MNOs, fear not. Embedded SIMs will open up new markets and use cases, not destroy the operators
Traditional SIM technology has been around for nearly 25 years and the operators view them as a critical control point for customer ownership. Due to the risk of losing the M2M market to competing unlicensed LPWAN technologies (and pressure from strong handset vendors), MNOs are finally beginning to embrace more modern embedded SIM solutions.
Traditional SIM cards are not fit for purpose in the IoT market. There are several reasons for this. First, M2M devices are often embedded inside other machinery and very difficult to access. An industrial M2M player with 1000s of dispersed units can not send out staff to change malfunctioning SIM cards, or replace all SIM cards if a new MNO offers a better price plan. The second reason is that wearables in the consumer space are often too small to fit a SIM reader. Think waterproof smart watches or smart jewellery. Third, tablets and laptops that only occasionally require mobile connectivity will remain an untapped market for the operators as long as the user needs to find a suitable SIM card, fiddle with it, and activate/pay for a data plan that is rarely used (for example when travelling).
For the M2M market, the operator-led standard bodies GSMA and ETSI have already developed a technical architecture for reprogrammable SIMs (termed eUICC, “embedded UICC”). The eUICC is a secure hardware module that can be permanently soldered onto the circuit board. When an eUICC is manufactured, the eUICC issuer loads the master keys of the eUICC onto the hardware chip. The eUICC issuer can be an MNO or another stakeholder such as the device maker. In the eUICC hardware, one or more operator profiles can be stored (including IMSI number, network key, and other settings). The eUICC issuer will maintain a central Subscription Manager which is a database with all available operator profiles. This gives device owners the ability to swap between operator profiles as well as download new ones.
Embedded SIMs offer advantages for M2M device vendors. They can make their products smaller and better encased and it’s possible to manufacture products with a blank eUICC (no operator profiles) for worldwide delivery.
Embedded SIMs are already in place in the M2M market and strong handset vendors such as Apple want to introduce the same technology in the smartphone market. The traditional SIM card is a control point for the MNOs’ market power and so far they have been resistant to e-SIMs. But market forces are moving fast and the operators risk being sidelined if they don’t embrace this new technology.
There are already several ways for users to bypass the operators’ SIM. For example, dual SIM handsets offer a crude version of the e-SIM functionality. The most obvious way to avoid excessive roaming charges is to switch SIM cards when travelling abroad. An existing service similar to e-SIMs is offered by MVNOs who offer multi-IMSI SIM cards for international travellers. The MVNO stores IMSI numbers and operator profiles from a number of MNOs in different countries on its SIM card. The existing multi-IMSI SIMs are hard coded into the SIM card today, but once the eUICC standard is in place it will be possible to reprogram physical SIM cards as well. Examples of MVNOs using multi-IMSI cards are WorldSIM and Truphone. They offer full international multi-IMSI based connectivity with voice and data based on SIM cards. Transatel is both a multi-IMSI MVNO and a wholesale service provider (MVNE) for other MVNOs. GigSky and Cubic Telecom offer a similar international MVNO service for data only connectivity. Apple partnered with GigSky to sideline the operators in their Apple SIM offer for iPad.
There is nothing in the eUICC specification that prevents it from being used in handsets. As of March this year GSMA has a working group for eUICC in mobile consumer devices with backing from major operators such as AT&T, Deutsche Telekom (T-Mobile), Vodafone, Orange, and Telefónica. The technical architecture is anticipated for delivery by 2016. Apple and Samsung are said to be heavily involved in the project.
However, one of issues that remains to be solved is number portability. Today this is a cumbersome and mechanical process that can take up to a day, and risks leaving the phone number unreachable during the transition time. Number portability has to be instant for users to take full advantage of the ability to swap one operator profile for another in the eUICC on their smartphone. Number portability is implemented somewhat differently in different countries and a seamless global system requires extensive systems integration. The e-SIM specification from GSMA due next year will only define first generation e-SIMs, and my guess is that this issue will only partially be solved.
But even the first generation e-SIM specification will have far-reaching consequences across the value chain. MNOs will have to compete harder for customers. However, MNOs’ concerns that they will be marginalised and end up in a cut throat price competition over every phone call and data session are exaggerated. Several factors will prevent this end state. The price of typical phone calls today is so low that most users will find it too tedious to switch providers just to find the cheapest calls. The same goes for data, except when travelling abroad. Operators can still offer bundles, triple/quad plays, extras, loyalty points, subsidised handsets etc. to combat price only competition. Most consumers actually prefer a bundle with predictable costs. In addition, operators will save on the costs of distributing physical SIM cards.
A new potentially powerful player will be the eUICC issuer that controls the initial access to the e-SIM. Only operator profiles offered in the eUICC issuer’s Subscription Manager Database will be available to the users. And the issuer can control how available profiles are displayed and which operator gets to top the list.
Candidate eUICC issuers are device makers, MNOs or managed service providers. A handset maker that controls the e-SIM could restrict users’ access to available operators. This would squeeze profit margins for the operators who are lucky enough to be allowed access to the user base. If an e-SIM equipped handset offers a restricted choice compared to the older SIM card handsets, it will be viewed as a step backwards. Even for a very strong handset maker such as Apple it is far from obvious that it will be accepted by the consumers. Users will expect almost the same freedom to select operators of their choice as with a physical SIM card. An overly restrictive e-SIM will most likely be viewed as a strong negative factor. Before the e-SIM has reached maturity I expect smartphones to be equipped with both an e-SIM and a traditional SIM card slot.
In addition to consumer resistance, regulators will most likely mandate fair and open access for all operators to the eUICC issuers’ Subscription Manager. The fear that eUICCs will move all market power to the device makers is exaggerated. And there is nothing preventing MNOs from becoming eUICC issuers themselves for devices sold through their own retail channel. Subsidised handsets could also be equipped with an eUICC issued by the MNO (for the period after the operator lock-down).
Embedded SIMs based on eUICC is a critical enabler for the IoT and wearables market. But the interesting long term potential is that e-SIMs can reinvent the way we interact with our handsets and devices. Currently, if a user wants to change handsets to go to the gym or on a night out he/she will have to fiddle with the SIM card and physically move it. If the two devices don’t accept the same size SIM card it is even more complicated.
In a fully developed system with embedded SIMs, it will be possible to easily move the active phone/data connectivity from one device to another, including cars. Users will be able to have several devices for their varying needs and use cases. In addition, they could have several active subscriptions/phone numbers in the same device. They will also be able to split connectivity between different devices. For example, have text messages, IM, and notifications diverted directly to a non-tethered smartwatch while the full mobile connectivity stays with the smartphone. Or have certain notifications sent to a piece of smart jewellery or smart clothing. It will also be possible to have more than one phone number on the same device, have disposable phone numbers, and move the subscribed numbers between the user’s devices. This flexibility will of course also apply to all communication that doesn’t rely on a phone number (such as WebRTC, Skype, WhatsApp, etc.). Even devices without full mobile connectivity will probably be equipped with e-SIMs. For example laptops, tablets, and smart home hubs. And the hardware based security from the eUICC module will be an excellent enabler for payment platforms. In this scenario the full potential of mobility, connectivity, and IoT will be unleashed. One can only hope that the working groups at the GSMA will be forward-thinking enough to see this.
There are two fundamental flaws in the way Apple have positioned the $10,000 to $17,000 Apple Watch Edition. First, a luxury product that will be obsolete after one year contradicts the luxury market’s fundamental logic of permanence and long lasting value. Instead, the Apple Watch Edition risks being perceived as an ostentatious display of money today, and an embarrassingly outdated item after next year.
Second, the bling factor of the $17,000 Rose Gold Edition conflicts with Apple’s core brand values among its broad user base. Apple stand for cool 21st century modernity, elegant simplicity, and near affordability for the middle class. One of Apple’s most important user segments is the creative class in the advanced economies. They have a laid back, postmaterialist and slightly bohemian anti-establishment value system. Conspicuous consumption and a materialist 1980s style display of wealth is the antithesis of this socio-economic segment of the market.
