2013 – Page 3 – Tech.pinions

Android is Eating the World

Benedict Evans has a must read slide deck from his mobile is eating the world presentation. I’m going to piggyback on his title a little and tackle the narrative that Android is eating the world. It is the narrative that is hard to escape and it would be a significant point if it was a unified version of Android which was eating the world. However, when you take a step back, and view Android in the big picture, you learn it is in fact an extremely fragmented Android which is eating the world.

I’m fond of saying that Android in its purest form is not a platform. It is a technology which enables companies to create platforms. Samsung is using Android to create a platform. Amazon has used Android to create a platform. Nearly every major OEM in China is using Android to create a platform. ((There are 100 different app stores in China based on Android. 20 of them are the major players and each has its own billing and certification process)) And Google is using Android to create a Google specific platform. ((Consumer behavior, by way of app download trends and purchasing vary greatly by each app store)) All of these companies and more are taking Android to create their own platform and their own ecosystems. There is no single unified Android codebase which is dominating the world. There is no single Android app store, there is no single Android ecosystem. What does exist is a vast array of different platforms and different ecosystem running this underlying kernel called Android.

Where I think the confusion in the Android is eating the world narrative exists is the line of thinking that Google = Android. That every bit of the Android is winning narrative is a narrative that benefits Google. This view represents a clear mis-understanding of Android and what it is and why it exists.

The Role of the Android Platform

There is only one company in the market right now that does not need platform assistance from a third party. That is Apple. Every other hardware company needs a third party to provide them with software to run on their hardware. Microsoft has been this company for most of the computing era. Google, with Android, has provided the Microsoft alternative to the mobile world. Hardware OEMs need this third party software support because they need a company to provide a platform and standards support for a wide variety of technologies.

However between the two, Android offers to hardware OEMs what Microsoft does not, the ability to differentiate. Ship Windows or Windows Phone and your product from a software standpoint is no different from your competitors. Which means your basis to compete is extremely limited to form and price. Android, on the other hand, allows hardware companies to take the platform which Google is supporting with standards and driver support and customize it in a way to offer some level of visual and feature differentiation at a software level. Microsoft is providing a standardized unified platform. Google is providing a standardized platform to create other platforms / ecosystems. These solutions are very different and enable entirely different ecosystems.

The Multiple Android Markets

I wrote a few weeks ago about how Android is enabling appliance electronics to get more intelligent. In this regard, Android is very similar to embedded Linux. Android is likely poised to power refrigerators, thermostats, coffee pots, robots, you name it. Android as a platform in this regard is very interesting. But again this the embedded version of Android not the one that powers smartphones, tablets, TVs, etc. That is a very different Android. This version of Android is the most interesting to me.

The other Android market is the one for products like smartphones and tablets. This market is the one that garners the most attention. Yet when you look at Android’s smartphone and tablet market share you see that the bulk of it is made up from devices that are considered in the mid-low range of price points. Android’s share of premium handsets is very small, less than 15% globally. The vast majority of Android’s market share rise over the past few quarters has come from the low-end or devices costing wholesale less than $250. ((Creative Strategies, Inc estimates.))

The same is true in tablets where last quarter Android white box tablets costing less than $100 made up just over 30% of device shipments. ((IDC estimates.))

Looking at the share of devices at certain price points, and what OS they run, it is clear that Android owns the low-end and Apple owns the high-end. In many emerging markets there will be a battle for the mid-range between Apple and Android OEMs. Looking at Android in this light highlights its importance. Had Google not released Android what platform would have risen to serve the low-end? Android is in fact helping develop, developing parts of the world. From a technology standpoint, Android’s role in helping to develop emerging markets is in fact a good thing.

So while is true that Android is eating the world, it is doing so in a very non-unified way outside of driver and standards support. This adds to the level of complexity to any analysis about Android. Android is eating the world but what is interesting is that not only Google owns Android. Android is owned by all and benefit all in entirely different ways.

When you take a step back you realize that we have never had anything quite like Android before. While we may make assumptions about what Google may do with their version of Android, we can’t make the same assumptions with what other hardware companies will do with their version of Android. To keep enabling this multiplicity of Android ecosystems all Google simply has to do is keep up with driver and standards support. Perhaps this was the point of Android all along.

What remains unclear is how Google can benefit, which may not be the point or even necessary, from the landscape Android is enabling. They have all but given up in China. iOS devices are worth more to them in every major developed market. They would of course love to see this change but there is no evidence to suggest otherwise. So Android dominants the low-end of the tablet and smartphone market and commodity connected electronics. Time will tell in what ways this benefits Google. But as I mentioned, it may not the point of Android or even necessary for Google.

Google does not equal Android. You understand this when you can see the forest in the trees.

Google’s Android Bait and Switch

You may or may not have caught an interesting change Google has made with KitKat. Google is no longer including Chrome as a part of the Google services license. Meaning that the Chrome browser will not come pre-installed on Android devices running KitKat. OEMs in essence can now choose to license the Chrome browser as a part of this or not depending on if they want it pre-installed or not. Consumers can still go download it from the store after purchase. When you think about the bulk of Android’s install base being the low-end segment of the market you realize these users will generally just use whatever is installed.

This struck me as odd, given Google’s business model. One would think they want Chrome front and center on all devices in order to push search to all users. So giving Android OEMs a choice seems like an odd move. This is what got me thinking about the bait and switch strategy Google may be using with Android.

One thing to note though, is that Google is doing everything they can to rein in the low-end devices and try to get more control and more value from them. Google may ultimately be planning a bait and switch type maneuver where once they have the majority of devices they start forcing OEMs to license their search engine for example. Google services certification requires vendors to comply with Google’s rules in order to get access to the Play store, Maps, now Chrome and other key services. What is to stop them from adding to search to that list? Which seems like a contrary move given their business model but the bottom line is there is no search engine better than theirs so if they did this many would not have a choice. But if you think about it, if Google can create a dependence on Android and their services by keeping them free or low-cost to gain market share, then start charging, it would be the ultimate bait and switch. Google doesn’t get much revenue from low-end devices on search so this would be a way to monetize these devices regardless.

While this is purely speculation, I am told there is a strategic agenda inside Google to figure out how to better monetize the low-end Android devices since that is the bulk of the Android install base. Which creates the challenge, since low-end Android OEMs make next to nothing on the device. But it is clear Google is not seeing much benefit, if any, to their ecosystem on these devices.

Truth And Lies Of Silicon Valley

It’s a privilege to write here, and a joy to focus on the long-term trends in technology, the rise and fall of companies and leaders, and the impact this region has upon not only America, but the entire world. I suspect Silicon Valley’s output will come to equal the impact of Detroit, my hometown, which effectively created the middle class, ensured the Allied victory in World War 2, and fundamentally altered how and where people live.

Silicon Valley is also a region that rivals Hollywood and Washington for talking about itself. It frequently displays the worst elements of both pack mentality and herd mentality, and aggressively covers up its failings, including a truly dismaying inequality in wealth and an almost gleeful ageism, all while insisting it knows best for California, the United States, for industry, for government, and for the world.

I now live here. These are my personal, unvarnished observations on Silicon Valley.

Almost all of the work in tech is done by companies and by people which tech bloggers pay scant attention to or worse, openly mock.

Patent lawsuits have about the best margins of any product or service in Silicon Valley. Consider that Apple recently won $290 million in a suit against Samsung. All told, Steve Jobs’ thermonuclear war has resulted in nearly a billion dollars in jury awards. If Apple only ultimately collects less than a third, $300 million, for example, that’s still about a 10X or greater return, no matter how they account for legal fees.

Does Coca Cola even make 10X on its syrup?

Computing is the new oil. The Silicon Valley “ecosystem” integrates smart people, start-ups, venture capital, and a cozy relationship between universities and for-profit corporations, has them all working at light speed and with almost zero consideration of the long-term or the existing order of things. It absolutely can be replicated in many parts of the world. This comes with a caveat, however. This area has optimized on this proven model while focused almost exclusively on computing (hardware, software, standards, apps, data, cloud, social media). Unless the copycats focus their efforts on computing-related activities, their returns will never be like what we have here. Note the very limited impact of Silicon Valley’s biotech efforts thirty years in.

Never, ever believe anyone that says Silicon Valley and Washington, DC do not mix. Washington, DC has the power, Silicon Valley has the money. The courtship is in full swing, and it’s far more than simply Washington leaders searching for big campaign contributions and re-election algorithms. Consider that under President Obama, the annual deficit alone is larger than the total value of Apple, the Valley’s biggest, richest company. Follow the money. Silicon Valley and Washington are the new Wall Street and Washington.

I always assume that any start-up whose value is based upon artificial limits is doomed. For example, Snapchat. The company is optimized for mobile, social media and the visual web. That’s almost a can’t miss. Yet, it is riding atop a temporal distortion, a gimmick whereby owners of digital content and services create artificial limits. In Snapchat’s case, the artificial limit is time (e.g. your picture or ad will vanish in 5,4,3,2,1). We all know this is not true. You may remember the briefly popular, and much-blogged-about Mailbox app, which created a sign-up list, despite the near-infinite scalability of such digital services. It may pay off in the short-term, but if you can’t cash out in the short-term, I suspect you will get burned.

There are real limits and there are made-up limits. If the limit is made-up, I don’t invest.

Speaking of investing, anyone using Snapchat for (illegal) insider trading may wish to re-consider their actions.

Almost everything you do online, and almost every time you carry your smartphone with you outside, is a far greater security risk than leaving your home WiFI open. Stop refusing to share. Stop handing over all your private data so easily.

Most people I meet here are very smart and work very hard. This is critical to their success — and to the region. Bonus: most that I meet are good people.

I have been around the world and all about this great country. Nowhere in the US is there a more socially inclusive environment than Silicon Valley — nor a more politically intolerant one. You will be branded if you are a Republican, a conservative. Just so you know.

Connections matter above all else. Except, brainpower. If your brainpower sits atop the 0.1%, you will do exceedingly well. If at the 1%, you will still do great. Nonetheless, and though I can’t say how many people at Apple have actual “humanities” degrees, I can assure you that you better have an engineering degree, science degree, and/or economics degree if you want a good job. It’s not about humanities or the social sciences out here.

Too many here are focused on creating the future or disrupting the current order, and not at all on preserving what is best. This is too bad. Think of all the great stuff we’ve been able to re-capture almost without trying. For example, thanks to iPhone, Yelp and Foursquare, I never again have to eat at fast food joints or franchise restaurants. Now, no matter where I am, I can find a great, local, mom-and-pop eatery. Similarly, classical music in the US, effectively dead on radio, is now readily available, for free, on Pandora and iTunes. I suspect the region is missing a giant opportunity is overlooking things to preserve.

We spend more on apps than on software.

I know of no one here who spends more on television than on connectivity. Internet, WiFi, smartphone and tablet connectivity wildly crush cable television, DVD rentals and the like. And yet, the new cool is to tell the world you’re going to stop reading email, stop tweeting, maybe go off-grid for a week or two. In my experience, no one who tells you this is ever telling you the truth. To be disconnected in Silicon Valley, even for a moment, is to be without air.

In physical space, absolutely no one ever mocks anyone for their choice in smartphone or computer.

Perhaps because there are so many smart, competitive, reasonably well-off people here, but attractiveness and fitness command a premium.

The rest of the world will know soon enough: the best source for breaking news is Twitter. The best links to the best analysis of current events is via Twitter.

In Silicon Valley, the cloud is your real hard drive and your physical hard drive is just a backup, likely to crash.

The last thing we see at night and the first thing we see in the morning is our smartphone.

We get our music recommendations come from iTunes and YouTube.

Design is hard. Really hard. BMW has been making cars for about 100 years. The new 750i is ugly. If BMW still can’t get car design exactly right, 100 years on, it’s probably no wonder that so much hardware, so much software, so many apps, nearly every UI design is so poor. Still, bad design is an obvious failing, with Silicon Valley a leader.

In my time here, I’ve witnessed radically more communications failures and personal angst based on people with obviously different Myers-Briggs assessments than on whether the person was black or white, male or female, for example.

There are so many people out here, so many cars, so little space. Yet barring a literal seismic catastrophe, I believe this area is on a growth trajectory that will continue for at least another generation or two.

