smartphones – Page 2 – Tech.pinions

The Major Industry Battle Brewing Between Samsung vs Google

Over the last five years, Samsung has become a behemoth in the tech marketplace. Their smartphones dominate the tech landscape and their profits have been relatively good until recently, considering the fact they still make most of their money on hardware. However, as we have seen in the PC market, a hardware only business model is not sustainable. Indeed, as smartphones become more and more commoditized, Samsung’s profits margins will soon be squeezed — especially by competitors like Xaomi who is eating their lunch in China.

While they are one of the most vertically integrated companies in the tech arena and can leverage this to help margins to some degree, I am convinced that, unless they take control of their entire destiny, they are just going to become like any of the PC companies who have been beholden to Microsoft and Windows and have seen their margins shrink consistently as PCs became commoditized. “Google and Android” replace “Microsoft and Windows” in this scenario and at the moment, Samsung is just a front end to deliver more and more customers to Google to get their ads, services and products via Samsung devices. Given the fact 50% of Android devices are Samsung branded, and Samsung’s cut of any related profits is the same as even tiny companies who also back Android, if I were Samsung I would be really pissed I’m making Google richer while at the same time, jeopardizing my future earnings potential if I continue to back Android.

To Android or Not to Android?

It is clear to me Samsung sees this and is rethinking their relationship with Google and their support for Android. At their recent developers conference, they showed off their own mobile OS that uses Tizen at its core and have even started paying developers to write apps for Tizen. At first glance it seems the focus on Tizen seems to be for the Asian market but don’t let that deceive you. I think there is something bigger in the works with Tizen.

Here is what Samsung is up against if they continue down an Android path as is.

First, they just make Google wealthier and continue to deliver customers to Google instead of to themselves. Yes, Android has served them well so far, but as long as Google owns the OS, Samsung is beholden to Google and is just a slave to them. Second, they drive revenue to Google, revenue that could be all theirs if they owned the customers. Third, they will continue to face margin pressure as hardware based profits shrink. As I mentioned above, our analysis suggests Samsung’s margins, even on their upper end products, could be reduced to around 10%-15% as even high end smartphones become more commoditized.

There is a reason Samsung copies and steals from Apple as the court in San Jose has already proven during the recent trials in California. They look at Apple’s ownership of their ecosystem and lust after it in a big way. Apple is mostly insulated from very low margin pressure since they not only make money from hardware but also from apps, products and services. They can do so since they own their OS and ecosystem and control their destiny across the board. Put more directly, Apple gets all of the profits from hardware, software, ads and services while, in Samsung’s case, Google gets most of the ad revenue, app sales profits and services sales.

The irony to all of this is Samsung is the one who has made Android successful — yet Google will not share the wealth with Samsung any more than they do with other Android licensees. Samsung has to be steaming at this predicament and looking for a way out. However, they have a dilemma and are boxed into a corner in the short term. While they can and will modify Android as far as they can without losing the store certification, the apps on Android that are both legitimate and illegitimate (the later being important in China) is too vast for them to abandon. Not being able to run android.apk apps would be suicide for anyone in the short term. Their developer environment is still based on Android so it seems they are trying to create a para-platform on top of Android that still uses the store but gets custom apps created for them in their ecosystem.

However, even in this scenario, where they can add some customization, they are still pouring money into Google’s coffers, leading them down a path where a hardware only play could hurt them big time in the future. Keep in mind, all OEMs backing Android are getting the same OS and, while hardware may differ, the OS is identical. It becomes harder and harder to differentiate with Google in control of the OS and related products and services. And Google’s new Android One program basically takes the cost out of the hardware and makes it possible for small companies to enter the market and go right after Samsung’s low end business in emerging markets.

So what could Samsung do to extricate themselves from the powerful hold Google has over them? Some industry folks I talk to think that Samsung could just fork Android the same way Amazon has done with their Fire OS. But even with Amazon’s clout, there are still not as many apps available on the Fire OS as there are in the Google Play Store and staying with Android even in a forked mode could be confusing for Samsung’s customers in the long run.

I think the real thing Samsung is working towards is to get away from Android completely sometime over the next three to five years and take complete control over their future. This is where I think their backing of Tizen becomes interesting and potentially important. Although Tizen has not attracted a lot of app support to date, if Samsung got behind it and was able to prove to the market they will continue to innovate around Tizen and keep delivering hundreds of millions of smartphones and tablets annually under their brand, they could attract serious software developers to the Tizen platform. Remember, they have 50% of the Android market today. If Samsung could show they would continue to be the #1 leader in smartphones even with Tizen, software developers would be crazy not to back Samsung’s Tizen strategy.

I don’t believe Google will let Samsung dump them without a battle. In fact, the recent fights between the two are becoming more public as it is becoming clear Samsung is no longer in love with Google.

I don’t think Google will adjust the revenue share for Samsung since, in doing, so they would probably have to have similar terms for other big Android vendors and that would really impact Google’s earning abilities. But they could be creative in trying to keep Samsung in the Android fold as well as putting a lot of pressure on them in ways we can’t even imagine at the moment. What Google wants, Google mostly gets.

In the long run, Android is a dead end for Samsung. As stated above, their relationship with Google is not that much different than what other PC OEMs have with Microsoft today and look what that has done to them in the commoditized age of PCs. I have no doubt even high end smartphones will become commoditized in a similar manner. If Samsung does not find ways to gain more control and deliver their own apps and services to enhance their overall profitability, they will, excuse the pun, become marginalized.

Apple Earnings: iPad Struggles and iTunes Revenue Importance

There were several interesting narratives out of Apple’s earnings report yesterday. The most glaring, and most confusing to many, was the struggles of the iPad. I’ll return to that in a moment. The Mac surprised many, but should not have surprised our readers. I wrote this in December of last year, and I explained the PCs upside in 2014. The PC will remain steady but we are still nowhere near the eventual bottom of annual cycles. We are seeing a refresh, mostly by corporations and education, and Apple, like many vendors, is positioned to capitalize on the upside. In an upcoming Insider post, I’ll layout why I think the Mac is actually a strong growth story for Apple.

But the iPad remains an important narrative. The tablet market is functioning exactly like the typical PC market. Therefore, our deep knowledge of PC cycles helps us understand the tablet market. There is one difference though and it is a significant one which has led to many to misunderstand the tablet market.

The tablet is still the fastest adopted technology in our industry history. Take a look at my install base estimates broken down by device.

Despite what you conclude about tablets, for a category which began in 2010, garnering 22% of the estimated current installed base is impressive. What gets lost is the speed in which this category grew.

It could be argued the iPad hit the perfect storm of lagging PC cycles, the mainstream’s desire for simplified computing paradigms vs complicated ones (the PC), and the Windows 8 debacle, all of which accelerated the adoption of the category. This burst led many to conclude the size of the tablet market was much larger than it actually is — potentially billions in annual unit shipments. Our forecasts were never that aggressive. While we believe the tablet market will remain a healthy segment, it will also be segmented. Segmentation will be what influences the total size of the tablet market.

With regard to iPad sales slowing, several things need to be mentioned. The first is the iPad had been experiencing solid growth in education and, to a degree, still is. However, new competition in the Chromebook has arisen for Apple in the education market. Every Chromebook manufacturer we speak with highlights to us they can not make enough to meet demand. Google announced they had sold one million Chromebooks to education in the second quarter, and the Chromebook segment is on pace to sell more than 5m units in 2014. While the iPad does more than double that number per quarter, the rising challenge of the Chromebook could be a factor in Apple’s education sector for iPads.

The enterprise is the other significant opportunity for iPad growth. I’ve spoken with a number of job market analysts and have heard numbers in the 300m-500m range for workers who don’t use a PC in their day job today but could benefit from a tablet computer. Things like construction, health, oil/gas/electic, factory workers, etc. Apple’s deal with IBM could help this, if for no other reason than it makes Apple in the enterprise more credible. Being viewed as credible to IT departments means they have more confidence to fully commit to iOS. This lack of credibility regarding Apple in the enterprise has been one of the things we hear from IT on why they hesitate to commit fully to iOS in their enterprise.

Lastly, replacement cycles are central to understand the tablet market. Fellow analyst colleague and Tech.pinions columnist Jan Dawson created a tremendous chart which we must dig into.

Jan has created a chart very similar in philosophy to ones used by all the PC vendors. It estimates the age of devices as a part of the active installed base. When I wrote earlier in the year about why I felt the PC would have a good 2014, it was based on a similar philosophy of estimates that there were around 300m PCs in active use five years or older. Knowing the replacement cycle for PCs to be in the 5-6 yr range, it was easy to conclude a large number would be upgraded soon. Using that same philosophy Jan has created this chart.

What we don’t know is the refresh cycles of tablets and, specifically, the iPad. Apple is somewhat cursed by the fact their products last so long without breaking. Consumers, on the other hand, are blessed by that reality. But if we simply look at the number of iPad’s still in use that are in the three yearr old range we can estimate the number to be around 50m units that should be eligible for upgrade in the near future.

Another key point to iPads we realized is the device is often handed down as new ones are purchased. Again, the value of the long life of the product allows this to happen. The impact of this will add to the overall installed base, but also could lead to a larger and difficult to predict refresh cycle at some point in time.

Adding new customers is the key metric to watch in this analysis. Apple reports frequently that 50% of iPad’s quarterly sales are to people who are first time iPad owners. Maintaining that statistic in our model is key as we track the installed base, growth cycle, and attempt to understand refresh patterns.

All of this brings us back to an important point about Apple’s business model. As I pointed out in my article on why Apple is immune to disruption, I specifically mention Apple has not and does not need to change their business model. What they do have to do, however, is capture more value per user. This is why watching iTunes services and revenue grow is a key statistic in the overall Apple narrative.

Deconstructing Satya. Episode II. The Empire Strikes Back.

Last week before the news broke, I warned Microsoft employees, all of them, to “get to work on your resume.” Change was coming, major change, and that always always always begins with a bloodletting.

Indeed, as others were decrying the word count of Satya Nadella’s “bold ambition” manifesto — signifying nothing, given it took Steve Jobs 1700 words to tell us he wasn’t going to use Flash on the iPhone — I read each word, every sentence. Nadella’s near-term intentions were obvious.

What was not clear, however, not until now, is how deeply divisive the Nokia purchase remains within the corridors of Microsoft’s ruling elite.

This Deal Is Getting Worse All The Time

Despite the corporate-speak, despite the strategic shift toward “productivity and platforms,” Nadella’s manifesto message last week was undeniable. Job cuts. Thus, I wrote:

“Big layoffs by Christmas.”

But Nadella kept hinting, so I followed that with…

“Big layoffs by Thanksgiving.”

But Nadella hinted further, so I followed that with…

“Big layoffs by Labor Day.”

In fact, the big cuts came only a few days later. Points for swift action, I suppose.

Nadella’s willingness to act fast, to re-make Microsoft, hack away at the extraneous and transform the company into “the productivity and platform company for the mobile-first and cloud-first world” appears to be exactly what the company needs.

But when you gut a $7.2 billion acquisition, which the company only closed on this past April, and fire 18,000 people, then you haven’t leapt from a burning platform, you’ve set the platform ablaze. There is no going back, no do-overs for Mr. Nadella. He is about to set the company on a ten year course, possibly longer, and though Microsoft possesses a rather stunning array of assets, what’s most stunning is the company still has virtually zero response to the iPhone, the iPad and Android. In 2014.

Competing in a mobile-first, cloud-first world — with no mobile device the world actually wants — seems less like corporate bumbling at this point and more like French royalty certain the barbarians will forever remain outside the gate.

Sadly, more than 18,000 will soon join those barbarians.

That Was Never A Condition Of Our Agreement

Nadella’s follow-up email to staff announcing major cuts is mercifully shorter than his bold ambition manifesto, though similarly riddled with the kind of corporate-speak analysts with expense accounts use on marketing managers with a too large budget.

My thoughts on Nadella’s latest message are below, in bold italic.

From: Satya Nadella
To: All Employees
Date: July 17, 2014 at 5:00 a.m. PT

5am! Leading is hard.

Subject: Starting to Evolve Our Organization and Culture

“Starting to Evolve.” Catch that? This is just the start.

Last week in my email to you I synthesized our strategic direction as a productivity and platform company.

And now I’m gonna need those TPS reports.

Having a clear focus is the start of the journey, not the end. The more difficult steps are creating the organization and culture to bring our ambitions to life. Today I’ll share more on how we’re moving forward. On July 22, during our public earnings call, I’ll share further specifics on where we are focusing our innovation investments.

This reads like a draft memo from the assistant to the regional manager. No excuses here.

The first step to building the right organization for our ambitions is to realign our workforce. With this in mind, we will begin to reduce the size of our overall workforce by up to 18,000 jobs in the next year.

Nokia is dead. Godspeed all you Nokians.

Of that total, our work toward synergies and strategic alignment on Nokia Devices and Services is expected to account for about 12,500 jobs, comprising both professional and factory workers.

12,500

In his “bold ambition” email to employees, only days before this, Nadella stated “first party hardware” would form part of the core Microsoft vision. He said this four times!

Our cloud OS infrastructure, device OS and first-party hardware will all build around this core focus and enable broad ecosystems.
Our Windows device OS and first-party hardware will set the bar for productivity experiences.
Our first-party devices will light up digital work and life.
We will build first-party hardware to stimulate more demand for the entire Windows ecosystem.

[emphasis added]

Now, days later, he guts Nokia, kills off the very popular Asha hybrid phone line and halts development of the AOSP-led Nokia X.

I suspect Mr. Nadella believes the smartphone wars are lost, despite whatever else the company may tell us. They are no longer worth fighting for.

Prediction: Microsoft will focus its mobile hardware efforts not on Windows Phone but on Surface, on new mobile gaming devices, and new mobile “productivity” devices; anything and everything that might help them uncover that next great mobile computing inflection point. Smartphones are lost to them.

We are moving now to start reducing the first 13,000 positions, and the vast majority of employees whose jobs will be eliminated will be notified over the next six months.

13,000 from the 18,000? 12,500 from Nokia plus 500 from elsewhere? Where does this number come from?

Nadella needs to be straightforward here. So far, he’s failed.

It’s important to note that while we are eliminating roles in some areas, we are adding roles in certain other strategic areas.

Nowhere near 18,000, however. Thus, it would be best if not said at all.

My promise to you is that we will go through this process in the most thoughtful and transparent way possible.

Your own email appears poorly thought out and lacking transparency!

We will offer severance to all employees impacted by these changes, as well as job transition help in many locations, and everyone can expect to be treated with the respect they deserve for their contributions to this company.

Forget them. Move forward.

Later today your Senior Leadership Team member will share more on what to expect in your organization.

How bureaucratic is this company?

Our workforce reductions are mainly driven by two outcomes: work simplification as well as Nokia Devices and Services integration synergies and strategic alignment.

That’s three, maybe four outcomes, not two. Can Nadella really not trust anyone to review and edit his emails?

Fact: Nearly every single Nokia device over the next several years will be replaced by an Android, perhaps a few by iPhones, not Windows Phone (in any form).

My prediction that the remaining “Nokia” employees will focus mostly on new mobile productivity devices and new mobile gaming devices, not smartphones, stands. Nadella just isn’t ready to tell us this, not yet. Perhaps, he’s not come to terms with it himself.

First, we will simplify the way we work to drive greater accountability, become more agile and move faster.

Perhaps given your size, strengths and history, being inflexible and moving slower, and with less accountability (e.g. investor input), would be the best strategy?

Yes, I am serious. Agility and speed are never the strengths of behemoths.

Perhaps You Think You Are Being Treated Unfairly

As part of modernizing our engineering processes the expectations we have from each of our disciplines will change. In addition, we plan to have fewer layers of management, both top down and sideways, to accelerate the flow of information and decision making. This includes flattening organizations and increasing the span of control of people managers.

Sideways layers of management? Sideways layers!

In addition, our business processes and support models will be more lean and efficient with greater trust between teams. The overall result of these changes will be more productive, impactful teams across Microsoft.

Question: How dysfunctional is this company?

These changes will affect both the Microsoft workforce and our vendor staff. Each organization is starting at different points and moving at different paces.

Answer: Appreciably dysfunctional.

Second, we are working to integrate the Nokia Devices and Services teams into Microsoft. We will realize the synergies to which we committed when we announced the acquisition last September. The first-party phone portfolio will align to Microsoft’s strategic direction. To win in the higher price tiers, we will focus on breakthrough innovation that expresses and enlivens Microsoft’s digital work and digital life experiences. In addition, we plan to shift select Nokia X product designs to become Lumia products running Windows. This builds on our success in the affordable smartphone space and aligns with our focus on Windows Universal Apps.

Integrate Nokia into Microsoft? Realize the synergies committed to last September? Align the first party phone portfolio to Microsoft’s strategic direction? To win the higher price tiers? Which builds on Microsoft’s success in the affordable smartphone space?

We can’t possibly divine what these words mean because Nadella does not know the way forward in mobile. That’s a problem.

Making these decisions to change are difficult, but necessary. I want to invite you to my monthly Q&A event tomorrow. I hope you can join, and I hope you will ask any question that’s on your mind. Thank you for your support as we start to take steps forward in evolving our organization and culture.

Satya

It Is Your Destiny

Last week, I praised Nadella for his bold, borderline revolutionary statements. A few days later he morphs into a parody of his predecessor.

I give him a pass. This time.

When it comes to massive corporate downsizing, we always say there’s a right way to do these things but there’s never a right way to do these things. That said, it seems clear Nadella hasn’t yet figured out exactly what Microsoft should do in mobile and that’s a problem for which no one will give him a pass.

Deconstructing Satya

Last week, Microsoft CEO Satya Nadella laid bare his vision for the tech giant. It is borderline revolutionary.

From its early days, Microsoft has focused on using software and computing to empower people and businesses around the world. Nadella still clings to this laudable vision. However, he has now fundamentally flipped the seat of power, even as he fears to let go of all Microsoft has amassed over the decades.