Navigating the luxury brand market
Strong brands always stand for something and have a clear identity. They are a statement and are by definition limited in scope. It is difficult for brand owners to extend their brand into new product categories or market segments. The risk is that their core brand value will become diluted, or even worse, that their extension will destroy the original brand value. Despite their efforts to nurture and communicate their brand message, brand owners are not in control. A brand’s “brand” is the sum of the perception of the brand by all users, former users, and non-users. It is the consumers’ opinions that ultimately determine a brand’s value.
The luxury market has its own particular logic and it’s difficult for non-luxury brands to break in to this market segment. Luxury brands typically offer a combination of superior quality, high performance and features, superb services, brand mystique, and a compelling narrative of the brand’s pedigree and origins. They are produced in very small series and are often more or less handmade. They tend to be built upon emotional appeal and are imbued with a sense of exclusivity and sophistication. Luxury brands are strong and often controversial. They can be beloved by the target market but viewed as ridiculously overpriced and “out” in other socio-economic market segments. For many buyers of luxury products, the strong brand identity becomes a part of their own self-expression.
But the luxury market is not just driven by status-seeking and symbolic appeal. The majority of luxury products have superior functionality, very high performance, and a solid build quality that gives them a much longer life span than similar mainstream market products. The second hand value of most luxury products is quite high and can even appreciate over time. Permanence is a core value in this product category. For example, the watchmaker Patek Philippe’s advertising slogan is: “You never actually own a Patek Philippe, you merely look after it for the next generation.” De Beer’s slogan is “A diamond is Forever”. Paying an exorbitant price for a product with very high second hand value and a long life span is to some extent rational.
Luxury brands can be divided into two segments. One segment consists of well-known brands that are easily recognisable. For example: Rolls-Royce cars, Louis Vuitton handbags, Four Seasons Hotels, or Rolex watches. These brands enable the customers to display sophistication and wealth, and are in some sense aspirational brands. The other segment of the luxury market consists of smaller brands that are less well-known by the general population but highly regarded by the in-the-knows. The fact that so few people recognise these brands makes them even more exclusive for the connoisseurs. They are usually more expensive than well-known luxury brands and offer an even higher level of sophistication and exclusivity. In the game of social status, buyers who prefer this upper echelon of luxury brands tend to turn their noses up at those who buy well-known luxury brands. They view them as unsophisticated and solely interested in displaying their wealth. Interestingly, anti-establishment middle class consumers often share this disdain for what they consider to be the nouveau riche’s vulgar display of wealth. For example, the urban hipsters who happen to be one of Apple’s core customer segments.
Difficult for digital tech products to enter the luxury market
There are very few market-leading tech brands that have attempted to enter the luxury market. The fast pace of innovation and increased raw performance quickly renders last year’s top-of-the-line products obsolete. For consumers who easily can afford it, it is only natural to frequently replace their TV, computer, phone, etc. However, paying ten times the price for a “luxury computer” or “luxury mobile” that will be disposed of after a couple of years serves little purpose. Functionality and performance trump any potential symbolic luxury brand mystique. Even in the early 1990s when mobile phones cost $4,000 there were no luxury mobile phones. Functionality was the only thing that mattered during this phase of rapid technological development.
There exists a niche market for very expensive laptops from the major OEMs, but they can hardly be called luxury as the high price is based on the expensive high performance components that go into the machines. Sometimes these laptops are white labelled by luxury brands such as Ferrari or Bentley. There is also a microscopic market for bespoke laptops. For example, a MacBook Pro built into a new luxury case or covered with 24 karat gold. But there are no independent luxury laptop brands that produce better computers than the market leading OEMs.
However, some luxury technology products do exist. For example: audiophile sound equipment, watches, and cars. In these product categories, performance is dependent on craftsmanship, build quality, and analogue technology, which improve at a snail’s pace compared to microprocessor based products. As these products will not become obsolete after one year there is room for luxury brands in these categories. They will retain a high second hand value. Hence, buying these luxury products can almost be justified without resorting to emotional brand mystique.
Vertu – the exception to the rule
There are rare examples of luxury tech products, but they are mostly the exception to the rule. A few iPhones have been refitted in gold or platinum cases, covered with diamonds and sold with a six or seven figure price tag. However, the only luxury phone brand with any significant sales volume is Vertu. During its time as the worlds’ leading mobile phone maker, Nokia entered the luxury market with the subsidiary company “Vertu” in 1998.
Pre-smartphone mobiles had a slower technological trajectory and Vertu positioned itself with craftsmanship, style and service – not advanced phone functionality. Their phones are priced from $6,000 to $300,000. Vertu use materials such as titanium, gold, leather, buttons made of sapphires and rubies, sapphire displays, etc. The most expensive models are decorated with diamonds. They also offer a bundled luxury 24/7 concierge service for their customers, reachable via a dedicated button on the phone. But as a phone maker Vertu have not been competitive. The product release cycle of their flagship model “Signature” has been around a decade. They launched their first Android smartphone only in 2013. Before that Vertu could only offer feature phones.
Vertu could not compete in the smartphone market during the period of early rapid technological development (2007-2013). Only when technological development slowed down and matured was it possible for a luxury brand to enter the smartphone market.
The luxury phone market is a tiny niche market. Vertu have sold around 350,000 phones worldwide since their first model launched in 2002. They only made eight of their $310,000 “Signature Cobra” model. There is not much for mainstream tech players to take away from Vertu’s narrow business model. Are customers paying for the bundled concierge service, the brand mystique, or the device itself? Their main markets have been Asia, the Middle East and Russia, where cultural differences make an ostentatious display of wealth socially acceptable. A few celebrities have been spotted with Vertu phones, but they are regularly given free luxury products as promotion. Vertu have a strong brand message in their target market. However, this message will probably evoke an equally strong (albeit negative) reaction among the tech savvy urban middle class in advanced economies.
Brand owners can’t have it both ways. Their brands have to stand for something, and they can’t stand for mutually exclusive messages. Ostentatious Bling and Cool Advanced Technology do not make a good match. Apple are undermining the core values of their own brand by entering the bling market. The Apple Watch Edition is not even high quality bling. It’s just an overpriced, mass-produced Apple Watch made in gold that will lose most of its value next year. Apple’s current support program ends seven years after they stop producing a product. If they don’t make an exception for the Edition, Apple will officially declare the 2015 Edition obsolete in eight years and cease all service. Clearly, they have a lot to learn about what constitutes a luxury product.
The dilemma is that luxury products are built to last while the microprocessor based components in tech products rapidly become obsolete. Buyers who can afford the best will not settle for last year’s inferior technology. There may be a few oligarchs who want to flaunt their conspicuous consumption by buying a $17,000 Apple Watch Edition, well aware that they will dump it in a year for the Apple Watch 2.0. But for the rest of us such a purchase just seems irrational and pointless. In my opinion, the Apple Watch Edition has a negative brand value.
Imagine if Apple had released a $17,000 iPhone Edition in rose gold back in 2007. (The first iPhone was a 3.5 inch feature phone that came without the app store and without 3G connectivity.) What would the used price for that phone be today? Scrap metal value of less than $1,000? Compare that to the value development of a Rolex or a Hermès Birkin handbag bought in 2007.
How Apple could turn things around
The good news for Apple is that there is a way to improve the situation. In order to make the high price of the Edition more justified, Apple could offer buyers a premium membership scheme (including those who have already bought the Edition). All members would be offered the opportunity to upgrade their Edition Watch on release day for ten years for $999 per upgrade. They could send in their old Edition watch and Apple would transfer everything on the old watch to the latest Edition model and send it back to them (or perhaps swap the electronics inside). To sweeten the deal, Apple could also offer a guarantee that premium Edition members will be able to buy new iPhones as well as all other new Apple products on release day. This offer wouldn’t cost Apple much and would propel sales of the Edition because it removes rapid obsolescence from the equation. Owners of Edition watches would no longer be viewed as vulgar show-offs, but as people who made a somewhat rational decision by paying a premium for a ten year upgrade guarantee and access to new Apple products on release day.
A way for luxury brands to enter the IoT wearable space
The formula above could be the key to the future IoT market for luxury smart wearables. Many luxury brands are eager to enter this market. Smart luxury earrings, necklaces, rings, pendants, brooches, sunglasses, pens, or watches could be sold with an upgrade guarantee.
