Author: Ben Bajarin

Ben Bajarin is a Principal Analyst and the head of primary research at Creative Strategies, Inc - An industry analysis, market intelligence and research firm located in Silicon Valley. His primary focus is consumer technology and market trend research and he is responsible for studying over 30 countries. Full Bio

Apple’s 4-Inch iPhone 5 vs. Android 4-Inch Plus Devices

Since June I have been using the Galaxy Nexus 4.65 inch screen smart phone. Upon switching to that device from the iPhone 4S, I was instantly taken by the screen size. It was clear that gaining just over an inch or so in display size yielded a compelling experience. In fact, the screen size was one of the primary reasons I was able to withstand not going back to the iPhone 4S despite the things that frustrated me about Android.

Bigger screen size is one of the features we hear constantly touted by Android handset makers as a core feature. By reading many of the comments from the Android enthusiast community it is clear that larger screens are something they clearly value. It is also clear that Android OEMs believe that having bigger screens is a clear differentiator over the iPhone. Coming off my experience with the larger screen size Galaxy Nexus I can understand why at the surface this seems to be true. This is why I was pleased that Apple made the iPhone 5 with a larger screen. One of the criticisms about the iPhone 5 I have heard was that the screen was still too small at 4-inches. It was clear from listening to the presentation at the iPhone launch event that Apple is convinced that from a design perspective 4-inches is the ideal screen size for clean one handed operation. So the question I want to tackle is whether there is clearly more value to be had in smart phones with screens larger than 4-inches. In essence, is bigger better?

The initial assumption is that the larger the screen the more information I can see at one time. If this was not true, then I would have to question value that would be derived from the larger screen smart phones outside of perhaps games and videos, especially given the design and hardware tradeoffs necessary to make a larger screen as well as the compromise in efficient one handed operation.

To test this I looked at key applications on both the iPhone 5 and the Galaxy Nexus to see if applications like email, text messages, viewing web pages, Twitter, Facebook, etc., were that much better on a 4.6″ screen. In all the scenarios I wanted to look at, I compared both devices with key applications and looked at how the information was displayed.

Email

For many email is still a critical application. Email support for Microsoft’s Exchange was one of my more frustrating experiences overall with Android. Email is critical to me in my workflow and I have always liked how Apple handled Exchange server and I prefer the UI of Mail as well to many other mobile email applications.

As you can see from the below screen shot both the 4″ screen on the iPhone 5 and the 4.6″ screen of the Galaxy Nexus displayed roughly the same amount of information.

On Android the app lets me see about 6.5 messages and the iPhone shows me 6 full messages, which is one full message more than the iPhone 4S. My conclusion is that the 4.6″ Galaxy Nexus provided no significant value with respect to email over Apple’s 4″ screen on the iPhone 5.

Text Messages

Not everyone may consider email as critical as an everyday application as myself or other professionals but text messaging is a different story. Text messaging may be one of the most important applications on any smart phone and I was curious to see if the larger screen provided any significant value when it came to text messaging.

As you can see from the text message thread below, the iPhone 5 actually shows more messages as a part of each thread than Android. A key thing to note is that on the iPhone 5 I have a thread that is often more than one line per message, where as on Android there are more one line messages. When I looked at text message threads on the iPhone 5 that were more one line messages, I could see almost double the amount of messages on the screen than on Android.

Conclusion: iPhone 5 with its 4″ screen does a better job displaying text messages than the 4.6″ Android Galaxy Nexus.

Facebook

Facebook is another key application that many consumers use regularly on their mobile devices. Both of the screen shots below were taken using the mobile application created by Facebook for each platform.

As you can see both devices show roughly the same information with the iPhone 5 showing just a bit more of the timeline but not enough to consider it useful. My conclusion was the Facebook experience was generally similar with no significant value being derived with Facebook on the larger 4.6″ Galaxy Nexus.

Twitter

Not everyone uses Twitter. I do regularly and it is an important application in my every day smart phone use. The comparison screen shots below are Twitter’s official application on both iOS and Android.

Here again we find very similar experiences between both devices with no real value being derived from the larger 4.6″ screen.

Web Browsing

Web browsing is another key application to a smart phone experience. Many sites are deploying mobile versions of their sites but to do this test I wanted to see if the larger 4.6″ screen on the Galaxy Nexus let me see more of a full web page than the iPhone 5’s 4″ screen.

So I went to the full version of the NY Times to see how the experience compared on both devices.

As you can see here again, both devices display about the same amount of information regardless of their screen size differences. Interestingly, however, even though the iPhone 5’s screen is smaller than the Galaxy Nexus, when viewing the full version of the NY Times on both sites, I still found the iPhone 5’s screen easier to read the text and key elements of the page. Thus, the full web experience was actually better on the iPhone 5’s 4″ screen than the Galaxy Nexus 4.6″ screen.

Key Conclusions

What I am pointing out in this analysis is in the same vein as the issue I brought up in my column last Friday, which was that customized apps, tuned to a screen size, are going to out-perform in terms of experience and value than apps that are simply scaled to match whatever screen size gets thrown on the market. Scaling an application just increases its size relatively but as I show above does not lead to more information and debatably a better experience.

The one area where this may make a difference is with games and videos where a slightly larger screen may be pleasant. But those use cases are just one part of the overall device usage.

We are already seeing the vast majority of iOS developers beginning to tune their apps just for the 4″ screen. This is not something we can say with Android development. It would be difficult to create custom applications for all of Android screen sizes in order to utilize the value of each screen size–if even possible at all. This is why Android is based on an app scaling philosophy.

I am watching closely how iOS developers take advantage of the larger screen to see if the custom apps built for 4″ screens actually provide more value in terms of experience and value than scaled apps on Android to fit every screen size.

Ultimately consumers will have to choose which tradeoffs they feel are most valuable as they evaluate what matters most to them in a smart phone experience. What performing this analysis proved to me was that I found no real significant value in terms of experience or information display with even the largest Android smart phones.

In conclusion, bigger does not necessarily mean better.

Windows 8 Tablet Fragmentation and the App Dilemma

I was having a discussion with an iPad software developer recently and we were discussing the iPad mini. Interestingly he was still a skeptic about the iPad mini and I thought his reason was interesting. He noted that the apps they develop, and primarily the user interface, are specifically designed for the current iPad screen size. He said that everything is placed where it is for a reason.

His skepticism about the iPad mini was based on his conclusion that if a 7-8 inch iPad was to come out his current app would not work. His point was that 2 or so inches may not seem like a big difference but for many apps that have menu’s and touch based navigation interfaces, 2 inches is a lot of screen real estate to loose. Basically he had concluded that for many applications developers would target each tablet screen size independently.

His points got me thinking. First of all I agree with him. If we have learned anything about Apple’s developers is that they are willing to take the time to make sure their app experience is ideal no matter what the screen size. The iPhone 5’s larger screen and app developers already starting to take advantage and optimize their apps for the new 4” screen. Interestingly Apple, during this transition, is faced with having apps with two different looks and feel in their app store for both 3.5” and 4” iPhones. So as developers look to tweak their UI for the iPhone 5 which app UI will we see in the app store? Apple is solving this elegantly but only showing consumers the new app UI for 4” apps only if they have an iPhone 5. That way consumers who don’t have the iPhone 5 will still see app preview screenshots of the 3.5” UI.

Now with all of that in mind let’s turn our thoughts toward Windows 8. In all the above examples I mentioned we were talking about screen size differences ranging from .5 to 2 inches of difference. And within that extremely small range we should expect to see developers uniquely tweak their app experience and UI. In essence they are not simply shrinking or expanding their apps to work on smaller or larger screens, they are in essence creating new app experiences for those screen sizes. Windows 8 touch based hardware will be so fragmented in screen size that we will see touch based Windows 8 hardware ranging from 10” all the way up to 27.” If developers feel the need to optimize their software for a screen that is anywhere from a half-inch and even a 2” difference, what will they do when they have 4, 5, or 6 different screen sizes to target in the Windows 8 touch hardware ecosystem? And more importantly will they feel that their energy and resources will be worth the investment and hard work?

Microsoft needs developers to be writing touch based applications but my concern with the touch based hardware fragmentation is that it will may cause them to target only specific screen sizes and not others. This would mean that the touch based software experience will be better on some Windows 8 hardware but not others. I can tell you right now that an application that is built for 10” Windows 8 hardware is not going to be a pleasant experience on a 27” all-in-one running Windows 8 with a touch screen.

Some categories, like games for example, may work fine within this fragmentation. However, it would seem logical that even developers of many of the popular games may want to make tweaks for larger vs. smaller screens that may run their apps.

The bottom line is that I expect developers who are looking to sell software to the masses to want their software to be the ideal experience on any screen size. To do that they will inevitably need to write software and create user interfaces that are specifically made for certain screen sizes. This is where I feel developers may feel the need to pause and truly evaluate the effort they put into Windows 8 touch based software.

