Tag Archives: apple computer

Samsung ready to be crowned King of the Elephants

The “four elephants” of the mobile electronics industry – if not the entire tech world – are Apple, Google, Microsoft and Samsung, as Tae Hea Nahm, founding general partner of Storm Ventures put it at a recent Wireless Communications Alliance event. They’re prepared to do “whatever it takes to win.”

Samsung is positioned to take honors as lead bull at CES next week, if only by default. Apple and Microsoft won’t be there. Google is relying on partners like LG and, maybe, Intel to build buzz. But even if they were there, Samsung would still be the odds on favorite. CES is home turf.

So, which one of the remaining three is the likeliest candidate for the elephant’s graveyard?

It won’t be Apple. Their product sales and zeitgeist share are as strong as ever, recent share price turmoil not withstanding. Google has the mass market side of the mobile operating system business firmly under control and occupies commanding positions in other tech sectors. No signs of weakness.

Come the end of the year, it’s Microsoft that won’t be mentioned in the same breath as the rest. Speculation about its collapse is years premature, but it no longer controls its own future. Mobile carriers and manufacturers, computer makers and IT professionals will make the decisions and launch the innovations that will determine how small Microsoft’s eventual slice of the pie will be.

The more interesting question is who will take its place. LG isn’t giving an inch to Samsung. Amazon is a champion in both consumer technology distribution and core Internet services. They’ve scored one hit with the Kindle and might be ready to expand further into mobile devices. Or maybe it’s finally time for a Chinese player like Huawei to step up.

Watch for signs of someone making a move on the front of the herd next week.

Mobile phone disruption coming soon to a TV near you

“If you like developing for a 3-inch screen, I have a 55-inch screen for you,” challenged Tim Baxter, president of Samsung Electronics America, as he invited mobile application developers into the world of television. Speaking at the Consumer Electronics Show, he introduced Samsung Apps, a consolidated app store for televisions, mobile phones and Blu-ray players.

Samsung opens app store for TVs
 You’re welcome
Samsung is a major mobile phone and television manufacturer, with a mobile phone app store already serving subscribers in Europe and Korea. It connected the dots simply and elegantly. If you can run your calendar and tweet from your mobile phone, why not do it on your TV? If you’re watching a movie on your TV, why not walk away and keep watching it on your mobile phone?

The answer to both might be “because nobody wants to”. That’s fine, those are obvious applications that Samsung already has on the table. By creating app stores, with all credit to Apple for walking point, mobile phone companies created and proved out a business model that disrupted their own industry and will do the same to the television business.

Details are still thin, but Baxter said Samsung Apps, and the devices it supports, will be an open platform and that they will be releasing a software developer kit. They’ll start with free apps in the spring and add premium apps later this summer.

The next TV superstar will be the software developer who figures out what to do with a CPU-enabled television besides watch linear content. It doesn’t have to be a major Hollywood blockbuster. It almost certainly will be a high concept, low complexity application created by one or two independent devs that does something no one ever thought to do on a TV before.

Carriers can’t rock and roll

by Steve Blum • , , , ,

AT&T’s Rob Hyatt and Verizon’s Ed Ruth spoke today about the music business at the Mobile Entertainment conference at the CTIA show in San Diego. Neither were upbeat about their success to date, and both seemed to be waiting for something to happen. They seemed to define that something as “innovation” in the market place, but what they really seemed to want are innovations that allow them to keep music downloads and streaming within their walled gardens.

Hyatt said that AT&T’s executives don’t find the business case for music to be compelling. While Ruth paid lip service to openness, or rather Verizon’s version of openness, he made it clear that Verizon intends to own the app and download stores on its network, and keep content revenue moving through their existing customer billing relationships.

More than anything, they seemed puzzled by the way the music industry itself works and the relationship that consumers have with it. A telling moment was when Ruth talked about their devices and download stores being on a par with Apple’s products and iTunes store. The point that he seemed to be trying to make was that it’s just a matter of time before they start eating into the iTunes market share.

