The Kindle Fire and Nook Tablet Will Not Slow the iPad

Philip Elmer-DeWitt reported on the Fortune blog about data released suggesting the potential impact of the Kindle Fire on iPad sales. The data originated from ChangeWave and points out several key findings from their survey of “early adopter types.”

  • 5% of those surveyed said they had pre-ordered or were very likely to buy Amazon’s new Kindle Fire, exceeding the 4% who said they were very likely to buy the original iPad in 2010.
  • 26% of those 5% said they would delay or put on hold the purchase of a new iPad.
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    I have to question the FUD this data is causing for a number of reasons. First of all the survey was conducted with early adopters (early adopter types actually whatever that is). Early adopters are not the mass market and nor do they represent the mass market. Early adopters shop for technology with a very different mindset than mass market consumers. Because of that it is hard to use data only taken by early adopters.

    Taking the data one step further only 5% surveyed said they pre-ordered or were likely to buy the Kindle Fire. If we do the math, 5% of the 2,600 early adopters types they surveyed means 130 people out of 2,600 said they pre-ordered or were very likely to buy the Kindle Fire. Keep in mind these are early adopters and I’m guessing most if not all of those 2,600 surveyed owned iPads.

    Now 26% of the 130 (5%) said they would delay or put on hold the purchase of a NEW iPad. That means 33.8 people of the 2,600 early adopters surveyed said they would delay or put on hold the purchase of a NEW iPad. When we look at the data under that lens the headlines becomes less ominous for the iPad.

    Now I do expect both the Kindle Fire and the Nook Tablet to do well. However, the fundamental difference is that those two products are competing with each other rather than with the iPad.

    Brooke Crothers at CNET provided research from eDataSource that stated preorders of the Kindle Fire were tracking to exceed one million. I have seen a number of credible reports forecasting Amazon to sell 4 million Fire tablets during the quarter. Most recently the DigiTimes today reported that Amazon has upped their orders to 5 Million due to demand.

    Both those numbers are plausible but the point needs to be made that those customers are either early adopters or customers who were in the market for a Kindle in the first place. I have a hard time believing that mainstream consumers (not early adopters) who were strongly considering an iPad have changed their mind and now going with the Kindle Fire or Nook Tablet.

    IDC’s forecasts for readers in 2011 are 16.2 million, I actually believe that is low, this category is still hot with a lot of consumers. My point, however, is that those consumers in the market for ereaders like the Kindle and the Nook are not in the market for iPad’s, yet at least.
    I’ll end my take on this data with this. Brooke also quoted a separate report today from Rodman & Renshaw’s Ashok Kumar claiming that iPad momentum is slowing. Asok stated:

    “Our checks indicate that production volumes have been scaled back due to moderating sell-through. We estimate that iPad volumes in the current quarter will be 12-13 million units, down from previous estimates of 14-15 million.”

    I think he is wrong but even if he isn’t that would still be more iPads in a quarter than Apple has sold before still putting them over 30 million iPad’s sold in calendar, not fiscal, 2011. That’s still a lot of iPads.

    [VIA Fortune, CNET]

    Mobile Flash: Adios and Good Riddance

    Flash icon

    UPDATE: Adobe has confirmed the end of mobile Flash development.

    Jason Perlow at ZDNet is reporting that as part of a restructuring announced yesterday, Adobe is ending development of its Flash plug-in for mobile browsers. If true, and the story seems well-sourced, this marks the end of one of the silliest tech controversies in recent memory.

    The dispute was triggered, of course, by Apple’s refusal to support Flash on iOS devices and  by Steve Jobs and other Apple executives steadfastly supporting native HTML 5 over the Adobe technology. Some commentators viewed the lack of Flash would doom the iPad. Google and makers of Android phones and tablets claimed the ability to run Flash as a huge competitive advantage. An Adobe executive claimed the only reason Apple was keeping Flash off its products was to prevent Flash-based services like Hulu from competing with iTunes.

    There was only one problem with the argument. Flash never actually worked on mobile devices. It was buggy, stuttery, and a huge resource hog. Beyond Flash video, the mouse-centric interface of flash applications never worked right on touch displays.

    Somehow, the problems of Flash were always going to be fixed in the next version of the software, or with 16-core processors, or something. But while mobile Flash got better, it never got good, and Adobe now seems to be facing up to inevitable: Steve Jobs was, as was so often the case, right. Flash was the wrong technology for mobile.

    The impending death of Flash deprives Android of a marketing claim. But anyone who bought an Android phone or tablet to enjoy the pleasures of flash was mostly the victim of exaggerated, if not outright false advertising. We’re all better off without it.

    How Close Are We to Steve Jobs’s Apple TV Dream?

    The latest edition of Jean-Louis Gassée’s always stimulating Monday Note takes a highly informative look at what Steve Jobs may have meant in this comment to biographer Walt Isaacson that he had “cracked” the TV user interface. A key, Gassée speculates, is the idea (which he credits to Daring Fireball’s John Gruber) of channels-as-apps.

    Old TV with Apple logoI remain skeptical, probably more so than Gassée, about Apple’s intentions of getting into the TV display business. But I have no doubt about their ability to–eventually–revolutionize the TV business by building the ultimate TV content controller, whether it is integrated into a TV or in a separate box connected by a single cable. And it’s the business, not the technology, that’s the problem.

    The key, as usual these days, is the iPad. First, an observation. To the extent that people want interactive content while watching TV, whether it’s stats during a sports event or cast information in a movie, I am not at all sure they want it on their TV display. Directors, whether of movies or football games, do an excellent job of putting the images you want to see on the screen  (and stations already mess it up with ugly irrelevancies like promos for other shows.) There isn’t any spare real estate.

    But an iPad–it could be another tablet but Apple is way ahead in this game–makes a wonderful auxiliary display both for extra content and for navigation. The trick is integrating it properly with the TV or set top box, so you can get that cast info without having to go to a separate IMDB app.

    A lot of this might be possible with the equipment, even the miserable set top boxes supplied by cable companies, we have today. My iPad already can control my TV, my experience with Verizon’s FiOS remote app being happier than Gassée’s with Comcast. What it mostly needs is a completely redesigned user interface that does better than mimicking the existing on-screen displays.

