When there are winners, there have to be losers, even in a rapidly expanding market such as this.  Nokia, the once titan of the category, that robbed market share from the inventors of cellular telephony (Motorola), although still #1 are now falling like a rock.  Palm, who arguably  added the “smart” aspect of smart phones by creating the PIM (personal information manager) elements now ubiquitous, recently bought by HP are now defunct and their legacy, sadly, may follow.  Research in Motion, RIM, makers of the ubiquitous executive gadget of Christmas Past are down to a meager 3% and declining.  While Google and Apple, who dominate the mobile Operating System market share see no end in sight.

Google’s acquisition of Motorola Mobility (MMI) brings to the table the largest patent dowry available:  17000 granted patents plus more than 7000 in process, including some unimaginable radio and communication intellectual property.  This not only gives Google the ability to counter the myriad of lawsuits that make analysts weary of the future of Android, but can actually put them in the driver seat if they weren’t there already.  Unfortunately there are always downsides to every upside.  In this case its in the form of a Taiwanese and 2 Korean companies.  Yes, you guessed it: HTC, Samsung, and LG.  These 3 plus Motorola Mobility are the main adopters of Android and responsible for Google’s rise to the top OS in this category.  Together they represent roughly 25% of the market or about the size of Apple’s iOS.

The question is, my loyal reader (singular), will they pick up their marbles and go home (with a layover in Redmond, Wa)? or will they trust Google to keep MMI running independently?  Yeah right!  Just like other things in life, some win, and some lose.  The ones that win by just waiting it out, Microsoft have a  real chance to become the third horse in the race.  Mainly because they will be the only remaining independent.  But with $53B burning their balance sheet, how long can they afford to stay that way?

Enjoy.

This is the deal:  Microsoft has not been able to do anything good in the mobile world even after pouring millions (if not billions) of dollars.  And Nokia, once the giant to follow in the cellphone industry did not see the modern smartphones come.  Together, well, in this blogger’s humble opinion, is no better.  Nokia’s hardware, as good as it is, is just that: hardware.  They have never been able to stand out as a software supplier, areas where both Google, and Apple, the 2 leading forces in the smartphone world, excel at.

On the other hand, Microsoft has not been able to cut the cord.  Still the number one player, by far, in fixed applications, has just been a disaster in the mobile world.  Windows Mobile, arguably one of the first “smartphone” OS’s out there, did not evolve.  And Windows Phone 7, a great approach, is a classic case of “too little, too late”.  While Balmer, Microsoft’s CEO, brags about the eight thousand apps in WP7′s marketplace it remains at least an order of magnitude below iOS or Android.  Carrier’s have dozens of smartphones in their lineup already with access to these apps and users preference, either by cult or anti-cult.  NokiaSoft (or MicroNokia) will have to do the equivalent of pushing a herd of elephants up Mount Everest, one by one, without a sherpa, oxygen, and very little food.

In a letter to Nokia’s associates, Stephen Elop, Nokia’s CEO explained the transition his company will make to dump all activities on Symbian OS in order to adopt WP7 as its main smartphone OS.  I find interesting he used the analogy of a “burning platform” and how people do desperate things in desperate moments.  Kudos for admitting the desperate times and comparing a partnership with Microsoft to “jumping into the icy Atlantic”.  Although it may seem a bit too much, it is more like jumping into the icy Atlantic, naked, in the middle of the night, and picking up drowning friends, with luggage, on the way down.

Granted, these are both outstanding companies with a history of innovation and impressive comebacks (remember Netscape?).  But to pull this one off will require oodles of money, several miracles, outstanding negotiating with the carriers, and great, great products.  They’ve both done it in the past, but will they do it again?  But, given where they both are in this multibillion dollar market, do they really have a choice?  Maybe not.

So good luck in your marriage, hope you both keep your maiden names.  And please do not argue about naming the kids, hire professionals  instead.  Neither of you have a good track record there …

Enjoy.

