Saturday, June 30, 2007

iPhone tire kicking

So today I played with a real live iPhone, after visiting my 4th San José Cingular (AT&T) store in two days. I think the reviewers were pretty prescient but then I guess that’s their job.

Friday, people were walking out of the AT&T store with iPhones, but not today. Yes, one reason is that the store had sold out. But another reason is that the people who must have an iPhone — sleeping outside the door and all — went Friday and today it was idle tire-kickers like me. So if speculation is that they sold 250,000 phones yesterday, it’s less than 10% of that today.

[kiosk]My local store had an iPhone-specific kiosk with a couple of college students who seemed (by cell phone store norms) pretty knowledgeable about the new toy. One guy did most of the demo had been trained for two weeks, but got his first real phone on Thursday.

The biggest surprise was CoverFlow, the software by Jonathan del Strother that was bought by Apple last September for iTunes. With a touch screen, it’s really easy to flip through all the albums on your hard disk — like the old K-Tel style LP racks (except those were front to back and this is left to right). I couldn’t imagine a more natural way to browse through music, although it doesn’t seem like it would scale beyond 50 or 100 albums (i.e., I’d like to browse within a genre rather than the whole set).

The GUI for zooming/scrolling — with fingertip controls — was very natural. The virtual keyboard was not — supposedly it gets better with practice, but I certainly couldn’t get it to work in the 5 minutes I had to play with it; my experience is more like Steve Levy than Walt Mossberg. The portrait/landscape rotation was cool, but it seemed braindead (and un-Apple like) that it only works in some applications.

Overall, the phone seemed pretty much like Mike & I were predicting: it’s a web browser with an iPod in it (that can be used to make phone calls). In fact, if you clue off of the main menu, Apple believes that the iPhone is a phone, e-mail device, web browser and iPod. (I’d need a better keyboard for an e-mail device).

However, the visit seemed to support one of the worst criticisms: slow data speed. The demo was done on the store’s Wi-Fi rather than AT&T’s EDGE network. People have been complaining about using the iPhone on EDGE since the day it was announced. There was a rumor that this month AT&T even accelerated its network with the “Fine Edge” program in anticipation of iPhone Day.

So the data service is slow, but they require everyone to sign up for data plans for $60-120/month? No matter how much spin you put on it, if a cell phone company doesn’t want to demo their cell phone network, that seems like a negative sign. It seems to support the criticisms of both neutral analysts and CDMA partisans that Apple chose the wrong network for the wrong reasons.

Clearly, the iPhone will raise the data ARPU for (what today is) one of the slowest data networks in the country. But how many net new additions will the iPhone bring: how many people will say (as I do) I’m only interested in the iPhone if I’m already a Cingular customer? Apparently I’m not the only one down on Cingular; as Bloomberg reported yesterday:

Cingular, which merged into San Antonio-based AT&T last year when AT&T bought BellSouth, rated below average in New York in a 2006 Consumer Reports survey of online subscribers' experiences with service gaps, busy circuits and static. It was last or next to last in overall customer satisfaction in 18 major cities; it tied for second out of four carriers in New York. …

AT&T is “kind of average,” says Richard Ellrodt, senior director for telecommunications and technology research at J.D. Power, a unit of New York-based McGraw-Hill Cos. “It doesn't have the worst score, but it doesn't have the best score.”

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Friday, June 29, 2007

iPhone mania

Crowd #1Today was iPhone day, and the witching hour was at 6pm local time (PDT here). I could have stayed at home and learned all about it, as my family did. Thanks to my VCR, I saw that our NBC affiliate covered the iPhone as the 2nd story of the 5pm news, a minute halfway through the 5:30 pm national news, and as the lead story — with live remotes from Apple stores in San Francisco, Palo Alto and Santa Clara — for the first five minutes of the 6pm news.

Instead of staying home, as a business historian, for my blog readers overseas and (to be frank) mainly out of curiosity, I went out to observe iPhone mania first hand. I visited 0.62% of the Apple stores and 0.17% of the Cingular AT&T stores in the U.S. — that is to say, all (1) of the Apple stores in Santa Clara and half (3) of the AT&T stores in San José.

Crowd #2When the doors opened, I was at the Apple Valley Fair store in Santa Clara (in a mall mainly in San José) had about 60 people who got nametags for waiting before the mall opened at 7:00 am and perhaps 150 people total — plus that many more just there (like me) to witness the spectacle. As I remarked to Doug Klein, no one got a picture of the assassination of Archduke Ferdinand (shot 93 years and one day ago) but there were 100s of photos of lines and the opening at just this one Apple store alone. The scene was repeated at Apple stores around the country. (There’s even a dedicated domain, iPhoneLaunch.tv, for video of the Soho rollout).

The NBC Nightly News showed the line snaking into the Apple flagship store in NYC. With all the bloggers, Palo Alto probably had the longest lines (and most bloggers) in the Bay Area and even had a live video feed. As the store closest to Steve Jobs’ Woodside home, the Palo Alto store also won a incognito visit by the Apple CEO.

WozStill, at Valley Fair we had the other Apple founder, Steve Wozniak, waiting in line for more than 13 hours. This was happening only 8 miles from Homestead High School, where Woz met Steve Jobs more than 30 years ago. And clearly the historic location caused him to wax nostalgic:

“This has been the main mall my whole life,” Wozniak said, explaining his choice of venue. “This is where I and Steve Jobs came when we were kids.”
In a TV interview and other interviews, he likened it to waiting overnight to buy Rolling Stones tickets in 1972.

TshirtAs befitting any Apple media event, there was a special t-shirt: three, actually. The Apple employees had a special minmalist black t-shirt, Woz (and a few others) had a t-shirt saying “the line starts here,” and add-on company FastMac was handing out its own t-shirt.

Wanting to have dinner at home, I decided not to become #151 in line at Valley Fair. I also drove by the three of the AT&T stores in San José between 6:30 and 7:00 pm, and I estimate that each had about 50 people in line. Even though the Bay Area is atypical, it’s realistic to extrapolate that there were at least 10,000 people waiting outside the 162 Apple stores and 30,000 waiting outside 1,800 AT&T stores. So they could have had as many as 50,000 people waiting in line Friday rather than ordering online or (as I’m going to do) stopping by on Saturday.Cingular linePhotos by Joel West: Valley Fair (#1-3), AT&T Stevens Creek Blvd. (#4)

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Getting an iPhone without waiting

While people camped out overnight this week in anticipation of today’s iPhone day, there are reports that Apple employees have been showing off their iPhones in public. Meanwhile, the Wall Street Journal reported (subscription likely required) that four (and only four) journalists got an iPhone two weeks ago, and published their reviews this week

