Earlier today, Apple held a multi-product announcement at the Flint Center in Cupertino. I'm going to skip the product specifications and discuss what it all means, at least to me:
iPhone 6
The long-rumored iPhone 6 was announced, in two flavors: The iPhone 6 with a 4.7" display, and the iPhone 6 Plus with a 5.5" display. Other than display size, the two phones are functionally identical to each other. The big news, obviously, is the bigger screens. Prior to today, if you wanted an iPhone, you could choose between a 4" display and...another 4" display. Android smartphone vendors have successfully competed against the iPhone with bigger phones--in fact, some analysts attribute a fair portion of the decline in iPad sales to substitution of bigger smartphones for tablets.
With the deliveries of the iPhone 6 models in September, Apple will have its own "phablet" to compete with big Android and Windows Phone models. The iPhone 6 Plus, in particular, is likely to cannibalize sales of iPads and iPad minis, but Apple would rather steal sales from itself and keep customers inside Apple's ecosystem than lose sales to competitors and risk having customers switch to Android or Windows Phone.
Apple has also adopted Near Field Communications (NFC) for use in financial transactions. The company's new Apple Pay service enables customers of five of the largest U.S. banks to make credit and debit card payments without taking out their cards. Apple says that over 220,000 stores are already equipped for Apple Pay transactions. Again, this is an area where Apple is catching up with competitors; the first NFC-equipped Android and Blackberry phones were released in 2011. NFC hasn't taken off in the U.S., largely because a relatively small number of customers had compatible smartphones, and partly because not enough banks and merchants were supporting it. Apple Pay goes a long way to cutting the Gordian Knot by bringing Apple, payment networks (American Express, MasterCard and Visa,) banks and merchants together. However, Apple Pay only works with the iPhone 6 and iPhone 6 Plus, so for quite some time, the vast majority of iPhones in customer hands will be incompatible.
From all appearances, the new iPhones are well-built, well-designed smartphones that compare well with the best phones from competitors. However, the key features that differentiate the iPhone 6 and iPhone 6 Plus from earlier iPhones, particularly the iPhone 5s, are features that competitors have had for some time. With today's announcement, the top iOS, Android and Windows Phone smartphones are largely at parity.
Apple Watch
Today's Apple Watch announcement (really a preannouncement--I'll explain in a moment) finally brought to an end most of the speculation about the "iWatch"--speculation that began in late 2012. Many, if not most of the current assortment of smartwatches from Pebble, Samsung, Motorola, LG, Sony and others, owe their genesis to a desire to get into the market ahead of Apple. Apple isn't in the market quite yet--they announced the Apple Watch with two different display sizes and three models, but didn't discuss the actual screen size, resolution, storage space, RAM size or battery life. We also don't know when the Apple Watch will ship, other than some time in early 2015. The prices was specified at "starting at $349" in the U.S., which suggests that the three models will be differentiated by screen size, bands, and possibly memory. (We've since learned that the models are also likely to be differentiated by case materials.) So, we know a lot about the Apple Watch, but if we don't know when we can buy it, how much it'll cost or how it's equipped, it's a preannouncement.
People have criticized Samsung for their tendency to throw everything but the kitchen sink into their smartphones, whether or not the features are actually going to be used or work very well. I felt the same way about the Apple Watch feature set. Some of the features, such as using a GPS-based time server to maintain the correct local time, and the ability to use the Watch as the "front end" for texts, phone calls and email, make a lot of sense. The exercise features make the Watch an effective substitute for a fitness tracker. However, some features, like the ability to draw on the crystal with your finger and to send your heartbeat to another Watch user, go into the "What were they thinking?" category.
It feels to me like no one--not Apple, Samsung, Motorola or the rest--knows what the real use cases for a smartwatch are. Of course it has to tell time; otherwise, it's not a watch. But anyone can buy a perfectly adequate watch for telling time for $25. How do you justify spending $250 or more for a smartwatch? One way is to let it act as a "front end" for the smartphone for the most common uses--phone calls, texts and emails. Using the watch for maps and navigation is also nice, and fairly common. And, of course, if the smartwatch can do everything that a fitness tracker can, you don't need the fitness tracker. But here's the problem: Other than telling time, the smartwatch doesn't do anything as well as a smartphone. The screen is too small, especially when people want smartphones with bigger and bigger screens. Fitness trackers aren't selling well, and many people who bought them have stopped using them. Will they use the fitness features longer or more regularly if they're part of a smartwatch? Perhaps. Will they want to feel someone else's heartbeat? Maybe once.
I don't think that anyone, Apple included, has as of yet either 1) Justified the prices of their smartwatches, or 2) Figured out the right feature set to make them a mass market item. At $349, I expect a watch that's a smartphone, not a watch that has to be connected to a smartphone in order to do anything more than tell time. Maybe at $199, smartwatches with comparable functionality to the Apple Watch will sell in big numbers, but at $349, or even the $249 that most Android Wear watches are priced at, they're going to be niche items.
Showing posts with label Motorola. Show all posts
Showing posts with label Motorola. Show all posts
Tuesday, September 09, 2014
Saturday, August 25, 2012
The Apple-Samsung Verdict: Ultimately, it's better for everyone (except, perhaps, developers)
Yesterday's overwhelming court victory by Apple over Samsung in U.S. Federal Court is only one of many such cases being tried around the world, but it may be the most important. The jury's decisions may eventually be revised or overturned on appeal, but the results give a blueprint for how other such trials between Apple and Android licensees are likely to play out.
[Update, August 26, 2012: Groklaw reports that the speed of the jury's decision, given the 109 pages of jury instructions and 700 questions that the jury had to answer, and the speed with which the jury reconciled two obvious inconsistencies in its verdict, suggest that the jury raced through the judgment process without the necessary consideration. That conclusion is supported by a quote (albeit hearsay) in the blog The Verge: "The foreman told a court representative that the jurors had reached a decision without needing the (Judge's) instructions." CNET carried another quote, from a jury member, suggesting that the foreman led the jury to make a speedy but insufficiently considered set of judgments against Samsung. For these and other reasons, Groklaw believes that the jury's ruling won't stand.]
If you think back before Apple released the original iPhone, there was enormous diversity in mobile phone design. Motorola shook things up with its Razr; LG had its Chocolate phones, and Danger designed innovative early smartphones. And, of course, there was RIM with its keyboard-based BlackBerry models. Now, at least when they're turned off, there's very little difference between the smartphones from Apple, Samsung, LG, Motorola, Nokia and many other vendors. They're rectangular, fairly thin phones with touchscreens. Even RIM's new BlackBerry 10-based smartphones are going to be keyboard-free.
The Apple-Samsung ruling means that Android licensees are going to have to carefully scrub their smartphones of user interface features similar to those of Apple. Google is going to have to deliver a base version of Android that does the same thing. In addition, the physical designs of smartphones are going to have to become much more diverse. I see that as an opportunity, not a liability. Cars all have the same basic functional elements, but a Fiat 500 looks dramatically different inside and out than a Mercedes E-Class sedan.
There's a lot of room for creativity in smartphone design, and it's time for Apple's competitors to exercise that creativity. Phones could have displays that are designed to be used in landscape, rather than portrait, mode. They could fold up and have a top and bottom display. They could have displays on the front and back. There's a lot of creativity in Japanese phone designs, and that could become a model for the rest of the world.
The biggest problem facing smartphone designers is maintaining a consistent environment for app developers. Android developers are already confronted with a bewildering combination of screen sizes and versions of the operating system. There are over 1,000 different devices that developers could write for, but the reality is that they target a few popular devices and hope for the best. The problem will only get worse with more screen sizes and Android user interface customizations, and Google and its licensees are going to have to make it easier for developers to accommodate those variations.
It's time for someone to think outside the box and design a smartphone that makes the iPhone look outdated.
[Update, August 26, 2012: Groklaw reports that the speed of the jury's decision, given the 109 pages of jury instructions and 700 questions that the jury had to answer, and the speed with which the jury reconciled two obvious inconsistencies in its verdict, suggest that the jury raced through the judgment process without the necessary consideration. That conclusion is supported by a quote (albeit hearsay) in the blog The Verge: "The foreman told a court representative that the jurors had reached a decision without needing the (Judge's) instructions." CNET carried another quote, from a jury member, suggesting that the foreman led the jury to make a speedy but insufficiently considered set of judgments against Samsung. For these and other reasons, Groklaw believes that the jury's ruling won't stand.]
