Alexa, What Did Amazon Announce This Week?

I was in Seattle earlier this week for an Amazon event that over the space of an hour covered over 70 new devices, customer features, and developer tools across Alexa, Echo, and Fire TV.  Looking at the announcements overall I thought Amazon was trying to do a few things:

  • Appeal to both early tech adopters and mainstream consumers.
    • The needs of early adopters, who bought into the Alexa ecosystem and the voice-first UI early, are focused more in growing the number of products they own, as well as increasing the number of engagement points they have with them through skills. These are also users who have become highly dependent on Alexa, who now can operate even if the internet is down minimizing any negative feelings or frustration users might feel when they could not operate their smart home without an internet connection.

An iPhone for Everyone

Two product families were on stage at the Steve Jobs’ Theater. A lot had been revealed in spoilers over the weeks preceding the event, but while we might have known names and sizes, we knew very little about what really makes up the essence of these new devices. By the time Phil Schiller finished introducing the new iPhone Xr, it was clear that the silicon inside these devices is what makes the iPhone X family unique and what Apple is betting on, to continue to differentiate going forward. Of course, hardware improvements will continue, but the A12 Bionic and the Neural Engine genuinely are the cornerstones of these products.

Reading into the iPhone Xr

The iPhone Xr is Apple’s third attempt to deliver a more affordable iPhone, and their approach is entirely different from the past. With the iPhone 5c and the iPhone SE, Apple produced a new shell around an existing iPhone “gut” for lack of a better word. The final result was somewhat more affordable but also felt like a buyer was compromising on his or her experience to hit the price point that was right for them. With the iPhone Xr, it feels like buyers will make little to no compromise because Apple redesigned some of the features to contain costs but left the experience intact.

Nobody knows what the r in iPhone Xr stands for, but I like to think that it just signifies that it is a close experience to the iPhone Xs. Apple made sure that the engine powering the iPhone Xr was the same as the other two X models: the A12 Bionic chip. Apple also included the TrueDepth Camera at the front that enables FaceID, Animojis, and AR. Basically, Apple made sure that buyers would have no compromise on security, a more modern, cleaner while richer UI, and a new class of apps designed around AR. For other features that would have driven up cost, like a dual camera system at the back and the OLED screen, Apple delivered something different. For the camera, Apple is using a single camera and takes advantage of the new Neural Engine in the A12 Bionic to enable portrait mode, the most significant driver around the dual camera uptake. There is a small compromise here as portrait mode is supposed to work on humans only, at least for now. For the screen, Apple improved its LCD resolution to deliver a Liquid Retina Display at 326 pixels per inch, which is the same as on the iPhone 8.

The size of the iPhone Xr is also interesting, as it sits in between the iPhone Xs and the iPhone Xs Max. This might be a big jump for users upgrading from an iPhone 5c and SE, but if this is their primary computing device, I think they would quickly find that the larger display is well worth getting past the initial awkwardness of holding a bigger phone. This also allows Apple to deliver two products supporting dual-SIM in China, where both SIMs have to be physical.

Lastly the colors. The iPhone 5c was not very successful, but the colors were certainly something that people appreciated. Maybe the mistake Apple made back then was the material, which resulted in making the phone look cheap. This is not the case with the iPhone Xr and its glass back that merges fun, modern color with elegance. Apple refrains from naming specific target audiences, but I would think GenZ and younger Millennials are a pretty good audience for the iPhone Xr.

A Clean Portfolio

Some people after the keynote seemed concerned that the iPhone portfolio was now confusing. I actually think sizes and pricing will guide buyers quite easily.

With the launch of the iPhone Xs, production of the iPhone X was halted, which means that buyers might be able to still find a few around until units in the channels run out. After that, however, they will have to turn to the iPhone Xs or the larger Xs Max. Eliminating the iPhone X, helped Apple keep the same price point for the iPhone Xs, as well as only increase the iPhone Xs Max by $100. Leaving the iPhone X in the lineup, as in previous years, would have complicated the pricing of both the iPhone Xs and the Xr, which would have likely lead to confusing as well as cannibalization.

To get some perspective of what this portfolio means, it is worth knowing that roughly 40% of the iPhone user base in the US is on an iPhone model older than an iPhone 7. Some people might be disappointed that the iPhone SE and the iPhone 6S are no longer available, but even though iOS12 has been designed to be kind to older iPhone versions, I think this is the right time to get users to step up. Apple is prepping the installed base to benefit from as many services as possible and to do that users must upgrade.

With an iPhone 7 running on iOS12 priced at $449, it is hard to say that Apple does not have a good option for users who are more financially constraint. As a comparison, today on, you can find an unlocked Samsung Galaxy S7 for around $290 to $450. More likely than not those devices are running Android 6.0 and are upgradable, with some speed degradation, to Android 8.0. There are brand new flagship phones from up-and-coming names like OnePlus that are priced around $500, but more pragmatic buyers tend to rely more on brands they are familiar with, meaning that we might see churn from Android to iOS pick up a little.

Apple Watch Has Grown Up

There is so much to say about Apple Watch that I will be writing a separate column. Here I want to point out that I firmly believe the combination of the new Series 4 with its redesign and focus on health combined with the reduced price of Series 3 will cement Apple’s leadership in the smartwatch market. Series 4 will drive the first big replacement cycle, while Series 3 might attract users who are still a little hesitant, and therefore might want to limit their investment.

In many ways, Apple Watch was even more exciting than the iPhone for me, because, like the iPhone X last year, we see the promise of the future of the segment materialize.

You Cannot Dismiss the Power of Silicon

Of course, some said that what we saw on Wednesday was incremental and not exciting. After all, this is “an s year.” True, the iPhone Xs looks the same as its predecessor. But this year it is not just about being faster. Maybe this year the “s” in the iPhone name should stand for silicon and the neural network that makes these devices not just faster but much smarter. It is hard to explain to a layperson what processing 5 trillion operations per second means. But as new apps taking advantage of the improved machine learning platform will start to come out, when the quality of the pictures taken will be compared to that of other models, dismissing this year’s models as just “an s year” will seem highly inaccurate.

News You Might Have Missed: Week of Sept 7th, 2018

Evernote’s Troubles

In the past month, Evernote lost its Chief Technology Officer, Anirban Kundu, its Chief Financial Officer Vincent Toolan and its head of HR Michelle Wagner. As it’s getting ready to raise more money it slashed its premium subscription from $70 to $42 a year.

What Current iPhone X Users Tell Us About the Opportunity for the New Models

We are exactly a week away from the Apple September event which calls us to gather together in Cupertino to see what is to expected to be the next iPhone generation.

As we get closer to the event rumors and leaks multiply. A consistent expectation seems to be that Apple will remove the home button, also known as Touch ID from across the new iPhone models. There has been quite a bit of a debate on whether or not Apple would be wise to do so, as people love Touch ID and there are concerns about the learning curve of the new UI centered around Face ID.

I was a big fan of Touch ID and I must admit there was some trepidation on my part when the change was announced. At the end of the day when things work, accepting change is a little harder than when change comes to replace something you hated.  I can tell you that having used an iPhone X as my main smartphone since its launch I have not regretted the move from Touch ID to Face ID. Except for a few occasions when due to poor light conditions or my inability to open my eyes properly, mostly first thing in the morning, Face ID just works. From picking up to swiping up, all is one fluid movement that makes you feel like your phone was not even locked.

Given, a sample of one does not make for good research we, at Creative Strategies, had reached out, back in March 2018, to 955 consumers in the US, 680 of which were iPhone X owners.

Face ID vs. Touch ID

We asked how satisfied users were with some key features of the iPhone X. Satisfaction runs pretty high across features with the exception of Siri where users were much more ambivalent. When looking at the average satisfaction the Super Retina 5.8” display ranked highest at 1.87 (on a -2 to 2 range), followed by the speed of the iPhone X (1.85) and the looks of the iPhone X (1.84). The new Swipe-based gesture interface scored 1.70 and Face ID scored 1.53.

