Categories

Category Technology

The greatest show on earth

Dan Niles, a former analyst who is now a portfolio manager, said on a CNBC appearance that the WWDC event actually had nothing of any real meat for investors

From Worldwide Developer’s Conference Prompts Analysts to Raise Apple Price Targets – 24/7 Wall St.

The “investors” that Dan Niles refers to are undoubtedly those who invest (or, more accurately, speculate with) money. But the audience for the event was an entirely different set of investors. These investors[1] invest their passion, intellect and a substantial fraction of their lives with Apple.

For them WWDC had a great deal of meat. Indeed, for them, it was probably the most significant event Apple ever staged.

The path to realizing this is to imagine the world as the “D” in WWDC see it. Developers don’t just build. Using an analogy of building or construction, they are architects and designers as well as contractors and craftsmen and artists as well as builders. And not of just of houses but of cities and communities. They see and think through tools and techniques for building and innovations in building materials. Innovations which allow them to imagine first and, later, to build new cities in ways that were never before possible.

We were therefore witnesses to an event which was, in essence, a cement conference. A new building material was introduced along with the methods for using it and the tools for shaping it. Perhaps some observers expected to see skyscrapers and interstate highways presented, and thus were disappointed. But they should not have had such expectations. A cement conference is esoteric. It’s about the rudiments which, when combined with imagination, ingenuity and a lot of work, generate livable spaces.

A few spaces go beyond comfort and delight us. Fewer still enlighten and cause the sprit to soar.

And yet it was still a cement conference.

Perhaps the way to understand the show better would be to “play it backwards.” Rather than the way it was presented, let us begin with the end:

We were shown a new concrete formulation which when coupled with a new way of mixing, forming and curing can lead to increases in productivity of construction. This is especially true when producing shapes that are complex, intricate and built into modules.

We were then introduced to some pre-formed kits that allow the materials to be combined for new uses such as flexibly shaped hospitals and gyms. And we would have to stretch only slightly to imagine how this might lead to better health and wellbeing.

Then we were shown examples of new ways that this cement was used to create new work environments. We had a preview of “show homes” beautifully architected and designed. And these homes were seamlessly connected through new transportation networks and allowed for easier commutes.  Again, it did not take much to imagine how these workspaces and homes would lead to greater productivity and how other spaces could be built around them that made such a collection of communities a wonderful place to be.

Some saw banks, and some saw art galleries and some saw warehouses, but all who were there were seeing a new world, populated by many loyal citizens.

Perhaps not populated by all. Indeed, such a country is not for everybody, perhaps only a billion people could be resident and it would not be cheap to live there. But still, imagine.

So this was the way I saw WWDC 2014. A cement conference cheered by cement enthusiasts but leaving Architectural Digest writers asking what the fuss was all about.

 

Notes:
  1. All nine million of them []

But Apple does not pursue profits either!

In my essay on Google’s absence of profit (or income or business) motives questions were raised on the stated absence of hunger for profits from Apple and what difference there might be from Google’s philosophy.

Indeed, Jony Ive stated:

“Our goal isn’t to make money. Our goal absolutely at Apple is not to make money. It may sound a little flippant, but it’s the truth.”[1].

He was probably repeating what Jobs had previously stated:

“I remember very clearly Steve announcing that our goal is not just to make money but to make great products”[2]

However, note that both quotes are qualified. In the case of Jobs, he said “not just to make money”. Jobs clearly stated that great products lead to money. That great products are causal to money and therefore that if you make great products you make money. One leads to the other.

Ive also continued in this reasoning:

“Our goal, and what gets us excited, is to try to make great products. We trust that if we are successful people will like them. And if we are operationally competent we will make revenue. But we are very clear about our goal.”

I would paraphrase the Apple logic as “Great products are the means by which we sustain our business. By focusing on the product, the customer is satisfied and through that satisfaction we create the free cash flows which can be used to fund more products.”

There is a difference between Apple’s “indifference to money” and the “indifference to business models” that Google exhibits.

Google steps even further away from cash flows. Its goals are to build great things guided by their vision and patterns in the data they collect. The value is in the data itself rather than in any transaction.

As long as the source of money is unfettered, its provenance is uninteresting. A business model is a profit algorithm. It could be linked to the data but it need not be. Markets are messy and imperfect. Data provides much clearer views into value. You could conclude that value itself cannot be trusted to the judgement of the public. Value is to be determined through the recognition of patterns on data privately collected.

So when I say that Google has disdain for market mechanisms I mean that they believe they can do better. Apple still values the user as the ultimate adjudicator of its actions. Google looks past the user and interprets their intentions.

Google sees markets as ultimately obsolete.

Notes:
  1. at the British Embassy’s Creative Summing in July 2012 []
  2. Walter Isaacson’s Steve Jobs []

The Numbers Behind the Apple vs. Samsung Rivalry: Video – Bloomberg

My appearance on Bloomberg West using an iPad to illustrate what it takes to make an iPad.

The Numbers Behind the Apple vs. Samsung Rivalry: Video – Bloomberg.

My Comments on Tablets on Bloomberg Surveillance

My thanks to Tania Chen for organizing my appearance on Bloomberg Surveillance in New York on September 26th.

Is Apple Really Dominating the Tablet Wars?: Video – Bloomberg.

