Technofile Europe

Curing Apple's boo-boo

Now that's the spirit: a first aid kit for poor poor iPhone4 owners.... 

 

Thanks Valleywag.

iPad puts Google on the backfoot

Image by Getty Images via Daylife

The most interesting debate about the iPad's impact on the tech industry is around the coming clash with Google.  The iPad clearly has the potential to replace at least one of our computer use-cases (eg the laptop in the kitchen/living room).   In the past week, it dawned on me how radical the threat to Google really is. 

Back in the dark days of blogging (over 3 years ago!), I wrote that Google was increasingly about navigation rather than search.  In 2006, 5 of the top 10 Google searches were navigation shortcuts like 'Facebook' or 'Bebo' rather than searches for discoverable information.  Google was fast becoming the gateway to the Web, ie the browser itself.   

Fast-forward to 2009, and by now nearly all top 10 Google searches are not search terms (see right). Google's primary use by consumers is as a navigation aid.  This means that the biggest risk to Google's traffic is people finding other ways to navigate to their favourite content. Google recognised this threat on the iPhone/iPod platform, and responded by launching its own phone and phone OS.  

But the iPad poses an altogether more serious threat -- if a proportion of PC useage migrates to the iPad, and people use apps to navigate directly to their content without passing Google, then the volume of Google searches could be seriously impacted. Joe Mele of Razorfish describes the effect here. 

It's unclear to me how this would impact Google's ability to monetise search -- none of the 'navigation' searches actually carry any Google Ad-Words alongside, so they are not monetised directly.  But the traffic they generate must contribute to Google ad pricing.  Perhaps someone with a better grasp of the Google Economy can enlighten us here?

The second part of Apple's assault on its former ally is the launch of the iAd platform to deliver adverts through apps.  Whereas Google isn't even monetising its Top 10 searches, Apple is offering developers a way to monetise the destination sites themselves, and taking a 40% cut of ad revenue to boot (more than Google takes from its AdSense partners).  

What these ads will look like, how they will be received by consumers, and whether they will be a big business for Apple all remain to be seen.  But it's a clear poke in Google's eye, with no clear way for the search giant to retaliate.  

The only way Google can now prevent Apple from eating into its browser/home page share and related search and ad revenue is to fight Apple on the platform itself.  Thanks to Apple's contrarian approach to vertical integration, we have come full circle: control of the endpoint is important again.  

iPhone vs Android?  I know where I'm putting my money...

Related articles by Zemanta

• Google Preparing An iPad Killer Says CEO Eric Schmidt [Rumor] (inquisitr.com)
• Yep: Google's Hoping iAd Will Get GoogleMob Approved (marketingpilgrim.com)
• Apple Deletes Google Brand from iPhone Search (cultofmac.com)

Tech market predictions for 2010

Following my mediocre performance with last year's predictions, let's hope that this year will see more action in the market, and hence more of my predictions coming true! 

If last year's theme was the waiting game, I see this year's as the spotty recovery.  There will be some big successes -- major IPOs, spectacular M&A deals -- but they will represent spikes in an otherwise halting market.  Picking the right assets and the right timing will be key for for investors and entrepreneurs alike during 2010 (and probably into 2011).

Here are my punts for the year (in no particular order): 

1. SaaS sales productivity will not recover in line with economic recovery.  The people-based sales model for software is broken and established vendors will see margins suffer, while newcomers with pure or near-pure web-selling models will take market share.
2. Useability design returns to the heart of web applications and services.  We've had a wonderful UI revolution with the iPhone, making most established websites look clunky. New web apps and e-commerce sites will be wildly successful not because they have more features, more data, more widgets, but because they are just easier, faster, smoother to use.  Quite a few established businesses will struggle to re-invent their interfaces and will lose share as a result.
3. The year of Location-Based Services (LBS). Not content with cracking the Wintel duopoly, Google finally kickstarts the LBS market by attacking it from every point in the value chain at once: a new phone and mobile OS (who needs handset makers?), a new sales channel (who needs operators?), its own geo-aware apps (who wants to pay map royalties?) and -- boldly -- its own base of potential LBS advertisers in the form of 100,000 retail outlets receiving Google decals with 2D barcodes this week.  If this doesn't do it for the long-awaited promise of LBS, what will?
4. Cache & Carry. The continuing increase in solid-state memory capacity helps make HD video ubiquitous. With 32GB SD cards now available, consumers will be able to store and move their favourite movies and TV shows at will. Computer manufacturers will start to ditch optical drives. Now if only Apple would open up its devices to external memory cards.... it would be a perfect world!!
5. The scale of the greentech bust will startle investors and entrepreneurs, as it becomes clear that the investment horizon and capital consumption of most ventures are beyond the scope of traditional funds.  As a result, 2010 will start to see the emergence of new types of funding vehicles, perhaps long-dated venture funds (20 years?) or hybrid equity/debt vehicles to better serve this market.
6. Microsoft buys RIM in an admission that its mobile strategy has failed, and that corporate Blackberry users are the last stand in its effort to retain control over the desktop and email.
7. One of the many startups flogging micropayment or mobile payment platforms will finally take off, kickstarting a desperately-needed revolution in the charging model for content.  This has to happen, this year or next.  But it will probably require the distribution power of a large partner, like a Google, a mobile operator or a financial services firm.
8. The much-awaited Apple tablet will be huge and possibly disruptive.  Everyone is projecting features onto this device, borrowing from the iPod below and the MacBook above.  But the real game-changer is the killer feature we don't know about yet.  My hunch?  It could become the perfect home entertainment control system for non-geeks -- imagine the tablet connecting seamlessly to the Web, your iTunes, and your speakers, with streaming music and videos served up by Lala...  Worth dreaming about.
9. Shakeout in music streaming.  As Spotify launches in the US this will be its year of reckoning: the company will either be crushed by the sheer scale of US freeloaders, or its ad-based revenue model will finally get the throughput it needs to be viable.  Look for serious jostling and grandstanding as music majors renegotiate with streaming services and digital distributors like iTunes.
10. Finally, I lamented last year that it was time to fix, really fix videoconferencing, and yet my pleas remained unheeded.  But this demo at CES made me think that -- just maybe! -- 2010 will be the year that a credible alternative emerges.  If Skype & HD TV makers can do this at home, why not the office?  Polycom RIP (and good riddance!). 