  • Walt Mossberg (writing on Wed.) of the Wall Street Journal really liked the web browser: “The iPhone is the first smart phone we’ve tested with a real, computer-grade Web browser” but gave mixed reviews on other elements
  • Edward Baig (also Wed.) of USA Today agreed with Steve Jobs that this was the best iPod ever, but was puzzled by the limited selection of ringtones (or the inability to use your own MP3 files). The iPhone worked with his Bose SoundDock but the proprietary headphone jack sounds like it will be a problem (particularly for people like me who hate earbuds).
  • Like the others, Steven Levy (Wed.) of Newsweek thought that the iPhone worked well without the manual but the keyboard took some getting used to. He found it just the ticket for whiling away a boring road trip.
  • David Pogue (Thu.) of the NY Times really liked the browser, email and voicemail, but not the lack of a video camera or memory card slot. He got 5 hours of video playback time out of the battery, but (like Baig) hated the AT&T network.
Overall, Pogue was enthusiastic:
In other words, maybe all the iPhone hype isn’t hype at all. As the ball player Dizzy Dean once said, “It ain’t bragging if you done it.”
Mossberg (writing with his assistant Katherine Boehret) was more realistic:
Expectations for the iPhone have been so high that it can’t possibly meet them all. It isn’t for the average person who just wants a cheap, small phone for calling and texting. But, despite its network limitations, the iPhone is a whole new experience and a pleasure to use.
These bigshot columnist reports validated stuff Mike Mace and I have been saying for months. Without realizing it, Mossberg echoed the observation five months ago by Mike Mace:
  • Michael Mace (blog posting, January 15): “I think it’s not a phone. It’s an entertainment-focused mobile computer.”
  • Walt Mossberg (title of WSJ article): “The iPhone Is a Breakthrough Handheld Computer”
Meanwhile, repeating the main point of the paper that Mike & I wrote four months ago (which we presented on June 2), Levy wrote
In a sense, the iPhone has already made its mark. Even those who never buy one will benefit from its advances, as competitors have already taken Apple’s achievements as a wake-up call to improve their own products.

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Thursday, June 28, 2007

40 years is a long time

Ken KraemerTuesday night I detoured back to Irvine for a retirement party honoring one of my former faculty, Kenneth L. Kraemer, Taco Bell Professor of Information Technology for Management at UCI.

In 1967, with his USC PhD fresh in hand, Ken arrived at the Graduate School of Administration at UCI, two years after the university was launched. The school has gone through two name changes since then: the Graduate School of Management (1980) and the Merage School of Business (2005). Lyman Porter — who also arrived that year — recalled that in the fall 1967 the school grew to 8 faculty and 13 students; one of those first students was John Van Maanen, well known sociologists and qualitative researcher. Today the Merage School has 51 faculty and 850 students.

For almost the entire 40 years, Kraemer headed UCI’s two major IT research organizations: PPRO (Public Policy Research Organization) which later morphed into CRITO (Center for Research on Information Technology and Organizations). CRITO funded my 1994-1996 research on the Japanese computer industry, which lead to one major paper and provided key inputs for Chapter 3 of the 1998 book by Jason Dedrick & Kraemer book. Two years later, Kraemer’s student John L. King was my dissertation co-chair.

Overall, Kraemer has authored or edited 22 books and co-authored more than 150 scholarly papers, as well as many NSF and industry-sponsored research projects. The books (and his major impacts) have including government computing, the Asian computer industry, and global e-commerce. Kraemer (along with the late Rob Kling) is largely considered the founder of the “Irvine school” focusing on the social impacts of computing. As John King (former dean of the Michigan School of Information) noted, this Irvine school has been a major thread in forming some 50 information schools in the U.S.

The most common comment about Ken was “I never thought I’d see him retire.” Speaker after speaker talked about how Ken’s retirement was always 3 years in the future (a constant 3 years, ala the “mañana constant”). Of course, as Ken told me during the reception, he’s not actually retiring. He’s just giving up (most of) his UCI duties to work on his own research, including co-charing the Sloan Foundation-sponsored Personal Computing Industry Center.

Ken honored by many loyal former Ph.D. students. Although my flight home Tuesday night was only to San José, others came from Boston, Ann Arbor, Waco and Denver, as well as two from Canada. We got the students assembled with Ken for a last group shot.
Former studentsForty years in academia is a long time, even more so holding essentially one job at one university. Ken has the output and impact reflecting both his long record, but also an intensity that left his younger colleagues in the dust. (John and Jason both agreed: “never try to keep up with Ken.”)

I’d never make it 40 years at anything, except (health permitting) a wedding anniversary. I’ve been working at SJSU for five years, which at least beats my dad (God bless his soul) whose record was four years of active duty in the US Army Reserves (1942-1945). But not my mom, who spent more than 20 years with San Diego City Schools.

Picture: Courtesy of Dr. Paul Tallon.

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Wednesday, June 27, 2007

Bill Gates, man of the decade

[1939 Man of the Yar]Once upon a time, being named Time’s “Man of the Year” was a big deal in the U.S. (In some cases, the winner was “Woman of the Year” — as in 1936, 1975 and 1986 — but in a nod to political correctness, each man and woman got relabelled “person of the year” in 1999).

One of the ongoing controversies is that — since it began 1927 — the man/woman of the year was chosen as the one who “had the greatest impact on the news.” It’s hard to argue that names like Adolf Hitler (1938), Joseph Stalin (1939, 1942), and Ayatullah Khomeini (1979) didn’t have an impact on the news. There were also cover subjects who had both supporters and enemies, including every president from Roosevelt to the present.

[InfoWeek cover]I immediately thought of this duality — newsworthy whether good or bad — when, dashing through the library this afternoon, I saw the cover of the June 25 issue of Information Week. The cover illustration by Dale Stephanos deliberately evoked the package of stories about (as one headline put it) “Bill Gates’ Legacy: Tech Titan Or Tyrant?”

The good Gates story by John Foley began:

George Washington. Babe Ruth. Gandhi. Bill Gates? Say what you will about that bloated operating system Gates has been hawking for the past 25 years, history will show that Microsoft’s cofounder and chairman belongs among the world’s great champions and leaders. As he moves beyond Microsoft to throw his energies into philanthropy, Gates will be remembered as an inspiring technologist and brilliant businessman who jump-started the commercial software market and populated the world with nearly a half-billion PCs, unleashing a wave of personal creativity and productivity on a scale never before seen.

Gates’ postretirement biography will have its share of ugliness, too — a decade-long spat with the open source community, monopolistic business practices that culminated in a U.S. government-led antitrust trial, buggy software that was easily exploited — but those will be footnotes when all is said and done.
Meanwhile, colleague John Sloat emphasizes the flip side:
Certainly, Gates’ greatest legacy won’t be in terms of technological innovation. He didn’t invent the operating system, didn’t invent the word processor, didn’t invent the graphical user interface, and didn’t invent the Web browser. And neither did anyone else at Microsoft.

“Its genius has been in business and predation, not innovation,” wrote Supreme Court nominee Robert Bork and Kenneth Starr, the Whitewater prosecutor, in a Wall Street Journal editorial in July 2001. They were talking about Microsoft, but they might as well have been talking about Gates.
In addition to being brilliant, ruthless and filthy rich, Gates is a difficult person to briefly characterize. He created the idea of a mass market software industry. He crushed rivals through legal and other means. He will probably give more money to charity than anyone in world history.

I was appalled earlier this month when I read that some dim-bulb starlet put Gates on her “superhero team” (not that her other choices were much better). Gates is a tremendous success and an example of what a rich kid from Seattle can accomplish being in the right place at the right time, but I wouldn’t want him held up as a “hero” for young people.

