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.

Now why would Microsoft pay big bucks (really big bucks) for RIM only to combine a decreasing market share with an almost non-existent one, may I ask? I don’t seem to find the right answer.  I struggle with the idea on any synergy that the merger will bring.  RIM needs to invest to bring products up to par with Android and iOS based ones.  Their Acquisition of Torch Mobile (who brought you the Torch) was an attempt to do that but it seems to fall short: it is not a wow phone.  Even if corporate fans buy them, we’ve all seen Androids and iPhones show up in the enterprise and for the most part successful using them for the same applications.

At a first glance, the synergy seems to be there.  RIM’s corporate fans and huge installed base of BES – which happens to mobilize Microsoft Exchange for the most part – and Microsoft has been unsuccessful in bringing a decent smartphone to the party with their Windows Mobile, Windows Phone, and other inroads, but understand well how to sell to the average consumer.  Add a bunch of cash to mix and it is seemingly a marriage made in heaven. But not so fast, my fellow reader (singular)!  RIM’s market cap is in the neighborhood of $25B plus the typical premiums tech deals get may drain all of Microsoft’s cash.  Although it seems like a better investment than dividends or buying back stock it will probably not leave enough room to invest what it takes to win in this market.

Both companies need a miracle in the smartphone space.  But Microsoft has other legs in the stool, albeit declining too but at a slower pace. And most likely want to conserve some cash to maintain Windows and Office in the spot they have as well as their Bing and Xbox franchises.   Whereas RIM doesn’t have pagers anymore and more and more viable alternative devices are popping up in the market and making their way to the enterprise.  So while RIM passes the Torch (pun intended), Microsoft passed on the Kin and both are being left behind in the race.

Now, a 42% drop is good to cover our short positions because you don’t want to be that greedy, especially after what happened to Palm (which I predicted the exact opposite).  Nobody will blame you for covering in the vicinity of $45.  But, if you don’t believe in Microsoft’s acquisition:  short, short away till the cows come home or the stock dips another few bucks!

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.

Hey, we’re all for standards, even better if they are open, but is it realistic to essentially ban all Flash designed websites from your mobile iProducts?  Microsoft definitelly adds some muscle to the fight, but Shantanu Narayen (Adobe’s CEO) got there first.  An estimated  70% of websites with video use Flash.  It has a great advantage over html5: it exists today.  It has also a huge  installed base,  works across browsers, and makes it easier for non-geek developers to use.  The question is: will the the explosion of browsers (especially mobile) makes an open standard needed even more? Indeed, but it will not happen overnight, even with the Steves’ weight behind it.

Claiming that Flash crashed devices and drains battery is a bit too extreme, unrealistic, and quite frankly arrogant.  Not that there’s anything wrong with that.  But when you consider that the iPad has a 6000 mAh battery compared to the 1200 mAh battery in the iPhone 3GS sure, I’ll give you 10 hours of video too!  Simply put, battery problems are solved with batteries.  You want more battery life? put a bigger battery in.  Granted, it drives the device’s weight, but so does the display. Palm Pre, RIM, Windows Mobile (and soon Android) devices that support Flash lite are roughly the same weight than the iPhone, and crash just as often. Reality is, Flash provides the programmer control over the video experience and that makes Jobs angry.  He wants to control it all!  As per Microsoft’s motive?  Well, it just sounded like a good idea to blame computer crashes on somebody else’s software for a change.

Flash’s biggest limitation is the lack of mobile platform support.  It is a heavy weight platform that so far only works well on “big” desktop OS’s.  There is a Flash Lite out there but it is not 100% compatible with all Flash’s features.  But that will have to change soon, if Narayen wants to stay on top.   But then again, with more powerful processors and graphics coming to a mobile device near you will make this limitation a thing of the past.  In any case, it is this bloggers opinion that html5 video will eventually take over video on the internet.  The timing is the unknown.  But I don’t think one should start to short Adobe (ADBE), at least not because of Flash.  Au contraire mon fraire, this makes them a pricey acquisition target for cash rich software companies.

Enjoy.

Sure there’s some intellectual property and some innovation left in the inventor of the category.  And it is the fastest growing and one of the most profitable markets in the industry but the world does not need that many mobile Operating Systems (OS) to choose from.  I’m sorry.  As I’ve pointed out before, to unseat the iPhone it will take more, a lot more than multitasking, a cool form factor, and a clever UI.  I’m sure HP will make products people want to buy, but the question in my mind is will HP be able to create the ecosystem that will finally challenge Apple?  I quite frankly doubt it.  Not because it is impossible, or because HP doesn’t have the skills, it is because it is not in their DNA and Palm does not bring that to the table.