Scoring my 2009 predictions

Here it is -- the moment of reckoning for last year's predictions.  Looking back, 2009 feels like the year the world froze, waiting for stimuli to kick in and new policies to emerge from the fog.  Everyone was in a holding pattern, trying to keep the boat from leaking too much.  As a result, the  most frequent verdict on my 2009 predictions is 'sort of true, but not yet'.  

Let's call 2009 the year of lost momentum.  Both positive and negative trends slowed to a trickle... 

Next week I'll try to divine 2010 tech market trends, but in the meantime, here is a summary of my 2009 calls and how they fared:  

1. SaaS vendors who are not already at the inflection point of positive cash-flow will go bust. FALSE. We haven't seen any major players or even mid-sized VC-backed vendors disappear as yet, but don't kid yourself -- it's coming...
2. Outsourcing will come back into favour.  And it will be cheaper & better than ever, thanks to SaaS-style delivery of business apps built on VoiP communications platforms like Intelepeer. TRUE, but hard to prove.  The line between adopting a SaaS app and outsourcing a business process is blurring.  This trend continues.
3. Ad-supported digital media sites will see a massive shake-out – few generic newsletters or blogs will survive.  NOT YET.  Undoubtedly hundreds of thousands of small web sites have died (who noticed?), but even established ones like Salon.com continue to limp along, bleeding cash.  More high-profile disappearances are on the way.  But the most unexpected development in late 2009 was the decision by big media to try to reverse the tide of free content and re-establish payment models.  The shake-out continues. 
4. Social networks will see their values collapse, and many will disappear.  SORTA TRUE?  The monetisation model continues to elude, and most valuations that are bandied about are ephemeral.  Twitter did not get bought, MySpace is struggling, and smaller social networks (and regional plays like Tuenti) are picking off niche audiences. Where to from here?
5. Microsoft will continue to lose share in the browser market [and] will make defensive acquisitions, like Xobni. TRUE/FALSE.  IE's share of browser useage is down perhaps another 10% between 2008 and 2009 (see embedded chart, courtesy TheCounter.com).    But so far the Evil One has been slow to buy its way back into innovation, making only 2 acquisitions in marginal areas (healthcare software, games) vs 16 deals in 2008 (!).   If I were an investor I'd be screaming for a dividend!
6. CPA and creative rich media ads (games, viral video) will outperform other types of online advertising.  Expect consolidation among online ad networks. TRUE. The overall online ad market was flat to stagnant in 2009.  Video ads were one of the few bright spots (according to e-marketer, see table below). Quite a few networks were acquired, though most not for big values.  The exception was Google's acquisition of AdMob.  Hi-Media bought AdLink. Orange acquired Unanimis.  And Fox acquired UTarget, ClickDiario and Directa Network.  Etcetera.,.
7. Consumer appetite for innovation will slow, compounding Apple’s challenge in dealing with a sick Steve Jobs.  [...] don’t be a shareholder while they figure it out. FALSE.  Apple just keeps on cracking, and the market keeps on lovin' it.  If you had bought shares at the time of my prediction, you would have doubled your money by now.  And that's before the release of the eagerly awaited iTablet  iPanel  iSlate or whatever. 
8. A lot of local newspapers and offline magazines will disappear in 2009, which is kind of sad.TRUE.  The Star Tribune, Heartland Newspapers, Philadelphia dailies, Chicago Tribune, Chicago Sun-Times and many other city and community papers closed. Here's a summary. The one bright spot on the media horizon is the continued experimentation with new ways to fund investigative journalism (like the American News Project/HuffPost JV and News21). 
9. Project management tools like Daptiv, and construction industry SaaS vendors like BiW and will thrive as governments pump gazillions into ‘stimulating’ infrastructure projects. NOT YET!  As should have been predictable, stimulus money is crawling through the economy like molasses...
10. The shake-out among European VCs will continue at its glacial pace.  TRUE.  No one has formally shut up shop (do they ever?), but a growing number of funds are slowing or stopping to invest while they wait wait for a window in which to raise a new fund...  

