tablets – Page 2 – Tech.pinions

Lessons Learned (And Unlearned) From The iPad’s Success

[pullquote]The man with a new idea is a Crank until the idea succeeds ~ Mark Twain[/pullquote]

I tripped across a January 2010 article that absolutely skewered the introduction of the iPad, and it was just too, too, delicious for me not to stop and partake of its bittersweet irony. As my holiday gift, I wish to share my discovery with you. But rather than spend our time gleefully binging on the folly of others (and pretending that we, ourselves, knew all along of the iPad’s impending success), I think that we’d be better served by biting off small, discrete pieces of the article, and slowly chewing upon them, so that we might savor the lessons learned — and unlearned — and profit from the mistakes of others (since we, ourselves, so seldom profit from our own mistakes).

And so I present to you — in all its pristine glory — but smothered with a thick, syrupy coating of 20/20 hindsight: Apple iPad: bashed by bloggers around the web.

The iPad turned out to be, at bottom, an iPod Touch with a big screen.

Very true. Or maybe not true at all. Depends on how you look at it.

[pullquote]Products evolve based on assumptions that eventually become outdated. This is every incumbent’s weakness and every startup’s opportunity. ~ Aaron Levie (@levie)[/pullquote]

LESSON #1: Size Matters

No matter what the tech pundits (or the ladies) say, size really does matter. The iPad IS just a big, big iPod Touch — but it turns out that bigger is — perhaps unsurprisingly — a very big deal indeed. As anyone who has used a tablet will tell you, the user experience on the bigger screen of a tablet is totally different than the user experience on the smaller, phone-sized screen.

Who knew? No one, it seems, but Apple.

I think we can cut ourselves some slack here and forgive ourselves for missing this one. In hindsight, the importance of the larger screen size was a subtle lesson indeed. For example, there’s a big difference between a 13-inch notebook and a 27-inch desktop screen but, with few exceptions, developers don’t write software optimized for each screen size. However, that’s exactly what developers do for the phone and the tablet. The iPad has almost a half-a-million iPad-optimized apps and that optimization has made all the difference between the iPad being a wonderful addition to our stable of computing devices as opposed to having it relegated to the dreaded status of being “just” being an oversized iPod Touch.

(The iPad) failed to offer a magical new 3D interface, or an OLED screen, or a built-in projector, or any other revolutionary features.

[pullquote]If you’re willing to fail interestingly, you tend to succeed interestingly. ~ Edward Albee[/pullquote]

LESSON #2: Typing On Glass Is A Feature, Not A Drawback

This lesson certainly came as a surprise to me. Unlike many others, I immediately saw the advantage of eliminating the keyboard and adding in all that newly available screen real estate to the computing experience. However, I thought that the key to the iPad would be the addition of some sort revolutionary new way of inputing text. I was right in theory but completely wrong-headed in practice. I was thinking of a new type of virtual keypad or some kind of voice input. Apple was thinking of typing on a virtual keyboard. “Ugh,” I — and about a million others — thought, in unison.

One thing I didn’t know at the time was that even a slow typer can input text on a virtual keyboard much faster than they can write by hand either in cursive of in block. Why didn’t we know this? It seems so obvious in hindsight. Talk about thinking inside the box.

The other thing we didn’t know — and I guess we can be forgiven for missing this one too — was that the vast majority of users would come to gladly accept the disadvantages associated with not having a tactile keyboard in exchange for the far greater advantage of having a larger, more usable, screen layout.

Indeed, (the iPad) doesn’t even have basic features such as a webcam, microphone, USB port, SD card slot, HDMI port,…standard mobile phone SIM slot (no support for Flash, no multitasking, no networking [printing and file sharing], little storage space, no CD/DVD drive, no stylus, no keyboard.)

I think there’s (at least) two lessons to be learned here — let’s call them two sides of the same coin.

[pullquote] It is better to be hated for what you are than to be loved for what you are not. ~ Andre Gide[/pullquote]

LESSON #3: Distinguish Between The Essential And The Incidental

What’s truly amazing about the items on the list, above, are the many, many things that STILL haven’t been glommed onto the latest iteration of the iPad (USB, SD card, HDMI port, Flash, networking, CD/DVD, stylus, and, of course, tactile keyboards). Yet, somehow, someway, the iPad just keeps on rolling along. If all — or even any — of the things listed above are “basic”, then how can that possibly be?

Well, of course, it turns out that NONE those things, are “basics,” at all. Some of the things on the original list (like a camera) were nice, inessentials, that were added later, but none of them were essential to what made a tablet a tablet.

On Tuesday I wrote an Insider piece on Aristotle’s distinction between the essential and the accidental, and how that applied to Tablets. If you’re a subscriber, you can read it HERE.

The key takeaway is that some things make us what we are and other things simply adorn us. My car has a radio and an air conditioner and I surely wouldn’t buy a car that didn’t have either of those things. But the owner of a Model-T would have.

Radios and air conditioners are not the “essence” of a car. They’re adornments. Things like an engine and four wheels — now THEY’RE part of the essence of a car and the Model-T had all those things, and more.

Likewise, cameras, etc. may be extremely nice to have, but they’re adornments, not essentials. When we bought the Model-T of tablets, it had all the Tablet essentials, and more.

[pullquote]A keyboard case seems to enhance the typing use case of the iPad at the cost of basically ruining every other use case. ~ Fraser Speirs (@fraserspeirs)[/pullquote]

LESSON #4: Compare A Tool To The Job It Is Being Asked To Do

The all-too-common mistake we make is to compare one thing to another; to look at what it has not; to deem it inferior, without having first bothered to ascertain what job it is being asked to do.

For example, a horse makes for a lousy cow. But if you’re a Pony Express rider, rather than a dairy farmer, you’d much rather have the speedy horse than the milk-producing cow.

Further, the very same feature that makes a tool useful for one task can actually be quite detrimental when the tool is applied to another task. Udders and speed are quite useful, in their place, but neither large udders on a horse nor great speed on a cow are considered to be desirable traits.

Similarly, while multiple ports, Flash and multi-tasking may — like udders — be eminently practical and useful additions needed to milk the best computing experience from our notebook and desktop machines, they may also be udderly useless when one’s ‘express’ goal is to ‘horse’ around with their mobile computer with the expectation that they can ‘ride’ their battery on a single ‘charge’, all the live long day.

[pullquote] Analysts are the jesters of the corporate court. ~ Horace Dediu @asymco[/pullquote]

No Flash means no Farmville or similar Facebook games.

Oh…my…god…

There’s probably a great lesson to be learned in there somewhere, but I’m laughing far too hard to discern it.

Gizmodo, the influential gadget blog, has a post – 8 Things That Suck About the iPad – that says No thanks! and gives the device the thumbs down.

Yeah, about that Gizmodo article. I tried to follow the link, but the article has been taken down. Now why do you suppose that is? Update:[Found the link to the Gizmodo article]

[pullquote]I am certain there is too much certainty in the world. ~ Michael Crichton[/pullquote]

LESSON #5: We Judge Too Quickly

This one simply isn’t going to change. To paraphrase Carrie Fisher, instant analysis takes too long ((Instant gratification takes too long. ~ Carrie Fisher)). We want our answers and we want them now, Now, NOW.

The problem, I think, is that one of the most intolerable things in life is uncertainly. We simply hate that feeling of not knowing. But if there’s one thing we know for sure, it’s that nothing we know is for sure. If you want to be smug, make snap judgments. If you want to be wise, learn to tolerate uncertainty.

One aspect of the iPad was that some saw it as Apple’s answer to the netbook – a cheap form factor that millions want but Apple won’t supply. CNet argued that the iPad wasn’t the answer, in 10 Things Netbooks still do better than an iPad.

[pullquote]There are no right answers to wrong questions. ~ Ursula K. Le Guin [/pullquote]

LESSON #6: Ask Better Questions

I’m guessing that if the iPad wasn’t the right answer, then CNet wasn’t asking the right question. Again, the iPad was definitely NOT a good Netbook. Then again, the Netbook was definitely not a good anything. So why compare the two?

As Horace Dediu and countless others have constantly reminded us, we should be comparing the tool to the job it is being hired to do, not comparing the tool to other tools that do other jobs.

In “The Case against the iPad,” Timothy B Lee wrote: “I’m not impressed. I’m a lifelong Mac fanboy, so I’m not averse to buying Apple stuff. But I don’t understand who this product is marketed for…

[pullquote]In these days, a man who says a thing cannot be done is quite apt to be interrupted by some idiot doing it. ~ Elbert Hubbard[/pullquote]

LESSON #7: Just Because We Don’t Understand It, Doesn’t Mean It Can’t Be Understood

We should never assume that our lack of understanding constitutes ignorance on the part of others. If we don’t understand it, then we need to learn more, not assume that other’s know less.

The iPad name also attracted derision…

Yeah, funny how all those “pad” jokes quickly faded away, right? The lesson here is that:

[pullquote]Suppose you were an idiot, and suppose you made puerile jokes about the iPad’s name; but I repeat myself. ((Inspired by Mark Twain))[/pullquote]

LESSON #8: Success Cures (Or Conceals) All Woes

The iPad was successful so the name is now acceptable. The Kin and Zune were flops so their names are derided and mocked. See how that works?

Silicon Alley Insider had so many negative posts that it headlined its link post Wow, Did Apple Just Blow It?

[pullquote] Any headline which ends in a question mark can be answered by the word no.[/pullquote]

LESSON #9: Betteridge’s Law Of Headlines Is A Really Useful Shortcut For Ending Nonsensical Discussions.

‘Nuff said.

Fake Steve Jobs (actually, Dan Lyons) summed it all up in his live-blog of the launch:

11:01– and i know what you’re thinking – we came up with a new device and all we could think to do with it is run the apps that run on your iphone, and have a clone of Kindle, and now run iWork apps? um, yes. that’s all we could come up with.

11:04– good lord, did i really say this is the most important thing i’ve ever done in my life?

Wow. Just wow.

[pullquote]Great spirits have always found violent opposition from mediocre minds. ~ Albert Einstein[/pullquote]

LESSON #10: Too Much Cynicism And Snark Can Ruin One’s Perspective

I readily acknowledge that Dan Lyons is a lot smarter than I am and a whole lot better writer than I will ever be. But man-oh-man. In his ever-more-desperate attempts to discredit and demean Apple and Steve Jobs, he’s lost his way and gone right off the rails.

Yes, Dan. The iPad may well have been the most important thing that Steve Jobs ever did. It was right there for you to grasp — and instead, you sneered.

“Finally, Apple went too far, and the emperor is totally naked for all of us to see. Ridiculous product. Absolutely completely ridiculous.” ~ Dave Winer

[pullquote]When expressing their opinions, people make two major blunders: never stopping to think and never thinking to stop. ~ Dr. Mardy’s Aphorisms[/pullquote]

LESSON #11: Putting Your Thoughts In Writing For All The World To See May Sometimes Be Both Inadvisable And Unwise

But not everyone took such a negative view. Some reckoned it really was a new type of device, and the Wall Street Journal’s Walt Mossberg argued that ultimately the iPad would be about the software and media, rather than the hardware.

Good for you, Mr. Mossberg! You stepped back from the trees and took a peek at the forrest instead. Well done.

[pullquote] There’s an explosion that’s starting to happen in what you call post-PC devices, right?…We’re getting to the point where everything’s a computer in a different form factor. ~ Steve Jobs[/pullquote]

After an attention-grabbing (but silly) headline — “The PC Officially Died Today” — Nicholas Carr claimed: “we’ve entered a new era of computing, in which media and software have merged in the Internet cloud”.

You know, in hindsight, that headline doesn’t look so silly after all. The PC didn’t die on that day in January 2010, but its reign as the primary computing device in our lives, did.

At The New York Times, David Pogue’s The Apple iPad: First Impressions said the iPad bashing “will last until the iPad actually goes on sale in April. Then, if history is any guide, Phase 3 will begin: positive reviews, people lining up to buy the thing, and the mysterious disappearance of the basher-bloggers.”

Wow. Kudos to Mr. Pogue. I think you got it about as right as right can be.

Maybe the iPad will find a market among marketing people, old people, parents…What (Apple’s fanboys are) really saying is that it’s the computer for idiots. I agree.

[pullquote]Without wisdom, knowledge is more stupid than ignorance.[/pullquote]

LESSON #12: Just Because Computing Is Getting Easier Does Not Mean That We Are Getting Dumber

You know, when I was a kid, my uncles were endlessly playing around with their cars. Today, almost nobody does that. The reliability of the modern car has improved dramatically. The average miles driven and time on the road for cars has doubled in the past 50 years. And guess what? Few people miss having to open the hood to check the spark plugs and tweak the engine every month. We don’t WANT to know anything about our cars. We just want to get in a vehicle that will take us to our destination in comfort and ease.