If you think back before Apple released the original iPhone, there was enormous diversity in mobile phone design. Motorola shook things up with its Razr; LG had its Chocolate phones, and Danger designed innovative early smartphones. And, of course, there was RIM with its keyboard-based BlackBerry models. Now, at least when they're turned off, there's very little difference between the smartphones from Apple, Samsung, LG, Motorola, Nokia and many other vendors. They're rectangular, fairly thin phones with touchscreens. Even RIM's new BlackBerry 10-based smartphones are going to be keyboard-free.
The Apple-Samsung ruling means that Android licensees are going to have to carefully scrub their smartphones of user interface features similar to those of Apple. Google is going to have to deliver a base version of Android that does the same thing. In addition, the physical designs of smartphones are going to have to become much more diverse. I see that as an opportunity, not a liability. Cars all have the same basic functional elements, but a Fiat 500 looks dramatically different inside and out than a Mercedes E-Class sedan.
There's a lot of room for creativity in smartphone design, and it's time for Apple's competitors to exercise that creativity. Phones could have displays that are designed to be used in landscape, rather than portrait, mode. They could fold up and have a top and bottom display. They could have displays on the front and back. There's a lot of creativity in Japanese phone designs, and that could become a model for the rest of the world.
The biggest problem facing smartphone designers is maintaining a consistent environment for app developers. Android developers are already confronted with a bewildering combination of screen sizes and versions of the operating system. There are over 1,000 different devices that developers could write for, but the reality is that they target a few popular devices and hope for the best. The problem will only get worse with more screen sizes and Android user interface customizations, and Google and its licensees are going to have to make it easier for developers to accommodate those variations.
It's time for someone to think outside the box and design a smartphone that makes the iPhone look outdated.
Monday, April 23, 2012
When "something for everyone" may be too much
On the cover of the current issue of "TWICE" (This Week in Consumer Electronics,) there's an ad for Nikon's cameras with the tagline "There's a Nikon for Everyone." It got me thinking about something I noticed at the Sony and Panasonic booths at last week's NAB conference. These companies have so many different camcorders and cinema cameras that even the people selling them can't keep track of all of them. For example, when I was in the Sony booth, I couldn't find the 35mm cinema cameras (NEX-FS100, FS700, F3, etc.) I asked one of Sony's salespeople where they were, and she said that all of the company's cameras were on display in the huge circular "camera pit" at the center of the booth. I'd walked around the entire pit and hadn't seen the 35mm cameras, so I went around again but didn't find them. It turned out that the 35mm cameras were in a completely separate section of the booth.
There are so many products that they overlap each other in price and functionality. The same is also true for still cameras from Canon, Nikon, Sony and others, and smartphones from Samsung, HTC, LG, Motorola, Nokia, etc. Makers of notebook and desktop computers have the same problem--just look at the proliferation of models at HP, Dell and Acer. Manufacturers make so many models in order to avoid losing a sale, but they wind up confusing potential customers. Each of these products costs a significant amount of money to develop, manufacture and support. Resources that could be used to develop entirely new products are instead used to create minor product variations to fit into every conceivable price point.
Apple is a great example of a better approach to the problem. At any one time, Apple has a single line of smartphones, tablets, and notebook, all-in-one, mini and full-sized desktop computers, each of which is refreshed once a year. Apple continues to sell a single version of the previous year's tablet and smartphone (two years in the case of phones) at lower prices. Each computer line has four or five models, which vary by display size and processor. When a new computer line is launched, the previous line is discontinued. It covers all the price points, yet it's simple for consumers to understand and for Apple to sell. It also works well with Apple's strategy of making product announcements into newsworthy events.
Sony lost $6.4 billion last year; Panasonic lost $10.2 billion. They no longer have the money to invest in endless product proliferation--which might explain the relatively paltry number of new products shown by Panasonic at NAB. They, and companies like Canon, Nikon, Samsung, etc., would be well advised to focus on fewer, better products that are clearly differentiated from competitors and from each other.
There are so many products that they overlap each other in price and functionality. The same is also true for still cameras from Canon, Nikon, Sony and others, and smartphones from Samsung, HTC, LG, Motorola, Nokia, etc. Makers of notebook and desktop computers have the same problem--just look at the proliferation of models at HP, Dell and Acer. Manufacturers make so many models in order to avoid losing a sale, but they wind up confusing potential customers. Each of these products costs a significant amount of money to develop, manufacture and support. Resources that could be used to develop entirely new products are instead used to create minor product variations to fit into every conceivable price point.
Apple is a great example of a better approach to the problem. At any one time, Apple has a single line of smartphones, tablets, and notebook, all-in-one, mini and full-sized desktop computers, each of which is refreshed once a year. Apple continues to sell a single version of the previous year's tablet and smartphone (two years in the case of phones) at lower prices. Each computer line has four or five models, which vary by display size and processor. When a new computer line is launched, the previous line is discontinued. It covers all the price points, yet it's simple for consumers to understand and for Apple to sell. It also works well with Apple's strategy of making product announcements into newsworthy events.
Sony lost $6.4 billion last year; Panasonic lost $10.2 billion. They no longer have the money to invest in endless product proliferation--which might explain the relatively paltry number of new products shown by Panasonic at NAB. They, and companies like Canon, Nikon, Samsung, etc., would be well advised to focus on fewer, better products that are clearly differentiated from competitors and from each other.
Friday, April 06, 2012
Apple: Don Quixote de Cupertino?
Update, April 11, 2012: Bloomberg is reporting that the U.S. Justice Department filed suit this morning against Apple, Hachette, HarperCollins, Macmillan, Penguin and Simon & Schuster for eBook price-fixing; Hachette, HarperCollins and Simon & Schuster settled with the Government.
Bloomberg reported that Apple, Penguin and Macmillan are unlikely to agree to a settlement with the U.S. Justice Department over eBook price-fixing accusations, and are preparing to go to court. The three other publishers in the case, Hachette, HarperCollins and Simon & Schuster, are said to be very close to agreeing to a settlement with the Justice Department.
Regular readers of my blog know my opinion on the subject: There's very strong evidence, even if circumstantial at this point, that the publishers imposed agency terms on all of their resellers at almost exactly the same time, including the exact same commission rate, and that all of them threatened to stop supplying eBooks to any reseller who refused to agree. Apple's precise role in the scheme isn't clear, but it's known from Steve Jobs' own words that Apple proposed the scheme to the publishers and knew that it included the part about refusing to sell eBooks to any reseller (including Amazon) that didn't agree.
Apple may believe that it didn't coordinate the actions of the publishers (or that it's covered its tracks well enough that the Justice Department can't prove that it did coordinate their actions.) It may also not want to agree to a settlement for fear of its impact on the civil price-fixing case underway in New York. However, in my opinion, Apple is taking a huge risk by not settling the case before it goes to court.
As it looks now, Hachette, HarperCollins and Simon & Schuster are close to a settlement. If they settle, they'll enter into what's called a consent decree, which doesn't require them to assume guilt for the charges. They'll be required to change their business practices, possibly pay a fine, and agree to court supervision for a limited period of time. The pain and reputational damage will be over quickly. For Apple, Penguin and Macmillan, however, their senior executives are in for months of depositions, they'll be required to provide many thousands of documents as part of the discovery process, and the court trials and appeals will likely take years to play out.
In addition, the Justice Department will be able to compel Hachette, HarperCollins and Simon & Schuster to testify against the other three companies. They'll have immunity as a result of their settlement, and they'll have no reason to protect their competitors or Apple. This is a standard part of most price-fixing cases: One or more defendants cut early deals with the Justice Department and gain immunity, and then they provide evidence against the other players in the price-fixing scheme.
The worst possible outcome for Apple would be for it to lose in court, even if it eventually wins on appeal. All they have to do is look at Microsoft to witness the damage that could be done. That case was eventually settled with a consent decree, but Microsoft was under court supervision for ten years. The company could no longer pursue the aggressive tactics that it had used in the past to suppress competition. Most importantly, it became a convicted monopolist, which changed both the public's perception of the company and the stakes for any future litigation. (When Bill Gates eventually passes away, stories about his philanthropy will have to share time with the videos of his depositions.) The press was no longer afraid of retaliation by Microsoft's public relations department for running negative stories, and Microsoft lost control of its messages.