Just as America’s Constitution enumerated inalienable rights all its people are endowed with, forever empowering even a single individual against the full force of the government, in a similar manner Nadella has positioned the user above all else.

This is radical. For Microsoft, it’s nearly unthinkable.

Nadella does not simply place emphasis on users instead of PCs, on productivity instead of Windows. He changes the equation of the software behemoth going forward. This could set Microsoft apart from all others.

The most user-friendly tech company in the world, Apple, emphasizes ecosystem over device, lock-in over empowerment. Google takes from its own users when they are not looking. Amazon confounds its customers with Prime service, making it nearly impossible to ever fully know the actual price — or value — of any single item.

Nadella is positioning Microsoft on the side of the user. Security, privacy, productivity, empowerment. I believe this will have a profound and lasting impact on the company and its customers forever. This call to great and permanent and never ending change is buried inside Nadella’s 3,500 word memo to Microsoft staff. I understand if you choose not to read (any/all of) it.

My analysis of his manifesto is below, in bold italic.

Satya

From: Satya Nadella

To: All Employees

Date: July 10, 2014 at 6:00 a.m. PT

Subject: Starting FY15 – Bold Ambition & Our Core

Team,
As we start FY15, I want to thank you for all of your contributions this past year. I’m proud of what we collectively achieved even as we drove significant changes in our business and organization. It’s energizing to feel the momentum and enthusiasm building.

This is all wrong. Platitudes, corporate management speak and 3,500 words are absolutely the wrong way to begin a discussion about “significant changes” and “enthusiasm building.” That within the first paragraph we are twice reminded FY15 has commenced, all I can think is Nadella is too steeped in the pre-existing conditions of Microsoft to achieve anything great, let alone revolutionary.

The day I took on my new role I said that our industry does not respect tradition – it only respects innovation. I also said that in order to accelerate our innovation, we must rediscover our soul – our unique core. We must all understand and embrace what only Microsoft can contribute to the world and how we can once again change the world. I consider the job before us to be bolder and more ambitious than anything we have ever done.

“What only Microsoft” can do should be plastered across every meeting room in Redmond. Nadella mimics Tim Cook’s penchant for “change the world” pablum but to be fair, very few companies really can. Microsoft is one. Kudos to Nadella for not shying away from this.

We’ll use the month of July to have a dialogue about this bold ambition and our core focus.

The very corporate nonsense-speak that turned me into a freelancer.

Today I want to synthesize the strategic direction and massive opportunity I’ve been discussing for the past few months and the fundamental cultural changes required to deliver on it.

Means nothing.

On July 22, we’ll announce our earnings results for the past quarter and I’ll say more then on what we are doing in FY15 to focus on our core. Over the course of July, the Senior Leadership Team and I will share more on the engineering and organization changes we believe are needed. Then, at MGX and //oneweek, we’ll come together to build on all of this, learn from each other and put our ideas into action.

Rigid, bureaucratic and enslaved to artificial dates.

We live in a mobile-first and cloud-first world. Computing is ubiquitous and experiences span devices and exhibit ambient intelligence. Billions of sensors, screens and devices – in conference rooms, living rooms, cities, cars, phones, PCs – are forming a vast network and streams of data that simply disappear into the background of our lives. This computing power will digitize nearly everything around us and will derive insights from all of the data being generated by interactions among people and between people and machines. We are moving from a world where computing power was scarce to a place where it now is almost limitless, and where the true scarce commodity is increasingly human attention.

This is brilliant. Better, it launches the long, painful slog of fully re-positioning Microsoft away from PCs, away from Windows, away from Office, away from its past, which now binds it, and onto a future of screens, data and insight.

The only company at present that can challenge a fully engaged Microsoft in this is Google.

In this new world, there will soon be more than 3 billion people with Internet-connected devices – from a farmer in a remote part of the world with a smartphone, to a professional power user with multiple devices powered by cloud service-based apps spanning work and life.

Microsoft will be the anti-Apple, delivering services and value to all, not just the world’s 10%.

The combination of many devices and cloud services used for generating and consuming data creates a unique opportunity for us. Our customers and society expect us to maximize the value of technology while also preserving the values that are timeless.

Means nothing. Wasting employee’s time.

We will create more natural human-computing interfaces that empower all individuals. We will develop and deploy secure platforms and infrastructure that enable all industries. And we will strike the right balance between using data to create intelligent, personal experiences, while maintaining security and privacy. By doing all of this, we will have the broadest impact.

Preach! Only Google can challenge Microsoft in delivering services to all. But, only Microsoft can deliver these services and effectively protect individual privacy.

Mobile First Cloud First

Microsoft was founded on the belief that technology creates opportunities for people and organizations to express and achieve their dreams by putting a PC on every desk and in every home.

Microsoft’s business practices rightly angered many of us. But their efforts also helped deliver us directly to this future. We should be thankful for that.

More recently, we have described ourselves as a “devices and services” company. While the devices and services description was helpful in starting our transformation, we now need to hone in on our unique strategy.

I am not Steve Ballmer.

At our core, Microsoft is the productivity and platform company for the mobile-first and cloud-first world. We will reinvent productivity to empower every person and every organization on the planet to do more and achieve more.

Wow. This is a truly revolutionary message and within Microsoft’s skill set to make happen. I will be happy if Microsoft simply comes close to this vision, as it is glorious: “empower every person and every organization on the planet to do more and achieve more.”

We think about productivity for people, teams and the business processes of entire organizations as one interconnected digital substrate. We also think about interconnected platforms for individuals, IT and developers. This comprehensive view enables us to solve the more complex, nuanced and real-world day-to-day challenges in an increasingly digital world. It also opens the door to massive growth opportunity – technology spend as a total percentage of GDP will grow with the digitization of nearly everything in life and work.

I think this is wrong. Backwards, in fact. It’s not about an “interconnected digital substrate,” a nonsense phrase, but about building a product that truly empowers that one person. If it empowers one, it will empower millions. Apple has taught us this. Microsoft has yet to learn this.

We have a rich heritage and a unique capability around building productivity experiences and platforms. We help people get stuff done. Stuff like term papers, recipes and budgets. Stuff like chatting with friends and family across the world. Stuff like painting, writing poetry and expressing ideas. Stuff like running a Formula 1 racing team or keeping an entire city running. Stuff like building a game with a spark of your imagination and remixing it with the world. And stuff like helping build a vaccine for HIV, and giving a voice to the voiceless. This is an incredible foundation from which to grow.

Nice reminder for the troops and the public.

Repeating this is not productive.

Microsoft has a unique ability to harmonize the world’s devices, apps, docs, data and social networks in digital work and life experiences so that people are at the center and are empowered to do more and achieve more with what is becoming an increasingly scarce commodity – time!

It took far too much time to get here, but Nadella has shrewdly set in motion not only Microsoft’s mission, but its marketing message as well, which is almost as important.

Microsoft will save us time.

Productivity for us goes well beyond documents, spreadsheets and slides. We will reinvent productivity for people who are swimming in a growing sea of devices, apps, data and social networks. We will build the solutions that address the productivity needs of groups and entire organizations as well as individuals by putting them at the center of their computing experiences. We will shift the meaning of productivity beyond solely producing something to include empowering people with new insights. We will build tools to be more predictive, personal and helpful.

The deconstruction of Word, Excel et al shall commence starting now.

We will enable organizations to move from automated business processes to intelligent business processes. Every experience Microsoft builds will understand the rich context of an individual at work and in life to help them organize and accomplish things with ease.

This will be tricky. Even in a data driven, always-on world, people vigilantly maintain different lives: work, home, and those known only between the person and her browser history. Nadella wants to create a whole where I believe people want to maintain separate, if porous, fiefdoms.

Productive people and organizations are the primary drivers of individual fulfilment and economic growth and we need to do everything to make the experiences and platforms that enable this ubiquitous.

I love how Nadella and Microsoft are the anti-Apple. Steve Jobs was famous for talking about computers and creativity whereas Microsoft is now focused on computers and productivity. Both are worthy visions: Apple is more likely to garner passionate adherents, Microsoft is more likely to lift up all boats.

Users Not Consumers

We will think of every user as a potential “dual user” – people who will use technology for their work or school and also deeply use it in their personal digital life. They strive to get stuff done with technology, demanding new cloud-powered applications, extensively using time and calendar management, advanced expression, collaboration, meeting, search and research services, all with better security and privacy control.

Privacy, privacy, security.

Wise of Microsoft to attack Google’s Achilles Heel. Obviously, we embrace the many benefits that accrue as our data, all of it, flows between many clouds and many screens.

We will want to know, however, that some data will remain forever cordoned off to all but exactly whom we wish and when. Only Microsoft can deliver this — Google’s business model is almost in direct opposition to it and Apple refuses to embrace Microsoft scale.

Warning, Mr. Nadella: do not abdicate user privacy. Do not screw this up.

Microsoft will push into all corners of the globe to empower every individual as a dual user – starting with the soon to be 3 billion people with Internet-connected devices. And we will do so with a platform mindset. Developers and partners will thrive by creatively extending Microsoft experiences for every individual and business on the planet.

None of this sounds even remotely appealing. Platforms empower the maker, not the user. That’s why every company in tech talks platforms.

“Microsoft experiences” sounds no better than, say, a visit to the dentist.

Across Microsoft, we will obsess over reinventing productivity and platforms. We will relentlessly focus on and build great digital work and life experiences with specific focus on dual use.

Nadella has hitched his future to a belief in “dual use.” That is, our work and home lives meld into one interconnected digital sphere. I think this is wrong and will be his undoing.

Microsoft Everywhere

Our cloud OS infrastructure, device OS and first-party hardware will all build around this core focus and enable broad ecosystems. Microsoft will light up digital work and life experiences in the most personal, intelligent, open and empowering ways.

Key words: “first-party hardware.” Surface, Lumia, Xbox — these are only the start of Nadella’s hardware ambitions. Ballmer must be pleased.

Developers and partners will thrive by creatively extending Microsoft experiences for every individual and business on the planet.

Requisite acknowledgement of developers and partners now out of the way…

We will deliver digital work and life experiences that are reinvented for the mobile-first and cloud-first world. First and foremost, these experiences will shine for productivity. As a result, people will meet and collaborate more easily and effectively. They will express ideas in new ways. They will experience the magic of ambient intelligence with Delve and Cortana.

This is the future we expect and I am looking forward to Microsoft’s implementation of “ambient intelligence.”

It’s easy to believe Microsoft will be unable to match Google Now and other iterations of Google’s ambient intelligence capabilities. It’s nearly as easy to believe Microsoft won’t be able to deliver a service as simple to use as Apple’s Siri. These are legitimate concerns. That said, Bing, Yammer, Office, Exchange, Skype, Lumia, and the reach of Microsoft’s cloud infrastructure are critical resources to be tapped, and will help guide users in all facets of their digital life.

Moreover, for the shareholders, ambient intelligence will be a business revolution, and in this, Microsoft is far ahead of the pack.

They will ask questions naturally and have them answered with insight from Power Q&A. They will conquer language barriers and change the world with Skype translator. Apps will be designed as dual use with the intelligence to partition data between work and life and with the respect for each person’s privacy choices. All of these apps will be explicitly engineered so anybody can find, try and then buy them in friction-free ways. They will be built for other ecosystems so as people move from device to device, so will their content and the richness of their services – it’s one way we keep people, not devices, at the center.

I hope you succeed at this. Right now, these remain mere words.

This transformation is well underway as we moved Office from the desktop to a service with Office 365 and our solutions from individual productivity to group productivity tools – both to the delight of our customers.

Please ban the use of the word ‘delight’.

We’ll push forward and evolve the world-class productivity, collaboration and business process tools people know and love today, including Skype, OneDrive, OneNote, Outlook, Word, Excel, PowerPoint, Bing and Dynamics.

The next revolution will be in the office, not in the home. In this, new Microsoft still acts like old Microsoft.

Increasingly, all of these experiences will become more connected to each other, more contextual and more personal. For example, today the Cortana app on my Windows Phone merges data from highway sensors and my own calendar and simply reminds me to leave work to make it to my daughter’s recital on time. In the future, it will be even more intelligent as a personal assistant who takes notes, books meetings and understands if my question about the weather is to determine my clothes for the day or is intended to start a complex task like booking a family vacation. Microsoft experiences will be unique as they will reason over information from work and life and keep a user in control of their privacy.

Dear tech bloggers: the ‘Microsoft is doomed’ stories are just stupid.

The Cloud Everywhere

Our cloud OS represents the largest opportunity given we are working from a position of strength. With Azure, we are one of very few cloud vendors that runs at hyper-scale. The combination of Azure and Windows Server makes us the only company with a public, private and hybrid cloud platform that can power modern business. We will transform the return on IT investment by enabling enterprises to combine their existing datacenters and our public cloud into one cohesive infrastructure backplane. We will enable our customers to use our Cloud OS to accelerate their businesses and power all of their data and application needs.

The cloud will be where nearly all our data and all the intelligence connected to that data resides. But not all. We will use our mobile devices to store and share data and content which we dare not send via the cloud.

That said, the cloud will be paramount, and Mr. Nadella is wise to focus so much attention upon Microsoft’s capabilities here.

His statement also reminds us Nadella is a techie and he understands how to fully leverage the breadth of Microsoft’s infrastructure. I wish his statement, however, wasn’t so buried underneath enterprise-speak. How will this cloud benefit me — not me at work, not me doing work. Simply, me.

Beyond back-end cloud infrastructure, our cloud will also enable richer employee experiences. For example, with our new Enterprise Mobility Suite, we now enable IT organizations to manage and secure the Windows, iOS and Android devices that their employees use, while keeping their companies secure. We are also making it easy for organizations to securely adopt SaaS applications (both our own and third-party apps) and seamlessly integrate them with their existing security and management infrastructure. We will continue to innovate with higher level services like identity and directory services, rich data storage and analytics services, machine learning services, media services, web and mobile backend services, developer productivity services, and many more.

Nadella may talk of “dual use” and of the merging of work and home. Microsoft remains, however, a work company.

Our cloud OS will also run all of Microsoft’s digital work and life experiences, and we will continue to grow our datacenter footprint globally. Every Microsoft digital work and life experience will also provide third-party extensibility and enable a rich developer ecosystem around our cloud OS. This will enable customers and partners to further customize and extend our solutions, achieving even more value. 

Cloud “APIs,” essentially, could revolutionize how we create, manipulate and benefit from data. Microsoft should be a leader in this, and it will propel tremendous business value.

Hardware Everywhere

Our Windows device OS and first-party hardware will set the bar for productivity experiences.

Again, that phrase “first-party hardware.”

Microsoft is (now) a hardware company. But a good one? Can an applications, services and infrastructure company also do great hardware? I have my doubts. I welcome being proven wrong.

Windows will deliver the most rich and consistent user experience for digital work and life scenarios on screens of all sizes – from phones, tablets and laptops to TVs and giant 82 inch PPI boards.

Does anyone believe this will ever be so?

We will invest so that Windows is the most secure, manageable and capable OS for the needs of a modern workforce and IT.

Nadella will not cede one organization to Google Docs and not allow a single corporation to let iPhone, iPad or BYOD to loosen its grip on the enterprise. This will be a bloody fight. I can’t wait.

Windows will create a broad developer opportunity by enabling Universal Windows Applications to run across all device targets. Windows will evolve to include new input/output methods like speech, pen and gesture and ultimately power more personal computing experiences.

Multi-mode inputs will absolutely create more personal computing experiences. The burden of proof that these should — or even can — be offered by Microsoft is quite high, however.

Very, very few humans use speech, pen or gestures to interact with Microsoft products or applications. Microsoft has repeatedly failed to lead the world in this.

Our first-party devices will light up digital work and life. Surface Pro 3 is a great example – it is the world’s best productivity tablet.

No.

In addition, we will build first-party hardware to stimulate more demand for the entire Windows ecosystem. That means at times we’ll develop new categories like we did with Surface. It also means we will responsibly make the market for Windows Phone, which is our goal with the Nokia devices and services acquisition.

Being deliberately inexplicable is not productive, Mr. Nadella. What exactly is “responsibly make the market?” You intend to be a hardware company, in direct competition with many of your very best partners. Say so.

I also want to share some additional thoughts on Xbox and its importance to Microsoft. As a large company, I think it’s critical to define the core, but it’s important to make smart choices on other businesses in which we can have fundamental impact and success. The single biggest digital life category, measured in both time and money spent, in a mobile-first world is gaming. We are fortunate to have Xbox in our family to go after this opportunity with unique and bold innovation. Microsoft will continue to vigorously innovate and delight gamers with Xbox. Xbox is one of the most-revered consumer brands, with a growing online community and service, and a raving fan base. We also benefit from many technologies flowing from our gaming efforts into our productivity efforts – core graphics and NUI in Windows, speech recognition in Skype, camera technology in Kinect for Windows, Azure cloud enhancements for GPU simulation and many more. Bottom line, we will continue to innovate and grow our fan base with Xbox while also creating additive business value for Microsoft.

Brilliant. Nadella has scuttled all rumors about Microsoft abandoning Xbox. He has reminded analysts gaming is a primary driver behind mobile and while Microsoft lags in mobile it is a leader in gaming. Nadella also reminds us in our new age of data, collaboration and ideas, “gaming” will become a crucial component of productivity.

While today many people define mobile by devices, Microsoft defines it by experiences. We’re really in the infant stages of the mobile-first world. In the next few years we will see many more new categories evolve and experiences emerge that span a variety of devices of all screen sizes. Microsoft will be on the forefront of this innovation with a particular focus on dual users and their needs across work and life.  Microsoft will continue to vigorously innovate and delight gamers with Xbox.

My take: Microsoft to acquire Zynga. That’s just for starters.

Our ambitions are bold and so must be our desire to change and evolve our culture. I truly believe that we spend far too much time at work for it not to drive personal meaning and satisfaction. Together we have the opportunity to create technology that impacts the planet.

Good, lord, this memo is just ridiculously long.