    Even better. my iPad “knows” what I am watching, even without help from Verizon. Yahoo!’s Into Now app does an amazing job of identifying what content your TV is tuned to. All we need is the software glue to connect the pieces.

    If the cable companies and their allies in the content business were smart–a large if–they would be racing to enable this new world by disrupting their own business before someone else, like, say, Apple or perhaps Google, does. It requires will, not rocket science.

    What the Mac OS X Sandbox Means to Users

    There has been considerable unhappiness, even outrage, in the developer community since Apple announced that as of next March, all software sold through the Mac App Store would have to run in a sandbox, that is, its access to system resources would be restricted, the exact restrictions based on the type of program.

    “Why the Mac App Sandbox Makes Me Sad,” wrote OS X developer blogger Pauli Olavi Ojala. “Apple’s Mac OS Lockdown To End Developer Independence,” screamed a headline on Forbes.com, though the article, by Roger Kay, was more reasoned in tone.

    I’m sure Apple’s new restrictions will make life harder for App Store developers, and they may have to choose between the easy distribution offered by the App Store and the greater programming freedom of delivering their software the old fashioned way. But to consider this from the users’ point of view, ask yourself a question: What do most people like better, their computer or their iPhone or iPad?

    My guess is that if you asked 100 people who used both a computer and an iOS device which they were happier with, 90 or so would vote for the iPhone or iPad. Mac owners probably hate their computers a little less than Windows users. But both types of systems have the same problem: They are full of software, often poorly written and poorly tested. that can cause all manner of mysterious, frustrating problems. This has gotten better over the years, but as long as there are atrocities such as the Adobe Flash plugin for Chrome, to pick an example not at random, there’s going to be trouble.

    One thing Apple has learned from iOS as that a tightly controlled software environment is one way to produce a great user experience. iOS apps rarely crash and when they do, they don’t else with them.The arrangement is much more secure because apps’ access to the system is so limited.Yes, the sandbox can cause some frustrations for users. The restrictions on apps’ access to each other’s data is one  reason why document handling is such a pain on an iPad, for example. But I find it a price worth paying. And if the sandbox policy makes Macs more iOS-like in this sense, users will love it.

    One very important caveat: My views on this would change dramatically if Apple were to restrict users’ ability to load any apps from outside the App Store, as they do for iOS. For people who use their Macs as creative tools, the sandbox’s restrictions could be a crushing burden; they almost certainly would for anyone who writes software, which is why Apple won’t restrict their freedom.

    Apple does have a tendency to be heavy-handed  in its administration of rules, so I’m sure there are going to be some problems. But many of the fears seem to be to be vastly overblown. Roger Kay, for example, writes: “The longer-term consequence?  A lack of innovation in consumer software.” The fact is that iOS, for all of its restrictions, has produced an outpouring of highly innovative software, putting iPads and iPhones to uses that I am sure Apple never imagined.

     

    The iOS and Android Mobile Web Disparity

    There are two interesting data points released that I think is worth asking some questions. The first comes from Net Applications and it plots out mobile web browsing OS share by platform. The full chart is below.

    What strikes me in this chart is the clearly dominant iOS platform when it comes to mobile web browsing over all platforms. It needs to be pointed out that Net Applications is tracking iPhone, iPad, and iPod touch but also all Android phones and tablets. We know there are now well more than 250 million iOS devices in the market so there is a clear lead in volume over Android. However, at the same time we know that Android is growing explosively fast. Even with the Android explosive growth it seems that Android customers are still not nearly as heavy web browsers as iOS consumers.

    One other point on the Net Applications chart is that since it does contain iPad, and we know iPad is rapidly climbing the charts with web browsing share on its own, then we need to also look at a similar chart without iPad. That is exactly what StatCounter provides us with.

    In the chart below we see a picture of web browsing OS share with only hand-held devices, so not including tablets.

    This shows a very close picture of iOS to Android hand-held only browser share but still showing iOS in the lead. Still interesting that iPhone and iPod touch account for more web browsing than all Android smartphones in the market. So again it appears that even with hand-held devices iOS consumers browse the web more than Android consumers.

    I have a few observations.

    First iOS is a superior web browsing experience. Having used both platforms quite a bit I can attest to this fact that the web browsing experience on iOS is better than on Android.

    Android consumers are using more apps than browsing the web. This has come back true from many of our Android consumer interviews. They use more of the native apps for search, Facebook, Twitter, etc and conveyed to us that general web browsing is less of a use case for them. This again will vary between power user and average consumer, but still true in a general sense.

    iPad is poised to become one of the most dominant web browsing platforms. I have not been shy in proclaiming how touch computing and the tablet form factor is the computer for the future. I’ve also stated that in my opinion web browsing is better on a tablet than on a PC. When we look at the Net Applications chart, which includes iPad, we see how wide the gap with iOS is when the iPad is counted in mobile web browsing. This is an incredibly significant trend and one that should concern Google.

    Overall all Google still gets a serious chunk of revenue from iOS devices when it comes to mobile search. The fact that in iOS 5 consumer can change their search engine preference should concern Google greatly.

    Every company in mobile search needs to understand this data. It demonstrates how tablets are not only more than a fad but how important they are to the mobile web of the future.

    [Other Good Articles VIA BGR, Fortune, SlashGear,GigaOM]

    Apple is Still the #1 Smartphone Vendor

    There has been quite a bit of interesting media and headlines this last week pointing to data related to Samsung’s latest earnings and smartphone shipments. Many are making the claim that Samsung is now the number one smartphone vendor by volume. However, when we dig deeper into the numbers we find a different story.

    First (something that shockingly needs to be continually pointed out), the numbers released in Samsung’s earnings of 27.8 million smart phones shipped is product shipped into the channel not sold to consumers. In reality the carriers stores are Samsung’s customers since their goal is to sell phones to carriers who then try to sell them to consumers. This is called having a channel strategy, something Apple does very differently due to their rather large retail presence. Another differentiating point regarding numbers is that Apple actually releases the number of products sold to consumers where many other companies do not.