Apple is unafraid of litigation, as witness its myriad lawsuits against Android licensees. In Walter Isaacson's biography, Steve Jobs clearly saw Android as not only a theft of Apple's intellectual property by Google, but a personal betrayal by Google Chairman Eric Schmidt, who served on Apple's board of directors for years. Jobs swore that he would spend Apple's entire cash horde, if necessary, waging "thermonuclear war" on Google and Android.
Unfortunately for Apple, its cases against Samsung, HTC and Motorola have been far from the "slam-dunks" that Jobs thought they would be. Apple has estranged perhaps the most important component supplier for its mobile products, Samsung, and it's being forced to bring alternative vendors up to its quality and deliverability standards. For example, Apple had planned to launch the new iPad with three LCD vendors, LG, Samsung and Sharp, but only Samsung was able to meet Apple's quality requirements and ship in the necessary quantities in time for the launch. In addition, some of Apple's own patents are being challenged and could be invalidated.
Apple, like Don Quixote in Cervantes' novel, enjoys its battles. Unlike Quixote, however, Apple's opponents fight back, and are likely to hurt Apple much more than Apple hurts them.
Bloomberg reported that Apple, Penguin and Macmillan are unlikely to agree to a settlement with the U.S. Justice Department over eBook price-fixing accusations, and are preparing to go to court. The three other publishers in the case, Hachette, HarperCollins and Simon & Schuster, are said to be very close to agreeing to a settlement with the Justice Department.
Regular readers of my blog know my opinion on the subject: There's very strong evidence, even if circumstantial at this point, that the publishers imposed agency terms on all of their resellers at almost exactly the same time, including the exact same commission rate, and that all of them threatened to stop supplying eBooks to any reseller who refused to agree. Apple's precise role in the scheme isn't clear, but it's known from Steve Jobs' own words that Apple proposed the scheme to the publishers and knew that it included the part about refusing to sell eBooks to any reseller (including Amazon) that didn't agree.
Apple may believe that it didn't coordinate the actions of the publishers (or that it's covered its tracks well enough that the Justice Department can't prove that it did coordinate their actions.) It may also not want to agree to a settlement for fear of its impact on the civil price-fixing case underway in New York. However, in my opinion, Apple is taking a huge risk by not settling the case before it goes to court.
As it looks now, Hachette, HarperCollins and Simon & Schuster are close to a settlement. If they settle, they'll enter into what's called a consent decree, which doesn't require them to assume guilt for the charges. They'll be required to change their business practices, possibly pay a fine, and agree to court supervision for a limited period of time. The pain and reputational damage will be over quickly. For Apple, Penguin and Macmillan, however, their senior executives are in for months of depositions, they'll be required to provide many thousands of documents as part of the discovery process, and the court trials and appeals will likely take years to play out.
In addition, the Justice Department will be able to compel Hachette, HarperCollins and Simon & Schuster to testify against the other three companies. They'll have immunity as a result of their settlement, and they'll have no reason to protect their competitors or Apple. This is a standard part of most price-fixing cases: One or more defendants cut early deals with the Justice Department and gain immunity, and then they provide evidence against the other players in the price-fixing scheme.
The worst possible outcome for Apple would be for it to lose in court, even if it eventually wins on appeal. All they have to do is look at Microsoft to witness the damage that could be done. That case was eventually settled with a consent decree, but Microsoft was under court supervision for ten years. The company could no longer pursue the aggressive tactics that it had used in the past to suppress competition. Most importantly, it became a convicted monopolist, which changed both the public's perception of the company and the stakes for any future litigation. (When Bill Gates eventually passes away, stories about his philanthropy will have to share time with the videos of his depositions.) The press was no longer afraid of retaliation by Microsoft's public relations department for running negative stories, and Microsoft lost control of its messages.
Apple is unafraid of litigation, as witness its myriad lawsuits against Android licensees. In Walter Isaacson's biography, Steve Jobs clearly saw Android as not only a theft of Apple's intellectual property by Google, but a personal betrayal by Google Chairman Eric Schmidt, who served on Apple's board of directors for years. Jobs swore that he would spend Apple's entire cash horde, if necessary, waging "thermonuclear war" on Google and Android.
Unfortunately for Apple, its cases against Samsung, HTC and Motorola have been far from the "slam-dunks" that Jobs thought they would be. Apple has estranged perhaps the most important component supplier for its mobile products, Samsung, and it's being forced to bring alternative vendors up to its quality and deliverability standards. For example, Apple had planned to launch the new iPad with three LCD vendors, LG, Samsung and Sharp, but only Samsung was able to meet Apple's quality requirements and ship in the necessary quantities in time for the launch. In addition, some of Apple's own patents are being challenged and could be invalidated.
Apple, like Don Quixote in Cervantes' novel, enjoys its battles. Unlike Quixote, however, Apple's opponents fight back, and are likely to hurt Apple much more than Apple hurts them.
Monday, August 15, 2011
Google buys Motorola Mobility: More questions than answers?
This morning opened with a bang, when Google announced that it had made a friendly offer to acquire Motorola Mobility for $12.5 billion. The offer caught a lot of people in the industry flat-footed (although not Ben Bajarin, who wrote an amazingly prescient post last week on why Google should buy Motorola Mobility.)
$12.5 billion is a 63% premium over the price that Motorola Mobility's stock closed at last Friday, so why would Google pay so much to purchase the company? The one thing that everyone agrees upon is that Google wanted Motorola's patents, a pool nearly four times larger than the one that the company bid on from Nortel. The question is how valuable those patents will be in protecting Google's Android licensees from patent challenges by Microsoft, Apple and others. Microsoft was suing Motorola Mobility for patent infringement before today's announcement, so the Motorola patent library might not provide all the protection that Google needs. In addition, acquiring Motorola Mobility for $12.5 billion to get the patents prompts the question, in hindsight, whether Google would have been better off staying in the Nortel bidding and perhaps winning exclusive ownership of the patents for $5 or $6 billion. It also begs the question as to why Google didn't simply buy Motorola's patents, not the entire company; the consensus opinion is that Motorola's management refused to sell the patents by themselves.
Google got most of its top hardware partners to sign onto a press release endorsing the acquisition, but you have to wonder what the leaders of companies such as HTC, Samsung and LG Electronics are really thinking. In one move, Google went from being a supplier of perhaps their most critical smartphone technology to one of their biggest competitors. As Henry Blodget points out, hardware is a low-margin, semi-commodity business (for everyone except Apple). It's radically different from the software business, and the Motorola acquisition will increase Google's headcount by 60% overnight.
Google has declared that it will run Motorola Mobility as a separate business, and won't change the way that it runs its Android business. That's what Motorola's hardware partners (and possibly regulators) want to hear, but it creates a dilemma for Google. If the company wants to maximize the value of Motorola, it has to much more tightly integrate Android and Motorola, enabling Motorola to get new features and new versions of Android before other licensees. That, however, would violate its pledge to run the two businesses independently. The second option is to run Motorola so that it doesn't compete with other licensees, but that would cause the company to lose all its good developers, designers and hardware engineers. No one wants to work for a crippled company. The third option is that Google could sell off Motorola's hardware businesses, but to whom? The fate of Motorola's hardware businesses will be up in the air until the acquisition is completed, if not substantially after that.
In addition, despite some analysts' opinions that antitrust regulators won't stop the acquisition, there's substantial reason to doubt that the acquisition will occur without significant concessions by Google. There are so many antitrust investigations of Google underway, from the U.S. Federal Trade Commission to U.S. State investigations, to European Union investigations, that this acquisition can't help but be looked at in the context of Google's overall behavior. At the very least, Google will have to make its "hands-off" approach to running Motorola Mobility a guarantee, and will have to agree to make Android and related products available to all licensees on an equal, non-discriminatory basis. Regulatory agencies may also use approval of this acquisition as a lever to get Google to agree to restrictions on how it runs its search engine, how it integrates its products, and how its services work on mobile platforms.
One final note: Most reports have noted only in passing that, in addition to mobile phones and patents, Google is also getting Motorola's set-top box business. In fact, depending on who's doing the measurement, Motorola is either the world's #1 or #2 vendor of set-top boxes. Historically, customers such as cable and IPTV operators have had enormous control over the design of the set-top boxes they buy, so Google can't arbitrarily add Google TV or the Google search engine to all of its devices. However, this acquisition gets Google's foot in the door with established multichannel video providers in a very big way. At the very least, we're likely to see the next generation of Motorola's set-top boxes and home gateways run Android, even if Google's customers hide the Android layer from end users.