Same with computers. We’re not becoming stupider just because our cars and our computers are becoming smarter. We never wanted to work ON our cars or ON our computers in the fist place. The car and the computer are just tools to get us to where we want to go. They’re the means not the ends.

I’ll almost certainly buy (an iPad). But unless I’m missing something, I’ll still travel with the Asus that I’m typing this review on.

You’re missing something alright. A BIG something.

[pullquote]We’ve transitioned from using the computing device we hold dearest to us, to using the computing device we hold nearest to us.[/pullquote]
LESSON #13: We Live In A Multi-Device, Multi-Screen World

We used to argue over which ONE computer we would own. Now we, almost all of us, own a phone AND a tablet or notebook or desktop. Some of us own three or more different computing form factors.

Lessons Learned Or Unlearned?

Knowledge can be conveyed, but not wisdom. ~ Herman Hesse

So, has the unexpected success of the iPad truly taught us anything? Perhaps, perhaps not. It seems that some lessons have to be learned over and over again. But maybe I’m being overly pessimistic. Maybe this time, the lessons will take.

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.

How I use the iPad Air

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

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

Portable vs Mobile

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

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

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

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

Computing Solutions Not Computing Islands

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

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

Tablets and the Decline of TVs

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

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

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

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

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

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

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

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

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

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

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

The third quarter’s not the charm

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

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

Mature markets slow down

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

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

Emerging markets are underwater

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

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

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

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

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

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

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

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

When Genuine Data Leads to Disingenuous Conclusions

I genuinely love the industry analyst business. I love the role we analysts, our data, and our commentary play in helping companies make strategic decisions. However, I’ve noticed a disturbing trend. ((It’s a “Jump to Conclusions” mat! You see, you have this mat, with different CONCLUSIONS written on it that you could JUMP TO! — Tom Smykowski from the movie Office Space))

The challenge with data is that the truth lies in the interpretation. Without context genuine data can lead to disingenuous conclusions. This is why data cannot be put out in the public without context. Yet this is exactly what happens. It creates a scenario where a media industry who thrives on negativity can take genuine data, miss the context, and create stories around a false narrative. It is not their fault entirely. It is the fault of the data firms who release data to the public, without proper interpretation or context, and allow the media industry to draw their own conclusion, and often a false one.

Genuine data should point out market truths. However, when presented in the wrong way, it has the potential to do just the opposite.

Why We Count Things

The bottom line is data matters. If you are a company that makes touch-based displays or sensors you need a fairly accurate view of shipment growth related to the areas you care about so you can plan your long term product cycle. If you are a company that makes screens you don’t necessarily care what the operating system market share is of specific platforms. All you care about is how many screens will be sold over the next few years, and what the likely segment mix of screen size will be. For you, the data matters because you need to know how many to make. This is why forecasts and segment tracking statistics are relevant.

Data, forecasts, and other statistics, should help reveal an opportunity to the interested party. It should also help point out where there are not opportunities.

Not all data that gets put out in the public leads to disingenuous conclusions. However, it is the market share statistics that do so more often than any other. To make my point, and highlight how this happens, I will use the tablet market share narrative as an example.

The iPad Has Lost to Android

When you track the global sales of tablets, it is easy to look at the market share statistics and say that it is game over for the iPad. You can stare at the chart and conclude that the iPad can no longer grow as the world and the growth shifts to Android. There is some truth to the global statistics of Android’s tablet market share. At face value we create charts that look like this:

That is genuine data. Android is being shipped on more tablets than iPads. Therefore, the narrative that Android tablets outsell iPads is accurate at a bullet point level. However, the graph does not tell the whole story and yet so many are left to conclude it does.

If you are a software developer ((Software developers are ones for whom a market share discussion does matter. Perhaps the investment community does also but at large it is irrelevant for most.)) you will look at that chart and say “I should be writing tablet apps for Android.” The problem is… that is an incorrect conclusion when you have the context of the market share data points.

The picture starts to get more clear when we look at the market share of each vendor as a makeup of total sales. Here is that chart. ((Graph viewed with a stack chart. ))

When we look at that chart we realize that the name brands shipping Android tablets are not shipping nearly as many as the iPad. We will also notice that the largest segment of Android tablets being sold come from this category labeled ‘other.’ Upon learning that ‘other’ makes up a significant portion of the number of Android tablets being sold; we must seek to understand what ‘other’ is and ask if it represents the same opportunity as the vendors who are shipping Android as a tablet platform tied to services and app stores.

Understanding Other

The category ‘other’ represents the no-name brand white-box tablets being sold at razor thin margins mostly in China and other emerging markets. Here are some visuals to help with some context.

I wrote about this point in particular where I dug into the gray market for tablets in China. It is a big market.

As I have been digging into the white box segment–which makes up the bulk of Android tablet shipments–I have been trying to understand what consumers are doing with these extremely low-cost devices. As we know, Android tablets globally make up a minuscule share of global web traffic. The latest estimates I saw peg Android tablets at less than .08% of global traffic while iPad is at 4% of global internet traffic. This has always been the stat that has caused us researchers to raise an eyebrow. Android has more volume but significantly less internet traffic. So what is happening?

Nearly all evidence and data we find comes back to a few fundamental things. First, most of these low cost tablets in the category of ‘other’ are being used purely as portable DVD players, or e-readers. Some are being used for games, but rarely are they connecting to web services, app stores, or other key services. I have asked local analysts, local online services companies, app tracking firms, and many many more regional experts, and the answer keeps coming back the same. They affirm that we see the data showing all these Android tablet sales. But they aren’t actually showing up on anyone’s radar when it comes to apps and services in a meaningful way.

Understanding the context, it is hard to genuinely conclude that ‘other’ represents an opportunity for anyone but the white box hardware companies making less than a dollar of profit and component vendors who can supply the parts to make such low-cost tablets. It is certainly not a genuine revenue opportunity for app developers, services companies, or other constituents in the food chain. And other makes up almost 40% of the Android tablets shipped world wide.

So let’s look at the chart without ‘other.’

Now we get a slightly clearer picture. If we eliminate ‘other’ Apple’s tablet share goes to over 50% WW with the closest competitor being Samsung at 18%.

Yet we are still left with a legitimate question which is relative to vendor growth. ‘Other’ is causing a downward trend for the competition. We know that ‘other’ was growing but ‘other’ is not an area any branded hardware OEM wants to go near. So, can vendors grow their share in a growing market against other? That is the key question. To shed insight into that question a little more context is necessary.

Our research, and many others, suggests that over half of first-time purchasers of low-cost tablets had buyers remorse and intend to spend up on their next one. This is why with many of the latest branded crop of OEM tablets, prices went up in order to invest in better components to better the experience.

Our research also suggests that those in the market for a tablet–who plan to use it to do meaningful things for the value chain–prioritize the experience over price. The tablet market as a whole is growing and I tend to view that growth separately from the ‘white box’ category. ((There is likely some percent of ‘other’ that does represent an opportunity, however, we have no idea how much. My suspicion is it is very small so I lean toward leaving it out entirely.)) Doing so brings much more clarity to what is happening in the market for the stakeholders.

We are still waiting for updated figures on these but I wanted to add the needed context about what is happening in the tablet market so that accurate opinions, and more importantly accurate business decisions, can be made with regard to this category.

A similar analysis can be done on the market for smartphones, but I will leave that project for another time. Data is good. But it is dangerous when it is released into the public without context. Data should inform not confuse. Yet, more often than not, data that gets thrown around in the public sphere clouds the truth rather than brings clarity to it.

The State of Tablets

On the eve of Apple’s event–where we expect new iPad’s to be unveiled–I thought I would provide a high level view of the current state of the tablet market. While it may not be terribly obvious to many, the holiday quarter for tablets will easily be the most competitive yet. Amazon’s Kindle Fire HDX tablets have hit their stride and are viable choices. Samsung has been steadily gaining in market share with their onslaught of screen size choices and aggressive pricing. And even though many discount Microsoft’s Surface and the other similar 2-1 PC form factors from vendors like Dell, HP, Lenovo and others, they still represent a force in the market place that some consumers will need to evaluate. While we can debate the legitimacy of all these choices, the fact remains, there will be a plethora of choice in the tablet category this holiday season.

Defining a Tablet

This is easily the most controversial element of this discussion. When those of us who count and segment these categories discuss this point I often feel like it is the ultimate philosophical and post-modern question: what is a tablet?

Early on in the tablet lifecycle many were keen to keep a clean line between tablets and traditional PCs like desktops and notebooks. However, now more than three years later we know the line is blurred.

We have overwhelming data that now suggests that consumers themselves view tablets as PCs. For the mass market consumer there is no division. Many things they used to do on the traditional PC they owned or had access to they can now do on a more friendly form factor with a natural touch interface.

Tablets are the new PC and there is just no way around this. Notebooks and desktops will go through a role shift and have limited appeal and annual growth. When it comes to computing devices, which tablets are, they are the one growth spot. Although, the tablet may come in many different form factors and appeal to different segments accordingly, it is the device for which the PC industry needs to focus on.

Forecasting Growth

We have to take forecasts with a grain of salt in their accuracy. Things change and forecasts need to be considered more liquid than firm. But they do provide a framework to show what segments are growing and which are not. Therefore, looking at what seems realistic in current forecasts is helpful frame the discussion and the category. For my firms estimates I took a number of forecast data we had and used them to create what I feel fits in line with the regional trends we see.

At one time trend data suggested more aggressive growth. It seems as though the trend data in key regions suggests more modest growth to be expected. Perhaps larger screen phones have played a role in slowing tablet growth. One can only speculate but as I point out we must consider forecasts to be fluid. Regardless of conservative or aggressive estimates tablets are a growth segment.

Few Vendors Finding Success

The other key observation when looking at tablet market share breakdown by vendor is that only a few are finding success. Apple, Samsung, and Amazon are the big brands that have the most market share with tablets. And interestingly all of them are coming from a mobile posture not a desktop or notebook posture. Here are the estimates I feel are most accurate of tablet sell through by vendor contrasted with PC sales. ((This chart is using Apple’s quarterly timeline where Q1 is the holiday quarter and Q4 for most others.))

As we can see, Apple is still the dominant tablet vendor by volume. Samsung is growing and Amazon is managing consistency.

Tablet OS Browser Share

Understanding how consumers use tablets is important. We know that iPad leads in browser usage share, which suggests at the very least that the iPad is an internet traffic machine. Browsing the web isn’t the only usage metric that matters but it is the best one we have. Web browsing share is a demonstration of overall device usage. If a tablet is just used for movies is it a tablet or a portable DVD player? If a tablet is just used for games is it a tablet or a portable gaming device? Tablets are best of breed mobile computers capable of web browsing, games, video, productivity and more. A true tablet platform should be about possibilities not limitations. Right now, in all the metrics we can count, it seems the iPad is the best example of a true tablet. ((By stats I mean commerce driven (iPad averages just over $130 per quarter by US consumers), app breadth and depth, developer monetization, etc.))

Here is a chart to grasp web browsing share of major platforms in several key regions.

As we track this information in real time it will be interesting to note any key changes. Right now the iPad dominates every category checked that matters from a market, business, and economics standpoint. The gap between an Android tablet–for someone who wants to use it as a tablet not something else–is minimal from a price standpoint for the value gained. If Apple closes that price gap with iPad pricing options then it is logical that Apple will gain ground in many of the key categories.

Microsoft and their ecosystem partners are the ones to watch to see if ground is gained in any significant areas for tablet intenders. The competition for first time tablet buyers will be fierce. Understanding what consumers want, expect, and desire to do with tablets will be the key in defining who wins and loses in this segment.

Microsoft’s Uncharted Territory

As I study the industry, the market trends, and the solutions trying to flow with the trends, I’m fascinated by what Microsoft is doing strategically. From a historical standpoint, we have to conclude that the Microsoft of old is drastically different from the Microsoft of new. The recipe that got Microsoft to where their once dominant stance in the market has been is not the recipe that will again make them relevant. ((Note I didn’t say dominant, as I have a hard time making the case that any company will truly dominate the market the way Microsoft once did.))

We are seeing this shift in action as Microsoft gets more active in the hardware space with products like Surface and their acquisition of Nokia. We are watching Microsoft abandon nearly all the strategies that made them successful and embracing new ones in the hope of a future. A quick survey of the hardware landscape brings this to light.

Hardware Walled Gardens

What we are seeing is the emergence of hardware walled gardens. Take Surface for example. The Surface–and even more so with Surface 2– was designed with an experience that is based on proprietary hardware accessories. Many of the new accessories and keyboards work only with the proprietary port designed into the Surface’s hardware.