    Second, the statement that Samsung is the largest “shipper” of smartphones can only apply to Samsung’s Q3 for 2011 not per annum. Apple still sells annually more smartphones than any other manufacturer.

    It is tough to say exactly how many smartphones Samsung “shipped” into channel in 2011 to-date since they did not disclose smartphone shipment data in their Q2 earnings. That being said I’ve seen credible attempts to break down estimates and the most logical number I have found for “shipments” into channel from Samsung thus far in 2011 is 50.2 million. In that same period (since January of 2011) Apple SOLD 56.09 iPhones. This is why I am confident Apple is still the number one smartphone vendor. One last point here, we believe Apple will SELL north of 25 million iPhone’s (conservatively) in this upcoming holiday quarter.

    We need to be much wiser if we are going to make headlines with market share claims. I understand to many market share is a big deal but I don’t believe it is as big a deal as people make it out to be.

    Henry Blodget of Business Insider makes a point that I disagree with. In his column on why Apple should be worried about this Samsung data he states:

    As the history of the tech industry has demonstrated again and again, technology platform markets tend to standardize around a single dominant platform. Although several different platforms can co-exist while a market is developing, eventually a clear leader emerges. And as it does, the leader’s power and “network effects” grow, while the leverage of the smaller platforms diminishes.

    I don’t disagree that Henry’s observation is true, I simply don’t believe it will be true in the future. The flaw in this observation is that it is only true when a new product, technology or market begins and moves to maturity. As a market matures, it is true that a standard emerges. This standard helps drive the market to maturity. Once the market matures however it becomes saturated with many variations and departures from the standard.

    For Henry’s statement to have absolute truth we would need to look farther back than just the technology industry to ALL consumer products. If we do that we find that what I pointed out is always true. Once a market matures it fragments and thus there is no longer a dominant market leader. Study consumer packaged goods, automobiles, consumer appliances and more and you will find this to be true.

    This is why I am confident that Apple, Android and most likely Windows Phone will all compete for market mobile share but there will be no dominant leader like there was when Microsoft had 98% Windows share. That future will not happen, as all three platforms will co-exist and each have chunks of the market to themselves.

    Smartphones are 5% of global handset shipments world-wide. If we think that this game is anywhere close to being over we would be deceiving ourselves. We have a long journey ahead and one hopefully filled with tremendous competition, because when that happens consumers always win.

    Dan Lyon’s Newsweek discussion with Steve Jobs’ Biographer Walter Isaacson

    One of the best tech writers I know is Dan Lyons also known for his Fake Steve Jobs column that over the years that comically portrayed Steve Jobs blogging about his views of life and tech. Earlier this week, he posted a piece on the Daily Beast of his talk with Isaacson about the book and more importantly, Isaacson’s personal views about Steve Jobs. It is such a good piece and one that gives even greater insight to Steve Jobs than comes from the book itself, that I wanted to bring it to our reader’s attention.

    I give you the first few paragraphs of the article and then a link for the full article that I highly recommend you read as it really captures a perspective about Jobs that is important for us in the tech world to understand.

    Dan Lyons with Walter Isaacson on his impressions of Steve Jobs
    Walter Isaacson’s new biography of Steve Jobs is the smash-hit book of the year, but Isaacson is dismayed that so many journalists writing about the book (myself included) have latched onto the anecdotes about Jobs behaving like a monster to the people around him, without setting those anecdotes against the larger picture of everything that Jobs accomplished in his life.

    “You have to judge people by the outcome,” says Isaacson, the former editor of Time magazine who has written bestselling biographies of Benjamin Franklin and Albert Einstein and who is also president and CEO of the Aspen Institute, a nonprofit focused on education issues.

    “In the end, Steve Jobs had four loving children who were all intensely loyal to him and a wife who was his best friend for 20 years. At work he ends up with a loyal professional team of A players at Apple who swear by him and stay there, as opposed to other companies that are always losing good talent. In the end he was an inspiring person. He inspired loyalty and real love. So you judge him by that.”

    Also worth noting, Isaacson says, is that when it came to tough talk, Jobs could take as well as give. Jobs respected and even rewarded people who would argue with him. “In the early days at Apple they used to give an award to whoever stood up to Steve the best,” Isaacson says. “Those people often ended up getting promoted.”

    For the balance of the article you can read it here.

    The Slow, Sad Death of webOS

    Sad face TouchPad

    When Hewlett-Packard killed off TouchPad and Pre hardware in August, executives said that the webOS software that powered them would, somehow or other, be kept alive. At the time, I was skeptical if for no other reason than that HP would have a terrible time hanging on to key tallent while the future of the software was being resolved. Sadly, that prediction is coming to pass.

    The latest blow to what little future webOS may have is the departure of Richard Kerris, head of developer relations for the (now defunct) webOS Global Business Unit, who is taking on a similar role at Nokia. The success of a mobile operating system is heavily dependent on the work of third-party app developers and the shortage of webOS apps played a significant role in the platform’s failure. At the end of August, Kerris had been at least guardedly optimistic about the future of webOS.  “Once we come out with the right hardware partner, which we will announce, we’ll be fine,” he told me.

    But soon thereafter, HP broke up the webOS business unit, laying off most of the staff and transferring responsibility for the software to the corporate office of strategy and technology. But that office will cease to exist Nov. 1 with the retirement of Executive Vice President Shane Robison.

    At this point, it seems extremely unlikely that much of anything can be salvaged from the webOS debacle. HP might find a buyer for a pile of code and whatever intellectual property rights its acquired from Palm, but it no longer seems to be much of a going concern.

    This looks like the last chapter in the strange history of Palm software. Back in 2006, PalmSource,  the struggling company that had been set up to develop and license Palm software after the original Palm was split into software and hardware pieces, sold itself to Access, a Japanese software company. Access had planned to rewrite the Palm software, then used in the pioneering Treo smartphones, on a Linux base. Both nothing ever came of the project and Palm OS, like it would seem, webOS, was never heard of again.

