Tagged: Apple

5 Predictions for 2013

2013It’s a new year, and with that is a fresh opportunity to throw out all sorts of predictions. Much of the logic behind these predictions is grounded in past events, so there’s a great chance I’m overlooking some valuable info (hey, I read “The Signal and The Noise”). Here’s 5 things I think we should all be on the lookout for:

  1. More political headaches caused by cliffs, deficits, partisanship, etc. We may have narrowly averted the New Year’s cliff, but with the debt ceiling debate coming in just a couple months, I predict we’ll see much of the same. Nevermind the 10 following months of the year where things will be largely the same. Good times ahead.
  2. Apple’s next big product launch will fall flat. iPhone 4S was a letdown. iPhone 5 was a good product, but an incremental one. Call it a hunch, but I feel like Apple is losing a bit of their “wow” mojo. Whatever they bring next – next round of Apple TV? iPhone 5S? – it will miss the mark.
  3. Mobile consumer health technology will deliver hugely in terms of functionality and interoperability. But despite all that, it’ll still be a niche market and we as a nation will continue our unhealthy ways. I hope I’m wrong on this one, but I don’t have high hopes.
  4. Tablet functionality will come closer to full PC replacement. Windows 8 tablets brought us closer with a more rounded out Windows experience, but we’ll see others catch up. This will cement the tablet’s position as the go-to computing device.
  5. Twitter goes public. And goes through Facebook-like turmoil as it adjusts to life where revenues matter. But in the end, like Facebook, it’ll be ok.

We’ll see in 365 days just how right I am.

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RIM Gently Shakes Things Up

I’ve long been critical of Research in Motion’s inability to keep its Blackberry brand and ecosystem on par with Apple and Android. So I was pleasantly surprised to wake this morning to news that its co-CEOs, Jim Balsillie and Mike Lazaridis, had resigned. Now, I never like to see anyone lose their job – let’s face it, that sucks – but this is clearly a case where enough time had lapsed and things were still going in the wrong direction. From a bungled tablet launch to its lagging OS upgrade, RIM is dangerously close to suffering the same fate of Palm.

But here’s the problem I have with this. New CEO Thorsten Heins has the chance to come out guns blazing and really generate some excitement around this stagnant brand. He has the chance to wipe the slate clean and buy RIM some time to work out its internal kinks. Instead his first words make him look like a new batch of the same dish: “I don’t think that there is a drastic change needed.” Really? Are you sure about that?

Would RIM have been better off bringing in someone from the outside rather than promoting the next guy on the org chart? I know they’ve been very guarded about the company and like to keep things within, but this called for a bit more of a shakeup than this. I have no idea how Heins will do or what he has planned. Maybe it’ll be great. Maybe it’ll turn the company around. GigaOm’s Ryan Kim put it best: “Yo RIM: Where’s your sense of urgency?”

It’s very easy for me to criticize from the sidelines. So I’m going to offer up my very basic thoughts on where RIM should go.

  • Court hardware developers. RIM’s last few attempts to breathe life into its handsets have been met with tepid responses, at best. Incremental changes aren’t going to match up against the mighty iPhone. Let others build the hardware and instead focus on the software.
  • Work the enterprise. Enterprise customers are still the bread and butter – better not lose them to Apple and Android. RIM needs to put a full court press on to make sure they keep a tight lock on this business.
  • Open the app ecosystem. Biggest problem for smartphones not running iOS or Android is the app ecosystem (just ask Windows). If you can’t convince developers that Blackberry is viable platform, open it up to Android (even temporarily). Face it, if you don’t have apps, you don’t have customers.
  • Integrate the tablet. Biggest problem with Playbook has been the lack of a native e-mail app. Why on earth would Blackberry, the mobile e-mail king, push out a product that lacked this feature? Gah, and why would you not tie the Playbook seamlessly to everything else made by RIM? You can’t develop products in silos – again, look at Windows for how platform integration can achieve something new.

