December 2009 Archives

According to Flurry Media, Droid accounted for 48% of the download volume during the month of December. Motorola and Verizon executed on a $100 million marketing campaign resulting in Motorola over-achieving on their previous forecast of 600,000 units in the 4^th quarter. The device received good reviews in late October setting the stage for a big 4^th quarter push. Even though the music and video capabilities are lacking, the faster web browser and call quality make it the star in Android handsets. Motorola fully embraced Android and made some good design choices; including using the more powerful Arm Cortex A8 CPU. The same CPU in the iPhone 3GS and Palm Pre. The upcoming Google Nexus will be another HTC variant sporting better performance on web pages due to some tuning with Android 2.1 and the Snapdragon processor. Now we have to determine who is the better high-volume manufacturer, Motorola or HTC? Since HTC gains the benefit of multiple OEM relationships, they come down the learning cost curve much faster than a stand-alone Motorola. I would see the Nexus One come out with an initial high price, then rapidly decline during the Spring of 2010.

This afternoon the Wall Street Journal reported that ten privacy organization assisted by the Electronic Privacy Information Center (EPIC) have formally filed complaints with the Federal Trade Commission for Facebook's recent website changes to its privacy settings. The company spends a lot of time and money trying to mitigate government scrutiny and interference in its business. The problem here is Facebook has made "privacy" part of their business. The 350 million users of Facebook have a wide range of understanding and awareness regarding what the company does to both protect and stretch the end user's social graph as it relates to privacy. I voiced my opinion on other blogs that the average Facebook user would have difficulty understanding the privacy setting pop-up screen in the context of logging in to the system. While it did provide the option to reset the settings to those previously configured, the settings were altered during the conversion to allow search engine indexing until you went in to actively reset them. Your personal profile information and photos were set to "everyone" until you logged in to reset them. Not sure if the company has a strong consumer privacy advocate to balance the development and marketing organizations. 

Sprint's core postpaid business has been gradually shrinking as seen by a net loss of approximately 3 million customers during the first nine months of 2009. They have increasingly been focused on the prepaid market with recent success in their $50 monthly unlimited prepaid rate plan. Their subsidiary, Boost Mobile offers prepaid services to nearly 6 million customers in the United States. Their recent acquisition of Virgin Mobile this summer for $483 million provides Sprint another 5 million prepaid customers. Let's not forget their other 48 million subscribers. Sprint has about $20 billion in debt, 2.8 billion shares outstanding and with the recent price of $4.00/share; Google could pick up the company for a 25% premium. This would only be about $14 billion in Google stock with Google assuming their debt. At Google's share price, that's only 7% of their outstanding shares. (See Exxon's recent acquisition of XTO, all stock deal of $31 billion). Google would have the spectrum, WiMax/4G, and access to Sprint's R&D. This is the fastest way they can become a carrier. The open Android OS would still be available to other handset manufacturers and market acceptance would be a result of who creates the better user experience.

Is it real or a PR buzz generator for Google? The device is built by HTC and patterned after the HTC Passion but is reportedly thinner than the iPhone. Is this just a Passion running an alpha version of Android 2.1?  Google employees have been tweeting and showing off their new toy to their friends. This has generated a storm of speculation and controversy on the blogs both in favor and against Google selling their own hardware. Google has handed out developer phones before such as the unlocked G1 HTC Dream last year. In the U.S., if I buy this unlocked phone I can put in my AT&T or T-Mobile SIM card and get it to work. But I would be unhappy if it only supports EDGE speeds on the AT&T network! Unlocked phones occasionally suffer some technical disadvantages by not supporting advanced services and quite often ratchet down in connect speed. The Snapdragon chip from Qualcomm runs 30% faster and consumes less than 10 milliwatts in standby mode. This makes video scream, but I'd be concerned with getting the bandwidth I need with the carrier. You'll get free GPS voice navigation, Google Talk/Wave and QR (Quick Response) Tagging; making it a great advertising vehicle. Google's taking a play out of Apple's playbook. The innovator needs to have some level of control over both the hardware and the software of the device. The challenge will be in managing the market supply chain and technical ecosystem. They should target prepaid MVNO carriers who need a decent smartphone option thereby avoiding the potential backlash from paid subscription carriers.  I will probably add one to my utility belt in January.

In 2009, Google made great strides with Android with key cell phone makers such as HTC, Motorola and Samsung and high-volume Asian OEMs and ODMs. Because the OS only supports a limited number of processors and does not support the native C language, tool makers such as Mentor Graphics have begun to port Android to a variety of chip sets in an effort to overcome these limitations. This opens up a larger market beyond smartphones. Contract manufacturers supporting ARM or MIPS processor designs have a tremendous opportunity if Android penetrates consumer electronics. If this happens,  we could see Google Android powered large-screen TVs, Set-tops, GPS handhelds, automotive gadgets and MP3 players. Japan's Open Embedded Software Foundation already has 50 participating companies. If you know anything about "embedded" devices you know that market is several orders of magnitude larger the computer and communication device market.

Three-axis microelectromechanical system (MEMS)-based gyroscopes such as this one from Invensense are one step beyond the accelerometers found today in the iPhone, the PS3 and Wii. By invoking the Coriolis effect to track angular momentum, they have real-time awareness of their 3D orientation thereby allowing extremely accurate detection of human gestures. Next year I expect to see them added to GPS navigation systems for "dead reckoning" when a signal is lost indoors. Innovation in other mobile 3D chipsets, gaming accessories and software will drive usage in Remotes and useful in-air mice devices. With these small chips in wristbands, we could point like Sylar in Heroes to change HD channels or handwrite Tweets over the air.

Beyond the hype around cloud computing and its variants, there is growing acceptance of the notion that the buying criteria of end customers has moved from a discussion of how the technology chosen and provided to a discussion of what value the technology is providing. This provides the new frame of reference for customers and IT providers alike.  We are finally getting to fully connect the business objectives and requirements with IT services delivery. Given IBM's announcement today of a new data center in Auckland and a Cloud Computing application research center in Hong Kong, there is growing evidence that organizations are increasingly more interested in moving much of their data center operations to off-premise providers. When we set aside details such as massively scalable processing, virtualization, service orientation and always-on access; we have nothing short of a major evolution of business itself. The key will be in pricing strategies of such services because smart IT shops can always reverse engineer your cost structure for standard cloud platform offerings as they consider the option of "private clouds" (a term I utterly detest). IBM references "private clouds" as those configurations where customers have dedicated computing and resources for their own business. They are compute and infrastructure technology stacks, nothing more magical than that. The provider profit margin and value will result from their ability to optimize everything behind the service boundary while hiding complexity from the end customer. That is something worth paying for!