Featured Tech.pinions – Page 54

The 30 Percent Solution

Blogs are unforgiving. The entire world can see that I expected the highlight of Apple’s iPhone 5 introduction last week to be a kumbaya love fest between Apple and Facebook. Facebook is number one in mobile social media apps. Apple is number one in smartphones and tablets. Yet even after 18 months, there was no official Facebook app for the iPad.

So, other than the fact that there was no iPhone 5, and that no one at the Apple event even mentioned Facebook, let alone invited Mark Zuckerberg up on stage, my blog post was … well, pretty much in English.

But today, Facebook finally announced its Facebook app for iPhone and iPad.

According to the blogosphere, the hangup was caused by “negotiations” over who would be allowed to make money from apps sold by developers through the Facebook platform on the iPad. (You know, the developers who sell apps like Angry Birds, Hipstamatic, FarmVille, weather, etc.)

Apple’s standard deal is: We take 30 percent, bitch.

Thirty percent on all paid apps, on all in-app purchases, and on subscriptions.

(Google has a variant on this revenue model for its own developer ecosystem: We take 30 percent but we’re not evil, bitch.)

Facebook sees that Apple and Google are rolling in clover, so it tells Apple it wants to create a separate revenue platform for mobile apps called Facebook Credits, and it wants to build it into Facebook apps that run on the iPhone and the iPad, which would bypass the Apple 30 Percent Bitch system and send that money directly to Facebook. Negotiations must have gone something like this:

Apple: ”You know what we think of Facebook? We own the operating system and you don’t, and just to make that point absolutely clear we’re choosing Twitter over Facebook as the social layer of the iOS 5 operating system. We have more than 200 million registered users on the iTunes store and we have their credit card numbers, and we make buying apps completely smooth and painless and frictionless, and Facebook doesn’t.”

Facebook: “Oh yeah? Well, in that case, we’ll develop our app for HP’s new TouchPad. How do you like them apples?”

Apple: [30-day pause] “And how did that work out for you?”

Facebook: “Never mind. But we still have the most popular social platform in the universe, with 750 million users, and the only third-party Facebook apps you’ve got now on the iPhone and iPad basically suck. Even so, more than 250 million people use Facebook on a mobile device today.”

apple-ping — Someday I'll be remembered for this.

Apple: “True, but don’t forget, we have ‘Ping.’”

So it appears they have reached a compromise: Apple gets 30 percent, bitch, on all Facebook for iPhone and Facebook for iPad apps developed for the iOS operating system. Developers who want to create apps for Facebook on the Web, in HTML5, must use Facebook’s virtual currency, Credits.

Folks, what we have here are the latest salvos of a global war to create a new type of currency for online transactions, one that will rival cash and credit cards. Microsoft wants to be a player. PayPal (a division of eBay) wants to be a player. All of the mobile phone companies want to be players. When I walk down University Avenue in Palo Alto to get a cup of coffee, I pass what seems like 50 online payment startups that want to be players. The market for mobile apps and virtual goods sold through social networks and app stores is huge, and hundreds of millions of people are already opening their virtual wallets.

The Apple-Google-Facebook mobile app revenue models appears to be evolving along the Mastercard, Visa, American Express models. Developers who want to sell apps or virtual goods online can choose to whom they want to pay, except that the bites are larger by an order of magnitude. Apple wants 30 percent, Google wants 30 percent, and now Facebook wants 30 percent.

Aside: Will you trust Facebook Credits as your medium for buying things online? Google Wallet? A couple of months ago the marketing and advertising firm Ogilvy & Mather commissioned a survey on which brands consumers would trust with their money. It looked like this:

Anyway, I’m so glad that Apple and Facebook have decided, at last, to “friend” one another. I wonder how long they’ll stay friends?

I think this is going to be a very interesting battleground. But hey, I’ve been wrong before.

Nuance Exec on iPhone 4S, Siri, and the Future of Speech

Though the iPhone 4S appears nearly identical to the current iPhone 4, it is, as my colleague Tim Bajarin points out a revolutionary device because of its voice-based Siri interface. For the past 20 years, we humans have learned to point and click, but this has never been a natural way to interact with our environment. Touch and speech, on the other hand, have been around since we were living in caves.

Photo of Vald Sejnoha — Nuance CTO Vlad Sejnoha

“Speech is no longer an add-on,” says Vladimir Sejnoha, chief technical officer of Nuance, probably the world’s leading speech technology company. “It is a fundamental building block when designing the next generation of user interfaces.”

Sejnoha is faithful to the code of omerta that Apple imposes on its vendors. Although Nuance has supplied technology both to Apple and to Siri before its 2010 acquisition by Apple, he declined to discuss Nuance’s role in the iPhone 4S: “We have a great relationship with Apple. We license technology to them for a number of products. I am not able to go into greater detail. But we are very excited by what they have done. It’s a huge validation of the maturity of the speech market.”

But Sejnoha made no effort to hide his enthusiasm for the Siri approach. “It allows you to find functionality or content that is not even visible,” he says. “It provides a new dimension to smartphone interfaces, which have been sophisticated but shrunken-down desktop metaphors.”

It’s has been a long, hard slog for speech to become a core user interface technology. It took a good thirty years, from the late 60s to the late 90s for speech recognition—the ability to turn spoken words into text—to become practical. “Speech recognition is not completely solved,” says Sejnoha. “We have made great strides over the generations and the environment has changed in our favor. We now have connected systems that can send data through the clouds and update the speech models on devices.”

Recognition alone is a necessary but hardly sufficient tool for building a speech interface. For years, speech input systems have let users do little—sometimes nothing—more than speak menu commands. This made speech very useful in situations were hands-free operation was desirable or necessary, but left speech as a poor second choice where point-and-click or touch controls were available.

The big change embodied by Siri is the marriage of speech recognition with advanced natural language processing. The artificial intelligence, which required both advances in the underlying algorithms and leaps in processing power both on mobile devices and the servers that share the workload, allows software to understand not just words but the intentions behind them. “Set up an appointment with Scott Forstall for 3 pm next Wednesday” requires a program to integrate calendar, contact list, and email apps, create and send and invitation, and come back with an appropriate spoken response.

Sejnoha sees Siri in the iPhone as just a beginning. “Lots of handset OEMs are working on it,” he says. “There is a deep need for differentiation in Andoid and Apple will only light a fire under that. Our model is to work closely with customers and build unique systems tailored to their visions.” And while a speech interface can drive search, it can also become an alternative to it: “One consequence of using natural language in the user interface is direct access to information. We can figure out what you are looking for and take you directly there. You don’t always have to go through a traditional search portal. It will change some business models.”

Nor do the opportunities stop at handsets. “Speech is a big theme for in-car apps because that is a hands busy, eyes busy environment,” Sejnoha says. “All the automotive OEMs are working on next-generation connected systems. The industry is undergoing revolutionary change.”

The health care market is another hot spot. “Natural language is taking center stage in health care,” Sejnoha says. “We are mining data and using the results to populate electronic health records.” Nuance recently signed a deal with IBM to provide technology for a speech front-end to the health care implementation of its Watson question-answering system.

The key to the next breakthroughs in speech technology, Sejnoha says, is making effective use of the vast amount of speech data that now exists, a challenge that has also attracted Nuance competitors Google and Microsoft. “Most algorithms use machine learning and are very data-hungry,” he says. “No one knows yet what to do with tens of thousands of hours of speech data. The race to do that is one. We are doing fundamental research and have a relationship with IBM Research as well. It requires a broad array of techniques to model speech in a robust way and to learn the long tail statistically and the build techniques that can benefit from large amounts of data. It’s a very exciting time.”

Why We Witnessed History at the iPhone 4S Launch

While some people were disappointed that Apple did not introduce the iPhone 5, most pretty much missed the significance of the event and the fact that they were witnessing history.

In 1984, when Steve Jobs introduced the Mac, he did something quite historic. He introduced the Mac’s graphical user interface. But he actually topped himself with the introduction of another technology-the mouse. In essence, he introduced the next user input device that has been at the heart of personal computing for nearly two decades.

What’s interesting about this is that he did not invent the GUI. That came from Xerox Parc. And he did not invent the mouse. Douglas Engelbart invented the mouse. But by marrying them to his OS he reinvented the GUI and OS and gave us a completely new way to deliver the man-machine interface through the mouse. Until that time all computer input was done by textual typing.

Then, in 2007, with the introduction of the iPhone, Jobs and team did it again. He created the touch user interface and this time married it to his iOS. He did not invent touch computing. That technology has been around for 20 years via pen input or minimally within desktop touch UI’s such as those used in HP’s Touchsmart desktops. But he integrated it within iOS and gave the world a completely new way to interact with small, handheld computers. With the new touch gestures part of their laptop trackpad designs, they have even extended it to their core Mac portable computing platform as well. In essence, Jobs second UI act was to bring touch UI’s to mainstream computing.

