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

Why Microsoft Should Make an XBOX Mobile Gaming Console

Yesterday I shared a column on why casual gaming, or even more immersive gaming on smart phones is not going to threaten dedicated mobile gaming consoles any time soon. To come to this conclusion I had been using the Sony PS Vita for a few weeks. Using that device also led me to the conclusion that Microsoft needs a device like the PS Vita for their gaming ecosystem. There are a number of good reasons for this.

Strategy for Windows and Windows Phone
Microsoft includes on their Windows Phone platform an XBOX Live hub. This is simply an application that lets you interact with your XBOX Live friends and view your own profile information and achievments. Given the success of the XBOX 360 it makes sense for Microsoft to branch the service out to mobile devices. They even have an iOS app for XBOX Live as well.

What would be interesting for Microsoft strategically would be if they built this device and had some of the main dashboard UI be much closer to the Metro UI they are orienting around. The new XBOX Live dashboard is getting closer but is not the fully Metro UI yet.

I would expect a device like this from Microsft to be quite successful given the passion of the XBOX 360 audience and the number of live users gaming online. If that were true then a large number of consumers who purchased the XBOX mobile device would get immersed in the Metro UI and become familiar with it. Thus making them partial, perhaps, to Windows 8 and Windows Phone products in the future. One could make a strong case a dedicated XBOX Live mobile gaming console could be more successful than Windows Phone in the short term.

Gaming as a Service
Another key element of strategic interest in this thinking is the role of the XBOX Live service as a part of such a device. I can imagine that if Microsoft demonstrated with such a device how groups could play Modern Warfare with their friends online from both the XBOX 360 and the mobile console, that it would generate quite a bit of excitement. The PS Vita and new software that will be rolling out will support this feature as well. However, XBOX Live is such a good gaming service for hard core gamers that a mobile device tied to XBOX Live gaming could be a big hit.

This would further the revenue model for XBOX and perhaps even generate more XBOX Live Gold customres. Gold is the package where you pay $50 a year for special online features. Perhaps using XBOX Live on the mobile platform could even cost slightly more as a package. Either way it makes for an interesting extension of a core servce Microsoft is invested in.

Game Software Developers
Lastly a move like this would attract game developers for the Windows Platform much more rapidly than I believe is currently happening. Games are a rapidly growing category on mobile devices and even casual games on notebook and desktop PCs are gaining steam.

Microsoft could include in many of the same development toolkits the ability to easily also make games for the mobile XBOX console on top of their other Windows products. The byproduct would be more key apps, and in this case games, for the Windows ecosystem. Something they desparately need.

Microsoft could make it easy to buy these games for the mobile device through their own digital store, similar on Windows phone and Windows 8, which in turn would bring more consumers to their stores doorstep.

There is actually quite a bit strategically I like about this idea for Microsoft. I know the push back on this concept is around how big the market would be for a device like this. Especially since a piece of hardware like this has a longer product cycle life of more than 2 years conservatively. But I will again default to this market being similar to the console market at large. A market where the value has never been in hardware but is always in software and services. Although the hardware may have a long life the annual revenue opportunities come from soft are and services.

The thought of being able to play a game like Modern Warfare, Battlefield, or Gears of War from a mobile console while I travel and my friends are playing as well from their consoles is just exciting.

The key in all of this thinking is the hardware touch points that Microsoft can use to get consumers into their ecosystem. XBOX has been one of those key peices of hardware. So naturally with the world going mobile and Microsoft wanting a peice of that pie, my opinion is that a dedicted XBOX mobile gaming console is a good business strategy for Microsoft. It is also a product I think they would sell very well.

Why Smart Phones Won’t Take Down The PS Vita

The question that was raised at the initial announcement of the PS Vita was whether or not a dedicated mobile gaming unit could survive in a world where casual mobile games on smart phones exist. The answer is of course it can and there are several key reasons why.

To set the foundation I will again remind our readers of the jobs to be done philosophy as laid out by Clayton Christensen. Consumers hire products for specific jobs or tasks. Consumers acquire products to fill a void or fulfill a need. Smart phones are not hired to be gaming devices. They are hired to be communication devices. Browsing the web, playing games, running other non-communication apps are, all icing on the cake but the core reason this product is purchased or hired is to communicate. Dedicated mobile gaming devices like the PS Vita on the other hand are hired to be gaming platforms. And because of this the Vita is built intentionally for gamers, where smart phones are not. Two specific areas where this stands out are with the physical gaming buttons and battery life.

Physical Gaming Buttons
Because the smart phone lacks physical gaming buttons, my view is that it is a casual gaming platform. Meaning not something you will sit and play games for hours upon hours. I am not saying this is not possible only that for those who taking gaming seriously and consider themselves core gamers, the smart phone is not the device of choice. Rather, gamers sit for hours and play PS3, XBOX 360, etc, and they are used to the nuances of physical control buttons and believe for many immersive games they are necessary.

I have tried to play many of my favorite console games on my iPhone or iPad like EA’s Madden Football, or FPS games like Modern Warfare and they simply are not the same.

The PS Vita provides the most comprehensive console experience on a mobile device that I have encountered yet. It brings a full fledged gaming experience that hard core gamers know and love. Sony has also some great features that tie the PS Vita into their Playstation ecosystem. Things like online multiplayer gaming where you can play online with friends who are playing on the PS3 while you play on the PS Vita and vice-versa. Or transfering saved games or pausing points while playing PS3 and picking up where you left off with the Vita. Those are the kinds of holistic gaming experiences that get me excited about the state of the video game industry again.

Battery Life
The next big stand out is battery life. Even if we were to make the argument that the smart phone could become a central gaming platform for hardcore gamers the device would still have a battery life issue. The simple truth is you can not sit and play a game on your smart phone for hours upon hours and expect the device to last all day. Considering consumers hire smart phones to be communcation devices, I doubt that the trade off to play games and not be able to communicate becase of a dead device by the afternoon would be worth it. Again it comes back to the role or the job the product is built, designed, then hired to accomplish.

The PS Vita has good battery life considering the large OLED screen and great graphics. In my relatively conservative hour and half to two hour a day gaming sessions with the Vita I could go easily go several days without charging. In fact the bulk of my use with the device came during my recent trip to Barcelona for Mobile World Congress. I had many long plane rides and the Vita never died on me. In fact I only needed to charge it twice the entire trip of 6 days.

This is why there is a role for specific products built for a specific purpose. These devices may not appeal to everyone but they appeal to those who know they need it. I view this similar as a truck. Not everyone needs one but those who do could not work / live without it.

The bottom line is that there are a large group of consumers out there who have no desire to play video games for long lengths of time. Therefore a device like a smart phone will easily cater to those non-core gamers who want play games casually and to kill time. However, for those who are hard core gamers, and they know it, a smart phone will not suffice, and they know it.

You could however make an interesting case that the iPad or an Android tablet paired with a game controller could meet the needs of the core gamer. I could go for that argument but for the time the full ecosystem is not quite there. For example, from a gaming perspective, I am fully vested in both Sony’s and Microsoft’s online gaming systems. I have a core group of friends, games, achievements, etc, all tied to those platforms. The iPad with Game Center is getting there but still lacks the depth of something like XBOX live in my opinion when it comes to catering to the needs of hard care gamers. This shift could happen at some point in time but as for right now I am still convinced that dedicated mobile gaming platforms have a place in the market. Considering Sony announced they have sold well over 1.2 million Vita’s since the launch I’d say consumers agree as well.

Next Column: Why Microsoft Should Make an XBOX Mobile Game Console

MWC 2012: Clear Android Differentiation and Other Trends

I suspect that each MWC will be better than the last. This show, I believe, is quickly becoming the leading industry conference for mobile smart device technologies. Therefore, Mobile World Congress will be one of the shows were we can expect to dig into the trends of our mobile computing tomorrow. On that point, this year a few things stand out.

Android Differentiation
Bloggers, journalists, some pundits, etc, mostly seem to believe the world would be a better place if Google’s OEM partners simply did not change Android and just shipped a stock OS the likes of the Nexus line of devices. Unfortunately in that reality hardware companies go out of business. Therefore differentiation is key if pure hardware players hope to stay in business.

Related Column: Dear Industry Dare to Differentiate

After seeing many of the Android device announcements from the leaders like Samsung and HTC, it is clear they are fully marching down the path of strategically differentiating from the pack. This I believe is a good thing all together.

Samsung for example is taking a stab with their Galaxy Note line of products at differentiating their device experience by pairing it with a companion pen experience. HTC did something similar with the Flyer but has seemed to have abandoned that path for now. For Samsung however, including the pen as an accessory (which is where it belongs) has opened the door to bundling exclusive and proprietary software in order to enhance the pen experience. Samsung is shipping with the Galaxy Note Phone (I refuse to support the Phablet term), and the Galaxy Note 10.1 tablet, Adobe’s touch suite of products like Photoshop and Ideas. Samsung is also including their own S Note application for note taking and other useful pen experiences. Samsung is wisely using this strategy as a key differentiator and if you watch any screen media you will see their marketing is fully committed to this direction.

