Archive for the ‘Trends’ Category

CES in Hindsight

Posted: February 8, 2012 in Android, Apple, Convergence, Google, iPad, NFC, Tablet, Transparency, Trends
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This is certainly a belated post. I have been meaning to write it for many months but kept getting distracted. CES came and went with little that was earth shattering but a lot that was incremental. TV’s are more connected than ever while also getting bigger and thinner. Computers are slimmer and faster. The Macbook Air line is finally getting some serious competition but the pricing appears to be less than stellar. Here is a case where the Apple tax may be less than people suspect. SSD’s are slowly replacing hard drives and SSD speeds continue to increase. If you haven’t replaced your main hard drive with an SSD then you are in for a treat along with the concomitant blow to your wallet. Tablets are rushing forward. Vastly lower pricing should open tablets up to many more people and cause Android market share to surge. NFC is moving forward and uses are expanding. By 2013 I expect most top end smartphones will support NFC and that includes Apple.

There was, however, one area that brought a small amount of excitement – automotive. I have blogged before about Ford and their moves forward. There is a summary of the automotive announcements at Engadget so I won’t repeat a lot of it here. In general, phones, especially the iPhone, are being better integrated into automobiles and the move towards running apps on the automobile’s systems gets closer to reality. Right now most apps are proprietary but their numbers are increasing. Automobiles are getting more tightly connected to the web with the ability to send data between car and home. Back in 2009 GM and Ford announced that they intended to build Android cars. Here it is 2012 and we are still waiting but things are moving forward. The Chinese are there with the Roewe 350. Ford, GM, Mercedes et. al. are moving closer. In the end transparency of use and data will prevail and the automobile will merge seamlessly with the phone, TV and tablet.

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“Good Enough” and Business

Posted: June 17, 2011 in Broadcom, Engineering, Management, Qualcomm, Trends
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I just finish talking to a friend and mentioned my last post. As we discussed it I realized it was about the individual engineer. Missing was how the concept of “good enough” affects business. That was a very big omission on my part. It’s time to fix that mistake.

When it comes to business, the idea of being “good enough” has a huge impact on decision making and the future of companies. This is best illustrated by discussing an area I am intimately familiar with – the semiconductor business. Imagine you are running the fictitious company GPScom. GPScom makes the world’s best GPS chips. They are WAAS and LAAS capable, very sensitive, and simply the best GPS chips by far. They own the personal navigation device, PND, market along with being in most other GPS based devices. However, companies like Broadcom and Qualcomm start producing mobile phone chipsets with relatively poor GPS receivers in them. These chipsets have only basic GPS circuitry that lacks not only LAAS but WAAS. They aren’t very sensitive and the GPS might say you are in the parking lot when you are really in a cafe having a bowl of soup. The problem is, these receivers are mostly good enough. With proper software the mobile phone becomes a decent navigation device. Furthermore, after a couple of generations, these phone chipsets have GPS receivers that are more than good enough. Since they are integrated into the mobile phone chipset they burn less power, take less precious board real estate and cost less. This means they do a better job of meeting the needs of the consumer. The PND market begins to fade as mobile phones take it over. This is happening today. GPScom engineers can tell themselves all day long how their circuitry is superior. The problem is that sales, and hence revenue, are going to Broadcom and Qualcomm. GPScom will have to either diversify, get acquired, or watch itself become less and less relevant until it fades into the sunset.

As an area of technology moves forward there gets to be a tipping point when what can be put into a CMOS chip is good enough. At that point the technology gets integrated and becomes part of a bigger solution. Companies that fail to recognize this risk becoming irrelevant. This is why the idea of “good enough” isn’t just about the individual engineer. It affects core business strategy. Every company needs to be worried that their area of core competency will evolve to the point where “good enough” marginalizes their value. These companies must either diversify so that they make the chips with the broader functionality, acquire technology that can be integrated in, or get acquired themselves. Is your company aware of just what “good enough” is when it comes to their specialty areas or does hubris cloud their thinking?