And the one item from my wishlist...

• Somebody fix videoconferencing, puh-lease!  There must be a better way between Skype video and a $150k TelePresence implementation from Cisco.  This would be a great time to go to market with a Polycom killer!  STILL WAITING...

Stay tuned for a gaze into the 2010 crystal ball.

Reporting from MWC: the fight is on

I didn't stay long at this year's MWC conference (fka 3GSM) in Barcelona.  Just long enough to tap the screens of the latest iPhone copycat devices, to absorb a lot of techie promo about LTE and WiMAX, and to wonder aloud whether CBoss's legendary booth babes are old enough to be here and what on earth they have to do with IT crisis management. 

Two things struck me:

First, the number of subscale technology companies trying to sell similar software or hardware products to mobile operators -- mobile browsers, content delivery platforms, billing solutions, device management platforms, subscriber management, and so on.

It is clear that in mobile -- as in enterprise technologies -- only a fraction of the innovations of recent years have been integrated into mainstream services.  There is a huge overhang of well-designed, scalable products, but too little appetite from operators to buy them.  Many vendors stay alive by selling into operators in developing countries, while trying to find an angle into one of the majors. 

There will be a lot of fall-out in the coming years, as many of the private vendors disappear or consolidate.  Operators will largely focus on making the technologies they already bought deliver their ARPU-increasing promise. 

My gross generalisation of the day: it's not a good time to be a mobile infrastructure or application startup.

Second, the battle of the giants for the mobile value chain is really heating up.

Microsoft, Nokia, RIM, Orange and O2 all announced new application store initiatives, trying to recapture lost ground against Apple's fabulously popular iTunes-based App Store.  Operators are taking advantage to re-brand and re-launch their expensive, failed content portals.  The competition among Ovi, Windows Marketplace, Application Center, and O2 Litmus should be a boon to app developers, and may well be the nail in the coffin for independent aggregators of apps and content.

Then Nokia really pulled took of the gloves, announcing that it would embed Skype's VoiP client in upcoming Nokia phones.  That's a slap in the face of its operator partners, whose precious voice revenues are under attack from all sides.  At the Jefferies cocktail, VCs were talking about peer-to-peer WiFi networking that would enable phones to connect while bypassing the operator altogether. Ouch.

Globally, mobile voice and data revenues are a bright spot in an otherwise bleak outlook for tech markets.  But within those headline figures are some brutal shifts.  Handset sales will be down this year, so phone makers have to find new sources of revenue.  The mobile operating systems are being pushed into commoditisation by Google Android and a soon-to-be-open-source Symbian.  And operators are under pressure to open their walled gardens so that consumers can have the mobile web access they so desperately want.  The solution for all three is a subscription or transaction relationship with the consumer. 

It's going to be a dirty fight, and consumers stand to benefit. 

But surely the most exciting development of all was the GSMA's announcement that it had finally  wrested agreement from handset vendors to standardise their chargers!  Yippee!

Amazing factoid: disposed chargers generate 51,000 metric tons (!) of waste globally each year.  I suspect that number will get a short-term boost as millions of people bin the 3 chargers they've been saving 'just in case' they return to Motorola...  What I'd really like to know is how much revenue the handset vendors are giving up by doing away with proprietary, expensive-to-replace chargers.  If they really go through with this during the recession, I will have a newfound respect for corporate social responsibility.

My tech market predictions for 2009

For some reason I’m always closing deals in December/January, so my blog runs dry for a while.  But here they are, late again – my tech market predictions for the interesting times we call 2009:

1. SaaS vendors who are not already at the inflection point of positive cash-flow and controlled churn will go bust, unless their investors have very deep pockets indeed.  It will be hard to sell your way out of this slump. The economic environment plays to SaaS, but most of the business models ain't there yet.
2. On the other hand, outsourcing will come back into favour once the market settles a bit.  And it will be cheaper & better than ever, thanks to SaaS-style delivery of business apps built on VoiP communications platforms like Intelepeer. 
3. Ad-supported digital media sites will see a massive shake-out -– few generic newsletters or blogs will survive on their own.
4. Social networks as a category will see their values collapse, and many will disappear.  Even the Facebook gorilla will never grow back into its $15bn valuation, no matter how many whoppers.
5. Microsoft will continue to lose share in the browser market.  By integrating more apps into Gmail, Google is creating a platform that threatens Outlook/Exchange.  For this reason Microsoft will use its massive cash pile and low valuations to make defensive acquisitions, like Xobni.
6. CPA and creative rich media ads (games, viral video) will outperform other types of online advertising.  Expect consolidation as the few online ad networks with cash try to acquire growth.  Targets will include disruptive networks like Specific Media and online lead gen specialists.
7. Consumer appetite for innovation will slow, compounding Apple’s challenge in dealing with a sick Steve Jobs.  Since we’re still absorbing last year’s fabulous gadgets, the company has some time to develop a new roadmap.  But don’t be a shareholder while they figure it out.
8. A lot of local newspapers and offline magazines will disappear in 2009, which is kind of sad.
9. Project management tools like Daptiv, and construction industry SaaS vendors like BiW and others may well thrive, as governments pump gazillions into ‘stimulating’ infrastructure projects everywhere.
10. The shake-out among European VCs will continue at its glacial pace.  Timing can be a real bitch, but this downturn is all about the moolah.  Those with  cash have a shot at a winning strategy (tricky though it may be to find).  Those who don’t, won’t get to play.