But at the same time, any fair analysis of Gates would also have to consider the alternative. Would the world have been better off if IBM controlled PCs and delayed their adoption as substitutes for mainframes? Or if (as seems inevitable) there was an operating system monopoly — but instead of Gates, Gary Kildall or Ken Bowles had been the winner — would they have necessarily been any more benevolent despots?

The story of Bill Gates is a complex one. Among the most amusing aspects has been his ongoing rivalry with Steve Jobs, as captured in the made-for-TV movie Pirates of Silicon Valley. By the way, Gates has been on the cover of Time eight times from 1984 to 2005, including five times from 1995-1999. Jobs has only been featured five times — but he got there first, with his debut in February 1982.

If Gates sticks to his announced June 2008 retirement, Jobs may outlast him too. Whether or not the iPhone proves to be a success, I feel safe in predicting that a year from now the iPod will still be outselling the Zune.

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Openness in First Monday

This afternoon’s e-mail brought notice from Brian Kahin of publication of his special issue of the online academic journal First Monday. The special issue captures the papers presented during the DCCI conference at the National Academies in January. Included in the issue is my own paper, “Seeking Open Infrastructure: Contrasting Open Standards, Open Source and Open Innovation,” which elaborates on my own earlier talk.

Why should anyone care? Imagine if in 1992 a bunch of smart academics had talked about what they thought the Internet would look like. Many of them would have been wrong, but some would have spotted key trends 3, 5 or 10 years in advance. If Kahin’s vision is correct, this issue describes how the next-generation digital infrastructure will evolve over the coming decade.

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Tuesday, June 26, 2007

England’s would-be Sony

When I started doing academic research into the IT industry in 1994, I focused my attention on Japan. The Japanese (with Fujitsu) had caught up technologically to IBM in mainframes, made many of the key PC components, and seemed like they would control the US laptop market any day now. A look at my CV will show that almost anything I published from 1995-2000 had something to do with the Japanese IT industry. But there really wasn’t much IT industry to study in Europe: ICL and CIE Machines Bull were long since failures, and nobody outside Europe bought European PCs. (OK, overstated, but only slightly).

In 1996, my advisor (John Leslie King) and a professor in Finland (Kalle Lyytinen) attempted to interest me in GSM mobile phones. We got some good data visiting companies like Nokia and Ericsson, and I started gathering data in the US and Japan. Although the Finns turned out several PhD and masters’ theses, us Americans at UCI never had enough money or warm bodies to uphold our end of the bargain. (Still, I have published byproducts of that work and other pieces will end up in my next book). Of course, since that time, I’ve followed the rise of Nokia, collapse of Motorola and Ericsson, the entry of the Koreans, and the various joint ventures and other exit strategies used by firms to escape brutal competition in a maturing industry.

In the past year or so, however, my attention has turned to Britain (or, more precisely, England). It’s hard to study mobile phone platforms without noticing the dominance of Advanced RISC Machines Limited, the 1990 joint venture of Apple, Acorn and VLSI Technology. More specifically, what’s unavoidable is that 80+% of mobile phones are using microprocessors built around a license to the ARM instruction set and CPU architecture.

The other example is Symbian, which is a company that I’ve been tracking since 2002, but for the past six months have worked directly with to help them refine their innovation strategies. In addition to learning about Symbian OS, related technologies like S60 and UIQ, and their uniquely complex ecosystem, this effort has also broadened my perspective beyond California and East Asia.

Take one example. In my first visit to Symbian last December, I stood up and said something like “Apple invented the PDA” and almost got wrestled to the ground by an angry Symbian (former Psion) engineer. I still think my original statement was correct, in that Apple invented the term and it referred to pen-based devices of which the Newton and Palm OS are exemplars. There’s no denying, however, that Psion’s keyboard-based organizer and the Sharp Zaurus served much the same role in Europe and Japan, respectively.

History has not been kind to John Sculley’s “vision.” The Netwon is dead, while the Palm lives on as a Treo with a BlackBerry keyboard and a stylus nobody uses. The pen-based version of Symbian OS (UIQ) is far less popular than the cursor key variant (S60). Microsoft keeps making attempts to slap a pen on its Windows OS — with Pen Windows (“Windows for Pen Computing”), Windows CE (aka PocketPC aka Windows Mobile) and Windows XP Tablet PC Edition, but the hordes are still using the regular desktop OS. Overall, it’s not as though pen computing has changed the world the way we might have thought 15 or even 10 years ago.

Meanwhile, the Psion legacy lives on. On Tuesday morning, Andrew Orlowski of The Register posted a really long (40 printed pages) retrospective on the anniversary of the company’s last major product:

The Series 5 pocket computer from Psion was launched 10 years ago this week. It was a remarkable achievement: entirely new silicon, a new operating system, middleware stack and applications were developed from scratch in just over two years.

This was the last time anyone undertook such a daunting task: it may be the last time anyone ever tries, either. Companies or projects that are formed to achieve simply one of these four goals typically end in failure: to achieve all four successfully, and put them in a product that was successful, too, was a triumph of creativity and management.
...
As we discovered, however, this story is about much more than the life of a product. It's about the fate of a once-inventive and fearless computer company. Twice, Psion launched products into the teeth of a recession, products that defied accepted technical limitations and market wisdom to become success stories.

But just as it had with PDAs, the Psion Group also made plans to develop GPS navigation systems, hard-disk based music players, digital radios, and even set-top boxes - long before these markets existed.

So Psion had the chance to become something few imagine was ever possible: a home-grown consumer electronics giant with a global brand: a British Sony, or a British General Electrics.
What happened? As Orikowski recounts:
  • After Psion and the three largest mobile phone companies founded Symbian as a 1998 joint venture, Symbian eventually sucked up the majority of Psion’s software staff.
  • What was left of Psion merged with Teklogix in 2000 and now selling industrial instruments and similar products.
  • Mark Gretton jumped from Psion to become CTO of TomTom in 2003. Leveraging a core of Psion alumni, TomTom now sells $2 billion a year in satellite navigation products.
  • David Tupman is now Director of iPod hardware engineering at Apple.
  • Psion founder David Potter is now a CBE, and lamenting the conflict between high-tech R&D and British government and capital market policies.
The article is long, and has vaguely implausible elements of British nationalism (we invented everything but dropped the ball). Still, Orlowski makes a convincing case that Psion is undeservedly obscure, particularly in North America.

Overall, the article is 17,000 words — 9,000 of that edited Q&A with five of the principals. I can’t do the article justice in a 1,000 word blog entry, so (if time permits) I’ll come back to a few points later.

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Monday, June 25, 2007

iPhone — best thing since sliced bread

Friday is the iPhone rollout. My friend Doug Klein and I are going to hang out near the Apple store in San Jose (or is it Santa Clara?) to witness the lines.

Meanwhile, today’s breathless AP dispatch reports

Even if the product flops for some reason or stays limited to the high-end corner of the smart phone market, the iPhone has already jolted the industry, showing that it is not just the body and outward beauty of the handset that counts, but what's inside.

“This is the most anticipated phone since Alexander Graham Bell did his,” said Michael Gartenberg, an industry analyst at JupiterResearch. “Part of it is the fascination with Apple’s products and how well they design them, but it's also about how poor the design in software is in cell phones now, and how much time Apple has spent working on this.”
DynaTAC 8000I think the Bell comparison is over the top — the original Motorola DynaTAC was that revolutionary, but the iPhone is merely a next generation mobile phone. But the rest of the analysis is what Mike Mace and I said four months ago.