An ultra-expensive price for the initial purchase would preserve the luxury product’s mystique and exclusivity. Each time the luxury brand releases a hardware upgrade, they could offer to swap the electronics and battery inside the product for a minor upgrade fee. If the product can’t be disassembled, users would be allowed to return their original product and have it replaced by the latest model for a replacement fee. This would tie the customers closer to the brand and generate ongoing cash flow in the form of upgrades. It would also ensure that obsolete products are removed from the market instead of being sold for embarrassingly low prices on eBay.
I am redesigning my blog by removing the Swedish version of the blog and the dual-language plugin WPML. My intention is to make my older Swedish blog posts accessible in an archive but for now they are invisible. (Due to an upgrade of the server side PHP version, a bug has appeared that doubles the words “Categories” and “Archives” in the right sidebar.)
These days, setting up an MVNO is easier than ever. You don’t need to know anything about mobile to become a MVNO player. Nearly all operations can be handled by managed service providers (MVNEs) and the initial Capex is in the range of £500k, but could possibly be as low as £25k. Low barriers to entry increase competition and put pricing pressure on incumbent operators. Surely this must be a good thing, right? Not so fast.
Well-known and established MVNOs in the UK such as Tesco Mobile, GiffGaff, Virgin Mobile, Talkmobile, Asda Mobile, Lebara, TalkTalk Mobile, and Utility Warehouse offer service on par with the network providers themselves.
However, there are also a large number of smaller more obscure MVNOs. How many people have heard of White Mobile, Delight Mobile, Vizz Africa, Vectone Mobile, tello, Now Payg, Talk Home Mobile, The People’s Operator, Ovivo Mobile, Lyca Mobile, or Econet Mobile?
These MVNOs sometimes have appallingly bad service. A while ago I tried Lyca Mobile. I didn’t expect much, but I did assume that “mobile” was a mature standardised product (voice, voicemail, SMS, MMS, data). How wrong I was. Voicemail didn’t work, I couldn’t call some numbers and operators, there were texts that didn’t go through, and MMS wasn’t included in the service. When I called the Swedish railway information number, Lyca Mobile charged me almost £10 for a six second call. They claimed it was a premium number. It wasn’t, and their tariff chart didn’t include anything about this exorbitant rate. Their customer service consisted of script reading from call centres in India, and whenever I deviated from their script they immediately hung up.
I have read reviews of some of the other smaller MVNOs and it was easy to find similar complaints. Talk Home Mobile seems to have a billing system that grossly overcharges and eats away the minutes in your allowance very quickly (here). Users of Vectone report myriad problems (here, here, and here).
Last year all 50,000 users of Ovivo Mobile were left stranded when the service suddenly shut down. Ovivo had stopped paying for network access and Vodafone cut the cables. It was pure luck that Ovivo was gracious enough to give users their PAC-codes so they could keep their mobile numbers.
Mobile is an essential basic service and it is unacceptable that consumers risk losing their access, prepaid minutes, voicemails, and phones number if a shady MVNO ceases to operate. Consumers should also be able to trust the accuracy of the operators’ billing systems. A plethora of small unstable shady MVNOs will not “increase competition” but rather scare consumers away from competitive new market entrants. Only the incumbents will benefit from this.
Consumers who sign up for a mobile plan with an MVNO can not be expected to make their own risk assessment of the bankruptcy and fraud risk. Nor can they be expected to know that they might lose their phone number if the service provider suddenly ceases to operate. And consumers who suspect foul play with the billing system should not have to take on an MVNO themselves in the courts.
In my opinion, this is the responsibility of Ofcom, who should tighten the regulatory framework. For example, Ofcom could act as mystery shopper. They could buy SIM cards from all the operators, and then run diagnostic calls/texts/data generated by software. This would enable Ofcom to evaluate the accuracy of the billing systems and check that all number series are reachable. Network operators who don’t get paid should probably not be allowed to disconnect a MVNO, but should instead be given the power to temporarily take control of the MVNO. All tariffs should be available on the websites in a clear format. The charges that are most likely to impact the user’s bill should be easily accessible. MVNOs should not be allowed to hide extreme out-of-bundle charges in the fine print. And if an operator doesn’t offer something that users expect in a basic mobile service (for example SMS or voicemail), it should be clearly stated from the start.
If the MVNO market continues to operate like the Wild West, sooner or later real scammers will spot this opportunity. They can set up a legit MVNO and run it for a year to build a brand, gain a customer base and be included in price comparison sites. Then they will lower their prices and start an aggressive ad campaign. For example by offering attractive pre-paid 6 and 12 month pay-as-you-go plans. After a while they will change their terms of service and tariffs and introduce sky high out-of-bundle rates, stop paying their network operator and other vendors, offer the latest iPhone on sale, and remove themselves from the company directorships. And while they’re at it, they’ll probably overcharge all direct debits before they go bankrupt.
Let’s hope that this scenario never plays out as it would damage all MVNO’s credibility and make it even more difficult for new market entrants to compete with the incumbent network providers.
P.S. I recently left O2’s network for EE’s. O2 had the best network back in 2012 but their service has gradually deteriorated, at least in the south east of England (confirmed by Which? and Open Signals coverage/QoS maps). This congestion is most likely caused by an unwillingness to invest in more network capacity by the cash strapped owner Telefonica. As Telefonica have been trying to sell O2 UK for some time, they probably don’t want to put any more money into their UK network. This is a risky strategy if and when consumers begin to take notice. Even if a sale of O2 were to take place tomorrow, it would take several months before everything was finalised with new owners in control. I expect even further deterioration of customer satisfaction and QoS for O2 and all the MVNOs that run on their network. It could take up to a year for O2’s network to improve.
According to Open Signals, EE has better network capacity in the South East, which was very obvious when I switched. However, EE is at the bottom in the Which? customer satisfaction survey and they are one of the the worst major operators in Ofcom’s complaint league. As I didn’t want to be an EE customer directly, I chose one of the MVNOs that run on EE’s network. So far, so good.
The Snowden leak is a game changer. User angst over privacy and anonymity is at an all time high. 61% of US net users want to do more to protect their privacy.
It takes time for consumers and market players to absorb the full impact of game-changing events such as the Snowden leak. When the news broke in June of last year, the first Pew poll showed that 56% of Americans found NSA’s mass surveillance acceptable. After more than a year of drip-fed additional revelations from Snowden’s enormous data material, people have begun to realise the full extent of the security state’s spying. A Pew poll from June this year found that support for NSAs spying had fallen to 42% and 74% thought Americans should not have to sacrifice privacy for safety from terrorism. Another Pew poll found that 86% of US Internet users have taken steps online to remove their digital footprint. A Harris poll from March 2014 showed that 47% of US users have changed their online behaviour after the NSA revelations. 26% said they are doing less online banking and online shopping, and in the 18-34 age group the figure is 33%. A new study from Pew last week shows that awareness and concern are rising even more among Americans. 90% of the respondents agreed that users have no control over their online information and 80% are concerned about the way advertisers take advantage of information on social media. 87% had heard something about government surveillance and only 36% of users support the government’s online snooping. Most important of all, 61% of users said they wanted to do more to protect their privacy. These negative sentiments are most likely even more pronounced outside the US. In another survey of 10,000 people in nine countries from April by ComputerWeekly, 75% expressed concern about their privacy online.
Awareness is the first step, the next is taking action. Once users begin to educate themselves they will realise that the potential for intrusions is much greater than they initially thought. As a test, I spent a few hours educating myself about privacy and anonymity for browsing with Firefox on a PC. This is what I found:
Basic advice about anti-virus programs, firewalls, avoiding obvious passwords, and deleting cookies is far from enough.
The most intrusive tracking and surveillance is done by advertisers and analytics firms. Government surveillance is ubiquitous yet invisible to the average user in most cases. However, advertisers’ tracking is actually quite obvious. We know that advertisers can easily create an approximate profile of where you live, your gender, age, interests and income. They can even match your real name and address with your browser surfing patterns if you fill in your customer data on a website that sells this information to the tracking companies. Considering all the revelations from the Snowden leak, it would be reasonable for users to also suspect that the government surveillance agencies are buying advertisers’ tracking profiles.