As always, one item for the wishlist (I didn't get my dumbed-down cellphone last year...):

• Somebody fix videoconferencing, puh-lease!  There must be a better way between Skype video and a $150k TelePresence implementation from Cisco.  This would be a great time to go to market with a Polycom killer!

Finally, I still see this is a great time for European entrepreneurs.  In fact, many will fare better in this market than their US peers, having always been more frugal and used to operating with fewer financing options.  The maturation of serial entrepeneurship in Europe will continue.

Stay tuned for news from the Mobile World Congress (fka 3GSM) next week...

The beginning of the end for Microsoft?

This summer has seen a number of little erosions of Microsoft's power in the market which -- when taken together -- show the tide turning in a serious way against the evil empire.  And the decline may come quicker than people expect.  Redmond is definitely on the defensive.

It started with the failed launch of the new operating system Vista.  With strong resistance from business buyers and lackluster interest from consumers, Microsoft knew in late 2007 that it had a dud on its hands.  But the news has gone from bad to worse. 

Instead of accelerating new PC shipments (as previous new versions of the OS had done), Vista is slowing them down, upsetting PC makers who are already reeling from brutal price competition and a slowing economy.  So Microsoft took a hard line: from 30 June this year no one is allowed to ship a PC with XP installed.  That pushed PC makers too far, so they are getting creative:

• It is widely known that resellers are offering to downgrade customers to XP at little or no cost.  According to InfoWorld, some 35% of business users are ripping out Vista from their new PCs.  As a result, Vista is on less than 15% of desktops, and even that number is likely to be overstated as it is based on shipments.
• For months now HP has been shipping PCs with a Vista Business Licence (as it has to), but with XP pre-loaded so that customers can downgrade themselves. 
• The Wall Street Journal published a lengthy report yesterday [sorry, registration may be required] about how PC makers are adding proprietary software to PCs that mask Vista's more annoying features and make it faster and easier to use. Dell added a 'Dock' that looks suspiciously like the Mac Dock we know and love.  HP has developed its own interface that sits on top of Vista for managing digital media on its new line of touch-screen PCs.  Sony is doing the same, giving consumers a choice of three types of 'desktop' (business, home, etc) which remove much of Vista's clutter.
• New Linux-based desktop PCs are gaining ground beyond the geek market, though still a tiny 2% of the overall market, or less. But look at the $350 EeePC from Asutek, with others to follow.

Microsoft's share of browsers is slipping, down to 58% (off 7 points) from last year.  In general, Microsoft appears to be getting very defensive about its Internet presence: the failed talks with Yahoo, the acquisition of Greenfield Online announced today (which will give it access to a wealth of consumer data and research panels).  The beta version of Explorer 8, its latest browser incarnation, is said to include a Private Browsing setting which will block ads being served by arch-enemy Google, among others.

Microsoft is suffering the indignity of people buying powerful Windows Mobile devices and then using software from vendors like Kinoma to 'improve on' the user interface.  For $30 any consumer can enable Kinoma to take over the multimedia functions of a phone or PDA running Windows Mobile and make the entire menu structure disappear, to be replaced by intuitive touch-based navigation very similar to an iPhone.  Ouch!

Slow death by a thousand cuts?

Whither Garmin?

So the battle of GPS giants ended with a bit of a whimper.  Garmin withdrew from the bidding for TeleAtlas and simultaneously announced an extended deal with Navteq, who will continue providing maps to Garmin until 2015.  It makes you wonder how much say Nokia, who is in the process of buying Navteq, had in the negotiation of the Garmin contract extension.

In spite of Garmin's denials, rumour continues to swirl that the company is considering building out its own map-making network.  That would be a heavy, multi-year investment and one Garmin's shareholders ought to be interested to hear about.   But it may also be the only way to to de-risk a business whose main offering now depends on a large potential rival that wants to own the navigation and location-based services (LBS) market.

For now, the markets appear relieved that Garmin did not overpay for TeleAtlas, sending Garmin's share price up 14%. The kind view is that Garmin's bid was anyway just a gambit to force TomTom into paying an outlandish price (38 x 2007 EBITDA) for its own mapmaker.  But Garmin's future now contains a big hairy unknown, which has yet to be priced into the stock...

What HD TV??

Guest report from Evan Frank from the IFA consumer electronics show in Berlin:

Last week I attended the IFA (consumer electronics) conference in Berlin. What struck me walking through the exhibition was just how far LCD and plasma technology has come in the past few years. The manufacturers continue to push the boat out beyond what seems possible, as demonstrated by the truly mind-blowing Samsung 102-inch plasma on display, below:

Televisions are becoming wider, thinner, sleeker and cheaper than ever before. And they are all ready for High-Definition (HD) television signals. In fact, as a consumer you’d be hard-pressed to find a non-HD-ready plasma TV (and who would want that, anyway?). Yet despite this favourable trend, are the television networks holding up their end of the bargain?