You can make the point that the screen size fragmentation I mention has existed for decades in the Windows ecosystem. This is true but I fundamentally believe that when it comes to mouse and keyboard software and UI this fragmentation is not an issue. Because of the unique way touch based software UIs are made, I believe fragmentation becomes an issue when it comes to touch computing in a way it never was with mouse and keyboard computing.

I believe touch computing is the future, and so does Microsoft with the emphasis they are putting on touch. Microsoft’s challenge over the next twelve months is to convince developers who also believe in touch based computing that their platform is the one worth investing in.

How 7-Inch Tablets Could Help Notebooks Make a Comeback

If you follow much of what I write you may be familiar with the solutions based thinking approach I frequently mention. The fundamental aspect of a solutions based approach to personal computing understands that multiple screens working seamlessly in conjunction together will equal personal computing. Personal computing does not mean a single personal computer any longer. In the post-PC era it means many personal computers working together in a whole.

I have used this philosophy when outlining how different screens in conjunction together pair well and equal a computing whole. For example when I wrote about the combination of desktops paired with tablets as a solution. I’ve even wrote about this with regards to 7″ tablets and their role with traditional notebooks–which is the focus of this column.

There is ample data surfacing from different parts of the industry to support the claim that the iPad has been disrupting traditional PC sales. This is true and it is happening for reasons which I outline here in my column on why I believe tablets are the future.

Yet there are segments of the market that still need and require a traditional notebook. To be entirely honest I am not sure which camp I am in yet, whether the tablet + desktop is the solution for me or 7″ tablet + notebook is the solution for me. Until I fully experience the latter the jury will be out.

This brings up a key point and it relates to how product segments mature. Traditional PCs are mature and consumers are so familiar with their needs, wants, and desires with traditional PCs that when they buy them do so extremely intentionally to meet the needs, wants, and desires they have established for themselves.

Tablets on the other hand are not a mature category yet with regards to the mass market and are therefore still maturing as a product segment. It will most likely take customers at least two generations of owning a tablet to fully establish their needs, wants, and desires for a tablet PC. This is where the 10″ v. 7″ tablet form factor will come into question.

If you are like me, upon using the iPad I began using my notebook less. Due to its size, convenience, battery life, robust and simple interface, etc., I found and still find the iPad to be extremely efficient in both my work flow and my non-work based personal computing tasks. Like fellow TIME columnist Harry McCracken, I reserve my notebook for specific tasks and use my iPad for everything else.

However, Harry and I, along with many others who find this solution suitable, may only represent one segment of the market. We are served with this solution but perhaps others will not be. This is where 7″ tablets will make the discussion that much more interesting.

Upon getting the Nexus 7, I set my iPad aside and committed to using it as my primary tablet. Upon doing so, I found that I pulled my notebook out quite a bit more than when I used my iPad as my primary tablet. This was not a surprise for me since I had already had an assumption that 7″ tablets were not general purpose computing devices like 10″ tablets but instead are better suited for media and entertainment only. I still believe this is the case and will remain the case. If you have experienced the Kindle Fire or Fire HD you will probably feel similar. None of the products I just mentioned took much time away from my notebook like the iPad does. But this did re-enforce a point that I feel is important. Which is that 7″ tablets will help to rejuvenate the notebook market. At least in terms of notebook upgrades.

Part of the reason tablets have been disrupting PC sales is because for many segments of the market there are more questions than answers around tablets. They are not sure yet how far a tablet can take them in terms of personal computing. Consumers need to experience tablets to fully come to a conclusion as to whether they can replace some or all of their computing needs and what other products they may need as a part of a solution. Some may conclude they still need a traditional PC some may not. But the question around tablets and the fact that we have heard from many notebook intenders that they are delaying the purchase of a notebook because they want a tablet only re-enforces this point.

Many consumers are in the market for a tablet but are not quite out of the market for notebooks. As the tablet market matures and consumers come to conclusions about a tablet and the role a touch based computer will play in their personal computing ecosystem, it will allow them to make more informed decisions on the solutions they require. For many of those who have put off buying a new notebook perhaps once they realize they want a 7″ tablet but still need a notebook, they will then decide to upgrade. That being said, Notebook refresh cycles will no longer be the same with tablets and smartphones taking over the 2 year average life cycle.

Although, I expect the next few years to be rough waters for Windows PC makers, I feel it is key that those who desire to continue making notebooks, develop a strategy for 7″ tablets.

iPhone 5 Design As a Killer Feature

As Steve pointed out in his article this morning, the sentiment that the iPhone is underwhelming steaming from many of the tech press lacks serious understanding of the consumer market. It is true that the iPhone does not have things that other phones have. Things like the largest screen of any phone, or NFC (I point out why here), or a number of other features. In the whole discussion of what the iPhone doesn’t have people are forgetting that Apple’s philosophy of what you leave out is just as important as what you put in. Many of those things the tech media is complaining about for not being in the iPhone 5 were left out on purpose. And I think its clear that Apple knows what they are doing.

But one thing the iPhone 5 does have that is unmatched in the smart phone market today is industry leading industrial design. In my opinion only Nokia comes close to Apple with its passion for industrial design. I’ve been using the Galaxy Nexus since June and there are many things I like about it. I used a Galaxy S3 for a short time a few weeks ago and it is nice as well. But I continually find the build quality, and attention to hardware design detail sorely lacking across the board, with the exception of Nokia. Design is a feature, that should not be ignored or discounted.

Many smart phones have a plastic, and cheap in my opinion, feel even though the screens are made of glass. Many of the most popular smart phones today are in fact made mostly of plastic. But there is a fundamental reason why these design decisions are made and holistically why most major smart phone OEMs do not pay the same attention to detail and industrial design of Apple.

Android Handset Depreciation

For Android to compete with Apple it takes an army of Android devices. Although Apple has several products on the market, they only have one current generation smart phone. Android OEMs launch dozens or more every year. Although the Galaxy S3 outsold the iPhone 4S briefly last quarter, its hard to believe that is a long term trend since many consumers held off for the iPhone 5.

The Android army can only succeed by flooding the market with Android devices. Some are very good but many are not. The key, however, is that to survive in that market and actually compete you need to constantly put new products in the channel and be very aggressive with price. Android devices depreciate faster than any other product on the market. What I mean by that is they start at inflated price points then very quickly get to $99 or even buy-one-get-one-free.

The Galaxy Nexus, one of the better devices on the market and the one that I am using until next Friday, is already $99 dollars with many carriers with a buy-one-get-one-free offering at that price point.

Some carriers around the world are also already offering similar deals for the Galaxy S3, Samsung’s flagship smart phone. Soon that device as well will be offered at extremely aggressive prices in every carrier around the world.

The iPhone however holds its value and does Apple does not need to drop the price of its flagship phone every three or six month’s to continue to outsell any single other device. Apple has never dropped the price of their current generation iPhone nor has any carrier needed to offer a buy-one-get-one-free deal in order to move tens of millions every quarter. I find this fascinating.

Further points on how the iPhone holds its value is in trade in or resell offers. I don’t see companies offering high value trade nearly a year after its release with any other product than the iPhone. This simply goes to you how the market value for the iPhone is drastically different than any other smart phone on the market.

This is where the design is the key. Because of the unprecidented attention to detail the iPhone does not just hold its value, it is valued by the market. More so than any other smart phone. Premium design is valued and don’t let anyone tell you any different.

Design is a premium differentiator and the fact that Apple keeps such a premium designed product at an entry level price with contract at $199 should continue to impress people.

I stated this in my article on the iPhone 5 earlier in the week but this new product will stand out like the crown jewels at a garage sale at every retailer where it is sold.

Why NFC is Irrelevant To the Mass Market

NFC technologies have been around for quite some time. Many years back my firm did some market analysis on NFC for Philips Semiconductor about the time it was spun off to become NXP. In doing this we spoke with retailers, merchants, payment gateways, etc., in order to better understand the infrastructure change necessary to fully deploy NFC. Without going into that in depth analysis, I will tell you that it is difficult and costly.

What Problem Does it Solve?

Due to the fairly extensive new infrastructure that would need to be deployed in order to broadly deploy NFC, retailers would need to be convinced that it would lead to more transactions in their stores AND not be something that goes by the wayside to some new technology in just a few years. Many retailers are already struggling and faced with significant challenges that need to be solved. They recognize that the mass majority of consumers are not out there clamoring for NFC nor even recognize the need or have the desire for a new payment process.

But the key to addressing NFC is to look at what problem it solves. Perhaps even better stated, does it solve a pain point in the payment process today. I would suggest that it does not.

Humans are creatures of habit. Keeping a number of credit cards in a wallet or purse and pulling out the correct one to make a purchase is not a massive inconvenience for many. The challenge with NFC is that its value proposition is only to replace credit cards in a commerce market. That is the only process it is addressing in a retail environment. Retailers have much more pressing problems to worry about. Like consumers using their stores to showroom and then go and buy online. Or other retailers rigorously competing to steal loyal customers, etc.

