Unpacked for Friday, July 8th, 2016

Light’s L16 is an Intriguing Camera Concept that Addresses a Shrinking Market – by Carolina Milanesi

This week, Silicon Valley-based startup Light made news as it raised $30m from Alphabet’s venture capital arm. Light claims the L16 will be able to replace professional DSLRs by delivering a lightweight camera unit that contains 16 separate cameras. Software is at the essence of the solution that uses “computational imaging” to combine several pictures into a high-def one. The cost? $1700.

Looking at the number of pictures people are taking and sharing on social media through their smartphones, one would be forgiven to think there is a strong appetite to get better quality images. However, quality is not as key as you would think.

Most pictures are disposable; they live in the social media moment. Just look at the protest by many about Snapchat adding the new feature called Memories. In the recent study we conducted on cloud, and specifically, photo storage, it is clear people just do not do anything with their pictures. The vast majority of the consumers who do store their pictures in the cloud do so because their phone is set to do it automatically. You can find the key dataset here.

Of course, there is still a market for high-end cameras but for those consumers and professional users, the design of the camera, the look and feel as well as the lenses, are very important. While it might be important to have something compact, the quality can never be compromised.

In between these two groups are people who rely on phones for everyday photography but then carry their DSLR with them on holiday or special events. For those people, current smartphones with some of the many lens accessories you can find are more than enough.

I think the money raised by Light says more about how eager investors are to find hardware winners at a time when the underlying tech commentary is on the death of hardware and the rise of services.

While smartphones will always be somewhat limited by their compact form-factor, there are modular options that will come to market soon that will turn them into more powerful cameras at a fraction of the price that Light is marketing the L16. Overall, even without these add-ons, smartphone technology is catching up fast and the focus is also quickly shifting to 360-degree cameras and how those play into the whole VR experience. Consumers will be more excited to spend money there simply because it is new and social media is embracing it.

Snapchat and the Battle For the Camera Roll – by Ben Bajarin
Yesterday, Snapchat released a new feature called Memories. Up to this point, Snapchat had made a name for itself by having users share videos that disappear after a set period of time. They had built in a habit of their users to constantly open the app and see what their friends are posting to make sure they didn’t miss something. You can imagine the embarrassment in a teenager’s life when their friend says, “Did you see what Aleah posted on Snapchat yesterday?” and that person hadn’t opened the app and seen it? The ephemeral nature of snaps are a part of the lure. However, Snapchat knows they need to expand the services features and it is no secret kids screenshot their friends and often save their own snaps to their camera roll. To address this, Snapchat released Memories which now gives Snapchat more direct access to your camera roll and allow you to create stories and save memories in new ways. This is a natural extension to Snapchat, who I also think will add more machine visual processing to their service, as they look to broaden their appeal beyond people under the age of 30.

What this showcases to me is a few things. First, we are moving ever closer to a cloud-based photo world. In a recent post at our Creative Strategies blog, Carolina Milanesi shared some of our cloud data around photos. There appears to be some value in the auto-backup features and people like having their photos everywhere. Snapchat making a play for the camera roll is them making a play to own the camera app and camera roll. This could have some interesting implications as this crucial millennial demographic gives more of their photo life to Snapchat and companies like Apple and Google potentially miss out.

Samsung’s Blip – by Ben Bajarin
Analysts are calling Samsung’s recent pre-earnings announcement that operating margin is the highest in two years as the return to dominance for the company. Actually, it is anything but. Samsung is enjoying a major part of their base upgrading and it is as simple as that. What Samsung is experiencing is, in a much smaller way, similar to what Apple saw in 2014/2015 as a big portion of their base upgraded to the iPhone 6 and 6 Plus. We track smartphone models by owners, so we knew a large percentage of Samsung’s base was still on older models. We should understand premium smartphone market refresh cycles as a pendulum swing. There will be down years and there will be up years and it will swing back and forth.

In no way is this a return to growth or a new chapter for Samsung smartphones. This industry is mature and it is and will continue to deeply impact refresh cycles. Apple will have a similar pendulum, now sometimes referred to as a “super cycle,” as a huge portion of their base upgrades. The problem is, this is unpredictable. Samsung will be the first to tell you they thought this was the year their base would upgrade. Samsung had two years of drought trying to get their base to move onto new devices. Apple has one year of drought and we will see if they hit a super cycle in 2017, or if they have to wait until their fiscal 2018 (starting fall of 2017).

BlackBerry kills off the Classic, its last QWERTY BB10 device – by Jan Dawson

This week, BlackBerry announced it was killing off its Classic device, the only current representative in the company’s lineup of what was once its mainstay: a QWERTY device running a BlackBerry operating system. The blog post announcing the end of life for the Classic left the door open to replacing the device, but the move is probably best seen in the context of broader trends facing BlackBerry.

The reality is it’s very likely BlackBerry will kill off its devices business entirely over the next couple of years. It’s down to under half a million shipments a quarter at this point and it’s extremely difficult to run a profitable phone business at that scale. The company has now built up its software business both organically and through acquisitions to the point where it can start to build its future around bits rather than atoms. It seems largely a matter of time until it completes that transition.

BlackBerry’s challenge for now is that, small as the device business is, it still provides useful revenue for the company and there are still some loose ties to its service and software businesses. Killing it off prematurely would sacrifice those revenues and potentially damage the rest of the business. But almost as damaging would be signaling the end of either BlackBerry 10 as an operating system or the devices business as a whole before BlackBerry is ready to pull the trigger, because then it will be left with lots of unsold inventory.

The challenging line the company has to walk the next year or two is to convince the market it isn’t giving up right until the moment it actually does so. That means refuting reports like the one last week that it was ceasing work on BlackBerry 10, even as it also sends subtle signals its investment in the platform going forward will likely be scaled back. One thing is for certain: BlackBerry’s future is very much about software, not hardware, so it’s simply a question of timing and percentages at this point.