I still think RIM can be a player in the mobile business. I think they have a much better position than Palm did, so I don’t see a similar fate. But, I think Microsoft finally has some good momentum with Windows, which could be the biggest threat. Right now iOS and Android aren’t going anywhere, and this market may not be able to hold more than 3 main players. RIM has some good pieces, but it has to get off its stagnant trajectory and seriously change course.

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What’s the Difference Between Companies That Change Course Proactively vs. Reactively?

It’s inevitable that as markets change, so too must companies evolve. Some do it seamlessly, adapting to changing consumer demands while maintaining their core vision. Some flounder, unable to adjust and end up losing share to upstart companies, sometimes never to regain their prominence. Can you predict what companies are likely to fall into each bucket? I’ll go through a couple recent examples to see what the main difference is between a company that does it right, and one that has more trouble. 

I’ll start with the company that has done things less than perfect: Research in Motion (RIM). I’ve written about RIM before, so I won’t rehash all the problems they’ve had over the past year or two. But essentially they’re a classic case of a company that couldn’t adapt their smartphone business to a consumer focus away from their business focus. They gave half-hearted products and couldn’t adjust quickly enough to fend off the likes of Apple and Android.

Then we started seeing signs that they were adjusting. RIM announced that their tablet Playbook would support Android apps. This allowed them to leverage the huge community of Android apps/developers so that Playbook wouldn’t be hindered by the slow ramp up of its own app ecosystem. Could this be the first step toward jettisoning their own OS and becoming an Android user? Maybe, but I doubt it in the short term. The other big news is that RIM will allow its Blackberry Enterprise Server to support iOS and Android devices. For fear of losing their valued corporate market to other devices, this at least keeps them tied in on the service end (potentially even more lucrative long-term).

RIM may never regain the market leadership they once had, like Palm before them, losing ground to more agile competitors, but they’re taking smart, measured steps to buoy their handset business by opening up their model to be more flexible in today’s environment.

A company I feel is doing some very interesting things ahead of the curve is Visa. In an article about Visa’s digital wallet efforts (another topic I’ve written about here and here), Jennifer Schulz, who is in charge of innovation at the company, said they “increasingly view itself as a technology company that is enabling commerce.”

How great of a statement is that? Here’s a financial services company that works with banks and merchants to enable people to purchase items that has really turned that idea on its head by investing heavily in technology to enable that to go further than ever before. As electronic payment is becoming the norm, Visa is not just enabling simple online transactions, but is pushing the boundaries of how a transaction is even carried out. Once mobile phones fully integrate NFC technology, the application of that will be limitless and has the potential to allow people to make payments in all kinds of ways.

The point is, Visa is leading this technology change (admittedly along with some other companies) rather than playing catch up as RIM is. A huge, established company with incentive to maintain the status quo is instead pushing the banking industry, the retail industry and consumer behavior to places it hasn’t been.

I don’t claim to know everything about Visa’s business, but I have to give credit where due (no pun intended) and say that this is the kind of forward-thinking that keeps companies going. Had RIM seen the writing on the wall and put forth a better consumer product, or had they released the Playbook sooner, maybe they could have avoided the trappings they fell into. It’s very easy for a company to rest on what it’s successful with currently, and much harder to change course while things are good and make bets on what may be big tomorrow. The ability to do that, and the, dare I say it, balls to go for it are what separate the longstanding companies from the ones that die out after a cycle or two.

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What “I’m Sorry” Can Do For a Business in Trouble

I’ve been following the mobile/tablet industry pretty closely lately primarily because we’re seeing quite an aggressive shakeup as companies, platforms and entire ecosystems vie for an increasingly competitive market base. We’ve seen the mobile legacy companies like Motorola and Nokia struggle, outsiders like Apple and Google establish dominance, and others with varying degrees of struggle/success. But perhaps none of have been more interesting to me that Research in Motion, makers of the smartphone pioneering Blackberry (sorry Palm).