I am more interesting in technologies or opportunities to completely revolutionize the shopping experience. This is something NFC does not address.

Let’s Change the Shopping Experience

When thinking about how the future of shopping may be shaped, I like to use Apple stores as an example. It is possible with the Apple Store application to explore, learn, get help, and more, all from an application. This application is designed to make the in store experience more helpful and more engaging. Apple has also integrated into the application an easy pay method that allows you to scan the product you want to buy, and pay for it right there using your iTunes account. So without NFC, and no new infrastructure, Apple has integrated a simple and engaging experience as well as an opportunity to complete a transaction all without NFC. Apple is deploying more of a “closed-loop” payment system using their trusted relationship with the consumer and iTunes as a gateway. Exploring how apps and these “closed-loop” systems may benefit retailers is an interesting scenario to think though.

If I was a retailer would I rather invest in a massive amount of new infrastructure that only solves a payment gateway problem or invest in experiences like the one possible in Apple stores that keep my customers engaged with my store and the products I carry?

The reality is there is nothing that can be done with NFC that can not be done by an app and a connection to the Internet.

Changing the in-store shopping experience in a way that address the challenges retailers are having is not something NFC solves. I believe in mobile payments and I believe in machine to machine communication. I am just not sure NFC is the way forward when their may be better solutions readily available. NFC may have a role in that environment but it is not in the foreseeable future.

iPhone 5: The Most Beautiful iPhone Yet… and More

As a leader in personal computing, Apple product launch events often bear the burden of too much hype. Then as they launch new products that set new sales records, customer satisfaction levels, and needed health into the consumer electronics industry, people always seem to ask “have they done enough?” My stock answer is yes, and I am sticking with it.

The headroom to grow in the smart phone market is enormous. Smart phones are maturing as a market but we are far from market saturation. The global customer base is still ripe for the picking and Apple has raised the bar when it comes to the iPhone 5.

The Most Beautiful iPhone Yet

There is no doubt that there are smart phones in the market with larger screens than the iPhone 5. There is however no doubt that the iPhone 5 is the most beautiful smart phone on the market by a large margin. The iPhone 5, when you feel it, see it, and hold it, feels like a fine piece of jewelry. The quality and craftsmanship surrounding the iPhone 5 must be appreciated no matter what your opinion of Apple.

I often think that many underestimate the value of design when it comes to consumer markets. I have written extensively about how Apple turns technology into art and the iPhone 5 may be the ultimate manifestation of this observation.

Design plays a key role for those who sell hardware because well designed products stand out from the pack and captures consumers attention. The new iPhone 5 is going to be the crown jewel of every retailer who showcases in their store.

iPod–Don’t Call it a Comeback

Perhaps the part of today’s event that took most by surprise, was Apple’s injection of innovation back into the iPod line of products. Many have long assumed that it was inevitable for Apple to phase out the iPod line of products. The iPod line has been on a steady decline quarter after quarter but perhaps that is all about to change.

Although the iPod is no iPad or iPhone in terms of growth opportunity, it still fits strategically. Keep in mind that Apple is still the undisputed leader in the portable music player market. Some may argue that the portable music market is shrinking or disappearing but what if it is simply because no major upgrades have happened in this space Apple is looking to change that specifically with the new iPad Nano with its 2.5 inch multi-touch screen and bringing many of the same innovations of the iPhone 5 to the new iPod Touch.

Strategically both products exist to extend the Apple ecosystem for sections of the market who value a dedicated media player. Believe it or not, the world is not in a uniform move to converged devices only. Just look at Amazon’s Kindle e-Reader strategy to see this point. Tremendous market opportunities exist for those who create products that cater to specific customer needs. This is why the iPod line will still stay relevant for some time.

Also, there may be a lot of people who may never buy an iPhone and opt for Android but still want the rich features and media ecosystem that Apple offers their users. Now that the 4-inch iPod is similar to an iPhone, including Siri support, there could be a lot of Android customers who may buy iPods to supplement their Android phones that cannot not match Apple’s exceptional music, TV and movie content.

An interesting thing to think about is with the quality of the new iPod’s camera perhaps many may elect to purchase it as a point and shoot camera that does a whole lot more. Perhaps the new iPod is targeting the point and shoot camera market. With the inclusion of the Apple iPod Loop which is a camera strap, I think Apple feels the same way.

New To Apple Customers

There is an important perspective here that is worth remembering. Apple’s priority is keeping their customers happy. Apple is often criticized for integrating into their products features and functions that exist in competing platforms or hardware. That is all fine and good but for many consumers (over 400 million of them) they are not customers of competing platforms, they are customers of Apple. What matters is that Apple keeps their customers happy. These customers have invested time, money, and energy into Apple’s ecosystem and have no desire to leave.

That is exactly what they have done with the iPhone 5. They have brought key new features and functionality to their customers base. A customer base which I am convinced has extreme pent up demand for this new iPhone. Existing Apple customers will be extremely pleased with the latest generation iPhone and I fully expect the iPhone 5 to shatter all previous iPhone sales records. However, upon seeing this amazing new piece of hardware, I expect Apple to welcome many new members to the family.

The Purpose of Design Patents

Much of the initial reaction to the Apple v. Samsung trial was based more on emotion than critical thought in my opinion. The discussion over whether it is good or bad for consumers was interesting but again I felt mostly emotional. In all reality how is a challenge to uniquely innovate bad for anyone? As interesting as that element of the discussion was I thought the debate around design patents was a bit more interesting.

As a part of our market analysis I keep a keen eye on what specific companies do to differentiate themselves in what I like to call the sea of sameness. To get a more holistic understanding on how differentiation may happen in the sea of sameness, I like to study how its done in other industries. Particularly ones that have been around for longer than the computer industry and also ones that are highly saturated and mature. We can make some interesting observation from industries like automotive and consumer packaged goods. It is observations from those industries that help us understand the importance of design patents and more importantly design consistency.

You Can’t Patent Rounded Corners

One of the least thought through elements of the whole trial was the part about rounded corners on specific products. In a post trial statement representatives from Samsung stated:

“It is unfortunate that patent law can be manipulated to give one company a monopoly over rectangles with rounded corners,”

It seems as though there is a fundamental lack of understanding of the purpose of design patents. To explore this thought I think it would be helpful to look at a company with an interesting iconic design in Coca-Cola.

It is not just Coke’s logo which stands out but also the design of both their glass and plastic bottles. Coke owned a patent on the design of their glass bottle design in 1915 and the designs of their bottles have evolved but remained consistent in overall look and feel. It is this specific and unique design of the Coca-Cola bottle that helps it stand out in the sea of sameness.

If you went into a grocery store and looked at a wall of beverage containers, all without the labels, you can easily pick out the one which is a Coke bottle and that is the point. It is iconic, consistent, and easily identifiable.

Round Corners As a Design Philosophy

Now perhaps those engaging in the you can’t patent round corners debate have either no appreciation for consistent design philosophy or never taken a step back and looked at all of Apple’s products. Because when one does take a look at all of Apple’s products you will see that every piece of hardware follows the four perfectly asymmetrical rounded corners design.

This design philosophy has been in place for quite some time. One could argue that the rounded corners on a screen started with the first colored iMac’s. From that point on the four asymmetrical rounded corners began to become a consistent theme of all Apple hardware.

Image Credit TechChunks

The goal again of these “rounded corners” is to maintain a unique, consistent, iconic, and easily identifiable Apple product. To carry on my point about the Coke Bottle, if you were to look at a table full of notebooks, all without logos, Picking out the one that is Apple’s would be easy. This is not something I can confidently say with regards to any other PC OEM with the exception of Lenovo.

Most other vendors who make hardware change their design theme from year to year based on what the trends are. Because of that often they change so drastically from year to year that is it clear no overall design theme is being employed. In fact I would contend that for the average consumer no designed personal computer hardware is more easily identified than Apple’s.

This is true in the smart phone and tablet space as well. That I feel is what Apple was trying to protect with their claims that Samsung’s 10.1 tablet had corners that were rounded identically to the corners on all other Apple products. Apple is deploying a design philosophy that is consistent and intentional. Samsung, with regards to tablets, is not, and that was the point.

Understanding the design philosophy from Apple becomes interesting as we think about future products. The only reason you would defend a design philosophy or design patent for that matter, is if you intend to stick to it for the foreseeable future.

This is clearly one way Apple intends to help its products stand out in the sea of sameness–at least from a design perspective. Sticking to this design philosophy and maintaining the consistency of size, shape, and colors, will continue to make Apple’s products not only be objects of desire but also easily recognized year after year by consumers. Which is all part of the strategy.

What I Like About Amazon’s Kindle Strategy

For the 12 years that I have been studying the technology industry, within my role as an industry and market analyst, I have tried to understand the strategic elements of this industry that often go overlooked. This is probably why I have spent so much time thinking about the strategic role hardware plays in Amazon’s business model.