The OS is archaic, old, last century (well, last year at quarter) in a market that moves faster than you can keep up with.  When Motorola, HTC, and others are boasting Android 2.2, and others talk about Android 3.0, Dell launches a 1.6.  Quite frankly what a waste of one of the most beautiful displays I’ve seen in this category.  I hope Dell brings out an update soon since a lot of apps are not compatible to it (like Touchdown, the only real way to get to a corporate Exchange email/calendar system).

The device is really good looking, and Android is just great (yeah, even the ancient version 1.6).  Just take it out in any public place and people will ask you what is it.  But you will have to take the laughs when you pick it up as a phone.  Maybe Dell, in its infinite wisdom, thought people will use a bluetooth headset to answer the phone or will not mind the geeky look of a huge tablet on your face.  In any case, people will want to know what’s your fabulous device.

Anyway, I have to give them credit for making a bet.  Tablets have 3 places in the market: a substitute for a laptop, a substitute for a smartphone, or a third device.  Apple’s iPad was clearly a bet on the “third device” and against all my predictions, has hit a home run.  Microsoft had bet for the better laptop case in the past, with … well not so good results.  Dell bets on a better phone with the Streak, even with an AT&T subsidy.  Good try, but I don’t think it will work out.  It is too big to be your only phone.

If you’re going out for dinner it takes up a big chunk of the table and it is not pocketable at all.  You’ll need your phone anywhere you go, but a “cleverphone” is not good enough since you may want to use it as a GPS or look for the restaurant, or all the other things we’re used to do with our phones these days.  So you need a smartphone.  At that point you’re in 3rd device territory so you might as well opt for a 7, 8, 9 or 10 inch display.

Oh well, as much as I wanted to toss my iPhone I will still have to wait for a good Android phone for AT&T.

Enjoy.

I can’t say either action is a real surprise, given the success – or lack thereof – of both products, but it begs the question of what the hell is so unique about Apple that makes them so successful?  Both products were reasonably good and both came out with some marketing strength and high hopes, albeit none had Jobs sticking his turtleneck out for.  In fact one can almost say they are truly cleverphones.  Nexus One sold directly by Google lasted a few months but managed to sell more through the carriers than direct.  Kin, on the other hand, didn’t even last enough to hear comments about it.  Microsoft has decided to protect their channel by pulling it out of the market and allowing HTC, Dell, Samsung, and LG who will release Windows 7 Phone Series (gotta love Microsoft’s marketing) devices this year for the “holidays”.

What I think is really happening is that even strong players like these tend to underestimate the power of the wireless carriers.  They own the customer since people buy phones in order to get a service, not the other way around.  Smartphone OEMs have learned the game and have succumbed to the carriers’ will, quite successfully I might add.  The market has turned into a selection of services where you pick a desirable phone for.  In other words, I know I want AT&T, Verizon, Telus, Vodafone, etc.  for whatever reason and then I select my phone.  Nexus One tried to separate it out unsuccessfully, even given the fact that Google didn’t need to make money on the phone!  People still bought the subsidized phone through the carrier in spite of a long term commitment.

Microsoft on the other hand didn’t try to sell direct, but attempted to bypass OEMs, where carriers buy more devices from.  So it is easier for them to add a Windows 7 Phone from HTC to the portfolio they already buy from them.  Besides, Kin was a succession of project “Pink” in which Microsoft had an agreement with Verizon to supply a device.  This contractual agreement forced Microsoft to release Kin with an OS that was not quite Windows 7 Phone.  In addition to that Verizon changed data plans and made the Kin less than attractive cost wise.  Again, a wireless carrier took control of the market.

One can also blame Palm’s near demise (and HP’s gain) on carriers’ acceptance or choice.

Whatever the reasons are, wireless carriers will continue to dominate and control the market.  Granted, both Google and Microsoft have a potentially great future with their mobile OS without their own branded phones as long as they follow the desire of the carriers they sell through.