And actually, this post is all stuff I’ve said over the past five months. It’s just filler to wrap around an amusing cartoon that a former employee, James Ballard, forwarded to me.
Stone tablets

Cartoon by Nick Anderson, The Houston Chronicle.


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Sunday, June 24, 2007

Cybersquatters have my domains

In trying to put together some domains for my personal and professional interests, I’ve been frustrated by cybersquatters. Let me review the domains I can’t get:

  • JoelWest.org. The .com is owned by a legitimate businessman of the same name. I could have had it several years ago (was holding out for West.com — foolish) and so it’s my own darn fault.
  • Linkabit.us. The .com by a legitimate business that has nothing to do with (in my biased view) the “real” Linkabit.
  • OpenInnovation.net. Bought it from a cybersquatter because it was for sale; the .com seems to have become a more serious squatter now that the Open Innovation concept is catching on.
  • SanDiegoTelecom.org. I registered this because the sdtelecom domain was snapped up by a cybersquatter after the San Diego Telecom Council forgot to renew it. (They now call themselves CommNexus). This one will be impossible to get, because there was a lot of traffic to the old domain and the new squatter is making money off the confusion (whereas if I had it, I would continue to include a link to the org’s new site)
As I understand it, there are various practices involved:
  • Tasting. Someone registers the site cheap and sees if there’s enough revenue from it to continue the registration in the future.
  • Kiting. The same as tasting, but uses the 5-day-free registration to taste without putting any money down. This abuse is so blatant that it’s starting to get some attention.
  • Other squatters. Of course there are those that wait for established domains to expire (as happened with sdtelecom), take domains of 2- and 3-letter combinations, combine two common words, or take misspelling of extremely popular sites.
This is only the domain name typing problem; there is also search engine optimization, for which there is only a fine line distinguishing it from search engine spamming.

Leading the charge against (some) abuses is Bob Parsons, CEO of GoDaddy.com. He caught my eye with the column entitled “Why it's getting harder to get the domain names you want.” He notes that Google is largely responsible for the problem, by providing a business model to the squatters that rewards their speculation:
The practice of domain tasting and kiting continues to rage out-of-control. In February 2007, 55.1 million domain names were registered. Of those, 51.5 million were canceled and refunded just before the 5 day grace period expired and only 3.6 million domain names were actually kept. With the exception of just a few names, 93.5% of those names were registered simply to see how much advertising revenue – paid by big search firms like our “do no evil” friends at Google – will generate when they are associated with a one page Web site and related links.
Parsons thinks the fix has to come from ICANN, but since they don’t do anything — victims of institutional paralysis — that means no fix at all.

Of course, the hands of GoDaddy and Parsons are not completely clean here. They help people get money from parked domains with their “CashParking” service and reward the cybersquatters by buying domains on the open market.

Am I entitled to these domains? Of course not. Do I feel abused when I have to pay some squatter who is polluting the internet by holding onto it? Yes. Does it create confusion and inconvenience and users when 95% of the domains out there lead to some squatter site, making it hard to tell what domains are legitimate? What do you think? (Comments pages are good for that).

This is what happens when you combine low entry barriers and marginal costs of speculation with the ongoing ad-supported revenue model supplied by Google. I don’t see an easy or fair fix that doesn’t cause other problems, but then I’m not staying awake worrying about it, easier. (Although I still regret not grabbing SDTelecom when it expired).

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Friday, June 22, 2007

Finally home

Sleepy participantMy hectic month of conference traveling is over, and I’m back in San José. I just finished my 14th trip to Europe since the first one in 1980; there’s been almost one a year since 1996, and two in the past five weeks. I’ve also done 3 conferences in that time, and 4 in the past 3 months.

Some random observations: the Danes are as bicycle-mad as the Dutch, but the other countries I visited are not. I still think flat has something to do with it; we love bikes here in California, too, but so little of the state is flat (or compact) enough to make them useful to the average citizen.

Europe seems more smoking addicted than the US, but (at least in Northern Europe) is marginalizing smokers the same way while leaving it legal enough to collect the tax revenues. In the summer it’s not so bad, but being forced to smoke outside in December in Denmark seems like a more severe punishment than doing so in California. I’ll be curious to see how the British smoking ban on July 1 goes.

European airports are even worse than US airports (if that is possible) in not having power outlets at the gates. In one airport (I think Schipol) I used the Coke machine outlet, which I wouldn’t have known was possible except someone else had left it unplugged. Heathrow will gladly sell you Wi-Fi access but don’t expect coverage at the gate. (In San José, I can usually get a signal on the plane.).

And hopefully the next time I’m back at Heathrow the insipid HSBC airport ad campaign will be long gone. It was cute for about 5 minutes, but after that the implication is that the people who would manage your personal fortune at HSBC are about as deep and insightful as to the drivers of global business as the editors of Vanity Fair or Esquire.

Picture: European Academy of Management opening reception, May 16.

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Thursday, June 21, 2007

French paranoia

Two interesting tidbits of European mobile phone news in the International Herald Tribune this morning as I wend my way home.

First, the French government has banned use of Canadian-made BlackBerry devices.

“The risks of interception are real. It is economic war,” the newspaper Le Monde quoted Alain Juillet, in charge of economic intelligence for the government, as saying.
Since when did the French have any economic secrets worth stealing? About the only world-class products they are have are the TGV and the A380 superjumbo, both markets where US firms do not compete. It seems like they’re projecting their own spying habits onto their economic betters. (I wonder if they would be any happier if RIM moved its servers to the Qubeçois Republique).

As the follow-up story documents, crackberry-addicted French bureaucrats are in serious withdrawal without “Le BlackBerry.”

The second article brought news that next January, Nokia will combine all its mobile phone divisions into one. Right now they have three divisions: Mobile Phones (basic devices), Multimedia (phones featuring video and television) and Enterprise Solutions (for corporate use). The combination will not affect reporting on the Nokia Siemens Networks joint venture.

I don’t follow Nokia well enough to understand the history of the distinction, but it certainly seems artificial today. Business users want music and video to play in airports, while many of the thumb-keyboard users (at least in the US) are individuals or at least buying the device on their own.

The Bloomberg report in the IHT also played up that product and services revenue will be aggregated — the press release makes it clear that Nokia will not break down its revenues except to separate the Nokia Siemens JV. Certainly Nokia is trying to grow both its software and services revenues; software should have good margins (with sufficient scale) while services tend to have poor margins. Nokia may be able to get growth as a solutions company. However, I have to wonder if the real motivation is that that they expect weak growth in hardware sales, and so want to increase (but not report out) service revenues to disguise the maturation of their primary markets. Look for their gross margin (or return on sales) to decline if they make a big shift to services.

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Tuesday, June 19, 2007

Terry Semel’s career heads south

Terry Semel, a former Hollywood movie mogul (and would-be Silicon Valley mogul) has quit under pressure at Yahoo. As a former newspaper reporter, I think Tuesday’s jointly-authored Mercury News story tells it well:

Earlier this decade Yahoo gambled that content and Hollywood would be the key to its success.

Google banked on technology.