When the smartphone market really started to take off, RIM seemingly had the inside track based on the inroads it made with the business segment. However, as soon as Apple entered the fray with the polar opposite product line directed squarely at consumers, RIM has floundered all of its attempts at competing in that segment. And after its most recent quarterly earnings, most seem to have written them off.  But for a company that’s still selling millions of phones, what’s the best course of action to right the ship?

One of RIM’s co-CEOs took the road less traveled and issued an apology for his company’s less than stellar timing around its products. Particularly citing the tablet market and their long delayed Playbook tablet finally seeing the light of day, Mike Lazaridis said:

“If you want an apology for being late on some of our products, I can give that to you… If we could go back in time, maybe there are a few things we could have done differently….But we did our best, we really did….The world is changing and we’re doing all we can to prepare RIM for it”

Why is it that companies are so loathe to apologize when they make mistakes? Most take the path of Blockbuster (an extreme example), and basically lie to your stakeholders. So does the apology make up for missing expectations, or not keeping up with product innovation? No. But does it help me to think that the management team isn’t completely clueless? Yes.

Admitting mistakes is a key attribute for managers to be able to demonstrate not incompetence, but perspective. If RIM continued the party line of trying to convince everyone that things were ok when it was plain to see that they had taken missteps, that would’ve led the average person to the conclusion that they didn’t know what was happening around them. But to admit that there were things they could’ve done better, to appear to be actually analyzing their business as an unbiased outsider would, shows merit in that it breeds confidence in the current leadership group. Will it immediately help their share value? No. But it might be an early step to re-endearing the company to both the general and investing public. Not that I’m an investor in RIM, but I feel just a bit more confident in the company.

Does this mean we’ll see a rapid deployment of products that rival or surpass the best offerings from Apple and other manufacturers? No. But it leaves room for hope, and when faced with a tough situation like RIM is, you can’t ask much more from a simple remark from a CEO.

 

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Tracked By Your Smartphone

This week Apple has been on the hot seat because of tracking data stored on users’ iPhones. Data for a year would be stored on individual phones that synced to PCs (and back to Apple). Google does the same thing. Apple has officially come out with an apology/explanation and said it will right the wrong. But the real question is, is this as bad as it seems?

The corporate line is that this tracking data is stored in order to provide quicker geo-location support for apps that use the technology. Essentially, traditional GPS is too slow, so the phone relies on cell towers and wi-fi hotspots to triangulate location. Fine enough. But the problem for most seems to be the year-long record of all location data. And that someone else could conceivably see it. Gasp! I’m not saying that privacy is a trivial matter. It’s not. But let’s face it – as a society we long ago gave up the right to complete privacy the second we started plugging into the network. Cell phones have always been able to track location. Facebook and Twitter are integrating it into their platform. Hell, Foursquare is built on location.

Now the question seems to be, where do we draw the line? Are we ok if a company has our data, but only for a short time (i.e. a week vs. a year)? Or are we ok as long as we never hear about it (like if nobody ever found that iPhone file)? Or will this be the catalyst for new laws to govern the use and retention of location data?

I have a hard time believing location data will continue along unchecked by some sort of regulation, but I also don’t see it needing to be guarded along HIPAA lines. My guess is the resolution will be not very far from what Apple has voluntarily done. Some sort of regulation stipulating the length of time location data can be kept, what it can be used for, and only that de-identified data can be used.

The other big question is will this result in any consumer backlash to smartphone and other technology? The answer to that is a resounding no. Unfortunately, we want to have our cake and eat it too. We want all the benefits that location data enables, but we don’t want anyone to be able to access that data. Don’t expect a slowdown of smartphone adoption, or Facebook use, or anything else. That’s all here to stay, which is why I think we’ll ultimately get some legislation around how this data can be used. That’s why Senators Kerry and McCain have proposed an online privacy bill.

Overall I think this will turn out to be productive. May it be more restrictive for companies? Sure. Will it help engender consumer confidence? Perhaps. Ultimately this will benefit both sides and we’ll actually see more legitimate and useful uses of location-based and other data.