When looking at the features individually, 79% of the sample was very satisfied with the Swipe-based gesture UI and 65% was very satisfied with Face ID. The ambivalence on Siri comes across clearly when looking at how the sample was distributed: 33% was somewhat satisfied, 27% was neither satisfied nor dissatisfied and another 21% was somewhat dissatisfied. While this is not great for Apple it is not all bad news either. Users clearly don’t see Siri as a purchase driver or positive differentiator, but they also do not see it as detrimental to their overall experience.

Satisfaction is a very good indicator, but we really wanted to get to how users felt about some of the changes implemented on the iPhone X, so we asked if they agreed or disagreed with some very specific statements.

70% of the panel strongly disagrees that they “miss the home button from previous iPhone models”. Another 14% said they somewhat disagree.

Because some people think differently about the Home Button and Touch ID we wanted to make sure we asked about both. Some users think of Touch ID as an enabler for Apple Pay and authentication across the board, while they think of the Home Button as the “control center” to navigate the iPhone. We asked whether they agreed or disagree with the statement “ I miss having Touch ID on my iPhone”. Here while the overall sentiment remains positive it was a little more muted with 50% saying they strongly disagreed and 21% saying they somewhat disagree.

When asked if “adapting to the new swipe-based gesture interface has been easy” 78% strongly agreed with the statement and another 17% somewhat agreed. While this panel was skewed towards early adopters the results ,bode well for a more mainstream userbase as it would be safe to assume that the learning curve of the new UI would be moderate at worst for them.


Another highly debated point when it comes to iPhone X has been the price. Apple’s last two earnings calls have made it clear that price has not been a hindering factor in adoption, as the iPhone X has been the most sold model for two quarters in a row. I have been arguing for a while that users are prepared to pay for something that gives them a high-return and considering the time users spend on smartphones and the wide range of tasks they perform the investment is certainly worthwhile. When we asked whether or not our panel of iPhone X users agreed with the statement “The iPhone X is worth the price I paid for it” 52% said they strongly agreed and another 33% said they somewhat agreed. Being expensive and being worth the price are not mutually exclusive and I think the attention is usually only on the cost rather than the return on the investment.

But the question has now really moved to “how much higher can Apple go?” and with the rumors of a bigger iPhone X-like iPhone model chances are that the screen will not be the only thing being bigger. When we asked our panel of iPhone X users about paying more for an iPhone X with a larger screen the intention might not help us predict the future as much as we would want. When asked if they agreed with the statement “I would have paid even more for an iPhone X with a larger screen size had it been available” only 5% strongly agreed and another 14% said they somewhat agree. The main reason why I am saying that this data point might be somewhat inconclusive is that the reasons why users would have not agreed with the statement might have had more to do with their satisfaction with the current screen size, which as we saw was extremely high, than with their willingness to pay more. In other words, they do not put a higher value on a larger screen.

Overall this dataset shows the opportunity that the new iPhone models will have is big and that the overall combined portfolio Apple will have by the end of the September 12 event will be the strongest yet.

News You Might Have Missed: Week of August 31, 2018

Google Assistant is Now Bilingual

From Thursday this week, Google Assistant is bilingual. Users can jump between two different languages across queries, without having to go back to their language settings. Once users select two of the supported languages, English, Spanish, French, German, Italian and Japanese, from there on out they can speak to the Assistant in either language and the Assistant will respond in kind. Previously, users had to choose a single language setting for the Assistant, changing their settings each time they wanted to use another language, but now, it’s a simple, hands-free experience for multilingual households. Getting this to work, however, was not a simple, said Google. In fact, this was a multi-year effort that involved solving a lot of problems that can be grouped in three areas: Identifying Multiple Languages, Understanding Multiple Languages and Optimizing Multilingual Recognition for Google Assistant users. Google said to be working to teach the Google Assistant how to process more than two languages simultaneously.

Could Gen Z Pass on College?

As many of you know, I have a ten-year-old girl who is about to embark on the exciting adventure of homeschooling. Education is very important to us or maybe I should say knowledge is. Knowledge on a broad list of topics driven by her interest and not only dictated by what a particular curriculum decided it was good for her to know at a given age. Knowledge that treats facts as facts, but does not tell the story only from one viewpoint, one voice. Knowledge and call it street’s smart that will get her ready for life. While she is still a long way away from college, her dad and I have been discussing the pros and cons of sending her to college. For the longest time, college was the way you prepared your kids to the work world, it was the last step you took in that journey of enlightenment before you became an adult. Over the past couple of years, however, some, including me, have started to question whether the high cost of college education is worthwhile.

College Education has become a Consumer Product

I recently watched a Ted Talk by Professor Sanjay Samuel who very eloquently explained that college education has become unaffordable for most if not all American families. The combined debt that students in America hold amounts to over $1 trillion dollars and all in the name of securing a better-paid job. Education is an investment in a better future, they tell us and we tell our kids! What it has become though, is a way to categories future workers so companies can better assess them before hiring. Education is a consumer product where teachers are service providers, students are consumers and subject matter are content. The profit is with the loan companies but the return on investment for students is questionable. Education is being upsold, he says, so that college is the new high school. The question boils down to whether or not the higher pay one gets at the end of a college degree is worth the amount of debt that got you there and the years in lost wages. Economists say it is if you complete your degree, but Professor Samuel argues that the only reason that this is the case is that wages for people with only a high-school degree have been cut time and time again.

The solution to this problem according to professor Samuel is for parents and students to treat higher education like a consumer product, in the same way, the ones profiting from it have been doing for years. What if there were an app that could calculate for you an income-based tuition linking your future income to how much your tuition will cost? Tuitions, after all,  should not all be the same for all degrees. An engineering degree uses much more resources than a philosophy degree but the cost of tuitions is the same even if the engineering students will earn considerably more than the philosophy ones.

Supply and Demand

The solution to the education problem Professor Samuel presents is very intriguing and I for one, as a parent, would love to be able to help my daughter figure out her investment. With changes driven by technologies such as Artificial Intelligence and Machine Learning the “value” associated with the degrees might differ in the future. Sadly, though, education has become such a business that, as it is often the case when there is too much money at stake, things change slowly.

Companies are breaking with Past Requirements

Continuing the consumer market analogy, another problem I see with education is one of supply and demand. For many years, both here in the US and in Europe, corporations have been looking at degrees as the first pass for sieving through candidates. So to meet this demand of candidates with higher degrees, supply had to step up and more and more students took on college, masters, and doctorates. This created too much supply which caused many to be underemployed in their profession vis a vis the degreed they held.

When discussing our daughter’s future with my husband, this circle of supply and demand was my biggest concern in giving college a miss. What if when our daughter applied for a job she was the only one without a degree?

Fortunately, for my daughter and her Gen Z pals, things are changing and companies are breaking with past requirements. Recently, job-search site Glassdoor compiled a list of 15 top employers that have said to no longer require applicants to have a college degree. On that list, there are tech companies Google, Apple, IBM, retailers Home Depot, Lowe’s, Whole Foods and financial services Back of America and Ernst & Young.

Change might bring Less Dept, more Diversity, better Skills

The list of jobs offered by each company on this Glassdoor compilation is not as comprehensive as I would have hoped but it is hopefully the first step. Considering candidates with hands-on experience through boot-camps and vocational courses open up the opportunity to have a more diverse workplace by widening the hiring pool. Such a move is not just good for increasing diversity but also to ensure that the people you hire have the most up to date skills. Especially when it comes to technology things move so fast that your skills might be in need of a refresh by the time you end your four-year degree. Gen Z is very much a hands-on-generation already, just look at the many YouTube videos that teach how to do things from gaming to cooking. And you never know, if learning will not have to be linked to income alone, Gen Z might be so lucky to rediscover the pleasure to learn for learning’s sake, not for money’s sake.

