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Two Recent Deaths in the Smartphone world. Long Live the Emperor.
Within the last couple of weeks two surprising deaths happened in the Smartphone world: Kin and Nexus One (direct from Google); both of whom I had blogged about before here and here. Similar to my predictions on tablets, the world has decided to make me look bad.
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.
iDon’t Flash, say the Steves
To start off with a cliché, it is true that “the enemy of my enemy is my friend.” But to have the Steves ( Balmer -Microsoft’s CEO and Jobs – you know who he is) agree on bashing a competitor is unheard of, at least for this humble blogger. Apple has been criticized not only for not supporting Adobe Flash video player in the iPhone, iPod, and iPad (i’Ve had it with Apple’s naming) but for banning apps that have their roots on it. To make matters worse, Silicon Valley’s more revered deity sent out a letter saying that Flash sucks – battery, that is, as well as making devices crash and causing other problems. Balmer agrees. They both are in favor of the open standard video version called html5 video.
Hey, we’re all for standards, even better if they are open, but is it realistic to essentially ban all Flash designed websites from your mobile iProducts? Microsoft definitelly adds some muscle to the fight, but Shantanu Narayen (Adobe’s CEO) got there first. An estimated 70% of websites with video use Flash. It has a great advantage over html5: it exists today. It has also a huge installed base, works across browsers, and makes it easier for non-geek developers to use. The question is: will the the explosion of browsers (especially mobile) makes an open standard needed even more? Indeed, but it will not happen overnight, even with the Steves’ weight behind it.
Claiming that Flash crashed devices and drains battery is a bit too extreme, unrealistic, and quite frankly arrogant. Not that there’s anything wrong with that. But when you consider that the iPad has a 6000 mAh battery compared to the 1200 mAh battery in the iPhone 3GS sure, I’ll give you 10 hours of video too! Simply put, battery problems are solved with batteries. You want more battery life? put a bigger battery in. Granted, it drives the device’s weight, but so does the display. Palm Pre, RIM, Windows Mobile (and soon Android) devices that support Flash lite are roughly the same weight than the iPhone, and crash just as often. Reality is, Flash provides the programmer control over the video experience and that makes Jobs angry. He wants to control it all! As per Microsoft’s motive? Well, it just sounded like a good idea to blame computer crashes on somebody else’s software for a change.
Flash’s biggest limitation is the lack of mobile platform support. It is a heavy weight platform that so far only works well on “big” desktop OS’s. There is a Flash Lite out there but it is not 100% compatible with all Flash’s features. But that will have to change soon, if Narayen wants to stay on top. But then again, with more powerful processors and graphics coming to a mobile device near you will make this limitation a thing of the past. In any case, it is this bloggers opinion that html5 video will eventually take over video on the internet. The timing is the unknown. But I don’t think one should start to short Adobe (ADBE), at least not because of Flash. Au contraire mon fraire, this makes them a pricey acquisition target for cash rich software companies.
Enjoy.
Palm got a hand
Well apparently there is some hope for the nearly dead. One more time I’m wrong and someone did find enough value for Palm, unlike I had predicted before. Although in this blogger’s humble opinion $1.2B seems a little excessive. Sure, HPQ has the cash to spare, but a Webkit browser on top of Linux does not take that much money. Granted Palm has a good device or two, but in this environment it takes more than a good device to unseat the emperor. I guess they’d figure they’d offer a sign-on bonus to Palm employees ($5.70 / share is a bit too distant to the $17+ back in October 2009) since they would really struggle to assemble a team like that on their own.
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.
Mobile OS Inflation
During this year’s Mobile World Congress in Barcelona, the world’s most important mobile trade show, everyone seemed to think that a new OS (Operating System) is the way to go. It is unclear to me what makes them think that.
First, I’m a bit tired of the overuse of the OS nomenclature. Few deserve this title since they are really adding proprietary layers on top of Linux. Actually most do, even the beloved Android and iPhone. They should all be called “platforms”. However that is not the cause of my outrage. No.