Deleting cookies is not enough. There are supercookies in Flash (LSO) and in HTML5 there is a cookie-like function called web storage (DOM). These can be blocked by installing the Better Privacy plugin in your browser.
Another privacy browser plugin is Ghostery which blocks trackers. The HTTPS Everywhere plugin forces encryption between the browser and server when possible. The NoScript plugin provides protection from malicious scripts on untrusted websites. NoScript blocks all untrusted scripts and gives the user full control over enabling or disabling each script. For every visited webpage, NoScript provides a list of all scripts used on that page. However, the best plugin of all is Adblock Plus which blocks almost all ads. Adblock Plus has over 300 million downloads.
Enabling all these plugins will reduce the browsing experience on some websites and can slow down Firefox. For example, if NoScript is installed, users will have to open the list of scripts manually to enable them. This can be an inconvenience. On the other hand, webpages often load faster, in particular if all ads are blocked with Adblock.
Webpages load even faster if Flash is disabled. Flash is potentially a huge security hole and a common recommendation is to disable Flash in the browser and only enable it temporarily when really needed.
An additional security measure is to use a VPN. Subscribing to a VPN will hide your IP address. A VPN creates an encrypted tunnel from your computer to one of the VPN provider’s servers, where your surfing traffic will enter the open internet. The servers can be located in another country, which enables users to stream TV or video that is normally blocked for users from other countries (for example BBC and Netflix USA).
Selecting the best antivirus program and firewall is also important. Bitdefender gets top test results, but aggressive antivirus programs can sometimes slow down the computer.
When it comes to search engines, users can reject Google in favour of DuckDuckGo or Startpage, which do not track users’ search patterns.
Many cybersecurity experts even recommend putting a piece of black tape over the webcam in order to prevent it from being used as a spying device. For those who want to achieve an even higher level of privacy and security there are more challenges, such as avoiding browser fingerprinting and WiFi security breaches. For the advanced user there are additional technologies such as TOR, Bitcoin, Tails, IceDragon, Ubuntu/Virtualbox, PGP, Protonmail, Comodo, and Online Armor.
It is unlikely that mainstream consumers will utilise all of these security measures, but installing the browser plugins is fairly easy and there are “How To” guides that explain how it’s done. Once in place, these users are a permanent loss for the advertisers. And it will be the active, well educated, high-income users who go first; the most valuable targets for advertisers.
When the mainstream market begins to embrace anonymity and encryption the effects will be wide-reaching. Ad-financed websites and advertising networks will be hit first. Social media sites where real names are used such as Facebook are also at risk.
Users will probably also be increasingly suspicious of cloud service providers such as Dropbox. Not for intrusive advertisers but for NSA spying on stored data and the risk of hacked accounts. Companies that have dumped their own IT infrastructure and moved everything to the cloud will also have a hard time proving that their customers’ data is secure and has not been scooped up by the NSA somewhere inside the cloud.
But this development is also a business opportunity for cybersecurity providers, anonymisers and VPN providers. For example, Protonmail is a startup offering encrypted email. The company and servers are located in Switzerland, which has very strict laws regarding data protection. All stored emails are encrypted before leaving the customer’s computer and Protonmail does not have the decryption keys.
Another example is SpiderOak, a competitor to Dropbox that offers cloud backup. Encryption makes it impossible even for SpiderOak’s own staff to view their customers’ data. For Android smartphones there is the app Redphone for encrypted voice calls. TextSecure is an app for encrypted messaging for iOS and Android. Silentcircle offers a suite of services for encrypted communication.
Yet another indicator of the strength of this trend is the rapidly growing demand for NSA-secured cryptophones. Several small companies have developed bespoke smartphones, often based on hardened versions of Android. With prices up to $3,500, they are becoming the new status symbols for business executives. Some of the brands are: GSMK Cryptophone, Blackphone, Teopad, Hoox m2, In Confidence, and Secusmart.
And the smartphone giants Apple and Google are also offering better encryption to protect their users’ privacy and security. iPhone 6 and iOS8 have integrated new encryption on the devices which Apple can’t bypass even if they are required to do so by the authorities. Google is working on a similar solution for the new Android 5.0 release Lollipop.
It is unclear how far the various segments of the user base will go in order to protect their anonymity and privacy. But this trend has the potential to be very disruptive, even if only 40% of users take action. Ignore it at your own risk.
Here is a compilation of links to my previous blog posts about product and service design. My view is that successful design has to build on the user’s context and micro-situation. One needs to put oneself in the user’s shoes and really understand his or her situation, pre-understanding, and purpose for using the product or service. Failure to design from the user’s perspective can mean the difference between failure and success.
For example, despite super glossy PC screens looking vibrant and stunning in the store, the reflections and intense brightness cause eyestrain with prolonged usage.
Another example is the megapixel race for cameras. A sensor with too many megapixels is pointless as the cheap lens in a smartphone or cheap digital camera will be the limiting factor. In addition, a high megapixel sensor is less sensitive to low light conditions compared to a lens with a more modest pixel count. Where are most smartphone pictures taken – outdoors in bright sunlight or indoors? Again, technology-driven vendors ignore the user context.
Design is important even for something as basic as mobile voicemail. If someone calls your mobile and you don’t answer, the call is forwarded to your voicemail after a few rings. Last time I checked (in Sweden), no operator offered more than 30 seconds before the call was forwarded. There are a number of situations where 30 seconds is simply too short. As a consumer, I want the option to set it to 45, 60 or 90 seconds. Again, a design decision that doesn’t take the user’s context into account.
We all know that digital is massively invading and disrupting all industries. One indicator of this development is that part of the mainstream advertising industry finally seems to be embracing digital.
The “ad” industry is not just the creative part. It is also comprised of PR-firms, market researchers, insight, database marketers, and specialists in digital and lifestyle trends. The major players in the industry (WPP, Omnicom, Publicis Groupe, and IPG) are conglomerate holding companies with investments in all parts of the industry. It seems that these players are beginning to put the pieces together around digital.
They give away quite a lot of their research for free. Here are some free information sources that could be useful for us industry analysts and Zeitgeist watchers:
JWT Intelligence has quite a lot of free material, both trend forecasting and digital material. Some additional reports can be found on JWT Worldwide.
Trendwatching is an independent firm focusing on innovations, digital, and consumer trends. They have a global network of 3,000 freelance trendspotters. A competitor with a similar business model is Springwise, which focuses on innovation and discovering new business models in the B2C space. Another competitor is The Futures Company, though they are slightly less focused on digital.
Havas Media has reports about global media trends as well as material about digital marketing.
The largest conglomerate, WPP also provides free reports and articles from their portfolio companies. Some are about digital. The competing holding company InterPublic Group (IPG) has a compilation of free reports and blogs from their portfolio companies, though not much about digital.
One impression from quickly browsing through these sources is how digital has enabled and unleashed innovation all over the world. Here are a few examples (from Trendwatching’s service):
A Fiat car showroom in Brazil has equipped its staff with head-mounted video cameras. Customers can contact the showroom and the sales rep can walk around the car, open the hood, get in the car – all while talking to the customer and filming the car.
Pizza Hut in Panama has delivery scooters with small ovens built in. Their customers receive piping hot pizzas straight from the oven on the scooter.
Volvo has developed a Roam Delivery mobile app that makes it possible to use their cars as a delivery destination for couriers. Using the app, Volvo owners can give the courier the exact GPS position and temporary electronic key to the car.
The BFF Timeout app encourages Filipinos to focus on each other, rather than on their phones. Once all individuals in a group have opened the app together (sponsored by McDonalds and Coca Cola), the timeout begins and points are earned for every moment all phones are left alone.
Africa’s own startups have lofty continent-wide ambitions. Jovago is a hotel booking service from Nigeria, Oju from Mauritius launched African emojis for smartphones, the supermarket chain Choppies Enterprise is from Botswana, Nigerian Jumia is the Amazon of Africa, and Africa’s Netflix is the Nigerian startup iROKO. All of these companies are now expanding into neighbouring countries.