Others attribute Apple’s dominance to its understanding of the app store ecosystem. It’s the combination of a developer community, the blessing and support of a major mobile carrier, compelling content and a pleasant, easily grasped user experience.

Apple is the application and content provider that has gone the furthest in busting out of the mobile carriers’ preferred business model. Money is more evenly divided amongst the players — developers, content owners, retail and carrier. More generous cash flow is an incentive for developers to put the iPhone at the top of the priority list, which means more applications are released for it, and more quickly. In turn, more apps lead to greater consumer interest, which translates into more sales. More sales means more money, and the cycle reinforces itself.

Meanwhile, the carriers wait for (there’s that word again) innovation. The content owners have to be innovative enough to accept the mobile carrier’s business model, and consumers have to be innovative enough to just do what they’re told. Success is just a matter of time. Could be a very long time.

Live from CES Unveiled, pre-press day, Tuesday 6 January 2009

Last to first, real time tweets from Las Vegas…

  • Tethering is deciding battle between mobile carriers & CE industry. CE guys don’t get it, think it’s a tech problem. It’s the money!
  • Novatel Wireless hasn’t signed any carriers yet. Expects to Real Soon Now. If they do, it’s a significant market signal re tethering.
  • Novatel Wireless also into tethering. Selling gizmo combining mobile data card, embedded Linux, WiFi tethering. Serves 5 users at once.
  • Blaupunkt has Internet car radio. Needs tethering-capable mobile phone. Don’t count on mobile carriers cooperating with the biz model.
  • Buzzword Alert! iGo makes travel adaptors. Nice, same sh** different year. But now – pause for effect & wink knowingly – “we’re green”.
  • Boxee talking to Sigma & Intel. Broadcom reportedly doesn’t care yet: he who is last is lunch.
  • Boxee vs AppleTV. Good interfaces. AppleTV tied to iTunes. But Boxee runs on an AppleTV & pisses off Steve Jobs. Great business model!
  • Boxee runs on 1 GHz processor or better now, working towards reducing code to run as embedded app with less horsepower.
  • Boxee managed $4 mil in VC financing last month. In this market that’s like winning the Nobel prize. Nobody gets funded these days.
  • Boxee runs on Mac, Windoze, Linux. Takes content from all sources, including your computer. Puts it on TV. TV, photos, music, whatever.
  • Boxee only potential disruptor at this press event. Open source media center software. Takes content from everywhere, puts it anywhere.
  • HD Radio has neat idea. Listen to song on radio, push button, tag song, sync with iPod, buy song from iTunes. GPS integration too.
  • Lenovo on same track as MSI, good not revolutionary. When you have a hot category, take market share, not press clips I guess.
  • MSI Wind product looks good, not game-changing. WiFi, but no WiMAX. When I asked, PR person thought WiMAX was a kind of hard drive.
  • ASUS has best new stuff. Love the netbook with the swivel screen. Turns into a tablet PC or e-reader. Under 1kg. WiMAX on roadmap.
  • Three netbook makers pushing hard at CES: MSI, ASUS, Lenovo.
  • CES Unveiled, big turnout nice buffet. Open bar, but Powermat display has bigger line. This crowd is fueled by electrons, not booze.
  • Make that ASUS chairman Jonney Shih
  • Microsoft guy unveils a rad new concept: voip. Next hot idea from Redmond: padded laptop cases!
  • ASUS hot on WiMAX, introing a 512GB solid state drive
  • ASUS press conf packed, already learned something: it’s pronounced “ah-zeus”
  • In car TV top product pick for young parents, other mobile TV products getting lots of attention. More dough for services and content for sure.
  • Early leader for WTF award: HD diving mask.
  • Services seen as integral part of media product sales, “wouldn’t make sense without”
  • Mobile, cloud computing, green tech all getting serious attention. Squares with VC predictions for 2009.
  • E-readers a top growth product in 2008, albeit from a small base
  • Green products, mobile stuff, embedded Internet, input & display tech tagged as top trends for 2009
  • Early leader for Alice in Wonderland award: “CE is a necessity not a luxury”. So are cars, and auto sales are zip.
  • Early leader for understatement of the show: “consumer spending is in transition”
  • CES state of the industry press conf: DTV, mobile phones, video games & PCs account for 70% of CE sales in 2008.
  • @jodrell Truphone Anywhere uses GSM to make a plain old mobile voice call to a voip portal. Nice but not mobile voip.

