Legacy’s cost

 

“Number 2 is just the first one of the losers”, says a very famous motorbike racer who has been World Champion many times (still not retired) who loves being the fastest one.

This would be too radical a view when we have a look to any market, where there is not just one winner. It would actually be impossible under antitrust regulations.

However, the quote from Valentino Rossi (which is the biker’s name, as many bike fan’s might have guessed) can be understood in the context of what is currently going on in the smartphone market (and eventually in the tablet’s too), where old kings are running the serious risk of being phased out from their former positions.

Of course there can be space for them, and we actually believe there will always be, in fact. But it is really hard to accept being below second rank after past history dominance.

RIMM, Nokia, though still hitting very important volumes, might well be in that situation. The issue is the trend, clearly decaying, and the chance that they still base their current results on legacy. .

Legacy of corporate business and systems that have an enormous cost of change. Legacy of users who are provided a phone by their companies that might be used for personal purpose. Legacy from past experiences and resistance to adapt to new phones from previous ones.

But legacy has a deadline and does not last forever. History proves legacy is not enough, and costs empires. Ask the British about India, ask the French about Indochina, ask the Dutch about their Indies, or ask the Russians for the “xxxstan” republics. there is still a Britain, a France, Netherlands and Russia… but where did their empires go?

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The sound of silence

 

It is common to hear that no news equals good news… but it does not really seem the case for the guys at Microsoft regarding their mobile phone story.

Silence, as in that famous tune by Simon and Garfunkel, can be really loud, even more than the cheerful reporting when success is there, like it happened with Kinect.

Silence as well about the potential upgrades that are badly needed does not help either. When will the famous “cut & paste” basic feature show up?

The more they wait, the smaller chunk of the pie they’ll get, though they still have the potential benefit from the corporate and enterprise market, that to much extent has a Microsoft based IT. But even there, RIMM and Nokia can be too far it they keep on slowing down, or if they fail to move fast. Even the slowest of the slowest, that is, Palm, might move ahead of them if they ever start. Particularly if they deliver a confusing message to this segment.

The market does not wait for sound names and brands if they do not really deliver.

 

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It goes without saying

 

Predicting the future has always been one of the strongest wishes man has had throughout times. Either to benefit from anticipated information, or to prevent eventual bad news, it’s sort of a constant throughout human history.

History is therefore full of examples about predictions, some of which became true (probably by chance), many more of which turned out completely wrong.

One of the most recognized visionaries in the IT world is, no doubt, Steve Jobs at Apple. In fact, his leadership within that company made it possible to actually contribute to define the future of that industry, for the good or for the bad. Apple’s influence is actually tangible in our opinion.

No matter how much this influence might have been (which could be subject to debate depending on personal opinions), it seems not all Jobs’ opinions are exactly right, however. Even successful visionaries might not be completely right.

His widespread comment about mid-sized android tablets being DOA is not exactly what is happening, according to Samsung’s Galaxy tablet performance so far.

Which is not necessarily bad for Apple anyway. Competition is healthy for an industry development, we’d all probably agree.

However, as important in our opinion as what was explicitly said, it is what was not explicitly quoted in Jobs comment. Certainly not usual for Steve Jobs to criticize competition openly or so directly, his strong attack to Android-based tablets indicated his concern about its potential success. In other words, he could have been seeing what Android could achieve…

If he foresaw the results Androids (through Samsung) are apparently achieving so far, then he was not that bad a visionary at the end of the day… and a master of propaganda, the way he presented his forecast.

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Apples to apples

 

We have read an interesting summary of an analysis made on smartphone users’ loyalty to the brand of their current handset.

The conclusions driven there seem reasonable, though we believe one should be cautious when drawing conclusions.

We think the smartphone market, booming these days, might change a lot in short time, so many things are still developing and reaching users as we write this, that today’s conclusions may be completely different in a few months from now.

If loyalty is a reflection of satisfaction, we’d still need to define how satisfaction is measured. We still need to be clear about what it really means to the user. It is not the same thing a professional that has been given a Blackberry by his employer, for example, to use it for professional email and SMS than a university student that basically might want his phone for chatting, web browsing and facebook logging.

To measure satisfaction, one would need to know the cost a given product has meant to the user, and the expectations he really had about what he got. If we were given a smartphone for the first time for free by an employer of ours, which allowed us to do email on-the-go (assumed our previous phone did not allow us to), we would be very happy with that, regardless the OS (Android, IOS4 or Symbian, for example), especially if it is our company that pays the bill. We would not be more loyal to the handset brand than however loyal our employer were.

As well, if we were to use a Windows Mobile phone after having had an iPhone or Android, our satisfaction/loyalty would be seriously reduced…

As well, there are many factors that can influence user satisfaction or loyalty which might not depend on the handset you are using, nor the OS it supports. What about the carrier service, possibilities or limitations? What about its service plan, the cost of it? For some customer segments, it might be as well important the brand perception or how “cool” might a given device look or feel. We know of many cases where teenagers ask mom and dad for a Blackberry just because mom or dad use one, or just because the most popular mates at school have one each, for whatever reason.