I’ve Seen All Good People

Nothing is off the table in how we think about shifting our culture to deliver on this core strategy. Organizations will change. Mergers and acquisitions will occur. Job responsibilities will evolve. New partnerships will be formed. Tired traditions will be questioned. Our priorities will be adjusted. New skills will be built. New ideas will be heard. New hires will be made. Processes will be simplified. And if you want to thrive at Microsoft and make a world impact, you and your team must add numerous more changes to this list that you will be enthusiastic about driving.

If you are not a star, I strongly advise you to get to work on your resume.

I am committed to making Microsoft the best place for smart, curious, ambitious people to do their best work.

If you are a star, I strongly advise you to get to work on your resume.

First, we will obsess over our customers. Obsessing over our customers is everybody’s job. I’m looking to the engineering teams to build the experiences our customers love. I’m looking to the sales and marketing organizations to showcase our unique value propositions and drive customer usage first and foremost.  In order to deliver the experiences our customers need for the mobile-first and cloud-first world, we will modernize our engineering processes to be customer-obsessed, data-driven, speed-oriented and quality-focused. We will be more effective in predicting and understanding what our customers need and more nimble in adjusting to information we get from the market. We will streamline the engineering process and reduce the amount of time and energy it takes to get things done. You can expect to have fewer processes but more focused and measurable outcomes. You will see fewer people get involved in decisions and more emphasis on accountability. Further, you will see investments in two new or combined functions: Data and Applied Science and Software Engineering. Each engineering group will have Data and Applied Science resources that will focus on measurable outcomes for our products and predictive analysis of market trends, which will allow us to innovate more effectively. Software Engineering will evolve so that information can travel more quickly, with fewer breakpoints between the envisioning of a product or service and a quality delivery to customers. In making these changes we are getting closer to the customer and pushing more accountability throughout the organization.

We should not be surprised when thousands of Microsoft staff are shown the door.

Second, we know the changes above will bring on the need for new training, learning and experimentation.

That’s you, old, middle management gatekeepers.

Over the next six months you will see new investments in our workforce, such as enhanced training and development and more opportunities to test new ideas and incubate new projects.

Big layoffs by Christmas.

I have also heard from many of you that changing jobs is challenging. We will change the process and mindset so you can more seamlessly move around the company to roles where you can have the most impact and personal growth. All of this, too, comes with accountability and the need to deliver great work for customers, but it is clear that investing in future learning and growth has great benefit for everyone.

I suspect Microsoft will soon become the GE of personal computing. Massive, always in flux, possessing an agile bureaucracy, driven less by product or business model and more by shrewdly financing initiatives which it can dominate.

I am committed to making Microsoft the best place for smart, curious, ambitious people to do their best work.

Why hasn’t it been?

Finally

Yes!

every team across Microsoft must find ways to simplify and move faster, more efficiently. We will increase the fluidity of information and ideas by taking actions to flatten the organization and develop leaner business processes.

See note above re: resumes.

Culture change means we will do things differently. Often people think that means everyone other than them. In reality, it means all of us taking a new approach and working together to make Microsoft better. To this end, I’ve asked each member of the Senior Leadership Team to evaluate opportunities to advance their innovation processes and simplify their operations and how they work. We will share more on this throughout July.

Big layoffs by Thanksgiving.

A few months ago on a call with investors I quoted Nietzsche and said that we must have “courage in the face of reality.” Even more important, we must have courage in the face of opportunity.

+1 for quoting Nietzsche. -2 for quoting Nietzsche 3,000 words in.

We have clarity in purpose to empower every individual and organization to do more and achieve more. We have the right capabilities to reinvent productivity and platforms for the mobile-first and cloud-first world. Now, we must build the right culture to take advantage of our huge opportunity. And culture change starts with one individual at a time.

Validate why you, ye lowly programmer, should continue to be employed by Microsoft.

Rainer Maria Rilke’s words say it best: “The future enters into us, in order to transform itself in us, long before it happens.”

Want to get on Nadella’s good side? He obviously has a penchant for early 20th century German writers.

We must each have the courage to transform as individuals. We must ask ourselves, what idea can I bring to life? What insight can I illuminate? What individual life could I change? What customer can I delight? What new skill could I learn? What team could I help build? What orthodoxy should I question?

Big layoffs by Labor Day.

With the courage to transform individually, we will collectively transform this company and seize the great opportunity ahead.

I wish you well, Mr. Nadella, and all of you (still) at Microsoft.

The Smartphone Is The Computer

I have spent the past three weeks in Detroit, a city possessing a rich history and an unremitting present. The vagaries of Silicon Valley count for little here. When I heard a young man ask — for real — if the Samsung Galaxy S5 was an iPhone or an Android, I knew there was much to glean if I simply put my smartphone down and listened.

Here then are my thoughts, insights and observations from the past one score and one day…

There are no smartphone wars. Rather, just amazing, affordable and truly expansive opportunity. Android versus iPhone means nothing to nearly everyone I speak with.

It is hard to overstate just how much television will be disrupted by the combination of children, tablets and YouTube. Free, always accessible content uniquely tailored to their own self-driven interests, available from any location is now possible — and the young will accept nothing less.

Facebook, not smartphones, not telcos, not automobiles, not Disney or ESPN, is connecting the world. Facebook is the new oil. If there is any ‘next Steve Jobs,’ it is Mark Zuckerberg. For whatever confluence of reasons, Zuckerberg divined the power of social media from the start, just as Jobs did with computing. No matter how rich, no matter how many struggles, I expect Zuckerberg to devote the remainder of his life to Facebook and all it represents.

There is middling outrage over the Facebook ‘user emotion’ study. As for me, this represents little more than A/B testing. In fact, I’m more angry over the iPhone keyboard. It’s so terrible. Is this some sort of secret Apple study? I mean, what other possible reason could there be?

I am in the place where cars and mass production altered the course of humanity. Now, it is smartphones, social media, mapping, and code; these are re-making the planet as much as the automobile did in the 20th century. We are at the start of a new future. That’s just awesome.

I was often asked the best way to become a professional writer. It’s such an easy question to answer.

Marry well.

Oh, and should you be so fortunate to have an opportunity to write about what you love, for an organization with no concern for page views and provocation, as I am at Tech.pinions, then do not fritter away such a blessing.

I first learned about the SCiO from Techpinions. Point this device at a piece of fruit for example, and it will tell you what it is and even provide data on its composition, such as how much fat and carbs the item contains. Every single time I read more about this device, I think it is absolute magic. I told so many people about it that I now desperately hope it works as advertised.

I have nothing but good things to say about the Amazon Fire Phone. Yet, I can’t possibly recommend it to anyone. Why would I? In the US, at least, there is almost no reason to recommend any smartphone other than the iPhone or the Samsung Galaxy.

Microsoft’s Windows Phone faces a similar fate as Amazon’s Fire. Fair or not, can you imagine any outcome for Windows Phone other than failure? How does Microsoft start over? What amazing technologies, hardware and combination of services can they possibly deliver to make the world care about a device that is not iPhone or Android? I do not have the answers.

If I were in charge of Microsoft I would simply continue to make quality devices, offering great Nokia design, great Nokia imaging, incorporating Skype, OneDrive, HERE, Office and other Microsoft-owned products and services. Plodding along, hoping more and more Android vendors exit the business, picking up the scraps, all while leveraging my enterprise install base and security, identity and productivity tools, hoping users discover my superior value.

It won’t help. The smartphone market is lost to Microsoft.

The screen market, however, is barely in its infancy. Microsoft should forget smartphones and focus instead on screens. Screens will become like power outlets, we only notice them when they cannot be found.

Perhaps no company — not Apple, not even Google — possesses the breadth of services Microsoft offers. The problem, of course, is these services are not exposed for all the world to use. They are locked inside unwanted PCs, shoved inside tablet abominations, buried beneath the content we actually seek from our Xbox systems, sold mostly to IT directors, attached to products and platforms we do not need, and hidden behind an incomprehensible UI. Microsoft has built an anti-moat around its services, not locking us in but keeping everyone out.

The World Cup has introduced to millions the joys of live sports streamed to our smartphones and tablets. This is so in Detroit and around the country. It has never been more clear we all want to watch what we want to watch when we want to watch it where we want to watch it and on the device we want to watch it on. This is simple, obvious and unstoppable. It’s only a matter of time before we have a difficult time explaining to our progeny how it ever could have been anything else.

Last week, Apple CEO Tim Cook very happily took part in the San Francisco Pride Parade. Also, Hobby Lobby successfully won the right to provide only certain forms of contraception for its employees. What do these have in common?

Values equal profits.

Companies are publicly declaring their values, even going to court to defend and promote their values. This is only start. The technologies of Silicon Valley are breaking down barriers, bringing corporations to their knees and empowering individuals and groups around the world. With smartphones in hand, with continuous, real time, location-aware connectivity always available, we become our own corporations — with Uber, AirBnB and others merely pointing the way. We will work for ourselves and we will live by our values.

This is good. But it will be messy. Very messy.

Hype aside, can you envision a situation where you use Bitcoin over, say, your iPhone ‘wallet’ linked to your secure iTunes payment data? iPhone offers ease of use and peace of mind. That’s a powerful combination. Still worse for Bitcoin, is that it is essentially digital cash in a world addicted to easy credit. Learn about the blockchain. Bitcoin itself is merely a bystander.

Given Android’s headstart in wearables, it’s hard to see Apple winning any wearable app wars. Given the limitations of its market reach, it’s similarly difficult to see Apple winning the “smart home” market without buying its way in. Sonos would be a good start.

Smartphones are borderline magical. That said, the iPhone 5s battery and the HTC One (M8) camera are embarrassingly bad.

In the past week, I’ve rented two movies from iTunes. I failed to finish both in the first sitting and was not able to watch either until after 24 hours later. iTunes refused, insisting the rental period had expired. This was true, though did not mitigate my anger. I may abandon iTunes rentals altogether. The lure of non-legal downloading is strong.

How much of Yahoo’s Alibaba riches is Marissa Mayer prepared to spend to get us to visit Yahoo? I suspect all of it. Nowhere I go does Yahoo seem to matter.

Idle prediction: Apple will not kill off the iPhone 5/c/s form factor this year, nor will Apple offer three simultaneous iPhone form factors. Yes, that means I am predicting only one large-display iPhone.

Not a prediction, just a thought experiment: In 2024, when a chid is born, they will be assigned either an Android or an iPhone. This will control everything.

There will be over 1 billion (American) Android activations this year, and several hundred million (Chinese) Android (AOSP) activations. Android is a stunning success story. All those involved in Android have long since earned our respect. That said, some analysts, bloggers and even industry insiders still have not grasped the obvious: Smartphones are the first screen. Smartphones are the primary computer.

The CEO of Yahoo is female. The CEO of HP is female. The #2 at Facebook is female. A man runs Android, the world’s most popular OS. He is from India. The CEO of Microsoft is from India. The tech sector points the way forward not only with its products.

Be smart. Work hard. That’s true everywhere.

Why Do All Of You Hate Windows Phone So Much?

I have used mobile phones for two decades. I have tried nearly every single platform. I consider myself a good judge of functionality, durability, usability and value. I have spent the past six months using a Windows Phone — a Lumia 1520 — as my primary device. It is big, beautiful, intuitive, powerful. The battery, more than double the iPhone’s, actually lasts me all day long. Cortana knows my voice better than Siri. Live Tiles provide information at a glance better than any iPhone app and all my iPhone notifications. Nokia’s HERE Maps are more responsive than Google’s. The display is magic.

People stop me in public and ask me if they should buy one.

I always say yes.

A few, however, ask if I can recommend it over their iPhone or Android phone.

For this, I have no answer.

For better or worse, iPhone and Android are good enough for, well, nearly every single smartphone user on the planet. I have no reason to believe this will change soon.

Why?

Sales data, mostly. Management shifts inside Microsoft, partly. Plus, I ask people. I ask actual human beings both online and in physical space. I ask why they chose the iPhone or an Android phone. I also ask, and this is always more insightful, why they did not choose a Windows Phone.

But before that, let’s take a look at the numbers. They are unforgiving.

No One Is Using Windows Phone

The smartphone wars are far from over. The near term addressable market for smartphones is in the billions of units.

: Global smartphone growth

And yet…

As smartphones become more vital to our lives, as prices drop, as the technology spreads, as smartphones link to more devices, wearables and services, Windows Phone remains barely a blip. Tech.pinions estimates the Windows Phone install base at a mere 2%.

: Smartphone install base

Love your Windows Phone? Love Nokia design, imaging, sound quality, build quality? Happy with how Windows Phone offers a clear UI alternative, a uniquely innovative means to group contacts, superior music streaming versus Beats?

It does not matter, apparently.

The market has spoken — a billion times over. It can find no valid set of reasons to choose the Lumia Icon or Lumia 920, 1020 or 1520, or any other Windows Phone instead of an iPhone 5c or every model of Android.

It gets worse.

As the Tech.pinions analysis reveals, smartphone sales are dominated by the usual suspects — Apple and Samsung, plus numerous Chinese-based vendors. Nearly all of these are exclusively focused on Android.

Lest you think Tech.pinions numbers are an outlier, Tomi Ahonen aggregates data from several manufacturers and industry groups. His smartphone market share numbers align closely with Tech.pinions.

Spoiler alert: Almost nobody wants Windows Phone.

: Smartphone share

Bad, yes. Worse — the most recent quarter offered little hope, with market share for Windows Phone actually dropping:

By next quarter, Microsoft’s newly acquired Nokia division, which is responsible for the vast majority of Windows Phone sales, may not even crack the top 10:

Coolpad/Yulong? Ever heard of them? They sold millions more smartphones last quarter than did Nokia. To be fair, their Samsung Galaxy Note flattery is quite nice.

How can this be?

Why Is No One Using Windows Phone?

I want Windows Phone to succeed. I want yet another great American company to be a central part of our global, mobile, highly technological future. Plus, Microsoft can offer users a rather stunning array of uniquely valuable services and platforms. Skype, identity, Xbox, Office, OneDrive, Yammer — an unmatched range of corporate, productivity and connectivity tools that may be peerless in the computing world.

Why, then, are their phones so thoroughly rejected?

I said above I asked people why they did not choose a Windows Phone. That is a somewhat misleading statement. Because as it turns out, almost everyone I asked had not even considered a Windows Phone. They could give me no answers.

A few, however, had considered a Windows Phone. Or at least revealed awareness of its existence. Their responses to my informal survey are telling.

1. Microsoft Derangement Syndrome

If I were to state here Microsoft saved Apple from bankruptcy, the vitriolic comments would never end. Should I remark Apple is a great artist — “and great artists steal” — it would generate far more heated, angry response than could ever be justified.

And yet people have no qualms about openly hating Microsoft. The ancient slights, real and perceived, have not healed. I confess I was surprised by how many people made it clear to me they would have nothing to do with Microsoft. Ever. Whenever they have a choice.

I find this Microsoft hate odd and unproductive. I presume a change in perception will occur now Steve Ballmer, the physical manifestation of all that rage, no longer has a lead role at Microsoft.

2. Live Tiles

In theory, live tiles should flourish on our mobile devices. They deliver timely, desired information direct to the user’s screen, available at a glance.

In reality, the static app won.

Users I spoke with prefer the pull of static apps to the push of live tiles, even if they could not fully explain why. They also did not care for the look (design) of live tiles, how they twinkle and spin, nor did they express any desire to pin an app, a site, or other information to their home screen.

When it comes to smartphones, the look and feel of Apple’s iOS is what people expect, no matter who provides it.

3. No There There

Whether out of vision or necessity — or more likely both — Apple made the iPhone the center of our computing world. Microsoft continues to place the Windows PC at the center of our computing world.

This is not the future.

This snapshot of the US browser market is telling. On mobile, Microsoft is nearly non-existent.

Should anyone still think PCs will ever again be the center of our world, take note of this Mary Meeker graphic which reveals time spent in front of our various screens.

Those I spoke with viewed Microsoft as a PC company, not a mobile one (or a cloud one, even). Satya Nadella’s “mobile first, cloud first” strategy sounds exactly right, but his words have not resonated with end users.

4. iTunes

Of course, iTunes. Children use iTunes. Grandparents use iTunes. We all use iTunes. Over and over again, people tell me — and this includes Android users — that without iTunes, or seamless access to their iTunes content, they won’t even consider the alternative device.

5. There’s An App For That (But Not Really)

It’s been stated a million times and it cannot be overstated. The Windows platform desperately desperately desperately needs more and better apps.

There are far fewer apps for Windows Phone, and most of those do not offer the robust experience found on the iPhone.

It is now far easier to buy far more software and content for Apple devices than for Windows devices. This is a stunning reversal. Every person I asked brought up the ‘app gap’.

6. By Any Other Name

Do customers want a Nokia? Do customers want a Lumia? Is Windows Phone high-end, low-end? Is it a premium, integrated device or an OS licensed by unknown entities such as BLU Products, Yezz, BYD, Wistron and Prestigo?

The Nokia XL, which I consider to be an amazing device for the price, runs atop Android. But it looks like a Windows Phone.

What is it?

In my regular discussions with non-technical people, primarily in the US, a smartphone is:

iPhone first,
Samsung second,
Android third

in that order.

Microsoft’s marketing team must gain significant traction within our already crowded heads if it hopes to ever sell Windows Phone.

And We Continue…

Now, my personal experience.

7. Separate But Unequal

I have walked into dozens of carrier retail stores in the United States. Until recently, it was difficult even to locate a Windows Phone.

It gets worse.

At multiple retail stores, as I am examining a Windows Phone, a helpful salesperson has steered me toward Android. Microsoft needs to fix this problem stat.

8. No Self Control

What can I control with my Windows Phone?

My smartwatch? My thermostat? My television? My PC? My Xbox?

The smartphone is the center of our computing world. To succeed, Windows Phone must become this. While no one brought this up, I think the lack of an obvious, flourishing ecosystem centered around Windows Phone continues to limit adoption.

9. The iPhone Box

As much as I love the beautiful, colorful, brilliantly designed polycarbonite Lumia 1520 for example, perhaps Microsoft should focus on making devices that much more closely resemble the squared, austere iPhone. This seems to be what the market wants.