We have written quite a bit here at Tech.pinions about how Amazon’s business model is potentially disruptive, but more importantly a foreshadow of a model we may see more of in the future. Namely, how hardware as an extension of a service may represent the ideal way to consume said service.

While on stage at Thursday’s Kindle launch, Jeff Bezos continually emphasized that Amazon at its core is a services company. In this regard Google and Amazon are very similar. They are both fundamentally services companies. They are also similar and unique, in that they both approach software and hardware with a services first mentality. What I mean by that is that they start thinking strategically with their services, then to software, then to hardware. Other companies in the industry take a hardware first approach. Some take a software first approach. Apple being vertical in all areas of personal computing puts equal emphasis on hardware, software, and services, and in this regard are unique as well.

For Amazon, starting with a services first mentality, allows them to do things others simply cannot do. They build hardware not to make money but to be the best platform for their services. This allows them to create compelling hardware but offer it at a lower cost than a similar company making identical hardware but needing to make money off the hardware itself. This scenario is the only one where I feel price as a competitive advantage is valid. Generally speaking, a hardware only company whose goal is to be the first to the bottom of the price pyramid, is going to be the first to go out of business.

Amazon has the fundamental business of being a services company to back up and justify a hardware as a service strategy. It is not a strategy that will work for everyone. And even though I find this strategy compelling, it is not the one I like the most.

The strategy Amazon is using that I do like the most is that they are solely focused on a certain type of customer–the Amazon customer. With every generation of Kindle product, Amazon has constantly made things better for their customers. This type of strategy generates loyalty and trust; Something Amazon has with their customer base. Not only is Amazon focusing on their customer, they are also constantly learning about their customer. Customers needs may change, develop, mature, etc., and constantly learning and observing how to develop better solutions for their customers is a very smart approach and one Amazon is doing well.

This is what stands out to me most when I look at Amazon’s product portfolio. Each product is designed to focus on a set of problems and offer solutions to those problems, which are important to a specific set of customers. This customer centric strategy is one that I feel will clearly resonate with Amazon’s customer base.

Because of this strategy, I feel that it is easy for Amazon’s customers to perceive value. They will look at the Kindle offerings and somewhere in there find things that they value and consider investing. And because of Amazon’s hardware as a service mentality, the price barrier to entry is lower.

It is clear that companies that are taking an ecosystem approach to their products and solutions are in strong positions for the future. Consumers are beginning to invest in ecosystems whether they know it or not. Ecosystems are sticky and Apple and Amazon have two of the strongest ecosystems in my opinion.

I feel Amazon has one of the stronger strategies to compete with Apple, who is the clear market leader in tablets. Amazon is in this for the long run. They understand the tablet market is a marathon not a sprint. They understand it is a very big market which can sustain more than one player. But by focusing on their customers needs I think they have the right strategy for the long haul.

Kindle Fire Free Time and the Future of Family Computing

Tablets are one of the more uniquely positioned personal computer products I have ever seen. Largely because they have aspects of personal computing traits the same way a notebook does. However, they also have a more shared screen or communal set of traits which notebooks do not have. Desktops have evolved in a way where they have become more of a communal or family PC. But they are big, stationary, and most households only have one. Tablets however are more mobile and for that reason get passed around to other members of the family more easily. Just look at how many parents pass their iPads to kids to use in a variety of ways and you can see how a tablet can also be a shared personal mobile computer.

Tablets start to get very interesting when you think about them in the context of a family or a larger community. This is exactly the kind of thinking Amazon has begun and the beginnings of this trend can be found in a new experience they launched with the newest Kindle Fire’s called Free Time.

Kindle Free Time is a customized experience on both new Kindle Fire’s for kids. It comes with parental controls built in that allow parents to monitor and set limits with the child’s screen media time. For example, a parent can set no time limit for reading (because who doesn’t want their kids to read more) but set a limit for how many minutes a day the child can play games or watch videos. Non children’s content is locked out of Free Time mode and the browser is as well. The color theme on the screen is blue, where the main Kindle Fire mode is black. This way the parent can quickly glance at the tablet and make sure the child is still in Free Time mode and hasn’t hacked the password.

This kind of thinking around software customizations for a shared computing mode is encouraging for me as I look at ways personal computing solutions evolve to support family computing models.

I still debate in my head heavily the degree that tablets are personal computers vs. shared computers. I think the answer is that they are both and software that allows this multi-modal experience will be well received by the market and in particular families. Interestingly it is Amazon’s creation of the Whispersync network that will enable this. I can envision a scenario as this strategy evolves where it doesn’t matter whose Kindle Fire HD I pick up, I can just log in and pick up any game, movie, book, etc., right where I left off. This is not how it works today but thinking in terms of communal and family computing, I think it will evolve this way.

I hope many tablet manufacturers and platform providers are taking note of Kindle Free Time and begin to think more about family computing modes with their solutions.

Tech.pinions Recommended Reading

I hope our many American readers are enjoying a day off celebrating Labor Day. To our many readers in other parts of the world happy Monday! Since today is a holiday in the states we didn’t plan an official column for today but rather wanted to highlight some other articles we thought deserved to be read.

Apple Never Invented Anything by Jean-Louis Gassée

Gassée had an interesting post and comment thread on his post called The Apple Tax, Part II. He followed it up with this excellent article where he point out the many flaws in the Apple never invented anything argument many seem to be fond of making. Gassée uses a great analogy of a Chef to help us understand the difference between innovation and invention.

I believe the Chef analogy is one of the stronger ways to understand innovation. It demonstrates how something new can be created from things which already exist.

Who Inherits Your iTunes Library? by Quentin Fottrell

I found this article in MarketWatch and found it to bring up a question I had not yet thought through. Namely what happens with our digital assets after we die? This is an interesting question to wrestle with and it is one unique to the time period we find ourselves in. To some degree many of our digital assets are not locked to our person or an account service. But there are certain cases where they are locked to a service and may be even more tied to services in the future.

There is a great deal more to be explored and wrestled with related to digital assets but we will have to tackle that subject another time.

Why Apple Needs to Lose the Samsung Appeal by Vivek Wadhwa

I don’t agree with every point Vivek makes in this column. I for one am not worried about innovation in Apple or even Silicon Valley for that matter. Anyone living or working near Palo Alto and can feel the startup energy wouldn’t either. But the issue or fear of startups being sued out of business as well as issues with patent trolls are very real and of concern.

Vivek makes some interesting points and we must make sure that even in the midst of these patent battles that innovation stays safe.

How Many Kindle Fires Were Sold? By Horace Dediu

On the heels of a major product launch event this week, Amazon had some interesting press regarding the official sell out of the Kindle Fire. Obviously when you keep taking orders for a product but stop making it earlier in the year one would assume you would eventually clear inventory. That is exactly what happened with the Kindle Fire.

Horace makes some good points and I feel he is accurate about the 5 million Kindle Fire estimation. It sure would be nice if everyone was open with their shipment numbers as Apple.

Not All Consumers Are Created Equal

The series John Kirk has been tackling this week as inspired me to add some needed perspective to the platform debate.

Fanatics of products or brands, for example, consistently assume that what they love or feel is superior should be true of everyone. There is a psychological element to all of this where too often people believe that what is true or good for them is true or good for everyone. Yet nothing can be farther from the truth.

When you study the history of nearly every product in consumer markets you see quite a bit of diversity. This is because not all consumers are created equal. The needs, wants, and desires of individuals can differ slightly and also drastically.

There is not a one size fits all model in consumer markets.

The markets for mobile phones, tablets, traditional PCs, etc, is segmenting and opening the door for many possibilities. To see this point all one needs to do is look at the vast variety in design around Windows 8 hardware we are seeing and will see over the next year.

The key to success for all consumer product companies who want to operate within the dynamics of this market is to understand your customer and seek to develop products that meet the needs of that customer. In this scenario you must understand that what you are creating will not appeal to everyone and this is perfectly OK.

We should encourage diversity rather than hope that one product or platform rules the industry. If we did this market would be very boring.

To quote Buddy / Syndrome from the Disney / Pixar’s The Incredibles.

“and when everyone is super, no one will be.”

Let’s hope we are not headed for a technological landscape of the sea of sameness.

What if Samsung Was a Band?

I’ve been reading a lot of articles the last few days all on the degree in which Apple’s success in a US court over Samsung is good or bad for the industry. In the midst of all of what I am reading I feel a significant point is being missed. There is already an industry that forces and rewards originality. The music industry.

If we were to put our thinking caps on and objectively look at the situation I would think that IP law, specifically around this case, is similar to copyright law.

If we started a band today and recorded a song using some degree of lyrics, beats, rhythm, etc., from the current number one hit on the radio we would be sued out of existence. We could of course cover the song or use parts of the copyrighted content but we would have to pay the original author.

The music industry forces original work and in fact rewards originality. This is not to say that artists can not be influenced by another band, artist, song writer, etc., but they must create their own original work.

