, Android tablets globally make up a minuscule share of global web traffic. The latest estimates I saw peg Android tablets at less than .08% of global traffic while iPad is at 4% of global internet traffic. This has always been the stat that has caused us researchers to raise an eyebrow. Android has more volume but significantly less internet traffic. So what is happening?

Nearly all evidence and data we find comes back to a few fundamental things. First, most of these low cost tablets in the category of ‘other’ are being used purely as portable DVD players, or e-readers. Some are being used for games, but rarely are they connecting to web services, app stores, or other key services. I have asked local analysts, local online services companies, app tracking firms, and many many more regional experts, and the answer keeps coming back the same. They affirm that we see the data showing all these Android tablet sales. But they aren’t actually showing up on anyone’s radar when it comes to apps and services in a meaningful way.

Understanding the context, it is hard to genuinely conclude that ‘other’ represents an opportunity for anyone but the white box hardware companies making less than a dollar of profit and component vendors who can supply the parts to make such low-cost tablets. It is certainly not a genuine revenue opportunity for app developers, services companies, or other constituents in the food chain. And other makes up almost 40% of the Android tablets shipped world wide.

So let’s look at the chart without ‘other.’

Screen Shot 2013-10-23 at 5.30.05 PM

Now we get a slightly clearer picture. If we eliminate ‘other’ Apple’s tablet share goes to over 50% WW with the closest competitor being Samsung at 18%.

Yet we are still left with a legitimate question which is relative to vendor growth. ‘Other’ is causing a downward trend for the competition. We know that ‘other’ was growing but ‘other’ is not an area any branded hardware OEM wants to go near. So, can vendors grow their share in a growing market against other? That is the key question. To shed insight into that question a little more context is necessary.

Our research, and many others, suggests that over half of first-time purchasers of low-cost tablets had buyers remorse and intend to spend up on their next one. This is why with many of the latest branded crop of OEM tablets, prices went up in order to invest in better components to better the experience.

Our research also suggests that those in the market for a tablet–who plan to use it to do meaningful things for the value chain–prioritize the experience over price. The tablet market as a whole is growing and I tend to view that growth separately from the ‘white box’ category. ((There is likely some percent of ‘other’ that does represent an opportunity, however, we have no idea how much. My suspicion is it is very small so I lean toward leaving it out entirely.)) Doing so brings much more clarity to what is happening in the market for the stakeholders.

We are still waiting for updated figures on these but I wanted to add the needed context about what is happening in the tablet market so that accurate opinions, and more importantly accurate business decisions, can be made with regard to this category.

A similar analysis can be done on the market for smartphones, but I will leave that project for another time. Data is good. But it is dangerous when it is released into the public without context. Data should inform not confuse. Yet, more often than not, data that gets thrown around in the public sphere clouds the truth rather than brings clarity to it.

Can Windows Phone Compete in the Low-End?

At Nokia World earlier this week Nokia launched what I feel is an interesting product. I am an optimist so I have not given up on Microsoft or Nokia when it comes to mobile computing. The most interesting product to me is the Lumia 1320.

Lumia-1320_632

I got to spend some time with the new Lumia large screen phones and the latest update to Windows Phone 8 shows well on larger screen smartphones. But what makes the 1320 interesting is not the size but the price. The Lumia 1320 is estimated at $339 USD and will launch first in China and Vietnam in early 2014, followed by other Asian markets, India and European markets. For context on that price point, in China the $339 priced smartphones or 2000 Yuan price range occupied 8% of Q2’13 sales.

Here is a chart using IDC’s numbers on where the global platform share sits currently.

Screen Shot 2013-10-24 at 9.40.31 AM

I ask the question whether Windows Phone can compete in the low-end because that is where I feel its best chance at market share gains will come from. Our research suggests that Apple is an immoveable force in the high end or top 10% of the global market and with the addition of the 5c it is possible they will dominate the top 20% by the end of the year. Where Android succeeds is the area where Windows Phone has a chance – at the low-end. If I am Microsoft and Nokia I focus on the blue line in the graph not the green one…at least for now.

I truly believe that Android needs low-end competition. I say this because Android in the low-end is not advancing personal computing. From what I have seen and used with the Windows Phone, I feel it is a much better platform than Android at those price points to empower consumers with computing. The problem is that Android has an army of OEMs shipping phones at low-price points. Windows Phone will never make a dent in Android unless they get the same.

To date Nokia’s best selling Lumia is the 520 which is among the most affordable of the group. It will be interesting to see how the 1320 does but I will remain optimistic until proven otherwise.

