Author: Tim Bajarin

One of the big themes at CES the past few years has been the explosion of IoT and smaller connected devices that permeated hundreds of booths at the show. In fact, at the Sands Convention Center, there were areas for things like the connected home, connected health and wellness, and connected appliances. Charmin even had a booth showing off a robot that would deliver TP to you if you need it and other weird ideas, including a Porta Potty concept that was unique.

Add to that the sprinkling of connected and smart cars over at the LVCC and talk about devices at the edge in company press conferences from big and small vendors who want a piece of the IoT action.

For the early part of my career, there were just two major operating systems that drove the PC market. Windows and Mac OS were what made PC’s run and tick and helped grow that market. These two operating systems were the only acceptable operating systems for PCs until 2012. This was when Google released its Chrome OS, for what at the time was a relatively low-end laptop with very few capabilities other than to use this OS to connect to clouds base apps and service. Since its introduction, Chrome OS has gotten smarter and richer and is quickly becoming the OS of choice for schools. And with the recent versions of Chrome OS and more powerful Chromebooks, it is now being touted as an ideal computer for consumers too.

Then when smartphones and mobile accelerated starting with the intro of Apple’s iPhone in 2007 and continuing to today, the OS wars are pretty much just IOS and Android.

In both cases, users had to take sides and commit to one or the other platforms for PCs and smartphones and, in turn, adopt the application ecosystems that support their OS of choice. What I find interesting is that the yearly unit sales of PC’s topped out at around 380 million a year and today hover around 260-280 annually. With smartphones, unit sales are astronomical. Smartphones are selling in the billions per year, upping the OS ante considerably.

When industry leaders look at the IoT and the connected device market, they gush over the possibility that we could see as many as a trillion connections each year. This will come via a plethora of devices, and connections to street lights, fire hydrants, you name it, each with some wired or wireless connection.

In the past, both PCs and smartphones seemed to settle around two platform fundamentals, OSes and complete hardware, apps, and even special services tied to these operating systems. But as we enter the era of IoT and connected devices, with its promise of trillions of connections, we have many OS contenders trying to take a dominant position to get the most significant piece of this trillion connected device market.

As of this date, there are six main IoT and connected device operating systems. Within this outlook as well, includes a wide range of standards as well without a clear standards forum winning as of yet.

Samsung is developing a richer version of Tizen as its IoT OS contender.

Goggle has options around Android Things and potentially Fuscia in the future. Google’s IoT platform is powered by its Cloud IoT Core.

Huawei is working on a new OS for smartphones that can also be used for IoT called HarmonyOS.

Amazon comes at it from the cloud-down using AWS IoT solutions, paired with Alexa as an interface.

And Facebook is working on its OS, initially designed for smart glasses, but they suggest this OS could be used on other devices as well.

Add to the many embedded operating systems that want a piece of the IoT action and the Open Source Open Sync software that can connect different IoT devices. You can see a new Battle Royale for IoT OS supremacy emerging that makes the Windows/ macOS and iOS/Android wars seem tame.

Microsoft is also doing lighter versions of its operating system to try and scale them down so they can be used for IoT connected stand-alone devices too. Microsoft also comes at IoT from a cloud-down standpoint using the Azure cloud to connect intelligent endpoints to the cloud.

Apple also has HomeKit, which is less an OS and more a connectivity solution to work with iOS and Mac devices.

Although we are in the early stages of IoT, hardware, and software vendors are searching for a rich OS for these connected devices. Most hardware companies I talk to say they will test drive a couple of these IoT OS engines before they make final decisions on which one to back. Likewise, Software developers may test various IoT operating systems before they choose the one that meets their specific needs.

The market for IoT devices and what it will take to make them work and fit into any companies long term plans to be a player in IoT will be the next hard-fought battle in the world of OS wars. At this point, I don’t see a clear winner, and this is one area where we may not expect a winner take all environment but rather many players having to work together.

I have been doing a series for Forbes called Looking Back and Looking Forward, where I look at a few companies I follow and share thoughts about their failures and success in the last decade. I also speak to their CEOs or a top exec from each company to hear their thoughts about their vision for the company in the upcoming decade.

This link sets up the idea of the focus of this Forbes series and explains why I wanted to do this series. My first piece in this series was on Dell that posted last week. Here is a link to that story so you can see an example of this series that is in the works.

As I was researching this series for Forbes and doing a ‘last decade’ trend analysis, there was one major story that kept coming up, and that was the role the smartphone played in shaping what happened in tech in the last decade. Without smartphones, we would not have had ride-sharing services, the acceleration of mobile payments, mobile navigation, and hundreds of things that a smartphone-enabled in the last ten years.

I have always felt that the economic benefit and impact of the smartphone was much broader than the smartphone itself but had never seen its economic impact quantified until I received this Statista chart below in an email over the weekend. It comes from a Deloitte analysis of Apps Annie and others and states that the smartphone economy is estimated to be almost a trillion-dollar business by 2020.

One number on the chart that I had looked for over the years has been the accessory business. Deloitte estimates it at $77 billion, and I am not surprised at this projection. The iPhone was introduced in January of 2007, and by the next CES, there were already 50 or so booths at the show, which had many types of smartphone cases, third party power plugs, and cords. At this year’s CES show there will be hundreds of booths peddling a plethora of products and accessories related to smartphones and other handheld mobile devices. Add to that the thousands of sites around the world, many listed through Amazon, that carry every kind of smartphone case imaginable and various cords and dongles, and it is not hard to see the size of the accessory business skyrocket in the last decade.

Deloitte’s analysts put the wearable business, which has been deeply tied to smartphones in various ways, at $25 billion, smart speakers at $9 billion, and music at $10 billion. Besides the actual revenues tied directly to the smartphone itself, mobile advertising at $176 billion has been a significant driver pushing the smartphone economy to the one trillion economic benchmarks. Only in the last decade has mobile advertising exploded and added significant revenues to the smartphone economy.

This does not even take into account the earnings the telecoms have made through smartphones via data plans and the money they make by skimming parts of the advertising fees that go through some of their networks.

I realize that when Steve Jobs introduced the iPhone, he proclaimed it would change the world, but I don’t think that in his wildest dreams that it could be responsible for a trillion-dollar industry that started with the iPhone.

Now think about the smartphone, 5G, IoT, and all things mobile over the next decade. If the smartphone begat a trillion-dollar industry, imagine what the total economic impact of these new technologies will drive by the end of the next decade.

As in the last decade, there will be applications and services that we have not even thought of that could spring up to spur new uses for the iPhone. 5G will connect to sensors, and potentially millions of devices at the edge, perhaps managed through a smartphone.

One big question for the next decade is if demand for new smartphones themselves can continue to grow as they did in the last decade. In the chart below, IDC points out that the smartphone market is in a Pre-5G slump. Many people will be waiting for 5G networks to become widely available before they buy up to a 5G phone. IDC’s numbers point to a decline in demand in 2019 and not seeing a bump up again until 2023.

The impact of 5G on smartphone demand will happen at some point, but 5G smartphones will be expensive for the first three years, which would partly explain IDC’s bearish view of smartphone demand through 2022.

Regardless of a potential slowdown in smartphone demand at the beginning of this next decade, I would not bet against the fact that the smartphone economy could end up closer to being nearly a two trillion dollar market by 2030.

Ever since Xerox announced their hostile bid to merge with HPC, I have received many calls from press and friends who know my historical connections to both companies.

For 30 years, I have covered HP’s PC business and on many occasions, consulted with them in various projects. When HP introduced their first PC in 1984, I was at this launch, and it was notable and memorable for me in that I also got to spend time with HP Co-Founder, David Packard, who was just about to retire.

I helped HP start their original Industry Analyst Council and on various occasions, worked with top Sr management on everything from strategy to PC and laptop designs over the years. In the case of Xerox, I served four years on the advisory board of the Xerox Venture Fund and worked closely with Xerox and Xerox PARC to commercialize IP created inside PARC. As a result, I got to know a lot about Xerox products, culture, and, more importantly, how they worked. I was in Beijing when the word hit that Xerox was making a bid for HPC.

My immediate reaction was that Xerox taking over HPC, and especially the PC division, would be a disaster. One thing I knew from my time with Xerox is that they in no way are a PC company, and their marketing skills when it comes to technology are not the greatest.

My second reaction was that there would be a major culture clash. These companies are managed very differently and have extremely different cultures. Merging them would be a major, if not an impossible challenge.

My third thought was that it did not make sense for Xerox to bid for the PC business. This is an area they tried their hand with in the early days of the PC, and it was a total failure. The PC business is a very different one that Xerox still excels at, and I think it would be more of a problem for them to try and keep this business should this merger ever go through.

On Monday, Xerox started making their bid to HP shareholders and argued the following:

Xerox (XRX -0.8%) says it has started meeting today with HP (HPQ +0.2%) shareholders to make the case for its proposed $33B merger of the companies.

In a new investor presentation, XRX argues the combined company would be worth ~$31/share to H-P investors on a Pro-forma basis and would generate $4B-plus in free cash flow in the first year before taking any synergies into account.

XRX already has said it sees the combination creating ~$2B in synergies, which could be achieved in 24 months; the new presentation goes further, saying a merger would allow cross-selling and a unified platform for clients which could yield $1B-$1.5B in revenue growth.
H-P last month rejected XRX’s unsolicited, cash-and-stock offer worth $22/share, arguing it undervalued the company, which prompted XRX to say it would take its case straight to H-P shareholders.

If you read this Xerox presentation carefully, you will see it mainly focuses on the financial goals and more importantly, the synergy of both of their printing businesses. Xerox also sees it as a service arm for HP’s PC business, especially SMB, but if I read this right, it does not do much for HPC’s enterprise business and goals.

My biggest fear if this merger goes forward is that HPC will suffer greatly under Xerox leadership unless they spin it out and let it run as a wholly own subsidiary, without the printing business. What Xerox really wants, besides the combined incomes, is HPC’s 3D printing technology. Xerox and HP’s printing business would have many synergies and could end up as the powerhouse in printers and especially 3D printers, which will be a very profitable business in the future.

The unknown in this deal at the moment is Carl Icahn. He has entered the process, and given his history, he would want a controlling interest in the combined companies. Then, once, combined, he would spin off or sell some of the technologies or groups and leave the combined company weaker.

One way that HP could counter this move by Xerox and Icahn would be to spin out the PC business ASAP and operate it as its own entity. That would lessen the total value of what Xerox wants. That way, the PC company could operate more freely, and without the printer business taking resources away from them, that is really needed to stay competitive.

Since Xerox is most focused on HP’s printer business, with an eye on HP’s 3D printing technology, they may still want to go through with a deal even if the PC division is spun off.

If not, I am afraid that if the deal goes through as Xerox would like, HP’s PC business would be deeply impacted and not in a good way.e.

One of the most popular tech products I use a lot is the Bose Noise Canceling Headphones that fit over my ears. I have carried them with me on trips for over a decade, and they are just part of my carry-on items when I board a plane, train, or take some R&R at the beach or in a park.

In the case of airline travel, the noise canceling feature drowns out the droning of the plane’s engines and gives me a quiet dome that keeps my area relatively peaceful, given my surroundings.

