The Third Ecosystem

Microsoft needs Nokia to be what Samsung is for Android.

Nokia, Microsoft boosted by bullish Credit Suisse report on Windows Phone

Of particular interest, Garcha said that research among mobile operators indicates that they want Windows Phone to become the proverbial "third ecosystem" in a market that is increasingly dominated by Apple's and Google. "We found that 85 per cent of carrier respondents believe that there is a need for a third ecosystem, with 77 per cent noting that it will be Windows Phone/Nokia," Garcha wrote. "Our survey also showed that both subsidy and volume share is expected to be markedly higher for Windows Phone over the next 12 months." 

Windows 8 Storage Spaces

Virtualizing storage for scale, resiliency, and efficiency

Windows 8 provides a new capability called Storage Spaces enabling just that. In a nutshell, Storage Spaces allow:

  • Organization of physical disks into storage pools, which can be easily expanded by simply adding disks. These disks can be connected either through USB, SATA (Serial ATA), or SAS (Serial Attached SCSI). A storage pool can be composed of heterogeneous physical disks – different sized physical disks accessible via different storage interconnects.
  • Usage of virtual disks (also known as spaces), which behave just like physical disks for all purposes. However, spaces also have powerful new capabilities associated with them such as thin provisioning (more about that later), as well as resiliency to failures of underlying physical media.

Amazon: JP Morgan Rebuts Goldman; Sales Set to Beat

JP Morgan analyst Doug Anmuth this afternoon reiterates an overweight rating on shares of Amazon.com (AMZN) in what amounts to a direct response to the somewhat negative remarks this morning by Goldman Sachs’s Heather Bellini. 

Bellini had written that comScore’s estimate of 15% growth this quarter might mean Amazon’s sales would miss expectations if the company turned in only its average upside of 23 percentage points above the that overall growth figure. 

But Anmuth observes that Amazon’s outperformance relative to comScore data has been expanding this year, averaging 33 percentage points in the last three quarters. 

Anmuth believes that means Amazon could deliver at least 32 percentage  points of growth above comScore’s figure, turning in 47% growth. That would put Amazon’s total sales growth ahead of the 44% that Bellini cited as the consensus that Amazon has to beat. 

via blogs.barrons.com

Case of Analyst alignment?

Why Google paid $1 Billion for three years to Firefox

Kara Swisher: Google Will Pay Mozilla Almost $300M Per Year in Search Deal, Besting Microsoft and Yahoo

Google saw 11.7 Billion searches according to the November 2011 comScore Explicit Core Search Query Report. Firefox has 25% browser marketshare. If we assume that all 100% of Firefox users have Google set as the default search engine, that means 2.875 Billion searches on Google are coming from Firefox.

Revenue per search for Google was around $36.5 per 1000 searches in 2010 (http://www.thestreet.com/story/10839436/google-higher-search-market-share-expected.html). Assuming the same number for now and doing simple maths - for 2.875 Billion searches, it comes to 104.9 Million per month. So for the year, they are making $1.2 billion per year. $300 million as Traffic Acquisition Cost to Firefox is 25%, which is very low number when compared with large publishing partners or content networks.

I don't doubt the statement by Google Chrome Developer, Peter Kasting that Firefox is a partner. Both are making money, one more than other.

Windows Phone issues are two - Late entrant & Switching costs

Way too late.

Two to three years in the hole, the only way Windows Phone can win the market now is to make a product that is leaps and bounds better than what’s out there. They need something that’s an iPhone-in-2007 type product. The product they have, while good, isn’t that.

It’s not enough to be better. (And we can argue as to whether iOS or Android or Windows Phone is better.) You need to present a product so good that people have to buy it. Windows Phone isn’t close to being that. I’m sorry, but it’s just not.

And one other big reason for that is something else Kindel oddly downplays: apps. Even if you think Windows Phone is better than iOS or Android right now, you’re unlikely to buy it because all of your favorite apps are available on those competing platforms and very few are available for Windows Phone. 

via parislemon.com

MG Siegler responds to Charlie Kindel and nails it when he says that one of the key reasons Windows Phone has not done well is that it was late to the market.

iPhone has an First Mover advantage.

Early Mover or First Mover Advantage is the advantage gained by the initial occupant of a market segment. This advantage may stem from the fact that the first entrant can gain control of resources that followers may not be able to match.

FMA is the sometimes insurmountable advantage gained by the initial or “first-moving” significant occupant of a new market segment. This advantage may stem from the fact that the first entrant can gain control of resources that followers may not be able to match. Originally made apparent by the ever booming Internet phenomenon, it has recently been on the decline due to the recent economic situation. It is important to note that the first-mover advantage refers to the first significant company to move into a market, not merely the first company. In order for a company to try and become a first-mover that company needs to figure out if the overall rewards outweigh the beginning/underlying risks. Sometimes first-movers are rewarded with huge profit margins and a monopoly like status.