Now, with the introduction of SIRI, integrated into iOS and a core part of the new iPhone OS, he and the Apple team have given to the world what we will look back on and realize is the next major user input technology-Voice and Speech. As reader Hari Seldon points out, the real breakthrough we will come to realize is in Siri’s “applied artificial intelligence.” It is its speech comprehension that will be its greatest advancement.

Again, he did not invent this technology. But Apple’s genius is to keep trying to make the man-machine interface easier to use and with each form, be it the mouse, touch, or voice, Apple has been the main company to popularize these new inputs and thus help advance the overall way man communicates with machines.

I have personally witnessed all three of these historical technology introductions. When the Mac was introduced in 1984, I was sitting third row center at the Foothill Community College’s auditorium. Then in 2007, I was at Moscone West, fourth row Center when Jobs and team introduced the iPhone with its touch UI. And most recently, I was at their campus auditorium, Building 4 of Infinite Loop, 5th row center, when Tim Cook and his team introduced the iPhone 4S and the new Siri Voice and Speech interface, making this their third major contribution to the advancements of computer input. (I make a habit of remembering exactly where I am when I watch history being made.)

Now here is another interesting point. Although Apple has had this touch UI in place and integrated in to iOS since 2007 and the Mac OS X since last year, only now is the Windows world starting to get serious about integrating touch into their phone and computer operating systems. Although Apple will continue to advance their various touch UI’s, they can rightfully say-been, there, done, that.

It is time to take it up a notch and for them their next user input mountain to scale will be the use of voice and speech as part of their future man-machine interface. It may start with iOS but like touch, I expect this UI to be in the Mac in short time as well.

Yes folks, for those of us at the iPhone 4S launch we witnessed history being made. Unfortunately, for a lot of people in at that event, they missed it.

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Applesauce

The Wall Street Journal: “More fizzle than pop.”

The Los Angeles Times: “An evolution, not a revolution.”

The Washington Post: “It wasn’t exactly blowing my mind.”

FoxNews.com: “Lunch-bag letdown.”

Business Insider: “A huge disappointment, or just a regular sized disappointment?”

Analyst Roger Kay: “Underwhelming.”

People, please. There’s nothing wrong with evolution. Without evolution, we would still be apes. (Insert your own snide comment here.) Apple obviously thinks the new iPhone 4S is evolutionary. Otherwise Apple would have given it a new name, like, say, Shebang, or Razzmatazz, or maybe even Five.

2012-Lotus-Elise-S-Front-View_b-566x381 — Lotus

But Apple’s new iPhone 4S is the same old iPhone 4 in the same way that a new Tesla Roadster is the same old Lotus Elise. Physically, they’re both sleek and sexy. Under the hood, though, the new model is revolutionary.

Not because of the dual-core processor. Other smartphones already have dual-core chips. Dual-band world phone? Faster upload and download speeds? Fancy camera and high-def video? Others have been there, done that.

No, the iPhone 4S is revolutionary because of Apple’s software, specifically iOS 5, iCloud, and Siri.

Disclaimer: I have not reviewed the iPhone 4S and have no idea if it works as advertised beyond the boundaries of Building 4 on Apple’s Cupertino campus. Apple stresses that the Siri personal assistant software is still in beta mode, even now, a week before the iPhone 4S goes on sale. But if the software does work in the real world, it’s a change as profound as replacing gasoline with electricity.

What is the future of the personal computer interface? Voice and gestures, not keyboards and mice.

Apple patented the capacitive multi-touch interface it introduced with the original iPhone. It included a gyroscope in the iPhone 4, transforming gameplay but also opening the way for new gesture controls. And now, with Siri (and backed by the new A5 and digital signal processors), Apple has added natural language voice control to the computer in your pocket.

Remember the scene in one of the Star Trek movies where a bemused Scotty tries to control a 20^th century computer by talking into a mouse? Seriously, does anyone doubt that our grandchildren will operate computers by voice?

Yes, Android phones introduced voice commands a while back. But from the day when Steve Jobs first walked through Xerox’s Palo Alto Research Center (PARC), Apple’s true genius has been to seize nascent technologies and make them so simple and elegant that they catch fire. Did Apple invent the MP3 player? No. Did Apple invent the mobile phone? No. Did it invent the portable game system? Negative. Did it invent the tablet computer? Nope. The music store? Uh-uh.

So, what are the best-selling MP3 players and game players and mobile phones and tablets and music stores in the world today? (SPOILER ALERT: iPod, iPod Touch, iPhone, iPad, iTunes Store.)

Did Apple invent the television? Wait, that’s likely to be the subject of a future column.

In my view, we’ve just seen a revolutionary shift from mobile phones to mobile personal assistants.

What’s on my calendar today? What’s the weather? What’s traffic like? How many calories in this bagel? Remind me to stop to buy coffee on the way home. Read me my mail. Send a message to Ben and Tim telling them I’ll be late to the office. Play this morning’s National Public Radio podcast. What’s the stock market doing now? Call my wife. Let me know when Steve gets to the office. Schedule a lunch with Dave and Kelley for tomorrow. When is Laura’s birthday?

The Siri software “understands” conversational language. It “understands” context. I am unaware of any other voice command system on any other smartphone that reaches this level of competence.

Add this to the intelligent ecosystem of iOS 5 and iCloud – comprising hundreds of new features, all of which make their debuts with the iPhone 4S – and it’s difficult to understand the griping and grousing that followed Apple’s announcement yesterday.

Was it also disappointing that Apple dropped the price of the original 8GB iPhone 4 to $99 (with the usual two-year mobile carrier contract)? Or that it dropped the price of the iPhone 3GS to free? Or that it priced the iPhone 4S at $199 and up? Those were evolutionary changes, too, but if I am Nokia, and my cheapest dumb phone is now the same price as Apple cheapest smartphone, my business plan just got sent back to the drawing board. Ditto Google-Motorola, now that the price bar for state-of-the-art smartphones has been set at $199.

The iPhone 4S is still the thinnest and snazziest smartphone in the world. Okay, so it doesn’t have a four-inch screen, and it’s not shaped like a tear-drop. (Darn, I was hoping I’d have to go buy all-new iPhone accessories.) It does not have built-in near-field radio communications, which prevents me from using it to pay my toll when I board the subway in Seoul, since that’s about the only place I’ve seen that accepts NFC payments. Has anyone seen NFC payment terminals here in the States?

And speaking of NFC, is your mobile phone carrier so trustworthy and transparent that you would trust it handling your daily purchases? Would you trust AT&T as your bank?

Which leaves me to conclude that the biggest cause for pundit, analyst and fanboy disappointment with the new phone is that your friends and co-workers won’t be able to tell that you have the new iPhone 4S just by looking at it, obviating its value as a status symbol. Here’s an idea for a cheap upgrade: Paint a big number “5” on your iPhone case, and they’ll never know the difference.

Dear Industry: We Owe Steve Jobs a Standing Ovation

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

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

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

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

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

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

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

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

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

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

jonathanmak — Image Credit: Jonathan Mak

My Thoughts on the Passing of Steve Jobs

I have been asked by many in the media for my thoughts on Steve Jobs. I felt that I needed to write them out so that I could be succinct at this time. Please feel free to use them as quotes directly from me.

Steve Jobs will always be remembered as a pioneer and tech icon. While he will always be known for the great products he created, perhaps his greatest contribution was the creation of a new Apple that is one of the most valued companies on the planet.

Many tech executives would be thrilled if they had one major hit in their lives. Steve gave us the Apple II, The Mac, the iPod, the iPhone, the iPad and Pixar.

In a sense, Steve Jobs was part Thomas Edison, Walt Disney and P.T. Barnum. A modern technology visionary, focused in delivering products that are useful and provide entertainment and a masterful showman who really knew how to keep people on the edge of their seats wanting more.

His impact on the world of technology and American business can not be underestimated. His simple vision of creating products that he would want – ones that were elegant and easy to use, is what drove him and Apple to spectular success.

Under his leadership, Apple has become one the most recognized brands in the world. He created products that people line up for around the world.

Over 30 years of covering Steve Jobs as an analyst, I saw him at his highs and lows. But even in his lows he never took his eye off of the vision of creating products that were stylish and simple to use.

When he came back to Apple in 1997, I met with him on his second day on the job. At the time, Apple was $1 billion in the red and in serious trouble. So I asked him how he planned to save Apple. He said he would go back and meet the need of their core customers and then he said something that at the time puzzled me. He said he would pay close attention to industrial design when creating products. Not long after that he gave us the candy colored Macs that broke the mold of what a PC should look like. And as they say, the rest is history. From that point on, all of Apple’s products have bore the imprint of his eye for style and ease of use.