HTC has also been going down this path and has now furthered their strategy even more with the new Sense 4.0 UI.

Beyond Samsung, pen accessories at large seem to be a trend around Android tablets. LG announced their Optimus VU with a pen accessory and I expect pen accessories to continue to be used as a differentiator for the time being.

It is clear at this point there will be no stock Android prioritized devices by the OEMs, thus I question the market at all for Nexus devices. Throw on top of that the fact that the stock Android devices running the latest release take over a year to roll out in any large fashion. John Gruber makes a great observation:

Best to think of today’s Ice Cream Sandwich as a developer preview of next year’s mass market Android phones.

Focus on Device Family Brands
The other trend I am noticing, which is also a positive sign, is that HTC and Samsung for example are focusing more on family lines of devices. Peter Chou of HTC during their press conference announced that HTC intends to streamline their roadmap and focus HTC innovations. HTC kicked this off by releasing a new family line of devices called the One “series.” Their flagship product is the HTC One X which sports the latest Tegra 3 chipset from NVIDIA.

Samsung also is heading this direction with the Galaxy S series, Tab family and now with the Galaxy Note. Motorola also hopefully continues this direction with the Razr family. And Nokia as well with their Lumia line of devices. This direction is needed within the industry in order to stop the absurd device naming syndrome that has plagued many OEMs. When you have dozens of devices in channel all with different names and marketing material blitzing consumers with dozens of device names etc, the landscape can look incredibly confusing.

By focusing on a family line of devices, OEMs can differentiation and then position those differentiating features within a family line of devices for their appropriate target audience.

All in all, I am seeing some positive trends coming out of MWC 2012 that encourages me about the state of healthy competition within the mobile smart devices landscape.

You Can Never Have Enough Tablets

One of the things my firm focuses on is spotting trends within the technology industry. As a part of our constant search for trends we employ a concept we call “live the future now.” What this means, is that we as trend analysts, ourselves being early adopters, attempt to look for and implement things into our own work, play, family, life, etc, that we believe consumers may use technology for in the future. We also hunt out and study other people or groups of people, mostly early adopters, who are also using technology today the way we believe the masses will in the future.

So this column is going to be more about the future than the present.
Because I live and breathe this industry I also acquire quite a lot of technological gadgets as a part of this process. For the past six month’s I have been utilizing in different capacities no less than five and upwards of eight tablets at any given time all throughout my house. Not all my tablets are running the same core OS as some are iPads, some run Android and one runs Web OS. This helps me evaluate the strengths and weaknesses of a range of tablet operating systems and device features. Regardless of the OS I basically keep a tablet in every room of my house, except the bathroom, at all times. In basically every room where we spend significant time you will find a tablet of some shape or form. Living with a tablet in every room of my house is a fascinating experience. It is also a very convenient experience.

In the future I believe having access to these “smart connected screens” in every room will be a staple of most consumers’ homes in the developed world. What this enables is a situation where consumers don’t need to carry their tablets with them from room to room. They simply move to each room and as necessary, at their convenience, pick up the closest tablet and begin using it.

In my own experience doing this, I found that quite often I simply wanted to look something up on the Internet. What I looked for was the most convenient screen to access the Internet with. My notebook is rarely near me on the couch or bed and my smart phone suffices but the screen is a little to small for the job most times. This is where tablets come in. They are more mobile than notebooks and sport bigger screens than smart phones. And when you have one in every room you don’t have to think about bringing your tablet with you or where you left it last. Having a tablet in every room ready to be picked up and utilized was not only extremely convenient it was also extremely useful.

Now in this reality we must recognize that we may potentially shift from tablets being mainly personal computing devices to perhaps more communal computing devices–at least in the home environment.

Shift from Personal to Communal Screens
With the role of the personal cloud, I can see a situation where you just pick up the most convenient tablet/screen to your proximity, in whatever room you happen to be, log in to your personal cloud, and instantly the tablet becomes “your tablet.” It would contain all your personal settings, preferences, access to media, etc.

In this environment what is personal is your cloud not the device itself. This is a different take on the concept of personal computing. This of course does not mean that we consumers will not own personal computing devices, like smart phones for example, but that there will also be screens we use in our daily lives that are not personal but more communal. The personal cloud we subscribe to is what turns any screen into our personal computing platform for the amount of time we choose to use that screen as such.

Google’s Chrome OS is very similar in concept to what I am outlaying. Any person who has a Google account and has invested in the Chrome OS, via a ChromeBook, could log into my or any ChromeBook and begin using the device as if it was their own. When this concept makes its way to tablets I believe it will enforce this idea of a screen agnostic tablet, in every room, future that I am outlining.

Now of course for this to happen the cost of tablets will have to come down. That is why I pointed out at the start of this column that I am talking more about the future than the present. However, what if someday we can sell a $99 or less tablet that runs a very light OS, with access to cloud services, and wi-fi? Another way this reality could happen is with a hardware-as-a-service model where as a part of a subscription, perhaps to your cable provider, the devices are provided for free.

The bottom line is that over the next five years the BOM cost of tablets will come down. If these devices rely more on the cloud than native software, some of the costs will move from the device to the service. Making the hardware more affordable as it relies more on a service to become “personal.”

It is with these types of “smart connected screens” that I believe we will see the explosion of devices into consumers homes. Prior to tablets we may have assumed that the dominant computing screen in consumers lives was going to be a notebook PC. In essence we would have said that there would be a notebook in every room, owned by every consumer. I think we are rapidly learning that, that future is going to be given to tablets.

Don’t Miss OS X Mountain Lion’s Potential in China

Many in the media who got an early preview of Apple’s new Mac OS Mountain Lion are notably excited about a range of features. I point out a few of them in my article sharing my experience with the developer preview. Given that much of the mainstream media, or at least the sites that get the most publicity, are not based in China it will be somewhat easy to not focus on the China specific features built into Mac OS X Mountain Lion. China is a significant growth area for Apple and the improvements made for China should not be missed. Here are some of those features.

Late last year I saw a survey from Morgan Stanley that looked specifically at the PC market in China. Now by PC they mean a clamshell notebook or desktop form factor. Based on Morgan Stanley’s survey of Chinese consumers, here are the data points that stood out to me.

— Consumers in tier 1-3 cities and enterprises are key to China’s PC growth. 45% of tier 1-3 residents plan to buy a PC in the next three years vs. 36% in tier 4-6 cities. Just over half of PC owners live in tier 1-3 cities and the rest in tier 4-6. Large enterprises plan to grow 2011 IT budgets by 10%, outpacing SMBs at 2%, and spend 37% of their budgets on hardware.

— Consumer PC purchasing behavior in China is similar to developed markets in several ways. Our survey suggests Chinese consumers (9% of global units) spent $700 on their current PC, same as the US. Encouragingly, consumers in China plan to spend 6% more on their next PC and half of them plan to upgrade to a new PC in the next two years (four-year cycle).

— Our survey suggests one in five consumers want to purchase a Mac as their next PC, four times Apple’s 5% share today. However, Apple’s share gains in the near term are likely limited to the 7% of respondents who are willing to pay over $1,100 for a PC. In the long-term, as Chinese consumers become more affluent, we believe Apple could see further share gains as it is the most desirable brand, according to survey respondents.

— Apple stands out as the strongest consumer PC brand, but it may take time to monetize its growth potentials. Chinese consumers rate Apple as the most desirable PC brand well before

When you look at that data, it becomes clear that Apple has been well positioned to succeed in China. When you look at the improvements Apple made specifically for Chinese customers with OS X Mountain Lion, you can argue that the case for the Mac in China is stronger than ever.

The data from the Morgan Stanley survey points out the need for affordability with Mac hardware to come down and that is true as still only a small amount of Chinese consumers are what should be considered “affluent.” So price will be somewhat of an issue in that region but you have to also consider a brand and aspirational purchases which sometimes trump affordability or cheap. Chinese customers are very brand centric and prefer items with high brand appeal. For that I would contend that if Chinese customers have to save a few more months to get a Mac, I am willing to bet a large percentage will.

Also, iPad and iPhone are hot in that region–and cost less than the Mac. This again will make the case for the Apple ecosystem in China. All of Apple’s products help sell the others. Once you get one you most likely want them all, or at least more. iCloud’s tight integration with OS X Mountain Lion will make the ecosystem even that much stronger in every region.

Lastly, it is important to point out is that all of these specific features for the Chinese market will increasingly become a key differentiator for the Mac in that market. Compared to other “PCs” in that region these new OS X features and more will make the Mac highly differentiated in China. This also sends two messages. The first that Apple is very serious and committed to China. The second is that Apple is telling Chinese customers that they are interested in innovating uniquely for them.