Although I have many other over-the-ear headsets, the few I have that include noise-canceling, are the ones I use the most. I do have another Bose set of wired earbuds that include noise-canceling features, but I find the over-the-ear models deliver the best quality in sound and noise reduction.

Ever since Apple introduced their AirPods, I have longed for them to include noise-canceling features given my need for this type of technology. This is a request I have made directly to Apple execs for the last two years and thought they were falling on deaf ears.

While I wanted AirPods of the future to have noise-canceling features, I could not figure out how Apple could help co that in wireless earbuds. These earbuds are small marvels, and Apple had already packed them with high-quality audio, Bluetooth radio, and excellent design. Asking for the noise canceling, I thought, may just not be possible given their size and design.

While these are great earbuds, I believe they are more than that in Apple’s grand scheme for AR and mixed reality. As I have written before, AR and Mixed reality are Apple’s next big thing, but the actual hardware in terms of goggles or glasses is still at least 2-3 years out at best.

I believe the first generations of these goggles or glasses will be tied to the iPhone for the foreseeable future. This is one way Apple can extend the iPhone franchise for at least another 5-6 years. But by mid-decade, I have no doubt that Apple plans to move all of the intelligence to the AR/Mixed reality headset itself and make it a computing platform in its own right.

That said, Apple’s AirPod Pro’s is another key technology that Apple needs to deliver AR and mixed reality headsets in the future. At the moment, the technology to deliver audio and noise-canceling is in the form of these earbuds. But what they learn from the development of the AirPod pros will serve them well when it comes to embedding audio into AR and mixed reality goggles or glass in the future.

Of course, they could keep them in their current form, and they would augment these headsets. On the other hand, audio built into the glasses or goggles would be a more elegant solution if it can be done.

One big question around audio for me relates to Apple’s acquisition of Beats. When they made this purchase for $2 billion, I honestly questioned its value to them. Bose, Sony, and other’s already dominated this field, and while Beats was gaining ground, I had a hard time figuring out how this fit into Apple’s overall plans.

I now wonder if Beats had in their labs the core architecture that is now in the AirPods and Airpod Pros, and Apple was able to gain the engineering talent and patents within Beats to create the great audio we now have in both of their Air Pod models.

Regardless of any Beats contributions, the end result is that Apple has created its first AR-based hardware device that I believe will be a strategic part of their eventual AR and mixed reality headset program. And we now know that Apple can create high-quality sound in very small ear pods, which bodes well for using this proprietary IP in any AR and mixed reality headset or glasses they eventually bring to the market.

I have been covering the PC industry since 1981, which means I have watched the tech world develop over a four-decade period. The advances in tech come fast and furiously, but each decade has its own focus. For example, the decade from 1980 to 1989 saw the birth and growth of the personal computer industry, and most of that decade was focused on PCs in business and on productivity.

Starting in 1990 and for most of that decade, we saw the growth of laptops and portable computing, and thanks to things like multimedia and desktop publishing, the PCs in the 1990s began gaining ground with prosumers and consumers. Multimedia computing, driven by the introduction of CD ROM’s and new multimedia software, made the PC a product for consumers and started to become an important educational tool in the home.

2000 to 2009 saw the PC become cheaper, and laptops became more powerful, yet thinner and a bit lighter than they were in the 1990s. In 2001, Apple introduced the iPod and changed the face of portable music consumption. In 2007 Apple introduced the iPhone, and by 2009, the iPhone and Android smartphones, thanks to apps and services, evolved to become an early version of the more powerful pocket computers we carry with us during the last decade.

In 2010, Apple introduced the iPad, and, according to Steve Jobs at the time he launched the iPad, the iPad could “someday replace a laptop.” While that has not happened yet, the iPad and tablets have had a pronounced impact on the world of portable computing, and with Apple’s most recent introduction of the iPad OS, their tablet is on a path to potentially duplicating most of what a person does on a laptop.

The 2010-2019 decade saw the explosion and true impact of social media, for good and bad. At the end of the decade, we got a glimpse of what the future of smartphones might look like thanks to the introduction of Samsung and Motorola’s foldable smartphones. In early 2019 Lenovo introduced their foldable laptop, the X1 Foldable. This could lead to the next decade being one where foldable smartphones and laptops drive new innovation in mobile computing designs.

As I look back over this last decade, I find that so much of what really happened in the world of tech was not part of any forecast for the new decade in terms of accurate futuristic forecasting.

In fact, In 2009, could anyone have predicted the following?

• Facebook and Twitter would have an impact on a presidential election? That by the end of the decade Facebook, Twitter, and Google would be the interest of governments around the world regarding their management of customers data, privacy and security?

• Smartphones would enable brand new services like Uber, Lyft, food delivery services, etc.

• Smartphones as navigation tools, which allowed companies like WAZE to be born and the major smartphone vendors making GPS and maps a central tool that a smartphone could deliver.

• Smartphones’ impact on the camera industry. Although Apple introduced the iPhone in 2007, it did not really take off until Apple began populating their site with iPhone apps in 2010. At that point, the demand for Phones really grew, and during the last decade, the cameras on smartphones became better and better’ Now they are the primary way people take photos. The iPhone camera in 2007 was minimal at best while the iPhone cameras today are verging on DSLR territory.

• Streaming music, video, VOD, and its impact on the cable, cellular, music, and movie industries. For the cable business streaming has caused cord-cutting in droves and has threatened the cable industry. On the other hand, it has been a boon for the music industry, and Hollywood and the cellular industry has benefited greatly since their customers need more data for streaming services, which allows them to bring in new revenues they did not have in the last decade.

• Tesla and electric cars- Although Tesla started in 2003, the previous decade was more for R&D and setting up its supply chain and manufacturing. The Tesla Model S arrived in 2012, and over this last decade, demand for electric cars and electric hybrids have skyrocketed. In 2009, most bets were that Tesla would not survive. Now it is leading the entire auto industry into the era of electric cars.

  In the auto industry, we saw advances in back-up cameras, in-car navigation, automatic braking, and adaptive cruise control. In the next decade, they hope to bring us self driving vehicles and vow to make their cars smarter and safer.

• Smartphones as a ubiquitous pocket computer.

• In 2009, many were still on the fence about the importance and impact the iPhone and smartphones would have in the future. But by 2010, when Apple opened its apps store and began greater innovation on the iPhone design and functions, along with the introduction of smartphones from Samsung and others using Android, smartphones became the one digital device we all carry with us today. Its impact on our mobile computing capabilities and the way it is used to call rideshare services, order food delivery, make mobile payments, navigate to a designated location, etc. make it the most valuable personal computer we have today.

• Mobile payments-Enabled by smartphones and in China today is the way most people pay for just about anything they buy.

• Cryptocurrency, Bitcoin, and Blockchain – This emerged mid decade and picked up steam over the last five years.

AI and ML-These technologies have been around for over 30 years but really only began to be used in broader applications and services over this last decade.

I do not know of any forecasts at the end of 2009 that predicted most of the things mentioned above. While Tesla, Facebook, Twitter, and others launched in the 2000s, their impact was not felt until this last decade.

As one who has put out next year forecasts since 1995, I might be tempted to tackle the next decade forecast too. But as I review the shortlist of things that happened in the last decade, there are only two items that I felt would be transformative in that decade, and that was smartphones and streaming music. I missed streaming video and most of the rest of those mentioned above.

However, as I look towards the next decade, I think there are at least four sure bets in terms of technology advances that could really be impactful from 2020 to 2029.

The first is 5G. I think that 5G, with its ultra-high-speed wireless capabilities and broad reach, will be one of the most transformational technologies in the next decade. Higher speed wireless networks will enable a whole host of new types of applications and services, many we can’t even imagine today.

The chart below predicts global 5G adoption, and from the other research reports I have seen on this subject, the numbers Ericsson suggests in this chart from their Mobility Report, seems on the money. By the end of the decade, 5G will impact smart cities, smart cars, smart homes, smart manufacturing, and a plethora of other applications and services and become the backbone for most communications at all levels of business and personal mobile applications.

The second will be the evolution of smart cars and automated vehicles. I have no doubt, given what we see in the tea leaves in automotive research today, that by the end of the decade, we will have level 5 fully automated self-driving cars and the broader building out of smart roads and smart cities.

The third will be the role and impact AI and ML will have on technology applications, services, and products during the next decade. AI-based robots embedded with ML capabilities could take out millions of jobs that are repetitive and clerical. It could be critical for next-generation medical research and diagnosis, and there will be no business or industry that will be untouched by AI and ML by 2029.

The 4th technology that will be big in the next decade will be AR and VR. Today both are used mostly in vertical applications and training, but by the end of the new decade, I believe AR and Mixed reality will go mainstream by mid-century and could become the next big mobile computing platform impacting both businesses and consumers in big ways.

Bonus prediction:

Quantum Computing, by most accounts, is still in its infancy. But we see advanced research in Quantum Computing inside top scientific and technically focused universities, as well as inside big corporate research centers like IBM, Intel, HP, and many more. I suspect that by the end of the next decade, Quantum Computing will be highly defined, and semiconductors, applications, and services will be launched by late in the next decade to deliver the promises of Quantum Computing.

While those four or five things seem plausible, who knows what other technology breakthroughs or evolutions, we may see become a reality in the coming decade. I just hope that I will live long enough to see what this next decade will deliver in the way of technical advances and innovative and disruptive changes to the way we work, learn, and play.

Two weeks ago, I spent an entire week in China. This is a country I have visited many times over the last three decades. I first went to Guangzhou in 1991 and saw first hand how oppressive the Chinese Government was. During that trip, I had to be escorted by a Chinese official at all times, and the only privacy I had was when I was at my hotel. My next trip two years later was to what was then a very rural Shenzen, which has been transformed from what once was an agricultural province to what it is today, the technology hub of southern China.

Over the years, I have seen China go from a highly controlled agricultural nation to one that has become an economic powerhouse. Its progressive shift in its political landscape has opened the doors for a broader sharing of the wealth. It has become a low-cost manufacturing behemoth and made it much freer for people to get around, explore the world and in many cases, buy cars, condos, and other goods that were out of reach for most Chinese citizens even 15 years ago.

Every time I am there, I marvel at the new buildings and complexes going up that make China look very modern. The building and growth during China’s economic boom are substantial. On the way to and from the new Beijing airport, I saw Tesla, Mercedes, and many high-end car dealerships along the main highways in Beijing. The complex I was working at had a KFC, Subway, and Baskin-Robbins on its property.

However, even though China is not as closed or oppressive as in its past, there is no question that this is still a Communist country, and technology has allowed China to actually track their citizens in great detail and even control how they buy and purchase products for everyday needs.

Just to get into China, when going through security, I was fingerprinted three times, had my picture taken two times, and had to be clear where I was staying and what I would be doing when in China.

However, one of the more interesting things I encountered since the last time I was there was the total shift to mobile payments. Thanks to mobile phones, China is becoming a cashless society. Everyone in just about every age group uses some form of mobile payment system to purchase anything they want. Credit cards can only be used at major hotels or high-end shops. They can also be used in Taxi’s, but these drivers will not accept cash anymore.

