Saturday, June 16, 2012

Less than excited about Apple updates

It's been almost 10 years since my last Apple developer's conference. (IIRC I last made the pilgrimage in 2003, 18 months before my Mac software company went away). So I have to rely on news accounts of the announcements Apple makes, like the ones CEO Tim Cook and friends made Monday.

A week ago, I thought there might be something there for me, since I’m in the market for a tablet, a smartphone and an updated (Mac) laptop. However, nothing announced at WWDC will cause me to open my checkbook.

The most hullabaloo was about the “MacBook Pro with Retina display” (not to be confused with the “MacBook Pro”). It’s a cool idea to have a 2880 x 1800 15" laptop (vs. half that for the conventional 15" MBP), but I’m not pay $2200 for no stinkin’ laptop, even if all the opinion leaders are doing so.

And it’s not just the prospects of paying more for less. As David Pogue put it:

Remember, too, that this MacBook Air-inspired laptop lacks both a DVD drive and an Ethernet jack. Apple says that Wi-Fi is everywhere now, and if you want to watch a movie, you can stream it from the Internet.

Frankly, that’s a typically too-soon Apple conclusion. Wi-Fi isn’t everywhere, and lots of movies aren’t available legally for streaming. (Ever fly on a plane? You can’t stream any movies at all if the flight doesn’t have Wi-Fi.) As a workaround, you can buy an external DVD drive ($80) and Ethernet adapter ($30).
While Apple might have been right about dialup modems — in a similar move nearly a decade ago — it’s wrong about the end of Ethernet. I will be using Ethernet for the next 5+ years at work — my office is not near a hotspot — and probably at home too so I can do backups over the network. Wi-Fi alone won’t cut it.

Supposedly there is a ThunderBolt to Gigabit Ethernet adaptor available, and a ThunderBolt to FireWire (for my legacy HDDs) is due Real Soon Now. Support for USB 3 is a plus since that’s what the cheapest new HDDs have.

So I might be tempted to get the regular MacBook Pro at $1200, but — like the “with Retina display” cousin — it requires a new MacSafe2 adaptor, rendering all my existing power adaptors obsolete. Since I need at least 3 adaptors (home, work, briefcase) I’l either need to spend 4x for new bricks or $10 each for the “MagSafe to MagSafe 2 Converter.”

So yes, Apple saying “we’re changing our peripherals strategy” gives me pause. But the reality is that the 2013 model of the MBPwRD or MBP or MBA wthat ill probably suit me better than this year’s model. Since I need a minimum of 250gb — about half that of David Pogue — that means either a spinning disk, paying a huge premium for solid state disk drives, or waiting for next year’s models.

There were no iPad announcements: no update to the 10" (not surprising), no long-rumored 7" model. I’ve been tempted by a possible 7" but the 10" would duplicate too much the size and weight of my laptop. At this point, our teenager seems likely to become our first iPad owner (since there’s no reason for her to start with a laptop if the form factor is on the way out).

Similar, this month’s announcement brought no iPhone LTE, just a vaporware iOS 6 with new web-based service: better Siri, and non-Google maps. The improved OS is nice, but better hardware — true 4G capabilities — are what everyone’s waiting for.

And that brings me to the announcement that is most likely to cause me to part with my money: a discount iPhone announced the week before WWDC. The (unsubsidized) iPhone on Virgin Mobile offers the cheapest data plan option around, worth $500+ over the life of a typical big carrier contract. Who knows: five years after writing about the iPhone I may actually get one.

Thursday, June 14, 2012

Cutting their way to greatness, Espoo Edition

The news from Espoo this morning was grim: Nokia is axing 10,000 (about 8%) of its workers over the next 18 months, in hopes of getting operating expenses (for its core Devices & Services division) down to €3 billion by the end of 2013 (vs. €5+ billion in 2010). The company will be closing R&D facilities in Germany and Canada and a factory in Salo, Finland.

In conjunction with a new earnings warning, Nokia’s market cap fell to €8.3 billion, shares shares fell to their lowest level in 16 years, less than 3% of its peak back in late 2000. The cumulative effect of the layoffs mean that in five Nokia employees will be gone by the end of 2013.

In conjunction with the announcement, three executive vice presidents are resigning at the end of the month “to pursue other opportunities outside of Nokia”. CEO Stephen Elop offered touching testimonials upon their departure:

"Jerri has made a positive impact on Nokia's advertising, marketing and brand efforts. Our marketing has made great strides under her leadership," said Stephen Elop. "I will particularly miss the fresh insight and new energy that Jerri injected into the Nokia brand."

"Mary's leadership has been instrumental in our efforts to connect the next billion people to the Internet through innovation in new devices and services," said Stephen Elop. "Under her direction, Nokia has brought new opportunities to consumers throughout growth markets and contributed strongly to Nokia's business. I will miss the value she has brought to Nokia."

"During his 16-year Nokia career, Niklas has successfully supported our growth and transformation through leadership roles in groups ranging from services to, most recently, sales, marketing, supply chain and IT," said Stephen Elop. "Niklas has been a valued partner to me during my tenure at Nokia and his many ongoing contributions will be missed."
If that were true, why were they all forced out? For that matter, why are these execs being forced out and not the CEO? So far, there’s no evidence that any part of Elop’s strategy is working.

