Category Archives: Tech

Windows 8

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I do not want to get into this too much as it is way too soon to praise, critique or condemn a product demoed so early in the product development cycle. For the record though I love the Metro UI part of Windows 8. I think it is an innovative user interface and I have said so before about Windows Phone 7 Series.

Nevertheless I will point out one important distinction between Apple and Microsoft. Apple announces features when they are mostly baked. They do not come with a feature or product and say: “While today it has still bugs, just wait until it is out in a year”. That is just bad business. And they make technical design decisions and then stick to them. The recent ambiguity coming out of Microsoft with what will happen to traditional Windows apps on Windows 8 leads to confusion and is to  the detriment of the new product.

Update: Oh yes, one more thing. IE10 will drop support for Flash. Now I think the message about this piece of technology is clear. And again Apple was the first one to take the jump. So how about Android? Anyone got Flash running on an Android device?

Steve

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Last week, 2 days before my graduation, Steve Jobs stepped down as CEO of Apple. It was in what  I have come to understand – his preferred way – with a simple email stating the facts without any pompous speeches or big statements. His letter to the Apple Board can be found all over the internet and I will not repost it here.

I want to address 2 things in this post. First what does this mean for the industry and Apple. Second, what does it mean for me.

The internet is full of praise about Jobs. I do not need to reiterate all those statements but it is clear Apple without Jobs was dying and when he came back in 1997 he turned it around and made it the biggest company by market cap in the world, not to mention the most influential one in terms of consumer electronics. But he did not do it alone. In light of all the things Apple achieved over the years – Steve’s biggest one may be the company itself. It is impossible that a single man could achieve all those things by himself. No, he built a fantastic team of people and embedded what makes him special in the company DNA. It is up to them now to continue executing on the vision and strategy.

For me Steve represents something I strive for. In one of his famous “stevenotes” he mentioned that Apple is at a crossroad of Liberal Arts and Technology. I find that to be a sweet spot. I think humanity got too fascinated by numbers – speed of your processor, size of your bonus check, speed of your porsche – and we forgot how to enjoy life and surround ourselves with beautiful things and experiences. He always argued that even the most mundane task can be made easy if you have fun doing it.

I even wrote my Leadership paper about Level 5 leadership and Steve Jobs. There my thesis was as follows:

Few would define Steve Jobs, CEO of Apple Inc. as anything but a rock star CEO. However, I would ask you to bare with me as I will try to make my case why Steve Jobs is actually a Level 5 leader who has unintentionally garnered a lot of attention and his presentations have become a media event earning him the unwanted rock-star CEO status.

I still think this to be true. Apple has learned how to make use of these presentations but Jobs was never a rockstar CEO, well not in his second term anyway. And he has my respect for that. To get a feel for his modesty, the ability to set standards, make tough decisions I recommend watching the following 2 videos. The first one is his famous Stanford Graduation speech from 2005

Steve Jobs Stanford Commencement Speech

and second is his interview with Walt Mossberg and Kara Swisher at D8 2010:

Steve Jobs D8 2010

In the end he is one of the early Silicon Valley entrepreneurs and I think all feel a bit saddened by the end of his tenure as CEO. But as he said himself – moving on, clearing out the old and replacing with the new is one of the most important things in life. I look forward to what Apple does without him and I wish him all the best.

HP, Palm and WebOS

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If you haven't been living under a rock for the past few days you most likely noticed that HP, as in the biggest PC vendor in the world, has decided to dump its:

  1. PC business
  2. The smartphone and tablet business
  3. Buy Autonomy for $10 Billion

What will happen to WebOS is unclear. It seem HP is looking to license it to OEM's.

The logic as explained by the CEO Leo Apotheker is that HP needs to get out of the low margin PC business to focus on the higher margin enterprise software market. The logic echoes the one used by IBM when Big Blue sold its PC business to the Lenovo Group. It is a result of the glut in the PC market and the impact of the iPad. I am specifically not saying tablets because let us be honest about it – there is no contender at the moment.

All of us who hoped HP could have a dog in the fight over the new computing in the form of the Touchpad with Palm's WebOS this is sad news. I personally always thought that WebOS is a platform that could give Apple a run for its money if only someone big would put big money behind it and a real strategy. Palm did not have the resources and when HP announced its acquisition of Palm my hopes went up. After all HP has an engineering history and has the wallet to support a big push. 

Unfortunately it seems HP lacks the balls. Only after a few months after the Touchpad entered the market – HP is waving the white flag. What did they expect? First of all if the product was not ready, they should have waited until they feel it is and then launch. And if they felt is was ready they should have soldiered on and learned from the feedback of the customers. One could make the contrast between the launch of the Touchpad and the launch of the original MacBook Air. When that machine launched the reviews called it underpowered, expensive, lacking features and so forth. The sales weren't any good. But did Apple pull the plug? No, because they believed in the vision of a thin super fast computer you could actually carry around. And so they went back and came with the killer laptop that is this generation of the MacBook Air. I think HP did not really have a vision or did not trust the vision of the few who did.