I am confident that Apple can move forward under Tim Cook and his executive team and that Apple will continue to be one of the most important technology companies in the world. Tim and his team fully understand Steve’s vision for Apple and will carry it forward and continue his legacy of creating products that will be elegantly designed, easy to use and that people will want as part of their digital lifestyles.

He was one of a kind and I doubt I will ever see anyone like him in my lifetime again.

Our thoughts and prayers go out to his family and close friends. So many of us in this industry owe much of our careers to Steve Jobs. He will truly be missed.

Why Apple Didn’t Release the iPhone 5

I have been fascinated by the various comments from people, Wall Street analysts included, that were disappointed with the new iPhone 4S. These folks have been having dreams of delusion trying to coax Apple to make each new iPhone conform to their imaginations. When I polled a few of them to see what they expected, they mostly tripped over themselves trying to explain their vision for a new iPhone. Common points were things like it should have been thinner, lighter, with a tapered designed to make it sleek and more unique.

I am pretty sure these folks who want this design don’t live in the world of engineering, manufacturing or even have a working understanding of physics. If you look at the iPhone 4 from an engineering stand point, it is already packed with more chips, batteries, antennas, radios, etc in order to give it the kind of features and functions it has today.

Now imagine that Apple decides that these folks are right. They make it slimmer, lighter and taper it at the bottom. That means they must use a smaller battery thus impacting total battery life. And it means they have to put in sub par or smaller antennas and chips on a smaller die, thus less functionality. And they would possibly have to change the kinds of radios they use to fit them in this new design, also affecting the quality of wireless voice and data signals.

Now, if I am a consumer and have the option of having a slimmer, sleeker iPhone but with less battery life, less power and less functionality, versus having Apple give me a similar physical design but with a CPU that is 50% faster than the one in the iPhone 4, a graphics chip with 7X the power of the one in the last phone, and better antenna and radios so that my voice and data connections are solid, the same size battery that is now tweaked with new software to give them even more talk time, music listening time, etc, which iPhone do you think they will choose?

While this is a key reason for Apple to stay with the “if it ain’t broke, don’t fixit” strategy for the iPhone 4S, there is another even more practical reason for staying with this design.

You may have noticed reports over the last two weeks from the channel that Apple was selling all of the iPhone 4’s they can make even though people were fully aware that a new iPhone would be coming out this fall. And we know that Apple can’t make these fast enough to even meet current market demand.

One thing it appears Apple concluded was that, after 16 months of making the iPhone 4, they actually do have the manufacturing of this phone down and in fact, are starting to ramp up even more production lines to meet demand. With this in mind, it made perfect sense to re-design it from the inside out, and still keep all of the manufacturing tooling and processes in place so that they could also make the new iPhone 4S in the kind of volume needed to meet market demands.

The manufacturing experts I know tell me that had Apple actually done a radical new design for this phone, they would have had to retool a lot of the production lines and that this would have been very disruptive, in a negative way. What people don’t realize is that this phone is not that easy to manufacture and Apple, in some cases, has to actually invent the manufacturing tools and machines just to make them in the first place.

Now, this does not mean that they could not have a new or even a radically designed iPhone in the future. But the process to ramp up a completely new manufacturing system takes time and is very difficult to do even on an annual basis. So while they are maximizing the current manufacturing lines for all the iPhone 4’s current physical designs, I am certain they are working behind the scenes to create perhaps a new form factor that can still have this level of functionality and designing the manufacturing procedures and machinery even now for when they will need it in the future. I suspect the next iPhone will be specifically designed to support LTE, a technology that is not ready for primetime because of modest US coverage but by late next year should be available in about 85% of the US.

I am also certain that once consumers really understand that this is a completely new phone even though it is in the same design package, they will flock to it in huge numbers. And Apple will not skip a beat.

But when people want to project their visions and ideas on Apple and hope that Apple responds to them, they need to look at the practical side of creating something as sophisticated as the iPhone. And in the end they need to realize that Apple actually does know what they are doing when it comes to designing the best and most powerful smart phone they can make and delivering something that customers really want and need in an iPhone, instead of delivering the design pipe dreams of over active imaginations.

Siri Could Be Reason Enough to Buy the iPhone 4S

Folks who found Apple’s iPhone announcement disappointing, and there were plenty of them, weren’t really paying attention. My colleagues Tim Bajarin and Ben Bajarin have outlined the reasons consumers should be excited about the new phone, despite the fact that it looks identical to its predecessor. I’m going to focus on just one of them, the Siri personal assistant.

It’s a huge mistake to regard Siri as a speech recognition component. Speech recognition has become highly developed, but by itself, it doesn’t do very much. Anyone who has used voice control on an Android phone knows it is very good at letting you dictate messages, but not much else.

Siri cracks a much tougher nut. For it to work, the software, which runs partly on the iPhone 4s and partly on Apple’s servers, must understand not just your words but your meaning. If you ask “should I wear a raincoat today?” and Siri responds with a weather forecast, were are looking at very significant advance in machine intelligence.

At this point, a couple of very important caveats are in order. Siri looked spectacular in Apple marketing chief Phil Schiller’s demo. But it was a demo, and the people who create demos carefully limit their choices to commands and functions that they are confident will work. Apple didn’t give attendees at the announcement any hands-on time with the phone. So until users have a chance to try out Siri in the wild, we’ll have to reserve judgment on how good it really is. In a move that seems more Googley than Apple-like, Siri is being released with the iPhone 4 on Oct. 14, but it is officially designated as a beta product, perhaps in and effort to temper expectations.

A second question is just how good it has to be for people to find it useful. If it doesn’t truly make the iPhone easier to use, people will abandon it quickly. But if it works anywhere near as well as it did in the demo, I suspect it will revolutionized the way we interact with devices.

While science fiction computers has been able to carry on intelligent conversations for decades, it has taken real world computers about that long just to learn to recognize words reliably. Speech recognition, which companies such as IBM and AT&T began working on seriously in the 1960s, was based primarily on signal processing and statistical analysis. Natural language understanding seemed hopelessly beyond reach, whether the input was spoken or typed.

Siri was developed by a company of the same name that was acquired by Apple. The original research was funded by the Defense Advanced Projects Research Agency, but Apple may have thrown more engineering and computer science muscle into the project than even the Pentagon can afford these days. But it also had to wait foir a dramatic increase in the processing power of mobile devices—one reason that Siri will not be available with iOS 5 on older phones–and more seamless communications that allow the work to be split between the phone and the server.

As smart as smartphones have become, simple tasks can require annoyingly many steps. Setting up a meeting requires checking a calendar for the proposed time, finding attendees in a contact list, and sending out invitations. If all that can be replaced by pushing a button and saying, “Set up a meeting with Tim Cook for 10 am on Friday,” ease of use will have taken a great leap forward.

One secret to any successful attempt at natural language understanding is restricting the range of commands, known as the domain, that it must make sense of. If you tell Siri, “Write Mr. Smith a script for simvastatin,” your iPhone will probably stare at you blankly (unless, of course, someone uses the Siri application programming interface to create a prescription-writing program.) The range of things you can reasonably ask a smartphone to do is still pretty limited.

The critical question is how much of that repertoire of requests Siri will handle well. If it is a reasonable fraction, Siri alone will provide ample reason for the iPhone 4’s success.

Consumers Will Be Delighted With the iPhone 4S

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

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

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

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

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

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

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

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

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

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

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Five Reasons to Upgrade to the iPhone 4S

While design enthusiasts may have wanted a smaller, lighter and even thinner iPhone, the fact remains that the current iPhone 4 design is about as thin as you can get a smart phone and still pack it with all of the additional new features that will make it the most powerful and best-selling smart phone on the market.

What disappointed people may have in the fact that it is identical in design to the last model, is made up by the high-powered A5 chip that delivers 50% more processing power, and a new dual core graphics chip that is 7X faster than the one in iPhone 4. It has a the new signal processor that makes it possible to deliver Siri’s voice command driven personal assistant, the new 8 megapixel camera with enhanced image sensor, the new video processor that delivers stunning video and the dual antenna system that makes calls and wireless sensitivity better than ever.

From an engineering standpoint, this is the most powerful iPhone Apple has ever made and should help them deliver their first 25-27+ million iPhone quarter this holiday season. With the 3GS being free with contract, this phone could finally attract the laggards who hesitated buying an iPhone because of cost. And the iPhone 4 starting at $99, with its dual cameras and capability to do Facetime, will also be in high demand. However, there are millions of users with 3GS contracts that are out of subscription hell and will gladly make the jump to this new phone in huge numbers. And many iPhone 4 users are close to being out of their contract and many of these folks will also upgrade as soon as they can.

From a consumer standpoint, there are five major reasons why a person should upgrade.

The first is the new 8-megapixel camera sensor at 3264 X 2448 which is 60% more pixels than in iPhone 4 that Apple has in the iPhone 4. This includes a new powerful image sensor and will become the gold standard for digital cameras in smart phones. The images are just stunning. They are 30% sharper.

