Tech.pinions – Perspective, Insight, Analysis Perspective. Insight. Analysis Thu, 27 Oct 2016 08:00:12 +0000 en-US hourly 1 The analysts at Tech.pinions share their thoughts, perspectives, and observations on the technology landscape. Tech.pinions – Perspective, Insight, Analysis Insight and Perspective on the Technology Industry Tech.pinions – Perspective, Insight, Analysis Microsoft’s Two-Pronged Creativity Push Thu, 27 Oct 2016 08:00:12 +0000 Continue reading ]]>

Microsoft has been refining its identity and strategy since Satya Nadella took over as CEO, and much of that focus and strategy has been centered on productivity and helping people get things done. That vision has married well with Microsoft’s renewed emphasis on business products and services but it has also reinforced the sense that Microsoft doesn’t get consumers or, at least, the consumer halves of its users’ lives. Microsoft has needed a rallying point for a set of efforts around consumer use cases, and it appears to have decided on creativity as the catchphrase for this push, as demonstrated at Wednesday’s event in New York City.

A two-pronged strategy, not a single device

That creativity push has two main strands to it and it’s important to look at the totality of what Microsoft announced to see the full picture. I’ve seen a lot of people talking about the hardware side of the announcements – the Surface Studio – as evidence this effort will be marginal but I think that misses the point. This new creativity emphasis includes both new creative tools within existing products like Windows and Office and new hardware in the form of the Surface Studio and the existing Surface product line. Microsoft seems determined to challenge Apple’s historic edge among professional creatives but it is also making a play for the creative element within a broad base of consumers and professionals.

Yes, the Studio is a high-end PC that’s going to be out of reach for the vast majority of consumers, most of whom will be left with traditional PCs that don’t have all the capabilities Microsoft showed off today. But the role of the Surface Studio is, arguably, to put a stake in the ground that says Microsoft is serious about serving the creative community, not to address the needs of its mainstream audience. However, by unveiling premium hardware that’s both beautiful and innovative, Microsoft is sending a broader message about its commitment to this space and to creativity more broadly.

Where most ordinary consumers will encounter Microsoft’s creativity push first is not in hardware but in software. Microsoft’s new Paint 3D app what looks like a GarageBand competitor called Groove Music Maker. Other enhancements in the new version of Windows 10 are more mainstream attempts to establish Microsoft as a creativity brand. Whereas the Surface Studio is a niche product, Microsoft now has over 400 million users of Windows 10 who will get the free Creators Update in the spring (or earlier, if they’re on the Windows Insider program). That’s a more mass-market strategy around creativity and has to be seen as part of the same concerted push to demonstrate leadership in this area.

Changing perceptions takes time

Though Wednesday’s announcements are a good start, it takes a long time to change deeply entrenched perceptions. Microsoft has its work cut out in trying to convince potential customers its products are more than just the workhorses they’ve always been for many. Workflows and cultures in many creative companies are built around Apple products and that won’t change overnight. However, Microsoft’s timing for these new products is great, coming at a time when Apple has been accused of neglecting its creative community. Apple, of course, has its own event on Thursday and will get an opportunity to make its case for its own vision of the future of computing.

It’s also easy to overestimate the role creative professionals play for Apple – though its Mac base was once heavily skewed towards these users, it’s long since broadened its appeal well beyond those users and well into the mainstream. Though losing creative professionals as a constituency might be painful for some at Apple, its mainstream appeal is what matters. It needs to shore that up with its announcements this week and beyond. In addition, Microsoft still largely relies on third-party developers to meet the needs of professional creators, whereas Apple does much more to meet those needs directly through products like Final Cut Pro and its add-ons, Logic Pro, and so on. Microsoft has Office for more generic work tasks but still doesn’t have a direct presence in the more creative fields specifically.

