I can’t say either action is a real surprise, given the success – or lack thereof – of both products, but it begs the question of what the hell is so unique about Apple that makes them so successful?  Both products were reasonably good and both came out with some marketing strength and high hopes, albeit none had Jobs sticking his turtleneck out for.  In fact one can almost say they are truly cleverphones.  Nexus One sold directly by Google lasted a few months but managed to sell more through the carriers than direct.  Kin, on the other hand, didn’t even last enough to hear comments about it.  Microsoft has decided to protect their channel by pulling it out of the market and allowing HTC, Dell, Samsung, and LG who will release Windows 7 Phone Series (gotta love Microsoft’s marketing) devices this year for the “holidays”.

What I think is really happening is that even strong players like these tend to underestimate the power of the wireless carriers.  They own the customer since people buy phones in order to get a service, not the other way around.  Smartphone OEMs have learned the game and have succumbed to the carriers’ will, quite successfully I might add.  The market has turned into a selection of services where you pick a desirable phone for.  In other words, I know I want AT&T, Verizon, Telus, Vodafone, etc.  for whatever reason and then I select my phone.  Nexus One tried to separate it out unsuccessfully, even given the fact that Google didn’t need to make money on the phone!  People still bought the subsidized phone through the carrier in spite of a long term commitment.

Microsoft on the other hand didn’t try to sell direct, but attempted to bypass OEMs, where carriers buy more devices from.  So it is easier for them to add a Windows 7 Phone from HTC to the portfolio they already buy from them.  Besides, Kin was a succession of project “Pink” in which Microsoft had an agreement with Verizon to supply a device.  This contractual agreement forced Microsoft to release Kin with an OS that was not quite Windows 7 Phone.  In addition to that Verizon changed data plans and made the Kin less than attractive cost wise.  Again, a wireless carrier took control of the market.

One can also blame Palm’s near demise (and HP’s gain) on carriers’ acceptance or choice.

Whatever the reasons are, wireless carriers will continue to dominate and control the market.  Granted, both Google and Microsoft have a potentially great future with their mobile OS without their own branded phones as long as they follow the desire of the carriers they sell through.

The only exception so far is Apple.   AT&T has gained millions upon millions of customers that wanted one and were willing to compromise their carrier selection for the privilege of carrying an iPhone.  When Apple opens up to Verizon we’ll most likely see them run back and abandon AT&T.  Apple will churn the base, Verizon will add users, and AT&T will lose them.  Very few new iPhone users, but Apple will continue to sell them new ones.  Will Jobs be open to have an unsubsidized dual system (AT&T and Verizon) iPhone to sell direct so users can declare him his loyalty?  I can see it if AT&T and Verizon decide to create cheaper iPhone plans since they will not subsidize the phone anymore and create a price war.  We’ll see.

But for the time being iPhone remains the only device requested by name and the carriers maintain control over everything else.  For how long?

Enjoy.

In an unprecedented multi-partner new product category, Google – providing Andriod OS and Chrome browser, Sony – manufacturing the TV, Intel – providing processors, and Logitech keyboard and remote, WebTV is reborn.  But this time it is a TV that browses the Web, wait, no, a computer that plays TV, no wait, both.  The promise is that: both.  Based on the TV you’re watching, you’ll see ads, tweets, references, blogs, etc. that you can click and navigate to.  Google’s business model fits right in.

Straight forward, right? Not quite, much better.

The TV experience is passive.  You sit down pick a channel (or 17) and watch.  The Web is active: click, click, click.  TV works on a schedule (slightly disrupted by TiVo and other DVRs) and the Web is always available.  TV is to pass time, an entertainment.  The Web is to waste, sorry to spend time, searching, learning, and finding amazing content (like this blog); there’s a sense of discovery in every click.  TV is a family activity, at the very least to avoid talking.  The Web is individual.  What Google seems to want to offer is the Web experience for TV content.  All shows, all movies, all channels, all sports, all reality shows, all news; all of it ready to be found.  In other words, and infinite DVR with Google’s amazing search technology.  Pretty cool, and pretty disruptive for cable and satellite operators, especially with the newer generations that waste, I mean spend much more time online that in front of the TV.

To this humble blogger, these disruptions are what make radical changes in the way consumers behave. This will do to TV content what  iTunes and Rhapsody did to music, Expedia and Orbitz did to travel agencies, or Amazon did to retail.  A totally new way to find and enjoy professionally  produced content (I know you’re thinking “unlike this blog”): on your own schedule.  No more “I forgot to TiVo the game”.  The beauty of these disruptions is that they grow the pie and lengthen the tail.  In other words: more is consumed and there  is room for new suppliers.