The second reason is the new video sensor that delivers the best video recording on a smart phone available. The demo they showed of a video taken and actually edited on the iPhone 4 S has to be seen to be believed. It now shoots at 1080P. A user would likely now be more than happy to just use their smart phone to take all of their pictures and videos as the quality of this is beyond what most point and shoot cameras deliver.

The third reason to upgrade is for the SIRI voice assistant. This introduces a whole new way to interact with your iPhone. You can ask it things like, what is today’s weather and get an exact answer instantly via voice. Or you can say, set my alarm for 6:00 AM and it does that automatically for you. Or you can ask, what time is it in Paris, France and it reads out that time to you on demand. It can answer hundreds of questions and enact immediate commands to the phone as part of its design.

What’s more if you are driving and hear a message alert, you can just ask it to read the message to you. Or you can just speak it your message and who to send it to and it does that as well. It can also do dictation in messages, email, and in any app that uses a keyboard. Most importantly SIRI and its voice system only works on an iPhone 4S because of its use of this special signal processor that Apple has on this new iPhone.

And the fourth reason is because of the new antennas. Apple has employed a breakthrough in the way antennas work by making them handle incoming and outgoing calls and data signals differently. This enhances quality of service and it goes a long way to delivering a better voice and data experience. Along with their CPU boost and speed gains from the Antenna that let the iPhone 4S operate at 4G speeds even though it is still a 3G phone, should get it a lot of street cred with users.

And the fifth reason to upgrade is because it is a world phone. That means it can handle CDMA and GSM and can switch between networks when traveling in every country around the world. This is great for anyone that has to travel the world for work or pleasure.

Another hot feature for all IOS users will be the new iMessage system that provides free messaging to any IOS device, which now includes all iPod Touches with the new IOS 5 software.

Of course, iCloud and its amazing synchronization engine will be a godsend to those who want to keep all of their music, video and docs always in sync and up-to-date. In fact, I consider iCloud a most important Apple product and one that will actually help define what the cloud is for consumers and force all competitors to follow suit.

Lastly of course, iOS 5 with 200 new features, will deliver much more power and capabilities to all iPhone and iPod Touch users and make them even more indispensable than before.

iOS 5 and iCloud will both be release on Oct 12th.

The new iPhone 4S will ship on Oct 14th.
The 16 gig is $199. The 32 Gig is $299 and a new 64 Gig is available for $399 with contract.

In the US the iPhone 4S will be available on AT&T, Verizon and Sprint. By the end of the year worldwide it will be available in over 70 countries.

2 Things I Want in the iPhone 5

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

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

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

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

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

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

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

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

Most consumers do not shop on specs.

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

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

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

The New Kindles=Razor and Razor Blades with eBook Readers

The new Kindles, with prices at $79 and $99 finally introduces the concept of the razor and razor blade business model to eBooks. We are all familiar with the idea of razor companies creating very cheap razors and then getting people to come back and buy a never-ending supply of razor blades to use for shaving.

We in the tech world already have a product that fits a similar model with printers and the continual need for ink. Printer makers make next to nothing with the printer hardware and make all of the money on the ink.

Now Amazon is blazing new trails with their two new eBook readers at price points that are almost give away the hardware. This is quite an interesting turn of events in the eBook reader market. When the Kindle first came out it was $399. The only people who bought it at that price were what we call early adopters. However, they became hooked on this eReader and once the first Kindle established that this product category was not a fluke, the competitive market kicked in. Within two years of the Kindle’s release, the competitors undercut the Kindle’s price by as much as $200.

But as more and more people bought the Kindle, Amazon was able to get better deals from suppliers and their costs came down as well. Last year they lowered the Kindle’s price, with ads to as low as $129. But with the new Kindles they break the magical $100 dollar price barrier and in turn have basically introduced to the market the eBook equivalent of the razor and razor blade business model for electronic publishing.

This is especially important since they have over 1 million commercially published books for purchase as well as hundreds of thousands of free books to add to their overall eBook distribution. What this does is virtually assures that Amazon maintains its lead as the world’s top eBook publisher.

This move should not be too much of a surprise though. The basic law of manufacturing is that the more you make, the lower the prices of the product. Once Amazon was building a million units at a time, they started getting preferential pricing on every component. Over the life of the Kindle Amazon has sold millions of these devices thus making it possible to finally break the $99 dollar barrier.

Although some smaller brands had already broken $99 dollars, it is Amazon’s move now that changes the game completely. The end result is that the market will move even faster from physical books to electronic books, magazines, newspapers and more. Many more people will, at this price, be enticed to jump on the eBook bandwagon and you can bet that both of these models will be hot sellers for the holiday.

But the fact that Amazon is driving this razor/razor blade model into ePublishing is very important. It will set the tone and define the role of standalone eBooks and push the concept of ePublishing into the mainstream even faster than many of us had expected.

It is a very good move for their business and it solidifies Jeff Bezos’s overall goal to become the worlds #1 eBook publisher and it will more than jumpstart the next generation of electronic publishing by making book reader affordable to all.

Why China is Apple’s Land of Golden Opportunity

Last fall, when I was in Beijing, I noticed that Apple’s iPhones seemed to be just about everywhere I turned. I was on the campus of one of the major universities and an abundance of students there had an iPhone. While Apple’s iPad was still relatively new to the Chinese market, I saw a lot of these also floating around the campus and in the hands of quite a few students.

This week I headed back to China via Hong Kong and got to see the new Apple store that was opened just a week ago. It is 15,000 square feet, two stories and laid out pretty much like any of the other big Apple store in big markets today. In this case, it is right in the heart of Hong Kong’s Central district and connected to the International Finance Centre Mall. If you come over on the Star Ferry from the Kowloon side, it deposits you on the Hong Kong side just about at the foot of Apple’s new store. To say that this store is centrally located would be an understatement.

I am told it is just the first of at least two big Apple stores to be in Hong Kong. The second one will be in Causeway Bay and will open later next year. A week earlier, Apple opened their largest store in Shanghai which can handle 40,000 a day and along with another one in Shanghai near the telecom tower and the ones in Beijing. It is pretty clear that Apple sees China as a very large market opportunity for them.

Apple is taking advantage of the new emerging middle class in China, which over here is known as the consumer class. This is made up mostly of young people who work in factories or are two income families who have moved to these bustling cities and they like to flaunt their new-found wealth. For them brand is key as they are very status conscience. In China, any Apple product fits into that definition of status perhaps even more so than in America. I am told that if you have an iPhone or iPad, you are looked up to and envied.

I spoke with a professor in HK and he told me that nearly every young girl he knows has an iPhone. They make about $300 USD a month but they still have an iPhone. What’s more is that the iPhone in China is not cheap. They start at around $750. To them however them it is a status symbol. For those of us who travel to Asia a lot, especially Japan, we already know how status crazy some Asian youth can be. For example, when Michael Jordan goes to Japan, he is always mobbed and people want his shoes and anything with his brand on it.

But these Asian kids are not only status conscience. They are also gadget freaks who love their tech toys. So they gobble up iPhones, iPads and iPods in very large numbers. There are rumors that Apple will soon be on other carriers in China and that could triple their reach in China over the next two years.

Now, if you don’t believe that Apple has gotten to high value status, think about this. When I was on the Kowloon side of Hong Kong, I found a shop that had paper iPads and paper iPhones for the dead to give during funerals or days honoring ancestors. At first I thought these were just paper displays until the guy in the shop slapped my hand and told me they were sacred.

I also spoke with telecom execs who were at the same meeting I was at and they pointed out that we who follow Apple in the US are too myopic. We see them as just being a US and European focused company instead of what they really are, a world-wide technology force. They pointed out that Apple has their phones with 145 WW carriers today and are adding about 5 carriers a month around the world. And like in China, the iPhone is a hot product and in great demand with those who are starting to move into the middle class of their local economic bracket. To them the iPhone is not only a status symbol but the crème of the crop in smart phones.

Before I left the new Apple store in Hong Kong, I asked a group of young people who were in the store looking at Apple products if they were interested in Apple’s upcoming iPhone 5 announcement. I got a resounding yes and in fact, many of them will be glued to blogging sites covering the iPhone launch even though it will take place in Hong Kong at 1:00 AM.

Of course, there is a lot of competition in smart phones and tablets in Asia, but Apple’s products appear to be the one that this new consumer class really wants to own. While Apple has only 5 stores in China, I am certain that there will be more given the huge appetite for Apple products in this country.

So, if you look at Apple and think that their growth and future is limited, just consider the fact that they are just starting to tap into the China market. Not to mention the fact that these newly minted middle class consumers are becoming a major part of the new Chinese economy.

It seems to me that Apple has perhaps more opportunity to grow this market than any of us can imagine.