My Experience With The OS X Mountain Lion Developer Preview

Apple is on pace to bring a new OS X release on an annual cadence. They released today the first bit of information as a developer preview for their latest OS X release called Mountain Lion.

The big story around Mountain Lion is iCloud. Apple, with Mountain Lion, has taken another step in tightly integrating iCloud into OS X the same way iCloud is tightly integrated into iOS 5. This is key because when OS X Lion came out last year iCloud was not yet released. iCloud is becoming the glue which ties all your Apple products together and with Mountain Lion that glue is coming to OS X.

The other key takeaway beyond iCloud is that OS X Mountain Lion brings many of the primary apps and iOS 5 experiences to the Mac platform. Things like Notifications, Notes, Reminders, iMessages, Game Center, Twitter and other quick share features, along with many more. Although this is an early developer preview, I am guessing there are a few surprises with Mountain Lion up Apple’s sleeve.

I have had the privilege of using an early beta release of the developer preview of Mountain Lion for a little while now and I want to share my experience with this latest release. Keeping in mind the software is still in beta yet it is a VERY solid Beta.

There are three key experiences I want to share along with one final point that should not be missed about OS X Mountain Lion and China.


I do a lot of texting. Other than email, texting is one of my primary forms of communications with a range of people in both my work and personal life. Having iMessage on my Mac has been a profound experience.

Perhaps this is because it feels as if it is the union of two things near and dear to me, Instant messaging and texting. From about 1998 to 2004 I used AOL Instant Messenger heavily. iMessage is like the union of texting and AIM and it is bliss for those deeply committed to the Apple ecosystem.

When someone texts me, the ability to quickly respond without having to pick up my iPhone or iPad is terrific. Primarily because when I am on my Mac I am generally writing a column or an in-depth analysis for a client. Responding to a message with iMessage on the Mac allows me to quickly respond and get back to what I was working on without fundamentally disrupting my work flow. This is probably the case because I am a part of the multi-tasking ADD generation and this was something I used to do with AIM as a part of my work flow. Also having all my message threads in sync across my Mac, iPhone, and iPad is tremendous as well. Basically I can pick up whatever device is most convenient at the moment to respond with and my conversation threads are always in sync.

iMessages on the Mac is something I have wanted since I started using it on the iPhone. I am glad Apple agreed.


Next up is how useful notifications on OS X truly is. Notifications were one of the features I was most excited about with iOS 5. Mostly because notifications are one of my favorite features with Android, but I don’t use an Android device as my primary phone for a variety of reasons related to personal preference. So this feature with iOS 5 was great for me as an Apple customer. Apple bringing notifications to OS X is equally exciting.

On this point, it is important to note that I have set my applications dock to hide and not stay visible all the time. Therefore having a “badge” show up on the application in the dock is not terribly useful for me. With that established, you can see why having a better notification for important things like email has always been a desire for me. In fact I have purchased at least three different third-party plug-ins for Mac Mail in order to notify me of email and many of them were more hassle than valuable.

While writing a column, analysis, creating a presentation, etc, being notified of new email from key contacts, as simple as it sounds, has been a great experience–and it works even while in full screen app mode.


AirPlay mirroring in iOS 5 was more valuable of a feature to me than I originally thought it would be–especially with the iPad. It turns out that I use AirPlay Mirroring from my iPad to my TV quite a bit. Whether it is playing a YouTube video, sharing photos from my iPad, playing a game, or sharing a website, I love moving content from my iPad to my TV. I wrote a column about that experience on how my iPad is taking over my TV.

Bringing this feature to the Mac opens up many new possibilities. For example, streaming TV shows from the web. Not all TV shows are available through things like Hulu+ or other network apps. However, nearly all network shows are available as a catch up TV solution through the web browser on a notebook or desktop. AirPlay Mirroring in OS X Mountain Lion will bring the full web in all its glory to your TV wirelessly. And in HD since OS X Mountain Lion AirPlay mirroring supports streaming 720p HD as well as resolution matching of your display to the TV.

Apple products are also invading the enterprise and corporate accounts in large numbers and this includes Mac products as well. I will bet that AirPlay Mirroring within OS X Mountain Lion is going to be a very handy feature for many conference rooms and work place settings.

Even creating Mac OS X apps that work in conjunction with your TV to give you a “two-screen” experience, similar to apps that do this on iOS, is exciting un-explored territory.

Don’t Miss Mountain Lions Impact to China

Lastly, I want to point out something that I think is very important. Because Apple so tightly controls not only the hardware they sell around the world but also the software, they are able to make very specific regional solutions as a part of their operating system. They have done just that by tightly integrating some incredibly useful features for the Chinese market.

A few key features for China:

  • Better suggestions: As you type, Mountain Lion offers more up-to-date and relevant candidates for words and phrases.
  • English and Chinese: You can now type English words in a Pinyin sentence without switching keyboards.
  • Better handwriting: Mountain Lion more than doubles the number of Chinese characters supported in handwriting recognition.
  • Autocorrection: If you enter Pinyin incorrectly, Mountain Lion suggests a likely candidate for the word you meant to type.
  • Fuzzy Pinyin: Mountain Lion adds support for Fuzzy Pinyin, which makes text input easier for users who type Pinyin with regional pronunciations.

Also full support for many popular services in China like Baidu search in Safari, Sina weibo, Youku, Tudou, is integrated right into Mountain Lion.

What is important to point out is that all of these specific features for the Chinese market will increasingly become a key differentiator for the Mac in that market. This also sends two messages. The first that Apple is very serious and committed to China. The second is that Apple is telling Chinese customers that they are interested in innovating uniquely for them.

Related: Don’t Miss OS X Mountain Lion’s Potential in China

Mountain Lion proves that Apple is still innovating specifically for the Mac. Yes the growth in iPhone, iPad and iOS is astonishing but the Mac remains an important part of the Apple ecosystem.

From what I have seen with the Mountain Lion developer preview, I see a myriad of things for Mac app developers to be excited about and many features consumers will find valuable.

Motorola Droid Razr Maxx Commercial–Best Droid Marketing Yet

When I met with Motorola at CES and they showed me the Droid Maxx I suspected they were on to something. What is interesting to me as an analyst about this device is that it is not just another Android device that is thrown into the sea of sameness. Motorola took a great design like the Droid Razr, a product with terrible marketing in my opinion, and packed a 3300 mAh Li Ion battery to get roughly 21 hours of talk time. This is enough of a differentiator in my opinion to generate genuine consumer interest.

This product represents what I think the future of mobile hardware will look like. One where companies pick out segments of the market and design their hardware accordingly. In this case Motorola is specifically targeting those for whom battery life is a established problem.

You could argue that is true for every consumer but I would point out that there is a segment for whom it is a bigger problem than most. My wife for example has no problem going more than a day on her iPhone 4S on a single charge. She just isn’t a heavy user and has no perceived “battery life” problem. Many consumers are like her. My iPhone 4S, however, is below 10% by the end of the day–every day–and often doesn’t last until 9pm. Mainly because I use it extensively for my job. Battery life for me is a known issue I battle with every day. For me a device with longer battery life is an attractive feature.

When I first saw the Droid Razr Maxx commercial, my first thought was that it was the first Droid commercial I have ever seen that actually made me want the device. Most Droid marketing is trying to be overly cool or appeal to geeks and techies. Most Apple commercials appeal to the mass market because they point out features average consumers find valuable or can associate value with. This is the first Droid commercial that actually does this well.

By highlighting the shortcomings of most devices battery life, Motorola points out a problem that for many is close to heart. If you have issues with battery life you know. If you don’t have issues with battery life than this device isn’t for you–plain and simple.

That is the sign of good marketing. It is speaking to a segment. I applaud Motorola for taking this approach as the Droid Razr Maxx is the first device that I believe stands out in the sea of sameness. More importantly the commercial communicates features that a segment will associate as valuable. If a feature or feature set is valuable the product will sell itself. I wouldn’t be surprised if the Droid Razr Maxx is one of the more successful Android products.

If you haven’t seen the commercial here it is:

Google Officially Owns Motorola–Now What?

US Regulatory agencies along with the European Union approved Google’s acquisition of Motorola today. This acquisition, although initially positioned for Motorola’s patents, could very well cause quite a bit of change in the mobile landscape.

I wrote a column back in August on all the reasons why Google Should Buy Motorola. To my surprise five days later Google actually did buy Motorola Mobility, Inc. As a part of my work as an analyst we do future scenario planning and that column was a theoretical analysis of a scenario we could see playing out.

My main logic was around how difficult it is in mature consumer markets to be a hardware only company and thrive. I was convinced that over time Motorola would face financial struggles and would need to be bailed out or go out of business. Google was my logical choice to buy them in that scenario. The patents and other points were timely but icing on the cake.

There are some strategic elements of this deal that whether or not were clear to Google at the time could be very interesting. Assuming Google does not sell the hardware business at some point in time, which would be sealing Motorola’s fate, I see two directions Google can take with Motorola’s hardware business.