This gets complicated by Switching costs and buyer's choice under uncertainty also come into play when you have FMA.

Switching costs, late entrants must invest extra resources to attract customers away from the first-mover firm. Buyer choice under uncertainty, buyers may rationally stick with the first brand they encounter that performs the job satisfactorily. For individual customers benefits of finding a superior brand are seldom great enough to justify the additional search costs that must be incurred. Switching costs play a huge role in where, what, and why consumers buy what they buy. Users, over time, grow accustomed to a certain product and its functions, as well as the company that produces them products. Once a consumer is comfortable and set in their ways they apply a certain cost, which is usually fairly steep, to switching to other similar products.

Apple and Samsung's symbiotic relationship

Samsung turns out to be a particularly important supplier. It provides some of the phone's most important components: the flash memory that holds the phone's apps, music and operating software; the working memory, or DRAM; and the applications processor that makes the whole thing work. Together these account for 26% of the component cost of an iPhone.

This puts Samsung in the somewhat unusual position of supplying a significant proportion of one of its main rival's products, since Samsung also makes smartphones and tablet computers of its own. Apple is one of Samsung's largest customers, and Samsung is one of Apple's biggest suppliers. This is actually part of Samsung's business model: acting as a supplier of components for others gives it the scale to produce its own products more cheaply.

via economist.com

"Samsung's business model: acting as a supplier of components for others gives it the scale to produce its own products more cheaply". Thats Commensalism to an extent and time till Samsung becomes self-sufficient in terms of production, popularity, wide spread acceptance and marketing of its products. We will see this relationship turning to parasitic one at that time. Apple understands this and thus all the patent suits we see against Samsung.

Google Will Pay Mozilla Almost $300M Per Year in Search Deal

Earlier this week, Google and Mozilla said they had struck a deal to renew their search royalty agreement for another three years.

What the pair declined to add: The search giant will pay just under $300 million per year to be the default choice in Mozilla’s Firefox browser, a huge jump from its previous arrangement, due to competing interest from both Yahoo and Microsoft.

Sources said this total amount — just under $1 billion — was the minimum revenue guarantee for delivering search queries garnered from consumers using Firefox.

via allthingsd.com

Google in their 2010 Annual Report.

We expect our cost of revenues will increase in dollars and may increase as a percentage of revenues in future periods, primarily as a result of forecasted increases in traffic acquisition costs, data center costs, credit card and other transaction fees, content acquisition costs, and other costs. In particular, traffic acquisition costs as a percentage of advertising revenues may increase in the future if we are unable to continue to improve the monetization or generation of revenues from traffic on our websites and our Google Network members’ websites.

Ah, $300M TAC to Firefox retains the 25% browser market share for Google but it also shows that Google is finding it tough to monetize its traffic. Could Bing be the reason for such high TAC? Time will tell.

Take a chill pill guys

Talk of making a mountain of a mole hill.

To give some context, Frank Shaw, Head of Microsoft's Corporate Communications blogged this morning that Microsoft is ending its CES keynote role and will not have a booth starting 2013. CEA confirmed the same on their blog. NYTimes also chimed in and confirmed the same.

What then kicked a storm was a story by GigaOM, that said that Microsoft was booted out by CEA.

This keynote change of plan was initially covered as a Microsoft-initiated decision.

Statements from the Consumer Electronics Association subsequently recast the move as a mutual decision made amicably, as covered by The New York Times here.

But there’s more to it than that. Folks inside Microsoft said that it was the Consumer Electronics Association (CEA), the organization in charge of CES, that put the kibosh on future Microsoft keynotes and that Microsoft then pulled plans for its huge CES booth in response.

Said one company insider: “Microsoft didn’t pull out of the keynote — they were kicked out. Big difference.”

And what followed up was a string of blogs/sotries, taking up the GigaOM story and making a big deal of it. See Techmeme for more.

Here's the most funny and investigative journalism by MG Siegler who wrote a blog titled, Fuck Me? No. Fuck You.

Shaw wrote (and reiterates in the tweet) that it was Microsoft’s decision: “we have decided that this coming January will be our last keynote presentation and booth at CES.” But CES directly refutes this to NYT: “In an interview, Jason Oxman, senior vice president of industry affairs at the group, said it invited companies to deliver keynote speeches at the convention, not the other way around.”

Not the other way around. Come on, these guys are smiling in the front while they punch each other in the back. That’s why I asked Shaw for his candid thoughts. He’s usually a big fan of giving them over Twitter — especially when Google is involved. But perhaps he doesn’t want to totally destroy the relationship here.

Instead, both sides just want to make it clear in the most subtle way possible that they’re behind this decision. Or, to quote Mase (as one must in such situations): Fuck me? No. Fuck you.