It‘s All About Being “Good Enough”

Posted: June 17, 2011 in Apple, Engineering, Management, Trends
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Cliches exist because they contain truth in an easy to digest form. There’s an old saying among engineers. “Anyone can build a bridge. It takes a good engineer to do it on time and under budget.”  That one holds the essence of why I consider good engineering more difficult to accomplish than good science. My formal training was as a scientist. I have been around scientific research in both the theoretical and experimental areas and I certainly appreciate the difficulties involved. However, it is the imposition of schedule and budget into engineering that makes it even more difficult than good science. Budget doesn’t just apply to the resources involved in the creation of the item but also involves the cost of manufacture. Great engineering means understanding “Just good enough.” Like many topics in this blog the concept of “Just good enough” is much broader and more important than many people think. It is related to the concept of quality. In his book Quality is Free, Philip Crosby defines quality as “conformance to requirements.” Great engineering meets the customer’s needs in the best manner. Best, in most cases, means finding a solution the customer can afford. For this reason designing a mid sized sedan like the Honda Accord is much more difficult than designing something like a Ferrari Italia. The Accord is in a much more competitive space and has tremendous budget constraints. If you want to upgrade the audio system then you have to find cost savings elsewhere. Many thousands of components have characteristics that must be traded off in order to meet the target price-point. The Ferrari design starts by asking “What’s best?” Just for fun, when it comes to the Accord, you get to layer on tougher customer expectations. The Accord isn’t a showpiece. It is a day-to-day working automobile and must perform perfectly for many years with few service needs. The Ferrari is expected to require some pampering. Even several year old Ferraris usually have just a few thousand miles on them. The Accord is a much tougher design challenge.

One engineer I admire is Steve Wozniak. If you look at the Apple II, the computer that made Apple a real company, you find many examples of awesome engineering. Again and again features are included and performance is achieved with elegant rather than brute force design. The result was a great combination of features at a reasonable price for its day. To highlight what I mean by “just good enough” I am going to single out just one of the many elegant design choices in the Apple II; but first I need to set the stage.

The personal computing era was kicked off in 1975 with the January issue of Popular Electronics. The cover article was on the construction of a computer kit called the MITS Altair 8800. With it came the introduction of the S100 bus. The Altair 8800 was a frame style design where cards were added to increase functionality. While many functions such as main memory have moved to the motherboard, we retain this expansion concept today although the S100 bus has mostly moved into history.

The Altair 8800 was copied by many companies and expanded upon. The S100 bus became an industry standard expansion bus. Lots of companies made cards for the S100 bus. Because of this a lot of computers placed only the basics on the motherboard in an effort to control price. There are problems with this approach. Since there was no game controller (joystick, paddle, buttons) functionality included in the Altair, there was no standardized game interface. I once looked at the cost of adding joysticks to an S100 based computer. The card alone was several hundred dollars. The approach involved expensive analog to digital converters (ADCs). The result was that only keyboard based games evolved for the S100 based machines.

During this time, games like Pong and Breakout were popular. It made sense to bring them to personal computers but they required interactive game controllers i.e. paddles or joysticks. A keyboard used as a controller lacked the same smooth interactivity. Using the keyboard for games was a compromise aimed at satisfying the engineers and accountants and not the customers but it was a compromise most computer manufacturers had adopted. Enter Apple and a few others. In 1977 Apple introduced the Apple II. It came with game paddles along with games like Breakout. To accomplish this in a cost effective manner, Wozniak pushed most of the design into software. Since he had designed Breakout in hardware for Atari, this was a big change in mindset. Great engineers adopt what is best as opposed to just reworking what they did in the past. Simplifying hardware and pushing complexity into software would turn out to be a very important trend. Here was that trend at a very early stage. Look at the schematic below.