News You Might Have Missed: Week of August 24, 2018

Apple removes Facebook’s VPN app Onavo

Apple officials told Facebook last week that Onavo violated the company’s rules on data collection by developers, and suggested last Thursday that Facebook voluntarily remove the app. Facebook said in a statement that it’s transparent with Onavo users: “We’ve always been clear when people download Onavo about the information that is collected and how it is used,” the company said. “As a developer on Apple’s platform, we follow the rules they’ve put in place.”

Apple Must Reinvent the Genius Bar

Last week @mgsiegler wrote a post about his customer experience at an Apple Store. While the issue that brought him to a store is somewhat unique, his recount of long lines and wait time despite having an appointment was not that different from what I have heard pop up as a complaint from friends who are iPhone and iPad users and one that I have experienced myself on a couple of occasions.

There was a lot in the post, but I want to focus on one point I agree with, which is that Apple has reached such a scale that makes the current customer service model unsustainable.

Big Retail Stores are not the Model

Apple knew they had to scale issue when back in 2012 they hired John Browett, chief executive of Dixons Retail, a large chain of electronics stores in the UK. Browett was replacing Ron Jonson who had left Apple to become the CEO of J.C. Penney. Before Dixon, Browett had spent eight years at Tesco, a leading UK supermarket.

Clearly, Browett brought the understanding of large retail companies to Apple. However, as I had commented at the time, the high-quality customer care Apple’s customers were used to seemed to be at odds with the poor customer service Dixon’s was renowned for.

So it was no surprise when less than a year after he joined, Browett was let go. During his time at Apple, he was said to have focused on reducing employees in the attempt to cut payroll costs as well as general spent on the upkeep of the physical stores. In short, Browett was focused on growing profitability by teaching Apple stores to “run lean” as apparently he was quoted saying. But Apple stores are not about profits!

Tim Cook took over from Browett until he hired Angela Ahrendts in December 2014. Ahrendts, who was the first woman to join Apple’s executive team in almost a decade was given responsibility for both physical and online retail. In her previous role at Burberry, Ahrendts was able to turn the brand around making it relevant to the mainstream while retaining its luxury status. The challenge was not that different at Apple, where the stores had to be able to deal with more customers while continuing to make you feel you were the only one that mattered.

It’s not about Selling

When you read Ahrendts’ bio on the Apple’s website, and you think at some of the stores that were launched under her leadership from Chicago Michigan Avenue to Milan Piazza Liberty, it is easy to see she is delivering on the promise of what Apple retail is supposed to be:

“Since joining Apple in 2014, Angela has integrated Apple’s physical and digital retail businesses to create a seamless customer experience for over a billion visitors per year with the goal of educating, inspiring, entertaining and enriching communities. Apple employees set the standard for customer service in stores and online, delivering support from highly trained Geniuses and expert advice from Creative Pros to help customers get the most out of their Apple products.”

At a recent interview at the Cannes Lions, Ahrendts reiterated much of the same, pointing out that shopping is moving to online but that buyers will still go into a physical store to finalize their purchase. Because of this retail has to evolve.

Although revenues generated by the stores are growing, I have always argued that Apple stores are much more a marketing machine for Apple than they are a revenue one. Getting people in to fully immerse themselves in what being in an Apple world feels like is not new though. Ahrendts added more of a community focus to it at a time when, more often than not, tech companies are seen as damaging the community rather than enhancing it.

Evolving Customer Care

While all this is great for Apple overall branding, it seems to get in the way of current customers going to the stores to get support. Existing customers, especially long-term customers, have been accustomed to turn up at the store with whatever problem they had and have that resolved without even the need for an appointment. This excellent customer service is a big part of why people bought Apple.

As Apple’s customer base grew so did the need for support, a need that can no longer be fulfilled in the way it has been over the years. As Ahrendts points out, retail must evolve, and I would add that customer care must evolve too.

The Genius Bar which for the longest time has been the pride and joy of Apple can no longer be the first option for customer support. Apple’s website encourages customers to get support via phone, chat, email, even Twitter and of course there are authorized service providers. But come on, if I buy Apple, I want Apple to take care of me, right? I want to get to a store and feel I get the attention, love, and care I feel I pay for being a “special customer.”

It seems to me that Apple should come up with something that is as caring and personal of an experience than it was back in the day when I went into a store and met with my Genius Bar guru who knew everything about me and my device.

Today, through technology, Apple can deliver the same “boutique feel” thanks to a device that knows me and knows itself. Machine learning and artificial intelligence could help with self-diagnose, and an app or even Siri could walk/talk a user through some basic testing that would help assess whether I can fix it, need to go into a store or mail my device in. The Genius would move from the Bar to my device. Setting the right expectations from the start, avoid wasting time and eliminating friction overall while creating rapport with the brand was exactly what people liked about Apple’s customer service. The feeling of buying products from a company that put its customer first and that “Cheers – where everybody knows your name” factor that made Apple’s customer service second to none. Apple can do it again this time putting its technology first rather than its store staff.

While I realize my vision is not going to be delivered overnight, I believe that, if done well, this “Genius on device” would add even more value to Apple’s products and it would position Apple’s customer care as the industry benchmark once again.

News You might have missed: Week of August 17th, 2018

Google to Open Retail Store in Chicago

Google is planning a two-level store in Chicago’s Fulton Market district, its first known location for a retail flagship. The technology giant is close to finalizing a lease for almost 14,000 square feet on the first and second floors of several connected, two-story brick buildings between 845 and 853 W. Randolph St., according to sources.

The Value of Smartphones

Over the past few weeks, I have been asked a lot whether the prices of smartphones will continue to increase and if such an increase is justified. The success of the iPhone X took those who said people would never pay $1,000 for a phone by surprise. The iPhone X also gave hope to smartphone vendors that, while sales might be capping there is an opportunity to grow average selling price and possibly profits. Yet, the success of the iPhone X must be considered with some caution. Not everybody is prepared to pay that kind of money for a phone, and, even more importantly, not every brand can charge as much.

The Bill of Materials is growing

It should not come as a surprise that the cost of making phones is rising. Smartphones have come to offer as much as a PC does, sometimes even more. Storage, screen quality, more sensors, bigger batteries, premium materials, cameras, and a lot more software. While some of the technologies are well established, so their cost has come down, others are cutting edge and add a fair chunk to the bottom line. Think, for instance, at the different biometric solutions from iris scanning to fingerprint readers.

Let’s look at the two trend setters in the market to see what has been happening over the past year. According to the teardown analysis conducted by IHS Markit, Apple’s total cost to make the iPhone 8 Plus rose to $295.44, $17.78 higher than that of the iPhone 7 Plus. IHS Markit also estimated that the iPhone 8 bill of materials is $247.51, or $9.57 higher than the Phone 7 at the time of release. The Samsung Galaxy S9+ (64GB) carries a bill of materials (BOM) cost of $375.80, much higher than for previous versions of the company’s smartphones. The preliminary estimated total is $43.00 higher than costs for the Galaxy S8+. It is too early for a tear down of the Samsung Note 9 and we know nothing about the iPhone X successor but we know the 64 gigabytes iPhone X model carries a BOM of $370.25 and betting on a higher BOM wouldn’t be a bad idea.  

The Return on Investment is High

We understand now why the cost of the phones at the high-end of the spectrum is going up. But why are consumers prepared to pay those rising prices?   The answer is in the return users see in the phone they buy.

Smartphones have become a must-have for most. They have replaced other consumers electronics such as MP3 players, digital cameras, video cameras, portable navigation devices as well as some other things like watches, alarms, and wallets. We use them throughout the day, every day, whether we are at home, commuting, at school or at the office. Our dependence has grown so much that we have started to talk about addiction. Whether you are addicted or not, there is no question that a lot of value is given to this thing we carry in our pockets.

