Apple, Analysts & Innovation

Well it has been a while ... very busy with work ... but I couldn't resist a post about Innovation and Apple and Analysts, given the recent stock price performance of the most successful consumer electronics and computer maker of the last two decades, and the reaction to their quarterly financial results this week.

The sales and therefore revenues of Apple in the last quarter were higher than the same quarter in 2012, and higher than the so-called expert analysts expected.  The profits were down compared to the year ago quarter, and this is because the company has deliberately (including forecasting it in previous quarters) reduced its gross margin which has been traditionally exceptionally high amongst any company. The analysts who seized upon the profits report this week are the same analysts who have been critical that Apple have not made a cheaper low-end iPhone to attract more market-share!   They can't have it both ways.

Next, we are told that Wall Street and the analysts are concerned by the hint from CEO Tim Cook that exciting new innovative product classes (not just upgrades to existing top-selling products) may not be released until the Fall this year and into 2014.  This is criticism of the company that revolutionised the personal computer in 1984, revolutionised the music industry in 2001 with the iPod, and again stunned the world with a revolutionary mobile phone in 2007.  They then ignited the tablet computing market, where other big names had previously failed, in 2010.  Revolutionary products do not come around (even from the leading player) annually or quarterly or monthly.

Also innovation requires not only technical advancement, clever design, and vision to identify solutions which advance the status quo, but also an element of timing in the marketplace too, and the Cupertino company have shown that actually they are very good at timing.  I have no doubt that Apple will revolutionise other product categories in the decade from now, but it will be when they decide the time is right, not ignorant observers.  It's a pity that the market traders don't seem to share this confidence in a company with a proven track record.  Meanwhile competitors in Apple's existing markets are not seeing their stock similarly devalued while they play safe and make cheaper, lower quality plastic copies of lightweight razor thin notebooks, smart phones and tablets.

Finally, while on the subject of innovation, lets not forget that Apple don't only have a track record of technology and product innovation, but also business model innovation, which is in some sense much harder.  The iPod not only revolutionised how we listen to music, but the whole business model of the music industry.  The iPhone not only revolutionised the phone, but again the business model behind cellular data services and transparent charges for them along with seamless WiFi switching models  previously defended by the mobile network providers.  Their retail stores have also revolutionised the high street in terms of the profitability per square foot used for product shelving.  Lastly, the app store model for paying software developers who write apps for iOS is another example of how a traditional business model has been re-shaped by Apple.  

I have no doubt that the biggest obstacle to addressing some of their new potential product classes which the analysts all crave, is how to break and redefine business models underpinning the new products themselves.  This requires partners to be convinced outside of Apple, just as had to happen (with record labels, movie studios etc) to make the iTunes Music Store such a runaway success.  When you develop not just revolutionary products, but also revolutionary user experiences, you invariably rely on convincing third parties outside of your own organisation to begin a disruptive journey with you so that the complete user experience from purchase to service to upgrade and transition is consistent.  This takes time.  I only hope that Apple's future partners show more confidence in them based on their track record than analysts do!

The hidden damages to Google

So the news about the damages awarded to Apple against Samsung by the court which has been considering their intellectual property dispute has hit the headlines.  Of course the journalists have to simplify the quite complex arguments and counter-arguments made by each party for the consumption of the masses.  However lets not believe that this is all about using rectangular screens and   touch sensitive control of a phone, which some in the media have portrayed.  You only have to look at the appearance, functionality and user interface design of smartphones (and not just from Samsung) before the iPhone was launched in 2007 and then afterwards.  There is no comparison.  And I do mean compare smartphones ... we are not talking here about simple feature phones or basic cellphones.  Smartphones were being marketed and sold before iPhone, but none of them had the radical differences of the iPhone in appearance, functionality and user interface design (user experience).   I was a professional gadget guru, and even I had to do a double-take when passing the displays in carrier's shop windows at times, to blink and see if they were offering Apple's phone or new competitors in since 2008.  

Lets consider appearance.  Before iPhone it was pretty easy to see the difference at a glance between for example, a Motorola (remember them?) and a Nokia, the latter having a very distinctive shape across a huge range of phones.  The other manufacturers didn't try to make their phones look like Nokia's in appearance.  They innovated their own distinct shapes and designs, placement of buttons, colours etc.  But post-2007, it seemed like everyone's smartphones were beginning to look like iPhone.  One big screen with a similar sized bezel/outline, the same basic shape (ok most were bulkier and thicker but that's only because they couldn't copy that too - few people want a bulky handset), even a single bigger home button in many cases and even buttons and controls placed in similar places around the sides!  Note that most didn't copy the use of materials such as metal and glass, instead replacing these with plastic, which allowed them to undercut on cost/price whilst looking (but not feeling) similar.

Now the functionality.  Before iPhone in 2007, the functions even on "smart" phones were quite limited.  Remember the 'baby internet' using WAP?  No - I never used that crippled attempt at browsing the net either!  Even getting a GPRS data connection was a chore and a worry.  There were very few in-built data plans, so people tended to have to count the cost of their data usage carefully or worry and not use it at all.  And as for seamless connection without user intervention to WiFi when in range - well that wasn't implemented by the existing players because they were afraid to upset their cell-network partners by taking expensive data traffic away from them.  (So actually its not just functionality but business model innovation too).  But after iPhone, it was suddenly much simpler to use data services on a phone - so functionality of the phone was enabled!   But remember, no-one then talked about apps on their phone ... they were another radical step towards the functionality explosion on mobiles.  Yes you could add 'programs' to your phone before mid-2007, but it wasn't easy and the available software was extremely limited.  Apple innovated and made the App store model usable by the masses, (importantly including app developers).

