Tag: smartphones

Why Android Is Winning The Battles But Google Is Losing The War: Part 1

A Pyrrhic victory (/ˈpɪrɪk/) is a victory with such a devastating cost that it carries the implication that another such victory will ultimately lead to defeat. The phrase “Pyrrhic Victory” is named after King Pyrrhus of Epirus, whose army suffered irreplaceable casualties in defeating the Romans at Heraclea in 280 BC and Asculum in 279 BC during the Pyrrhic War. Someone who wins a Pyrrhic victory has been victorious in some way; however, the heavy toll negates any sense of achievement or profit. The term “Pyrrhic victory” is used as an analogy in fields such as business, politics, and sports to describe struggles that end up ruining the victor. ~ via Wikipedia

Series Schedule:

  • Mon: The Battle for the PC
  • Tue: The Battle for Mobile Phones Won
  • Wed: The War for Mobile Phones Lost
  • Thu: The Battle for Tablets
  • Fri: Picking Your Battles Is As Important as Winning Them

    • 1) The Battle For The PC

    A Glorious Victory

    Google began in January 1996 as a research project by Larry Page and Sergey Brin. While conventional search engines ranked results by counting how many times the search terms appeared on the page, they theorized about a better system that analyzed the relationships between websites. They called this new technology PageRank, where a website’s relevance was determined by the number of pages, and the importance of those pages, that linked back to the original site. via Wikipedia

    The Battle for search on the PC (notebooks and desktops) was a glorious victory for Google. Seldom has a company come so far, so fast, made so much money and so utterly anihilated their competition. By 2006, Google dominated search and was one of the largest, fastest growing companies on the planet. Their PC search strategy had proven to be brilliant and they were virtually printing money.

    I can give Google no greater compliment than this: They make their money by distributing ADVERTISING, yet they are liked by most and even loved by many. The words “amazing” and “awe-inspiring” don’t even begin to cover that achievment.

    All Glory Is Fleeting

    Sic transit gloria mundi

    But Google had two problems, which were really one and the same problem: “peak” and “mobile”.

    Many of us are familiar with the concept of “peak oil”. It’s a term used to describe the fact that oil production had to, at some point in time, peak because there was only a finite amount of oil in the ground and once that peak was reached there must inevitably be a steady, albeit gradual, decline in oil production.

    An equivelent peak is occuring in computing. In fact, two peaks: “peak PC” and “peak search”, both of which raise serious issues for Google.

    For eight straight quarters, search was growing. Then for three straight quarters, that growth deaccelerated. Then last quarter, something happened that had never happened before. People searched less. We have reached peak search.

    Ben Schachter of Macquarie Securities noted this in a research note:

    Notably, total core organic searches declined 4 percent y/y, representing the first decline in total search volume since we began tracking the data in 2006. While this month marks the first y/y decline in total search volume, growth rates have been decelerating since February’s recent peak at 14 percent y/y growth (for the prior two years, growth rates were largely stable in the high single-digit to low double-digit range).


    Not only is search declining, the proft from search is declining too. “Cost-per-click” – how much advertisers pay on average when someone clicks on an ad – is down. Way down. In its third quarter 2012 earnings, Google reported that its cost per click was down 15 percent.

    Cost-per-click” – how much advertisers pay on average when someone clicks on an ad – has been dropping for the past four quarters, after rising for eight previous quarters. Surrounding circumstances make it clear that there is no reason to expect it to rise again.

    Why is peak search happening and why now?

    First, there are fewer and fewer PCs. Like peak oil, we’ve reached peak PC. The PC market is in permanent decline. In fact, the PC market is not only declining, it may be headed for a cliff. (See Tim Bajarin’s fine article on “How the iPad Mini Could Impact Future PC Sales.”)

    Second, the search market is maturing. The places where people are going online just don’t pay as much as they used to.

    Third, less and less people are doing their searches on their desktops and more and more peole are doing them on their mobile devices. When it comes to search, the portability of the mobile device trumps the power of the PC.

    Smartphones have been outselling PCs (notebooks and desktops) since the end of 2010 and by the end of 2012, tablets will make up over 25% of all PC sales. Further, well respected mobile analyst, Mary Meeker believes the global smartphone plus tablet install base will surpass the install base of the PC by the end of Q2 2013.

    Fourth, and finally, try this thought experiment. You’re standing by your PC. You want to know the weather, the score of the big game, where a movie is playing or a local place to eat and how to get there (GPS). Do you perform the search on your PC or on your phone? For more and more people, this is an activity that you do on your mobile device, even when your PC is readily available.

    AUTHOR’S ASIDE: Ya gotta love Microsoft’s play in the desktop search industry. They are losing BILLIONS on Bing, buying into the desktop search market just as it has peaked and started its decline. What a company.

    Now it’s not such a bad thing to be dominating a market that is just past its peak. It means that you’ll be getting great income – nearly as much as you’re getting today – for a long while yet to come. But it also means that your’ve got no longterm future. Unless you plan for one. Which Google did.

    Next

    Tomorrow: “The Battle for Mobile Phones Won.”

    The Personal Computing Land Grab

    It is hard to describe what is happening right now in the personal computing industry than anything other than a massive land grab. The land grab I speak of does not apply as much to traditional “old school” computing devices like desktops and portables, but it does apply to smartphones and tablets.

    The point that continues to be forgotten, is that there are still billions of people who do not have a smart phone, tablet, or other form of primary computing device. This point is understandably forgotten because so many in the mainstream media only focus on the here-and-now and that is ok. But in the here-and-now many tend to focus on the market share point as if the market is as big as its going to get. The reality is that specifically with smartphones and tablets we are in the midst of the largest global total addressable market (TAM) expansion we have ever seen.

    Just a quick look at some numbers highlights this. Right now we sell around 80-90 million traditional PCs every quarter. That market is not currently expanding. If we believe, as I do, that the tablet market is larger that the traditional PC market, then the upside is still significant. Approximating up to the current quarter, there are less than 20 million tablets sold worldwide on average every quarter. Which means the opportunity is to add tens of millions of new tablet buyers each quarter with the current growth rate of 50-60 percent a year. Smartphones sell just over 100 million world wide every quarter, similarly growing at about 40-50% year over year. Which means tens of millions of new customers will be buying smart phones globally every quarter. This market expansion is being driven by new customers, first time buyers, and that is the key to the land grab.