Adding to the practical side of what the phone does for us there is a more irrational value we see in these devices. The pictures we store, and for some even the music, offer a deep emotional connection to the piece of hardware. While your computer can store the same things, the phone has the huge advantage of being that thing in your pocket you always pull out, much like you used to do with those pictures in your wallet. Plus as much as your phone is the same as everybody else you feel you made it yours through your pictures, your apps…You now even start to feel that your phone knows you!

No Sticker Shock

The smartphone market is not that different from the car market where the price spectrum is more and more polarized. The higher end is getting more expensive while the lower end is getting cheaper and more reliable.

Moving from contracts to installment plans helped consumer appreciate that not all phones cost $199. But even then, consumers do not have to face the full price of a phone in one go. The biggest increase they see is on the initial payment which includes tax but that percentage on a $100 increase is negligible.

Buyers could object to the price more on principle. It is really, the idea of spending $1000 that seems ridiculous to some. This is precisely where the weight one puts on the usefulness of the device and that emotional connection I mentioned will determine if you are a “you must be kidding me” or a “where do I sign” buyer.

The Power of a Brand

There is also a final component that plays a big role at the high-end and that is brand. The brand is what turns the device into a status symbol, something some consumers are prepared to pay more for. And I am not talking about the technology, the design, the quality that goes into the devices made by these brands. I literally mean the name, the logo.

In the smartphone world, this is true for Apple and Samsung and possibly Google. Consumers see these brands as leaders and are willing to pay more for their products. Other brands, like Huawei or Xiaomi, while getting recognition for their technology advancements or design have not quite earned the right to grow their price tags as much.

How far prices can continue to grow is hard to say, but I do not see this formula of rational plus irrational value and brand change much over the next five years.


News You Might Have Missed: Week of August 10, 2018

Samsung Unpacked 2018

On Thursday, Samsung held its “unpacked 2018” event in Brooklyn where they announced the Note 9, the Galaxy Watch, a DeX dongle, and they teased the Galaxy Home. A lot was packed in a keynote of just over an hour including an update to Bixby. Rather than summarizing all the product details, I am sharing the links to the press releases and I get straight into my key takeaways for each product


  • The Note 9 is an interesting iteration of this product family. The additional colors, the more curved design all point to a product that was initially designed for geeks to a product now trying to expand its reach into more mainstream early tech who value tech but also design. There is certainly more of a blend between the Note and the Galaxy family than there ever was before.
  • Samsung regained its confidence and pushed the envelope when it came to battery capacity something that Note users always looked for in their device.
  • Overall the Note 9 is a good step up from the previous generation although there is no real breakthrough technology it has a lot of offer to previous Note owners looking for an upgrade.
  • As people look at the Note 9 to help Samsung turn its quarterly sales back to growth, it is worth to remember that the Note family has never been a big volume driver but it certainly does impact average ASP. As we see often with the Galaxy S launch and with iPhone, the price reduction on the previous model usually helps with volume. This is why I expect the Note 8, which was a well-received product last year, to play its part as carriers and retailers lower its price.
  • There is no doubt that Samsung values the Note 9 users tremendously as DJ Koh highlighted in its open remarks at unpacked. This loyal and highly engaged group is not just important for the revenue it brings but for how it helps Samsung understand their users. Often early adopters are a window into the future of the larger user base, showing what could be tolerated, accepted or loved.
  • DJ Koh closed the event with an interesting comment about how hard it is to innovate with an annual cadence and I think the Note 9 might have shown how sometimes technology innovation does not quite aligned with launch cycles. Some commentators pointed to the lack of the under-screen fingerprint reader and 5G both likely to come in time for the Galaxy S10 launch. Of course, the Note 9 is optimized for Advanced LTE which will be available in more markets than 5G will initially be, so from a consumer perspective a better technology to have.
  • This cadence does, however, pose an interesting dilemma for Samsung going forward when it comes to keeping the Note line ahead of the Galaxy S line. I would argue the difference between the two products is less and less obvious because the user base is less differentiated. Think about the iPhone X and the iPhone 8/8 Plus buyers. iPhone X might have a slightly higher income and a desire to experiment with new tech but by and large, they are not that different from iPhone 8/8Plus buyers.
  • Samsung also added a DeX Dongle to the lineup and rightly positioned Dex as a piece of software, not an accessory. It is the software running on the devices that allows you to connect a Samsung’s phone or tablet to an external monitor or a TV and run apps on the monitor while still having access to the phone or tablet indecently. The dongle form factor increases mobility even further and while one could use a regular HDMI dongle Samsung does not guarantee optimal performance.

Galaxy Watch

  • At last Samsung decided to abandon the Gear brand for its watch line! What might have been initially designed as an accessory to a phone is now a device in its own right and one that looks and functions very much like a watch so calling it what it is was the smart choice to make.
  • I feel that with this product Samsung finally has a real Apple Watch competitor. The design has improved by getting thinner and less bulky overall and the features offered tick all the must-haves consumers want from a smartwatch: fitness, sleep tracking, stress management, notification and day planning.
  • I do not see the fact that Samsung Watch is sticking with Tizen rather than embracing Android Wear as a problem. Most users, even in the Apple Watch pool do not use many apps outside of what comes with the watch. Given how slow Android Wear development has been going, sticking to Tizen has allowed Samsung to move faster and improve more. We will see if this remains the case as we know Qualcomm has an event planned for September 10th which will likely be tied to some Android Wear announcement.
  • The Galaxy Watch added stress management with a breathing feature which is quite different from the Apple Watch Breathe App. The concept is quite similar both invite you to take time in your day to breath. While the Apple Watch Breathe App though is something you set as a break throughout the day, Samsung linked the prompts base on your heart rate and activity. I liked this because it shows that Samsung is thinking about software and AI more.
  • Samsung is widening its accessory business with a wireless charging pad that can fit a phone and a Watch and adds a whole gamut of watch bands including a very comfortable silicone band. Galaxy Watch can fit a traditional watch strap but Samsung’s have a quick release mechanism that takes the pain of swapping them out.

Bixby and Galaxy Home

  • Samsung showed a new and improved Bixby that graduated from a user interface to an assistant role. With improvements to natural language, personalization and usefulness Samsung also shared some of their partnerships with Google Maps, Uber, and other brands that Bixby will be able to access to perform her new assistant role to book a ride or a restaurant.
  • The demo on stage worked well but many consumers who gave Bixby a try in the past and had been disappointed might be reluctant to try again. The good news for Samsung is that this new Bixby is rolling out first on the Note 9 and if there is an audience willing to cut Samsung some slack and try Bixby again is this one.
  • For more details on how Samsung will be able to scale these partnerships without being left doing all the work we will have to wait for the Samsung’s Developer Conference in early November
  • We did not get many details on the Galaxy Home but it should not be a surprise that Samsung is taking a similar approach to Apple putting sound quality first. After all, Samsung can leverage the Harman expertise and street cred in this space.
  • Samsung announced a strategic partnership with Spotify that will allow users to link their Samsung’s account to their Spotify account right during setup. The deal extends to a wide range of devices from phones to Watch and TVs, and of course the new Galaxy Home. The account pairing will allow to seamlessly move from one device to another without having to interrupt the music.
  • Spotify’s CEO also said on stage that support for Bixby will be added soon. It remains to be seen if data will be shared so that Bixby can get smarter by getting information from all the devices I am using to offer a truly seamless experience
  • Of course, at least on paper, this offers Spotify an opportunity to grow its user base in the US, where Apple recently took the leadership position in paid subscription. The Street seemed excited about the prospects of the deal and  Spotify’s shares rose nearly 5 percent Thursday, rising over 8 points to close at $187.38 per share.