Ditch the colors, the curves and the unapologetically plastic design. The Lumia Icon mimics the boxy, metallic design of the iPhone. Perhaps that is how all Windows Phones should look. I hope I am wrong, but the world says otherwise.

10. Continuity

Apple made a splash at WWDC by promising “continuity.” That is, creating a seamless experience across devices — iPhone, iPad, Mac. Microsoft needs to show me and all its customers how Windows Phone can or will offer a seamless, integrated, multi-device experience.

Nowhere To Go But Up

It no longer matters whether Windows Phone is better, just as good, different, or some combination of these. The iPhone and Android are everything users need, which leaves Microsoft on the outside.

What happens next is up to Microsoft, not the public.

Apple once faced this exact same situation. They were forced to become something other than what they were, despite their abiding belief they offered a superior, or certainly equivalent, product. After a long, difficult slog, it worked out rather well for them. I hope the same for you, Microsoft. I know it will not be easy.

The Terrible Tablet Tantrum, Part 2

Yesterday, in The Terrible Tablet Tantrum, Part 1, I raged at the notion that tablets were dead and enumerated facts that refuted that erroneous contention. Today, I take a deep dive into the two philosophical questions that seem to be perplexing Tablet Naysayers the most:

— Is the Tablet good enough to replace the PC?
— Is the Smartphone good enough to replace the Tablet?

The Tablet Is a Lousy PC/Smartphone

Many of the Tablet Naysayers justify their disdain for the Tablet form factor by pointing out the Tablet makes for a lousy PC or, on the other hand, it makes for a poor Smartphone. Jared Sinclair, in his article entitled, “Giving Up On the iPad” sums this argument up nicely:

The iPad can’t get better at these tasks without becoming either more like an iPhone or more like a Mac. For the iPad to become just as good as the iPhone, it would need to be smaller, equipped with a better camera, and sold with carrier subsidies and mobile data plans. But this would turn it into “just a big iPhone.” So this can’t be iPad’s future.

For the iPad to become just as good as the Mac, it would need to be larger, faster, equipped with expansion ports, and powered by software that supports legacy features like windowed applications and an exposed file system. But this would turn the iPad into a Macbook Pro with a touch screen and a detachable keyboard. This can’t be iPad’s future, either.

I can’t find a way out of an uncomfortable conclusion. In order for the iPad to fulfill its supposed Post-PC destiny, it has to either become more like an iPhone or more like a Mac. But it can’t do either without losing its raison d’être. ~ Jared Sinclair

NOT A PC

The future of the iPad is not to be a better Mac. ~ Ben Thompson

Here’s the thing the Tablet Naysays don’t seem to grok. THE TABLET DOES NOT ASPIRE TO BE A NOTEBOOK PC. The iPad is not, nor does it want to be, a Notebook replacement. It has much higher standards than that.

Further, nobody (outside of the fine folks living in Redmond) buys a Tablet in order to use it as a Notebook replacement. If anything, people buy Tablets in order to AVOID using it as a Notebook PC.

Timothy Leary once said:

Women who seek to be equal with men lack ambition.

Similarly, Tablets that seek to be equal with PCs lack ambition. The Tablet is so much more than the PC — why would it try to emulate it?

With the right approach, an iPad can do anything. You just have to stop thinking like a desktop user. ~ Darren Davies (@darrendotcom)

NOT A SMARTPHONE

“A smartphone is a great device for what I call ‘guerrilla usage’ — many different impromptu activities you can quickly perform with one hand, while walking, when idle at a bus stop or waiting somewhere, etc. All activities that make a smartphone the best tool for its (relatively) small size and practicality (one example for all: taking photos). But when I’m out and about with just my iPhone, for example, and I have time to sit and relax in a café, I’d like to have a bigger device for longer sessions of whatever I feel like doing (browsing, email, reading, writing, etc.) and the iPhone is not enough — and a 5-inch smartphone wouldn’t be enough either, sorry.” ~

Riccardo Mori

Let’s get the discussion of screen sizes back in perspective. People DO NOT WANT smaller tablet screens. They TOLERATE smaller screens.

People want the largest damn screen they can have. But they don’t want a large screen at the price of pocketability (If Microsoft can make up words, then so can I), one hand use, weight and inconvenience. When pocketability is not at issue, people choose the larger screen most every time.

NOT DONE YET

The truth about Tablets: We’re still figuring out how they fit. ~ Ryan Faas

People keep forgetting the modern Tablet is only four years old. It’s barely past the toddler stage. It has a lot of growing left to do and it has a lot left to show us.

That’s why I love what we do. Because we make these tools and they’re constantly surprising us in new ways what we can do with them. ~ Steve Jobs

NOT A TWEENER

The role of the Tablet is, in part, misunderstood because we metaphorically sandwich it between the Smartphone and the PC categories.

However the tablet category is not bound by either of those categories. The Smartphone, Tablet and PC are on a one dimensional computing axis. If you add another axis and label it “life activities”, the Tablet has far greater breadth and depth than either the Smartphone or the Notebook will ever have.

The whole idea of the Macintosh was a computer for people who want to use a computer rather than learn how to use a computer. ~ Steve Jobs

You have to learn how to use a Notebook. You have to learn how to use a smartphone. (If you don’t think that’s true, try handing a Smartphone to your grandmother.) I believe the ideal of a computer we don’t have to learn has (almost) been achieved in the iPad.

The older people all want to know how it does what it does, but the younger people just want to know what it can do. ~ Steve Jobs

Steve Jobs made that statement in the eighties. I think it no longer holds. With today’s modern tablets, children of all ages no longer ask what it does, they simply ask what it can do.

NOT A REAL ISSUE

Normally we do not so much look at things as overlook them. ~ Alan Watts

What a crock this whole “The Tablet Is A Lousy Notebook” argument is. Have you seen the iPad’s satisfaction numbers? They’re consistently in the nineties. People wouldn’t feel that way about a device that left them wanting. It is only geeks like us that find the Tablet wanting because what we really want is something other than the tablet. (This geek tragedy of asking the tablet to be what it is not and never was intended to be is embodied in Microsoft’s latest Surface efforts.)

The Tablet Is Altogether Unnecessary

Of late there has been a huge groundswell for the idea that the Tablets are unnecessary, were always unnecessary and will soon be absorbed by the PC from the above and disrupted by the Smartphone from below. Here are some quotes culled from yesterday’s article that support this contention.

The (Smartphone and the Tablet) are nearly identical in their technical specifications. They’re constructed from similar materials. They have the same operating system, chips, and sensors. It seems they differ only in size. ~ Jared Sinclair

While good at some of the things and pretty to look at, iPad (and other tablets) aren’t particularly useful. ~ Javed Anwer

Young people are growing up on the mobile phone as their primary computing device, which has fundamentally changed the way they use and think about the internet. Tablets are simply unnecessary for them… ~ Dustin Curtis

Young people don’t use tablets because they don’t see them as necessary ~ Owen Williams

Contention: people are discovering that tablets are not really a thing, and that in general, the gap between phone and PC barely exists. ~ Peter Bright (@DrPizza)

As battery life gets better and screen sizes grow, it’s likely tablets and smartphones will eventually just converge into one device that can be simply slipped into a pocket, instead of two devices that overlap each other in many areas. ~ Owen Williams

I don’t think tablets will ever disappear, but for mass-market use, they’re going to keep getting squeezed from both sides: larger-screened phones and smaller, lighter laptops. The percentage of people whose primary computing device is a tablet may have already peaked

Over the next few years, I suspect an increasing number of people will choose not to replace old tablets, instead just choosing to use their phones for everything… ~ Marco Arment

I think the future of the iPad is for it to disappear, absorbed at the low end by iPhones with large displays and at the high end by Macs running a more iOS-like flavor of OS X. Perhaps it won’t disappear completely. After all, for certain niche uses – especially those listed above – the iPad is great because it’s neither a phone nor a PC. But these are still niche uses and can’t possibly sustain the long, bountiful future that many hope the iPad has. ~ Jared Sinclair

History

To understand why the Tablet is not going to go away, let’s first look at how it arrived.

The modern PC arrived in the late 1970’s. It wasn’t as powerful or as versatile as the Mini-computers that preceded it, but it was much cheaper, could sit on your desk, and could be used by an individual. Thus the term “personal” entered the lexicon of computers, which gave us the Personal Computer (PC) we now know, love and love to hate.

The modern Notebook arrived approximately 20 years later in the late nineties. It too wasn’t as powerful or as versatile as the desktop PC that had preceded it, but its one great strength was transportability — you could pick it up, take it with you and use it at work or at home or on your way to and from work and home. It disrupted the PC, just as much as the PC had disrupted the Mini-computer before it.

In 2007, the iPhone arrived. Most people view it as a mobile phone replacement, but it’s really a pocket sized PC. It was clearly inferior to the Notebook computer in many ways but it wasn’t just transportable — it was pocketable as well. Pocketable made it mobile. Cellular antennas made it always connected to the internet. This changed everything.

In 2010, Steve Jobs famously introduced the iPad tablet and asked whether there was room for a new category of device between the Smartphone and the Notebook. The answer, obviously, was yes, but it is important to understand why so many people originally answered that question with a resounding, “NO!”

Study the past, if you would divine the future. ~ Confucius

The Tablet As A Separate Category From The Notebook

The benefit of an iPad was its simplicity. The touch user interface made computing accessible to the nine month old, the ninety nine year old and every age in between.

[pullquote]The computer geek defines “everything” as “everything a computer can do”. The Normal defines “everything” as “everything I can do.”[/pullquote]

The PC appeared to be able to do everything an iPad could do and more but only if you use a very stilted definition of what “everything” is. The computer geek defines “everything” as “everything a computer can do”. The Normal defines “everything” as “everything I can do.” The Notebook did more computer tasks than did the Tablet and it did them better. However, the Tablet did more life tasks than the Notebook could ever dream of doing.

The things we humans wish to do are so much more varied: sing, play, dance, even, I suppose, make spreadsheets. It is a spectrum, of which traditional “compute” activities are only a small part. ~ Ben Thompson

When the PC was the one and only computer we had, it was a generalist. It literally defined what could and could not be done on a computer.

When the iPad arrived, the PC became a specialist. The PC is really, really good at spreadsheets and tasks that require more processing power and tasks that require multiple or larger screens. The iPad — with its simpler and more approachable user interface — became the new general computer. It couldn’t do the edge cases nearly as well as the PC or the Smartphone, but it could do a whole lot of things that were never, ever, envisioned by the Notebook and it did them with a much shallower learning curve.

The Tablet Is The New General Purpose Computer. ~ Matthew Panzarino (@panzer)

The Tablet As A Separate Category From The Smartphone

We can take the very same analysis we just used to explain why there was room for a Tablet category beneath the PC to explain why there is room for a Tablet category above the Smartphone.

The benefit of the Tablet is still its simplicity. The larger screen real estate makes most computer tasks far easier to perform on a Tablet than on a Smartphone. That is the main reason why older people quickly gravitate to the Tablet while the young — who are more nimble and more willing to tolerate the inconvenience of a smaller screen (and who have less money) — gravitate to the smartphone. (But don’t be fooled into assuming the young prefer the Smartphone over the tablet. As soon as they enter the workforce, their tablet use begins to increase.)

At first blush, a Smartphone appears to be able to do everything a Tablet can do and more but at the cost of additional complexity. This is a totally acceptable tradeoff to make when we need to have our computer (Smartphone) with us at all times. Conversely, it is a totally UNACCEPTABLE tradeoff to make when no tradeoff is required, i.e., when we’re at home or when we otherwise have access to both our Smartphone AND our Tablet.

[pullquote] We choose efficiency when we must. We choose effectiveness when we can.[/pullquote]

Let me put this another way: Smartphones excel at mobility and efficiency. Tablets excel at effectiveness. We choose efficiency when we must. We choose effectiveness when we can.

Conclusion

The tablet Naysayers are simply wrong. The facts are against them and the analysis is against them too. Remember when the Tablet was born, both the Smartphone and the Notebook already existed. Why the Naysayers now contend no one really wants to use a tablet when consumers just spent the last four years throwing their dollars at Tablets is beyond me. What do the Naysayers think — the people who bought tablets were too stupid to realize they could have purchased Smartphones or PCs instead?

I return to my mother. She first looked at the iPad as cool, but foreign. Now you can barely pry it out of her hands. It is her computer. ~ MG Siegler

People adore their tablets. If you think the tablet is going away, it is because you think too highly of thinking and you don’t think enough about the awesome power unleashed by feelings.

The Terrible Tablet Tantrum: Part 1

In the first quarter of 2014, Apple sold 16.4 million iPads, a 16% drop compared to the number of units sold in the same quarter one year ago. Apple CEO, Tim Cook, explained the news away, but the tech press was having none of it.

Sales of iPad were flat. Sales were less than flat. Sales were depressed. Sales were depressing. Sales were awful. Sales were catastrophic. The Tablet world was about to come to an end! The iPad was hanging on by its finger tips!

You think I’m exaggerating, right? Employing hyperbole? I’ll let you be the judge. Here are some typical headlines and comments that have been written about Tablets generally and the iPad specifically over the past two weeks — many of them by some of the finest and most respected names in tech.

Headlines

Apple’s iPad Business Is Collapsing ~ Jim Edwards

Are the iPad’s go-go years over? ~ Jean-Louis Gassée

Contention: people are discovering that tablets are not really a thing, and that in general, the gap between phone and PC barely exists. ~ Peter Bright (@DrPizza)

Giving Up On The iPad ~ Jared Sinclair

Have we already reached peak iPad? ~ Brad Reed

I can’t find a way out of an uncomfortable conclusion. In order for the iPad to fulfill its supposed Post-PC destiny, it has to either become more like an iPhone or more like a Mac. But it can’t do either without losing its raison d’être. ~ Jared Sinclair

There is, however, a growing perception that the iPad growth could continue to stall. ~ Ryan Faas

Tablet demand hits a wall ~ Jon Fingas

I don’t think tablets will ever disappear, but for mass-market use, they’re going to keep getting squeezed from both sides: larger-screened phones and smaller, lighter laptops. The percentage of people whose primary computing device is a tablet may have already peaked.

Over the next few years, I suspect an increasing number of people will choose not to replace old tablets, instead just choosing to use their phones for everything… ~ Marco Arment

As battery life gets better and screen sizes grow, it’s likely tablets and smartphones will eventually just converge into one device that can be simply slipped into a pocket, instead of two devices that overlap each other in many areas. ~ Owen Williams

Young people are growing up on the mobile phone as their primary computing device, which has fundamentally changed the way they use and think about the internet. Tablets are simply unnecessary for them… ~ Dustin Curtis

I think the future of the iPad is for it to disappear, absorbed at the low end by iPhones with large displays and at the high end by Macs running a more iOS-like flavor of OS X. Perhaps it won’t disappear completely. After all, for certain niche uses – especially those listed above – the iPad is great because it’s neither a phone nor a PC. But these are still niche uses and can’t possibly sustain the long, bountiful future that many hope the iPad has. ~ Jared Sinclair

The iPad is dead. ~ Steve Kovach (@stevekovach)

The iPad is so over, even Apple seems to be moving on. ~ Galen Gruman (@MobileGalen)

The iPad may already be past its prime. ~ Brad Reed

While good at some of the things and pretty to look at, iPad (and other tablets) aren’t particularly useful. ~ Javed Anwer

Why Apple’s iPad Is in Big Trouble ~ Adam Levine-Weinberg

Young people don’t use tablets because they don’t see them as necessary ~ Owen Williams

Get Real

Whenever you find yourself on the side of the majority, it is time to pause and reflect. ~ Mark Twain

I cannot agree with the tablet doomsayers and I would respectfully suggest the facts don’t agree with them either.

1) PREMATURE: Talk about resting your entire argument on a thin reed. We’re talking about a single down quarter in a non-holiday period that has already been explained away as a glitch in the supply chain. Much of this speculation rests on a foundation so fragile a single robust quarter of sales will blow it into the dustbin of history.

2) AGE: The iPad is only four years old — FOUR YEARS — and has sold 210 million units.

3) PCs MANUFACTURED: If you count the iPad as a personal computer (and you should) Apple is, even excluding the Macintosh, the largest manufacturer of PCs in the world. For those of us who remember the days of Windows domination, that statement is absolutely mindblowing.

In 2013 alone Apple sold nearly as many iPad’s as they did Mac’s between the years 1991-2010. ~ Ben Bajarin (@BenBajarin)

4) STANDALONE BUSINESS: Based on the last 12 months of revenue, the iPad would be in the top 100 companies in the Fortune 500. ~ via MG Siegler

CAPTION: The iPad is only 17% of Apple’s revenues, but if it were split off, it would be a Fortune 100 company.

5) REVENUE:

In 2006 — the year before the iPhone — Apple had revenue of 19.32 billion.

In 2009 — the year before the iPad — Apple had revenue of 36.54 billion.

In the first 90 days of 2014 — the quarter that generated all of the angst-filled headlines — the iPad generated revenue of approximately 11.5 billion.

In other words, using back-of-the-envelope calculations, it appears that last quarter’s disappointing iPad revenues were twice as large as the revenues generated by all of pre-iPhone Apple and larger than the revenues generated by all of pre-iPad Apple. Most companies would kill for such disappointing results.

6) NEW USERS: Tim Cook reported over two-thirds of people registering an iPad in the past six months were new to the iPad.

Let me repeat — over two-thirds of the people buying iPads are NEW to the form factor.

Sounds like the opposite of stagnation to me.

7) EDUCATION AND ENTERPRISE: The iPad has captured an overwhelming 91% of the Education market and 95% of the Enterprise purchases. And yet we think the sales of the iPad are going to stagnate? With kids being handed iPads in their schools? With adults being handed iPads at their place of work? Seriously? Am I the only one who thinks that conclusion runs counter to all the evidence and is completely bonkers?