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Why I Chose iPhone Over Android

This past weekend I was finally due for a phone upgrade and I was anxiously awaiting the day I could jettison my decent yet outdated LG Env3. I’m a Verizon subscriber, so entering the smartphone arena meant one big choice: iPhone or Android. Tough call really, and for a while I was leaning towards Android. But in the end, I chose the iPhone (and contrary to what many may think, that was a tough call for me).

I do a lot of research before making a big purchase. A lot. Ask my wife. She hates it. This was no different, and I learned the ins and outs of all the phones on the market. And what I found was that I was really drawn to Android, and I thought the current generation OS and its overall direction were really appealing. Most specifically, I loved the HTC Incredible. A nice 3.7 inch screen, good UI and responsive touch screen. The only big knock against it was the battery life. But I figured I could live with that. But then CES happened and all the soon-to-be-released phones started capturing attention. And poor HTC Incredible was about to make way for the Droid Incredible 2. Very nice, I thought, an updated version. All the specs seemed about the same, except it would have a 4 inch screen. Hmm, that’s a little big, I thought. In fact, all of the upcoming Android phones had minimum 4 inch screens. Uh oh, is this where the trend is going? Giant phones that are really more like mini tablets that no guy could actually carry in a pocket.

And therein lies what I feel is the big differentiator, and that which distinguishes Apple from all other tech companies. While HTC, Samsung, etc. are fighting it out for the best spec sheet, Apple is quietly moving millions of iPhones – virtually the same iPhone it launched 4 years ago – simply because it’s nearly a perfect device. Its screen size is compact, yet the display is crisp. Its UI is simple and responsive. And frankly, if I’m going to spend $200 (plus another $30 per month for the data plan), I might as well spend it on the best device with the most complete ecosystem of apps. I’ll admit, part of the draw of the Incredible was that I could get it for at most $100. Why would I hold out for the Incredible 2, a phone that I feel is too big, and pay the same price as I would for the iPhone? And why would I pay $250 for a behemoth like the HTC Thunderbolt? I don’t think 4G is worth it enough to carry that brick around.

Look, some of these phones are great pieces of technology. But, where they fall short is combining great specs in a mobile package. Clearly I may be in the minority on this, as the 4 inch display seems to be a good point for most people. But I worry that we’re trending towards larger screens being the norm. And for those that stream a lot of video, that’s probably a necessity, but for me, that’s not the case.

I’ve focused quite a bit on the display size, and while that’s an important element, I don’t want to give the impression that it was the only factor. Here are the top 5 reasons I chose the iPhone over Android:

  1. Size (I just said it wasn’t the only factor).
  2. The ecosystem – As much as Android has legitimized itself as a competitor to Apple, there are still some issues. Malware attacks, no Netflix app – these are important considerations.
  3. Price – iPhone is top of the line, and there’s no reason I’d pay the same or more for anything else.
  4. Durability – I don’t mean in the physical sense, but I mean in the I-won’t-regret-this-purchase-next-week sense. If I bought Android, in a couple months, the next iteration of phones would come out and I’d be rocking the obsolete device. With the iPhone (and the many iPhone 5 delays) I know that what I have won’t be drastically different from the next iteration. I can live with that.
  5. It’s a pretty badass piece of technology. And sometimes the cool factor wins out.
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When Will the Mobile Wallet Become a Reality?

If ever there was evidence that mobile technology is perhaps the most important medium, it’s the potential for widespread adoption of mobile payments. Integrating credit and debit payments with smartphones has the potential to shift the balance of power from banks to wireless carriers in a market that generates billions of dollars in revenue from fees per transaction.

So why does this matter to the average consumer? Well, as the playing field widens and new stakeholders jockey for position in this market, there’s a couple of things that could happen: 1) overall dilution of profits from transaction fees (fine for the consumer), or 2) an effort to expand the pie from which these new entrants can take, resulting in increased fees (bad for the consumer).

Right now at the center of it all is the technology—near-field communication (NFC)—which is starting to be incorporated into some Android phones. And the next step will be the banking system and retailers developing the technology for the other end of the transaction, either kiosks or terminals at the point of sale to accept the transaction.

