Author: Ben Bajarin

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

Apple is Still the #1 Smartphone Vendor

There has been quite a bit of interesting media and headlines this last week pointing to data related to Samsung’s latest earnings and smartphone shipments. Many are making the claim that Samsung is now the number one smartphone vendor by volume. However, when we dig deeper into the numbers we find a different story.

First (something that shockingly needs to be continually pointed out), the numbers released in Samsung’s earnings of 27.8 million smart phones shipped is product shipped into the channel not sold to consumers. In reality the carriers stores are Samsung’s customers since their goal is to sell phones to carriers who then try to sell them to consumers. This is called having a channel strategy, something Apple does very differently due to their rather large retail presence. Another differentiating point regarding numbers is that Apple actually releases the number of products sold to consumers where many other companies do not.

Second, the statement that Samsung is the largest “shipper” of smartphones can only apply to Samsung’s Q3 for 2011 not per annum. Apple still sells annually more smartphones than any other manufacturer.

It is tough to say exactly how many smartphones Samsung “shipped” into channel in 2011 to-date since they did not disclose smartphone shipment data in their Q2 earnings. That being said I’ve seen credible attempts to break down estimates and the most logical number I have found for “shipments” into channel from Samsung thus far in 2011 is 50.2 million. In that same period (since January of 2011) Apple SOLD 56.09 iPhones. This is why I am confident Apple is still the number one smartphone vendor. One last point here, we believe Apple will SELL north of 25 million iPhone’s (conservatively) in this upcoming holiday quarter.

We need to be much wiser if we are going to make headlines with market share claims. I understand to many market share is a big deal but I don’t believe it is as big a deal as people make it out to be.

Henry Blodget of Business Insider makes a point that I disagree with. In his column on why Apple should be worried about this Samsung data he states:

As the history of the tech industry has demonstrated again and again, technology platform markets tend to standardize around a single dominant platform. Although several different platforms can co-exist while a market is developing, eventually a clear leader emerges. And as it does, the leader’s power and “network effects” grow, while the leverage of the smaller platforms diminishes.

I don’t disagree that Henry’s observation is true, I simply don’t believe it will be true in the future. The flaw in this observation is that it is only true when a new product, technology or market begins and moves to maturity. As a market matures, it is true that a standard emerges. This standard helps drive the market to maturity. Once the market matures however it becomes saturated with many variations and departures from the standard.

For Henry’s statement to have absolute truth we would need to look farther back than just the technology industry to ALL consumer products. If we do that we find that what I pointed out is always true. Once a market matures it fragments and thus there is no longer a dominant market leader. Study consumer packaged goods, automobiles, consumer appliances and more and you will find this to be true.

This is why I am confident that Apple, Android and most likely Windows Phone will all compete for market mobile share but there will be no dominant leader like there was when Microsoft had 98% Windows share. That future will not happen, as all three platforms will co-exist and each have chunks of the market to themselves.

Smartphones are 5% of global handset shipments world-wide. If we think that this game is anywhere close to being over we would be deceiving ourselves. We have a long journey ahead and one hopefully filled with tremendous competition, because when that happens consumers always win.

Why Nokia is Interesting

What if I was to tell you that the global handset war of the future will be between Apple and Nokia? On a global scale this may very well be the case as I am convinced now that, from a global perspective, Apple and Nokia think very similarly.

This of course does not mean that other handset OEM’s will not be competitive in these areas. However, from a brand and global handset strategy perspective, Apple and Nokia seem poised to compete head to head.

Nokia has never fully exited the realm of relevance. I follow the WW market for phones and am quite interested in what are the big picture global handset consumer trends. Because of that, Nokia and even RIM for that matter, still come up in conversations. However, I believe Nokia has a brighter future than RIM.

Nokia has maintained its relevance both in the terms of product offerings and brand very well on a global scale. Those of us who live, watch, and study the US market primarily, often forget that the world is bigger than the US. Nokia has a weak to non-existent brand in the US so it’s easy to count them out–although we shouldn’t.

There are a few key reasons why I think Nokia is interesting and I will be keeping a watchful eye on them as a global handset competitor. The first is their ability to manufacture handsets in massive quantities.

Nokia currently manufactures 1 million phones every day. Now, those are not all smart phones and mostly feature phones. However, what is key is Nokia’s ability to handle scale. This is one of the key things any global player will need to be able to manage and execute to meet the global handset demands of the future. Nokia can manufacture massive quantities of a single phone design and that is not easy to do.

Nokia has an extremely efficient process for designing and manufacturing handsets and this is one of the key reasons I think they are interesting and, other than Apple, can meet capacity of the future demands.

Again this is not to say other brands like HTC, Samsung, Moto and others will not be successful, only that they will ship more products in lower volume rather than massive volume of only a few designs.

The other element I think Nokia brings to the table is their roots in design innovation. Nokia has certainly had their share of design flops but generally speaking, they are at least creative and out-of-the-box when it comes to design.