The only exception so far is Apple.   AT&T has gained millions upon millions of customers that wanted one and were willing to compromise their carrier selection for the privilege of carrying an iPhone.  When Apple opens up to Verizon we’ll most likely see them run back and abandon AT&T.  Apple will churn the base, Verizon will add users, and AT&T will lose them.  Very few new iPhone users, but Apple will continue to sell them new ones.  Will Jobs be open to have an unsubsidized dual system (AT&T and Verizon) iPhone to sell direct so users can declare him his loyalty?  I can see it if AT&T and Verizon decide to create cheaper iPhone plans since they will not subsidize the phone anymore and create a price war.  We’ll see.

But for the time being iPhone remains the only device requested by name and the carriers maintain control over everything else.  For how long?

Enjoy.

AT&T has close to 6 million non-phone devices on the network.  Now why is that even relevant, my fellow reader (singular)?  Simply because there are a lot more non-phone devices and a lot more things out there that need to be connected than there are phones or people.  Yes, they may not be sexy, play music, browse the web, or even wash your car, but they essentially do everything else.  Beyond the obvious (Kindles, iPads, etc.) these things are everywhere and in desperate need to be connected.

Take your car, for example.  If you have Onstar it’s already connected (not with AT&T) so you know some possible apps.  But imagine a world in which you go to Google Maps, plan a route and squirt it into your car’s GPS!  Or simply download the movie you want your kids to watch from your home DVR.  Your electric meter one day will be connected to so you can monitor your consumption real time (Ok, Ok, i don’t know why would I want to do that either, but you can).  Every thing out there can be connected and can benefit from the internet.  But where things really start changing is with Enterprise Applications.

Next time you receive a FedEx or UPS package go to the web  immediately after you sign for it and voila it says received, in real time because the device where you signed is connected.  The copier service personnel can consult schematics and order parts in real time when his/her machines are connected. Or the copier can ping someone when it’s running out of toner; the end of the  empty copiers or useless service visits.  Making every device a smart device has endless  applications that are starting to look affordable.  Ma Bell’s humble cellular non-phone numbers are starting to show growth.  The ubiquitously  connected world is getting started.  Make sure you are ready for it.

Enjoy.

Granted, their products are good, WebOS is a neat idea, but they have lost the clout they once had.  It is sad to see a Palm, in a way the inventor of the category suffer this fate.  But hey, in this industry you have to listen to Bob Dylan: “You’d better start swimming or you’ll sink like a stone, ’cause the times they are a-changing.”

So what happened to Palm?  Execution and focus, lack of them, that is.  Back in the late 90′s with an explosive IPO after a spin-off of US Robotics everything looked rosy.  But they got greedy instead of focused.  But as Michael Douglas said in Wall Street: “Greed is good”.  No question but greed has to have a source.  And my fellow reader (singular) that has to be your products, not Wall Street itself!  It is my theory that Palm, as many other great corporations get too caught up in Wall Street’s metrics, quarters, and their leaders making money off of money alone, that they loose focus on the main thing:  Their products.  Countless corporations (Google, Apple, Toyota, Ford, etc.) are the opposite: they have focused on creating the best products or services, and Wall Street follows.

Greed is indeed good, but with a focused source.

Enjoy.

During this year’s Mobile World Congress in Barcelona, the world’s most important mobile trade show, everyone seemed to think that a new OS (Operating System) is the way to go.  It is unclear to me what makes them think that.

First, I’m a bit tired of the overuse of the OS nomenclature.  Few deserve this title since they are really adding proprietary layers on top of Linux.  Actually most do, even the beloved Android and iPhone.  They should all be called “platforms”.  However that is not the cause of my outrage. No.

Second, who does the branding for these things?  Symbian, Bada, MeeGo, Mobiln, MeeMo, LiMo, Else, and others in addition to the successful iPhone, RIM, and Android.  My favorite name in a sarcastic kind of way will have to be “Windows 7 Phone Series”.  Redmond finally got something that does not deserve bashing throughout the blogsphere – a la Vista – and decides to use it everywhere.  I get it, kind of makes sense.  But, my fellow follower (singular) Windows 7 has a nice ring to it.  Windows 7 Phone Series does not, I’m sorry.