Twice, when I went into a convenience store near my hotel, I literally had to go and find a worker and show him Chinese Yuan’s and pointed to the single cash register they had, so he knew I wanted to pay cash for some small food items I wanted to purchase. The store had seven kiosks where people could scan their items and then use AliPay or purchase these items. These kiosks would not handle any type of credit card.

That is the Catch 22 for foreigners. If one wanted to use Alipay or WeChat Pay, one would need to set up an account with a Chinese bank. But Chinese banks, except in rare cases or unless a foreigner has established residence in China, will not allow foreigners to set up any type of bank account in China for any reason.

Trudy Rubin writing a syndicated editorial on this subject points out:

“The country’s astonishing 40-year leap into modernization created the illusion (until recently) that this ancient civilization was becoming more Western. But Beijing’s indifference to the impact of its cashless society on foreigners reminds us that a rising China is determined to do things its own way.”

Ms.Rubins’ article, linked above, is worth reading as her perspective on some of the troubling paradoxes of New China is spot on.

But her final comment in this article is worth highlighting:

“But one thing is certain: While China is connected to the world, the world will have little say in shaping its future system. And foreign visitors will have to figure out how to navigate in a cashless society where their credit cards don’t work.”

For most of my early life in tech, Apple was a computer company. But not long after Apple introduced the iPod and began to diversify beyond personal computers, Steve Jobs dropped the term Computer from the company’s name and just called the company Apple Inc.

Apple’s influence on the market has been substantial, and its impact on computing started with the Apple II and accelerated with the intro of the Mac. More importantly, for the industry, with the Mac, Apple introduced the graphical user interface, the mouse and WYSIWIG computing, via desktop publishing.

But if you look back over Apple’s 42-year history and view their impact in terms of user interfaces, one could argue that Apple has, to date, delivered four revolutionary user interfaces, starting with the Mac. Up until the Mac was introduced, all computer interfaces where numerical or alphabetically typed into the computer for input and was the main user interface between man and machine.

But the Mac changed this. The Mac brought GUI interfaces to the computing mainstream and influenced the next generation of the man-to-machine method of interacting with a computer. The Mac’s GUI influenced Microsoft to follow suit, and since then, GUIs have dominated the way we interact with computers. Then in 1991, Microsoft added a touch to the UI, and while it did not catch on then, touch is now another key way we interact with PC’s

When Apple introduced the iPod in 2000, they again added a new way to interact with a digital device. With the iPod, they brought the flywheel and push/touch to navigate and activate the songs you may want to hear on the iPod.

Then in 2010, Apple introduced the iPad and brought another new way to navigate on a device. The interface on the iPad itself was unique to tablets, as was the way one used touch to initiate apps and services. Tablets themselves date back to 1989 and starting with the Grid computer, which used both keyboard and pen interfaces. Then in 1991, Microsoft pushed Pen computing, also adding a pen to the UI. But it took Apple to really make touch interfaces a mainstream way to work with computers.

Interestingly, one other man-to-machine interface that has emerged is voice. Voice interaction with a computer was more science fiction until Amazon brought Alexa to market a few years back. Since then, Google, Apple, and others have made voice interaction with computers more mainstream, and voice UI’s are now part of our daily interaction with all types of computing devices.

If you are counting, Apple has arguably influenced three major ways to interact with computing devices and has had the most impact on man-to-machine interfaces to date. But Apple had recently added another major digital device UI when they introduced the Apple Watch. Some might not think of Apple Watch as a computer, but it is exactly that. A computer on your wrist.

In the last two weeks, I have written about Apple’s quest to deliver smart glasses that would be a mixed reality headset. Financial analyst Ming-Chi Ko has predicted that Apple would introduce a pair of AR glasses in 2020, and I wrote that I was extremely skeptical of that date. Since I wrote that piece, Apple apparently told Apple employees in a company communique that the first AR headset, would not come to market until 2022, the original date I suggested in earlier columns. The note reportedly added that they hope to bring more eyeglasses like AR headwear the following year in 2023. This is what the supply chain has told me all along.

While we do not know exactly what Apple will deliver in the way of AR or mixed reality headwear, you can be that it too will eventually be a computer in its own right. And with it, Apple will bring to market new ways to interact with these headsets by adding gestures, eye tracking, and some other interface technology we can’t even imagine today. If this scenario plays out, Apple will have influenced a 5th new way to interact with a computer.

To be fair, we already have mixed reality headsets that use gestures and eye-tracking, but the technology used to deliver these new interfaces are still primitive in nature. Knowing Apple’s ability to design ease of use into their products, I have no doubt that while Apple may not be the first to make gestures and eye-tracking available, I am pretty sure that the method they use will be the one that gains the greater acceptance with the mass market.

Apple will have this type of influence again because of its vertical integration. They control the hardware, semiconductors, software, and services, which gives them a real edge in delivering a total solution in the end. I suspect that once Apple brings whatever AR headset they finally bring to market, this product could formalize another new way to interact with a computer, which would add to their continued record of impacting the way man-to-machine interfaces drive our interaction with a new computing idea and platform.

In my last two columns, I wrote about the future of mobile computing and stated that I believe that by the end of the next decade, the computer of today morphs into mixed reality glasses, and they become the computer of choice for the masses. These products could cause the mobile computer we use today to fade into the background, and while laptops and foldable computers may still be used for heavy-duty computing tasks, I surmised that mixed reality glasses could at the very least replace our smartphones of today. If they have enough power to handle most personal computing tasks, they could end up being the only computer many people use in the future.

Predicting ten years out is always dangerous, but I have a history of forecasting major industry inflection points. I wrote about desktop publishing two years before anybody even knew what that meant. I wrote about major advances in portable computing five years before we saw the first true clamshell hit the market. I also wrote about pocket computing four years before Palm introduced the Palm Pilot and shared a conceptual idea about what became the smartphone six years before we saw the first ones in 1998.

While I believe mixed reality glasses will be at the heart of portable computing in 10 years, a couple of readers asked me what I thought would be the next major step in mobile in the next decade. To answer this question, I wanted to give you a historical background on mobile and put my answer in the context of this history.

I began covering the PC industry in 1981 and was one of the first professional analysts to study and chronicle the PC market. Over 38 years, the PC industry has produced close to $3 trillion in revenue and created a lot of wealth and jobs for people who create PCs, PC software, and services that support them.

At its height, the PC industry sold close to 380 million PCs a year. The demand for PCs has decreased in the last ten years, but PC makers still sell about 270 million PC’s and laptops each year worldwide. Today, the majority of personal computers sold are laptops and notebooks. While desktop computers are still made, they represent only about 15% of all PC’s shipped today. The real PC workhorses that fuel a much more mobile business lifestyle are notebooks and laptops that drive today’s productivity, education, entertainment, and social media applications.

I have watched the evolution of the laptop very closely over these 38 years. In fact, I was at CEBIT in 1985 when Toshiba introduced the first-ever clamshell laptop, a design that the PC Industry embraced and has popularized for over three decades. That same year I began to work with IBM on their first clamshell design that eventually became their ThinkPad line of laptops.

What is ironic about the clamshell design is that until 2012, there was very little innovation in terms of design changes to the clamshell form factor. The first break with traditional clamshells came in 2012 with the introduction of what Intel called “2 in 1’s.” These were fundamentally a tablet with a detachable keyboard. Some called them “hybrids.”

Being able to break the stronghold of the clamshell design was partly due to Microsoft’s newest OS that added a pen and touch support and other features that came out to support their first Surface hybrids in this same year. One could argue that Apple forced this design revolution with the introduction of the iPad in 2010, which also included a detachable keyboard and a touch UI, but its focus was on being a tablet, not a laptop replacement like the 2 in 1’s were from the beginning.

Since the 2 in 1’s emerged, there has been a lot of experimentation in the area of portable computing. We have seen dozens of hybrids and 2 in 1’s in many form factors and designs. Laptops have also become thinner and lighter. However, these types of mobile computers have not really caught on. They represent no more 10-15% of all laptops and notebooks sold today.

If you take a historical look at the trends in portable computers, from 1985 to 2012 would be called the clamshell era. From 2012-2020, it could be seen as the hybrid era. Now, as we are about to enter a new decade, we are about to enter a new era of mobile computing as the advances in technology components are accelerating. Over the next decade, mobile computer makers will have a host of new technologies to work with, from new battery chemistry that could power a laptop for a week, to new low voltage semiconductors that have enough power to deliver 3D holographic images to mobile screens. The most promising technology to impact this next decade will come with the perfecting of foldable screens that could be used in laptops as well as smartphones.

An early example of a foldable laptop was introduced by Lenovo in May at their customer, even in Orlando, Florida. It sports a 13 “screen that folds in half. Lenovo showed this to me recently, and I got to test it out, and while it is still a prototype, it is well designed, and they solved one of the biggest problems with any foldable devices. They have developed patented hinges that move with the fold and make it possible for the screen seems to stay in place no matter how many times you fold it during its life. The quality of this device is excellent since it was designed by Lenovo’s Yamoto team that created the ThinkPad line of laptops. There is no date for its release yet, and most other laptop vendors are working on similar models that could debut at CES in January.

I think the next decade itself will introduce the era of foldable computers and smartphones, and folding screens will drive the most innovation in portable computing designs. We will have innovation in processors, storage, and battery technology, too, but I believe the introduction of folding screens will drive the biggest change in mobile design and form factors, and in 2030, a new era of mixed reality glasses will drive that next decade of mobile innovation.

In last week’s column, I wrote about the potential of Apple introducing a set of AR glasses in 2020. I pointed out that financial analyst Ming-Chi Ko has repeatedly written to his clients stating that Apple will bring their first-generation AR glasses to market in the new year. I wrote that while I am still skeptical they can get powerful AR glasses to market in 2020, Ming-Chi Ko pipeline into Apple’s future products is so often correct that I cannot dismiss that this could be a possibility.

I also built a case as to why Apple might do a version of AR glasses in 2020, way before I believe that the technology will be ready to create AR glasses that will be acceptable to the mass market. I reasoned that Apple, as in the past, could introduce a model that would be acceptable to their early adopter customers as they did with first-generation iPods and iPhones, and use the first two years to learn from people using these glasses. Even in their early form, they could fine-tune each model, and a generation three version of AR glasses could be the kind of product that would really get the attention of a broader audience. It was the third year of the iPod and iPhone that they really took off as Apple enhanced these products over the first two years and added more software and services to them, which caused them to cause much more demand for both products.

Regardless of whether Apple will be the first to bring a successful set of AR glasses to market or some other company gets this concept right, I believe that AR and mixed reality glasses will represent a major turning point for the PC industry.

From 1978 to 2007, computers were defined in terms of desktops and laptops. In 2007, Apple introduced the iPhone and basically gave us a computer in your pocket. With the iPad, Apple introduced a successful tablet computing concept to the market, and with the Apple Watch, we got a computer on our wrist.

But with AR and mixed reality glasses, we may be entering the era of the vanishing computer. This is not to say we still won’t have desktop PCs, laptops, smartphones, tablets, and even wristwatch computers in our lives for many more years in the near future. But with AR and mixed reality glasses, it is within the realm of possibility that the personal computer fades so much into the background that it is not noticeable at all.

