Windows on ARM to Include Desktop Office. But What About Outlook?

Office logoWhile Microsoft has said a lot of Windows 8, it has revealed very little about its almost equally important software partner, Office 15. In in a post on the Building Windows 8 blog today, Windows boss Steve Sinofsky disclosed a vital bit of information about Windows on ARM (WOA), the version that will run on ARM, rather than Intel 86, processors and is especially important for tablets:

“WOA includes desktop versions of the new Microsoft Word, Excel, PowerPoint, and OneNote. These new Office applications, codenamed “Office 15”, have been significantly architected for both touch and minimized power/resource consumption, while also being fully-featured for consumers and providing complete document compatibility. WOA supports the Windows desktop experience including File Explorer, Internet Explorer 10 for the desktop, and most other intrinsic Windows desktop features—which have been significantly architected for both touch and minimized power/resource consumption.”

I don’t know how much to read into this but there is one critical application missing from the list: Outlook. Sinofsky says the Windows 8 Metro mail app will support Exchange Active Sync (EAS) for mail, contacts, and calendaring. But supporting EAS does not necessarily mean the full Exchange policy support that enterprises want to see. Android phones, for example, can connect to Exchange servers for mail, but do not natively provide full Exchange support (some OEMs have tweaked Android to do this, and there are third-party solutions.)

I think Enterprise adoption  is going to be key to the success of Windows 8 tablets, so this is a big deal. On the other hand, porting Outlook as it currently exists to ARM is a non-starter. Outlook is a notorious resource hog and ARM programs are going to have to be resource sippers because of the relatively limited processing and memory power available on tablets. And Outlook’s massive databases would swamp the storage available on a tablet.

A Microsoft spokesperson declined to elaborate on Sinofsky’s blog, so I guess we’ll have to wait a while longer to find out.

 

 

Apple’s Quiet, Brutal War on Wireless Carriers

Steve Jobs made no secret of his disdain for wireless carriers. In 2005, when Apple was still denying any interest in getting into the phone business,  Jobs sneered at the four major U.S. carriers as the “four orifices” through which the wireless business passed. With the launch of the original iPhone, Apple made a concerted, but failed, effort to change how the wireless carriers did business by getting AT&T to sell the phone without a subsidy.

iPhone 4SJobs had to make a peace of sorts with the carriers because that was the only way  to get the iPhone into the hands of customers. But now he seems to be wreaking posthumous revenge on his old foes. The problem is simple. The carriers are selling tons of iPhones. and  Apple is collecting all the profit. Sprint reported yesterday that it sold 1.8 million iPhones in the fourth quarter, 40% of them from customers new to Sprint.  But the massive subsidy cost, at least $300 a unit, contributed to a $1.3 billion loss in the quarter (and to Apple’s staggering profit in the same period.) As PCWeek.com’s phone maven Sascha Segan tweeted, “Sprint’s quarterly results show once again how the iPhone is a way to transfer $ from carriers to Apple.” In a CNNMoney post headlined “The iPhone is a nightmare for carriers,” David Goldman quoted Nomura Securities analyst Mick McCormack as saying: “A logical conclusion is that the iPhone is not good for wireless carriers. When we look at the direct and indirect economics that Apple has managed to extract from the carriers, the carrier-level value destruction is quite evident.”

There’s not a lot carriers can do about it. The original deal Apple offered in 2007 was almost certainly better for them. Apple relented after  AT&T pushed to renegotiate the deal and, more important, additional carriers outside the U.S. refused to go along with Apple’s terms. The carriers got what they wanted, and now they are paying the price, having yielded control to Apple over pricing, branding, apps. and just about everything else in the customer experience.

Cable operators might want to take a close look at what Apple has done to the mobile phone industry. It has been widely reported in the last few days that Apple has been talking to cable operators, including Rogers communications and BCE in Canada, about partnering in a long-rumored Apple television venture. Apple has no more love for cable operators than it does for wireless carriers, but it needed the carriers because they control the spectrum and it needs the operators because they control the content. Somehow, though, these partnerships have a way of becoming terribly one-sided. I hope Apple can revolutionize the television experience, but I’d advise the cable guys to watch their wallets.

Even With a Huge Quarter, Apple is just getting Started

– Apple’s $13 billion quarterly profit is second-biggest in U.S. history. Only topped by Exxon’s $14.8 billion in 2008

– 97.6 billion in cash that AAPL has is higher than the market value of 476 of the companies in the S&P 500

– Apple sold more iPads than HP sold PCs. – HP PC sales 15.123m, iPad 15.43m

– 315M iOS > 250M Android

Quotes from Tim Cook:

“I believe there will come a day when tablet market by unit is larger than the PC market”

“Apple TV is not just a product but a strategy for the next decade. ”

“There is cannibalization of the Mac by the iPad”, but Apple thinks the cannibalization is much worse on the Windows PC side.

I think it’s remarkable that we’ve sold 55m iPads and we’ve only been in the business since April 2010.

After Apple’s blow out quarter, setting records in nearly every category, there is going to be talk and speculation that Apple is peaking. But really, how can Apple beat this quarter they just had? Especially with such fierce competition right? Wrong, Apple is just getting started.

Think about this last year and quarter for Apple. Apple had a record blowout quarter on incremental product upgrades. What if Apple release all new Macs, iPhone, and iPads in 2012? Tim Cook answered the question of how Apple can keep this up. The answer–innovate.

There are still industries for Apple to disrupt. | Four Industries Apple Can Still Disrupt | There are still new products to be made for new types of customers. We are only half way through this 50+ year journey of bringing technology to the masses.

Not to mention new markets. Apple is just scratching the surface in Asia and the Apple brand is one of the most desirable in all of Asia. Consumers in Asia, and China in particular, have an insatiable appetite for Apple products. One could make quite a compelling argument that China consumer may even have more demand for Apple products than the US.

What is my biggest take away from this call? Lots of OEMs better get their tablet strategies in order.

An iOS Laptop is a Compelling Idea

Our friend Harry McCracken wrote in his CNET column yesterday about why he believes the world needs an iOS laptop. James Kendrick of ZNET shared his thoughts on Harry’s article pointing out that it is a good idea but that he doesn’t think it will happen anytime soon.

Both Harry and James have formed opinions on this matter largely because of the latest Zagg Folio case for iPad 2. As a part of our own research, we have been using this case as well for sometime and have been bringing this solution up in our conversations with industry executives.

Our opinion is that the limitations of touch computing in terms of text entry, formatting, etc are largely offset with the combination of a keyboard. That being said there are still significant challenges with this approach which need to be addressed.