Dutch train operators Prorail and NS plan to roll out platform-length LED displays that provide real-time information to passengers. A 180 meter LED strip shows information on carriage crowdedness gathered from infrared sensors inside the carriages, as well as information on where carriage doors will open and the location of quiet carriages in the train.
French shopping center specialist Klépierre has developed an “Inspiration Corridor” equipped with large touchscreens on the walls. Sensors in the corridor analyse a shopper’s age, gender and apparel. The walls are then filled with personalized shopping suggestions. Tapping on the touchscreen sends directions to the customer’s mobile.
Some of all these digital innovations are of limited value, some are just silly, but some are brilliant. Tinkering, creating, and innovation takes place everywhere – not just in Silicon Valley, Manhattan, Tokyo, Shanghai, and London. The technology platforms and infrastructure are in place around the world and the barriers to further innovation are lower than ever.
Tomi Ahonen has just released his Rest of Decade forecast for the smartphone and PC market. His prediction is that all phones sold will be smartphones by 2018/2019 and that the low-end dumbphone market will cease to exist. Android will be the dominant platform and the PC market will remain almost flat, though within the PC segment, tablets will almost completely replace traditional PCs, holding a 77% market share by 2020. (Ahonen defines a tablet as an ultraportable PC, not a large smartphone. I agree. A tablet can’t be used with one hand while walking down the street. And you can’t put a tablet in your pocket.)
According to Ahonen, as the smartphone market rapidly expands into the price sensitive mass market, Apple/iOS will lose market share and be relegated to a very profitable high end niche player with an 8% market share by 2020. Looking at the entire computer market (PCs, tablets, smartphones) Apple/iOS will manage to keep an 11% market share by 2020, well ahead of Microsoft, which will hold a meagre 6% market share. The smaller platforms; Blackberry, Tizen, Firefox, Windows Phone, etc. will hover around 1% each if they are not almost completely wiped out.
It is hard to argue against Ahonen’s arguments and excellent track record as a forecaster. However, it is worth commenting on a few things.
In my opinion, the forecast for the decline of the traditional keyboard based laptop/desktop PC is overly pessimistic. Ahonen’s forecast is that PC sales will drop to just above a third of the 2013 sales volume (from 315 million units to 130 million). For trained knowledge workers, input via the mouse and a fully equipped keyboard is still much faster than a tablet for extended sessions of concentrated work. In addition, tablets have some significant ergonomic UX/UI problems if used for office work. A tablet placed horizontally on an office desk will catch glare from ceiling lights and give the user “iPad neck” from bending down. A vertically placed tablet in a stand will strain the arms every time the user touches the screen. No one wants to lift their arms and touch a vertical screen in front of them every 30 seconds for eight hours.
Another issue worth commenting on is the market share predictions for Google/Android and Apple/iOS. Even though Android is free and open source, the bundled Google Play is not. Google have moved most of the goodies (features and APIs) from Android into Google Play, where they exert tight control. Any device maker or operator that wants to use Android without Google’s presence will have to kick out Google Play and recreate all this functionality. Device makers are also prohibited from working on Android forks if they want access to Google’s closed source apps and APIs. They will be left with the “naked Android”. In addition, the app developer ecosystem is dependent on the APIs in Google Play.
This is of course in Android’s favour in the short run. However, as the Android platform matures and Google’s behemoth-ness increases, it is possible that another major player will fork Android and start a competing but very similar platform to get rid of Google’s tracking and analytics in their products. Perhaps by supplying a cross-platform tool that will make it possible for Android apps to easily be ported. The likelihood for such a fork has increased in the aftermath of the Snowden leak. Foreign governments will suspect that the NSA has demanded backdoor access to Google’s user tracking and/or Google Play.
Considering that entire populations will soon be smartphone users and that smartphones are an unprecedented spying device (cam, mic, location, call logs, surf patterns, banking, passwords, etc.), foreign governments will most likely find it unacceptable that the US government has backdoors into this data – and that they don’t. For example, from a Chinese perspective, government support of an Android fork will both be sound industrial policy and a way to replace US/Google control and possibly create a viable domestic player that can compete on the global market. (China has already done this but the existing Chinese Android fork is old and not compatible with the global ecosystem of Android apps.)
My point is that Ahonen’s prediction for Android dominance (89% market share in 2020) underestimates the effects of strategic countermoves from other players that view this development as a threat. When one player becomes too strong the entire industry will unite against it. Of course Android will be a dominant platform but the uncertainty is larger than what Ahonen seems to take into consideration.
I am also somewhat puzzled over the forecasts for Apple/iOS. Ahonen has a rather compelling argument for Apple as a niche player. If Apple introduces much cheaper low-end smartphones, they will reach new market segments but they will also hurt the sales of their own high-margin premium models. Apple will most likely prefer to keep stellar profit margins and remain a leader in the premium segment than compete on volume. This makes sense. The size of the global smartphone market is so large that even if you only have a 10% market share, that is enough to reap the economics of scale. And the developer ecosystem and app universe for iOS is already in place and is as strong as for Android.
But if and when the smartphone market really matures, it is possible that Apple will find itself embattled even in its core premium market in rich countries. If customers are unwilling to pay Apple’s premium prices and market shares fall, I think Apple will switch over to plan B. They can easily cut their prices and introduce low end models and go for volume instead of profit margins. In that case, Apple/iOS will end up with a significantly larger market share in 2020 than Ahonen’s forecast of 8% – perhaps 15%. The paradox is that this bad news for Apple will actually translate into a larger market share. Ahonen’s forecast is that it won’t happen before 2020. I think there is around a 40% probability that it might.
Few people in the tech sector care about landline voice these days but for landline operators it’s still a significant (though declining) cash cow, and will be for years to come. Mismanaging this service could provoke a customer stampede away from landline voice. If BT and the other UK landline service providers can’t stop the deluge of nuisance calls that have flooded British customers over the last few years, the scammers and spammers will effectively and swiftly kill this business area for BT et al. (This is the downside of English being a global language. There are no Swedish or Finnish speaking call centre operators in India.)
A survey by consumer watchdog Which? found that 70 percent of respondents had received unwanted calls. In their comments fields, many Which? members reported being bombarded by several calls every day, and sometimes even in the wee hours of the morning. There are silent calls, robocalls, calls to people’s work numbers, there are scams about a legal settlement of repaying credit card fees, calls selling shady PPIs, calls about selling protection against unwanted calls, fake market research calls that morph into sales calls, there are calls about double glass windows, fake calls from “Microsoft support” where they want to access your PC, and on and on and on. Asking to be removed from the call lists rarely helps, they continue to call regardless. Some spam callers hang up immediately if you deviate from the caller’s script. Based on the accent, many calls seem to originate from Far East call centers. Many users reported that adding their numbers to the TPS list that rejects telemarketing calls was of little help.
This deluge of nuisance calls is forcing people to change their usage patterns. The older generation is still stuck with the idea that the telephone has to be answered if it rings while the younger generation gladly ignores unknown callers. But even the older generation will be forced to change their habits due to this problem.
Users are also trying to defend themselves with countermeasures. There are answering machines and phones with integrated “Nuisance Call Blocking” functionality (CPR Callblocker, Trucall, BT6500). They use the caller ID and block known nuisance calls. Typically they block all international calls, “unavailable” and “withheld” calls in addition to a blacklist of numbers for known call centers.
The problem for BT & Co. is that these counter measures undermine the landline voice business. Blocking all unlisted and international calls will make it harder for friends and family to reach you on the landline and it also blocks SkypeOut calls. Asking your service provider for a new number that has never been used will leave your contacts stranded unless you manually provide them with the new number. Blocking your own caller ID for outgoing calls makes you a “suspicious caller” and your friends and family might not want to answer. Using an answering machine to screen calls is inconvenient. And once anonymous call blocking becomes widespread, the spammers and scammers will most likely find ways around this, for example by spoofing Caller IDs.
One of the angry Which? members had taken the drastic measure of paying extra to add a premium 0871 number to his landline which he always gave to companies and other untrusted parties. This stopped most of the spam callers and if anyone called they would have to pay for the privilege of talking to this user. He actually made some money on this. But for most users, cancelling their landline subscription probably makes more sense.