     

    Say it “Ain’t” So: Google Kills the Plus Sign

    News comes via Search Engine Land that Google has up and killed the “+” operator in searches. From the beginning of search, or at least from the beginning of Google, putting a plus sign in front of a word in a search has meant that only result including that exact word should be returned.

    But in an Oct. 22 post on the Google web search help forum, Google Kelley F. said:

    We’ve made the ways you can tell Google exactly what you want more consistent by expanding the functionality of the quotation marks operator. In addition to using this operator to search for an exact phrase, you can now add quotation marks around a single word to tell Google to match that word precisely. So, if in the past you would have searched for [magazine +latina], you should now search for [magazine “latina”].

    We’re constantly making changes to Google Search – adding new features, tweaking the look and feel, running experiments, – all to get you the information you need as quickly and as easily as possible. This recent change is another step toward simplifying the search experience to get you to the info you want.

    I fail to see how this makes anything simpler or more consistent. For one thing, -, formerly the complement of +, remains the exclusion operator. A hyphen (not strictly speaking a minus sign) in front of a word means that any result containing that word should be excluded from the results. Plus and minus do seem to be a natural pair, and there’s no good reason for Google to break up the set.

    One theory floating about is that Google killed the + operator to avoid confusion with the Google+ social network.  But user interface changes should only be made when they make things easier for users, and this one makes life a bit harder. And even with the change, there is no way to search for the + symbol. Searching for either + or “+” returns no results, while searching for “+1” returns more than 25 billion results including the numeral 1.

    As Search Engine Land’s Danny Sullivan says, Google’s move “goes against 15 years of how search engines have operated, where quotes are used to find exact phrases. Now all those references across the web have become outdated, for no apparent reason other than maybe Google picked a name for its social network that wasn’t searchable.”

    iPad’s Market Share Will Crater, but You Shouldn’t Care

    Research firm Strategy Analystics got some attention with a report that showed Android accounted for 27% of the tablet market in the quarter ended Sept. 30. The report raised a lot of eyebrows.Kevin C. Tofel of GigaOm did some digging and found two significant issues with Strategy Analytics’ methodology.

    Kindle Fire photo
    Amazon's Kindle Fire

    First, the Android numbers are for tablets shipped into the channel, not necessarily those sold, while Apple reports only actual sell-through. Second, the firm used a very broad definition of Android tablets. In particular, it included Barnes & Noble’s Nook Color. This is technically correct, but I’m not sure that a market that stretches from the iPad to the Nook is very meaningful.

    By this standard, iPad’s market share is about to get a whole lot worse. Next month, Amazon.com will begin shipping the Kindle Fire, and all indications are that sales will be strong. Like the Nook, Fire runs a customized version of Android and if it is counted among Android tablets, their sales volume and market share will likely swell in the fourth quarter and beyond.

    The number will undoubtedly set off a new round of speculation about what Apple must do to defend iPad’s market share. The correct answer is nothing, other than to produce the best product at the best price it can, consistent with its business strategy.

    Apple does not care about market share and never has. It cares about absolute volumes and profit margins. And this has been a phenomenally successful business model that Apple should not and will not change. The history of the tech industry is littered with the corpses of PC makers that died chasing market share. Anyone remember Packard-Bell and AST? Dell and Hewlett-Packard nearly destroyed themselves chasing share at the expense of profit and Acer seems to be pulling back from the same fruitless race.

    So Apple will serenely watch its share of whatever analysts choose to define as the tablet market inevitably decline as long as iPad volumes continue to grow and profit margins stay healthy. I think that the Kindle Fire and the likely successor to the Nook Color can both do very well without having a material effect on iPad sales. And everyone should just stop fretting about the meaningless market share numbers.

     

     

    How iCloud is Like Amazon’s WhisperSync

    One of the interesting features I am picking up on iCloud is not the usual data syncing but how some apps are integrating iCloud. A good example of this is with games that are built to support iCloud.

    Games or apps in general that are built or updated to support iCloud bring with them the ability to know where the consumers last usage point was and let them pick up where they left off on other devices.

    This is a feature similar to Amazon’s WhisperSync with e-books, also a feature built into iBooks now, that lets you pick up where you left off of any book on whichever device you choose.

    Clearly there is a great deal of value to the consumer to be able to use the same app on multiple devices and always be able to pick up where they left off. Some apps, like games for example, this is more practical for but I expect developers to find more creative ways to use iCloud app syncing in the future.

    What is strategic about this for Apple is that this feature begins to become more valuable the more iOS devices you have.

    If all I had was my iPhone then I would never be in a position to use the app on any device but my iPhone. Therefore, the need for apps to sync my last position isn’t all that necessary. This feature becomes more valuable, as does iCloud, the more iOS devices I own. The more possible devices I have in my personal ecosystem the more something like iCloud becomes valuable.

    The game experience has been extremely useful and for the time being has encouraged me to play more games knowing I can pick up where I left off on another iOS device. This is the case in many times where as I play a game on iPhone and then when I get home I want to play the game on my iPad.

    I can see value in this with music and perhaps video also. Suppose I was watching a TV show at Starbucks on my iPhone, because it was the only screen I had with me, then when I get home I want to pick it up where I left off on my iPad. I can see a great deal of value in that experience.

    Given that iOS and iCloud are so new, I imagine that over time we will see these experiences get better and more comprehensive.

    In many ways we are just scratching the surface with the personal cloud concept and I am excited to see where it goes.

    How Amazon’s Silk Will Treat Your Privacy

    Debates in tech land all too often degenerate quickly into name-calling cat fights among partisans. So it’s rare, and gratifying to see two sides naturally skeptical of each other engage in a dialogue that actually enlightens rather than inflames.

    The Electronic Frontier Foundation,  reflecting the views of many privacy advocates, raised concerns about the amount of personal information Amazon.com might capture from users of the Silk browser in the new Kindle Fire. Amazon has responded  in detail and the analysis of the response by EFF not only goes a long way toward allaying those fears but serves as a model of how this sort of dialog should work.

    Silk bothered privacy (and security) advocates because everything entered into the browser in its default mode passes through Amazon’s servers, allowing Amazon to capture vast amounts of personal information. This is done to let most of the heavy lifting of rendering web pages be done on Amazon’s servers, allowing   a much faster browsing experience.