Finally the user interface design or user experience.  Before the iPhone it was all about a fixed plastic miniature keyboard, and awkward little up/down buttons or tiny finger 'joysticks' or a stylus.  (You imagine trying to do a rotate or pinch gesture with a stylus!).  There were inaccurate touch screens using resistive technologies on other devices but not phones.  The capacitive touchscreen on the iPhone changed the experience of smartphones forever.  But even if you discount this innovation, those who copied the touchscreen could have innovated their own behaviour for that touch screen interface.  The rubber banding of the scroll bars when they reach the top or bottom of a selection is one example.  You don't need that behaviour.  It's not essential to a smartphone.  Apple did it first. Others didn't have to copy it.  Notice now I say others ... hence the title of this article.  This is not just about  Samsung (and potentially other hardware manufacturers).  They are only indirectly responsible for the User Interface and how the 'system' works.  They made a choice to go with Android, Google's mobile operating system.  They chose to launch products which rely on Android software.  So who copied the features like rubber banding of on-screen scrollbars (together with an awful lot of other 'behaviour')?  The culprits are somewhat hidden.

The win by Apple in the courts, made simpler against Samsung by both the lawyers and the media, is actually also a more complex case against Google.  The damages awarded (after any appeals etc) are of little consequence in Samsung's case (but send a message to other manufacturers) and Apple will dwarf those amounts by paying Samsung to supply huge numbers of components for current and future mobile products.  Of far more significance to Apple is the damage this inflicts on Google because of Android.  Most of the serious competitors to iPhone use Android software now.  They will be worried.  There are other ways for hardware manufacturers to design the appearance of their phones.  But there are also many more ways that they and the operating systems software players could innovate the design of the functionality and user experience of future mobile devices.  This would benefit everyone.  Let's hope they do.

And of course as technology and innovation moves on, the best ways to do standard things and implement common features emerge.  Those shouldn't be barred from being used on all devices in a particular category across all vendors.  But the answer is to acknowledge who innovated and protected that idea first, and licence the technology from them, not blatantly copy and try to get away with it until you end up in court.  There is an example of this involving the very same players.  Google innovated brilliantly with their online mapping.  Apple, recognising this, licensed Google Maps to use as a very early app on iPhone!  Is it now hardly surprising that in their next mobile operating system release that they will replace Google Maps with their own solution?!  But it isn't copying the idea.  It uses different (vector) graphics technology which has advantages when scaling the map view especially with labels and when an online connection is lost.  This is lawful innovation.

Doing the iPhone was risky, especially for a player who was a completely new entrant in the smartphone market.  Being so radical with appearance, functionality and the user experience was risky.  (I remember the nay-sayers at the time pronouncing how the touch screen keyboard would be too difficult and lots of other criticisms).  It might not have been successful, but it was, and now others strive to emulate it.  Success from risky innovation should be rewarded, not just in the marketplace but by recognition of competitors should they wish to build on it, through licensing or other agreements.  Then perhaps some of the massive amounts used for litigation could be redirected towards further R&D innovation.

Speaking of Technology

So my wife now has an upgraded phone, the iPhone 3GS (my old one) and I have my new iPhone 4S. So we could move to iOS5 together. One of the unique features of iOS5 on the iPhone 4S is Siri. Siri is not just voice recognition; it is contextual language understanding. Voice recognition on most other devices relies on you speaking particular words or sometimes phrases, which are recognised, matched and cause actions to be carried out. With Siri, you don't really have to think what the phrase is that you have to use; you simply say what you want. And you can usually rely on Siri using previous voice commands when interpreting subsequent ones. For example, if you ask something about weather for one location, you do not have to mention weather again when you want that information for another location; you simply say "and in London?".

Perhaps the most impressive aspect of Siri was demonstrated the first time I ever tried it. After removing it from the box, and the SIM card was inserted, I instantly loaded my mail, address book, and calendar information via MobileMe. I then used Siri for the first time by saying "Call my wife". I expected it to ask who my wife is, at least the first time. But instead my wife's phone rang! The only way I can think that this was possible was from multiple lookups to my Address Book. My own entry in it gives my spouse's first name. There are two records in my address book that have that first name, only one of which is my wife. A match between surname of that person and me would have correctly led Siri to the correct person. The mobile number in that person's address book record was then selected from the three numbers listed for her. It's therefore not only the speech recognition of Siri that is impressive, but the actions taken according to the meaning of the words recognised.

I have seen many speech recognition systems, some very good. Siri is an order of magnitude further forward. It is certainly not perfect and does make mistakes. But it is still the best speech system I have used. Many of the actions you can ask Siri to take are quicker to do that way than without Siri, such as setting a reminder call. That is ultimately why I (and many others) will use it - not because of the quality of the technology but because it is more efficient.