Whether the two sets of habits converge nicely is yet to be seen.  But one thing is sure: multi-million dollar TV advertising campaigns will go the way of the LP: a distant memory of other times.

Enjoy.

Let me tell you why I think that’s the case:  As lame as the whole category is in this blogger’s humble opinion, an unconnected (i.e. no cellular support) tablet is the lame of the lame.  It brings me back to the 90′s when you had to go home or to your office to get internet access.  Sure, the 3G iPad is about to debut, but @ $600+ i really think the market will be limited.  Now, if our friends in Verizon Wireless agree to pardon the Nexus One debacle and decide to subsidize the gPad, imagine what will that do to the price.  Neither Verizon, nor Google have to make money with the hardware, which really does a job to Jobs (sorry, couldn’t help it).  Estimates of the iPad cost put it at $250 – $300 US, add a 3G (or maybe a 4G – ooooh – radio), we could be seeing a street price in the $400′s.  Still hefty for a useless device, but less than $600+ for the emperor’s Pad (ePad?  now I’m pushing it).

But wait, there’s more!  Chrome Os is the word on the street, not Android.  What that may mean is a real processor capable of Flash (not Flash lite) and real browsing.  Yes, my friend, I believe it will be x86 based which means that every website you can go to on Chrome today – which is virtually any website known to mankind and robotkind – is accessible to your gPad.  Not even Palm’s (future HP’s MaxiPad) running WebOs can do that!  Apps anybody?  Yeah, sure, real apps with Java or the like, not fake widgets that look pixelated.  Content?  Did I mention it is Google?

So there it is.  As much as I hate the category, a subsidized x86 based tablet may be the ticket to ride.  BTW, Adsense must be having a ball with this post!  I’m sure the ads are funny albeit unrelated. Do comment.

Enjoy.

Sure there’s some intellectual property and some innovation left in the inventor of the category.  And it is the fastest growing and one of the most profitable markets in the industry but the world does not need that many mobile Operating Systems (OS) to choose from.  I’m sorry.  As I’ve pointed out before, to unseat the iPhone it will take more, a lot more than multitasking, a cool form factor, and a clever UI.  I’m sure HP will make products people want to buy, but the question in my mind is will HP be able to create the ecosystem that will finally challenge Apple?  I quite frankly doubt it.  Not because it is impossible, or because HP doesn’t have the skills, it is because it is not in their DNA and Palm does not bring that to the table.

Other bloggers (the real ones) are talking about tablets and netbooks using WebOS.  Now that is even crazier.  If a stretched out iPhone makes little sense, a bloated Pre (will they call it HP-Pro or the Maxi?) doesn’t make much sense either.  A clever-phone OS will make a tablet look like a dumb keyboardless PC (no offense Steve).  Besides, with no app store, no cult to follow you, no content delivery, no store chain, no Steve (sorry Mark) things don’t look too promising.  Besides, HP is a much more powerful brand than Palm, so it’s not that they’re bringing that to the table.

So, my dear follower (singular).  Let’s just regret having covered our short a day too late and wait for their next move.  An app delivery company? video distribution? or perhaps music delivery?  We’ll see.  But one thing is certain: there will be more of these moves (some may be really big).   Microsoft, Dell, HTC, RIM, and others will be on the M&A news soon.

Enjoy.

AT&T has close to 6 million non-phone devices on the network.  Now why is that even relevant, my fellow reader (singular)?  Simply because there are a lot more non-phone devices and a lot more things out there that need to be connected than there are phones or people.  Yes, they may not be sexy, play music, browse the web, or even wash your car, but they essentially do everything else.  Beyond the obvious (Kindles, iPads, etc.) these things are everywhere and in desperate need to be connected.

Take your car, for example.  If you have Onstar it’s already connected (not with AT&T) so you know some possible apps.  But imagine a world in which you go to Google Maps, plan a route and squirt it into your car’s GPS!  Or simply download the movie you want your kids to watch from your home DVR.  Your electric meter one day will be connected to so you can monitor your consumption real time (Ok, Ok, i don’t know why would I want to do that either, but you can).  Every thing out there can be connected and can benefit from the internet.  But where things really start changing is with Enterprise Applications.