Attack the High End

Right now the point needs to be made that Motorola hardware is the ONLY hardware brand which is committed to Android only. Every other partner of Google with Android also ships or will ship Windows Phone and perhaps something else as well in the future. It is also no secret that the Android ecosystem is broken and fragmented and needs to be fixed. I went into depth on that last month in this column.

Because Motorola is the only handset and tablet brand that is Android only, Google could turn Motorola hardware into the flagship, premium, hardware and Android experience. Android devices need more differentiation in order to compete in the sea of sameness which is Android devices. Google could focus on heavily differentiating Motorola hardware and focus on the high-end, premium part of the market. Perhaps Motorola hardware could become the Nexus line of devices, and used as the flagship “hero” Android products.

Attack the Low End

The other thing Google can do with Motorola is attack the low-end part of the market and practically give Motorola hardware away for free. On this point it is key to note that Google is a services company. Any and all hardware that Google cares about exists only to give consumers access to Google’s services. Therefore, it is within Google’s strategic interests to get as many Android devices out there as possible. One way to do that is to give away, via heavy subsidization, handsets and tablets in order to make up lost revenue elsewhere.

As it stands today Android hardware is just one piece, and not even a big piece, of Google’s revenue stream. Google makes a lot more money elsewhere and does not necessarily need to make money on hardware. It is more important that they get that hardware to as many consumers as possible.

Motorola could become the entry-level brand with the Droid brand or some other “fighter” brand going after the lower end, entry-level, cost conscience part of the market.

Not Competing with Partners

The biggest concern many have with Google owning Motorola is that it sets Google up to compete directly with their partners. If they focus on either the high-end or the low-end, they could then focus on helping their customers compete on different playing fields.

This could perhaps work best if Google choose to go after the low-end for example. This would then give Google the ability to figure out how to help their Android partners better differentiate themselves from the sea of sameness and compete in the higher end of the market which allows for more favorable margins.

It will be fascinating to watch how this all plays out. We believe going vertical meaning single companies owning hardware, software, and services (like Apple does) is a disruptive trend. This is not easy but strategically could protect from market volatility. Now that this deal is official Google has a number of company defining decisions in front of them.

Best Buy: With Lots of Unbiased Advice

Best Buy has been running a commercial for the past few weeks where they are positioning themselves as THE place to buy a mobile phone. The commercial was very well done.

The commercial included many who invented recognizable aspects of the mobile phone experience. People like Philippe Kahn who created the camera phone. Or Ray Kurzweil touting speech and voice technologies he created. Each person goes on to say what they created in relation to the mobile phone. Then it ends with some Best Buy blue shirts saying the following:

We created a better way to buy a smart phone. Any phone, any carrier, and all of their plans, with lots of unbiased advice.

It is the last few words that I find the most interesting–with lots of unbiased advice. This insinuates that cell phone retailers should be accused of selling phones with biased advice. Perhaps not just bias advice but sales kickbacks from handset vendors as well incentivizing sales people in carrier stores to push one device over another. Not every vendor does this but it does happen. It can lead to overly zealous sales folks pushing devices on consumers they don’t actually want. I have actually witnessed this in action.

Last summer I was in a certain carriers store activating an iPad for their data network. I overheard a sales conversation between a woman in the store and a sales rep. She had mentioned several times that she was interested in the iPhone. During the process of the conversation the sales person talked her out of the iPhone to go with another device. I listened to her explain what her main uses were and they were fairly simple. Talk, text, email, web, and the device she was sold was fully capable. The only observation I made was that she did not seem overly technical. I was leaving the store at the same time as she was and I gave her my business card and asked if she wouldn’t mind emailing me in 30 days if she hadn’t exchanged the device. She emailed me a week later saying she exchanged it for the iPhone.

This is what I am referring to when I speak of the complexities and challenges of selling devices as retail. This is why I expect that over the next several, or more, years that we will see more companies duplicate Apple’s retail strategy and start opening more of their own direct to consumer outlets. Tim articulates in his column today that he expects Amazon, an online only retailer, to start employing their own retail strategy–which would truly signal this fundamental shift.

All of this just goes to demonstrate how the carrier sales channel is fundamentally broken. Best Buy is looking to solve this problem by carrying every device on every network. To some degree I almost wonder if Best Buy’s approach won’t lead to more challenges for consumers as there are faced with an overload of information and options. This is known as the consumer paradox of choice, which I have written about before.

Best Buy’s approach, believe it or not, will make handset vendors lives even more difficult. At least when sold through the carriers channel, these OEMs compete with a limited number of devices. Carriers don’t generally pick up every device an OEM makes but rather picks certain ones to fill gaps in their lineup. Competing in the sea of sameness which is the Android landscape, and will someday be the Windows phone landscape as well, will be even more difficult in an environment where the sea of sameness is multiplied. This is exactly what will happen in Best Buy as they sell every device, from every network.

And lastly is it even possible to be a sales person in retail and not have bias? We will see how this turns out as hopefully our friends at NPD will be able to track specifically what happens with sales of mobile phones and tablets at Best Buy. I, for the time being, will remain skeptical and convinced that the OEMs are better with their own retail presence. I outline that logic in this column by pointing out how similar the personal electronics market is to the automobile market. I remain convinced that the way we buy products is going to be drastically different in the not too distant future.

If you haven’t seen the commercial here it is:

Windows 8 on ARM: The Big Questions

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Do Apple Competitors Make Bad Products?

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

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

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

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

Apple Has More Competition Than Anyone—Yet No True Competitors

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

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

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

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

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

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

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

Apple’s “Works Better Together” Philosophy

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

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

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

Technology as Art

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

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

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

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

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

The Tablet is the Ultimate Mobile Personal Computer

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

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

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

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

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

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

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

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

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

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

The iPad: The Perfect Learning Companion

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

Credit - OnlineEducation.net

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

2012: The Year Google Fixes Android or Loses the War

The end of 2011 brought about some interesting market developments. Both Nielsen and NPD shared data that the once so dominant Android actually declined in market share over the holiday quarter of 2011. Both Nielsen and NPD also shared that during the same quarter iOS, mostly due to the iPhone, closed the gap on overall Android market share.

Now, with all of these quarterly market share reports, we have to keep in mind that this data only reflects the current quarters data and not the annual or overall installed base. Still, it is important to note that during the holiday quarter (perhaps the most important quarter) Android market share declined and iOS jumped dramatically. This reality should concern Android partners and Google.

We sensed this trend early on and shared with our clients last fall the fact that Android could be headed for a decline in market share. In my TIME column in October of last year I outlined many of the ways that Google was mis-handling Android and unfortunately further straining their already strained relationship with their partners. If Google does not get a handle on not only the fragmentation issues but also their relationship with their partners (by being more transparent and trusting with them) then I anticipate the decline in Android market share to continue. Not solely based on more consumers choosing iOS but by Android’s partners vesting more resources and upping their commitment to Windows Phone.

I don’t expect any Android vendors to completely dump Android but I could see them shipping fewer Android devices overall as a part of their product mix in favor of Windows Phone, which inevitably would lead to fewer Android devices on shelves at any given time, which would lead to even further Android market share decline. I firmly believe that Android device volume is its strongest competitive advantage. Right now Android currently has the bigger share of OEM resources and overall device mix per OEM. However, that could all change very quickly and in 2013 Microsoft will have a compelling story around Windows Phone and Windows 8 for their partners. If Google does not adjust their strategy with Android quickly they run the risk of OEMs shifting the balance of their resources more toward Windows Phone (or something else) and away from the Android platform.

If you line up all of these underlying trends it could spell real trouble for Android. My biggest concern for Android overall is that the platform itself creates no significant hardware loyalty. That is a dangerous truth for any of Google’s hardware partners. The same can be said of Windows Phone, or any other horizontal platform for that matter. If you are going to be in the hardware game you have to differentiate and more importantly create a partner ecosystem that creates customer stickiness.

Lastly, on my point that Android’s competitive advantage is volume of devices in channel at any given time. NPD shared their data on the top devices sold over the Oct/Nov time period. If you look at the chart you see that the top three are iOS devices. Note these are three different phones. If Apple does continue to diversify their products on the market and leave legacy devices in channel at lower price points, they will themselves be creating their own iPhone army of devices that could further hurt Android’s market share over the long haul.

Apple’s Enterprise Invasion: Why Winning in Consumer Means Winning in Enterprise

There used to be a time when I would go to tech industry events, trade shows, internal company meetings, etc. and I was one of the few in the room with a Mac. I took great pride in that fact, but now the Mac is gaining everywhere. It’s in schools, hospitals, labs, construction sites, restaurants, consumers’ homes, coffee shops, and now increasingly in the enterprise.

With this observation in mind it should come as no shock that Apple blew the doors off their latest earnings and recorded all time sales of Macs. My analyst colleague, Frank Gillet at Forester, shared his research which showed that 1 in 5 Global workers now use an Apple product for work.