This is part of the schematic of the Apple II included in the Apple II Reference Manual dated January 1978. What looks like a 553 integrated circuit (H13) is actually a 558. This is a quad version of the venerable 555 timer chip. The 558 is used to generate four paddle, or two joystick, inputs. Each paddle is just a variable resistor. Hooked into the 558, the resistance of the paddle controller determines the oscillation frequency of a simple RC oscillator. A loop in the code keeps reading the oscillator. The microprocessor can only read a 1 or a 0. If the voltage is above a certain level the microprocessor sees a 1. Below that it sees a 0. The Apple II loops while looking at the game paddle input. By looking at the pattern, for example 111000111000111000, it can determine the frequency of oscillation. This is then related to a game paddle position and the screen paddle is moved to the appropriate screen position. The beauty of this is that the paddle controller doesn’t have to be super linear. The paddles just need to be consistent i.e. all paddles need to act the same way. Nonlinearities can be corrected in software. To the user, using visual feedback as he looks at the screen while turning the paddle, this is all “just good enough.” It is also a high quality solution since it meets the user’s expectations and the requirements for playing games like Breakout. Including games and controllers gave the Apple II great consumer appeal and was a big part of its success and with it the success of Apple Computer.

Today we often see companies just iterating on a theme. These are the so-so companies. Great companies sit back, look at the bigger picture and think about possibilities. Rather than layering expensive, iterative solutions on each other, the great companies rethink the approach and create solutions that are cost effective while meeting user requirements. Exceptional companies go beyond this and create solutions to user requirements that the user didn’t know he had. That, however, is a topic for another post.

Microsoft Surprises

Posted: June 2, 2011 in Apple, ARM, Convergence, Google, Intel, iPad, Microsoft, RIM, Smartpone, Tablet, Transparency, Trends
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I mentioned that Mango showed that Microsoft could come on strong once they recognized they were behind. I saw a few unexpected features in Mango and it gave me hope that Microsoft was still in the game if very far behind. However, with the release of more information about Windows 8, I am truly surprised. Microsoft really gets it. They see the need for a unified OS across platforms and for a transparent user experience. Furthermore, Microsoft is using its strength on the desktop to leverage itself into the tablet and phone space. This isn’t my pick for the easiest path in general but it is the easiest and best way for Microsoft. More than other releases, Windows 8 will be about an aggressive business strategy. I love it when business, the consumer, and engineering mesh at such an intimate level.

Windows 8 is important on several levels. First, let’s start with the fact that it will not only run on X86 CPU’s but on ARM. Wow! Let that sink in. This means Windows on a CPU that isn’t compatible with the Intel X86 architecture. There will be no emulation layer so current X86 apps won’t run on ARM based hardware. However, this is important in and of itself. Microsoft will be encouraging developers writing lighter apps to write in Java and HTML5 so the apps will be independent of the CPU used. Add this to Apple toying with the idea of an ARM based MacBook Air and you know why Intel is nervous.

The next surprise is the breadth of Windows 8. It is really a tablet  OS where the mouse and keyboard can substitute for touch. You read that correctly. The OS is, in many ways, a tablet OS first and a desktop OS second. This doesn’t mean a compromised desktop OS. What it does mean is an OS with touch infused throughout.  The same OS will run on tablets, laptops and desktops.

They say a picture is worth a thousand words and the next surprise is best illustrated with a couple of pictures. Here is one of Windows 8 on a PC:

Next I have a picture of the home screen from a phone running Windows Phone.

Do you see what I am excited about? Just like Apple, Microsoft is making the desktop OS look and feel like the phone OS. Do you believe me now when I talk about the push for transparency of the computing experience? Now go back to the comment above about Microsoft pushing for apps written in HTML5 and Java. Those will be easy to port to Windows Phone and vice versa. Microsoft may be late but they are coming on strong.