Kindle Fire Threatens Google More Than Apple

Much of the coverage of Amazon’s announcement of the Kindle Fire has, understandably, focused on the potential competition with Apple’s iPad. While the two products are clear competitive in the sense that some consumers will pick one and forego the other, it is entirely possible that Amazon will sell millions of Fires without making much of a dent in iPad sales.

A much more interesting issue is the impact of the fire on Google. At first glance, Amazon and Google are sort of partners in the Kindle project. The Fire runs on a version of Google’s Android software and Google is the default search engine on the tablet (a privilege for which Google is probably paying.) But a couple of things Amazon has done take aim at Google in ways that have to be causing some discomfort at the search giant, which is already facing serious challenges to its core businesses from Facebook.

First, there’s the matter of Android. To understand what going on, you have to realize the distinction between “Android” and “Google Android.” Android started out as an open-source operating system, but Google has been progressively tightening controls. To use any Google branding or to have access to Google services such as the Android Market or the Google Maps app, a manufacturer must meet Google’s terms and conditions. For the current Honeycomb version of Android, “Google Android” is the only option because Google has not released the source code.

Amazon took a different route. Earlier versions of Android are freely available and Amazon took the code for Android 2.3 (Gingerbread) and modified it for its own purposes. This is perfectly acceptable and legal under the Apache 2.0 license that covers Android. It’s not clear how compatible the Fire software is with existing Gingerbread apps, but it is clear this is not a huge concern of Amazon–and that there is nothing Google can do about it.

Google now faces the very real prospect that the first, and perhaps only, successful Android tablet, while built on a Google software platform, has nothing to do with Google. In particular, it does not use any of the Google services, other than basic search, that were Google’s rationale for building the Android platform. The Android business model was giving the software away, but making money off the users it delivered to Google services. Fire, however, is designed to use and promote Amazon’s services, not Google’s. In a very real sense, Amazon may just have stolen Android out from under Google’s nose as far as tablets are concerned.

As Chris Ziegler writes on ThisIsMyNext.com:

Amazon now stands poised to take one of Google’s most critical assets — Android — and turn it against them. Praise for the Fire’s deeply-customized version of Android 2.3 has been nearly universal, and make no mistake, there’s no going back; this is Amazon’s operating system now, built atop a road-tested core that Google served up free of charge.

The other significant threat Google is Fire’s SILK browser. When running in its default mode, the browsers computational chores are split between the Kindle and Amazon’s Elastic Computing Cloud (EC2.) This architecture means that Amazon will be able to observe, and probably log, everything Fire users do on every web site they visit. (The SILK terms and conditions are silent on the uses that can be made of this clickstream data beyond incorporating the existing Amazon privacy statement.)

Amazon has built its business through deep analysis of the data it collects from users of its sites. But until now it, like Google and Facebook, only has access to the clickstreams users generate while on their sites. With SILK, Amazon can observe what users do on every site they visit. The privacy implications of this are a subject for another time, but the wealth of data could give Amazon and enormous commercial advantage.

As Michael Mace writes on his MobileOpportunity blog:

This will be a fun space to watch. Apple and Google will both feel pressure to respond to Silk to prevent Amazon from getting a decisive lead in mobile web apps. Maybe just the threat of Silk will be enough to finally drive some innovation in the mobile web platform.

I may be indulging in wishful thinking, but there’s a possibility that ten years from now we’ll look back on Silk as the single most important thing in today’s announcement.

Or not. It depends on what Amazon’s agenda is, and they’re not telling.

Why Amazon’s Silk Browser is a Big Deal

In my opinion what Amazon has created with their Silk browser is the most interesting part of their Kindle Fire announcement.

One of the key reasons is because it is an example of the kind of differentiation I have been ranting about lately – especially around “tablets.”

I have been writing quite a bit about my frustration with a dearth of differentiation by consumer products companies. One of the key points I have been hammering home is the need to bring something unique to the table when creating consumer products.

Amazon has done just that with their Silk browser. Specifically what I mean is that they could have simply shipped any number of browsers on the Fire yet they decided to create their own. Why? Because no browser on the market fit their vision for a browser with an emphasis on consuming content and media tied specifically to Amazon’s cloud computing vision.

That last sentence is why I feel Silk is a big deal for Amazon. Myself and many others tend to lean in the direction of our computing future taking place in the browser.

Anytime I hear someone is working or releasing a browser I tend to look at it from the viewpoint of our future with a de-centralized computing platform where the browser is the new OS.

Amazon may very well be looking to- and innovating for – the long term future with Silk. What’s more is they are bringing their own vision to the table with this browser. They are thinking about it in terms of their own unique cloud services.

In fact what is very interesting about Silk is that I don’t believe it exists to differentiate Amazon’s hardware but rather to differentiate Amazon’s services.

If that is true then what is to stop them from putting the browser on other platforms like Android, iOS, Windows or OSX? Nothing, and that is exactly what I think they will do.

Amazon, I believe, is brilliantly going to create an ecosystem tied to their services and then release hardware agnostic software that uniquely take advantage of the breadth and depth of Amazon’s services.

At a fundamental level this is also Google’s strategy, however at this point in time I feel Amazon has more to offer and a better chance at success. Not to mention more consumer trust.

My analysis of what Amazon is doing with Silk is going to be an evolving one as I experience it more for myself and observe the decisions Amazon makes related to it.

However for now by bringing a browser to market that takes advantage of key Amazon services that no other browser can do is a fascinating initial strategy.

One of the reasons I say that is because what if Amazon doesn’t believe that a general browser is the browser of the future? Perhaps they can envision a future where consumers use multiple browsers to get differentiated experiences with services offered by companies.

If the browser is the OS of the future then that could seem logical. We choose operating systems today based on our preference of UI, experience, etc and what if the same is true of browsers in the future?

So Amazon focuses their browser around media consumption, publishing, reading, as well as customer loyalty to their services. Therefore when consumers want Amazon services they use the Amazon browser. When they want Apple services they use Safari, when they want Google services they use Chrome, and when they want Microsoft services they use Internet Explorer (a name I hope changes.)

I use different apps for different tasks today so I don’t believe it is a stretch to think that I may use different browsers for different tasks or use cases in the future.

In fact in this future it is possible for me to consume services from a range of different providers rather than simply commit to one service providers ecosystem.

This is all theoretical analysis of course but I find it very interesting to think about related to the future of computing.

Now back to present. Regardless of where Amazon goes with Silk in the future I do feel they are orienting themselves to take advantage of the cloud computing future in new ways. And specifically they are creating key hardware and software technologies that are setting the foundation for Amazon’s future as a services company.

Kindle Fire: The Disruptive Power of Amazon

Amazon.com launched its long-awaited tablet, the Kindle Fire, today and once again established its place, alongside Apple and Google, in the Bit Three of economic disrupters. My colleague Tim Bajarin has written about the details of the $199 tablet and why it will be a game changer. I am going to focus on the impact of the Amazon business model.

One reason that every tablet that isn’t an iPad has struggled badly is that they haven’t given consumers a compelling reason to want to own one. The iPad offers a great user experience based mainly on a rich system of inexpensive apps offered by Apple and a galaxy of third-party developers.

Competitors have offered products with a somewhat worse experience for about the same price or a much worse experience for a significantly lower price. Unsurprisingly, consumers found neither model appealing.

At this point, we have to assume that the actual performance of the Fire when it ships Nov. 15 will be close to what Amazon demonstrated on Sept. 28. Attendees at the event were only allowed to look at, not use, the prototypes on hand. But if it does, Amazon will be hard-pressed to meet the demand.

But the real prize for Amazon will be Fire’s ability to sell, something that should let the company quickly recoup the $50 to $100 in subsidy implied by the $199 price. The first thing it will sell is $79 annual subscriptions to Amazon Prime, an odd but highly successful bundle of free two-day shipping on all Amazon goods and unlimited access to Amazon’s large library of streaming movies and TV shows. My guess is that the conversion rate after the one-month free trial of Prime included in the Fire’s price will exceed 50%.

The Fire also looks to be a beautiful e-reader that will sell lots of books. (And Amazon protected its flanks by announcing three new monochrome eInk Kindles: an entry-level product at $79 and a new touchscreen version, with and without free 3G wireless, at $149 and $99. Those are impulse purchase prices that will probably finish off the printed book.)

Although Fire’s software is based on Android, it is not an official Google Android device and will probably not have access to the official Android Marketplace. I don’t think this is much of a concern to Amazon, because it stands ready with its own App Store, one more way to sell stuff. (In general, the fact that Fire runs on Android is about as apparent to the user as the fact that TiVo runs on Linux, which is to say not at all.)

Apple is not likely to be quaking at the prospect of Kindle Fire, nor should it. While the iPad and the Fire will compete at the margin–people only have so much money and only want so many gizmos–they are very different products with very different business models aimed at very different markets. Barnes & Noble and Google have a lot more reason to be worried. So does anyone else who sells stuff, whether the goods are digital or physical.