I come from New York City, home of Time Warner Cable (and really good pizza and Chinese food), so I’m a bit spoiled. Time Warner, the main broadcast network in the city, offers some 25 HD channels, with content ranging from premium stations (like HBO), to sports, nature and so on. The service costs between £30 and £45 per month, with no up front charge. Generally speaking, good HD content is commonplace in your typical NYC household (and has been for the past 18-24 months).

Back here in London, after two years I finally succumbed to buying a cable subscription -– mainly because I bit the bullet and bought myself a plasma. So, what is the HD experience like on this side of the pond?

Sky’s HD offering looks like this: first you have to pay £299 just to get the box. Then you assemble your channel package, say standard sports + movies. This will set you back around £40/month (similar to New York). Want HD programming?  Add another £10/month. What do you get?  Ten dedicated HD channels, which apparently include frequent non-HD programming.

Wow. Even for someone who’s been seen once or twice paying $25 for a cheeseburger and fries at Automat, this seems a little excessive.

But I digress. Back at the IFA, over a bratwurst I chatted with an entrepreneur whose company sells content management platforms to traditional broadcasters and new IPTV operators. He reinforced what seems obvious, that:

in the era of user-generated content and incredibly rich PC and console games, the traditional networks are terrified that their bread and butter –- from Fox Kids to Desperate Housewives -- is losing our interest. To be sure, some broadcasters such as BskyB are announcing subscriber growth (although much of this is attributable to the price and marketing war with Virgin Media), but can they actually recover?

If networks want to do something about subscriber retention and growth in the age of the ubiquitous consumer Internet -– here’s an idea: invest in making quality content affordable and available for the current generation of HD-ready plasmas. These amazing screens are proliferating in households and are woefully underexploited. Perhaps if the end-user experience reflects the capabilities of the technology, the networks might reverse the flow of user interest back to the TV.

iPhone DOA?

At last, here is something truly functional for those of us who steadfastly refuse to believe in full device convergence!  I've sorta kinda hankered after an iPhone since they came out in the States, but I really didn't want the phone bit.  I like my phones tiny (so they fit in a jean pocket), and robust (so they can survive a fall on the floor).  Converged devices, including the Blackberry, tend to be neither, and have crappy phones too.

Now comes the iPod Touch, an iPhone without the phone!  Brilliant -- now I can do emails, surf the web, listen to music and watch videos from the best connected and sexiest multimedia device on the market.  With iTunes integration and WiFi connectivity, the Touch nearly has it all.  Including that fabulous finger-flicking interface...

I think this is such a risky move for Apple it makes you wonder whether the iPod and iPhone divisions are having a little mis-coordinated stand-off.  I wouldn't be surprised if more people than Steve Jobs expects feel the way I do -- that they'd just as soon have two specialised devices instead of one fat converged one.  If so, the Touch could inflict significant damage to the iPhone before it ever reaches the 2m sales barrier.  Never mind the European launch...

Perhaps that's why Steve pre-emptively cut the iPhone retail price by $200?

I'll have another shot of design please

A new release of the iMac is here.  I just love the relentless focus on design.  Nice.

First mention of iPhone on this blog...

... well, except for mentions in passing here, here, here and here. 

Judging by the pace at which iPods increased in features and dropped in value, I think I can wait another year or two to get my better, cheaper iPhone.  Meanwhile, what do you get when you pulverise an iPhone?  A surprising amount of black muck, apparently, see willitblend.com.

More annoying future technologies

For some light relief from the usual technology market predictions, check out Valleywag's list of Annoying Future Technologies.  Good idea. My favourites:

4. Camera-wearing freaks: fulltime vloggers like Justin.tv and bloggers who video-interview everyone at conferences (very annoying). Think about it: the chance of anything stupid you do ending up on YouTube is increasing exponentially alongside camera-equipped mobile phone shipments.... scary.

3. Agressive in-car GPS: (or worse: GPS on your phone) those annoying voices will multiply, telling you where to go. The proliferation of instructions will particularly annoy girlwithoutawatch, who hates being told what to do by me, much less by a gadget.

7. Energy-saving wonks: those people who convince you that you can save the planet by turning off your new Intel-Mac at night but still drive a Porsche Cayenne by day.  Hmmm.

I would add a few annoying future technologies of my own:

8. Fugitive avatars: surely it's just a matter of time before IBM or Toyota's digital spokespeople from Second Life cross over into the Web or onto our TV screens to plug their products.  Do we all have to become cartoons to interact in future? (The picture on the left is IBM CEO Sam Palmisano's avatar at an IBM 'townhall' meeting with his virtual employees.... really.)

9. Voice-activated devices: is it just me who prays that voice activation will not become ubiquitous, as everyone seems to predict?  It's bad enough that people walk down the street talking into their earpiece wires.  How annoying will it be when your neighbor in the subway shouts into his phone "Oven: preheat to 200 degrees!"?

10. Intrusive car safety features: this is more of a current technology gripe if you drive a BMW 7 Series, but for the rest of us it's a future problem: lane departure warnings, blind spot detection, parallel parking assistants, what next?  You had me plenty annoyed at those bing-bing-bing seatbelt reminders!