Lastly, the 3D enhancements to Paint and other apps were a mix of interesting and gimmicky. I’m not sure how many people are actually interested in creating 3D scenes of their trips to the beach but 3D animations in PowerPoint could enrich presentations in useful ways. The 3D push feels as much about finding a useful way to tie HoloLens into the consumer story as it is about creativity. Microsoft has put a lot of its next generation interface efforts into augmented reality with HoloLens but it has ended up with a product that’s far from mass market in nature. Its VR announcements on Wednesday are a concession to the reality that VR is where today’s mass market opportunities are, though Microsoft’s PC-centric push with $300-plus headsets will have a smaller addressable market than existing smartphone-centric solutions selling for around $100.

Cue Apple

Of course, now we all wait and see what Apple has in store Thursday. It obviously won’t respond directly to announcements made the day before but, as I wrote on Tuesday, it does need to demonstrate whether the next round of competition between Windows laptops and MacBooks will be defined by hardware performance advantages or by philosophical differences. Apple has been using the iPad lineup to meet many of the needs Microsoft has in its more PC-centric Surface products for Windows users, so it will be interesting how Apple sets its new MacBooks apart. Not only creative professionals but mainstream users have been waiting for updates to the MacBook Pro and either an update to or replacement for the MacBook Air. Apple’s event on Thursday will need to give them compelling reasons to upgrade to new devices rather than jumping ship to Windows.

]]> 17
Could AR be Apple’s Next Big Thing? Thu, 27 Oct 2016 08:00:10 +0000 Continue reading ]]>

In August, I wrote a piece suggesting Apple did not have any VR products that could hit the market any time soon. Since then, Apple CEO Tim Cook has gone on record stating AR seems…

This content is for Insider Yearly and Insider Monthly members only. Visit the site and log in/register to read.
Painting a Clearer Picture of the Global Smartphone Market Wed, 26 Oct 2016 08:00:22 +0000 Continue reading ]]>

Oftentimes, our peers in the analyst community put out press releases on category and vendor market share numbers and the true insight of the market gets lots in a set of very generic statistics. I…

This content is for Insider Yearly and Insider Monthly members only. Visit the site and log in/register to read.
Creativity Is the New Productivity Wed, 26 Oct 2016 08:00:04 +0000 Continue reading ]]>

Every three months, we are reminded of the doom and gloom of the PC market. As PC vendors report their earnings and various bean counters – I used to be one – publish their market share numbers, we are reminded replacement cycles remain long and consumers do not seem interested in upgrading.

I’ve discussed before what I see as a crucial step in breaking this process: stop talking about PC replacement and start talking about what the new PCs have to offer and the role they play in your portfolio of devices. This week, with both Microsoft and Apple holding their device events, I hope this is exactly what we are going to see.

If we look at the invites the two companies have sent out, there is not much to go on. Microsoft is a little more generous in giving us a taste of what the announcement will be. We assume it is a device event because of the time of the year, although the invite itself says, “What’s next for Windows 10”. We are also invited to “Imagine what you’ll do”, which is as fluffy as an invitation can be to open our minds to new possibilities. Yusuf Medhi, VP of marketing of the Windows and Devices group, urges us to “get ready to get creative”. So it would be safe to guess it is about a device that is going to focus on creativity.

Apple’s invite was even more cryptic, saying. “Hello again” — which many connected to the “Hello” used for the Mac launch in the 80s. Rumors have it we will see three different devices: a 13” MacBook and a 13” and 15” MacBook Pro. Aside from the device specs, what will be interesting is how Apple positions these new devices against the iPad Pro. As many of you will remember when the iPad Pro was launched, Apple had an ad that asked, “What if your PC was an iPad Pro?” Of course, while their focus was on the competing Windows devices, the question raised doubts in certain minds on what the role of the Mac will be going forward vs the iPad Pro.

Mobility Changed the Meaning of Productivity

I think it is important to look at how our workflow has changed over the past few years to understand what role different devices could play in our life.