The fall '11 device technology landscape

Being somewhat busier these days, my posts here tend to have bigger gaps between them .. but they will still happen! And they may be a little longer when they do.

As summer disappears and the leaves begin falling, more froth is bubbling on the technology landscape as many await the next move by mobile device leader Apple. Yes the next generation iPhone is coming and my 3GS is due for replacement so I await with interest. It's likely that this time the range of iPhones will be increased by a choice of high-end and less expensive models in order to broaden market appeal. The storage capacity of a lower priced model could certainly be smaller, given the imminent simultaneous launch of iCloud and the storage/streaming/download features it supports. The latter will also open the door for a couple of innovations, through its instant app-sync across devices facility.

The first is that when Apple decide the time is right to introduce NFC (Near Field Comms) to their devices, this will likely support multiple features/services, and not just the small-value contactl-less purchasing that most commentators talk about. I expect the sensing and proximity aspects of NFC to feature in a number of distinctive ways. The seconds is in the mapping space and especially how people locate and track other people and things that they care about, in a secure and privacy-aware way.

Away from Cupertino, what else is happening? Well RIM have continued to see BlackBerry sales drop sharply and are shedding jobs ... not good for the major corporate smartphone supplier. Its 200,000 PlayBook tablet sales have also disappointed investors. Travelling by train a lot recently, I see many employees juggling the corporate BlackBerry and their personal device of choice (Android or iPhone). This is an unsustainable behavioural situation and I believe that change will continue to happen in favour of the consumer/personal devices, especially as IT managers, CTOs and employees become more aware of the way that corporate security policies can be automatically and securely deployed remotely to protect company data while leaving the users happier and more productive with an experience/device they enjoy using.

Microsoft have begun to show people what Windows 8 will look like. Something tells me that many Windows users are not yet ready for another new operating system upgrade, they just want their existing PCs to work better like the smiley "I'm a PC" folk shown in Microsoft's recent TV advertisements. (Note that the Redmond company never used to have to advertise PCs a while ago!) And for those that do yearn to embrace the next Windows experience, they may be a little surprised to find that it may not be so happy to run some of the software they traditionally rely on. They may also be wary of the latest layer of user interface to be slapped on top of the system. But that is all in the future.

Samsung are having a hard time in the courts, with rulings in increasing numbers of countries that they cannot sell their Galaxy Tab models which not only compete with iPad but also look so similar in most design aspects that lots of non-geeks could be confused. HTC and other Android system smartphone makers must be still reeling slightly from how Google appeared to get into bed with Motorola last month, and looking for additional alliance options for mobile operating systems, either by partnering or acquisition in order to mitigate risk. However there aren't too many competitive options out there. You might expect the LinkedIn profiles of a few ex WebOS designers to be updated with new employment details soon.

Finally for this time, Intel has announced more about their roadmaps including extra support for even lower power processors that PC manufacturers may use to attempt to compete with the MacBook Air which continues to sell in huge numbers. Intel have also announced support for OpenCL in such processor families coming soon which should increase further the performance of future lightweight Air models. Then, like their bigger notebook siblings, they will be able to ship out some general processing tasks to the GPU (graphics processing unit) when it is not busy painting pixels on the screen.

More of a roundup and opinions of it soon!

Digital Locker or Lightener?

Apple's acquisition of the iCloud domain name suggests that their soon to be revamped MobileMe online services will be re-titled as well as re-purposed. But what purpose will the Cupertino company put its huge data server farms in the 'Cloud' to? Much has been written about the idea of a digital locker to securely store and stream content (such as music libraries) to any devices. But the cost of licences that Apple are paying for to rights holders of the content will have to be clawed back and I don't see them going down the advertisement route. So if the streaming part of iCloud is to cost users, then the value proposition will need to be very clear. I don't think the secure storage (i.e. backup) aspect of the digital locker is enough. Neither do I think that the ability to stream content to various devices will be enough. Users will compare the benefits of iCloud streaming with what they are already able to do. For most people, syncing and carrying the content they own on their devices is not an issue. It's there, it works so why pay more to achieve the same? One additional possible benefit is if the cloud based versions are better quality (e.g. higher bit rate, hence larger files). Well I'm still unconvinced. Most people cannot tell the difference in the quality beyond a point and they won't therefore see much value in paying for higher quality which is hard to perceive. That's not to say that all of these benefits would be rejected or complained about. I just don't think that the general masses will perceive enough value to pay for the service if they don't already!

But there is one thing which would cause a large number of those people who currently don't pay for MobileMe or other content streaming services to do so. If Apple were to launch a lightweight iPhone 'Nano' which has very little flash memory for content at a massively cheaper price, then it would put an iOS device in the hands of many more people, and allow those owners to effectively spread the cost of device ownership via a content subscription service. It would also fit the pattern of Apple later launching a cut-down version of successful high end products, and also be a model which is hard for many competitors to copy, requiring the server farm / data warehousing, licence agreements etc. to work. This would signal a shift, a digital device lightener, shifting content from devices towards the network. For quality to be maintained, better streaming/buffering technology will be needed than is currently used.

But I would be surprised if such a device came as soon as the revamped service ... rather it is likely to follow a while later. The initial marketing impetus for iCloud will be the benefits already mentioned as well as some additional facilities such as iWork.com finally making it out of beta status, and a family/friend location tracking service which people explicitly trust to keep them in control of their privacy, whilst letting their loved ones follow their progress.