What is interesting about this is that it is somewhat counter to how the industry rallied around Windows to begin with. Microsoft’s success up to this point was built up around the idea of compatible hardware and accessories around the Microsoft ecosystem. A customer knew that if they purchased a desktop or notebook from a Windows vendor that many, if not all of their ports, were compatible with third party accessories. We may be moving away from this model. The only exception was in docking stations. Third party vendors often made their connectors to the laptop proprietary but all other ports were based on industry standards.

A quick glance at nearly every other hardware partner of Microsoft’s and we see the same picture emerging. Nearly all of them are building hardware specifically tied to proprietary ports using proprietary accessories for a specific value proposition. So what has changed that is causing this shift? The answer is differentiation.

During the era of compatible hardware there was nowhere near the need to differentiate as there is today in the broad consumer landscape. When most PC users were being supplied with computers from their employer, it was their employer who made the buying decision and did so in bulk largely based on price. Once a pure consumer market emerged–somewhere in the mid 2000s–we saw a more clear demand from consumers to differentiate and hardware companies were forced to think of new differentiation strategies in order to compete.

This is in essence the challenge of a hardware company who ships the same software as their competitors. Hardware becomes the only real differentiation point and maintaining more loyal hardware customers becomes even more challenging. ??So enters the era of hardware walled gardens. Companies like Microsoft, Dell, Acer, Lenovo, Samsung, Sony, HP, etc., hope to generate more hardware loyal customers by locking them into a proprietary hardware ecosystem. This is out of necessity because they simply can’t do so with a proprietary software ecosystem like Apple can.

Glimmers of Hope

I don’t necessarily think this is a bad thing. I simply believe that it is different from what we have seen historically from Microsoft and its partners.

This trend certainly lines up with the BYOD stance of many corporations today. Consumers may choose the best hardware ecosystem to meet their needs at both home and work. But based on the understanding of differentiation I outlined above, it is fascinating to think that PC companies may be evolving into accessory companies. What I mean by that is that their “box” strategy is really more a means of an end to their accessory strategy where the real money may be.

Now, if we use this line of thinking then the Surface makes perfect sense. While Microsoft has never had a true PC hardware business they have had an accessories business for quite some time. So perhaps the Surface is more an accessories strategy than a box strategy. Whether it is or not, Microsoft’s partners will follow suit. ((Of course, it will be also interesting to see how Microsoft navigates the hardware waters at large. I’ve been of the idea they should license technology like Surface’s connectors, etc., to partners. However, Microsoft seems committed to some degree of hardware.))

We are at the very beginning of this shift. I’ve continued to think that hardware companies will be continually challenged if all they are is hardware companies using off the shelf operating systems. However, by adding a proprietary hardware walled garden angle into the mix things can get even more interesting and actually be a profitable part of their business. Perhaps hardware companies who think about their hardware walled garden may not only continue to differentiate but also may be able to layer web or tie software services onto that differentiation.

We are very early in this hardware walled garden trend and the next 12 months will be very interesting to watch how this new approach to differentiation of Microsoft and their partner ecosystems develop.

Beware Geeks Bearing Hybrids

Anyone that has been paying attention to the evolution of OS X and iOS will have at some point noticed that the two operating systems are slowly acting more like each other. ((All article excerpts are from: “MacPhone Air: Mark Shuttleworth predicts Apple will merge Mac and iPhone“))

Agreed.

Mark Shuttleworth, founder of Canonical who recently attempted to crowdfund the Ubuntu Edge phone that would double as a desktop PC … predicts Apple will merge Mac and iPhone hardware one day soon, creating a device similar to the Ubuntu Edge.

Vehemently disagree.

…Shuttleworth said that though his company’s Ubuntu Edge didn’t reach its crowdfunding goal, it drummed up enough interest in a phone that doubled as a desktop PC, and other companies would adopt the concept as their own.

Yeah, right, You failed miserably, so now everyone is inspired to be you.

“(Shuttleworth pointed) out that the Cupertino company specifically labeled the phone’s A7 SoC as a “desktop-class processor.” Shuttleworth thinks Apple specifically chose this nomenclature as a way to hint at the future of its hardware, stating that it was a “very clear signal” that Apple would merge the iPhone and MacBook Air into one device.

Yeah, right, because Apple just LOVES to give hints (eye roll).

OS X and iOS have been on a collision course for some time now, though both operating systems are traveling in slow trains.

Collision course or parallel courses? There’s a big difference between the two.

Who knows if Shuttleworth is right in predicting that Apple would converge the two devices….

Oh, me, me, me!

I’m sorry — was that supposed to be a rhetorical question?

Shuttleworth’s analysis is as wrong as wrong can be. Here’s why.

Jobs To Be Done

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

If a device isn’t doing a useful job, it won’t get hired. If it’s doing an unmet job, then it will be staggeringly successful.

Tablets are stealing jobs from keyboard-based computers in a steady war of attrition~Horace Dediu (@asymco)

What many fail to realize is that mass market consumers are using tablets in the SAME ways they used to use PCs. And then some.~ Ben Bajarin (@BenBajarin)

As one teen said to another: “I love my iPad. I can do so much more on it than on my laptop.”~ Horace Dediu (@asymco)

If you don’t think that the tablet is doing its job, it’s because you don’t understand the job the tablet is being hired to do.

Design

Design isn’t a matter of building, it’s a matter of taking away. It’s like Michelangelo taking a block of marble and chipping away at it until it reveals David.

Perfection is achieved, not when there is nothing left to add, but when there is nothing left to take away. —Antoine de Saint-Exupéry

Tech Geeks (like us) v. Real People (like them)

I define the word “Geek” as, well, pretty much anyone who is reading (or writing) this article. We’re not like real people.

(I mean, c’mon, you know I’m right.)

The way we see the problem is the problem.” ~ Stephen Covey

— Real people look for solutions;
— Geeks look for problems — and find them.

In most aspects of life, too much of something is just as bad—and often much worse—than too little.~Dr. Mardy’s Aphorisms

— Real people focus on what it is.
— Geeks focus on what is missing.

I’M NOT FINISHED.” —Edward, Edward Scissorhands

— Real people say: “What can I do with it?”
— Geeks say: “What can I do to it?”

In all human affairs, the wisest course is to be passionate about the role of reason and reasonable about the role of passion.~Dr. Mardy’s Aphorisms

Geeks are passionate about reason. They need to also be reasonable about the role that passion plays in our lives.

The brain and the heart are like the oars of a rowboat. When you use only one to the exclusion of the other, you end up going around in circles.~Dr. Mardy’s Aphorisms

Using reason to evaluate a product is like rowing with one oar. Only if we view a product through both its utility and its appeal to human emotions can we truly make any progress.

Geeks Simultaneously Think That The Tablet Is Fabulously Successful And Fatally Flawed

Most people look at the growth of the tablet and say: “Wow, the tablet must be doing something right.”

Geeks look at the growth of the tablet and say: “Yeah, sure, it’s doing well and all…but what would REALLY make the tablet great would be if it were a hybrid!”

Touch Input And Pixel Input Are Inherently Incompatible

DESTINY! DESTINY!  NO ESCAPING THAT FOR ME!” —Dr. Frederick Frankenstein, Young Frankenstein

Contrary to geek wisdom, Frankenstein’s monster was not a shining success, the creation of life from inanimate matter. It was, well, a monster, a sort of hybrid.

— A telescope is good for big things. A microscope is good for small things. A Tele-Microscope is good for nothing.

— A Microwave cooks fast. A stove cooks slow. A Micro-Stove Oven leaves us cold.

This was the genius of the iPad. It was a mediocre notebook computer, but it was a great tablet. This was why, after 10 years of failure, the tablet took off. We still haven’t learned the lesson. Geeks still want the tablet to be a combination of a tablet and a notebook despite the fact that the market clearly prefers tablets to be tablets.

Listening To The Market

When I was in law school, they taught me that when the Judge was agreeing with you, you should shut up and sit down.

Fine, fine advice…that I never took. But that doesn’t mean that you shouldn’t heed those wise words.

The public is the only critic whose opinion is worth anything at all.~Mark Twain

In technology, the market is the Judge. And when the market is shouting you down…

…shut up, sit down and enjoy the ride. That’s what the vast majority of consumers are doing. We would be wise to do so too.

How the Paradox of Choice Will Impact Holiday Tech Sales

The concept of buyer’s remorse in the world of technology is not new. For decades companies have rolled out new TVs, stereos, PCs, laptops and more recently tablets and smartphones and as soon as a person bought one a new model or something better came onto the market. One of the reasons Steve Jobs moved his product launches to a full year apart was because of this issue. When he updated products every six months, he got highly negative feedback from customers who were mad that the product they just bought would be obsolete so quickly. PC and CE vendors still hear this lament all the time as the world of technology has become so competitive they feel compelled to update their products often, thus creating some buyer’s remorse within their user community.

I suspect we are about to enter a period where the number of choices in laptops, laptop convertibles, 2 in 1’s and tablets will offer so much with new models coming out almost monthly, we may have perpetual buyer’s remorse for at least the next six months if not longer. For the first time in my memory, when a user goes out to buy a laptop or a tablet, the amount of products they will have to choose from will be enormous. I believe it will make the decision even harder for consumers to figure out what to buy during this heavy tech buying season and cause a lot of buying confusion.

In the past, if a person were going to buy a laptop, the key criteria would be screen size, processor speeds, hard disk space and price. Except for Apple laptops, brand loyalty was low on the buyers list as they all pretty much looked alike. It was a clamshell with screen and keyboard and not much more. But this year users will also have a plethora of products called convertibles or 2 in 1’s to choose from. These are products in which the laptop screen can either be folded under or used as a tablet or it will be a clamshell design where the screen pops off the keyboard base and can be used as a stand-alone tablet.

At the same time users will have access to new lower priced Ultrabooks which are laptops that are very slim and lightweight. Also up this year will be products called Ultra-lights, which are similar to Ultrabooks but are much cheaper and not as high powered. And, consumers will now have non-Windows based laptops called Chromebooks to pick from. Bottom line is that there will be dozens of new designs to choose from when buying a new laptop.

It gets even more interesting if you want to buy a tablet. The 7″ tablets will be as low as $79 but the bulk of the really good ones will be $139 to $249. Some will be WiFi only while others will have 4G wireless radios in them. Some will have screens with medium resolution, others with very high HD resolution. And the 9-10″ models will be more powerful than ever, something that suggests they could be used more as an alternative to a laptop or PC. In fact, one thing we see happening with a lot of families is that the tablet in most cases has now become their primary computer in the home and the laptop is relegated to being used less often usually just for tasks like paying bills, long emails, document creation, media management and long form writing.

There is a great book on the market called the Paradox of Choice-Why More is less Written by Barry Schwartz. In the book’s description it says:

“We assume that more choice means better options and greater satisfaction. But beware of excessive choice: choice overload can make you question the decisions you make before you even make them, it can set you up for unrealistically high expectations, and it can make you blame yourself for any and all failures. In the long run, this can lead to decision-making paralysis, anxiety, and perpetual stress.”

In the tech world, it could mean perpetual buyer’s remorse as the product a person buys may not actually meet their needs. It may also be a new, updated version could come out just weeks after they buy it. I have talked to a lot of people who need to upgrade their laptops but are actually dreading going out and buying one given the amount of choices they face and the fear they will buy the wrong thing.

We are also seeing concern from folks about how they use these products in their work/home lifestyles. At work they can’t get away from using a PC. But at home they can now do about 80% of what they used to do on a laptop on their tablet. So the question that comes up is “should I buy a better tablet and a cheap laptop, or even consider one of the new convertibles or 2 in 1’s that will be out this holiday?” On the other hand, consumers are weighing another scenario in which they buy a cheap tablet and an updated but cheap laptop or Chromebook.

What I see happening this holiday season is a lot of consumer perplexity when it comes to what to buy. While price is always an issue with consumers, how they use the products in their lifestyles is becoming equally important. What I suspect might happen is that consumers will have a lot of choices, which may cause some confusion in the buying process and we could see the highest return rates of original purchases of PC’s we have ever seen.

What could happen in some cases is for people will get whatever they buy home and quickly realize it does not meet their need. They then take it back and try something else until they find the exact product that fits their digital lifestyle. While this may happen with a only a minority of buyers, it still could be a real problem for all PC vendors since any amount of returns for any reason is a big headache to them and their retailers and hits their bottom line.

While tech products will be high on consumers shopping lists this holiday, this is the first time they will have to consider a huge amount of products coming out in a whole host of shapes and sizes with new features and functions rather than in the past just having to figure out what the best laptop, iPad or basic Android tablet was to buy. I see the paradox of choice being a huge issue this holiday season, something that could especially impact PC/laptop sales while cheap and mid-priced tablets will probably be the big winners in this next quarter.

Martha Stewart vs Mark Zuckerberg. Seniors vs Silicon Valley.