Third is that application developers have better things to do than to port their app to the “OS” of the day. And who is thinking about users? Thanks to this inflation you will have to scavenge the world to find the right app if you made the mistake to buy a platform that didn’t quite make it for whatever reason.  Now that is an outrage, but not the point of my post.  Suffice it to say that there will be plenty of casualties in these OS’s flood.

Amidst this Mobile OS inflation there is one that in my opinion deserves mention:  MeeGo.  Sure, the name sucks but I’ll have to give it some points for obscure geekyness.  A shape-shifting 9000-year old alien from the planet Marmazon 4.0 has to attract the dormant or not so dormant geek in most smartphone users, from the Blackberry suits to the Android hoodys.  Let’s just hope it doesn’t suffer the fate of the CBS sitcom who didn’t get the chance to finish a single season mostly because it wasn’t any good.

Anyway, MeeGo is worth mentioning not because of the fact that it is a joint venture between Nokia and Intel.  MeeGo is a platform that promises to bring smartphones to the 2010′s by using an x86 architecture instead of the perpetual ARM.  x86 architectures are ubiquitous in the PC world whereas ARM architectures have their humble roots in the embedded world (you know watches, sensors, WiFi radios, set top boxes, routers, cellphones – Ok, not so humble).   ARM uses RISC – Reduced Instruction Set Computing – vs x86′s CISC – Complex Instruction Set Computing.  This difference has allowed computers to run more complex software and algorithms so they can behave like, well, computers.  ARM on the other hand is fundamentally more power efficient, which explains its huge presence in mobility.

Until now the lowest x86 has gone is Intel’s Atom family (which drove the netbook “revolution”).  What is so new about the Atom family?  Low power consumption in an x86 processor.  At the same time, Qualcomm has been touting its Snapdragon 1 GHz+ Arm based systems – base for the reference design of my favorite name Windows 7 Phone Series – and now powering some “smartbooks” (again with the naming).

You see what’s happening under the hood?  New product categories are being launched, OS inflation is flooding the mobile world but at its real core there is a tremendous collision happening.  ARM getting more powerful while x86 is getting more efficient.  This brings us back to why MeeGo is so significant for the industry.

x86 based phones are out there but none has really made a mark basically because they haven’t offered anything new.  In this blogger’s very humble opinion if Nokia-Intel get it right (which is a big “if”) this could be the next revolution in mobility: the power of a real computer in the palm of your hand.  With html 5, 4G networks, ubiquitous 802.11n WiFi,  comparative shopping, location based services, “billions upon billions” of webpages, will now be available to complex software thanks to CISC based smartphones.  By the middle of this starting decade we will all wonder what was the hype behind all these “clever-phones” that could barely browse the web.  We will remember them as we now think of the first color Mac’s.  Very cool but just a sign of what’s to come.

Enjoy.

Without having had my hand on it it is tough for me to have an opinion on its performance. But given the engineering track record of Silicon Valley’s favorite they probably nailed it (even if they didn’t you know there will be a Nexus 2). But that is not what will make it a success, nor is that what is surprising about it. Motorola, LG, HTC, Sony Ericsson, and others have or have announced plans for Android powered smartphones. Yet, Google, the author of Android, decides to put out a device that competes with all of them. Moreover, Google does not have to make money from it (even though they will) since it is really a bet on mobile advertisement revenue. So far nobody has found a way to make money on mobile ads, but it is my contention that if somebody can figure it out it will most likely be Google. It is hard to imagine that Google decided to compete with their hardware partners just to make a “few” bucks selling hardware. They most likely did it for the same reason Google does everything else: to disrupt a market.