The Kindle Fire is a Game Changer

After months of speculation, Amazon finally rolled out the Kindle Fire this morning, their version of a cross between a super eBook reader and a small tablet. But make no mistake, this product is a game changer. And it has the potential of really helping refine the market for both future eReaders and tablets.

The first game changer is its price. At $199, it sets up a real battle with the other Android tablet makers and will give them serious headaches going forward. And even though it is a 7 inch color touch system optimized for reading, its use of Android’s Gingerbread OS (Android 3.3) gives it some serious OS power that lets it be a tablet in the true sense of that word. Especially since it supports full Flash and any other cloud based services.

The second game changer is its tie to their Prime Service. This is a huge deal. What it represents is a device (Kindle Fire) now tied to a full yearly subscription service. As you know, Prime was initially set up to cover shipping costs for all of the products one buys from Amazon. But it is now being extended to include their movies, music, etc. And it is being applied to any of this content that will be used on the Kindle Fire as well. What is interesting about this is that it is a subscription model masked as a much broader service fee that includes the coverage of all shipping fees of products purchased by Amazon. This is one of the great bargains alone and throwing in the other services like streaming media so that it is covered in this overall cost is brilliant. And consumers won’t think of this as a subscription service.

Third is the actual business model, which is very different from Apple and the other tablet makers. At $199, this device is clearly being sold under cost. My sources in Taiwan say that the bill of materials on this is somewhere between $229 and $249. But Amazon appears to be OK with this since they will amortize part of the payments that come from Prime, bought books, movie and music and perhaps other purchase to subsidize the actual cost. As I wrote in my PC Mag column about this in August, I see Amazon being perhaps the only one, besides Apple, that could deliver this type of model in which the device is sold under cost and future sales and services are amortized as part of their ability to cover costs and even have some profit tied to the device itself. (http://10.0.1.11:63651/)

The fourth game changer comes with their Silk Browser. This browser cache’s key content from a site like Time Magazine, such as its cover art, magazine format, etc, and then once connected only goes out and updates the new content that is available. The result is that the page itself can be loaded very fast. This is an amazing way to make a browser work with key content. This means that publishers and other Web content vendors can work with Amazon to make Web sites optimized for the Kindle FIRE and fully utilize Silk’s ability to balance its role as content mediator between local content and the cloud.
And software developers can also create special versions of their apps just for the Kindle fire as well.

Please note that the name of the device is the Kindle Fire. This is an important distinction. As Jeff Bezos has said on numerous occasions, if Amazon entered into this market it would be by making reading books and magazines the center of its design. And everything else they now have with it is icing on the Amazon Kindle Fire cake.

I believe the Kindle Fire will be a very big hit for Amazon. And it will be, along with the other 2 new versions of the Kindle, a very hot seller for this holiday season.

So how will this affect Apple and the other tablet vendors? For the Android tablet makers this is not good news. They have priced their products in the $399 and up price range which is designed to take the profit from the purchase of the tablet itself. And none of them, besides Apple, owns an eco system of content that can be leveraged and/or amortized to help keep the price of the devices down. This will only make it harder for them to compete with their current tablet designs and business model.

As for Apple, they do own an eco system of software services that they could use to offset costs if they want to. But I doubt that will happen. And while Apple does encourage book reading on the iPad, that is only one of the apps or uses for this device. From Apple’s viewpoint, the iPad is more an extension of the personal computing experience. Yes, it handles movies, TV and music well. But it also plays games with stunning graphics, allows for all types of interactive learning experiences and can be used for productivity in all levels of business. The Kindle Fire is not designed for these types of uses and instead is targeted more at the consumer market that wants a great reader and would also enjoy watching movies, TV shows and more entertainment driven apps as part of their “tablet” experience.

The Kindle Fire is not an iPad killer. In fact, as my son Ben pointed out in a recent Techpinion’s piece, there is no such thing as an iPad killer.

Rather, this is a worthy competitor to the iPad and will be of interest to a very broad audience who wants this type of device and can live with a small screen and a more focused entertainment edge it brings to a device like this.

Apple’s iPad will still be the gold standard for tablets and will always be in demand from a segment of the audience who wants their tablet to be more an extension of the PC experience. And both will do extremely well in this marketplace.

10-4, Good Buddies

It’s official: Apple will unveil the iPhone 5 on Oct. 4.

But it is widely expected that they’ll make an announcement for the iPad, too:

Last week, Facebook CEO Mark Zuckerberg said Facebook would probably introduce an iPad app at some point. I suspect “at some point” means Oct. 4. And the Facebook iPhone app, which kinda sucks, deserves a refresh at the same time.

But wait: Aren’t Apple and Facebook wary of each other? Apple tried to launch its own social networking system last year. Remember Ping? And Apple is well aware that Facebook will soon have ONE BILLION USERS who don’t really care if they access Facebook on an iPhone, an iPad … or an Android phone, an Amazon tablet, an HP TouchPad (er, nevermind), a toaster, an Xbox, or an Etch-a-Sketch.

Facebook currently has 800 million regular users, and 350 million of them tap into Facebook on a mobile device, even though the mobile Facebook apps kinda suck.

Yes, Apple and Facebook are wary of one another. But they share a common enemy:

: Oh, hi, Larry.

And, as the ancients so wisely noted, “The enemy of my enemy is my friend.”

Mobile is the future; Facebook lacks a strong mobile platform, which Apple can provide.

Social is the future; Apple lacks a strong social platform, which Facebook can provide.

Google is the enemy; Android competes against Apple’s iOS and Google just bought a mobile phone maker (Motorola Mobility for $12.5 billion), and Google+ (the fastest-growing social network in history) competes against Facebook, and everywhere Apple and Facebook want to go, Google is there waiting for them, licking its chops.

So, I expect Facebook to “friend” Apple, and vice versa, at next Tuesday’s events. And that, to me, is far more interesting than the incremental improvements we expect to see in the iPhone 5.

Why The iPad Could Be Huge in China

I’ve stumbled across some interesting research from Citi Group Financial’s internal research group. The research report was specifically about tablets but the part I found interesting was their research related to tablets and China.

Citi surveyed almost 2000 people and found some interesting results globally for tablets. With the US they found that tablets and specifically the iPad were not an immediate threat to replace PCs. Their research pointed out that in the US only 8% had purchased a tablet with the intent of replacing a laptop. The bulk of the usage of tablets the research turned up was for more lightweight consumption. Things like web browsing, email, social networking and multimedia were the top usage models. Their China research however turned up very different results.

It appears that in China there are significantly more people looking at buying tablets and using them as a laptop replacement. 21% of the people in their China survey said they currently own a tablet compared with 17% in the US/UK. 26% of China respondents said they intend to purchase a tablet over the next 12 months compared to 12% in the US/UK.

More interestingly with this data was that 31% of Chinese respondents said that their interest in purchasing a tablet was to replace their notebook. Another 26% expressed interest in a tablet to replace their desktop and another 30% interested in replacing their Netbook with a tablet.

The reason the iPad could be huge in China is firstly because China is a huge market and second because they appear to be interested in a tablet as a PC replacement. Which is a fundamental difference than why US and UK consumers are buying tablets.

If it was clear before it should be crystal clear now why Apple is so laser focused on China. In fact all the trends in China are playing to Apple’s favor. The iPad for example has 73% of the tablet market share in China and we can expect that to grow over the next few months and even more with version 3.

The other interesting thing about China is that it is one of the fastest growing regions for PC sales. This data seems to suggest that China could also become one of the fastest growing regions for tablets as well.

When I first read this data, I thought it seemed a bit too optimistic about China and tablets. Mostly because we are constantly reminded by all the large PC vendors how fast China is growing as a market for PCs. So this data seemed at odds with the reality that PC sales are accelerating in China.

PCs are still maturing in China so why would there already be significant interest in tablets over PCs? The answer I feel lies with China’s need and desire as a market for small and mobile technologies.

Netbooks had quite a run in China and for many Chinese consumers Netbooks were the best priced and sized computers for their first PC purchase. The iPad in terms of size and mobility are highly desirable among the Chinese consumers and may be some of the central reasons they are attracted to tablets so heavily.

Because China is so large and because PCs are selling like hotcakes over there I don’t suspect that tablets will eat into PC sales in any way that should alarm manufactures. Both will continue to grow and accelerate extremely quickly.

It is important to note that the China based research was done with those who are in the upper and rising middle class, which is a large and quickly growing segment of China consumers.

Whether it is with iPads or Macs Apple has a huge opportunity in China.

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Dear Industry: Dare to Differentiate

Why should I (or anyone) buy your product or service over another? This is one of the most important questions any company in business should be asking. Right now it seems in the consumer and personal electronics industry too many executives answer that question with “price”. Their thinking is “My product costs less therefore it is the more desirable option.”