The Privacy thing again...

Quite a lot has been happening in the privacy debate recently. There was the froth about Apple iOS and Google Android based mobile phones tracking users' every moves. Well of course the smart device in your pocket knows where you are and stores it internally from time to time. Anyone who has either owned one of the early standalone GPS units (and knows how long it took to get a decent accurate reading) or who understands the idea of 'assisted-GPS' will realise that more information is required than simple GPS from Satellites to instantly show you your location on a map on your smartphone. People also need to understand how much of their movements are tracked in all sorts of ways in the modern age (ATM machines, CCTV, credit card payments, etc.) in addition to their mobile phones.

Of course there is a debate to be had about how this information is stored, where it is used and who can get access to it. But users have to understand that in order to benefit from technology they have to give something up too. And most people won't worry about this; they have nothing to hide and their location information is not leaked to anyone, and certainly not to anyone they would be concerned about. But some US senators seem to be having a good time asking representatives of Google and Apple to explain themselves. I suppose it's an easy way to look as if they are attempting to protect the people who elected them.

Then in the UK recently we have had examples of how privacy afforded by secret court injunctions has been shown as farcical when 70,000 people have twittered online about something which national newspapers have been barred from printing to their readers. It demonstrates nicely how the legal system and current legislation is outdated in all sorts of ways, due to the changes that new technology and the Internet has brought about. This will continue to get worse as more cases of irrelevance happen in law. It's a part of the social change which is happening in society and which is leaving the established old laws of the land behind.

Microsoft Musings ...

Most of you reading this will have read by now about Microsoft's purchase of Skype. I would think the recipients of the cash they paid are quite overjoyed to have sold the company which was/is losing money for such a hefty price tag. I somehow think Microsoft will struggle to turn this around. Despite vague signals that the cross-platform availability of the popular communications package will be maintained, one has to wonder if the Windows (especially Phone) versions won't be updated with more features earlier and at the expense of others... Skype on X-Box comes to mind, despite the uncertain effectiveness of a gaming interface for communications. Anyway we will see if Skype is safe in their hands as time goes on.

Then we had the retracted Ballmer statement! Most CEOs are careful about what they say as head of their companies, but last week Steve Ballmer declared that Windows 8 was to be launched next year in 2012. More recently the Redmond PR machine has corrected the "mis-statement" by their CEO as not in fact being true. It was hardly a technical detail so one has to wonder what Steve was thinking about? Either way I am not sure the world is ready to change the Microsoft operating systems out there again just yet, especially given the time it takes most Corporate IT departments to do in-house testing and deployment and at a time where economics are tough. WIndows upgrades of the past have tended to require significant shifts in hardware specs too, now in a world where both desktop and notebook sales are declining. Ballmer looks and sounds clumsy in his operations at the top of Microsoft, and key investors in the city have noticed and started to comment on it. Maybe change from the top is what the company needs. Then in my view it needs a complete revision of its business strategy for the future.

And finally on the topic of Microsoft, following its strategic deal with Nokia, the latest Windows Phone adverts seem to have taken a slightly new direction, including the notion of X-Box on your phone. Well, certainly the processing power of Windows Phone and the OS layered on it will make it hard to create an exhilarating experience for users and an attractive environment for developers. Interesting in passing that the Ovi branded Nokia app store has died a death. Microsoft's biggest success recently was Kinnect for X-Box ... people love the idea that was 'borrowed' from Nintendo's Wii ... but its not an interface that is easily imagined in conjunction with a Windows Phone ... so why would a marketing message raise expectations of X-Box on that platform. It all seems a bit muddled and slightly desperate.

Tech Industry overview 2011

As 2011 revs up into full steam, I'm taking a look at various sections of the tech industry. In January the year began with the once amazing Consumer Electronics Show (CES) in Las Vegas but it took place with barely more than a whimper. Facebook continues to lead the pack in the social networking arena, with Apple having failed to tie it's Ping music network into the social giant at the back end of last year. News Corp more recently has launched The Daily, a news service designed solely for online consumption via mobile devices such as Apple's iPad. It is hoping that people will pay for up to the minute news services which are provided by paid professional journalists - we will know by the end of the year whether its hopes are realised. Meanwhile AOL has bought the Huffington Post, taking the opposite view to Murdoch that free web based news content will prevail.

A day or so after an astonishing internal memo by Nokia's CEO was leaked in which he likened the company to a burning ship and catalogued major corporate in-house failures, the company announces a tie-up with Microsoft and its Windows Phone operating system. This virtually signals the end for the old leader Symbian and perhaps Nokia's latest Meego operating system too, as both companies try to catch up with Apple and Google in the mobile devices space. They have a lot of ground to make up and I am very sceptical that they can make it. HP's buyout of Palm has seen it describe a new push in the same marketplace with the inherited WebOS system but they similarly have a huge challenge ahead.

Google is now leading the pack in terms of Android devices sold but Apple remains the leader in terms of money-making in that market. Being a profit-leader is not just a good business statistic. it also gives them a huge cash reserve which is key to strategic purchasing power of components for the next generation of mobile devices. This in turn means that the highest quality devices can be marketed at lower purchase prices which helps drive sales in the longer term.