This forcing of originality in the creative arts is what makes it exciting. Not everyone succeeds but if it was all the same it would be extremely boring. It is the emphasis on originality that makes the music industry diverse and exciting.

I’m sure there are flaws in this analogy, as there are in nearly every analogy, but the point remains that Copyright law exists to promote originality. We should look at IP and Patent law the same way.

The Apple Verdict and the Challenge of Innovation

I spent some time on the weekend digesting the results and implications of the verdict between the Apple and Samsung patent trial. I watched my Twitter stream flow continuously with many remarking on the negatives of the verdict and many remarking on the positives. I am yet to see a convincing analysis one way or another as to whether the win for Apple is good or bad, which leaves me thinking that only time will reveal the answer.

So rather than dive too deep on whether the verdict is good or bad for the industry, I would rather make a different observation.

It is Easier to Follow Than Lead

The one thing that I think is interesting about Apple as a company is that under the vision of Steve Jobs in particular, their culture and their products have ALWAYS had a unique identity. Even if a particular concept or idea was “borrowed” it was done so in a way uniquely and freshly with a specific vision in mind.

Historically, in fact, Apple sacrificed success to stick with a unique approach to personal computing. Steve Jobs and Apple as a company had a vision for the best way to make computing products and that determination to not compromise that vision cost them success in key markets in the past. One example of many would be the decision to not license out the operating system at a key junction in the adoption cycle. The fear of losing the quality of hardware in which their software ran is a key reason why I believe this decision was made. None the less it was not popular and probably cost Apple market share in the early days of computing.

Although, that is not the case today where Apple is the market leader in several key categories; the above observation uncovers a key truth and it relates to the challenge of innovation.

Creating something new or unique is not terribly difficult. I’ve got great ideas for all kinds of unique products that no one wants but me. Creating something new, unique, different, and innovative that garners mass market success is EXTREMELY difficult and more interestingly EXTREMELY rare. The fundamental challenge and to a degree fear around innovation is that you create something the market does not want. This at its core is the reason why it is easier to follow the leader than blaze a new trail.

As a wise sage once said:

“Trying is the first step toward failure” – Homer Simpson

A little longer than five years after the iPhone and we already entirely take for granted things that were not common place in the market before the first iPhone. All touch screens and virtual keyboards, screens that know when we are looking at them or by our ear, a full home screen of glossy icons, app stores, etc. We can argue the degree of these in terms of innovation but the bottom line is Apple made many features the industry standard.

Of course many of the things which became the standard in terms of look and design were not patentable and were simply the result of a new standard emerging. But this case was more about setting a presidence more than it was about money. The message has been sent loud and clear that following the leader too closely is not a good idea. Some degree of trailblazing will be necessary in the future. Although, this is difficult and risky, I strongly believe that in the long run those who do invest and take risk and blaze their own trails will be rewarded.

There are some very cool FEATURES Samsung, HTC, Nokia and others have added to their smart devices that are distinct. That is without question; but the bottom line is a template for success has been established by Apple.

In this regard I must give Microsoft a tremendous amount of credit. Microsoft, rightly or wrongly, blazed a new trail and we are on the cusp of seeing whether or not the market accepts what they developed or not. Microsoft is blazing a new trail with their new UI and emphasis on touch for all hardware. We will see if this trail leads to success or failure. Regardless, Microsoft deserves credit for taking the risk, and giving their best effort to do something fresh.

Blazing new trails on the frontier of personal computing may take its toll on many companies. I stand by a conviction I have shared many times publicly. I fully expect the landscape for personal computing to look very different in the future. The personal computing companies of today, particularly those in hardware, may not be the personal computing companies of the future.

When I think about the things that led to Apple’s success in many key categories, as well as what may be the underlying theme for success for many in the future, I think about a quote that I am rather fond of–which is:

“The real act of discovery consists not in finding new lands but in seeing with new eyes.” – Marcel Proust

The key to the future will be to seek out new opportunities with fresh thinking and innovative ideas. To those that think innovation is dead I pose this question:

Have all the problems of the present and the future been solved? Until the answer is yes, there will always be room for innovation.

Observations and Opinions About Apple Retail

Credit: Apple
As Tim pointed out earlier in the week, Apple competitors have many things to be worried about. Strategically, however, Apple’s retail presence would be one of the biggest things keeping me up at night if I was competing with Apple.

Unlike most companies, Apple sells directly to the end customer who will be using their products. Apple has and owns a clear and distinct relationship with their customers. Many other companies sell to retailers, or the channel, and therefore have a more hands off relationship with their customers. In fact, for many non Apple customers, if a relationship exists it is with a retailer and it is weak at best.

Looking forward to the next decade, and perhaps longer, Apple’s retail strategy and presence will be one of the driving forces helping set them apart from the competition and engaging in an ongoing relationship with their loyal customers.

Steady, Healthy Growth

Earlier this week Apple inevitably became the most valuable company in history. I firmly believe that their retail strategy played a key role in making this happen. I also firmly believe that their retail strategy will continue to play a key role in continuing their value growth.

To get a better picture of what is happening with Apple retail I made a chart looking at retail store visitors per quarter going back to 2009. On top of the retail visits data, I layered on key milestones of product sales for specific quarters. I also added at the bottom how many stores were open at key points in the growth cycle.

As you look at the above slide, the following observations stand out. It is obvious that Apple is on a steady growth trend. Apple’s growing retail store presence globally, as well as their growing number of visitors per quarter, remains on a steady upward trend along with nearly every other part of their business.

Notice also that with each growth trend, a new baseline was established. With each growth cycle a new normal was established with the exception of the last holiday quarter. The same is true with key product sales like Macs, iPads, and iPhones. They may dip slightly but not below past year-over-year growth. My chart shows that this is true since 2009 and my guess it goes back even farther.

Therefore, there is no reason to assume Apple’s steady growth trend will not continue going forward. In fact, Apple’s growth is following closely the growth of key segments of the market. Year after year as the total addressable market for smartphones and tablets grows. As it does so do all areas of Apple’s business. Interestingly Apple’s Mac business is also growing even as the market for traditional PCs stays relatively flat. I believe Apple retail has something to do with that. Since key markets still have a massive amount of headroom (particularly in China) to grow we can be assured that Apple’s ability to capture share of that growth is more than likely.

The key in this scenario in my opinion is that consumers have a premium shopping experience with Apple retail. Apple’s latest quarterly retail revenue came in at $4.1 billion which is admirable in itself but Apple still does more sales from the channel than they do from their own retail presence. But these retail outlets exist for more than just driving sales.

The Best Place to Experience Apple Products

The nearly 400 Apple retail establishments exist to support at a fundamental level that I highlighted at the beginning of this column, which is to manage and actively engage an ongoing relationship with their customers. Part of that relationship is the freedom to discover. This is why Apple stores are constantly packed. Consumers are going in and looking at products and experiencing new ones. Apple has intentionally designed their stores to maximize and showcase the best experiences with all their products. This is something that is void in all other retail establishments where electronics are sold. These stores don’t just carry Apple products but also a highly selective and curated selection of third party products that help maximize the value of Apple’s ecosystem.

Other parts of the relationship that are key to Apple retail is training through free workshops and support through the Genius bar. I am continually shocked at how many people I see taking the free workshops and learning how best to use the new Apple products they bought. Every time I go into Apple retail stores their training centers are packed. Consumers we interviewed who took the time to get trained on their products overwhelmingly were glad they did it and felt empowered to use their products to their full potential. You are hard pressed to find anything remotely similar with other personal computing platforms.

Lastly, I firmly believe that Apple retail plays one last role holistically with consumers. They create loyalty. Apple has had no problem growing a large loyal base of customers but the trick is to attract new customers and keep them loyal. The data continues to show that Apple is continuing to bring upwards of 50% new customers to Apple products within key product segments. Keeping new customers loyal is key. Apple doesn’t struggle with a tremendous amount of churn and Apple’s retail will continue to play a role in that reality. There are many fundamentals on why Apple’s platform establishes loyalty but retail remains a key part of this strategy for many of the reasons I outlined above.

Apple retail, in my opinion, is one component of the many fundamentals to their strategic and competitive advantage. I continue to keep a watchful eye on all information and quarterly reports related to Apple’s retail because the health of their retail will tell us a lot about their overall health and growth opportunities as a company going forward.

And keep in mind, Apple has barely scratched the surface in China.

The One Feature I Still Want From My Smart Phone

I love smart devices and more to the point I love the potential for smart devices. At the core of my work as an analyst I try to the best of my ability to look at what smart devices do today but to also look at what they may become in the future. I like to look at technologies, products, solutions, etc., and analyze their future potential in light of their present value. It is with this mindset that I have been taking on an experiment I have not done in quite some time.