Next time you receive a FedEx or UPS package go to the web  immediately after you sign for it and voila it says received, in real time because the device where you signed is connected.  The copier service personnel can consult schematics and order parts in real time when his/her machines are connected. Or the copier can ping someone when it’s running out of toner; the end of the  empty copiers or useless service visits.  Making every device a smart device has endless  applications that are starting to look affordable.  Ma Bell’s humble cellular non-phone numbers are starting to show growth.  The ubiquitously  connected world is getting started.  Make sure you are ready for it.

Enjoy.

Granted, their products are good, WebOS is a neat idea, but they have lost the clout they once had.  It is sad to see a Palm, in a way the inventor of the category suffer this fate.  But hey, in this industry you have to listen to Bob Dylan: “You’d better start swimming or you’ll sink like a stone, ’cause the times they are a-changing.”

So what happened to Palm?  Execution and focus, lack of them, that is.  Back in the late 90′s with an explosive IPO after a spin-off of US Robotics everything looked rosy.  But they got greedy instead of focused.  But as Michael Douglas said in Wall Street: “Greed is good”.  No question but greed has to have a source.  And my fellow reader (singular) that has to be your products, not Wall Street itself!  It is my theory that Palm, as many other great corporations get too caught up in Wall Street’s metrics, quarters, and their leaders making money off of money alone, that they loose focus on the main thing:  Their products.  Countless corporations (Google, Apple, Toyota, Ford, etc.) are the opposite: they have focused on creating the best products or services, and Wall Street follows.

Greed is indeed good, but with a focused source.

Enjoy.

Without having had my hand on it it is tough for me to have an opinion on its performance. But given the engineering track record of Silicon Valley’s favorite they probably nailed it (even if they didn’t you know there will be a Nexus 2). But that is not what will make it a success, nor is that what is surprising about it. Motorola, LG, HTC, Sony Ericsson, and others have or have announced plans for Android powered smartphones. Yet, Google, the author of Android, decides to put out a device that competes with all of them. Moreover, Google does not have to make money from it (even though they will) since it is really a bet on mobile advertisement revenue. So far nobody has found a way to make money on mobile ads, but it is my contention that if somebody can figure it out it will most likely be Google. It is hard to imagine that Google decided to compete with their hardware partners just to make a “few” bucks selling hardware. They most likely did it for the same reason Google does everything else: to disrupt a market.

Imagine a world in which you do not have to pay for cellphone service. Pretty much the way you didn’t have to pay for TV in the past. Advertisers paid for it and consumers take advantage of that money flow. I know, I know, those days are waaaay over and not likely coming back anytime soon (until Google has a say). But in the mobile Internet business the biggest barrier to entry IMHO for mobile search to explode is the hefty $30 – $50 a month data fee from your preferred carrier plus a $100 – $300 “club entry fee” for your favorite smartphone. Sure there are hundreds of millions of smartphones out there and there will be more in the years to come, but the mobile search revenue still dwarfs the “fixed” one. Granted usability, contextual value, and other issues are still important. But Apple and Google will shortly solve those. Cost will remain a barrier. Unless, yes, unless it is free. In other words, paid by advertisers. You and I can pick our favorite smartphone subsidized by a carrier to get your voice revenue and Google pays your data plan as long as you search. Weird? Sure, but then again Google is known for its weird business models.

Enjoy.

I know what you’re thinking: Jobs’ vision was better than Ballmer’s, which may be true, but I believe Jobs’ team executed better than Ballmer’s. At the end of the day both companies had to catch up to Research in Motion’s Blackberry dominance in the smartphone market and they both had the opportunity to do it with a mobile browser. Let me explain. The common vision here, which in hindsight sounds even lame, was to allow web browsing with a cellphone. Apple executed that vision since the first version with a flawless browser experience. While Microsoft decided to develop very limited Pocket IE with their traditional first-version-to-be-fixed-several versions-later approach. The networks weren’t ready for a “big boy’s browser” anyway. Several years later Windows Mobile is a distant follower in the race that will most likely define the next decade.

Same vision, radically different execution. So my contention is that execution is really the cornerstone of leadership. One could argue that execution is what provides credibility, but that is a “rear view mirror” approach. Vision with execution is what leadership is all about. Again, I do agree that a vision needs to be clear, compelling, and credible to inspire execution. And that is the true definition of leadership.

Enjoy.