And meanwhile, on the streets of Cairo, yet another previously dictator-controlled country is suddenly teetering on the brink of overthrow, as people attempt to claim some form of democracy. It is indicative of the Internet's support of people-power that the first clamp down reaction of the incumbent Egyptian regime was to try and cut off the Internet and prevent the mobile social networking being employed by the people organising the protests. And Egypt will not be the last. Gradually over decades, we will see many other dictatorships around the world fall, as technology not only enables people to act on mass with a global voice, but also shows many of them for the first time the freedoms that those in other countries enjoy, and which they then aspire to for themselves.

The rest of 2011 will see some more players in the tech industry merge or otherwise disappear as the strengths of the leading players' platforms increase. Google will continue to suffer the challenge of a continually fragmenting Android system across so many device manufacturers as each of them attempts to differentiate their products. Apple will announce and ship updates to its iPad and iPhone, probably introducing a 'nano' version of the latter to compete at the lower end of the smartphone market. Their high end mobile device replacements will incorporate near field technology to facilitate payments as they take on the banks in the next phase of the iTunes account based eco-system. I see parallels from how the network operators in the mobile phone business have seen their power and value-add services diminish since the original iPhone arrived, appearing in the banking sector as they become bit shifters in the same way as the network providers.

Apple will also want to eventually condense the separate recently launched CDMA iPhone (and later iPad) for Verizon in the USA and other CDMA operators globally into a single worldwide phone which just works anywhere on anyone's network. I think the company is well aware that the international data roaming charges cartel between operators is the single biggest obstacle for users getting the great iOS device experience when travelling overseas. A new open-SIM approach which the operators are already fighting will also be on the Cupertino company's agenda.

The success of iPad shipments in its first full year was absolutely astounding for a new class of product, surpassing the statistics of the previous launches of DVD players, VCRs and other consumer devices, and I think surprising even Apple. The take-up of the iPad in major corporates with hardly any encouragement has also surprised many. This has the potential to really ignite the consumerisation of IT in organisations longer term.

And in the Summer of this year we are promised the next major revision of Apple's computer operating system, OSX (Lion), in which they will begin the transition of many old style computing ideas to the iOS-like mobile computing approaches. I believe the iPad is an embryonic symbol of how computer hardware will almost disappear in the decades to come, as people just get on and do stuff, working with information and media in far more natural ways than the stepping stone technology of the mouse gave us. As mobile networking speeds increase and devices are increasingly sharing information and media between each other, it is likely that Apple will considerably enhance their cloud-based services using infrastructure which is already built.

I doubt very much that 2011 will be boring technological year!

The rise of personal pocket power...

I have long said that we will in future see a world where personal computing devices that we can carry in our pockets change the way we go about doing many of the rudimentary activities (working, playing, shopping etc.) we currently undertake. This is slowly being borne out by the amazing range of apps that smartphone and now tablet users have access to anytime and any place. ComputerWorld has now predicted the historic shift that in the next 18 months, shipments of app-powered smartphone and tablet devices will reach and pass the number of PC shipments. Given the ubiquity of the PC over the last few decades, this is indeed an important shift.

I believe this is just the start. Tablet formats are finally changing the idea of what a computing device has to look like and how it has to be used. The mouse is disappearing. File systems are being conveniently hidden from users. Adding new software apps is becoming a new easy affordable activity rather than the laborious, expensive and technical process it has often been on the PC.

The trend in gaming, started by Wii and now being copied by Playstation's Move and XBox's Kinect, of gesture-controlled computers is also developing fast. As with the iPad, we will see the computer slowly disappear from the user's consciousness as they simply get on with doing stuff! And the development of wearable and environmental computing will take this further in the future.

The Smartphone licensing race

So Windows Phone 7 (WP7) is now out there on some handsets attempting to compete with the increasing raft of phones running various versions of Google's Android operating system and Apple's iPhone with its iOS. There is a difference however. Phone manufacturers using WP7 or Android have to license that operating system from Microsoft or Google.

They have to decide in the first place which phone models to bring to market with which features and then which system to licence on top of it. While there is a huge marketing budget behind Microsoft's push for WP7, the manufacturers do not have a bottomless pit when it comes to releasing new models of handset. With the increasing competition in the marketplace, Android and WP7 will be vying with each other in the handset producers' minds. And then once they have made their choice of system for a handset, then they have to decide what version of that system software to release on it. There is already significant fragmentation of Android software versions out there across different devices, and WP7 will likely go the same way once later versions appear to support more features. Because some of these features depend on hardware, not all devices will be able to run or upgrade to all versions.

Apple do not have this problem of licensing iOS on iPhone. They can also more easily plan and control the evolution of the hardware and software features on their devices. Handset producers do not have the option of having iOS on their devices and so when choices have to be made for new handsets, it is one of WP7 or Android that will lose out. As the turf wars begin in the future smartphone market, Apple may end up benefitting from the competition between the other two. This benefit is additional to their ability to provide a simpler user experience and higher build quality from the in-house design and integration of hardware and software, and their superior model for developers to earn money from apps.

RIM's tablet approach...