If you believe it is a strategically sound choice – then why did HP buy Palm in the first place? Did they really think they could get it right after only a few month? Apple spent years researching and developing what we today know as the iPhone and iPad. Why on Earth did HP think they could do it faster? I believe when HP decided to buy Palm they should have taken the time to formulate and setup a clear vision and strategy on how to compete with Apple and Android in the smartphone and tablet markets. They should have accepted that while they are buying an interesting platform they need to commit to supporting it in the longer-term. This way it was just a waste of shareholder money.

HBR – Horace Dediu nails it

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Horace Dediu writing for the Harvard Business Review:

Instead, with Motorola, Google got a hold of the vehicle through which it can create and sell integrated products. The company is thus no longer just a plumber but also a house builder and real estate developer. It can now build showcases that demonstrate the value of its services. The challenge then is how it will sell plumbing to contractors while it also competes with them by building houses. Android’s big bet has yet to pay off and Google just doubled down.

Google is going to interfere in its own ecosystem because it felt being pushed into a corner. Nothing good comes out of desperate moves. I recommend Horace Dediu’s blog to everyone – http://www.asymco.com

Google and Motorola

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As many of you know, Google agreed to acquire Motorola Mobility (the mobile spin-off of Motorola) for $12.5 billion. What makes this move interesting is the fact that it is a supplier buying one of its vendors. Motorola has committed a few years back to a single OS strategy for its mobile products with Android being the OS. As such you can see that the company was already deep in the Android camp. Now why would a company like Google do this? Andy Rubin, the lead behind Android at Google, has said before that Google would never build phones but today it seems that is precisely what they are doing. What's up with that?

A few months ago I wrote a post on the strategic partnership Nokia and Microsoft entered into. My conclusion was that the move by Nokia was motivated by the fact that the competition between Android smartphone manufacturers was driving the ASPs down and that the only way to survive was to differentiate itself from he rest of the pack. Windows Phone 7 was that differentiation and gave Nokia the opportunity for relevance again. While the outcome of that is not yet known I stand by that assessment.

Google's acquisition of Motorola is in a sense similar. Motorola is struggling and while it did have some great phones (the Droid family) it has made losses in the past few quarters and was left behind by the likes of HTC or Samsung. I completely understand why they agreed to the acquisition – 40$ per share is more than anyone else would give for Motorola and is a great return for the shareholders – and it is pure cash.

The reason why Google invested one and a half years worth of net income into this deal is much more complex.

First of all there is the patent thing. The Android ecosystem is under attack for infringing on patents from all directions. Apple, Microsoft and Oracle are gearing up for more and will not relent easily so Google needs to build out its own arsenal of patents to defend it. While the jury is out there whether the infringements are real or not – I'll leave this to the experts – the fact is that Google's future platform may be in jeopardy. Because of lawsuits Samsung is unable to sell its Galaxy S phones and tablets in Australia and Europe and Oracle seems to be winning in the Java lawsuit where a victory by Oracle would shake the very foundation of Android. Motorola has quite a patent portfolio and while it will not stop the existing lawsuits it may help deter more of the cropping up.

The second reason for the acquisition is in my opinion the fragmentation of the Android ecosystem. There are currently numerous versions of Android out there, each having a different experience and none of them really being able to compete with the iPhone. Google wants a flagship device the likes of the Nexus series. But even the Nexus phones were still phones of partners. By acquiring Motorola Google gains the ability to build the one true Google Phone and replicate the vertically integrated experience of Apple.

Unfortunately I don't think it is a good move. First of all if Android does really infringe on the IP of other big players Google could have settled that before, but by dumping  the free OS on to the market without making deals before – it forced the hands of Apple, Microsoft and others. Motorola's patent portfolio will help in the defense but it will still be very costly, and with more lawsuits Android will become one hell of an expensive business. How many ads does Google have to sell to get that back?

Google wants to run Motorola as a separate business but I don't believe that can work very well. If they want to get this integrated experience they will need to work very closely together. And we all know how difficult post-M&A integration  is. Getting a real return on this investment will be very difficult. Some pundits mentioned that technically Google does not need to make Motorola profitable but again here I don't agree. What point is there to have a separate business to build the best of the best smartphones and not to have it to make money? If the flagship phones can not make money – which can?

And what will Samsung, LG and HTC do? They are the reason Android has been successful and they got royally screwed. Google just put them into the position of just another not-Googley Android phone manufacturer. While Google got statements from them saying how happy they are – is that reality or a PR stunt? Read them and you tell me. Microsoft is already opening their doors to all the manufacturers and stating they are the only open platform left. And after this move by Google – it may sound as an interesting proposition to the Asian OEMs.