The Golden Era of Notebooks

As we head towards the end of summer, when kids go back to school and many happy vacationers reluctantly return to their workplaces, it’s common to think about the potential for new devices to help with renewed educational and vocational efforts.

Back-to-school is a particularly important time for notebook PCs, as many vendors introduce new models to meet the seasonal boost in demand that hits this time each year. The great news this year is that it’s hard to go wrong with the options being made available. Thanks to some critical new technology announcements, advancements in some key standards, and most importantly, improvements in the physical designs of modern notebooks, there is a wealth of great options from which to choose.

In fact, after years of hype and, frankly, some unfortunate cases of overpromising and underdelivering, we’re finally starting to get the super sleek and ultrathin, yet very powerful and flexible laptops we were promised a long time ago. To put it bluntly, the Windows PC industry has finally caught up to and arguably surpassed what Apple first started with the Macbook Air about 9 years ago.

Pick up the latest offerings from Dell, HP, Lenovo, Acer or any other major Windows PC vendor, compare it to the notebook you currently own or use for work, and the difference will likely be dramatic. Today’s laptops are lighter, offer longer battery life, and nearly 1/3 feature flexible designs. Some have bendable hinges that enable switching from a traditional clamshell format with the keyboard down below the screen to a tablet-style mode, with a touchscreen interface. Others feature detachable keyboards, most notably Microsoft’s growing range of Surface devices.

Beyond the more obvious physical design enhancements, these new laptops also startup, boot applications, and run much faster than their predecessors. This performance boost is primarily due to some important “under-the-hood” improvements in the chips powering today’s notebooks. Last week, for example, Intel just announced the eighth generation of their Core line of CPUs, the Core i3, i5 and i7, which offer up to a 40% boost in performance versus even last year’s models on some applications (though not on everything).

A good portion of this boost is due to Intel increasing the number of independent computing cores inside the CPU. Because people do more multitasking and keep multiple applications open and running on their computers these days, as well as the nature of how modern software is being written, these extra cores can make an important difference in real-world performance.

In fact, Intel’s main competitor in the CPU market, AMD, used this design concept in both their Ryzen and Threadripper desktop CPUs—introduced earlier this year—with great effect. Thanks to these changes, AMD is finally starting to compete and, in some instances, beat Intel in desktop CPUs. AMD will be bringing these advancements to the mobile market in 2018. Best of all, though, it’s brought a greatly renewed sense of competition back to the market, and that will make both companies’ chips faster and the notebooks using these new designs even better, which is good news for all of us.

The semiconductor improvements in PCs aren’t just limited to CPUs. Nvidia and AMD continue to drive the mobile PC gaming market forward with the dedicated GPUs. Nvidia just unveiled a new thin design they call MaxQ that allows even their high-end GeForce GTX1080 chip to fit inside a comparatively thin 18mm notebook, a huge improvement over many of the current gaming notebooks.

As with CPUs, AMD also just made a strong new entry on the desktop side with their new Vega architecture chips, formally introduced earlier this month, and they will bring Vega to notebooks in 2018.

But you may not even have to wait until then, because the final key new advancement in today’s notebooks is a relatively new connection standard called Thunderbolt 3.0. Found primarily on more expensive notebooks right now, Thunderbolt 3.0 uses the USB Type C physical connector, but supercharges it with the ability not only to connect up to two 4K displays, but also power connections for the notebook, storage devices that can work as fast as internal hard drives and, most interesting of all, the potential to connect desktop graphics cards to a thin notebook. Now, you will need a relatively large, separately powered adapter housing for the card, but the ability to connect and even potentially upgrade desktop-quality graphics to a notebook PC is a capability that’s never been widely available before.

Put all these elements together and it’s clear that we really are in a golden era for laptop PCs. Small, lightweight designs, fast performance, tremendous expandability, and improved flexibility are enabling some of the most compelling new notebook designs we’ve ever seen. Throw in the fact that many new notebooks will be more than capable of driving the new mixed reality VR headsets that Microsoft and its PC partners just announced this week and the outlook appears even brighter. Plus, this vigorous new competitive environment is providing a desperately needed revived spirit for the PC industry overall, and promises even more improvements for the future.

The Indefatigable PC

By all rights, it should be dead by now. I mean, really. A market based on a tech product that first came to market over 35 years go?

And yet, here we stand in the waning days of October 2016 and the biggest news expected to come out of the tech industry this week are PC announcements from two of the largest companies in the world: Apple and Microsoft. It’s like we’re in some kind of a weird time warp. (Of course, the Cubs are poised to win their first World Series in over 100 years, so who knows?)

The development must be particularly surprising to those who bought into the whole “PC is dead” school of thought. According to the proselytizers of this movement, tablets should have clearly taken over the world by now. But that sure didn’t happen. While PC shipments have certainly taken their lumps, tablets never reached anything close to PCs from a shipments perspective. In fact, tablet shipments have now been declining for over 3 years.

After tablets, smartwatches were supposed to be the next generation personal computing device. Recent shipment data from IDC, however, suggests that smartwatches are in for an even worse fate than tablets. A little more than a year-and-a-half after being widely introduced to the market, smartwatch shipments are tanking. Not exactly a good sign for what was supposed to be the “next big thing.”

Of course, PCs continue to face their challenges as well, particularly consumer PCs. After peaking in Q4 of 2011, worldwide PC shipments have been on a slow steady decline ever since. Interestingly, however, US PC shipments have actually turned around recently and are now on a modestly increasing growth curve.

The reason for this is that PCs have continued to prove their usefulness and value to a wide range of people, especially in business environments. PCs are certainly not the only computing device that people are using anymore, but for many, PCs remain the go-to productivity device and for others, they still play an important role.

To put it simply, there’s just something to be said for the large-screen computing experience that only PCs can truly provide. More importantly, it’s not clear to me that there’s anything poised to truly replace that experience in the near term.

Another big reason for the PC’s longevity is that it has been on a path of constant and relatively consistent evolution since its earliest days. Driven in part by the semiconductor manufacturing advances enabled by Moore’s Law, a great deal of credit also needs to be given to chip designers at Intel, AMD and nVidia, among others, who have created incredibly powerful devices. Similarly, OS and application software advances by Apple, Microsoft and many others have created environments that over a billion people are able to use to work, play and communicate with on a daily basis.[pullquote]PCs have actually never been stronger or more attractive tech devices—it’s more like a personal computer renaissance than a personal computer extinction. “[/pullquote]

There have also been impressive improvements in the physical designs of PCs. After a few false starts at delivering thin-and-light notebooks, for example, the super-slim ultrabook offerings from the likes of Dell (XPS13), HP (Spectre X360) and Lenovo (ThinkPad X1) have caught up to and arguably even surpassed Apple’s still-impressive MacBook Air. At the same time, to the surprise of many, Microsoft’s Surface has successfully spawned a whole new array of 2-in-1 and convertible PC designs that has brought new life to the PC market as well. It’s easy to take for granted now, but you can finally get the combination of performance, weight, size and battery life that many have always wanted in a PC.

Frankly, PCs have actually never been stronger or more attractive tech devices—it’s more like a personal computer renaissance than a personal computer extinction. The fact that we’ll likely be talking about the latest additions to this market later this week says a great deal about the role that PCs still have to play.

Podcast: PC Shipments, PlayStation VR

In this week’s Tech.pinions podcast Tim Bajarin, Jan Dawson and Bob O’Donnell discuss the recent PC shipment and forecast numbers from IDC and Gartner, and analyze the impact of Sony’s PlayStation VR on the overall virtual reality device market.

If you happen to use a podcast aggregator or want to add it to iTunes manually the feed to our podcast is:

Reimagining Personal Computing

As a person who tracks the ebbs and flows of the computing market—in all its various forms—the last few weeks have been interesting, to say the least. First, we saw Apple extend the iPad into its most compute-friendly (or computer competitive?) form, with the release of the iPad Pro and its accompanying Smart Keyboard and Apple Pencil. Then, Google unveiled the Pixel C, an Android-based 2-in-1 device with a detachable keyboard and a high-resolution screen (308 ppi) 10.2” screen. Finally, today saw the release of the much-anticipated Surface Pro 4 from Microsoft, as well as the unexpected Surface Book.

The clear takeaway from all of this is that, despite early criticisms, Microsoft clearly struck a chord with the Surface devices—particularly the Surface Pro 3—and the future of computing is looking increasingly like a combination notebook/tablet. This is ironic in several ways because many people wrote off these 2-in-1 devices as a fad, and arguably, the 2-in-1 category didn’t really exist until Microsoft brought out the Surface.

But now, several years, several iterations and several similar competitors later, it seems Microsoft may have been onto something after all. In fact, the Surface Pro 3 has done surprisingly well, and nearly singled-handedly rescued the clamshell form factor from tablet-dominated oblivion.[pullquote]Several years, several iterations and several similar competitors later, it seems Microsoft may have been onto something with Surface. after all.”[/pullquote]

Of course, I say this despite the fact that Microsoft insists on calling Surface a tablet and refusing to bundle the keyboard that nearly every single Surface purchaser ends up buying and using anyway. In practical, real-world use, however, essentially every single Surface Pro 3 I’ve ever seen is used like a clamshell notebook with a detachable keyboard.

Microsoft gave people interested in this unique design even more compelling reasons to consider one at their launch event today. The new Surface Pro 4 builds on the heritage, design, and even peripherals of the Surface Pro 3, but adds important extensions of its own. First, the company reduced the bezel size of the display and increased the screen size from 12 to 12.3”, all while maintaining its 3:2 aspect ratio. As expected, the company also updated the Windows 10-only device to Intel’s 6th generation core (codenamed “Skylake”) CPUs, offering variations with a Core M, Core i5 and Core i7. In addition, the company added a redesigned, magnetic Surface pen, and a Microsoft-designed IR camera that can do facial recognition for Windows Hello. There’s also a new set of improved keyboard options, including one with a fingerprint scanner, and all of them are backwards compatible with any previous Surface.

The real surprise of the day, however, comes from the company’s new Surface Book—what they call the first Surface notebook. Housed in a sleek, 3.5-pound aluminum design, the device offers a 13.5”, 6K resolution display (3K by 2K), the infrared facial recognition camera, the redesigned Surface Pen, and Intel’s latest CPUs. In addition, however, is a detachable metal keyboard that houses an additional battery and optional nVidia GPU. The “tablet” portion of the device—which the company claims is the thinnest core i7 computing device in the world—holds enough battery for 3 hours usage, but connected to the keyboard, you can get 12 hours, as well as access to the optional GPU (connected via PCIe over Microsoft’s proprietary Surface dock connector).

Pricing starts at $1,499 for the sleek new device, and ranges up over $2,000 with GPU and high-capacity (up to 2 TB) solid-state storage. Microsoft claims they’re going directly after the MacBook Pro’s bread and butter audience—creative types, graphics professionals, and other highly-demanding users. While it remains to be seen how well the new Surface Book does, my brief time with the device suggests that PC vendors and Apple have some serious new competition in the more “traditional” notebook space.

Given that Microsoft also used this event to unveil more details about its HoloLens head-mounted computer, as well as showcase how their new high-end Windows 10 Lumia 950 smartphones can function like a PC, by connecting directly to an HD monitor (or TV), and leveraging Bluetooth or USB keyboards, this day truly has shown the range to which Microsoft is extending the concept of personal computing.

All told, it was an impressive display, and one that will likely be looked back on as having started some important reimagining of what personal computers can and should be.

The Windows 10 Hardware Argument

The release of Windows 10 is bringing with it a range of perspectives on the eagerly awaited operating system and what it means for the future of computing. One of the biggest questions has been around its impact—or lack thereof—on PC sales. As anyone who’s watched tech industry news for the last year or so knows, the PC market has hit tough times, with last quarter’s shipments falling around 10% year-over-year according to market research houses like IDC and Gartner.

As a result, the PC industry is clamoring for something that will help reinvigorate it and drive new sales. In the past, a new Windows OS release was generally cause for celebration in the PC hardware and component business because it typically drove solid boosts in shipments—not always right away, but definitely within a year or so of its release.