  • At the start of the event, DJ Koh, who has been leading the Mobile Division since 2015 and became a co-CEO in 2017, thanked the Note Users but also highlighted Samsung’s vision of bringing all their devices together to provide a better experience for the users. We started hearing about this last year at the Samsung Developer Conference and then again at CES this year. What was interesting this time was that Mr. Koh talked about the competition and their desire to put their interest before those of their customers and that Samsung was going to engage in innovation that delivered value to its users. There was also a clear message on Privacy and Security, a message that echoed Apple but also a message that has very solid foundations in KnoX.
  • This was the first time DJ Koh spoke about what the company stands for and what they want to focus on. It was a welcome change and I hope we will get to hear more.
  • Samsung is in a fortunate and unfortunate position of not being an American company. Fortunate, as Samsung will not be dragged into the current trade war between China and US while Apple might be. Unfortunate, because DJ Koh and other executives do not have the ear of the press as much as Apple’s executives have – when they want to. This makes it harder to create more of a connection between users and brand.

Voice Commerce is not How We like to shop…Yet!

This week the Information published an article citing that only 2% of Echo owners have used Alexa to make a purchase in 2018. The numbers were shared by two people who had access to an internal Amazon document and revealed that of the people who did buy something using Alexa, about 90% didn’t try it again. More people, 20%, were said to have engaged more broadly with Alexa with commands like “What are my deals?” and “Where is my stuff?” to track orders.

I do not want to duel on these numbers given the vagueness of the source, but whether they are spot on or lowballing, I doubt the percentage of consumers using Echo devices in 2018 to regularly shop was that much higher. In 2017, we, at Creative Strategies, surveyed 1500 US consumers, among whom we found 40% were Echo owners. This was more of an early adopter panel which showed more encouraging results than this week’s article. We found that 29% of Echo owners had bought something through Amazon Prime at least once using Alexa, but only 3.7% did so on a weekly basis. More encouraging results, but, even with early tech adopters a clear sign that creating a habit around voice commerce is harder than people might have initially thought. The reason as to why this is the case is to be found a little bit in the tech but mostly in how and why we shop.

Why do We shop?

Well, to get stuff, I hear you say. Yes, by and large we shop to acquire and own something. Shopping, however, is often a more complicated affair than just buying an item. Usually, we take more pleasure in the process of shopping than in the article itself. Looking through different options, reading reviews, seeing what other people buy is almost more important than actually making the purchase.

Shopping used to have a considerable diversion and social component that dragged us into stores. As traffic and parking got worse in many cities and our lives transitioned to a more digital world so did our shopping. While still having a social component now fulfilled by chats and users reviews the diversion component remained strong. If you, like me, can spend hours browsing through sites to end up not buying anything at all, you know what I am talking about when I say diversion. The pleasure of bargain hunting has been a driver for many shoppers and it has transferred nicely from the real world to the digital one. The recent amount of sales generated by Amazon’s Prime Day is a testament to that!

Voice and Utilitarian Shopping

Shopping is not all about fun though. There is also a more utilitarian aspect of shopping that mostly entails groceries and other essential items. We generally get this shopping done as quickly and efficiently as possible.

This is where Voice Commerce has the lowest barrier to entry today. Repeat purchases, items that are straightforward to order, either because there are limited options or because those options are clear, like size, color, quantity and brand.

In many cases with utilitarian shopping we know precisely what we want so that our instructions to Alexa or Google Assistant are precise and to the point. The straightforward nature of these items increased our level of confidence that the digital assistant will get it right, making it more of a safe bet for us. There is a big difference between ordering washing up pods and a shirt, or a lamp or even a bedding set.

Screen Support and Better AI can help Voice Commerce

In the short term, I see the ability to marry screen and voice as a great combination to grow confidence. Being able to ask Alexa for an item and quickly view it on the screen of your Echo Show or TV before confirming the purchase is a great help. Google Assistant and Smart Displays can offer the same, making the process a little less of the gamble and certainly much less verbose than the assistant going through all the different options.

Artificial intelligence (AI) and machine learning (ML) could help a great deal too. The caveat with ML is that you need to use the assistant so it can learn and AI will need aggregated shoppers data to come up with recommendations based on demographic, shopping history, location, and so on. While this seems pretty straightforward, you just need to take a look at the recommendations you receive on to see that it might not be as easy as it looks. I am an avid shopper, and I am often amazed by how little customization is offers based on what I browse and what I bought in the past other than for items like books and movies.

Voice Shopping must be Different than Online Shopping

I do believe voice has a prominent role to play in commerce as long as it does not make the process more complex. Today there is still too much complexity to the process and considering that online shopping is not broken for many people there is really no incentive in trying.

Voice should take friction away not adding it, just like a good sales assistant should do in a store. For that to happen, however, we need to rethink shopping. Taking an online shopping experience and transitioning it to voice is bound to fail. Online shopping builds on the amount of information presented to us on the screen and digital assistants do not always have that luxury. So I think we need to think about voice commerce a bit more like in person shopping where I make an inquiry and the assistant narrows down what I might be looking for by asking questions and using context to add more info. This means that digital assistants might need the use of a screen and even a camera to get more information and that the interaction could be a mix of voice and touch.

I believe that right now there is such a pressure in making it all about voice, so we can call it a success or a failure. But we are missing the opportunity to use voice to enhance experiences consumers are already comfortable with. This could drive a more positive attitude towards voice and encourage consumers to experiment more. When it comes to voice commerce I strongly believe Amazon as well as Google should focus on the longer term opportunity of additional revenue and higher loyalty than the short term one of justifying the existence of digital assistants.


News You Might Have Missed: August 3, 2018

Motorola 5G Mod

 This week Motorola launched the new moto z3 and 5G moto mod™1. When paired with the mod, moto z3 is the world’s first smartphone with access to Verizon’s 5G Network. Motorola also partnered with Qualcomm to achieve this industry milestone utilizing the flagship Snapdragon X50 modem and millimeter wave components.

The “So What” in Apple’s Earnings

On Tuesday, July 31st, Apple announced its 3Q18 financial results, an event that drove even more attention than usual given the headwind that some companies faced during this earnings cycle. In particular, analysts were trying to measure the health level of the whole smartphone industry based on what Apple reported for the iPhone.

The Core

Apple sold 41.3 million iPhones, slightly lower than expected but certainly a strong performance considering this is usually a softer quarter for Apple given the expected September launch cycle. The numbers look even better when one takes into account that Apple decreased inventory by 3.5 million units which means that sales to end users ended up at 44.8 million units. The iPhone X remained the most popular model driving ASP to $724. As markets saturate ASP growth is a much more positive signal than sales not only for the immediate impact on revenue but most importantly as a driver for further revenue growth coming from the latest technologies integrated into the hardware and the services they enable.

iPad had almost a reverse trend to the iPhone with stronger sales and weaker revenue. This reflects the state of the portfolio quite well, as the most recent iPad model has a lower price tag and the iPad Pro, which drives higher ASP is due for an update in the next couple of months. The expected update on the iPad Pro line is certainly stalling prospective buyers who would rather wait for the new models or see if they can take advantage of a price drop on the current ones. This point might also be true of enterprises as we did not hear Apple talk specifically about iPad uptake in this segment as they have done many times in the past.

It is also interesting to note the different installed base story for the iPhone and the iPad. The iPhone user base is more defined in number, but it is improving in capability as users in the base are upgrading to newer devices. With iPad, however, we are still in a growing phase of the installed base as Apple pointed out that 50% of iPad buyers in the quarter were new to the product.

On the Mac side, this is the first time in a very long time that Macs underperformed compared to the overall PC market. Cook linked the year over year decline to the different launch cycle, and it will be interesting to see the impact of the upgraded MacBook Pro next quarter. While rumor points to more Macs to come the back to school window is gone, and all will rest on the holiday quarter.