My previous article looked at Dell's strategy for competing with the iPad. This time I look at Canadian firm Research In Motion's (RIM's) approach to the tablet. The Blackberry manufacturer, who has been very successful selling into the Corporate mobile IT marketplace resisted the urge to try tablet form factors pre-iPad but has recently joined the bandwagon of announcements of products aimed at challenging the iPad. However as with Dell's approach, there are some things that cause me to doubt their potential for success.

First they are squarely aiming at the market they know best - the corporate IT sector. The device, the "PlayBook", however sounds more like a consumer device in name, and indeed includes multi-media features more associated with consumer products. This is seemingly trying to address the well-established idea of consumerisation of corporate IT, but from a backwards perspective. I have written much about this consumerisation, and have always emphasised how I expect it to stem successfully from consumer to corporate rather than the opposite direction! Microsoft have already tried and failed in this strategy and I remain unconvinced about the RIM attempt too.

Secondly, the main attraction (and indeed strength of the Blackberry) is the way RIM understand the integration corporates like with business enterprise systems (BES). But for the PlayBook to achieve BES, it will need to be tethered to a Blackberry! The decision to do this seems bizarre. It kind of admits that the Blackberry form factor is inadequate; otherwise why launch the PlayBook at all? And in addition, this decision by RIM means that business users will need to carry around two devices instead of one, and IT departments will need to manage twice as many devices and all the heartache that brings them.

Finally, the PlayBook will not arrive until early 2011 at the soonest. By then, the iPad will already be in its second generation and the number of business and productivity apps have exploded from the thousands that already exist today. RIM system apps for PlayBook number zero today. Also as I mentioned in the article on Dell, the selection of a 7" screen for the PlayBook really misses the point of how different apps and the internet look when they are on a 10" screen in your hands. Those extra 3" really make the difference between the feel of a smartphone and the feel of a new class of device.

Both the Dell and the RIM responses to Apple's iPad seem to suggest that companies in the sector are frantically scrabbling around to identify a new product for their portfolio which can match the competition, and in my opinion coming up short. We shall see...

Dell's tablet approach...

Today, there are numerous media reports of the tablet PCs that Dell has announced. So far we have had the Dell Streak, a 5" model which has hardly set the world alight. This is unsurprising in my view, since it will be regarded by many as simply a bigger heavier smartphone. Now Dell has announced there will also be devices in the 3inch and 4inch range of screen size. If they are trying to compete, as most commentators suggest, with the iPhone and the iPad then this strategy seems flawed in the sense that it just seems to flood the market with different models. It seems as if they neither know what size is optimal for a particular purpose nor understand what people will want. The consequence will be limited sales of all of them.

However the most imminent arrival to join the Streak, is to be a 7inch model in the next few weeks. This is presumably in terms of the USA, which usually means a European and Worldwide rollout sometime afterwards. But I won't be buying one. The iPad is the right size for a tablet and smaller devices as a way of trying to meet a cheaper price point (the screen is a big percentage of the bill of materials for a device) is no way to compete with it head on. The larger screen of the iPad makes a difference, you just have to hold one in your hands to understand that. I believe that Apple will later compete with a smaller model themselves but that the larger existing one will remain the standard device that most people want.

Dell have additionally announced a 10inch model for 5-6 months time. This is an admission that it is the ideal size so why not launch that one first? By then the iPad will have consolidated its leading position ever further than the march it has already stolen.

And on software ... Dell have also announced that their tablets will run Android OS but that they will also launch models with Microsoft Windows. As with screen size, this seems rather muddled. They evidently can't decide which of the two systems will provide the best experience for users. And it will complicate the ability to run consistent apps across the various devices. With Android, we don't know which versions will be available, and once we do, the plethora of Android "open" devices hitting the marletplace will dangle a carrot that the nasty malware and virus creators will find hard to resist for long.

So the whole approach, hardware and software, seems to be muddled and confusing for the average man/woman in the street. Contrast this to the simplicity of iPad which it wishes to compete with. And that is before you even turn the device on. Yes, Dell will sell some tablets, as they have sold some Streaks already, but I remain unconvinced that their approach will compete adequately with Apple's iPad.

The Google/Android slayer?

It wasn't so long ago that the hype in the smartphone market was on Google, its Android mobile operating system, and a range of Google phone handsets. Well it seems like the latter was a relative flash in the pan. It seems from this article as if Google has sold its last smartphone in its homeland USA, and that the remainder will be carrier-branded phones in some other countries of the world. This seems to be a step backwards for the search giant, a sign which its rival in that space Apple will have noticed. The latter's iPhone 4 is still selling like hot cakes as fast as they can be manufactured in an increasing number of geographies, despite some froth and bubble in the media about antennas.

So for Google, if it's not phone hardware that they are going to take over the world with, what of the Android weaponry? Well, there is another problem showing in the numbers associated with app development on the platform. Android will only be successful if there are quality apps available that rival competitors systems such as iOS. Unfortunately, what the numbers show is that the unprotected, insecure, laissez-faire approach of Android is actually putting off developers from writing new apps, since they can increasingly be pirated and any royalty or developer fee cancelled out. This is particularly a problem since Android specifically appeals to the hobbiest, experimenter, techy-minded market of users, who are more likely to try out hacks than pro or non-tech savvy consumers who just want quality apps that just work. There have also been stories recently of Android apps accessing and passing on user data to third parties. However since the Android app store is relatively unregulated, no-one is going to do anything to protect users against this type of hidden privacy violation. And for the same reason, there is still the possibility that a rather nasty virus or similarly infected app could appear in the Android marketplace and have a devastating effect for Android users. Google may be exiting the hardware market but its name is still very much associated with the system on an increasing number of carriers' handsets, with all the responsibility that goes with that.