Apple’s Software as a Service Strategy

We have had one focus since the beginning. To build the best personal computers in the world that people love to use. –Tim Cook

It is easy to look at Tuesday’s event from a hardware only viewpoint and miss the significance. However, if you view Tuesday’s event through the lens of personal computing more clarity emerges. Hardware is the beautifully designed tangible object. But it is the software that turns that beautifully designed tangible object into an empowering tool called a personal computer.

Apple is a hardware company that is true. They are also a software company. However, they don’t want to just sell you hardware or software. They want to sell you an experience. That experience is fueled by their ecosystem.

There were a number of things hardware-wise to be excited about. The new Mac Pro and all its innovations are best in class. The new iPad Air is the thinnest and lightest full size tablet on the market. The iPad Mini now with Retina display and A7 processor is a ton of amazing tablet for only $399. As important as the hardware is the software is the compelling part of the narrative and Apple’s vision for advancing personal computing.

Consistency and Ecosystems

When we look at Apple’s hardware across different segments we notice very distinct design themes. The iPad Air and iPad Mini follow the same design language. The MacBook Air lineup follows the same design language. The MacBook Pro lineup follows the same design language. What I saw today with iLife and iWork is that now apps across iOS and OS X follow the same design language.

Many of the new iLife and iWork apps look like desktop class applications. GarageBand for iOS supports up to 32 tracks of audio. iMovie can create and implement many more desktop class transitions and effects as well as run picture-in-picture video during editing. The new iLife and iWork apps for iOS take creativity and productivity on tablets to new levels. They are not only powerful but also similar in look and feel to their OS X counterparts. This makes for a seamless jump over to OS X should consumers use multiple devices in their digital life. This also strengthens the case for a potential new Mac owner should this consumer also be in the market for a new PC.

The story to me was a consistent experience around personal computing. Apple is bringing a consistent software experience across the screens in their hardware portfolio. In the post-PC era consistency matters. Consistency will be valued.

Software as a Service For Personal Computing

Apple has put pressure on Microsoft by bringing iWork to consumers for free. For most mainstream consumers iWork is more than sufficient. iLife has always come pre-installed on Macs but is now free as well and nothing like the iLife suite exists in the Windows ecosystem at any price point. However, Apple has raised the bar by making OS X free. That one will be tough to compete with.

What is amazing is that a company who is strengthening the power of their ecosystem through software is able to do so by offering this software experience for free. Apple’s hardware may cost more but you are also getting more from a software standpoint. Consistency in OS updates, app updates, and more is now free. Not to mention best in class customer support. This can not be overlooked or underestimated. This is the vertical advantage.

Consumers now know that an investment in Apple’s hardware is an investment in future software upgrades at no additional cost. The value of the software is now built into the value of the hardware. Apple is telling customers that they are committed to bringing them quality software as a service to their quality hardware. This is Apple’s vision for personal computing.

Apple’s Grand Strategy

Grand Strategy

Grand Strategy is not about winning the war, its about winning the peace. It’s not about destroying your competitor, its about preserving who you are. It’s not about moving toward a destination, it’s about knowing what your destination is.

Too many countries and too many companies lose sight of their Grand Strategy in their desire to win the war. They forget why and what they’re fighting for.

The fact that Apple started Tuesday’s event with a repeat of the video shown during their WWDC event clearly demonstrates that they have a Grand Strategy and that they are determined to be guided by that strategy first, and foremost.

Some pundits seemed to miss, dismiss or ignore the importance of that video. In doing so, they’re missed, dismissed and forfeited their chance to understand Apple.

Strategies

— Microsoft makes its money by licensing software to hardware manufacturers.
— Apple makes its money by selling hardware to end users.
— Google makes its money by attracting your attention with free services and then selling your attention to advertisers.

If you were Apple, what could you do to enhance your strengths while weakening or negating your competitor’s strengths?

Strategy #1: Focus on the user experience.

It’s perfectly fine not to care about quality. What’s not perfectly fine is criticize those who do care about quality for seeking it out and enjoying it.

Strategy #2: Give away your software in order to make your hardware more valuable and your competitor’s software less valuable.

AAPL’s business model is hardware. Giving away a free OS is a natural step. Puts even more pressure on MSFT though. ~ Sameer Singh (@sameer_singh17)

Strategy #3: Make your platform so valuable that your competitors will feel compelled to put their services on your platform.

I destroy my enemy when I make him my friend. ~ Abraham Lincoln

Campaign

Apple is very consistent. Worth remembering that in ’01 they bought SoundJam (which was $50), renamed it iTunes and gave it away for *free*. ~ Carl Schlachte, Sr. (@carlsuqupro)

Make Software Free
— Make all Operating System software free.
— Make all Consumer software made by Apple free. (iWork — Pages, Numbers, Keynote — iLife — iPhoto, iMovie, GarageBand — iTunes Movie Trailers, iBooks, Maps, Find my iPhone, Podcasts, Keynote Remote — 20 apps in all.)