So what is fueling this trend?

Apple Products Cost Less to Support

When I worked at Cypress Semiconductor, I moon-lighted from time to time and helped our IT department by solving Windows problems. I prided myself on the fact that I could troubleshoot Windows with the best of them. I could navigate my way in and out of all of the different and common Windows conflicts. Then a funny thing happened. I switched to the Mac and all of a sudden troubleshooting became a thing of the past. That reality is now hitting the enterprise IT departments.

A recent survey by the Enterprise Device Alliance which surveyed IT professionals in large enterprise environments that have a mix of Macs and PCs overwhelmingly found agreement with IT managers that Macs cost less than PCs to support. IT managers noted that Macs presented higher up front acquisition costs, but also noted that the long-term benefits were worth the tradeoff.

When it came to Mac adoption in the enterprise, ease of technical support and lower total cost of ownership were among the top reasons for the switch. Number one on their list–employee preference.

Bring Your Own Device To Work

If you follow this industry even a little bit you keep hearing about the “consumer-ization of IT” or the “Bring Your Own Device” trend. Yes, both trends are real and IT managers are diligently working to allow employees to use whatever devices they want at work.

We recently interviewed SAP’s CIO Oliver Bussman. He shared with us that inside SAP they have 14,000 iPads and 8,000 iPhones deployed. That is a total of 22,000 iOS devices compared to the 20,000 Blackberries deployed to his workers. SAP, like many other companies is working to cater to their employees’ device preference. And Mr Bussman shared an interesting perspective with us. He said that he now has to pay closer attention to what is going on in the consumer market because if he doesn’t, he would not be able to stay ahead of the game. His workers use and learn how to make things like the iPad work for them at home. Then they come to him and say they want to use it in the office as well. After his visit to CES, Mr. Bussman recorded a video of his thoughts on the consumer-ization of IT and it is worth watching as he has a very important perspective on the subject.

The Right Product for the Right Job

In the construction industry they say that “every job is easier with the right tools.” Perhaps for too long, due to the Windows monopoly on most businesses, IT managers have been forced to have workers use the same tool to get a multitude of jobs done. But now devices like the iPhone and iPad in particular are proving more effective in many situations like field force and sales force automation.

During our interview Oliver Bussman also shared with us that he was able to deploy 300 iPads to his global sales team in just 4 weeks. In many enterprise solutions, the iPad, and touch computing in general, is just a better tool for the job.

IT managers need to effectively empower their workforce to be productive and equipped with the tools they need to be successful. Apple products are now becoming a critical part of the enterprise tool set.

Apple’s focus has not been the corporate IT accounts. Apple has always been a consumer product company waiting for a pure consumer market to mature. Now that the consumer market for personal electronics has matured, it appears to also be an enterprise strategy. Demand for Apple products is at an all-time high with consumers and their latest earnings prove this. What no one really could have predicted was that to win in enterprise you had to also win in consumer. It seems logical, but hindsight is 20/20. That reality is now fueling growth in Apple’s favor from every corner of the technology sector. The scary thing for Apple competitors is that they are just getting started.

Even With a Huge Quarter, Apple is just getting Started

– Apple’s $13 billion quarterly profit is second-biggest in U.S. history. Only topped by Exxon’s $14.8 billion in 2008

– 97.6 billion in cash that AAPL has is higher than the market value of 476 of the companies in the S&P 500

– Apple sold more iPads than HP sold PCs. – HP PC sales 15.123m, iPad 15.43m

– 315M iOS > 250M Android

Quotes from Tim Cook:

“I believe there will come a day when tablet market by unit is larger than the PC market”

“Apple TV is not just a product but a strategy for the next decade. ”

“There is cannibalization of the Mac by the iPad”, but Apple thinks the cannibalization is much worse on the Windows PC side.

I think it’s remarkable that we’ve sold 55m iPads and we’ve only been in the business since April 2010.

After Apple’s blow out quarter, setting records in nearly every category, there is going to be talk and speculation that Apple is peaking. But really, how can Apple beat this quarter they just had? Especially with such fierce competition right? Wrong, Apple is just getting started.

Think about this last year and quarter for Apple. Apple had a record blowout quarter on incremental product upgrades. What if Apple release all new Macs, iPhone, and iPads in 2012? Tim Cook answered the question of how Apple can keep this up. The answer–innovate.

There are still industries for Apple to disrupt. | Four Industries Apple Can Still Disrupt | There are still new products to be made for new types of customers. We are only half way through this 50+ year journey of bringing technology to the masses.

Not to mention new markets. Apple is just scratching the surface in Asia and the Apple brand is one of the most desirable in all of Asia. Consumers in Asia, and China in particular, have an insatiable appetite for Apple products. One could make quite a compelling argument that China consumer may even have more demand for Apple products than the US.

What is my biggest take away from this call? Lots of OEMs better get their tablet strategies in order.

An iOS Laptop is a Compelling Idea

Our friend Harry McCracken wrote in his CNET column yesterday about why he believes the world needs an iOS laptop. James Kendrick of ZNET shared his thoughts on Harry’s article pointing out that it is a good idea but that he doesn’t think it will happen anytime soon.

Both Harry and James have formed opinions on this matter largely because of the latest Zagg Folio case for iPad 2. As a part of our own research, we have been using this case as well for sometime and have been bringing this solution up in our conversations with industry executives.

Our opinion is that the limitations of touch computing in terms of text entry, formatting, etc are largely offset with the combination of a keyboard. That being said there are still significant challenges with this approach which need to be addressed.

Firstly, an iOS laptop, or any tablet/ laptop combo will be storage limited. Due to the nature of the tablet form factor and use cases there will simply not be hundreds of gigs of storage in these devices for some time. The case can and should be made that consumers who purchase a iOS laptop or tablet/hybrid may not be buying these devices to fully replace a notebook but for many it will suffice none-the-less. Therefore cloud services could be a requirement for devices like an iOS laptop or tablet/PC hybrid to be fully embraced.

The biggest failing I have found in using the iPad 2 with the Zagg Folio case is text formatting and document editing. Going back through and fixing words, deleting sentences or paragraph’s is still a cumbersome experience using touch only. It is not impossible, but this is one area where I prefer a mouse and pointer.

In reality an iOS laptop or tablet/PC hybrid could very well find its niche in what was formerly the Netbook category, a category that at one time was selling 30 million units a year.

Tim points out in his column today, that we could see a resurgence of the Netbook like category with new ultra-thin PC(which are not UltraBooks) that are specifically targeting the low end, basic PC user category.

We remain convinced that there is still a large opportunity in the sub $500 range for a class of computing product. It may very well be that we see a range of form factors target this market and the tablet/PC hybrid being one of the centerpieces. Tim wrote in depth about this new hybrid category in his PC Mag column titled “Make Way for Hybrids” a few weeks ago.

This could be one of the most exciting categories to watch as we see vendors experiment with the combination of touch and mouse and keyboard computing. I agree with James, in that if Apple did do something in this area it probably would not be soon, meaning this year.

Obviously, I would love to see what Apple could do in this area of a iOS/Laptop combo. However, they are also smart enough to be aware of some of the challenges that remain in order to make a device in this category that does not feel cheap, or present a sub-par user experience. For now, personally, I would accept being able to run iOS apps on my Macbook Air.

We do expect innovation in this category as well as fierce combination and hopefully creative innovation. What do you think?

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Looking Forward to the Next Round of Innovation

I was surprised by a number of conversations I had while at this years CES. More than once the conversation turned to the staleness of innovation shown at the show. It is true there wasn’t too much to get excited about this year, but the remarks I heard seemed to indicate that there is a belief that we may be headed for a period where innovation is stagnant. I have to say that I disagree.

On Monday I wrote in my column about why I believe the PC landscape is about to change. I pointed out that the barrier to entry to create consumer electronics has dropped to an all time low. Making it feasible for any company with enough cash and a market strategy to start creating electronics of all shapes and sizes. My overall point was that consumer electronics is ripe for new entrants. More specifically new entrants with fresh ideas.

That being said we have to look at innovation as pillars. There is hardware innovation, software innovation, and services innovation. One could also throw in experience innovation as a pillar as well but it is intertwined with hardware, software, and services. Each of these pillars feed off each other and spur parallel innovations.

There are countless examples of how this chain of events works. We could look at examples from the first land line phones, to the PC, to the smart phone and more. However I am going to use the iPad as an example.

The iPad was a hardware innovation (not a conceptual innovation) that integrated all the right pieces of hardware into a touch computing package. The iPad then set in motion the opportunity for software innovation and eventually we will see more innovation in services as well. This leads us to what we can expect in this next round of innovation. Namely that it will come more from the software and services pillars.

This is not to say there will be zero hardware innovation. I simply believe we will see more innovation come from software and services which will take advantage of the hardware platforms that gain mass market attraction. Namely around devices like the PC, tablet, smart phone, and TV. All of those devices represent the platforms of the future. So although we will see some hardware advancements in those devices I don’t believe they will be monumental but more incremental. Screens will get better, semiconductors will get faster, devices will be go through design evolution, etc.