Future devices means paperless?

The paperless society was mooted decades ago when computers first became widespread but of course they often printed more stuff out resulting in more paper being used. No I don't think paper is about to be wiped out but a new trend with mobile devices is beginning. Devices such as smartphones are no longer simply being used for communication purposes. The additional apps that are being developed include some which allow the device to represent the user as a kind of identification proxy. One example is the supermarket chain Tesco with their clubcard app which simply displays the barcode associated with their loyalty card for people. Thus the iPhone can take the place of the card at the checkout and identify you as a known customer.

The airlines are also taking this on-board, almost literally by developing an app which takes the place of the boarding pass that they or increasingly you the passenger would print out. The relevant barcode can then be scanned at the gate or check-in desk/self-service terminal. This application will save a little paper but will also develop further with the introduction of near field comms (NFC) / RF-ID functionality built into phones and other devices. This will open up a whole lot of more uses for the device. Perhaps media discussions of iPhone 5 will be more about these things than antenna attenuation and performance!

2010 - A face Odyssey

Well, I can't take credit for the witty title of this post ... it echoes the title of the article written in today's Independent Newspaper by Rhodri Marsden, which included an interview with me. The feature discusses why finally video calls may take off for the consumer after so many years of promise.

Of course the sub-editor of the newspaper got their turn at changing what I said to Rhodri during the interview, but hey .. I knew what I meant at the time ... and that is the perogative of editors! Essentially I was talking about the E word .. Experience ... it is all about the experience the user gets, something I would expect Apple to excel at compared to the various phone companies that have tried this before.

First the network bandwidth on a mobile combined with compression techniques now makes a good video call experience possible. But by experience I mean much more than this. Point and press to initiate calls, just as easily as a normal phone call, with no extra account to set up (as with many pc based messenger type video calls including Yahoo, MSN & Skype), is also important. A video call requires two ends ... and two end devices equally capable of live video without the processor ruining your device's battery life. For success it will require tens/hundreds of millions of devices which have the capability. Apple will have this with iPhone 4's and its successor, iPads (the next incarnation) and iPod Touches of the future. A great video call experience also requires a great blend of hardware (camera, processor etc) and software (codecs, user interface) and Apple have both.

Finally its about the business model. How do you charge for video calls? For consumers, it is by no means essential for a call, and so it has to be very very cheap or probably free. What carrier or communications company is going to offer the service for free? In the past, they have tried in the fixed video call space and not only required you to pay over the odds for the devices but also for the calls ... they just don't get it. Conversely, Apple, a company that makes desirable mobile devices, would. This will be another essential tick in the box for the consumer experience ... no extra cost over WiFi. By the time it is popular with consumers, mobile carriers who want to participate to get some of the traffic on their faster LTE and other 4G cellular networks won't be able to charge much for it either.

It may take a little beyond the end of 2010 for all these things I have mentioned to happen, but 2011 may finally be a facetime odyssey!

Mobile business models

We all know that the world of devices is going mobile. Desktop PC sales have slowed while those of notebook versions have increased over recent years. The smart phone has also dominated the device in people's pockets and tablet devices are now taking off as a more intimate way to use a computer that is carried with you.

As these trends continue, business models need to adapt to so that users' experiences are good, especially in the context of wireless network connections to the increasingly important 'cloud'. The computing industry has tended to embrace these types of changes more readily than the telecommunications industry. Apple's original iPhone, didn't just reinvent the phone (device) but also the business model that the cellular operators had assumed before then. This included data tariffs, customer support ownership, and connection transparency.

There has been one sorry state of affairs, bolstered by an ugly cartel, that has blighted the mobile cellular network business model for mobile devices however; that is the international roaming charges. These are incurred when you take a mobile (cellular networked) device outside of your home country and continue to want to use it in the same way as usual. In practice consumers have chosen to be very wary of this (on vacations and visiting family abroad) and businesses have endured ridiculous costs when their employees have travelled (for meetings abroad etc.). The European Union has spent a considerable time investigating such charges by mobile cellular operators and have finally come up with a ruling. Unfortunately it reduces the prices that can be charged for calls by only tiny amounts (a few pence for UK users) and states that operators should cap and then cut off data connectivity altogether for users who incur a few tens of pounds (euros or dollars) of data usage when an arbitrary level of use is reached. This is not exactly the radical change that is needed.

Mobile devices with continuous connectivity will continue to be most important in the future. The current system of charging and business models has to be broken across international boundaries. It needs the same radical change that the original iPhone stimulated in other areas of business models. Perhaps it needs to be achieved the same way ... through developments in the marketplace, as it seems like leaving it to the regulators is pointless.

Why iPhone 4 will stay ahead...

So Apple has revealed the iPhone 4, the fourth incarnation of the device that reinvented the phone. It pushes them further ahead of the competition. They will continue to be even harder to beat. This article deals with some of the reasons why.