The Shining Stars: Wearables and Services

Wearables (Apple Watch, AirPods and Beats) had a great quarter, with revenue up over 60% year-over-year and growth accelerating quarter-over-quarter. Wearables produced over $10 billion in revenue over the past four quarters. While Apple Watch sales were reported to have grown by 40%, it is AirPods that in my view have been the clear dark horse of the category. Tim Cook compared AirPods to the iPod, and I could not agree more when you consider the appeal the product has. Like the iPod. AirPods transcend gender, income, age and tech savviness to deliver a clear value-add by doing what they are meant to do most straightforwardly.

The long-term opportunity that wearables offer is that they pave the way for whatever Apple is planning around AR and glasses. A loyal base of Watch + AirPods users will offer a great addressable market for glasses.

Paid subscriptions across Apple Services have now passed 300 million, an increase of more than 60% in the past year alone. For Apple Music specifically, paid subscriptions have now passed 43 million. There were two areas that Apple highlighted either directly or when prompted. One was the mention of the doubling in news articles read during the quarter. This datapoint bodes well for an upcoming paid news service as it proves that engagement is growing.

When asked about the deal Apple signed with Oprah, Tim Cook did not hold back his excitement about the collaboration and referred to original content being developed. With the limited ability that Apple TV has had to convince people they needed it for its apps and as a single sign-on portal for all our content, Apple is left with no choice than to differentiate through content. If you are skeptical about why Apple would enter this space consider the low level of penetration of Apple TV, you forget the many screens this content will be viewed on when you consider iPhones and iPads. I struggle to see Apple embarking on the very expensive endeavor of creating original content to limit viewing to Apple TV.

There was not much mention of the HomePod during the call other than an implication by an analyst that Apple is losing the home. Cook’s answer, reflected not only why Apple might not be worried but also why Apple has not been as aggressive in the home as some might want. The bottom line for Cook is that owning the home is not enough but owing the pocket (with the iPhone) is key, and of course Apple has done that, which grants them access to the home and beyond.

One data point during the call referred to Siri, and that was the number of requests put forward to the Apple’s digital assistant. An impressive number but one that does not really give us much visibility in the growing level of engagement and, most of all, satisfaction.

The Bigger Picture

Apple Pay has been growing steadily over the past few quarters but for Apple to be able to say that transactions were higher than PayPal Mobile and Square was certainly good this time around. Even more rewarding, I am sure, is being able to announce that CVS and 7-Eleven will add Apple Pay. CVS, in particular, must feel like a victory as CVS had originally opposed Apple Pay in favor of its own payment method called CVS Pay.

While politics was not an explicit topic on the call, Tim Cook did address a question about tariffs by wishing for calmer heads as tariffs always impact consumers. While calmer heads are certainly welcome, I find it useful to point out that in the past the impact of new tariffs on phones, in particular, has been shortlived. My proof points are South Korea and their increase in tax of a few years ago and Russia where there was a crackdown on import duties earlier in the 2010-2012 time frame. In both occasions, prices grew, and the market slowed down for a few quarters before picking back up.

Absent on the call were references to AI and Cloud, key areas for Apple’s big ecosystem competitors: Google, Microsoft, and Amazon. While these two are not key business drivers for Apple, not in the way where there is a direct revenue target associated with them, they are crucial ingredients of products and services, and I believe Apple should start to mention them more often in the role they play in empowering successful services and experiences.

News You Might Have Missed: Week of July 27th, 2018

Amazon’s 2Q Earnings

Net sales increased 39% to $52.9 billion in the second quarter, compared with $38.0 billion in second quarter 2017. Excluding the $760 million favorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales increased 37% compared with the second quarter of 2017.

Operating income increased to $3.0 billion in the second quarter, compared with operating income of $628 million in the second quarter 2017.

Net income increased to $2.5 billion in the second quarter, or $5.07 per diluted share, compared with net income of $197 million, or $0.40 per diluted share, in second quarter 2017.

Why the EU decision about Google does not change the future for an Amazon Phone

Last week the European Commission fined Google five billion dollars for breaching the E.U competition rules. Among other things, the European Commissioner for Competition Margrethe Vestager claimed that Google helped kill off competing OS forks that were developed, including Amazon’s Fire OS for smartphones. According to Vestager, Google told handset makers they couldn’t sell any devices running other such forks if they wanted full access to services like the Google Play store on their other Android devices.

The EU press release stated:

“In doing so, Google has also closed off an important channel for competitors to introduce apps and services, in particular, general search services, which could be pre-installed on Android forks… Therefore, Google’s conduct has had a direct impact on users, denying them access to further innovation and smart mobile devices based on alternative versions of the Android operating system. In other words, as a result of this practice, it was Google — and not users, app developers, and the market — that effectively determined which operating systems could prosper.”

Fire OS did not kill the Fire Phone

It is easy to blame the lack of success of the Fire Phone on Google, but the truth is that, while the ability to leverage the Google Play Store could have helped, there was more about the phone that made it a hard sell. The price point and many of the features were aiming at higher-end and experienced users. Yet, the lack of brand share in the smartphone market, lack of apps and limited channel availability made it hard to appeal to a target audience that was already taken by either iOS or Android.

We also need to remember that Amazon introduced the Fire Phone back in 2014 when its brand in the device segment was nowhere near as strong as it is today thanks to its Echo line. Of course, the Kindle e-readers were very successful, but there was skepticism on whether or not Amazon could take its brand and expertise to other tech products. So much so that, back then, the Fire Tablets were still called Kindle, a name that was dropped a few months after the Fire Phone’s announcement.

For both smartphones and tablets, apps were more important than anything else, which is why the inability of Amazon to take advantage of the Google App Store certainly contributed to the premature demise of the Fire Phone. Developers were far too busy with iOS and Android to spend further time developing for Fire OS when the opportunity was uncertain.

Content vs. Apps

As both the smartphone and the tablet market matured, apps and content started to have a much more balanced role to play in driving user engagement. This was undoubtedly something Amazon was expecting and counting on as a revenue opportunity when it thought of the Fire Phone and Fire Tablets. Amazon music and video services had been in place for quite some time by the time the Fire Phone was introduced, but the streaming portion of such services only started after. There is no question that much of the value Fire Tablet users get from those devices comes from the content that Amazon makes available on them. Content that Amazon can leverage across Fire TV and their Echo products too.

The Challenge of taking Alexa Outside the Home

Since Google was fined, some have hypothesized that if indeed the EU’s decision holds, Amazon might have another go at the smartphone market. A lot has certainly changed in Amazon’s favor for a reboot of that smartphone attempt. But other challenges arise.

Alexa is, of course, the one to benefit the most from an Amazon attempt at launching its own smartphone. Alexa on other smartphones has not been as successful as it would be with a much tighter integration between hardware and software.

Other Amazon’s services have little to gain from a dedicated Amazon smartphone in my view. This is mostly because the Amazon, Kindle, Video apps all work very well on other devices and are much less dependent on being a “default” option on an optimized OS. Volume is value when you are making your money through content and services and not hardware.

Alexa becoming the one and only assistant on a phone might, however, not bring as much return to Amazon as some might think. I believe that while our dependence on Alexa is grown in the home and so is our level of satisfaction, our expectations for what we want Alexa to deliver outside the home might raise the bar too high. Alexa knows enough about us in the home to be useful but does not really know as much as Google and Apple know about us overall. Being the default agent on the phone would not change that as most of what makes other assistants more knowledgeable are the services and the apps we use from mail to navigation to search.

Considering the challenges of the smartphone market as well as the need for a regionally-tailored approach – Amazon’s worldwide offering is not as comprehensive as it is in the US – there is a much stronger short-term opportunity for Amazon that does not even have to wait for Google to lose its appeal to the EU decision. Amazon must change the perception users have today of the Alexa app on a smartphone.

The Alexa app must shift from a command center to an engagement center. As a user, I only go to the app to troubleshoot or add and manage a skill. While Amazon added texting and calling options, I don’t think these have proven to be very popular with users leaving Alexa pretty much isolated from our day to day outside the home.

