Paul Wallbank | Paul Wallbank - Communications Professional

Riding China’s business pivot

Lenovo, AliBaba and Hauwei are showing how the Chinese economy is moving up the global production chain.

Three weeks ago Chinese e-commerce giant Alibaba triumphantly listed on the US NASDAQ stock market with a valuation of over two hundred billion dollars. It was a strong announcement to the world that Chinese companies have arrived as global competitors.

A week later telecommunications vendor Huawei announced it was buying British internet of things darling Neul for £25 million as part of its proposed £1.3 billion investment the UK technology sector.

Quietly last week Another NASDAQ listed Chinese company, computer manufacturer Lenovo completed its purchase of IBM’s mid market server business.

Lenovo’s deal follows its purchase of IBMs PC division in 2005 that saw the iconic Thinkpad laptops become Lenovo products. Both deals tell us much about where the two companies see their respective futures.

China’s great economic pivot

These three big announcements by Chinese companies show how the economy of the Peoples’ Republic of China is pivoting just as other East Asian countries have over the past fifty years.

Leading the example of the East Asian pivot is Japan who pioneered the model of starting as a cheap manufacturing labor source then steadily ground its way up the global value chain to being the leader in many fields.

That model was copied by Taiwan, South Korea, Singapore and Hong Kong. It hasn’t worked everywhere as countries like Thailand, Malaysia and the Philippines have been caught in the ‘middle income trap’ that has seen their economies not move into the higher brackets.

Racing up the development curve

China’s mission with over a billion mouths to feed and keep politically content is to avoid the middle income trap and move into the higher brackets. With an aging population it has to do this far quicker than its successful neighbours.

While Huawei along with car manufacturer Great Wall and white goods vendor Haier are following that established Japanese model, albeit rapidly accellerated, Lenovo and Alibaba are following radically different paths.

Alibaba has the benefit of catering to a billion strong domestic market that’s leapfrogging the west in technology adoption. This gives the company a firm foundation for its global operations.

With Lenovo, the sweeping up of the US technology sector’s crumbs is a strategy that sees them buy immediate market share and develop a global position that would take it another generation to do so under the Japanese model of organic expansion which companies like Honda, Toyota and Sony pioneered.

The task ahead for the Chinese economy in moving up the economic value chain is immense and not without huge political, business and social risks. However as the economy ages, it’s a journey the country’s business and political leaders have to make.

Recently China watcher Patrick Chovanec spoke on the Chinese pivot and warned that the changes will have major ramifications for the world economy, particularly for the commodity exporters — notably Brazil, Australia and China — who provided the raw material for the country’s early economic expansion.

Lenovo, Alibaba and Huawei are leading the change in the Chinese economy and how their strategies work will define business in the mid 21st Century.

Reinventing the payphone with WiFi access points

For now though it seems the remaining payphone kiosks are safe from being abandoned

As smartphones have become common, the humble phone box has become a quaint reminder of a previous era. A series of initiatives around the world to use phone boxes to WiFi points may be giving them another lease of life.

For telecommunications companies around the world what to do with thousands of barely used but high maintenance phone boxes has become a pressing question, particularly in markets where licenses require operators to maintain them as part of their service obligations.

A solution may be found in municipal WiFi as cities have found one of the barriers to rolling out networks is where to locate base stations. In Barcelona one of the solutions has been to create hotspots in bus shelters.

The idea of using payphones as hotspots first appeared in the Yorkshire town of Leeds followed by a municipal network in New York and now Australia as the incumbent telco Telstra announced plans to rollout wireless broadband across the country.

In the UK, the Leeds based service includes charging stations in the kiosks with the services based upon advertising. It’s notable the UK service is a private startup while the US experiment is a municipal initiative and the Australian service is an extension of the existing telco network.

It may be that other revenue generators may be to provide electric vehicle charging, secure storage and perhaps neighbourhood collection points for delivery services. The model certainly needs tweaking.

How the utility of kiosks providing WiFi and these other neighbourhood services work will depend upon many factors; the economics may require governments or community groups to provide the services. It certainly is a business model in development.

For now though it seems the remaining payphone kiosks are safe from being abandoned.

Building community knowledge

Google’s Waze is a good example of shared intelligence

One of the promises of big data and the internet of things is that local governments will be able to gather information about the state of their infrastructure.

A good working example of this is Google’s Waze, the Israeli traffic monitoring startup bought by the search engine giant two years ago.