11. Ubiquitous RFID tags: each year that passes without the RFID adoption predictions coming true is a relief.  Who likes the idea of RIFD tags in our clothes which may or may not have been de-activated at checkout?  I've got enough paranoia with Ken Livingstone watching (and taxing) my every move, I don't really need Austin Reed to know where I dryclean.

12. More inane communication methods: Email, SMS, MMS, IM, chat, blog, Twitter... I'm sure there are some tiny fragments of our time that have not yet been exploited for communications.  What do I do between my last Twitter and my next blog note?  Surely I need to let my social network know what I'm up to? 

Any others?

Apple's $4bn accident or stock scam?

Here's a squirm-inducing testament to the power of blogs.  Valleywag reports on yesterday's downward 'blip' in Apple's stock price caused by a blog reporting delays to the iPhone release.  The blog note, published on Engadget, was based on a fake internal email that appeared to be leaked from Apple.  The incident momentary wiped $4bn off Apple's market cap.  Om reports on the impact:

In the volatile 23 minutes of turmoil between the minute the disinformation hit the stock market at 8:55 PST and Apple’s announcement that the initial email “is fake and did not come from Apple,” nearly 15 million shares changed hands. That’s 60% of Apple’s normal volume in well under a half hour. That’s also an awful lot money lost for some investors - and gained for others - all of it because of a lie.

Information velocity does have its downside.  I'd like to believe that no one purposely benefited from this event, but that is probably naive.  It does not stretch the imagination to see that unscrupulous traders will get the idea that these blips can be replicated and exploited.  Two factors conspire to create a real structural problem for the public markets here:

1. Rumour moves much faster than anyone's ability to verify or deny (in fact, I'm pretty impressed with Apple's 23-minute reaction)
2. Near real-time trading capability is in the hands of millions of people, and -- more importantly -- billions of hedge-fund controlled dollars

I'm a big believer in unfettered markets and perfect stock pricing that reflects all available information, but today's laws and regulations are not really made to cope with this type of situation.  What will the SEC make of it?

[Credit: Realtimestockquote.com for the chart]

Great unmarketable technologies

I'd like to start an occasional series of posts about great technologies that can't be commercialised.  You know the ones -- great simplifying ideas that disrupt so many players in the value chain that they prevent it from seeing the light of day.  This problem usually occurs at the dividing line between proprietary and open standards.  I'll describe one today, but let me know if you think of others (current or historical).

I was reminded of th commercialisation dilemma recently in reference to a Cambridge-based company called Splashpower.  This company makes a universal charging pad, on which you can charge the batteries of all your electronic devices through electromagnetic induction.  No plugs, no wires -- just a pad on which you drop your phones and Palms and Blackberries and let them soak up the juice.  Who wouldn't want one of those??

Sadly, the company has spent over 4 years (and several million bucks courtesy of Benchmark and other investors) trying to get this product to market without success.  I don't have any inside knowledge, but I do have a view (isn't blogging great?), so please correct me if there is more to the story.

For Splashpower's pad to work, every device needs to have a little Splashpower module in it.  That's what makes it so damn difficult to bring to market.  In one fell swoop the pad would do away with one my biggest pet peeves -- the proliferation and incompatibility of chargers.  Phone makers obviously like the status quo because (a) they make good money selling additional chargers (sometimes they cost £30 or more!) and (b) it's yet another way to lock consumers in to their brand.  The latter is particularly galling, because it increases resistance to switching even if you're not happy with the features of the device.  Sometimes Ithink there ought to be a law to force all phone chargers to have ineroperable connectors.

For the same reason that our chargers remain proprietary, Splashpower will never get wide adoption if it has to get its chip inside the actual devices.  There are in my view only two ways around this:

• find a technical approach to remote charging without putting a chip inside the device; or,
• find a partner in the consumer electronics industry that (a) has clout, and (b) is willing to be disruptive to themselves and the rest of the industry.

Hmmm... who might be willing to do that?

Of course!  This is just the sort of thing Steve Jobs could do to upset the industry.  And it could provide a nice differentiator for next-gen iPods and the upcoming iPhone.  But in order for it to be long-term disruptive, Steve would have to be willing to licence the technology on a non-exclusive basis.  And so far, for all its attractions, the iPhone does not appear to be a very open platform; it's only extensible by Apple and it's unclear which 3rd-party applications will be supported.

If not Steve Jobs then someone else ought to take the plunge and suggest this radical idea to the industry: devices should compete on their functions, eg their hardware and software design.  Let's make all the external interfaces (networking, power) open and extensible.  That would increase consumer choice, improve devices and, surely, lift sales for the industry as a whole?

I want my Web tee-vee!

One of my biggest gripes at the moment is how hard it is to find and grab television shows on the Internet.   

First, it often happens that we see an interesting documentary or show which we didn't record but would like to share with someone.  Usually we would even be happy to pay (yes PAY!) for a copy we can send home.  But have you ever tried to buy a one-off doc from the BBC or Channel 4?  Virtually impossible.  Their online shops only carry a tiny fraction of their TV output in DVD format. Usually you can Google your way to the original production company and, if you're lucky, you might be able to send them an email and request to buy the show.  Talk about leaving money on the table -- the channels could stock every original, one-off programme for sale immediately after it has aired and make a good incremental buck for little effort.