It is funny to see that this becomes top story on Techmeme based on just one liner from an anonymous source in some story with no credible backup and you have people lined up to then sqabble over other sentences. Grow up guys, take a chill pill. There will be many other better reasons for you to bash up large corporations, swear on your favorites and get your audience. Let's not make a non-issue take the center stage and waste tech community's time.

2012 Marks Final CES Keynote for Microsoft

Our industry moves fast and changes faster. And so the way we communicate with our customers must change in equally speedy ways. To ensure it does, we constantly challenge our assumptions. For example:

· What’s the right time and place to make announcements?

· Are we adjusting to the changing dynamics of our customers?

· Are we doing something because it’s the right thing to do, or because “it’s the way we’ve always done it”?

After thinking about questions like these, we have decided that this coming January will be our last keynote presentation and booth at CES. We’ll continue to participate in CES as a great place to connect with partners and customers across the PC, phone and entertainment industries, but we won’t have a keynote or booth after this year because our product news milestones generally don’t align with the show’s January timing.

via blogs.technet.com

Makes sense in the light of Fran Shaw's comment that Microsoft's product news milestones don't align with January timing of CES. Also, as I see it, each product group have their own cycles and marketing teams. They won't want to wait till CES to announce/show something.

Samsung Hard Drives Now Belong to Seagate

Seagate Technology, a major maker of hard drives, said Tuesday that it had closed on the acquisition of the hard drive business of Samsung Electronics for $1.4 billion.

The merger, which was announced in April, is both a talent and product acquisition, Seagate said. The agreement gives Seagate select elements of Samsung’s hard drive business, including Samsung’s high-capacity M8 hard drives and semiconductors used to make solid-state drives, (known in the industry as S.S.D.’s). Some senior managers and design engineers of Samsung will join Seagate.

via bits.blogs.nytimes.com

M&A while good for corporations are bad for consumers, less competition = high prices and cases like this (Seagate and Western Digital cutting hard drive warranties in 2012).

iPad and physical toys

Another great use of iPad, physical toys to complement the controls/extensions on iPad.

iPads become child's play  

Crayola allows tots to doodle on the iPad using its iMarker just as they would a crayon on a coloring book. Tweens are able to belt out their favorite Miley Cyrus and Selena Gomez tunes on a Disney microphone that turns the tablet into a karaoke machine. And technology accessories company Griffin enables teens to fly its toy helicopter by using the iPhone as a remote control.

This holiday season, toy makers have turned Apple Inc.'s pricey tablet and smartphone into playthings for kids. They figure in this weak economy, parents will be willing to splurge on toys for their children that utilize devices they already have - or want - themselves.

Perpetual beta leads to less magical devices

[via Daring Fireball]

Matt Honan writing for Gizmodo - Siri Is Apple’s Broken Promise

A long time ago, I made a compact with Apple. "You can control my entire technological life, from my computer to my phone to my stereo. I'll pay premium prices. I'll dive into your product ecosystem, and buy books and music and movies and apps from you. Even though they won't work on devices made by anybody else."

In exchange for surrendering control and submitting to that heftier price tag, I expect Apple products to simply work. That's all. If you use Apple products, I suspect you made a similar bargain.

And so when I first saw the ads for Siri, I expected something remarkable, like I always do with Apple products. The first true consumer-grade AI. Can you imagine how amazing it would be to have a real intelligent assistant on your phone?

After playing with Siri for more than a month, I'm still waiting to find out. Instead of an intelligent assistant I found a lie, and worse, a broken promise.

...

I'm sorry. Beta? Beta is for Google. When Apple does a public beta, it usually keeps it out of the hands of the, you know, public. It typically makes you go get betas. It doesn't force them on you, much less advertise them. Not that it is an effective disclaimer for the vast buying public. For most people who see Apple's ads, and buy iPhones, the word beta means nothing at all. It might be a fish, or a college bro.

Well beta is for web services and not finished hardware. That would apply to any software which is core and running on that hardware. In a secretive world of Apple, we don't see half baked products. Doing that would make them less magical and take the gloss away from Apple CEO when he is ready to release them in an event where nobody knows what he going to talk about.

When O'Reilly talked of "Release Early and Release Often", he was talking of all things Web 2.0, the same principles does not apply to hardware. Knowledge@Wharton covered the issue with respect to Google and its foray into tablets sometime back.

Is Google Stuck in 'Perpetual Beta'?

But while this model of frequent product updating may work for desktop software, Werbach and others point out, applying the perpetual beta approach to hardware isn't easy. "On the web, the launch-and-iterate cycle can be short. If your code is buggy, you gather the feedback and you can fix it in a few hours or in some cases a few days," notes Kartik Hosanagar, an operations and information management professor at Wharton. "The damage done from buggy code is not too acute. With hardware, the cycle time of product development, production and finally distribution is too long. You cannot just fix the issue and release new hardware in a couple of months, let alone hours or days."