Firstly, an iOS laptop, or any tablet/ laptop combo will be storage limited. Due to the nature of the tablet form factor and use cases there will simply not be hundreds of gigs of storage in these devices for some time. The case can and should be made that consumers who purchase a iOS laptop or tablet/hybrid may not be buying these devices to fully replace a notebook but for many it will suffice none-the-less. Therefore cloud services could be a requirement for devices like an iOS laptop or tablet/PC hybrid to be fully embraced.

The biggest failing I have found in using the iPad 2 with the Zagg Folio case is text formatting and document editing. Going back through and fixing words, deleting sentences or paragraph’s is still a cumbersome experience using touch only. It is not impossible, but this is one area where I prefer a mouse and pointer.

In reality an iOS laptop or tablet/PC hybrid could very well find its niche in what was formerly the Netbook category, a category that at one time was selling 30 million units a year.

Tim points out in his column today, that we could see a resurgence of the Netbook like category with new ultra-thin PC(which are not UltraBooks) that are specifically targeting the low end, basic PC user category.

We remain convinced that there is still a large opportunity in the sub $500 range for a class of computing product. It may very well be that we see a range of form factors target this market and the tablet/PC hybrid being one of the centerpieces. Tim wrote in depth about this new hybrid category in his PC Mag column titled “Make Way for Hybrids” a few weeks ago.

This could be one of the most exciting categories to watch as we see vendors experiment with the combination of touch and mouse and keyboard computing. I agree with James, in that if Apple did do something in this area it probably would not be soon, meaning this year.

Obviously, I would love to see what Apple could do in this area of a iOS/Laptop combo. However, they are also smart enough to be aware of some of the challenges that remain in order to make a device in this category that does not feel cheap, or present a sub-par user experience. For now, personally, I would accept being able to run iOS apps on my Macbook Air.

We do expect innovation in this category as well as fierce combination and hopefully creative innovation. What do you think?

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The RIM Story: In Praise of Mike and Jim

Micke Lazaridis photo
Michael Lazaridis

The departure of Research In Motion co-CEOs Michael Lazaridis and Jim Balsillie was, as amply noted by just about everyone, long overdue. Given the shipwreck that RIM has become, it’s understandable, but more than a little sad, that the coverage has paid so little attention to what Mike, Jim, and RIM accomplished during their glory years.

More than any other company, RIM mobilized business, first by offering the first truly practical two-way messaging device, then by providing enterprises a reliable and secure way  to get messaging onto mobile devices.

In my years of reviewing gadgets, the original BlackBerry 850–a two-way pager–was one of the few that I fell in love with at first sight. The concept of a two-way pager was not new; there were products on the market from Motorola and others. But the original 1999 BlackBerry had a keyboard you could actually use to type a message, a keyboard unsurprisingly similar to the ones found on current BlackBerry models. And RIM offered a straightforward way to get mail from a Microsoft Exchange server to the BlackBerry.

That  service evolved into the BlackBerry Enterprise Server, a powerful  tool for companies to move mail, secure Web browsing, custom apps, and instant messaging onto mobile devices. Security was built in from the beginning, so BlackBerry’s developed a massive following in government and in the heavily regulated finance and health care industries and  made RIM a massive success in the last decade.

The recent sins of RIM’s management are large. They failed to respond adequately to the iPhone, the app revolution, and the consumerization of mobile. Microsoft’s steady improvements to Exchange ActiveSync gradually ate into BlackBerry Enterprise Server’s advantages, and Apple’s quiet work with Microsoft to enable secure Exchange mail on the iPhone allowed iPhones to displace BlackBerrys.

But while it is easy to blame Jim and Mike for their failings, we should not forget their accomplishments. They played a huge part in making the mobile industry what it is today.

Apple’s iBooks Author EULA Restriction is Dumb, Not Evil

Apple created a fair stir around the internet with a provision in the end-user license for its new iBooks Author software that requires that content created using the tool can only be sold through iTunes. ZDNet’s Ed Bott called the move “greedy and evil” while even the normally Apple-friendly John Gruber denounced it as “Apple at its worst.”

iBooks Author iconIn fact, that EULA language is merely stupid not evil. Apple is not asserting any sort of control over the contents of your book, just the formatted output of iBooks Author. That output can only be used to create an iBook and iBooks can only be sold through iTunes, so the language doesn’t actually create any restriction that isn’t already inherent in the software. Besides, no one has to use iBooks Author; there are other tools for creating iBooks.

But while the language of the Apple license may be ineffectual, it is not meaningless. In asserting this sort of control, Apple violated a longstanding principle of software: A program may not impose restrictions on the content it is used to create. Even the Free Software Foundation’s General Public License, in many ways one of the most restrictive licenses around,  doesn’t try to prevent conventional copyright terms on say, a book written using the GPL-licensed emacs editor. And certainly neither Microsoft nor Adobe has ever attempted any control on the output of Word or Photoshop. Tools should be just that; the uses of their output should be solely up to the creator (subject, as in the case of iBooks Author, to purely technical restrictions.)

Perhaps the best face you can put on this mess is Gruber’s interpretation: “Let’s hope this is just the work of an overzealous lawyer, and not [Apple’s] actual intention.”

Reflections in a Yellow Box: The Inevitable Fall of Kodak

Kodak’s filing for Chapter 11 bankruptcy has inspired a swarm of commentators to blame the company’s management for failing to catch the digital wave, leading to a long decline and possible demise. Kodak’s management was indeed uninspired. But even with perfect hindsight, it’s hard to see what even brilliant managers could have done to reverse the course of history.

Kodak did not fail to see the digital revolution. It was an early pioneer in the development of the electronic light sensors at the heart of digital cameras. It was a pioneer in displays, inventing the organic LED. It knew many years ago that digital would replace film. But it is entirely possible to see the future and still not be able to do much about it.

Kodak’s fundamental problem was that its business was not photography, but the manufacture and processing of  film and photographic paper. After the Brownie years, it was not very big force in cameras and was never a serious player in professional equipment.

Furthermore, the economics of digital photography are radically different from film. A 32 gigabyte memory card costs less  than buying, developing, and printing two rolls of color negative film; it holds thousands of pictures and can be reused many, many times. Kodak’s business was built around the recurring revenue of film purchases, and there is nothing like that in the digital world.

It’s easy for critics to say that when the digital revolution began, Kodak should have moved swiftly to get out of film and into the new technology. But film wasn’t easily gotten out of. The film and paper businesses were immensely profitable. Even more significant, Kodak had a vast capital investment in manufacturing. In fact, for years a popular, if grim, form of entertainment in Kodak’s home of Rochester, N.Y., was watching the company blow up former Kodak Park film manufacturing buildings that it no longer had a use for. The inability to shed its vast investment in film manufacturing and processing probably made an eventual bankruptcy inevitable, and perhaps the most serious criticism of Kodak management is not facing the music sooner.