Since attending Google I/O I have been using as my primary smart phone the Google Nexus running the latest Android OS Jelly Bean. When I get new Android devices, and I get many, I can generally only stand using them as my main smart phone for about a week. My patience runs thin with Android due to the role my smart phone plays in my professional life. The focus of this column is not entirely on my Android experience as I intend to write one just on that subject. But I have been using the Google Nexus with Jelly Bean for almost two months now and it is the first time in a very long while that I have not felt the need to rush back to my iPhone. The last time that happened was with the very first Google Nexus.

I still have my gripes, but the fact I have been able to integrate Android into my life for this long is saying something in my opinion. However, there is one new feature Google has developed with Jelly Bean that has thoroughly piqued my interest.

Google Now and the Anticipation Engine

The feature that Google has developed that has not only piqued my interest but given me quite a bit of food for thought around the potential of smart devices in the future is Google Now. Google positions Google Now as a feature that gives you just the right information at just the right time. The emphasis of this feature is contextually relevant information but it runs much deeper than that.

At the core Google Now learns about key habits on top of attempting to present contextually relevant information. The goal being to present at a glance timely and contextually relevant information. We have written before about this concept of glance-able information and we believe its future is bright.

At a much higher level, Google Now has made me think about something I had trouble articulating before. Namely the one feature I have been wanting as a part of my smart devices overall potential. The feature I speak of is anticipation.

Amazingly somewhere in the core of Jelly Bean and Google Now lies the framework to begin building an anticipation engine. With Jelly Bean we are experiencing the ground level of this foundation and I have found some very interesting examples of its value and potential.

One example is how Google Now looks at my calendar and as long as a location is included in my appointment details, I can launch Google Now at any time and see real time traffic to my next meeting location. I can also simply click from the appointment Google Now card to get navigation to that appointment from my current location. More interestingly, Google Now will alert me via a notification when the is appropriate time to leave for my next appointment based on real time and timely traffic analysis. I found this to be extremely useful.

Another interesting example is related to search. Regardless of what browser I am using, if I am logged into my Google account, when I search for things on Google interesting things start to happen in Google Now. For example my wife and I were recently in the market for a new family car. She started searching for local car dealerships on my notebook using Google. A few minutes later I happened to pull up Google Now on my phone and the top Google Now cards presented to me were map cards including traffic information to all three local car dealerships she had just looked up. I had no idea she was searching for this information so when I asked her why I was seeing directions to Gilroy Toyota on my phone she replied “that’s weird I just looked up Gilroy Toyota on your computer.”

As I further experimented with this I found it quite interesting to search for things like restaurants or other locations either on my notebook using Google or the Nexus itself and know that I could easily jump from that search to Google Now and get exact directions or other information related to that location quickly and easily without having to enter in any more information. Once I started integrating this into my search flow it became habit to utilize the information at a glance Google Now presents and I again found it extremely useful.

As I stated, we are observing the beginning of this anticipation engine concept. There are many ways I would love to see this advance. For example, related to the traffic information, I would love it if my smart device knew not only where I was headed but who I was meeting with. This way if I happened to be hitting traffic on the way to a meeting my smart device could anticipate my time frame and if I happen to be running late present me with the option to email or text those I am meeting with and alert them that I may be running a few minutes late.

There are more examples than I have time to get into of how this anticipation engine has been changing how I think about the usefulness of smart devices going forward. But I am convinced that Google is onto something with this and I am excited to see where it goes.

The Opinion Cast: All Smart Devices are Simply Cloud Endpoints

A few weeks back I got into a light hearted Twitter debate with friend and colleague Roger Kay over tablets as PCs and the general number counting strategy of many firms. So he and I agreed to continue the conversation but do it through a podcast, or opinion cast as we like to call it.

So have a listen as we cover a range of topics from how to view tablets and their role in the computing ecosystem as well as a range of other thoughts on some standard industry practices.

You can also subscribe to our opinion cast in iTunes here.

How Twitter is Evolving

Credit @Jack
As an analyst I am not entirely focused on social media as a primary area of my market focus. But because I study consumer markets holistically it is something I observe with a watchful eye. I was fortunate enough to be able to have candid conversations with many of Twitters earliest investors which has helped me shape my opinion on the platform thus far. And from my view, it has been fascinating to watch Twitter evolve and get to the point today where it is basically embedded into society.

Narcissistic Roots
I have always rejected the notion that the roots of Twitter appealed to people’s inherent narcissism. In fact, I was on a panel many years ago with author Andrew Keen and we heavily debated this topic. Many of Andrew’s books like The Cult of the Amateur are very strict critiques of the negative effects of things like blogging, the internet, and other key technologies on societies. Andrew makes many good points that are food for thought but I largely disagree with the premise that Twitter at its roots is only for those who love the spotlight.

When Twitter was first starting out I was adamant in my analysis of the service that it presented a valuable platform for those who are in the public eye. Folks like celebrities, athletes, political leaders, the media, etc., and that I questioned what an everyday mass market consumer would get from “tweeting.” My thought initially was that the value to the mass market the value would be in consuming tweets rather than actually “tweeting.”

I point out the value of consuming tweets in my column Why I love Twitter. My main point being one of the many ways I use Twitter is as a information filter of many of the key industry sources I follow for work. Twitter’s value as a real-time filter for real-time information is a key value proposition.

Although, now that we have seen Twitter begin its ascent into the mass market, it is becoming clear that Twitter is evolving into a conversation in a fascinating way.

Next Generation Communication
I am convinced that Twitter is no longer a platform to broadcast and has evolved into a platform to communicate. Of course broadcasting can be communicating but it is generally one way. Twitter has now become a two way dialogue with those broadcasting and others interacting.

It is interesting to see how the aforementioned public figures I spoke of are using and embracing Twitter to interact with the masses. Many folks we speak with who joined Twitter simply to follow celebrities, athletes, or media personalities, found that the bulk of their Tweeting was less about saying what is on their mind and more about interacting with those they follow. Perhaps even more interestingly the large majority of those we spoke with received a tweet back or re-tweet of a public figure they follow.

I am somewhat embarrassed to admit that I follow Justin Bieber on Twitter. I do it because I am intrigued with how he uses Twitter (a story you can choose to believe or not.) But I am genuinely surprised at how active @JustinBieber is on Twitter and how often he interacts with his fans. Not only is he encouraging his brand loyalty amongst his fans but he has a instant communication channel with them for anything he chooses–personal or professional.

This is one example of many that shows how Twitter has evolved from broadcasting platform to a true two way communication platform. I believe Twitter will may play a key role in further changing communications as we know it.

Even simply looking at how many broadcast outfits are using Twitter around the Olympics demonstrates my point. Many networks covering the Olympics are not only encouraging Twitter interaction but also tracking and sharing key statistics around how its being used. Many athletes as well are using Twitter (some not too intelligently) to engage with their fan base.

Twitter truly had humble beginnings. And Gripe as some may about how it has evolved, it has added to the evolving use of technology in the ways we has humans communicate and interact. And I believe we are still only scratching the surface of its possibilities.

The PC is Not Dead

I chose this title because so many still associate the term PC with a notebook or desktop computing form factor. Let me first start by re-affirming my conviction that tablets as well as smartphones are in fact personal computers. The reality is that consumers are using a multitude of devices to accomplish what we have always considered computing.

It is no secret that I am bullish on tablets growth potential. With all the data I am seeing around consumer adoption of tablets world wide, it is hard not to be. But my perspective on the tablet form factor has always been that the tablet, and even to some degree the smartphone, does not replace a computer with a larger screen like a desktop or notebook. Rather these other devices simply take time and even some tasks away from the classic PC.

I still believe consumers will own computing devices with larger screens, more processing power, more storage, etc. However, the big struggle many in the industry are facing is the reality that the classic PC is no longer the only device in consumers lives. When the category for notebooks was a huge growth segment, it was being driven by two things. First, the fact that the category was maturing and prices were coming down. Second, because notebooks were the only mobile personal computers in consumers lives. All of this has been turned on its head with tablets and with smartphones to a degree.

The perspective that needs to be emphasized on this topic is that although the classic PC is not going away, its role is changing.

There is No Longer a Dominant Screen

The classic PC for many years was what we liked to call the “hub of the digital lifestyle.” It was the primary screen used for computing tasks in consumers lives. Other devices like iPods and early smartphones for example, had a level of dependence on the notebook or desktop. Even when the iPad first came out this philosophy was employed and was dependent on the PC to an extent. The desktop or notebook was the center and other devices revolved around them in this role. This is no longer the case for many and will soon no longer be the case for the masses. As more consumers fragment their computing tasks to be done on a number of screens, each screen will find a role as a part of a holistic computing solution.

The Cloud Becomes the Center

Although no single screen becomes the center of a consumers computing lifestyle, another solution takes the place. And that is the cloud. Personal clouds will be the glue that tie all our devices together. This is clearly evident with Apple’s latest OS release OS X Mountain Lion. This is the first classic PC OS which embraces the paradigm I just described, where no single computing device is the dominant screen. Many of the same apps, the same data, the same media, all available on every Apple screen.