    This global expansion is being driven primarily by Post-PC devices of a highly mobile nature. The limiter with old school PC devices was and still is the form factor. Desktops and portables, due to their design, simply had limited use cases. Namely, you had to be stationary. With a desktop, you sat at a desk and couldn’t move. With a portable, you could move from one location to another but still needed to be stationary to use it. Tablets and smartphones break the computing paradigm of being stationary and bring mobile computing into new places. This is why the market opportunity for tablets and smartphones is much larger than desktops and portables—mobility.

    The key to this land grab is entry points, and they key to defending your land is ecosystems.

    Getting Consumers To Move Onto Your Land

    Step one is get consumers on to your land. If we trace Apple’s strategy back just over 10 years, this was the iPod. The iPod, with its simple yet powerful value proposition, is the product that set the stage for Apple. The iPod could arguably be explained as the catalyst for the post-pc era.

    This battle to get consumers onto your land is the single biggest reason the pace of innovation is picking up. Many were shocked that Apple refreshed as many products in their product line just before the holiday quarter. The truth is that most if not all of the refreshes, new product launches, etc, are targeting new customers or ones who have not upgraded in quite some time. Take the iPad Mini for example.

    As hard as it is to believe not everyone has an iPad. Yet there is still extreme interest around the tablet form factor. Apple is convinced that once people start using iPads, they have profound and some times life changing experiences. Our own internal consumer research confirms this as well. So for Apple, primary strategy number one, is to break down the barriers to owning an iPad. Apple’s focus is to bring premium features to the market at mainstream prices. We could debate that point all day but an objective look at the pricing and features of all products in the market would validate the point. With every upgrade the brought to their holiday lineup, they stayed true to that formula. And as Tim Cook said, “we are not taking our foot off the gas.” Most Apple competitors aren’t in total control of the gas pedal, yet alone have enough money to keep their foot on the gas. Strategically, this is a key point in the land grab.

    Microsoft, and their partner ecosystem, also understand the land grab. Microsoft had, and still has, most of the land of traditional desktops and portables. Key point number one for them is to maintain that land but expand into new ones. Hence their aggressiveness with new form factors across the board. Windows 8’s success hinges on its ability to move into new land during this land grab, namely post-PC devices. This is also where uncertainty still remains about the platforms ability to do so.

    The Sticky Ecosystem

    Hardware and software get consumers in the door, or onto the land in my analogy. The services are the part of the ecosystem that keep people loyal. iCloud, iTunes, iMessage, etc., are examples of this for Apple. XBOX Live, XBOX Music, Office related services, SkyDrive, etc., are examples of this for Microsoft. All of these services act as glue tying their hardware and software services together in relevant and useful ways for consumers.

    The strategy is to get consumers onto your land and keep them there with a strong and useful ecosystem. To some degree these ecosystems are mature and to some degree they are not. The services element of this is one of the most exciting upsides and is still full of unexplored territory.

    There is much land still to be grabbed. The pace of innovation is going to continue to accelerate because of it. But this competition will make each competitor better and in the end bring to us, the consumers, some of the most exciting, useful, and enjoyable technology products never before imagined.

    Windows 8: It’s Later For Microsoft Than You Think

    Microsoft Needs To Hurry

    Microsoft has two problems. The first is that they have no presence in mobile and mobile is where it’s at. The second, is that they’ve run out of time.

    Run out of time? How is that possible? The iPhone is only 5 years old. Android is only 4 years old. The iPad only appeared on the market 2 and a half years ago. How can it possibly be that Microsoft is out of time? Three things:

    1) PC sales are declining fast;
    2) Smartphones, and especially tablets, are being adopted at historically unprecedented rates; and
    3) Microsoft’s absence from the market has been ceding the mobile computing business to Apple.

    1) PC Sales Are Declining Fast

    Both Gartner and IDC concur that worldwide PC sales fell by over 8%. Ultrabook sales forcasts were slashed in half for 2012 from 22 million to 10.3 million.

    But as bad as that looks, it’s actually a lot worse than that if you’re Microsoft. If you take out the Apple Mac sales, PC sales in the U.S. actually shrank by 13.8%. And, naturally, as PC sales shrink, so do Microsofts profits.

    It’s not so much that PCs are in decline – it’s PCs running Microsoft windows that are in decline. And the decline is not temporary, it’s permanent. As Mike Gualtieri, principal analyst at Forrester Research, put it:

    “I don’t think [Windows 8] is going to turn [the PC industry] around because nothing’s going to turn it around…”

    2) Smartphones, and especially tablets, are being adopted at historically unprecedented rates

    It’s not computing sales that are down, it’s only PC sales that are down. If you add tablets with PCs, overall sales of computing devices (excluding smartphones) will actually RISE by 12% this year.

    Smartphone sales grew so quickly that they surpassed PC sales in late 2010. And the rise of tablets has been even faster and has been even more spectacular. No other technology has penetrated society so quickly. By the end of this year, tablet sales will jump 90 percent to 124 million units or just over 35 percent of the total PC sales for this year. Tablet sales are expected to outsell PCs by 2016, if not sooner.

    Market Penetration

    Within 18 months after the introduction of the iPad, tablet penetration among U.S. housholds hit 11%. 12 months later it was at 25%.

    A Lost Generation

    Microsoft has lost an entire generation of users. Don’t believe me?

    — 40% of U.S. teens own an Apple iPhone. 62% want one.

    — More than half (51 percent) of tablet users think that their tablet will be their primary computing device within the next two years.

    Microsoft’s absence from the market has been ceding the mobile computing business to Apple

    Business has long been a Microsoft bastion. It’s been estimated that as many as 92% of all business personal computers once ran on Windows powered machines.

    Consumerization and BYOD

    But Apple is riding the crest of the “consumerization of IT” trend. Truth be told, Apple isn’t riding the wave, it CREATED the wave. For most companies, BYOD doesn’t mean “bring your own device” to work, it means “bring your own iOS device” to work.

    Business Adoption

    94 percent of the Fortune 500 companies are either testing or deploying iPads. Some 70 percent of the Global 500 companies are testing or deploying iPads, too. 3 in 4 American enterprises have adopted the tablet in some way.

