Posts Tagged ‘trends’

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?

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I was reading about the Asus Padfone and it got me second guessing some of the things I have written. Am I wrong that the phone will be primary with a wireless link to other display devices? Or… perhaps I am correct and these are just steps along they way. That happens when a trend is major as I previously discussed. The problem with my solution is battery life. What the Padfone brings is the large battery in the tablet. Having a full time high bandwidth link will require major improvements in battery technology. That will come but it isn’t here right now. Perhaps each device should be able to stand on its own. If so then what happens to my dream of the phone as the central device? It stays alive in a modified form. Rather than transmitting the display perhaps the devices are sync’d so each has the same programs and all that needs to be transferred is current status and data. This will minimize data transfer and hence battery consumption. Switching from device to device won’t be quite as seamless but the basic idea will be there. As battery technology gets better we will eventually reach full integration but right now we’ll have to be satisfied with incremental steps. As I’ve said before, this is going to be interesting and a lot of fun to watch.

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%.

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.

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.

Assessing Trends

Posted: January 21, 2011 in Trends
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How should we assess trends? Which ones will be long lasting and which will be little more than passing fads? Which ones will be major and change how we live our lives and which ones will be little more than fashion trends that change the style but not the substance? How do we look beyond the herd mentality? Read on.

Are there indicators of short term vs. long term trends? Yes! When trends appear clear cut they are often either short term in nature or more minor than most believe. The truly life changing trends only appear clear and obvious in hindsight.  A good example is the internet. Do you think business on the internet was a slam dunk? You need to look at Business Week talking about the failure of retail on the internet. That was 1994. Right after that Buycomp.com came into being and internet  retail was off and running. Why did they get it so wrong? Their comments from 1992 through 1996 followed a familiar pattern. There is first optimistic speculation about how everything will be transformed. Then there are the early failures followed by disillusionment. Finally there is the seemingly immediate success. Kurzweil pointed this pattern out in his discussions on The Law of Accelerating Returns.

When the path looks clear the trend is often minor. Why? We can’t see the future clearly and everyone has a different view. When we all agree it rarely means it is a clear major trend. Rather, it means it is a near term trend of lesser importance. Major trends are marked by a lack of clarity. This manifests itself through the myriad number of approaches taken. Many variations of a fuzzy vision compete for dominance.

Another characteristic of major trends is a jagged road to dominance. The path is not straight.  Here is a property that is of critical importance from a business standpoint. Your idea might be right in the end but it is of little consolation if your business first goes bankrupt.  Consider the Apple Newton. The idea of a tablet was correct but too early. What was needed was a first step to the PDA, i.e. Palm Pilot, then the only moderately successful smart phone, then the iPhone and finally the iPad. It is great to see the future but basing a business on a long range vision can lead to expensive failures if you don’t step back and ask how the masses will be lead in the near term.