The biggest players in digital photography never were burdened with this sort of legacy. Nikon, Canon, and Olympus are optics specialists, and optics are optics, whether for digital cameras or film. Panasonic and Sony, of course, are huge diversified consumer electronics companies. Only the much smaller Fujifilm has its roots in the film business.

I hope Kodak can emerge from bankruptcy as a  viable business, stripped of its costly legacies. There’s still a business for film as a specialty product and people are still printing pictures, albeit in nowhere near the number they once did. But it will be a much smaller company.

 

Lessons for Tech from the SOPA Fight

It’s too early for opponents of new laws giving the government sweeping new powers to fight internet piracy by cutting off access to web sites to declare victory. A my colleague Peter Lewis points out, these forces are in fact preparing to take the fights to new levels.

Pareick Leahy photo
Senator Patrick Leahy

But the fact is that the once seemingly inevitable march to passage Stop Online Piracy Act (SOPA) in the House and the Protect IP Act (PIPA) in the Senate now seems very much in doubt. The laterst blow came when Vermont Democrat Patrick Leahy, the author of PIPA, said he would need to reconsider the provisions that would allow the government to block access to offending sites.

How did the tech industry turn what looked like certain defeat into a likely victory? And what can it learn from the effort.

Perhaps the biggest takeaway is that a concerted and noisy effort can sway public opinion—and congressional votes. Some of the claims of SOPA opponents were overstated to the point of hysteria. It was a very bad piece of legislation, but only under a government both malevolent and stupid would it have caused “the end of the internet as we know it” or led to the destruction of sites such as Facebook or YouTube. But hyperbolic claims are, alas, the stuff of political debates and the supports of the bills were guilty of equally gross exaggerations.

The tech industry was way too passive during the early stages of the fight. Legislators of both parties are anxious to please the entertainment industry, which was the driving force behind the bills, and PIPA was able to collect a bipartisan roster of 40 Senate sponsors before the tech world mounted an effective response. Some major tech companies let their historic fear of software piracy blind them to the much greater threat posed by the proposed legislation. Both PIPA and SOPA seemed well on their way to passage before the Business Software Alliance, dominated by companies such as Microsoft and Adobe, was shamed into withdrawing its support.

But the industry mounted an effective, if loosely coordinated counterattack that took full advantage of opponents’ tactical errors. House Judiciary Committee Chairman Lamar Smith (R-Tex.) made an embarrassing mistake when he scheduled just one day of hearings of PIPA and allowed only one opposition witness, Google. He then compounded the error by trying to drive the bill through committee in the rush to the Christmas recess. Smith and his allies defeated efforts to strip or modify some of SOPA’s more extreme provisions, but even as they seemed to be railroading the bill, support was eroding. The first drafting session adjourned without a final vote in committee, and efforts to revive the markup before yearend failed.

The industry, for once putting up a united front, also found its voice as numerous tech luminaries spoke out against the legislation. Vint Cerf, Google’s chief internet evangelist and an unquestioned expert on how the internet works, having invented a good bit of it, was particularly effective. Opponents of the bills also learned to work with key legislators whom they do not always regard as their closest friends. Rep. Darryl Issa (R-Calif.) played a critical role in halting SOPA’s march to passage. And a massive grassroots campaign added to the pressure on lawmakers.

SOPA and PIPA are by no means dead and Hollywood and its allies will make a concerted effort to to revive the bills when Congress returns later in January. But the passage that once looked certain now seems like a 50-50 chance at best—and a much more industry-friendly alternative backed by Issa and Senator Ron Wyden (D-Ore.) appears to be gaining momentum.

The tech industry should play close attention to what happened in this fight. It will not only help finish the victory, but could be very important in the inevitable policy fights to cpme.

Few Users Gobble Most of the Data: Why Are We Surprised?

Arieso, a wireless network management company, reported this week that a very small number of users consume the bulk of mobile wireless data. Specifically, Aireso found that the top 1% of users account for half of all data. For some reason, the tech world reacted with surprise.

Despite an abundance of data that threatens to drown us, most of us rely on preconceptions rather than hard numbers to form our notion of how the world works. This leads to bad business decisions and, in the public sphere, terrible policy.

Normals probability density
Normal distribution (Wikipedia)

One of  the big mistakes we keep making is the assumption that the distribution of most things follows the familiar bell-shaped curve, what statisticians call a normal or Gaussian distribution. Statisiticians love the normal distribution because it has wonderfully convenient mathematical properties. And while is does describe the distribution of a number of natural phenomena–the heights of people, for example–the classic bell curve is actually fairly rare in the real world.

Power law probability distribution
Power law distribution (Wikipedia)

What’s much more common is what’s known informally as the 80/20 distribution, from the ancient observation that 20% of the people drink 80% of the beer. This is more properly called a power law (or Pareto) distribution. The key to a power law distribution is that the bulk of what is being measured is found at the far left of the distribution, with a long tail off to the right.

We should realize that everything from wealth to wireless data consumption follows a power law distribution and stop being surprised by the fact. In the case of wireless data, this distribution actually has important business and public policy implications. If a very small number of consumers are responsible for a very large share of data usage, it becomes fairly simple to manage any shortages through pricing policies that affect the tiny minority of mega-users without affecting most of the public.

But neither government regulators nor wireless carriers are acting as though they understand this. We have vastly more data available to support decisions than ever in the past. But it does us no good unless we pay attention.

What Next for T-Mobile?

AT&T’s proposed $39 billion acquisition of T-Mobile USA has been unraveling ever since the U.S. Justice Dept. sued to block the deal  and was effectively doomed when the Federal Communications Commission said last month that it also was opposed. So it was  a bit of an anticlimax today when AT&T officially called the deal off.

The collapse of the merger leaves T-Mobile’s corporate parent, Deutsche Telekom, $4 billion richer in a termination payment from AT&T. But other than acquiring some spectrum from AT&T as a consolation prize, T-Mobile is left to stagger forward on its own facing the same problems that led DT to seek the AT&T deal in the first place.

T-Mo is in a fairly distant fourth place behind Verizon Wireless, AT&T, and Sprint, has a relatively weak nationwide footprint, and currently has no clear path to LTE, the next generation wireless technology. But finding a new partner won’t be easy. A combination with Sprint looks out of the question because Sprint, with serious financial strains of its own, is occupied salvaging the wreckage of its 4G partner, Clearwire. And Verizon is a nonstarter for the same antitrust reasons that killed the AT&T deal.

