Awesome, cheap. So what’s the catch?
News reaches the outpost in rural Ireland that Xiaomi, ‘China’s Apple’, fresh from launching their extraordinarily gorgeous steel-clad Android phone which at the top of the line retails at a similarly astounding €86 / $116, has now launched a $13 fit-band, which also looks really lovely. It appears from first reviews that the Chinese are figuring out how to do power and style (learned, perhaps, from making stylish things on behalf of those who wrote the book on design) as well as cheap, and that’s set to make some serious waves.
It made me think about the politics of technology, which I do quite a bit anyway. Connected people, and connected commerce ecosystems are clearly on the way. Being able to control those ecosystems gives enormous power. And one suspects that the Chinese are more interested in power than in profit, as while profit is currency limited, and therefore politically relative, power is a political absolute. In other words, if the Chinese can dominate the smartphone / tablet business, and by extension the people instrumentation business, that would undermine American attempts at technological hegemony, and create a strong platform for China. Therefore while Apple seeks to preserve its position as a premium brand with premium margin for premium profits, Xiaomi is playing a different game entirely.
In the early 1990’s, I like many in my profession would sing the praises of client-server computing and how it was such a quantum leap from the old days of IBM 3270 terminals hooked to mainframes. Then the internet happened and for a lot of folks, client-server was consigned to the dustbin of history. But not-so-fast, driven by economic necessity, old technology and a clever entrepreneur, client-server is making a comeback in the classrooms of NYC.
An article on The Verge website describes in detail how Neverware is using a sophisticated server, running an internal private cloud within a school, to provide a consistent user experience across a jumble of new and old technologies. Gone are the days of long boot times and slow response depending on which computer a student was assigned. It is also extensible to support the latest technology challenge of BYOD (bring your own device). As I said very clever and inexpensive, relative to a full technology refresh which schools today just don’t have the money for.
With the federal mandate “that all public schools will have to administer their standardized tests digitally by the 2014-2015 school year”. Neverware may well be the answer schools are looking for.
It has been a while since I put pen to paper (keyboard to blog) but after too long a hiatus, here we go.
I have long been a big fan of “Connections” both the book by James Burke as well as the PBS series. His underlying premise “however carefully you plan for the future, someone else’s actions will inevitably modify the way your plans turn out.”or the way I like to think about it “sometimes things come together in unanticipated ways” is used to understand the forces behind major technological, scientific and cultural shifts.
So a few months ago, my son of the band Superhumanoids started using this amazing new portable synthesizer, which is made by the Swedish firm Teenage Engineering. This thing really is a technological marvel in a very small package.
About a year or so ago, I wrote about the real 3D revolution and how additive manufacturing was going to change manufacturing as we know it. So imagine, my surprise when I read on the Wired blog that Teenage Engineering, were no longer going to sell spare parts (knobs etc.) but going to allow their customers or third parties to make their own by providing the software code to drive a 3D printer. It was just too expensive to ship single items from Sweden to musicians around the world. As the Wired post concludes:
Teenage Engineering’s intriguing move points to a near future where you can jam on your synth, fire up your 3-D printer, build an accessory, and snap it onto the device within hours. If the pattern continues, other electronics manufacturers — and all companies in general — will soon follow suit.
Isn’t interesting how sometimes the ducks do line up.
Most service providers have a multi-channel strategy, or a digital channel strategy, or some strategic objective to achieve “the right channel mix”. In a typically inside-out view of the world, each new channel that emerges (social media is a “new” channel, for example) is added to the others, and attempts are made to leverage unified processes so that there’s an integrated view of the customer, or a 360 degree view of the customer.
Meanwhile, the entire retail industry is digitizing. Just as IBM (who, in the interests of full disclosure, pay the wages of your correspondent) is talking about the increased importance of the CMO, Forrester have come out with some new research about how eBusiness is moving to the c-Suite. Apple has revolutionised the mobile phone business, the telco business, the consumer electronics business, and – crucially – the retail business. Everyone is racing to catch up, and while the traditional retailers have been lumbering into the online world ten or more years since mainstream internet adoption became real, suddenly they are being overtaken once again by an integrated digital mobile ecosystem that is further eroding retail conventions. So different retailers have done different things. Tesco and Walmart developed the online channel but both continue to struggle in a world that moves too fast for their scale; Best Buy still writhes in anguish; and Borders went bust. Quoting from Peter Sheldon over at Forrester, “In tomorrow’s Wi-fi connected, digitally enabled store, fixed checkout aisles and cash registers will fade away; instead the entire floor becomes the point of sale.”
It's ok, you can come out now!
There’s a strange dilemma in telco. Worldwide demand for its core product is skyrocketing, and all that the industry can do is complain about it. When you step back from it, it’s quite bizarre. It’s like a spoiled child, given everything they could ever want, with no restrictions, and over-protective parents decrying any attempt at discipline. Then, when the child has to fend for itself in the big bad world, she is totally unequipped to even consider the threats and opportunities that presents.
Imagine for a minute all iPads were 3G enabled. Now, imagine that no data plans were sold with them. Next, all users get free access to the iTunes app store. Now, everything is an app. Connectivity is an app (for random browsing). Bundles of call minutes could be sold as an app. Text and instant messaging too, if anyone still pays for that stuff. All other apps would have access bundled with them in a 3G context, in the same way as books for the Kindle have access bundled with them. Telcos become infrastructure providers for consumer electronics and applications (media) providers. The end.
We are all somewhat used to one technology firm suing another for patent infringement but they tend to be treated as isolated instances. (see NY Times). However when you look at the bigger picture as Tech Crunch has done below, you have to wonder how anyone can produce a new phone, let alone a ‘smart’ one.
I sort of remember back when Ericsson, Nokia, Qualcomm and Motorola ruled the smartphone market (2G days) that patent licensing could make up to 30% of the cost (worst case) although 5% was more typical and because of cross-licensing much less than that amongst the big 4. With the mess above – “patent thicket” sums it up beautifully , the barriers to entry and innovation are becoming inordinately high. Of course, as innovation stalls, there will be a silver lining as everyone keeps their phone for longer and the number of phones in landfills is reduced.
The Economist has also commented about this subject. They make the point that the rise of open source platforms throw a spanner (wrench) into the mix and disrupt the proprietary models of other major players (Microsoft, Apple, Nokia etc.)
Patent Thicket image from http://www.flickr.com/photos/floorsixtyfour/5061246255/