The Golden Goose and the Process of Innovation

Horace Dediu joined Benedict Evans and I on our weekly podcast. Horace wrote something that got me thinking in his post the innovators curse. In this article he used the analogy of the golden goose. As I read that I interpreted the golden eggs to represent innovation. While I pondered his insight, what it led me to think about is how this story may relate to Apple. What I concluded, was that those in Wall St. who chant the innovation mantra as the only way for Apple to succeed, survive, and grow, believe that Steve Jobs was the golden goose. And now that he is gone, the golden egg of innovation is gone from Apple forever. I fundamentally disagree and I believe that the golden goose of innovation is core to Apple’s culture not a single individual. What is unique is that this culture was created by a very unique individual but was designed to not be dependent ON any one individual. It requires the right group of people not the right single individual.

This is contrary to how many companies operate where there is one primary rock star and his team. For Apple the team, is the rock star not the individual.

During the discussion, we discussed Pixar and how Jobs saw a team for which this unique culture was possible and implemented it at Pixar. Who despite all odds, continues to be a blockbuster creation factory. The same proved true at Apple who continually creates hit products and it is directly because of both process and people. But both companies fall victim to their own succes in the innovators curse. With each hit, the external view is that the next one becomes statistically less probably and less believable that it will happen again.

Both Pixar and Apple are unique in this regard to their culture. One would think that with each consecutive hit, the market would recognize that a track record is established and repetition becomes more likely not less. However the opposite is true. This is the innovators curse.

It seems most recognize that Steve Jobs was unique and that his unique way of doing things was impactful in creating innovative products. What seems to be missed is that his uniqueness can extend to a culture, or perhaps a lasting legacy, unique to companies where his imprint remains. This was a great discussion and a difficult topic to address. If you like deep discussions on this stuff then I encourage you to listen.

Cubed Episode 10: The Process of Innovation

Qualcomm Moves to 4K with Snapdragon 805

Qualcomm Technologies is bringing console quality graphics with 4K capture and display capability to mobile devices. The company has introduced the new Snapdragon 805, expanding the already widely popular Snapdragon applications processor SoC family, and promises to change the landscape of mobile entertainment systems and communications.

The new SoC has an advanced Adreno GPU, the 420, which Qualcomm says delivers 40 percent more graphics and compute performance than its previous generation GPU while using 20% less chipset power than Snapdragon 800 (8974 )for the same graphics workloads.. The Adreno 420 is not a minor update from Adreno 330. On the contrary, it is a new GPU architecture, 100% designed in house by Qualcomm specifically for mobile use cases, and it comes along with other substantial system level enhancements outside of the GPU itself.

Qualcomm added several completely new 3D pipeline stages in the A420, for example a Hull shader, domain shader, geometry shader, and the first AP GPU to incorporate a dedicated Tessellation hardware; the shader subsystem and caches have also been augmented in order to support OpenGL ES 3.0, OpenCL 1.2 Full profile, and DX11.

Also, some hardware improvements were made to the GPU front end to improve depth rejection, and the texture pipe is >2x more capable than it was for Adreno 330 both in terms of raw texel performance and also in its support of superior compression schemes like ASTC.

The A420 also includes several render backend hardware improvements such as wider & more efficient data paths to internal memory. There’s a new color/z compression module that when combined with 8084’s more capable 128bit 800MHz LPDDR3 (or 933MHz PCDDR3) memory bus, enables Adreno 420 to maintain its peak pixel fill rate more often, and that is particularly important when driving 8Mpixel (4Kx2K) displays.

Qualcomm says they’ve increased performance without sacrificing power by including more DCVS voltage/frequency pairs, and moving the position of the GPU within Snapdragon to a new, Low-latency high bandwidth MMU/Bus (i.e. a dedicated bus that is independent of the Video Decoder and ISPs).

The 805 introduces a new 2.5 GHz Krait 450 CPU based on the ARMv7 instruction, however, like Apple and Nvidia, the CPU’s architecture is Qualcomm’s unique design. Unlike other SoC builders, however, the Krait cores dynamically adjust the clock and voltage as system demands change. This manages power consumption for longer battery life, while being able to kick into overdrive if an application demands it. Additional performance enhancements include a new memory manager that doubles memory bandwidth to 25.6 Giga bytes per second making it capable of delivering 4K images and video smoothly and continuously.

The Snapdragon 805 will include two high-bandwidth wide bit-width image signal processors (ISPs). That will enable the 805 to capture with ease 4K images at high frame rates, and/or high-speed stereo images, dual camera (front and back) images for video conferencing, and super-fast sports photos.

In order to handle the new 4K images the 805 will be one of the first production processors to support H.265/HEVC CODECs. Qualcomm acquired the assets of IDT’s Silicon Optics Hollywood Quality Video (HQV) and Frame Rate Conversion (FRC) Video Processing product lines back in 2011and incorporated the technology into its video processing engine. The HQV and FRC processes handle de-interlacing and scaling and can smoothly upscale a Blu-ray file to 4K UHD.
The new Hexagon V6 DSP can multi task, and run video conversions, and/or Enhanced HD multi-channel audio (encoding, decoding, transcoding, noise cancellation, bass boost, virtual surround and other enhancement functions).

When the Snapdragon 805 goes into full production, it will use the new TSMC’s 20nm production node, which will reach commercial capacity in early 2014.
Using Qualcomm’s fusion-paring, the Snapdragon 805 can be combined with the new Gobi 9×35 LTE CAT 6 modem supporting 4K streaming and transfer. The 9×35 is smaller and allows an OEM to realize a thinner and more power efficient part than the current 9×25 modem (introduced in February 2013) while still supporting LTE Category 4— also known as LTE Advanced. CAT6. LTE, however will reach speeds of 300 Mbps (compared to CAT4’s150Mbps). The dual band HSPA+ Gobi MDM 9×35 is the industry’s first modem manufactured in a 20nm process technology.

Qualcomm is shipping samples of the Snapdragon 805 and Gobi 9×35 to ODMs and OEMs now. You can expect to see them in amazing new mobile devices second half of 2014.

Take Aways

It’s the most aggressive move in mobile graphics by any company, to add all the shader types, and HW tessellation, on top of what they did in Subdiv for Moto, shows Qcom as the most committed mobile graphics supplier today. It really is bringing console class graphics to mobile devices.

4K requires a big fat pipe to suck up all the pixels that come blasting at you 15 billion bits a second. So Qualcomm put in tow ISPs to handle the flow. Once you start eating that many bits that fast you have to compress them, so Qcom incorporated the new H.265 CODEC. And then if you want to send them anywhere you a wide memory bus so Qcom double the memory bus width, and up’ed the clock rate. Net result – Qualcomm can really do 4K.

Smartphones are Becoming the Hub of our Digital Lifestyles

In 2003 I began a series of lectures at conferences entitled “Three Screens of the Digital Lifestyle.” Starting in 2000 I began researching how people were using various screens in their lives and made the assumption that over the next 5-7 years all of our screens would be digital and would have some type of an OS that made them smart. The three screens I focused on where the PC, TV and the feature phone at first and by 2007, after Apple introduced the iPhone, the third screen became a smart phone in my talks.

In these lectures I basically laid out how these screens would become the hub our digital lifestyles and at the time suggested that the smartest screen was the PC. Thanks to Apple, we were already seeing the PC serve that central role since the iPod needed the PC to sync with as the iPod music library was on the PC and was managed on the PC too. Actually, the Mac was at the heart of Apple’s overall idea of a PC being a hub. At MacWorld in 2001, Steve Jobs’ keynote focused specifically on the idea of the “Mac being the hub our our digital lifestyle” as Jobs put it and over the next three years he made a major effort to deliver on that vision.

Eventually the Cloud became the hub for Apple as they began to move more and more of our content to their iCloud and use it to store our music and apps and then push them down to our devices. Consequently the data sync was now cloud based and the Mac or the PC played less of a role as our digital lifestyle hub. However, the idea of a digital device being a hub is still alive and in fact, in many ways the smartphone itself is becoming a very important hub in its own right.

If you have one of the current wearable health monitors you are already using it as an important hub in your own lifestyle. In my case my preferred wearable is the Nike FuelBand. I wear it 24 hours a day and it records my steps, gives me the amount of calories I burn and as designed, it pushes me to move more throughout my day.

At the end of my day I sync it to my smartphone where the data is compiled and analyzed and it keeps a running weekly tally of my movements so I can compare them against other weeks in the records. It uses Bluetooth Low Energy (BLE) radio signals for this synchronization and more and more devices of all types will rely on this important extension of the Bluetooth radio being used in a whole host of wearables and other devices that use the smartphone as the central hub of the data it collects..

My smartphone has become an important hub in a lot of other ways too. In fact, I point out in my column in Time magazine this week that the smartphone has become a “Swiss Army Knife of Gadgets.”

It now has become my GPS system, my digital camera, my flashlight, my voice recorder, etc. With the plethora of software and services available on my smartphone, its hub like nature makes it the most important digital screen in my life.

In the next few years, the smartphone’s role as a hub will become even more interesting. There is another function to these devices that when tied to sensor’s give them even more unique capabilities. The heart of this is embodied in something call beacons. Beacons are small sensors that can be attached to physical objects that use BLE to send short bursts of data to your smartphone. Apple is leading the charge with something called iBeacons but Google, Microsoft and others all are creating beacon’s for their platforms as well.

One interesting example of this is how Major League Baseball is going to use these in their stadiums. They plan to put iBeacons throughout a stadium and when a person comes in proximity of the sensor it can send them related info that could be of interest to them. That info could be stats about a player that is coming to bat, specials from a concession stand that will give them a discount on some sports item if the buy in the next hour or even specials from their food booths.

In retail stores a company could put a Beacon on an end cap holding Levi’s 505 jeans and as a person with the stores app on it walks by the display it can send an alert that perhaps says “get 20% of 505’s if you buy in the next 30 minutes.” Macy’s is about to do a pilot test using Apple’s iBeacons that would alert shoppers of specials as they walk by specific displays where an iBeacon is attached to it.

I am not sure that Steve Jobs really understood the impact of the iPhone when he introduced it but what he did understand is that it would be a platform for innovation and indeed that is what it has become. No wonder we are selling 1 billion smartphones a year now and by 2017 over 2 billion smart phones that will serve as hubs to digital lifestyles will be sold each year and feature phones will mostly be gone.

Although we will continue to see solid growth in tablets and they will also become a platform for innovation, it is pretty clear to me that smartphones will be where most of the real action will take place and its role as a hub will only be expanded over the next few years.

The State of Global Smartphones Q3’13

There are a number of things worth pointing out about the current state of smartphones. The first is that from a hardware standpoint vendors are staying relatively flat with a few seeing slight growth. Here is an updated chart showing IDC’s estimates for smartphone vendor share up to Q3’13.

As you can see not a ton of change any which way. What stands out however, is the continued growth of Android. Here is Gartner’s estimate of Android’s global market share for smartphones.

As you can see this is an important chart. However, without the lacking context it is very misleading. Do spend a minute looking at the rapid rise of Android in this chart because it is important to soak in for the next few data points I will show.

With this rapid and what seems like dominating market share rise of Android we would think that we would see some change in the web browsing statistics yet that is not the case. First let’s look at America. According to StatCounter Android’s market share is declining in the US with iPhone staying relatively steady.

I’m anticipating iPhone to grow slightly in the US with regards to this statistic and even overall OS market share. I also expect Android’s continued decline as well in this statistic. I will update both toward the end of December and add more context.

Next let’s look at worldwide global browsing share. Keep in mind that the earlier Android chart plotting its market share growth is a result of emerging markets coming online and purchasing very low-cost smartphones. Devices that cost less that $150 USD. This is where Android’s growth is coming from and understanding that is key context. Here is a chart from NetMarketShare showing global mobile browser trends.

What myself–and many others–are continually perplexed by is that Android’s quarter growth at at WW level does not seem to change its low browser share. So the question we have to ask is why? There are several possible explanations.

First, and quite simply, they are not being bought to browse the web. This does not mean they are not using the devices data connection but that they are not using it to browse the web. Any data being used by the device is coming from a download of an app, media, or other in app usage of data. No network provider would really consider this a heavy data usage point and I think it is clear that these devices are not heavy drivers of data services.