Furthermore, a combination with either Sprint or a second-tier carrier, such as US Cellular or C-Spire, would be very difficult technologically. Like AT&T, and unlike nearly every other U.S. carrier, T-Mobile uses GSM network  technology. While LTE may eventually provide a common technology platform for all carriers, the reality is that at least for the next few years, T-Mobile and AT&T will be carrying the bulk of their traffic on GSM-derived protocols (EDGE, UMTS, HSPA), while Verizon, Sprint, and most second-tier networks will run primarily on CDMA 2000 technologies. Trying to mix and match these technologies isn’t impossible, but it would add a huge burden to the already difficult business of wireless mergers.

DT has made it clear that it would much rather get out of the U.S. market than dive in deeper, so a major investment in T-MO USA from its German parent is unlikely. One reason that many consumer groups, and much of the technology industry, opposed the AT&T deal is that T-Mo had earned a reputation for being open to innovative handsets and aggressive pricing. We’ll have to see if they’ll be in a position to keep that up following the non-deal.

At least with AT&T no longer in a position to oppose it, T-Mobile might finally persuade Apple to give it the iPhone.

Apple + Anobit: Compeititive Advantage Through Flash Mastery

With its vast cash hoard, Apple could buy pretty much ny company it took a fancy to. But Apple continues to show no interest in making big, splashy acquisitions, concentrating instead on strategic investments that bring the company key technologies and engineers with deep and sometimes exotic talents.

Apple’s reported near-deal (Calcalist via Reuters) to buy Israeli flash memory specialist Anobit appears to be the latest in a string of strategic acquisitions that included low-power processor specialist PA Semi and artificial intelligence gurus Siri. Few technologies are more important to Apple than flash (not the kind that comes from Adobe.) The iPhone and iPad depend entirely on it for storage and Apple has been moving fast to replace traditional Mac hard drives with flash-based SSDs.

A post on ZDNet’s Storage Bits blog by Robin Harris makes it clear  what Anobit might bring to the Apple party. Flash is a difficult technology and getting harder as storage densities rise. The ever tinier memory cells can be difficult to read, flash storage can be unstable because of internal voltage leaks, and too many writes to the same memory cells can degrade performance.

Anobit applies signal processing technology, which it calls Memory Signal Processing, to improve the accuracy of memory reads. An it uses a variety of flash management techniques to manage errors, increase speed, and lower power consumption. I urge you to read Harris’ full post for the details.

Assuming the deal goes through and Anobit delivers what it promises, the acquisition could widen Apple’s already considerable advantages over its competition. The company has already moved aggressively to lock up abundant supplies of flash memory at attractive prices. An Anobit acquisition adds the possibility that Apple could run rings around its hardware competitors through use of superior flash controllers.

Thus do the good get better and the rich get even richer.

Analysis: HP Releases webOS to Open Source Community

Today HP made a fascinating decision. One that is disruptive, exciting, and could lead to valuable innovation. HP has decided to release webOS to the open source community. This decision could have significant impact on the mobile landscape and may end up being one of the most disruptive moves yet.

A quote from the release:

“HP plans to continue to be active in the development and support of webOS. By combining the innovative webOS platform with the development power of the open source community, there is the opportunity to significantly improve applications and web services for the next generation of devices.”

The move by HP to put webOS into Open Source is a brilliant one. Although it was a disaster for them and forced them to write off the $3 billion they invested in it, it is now a gift from them to consumers and could have a drastic impact on the future of mobile devices. Next to Apple’s iOS, webOS is arguably the best non-Apple mobile OS on the market. And it is easy to develop for since software developers can use mainstream Web tools to create webOS applications. Also as a part of the release to open source HP will also contribute ENYO, the application framework for webOS.

Meg Whitman stated in a quote from the press release:

“webOS is the only platform designed from the ground up to be mobile, cloud-connected and scalable,” said Meg Whitman, HP president and chief executive officer. “By contributing this innovation, HP unleashes the creativity of the open source community to advance a new generation of applications and devices.”

Unlike Google’s Android or Windows 8 for tablets, it will come with no strings attached. As a rich Open Source OS, webOS could finally reach its full potential. It would not surprise me to see many of the big Android backers in tablets move quickly to webOS and some may even use it for some innovative smart phones as well.

We believe Android could be the biggest loser from this move by HP. Google has constantly taken criticism from the OEMs due to their lack of unity in releases and overall short roadmap. We have heard countless times how many vendors desire a better option than Android. To many of them Windows Phone provided an opportunity but now this void may be filled by webOS.

HP said they plan to continue to invest in the webOS open source project and will have dedicated team members involved with the open source community.

The move of webOS to Open Source is great news for vendors, developers and consumers and could quickly become one of the better options for OEMs who want more control of their designs and mobile OS user interface in order to help them differentiate themselves from competitors.

Related: Dear Industry – Dare to Differntiate

I applaud this move and although it is bold I believe it has the potential to benefit this industry greatly. I am extremely excited to see how the open source community, developers, and OEMs embrace this opportunity. This is perhaps one of the most exciting pieces of news of 2011.

Check out this small forum thread on HP’s website, asking them to release webOS to open source.

Big Data, Price Discrimination, and Markets

At GigaOm, Derrick Harris has an interesting take on how data analytics are allowing New York landlords to extract maximum rents. It’s a good piece, but I think it just scratches the surface of what is going to become an increasingly important debate about the ethics of big data (where concern until now had focused primarily upon privacy issues.)

Driscrimination in admission prices
A form of price discrimination

Price discrimination is a technical (and value-neutral) term in economics. It refers to sellers charging different prices for a food or service based on factors other than the cost of providing it. In the past, price discrimination was difficult, both because it was difficult, as a practical matter to charge different prices to different customers and because sellers lacked the information they needed to determine a profit-maximizing individual price. Airlines have used discriminatory pricing since deregulation and have gotten increasingly good at it.

But there are a lot of problems inherent in price discrimination. For one thing, it is inherently a distortion of free markets. Efficient markets theory, to the extent that anyone still believes it,  assumes that all participants in a market, buyers and sellers, have equal access to the information that goes into price-setting. Price discrimination, at least as practiced in the real world, depends on the seller having information no available to the buyer. Car dealers could engage in price discrimination because only they knew what the wholesale price of the car really was and what prices were on comparable sales to other customers (a power eroded by the web.) Airlines and hotels have lots of information about available seats or rooms, marginal costs, and expected demand that lets them vary prices profitably.

The growing ability to collect and analyze vast amounts of data, plus the trend to online sales that allow customized price quotes not possible in brick-and-mortar stores, is bound to produce a lot more price discrimination. Is this necessarily bad for consumers? That’s not clear, although there definitely will be winners and losers. It is also sure to produce growing calls for regulating the practice.