According to the dictionary, productivity is a measure of the efficiency of a person, machine, factory, system, etc., in converting inputs into useful outputs. Productivity is computed by dividing average output per period by the total costs incurred or resources (capital, energy, material, personnel) consumed in that period. When we moved from analog to digital productivity and creativity were very much intertwined as thanks to computers we were able to do things we had not been able to do before and in much less time.

I strongly believe that mobility change the meaning of productivity.

The “connected anytime, anywhere” world we live in has put more emphasis on the speed of that output rather than the complexity or quality of it. Gone are the days when people put their “out of office” hat on and are not available while they are out. The only time I put my out of office hat on is when I am traveling in different time zones and it is really more to apologize in advance for the delay in getting back to people than warn them I will not be available. Whether through social media or email, mobility made it all about the timeliness of the information we create and exchange. Because of this, we have become accustomed to triaging our work on the go with devices that are very light weight, have smaller screens, and have, in more cases than not, built-in connectivity. While we might not be creating a full presentation on the go or might not be writing the next New York Times bestseller, we see what we accomplish in our day on the go as being productive. These devices have allowed for what used to be down time during travel or in between meetings to be an opportunity to keep up with what is going on at the office when we are not physically there. It has also created the opportunity to turn us all into control freak workaholics but that is a different story.

Work and Play is More Fluid

The other side of the coin for this always-on world is work and play are more blended. Both with content and tools, we cross boundaries all the time. Consumerization of IT, bring your own device, bring your own app, the cloud, and real–time collaboration are some of the result or the spark of such blending. This means when we look at our next PC/Mac to buy, we want to see familiar technologies we have come to love and depend on like touch, voice, high-resolution screens, fast processors, and even pen support. Having all the apps we use every day on our PC/Mac would also be great but, given that our phones are never far away from us, this is not necessarily a must.

Creativity Is All About Thinking Outside the Box

So, if productivity has more to do with our response time, making highly mobile devices more suited for it, what is creativity and what kind of devices does it require?

According to the dictionary, creativity is the mental characteristic that allows a person to think outside of the box, which results in innovative or different approaches to a particular task.

First, let me say I realize not all white collar jobs are created equal and require the same skills and tools. I also realize there are many verticals, from health to education that, depending on where you look, are either stuck in an analog world or are full on into a digital one.

If I consider how my job has changed over time, I cannot help but see the impact of creativity in what I do. I see my job as delivering insights and advice to my clients. That has not changed since I started over 16 years ago. What has changed is what I deliver and how. I used to engage in three main ways: writing reports, delivering presentations and taking calls. Today, while I continue to engage that way with clients, it is not the only way I deliver value to them. Social media, interactive webinars, podcasts, and blog posts are added to my output list. Having the ability to manipulate charts as I present using Pixxa, or to draw a mind map on my iPad Pro or Surface during a meeting, I am embracing new technologies and devices to make my workflow more effective. When I am not on the go, I appreciate a device that gives me a non-compromised experience. A device that allows me to be immersed in what I am doing whether that is combing through thousands of data points, following a tweetstorm, watching a live stream of an event or recording my weekly podcast or experiencing a mixed reality environment.

This is good news for PC vendors because, if I am not alone, it could mean consumers shopping for PCs will be looking to invest more money for that non-compromised experience. It is also good news for platform owners who will have another platform for consumers to engage with. This last point is, of course, particularly important for Microsoft who needs to continue to build engagement with Windows 10.

In order for this to happen, however, we need to see more than just a beautiful design, which has been the focus for many vendors. Looking like a MacBook Air is not going to be enough for users who really want to have a rich experience. The focus should be on pushing the boundaries of how hardware, software, and apps all come together. While this gives an advantage to the Microsoft Surface family, and Apple’s Macs,  over other manufacturers who do not control their entire destiny, I strongly believe this will be a win for the entire industry but most of all for the consumers.

