Category Archives: iphone

Winning the long game, Microsoft, Nokia, and Windows 8.1

2008_nov_windows_1_0The release of Windows 8.0 was a bold statement about the future that I agree with. The future of computing is touch screen devices with optional keyboards. And that an operating system that can make both work will win.

At some level, there is a large group of smart folks who disagree with the idea that the square can be circled, that the future is discrete distinct devices with keyboards dying a slow miserable death.

The challenge is that the majority of work is data entry. A keyboard is used for most data entry. And the most efficient typing device is a mechanical keyboard.

So the keyboard will continue to have a place in the market.

In this future, an operating system that allows both touch and keyboard data entry allows application developers to decrease their R&D. Instead of trying to build two distinct applications one for touch and for keyboard, they can think of touch and keyboard as two distinct views into their same underlying application.

And it is that reduction in R&D that will make keyboard + touch screen devices win out. If you make it more efficient to build  solutions, then the cheapest solutions to build tend to win out over the long term. And if you are Microsoft you can burn through cash to win in the long haul (BING!)

And that brings me to Windows 8.0. Windows 8.0 sucked and was awesome at the same time. Windows 8.0 was awesome because it absolutely nailed some of the frustrations around windows and app discovery and it definitely got me wishing for a touch screen on my laptop. Windows 8.0 was horrible because there were so many distinct usability flaws. For example, the fact you had to use the keyboard and the mouse to find an app, the annoyingly difficult ability to get the search icon, and I could go on.

Windows 8.1 is an incremental improvement.

And that got me thinking about Windows 1.0. I am certain when Steve Jobs saw Windows 1.0 he thought: nothing to fear here. And I am certain the UNIX guys saw Windows 1.0 and said: Nothing to see here. And then Windows 2.0 shipped, and still nothing changed. And then Windows 3.0 and it almost got usable. And then Windows 3.1 and the world finally tilted in Microsoft’s favor.

I have a strong belief in the value of incremental improvement winning out over magical product discovery. And Microsoft has always nailed incremental product improvement when they are moving in the right general direction.

The improvements in Windows 8.1 are noticeable. Is it a great product? No. But it took Microsoft 7 years to build Windows 3.1 and it took them 15 years to get to Windows XP – and that was the first version of the OS that actually worked.

So what can get in the way?

The real challenge for Microsoft is not that the path they are on is wrong. The real challenge is that from 1985 to 2000 Microsoft was the destination for the best and the brightest in the tech industry. The question is whether they can continue to attract the best and the brightest who can build that transformation…

Not dead yet.

In 2007 I bet that Nokia could figure out this iOS thing. And I was wrong. Nokia spectacularly failed to recognize the disruptive nature of iOS, sat on their lead and is now trying to tell us that they are not dead yet. I figured that with all of those resources, a competent CEO, a competent CTO and a strong technical team would seize the moment and realize like the British did with the Dreadnought that everything had suddenly changed and their lead had evaporated. And, without a shadow of a doubt, their CEO was incompetent and their technical team for all of Nokia’s incredible technical talent was unable to react to the iPhone.

Success or failure, ultimately is a function of being able to attract talent, point them in the right direction and have the ability to course correct over time. For Microsoft, the direction is right, the ability to course correct was demonstrated, now all that remains is whether they can attract and retain the talent to win.

 

Perhaps Nokia has chosen not to die

Nokia’s irrelevance in the smartphone market, their inability to deliver a usable UI for their new touch screen gadget, and their ongoing inability to create an application ecosystem around the single most popular OS in the cell phone market has made me wonder if they are headed into oblivion.

Or at the very least, whether their role in life is to be displaced by a Chinese or Taiwanese cell phone manufacturer who figures out how to make really cheap and really reliable devices for the masses who just want to make a phone call.

But perhaps they’re not dead yet:

Microsoft Corp said it will announce an alliance with Nokia on Wednesday, likely unveiling plans to make the software company’s Office suite of applications available on devices made by the world’s top cellphone manufacturer.

http://www.reuters.com/article/technologyNews/idUSTRE57A60P20090812?feedType=RSS&feedName=technologyNews

In spite of the efforts of Google and in spite of the claims by the Mac phone boys, Office is the single most important set of applications for smart phones. The fact that Windows Mobile has the only workable implementation continues to make it a contender.

This can only help both MS and Nokia.

Apple has learned nothing and neither have their fan boys

Over the last 30+ years, what has become apparent is that it’s all about the applications and not about the hardware.

In the 1980’s Apple pissed away it’s lead because it never knew how to court developers the way MSFT did.