Amazon should start thinking more about how Alexa can be useful to us when we are out and about. Can Alexa be our home away from home? The increased and improved focus on the app and a couple of strategic partnerships with vendors would provide a good enough return to Amazon in a market, the smartphone market, which as critical as it has been for the past ten years should not be the focus of tomorrow.

News You Might Have Missed: Week of July 20th, 2018

Prime Day is a Success Despite Glitches

The day after Prime Day, Amazon shared some initial figures all pointing at a great success for Amazon. Prime members worldwide purchased more than 100 million products during this year’s Prime Day event. Best-sellers worldwide were the Fire TV Stick and Echo Dot – making this, with 12-hour early access to deals, the biggest event ever for Amazon devices. Small and medium-sized businesses selling on Amazon far exceeded $1 billion in sales worldwide this Prime Day.

Global Highlights from Prime Day 2018

App Stores and Monetization

A lot has been written this month about the Apple App Store and how it has changed the way software and services are distributed and how instrumental it has been to the success of the iPhone. The ten year anniversary of the Apple App Store was a great time for us, at Creative Strategies, to take a look at how consumers interact with app stores in general and, in particular, what drives them to spend their money on apps. To do so, we ran a study at the beginning of July 2018 across 800 US smartphone users. ( Please note that while the results cannot be extrapolated to the full US population, the samples for each cohort are statistically significant)

App Discovery

When Apple created the App Store, they based much of it on the iTunes model. While apps are not songs, they knew that users were going on iTunes to find music and they were successful, so I am guessing they thought that was a good place to start. It became quite clear early on that while searching for an app might not be that different than searching for a song, recommending an app was undoubtedly not the same. Suggesting a song based on genre or an artist did not translate into suggesting an app based on its type or a developer. I always remember getting suggestions to download subway maps in several different cities after downloading the London Tube app. Shame was, I did live in London, not in Moscow nor Paris and I was not even planning to visit those cities any time soon. It just does not work like that.

In the beginning, the app discovery problem was linked to a lack of knowledge of what was available and to some extent even of what was possible. Over time, though, the “there is an app for that” syndrome made it so that finding what you wanted became an issue because there was just too much out there to look through.

Like any kind of online shopping, you can find what you want, and sometimes even what you did not know you wanted, by browsing or searching, just ask Amazon! Among our panel, 20% of iOS users said they are browsing the app store daily, and another 32% do so weekly. Among our Android panelists, only 9% reported to be browsing the Google Play Sore daily and 21% weekly.

Search as a primary tool to find the right apps does not seem to be very popular. Only 16% of iOS panelists and 18% of Android panelists resort to it as their primary method. When getting into how effective search within the stores actually is, one gets the feeling that there is plenty of opportunity for improvement. 35% of iOS panelists said to be using app store search on occasion but believe internet search gives better results. 33% use app store search regularly and find that the results generally match what they want. Among the Android panelists, the numbers are not too dissimilar with 31% occasionally using search but believe the internet gives better results and 35% regularly using search with generally getting matching results.

It’s Cost, not Value that Drives Decisions

Searching for apps is only half the battle. Deciding what to download and what to pay for is even more complex, and it seems to be fairly different for our iOS and Android panelists. While both value customer reviews, Android users rely more heavily on these reviews in their decision process (44%) making it the leading driver. Among iOS panelists, the leading driver to download are the features of the app mentioned by 38% of the cohort.

Interestingly, when it comes to paid apps, the leading drivers remain the same for both groups but only after the price of the app itself. I find this point interesting because it would suggest that smartphone users are not assessing the return of investment they would get from an app but they might, instead, be putting a limit to how much they are prepared to spend before they look beyond the price in what the app has to offer. In other words, great reviews, feature list, screenshots, and app description do not matter if the price is already beyond what the user perceives to be the right price for the app.

If my assumption proves correct, offering more flexibility in how users can pay for apps will be critical in driving future monetization. Free “try before you buy” will not only reassure users of their investment but will also inspire confidence and help change their perception of what an app might be worth, ultimately resulting in higher spending.

iOS Users Show Higher Propensity to invest in Apps

Users across both the Apple App Store and Google Play Store seem clear about what they are paying for. The vast majority of smartphone users in our study did not feel like they were tricked into an in-app purchase or subscription (56% among iOS and 64% among Android panelists) which shows that the guidelines in making the process as transparent as possible are working well. When it comes to paying for a subscription, the vast majority would prefer a one-off payment (54% among iOS panelists 47% among Android panelists)

The idea that iOS users spend more on the App Store than Android users do in the Google Play Store is not new. This is the result of a series of factors: higher availability of paid-for content in the store, higher disposable income across users and lower tolerance for ads during app usage. 46% of iOS panelists said they would make an in-app purchase to avoid ads. This compares to only 38% of the Android panelists.

Our study confirms the gap between the two app stores quite clearly: the number of iOS panelists with 5 or more paid apps or subscription was 45% compared to 19% across Android panelists.

Beyond these numbers, our panel was asked to provide some free format comments on the apps and subscription experience that showed an overall lower interest among Android panelists who mostly did not want to be bothered with yet another subscription or payment. Interestingly among iOS users, there was a need for clarity between what requires a fee but not a subscription. iOS panelists also seemed to keep developers at a higher standard asking that paid apps would be regularly updated through some additional payments but without having to require a subscription.


Users might not fully grasp what developing and maintaining an app might entail, but they seem to have a clear mindset about what they are prepared to pay for as well as what they expect in return. The more transparent developers are in their approach and the more flexible App Stores charging mechanism will be the more willing consumers will be to invest in apps.

News You Might Have Missed: Week of July 13, 2018

AT&T to be the Exclusive US Distributor of the Magic Leap One

This week Magic Leap announced that the Magic Leap One Creator Edition will be available later in the summer.

When available for consumers, a timeframe that was not specified, AT&T customers will be among the first to experience it in select AT&T stores in Atlanta, Boston, Chicago, Los Angeles, and San Francisco, with more markets to follow.

In a developer-focused Twitch stream, several Magic Leap employees offered details about the system specs for the AR headset. The headset will be powered by an Nvidia Tegra X2 system, probably one of the more powerful options for mobile devices, though it is bulky enough that the company needed to build a dedicated hip pack in order to house it.

Surface Go: Judging a Product by the Market

Microsoft just launched the Surface Go,  a 10” Surface powered by the 7th Generation Intel Pentium Gold Processor, in a fanless design, offering 9 hours of battery, priced at $399.

Size is always a difficult topic to discuss when it comes to tablets. The balance between how much screen real-estate you need to be productive and how little you want to be mobile is a very tricky one and a very personal one too. I always wanted a smaller Surface to better balance work and play. So far I have been treating Surface Pro more like I would my PC/Mac than my 10″ iPad Pro. Of course device size is only one part of the equation when what you want is balance work and play as apps availability plays a prominent role in reaching that balance.

What cannot be argued are the greater affordability of a sub $500 Surface and the opportunity that it opens to create a broader addressable market in the enterprise, the consumer, and the education segment.

Lots changed since Surface RT

I know there is a temptation to think about Surface Go as a Surface RT’s successor and dismiss it even before it launches, but I ask you not to do so just yet. I say this, not because Surface Go is running on Intel and not ARM but because a lot has changed in the market since 2012 and even since Surface 3.

When Surface RT hit the market, Microsoft was responding to the success the iPad was having in the consumer market as well as the hype around tablets taking over the PC market. Beyond early adopters, however, consumers were still figuring out if there was space in their life between their smartphone and their PC – many are still dueling on that today – and enterprises were trying to understand if employees could actually be productive on a device that was not a laptop and with an operating system, Windows 8, that was not optimized for touch. Moreover, Surface was a new brand for consumers and Microsoft an unproven supplier for the enterprise market.