Waze gathers information about traffic delays and transit times from users then aggregates them to give a picture of commuting times. It has always been a good example of how collaborative data can work.

This week Google announced the service will share its information with a handful of transit agencies and councils to improve their knowledge of the traffic choke points in their cities.

In return the agencies will give their transit information to Waze.

Waze’s story is a good example of how sensors and people, in this case smartphones and their users, are going to gather information on infrastructure and cities. The key is going to be in making sure that data isn’t locked into proprietory databases.

Google Fiber and the Kansas City digital divide

There is a digital divide developing in internet access and this is not good for the economy.

Google Fiber’s stated aim is to improve access to high broadband internet connections for the communities it’s being rolled out in.

The Wall Street Journal reports that this isn’t going so well with take ups of the fiber service in the poor parts of Kansas City being a quarter of those in middle class areas.

It’s not surprising an expensive service like fiber internet isn’t taken up by folk who don’t have money, but the discrepancy between the haves and the have nots should be a concern as access to today’s communication tools is key to economic progress.

During the rollouts of the railways, telegraph and motor car it was giving working people access to the new technologies that drove growth. If internet access becomes only available to the few then today’s technological developments deliver on their promise.

Flying the crowded skies – United Airlines transpacific business class

Transpacific business class on United Airlines is a curious service with the crowded cabins being a step down from the carrier’s own domestic service.

United Airlines surprised me by bouncing me onto a Qantas flight on my previous attempt to fly business class with them across the Pacific however on the return flight on UA863 between San Francisco and Sydney there were no such surprises.

On boarding the 777 the difference between the airline’s domestic business class and its trans Pacific routes is immediately apparent in the crowded eight abreast cabin which compares poorly to the four abreast on United’s domestic 757 services and is a world away from the six abreast on the Qantas A380 services.

It is however a lot better than the ten abreast at the back of the plane in economy and while the seats are cramped they are lie flat with all the standard fittings expected in a business class seat.

Once settled in the seat and underway the cabin crew are spectacularly friendly and helpful despite being overworked in the crowded cabin. The gin and tonics are particularly strong and its worthwhile being cautious of having too many of them.

Aside from lethally strong drinks, the business class food on the flight is good with a decently cooked steak as part of a four course meal including an appetizer, cheese plate and ice cream sundae. For an inflight meal, the mashed potato and baby carrots were surprisingly good.

For the regulars on the flight the most important part of the trip is their ice cream sundaes. Apparently these mean a lot to United’s loyal customers and are a nice touch with the flight attendants clearly enjoying the ceremony. If you’re nice to the cabin crew, you can expect extra nuts.

After the meals, one of the downsides of United’s crowded business class becomes apparent — the lack of restrooms which results in lines just as long as those in economy on other airlines.

Once you do make it into the toilets, the United Airlines’ amenity bag has a good range of accessories to make the flight more comfortable including travel socks, earplugs and skin moisturizer. It’s probably good United don’t offer a set of business class pyjamas like Qantas as nobody would ever get into the restrooms.

Despite being cramped the lie flat beds are fine for a sleep during the 17 hour flight. During the period the lights are dimmed, the cabin crew do tend to vanish so staying hydrated involves making a trip to the galley where along with drinks a parked serving trolley offers self service fruit and snacks.

A few hours out of an on time arrival in Sydney sees standard American breakfasts being offered. These aren’t bad but aren’t good for anyone’s diet and no-one will be accusing the United States of producing the world’s best croissants any time soon.

Overall, United’s transpacific business class service is a curious beast. While the crew are friendly and the food adequate, it’s clear the product lags behind its own domestic service and other airline’s international offerings.

United’s lagging behind the competition is shown in their ticket prices with their business class fare from Sydney to New York being a third of Virgin’s and half of Qantas on the same routing. The market is voting with its wallet despite United having a monopoly on the Australia to San Francisco routes.

For those paying for fares out of their own pockets, it may well be worth considering other airline’s premium economy offerings although for connecting flights to other parts of North America, United offers more options than competing carriers.

Should you be one of the few where your employer still pays for long haul business class fares, then United is probably the least comfortable option although your office financial controller will be happier with the prices.

Paul flew United Business Class between Sydney and New York courtesy of Blackberry

One, two, skip a few. Microsoft hopes Windows 10 will save a declining PC market

Will Windows 10 be enough to revitalise Microsoft’s ailing business divisions?

A few days ago I asked if Windows 9 would be Microsoft’s last desktop operating system.