Google's proposed acquisition of Motorola Mobility poses more questions than it answers. We may be waiting for the answers for quite some time.
$12.5 billion is a 63% premium over the price that Motorola Mobility's stock closed at last Friday, so why would Google pay so much to purchase the company? The one thing that everyone agrees upon is that Google wanted Motorola's patents, a pool nearly four times larger than the one that the company bid on from Nortel. The question is how valuable those patents will be in protecting Google's Android licensees from patent challenges by Microsoft, Apple and others. Microsoft was suing Motorola Mobility for patent infringement before today's announcement, so the Motorola patent library might not provide all the protection that Google needs. In addition, acquiring Motorola Mobility for $12.5 billion to get the patents prompts the question, in hindsight, whether Google would have been better off staying in the Nortel bidding and perhaps winning exclusive ownership of the patents for $5 or $6 billion. It also begs the question as to why Google didn't simply buy Motorola's patents, not the entire company; the consensus opinion is that Motorola's management refused to sell the patents by themselves.
Google got most of its top hardware partners to sign onto a press release endorsing the acquisition, but you have to wonder what the leaders of companies such as HTC, Samsung and LG Electronics are really thinking. In one move, Google went from being a supplier of perhaps their most critical smartphone technology to one of their biggest competitors. As Henry Blodget points out, hardware is a low-margin, semi-commodity business (for everyone except Apple). It's radically different from the software business, and the Motorola acquisition will increase Google's headcount by 60% overnight.
Google has declared that it will run Motorola Mobility as a separate business, and won't change the way that it runs its Android business. That's what Motorola's hardware partners (and possibly regulators) want to hear, but it creates a dilemma for Google. If the company wants to maximize the value of Motorola, it has to much more tightly integrate Android and Motorola, enabling Motorola to get new features and new versions of Android before other licensees. That, however, would violate its pledge to run the two businesses independently. The second option is to run Motorola so that it doesn't compete with other licensees, but that would cause the company to lose all its good developers, designers and hardware engineers. No one wants to work for a crippled company. The third option is that Google could sell off Motorola's hardware businesses, but to whom? The fate of Motorola's hardware businesses will be up in the air until the acquisition is completed, if not substantially after that.
In addition, despite some analysts' opinions that antitrust regulators won't stop the acquisition, there's substantial reason to doubt that the acquisition will occur without significant concessions by Google. There are so many antitrust investigations of Google underway, from the U.S. Federal Trade Commission to U.S. State investigations, to European Union investigations, that this acquisition can't help but be looked at in the context of Google's overall behavior. At the very least, Google will have to make its "hands-off" approach to running Motorola Mobility a guarantee, and will have to agree to make Android and related products available to all licensees on an equal, non-discriminatory basis. Regulatory agencies may also use approval of this acquisition as a lever to get Google to agree to restrictions on how it runs its search engine, how it integrates its products, and how its services work on mobile platforms.
One final note: Most reports have noted only in passing that, in addition to mobile phones and patents, Google is also getting Motorola's set-top box business. In fact, depending on who's doing the measurement, Motorola is either the world's #1 or #2 vendor of set-top boxes. Historically, customers such as cable and IPTV operators have had enormous control over the design of the set-top boxes they buy, so Google can't arbitrarily add Google TV or the Google search engine to all of its devices. However, this acquisition gets Google's foot in the door with established multichannel video providers in a very big way. At the very least, we're likely to see the next generation of Motorola's set-top boxes and home gateways run Android, even if Google's customers hide the Android layer from end users.
Google's proposed acquisition of Motorola Mobility poses more questions than it answers. We may be waiting for the answers for quite some time.
Friday, August 05, 2011
Consumer electronics' U.S. renaissance
There was a time, before World War II, when the U.S. was the undisputed world leader in consumer electronics. U.S. manufacturers, led by RCA, dominated world markets. However, U.S. manufacturers' operations in Japan and most of Europe were nationalized at the start of WWII. More importantly, RCA discounted the value of transistors in consumer electronic design after the war. Japanese manufacturers licensed transistor technology from Bell Labs and used it to build smaller, less expensive and more reliable products. That spelled the beginning of the end for the U.S. consumer electronics business.
At one time, companies like RCA, Westinghouse, Zenith, Philco, Magnavox, Sylvania and Motorola were household names. Now, only Motorola is still in consumer electronics, with its mobile phones. RCA, Westinghouse and Sylvania are nothing more than trademarks licensed to other companies, Zenith was acquired by South Korea's LG Electronics, and Philco & Magnavox were acquired by Philips. Until the late 1990s, the U.S. consumer electronics business was effectively dead. Today, however, there's a resurgence in U.S. consumer electronics.
The leader of this renaissance is Apple, which has dominated the personal media player market for almost a decade with its iPods. Foreign manufacturers have tried to wrestle market share away from Apple's iPods, without success. As of last quarter, Apple became the world's largest seller of smartphones, and it's been the leader in tablets since the launch of the iPad. Apple also dominates music sales through iTunes. Apple TV is Apple's only consumer electronics product that's struggling in the marketplace (although no one in the over-the-top set-top box market has yet found a winning formula.)
Apple doesn't manufacture any of its hardware products; it designs the products and farms out manufacture to Chinese and Taiwanese manufacturers. Vizio has applied the same formula to HDTVs, and either leads the market for LCD HDTVs or is close to the top every quarter. Vizio's aggressive pricing strategy has helped to force Sony out of the TV manufacturing business, and is pushing other Japanese and South Korean manufacturers to rethink their HDTV market strategies.
Sonos came from nowhere to become the leader in wireless networked home audio systems. Sonos applies an Apple-like design philosophy to its products, and has steadily expanded its product line both up and down to cover a variety of price points. Roku licensed a streaming media player originally developed in-house at Netflix and has become the leader in the market for those devices, at very aggressive price points: When Logitech launched its Google TV-based Revue set-top box at $299, the least expensive Roku player was $59.99. Now, the price of the Revue has been cut to $99 (the same price as Roku's top-of-the-line model) in order to clear out an apparently massive inventory of the devices.
It's true that U.S. companies are nowhere near recapturing the share of the consumer electronics market that they had before the 1970s, but if anyone had predicted any resurgence of U.S. consumer electronics companies even ten years ago, they'd have been laughed out of the room. The ability to anticipate (and drive) consumer desires, together with leveraging Chinese and Taiwanese manufacturing resources, is allowing U.S. companies to compete on equal footing with companies that could have crushed them only a few years ago.
At one time, companies like RCA, Westinghouse, Zenith, Philco, Magnavox, Sylvania and Motorola were household names. Now, only Motorola is still in consumer electronics, with its mobile phones. RCA, Westinghouse and Sylvania are nothing more than trademarks licensed to other companies, Zenith was acquired by South Korea's LG Electronics, and Philco & Magnavox were acquired by Philips. Until the late 1990s, the U.S. consumer electronics business was effectively dead. Today, however, there's a resurgence in U.S. consumer electronics.
The leader of this renaissance is Apple, which has dominated the personal media player market for almost a decade with its iPods. Foreign manufacturers have tried to wrestle market share away from Apple's iPods, without success. As of last quarter, Apple became the world's largest seller of smartphones, and it's been the leader in tablets since the launch of the iPad. Apple also dominates music sales through iTunes. Apple TV is Apple's only consumer electronics product that's struggling in the marketplace (although no one in the over-the-top set-top box market has yet found a winning formula.)
Apple doesn't manufacture any of its hardware products; it designs the products and farms out manufacture to Chinese and Taiwanese manufacturers. Vizio has applied the same formula to HDTVs, and either leads the market for LCD HDTVs or is close to the top every quarter. Vizio's aggressive pricing strategy has helped to force Sony out of the TV manufacturing business, and is pushing other Japanese and South Korean manufacturers to rethink their HDTV market strategies.
Sonos came from nowhere to become the leader in wireless networked home audio systems. Sonos applies an Apple-like design philosophy to its products, and has steadily expanded its product line both up and down to cover a variety of price points. Roku licensed a streaming media player originally developed in-house at Netflix and has become the leader in the market for those devices, at very aggressive price points: When Logitech launched its Google TV-based Revue set-top box at $299, the least expensive Roku player was $59.99. Now, the price of the Revue has been cut to $99 (the same price as Roku's top-of-the-line model) in order to clear out an apparently massive inventory of the devices.