    And when 500 of the UK Chief Information Officers (CIO) were polled, 37% choose the iPhone to be the dominant business smartphone in the the next few years.

    “The role of the iPad cannot be overemphasized. Some observers estimate the iPad sales in the business market might represent up to half of all iPad sales,” ~ Charlie Wolf, Needham & Co.

    Use In The Workplace

    77% of tablet users report that their destop usage decreased after getting a tablet. 1 in 4 owners say their tablet is now their primary computer.

    Indispensable

    Not only has the iPad stolen a march on Microsoft in business, it’s going to be hard to dislodge. People love their iPads. In a quirky poll taken earlier this year:

    — Almost half of respondents (47 percent) said they’d rather have an iPad for work than a bigger or better office or a more senior title (34 percent).

    — Sixty-eight percent said they’d rather have an iPad than their own parking space at work, while almost one in four (23 percent) would prefer the tablet over an extra week of vacation each year.

    — When asked what they would go without before they would give up travel with their iPad, nearly half (48 percent) say they would forego meals, 41 percent would skip drinking water, and more than 1 in 3 (35 percent) would give up bathroom breaks. More than half (55 percent) said they would rather forget deodorant than forget their iPad.

    Headlines

    Read these headlines and tell me that Microsoft should not be terrified. Many of the headlines have to do with the demise of RIM, but notice that the busienss is moving to Apple and Android – not Microsoft:

    — More car companies link iPhone nav apps to dashboard displays

    — The iPad Kiosk: Landing at an Airport Near You

    — Urban Outfitters Replaces All Cash Registers With iPads

    — BlackBerry Dropped by Booz Allen for Apple, Android

    — Australia’s Woolworths drops RIM for iPhones

    — U.S. Immigration and Customs (ICE) dropping RIM BlackBerry and purchasing 17,000 Apple iPhones

    Windows 8 Is Late

    Windows 8 is arriving on Friday, October, 26th and it’s none too soon…

    …in fact, as far as mobile goes, it may already be too late.

    Why a SoftBank Investment in Sprint Could be Disruptive

    There were multiple stories over the last few days about a potential investment from SoftBank in Sprint. The idea would be that Softbank could leverage some of Sprint’s technology, especially the Clearwire architecture, for use in Japan as well as bringing Softbank’s mobile payment system to the US market via Sprint. Also, a cash infusion from Softbank would allow Sprint to build out their LTE network faster than planned.

    However, none of the articles I have read convinced me that these writers actually know what SoftBank’s real intention is and why they would really want to invest in Sprint, a company that has seen declining subscribers and a slowing of revenue. However, SoftBank is the kind of company that could surprise people in the end with why and what they want from Sprint.

    SoftBank is known as a maverick company in Japan and their colorful founder and CEO, Masayoshi Son, often called the Steve Jobs of Japan, is just about as eccentric as Steve Jobs was. I served on the Comdex board of advisors for 18 years and in the late 1990’s when Comdex was sold to SoftBank for over $600 million dollars, I got to meet Mr. Son and get to know a little about how he thinks and operates.

    I happened to be overseeing a conference for Phoenix Technologies back then and Mr. Son, who had a tight relationship with Phoenix, was asked to come and present at this event at Spanish Bay around the time he bought Comdex. One of the things he said that got a lot of media at the time is that his vision for SoftBank was a 300-year vision, and he was planning all projects, and acquisitions, with this in mind.

    But he also shared a story that kind of gives you a feel for how he really operates too. He told us that when he was planning to enter the Japanese telecom market, he had been lobbying with the government to open up what is a stringently controlled market highly influenced by the government backed telecom provider NTT. He told us that after four or five meetings with government officials, he was getting nowhere with them.

    So, one day he went back to the top government official’s office and barged in with a can of gas and locked the door behind him. According to my notes from this event, he showed the can of gas to the government official and told him he would pour it on himself and light it if he did not listen to him and promise to take action. We all had a good laugh at this story and thought he just made it up to illustrate a point. But it turned out this is exactly what he did and to his credit, he got the complete attention of the top telecom official and other government executives and within a year they allowed SoftBank into what was their closed telecom service industry.

    Over the last decade, SoftBank has become one of the most powerful companies in Japan’s telecommunications market and has investments in all types of businesses and ventures around the world. It turns out that Mr. Son really is serious about a 300-year vision and is putting the pieces in place to make SoftBank a mover and shaker in a lot of industries for a long time to come.

    While some question SoftBank’s ability to make such a huge investment given the leveraged debt it already has, if anyone can do it, it would be Masayoshi Son. And if he did so, the technology direction and transfer of technologies most likely would benefit both and, more importantly, would make Sprint more competitive with AT&T and Verizon. In fact, the CEO’s of Verizon and AT&T have to be looking at a potential deal between SoftBank and Sprint with concern. They are acutely aware of Mr. Son’s track record as one who shakes up industries and has a way of moving companies he has bought or put money into in new directions that many cannot predict.

    While the technology and business reasons we can ascertain from both companies strong points make sense, I have a sneaky suspicion that Mr. Son has another motivation behind this move. Sources tell me that Mr. Son and SoftBank have been very interested in the US telecom market and been amazed at the slow development of extremely high-speed Internet connections available for business users and consumer users alike.

    In Japan, SoftBank has made ultra high speed Internet connectivity of at least 75 megs per second, the cornerstone of Mr. Son’s telecom push and has plans to give consumers consistent speeds of well over 100 megs per second in the works today. Now these are wired connections but even so, this is huge compared to the measly 12-15 mgs I get from Comcast in my home if all conditions are right.

    Given the extremely slow moves of the cable and telecom companies of getting ultra-high speed connectivity to their customers, if SoftBank and Sprint began moving the needle so to speak, quickly in this direction, it would put huge pressure on the competitors to follow suit. I for one would love to see this happen and not only see Sprint become a more solid competitor to AT&T and Verizon but with SoftBank, perhaps become the catalyst to get all of us Internet connectivity speeds at least equal to what they have in Japan now.

    Of course, there are still regulatory hurdles to overcome as well as scrutiny by anti-trust organizations for this SoftBank/Sprint deal to happen. And then there are the banking issues to deal with too. However, if the heads FCC, FTC and other regulatory agencies see a Japanese man in their lobby with a can of gas, it is not a terrorist. It’s just a maverick Japanese business man who is frustrated with the slow movements of the FCC and telecom companies to provide really high speed bandwidth to the US and I suggest they be ready to talk to him seriously and be prepared to move faster on these key issues than they are today.