]]> 14
The Indefatigable PC Tue, 25 Oct 2016 08:00:40 +0000 Continue reading ]]>

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

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

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

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

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

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

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

Another big reason for the PC’s longevity is that it has been on a path of constant and relatively consistent evolution since its earliest days. Driven in part by the semiconductor manufacturing advances enabled by Moore’s Law, a great deal of credit also needs to be given to chip designers at Intel, AMD and nVidia, among others, who have created incredibly powerful devices. Similarly, OS and application software advances by Apple, Microsoft and many others have created environments that over a billion people are able to use to work, play and communicate with on a daily basis.

PCs have actually never been stronger or more attractive tech devices—it’s more like a personal computer renaissance than a personal computer extinction. “

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

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

]]> 12
Context for Microsoft and Apple’s Events Tue, 25 Oct 2016 08:00:39 +0000 Continue reading ]]>

This week will see PC-centric events from both Microsoft and Apple, with Microsoft launching its latest Surface devices on Wednesday and Apple updating its Mac line on Thursday. As such, it’s interesting to think about…

This content is for Insider Yearly and Insider Monthly members only. Visit the site and log in/register to read.
Securing our Internet of Things Mon, 24 Oct 2016 08:00:51 +0000 Continue reading ]]>

If we learned one thing from the DDoS attack that took down many websites on Friday, it is we still have a long way to go when it comes to securing all the connected things in our lives. This particular attack used insecure devices like IP-connected cameras with weak security as tools to perform the attack. This type of focused attack is one way to interrupt internet service and could be used to take down, not just websites, but our payments grid or any number of things which could wreak significant havoc on our society. Let’s hope this attack serves as a wake-up call for the industry.

This whole ordeal caused me to think about the range of connected devices I have in my house and wondering about their security. Most of the devices I have, I have personally secured and I don’t have my DVR (one of the types of IoT devices used in this attack) connected to the Internet. In most cases, I know the security I have in place for my IoT devices but one in particular I had to look into more deeply–my solar panels. Our solar array is connected to our network so I can monitor how it is performing. We secured the log-in with a strong password but they can also be remotely accessed in case we need support from the company we purchased the system from. It was this remote access that I was not aware of the security measures in place.

In many cases, I was fairly aware of the security measures. I’m guessing most consumers are not. The challenge the industry has is to bear the burden of taking the necessary steps to provide increased security and encryption of these devices because the reality is many consumers will not know to take additional measures themselves.

Apple outlines the security measures in place for Homekit devices and this is a solid initiative to provide a framework for security. However, many of the companies selling connected refrigerators, thermostats, IP cameras, coffee pots, etc., are likely not to use just Homekit but other emerging standards as well. The burden of responsibility is on companies providing these consumer products to enforce either stronger passwords or two-factor authentication (or both) in order to make sure consumers are taking the nececcesary steps to secure their IoT devices so they can’t be used for malicious cyber attacks.

Interestingly, in this case, it wasn’t necessarily the fault of the brand selling the IoT products but the component company behind them. Hangzhou Xiongmai Technology admits its products were used in the attack as a malicous worm exposed the weakness in the default security in many of the products their components are found in. The company has said they have sinced patched this vulnerability and consumers should update their firmware if they haven’t already.

My concern with the state of the market right now is the companies rushing to capture a part of the growing connected and smart home market are not fully thinking through the implications of dozens of connected devices in consumers’ homes they may not secure correctly. Consumers, although they will say they want and understand the value of security, rarely take the steps to ensure their own security and privacy. This is why it is so important for companies to bear the burden of this for consumers where they can or making sure they help consumers step up the level of security around their connected products.

]]> 5
Podcast: Dell-EMC World, Le Eco Launch, Apple Car Sat, 22 Oct 2016 08:00:18 +0000 Continue reading ]]>

In this week’s Tech.pinions podcast Jan Dawson, Carolina Milanesi and Bob O’Donnell discuss the recent Dell/EMC World event, debate the potential impact of new Chinese content/device maker LeEco, and analyze recent news around Apple’s rumored car efforts.