All those hardware platform innovations will continue to lead to new software, services, and experience innovation. Take yesterday’s news from Apple about iBooks 2.0 and the new interactive e-book experience. Tim stated that Apple just re-invented the book and he is right. The point that needs to be made, however, is that without the iPad and the platform innovation of tablets, it would never have been possible to even think about re-inventing the book. The hardware innovation created this possibility. Tim also rightly pointed out that if publishers are not careful they could be disrupted quite easily. The hardware platform innovation leads to not just the re-birth of something like a book but the re-birth of the publishing industry. This can also be said of the music industry, motion pictures, network TV, magazine, and perhaps even government or politics? All of these industries have the opportunity to re-invent themselves in light of new and innovative hardware.

The opportunities will be endless, and again, I am not saying that hardware innovation is dead, perhaps only that it is cyclical. The next cycle of innovation will be more focused on software and services rather than ground breaking new hardware. We could discuss new computing hardware like the smart watch, automobile and more, but perhaps those are more extensions of existing platforms rather than platforms themselves. I will leave that topic for another column.

Why the iPad is an Investment in Your Child’s Future

Whether or not Apple uses this positioning, it is perhaps one of the best angles for the iPad. When friends, family, colleagues, or anyone who asks me, asks for my recommendation about iPad, I always add the benefit to kids – if they have them.

From the first iPad, and ever since, I have marveled at how my kids have taken to the iPad and more importantly how I have been able to use very helpful apps to assist in building critical skills. My kids both used the digital version of the popular “Bob Books” to help them prepare to read for kindergarten. I have been able to find apps at nearly every level of their education to let them engage more with relevant age-based subject matter.

I can say with conviction that the iPad has helped my kids learn to identify objects, colors, learn to read, build critical observational and critical thinking skills and more. This is not to say they could not have built these skills without the iPad, of course they could, only that the iPad has made the process more engaging, fun, and natural.

Touch Computing is the Future
When I was young, everyone was pushing to teach kids how to type as well as overall computer literacy. If you think about it, touch computing as well as things like the iPad in general, make computer literacy instant. My kids didn’t need to go sit through computer literacy classes to start using an iPad and begin computing. They picked it up and from day one used it to its full potential – for them. I would argue this is the case with any age group.

I have written extensively on the subject of touch computing, constantly highlighting its importance to our computing future. I believe touch represents the most natural computing paradigm, along with speech computing (which has not fully come to fruition). Touch breaks down traditional barriers to computing that a mouse and keyboard had traditionally created. Mouse and keyboard computing paradigms are still relevant, but have been designated to task specific usage.

Although touch computing is natural, exposing children to it at a young age will set their expectations for computing higher and potentially help create the next generation of leaders. Growing up with touch computing as the driving computer paradigm will lay an important base for our children’s future.

Related Columns Mentioned:
Why Tablets Represent the Future of Computing – at TIME.com
From Click to Touch – iPad and the Era of Touch Computing – At SlashGear.com

Re-Inventing The Book
Today Apple took that truth one step further with their announcement of iBooks 2 and the Author toolset. Today’s announcement on the surface is re-inventing the textbook and providing next generation publishing tool kits. It is however, quite a bit more. This announcement lays the foundation for the complete and total re-invention of books in general.

Up to this point, I have been disappointed with the publishing industries strategy to simply re-purpose books in e-reading form. Last year I wrote about the need to re-invent the book and to date it still hasn’t happened.

Hopefully with the toolkits Apple has developed and will continue to develop, publishers will get savvy and start being more creative with how they create package content. Which is essentially all a book is—the packaging of content. This packaging of content was limited to static words on a page, but with iPad the packaging of content is taken to a new level.

Publishers will get disrupted if they do not embrace this wholly and quickly. What is to stop smart people with a great idea to create the next era of interactive books? If the publishing industry is not careful, they could face the same fate as the music industry but perhaps to an even bigger extent.

Interactive books are the future and the iPad is the perfect platform for them to thrive. We will soon hopefully have not only next generation text books, but next generation children’s books, novels, graphic novels, biographies, and more.

For now, I intend to purchase these new interactive books for my kids and get them engaging with educational content. Since I truly do believe that having them use the iPad and integrating it into their educational routine is an investment in their future.

Related Columns Mentioned:
Re-Inventing the Book in the Digital Age – at SlashGear

The PC Landscape is About to Change – Here’s Why

One of my favorite quotes about change is:
“Life is a journey, and on a journey the scenery changes.”

The technology industry is also on a journey and on that journey the scenery will change. Whether many industry insiders recognize it or not the scenery is changing and it’s happening quickly.

The line is blurring between what is a PC and what isn’t. Devices like smart phones and tablets are proving to many that computing can take place on a number of different form factors. It is important for those who watch the personal computing industry closely to realize that the landscape as we know it is about to change drastically.

Tablets Take the Computing Challenge
It all began with the iPad. In as many times, in as many years, Apple again released a product that challenged the industry and forced many companies to turn introspective and re-think their product strategy.

The iPad has done quite a bit more than just challenge the industry, it has also challenged consumers to re-consider what exactly a personal computer is and what their needs are with one. What I mean by that is that our research is indicating that many consumers bought an iPad as a partial PC replacement. Meaning they were in the market for a new PC but instead bought an iPad, relegating their old PC as a backup for when they need a mouse and keyboard experience for certain tasks. What is interesting to the last point is that once integrating an iPad consumers realize they need the PC less and less for many tasks, especially when the iPad is paired with a keyboard. There are however, a few tasks like writing long emails or using certain software that these consumer still want a traditional mouse and keyboard experience for, only their observation is that those use cases do not occupy the majority of computing time for them on a regular basis. For that they remark the iPad suffices for their needs the majority of time.

As those in the industry who make PCs are already figuring out, tablets are a viable computing platform and having a tablet strategy is essential for anyone currently competing for PC market share.

We expect quite a bit of innovation in hardware, software, and services in the category over the next few years. Tablet / PC hybrids, which is a tablet with a detachable keyboard, could be one of the most interesting form factors we will see over the next few years. This product, if done right, will give consumers a two-in-one experience where they can have a tablet when they want it and a traditional mouse and keyboard experience when they want it, all in the same product. The big key – if done right.

Anyone Can Make PCs
Tim made the observation last week in his column that a fundamental issue within the technology industry is that the bulk of consumer product companies are simply chasing Apple rather than emerging as leaders themselves.

As companies look to duplicate the iPad and the MacBook Air this point becomes increasingly clear. What this creates is the opportunity for new entrants to create new and disruptive computing products by bringing fresh thinking to the computing landscape.

Perhaps a glimpse at this reality is Vizio’s announcement that they are getting into the personal computer game. With much of the hardware design for electronics moving into the hands of the ODMs, it makes it possible for anyone with a brand, channel, and cash to start making any number of personal electronics.

This is perhaps the biggest evidence about the change we are about to see in the PC landscape. The reality that the traditional companies, who were historically the leaders in this category may get displaced by new and emerging entrants.

Simply put, those who we expected to lead the PC industry may not be those who lead in the future. The truth is innovation does not stand still and if the traditional companies don’t want to do it someone else will.

The Most Interesting Things I Saw at CES 2012

CES is certainly the technology lovers candy store. It is nearly impossible for any one person to see everything of interest at CES. So my approach is to look for the hidden gems or something that exposes me to a concept or an idea that could have lasting industry impact.

So in this, my Friday column, I figured I would highlight a few of the most interesting things I saw at this years CES.

Recon Instruments GPS Goggles
The first was a fascinating product made by a company called Recon Instruments and in partnership with a number of Ski/Snowboard goggle companies. What makes this unique and interesting is that the pair of goggles has Recon Instruments modular technology that feature a built-in LCD screen into goggles.

The Recon Instruments module is packed with features useful while on the slopes. Things like speed, location of friends, temperature, altitude, current GPS location, vertical stats on jumps and much more.

Think of this as your heads up display while skiing or snowboarding. The module can also connect wirelessly to your Android phone allowing you to see caller ID and audio / music controls.

Go Pro Hero 2 + WiFi Backpack
In the same sort of extreme sports technology category, I was interested in the newest Go Pro the Hero2 and Wi-fi backpack accessory. I wrote about the Go Pro HD back in December and mentioned it as one of my favorite pieces of technology at the moment. The Hero2 and wi-fi backpack makes it possible to use the Go Pro in conduction with a smart phone and companion app to see what you are recording or have recorded using your smart phone display. This is useful in so many ways but what makes it interesting is I believe it represents a trend where hardware companies develop companion software or apps that create a compelling extension of the hardware experience. I am excited to see more companies take this approach and use software and apps to extend the hardware they create.