    Ultimately, HP, You’ve Got To Do Something

    Via All Things D:

    “We have to ultimately offer a smartphone…” ~ Hewlett-Packard CEO Meg Whitman

    When exactly is this “ultimately” going to be?

    “My mantra to the team is: ‘Better right than faster than we should be there.’” ~ Meg Whitman

    What? Say what?

    (W)e’re working to make sure that when we do this, it will be the right thing for Hewlett-Packard, and we will be successful. ~ Meg Whitman

    Are you also planning on jumping in on the hot new “horseless carriage” business? Or investing in the Pony Express? In case you haven’t noticed, the smartphone market isn’t waiting around for you to “ultimately offer a smartphone.”

    There’s a time and place for things and this is no time to be telling us that you’re “ultimately” going to be making a phone.

    Stop telling us that you’re going to do something. Do something.

    Mobile TV May Make A Comeback

    I have been tracking the mobile TV space since the early 2000’s and mostly given up after the last push, using DVB-H failed. I tracked quite a bit of research around mobile TV in North America and we performed our own use case research as well. North America as a market for mobile TV is very different then markets like Asia and other parts of Europe.

    Large parts of North American populations don’t spend long periods of time commuting on things like trains. In many other parts of the world this is the case and those markets are the ones where Mobile TV has had more success. However, with the rise of tablets, and perhaps even greater installed base of smartphones I wonder if Mobile TV could make a comeback.

    While here at CTIA I got caught up with an organization called the OMVC or Open Mobile Video Coalition. This organization is helping launch a new service in the fall called Dyle.tv. What makes this solution different, and perhaps what gives it the best chance to succeed, is that it is built upon the existing ATSC digital broadcast infrastructure. DVB-H required quite a bit of new infrastructure investments and many did not make them. By integrating right into the existing ATSC infrastructure for broadcast today many broadcasters and networks immediately take advantage of this solution. There are two requirements to make this work. First the broadcast stations need only spend between 15,000-25,000 dollars to add the additional infrastructure to broadcast their existing ATSC signal to mobile devices. This, I am told, is very simple to install and would take a technician about two hours install. Second, the DTV chip needs to be embedded in a mobile device or built into an accessory for a mobile device like a tablet or smartphone.

    Dyle.tv will be a free service and will be available as an Android and iOS app. The only cost associated is what is added to the cost of the hardware or can be purchased separately as an adaptor for things tablets and smartphones. The key point is that the rights from every major North American broadcaster have been secured and broadcast content from every major network will be available through the Dyle.tv service.

    Dyle.tv will launch in the fall and details about the launch, supporting devices, and adapter accessories will be released around that time as well. It will launch in 210 markets in the US.

    Although the market and the infrastructure may be right for mobile TV to make a comeback there is something a bit more interesting with this service. Networks who choose to use their existing infrastructure to deliver mobile TV via Dyle.tv to consumers will deliver up to 19.4 mbps bandwidth to devices enabled with the DTV chip. This means that it is possible, should the major networks participating in this service, to also make their streaming content available for catch up TV through this application. And oh by the way the group behind Hulu is the same group who is helping drive this service.

    My opinion of mobile TV is that it is only good for live content like news, sports, and check-in-tv. The concept of “check in” TV is where you quickly flip to see what’s on when you are bored or standing in line or want to kill time. It breaks down when you come up against content you have not seen yet due to missing the narrative. Plus with the time shifting habits of most American TV watchers most shows are sitting on the DVR waiting for them at home. So the concept of mobile TV as a time killer is more the value proposition. Integrating this solution into automobiles could be interesting as well. However, if catch up TV solutions via a streaming model get integrated with the Dyle.tv service then it could present a much more compelling value proposition.

    I will be curious to see more of the details when this service launches in the fall. There are some interesting elements, that if done right, could become an interesting feature and a differentiator for some hardware vendors.

    Why Facebook Might Make A Smartphone

    There have been a lot of rumors flying around these days that Facebook could be bringing out a smartphone of their own and that HTC is making it for them. Facebook has denied they would do a handset, but rumors and industry buzz around this continues to be strong and usually where there is smoke, there might be a fire.

    It seems odd that given the competitive market conditions in smartphones that Facebook would even consider doing a smartphone, which is why some people I talk to dismiss the idea of Facebook even venturing into this crowded market. But I believe there is a scenario that could actually allow them to do something innovative and interesting even with the smart phone market competition at an all time high.

    Today, most smartphones are based on a specific OS, whether it is iOS, Android, Blackberry, etc. And while a dedicated OS is important given the need for local apps, there is another way to approach this market, especially on a device that you know will be always connected to a 3 or 4G radio. I think that Facebook is smart enough to not get drawn into the iOS and Android wars and if they do release a smartphone, I believe it will be strictly an HTML phone. I have started to hear some rumblings that this is the approach they will take if they enter the smartphone market and in many ways, this would be a smart and potentially disruptive idea.

    With iOS and Android, there are very rich development tools for creating apps and with both of these operating systems; local apps make a lot of sense since these apps can be used on things like the iPod or tablets with no Internet connection. However, anyone who has used apps on connected devices knows that it is the wireless connection that allows most of these apps to really sing and dance. But if the goal of Facebook is to strictly bring out a mobile connection to Facebook and have their smartphone serve as a portable vehicle for them to deliver a whole host of social, commercial, and media related services then HTML would work just fine on a smartphone that always has a connection.

    This would mean that the Web browser would be the OS, so-to-speak, and all of the apps would come through this HTML browser. And since it would be always connected, it could deliver some pretty rich applications and services if done right. This is a rather intriguing idea since the operative word here is doing it right. Mobile Web browsers have come a long way in the last five years and are capable of delivering pretty good renditions of Web pages and Web apps even on devices that have localized apps. But if a browser is to serve mainly as the way to get apps as well as Web content then this browser needs to be pretty smart in its own right.