What does this mean on the business side? Obviously the push onto ARM is a threat to Intel and AMD. In terms of the other hardware and software players here is how I see it. RIM is in an increasingly bad position. They have zero desktop presence and Microsoft is stronger in the corporate world than RIM. Windows 8 might seem independent of RIM’s Blackberry world but, in actuality, it has the potential to do great damage. HP may take a hit too. They are betting a lot on WebOS. I don’t see what the value add is for WebOS. Call this one more wait and see but be skeptical. HP could quickly shift to being Windows 8 centric if need be. Heck, they are Windows centric today.  Apple probably fairs OK in the near term. Longer term they might lose some of their momentum. However, I see Apple as the best positioned against Windows 8 if they can continue to move towards merging iOS and OSX. I’m still very strong on Apple. Next up for Apple is iOS 5 and iCloud which will be announced next week. Windows 8 could be problematic for Google. I have trouble believing in Chrome as a desktop OS. Google will still be ahead in the TV space but compared to Microsoft and Apple they lack the desktop. Android is the largest selling smartphone OS and we are about to be inundated with Android tablets including some excellent ones such as the Samsung 10.1. I still see Microsoft being behind Google but it is a lot more interesting than it was a day ago. Apple just made iWork available on the iPhone in addition to the iPad and OSX devices. Microsoft will have Office running across all devices. Will people buy into Google’s idea that web based solutions are the best answer for their productivity apps? People may but only if Microsoft screws things up. Then again, Microsoft mucked things up in the past with poorly conceived products like Works.

The Real Importance of Google Wallet

Posted: May 28, 2011 in Convergence, Google, Intel, Microsoft, NFC, Transparency, Trends
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It may seem like I have been mostly regurgitating news. Look deeper. I am trying to point out the trends of convergence and transparency and how they are reaching everywhere. On the surface Google Wallet is a nice tweak to how you pay for what you buy. In terms of those affected it is easy to see the retailers, banks and credit card companies. If you look on the surface at semiconductor companies you might just think about those chips which enable NFC. This is part of something much bigger that affects many more companies. NFC services like Google Wallet will make transactions more transparent i.e. easier and more convenient. They also converge services into the phone and continue pushing the phone towards becoming your dominant computing platform. This is what I started this blog off with. It doesn’t matter if Google Wallet in it’s present form becomes big or not. It’s a symptom of a larger movement. No matter what business you are in you need to evaluate your strategy with convergence and transparency in mind. How will your business play out when the phone is the dominant computing platform? Intel and AMD are reacting to this today. For once the interests of AMD and Intel are aligned. They need to bring the X86 architecture to tablets and then mobile phones. Microsoft is also reacting as they worry about Windows being marginalized. Think how differently this would have been had the iPhone and iPad been based on the Atom processor. For the other chip companies there is the increasing importance of LTE and the cloud. Flash memory will continue to be pushed to grow in density and decrease in price. The world is moving towards one gigabyte of storage in the phone. Remember reading about how over built the global network is? Think again. OLED screens will finally become a mainstream technology driven by the phone. Eventually they will grow to be the dominant technology in both laptops and TV’s.  This shift affects media. The RIAA and  MPAA continue their vain attempts at protecting intellectual property rather than embracing the technology trends and profiting from them. That’s an entire blog (or two or three) in and of itself. Is your company preparing for the upcoming changes? More importantly, have you looked deep to see how convergence and transparency will change your business landscape?

Random Bits and Some Good Reading

Posted: May 18, 2011 in Apple, Convergence, Google, Intel, Microsoft, Transparency, Trends
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Did Intel read my blog? Interesting posts about Intel here and here and here.

Of the Android tablets, the Xoom was the first to look reasonable but the iPad 2 made it look dated. The first real iPad 2 challenger appears to be the Samsung Galaxy Tab 10.1. Don’t confuse this with the thicker 10.1v. Engadget has a good review here. They also have a review of the HTC Flyer posted here. While not as positive as the Galaxy Tab review, I think the integration of audio and notes on the Flyer has a lot of promise.