The design of hardware is one of the central things factoring into the buying process of consumers. The ability to design an object of desire is very difficult and even companies who do it well don’t necessarily hit home runs each time. Nokia has a history of innovative design and because of that going forward I find them interesting.

On a slightly lesser scale than the last two points, Nokia is also interesting because of their partnership with Microsoft. This, I feel, was a wise choice of an OS partner but it will still bring challenges.

I am very optimistic about Windows Phone and in particular Nokia as a partner in this area for Microsoft. Nokia has a strong brand in many parts of the region and with the release of two Windows phones, the Lumia 800 and the Lumia 710, they have taken their first step to become relevant in the smart phone segment.

Although I am optimistic and will follow Nokia with a keen eye from here on out, there are still many questions that need to be answered.

The first is how they will differentiate,beyond hardware design, on top of the Windows Phone platform. I’ve said this before and I’ll say it again- selling a standard OS only leads to the “sea of sameness” and overcoming that sea of sameness will be key for Nokia. I believe their penchant for design is a good start. They are also bringing core apps with maps, music and sports to Windows Phone and that is a good start.

Second question is how successful will Nokia’s North America brand push be? Although here at Nokia World, Nokia did not release any specific data but they officially stated their commitment to the US market with a portfolio of products in the first half of 2012.

I believe there is still market share to be had with smart phones in the US and I feel RIM in particular is vulnerable there as well. In regard to Nokia in the US, if their efforts are successful,I believe it will affect Android devices more than the iPhone. So although Nokia is late to enter the US market, I hope they enter the US market strategically and relevantly and with a serious marketing budget as well. We will have to wait for further news before analyzing their North America efforts.

Overall, my take away from Nokia world is that Nokia is perhaps still highly relevant. In emerging markets they are designing devices with features consumers want, like dual SIMs, at price points they can afford. Their commitment to Windows Phone gives them a solid first step in smart phones and now executing in these areas above will be key.

How iCloud is Like Amazon’s WhisperSync

One of the interesting features I am picking up on iCloud is not the usual data syncing but how some apps are integrating iCloud. A good example of this is with games that are built to support iCloud.

Games or apps in general that are built or updated to support iCloud bring with them the ability to know where the consumers last usage point was and let them pick up where they left off on other devices.

This is a feature similar to Amazon’s WhisperSync with e-books, also a feature built into iBooks now, that lets you pick up where you left off of any book on whichever device you choose.

Clearly there is a great deal of value to the consumer to be able to use the same app on multiple devices and always be able to pick up where they left off. Some apps, like games for example, this is more practical for but I expect developers to find more creative ways to use iCloud app syncing in the future.

What is strategic about this for Apple is that this feature begins to become more valuable the more iOS devices you have.

If all I had was my iPhone then I would never be in a position to use the app on any device but my iPhone. Therefore, the need for apps to sync my last position isn’t all that necessary. This feature becomes more valuable, as does iCloud, the more iOS devices I own. The more possible devices I have in my personal ecosystem the more something like iCloud becomes valuable.

The game experience has been extremely useful and for the time being has encouraged me to play more games knowing I can pick up where I left off on another iOS device. This is the case in many times where as I play a game on iPhone and then when I get home I want to play the game on my iPad.

I can see value in this with music and perhaps video also. Suppose I was watching a TV show at Starbucks on my iPhone, because it was the only screen I had with me, then when I get home I want to pick it up where I left off on my iPad. I can see a great deal of value in that experience.

Given that iOS and iCloud are so new, I imagine that over time we will see these experiences get better and more comprehensive.

In many ways we are just scratching the surface with the personal cloud concept and I am excited to see where it goes.

The Big Questions for Nokia to Answer at Nokia World

Ever since Nokia made the decision to partner with Microsoft and standardize on Windows Phone software to drive Nokia hardware, I have become more optimistic on Nokia’s future.

Enough so that I felt compelled to attend Nokia World in London, which starts next week on the 26th. I am going there in the hopes to gain a better understanding of several key things from both Nokia and hopefully from Microsoft as well.

In my opinion Nokia needs to address three key things in order for me to believe they can be relevant in the worldwide smart phone market conversation.

The first thing I will be looking for is the quality in design of the their new hardware. In many countries smart phones are also status symbols, things people want to show off in public, like a fashion statement. Therefore, Nokia needs to release hardware that can become or be seen as an object of desire.

The second thing I will be looking at is how, if anything, they have differentiated the Nokia experience on top of Windows Phone. My biggest concern for Windows Phone going forward is that they create the “sea of sameness” where other than design all devices are the same.

Differentiation is absolutely essential in mature and maturing markets. Because of that, I am hoping that Microsoft is beginning to work on ways that they can help their partners differentiate and compete in more than just hardware.