    But with this move, Facebook would be really moving into new territory. Besides not having any history as a smart phone vendor, they would have to be dealing with the carriers, something that Palm has shown in the past is quite difficult to do right. And, I would like to think that if the only way to gain access to apps is via the Web, then the data deal I would want on a Facebook smartphone would probably need to be an all-you-can eat plan. A plus is that they don’t need a special SDK for apps and, at least in theory, any HTML app should work fine in mobile mode.

    Now I have no clue personally if Facebook is really doing a smartphone even though there are a lot of things pointing to the fact that this may be happening. But I do feel that if they jumped into the smartphone market with an Android device it would just be another me-to smartphone.

    On the other hand, taking an HTML approach with a smartphone that is really optimized for Facebook’s social experience and using it to deliver more personalized content, apps, information, and games through Facebook–could be quite interesting. It would allow this phone to have broad access to Web content and apps, and if done elegantly, keep Facebook users in the Facebook ecosystem longer and thus helping their cause of monetizing more apps and services tied directly to their mobile handset.

    In a way, Apple already does this with the iPod, iPhone, and iPad in that they are all tied directly to Apple’s ecosystem of apps and services. However, Apple lacks the social connection that Facebook could have with their smartphone. And given the fact that Facebook already has close to a billion users, if they could get this smartphone priced cheap, their handset could be quite disruptive as it could take potential buyers away from Apple, Andrid and Windows mobile phone vendors who are especially coveting new users in emerging markets.

    Facebook continues to be quite coy on whether they are doing a handset and their denials could be true. Also it would be a risky move given the current glut of cell phones and smartphones already on the market. But if I were a betting man, I would bet that they have surveyed the market for smartphones and, at the very least, have done some serious R&D around this idea of creating an HTML based smartphone that is tied to the Facebook ecosystem and their social community. And it would not surprise me at all if later this year they actually introduce something like this to capitalize on a growing Facebook community around the world that just might be interested in a Facebook smartphone.

    An Act of Folly: Smartphones in Five Years


    BlackBerry Curve 8300
    2007's hot smartphone

    Let’s take a quick trip in our time machine to survey the smartphone market in the spring of 2007, five years ago. The iPhone had been announced but not yet shipped, and many were skeptical about its success. Android was still mostly a gleam in Andy Rubin’s eye. The hot smartphones of the day included the consumer-oriented BlackBerry Curve and the Windows Mobile-based Samsung BlackJack. The general expectation of forecasters was that Symbian’s dominant market share would shrink, but stay strong, Windows Phone would at least hold its own, while BlackBerry surged and Palm shriveled.

    Fast forward to the present. Smartphone unit sales have nearly quadrupled, but the market has become jumbled in ways that few expected. Apple sells nearly one in five of all smartphones, but is the standard against all else is judged. Symbian is disappearing and BlackBerry is hanging on for dear life, especially in developed markets. Android has gone from nothing to a nearly 40% share, while Microsoft, having replaced Windows Mobile with the snazzier Windows Phone continues to bleed market share.

    Smartphone Market Share
    Operating system 2007 2011
    Symbian 63.5 19.2
    BlackBerry 9.6 13.4
    Microsoft Windows Mobile/ Windows Phone 12.0 10.8
    Apple iOS 2.7 18.9
    Linux 9.6 —
    PalmOS 1.4 —
    Android — 38.5
    Other 1.1 3.4
    Data: Gartner

    Given this background, talking about what the smartphone market might look like in 2017 seems like a fool’s errand, but I’m going to take my chances. To some extent, smartphones are beginning to look like a mature market, at least in North America, Europe, and Japan. One characteristic of mature markets is consolidation of producers. And in the case of smartphones, this trend is complicated by the delicate interplay of handset makers and operating system providers.

    The hot issue of the moment is the pressure toward combining hardware and software into vertically integrated producers. This thinking has been inspired by the staggering success of Apple, though it requires overlooking the struggles of vertically integrated Research In Motion and the implosion of Hewlett-Packard/webOS.

    Ingtegration and consolidation. The industry seems well on its way to more integration and more consolidation. My colleague Tim Bajarin thinks that despite its demurrals, Google will make an integrated Motorola the prime producer of Android products. There’s a lot of reason to believe that if Microsoft doesn’t buy Nokia outright, it will formalize an arrangement in which Nokia becomes its official premier Windows Phone partner. I think both Nokia and Motorola will end up as the official flagships of their operating systems.

    Apple should be able to fly above this storm. As demonstrated by its latest blowout quarter, there is every sign that it will be able to hold on to the high end of the business for some years to come. The iPhone has lost some market share, and this trend will continue because much of the growth over the next few years will come as low-end smartphones displace feature phones in markets and geographies that are not Apple’s métier. But Apple doesn’t much care about market share; it will dominate the much more important categories of mind share and profit share.

    The company most threatened by MicroNokia and MotoGoogle is Samsung, which has just displaced Nokia as the leading phone maker by worldwide unit volume. Samsung is highly integrated on the hardware side. It makes its own processors, displays, and flash memory, among other components. But it has never been a leader in software. It has its own operating system, but Badu has gotten little traction and for its high-end phones, Samsung depends on Android and Windows Phone. Samsung is not going to be happy as a second-class manufacturer for either Microsoft or Google.

    Samsung’s tough choices. Samsung’s options, however, are limited. It could buy RIM, which seems destined to fade away unless it can team up with someone. But given RIM’s struggles trying to bring a new BlackBerry operating system to market, this might not offer Samsung much of a solution. A more promising course might be for Samsung to claim an open-source operating system as its own. It’s partnering with Intel on a mobile OS called Tizen, but this seems headed for the same ash heap as Intel’s other OS efforts. (Meego, anyone?)

    webOS offers a more intriguing possibility. HP owns it, but has open-sourced the code and made it freely available. It’s a sophisticated modern OS that needs work, but one that Samsung might be able to use as its own platform for phones and tablets. Another possibility would be simply to grab Android and definitively strike out with its own fork without regard to Google’s development path. Either course would require Samsung to get deeply into software development, developer relations, and everything else that goes along with being a full-service provider. This has not been a Samsung strength, but the alternatives may be far worse.

