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!

Conference in Arundel

Been a busy couple of weeks with different clients .. I particularly enjoyed the chance to talk to folk at the after-dinner conference I attended on the 19th January in Arundel, Sussex. It is a lovely part of England and the setting was very pleasant. Thanks to all those who were there and who listened/asked some great if sometimes complex questions afterwards. I look forward to meeting you again sometime - I know a number of you said you read the blog here. Hope the rest of your conference went well.

CES 2011 been and gone...

Well, I've had a break and left you all in peace over the Christmas & new year period for a few weeks. Now it's time to review the main stuff at Vegas's Consumer Electronics Show (CES) this year. Even though Apple doesn't attend CES, yet again this year most of the talk seemed to be dominated by one of their products and this time it wasn't phones but tablets. It's not as if they haven't appeared at CES before; in fact there have been concepts and vapourware from lots of companies over many years. However this year everyone it seems was trying to come up with the "iPad killer". So how did they do?

The most likely competitors expected to achieve any moderate success in the market are the RIM PlayBook and the Motorola Xoom. However one of the biggest problems for competing devices to iPad may actually be the sheer confusing number of devices, with around 40 different ones likely to appear in 2011.

Most analysts and commentators still seem to overwhelmingly believe that Apple are likely to continue dominating as market leader with iPad with around 70% share as these competitors come to pass. The PlayBook will try especially to appeal to those corporates that already run Blackberry devices, however the iPad has already become a consumer-led trojan horse in many large global corporations. The PlayBook seems to suffer some power management and browser/scrolling performance issues, the latter apparently common amongst many of the Intel competitors at CES. Many competitors also have too small screen sizes, and the promise of later larger models will worry potential buyers in case the apps each device is trying to build up will not look so great or function well on a different sized screen later.

Apple still leads the way in aesthetics and design, although a new even sleeker upgraded iPad 2 is expected in the next month or two. They also have advantages in hardware-software integration and hence a better user experience, and their massive app store ecosystem. On the profits side, Apple also have cost/volume advantages in component supplies not only due to the number of iPads being made but also some of the components that it shares with other Apple products. This will make it difficult for competing companies to match quality and price of device.

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.

Not so simple tablets ?

My father loves his iPad. Evidence from sales figures and customer satisfaction surveys so far released suggest that most other owners do too. Toshiba were one of the quicker large established companies to try and compete with an iPad lookalike product. However their problems have only just begin it seems.

I always said that it would be very difficult for competitors to match the iPad, particularly on quality of user experience and application availability. It also seems that price will also be hard to beat for the same sized screen of device. And its not just the size of the screen but also the clarity, both resolution and angle. The battery life is the final parameter which is also demanding to copy, while providing similar performance. Those competitor organisations that thought they could simply add a camera to the specification of their iPad lookalikes and take a significant share of the market are very much mistaken. That's why I always said that comparing specifications is futile.

Flying cars ... a social step?

I was asked recently about the prospect of flying cars. This often happens to futurologists! And it's so often the case that people are interested in the technology angle. However the technology is not really the major factor in when we will have these. We are already capable of building cars that can drive themselves. For the masses to fly/drive, this is in my view pretty much a pre-requisite. The technology needs not only to keep the "car" in the air and navigate it to where it needs to end up, but also prevent the average driver from doing daft, undesirable or dangerous things. We have seen the same thing happen in traditional cars, where technology has been incrementally introduced to prevent such things as skidding, collisions, parking accidents etc. Once vehicles take to the air then there are further undesirable actions to guard against.

We already have a test that people undertake before being given a licence to drive on the public highway. There needs to be something equivalent for individuals who will be ultimately responsible for vehicles that leave the ground, however automated the vehicles might be. And as with driverless cars, the infrastructure doesn't really support the concept. Infrastructural development always takes more time and money than the technology that operates within it. An analogy here is the development of cellular network technology consistently failing to be deployed to keep up with the smartphone devices that could utilise them.

Yes, personal transport that can leave the ground will be developed, but it won't be soon so don't hold your breath ... and the delay is unlikely to be due to the technology needed. And in the current climate, it would need a very green propulsion system to gain traction in the marketplace. We are likely to see radical changes in the fuels used for cars before the latter take to the air. This is because of where we are today, not because of the technology required.