Category: mobile

Disrupting the smartphone market

The Tizen and Firefox smartphone systems threaten to disrupt the entire industry and ruin the plans of both Apple and Google.

It’s been a long time since we’ve had a three or four way war in the technology industry, with most sectors settling down into a two way fight between alternatives.

Mozilla’s promised $25 smartphone project threatens to open the mobile industry into a three way battle just as it appeared the market had comfortably settled down into an Android and iOS duopoly.

Now we see a three way race and possibly four if Samsung can get traction with its Tizen operating system that it’s bundling into the latest version of the Gear smartwatch.

One positive aspect of the four way battle is that three of the participants – Firefox, Tizen and Android are relatively open so compatibility between them isn’t impossible.

For Google and Apple though, this four way tussle presents a problem to their business plans.

Apple’s iOS ambitions of putting the software in smarthomes, connected cars and, possibly most lucratively of all, into retailing with iBeacon are threatened by a fragmented market and a rapidly eroding market share.

For Google, both Firefox and Tizen threaten the dominant position of their Android operating system that forms a plank in the company’s ambition to control the planet’s data and become an ‘identity service’.

Worse still for Google’s information ambitions, Firefox is working with Deutsche Telekom on a security initiative that will lock away users’ data.

So the stakes are high in the smartphone operating systems wars.

It’s early days to forecast the demise of either Android or Apple iOS, which is unlikely in the short term, but if Firefox’s operating system does take hold it will mean the smartphone industry is about to become a lot more complex.

Similar posts:

  • No Related Posts

Avoiding the smartphone commodity trap

Can HTC avoid the looming commodity trap for smartphone manufacturers?

HTC’s announcement that the company going to focus on lower margin, mid market smartphones illustrates the maturing of the phone marketplace.

Smartphones have been a huge, and immensely profitable, business for cellphone manufacturers however the devices are now becoming a commodity as the high end western markets become saturated and cheaper devices start to enter the marketplace.

Having been comprehensively defeated in the high end marketplace by Samsung and Apple, Taiwanese manufacturer HTC hopes to make money in the lower end of the market.

For HTC it’s questionable how profitable these cheaper markets will be; rebates to telcos and distributor markups tend to eat up most the margin while pushing up retail costs.

The biggest factor of all though is the entry of newer Chinese businesses into the market, it’s going to be a tough for the Taiwanese manufacturer to compete with these suppliers.

Even Apple and Samsung are being affected by the slowing demand for high end smartphones.

HTC’s dilemma would be familiar to most electronic manufacturers; the high end of the market is a narrow niche – the premium smartphone market, like PCs, is dominated by Apple – while the other suppliers fight not to find themselves locked into the commodity end of the market.

For HTC the trap is not to fall into the commodity trap; although it’s hard to see how they’ll do this in a smartphone market that’s increasingly becoming a low margin, high volume game where, like the PC market, there is no middle ground.

Similar posts:

  • No Related Posts

Lowered expectations – What is the future for Apple?

Where to next for Apple in an era of lowered expectations?

Last Friday I had a story in Business Spectator on the future of Apple in light of the company’s warning of a 20% fall in revenue next quarter.

The clear message from Apple’s executives was that the company is facing a terminal decline in iPod sales and the iPhone – it’s most profitable and highest selling product – is facing slower sales.

So the search is on to find something that will replicate the iPhone’s success, with the biggest candidate being the iWatch.

The problem with that is the entire wearable technology market is only forecast to be $6bn which is a seventh of Apple’s $42 billion profit last year, so the iWatch can never replace falling iPhone sales.

It may well be for Apple that the period of massive profits and growth is drawing to an end, it doesn’t mean the company is dying – for a start they has nearly $200bn in cash reserves and a healthy $150 billion in sales each year.

Short of Tim Cook unveiling something similar to the iPhone, the future for Apple is probably going to be a bit modest than past few years of huge growth, that’s not a bad thing.

Rather than being the end of Apple, it’s more a revision to the role the company has held for most of it’s existence – a high profit, niche business that sells on quality and brand rather than fighting in the commodity markets.