Second, and along those lines, many of these devices are consumers first experience with the internet. Perhaps a significant percent do not have consistent access to Wi-fi at home. We know that data plans vary greatly in these regions and some are very expensive and to a degree extremely slow, particularly in emerging markets. So between price barriers and experience barriers, perhaps the local regions where Android is growing simply do not lend themselves to drive much data. If you have to pay for the data you consume, rather than have an all you can eat data plan, perhaps you are more cautious about the data you use. This would mean that consumers are prioritizing their data usage. We know consumers in these regions likely have a data plan but not a text messaging plan which explains the rise in messaging apps like WeChat, WhatsApp, and Line. Consumers are prioritizing using the web for communication rather than browsing, or other rich web experiences.

Lastly, perhaps a large percentage of these devices are not being purchased with a data plan at all. Only 29% of global mobile subscribers have a data plan. I was told by a carrier in India that just over 50% of their Android device sales did not include data plans. Perhaps this is happening much more than we realize and in all emerging markets.

The key conclusion is that low-end Android phones are not proving to be effective network and business model drivers for the carriers and the carriers know it. This is what makes the speculation of the iPhone’s launch on China Mobile as a part of the launch of their 4G network so interesting. China Mobile, and other Chinese carriers, know that in order for them get a return on their network investments in future networks they need devices on that network that take advantage of those investments as a premium data driver. It seems as though many carriers across the globe know the iPhone will serve as a premium network driver. So as those regions develop and add new network infrastructure it is safe to assume those network carriers will be aggressive about getting devices that drive network value, by way of data, into the hands of consumers.

Microsoft: Failing By Design

Microsoft Achieved Its Goal

Microsoft had one of the greatest corporate mission statements of all time:

“A computer on every desk and in every home, running Microsoft software.”

And guess what? Incredibly, THEY ACHIEVED THEIR GOAL! ((For a wonderful take on this, I highly recommend Ben Thompson’s article entitled: “Skating Towards The Goal“)) There IS a computer on nearly every desk and in nearly every home, and nearly all of them run Microsoft software…

…but then what?

For Over A Decade, Microsoft Has Been Playing Not To Lose

Ben Thompson compared Microsoft to the great ice hockey legend, Gordie Howe, and I heartily agree with the analogy. Like Howe, Microsoft has great strength, durability, and a willingness to mix it up. There is also great virtue in Microsoft’s single-minded pursuit of a goal, and its absolute refusal to be deterred from that goal. However…

Those who know how to win are more numerous than those who know how to make proper use of their victories. ~ Polybius

Microsoft’s dominant traits worked magnificently when they were striving to become the king of the hill; when they were aggressively pursuing a clearly defined goal. Those very same traits became counter-productive when they became king of the hill and there was nothing left to achieve; when they stopped playing to win — because they had already won all they had set out to accomplish — and started playing not to lose, instead.

“Ultimately it was Bill’s decision. When you’re king of the hill, you are driven to play defense and protect.” ~ a former Microsoft executive

In truth, I very much like the “king of the hill” metaphor as a way of describing Microsoft, because Microsoft was not just great at climbing the hill, but they were masterful at pulling down, and climbing over, the bodies of the corporations that were ahead of them. But again, what good are those skills once one has reached the pinnacle?

Without a clear goal to head towards, Microsoft lost their focus. With nothing to look up toward; they turned their gaze downward, onto their competitors, instead.

Our friends up north [at Microsoft] spend over five billion dollars on research and development and all they seem to do is copy Google and Apple. ~ Steve Jobs

After a competitor had achieved a product breakthrough, Microsoft belatedly attacked. They were the slow follower — not so much going where the metaphorical puck had been, more like chasing opponents all over the ice, throwing vicious body checks, missing, then crashing into the boards just after their opponents had gracefully skated by.

After a decade of exhausting themselves by skating all over the ice for no apparent reason, all that Microsoft was left with was a warehouse full of unsold Zunes, Kins, and Surfaces, a server full of unused Bing searches, and a wistful memory of fifty billions in lost expenditures.

I spent a lot of my money on booze, women, and fast cars. The rest I just squandered. ~ George Best

The Ballmer Era Is Over

Any jerk can have short-term earnings. You squeeze, squeeze, squeeze, and the company sinks five years later. ~ Jack Welch

Microsoft’s revenues tripled during Ballmer’s tenure to almost $78 billion in the year ended this June, and profit grew 132% to nearly $22 billion. But while profit rolled in from Microsoft’s traditional markets, it missed epic changes, including Web-search advertising and the consumer shift to mobile devices and social media.

“Steve was a phenomenal leader who racked up profits and market share in the commercial business, but the new CEO must innovate in areas Steve missed—phone, tablet, Internet services, even wearables.”

I disagree that Steve Ballmer was a phenomenal leader. He fell into the classic trap of protecting his cash cows and chasing short-term profits. In my opinion, during the Ballmer era, Microsoft looked as silly (and as ineffective) as a one-legged man in a butt kicking contest.

What Ballmer Is Leaving In His Wake, Ain’t Pretty

The time to repair the roof is when the sun is shining. ((John F. Kennedy)) Once it starts to rain, it’s too late.

A quick overview of some of Microsoft’s current woes:

1) Microsoft is LOSING money on phones. And that’s not counting the purchase of Nokia.

2) Tablets are decimating the Notebook and Desktop markets.

All you need to know about tablets is that they will drive more innovation in personal computing the next 10 yrs than the PC ever did. ~ Ben Bajarin (@BenBajarin)

3) PC shipments fell 8.6% in the third quarter, the sixth consecutive quarterly decline.

Microsoft’s software was on 17% of all personal computing platforms sold last quarter. Apple’s was 13%. (Tablets, smartphones, PCs) ~ Ben Bajarin (@BenBajarin)

Having a “monopoly” on notebooks and desktops will soon be equivalent to having a “monopoly” on non-colored soda products — a distant third of three.

4) Windows lock-in is becoming irrelevant. ((Even the Windows lock-in is becoming irrelevant and losing power quickly. ~ Matthew Johnson (@anandabits)
—
You used to buy a Windows PC because everyone had Windows PCs. All the major programs were written for Windows and it became the de facto standard for almost every office and home on the planet. Windows ran the world and because of its wide reach, we all grew accustomed to the Office suite of applications. Writing a report? You used Word. Needed to do a presentation on plant life in the rainforest? PowerPoint and its atrocious sound effects were there to add glass-shattering emphasis to that clip art on slide two. Your email was stored in Outlook and your numbers were crunched in Excel and there was nothing you could do about it because nothing else came close to the power and reach of Microsoft Office.))

5) Long-Time Windows Users Are Fleeing The Platform. ((Why I’ve all but given up on Windows.))

6) Almost all of Microsoft’s Revenue is all sourced from software and software pricing is dropping to $0. ((The contrast couldn’t be more stark: 75% of MS’s revenue and 95% of its gross profit come from licensing. Apple now charges $0 for most software.))

7) Microsoft’s hardware offerings are not competitive. ((Apple’s Software revenues are more than double Microsoft’s Surface revenues. ~ Horace Dediu (@asymco)
—
So iPad Air weighs half as much as Surface Pro 2, has longer battery life, and costs $200 less. But hey – look at that kickstand! ~ Ian Betteridge (@ianbetteridge)))

8) Throwing advertising dollars at the problem isn’t helping. ((Apple spent $1.1 billion on advertising in the last 12 months. 0.64% of sales. (Microsoft spent $2.6b or 3.3% of sales yr. ended June). ~ Horace Dediu (@asymco)))

9) Hardware manufacturing partners are fleeing Windows.

If you don’t make a total commitment to whatever you’re doing, then you start looking to bail out the first time the boat starts leaking. It’s tough enough getting that boat to shore with everybody rowing, let alone when a guy stands up and starts putting his jacket on. ~ Lou Holtz

10) Microsoft’s consumer satisfaction rating fell to its lowest level since 2007.

11) Business model transitions are terribly dangerous.

Why Has Microsoft Tied The Hands Of Its New CEO?

Over the past several months, Microsoft has:

1) Committed To A New, Functional Organizational Business Structure;
2) Purchased Nokia for 7.2 Billion Dollars;
3) Ended Stack-Ranking; and
4) Committed to becoming a “Devices & Services” Company

We are watching Microsoft abandon nearly all the strategies that made them successful and embracing new ones in the hope of a future ~ Ben Bajarin

Well, yes and no. But mostly no. Because Wait! There’re MORE!

Microsoft has also committed to their old strategies of:

a) X-Box;
b) Turning Bing into a platform;
c) Maintaing both Windows RT and Windows 8; and
d) Manufacturing their own, Surface, Tablets.

Microsoft is like a sailor who has one foot on the departing boat but refuses to take his other foot off the dock.

Microsoft hasn’t just tied their incoming CEO’s hands — they’ve trussed him up like a turkey. Now ask yourself: “Why would Microsoft do that?” To my mind, there can be only one answer.

After finding no qualified candidates for the position of Microsoft CEO, the Board is extremely pleased to announce the appointment of…

The Microsoft Board Has Taken Charge Of Microsoft And Is Charting Microsoft’s Course

I do not subscribe to the idea that a Bill Gates return would be a good outcome for Microsoft. Indeed, much of what troubles Microsoft today is directly attributable to Gates, particularly the Vista disaster/distraction and the Windows obsession. ~ Ben Thompson

[pullquote]The Microsoft Board is going to TELL the new CEO what to think[/pullquote]

Too late. Gates, via the Board, is already back. He’s the reason Ballmer “volunteered” to walk the gang plank, he’s the reason Microsoft has been forging ahead so quickly with the functional business reorganization, the purchase of Nokia, the ending of stack ranking, the commitment to new policies and the recommitment to old. Microsoft doesn’t need to wait to see and hear what the new CEO thinks, because the Board is going to TELL him what to think.

Doubling-Down On The Wrong Strategy

It is better to run back than run the wrong way. ~ Proverbs

Prior to pushing him out the door, The Board’s mandate to Ballmer was to move faster.

Motivation alone is not enough. If you have an idiot and you motivate him, now you have a motivated idiot. ~ Jim Rohn

It’s clear to me that the Microsoft Board didn’t “get” why Microsoft has been falling behind over the past decade and, based on their recent actions, it’s just as clear that they still don’t get it.

The human body has two ends on it: one to create with and one to sit on. Sometimes people get their ends reversed. When this happens they need a kick in the seat of the pants. ~ Theodore Roosevelt

Microsoft isn’t failing because it’s not going fast enough — it’s failing because it’s going in the wrong direction.

If someone is going down the wrong road, he doesn’t need motivation to speed him up. What he needs is education to turn him around. ~ Jim Rohn

If the Microsoft Board could kick the person in the pants responsible for most of their troubles, they wouldn’t sit for a month. ((Inspired by Theodore Roosevelt))

In this business, by the time you realize you’re in trouble, it’s too late to save yourself. ~ Bill Gates

True enough.

X-ray Glasses Are for Real

Readers of a certain age remember comic book ads for mail-order glasses that would let you see through people’s (read: girls’) clothing. They were, of course, a pure rip-off, but their real world counterpart is about to hit the market.

Evena Medical and Epson have developed Eyes-On glasses that can see through your skin to locate blood vessels. The glasses actually illuminate tissue with infrared light. The light penetrates the skin to a depth up up to 10 mm and is selectively reflected back by deoxygenated hemoglobin, the sort that is in the red blood cells flowing through your veins. The goal is to make it much easier for doctors or nurses to find veins to draw blood or insert an intravenous line.

The subcutaneous veins are imaged–the imaging system is Epson’s contribution–in a the Eyes-On head-up display, allowing precise location of a vein without the usual (and for me, often unsuccessful) effort to get it to “pop.” And because it is actually venous blood that is being imaged, Eyes-On will also spot any leakage at the injection site, allowing for quick corrective action.

The Evena Eyes-On glasses are a bit more expensive than the comic book specs that went for a buck back in the 1950s. Around $10,000, in fact. But they work, and are actually something of a bargain since they will replace a much less mobile and more inconvenient cart-mounted version that cost twice as much.

The glasses are scheduled to go into full production in April, with general availability later in the spring.

XBOX One: Congratulations Microsoft, You Own My Living Room

While the XBOX One is a great gaming console, it is the other features that have more of my interest. Of course these new consoles will play great games but it was the other parts of the story I was interested in. At the end of the day both the PS4 and the XBOX One have to earn a place in consumers living rooms. Both the PS3 and the XBOX 360 are great gaming devices so the story for the new consoles needs to be more than just gaming. Microsoft delivered on that challenge.

The XBOX One is far and away the best piece of living room technology I have ever owned and used. Which is saying something since I’ve been doing connected and digital home analysis for 13 years. I have used everything. Microsoft has done several things with the XBOX One that are very impressive that I want to highlight.