“Anyone who cares about media – indeed, anyone who cares about our society and where it’s going – must read this book” – Robert Glaser, CEO, RealNetworks. “Anderson’s insights … continue to influence Google’s strategic thinking in a profound way.” – Eric Schmidt, CEO, Google. These are just two of the bragging rights printed in the back of the book. In my opinion – dare I add it in the same paragraph as the prior two – his insights are, well, insightful indeed. Since I joined the blogsphere I have been trying to explain what has been the catalyst for all this seemingly nonsensical blogging and niche media producing. In an eloquent production Anderson managed to put it in very simple yet profound terms.

The Digital revolution has done more to society than making information available within a couple of keystrokes. Democratization of the tools of production (jeez, sounds like x-soviet propaganda poster), Democratization of the tools of distribution (ditto), and swifter connections between supply and demand have dramatically changed what once was a hit driven economy to an economy of lots and lots of niches. I profoundly agree, although I have to say that we still need a lot more work on the “connections between supply and demand”.
Chris Anderson, editor in chief of Wired magazine and and author of The Long Tail Blog explains in what I believe is some of the best business writing there is, the economic distribution of media production, the head, and the tail. And, as he admits, participates in both taking advantage of the tools and technologies that are available to all of us these days. The insights are extremely good and the analysis even better.
I have to say, though, that the book suffers from repetitiveness surprising for an editor and blogger of his caliber. It made me think that in his effort to produce a hit (which he did) he had to meet a number of pages goal so you get a bank for you buck. What saves the book is Anderson’s mastery of the craft. He is indeed an extremely good writer. Even when I had heard the story of the 4 million songs in Rhapsody maybe for the fourth time half way through the book , he managed to keep me going and I did not skip to the “meat of the chapter” like I sometimes (Ok usually) do with other business books.
Definitely a good read, insightful and highly recommended. I can’t wait to read Free (I did not mean “read for free”, although that wouldn’t be bad either)
Enjoy.

Microsoft launched Bing in June as a re-branded, fresher looking version of Live Search. This is one more of the so far fruitless efforts to make money in the fast growing search industry. Last year, right before the economic meltdown, a bid to acquire Yahoo for $40B failed (Balmer, Microsoft’s CEO is probably thankful for that now.) Bing launched as expected with a huge marketing campaign (maybe actually clever) that goes after Google, so far #1 seated and far, far from the other 2. Is the investment worth it and how long will it take to pay back?

According to Internet data firm StatCounter, Microsoft gained a point of market share of US searches right after its launch in June 3rd to around 8.23%. At the same time Google’s declined slightly (0.24% to 78.48%) while Yahoo remained almost flat at 11.04% . Interestingly, during the first week, Bing accounted for 92% of searches to quickly stabilize at around 8.23%. Interesting payback for an estimated $3B investment (so far) in search by the software giant. Although it might trend as a positive market share growth it is not clear how long will it take to move the needle on Microsoft’s earnings. According to Yahoo finance (interesting choice of source) was a staggering $17B in fiscal 2008. Compared this to a mere (yeah, right) $4.5B of Google in its fiscal 2008 it seems like a battle not only tough to win, but the prize may not be as expected, especially for share holders.

Think about it. Google’s 78% of the market represents less than $4B in earnings. If Microsoft reaches, lets say 10% (1/8 of Google’s), and assuming the same cost structure it will earn $500M (or a 3% earnings increase). Yeah, yeah, I know what you’re thinking. These numbers are bogus and the bet is on growth. Sure, but to make a decent move on MSFT’s earnings, let’s say 10-12% (or $2B) they will need 4 times more earnings, which will mean a significant market share gain over Google and a never seen before growth (the market doubling and their share doubling doesn’t seem plausible). If everything else remains constant, that will mean $2 -$2.5 share price increase. Whereas a market doubling and a 10% share loss for Google will mean, well a 50% share price increase (yes $200/share). Sure more bogus numbers since MSFT is trading at <14 times earnings and Google at almost 30 so the market has already factored in a faster growth for the latter. It still illustrates the point that Google is better positioned to profit from search than Microsoft even if Balmer succeeds with Bing. Keep in mind that updates on both Yahoo and Google are expected in 2009.

This brings me to the real point I wanted to make. We all tried Bing. A gorgeous site, looks great and it works great. But the results are the same if not worse as with the other two. So as creatures of habit, like all geeks and online shoppers are, we all went back to our comfort zone. We will probably keep trying Bing a couple of times and it will probably succeed in taking on Yahoo’s #2 spot. But it will take a whole bunch of billions for people to conjugate Bing. I don’t know about you , but being “googled” is a lot better than being “binged”.

Enjoy.