Yesterday the company partially answered the question by announcing the next version will be named Windows 10 which conveniently skips version nine.

Skipping around numbers isn’t unusual for Microsoft, most famously Word skipped from version two to six just to overtake competitor WordPerfect in the late 1990s.

Windows itself has gone 3.0, 3.1, 3.11, 95, 98, ME, XP, Vista, 7 and 8 in the past — that’s without mentioning the Windows NT family — so jumping to Windows 10 doesn’t detract from any logic in the Microsoft’s naming system.

The key point from Microsoft’s announcement is the business focus along with the continuation of Windows 8’s unified experience across PCs, smartphones and games consoles that has proved less than successful.

One area where Microsoft has conceded defeat is in the battle for a Start button with Windows 10, one of the biggest irritants upgrading users found with the new operating system and one of the reasons why many users chose the older Windows 7 software when buying a PC.

How the Start button will work on Windows Phone remains to be seen although Microsoft seem committed to the ‘One Windows’ vision despite its technological and marketplace difficulties.

Another interesting development with the new product is the Windows Insider Program, billed as an ‘open collaborative development effort to change the way Windows is built and delivered’.

Back in the old days this was called a beta program where testers were invited to try out new software to test the product and fine tune user experiences. At least it shows Microsoft are embracing the language, if not the spirit, of the collaborative economy.

Microsoft have released a YouTube video Introducing Windows 10 with Windows Vice President Joe Belfiore outlining the features of the new system.

Whether Windows 10 is enough to shore up the declining fortunes of the company’s Windows division and Joe’s job will be a key question for analysts and industry watchers over the next three years.

ABC Nightlife with Tony Delroy October 2014

Connected cars, smart watches, Microsoft and social media will be the topics of the next Nightlife with Tony Delroy technology segment.

Paul Wallbank joins Tony Delroy on ABC Nightlife across Australia from 10pm Australian Eastern time on Thursday, October 2 to discuss how technology affects your business and life.

Update: If you missed the program you can listen to the podcast at the ABC site or stream it below.

For this month’s spot we’re looking at smartcars, smartwatches, the next version of Microsoft Windows and whether the new social media platform Ello can displace Facebook.

Some of the questions we’ll cover include;

What’s happening with connected car technologies?
Isn’t all this talk about smart cars another way ?
So how far are we off the driverless car?
Are our mobile phone choices going to dictate what brand car we buy?
How does the smart watch fit into how companies are trying to lock us into their software?
A new social media platform called Ello is taking off, what is it?
Do we really need another social media platform?
Microsoft have announced Windows 10, aren’t we only up to eight?
What’s different in Windows 10?
Has Windows 8 been a success?
When will Windows 10 be released on the market?

Join us

We’d love to hear your views so join the conversation with your on-air questions, ideas or comments; phone in on the night on 1300 800 222 within Australia or +61 2 8333 1000 from outside Australia.

Tune in on your local ABC radio station from 10pm Eastern Summer time or listen online at www.abc.net.au/nightlife.

You can SMS Nightlife’s talkback on 19922702, or through twitter to @paulwallbank using the #abcnightlife hashtag or visit the Nightlife Facebook page.

Ello, Ello to a frustrated social media market

The rapid rise of upstart social media service Ello is a warning to the industry’s incumbents and the marketers using the platforms

Over the last week new social media service Ello has been in the news as the ‘anti-Facebook’ that doesn’t collect user details or push advertising onto feeds.

Certainly Ello has touched the zeitgeist with reports claiming the service is getting 30,000 new signups every hour. It’s clear social media users aren’t happy with the existing services.

Part of this discontent is due to social media’s growing pains as the platforms search for the business models to justify their massive valuations, with the consequence of users finding their streams being polluted with invasive and often irrelevant advertisements.

Social dilemmas

For Facebook in particular this is a problem as they have to balance the service’s relevance to users against the demands of ever desperate advertisers who want to post as many ads as possible into the feeds.

Adding to the discontent is suspicions on how the existing social media services intend to trade users’ information. While many internet mavens may claim ‘privacy is dead’, most people are concerned at how a history of their likes, friends or conversations could hurt future relationships or job prospects.

Which ties into Ello’s manifesto.

Your social network is owned by advertisers.

Every post you share, every friend you make, and every link you follow is tracked, recorded, and converted into data. Advertisers buy your data so they can show you more ads. You are the product that’s bought and sold.