The last thing I will be looking at is branding. A company’s brand has become extremely critical in so many countries with regards to consumer electronics. Nokia, especially in the US, has little to no consumer mind share. Yet on a global scale the Nokia brand is still strong.

InterBrand ranks them currently at number 14, however, they suffered a 15% decline since 2010.
Although the Nokia brand is strong, I would content, that it is not synonymous with innovation and forward thinking technology. These are key things as consumer look to make investments in these devices for the future.

It will be interesting to see how, if at all, Nokia addresses these topics at Nokia World next week. I am optimistic, but then again I am an eternal optimist.

How My iPad is Taking Over My TV

I have been enjoying the new AirPlay iPad and iPhone mirroring a little too much. Every since updating to iOS 5 on Apple TV, iPad, and iPhone, I have been using the AirPlay mirroring function every chance I get. In case you are unfamiliar with this new feature, AirPlay now lets you mirror any iOS 5 device through Apple TV to your big screen. This brings not just streaming video, photos, music from certain apps but from every app.

I have been using this new feature to browse the web, play games, check twitter, watch Hulu and YouTube, make music with Garageband, Face Time and more all on my 55″ TV. I am not sure how terribly practical all of this is in the long run but I am exploring the possibilities.

One use case that has been interesting in particular, is using the iPad and mirroring it to my Apple TV, then using my Bluetooth connected keyboard to use my big screen as an external large display for my iPad. In this use case I have responded to e-mail, wrote a column, and done general text entry using the iPad now on a large screen.

Again, this I’m sure is not something many are doing, or will want to do, I am simply exploring the possibilities.

In this experiment, I again have been debating in my head whether or not Apple needs to or should build an actual TV set. It seems to me that Apple TV as a set-top-box along with operating system mirroring could go along way in satisfying the needs of a TV solution.

This has also made for a great technical demo. Countless times now, when people were over, I have shown this demo and quickly brought up photos or video I just took on iPhone or iPad and brought them to the TV. Even just for fun I have showed off new apps using the TV rather than just showing people on my phone. Again, not terribly practical but fun.

As much as I have been having fun with this experiment it needs to improve in several ways.

First of all, I’d like to see my iPad or iPhone mirroring go full screen on the TV. There are obvious technical challenges involved with this but they are ones which can be solved. As you can see from this image I have my Hulu+ app on my TV using AirPlay mirroring but there are black bars on the side.

When using the iPad this was less of a big deal as the screen is larger but with the iPhone using mirroring is almost pointless because it is so small.

Another change that needs to be made is when the iPad goes to sleep, Apple TV mirroring goes off. In many cases where I was typing with an external keyboard for example, I was not actively using the iPad screen. I’d like to still use iOS mirroring in many cases even if the iPad or iPhone goes to sleep.

I’d really like to see perhaps a split screen, with iOS and my live or broadcast TV done better. It would be interesting to be able to watch TV, whether recorded or live, and have something like the Twitter app or Facebook app up on the screen simultaneously. I know certain TV’s from Samsung and a few others can run apps but doing this without the need for a new TV using what I have (Apple TV and an iPad) is a better value proposition.

Lastly, I would like the same iOS mirroring on Apple TV with OSX. I’d like to be able to do something similar to what Intel offers with Wi-Di, where you can mirror your notebook to the TV.

Key Takeaways

After seeing iOS on my TV, I am absolutely convinced it belongs on my TV. Using apps on the big screen has been a fascinating experience. I literally can not wait for the day when iOS developers can write apps specifically for the TV.

Another interesting take-away has been notifications. As I have been doing app mirroring and using the Hulu app for example, I have found it valuable to see a quick alert from either a news source, email, twitter etc. My wife finds it annoying but just the experience of seeing notifications of things I care to be notified of, on my TV while being entertained, was interesting.

This experience has shown me a vision of what I believe a more encompassing Apple TV experience could provide. Apple is clearly only scratching the surface with iOS mirroring on Apple TV and I am excited about the possibilities.

Just to show it, here is Face Time and the Writer App on my TV.

Android and iOS: Two Very Different Philosophies

In this column, I in no way intend to say one of these platforms is superior to the other. I simply want to explore how they both represent completely different approaches to software and user experiences.

We have to start with a fundamental agreement that we live in a free world and support a free market. In this world consumer choice is the most powerful market driver. Competition brings choice and choice is very good.

Therefore, consumers are free to choose whatever products in hardware, software, and services they so desire. Companies compete in an attempt to create features that appeal to consumer segments, interests, and preferences. Certain features in hardware, software, and services will appeal differently to different people. There is nothing wrong with that, as I said it is very good.

The Android Philosophy
At this point we must point out that Google is a services company. It is for this reason that we should expect a different hardware and software philosophy. As I continually point out in our analysis of Android for clients, Google is a services company and all hardware and software is to Google is simply a front-end to access their services.

Android was created for the primary reason to help consumers access Google’s services on non-PC devices. Hardware for Google is just the physical object needed to run the software that is designed to access Google’s services.