St. Paul schools dumps Dell after one year; students to get iPads

8) ANECDOTAL: A middle school teacher recently caught a student with this:

If you think a product that inspires kids to hollow out their books so they can sneak it INTO class is generating no interest amongst the young and is on the verge of extinction, then you are mad, I tell you, STARK RAVING MAD!

CAPTION: Picture of the typical analyst, trying to kill the iPad.

Adoption

Tablet naysayers are totally ignoring the existence of the adoption cycle.

A) The adoption rate of tablets has been extraordinary.

— The iPad is selling at nearly twice the rate the iPhone did during the iPhone’s first four years.

— The install base of tablets worldwide is almost as much as the install base of desktops. ~ Ben Bajarin (@BenBajarin)

— It took the PC approximately 15 years to reach one billion units sold. It will likely take the tablet 5-6 yrs. ~ Ben Bajarin (@BenBajarin)

— On its current trajectory, the iPad, by itself, will soon eclipse the entire PC market in terms of sales. The broader tablet market, of course, already did that some time ago. (Remember, this was all done in only four years.)

B) Rapid Adoption is highly predictive.

Historically, products which become ‘mainstream’ or widely adopted follow an S-curve during that adoption. The curve is remarkably predictable given a limited set of points….We are fortunate that data also exists for Tablets. ~ Horace Dediu

It is highly improbable that tablet penetration would rise from 0 to 42%, in a mere four years and then suddenly come to a screeching halt (more or less reversing itself). Such a claim is so out of keeping with historical norms the proof required to sustain it would have to be extraordinarily strong.

Exceptional claims demand exceptional evidence. ~ Christopher Hitchens

C) Some tablet naysayers claim the tablet market is saturated. I’ll let Mary Meeker respond to them:

We think tablets can be nearly pervasive but only six percent of people have one today. ~ Mary Meeker

Tomorrow

I may not agree with you, but I’ll defend to the death my right to tell you to shut up. ~ Andy Borowitz

Tomorrow, I take a deep dive into the two questions that seem to be perplexing Tablet naysayers the most:

— Is the Tablet good enough to replace the PC?
— Is the Smartphone good enough to replace the Tablet?

Turns out, the logic used to explain why the tablet deserved to be a category separate from the PC is also the very same logic that can be used to explain why the tablet will remain a separate category from the smartphone. Join me tomorrow and I’ll explain why. (INSIDER ARTICLE, Subscription Required.)

Peering Inside The Apple Rumors Prism

Steve Jobs fully understood the value in surprise, the wonder of magic, and the awe a beautiful, functional, highly personal computing device can evoke when unwrapped for the very first time. Rumors, particularly a stream of unceasing rumors of all kinds, tend to sully this ideal.

Not much can be done about it, unfortunately. Not only because Jobs is now gone but because Apple is far, far bigger than it has ever been. The company now comprises ten of thousands of employees, a massive retail chain, strategic partnerships with nearly every big name in media, relationships with automakers and contractors by the score. The Apple ecosystems spans nearly half a billion active users, a global supply chain that touches 4 million workers, hundreds of suppliers, and 18 worldwide final assembly plants. Leaks and rumors are inevitable.

In addition to leaks, there may be story plants, trial balloons, media spin, hurt feelings from those let go, false leads from those gunning for a promotion, snapshots from an anonymous line worker in China, misdirections from a savvy executive and slip ups by trusted employees. Given the scope of today’s Apple, shutting down the rumor-media industrial complex is simply not possible.

The end result of all of this?

We don’t know what we don’t know and we aren’t always sure what we do know. To be sure, all the rumors and all the talk may help whet our appetite for the next great Apple product. It can also lead to far too many brain cells preoccupied with even the most ridiculous Apple tales.

For example…iRing. Yes, leading Apple sites have written about and thoroughly dissected the very real possibility of a computerized ring, forged by Apple, which could be, it is presumed, a means to support digital payments, possibly serve as a remote control for the wearer’s music collection, and all manner of other nonsensical functions.

This will not happen. There will be no iRing. None. If for no other reason than should Apple even dare release such a product, every sneer, every cutting remark made by any and every Apple hater everywhere since the beginning of time would instantly be made whole. I can barely write the word ‘iRing’ without laughing.

I am certain, however, that talk of an iRing will persist.

The Apple Rumor Prism

Like it or not, expect no end to the Apple rumors and tall tales that emerge from the amorphous flotsam the media periodically feasts upon. This is all exacerbated by the fact Apple PR, whom I have been in contact with on many occasions, nearly always refuses to comment on any rumor. Realistically, they have little other choice.

Which begs the question: Is there a way to pre-determine the veracity of a Apple rumor?

(Wait for it…)

No.

The best we have so far are a few very well connected Apple writers, such as Jim Dalrymple, who can deliver a yay or nay but only at certain times and only for certain rumors. With Apple, rumors are like weeds, and no one person can stomp down all of them.

For example, thanks to the ongoing court battles with Samsung, we recently learned Apple has been rather concerned over the sales growth of large display smartphones, which it does not yet offer.

Surprise! Days later, we are treated to pictures of new iPhone molds suggesting a larger iPhone! Is this a plant from Apple? A false lead? Or some kid in Taiwan not very good with Photoshop? We don’t know. Worse, we tend to latch onto any data point, such as it is, that confirms our biases or affirms our hopes.

What then, is the best means of determining if a rumor is even merely likely when Apple refuses to say and the best Apple sources can’t (yet) verify? I focus on what I do know with a high degree of certainty and run the latest rumor through that prism. This may lead to some dead ends or errors, but it typically keeps me on the right trail.

I know with a high degree of certainty that…

Tim Cook is firmly in charge of Apple
Jony Ive is firmly in charge of the look and feel of Apple products — all of it, inside and out
Tim Cook has essentially removed Jony Ive from the bowels of the Apple design labs and made him a quite respectable SVP, which almost certainly means Ive won’t be as intimately involved with each and every product, manufacturing process and innovative material going forward
Cook’s big name hires have been in retail and branding, though he’s also hired veterans from the fitness and medical devices industry
Apple works on products and prototypes for years before it believes everything is just right for launch
iPhone margins are massive and counter to the direction of the marketplace
Apple cannot go down market ¹
Apple is comfortable with offering seemingly confusing choices for consumers (e.g. iPad Mini RD vs iPad 2 vs iPad 3, I think)
Core Apple products such as the iPhone, iPad and the Mac are typically replaced by users every 1-5 years, and many of these are not junked but rather re-sold by the original customer or a third party
Apple possesses a near religious fealty to the notion of continuous product improvement
Optimizing and innovating all hardware in pursuit of product improvement — and product margins — is hardwired into the company’s DNA
Apple’s relationships with IT decision makers and procurement personnel in government, the enterprise and businesses with more than 20 employees is woefully lacking
Apple is worth more than $450 billion and is sitting on approximately $160 billion in cash and equivalents

These guide me whenever I dare pick apart an Apple rumor or chase down the latest crazy Apple tale.

Caution: these ‘knowns’ are not equal!

The majority of Apple’s revenues come from the iPhone. The addressable market for the iPhone is radically larger than the market for any other extant Apple product. Each fact from above, even if entirely true in isolation, is not inviolable should it ever even potentially bring harm to iPhone sales and iPhone margins.

The Apple Rumor Mill

Running rumors though this iPhone prism serves as my handy guide in understanding if a rumor has legitimacy or not.

For example:

An iWatch should almost certainly integrate with (and be made most useful by) the iPhone. An iWatch will likely demand a keen sense of style, luxury branding and retail sales savvy. Given what I know, iWatch rumors are absolutely within the bounds of certainty.

An Apple television would not be appreciably enhanced by the iPhone. Televisions are kept in use far longer than five years. There’s little to justify this rumor, no matter its persistence.

A line of wearables or ‘smart’ accessories that all tie back to the iPhone? Absolutely. These enhance the iPhone’s value and should extend iPhone sales.

That Apple has to do anything this month, this quarter, this fiscal year to ensure its success? Complete nonsense.

A revolutionary new product that just might “disrupt” the iPhone? No. Repeat after me: No. For Apple to even consider disrupting its golden iPhone goose would not only be foolish but darn close to a dereliction of duty. Buttressing this is another fact: there is nothing on the horizon, nothing at all, even remotely ready to replace the iPhone (or any high end smartphone). Nothing. Not Google Glass. Not Oculus Rift. Nothing. We are in the early days of the smartphone market. Do not make me repeat myself.

Within a week of reading this, probably sooner, you will hear yet another rumor about Apple. Before considering it, pro or con, first make sure you run it through your list of knowns. Most of the time, you will immediately recognize the rumor as utter nonsense. On rare occasions however and no matter the source, you will stumble upon a rumor more true than not.

Such is life for those that follow Apple Inc and the hundreds of millions who love its products. The true story of Apple does not begin or end at product launch. Those are merely two data points in an ongoing and very rewarding chase.

—

^{1. [Feel free to counter my claim Apple cannot go down market. Remember, however, even the ‘cheap’ iPhone, the iPhone 5c, is one of the most expensive on the market, and note also the major Apple retail hires come from luxury brand companies.]↩}

VCs On The Wrong Side In The Smartphone Wars

Think of how much better your life is now you have an iPhone or one of its many virtuous progeny…iPad, Android, apps, mobile-optimized games, content and services. Do you want to go back to before smartphones, before tablets? Unlikely. Yet many VCs do. Hence their self-interested handwringing over the alleged slow death of the mobile web.

Do not be fooled. The web is thriving.

The real issue? VCs fear the easy money days of amassing their fortunes atop publicly financed, freely available platforms is long gone. Now they are faced with the daunting prospect of either building their investments inside the thriving iOS or Android ecosystems, both of which demand their fair share of any booty, or figuring out ways to route around these two clever giants.

This is very unlikely to happen.

iPhone, Android, native apps and today’s infinitely scalable private platforms continue to deliver benefit after benefit to users around the world.

A Tax On Venture Capitalists

Chris Dixon of Andreessen Horowitz (A16Z) bemoaned the declining state of the “web” last week, squarely blaming iPhone, App Store and all it has wrought.

What wins mobile, wins the Internet. Right now, apps are winning and the web is losing. Moreover, there are signs that it will only get worse.

Worse for whom? Not me. Likely, not you. Worse, perhaps for a venture capitalist. Just like the original incarnation of the web was worse for music companies and newspapers.

Dixon continues:

Resources are going to app development over web development. As the mobile web UX further deteriorates, the momentum toward apps will only increase.

Resources following users is not a problem. Moreover, Dixon appears to hold a rather limited view of the web. As John Gruber noted last week:

We shouldn’t think of “the web” as only what renders in web browsers. We should think of the web as anything transmitted using HTTP and HTTPS. Apps and websites are peers, not competitors. They’re all just clients to the same services.

The fact is, the “mobile web UX” has not deteriorated. Instead, the web has evolved, as it always has, and new platforms have constructed a thriving business that, for now, better support the needs of the billions of mobile web users. This should be lauded! Indeed, omit the nebulous term ‘app’ and the fact is web services, software and computing functions have never been more robust, more capable, more discrete, more accessible, more affordable. These are all good. I’m surprised any venture capitalist would bemoan this state of affairs.

Let’s not reduce the web to only those parts that VCs can exploit for maximum gain.

More money is presently flowing to Apple’s iOS ecosystem and Google’s Android ecosystem because that’s where the users are. That these two great private companies have their own platforms, their own gateways — and demand payment for access — has actually helped extend the power of the web.

My suspicion, of course, is VCs do not fear a deteriorating web UX, but are instead upset today’s brave new web limits their potential gains. Don’t believe me? More from Dixon’s post:

Google and Apple control what apps are allowed to exist, how apps are built, what apps get promoted, and charge a 30% tax on revenues.

Ponder that. A venture capitalist is decrying a sustainable business as little more than a “tax” on revenues. Again, whose revenues? Apple and Google have each created a marketplace that only a few years ago did not exist. These now serve billions of people. This is a net good, even if it’s not ideal for today’s web VCs.

Shortly after Dixon’s column, venture capitalist Fred Wilson similarly lamented the “mobile downturn”:

It has gotten harder, not easier, to innovate on the Internet with the smartphone emerging as the platform of choice vs the desktop browser.

Wrong! Innovation has never been easier, never been faster, cheaper, more accessible. Time for VCs to accept this new world.

Before the iPhone, before the App Store, the ‘open web’ offered a massive resource VCs happily plundered: the public switched telephone network. The costs of this public infrastructure was borne by carriers, the government and each of us. VCs piggybacked their investments upon this infrastructure, which carried them to unfathomable wealth.

Those days are gone. They will not return, no matter how hard VCs press for a change.

A Boon For Users

If the VCs really want to alter today’s mobile reality, they are welcome to risk their sizable funds toward technologies and services that improve the non-app web or completely disrupt the current state of affairs. After all, despite their assertions, the web has not been shut down or corralled. It’s still there, availing itself to all.

Build something better. That’s my challenge to them.

Do they have it in them? Consider this final lament from Fred Wilson’s post:

So (VC) Brian (Watson) pulled out his iPhone and I pulled out my Android and we took at trip through the top 200 apps on our respective app stores. And there were mighty few venture backed businesses that were started in the past three years on those lists.

This matters not one whit for users.

It just may be, thanks to the iPhone, Android and the new mobile web, the future big money in tech will have to be earned the old fashioned way: brick by brick; through building an actual sustainable profit-generating business, from scratch. Now that would be disruptive.

Better For The World? Apple Or Google?

Arguably, Apple and Google are the largest, richest, most powerful, most influential technology companies on the planet. Across many markets their products, services and technologies directly compete with one another. Yet, in countless endeavors, each benefits the other, enabling both to earn more, reach more, do more, grow ever larger, their creations touching nearly all of us.

Which begs the question: which company creates more good in this world? Apple or Google?

Unknowable?

I think the question a valid one. Despite their many similarities, the companies have profoundly divergent strategies when it comes to the development, release and spread of technology. Seeking the answer to this question might help us better understand how we should construct future tech companies, offer insights into what we should value most and whose methods we should help foster.

Pay To Play

As both Apple and Google continue to extend their reach deeper into our lives, the more obvious differences between the two begin to peel away. Once, Apple was hardware and Google was software. Now, both are mobile devices, cloud computing, entertainment, maps, apps, payments, productivity, music, messaging and — even if poorly — social media. We have to look deeper.

Start with pricing. Apple, whose products no one is required to purchase, is regularly blasted for ‘premium’ pricing. Google, whose products are mostly free, generates no such acrimony.

Is it better to demand customers pay for a product, to enter into a covenant where value is promised at a specific price, as Apple requires? Or is offering services for free the superior model? Certainly free seems better, but the price of free in today’s world is constant advertising, payment of which is continuous mining of our personal data. Does the Google way — pulling off tiny pieces of ourselves, bit by bit, moment by moment, and then selling these off to an unknowable coterie of people and businesses — better serve humanity?

I want to be in favor of free, but in its current form, the price of free seems too steep for me. For the rest of the world, I think in pricing Google trumps Apple, whether I wish it so or not.

No Product Before Its Time

Another core difference: product development and release.

Is it better to release products only when they are ready, as Apple does, or as soon as they reach sanctioned beta stage, as Google does, allowing anyone to experiment with their creation, make it better, expand its reach? Again, this seems to favor Google.

While we wait for the next insanely great product from Apple, a hyperfast-moving Google is — right now — helping us understand the pitfalls and benefits of driverless cars. Google Glass is forcing us to consider our views on personal privacy in public spaces and it must be acknowledged, pushing the technical boundaries and design limits of wearable technologies.

Google is meeting with city leaders, exploring methods to offer cheaper, radically faster broadband. They are unleashing ‘balloons‘ to bring the Internet to all points of the world. Push, push, push, now, now, now. The Google Way seems more right for our world.

Meanwhile, Apple…what, exactly? An iWatch likely few can afford once its finally released?

Tim Cook recently tweeted:

“Remembering Steve on his birthday: ‘Details matter, it’s worth waiting to get it right.'”

Is this true? Is this best for the 7+ billion of us on the planet? To wait?

Consider Android. Android is now the most widely used operating system in the world in part because Google unleashed it, for free, even while its business model remained in flux, and without waiting for agreement from potential stakeholders like Java’s Oracle. Nor was it perfect, by any stretch. Our gain.

We are rapidly connecting with one another, linking to astoundingly low-cost information resources whose total value is nearly incalculable, thanks in large part to this essentially free, freely available and extraordinarily robust mobile operating system. Humanity has been aided by Android, clearly.

Step back. Did Apple’s deliberate plodding make all this possible?

Look at an Android device pre-iPhone: it is an evolutionary dead-end. Think of all the apps, services, knowledge, entertainment and productivity we garner from all the phones that came only after Apple and the iPhone cleared the way. Consider the rather glaring limitations of Android, pre-iPhone. Had Apple launched iPhone before it was ready, before all the “details” were just right, the entire smartphone industry, now over a billion users strong, may have taken a completely different path – and died on the vine.

Might the same thing happen in wearables — likely the next iteration of the ongoing personal computing revolution? As wearable technologies abound in type and quantity, we await Apple’s entry.

Yet it may be wearables can only achieve their fullest potential for improving our health, our fitness, our connectedness to our minds and bodies only after the details are exactly right. That is, only after Apple clears a broad, lasting path just as they did with Mac (PCs), iPhone (smartphones), and iPad (tablets).

We have significant evidence Apple’s entry into a category has disproportionately, even radically re-shaped all that came before and all that follows. Perhaps we are better served in our analysis if instead of viewing Apple as sitting atop the ‘high end’ or ‘premium’ segment of a market, we acknowledge their products as a sort of official start, or a big bang of a new product category, unleashing and enabling the full potential of such technologies.

Thus, it may be that Apple better serves humanity even as their products are viewed by many as the tools of the wealthy. Apple made possible the very revolutions Google has seized upon. I think when it comes to the development, creation and release of products, Apple does humanity better.