The only problem with that answer is that it is fundamentally flawed, particularly when a product or service competes in a market that is mature or post-mature. In mature product markets there is significantly more happening during the purchasing process.

The reason price is what most companies in the personal technology industry is because price was what drove the explosive growth over the past 10-15 years. However now that the market for PC’s is mature and smart phones and tablets will mature very quickly. Strategically thinking through product differentiation will be central to the innovation and product planning process.

Understanding Mature Markets
In a mature market differentiation is everything. This is true for the simple reason that in a mature market most consumers know what they want in a product and shop accordingly. As a product or category goes through the maturation cycle consumers first purchase helps to familiarize them with the product for the first time. This is happening now with smart phones and tablets.

Consumers are experiencing their first or second smart phone and their first tablet. This will continue to be case for the next few years as these categories mature. After owning one or two product generations consumers begin to become more familiar with their desires for a product.

However the PC market is fundamentally different. Most consumers have owned at least one if not several desktops and or notebooks. Because of this they now know for the most part what they want and what they don’t want with a personal computer and they are shopping accordingly.

It is with this consumer mentality that differentiation is crucial.

This idea first hit me five years ago when I was doing some specific analysis around differentiation. I walked into Best Buy to try to get the consumer experience for shopping for a notebook.

What I saw was a line of notebooks spread across the computer aisle all looking roughly the same. They all ran the same OS with no clear value proposition in favor of one over another except for price.

So as I watched consumers come in and shop for notebooks what was the first thing they went up and looked at? The price tag. Price is important but it should not be the only value proposition of a consumer product.

In a mature product market consumers move to shopping from price to preference.

PC’s Are Now Like Cars
I use this analogy quite a bit but the automotive industry I feel is the best example of a post mature product market to study.

There are more examples of technology and automotive industry similarities than I have time to get into but we can look at a few.

When consumers shop for cars they already know what they want based on their needs or preferences. Do they prefer a truck, do they prefer a minivan, do they prefer an economy car, do they want to save gas, or do they want to drive in luxury. These are all pre-defined buying characteristics that consumers are self-aware of.

The automotive industry has segmented and each segment has its own unique needs, wants and desires.

Similarly with regards to the technology industry consumers are shopping for PCs and other devices based on preference. For some price is their preference, like an economy car, however that is not the only differentiation opportunity.

Hardware Differentiation is Not Enough
All of that context on mature markets and the automotive industry to say that hardware differentiation is simply not enough.

Apple differentiates itself in three vectors all working together. These vectors are hardware, software and services. Apple services differentiate their software which differentiates their hardware. Because Apple is vertically integrated and own’s every level of their differentiation they stand apart from the pack.

It is for this reason that some level of vertical-ization is necessary in order to compete going forward. It is also for this reason enabling technologies or middleware companies need to figure out how to help their hardware partners differentiate their products.

This is never more glaringly true of a problem than with Windows and with Android. Android and Windows are middle ware software providers that solve the software problem for hardware manufactures but add the problem of differentiation.

Devices running the same software can only be different through hardware. This is why in my scenario above when I was looking for notebook differentiation I saw all the notebooks at Best Buy running Windows. None of them were really any different because of it.

Differentiation is no easy task in todays landscape. None the less the answer is innovation. Right now I see companies innovating looking through the rear view mirror rather than innovating with a forward-looking philosophy.

Dare to differentiate, dare to innovate and look to the future not to the past.

Read the First in the Dear Industry Series:
Dear Industry: The Series Introduction

Is Meg Whitman the Right Choice for HP now?

If you have followed HP over the last 12 months, you know that they have had, should we say, some serious missteps in the marketplace. Investor confidence was down and consumers were confused about their strategies, products and future.

The way they communicated the potential spin off of the PSG or PC division only made consumers question whether they should even buy an HP PC if they were not sure they were going to be there to support it 12-18 months from now. They literally made PSG a lame duck division.

Executive Chairman Ray Lane, on the call this afternoon, pointed out that after Aug 18th he got an earful from investors and customers alike and from that point he and the board began to realize that they had to make changes at the top. In the end, they fired former CEO Leo Apotheker for lack of execution and pinned the communications fiasco on him. With that, they determined they needed not only a proven business leader but one that was a great communicator as well. Lane pointed out that they had fresh CEO research material from the last search and even with the prospects that were on that list still in their sight, they determined that someone from within, specifically Meg Whitman who had 8 months of being a board member under her belt, was the right choice.

While many may question her total skill set to run a company like HP, I don’t think HP had a real choice but to hire from within. The problems of the present was only setting them back in terms of short and long term execution and they could not wait even another quarter to right the ship. What she brings to HP is the ability to hit the ground running with little learning curves and make decisions that will help get the rank and file positive again and moving in the same direction. She is knowledgeable enough to quickly sort out the critical strategic issues before them and make the kind of hard decisions needed to get the company moving in the right direction, at least in the short term. She is also a very fast learner, with the ability to absorb a great deal of diverse information quickly.

I can’t emphasize enough how critical it is to get HP moving forward again now and not six or nine months from now.

Whitman made a commitment to deal with the question of PSG as a spin out as fast as possible. More importantly, Ray Lane explained that the intention of the communication about PSG on Aug 18 was to state that the big question about PSG was whether it could be a more nimble company capable of faster innovation if it was spun out. And if that were not the case, it needed to stay inside HP and continue to be a strategic part of their hardware business. Obviously, this is not what they said or what the investors or customers got from the way it was communicated on Aug 18, which is why all the confusion. But it is a priority for Whitman and the board to get this resolved quickly so as not to harm the PC business any further and I applaud her for making this a top issue immediately.

Only time will tell if she was the right one to take over at this time in HP’s history but she has the leadership and communication skills HP needs now to keep it from sinking any further and rallying the troops around a unified vision. And at the moment, I believe that is the real reason the board decided on Whitman. They need her to correct the problems of the present now and get them moving in the right direction as fast as possible.

An Apology

I messed up. I owe you an explanation.

Well, not really. I was on a delightful trip to Colonial Williamsburg with my 92-year-old father and hero, Ken Lewis, and took a couple of weeks off from blogging and tweeting. I apologize for not staying in touch.

You see, apologies seem to be trending. One of the emails in my neglected inbox was from Reed Hastings, the CEO of Netflix, which angered customers recently with a blockbuster price increase and a confusing bifurcation of its DVD and streaming movie service.

Hastings began the email with an apology: “I messed up. I owe you an explanation.” He continued:

It is clear from the feedback over the past two months that many members felt we lacked respect and humility in the way we announced the separation of DVD and streaming and the price changes. That was certainly not our intent, and I offer my sincere apology. Let me explain what we are doing.

Did this appease angry customers or impress Wall Street investors? No. A million customers quit the service, and Netflix’s stock price is less than half what it was earlier this year. “Netflix seems to be making a snuff film starring itself,” a Dow Jones Newswire columnist just tweeted.

Then, the other day, the New York Times columnist David Brooks apologized for “being a sap.” Specifically, he apologized to his conservative readers for his previous admiration of President Obama’s centrist, willing-to-compromise, pragmatic approach toward Congress. Obama’s sin: Proposing a $4.4 trillion deficit reduction plan that did not completely cave in to the Republicans. Brooks wrote:

It has gone back… to politics as usual… I was hoping the president would give a cynical nation something unconventional, but, as you know, I’m a sap.

Did this appease angry conservatives bitter about Brooks’s earlier tolerance for Obama? No. The flogosphere erupted in a fury of anger, from both left and right.

In an email to The Atlantic, Brooks mused on the value of apologies:

One thing I’ve noticed is that columns in which you admit error generate more hostility than any other kind. I did a series on what I should have known about the Iraq war and the response from the left was more vicious than at any other time, and I was making a few concessions to them.

Either they smell weakness and exploit it, or they feel more self-righteous than ever. In any case, the lesson is that from a public relations perspective, politicians are probably right in never admitting error in public.

Does this hold true as well for business executives? Should you apologize to customers or employees or investors for upscrewing something big? Is the best policy never to apologize at all?

The obvious advice is to avoid upscrewing in the first place. But upscrews happen. The key is to apologize strategically.

Do you hear HP’s Board of Directors apologizing for allowing a once revered Silicon Valley company to spiral into chaos and irrelevance? Or for even considering Meg Whitman as the next CEO? No.

[I started to list companies that ought to be apologizing for something, but that would consume far too much space. I apologize.]

Remember in April when Sony’s sloppy security allowed hackers to steal credit card information from 10 million Sony PlayStation Network customers? Sony had to shut down PSN for 10 days, knocking 77 million customers offline.

Kaz Hirai, Sony’s No. 2 executive, held a press event to apologize. These screengrabs say it all:

And remember when Apple cut the price of the new iPhone by $200 just two months after introducing it? Steve Jobs, not otherwise known for contrition, issued a public letter of apology, explaining why customers were ungrateful wretches but offering them $100 credit toward buying more Apple products.