Other bloggers (the real ones) are talking about tablets and netbooks using WebOS.  Now that is even crazier.  If a stretched out iPhone makes little sense, a bloated Pre (will they call it HP-Pro or the Maxi?) doesn’t make much sense either.  A clever-phone OS will make a tablet look like a dumb keyboardless PC (no offense Steve).  Besides, with no app store, no cult to follow you, no content delivery, no store chain, no Steve (sorry Mark) things don’t look too promising.  Besides, HP is a much more powerful brand than Palm, so it’s not that they’re bringing that to the table.

So, my dear follower (singular).  Let’s just regret having covered our short a day too late and wait for their next move.  An app delivery company? video distribution? or perhaps music delivery?  We’ll see.  But one thing is certain: there will be more of these moves (some may be really big).   Microsoft, Dell, HTC, RIM, and others will be on the M&A news soon.

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.

This strategy represents a hardware/software branded device from Microsoft in a sense competing with its own OEMs.  All those companies however have not shown any loyalty to the Redmond folks since they have diversified or totally migrated to the Android platform.  So I guess Balmer decided: Screw them I will go Google … sorry I will do like Apple … not really, I will do my own hardware and control my own destiny.   Good move?  We’ll see.  But definitely not a bad one or a move that will damage any OEM relationships.  The world is ready for a diversity in OSs and the smartphone category is the fastest growing category in the industry.  Microsoft cannot afford to be the fifth.

The question is:  Will this make a difference?  Not likely.

Microsoft has by far the largest market share in the enterprise – with “big Windows”, not smartphones, that privilege belongs to RIM.  It boasts millions upon millions of applications and it is the “standard” enterprise Operating System.  These are not 99 cent apps, no! These represent real money for enterprises and Microsoft.  A simple copy of Office may go for hundreds of dollars.  Why? because it is the defacto standard (for now).  The smartphone world behaves very different.  With the exception of email and a couple of minor “connectors” to ERP systems there are very few apps for the enterprise.  In fact Windows Mobile today has the largest number of  enterprise ISVs (Independent Software Vendors) but they specialize in niche applications like inventory, supply chain, delivery, fleet management, etc.  The devices these apps run on are not your typical HTC smartphone Fender edition but very specialized hardware made by Motorola and others.

The thing is:  The Microsoft name, which carries a lot of weight in the enterprise, does not represent a mayority choice for the consumers as it does in PCs or in those niche applications.  The perception of a “standard” OS with millions of applications does not exist in the Smarthphone world.  There are millions of apps for several OSs, in fact lots of apps are available for most smartphone OSs (paradoxically Windows Phone is typically the last one to be developed).  So my contention is that even if Microsoft comes up with a killer device it is an uphill battle to go after RIM, iPhone, Symbian, and Android.  It may much better than OEM versions since Microsoft has intimate knowledge of hardware and software to make it so, but it will hardly take the world by storm as its competitors have.

Good luck Microsoft and thanks for giving us all something to write about and for another great opportunity for a clever Apple commercial.  I’m sure there’s a map for that somewhere.

Enjoy.

I know what you’re thinking: Jobs’ vision was better than Ballmer’s, which may be true, but I believe Jobs’ team executed better than Ballmer’s. At the end of the day both companies had to catch up to Research in Motion’s Blackberry dominance in the smartphone market and they both had the opportunity to do it with a mobile browser. Let me explain. The common vision here, which in hindsight sounds even lame, was to allow web browsing with a cellphone. Apple executed that vision since the first version with a flawless browser experience. While Microsoft decided to develop very limited Pocket IE with their traditional first-version-to-be-fixed-several versions-later approach. The networks weren’t ready for a “big boy’s browser” anyway. Several years later Windows Mobile is a distant follower in the race that will most likely define the next decade.

Same vision, radically different execution. So my contention is that execution is really the cornerstone of leadership. One could argue that execution is what provides credibility, but that is a “rear view mirror” approach. Vision with execution is what leadership is all about. Again, I do agree that a vision needs to be clear, compelling, and credible to inspire execution. And that is the true definition of leadership.

Enjoy.

Anyway, Android is now adding true multitask capabilities, a better than ever PND (personal navigation device) performance – with accessories and all – as well as a notification panel that keeps you in control of what you want to be notified about, when, and how. Personalization – which is really tough to do on the iPhone – is what’s new! Of course most contenders will catch up with features, but one has to analyze the cultures behind each device to understand what’s really the key and what markets they will appeal to.