Google starts with a services mindset and philosophy then works backwards on how best to make those services as broadly accessible as possible.

Google is also an engineering company and engineering companies historically struggle with making innovations accessible to tech lay-people.

With all of that context, what Google has done with Android is impressive. Those who get excited about technology for technology sake get very excited about Android. Google and Android engineers regularly show some very visionary and perhaps “ahead-of-their-time-technologies.”

This is not to say that tech lay-people can’t use Android. Many do, however, I would argue that those who have a tendency to tinker, customize, and tweak their hardware themselves, get the most excited about Android.

Android’s challenge is to take many of these forward thinking things like, face recognition, fully customizable UI, flexible widgets, Android Beam (features found in Ice Cream Sandwich), etc, easier and compelling for every day people to use.

The iOS Philosophy
Apple on the other hand is a software company, who also cares deeply about making their own hardware. Apple is on the cusp of adding robust services to their ecosystem but unlike Google they approach everything as a hardware and software company not a services company. Services to Apple are a means where to Google services is the ends.

To Apple, making innovations accessible to the masses is the underlying theme of all their hardware, software and now services philosophies. This is why they may not always be first with certain features but it is clear that if they don’t offer something the market wants out of the gate they will certainly add it and make it simple to use.

Apple’s target with their products is those to whom technology is mostly foreign. Meaning not a core and central part of their every day lives. This is why when they release new products they only focus on certain features. The features they focus on solve tangible and every day needs and strike emotional chords with consumers.

For example, when they launched the iPhone 4, they could have touted any number of features, instead they just demoed FaceTime and that was enough. It spoke for itself and showed consumers the value of the latest feature.

Apple’s goal is to make technologists out of people who never cared about technology before. Their desire is to provide these consumers with sophisticated solutions that are extremely simple to use. I can’t stress how difficult this is but it is something Apple does extremely well.

As I stated in the beginning, these two approaches represent just that–two different approaches. To each his own is the critical point I want to make.

I am in the privileged position to get to provide opinion and analysis on all the platforms on the market. To some consumers where I influence buying cycles, like friends and family, I am comfortable recommending Android devices; to others, I recommend iOS.

Where this really gets interesting is with the generations who grow up with technology, some call them “Digital Natives.” I watch my kids, for instance, who are perfectly comfortable jumping back and forth between my iOS and my Android devices.

This next generation will grow up incredibly technical and tech savvy. Because of that, their demands and expectation of next generation personal computers will far exceed anything we can imagine today.

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The Era of Personal Computing

I have adopted a philosophy in my analysis over the past few years where I distinguish between personal computing and personalized computing.

In a post a few months ago, I wrote about these differences and pointed out that because of the differences in personal and personalized computing the Post PC Era will happen in two different stages.

The first stage is personalized computing. In this era, the one we are currently in, all of our personal computing devices are personalized by us. What I mean by this is we take the time to personalize the devices with our personal content, apps, preferences, interests, etc. In reality, however, how personal are these devices? They don’t actually know anything about us we just simply use them to get jobs done. We customize them and they contain our personal content but they really aren’t that personal.

However in this next phase, the era of personal computing, things may actually get very interesting. In this era our devices will actually start to learn things about us and in the process become truly personal. Our most personal devices will learn our interests, schedule, preferences, habits, personality, etc. I know it sounds a bit scary but that is where we will inevitably end up.

I believe Apple’s latest feature–Siri–demonstrates this future reality of personal computing. As Tim pointed out in his article yesterday, Siri and the underlying artificial intelligence engine, will learn key things about our unique tastes, interests, and more and over time become even more useful as a personal assistant.

What is absolutely central for this personal computing era to become reality is we have to allow our devices to get to know us. Perhaps more specifically we have to trust our devices or the underlying company providing us the personal computing experience.

John Gruber points this very point out in a post with some comments from Ed Wrenbeck, former lead developer of Siri.

In an interview with VectorForm Labs Ed Wrenbeck states:

“For Siri to be really effective, it has to learn a great deal about the user. If it knows where you work and where you live and what kind of places you like to go, it can really start to tailor itself as it becomes an expert on you. This requires a great deal of trust in the institution collecting this data. Siri didn’t have this, but Apple has earned a very high level of trust from its customers.”

In the era of personal computing we will get beyond personalizing our devices and instead enter the era where they truly become personal to us because of their ability to know, learn, and be trained about who we are and our unique interests and needs.

There are many great examples of this in Sci-Fi movies and novels but perhaps my favorite, because it is fresh, is how Tony Stark interacted with Jarvis in the Iron Man movies. Jarvis is what Tony Stark named his personal computer and as you can tell from his interactions in the movie, Jarvis knew quite a bit of the intimate details of Tony Stark.

Jarvis was a personal computer, one that took on an entirely new way to be useful because of the artificial intelligence that was built on top of incredible computing power.