Early generations of AR and Mixed reality glasses will all be tied to smartphones, which will serve as the brains behind these glasses at first. In fact, I believe the smartphone will power AR glasses for most of the next decade. But by the end of the decade, all of the intelligence will be in the glasses themselves and become the central computer of our digital lifestyle.

Glasses have been in use for close to two centuries. Today they fade into the background and, while they provide important optical functions for those who use them, they have become stylish and fashionable. And in a lot of cases, we don’t even notice them on people who use them as they have just become part of their lives and fashion statements.

AR and mixed reality glasses, by the end of this decade, will embody all of the computing power we need to manage our digital lives. We may still need other forms of computers, mostly laptops tablets and maybe smartphones, to supplement some of our productivity workloads. However, AR and mixed reality glasses may have most of the functionality we need to live and interact with our digital world. We will use voice commands to get the info we need. We will use gestures to navigate AR and mixed reality environments. It will deliver nearly 100 % of text-to-speech translation and have live video features so you can talk to friends either in virtual rooms or in your actual surroundings.

From the time people started using AR and mixed reality glasses, even in its early form, they are starting down a road from the computers of their past and entering a new age where the computer disappears, and it becomes deeply integrated into their much more futuristic digital lifestyle.

While some people today see AR and mixed reality glasses merely as a novelty and some even question its value altogether, I believe these glasses represent the future of personal computing.

Ever since financial analyst Ming-Chi Kuo wrote recently that he believed that Apple would bring their first set of AR glasses to market in 2020, a lot of people in the Mac community have been wondering whether this rumor is true, and, if so, what would they look like.

Ming-Chi Kuo prediction success rate is pretty good so, when he says this could be in the hopper, I actually take notice and dig a bit deeper to see if there is any truth to his speculative notice to his clients.

It is no secret that Apple has bet big on AR. That was made clear at WWDC in 2017. If I needed any convincing that Apple was really committed to AR and that it will be a huge part of their future, that was confirmed to me when Tim Cook appointed Frank Casanova to lead this group. Frank has been with Apple since the mid-1980s and is one of their most trusted project and product leads. Although he likes to work more in the shadows, giving him the lead of AR speaks volumes about how important AR is to Apple.

I understand that he has been overseeing the internal AR development as well as directing third party software and partnerships since he took over in 2018. And to date, most of what Apple has delivered in AR so far have been software related. While software AR apps and tweaks to the iPhone to support AR are a key component in Apple’s AR strategy, it was no secret that Apple has AR glasses in the works too. Multiple patents have been filed over the last four years related to AR glasses, so we know they are at least in the works in the works. Although Apple files many patents and not all come to the market, this one seems to have a lot of legs.

However, after talking to key players in the supply chain and research our company has done on what consumers would even perceive as acceptable, I am certain that the technology that would garner broad mass adoption of AR glasses is still not available. The supply chain folks we speak with say that it is at least 2-3 years away.

So the idea that Apple would bring AR glasses to the market in 2020 makes me a bit skeptical. I have written that I really did not think Apple would introduce any AR glasses before 2021-2022 based on the info I had from the supply chain. Add to that the research we have that suggests consumers don’t want any headgear that looks like goggles and make them look like a geek and instead want them to be more like traditional glasses.

But there is a case that can be made for Apple to introduce what I would call a “consumer experimental’ first-generation model that they could get strong feedback from “early adopters” who would fork out any price to be the first to have Apple’s AR glasses.

Google tried this out with their Google Glasses in 2013, but it failed miserably.

A key reason for its failure was that it did not have have any applications or services tied to it and was more a novelty than a real product. Also, it was more a beta than a fully cooked product, but Google felt it was worth it to get feedback on it to help them determine if they should back this idea or not.

On the other hand, should Apple introduce an early version of their AR glasses, Apple has already spent two years working with software developers and many partners to create AR apps, games, and services that work on an iPhone. Taking those apps now and adding AR glasses as an alternative delivery method would be the next natural move anyway.

There is actually much precedent at Apple to do an early version of AR glasses. In my conference room tech museum, I have the original iPod and iPhone. Both are a shadow of what they looked like two years later as Technology became better for both, and the software and services expanded and made them more useful.

You could almost say that for Apple, third times the charm. Apple introduces an early version of a product, gets a good buy-in from the early adopters, works the third party software and services harder now that they have a product on the market to work with, and drives it to greater success. Then, year after year, as the Technology gets better and Apple applies advanced Technology to new models that transform the product well beyond what they introduced in its first generation, the product starts to take off and drive a new market segment for Apple to exploit via hardware, software, and services.

If the current patent designs are accurate and represent the first generation of AR glasses for Apple, they could be more like a goggle form-facture in nature at first and become more streamlined to look like normal eyeglasses by year 3 or 4. These first AR glasses will derive all of its intelligence from the iPhone and be more of an extension of the AR app yet deliver via glasses.

Indeed, I believe that for the first four or five years of any glasses Apple brings to market, that the iPhone will be its brains, and the AR glasses will be an additional screen that can be used to enhance Apple’s AR apps initially written for the iPhone. The glasses will add more functionS and introduce new UIs such as voice, gestures, and perhaps eye tracking that can also activate an AR app on the glasses.

However, after those five years, I believe Apple will be on track to give the AR glasses its own intelligence and UI and could actually replace a person’s smartphone in the future.

Next week I will delve into the idea that AR or mixed reality glasses may become the only tech device you have and drive an even new form of computing that could reshape our personal computing experience for at least the next ten years.

Each year around late September, 5G America’s, the Association that serves the telecom industry, holds its annual analyst event in Dallas. For analysts that follow telecom, as well as the overall market for communications and smartphones, it is an important forum to hear from telecom execs about what they are doing to further the telecom industry as well as prepare the industry for its next major growth thrust around 5G.

One of the major points discussed at this year’s event focused on the 5G rollout plans and how long it will take to get to mass adoption. If you have followed the wireless communication markets, you know that the rule-of-thumb is that with any new wireless advances brought to market, it takes approximately ten years for total worldwide mass adoption. This was true with 2G, 3G, and for the most part, 4G. While this is true in principle, there are still parts of the world that are on 2G and 3G, 20+ years after their original release dates.

But the sense I got from the execs at the 5G America’s summit this year is that 5G is a transformational wireless technology and that if they have their way, its adoption cycle will be well less than ten years for the majority of the world market.

They base this accelerated 5G adoption view on the fact that 5G will not just be for mainstream smartphone and wireless communications use. It will become a communications protocol for use in next-generation IoT, smart cars, smart cities, smart manufacturing, etc. They see its use in broader business transformation projects and expect that it will be adopted by major businesses for a whole host of specialized uses too.

One example they shared is that with millimeter-wave small cells, companies can deploy them inside their buildings and manufacturing facilities to serve as a communications back up system for use in mission-critical systems. While most business and manufacturing lines use WIFI as their main communications services, a millimeter-wave small cell with short distance towers on-premise would give them a backup communications systems should, for some reason, WIFI go down. While the 5G system would be a costly second communications system, in mission-critical applications, the cost can be justified as losing WIFI in real-time manufacturing programs or financial systems could be even more expensive if it caused downtimes or impacted real-time transactions.

5G infrastructure is also running ahead of 4G installments, which took 4+ years after it launched to cover all of the US with 4G coverage. Although there are a few cities in the US with pockets of 5G coverage now, these are considered more like early test sites used to help fine-tune early towers and networks.

The big thrust of 5G rollouts start in earnest in 2020 and telecom executives at this event said that they are certain that they can cover most cities by the end of 2021 and most rural areas by 2022-2023 in the US.

This time around, 5G America’s and the wireless telecom providers know that what they have with 5 G is a big deal and are also working directly with cities who want to transform their city into smart cities, automakers creating smart cars, companies who want to develop smart manufacturing lines and smart offices, etc.

One of the big reasons they want to push 5G adoption faster than in the past is the capital costs of deploying 5G networks are exponentially more expensive than when they rolled out 4G networks. While they will deploy centralized 5G towers in more population-dense areas, they also need to add MM Wave small cells to boost network coverage in big cities like NYC, Chicago, Dallas, LA, SF, etc.

Also, since they can expand 5G well beyond cell phone usage and can try and get 5G into a plethora of other uses fast, which will help pay for the higher 5 G network roll outcasts, they are moving quicker with 5 G deployments and courting all types of businesses to adopt 5G as fast a possible.

Although I knew that the telecom industry and wireless network providers are waxing poetically around 5 G and singing its praises right and left, this was the first time many of us analysts were able to really challenge them on the plans and their ability to execute.

Many analysts voiced skepticism of the telecom and wireless carrier’s ability to execute this fast. But the telecom and wireless executives were more than prepared to counter our criticism and laid out a very detailed plan on how they were moving forward. More importantly, they emphasized that 5G rollouts Worldwide would be much faster than 4G and 3G rollouts of the past and were adamant that they were on a plan to meet these objectives.

In fact, they even whispered that the early 6G specs were already in the works, but did not give any details beyond the fact that related committees are working on early 6G plans even now.

I probably should not have been surprised that these execs were so bullish on with their 5G plans and how fast they plan to light up the US with full coverage. There is a lot at stake for them, and getting as much of the US covered as fast as possible is really a big priority for them. They also want a piece of the action in smart cars, smart cities, smart businesses, and smart manufacturing and business and consumer IoT, so it really is in their best interest to accelerate 5G rollout and coverage as fast as possible.

One of the latest market trends for the last 5-6 years has been a focus on VR, AR, and mixed reality devices and applications. VR has been a topic in technology circles for decades and gained more prominence after technology scientist Jared Lanier began sharing his vision for VR starting in 1991. AR got serious attention when Microsoft introduced their mixed reality HoloLens headset and even more attention when Oculus introduced their VR headset at CES in 2013.

VR/AR, as defined by Microsoft a few years earlier, was really a mixed reality concept, although the rhetoric around it focused on AR. Their goggles had a see-through feature that would allow you to look at a room you are in and see an aquarium and fish swimming around you. With that, the concept of mixed reality and AR started to gain more attention.

At WWDC in 2016, Apple made it clear that their focus would be on AR as well and introduced the first version of AR Kit. Since then, Apple developers have created hundreds of AR apps, all being delivered on the iPhone.

These advances in VR, AR, and mixed reality are quite important to the technology industry because, at its core, it represents a major revolution in the way we interact with computers.

If you are a science fiction buff, you know that beginning in the late 1800s, science fiction novel protagonists often had fictional devices that they talked to get them to do something. But by the mid-1940s, when computers began to hit the scene, the only way we could talk to a computer was via keyboard input. In 1968, when 2001, A Space Odyssey, had Hal speak to the characters, the concept of voice interaction with computers gained serious momentum.

While using voice to interact with a computer showed potential, the technology that actually advanced the way we worked with a computer came in the way of the mouse, when Xerox PARC researcher Doug Englebart, introduced the concept in 1964. Then when Apple used the mouse as a new way to interact with a computer when they introduced the Mac, computers got the next big step in the man-machine interface.

Interestingly, Grid Computers, Palm Computing, and General magic, along with Microsoft and others, introduced the next evolution when they brought pen computing to the computer interface around the 1989-1991 time frame. Then in the last decade, as the technology became viable for more advanced user interfaces, voice finally became a way we could interact with a computer.