Origin Myths

While I harbor suspicions regarding some of Google’s actions, I deeply admire their speed and scale, along with their willingness to try, to fail, to push. Google’s fast, expansive focus seems much more aligned with our nature and certainly more aligned with our times. Google’s beliefs include:

fast is better than slow
democracy on the web works, and
great just isn’t good enough

Thanks in part to such beliefs we most likely will have faster broadband, more bandwidth, radically cheaper smartphones connecting the world, tablets everywhere, a nearly infinitely scalable and mobile-optimized real-time web, all manner of affordable information and content, search, driverless cars, and whatever else Google is cooking up in its labs or scouting for acquisition.

That’s a substantial list.

It took Google for us to have YouTube, free maps, real-time-anywhere search, and the ability to live our lives within a fully digital realm. Yes, this comes at the creeping and rising cost of advertising everywhere and aggressively lobbied laws that do not necessarily favor our privacy interests. Almost seems fair.

Apple’s mission, by contrast, is shockingly prosaic:

Apple designs Macs, the best personal computers in the world, along with OS X, iLife, iWork and professional software. Apple leads the digital music revolution with its iPods and iTunes online store. Apple has reinvented the mobile phone with its revolutionary iPhone and App Store, and is defining the future of mobile media and computing devices with iPad.

That’s it? No move fast and break things? No do no evil? Not even a computer in every purse?

In vision and purpose, I say Google bests Apple.

I suspect that despite their overlapping business interests, core differences between the companies are inextricably linked back to their founding — the mad, beautiful and deceptively detailed vision of computing borne inside the mind of Steve Jobs, versus the youthful, audacious and limitless grandiosity of Page and Brin.

Apple and Google are a mere five miles from one another, yet the difference in their work and world views appears an impassable chasm. I do not know who does more for humanity. I am greatly proud, nonetheless, that these two giants of innovation are American-born, American-led, and are both, separately and together, creating a better world.

The Mystery Of Flight 370 And Friends On The Internet I Will Never Meet

My mind continues to reflect back to those with loved ones on Malaysia Airlines Flight 370*. Desperate, hopeful, hopeless, an inexplicable truth staring back at them. What can they do? Wait still more? Call?

I picture each of them picking up their phone, praying, miracle of miracles that their loved ones or colleagues are somehow safe, alive, and will return soon. The phone rings and rings – no answer, obviously. Or perhaps, they hear a carrier’s hollow, computerized message and then an empty silence, their turn to speak. What is there to say?

For a few, the horror and blessing of their loved one’s recorded voice, on infinite loop, tragically disconnected from all we are connected with – which, even in the 21^st century, remains frightfully limited to the digital and the physical.

Would you leave a message? Where does it go?

Might an errant text arrive after the terrible truth becomes known? “Mom, Dad. We land in Beijing in just a few hours. See you soon! Much love.”

Despite the persistent limitations of our technologies and their callous lack of both awareness and emotion, I am nonetheless thankful for the many new forms of connectivity we have constructed for ourselves. For all their technical trappings and the radical new linkages between man and machine, I believe they are simultaneously enabling a more profoundly human world.

Never Too Far Away

Death remains blunt and obvious. For those of us old enough, however, born in an era of non-constant connectivity, we can still recall the powerlessness when our parents picked up stakes and moved us far away from all we knew. Dear friends we would never again see nor speak with. We might forget their names, forget what they looked like. We become ghosts to them, as they are ghosts to us.

No longer. Friendships now can easily survive great distances.

It gets even better.

There are friendships that are only now even possible, meaningful relationships with people we never actually meet and likely never will. This should be celebrated.

Yes, we now regularly interact with machines, artificial intelligences, databases, Siri and her cohorts, and it’s all amazing. But we are also interacting with more people than ever before as friends. I think this may have an even more lasting impact on humanity’s future.

I ‘speak’ regularly with people on Twitter, people I call friends, yet have never met them and know I almost certainly never will. I miss them when they are absent.

When they are offline for several days in a row I start to worry. Who can’t take time out to tweet they are busy and won’t be online for a week or so? Something must be wrong!

We share jokes, photos, advice. We listen. We recommend. We know each other’s likes and dislikes. We cheer when they get a new job or announce a new addition to their family.

Understand, this is not at all what I imagine a call on LiveLinks to be like. It’s no 90s phone sex thing, no going onto Yahoo chat and pretending to be someone you are not. We are real. These connections are our friends. We are like pen pals of old — only at infinite scalability and with far more robust communication modes at our disposal.

Is there a name for these types of friendships? Are they more or less special? It seems less, if I am forced to choose, though I admit to more than once being engaged in a discussion with good friends, friends mere feet away from me, then stopping to converse with one or more ‘friends’ on Twitter.

Of All The Souls I Have Encountered

We happily accept we have methods of maintaining contact with friends and family across any distance — via texting, FaceTime or Facebook, for example. Such methods are available to children as equally as to adults, fully accessible and without cost for most of us. That’s wonderful. What we rarely discuss, however, is these same tools have led to an entirely new reality: connecting with people on a deeply personal level, without ever meeting them in the flesh.

They are not ghosts, though we never see them. They clearly impact our lives, though we may not even know what they look like, what they sound like, their height, shape, skin color. I think this is profound.

I never want to reach out and discover a loved one no longer on the other end. But what we have today is, I believe, much better than before. Which probably makes it far more jarring when someone we know, in the flesh or not, becomes forever disconnected from us.

*At the time of writing, there were still no confirmed sightings of Malaysia Airlines Flight 370.

Image courtesy of Bloomberg.

India And The Future Of The Smartphone Wars

Perhaps I should have titled this “India Is The Future Of The Smartphone Wars”?

The appointment of the highly capable Satya Nadella to lead Microsoft only partly explains why I am thinking more about India and technology. The other reason is that it increasingly appears that the future of smartphones, and the winners and losers of the global smartphone wars, will be determined in large part by what happens in India. Great news for Google, possibly even for Microsoft and Nokia. Less good for Apple.

Despite the rather remarkable success of Indians in Silicon Valley, many of whom, like Nadella, are now leading tech companies, I still meet far too many analysts who remain disproportionately focused on what’s happening in China, or in Europe, while steadfastly ignoring the speedy, highly iterative tech landscape in the world’s second-largest nation.

Consider the following about India:

There are over 1.2 billion people — that’s about 4 USA’s
The median age is 25 (China’s median age is 36 and the US is 37)
India is the world’s 11th largest economy — and still one of the world’s fastest-growing
Annual per capita income is a dismaying $4,000 (by comparison, China’s is $10,000 and in the US it is $53,000)

Populous, young, growing, eager for technology, eager for connectivity, albeit with relatively meager resources to spend. It seems to me that is the perfect mix for disruption. Likely, this disruption centers around what is now our most important tool, the smartphone.

There are already about 150 million total smartphone users in India. Despite that number, and despite the nation’s large population, India is the world’s fastest-growing smartphone market. The giant feature phone market is collapsing.

According to IDC, 44 million smartphones were sold in India in 2013. Phablets (smartphones between 5-6.99 inches) garnered at least 20% of the Indian smartphone market, though other sources place this number much higher.

Using IDC’s latest data, Samsung is the leading smartphone company in India, with India-based Micromax and Karbonn trailing. (Nokia, a leader in feature phones in India lags, though sales of its Lumia devices have steadily increased and the company now may have a 5% share of the market there.)

Given the size of the market, and its rapid growth, and the number of new users, current sales rankings may not matter much. As DNA India notes:

Tier one smartphone brands are ignoring the writing on the wall in the world’s fastest growing smartphone market in order to cater to a global market. This could be a dangerous thing to do especially at a time when the market is growing at a rate of over 150 percent and with 85 percent users still using feature phones. (emphasis added)

2014 could prove a watershed year, considering that:

225 million smartphones will be sold in India just in 2014 — compared to 89 million in the US
Of these 225 million devices, an amazing 207 million will be to first-time smartphone buyers — the largest proportion of new users to existing users anywhere in the world

More so than the spread of 3G/4G, and the rapid improvements in mobile-optimized services, it is the almost unbelievable low prices of new smartphones that are enabling the rapid jump to smartphones in India:

“The median price of a handset has fallen from 8,250 rupees (Dh490) in 2012 to 7,000 in 2013.”

That’s $115.

In fact, about 2/3 of all smartphones sold in India are priced under $200.

The derisively labelled “race to the bottom” is in truth, connecting India, and the world, and gifting us with unbelievably accessible technology.

Mozilla is seeking to create a $25 smartphone. Nokia’s X devices are all priced under $150. The new BlackBerry Z3 costs less than $200. This is amazing and laudable. Indeed, marketing firm Jana, has cleverly predicted that 2014 may be the year when a smartphone costs less than a carton of cigarettes.

The world will never be the same, and what’s happening in India offers us clues to our future.

As the Guardian notes, 2014 is when “the number of mobile internet users in the developing world will overtake those in the developed world.”

Connectivity is flowering in abundance. Equivalent access to everyone and to nearly every data resource will very soon be in the hands of the old and very young, male and female, rich and poor. This may be a first in human history.

We can’t know how this will change us, or change the world. But I suspect that watching what happens in India, and it’s happening so very fast, will provide us with many clues.

Predictions

Sorry. This market is too big, and moving much too fast for me to offer any reliable predictions. That doesn’t prevent me from sharing my thoughts, of course.

Apple

Meh.

Right now, Apple simply has nothing much to offer India. Offering the iPhone 4 for over $200 as they are again, when there are so many other amazing, new smartphones available for far less seems to me almost certain to fail. In fact, I think marketing very old devices against clearly superior ones, at the same price, only harms Apple’s brand. They shouldn’t even bother.

For example, India’s own Lava offers the following Android device for around the same price as the iPhone 4, but here’s what you get:

A sleek, sexy product running on stock Jelly Bean 4.2.1 with a magnesium alloy body, a 4.7-inch HD display, a MediaTek MT6589 chipset, 1GB of RAM, an 8MP camera in the back, a 3MP camera in the front, a panel that includes Sharp’s OGS solution, and Gorilla Glass from Corning.

Or, you can get a Moto G. Even the new Nokia X devices are all available for much less — and they carry the beloved Nokia brand name, look great, and include multiple popular Microsoft services.

In addition, India loves phablets — which pose a direct threat to iPads. Thus, even sales of iPad are hemmed in. Apple probably won’t have anything to offer India for years, in fact.

Will this harm the bottom line of the world’s largest tech giant?

Not so much, and certainly not in the near term. As long as Apple can peel off the world’s top 10% of buyers, they’ll be fine. It is a shame, however, that Apple and the world’s biggest democracy have so little a connection.

That said, Apple can certainly learn from the India market. For example, Indian handset makers are known for their ability to rapidly iterate, offer a host of new products, new models, all with the latest, most affordable hardware, and all at breakneck speed. Apple offers a minor iPhone upgrade about once a year, and a major upgrade about every 2 years. This has to change for success in the developing world — and it may already be underway. As the Wall Street Journal recently discovered, Apple is “hiring hundreds of new engineers and supply-chain managers in China and Taiwan as it attempts to speed up product development and launch a wider range of devices.”

Google

Android is the most popular (smartphone) OS in the world. This is especially true for India, where Google Android may make up 90% of the market. Google should do all it can to continue India’s love of Google Android.

Consider that nearly a third of “Android” smartphones shipped worldwide — that’s now over 70 million devices per quarter — come without Google apps and services installed. Blame, or thank, China, and don’t expect this to change soon. Chinese handset makers, Chinese app stores, Chinese web companies, and the Chinese government itself have little reason to embrace Google or to embed the company’s apps and services into their finished product. If Apple should ignore India for now, as I suggest, Google should similarly ignore China, which will continue to be unfriendly to the company, and instead embrace India.

Google should ensure that its very best tech, its latest services, its most amazingly affordable visions for computing devices all flourish in India, where value and accessibility are paramount. Efforts such as Project Ara, where Google hopes to offer a DIY smartphone for $50, should be heavily promoted and tended to in India, China’s manufacturing prowess notwithstanding.

Nokia

The widely mocked Nokia move to incorporate Android in its new Nokia X line could prove a rather bold, canny move. A feature phone stalwart in India, Nokia has to make an aggressive move to retain relevance in the country’s rapidly shifting phone market. Given the country’s speedy, almost wholesale adoption of Android, this may simply not be possible if Nokia remains fully wedded to Windows Phone.

Nokia’s new X phones will operate on Android, which is everywhere in India. However, they will carry the Nokia brand, retain the familiar Nokia design, keep the look and feel of Windows Phone Metro — and just might renew the company’s smartphone fortunes, all while potentially bringing millions more into the world of Microsoft services.

As Ben Bajarin states:

[Nokia X] is going to help Microsoft acquire customers at the low-end where all the growth is going to come from for the next few years. Every ecosystem needs entry points. Microsoft has a chance to acquire new customers getting their first smartphone and bringing them into the Microsoft ecosystem with a Microsoft ID.

Should the Nokia strategy fail, it’s hard to envision any other OS that is not Android finding any appreciable success in India, no matter the cost.

Where this might be wrong, although I think it unlikely, is if Chinese manufacturers such as the aggressively capable Xiaomi, successfully push out the top Indian mobile phone vendors (e.g. Lava, Karbonn), and thus effectively force them to offer something unique — Windows Phone, even Firefox OS, for example.

Understand, however, that India’s homegrown phone makers are formidable. I do not expect China’s own manufacturers, even such capable ones, to crush India’s leading vendors.

Not all aspects of India’s smartphone market will have a direct parallel elsewhere. The popularity of phablets may never be matched in the US and Europe. Features such as dual SIM are irrelevant in many parts of the world. Nonetheless, the smartphone skirmishes that take place in India will reverberate far beyond its borders. Analysts should pay more attention to this market and its users.

Is Yahoo Even Worth Trying To Save?

Is there any reason to save Yahoo? I say no.

What does Yahoo do? What is Yahoo for? What is Yahoo great at? What is Yahoo even good at?

Yahoo does not have the best technology, nor the best content. Yahoo does not have the best users, nor the most. Yahoo is close to irrelevant on mobile — the future of computing — and has flubbed every effort to be social.

Yahoo is the Detroit of web properties. Once big, once thriving, it helped create a future it can never be part of. It’s only hope, in my view, is to whither away, quickly, so maybe a few worthy pieces can find life in the wild.

While the tech blogosphere was in a tizzy last week, some outraged, most envious over the firing and massive golden parachute that Yahoo’s Henrique de Castro received, they missed the larger story: de Castro was not the “dead man walking.” Yahoo is the dead man walking. Gleeful rubbernecking by industry watchers won’t change the company’s fortunes.

Outraged that Yahoo dropped so much on an executive who failed at his job? Surprised that Yahoo paid so much for Tumblr? The desperate always pay too much. de Castro and Tumblr’s David Karp are, I suspect, only the first of many scavengers who will feast on Yahoo’s bones. Indeed, there may be no better purpose for this company, sadly, than for the fortunate pleasure of a few lucky ones to fatten themselves up as they tear apart the company’s bloated flesh, devouring its cash and resources till all is gone. This makes Marissa Mayer’s reputed strategy of buying talent — at premium prices — tragically comical in its utter wrongness. Throwing good money atop bad, in tech, especially, is always a waste.

I am surprised, frankly, that this isn’t the prevailing view. Industry website TechCrunch recently stated:

Yahoo is a company remade. Under the guidance of Mayer, it has refocused its product vision, purchased talent at a rapid rate, and expanded its native content efforts.

Vision? Talent? Native content? For whom? Can you recall the last time you used Yahoo? Your colleagues? Spouse? Children? Parents? Is Yahoo where you would recommend anyone go to for breaking news, tech news, weather, apps, cloud services — for anything other than your sister wanting to check her horoscope?

Pop quiz!

What do you think of the person with a @yahoo.com email address?

Second question: do you know anyone who uses their Yahoo ID for any external site, app, or service?

Think of computing, the cloud, the web, apps, smartphones, tablets, PCs. You spend hours with these every single day. They are your work, your play, your means of connecting. You don’t want to be without them, not under any circumstance. Probably none of this activity, however, involves Yahoo. Yahoo is AOL without the dial tone.

Yet, despite this, Yahoo ($YHOO) has more than doubled in the past year.

Do not be fooled. This run-up is almost entirely due to Yahoo’s rather fortuitous stake in Alibaba (and Yahoo Japan). Yahoo’s present valuation is about $40 billion. Analysts estimate that Yahoo’s stake in Alibaba is worth about $36 billion, maybe more. Meaning, Yahoo as the world understands it is worth $4 billion.

Think of that. Yahoo mail, weather, finance…Flickr, Katie Couric, fantasy sports, David Pogue, display advertising…and every other Yahoo service and property — oh, and Tumblr — is worth no more than one SnapChat, and less than half a Dropbox. To spend any of the Alibaba largesse to re-remake or re-rebuild Yahoo is a vainglorious waste.

Yahoo is of such irrelevance, I am still not sure I should even write this column.

It’s not just that the various parts of Yahoo are so meaningless to so many, it’s that their sum is worth so much less. The fact is that everything Yahoo once did at least well and everything it has promised to do going forward is done far better by one or more capable companies. For free. Yahoo has been unbundled to death. It will never get put back together again.

Why choose Yahoo over Facebook, Twitter, Skype. Android? Google Search, Maps, Now? iOS. Siri. Pandora. YouTube. LinkedIn. Roku. Netflix. Foursqare. Yelp. Those digital stickers. Huffington Post. The list of what Yahoo should have been and now can never be is frightfully long.

The company doesn’t even have the benefit of control over its destiny. It is run by techies yet dependent upon the vagaries and cold calculus of Madison Avenue. It gets worse. Last month, Yahoo was forced to reveal its rather shocking reliance upon Microsoft:

Yahoo has revealed in a US Securities & Exchange Commission filing that nearly one-third of its revenue last quarter — 31% — came from its search deal with Microsoft, according to a Bloomberg report. That’s far higher than the “more than 10%” figure Yahoo previously acknowledged.