Mercury News tech columnist Troy Wolverton was even more cynical about Nokia’s announcements, as he tweeted:
Troy Wolverton @troywolv
Nokia's press release about its restructuring is an amazing collection of Orwellian doublespeak, starting with its headline...

Troy Wolverton @troywolv
Here's the headline: "Nokia sharpens strategy and provides updates to its targets and outlook"

Troy Wolverton @troywolv
What that really means, in plain English: "We're firing 10,000 people and our bottom line is going to be much worse than we forecasted."

Troy Wolverton @troywolv
I love this line too: "...Nokia is making changes to its management team by tapping into the strong leadership bench at the company."

Troy Wolverton @troywolv
What that really means, of course: We're firing a bunch of executives...
Nokia was the world’s largest handset vendor from 1998 until this year, when it was passed by Samsung. Its market share has been in a freefall, and the profitability story has been even worse as it lost the profit sanctuary that the N-series phones once provided b.i. (before iPhone).

Part of the problem is that Nokia didn’t move quickly enough to respond to the iPhone. I was a consultant to Symbian (which made the N-series operating system) from Dec. 2006 to Dec. 2008, and while there was an appreciation of some of the iPhone features, I don’t think the company was really worried. For indirect evidence, it appeared that the Nokia execs were even more confident than their English software supplier — until Android came along. Today, Apple sells more smartphones than Nokia and earns most of the handset industry profits.

Right now, I don’t see how Nokia’s going to turn things around. On the one hand, as they phase out Symbian they’ve given up platform control for most of their smartphones — having cast their lot with Microsoft. On the other hand, Samsung is also dependent on others for its smartphone platform — i.e. Google — with only about 12% of its phones that carry the Bada operating system.

Theories for the differing outcomes abound. One is that Samsung bet on the right smartphone and Nokia didn’t. Certainly no one is enjoying great success with Windows mobile phones, while Android is the bulk of the smartphone market. However, I think the Nokia’s long indecisiveness was part of the problem: it shipped its first Windows in late 2011, 2 1/2 years after Samsung’s first Android phone.

Today, there‘s one differentiated platform — the iPhone — and a bunch of commodity smartphone suppliers competing on execution — via time to market, small feature enhancements, and of course price. Nokia made its money when it had customer lock-in as the only game in town, and its DNA is not well-aligned for today’s competitive price-sensitive markets.

But in hearing about the latest round of cuts reminded me of Silicon Valley companies also trying to cut their way to greatness, notably HP and Yahoo. Cuts will not make a mediocre company great — they will only cause it to lose less money. Success will come from growing the top line, and thus far Nokia under Elop (and his immediate predecessors) has been heading in the wrong direction.

Nokia resembles HP in that both were once world-renown innovative companies, and both have stumbled as the market matured and price premiums disappeared. Apple was in this place 15 years ago, but were turned around by brilliant market-driving innovation. However, the Apple Steve Jobs turned around was smaller, more nimble — and more scared — than Nokia is today. If there’s a reason that Nokia’s slide will eventually end, so far I haven’t seen it.

Sunday, June 10, 2012

More bullet train OPM

Facing a $17 billion annual deficit — and, unlike the Feds, no ability to print money — Gov. Edmund G. (“Jerry”) Brown has come with a novel solution: commit the state to spending an additional $70 million (perhaps $100 million) on a money-losing high-speed rail system.

Unfortunately, for Gov. Brown, the public no longer supports the plan, with voters now opposed 59% to 33%.

This morning, the San Jose Mercury News (which supported the plan in 2008) came out in opposition, saying

There is a fine line between visionary and delusional. California's high-speed rail project whizzed across that line long ago and now is chugging toward the monorail station at Fantasyland.
Two of the state’s other major papers, the Los Angeles Times and the San Francisco Chronicle, seem fully committed to spending millions of other people’s money on the system.

However, railroad historian Richard White of Stanford explained to LA Times readers how the high-speed rail yarns parallel those used by 19th century railroad barons Leland Stanford and C.P. Huntington:
The ghost of Huntington hovers over the California High-Speed Rail Authority. Its members are supposed to protect the California public, but there is too much money to be made from this project to do that. They are boosters who tell us what they want us to know. They sell the Legislature short, and in this they may be right. They sell the governor short, and in this too they are probably right. They also sell the California public short. They think we are suckers.

I hope they are as wrong in this as they are in their calculations.
The state’s senior political correspondent, Dan Walters of the Sacramento Bee, noted last week how Brown claimed the rail system paralleled that of the Bay Area’s great bridges of the 1930s. However, while those bridges were successfully financed out of their respective revenues, Brown wants to use other people’s money — the state’s general fund — to guaratee the “bullet” train debt:
If the train is as financially viable as Brown and the authority insist it is, why wouldn't they have the guts to do what the bridge-builders did – float revenue bonds to be repaid from the train's supposed operating profits?

Public works projects make sense when they fill well-documented needs.

When they don't, they are just political ego trips.