Spam has ruined email as the dominant form of e-communication. Nuisance and scam calls will most likely be the final nail in the coffin for traditional landline voice. BT (and the other landline operators) should make it a top priority to stop spam calls. BT should lobby for tougher laws with severe fines for companies that profit from nuisance calling. Fraud is a crime in India as well as in the UK, and British law enforcement should cooperate with its Indian counterparts to bring high profiles cases against Indian “telemarketers” that defraud British customers. The recent £90k fine against a company in Glasgow is a first step but BT should urge law enforcement to be more vigilant.
BT’s first step should be to stop selling wholesale termination minutes without a requirement that the buyers use caller ID and that they comply with some form of Terms of Service (are there any TOS for wholesale customers?). BT should also upgrade security in its technical infrastructure. Another flaw is that the British landline network can only display 11 digits in the caller ID, which means that most international numbers can not be displayed. (Mobile networks display international caller IDs without any problem.) BT should upgrade their network and enable longer caller IDs. They should also look into regular QoS issues such as sound volume. Calls on a regular UK landline vary widely in quality. Quite often, the volume is so low that it is almost impossible to hear the other party.
Few pundits and analysts in the telco sector bother to look at landline voice. It is viewed as a boring dinosaur legacy business. That is a mistake (even though it’s true that it’s a boring, declining cash cow). For the landline operators, the speed of the decline of landline voice is a matter of billions in cash flow over its remaining lifetime. Nonchalance about nuisance calls could swiftly put an end to these operators’ business. They should heed the warning.
Update: On 18 April, Ofcom fined TalkTalk £750,000 for making an excessive number of abandoned and silent telemarketing calls. Things are moving in the right direction.
Why force users to upgrade from XP or into Windows 8? They
might as well migrate away from Microsoft altogether.
While the mobile platform race garners the most attention these days, the fate of the legacy PC ecosystem is crucial for one company: Microsoft. How they play their cards will have repercussions for the entire tech sector.
Microsoft has long profited from being a de facto monopolist with a huge user base locked into their ecosystem. Their upgrade cycles with a new OS every few years have kept up their revenue streams. The inherent flaws and instabilities in the Windows platform have usually made upgrades worthwhile as each new OS (3.1, 95, 98, NT, ME, 2000, XP, Vista, 7) has been an improvement over an even worse performing predecessor.
To push the user base forward to the next platform, Microsoft has left the legacy user base stranded. Support for new hardware and APIs has not been added to a legacy OS. Support and security patch services have had an end date. The ever increasing hardware performances has provided additional incentives for users to upgrade with new machines. This strategy was a breeze from Windows 95 to Windows 7, but now the engine is about to break down.
Hardware performance of the aging PC platform is now adequate enough for most users. These days there is less of a compelling need to upgrade a four year old PC. But the major threat to Microsoft is the risk of pushing users away from the Windows ecosystem by forced upgrades. Microsoft may be about to make a serious blunder on both ends of their product pipeline.
On April 8, 2014 Microsoft will stop supporting Windows XP with updates and new security patches. XP’s market share is falling but it still has a 24 percent market share of the global market as of January 2013. Even if the user base is less than 10 percent next year when Microsoft terminates XP, we are talking about 50 to 100 million users. Microsoft’s reckless termination of Windows XP could wreak havoc and damage the company’s reputation. Malware hackers and criminals will keep newly discovered security holes to themselves and will wait to unleash them until April 9th next year, when they know that Microsoft will no longer provide patches. It would seem that Microsoft’s corporate DNA is still stuck in the mindset of the arrogant monopolist from the 1990s and that they take for granted that this abandoned user base will stay with the Windows platform no matter what.
To add insult to injury, Microsoft is not only planning to leave legacy XP users stranded but the upgrade from Windows 7 to Windows 8 is a discontinuity that will force users to rethink whether they should stay with the Windows platform at all. Win8 represents a radical departure from the traditional Windows UX/UI with a steep learning curve. Windows 8 is adapted for touch screens. Bravo. But the hybrid touch/traditional UI/UX is a step backward for users that want to work in the way they are used to. It will slow down productivity for the billion users who are accustomed to the mouse, cursor and keyboard paradigm. Users have accumulated a 15 year learning curve speeding up their mouse, eye, keyboard, screen and motor skills. Throwing this human investment away would be madness. Touch screens are a significant technological innovation with disruptive potential. But if you are an office worker that spends 8 hours a day manipulating the same corporate applications in front of a screen, a touch screen is hardly an improvement. With a touch screen, users have to constantly move their arms and if the display is vertical it means lifting your arms in a way that will be physically exhausting after less than an hour. The slowdown in office productivity due to bad ergonomics and forced relearning could be significant, though I think corporate IT-managers will be aware of these drawbacks and keep Win8 out.
Microsoft needs a strategy to defend their installed base at any cost
Microsoft seems to be oblivious to their weakened strategic position. Compared to 2003, users today have a plethora of alternatives (Apple/IOS, web/HTML5, cloud apps, SaaS, Android, Ubuntu, etc.). The lock in to Windows is not as strong as during the prime PC era. The huge legacy of corporate systems makes Windows sticky but the ease of developing new apps will eat away at this exit barrier. The cost and time of developing complex apps has fallen by a factor of magnitude over a decade.
Microsoft wants to push their entire user base to one platform (their latest). But considering the risk that Windows 8 might be a failure they need to rethink. By signaling that older platforms are to be phased out they are actually encouraging skeptical users to look elsewhere if they don’t like Microsoft’s upgrade cycle.
Here is what Microsoft should do:
Develop a major upgrade for Windows XP with some of the more modern security features included. Announce this upgrade (“Windows XP II”) in Sep 2013 and sell it for around $15 (upgrade only) with support until 2021. Extend the free security updates for the old XP for one year to give the user base time to migrate. Microsoft should also consider marketing XP II for new users at a higher price point.
For Win7 and Win8, Microsoft should announce that this represents a fork and that they are committed to the support and upgrades of the older platform (Win7) for users that don’t want the new touch based UI/UX.
Microsoft has to accept that their total market share is the sum of several platforms. Even with a 10 percent market share, each platform is large enough to be an attractive, cash flow positive business for any company. Milking a legacy platform such as XP is humiliating for Microsoft but beggars can’t be choosers. XP II would be a highly profitable business area and it would keep up the installed base. Whether this is enough to prevent or slow down the decline of Microsoft remains to be seen. (This is of course not a comprehensive strategy for Microsoft but only addresses the limited issue of OS upgrade cycles.)
I don’t usually pay much attention to Sony Ericsson’s products but last week I saw a billboard in the subway stating that the Xperia Arc sported a camera with excellentlow light capabilities. A quick google search revealed that SE is pushing the 8 Mpix low light camera as a major selling point. The low light capabilities come from Sony’s new sensor technology Exmor R.
It looks like SE’s marketing department has realized that most of their customers put a high value on the ability to take “natural” photos in low light conditions without a disturbing flash. Back in 2009 I wrote a highly critical review of their then flagship model Satio. The Satio was equipped with an oversized 12 Mpixel camera that was mediocre in low light due to the small sensor size. Two years later and it looks like they’ve finally fixed the problem.
It’s great that Sony has developed the Exmor R sensor for improved low light photography. But if they want to exploit this technology and use it to jump ahead of the competition they should push the low light threshold to the extreme in a sensor with larger pixel size but fewer megapixels. Instead Sony has developed a small silly 16 Mpix sensor while most of their competitors are concentrating on factors other than megapixel count.
The Mpixel count is only one design parameter. Pixel size is as important as the number of pixels. If each pixel is larger it will capture more photons.
And the sensor is only one component in the camera. Compare it with the highly touted Nokia N8 camera. Nokia’s sensor is one the largest in any camera phone, the Zeiss lens is made of glass not plastic, it has a mechanical shutter, a Xenon flash, and a built-in ND filter to handle extremely bright shooting conditions.