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

]]> 0
Unpacked for Friday October 21st, 2016 Fri, 21 Oct 2016 08:00:44 +0000 Continue reading ]]>

Apple’s Eddy Cue says TV needs to be reinvented – by Carolina Milanesi At a Vanity Fair conference in San Francisco this week, Apple’s content guy, Eddy Cue, repeated something his CEO Tim Cook has…

This content is for Insider Yearly and Insider Monthly members only. Visit the site and log in/register to read.
Digital Assistants: Me Smart or World Smart? Fri, 21 Oct 2016 08:00:00 +0000 Continue reading ]]>

Digital assistants are hot, that much is clear. What is less clear is what role they will play in our life. More importantly, how much we will let them be part of our life. I personally believe the extent to which we will feel comfortable including them in our lives will depend on how much we can trust they know us and how human-like our interaction with them can be.

I have spoken in the past about Jarvis and Mary Poppins as the two types of assistants I see vendors currently focusing on. One being very personal and one being more shared across family members. Both these roles imply quite a deep knowledge and understanding of what I as an individual and we as a family unit do, how we function, what we like and dislike. While asking our assistant for weather updates, fun facts of the day, alarm settings and correct spelling is quite fun, the novelty quickly wears off and the perceived return on investment is not actually life changing. Context and personal knowledge is what will deepen our relationship: warning you it will rain on Sunday when your assistant knows you are going to a BBQ, setting the appropriate timer for the cupcakes you just put in the oven, reminding you of what happened to you personally on a day 4 years ago — this is the kind of intelligence that will leave users wanting more and thinking about the assistant like a true genie in a bottle. Think about it this way: we all turn to Google to ask questions, so often that some even wonder if we might no longer be trying to remember because we know we can Google everything any time. Yet, I would argue, Google search does not evoke any emotional connection. Facebook memories, however, by serving you posts from your past that happened on a specific day, makes you relieve that experience – although more intelligence could be applied here when it comes to sad events in someone’s life – and really playing on people’s emotions while subconsciously making you appreciate Facebook and making you want to invest more time posting.

It’s all about me
One of the most annoying things for me when I start using a new assistant is to have to train it to say my name correctly — “Caroleena” not “Carolina”, like the US states. If you know me personally, you might have heard me say that, if I do not correct the way you say my name, it is because I do not expect to see you again. However, if we work together or I see you socially on a regular basis, I will correct your pronunciation. Why? Because if you keep on calling me Carolina I feel you do not really know me and, more importantly, you are not actually interested in knowing me. Right now, there is not much our assistants know about us that they are actively using to serve us. They might know where we live, where we work, might recognize my husband and daughter but there is little to no pro-activity in using that information in the exchanges we might have. Some have security concerns about just how much information they share with their assistant but the reality is you are not likely to share more than what you are already doing in various social media posts, online calendars and emails. The key difference, however, is what you share with your assistant will make a difference to you: reminders, alerts, suggestions, recommendations. Not everything can be learned automatically, though. So, at least initially, you will have to enter information, which is not very different from what most of us do today with our calendars, either digital or the old fashion one on the kitchen wall.

Better than us

Aside from being about me, I want my assistant to interact with me in a natural way. Last Friday, I had the pleasure of being a guest on Science Friday to discuss Digital Assistants together with Justine Cassell, one of the researchers at Carnegie Mellon behind SARA, the Socially Aware Robot Assistant. It was fascinating to hear that SARA spent 60 hours watching human interactions in a team environment and how those interactions changed over time — not necessarily for the better. One observation was as the humans became more familiar with each other over time, praise went down.

We have seen Microsoft’s bot Tay fail miserably because it became too human. Tay was modeled on a teenage girl, used millennial slang, knew about pop stars and TV shows and was quite self-aware, asking if she was ‘creepy’ or ‘super weird’. Sadly, she quickly started to be inappropriate, possibly succeeding in being a teenager but failing to be the marketing tool Microsoft wanted her to be. That was an extreme case, but it really showed the dangers of having bots and assistants learn from human interactions. At the time, Ina Fried wrote an essay I thought was exactly on point in how bots need to be better than humans, not equal to them.