This time around, however, things could be different. Microsoft has made it clear Windows 10 will be completely free for one year after its release to anyone owning a PC running a legitimate copy of Windows 7 or Windows 8. Because of this, some industry watchers are presuming that, instead of buying new PCs as they’ve typically done with major OS transitions in the past, many people will simply upgrade their existing PCs.

Microsoft has actually made this pretty simple to do. The hardware requirements for Windows 10 are extremely low by today’s standards. If you’ve purchased a PC over the last 6-7 years, it’s probably capable of running Windows 10. Plus, based on my own experience on several different machines as well as reading the accounts of many others doing upgrades, the company has done a good job of making the upgrade process smooth and relatively carefree. Of course, we won’t really know until the final bits have propagated out to the hundreds of millions who are expected to make the upgrade—a process likely to take several weeks—but early indications seem pretty solid.

Despite this, I’m still hopeful the PC industry will see some decent upside from Windows 10, particularly in the fourth quarter of this year and into 2016. The primary reason for my optimism is Microsoft has actually integrated quite a few new capabilities into Windows 10 that will benefit from new hardware. Some are more well-known and more obvious than others, but here are some of the key new functions I think can (and should) drive new Windows 10 PC hardware purchases:[pullquote]Microsoft has actually integrated quite a few new capabilities into Windows 10 that will benefit from new hardware.”[/pullquote]

  • Windows Hello—The new biometric login feature for Windows 10 points the way to a password-less future, at long last. To take advantage of it, you need to have either a new fingerprint reader or an integrated 3D camera, like Intel’s RealSense, built into your PC. Down the road, Microsoft is expected to support other types of biometric authentication methods, such as iris scan. In addition, the company is also expected to leverage standards efforts with the FIDO Alliance to extend biometric authentication onto other devices and services. Hopefully, it won’t be long before you can digitally authenticate to your Windows 10 PC from a wearable and then use that authentication to transparently log you into your online banking site, e-commerce site, and more.
  • Windows Continuum—The Continuum features will make 2-in-1 devices like Microsoft’s Surface, Dell’s Inspiron 7000 Series, HP’s x360, and Lenovo’s Yoga even more compelling. The OS can automatically adjust the user interface and details like icon sizes, allowing you to easily switch from PC mode to tablet mode. Eventually, Microsoft will also release Continuum-enabled Windows smartphones that will allow you to directly connect your phone to a monitor and keyboard.
  • Array Microphones for Cortana—With Windows 10’s new personal assistant feature, you will likely talk to your computer a lot more than you ever have and a high-quality array microphone—which essentially integrates multiple mics working in tandem across the front of your PC—can make a big difference in the accuracy of speech recognition.
  • DirectX12—The latest iteration of Microsoft’s key gaming API comes bundled with Windows 10 and enables an impressive range of new capabilities for PCs with improved graphics—whether it be dedicated GPUs from nVidia or AMD, or even the graphics enhanced, sixth generation APUs (code-named Carrizo) that AMD just released. Games that support DirecX12 can now fully support multi-core CPUs, as well as better support multiple GPUs, better leverage GPU memory, and much more.
  • GPU Acceleration–The new GPUs and APUs aren’t just for gaming either. Many different elements of the Windows 10 UI, as well as video playback, web page rendering, JavaScript performance, and much more now benefit from hardware GPUs. By themselves, none of these elements are game changing but, taken together, they should provide a much smoother visual experience on new Windows 10 hardware.
  • Display Scaling—Speaking of displays, Microsoft has also made working with multiple displays and/or higher resolution displays much easier. Gone are the days of unreadable icons and text on high-resolution screens.
  • New CPUs—Both Intel and AMD are making important new introductions to their line of CPUs—the upcoming Skylake from Intel and the previously mentioned Carrizo from AMD. As with any new CPU release, the performance will improve but, more importantly, each is expected to offer important improvements in battery life and in the quality of its integrated graphics. Given the growing role of graphics acceleration across Windows 10, these developments are important even for non-gamers.
  • Wireless Charging—An additional benefit that Intel is expected to bring to the table in the early fall is a new chipset platform for its Skylake CPUs that will offer wireless charging using the new Rezence standard on certain higher-end notebook PCs.

Of course, another key benefit of getting a new PC along with a new PC OS is the “clean slate, fresh start”. Most people tend to accumulate lots of “stuff” on their PCs over time—extra applications, files, desktop icons, etc.—and the ability to start over is often one of the nicest benefits of getting a new PC.

Not everyone who upgrades to Windows 10 will need a new PC, obviously, but for those who may be interested and choose to do the research, there are some pretty compelling reasons for buying new hardware. The percentage of those who choose to do so will be a critical metric to closely watch.

Why Do All Of You Hate Windows Phone So Much?

I have used mobile phones for two decades. I have tried nearly every single platform. I consider myself a good judge of functionality, durability, usability and value. I have spent the past six months using a Windows Phone — a Lumia 1520 — as my primary device. It is big, beautiful, intuitive, powerful. The battery, more than double the iPhone’s, actually lasts me all day long. Cortana knows my voice better than Siri. Live Tiles provide information at a glance better than any iPhone app and all my iPhone notifications. Nokia’s HERE Maps are more responsive than Google’s. The display is magic.

People stop me in public and ask me if they should buy one.

I always say yes.

A few, however, ask if I can recommend it over their iPhone or Android phone.

For this, I have no answer.

For better or worse, iPhone and Android are good enough for, well, nearly every single smartphone user on the planet. I have no reason to believe this will change soon.


Sales data, mostly. Management shifts inside Microsoft, partly. Plus, I ask people. I ask actual human beings both online and in physical space. I ask why they chose the iPhone or an Android phone. I also ask, and this is always more insightful, why they did not choose a Windows Phone.

But before that, let’s take a look at the numbers. They are unforgiving.

No One Is Using Windows Phone

The smartphone wars are far from over. The near term addressable market for smartphones is in the billions of units.

Global smartphone growth
Global smartphone growth

And yet…

As smartphones become more vital to our lives, as prices drop, as the technology spreads, as smartphones link to more devices, wearables and services, Windows Phone remains barely a blip. Tech.pinions estimates the Windows Phone install base at a mere 2%.

Smartphone install base
Smartphone install base

Love your Windows Phone? Love Nokia design, imaging, sound quality, build quality? Happy with how Windows Phone offers a clear UI alternative, a uniquely innovative means to group contacts, superior music streaming versus Beats?

It does not matter, apparently.

The market has spoken — a billion times over. It can find no valid set of reasons to choose the Lumia Icon or Lumia 920, 1020 or 1520, or any other Windows Phone instead of an iPhone 5c or every model of Android.

It gets worse.

As the Tech.pinions analysis reveals, smartphone sales are dominated by the usual suspects — Apple and Samsung, plus numerous Chinese-based vendors. Nearly all of these are exclusively focused on Android.


Lest you think Tech.pinions numbers are an outlier, Tomi Ahonen aggregates data from several manufacturers and industry groups. His smartphone market share numbers align closely with Tech.pinions.

Spoiler alert: Almost nobody wants Windows Phone.

Smartphone share
Smartphone share

Bad, yes. Worse — the most recent quarter offered little hope, with market share for Windows Phone actually dropping:

Smartphone share

By next quarter, Microsoft’s newly acquired Nokia division, which is responsible for the vast majority of Windows Phone sales, may not even crack the top 10:

Smartphone share

Coolpad/Yulong? Ever heard of them? They sold millions more smartphones last quarter than did Nokia. To be fair, their Samsung Galaxy Note flattery is quite nice. 


How can this be?

Why Is No One Using Windows Phone?

I want Windows Phone to succeed. I want yet another great American company to be a central part of our global, mobile, highly technological future. Plus, Microsoft can offer users a rather stunning array of uniquely valuable services and platforms. Skype, identity, Xbox, Office, OneDrive, Yammer — an unmatched range of corporate, productivity and connectivity tools that may be peerless in the computing world.

Why, then, are their phones so thoroughly rejected?

I said above I asked people why they did not choose a Windows Phone. That is a somewhat misleading statement. Because as it turns out, almost everyone I asked had not even considered a Windows Phone. They could give me no answers.

A few, however, had considered a Windows Phone. Or at least revealed awareness of its existence. Their responses to my informal survey are telling.

1. Microsoft Derangement Syndrome

If I were to state here Microsoft saved Apple from bankruptcy, the vitriolic comments would never end. Should I remark Apple is a great artist — “and great artists steal” — it would generate far more heated, angry response than could ever be justified.

And yet people have no qualms about openly hating Microsoft. The ancient slights, real and perceived, have not healed. I confess I was surprised by how many people made it clear to me they would have nothing to do with Microsoft. Ever. Whenever they have a choice.

I find this Microsoft hate odd and unproductive. I presume a change in perception will occur now Steve Ballmer, the physical manifestation of all that rage, no longer has a lead role at Microsoft.  

2. Live Tiles

In theory, live tiles should flourish on our mobile devices. They deliver timely, desired information direct to the user’s screen, available at a glance.

In reality, the static app won.

Users I spoke with prefer the pull of static apps to the push of live tiles, even if they could not fully explain why. They also did not care for the look (design) of live tiles, how they twinkle and spin, nor did they express any desire to pin an app, a site, or other information to their home screen. 

When it comes to smartphones, the look and feel of Apple’s iOS is what people expect, no matter who provides it.

3. No There There

Whether out of vision or necessity — or more likely both — Apple made the iPhone the center of our computing world. Microsoft continues to place the Windows PC at the center of our computing world.

This is not the future.

This snapshot of the US browser market is telling. On mobile, Microsoft is nearly non-existent.

mobile browser share

Should anyone still think PCs will ever again be the center of our world, take note of this Mary Meeker graphic which reveals time spent in front of our various screens.

screen time

Those I spoke with viewed Microsoft as a PC company, not a mobile one (or a cloud one, even). Satya Nadella’s “mobile first, cloud first” strategy sounds exactly right, but his words have not resonated with end users.

4. iTunes

Of course, iTunes. Children use iTunes. Grandparents use iTunes. We all use iTunes. Over and over again, people tell me — and this includes Android users — that without iTunes, or seamless access to their iTunes content, they won’t even consider the alternative device.


5. There’s An App For That (But Not Really)

It’s been stated a million times and it cannot be overstated. The Windows platform desperately desperately desperately needs more and better apps.

There are far fewer apps for Windows Phone, and most of those do not offer the robust experience found on the iPhone.

It is now far easier to buy far more software and content for Apple devices than for Windows devices. This is a stunning reversal. Every person I asked brought up the ‘app gap’.

6. By Any Other Name

Do customers want a Nokia? Do customers want a Lumia? Is Windows Phone high-end, low-end? Is it a premium, integrated device or an OS licensed by unknown entities such as BLU Products, Yezz, BYD, Wistron and Prestigo?

The Nokia XL, which I consider to be an amazing device for the price, runs atop Android. But it looks like a Windows Phone.

What is it?

In my regular discussions with non-technical people, primarily in the US, a smartphone is:

  • iPhone first,
  • Samsung second,
  • Android third

in that order.

Microsoft’s marketing team must gain significant traction within our already crowded heads if it hopes to ever sell Windows Phone.

And We Continue…

Now, my personal experience.

7. Separate But Unequal

I have walked into dozens of carrier retail stores in the United States. Until recently, it was difficult even to locate a Windows Phone.

It gets worse.

At multiple retail stores, as I am examining a Windows Phone, a helpful salesperson has steered me toward Android. Microsoft needs to fix this problem stat.

8. No Self Control

What can I control with my Windows Phone?

My smartwatch? My thermostat? My television? My PC? My Xbox?

The smartphone is the center of our computing world. To succeed, Windows Phone must become this. While no one brought this up, I think the lack of an obvious, flourishing ecosystem centered around Windows Phone continues to limit adoption.