It's true that U.S. companies are nowhere near recapturing the share of the consumer electronics market that they had before the 1970s, but if anyone had predicted any resurgence of U.S. consumer electronics companies even ten years ago, they'd have been laughed out of the room. The ability to anticipate (and drive) consumer desires, together with leveraging Chinese and Taiwanese manufacturing resources, is allowing U.S. companies to compete on equal footing with companies that could have crushed them only a few years ago.
Tuesday, June 07, 2011
Technology previews vs. premature release
Earlier today, Nintendo previewed its new Wii U at the E3 conference. The Wii U is a new console with a tablet-like device that serves as a controller and second display device. Like a number of other Nintendo events, today's Wii U announcement was deliberately positioned as a technology preview rather than a formal product announcement. The Wii U won't ship until 2012, and it may be significantly different by the time it ships. However, Nintendo is encouraging developers to start writing games and applications for the Wii U, so that when it ships, there will be a significant third-party library to support it.
I'm not a fan of early announcements, but when it comes to new platforms, technology previews make a lot of sense. They introduce developers, the press and potential customers to new product concepts, and they build interest and support for the formal product release. They buy time for their vendors--Nintendo said "2012", which gives them almost 18 months. They're clearly prototypes, and they give vendors the time they need to gather feedback and make changes before they go to market.
Compare this approach with what Google did with Google TV and its Android 3.0 tablets. Last year's Google TV announcement was clearly premature; the resulting products from Sony and Logitech were too expensive and too hard to use for most consumers. There was no reason for Google and its partners to rush Google TV out for last year's holiday season. Had they positioned the announcement at last year's I/O Conference as a technology preview, with a product release scheduled for some time in 2011, they would have had the opportunity to get developers involved, get much more usability feedback and resolve objections from television and cable networks before they went to market.
Much the same thing happened earlier this year with Android 3.0 and Motorola's Xoom. Google and Motorola were determined to beat Apple's iPad 2 to market, so they rushed out both Honeycomb (Android 3.0) and the Xoom. Third-party developers had almost no time to develop tablet-aware Android apps before the Xoom shipped, and the first version of the Xoom was much too expensive: $799 (U.S.) without a data plan, or $599 with a two-year contract. In addition, Motorola promoted the Xoom's LTE broadband compatibility, but the initial model shipped with 3G CDMA, and Motorola still hasn't released the LTE capability.
Honeycomb was rough around the edges, with almost no tablet-specific apps, and the Xoom was too expensive. It was a replay of the Google TV launch. Even though there are many more Android tablets coming this year, it looks like there won't be a big market for them until 2012 at the earliest.
If Google had given a technology preview of Google TV last year for release in 2011, and if they had previewed Honeycomb with "reference platform" tablets early this year for release in time for the holiday season, it would have given developers time to build a base of compatible apps, and hardware vendors time to build devices that took full advantage of the operating system while meeting customers' price expectations. In hindsight, it wouldn't have hurt Google and Motorola at all to ship after the iPad 2; in fact, they would have shipped better products at lower prices.
The lesson is that if you're working on platforms, not just products and services that are compatible with existing platforms, technology previews are a much better option than prematurely releasing final products.
I'm not a fan of early announcements, but when it comes to new platforms, technology previews make a lot of sense. They introduce developers, the press and potential customers to new product concepts, and they build interest and support for the formal product release. They buy time for their vendors--Nintendo said "2012", which gives them almost 18 months. They're clearly prototypes, and they give vendors the time they need to gather feedback and make changes before they go to market.
Compare this approach with what Google did with Google TV and its Android 3.0 tablets. Last year's Google TV announcement was clearly premature; the resulting products from Sony and Logitech were too expensive and too hard to use for most consumers. There was no reason for Google and its partners to rush Google TV out for last year's holiday season. Had they positioned the announcement at last year's I/O Conference as a technology preview, with a product release scheduled for some time in 2011, they would have had the opportunity to get developers involved, get much more usability feedback and resolve objections from television and cable networks before they went to market.
Much the same thing happened earlier this year with Android 3.0 and Motorola's Xoom. Google and Motorola were determined to beat Apple's iPad 2 to market, so they rushed out both Honeycomb (Android 3.0) and the Xoom. Third-party developers had almost no time to develop tablet-aware Android apps before the Xoom shipped, and the first version of the Xoom was much too expensive: $799 (U.S.) without a data plan, or $599 with a two-year contract. In addition, Motorola promoted the Xoom's LTE broadband compatibility, but the initial model shipped with 3G CDMA, and Motorola still hasn't released the LTE capability.
Honeycomb was rough around the edges, with almost no tablet-specific apps, and the Xoom was too expensive. It was a replay of the Google TV launch. Even though there are many more Android tablets coming this year, it looks like there won't be a big market for them until 2012 at the earliest.
If Google had given a technology preview of Google TV last year for release in 2011, and if they had previewed Honeycomb with "reference platform" tablets early this year for release in time for the holiday season, it would have given developers time to build a base of compatible apps, and hardware vendors time to build devices that took full advantage of the operating system while meeting customers' price expectations. In hindsight, it wouldn't have hurt Google and Motorola at all to ship after the iPad 2; in fact, they would have shipped better products at lower prices.
The lesson is that if you're working on platforms, not just products and services that are compatible with existing platforms, technology previews are a much better option than prematurely releasing final products.
Wednesday, May 11, 2011
Want to know why Xoom and PlayBook are struggling? Watch their ads
It's well-known that sales of Motorola's Xoom Android tablet have been disappointing. RIM hasn't yet announced any sales figures for its PlayBook tablet, but the early word is that its sales are also very slow. If you want to know the reason for both products' struggles, all you have to do is look at their television ads and compare them to those from Apple for the iPad 2. I'm not talking about the "artistic" value of the ads--I'm talking about the content, and what that content says about the products.
Motorola and Verizon have two Xoom ads on U.S. television; the content of both are similar, but I'll focus on the more current version. It starts with a man with an angry/aroused look on his face, breaking a notebook computer into four parts, which turns into a Xoom. Then he holds the Xoom in front of himself, still with that angry/aroused look. The commercial switches to a close-up of the screen, and a hand moving quickly between a movie, mail, a game, a video call, another movie...you get the picture. Then, it finishes with Angry/Aroused Man holding the Xoom in front of himself again.
The PlayBook ad dispenses with Angry/Aroused Man--all it shows is a close-up of the screen and a hand moving between various windows: A movie. Some images. A game. Another movie. Yet another movie. And then, the PlayBook tagline. It doesn't show a single business-oriented application, not even email, even though that's RIM's strength.
Compare that with Apple's long-running campaign for the iPad, and now the iPad 2. Apple's commercials show apps. Every commercial shows a different set of apps, for education, entertainment, medicine, business and so on. And that's the key to why the iPad 2 continues to sell extremely well, and the Xoom and PlayBook are struggling.
Both Motorola and RIM released their products well before they were ready. In the Xoom's case, the Honeycomb version of Android itself was rushed out, and developers didn't have sufficient time to build tablet-aware apps. The PlayBook shipped without native email, calendar and directory apps. That functionality is supplied by a user's BlackBerry phone, but for whatever reason, RIM decided not to show it. (If you're not a BlackBerry user, the only way to get that functionality today on a PlayBook is with web applications.)
Apple focuses on all the different ways in which an iPad 2 can be used. Motorola and RIM, without the library of tablet apps that Apple has, are focusing on eye candy. Both companies appear to have approached the tablet market in much the same way as PC manufacturers approach the PC market: Their job is to supply good hardware. The operating system is taken care of by Microsoft, and the applications are taken care of by everyone else, so they focus on the hardware. Motorola and RIM, by and large, got the hardware right: Big, viewable displays, fast dual-core processors, front and back cameras, etc. RIM, with its QNX acquisition, got the operating system right, while Motorola relied on Google, which didn't quite get there with Honeycomb.
What neither Motorola nor RIM got right was the apps, and that's the point of differentiation for tablets. The lesson for tablet manufacturers: If all you can show in your television ads are movies and games, you're not ready to ship.
Motorola and Verizon have two Xoom ads on U.S. television; the content of both are similar, but I'll focus on the more current version. It starts with a man with an angry/aroused look on his face, breaking a notebook computer into four parts, which turns into a Xoom. Then he holds the Xoom in front of himself, still with that angry/aroused look. The commercial switches to a close-up of the screen, and a hand moving quickly between a movie, mail, a game, a video call, another movie...you get the picture. Then, it finishes with Angry/Aroused Man holding the Xoom in front of himself again.