Of course, this all sounds extremely futuristic but it will be the basis of what takes us from having to manually personalize our devices, to a future where our devices truly become personal and indispensable parts of our lives.

iTunes and Consumer Share of Wallet

I recently read an interesting article in the Harvard Business Review which proposed a theory that consumers give more share of their wallet (money) to brands they rank highly.

The premise of the article was that companies need to focus more on their brand identity in the minds of consumers if they want to command more share of consumers wallets.

I’ve had a similar theory but it wasn’t related to brand loyalty, although that makes sense, but more directly tied to a brands ability to be sticky.

Granted, I am looking at this as it relates to the technology industry where the HBR article was focusing more broadly.

From a technology industry perspective, companies who have more sticky solutions have a higher chance of maintaining or growing consumer share of wallet.

To test my theory I researched and then plotted out my own annual spending in iTunes. I figured I was as good a test as any since I have used iTunes since the beginning in 2003. And I believe Apple has created one of the more sticky ecosystems on the market.

Take a look at the chart below which we will call exhibit A.
 

 
If you notice my annual spending in iTunes either stayed steady or grew on an annual basis. As Apple introduced more products into their ecosystem both in terms of hardware, new forms of media, and then apps, my iTunes spending went up significantly.

Once I was committed to the Apple ecosystem and as Apple provided me with more value as a part of that ecosystem; they continued to get a steady share of my wallet.

There are some essential points to understand as a part of this theory. First of all, I may very well spend more than most people in iTunes but I would still argue that annual iTunes spends would stay steady or grow the longer a consumer is in the Apple ecosystem.

Second, the more products or “touch points” in that ecosystem either owned by a consumer, or by a family, contributes to the ecosystem loyalty as well as the overall opportunities to spend money.

Of course brand is important and plays a role but perhaps not quite as much as the HBR article points out–or at least not as much in realm of tech.

For example, if brand was directly tied to share of wallet then Google or Microsoft for that matter would have a larger share of wallet. I use those brands as an example because they are both ranked on the top 10 list of brands, both ahead of Apple according to InterBrand.

I would argue, more important than brand in the mind of consumers is brand trust when it comes to share of wallet–especially in tech.

The most important observation about this theory of brand loyalty equalling share of wallet in my test is that the obvious first step is to get consumers into the brand ecosystem so that brand can compete for share of wallet.

In retail for example the common saying is “the first step is to get the consumer in the door.”

For Apple they got consumers in the door with the iPod,then iPhone, iPad etc. This strategy continues as they offer more products at attractive price points which continue to get consumers into Apple’s door and more importantly into Apple’s ecosystem.

Amazon has a similar strategy with the Kindle and now the Kindle Fire. These products, or screens, are the things that get consumers into the door and into the Amazon ecosystem. Amazon wants to provide as many touch points as possible for consumers to utilize their retail services.

Similar to my iTunes spend history I would be willing to bet that folks who examine their Amazon history find a similar pattern. Namely that the longer you are committed to that service the more your annual spending goes up.

In both my examples Amazon and Apple have a strong share of consumer wallet. Companies like Google and Facebook and others who want to drive commerce are having a harder time–even though they have strong brand rank in the minds of consumers. This is because they lack consumer trust.

Companies who want to own a larger share of wallet need to create compelling products that get consumers into their door. Continue to create a trusted brand experience with their products, offer a vast array of products or services, is a sound strategy to keep consumers loyal to their ecosystems.

When Markets Are No Longer Price Sensitive

There will always be a customer who only wants the lowest cost products. That truth however, does not represent the whole market. Price, for the majority of consumers, is not the only driving purchasing force.

If in every market the lowest cost product was all consumers wanted–then we would all be driving Toyota Corollas.

The fact of the matter is, in markets where consumers are mature low-cost is only attractive to a segment of the market but not the market as a whole.

Keep in mind, I am making a distinction between mature markets and mature consumers. Mature markets are one where a category or product is no longer new and well understood. Mature consumers are ones who have been shopping long enough to have pre-determined needs, wants, and desires on a variety of goods.

Developed markets for the most part have mature consumers. Because of that fact, new product categories will mature faster than in emerging markets. So for example, smart phones are still largely an immature market. Many consumers still do not own a smart phone. This market however, is maturing rapidly because we have mature consumers. Interestingly, they are not just buying the cheapest smart phones on the market.

Emerging markets consist of consumers who are maturing, still developing their needs, wants, and desires for a variety of goods. This is because the big trend in emerging markets is the rising middle class. The rising middle class has not historically had much disposable income prior to their “rising”; therefore, they were not generally consumers of a large variety of goods.

Since they have attained more disposable income they have began to consume more goods and are therefore, maturing as a consumer learning what their needs, wants, and desires are with a variety of goods.