9. The iPhone Box

As much as I love the beautiful, colorful, brilliantly designed polycarbonite Lumia 1520 for example, perhaps Microsoft should focus on making devices that much more closely resemble the squared, austere iPhone. This seems to be what the market wants.


Ditch the colors, the curves and the unapologetically plastic design. The Lumia Icon mimics the boxy, metallic design of the iPhone. Perhaps that is how all Windows Phones should look. I hope I am wrong, but the world says otherwise.

10. Continuity

Apple made a splash at WWDC by promising “continuity.” That is, creating a seamless experience across devices — iPhone, iPad, Mac. Microsoft needs to show me and all its customers how Windows Phone can or will offer a seamless, integrated, multi-device experience. 

Nowhere To Go But Up

It no longer matters whether Windows Phone is better, just as good, different, or some combination of these. The iPhone and Android are everything users need, which leaves Microsoft on the outside. 

What happens next is up to Microsoft, not the public.

Apple once faced this exact same situation. They were forced to become something other than what they were, despite their abiding belief they offered a superior, or certainly equivalent, product. After a long, difficult slog, it worked out rather well for them. I hope the same for you, Microsoft. I know it will not be easy.

Mac at 30: The Shadow of a Smile

happy-macBen Bajarin points out that a key characteristic of Apple for the past 30 years has to make things as simple as possible for users and the same spirit that motivated the Mac in 1984 drives the iPad today. I’ll agree and go further: Apple’s dedication to user experience extends to making its customers feel happy.

As Steven Levy notes in his outstanding reflection in Wired on the launch of the Mac, “it opened with a smile.” To be precise, with the friendly “happy Mac” icon, designed with the rest of the original system icons, by
Susan Kare. The disk would spin for a while and eventually a “desktop” would appear, filled with more of Kare’s icons. Click one, using that other novel device, the mouse,  and something interesting would probably happen.

Unless you were using computers back in the early 80s, you probably don’t realize how stunningly differnet the Mac was. When you fired up an IBM PC , you heard some beeps (the Power On Startup Test). Then some cryptic configuration information appeared on the screen. Finally, if all went well, you would be presented with a line on the screen that looked like:


or, if you had a hard drive


followed by a blinking cursor. If you typed in a valid DOS command, something would happen.

The Mac wasn’t always happy. If the boot disk was missing or unreadable, it would show this puzzled icon


mac-bombAnd if the Mac crashed, as happened not infrequently in those days, you would get the dread system bomb. This was the Mac at its most DOS-ish. The Resume button, like the Continue button on early Windows error messages, did nothing useful, even when it wasn’t greyed out. And the ID number, more often than not negative, provided no useful information, at least not to ordinary mortals. But, at least, there was always that whimsical bomb.

The original Mac belonged to what was still a primitive era of personal computing. Things went wrong at a rate we would not tolerate today. But the Mac managed to mostly make its users happy by making things easy and friendly, while IBM PCs remained hostile, intimidating devices (the first usable version of Windows was six years in the future when the Mac launched.)

Apple has never lost this impulse. The original iPhone was far more complex and capable than the smart phones then on the market, but no one needed an instruction manual. You picked it up and you could figure out how to use it. The iPad, by virtue of being a some level just a big iPhone, was even more obvious.

Microsoft, by contrast, has never quite gotten the hang of this art of making users happy. The Windows 7 and Mac UIs are closer than they have ever been, and Windows Phone, while introducing a whole new UI metaphor, was relatively comfortable. Unfortunately, the effort to translate it to the PC with Windows 8 produced a hybrid mess, in which you can never live completely in the familiar world of Windows 7 or the new, but well conceived, world of the Phone-like Metro UI. It does not open with a smile, and it doesn’t make many users smile either.

Three Growth Story Lines for Apple in 2014

The more I study at the economies of scale within the tech industry the more I taken aback by the opportunities that lie ahead. Some opportunities like the traditional PC may not be big market comparatively but they can be very healthy markets. Others, like smartphones and tablets, are not only very large markets but they are also extremely lucrative ones.

As I have studied the why behind many market developments from the past 30 years of this industry it is truly amazing how monumental shifts in the market have favored Apple. Things I’m not sure anyone could have predicted nor anticipated. Apple simply kept being Apple and stayed true to their purpose and vision and found themselves at the right place at the right time to capitalize on these shifts.

Looking at how many of the largest global markets are developing there are several important Apple growth stories to highlight.

The iPhone (Literally)
For the past few years, analysts have been noting a slowdown in not just particular quarter of iPhone sales but also the smartphone category overall. We are witnessing the maturing of many markets of the smartphone category. This is a key observation because when a category reaches maturity the market begins to act different. One of the key things we have observed over the past 30 years with regard to consumer markets is that when they mature they segment. The result of this segmentation is increased competition and increased consumer choice. Diversity is a fundamental to mature markets and critical as they reach post-maturity (like the automotive market for example).

Because of this we anticipate Apple to start even further diversifying the iPhone line and most logical roads lead to a larger iPhone as a part of an expanded iPhone family of products. However, a larger iPhone is actually a key growth strategy (excuse the pun) for the global growth of the iPhone.

While sales of big phones are relatively small comparatively in the US there increasingly the norm in China and to a degree India. On top of that, big phones are a key to premium segments of each of those big high growth markets. Our conclusion is that for Apple to compete in premium in China and India a larger iPhone is the key.

We believe a larger iPhone could spur new growth for the iPhone even in saturated markets like Europe and US but also be a catalyst to grab new land in markets like Asia and India.

The Mac
I’ve been anticipating the Mac growth story for some time but I believe we are finally on the cusp of it. Without question the total addressable market for PCs has shrunk. That being said we believe the fundamentals of a significant market refresh are in place. Our research indicates that a high degree of self-awareness now exists by those who know they need a desktop or notebook form factor. Because of this we are observing that worldwide sales of notebooks in the higher priced tiers actually grow where they have typically remained flat. With this we are anticipating an ASP increase in the PC category as consumers realize that if they truly need a PC they want to buy a good one, which will last, and deliver the best value for the money, since they will likely hold onto it for 5 years or longer.

The fundamental shifts in the PC landscape we are observing favor Apple’s strategy with the Mac. The Mac also has the most to gain since it is starting from a lower market share percentage than Windows based PCs. Our estimates are that Macs make up approximately 6.25% of the total PC install base to date and represented 5% of PC sales in 2013. We estimate the percentage of Mac install base to surpass 10% by the end of 2015 with a target potential of 20% of the total WW PC TAM.

The iPad Air
Much of the focus over the past year has been on the iPad Mini. But a careful analysis of the iPad install base would highlight that there are more larger screen iPad’s in the current install base of Mini’s by nearly a 2-1 ratio. We believe if a larger iPhone comes to market it will challenge the existence of the iPad Mini. In fact, one way to think about the iPad Mini is as a transitionary product. This does not mean the iPad Mini goes away and it may–and should–remain as a part of the portfolio. We simply feel the volume opportunity is with the iPad Air.

Part of this logic is due to my conviction that the iPad Air is the new general purpose mass market computer. We believe that many consumers now are self-aware of their own computing usage habits and recognize the PC is overkill for 90% or greater of their everyday use cases. They still do value a larger screen and highly mobile compute device and we believe this market awareness favors the larger iPad to absorb a significant portion of the upcoming PC refresh as well.

We also believe the iPad Air represents a significant growth opportunity in markets where PC penetration is very low. We believe the iPad has a a groundbreaking opportunity to bring computing to the masses as the first personal computer for many in developing markets.

Ultimately we believe market fundamentals are shifting into the favor of Apple’s strategy. We also believe other vendors will catch on to this which is why we are anticipating certain categories to continue to see ASP increases. Seasonality plays a role in every vendors growth and understanding each regions seasonality cycle is key. But the bottom line is we are seeing positive signs in developing markets that those price sensitive customers who entered the market with low-cost phones, tablets, and PCs, are now starting to move upstream and become more value conscious than price conscious.

Well still less than half the planet yet to own a smartphone, PC, or tablet, the growth opportunities in this industry remain significant.

Holiday Shoppers Gifting Themselves

Now that we’re fully in the throes and craziness of the holiday shopping season—just seven shopping days left until Christmas!—it seems appropriate to further investigate how the process really works, especially when it comes to electronics purchases. In fact, I’ve always been curious to not only know what items are hot sellers each year, but what drove the purchase decisions. The common perception, of course, is that most holiday shopping outings have an intended gift recipient in mind. But recent research just completed—the first report created by my new firm, TECHnalysis Research—reveals that many of the electronics purchases made in the early part of the holiday season are actually for the buyers themselves.

Specifically, in a survey of 401 US consumers aged 18-74, we found that a full 50% of electronics purchases made on Thanksgiving Day, Black Friday and Cyber Monday—either in retail stores or online—were for me. Well, not actually me, really, but the “me” of the shopper who made the purchase. The chart below summarizes the basic results.


Perhaps not surprisingly, women were a bit more generous than us guys, with only 47% of female’s purchases being for themselves vs. 47% being gift purchases and the remaining 6%—like the total numbers—a “non-gift” purchase for others. Men, on the other hand, listed 52% of holiday electronics purchases as being for themselves, 42% as gifts for others and 6% as “non-gift” purchases for others. Clearly, lots of tech shoppers wait for and specifically target these huge shopping days for their purchases—either that, or the spirit of Uncle Scrooge is perhaps a bit more alive today than many of us would like to admit. But I digress…

The top-selling items among survey respondents were large-sized tablets (those with screen sizes greater than 8”), followed by game consoles, small-screen tablets (under 8” screen sizes), PC accessories and smartphone accessories. The chart below lists the top ten of the 19 categories that were covered. The x-axis represents the % of respondents who made a purchase in that category.


Of those purchases that were made as gifts, the top category was actually small tablets, which makes sense given their lower prices, followed by larger tablets and game consoles. Interestingly, the top category for both personal purchases and as “non-gift” purchases was PC accessories—which covers things like USB drives, speakers, keyboards, mice, cases, printers and more.

In terms of buyer rationale, 57% of the purchases were considered “net new” devices, and 43% were replacements for existing devices, though the numbers ranged fairly significantly based on the category of device. For example, 75% of small tablets were considered new purchases, whereas only 32% of desktop PCs were additions to the household.

An interesting statistic regarding the new category of smart watches and other wearable devices was that only 45% were considered new and 55% were replacements. To be fair, the sample size for that group was only a modest (and not statistically reliable) 11 purchases. Still, it suggests either that early purchasers of those devices were not happy with their first choice, or that it’s the same people who keep buying many of the different options now available. Only time will tell….

Another interesting statistic from the study relates to the manner (and location) in which the purchase occurred. For online shoppers, which were intentionally just over half of the total respondents, 45% of purchases on Thanksgiving or Black Friday were made on mobile devices—either tablets or smartphones—while that number was 39% for Cyber Monday purchases. Additionally, 11% of all online purchases made on either Thanksgiving or Black Friday were done while the individual was mobile—either while shopping, while travelling, or at another public location, such as a café. If there was ever a question about the impact that mobile devices have had on people’s lives—let alone their shopping—these data points clearly show it.

If you’re interested in learning more, you’re welcome to download a free copy of the top-level results from the study at the TECHnalysis Research sample deliverables page.

Apple’s Free OS Upgrades and iWork Could Leave a Mark on Microsoft

Apple’s announcement Tuesday brought with it many innovations across the span of tablets, notebooks, and workstations. Apple introduced the new iPad Air, updated the iPad mini, redesigned the MacBook Pro, and provided more information on the Mac Pro.  I attended Apple’s event, and one announcement that didn’t get much attention until Microsoft’s blog is that much of Apple’s key tablet and personal computer software is now “free”.  Over the long-term, I believe this could have an impact not only on Microsoft, but its OEM partners, too.  Let me start with what Apple announced.