The PlayBook ad dispenses with Angry/Aroused Man--all it shows is a close-up of the screen and a hand moving between various windows: A movie. Some images. A game. Another movie. Yet another movie. And then, the PlayBook tagline. It doesn't show a single business-oriented application, not even email, even though that's RIM's strength.
Compare that with Apple's long-running campaign for the iPad, and now the iPad 2. Apple's commercials show apps. Every commercial shows a different set of apps, for education, entertainment, medicine, business and so on. And that's the key to why the iPad 2 continues to sell extremely well, and the Xoom and PlayBook are struggling.
Both Motorola and RIM released their products well before they were ready. In the Xoom's case, the Honeycomb version of Android itself was rushed out, and developers didn't have sufficient time to build tablet-aware apps. The PlayBook shipped without native email, calendar and directory apps. That functionality is supplied by a user's BlackBerry phone, but for whatever reason, RIM decided not to show it. (If you're not a BlackBerry user, the only way to get that functionality today on a PlayBook is with web applications.)
Apple focuses on all the different ways in which an iPad 2 can be used. Motorola and RIM, without the library of tablet apps that Apple has, are focusing on eye candy. Both companies appear to have approached the tablet market in much the same way as PC manufacturers approach the PC market: Their job is to supply good hardware. The operating system is taken care of by Microsoft, and the applications are taken care of by everyone else, so they focus on the hardware. Motorola and RIM, by and large, got the hardware right: Big, viewable displays, fast dual-core processors, front and back cameras, etc. RIM, with its QNX acquisition, got the operating system right, while Motorola relied on Google, which didn't quite get there with Honeycomb.
What neither Motorola nor RIM got right was the apps, and that's the point of differentiation for tablets. The lesson for tablet manufacturers: If all you can show in your television ads are movies and games, you're not ready to ship.
Monday, February 14, 2011
What's going on with Android 3.0 tablet pricing?
The annual Mobile World Congress opened this morning in Barcelona, and as expected, there were many smartphone and tablet introductions. One of the most important was LG's Optimus Pad, which will be sold in the U.S. by T-Mobile as the G-Slate. The Optimus Pad runs Android 3.0, has a dual-core processor and an 8.9" display--fairly standard so far as Android Honeycomb-based tablets go. The big shocker, however, was the price: According to Engadget, the Optimus Pad will be priced at 999 Euros, or the equivalent of $1,395 in the U.S. Even after you subtract the 19% VAT, its equivalent U.S. price is $1,075. That's almost $250 more than the most expensive iPad.
Motorola's Xoom Android 3.0 tablet, which has a 10.1" screen but otherwise is almost identical to the Optimus Pad, will be priced at $799 (U.S.) when Best Buy makes it available for pre-sale later this week. That's $30 less than Apple's price for its top-of-the-line iPad. However, Verizon is rumored to be requiring Xoom buyers to purchase at least one month of broadband data service in order to enable the tablet's WiFi interface. The least expensive data plan is $20/month, so that makes the price difference between the Xoom and the iPad only $10.
Last fall, the expectation was that WiFi Android tablets would sell for between $300 and $400, and their lower prices would give them an advantage over the iPad. Now, however, two of the three major Android 3.0 tablets announced so far are priced as high or higher than the most expensive iPad. (The third tablet, Samsung's Galaxy Tab 10.1, hasn't yet been priced.)
The iPad 2 is widely expected to be released in the next couple of months, and the big differences are likely to be dual cameras and a faster processor--the key features that differentiate the new Honeycomb tablets from the current iPad. The iPad 2 is almost certainly going to be priced no higher than the current model, so where is the market opportunity for Android 3.0 tablets?
We may eventually see Android 3.0 tablets from second- and third-tier manufacturers that are priced in the $300-$400 range, but Android tablets need to compete with the iPad now, not at some unspecified time in the future. The pricing policies of the first-tier manufacturers may end up giving the tablet market to Apple--or they may open the door for RIM's PlayBook (which the company's CEO said today would sell in a basic WiFi-only configuration for under $500) or HP's TouchPad, if HP prices it aggressively.
Motorola's Xoom Android 3.0 tablet, which has a 10.1" screen but otherwise is almost identical to the Optimus Pad, will be priced at $799 (U.S.) when Best Buy makes it available for pre-sale later this week. That's $30 less than Apple's price for its top-of-the-line iPad. However, Verizon is rumored to be requiring Xoom buyers to purchase at least one month of broadband data service in order to enable the tablet's WiFi interface. The least expensive data plan is $20/month, so that makes the price difference between the Xoom and the iPad only $10.
Last fall, the expectation was that WiFi Android tablets would sell for between $300 and $400, and their lower prices would give them an advantage over the iPad. Now, however, two of the three major Android 3.0 tablets announced so far are priced as high or higher than the most expensive iPad. (The third tablet, Samsung's Galaxy Tab 10.1, hasn't yet been priced.)
The iPad 2 is widely expected to be released in the next couple of months, and the big differences are likely to be dual cameras and a faster processor--the key features that differentiate the new Honeycomb tablets from the current iPad. The iPad 2 is almost certainly going to be priced no higher than the current model, so where is the market opportunity for Android 3.0 tablets?
We may eventually see Android 3.0 tablets from second- and third-tier manufacturers that are priced in the $300-$400 range, but Android tablets need to compete with the iPad now, not at some unspecified time in the future. The pricing policies of the first-tier manufacturers may end up giving the tablet market to Apple--or they may open the door for RIM's PlayBook (which the company's CEO said today would sell in a basic WiFi-only configuration for under $500) or HP's TouchPad, if HP prices it aggressively.
Saturday, February 12, 2011
The iPad gets a vote of confidence at the Chicago Auto Show
I spent a few hours at the Chicago Auto Show this afternoon, and I was surprised by the number of iPads on the show floor--not those brought by visitors, but those being used by the auto companies. Several car companies were using iPads for portable data collection, where company representatives were gathering visitors' information for mailing lists and contests.
What I found more interesting, however, is that some companies, including Hyundai, had turned iPads into fixed kiosks that visitors could use to enter their own information. Retail kiosks tend to be expensive computer displays that are built to take severe usage, but here were iPads being used for the same purpose. (You could tell they were iPads by their user interfaces, and in Hyundai's case, because they thoughtfully cut out holes in the backs of the kiosks to show the Apple logo.) I looked at many of the kiosks in a number of exhibits and didn't see a single one that had failed.
Now, this was the first weekend day that the show was open to the public, so it's likely that some of the iPads will fail by the time the show ends on February 20th. However, if an iPad fails, the cost to replace it is probably $500. (Who needs 3G or a lot of memory in order to collect names and addresses for a single app?) Compare that to the cost of a custom kiosk or even a portable data collection computer from someone like Motorola. The iPad is making waves in an application that I hadn't considered, and this year's crop of new tablets will get in on the action as soon as customers can judge their reliability.
What I found more interesting, however, is that some companies, including Hyundai, had turned iPads into fixed kiosks that visitors could use to enter their own information. Retail kiosks tend to be expensive computer displays that are built to take severe usage, but here were iPads being used for the same purpose. (You could tell they were iPads by their user interfaces, and in Hyundai's case, because they thoughtfully cut out holes in the backs of the kiosks to show the Apple logo.) I looked at many of the kiosks in a number of exhibits and didn't see a single one that had failed.
Now, this was the first weekend day that the show was open to the public, so it's likely that some of the iPads will fail by the time the show ends on February 20th. However, if an iPad fails, the cost to replace it is probably $500. (Who needs 3G or a lot of memory in order to collect names and addresses for a single app?) Compare that to the cost of a custom kiosk or even a portable data collection computer from someone like Motorola. The iPad is making waves in an application that I hadn't considered, and this year's crop of new tablets will get in on the action as soon as customers can judge their reliability.
Monday, December 06, 2010
No "true" Android tablets until mid-2011?
Andy Rubin, the "father" of Android, was interviewed by Walt Mossberg and Kara Swisher at the D: Dive into Mobile conference this evening. After displaying and talking about the Samsung Nexus S, which will be the first mobile phone to ship running Android 2.3, or Gingerbread, Rubin showed a prototype of a Motorola tablet running Android and a new version of Google Maps. Mossberg asked Rubin what version of Android the tablet was running, and he said "This is Honeycomb. And it'll be out sometime next year."