I don’t need to remind you that Surface RT was a flop and Microsoft went back to the drawing board to bring to market a more affordable Surface to accompany Surface Pro. Fast-forward to 2015 and Surface 3 proved to find its place in some enterprises as IT departments were buying more into the 2in1 trend and felt more comfortable with its Intel architecture.

Surface Go aims at providing an upgrade path for Surface 3 users. It also looks at broadening the Surface reach into the enterprise through first line workers and, more broadly, users who might not need all the horsepower of a Surface Pro but do not want to compromise on the hardware design. Adding Surface Go to the portfolio assuring consistency of experience and fidelity of apps were probably the biggest drivers to sticking with an Intel architecture at a time when Windows-on-ARM is getting off the blocks.

The ‘once bitten twice shy’ Surface team prioritized capitalizing on a small but solid base with a known formula for now and will probably wait for the Snapdragon 1000 to broaden the appeal to users who might be prioritizing mobility and a more modern workflow over legacy. As disappointing as this might be for BYOD users and consumers this was the safest bet to get IT buy-in.

Beyond Enterprise

A lot has been written about Surface Go being a reinvigorated effort on Microsoft’s part to go after iPad, and how could it not, given iPad remains, 8 years in, the most successful tablet in the market. While eroding iPad’s market share would be a welcomed bonus, I think there is market share to be had within the Windows ecosystem first.

Considering price and design as the only two ingredients a product must have to tackle the iPad dominance in the tablet market ignores a crucial factor in the iPad’s success: apps. Apps make up a big part of the experience users buy into when using iPad and iPad Pro. This, in my opinion, is still Surface’s weakest link when it comes to broadening its reach into the consumer space.

When we look at the Windows 2in1 market, design still leaves a lot to be desired, especially when it comes to the overall package of screen quality, keyboard, and pen experience. This is especially true of the new Windows on ARM devices which boast excellent battery life and LTE connectivity but do not seem designed with mobility first in mind.  While many Windows manufacturers continue to dismiss the success of Surface based on market share it is clear that brand awareness and satisfaction has grown significantly. Throwing Surface Go in the mix of options consumers and students getting ready for back to school have is not a bad thing.

Looking forward to Surface Go 2

I feel Surface Go landed on a design and price point that offer a lot of promise. Thinking ahead to a more mature Windows on ARM, a Qualcomm Snapdragon 1000 and users finally ready to benefit from connectivity anytime anywhere, it is hard to see how Surface Go 2 (or whatever it will be called) would not offer an alternative to the current Intel architecture. And I must say I look forward to that!

News You might have missed: Week July 6th, 2018

Intel 5G Chips allegedly dropped by Apple

Ctech reported on Thursday that Intel documents they reviewed indicated that Intel will not be providing 5G modems to Apple in 2020. Apple has notified Intel it would not use a mobile modem developed by the chipmaker in its next-generation mobile device, Intel executives said in the communications. Further development of the modem component internally called “Sunny Peak” has been halted and the Intel team that’s working on the product will be redirected to other efforts, the executives said.

Neither Apple nor Intel commented on the report.

News You might have missed: Week of June 29th, 2018

Duplex is out for Public Testing

This week at an event in Mountain View, Google demoed the public release of Duplex to a bunch of reporters. The demo took place at Oren’s Hummus Shop in Mountain View but no video recording was allowed so we have mostly an account of what happened through the reports’ stories. After the software says hello to the person on the other end of the line, it will immediately identify itself: “Hi, I’m the Google Assistant, calling to make a reservation for a client. This automated call will be recorded.” (The exact language of the disclosure varied slightly in a few of the different demos.)

New Tech, Corporate Responsibility, and Governance

Over the past six months, technology has had its fair share of bad press. We have had many stories covering social media with fake news, online harassment and users’ tracking, kids and screen addiction, AI stealing our jobs, and robots taking over the world. This past Saturday, however, there was a New York Times’ story about how domestic abusers take advantage of smart home tech that made me think of the challenges that brands, as well as governments, will increasingly face.

You heard me say it before: technology per se is not bad, but humans can certainly use it in ways that can cause harm to themselves or others.

Two Sides of the Same Coin

I have to admit it never occurred to me that smart home technology could be used to inflict more pain on victims of domestic abuse. The Times referred to reports by abuse helplines that saw an increase  over the past year of calls about abusers using smart home tech for surveillance and psychological warfare. Victims mentioned thermostats being controlled to make the house too hot or too cold, doorbells ringing when nobody is at the door, door-locks pin codes being changed preventing access to the home.

Maybe because I am “half full kinda person” I always thought about all the advantages smart home tech brings whether helping monitoring elderly parents or assisting people with disabilities be more independent in their home. Of course, abusers are not new to using technology to track their victims, think about GPS for instance or the use of social media. Even then, I always saw the other side of the coin considering how GPS could not just help me find my phone but find my dog or make sure my child was where she said she was.

According to the National Domestic Violence, Hotline 1 in 4 women (24.3%) and 1 in 7 men (13.8%) aged 18 and older in the United States have been the victim of severe physical violence by an intimate partner in their lifetime. One in 6 women (16.2%) and 1 in 19 men (5.2%) in the United States have experienced stalking victimization at some point during their lifetime in which they felt very fearful or believed that they or someone close to them would be harmed or killed. What makes smart home tech particularly concerning according to the Times is that these new gadgets like cameras, smart speakers, smart locks seem to be used to abuse women in particular. This is because, by and large, men control technology purchases in the home as well as their set up and any service linked to them.

Educating and Assisting

I find that blaming a male-driven Silicon Valley for designing products that might be used to hurt women to be out of place. It is true that, quite often, tech products are designed by men for men, but this does not mean they are designed with the detriment of women in mind.

That said, I do believe that tech companies have a responsibility to think through how technology is used and they should warn of how it could be misused. Of course, it is not easy to add to your smart doorbell instructions manual: “Warning, an abusive partner could use the camera to monitor every person who gets to your door or every time you leave the house.” Companies could, however, work with support agencies to help them understand how the technology could become a tool for abuse so they could advize vulnerable people and teach about it at prevention workshops as well as be prepared with practical steps to be used for a safety planning.

Staying a Step Ahead

Aside from helping prevention and assisting victims, I feel that there is a significant need from the legal system to stay a step ahead when it comes to technology across the board, and the case of using tech for domestic abuse is no different.

The criminal justice system intervention in domestic abuse took over twenty years to get where we are today.  And it is far from being perfect! In the early 1970s, the law required the police to either witness a misdemeanor assault or to obtain a warrant to arrest. Only in the late 1970s warrantless probably cause arrest laws passed. In the late 1980s, after the Minneapolis Domestic Violence Experiment was published showing that arrest was the most effective way to reduce re-offending many US police departments adopted a mandatory arrest policy for spousal violence cases with probable cause. When it comes to domestic abuse, it seems however that the first judgment call on whether to proceed with an arrest is whether or not there are visible and recent marks of violence.

Psychological abuse is much harder to prove, and the process puts a huge burden on the victim who, in most cases, is reticent to come forward in the first place. This is what is concerning about how tech can play a role in domestic abuse, and gaslighting in particular.

I am no criminal law expert, but it seems to me that the legal system should not only be educated about how technology can be used to victimize but also, and maybe most importantly, how the same technology can provide information to back up the victim’s story.

We always walk a fine line between civil liberties and policing, but recent history has proven that rushed decisions made in response to an incident as rarely the best. Technology is on the path to get more sophisticated and smarter, at times beyond human comprehension, and sadly the world in recent years has shown that there are plenty of people looking to exploit tech for evil purposes. Hoping for the best is no longer an option.

News You might have missed: Week of June 22, 2018

Instagram new TV: IGTV

On Wednesday, at an event in San Francisco, Instagram announced a standalone app to watch long-form vertical videos. The app is called IGTV and it will also have a dedicated button inside the Instagram app. IGTV will launch on iOS and Android and will allow content creators and the public to post videos that can be up to 10 minutes long to start, growing to a full hour over time.