    One way or another, I expect Samsung to be a significant player in the 2017 phone market. I’m much less sure about the smaller Android and Windows Phone manufacturers. HTC, with a foot in each camp, has stumbled of late and could have difficulty getting its mojo back. I would not be at all surprised to see Sony, which recently became the sole owner of what had been Sony Ericsson, exit the phone business after struggling, successively, with Symbian, Windows Mobile, and Android. LG, which has never quite gotten the hang of smartphones, could also leave the market. ZTE, Huawei, and Lenovo can trade on their strength in the Chinese market, but may make little impact elsewhere.

    The market in 2017. In unit volumes, the 2017 smartphone market will be dominated by low-end phones sold in emerging markets. If Nokia can survive the stormy present, either in partnership with Microsoft or as part of it, the combination of Nokia’s strength in these markets and Windows Phone’s ability to perform well on modest hardware , could again make it a formidable player. Android may be a big force in two flavors, the official one and a Samsung variant. Many of the smaller phone makers will be out of the market. RIM will hang on in some form, perhaps as a supplier of back-end enterprise services and specialized secure phones. And Apple will be Apple.

    The biggest question mark is MotoGoogle. Left as it is, it seems doomed to become a second-tier Android handset maker, some thing of little use to Google. Integrated and turned into an Android flagship, it puts Google head to head with Apple and possibly Microsoft. It would probably forsake the current Android licensing model, which is not working very well anyway, and would have to develop new talents such as supply chain manage, channel strategy, and carrier relations. Google has the money and the brains to do all this, but I’m not sure it has the desire, patience, and discipline to pull it off.

     

     

     

    The Case Against a 4-Inch iPhone

    As a regular part of my job I evaluate many different devices. I don’t always publish this analysis publicly but nearly every new device passes through our “labs.” When it comes to smartphones, or pocket computers as I like to call them, I get to test and review and analyze all the new android devices, Windows phone, and Apple products. In case you haven’t noticed the trend, smartphones are getting larger screen sizes all the time.

    For me, to do the kind of analysis I want, I always use the device as my primary phone. The current device I have been using is the HTC One X, which I like a lot. As I review these devices one very interesting thing stands out. As much as I love using a larger screen smartphone, you notice very quickly that it is very difficult to operate with just one hand. What I mean by that is that my thumb cannot reach all four corners of the screen without having to shift the phone a bit and adjust my hand somewhat awkwardly. This is less of a big deal on Android devices home screen because generally app icons don’t fill the entire home screen. However, during the using of applications, all of the screen real estate is used and with many apps this is when the difficulty of one handed operation becomes noticeable. This is something that does not become glaringly noticeable until you use a smartphone with a larger screen as your everyday phone in everyday situations.

    I’m roughly the average height for a US male and I have to imagine that my hands are roughly an average if not slightly smaller than average size. The iPhone’s 3.5 inch display is exactly perfect for me to hold the device in one hand and reach all the active areas of the devices screen. This is not the case with every phone that I use where the screen size is larger than 4-inches. I can only imagine the pains humans with smaller hands go through in using such large screen smartphones.

    Yesterday I came across an article pointing out roughly the same thing but making a bigger deal about some of the developer issues around a 4 inch screen and particularly apps being used in landscape mode. There’s a lot of merit to that argument but I would emphasize that the lack of being able to operate with one hand easily could be the strongest case against a 4 inch iPhone. On that point Dustin Curtis makes the same point about screen size issues and one handed navigation on this post and has a nice chart between the iPhone 4s and the Galaxy S II.

    I genuinely like using smartphones with larger screens but they certainly come with tradeoffs. I firmly believe that a 4.3-4.7-inch screen is probably the largest possible screen size for the mass market with 4.7 perhaps pushing it. Many of these larger screen smartphones sell well and I do believe there are segments of the market that desire 4-inch and larger smartphones.

    So the debate really comes down to how important is an uncompromising one handed operation to the overall smartphone experience. One of the things I have found in my own personal analysis is that because I use an iPad regularly I find less of a desire for a larger smartphone. This is why a strong case may be made for larger smartphone screen sizes in other parts of the world where the smartphone is the primary computing device–for the time being. I believe this is why the 5-inch Galaxy Note is selling well in Korea.

    Of course, should Apple decide that a 4-inch screen should become the new normal or as a part of a larger iPhone lineup, I would have to imagine that they would take this issue into consideration. Perhaps one way to solve this problem could be adding more device operation support into Siri. This way voice would become a more fundamental way to operate your iPhone. This would eliminate to some degree any issue with one handed device operation and make voice operation a more prominent feature.

    Speaking of lineups, Apple clearly now has a strategy to have an iPhone portfolio of products in the market. Currently it is a good, better, best, strategy with the 3GS, 4, and 4S. The question will be in the longterm about how different form factors may play into this good, better, best, product lineup. The same can be said with the iPad, which is why I think the iPad Mini is such a hot rumor.

    Ultimately, variety in a product portfolio is a good idea. Apple is yet to vary the screen size offering in the iPhone and iPad–yet they do with other computing products. I do believe it is logical that this trend would continue in all the screens in which they choose to compete in hardware. My personal use case may be that 3.5″ is the right screen size given how I use the device but for others their use cases may demand a larger screen. That being said, understanding the tradeoffs and use cases for different size screens is key for both the device experience and the problems that need to be solved in order to maintain a consistent quality experience.

    I’d love to hear more opinions on this topic.

    [thumbsup group_id=”6501″ display=”both” orderby=”date” order=”ASC” show_group_title=”0″ show_group_desc=”0″ show_item_desc=”0″ show_item_title=”1″ ]

    We Are Entering the True Era of Personal Computing

    Remember that old HP campaign “The computer is personal again?”  I remember seeing that campaign and thinking to myself, when did the computer become un-personal? I’ve been cogitating on this term “personal computer” and in light of the recent debate of whether the iPad is a PC, I have come to some personal conclusions on this topic.

    I would also like to preface this by saying that I agree with how Tim Cook illustrated what Post PC meant. He explained how Post PC means the PC is no longer the center. That is true. However, we are using this term “post pc” only because a desktop or notebook form factor is what has been associated with “PC.” We should not forget that the term PC literally means personal computer. So my overarching point is that we are actually in what is truly the PC (personal computing) era. My logic is as follows.

    First lets look at some computing history.   To do that I am going to look at the evolution of personal computing by calling out specific “eras” of computing.   The first era was the birth of computing. During this era computing was in its infancy. Things like the transistor, then the microprocessor were invented which paved the way for computing.   During the first stage of computing, computers were quite large and normally filled a room mostly and in the form of mainframes then eventually minis.   Many visionaries dreamed of making these devices smaller so people could bring them into their homes and own their own computer.   This vision paved the way for desktop computing. 

