Category Archives: nokia

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

Leave a reply

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.

 

How ATT and Verizon turned mobile software into the new growth industry

Leave a reply

Yesterday, I had the misery of replacing of my phone.

When I originally bought my Nokia cell phone, I bought it with the expectation that I would get an early upgrade in about a year. Given that the phone was free – thanks to a bug in the OS – the theory was that in one year I would buy a better phone at a reasonably discounted price to replace my aging and dying Nokia E71…

Except ATT, and now Verizon, changed the rules of the game and the early discount no longer applied.

Which sucked for me… but it really sucks if you are hardware manufacturer…

In the hardware business, you really need to get people to upgrade to the next model to make money. If they don’t upgrade, then you make less money. It’s really that simple.

Storage as a hardware business is awesome because storage is like a consumable… as long as you are creating data you are buying more storage. Once you use storage it’s no longer re-usable for another purpose without deleting data and data never gets deleted.

But to upgrade to a new cell phone you need a compelling value proposition at a reasonable price.

With the early discount model the carriers had turned what could have been a two-year upgrade cycle into a one year upgrade cycle. And had allowed more share of wallet to go from software vendors to hardware vendors… Folks who could spend were spending more on hardware over two years than on software.

The carriers have now reversed that policy which means that the prices after one year have gone up.

This is really unfortunate for hardware manufacturers. To deal with the sudden increase in price, hardware vendors must either make the product more valuable through faster innovation, or figure out how to make the hardware cheaper or accept slower growth.

Changing the rate of innovation is hard. In fact, I would almost argue is impossible. Hardware rate of innovation is ultimately tied to Moore’s law. So you have to cut prices which is also sucks because it affects margins. Or you accept slower growth which isn’t so bad … other than the part where your shareholders ask you to do things like hand over your cash hoard and demand a dividend … and let’s not get into the employee retention thing.

All this means less profit for hardware vendors which means less innovation etc…

A slower hardware innovation adoption rate, however, is fantastic for software vendors. Unlike hardware, software vendors are able to continuously add value to devices without an upgrade cycle. In addition,for subscription services as long as the vendor adds incremental value the average sales price doesn’t have to drop …

So what does this mean?

If you consider the amount of money that the median first world person has as fixed or slightly declining over the next 10 years, then software vendors can capture a bigger share of the wallet.

Let’s be very specific:

Suppose a customer is will to spend 600$ very two years on a phone. In the old world, the customer could buy a 200$ one year, and a 400$ the next. With the new policies the customer spends 200$ and 600$ the next year because there is no discount. So the customer – unless he sees a compelling value proposition decides to not buy the 600$ phone which frees up 400$. That 400$ is available to spend on incremental software services on his phone. Although it’s certainly true that not all that money will go to software, but some of it will. And the really cool piece of news is that folks who were buying early upgrades have enough disposable income to actually want to buy more software services to extend the value of the device they already own.

If I was a software service vendor like Evernote or Google or Microsoft this is the best piece of news I have heard in a very long time… More money to spend on services.

If I was a hardware vendor this would suck. And the market agrees which explains the collapse of Apple shares.

And if I was Microsoft trying to grow my platform this would also suck because

  1. It means that growth of Windows Mobile will be slower as it takes longer for people to buy new phones.
  2. Given the investment consumers are making  in services, the stickiness of  incumbent platforms may increase over time.

My only hope if I am Microsoft is that they can somehow create faster software innovation that motivates people in the next upgrade cycle to switch … This is possible … in principle (bing is number #1 in search – right?) … 

And if I was blackberry, I would pray there were a lot of people who loved me…

And if I was anyone else trying to build a cell phone platform, I might be looking for a new strategy…

Nokia has chosen to die or The end of the Nokia affair.

2 Replies

Today is truly a sad day. After an almost 15+ year love affair with Nokia phones, I am moving on.

I feel lost and adrift, but it is time…

Nokia’s value prop was that the damned things never died and the audio quality is the best in the business. So in spite of their crappy UX, I loved the fact that my phone always worked, and provided perfect sound. In the early days of the iPhone (and to this day), I would get frustrated at the audio quality of their phones. Much like iPhone snobs hated my pictures, I hated hearing their muffled, distorted crappy voices.

But my Nokia 900 (edit: originally said 820 which is easy to replace) died a few weeks ago. And that is not okay. And it died because the internal and irreplaceable battery died. And I lost some pictures because I can’t get the pictures without tearing the damn thing apart … thankfully iFixit has ways of doing that.

I was thinking about buying another Nokia, but…

I found myself, before the phone broke, getting increasingly frustrated with the lack of apps, the poor quality of the photos, my inability to do things that my android device made easy.

And then I looked at the call log on my phone, and I realized that I barely used the phone as a phone. I have 14812 minutes on my cell phone. Seriously who need 14812 minutes on their phone (need to fix that bill at the next opportunity)…. That’s 10 days of continuous talking.

Heck I barely used it for SMS.

I mostly used it as a web-browsing device and an email device.

At work I have an Android device, and realized I was using this massive collection of apps that neatly integrated with each other (something the Apple iPhone experience works so HARD to make a frigging nightmare)… and found myself increasingly reaching for my work phone instead of my personal phone…

So good-bye dearest Nokia, Like many things in life, time has passed you by… Even this fan-boy bids you a not so fond farewell…

I never would have guessed that you would have pissed away such an amazing, and awesome strategic opportunity through colossal and spectacular business mismanagement.

As for you dearest Microsoft, love your desktop PC, love your mobile OS, won’t bet against you but you’re increasingly looking like OS/2 …

 

 

Perhaps Nokia has chosen not to die

1 Reply

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.

And the new smart phone champ is the Nokia E71

1 Reply

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?

Leave a reply

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?

1 Reply

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.