We believe there is a better way. We believe in audacity. We believe in beauty, simplicity, and transparency. We believe that the people who make things and the people who use them should be in partnership.

We believe a social network can be a tool for empowerment. Not a tool to deceive, coerce, and manipulate — but a place to connect, create, and celebrate life.

You are not a product.

While Ello’s founders are right that Facebook, and to a lesser degree, Twitter are advertising platforms at present it may well be that social media’s days as a marketing tool are numbered as the business models mature.

The evolving social media model

Facebook’s announcement that it is going into the payments field is an indication that the businesses are maturing beyond the broadcast advertising model that worked so well for television and radio while Twitter’s struggles to shoehorn the old marketing tools into its business continue.

The most successful social media platform to date is LinkedIn which makes less than a quarter of its revenues from advertising — down from 30% two years ago — with the company building revenues in its corporate talent finding services, something that makes LinkedIn’s ambitions to be a global content publisher somewhat strange.

So it may well be that Ello aims to solve a problem that may not exist in the near future.

Ello could turn out to be the ‘Facebook killer’ however the odds are stacked against it, what is clear though is the social media marketplace is telling the industry’s leaders that consumers aren’t happy. It’s something the marketers staking their future on social media need to keep in mind.

Facebook becomes the storefront

Facebook’s Buy Now feature could be the future of social media and ecommerce

Last week payments service Stripe confirmed they had partnered with Facebook to power the social media platform’s ‘buy now’ feature.

The buy now button concept ads a button to posts, either sponsored or organic, in a user’s feed which lets them purchase the product being mentioned. This could be a powerful call to action for those advertising on Facebook and a potentially substantial revenue stream for the social media service.

Late last month Stripe co-founder John Collison spoke to Decoding the New Economy about the evolution of online payments and Facebook’s role in the industry.

“We’ve seen Facebook’s announcement a little while back that they’re letting you pay with your Facebook credentials. You can have a little ‘buy with Facebook’ button and if your card details are on file with Facebook then you don’t have to fill out all your details.”

Stripe’s strategic advantage

At the time Collison wasn’t letting on just how integral his company would be to Facebook’s payment services and coupled with company’s privileged position with Apple Pay, Stripe seems to be in a leading position with some of the biggest and well positioned players in an industry that’s being turned upside down.

Those changes are good news for business as I wrote for Technology Spectator last week with the increased competition in the sector is making it easier for new companies to enter their markets.

Making it easier for new entrants is something that drives Stripe’s Collison; “I think one of the things that’s held back online commerce for so long is there is such a high barrier to it and so if you go to a coffee shop and you pay for your coffee — you swipe your card and that’s that.”

Letting businesses sell more

“It seems to me that in five to ten years time we will not be in the same world where people like Facebook and Google are improving the identity story,” continued Collison. “This is exciting because it means merchants can sell more.”

The integration of Buy Now into Facebook’s services also indicates a different direction for social media services beyond being the passive marketing platforms many see them as being today.

It may well be that social media platforms are more the storefront than the billboard.

Could Windows 10 be Microsoft’s last desktop operating system?

Could Windows 9 be Microsoft’s last desktop operating system?

On Tuesday Microsoft are expected to announce their new Windows 10 operating system at a media event in San Francisco.

If the rumours are true, then the new system will be launched almost exactly two years after Windows 8 was released amid hopes that it would stem the PC industry’s decline.

Windows 8 didn’t deliver with most people being frustrated with the system’s inconsistent interface that tried to be unified desktop, laptop and tablet operating system which managed to be unsatisfactory on all of them.

As a consequence, users avoided Windows 8 like the plague with industry analysts Netmarketshare claiming most of Microsoft’s customers are buying systems kitted out with Windows 7 or just sticking with decade old Windows XP systems.

Courtesy of Netmarketshare http://www.netmarketshare.com

Making matters worse for Microsoft is the decline in personal computer sales in general with IDC estimating global shipments of both portable and desktop system will drop 3.8% in 2014.

These declines are already well established in the trends being seen in Microsoft’s business with the company’s Windows division showing an accelerating decline in profit margins.

Microsoft Windows division financial performance ($ million)

Should that decline continue with Windows 10, it may well be that Microsoft will have to consider the future of product.

As it is, the market may be deciding for them as users increasingly switch to tablets and smartphones. We may also see a wave of cheap Chinese made laptops running versions of Google Chrome or other Linux based systems also threatening the existing PC sales base.