Kinect and Voice

The new Kinect has some sophisticated technology built in. As you set up your XBOX it will ask you if you want to log-in using facial recognition. If you choose to do that the XBOX will auto log you in using your facial and body profile and bring up your custom home screen. What is even more impressive is that the Kinect can log-in multiple people at the same time using facial and body recognition. I set up my account then set one up for my kids with different screen settings and home screen apps for them. When we all sit on the couch it logs us all in at the same time but only allows one person at a time to control the screen.

The voice recognition technology is another leap forward for a living room solution. XBOX is always listening and to turn it on you can say “XBOX turn on” and it will turn in and log-in anyone in the room. This was extremely useful when my friends came over to play who had their own XBOX live accounts. It would instantly log everyone in and allow us to quickly start playing together using our individual accounts. Simple things like that were an impressive part of the overall experience with the XBOX One.

Where Microsoft’s advancements in voice recognition really made an impact was in the TV experience with the XBOX One.

Liberation From My Cable Provider. Almost

The box provided to me by my cable provider is some of the worst technology I have ever used. The only reason I have it is because my service provider makes me use it. While the XBOX can’t replace my cable box yet it has come as close to it as possible. Any living room solution will have to deal with the broadcast TV element. While this is difficult, Microsoft has done the best job yet.

Microsoft has custom built a new guide called the XBOX One guide. This guide is designed to control your broadcast TV experience. If you choose to do so, and I did, you can plug your cable box into the XBOX One and let the XBOX one control it. Where this really becomes powerful is when you use this with Kinect’s built in voice technology.

To see the solution in action check out this video from the Verge.

I saw the same demo live and thought it would never work like this when I got it home and set up. Sure enough it did. Like magic I can say “XBOX watch ESPN” and it quickly tunes to ESPN. I can say “What is on Discovery Channel” and it instantly brings up the guide and shows me what is on Discover Channel. Using voice to navigate around the TV experience opened my eyes to the potential with this experience. Others boxes have tried this and failed. Microsoft’s solution is the first one I have used that works with all cable providers.

At a high level the XBOX One adds quite a bit of value on top of any existing TV provider by providing a better guide and adding the use of voice to change channels and navigate the guide. I was surprised how natural it was to instantly start controlling my TV experience through voice. And amazingly it consistently worked.

Content Matters, Not Its Location

The other element that I was impressed with was the seamless integration with streaming services and other media related apps. The XBOX One continually updates all your content sources so that very quickly and easily you can get to content. Again driven by voice this is quick and seamless.

By integrating search, through Bing, into the entire experience Microsoft made using voice search for content easy and seamless. For example, you can do a Bing search and and say “The Avengers” and it will bring up all content related to the Avengers which you can access. If you are a Netflix subscriber you can choose to watch it from Netflix. Same if your an Amazon video subscriber. If there is a TV show on Hulu about the Avengers you can watch it there. It will show all movies and TV shows related to the Avengers throughout any content services you have access to. It will also bring up and related content which you can rent or buy from the Microsoft media store. And amazingly, it actually works.

The tight integration with all your content sources with the XBOX One and the seamless way you can search, access, and decide what to watch all with voice was very impressive.

For the Gamer

While the games are important, they are a bit less of the overall story in my opinion. Graphics are better and unique titles will come out on both systems. However, Microsoft did do something that as a gamer I thought was useful.

Microsoft built quite a bit of custom hardware and chipsets for the XBOX One. One of them allows you to start and stop video games in mid-action by holding the games state in a virtual machine while you go access other apps. So for example, you are playing a game but wanted to go check the score of a sports team that was currently playing. You don’t have to pause the game you can just say “XBOX watch TV” and it will instantly jump your broadcast TV so you can check the score. Then to get back you simply say “XBOX play Forza” and you are right back where you left off. Instant and seamless transition between media types and content types all with your voice and all on one box.

Microsoft’s goal was to create the one box that works with all your other ‘boxes’ and streaming services. From my week with it, I’d say they delivered and I am impressed. Congratulations Microsoft you own my living room.

Observations about the Future

From a technology standpoint, the XBOX One is the most sophisticated piece of living room technology that I have ever used. It delivers on many promises of the digital living room and more importantly it actually works as advertised. ((I noticed some reviewers were frustrated with the voice elements but once you learn the syntax it works quite well. I’m confident this experience will improve.))

That being said there is still a long way to go when it comes to the full vision of the digital living room. For example, the XBOX, can’t yet allow me to use all the wonderful voice features with my DVR content. That is because that content is locked on my box by my service provider. Hopefully, as we advance the idea of the cloud DVR we may get closer to this future.

The other element is search. While the XBOX has robust search feature to search content from your streaming services, movie purchase and rental options, it does not extend to your TV guide. I understand this is difficult but it will need to be a key part of any box that wants to own the living room.

Skype integration through the Kinect camera was another interesting experience. The Skype experience was one of the best and the Kinect camera can move and zoom in on the person talking. More interestingly is how this experience may evolve to let friends watch sports together and be able to see each other at the same time.

It will be very interesting to see how Microsoft improves these experiences and more over time through software updates. If Microsoft wants to continue to compete to own the living room they can not stand still.

Ultimately the decision to buy an XBOX One comes down to timing. The lack of backward compatibility is less of an issue in my opinion than the lack of ability to play online against or with XBOX 360 owners. This means for me to have a meaningful online multi-player experience with my friends or clan we all need to have the XBOX One. Knowing this is not going to happen my XBOX 360 will have to stay in my living room until all my friends are on the XBOX One.

Console transitions take time. Generally speaking it takes 3-4 years for newest consoles to hit their strides. The media features alone that I outlined make the XBOX One a compelling piece of living room hardware but it also highlights how difficult and how far we still have to go to reach the full vision of the digital living room.

Education and the Future of MOOCs

Maybe online course aren’t going to remake the face of higher education after all.

After a fast start, reality seems to be closing in on the world of the massive, open, online courses that were supposed to replace traditional lectures and recitations and make free, or at least very cheap, higher education available to everyone. San Jose State University has slowed down a move to deliver introductory undergraduate courses through MOOC provider Udacity.

Udacity itself, one of several MOOC providers that have sprung up in the last couple of years, is refocusing its activities on corporate training. Sebastian Thrun, Stanford computer scienctist and founder of Udacity, told Fast Company, “We were on the front pages of newspapers and magazines, and at the same time, I was realizing, we don’t educate people as others wished, or as I wished. We have a lousy product. It was a painful moment.”

No surprise. I’m not surprised. I’ve been a skeptical enthusiast for online education since MIT started its Open Courseware initiative a few years back, and over the last year or so, I have enrolled in several offerings, mostly from Coursera, like Udacity, a for-profit provider of open courses. My experience has been a very mixed bag, but one that has taught me a lot about where the approach does and doesn’t work. A couple of general observations. First, the technology has a long way to go and on one seems to have figured out a completely effective way to deliver lectures on video. I’ve seen a number of approaches, from video recording regular blackboard lectures, to slide-based presentations in which the instructor only occasionally appears, to a course that used cartoony “virtual students” to asked questions in computer synthesized voices. None worked completely, though the last was the most annoying. Online lectures today remind me of the earliest days of television, when shows were “radio with pictures.” No one has quite cracked the medium yet.

Second, and more important, MOOCs seem to work best for those who need them least. Most surveys of those who enroll, in MOOCS and especially those who complete them–typically no more than 5% to 10% of the original enrollees–tend to be people who already have undergraduate degrees and often more. “If you’re looking to really move the needle on fundamental educational problems, inside and outside the United States, you’re going to need to help people reach the first milestone, which is getting their degrees to begin with,” Daphne Koller, a founder of Coursera, told The Chronicle of Higher Education. My experience is that MOOCs require very highly motivated students. It can be very easy to slough off, fall behind, and drop out. You have paid little or nothing, so there’s little at stake.[pullquote]If you’re looking to really move the needle on fundamental educational problems … you’re going to need to help people reach the first milestone, which is getting their degrees to begin with.”–Daphne Koller, Coursera[/pullquote]

Where MOOCs work. MOOCs work best for the sort of course that mainly consists of transferring information. I am finishing up a Coursera course in basic financial accounting, taught by Professor Brian J. Bushee of the University of Pennsylvania’s Wharton School. I signed up because I had just become treasurer of a non-profit and was embarked on a project of getting improved financial reporting for better decision support. Accounting isn’t the world’s most interesting subject and this wasn’t a terribly interesting class. But it gave me the knowledge I was looking for. Introductory accounting is a very good subject for online training: It consists mostly of a lot of sometimes arbitrary rules and how to apply them. And it lends itself well to effective multiple-choice evaluations. (This, however, was the course with the annoying virtual students.)

In a similar vein, I took an introduction to cryptography course from Stanford Professor Dan Boneh. Again, I though the course succeeded because it focused on straightforward information, not deep ideas. It was mostly aimed at teaching programmers what to do, and probably more important, not do, when implementing encryption, Some of the concepts were quite difficult and I thought that multiple choice evaluation was not terribly satisfactory; questions with longer free-response answers would have been much better. But the need to keep costs down drives machine-scorable evaluations.

The big surprise was a another Penn-Coursera course, Calculus: Single Variable, taught by Professor Robert Ghrist. This was not standard freshman calculus course; the course description suggested prior familiarity with introductory calculus. Ghrist took a fresh, almost idiosyncratic approach to a familiar subject (he focuses heavily on Taylor series and included a week on discrete calculus, a subject rarely touched in an introductory course.) Above all, he showed that multiple choice or numerical answer questions could be both interesting and challenging. This is the course to watch for anyone who wants to see how to do it.

A disappointment. My biggest disappointment was a course called Introduction to Mathematical Thinking taught by Professor Keith Devlin of Stanford. Devlin is a distinguished mathematician and an excellent lecturer, but this Coursera project was tedious. The lectures consisted mainly of him talking while writing, a sort of online version of the blackboard talk, but it did not work well for me. My biggest problem was that the problem sets, which I expected to deal with ideas, consisted mainly of slogging my way through endless truth tables. And Devlin’s attempt at supplement machine scoring with peer evaluations just did not work (In fairness, I took the course the first time it was offered; Devlin has taught it a couple times since and it may well have improved.)

There’s no question that the rising cost of higher education is a big challenge to U.S. society and that the inefficiency of the current system is a big contributor. But MOOCs as they exist today do not seem to be the answer, or at least not more than a small part of the answer.

The Quantified Car

It is easy to make the assumption that most if not all electric products will have a companion app or be managed by a software platform in the future by a smart screen of some kind. Trying out these solutions as they stand today help to make sense of what they may look like or how they may be used tomorrow. Lately, I’ve been trying a product from a company called Automatic which links to a software app and begins tracking important data related to a car. I think of it like a health and fitness wearable for your car.

You plug Automatic’s hardware into your cars diagnostic port. It then connects to your smartphone with Bluetooth 4.0 and begins tracking things like time, distance, MPG, and how much money in gas you spent during each drive. At the end of the day or week you have a running tally of all those stats for the day or week.

As I started using this it felt like my first experience using a health and fitness wearable. Until such devices came along we had no real way to consistently measure things like steps, time spent sleeping, heart rate, and more throughout our days. Getting all this data was eye opening to me. Then the question becomes what do you do with it?

In the case of health and fitness wearables, tracking steps is useful if you have a goal of staying active or getting a certain amount of steps in each day. The data is useful in so much as you use it to modify your behavior in ways you see fit. And so the folks at Automatic added similar features into their solution. Namely, getting better gas mileage and decreasing wear and tear to your car.

This is accomplished by audible sounds, in this case a beep, when you go over 70 mph or when you accelerate too fast from a stop. Both driving over 70 mph for long periods of time and accelerating too fast are known to yield poor gas mileage. The other sound it makes is when you brake to hard. This increases wear to your car’s brakes and overall safety and is recommended to avoid. While I have no way to quantify the braking component in terms of tangible results, I did notice that my car’s average MPG went from 32.1 MPG to 37.7 (I have a Kia Optima Hybrid) just by abiding by Automatic’s audible noises which alert me when I went over 70 mph and decreased my speed to less than that. Another case of using data for quantified results which I would not have had without the help of connected hardware and companion software.