Second, who does the branding for these things? Symbian, Bada, MeeGo, Mobiln, MeeMo, LiMo, Else, and others in addition to the successful iPhone, RIM, and Android. My favorite name in a sarcastic kind of way will have to be “Windows 7 Phone Series”. Redmond finally got something that does not deserve bashing throughout the blogsphere – a la Vista – and decides to use it everywhere. I get it, kind of makes sense. But, my fellow follower (singular) Windows 7 has a nice ring to it. Windows 7 Phone Series does not, I’m sorry.
Third is that application developers have better things to do than to port their app to the “OS” of the day. And who is thinking about users? Thanks to this inflation you will have to scavenge the world to find the right app if you made the mistake to buy a platform that didn’t quite make it for whatever reason. Now that is an outrage, but not the point of my post. Suffice it to say that there will be plenty of casualties in these OS’s flood.
Amidst this Mobile OS inflation there is one that in my opinion deserves mention: MeeGo. Sure, the name sucks but I’ll have to give it some points for obscure geekyness. A shape-shifting 9000-year old alien from the planet Marmazon 4.0 has to attract the dormant or not so dormant geek in most smartphone users, from the Blackberry suits to the Android hoodys. Let’s just hope it doesn’t suffer the fate of the CBS sitcom who didn’t get the chance to finish a single season mostly because it wasn’t any good.
Anyway, MeeGo is worth mentioning not because of the fact that it is a joint venture between Nokia and Intel. MeeGo is a platform that promises to bring smartphones to the 2010′s by using an x86 architecture instead of the perpetual ARM. x86 architectures are ubiquitous in the PC world whereas ARM architectures have their humble roots in the embedded world (you know watches, sensors, WiFi radios, set top boxes, routers, cellphones – Ok, not so humble). ARM uses RISC – Reduced Instruction Set Computing – vs x86′s CISC – Complex Instruction Set Computing. This difference has allowed computers to run more complex software and algorithms so they can behave like, well, computers. ARM on the other hand is fundamentally more power efficient, which explains its huge presence in mobility.
Until now the lowest x86 has gone is Intel’s Atom family (which drove the netbook “revolution”). What is so new about the Atom family? Low power consumption in an x86 processor. At the same time, Qualcomm has been touting its Snapdragon 1 GHz+ Arm based systems – base for the reference design of my favorite name Windows 7 Phone Series – and now powering some “smartbooks” (again with the naming).
You see what’s happening under the hood? New product categories are being launched, OS inflation is flooding the mobile world but at its real core there is a tremendous collision happening. ARM getting more powerful while x86 is getting more efficient. This brings us back to why MeeGo is so significant for the industry.
x86 based phones are out there but none has really made a mark basically because they haven’t offered anything new. In this blogger’s very humble opinion if Nokia-Intel get it right (which is a big “if”) this could be the next revolution in mobility: the power of a real computer in the palm of your hand. With html 5, 4G networks, ubiquitous 802.11n WiFi, comparative shopping, location based services, “billions upon billions” of webpages, will now be available to complex software thanks to CISC based smartphones. By the middle of this starting decade we will all wonder what was the hype behind all these “clever-phones” that could barely browse the web. We will remember them as we now think of the first color Mac’s. Very cool but just a sign of what’s to come.
Enjoy.
Microsoft Getting Smart about Smartphones
Well, it was just a matter of time. PC World reported that Microsoft will announce its own smartphone in the World Mobile Congress in Barcelona this month. I guess the pandemic of iPhone envy is hitting everyone hard. This one promises to be interesting since it will allegedly be based on the Zune music player and the Windows 7 Phone platform. All good. Until now Microsoft’s strategy was OEM friendly. LG, Samsung, HTC, Motorola and others have introduced Microsoft based smartphones of varying success positioning Microsoft’s mobile OS as the 4th player (soon to be 5th thanks to Android) in the smartphone category (after RIM, Apple, and Symbian).