All of these advancements in computer interfaces represented huge improvements to the man-machine interface and were revolutionary in their own right.

However, I believe that AR, VR, and Mixed Reality, especially when delivered via some type of goggles or glasses, represent the next major evolution in the way we work with and interact with computers in the future.

If you have had a chance to test or use any of the VR and AR goggles in the market today, you most likely have realized that this experience is significant and have already understood that something big is going on when VR and AR delivers completely new computing experiences than the ones we have had on desktop and laptops for the last 75 years.

VR brings us into alternate universes, as modern-day teleportation, and AR makes your surroundings come alive with data, images, and unique experiences super-imposed on the world around you. Within the next decade, we will see more 3D and even holographic technology introduced into this next revolution of the man-machine interface.

The enterprise and consumer applications for AR/VR span from training, remote work, collaboration, teleconference and communication, and much more. In consumer markets, while there may be productive and utility angles, what most consumers will get excited about will be things more focused on entertainment like games and media. We are so early in this paradigm shift it is fascinating to watch from the component side, software and platform side, and overall hardware form factor side as companies work to figure out what is next in computing.

As one who has covered the computer industry since 1981 as a professional analyst, I am most excited about what the next phase of computing will enable in the upcoming decade. In fact, I suspect that with the kind of raw processing power that we keep squeezing into mobile chips and, 5G networks that by the end of the next decade will probably deliver 30-50 GBPS wireless speeds, this will enable VR, AR, and Mixed reality goggles and glasses to reinvent the concept of a personal computing experience. It will also revolutionize the man-machine interface in ways we could not have imagined 35 years ago when personal computers debuted and changed our world forever.

When I first started college, my major was Pre-Med with an emphasis on geriatrics. I already had my pharmacy tech credentials, and the place I worked at had multiple contracts to be the pharmacy of choice for nursing homes and some private clinics that were focused on people over 70. For two years, I was the person who went to these nursing homes and helped them manage their pharmaceutical needs.

I became very interested in the aging process and their healthcare. But even then, I observed closely how some of these older folks spent their time in these specialty care facilities. Many were bedridden and, besides visits from the family and short excursions to areas where they needed special physical therapy and exercise, most were confined to their rooms, and their best friend was their televisions.

Although I switched majors after two years of college, I never forget my work in geriatrics. Over the last 40 years, due to the family at times having to be confined to nursing homes or special care facilities, I continued to observe how an older generation spends their leisure time, and even now, the television still dominates their video viewing free time.

Recently, the Economist published a story that included a chart from Nielson that looked at how many hours are spent on media consumption across all adult age groups. The chart confirms that for those over 65, the television is still their major choice for media viewing. But the smartphone has also become a major medium for media consumption for this age group too.

Here is the Economist’s commentary on the Nielson chart”

“According to Nielsen, a market-research firm, Americans aged 65 and overspend nearly ten hours a day consuming media on their televisions, computers, and smartphones. That is 12% more than Americans aged 35 to 49, and a third more than those aged 18 to 34 (the youngest cohort for whom Nielsen has data).

Most of that gap can be explained by the TV. American seniors—three-quarters of whom are retired—spend an average of seven hours and 30 minutes in front of the box, about as much as they did in 2015 (this includes time spent engaged in other activities while the television is blaring in the background). They spend another two hours staring at their smartphones, a more than seven-fold increase from four years ago (see chart).”

We have friends in there 70’s and 80’s who are still very active and their smartphones have become very important to them. Besides their smartphones being a safety net that allows them to reach family and emergency services if needed, they also use their smartphones for video, to play games and in some cases, to learn and keep their minds sharp.

In fact, Seniors playing games is on the rise.

They also combat aging with video games.

The Internet itself has become a major tool for Seniors-

Axess lab did a study on facts about the elderly and the Web and found the following:

• Those of the baby boomer generation spend around 27 hours weekly online.
• Of the group aged over 65, seven out of ten will go online daily.
• 82% of those in both groups run searches online related to what they’re interested in.

• 78% of seniors say that they like going online because it enables them to find the information that they need easily.

• 60% of them believe that you can stay up to date when it comes to policy and political issues by surfing the web.
• For around about a third of seniors, the Internet is considered a trustworthy source of information and news.
• 20% of seniors communicate with their friends via email.
• 75% of the elderly go online to communicate with their family and friends.
• More than half of those who are classified as seniors follow an organization on social media.
• 40% of seniors who watch videos online do so in order to keep up to date with breaking news.
• 53% of the elderly research medical or healthcare issues online.

54% of seniors watch videos online for purely entertainment purposes.

• Half of the seniors say that it’s very important to play games in order to remain sharp. A further 26% state that playing games are extremely important for this reason.

The Internet, as a medium for information and entertainment for our aging population, is an important market and one that continues to grow.

AARP published a chart from the US Census Bureau that projects that Older Adults will outnumber children by 2035.

Marketers take note. These types of stats continue to show that a senior market will become even bigger over time, and tech marketers cannot ignore them when designing hardware, software, and services in the future.

And while the TV dominates their media consumption, a computer and smartphone have become critical tools for them too, and they appear to be increasing their usage and making them much more important to their aging lifestyles.

In 1988, I was invited to go to Ireland on a project for a client to work on creating a European HQ for this company. In the process, I was introduced to the Irish Development Agency (IDA), an organization created by the Irish Government to promote business opportunities for companies outside of Ireland.

In my first meeting with IDA officials, they explained why their division was created. It turns out that the Irish universities were graduating thousands of engineering and business students each year, and there were not enough Irish companies who could hire them. This was especially true when it came to companies who could hire students trained in science and engineering majors. These students were leaving Ireland to go to work for tech companies in the US, UK, Germany, and France. They called it a brain drain and were anxious to lure tech companies, as well as new business ventures, to Ireland to try and stem the tide of their students leaving Ireland for greener pastures.

At the time, they had some minor successes as Apple, Microsoft, and Lotus agreed to put outposts in Ireland. However, these were mostly distribution centers, and they did not have the demand for technical skills or students with advanced degrees. As part of our meeting with IDA, we toured Apple’s small facility back then in Cork, Ireland as well as a larger one that Microsoft had established near Dublin.

At first, the Irish Development Agency gave these companies tax breaks on property and equipment, but as the tech market heated up, they needed to sweeten the pie and extended their incentives to include tax breaks on business costs and even profits.

While IDA targeted many companies with these incentives, and actually landed HP, they really wanted Apple to anchor their new program. Interestingly, at the same time, the Scottish Development Agency created a similar program and landed Compaq as their anchor company and pursued similar outreach to companies outside of Scotland.

By the early 1990s, IDA and Apple developed a closer tie, and they refined the kind of tax incentives that would make Apple choose Ireland as their European HQ.

Keep in mind, all of this took place before the EU was formalized and Ireland and Scotland developed their own set of rules and regulations that govern how each country handled their various business partnerships and program incentives back then.

In 2014, the European Commission began a probe into how all of the EU countries handled their tax breaks as it pertained to the various economic development programs. It took two years, but eventually, the Commission concluded that the tax rules between 1991 and 2007, applied to Apple, were artificially lowered and the EU contended Apple underpaid taxes due to Ireland.

According to Will Goodbody, at RTE News:

“Essentially the Commission claimed that the tax rulings rubber-stamped a method of determining the taxable profits for two companies based in Ireland – Apple Sales International and Apple Operations Europe.

The Commission concluded that those head offices only actually existed on paper, and as a result, could not have generated such profits.
These profits were not, as a result, subject to tax in any country under specific provisions of the Irish tax law which are no longer in force, it found. The result of all this, it said, was that Apple only paid an effective corporate tax rate that declined from 1% in 2003 to 0.005% in 2014 on the profits of Apple Sales International.

The Commission ruled that the tax treatment here in effect enabled Apple to avoid paying tax on nearly all the profits it generated from product sales across the EU Single Market because all sales were booked in Ireland rather in the territories where they were actually sold.
As a consequence, the European Commission ordered Ireland to recover €13bn in unpaid taxes over the period 2003 to 2014, plus the interest.”

If you want more details on this case here are a few other links that cover it well. Link, Link.

Apple and Ireland have appealed this judgment and presented their view and rebuttal to these charges to an EU court over the last few days. To be safe, Apple has put $13.1 billion in escrow and has already accounted for it in their financials in 2017-2018.

Apple and Ireland adamantly believe the EU Commission case is based on flawed logic and told the court that directly over the last two days.

While a tax payment is at stake for Apple, there is a bigger stake in play that impacts American companies deciding to put roots in EU countries or expand current operations as their market grows in the EU.

Even though Ireland could reap a huge tax windfall if the EU Commission wins, they are highly against this EU Commission ruling for many reasons.

First and foremost, they entered into this deal with their eyes open, and Apple delivered as promised. Apple has spent hundreds of millions of dollars on buildings, infrastructure and employs 6000 workers in Ireland. Moreover, they add to Irelands GDP and, like other tech companies who established businesses in Ireland, bring the kind of tech jobs that kept many of these graduates from leaving Ireland. Ireland also wants to disprove claims that Ireland acts or acted, as a tax haven.

From Ireland’s standpoint, Apple delivered.

Second, this ruling challenges Ireland’s sovereignty when it comes to setting their own business dealings. This is a huge deal to them, and this is at the core of why they are so against this Commission’s ruling.

The other big thing at stake is the issue of other American companies investing in EU countries in the future. If a company comes in and does a local deal, and the EU prevails with their Commission’s ruling, they set a precedent that at any time they could either nullify the deal or change its terms in favor of any new EU rules and regulations. That means a lot of companies could stay away from future investments in Ireland and other EU countries. Ireland wants to show to multinational investors and companies that it is a safe and predictable place to do business.

Regardless of the outcome of these courts findings, you can expect the losing side to appeal. A decision from this EU court is due by the end of 2010, but it could take years before this legal tussle concludes. Too much is at stake for both sides, and neither will go down without a huge fight.

I have attended just about every major Apple event since 1981. The only one I did miss was the WWDC in June of 2012 when I had a triple bypass the Friday before the WWDC keynote. Consequently, I have some experience with Apple events and since I view and analyze them at a much deeper level than the mainstream media, my takeaways are somewhat different than how they perceive and report on these events.

Here are five things that made this event important and not just an incremental iPhone update in my opinion:

1. Apple’s ownership of hardware, software, and services as well as the entire stack of their processor design is much more important than most people understand. This allows them to design software at the micro level to take full advantage of any new hardware and processor designs. After the keynote, I spoke with Phil Schiller, their head of worldwide marketing and he emphasized to me the fact that the processor team is in constant discussion with their OS team as well as their applications group and are much more in harmony on the way they go about creating hardware, software, and services.

   This gives Apple a distinct advantage when all of what they create is optimized to take advantage of other things the design into all of their products.

2. The new A13 Bionic processor with its neural engine and increased us of AI in its architecture is a big deal. At the moment, this is the most powerful CPU and GPU ever created for a smartphone. This is the picture of the Bionic 13 processor features.