    In its response to EFF, Amazon made several key points:

    • A setting on the first page of Silk preferences will let users bypass Amazon;s servers, trading privacy for performance.
    • All encrypted sessions  (anything with an HTTPS address) will link Silk directly to the remote server, bypassing Amazon. This means that Amazon will not see usernames, passwords, and other sensitive information from secure sessions.
    • The amount of user information logged will be limited and logs will be retained for only 30 days. Amazon told EFF that there is no way to associate logged information with a specific Amazon account.
    EFF still has some concerns about the amount of data Amazon can collect and the danger that aggregated data might still be linked to specific individuals. But, EFF said in its conclusion, “We are generally satisfied with the privacy design of Silk, and happy that the end user has control over whether to use cloud acceleration. But this new technology highlights the need for better online privacy protections. As companies continue to innovate in ways that make novel uses of–and expose much more personal data to–the internet cloud, it’s critical that the legal protections for that data keep up with changes technology.”
    Amazon could have saved itself a bit of trouble by releasing this information earlier, but since Fire won’t ship until next month, no damage has been done. Kudos to both Amazon and EFF  for bringing out this important clarification.

    Nook Color Users Like Apps–And Pay for Them

    Owners of the Barnes & Noble Nook Color e-reader/tablet don’t just buy books. They also consume apps, quite few of them, it seems.

    Nook Color photoThe buying habits of Nook Color owners are a bit surprising, and that could have interesting implications for Amazon.com’s  forthcoming Kindle Fire. Both the Nook Color and the Fire are highly modified Android tablets that identify themselves primarily with their retailer sponsors, not Google and Android. And both are connected to their own dedicated app stores, not Google’s Android Market.

    “Our customers are used to buying content,” says Claudia Romanini Backus, a tech industry veteran who serves as director of developer relations for Barnes & Noble. That is a contrast to other Android products, whose owners have developed a reputation for having a fierce appetite for apps, as long as they don’t actually have to pay for them.

    I had a chat with Romanini at the CTIA Enterprise & Applications show, where B&N was appearing for the first time. Compared to the typical Android customer, the typical Color buyer is far more likely to be female (women buy about 75% of the units) and older. The tablets are bought primarily as book readers and users begin to download apps when they realize that the Nook can do more.

    About 9 of every 10 apps downloaded are paid, with the typical price at $2.99. However, a surprise best-seller is the most expensive item in the catalog, the $14.99 QuickOffice, which allows both viewing and editing of Microsoft Office documents. Other big sellers are games, including the several variants of Angry Birds; apps aimed at children, including iStory Time from DreamWorks; and educational apps. Productivity apps are surprisingly popular, with the free Taptu news reader being a popular download.

    “We’re doing something unique and different from mobile,” says Romanini. “It’s not about the apps. It’s an additional way of consuming content. What differentiates us is that we come at it as reading first.”

    Can Smart Radios Save Us from Spectrum Stew?

    SpectrumI’ve been hearing about smart, also known as agile or software-controlled, radios for what seems like 20 years now. The idea is to use software rather than hardware to control transmit and receive frequencies so that a single radio could operate on a broad swatch of spectrum instead of a few narrow bands–and perhaps also use software to control multiple radio protocols. Given the proliferation of frequencies and technologies being used for wireless data, it’s an idea whose time should be now.

    Sprint’s wireless broadband announcement today added to an already complex picture. Sprint operates its basic CDMA/EV-DO network nationwide at 1900 MHz and offers WiMAX from Clearwire in selected markets at 2500 MHz. Today it announced that it will begin deploying 4G LTE on its 1900 MHz network and add 800 MHz service as it retires the Nextel network that currently uses that band.

    Meanwhile, Verizon wireless runs CDMA/EV-DO at 800 and 1900 MHz and LTE at 700. AT&T offers GSM/HSPA at 850 and 1900 and is deploying LTE in the 700 MHz band.  Just to be different, T-Mobile runs GSM/EDGE at 1900 Mhz and HSPA at 1700 and 2100 Mhz. In case you lost count, that’s four carriers, seven frequency bands, and four fundamentally different radio technologies.

    In most of the rest of the world, things are a lot simpler. Most carriers provide GSM and EDGE at 900 and 1800 MHz and HSPA at 2100. 4G plans, however, are literally all over the place.

    I’m not sure it’s possible to build a phone that covers all bases with today’s technology, especially given the pressure for ever-thinner handsets. Its Qualcomm dual-mode radio provides CDMA/EV-DO at 800 and 1900 MHz,  GSPA and 850, 900, 1900, and 2100 MHz, and GSM/EDGE at 850, 900, 1800, and 1900 Mhz.  No wonder they left LTE out of this edition.

    Unfortunately, smart radios seem to be one of those technologies that always remain a couple of years away from prime time. Given the proliferation of frequencies and technologies, they can’t come too soon.

     

     

    Does Google Need a New Strategy with Android?

     
    I believe Google is coming to a cross roads with Android. The reality is that we live in a software world. Hardware design is nice but software is what makes our devices useful.

    Steve Wildstrom wrote an article asking the question about whether Android was a mistake for Google. I don’t believe Android is or was a mistake for Google, however I do believe they need a more hardware centric strategy.

    Several things have happened and are continuing to happen around Android that leads me to believe a better strategy can be employed.

    The first is that companies, Amazon namely, have taken what Google created as a base OS in Android and fully customized it stripping all benefit to Google.

    Originally Google encouraged this idea of customization of Android for vendor differentiation. However things changed as Android began to become more popular and enginners realized scaling a truly open platform would be difficult.

    At the turning point for Android, which I believe was 2.2 or Froyo, Google began to attempt to control Android more tightly thus making it harder for hardware partners to customize Android and differentiate their products. Google began to promote and encourage a non-customized version of Android to their hardware partners. Their Nexus line of devices are the evidence of what Google wants to see happen with Android hardware. Namely that the hardware is good but the software all looks the same.