Yesterday, Apple announced that with the purchase of every new iPhone, iPad, and Mac, OS upgrades, iLife and iWork will now be “free”, or downloadable and usable for no charge.  Think about that for a second…. Free, high-quality operating systems, lifestyle, and productivity software across phone, tablet and notebook and woIMG_8358 (2)rkstation.  Consider for a second that it costs $120 to upgrade from MS Windows 7 or Vista to Windows 8.1 and an MS Office 365 license costs $99 per year or $300 over a three year period. I believe this will make a difference to desktop software in the long-term.

From a tactical point of view, this reduces the Apple premium price for the premium experience. Let’s consider the new 13” MacBook Pro. What was once $1,299 could now appear $879 if you factor in three years of MS Office and one major MS operating system upgrade.  This is a TCO basis that may be more appropriate for businesses than consumers, but does comprehend the potential full costs.  I don’t believe this will immediately be comprehended in consumer’s or businesses value proposition, but I do think overtime, it could. Now let’s look at this strategically.

Microsoft has diversified over the last decade into enterprise software and services, but Office and Windows, including upgrades, are still cash cows.  Enterprises don’t pay list price for OS upgrades or Office, but based on MS’s profit margins, there is still a lot of “room” to work.  And it’s that “room” that Apple intends to pierce based on today’s announcements.  Consider for a minute what the MS world would look like to Microsoft’s customers and partners with the expectation of free OS upgrades and free Office.  Apple is essentially commoditizing OS upgrades and productivity software.  The PC software industry has already has been impacted by the mobile world and I don’t see this stopping anytime soon.  In fact, Apple’s announcement exasperates the issue.  PC software and services like Windows upgrades and Office will continue to look more expensive year after year.

So what does this mean to MS’s partners?

MS OEMs like Dell, HP, and Lenovo now must consider the entire value proposition with PCs with Windows and MS Office.  Consider that OEMs do drive revenue selling Office. Just look at how hard they pressure sell you in on-line configurators.  OEMs recognize that Office is the business standard, but how do you deal with a “free” cloud and client offering from a credible brand like Apple over the long haul?

Free MS Office productivity alternatives to Office have been available for 20 years, but this time, it’s different now.   PC software that costs a lot of money looks odd when compared to low cost mobile and freemium models.  As I said before, over time, I believe buyers will be less likely to pay as much as they do today for PC software, look more closely at the alternatives.  This creates a big challenge for Microsoft.

I believe that OEMs, because of the vanishing software opportunity, just have one less reason to connect themselves to Microsoft and more strongly expand their opportunities with alternatives like Android, Chrome OS, and Linux.  This transition has already started when you look at Dell’s, HP’s and Lenovo’s products, but Apple just gave OEMs another reason to invest more into the alternatives.

Net-net, Apple’s “free” software announcement will hurt Microsoft, starting with consumer, then bleed over to education and small business.  I don’t think this will have much of an impact to medium and large enterprises because Microsoft has money to move around (Exchange, SharePoint, Windows Server, Lync, etc.) but will certainly come up in Microsoft price negotiations.

What to be Aware of Installing Windows 8.1 Preview

It has been 24 hours since Microsoft released Windows 8.1 Preview and while many have successfully installed it, some have not. I want to share with you my experiences so that it may hopefully save you some time this week.

Immediately after the link was released, I started downloading on my primary notebook, the Dell XPS 12.  I got an error message that said, “Your Windows 8.1 Preview install couldn’t be completed. Something happened and the Windows 8.1 Preview can’t be completed.”  I get the choice to “try again” or “cancel”  My expectation was that there was a lot of traffic hitting the servers and I tried again… and again, and finally connected t the store.  At the end of the 20 minute download an error message appeared.  The message said, “Something happened and the Windows 8.1 Preview couldn’t be installed.  Please try again. Error code: 0x80240031.”  I was given the chance to “Try again” or “cancel”.  I tried and tried again.  Then I searched on the error message but no information was available.  So I figured it was a bad machine or Windows 8 load.  Time to try another.

So I tried a system builder constructed new Intel Haswell machine.  Same problem.  Then a Lenovo Yoga 13.  Then Microsoft Surface Pro. Same issue.  I contacted the helpful folks at Microsoft who said they would look into it and get back to me.  They did ask some clarifying questions about what I had, because there are some issues they have found and shared on a blog post.  Users cannot upgrade yet Atom processor-based systems or those with Windows 8 Enterprise.

So I then decided it had to be an overwhelmed server issue so I waited  till the next morning.  I tried all four systems again and then, because I had seen someone from Nvidia talk about Yoga 11 success, I tried it on that.  Same result.  No joy.  I am currently in the process of reimaging the Yoga 11 and I will keep you updated along the way.

My message to you: Don’t waste your time like I have on 5 different systems…. move on, do something different for a few days and come back until they’ve sorted out the issues.



Apple Could Challenge Microsoft for Desktop Dominance. But It Won’t

Apple’s opportunity to dominate desktop computing probably disappeared the day in 1981 that IBM shipped the Personal Computer. Apple’s first attempt at a “business” computer, the Apple ///, was a technical and commercial flop. The anti-corporate “computer for the rest of us” marketing pitch that accompanied the introduction of the Macintosh in 1984 went over badly with business at a time when businesses were buying most of the computers.

The argument, occasionally still heard, that the better system lost is arguable at best. The Mac was a huge usability breakthrough, but in the early years, the graphical user interface demanded more than the hardware could deliver. Microsoft made a major leap with Windows 3.0 in 1990 and by the mid-1990s, when consumer sales became really important, Windows 95 and Windows NT were moving ahead of the aging Mac OS. Mac continued to slip as Windows forged ahead and it wasn’t until Apple’s big switch to Intel processors in 2005, along with increasingly powerful and stable versions of OS X, that Apple had a real claim to equality, let alone superiority.

But the divergent directions indicated by Windows 8 and OS X Mavericks change everything. Although it was Steve Jobs who began talk of the post-PC world when he introduced the iPad in 2010, it seems like it is Microsoft that has bought into the idea. The attempt with Windows 8 to design an operating system that spans traditional PCs, hybrids, and tablets has resulted in a sub-optimal experience on both. With Windows 8.1, Microsoft seems on its way to fixing some of the worst problems of Windows 8 (and its ill-begotten sibling, Windows RT) on tablets by eliminating some, perhaps most, of the need to drop back into Desktop mode to accomplish key tasks. But only relatively minor changes are planned for Windows 8 on a traditional PC, an experience that leaves many users longing for Windows 7.

Mavericks, by contrast, marks Apple’s renewed commitment to the traditional PC, a commitment that had been at least a little in doubt with the surge of iOS features into Lion and Mountain Lion. Except for improved notifications, an idea that borrows from and builds on iOS, the big changes in Mavericks are Serious PC Stuff: A new tabbed interface for the Finder, tagging for better file location and classification, major under-the-hood changes to cut power consumption, and greatly improved support for multi-display setups. Along with a badly overdue, but radical and exciting overhaul of the Mac Pro, Apple is telling Mac users, “We’ve got your back.” [pullquote]Mavericks, by contrast, marks Apple’s renewed commitment to the traditional PC, a commitment that had been at least a little in doubt with the surge of iOS features into Lion and Mountain Lion.[/pullquote]

Apple is now in a position to claim clear superiority in traditional PCs. The new MacBook Airs (pictured) are the first computers to ship with Intel’s next-generation Haswell processors and through a combination of close work with Intel and a lot of software fine tuning, Apple is able to beat the industry by a wide margin on battery life–something made possible by complete control of hardware and software. I expect Apple will do equally well with its MacBook Pros and iMacs this fall when Intel ships the rest of its Haswell line.

Macs could rule the world. Apple’s market share has been rising as Windows PC sales have fallen sharply while Mac sales have been mostly flat. I expect this trend to continue and for Apple’s share to rise. But–in partial answer to the question raised by John Kirk earlier this week–I don’t expect Apple to go after the mass market still dominated by Windows.

The reason is simple. According to NPD, the average selling price of a windows PC at the end of last year was $420. ((NPD data probably understate the average somewhat because the firm measures retail sales, missing the often more expensive units sold directly to enterprise buyers.)) The cheapest Mac is a $599 mini, and the cheapest laptop is a $999. Apple will cheerfully sell you an iPad for as little as $329 and provide a first-rate tablet experience, but there is no way it can provide what it regards as a satisfactory Mac experience at the price most windows machines sell for. ((I don’t mean to perpetuate the myth of an Apple premium. On an equal feature basis, Macs are no more expensive than Windows systems. It’s just that Apple only sells top-of-the-line products.))

The great bulk of buyers is unable or unwilling to spend what Apple commands, and Apple is unwilling to cheapen its products, slash its margins, or both, to meet the market. As a result, Apple will settle for modest gains in share .

This does not mean, however, that Microsoft is home free to at least hold on to its share of a shrinking market. The real threat could come from the bottom, from Google’s Chromebook. Chrome OS, whose only application is the Chrome browser and which depends on web apps (key ones modified to work offline) to do anything, performs well on hardware far more modest than required for Windows or Mac OS. For users with relatively modest needs and good internet connectivity, a Chromebook is a low-cost viable alternative to both a tablet and a Windows laptop. And it will only get better as Google converges Chrome OS and Android, potentially bringing a richer store of apps to Chrome.

These days, the fact that Apple is not coming after them as hard as it might is cold comfort to Microsoft.



Why I Prefer Convertibles Over Notebooks

Ever since Microsoft unveiled Windows 8 at the BUILD event in 2011, it was apparent that the Windows PC future was touch, gestures, tablets, convertibles, and hybrids.    Intel’s unveiling the following year at Computex 2012 with a plethora of form factors solidified that future. To predict the future of PCs, one must have an opinion on a few important areas of interest. One topic that requires a lot of analysis is if a convertible PC can replace your notebook or a 10” tablet.  I do a lot of contextual research and I wanted to put it to the test and share with you my personal experience.  I can tell you that under many circumstances, the latest convertibles can replace a notebook and/or a 10” tablet.  Let me start with the methodology.  You can find the detailed test matrix here.

For three weeks, I stopped using my Nexus 7 and Apple iPad and used three different convertible PCs:

  • Dell XPS 12, Lenovo IdeaPad Yoga 13, and Microsoft Surface Pro

I switched between the convertible models above and performed 12 unique usage models:

  • Productivity- Calendaring, Presentations, Reading Email, Spreadsheet ,Take Notes, Writing Email, Writing Report
  • Fun- Watching Movie, Play Game, Reading Book/Magazine
  • Social media- Web-based HootSuite, Facebook, Google+, LinkedIn
  • Surfing the Web- via Google Chrome and Internet Explorer

I then used each of those usage models across five different locations:

  • Desk- with a second display as a laptop
  • Couch- in my lap as a laptop and tablet
  • Bed-  as a laptop and tablet
  • Airplane- domestic and international, mostly as a laptop

Finally, I ranked the experience as Poor, OK, Good, Very Good, and Great.  I found what came out of the data quite interesting and I think you will to.

The first big takeaway is that for me, I prefer a convertible over a traditional notebook.  I don’t feel like the experience was compromised in any way that didn’t have an easy workaround.  Every one of the convertibles was an Ultrabook, meaning they all had solid performance with a Core i5 or i7, woke up very quickly, had at least 5 hours battery life and had sufficient storage at 128GB of SSD unless you’re a hard core PC gamer.   Both the Dell and Surface Pro had 1080P displays, too, so these were no compromise.  To provide a thin and lighter experience, all convertibles had minimal number USB-3 ports, so if that’s important to you when you are attaching a keyboard, mouse, scanner, or printer, just get a USB-3 adapter.  To remove many of the cables when I sat at my desk, I used a wireless keyboard, wireless mouse, wireless printing and only needed one tiny Logitech Unify USB dongle.