   

   One important piece of this processor is the neural engine. Apple has been developing this for a while and with the A13 it looks to take a leap forward. It has a lot of functions, one major one I will get into in the next bullet point, but it plays a major role in how it manages tasks and allocates how much power is used for any particular app. This, in turn, helps manage battery life. The A13 Bionic processor can handle one trillion transactions per second and has 8.5 billion transistors packed into it.

   Apple’s silicon engineering team had stage time for the first time ever at an iPhone presentation and emphasized the importance of Apple designing everything down to the transistor of their own silicon. This is one of the primary reasons Apple’s smartphones have more computational capability than their competition and why even several year old iPhones can still outperform many of the latest smartphones sold all over the world.

3. The three camera system managed by the neural engine. The three new cameras in the iPhone 11 Pro Series deliver some of the best imaging quality available on a smartphone today. But what makes this different is how the neural engine manages the photo images and the new special software that will come out later this year that will deliver enhancements that will be closer to what you can get from some DSLR cameras. I got to see some of these images on an iPhone 11 up close, and they were stunning. The amount of detail with no noise was amazing. And this was without the new enhancement software that will come out later this year.

   When we research this area, consumers tell us that one of the top three things that are important to them is the quality of the pictures they take on their smartphone. The idea of a camera in your pocket has changed their mentality on taking pictures, and this is the one area that they look closely at and are willing to pay more for better quality pictures. While the best imaging will be on the iPhone Pro series, even the iPhone 11 that uses the same Bionic processor and its neural engine is finely tuned to use this chip to deliver stunning photos on a mid-level iPhone.

4. Aggressive pricing. Apple pricing the iPhone 11, starting at $699 is an important milestone. Some think that this is tied to Apple being more price sensitive to the market, and to some degree, this is correct. But I believe it has more to do with lower component costs for this phone as Apple has worked hard with suppliers to bring costs down in the last year. I suspect this will be their best selling phone in the holiday season as its camera is of great quality and has a lot of features that were not in the iPhone XR.

   The pricing on the Arcade gaming service is very consumer-friendly too. $4.99 for up to six players in a family is reasonable, although this will be most attractive to families with younger kids. But would not be surprised if my wife gets this subscription as she loves these kinds of games.

   Apple TV+ is also reasonably priced at $4.99. This particular streaming service is interesting to watch and could have an impact on the streaming business. Apple is setting a new bar in streaming by having a service that is tied only to movie level cinematography and storytelling. Unlike Netflix that does have original programming, some of its low quality, as well as shows that while they are still loved, some are as much as 15 years old. By creating a service of only very high-quality content and pricing it at $4.99, if the shows are compelling, it too could eventually add serious revenue to their service business. Also, the fact that they will give a full year of Apple TV + to anyone who buys new iPhones iPads and Macs starting Sept 10, 2019, will give them a subscription base of around 100 million by the end of 2020. A year of watching shows on Apple TV+ could go along way in helping them develop loyal customers who will stay with the service after their first year.

   Also, look at the pricing of other products they have in their line.

   -$329 feature loaded 7th gen iPad
   -$699 iPhone 11 ($50 less than XR)
   -Series 3 Apple Watch left in market at $199.
   -iPhone XR left in market $599. iPhone 8 $449.

If we just looked at a price to value analysis of Apple’s services, and even their hardware lineup, we could argue from a hardware standpoint, it’s the most affordable time to upgrade or enter the Apple ecosystem. Apple’s pricing was surprising to many, but the argument that Apple is pricing itself out of the market seems to be one that is now very difficult to make.

In June of 2018, I attended the annual Society of Information Display Conference in Los Angeles, and I saw prototypes of foldable displays from BOE, a Chinese display manufacturer. I got to play with a folding phone that used their flexible display and wrote that the era of foldable smartphones was on the horizon.

I was very impressed with the conceptual idea of a folding phone, and since then, Samsung has brought a version to market that had a bumpy start but is now scheduled to deliver their “fixed” foldable phone later this month.

To date, most of the foldable phones that are being designed are created to fold in half from the center out. The idea behind this is that when unfolded, the screen goes from a single 6.0-inch screen to one that when opened, can have a screen that diagonally reaches up to 10 inches, thus creating a kind of mini-tablet.

The other folding smartphone design is one that has been shown by Motorola, and it folds in half, from top to bottom. While this design does not add a larger screen surface that one gets in a smartphone that folds out from the center, it allows for a bigger screen, and when folded in half, it is a smaller form factor that is easier to carry around.

While these new foldable phones are an engineering marvel, there is one big question about folding smartphones that have not been answered. That question is if there is an actual market or business case for folding smartphones and if there will be any real demand by a mainstream mobile phone user?

I wrote about this in detail in my Tech.pinions column in April of this year and laid out the fact that the jury is out on whether these folding phones are an anomaly or represent a real market opportunity.

In talking with two folding display vendors recently, they told me that it is unlikely that they will make the kind of investments needed to expand their foldable display manufacturing lines given the demand for more mainstream displays, especially OLED displays, that are in high demand and very profitable.

In fact, BOE, who showed me their first foldable display in mid-2018, has just landed a lucrative contract with Apple to work on OLED displays for them. The display vendors tell me that the next big demand in displays will be for OLED in premium phones and then as they ramp up their manufacturing lines to create them in greater numbers, we will see OLED displays in mid-range smartphones as early as 2021.

I do love the ingenuity and technical designs of a foldable smartphone, but I am just not convinced that they will ever garner real demand by mainstream users. Most likely they will remain a product that attracts early adopters and some verticals and no-one else.

On the other hand, I am becoming more bullish on folding laptops. In May, Lenovo introduced their first foldable in their Thinkpad X1 line of laptops. I got to spend some real hands-on time with it in May and again recently at a private event in North Carolina. This is still a prototype, but it was designed by Lenovo’s stellar Yamoto, Japan labs, the group that created the solid Thinkpad line of laptops.

I have tracked laptops since their entry into the market in 1985 and have a good feel for these products design and functionality. This new Lenovo foldable and two others that will be introduced later this year or early next year could represent the next big step in portable computing.

To get a look at how the Lenovo X1 foldable works, check out this video from the Verge.

The keyboard on this foldable PC is external so to use it you would stand the unfolded laptop up and place the Bluetooth keyboard in front of it. Surprisingly, this works well and is not at all an odd configuration.

In the folded mode, it feels like a book. Unfold it, and it is a large tablet. The more I got to play with it, the more I began to realize that this design for portable computing could be a game-changer.

At first, it will be way too expensive for the mass market and instead will find its ways into vertical markets where I suspect it will get serious interest initially. Over time, if the prices come down, it could find a niche market with road warriors and executives who want the ultimate in portability and will be willing to pay the premium prices for this type of mobile computing experience.

The cost of the foldable display in a laptop is close to triple the price of a foldable display in a smartphone, and making them in large volumes is not really in the cards for these specialty display manufacturers, at least in the near future.

While I believe that foldable laptops may fair better than foldable smartphones, at best I see them eventually being only about 10-12% of laptops shipped by 2022.

At this point of our research, and with what we know of other foldable laptops in the works, I sense there will be greater interest in this foldable form factor over folding smartphones and, at the very least, will help drive new innovation with laptops for mobile users in the future.

Last October, after a long investigation by various government agencies, it was reported that a “rogue chip” was found on SuperMicro motherboards, used by hundreds of vendors, whose main goal was to intercept information at the processor level. It would allow an outsider to gain access to communications and data that would pass through these server chips.

This excerpt from a Bloomberg investigative story written on Oct 4, 2018 lays out the basic issues and potential threat-

“Nested on the servers’ motherboards, the testers found a tiny microchip, not much bigger than a grain of rice, that wasn’t part of the boards’ original design. Amazon reported the discovery to U.S. authorities, sending a shudder through the intelligence community. Elemental’s servers could be found in Department of Defense data centers, the CIA’s drone operations, and the onboard networks of Navy warships. And Elemental was just one of the hundreds of Supermicro customers.

During the ensuing top-secret probe, which remains open more than three years later, investigators determined that the chips allowed the attackers to create a stealth doorway into any network that included the altered machines. Multiple people familiar with the matter say investigators found that the chips had been inserted at factories run by manufacturing subcontractors in China.”

The discovery of this hack started in early 2015 and appeared to be caught very early on by Amazon, who was about to buy Elemental, a company that would help them expand their streaming video service architecture and used SuperMicro to manufacture their motherboards. It was also caught by Apple, who had planned to use Super Micro motherboards in their servers.

Even today, there is some controversy surrounding this rogue chip, but the idea that China could somehow find a way to gain access to our servers via planted spy chip is very plausible, and Congress has created the first draft of a new piece of legislation aimed at keeping this from happening in the future.

Here is the outline of the Microchips Act summary that was just filed for Congressional comments:

MICROCHIPS ACT

The Problem:

The U.S. is involved in asymmetric warfare and what amounts to a technological space race with China, which is seeking to dominate an over $1.5 trillion electronics industry through state investment, subsidies and intellectual property (I.P.) theft. China has capabilities to undermine U.S. national security in four major non-kinetic areas with implications across the government: supply chain exploitation(e.g. supplying software and hardware with backdoor access or faulty component parts), cyber-physical attacks on systems with real-time operating deadlines (e.g. missiles, aircraft, electrical grids, etc.), cyber-IT (e.g. hacking of computer systems), and human actors (e.g. using insiders to gain sensitive information). China can and has used these types of attacks together as part of a blended national strategy to undermine the U.S.

While these threats have been largely acknowledged by the government, the U.S. still lacks a coordinated, whole-of-government strategy to address them, particularly supply chain exploitation. The lack of comprehensive detection and apprehension of potentially compromised technology and component parts has practical and serious implications. U.S. companies continue to lose billions of dollars of I.P. to theft by China.

Additionally, counterfeit and compromised electronics installed in the U.S. military, government, and critical civilian platforms give China potential backdoors to interfere with and compromise these systems. Implications of an insecure U.S. supply chain extend beyond the government—any industry that relies on electronics for secure communication, data transfer, or operations is susceptible to attack through a compromised supply chain.

The Solution:

The Manufacturing, Investment, and Controls Review for Computer Hardware, Intellectual Property, and Supply “MICROCHIPS” Act would address this pressing challenge by leveraging government and private sector expertise to develop a national strategy and establishing a central clearinghouse for assessing risks to critical technologies, fortifying the industrial base against these threats, and preventing compromised materials from entering the U.S. supply chain.

In the proposal, Sec. 3 Directs the Director of National Intelligence, Department of Defense, and other relevant agencies to develop a plan to increase supply chain security and develop interagency sharing within 180 days.

Section 3 is the most important one that will directly impact ODM’s and OEM if passed. This particular line in Section 3 deals with the execution of this Act: “to develop a plan to increase supply chain security.”

I have been speaking with some of my contacts in Washington to get a read on this particular line in the Act, and as they point out, the way this would be executed in the future is still in very active discussion.