All of this brings up an important point. The key to quantified hardware is in its customization. Everyone’s goals and habits will be different. So the software needs to be dynamic enough to allow a full range of customizations for the person who is using it. These types of solutions, whether they be health and fitness wearables, connected car, connected home, connected watch, etc., all need to be highly customizable for the specialized interests of the buyer. This is why a one-size-fits all solution will not work in this space.

While Automatic’s solution is interesting, I assume that this type of technology will be built into all cars in the future. Your car will come with an app, your appliances will come with an app, even your toilet will come with an app that monitors their use in some way. Diverse connected hardware offerings combined with robust and dynamic software is what will turn these visions into reality and bring them from the early adopters to the mass market.

Truth And Lies About Apple

I regularly provide analysis of the computing market, trends inside Silicon Valley, the current state of the smartphone wars. This week, I offer instead my observations on Apple. Starting now…

The persistent view among analysts that Apple can (magically) go down market, whenever they want, is, in my view, utter nonsense. It’s the same as suggesting Burberry, for example, can be WalMart. Apple is high-end, high-margin, brand and image focused, and companies cannot magically transform their market approach. To remake their products, their hardware, to radically expand customer service and to effectively give up the lead role in their global retail footprint — all necessary to go down-market — would make Apple no longer Apple.

To those that point to the iPod as some sort of proof that Apple can go down market, even that is wrong. The iPod was (always) a high-end flash drive with minimal computing capabilities.

That Google continues to develop and support services optimized for iPhone is all you need to know about those who scream that IPHONE IS DOOMED. They are either ignorant or they are lying to you. Why do you continue to reward them with your attention?

Google’s biggest mistake was wildly overpaying for Motorola, which continues to be a noose around the company. The second biggest mistake, however, was saddling iPhone users — for years — with an inferior version of Google Maps. I am not the only one that now uses Apple Maps almost exclusively. I suspect they have learned their lesson, the hard way.

In the most recent Apple patent trial, Phil Schiller stated that “almost everyone” at Apple works on iPhones, not Mac. This is true. It’s also remarkable. The iPhone was an unexpected blessing for Apple, raining down more in profits than anyone ever imagined it could. But, Apple’s management team still doesn’t get the credit they deserve for effectively re-making Apple, once the Mac company, into the iPhone company.

The next iPhone will be just like the new Nokia Lumia 1520. Large display. Unapologetically plastic. Colorful. 20mp camera.

Apple will be forced to develop a “phablet” because the market wants larger display devices. For most, a phablet is simply a better alternative to buying both a smartphone and a tablet. This is especially true for Apple, with its over-priced iPad line. Steve Jobs intended iPad to rest in sort of that middle ground between laptop and smartphone. A great idea for those who can afford three devices. The vast majority of the world cannot.

iOS 7 is beautiful. There is a core design flaw, however. The world is eagerly embracing the visual web — Pinterest, Snapchat, the new Twitter. In an increasingly mobile, real-time existence, visuals convey a great deal of information in an instant. iOS 7 runs counter to this trend. Note that your iOS 7 device insists on using text even where visuals would obviously work better, such as when telling you the current weather. Jony Ive’s legend is no doubt secure, but I expect iOS will quickly evolve to incorporate more visual elements. Form should follow function and most of the time the market wins.

With Rockstar, Apple becomes a patent troll. Rockstar is absolutely no different from Lodsys. That said, there is absolutely validity to Jobs’ thermonuclear war. There was nothing available like the iPhone or like the iPad until the iPhone and iPad. Intellectual property and design should be protected and compensated. On this, I fully stand behind Apple.

I have covered the smartphone wars as long, as diligently as anyone on the planet. Nonetheless, despite the growth of iPhone and the global smartphone market in general, I never thought it would be easier for me to buy more and better software for Apple products than Microsoft products.

Nintendo is hurting. Sony is hurting. We recently discovered that Xbox may not even be a money-maker for Microsoft. The premiere gaming company in the world is…Apple? I know, shocking. At least for those of us who grew up on PCs and game consoles.

The new iWork is so bad primarily because of Apple’s insistence on a ‘one-size-fits-all’ software strategy, forcing the product to be the same on a smartphone, a tablet and a laptop. This will always fail. Giving it away won’t change how bad it is. The only question now is, how long before Apple abandons this silly notion and gives us a productivity suite that works well?

As bad as the new iWork is, Apple does not get the credit it deserves as a software company. iTunes may not be on every desktop, but its close. iOS is now on hundreds of millions of smartphones and tablets. Mavericks is on millions of laptops. Apple’s global software presence is approaching Microsoft’s. This was even recently unthinkable. Even more, Apple’s software is on a larger array of usable devices — tablet, phone, laptop, desktop, set top — and built for multiple modes: touch, keyboard and voice. Remarkable achievement.

Every tech blogger I read, and I think I read them all, is a poor stock analyst. Please do not buy or sell stock, whether $AAPL, $AMZN, $GOOG or other, based on what a tech blogger says. Ever. They are cheerleaders. Save your money.

The next Apple app revolution will be…email.

Email, that boring, dated, derided yet almost universal tool, used — with great reluctance — for personal and professional reasons, is on the cusp of a revolution. At least, I hope so. Here’s an example of what I think Apple will do — what I think only Apple can do. Use the Open Table app, for example, to make a restaurant reservation. Now imagine that the reservation confirmation email you receive contains visually appealing, pre-embedded Yelp reviews of the chef’s best dishes, a PassBook coupon, Facebook credits, Foursquare check-in rewards, your friends list for those having dinner with you, and Apple Maps directions to the restaurant. This is all contained within the email. All secure because each ‘chunk’ of personalized app data is run only through Apple servers. Speed, simplicity, convenience, enhanced benefits. Think Google Now, only on steroids, because Apple will allow its massive app ecosystem to take part. Delivering it all through iOS Mail servers is a nice little knife in Google’s side, as well. That’s my vision, at least.

I look forward to your comments on what you think is true and what you think are lies.

Next week: Truth and lies about Silicon Valley

UnderArmour Deal Shows Fitness Tech Going Mainstream

If there was any doubt that fitness measurement, whether using wearable devices or sensor-equipped smartphones, is going mainstream it should have been settled Nov. 14 by UnderArmour’s purchase of startup Map My Fitness for $150 million.

Of course, devices such as the Fitbit or Nike FuelBand and associated fitness apps for iPhone and Android have been around for a while. But each of these existed in its own cozy ecosystem, with the devices mostly talking to dedicated apps. Device-agnostic approaches as Map My Fitness, whose combination of fitness tracking and social networking communities includes Map My Run, Map My Ride, and Map My Walk, are integrating the sensor of your choice into a broader system of fitness and lifestyle tools. They are your personal Internet of Things.

We are just at the beginning of this trend, which is being driven both by culture and technology. Some key technology developments and making fitness sensors cheaper, more ubiquitous, and more versatile. The M7 chip in the iPhone 5s (also, the new iPads, though their larger size makes them less practical as fitness devices) can continually record motion data from the accelerometer, gyroscope, and compass while consuming only a minuscule amount of power. The Motorola Moto X has similar sensor-based capabilities. Dedicated fitness sensor devices are also getting better, with the $150 Jawbone UP24 the latest to hit the market.

Even relatively diminutive smartphones are too big for a lot of fitness uses. Do you really want a phone in your pocket while you work out on an elliptical trainer? But the tiny size and low power consumption of these new sensors enables the design of very small wearable devices capable of continuous monitoring and logging. Another technology, Bluetooth LE (for low energy) lets wearables upload data to smartphones, tablets, or PCs as soon as they come into range.

Built-in GPS is still impractical for small wearables because of the size of radios and antennas, the need to be positioned with a clear view of the sky, and, most important, the significant power demand. But a wearable device could download an initial position from a phone’s GPS, then use inertial navigation information from the gyroscope, accelerometer, and compass to track its course.

App developers have only begun to scratch he surface of the opportunities provided by a new generation of sensors. Apple has enhanced the iOS programming interfaces to let developers take advantage of M7 data, but relatively few apps take advantage of it just yet. Developing more advanced software will be the key to making sensor-based technology a part of everyday life. “There’s lots of sensor data,” said Kevin Callahan, vice president for innovation strategies and co-founder of Map My Fitness (in an interview before the UnderArmour acquisition was announced.) “The question is how to give it back to the user in a compelling way.”

With the increasing miniaturization of sensors and radios, the dedicated device may eventually disappear altogether as inexpensive sensors are built into our bicycles, runnings shoes, and jackets. Says Callahan, “Two years from now I expect everything to be embedded.”

Mocking Our Customers (Part 2)

Recap

I hate people who are intolerant. ~ Dr. Laurence J. Peter

I hate intolerant people. ~ Gloria Steinem

Last week I wrote about intolerance — how we tend to believe that everyone is entitled to their own opinion, unless, of course, their opinion is too different from our own, in which case they are extremists, and really, extremists aren’t quite as human as we tolerant people are, right?

The surest way to corrupt a youth is to instruct him to hold in higher esteem those who think alike than those who think differently. ~ Friedrich Nietzsche

Truth is, intolerance is our natural, default position.

Most people can’t understand how others can blow their noses differently than they do. ~ Ivan Turgenev

The Stain Of Disdain

Intolerance spills into every part of our lives, including our relationships with our current and potential customers.

If ever I become a big, successful company, I hope I’m not real mean to my customers — like I am now. ((Inspired by Deep Thoughts by Jack Handy))

Hubris

“But wait, wait,” I hear you say, “I am not like that. I treat my customers with respect. Or, at least, I treat them with all the respect they deserve.”

Yeah, right. I’m quite sure that you cherish the greatest respect towards everybody’s point of view — never mind how comical that point of view may be.

Be honest with yourself. Think back over the times you and your co-workers have stood around the virtual water cooler, mocking the stupidity of your customers; bemoaning how they don’t “get” your product or service.

A bad workman blames his tools. ~ Chinese proverb

True enough. But the reverse is true too. A bad toolmaker blames his customers.

[A]s designers and engineers in general, we’re guilty of designing for ourselves too often. ~ Bill Moggridge

Bingo.

To badly paraphrase Charles Schultz of Peanuts fame, we love people — it’s our customers we can’t stand. ((I love mankind—it’s people I can’t stand. ~ Charles M. Schulz))

“If you want to get to the truth about what makes us different, it’s this,” Bezos says, veering into a familiar Jeffism: “We are genuinely customer-centric…. Most companies are not…. They are focused on the competitor, rather than the customer.” ~ excerpt from The Everything Store

ID10Ts

Ah, but you’re not convinced. You need some concrete examples, eh? Well, let’s visit our favorite whipping boy, the IT department (but don’t console yourself by thinking that your department or your company is any better — ’cause it’s not).

IT not only holds its customers in disdain, they have informally codified the practice. Feast your eyes on a couple of the lovely IT Acronyms used to describe — well, used to describe you:

His machine was experiencing an I.D. Ten Type error. (Type it out with numerals: ID10T error. Yup, that’s you they’re referring to.)
PEBCAK (“Problem Exists Between Chair and Keyboard”)
PEBKAC (“Problem Exists Between Keyboard And Chair”)
PIBCAK (“Problem Is Between Chair And Keyboard”)
PICNIC (“Problem In Chair Not In Computer”)
POBCAK (“Problem Occurs Between Chair And Keyboard”)

Funny, right? Unless you’re the butt of the joke. Which you are.

What you discover about life’s shell game is that it’s hardest to follow the pea when you’re the pea. ~ Robert Brault

You don’t like being treated like an idiot. What makes you think that your customers like being treated that way either?

Gods, Rational Beings and Human Beings

When we look at our clients, we make (at least) two egregious errors. First, we think that our customers should be just like us. Second, we think that our customers should be rational beings instead of human beings.

Gods Like Us

I’ve got sad news for you: You’re not a god and your customers are not meant to be made in your image.

Our customer’s will never be pitch perfect nor should we want them to be. If they were the same as us, what would they need us for? Rather, our customers should be IN HARMONY with us and it is WE who need to adjust ourselves to tune in to their needs, not the other way round.

It is our differences — the very differences that we find hard to tolerate — that make us and our products and services valuable to our customers.

Rational Beings Like Us

Logic: The art of thinking and reasoning in strict accordance with the limitations and incapacities of the human misunderstanding. ~ Ambrose Bierce

Consumers are not logical, rational beings. We are human and liable to human foibles. We are susceptible to advertising and lack of product knowledge; we fall prey to the need for instant gratification, etc. We are, in a word, imperfect.