Recession Can’t Hurt Consumer Electronics Retailers. They’re Already Dead.

21st Century retailing will be governed by a new Iron Triangle:

  • Consumer information.
  • Volume selling.
  • Physical presence.

Online retailers have inexhaustible information and limitless volume. Consumers save time and money.

Big box retailers have as much volume, and a physical presence that allows consumers to touch and feel products however they choose, and have the instant gratification of an on-the-spot purchase. Customers stay in control.

Manufacturers can sit back and enjoy the ride, or they can build the value of their brands by combining their ultimate control of information with a physical and/or virtual presence that promotes a direct personal relationship with consumers.

CES and MacWorld have sprung leaks, with attendance expected to be down. MacWorld’s survival is in doubt. CES will ride out the storm, but even old salts are looking green around the gills.

The two shows suffer from exactly opposite problems. MacWorld is the victim of Apple’s retail success, while CES is being battered by the failures of consumer electronics retailers. Circuit City’s financial meltdown and Best Buy’s preemptive self-cauterization are just the beginning of what will be, for many, a wrenching disruption of the consumer electronics retailing model.

The major CE chains are headed for extinction, killed by the same trends that created them. In the 1980’s, televisions, VCRs, and audio gear became more reliable, easier to use and increasingly compliant with nascent industry standards. The need for hands-on sales, support and service expertise fell. At the same time, logistics and inventory management were transformed from back office, seat-of-the-pants jobs into scientific disciplines with seats on the board.

The less expertise required of sales and other customer-contact personnel, the less the salaries. A small team of number crunchers, transportation specialists and information technologists could run national chains of CE superstores. It didn’t matter how much money they made. In fact, the more they were paid, the farther superstore chains pulled ahead.

With size came the ability to take advantage of ever growing brand building tools. Customers might not have known exactly what they wanted, but they knew where to find it.

The superstores, however, carried the seeds of their own destruction. In a shipping container and a computer, an SKU is just an SKU. From the forklift operator on the loading dock to the clerk at the checkout register, boxes flowed through CE stores in an ever growing torrent.

The problem, for superstores, was that once the expertise required of the customer contact personnel dropped below a second threshold, it didn’t matter what was in the boxes. It could be a television or a washing machine. Or disposable diapers, or children’s clothes, or potato chips. At the same time, there was explosion upon explosion in the information available to consumers. Increasingly, consumers knew what they wanted before they ever set foot in a store.

Now, the not-so-super CE stores look like 98-pound weaklings next to the real big box retailers. The big box guys took even better advantage of the same trends and technologies that fueled the growth of CE superstores.

But they aren’t the only ones who successfully rode these giant waves. Manufacturers did too, taking ruthless advantage of new communications technology and advertising media to leap over distributors and retailers, and establish direct relationships with their millions – billions – of customers. The more that manufacturers spoke directly with consumers, the less they needed retailers. Except to drive forklifts and ring up sales.

For that, you don’t even need a bricks and mortar retailer. The Internet changed the game. If you’re Consumer X, and you have a personal relationship with Manufacturer A(pple), it’s a lot easier to go online, google “iStuff” and click on the lowest price.

If you don’t know what you want yet, you go to the A(pple) store if one is nearby, and look at the iStuff and talk to sales people in black shirts who have actually had a day and a half of training. If that’s not enough, you can have an audience at the geek altar, I mean, a conversation at the G(enius) B(ar).

CE superstores tried to optimize volume, information and physical presence, and did so successfully for a while. But only a while. Bigger players who are maximizing their advantages in just two ruling factors are circled around those erstwhile optimizers, and are rapidly crushing them. There’s no telling how long this new Iron Triangle will rule consumer electronics retailing – the world is not done changing – but it’s clearly in command now.