Does anyone else think Microsoft buying Nokia’s smartphone business is a bad idea? That would make Microsoft like Apple but still trying to be like Google. Pick an approach! If Microsoft tries to straddle the fence then they will fail. Why should HTC or anyone else make a Windows Mobile phone if their direct competition on the Windows Mobile space will be Microsoft. Microsoft could wind up being the sole manufacturer of Windows Mobile phones. At that point I give a big advantage to Apple.

I haven’t talked much about Chrome and the Chromebook. A good article on them is here.

If you are following what I am saying about transparency and convergence I suggest you read  Sarah Rotman Epps’ Blog.

A Very Big Prize

Posted: May 13, 2011 in Apple, credit card companies, Google, Transparency, Trends
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If you have been following along with my comments on transparency you might think the only big prize is owning the phone market or the tablet market or both. There’s another prize that’s very big. To understand it you need to take a look at PayPal. When I am online I like it when PayPal is a payment option. I don’t have to pull out my credit card. I just have to remember my PayPal login and I can complete my desired purchase. What if every transaction in the US went through two or three companies? This would be like a super PayPal. It wouldn’t just be online transactions but local purchases such as groceries, gas, clothes and dining.

It’s time for some simple math fun. April 2011 retail sales in the US were approximately $390B. One percent of that is $3.9B. If a company could get a third of this it would be $1.3B. That’s per month or $3.9B per quarter. This is only for the US. How do you get 1% of every transaction? You make them flow through your device. With NFC, the phone is the gateway to your credit card. When watching TV,  think GoogleTV or Apple TV. What if all you needed was one account with Google or Apple and you could cover all of your bills using your phone or your TV? This makes iTunes look puny. Don’t kid yourself, both Google and Apple are eyeing this. I suspect Microsoft is too but they are a bit late.

Amazon, a company I haven’t mentioned till now, sees this  too. Their solution has been to be the central online shopping site. However, remember how the Germans went around the Maginot Line? Remember how I said Apple and Google were doing a similar end around on the Wintel alliance? We could have another end around play here. Imagine your phone being your main device for purchases i.e. replacing your credit card. Apple and Google could move in on Visa and Mastercard. Now that they have you funneling your purchases through them it’s a small step to begin guiding those purchases. Think Apple App Store on a huge scale. Think of the Google Market Place but selling more than apps. Both of these companies are sitting on large amounts of cash and looking for ways to turn that into even larger revenue and profits. What can Amazon do? They can take a clue from their Kindle line. I don’t own a Kindle. However, there are Kindle apps on my laptop, my desktop, my phone and my tablet. When I buy ebooks my first choice is through Amazon. I don’t buy through iBooks because iBooks isn’t as broadly cross platform as Kindle. It’s that old transparency of data thing again. By buying through Kindle (Amazon) I can read the book on all of my devices. I read them where I want, when I want, and on the device I want to use.  Amazon needs to be the one company that will allow both your Apple device and your Android device to use the same account. At all cost they need to make sure the various platforms are open enough to allow them to be the central clearinghouse for your purchases. The same can be said for Mastercard and Visa. Those two companies dominate the landscape right now. However, fundamental changes are afoot and that always spells opportunity for others. For the first time Visa and Mastercard are vulnerable.

When will this take place? No time in the near future as far as the general public will see. However, the initial steps are being taken now. At first you will just place your credit card information in your phone and use it instead of the physical card. This is only slightly different from having Amazon store your credit card information with your account. From there it’s a small step to add extras to the Apple and Google app stores. Finally, Apple or Google issue you the credit line and push Visa and Mastercard out. They will be able to do this by offering incentives from the savings generated by not shipping Mastercard or Visa 2%.

Data Transparency

Posted: May 10, 2011 in Apple, Microsoft, Motorola, RIM, Transparency, Trends
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The old school model has been data everywhere and in its proper place. This directly relates to an old world paper model. Whether at home or at work each bit of data had a place. There was a file folder, nicely labeled, and placed in a drawer. That’s why, when you go to the doctor, you get to write the same information down several times on different sheets of paper. Each sheet has a purpose and a location it will get filed into.  As we have moved into the computer age we have carried this model with us. There was data on the desktop at work, data on the desktop at home, data on the file server and data on the laptop; oh, and data on the phone.