It gets still worse. Per Bloomberg: “Yahoo’s share of the U.S. digital-advertising market is estimated to shrink to 5 percent in 2015 from 5.8 percent last year, while Google and Facebook both may expand their shares, to 42 percent and 9 percent next year respectively.”

Their irrelevance is accelerating.

Yahoo’s mission is focused, perhaps laudable:

Yahoo is focused on making the world’s daily habits inspiring and entertaining – whether you’re searching the web, emailing friends, sharing photos with family, or simply checking the weather, sports scores or stock quotes.

Except, this simply is not realistic given Yahoo’s limited mobile-social-local strengths. Shut it down, sell it off. Once the Titanic has hit the iceberg, all that remains is to ensure as many get to safety as possible.

Last week, Mayer emailed employees regarding the firing of Mr. de Castro. Her very first line:

The beginning of a new year always provides time for reflection.

Reflection is not necessary. Yahoo’s time has come.

Understand. I absolutely do not wish ill of anyone associated with Yahoo, certainly not the 12,000+ presently employed by the company. A native Detroiter, I witnessed first-hand what happens to people, to communities, when companies go under. In this instance, however, I believe Yahoo cannot be resuscitated. The longer the delay, the more the vultures will tear at the flesh, till even the very few parts worth saving are no more.

The Smartphone Wars Pivot And I Jump To Windows Phone

The smartphone wars are over. Apple won.

They are not the only winner, of course, just the biggest. I confess I do not fully appreciate the many moving parts of a Korean chaebol, nor understand Korean accounting practices. Such caveats notwithstanding, Samsung also emerged victorious.

Given that there now exists about a billion persons who use Google services everyday, several times a day, their most personal information monetized by the company’s anonymous servers in steady bursts, clearly Google also won, even if it has yet to show up in their earnings reports.

The losers include Sony, Panasonic, Sharp, BlackBerry, Palm, Dell, and far too many others to list here.

Except, our story doesn’t end there. The world keeps spinning. The market keeps growing, smartphones continue to invade new industries, apps are becoming more robust, software ever smaller, the power and scale of the cloud keeps expanding — and competition never stops.

One Shot One Opportunity Is False

HP — remember them — is set to release a low-end smartphone for emerging markets. Don’t scoff. The vast majority of the world still does not own the equivalent of the very device you refuse to give up for even a day. While Samsung continues to lead all smartphone makers, the company’s operating profit fell notably in the fourth quarter, likely due to reduced margins on its high-end smartphones. Apple, meanwhile, saw its global smartphone share drop to a shockingly low 12.1%. That’s not 12.1% of global mobile phone sales but of “smartphone” sales. I never expected it to be so meager.

Yet, new opportunities abound.

Apple’s iPhone is steadily invading corporate IT. With each job and every task smartphones strip away from traditional PCs, their inherent value increases.

Cars are another new battleground. That constant stream of real-time data, entertainment and connectivity we now demand fill every moment of our lives will not be halted simply because we get inside a car. This is a big deal. Around 80 million new cars and trucks are sold every year.

Last summer, Apple announced iOS in the Car, its effort to integrate iOS apps and services with newer automobiles. I have exceedingly low expectations. Apple makes its money from hardware sales, iPhone hardware in particular. iOS in the Car still requires users to have an iPhone which they must then plug into the vehicle to gain the full benefits of Siri, Maps, iTunes and other content. This is much too limiting.

Google’s recently announced Open Automotive Alliance — still primarily vapor — has a far greater upside as it is free from such device constraints. The automotive market may force Apple to re-think its hardware-only focus very soon. After all, Apple hardware, at least while we are driving, is effectively irrelevant.

The situation is much different in wearables, where I contend Apple has a decided advantage. If we are ever going to wear computing devices en masse — be they wristbands, eyewear or clothing — they will have to be far more than merely functional. They must look good. They must synch effortlessly with our smartphones and other computers. They must be intuitive to operate. We will want to try them on without sales pressure. Advantage: Apple.

Sports and wellness, the Internet of Things, and the extrication of content from copyright, which will allow us to control, share and interact with content at all times and from any place, will similarly spin the smartphone market into numerous overlapping paths, merging with, tearing down and creating industry after industry.

Then there are the giant emerging markets. China, of course, but also India, which has long embraced Sony and Samsung. In my admittedly limited experience, Southeast Asia has long revealed a love of physical keyboards and robust messaging services — offering a potential return to life for BlackBerry.

As the many combatants prepare for these coming new wars, let us rejoice in the fact that we can now can go to practically any mall, any carrier’s store, any electronics retailer anywhere in the world, and purchase an extraordinarily powerful, highly functional and reasonably intuitive connected mobile computer for relatively little money. Which is exactly what I did recently. I was quite surprised by what happened.

I chose Windows Phone.

Though I have used smartphones built for nearly every single platform from all around the world, my go-to device for the past 5 years has been iPhone. No longer.

These are my reasons why — and they remind us that even where the smartphone wars are settled, they are never truly settled.

I Like Big Displays And I Cannot Lie

I now primarily use the Nokia Lumia 1520. It’s huge. I love it. Surfing the web, reading a book, racing cars (gaming), watching movies, scanning my photos; all are so much more delightful on the gorgeous and very big Lumia 1520 display than on the iPhone.

I dislike the iPhone 5(c/s) screen dimensions. I find it much too narrow. The dimensions of the iPhone 5 series, in my view, reveal the limits placed upon Apple by its highly successful app ecosystem. Yes, apps should be optimized for specific screen sizes and Apple is the clear leader in apps, both in terms of quantity and quality. Unfortunately, this results in a display with dimensions that I find to be both limiting and, frankly, unattractive.

I have found no device that is as beautiful as the colorful and unapologetically polycarbonite Lumia phones.

Build Quality

The Lumia looks great, yes, but it also feels great. In fact, Nokia devices have long been known for their build quality and durability. This is not to suggest that Apple’s newest iPhone is poorly constructed. Rather, they feel flimsy. iPhone 5s, in particular, feels much too light, like your grandmother’s jewelry.

Navigation

The combination of Nokia Maps (Here Maps), which includes traffic data, search, and downloadable maps, plus Here Transit for public transportation data has proven more helpful to me than Apple’s alternative. Google Maps with Waze, not fully available on Windows Phone, may prove more useful to most. However, I simply don’t want to provide Google with still more of my personal data.

Accessories

Most iPhone accessories are priced well above my pay grade. Not so with Windows Phone. I recently purchased a car charger for my Windows Phone at a gas station — for less than $10. The low price was due, of course, to Windows Phone’s use of the micro USB standard. Similarly, I lost my Jambox charger. Luckily, it also uses micro USB so I simply swap with my phone charger. Standards make life easier.

iOS 7

I love what I think Apple is trying to do with iOS 7. The problem is, they haven’t done it yet. The emphasis on data presentation, plus improved integration across select apps and functions is a laudable achievement. It’s just that the damn thing freezes and crashes much too frequently.

Live Tiles

Live Tiles are often — but not always — preferable to static app icons. Tiles can display current weather, show me how many calories I have consumed for the day, display my favorite photos. Tiles that merely twinkle and flash and convey no useful information, however, are admittedly a time-sucking distraction.

The Fine Print

I am a Mac user. This means that with Windows Phone I no longer have apps that effortlessly synch across iPhone and Mac. This is just one of the sacrifices I’ve had to accept by choosing Windows Phone.

Because of copyright restrictions, I no longer have full, unfettered access to all the songs and videos I’ve purchased over the years through iTunes.

There are far fewer apps and most apps are of lesser quality on Windows Phone.

Maddeningly, the very latest Windows Phone keyboard remains determinedly stuck in 2011. The keyboard is cumbersome and stupid, rarely correcting my obvious typos.

As much as I dislike the iPhone 5 design, it adheres to what should be a cardinal rule for smartphones, despite everything I have said about big, beautiful displays: for every smartphone, it should be possible for every action to be performed with just one hand.

Games? There are great games on Windows Phone. Microsoft also appears intent on offering a gaming experience that truly integrates phone and Xbox console. Then there’s that bigger display. However, there are far more games for all types of gamers available on iPhone.

Mobile Safari and Mobile Explorer are equivalent. FaceTime and Skype are not, however, with Skype more a global and business telephony service and FaceTime the world’s most accessible video chat service.

Nokia offers highly granular camera controls that are sorely lacking on iPhone. My Lumia takes much better pictures at night. However, iPhone 5(c/s) takes great pictures and is faster to operate.

Email is simpler to use and to set-up on Windows Phone.

The Windows Phone equivalent of Siri is of absolutely no use. As I am at a loss to recall a single instance when I have found Siri useful, this probably doesn’t matter.

Winners & Winners

Clearly, whichever device and whichever platform you choose requires trade-offs. I expect this to become even more pronounced as the smartphone wars morph, move into entirely new arenas, enable new devices, like wearables, reinvigorate old device, like automobiles — and steadily connect more and more billions of people across the world.

For millions of people every month, and for nearly all of us at least once every year or two, an opportunity presents itself to embrace a new or different platform. This is a good thing as it keeps the combatants ever vigilant, always striving to improve.

The smartphone wars are not over. Rather, the first smartphone war has ended.

Where I Save Windows Phone

My name is Brian and I use Windows Phone.

Confession: I want Windows Phone to succeed. I want it to succeed because I believe users will benefit from Microsoft innovation and renewed market competition. I want Windows Phone to succeed because as Android increasingly takes over the computing world I am increasingly fearful of the success of an OS whose very existence is to track and record user behavior across the world.

I want Windows Phone to succeed because I want great, American companies to continue to dominate the global tech market.

I am not at all sure Windows Phone will succeed.

This has nothing to do with the silly, breathless rumors about a Nokia Android device. Rather, even given Microsoft’s money, brainpower and massive “Windows” install base — and 10+ years of fruitless R&D — the world continues to reveal that it is quite happy choosing between Android and iOS.

My hope, thus, is cruelly crushed by market reality. Must be doubly bad for Microsoft, I suspect. Therefore, I offer the following advice to help save Windows Phone.

1. Fewer Apps

Yes, this is counterintuitive, but absolutely necessary. You lost the app battle, Microsoft. It’s over. Accept defeat. We now live in a world where there are far more software applications for Apple products — and they are much easier to buy.

Stop pumping bad apps through the system in a futile attempt to make the actual numbers look not so awful. Instead, focus on offering the absolute best apps of any platform.

I have spent the past 4 years using iPhones as my go-to device. I have spent the past several weeks using the Lumia 1520 almost exclusively. In nearly every case, I’ve found an app equivalent for Windows Phone to match my iPhone. Unfortunately, nearly everyone is awful. Limited functionality, poor to no integration with web services (or iPhone apps), bad design. Indeed, the vast majority of apps in the Windows Phone store appear to me as little more than high school projects. End this anti-user behavior. Ensure that any app offered from your store is absolutely awesome and in no way a pale, brittle facsimile of what’s long been available for iOS and Android. Reject far more apps than you accept.

Fifty thousand great apps is better than 150,000 awful ones.

I also recommend you pledge every single of the many billions of dollars you receive from Android patent scofflaws to fund app projects with the very best app development houses. Bonus: offer huge cash windfalls for successful tie-ins with your very best mobile offerings (Skydrive, Bing, Office, Skype).

2. Fewer Devices

Windows Phone, the platform, will not be widely embraced by OEMs the way Windows was back in the 20th century. Android has won that war and its presence and pace throughout the world is accelerating. Your best hope is to focus on your own great devices. Luckily, you now own Nokia, which makes the most beautiful, best designed smartphones in the world.

Nokia’s problem is its insistence on offering as many variations of devices across every possible region, industry and demographic. This is no longer a viable strategy in a world where we are all connected. Worse, it increases manufacturing and marketing costs, generates user confusion and capitulates to self-serving carrier demands.

This is what you should offer:

Student model — for children, students, grandparents and those of lesser means. The Lumia 520 is amazing for the price. Does the target market even know this?
Business model. Your premium offering. The Lumia 920 (or equivalent) with Office, Outlook, Skydrive and Skype included is a powerful combination.
Globetrotter model. The Lumia 1020 with 41mp camera is the baseline device for artists, photographers, creative types.
Gamer model. Your “gamer” phone fully leverages Xbox and the beautiful large-display Lumia 1520. Maybe offer Xbox credits with every purchase.

Next, you must give each of these devices comprehensible names. 520, for example, means absolutely nothing to absolutely no one. 920 is (obviously) less than 925, which obviously has lesser hardware than the 1020. Right? Nobody knows. Stop such nonsense.

3. Be Mobile First – Really

From this day forward, the role of Office and Windows is not to maximize shareholder value. Rather, it is to maximize profits to fund the future. The future is mobile.

You’ve bravely taken a few baby steps in this direction, and have now evolved from believing smartphones are mere satellites revolving around the PC sun to your current belief, where you appear to grudgingly accept that smartphones and PCs can be equivalents. Still wrong. The smartphone is the center of the computing world. Until you accept this your giant company will continue to flounder.

I fear this will not be an easy fix. Your Surface ads reveal that you, dear Microsoft, can’t even conceive of a “computing” device that is solely and purely touchscreen and mobile. In the second decade of the 21st century you still promote computers and “slates,” such as your Surface, as devices that work best when there is a physical keyboard attached and the user is seated. This is a profound misunderstanding of the future of everything.

Focusing on non-mobile, non-touchscreen devices is like if Android is the Death Star, iPhone is Ben Kenobi and you are Aunt Beru. Don’t be Aunt Beru, Microsoft.

Change your strategy. Radically improve touchscreen responsiveness. Offer a movie store. Make multitasking really work. Fix the (virtual) keyboard. Mobile first — really.

It’s not all bad, of course. Your instincts are sound. Note that the much-lauded Jony Ive continues to parrot what Windows Phone and Nokia have been doing for years: “Unapologetically” plastic devices. Bright colors. Polycarbonite-like feel. Flat design. Lots of white space. He knows.

4. Start A War With Apple

Android is good enough for most of the world. For what it offers, for its price, availability and ecosystem, you aren’t going to convince many to choose Windows Phone over Android, particularly at the low-end. You must prove your worthiness by taking on Apple. Fortunately, that’s where most of the money may be found.

Focus your marketing on a Mac vs PC-like campaign.

Your live tiles versus their static icons
Skype versus FaceTime
20mp and 41mp cameras with Zeiss lenses and Nokia imaging controls versus iPhone’s 8mp camera
Office versus iWork
Outlook versus Apple Mail
Nokia Maps and real-time transit data versus Apple Maps
Xbox versus Game Center
Mock Siri. Belittle Touch ID.

Pay no attention to the Apple echo chamber. Ignore what people may say on Twitter. “In marketing, what looks new is new.”

A relentless assault against the iPhone earns you respect, customers, and helps focus your company. If possible, hire the “PC” guy to do the ads.

Reminder: not one moment of these ads, not one image, may include a keyboard or a person seated. Commercials advertising a “real keyboard” to do “real work” is my grandfather insisting that music used to be so much better. Probably, he’s wrong and if he’s right, it’s irrelevant.

Having spent the past month with a Nokia Lumia 1520, and having used every iPhone, several Android devices, BlackBerry, Palm, Symbian, Asha, MeeGo and others, I know that your odds are slight. Your potential remains great, however. Go forth. No excuses — you’re Microsoft. The time to line up your pawns has long since passed. These are the smartphone wars. Ball so hard.

An Open Letter To App Developers

The smartphone has quickly become our primary interface to the world. The app has become our primary interface to the smartphone. Apps matter. Therefore, app developers matter. Unfortunately, too many apps, too many app developers, likely in pursuit of riches that shall never come, continue to offer copycat apps, apps poorly designed, apps that value ads over users.

I want to help. I know apps, good and bad. I was analyzing the “smartphone wars” back when most tech blogs were still talking Mac vs PC. I have used most major smartphone platforms, at length. This includes Palm and BlackBerry, Windows Phone, iOS and Android, Symbian, Asha and, yes, Meego.

I offer the following rules and declarations in the interest of creating more and better apps for everyone.

The world does not need another weather app.
By 2015, at the latest, I expect Windows Phone will garner at least a 20% share of all new smartphone sales. Create apps for this platform.
It’s absolutely appropriate to ask me to rate your app. Once. If I choose not to, accept this — and never ask me again.
Life is much easier when I can sign in to an app using my Facebook credentials.
Never — not ever — should you request anything beyond my Facebook credentials, however. Do not ask to post my purchase of your app to my Facebook page, do not ask for my location unless there is a clear and present and ongoing user benefit. Do not ever ask me, and especially never require me, to tell you my Facebook friends.
You have 3 seconds, tops. If I cannot fully immerse myself within the wonder and scope of your app in 3 seconds or less, then your app gets abandoned.
Care about your app icon. It really does matter.
Apple does not care about you. Apple provides you, for now, with the single greatest platform for monetizing your app. But do not believe they are your partner. They are the world’s largest (tech) company and do not like to share. iWork, iPhoto, Garage Band, Weather, Maps and more are just the start. Should a new app opportunity arise, possibly one you helped create, Apple will not hesitate to move in. Be ready to out-innovate, pivot, or die.
We take our smartphones with us everywhere. For many, they are the first thing we see at the start of a new day, the last thing we see before going to sleep. This is a tremendous opportunity. At perhaps no time in human history has a single tool been used so fully throughout the day, everyday, for work and play, by child, teen, adult and senior, all over the world. Take pride in your work.
You deserve to be paid. Of the hundreds of apps I have purchased, minimum, I have never once thought that I would rather choose the app with ads over paying $1, sometimes more, for an ad-free app. Even large display smartphones have relatively small screens. Cluttering it up with an ad, ever, is annoying. Worse, it’s a clear intrusion upon my privacy and a waste of time. I never click on a mobile/in-app ad. I can assure you that my time and my privacy are worth far more to me than my ad view is to you.
Users deserve a second chance. Apple, especially, should offer an app trial period. Yes, even for a 99 cent app. Should they ever agree, these rules become even more important.
Apps must be optimized for the platform and device. Always. Smartphone, tablet, laptop, desktop. I subscribe to several web services (e.g. MyNetDiary, New York Times). The smartphone app version may look similar to the website, but must be optimized for the device itself (e.g. iPhone). There are no excuses for failing this.
Touch, pinch, swipe. The touch interface is a beautiful thing. Yet, I have absolutely no use for apps, Clear, for example, or Tweetbot, that insist upon a needlessly expansive variety of gestures to access its data and features. This is nothing more than too many fonts on a Word doc.
Almost every single app I have purchased over the past 18 months I discovered from a Twitter follower or a Facebook ad. Nowhere else. Not Apple genius. Not Google search. Not any app-focused website. You should know this.
Specials are viral. I find out about your app on Twitter, for example, and learn it’s half-priced for today only, I am both extremely likely to buy and to tweet my purchase to others.
Apps are like sperm. Only the first survive. If I have a decent grocery list app, say, there is an extremely good chance your far better, newer grocer list app will be irrelevant to me. Similarly, an app not on the ‘home’ screen is likely not long for this world. No advice, merely an acknowledgement. Your work is hard.
Hold the line. Google has taught us that other’s information should be accessible, for free. Apple has taught us that hardware, not software, should be paid for. I don’t really know how you can succeed in this environment. But I hope you do. Most of you do great work.
You get one chance only to ask if I want to connect with my friends. I should not have to repeat this. Ask once, then accept my ‘no’.
I have a lot of friends. I know a lot of people. When you show me people I know or may know or should know and ask me to connect with them via your app, you make me feel nearly as dirty as you are.
Never scan my contacts. Never ask to scan my contacts. It is a betrayal. This is why I can’t have LinkedIn on my phone.