Help! My iPad’s fallen and it can’t get up!

Much mirth ensued across both Twitter and tech blogs last week when the very entrepreneurial — and very senior — Martha Stewart broke her iPad. Perhaps she only has herself to blame considering the series of naive tweets she unleashed upon her followers, including:

I just dropped my iPad on the ground and shattered two glass corners. What to do?does one call Apple to come and pick it up or do I take it?

— Martha Stewart (@MarthaStewart) September 25, 2013

No, Martha. There is no magic button — yet — that alerts Apple that your iPad is broken. Nor does Apple — yet — offer a service where they come to your home and repair or replace your device, not even for the very wealthy. Except, that is not the real story here. Rather, it is this:

Is Silicon Valley really so blind to the computing revolution taking place right in front of their eyes?

I suspect the answer is yes.

The evolution of computing is very clear on this: it starts with a few than spreads to the many, with each new computing revolution touching exponentially more lives: mainframes to minis to PCs to, now, smartphones and tablets. The market for these latest personal computing devices is literally in the billions of users. These billions of users include potentially a billion senior citizens.

Silicon Valley, however, appears utterly blind, even disrespectful to this market; to its size, its wealth and to the fact that it is growing faster than any other demographic, at least in the developed world. Mocking older people’s inability to “google” or to “turn on the Internet” or effectively service their iPad limits us to the incredible opportunities just around the corner.

The Valley’s notorious cult of youth is the most obvious telltale sign.

Consider Mark Zuckerberg, CEO and founder of Facebook, who said a few years ago: “I want to stress the importance of being young and technical. Young people are just smarter. Why are most chess masters under 30?”

In the Valley, youthful smarts trumps all, apparently, and all flows from that.

Now the head of a publicly traded company, Zuckerberg no doubt still believes his youthful words. As the New York Times noted, the median age of workers at Facebook is a mere 28. This is not uncommon.

The seven companies with the youngest workers, ranked from youngest to highest in median age, were Epic Games (26); Facebook (28); Zynga (28); Google (29); and AOL, Blizzard Entertainment, InfoSys, and Monster.com (all 30). According to the Bureau of Labor Statistics, only shoe stores and restaurants have workers with a median age less than 30.

Ask yourself: if a tech company had a median age of, say, 60, would you believe it could effectively build devices and services optimized for twenty-somethings? Yet all of Silicon Valley is absolutely convinced of the reverse.

That Zuckerberg and other leaders in Silicon Valley clearly favor young over old is obvious in so many ways. This shows up not just in the age of their workers. Their ongoing lobbying efforts with FWD.US, for example, are part of a multi-pronged effort to bring talented — young — workers into the US. Perhaps this is wise, possibly even necessary. But shouldn’t such efforts come after they have thoroughly proven their willingness and their ability to hire and train older workers?

Unfair? I don’t think so. The stated mission of FWD.US is “to promote policies to keep the United States and its citizens competitive in a global economy—including comprehensive immigration reform and education reform.”

Given the median age at the many tech companies supporting FWD.US, I confess I find it difficult to accept that their leaders care all that much about keeping the citizenry competitive. Forty year olds can’t learn to work for Facebook?

Which brings me back to my larger point: can today’s youth-obsessed tech companies effectively build products and services optimized for people of advanced age? Is Silicon Valley about to cede this giant market to others?

The demographic that will experience the biggest growth over the next decade — by a vast margin — is seniors. In the US, there are already over 40 million seniors — age 65 or older. Many of today’s seniors, including my parents, are only just now using their first-ever computing device. Almost certainly they can benefit from new form factors, new modes of input, new ways of thinking about UI.

Regrettably, the Valley appears convinced that its devices, such as iPads, and its platforms, including Twitter and Facebook, are magically optimized for all, just as they believe twenty-five-year-olds make for the very best workers. Such a blind spot will no doubt create opportunities for others, elsewhere.

Consider the latest offering via the very creative Jeff Bezos, CEO of Amazon. The company’s new Kindle Fire HDX now includes “Mayday” — a one-click service that instantly connects the user to live person-to-person video chat. According to Bezos, this will “revolutionize tech support.” This may not be a hollow boast:

With a single tap, an Amazon expert will appear on your Fire HDX and can co-pilot you through any feature by drawing on your screen, walking you through how to do something yourself, or doing it for you—whatever works best.

Did anyone in Silicon Valley even contemplate such a thing?

Isn’t this the land of bold ideas and audacious, daring new creations?

I am not calling on Silicon Valley tech companies to build devices and services explicitly for senior citizens. I am asking for far less than that. I am urging the region, filled with some of the world’s best and brightest, to understand that by expanding their worldview — and ridding themselves of their bias of working with and alongside old people — they might understand and then capture a market possibly far larger than any they are in now. All while helping to empower millions as never before.

Surface Thoughts

As I reflected on Microsoft’s Surface event earlier in the week, I was reminded again that in its current form at least, Microsoft is still not yet making a tablet. They are making a PC that kind of looks like a tablet. Unfortunately, for them tablets are successful for reasons PCs have not been. By applying a PC centric philosophy to Surface, the device in it’s current form is still likely to fare poorly in the market place.

Steve Jobs articulated what Microsoft doesn’t seem to understand.

“The iPad is more intimate than a notebook and more capable than a smartphone”

In the article I wrote last year Why I’m Convinced Tablets are the Future I made a point that I think is key from a behavioral standpoint to the above quote.

Devices like the notebook are kept at arms length. Yet a device like the iPad is held, touched, and used in a much more intimate way. Tablets to a degree are significant because things we hold we love.

Microsoft used terms like ‘lap-ability’ and the Surface has a kickstand, implying it will be set down more than held, while the iPad and Apple’s focus on the experience is more around ‘hold-ability.’ From our observational research on how mass market consumers use tablets, ‘hold-ability’ is more important than ‘lap-ability’.

We are seeing a legacy PC mentality being applied to computing by Microsoft with Surface. This is the root of the problem.

I have no doubt there are small niche segments of the business market that are interested in products like Surface but my conviction remains. Surface is not a mass market product. Perhaps that is not the point. But I still struggle to find the point of Microsoft making the Surface.

One may argue that no vendor has done a better job with this form factor than Microsoft. Therefore the Surface is the best of its kind. That will soon no longer be true and Microsoft’s partners will do a better job with these products. Which again will cause us to scratch our heads and ponder why Microsoft is in this business.

Why is RT Still Alive?

The last question that is still perplexing is why is RT still alive. Microsoft is now in sole possession of the Windows RT market. Their partners have all for the most part abandoned it. We can debate the reason for this all day but my belief is that Microsoft understands they need an ARM solution. If not for this version of Windows but perhaps the next one.

We know almost nothing about the next version of Windows. But we do know that Steve Ballmer has implemented a cadence of RAPID RELEASE FOR WINDOWS. So I expect we will see the next version of Windows sooner perhaps than people think.

My intuition regarding the next version of Windows is that Microsoft will seek to truly unify the Windows code base for PCs, tablets, and phones. To do this Microsoft has to assume that the world will not be dominated by x86 in all those segments and therefore to participate in the upside of both tablets and smartphones, Windows, the development tool kits, and the developers all need to be on board with developing for ARM as well.

RT is still alive simply because Microsoft needs the experience with regards to Windows on ARM and needs to continue to make strides for making it as easy as possible for developers to create cross screen and cross silicon software. Surface RT may seem like a lame duck now but it is the bigger picture we need to look at with regard to Windows on ARM.

The Microsoft Surface is (French) Toast

The Apology

Please allow me to begin by apologizing for the saucy language you are about to encounter. There is simply no way for me to tell the following joke without cursing. I really don’t like cursing (although, I do so love using it for effect), so I’m going to employ a substitute for the curse word. I trust that the savvy and discerning Techpinions reader will be able to pierce the veil and see through my little euphemism. Enjoy!

The Joke

On a Saturday morning, three boys come down to the kitchen and sit around the breakfast table.

Their mother asks the oldest boy what he’d like to eat.

“I’ll have some firetruckin’ French toast,” he says. The mother is outraged at his crude language. She hits him and sends him upstairs.

When she calms down, she asks the middle child what he wants. “Well, I guess that leaves more firetruckin’ French toast for me,” he says. The mom is livid. She smacks him and sends him away.

Finally, she looks at the youngest son and asks him what he wants for breakfast.

“I don’t know,” he says meekly, “but I definitely don’t want the firetruckin’ French toast!”

Excerpt from: “Jokes Every Man Should Know”

The Analogy

• The mother in the Joke represents the computer buying public.

• The first two boys represent any one of the several PC hardware manufacturers who made tablets running the Windows 8 software but who have since been booted from the market.

• The youngest boy represents Microsoft.

Microsoft – like the youngest boy in the Joke – has gotten the reaction of the public (the mother) all mixed up. The boy thinks that the mother is upset about the French Toast, not the cursing. Microsoft thinks that the public is upset about Windows 8. So Microsoft has been quick to swear off (see what I did there?) Windows 8 and move on to the brand, spanking, new Windows 8.1. That’s going to fix EVERYTHING!

Or not.

‘Cause the real problem – the problem that Microsoft doesn’t see or get – is with Microsoft’s accursed tablet philosophy. Microsoft thinks that what people REALLY want in a tablet is a PC. And Microsoft thinks that what people REALLY want in a PC is Windows. Thus and therefore, Microsoft thinks that what people REALLY want in a tablet is a PC that runs Windows – a hybrid, that does it all and is all things to all people.

Until Microsoft’s outlook (oh my, yet another obscure reference) changes – and I think it’s unlikely to change anytime too soon – Microsoft, like the youngest boy in the Joke, is going to keep on getting slapped around without a clue as to why it’s happening.

Paul Thurrott’s Analysis

Paul Thurrott, in his article entitled, “Can Surface be Saved?“, is seemingly critical of Microsoft’s tablet efforts but, in the end, he erroneously sides with Microsoft’s take on why Windows 8 tablets are failing in the marketplace.

The Surface Is The New Zune

The parallels with (Surface and) Zune are interesting. In both cases, Microsoft established a new (well, recycled in the case of Surface) brand for a new family of hardware products. In both cases, Microsoft adopted a coopetition model in which it sought to have it both ways by both supporting partner devices and then competing with them head-on with their own.

The fear at the time of the reveal event was that Microsoft would alienate these partners by making its own hardware. ~ Paul Thurrott

Microsoft’s move to “co-opetition” is quite interesting. When Microsoft announced the Surface, the pundits seemed to fall into one of two groups. The theorists suggested that by making their own hardware, Microsoft would harm their relationship with their hardware partners. On the other hand, realists looked at the market and concluded: “Harm their relationship? Nonsense. Where are the hardware manufacturer’s going to go?”

In a way, the theorists and the realists were both right. If the Microsoft Windows 8 Tablet program is the sinking Titanic, Microsoft’s PC manufacturers are the lifeboats and those lifeboats aren’t so much paddling toward anything as they are simply madly paddling to get AWAY from the sinking ship that is the Surface. ((Paul Thurrott: First, of the few PC and hardware makers that voiced support for Windows RT last year and the subset of those that actually shipped devices, virtually all have completely and publicly backed away from the platform. Indeed, the most successful Windows RT device, by all measures, is Surface RT. And that device required a nearly $1 billion write-off because of poor sales.
Second, more and more PC makers are turning to free Google platforms. Not just Chrome OS, which is a super-cheap/low-risk bet, but also now Android.))

Redefining “Superior”

Killing off Surface would just deprive customers of some of the only truly superior PC hardware out there.

And these devices really are superior. We can debate specifics around battery life, the keyboard choices, the number of ports, the non-adjustable kickstand, or whatever. But these are beautiful and well made products. ~ Paul Thurrott

Okey dokey then. Let’s take a step back for a second and examine that bit of analysis. I have no argument at all with the hardware quality of the Surface. Beautiful and well-made? Yes. But nothing is truly “superior”unless it serves its intended purpose.

There is nothing so useless as doing efficiently that which should not be done at all. ~ Peter Drucker

The “Pro” Tablet

I previously described (the Surface) as what a “Pro” line of iPads might look like if Apple were to make such a thing. ~ Paul Thurrott

This is where Paul’s analysis and Microsoft’s tablet philosophy go right off the rails. They both think that what the world wants – that what the world needs – is a “Pro” line of tablets.

…I still believe that this kind of hybrid device—one that combines work and play thematically and tablet and laptop physically—is the future of the PC. Not just the Ultrabook, but the PC. The ability to use and travel with just a single device that does it all is still a dream today. ~ Paul Thurrott

Yeah, not so very much.

I can see the appeal of Paul and Microsoft’s “dream”. But – as Microsoft has demonstrated – merging a tablet with a PC is not a “dream”, it’s a nightmare.