The second takeaway was that by making a few bi-modal software changes, a convertible can do a good job on tasks that were exclusively the realm of my 10” tablet.  Let’s take email and calendar. When I am using the convertible as a laptop, Outlook is best suited for this task.  When using the convertible in tablet-mode and I’m sitting on the couch, using Windows Mail and Windows Calendar were most comfortable.  Once I got familiar with the bi-modal software, it worked well. Another good example are movies.  I expected convertibles to have a lousy movie viewing experience but to my surprise it was pretty good when I switched to “movie mode”.  Movie-mode is when you flip the convertible so it’s screen-first, with the keyboard toward the back of the machine.  This worked well on planes, in bed and even on the coach.  This was one of my biggest surprise finds.  Movie-mode also helped when I was on an airplane when the person pulls their seat all the way back.  The display is oriented very close to my face and the keyboard is tucked away so that I could comfortably touch the display.The next major takeaway for me was that when I really needed to do something really quickly or was looking for that lightest weight and most convenient device, I reached for my smartphone. These were situations where I quickly wanted to check the weather, email, Twitter and even read the news with Pulse.  While my HTC One isn’t a “phablet”, the display at 4.7” and a lot larger than my previous iPhones.  So my large display smartphone fulfilled that convenience need.

Finally, there were things that weren’t a surprise that need to be stated for comprehensiveness.  Convertibles weren’t designed to be the best book or magazine reader.  The displays are large and the units are multiple times heavier than a real book or Kindle.  I read books on my 7” Nexus, not the 10” iPad anyways.   While the nearly 5 hours battery life worked pretty well on domestic flights between Austin and San Jose and New York, the convertibles ran out of gas on international flights if I didn’t have a plug.

Let me get back to the original question. Can a convertible PC replace a notebook or a 10” tablet? For me, in many instances, yes, in a few cases, no.  If you are willing to make some changes in the software you use on the device based on if you are using the convertible in laptop or tablet-mode, many usage scenarios will work very well.  I want to state that this is the state of the art today, but it only gets better in the future.  I expect that Intel will soon have the ability with Haswell to produce an SOC that has “Core-level” performance so that an OEM could develop a fanless tablet as thin as the iPad and with 8-10 hours battery life. This is based upon my predictions, not Intel’s.  AMD already has  its Temash SOC out enabling fanless tablets.  This will really change the game and substantially improve all the tests I performed.

If you’d like to look at my entire data set you can find that here.

Learning To Love the Chromebook (and Succeeding)

I have been a skeptic about Chromebooks since Google announced them. What could you really do on a pseudo-laptop whose only native application was the Chrome browser and which depended on an internet connection for most of its functionality. But I avoided sharing my opinion because I had never used on for more than a few minutes.

Now I have remedied that situation and you can count me as a convert. For the past cuple of weeks I have been spending a lot of time with a Chromebook. Not the drool-worthy $1,299 Google Pixel but a humble $250 Acer c710 with an 11.6” non-touch display, 4 GB of RAM, a 1.1 GHz dual-core Intel Celeron, and an almost pathetically old-fashioned rotating hard drive.

A Chromebook is far more restricted than a regular laptop of even a tablet. Without the ability to load standard applications, you must make do with web apps, which are limited both in scope and in functionality. But it is a good 80% or 90% solution, perfectly acceptable for the great bulk of what most people want to do most of the time. The applications and the operating system are both lightweight, so that performance feels snappy despite the modest specs.

Most important for those of use who live in a world where we are disconnected at least some of the time, the key Google apps, especially Docs, work offline. A Gmail add-on, officially still in beta testing, lets you read, edit, and reply to email messages offline.[pullquote]The Chromebook is very good at what it does well, and for a large number of people, it would be a more than adequate replacement for a conventional PC.[/pullquote]

I wrote this post mostly on the Chromebook, much of the time offline. The WordPress editor is not offline-friendly, so I composed in Google Docs, then copied and pasted into WordPress. The image was downloaded from the Web, saved as a local copy, and uploaded to WordPress. In terms of the apps I used, the experience was much like working on an iPad (or an Android tablet) except for the convenience, for writing, of working on a laptop form factor.

I used the image I found as-is. Chrome features a very limited built-in picture editor. Anything more sophisticated would have required using one of a number of on-line picture editors, such as Pixlr. Though it requires a live internet connection, it’s fine for occasional use and designed to be familiar to a Photoshop user. (Oddly, Google does not offer a Chrome version of its own Picasa photo tool.)

But I would n’t want to use the Chromebook to process a large number of images from my camera. It can’t handle the RAW format I like to use on by DSLR and there is nothing–at least that I know of–like Adobe Lightroom for batch processing of photos. And even with a fast internet connection, moving a large number of multi-megabyte photos to and from web servers will get tired quickly.

Similarly, I really wouldn’t want to do much audio or video editing on the Chromebook. I have too much invested in my familiar tools (Apple FinalCut and Adobe Audition) for these complicated chores, and any complicated video editing would be a tedious chore on the low-powered C710.

But this is all a little like complaining that a good bicycle isn’t a Lexus. A Chromebook cannot do everything that a Windows PC or a Mac (of even a Linux PC) can do. It can’t even do everything that a tablet can do. For one thing, the selection of games is very limited though there is, of course, Angry Birds. But it is very good at it does well, and for a large number of people, it would be a more than adequate replacement for a conventional PC.


Microsoft and Google’s Game of “Office Chicken” is Just Alienating Users

Google and Microsoft are battling it out on a lot of fronts, but many times there is little collateral damage to end users. Unfortunately, in a few cases, end users have been cast aside in the spirit of strategic lockouts and bickering. Two immediate examples are the Windows Phone YouTube app and the battle of the calendar. I’d like to drill-down into Google dropping EAS and Microsoft not supporting calDAV in MS Office to highlight just how much these two giants are damaging the end user and I’ll end suggesting a unique solution.

It all started with Google’s “Winter cleaning” in December where they decided to stop supporting Microsoft Exchange Active Sync (EAS). This meant that Microsoft products like Outlook and even Windows Mail and Calendar 8 would no longer work if they were connected using EAS. It also screwed over users like me who run their businesses off of Google Apps who wanted to use the calendar inside Windows 8 for use with their Windows 8 touch devices. I already used Outlook and synced with Google Apps using Google Sync free of charge. At the time, Google Sync didn’t work with Office 2013, so I was stuck with Office 2010 which is a horrible touch experience.

Microsoft could have invested some work into their offline or online calendars to work with calDAV, but they didn’t, and I believe that it was for the “Scroogled” cause, not because it’s difficult. You see, 20 person development shops or less support calDAV. At a minimum, Microsoft could have been more transparent about why they weren’t supporting calDAV or whether they would ever support it.

I’ve tried many times to get away from Outlook. I may be in the minority, but I cannot run a small business off of web mail and calendar. Some can do this just fine, but many of us need a real app, not a web app as it’s faster, has better offline capabilities than Google Calendar and has many more robust features. I tried Thunderbird, eM Client, Zimbra, but they all have fatal flaws; eM Client doesn’t support conversation email, Thunderbird requires the buggiest of calendar and address book plug-ins, and Zimbra is this odd web-app that didn’t connect with my Google Apps Contacts. For a Windows 8 touch experience, I just hid the Windows app and placed an Explorer link on my desktop to my Google Apps Calendar.

Last week, Google announced that Google Sync finally supports Office 2013. I was very excited, because this may enable me to have my Windows 8 desktop and Metro touch experience in one app. I installed Google Sync and the calendar wasn’t syncing. I uninstalled Sync and reinstalled it. That reinstall failed and it said I should reinstall Office. I uninstalled Office and reinstalled Office and then Sync. No joy. I searched for the problem and found it here. The forum post says,

Hi XYZ,We apologize for any inconvenience caused, we’ve identified an issue with Google Apps Sync with Microsoft Outlook 3.3.354.948 which can cause calendar events to not sync. Mail and contacts are not affected. Our engineers are aware of the issue and are currently investigating. You can also find this information on our known issues page referenced.

Regards, PDQ”

In other words, you can’t sync your calendars with Office 2013 or 2010, we don’t know root cause, and don’t know when it will be fixed. Thankfully, Google did provide a link that did work with Office 2010 but remember, 2010 doesn’t work well at all with touch and that’s what I am trying to solve.

I am going through this excruciating detail to emphasize a point: It’s users who are getting caught in the cross-fire between Microsoft and Google, and when they do, it wastes a lot of time and money and causes a lot of consternation. If I could punt both Microsoft and Google for office productivity, I would.

There is a solution though, and one that may surprise you. If you are a Mac user, you know what I am talking about here. You see, Macs work great with Google services, supporting IMAP for mail, calDAV for calendar, and carDAV for contacts and tasks. It’s built right into the native programs bundled with every Mac. Macs don’t support touch, yet, but if you are a consumer or a small business owner like me who is wedded to Google Apps and need a good desktop experience, then you need to strongly consider going to the Mac.

The moral of the story here is that by messing with users to play big company games with power plays, Microsoft and Google both risk alienating their base of users and driving them into the arms of Apple, at least in this situation. Users don’t like to be forced to do anything they don’t want to and want the freedom of choice. In a way, I hope losing users to Apple would shed some light a fire inside Microsoft and Google not to mess with users as this would be good in the long run.

Can Microsoft Compete in a Post-PC World?

Microsoft says it sold 100 million licenses for Windows 8 in the six months it was on sale. Not spectacular, but not bad either. But for Windows RT, Widows 8’s tablet-friendly little brother, things haven’t been so hot. Microsoft hasn’t given out numbers, but IDC estimates sales of Microsoft’s Surface RT at a bit over a million for October through March. It seems likely that combined sales of OEM RT products–all four of them–were even lower. By contrast, Apple is selling nearly 1.5 million iPads a week.

The failure of Windows RT–and it is getting very hard to call it anything else–leaves Microsoft in a terrible bind, as least a s a seller of consumer products. The post-PC era is upon us, not in the sense that traditional PCs are going way, but that they are no longer the center of the computing world, either in most people’s usage, in mindshare, or in sales. We’ve just entered this new era and it should be possible for a company with Microsoft’s resources to recover. But the first step in recovery is recognizing that you have a problem, and Microsoft doesn’t seem to quite be there yet. Consider Board Chairman Bill Gates’ comments on CNBC:

Windows 8 really  is revolutionary in that it takes the benefits of the tablet and the benefits of the PC and it’s able to support both of those. On Surface and Surface Pro, you have the portability of the tablet but the richness in terms of the keyboard and Microsoft Office…. A lot of [iPad] users are frustrated. They can’t type, they can’t create documents, they don’t have Office there. We’re providing them something with the benefits they’ve seen that have made that a big category without giving up the benefits of the PC.

In other words, what people want is more mobile versions of traditional PCs, and that’s what Microsoft is determined to give them. The problem is that this is a serious misreading of why customers are flocking to tablets. Mobility is, of course, an important attribute of the tablet. But so–and here is where Gates and Microsoft go wrong–simplicity. The iPad has limitations which users accept in exchange for wonderful simplicity and great ease of use. Tablets, and especially, the iPad, have the shallowest learning curve in the history of computing. Their software does not break. The process of updating their software is simple automatic. They don’t run Office but, while this may come as a surprise to Gates, many people do not see that as a disadvantage. They are, as my colleague Ben Bajarin would put it, a great example of “good enough” computing.

So what can Microsoft do about this? I have always thought the company made a strategic mistake when it decided to adapt desktop Windows to tablets rather than follow Apple’s lead by using an enhanced version of Windows Phone. It ended up compromising both the desktop and the tablet experience (based on the reports we’ve been hearing lately, such as this from ZDnet’s Mary Jo Foley, the upcoming “Blue” update to Windows is designed more to address Windows 8’s shortcomings as a desktop OS than to rescue Windows RT.[pullquote]I have always thought the company made a strategic mistake when it decided to adapt desktop Windows to tablets rather than follow Apple’s lead by using an enhanced version of Windows Phone.[/pullquote]

Windows 8/RT was a radical step for Microsoft, but in the end it just didn’t go far enough to succeed on tablets while perhaps going too far to win friends on the desktop. A true tablet OS simply would not have a Desktop mode that depends on a keyboard and mouse for usability, and Windows RT regularly requires going into Desktop for critical tasks (we can only hope that Blue will fix this.) The vaunted availability of Office is no advantage at all for most users because the Desktop Office apps simply don’t work well on a tablet. True touch versions of Office applications are reportedly in the works, but they are not expected before late 2014.