Monday's dramatic shake-up at Yahoo, with the ouster of showbiz veteran Terry Semel as CEO and the installation of co-founder Jerry Yang and financial wizard Sue Decker at the helm, is a long-awaited acknowledgment that Yahoo's bet was the wrong one. Yang as chief executive and Decker as president are expected to refocus the Sunnyvale Internet giant on technology.
They later continue:
After failing to buy Google in 2002, Semel bought advertising technology that had inspired Google's business model … Yahoo at the same time focused on content partnerships, often with the Hollywood studios that Semel used to work with. Google focused almost obsessively on improving its core search technology.

The result: Yahoo's value has fallen by more than 35 percent since early 2006. A delay of new advertising software and a steady exodus of talent have prompted concern that the company has lost its competitive edge.
Last week, Semel got beat up at the annual shareholder meeting, and there was no denying the handwriting on the wall. Since Semel has been commuting via executive jet from his Beverly Hills home, presumably he’s now back south in LA where he spent 24 years at Warner Brothers until he quit the chairman‘s job to become Yahoo CEO.

At 64, he’s unlikely to get offers for more than a board seat. Presumably he’ll spend his time planning fundraisers for the Jane and Terry Semel Institute for Neuroscience & Human Behavior at UCLA, renamed in 2004 after the Semels sent $25 million in Yahoo money to the school.

When writing my teaching cases about Live365 and Hollywood vs. Silicon Valley, it seemed clear that Hollywood doesn’t get Silicon Valley. (D'oh!) But actually, I think most of the world doesn’t get SV either — it’s an alien world, with its own culture, management style, labor market and sources of competitive advantage.

I think someone from another US high tech region — San Diego, Seattle, Austin, maybe (or maybe not) Boston — could become a SV executive, particularly if he or she had worked or lived here before and was used to the fruitfly-like job loyalty. I think I could do it, and at least half of the entrepreneurs I’ve interviewed for my San Diego telecom study could do it too. (Why would they want to, since they can do the same thing down south with a better quality of life?)

But hire a telephone company exec, or a movie exec, or a bank exec? Forget it. Semel’s failure has shortened the rolodex of the headhunters seeking to import talent to SV, like Spencer Stuart (who collected millions to place Semel in 2001). Google’s CEO, Eric Schmidt, was a longtime #2 man who wanted to be #1. I’d assume that local names will be now considered for the top jobs from places like the long rank of SVPs at Cisco or Intel, or the division presidents at eBay. One name unlikely to be available is Apple COO Tim Cook — certainly this would be a bad time to jump from Apple to a sinking ship.

Does the failure of Terry Semel say anything about the decision to hire Mark Hurd for HP? Probably not. HP has not been in the innovation business for a long time, and under Hurd they are now succeeding based on execution and operational efficiency — using their superior distribution channels to crush Dell. Two things we know about Google: they don’t rely on others for distribution channels, and pinching pennies is not very high on their priorities.

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Monday, June 18, 2007

Sony 2, Toshiba 0

3rd in a series of insomniac blogging.

Monday brought the news that the leading US video rental chain, Blockbuster, is rolling out Blu-ray nationwide and dropping HD DVD. Endgadget seems to think it’s game over in the next-generation DVD format war between Toshiba and Sony.

I’m more inclined to agree with Forbes that Blu-ray is pulling ahead. The interesting thing is that Blockbuster’s decision after a 250-store trial reflects consumer demand rather than that Blockbuster (a shell of its former self) has the power to sway markets.

Of course, Sony already won the important first round: five of the big six Hollywood studios back Blu-ray, with only Universal in the HD DVD camp. So it’s not surprising that consumers would want to rent Pixar or Paramount movies instead of limiting themselves to one studio. (This raises the question of why Toshiba launched HD DVD without broader backing).

If Sony does win, this would also influence the Microsoft vs. Sony video game war, since Xbox 360 has HD DVD and the PS3 (natch) has Blu-ray. (Neither format will have any impact on Wii, which is what American consumers really want for a videogame console).

Competition is messy, but competition is good. There was some talk of merging the two standards (as happened with DVDs), but that likely would have doubled the patent royalties paid by every manufacturer of disc players.

The final round will come on the store shelves. Will Best Buy and Wal-Mart stop shelving HD DVD players? I remember how hard it was to find a Beta VCR back in 1990 after ours was stolen in a burglary. At that point, there were only two manufacturers left for what had long since become a declining market: Sony and Toshiba.

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WiMAX business models

2nd in a series of insomniac blogging.

I still don’t quite get the WiMAX business model. OK, the radio has a long range, which is an advantage in rural areas, and thus works well for backhaul (cell phone tower to the PSTN). But for connecting users in a city, unless you divide it up into cells you’re back where car phones were in 1965 with IMTS with a heavily congested party line. And of course every time you add a cell, you add infrastructure cost; broadcasting has economies of scale but cells do not. For newcomers like Clearwire, this is a lot of infrastructure to build. One estimate put the cost of a new nationwide WiMAX network at $5 billion.

The biggest US player in WiMAX so far is Sprint, which announced last august it would roll it out as a successor to its EV-DO 3G service. The timing of Sprint’s support of WiMAX seemed odd, since they had a lead in rolling out mobile broadband (which means DSL rather than dialup speeds). Despite this confusion, after I talked to the Sprint guy at LA GMR earlier this month, one part of their strategy made sense: they already own tower sites and backhaul, so deploying WiMax is posting new radios and antennas rather than building infrastructure from scratch. So they can roll it out easier than a de novo entrant, costing only $3 billion.

Still, the claimed performance of WiMAX is not all that impressive — perhaps better than EV-DO and HSDPA, but not dramatically so. And we know (as with Wi-Fi) that claimed and actual performance vary widely, so who knows what the real technology will bring?

So if performance is (to give the benefit of the doubt) slightly better, but the infrastructure costs are just as daunting as for cell networks, what’s the point of WiMAX? Other than it’s not controlled by the big bad phone companies, or that Intel is pouring gazillions of dollars into it?

Now comes speculation that Sprint is pulling back from its WiMAX plans, or perhaps partnering with Clearwire to deliver some coverage rather than building it from scratch. Except during the Dot-Com bubble, capital markets impose a certain financial discipline and realism: if Sprint has shown its numbers to Wall Street and they’re worried, that’s further indication that the business model for WiMAX as a cellular replacement is (at best) problematic.

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Avoiding platform fragmentation

I'm going to continue posting regularly, but hope to do so with less time away from my day job. So bear with me as I try shorter posts.

One of the big problems that embedded Linux for mobile phones has right now is that it’s a technology, not a platform. Below is a slide from my presentation Monday at the DRUID conference on Apple’s iPhone strategy.

When I say “platform,” I mean in the sense of the seminal 1999 article by Bresnahan & Greenstein, or my own (far less influential) 2000 article with Jason Dedrick (which referred to a “standards architecture”, a terminology I no longer use). The leader in platform research is Anabelle Gawer of Imperial College London, who has spent pretty much her whole career since her 2000 MIT dissertation (on platforms) writing about platform issues, including the HBS book adapted from her dissertation.

At it turns out, I chatted with Anabelle last week at Imperial, we were presenting in the same session Monday evening, and chatted about platform issues at dinner (before devolving to more prosaic issues like how to raise a family on a professor’s salary in high-cost areas like London or Silicon Valley). (I used the same session and dinner to solicit other blog readers, like Hui YAN of Aalborg U.)