Which reminds me of the delightful Joy of Tech cartoon from 2007:

Anyway, I apologize that this post has gone on so long without a conclusion. I promise to do better next time.

P.S. Hey, Reed, how about an apology for naming it “Qwikster”?

The iPad is Hot in Small Business

One of the most interesting things related to our tablet research of late is what is happening with the iPad in small business.

Apple in their last earnings reports made some points related to the iPad and the enterprise but it is small businesses who are adopting the iPad at incredible rates.

We are still underway surveying small business all over the US but with more than two dozen small business owners already surveyed it is clear the iPad is hot in small business.

This is a significant trend. First of all because the sales of these devices would fall under general consumer sales. So we wouldn’t necessarily be able to track them as specific sales to be used in small business like we can enterprise adoption.

I have a hunch, which would be hard to quantify, that a significant portion of iPad sales are being put to use in small business in some way shape or form.

I have talked to restaurant owners using them to take orders and send automatically back the kitchen. I have talked to financial advice firms using them for notes, organization, and to walk clients through data. We have talked to consultancies, legal firms, small boutique shop owners, automobile dealerships, photographers and a host of other types of small businesses and nearly all of them are finding creative ways to integrate the iPad into their business.

Interestingly so far in our study over 85% of small business owners we surveyed are either using the iPad in some way or plan to purchase and use one within the next year.

A key observation coming out of this research so far is how all of the small business owners using the iPad for business have been using non-customized apps right out of the app store.

This differs from many enterprise solutions where the enterprise or IT department often times creates custom applications. Small business owners don’t have the luxury or resources to have custom apps built to serve their needs so they find apps or combinations of apps that fit their purposes.

Another key finding in the remarks of many small business owners and users of iPads was that they felt the iPad made them competitive. For some, part of their reasoning for buying the device was that their local competition was now integrating iPad and they wanted to stay current.

Another fascinating finding was how many small business owners found that using the iPad as a part of their business gave their customers or prospective customers the perception that they were “with the times” or on top of the trends. They remarked how using technology and specifically the iPad was “cool” and they wanted to send the right message to customers.

Perhaps even more interestingly many also said that they believed that using the iPad actually helped them land new customers. This was especially true when small business owners, like several financial firms we spoke with, compete with larger firms who are not using iPads. These small business owners believed that new customers viewed their use of the iPad in their services business gave them an edge over the larger firm’s reps who still used pen and paper. Apparently it isn’t cool to show up to a meeting with a pen and paper these days. Ebay mobile is currently running a commercial that makes this point.

Lastly although we have only spoke with just over two dozen small business so far, many remarked on how many iPads they are seeing by small business in their towns by friends and even competitors. It is clear the trend of iPad in small business may be larger than most anticipated.

When asked about Android tablets price and lack of key apps for their business needs were the biggest factors keeping them from considering anything other than iPad at this point. That and they kept hearing glowing reviews from other small business owners about iPad and mixed results if any about Android tablets.

The iPad phenomena is so much more than just consumption. Small business owners, who can claim the iPad as an expense, are finding new and creative ways to integrate iPad into their workflow.

My sense tells me that we are barely scratching the surface of iPad in enterprise and small business. I believe the next year will shed much more light on the potential for iPad and business.

If you are a small business using iPad in unique ways feel free to share with us how you are using iPad in your business.

The Apple Brand Is a Powerful Selling Point

At the Intel Developer Forum this week I saw a number of interesting products and product concepts from a wide range of manufacturers.

As I looked over many of these products, some from known brands and some from more obscure brands, which are known as white labeled laptops, I started thinking about how important the role of the brand is as it relates to consumer purchasing decisions.

Currently my consumer research focus is North America, so I can’t speak for the other regions, but in the west consumers resonate with brands.

I saw many very thin and very light notebooks called UltraBooks from Acer, Asus, Toshiba and a slew of others.

Many of the UltraBook designs that I saw were poorly attempting to look like the MacBook AIR. One from Asus came incredibly close. However it was that product that got me thinking about the role of brand.

My thesis, which is and has been evolving, is that Apple’s brand is a major factor in the overall appeal of their products. This is something that can not be created or duplicated overnight by competitors.

Of course Apple makes great products but these products fall under a very distinguishable and relatable brand.

I see a lot of interesting UltraBook designs coming from manufacturers. Intel wants to get these prices down so the lure of one of these products over the MacBook Air would be price.

But here is the problem. A growing number of American purchasers don’t want cheap. Our research is showing that the value and premium segment of the market is growing at an alarming rate. And, with that segment, brand matters.

In the US and perhaps even in growing segments all over the globe, the strength of the Apple brand is unparalleled in computing currently. That causes real problems for companies like Acer, Asus, Lenovo, Toshiba etc who don’t have nearly the brand strength as Apple.

I view what is happening in personal electronics similar to what has been happening with fashion. People make brand or style centric decisions based on what they feel reflect them as a person. Again in this reality brand is very important.

Never before did this hit me with such truth than when I was doing consumer market research for a PC OEM who was struggling in the consumer segment.

My goal of the research was to explore the role of design with the younger more influential early adopter audience. The issue of design as a personal statement hit home when I showed the current non-Apple notebook design to a college student and asked for his thoughts. Calmly and quickly he said to me “I wouldn’t be seen in public with that notebook.”

Consumers in the west are now making conscious decisions about the tech products they buy and how carrying that brand around is a part of their self-image. Because of that, brand matters.

The Apple brand is just one part of a fast and deep collection of competitive advantages.

We will be doing more research on this subject soon, but I have a hunch that if you stuck any of the current UltraBooks next to the MacBook Air and asked which product would these customers would buy, a very large group of them would choose the Air and the Apple brand would play a role in that decision.

Many could argue that price matters. To this I would agree however I don’t believe that in the US, where PC’s are a mature market, that price is the only factor in that decision. Even if UltraBooks come in at $200 or more less than the MacBook Air, I don’t believe in any way that threatens Apple’s growth going forward.

How Microsoft is Starting Over With Windows 8

One of the things that I have been observing as we have seen bits of Windows 8 get shared publicly, is the drastic re-thinking of the OS and the role of the OS by Microsoft.

Obviously the most glaring sign is the Metro UI which presents information in an entirely new way. The other somewhat obvious but somewhat subtle observation is around touch. Given that Microsoft has been thinking about touch as it relates to Windows for quite a while now, it is surprising that they actually got it right as late as they did.

Regardless of how long it took I actually think Microsoft has finally nailed touch at least in the area of the operating system. The next question will be can they and their development community nail touch with applications.

The last interesting observation is around Windows on ARM. There is still very little information regarding and being shared with WoA (Windows on ARM), which may not be a good sign, however we do know that new applications created using MSFT’s tools are supposedly able to cross both X86 and ARM versions of Windows.

There is still the question of legacy applications written for X86 and whether they will work on ARM. As far as I can tell from talking with industry folks the consensus is no, they would need to be re-complied or written again from scratch. Another early observation and perhaps needed clarification is whether or not the non-Metro UI version of Windows is available on ARM. I am yet to get a clear answer on that point but some trustworthy sources tell me only the Metro UI is Windows on ARM.

Now if that is true that existing Windows applications are not backwards compatible with ARM and the Metro UI is the only way you experience WoA then I am left to conclude that Windows 8 on ARM is essentially a brand new operating system.

It is an entirely new look and feel, it requires brand new apps with no support for existing ones, therefore an entirely new third-party development ecosystem needs to cultivated. If that is true then how can we not consider it an entirely new OS platform?

So why doesn’t MSFT call it something other that Windows? The answer I believe is because WoA and Windows 8 holistically is Microsoft’s best attempt to completely start over with Windows.

Windows on ARM is clearly a re-start of Windows, assuming my claim of a new OS is valid, and they are pushing the Metro UI as a larger part of the overall Windows experience while downplaying the more familiar start bar, program, task manager, application bar part of the Windows UI.

I don’t think it is any industry secret that Windows has continued to maintain many of the same fundamental OS technologies for over a decade. Some of those things like the registry for example may not be the best ways to go forward. This is why I believe Microsoft knew they needed a fundamental rebuilding of the OS at a functional and fundamental level and Windows 8 is their best attempt at a re-start.

If they can successfully transition their partners to a new OS that is built to thrive in the PC and the Post-PC era then it will benefit them greatly.

I actually applaud this work of theirs to scrap many of the things they clung to from Windows of the past and look more to the future role Windows will play in the personal computing ecosystem.

In fact if you think about it there is no better time for Microsoft to have a fundamental re-start of Windows than now. My ONLY hope is that they execute on this platform and that they get it right the first time.

I do not believe Microsoft can withstand the “third times a charm” syndrome they have faced in the past given how fast this market is moving.