The usual pundits are already simply comparing iPhone 4's megabytes, megapixels, and battery minutes with other devices. They miss the point as usual; it's about the complete experience and quality of both hardware and software, and most importantly how they fit together. And they will do the same with FaceTime, Apple's name for the new open standard they are publishing for video calls. They will compare it with other video chat software, again missing the point ... it's about how simple Apple have made it for people to use and the total experience it gives them. If you watch the heart-string pulling FaceTime video Apple have made, there is more time given to showing the faces and feelings of the people using the service than given to video of the service on the phone itself. This is very deliberate and significant.

The pundits will be looking to see what Google do with Android and what others offer in the same space. Actually it will be very difficult for even huge companies such as Microsoft and Google to copy iPhone 4. One of the reasons that few people recognise is that Apple are unique in making both the hardware and the software. Google don't make phones ... they rely on HTC, Motorola and others to do this for Android. Microsoft will also rely on many other big corporations to make hardware for WinMo 7 phones when they eventually launch it. Even if two large corporates do true partnership deals, they cannot achieve the same degree of integration as a single company. And players like Google and HTC are not true partnerships, rather simply contracting customer/suppliers. Moreover, a single large corporation cannot achieve the same efficiency and innovation level as a much smaller company that behaves more like a startup.

The problems of building the hardware and software in different companies is not simply organisational and due to poor inter-company communication. It is also about the two organisations having different end-goals, vision, business models and culture. Even branding is a problem ... neither company would want or agree to be invisible to the end user. If a third party makes an app on top of this two-party device then that is 3 splash screens the user has to endure before they can do anything useful! That is not an experience to die for. Neither are the inevitable inconsistencies that creep into the user interface.

Fusing in-house designed software and hardware does produce a better product with a better user experience. This is the difference between iPhone 4 and the competitors that will try to rival it in the coming months. RIM's market share is falling, Android's is growing along with Apple's. However the Android market is fragmenting with so many different phones, system versions, capabilities and specifications. It's not just simplicity in the user experience that most consumers appreciate but also simplicity in the choice of type of device. It's very hard for the man/woman in the street to understand the difference between the various Android phones... they understand much more that there is an iPhone out there; the Apple product portfolio is also very simple. The competition face a very steep hill climb in 2010/11.

Delaying the inevitable...

Oh dear! Here's another example of how the BBC are being held back so that the Internet revolution doesn't kill off lower quality information providers quite as quickly. But it will eventually and the public will have simply been denied a quality offering unnecessarily. The BBC should be allowed to provide whatever Apps they want for iPhone or any other significant platform so that users can decide what to use to access the information. It will be a shame if people are denied the opportunity to follow content from the World Cup soccer tournament in June from the BBC on their phones, while Sky and others who are part of the old guard newspaper/publishing industry face no such restrictions.

And apps are important, because they make the experience simple. And that is important. iPhone owners check the weather using the Weather widget on their phones, rather than going to the BBC site on the web using Safari on the iPhone - hence they get the Yahoo weather view rather than the provider who has a public information role in the UK. The apps that the BBC were planning to launch were simply making their existing content (news, weather, sport) available via the most successful smartphone platform, not straying into new areas of content.

Organisations would do better to work out how to innovate and be the best in the new media world, instead of trying dirty tactics to unfairly regulate and campaign against those who have already embraced the technology, and therefore skewing the market. They will fail, albeit slightly later than they might have done! It's almost as futile as the world's remaining dictatorships who still think that they can survive in an open, free and Internet connected world. They may take longer to die by holding out, but die they will.

Design innovation vs Standards

One of the obvious aspects of Apple innovation, which I have tended not to blog much about in the past, is the Design work that applies to their products, led by Jonathan Ive. The attention to detail is not just applied to the products themselves, such as computers, iPods and mobile phones, but also to the accessories that ship with those products such as power adaptors. Compare below the Apple power adaptor for iPhone which is built into a UK 13A mains plug (left) with a normal but fatter and bigger ordinary mains plug (right)!




Last year I recall a campaign followed by a fanfare announcement that mobile phone manufacturers had finally agreed a new standard power adaptor that would be interchangeable for many models and makes, instead of requiring a different one for each. This seemed a bit odd to me, given that most people only have one phone and therefore still only need one charger when they travel around. Taking into account the above Apple example, isn't it better to aim for a well designed pocketable adaptor which provides a standard USB power level output, rather than a new additional standard, which everyone again will implement in horrible ugly ways?

Redfly Video Review

Before I left BT last year, I did some video reviews of various products for their Innovate magazine. The final one has just been published on the web, although as it is embedded flash on one page of the e-zine its not exactly easy to provide a link to directly.

The subject of this review was the Redfly ... a netbook-like device without any processing inside it which links to a Blackberry or Windows Mobile smartphone by USB or Bluetooth and effectively gives you a bigger screen and keyboard for the apps on the smartphone. I actually think this is just an admission that some of those smartphones and their apps are pretty unusable. I dont see me ever needing a netbook let alone one of these smartphones and a Redfly. I'll definitely stick with my iPhone! However if you want to see an example of my performances on camera, you can find the Innovate e-zine here. The Redfly video review is on page 15 ... click the relevant link when you get there!