Googorola, a New Age in Mobility

August 20, 2011 by · 2 Comments
Filed under: Business, Technology 

GoogorolaWell, it certainly has been an interesting couple of weeks in the mobility  industry.  Lawsuits galore, HP punting on the Tab (and most likely the whole Palm acquisition), Google buying Motorola Mobility (Googorola?), rumors of iPhone5 getting louder, and other rumors that Microsoft is finally going to compete in the space.  And silently, well not so silently one by one the companies that started it all are being gobbled up.  New, 21st century brands, some that can’t look at hardware if it was staring them in the eyes are taking center stage.

When there are winners, there have to be losers, even in a rapidly expanding market such as this.  Nokia, the once titan of the category, that robbed market share from the inventors of cellular telephony (Motorola), although still #1 are now falling like a rock.  Palm, who arguably  added the “smart” aspect of smart phones by creating the PIM (personal information manager) elements now ubiquitous, recently bought by HP are now defunct and their legacy, sadly, may follow.  Research in Motion, RIM, makers of the ubiquitous executive gadget of Christmas Past are down to a meager 3% and declining.  While Google and Apple, who dominate the mobile Operating System market share see no end in sight.

Google’s acquisition of Motorola Mobility (MMI) brings to the table the largest patent dowry available:  17000 granted patents plus more than 7000 in process, including some unimaginable radio and communication intellectual property.  This not only gives Google the ability to counter the myriad of lawsuits that make analysts weary of the future of Android, but can actually put them in the driver seat if they weren’t there already.  Unfortunately there are always downsides to every upside.  In this case its in the form of a Taiwanese and 2 Korean companies.  Yes, you guessed it: HTC, Samsung, and LG.  These 3 plus Motorola Mobility are the main adopters of Android and responsible for Google’s rise to the top OS in this category.  Together they represent roughly 25% of the market or about the size of Apple’s iOS.

The question is, my loyal reader (singular), will they pick up their marbles and go home (with a layover in Redmond, Wa)? or will they trust Google to keep MMI running independently?  Yeah right!  Just like other things in life, some win, and some lose.  The ones that win by just waiting it out, Microsoft have a  real chance to become the third horse in the race.  Mainly because they will be the only remaining independent.  But with $53B burning their balance sheet, how long can they afford to stay that way?

Enjoy.

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Netbooks get a Chrome Finish

May 13, 2011 by · Leave a Comment
Filed under: Business, Technology 

When you Google “Netbook” you get thousands if not millions of hits.  The most optimistic ones predict the demise of the category.  Others make fun of the rapid growth and crash landing of it.  The remaining ones credit the iPad for talking over that space.  Google, in a traditional Googlesque move jumps in to redefine the category. hmmm.

Let’s recap.  Originally netbooks were small, light and only browser based.  They were the productization of Intel’s shinny new Atom processor, touted as a low power x86 that would allow powerful enough computers in these form factors with unmatched battery life.  They ran some kind of Linux (Ubuntu mostly), had a 7″ screen little memory, no hard drive to speak of, and a WiFi connection.  They would set you back $300 – $400.  Few bought them.  Microsoft, in a desperate territorial move, launched “Windows Starter Edition” at a significantly reduced licensing cost for OEMs.  The Windows netbooks were born.  Few bought them.  Then, OEMs in a smart move added up to 250GB of hard drive larger screens, more memory and a better keyboard.  Now they were selling them.  Unfortunately people bought them instead of laptops.  Wait … they were laptops … only cheaper.  Congratulations!  Microsoft and Intel had found a way to make less money with essentially the same product from essentially the same customers.  Not good.

Then the iPad was born.  Most techies entertaining to buy a low octane netbook either to substitute their aging laptop or as a lighter traveling device opted for Job’s money printing overgrown iPod Touch instead.  Why not?  a lot sexier, lighter, cooler, and just a little more money (there, among other things, relies the brilliance of Mr. Jobs).  So netbooks went into life support.  All OEMs are now jumping into the confused Tablet marketplace.  Apple, at the top, just laughs it out.

Where has Google been?  Well, Chrome is not new.  You may recognizer it from the fastest growing browser in the PC world.  Even as an OS it has been talked about for years.  But the world decided to focus more on Android since it is selling millions of smartphones and is sexier than a boring light OS.

But now  Google would launch the ChromeBook, a netbook with a twist.