Hard to measure loyalty or user satisfaction, and hard to extrapolate results for predicting future volumes or sales.

We see the current smartphone market more like the case of the youngster that recently got his car driver’s license for the first time. The prospect of moving from being a bike user to driving a car on his own is so exciting to him that he will be the happiest person in the world to have his car, no matter if it is a brand new convertible Ferrari sportscar, or mom’s 20-year old Volkswagen, that she recently replaced by a new one. At the end of the day, both cars open for the kid a new world of possibilities, one way or another, that were so far inaccessible to him.

In a market so much subject to change in very short time frames, conclusions from this kind of surveys should then need to be very carefully managed and understood, we think, making sure one compares “apples to apples” to make those conclusions really valid or useful. By the way, those who prefer Blackberry might prefer to compare “berries to berries”…

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First love

 

We are sure almost everybody remembers his/her first teenage love, his/her first date, and, of course, his/her first kiss. Despite actual age, or whatever circumstances each person had, we think there is a common denominator for all those situations, something all them share. We talk about the lack of real life experience of those persons, discovering what we think is probably the most important aspect of human life.

Inexperienced as everybody is in first love experience, after the person gets a more or less explicit confirmation by his/her partner that both of them are together, the typical question they make themselves immediately after is “and now, what?”.

Unable to answer this question in a precise way, then those fortunate ones that enjoy that situation may start behaving strangely, incoherently, inconsistently just because they have never gone through that before. Older people, when watching them, probably smile and justify them remembering their own experiences…

After this experience, which frequently turns to nothing (how many people do you know that have ended up sharing their lives with their very first love?), people are supposed to get more mature, and manage better and better their next experiences until they settle down. This is what actually happens, but, as nobody’s perfect, there are always clamorous exceptions.

Enter the Gorilla (aka Big Ape Steve) to demonstrate the case for us:

The not-really-so-successful first smartphone experience by this guys was windows mobile, who was quickly wiped out by Nokia and particularly Blackberry like the best football player in the grade at school usually takes the most glamorous cheerleader from her previous boyfriend.

And now these guys come back… supposedly having learnt from the past. Not really being precise with the product positioning (consumer versus enterprise, work versus fun, or any other user segmentation you want), as you may recall from the “Really!” marketing campaign, not they seem to be willing to demonstrate the world precisely that: They have learnt from the past, and they are different from what they used to be: If Mobile was for work, Phone 7 is for fun.

Learnt what from when? For God’s sake, with less apps than Apple or Android, with less developers than the formers, with less brand recognition, and with precedents like Zune dramatically behind iTunes, how can they claim any strength in the consumer world, in fun?

If there had to be any strength within these guys, it would be clearly related to the enterprise market with the supposedly easy integration on the Office Suite within their OS… though we can hardly imagine, besides email and very basic usage of Excel or Word, any intensive use of Office documents in a screen smaller than a tablet.

Again erratic, inconsistent, and eventually behaving like a teenager who just came home after his first kiss: “so now what?”. And while they make their minds up, market will keep being rushed by Apples, Androids and even Nokias and Blackberries who might have eaten the pie and just leave the crumbs for them when they decide something consistent.

As we said before, nobody’s perfect. Still, you may always find one which is even less than anybody else.

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Cheap fuel

 

As long as cars need fuel, its price (as insurance’s, maintenance’s, taxes…) ought to be added to the total cost of owning one.

Cheap gas or lower taxes do not guarantee any given car is better than other using a different type of fuel or subject to higher taxes.

It’s the total ownership and driving experience what matters.

And, by the way, the fact that a given fuel type today might be cheaper than another does not ensure it won’t change in the future, once the car has been bought.

Not really sure smartphone users have really analyzed their potential expense on apps when they decide to buy one.

We do not therefore think this is necessarily going to provide any effective help to Windows Phone 7 in its struggle against iPhones or Androids… and we are not really sure this is going to make very happy developers, as their financials won’t have the same prospects as the ones provided by developing for Androids or iPhones.

 

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Criticism and pain

 

When facing his government duties, Sir Winston Churchill said once: “Criticism is as necessary as pain; it reminds us that something is not going well and needs attention.”

More than a mere critical opinion or a different point of view, facts can be a much louder or stronger criticism. As such, it should probably be paid, therefore, more attention.

And for the moment, Sony Ericsson’s decision to not introduce smartphones with Windows Phone 7 is a fact.

There has been a lot of opinions back and forth, for and against Microsoft’s phone operating system… but so far, besides it’s poor performance in sales (as far as we have known), we have not seen a harder one.