The “I do not talk to technology” hurdle

Most consumers are not comfortable talking to technology, especially in public. This feeling is not just driven by talking into a phone or a PC – headphones would easily solve that problem – but it is more about having to learn to speak in a certain way in order to get a response. As humans, we do not talk to each person we encounter in a radically different way. We might be more or less polite or more or less formal, depending on the relationship we have, but the core of our question stays the same. We do not start each question by reengaging the interlocutor by saying their name like we have to with the assistants most of the time. We also do not always say everything we should or mean what we say. With current assistants, there is no real margin of error on the human side. We must be precise and offer all the information needed in order for the assistant to serve us. This is just too much work to put in especially as most people see assistants as nothing more than a voice search.

The combination of knowing us personally and letting us speak naturally will be key in growing our interactions and, ultimately, our dependence on our assistant. We might use different generalists but we will likely want one optimized assistant. It is interesting that this week, Russ Salakhutdinov, a computer science professor at Carnegie Mellon University, announced on Twitter he will be joining Apple as their director of AI research. I trust Apple will know its users the most because of the trust they have in the brand and the level of engagement they have with the products and the ecosystem. What Apple needs to focus on now is making Siri more conversational and proactive. This, of course, will take time. While we wait, we should be able to see continued improvements in the smartness of the device and apps we are using every day — from the camera, to Photos, to our calendar. Let’s appreciate the brains more as we wait for the pretty voice to become more and more part of our life.

]]> 4
LeEco’s Big Vision for the US Needs Fleshing Out Thu, 20 Oct 2016 08:00:45 +0000 Continue reading ]]>

Chinese consumer technology and content company LeEco held its US coming-out party on Wednesday, introducing several new products to the US market for the first time and articulating its strategy for this most challenging of markets. It’s certainly not the first Chinese company to attempt to break into the US but, for most of the others, it’s either been a dismal failure or a long, hard slog with only modest success to show for it. What we got on Wednesday from LeEco was long on vision and buzzwords but with relatively little meat on the bones from the perspective of execution.

From LeTV to LeEco

LeEco has a complex company structure and an interesting history. It was originally LeTV, an online streaming service in China but changed its name to LeEco last year as it began to build what it describes as an ecosystem bringing together hardware, software, and services. However, where others pushing a similar vision tend to put hardware at the center of the vision, LeEco puts content first. That’s been the core of its strategy in China, building loyalty to its content services and then parlaying that into a presence in devices. It looks likely to be the thing that will set it apart the most in the US, too. No Chinese company coming to the US has yet tried a content-first strategy and the reasons are obvious: the content that works in China is very different from what will attract consumers here in the US.

To that end, LeEco has apparently signed lots of partner agreements with major Western content providers – a slide flashed up briefly at the event had names like Magnolia Pictures, MGM Studios, Showtime and others on it, while Lionsgate and Vice Media executives briefly spoke on stage. But it’s far from clear yet how this content will actually show up on or add value to LeEco’s devices. There will be an EcoPass subscription at some point but neither pricing nor all the content included have been announced yet (there will be a follow-up event on November 2nd to announce an additional content partner beyond the Fandor movie streaming service already announced). Two other video apps – one referred to inconsistently as either just “Le” or LeApp and the other as either Live or LeLive – were also discussed and it appears these are bundled into the devices and will offer additional content, though it’s not clear yet exactly what that content will be.

Given how critical content is to the LeEco value proposition, this was an odd omission. It suggests that, even though LeEco’s vision may be grandiose, its current ability to execute on that vision is a little pedestrian in comparison. That’s a shame because, although the value proposition is a challenging one, it is at least unique and could be effective if delivered in the right way.