    Those who make Android hardware whether they be tablets or smart phones are longing for Google to help them differentiate their hardware. Because of the many restrictions Google is putting on Android devices get lost in the sea of sameness.

    Because of that vendors like Amazon, or entire countries like China, have taken the basic Android code and made it their own completely separate from Google’s version of Android.

    This is important because Google created Android as a software front end to their services. When a company takes the basic code but strips it from using Google’s services, the custom implemenation loses all benefit to Google.

    The other market development that could impact Android is vendors seeking their own software solutions. An example of this is what Intel and Samsung are backing with Tizen. I am skeptical of Tizen however the fact that a key Android partner, like Samsung, is putting resources into a solution other than Android is not a good sign.

    So What Should Google Do?
    What Google needs to do, and I think they need some serious help to do this, is to figure out how they can work with their hardware partners to differentiate their Android solutions but still utilize Google services.

    Now in the case of Amazon even if Google had an Android differentiation startegy I don’t think Amazon would have used it. Amazon is also a services company.

    The rest of the market however would benefit from a Android strategy that allowed for differentiation but also still tightly integrated Google’s services. I don’t believe we will see this kind of solution in Ice Cream Sandwich, where Google allows for heavy customization. This is a real issue that Google needs to address with coming versions.

    I’ve wrote extensively about product differentation and I will continue to but what we have right now with Android is the sea of sameness. That needs to change if companies want to stay in business.

    This same problem exists for Microsoft but that is for another article.

    Recommended Reading:
    Dear Industry: Dare to Differentiate

    There Already Is a Cheap iPhone

    Image from Apple invitationThe oddest thing about the rumors bubbling around Tuesday Apple media event is the speculation about a “cheap” iPhone. Gizmodo, for example, published blurry pictures of quality-control rejects from Foxconn’s new plant in Brazil as “proof” of the imminent new cheap iPhone.

    We know very, very little about the new hardware that Apple will announce; after losing an iPhone 4 prototype the last time around, Apple has done an even better than usual job of controlling leaks this time. But we can be very sure of what the “cheap” iPhone will be.

    Apple’s practice for iPhone releases has been to keep the one-back model in the lineup while introducing a new phone as the premium product. At AT&T today, you can buy a 16 gigabyte iPhone 4 for $199 or an 8 GB iPhone 3GS for $49 (Verizon only has the iPhone 4 because there never was a CDMA version of the 3GS.)

    So whatever the new iPhone model is and whatever it is called, we can expect the 15-month-old iPhone 4 to continue to be available, at sharply reduced prices. Maybe Apple will shave the price a bit by offering an 8 GB version, maybe not. But Apple has already said that the new iOS 5.0 software will run on the older iPhone, so it could be an attractive buy.

    What if Amazon Bought webOS?

    MobileBeat has an interesting article this morning reporting that Amazon is apparently in talks to buy webOS from HP.

    Credit MobileBeat
    Although this deal could make a fair bit of sense I don’t see the immediate need for Amazon. If they were to purchase webOS it would obviously be fully own the OS layer for their hardware and as I’ve speculated their hardware partners. Amazon however has customized Android to a degree that is basically their own custom operating system. So what they would get in webOS they basically already have with their fork of Android. Android has a thriving developer community already that can easily tap into the Amazon tablet where webOS is still attempting to gain traction with developers.

    It is interesting though, as MobileBeat is reporting, that Jon Rubenstein is on Amazon’s board. If HP truly was considering selling of the webOS technology Jon would know and be in a position to find it a good home, in which Amazon would be a good home.

    If HP is wanting to sell of webOS I agree with James Kendrick at ZDNET that HTC should buy it. So if this rumor is true, I hope it is not a back room deal but one that HP offers to others in the market who could also benefit greatly from webOS.

    If Amazon were to acquire webOS then it would solidify in my mind that they intend to license or give away their OS layers so other hardware manufacturers can make hardware build around Amazon’s services.

    Is There a Technology Race to the Bottom With Price?

    I have been surveying the collective schools of thought related to the Amazon Kindle Fire launch. One thing that many writing publicly on the matter emphasize is the price of the Fire and rightly so. $199 is an aggressive price but I would argue that price is not everything when it comes to personal technology.

    Those that incorrectly believe the Kindle Fire is a threat to the iPad use words like commoditization of hardware. Again the common logic is that because one competitor comes in at a lower price it will force the market down. This however is entirely incorrect.

    There will be some who try to compete on price with Amazon however they will likely fail and either lose a ton of cash attempting to compete or exit the tablet market entirely.

    Apple however has no need to get more aggressive on price with any of their products.

    Related Articles:
    Apple Doesn’t Want to Sell Corollas
    Why Apple Can’t Chase the Low End

    What is key to understand is that if Amazon did not have a robust services business as a retailer and distributor of digital media the Kindle Fire would not be successful even at $199.

    This statement is made clear in Jeff Bezos quote to Brad Stone in his Business Week Article.

    “What we are doing is offering premium products at non-premium prices,” Bezos says. Other tablet contenders “have not been competitive on price” and “have just sold a piece of hardware. We don’t think of the Kindle Fire as a tablet. We think of it as a service.”

    I have said before that the Kindle is to Amazon what a retail store is to Wal-Mart. The Kindle represents access to Amazon’s services.

    That philosophy is made clear when Bezos states that they don’t view the Kindle as a tablet but instead as a service.

    This backs up my point that without the backing of the Amazon services the tablet would fail even at $199. Subsidizing hardware in order to make up revenue on the services is a strategy employed by many. However it only works when a service powers the hardware.

    What Could Really Change the Game
    I’ve had this discussion lately with a few other analysts around whether or not Amazon ultimately wants to be in the hardware business. Right now they have to in order to gain market momentum and validate their service with hardware.

    What could be very interesting is if Amazon gave away or licensed their software for other tablet vendors. This would allow for hardware innovation in and around Amazon’s ecosystem. If the business model panned out Amazon could even include hardware partners in the services revenue over time. Amazon already has revenue sharing business models in place so this is not a stretch to imagine.