That reply, along with other things that Rubin said, strongly suggest that Honeycomb, not Gingerbread, will be the first "officially sanctioned" version of Android for tablets. Given how long it takes Google's carrier and hardware partners to roll out new versions of Android, that means that we're unlikely to see tablets with Google's full endorsement until mid-2011 at the earliest. By "full support", I mean support of and permission to distribute all of Google's apps, access to the Android Marketplace, and a solid library of third-party apps designed to take advantage of the tablet's screen size. There may be tablets with pre-Gingerbread versions of Android that get "special dispensations" from Google, as Samsung's Galaxy Tab did, but no wide selection of fully-supported Android tablets before Honeycomb.
There will undoubtedly be plenty of tablet prototypes running Gingerbread at the Consumer Electronics Show next month, but it's almost certain that Apple will ship its second generation of tablets before the first Honeycomb tablets ship.
That reply, along with other things that Rubin said, strongly suggest that Honeycomb, not Gingerbread, will be the first "officially sanctioned" version of Android for tablets. Given how long it takes Google's carrier and hardware partners to roll out new versions of Android, that means that we're unlikely to see tablets with Google's full endorsement until mid-2011 at the earliest. By "full support", I mean support of and permission to distribute all of Google's apps, access to the Android Marketplace, and a solid library of third-party apps designed to take advantage of the tablet's screen size. There may be tablets with pre-Gingerbread versions of Android that get "special dispensations" from Google, as Samsung's Galaxy Tab did, but no wide selection of fully-supported Android tablets before Honeycomb.
There will undoubtedly be plenty of tablet prototypes running Gingerbread at the Consumer Electronics Show next month, but it's almost certain that Apple will ship its second generation of tablets before the first Honeycomb tablets ship.
Sunday, September 19, 2010
When "a better mousetrap" isn't enough
You've heard the saying "Build a better mousetrap, and the world will beat a path to your door." It's the mantra of many engineering-driven organizations. Unfortunately, it's not true. We all know examples of products that clearly were technologically inferior but that went on to great market success. In the U.S., one of the best examples was Sony's Betamax vs. Panasonic's and JVC's VHS. Most industry observers felt that Betamax was the better product--it certainly had better video quality. However, Betamax had two quality modes that allowed either one or two hours of recording on a single tape. VHS, on the other hand, had three modes that allowed one, two or three, and eventually two, four or six hours of recording. The picture looked better on Betamax, but consumers could purchase many fewer tapes with VHS, so it was seen as a much better value.
Sometimes, the most important innovations from technology companies have little or nothing to do with technology. In my opinion, Microsoft's two greatest innovations, the two things most responsible for its success, were software suites and per-machine pricing.
In the early days of the PC industry, consumers purchased applications one-at-a-time, based on their needs. If you wanted a word processor, WordPerfect and Wordstar were the preferred choices. The most popular spreadsheets by far were initially VisiCalc and then Lotus 1-2-3 and Borland's Quattro Pro. Microsoft had its own word processor, Word, and its own spreadsheet, first Multiplan and then Excel, but neither one was overtaking the market leaders. Then, Microsoft had the brilliant idea of bundling all of its office productivity applications together and selling them at about the same price as a copy of its competitors' single-purpose applications. The result was Microsoft Office.
Consumers immediately saw the value in Office. They might have preferred WordPerfect as a word processor or 1-2-3 as a spreadsheet, but for the same price, they could get a word processor, a spreadsheet and a presentation tool (PowerPoint.) Microsoft Office and its applications quickly dominated the market. Competitors tried to respond by acquiring other products to create their own suites, but Microsoft's market dominance was never challenged.
Microsoft's second innovation was per-machine licensing. Let's say that you were a large PC manufacturer, and you had a choice of a variety of operating systems--in particular, Microsoft's PC-DOS, Digital Research's DR-DOS and IBM's OS/2. Each one of the companies would sell you their operating systems at a price based on the total number of copies that you purchased. However, Microsoft came up with a unique new pricing model based not on the number of copies of PC-DOS that you shipped but rather, the number of computers that could run PC-DOS that you shipped. It cost much less per unit to license PC-DOS under this new model, but you had to buy a copy for every computer you built that could run PC-DOS.
This model almost immediately squeezed Microsoft's competitors out of the business of selling to computer manufacturers. PC-DOS was the "industry standard" and customers expected it. If you also wanted to offer DR-DOS, which many people thought was superior to PC-DOS, you had two choices: Buy only the copies of PC-DOS that you needed, at a much higher price that you'd have to pass on to consumers, or buy two operating systems--PC-DOS for every machine, plus DR-DOS for some models. Very quickly, manufacturers decided that PC-DOS was good enough, and it wasn't worth raising prices or buying two copies of operating systems and throwing one away in order to offer a choice.
When Microsoft launched Windows, which was originally an add-on to DOS, it did the same thing: Manufacturers who wanted the lowest prices had to license DOS and Windows together for every machine that could run them. Competitive graphic environments such as GEM and Go didn't have a chance. This pricing model, more than anything else, built Microsoft's monopoly in desktop operating systems.
Have you ever wondered why Intel processors have been used by the vast majority of computer manufacturers for years, even when AMD had equivalent (or better) processors at lower prices? One big reason was that Intel was paying computer manufacturers under the table not to use AMD's processors (a fact that was recently admitted by Intel and Dell,) but Intel had another, above-board tool for getting buy-in. That Intel "Bum-bum-bum-bum" sound that you hear at the end of many PC commercials? Those commercials are paid for in large part by Intel. Through the use of co-op agreements and spiffs (sometimes called "sales promotion incentive funds), Intel reviews the commercials, and if they're approved will often pay 50% or more of the cost to air the ads. For the PC manufacturers, it's like doubling their advertising budgets. Intel won't approve payments for any ads that mention any computers using a competing processor, so it's a strong incentive to stick with Intel.
That brings us to a current example: How much is it worth to put the "Google" logo on your smartphones and have access to the Android Market? If you're Motorola or Samsung, it's apparently worth quite a lot. According to a lawsuit filed last week by Skyhook, a geopositioning technology company, Google withheld its approval for usage of the Google logo and access to the Android Market in order to force both companies to drop Skyhook in favor of Google's own positioning services. According to Skyhook, Google operates an "Android Compatibility Program," and products must be approved by this program in order to carry Google trademarks, license Google applications and gain access to the Android Market.
The Android Compatibility Program has two components: The Compatibility Test Suite, a software test suite that tests whether the submitted hardware and software are compatible with published Android specifications, and the Compliance Definition Document, which has additional requirements for what constitutes full compliance with Android specifications. According to Skyhook, the Compatibility Test Suite is an objective test that can be run by manufacturers and gives "go/no-go" answers, while the Compliance Definition Document is an amorphous, subjective document that can be freely interpreted by Google employees.
Skyhook claims that when Motorola submitted a phone that incorporated Skyhook's geolocation system, Google demanded that Skyhook share its geolocation information with Google in order to get approval. When Skyhook refused, Google then demanded that Motorola's phone run Skyhook's and Google's own geolocation systems simultaneously, which would have used far too much power and would have been impractical. Google additionally demanded that whenever the Skyhook system was in use, the phone's user had to be warned that their location data was going over a third-party network and might not be secure. After Skyhook refused to implement this final specification, Google demanded that Motorola remove the Skyhook system completely from its phone in order to get certification, and Motorola complied.
A second company, named "Company X" in Skyhook's lawsuit that is most likely Samsung, also adopted the Skyhook technology, and initially received shipping approval from Google. However, Motorola learned of the decision and requested that it be allowed to reinstate Skyhook's technology, at which point Google withdrew its approval to ship and reinstated it only after Company X removed Skyhook's technology from its phone.
As you can see, it's usually the exception when the better mousetrap wins, not the rule.
Sometimes, the most important innovations from technology companies have little or nothing to do with technology. In my opinion, Microsoft's two greatest innovations, the two things most responsible for its success, were software suites and per-machine pricing.
In the early days of the PC industry, consumers purchased applications one-at-a-time, based on their needs. If you wanted a word processor, WordPerfect and Wordstar were the preferred choices. The most popular spreadsheets by far were initially VisiCalc and then Lotus 1-2-3 and Borland's Quattro Pro. Microsoft had its own word processor, Word, and its own spreadsheet, first Multiplan and then Excel, but neither one was overtaking the market leaders. Then, Microsoft had the brilliant idea of bundling all of its office productivity applications together and selling them at about the same price as a copy of its competitors' single-purpose applications. The result was Microsoft Office.