However, apparently, one of the things they are kicking around is putting the burden on the ODM or OEM of making sure no rogue chip or code is ever put on any system manufactured in China. This could mean two things:

1. The ODM and OEM would need to have in place the skill set and potential equipment on hand to do this screening process themselves. I spoke with one ODM over the weekend, and they said that as of today, they are not equipped with either the skill set or the type of equipment that could do this type of screening. And it would be a moving target as tactics by Chinese hackers who would like to use this way to infiltrate these devices could change methods and strategies consistently in their quest to succeed. This would add additional processes to their mfg programs and could also be costly.

   As for OEMs like Dell, HP, Lenovo, Amazon, etc., this too could mean they may have to have new processes and programs in place to screen components they use in their computers, servers, etc. to make sure their devices are secure from rogue processors or code. While they do these types of tests now, under the Microchip Act, it would put a heavier burden on them to guarantee their devices are free from the eyes of Chinese hackers.

2. The Microchip Act could also mean that the U.S. Government could make these companies directly liable if there is some type of breach on this specific security issue. What type of liability is the big question, but given the possible way the U.S. government could execute this plan, it needs to be factored into people’s thinking these days.

This Microchip Act is something that our industry needs to watch very closely. It has good intentions, but the final law and how it will be executed could have major implications for the supply chain and our PC hardware vendors in the future.

For at least four decades, Silicon Valley was quite happy to keep Washington bureaucrats in the dark about what was going on in this high tech Mecca of the world. Their position was “what they don’t know will not hurt them,” and that was their fundamental approach to Washington until 1995-1996.

That position changed dramatically with the birth of the Internet. Silicon Valley leaders, led by then Cisco CEO John Chambers, and Venture Capitalist John Doerr, realized that the Internet was not just the next “big thing” but that it had the potential to be a world-changing technology that would impact just about everything in the future. These leaders went to Washington to make them aware of the impact the Internet would have on business and government and how it could impact consumers over time.

Their original door into Washington was provided by Vice President Gore, who was one of the more savvy politicians when it came to how technology could impact government. As a Senator, he had a hand in funding Arpanet, which became the backbone of the future of government communications. Very soon, the concept of the Internet, known then as Information Highway, made more straightforward to use via the Netscape Browser began to catch on with government officials and business leaders.

One of the downsides of Silicon Valley’s reaching out to Washington was that the Tech world began to come under their regulatory eyes. That was the number one reason that for decades, Valley leaders wanted nothing to do with Washington unless it was related to government and military contracts.

Sure enough, around 2001, the US government went after Microsoft in the famous browser antitrust case, ironically spurred on by John Doerr and Netscape Browser investors. They believed Microsoft’s bundling of their browser in Windows would give them a monopoly in browsers and thus began the first antitrust severe case on a tech company since the Ma Bell era.

Since then, US Government officials have realized that technology, and Silicon Valley specifically, has become a significant force that drives significant economic value in the US. The overall tech market brings in over $3 trillion in worldwide revenue every year. Moreover, tech companies are coming under greater regulatory scrutiny as they become more prominent and more powerful.

One other area that the government has extended their reach in the tech world is that it has now become one of the pawns the government uses in its battle with China over tech piracy and China’s quest for technological dominance at America’s expense.

The current round of tariffs has the potential to deliver a significant impact on many tech-related products. While the administration has had much feedback on this from the leaders of many tech companies like IBM, Dell, ATT, and more, Apple CEO Tim Cook appears to have become Silicon Valley’s non-appointed designated diplomat to the Trump administration, especially on the issue of Chinese tariffs.

Tim Cook exudes southern charm and is one the easiest CEOs to talk with. I spoke with Steve Jobs many times over the years, and while he could be charming at times, more than once I was witness to his volatile management style and sometimes abrasive commentary. Cook is the exact opposite of Jobs in that sense.

Tim Cook is a brilliant operations guy and a superb CEO, given the value he has driven for Apple shareholders and customers, who don’t seem to get rattled and approaches every decision with intelligence and logic. He seems very well suited to argue against these tariffs with the current administration to try and stave off future tariffs on tech products and try even to reverse them if possible.

Last Friday, Cook had dinner with President Trump to discuss the issue of tariffs, and according to one of the presidents tweets he said: “He made a pretty compelling case and I now have to think about that.” While we don’t know exactly what they talked about, besides the reported angle that tariffs could impact Apple’s ability to compete fairly with Samsung, it appears that the focus of Cook’s discussion with Trump was around how these tariffs could impact tech companies in particular as well as any companies impacted by all of the tariffs in effect to date.

However, I sense that there was another issue on tariffs that pushed this meeting to happen now. Trump and team delayed the 10% tariff on smartphones and other tech products until Dec 15. A 10% tariff is probably manageable even if Apple had to pass some of that to their customers.

But the lurking threat of pushing another 15% tariff on top of the 10% tariff that goes into effect Dec 15, could be disastrous for Apple and almost all of the companies impacted by this higher tariff. Nomura Securities released a report a few weeks ago that predicted that the full 25% tariffs fees could happen by the end of the year.

Trump delayed the 10% tariff on some of the $300 billion of goods until Dec 15, 2019, but Nomura and others still maintain that unless there is a major breakthrough on the trade front with China, it will be inevitable that a 25% tariff increase could come after the first of the year.

Simple math suggests that if this happens, an iPhone priced at $1000 coming from China would now cost $1250 based on a 25% tariff penalty. While Apple might be able to absorb a 10% tariff, a 25% tariff would force them to push most if not all of that cost onto their customers.

How successful Cook will be on convincing Trump and team to reverse their position on new tariffs is hard to predict. But Tim Cook is perhaps the best person from Silicon Valley and the tech world when it comes to trying to convince President Trump to change his position.
Let’s hope he succeeds. If not, we in the tech world may face a difficult position with customers willing to pay more for tech products in 2020, something that could have a negative impact on tech companies bottom line in the new year.

Tuesday Morning, the Trump Administration gave a reprieve to adding 10% tariffs to PC’s, Phones and some other electronics and pushed that back to Dec 15th now. This seems to be the result of a realization from this administration that a Sept 1 start date could have major ramifications for tech companies and the economy over the very important holiday quarter. Here is a link to the full list of products that get the Dec 15 pushback.

Tech companies have advised against adding any new tariffs to tech products, but Trump and Chinese President XI Jinping seem to have dug in their heels and showed little interest in resolving the tariff crisis. Various reports suggest that President Trump thinks China may continue their hard position on the trade war until after the 2020 election.

Although some pundits have said that the reprieve suggests Trump and his team may be softening their position, I am very skeptical that this represents the possible end of tariff increases that some believe may be around the corner. In fact, this most likely does not suggest the end of the tariff increases at all.

I spoke with a major ODM in Taiwan last week, who’s own economists are monitoring these tariffs closely, and they told me that a new Nomura Securities report predicts that Trump will raise tariffs on another $300 billion Chinese goods destined for America to 25% by the end of the year. The delay in the 10% tariff fees to Dec 15, 2019, may change that end of year prediction for these higher tariffs, but these economists say they expect the full 25% move could come in early Q1 of 2020 instead.

While some pundits think the delay represents a softening on the US-China trade ward, my sources in China say that President Xi at the moment is willing to stay their course and not give in to US demands anytime soon.

Nomura’s one caveat is that while it seems that neither President Xi Jinping or President Trump will back down, the Chinese president is under great pressure from the Communist Ruling body over his handling of the Chinese economy and that his own fate could impact how China ultimately deals with any new round of tariffs one way or the other.

But it would be wrong to think that Trump’s postponing the 10% tariffs until Dec 15 is an indication that he and his team will back down from these tariffs, This was due to 4th quarter holiday economic issues rather than a change in policy. The more I talk to the Chinese economists who are thick into the weeds on Chinese strategy, and they tell me that for Xi Jinping to back down would show weakness on China’s position on trade issues with the US. It seems that without major compromise on both sides, new tariffs up to 25% are inevitable even if it impacts the US economy in an election year.

The major tech companies are already bracing for this outcome and are accelerating the manufacturing of many products destined for the US market to other regions like Viet Nam, Taiwan, Malaysia, India, and even Mexico. In talking to some of the OEM’s, their position is that regardless of who wins the next election, they see US and China relations as being very vulnerable and are taking no chances. So their move to manufacturing US targeted products are in full swing, and there will be no turning back even if the US and China relations get better over time.

I was surprised that quite a view commentators and experts felt that postponing the 10% tariffs to Dec 12, 2019, could be the start of the US softening their position on trade with China. But I really am afraid that it has little meaning other than Trump realized its negative impact on holiday buying. Unless something really dramatic happens in the US-China business relations over the next three months, I believe that our tech companies are going to be facing that 25% tariff before the middle of 2020 rolls around.

One of the more important products Apple has brought to market thus far in 2019 is the new Apple Card. This is a virtual as well as a real credit card that Apple created in partnership with Goldman Sachs Group. I have had the privilege of test driving the card for a bit and love its various reporting features and the way it allows me to become a more informed consumer by using its various analytical capabilities. Here is a short video about this card and its features if you are not up to speed on this new credit card service from Apple.

One of the major incentives to use the Apple Card is its daily cashback feature. Depending on what you buy, you can get cash back from 1-3% daily. There are other credit cards that offer cash back, but none give that back to the user on a daily basis. Apple Card can be tied to Apple Pay and makes Apple Pay more important to users too as it gives them these analytical features so they can stay much more up to speed on their spending and money management.

I personally try and not use too many credit cards for various reasons. As you may know, the more cards you have, the more it impacts your credit scores. I have two cards for the business, one tied to my bank and used as a debit card and then one that is for personal use and is tied to one of the airlines I fly the most so I can get mileage when making purchases. I fly a lot so earn a lot of miles by flying so I use my airline’s credit card the most for personal items, and that adds significant miles to my mileage balance. Over the years, I have used miles often for vacation flights and even products available through miles.

One of my other cards has significant travel insurance tied to it, which is also a very valuable perk of that card. I also get points from this card that pays off in gift cards often, which leads me to my Apple Card conundrum. Today I use Apple Pay more for convenience than for big purchases or big-ticket items. Those I do on the other two cards for the mileage points, or for travel for the insurance and points I get from it.

Apple’s 1-3% cashback on the Apple card is very tempting for use on larger purchases, but it comes with no miles, travel insurance, or gift points. While I do love its virtual and real credit functions and its analytical tools, I will, over time, need to weigh the true benefit of its cashback feature against the benefits of the other cards I use when it comes to big purchases and especially the miles I earn on my airline card.

I suspect I am not the only one with this conundrum. The airlines especially have been marketing their own credit cards for over a decade to entice flyers to earn miles and keep them loyal to their airline. And various cards from other companies have upped the ante in terms of other buying incentives and perks.

But Apple’s move to give cashback on a daily basis and adding the analytical tools to their card is going to put pressure on the airlines, and other credit card providers create programs similar to what Apple is providing.

I believe that Apple’s analytical tools are an industry game-changer. In a short time, I have used that feature, and it has become apparent that making a consumer more informed about their spending and real costs of a credit card is a really big deal. In fact, I predict this will become of the #1 thing people who use competing credit cards will be asking for their cards.

Apple’s daily cashback feature will also put pressure on those with cards that give cashback to follow suit. How fast they can respond with a competitive program is a big question. I understand that Apple had been working for a couple of years with Goldman Sachs Group to create an instant cashback program and that it was a relatively complex problem to solve. But this is a case that if Apple can do it, you can expect the major companies with cashback credit cards to try and do some kind of similar innovative program to stay competitive over time.

