Tag: tablet computers

Five years of the app store

The Apple App Store enters its fifth year of disrupting the smartphone and tablet computer industries.

It’s been five years that the Apple App Store has been open for business. in that time they’ve revolutionised the smartphone industry, reinvented the tablet computer and had fifty billion downloads.

While the App Store wasn’t an original idea, plenty of telcos and handset manufacturers, had them, Apple were the first to get the formula right for the iPhone.

Their success in changing the smartphone industry lead to their dominance of the tablet industry, another sector which had settled incumbents who were disrupted by Apple’s entry into the market.

It’s notable how in both the smartphone and tablet markets, the established incumbents were struggling with the same business model that Apple got right. This is something other industries should pay attention to.

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The PC industry’s search for new directions

Microsoft and Dell struggle to reinvent themselves in the post PC era

All Things D reported over the weekend that Microsoft executives are fretting over a major restructure being planned by CEO Steve Ballmer. This is part of the fundamental changes challenging the entire PC industry.

Ballmer is dealing with massive changes in Microsoft’s core business as PC sales decline with customers moving to smartphones, tablet computers and cloud computing so finding new markets is a priority for the company’s board and senior management.

The same problems are facing all the major players in the PC industry and it’s the main reason why Dell is in the throes of a battle to take their business private, what’s fascinating is the different ways these companies are responding to these changes.

In Dell’s case the company’s looking at becoming “an Enterprise Solutions and Services (ESS) focused business” – essentially copying what IBM did a decade ago in moving from hardware and focusing on consulting and services to large corporations.

Microsoft on the other hand sees the future in devices and cloud computing with Ballmer telling shareholders last year that becoming a “devices and services company” is the future.

It’s important to recognize a fundamental shift underway in our business and the areas of technology that we believe will drive the greatest opportunity in the future.

In Ballmer’s view those opportunities lie in cloud computing services and devices like the Windows Surface tablet computer and the smartphones, products which Dell struggled with during the 2000s.

These are two very different directions and it illustrates just how the major players in the PC industry are searching for new business models as the old one collapses.

How many of them successfully make the transition will be for history to examine; it’s easy to see Microsoft surviving given its massive financial reserves and market power, although nothing can be taken for granted as we could have said the same about Kodak twenty years ago.

Dell on the other hand is far weaker being smaller with a narrower product base and currently has the management distraction of competing buyout offers. Dell’s survival is far from certain.

Others, like HP, seem to be slipping into obscurity as management flip-flops from one scheme to another. The takeover of EDS as part of HP’s move into enterprise consulting does not seem to have gone well and the company is wallowing.

What we’re seeing is the rapid disruption of an industry that itself was the disruptor not so long ago. It reminds us that even the corporated giants of today are as vulnerable as the stagecoach companies of yesteryear in the face of rapid change.

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Dicing up the mobile web

A series of reports last week told how we use computers, tablets and smartphones is evolving. There are big consequences for all businesses.

Last week we had a series of reports on the changing web from Cisco, IBM and Ericsson along with Mary Meeker’s annual State Of The Internet presentation.

One thing all the reports agreed on was there is going to be a lot more data pushed around the net and the composition is changing as business and home users adapt to smartphones and tablet computers.

Cisco’s Visual Networking Index forecast online traffic would triple by 2017 while Ericsson’s Mobility Report predicts mobile internet traffic will grow twelve times by 2018.

What’s notable in those predictions is the amounts and types of data the different devices use. Cisco breaks down monthly traffic by device;

  • Smartphones 0.6 GB
  • Tablet computers 2.7 GB
  • Laptops and PCs 18.6 GB

In one way this isn’t surprising as the devices have differing uses and their form factors make it harder to consume more data. Cisco also points out that data consumption also varies with processor power. As PCs are the most powerful devices, it makes sense they would chew through more information.

Ericsson breaks down data use by application as well as device and that clearly shows the different ways we’re using these devices.

internet data traffic by mobile device

Notable in the graph is how file sharing is big on PCs but not on tablets or smartphones while email and social networking take up a bigger chunk of cellphone usage.

What’s also interesting in Ericsson’s predictions is how data traffic evolves. It’s notable that video is forecast to be the biggest driver of growth.

ericsson-by-data-traffic

Both Ericsson’s and Cisco’s predictions tie into Mary Meeker’s State Of The Internet presentation at the D11 Conference last week.

It’s worth watching Meeker’s presentation just for the way she packs over eighty slides into twenty minutes with a lot of information on how the economy is changing as the internet matures.

What all of these reports are telling us is that our society and economy are changing as these technologies mature. The business opportunities – and risks – are huge and there isn’t any industry that’s immune to these changes.

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Sunset on the laptop market

Does Toshiba’s release of their Kira laptop mark the beginning of the end for portable computing?