 

Windows and ARM: A Fork in the Road

ZDnet reports  that Microsoft has tentatively decided that Windows 8 running on ARM processors will only support new Metro-style applications, not programs written for older versions of Windows and Intel processors.

In one sense, this is not surprising. Existing applications would have to be recompiled to run at all on ARM systems and would probably need substantial tweaking to run well. The ARM systems would probably be mostly tablets, and the existing  Windows desktop interface does not work at all well on touch systems. On the whole, users of ARM-based Windows systems will be better off without these old applications.

The problem is that the result of this decision, if Microsoft goes ahead with it, is two operating systems, both called Windows 8, with radically different capabilities.  This is a situation that cannot help but create confusion for users, especially if there are both ARM and x86 tablets with very different software abilities.

I have long though that Microsoft would have been much better off following Apple’s iPad approach and use an enhanced version of a phone operating system for tablets rather than a cut-down version of a desktop OS.  What looks like it may be a fundamental fork in Windows  suggests that Microsoft made the wrong choice.

Zittrain vs. Apple: What About the User Experience?

Harvard Law School Prof. Jonathan Zittrain does not like the iPhone. Or the iPad.  Or  much of anything about the modern app economy.

Jonathan Zittrain phoyo
Jonathan Zittrain

In an article for MIT’s Technology Review, Zittrain takes up a theme he has been sounding for the past several years, bemoaning a loss of a golden age of software openness, when “anyone could write and run software for an operating system, and up popped an endless assortment of spreadsheets, word processors, instant messengers, Web browsers, e-mail, and games.” In the dystopian future Zittrain sees, “an unprecedented shift of power from end users and software developers on the one hand, to operating system vendors on the other” means the Apples, Googles,  and Microsofts of the world will control what you can do with your PCs, phones, and tablets and we’ll all be the worse for it.

Zittrain is a very smart and witty guy, but I think he is missing something very important. Nowhere in his article does the phrase, nor the concept of, “user experience” appear. Back in what Zittrain sees as the glory days of computing freedom, the user experience was horrible. The overwhelming majority of computer users–a far smaller segment of the population than they are today–weren’t writing their own software. They were struggling to figure out how to use the awful stuff they already had. The situation was so bad that in 1998, I worked with Clare-Marie Karat of IBM Research on a computer user’s bill of rights that focused on the most basic of usability issues.

The fact is that the many millions of people who have bought iPhones and iPads have made a choice. They have ceded to Apple the right to to choose what software their devices can run in exchange for a superior user experience. They don’t seem at all unhappy with the choice. Speaking for myself as an iPhone and iPad owner–and as someone who once upon a time wrote his own software–I’m perfectly happy to have someone keep the junk off my devices. I’m not always entirely happy with Apple’s choices, but I think it’s a good deal on the whole. I have spent way too much of my life cleaning up after really bad software.

I think there’s another important misconception that Zittrain perpetuates. He repeatedly refers to the 30% of the price that Apple claims as its share of App Store sales as the “Apple tax” (and ditto for the Google tax in the Android Market.) The fact is that 30% of the retail price is a lot less than developers had to give up in that mythical golden age when software came in boxes. Back then, they were lucky to get 10% after a publisher, a distributor, and a retailer all took their share–and that was only if they were lucky enough to get distribution in the first place.

An arrangement that takes care of marketing (to some extent) and distribution and still delivers 70% of the retail price to developers is better than anything they have ever had before. It has led to a massive outpouring of independent developer creativity unparalleled since the days of VisiCalc. The only complaints have come from vendors such as Amazon, which are basically resellers and don’t have 30 points of gross margin to share, and they have found their own workarounds. And from a few academics who value some abstract notion of software freedom above user experience.

 

 

How Nintendo Helped Microsoft

Earlier this week Microsoft shared that the XBOX 360 had the biggest sales week in the history of Xbox, selling more than 960,000 consoles in the U.S. during the week of Black Friday. That is a lot of consoles, in a market where the XBOX has significant penetration already. So the question is who bought nearly 1 million XBOX consoles in one week?

Now this is purely speculation since we don’t have specific demographic information, but my intuition is to say they were mostly Wii up-graders. The Wii has dominated the last few Christmas seasons and has exposed many families to gaming who were not hard-core gamers, which is the audience for the XBOX 360 and PS3. Nintendo’s more casual gaming style with the Wii and allure to families as well as children helped grow the market for console gaming. As families became interested in a more graphically rich gaming experience, and their kids who grew up on the Wii got older and now wanted a more immersive gaming experience, the time of the XBOX 360 arrived.

The Kinect helped also selling more than 750,000 Kinect sensors in the same week, an incredibly high attach rate. This is further indication to lead me to believe that many families in the US are upgrading from their Wii to the XBOX 360.

The Wii did a wonderful job making gaming less threatening. It was exactly the market Nintendo targeted. That in return grew the market by bringing families who had children too young for an XBOX or PS3 or were to intimidated by the complex controller. Now it appears the XBOX 360 and Kinect sensor are the perfect step up from the Wii.

It will be interesting to see how Nintendo positions the Wii U in light of some of these recent market advances.

Related: The Wii U is interesting, but how unique is it?

The Flaw in Samsung’s Anti-iPhone Commercial

20111123-122023.jpg

I have to admit, the new Samsung commercial is one of the better commercials from a marketing standpoint for Android devices and Samsung in particular. If you haven’t seen it I suggest checking it out here.

What has been the criticism of many commercials pitching cell phones, Droid’s in particular, is how they don’t market any real value to the end consumer. Showing a gal fighting a robot, or a person hijacking a truck to steal a phone, doesn’t necessarily showcase to the end consumer why they should choose this product over another.

This latest Samsung commercial is highly entertaining and a welcomed departure from the usual commercials from iPhone competitors. That being said, although well intended, I think it misses the broader opportunity and is therefore fundamentally flawed.

As I processed this new Galaxy SII commercial, the flaw in their messaging hit me when a would be iPhone buyer in line at an Apple store said this:

“How will people know I upgraded, since the new one looks the same?”

Despite a range of other odd moments in the commercial, this one struck me because it leaves me thinking that Samsung is interested in iPhone converts, or at the very least early adopters. Granted, I am going to analyze this commercial more than most but it is still a valid observation.

What is flawed with this commercial is that it makes no sense to the non-techie consumer, the largest part of the market and the one Apple’s commercials are designed to speak communicate with. Samsung shouldn’t be concerned with consumers upgrading from the iPhone 4 to the 4S.

This fact hit me while I was laughing at the commercial, because I thought it was funny, and my wife said “I don’t get it.” She didn’t get it because, although she likes the iPhone, she is not an early adopter. That Samsung commercial in no way interested her in the Galaxy SII.