This morning, the near-solstice Danish sunlight woke me at 3:30 a.m. and I somehow never made it back to sleep. Trying to kill an hour (which turned into 3) I browsed through my RSS reader, and found an interesting article on LiPS, reacting to the same LiPS news I mentioned last week. Symbian developer Simon Judge believes that while allowing for vendor variation, LiPS will reduce the existing fragmentation of Linux on mobile.

Judge argued that the LiPS strategy of variation under standard APIs makes for a better platform than the Symbian strategy of variation on top of standard APIs:

The Symbian OS has evolved to push phone specific functionality (and unfortunately some non-specific) on top of the platform and this has resulted in UIQ, S60 and FOMA. These are not just UI variants but also include many extra internal and 3rd party APIs. Fragmentation is undesirable not only for developers but also for phone OEMs because they have to license extra software other than Symbian OS to create a new phone (or spend an inordinate amount of effort creating the missing components). …

If the LiPS extensibility scheme of pushing phone capability variations under rather than on top of the OS platform a) is workable and b) is adopted by phone OEMs, then it might actually prevent fragmentation.
In fact, Symbian OS is not a platform, it’s a shared technology that enables Nokia’s S60 and Sony Ericsson’s UIQ platforms. The fragmentation of the Symbian application APIs is unfortunate. Somewhere I read or heard that UIQ (which began as a cool pen-based UI) has more apps than S60, even though its installed base of S60 is 3x or 4x that of UIQ.

However, this is a painful reality of the political compromise that created Symbian as the anti-Windows Mobile coalition. When it was founded in 1998, (effectively as a Psion spinoff) Symbian actually tried to have a common UI and platform. Last month, I found a telling interview with Colly Myers, Symbian’s founding CEO. When asked what he would most want to do over as CEO, Myers replied:
We wouldn't have spent time on user interfaces. We'd have left that much earlier. Everyone was keen to share and we tried hard for two years, but it was never going to happen. Everything about those companies [phone OEMs] is based in their own UIs. So that was two years wasted.
In other words, Nokia and Sony Ericsson don’t want to end up like HTC (or Dell or Compaq) as nothing more than commodity distributors of someone else’s look and feel.

Unix (and now Linux) has had its own GUI wars. Back in the 1980s, MIT’s X allowed for the idea of common APIs but different look-and-feel, but (AFAIK) the APIs were incomplete — applications written for the various X-based GUIs (CDE, Motif, KDE, Gnome), are not binary compatible.

By joining GMAE LiPS has firmly sided with Gnome, and picking a single GUI is a good step towards defining a common platform. But then we’re back to Symbian’s dilemma — how do all the LiPS members distinguish their products with a common GUI?

Oops, this was supposed to be a shorter post. Maybe next time.

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Sunday, June 17, 2007

iPhone T-12 days

AP reports that the iPhone is going on sale at 6pm local time on Friday June 29. So when the weekend starts, people can line up and create a commotion that ends up on the TV news. (Most US stations have local news at 5pm, so people will be in line for the “live remote” shot in the 50 or so major markets).

AP also confirms that the phone will be sold by its 1,800 (formerly Cingular) retail stores, in addition to the Apple’s 162 U.S. retail stores. I always thought this was clear, but at least one person thought Apple had shut AT&T out of the distribution chain.

What I’m curious to know is how many AT&T store visitors walk out with an iPhone? All the hardcore Mac people will go to the Apple store, and Apple will make sure to get them on the waiting list. But the Cingular stores are mainly interested in using the iPhone to generate traffic to sign up new subscribers, so if the iPhone is out of stock (or too expensive) they’ll switch them to whatever other phone it takes to close the sale.

Finally, when will Verizon begin its counter-promotion? It says it’s going to envelop the iPhone with a range of multimedia phones, so when does it think it can cut through the iPhone hype to get noticed?

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Friday, June 15, 2007

Intel the one trick pony

Normally I think about the battle for total world domination as Microsoft vs. Google. An occasional wise guy might suggest Apple, Nokia or Yahoo, but they are definitely 2nd-tier contenders.

The end of the tech bubble made it easier to forget about the other half of the Wintel duoopoly. Yes, Intel’s stock has been falling over the past three years, but they’re still a $40 billion/year company with at net profit margin in excess of 20%.

Somehow I’d missed Intel’s declaration of war against ARM and its chokehold on the mobile phone processor market. Once upon a time, they were going to work with ARM via their XScale processor, but they dumped that off almost a year ago to Marvel, a SV startup that hopes to succeed where Intel failed.

In April in China, they unveiled the Linux-based “Mobile Internet Device,” in some ways an extension to their Ultramobile PC and in other ways a knock-off (as well as building upon) Nokia’s open source work in its 770 and N800 tablets. (If you’ve been living under a rock, these are non-GSM WiFi devices). The Intel products (to be made by various ODMs — see also the Japanese report) are due early next year.

There’s no way for Intel to succeed without besting ARM, who (according to a May shareholder presentation) have better than an 80% market share for its architecture. Intel has the sole PC architecture (since Apple switched) and the vast majority of chip sales in that architecture, and of course the 25+ year old ecosystem that goes with the x86. So this is really a war not only between two companies, and two architectures, but two ecosystems: given Intel’s resources, it at best will be a WWE-style SmackDown, and at worst, a fight to the death.

This harkens back to Intel’s decision in the 1980s to kill its RISC architecture, the iAPX 432. There are two ways to interpret this.

On the one hand, as Andy Grove recounted in his 1996 book Only the Paranoid Survive, Intel’s support for the i432 was diverting resources and sending a mixed message to the market. Instead, Intel put all its market and R&D power behind the x86, and they did pretty well by that until the bubble burst.

On the other hand, Intel is out of DRAMs and probably going to bail out of flash memory too. It tried motherboards and gave up. Its other comm chips went to Marvel. In short, it’s failed at everything other than follow-ons to the 8086. So in the 29 years since the x86 was born, it hasn’t really created any new lines of business. Apple went from Apple II to Mac to iPod (and maybe even iPhone). Microsoft went from Basic interpreters to operating systems to business productivity to server software — and created a whole new videogame platform while it was at it. IBM of course has the broadest revenue stream of anyone.

Oracle is a one trick pony, and Larry Ellison is still worth billions. WordPerfect and Lotus were one trick ponies (OK, Lotus came up with a 2nd trick) and they’re gone, just as Novell is in the process of disappearing. Intel is a lot bigger than those companies, but right now it seems to be saying that its growth will come from repackaging the same old same old, rather than creating some new product family or market.

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Dueling Linux standards

My friend Bill Weinberg sent a link to a Linux Devices column about his work on the Linux Phone Standards (LiPS) Forum.

The column is interesting because it contrasts LiMo with LiPS more clearly than anything I’ve seen before.

Why do we need two standards bodies for embedded Linux for the handset? As with any other case of dueling consortia, it’s due to the egos of the sponsoring companies, in this case Europe’s two largest mobile phone carriers. LiMo is backed by Vodafone and LiPS is backed by Orange.

Would like to comment more, but time spent on blogging is already having a negative impact on my day job.