Apple, of course is the “I control everything” culture. I have the best designers in the world, and I have apps, music, and all, so the end-to-end experience is Applesque all the time. Things usually work seamlessly well and when problems arise, they usually get fixed before the people get unrest. I call that the Emperor culture.

RIM, on the other hand is also end-to-end, but it is clearly a messaging centric company. Email is their roots and will never compromise the ability to input text the way God intended it, with a real keypad feel. Its OS is solid, secure, light, and simple to use. A true “Executive” style culture.

Nokia is a mass marketer. A phone for every liking is their strength. How can they have 50% market share otherwise? They have keyboards, touch screens, small, big, medium all colors, etc. This is a bit confusing for power users and it does limit their ability to have a comprehensive set of apps that can cover all those phones. They are a true mass pleaser and not too enthusiastic with the powers; a socialist if you will.

Microsoft, well, what can we say about our friends from Redmond? Are you a PC? then you know what i mean. There are probably more applications written and running for Windows Mobile than any other OS out there (the majority of them are quite nichy – for warehouses, UPS drivers, etc.), since a big number of developers is familiar with the .net framework and the mobile version called Compact Framework (CF) is similar enough in style. When more than one app is running at the same time they tend to step on each other. Unfortunately, most don’t work well, the OS has to be rebooted a couple of times a week, and it takes forever to start, especially if you have lots of apps. True Anarchy!

Android is different because Google is different. Each manufacturer that uses Android will have the ability to tailor the phones to their brand and service provider. Google will provide some common elements and APIs to minimize chaos. They will manage the app store which in a way will help apps run across products in a slightly more organized fashion. Of course, not every device will be perfect, but they will all live in harmony. Users will perceive commonalities giving them the “Googlesque” identity but each with its own personality. Just like a democracy.

Of course, Democracies have prevailed throughout the course of history and some lucky monarchies have survived if nothing else for the amusement of the tourists.

Enjoy.

The industry seems desperate to find an alternative to the iPhone so far with no success. Palm (the inventor of the category in a way) launched last week the “pre” a successor to the “pro” (pretty creative naming) that is supposed to be what we’re all been waiting for. Based on what Palm calls WebOS (do not try to pronounce it in Spanish) which is really a WebKit browser on top of a Linux kernel. It is to me just another “clever phone”, pretty well designed, but just a follow up.

The phone looks promising with a full touch screen, a sliding qwerty keyboard, a well thought out user interface and a great webkit browser. It is really an adequate challenger to the iPhone’s kingdom. The problem is the partner carrier. Sprint has been losing customers since the Nextel acquisition (at the tune of 300K/month at some point!) that did not go well at all. It has the worst coverage in the US and the least amount of international carrier partnerships. It has put all its eggs in the 4G JV with Clearwire and has not invested enough in the mundane 3 or 3.5G. If it wasn’t enough, the Pre is built on the CDMA technology, which is great, but very few carriers in the world support it. One will hope they thought about it and they are cranking an HSPA version as we speak for AT&T and most of the world. Better yet, a dual mode (like the Blackberry Storm) that supports both technologies in the same device. But for the Pre to stand a chance, it needs to find other carriers pronto.

The battle for the smart phone kingdom currently dominated by Research in Motion (aka RIM) the creator of the Blackberry with the most successful lineup in the industry that seems to yet unchallenged (yeah even by the iPhone). The interesting thing is that Windows Mobile (WM), the first mobile OS with (sort of) a real mobile browser after WEP is falling behind, way, way behind. LG, Motorola, Samsung, HTC, and others serve up WM phone of varying success but no where near what RIM has been able to accomplish. When in 2006 there were twice as many WM phones shipped than any other smart phone.

Now, there is still the battle of the App Stores where Apple has an apparently unbeatable lead. Palm has not announced its store yet (as RIM has) but the Pre is iTunes compatible…weird thing. Is it a play for the true alternative to the iPhone or is it something else like someone getting ready to buy Palm? Who knows. But in any case, Nokia failed miserably with its store, RIM’s success is yet to be seen, and Windows’ App store, well …, will be Windows: late and not so impressive.

This battle brings memories of the glorious days of the RAZR, where everybody had one but Moto still sold 100M phones until it fell off a cliff with no true follow up. Will the iPhone follow the same fate? and the Pre, HTC-magic, G2, Moto-Q, STORM, Dare, and all sorts of weird unimaginative names – all probably registered trademarks – being the “me too’s” will also fall into oblivion soon? Check out a great comparison here.

A real mobile internet is what is needed. Check my other post What’s next after the iPhone and tell me what you think.

Enjoy.