Imagine a world in which you do not have to pay for cellphone service. Pretty much the way you didn’t have to pay for TV in the past. Advertisers paid for it and consumers take advantage of that money flow. I know, I know, those days are waaaay over and not likely coming back anytime soon (until Google has a say). But in the mobile Internet business the biggest barrier to entry IMHO for mobile search to explode is the hefty $30 – $50 a month data fee from your preferred carrier plus a $100 – $300 “club entry fee” for your favorite smartphone. Sure there are hundreds of millions of smartphones out there and there will be more in the years to come, but the mobile search revenue still dwarfs the “fixed” one. Granted usability, contextual value, and other issues are still important. But Apple and Google will shortly solve those. Cost will remain a barrier. Unless, yes, unless it is free. In other words, paid by advertisers. You and I can pick our favorite smartphone subsidized by a carrier to get your voice revenue and Google pays your data plan as long as you search. Weird? Sure, but then again Google is known for its weird business models.

Enjoy.

It is all over the news that Eric Schmidt, Google’s CEO, resigned from Apple’s board recently citing “conflict of interests”. Businessweek published an article contrasting the two companies. It highlights the fact that they are still aligned against Microsoft, but their ideologies are vastly different. There are some speculative blogs that tie this resignation to Apple’s removal of Google Voice application from the iPhone store. Although it might have been the proverbial “last straw”, it is hardly the reason. How much conflict was there really and how different are their interests? Google Voice proves the point in a very interesting way.

For those of you who didn’t get the traditional Google “invite” for Google Voice or never heard of its acquisition of Grand Central a couple years back, it may sound weird that a voice app will be so game changing. But Gran Central started with a simple concept: You sign up and then you can manage all your numbers every way you want by writing rules to deal with your all calls. Your boss calls any of your numbers and you decide where and when it rings. Let’s say you want it to your cell only during work hours (you don’t have to tell him/her it is 11 -3). An 800 number calls and you can send a “number canceled” tone so they take you off their list. Your spouse calls? All you numbers ring. Anything else goes to voice mail. And – this is the feature that makes me drool – it is a single voice mail for all your numbers. And, are you ready for this? you get an email with a visual version of your voice mail. Sort it, read it, delete it, whatever you want! No more fiddling around with “6-6-6-4-7″ or whatever weird combination of digits you always forget to look for the one important message you know you missed!
Cool, so far, isn’t it? How much will you pay for the convenience of your true Personal Digital Assistant? $20, $50 / month? How about nothing? Sounds like a deal doesn’t it? Not too fast. Being now owned by Google you will expect them to make money. And yes, you guessed it, through advertisement. They recently were awarded a patent in which they claim all sorts of advertisement opportunities: ring-tones, busy signals, call waiting, while you wait for the call to be connected, etc, etc, etc. Although some may be annoying to users, I’m sure Google will not abuse it so you want to turn it off. And that model is where Apple and Google do not see eye to eye.
Apple has made boatloads of money by keeping control over every element of the value chain of their solution. The little (not really little) exception on the iPhone is the cellular carrier. But you’ll have to forgive them (for now) since building worldwide cell networks requires amounts of cash that even Apple cannot pony up. But it is controlled through a tight partnership with, for example in the US AT&T. Apple sells iPhones only to them (again for now) and in exchange the vow not to allow applications that will cause damage to AT&T’s cash cow. As you can imagine, Google Voice is one of those. So Apple pulls it off the App store.
On the other hand, Google is a friend of the open source initiative. They claim (and quite successfully) that openness is the way to go. Allow the best software engineers to produce the best product and improve on it around the world. We will all benefit. Android (Google’s mobile OS) is an example of that. We will soon see lots of new phones using this OS and they will all be slightly different but will share the core (Linux kernel with a Webkit browser) defined by Google but handed over to the industry, source code and all. Chrome OS (which isn’t really an OS either) will follow suit. Google’s model is based on making money by all the information that passes through their cloud (or humongous array of computers).
The core is Google’s mantra and let the best software win. Whereas Apple is end-to-end control since I am really the best. One can draw parallels to the political ideologies of the world and reach unsubstantiated conclusions on what may happen some years after this “wall” has been built. I won’t, just to avoid hurting cult fans in either side of the battle, since I am not sure, my faithful reader (yes singular), which camp are you on.

Enjoy.