Whatever screen is the most convenient for a consumer to use to look at an email, answer an email, browse the web, watch a movie, listen to music, check Facebook etc., at the exact time they want to do it, is the right screen for the job. The important word here to understand is convenience. Our research shows that people grab the screen that is closest or easiest to access to do a task the second they want to do it.

If I am in line at Disneyland and I want to do the above tasks, then my smartphones becomes the right screen for the job. If I am on the couch with my tablet near me, then it becomes the right screen for the job. If I am sitting at my desk with my notebook or desktop then it becomes the right screen for the job.

The beautiful thing about OS X Mountain Lion is that it enables and even encourages this computing philosophy I just described. Which is:

– let the consumer choose the right screen for the job
– make sure they have access to any and all programs, documents, and media
– anytime, anywhere, on any Apple device
– so that no matter which of their Apple screens they have or choose to use, IT becomes the right screen for the job.

This is the beauty of the cloud and the clouds role as the center of our personal computing infrastructure.

The classic PC used to be the center to which other screens depended on. But now that role as shifted to the cloud. This reality, not just tablets, is what is disrupting the classic PC.

The market is embracing this concept of screens (whether they know it or not) and will soon be conditioned to depend on the cloud rather than any one screen. It is for this reason, that in Apple’s case, iCloud is just as important of a platform as iOS and OS X. Other platform and hardware providers need to confront this reality and find their place in it.

The Classic PC Still Plays a Role

This is why I am emphasizing that the classic PC still plays a role. It does not go away but its role does change and, perhaps more importantly for hardware companies, the classic PC lifecycle has changed. Some hardware manufacturers may emphasize its role more than others. Some software platforms may embrace its role more than others.

Consumers will not abandon the classic PC. Because of this role change in classic PC usages, I believe some classic PC manufacturers will be confronted with some very challenging pricing economics in the very near future. (More on this in a later column)

My conclusion, however, is that anyone who does not have a clear focus on the cloud as the center and has a weak strategy for the rapidly changing role of hardware is headed for some very rough waters.

The Opinion Cast: The Future of Smart Watches

In this opinion cast, Bill Geiser the CEO of MetaWatch and I have a candid conversation about the future of smart watches. Bill is a smart guy and has quite a history in the connected watch business and he shares some great perspectives about the space.

In this discussion we talk about why the wrist is prime for a connected screen, the role of the smart watch, and what it may take to get smart watches onto the wrists of mainstream consumers.

MetaWatch launched a new project on KickStarter today. So be sure to check out the MetaWatch STRATA smart watch launch on KickStarter which went live today.

You can also subscribe to our opinion cast in iTunes here.

The Opinion Cast: The Significance of Mountain Lion

I thought it would be fun to capture Tim and my conversation at the office today around Mountain Lion and our thoughts on what it means for Apple, computing, and even some comparison’s with Apple’s philosophy and that of Windows 8. Often he and I have these chats to get caught up and synchronize our thoughts and I thought I would share this one with our readers.

I hope you enjoy and any and all feedback and / or dialogue is of course welcome.

You can also subscribe to our opinion cast in iTunes here.

OS X Mountain Lion: My Favorite New Features

Tim wrote earlier this week about his conviction that when it comes to post PC platforms Apple will keep OS X and iOS separate rather than merge the two as many expect. What Apple has done with OS X Mountain Lion proves that a desktop class OS can live in harmony with a pure mobile OS and provide a seamless experience across them all.

After using OS X Mountain Lion for a little while now, I have to say that the full experience of seamless integration between all my Macs and iOS devices is quite profound. The funny thing is upon hearing of OS X Mountain Lion’s new features I fully expected it would be, however, it was even more pleasant when I finally got to integrate it into my personal computing ecosystem.

Apple took advantage of their iCloud infrastructure, and tightly integrated it into this new OS release. Apple has continually emphasized a works better together philosophy with their products and iCloud has been a key puzzle piece in this philosophy. Apple executives have referred to iCloud as a strategy for the next decade, but it is most likely the strategy for much longer. iCloud is the glue that ties all of your Apple products together and never is that more clear than with OS X Mountain Lion.

In this analysts opinion, OS X Mountain Lion brings Apple customers one step closer to a seamless and more importantly continuous personal computing experience. Apple has been heading in this direction for a while with things like Photo Stream, iBooks, and others that let you instantly keep experiences in sync. But OS X Mountain Lion takes us even further with things like documents in the cloud, iCloud Tabs, Game Center, and more.

Continuous computing will be a key driver for Apple’s ecosystem going forward. As consumers realize that not only does all you key data, documents, personal settings and more stay synced in real time across all your Apple products but that you can switch from one device to another and feel like you can always pick up where you left off.

Let me know share my experience with a few features that I found particularly useful.

Safari and iCloud Tabs

The updated Safari for OS X Mountain Lion is easily one of my favorites. Primarily because I use Safari as a large part of my daily computing time. The new sharing feature is particularly handy and I used this quite a bit more than I thought. I like to share quite a bit of what I find on the Internet to Facebook and Twitter and being able to share right from Safari without having to jump to a different application or website was extremely useful.

But the biggest new feature that I truly appreciate is iCloud Tabs. I have a Mac and an iPad and I use them both in different ways. Within my personal work style I use them both in conjunction together as a solution rather than as separate products. Because of that I can’t tell you how many times a day I come across a website on the Mac and then want to read that website on my iPad or vice versa. A common use case where this happens is when I am using my Mac and looking up recipes. Once I find the recipe I want I used to have to email it to myself so I can then pick it up on my iPad, which is the tool I use in the kitchen quite often. Now with iCloud Tabs any open tabs in Safari, whether that is on the iPad, iPhone, or Mac is accessible to me. It seems small, but for me it is extremely useful and appreciated.

Notifications

To be honest I have wanted notifications on my Mac for quite a while longer than I wanted notifications for iOS. What is really nice is that you can customize which applications notify you and which ones don’t. For me the most important notifications are email and this one feature has served me greatly.

In my day to day I get well over 100 emails and somedays twice that much. I could literally sit all day and just answer email and it would keep me busy. Obviously because of that I have to prioritize. Pre Notifications in iOS, when I heard an email come in I would click on mail and see who its from then determine if I needed to respond immediately or later. This routine can be quite disrupting to ones work flow. Enter Notifications for email and now as I am working I quickly see who an email is from and without ever having to change applications and quickly read said e-mail, I can choose to respond or keep doing what I was doing.

Since I also text message with work colleagues, friends, and family, quite often having iMessage notify me of a new message was equally pleasant. This kept me from having to disrupt my work flow to check iMessage or my iPhone to see who it was from. Notifications is just one more way that Apple is extending features we know and love on iOS and bringing them to the desktop in a relevant way.

Air Play Mirroring

Air Play support on iOS and even in iTunes on the Mac has been one of those features that I use way more than I expected to. So it was no surprise to me that when Apple brought it to the OS X Mountain Lion that it was on the features I found most valuable. This is key for reasons in my professional life and my personal life.

In my professional life I give a lot of presentations and work collaboratively with teams of executives and product groups. More often than not in these meetings most of the content we are working off resides on my Mac. With Air Play Mirroring we don’t need to huddle around my computer or fiddle with chords and cables and projector issues with inputs or resolution scaling. Now we can simply broadcast the whole of OS X and all the content on it to the large screen or projector. Because of this one features I expect many more Apple TVs in conference rooms.

In my personal life, this is the feature I have been waiting for. Primarily because I watch a lot of video on my Mac. This happens to be because currently many sites I frequent still use Adobe’s flash player– especially the network TV sites. I stream a lot of TV shows from network sites or the web directly and many of them are still on Flash. Unfortunately many of these sites still hold prime TV content from their apps or Hulu + so it is hard to get access to all their content from the apps they release on iOS. Often times I would literally connect my Mac to my TV just so I could watch some shows on my TV. That is why this was one area where Air Play mirroring in OS X Mountain Lion came in for me big time.

I can honestly say that thanks to Apple TV and Air Play Mirroring my living room will never be the same.

Lastly I want to touch briefly on Game Center. This is a feature that I believe may be incredibly disruptive. Now that Game Center games and experiences are unified across all of Apple’s products, the Apple ecosystem has become a fully cross platform gaming environment. I was able to play games with my kids from my Mac while they were on their iPod touches or other iOS devices. Apple is a sleeper in the gaming category and I believe they will soon be a major player from a gaming platform standpoint. And add what I pointed out about Air Play and all of a sudden Apple has a game platform for the big screen as well.

The overall key takeaway for me is what I said a while back in a column about Apple’s promise to their customers. Which is that when you invest in the Apple ecosystem, Apple promises to keep making your experiences better.

And they did just that with their latest release of OS X Mountain Lion.

Why I am Convinced Tablets are the Future

During the course of many conversations I have been having lately with industry insiders there is still a drastic underestimation of the importance of tablets. There are some I talk to who get it but I still feel that largely the sentiment around tablets and the iPad in particular is that it is a toy and not a personal computer. So in this column I am hoping to articulate my view on this subject.