It’s a shame that Sony(Ericsson) and the new owners Sony don’t understand that they could use this new technology for an extreme low light camera phone that would sweep the competitors away. If they developed a 6 Mpix Exmor R sensor with a larger sensor size and used a Zeiss lens made of hardened glass they would really have a winner on their hands.
Sometimes I get the impression that the industry believes the iPhone and iPad represent the pinnacle of human technology. Even though the majority of the market attention is on these form factors, several new UI technologies are already out of the labs. These technologies have the potential to disrupt the traditional smartphone/tablet market and might pave the way for new types of products.
Here are a few examples that point toward a world after candybar multitouch. Exactly how they can be used and integrated in the UI/UX remains to be seen.
Demo of Microsoft Surface with PixelSense from Samsung
I have written about Microsoft Surface before, which is large horizontal multitouch screen built as a table. In the new slimmer version of Surface, Microsoft together with Samsung have developed PixelSense touch sensing technology. In PixelSense every pixel in the screen is also an infrared sensor that detects warm fingers on the surface. Just imagine what a future development of this technology could do if Samsung manages to fit the three RBG color sensors in every pixel. The surface could double as a copying machine. You put a paper, coupon or picture facing down on the surface, and when you lift it up, the copied object is displayed on the screen.
A technology for high performance multitouch screens has been developed by the Swedish startup Flatfrog. Their multitouch is based on an optical in-glass solution (Planar Scatter Detection) that also can be used to create multitouch on curved glass surfaces.
Another Swedish startup is Tobii, which has developed a technology for tracking eye movements. Using cameras that track the position of the pupil it is possible to calculate exactly what the user is focusing on. The company’s initial markets have been expensive high end systems for paralyzed people, market researchers, and academic researchers in cognitive psychology. Tobii has now begun to target the mainstream market together with Lenovo which are integrating eye tracking in a prototype laptop.
Kinect is a technology that Microsoft developed for their gaming console Xbox. It is an add-on gadget for your gaming console or flatscreen with facial recognition, voice recogniton and the ability to track gestures such as arm and hand movements. With Kinect you can control a game or PC by talking and waving your arms. It can be used for controlling an action figure or for moving between windows such as browsing your music collection, zooming in and out of a photo, etc. Up to six users can be tracked at the same time.
Even more futuristic UI/UX modalities are BCI technologies (Brain Computer Interface) where brain waves directly control an UI or some machinery. BCI has been used in research labs for a long time with electrodes implanted in the skull. Newer products based on less invasive methods with the electrodes attached to the scalp are now hitting the market, often in the form of a headset. The precision and bandwidth of these methods are still very primitive. One of the few things that can be reliably measured with BCI are emotive states such as relaxation vs. concentration.
Most of these new innovations are early in their life cycle and it is still too early to tell if anyone of them has a strong disruptive potential. New technologies drive development of new form factors. It remains to be seen if and how this will create future killer hardware. There is also a shortage of apps that can take advantage of the new features and turn them into compelling user experiences.
There are several hurdles to overcome. Products such as Kinect, Tobii and Surface put significant demands on processor capacity and there is a learning curve for any new UI technology. Prices have to come down for the large mainstream market to accept them.
I am slightly skeptical about a technology that requires you to wave your arms. What’s fine when gaming in your own living room, lifting and waving your arms for an extended period of time is tiresome. This has already been shown by users’ resistance to large vertical PC touchscreens.
It is possible that these new technologies will find their way into the candybar smartphone/tablet. But I think it is more likely that the future smartphone will integrate these new UI technologies without residing in the handset. If most tables, office desks, and bars are made of hard glass, with MS Surface technology perhaps the user could just place their smartphone on the glass and have all their apps, contacts and pictures displayed. The surface might even have built in eye tracking. Or maybe Corning’s vision of a world of glass will come true and the nearest wall will be able to display your smartphone home screen with built in eye tracking for navigation in the wall. Just make sure to control your eyeballs – you never know who might be looking over your shoulder.
Update: According to The Next Web’s internal sources, HP is NOT going to sell or shut webOS down, just the underperforming hardware device division. HP communicated this in a clumsy way which gave the erroneous impression that webOS was dead or for sale. HP’s plan seems to be to license webOS to hardware partners. But if HP is going to sell their PC division, they can’t force the buyer to promote webOS on the desktop platform. WebOS as a competitor to Windows 8 still seems quite unlikely.
My previous blog post about the potential for HP/webOS to expand webOS into the desktop and compete with Windows 8 was only two days old when HP announced their plans to abandon the tablet/smartphone market and their commitment to webOS. I got it wrong. This has been an interesting week in a frantically fast moving industry. Friday is not over so there is still time for another major announcement. How about Microsoft buying Nokia or Dell buying RIM?
I think HP made a rushed and unwise decision. Their Palm smartphones and HP Touchpad tablet didn’t sell, but that was due to clumsy design, weak hardware, and bugs. It was not caused by some inherent weakness in webOS.
If they had persevered, promoted an ecosystem, and licensed webOS I think they would have had a chance on the market. After the Google/Moto deal several of the Android licensees (LG, HTC, Sony Ericsson, Samsung, etc.) would probably have been interested in an alternative OS to reduce their dependence of Google.
And as I said in my previous blog post, if and when the HTML5/cloud paradigm becomes dominant, most existing HTML5 web apps will automatically become part of a huge virtual webOS app store inventory.
I haven’t really had time to consider potential webOS buyers. Here are some rough ideas: If HP includes the patent portfolio in the deal they can probably get a better price. Google and Samsung might be interested for hoarding more patents. Other usual suspects would be LG, HTC, Sony Ericsson, ZTE and Huawei. Or possibly China Mobile, Verizon or another large operator. Amazon might be interested in using webOS for a tablet/cloud service offer. Dell, Lenovo, Acer or Asus might want to develop cloud-PC solutions based on webOS to escape Windows 8 and Microsoft’s stranglehold. Perhaps next week’s events and mega deals will provide some answers.
The Google/Motorola deal suddenly makes it relevant to take a closer look at the other OS platforms on the market. Most industry observers in the mobile space have already written off HP/Palm’s webOS as a dead platform. From a smartphone perspective, this is obvious at first sight. With two percent of smartphone users in their only market (US), negligible global sales, and a thin app store, they don’t have much going for them. HP recently released a tablet powered by webOS but according to the reviewers the product is clumsy and behind the competition. There is talk about Samsung licensing webOS for a few handsets but no products have hit the shelves yet.
But there are a couple of scenarios where webOS can be viable. For example, if HTML5 becomes dominant and native apps fade into oblivion. In that case, the advantage of the market leaders’ huge app stores will become irrelevant and webOS will be able to compete on a level playing field. As webOS is optimized for HTML5 from the beginning, there is a good chance that apps will work better than on the competing platforms. If other OEMs become wary of using Android after Google’s Motorola purchase, webOS might be more attractive for licensing. An additional factor that could reinforce this scenario is the rise of cloud computing. If all this plays out, handset OEMs and mobile operators might consider webOS as a way of reducing the market power of Android, Microsoft, and Apple. But even if native apps are sidelined by HTML5, the smartphone market leaders will still have a huge advantage due to their brand, size, and market share.
However, if the game plan changes, webOS could reappear as a serious contender. If and when the cloud becomes the dominant computing paradigm, webOS will be a good fit for a range of devices. The drawback is that the mobile connection to the smartphone will always be unreliable and rather slow. If all your documents, contacts, messaging and apps are stored in the cloud this will be a problem. Enter the PC (and to some extent the tablet). For the PC one usually has a reliable broadband connection. That is where cloud computing (and hence webOS) would work best. And this is the direction HP is moving in with webOS. HP will install webOS on all their products (PCs, tablets, printers etc.) from 2012.
Industry observers predict that HP wants webOS so it can provide users with “experience roaming” across all devices, where webOS will ensure that users can keep their profile and contacts. The Synergy feature in webOS aggregates all the user’s contacts and supports that strategy. Enyo is webOS’s development framework and supports handling different screen sizes in a seamless way. This is probably part of HP’s plan.