Similar posts:

  • No Related Posts

A triumph over orthodoxy – Seven years of the iPhone

The Apple iPhone reinvented the smartphone and mobile internet industries. Can it also define the internet of things?

“Once in a while a revolutionary product comes along that changes everything.”

Those were Steve Jobs’ words when he launched the iPhone seven years ago.

It was a strong opening that was reinforced by the event’s tag line, “Today Apple reinvents the phone.”

It wasn’t an idle boast, the iPhone was a leapfrog development – using Jobs’ words – over the existing clunky smartphones and it changed the entire industry and spawned some new ones.

Smart Company’s Yolanda Redrup asked me for a few comments on her story on the iPhone’s birthday and her questions triggered some thoughts on just how the iPhone changed the mobile phone and telco industries.

A triumph over orthodoxy

Apple’s iPhone triumph was born out of the established players’ orthodoxy; companies like Nokia, Blackberry and Palm were wedded to the idea that a tactile QWERTY keyboard was essential for a smartphone.

Those keyboards took away nearly half the real estate on the phone, Jobs called it “the lower forty”, and it made surfing the net a painful task, let alone watching videos or movies.

Full featured keyboards made making calls difficult as well. One of the barriers of adopting smartphones was that using the things as phones was quite difficult.

By having software keyboard and dialling pads that only appeared when needed, Apple solved the problems that faced smartphone users.

Disrupting the telcos

The other orthodoxy in the smartphone industry was that the telcos were essential gatekeepers. Nokia and the other incumbents put the needs of telecommunications companies over users of their phones.

As a consequence email and web browsing capabilities of the existing smartphones were crippled as the telcos tried to lock their customers into their own proprietary networks rather that giving them access to the public internet.

With the iPhone, Apple broke out of that telco dominance and started to dictate terms to the phone companies. This wouldn’t have been possible if the iPhone hadn’t been a far better, and much more popular, product.

Building the app store

Another area where the iPhone disrupted the phone companies’ business was with the App Store. Every smartphone had its own add-on programs but they were expensive with poor functionality and developers had to build versions for every company’s operating system.

Both the telcos and the phone vendors could see that app stores were a potentially lucrative area but systemically failed to execute on the idea with clunky and expensive software.

The App Store showed how smartphones should work and coupled with music, another area where the handset vendors dismally failed, Apple is now earning over a billion dollars a month from iTunes.

Technological change

Some of the iPhone’s success was due to technologies maturing; earlier smartphones were crippled by slow data connections over 2G or CDMA networks and cloud computing, or software-as-a-service as it was then called, was just beginning to mature as a technology.

Cloud services and 3G connectivity meant the iPhone could hand off most apps’ processing needs to the service provider, something that the earlier smartphones couldn’t do because the technology wasn’t there.

That connectivity did come at a cost, the iPhone and its competitors created huge challenges for telcos as they struggled to meet the data demands of their enthusiastic web surfing customers.

Looking at the future

While the iPhone came to dominate the smartphone market, that dominance didn’t last as Google Android devices started to flood the marketplace. Now Samsung is as big a player as Apple and a wave of cheap Chinese products are now flooding the industry.

For Apple and the other smartphone vendors the opportunities now lie in the internet of things (IoT) as connected cars, workplaces and homes require a device to control them. That device is often the smartphone.

In the next few years the market battleground is going to be creating the applications, platforms and ecosystems around these IoT technologies and its no coincidence that Apple has partnered with BMW on providing software for their smartcar.

Jobs finished his iPhone presentation with the Wayne Gretzky quote, “I skate to where the puck is going to be, not where it has been” and committed Apple to always being where the market is going to be.

Where the market is going to be in the next seven years is anyone’s guess, but it would be dangerous to count Apple out.

Similar posts:

  • No Related Posts

Is NFC ready for prime time

We may well see both QR codes and NFC succeed eventually, but right now they are the classic case of a technological solution searching for a problem to solve.

One of ‘coming real soon’ technologies of our times is Near Field Communications (NFC), a short range radio service connecting suitably equipped electronic devices.

NFC has been tipped to arrive ‘real soon now’ for several years as mobile phone companies, banks and telcos fight to control the payments system.

The service hasn’t taken off for a number of reasons; it’s clunky to use, the technology itself isn’t consistently applied and many smartphones don’t have the feature, the most notable being the iPhone.