If the fourth largest worldwide handset manufacturer says “no”, this is a serious warning to Ballmer’s boys. Especially if they have androids there, as reported in the link above.

Opening new stores may not be enough.

Giving free tickets for pop concerts might be useless.

Playing Incrediboy might not suffice.

Not caring for your developers might backfire.

Leaving it all to a wizard at the end of a yellow brick road may mislead.

Taking everything for granted does not solve problems.

If one treatment does not work, it is useless to repeat it to heal the problem.

and, definitely, we would not put the solving of our pains in the hands of apes.

Too many pain symptoms to avoid facing them, we believe.

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Katie’s concert

 

The other day there was a great concert in Seattle. One of the most popular pop stars of the moment was performing, and all the youngsters in the area were dying to be there.

The place was fully packed, al the tickets had been sold out.

Wandering around, we saw very many teenagers and kids enjoying a lot being there. Casually, they were dancing, singing, and even sharing their experience.

Some of them took their iPhones and Androids to make pictures of the scenery, the public, their friends or even themselves. And we are sure before the song was over, lots of those pics were already posted in Facebook, YouTube and other social networks or blogs.

Before taking the children there, their moms and dads surely used their Nokias and Balckberries to check in Google Maps where the place really was, and verified as well what was traffic like. Kids would not forgive them ever if they had failed to take them to the concert on time.

As well we noticed some of them were texting like crazy: “Y’know, mom still carries one of those old phones with no internet”, one kid was telling his friend…

In a certain moment, we happened to run into Katie. Katie is the daughter of a charming couple who are friends of ours. She loves pop music, which she used to play all day in her old mp3 player, and recently in her brand new iPod she got for her 15th birthday. She had asked for an iPhone, but mom and dad suggested her to wait for her Verizone’s current contract to expire.

“Hey, Katie! What a surprise to see you here”, we said. “It must have been difficult to get tickets, so full the place is”.

“Yeah, it was a surprise for me too. We could not find tickets anywhere, but the other day mom came home with several of them. I think she told me she got them in a PC shop or something that had opened recently somewhere nearby, and they were being given away for free. But not really sure, in fact”.

“For free?”, we asked.

“Don’t really remember, but when I get back home, I can check for you if you want. We can search the internet in our Mac.”

 

 

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Nothing to fear…

 

… but the sky falling on our heads. This is what Chief Vitalstatistix used to say to his fellow warriors in the Gaul village surrounded by the almighty Roman Legions in the Asterix cartoon books. Many of our readers might remember these comics by Herge.

So how could these few gauls uphold the Roman Empire? Easy: They could count on a certain magic potion that their peculiar druid Getafix was able to prepare, which provided extra strength to whomever drank it, and made them unique and extraordinary.

Steve Jobs seems to be a better druid or potion maker than the guy with the pharmacist name, Herr Apotheker, as the former somehow found the recipe for the magic potion that makes Apple unique.

In fact it seems that Apple has, at least in the tablet market for the moment, nothing to fear but reaching the sky too fast, what, for the matter, would have the same effect than having the sky falling on their heads. Both Chief Vitalstatistix and druid Getafix all in one, Jobs prospects look good in the tablet market. iPad’s dominating about 95% of the market, serious rivals are yet to come, and the only fear for iPad might be iPad 2.

Important to note, the Gauls in the comic books never ever used their potion to expand their village beyond its own walled limits which they held firmly not to prevent villagers from going out, but Romans to get into their Sancta Sanctorum. They did not need to flee nor expand. Happy they were in their spot beside the coast in Bretagne, where they lived much more happily than the Romans who sieged them.

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The Consul’s Legions

 

In the times of the Republic, Rome was ruled by the Senate. Senators were elected by the Senate, of course, but all men born within a senatorial family would be elected by birthright.

Senate had the power to declare war, and, therefore, it controlled the State Legions, the Roman Army.

Senate leaders (consuls, proconsuls, praetores or propraetores, province governors) therefore needed agreement and support from the Senate itself to use the Army for carrying on any war that sparked.

Commanding legions and succeeding at a military career was not an uncommon way to gain personal glory or reputation to step up for the commander. In many cases, successful political careers were based precisely in military reputation.

Therefore, political success required commanding legions, and commanding legions required support from the Senate. In other words, it was the Senate who controlled who could succeed in his political career by granting him command of legions, regardless the personal value as military leader of the commander.

If we look to the smartphone market, we see some parallelism with what happens to handset or operating systems manufacturers. Carriers do have a lot of power, and the success of this or that vendor depends quite much on this power. Carriers can, somehow, make or break success for this or that manufacturer. Much is being said, for example, about iPhones being distributed through Verizon, or about Apple’s relationship to carriers.

Successful Apples, Androids, LGs, Samsungs, HTCs, Nokias or RIMMs would depend on how “gracious” carriers might be when granting command of legions.