Samsung would be more wise to market to consumers whom are shopping for their first smartphone. This commercial, it appears, is not designed to go after that market. This is the marketing blunder I believe Samsung has made. Apple is out marketing to new consumers, mostly first time iPhone shoppers, and Samsung is focusing solely on existing hardcore Apple early adopters.

Apple marketing is chasing the future and Samsung marketing is stuck in the past.

Facebook and the Future of Web Apps

There was a little company, that I found interesting, called Strobe who was building a platform to help developers build and monetize HTML 5 web apps. I spent some time with their founder Charles Jolley, whom while at his time with Apple created the Javascript framework SproutCore. In our discussion it was clear that Charles and I shared much of the same vision for the future of the web and web apps in general. I had been intrigued with SproutCore since Charles developed it inside of Apple, which subsequently, Apple also open sourced. SproutCore is an open source framework that makes building fast and innovative web experiences easy and intuitive.

This is why my interest was again peaked when I saw that earlier this month Strobe and the team had been purchased by Facebook. This acquisition didn’t strike too many as big news but I think it is quite significant. It is no secret that Facebook wants to further leverage their platform with HTML 5 and web apps into the future. What struck me about the Strobe platform was the problem Charles and team set out to solve which is discovery and monetization of web apps. That is also the part that interests me about this acquisition because it means that Facebook sees itself more of a web app store platform. This isn’t terribly shocking, but now more than ever I think they have the pieces in place to make a run at being a next generation web app platform.

This all comes in light of recent rumors that Facebook is working on a pure HTML 5 and web app phone in conjunction with HTC. If this is in fact true then this acquisition of the Strobe team would make sense as Facebook looks to unify the web app model across their device ecosystem.

The real issue Facebook will have to deal with is around purchasing trust. Assuming what I propose above is true, Facebook will want to have a more intimate billing relationship with consumers in terms of purchasing web apps and possibly more. Right now Facebook does not have a trusted billing relationship with customers and this will be necessary for them to move forward. I am not sure how Facebook will resolve this and perhaps this new Facebook phone is a step in that direction.

The other way around the lack of consumer trust could be to have the carrier involved in the billing of web apps on this mobile phone. This could perhaps be a key strategic first step for Facebook to establish a more trusted relationship with consumers.

Looking at the big picture, the Strobe acquisition sheds more light on how Facebook is orienting itself to be a next generation web platform.

Apple Should Stay Away from the Wireless Carrier Business

Jean-Louis Gassée’s Monday Notes are some of the sharpest and most insightful commentary on the web. But I have to take issue with his suggestion that Apple should get into the wireless business by becoming a mobile virtual network operator (MVNO).

Apple’s mountain of cash naturally gets people thinking about what Apple could do with that mountain of  money, and getting into the wireless business naturally springs to mind. Buying an actual operating carrier is probably out of the question. You can’t just up and start a wireless carrier. You need spectrum, and there isn’t any of that available. Clearwire’s big block could come on the market  if the company cannot overcome its financial woes, but at 2.5 GHz, it’s not the best cellphone spectrum around, and Apple would have to spend tens of billions to build out the network.

Apple could buy a carrier. Sprint could be had and T-Mobile would be available if, as seems likely, the AT&T deal falls through. But I find it impossible to imagine Apple thriving in the highly regulated, intensely political  carrier world. Apple is extraordinarily good at many things, but living in a highly regulated regime, where AT&T and Verizon have decades of experience, is not one of them.

Becoming an MVNO, which means running a retail service over wholesale capacity supplied by other carriers, makes marginally more sense. MVNOs don’t need their own spectrum and are much more lightly regulated than facilities-based carriers. But in the U.S., being an MVNO is a terrible business. The biggest U.S. MVNO’s, Boost and Virgin Mobile, are both owned by Sprint. They, and MVNOs in general, cater to younger and less affluent, often prepaid, customers–not exactly the prime iPhone audience. Apple, being Apple, could make a success of a business where many others have failed, but if I were a shareholder I would not be thrilled with such a move.

But the biggest problem with Apple getting into the wireless business in any form is that it would put it into competition with its most important partners. Steve Jobs’s made no secret of his distaste for carriers–in pre-iPhone days, he called them “orefices”–but, starting with A&T, Apple has done remarkably well and bending the carriers to its will. It failed in an early effort to move away from carrier-subsidized iPhone sales, but gat carriers to offer pay-as-you-go 3G plans for the iPad. Unlike any other handset maker, Apple totally controls iPhone branding and has maintained total control over the software loaded on the phone.

Becoming and MVNO would  put a tremendous strain on these relationships. And for what? Apple Wireless’ service would only be as good as the wholesale carrier Apple is using. Its flexibility on pricing would be limited because it would be at the mercy of its wholesaler. It wouldn’t be able to eliminate many of the mysterious fees and charges that clutter wireless phone bills because most of these are government mandated. And it’s a crummy, low-margin business.

I agree with Gassée that the stodgy and unimaginative carriers are ripe for disruption. The problem is that the scarcity of available spectrum, which effectively bars new entrants, and the difficulty of dealing with one of the most complex regulatory regimes on earth, alas, leaves the incumbent carriers in an extremely strong position to defend their turf. Apple has enough money to get into this business, but I really doubt they would like what they found.

Why Kindle Fire Reviews Are All Over the Place

The Amazon Kindle Fire is having an extremely polarizing effect on reviewers. Most mainstream reviews, like this one from The Wall Street Journal‘s Walt Mossberg, have been favorable with some important reservations. But some, like The New York Times‘s David Pogue were far more hostile.

Kindle fire and iPadThe prize for the most over-the-top reaction to the Fire goes to Instapaper creator Marco Arment, who, in a scathing post on his own blog, said: “Granted, I’ve only spent two days with it, so I can’t share any long-term impressions. But I’m honestly unlikely to have any, because this isn’t a device that makes me want to use it more. And that’s fatal.”

There are two radically different ways of looking at the Fire, and the point of view a reviewer chooses goes a long way toward explaining the reaction. Arment gives the game away high in is review when he writes: “I expected the Kindle Fire to be a compelling iPad alternative.” Pogue adds: “Most problematic, though, the Fire does not have anything like the polish or speed of an iPad.”

Anyone who picked up a Fire expecting it to be an almost-iPad was bound to be severely disappointed. Apple explicitly designed the iPad as an alternative to a traditional personal computer for many purposes. Steve Jobs famously compared the PC to trucks and the iPad to cars and said that while some people needed trucks, a car was more than adequate from most. With that goal in mind Apple set out to build the best tablet it could, then figured out how to price it.