Lo and behold we found that, sometimes, data wasn’t where we wanted it. The first solution was manual transfer. I mean a really manual transfer. We would write data on a piece of paper and enter it back into another computer. Some people still do this when moving contacts from their desktop to their phone. This was replaced by sneaker-net where data was copied onto a storage medium and then read back in on another computer.  First there was the floppy disk and today there is the USB thumb drive. Next came the network. Finally data was easy to move. That is it was easy as long as you were on the net.

The problem was that home wasn’t connected to work nor was the hotel room connected to either one. This was attacked via remote logins and by sending email messages with files attached. However, attachment file size limits have made email problematic for the transfer of large files. FTP transfers had no such limitation but were cumbersome. Another attempt, still widely used today, is syncing. You sync your iPhone and iPad to your home computer so your songs and data travel with you. Less successful have been attempts to sync laptops to your desktop. The latest attempts at fixing this issue have been Dropbox, Yousendit, MobileMe, Windows Live Mesh and Live Sync. These help and are the first steps towards a cloud computing solution. Well, technically, Live Sync and Yousendit aren’t cloud based but I see them as very related. Live Sync can be viewed as a peer to peer extension of classic synchronization software but it feels closer to the cloud solutions when you use it. Actually, Dropbox, MobileMe, and Windows Live Mesh are really a merging of synchronization and cloud services. Synchronization has the advantage of maintaining a local copy so work can continue smoothly when the network is down or slow. The cloud aspect means that you can access your data even when you are away from a machine that is being synchronized. As an example, if a PICTURES folder is on the MobileMe iDisk, under the Dropbox folder, or is selected for Windows Live Mesh, the content in PICTURES can be accessed from a friend’s web browser with the proper login. Sharing content with others is also fairly straightforward. If you haven’t used these services be sure to try them. All but MobileMe are free at the basic level. MobileMe is about to get a major change so hold off on it till you see what the changes bring.

What we are seeing is the rising importance of transparency. In this case it is transparent data access. We want our pictures, music, movies and documents whenever we decide to view them, wherever we happen to be, and using whatever device is handy at the moment. The methods above aren’t totally transparent but they are a big improvement. When I got my iPhone, I left the Apple store with email, contacts and my calendar on my phone. Today, between my laptop, iPad and iPhone, a contact, calendar event or email added to one appears on all of the others.  If need be, I can access it all through a web browser on any machine with web access. Key files, including the document I am editing now, are synchronized across devices as well as being stored in the cloud. What we are seeing is the beginning of data transparency. There is a lot more to be done. In the end you won’t think about where your data is.

Recall what I said about major trends. Do the approaches above seem too similar? Is transparency just a minor trend that seems major? Was I wrong about trends and is this a case of one with a clear development path?  The answer is no to all of the above. There are other directions to data transparency.

Look at the RIM Playbook.Its Blackberry Bridge technology takes a different approach to transparency by tethering the Playbook to a Blackberry phone. One advantage of this is a single data connection, and hence a single expense, for both the phone and the tablet. By definition email is in sync since email is really through the phone at all times.  A big problem with this is that the tablet becomes tethered to the phone in such a strong way that it is no longer a separate device.

Need another direction? Look at the Motorola Atrix with its laptop dock. In this case the laptop is just an accessory screen and keyboard for the phone. Like the Playbook, the laptop is worthless without the phone. For some reason I don’t see that as a major problem. However, layz person that I am, I dislike the idea of having to plug and unplug the phone from the laptop accessory.

Yet another approach was outlined by HP CTO Phil McKinney here. He describes the Fossil Metal Watch which will allow you to carry your data with you.  All of your devices connect to the watch for data access. One problem, among several, is that a lot of people don’t wear a watch anymore. Furthermore, the watch screen is useless for data access. This means that you must, at the minimum, carry a phone in order to have access to a useful screen. Since you are carrying the phone anyway, why not just build the ability to be the data hub into the phone? In reality, that is what is going to happen.