I belive that in a market where consumers themselves are maturing price is more important. You need to first consume goods for the first time before you refine your tastes and begin to appreciate differentiation. Therefore, low price products help these consumers consume the goods because of the lower barrier to consume said good.

PCs, smart phones, and tablets are a good example of this in emerging markets. Lower costs will help these consumers first experience these products and learn what they like and don’t like. As they flesh out their needs, wants, and desires for these products they will then begin to shop with a more keen eye. When that happens, differentiation or products designed for a market segment becomes the strategy–not low-cost.

In a number of books I’ve read on the subject the observation is continually made that when a market matures it fragments. The below slide shows how this happened within the automobiles market.

 
Consumers first owned a car that was of lower cost. As they continued to own more cars they began to mature as a consumer of automobiles and eventually decided they wanted a minivan, truck, sports, or economy car. They made this decision based on their needs, wants, and desires and then chose the appropriate product. To re-emphasize my point, this decision was not based on price alone but on needs, wants, and/or desires.

All of this has a profound impact on how consumer technology companies orient themselves going forward. The reality is some markets are price sensitive and some are not. Companies need to be wise to understand which markets to enter and have an appropriate strategy.

The bottom line is developing a product to fill a consumers need, wants, and desire is a better strategy than trying to be the low-cost leader.

Does Google Need a New Strategy with Android?

 
I believe Google is coming to a cross roads with Android. The reality is that we live in a software world. Hardware design is nice but software is what makes our devices useful.

Steve Wildstrom wrote an article asking the question about whether Android was a mistake for Google. I don’t believe Android is or was a mistake for Google, however I do believe they need a more hardware centric strategy.

Several things have happened and are continuing to happen around Android that leads me to believe a better strategy can be employed.

The first is that companies, Amazon namely, have taken what Google created as a base OS in Android and fully customized it stripping all benefit to Google.

Originally Google encouraged this idea of customization of Android for vendor differentiation. However things changed as Android began to become more popular and enginners realized scaling a truly open platform would be difficult.

At the turning point for Android, which I believe was 2.2 or Froyo, Google began to attempt to control Android more tightly thus making it harder for hardware partners to customize Android and differentiate their products. Google began to promote and encourage a non-customized version of Android to their hardware partners. Their Nexus line of devices are the evidence of what Google wants to see happen with Android hardware. Namely that the hardware is good but the software all looks the same.

Those who make Android hardware whether they be tablets or smart phones are longing for Google to help them differentiate their hardware. Because of the many restrictions Google is putting on Android devices get lost in the sea of sameness.

Because of that vendors like Amazon, or entire countries like China, have taken the basic Android code and made it their own completely separate from Google’s version of Android.

This is important because Google created Android as a software front end to their services. When a company takes the basic code but strips it from using Google’s services, the custom implemenation loses all benefit to Google.

The other market development that could impact Android is vendors seeking their own software solutions. An example of this is what Intel and Samsung are backing with Tizen. I am skeptical of Tizen however the fact that a key Android partner, like Samsung, is putting resources into a solution other than Android is not a good sign.

So What Should Google Do?
What Google needs to do, and I think they need some serious help to do this, is to figure out how they can work with their hardware partners to differentiate their Android solutions but still utilize Google services.

Now in the case of Amazon even if Google had an Android differentiation startegy I don’t think Amazon would have used it. Amazon is also a services company.

The rest of the market however would benefit from a Android strategy that allowed for differentiation but also still tightly integrated Google’s services. I don’t believe we will see this kind of solution in Ice Cream Sandwich, where Google allows for heavy customization. This is a real issue that Google needs to address with coming versions.

I’ve wrote extensively about product differentation and I will continue to but what we have right now with Android is the sea of sameness. That needs to change if companies want to stay in business.

This same problem exists for Microsoft but that is for another article.

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Dear Industry: Dare to Differentiate

Dear Industry: We Owe Steve Jobs a Standing Ovation

Last night we learned of the passing of Steve Jobs, one of the most visionary and innovative leaders this industry has ever and perhaps will ever see. Because of all that Steve Jobs has meant to this industry we thought it appropriate to have our second installment in the Dear Industry series take a quick look at how much this industry owes to this master innovator.

It would be hard to imagine what this industry would have looked like had Steve Jobs and Steve Wozniak never dreamed up their vision for personal computing.

Steve was the only tech executive who had an eye for design and understood technology then married them together to create some of the most iconic products we have today.

Steve Jobs understood that innovation isn’t always about pure invention. Whether or not he invented a particular technology or took what existed and made it better, more useful and more valuable, he was constantly innovating.

He was the ultimate super user or super consumer. He had an un-matched discerning sense of what people wanted with technology before they knew they wanted it. I call this the forward thinking experience and Steve Jobs was an expert at it.

With his vision and leadership Apple never reacted to the trends they always set them.

He was the chief visionary, not just of Apple but of the entire technology industry. His products have challenged and inspired others to be better. He put massive pressure on any and all competitors and challenged them to raise the bar.