And in the cell phone market, Apple has shown how to make a market for applications, and MSFT intends to demonstrate that they know how to make money for application developers and how to treat application developers.

http://www.businessinsider.com/reality-check-most-people-dont-care-about-how-apple-treats-developers-2009-7


The good news for Apple is that the reasons this backlash exists are completely meaningless to most normal people. That doesn’t make it right. But it should not affect peoples’ purchasing habits or their enjoyment of the iPhone’s standard features.


So it goes.

20 years ago the importance of applications was lost on Apple. More importantly the importance of a rich development community, and apparently 20 years later, the lesson is still lost.

And the new smart phone champ is the Nokia E71

Oh my God.

I have been suffering with the my ATT Tilt, henceforth known as the, Piece-of-shit Cell Phone.

I had no idea how bad the experience was. Well maybe. My wife would sneer at my bumbling attempts to do anything with one hand, the absurdly short battery life, the large but mostly useless keyboard, but I faithful to the Microsoft cause stayed the course.

No more.

I am in love.

The E71 battery life is ungodly. No, I don’t do it justice. It’s Phelpsian.

The one-handed use of the phone is Boltian. Try to use an iphone or windows mobile with one hand. Go ahead, try it. Even better, try using an iphone with one hand while holding groceries at the farmer’s market. I defy you to try it.

Failed, didn’t we?

Still trying to figure out where the “slider to turn it on” is? Still trying to figure out where the number 5 is on the keypad, aren’t we?

And the keyboard. Oh that keyboard.  I have these huge fingers, these ridiculous, stubby fingers that my genes bequeathed to me. And yet this keyboard works. Reviewers who tell you that the keyboard is too small are weak-willed, sniveling, cover-your-ass types who can’t admit that the keyboard works for people with big-hands because they feel they’ll sounding like Nokia fan-boys. This keyboard works for me, and I have hands that are ~12 inches from thumb to pinky, and approximately ~10 inches from the base of my palm to the top of my index finger. And I am not known for my dexterity.

And it’s even stylish. Yes, the Finns have made a stylish phone. Unbelievable perhaps, but true.

And of course, since it’s a Nokia phone, the audio quality is surreal, the device will only break if you throw it under an on-rushing train and frankly it just makes you good holding such a well engineered device.

Okay it’s not a perfect phone. The darned software doesn’t match the glorious experience of the phone.

For the corporate world, you really need Goodlink to be happy and unless you are willing to endure some entertaining phone hacking you’ll have to wait for Goodlink version 5.0. You do need to buy a whole bunch of software including an IM client.

And the S60  need a fair bit of customization until the UI experience is usable.

And yes, the iphone user-experience with two hands is superior.

But oh-my-God, I am in love.

gPhone: Google’s capitulation?

The recent announcement by Google around the gPhone has been portrayed by the press as a game breaking move. That somehow a new free OS that is customized for cell-phones somehow, once again, changes everything. And that more, to the point, that was Google’s plan.

I disagree. In fact, I believe Google had grander ambitions, those ambitions proved too costly, and that the recent announcement was an admission that those plans were shelved. And that Google was signaling to the cell phone carriers that they were going to play by their rules.

Hence, the blog title: Google capitulation?

Here’s what I think:

Google’s management team correctly observed that the future of search was search on the cell phone. And that location based search on a cell phone was going to be a tremendous revenue opportunity.

The challenge was that the current cell phone carriers act as tax men. You can’t sell a service without putting the service on a cell phone that the carrier sells. And the cell phone carriers themselves had ambitions on how exactly those advertising services were going to be delivered.

But why would the carriers be any different than MS and Yahoo in their ability to compete with search?

Unlike Microsoft and Yahoo, the cell phone carriers thanks to their connectivity to customers through Yellowbook, and the fact that they sell phone numbers, have the sales force, and the business process to create a real alternative local search advertising market.

So if you’re Google, and you have more money than God, you think outside of the box. If the problem is that the cell phone carriers control access, you need to create a new network that does not have the cell phone carriers acting as the gatekeepers.

To do that Google needed three pieces:

  1. A network that could carry phone calls that was not owned by the cell phone carriers.
  2. A set of devices that would connect to that network
  3. A set of compelling services that would cause people to select that network.

So what was the plan?

Let’s look at them in reverse order. For (3) Google was building it’s own applications, and then buying startups that offered innovative cell phone services. For (2) Google was working on an OS and reference platform. And for (1) Google had a three pronged strategy. The first was to build Metro WiFi like they did in Mountain View and San Francisco. The second was to bid on the wireless spectrum and either build or lure someone to build the network. Third was to create a regulatory environment that would allow other virtual carriers to build their own networks.

I believe that the cost of (1) became prohibitive along two dimensions. The first was the sheer dollar cost to build. The second was that while Google was building out it’s competitive network, the existing cell phone carriers would treat Google and their software as enemy number one. In many ways, the Google move might force the carriers to embrace Microsoft and Yahoo. The potential loss of revenue while the network was being built out and the cost of the network just made the strategy impractical.