So, what is the final answer? All of the above or at least parts of all of the above will survive the cut. The cloud will become very important and syncing will hang around. Rather than wearing a watch with our data stored on it, we will carry our phones. The phone will move from being an accessory to the laptop to being the main computing device with the laptop as an accessory. The current iPhone has 32GB of storage. It won’t be long until 1TB will be the standard. At that point there will be enough storage for the phone to be the primary data store. But, there will still be a need for offline storage. Also, there is the need to make sure critical data is backed up. That means syncing will stay around. This also means a cloud services component. Cloud services will allow access when the device isn’t with you and the sharing of files with friends. Mixing syncing with cloud services will mean gaining access to you apps and songs and OS updates without resorting to a PC. Expect to see iTunes move more completely to the cloud very soon i.e. in the next few months. What about the Atrix type device? My problem with the Atrix is that I am lazy and I think others are too. I don’t want to take out my phone and plug it in. Instead, I want it to link wirelessly to a keyboard-screen combination. Imagine going home and sitting at your computer. It lights up with what you were working on last. You get up and walk away. The screen goes blank. When you get to work and sit down the screen lights up again with what you were working on. A quick click of a mouse button switches the device to your work configuration and you are on your way. Your tablet will link to your phone to transparently gain access to your data. The same will be true for your TV. Imagine a video call on your phone. You sit down, tap an icon on your phone and the call is transferred to your TV so the entire family can see and talk to Grandma. Wherever we are, we will use the device that suits us at the moment. That device will have immediate access to all of our data. We will move from device to device easily even when we are in the middl of a task. The companies that best develop and integrate with this ecosystem win.

Cracks in the Wintel Armor

Posted: May 9, 2011 in Broadcom, Intel, Qualcomm, Trends
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During its peak no one ever thought Rome would fall. Similarly, in the world of technology, no one has thought the pairing of Windows and Intel could be challenged. For decades Microsoft has dominated the computer software space while Intel, with its X86 processor line, has dominated the chip side of high tech. This Wintel hegemony has been unassailable. It hasn’t been for lack of trying. IBM tried with OS2. Apple had some limited success once they brought out OSX. Motorola tried with the 6800 and 68000 chips. Sun tried with the SPARC processor and there was MIPS. These are just a few. HP, DEC and Fairchild had processors. IDT had the Winchip. Some survive today but only AMD, with its X86 clones, ever had much success as measured by volume shipped. Today things have changed. After WWI, the French built the Maginot Line. Everyone agreed it was unassailable. What France neglected was the rise of mobile warfare. Since the Germans couldn’t defeat the Maginot Line they went around it. The same is happening today in both the operating system area and in microprocessors. The attack on the Wintel hegemony is both real and potentially fatal. The outcome hasn’t been determined but the battle has started. Just like Germany flanked the Maginot Line, the Wintel alliance is being flanked. For Germany the enabler was mobile warfare and the development of the blitzkrieg strategy. Today the enabler is the smartphone together with iOS and Android.

In Q4 2010, according to IDC, there were more smartphones sold than PC’s. This is an important statistic. It means that the smartphone is set to become the dominant computing platform. Few smartphones run a Microsoft OS. Currently Microsoft’s share is at 7.5% which is down from 8.4% just a few months ago (see here). As far as the CPU, most smartphones use the ARM processor (see here). The tablet is more closely aligned to the smartphone than to the desktop. iOS and Android are the dominant operating systems. Microsoft won’t have a contender on the market till 2012. How about another shocker. Apple has surpassed Microsoft in both revenue and profit (Businessweek). No longer is Apple the little weakling hoping Microsoft won’t notice them. During the 90’s Microsoft was threatened by Netscape. Once Microsoft awoke to the threat it wasn’t a fair fight. The sheer size of Microsoft allowed them to give away Internet Explorer and destroy Netscape. Today the battle is different. Both Apple and Google have massive resources.