Research in Motion, responsible for those of us “thumb-typing” all day long and undoubtedly king of the smart phone market announced quarterly results today. Impressive!! They beat analyst estimates again. Yet, the stock traded at some point after hours almost 10% below yesterday’s close (it has then recovered all but the last 2% or so). Is the Blackberry is running out of juice (I hate puns!) at last?

People buy things because of the things these things do (whaaat?). Applications are what sell devices, not the devices themselves. Sure a sexier iPhone will sell better than an ugly one but first and foremost you have to want to do what the iPhone does before you consider it.

Blackberries mobilized email. An applications that had been relegated to a computer and involved carving out time of your day to actually do it. RIM leveraged their know-how in two-way paging technologies to create email “push” technology that allowed devices on a cellular network to receive email in real time. They had perfected the thumb qwerty keyboard in the RIM- 950 (leapfrog) so they had a great input UI. They added a screen and a great scrolling interface. Lastly (and the most important component) they created the Blackberry Enterprise Server (BES) that made email “push” technology seamlessly integrate to Microsoft’s Outlook and voila, by April 2000, mobile email was born. In other words, they created the perfect combination of device, infrastructure, and services for the application at hand. Over the past 9 years they’ve managed to dominate the smart phone market by essentially bringing mobile email to more and more people from the corner office to around the corner soccer moms and hockey dads. Sure, you see some people running SAP interfaces, Syclo apps, Salesforce.com, and a bunch of other business apps on them, but they are really, really very good for email only and most importantly email is what lures people into buying them. Are there more people that need to mobilize email? Not really and they now have too many options to chose from. That may be the reason why Wall Street did not get excited about another blowout quarter by RIMM. They have to clearly prove a new application base in order to grow significantly.

Similarly Apple had found an amazing way to sell and distribute digital music that made everybody win: consumers, record labels, and mostly, well, Apple. When they introduced the iPhone they leveraged that, added telephony (which was no big deal anymore) and found a great way to mobilize the internet. A real browser with an awesome user interface made it really useful on the go. But forgive my heretic comment, but iPhone, 3G, and 3GS are reminiscent of the PC speeds of the 90′s and the RAZR, KRZR, ROKR sequence: essentially the same thing with an minimal evolutionary advance.

Palm is now trying to combine both email and browsing but, like I pointed out in a prior post, it is just dividing the pie further (if they are lucky) not really growing the pie or creating new pies.

In other words we need a new mobile application that will create new categories of devices and grow the market. Think about it, we started with simple telephony, we added PIM (Personal Information Managers), text messaging, media, pictures, videos, games, email, location (gps), internet browsing, books and magazines, and there may be a couple more. But the list really stops there. It is all about things that are tethered today and need to be mobilized so we can do them any time and anywhere without having to dedicate special time to them. Or things that we keep in one place and we want to take with us everywhere we go.

The app store phenomena with various degrees of success is, in my opinion an attempt to find other things to do with your device as a secondary functions. Good idea, don’t get me wrong, but if wireless carriers, device manufacturers, OS suppliers, etc. all have an app store, few are making money, and more importantly few app developers are making money too it is hardly what you would consider a market changing catalyst the way the Palm Pilot, StarTack (now I’m aging myself here), BlackBerry, or iPhone have been.

There are several possibilities here: Either someone finds something else to mobilize which I find difficult to believe at least on a massive scale (the PC industry has not found a lot of new things to automate on a fixed basis that will later need to be mobilized) or we approach this in a totally different way. The fact of the matter is that your Blackberry, iPhone, MotoSurf, Palm-pre, pro, pra, or pri are a commodity.

The point is that although there may be some innovation coming up to a device near you it is only evolutionary. It may be in the form of a sexier phone with more features. But to really be a catalyst for change the networks need to build out bandwidth and capacity. Network addressable storage has to come to a consumer simplicity, and innovation has to come in the form of services and data delivery. Why? well …. that’s a topic for another discussion.

By the way, make sure you start digitizing your entire life in preparation for it. Remember whatever you own that displaces water it is not portable. If it is stored in binary format it is.

Enjoy.