Amazon had entirely different goals. It was looking for a way to build on the success of the Kindle, to offer a more capable device whose capabilities would mostly focus on enabling the purchase of stuff, especially digital content, from Amazon. It wanted a device it could sell for $200 without losing its shirt, and it designed the Kindle with the compromises necessary to make that price point. Complaining that the Fire is less thrilling or compelling than an iPad is a bit like grumbling that a Honda Civic is less fun and exciting than an Audi A6. Both do what they are intended to do very well (though their intended functions are a lot more alike than the Fire and the iPad.)

That leaves the question of how successful the Fire is at its intended uses. I think Slate’s Farhad Manjoo hit about the right balance when he wrote: “Still, when you take into account its reduced capabilities and inferior interface, I’d rate the Fire as something like 70 percent of an iPad. When you consider that the Fire costs only 40 percent as much as Apple’s tablet, though, that’s not a bad deal. If spending $500 to get the real thing is within your budget, by all means, go to an Apple store. But if all you’re looking for is 70 percent of an iPad, then why spend any more?”

But I would argue that even Manjoo gets it partly wrong when he insists on viewing the fire as a kind of junior iPad. I own both–admittedly most people won’t–and I am finding completely difference uses for both. The iPad does replace my Mac or Windows PC a fair amount of the time. The Fire replaces my old Kindle as a reader, with the added benefit of being able to watch videos, play some casual games, do light web browsing–and buy stuff from Amazon. Also, going out with the iPad means taking a bag of some sort, while the Fire fits easily in a jacket pocket.

Related content: Where Kindle Fire Fits in My Life

One final word about Arment’s review: While many reviewers, myself included, have found that the Fire’s touch screen response is fidgety when compared to  many other devices–not just the iPad–the problems he experienced were so severe that I suspect he may have been using a defective unit. In particular, his complain about light leaks around the edge of display is something that neither I nor other users I checked with have experienced, and points to a unit that maybe should have failed quality control. And bad manufacturing defects can lead to an unsatisfactory user experience that make a device seem much worse than it objectively is.

Updated: Marco Arment responds.

Tis’ the Season of the iPad

Nielsen released the findings of a U.S. Survey where they were hoping to discern what electronics products will be hot for the 2011 holidays. Among kids, not terribly surprising, was the iPad atop the list for kids aged 6-12 ranking an all time high with 44% naming the iPad as their most desired product for holiday 2011. To quote the Nielsen study:

Consistent with U.S. kids’ 2010 wish lists, the Apple iPad is the most desired consumer electronic among kids ages 6-12 for holiday 2011. In fact, the iPad increases its stronghold, with nearly half (44%) of kids expressing interest in the product, up from 31 percent in 2010. Two other popular Apple devices – iPod Touch (30%) and iPhone (27%) – round out kids’ top three, with computers and other tablet brands each appealing to a quarter of younger consumers.

I would like to point out how significant the reality is that our kids are growing up using tablets and more importantly touch computing platforms. This fundamentally sets the stage for the massive shift in computing we are anticipating over the next 5+ years.

What is interesting as well in this category is that Apple owns the top three categories in this age group, a significant change over the same survey last year. Again young US consumers, and I would argue in other parts of the world as well, Apple is gaining as a desired brand. I’ve stated how important brand is to the long term life of a customer more then a few times and the significance of this for Apple can not be overlooked by competitors.

Also and perhaps the most significant statistic in this age group is how the desire for a computer has moved down. More on that shortly.

Looking at the 13 years and older demographic Nielsen found:

Among consumers ages 13 and older, appeal for the iPad (24%) has also broadened relative to last year (18%), and exceeds that of computers (18%), 2010’s top item. Further, it appears the iPad has successfully paved the way for other tablet offerings, as a notable 17 percent of adults/teens also express interest in non-Apple tablets.

What is surprising is that for the first time in this US demographic the iPad has overtaken the computer as the most desired holiday item. I know there is a hot debate about whether the iPad, or tablets in general, are the computers of the future. I tend to believe they are but regardless of who is right, for the time being, the iPad is a more desired product than PCs. Again that may not always be the case but the reality is that it is right now.

This is significant because I believe that tablets will extend the life of notebooks in consumers lives giving them less of a reason to urgently upgrade older notebook technology. This is significant because if I am right it will throw off the anticipated refresh rate of notebooks and desktops in consumer markets.

From an industry standpoint the tough reality many have to start thinking about is the very real possibility that tablets may very well be replacing notebooks.

Why iPhone Scarfs Up All the Profits

Andrew Kim’s Minimally Minimal blog has a stunning visualization that goes a long way to explaining how Apple’s share of handset profits is vastly disproportional to its market share. If you scroll down a ways in the linked page, you’ll see a graphical comparison of Apple’s iPhone line to Samsung’s current U.S. product market.

Kim says Samsung makes this many phones to earn a fraction of what Apple does, but I think he has it backwards. A major reason why Apple is so much more profitable is because they make so few products, not just iPhones but across all product lines. Minimizing the number of product variations lets Apple enjoy massive economies of scale in its supply chain. Buying larger quantities of fewer components lets it drive harder bargains with vendors, minimizes inventory costs at every stage from raw components to retail, and simplifies manufacturing.

It’s a major secret of Apple’s (and supply chain maestro Tim Cook’s) success.

(via Daring Fireball)

 

The Tech.pinions Amazon Kindle Fire Review Roundup

Well the reviews are out and it seems like they are mostly positive. Other than a few user interface gripes it appears most reviewers believe the Kindle Fire to be a worthy Android tablet competitor but not much of an iPad competitor. From our own experience with the Kindle Fire we tend to agree on both fronts.

For an in depth analysis on the Kindle Fire and the potential impact on the tablet landscape check out Tim’s analysis after using the Kindle fire both on the road and at home.

Here are some of the more notable reviews and a few of their highlights.

Joshua Topolsky at the Verge

This isn’t an iPad-killer. It has the potential to do lots of things, but there are many things I have yet to see it do, and I wonder if it will get there given the lean software support.

It’s a well thought out tablet that can only get better as the company refines the software. It’s not perfect, but it’s a great start, and at $200, that may be all Amazon needs this holiday shopping season.

Tim Stevens at Engadget

The Kindle Fire is quite an achievement at $200. It’s a perfectly usable tablet that feels good in the hand and has a respectably good looking display up front.

When stacked up against other popular tablets, the Fire can’t compete. Its performance is a occasionally sluggish, its interface often clunky, its storage too slight, its functionality a bit restricted and its 7-inch screen too limiting if you were hoping to convert all your paper magazine subscriptions into the digital ones. Other, bigger tablets do it better — usually at two or three times the cost.

So, the Kindle Fire is great value and perhaps the best, tightest integration of digital content acquisition into a mobile device that we’ve yet seen.