So we have banks, retailers, wireless carriers, device manufacturers (including Apple), payment processing services (including PayPal), security companies (don’t forget that), and I’m sure many others vying for their place. That’s a lot of players. And they’re already starting to team up. The wireless carriers have joined forces to standardize the mobile wallet in the form of Isis. The banks are working on MicroSD technology to enable payments. Apple may make the next generation of iPhones NFC compatible, though in typical fashion they are staying relatively quiet on the subject. Google is pushing retailers to adopt the technology, and legacy point of sale technology companies like VeriFone are trying to evolve to maintain relevancy.

With all this moving and shaking, when can we expect to ditch our plastic and bask in the convenience of waving our phone and paying our bills? Given the long list of players and what’s at stake, I don’t see this getting worked out for quite some time. Since the NFC technology is already being used in some mobile phones, perhaps we’ll see certain retailers pair up with a company like VeriFone to develop the back-end technology. It still doesn’t clear up who owns the transaction, but may spur mainstream uptake. Either way, it’s likely to be a slow rollout process.

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Netflix Poised to Be the King of Content

Big news for Netflix – it owns the streaming movie market and is also angling for unique content. At 61% of the streaming market, Netflix is blowing away the competition that includes Comcast and Apple, among others. So it would seem natural that it would want to grow the market for streaming video and one surefire way to do that is to license content that nobody else gets.

Therein lies the premise behind its negotiations to bid on the rights for House of Cards, a remake of a BBC show starring Kevin Spacey. If networks are going to charge exorbitant fees and be a general pain in Netflix’s butt, then they’ll cut out the middleman and own the content themselves.

Of course, this premise is betting heavily on the assumption that digital-only content will have appeal to the mass market. Rumor is that the Netflix bid for the show is upwards of $100 million. I haven’t done a deep dive into the numbers, but this seems awfully high. For $100 million you better hope that this show is bringing in a serious amount of new subscribers. At $7.99 for the streaming subscription, they’d need over 12 million new subscribers to break even. Considering it’s hovering around 20 million subscribers right now, it’s hard to believe that streaming alone will increase its base by over 50%.

Even with that said, I think this is a really smart, forward-thinking idea. Streaming is definitely the wave of the future, as hardware and capacity evolve to meet those needs. And with all those competitors I mentioned earlier (plus likely many more to come), the streaming aspect of the service will quickly be commoditized. What matters then? Owning the content of course. So if Netflix becomes a media provider, rather than just a conduit, it’ll eventually be in the position its fighting against right now, able to dictate licensing fees to its competitors. Sounds just crazy enough to work.

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Why Apple Will Maintain Tablet Leadership

It’d be an understatement to say that this year’s CES conference was marked by the explosion in tablets. Dozens were unveiled at the show, each proclaiming its challenge to the iPad throne. And yet, nearly two months later, it appears there’s no suitable counterpart to Apple. Who are the likeliest of competitors? Motorola and it’s price-inflated Xoom? RIM’s Playbook? HP and its webOS tablets? Dell Streak? Samsung Galaxy? We know it won’t be anything Windows 7 until 2012.

Seems like there’s plenty of options that will be hitting the market soon, and maybe it’s too early to tell, but why does it seem that none of them will put up a fight? The biggest issue I see takes us back to the days of iPod versus all the other mp3 players. iPad is cooler than everything else, and that’s why people buy it. Yet, competitors market their products (and price them) based on spec. It’s a classic form vs. feature battle. And in this case, as is often true, most people don’t care about what’s under the hood.

This point is nailed home with Motorola and its $800 Xoom price tag. Case in point:

“Alain Mutricy, a senior vice president for mobile devices at Motorola, defended the pricing of the Xoom, pointing to the tablet’s extensive memory, high-resolution display and compatibility with Verizon’s 4G LTE network”

Motorola thinks it can price its device relative to the processor speeds, memory, etc. Basically, all the stuff the average consumer doesn’t care about. Especially in an environment where the iPad is the default tablet, why would someone pay more for something that doesn’t have the allure that the iPad has? Sure, the technophiles might parse the specs and choose Xoom over iPad. But most won’t.