Second, we are fed up with relying on the incomprehensible scheduling strategies for imported US TV series.  You manage to record & watch all of Season 5 of the Sopranos and then it disappears for 7 months.  Suddenly it's back on but -- no, wait! -- it's a re-run of season 4!  By the time you've realised that Season 6 is on E4 at 2am, you've missed the all-important opener.  Does anyone know when Six Feet Under is coming back and on which channel?  Preferably without the little sign language person in the corner?  Didn't think so....

Aargh...there must be a better way!

Recently someone told me about one of those great web ideas which I wish I'd had first so I could quit my dayjob and risk it all for dot-com glory: TIOTI - Tape It Off The Internet.  TIOTI is a directory of television shows available on the Internet, whether it's through a legal distributor like iTunes or Amazon unBox as well as illegal BitTorrent streams.  TIOTI does not provide the video stream themselves, they only keep track of where you can find it, how good it is and how you can get your hands on it.  It's like your Tivo programming guide, but with the whole world's television behind, not just the next 7 days. 

The service is currently in private beta so you'll have to beg for an invitation to try it out.  I think the basic idea is pretty good, and the founders are adding some nice web two-dot-oh features like tagging and sharing.  Once the industry figures out its charging model, these guys can take a cut for delivering leads to the legal distributors and content sites like IMDB.  I wish them the best of luck.

Diatribe on DRM and Steve Jobs

Steve Jobs recently made a headline-grabbing public plea to the entertainment industry to abandon copy protection for multimedia content.  He is urging the industry to give up the search for a workable Digital Rights Management (DRM) solution by making a case that:

• DRM doesn't work and is criminalising millions of people who are ripping CDs they bought legitimately, or downloading content from both legit and dubious sources on the Internet.
• DRM retards the growth of the entertainment industry, as proven by the fact that iTunes music sales are the only growth engine of the music business today.
• 90% of music is sold unprotected anyway in the form of CDs, so what's the difference?

Abolishing DRM sounds like a simple (albeit radical) solution, which appeals to our inner hippie and also casts Jobs in his favourite role: taking the side of "the people" vs the big bad corporations.  But this is quite disingenuous coming from the man who perfected the art of technology lock-in with a string of innovations over the years (iMac + OS X + Life Apps; iPod + iTunes; iPhone closed to third-party apps). [Disclosure: I have an iMac at home and I love it.]

[open sidebar] Jobs' argument reminds me of the debate regarding pharmaceutical patents.  The tempting case is made that developing countries should be allowed to flout existing patents and produce cheap generics for the world's poor.  The ultimate objective is non-controversial.  But this approach kills the profit motive and ultimately the incentive to develop new drugs.  The same objective can be achieved by using direct government (or private -- see the Gates Foundation's efforts) subsidies to buy drugs at market and subsidise them for the poor.  And this approach retains -- even increases -- the incentive for pharmaceutical companies to develop the drugs the poor most need. [close sidebar]

Similarly, quality multimedia content costs money to produce. In the case of music, for example, it costs a lot of money, most of which is spent on artists whose records never recoup their investment.  That is the risk taken by record companies.  Quality content will only be produced if it can make money for its producers.  The more efficient the commercialisation, the higher the economic returns, the more producers will enter the market -- all this is good news for consumers, who get more choice and lower prices.

Free content will quickly become garbage content.  This is already evident in the 95%+ garbage soaking up gigabytes on Google's YouTube server farms. Achieving interoperability of DRM systems is not a technical problem; it is primarily a political one.  The industry has made progress in this regard and it can complete the process. 

If the result is an accepted set of DRM standards and a competitive market for DRM technologies, then most of Steve Jobs' stated goals for the benefit of consumers will be met.  But not perhaps in the time frame he would like: Jobs is in a hurry to boost the music/video market, maybe because he needs to prop up iPod sales in 2008, when analysts predict slowing sales growth.

Consumers value what they pay for and are usually happy to pay for what they value.  $0.99 per song makes a compelling marketing slogan, but it is undoubtedly more efficient (and fair) if I can choose to spend $0.09 to listen to a song once, $0.49 to get it on my iPod, or $1.29 to transfer it to any one of my devices.  Especially if in each case the level of quality is assured.

A functioning DRM system can create huge distribution efficiencies and help grow the premium content market by a factor of ten.  The best way to reach more consumers is to enable device interoperability, microchunking of content and micro-billing.  All these require a set of DRM standards and technologies.  Steve Jobs has a great genius for blending technology, design and useability -- as such he can be a positive driver for interoperable DRM. 

Steve, why don't you call a summit with Steve Ballmer and Bob Iger and Howard Stringer and Sumner Redstone, et al, and make this happen?  This is the way you can free content.