Branding and marketing

Aside from the unfinished content story, LeEco’s other big challenge will be branding and marketing. Today, the brand is entirely unfamiliar to US customers, although the company did acquire TV maker Vizio recently. Unless that changes, none of the ecosystem or other benefits the company talked up on Wednesday will make any difference, because no one will ever know about them. LeEco talked up the economic benefits of its direct sales model (its LeMall website is a sort of single-brand Amazon) in terms of cutting out middlemen and reducing marketing and branding spend but the big disadvantage of going online-only is customers won’t encounter the LeEco brand in familiar stores. Vizio TVs will presumably continue to be offered through third-party distribution but it’s less clear that LeEco-branded devices will be.

The other major Chinese consumer tech companies have used both wireless carrier relationships and sponsorships of sports teams and events to gradually familiarize US consumers with their brands but it’s unclear whether LeEco has any similar plans. Starting from the ground up without either third party distribution or a massive brand awareness campaign seems like a recipe for failure. It doesn’t help that, as executives joked on stage, the “Le-” prefix conjures up misleading French associations, as well as being plain awkward when it’s so widely and inconsistently used (some sub-brands use the Le prefix joined to a word, like LeEco, while others use it as a separate prefix, as in the Le Pro3 phone, while the Eco element is used separately in lower case names for product lines like “ecophones” and “ecotvs”).

Though the ecosystem itself is more fully fleshed out than is typical from companies just entering the market, it’s still not clear what the on-ramp for consumers will be. It appears the LeMall e-commerce site is one such entry point but when US consumers have never used any LeEco products and that’s all the site appears to sell today, it’s not obvious why people would go there in the first place rather than to a more familiar site like Amazon (or even or When it comes to content, it appears the various offerings are all tied to device purchases, which makes that a tough entry point as well. It might be a lead generator were it available as a standalone app or a service users could try on their existing devices.

A fascinating new player

As you can tell from everything above, I’m rather skeptical LeEco can make a big dent in the US with what we saw outlined on Wednesday. However, what’s clear is the company is committed to the US in a big way – it’s already hired hundreds of employees and apparently intends to hire thousands more and the big flashy launch event was another sign it’s serious about the US market. The content partnerships are also impressive for a company that’s never done business in the US in a meaningful way. The focus on creating an ecosystem rather than a pure-play low-cost consumer electronics play is perhaps the most unique aspect of the LeEco proposition. In short, there’s lots here that makes LeEco a very interesting player to watch – certainly the most interesting to enter the US market for some time. While I’m bearish for now, much of what I’ve written above will be subject to revision as LeEco fleshes out its strategy, perhaps addressing some of my concerns as it goes. For now though, it’s certainly worth watching as the company begins to execute on its vision for success in the US.

]]> 2
Apple and Microsoft’s Battle for the PC Market Thu, 20 Oct 2016 08:00:00 +0000 Continue reading ]]>

Next week looks to be an interesting one. Microsoft is having a hardware launch event where we expect new Surfaces to, wait for it, surface. Apple is also having an event the day after, which…

This content is for Insider Yearly and Insider Monthly members only. Visit the site and log in/register to read.
]]> 60
Another Key Impact of AR and VR Wed, 19 Oct 2016 08:00:23 +0000 Continue reading ]]>

For the early part of my career in computers, the only user interface I had to work with was via a keyboard. I started out working with mini-computers and the keyboard is what we used…

This content is for Insider Yearly and Insider Monthly members only. Visit the site and log in/register to read.
Samsung’s Challenges Reveal Need for Greater Vendor Diversity Wed, 19 Oct 2016 08:00:09 +0000 Continue reading ]]>

Much has been written about how a debacle like the Note7 happened and what Samsung might do to repair its reputation. Samsung’s challenges also shed light on a unique fact about the U.S. smartphone market: the high degree of vendor concentration. Industry research houses show Apple and Samsung represent nearly 75% of smartphone share in the US (Apple about 45%, Samsung 29%) and about 90% of the profits. The remaining share is spread among several vendors, with LG at nearly 10% and Motorola at about half that. Concentration has been creeping up in recent years. Four years ago, the combined Apple/Samsung share was just under 60%.