Not One Hybrid, But Multiple Screens

Ironically, Bill Gates predicted the future of computing back in 2007:

I don’t think you’ll have one device.

I think you’ll have a full-screen device that you can carry around and you’ll do dramatically more reading off of that – yeah, I believe in the tablet form factor…

…and then you’ll have the device that fits in your pocket…

…and then we’ll have the evolution of the portable machine. And the evolution of the phone will both be extremely high volume, complementary–that is, if you own one, you’re more likely to own the other.

[pullquote]The one, unifying computer is not the hybrid, it’s the Cloud.[/pullquote]

What’s actually happening is that we’re moving toward owning multiple windows (Ironic, eh?) to view and interact with our centralized data in the Cloud. One screen for our pocket (smart phone), one screen for the desk (PC), one screen for the wall (TV) and one screen for walking and lounging about (tablet). The one, unifying computer is not the hybrid, it’s the Cloud.

So if Bill Gates predicted this so very long ago, why doesn’t Microsoft get it? Well, as Upton Sinclair so rightly put it:

“It is difficult to get a man to understand something when his salary depends upon his not understanding it.”

A hybrid computer that runs Windows is not the consumer’s dream, it’s Microsoft’s dream. And the bulk of the computer buying public is having none of it.

Black or White Thinking

Am I saying the the Surface isn’t good for anyone? Absolutely not. There are literally millions upon millions of users who will need it, love it, absolutely adore it.

But that’s not enough.

In today’s marketplace, millions of computers is a niche. The goal is to sell in the BILLIONS. And I’m not being hyperbolic. Android is closing in on a billion activations fast. And iOS isn’t that far behind.

The pertinent question isn’t whether Windows 8 tablets are good or bad. Like all products, they’re good for some people and bad for others. The pertinent question is one of proportion. Will enough people want enough Windows 8 tablets to make them a majority or even a plurality? All the evidence to date says that they will not.

The Surface Is Firetrucked

So let’s tie this into one nice, neat package and put a ribbon on it.

In the Joke, the mom’s problem isn’t with the French Toast. It’s with the kids’ cursing.

In reality, the public’s problem isn’t with the quality of the Surface hardware or about tweaking the Windows 8 software. It’s with Microsoft’s cursed belief that tablets really want to be PCs.

As long as the kid in the Joke doesn’t understand the problem, he’s going to keep getting smacked around by his mother.

As long as Microsoft doesn’t understand the problem, they’re going to keep getting smacked around by the marketplace.

If Microsoft doesn’t start getting the joke, instead of being the joke, their tablet ambitions are going to end up as (French) toast. ((Urban Dictionary: Toast – Destroyed, terminated, ceased functioning, ended abruptly by external forces.))

Tablets, Seasonality, and Adoption Cycles

There is an interesting shift happening in the hardware release cycle of the computing industry. When the PC was the only game in town bi-annual release schedules were the norm. Now with the increased growth in smartphone and tablets, it looks as though the industry may be shifting to a much more seasonal release schedule. In consumer markets seasonal purchasing has always been the norm. But in enterprise markets the bi-annual release schedules allowed flexibility to purchase new hardware to meet demands throughout the calendar year.

The entire industry appears to be shifting away from that bi-annual schedule and to a more consumer friendly seasonal emphasis. This is evidenced by the slowing growth of both smartphones and tablets on a quarter-over-quarter basis according to some of the latest device shipment data. My conviction is not that we are seeing saturation but seasonality. There are other factors at play which I will get into.

This does not necessarily mean that the tablet category is slowing. Rather, what it suggests is that the buying cycles for tablets are shifting to be more seasonal at large. This was always the case for smartphones at large, but it appears the end of the year is now also the hot cycle for tablets and traditional PCs.

What this means is that we are lining up to have a very loaded holiday quarter with new smartphones, tablets, and PCs competing for consumer dollars. This by itself brings with it ramifications for consumers and enterprises alike.

For the consumer market the challenge is going to be for OEMs to cut above the noise in what is going to be an extremely competitive holiday season. Retail placement, promotions, and online / offline marketing are going to be keys to success.

Market Experimentation

Earlier this week I wrote for my TIME column a piece titled “Why I’m Not Switching from the iPhone.” My overall point of the column was to paint the picture of a mature smartphone consumer. Someone who, through experience, has vetted the options and defined specifically needs, and wants.

 This has always been at the base of our adoption cycle market methodology. When we research consumer markets and try to get the pulse of the consumer in our interview and observational research, much of our goal is in understanding how mature they are in understanding what they want and why. This was also why I wrote the article on our site here called “I need a PC and I know it.” Again emphasizing a self-awareness of technological needs.

We do not have this with tablets. Where I point out in my TIME column that most mass market consumers at a global level are only on their first or second smartphones, tablet owners are largely on their first tablet and the market for non-tablet owners, or tablet intenders is massive. [pullquote]When we are in a position to get our first car we will take it any way we can acquire it.[/pullquote]

We have gathered quite a bit of research suggesting a high level of buyers remorse for low-cost tablets. This backs up our points of where we are at with adoption cycles of these devices. I liken what is happening with low-cost devices for places like emerging markets or first time owners to our first cars. When we are in a position to get our first car we will take it any way we can acquire it. Then after time, generally speaking, more options will emerge and the choice and preference will become more refined.

For many first time tablet owners who just wanted to get in on the hype they wanted to see what the tablet buzz was all about. So they got one any way they could and for a portion of the market they went with cheaper devices. What our research is suggesting is that they learned their lesson, liked the form factor and the upside, weren’t happy with their choice and are looking to spend up on the next one. This data comes from all markets including emerging (like China) as well.

This point about buyers remorse feeds nicely into the data we see about why iPad usage remains so dominant compared to the competition.

So What Does it All Mean

It means that competing for the mind of the consumer is becoming harder and harder. Consumers are going to be faced with an overwhelming plethora of choices. For the masses who still may be defining and refining their needs and wants, as they look to spend up it will favor certain brands they trust or perceive as the market leader. This is why I have no doubt the iPad will sell marvelously this holiday season and why both the iPhone and Samsung phones are still the dominant global players.

Seasonality is going to change things in my opinion. Marketing for one is going to get much more tricky when we have the kind of loaded and confusing holiday quarter I think we are in for the next few years at least. How companies market and position their products to cut above the noise and gain consumer mindshare will be key.

One thing that our data and even the recent research we have compiled continually emphasizes is that as the adoption cycle moves from immature to mature, cheap goes off the table and the masses begin looking for value. This is why I’ll argue until I am blue in the face that a race to the bottom is not actually what consumers want. It may be necessary in some regions, but over time, even in emerging markets, I believe value is what we will be demanded.

In Education, The Tablet Tide Has Turned…And It’s Turned Into a Tidal Wave

Apple introduced the modern day tablet in April 2010. That’s just a little over three years ago. Educational institutions are notoriously conservative – slow to change and slow to adopt new techniques. Yet, here are two stories that show just how quickly tablets are being adopted for use by school age children:

An iPad For Every Student In Los Angeles Public Schools

Los Angeles’ school system, the second largest in the country, is ordering iPads for all its students…$30 million worth of iPads as the first part of a multi-year commitment…Apple says the initial order is for more than 31,000 iPads.

The Los Angeles Unified School District has more than 640,000 students in kindergarten through 12th grade.

It wasn’t even close. The vote of the school board was 6-0.

Despite PC’s “preferred” status, Maine schools go with tablets

Apple’s dominion over Maine schools looked like it would change in April when the Maine Governor’s office announced that the MLTI’s new preferred vendor was Hewlett-Packard – specifically, the HP ProBook 4440 running Microsoft’s Windows 7 operating system.

Maine’s massive Maine Learning Technology Initiative (MLTI)…(revealed) that of more than 69,000 machines, only 5,474 will be the preferred Windows laptops. More than 92 percent of state schools are staying with Apple, the majority of which are turning to iPads… 39,457 students and educators in the MLTI are using iPads for the first time.

A Rising Tide Lifts All Tablets

My father was a school superintendent, so I am painfully aware of how maddeningly slow the wheels of education turn. However, the stars may be aligning for a significant change.

1) A tablet for every school child is a done deal. Most people just don’t know it yet. It’s going to happen and it’s going to happen oh-so-very-fast.

The Pew Research Center has been tracking tablet ownership from May 2010 when it recorded that 3% of American’s 18 years and older owned a tablet. From its most recent survey in May of 2,252 adults 34% of American’s owned a tablet, almost a doubling from April 2012.

Tablets have become an accepted part of everyday life and soon they will become an accepted part of education too. In three short years, we’ve already moved from the “Tablets are a stupid idea and it should never be done” phase to the “Of course Tablets are a great idea in education and why haven’t we done it already?” phase.

2) The tablet software industry is already well-established. Mobile software can be purchased cheaply and easily and installed almost instantaneously.

3) Apple has pulled out all the stops to cater to the education sector in its latest iOS version. Microsoft is giving away Surfaces for $199 each. Heck, everyone is going to want a piece of this market.

4) Win-Win. With millions upon millions of children getting tablets, and with hundreds of thousands of app developers using their creativity to develop educational apps in order to make money, maybe – just maybe – we’re on the cusp of seeing a revolution in computing software for education.

I am cautiously optimistic.

Source

How Consumer Electronics Will Swing With the Seasons

One of the more interesting trends we are watching develop is the increased seasonality of specific technology purchases. We have been anticipating this for a while now as more and more consumers are being conditioned to buy and or upgrade their technology in the late half of the year.

 With Apple being completely silent the first half of 2013, we believe they are clearly embracing this trend and intend to push all their major product announcements to the second half of the year to be in a strong mindshare position for the holiday season. In many countries, premium smartphones are already seasonal purchases as upgrades often come up later in the year. It seems as though tablets and traditional PCs are also on the path to a seasonal pattern.

This has its advantages and its disadvantages. The advantage is that very targeted and specific promotions can be pushed to consumers with new release hardware for the holiday shopping season. Retailers are highly incentivized to get consumers in stores every way possible this time of year and will do what they can to get shoppers in the doors.

The disadvantage is over-saturation. If everyone launches new smartphones, tablets, PCs, TVs, etc., for the Q4 push then it will become difficult for many to cut above the noise and stand out from the pack.

If you couple these large Q4 product pushes with the low-cost trend we have outlined before, it becomes concerning that consumers may purchase devices not really suitable for enterprise computing and then try to bring them into the work environment. This could cause more pain then it is worth for most workers.

To help with this potential problem, we believe that IT companies will have to increasingly invest in valuable information as a part of their BYOD programs. Some enterprises do this today but many will need to follow suit. The goal is for notebook intenders looking to upgrade or buy a new machine for work, would be able to use an internal resource to see recommended hardware in the categories or notebooks, hybrids, convertibles and tablets.

For many PC OEMs, IT departments could become their best friends and can be used as a vehicle to better inform consumers to get the right hardware for the right job.

Can Microsoft Compete in a Post-PC World?

Microsoft says it sold 100 million licenses for Windows 8 in the six months it was on sale. Not spectacular, but not bad either. But for Windows RT, Widows 8’s tablet-friendly little brother, things haven’t been so hot. Microsoft hasn’t given out numbers, but IDC estimates sales of Microsoft’s Surface RT at a bit over a million for October through March. It seems likely that combined sales of OEM RT products–all four of them–were even lower. By contrast, Apple is selling nearly 1.5 million iPads a week.

The failure of Windows RT–and it is getting very hard to call it anything else–leaves Microsoft in a terrible bind, as least a s a seller of consumer products. The post-PC era is upon us, not in the sense that traditional PCs are going way, but that they are no longer the center of the computing world, either in most people’s usage, in mindshare, or in sales. We’ve just entered this new era and it should be possible for a company with Microsoft’s resources to recover. But the first step in recovery is recognizing that you have a problem, and Microsoft doesn’t seem to quite be there yet. Consider Board Chairman Bill Gates’ comments on CNBC:

Windows 8 really is revolutionary in that it takes the benefits of the tablet and the benefits of the PC and it’s able to support both of those. On Surface and Surface Pro, you have the portability of the tablet but the richness in terms of the keyboard and Microsoft Office…. A lot of [iPad] users are frustrated. They can’t type, they can’t create documents, they don’t have Office there. We’re providing them something with the benefits they’ve seen that have made that a big category without giving up the benefits of the PC.

In other words, what people want is more mobile versions of traditional PCs, and that’s what Microsoft is determined to give them. The problem is that this is a serious misreading of why customers are flocking to tablets. Mobility is, of course, an important attribute of the tablet. But so–and here is where Gates and Microsoft go wrong–simplicity. The iPad has limitations which users accept in exchange for wonderful simplicity and great ease of use. Tablets, and especially, the iPad, have the shallowest learning curve in the history of computing. Their software does not break. The process of updating their software is simple automatic. They don’t run Office but, while this may come as a surprise to Gates, many people do not see that as a disadvantage. They are, as my colleague Ben Bajarin would put it, a great example of “good enough” computing.