He helped create this industry and as a result created value with nearly everything he touched. His innovations made new industries, companies, jobs and more possible.

A great many people employed in the technology industry owe their careers to Steve Jobs.

If we had a technology hall of fame he would be a first ballot inductee and he would of course receive a well deserved standing ovation from the entire technology industry.

Image Credit: Jonathan Mak

Consumers Will Be Delighted With the iPhone 4S

 
I’ve been reading and digesting much of the post Apple event news where they introduced their newest iPhone, the iPhone 4S. I’ve attended every major Apple product launch event since 2003. The last few years the media hype and anticipation around Apple product launches has reached astronomic proportions.

Even today post the event I am not surprised to see “disappointed” and “underwhelmed” in the headlines. It seems as though at every launch event for the past few years the question of “did they do enough” gets asked of me by the media.

The media, luckily for Apple, is not Apple’s target customer. In fact at the launch event Apple showed some very telling slides showing statistics that highlighted how much market share in every major personal electronics category is still left for Apple to gain. These slides tell the story of how Apple thinks about the market as a whole and how all their decisions are geared to grow their market share using product strategies that work.

When I look at the Apple’s current iPhone lineup with the 3GS being free with a new contract or the iPhone 4 being $99, I am convinced that now is as good of time as any for consumers to jump into the Apple ecosystem. However the 4S is now the flagship of the iPhone lineup.

The iPhone 4 is arguably the best designed handset in the cellular industry. In my opinion no handset on the market comes close to the iPhone 4 design. For this reason Apple didn’t need to change the design. In fact earlier in the year I argued that Apple didn’t even need to release a new iPhone this year and they would have still stayed the number one smart phone manufacturer. The iPhone 4 is that good so why fix what isn’t broken.

However they did improve on it and as a matter of fact they improved on it all the ways that make it even more useful than its predecessor. They made if faster both in terms of network speed and core performance. They gave it 7x better graphics which will make it one of the most impressive mobile gaming platforms graphics wise to date. They engineered a better antennae to make the phone download and upload data faster as well as deliver better sound call quality. They made the camera significantly better. They made a bunch of improvements that alone make the device attractive.

Apple is still attracting new iPhone customers at alarming rates. By offering the 3GS for free and the already amazing iPhone 4 for $99 and the iPhone 4S starting at $199 they have a very strong holiday lineup.

Design is important but it is only one part of the equation when consumers make buying decisions. The iPhone’s are still the leading objects of desire in the industry for the mass market.

One thing that seems to get left out, that I think is a very powerful point, is that by not changing the iPhone design new customers or those who upgrade will be able to tap into the already vast iPhone 4 accessory ecosystem. Consumers who buy the iPhone 4 or 4S will immediately find a plethora of accessories. This is a very attractive proposition.

Apple’s current tagline for the iPhone 4S is “Picking up where amazing left off.” That is fitting since they are still leading in the realm of handset design. The media may have expected more and the media may be disappointed however I am confident that actual consumers will be delighted with the iPhone 4S. And really that is all that matters to Apple.

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2 Things I Want in the iPhone 5

 
I want to dream for one second about the only two things I would love to see in the iPhone 5. After that I want to add some bigger picture perspective.

A Bigger Screen
Studying Apple for as long as I have I know they make very intentional decisions with hardware. It is for that reason that they choose a 3.5 inch display for all their iPhones. In our talks with app developers it is the consistency in screen size that they appreciate in Apple’s ecosystem. Namely because they do not need to worry about variation in hardware or screen size when they create software.

That being said I would love a 4″ screen on my iPhone 5. I have used a number of 4″ screen devices and I think it is or is close to the perfect size for a smart phone.

I don’t believe adding half an inch to the screen size would have any significant impact on any of the existing iPhone apps, especially if developers have created universal apps.

Voice to Text Speech Recognition
The only reason this feature does not exist today in iOS is because the technology is not perfect. As Steve Jobs has famously repeated when they launch new groundbreaking features “it just works.”

The challenge with voice to text speech recognition is that it just works 70% of the time. In that 70% of accuracy it needs a nearly perfectly quiet environment. My guess is that Apple would want a higher accuracy rating as well as some new technology that doesn’t require near silence to work correctly.

These however are all innovations in voice to text Apple is capable of and hopefully working on. They do have some minimal voice command technology in current iOS software but I’d love to see full voice to text supported.

The Bigger Picture
Now if you are paying attention to the world of smart phones you will know that both of those features I hope for are available in the Android ecosystem of hardware. This leads to my bigger picture point that hardware is not the only buying decision going on in the minds of consumers. We live in a world where the experience with the software is beginning to play a larger role in the decision-making process.

Most consumers do not shop on specs.

The hardware is important but we live in a software world. Regardless of what Apple releases hardware wise tomorrow I will go out on a limb now and guarantee it will be the sexiest smart phone in existence. This is because Apple’s hardware design passion is second to none. This is why even if my two feature requests don’t come to the iPhone 5, I will not be disappointed.