Starting at a mere $379 with a $20 – $28 monthly fee on a 3 year contract for a WiFi cloud service. hmmm  again.  In this blogger’s humble opinion, my loyal reader (singular), what the … ?  Unless those cloud services are a real cloud or send you to the clouds using legal ways, I predict a disaster only rivaled by the NEXT computer.   I’m not ready to dump my iPad, at least for one of these.  And I don’t have a bag big enough for a fourth device.

The question is?  Is it a business model problem or a product problem?  Will you get one if you could get it for free and only pay the monthly fee?  Or better yet, what if Google can subsidize it 100% even the monthly fees to make money on advertisement alone?

And there, my fellow reader, among other things, rely the geniuses of Page and Brin.

Enjoy.

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Losers can get married too

February 13, 2011 by · Leave a Comment
Filed under: Business, Technology 

Have you ever seen a couple walking down the street, holding hands that make you think  that only they could have found each other?  That’s the impression I get when I see Microsoft and Nokia ink a strategic alliance.  Granted, that’s not quite a marriage, but more like dating.  Two of largest technology companies that arrived late to the smartphone party and who are struggling to remain relevant in the fastest growing boom in the Tech Industry since … well … ever, decide to join forces to battle Apple, Google, and their ecosystems.  A daunting task I might add.

This is the deal:  Microsoft has not been able to do anything good in the mobile world even after pouring millions (if not billions) of dollars.  And Nokia, once the giant to follow in the cellphone industry did not see the modern smartphones come.  Together, well, in this blogger’s humble opinion, is no better.  Nokia’s hardware, as good as it is, is just that: hardware.  They have never been able to stand out as a software supplier, areas where both Google, and Apple, the 2 leading forces in the smartphone world, excel at.

On the other hand, Microsoft has not been able to cut the cord.  Still the number one player, by far, in fixed applications, has just been a disaster in the mobile world.  Windows Mobile, arguably one of the first “smartphone” OS’s out there, did not evolve.  And Windows Phone 7, a great approach, is a classic case of “too little, too late”.  While Balmer, Microsoft’s CEO, brags about the eight thousand apps in WP7’s marketplace it remains at least an order of magnitude below iOS or Android.  Carrier’s have dozens of smartphones in their lineup already with access to these apps and users preference, either by cult or anti-cult.  NokiaSoft (or MicroNokia) will have to do the equivalent of pushing a herd of elephants up Mount Everest, one by one, without a sherpa, oxygen, and very little food.

In a letter to Nokia’s associates, Stephen Elop, Nokia’s CEO explained the transition his company will make to dump all activities on Symbian OS in order to adopt WP7 as its main smartphone OS.  I find interesting he used the analogy of a “burning platform” and how people do desperate things in desperate moments.  Kudos for admitting the desperate times and comparing a partnership with Microsoft to “jumping into the icy Atlantic”.  Although it may seem a bit too much, it is more like jumping into the icy Atlantic, naked, in the middle of the night, and picking up drowning friends, with luggage, on the way down.

Granted, these are both outstanding companies with a history of innovation and impressive comebacks (remember Netscape?).  But to pull this one off will require oodles of money, several miracles, outstanding negotiating with the carriers, and great, great products.  They’ve both done it in the past, but will they do it again?  But, given where they both are in this multibillion dollar market, do they really have a choice?  Maybe not.

So good luck in your marriage, hope you both keep your maiden names.  And please do not argue about naming the kids, hire professionals  instead.  Neither of you have a good track record there …

Enjoy.

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The Year of the Tablet

January 23, 2011 by · Leave a Comment
Filed under: Technology 

Well, apparently the whole world decided that it was about time for everyone to carry a 3rd device: a Tablet. You may know them by their more colloquial name “iPad”, which, as you know represents only 1 of the 100’s (I do mean hundreds) of such devices that will be in the market by the holiday season 2011. I had written before that I didn’t think there was a need for such a gizmo since people are already carrying too much technology with a laptop and a smartphone.  I was obviously wrong and the world does need those devices.  In fact I myself have 2 and are waiting for the third one, hopefully very, very soon.

The question is how many will survive in 2012 and how will they all differentiate among each other?  There are really 2 camps:  Consumer tablets (iPad and Android based), and everyone else.  I know, I know, RIM has one (the Playbook), Cisco (Cius), and Avaya (Flare) have one too, and maybe HP’s WebOS will be like these too.  But, I’m sorry, they fall in the “everyone else” camp.  Let me explain:

iPad and most Android tablets (Dell Streak, Motorola Xoom, Asus Slate, Samsung Galaxy, etc.) are designed primarily  for media consumption.  In other words to watch videos, read books and blogs, listen to music, etc.  The difference between iPad and all Android tablets is the obvious, but the uses are pretty much the same.  The “other three” are for communications.  All three companies have a great history of selling product to the enterprise and want to capitalize on the Tablet buzz. So they are tailoring them to be best for video communications, email, and those kinds of apps for people that are on the go.  BTW, where is Microsoft in all this?