Although there isn’t much one can cover in 5 minutes, there were some good questions around tablets. The role of Amazon and Microsoft in particular.

The policymaker's dilemma

Here is an exchange with Robert van Apeldoorn, Journalist with Trends Tendances Magazine in Belgium. (www.trends.be/fr). The exchange took place in early September via e-mail.

Robert: -Information and Communications Technology (ICT) is considered in Europe as a way to push growth, and is a target of national and EU policies (digital growth,etc), but the result seems to be a failure: the European computer industry (hardware) is almost dead (ICL, Siemens computers bought by Fujitsu, Olivetti almost out of computer business, Nixdorf dead) since the 90’, and the telco industry seems to be in crisis. All European companies are out of the handset business (big and fading exception is Nokia, but with  American software), and Alcatel is suffering with telco equipement manufacturing. It seems that at best, Europe can be a good niche player, with companies like ARM (chips). Technology seems to be reduced to localized services (computer services), some software businesses. What do you thing about that point of view? Is it correct or exaggerated ?
What will remain to the European companies ?

The main problem is perphaps the creation of European platform/ecosystems. Almost all are American today: Apple IOS-iTunes, Android, Amazon,…

Why Symbian didn’t succeed as a competitive platform ?

Is it possible to create European platforms? After all, IOS succeed after a short period of time.

What are the European tech companies that could play an important role in the near future ?

A new era is only a new state of mind

The following interview was conducted by Bruno Ferrari a writer about technology for EPOCA, the weekly magazine of Organizações GLOBO, the largest Brazilian media company on March 30 2011. The article (published in Portuguese here) is an edited subset of the following exchange.

Q: In your analyses, you mention tablets as part of a new era, the “Post PC era”. Why do you think the PCs will be replaced by tablets?

This is not quite correct. Post PC does not mean the end of the microcomputer. The way to think about it is this: The stone age did not end because we stopped using stones. Same with the iron age and the industrial era. The era of jet travel did not end automobile or even ship travel (though that changed to recreation rather than transportation for passengers.) Each phase of technology does not fully replace its predecessor. It offers a new set of solutions and perhaps a slightly different way of solving old problems. We’ll still have PCs but we will use a new type of computer, an even more personal computer. The world still uses the microcomputer’s technological ancestors.

In terms of what new jobs will we hire the tablets to solve, they will vary greatly from what we used PCs for. Just like we used microcomputers for different things than we used time-shared minicomputers and mainframe computers. I expect social interaction, media consumption and entertainment will move from a PC to a tablet. New uses will emerge from the vast experiment that is the app phenomenon.

Q: What are the new ways to interact with machines? With gestures? How will this change the market?

On Feeds and Speeds

And a lot of folks in this tablet market are rushing in and they’re looking at this as the next PC. The hardware and the software are done by different companies. And they’re talking about speeds and feeds just like they did with PCs

Steve Jobs, iPad 2 launch event March 2011.

I’m not above doing a feeds and speeds comparison.

All the products above have dual core processors, 512 MB of memory. The iPad processor is a bit slower. The iPad also has a slightly smaller resolution screen than a MacBook from mid 2006. However, unlike the others, the iPad has cellular broadband connectivity, loads more sensors, and a battery that will last at least 5 times longer.

It’s also a lot cheaper and a lot smaller.

Although five years old, nobody would question that the MacBook or iMacs shown above are still computers. They still run the latest versions of OS X and are probably still in widespread use.

The new iPad is still not considered a computer by the majority of market analysts. One wonders how long this will go on. The specs of the iPad are just going to keep getting better…

65% of Apple's sales came from iOS powered devices

The iPhone and iPad generated $15 billion of revenue last quarter. In addition, iPod touch generated about $2.3 billion, implying that iOS based devices were responsible for sales of $17.3 billion.

To put that in perspective I drew this chart which shows not only the sales by products but a rough representation of share of the two OS variants Apple uses to power its products.

What Google can learn from John Sculley: How technology companies fail by placing their strategy burden on technology decisions

And so we come to the question of Chrome and H.264. First off, it should be clear that video codecs are infrastructural technology[1]. They are commodity algorithms which are generally invisible to users. They are ubiquitous and are “shared” in the sense that they are available for licensing often without much in terms of cost.

So they don’t really offer strategic advantage to the adopter. Some may end up adding slightly more to a cost structure than others, but not in a way that determines strategy.

Flash on the other hand is not infrastructural. It is not shared, it is not invisible to users, it is a brand, it has a significant business model and market value. It is sustaining to Adobe.

So the argument I’ve heard against Google’s decision is that they are using an infrastructural technology decision (a new video codec) to placate or sustain Adobe Flash, at the expense of Apple, a potential or perceived rival.

If this was the plan, it would be a strategic mistake.

Is HTML5 a Flash in the pan?

When Apple promoted HTML5 as an alternative to Flash, the value was said to be in being an open standard, and in having better efficiency for device-based execution.

The problem is that there are no authoring tools for HTML5. Flash is popular because it’s fairly easy to kick start the creative process. You buy the tools from Adobe for a few hundred dollars and begin to tinker. With HTML5 you need to be a programmer, read arcane documentation, search for sample code and manually integrate results into publishing systems. That’s bush league.

iAd Producer narrows the gap a bit.

The bigger question that I struggled with is whether web apps are competitive enough.