Yesterday Toshiba released their Kira laptop computer – a premium device aimed at the ‘aspirational’ market.

The Kira is a fine device with good specs, little weight and an ambitious $2,000 price point. It probably also marks the laptop computer’s decline.

As tablet computers and smartphones become most people’s preferred computer devices, the laptop computer is becoming a niche device and increasingly less relevant to most technology users. The Kira is fighting for the share of a marketplace that has moved on.

Losing the Aspirationals

Unfortunately for Toshiba, those aspirational customers are locked into their Apple iPads and Sumsung smartphones. Laptops are seen as work devices more valued for their portability and cost.

“We have to give our customers a reason to upgrade their computers,” said Mark Whittard, the Managing director of Toshiba Australia.

The problem is computer users have little reason to upgrade, as nice as the Kira is the price point is just too high for customers who’ve been groomed to expect sub – thousand dollar systems and there are few compelling reasons to buy such a device.

Caught in a pricing pincer

Price points are probably the biggest problem for computer manufacturers – one of the reasons for the tablet computer’s success is they delivered an easy to use, portable computer for half the price of a portable computer.

At the same time the rise of netbooks and the rush to dump unwanted Microsoft Vista and Windows 7 stock onto the market groomed customers to expect cheap computers – few computer buyers are interested in spending more than a thousand dollars on a device.

These factors have squeezed the margins of the major manufacturers like Dell, HP and Asus.

Those pressures are going to increase as volumes fall. For much of the 2000s, laptop computers were fast moving consumer goods – pricing and profits were based on moving large numbers of the devices.

As manufacturing volumes fall, those devices are going to lose their economies of scale which will put further pressures on vendors’ margins.

Laptops aren’t going away, they still have a role for power users ­– particularly for those, like this writer, who need a tactile keyboard and media editing capabilities.

However those feature rich devices with their nice keyboards are going to cost more as parts become more expensive.

For laptop vendors the challenge is to find the profitable market niches and exploit them. In some ways Toshiba probably has a better opportunity than most with its range of premium and gaming portable computers.

Those in the market hoping the happy days of big volumes and good profits will return to the laptop PC market are in for a painful future. It’s something retailers, resellers and vendors need to understand.

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Is there a tablet to cure the reality distortion field?

Microsoft founder Bill Gates puts up an argument for Windows 8 tablets. But is he living in a reality distortion field?

It’s hard not to be impressed by the calibre of guests CNBC’s Squawk Box when they’re able to get Warren Buffett and Bill Gates on together for an interview.

During the interview Bill Gates made an interesting assertion about Apple’s iPad, ““A lot of those users are frustrated, they can’t type, they can’t create documents, they don’t have Office there.”

Bill’s undoubtedly right, some iPad users are frustrated by the device’s limitations. However for every irritated iPad user there are a dozen baffled by the lack of a Start button on Windows 8.

The reality distortion field though is strong, “Windows 8 really is revolutionary,” says Bill. “It takes the benefits of the tablet and the benefits of the PC and it’s able to support both of those.”

The Microsoft founder is enthusiastic about the company’s Windows tablet, “you have the portability of the tablet but the richness, in terms of the keyboard and Microsoft Office, of the PC.”

It’s notable Gates mentioned Microsoft Office, particularly given the question was about the cloud. It’s clear one of Microsoft’s priorities is to maintain their strength with productivity applications and move with their customers onto the cloud.

The problem though for Microsoft is that Apple’s iOS and Google’s Android are dominating the cloud focused operating systems, leaving Windows behind.

Making matters worse for Microsoft is it’s clear Windows 8 tablets are never going to catch their competitors. Consulting group Gartner last year predicted the global market for tablet computers will double over the next three years, but Microsoft will capture barely 10% of the sales.

 OS

2011

2012

2013

2016

iOS

39,998

72,988

99,553

169,652

Android

17,292

37,878

61,684

137,657

Microsoft

0

4,863

14,547

43,648

QNX

807

2,643

6,036

17,836

Other Operating Systems

1,919

510

637

464

Total Market

60,017

118,883

182,457

369,258

Sitting in a reality distortion field is fine when things are going well and you dominate your world, but Microsoft – despite still being insanely profitable – no longer dominates the markets that made it into one of the world’s leading companies.

The challenge for Bill Gates and Microsoft’s management is adapting to those changes, projecting your own frustrations onto the users of a competitor’s product, isn’t a recipe for success.

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Is Thorsten Heins the world’s bravest executive?

Blackberry CEO claims the tablet computer’s day are coming to an end – it’s a very brave call.

“In five years I don’t think there’ll be a reason to have a tablet any more,” Blackberry CEO Thorsten Heins told Bloomberg TV while showing off his company’s new Q10 handset.

Predicting the end of the tablet computer is a very brave call – particularly from a man whose company’s market share has fallen 90% since the iPhone was released – but does it have any merit?