Mark Spoonauer at Laptop Magazine

The Kindle Fire isn’t an iPad killer, but it is a killer deal. At $199, it’s really hard to beat the package Amazon has put together. Assuming you’re willing to carry a smaller 7-inch device, it combines an easy-to-use interface and one-tap access to loads of content in a well-built design

Lance Ulanoff at Mashable

It is the closest tablet I’ve seen yet to an Apple iPad: a consistent, well-thought out marriage of hardware and services that offer an almost frictionless environment for app purchase and content consumption. This is why the iPad has been so successful and why I think the Kindle Fire, despite its imperfections, is a winner, too.

Perhaps the most powerful review comes from David Pogue of the NY Times. Powerful because out of all the reviews his may be the most influential with the everyday consumer. Therefore Pogue’s review may arguably be the one most mainstream consumers, who don’t read gadget blogs, may read and use to inform their decision about whether to buy a Kindle Fire.

David Pogue of the NY Times

Your heart leaps. “This is incredible!” you say, contemplating the prospects. “It’s like an iPad — for $200!”

But that’s a dangerous comparison.

For one thing, the Fire is not nearly as versatile as a real tablet. It is designed almost exclusively for consuming stuff, particularly material you buy from Amazon, like books, newspapers and video.

Most problematic, though, the Fire does not have anything like the polish or speed of an iPad. You feel that $200 price tag with every swipe of your finger.

The Fire deserves to be a disruptive, gigantic force — it’s a cross between a Kindle and an iPad, a more compact Internet and video viewer at a great price. But at the moment, it needs a lot more polish; if you’re used to an iPad or “real” Android tablet, its software gremlins will drive you nuts.

Then again, Amazon tends to keep chipping away at the clunkiness of its 1.0 creations until it sculptures a hit. Or, as they say in the technology business: “If you don’t like the current crop of e-readers, just wait a minute.”

The Kindle Fire may pose a real test for Amazon. This device is clearly a risk on their behalf advancing away from their traditionally successful Kindle E-reader model. Obviously Amazon is not standing still and the rumors are they will have more tablets in 2012. The first Kindle’s evolved quite quickly and Amazon embraced their customer feedback and refined the Kindle experience. If they want to take the Kindle Fire to the next level they will need to do the same with their tablet strategy.

Despite what the reviewing media says the real test is with the mass market. We will know what mainstream consumers think about the Kindle Fire soon enough.

Thailand Floods and Their Impact For PC Shipments

The monsoon rains and floods of Thailand has affected close to 1000 factories across central Thailand and is having a major impact on the hard drive industry. I spoke with my contacts in Taipei last night that told me that the fall out from this, both in human terms as well as business terms would be huge.

At the human level, over 50 thousand jobs are affected in the short-term. But a more urgent problem has arisen. There is now an outbreak of malaria that has struck the area and is causing serious health concerns. And that has now become the government’s priority. Western Digital and Toshiba are the hardest hit and Seagate and Hitachi have been shut down by supply constraints. Seagate could use this to gain ground on Western as their facility was on high ground and will not have to make any capital equipment investments like the others whose equipment were wiped out by the flooding. But they are still impacted by supply constraints.

At the business level, Thailand supplies over 60% of worldwide hard disk drives and 50% of assembly capacity. Even drives assembled somewhere else depend on Thai produced parts.

My sources in Taipei say that this will have a dramatic impact on most PC vendors ability to deliver the amount of PCs they have forecasted in Q1. They believe the shortages of disk drives will mean that it will decrease by at least 30% the amount of PCs that could be shipped in Q1. And because the situation in Thailand is so fluid, they can’t predict how much better things could be in Q2 of 2012 either.

And while PCs are being impacted by this shortage of HDD, so are things like Digital A/V equipment, Digital Imaging systems, and DVR’s as well as in-car navigation systems that are all moving to hard drives to handle their maps and new Internet apps.

What this means for consumers is that if you are looking at buying a PC, do it now. We could see price increases start hitting as early as Dec. All of the PCs and laptops on the shelves now have been priced at the current rate for HDD, while PCs that will ship starting in Dec could see price increases already hitting them by mid month.

And if my sources in Taipei are correct, the component price for HDD’s factored into laptops and desktops could be as much as 20% more by Q1 and some have told me it could be as much as 30-50% given the extreme shortages.

If there were a silver lining to this problem it would be that it could push more of the OEM’s to adopt SSDs for some laptops and all Ultrabooks, and with greater demand for SSDs, SSD prices could start coming down.

In Praise of Tweakers: Why Gladwell Is Wrong About Jobs

If I have seen a little further, it is by standing on the shoulders of giants.
Isaac Newton to Robert Hooke, 1676

Portrait of Isaac Newton
Sir Isaac Newton

In a New Yorker essay on  the career of Steve Jobs,  Malcolm Gladwell dismisses the idea the Jobs was a visionary. Instead, Gladwell writes, drawing heavily on Walter Isaacson’s biography, “he was much more of a tweaker.”

In defining Jobs’s career, Gladwell is mostly right, though I don’t think “tweaker” is an adequate word. Jobs’s genius was to to take ideas he found floating around and make them much, much better.

Where Gladwell is wrong is in his analysis of the inventive process. Those he calls visionaries, the person who “starts with a clean sheet of paper, and reimagines the world,” hardly ever come along. And those who do often end up forgotten, as in the case of of Gladwell’s prime example, Samuel Crompton, inventor of the spinning mule.

Consider Isaac Newton, a true scientific revolutionary but one who would have to be classed as a “tweaker” in Gladwell’s taxonomy. Newton did not suffer from false modesty; he carried on a decades-long feud with Leibniz over primacy in the development of the calculus. But he knew that he was building on progress in mathematics from Archimedes to his contemporary John Wallis and on the astronomical breakthroughs of Copernicus, Tycho Brahe, and Johannes Kepler. Similarly, Einstein’s relatively revolution is impossible to imagine without the physics of James Clerk Maxwell and Hendrik Lorentz or the mathematics of Henri Poincaré and Hermann Minkowski.

Or the computer itself. The computer,  which truly has no inventor, was born when several streams of invention coalesced in the cauldron of World War II: A long history of tinkering with mechanical calculating devices from Pascal to Babbage; the theoretical mathematics of Alan Turing and John von Neumann; the development of electronics to replace mechanical devices; the engineering genius of John Antanasoff, J. Presper Eckert, John Mauchly, and others; and a flood of government funding.

The fundamental problem with  Gladwell’s approach is that there are no clean sheets of paper, and perhaps no visionaries as Gladwell defines them. Everyone inherits the world as it is. The geniuses are the ones who can take that and turn it into something much better.