...

Experts at Wharton say the challenge for the company is navigating the two segments for its markets. One segment -- web services like Gmail -- can be tweaked over time. Google's Gmail was in beta for five years. When Gmail came out of beta in July 2009, Google acknowledged in a blog post that the beta tag would not suit everyone, such as "large enterprises that aren't keen to run their business on software that sounds like it's still in the trial phase."

But the other segment -- consumer electronics -- may require more software development rigor. "One has to separate the idea of on-going refinement from the notion of releasing a product before it's ready for prime time," says Karl Ulrich, an operations and information management professor at Wharton. "There is a trade-off between waiting too long for a perfect product and frustrating the user with a buggy product." When it comes to tablets, Google appears to be on the frustrating side of the equation for now. In the Bloomberg BusinessWeek article, Andy Rubin, head of Google's Android effort, acknowledged that design compromises were made to get Honeycomb to market as quickly as possible.

Hardware is much more challenging than online web applications, Whitehouse notes. "Google's mental framework is based around cloud computing. Hardware is different. Often, the device manufacturer is an external partner and your software is baked into the device. It's a whole new ballgame that puts more pressure on the software vendor to get it right the first time."

Windows Phone Marketplace passes 40,000 apps

Developers are taking serious notice of Windows Phone. Could this be because of Nokia phones or the ease of developing on Windows Phone platform?

Windows Phone Marketplace passes 40,000 apps

The Windows Phone Marketplace has now passed the 40,000 app and games submission mark. Content is being added at the rate of 165 items per day. In the last 30 days, 85% of submissions were apps and 15% were games; 68% were free, 23% were paid and 9% were paid with free trial. 

At the time of writing, 40,189 items have been published. Of these, 10,882 were added in the last 90 days and 4,770 were added in the last 30 days. These items come from 10,731 different publishers. 

... 

At the current growth rate, we estimate that Windows Phone Marketplace will reach the 50,000 app mark in the second or third week of January 2012. However, it is possible that this mark may be reached before the end of the year if submission rates accelerate.

Beautiful

A Sister’s Eulogy for Steve Jobs

Steve’s final words, hours earlier, were monosyllables, repeated three times. 

Before embarking, he’d looked at his sister Patty, then for a long time at his children, then at his life’s partner, Laurene, and then over their shoulders past them. 

Steve’s final words were:

OH WOW. OH WOW. OH WOW.

Pain using "free" web services

The World Is Surprisingly Angry About the End of Google Reader

The demise of Google Reader's share features is affecting everyone from RSS-junkies to Iranian freedom fighters, and many of them are very displeased. Google Reader itself is very much alive and well, and in fact, the RSS reader will soon sport a slick-looking redesign. However, at some point this week, the ability to follow, friend and share links within Reader will cease to exist, as Google pushes people to use Google+ for those kinds of things. Along with it, the myriad communities that depended on Reader for years for everything from meeting new people to organizing protests will just have to figure something else out. It turns out Google wasn't so bad at social networks, after all.

This is a persistent problem with web services and particularly which are supposedly free. You are at the mercy of the service provider and they can cut any feature, change the service behavior, promote their new service over the one you are using or just plain shut down the service. 

African Princess

Condoleezza Rice in her new memoir, "No Higher Honor".

When Condi Met Gaddafi

My upcoming trip gave me powerful leverage in these negotiations because Qaddafi desperately wanted me to visit Tripoli.

There were two reasons for this: one traditional and the other, well, a little disconcerting. Obviously, the first visit by a U.S. secretary of state since 1953 would be a major milestone on the country’s path to inter- national acceptability. But Qaddafi also had a slightly eerie fascination with me personally, asking visitors why his “African princess” wouldn’t visit him.

 

iPhone 4S Sales

I guess I was wrong, four million people found the iPhone 4 incremental release good to be bought and the hysteria points to an even better holiday season for iPhone 4S. iPhone 4 had sold 1.7 million in its first weekend. 

iPhone 4S First Weekend Sales Top Four Million

Apple® today announced it has sold over four million of its new iPhone® 4S, just three days after its launch on October 14.

Mac OS X Lion's Vista moments

Joe Wilcox - Mac OS X Lion drove me to Windows 7

Lion is the first Mac operating system that I don't like. Also, I find the hardware options, particularly the all-important display and resolution, to be much better from Windows PC manufacturers than Apple in the same price range.

Others will disagree, but I see in Lion many uncharacteristic user interface and file system changes that smack of Windows Vista. Priorities aren't all in the right place, compared to previous OS X releases, with changes made for Apple's benefit -- such as trying to unify many behaviors with iOS -- and increased complexity where simplicity should be priority.