Back to Rome, we as well can see that if a given individual Senator was resourceful enough (ie rich and smart at the same time), he might enlist and equip his own legions, which would rival the State’s, controlled by the Senate. In fact this is what Gaius Marius did around 100 b.C. Thus, he became independent from the Senate to build his military and political career, pretty successful by the way.

We believe this is what Google might be doing, Rich and smart, they might be planning independence from senatorial carriers. And this might lead to a successful career, similar to Marius’, the only person in Roman History to be elected Consul nothing less than seven times.

Careful, Jobs… Androids might take this road to outflank you.

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Titanic effort

 

We do not believe the smartphones war will be a minor one at all. At the moment it looks like Apple’s iPhone and Google’s Android-based alternatives are taking a clear lead, eons beyond historical kings of the hill, Nokia and RIMM.

The latter will need a titanic effort to recover and catch up, apparently.

It looks, however, that Nokia’s N8 model, expected to be the company’s flagship, did not really get what “Titanic” was supposed to mean, we’re afraid.

 

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By George, they did it!

 

One of the greatest musical milestones in classical movies is My Fair Lady, based on George Bernard Shaw’s play Pygmalion.

Poor Eliza Doolittle, from lowest social extraction, is used by Professor Henry Higgins as an experiment about teaching English, in an attempt to prove his methods can bring such a low-class person to the ranks of Aristocracy. At least in what relates to speaking English properly.

Professor Higgins takes care of her completely, as she is poor and has no resources of her own besides selling flowers in the street for a living. She totally depends on his wealth while she receives her lessons.

Despite providing her all possible physical comfort, he is so much oriented to his own personal success with the language experiment he is using her for, he does not really care for being considerate at all with her, and actually treats her like a scientist would handle a guinea pig.

Naturally, she ends up completely fed up, and quits, disregarding and ignoring all the good he claims to have provided her with. She simply does not stand his arrogance and tyranny any more, and looks for alternatives that indeed could work for her.

By George!

We would say that “Professor Ballmer”, with all his wealth, power, aristocratic profile (well, this one under discussion), and methodologies, really can not stand up to all the Eliza Doolittles that so much have depended on him for so long, can he?

 

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Next Year in Jerusalem

 

In the times of Roman Emperor Hadrian, second century after Christ, Simon Bar-Kochba led one of the very last Jewish revolts in Judaea against the imposition of Roman religion.

This revolt when pretty much like previous ones: Three years combat, about half a million people dead, including leader Simon Bar-Kochba and the rabbi Akiba, the latter after great torture.

Emperor Hadrian built a new city, Aelia Capitolina, on Jerusalem’s ruins and barred all Jews from coming anywhere near it.

Since then, all over the worlds, Jews have mournfully prayed “Next Year in Jerusalem…”

Palm’s Rubinstein, in recent appearance at Web 2.0 Summit has claimed Palm’s birthright to have owned the smartphone market, should they have done a better job.

In other words, should have they cared for doing a decent job, their “Jerusalem” would have flourished and set as the smartphone reference. But a much stronger power, call it Apple, Nokia or Blackberry, has de facto imposed new rules in the market, and destroyed Palm’s “Jerusalem” with a lot of pain and suffering for the latter.

Ever since, it appears that Palm’s staff keeps on claiming, quite mournfully too, “Next Year in WebOS…”

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Dorothy’s smartphone

 

We have recently learnt Apple is adding The Beatles to iTunes… Good for them! No matter whether Google or Amazon were after the same deal, the UK band goes to Apple.

Easy to say that Apple’s taking The Long and Winding Road… but we prefer to think it is their competition who are going to have some difficulties on the road, and it is for them that the road might be really long and winding.

However long or winding it still looks as well, in our opinion, more like the yellow brick road. And if we think yellow brick roads, we couldn’t avoid thinking of Dorothy, could we?

So here we have Dorothy starting her way on the yellow brick road trying to figure out how to succeed with her smartphone.

First she gets a call from the Scarecrow, who asks her some help to add some brains to his berry-like smartphone… Willing to learn from his experience, Dorothy asks him to join her in her quest for success in the smartphone market.

A short while after, she gets a call from the Lion with no courage. “Hey, Dorothy, need some help here… Got the muscles and the fangs, but I am really afraid of getting out there… Maybe next year if I make it for WebOS 2.0?” So Dorothy invites him as well to join her and the berryphone Scarecrow in their quest for success in the smartphone market.

Later on they find the Tin-Man lacking of heart… “Oh, what a nice android”, they say. “Come join us to look for success in the smartphone market”. The Tin-Man replied: “Indeed I need help: So many versions I have, and so many handset makers I need to support, I do not really know where my heart is, if I have any”.