[pullquote]Don’t make the mistake of conflating “imperfect” with “flawed.”[/pullquote]

But don’t make the mistake of conflating “imperfect” with “flawed.”

Human beings are a complex mix of heart and mind. We, the providers of goods and services, need to predicate our relationships with our customers on the basis of humanity and not upon the vanity of rationality. Expecting human beings to act as automatons is as silly — and as undesirable — as expecting fish to climb trees. Or drink in bars.

A fish walks into a bar. The bartender says, “What will it be?” The fish croaks, “Water.”

Human Beings Like Us

Just as it is in our client’s nature to do what is best for themselves, it is in our nature to do what is best for ourselves.

[pullquote]That’s not our job.[/pullquote]

But that’s not our job.

We’re SUPPOSED to be doing what’s best for our customer.

To forget one’s purpose is the commonest form of stupidity. ~ Friedrich Nietzsche

Problems are gifts.

Every problem has a gift for you in its hands. ~ Richard Bach

Gifts that we have to work very, very hard to unwrap. But when we take the time to do so, the reward is immense.

Every time you think your clients are stupid or whenever your clients frustrate you, you should be asking yourself why that is.

I don’t like that man. I must get to know him better. ~ Abraham Lincoln

Solving the basic disconnect between what the customer wants and what the customer is currently getting, is exactly what the customer is hiring you to do.

We are continually faced by great opportunities brilliantly disguised as insoluble problems. ~ Lee Iacocca

The further apart you and your customer are, the greater the opportunity for you to find a solution that bridges that gap.

Don’t find fault, find a remedy. ~ Henry Ford

Conclusion

Successful people are always looking for opportunities to help others. Unsuccessful people are always asking, “What’s in it for me?” ~ Brian Tracy

“But, but, but,” I hear you say, “this sounds like it’s hard to do.”

Yup, it’s hard to do.

It’s SUPPOSED to be hard, if it wasn’t hard everyone, would be doing it. The value — and the profit — comes from our doing the hard, complex work necessary to make our client’s life easier and simpler.

Money can be made when something looks easy, because easy is very hard to do. ~ Carl Schlachte

If your really want to acquire better customers, there’s really only one way to do it:

Be the change you wish to see in the world. ~ Gandhi

Next Week

In part 3, I will focus on a single example — how Microsoft, by disdaining and misinterpreting the importance of design, also dissed their end users.

Google’s Strategy with the Moto G and KitKat

I’m observing several interesting things from Google’s moves as of late. The first has to do with the recently launched Motorola G, premium spec smartphone at low-end prices. The Moto G has a $179 price point. This price range is a significant part of global smartphone sales in developing markets. See the slide below which shows the most recent snapshot of the global smartphone vendor market share.

Notice who is missing from this chart? Motorola. From meetings I have had with their teams it was made clear to me that Motorola wants to push to be a more global brand playing in more global regions than they are today. The release of the Moto G is a step in this direction. The handset fits the spec and price range that should make it attractive in the markets they choose to go after. Adding dual sim for India and Brazil makes them a potential competitor for Samsung, Nokia and other regional brands competing at the non-premium price points.

While I think the price is interesting, Motorola will be going up against local brands in markets like India and it will be interesting to see if they can compete with the more established local brands. Brazil, Russia, and other parts of Europe are likely targets as well.

The key for Motorola will be marketing. Right now their brand is not strong globally at a handset level and if they are serious about becoming a global player developing regionally relevant solutions, they need to build their brand in those areas.

KitKat

Several things have happened with KitKat that I have observed and found interesting. First, the UI seems to be a departure from the more geek centered focus and feel that prior stock versions of Android had. This happens to be one of the things I liked most about stock Android and Nexus devices. KitKat seems to be a OS transition from appealing to geeks to appealing to a more mainstream audience.

Second, it is much more deeply integrated with Google services. Each stock version of Android was always positioned as the best of Google but KitKat takes it to a new level. This is incredibly important. Google’s stock Android solutions get installed on the majority of mid-low range smartphones and tablets. Most vendors just take the generic AOSP, load it on their hardware and go to market. Only a few vendors actually change or ‘skin’ their Android devices with custom software work before they go to market. Samsung, HTC, and Xiaomi being the notable ones. For most other vendors stock Android is what gets shipped. This is why over the past 6 month’s Jelly Bean (version 4.1x-4.3) is now used on nearly half of all devices that have been shipped over the same time frame. Many new devices going to market run the latest OS. We don’t see this in the US but it is true in emerging markets.

For this reason, I feel Google is trying to get a handle on Android’s fragmentation as it specifically relates to their services. As I, and several other analysts have pointed out, Google’s services are practically nonexistent in many emerging markets where locals favor local services over Google’s. This is anything from email, social services, messaging apps, and more. My read with KitKat is that Google understands Android’s growth in the low-mid range is where the volume is and they have yet to capitalize on that market from a Google services standpoint. Android had for the most part been hi-jacked by the low-end and adding no value to their ecosystem. I believe KitKat is a step in the direction to address that.

How I use the iPad Air

I spend most of my working week being extremely mobile. I spend more time mobile during the work week than I do being stationary. This is why, for me, the iPad Air is the perfect mobile computing companion.

Now, I make the above statement recognizing that I still need a bigger screen, mouse, and keyboard computer in my life for my more in depth creation of content like presentations, reports, columns, etc. As a percentage of my weekly schedule those tasks are not 100% of the time. In fact they are less than 50% of the time. The rest of my working time requires me to take meetings, attend events and conferences, network with thought leaders, and more to keep close to the heartbeat of the technology industry.

Portable vs Mobile

I need a traditional PC in my life for a number of dedicated tasks where a workstation environment is necessary. For these tasks I have a MacBook Air and most of the week it stays docked and connected to my large screen monitor. What I have come to realize, as I think about the notebook form factor specifically, is that the notebook is simply a portable desktop. When you think about it this way then you ask the question who needs a portable desktop? There are many mobile workers who need a portable desktop / workstation for their jobs but I promise you it is a lower amount than people think.

This is what makes certain class of tablets ((not all tablets are created equal and not all tablets can replace a PC for the mass market.)) very interesting. They fill the role of the mobile computer for the worker who does not need a portable desktop to be a part of their mobile work flow. I realize that for a good portion of my weekly work time this profile is very much me. But prior to the iPad existing I did not know this about myself. The portable desktop was the only mobile computing solution I had so that is what I used. Now that there is an alternative, I’ve concluded there is a better mobile form factor for my mobile workflow.

Because I bounce all around the Silicon Valley taking meetings with all kinds of people and companies I generally only take the iPad Air with me when I know I will not be stationary for long periods of time. In this mode, the iPad Air is used to do things like take notes, keep up on email, twitter, and show presentations or data. But if a need comes up for me to edit a presentation, or work on a column, or edit a report I can do that as well.

Every now and then a day comes around where I will be stationary for the good part of the day either in a few long meetings or one all day meeting in the same location. When this comes around I bring my notebook instead of my iPad Air. The primary way I decide whether to tote my notebook around or carry my iPad Air around is whether I will be stationary or mobile a greater percentage of the day.

Computing Solutions Not Computing Islands

For my work flow, the iPad Air and a MacBook Air is kept in sync through iCloud and is the ideal multi-screen mobile computing solution for me. Originally, my belief was that the iPad Mini would be more of a second screen companion to a heavy notebook user like myself. But the larger screen of the iPad Air and now its new thin and light form factor, favor me using it as a replacement for my notebook when I am highly mobile. For me, this has become a real revelation.

With the new iPad Mini Retina being available, I know many are still wrestling with which iPad to get. My true sense is that for those computer users who are stationary for long periods of time and use a notebook or desktop in that context they will favor the iPad Mini as a companion to that computing context. But I share my experience for those who are more mobile than they are stationary and are looking for a device that lends itself to more heavy lifting while still being extremely mobile friendly. Which for me is the iPad Air.

Microsoft’s Bing Is Bad Strategy

There’s been a lot of talk, of late, of Microsoft possibly abandoning Bing. Lets’s set aside the reliability of those rumors, the political intrigue involved and the practicality of implementing such a plan and look, instead, at the overall strategy that underlies Microsoft’s Bing.

In my opinion, Bing is, and has always been, bad strategy, plain and simple. Here’s why.

Money Instead Of Strategy

In warfare, if the commander values his troops, he expends brains instead of blood. Likewise, in business, if a CEO values his profits, he expends brains instead of cash.

Microsoft’s ironic problem is that they have far too much money. It’s just easier for them to throw money at a problem than to think it through. It’s been estimated that Bing has cost Microsoft as much as 17 billion dollars. There isn’t another company in the world that would have been willing to lose so much money without re-evaluating their strategy. Microsoft is like a despot that has unlimited manpower. They just keep throwing their troops (money) onto the spears of their opponents in the hope that they will, eventually, blunt those spears.

Attacking Where They Are Strongest

In war, the way is to avoid what is strong and to strike at what is weak. ~ Sun Tzu

Well, “duh”, you’re saying. Of course one wants to avoid attacking where one’s opponent is strong.

But isn’t that exactly what Microsoft is doing with Bing? Google search is where Google is at its best. Attacking Google Search with Bing is like marching one’s troops directly into the mouths of the enemy’s cannons.

Siege

A siege is the most uneconomic of all operations of war. ~ B.H. Liddel Hart, Strategy

Thus the highest form of generalship is to balk the enemy’s plans; the next best is to prevent the junction of the enemy’s forces; the next in order is to attack the enemy’s army in the field; and the worst policy of all is to besiege walled cities. ~ The Art of War

In my opinion, Bing vs. Google Search is the equivalent of a weaker army besieging a stronger army. It makes no sense.

Don’t get me wrong. It’s not pleasant for Google. They have lost some market share. But it’s far worse for Microsoft. Microsoft is bleeding money while Google goes merrily along doing what Google does best. Google is sitting behind its moat and its walls and they are laughing all the way to the bank while they watch Microsoft fruitlessly bleed themselves by banging their heads against Google’s impregnable walls.

Attrition

Attrition is a two-edged weapon and, even when skillfully wielded, puts a strain on the users. ~ B.H. Liddel Hart, Strategy

Microsoft is losing bucket loads of money on Bing and they’re gaining absolutely nothing in return. They have no hope of unseating Google in search. They’re not causing Google to lose any appreciable profits. Their strategy is not only backfiring, it’s actually counter-productive because it’s HELPING Google.

If Bing didn’t exist, Google would almost certainly be facing anti-trust and monopoly scrutiny from governments around the world. By subsidizing Bing with 17 billion dollars, Microsoft is actually HELPING Google by removing the onus of monopoly from their shoulders.

Some strategy, eh?

Conclusion

I seriously doubt that Microsoft is going to abandon Bing. They’re a proud and stubborn company. But as far as pure strategy goes, I can’t see it. It makes less than zero sense. It’s both a negative for Microsoft and a positive for Google. It’s not a strategy — it’s the antithesis of a strategy.

So, what do you think? Agree or disagree? Let me know in the comments, below.

Postscript

I often use quotes from my twitter stream in my articles. If you’re interested in following me, you can find me @johnkirk. I look forward to seeing you there.

A Sneak Peek at a Super Secret Apple Product Plan!

Way back in 1994 when I was working for Motorola, I was fortunate enough to be invited to a breakfast meeting between the then CEO’s of Apple and Motorola, Michael Spindler and Gary Tooker. A lot of preparation goes into these meetings–just getting the people in the room saying the things you need them to say is the objective. Weeks of work went into a single two hour breakfast in a private hotel suite in Austin, Texas. Everything was supposed to go by the script–one that we had hammered out with our Apple counterparts the week before. I say “supposed to”, because at the meeting Gary let slip that we had a full set of Apple product roadmaps for everything Apple was planning to make. Mr. Spindler was not happy to find this out.

In the way only the Germans can do so well, he let his displeasure be known; his face became red and he began using giant compound teutonic words sprinkled liberally with what sounded like “scheisse”. Now, we came by those roadmaps through our own hard work: listening, comparing notes, guessing a bit, reconfirming… our salespeople did their jobs recreating something that Apple never shared with us explicitly. All Mr. Spindler did through his reaction at that meeting was tell us we were right. Which is why clever men like Gary say off-script things to men like Michael (much to the chagrin of lowly staffers like me). The general lesson was not lost on me though. If you are conscientious and careful you can reconstruct super-secret product roadmaps and plans even when your customer is trying valiantly to keep them from you. Even though times have changed at Apple and they have become even more secretive, it is still possible today.