However as the saying goes within Apple “those who serious about software should also be serious about hardware.” As I will point out in a column later this week Apple is really a software company.

Putting this all in perspective the user experience, the apps, the Apple ecosystem are all reasons why I consciously choose Apple products. Even though there are devices on the market with features that I do desire, I am willing to make the trade-off. Primarily because those few features do not outweigh all the other areas where the Apple experience is superior – in my opinion.

What if Amazon Bought webOS?

MobileBeat has an interesting article this morning reporting that Amazon is apparently in talks to buy webOS from HP.

Credit MobileBeat
Although this deal could make a fair bit of sense I don’t see the immediate need for Amazon. If they were to purchase webOS it would obviously be fully own the OS layer for their hardware and as I’ve speculated their hardware partners. Amazon however has customized Android to a degree that is basically their own custom operating system. So what they would get in webOS they basically already have with their fork of Android. Android has a thriving developer community already that can easily tap into the Amazon tablet where webOS is still attempting to gain traction with developers.

It is interesting though, as MobileBeat is reporting, that Jon Rubenstein is on Amazon’s board. If HP truly was considering selling of the webOS technology Jon would know and be in a position to find it a good home, in which Amazon would be a good home.

If HP is wanting to sell of webOS I agree with James Kendrick at ZDNET that HTC should buy it. So if this rumor is true, I hope it is not a back room deal but one that HP offers to others in the market who could also benefit greatly from webOS.

If Amazon were to acquire webOS then it would solidify in my mind that they intend to license or give away their OS layers so other hardware manufacturers can make hardware build around Amazon’s services.

The Sony NEX-C3 is an Amazing Camera

I recently attended Sony’s annual analyst day where they gave us their new NEX-C3 digital camera. The NEX-C3 fits into a category that the industry is calling mirror-less interchangeable lens cameras.

The only real difference between these cameras and DSLR’s are mirrors and a view finder. I was a big DSLR fan but I am now converted to the mirror-less interchangeable lens cameras.

I am more of a hobby photographer than a serious one but I can appreciate innovation in this category. I have owned many different types of cameras but I have to say this Sony NEX-C3 is the most amazing. Sony offers it at a competitive DSLR price of $599 including the 18-55 lens.

There are two features I want to highlight. One is more general and the other is unique to Sony and truly sets this camera apart from the pack.

Real Time Image Post Processing
One of the things I appreciate about using my smart phone as a camera is all the apps that allow for creative on the fly image post processing. I am capable of doing many of the same effects in Photoshop however I am to lazy to do it as often as i’d like.

The Sony NEX-C3 brings a number of on the fly image effect options. Because these cameras don’t have view finders you have to look through, you can see all your image effects in real time with the LCD screen. This way you can make sure you get the shot you want.

This is a feature a number of these cameras, point an shoots and now even DSLR’s are packing but Sony has created a very elegant and simple UI to access and use these on the fly effects.

Here are a few examples of the on the fly effects I thought were extremely useful.

Color Pop

Isolate R,G,B Or Yellow

Auto Panarama

The XMOR Advantage
One thing I learned that I found interesting was that megapixels are becoming less important in this category and instead the focus has turned to the image sensor.

The trend going forward is to pack the largest image sensor into the smallest package. Sony with this camera using their EXMOR image sensor has the lead in this race.

Although that is interesting, what is more interesting and in my opinion amazing is what a quality image sensor will get you. The sensor in the NEX-C3 is 13 times the area of the typical image sensor which results in delivering an exceptional combination of high resolution, high sensitivity and gorgeous, blurred backgrounds. Most other cameras in this category use a micro 4/3rds sensor and Sony’s is a bit larger.

Besides image quality the biggest thing you get is superior pictures in low light situations.

Capturing a quality image in low light, like dimly lit rooms or at night is notoriously difficult. It is something typically reserved for the pro’s.

This single experience of being able to use this camera to take amazing pictures in low light – without a flash or a tripod – is what blows me away.

Besides the EXMOR image sensor, Sony has also added some key software to help capture low light images.

The one in particular – that I am going to use like crazy – is a setting in the camera’s “Scene Mode” menu called Hand-Held Twilight Mode. This setting exists solely to take photos at night without a tripod.

What this setting does is take a burst of 6 images very quickly. The camera then blends all 6 images together to produce amazing photos at night without the need of a tripod. Below are a few examples all taken with no tripod.

     
Camera technology has come a long way. As I stated at the beginning these mirror-less interchangeable lens cameras have made a DSLR convert out of me.

The real question is when will this kind of image sensor technology be available in smart phones? As much as I like this camera i’d love to have many of the features in my smart phone.

This is an interesting category to watch. These cameras still pack a great deal more technology than a smart phone can and because of the size they pack a lot of technology in a very small package.