A lot of times marketers, especially those in technology, view their products as black and white – my processor is faster than your processer, therefore my product is better. Customers, however, are a lot more fickle than that. Maybe it’s a slight design element, or the brand connotation – regardless, something drives buying behavior that isn’t always linked to features. It may be irrational, but it’s the way things work. So when Motorola tries to defend its pricing model against a more flexible (surprisingly) approach from Apple, and arguably a better overall product from Apple (think App store), what gives?

It’s obviously way too early to draw conclusions as to how the tablet market will shape up. This technology will be huge in the coming years, and a lot will change over time. Look at the similarities in the smartphone market: lots of players, many operating systems, high initial price points, etc. What happened? The OS landscape narrowed (iOS and Android supplanting RIM, Windows and webOS). Carriers played a huge role in hardware availability and cost. Will this happen in the tablet market? Perhaps, but the marginalized role that carriers play will make it that much more important for Apple competitors to compete on the same level. It will definitely be an interesting 24 months.

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Do Microsoft & Nokia Stand a Chance Against Apple and Android?

Last week amid the hype around the Mobile World Congress, a curious announcement was made about a strategic mobile alliance between Nokia and Microsoft. Nokia is abandoning its Symbian OS and putting all its weight behind Microsoft’s Windows Phone 7. Predictably the internet was abuzz, some more positive than others.

Whether it turns out to be a success or failure, Nokia made a bold strategic decision, and it was entirely necessary. Nokia may be the world leader in sales by volume, but it’s near the bottom in terms of innovation. Selling lower end phones (or poorly made Symbian “smartphones”) may have worked before, but as the market shifts to being software-focused vs. hardware-focused, they had no choice but to attach themselves to a leading OS. Some might argue that Microsoft isn’t there yet (and they certainly aren’t), but they’re a formidable player and likely will be for the foreseeable future.

But why not Android? It’s the OS market leader. It’s the only true iOS competitor out there right now. Sure, it’s crowded with other hardware players like Motorola, HTC, LG and Samsung. And Motorola has already come out and said it wouldn’t use Microsoft. So it would seem the writing is on the wall.

I think what Nokia is doing here is betting big. Sure they could churn out Android handsets and compete in a rapidly commoditizing ecosystem. Or they could gain the inside edge with Microsoft in developing an ecosystem that more closely resembles what Apple has built with iOS. This signals to other handset makers that Microsoft won’t put the same level of marketing resources behind anything not labeled Nokia, giving Nokia a near monopoly on Windows Phone hardware.

Battling with arguably more innovative companies in the Android scrum? Or immediately becoming the crown jewel of the Windows phones? Well, that all depends on what kind of market penetration Microsoft can attain. Sure, Windows Phone 7 looks a heck of a lot better than Windows Mobile. But can they ramp up development and not only get the phones to stores but stay ahead of the innovation curve? Neither company has a strong history of doing that (they’re notorious follows).

And where is the mobile OS landscape going to shake out? Apple isn’t going anywhere. Android has enough market share and developer commitment that it’ll remain a force. RIM is on shaky ground, but there is a devoted user base and corporate America still loves their Blackberries (despite the slow creep towards Apple). And RIM is likely to open up its hardware to Android apps, which could breathe new life into it.

But can a fourth OS survive? That’s debatable. I can’t count Microsoft out. And Nokia is probably the best partner for Microsoft because of the global share it can gain. But I feel like one of these players is going to falter. RIM will be marginalized, but live on with Android software support. Android and Apple are on the cutting edge. Microsoft and Nokia are fast (or slow) followers, not on the bleeding edge, which makes me think they’re the ones that’ll be left behind. It’s a long road, and Microsoft has barely entered the fight yet, so the next couple of years will be an interesting jostle between these companies and the developers they court.

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