Confronted with this reality, Google scaled back it’s ambitions, and like a researcher who has failed to prove something significant, they looked for pieces of that strategy that were still valuable and tried to get some value from them.

And that’s what the gPhone announcement is about. Unlike every Google announcement in the past, Google was announcing vapor. Nothing real, no product, just a statement that the grand cell phone strategy was about releasing a free OS to cell phone carriers.

With that announcement Google was signaling to the cell phone carriers that their plan was to play by their rules. Like Microsoft, Blackberry, Nokia, Palm and Apple they were going to release an OS, that the handset providers could port to their devices, that the cell phone carriers could certify and that Google would continue to be a software provider into those walled gardens.

Google was no longer planning to build an open, unwalled garden.

Google capitulated to the existing market reality. Perhaps we are seeing the limits to even their ambitions?

iPhone: The greatest cell phone browser ever?

Just the other day I was futzing with the Nokia N95 web browser and discovered that it had several features that were similar to the iPhone. For example the N95 has a mini-map:

s60_mini_map.gif
and the time-travel feature:
s60_time_travel.gif

I was intrigued. I checked out the relative Apple and Nokia corporate web sites and discovered that the touted features were in fact identical. So I set out to discover the source of the similarity.

Now it turns out that both Nokia and Apple in 2005 had agreed to partner on building a web browser based on Safari:

Nokia has announced that it using open source software in developing a new mobile Web browser for its Series 60 SmartPhone — and that this has been developed in cooperation with Apple.

The Series 60 browser will use the same open source components, WebCore and JavaScriptCore, that Apple uses in Safari that is based on KHTML and KJS from KDE’s “Konqueror” open source project.

Nokia said that it intends to continue its collaboration with Apple — and will actively participate in the open source community to further develop and enhance these components, contributing Nokia’s “expertise in mobility,” the company said.

And in fact Nokia’s open source project page describes exactly how the Safari web browser is the basis for their browser.

Mystery at last revealed, the reason the browsers are so similar is because they are the same browser.

I will observe that this further confirms my near universal irritation with the quality of technology journalism. The fact that the Apple hype machine implied the iPhone was unique in it’s use of Safari did not mean a few moments of fact checking would not have revealed that Apple was using someone’s else technology.

iPhone: This changes nothing

It’s happened. My Apple friends, you know the ones who run around proclaiming the Mac’s greatness, have gotten their hands on iPhones. Now I will be subjected to claims about how great the iPhone is and how it changes everything in the cell phone market. Already they are asking whether, Nokia, the global leader with 400 million phones sold per year and approximately 50 000 employees devoted to exactly one market is doomed, doomed I tell you.

Let us, for a moment, exit the Steve Job’s reality distortion field. So I’ll make two seemingly contradictory statements:

  1. The iPhone’s success is critical to Apple.
  2. Even if the iPhone succeeds it is irrelevant to and will barely affect the broader cell phone market.

Let me start with (1).

Apple has consistently occupied a niche in the broader general personal compute market. A market I define to include all devices that people use to browse the web, message, entertain themsevles and generate content with. If you exclude the biggest segment, the cell phone, Apple’s global share of the PC market is an almost irrelevant 5%. The problem for Apple is that the 5% Apple owns is absolutely irrelevant to the emerging personal compute platform that is the cell phone. In other words, regardless of whether Apple owned 10 or 15% of the laptop market without some kind of cell phone strategy the long term prospects of the company were questionable. The thesis for this argument is that as more and more users migrate to cell phones to do most of their laptop activities, the value of the laptop declines and the value of the cell phone as their dominant personal compute platform increases. In other words, over time, the cell phone becomes the laptop, the laptop becomes the desktop, and the desktop becomes the mainframe. Why this is important to Apple, is that Apple’s market tends to self select among people who are willing to adopt newer and more exotic technologies. There was always the possibility that the right phone may affect Apple faster than the broader Microsoft market.

Furthermore, the reality is that unlike Microsoft, who after 6 years of trying finally has finally produced a credible cell phone OS that actually runs on a non-trivial amount of cell phones Apple had zero presence in the market. Vista and Mobile Windows are fairly well integrated and that the integration creates the possibility that the Mobile Windows may drive Windows OS sales over time. This could, in theory, impact Apple’s long term (tiny) position in the computer market.

Apple had two strategies open to it. One was to try and get cell phone manufacturers to adopt the Mac OS or Apple applications preserving some kind of presence in the cell phone market. The second was to build their own custom designed cell phones. Proving, again, that Apple is a hardware and not software company, the strategy they chose to adopt is to build their own phone with their own OS. In effect, Apple decided that Apple needed to build their own device so as to provide a home for their fans so as to preserve Apple’s overall share of the personal compute market.