To try and make a modern Apple product map you have to realize at least five things about their company:

1. Right angles are to be despised
2. The experience of a product is all that matters
3. Technology is always in service to an experience
4. When a product should be built is far more important than if a product should be built
5. Money can be made when something looks easy, because easy is very hard to do

So what does this all mean when taken together? First, a strong opinion about the central experience is absolutely required. Imagine hours upon hours of discussion on how a thing should feel from its heft, to an edge, to the way it must respond, before ever deciding the “how” of achieving that experience. Secondly, Descartes is not welcome in Cupertino. The one thing you will probably not find at the heart of the most secret design thinking at Apple is a nice X-Y grid with specifications rising up and to the right on to infinity. Cartesian thinking carries with it an implied dualism–MIPS per millimeter, or milliwatts per hour, for example, and human experiences tend not to fit that neatly on a grid. Experiences tend to overlap each other, as do the capabilities of a piece of technology, so the product plan must be capable of showing the overlaps in a way that encourages thinking about a requirement’s relationship to the whole, not a part. To be sure, Apple will happily show off specs and classic X-Y charts after the fact, but it is highly unlikely they design a product that way. Everything must point back to the experience, that is the guiding principle.

Imagine Steve Jobs and Jony Ive way back in 2002, out for a walk. Steve is out front Jony is a step or two behind listening respectfully. Steve reaches into his back pocket and pulls out his iPod. He says point blank that he wants the same experience he has with his music (namely all of it, right here, right now in the pocket of his blue jeans) for the entire internet. The thing he wants is the entire internet in a pocket. That discussion sets a boundary on an experience that becomes inviolate. Pockets have certain sizes because hands fit in them. Hands have certain ratios such as the distance a thumb can rationally travel while holding something. The internet to most users means a browser, so a no compromise handheld browser must be dreamed up. How do we navigate? Click wheel? And on and on… no one goes near a piece of technology until after the experience is fully defined and it fits inside that sacrosanct bubble that is the prime directive. We could imagine a development timeline at Apple being 80% debate about the experience and 20% mad dash to get the thing out the door.

Put it all together and you get something that probably looks like this:

1: Center: the experience
2: Next layer: Vital characteristics of the experience
3: Next layer: Enablers of those characteristics
4: Next layer: Technologies that are required
5: and so on…

This is obviously a simplistic view, but taken together you can see how Apple could decide to wait until 2007 to release the “internet in your pocket” iPhone. If the wedges aren’t in place to deliver the experience you wait, and that might take years. You can also bet that if such a plan existed, only a handful ever see a complete one. Each product area in the company focuses on its piece not necessarily seeing the whole, or only as much of it as required to get the job done. Plans like these can keep secrecy at a maximum. There is also a certain beauty in a product plan like this because it keeps everyone maniacally focussed on an experiential outcome.

These charts can and do get enormously complex but that is what is required to make an experience look easy.

And easy is the best way to make good money.

Finding God In Our Smartphones

“Out of clutter, find simplicity. From discord, find harmony.”
– Albert Einstein

Smartphones have changed our world. Wearables will change our selves. Together, these amazing devices represent some of humankind’s greatest work, integrating the absolute leading edge of technical prowess, computer engineering, manufacturing skill and materials science. I wonder also if they are bringing us closer to God.

I confess, I do not know the answer.

Silicon Valley is about money, not faith. Real-time, not eternity. Change, not permanence. The worship that occurs here is typically at the altar of wealth, intellect, and luck; a place where residents proudly wear their atheism on their sleeves, and where the obviously religious are, if not looked down upon, then viewed the way far too many view obese people — broken, not quite fully evolved.

The spirit finds a way.

At the intersection of smartphones and wearables is a locus of desire to know ourselves, improve ourselves, celebrate ourselves. And yet, through these devices we are reminded how fully connected we are to one another, and soon, to all things. This strikes me as a form of grace.

At first glance, this notion seems incongruous. With smartphones and wearables, we post in real-time what we ate, how much we weigh. We tweet our passing thoughts on all manner of topics. We update our Facebook page to sanction our latest pleasure or most recent transient annoyance. We take pictures of our self, then another, then another, and display them all for the world to see. We actively seek the affirmation of nearby friends and faraway strangers, asking them to affirm our actions, no matter how small or fleeting.

We may all be, in this age of miracle and wonder, at our most vain.

Nonetheless, that fire hose of data gushing from these personal computing devices lays bare our very human failings, our strivings and our mortality. What comes after that? At the time of our greatest technical and intellectual advancement, do we merely expose ourselves as insufferably common, or are we (unknowingly) unlocking the fullest truth of ourselves?

The very tools used to elevate our physical and intellectual selves, helping us to be the very best we can be, may ultimately serve to remind us that without a equal focus on the spiritual, it’s all for naught.

Consider that with smartphones, that which was once physical is now digital. Apps, tweets, music, movies, these are abstractions made real. We are contented with their ephemeral realness. Our very best technology, then, may be edging us closer — shaman-like — to bridging the physical and the virtual, and possibly to accepting the spiritual.

Our most advanced personal technologies are not merely uplifting, but guiding. We track everything, or soon will. In the morning our devices will remind us to eat right, to walk 10,000 steps. In the evening they will ask us if we gave due attention to our children, our spouse and our dreams. The daily rituals of monitoring what we do and how we improve may in fact help us find our way onto a narrow, possibly righteous path to goodness.

Yes, we can instantly access all manner of fetishism, violence, pornography, but also the greatest of humanity — and one another. The fragments of humanity, good and bad, are embedded within our technology, and resident inside our iPhones and Fitbits. Humans seek, we care, we dream, we sense there is far more beyond our self, our neighbors, even our world. This is true even if, at least in this infant stage of our meta connectivity, we initially turn such powers upon ourselves.

With smartphone in hand, we are connected to nearly everyone, from anywhere, at any time, and never truly alone. Wearable computer bracelet strapped tightly against our skin, the truth of our self is brightly flashed before our eyes, including our mortality. These devices will change us.

Which may not lead us to God but certainly should lead us all to be better.

Android as the Platform For Commodity Electronics

In the most recent episode of my podcast with Benedict Evans we discussed the post PC era and Android’s role in this post PC era. We touch on a number of points but during the course of the conversation an interesting thought hit me. While many look at what Android is doing in phones, what it is enabling in tablets, and even broader with the internet of things is perhaps the most interesting.

It led me to state on the podcast that Android’s real role is as the smart platform for commodity connected electronics. Over 80% (conservatively as it is likely higher) of Android’s market share is made up of mid-low range cost smartphones, tablets, and a host of other electronics. What is growing, however, is Android’s presence on appliances and other non-computing devices. In essence Android is shaping up to be more like a bios, or a debugged (often poorly debugged) platform.

When I talk to companies looking to make connected appliances it seems their options are either standard Linux or Android. The argument against standard Linux is that once they implement it they are often responsible to maintain or sometimes creating driver support. For example, a company that creates an appliance with bluetooth connectivity running embedded Linux will often be responsible for doing the updated software work and compliance when a new version of Bluetooth comes up. Embedded Linux simply requires more software development work on behalf of the OEM in most cases. Where with Android, Google does this for the industry.

This is why Android is making its way as the standard platform for commodity electronics. Things like point of retail screens, or running on coffee pots, refrigerators, commodity TVs, tablets that are only e-readers, or movie players, etc. OEMs can make devices running Android on low-cost hardware and not have to worry about managing the software.

A recent SoC company I spoke with at ARM Tech Con last week shared with me that they are shipping a Cortex A5 (a low-end smartphone chip) as a tablet reference design for white box OEMs in China who are taking this platform to market in about two weeks. Nearly all SoC vendors I speak with are recognizing Android as the default platform for electronics for the reasons I mentioned above and most of them are of the commodity nature.

This is actually a good thing. Something like this is needed to develop the future of our connected devices. A platform was needed and if not for Android/Google who would have owned it and enabled it. Google did this because if it wasn’t for them it would have likely been Microsoft with embedded CE. Only Microsoft charged 7-10 dollars for that which makes a huge difference in a commodity electronics market.

The real question is how–or even if–Google can tie any of this to value for Google. It is reasonable to believe that Android may run on tens of billions of connected electronics with only a fraction of those actually adding any value to Google’s ecosystem, business initiatives or revenue. And that may be Ok.

Tablets and the Decline of TVs

Not long after the iPad came out I began to wonder just how much of an impact the iPad would have on the PC market. For 15 years, much of our research at Creative Strategies has looked closely at what we call the “screens of the digital lifestyle.” In the 1990’s it became clear that the two major screens for most people were the TV and their PC’s. With the introduction of the Blackberry in 1997, for some a 3rd screen was added to their mix and when the iPod came out many added this screen to their lifestyles too. Of course, once the iPhone hit the market the smartphone revolution was on and for billions of people today, the full feature phone or smartphone has become the most ubiquitous screen in our lifestyles next to the TV.

But since the iPad has come out it has become clear that this versatile screen has had a major impact on one of the major screens in our digital lifestyles, that of the PC or laptop. In 2010, the year the first iPad shipped, we were selling about 390 million PC’s a year world wide. When we end 2013, we will be lucky if we sell 300 million. Most analysts attribute this decline in PC and laptop sales to the role tablets have played in replacing the need for a PC or laptop for many people.

There is another market that it has disrupted too. I recently received a very interesting press release from IHS that gives their forecast for TV sales. Here is their perspective and numbers on the decline of TV sales.

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TV Market Declines Again in 2013 as Sales in both Developed and Emerging Regions Decrease

Following a dismal third quarter, the outlook for global TV shipments appears even dimmer in 2013, with shipments now forecast to fall by 5 percent, marking the second consecutive year of decline.

Global shipments of televisions are set to slide to 226.7 million units in 2013, down from 238.2 million in the previous year, according to the latest Worldwide TV Tracker from IHS Inc. Every type of television will suffer a decline, including the major categories of liquid-crystal display (LCD), plasma TV, cathode-ray tube (CRT) and rear projection.

This follows a 7 percent decline in 2012, when shipments fell from 255.2 million in 2011, TV Systems Intelligence Service.

Shipments previously were expected to decline by 2 percent this year.

“A wide range of factors are conspiring to undermine television shipments in 2013, from economic weakness and market saturation of flat-panel TVs in mature regions, to plunging CRT sales in developing countries,” said Jusy Hong, senior analyst for consumer electronics & technology at IHS. “This is all adding up to a second consecutive year of decline for the television market.”

The dominant LCD TV segment will see shipments decline by 1 percent. The smaller plasma segment will suffer a sharp 27 percent decline.

The moribund CRT segment will decline by 40 percent. Meanwhile, the already infinitesimally minute rear-projection TV segment will dwindle to nothing this year.

The third quarter’s not the charm

Shipments in the third quarter of 2013 declined by 7 percent compared to the same period in 2012. While shipments rose 12 percent compared to the second quarter, this came during a time when TV set shipments normally grow as the Christmas season approaches.

With shipments also having declined on a year-over-year basis in the first and second quarters, the third quarter decrease ensured the global TV market would drop again for the full year of 2013.

Mature markets slow down

The biggest reason behind the shipment decline this year is the continuing global economic recession and maturity of the TV market in advanced regions.

The Western European and Japanese TV markets have been declining for three consecutive years since 2010. The North American market has been shrinking as well, dating back to 2011.

Emerging markets are underwater

Meanwhile, the TV markets in Asia-Pacific, Eastern Europe, and the Middle East and Africa, which are regarded as emerging regions, have also been contracting since 2011—but for different reasons than the mature countries.

In the emerging regions, CRT TVs are disappearing from the market, causing overall shipment to decrease. Because CRT sets are the cheapest option, this disappearance is having a major impact on overall sales. Low-income consumers in these regions often cannot afford more expensive LCD TV sets.

Television vendors are increasingly reluctant to sell unprofitable, cheap sets, such as CRTs, or LCDs that use the older cold-cathode fluorescent tube (CCFL) backlighting technology. This is narrowing the choices for cheaper televisions among consumers in emerging economies. As a result, consumers in these regions are holding off on television purchases until pricing for other types of television sets decline to affordable levels.