But HP’s bolder move is to install webOS together with the upcoming Windows 8 on the traditional PC. I don’t know if this was part of HP’s original strategy when they bought Palm in April 2010 or added by the new CEO Léo Apotheker who joined HP in September 2010. If webOS boots faster than Windows 8, if HP gives the user a choice between webOS and Windows during boot, and if the user primarily uses the PC to access HTML5 web apps in the cloud – then perhaps users will choose to boot webOS instead of Windows and gradually stop using the legacy Windows platform. This would give HP huge leverage in future price negotiations with Microsoft. WebOS will be HP’s Trojan horse for breaking into Microsoft’s territory on the PC.
Windows 8 is a radical departure from the traditional desktop keyboard and mouse paradigm. Windows 8 comes with full touch screen support and their UI theme (“Metro”) has a look and feel with tiles that plagiarizes WP7 and most of the smartphone/tablets platforms. The traditional legacy desktop environment is hidden inside tiles. Windows 8 is built for app development in – surprise surprise – HTML5. The same as webOS. If we disregard the support for legacy desktop apps, Windows 8 and webOS will almost be head to head competitors. And while webOS is optimized for web apps, Windows 8 has to carry a huge legacy baggage to keep backward compatibility.
Will one of the most insignificant smartphone platforms rise from the ashes and conquer the giant of the PC era? Don’t rule it out just yet.
The Android vs. iOS vs. Windows Phone platform battle has been the talk of the industry for the last year. But the market share battle between handset platforms might not be as critical for the industry as many believe.
A popular view in the industry is that the market is inevitably moving towards an Apple-Google duopoly. Apple’s app store has more than 400,000 apps. Android is growing quickly from a base of more than 250,000 apps and is predicted to catch up with Apple later this year. Nearly 80 percent of all apps in app stores are controlled by these two market giants according to Distimo. Figures for Q1 2011 from Gartner show that the market share in the smartphone market for iOS and Android combined is 53 percent and rising.
But the duopoly may be challenged by the mobile web and cross-platform tools. HTML5 empowers all other platforms to offer apps through the browser. VisionMobile’s recent Developer Economics report shows that the mobile web (of which HTML5 is a subset) is already the third most popular platform in terms of developer mindshare after Android and iOS.
At the same time, HTML5 is overhyped and the belief that HTML5 will replace almost all native apps is in need of a reality check. Native apps will still offer richer functionality, better performance, and higher security compared to HTML5-based apps. A study by quirksmode.org has shown that every mobile WebKit implementation is slightly different, which could cause a problem for HTML5-based apps. In a recent whitepaper, Netbiscuits measured smartphone support for 18 features in HTML5 and showed that leading smartphones only offer partial (or no) support for a significant number of these features. Implementation is also fragmented. What works on iPhone will probably not work on RIM or Samsung handsets and vice versa. Or to quote Forrester’s take on the HTML5 vs. native debate: “The ‘Apps vs. Internet’ Debate Will Continue…to be irrelevant.”, “it’s not a question of ‘either/or’ when it comes to a choice between apps vs. the mobile Web, but both.”
The Landscape Of Cross-Platform Development Tools
The new types of cross-platform tools are more interesting than plain HTML5 because they can deliver higher performance and functionality than browser based HTML5. These tools produce apps as output and fall roughly into two categories:
2) Native apps. These apps are compiled into machine code and often written in C++ or similar languages.
Cross-platform tools are a nascent market with a flurry of startup activity over the last few years. The following diagram illustrates different trade-offs between complexity and performance in the cross-platform tools market.
Market segments for mobile cross-platform tools
Traditional websites: In the lower left corner is the traditional website, limited in performance but providing access to all platforms with no added complexity. Plain HTML5 could be included here once all browsers support the standard.
Other types of solutions which fall under the main heading of web/hybrid apps are based on Java, Lua, ActionScript or less common languages. The diagram shows how the heavily-fragmented Java ME offers inferior performance in spite of high complexity. The cross-platform tools Corona SDK and DragonRAD are based on Lua. Rhodes is based on HTML/Ruby while OpenPlug uses ActionScript (Flash) as source language. Kony uses drag-n-drop for building enterprise web apps. There is no reliable information about the performance/complexity trade-off for most of these solutions, so their exact position in the diagram above should be viewed as illustrative. In general, tools in which the resulting code is compiled or recompiled to native ARM machine code will have a higher performance.
Native apps: The second main category is native apps. In cross-platform tools for native apps, developers often work with a codebase in C/C++ or C# which is then semi-automatically ported to the target platform and device. Performance is significantly higher with native code, but so is the complexity. Players in this sector include Airplay, Qt and MoSync. The Airplay SDK (now Marmalade) originates in 3D gaming but can also be used as a general C++ cross-platform tool. Qt is a cross-platform UI framework that also can be used for native C++ porting. Qt primarily supports Nokia’s legacy platforms. MoSync is a cross-platform tool for general purpose C++ development, integrated with the Eclipse IDE and also available under an open source (GPL) license.
Cross-Platform Beyond Java – Native Extensions
The traditional approach to cross-platform development has been a lowest common denominator one – much like that taken by Java, Flash Lite and mobile HTML. This approach sacrifices performance, UI pizzazz and access to specific device features.
A workaround is to add native extensions. These can provide additional SDK/NDK libraries for the IDE and also give access to low level hardware functionality. Access to low-level hardware functionality can be managed by a device database that controls which conditional code will be executed on a given device.
Several of the cross-platform vendors have built such device databases with various levels of detail. A device database contains information on screen size, input modality and exact OS version, extending to detailed hardware configurations and known bugs with workarounds.
Using native extensions, it is possible to overcome the inherent limitations that plagued Java. Instead of “write once, run everywhere”, developers can spend 90 percent of their time developing a common codebase and 10 percent adding native tweaks and extensions for each platform and device. For software purists, the 90/10 solution might not seem very elegant, but it is a way forward that can handle the incredible complexity with thousands of devices running more than five OS platforms. In this way, app developers can manage one codebase and port it to target devices without losing functionality. In principle, using a (C++) cross-platform engine with extensions should be able to offer similar functionality with minimal performance penalty as compared to direct development for the target device. There will be significant economies of scale when the common codebase is tweaked for 100s of devices.
The Disruptive Potential Of Cross-Platform
There are few signs that platform fragmentation will disappear. It’s not just Android, iOS and Windows Phone 7, which are backed by corporate giants with deep pockets, but also smaller players like QNX (RIM), WebOS (HP), MeeGo (Intel, China Mobile) and Bada (Samsung). Add to that legacy platforms, which will be around for at least a few years: Windows Mobile, Blackberry OS, Symbian, BREW, Java ME and Flash. If we also include the main desktop platforms (Windows, Mac OS, Ubuntu), gaming consoles, set-top boxes, cars, and other gadgets, the number of platforms becomes unmanageable.
App developers whose clients need to reach the entire market, face the formidable task of supporting all platforms and devices. If they can use a cross-platform engine the productivity gains will be dramatic compared to paying for separate in-house dev teams for each platform.
Early adopters of cross-platform will most likely be large consumer businesses who need to target the mass market such as media companies, games houses, entertainment companies, banks, and any brand developing B2C apps. Similarly, government agencies are often required to provide non-discriminatory access to their services and cross-platform tools will enable them to do just that. Another group of early adopters of cross-platform tools is CIOs of larger corporations. They face increasing demand from senior staff who want to use their favorite smartphone for secure access of internal company data. Once these early adopters have driven down the prices and sorted out stability issues we should expect to see a fast uptake of cross-platform tools in the mainstream app development market.
Assuming more developers move to cross-platform tools, the power distribution in the mobile sector will be challenged. The difference in the number of available apps between dominant and up-n-coming platforms will be reduced. This will allow smaller platforms to compete on a level playing field.
Web apps and HTML5 should make the largest dent in the market power of traditional platforms. But the final nail in the coffin will come when C++ cross-platform engines can offer almost the same performance and functionality as coding directly on the target platform. This is possible if the cross-platform engines can fully integrate native platform and device extensions. In that case, developers of native apps might reconsider Android, iOS and WP7 and choose to code to a cross-platform IDE, not to the platform. In this scenario, the cross-platform IDEs would become players of equal or even greater importance than the native platforms. At the very least, today’s OS platform wars will move to a totally different level.