    Desktop Computing

    This is the second era of computing.  What most during this time would consider the personal computer I will call a desktop computer.   The term personal came from the idea that each “person” would have one.  When computers were largely mainframes or minis they were too big for each person to own.   Bill Gates famously said “some day there will be computer on every desk.”   This was the result of the next evolution of computing as computers become smaller and were able to now fit on desks as well as become more affordable.  Of course these devices could become personal in the sense that a person owned them and could personalize them to a degree.  But more personal computers were still ahead. 

    Portable Computing

    The next era was the era of portable computing.   This was the era of notebooks.   Some call this mobile computing but my argument is that notebooks were really more portable computers than they were mobile.   Meaning you could move them more easily than a desktop but you still sat down and were stationary using the device at arms length (generally) to type.  My point is you weren’t actually doing computing while being mobile–you were still stationary.    

    Notebooks certainly took us one step closer to personal computing because they added an element of portability. They tended to travel with a select person who largely customized the notebook thus making it more personal to that individual.   I would argue that the notebook is actually the first truly personal computer and birthed personal computing.   

    Now enter smart phones and tablets.   The Merriam-Webster definition of a computer is:

    “a programmable usually electronic device that can store, retrieve, and process data.”

    Another definition I found in the dictionary says:

    “An electronic device for storing and processing data, typically in binary form, according to instructions given to it in a variable program.” 

    So my first question is how is a tablet and smart phone not considered a computer?  I also highly customize my smart phone and tablet for my own tastes and likings via software, personal data storage, access to media, and take them with me everywhere I go.   So how exactly how are they not also personal?  Thus one would have to logically conclude that smart phones and tablets are in fact personal computers on which computing tasks take place.  

    What we need to realize in this evolution of personal computing is that devices like smart phones and tablets represent a form factor evolution of computing similarly to the way the desktop form factor evolved to the notebook form factor.   This evolution led to portable personal computing and it made computing possible in places that were before impossible with a desktop–like at Starbucks.  The evolution of the personal computer form factor from notebook to tablet and smart phone represents the evolution to truly mobile personal computing.   Again bringing computing to places not before possible or were before inconvenient–like the couch, bed, walking down the street, etc.  

    The Era of Mobile Personal Computers

    My point earlier was that notebooks were more portable than they were mobile due to the form factor of a notebook still requiring its user to be stationary, with the device resting on a surface being used at arms length.   Devices like tablets and smart phones change this computing paradigm.  We can hold these devices in our hands and use them, we can move around while using them, we can use them in a range of places and situations where a desktop or notebook could never be used.   Places like point of sale retail, by waiters, or car salesman, while running through the woods, while hunting, while boating, at the park, at the beach, etc.   

    The tablet and smart phone form factor represent what I believe are the best form factors for truly mobile personal computing.   Thus they are simply form factor evolutions in personal computing not something other than a personal computer.  

    Can they replace other form factors?

     
    The answer is no; tablets in particular are not replacing PCs, at least not in the foreseeable future.   Rather what is happening is tasks or jobs are being replaced.  Things that once were done primarily on the notebook or desktop form factor are now being done largely on devices like tablets and other form factors. In essence the best way to think about this is that time is shifting from notebooks or desktops to tablets and smart phones. 

    Prior to tablets, for example, the notebook owned the bulk of a consumers time when it came to computing tasks like searching the web, consuming media, checking email, etc.  Now with tablets, time has been shifted to the tablet or smart phone where the form factor is more convenient for tasks like browsing the web, checking email, etc, in many situations.   

    Each form factor has a role to play.  Based on the list of computing tasks consumers perform, the form factors play a role in making those jobs easier to accomplish.    In this environment what happens is that consumers spread their time across a number of form factors to accomplish computing holistically.  

    Before one “personal computer” monopolized consumers time.  Now time is shared between computing devices in the ecosystem in order to accomplish a wider range of computing tasks.  Things that were not possible, or were harder to accomplish with previous form factors become possible with new computing form factor evolutions that stick in the market.

    Rather than look at tablets and smart phones as separate from PCs it would be more helpful to look at them within the larger personal computing ecosystem.  If we did this then we would not be arguing about whether the “death of the PC” is imminent or the degree at which PC sales are slowing.   Instead we would be talking about the growth of the PC industry as well as the expansion of personal computing into new form factors, use cases, tasks, etc.

    What we need to let go of is not the idea that these devices are not personal computers. What we need to let go of is an archaic and out of date definition, assumption, and stereotype of the term PC.
      
    We are not really in the post PC era.  We are in the post notebook form factor era. We are in the post traditional definition of a PC era.    We are actually just entering the era of truly personal computing.    If Bill Gates vision of long ago was that every desk would have a computer then I offer up this: in this new era, every pocket will have a personal computer.

    Quad Core Smartphones: What it Will Take to Become Relevant

    hedgeThere has been a lot of industry discussion on multi-core smartphones in the past year, and the dialog has increased with NVIDIA’s launch of Tegra 3, a quad core SOC targeted to phones and tablets. The big question lingering with all of these implementations particularly with phones is, what will end users do with all those general purpose compute units that provide significant incremental benefit? In the end, it’s all about the improved experience that’s relevant, unique, demonstrable, and easily marketable.

    Multi-Core Background

    Before we talk usage models, we first have to get grounded on some of the technology basics. First, whether it’s a multi-core server, PC, tablet or phone, many these things must exist to fully take advantage of more than one general purpose computing core in any platform:

    • operating system that efficiently supports multiple cores, multitasking across cores, and mullti-threaded apps
    • applications that efficiently take advantage of multiple cores
    • intelligent energy efficiency tradeoffs

    Once those elements get into place, you have an environment where multiple cores can be leveraged. The next step is to optimize the platform for energy efficiency. All of the hardware and software platform elements, even down to transistors, must be optimized for low power when you need it and high performance when you need it. The Tegra 3 utilizes a fifth core, which NVIDIA says initiates when extremely low power state is required.

    Assuming all the criteria above are met, then it comes down to what an end user can actually do with a phone with four cores.