If I could have Apple add any other feature to this card, it would be to find a way to do a deal with the airlines to offer the option of airline miles like one can get from Chase Sapphire Preferred and Capital One Venture. If they added that perk, I would dump my airline card in a heartbeat and make the Apple Card my preferred card for travel and personal use. Not sure how possible that would be, but this would be on the top of my wishlist for future Apple Card features.

Regardless of my conundrum, I have no doubt that the Apple Card will become one of the only other credit cards I will use often. It will especially be valuable when I buy Apple products that get the most cashback in the program. Given Apple’s loyal installed base, I believe it will be a big hit with that crowd. It will also serve as a way to bring more people to the Apple stores, which is an important goal for the existence of this card. But Apple may need to do some aggressive marketing of this card to those especially who use airline mileage cards.

This new Apple Card, according to Bloomberg, sports that “the analysts see a 2023 earnings-per-share gain of just 1% for Apple, and 2% for Goldman, because the card has no fees, low-interest rates, and its profitability will likely trail the industry average. What the market “misses,” they say, is that by “layering in the benefit of shifting just 10% of U.S. hardware sales from third parties to the Apple stores, the profitability of the program increases from below average to average.”

Its dual goal to tie more people to Apple products as well as earn some profit will be interesting to watch as it has the potential to be another important product for Apple’s service business.

Like many in Silicon Valley, I have watched the most recent moves by the FTC and other government agencies that are probing some tech companies for antitrust violations.

I have a great deal of experience with the U.S. government going back to 1985 when I was asked to be the intermediary between the Defense Department and Intel. It is a long story, but in those days, outside of the government asking for Silicon Valley’s help on military projects, they had little contact with actual Silicon Valley leadership. I was known to them as a top analyst with relations with tech execs and was asked to help them connect with proper Intel execs about an issue that was highly private but had national interests in mind.

Over the years, I have served on presidential advisory councils and given feedback on tech issues to three government agencies. Have even advised some congregational leaders on tech issues.

From these years of experience with the U.S. government at many levels, I can say that they clearly do not understand technology, how it gets developed and more specifically, how technology actually works.

I will admit that over the last ten years, they have become a bit more savvy about tech issues, but they still do not really understand how technology is created and ultimately works.

The current quest to try and prove tech companies are in violation of very dated anti-trust laws will be difficult to prosecute. Anti-trust laws, as defined during the days of railroads and Ma Bell, are not easily applied to current tech companies when legitimate competition exists in many forms.

Even the angle that these companies need to be broken up is a stretch if traditional Anti-Trust laws are used to achieve this goal.

A lot has been written about this subject so I won’t go into the problems the FTC will have, or how the Tech companies can fight this under current laws.

But I do want to point out that our legislators really are clueless when it comes to the inner workings of tech, and more specifically, the potential ramifications of their actions and its impact on the economy.

Earlier this week, the San Jose Mercury had an editorial that points out this very issue:

“Let’s hope they don’t forget that innovation is at the heart of our economic growth. Our ability to remain a world power requires that we maintain a technological edge over China and our other global competitors.
Whatever the federal government does, it must maintain incentives for U.S. tech firms to keep spending on research and development, which is one of their primary tools to evolve and prepare for the future.

Tech leads U.S. companies in research and development spending. Amazon ($14.1 billion), Google ($10.15 billion), Apple ($7.65 billion), and Facebook ($4.76 billion) were among the top 10 investors in R&D in 2018. They are using those billions as a strategic weapon to win what could accurately be described as the World War of Artificial Intelligence.

Time is of the essence. The digital landscape of 2030 is likely to be fundamentally different than it is today. After all, consider how fast it’s changed in the past dozen years. As recently as 2007, MySpace dominated the social networking landscape, receiving more than 70 percent of all visits to social networks. Facebook, which was only three years old, was a distant second.

Those companies launched a wave of innovation that helped the United States emerge from the 2008 financial crisis and create what has been the longest bull market in history. Unfortunately, Big Tech’s dominance over those years has led to abuses that deserve greater federal regulation.

As a result, the Department of Justice and Federal Trade Commission now needs to rein in Amazon, Apple, Facebook, and Google. But, in the process, the feds must take extreme caution not to stifle innovation.”

I was in Washington last summer and made this exact case to legislatures that I met with. While I agreed that these companies might need oversight and in some cases, see their power monitored and even restrained when it makes sense, clipping their wings in a way that stifles their ability to innovate and help the U.S. keep ahead in areas like A.I., 5G, IoT, self-driving vehicles, etc. would be a mistake.

These technologies will power the U.S. economy for decades, and tech companies need to be free to drive this economic engine without heavy-handed and misguided government regulation.

As I stated earlier, most government legislators and officials don’t understand tech to the degree that they can truly legislate these issues. My fear is that they will handcuff some of the companies they target from inventing new technologies that will power our economy and keep us ahead of China and Russia.

I have been a baseball fan since I was eight years old. Being born in the San Francisco Bay Area, the SF Giants were my team growing up, and I became a fan during the era of Willie Mays, Willie McCovey, and Orlando Cepeda.

I also got a chance to play baseball in Jr High and High school and was a catcher with a pretty good hitting average. I was too thin and short then to even consider playing baseball beyond high school and instead became an ardent baseball fan as well as a student of the game instead.

As a fan, I have watched games and viewed plays hundreds of times that I thought the umpire got wrong. For most of my life, we did not have instant replays where an umpire could review a play if one of the managers challenged their decision. But this process takes time and slows down the game.

As a technologist, I have watched baseball games more closely with an eye on how technology could be used to call balls and strikes, which is one of the most subjective actions done by an umpire during a game. It appears that each umpire has their own version of a strike zone, and as they say, “call it as they see it.” But with TV broadcasts superimposing a true strike zone graphic based on a batter’s stance, a TV viewer can actually see if the pitch is a strike or a ball.

While umpires traditionally have an accuracy rate of between 90-95% with their calls, the calls they do miss could clearly impact everything from a batter’s statistics to the final outcome of the game. Instant replay does help with field calls, but cannot be used today to change a ball or strike decision.

Knowing technology as I do, and the power and accuracy of things like sensors, radar, laser guidance systems, and imaging, it has been clear to me for some time that the technology is already here that could enable robot umpires to assist real umpires in calling truly accurate balls and strikes.

Earlier this month, the Independent Atlantic League became the first American professional baseball league to let a computer call balls and strikes at their All-Star game.

ESPN was there and wrote about how the plate umpire used technology to help him call balls and strikes:

“Plate umpire Brian deBrauwere wore an earpiece connected to an iPhone in his pocket and relayed the call upon receiving it from a TrackMan computer system that uses Doppler radar.

He crouched in his normal position behind the catcher and signaled balls and strikes.

“Until we can trust this system 100 percent, I still have to go back there with the intention of getting a pitch correct, because if the system fails, it doesn’t pick a pitch up, or if it registers a pitch that’s a foot-and-a-half off the plate as a strike, I have to be prepared to correct that,” deBrauwere said before the game.

It didn’t appear that deBrauwere had any delay receiving the calls at first, but players noticed a big difference.
“One time I already had caught the ball back from the catcher, and he signaled strike,” said pitcher Daryl Thompson, who didn’t realize the technology was being used until he disagreed with the call.

Infielder L.J. Mazzilli said a few times that hitters who struck out lingered an extra second or so in the batter’s box waiting on a called third strike.

“The future is crazy, but it’s cool to see the direction of baseball,” Mazzilli said.”

Up to now, Major League Baseball and especially the umpires have been opposed to using technology to call balls and strikes. From the Umpires view, they see this as eventually taking away the need for them altogether. But the way technology was used in The Atlantic League All-Star game fully engaged the umpire and really just gave him a new tool besides his eyes and subjective reasoning to make sure his calls were more accurate.

I believe there are two solid reasons why we will eventually have robot umpires call balls and strikes to make the game more accurate in terms of calling pitches correctly.

The first is one that technology can help keep baseball interesting and relevant to a younger generation who, at the moment, are not embracing baseball as wholeheartedly as their parents have in the past. And attendance at games has been down for the last three years.

“Of the league’s 30 teams, 18 are experiencing an attendance drop. And this is after a 2018 season in which attendance was down more than 3 million fans, an average of 1,237 per game.”

Millennials and Gen Zer’s are technology savvy and have many ways to entertain themselves these days. Their interests are spread thin, and baseball is just one of the things they may have an interest in. And given the tech-savviness of this younger generation, they most likely see how technology could enhance a game and make its outcome more accurate, which could increase their interest in baseball games and draw them to viewing them on TV or the Internet or going to a ballpark itself.

But the most important reason that I believe robot umpires are inevitable is legalized sports gambling. I personally am not a gambler but have watched this “industry” with great interest over the last three decades. I have become even more interested in sports gambling now that it has started to infiltrate eSports.

The Supreme Court recently ruled that a federal ban on sports wagering is unconstitutional.

Here is the conclusion of the majority opinion:

The legalization of sports gambling requires an important policy choice, but the choice is not ours to make. Congress can regulate sports gambling directly, but if it elects not to do so, each State is free to act on its own. Our job is to interpret the law Congress has enacted and decided whether it is consistent with the Constitution. PASPA is not. PASPA “regulate[s] state governments’ regulation” of their citizens. …. The Constitution gives Congress no such power. The judgment of the Third Circuit is reversed.

With this ruling, the courts have been given the choice of allowing sports gambling up to the states themselves. Here is a link to the States that already allow sports gambling and the current bills in the works from the States that do not allow sports betting yet, but proposed laws are working its way through their legislators.

Right after the Supreme Court ruling was announced, MLB released this statement.

Major League Baseball:

“Today’s decision by the Supreme Court will have profound effects on Major League Baseball. As each state considers whether to allow sports betting, we will continue to seek the proper protections for our sport, in partnership with other professional sports. Our most important priority is protecting the integrity of our games. We will continue to support legislation that promotes air-tight coordination and partnerships between the State, the casino operators, and the governing bodies in sports toward that goal.”

Once sports gambling becomes legal throughout most of the US, the pressure will be on MLB executives to integrate technology to call balls and strikes in both leagues. One thing that gamblers hate is subjective opinions that impact the potential outcome of a game. They want every call to be as accurate as possible so that their bets can be made based on quality data.

Of course, old-timers and baseball traditionalists will fight bringing robot umpires into the game. I have talked to quite a few of these folks, and their attitude is that without technology, the game is played as it has for over 100 years and robot umpires to them would be blasphemy.

However, Major League Baseball is not only a game but also a $10 billion industry and has to be willing to change with the times. They know that without some serious changes and adjustments, they could lose the next generation of younger fans. If that happens, their growth in the future will decline.

Sports gambling will also put pressure on MLB leadership as it expands throughout the US and professional and weekend sports gamblers want more ways to make the game more accurate to assist in their own analysis on their betting decisions.

I don’t know how long it will be before we get robot umpires calling balls and strikes, but the technology is here to do it today. Robot umpires are inevitable, and it will only be a matter of time before it happens.