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Wednesday, June 13, 2007

Red Hat’s limited greed

I guess the theme du jour is the motivating power of greed. It was going to be du jour but I didn’t get time to post before leaving.

Long overdue, I’m busy working on my presentation for the conference next Monday in Copenhagen. In trying to explain openness to fellow academics, I’m interested in the “open” strategies that really aren’t — or, perhaps to be more fair, are only partly open.

Red Hat is one of the examples that comes to mind, since their per-CPU license fee looks a lot like Microsoft’s. This is oft-remarked among open source users occasionally gets noticed, although apparently not that often in print.

One example where it was is when Sun CO Jonathan Schwartz referred to Red Hat as “"a proprietary Linux distribution.” He’s not the most objective commentator, but Ian Murdock (the Ian of Debian Linux) agreed. And perhaps the comment was provoked by (never bashful) Red Hat CTO Michael Tiemann criticizing “Java apartheid” — which would be fighting words around here.

Criticism from the community side was published in January by Ubuntu Project founder Mark Shuttleworth, who wrote:

As free software becomes more successful and more pervasive there will be an increasing desire on the part of companies to make it more proprietary. We’ve already seen that with Red Hat and Novell, which essentially offer free software on proprietary terms - their “really free” editions are not certified, carry no support and receive no systematic security patching. In other words - they’re beta or test versions. If you want the best that free software can deliver, a rock solid, widely certified, secure platform, from either of those companies then you have to pay, and you pay the same price whether you are Goldman Sachs or a startup in Rio de Janeiro.
Of course, firms have to make a profit and I’m the first to praise such motivations. I just think some of the claims of openness in the industry are disingenuous — in a few cases, it's no more than a marketing slogan (like the late lamented “OpenVMS”).

BTW, if you want to know what Red Hat’s business model is, Matt Asay spells it out, based on a Red Hat presentation. To my mind, he draws only a nuanced distinction to the proprietary source model:
The model requires constant innovation. This is not good if you're trying to milk a product for monopoly rents ("Monopoly" here referring to the limited monopolies afforded through copyrights and patents).
My problem with this claim of Red Hat innovation is that any software company finds it easy to innovate when it’s young. The key is whether it can continue to provide incremental improvements, valued by customers, long after the core features have been implemented.

In my first job out of college, back in 1979 or 1980, my supervisor (our office had only one “boss”) Glenn D. Johnson said something to the effect that all operating systems stop at 8. With each major release, the cost of upward compatibility becomes worse and worse until eventually the delay between releases becomes infinite. He was thinking of IBM’s MVS (later abandoned), but it also matches my experience. Mac OS ended with 9.2.2, but it skipped directly from 1.x to 4.x. Also, Apple renumbered 7.7 to 8.0 to trigger the Copland clause (and kill cloners). So that means Mac OS had 6 or 7 major releases, not 9.

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Tuesday, June 12, 2007

Slimy salesmen and “don’t be evil”

Even if they’re not on the path to total world domination, it’s clear that Eric Schmidt and his grownups are making Google into just another big company.

Before catching up with my friend Matt Asay, I thought I’d see what his company Alfresco is up to. I found this amusing entry on its corporate blog

A good friend of mine recently received this email from a recruiter/headhunter:

[Name,]
My firm has been contracted by Google to help build their emerging enterprise application sales force. Based on your experience and past success, I thought this compelling sales opportunity might appeal to you. Google has an immediate need for someone in your area to fill a growth position. This position offers a highly lucrative compensation package with significant stock options available.
Of course, there is nothing wrong with having a professional salesforce — any publicly traded company would be expected to do so.

Still, my experience with (and research on) high-tech companies is that the shift in culture away from an engineering-driven startup comes with the ascent of the salespeople. Their incentives are set up assuming that only one thing matters: money. Frankly, they pretty much all stretch the truth to close the sale: some stretch a little bit of the truth just a little, and others test how far it can be stretched without falling into an outright verifiable lie. (I’d like to think my OEM sales experience was closer to the former than the latter — with one unfortunate exception, over 17 years our customers felt like they got what they’d been promised).

Again, there’s nothing wrong with wanting to make a buck. Even aging hippie rockstars insist upon it. But to me, the claimed corporate motto “don’t be evil” implies something akin to Ben & Jerry’s or the Body Shop, not Oracle or Sun.

OTOH, Bennett Cohen, Jerry Greenfield and Anita Roddick couldn’t attain (let alone sustain) a $500/share stock price. However, Schmidt & Co. recognize that (as with any other big tech company) there are a lot of bright people that won’t stay at Google unless the stock price continues to grow.

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Monday, June 11, 2007

Does Windows need another browser?

This week is Apple’s annual developer conference. It used to be in San Jose (an easy trip from where I live now) but Steve Jobs prefers The City, so he switched the annual conference from San Jose in April/May to a small corner of Moscone Center in June. The first SF conference (2003) was my last WWDC — I went to most of the WWDC conferences from 1988-2003, and still have many of the old polo shirts.

Today in San Francisco Steve Jobs did his annual WWDC keynote. Tom Krazit of CNET has a good stream of consciousness blog from WWDC. After the expected OS X 10.5 (“Leopard”) demos, the keynote (as reported by Krazit) took an unexpected turn:

[Jobs On stage]11:09--Safari: The Safari Web browser's got about 5 percent market share across the Internet, Jobs says. He'd like to make that number grow. How to make that happen? A version of Safari for Windows.

11:11--Safari 3 runs on Windows XP and Vista, and it exists today. Steve says Safari's HTML performance is twice as fast as IE using a benchmark Ina and I didn't catch. It's also faster than IE on Javascript performance, Jobs says, and it also beats Firefox (although not as much).

11:13--Jobs switches over to a Windows XP window. "This is strange," he jokes. He demonstrates the Windows Safari browsing through various sites, showing off a new tabbing feature. The benchmark we didn't catch is called iBench, and Jobs does a side-by-side comparison of Safari and IE 7 loading a bunch of Web sites. Safari's twice as fast, as you might expect during a WWDC demo. Try it yourself, he says.

11:15--Distribution is the next topic. There are over 500 million downloads of iTunes for Windows out there. Apple's going to have 3 editions of Safari, one that's for Leopard, one for XP, and one for Windows on Tiger. It's a public beta available today on Apple's Web site.
I must say, I didn’t see this one coming: I thought the browser wars were over almost a decade ago. However, in researching her update of IE and Mozilla plans, Mary Jo Foley (ZDNet’s excellent Microsoft blogger) found that Mozilla saw this coming.

Why did they do it? Here are some possible reasons:
  • This causes the open source WebKit library for rendering HTML to be more widely used. Webkit is already available on the Nokia/Symbia S60 platform, while Swift is a struggling effort to bring WebKit to Windows. Raising the Safari/WebKit market share would mean more sites would care about Safari/WebKit compatibility. (For those who want to do first-hand research, the WebKit team is having a drinking party tonight in San Francisco.)
  • As the TV ads make clear, the iPhone’s success is highly dependent upon Safari and a user experience comparable to a desktop. So maybe building Safari market share and compatibility has now become crucial.
  • Windows-only shops can test for Safari compatibility without buying a Mac.
  • As Foley suggested, maybe there are some Safari/iTunes integration opportunities.
  • Many of Apple’s recent switchers are still running Windows, either at work or at home. So perhaps Apple is trying to give them a clean, consistent user experience rather than have them rely on Firefox (since IE for Mac is gone).
Still, running a Vista shop within Apple just to push Safari seems like a lot of expense; Microsoft has a whole Macintosh division, and they no longer maintain IE. There’s got to be another explanation; perhaps the iTunes for Windows programmers had time on their hands in between updates.