And so the little group went on looking for success in the smartphone market…

“We’re off to see the Wizard, the wonderful Wizard of Phones, because, because, because, because, becaaaaaaauuuuuuse… because of the magical things he does”…

And they indeed found the Wizard… in a black turtleneck and old jeans, wearing round glasses.

Up to the reader, by the way, to think who Dorothy is… (hint: sweats a lot!)

lovely classic, still, obviously, up to date!

Technorati Tags: nokia,rimm,meego,symbian,hp,webos,palm,blackberry,android,google,smartphone,leo apotheker,steve jobs,eric schmidt

A wintel déjà vu

 

We like taking a look back to History every now and then and compare the past with what might be going on every day. In many cases we see amazing analogies, but in some others there are nuances that make slight twists.

Following closely as we do the early stages of the booming smartphone market, we cannot prevent ourselves from having a certain déjà vu feeling as we compare it with the PC business some years ago.

We could say for a moment that smartphones today might represent what PCs did in the 1990s, when the market was certainly growing very fast under the impulse of its consumer side. PCs were not unknown to the consumer market, though real technology leaps and breakthroughs were coming from the enterprise segment, and were gradually implemented in the consumer segment as costs were being slashed and PC manufacturers were in the need of keeping their business targets up.

In that process, two big winners consolidated positions at the expense of hardware manufacturers: Intel and Microsoft, who dominated that market, and all the selling effort cost their lives to many hardware assemblers that could not keep the pace. From all the manufacturers, multinational or local, from the 1990s, very few survive to this date. Big names like Dell, HP, Toshiba, Acer, and Lenovo (as ex-IBM) are the toppers of this short list.

Smartphones have followed a very similar way, as they are starting to boom in the consumer market after an initial successful deployment in the enterprise segment. We believe Qualcomm will play the role of Intel, and, naturellement, Android will play Microsoft’s.

We seem not too be in full disagreement with the opinions from others.

However, we see some differences with the Wintel tyranny if we approach the case from a different angle.

First, we can look to the the actual use consumers and professional users give their smartphones: Connectivity. Smartphones are the logical evolution of standard mobile phones because of the connectivity possibilities: Email, internet, social networking… Before that, mobile phones were basically regular phones to do texting as the most advanced feature. Like PCs in the 1990s, which, in very many cases, worked standalone at home, or connected at most within a professional intranet.

Smartphones can work today autonomously and get connected directly to almost everywhere with no necessary need of uniformity in the way they connect (ie needing the same operating system).

Second, we think today technology is much more accessible to people in general, who have grown earlier much more knowledgeable. In the 1990s, when people were acquiring their first PC for home use, they needed something they were familiar to, the Windows familiar environment they had learnt at work. This gave a major advantage to the Wintel tyrants. Today, even kids know how to use a smartphone with no need to depend on any familiar system used before at work, obviously.

Third, in the 1990’s, there was a certain lack of competition, as Apple, the only possible one, was suffering its famous “near-to-death” experience. If you wanted a PC, there were almost no alternatives to Wintel. Today, the smartphone market has been led by Apple, Nokia and Blackberry, and Androids are catching up real fast. Even HP is promising something on Palm’s WebOS, and there is a certain attempt from Microsoft with Windows Mobile 7.

So, yes… there is a risk of having a “Qualdroid” tyranny in the Wintel space… and we indeed pity some of the handset makers that will die for it sooner or later. But, thank God, it seems that there will be intelligent life out of it, and there will be valid alternatives for the benefit of the market.

 

 

 

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NO! Not the gumdrop buttons…

 

Who can’t recall the scene in the first Shrek movie when Lord Farquaad mocks the Gingerbread man?

"Run run run as fast as you can, you can't catch me, I'm the ginger bread man!"

Gumdrop buttons sound clip  Shrek sound clips

Probably this is what the Google guys had in mind when they decided to name Gingerbread their new version of  Android OS to be launched pretty soon: Running and speeding, like Apple does.

After cupcakes, éclair, donuts and frozen yogurts, they really want to add some speed to the market, and catch up with the IOS4.2 as well, scheduled as well soon by the guys from Apple.

The issue here is not that much how fast Gingerbreads can run, but how speedy the handset vendors implement it in their devices. Dell’s Streak, for example is still to get latest updates on Froyo, and many others are still in earlier versions of Android.

Again, one of the apparent disadvantages of Android: Too many versions, too much fragmentation, and handset vendors who will have to squeeze their brains like crazy to avoid squeezing their margins too much when differentiating themselves…

 One of the big opponents and rivals to Android, as we have said before, seems to be the Blackberries and the MeeGos who like Farquaad, seem for the moment much more powerful, bigger and stronger than little Gingerbread Androids, though the latter is biting market share away from them like crazy.