    Modularity Could Be the Key

    Quad core phones could potentially add value in “modular” usage environments. While there have been a lot of attempts at driving widespread modularity, most haven’t been a big hit. I personally participated on the Device Bay Consortium when I was at Compaq, along with Intel and Microsoft. It didn’t end up materializing into anything, but the concept at the time from an end user perspective was solid.

    Today and beyond, smartphone modularity is quite different than Device Bay’s “modules”. The smartphone concept is simple; use a high powered smartphone which can then extend to different physical environments. These environments span entertainment to productivity. Here are just a few of today’s examples of modularity in use today:

    These are all forms of today’s modularity with different levels of interest, penetration, and adoption.

    So what could quad core potentially add to the mix? Here are some potential improved usages:

    • Modular video and photo editing. These apps have historically always been multithreaded and could leverage a clamshell “dock” similar to the Lapdock or Multimedia Dock.
    • Modular multi-tab web browsing. Active browser tabs require a lot of performance and overhead. Just use Chrome PC browser and check your performance monitor. iOS5 actually halts the tab when moving to another tab forcing the user to reload the tab.
    • Modular games that heavily utilize a general purpose processor. Caveat here is that most of the games leverage the GPU a lot more than a general purpose CPU. It all depends on how the game is written, extent of AI use, UI complexity, where physics are done, and how the resources are programmed.
    • Modular natural user interface. While plugged in and “docked” at the desk or living room, the smartphone could power interfaces like improved voice control and “air” gestures. This may sound like science fiction, but the XBOX 360 is doing it today with Kinect.
    • Multitasking: Given enough memory and memory bandwidth, more cores typically means better multitasking.

    Will It Be Relevant?

    Many things need to materialize before anyone can deem a quad core smartphone a good idea or just a marketing idea for advanced users. First, smartphones actually need to ship with quad cores and a modular-capable OS. The HTC Edge is rumored to be the first. Then apps and usage models outlined above need to be tested by users and with benchmarks. Users will have to first “get” the modularity concept and notice an experiential difference. Moving from standard phone to modular experience must be seamless, something that Android 4.0 has the potential to deliver. Finally, some segments of users like enthusiasts will need to see the benchmarks to be swayed to pay more over a dual core phone.

    There is a lot of proving to do on quad core smartphones before relevance can be established with any market segment beyond enthusiasts. Enthusiast will always want the biggest and baddest spec phone on the block but marketing to different segments, even if it provides an improved experience, will be a challenge.

    Is There Room for A New Mobile OS?

    A couple of years ago, when various handset makers were looking for a mobile OS to back for their devices, they were given a proposition from Google that was hard to refuse. Google would provide an open source version of Android and with it allow the vendors to customize and add their own features so that they could differentiate their products from other Android licensees.

    At first this worked well and Google got dozens of device makers to hop on the Android bandwagon. And for the most part, Android took off, especially in smart phones. But over time, many Android licensees found Google difficult to work with because of their design approach to Android, which was always a moving target. And while Google called it an open mobile OS, as time went on, it became much more controlled by Google and licensees have had less room to do things to help differentiate their devices. Even worse, they have found it more challenging to control their own destiny when it comes to many key services tied around their own offerings.

    Now that Google has bought Motorola, many Android licensees believe Google will be exercise tighter control over Android and with Motorola develop a more vertically integrated approach to the market. This is similar to what Apple does through owning the hardware, software and services; integrating them tightly together to provide customers a seamless user experience. While Google has said that they will continue to develop Android as an open source product and work with licensees equally, none of the licensees I have talked to actually believe this. At the very least, they expect Motorola to get early code. Many believe tighter integration between Android and Motorola hardware is inevitable and doubt they will get a similar deal in any way. The various lawsuits against Android as well as the potential of having to pay extra royalties to Oracle and Microsoft should they win their legal cases against Android does not make them happy either.

    Not long after the news that Google would buy Motorola, and that HP was going to ditch webOS, Microsoft started courting Android and webOS developers even harder. In fact Microsoft is offering free Windows phones to webOS developers and more hand holding if they jump ship and start developing for Windows Mobile 7and 8.

    But what I am hearing from vendors and carriers is that the original need for a completely open mobile OS is what still they really want. Supporting Microsoft is equal to just supporting Android. Indeed, Microsoft would still control the OS and dictate the terms of use and development and give licensees very little room to innovate at either the hardware or software level.

    It is also not clear where webOS is going. We don’t know who its owner will be yet. Does it stay with HP or go with the spinoff? We also don’t know if it will ever be an open OS that licensees of the future can freely customize for their own markets and customers. One thing that needs to be kept in mind is that in developed markets, complete ecosystems of hardware, software and services define the user experience. But that may not be the case in emerging markets.

    In emerging markets, the need to have a truly open source mobile OS is very important since they need to be able to customize their offerings around a specific language and localized services. This is especially true for emerging market carriers. The fact that mature markets demand hundreds of thousands of mobile apps does not necessarily translate to the actual needs of smart phone users in emerging markets. There they need the dozens or hundreds of apps that are customized for their regions, customs and traditions.

    Everyone knows Apple’s approach to their OS is proprietary. Even though Microsoft’s Windows Mobile 7 OS is freely licensable, it is fully controlled by Microsoft. And now that Google has bought Motorola, Android is looking more and more like it could become more tightly controlled as part of a vertically integrated offering. Unless HP quickly states that webOS will not only be licensable but also truly open (which I don’t think they will ever do), then I believe that there is serious room for a completely new mobile OS to emerge and especially give handset vendors targeting emerging markets an OS of their own to work with.

    We are already hearing that even the big handset vendors who are backing Android are seriously looking for an alternative OS to back to hedge their bets and to help them go after emerging markets where giant app stores are less important for success. This leads me to believe that there is not only room for another mobile OS but a need for one that is truly open that will never be encumbered by big company agendas that drive the designs of their mobile OS.

    Microsoft Has A Chance to Compete With Windows 8

    It’s way to early to count Microsoft out. Just look at history. Microsoft has a fighting chance with Windows 8 because they are Microsoft. We can argue and debate whether they understand the consumer. Or whether the market has passed them or not but the simple truth is they are still a force in the computing landscape.
    Continue reading Microsoft Has A Chance to Compete With Windows 8