Thorsten’s view is the smartphone is the device most people rely on. Of the three ‘screens’ we use, the mobile phone is the one we rely on the most and it will be increasingly important as mobile payments, NFC and other technologies develop.

Blackberry’s position is exactly the opposite of Microsoft’s ‘three screens’ strategy with Windows 8 where the aim is to have the same system running on phones, tablets and personal computers.

Apple and Google have chosen to modify their systems, or even have totally different ones such as iOS and OSX, to suit different sized devices.

Supporting the Blackberry view is the famous survey by the now defunct Nortel Networks in 2008 that found one third of workers would rather lose their wallet than their mobile.

When that survey was carried out five years ago, smartphones really hadn’t made much of an impact in the marketplace as Nokia and Blackberry dominated the handset industry.

Today, with smartphones from Apple and Samsung dominating, there’s no doubt the mobile phone is even more important to the typical user. So maybe Thorsten and the Blackberry team are onto something.

Even if the smartphone does turn out to be most peoples’ main computer, it’s unlikely tablets like the iPad are going to fade away as the larger format is too handy for many uses.

Like most things in life it’s a matter of choosing the right tool for the job and in many cases a tablet, or a Personal Computer, is the better device.

What is clear though, is that Blackberry has to make some big bets to survive, so Thorsten’s talking big is quite understandable. You have to give him points for chutzpah.

Disclaimer: I was given a Blackberry Z10 to trial while travelling in Tasmania. I couldn’t figure out how to use it.

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Windows Phone 8 launch

Can Windows Phone 8 reclaim Microsoft’s lost mobile crown?

This week’s launch of Window 8 Phone is part of Microsoft’s strategy to remain relevant in a world where personal computers and laptops are being left behind by smartphones and tablet computers.

In many ways, the tablet and mobile market is an opportunity lost by Microsoft – for a decade the market had been desperate for decent tablet computers and smartphones. The Windows tablet and PDA product in the early 2000s ran on was expensive, heavy and clunky hardware that discouraged even the most determined user.

The failure of Microsoft and their partners cost the company dearly when the iPhone and then the iPad stole the market from them. Today Apple’s iPad owns the tablet computer market while the iPhone on its own makes more money than all of Microsoft’s products put together.

Microsoft’s response to this threat to their core business has been slow and wasn’t helped by the company Windows Vista disaster, a mis-step that broke the PC upgrade cycle.

Fortunately Windows 7 put Microsoft’s core business back on an even keel as they contemplated their customers’ move away from the personal computer.

The strategy now for Microsoft with Windows 8 is the “run anywhere” philosophy where a document created on your tablet computer can be accessed just as easily on your PC or on a smartphone. This relies on a cloud computing service and the same operating system running on all devices – interestingly this “hybrid cloud” idea underpins Apple’s iCloud as well.

Being able to run documents across all Windows devices was a key part of Microsoft’s launch today with a demonstration of how Office 2013 files can be accessed.

To get the full features of Windows Phone though you’ll have to be running Windows 8 AND Microsoft 2013 on your tablet and personal computer.

Vendor lock-in isn’t surprising as this strategy lies at the heart of Microsoft’s business model – the problem is the market is moving away from the Windows platform and many of the devices, and people, Windows Phone users will be communicating with are using Android or Apple systems so many of the gee-whiz functions are lost.

One of the functions displayed is Rooms, which allows like minded people to share various features. As the Microsoft media release says;

Sometimes you want to share and chat with one group, not your entire social network. Rooms allow you to create private groups of people who have Windows Phone 8 — like your family members best friends or fantasy football league — and easily connect with just them. Chat, share calendars, shopping lists or photos in an ongoing conversation where only those invited can join in. You can share some aspects of Rooms with friends and family on other smartphones as well.

The problem is that when your family members, best friends or fantasy football league competitors aren’t using Windows 8, the Rooms function becomes little more than a glorified shared calendar – Dropbox and Google Docs provide more features.

For the family user Windows Phone 8 does have unique feature in allowing a children friendly profile called Kids Corner, where parents can quarantine the little ones from the main address books and features while allowing only certain apps to run. Unfortunately there’s only one Kids Corner so the little darlings will have to fight it out over the Angry Birds account.

That Angry Birds app is the harbinger of where Microsoft’s multiple screen strategy will either succeed or die in the ditch as it will be the available applications which will determine whether customers will buy the device over the iPhone or Android competitors.

Looking at the Samsung, HTC and Nokia phones that will be released running Windows Phone next month, all seem to be decent pieces of hardware although the Nokia 920 seems to be a hefty unit compared to the competition. Overall though all three phones seem to be decent competitors with their own strengths compared to the Android and Apple opposition.

The success of Windows Phone will define Microsoft’s place in the post-PC world, now its up to the company and its partners to sell them.

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