As the world goes mobile, connecting everyone and everything, focused, functional and highly usable apps will serve as the entry point to all the world’s data, resources, people and content. The humble app, then, is a rather noble device. Treat it and its users with all due respect.

Godspeed.

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.

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.

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.

If Jeff Bezos Is Serious About An Amazon Phone He Better Take Out His Wallet

Over the past several weeks, rumors of an “Amazon Phone” have become more persistent, if no more credible. The rumors stick, of course, because Amazon has years of experience designing, developing, selling (and I assume servicing) personal mobile computing devices — the Kindle line of eReaders and tablets. In addition, Amazon operates its own Android app store, has a very successful cloud infrastructure platform, and manages one of the larger direct-to-consumer smartphone channels. Add to this the company’s robust digital media ecosystem — books, music, movies and more — and it’s easy to understand why so many believe Amazon can and will make its own smartphone.

There’s only one problem: every time we might use an “Amazon smartphone” we most certainly are (via their cloud, apps, payments platform, rumored smartphone sensors and integrated services) visiting Amazon.

And Jeff Bezos has taught us that every time we visit Amazon we should demand and we should receive a whole host of free goodies. This alters the entire Amazon smartphone equation.

Free Free Free!

A famous Bezos quote is “there are two kinds of companies, those that work to try to charge more and those that work to charge less. We will be the second.”

I won’t call Bezos a liar, the quote is accurate. Only, it’s not complete. Bezos and Amazon often do charge less than the competition. They are like WalMart in this regard. Where they are different, however, is in making that (slightly) lower price even more appealing by throwing in a feast of freebies.

Amazon Prime, for example, is damn near a steal for my family — just on shipping costs alone. There’s also the many free streaming movies we get for being Prime “subscribers.” We get free books on Kindle, free Android apps, free cloud storage for our many digital belongings and much more. Then there’s all the sales taxes we’ve saved by choosing Amazon instead of buying local. I shudder to add those up.

The modus operandi of Amazon isn’t “cheap” or “low price.” Rather, it’s using other people’s money — including some from Wall Street — to subsidize the company’s most favored customers.

I am happily one of Amazon’s most favored customers.

But I have no intention of getting an Amazon smartphone, however. Not unless Bezos hands me a great deal more freebies than ever before.

All Amazon All The Time

Matthew Panzarino of TechCrunch recently provided details on the rumored Amazon smartphone(s).

Amazon is planning two devices, the first of which is the previously rumored ‘expensive’ version with a 3D user interface, eye tracking and more.

Another feature said to be planned for the device, but not yet locked for release, is an image recognition feature that lets users take a shot of any real-world object and match it to an Amazon product for purchase.

Count me as highly skeptical on any of this. An actual value-enhancing 3D screen — before Samsung, Apple, Sony, LG or Motorola? Eye tracking and image recognition that really works? From the company that is primarily a web commerce and services concern?

Worse, the company suggests they may charge us for their smartphone! Recall, Amazon publicly told AllThingsD: “we have no plans to offer a phone this year, and if we were to launch a phone in the future, it would not be free.”

If it’s not free, what could be the actual selling point? Better hardware? Better software? Better ecosystem? That seems extremely unlikely. Lower prices? Between iTunes and App Store pricing and Google giveaways, how much lower could Amazon go?

Answer: they’d have to start paying us to use the device.

It’s the opposite of free!

This is not so far-fetched.

The Opposite of Free

Smartphones are profoundly altering commerce. We use them to buy, to research what to buy, to see what is available to buy — at this moment, at this exact location, and from whom. We use our smartphones to complete the purchase, to make the payment, to store our coupons, to ask our friends for recommendations.

Amazon wants badly to capture and monetize as much of this action, and as many of these steps, as theoretically possible. Give Bezos his due for thinking in such grand terms.

Everything Google does, for example, is to get us to provide more of our personal information, which they can then monetize. Everything Amazon does is to get us to make more of our purchases through them. An Amazon smartphone would no doubt be designed for just that.

Which, from a user’s standpoint, sounds absolutely dreadful.

An Amazon smartphone could only work if Amazon paid us to use it.

Amazon is a Tiger. Jeff Bezos the Tail.

In a recent piece in BusinessWeek, Bezos and Amazon are reverentially lauded:

Today, as it nears its 20th anniversary, it’s the Everything Store, a company with around $75 billion in annual revenue, a $140 billion market value, and few if any discernible limits to its growth.

I’m less sure of that last bit. Admittedly, I use Amazon regularly. The reasons are clear:

the sales process extracts only minimal pain
the products are available within only a few days
the prices are reliably low
all the free stuff the company throws in with every purchase

Just one of those goes away, however, and I will look elsewhere — possibly even make my purchases elsewhere. Which means there is at least one very obvious limit on Amazon’s growth: if the rubes who are subsidizing Amazon’s most favored customers ever rebel, us most favored customers just might go elsewhere.

I can’t say when or if that will happen. But, I can say that if the Amazon smartphone is not free, as Amazon says, then it will have to compete with other devices. I simply do not believe Amazon can win on a level playing field.

I could be wrong. There may well be an Amazon smartphone on the horizon. It may turn out to be great. Time will tell.

But I am certain of this: Jeff Bezos better be ready to pull out his wallet if he’s serious about entering the smartphone wars. I will make him pay a fortune for my business. I suspect we all will.

It’s Tough Competing With the iPhone

Understanding what is happening in smartphones is all a matter of perspective. It is easy to get caught up in the OS market share statistics and lose sight of the big picture.

comScore has recently updated their MobiLens and Mobile Metrix, data for US smartphone subscribers in August 2013. Many in the media picked up the point that iOS gained on Android during the month. While this is true, it has actually been going on for almost a year now. In November, 2012, Android peaked in the US at just over 53% share. Since then it has slowly declined. During that same time iOS has been slowly growing.

That is, of course, all very interesting and important to know as we try to get a picture of what is happening with smartphones in the US. When we look at browser share between iOS and Android in the US we see a very different picture.

–US Mobile browser share by type from NetMarketShare

In this picture, the iPhone leads all other platforms in web usage. Android is steadily gaining and that is an important takeaway. But as much as we like to generally compare iOS to Android, the uninformed mistakingly compare apples to oranges in doing so. The iPhone, at this point of time, is not competing against the entirety of the Android offerings in the US. The iPhone does not compete with the low-end, extremely low-cost, Android devices offered free by carriers or on pre-pay plans from retailers, which is why comparing the iPhone to the entirety of Android is a mistake. Rather, to get a holistic picture of what is happening, we must compare the iPhone to similarly priced products. More specifically we must compare the iPhone’s market share to that of other vendors’ products at the same price points. When we do that, we get a clearer picture.

Below is the iPhone’s share against other devices costing greater than $400 wholesale (or offered at $99-$199 subsidized). This chart is based on sell through estimates that I am extremely confident about.

As you can see, the iPhone dominates the premium segment of the market. These estimates are prior to the launch of the iPhone 5c and iPhone 5s. For that reason, I specifically included devices as low as $400, even though the wholesale cost of the iPhone 5c is an estimated $549. I added that price point because I’m convinced that the iPhone 5c will continue to take share from devices — even those devices in the $400 wholesale range — which are generally priced at free by the carriers. I’m also convinced that this will happen in regions beyond the US, as well.

If I were to include only devices which cost more than $500 wholesale or priced at $99 to $199 on contract, the iPhone’s share would jump to well over 70%. As you can see, the iPhone outsells Samsung’s devices at nearly a 3-1 ratio and other devices at a ratio of 5-1 or higher.

Based on all the data I am seeing from demand and sales trends, it is hard not to conclude that iOS will overtake Android in the US in the near future – possibly as soon as the end of the calendar year. But perhaps the most important thing about the iPhone’s share in the premium devices sector is that other competitors have only been able to made weak inroads against it. Samsung, for example, has been spending hundreds of millions of dollars in US-based marketing, yet their share of the premium market has peaked and been trending downward on weaker-than-expected sales in 2013.

All of this is specific to the US. The US market is key for many reasons, not least of which because its one of the most profitable. I am, however, keeping a keen eye on Europe and Asia as well.

The key question in my mind for the US, or other regions for that matter, is whether anyone can legitimately compete with Apple in premium. I think we will observe that Apple can legitimately compete with others in the middle of the market. But whether anyone can challenge Apple’s dominance in the high end is yet to be seen.

Do Android Or Windows Phone Have Any Hope Of Defeating iPhone?

No.

Neither Android nor Windows Phone, apart or in concert, have any hope of defeating iPhone. None. For the foreseeable future, iPhone will remain the world’s most popular, most profitable smartphone by a wide margin. The best apps, the first apps, the most popular accessories, the lion’s share of the industry’s profits all will belong to iPhone.

Indeed, I think the gap in profits and mindshare will only widen from this point forward. The iPhone is simply too good, Apple too rich, iPhone hardware too advanced, the iOS ecosystem too robust, integration across devices and platforms too seamless, retail footprint too large, customer satisfaction too high.

Mobile First

iPhone’s dominance is also partly the result of the right strategic bets. Apple has successfully re-positioned itself as a mobile first entity. Android and Windows Phone not only lag behind iPhone from a financial, technical and platform perspective, their masters — Google and Microsoft — still underestimate just how profoundly mobile will remake computing, work, play, commerce, interactions, our lives. Their smartphones suffer accordingly.

Google, which makes nearly all its money from (stationary) web advertising, continues to focus its efforts on getting more users on the web more of the time. Wise, but not enough. As I have previously shown, the person-to-web relationship is no longer central to the connected user. With smartphones, apps and services such as AirDrop and iBeacons, for example, we will witness a radical jump in person-to-person, person-to-group and device-to-device interactions that bypass the web entirely, never once to cross a Google server or gateway.

Likewise, Microsoft is still designed for a world where the “desktop” is at the center of an ever-expanding sphere of computing devices and services. This is fail. As Ben Bajarin has shown, it is smartphones, not PCs that will serve as the hub of our mobile, social and highly connected lives.

Apple’s iPhone is simply too far ahead of the competition everywhere that matters.

But, there remain opportunities — very big ones, in fact.

As I have written in the past, do not be misled by those who insist that Apple can magically go down-market whenever they wish. This is false. Apple’s skill set, cost structure, corporate expertise and branding all prevent this. Thus, Windows Phone and Android vendors can fight it out over the low-price, low-profit market.

There are several additional paths to take. These can all benefit from non-Apple innovation.

Form Factor

Apple now controls the most robust developer platform for personal computing. No one on the planet foresaw this happening, not even Steve Jobs who initially radically underestimated both the disruptive power of the app and the near-limitless potential of the iPhone.

Therein lies the opportunity.

Apple is now beholden to its developer community. The iPad and then the iPad Mini, the iPhone and then the iPhone 5, all have very specific display sizes in large part because these work best for the nearly million apps available. You may pine for an iPhone “Note” but the fact is Apple cannot offer us a wide array of display sizes because this would harm the performance and presentation of existing apps.

Android and Windows Phone should therefore radically expand their efforts and develop devices that embrace all manner of display size and form factors (e.g. these massive Microsoft ‘tablets’). The upcoming “bendable” LG smartphone and the extremely popular large-display Samsung devices reveal the potential of this market.

Similarly, iOS cannot well support physical keyboards. Mobile devices with physical keyboards — including, yes, the Surface — will remain in high demand for years to come.

The Integration of Things

The shockingly rapid transition from iOS 6 to iOS 7 only hints at the potential power of Apple’s platform. With hundreds of millions already on iOS 7, app developers, payments platforms, makers of accessories and hardware companies all know that building for iOS, unlike all other platforms, is a near guarantee that their service or device will function properly and have access to the most lucrative market.

There is another path, however, one which Apple may simply be unable to support: everything else in our lives.

I want my smartphone to serve as my identity, my credit card, my house key, car key, to manage my heating and cooling, monitor my home when I am not there, control my washer and dryer, serve as my television remote, connect with my medical devices (e.g. blood pressure monitor), track my dogs, offer me instant access to the subway and thousands of other activities.

Given the obvious limits on Apple’s marketshare and hardware development, Android and Windows Phone need to position themselves as the go-to platform for the Internet of Things. Apple and its hardware partners cannot be everywhere.

Government Intervention

Smartphones connect us with content, with the web, with one another, and with an ever-expanding array of devices and services. They are the center of our lives. Not the PC, as Microsoft envisioned. Not the web, as Google still believes. The smartphone is the last thing we see at night, the first thing we see in the morning. The odds of some new tech marginalizing smartphones any time over the next decade, say, are extremely remote.

A far more likely pitfall for Apple’s iPhone is government intervention.

No matter your political bent, the long history of government from at least the beginnings of recorded history clearly reveal that wherever there is a great deal of money, government will be there.

Apple has a great deal of money.

Expect new rules on how this money is taxed, how it may be spent, and a bevy of new and potentially inexplicable regulations on what Apple must do to satisfy each nation’s (or region’s) many and varied constituencies. Also expect nations to directly and indirectly limit Apple’s sales in favor of national entities.

How such intervention might impact Apple and iPhone is simply unknowable at this point. I nonetheless expect ongoing and potentially significant government intrusion upon Apple’s business, at least from China and the European Union, possibly even the US.

I suspect that government intrusion, more than the marketplace, more than any new technologies, more even than industry collusion, will impact Apple’s and iPhone’s continued success the most over this next decade.

Samsung’s Precarious Position

Samsung, I believe is in a precarious position. I’ve felt this way for quite some time despite their continued growth in mobile over the past few years. But my reasoning comes from understanding how Samsung got to the position they are in with regard to mobile and concluding that the current strategy is not sustainable.

Firstly, you need to understand that the vast majority of Samsung’s huge sales come from outside the United States. Take a trip to China, India, and other quickly growing smartphone regions and you see a vastly disproportionate amount of Samsung devices per others in retail. Samsung’s growth in these regions is tied to form factor variety and price that is it.

Samsung’s premium line has been steady doing ok in the US but still less than 20% of all US smartphone sales of devices wholesale of $500 or more. In other parts of the world Samsung’s premium line has done better as it appears the Galaxy line is on track to ship 43-45m units this quarter. Still most of those outside of the US.

In this chart we see what the distribution of current market share estimates by sales from each vendor on a WW basis.

Apple dominates Samsung in premium devices sales in the US and to a degree in Western Europe. But when you look at the chart above you see that the rise of “others” is the source of Samsung’s precarious position. Growing strong regional brands like Xiaomi in China and MicroMax in India are rapidly eating into Samsung’s global sales of smartphones. And I don’t see this trend stopping.

MicroMax has done an amazing job managing their brand and going right at the core value proposition of Samsung in India. Similarly so has local Chinese brands like ZTE, Huawei and more important Xiaomi.

Many of these local and regional competitors are coming back and are employing strategies Samsung simply will have trouble competing with given their current strategy. What I mean specifically is that Samsung is not doing enough to create brand loyalty or ecosystem stickiness. Samsung is stuck in a continual cycle of competing for consumer choice. This is much more precarious position to be in because next year you must compete for the same customers as equally hard as you did this year.

I’d argue that this is not the case for Apple. They have loyalty that is un-parralled and upgrades from existing customers are practically an guarantee. Apple can focus on new customers, all the while satisfying existing in their ecosystem with new hardware, software, and services. Samsung does not have this luxury, they compete for new and existing customers every year.

Both Apple and Samsung, however, are going to be challenged by regional brands in areas like China and India where regional services are more relevant and more specifically proprietary. I’m convinced at this point that for Apple and Samsung to have a larger play in those regions they will need a much more regional centric strategy than they do today. I see what is happening in China and India as a problem for a global company deploying more global strategies than regional ones specific to those foreign growth areas.

Samsung understands its weak competitive position and it is the sole reason it is necessary for them to spend massive amounts of money on advertising.

To the ecosystem point, this is exactly the fascinating strategy Xiaomi is employing specifically related to China. Xiaomi, has the potential to create services and ecosystem lock in if they do their services right. Right now they run a heavily customized version of Android but it is tightly integrated into their core services which is a cloud messaging service, security service, and backup services. This is likely to expand to media, games, social networks, etc.

The key takeaway for Samsung’s position is simply the rise of the local brands in the areas where they have been the most successful to date. We will see how Samsung responds and if they are capable of building their own services framework on top of Android. This in my opinion is absolutely critical for Samsung to get right if they want to remain a major player in the future of computing.