Just having a look to a typical Blackberry or Nokia device, we are not surprised to note how obsessed these two Farquaads can be with buttons, too many of them they have. Maybe they don’t want anybody else with any button at all…

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Androids are vegetarian

 

When choosing something cool, yet personal to buy, customers make their choice based on differences. Differences that are worth paying for, that is. However, differences will have to be within a common trend or fashion.

In today’s consumer electronics market, fashion and trends mean smartphones. It is certainly not enough to have a standard mobile phone to talk or text, which is at reach for almost anybody today. Smartphones are wanted.

So the big question for a smartphone potential customer is which one to buy. The choice, again, will be based on difference between the available alternatives, and the value each difference represents to the user.

In a simplified analysis, we could say that there are two main differentiators for these products: Price/cost and features/capabilities/usability.

If we take a look to the main players in the smartphone market, from an operating system perspective, we see Android with its different flavors or versions, IOS4 by Apple, Symbian by Nokia and Blackberry by RIMM.

If we dig a bit through them, we come to the conclusion that there are only two clear leaders, one for each of the differentiation groups.

On one side, we got Android, an open operating system with the enormous advantage of cost, as it is free. This platform provides many functionalities RIMM or Nokia lack, a powerful app base with plenty of developers backing it, and a broad choice of handset manufacturers who will compete against themselves within this platform to make additional differentiation, and, therefore, reinforcing a trend lowering prices.

On the other side, we have Apple with IOS4 as undisputed leader for having set trends in the overall market, coming form the super-successful iPod success, and backed by all the brand reputation they have. Leaders in the app development and selling environments, with iTunes model, and the solid reputation for quality and usability they have proven. In fact, they represent the model others are following, from a conceptual perspective at least.

Despite all the comparisons these two are starring in the news and in the media, we do not really see a major war between them beyond their own natural spaces, given the different strategies after each of them.

Apple leads in innovation, quality, user experience and time to market, and is led my a single company that provides both hardware and software.

Androids lead in price and cost, keeping a reasonable pace from a technology and usability point of view with Apple. Now, their dependence on the different handset manufacturers may lead them to unnecessary conflict between them and need to further differentiate between themselves, potentially at the expense of sacrificing features, capability, quality, usability or reliability; as well, these eventual conflicts would have additional complication by needing to keep an eye on potential newcomers (open free operating system, remember).

So after some consolidation of the market, we believe there will be a natural (not necessarily sought though) od positioning Android as sort of “the affordable iPhone”. or “the cheap iPhone”, similarly to to what local and small unknown brands tried to do when selling their own “clone” PCs (“IBM compatible”, remember?) years ago.

“Affordable” or “cheap” alternatives to quality leaders are always well accepted by the market, and volumes come quickly up for them. Not everybody may afford buying the quality and technology leader’s products. Every car owner would like to drive BMW or Mercedes, yet these are not volume sales leaders, are they? And every man in the world would like to have an Armani suit for each day and carry a Louis Vuitton suitcase when traveling. But Toyota, Volkswagen and Renault might do with good enough cars, and it does not really matter for many people to buy their suits at Sears and travel with an unknown brand case.

The proof is the massive growth by Androids in the latest reported figures, which have not harmed Apple at all, as much as a big sales increase for Toyota or Volkswagen won’t worry a Mercedes dealer much, not to talk a Bentley, or a Ferrari one. In fact, what Androids are doing by an “affordable” offering is basically making the market grow by addressing population segments Apple’s would not reach even if left alone. Apple is probably less interested in additional volumes beyond a certain limit if they come at the expense of profits. At the end of the day, Apple is there to make money too. Especially after their near-to-death arch-famous experience in the 1990s. Truly, Apple’s sitting today on a war chest of about $51 billion, according to lots of online reports, which is twice as much of what Dell is worth at this moment in NYSE, as a reference. Apple will probably sell always less units than Android, but with much healthier financials, as their prices will be higher, and profits will come both from hardware and software. Android will make greater unit volumes, though average selling price and profits will be lower by unit, mainly moving to the handset vendors, and indirectly through ad selling to Google.

The second slice of the market that Androids are eating, is coming, therefore, from Blackberry and Symbian. A legacy niche seems to be what the future looks like for the Finnish guys, who’d better ask Santa Claus for the upcoming Christmas season for a time machine that brings the market back to several years ago, when they were the king of the hill, while the Canadian RIMM still sits on a volume leadership position (which is quickly being eroded) thanks to the cost of change that many businesses have to remove them (smartphone features at Blackberry were initially addresses to businesses more than to consumers, and very successfully, by the way). Still, their technical restrictions and limited functionality do not allow a bright future out of their niches, particularly when it is the consumer market who is driving more trends and techno than professional users.

The proof here is that the expectations for growth and revenue for these guys are more oriented to less developed markets, like Latin America or India.