So what can Microsoft do about this? I have always thought the company made a strategic mistake when it decided to adapt desktop Windows to tablets rather than follow Apple’s lead by using an enhanced version of Windows Phone. It ended up compromising both the desktop and the tablet experience (based on the reports we’ve been hearing lately, such as this from ZDnet’s Mary Jo Foley, the upcoming “Blue” update to Windows is designed more to address Windows 8’s shortcomings as a desktop OS than to rescue Windows RT.[pullquote]I have always thought the company made a strategic mistake when it decided to adapt desktop Windows to tablets rather than follow Apple’s lead by using an enhanced version of Windows Phone.[/pullquote]

Windows 8/RT was a radical step for Microsoft, but in the end it just didn’t go far enough to succeed on tablets while perhaps going too far to win friends on the desktop. A true tablet OS simply would not have a Desktop mode that depends on a keyboard and mouse for usability, and Windows RT regularly requires going into Desktop for critical tasks (we can only hope that Blue will fix this.) The vaunted availability of Office is no advantage at all for most users because the Desktop Office apps simply don’t work well on a tablet. True touch versions of Office applications are reportedly in the works, but they are not expected before late 2014.

OEMs disappointed with Windows RT are building Windows 8 tablets. The most PC-like of these may succeed as sort of Ultra-ultrabooks, Windows 8 is fundamentally unsuited to a pure tablet. It requires too much process, too much battery power, too much storage, and too much keyboard. The same OEMs, even those most loyal to Microsoft, are also hedging their bets with Android.

That may well be too late. iOS 7, expected this fall, is likely to be a major enhancement of the iPad and we may see iOS 8 before the Windows tablet software upgrade is complete. Android tablet software still lags; the operating system has not made nearly as much progress on tablets as on phones. But Google and its partners will get it right sooner or later, and probably before Microsoft.

None of this means that Microsoft is going away. It’s back-end software powers most enterprise computing and its clients continue to have a vital place in business. For some business users, Gates might even be right about tablets: they need Office worse than they need the elegance and simplicty of an iPad. But with the mass of consumers, for whom a conventional PC is more likely to be a place where they store stuff rather than do stuff, Microsoft is in real trouble with no easy way out.

The Difference Between Bill Gates and Steve Jobs

Yesterday Bill Gates took some heat in the media when he proclaimed that Windows 8 and Surface tablets are giving the masses what they really want in a tablet product. I watched his remarks in the CNBC video and they are not as bad as many made them out to be. But reading much of the commentary got me thinking. The tablet form factor may be the ultimate showcase of the differences between Bill Gates and Steve Jobs.

Some of the best business advice you consistently hear, as well as the root of many entrepreneurs success stories, is to create products that you would find desirable and would want to use. Both Bill Gates and Steve Jobs are/were men of great vision. But they both also created products with this philosophy in mind. They made products that not only fit their vision but were something they genuinely wanted to use. In fact Steve Jobs was more vocal on this point than anyone. On numerous occasions he pointed out that his–and Apple’s–core culture is to make the type of products that they themselves would be delighted using.

Both Bill gates and Steve Jobs had the correct vision of how the tablet would become the broader future of computing. Bill Gates’ vision for tablets led to Windows XP Tablet PC edition. This vision was representative of the type of tablet Bill wanted to use and the experience he valued. Steve Jobs’ vision led to the iPad. This vision encompassed Steve’s desired experience with a tablet computer.

I think its clear which product captured the hearts of the mass consumer market. The difference between Bill Gates and Steve Jobs is that ones man’s desired product is more reflective of the mass consumer market. Bill’s vision appealed more to the business audience while Steve’s vision, and his own product desires, appealed to the masses. Apple and Microsoft are in very different places today because of this reality.

On the Impact of Paul Otellini’s CEO Years at Intel

Intel’s CEO Paul Otellini is retiring in May 2013. His 40-year career at Intel now ending, it’s a timely opportunity to look at his impact on Intel.

Intel As Otellini Took Over

In September 2004 when it was announced that Paul Otellini would take over as CEO, Intel was #46 on the Fortune 100 list, and had ramped production to 1 million Pentium 4’s a week (today over a million processors a day). The year ended with revenues of $34.2 billion. Otellini, who joined Intel with a new MBA in 1974, had 30 years of experience at Intel.

The immediate challenges the company faced fell into four areas: technology, growth, competition, and finance:

Technology: Intel processor architecture had pushed more transistors clocking faster, generating more heat. The solution was to use the benefits of Moore’s Law to put more cores on each chip and run them at controllable — and eventually much reduced — voltages.

Growth: The PC market was 80% desktops and 20% notebooks in 2004 with the North America and Europe markets already mature. Intel had chip-making plants (aka fabs) coming online that were scaled to a continuing 20%-plus volume growth rate. Intel needed new markets.

Competition: AMD was ascendant, and a growing menace. As Otellini was taking over, a market research firm reported AMD had over 52% market share at U.S. retail, and Intel had fallen to #2. Clearly, Intel needed to win with better products.

Finance: Revenue in 2004 recovered to beat 2000, the Internet bubble peak. Margins were in the low 50% range — good but inadequate to fund both robust growth and high returns to shareholders.

Where Intel Evolved Under Paul Otellini

Addressing these challenges, Otellini changed the Intel culture, setting higher expectations, and moving in many new directions to take the company and the industry forward. Let’s look at major changes at Intel in the past eight years in the four areas: technology, growth, competition, and finance:

Technology

Design for Manufacturing: Intel’s process technology in 2004 was at 90nm. To reliably achieve a new process node and architecture every two years, Intel introduced the Tick-Tock model, where odd years deliver a new architecture and even years deliver a new, smaller process node. The engineering and manufacturing fab teams work together to design microprocessors that can be manufactured in high volume with few defects. Other key accomplishments include High-K Metal Gate transistors at 45nm, 32nm products, 3D tri-gate transistors at 22nm, and a 50% reduction in wafer production time.

Multi-core technology: The multi-core Intel PC was born in 2006 in the Core 2 Duo. Now, Intel uses Intel Architecture (IA) as a technology lever for computing across small and tiny (Atom), average (Core and Xeon), and massive (Phi) workloads. There is a deliberate continuum across computing needs, all supported by a common IA and an industry of IA-compatible software tools and applications.

Performance per Watt: Otellini led Intel’s transformational technology initiative to deliver 10X more power-efficient processors. Lower processor power requirements allow innovative form factors in tablets and notebooks and are a home run in the data center. The power-efficiency initiative comes to maturity with the launch of the fourth generation of Core processors, codename Haswell, later this quarter. Power efficiency is critical to growth in mobile, discussed below.

Growth

When Otellini took over, the company focused on the chips it made, leaving the rest of the PC business to its ecosystem partners. Recent unit growth in these mature markets comes from greater focus on a broader range of customer’s computing needs, and in bringing leading technology to market rapidly and consistently. In so doing, the company gained market share in all the PC and data center product categories.

The company shifted marketing emphasis from the mature North America and Europe to emerging geographies, notably the BRIC countries — Brazil, Russia, India, and China. That formula accounted for a significant fraction of revenue growth over the past five years.

Intel’s future growth requires developing new opportunities for microprocessors:

Mobile: The early Atom processors introduced in late 2008 were designed for low-cost netbooks and nettops, not phones and tablets. Mobile was a market where the company had to reorganize, dig in, and catch up. The energy-efficiency that benefits Haswell, the communications silicon from the 2010 Infineon acquisition, and the forthcoming 14nm process in 2014 will finally allow the company to stand toe-to-toe with competitors Qualcomm, nVidia, and Samsung using the Atom brand. Mobile is a huge growth opportunity.

Software: The company acquired Wind River Systems, a specialist in real-time software in 2009, and McAfee in 2010. These added to Intel’s own developer tools business. Software services business accelerates customer time to market with new, Intel-based products. The company stepped up efforts in consumer device software, optimizing the operating systems for Google (Android), Microsoft (Windows), and Samsung (Tizen). Why? Consumer devices sell best when an integrated hardware/software/ecosystem like Apple’s iPhone exists.

Intelligent Systems: Specialized Atom systems on a chip (SoCs) with Wind River software and Infineon mobile communications radios are increasingly being designed into medical devices, factory machines, automobiles, and new product categories such as digital signage. While the global “embedded systems” market lacks the pizzazz of mobile, it is well north of $20 billion in size.

Competition

AMD today is a considerably reduced competitive threat, and Intel has gained back #1 market share in PCs, notebooks, and data center.

Growth into the mobile markets is opening a new set of competitors which all use the ARM chip architecture. Intel’s first hero products for mobile arrive later this year, and the battle will be on.

Financial

Intel has delivered solid, improved financial results to stakeholders under Otellini. With ever more efficient fabs, the company has improved gross margins. Free cash flow supports a dividend above 4%, a $5B stock buyback program, and a multi-year capital expense program targeted at building industry-leading fabs.

The changes in financial results are summarized in the table below, showing the year before Otellini took over as CEO through the end of 2012.

GAAP	2004	2012	Change
Revenue	34.2B	53.3B	55.8%
Operating Income	10.1B	14.6B	44.6%
Net Income	7.5B	11B	46.7%
EPS	$1.16	$2.13	83.6%

The Paul Otellini Legacy

There will be books written about Paul Otellini and his eight years at the helm of Intel. A leader should be measured by the institution he or she leaves behind. I conclude those books will describe Intel in 2013 as excelling in managed innovation, systematic growth, and shrewd risk-taking:

Managed Innovation: Intel and other tech companies always are innovative. But Intel manages innovation among the best, on a repeatable schedule and with very high quality. That’s uncommon and exceedingly difficult to do with consistency. For example, the Tick-Tock model is a business school case study: churning out ground-breaking transistor technology, processors, and high-quality leading-edge manufacturing at a predictable, steady pace of engineering to volume manufacturing. This repeatable process is Intel’s crown jewel, and is a national asset.

Systematic Growth: Under Otellini, Intel made multi-billion dollar investments in each of the mobile, software, and intelligent systems markets. Most of the payback growth will come in the future, and will be worth tens of billions in ROI.

The company looks at the Total Addressable Market (TAM) for digital processors, decides what segments are most profitable now and in the near future, and develops capacity and go-to-market plans to capture top-three market share. TAM models are very common in the tech industry. But Intel is the only company constantly looking at the entire global TAM for processors and related silicon. With an IA computing continuum of products in place, plans to achieve more growth in all segments are realistic.

Shrewd Risk-Taking: The company is investing $35 billion in capital expenses for new chip-making plants and equipment, creating manufacturing flexibility, foundry opportunities, and demonstrating a commitment to keep at the forefront of chip-making technology. By winning the battle for cheaper and faster transistors, Intel ensures itself a large share of a growing pie while keeping competitors playing catch-up.

History and not analysts will grade the legacy of Paul Otellini as CEO at Intel. I am comfortable in predicting he will be well regarded.

The Next Evolution In User Interfaces

With the introduction of the iPhone, Apple introduced the touch UI and literally changed the way people interact with their smartphones. When they extended the touch UI to the iPad, it set in motion an industry stampede to create PCs, laptops, tablets, and smartphones with touch based interfaces. In the world of technology, this was a real milestone. For decades the way we navigated through our PCs was through a keyboard, mouse or Trackpad. While Apple was not the first to bring touch to tablets or smartphones, they clearly get credit for commercializing it and making it the defacto standard for next generation user interfaces.

But there were two products released recently that I have tested that I believe gives us an early glimpse at the next evolution of user interfaces. These, perhaps, will be just as ground breaking as the graphical user interface and touch UIs in the market today.

Touch Freedom

The first is a couple of gesture features that are in the new Samsung Galaxy S4 smartphone. The first is called Air View. If you are in the email application on the S4, you can just “hover” your finger over the email you are looking at and the subject line and first 2 or 3 lines of the email pops up. It hovers over the actual email line so you can see what the email is about at a glance and decide if you need to read it or just move onto the next to check it out. The Air View gesture only works on the email app now but the software community will likely get the tools to be able to use it on other apps shortly. This gesture alone is a game changer in that it takes limited information on a small screen and blows it up in context so-to-speak so you can gain more info on the item you are looking at.

The second feature is just as cool. It is called Air Gesture. Have you ever been working in the kitchen with a recipe and gotten your hands dirty yet needed to go to the second page of the recipe to get the rest of the details? Well with Air Gesture, all you do is wave your hand in front of the tablet and it moves to the next page without ever touching the screen. I often take my tablet with me to restaurants when I am alone on the road and catch up on the days news, or even read a magazine or book while chowing down. Often my hands are full with knife and fork and today I actually use my knuckle to touch the screen to open a page or turn it.