Now, there is also a sub categorization of the consumer devices in iPads, “good” Androids, and 100’s of cheapo devices.  During CES, Motorola Mobility (one of the 2 siblings that came out of the mother ship Motorola, Inc.) introduced the Xoom, whose main allure was the introduction of Google’s new version of Android, Honeycomb.  Reviews were amazing, Honeycomb looks fabulous.  But every non Apple manufacturer in the consumer space will have access to it, so there will be competing head to head, the same way Android Smartphones do today.  But there will be 100’s of cheap ones too, based on Android, but not necessarily good.  When you take away the complexity of the phone, almost every manufacturer can build one, but few will be worthy of the Android seal of approval.  Those are the ones to look for.

By any measure, this is great since it will drive lots of product innovation, lots of choices, in a market with iDevices has been the only true alternative, but it will also drive commoditization.  Good for consumers, bad for the companies that will be competing.  Particularly great for Google who will see it’s new OS proliferate like the corn subproducts.  And more and more users will access the internet using a mobile via either Google’s Android or Apple’s iOS with infinite income potential for both.  And the competition between them will only get more fascinating.

How will everyone differentiate remains to be seen, but with the clever ideas on this post there will be room for plenty.  One more thought: Will this be totally incremental to the 600M smartphones supposed to be sold in 2012 or will it cannibalize it?  Quite frankly who cares?  There is plenty of pie for both.

So, my faithful reader (singular) wait for Honeycomb and run for your tablet or go buy an iPad now.  You will be glad you did.

Enjoy.

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RIM Passes the Torch

September 17, 2010 by · Leave a Comment
Filed under: Business, Finances, Technology 

Last year in June I wrote a piece about Research in Motion (Nasdaq:RIMM), maker of the Blackberry.  At that point the stock closed @ $76.55.  After a 42% drop is it probably time to cover our shorts to avoid a repeat of Palm?  After the latest results release, RIM showed progress on earnings, but decrease subscriber adds and more importantly is draining cash.  Being acquired seems to be their best option.  Not that there are dozens of companies with billions to spare on an ailing smartphone maker.  But it only takes one; and there is one who is also struggling to get a piece of the smartphone market: our beloved Microsoft.

Now why would Microsoft pay big bucks (really big bucks) for RIM only to combine a decreasing market share with an almost non-existent one, may I ask? I don’t seem to find the right answer.  I struggle with the idea on any synergy that the merger will bring.  RIM needs to invest to bring products up to par with Android and iOS based ones.  Their Acquisition of Torch Mobile (who brought you the Torch) was an attempt to do that but it seems to fall short: it is not a wow phone.  Even if corporate fans buy them, we’ve all seen Androids and iPhones show up in the enterprise and for the most part successful using them for the same applications.

At a first glance, the synergy seems to be there.  RIM’s corporate fans and huge installed base of BES – which happens to mobilize Microsoft Exchange for the most part – and Microsoft has been unsuccessful in bringing a decent smartphone to the party with their Windows Mobile, Windows Phone, and other inroads, but understand well how to sell to the average consumer.  Add a bunch of cash to mix and it is seemingly a marriage made in heaven. But not so fast, my fellow reader (singular)!  RIM’s market cap is in the neighborhood of $25B plus the typical premiums tech deals get may drain all of Microsoft’s cash.  Although it seems like a better investment than dividends or buying back stock it will probably not leave enough room to invest what it takes to win in this market.

Both companies need a miracle in the smartphone space.  But Microsoft has other legs in the stool, albeit declining too but at a slower pace. And most likely want to conserve some cash to maintain Windows and Office in the spot they have as well as their Bing and Xbox franchises.   Whereas RIM doesn’t have pagers anymore and more and more viable alternative devices are popping up in the market and making their way to the enterprise.  So while RIM passes the Torch (pun intended), Microsoft passed on the Kin and both are being left behind in the race.

Now, a 42% drop is good to cover our short positions because you don’t want to be that greedy, especially after what happened to Palm (which I predicted the exact opposite).  Nobody will blame you for covering in the vicinity of $45.  But, if you don’t believe in Microsoft’s acquisition:  short, short away till the cows come home or the stock dips another few bucks!

Enjoy.

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