For the moment, both Apple and Android seem to be able to enjoy their (different) success stories, and yet compatible, it seems. Fast growth, however, will side better with the Androids, whose armies will be eating a important portions of the market period after period… Vegetarians they seem, these Androids, as they are slowly eating the Blackberries. Vegetarians, but certainly not Apple eaters.

Technorati Tags: nokia,rimm,apple,steve jobs,smartphone,google,IOS4,symbian,android,blackberry,market growth

No apples for the apes

 

Tantalus was a powerful guy at his time in ancient Greece. Powerful enough to have been granted access to the gods, nothing less. Impressive.

Ungrateful though, he had an “inappropriate behavior”, and took with him nectar and ambrosia from the gods’ banquet table, and thus, “disclosed confidential information” to mortal humans.

That violation of the gods’ Standards of Business Conduct could not go through without punishment, and Tantalus was sent to Hades (the Greek version of Hell at that time; please note we carefully typed and initial “H” for Hell as confusion with “Dell” could have easily happen to our dear readers).

But not only was the guy sent there, where he might have eventually found a decent living by writing his memories and giving conferences and TV shows with forgettable American Presidents, the gods’ wrath went further. Instead of enrolling him in endless PowerPoint presentations about Standards of Business Conduct, which seems to be the classic punishment for normal mortals, they decided to teach him a lesson about ambrosia and nectar he would never ever forget: They placed him in a water pond beneath the most wonderful fruit tree in a way that when he wanted to calm his thirst off, water would withdraw from him, and when he wanted to reach for the low hanging fruit from the tree to fill his stomach, the tree branches would raise enough to remain always out of reach.

Thirst and starvation for eternity did not really seem a good plan. but we’d guess that is what happens when you fall short of expectations in such an exclusive club as Mount Olympus.

…

Microsoft is a really impressive company. Rich, knowledgeable, talented… a winning combination certainly. No wonder it is one of the best known brands, and much present in many people’s daily life, either as individuals or as professionals. Becoming the CEO there certainly gives you big green US presidents portraits, and, subsequently, a hell lot of power. You become a member of the super-exclusive elitist club of the people that appear regularly in Fortune magazine, and even the US President may ask for some of your time. Furthermore, if you wanted you could even have a yacht to win America’s Cup, or build spaceships to ascend to Heaven like a “Virgin”. You could say you reached the Mount Olympus of the 21st Century, you could say you are like a god on earth, couldn’t you?

When you imagine, dear reader, the banquets and conversations they enjoy in Mount Olympus, you expect at least fantastic goods and services, outstanding super cool products coming out from the companies they lead, from the companies that have put them in those jobs, would you not? “Product etiquette”, which, should it not be observed, creates an actual situation of “not living up to standards” that should end up in sending the non compliant guy to 21st Century Hades… (again, not suggesting a promotion within Dell at all).

Generally speaking, we think those super-exclusive people do well up there… but, being as human as people can be, there are always exceptions to the rule.

Enter Steve Ballmer, 50% Ape, 50% Man, 100% pure transpiration…

by the gods, someone bring deodorant to this guy

No wonder his sense of etiquette falls a bit short to expectations… but as well do his company products and services do, especially compared to other peers of his.

And, as in ancient Greece, somehow the market gods are delivering him slowly to the 21st Century Hades of the IT Market (again, not really suggesting he should be hired by Hell-Dell). He’s been placed in a pond of operating systems, beneath a tree of wonderful fruit in the form of smartphones…

Whenever he finds himself thirsty of operating system technology, the pond withdraws its androids, symbians, blackberries, iOS4s and even WebOSs, and whenever he wants to reach a piece of fruit, revenue raises, but not for him to “touch”, while a subtle breeze sounds in his ears like “not yet, kid…”

In very many versions of the mythological story of Tantalus, by the way, as much as in many artistic representations of the story, the fruit in the tree are red, shaped like a heart, fresh, juicy… Apples!

Technorati Tags: larry ellison,richard branson,apple,microsoft,hp,nokia,rimm,blackberry,palm,webos,ios4,wp7,smartphone,symbian,google,android,tantalus,olympus

Big Apes don’t play Quidditch

 

Those readers who have read the Harry Potter saga , total or partially, are surely familiar to quidditch, the most popular sport in the magic world where the full story happens.

Two teams, one against the other, each one with the objective to score more points on the rival’s goal than the other.  Similar in principle to rugby, American football, basketball or soccer.

There is an important difference, though: Quidditch is played with four balls simultaneously.

First there is a quaffle, which is the biggest one. Players are supposed to pass this ball through three different rings at one of the field ends, which are the rival’s goal. Each time a team succeeds, they get 10 points.

Then there are two bludgers, a bit smaller than the quaffle. These two are used by one team players to beat, harass and distract the other team players, and make it more difficult for them to score with the quaffle. Two specific players have special bats to hit the bludgers against the other team.