Either way, a lot rides on what Microsoft announces in San Francisco this week. It could be the end of an era that defined the mass adoption of computers.

Lenovo Yoga

Lenovo’s Yoga 2 Pro is an attempt to combine a laptop and tablet computer into one device

Can a laptop be a tablet computer? The Lenovo Yoga Pro 2 tries to balance the needs of both in a package designed for home and small business users.

The laptop computer market is in a difficult place at the moment as both consumers and businesses move to tablets and smartphones so it’s interesting to get hold of the Lenovo Yoga Pro 2 to see how one of the leading portable manufacturers is responding to the changing industry.

One of the best ways of testing a portable device is to take it on a long trip, so a couple of 14 hour transpacific flights and trips around San Francisco, the Napa Valley and Silicon Valley proved a good workout for the Yoga Pro.

As a laptop

From a hardware perspective the Yoga is an impressive device with 8Gb of RAM, 256Gb solid state hard drive and a 1.8GHz i7 chip. The screen is a very nice 13.3″ 3200 x 1800 high-resolution display.

Rounding out the hardware specs are two USB ports — one 3.0 and the other 2.0 — along with a Micro HDMI output, webcam, inbuilt mic, headphone jack and an SD Card reader. All the basics expected in a mid range ultrabook that weighs in at a respectable 1.4kg.

In using the Yoga as a laptop, the device works well with the keys being crisp and responsive although the position of the glidepad and the backspace key being alongside the home key caused problems for this clumsy touch typist.

One of the problems with the larger form of ultrabooks is their usability when travelling economy on a plane; if the passenger in front of you reclines then it becomes difficult to use the device. This isn’t a problem specific to the Lenovo Yoga, but it is a drawback that the industry seems not to have considered in its move to the larger screens.

In the office

If you’re not travelling on planes, the weight and form factor works well and makes the Yoga 2 Pro a nice device to use while on the move. In an office environment it’s a standard mid to upper range laptop with good fast specifications.

For battery life, Lenovo claim “up to nine hours” for the Yoga Pro but in practice standard office use sees about five hours worth of juice with a full recharge taking under an hour. It’s lucky most transpacific flights now have power sockets.

Flipping to a tablet

While 1.4kg is good for a laptop it’s lousy for a tablet computer with the Yoga Pro 2 weighing in a kilo heavier than the iPad and 500g (one pound) heavier than the Microsoft Surface Pro. This makes it awkward to use over extended periods and the keyboard doesn’t feel right as the backing to a tablet.

The Yoga’s weight problem illustrates the core conflict for a device that wants to be a laptop and a tablet as the different demands for each type of device make if difficult for designers to meet both markets.

In the Yoga 2 Pro’s design, it’s clear the engineers had to make a choice between compromising either on the tablet or laptop functionality. As it turns out the designers decided to go with releasing a good Ultrabook laptop with compromised tablet functions — this was the correct choice for the Yoga.

Windows 8 limitations

Probably the greatest problem though for the Yoga Pro 2 in tablet mode lies in software with Windows 8 being far from adequate as a tablet operating system with a confused interface, an inconsistent user experience and unpredictable responses to touch screen commands.

For companies like Lenovo who are persisting with Windows as their operating system, it’s becoming critical that they start demanding better design from Microsoft before they find their market being overwhelmed by Android and iOS devices offering a superior user interface.

While the Windows 8 irritations aren’t a deal breaker for the Yoga, it does limit the device as a tablet computer and its something anyone considering it instead of an iPad or Android tablet should keep in mind.

A good general duty small business laptop

Overall, the Lenovo Yoga Pro 2 is good Windows Ultrabook for home and small business use offering the benefits of an ultrabook with the flexibility of being able to flip into a tablet for specific uses.

The device isn’t cheap, but the range of features and good hardware specs make it a decent purchase for small businesses, sole proprietors or workers operating from home who need a versatile Windows computer.

Employee engagement in small business

Blogging helps small business tell their story and improves staff morale

Earlier this week I was asked what tools small business could use to increase employee engagement.

My reply was a simple one; start a company blog and let staff contribute to it. Letting workers tell stories of why they enjoy their work not only gives them a feeling of being recognised as part of the team but also shows the human face of the business.

That latter part is an important point as too many small businesses try to sound like Exxon-Mobil when they present their company face when in actual fact most customers are after the human touch.

It’s a simple thing, but showing your business’ human face is not only good for staff morale but also good as a marketing tool as well.