3GSM -- Another Day, Another Phone

David Carratt on his second day working the phono-philes at 3GSM:

Spent a long working day scouring the show for investment opportunities. My colleague Eileen and I hunted separately most of the time to cover the huge grounds. The day started with the search for the perfect UI -- think 2.5D animation effects running on an ARM core. Got a tip that the LG Prada phone is the coolest new phone at the show. For fashionista Eileen, a new Prada anything is a "must have" and so we trekked over to the LG booth to see it close up -- sleek and black with few visible controls and touch screen driven softkeys. As luck would have it, at that very moment Eileen's nearly new Nokia "L'Amour Collection" phone falls to the floor and explodes into many pieces -- "Oh, I need a new phone!" -- time to review the Kennet phone policy I guess! That evening we're off to the Lehman Brothers drinks party. Much discussion about how WiMAX might come to Europe. European operators know that WiMAX offers the best bandwidth per unit spectrum at the lowest capex but nobody want to be a first mover to replace and/or cannibalise their existing network. What may be needed is a bold bid by China Mobile or NTT DoCoMo to win a European license -- that would cause the incumbents to build out new WiMAX networks. Watch this space.

Live from 3GSM...David Carratt reports

I’m delighted to have my colleague David Carratt as guest columnist for a few days, reporting live from the 3GSM congress in Barcelona (lucky sod!):

First impressions from 3GSM are rather blurry having got off a plane, been hit by massive Samsung billboards at the airport advertising RAZR lookalikes, spent half an hour blagging my way into the show –- persuaded the cashier that Tuesday after 4pm is not a full day so I should get in free today –- and then spending 3 hours at a corporate drinks party.

Spectacular walk at dusk up from the show site at Fira Barcelona to the Fundación Miró in Montjuïc Park overlooking the whole of Barcelona.

This year’s main preoccupation is "what next for your phone?" Is it a TV? Is it a personal navigator? Is it a video iPod? Or is it a mobile webcam? Nokia's new phones cover all these possibilities in a way that makes you wonder whether anyone knows the answers or just wants to cover the bases.

I am convinced that consumers don't want to watch broadcast live TV simultaneously with everyone else. After all, this is the media-fragmented, post-Tivo, "audience of one"-world, right? Apparently this isn't the only view. A mobile phone at 6" is as good as a plasma at 10ft, and the Nokia N77 packs stereo speakers. In this view of the world you end up with Bluetooth rear speakers in both your ears and a subwoofer in your shoes! …for a superior personal TV experience.

Maybe these two views aren't so different – video is here to stay but my bet is on time-shifted, downloaded multicasting rather than live simulcasting. Consumers want the flexibility to watch video in a non-linear format. Operators want to carry the packets to the phone (and they don't care whether you watch them or not).

The argument will be swayed by whether Apple's iPhone and other smart video phones are more attractive to consumers at a price greater than the free terminals (dumb phone + TV) provided by your operator. Would you rather use a video iPod with a built in smartphone or a TV with a plain old voice phone? My choice is device first, operator second!

Thanks David. Your consumer dilemma is a mirror image of the increasing tension between handset manufacturers and the operators. Steve Jobs would like nothing more than to sell the iPhone directly to consumers, bypassing the operator channel. So would Nokia. The operators meanwhile want to stop subsidising high-margin smartphones, and to increase ARPU on mass market phones. This epic struggle between Nokia/Motorola and Vodafone/Verizon is likely to consume the mobile phone industry for the next few years.

Getting video out of a PVR

Here is my latest gadget gripe.  Back in the growing Bleyleben nest we've done our best to increase our efficiency of TV viewing by installing a Tivo clone.  Since Tivo is not supported in the UK, and the next best thing -- the Sky+ box -- is a bit pricey and comes with loads of channels we don't want, the only alternative was a no-name PVR + Freeview connection.  In our case, that's the Humax 9200T.

First of all, we love this box. For £160 or so you get the full PVR functionality, a 160GB hard drive, and a Freeview tuner.  It's a cinch to set up & configure (eg, plug in and it does the rest), and the Electronic Programme Guide (EPG) is (nearly) idiot-proof.  I can't remember the last time we watched something when it actually aired.  Time-shifting rocks.

Great, so three months later we have a hard drive full of great documentaries (Planet Earth!), investigative reports (Panorama), comedy shows (Extras) and even reality TV worth saving (Ramsay's Kitchen Nightmares).  Some of these we'd like to give to relatives as (easy) Christmas gifts. But how the devil do we get them out of the Humax?!?

In fact, the Humax is quite progressive in that it comes with a USB 2.0 port, through which you can transfer digital images from your PC to the box, and (notionally) MPEG video files from the box to the PC.  There is no support for the Mac, but I've found some hardy techies who have managed to work around this here, but were stymied again here.  (For Tivo owners, here is How to View Tivo Recordings on your iPod. Thanks to Jeff Nolan for referencing this in a recent post.)

Now, I like to tinker with my gadgets as much as the next guy, but I can't see Mrs B letting me spend a whole weekend on this particular project...

I'm sure there is plenty of pressure on the PVR vendors not to make it too easy for consumers to move recorded video onto their PC, video iPod or DVDs.  But this feels like desperate swimming against the tide.  If home media convergence is to become a reality and products like Windows Media Centre PCs to sell, this needs to become seamless.  I hope it doesn't take too long, because my Humax hard drive is filling up!