And finally there is the smallest one, called golden snitch. It is the size of an iPod shuffle, and has two fast wings. It floats ans wanders around erratically, and one special player of each team, called the Seeker, has to be the first to catch it. Once it is caught, the match ends, and the team whose seeker got it gets a 150 point bonus.

If quidditch were played without a snitch, it would not be fundamentally different from other similar sports we mentioned before, would it? Indeed, as you might have guessed, it is the snitch that really makes the difference, for it depends almost on a simple flash of genius from the Seeker to strike a 150 points bonus and determine the end of the match.

Both teams will normally score regular points with the quaffle. Both teams will me more or less lucky in harassing the contrary with bludgers. But it is just one team which will get the snitch. Just one.

And this is the situation where Big Ape’s Microsoft is about Windows Phone 7. But his problem is that he still is thinking rugby, or basket, football or soccer, and he’s not understood that there is a snitch around that needs to be caught and really make a difference. If he just thinks quaffles, his team might score. But the other team certainly will too. As a matter of fact, if he plays against iPhone, Android, Blackberry or old-glory Nokia, these have already scored a heck lot of regular points more than he has. And the two first competitors of his have already seen the snitch and are moving their seekers towards it.

And, we are afraid, the only bright and shiny little thing floating over at Microsoft’s camp is his polished sweaty head top when he jumps across the scenery like a gorilla on caffeine overdose.

too much coffee, isn’t it, Big Ape?

Technorati Tags: steve ballmer,microsoft,apple,nokia,blackberry,ios4,wp7,windows phone 7,rimm,android,symbian,Steve Jobs,Bill Gates,smartphone,harry potter,snitch,quaffle,bludger,quidditch

Footnote: This post is dedicated by Sirius to Percy, Luna, Neville, Hermione, McGonagall, Hagrid, Draco, Rita Skeeter and even Bellatrix… you (should) know who you are…

A matter of faith

 

We have just been aware of the first commercial delivered by Microsoft to promote its Windows Phone 7 smartphone.

Really: The new advertising campaign by MS, on behalf of its WP7 operating system for smartphones.

When we watched it, the first impression we got was that it could not be a better match for Microsoft’s image. They have taken a lot of money to produce a technically correct ad, and have compressed to many things to try to deliver a simple message.

Typical from Microsoft: Too much complication to express something simple, too many taglines to deliver a theoretical breakthrough.

The message was much simpler: In theory, WP7 will deliver a user experience that will avoid situations like the ones depicted in the commercial.

The communication: Complicated, difficult to understand, and really needs time and many replays to get the message through.

The tagline: As in every Microsoft product, 90% of it is redundant and/or useless, 5% could be useful or valid, and the remaining 5% is to pay for the campaigns that will try to justify the previous two. Take a look to any Apple commercial: Simple, concise, and to the point. See samples here, and here, and here.

Now, having said this, the next thing that pops in our minds is: If WP7 is going to be so different that it will fade away other already proven and well established alternatives, why and how is it going to make that shift in the market happen?

The communication miserably fails to achieve this. It is a matter of faith in them what this add is asking customers to make, just because it is Microsoft.

We have all seen situations like the ones describes in the add. And many of us have even starred them, we must admit. It is not, however, because of the phone itself. It’s not because of its operating system. Curiously enough, the add targets mainly Blackberries for some reason, and we’ll come back to this later. It is the contents what matters, it is about all the things we now can do or access to just by having a smartphone. And from a content perspective, and from a features point of view that Microsoft pathetically challenges the faith they are demanding from their fans, if there are any left. Too late, too featureless for a bride in a wedding, we said a few days ago.

Back to Blackberries… what is Microsoft’s fixation with these guys? No iPhones, no Symbians, no Androids. Just Blackberries. But all of them are really blocking the door to the WP7s. It could be that Steve Ballmer does not want to be like George Bernard Shaw inviting Winston Churchill to one of his grand openings once. Mr. Shaw sent two tickets to sir Winston with a note that said “I am presenting a new play, and I would be very glad to have your attendance. I am sending two tickets so you may come with a friend, should you have any.” To what sir Winton elegantly replied: “I appreciate the honor, but state matter make it impossible for me to attend,. I shall gladly attend a second performance, in case there is any.”

 

We could imagine Apple, Google or Nokia execs receiving notes from Steve Ballmer with sample units of WP7 and notes saying something like “We would appreciate your feedback and opinion about the new operating system WP7, as this is going to make people forget about their current phones. We send several units in case you would like to request a friend to help you using them, in case you have any.” To what Jobs, Elop and Eric Schmidt could easily reply: “Too busy counting revenue and profits from our smartphone divisions; impossible to care for WP7 right now, but we will gladly review version 2.0 should it ever exist.”

 

Technorati Tags: steve jobs,eric schmidt,elop,steve ballmer,bill gates,ios4,blackberry,nokia,android,google,smartphone,IOS4,microsoft