OEMs disappointed with Windows RT are building Windows 8 tablets. The most PC-like of these may succeed as sort of Ultra-ultrabooks, Windows 8 is fundamentally unsuited to a pure tablet. It requires too much process, too much battery power, too much storage, and too much keyboard. The same OEMs, even those most loyal to Microsoft, are also hedging their bets with Android.

That may well be too late. iOS 7, expected this fall, is likely to be a major enhancement of the iPad and we may see iOS 8 before the Windows tablet software upgrade is complete. Android tablet software still lags; the operating system has not made nearly as much progress on tablets as on phones. But Google and its partners will get it right sooner or later, and probably before Microsoft.

None of this means that Microsoft is going away. It’s back-end software powers most enterprise computing and its clients continue to have a vital place in business. For some business users, Gates might even be right about tablets: they need Office worse than they need the elegance and simplicty of an iPad. But with the mass of consumers, for whom a conventional PC is more likely to be a place where they store stuff rather than do stuff, Microsoft is in real trouble with no easy way out.



Windows 8: Hardware Innovation Is Outpacing the Software

Aspire R7 photo (Acer)


Windows 8 hasn’t spurred a boom in PC sales, but it certainly is inspiring some unusual hardware designs. The problem, though, is that no one seems able to quite master Windows’ touch and keyboard-plus-mouse dual personality.

Acer is the latest to try with the Aspire R7, a striking departure from a company not particularly know for adventurous design. Aimed at what the company calls the “duality of touch and typing,” the R7 is a convertible 15.6″ notebook with a unique “Ezel” hinge that allows the screen to move from a conventional laptop position to horizontal to reversed (for presentations.) It also can lie flat in a slate configuration, but at 5.3 lb. (2.4 kg) it’s unlikely to see a lot of tablet use.

I can see uses for both the horizontal and the reversed positions. It’s the more conventional arrangement that is, in fact, the oddest. The most strikingly unconventional thing about the R7 is the layout of the keyboard deck. The keyboard itself is placed at the very front of the deck, with a large touchpad above it. Yes, you read that correctly. The touchpad is above to top row of keys.

Photo of Aspire R7 (Acer) The display can be set up in two positions. In one (photo top), the bottom end of the screen sits just above the  top of the keyboard, covering the touchpad and looking a bit like a gigantic version of an iPad sitting in a keyboard case. In the other (photo left), the screen opens like a conventional clamshell. I spent a little time using the R7 in both configurations. The screen-forward setup is more convenient for touchscreen use since the display is closer to your hand position on the keys. But in my experience with Windows 8 so far, the limited availability and frequently poor quality of “Modern” (or Metro) apps means I spend most of my time using legacy desktop applications, And since these are not built for touch, they generally don’t work very well without a mouse or touchpad.

In alternative setup, the strange location of the touchpad is a real problem. When I am working in a typing application, I typically use my thumbs for most simple touchpad maneuvers, which lets me control the mouse without moving my hands from the keyboard. There’s no similar simple stretch available to reach the R7 touchpad. Furthermore, most of us now have 15 years practice with below-the-keyboard pointing devices and will spend a lot of time on the R7 poking at empty space. I hope to spend some more time with the R7 soon; perhaps the discomfort of using that oddly placed touchpad will go away quickly.

Microsoft could make this problem mostly go away by fully touch enabling Windows and key Windows applications. Maybe the Windows Blue update due in the fall will help, but there are depressing reports that a fully touch-ready Office won’t arrive until the fall of 2014.

Aspire P3 (Acer)The Acer Aspire P3 takes a different approach to the duality problem. Though billed as a convertible Ultrabook, its design is much more like a Microsoft Surface Pro, a Core i5-powered tablet with a detachable Bluetooth keyboard. But in a sad concession to reality, it offers one thing the Surface doesn’t: A built-in stylus holder on the tablet.

In Defense of iCloud

Screen Shot 2013-05-02 at 6.57.47 PM

You can’t analyze the industry as I do and not evaluate platform specific strategies to meet consumer needs. I study closely the platforms, ecosystems, and cloud services strategies of many companies. Right now the discussion is focused on Google and Apple for good reason. Google’s solution, similar to Microsoft’s, is hardware agnostic. Meaning the solutions can run on any hardware that allows it. Apple is unique in that many of their software and services solutions are available only to Apple hardware. Apple’s approach is rare, and rare is usually valuable, unless you work on Wall St.

Apple’s services strategy with iCloud has taken a beating from the media the past few months. Some of the criticisms are fair. One of Apple’s biggest challenges is to compete with other platform providers on cloud services and I think many of us agree Apple is not there yet. But, keep in mind Apple is an aspiring services company and I am confident they will get it right eventually. It just may take a little time, and the way market adoption cycles work, they do have time.

That being said, there is a cloud service that Apple provides that I think does not get enough attention. This feature happens to be one I personally find extremely useful. It is synchronization.

Change and Detect Engines

Sync has taken many forms through the years. I was first exposed to its power with the first and subsequent Palm Pilot devices. If you recall, sync played a key role on Palm devices. You had all your contacts on your PC, and if you wanted to access them on your Palm, you synched them. If you add a contact on your Palm Pilot you don’t want to re-enter it in your contact list on your PC so you sync them. The software knew what has changed and what has not changed on either piece of hardware and voila, the data stays consistent.

My company, Creative Strategies, worked with many sync services in those days with Intelli-Sync being the most public. They had an extremely useful bit of software that let your Palm Pilot sync with Microsoft Outlook. This was useful beyond measure at the time. As profound an experience as this was, the synchronization service that really got me thinking was developed by Microsoft and is called ActiveSync.

I first set Creative Strategies up with an Exchange server in 2000. It was one of the first things I did just after I joined the company. The whole experience sunk in when I started setting up the many Microsoft powered Pocket PCs I was using at the time. I would simply open up Outlook, put in my data, and boom, all my email was there. Wirelessly keeping my email in sync on all the screens in which I used email was and still is useful beyond measure. For years after that I told everyone who would listen that someday we will have the equivalent to ActiveSync for consumers that will keep all our digital stuff synced on all our devices. iCloud is exactly that.

Apple has heavily promoted the synchronization features of iCloud in many commercials. The idea of taking a photo on your iPhone and having that photo almost instantly show up on your Mac or iPad. Starting writing a document with Pages on your iPad and it picks up right where you left off with on your Mac. Any and all changes on one device are mirrored on all your other screens. When I only had one primary compute screen–the PC–this was not an issue. I only used one screen. But once I started bringing a number of compute devices into my life, cloud synchronization of key data became essential.

Currently there is not a single bit of critical information that I rely on for my day job and family life that is not synced across all my devices and those of my families screens through the cloud. For some of this key data I use Apple’s services and for others I use third party services. What matters is that I know I can get that document, photo, video, ebook, etc., on any screen at any time.

This is an extremely strong value proposition for consumers. When we interview first time customers to Apple’s ecosystem, often iCloud synchronization of things like photos come up as a highlight of their experience.

Are We There Yet

Of course this whole experience still has a way to go. But Apple has attracted the attention of many third party applications that are using cloud for data synchronization. My favorite, by far, is Tweetbot. I use Tweetbot on my iPhone, iPad, and Mac. I can be scrolling my Twitter timeline on my iPhone. Then when I move to my Mac or iPad, Tweetbot knows where I left off reading my Twitter timeline and takes me to the place right where I left off. For a Twitter addict like me, this experience is useful beyond measure.

I am, of course, not saying that Apple is the only one doing synchronization. Amazon syncs media, books, and more using WhisperSync. Google syncs data through drive, apps through the Play store, and more. What I am saying is that of all the platforms and ecosystems I have tried, Apple’s synchronization is the most encompassing and perhaps the most tightly integrated.

Cloud services and certainly synchronization is not easy. On all platforms I’ve used there are issues and sometimes things don’t work. People may say Apple is behind in some areas of their cloud services, but I can make the case that other companies are behind in theirs as well, namely platform integrated synchronization. And while I certainly don’t expect competing platforms to stand still, I don’t expect Apple to either.

The Strategic Importance of Intel’s New CEO

This morning Intel finally announced the successor to current CEO, Paul Otellini. Otellini steps down later this month and new CEO, Brian Krzanich, who is currently their COO, will then become CEO.

Here is a short background on Krzanich:

Brian M. Krzanich is executive vice president and chief operating officer for Intel Corporation. He is responsible for Intel’s global manufacturing, supply chain, human resources and information technology operations.
Previously, Krzanich was responsible for Assembly Test from 2003 to 2007. From 2001 to 2003, he was responsible for the implementation of the 0.13-micron logic process technology across Intel’s global factory network. From 1997 to 2001, Krzanich served as the Fab 17 plant manager, where he oversaw integrating Digital Equipment Corporation’s semiconductor manufacturing operations into Intel’s manufacturing network. The assignment included building updated facilities as well as initiating and ramping 0.18-micron and 0.13-micron process technologies. In 1996 and 1997, Krzanich was the Fab 6 plant manager in Arizona. From 1994 to 1996, he was a manufacturing manager for Fab 12 in Arizona. He also served as a process engineer at various Intel locations. Krzanich joined Intel in 1982.

Krzanich was presented an Intel Achievement Award in 1999. He holds one patent for semiconductor processing.
Krzanich received a bachelor’s degree in Chemistry from San Jose State University in 1982.
They also named Renee James President of Intel.

So what does this new leadership change mean for Intel’s future?

We believe this move is quite strategic and sets up an important new phase in Intel’s history. Brian’s strong role in running manufacturing will help Intel drive even more aggressive research and potential partnerships to keep their fabs running at full capacity. Intel is moving fast from 22 nm to 14 nm process designs, which fundamentally says Intel is doubling down in mobile and see’s this as their real future.

It is important to note that Brian’s role is to drive Intel’s strategy and be responsible for what R&D focuses on and anticipate future demands of their partners and what consumers will want in the future. This is what Otelinni has been doing and this top focus will now be in the hands of the new CEO. However, Brian’s intimate understanding of manufacturing and what makes the fabs tick is just as strategic.

We have heard that with the slowdown in the PC industry, most PC semiconductor fabs are not running at full capacity. However, from a bottom line standpoint, fabs need to run at full capacity if they are to be profitable. Intel recently announced the Intel Custom Foundry, which they offer fab manufacturing to fabless companies and has already started doing work for some small fabless design firms. However, Otellini has said that over time they could do work for big companies. I believe Intel’s top priority is filling the Fabs with their own chips, but one possible reason for this move is that over time Intel’s Custom Foundry could become even more strategic to Intel’s future.

Intel has also been criticized for not have a strong succession plan in place. I believe naming Renee James as president is also strategic. Intel has to deal with the possibility that if anything happened to Brian, Renee James could step in and a transition to new leadership in this situation would be seamless. One could decipher from this that James could be the next Intel CEO when Brian leaves the office (Intel has an age cap on CEOs) but I don’t think this necessarily so. I suspect her role as president could set her up for this but strategically speaking, this is in probably in place to protect a line of succession for the immediate future.

We are entering a new era in personal computing and quickly moving to what Steve Jobs called the post PC era. While PCs are not going away, mobile and embedded processors need to be the future of a company like Intel. Brian will have a daunting task to migrate Intel from its PC past and into a new era of personalized computing. I believe this move is the right one for Intel and naming someone with a long history at Intel and a strong manufacturing background is best for Intel at this time.

Windows vs. Mac In Schools: All the Wrong Reasons

The Maine Department of Education announced earlier this week that it was switching from Apple Macintoshes to Hewlett-Packard Windows PCs as the technology behind the Maine Learning Technology Initiative. Macs had been used exclusively since the program was started by then-Governor and now Senator Angus King in 2002.