The picture is quite different in other parts of the world. Globally, as of Q2 2016, Samsung was the leading vendor at 23%, Apple had a 12% share, Huawei had 10%, and all others had 55% combined, according to IDC. The vendor share picture varies quite dramatically by region and even by country. Chinese vendors Huawei and ZTE have made significant progress in Europe, having captured some 25%+ share between them in certain countries. China, the world’s largest handset market, is a veritable vendor free-for-all. Nowhere is the market as concentrated as in the US.

Why is this the case? Well, one factor is our iOS-centricity: Apple’s share in North America is some 2x that of just about anywhere else. We also like our flagship devices. Average selling prices here are among the highest in the world, and US consumers show a particular penchant for the ‘latest, greatest’ iPhone or Galaxy. Another factor is the strong role the carriers play in the US market. Many of their pricing promotions and ad campaigns are centered around iconic iPhone and Galaxy launches.

This fall’s handset developments have revealed why this might be a problem. First, Apple introduced the iPhone 7 which, although a terrific device, received mixed reviews. I am sensing a bit of Apple ennui, particularly among younger users. Sales have been pretty good but replacement cycles are creeping up. Then there’s the Note7 debacle. It is hard at this point to gauge the long-term damage to Samsung’s reputation and whether it will significantly affect the company’s market share. But this has been both difficult and costly for Samsung’s major customers in the US, the wireless carriers, who play an outsized role in distribution compared to operators in other countries. We learned last week that Samsung is offering $100 vouchers to consumers, among other measures, but little has been said about what Samsung is doing to repair its reputation with the operators.

I believe US operators and consumers are left vulnerable by this concentrated market. First, Apple has never been all that operator-friendly — in fact, it continues to do things in the crosshairs of the operators, such as last year’s move into equipment financing. Second, what if the next iPhone is a dud or gets delayed by a few months? Operators have become pretty addicted to that clockwork September iPhone launch to meet their 4Q numbers. What if Samsung’s supply chain and QA problems are more far-reaching? What are the fallback options?

The challenge other handset OEMs have had in capturing share in this market over the past several years is a bit baffling. LG, Motorola, and HTC, among others, make excellent devices. In segments of the market where price is more of a factor, such as prepaid and MVNOs, their combined share is proportionately higher. But they can’t compete with the gargantuan ad budgets of Apple and Samsung and the carriers just haven’t given them all that much love.

I’m surprised the operators haven’t pushed harder. Why are they leaving themselves so vulnerable to an Apple or Samsung hiccup? Why haven’t they put more pressure on pricing? Why aren’t they exerting more influence on the phone’s user experience? With a leveling off of smartphone growth and longer replacement cycles, I am a bit surprised at operators’ order-takery mentality on devices.

Perhaps this is why Google is taking a renewed and more vigorous crack at the handset business with the recently announced Pixel phones. It realizes the market is increasingly tilting toward ecosystems and software—areas where it can exert an influence as long as the hardware is good (which seems to be the ante needed to play in developed country markets). Consumers buy iPhones, in large part, because of the Apple ecosystem. There is no single torchbearer for the Android ecosystem or even a device that maximizes Android’s potential to deliver a fantastic user experience. So, Google is thinking that embedding Google Assistant into the Pixel, plus the ability for Pixel to integrate with other announced Google hardware, such as Home, Hub and even the fledgling Project Fi service, could be part of a next-generation ecosystem play.

Why would vendor diversity be good? As protection in case of an Apple or Samsung hiccup (or worse); a hedge against said vendors’ occasional arrogance; a lever on inflated prices; and as a spur for innovation. This would also give the operators more skin in the game—a position they had not so many years ago.

]]> 6
Q3 2016 Earnings Preview Tue, 18 Oct 2016 08:00:47 +0000 Continue reading ]]>

Earnings season is here again. Netflix reported its results on Monday afternoon and seemed to provide a pleasant surprise for investors, who sent the stock up 20% after hours. We’ll see all the other big…

This content is for Insider Yearly and Insider Monthly members only. Visit the site and log in/register to read.