I estimate the drop in OSX and iLife/iWork prices means about $450 million foregone software revenues for Q4. ~ Horace Dediu (@asymco)

Folding reporting Software into iTunes now makes sense: Software revenues were going to go to zero. ~ Horace Dediu (@asymco)

Make The Look And The Feel Of The Software The Same
— Update (almost) all Apple consumer software;
— Make (almost) all Apple consumer software available across all screens (iPod Touch, iPhone, iPad, Macs and Apple TV).

Make Online Software Cross-Platform
— Create on-line versions of on-device software;
— Make on-line versions free;
— Make on-line versions of the software look and feel like the on-device software.
— Make on-line software collaborative.

No iCloud account required to open Pages files? Nice! Collaboration? Very nice! ~ Joseph Thornton (@jtjdt)

iWork collaboration means … I’ll never have to open Google Docs again! ~ Rene Ritchie (@reneritchie)

Unify Hardware
Almost all new iPads & Macs are:

— Retina Screen
— 64 bit

“The iPad is 64 bit. Windows is, by and large, still 32 bit. Enough said.” ~ Ben Bajarin (@BenBajarin)

— A7

Apple’s messaging of the A7 in iPad: desktop-class architecture. No desktop needed. ~ Ben Bajarin (@BenBajarin)

— M7
— Lightening Cables (except iPad 2)
— Touch ID

Lack of fingerprint scanner in iPads points against it being an ecosystem play. Convenient in phones, not needed in tablets. ~ Benedict Evans (@BenedictEvans)

I respectfully disagree. There is not a doubt in my mind that the next generation of Apple tablets AND notebooks AND desktops will have Touch ID. Why? Many reasons, but one is that Touch ID is a habit. Once people get used to it, they’ll want it everywhere.

Unify Software

By making the operating systems free, and by extending updates as far back as practicable, Apple is doing its very best to remove fragmentation and consolidate their devices on the latest operating system versions.

Apple’s free software is the ultimate fragmentation fighter. ~ Harry McCracken (@harrymccracken)

Target Usage & Engagement

“Usage share is what’s important to us.” ~ Tim Cook

Apple is not after total share, they’re after meaningful share. If a tablet owner isn’t using their tablet, they’re of no use to the platform. And if they using they’re tablet but not engaged in activities that strengthen the platform, they’re of no use to the platform.

“Tim Cook says Apple has sold 170m iPads and iPad usage is 81%.” ~ Ed Baig (@edbaig)

Eighty-one percent of the usage share. Now THAT’s meaningful share.

Themes

1) Apple showed an incredibly strong commitment to the Mac. While others are looking for a PC exit strategy, Apple is making it clear that they’re all in.

Apple didn’t get the memo that Apple killed the PC market. ~ Jay Yarow (@jyarow)

If you still had doubts that Apple thinks notebooks still have a role to play just look at the line up & the price points they now have. ~ carolina milanesi (@caro_milanesi)

2) Apple made it clear that they are committed to the tablet as a category. They literally mocked those who make tablets that are PCs and PCs that are tablets. Anyone who thinks that the iPad lines and the Mac lines are ever going to unify really need to give the matter another think.

3) Apple made two pricing moves that show that they feel they are totally alone in the premium tablet space.

First, they dropped the iPad Mini by $30 (to $299), rather than the traditional $100 dollars, then they INCREASED the price of the Retina iPad Mini by $70 (to $399).

Second, instead of dropping the price of the iPad 4 to $399, they retained the iPad 2 and at $399.

Apple has a total lock on 10″ tablets. Question is the smaller cheaper space. ~ Benedict Evans (@BenedictEvans)

Those two moves make it abundantly clear that Apple thinks it is dominating that sector and that they don’t need to make price concessions.

Wondering if Apple was thinking about the weakness of the Android tablet offer when it priced the mini. Limited competitive pressure. ~ Benedict Evans (@BenedictEvans)

Further, by offering the iPad 2, instead of the iPad 4, as the low cost large screen iPad, Apple is pushing buyers up market to their higher quality and higher priced iPad Air.

Apple may not have a lock on the 7-8 inch tablet space, but their pricing indicates that they have a lock on the PREMIUM 7-8 inch space and – so far as platforms and profits go – that’t the only space that matters.

Apparently Apple is not worried about the competition. Instead, they think that the competition should be worried about Apple.