I don’t think it makes a lot of difference whether Maine uses Macs or PCs in its schools. My guess is the state will pay a little less up-front and spending a bit more over the life of the machines because Windows software tends to be somewhat more expensive to maintain. But Maine made its decision for the worst possible reason, one that leads me to wonder if they have any idea of why information technology should be in schools in the first place.

Said Gov. Paul LePage (R):

It is important that our students are using technology that they will see and use in the workplace. The laptops use an operating system that is commonly used in the workplace in Maine. These laptops will provide students with the opportunity to enhance their learning and give them experience on the same technology and software they will see in their future careers.*

As the physicist Wolfgang Pauli said, that’s not even wrong. This argument didn’t make sense 15 years ago, when the differences between Windows and   Mac OS was much greater than it is today and Macs’ market share was much lower. It makes even less at a time a user proficient in one OS can master the the with maybe an hour of training.

But it is much worse if Maine thinks the reason to have computers in schools (and, yes, they really should be thinking about tablets, too) is to teach students how to use specific pieces of hardware and software. Students’ computers should be windows into a boundless sea of information. They should be tools in science class. And students should be learning the principles of programming, not so they can all grow up to be software developers but so that they learn something of what makes today;s most important technology tick–and perhaps learn a bit about the importance of the precise, logical thinking that programming demands.

Gov. LePage seem to see PCs as little more than the modern equivalent of the rows of typewriters in classrooms for vocational typing and the purpose of computers in schools as training students to get jobs typing in word or scheduling appointments in Outlook. The four-year contract is a nice win for HP, but it may be a tragedy for Maine students.

*–The HP Probook 4400s will ship with Windows 8, making LePage’s argument even more lame ,since the new OS has been largely shunned (so far) by business and is far more different from the Windows XP and Windows 7 versions used in business than is Mac OS X. But an HP spokesman notes that Maine schools have the option of downgrading to Windows 7.

Big-Box Retailers are Not Helping PC Sales

Last week, I wrote about the “softer” and arguably some of the more important PC attributes. Toward the end of that column, I threw out there a few examples of how U.S. big-box retail isn’t helping market those softer features. I want to dive a bit deeper into that this week as I think U.S. big-box retail shares a large part in the decline in PC sales and outline why I believe that. I will start with a little background.

I’ve been involved in and around electronics retailing since 1993 when I worked for AT&T Computer Systems then with Compaq in the late 90’s when they were #1 in consumer PCs. Back in those days, U.S. retail for computers looked very different than it does today, primarily a combination of big-box electronics stores, regionals, department stores, and office super stores. Manufacturer stores and online really didn’t exist. My how things have changed. E-tail is huge (Amazon), manufacturer store(s) (Apple) are lauded, only one national electronics retailer is still alive (Best Buy), mass merchants have aggressively entered the space, and clubs are as aggressive as ever. And, of course, there’s Microsoft and their stores.

What hasn’t changed in 20 years is just how poor the PC buying experience is in the big box retailers…… and that poor experience is negatively impacting sales at a time when the industry can least afford it. Big box retail does best when the category has been established and there is minimal change. In the PC world, everything is changing. Windows 8 brought a brand new UI that had not fundamentally changed since DOS. Gestures and PC display touch is new too. Let’s not forget about convertibles and hybrids, all new. How did big-box retail respond? The same way they have for the last 20 years.

Big box retailers responded by selling more end-caps to manufacturers, they added more demo days with manufacturer’s reps and did more promotions….. and it’s not working. It’s not working because fundamentally there exists a massive disconnect between what consumers want to and need to know about the latest generation of PCs. I’ll use Windows 8 notebooks and convertibles as an example and drill into that experience.

As we all know, Windows 8 brought with it a new, multi-mode UI and a new gesturing system that is used with mice, trackpads, and touch displays. Even Microsoft acknowledged recently it took a few hours for consumers to get comfortable with Metro. Windows 8 also brought instant on when paired with the right hardware. A consumer may even want to try out instant on and even compare certain notebooks. New notebooks are also bringing better battery life with thinner and lighter designs. To gauge how heavy the system is, you would want to pick it up and maybe carry it around. Maybe you would want to compare notebooks and how quickly the Ultrabook boots versus the $299 notebook.

How many times have you walked into a big-box retailer and walked down the notebook aisles and saw Windows 8 notebook PCs that:

  • Shells with no electronics inside
  • Turned off
  • Error messages on the screen
  • Not connected to the internet
  • Running a demo loop that required a retail password to interact
  • Had unsavory data visible from a prior consumer
  • Batteries removed to protect from theft
  • Tied down with security wires and could not be lifted
  • Touch display and backlit keyboards not merchandised

I am asking the question rhetorically because I know the answer. We all do. All of us have experienced this. I’ve heard all the reasons why big-box retail provides this kind of experience for the last 20 years. The reasons typically involve profit margins, security concerns, and the challenges of managing a distributed workforce, etc. Interestingly, I never see the above examples at an Apple store. Never, ever. I can sit at the Apple store there for hours and literally do a test drive like I would a car. I’ll bet Apple would let me download apps if I asked.

The unfortunate outcome is that the big-box retail experience is actually playing against increases in Windows 8 sales. The stores just do not provide, for many, the environment that meets the needs of someone trying to buy a new Windows 8 notebook. Consumers need a way to “test drive” Windows 8 and big box retail isn’t delivering. I believe one of the consumer reactions is to not buy a new Windows PC because they deem it risky. What do they buy instead? One of the consequences is that it helps nudge the consumer to buy a $199 smartphone or tablet which, when weighed against the big box retail experience, is a much lower perceived risk than buying that new PC.

The Soft Improvements in new PCs Could be their Biggest Draw

Last week was an ugly week for the computer world. The IDC figures that came out for Q1 said that it was the biggest contraction the PC market that had ever been seen since their tracking began. The best Apple could muster was a slight YOY decrease in Mac sales, which looked great compared to the rest of the industry. I spend a lot of time as an industry analyst dissecting the “why’s” and thinking about what it will take for the PC market to rebound. I talk to other analysts too, like Tech.pinion’s and Creative Strategies’ Ben Bajarin, and we’ve had some recent conversation that helped clarify the PC conundrum. I’m convinced that the “softer” improvements of new PCs could be the most important, yet under-communicated and understood reason to buy a new PC. By “softer” I mean those things that don’t have hard metrics or measurements. I want to peel back the onion a bit and let’s start with a little background.

Intel estimates that there are 500M computers actively being used that are over 4 years old. Think of just how many thick, chunky and poor experiences that equates to. If that’s your PC experience and haven’t experienced a new one, I can see why a new tablet or phone will be your next purchase. Consumers don’t really know the reality that new PCs offer a significantly improved experience and while I’ve already hit the “hard” reasons to buy a new one, I want to hit on the softer side. Let’s start with starting up a PC.

Waking an old PC from sleep or even worse hibernation is like starting an old tractor. With a Vista-based PC, it can take nearly three minutes to get it to the point you can actually do something with it. Compared to a phone or tablet this is ridiculous, which is one key reason consumers gravitate to the tablet and phone. The reality is, though, that the latest notebooks based on Intel and AMD technology wake up almost instantaneously. Intel’s Atom designs are literally instant-on like the best tablets and notebooks based on Intel’s Core and AMD’s Trinity with SSD storage isn’t too far behind. I think many consumers would be surprised just how far the PC has come.

Similar to “boot” time is the advancements in application load time with a new PC. The human brain amplifies wait time, and before smartphones and tablets, consumers settled for the lousy experience of an old PC. SSD’s and software optimizations changed the expectations when consumers used their phones and tablets. This put the burden on the PC industry to improve the experience, which it has done very well. App load time is nearly instantaneous due to advances in SSDs, software cache, and application architecture. Let’s move to physical UI.

Older PC notebooks have small track pads, typically three buttons and don’t support gestures. With this configuration, you really need an external mouse or trackpad to get anything old touchpaddone. Compared to a new PC, this is archaic, but if a consumer never experienced it, how would they know? Windows 8 PCs with high quality touchpads are a lot different. Systems like the Dell XPS 13 have a large trackpad without buttons and support all the Windows 8 gestures. We have to all thank Apple for raising the experience bar here. Touch is another great adder in new Windows PCs at prices as low as $499. How many times have you reached up from your notebook to touch the display? While Apple has ignored this so far on Macs, I believe it’s inevitable that touch display becomes the $499 PC standard in 2014.

Fan noise is another “soft” feature of new PCs that gets overlooked. I had the first MBA and it was loud as the fan seemed to always run. Today, even the thinnest Mac, Ultrabook or premium ultrathins barely make a sound. This has driven by many factors, including a lowering of the CPU TDP from 35 watts to 17 watts but more than that, a major decrease in idle power draw. There has been literally a 5X improvement in idle power draw and the result is the fan rarely kicks in. See a pattern here? Like a tablet.

Backlit keyboards are another feature that has made its way to the $499-$599 price point. The feature literally determines if we can use the notebook in the dark or low light conditions on a plane or in bed. Old PC notebooks don’t have this and new generation Windows 8 notebooks and MacBooks do. While some scoff at the importance of the feature, research I have conducted shows consumers value it and will pay dearly for it. Again, it is one of those “soft” features that can make the difference.

The final “soft” variable I want to discuss is design. Led by Apple, the entire PC industry raised their game in the last five years. Cheap looking, shiny ABS plastic has given way to magnesium, aluminum, textured plastic and rubberized surfaces on the newer class of notebooks. If you are reading this on your five year notebook, look and compare how it looks versus something you can buy today from $499-999. It’s ugly and you know it.

While these “soft” improvements in new PCs are difficult to measure, I believe they could be the strongest reasons to buy a new PC. Whether it’s improvement in looks, their silence, or the speed at which they start programs, newer notebooks are light years ahead of their predecessors. The PC industry has been spending a lot of money on this, but challenges exist. The first is legacy. Macs had such a premium perception for so long that it’s hard for consumers to accept that a Windows PC can have the feel of a tablet or smartphone. Therefore it could take a while for the new reality to sink in. Retailers are a big part of the problem, too. How many times have you walked into “big box” retail and the PCs weren’t turned on, weren’t connected to the internet, had an error message on the display or had some silly protection device that gets in the way of the trial. Net-net, the PC industry needs to shift a lot of their marketing spend to increasing awareness and motivating trial to point out the softer improvement in PC or face a very painful few years.

Apple In Perspective

Apple has been taking a real beating on Wall Street and in the press lately. But are we losing our long-term perspective by focusing so intently on quarterly results?

Stock Market

The Stock Market is a predictor of future growth, but it is hardly infallible. Seven months ago the market was predicting spectacular growth for Apple. Today it’s predicting almost no growth at all, worse than Dell and HP. Was the market wrong seven months ago or is it wrong today? Or both?

Growing Markets

Take a broader look at the computing markets. We are transitioning from notebook and desktop computers to mobile phones and tablets. No one is in a better position to benefit from this changeover than Apple. They were first-movers in both phones and tablets and they continue to devour the bulk of those sector’s profits. Apple’s path is not unimpeded, but they still have the inside track.

iPhone & iPad Sales

Last quarter, Apple sold 37.4 million iPhones for 7% growth and 19.5 million iPads for 65% growth.

Remember all that talk about suppliers cutting orders and how it meant that Apple wasn’t selling as many phones and tablets as before? Yeah, not so very much.


“iPad experienced very strong year-over-year growth in every operating segment, particularly in Greater China and Japan where sales more than doubled year over year.”

The highlights for the quarter in China were that iPads grew 138% year-on-year, and we set new records for sell-through both for iPhone and iPad during the quarter.” ~ Peter Oppenheimer

Remember all that talk about Apple not doing well in China? Yeah, not so very much.