This strategy represents a hardware/software branded device from Microsoft in a sense competing with its own OEMs. All those companies however have not shown any loyalty to the Redmond folks since they have diversified or totally migrated to the Android platform. So I guess Balmer decided: Screw them I will go Google … sorry I will do like Apple … not really, I will do my own hardware and control my own destiny. Good move? We’ll see. But definitely not a bad one or a move that will damage any OEM relationships. The world is ready for a diversity in OSs and the smartphone category is the fastest growing category in the industry. Microsoft cannot afford to be the fifth.
The question is: Will this make a difference? Not likely.
Microsoft has by far the largest market share in the enterprise – with “big Windows”, not smartphones, that privilege belongs to RIM. It boasts millions upon millions of applications and it is the “standard” enterprise Operating System. These are not 99 cent apps, no! These represent real money for enterprises and Microsoft. A simple copy of Office may go for hundreds of dollars. Why? because it is the defacto standard (for now). The smartphone world behaves very different. With the exception of email and a couple of minor “connectors” to ERP systems there are very few apps for the enterprise. In fact Windows Mobile today has the largest number of enterprise ISVs (Independent Software Vendors) but they specialize in niche applications like inventory, supply chain, delivery, fleet management, etc. The devices these apps run on are not your typical HTC smartphone Fender edition but very specialized hardware made by Motorola and others.
The thing is: The Microsoft name, which carries a lot of weight in the enterprise, does not represent a mayority choice for the consumers as it does in PCs or in those niche applications. The perception of a “standard” OS with millions of applications does not exist in the Smarthphone world. There are millions of apps for several OSs, in fact lots of apps are available for most smartphone OSs (paradoxically Windows Phone is typically the last one to be developed). So my contention is that even if Microsoft comes up with a killer device it is an uphill battle to go after RIM, iPhone, Symbian, and Android. It may much better than OEM versions since Microsoft has intimate knowledge of hardware and software to make it so, but it will hardly take the world by storm as its competitors have.
Good luck Microsoft and thanks for giving us all something to write about and for another great opportunity for a clever Apple commercial. I’m sure there’s a map for that somewhere.
Enjoy.
Leadership is Execution
Although it may sound a bit cliche, the success of a company (or any enterprise for that matter) depends on its leadership. It not only depends on their ability to inspire action but also in the leaders’ ability to paint a picture that people can relate to. I recently bumped into a post by an ex colleague that clarifies the point very eloquently. He comments that leading visions must be clear, compelling, and credible for followers to act on them. I agree. However execution is a key element for any leader to succeed.
Continue …
Android’s ways to win over users
As well anticipated, and (may I even say) masterfully the Motorola Droid lunched yesterday. Besides its impressive spec it is really one of the first devices that can truly be considered smart, unfortunately it is mostly thanks to Google (author of the Android OS in which it is based) than Motorola, and the name Droid is really Verizon’s (it will launch in Europe with the lame – not a typo I did mean lame with an “l” – Milestone) . Other bloggers have said it falls short of a true “iPhone killer”. I don’t think it is really about that (in spite of the fact that it looks to be better than the iPhone – i happen to be an iPhone user myself- and on a better network – at least in the US). Of course, Motorola and others want to take away a piece of the Apple pie (I hate puns) but the Droid is really taking advantage of the growing pie. Smartphones is the only category of mobile devices that grew this year and it it expected (according to ABI Research) to triple by 2013 to (are you ready?) 650 million phones per year worldwide!! Thankfully in part to the variety in the marketplace. Each contender in this battle will appeal customers in a different way and their cultures are a clue to their methods and target markets.
Continue …
The battle for the Smart Phone is on!
The industry seems desperate to find an alternative to the iPhone so far with no success. Palm (the inventor of the category in a way) launched last week the “pre” a successor to the “pro” (pretty creative naming) that is supposed to be what we’re all been waiting for. Based on what Palm calls WebOS (do not try to pronounce it in Spanish) which is really a WebKit browser on top of a Linux kernel. It is to me just another “clever phone”, pretty well designed, but just a follow up.
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