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I am sure that their perspectives on the decline of TV sales is accurate. However, I would suggest that there is another reason too. I think the impact of the iPad and tablets as portable media players–and in some cases when using something like a Slingbox as an actual TV–that the iPad and tablets have played a role in the lower demand for TVs as well as PCs. We are hearing that for many who would perhaps buy a TV for their bedroom or even a kids room, an iPad or tablet is actually preferred.

People can lay in bed or sit in a chair and watch their favorite show via Netflix, Hulu, etc. And with more and more TV networks directly streaming their programs over the Internet or through dedicated tablet apps, these tablets will become more TV like in the future.

Homes used to have two or three TV’s. But more and more we are seeing a single large flat screen TV bought for the living room and the iPad or tablets are becoming the extra viewing screens for many that can be used anywhere in the house instead of putting another TV set in a dedicated room.

As for emerging markets, as the above report points out, vendors are pulling back on making cheap CRT’s in these markets and these folks can’t afford the flat screens TVs. So for many a tablet will serve as their PC and TV, something that has not really been factored into most PC and TV decline models yet.

Within six months of the iPad hitting the market, it became clear to many of us that it had the potential to disrupt the PC market and over three years this has proven itself out. I don’t think any of us saw its potential in disrupting the TV market back then, but if you look closely at the declines in demand for TV’s, it is hard not to consider the fact that the iPad and tablets are just as disruptive to this market.

Apple Support: The Good, the Bad, and the Ugly

movie poster (IMDB) See update below

Apple is a company that inspires both delight and dismay in its customers, sometimes both in the same person and on the same day.

First the good news. My 27″ iMac had been acting weird since I installed Mavericks. It would occasionally lock up for no reason and then would take forever to reboot.Then it started loading an obscure process at bootup (something to do with mounting an audio CD) and I could watch in the Activity Monitor as it swallowed up all my physical memory. I decided to try reinstalling Mavericks, but it would repeatedly hang during the installation. I couldn’t go forward and I couldn’t go back.

I made an appointment at the local Apple Store, where the tech at the Genius Bar said that if I had a current backup, the simplest solution would be to reformat the hard drive, reload the OS from the store network, then restore from backup.It took less than 30 minutes to complete a clean install, and was free.

Try doing that with any Windows machine. Apple Store service is, without doubt, one of the best reasons for buying an Apple product. If Apple charges a premium for Macs–and that’s a dubious contention on a feature-for-feature basis–the Genius Bar alone is worth it. I’m pretty good at fixing Macs, but it has saved me several times.

Then there’s the bad and ugly: Apple’s total lack of transparency or honesty regarding problems with its software. Mavericks users have reported a range of issues, not terribly surprising for a new OS release, and by far the worst of them seem to involve the Mail application. Gmail users reported that the new application was incapable of handling Gmail folders properly. Whether this was a bug or a feature is not entirely clear–Mac Mail has always had a tenuous relationship with Google’s idiosyncratic approach to the IMAP protocol. But it obviously left a large number of Mac users upset. The official response from Apple: silence.

snell_tweet There were reports of many other issues. Jason Snell, the editorial director of Macworld was horrified to discover that the entire contents,of his Exchange mailbox had simply vanished. I found that Mail was no longer appended a signature to my outgoing messages on one of the two Macs I have updated. When I tried to fix the problem, the program would not let me choose any of the signatures it knew existed.

A search of Apple support forums showed I was far from alone. But if Apple monitors its own forums, it doesn’t bother to respond. I tried a couple of the workarounds other users suggested, but so far no happiness.

Microsoft may not be willing or able to help you with a malfunctioning PC, but it is a lot more forthright about bugs. Serious issues get acknowledged in the Microsoft Knowledge Base, along with word on fixes and, if necessary, workarounds. In particular, Microsoft is far more forthcoming about security issues. (Apple typically issues security patches once a month without detailing what has been fixed; Microsoft issues patches on a similar schedule, but publishes a detailed list of what issues are addressed.)

Apple Insider reports that Apple has begun letting developers test a new version of Mail.app that addresses problems whose existence it has not yet acknowledged. Hopefully, it will show up someday soon as OS X 10.9.1 with little or no explanation. And maybe it will fix the Gmail problem and maybe it won’t.

It’s amazing that a company that is so good at delighting customers at the Genius Bar can be so pigheaded about helping users with the sorts of software problems that plague every major new release. A simple acknowledgement of “we know about it and we are working on it” would go a long way toward assuaging frustrated users. But that’s not the Apple way.

UPDATE

About the time I was posting this, Apple began pushing out an update to Mavericks Mail. As usual, Apple did it without announcement (other than this terse bulletin posted at Apple support) and this update notification (if you are subscribed to auto updates):

mavericks-mail-update

Preliminary reports suggest it addresses most Gmail issues. It does not fix the signature problem I encountered.

While I salute Apple for addressing the Gmail problem promptly, I continue to be puzzled by the company’s insistence on being so damn mysterious about such things.

The China Smartphone Report

This is a high level overview of the Chinese market and some of the interesting trends we see in the region with smartphones.

Chinese consumers remain a mobile first set of consumers and in many cases mobile only. For the vast majority of Chinese consumers their only access to computing is coming from their smartphone. It is the only way for them to connect with each other and the broader world. It is how they are communicating, playing, learning, and more. For these consumers the smartphone IS their computer and may be their only computer.

Chinese consumers are being shaped by mobility and the rest of the world should take notice of how the region develops as a mobile first continent. We expect many similarities over the coming years with younger demographics in many other regions as well.

Table of Contents:
– Mobile Domination
– Smartphone Pricing
– Retail Channel
– Apps and Media
– Highlight: Xiaomi
– Concluding Observations and Takeaways

Download the Report as a PDF. Right Click and save as to download or click to view in browser.

Tech Intolerance (Part 1)

There’s something I don’t understand… there is this thing that people do – a lot of people – that I just do not understand and I will likely never understand…it’s been going on for years, almost a decade now, and it just doesn’t make a lick of sense… It didn’t back then… It doesn’t now:

Why do people buy Apple products? (((A)t the end of the day, I just don’t get it… there are droves and droves of otherwise really intelligent and competent human beings out there that will line up for a tablet with a half-eaten fruit on the back… There is no amount of smoothness nor simplicity that is worth opening my wallet twice as wide… This has been called the “Apple tax” for as long as I can remember… It’s absolutely mind-blowing to me that anyone on this Earth and in this economy would buy an iPad mini and pay the Apple tax simply because it’s Apple…At the end of the day, I can’t stop folks from burning money.

If you think the opinions expressed in this article are an aberration, feel free to read the 255-plus comments.))

This is but one example of intolerance. It could easily be reversed and applied to the Apple fan who disparaged Android or to any one of an infinite number of intolerant assertions.

The Twisted Path Of Intolerance

In literature as in love, we are astonished at what is chosen by others.” ~ Andre Maurois

In tech, too, we are astonished at what is chosen by others.

PREMISE: It doesn’t make sense (to me);
THEREFORE: If doesn’t make sense (for anyone).

PREMISE: There is no reason (apparent to me);
THEREFORE: There can be no possible reason.

PREMISE: You are not using (the) reason (I would use);
THEREFORE: You are unreasonable.

PREMISE: Any intelligent person would think and act the way I do;
FACT: You are not thinking and acting the way I do;
THEREFORE: You are not intelligent.

There are two types of people. People like me. And people who want to be like me. ~ The Intolerant Credo

CHECK YOUR PREMISES

Contradictions do not exist. Whenever you think you are facing a contradiction, check your premises. You will find that one of them is wrong. ~ Ayn Rand

Just because we don’t know, doesn’t mean it can’t be known.
Just because we don’t understand, doesn’t mean that it can’t be understood.
Just because we don’t have proof of its existence, doesn’t mean that it doesn’t exist.
Just because we can’t see it, doesn’t mean that it can’t be seen.
Just because we can’t fathom it, does not mean that it is unfathomable.
Just because we don’t get it, doesn’t mean that it can’t be got.
Just because it’s not right for us, doesn’t mean that it’s not right for anyone else.

Frantic orthodoxy is never rooted in faith but in doubt. It is when we are unsure that we are doubly sure. ~ Reinhold Niebuhr

LOCUS

The fundamental contradiction contained in intolerance is one of locus. We don’t understand others. But we can’t be at fault because we are smart. So we employ a form of mental Jujitsu. If we can’t understand you and if we are smart then you must be dumb.

To arrive at a contradiction is to confess an error in one’s thinking; to maintain a contradiction is to abdicate one’s mind and to evict oneself from the realm of reality. ~ Ayn Rand

We do not hear a persuasive argument; we cannot articulate a reason that explains the actions of others; we don’t see sufficient proof to overcome our convictions, so we conclude that OTHERS, not ourselves, are deaf, dumb and blind.

It is the equivalent of concluding that if we do not understand the theory of relativity, that Einstein must have been a moron. Oh, pardon me — I mean, a ‘moran’.

Money demands that you sell, not your weakness to men’s stupidity, but your talent to their reason. ~ Ayn Rand

THEIR reason, not OUR reason.

INTOLERANCE

For my grandfather, there were two kinds of people in the world: Those who agreed with him, and those who hadn’t yet agreed with him.” ~ B. Spira

It’s the usual thing of tech obsessives mistaking their tastes for that of wider public. ~ Charles Arthur (@charlesarthur)

Whenever something gets easier for the masses, there will always be a neckbeard there to complain about it. ~ H.C. Marks (@HCMarks)

Intolerance is not about living as we wish to live. It is about asking others to live as we wish to live. ((Inspired by Oscar Wilde))

Think for yourselves and let others enjoy the privilege to do so, too. ~ Voltaire

The intolerant refuse to grant others the right to think and decide for themselves. And perhaps more importantly, the intolerant refuse to grant others the right to be mistaken.

Freedom is not worth having if it does not connote freedom to err. It passes my comprehension how human beings, be they ever so experienced and able, can delight in depriving other human beings of that precious right. ~ Mohandas Gandhi

The intolerant ask the wrong questions. They ask: “What is right and what is wrong.” But when it comes to personal taste, there is no one single answer to those questions. There are as many answers as there are individuals residing on the planet. It’s not a question of what’s right, it’s a question of what’s right for us.

There are no right answers to wrong questions. ~ Ursula K. Le Guin

— The intolerant place the onus on others.
— The tolerant place the onus on themselves.

— The intolerant ask: Why do you not understand?
— The tolerant ask: Why do I not understand you?

When I don’t understand, I have an unbearable itch to know why. – Robert Heinlein

CHANGE

You can lead a horse to water, but you can’t make him drink.
You can lead a man to knowledge, but you can’t make him think.

You cannot overcome ignorance with knowledge.

The voice of reason is inaudible to irrational people. ~ Dr. Mardy’s Aphorisms

It has been my experience that the less we know, the more certain we become.

The truth is not for all men, but only for those who seek it. ~ Ayn Rand

It’s hard enough to acquire knowledge when we’re actively seeking it. It’s all but impossible to acquire knowledge when we’re actively resisting it.

There is nothing you can’t prove if your outlook is only sufficiently limited.” ~ Dorothy Sayers

Our ability to learn and change is, perhaps, only surpassed by our refusal to do either.

Human beings, who are almost unique in having the ability to learn from the experience of others, are also remarkable for their apparent disinclination to do so. ~ Douglas Adams

SO WHY BOTHER?

Men will always be mad, and those who think they can cure them are the maddest of all. ~ Voltaire

Why bother to counter the Trolls if we know that they are impervious to reason?

I can think of at least two reasons, one noble, one practical. First the noble.

The phrases that men hear or repeat continually, end by becoming convictions and ossify the organs of intelligence. ~ Johann Wolfgang von Goethe

It may sound overdramatic, but I truly do fear the memes of this world. There is reality and perception and in the world of nature, reality is the only thing that matters and perception is merely its shadow. But in the minds of men (and women), the laws of nature can be reversed: the shadow can engulf the substance, and perception can become reality.

It is therefore, in my opinion, crucial that we contest nonsense and falsehoods lest they be perceived as truths merely because they are repeated over and over again.

Who controls the past controls the future. Who controls the present controls the past. ~ George Orwell

Falsehoods must not be sanctioned either in word or in deed, but most insidiously, by one’s silence.

Evil requires the sanction of the victim. ~ Ayn Rand

Next Week

Next week I shift the focus to how we treat our customers — how our intolerance for the very people we are supposed to be serving undermines their satisfaction and sabotages our success. Further, I will attempt to introduce a time-tested method used to counter our all-too-human tendency to disparage our customers.