In this case the companion app acts as an accessory to the Go Pro Hero2 hardware and provides a useful and compelling experience. Another compelling feature is that you can use your smart phone and the live link to the Go Pro Hero2 to stream live video of what you are recording to the web in real-time. This would make it possible for friends, family, and loved ones to see memories being created in real-time.

Dell XPS 13 UltraBook
Dell came out strong in the UltraBook category and created possibly the best notebook they have created in some time. The XPS 13 UltraBook’s coolest features are the near edge to edge Gorilla Glass display, which needs to be seen to be appreciated, and the unique carbon fiber bottom which keeps the underside cool.

The 13.3 inch display looks amazing with the Gorilla Glass and packed into an ultra slim bezel like that of an 11-inch display. It surprises me to say that if I was to use a notebook other than my Air, this would be the one.

Samsung 55-inch OLED TV
A sight to behold was the Samsung 55-inch OLED TV. I had a similar experience when I saw this TV as I did when I first saw a HDTV running HD content. The vivid picture quality and rich deep color are hard to put into words. Samsung is leading the charge in developing as near to edge-to-edge glass on TVs and this one is even closer. The bezel and edge virtually disappear into the background leaving just the amazing picture to enjoy.

We have been waiting for OLED displays to make it to market, for the sheer reality that in five years they may be affordable. OLED represents one of the most exciting display technologies in a while and it is important the industry embrace this technology so we can get OLED on all devices with a display as fast as possible.

Samsung didn’t mention any pricing yet but said it would be available toward the end of the year. It will most likely cost an arm and a leg.

Intel’s X86 Smart Phone Reference Design
Intel made a huge leap forward this CES by finally showing the world their latest 32nm “Medfield” SOC running on a smart phone reference design. I spent a few minutes with the design, which was running Android version 2.3, and I was impressed with how snappy it was including web page pinch and view, as well as graphics capabilities.

Battery life is still a concern of mine but Intel’s expertise in hyper-threading and core management could help this. The most amazing thing about the smart phone reference design is that it didn’t’ need a fan.

Motorola announced that they would bring Intel based smart phones to market in 2012. This is one of the things I am very excited about as It could mark a new era for Intel and the level of competition we will see in the upcoming ARM vx X86 is going to fun to watch and great for the industry and consumers.

Motorola Droid Razr Maxx
Last but not least the Motorola Razr Maxx has my vote for most interesting smart phone. It was a toss-up between the Razr Maxx and the Nokia Lumia 900. I simply choose the Razr Maxx due to the feature that I think made it most interesting. Which was the 3300 mAh (12.54 Whr) battery that Moto packed into the form factor of the Razr – it’s just slightly thicker than the Droid Razr. Motorola is claiming that the Razr Maxx can get up to 21 hours of talk time. I talked to several Motorola executives who had been using the phone while at the show and they remarked how with normal usage during the show they were able to go several days without charging. To contrast, every day while at CES my iPhone was dead by 3pm.

Image Credit - AnandTech

Making our mobile batteries last is of the utmost importance going forward. I applaud Motorola for their engineering work and creating a product that is sleek, powerful, and has superior battery life.

Do Nokia and Windows Phone Have Any Hope for 2012?

There were a number of priorities for me at this years CES.  One of my top priorities was to better understand Nokia’s strategy for Windows Phone and the US Market.  Secondarily to Nokia’s US strategy was Microsoft in general and whether Windows Phone can grow in market share in the US in 2012.   

As I have written before, Nokia has again entered the conversation at large, but more importantly, they have become relevant in the US smart phone market.  I have expressed my belief that they contain some fundamental strengths, like brand, quality design, and marketing smarts, to at least compete in the US.

For Nokia, this years CES bore two important and timely US events.  The first was that their US presence was solidified when the US sales of their Lumia 710 officially became available at T-Mobile this week.  The second was the announcement at this years CES of the Lumia 900 which will come to market on AT&T.   

Both products are well designed and the Windows Phone experience is impressive.  That being said, Nokia’s and Microsoft’s challenge is primarily convincing consumers that Windows Phone is an OS worth investing in.

I use that terminology because that is exactly what an OS platform is asking consumers to do.  Not only invest but allow this most personal device to become a part of their life.

Currently, only a small fraction of consumers are convinced that they should buy into Windows Phone 7 and it will take quite a bit more convincing for most.  Nokia and Windows Phone face stiff competition with the army of Android devices and the industry leader in Apple. If anything, Nokia and Windows Phone have a small window of opportunity to rise above what is the Android sea of sameness – but it is only a small window. This is because many more of Android’s core and loyal (on the surface) partners will continue to invest resources in Windows Phone over the next few years. If Microsoft and Nokia are successful the result should be that the market will contain not only a sea of Android devices but of Windows Phone devices as well.

This is why the battle will again turn to differentiation across the board on both the Android and Windows Phone platform. I have previously dared the industry to differentiate and this will need to be the focus going forward.

As I look at where we are right now, it appears that Nokia is faced with an unfortunate dilemma.  Nokia now bears the difficult task of not only spending money to develop their brand in the US but to also help Microsoft convince consumers Windows Phone is the right platform for them.

Microsoft is unfortunately not building or investing in the Windows Phone consumer marketing as aggressively as they should on their own.  So rather then be able to simply focus on their brand, Nokia must also invest in marketing Windows Phone. This will inevitably help Nokia but also their competitors in the long term.

All of this, however, presents Microsoft with what is the chance of a lifetime and it all relates to Windows 8.  The importance of Windows 8 to Microsoft seems to be wildly shrugged off by many.  But I believe that if Microsoft does not succeed in creating consumer demand with Windows 8, they will begin to loose OS market share even faster than they are right now.  

Windows Phone’s success in 2012 can pave the way for Windows 8.  If Microsoft can, at the very least, create some level of interest and ultimately generate demand for Windows Phone, it will almost certainly do the same for Windows 8.  This is because once you have gotten used to the user experience of Windows Phone, it creates a seamless transition to the Windows 8 experience.   

If Microsoft can generate some level of success for Windows Phone in 2012, it will build a needed level of momentum for Windows 8. Primarily because the Windows Phone and Windows 8 Metro UI are very similar.  All of these steps are necessary for Microsoft to not only create demand for their OS platforms but to also create demand for their ecosystem.  I have emphasized the importance of the ecosystem in past columns and Microsoft must leverage their assets to create loyal consumers.

So what is my conclusion for 2012?  Simply put, and to use a sports analogy, it is a rebuilding year for Microsoft and Nokia.  Both companies need to view 2012 as a “laying-a-foundation-for-the-future” year.  I do expect Windows Phone and Nokia to grow in market share in the US but I am not sure if we can count on double digit growth. If both companies play their cards right in 2012, then 2013 will present them with the growth opportunities they both desire.

Past Columns Mentioned:
Why Nokia is Interesting
Dear Industry – Dare to Differentiate
Why It’s All About the Ecosystem

The Day A Smart Phone Changed an Industry

Five years ago today Apple introduced the iPhone. On this day five years ago, Apple opened our eyes to the reality that the devices we considered “smart” were not really smart at all. They re-invented the smart phone and made the industry re-evaluate what we knew a smart phone to be, changing the landscape entirely.

I remember the day vividly because our team had split up and one person from Creative Strategies (not me) got to attend history in the making at the iPhone launch event, while I was stuck at CES doing my analyst duties.

I have never seen the buzz around CES be so focused on something not present at the show. That year the iPhone completely overshadowed CES in a way I have never seen and may never see again.

The industry leading up the launch of the iPhone was a mess. Handset innovation was at an all time low and purely focused on business users. Carriers controlled nearly every aspect of the device. Developers knew mobile apps were the big opportunity but had to fight for “on deck” promotion through carriers’ walled gardens if they hoped to make any money. To sum it up, there was no unity, no vision, and almost zero innovation as it related to smart phones. Apple changed all that with the iPhone.

So now here we are five years later and how is the iPhone doing? If ChangeWave’s recent data is any indication, the iPhone is not only continuing to thrive five years later, but it is dominating at an unprecedented level.

Today ChangeWave released findings of a survey that intends to gauge smartphone buying intent by consumers. The results of this survey of 4,000 US-based consumers showed that among respondents planning to buy a new smart phone in the next 90 days, better than one-in-two, or 54%, say they’ll get an iPhone. Perhaps a quote in the ChangeWave press release says it best.

“Apple has never dominated smart phone planned buying to this extent more than two months after a major new release.”

I have made this observation time and time again, but the volumes that Apple ships in a single model device is unprecedented in this industry. There is no arguing that Android vendors as a whole are moving volumes. But the point has to be made that it takes an army of Android devices, to compete with one single model of the iPhone. One could argue, quite strongly that, five years later, the competition is just now catching up — or not depending on your perspective.

I’m not sure any of us could have predicted that the iPhone would not only be thriving, but dominating, and expected to continue to dominate, the smart phone landscape. I truly hope the next five years bring even more excitement and innovation to this industry, and it’s probably a safe bet that Apple will continue to lead this charge.