I’m a chip guy. I’ve been talking software. What about chips? Specifically, what about Intel? On the plus side Intel has vast wealth and controls the best semiconductor fabrication technology in the world. Intel continues to push R&D so, at least when it comes to semiconductor process technology, they can’t be accused of sitting still. They make the Atom processor line so they have an entrant in the low power, low cost processor market. Their problem is convergence at the chip level. Recall that I said convergence is much bigger than people think. Convergence is the dominant trend in the semiconductor business. More and more functionality is being integrated onto a single chip. Chip count is going down. Look inside a DVD player and you will see that there isn’t much there. Intel has made its money selling discrete microprocessors and selling them at high margins base on a near monopoly in the desktop CPU space. Back in 2009, Intel made the Atom core available through TSMC. However, the main core used today is ARM. The Apple A5 chip contains a dual-core ARM Cortex-A9 MPCore CPU and a dual-core PowerVR SGX543MP2 GPU. Samsung is the foundry for the chip although Apple may be moving to TSMC. LG is getting into the act and will be designing its own chip. The future is clear. Companies are buying IP and integrating it into one chip. This is a huge threat to Intel. With ARM becoming the dominant processor, Intel is losing its grip on the processor market. Even if Atom cores sell well the profits will be nothing like what Intel has seen in the past. None of this spells near term doom for Intel. They continue to mint money in the desktop and laptop space. Netbooks are dominated by Atom processors. Long term the outlook is different. Netbooks are being hurt by ARM based tablets. The smartphone is driving convergence. Soon it will be the smartphone, tablet and TV vs. the notebook and desktop. One rumor already has Apple moving from X86 to ARM for their laptops. This move seems premature to me but something that will eventually happen. In and of itself this wouldn’t threaten Intel. Apple isn’t their major client. However, imagine if the Android market were to progress in that fashion i.e. ARM based Android phones drive an ARM based Android tablet world which eventually drives a Chrome/Android notebook market. The force behind this? Convergence! Intel sees this and is pushing its own smartphone solution. For this reason the outcome isn’t certain. What is certain is that there will be a battle royal with Intel no longer having a monopoly.

If you are in the chip business there is something broader to be taken from this. Integration continues to increase. The system on a chip, SoC, is the dominant trend. That may seem obvious but I continue to see companies ignoring this trend. Analog companies fail to see that they will be integrated into an SoC. RF companies don’t see how they are being isolated as surrounding functionality gets integrated. Consider the GPS chip. The market for stand alone GPS chips continues to diminish as better and better solutions get integrated into chips like the Quallcomm MSM8660. Either you are a Quallcomm or Broadcom and doing the integration or you are being marginalized in the GPS marketplace. Expand this to the chip business in general. Sound chips (are you listening Wolfson), power sequencers, and others will be integrated. Consolidation is happening in semiconductors just like it happened to the automobile industry during the 1900’s.

Big! Very, Very BIG!

Posted: April 12, 2011 in Convergence, Transparency, Trends
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I have mentioned convergence and, to a smaller extent, transparency. Both of these are much bigger in scope than what is commonly written about in the media. The trends are broader, stronger and deeper than is generally discussed and will have far ranging impacts on both software and hardware. Our lives are in the process of being transformed.   Hardware devices will come and go.  Some of the near term trends are but intermediate steps destined to be footnotes with our children telling their children “I remember when…”   In Hitchhiker’s Guide to the Galaxy we are told “The universe is big. Very, very big.” I am telling you that convergence and transparency are big. They are very, very big. How big? Big enough to transform our lives rather than being just a small shift. Big enough to cause hardware and software to be created and then to fade away. Big enough to have major companies fight for supremacy or, in some cases, survival. There are companies today wasting precious engineering resources designing yesterday’s products because they are looking so near term that they miss where things are really headed.

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