The key note ended a half hour ago. For those who want the new Safari (Mac or Windows), Apple’s download site is now active.

Photo credit: James Martin/CNET News.com

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Sunday, June 10, 2007

Apple’s cumulative innovation

In last week’s issue, the Economist praised Apple’s ability to build upon the innovation of others. The anonymous correspondent gushes:

[Apple’s] real skill lies in stitching together its own ideas with technologies from outside and then wrapping the results in elegant software and stylish design. The idea for the iPod, for example, was originally dreamt up by a consultant whom Apple hired to run the project. It was assembled by combining off-the-shelf parts with in-house ingredients such as its distinctive, easily used system of controls. And it was designed to work closely with Apple's iTunes jukebox software, which was also bought in and then overhauled and improved. Apple is, in short, an orchestrator and integrator of technologies, unafraid to bring in ideas from outside but always adding its own twists.
The description at first struck me as odd. Certainly they have right the design role of Tony Fadell (iPod consultant whose role is sometimes minimized in favor of bigshot Apple execs) and the software contributions of Bill Kincaid and Jeff Robbin, authors of SoundJam (which became iTunes).

But what was jarring is how much that Apple has changed. The Apple of the 1990s was the exemplar of NIH. I once tried to prove that “Not Invented Here” was invented at Apple, but the problem is widespread enough that no one company can get the credit (blame). Any Mac developer will tell you how we suffered almost 20 years working with an operating system (OS 1.x,4.x,5.x,6.x,7.x,8.x and 9.x) designed in the early 1980s by programmers who’d never heard of Unix (or VMS or CMS or RSX-11 or anything else). In the 1990s, Apple kept inventing new electrical interfaces and standards just because it could, not because the world needed them.

I think the Economist is right, and the new Apple is an exemplar of what we now call “open innovation.” (For some reason the Economist claims it’s called “network innovation,” but as someone who studies social networks, network industries, and all forms of innovation, I’ve never heard this term and can’t find anyone who uses it). The business model also has elements of user innovation and cumulative innovation, which thus brings to mind a talk I gave last month distinguishing the three types of innovation.

Apple has come a long way in a decade. It has always run a systems business, and (to varying degrees) been concerned with product design and ease of use. The turnaround is in part due to execution, and in large part due to a willingness to be open to building upon the ideas of others.

Steve Jobs claims he was quoting Picasso when he said “Good artists copy, great artists steal.” Whatever the source, the best innovations build upon what has been done before.

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Saturday, June 9, 2007

iPhone prediction department

Wrapping up my LA GMR coverage before heading off to my next conference.

A week ago I presented my paper with Mike Mace on the impact of the iPhone. The conclusions should be surprising for those who’ve read my previous thoughts (or Mike’s). And some of the predictions have been overtaken by events.

For the record, here are the slides as presented on the afternoon of June 2 in Marina Del Rey. A few highlights:

Our Premise
The iPhone could change the mobile phone industry:
  • Nature of devices
  • Vendor-consumer relationships
  • Vendor-operator relationships
  • Value and use of content
Of course, there are limits to drawing inferences based on vaporware
The first three relate to the power of Apple’s brand and consumer marketing, and how it’s tried to assert that power to bypass AT&T. The comment about content wasn’t there when I drove down to LA, but it was quite clear reflecting on the first day of the conference that ease of use is a big concern for getting people to use mobile phone content, and obviously the iPhone will have ease of use.

As the June 29 ship date approaches, it is clear that Apple will be creating the first-day hype that it has done with some of its other products (and others have done with videogame consoles) — fanatics camped out by stores, lines around the block, etc. etc. If Apple can get a line for a new retail store, then certainly they can get one for their first cellphone. For those not in the U.S., they’ve been ramping up the TV advertising, demonstrating the iPhone as what a mobile phone web browser was meant to be (I guess assuming it already has the iTunes customers in the bag).

I want to quote one other slide:
Help or Hurt Rivals?
Apple could take away sales
  • Unique content ecosystem
  • Systems competition vs. point products
  • Marketing visibility
  • “Sex appeal”
Or could create openings
  • Exclusive carrier in US, Europe, ?
  • Rival carriers will promote other phones
  • Effectively grow the category?
Our point as technology strategists — without any inside information — is that Verizon & Sprint won’t standstill as Apple promotes the iPhone, but will sell their own competing products: I used the example of the LG Prada, the Samsung UpStage and the Samsung KE850.

Sure enough, on Thursday morning, the Wall Street Journal published an article (registration required) about rival US carriers’ plans to compete with the iPhone. They listed the the Prada, the UpStage and the HTC Touch (a Windows Mobile iPhone knock-off). They also implausible listed the Nokia N95 — Nokia’s top of the line smartphone, but clearly ignorant of Mike’s point that there are different mobile phone segments. (see our slide #14 for an updated diagram showing the iPhone and N95/9500 segmentation).

The one new tidbit is that at least Verizon is smart enough to swarm the iPhone in adjacent segments rather than competing directly:
Denny Strigl, president of Verizon Communications Inc., which co-owns Verizon Wireless with the United Kingdom's Vodafone Group PLC, says the carrier doesn't want to go head to head against iPhone with any single device. Instead, it plans to rely on a broader set of mobile services and phones to win over customers. "With what we have as an overall product line, I'm confident we won't lose [market] share to the iPhone," Mr. Strigl says.
However, the picture changed dramatically on Thursday afternoon with Qualcomm’s latest loss to Broadcom. While Qualcomm is mounting an aggressive appeal, as it sits Qualcomm’s chip customers can’t import new phones into the US. That will shut down innovation on the CDMA phone side (where Qualcomm holds 95+% share), including new LG or Samsung phones to Verizon and Sprint. So — in a break for AT&T and Apple — iPhone rivals could very well be delayed until Qualcomm comes up with a solution (work around, court victory, or a settlement).

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Wednesday, June 6, 2007

New open innovation research

At the open innovation blog, I’ve posted a series of articles on European research on open innovation, open source, and online communities. While some readers of this blog are interested in open innovation, that blog is more about academic research than the latest industry news.

The postings stem from a series of sessions at the European Academy of Management (EURAM) 2007 conference last month in Paris. I talked about the role of communities and users in innovation, the linkages between open innovation research and other forms of innovation research, and an interesting example of software open innovation beyond my earlier study of open source as open innovation. Vareska van de Vrande also posted an article based on the sessions she helped organize.

I am hoping having the separate blogs (there’s also my San Diego Telecom blog) is not a brand extension too far. I see this blog as appealing to readers of CNET or InfoWorld or Slashdot, whereas the other two blogs are more towards readers of specific books. The OI blog is about the 2003 and 2006 open innovation books, while the SD Telecom blog is about my (in progress) book Digitizing Communications.

I could see others blogging on the other sites (respectively researchers on open innovation or the SD telecom industry), whereas Open IT Strategies is clearly my voice and my own personal-professional musings.

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