I’ll close with an anecdote that highlights for me my memory of the day the iPhone launched. As I mentioned, I didn’t attend the iPhone launch because I decided to stay back and cover CES for our firm. After the launch a Sr. Executive at Apple along with my father called my cell from a working iPhone. That iPhone then proceeded to be shown on TV and have images taken with my cell phone number clearly displayed on the dial pad. For about the next month I received on average 2,000+ calls a day from strangers asking if I was Steve Jobs or if they could talk to Steve Jobs.

People are strange and no I didn’t change my number. My cell phone number is, however, forever engraved into some of the first media images used the day the device launched.

I guess that counts for something.

The ARM Wrestle Match

I have an un-healthy fascination with semiconductors. I am not an engineer nor I do know much about quantum physics but I still love semiconductors. Perhaps because I started my career drawing chip diagrams at Cypress Semiconductor.

I genuinely enjoy digging into architecture differences and exploring how different semiconductor companies look to innovate and tackle our computing problems of the future.

This is probably why I am so deeply interested in the coming processor architecture war between X86 and ARM. For the time being, however, there is a current battle within several ARM vendors that I find interesting.

Qualcomm and Nvidia, at this point in time, have two of the leading solutions for most of the cutting edge smart phones and tablets inside non-Apple products.

Both companies are keeping a healthy pace of innovation looking to bring next generation computing processors to the mass market.

What is interesting to me is how both these companies are looking to bring maximum performance to their designs without sacrificing low-power efficiency with two completely different approaches.

One problem in particular I want to explore is how each chipset tackles tasks that require both computationally complex functions (like playing a game or transcoding a video) and ones that require less complex functions (like using Twitter or Facebook). Performing computationally complex functions generally require a great deal of processing power and result in draining battery life quickly.

Not all computing tasks are computationally complex however. Therefore the chipset that will win is one that has a great deal of performance but also can utilize that performance with very low power draw. Both Nvidia and Qualcomm license the ARM architecture which for the time being is the high performance-low power leader.

Nvidia’s Tegra 3
With their next chipset, Tegra 3, Nvidia is going to be the first to market with a quad-core chipset. Tegra 3 actually has five cores but the primary four cores will be used for computationally complex functions while the fifth core will be used to handle tasks that do not require a tremendous amount of processing power.

The terminology for this solution is called Variable SMP (symmetric multiprocessing). What makes this solution interesting is that it provides a strategic and task based approach to utilizing all four cores. For example when playing a multi-media rich game or other multi-media apps all four cores can be utilized as needed. Yet when doing a task like loading a media rich web page two cores may be sufficient rather than all four. Tegra 3 can manage the cores usage, based on the task and amount of computer power needed, to deliver the appropriate amount of performance for the task at hand.

Tegra 3’s four cores are throttled at 1.4Ghz in “single core mode” and 1.3Ghz when more than one core is active. The fifth core’s frequency is .5Ghz and is used for things like background tasks , active standby, and playing video or music, all things that do not require much performance. This fifth core because it is only running at .5Ghz requires very little power to function and will cover many of the “normal” usage tasks of many consumers.

The strategic managing of cores is what makes Tegra 3 interesting. This is important because the cores that run at 1.4 Ghz can all turn off completely when not needed. Therefore Tegra 3 will deliver performance when you need it but save the four cores only for computationally complex tasks which will in essence save battery life. Nvidia’s approach is clever and basically gives you both a low power single-core, and quad-core performance computer at the same time.

Qualcomm’s S40 Chipset
Qualcomm, with their SnapDragon chipset, takes a different approach with how they tackle the high performance yet low power goal. There are two parts of Qualcomm’s S40 Snapdragon chipsets that interest me.

The first is that the S40 chipset from Qualcomm will be the first out the door on the latest ARM process the Cortex A15. There are many advantages to this new architecture, namely that it takes place on the new 28nm process technology that provides inherent advantages in frequency scaling, power consumption and chipset size reduction.

The second is that Qualcomm uses a proprietary process in their chipsets called asynchronous symmetric multiprocessing or aSMP. The advantage to aSMP is that the frequency of the core can support a range of performance rather than be static at just one frequency. In the case of the S40 each core has a range of 1.5Ghz to 2.5Ghz and can scale up and down the frequency latter based on the task at hand.

Qualcomm’s intelligent approach to frequency scaling that is built into each core allows the core to operate at different frequencies giving a wide range of performance and power efficiency. For tasks that do not require much performance like opening a document or playing a simple video, the core will run at the minimum performance level thus being power efficient. While when running a task like playing a game, the core can run at a higher frequency delivering maximum performance.

This approach of intelligently managing each core and scaling core frequency depending on tasks and independent of other processes is an innovative approach to simultaneously delivering performance while consuming less power.

I choose to highlight Nvidia and Qualcomm in this analysis not to suggest that other silicon vendors are not doing interesting things as well. Quite the contrary actually as TI, Apple, Marvel, Broadcom, Samsung and others certainly are innovating as well. I choose Qualcomm and Nvidia simply because I am hearing that they are getting the majority of vendor design wins.

The Role of Software in Battery Management
Although the processor play’s a key role in managing overall power and performance of a piece of hardware, the software also plays a critical role.

Software, like the processor, needs to be tuned and optimized for maximum efficiency. If software is not optimized as well it can lead to significant power drains and result in less than stellar battery life.

This is the opportunity and the challenge staring everyone who makes mobile devices in the face. Making key decisions on using the right silicon along with effectively optimizing the software both in terms of the OS and the apps is central going forward.

I am hoping that when it comes to software both Google and Microsoft are diligently working on making their next generation operating systems intelligent enough to take advantage of the ARM multi-core innovations from companies like Qualcomm and Nvidia.

These new ARM chipset designs combined with software that can intelligently take advantage of them is a key element to solving our problem with battery life. For too long we consumers have had an un-healthy addiction to power chords. I hope this changes in the years to come.

My Favorite Piece of Tech Gear Right Now

I have nearly every gadget and gismo imaginable. Luckily for me, analysts get great gear to review as well. A friend at a party, who knows all to well about all the great tech gear I get to play with, asked me what my favorite was at the moment. I didn’t even hesitate and I said my GoPro HD.

Before I go further you have to understand that I make a lot of home movies and take a lot of pictures. For me preserving memories is a very high priority. So I’m that dad that takes pictures and video in a simple attempt to preserve as many memories as possible and is always looking for a great moment to capture.

The GoPro HD was designed primarily with extreme adrenaline junkies in mind (which I used to be) and not necessarily for dads who like to take video walking around Disneyland but that is exactly how I used it.

Convenient Hands Free Video Recording
One of the problems with taking a lot of video to capture memories and moments is that you often miss the actual moment. You are so focused on holding the video camera or camera phone and making sure the moment is in focus and captured accordingly that you are staring at the moment through the phone or video camera lens.

I constantly see others trying to record a moment on video, while simultaneously trying to look over the camera so they can see the moment first hand. All the while looking back and forth between the video camera and watching what they are trying to record.

This is what a wearable recording device solves. It gives the watcher the ability to record a first person point of view recording while also being able to focus on the moment.

One particular operating challenge they solved was how to operate with only one hand and while not looking at the camera. This is needed because more often than not the camera and casing are either on your head with the head strap or mounted to your helmet. Understanding this the team at GoPro made the device dead simple to operate. One button turns it on, and the other starts and stops the recording. The on/off button also allows you some menu customization but I rarely use it for that.

The GoPro was specifically designed for the extreme sports enthusiasts and of course it works brilliantly for this use case. I use it frequently when I ride ATVs. I, however, found it interesting how useful it came in for non-extreme sporting events and everyday life events. Like swimming in the ocean or a pool with my kids, or on roller coasters and other rides at Disneyland, and riding bikes with the family in Tahoe. Although these were not the primary use cases marketed for the GoPro, I am convinced that even for the non-extreme sports junky this wearable recording device is a easy and convenient way to capture great and unique video.

The only dilemma you have to overcome to use it outside of extreme sports, is the odd looks people give you when you go out in public with a camera mounted to your head. Here is a slightly embarrassing picture of me on the Tea Cups at Disneyland sporing the GoPro.

The key is to not take yourself too seriously.

The camera while in the case is very durable. It is waterproof, sand proof, dust proof, tree branch proof (since I whacked it on a low hanging tree brance while riding my ATV on a trail), and a whole lot more.

So why is the GoPro HD my favorite piece of tech right now? The answer is simple. Most of what I have in the way of tablets, notebooks, smart phones–and more–are personal electronics and mostly only enjoyed by me. The GoPro, however, although used by me produces things that can be enjoyed and fun for everyone. It enables a memorable and shared experience that is fun and entertaining. This is what makes it great. It is fun to use, I am having fun when I use it, and it produces content that can be shared, consumed, and valued by my family and friends. Therefore everyone wins–not just me.