    Amazon does not have the desire or expertise to make extremely elegant hardware. Which is why it is interesting to think about the possibility of letting those who have hardware expertise design some innovative hardware around the Amazon software and services platform.

    Like Google, Amazon is a services company who thinks about hardware and software as a way to access their services.

    The other thing this strategy would do is put pressure on Google with Android. If Amazon’s Android fork can provide a better experience and economics for hardware partners and developers Android could be in trouble.

    Price is important but I contend it isn’t everything. Just because products are cheap it doesn’t mean they are quality in all aspects of experience.

    We will see what the reviews have to say once they actually get to review the Fire. My sense though is that everyone will make a bigger deal of the experience with the Amazon services over the hardware.

    AWS: Amazon’s Secret Weapon

    Most consumers think of Amazon.com as a company that sells books and a whole lot of other stuff. But it is also a deep technology company that has turned its technology both into a product and a big competitive advantage.

    Amazon Web Services is a vast online computing infrastructure that Amazon both uses itself and sells to others. AWS began in 2006 as a way for Amazon to sell surplus storage as its Simple Storage Service (S3.) But it really blossomed when the company added Elastic Cloud Computing (EC2), which lets customers rent virtual servers.

    As AWS has expanded, it has offered increasingly sophisticated services that let companies create complete virtual data centers. Because of the ability to get up and running with no capital investment and to scale quickly and cheaply if demand takes off, AWS is immensely popular with web startups. Many established web businesses run on it as well and ithas just gotten approval for use with most unclassified federal government operations.

    The AWS user interface is something no one but a software developer should ever encounter, but the Kindle Fire can be tought of as a firendly face for the cloud services. The vast storage capabilities of S3 and the CloudFront content delivery network power Amazon’s streaming media capabilities. AWS also provides the storage and computing power that let you, for example, begin reading a Kindle book on a phone and download it to a Kindle device and pick up reading exactly where you left off.

    Others, such as Microsoft and, of course, Google, offer extensive cloud services. Apple is trying to catch up and I expect we will hear a lot more about iCloud as part of its iPhone announcement Oct. 4. But AWS’s extensive programming interfaces and Amazon’s experience in hitching its infrastructure to consumer services give it a unique leg up on the competition.

    And interesting test of just how big an advantage AWS is will come with the performance of the Kindle Fire’s Silk browser. Browsers have been the weak point of all tablets because the complexity of rendering complex modern web pages can overwhelm their relatively  limited processing power. This is why even tablets that claim to support Adobe Flash generally do so really badly.

    Silk splits the processing burden of rendering pages between the Fire and EC2, with much of the heavy lifting done in the cloud. Amazon officials were not very forthcoming about the technical details of Silk and were not very generous in demonstrations of its abilities, so I am going to reserve judgment until I have a chance for a hands-on trial.

    If it works as promised, it could be an important, unique advantage for Amazon. Among potential competitors, only Google has to sort of cloud infrastructure that is required, but Google doesn’t make devices and the structure of Android would make it very hard for it to achieve the tight device-cloud integration needed to make something like Silk work.

     

     

    Industry Collaboration Could Speed Next Generation of Chips

    Photo of Intel wafer

    At a time when the federal government can’t seem to agree with itself that today is Wednesday, it’s a good thing to see New York State  get together with the largest chip makers to spur the next generation of chipmaking. And it’s even better to see that the state’s contribution is an investment in the State University of New York rather than unproductive tax incentives.

    Under the deal, an industry consortium of Intel, IBM, Globalfoundries (the former manufacturing arm of AMD), Samsung Electronics, and Taiwan Semiconductor Manufacturing Co., will work together to develop processes for making 22- and 14-nanometer chips on 450 mm wafers. The current generation of advanced chips have 32nm components and are made on 300 mm (about 12 inches) wafers.

    In general, moving to smaller components increases capability while reducing power consumption. Manufacturing on larger wafers increases the efficiency of the fabrication process. But new processes are extremely expensive to develop, so sharing the burden among the leading semiconductor manufacturers makes sense.

    IBM and Intel will invest $4.4 billion in the project, including the opening of an Intel headquarters in Albany. The state will invest $400 million in the College for Nanoscale and Science Engineering at SUNY Albany.

    New York is not usually thought of as a leader in semiconductors. But IBM operates its major chip fabrication facility at East Fishkill while Globalfoundries is building a major new fab in Canandaigua.

    The move to 450 mm wafers will have huge implications for the semiconductor and manufacturing-equipment industries over the next several years. Moving to chips with smaller components can often be accomplished through modifications of existing equipment, but larger wafers require wholesale replacement of chipmaking machinery. The last major change, from 200 to 300 mm, took place about a decade ago.

     

     

    Reading the Signs: The iPhone and Semiotic Silliness

    Image from Apple invitationNow that Apple has ended speculation about when it will make its long-awaited iPhone announcement, pundits, deprived of any actual news, have been trying to divine the hidden meaning in Apple’s clever invitation to the Oct. 4 media event.

    The prize for most comprehensive effort goes to Prof. Helmut Weltschmertz of the Koblenz Institute of Numerology and Used Car Sales (thanks to Cnet’s Rafe Needleman for pointing it out), who found the “280” on the map icon signifies 280 new features.

    But ostensibly serious analysts didn’t do a lot better at semiotics (the science of interpreting signs, and I word that I don’t think I have ever used in a sentence before.) Piper Jaffray’s Gene Munster took time off from predicting the imminent arrival of an Apple-branded TV, to interpret the “Let’s talk iPhone” tag line in a letter to clients. “In the past,” Munster wrote (as reported by Fortune’s Philip Elmer-Dewitt), “Apple has used its invitation to include cryptic hints as to what it will announce. The phrase on this year’s invite, ‘Let’s talk iPhone’ may be a simple play on words, but may also refer to new speech-based features for the iPhone.” It’s been widely expected for a long time that the next version of the iPhone would include a considerable expansion of voice features based on its 2010 purchase of Siri and details of the voice-based “Assistant” have been dribbling out for days. So Munster’s observation is about as helpful as noting that the pin on the map represents the location of Apple’s Cupertino campus.