More Consumption and Light Production Than Heavy Lifting

I know thinking objectively from other peoples vantage points is a challenge for many people. I am close friends with many of these people. However considering many different views and specifically trying to get inside peoples heads and see things from their perspective is something I greatly enjoy. That probably explains why I love anthropology and ethnographic research. The key point is that just because one consumer can not replace their laptop with a tablet does not mean that another consumer can not. Consumer preferences and usage models are not universal.

My conviction, which stems from my observational research with consumers, which we conducted at Creative Strategies, is that a large amount of consumers do not do complex things with their computers. I recall some research we did four years ago trying to gauge the importance and perceived demand of increased CPU performance by mass market consumers. In this research consumers shared with us how they use their PCs. What we observed was that the majority of consumers we interviewed used less than five primary applications on a daily basis and none of those applications were CPU intensive.

To further highlight this observation I want to share a chart containing some research from Alpha Wise and Morgan Stanley. In a large survey with mainstream consumers, their research findings came back very similar to our observational research. Specifically that roughly 75% of the time consumers were not using their PCs to do things we would consider “heavy lifting.” Although I am not sure that term applies to the mass market consumer.

Now the question I have after looking at that chart is: Which of the above tasks can not be done on an iPad? The answer is none.

Now if you are like me and you have large numbers of friends, family, social acquaintances, people who come up to me when they see me using my iPad with a keyboard at Starbucks, etc., then you probably give advice on what types of technology to buy. So when I ask them what they use their computers for, the answer almost always comes back the same. Not much they say, I mainly browse the internet, check email, watch videos, and occasionally need to make a spreadsheet or use a word processor.

Interestingly the overwhelming majority of conversations I have had around this topic, the person asking me the question is already leaning toward an iPad because they recognize it can do most of what they need it to the large majority of the time. So the question generally centers around whether or not they need a new notebook or whether they should just get an iPad and keep using their old notebook.

The long and short of it is that unless the person asking the question is a power user, creative professional, etc., it is very hard to not recommend them getting an iPad and just keep using the notebook they have for the less than 15% of the time they may possibly need it. You can probably guess what my advice generally is and I know many happy consumers who have taken this path.

Things We Hold We Love

Now I want to make one last point. The fascinating thing about tablets besides the points I made above, is that we don’t just touch them when we use them, we hold them. I am convinced there is something psychological about this that makes the tablet more personal than a notebook. With a notebook we touch (the keyboard and mouse / trackpad) but we don’t hold it while using it. The notebook form factor is not conducive to this usage model because it must be sitting on a flat surface, like a desk, table, or lap to be used.

We also hold tablets much closer to our person while we use them the majority of the time. Whereas with notebooks, we keep them at arms length. This fundamental difference in closeness is another reason I believe there is a deeper psychological attachment and lure to tablets than with notebooks.

If I was to rank emotional attachment to devices of a personal nature I would say the smartphone comes first, then the tablet, then the notebook. Smartphones and tablets we touch to use and hold to use, while the notebook we just touch, and I use the word touch loosely with the notebook form factor because it is not a touch computer like the smartphone and tablet–and I am not convinced it ever will be.

The fundamental truth is that there is a distinctly different relationship consumers are beginning to form with tablets that they never developed with notebooks. We continually hear in consumer interviews how much people love their iPads and can not live without it. Had this attachment developed with notebooks they wouldn’t have delegated them to the back room. And think about the millions (and growing) of kids who are developing this relationship with tablets in their formative years. I am confident my kids will have no use for a notebook in the future. Desktop maybe, or perhaps central home server, but notebook– not so much.

Following my logic, it should not be tough to see why we are so bullish on tablets. There are the above reasons, along with many more than I have time to get into (but will in our upcoming tablet report, shameless plug), which are all transforming and reshaping this industry before our eyes. The challenge is not everyone sees it.

The Opinion Cast: Is there a 7-Inch Tablet Market?

In this episode of our opinion cast Steve Wildstrom, John Kirk and myself discuss the potential for a 7″ tablet market.

We explore Amazon’s strategy, Apple’s potential entry with an iPad mini, and Google’s Nexus 7″. Business model issues were a key part of the conversation as well as whether or not Apple needs to make a 7″ tablet.

You can also subscribe to our opinion cast in iTunes here.

PC Growth isn’t Flat, Windows Is

We are living in fascinating times as the personal computing industry is undergoing its biggest transformation since its inception. Tablet computing is leading the charge and forcing nearly everyone in the industry to relearn what they knew about personal computing and its future.

There is no doubt that personal computing is evolving and transforming. With my role as an industry analyst, I believe it is important to present information to the industry which reflects what is accurately happening in the market at any given time. It is for this reason that I believe that not including tablets in industry wide PC sales numbers and forecasts is disingenuous and does not accurately reflect market conditions.

Recent quarter estimates from IDC and Gartner made headlines as they point out that PC growth is remaining relatively flat. There are more theories surrounding this point than I have time to get into but the bottom line is that there is simply no growth happening right now with desktops and clamshell notebooks.

So what is happening in the market and what can we learn about the current conditions within consumer markets? A series of interesting data points lead to an important observation. That observation is that PCs aren’t flat or in decline, demand for the Windows platform is.

Horace Dediu at Asymco created a fascinating chart and series of data points where he broke down the Windows platform advantage and how it is eroding. In the following chart he created he points out how in 2004 the Windows platform peaked in its multiple of Windows products shipped per single Mac shipped. After 2004 multiples began to decrease and starting in 2007 with the release of the iPhone, there is a steady and rapid decline of the Windows platform advantage.

This chart can be summed up with the following significant point Horace makes in his article:

“If we consider all the devices Apple sells, the whittling becomes even more significant and the multiple drops to below 2. Seen this way, Post-PC devices wiped out of leverage faster than it was originally built. They not only reversed the advantage but cancelled it altogether.”

Now turning to the flat notebook and desktop growth trend. My conviction is that tablet computers (defined as tablets with screen sizes larger than 9.7 inches) is an evolution of the computing form factor but still a personal computer. This is why I agree with Canalys who includes tablets as PCs in their market data.

I shared my opinion about tablets and the new era of personal computing in this column.

If we were to include tablets into the data for personal computers we would see that the market is not in decline but actually a steep incline. In fact if we were to include tablets into personal computer shipment forecasts for 2012 we would see over 100% year over year growth.

By choosing to not include tablets we will be lucky if we see 20% growth in this calendar year. But as I stated at the beginning of this column, to not include tablets in PC shipments would not be an accurate reflection of what is happening in the market.

We can debate semantics all day as to whether or not tablets should be considered PCs. All the while our interviews with consumers are consistently proving that they are using their iPads as computers to do many, and in some cases all, of the regular tasks they used to do with their notebooks. Given the ways we see consumers using iPads there is simply no denying that the iPad is a personal computer. Some people will have their personal computing needs met by a tablet, others by notebooks, and others by desktops, or even perhaps some combination of the three.

The iPad, and tablets in general, simply represent an evolution of the form and function of a personal computer. Therefore we should count them as PCs but breakout their specific shipment growth amidst other computing form factors like we do already with desktops and notebooks.

Now obviously if we did this we would show that most if not all of the PC growth belongs to Apple. But as I said at the beginning I am interested in accurately presenting what is happening in the industry and most of the growth does in fact belong to Apple.

So now the question remains as to whether or not Windows 8 will be the great equalizer and inject growth into PCs, both clamshell and tablet, for non Apple vendors. That is a question I will let linger until a later time.

However, this fact remains and needs to be continually emphasized. If we step back and look at what is happening holistically in the personal computer market, it is clear that we are not in a phase of flat or declining growth, rather we are at the beginning of a rapid and exciting growth phase.

The Tech.pinions Opinion Cast: An Evolving Idea

An analyst colleague of mine and I were joking recently at a major tech trade show. We thought it would be funny if we put up a table in the hallway with a sign that said Ask the Analyst and charged a fee per 5 min for our advice.

Of course this would never work but we thought it was an entertaining idea to kick around. I personally don’t listen to many Podcasts, to be honest. If I want insight or perspective I call the people I trust, they are usually analysts or executives, and we have a conversation. Yet I have been getting many emails from readers asking if we would do a podcast. So we decided to try our hand again but we decided to call it an Opinion Cast and focus more on sharing our wide ranging opinions on matters related to tech. So tomorrow in the afternoon we will have our Podcast rebranded as our Opinion Cast to stream or download.

But I wanted reach out to readers prior and see if there were any specific topics they would like to see us address on this Opinion Cast. We already have a few topics in mind but if anyone would like to submit specific topics for us to tackle we will be glad to consider them for this or future Opinion Casts.

In the future I would like to try streaming one live and letting readers chime in with questions or comments. I’m just thinking out loud here as we try to figure out how to do something valuable with the Opinion Cast.

Any thoughts, ideas, or topic suggestions are appreciated. Feel free to make them in the comments below.