“…the Good Technology’s data that says that iOS accounted for 77% of all their activations by their corporate customers. Now that would not include BlackBerry, but it would include all the other guys. and so we seem to be doing really well and honestly, I don’t see the recent announcements changing that at all. I’ve seen more and more people developing more and more custom apps for their businesses on iOS to be used on iPad and we’re very, very bullish on it. As a matter of fact, just to quote you some numbers, iPad now is being used in 95% of the Fortune 500 and what’s even more impressive probably is on the global 500 companies, we’re now in 89%.” ~ Peter Oppenheimer

Remember all that talk about Apple’s iPhone and iPad not doing well in business? Yeah, not so very much.

Unique Advantages

Critics dismiss Apple as un-innovative, passé and niche. But Apple retains distinctive differences that give it unique advantages in the the newly emerging mobile markets:

— App Stores in 155 countries

— iTunes in 119 countries

“Today, our iTunes store offer the broadest combination of geographic reach in content depth in the industry, and they surpassed quarterly billings of $4 billion for the first time ever in the March quarter, that’s a $16 billion annual run rate making our digital content stores the largest in the world. The quarter’s iTunes billings translated to record quarterly iTunes revenue of $2.4 billion, up 28% from the year ago March quarter with new quarterly revenue records for music, movies, and apps. ~ Peter Oppenheimer

— 300 million iCloud users

— Highest loyalty and customers satisfaction rates in the business

“A recent study by Kantar measured 95% loyalty rate among iPhone owners, substantially higher than the competition, and iPhone remains top in customer experience. Last month, we were very pleased to receive the number one ranking in smartphone customer satisfaction from J.D. Power and Associates for the ninth consecutive time.” ~ Peter Oppenheimer

“The most recent survey published by ChangeWave indicated a 96% satisfaction rate among iPad customers.” ~ Peter Oppenheimer

— Developers

…(W)ith App Stores in 155 countries that encompass almost 90% of the world’s population, our developers have created more than 850,000 iOS apps, including 350,000 apps made for iPad.”

“Cumulative app downloads have surpassed 45 billion and app developers have made over $9 billion for their sales through the App Store, including $4.5 billion in the most recent four quarters alone. Canalys estimate the sales from our App Store accounted for 74% of all app sales worldwide in the March quarter.”

“…(W)e are now paying very happily our developers more than $1 billion every quarter.” ~ Peter Oppenheimer

Revenues, Profits And Margins

Apple had $43.6 billion in revenue. What other company had comparable revenues?

Apple had $9.5 billion in profits. What other company had comparable profits?

Apple had 37.5% margins which is astonishing for a hardware company and compares quite favorably to the margins of both Google and Microsoft, which are primarily software shops.


Courtesy of Asymco

It seems that Apple compares favorably to every other company in the world other than the Apple of 12 months ago.

iPhone 4

“Now, that said, we see an enormous number of first time smartphone buyers coming to market, particularly, in certain countries around the world. And so what we’ve done with that is and we started last quarter is we’ve made the iPhone 4 even more affordable and which has made it more attractive to first time buyers and we caught up on the – our supply – demand towards the late in the quarter last quarter and we are continuing to do that in other markets. And we believe that the phone or the price point that we are offering is an incredible value for people, that allows them to get into the ecosystem with a really, really, phenomenal product.”

One thing that hasn’t been getting enough attention, or rather hasn’t been getting the right kind of attention, is the continued sales of the iPhone 4. The iPhone 4 is now over two and a half years old but it continues to sell well in developed markets like the United States and Europe and in developing markets like China, India and Brazil. How can this be? Is there any other phone manufacturer who could successfully sell a phone that is two generations and two years out of vogue?

The iPhone 4 is proof that buyers are buying Apple’s ecosystem, not just their hardware. So long as Apple maintains a lead in integrating hardware, software and services, they will maintain an edge in mobile computing.

And as an added bonus, while the iPhone 4 may be bring the iPhone’s average sale price down, the sale of this older technology should be bringing the iPhone’s margins up.

Apple’s Long-Term Outlook

“We are managing the business for the long-term and are willing to trade off short-term profit where we see long-term potential. The iPod is a great example of this. When we launched it in 2001, its margins were significantly below the margins of Apple at that time.

Four years later, the iPod and the iTunes Music Store comprised half of Apple’s revenues and inspired us to build the iPhone. The iPad mini is another great example. We have priced it aggressively and its margins are significantly below the corporate average. However, we believe deeply in the long-term potential of the tablet market and think that we’ve made a great strategic decision. We’ll only make great products and this precludes us from making cheap products that don’t deliver a great experience.”

If you look at Apple’s numbers for this quarter and the next, you might think you see a company in decline. But if you look at Apple’s numbers over the fiscal or annual year, you see anything but decline. Let’s put this in perspective: Would you rather have Apple’s profits or those of Google, Amazon, Microsoft or Samsung? Once you put it that way, the answer as to how Apple is doing becomes clear.

Apple dominates the most dominant tech sectors of our times. And unless I’m gravely mistaken, that’s a good thing. A very good thing.

Are the New Crop of Enterprise Tablets a Threat to Apple?

Over the last three years, Apple has reshaped many industries, including the smartphone, tablet, PC and even SOC industry.  One areaHP-ElitePad-900 of Apple success that was in Microsoft’s own backyard was enterprise tablets, where, according to Apple, 94 percent of the Fortune 500 is either testing or deploying iPads.  For a product that has only existed for a few years and the slow pace of enterprise change, this is no small feat.  While no competing enterprise tablets emerged over the last three years to challenge the iPad, technologies developed over the last few years by Intel could very well change the competitive dynamics.

Enterprise iPads were deployed for very similar reasons that consumers bought truckloads of iPads for themselves.  IPads were thin, light, sexy, easy to use with 10 hours of battery life.  Through the use of EAS and an MDM, iPads were “secure enough” for enterprise email.  As time rolled on, Apple added even more security features and companies like Oracle, SAP, and started to develop enterprise front-ends to their products and services.  This enabled iPads to be more than email machines, but devices where workers could quickly get access to HR and financial system data.

8024514200_050496a1feBecause iPads aren’t Windows PCs, enterprises needed to spend a lot of time and money making iPads “enterprise-compliant”.  By this, I mean IT had to buy products and services and create parallel processes to secure, provision, deploy, manage, service and support iPads.  They did this because of the benefits iPads brought and the lack of a Windows alternative.  At that point, the Windows alternative was thick, hot, and expensive with no more than 5 hours battery life.

Intel Atom Z2760, aka Clover Trail, could change this enterprise dynamic.  If you look at many of the vectors where Windows tablets had an issue, many of them are solved with Clover Trail.  With the Atom Z2760, HP, Dell, and Lenovo have just recently started shipping created tablets that are thinner, lighter, as sexy with better battery life than today’s iPad.

Here are a few snippets on the new tablets that only became available for pilot and deployment:

  • Dell Latitude 10: Dell’s tablet is made from shock-resistant magnesium alloy yet weighs in at nearly the same weight as the iPad.  The battery is user-replaceable, too, providing up to 20 hours of battery life and enabling the user to focus on the client, not searching for a plug.  The desktop dock enables users to come in from the road and dock the tablet to their giant display via HDMI, GigE LAN, and 4 USB ports for a full-size keyboard, full-size mouse and even external storage or a printer.
  • HP ElitePad 900: Made with an aluminum design, the ElitePad is thinner, lighter, more durable and serviceable than the iPad.  HP even provides enterprises with a fixture to remove and repair the display, PCB and battery.  We all know what happens to an iPad 4 when the display breaks.  Also, HP’s “jacket” system provides every imaginable port a user and enterprise would want, including an extra battery that doubles battery life to 20 hours.  Other jackets are available, including rugged designed and one with a keyboard.
  • Lenovo ThinkPad Tablet 2: Almost a full 100g lighter than the iPad, the ThinkPad is made of plastic design and comes standard with ports that typically only come standard with a PC, like USB, HDMI and SD.  Lenovo also provides an optional desktop dock and keyboard.

Windows 7 is still the enterprise desktop standard and Windows 8, with its issues, is actually viewed by the enterprise as a simpler choice.  You see, while enterprise isn’t enamored with Windows 8, it’s a lot easier to secure, provision, deploy, manage, service and support a Windows 8 tablet than it is an iPad.  This is because it is a PC and can use the same tools and process they do on their 100s of thousands of PCs.  These new tablets can also run legacy desktop apps, too, which means as productivity devices, they can access more of the company’s systems and data without any changes to the older apps.  Finally, the tablets are compatible with the 100s of thousands of USB peripherals, the ones important to enterprises like corporate standard receipt printers, laser printers, full-sized keyboards and mice.

Net-net, these new Windows tablets offer support or the tools enterprise IT already know and have paid for and eliminated the downsides of the previous 22 years of Windows tablets.  The large enterprise CIOs I have talked to really like this combination, too.  Because these new tablets only now became available for pilots and deployments, it will take a while for them to start driving mass volume, so the iPad impact will be minimal at first.

Just as it took Samsung and Google years to get their act together in smartphones and consumer tablets, HP, Dell and Lenovo are now ready to lean into enterprise tablets and have the potential to start chewing aggressively into enterprise iPads.  Apple finally has real tablet competition in the enterprise and will need to amp up their game to maintain their position.

If you would like to learn more about this, I have published a detailed white paper here.

Will Gen 3 Chromebooks Finally Hit the Mark?

Now on their third generation, Chromebooks have taken a deserved perceptual and business beating samsungover the last few years. Generation one and two were flawed in many basic ways, with high prices, sluggish performance, and lack of robust off-line capabilities. This makes Lenovo’s and HP’s latest entry into the category all that puzzling. Is their entry into the market an indication that the third generation of Chromebooks will be a success?

When Google introduced the Cr-48 Chromebook prototype in late 2010, hopes were high that the industry would see a viable alternative to the PC notebook. In 2010, most notebooks sold were thick, heavy, with around three hours battery life, and were sold between $499 and 599. The Cr-48 prototype got 9 hours battery life, weighed 3.8 lbs, was less than an inch thick, and came with integrated 3G. Chromebooks promised an inexpensive, enjoyable and simple, connected experience with very fast start times. That’s not exactly what was delivered.

What was delivered was way short of delivering on the value proposition. Prices were as high as a PC at $499, performance was sluggish, had limited storage, limited battery life, and didn’t operate well or at all offline. As expected, the first two generations were only embraced by Samsung and Acer, and only a few consumers actually bought them.

The third generation Chromebook experience is a positive step forward. Compared to the promise, here is how it stacks up.

  • Instant on: almost immediate
  • Google offline capabilities: Drive, Mail, Calendar, Docs, and Slides
  • Prices: between $429 and $199
  • Battery life: between 4 and 6.5 hours
  • Storage: 16GB SSD to 320GB HDD
  • Weight: as low as 2.5 pounds
  • Thickness: as low as .8 inches high

The “feel” is hard to characterize, but generally, with simple apps like Docs in one windows, the experience felt very snappy. Get on a complex web site with lots of J-script, videos and ads, and the experience starts to get very sluggish. It gets even worse as more tabs are added to the experience. Oddly, SD videos purchased off Google Play were very choppy on the Samsung Series 3 but HD YouTube videos were fine. Keyboards have remained solid and some models have even added the caps lock key. I wish there were a delete key, though. With 95% of the world on Windows PC’s this make a lot of sense.

Will all these improvements turn the tides for the Chromebook? No.

The challenge for Chromebooks as a category is that as they are improving their value prop, so are tablets and PCs and the “feel” is compared to a phone. The biggest of these issues is that PCs are improving.

For nearly the same price, consumers can buy a Windows 8 PC that’s nearly as thin, with mores storage, and similar battery life that can run millions of apps. No, you don’t get the crapware or malware, but consumers don’t think like that. Tablets are an issue, too. If a Chromebook cannot replace the PC then it is an add-on to the experience, which then becomes a question of tablet versus Chromebook. Chromebooks are too much like a PC form factor and consumers will choose the tablet.

Chromebooks have improved their value proposition over the three generations but it won’t be enough to significantly provide the boost that it needs to become a credible category. Chromebooks need to make a much more significant jump in utility or a lower price to do that. By adding better performing processors and graphics combined with more offline capability, it could do that, but that’s for the future.