To be fair, Microsoft has had gesture based user interfaces on the Xbox for almost two years, but to date it has only been designed for game consoles and has not transferred over to PCs or mobile devices yet. Both of these features on the Galaxy S4 smartphone represent the first major shift to making gestures an integral part of a mobile UI. While these two gestures are only on the S4 today, I’m sure it will eventually find its way to Samsung’s Galaxy tablets perhaps later this year.

The other gesture-based technology introduced recently comes from Leap Motion. This pad like device is used on a PC and sits in front of the monitor and between the keyboard and turns Windows into gesture based UI for supporting software. It can also be used with a laptop via a USB dongle with the device sitting in front of a laptop keyboard. Leap Motion has seeded over 10,000 developers with SDKs to make their apps work with their Leap Motion Controller. After it ships this summer, we should start to see a good amount of leap motion enabled apps later this year. HP has considered this so important that they did a major deal with Leap Motion recently and HP has committed to using it in their products in the future.

Similarly with Kinect, what is appealing about Leap Motion is the way you can interact with a game in 3D. Just use your hands as the controller, or use it to add hand controls to manipulating 3D objects. However, with support from the software community you can imagine eventually being able to just wave your hand and turn Web pages or use your hands to mold pottery on the screen, etc. The key thing here is that the Leap Motion technology is an enabler and once the software community gets behind it, it could become the next major step in making a user interface more friendly and even easier to use then it is today.

The reality is that Apple, Microsoft, Intel and others are all working on gesture based UI technology and believe that gestures represent the next significant evolution in computing interfaces. In fact, Intel has a human factors project around gestures and while not much is known about it, I would not be surprised to see the controller for gesture UIs even part of the SOC in the future.

While many had hoped voice would be the next big thing in user interfaces, there is still a lot of work in this space to be done to bring it into mainstream computing. I have no doubt that voice commands, such as the one HAL used in 2001: A Space Odyssey will eventually be the main way we interact with computers. However, for now, the next evolution will be gesture based. The technology used in Samsung’s Galaxy S4 smartphone and Leap Motion will most likely help define how gestures may soon become a major part of the interface we have on all of our computing devices.

Touch Computing Is Touching Every Part Of Our Lives

We Live In Amazing Times

We live in amazing times. The modern smartphone (really, a portable pocket computer) is only 6 years old. The modern tablet is only 3 years old. Yet the combination of the internet, simplified touch computing, wireless data downloads and the availability of cheap, innumerable applications on demand, has wholly revolutionized what computing is and will become.

Affecting Our Lives

Touch computers are already a pervasive part of our lives:

— 49% of the entire U.S. population uses a smartphone. By 2017, the percent of smartphone users is expected to reach 68%.

— Tablet ownership increased 177 percent over the past year.

— Already, 23% of teens own a tablet.

Affecting Our Lifestyles

The effect on our lifestyles has been even greater:

— Four out of five smartphone users check their phones within the first 15 minutes of waking up. 80% of those say it’s the first thing they do in the morning.

— 79% of smartphone users have their phone on or near them for all but two hours of their waking day; 63% keep it with them for all but one hour. A full quarter of of smartphone owners couldn’t recall a single time of the day when their phone wasn’t in the same room as them.

— Mobile users can’t leave their phone alone for six minutes and check it up to 150 times a day.

— 25% of those aged 12-17 access the Internet “primarily” via a cell phone or smartphone. Among teens with a smartphone, however, 50% access the Internet primarily via the mobile device. Girls are more likely than boys to rely on their smartphone as their primary Internet access device.

— More than 80 percent of consumers are multitasking while watching TV.

— More people now watch TV and movies on tablets in their bedrooms than they watch them on TVs.

Dissolving The Digital Divide

Surprisingly – at least to me – black and hispanic teens are more likely to own a smartphone than their white counterparts. Some feel that the smartphone could be the tool that eradicates the digital divide. In any case, phones are now the new personal computers of our age, allowing the poor and the isolated to enjoy computing power that was formerly unavailable to them.

Multiple Screens

If, in 2006, you had predicted that individuals would own, not one, but three computers, you would have been laughed at. First, few needed three separate computing devices and second, even fewer could afford them. Yet today, twenty-six percent of consumers in the United States own a laptop, smartphone and tablet.

Let me re-remind you that the modern tablet has only been in existence for a mere THREE YEARS. If 26% of consumers in the United States already own the trio of smartphone, tablet and notebook, then the explosive growth of multiple screen computing ownership is only just beginning.

Touch Computing Is Only Just Beginning

Most technology observers look at phones, and even tablets, as maturing markets. I feel otherwise.

— Phones are just beginning to invade our lives. People who formerly didn’t need a phone – the young, the old, the technologically uninterested – are all adopting smartphones as their go-to computing device.

— People who formerly didn’t have any access to computers – the poor and citizens of third world countries – are also adopting smartphones as their first – and perhaps only – computing device.

— Where we used to own a single family computer, now every member of the family will want to possess their own personal tablet.

— Most people who own a tablet will own a smartphone too, and perhaps a notebook as well.

Our Lives Will Never Be The Same

Most technology observers seem to have a very poor grasp of economics and consumer behavior. They speak in terms of limited resources and assume that technological growth is limited. The truth is that we don’t buy what we need, we buy what we want. And a further truth is that when we want and value something highly enough, we shift our limited resources in order to find a way to obtain it.

In 2006, we only needed a single, cheap desktop or notebook computer. Today we expect and demand access to multiple mobile computing devices.

We don’t NEED tablets, but we WANT them and we’re going to find a way to buy and possess them. And smartphones are rapidly moving from the category of a WANT to something that we both WANT AND NEED in order to merely function in modern society.

Sales of mobile touch computers are about to explode and our lifestyles and our lives will never be the same.

3 Years Of iPad Schadenfreude and Lessons Learned

On April 3, 2013, the iPad turned three. Jay Yarrow over at Business Insider has put together a great summary of How The iPad Totally Changed The World In Just Three Years. A couple of highlights:

— Apple has sold some 140 million iPads for around $75 billion in sales.
— The iPad is one of the fastest growing consumer products ever.
— iPad inspired tablets have virtually destroyed the netbook market, are expected to exceed notebook sales this year and expected to exceed notebook and desktop sales by the end of 2014
— iPad revenue alone is bigger than all Windows revenue
— Traditional software houses like Amazon, Google and Microsoft are all making their own versions of the iPad
— The iPad is popping up everywhere, including airplane cockpits, restaurants and as cash registers. I would add that almost one third of doctors in the U.K. now own tablets and tablets are rapidly spreading into education at every level.

Schadenfreude

I think it’s an understatement to say that the iPad has been an overwhelming success – the biggest technology shift of our generation – which is why it’s all the more delicious to put on our 20/20 hindsight glasses and mock those who got the iPad oh-so-very-wrong those three years ago. However, rather than dwelling on how wrong the iPad’s critics were, let’s focus instead on why they were wrong and see if we can learn from their mistakes.

Screen Size Matters

“You might want to tell me the difference between a large phone and a tablet.” ~ Eric Schmidt, Google, 10 January 2010

Turns out that size really does matter. Some things are better done on a larger screen. Further, a larger screen demands that apps be re-written to accommodate their larger size. Apple recognized this and now they have over 300,000 apps specifically optimized for the iPad. Google has been slow to recognize this fact and their tablet sales have suffered for it.

Focusing On What It Isn’t

Things the iPad can’t do:

1. No Camera, that’s right, you can’t take pics and e-mail them.
2. No Web Cam, that’s right, no iChat or Skype Video chatting.
3. No Flash, that’s right, you can’t watch NBC, CBS, ABC, FOX or HULU.
4. No External Ports, such as Volume, Mic, DVI, USB, Firewire, SD card or HDMI
5. No Multitasking, which means only one App can be running at a time. Think iPhone = Failure.
6. No Software installs except Apps. Again think iPhone = Failure.
7. No SMS, MMS or Phone.
8. Only supports iTunes movies, music and Books, meaning Money, Money, Money for Apple.
9. WAY, WAY, WAY over priced.
10. They will Accessorize you to death if you want to do anything at all with it and you can bet these Accessories will cost $29.99 for each of them.
11. No Full GPS*
12. No Native Widescreen*
13. No 1080P Playback*
14. No File Management*

What an utter disappointment and abysmal failure of an Apple product. How can Steve Jobs stand up on that stage and hype this product up and not see everything this thing is not and everything this thing is lacking?

~ Orange County Web Design Blog, 27 January 2010

There are dozens upon dozens of these lists and their particulars don’t really matter. The truth is that we often tend to focus on what a new product or service DOES NOT do instead of focusing on what it does really well. The iPad made for a terrible phone and a terrible notebook computer. And that’s as far as most people could see. The netbook did a lot of things but it didn’t do any of them well. The iPad did far fewer things than the notebook or even the netbook, but it did some of those things extraordinarily well. In most instances it’s what something does, not what it doesn’t do, that matters most.

Tradeoffs

“Why is the iPad a disappointment? Because it doesn’t allow us to do anything we couldn’t do before. Sure, it is a neat form factor, but it comes with significant trade-offs, too. No 16:9 widescreen, for example.” ~ David Coursey, PC World, 28 January 2010

“I don’t get it. It costs $500 for the basic model, when you could get a laptop with a lot more functionality for about the same price. The iPad hype machine has been in full effect this week, and I still think it’s just that—hype. If I turn out to be wrong, I’ll gladly eat my words, but I’m pretty sure that I’m not wrong ” ~ Alex Cook, Seeking Alpha, 3 April 2010

EVERYTHING has tradeoffs. The key is to get asymmetrical tradeoffs that give more than they take away. The iPad gave people mobility, simplicity, ease of use and seamless integration with a virtually endless number of applications. It gave up power, size and complexity. Turns out, for most people, that was a trade that was well worth making.

It’s Not The Consumer’s Job To Predict The Future

“Before Jan 20th, only 26 percent of people said they were not at all interested in buying an Apple tablet. That number jumped to 52 percent after the announcement. Before Jan 20th, 49 percent of people said they didn’t think they needed an Apple Tablet. That number jumped to 61 percent after the announcement. Fifty-nine percent of buyers wouldn’t pay extra for 3G coverage. Whether this device becomes a big hit is anyone’s guess but based on this study it sure looks doubtful.” ~ Retrevo, 5 February 2010

“We of course build plastic mock-ups that we show (to customers)…we had a slate form factor. The feedback was that for (our) customers it will not work because of the need to have (a physical) keyboard. These were 14-year-old kids, who, I thought, would be most willing to try a virtual keyboard but they said no, we want the physical keyboard.” ~ Mika Majapuro, Worldwide Sr. Product Marketing Manager, Lenovo, 22 February 2010

“The recent launch of Apple, the iPad tablet, has won the award for the second edition of Fiasco Awards delivered this Thursday in Barcelona. From the more than 7,000 people who voted via the website www.fiascoawards.com, 4,325 have considered it the fiasco of the year. Voters through the web have decided that they want the iPad to follow a path similar to the U.S. President Obama with his Nobel Prize, receiving an award before its career starts. However, if within a year the market’s response to the iPad is not the predicted fiasco, the organization will present the 2010 edition of the Fiasco Awards as a finalist to receive the same award next year.” ~ Fiasco Awards, 2010, 11 March 2010

Can we just stop pretending that consumer polls and questionaries have any validity when it comes to predicting future behavior? How is the consumer supposed to evaluate a wholly hypothetical product – especially a revolutionary product – before they’ve even had a chance to use it? Heck, the brightest minds in tech got the iPad wrong even AFTER Apple showed it to them. Why then do we constantly put stock in the opinion of consumers with regard to products that do not yet exist?

Sizzle vs. Subtle

“Yet for some of us who sat in the audience watching Steve Jobs introduce the device, the whole thing felt like a letdown.” ~ Daniel Lyons, BusinessWeek, 28 January 2010

“I think this will appeal to the Apple acolytes, but this is essentially just a really big iPod Touch.” ~ Charles Golvin, Forreter Research, 27 January 2011

Turns out that being a big iPad Touch was all that it needed to be.

The tech press always wants fireworks and is immediately bored by nearly everything not new or different. However, that’s not how people in the real world respond to products. Sometimes subtle is more powerful than sizzle and sometimes subtle is more sublime as well.

Tech is no longer the province of an elite. Tech is now a mass market product that is used and mastered by the majority of humankind. We need to stop thinking about how things affect us personally and start thinking about how they affect the majority of their intended users instead.