    Numerous soothsayers got excited about the 1 on the phone icon, interpreting it to mean that Apple would only be announcing one iPhone next week. Since Apple has only announced one new phone at each of four previous iPhone events, this seems a safe bet. Folks predicting a smaller or cheaper companion to what may or may not be called the iPhone 5 have never made a compelling case either that such a product was under development or that its development was part of any reasonable Apple product strategy.

    Actually, we have a better than usual idea of what is coming Tuesday. The iPhone’s software has always been more important and interesting than the hardware and the core new features of the next model were laid out last spring during the announcement of iOS 5.0 at Apple’s Worldwide Developers Conference. There will certainly stuff that goes beyond what was discussed at WDC, including advanced voice support and perhaps deeper Facebook integration, as suggested by my colleague Peter Lewis.

    But we have six full days until the event. Expect much breathless speculation, most of it as silly as Prof. Weltschmertz.

    Many Windows, One Login

    A post at the official Building Windows 8 blog outlines a potentially very cool feature in Windows 8. You’ll be able to set up any Windows 8 system, conventional PC or tablet, to use a Windows Live ID as a local login. That means your identity, settings, and purchased apps will live in the cloud and you will have access to all the information on any device when you log in through Windows Live.

    Of course, the devil is always in the details and we’ll have to see how well this works in practice. Security will be a particular concern, and Microsoft will have to get it right. But with data showing a sharp rise in consumers using multiple devices, it could be a winner and I wouldn’t be at all surprised to see Apple come up with a competitor through iCloud.

    Check out the blog post for all the details.

    The Amazon Tablet: Less Could Be More

    M.G. Siegler at TechCrunch has some interesting tidbits on the tablet that Amazon.com is expected to announce at a media event on Wednesday. The most interesting news, other than the name of “Kindle Fire,” is that the tablet won’t ship with a built-in email client.

    Amazon logoAssuming this is correct–and Siegler’s Amazon sources seem to be very good–it may be an interesting case of product differentiation through subtraction. When Steve Jobs introduced the iPad in 2010, he clearly positioned the device as a PC alternative for a post-PC era. It’s hard to imagine a PC alternative without a good email client.

    The Amazon tablet, however, isn’t vying for PC alternative honors. Amazon seems to view it  much more as a way to facilitate consumptions of the stuff Amazon sells, especially books, videos, and music. It is fundamentally an entertainment device, not a productivity device. And it doesn’t really need email. (If you really want email, you can always download a client app, though you’ll probably have to get it from the Amazon App Store rather than Android Market, which probably won’t come with the tablet either.)

    All of this is consistent with my notion that Amazon is interested in producing not an anti-iPad but an un-iPad. Amazon is one of the very few companies around with the heft and the smarts to, as they say in basketball, create its own shot against Apple. and the indications are mounting that this is just what Amazon intends to do.

     

    Tech.pinions: The Podcast – Week of Sept 19th 2011

    Welcome to the first installment of the Tech.pinions Podcast. Tim Bajarin, Steve Wildstrom and Ben Bajarin opine on the latest technology industry developments for the week of September 19th 2011.

    We talk HP’s firing of Leo Apotheker and appointment of Meg Whitman as CEO. 7 min 10 sec
    [powerpress URL=http://techpinions.com/wp-content/uploads/2011/09/1_1_HP.mp3]

    First reactions to Google’s senate committee hearing. 6 min
    [powerpress URL=http://techpinions.com/wp-content/uploads/2011/09/1-1-google.mp3]

    Initial thoughts on Windows 8 and what Microsoft needs to do going forward. 4 min
    [powerpress URL=http://techpinions.com/wp-content/uploads/2011/09/1_1_metro.mp3]

    Speculation and insight on Amazon’s upcoming tablet launch.6 min 58 sec
    [powerpress URL=http://techpinions.com/wp-content/uploads/2011/09/1_1_amazon.mp3]

    Listen to the whole thing in one sitting. 30 min

    Subscribe through iTunes.
     

    Will Amazon Announce the un-iPad?

    Amazon invitation

     

    Amazon.com has called a press conference for next Wednesday and all expectations are for an announcement of the long-awaited Amazon tablet. You’re going to read a lot of stupid stuff in the next few days speculating about whether Amazon can come up with an iPad killer. Pay no attention to any of it.

    Amazon is a very smart company, and one thing they are smart enough not to do is to challenge Apple on its home turf. Nor do they have to. It is important to remember that Amazon and Apple, while perhaps being the two sharpest consumer companies in the world, are in very different businesses. Apple sees content and software as a way to sell hardware, because that is where it makes its money. Amazon needs hardware as a platform for its content, because that is where it makes all its money.

    I suspect Amazon is mostly backing into a tablet business, think of it an an un-iPad, it would rather have left to hardware specialists. It brought out the original Kindle because it felt the time for an ereader had come and no one else was doing the job, although its Kindle platform quickly became hardware-agnostic as other alternatives emerged.

    In the field of more capable tablets, Amazon is looking at another vacuum. Android is a mess, with no product gaining significant market share and most of the tablets not very good. iPad, while an important outlet, became a hostile environment when Apple effectively imposed a 30% tax on all in-app sales, an arrangement that would leave Amazon with little or no gross margin on most purchases. (Amazon has countered with an HTML 5 browser-based version of the Kindle app, but the technology isn’t quite there yet.) Amazon was an early partner for the Hewlett-Packard TouchPad, but we know how that turned out. Windows 8 is a promising tablet operating system, but we are probably a year away from seeing products.

    So once again, Amazon seems ready to come out with its own hardware to give its customers a more effective way to consume its content. So rather than a product challenging the iPad in the general tablet market (such as it is), look for a specialized device, running a customized version of Android, that is optimized for Amazon services. That means Kindle, of course, but also Amazon Instant Video, Amazon Music, the Amazon App Store, and a great Amazon shopping app. I also would not be surprised if the tablet has a subscription component, perhaps a discounted price with an Amazon Prime subscription, or a discounted Prime subscription with a tablet purchase.

    The key thing to remember is that this is not Amazon vs. iPad. There is a vast market in which both can thrive.