In fact, the iPhone’s success is critical to Apple. If the iPhone flops, this may create an oppening for some of those Apple users to migrate to other computer platforms. The reason may be better integration with their dominant compute platform, namely the cell phone. Thankfully, for Apple, the early news is that the ancient hardware platform they built has been a smashing success with their fans, thanks to the rather clever software interface they built. So kudos to Apple!

Having just congratulated Apple on their first phone, I am worried that the first cell phone they produced was already ancient in terms of hardware technology. The cell phone market is not the mature PC market. The cell phone is a rapidly evolving hardware platform. There is an open question as to whether Apple can simultaneously sustain the level of innovation in both the PC and cell phone market necessary to compete over the long haul. An iPhone that is always two years behind the rest of cell phone market becomes less interesting over time.
Now let me address point (2):

Even if the iPhone succeeds it is irrelevant to the broader cell phone market and will barely affect the broader cell phone market.

The most irritating aspect of the Apple fan is his belief that the iPhone will somehow change the dynamics of cell phone market or perhaps even disrupt the dominant player in the cell phone market, Nokia. The central thesis of the argument is the following:

  1. The iphone is like the ipod, a disruptive technology, that the major players will be unable to react to
  2. Because the iphone is like the ipod, a disruptive technology, Apple will become the dominant cell phone player
  3. The cell phone manufacturers will go out of business and Apple will finally rule the computer market!

Before I even point out why I think this argument is deeply flawed, let me observe that the iPhone is irrelevant to the broader cell phone market.

The total cell phone market is approximately 1 000 000 000 cell phones (http://www.ipsnews.net/news.asp?idnews=36161) per year. If the iPhone sells 5 million per year that’s 0.5% of the global market. As a point of comparison, Nokia sold 106 million phones in the quarter ending Jan 1st 2007 (http://www.infoworld.com/article/07/01/25/HNnokiasalesup_1.html)

Heck even in the United States there are approximately 120 million subscribers between verizon and att. Assuming 1 cell phone per subscriber, if the iPhone sells 10 million units it will have hit ~8% of the verizon/att market and less than 4% of the total US market.

Practically speaking the iPhone may eventually own a tiny market of the global market, but is utterly irrelevant in the places where the growth in phones is most dramatic (the emerging markets of China, India and Africa) because of the cost and form factor of the device.

The most optimistic scenario for the iPhone for it’s impact therefore, is the following:

I think in the most optimistic scenario,the iPhone is to the general mobile cell phone market what the Mac is to the PC: pushing a few trends faster but generally irrelevant.

Of course, anyone who believes in disruptive technology will gladly point out that the dominant players are never weaker than when they appear strongest.

So is the iPhone like the iPod, disruptive to the rest of the cell phone market?

I think the answer is no. The iPod was disruptive to the personal media market because it was the first device that had enough capacity to carry most of your music as well as an elegant form factor. The iPod was, therefore, able to take advantage of the transition of media to digital form. The reason no one else was able to respond was that the players in the market at the time were either too small to compete with Apple or (cell phone manufacturers and Microsoft) completely missed the boat.

The iPhone has a pretty UI on top of a marginal hardware platform. Apple has not invented the first usable cell phone. Apple may have invented the first usable cell phone based web browser. However, the problem is that the cell phone vendors are not some puny players that are incapable of reacting and Apple’s global share is too small to make their current advantage meaningful. The most reasonable claim is that Apple’s disruptiveness is tied to the fact that they do software and they understand industrial design. The problem is that cell phone vendors understand industrial design (Motorolla RAZR) and increasingly understand the value of software (possibly because of Microsoft). The major cell phone manufacturers are aware of the importance of the software platform and have been aggressively investing and re-organizing to become software players. If you combine their ability to innovate in hardware, their manufacturing capacity, their global reach and their new found focus to create software the most likely outcome is what I said earlier:

I think in the most optimistic scenario,the iPhone is to the general mobile cell phone market what the Mac is to the PC: pushing a few trends faster but generally irrelevant.

I just don’t see the cell phone vendors falling asleep and giving Apple the time necessary to build the capacity necessary to compete with them. Of course, I could be wrong, but it seems extraordinarily unlikely.

I still believe the largest long term threat to the cell phone manufacturers and in particular Nokia is Windows Mobile because of the increasing integration between the cell phone and the laptop. Having said that, the laptop may become irrelevant over time, making that integration a niche part of the overall personal compute market.

In short, bravo to Apple for introducing a good phone. But unlike Steve, I believe this changes nothing.