Niche

“Thus, a reasoned analysis is that the iPad is to the iPhone & iPod Touch as the MacBook Air is to the MacBook. In other words, a cool product with a devoted base of happy customers, but in relative terms, a niche product in Apple’s arsenal of rainmakers.” ~ Mark Sigal, O’Reilly Radar, 28 January 2011

That’s pretty much how I saw it too. I thought that the iPad would be a successful niche, like the MacBook Air. I was very wrong about the iPad…and I was wrong about the MacBook Air, too. Sheesh, 20/20 hindsight is a cruel mistress.

Schadenfreude Redux

“Anyone who believes (the Ipad) is a game changer is a tool.” ~ Paul Thurrott, Paul Thurrott’s Supersite for Windows, 5 April 2010

What the heck. Not everything has to be a life lesson. A little Schadenfreude can be a good thing too.

Tablet Trifurcation

Yesterday, Tech.pinions columnist, Patrick Moorhead, discussed the implications of the growing popularity of the 7 inch tablet form factor.

Schism

I think that Patrick’s analysis of the schism between Apple’s iOS tablets and Android tablets was spot on. While Apple encouraged their developers to create apps that were optimized for the larger 10 inch tablet form factor, Android eschewed optimization and encouraged a one-size-fits-all approach. The resulting “stretched” Android phone apps worked poorly on the larger tablet form factor. However, “stretched” phone apps seem to work well, or at least adequately, on the slightly smaller 7 inch screens.

This divide in approach between iOS and Android tablets has at least two major implications. First, Apple’s iOS tablets will most likely continue to dominate the 10 inch tablet form factor. In fact, Android has all but ceded the 10 inch form factor to Apple.

Second, because both Apple’s 10 inch iPad and their 7.9 inch iPad Mini run optimized tablet apps, the iPad will most likely become the “go to” tablet for high end users. This means that professionals, businesses, government entities and educators will gravitate towards the iPad. And as the virtuous cycle of developer/app/consumer continues the spiral upwards, the high-end iOS applications will make iOS optimized tablets even more appealing to high-end consumers and even less approachable to Apple’s competitors.

Trifurcation

It seems to me that the tablet market is trifurcating. Apple’s iOS is taking the larger 10 inch form factor and the up-scale markets. Google’s Android may command market share in the mid-level markets. And forked or non-Google Android tablets will take the low end of the market. All can survive, but only Apple has proven that it can profitably thrive in such a setting.

Andy Rubin And The Curious Failure Of The Nexus Tablet

On Wednesday, Andy Rubin suddenly stepped down as the head of Android. The reason for this move is obscure. The most telling statement I’ve read on this, so far, comes from Ina Fried, at AllThingsD:

It was certainly a sudden move. Rubin had been confirmed to speak at our D11 conference in May; you don’t do that when you’re easing your way out. In the time between giving wide-ranging comments on Google’s plans two weeks ago and dropping out of a speaking slot at SXSW this past weekend, something changed.

The Trouble With Tablets

I do not know what suddenly changed, but one contributing factor in the change may have been Andy Rubin’s inability to translate Google’s success with handsets into an equivalent success with tablets. This must be particularly painful to Google since studies have conclusively shown that it is tablets, not phones, that best support Google’s advertising business model.

This past summer, I predicted that the introduction of the Google Nexus tablet would eviscerate the market for all other Android tablets. After all, the Nexus tablet was made by Google itself, was sold at cost, and would be competing on the basis of the sale of content, app and advertising revenue that was not available to the likes of Samsung and other Android manufacturers.

So far, my prediction has not come to pass, as Samsung has made modest gains in tablet sales over the past six months. But my failure to accurately foresee the future may have been more due to a failure on the part of the Google Nexus tablets, than it was of my analysis.

Low Tablet Sales

Google does not reveal their Nexus tablet sales numbers which is revealing in and of itself. However, Google cannot hide entirely behind a cloak of secrecy.

Source: The Yankee Group

The Yankee Group recently surveyed consumers, asking them which brand of tablet they intended to buy. The iPad dominated the discussion but the Google Nexus tablets garnered only 1% interest from the survey participants. ONE PERCENT.

How is that even possible? Remember, this is a tablet that is being given away for COST. And it is being given away for cost by the largest, most successful advertising company in the world. One percent interest in future sales is not just bad, it’s dreadful.

And it must be all the more galling to Google that Amazon – which is using a forked version of Android and an almost identical business model – has 7% interest. To put it in colloquial terms, “that just ain’t right.”

Low Tablet Usage

Source: Chitika

And if the unreported sales numbers weren’t bad enough, the usage numbers – 1.7% for all Google Nexus Tablets combined – are equally depressing. That’s just barely better than the rapidly failing Barnes & Noble Nook. It’s less than a quarter of the usage enjoyed by all Amazon tablets. And it’s barely 2% of the usage garnered by Apple’s iPads.

Remember, Google makes no income from the sale of their tablets. If Google tablets are not used, then they are useless to Google.

Conclusion

I doubt that tablet sales were THE factor that made Google suddenly change the head of their Android program. I think that the merger with Chrome was far more significant. However, I also have no doubt that Android’s lack of progress in tablets was A factor in the change…and a significant one at that.

Dell’s Thinking Outside the Tablet

What is a tablet? Sorry to get philosophical but I think this is an interesting question–especially of late. I sensed from the first early glimpses I got of Windows 8 that we would see hardware that would cause us to question whether it was a tablet or a notebook. I’m still not sure the hybrid or convertible devices on the market today have yet nailed a mass market success and I remain pessimistic that they ever will. Pure slate tablets are the hot ticket and I believe will continue to be for the foreseeable future. However, there is one category of Windows 8 devices that has had my interest peaked for a while. That is portable, large screen, touch based, all-in-one PCs.

Today Dell is releasing the XPS 18. An all-in-one computer. Typically when I refer to this category, I call it an all-in-one desktop computer. However, with the XPS 18, I can not use that term because this all-in-one is not confined to a desk but is rather a highly portable 5 lb computer with a tablet twist. The XPS 18 is not positioned as a tablet nor should it be, but still, many of the key value propositions of tablets are applicable. I guess perhaps with the exception of putting it in a bag and leaving the house for work, school, or Starbucks–or are they?

I first saw these larger screen portable all-in-ones late last year. The reinvention, or I should say redefining, of the desktop category was a trend I had been tracking for a while. Larger, portable, touch computing solutions were not something readily available for the mass market until now. I first saw a touch based table top PC when Microsoft first showed me their Surface Table. That product was too pricey but I felt had a great deal of potential. In my opinion, the XPS 18 is the first to deliver on this new vision of a larger screen touch computing solution.

What makes this product interesting to me is the communal nature of the device. I have been writing for a while now about my conviction for touch based computing products and how there will be some that are personal (meaning intimately tied to a single person) and there will be ones that are communal (meaning freely shared within a community). The communal nature of a computer has always been the case of a desktop PC. These devices, as they matured, were largely used in consumers homes as a shared device. That is what makes this new class of touch based portable all-in-ones so interesting to me.

Dell is positioning this correctly in my opinion because they are focusing it on family use cases. Families can gather around this and use the 10 pt multi-touch functions to play games, or draw together, etc. Yet on top of the many new uses cases that will emerge from this category, consumers still have the bare bones powerful PC they still need for every day computing tasks. But its large screen portability is what I think is interesting. By having an 18-inch portable display that is connected to the web, and runs Windows applications, it opens up some new possibilities. Using it as a portable TV or media hub for example. Or in the kitchen for recipes, or out in the garage for how-to videos and instructions, or even for backseat passengers in the car since it gets 5 hour battery life.

I know several of the use cases I pointed out can also be used for tablets like the iPad, however, what makes the XPS 18 interesting is that it can also be used a full desktop class PC. There is a role for both in my opinion. I firmly believe that the XPS 18 will challenge many peoples pre-conceptions of not just what an all-in-one computer is but also what a tablet is and means to them. At $899 it is actually a reasonable price for a device that may blur the lines for many use cases consumers are looking for.

My friends from Dell came to our offices last week and gave me the walkthrough of the product and let me have some time with it. They set it up with the Bluetooth Keyboard and mouse and I never touched them. I just picked it up, put it on my lap, and started playing with it. I plan on doing a full review / analysis of the XPS 18 but what I will say for now was that I was impressed and intrigued by this form factor. I applaud Dell’s thinking with this product as well as with many other nicely designed computers they have released of late.

Mostly individuals use computers, but there is a place for a family computing device. I believe companies that approach computing from a family standpoint will generate interest in the products they make even if they are simply stand alone solutions. I expect many more solutions like this to come but for now, the Dell XPS 18 may be the best family computer/(tablet?) I have seen to date.

The Invasion of Cheap Tablets

Given the massive market demand for tablets and the fundamental shift in consumer sentiment from PCs to tablets, it was only a matter of time before the tablet race to the bottom took place. I wrote about how this was happening in China at rates hard to fully comprehend. It looks like 2013 will be the year cheap tablets start showing up in numbers at retail in mature markets like the US and Europe.

The precedent for these products was already set by the Nexus 7, which has likely been the most successful Android tablet to date. The last data checks I saw at the end of 2012 suggested that the Nexus 7 was selling around 1 million units a month. That may have slowed as of late but I’m sure it is still selling well.

It seems that the sweet spot for Android tablets has been in the sub 8-inch screen size and I don’t see that changing in the short term. At MWC 2013, Samsung and HP have just added more flame to the fire of Android tablets. Samsung is coming out with an 8-inch version of their Note product line and HP is bringing their first Android tablet to market with a 7-inch device called the Slate 7. Pricing and availability is yet to be disclosed on the Samsung Galaxy Note 8.0 but I expect it to be in line and most likely slightly less than the iPad Mini. If it costs more, it’s DOA. HP on the other hand chose to be very aggressive with the pricing of the Slate 7 and will bring it to market at $169 and will be available in April. These are the first of many Android tablets I expect to see in 2013 with 8-inch or smaller screens and at lower cost price points.

The Role of Cheap Tablets

Believe it or not, I believe these products have an important role to play. They will help mature the market for tablets and they will bring low-cost entry points to the Internet into the home.

The market for tablets is still immature. Even though there are now well more than 150 million tablets (mostly iPads) out in the wild, there are still many consumers who have not owned a tablet nor have they deciphered what their needs, wants, and desires are with such products. This understanding is a critical part of the adoption cycle and it requires an understanding of what a product means to a consumer. This is also something that only comes with ownership. Having a plethora of choice around tablets, from small to large as well as varying price points, is a healthy part of product market maturity.

The other role I think these devices play is one of low-cost Internet access points. I’ve stated in previous columns my belief that some tablets in the home will not be personal but will be communal. They will be products anyone can pick up and use and will be likely not tied to one person but perhaps more tied to general entertainment, media, automation, or other general cloud services relevant to the household as a whole rather than one specific person.

Last Friday I pointed out how I am doing this now with more than a dozen tablets in my own home. Everyone has their personal one, which they have customized but since we don’t carry them around with us everywhere, we have communal tablets one can use for web browsing, streaming media, playing games, etc, lying around the house for free access. Low-cost tablets will make experiences like this more a reality.

Winners and Losers

The arrival of low-cost tablets from major brands (especially legacy PC ones) will certainly impact many players in the technology industry–some more than others. In the case of HP, I found this strategy interesting because one of the things a low-cost sub 8-inch tablet does is it continues to emphasize dependence on a traditional PC form factor. By keeping this particular tablet in the low-end both in terms of price and experience they are not in danger of cannibalizing their PC sales, even still, others may cannibalize it for them. Regardless, I actually think this is a smart move for HP in the short term. They need to figure out their software and services add value on top if they want to stay relevant in the long term.

Samsung will keep doing what Samsung does, which is offer a wide range of devices in all shapes and sizes and price points.

The real loser in an invasion of low-cost tablets, in my opinion, is Microsoft. They are just getting started and they have no intention of allowing their customers to compete in the lower end of the tablet spectrum (they don’t even have a 7” tablet offering near coming to market). I expect these low-cost tablets to hurt the adoption of Windows 8 tablets initially but not necessarily in the long run.

Of course that leaves Apple. I’m sure the Apple naysayers and critics will look at all the cheap tablet buzz and assume that this means danger for Apple. I certainly don’t believe that is the case. Apple has no intention on competing with the lowest end of the market. They chose to compete on experience and have proven they can do it extremely well. I also believe they don’t want to price themselves out of the market and will do anything necessary to keep their products affordable. There is a market for cheap but there is also a market for high-value products which are affordable. There is a big difference between cheap and affordable. This strategy alone for Apple can keep their profit share high even if they have smaller market share.

We will see how this all plays out. I’m not sure the degree the current tablet forecasts took into consideration the size and scale of the potential cheap tablet invasion. My gut tells me all the current tablet forecasts for 2013 are still much too conservative.