Most of the applications cited for NFC are contactless payment services where a customer can wave a phone to pay for things, a good example is this parking meter in San Francisco.

NFC-parking-meter-detail

On the other side of the Pacific, Google are running a campaign in Australia encouraging commuters to try the NFC features that are built into most Android phones.

IMG_4447

Unfortunately the technology doesn’t work, as the comments to this blog post indicate. The users’ problems illustrate why NFC is struggling; it’s clunky, unreliable and customers don’t understand it.

It’s notable the Google campaign includes a QR code, another technology that’s been pending for nearly a decade.

Both are doomed though while customers struggle to use them.

We may well see both QR codes and NFC succeed eventually, but right now they are the classic case of a technological solution searching for a problem to solve.

Similar posts:

  • No Related Posts

News organisations and social media copyright truths

Haitian photographer Daniel Moran’s victory over Agence France Press and Getty Images is a reminder to journalists and media organisations that just because something is posted to social media it doesn’t mean it is free to use.

One of the long running scandals of modern journalism is how media organisations have misused social media.

Haitian photographer Daniel Moran’s victory over Agence France Press and Getty Images is a reminder to journalists and media organisations that when something is posted to social media it doesn’t mean it’s free to use.

Since the rise of social media sites it’s become common for journalists to grab images or videos from them to illustrate stories. At best, the media organisations have credited the sites they’ve stolen the content to allay copyright concerns.

The problem is media companies and journalists don’t have the right to do that; users don’t give away their rights when they post to Twitter or Facebook — they grant a license to the company to use those that content as they wish.

If a photographer, writer, computer programmer or musician wants to give away their work for free then there’s a range of ways they can do it and many are happy to make their efforts available to the community without charge. It just happens posting to a social media site isn’t one of those ways.

Hopefully journalists and media organisations will learn a lesson from Daniel Moran’s case, social media doesn’t mean open slather.

Similar posts:

  • No Related Posts

Becoming an all mobile executive

Salesforce CEO Marc Benioff says he’s gone completely mobile, will other executives follow?

“I don’t want to use a laptop again,” Marc Benioff told the closing Dreamforce 2013 customer Q&A. “The desktop remains the biggest security threat to corporations — it’s a nightmare. The PC and laptop we never designed to be connected to a network.”

Benioff was walking his talk in promoting his company’s Salesforce One mobile platform, claiming at the Dreamforce conference opening that he hadn’t used a PC or laptop or nine months as he’s moved over to tablet and smartphone apps.

That push to move the company and its customers onto mobile services was emphasised by Peter Coffee, Salesforce’s Vice President for Strategic Research.

“Your mobile device is no longer an accessory,” says Coffee. “It’s the first thing you reach for in the morning and it’s the last thing you touch at night.”

Salesforce’s push into into the post-PC market follows Google and Apple’s lead, much to the distress of Microsoft and its partners.

“We saw the phenomenal engineering work of Scott Forstall at Apple and the visionary work of the late, great Steve Jobs,”  Benioff told his cutomers at the final Dreamforce Q&A. “When we saw the iPhone we sat up and thought ‘wow, what are we going to do about this?'”

“This is a paradigm shift, we’re moving from the desktop world to the mobile phone world and then of course we saw the iPad world emerge and that amplified it.”

Salesforce’s impressions were shared by much of the business community as senior executives, board members and company founders quickly embraced the first version of the iPad, which on its own triggered the Bring Your Own Device (BYOD) trend in enterprise computing.

In a mobile age, Benioff now sees three key priorities for Salesforce; “we want to be feed first, we want to be mobile first and we want to be social first.”

Regardless of Benioff’s vision, not everyone will go mobile which is something that Peter Coffee acknowledges.

“The laptop will occasionally be used to author creative work like a presentation or to deal with something that needs a large screen like pipeline analysis,” says Coffee.

Marc Benioff though is adamant. “Honestly I don’t ever want to use a laptop again,” he told his audience.

It will be interesting to see how many business leaders follow him in abandoning their desktops and portable computers as the post-PC era of computing develops.

Similar posts:

  • No Related Posts