Consumers immediately saw the value in Office. They might have preferred WordPerfect as a word processor or 1-2-3 as a spreadsheet, but for the same price, they could get a word processor, a spreadsheet and a presentation tool (PowerPoint.) Microsoft Office and its applications quickly dominated the market. Competitors tried to respond by acquiring other products to create their own suites, but Microsoft's market dominance was never challenged.
Microsoft's second innovation was per-machine licensing. Let's say that you were a large PC manufacturer, and you had a choice of a variety of operating systems--in particular, Microsoft's PC-DOS, Digital Research's DR-DOS and IBM's OS/2. Each one of the companies would sell you their operating systems at a price based on the total number of copies that you purchased. However, Microsoft came up with a unique new pricing model based not on the number of copies of PC-DOS that you shipped but rather, the number of computers that could run PC-DOS that you shipped. It cost much less per unit to license PC-DOS under this new model, but you had to buy a copy for every computer you built that could run PC-DOS.
This model almost immediately squeezed Microsoft's competitors out of the business of selling to computer manufacturers. PC-DOS was the "industry standard" and customers expected it. If you also wanted to offer DR-DOS, which many people thought was superior to PC-DOS, you had two choices: Buy only the copies of PC-DOS that you needed, at a much higher price that you'd have to pass on to consumers, or buy two operating systems--PC-DOS for every machine, plus DR-DOS for some models. Very quickly, manufacturers decided that PC-DOS was good enough, and it wasn't worth raising prices or buying two copies of operating systems and throwing one away in order to offer a choice.
When Microsoft launched Windows, which was originally an add-on to DOS, it did the same thing: Manufacturers who wanted the lowest prices had to license DOS and Windows together for every machine that could run them. Competitive graphic environments such as GEM and Go didn't have a chance. This pricing model, more than anything else, built Microsoft's monopoly in desktop operating systems.
Have you ever wondered why Intel processors have been used by the vast majority of computer manufacturers for years, even when AMD had equivalent (or better) processors at lower prices? One big reason was that Intel was paying computer manufacturers under the table not to use AMD's processors (a fact that was recently admitted by Intel and Dell,) but Intel had another, above-board tool for getting buy-in. That Intel "Bum-bum-bum-bum" sound that you hear at the end of many PC commercials? Those commercials are paid for in large part by Intel. Through the use of co-op agreements and spiffs (sometimes called "sales promotion incentive funds), Intel reviews the commercials, and if they're approved will often pay 50% or more of the cost to air the ads. For the PC manufacturers, it's like doubling their advertising budgets. Intel won't approve payments for any ads that mention any computers using a competing processor, so it's a strong incentive to stick with Intel.
That brings us to a current example: How much is it worth to put the "Google" logo on your smartphones and have access to the Android Market? If you're Motorola or Samsung, it's apparently worth quite a lot. According to a lawsuit filed last week by Skyhook, a geopositioning technology company, Google withheld its approval for usage of the Google logo and access to the Android Market in order to force both companies to drop Skyhook in favor of Google's own positioning services. According to Skyhook, Google operates an "Android Compatibility Program," and products must be approved by this program in order to carry Google trademarks, license Google applications and gain access to the Android Market.
The Android Compatibility Program has two components: The Compatibility Test Suite, a software test suite that tests whether the submitted hardware and software are compatible with published Android specifications, and the Compliance Definition Document, which has additional requirements for what constitutes full compliance with Android specifications. According to Skyhook, the Compatibility Test Suite is an objective test that can be run by manufacturers and gives "go/no-go" answers, while the Compliance Definition Document is an amorphous, subjective document that can be freely interpreted by Google employees.
Skyhook claims that when Motorola submitted a phone that incorporated Skyhook's geolocation system, Google demanded that Skyhook share its geolocation information with Google in order to get approval. When Skyhook refused, Google then demanded that Motorola's phone run Skyhook's and Google's own geolocation systems simultaneously, which would have used far too much power and would have been impractical. Google additionally demanded that whenever the Skyhook system was in use, the phone's user had to be warned that their location data was going over a third-party network and might not be secure. After Skyhook refused to implement this final specification, Google demanded that Motorola remove the Skyhook system completely from its phone in order to get certification, and Motorola complied.
A second company, named "Company X" in Skyhook's lawsuit that is most likely Samsung, also adopted the Skyhook technology, and initially received shipping approval from Google. However, Motorola learned of the decision and requested that it be allowed to reinstate Skyhook's technology, at which point Google withdrew its approval to ship and reinstated it only after Company X removed Skyhook's technology from its phone.
As you can see, it's usually the exception when the better mousetrap wins, not the rule.
Friday, September 17, 2010
Not much on the Android tablet front for this holiday season?
Two pieces of news point provide some insight into the timing of the next major release of Google's Android, and its impact on Android tablets for the coming holiday season. Yesterday, Samsung formally announced that all four major U.S. mobile carriers will sell the Galaxy Tab in the U.S., starting before the end of the year. However, the company said that the Galaxy Tab will ship without 4G support and will not work as a phone. Today, Motorola announced in the Wall Street Journal that it will delay introduction of its first Android tablet until next year.
Let's put these two announcements in perspective: Google has said that the current version of Android, 2.2, also called Froyo, is not appropriate for tablets. While Google will approve access for devices to its Android Market on a case-by-case basis, the company has called for tablet vendors to wait for the release of Android 3.0, also called Gingerbread. Motorola Co-CEO Sanjay Jha seconded Google's recommendation, saying that he doesn't believe that Froyo is appropriate for tablets and that Motorola will wait to release its tablet until Android is ready.
In yesterday's announcement, Samsung said that while the Galaxy Tab will run Froyo, it has written apps specifically for the device to take advantage of its capabilities. Samsung warned that most existing Android Market apps won't run properly on the Galaxy Tab.
Consider one additional item: Verizon is launching its LTE 4G service in 30 cities in the U.S. before the end of the year, and Motorola was widely reported to be supplying a tablet for that launch. Therefore, there was an assumption that Google would release Gingerbread in November. However, we now know that the Motorola tablet won't ship until 2011 and that Samsung won't support 4G in the Galaxy Tab when it ships later this year.
Put it all together, and it's fairly clear that Gingerbread won't ship until 2011. That means that all of the Android tablets that ship this year will be using an operating system unsuited for tablets, and will have limited or no access to the Android Market. For these reasons, I believe that the forecasts for big sales of Android tablets this holiday season are going to have to be scaled back considerably.
Apple will continue to have a largely open field, unhindered by significant competition, until next year. I have no idea if there's any truth to the rumors that Apple will launch a 7" iPad in time for the holiday season, but if they do, it will only add momentum to Apple's tablet business and push competitors deeper in the hole for 2011.
Let's put these two announcements in perspective: Google has said that the current version of Android, 2.2, also called Froyo, is not appropriate for tablets. While Google will approve access for devices to its Android Market on a case-by-case basis, the company has called for tablet vendors to wait for the release of Android 3.0, also called Gingerbread. Motorola Co-CEO Sanjay Jha seconded Google's recommendation, saying that he doesn't believe that Froyo is appropriate for tablets and that Motorola will wait to release its tablet until Android is ready.
In yesterday's announcement, Samsung said that while the Galaxy Tab will run Froyo, it has written apps specifically for the device to take advantage of its capabilities. Samsung warned that most existing Android Market apps won't run properly on the Galaxy Tab.
Consider one additional item: Verizon is launching its LTE 4G service in 30 cities in the U.S. before the end of the year, and Motorola was widely reported to be supplying a tablet for that launch. Therefore, there was an assumption that Google would release Gingerbread in November. However, we now know that the Motorola tablet won't ship until 2011 and that Samsung won't support 4G in the Galaxy Tab when it ships later this year.
Put it all together, and it's fairly clear that Gingerbread won't ship until 2011. That means that all of the Android tablets that ship this year will be using an operating system unsuited for tablets, and will have limited or no access to the Android Market. For these reasons, I believe that the forecasts for big sales of Android tablets this holiday season are going to have to be scaled back considerably.
Apple will continue to have a largely open field, unhindered by significant competition, until next year. I have no idea if there's any truth to the rumors that Apple will launch a 7" iPad in time for the holiday season, but if they do, it will only add momentum to Apple's tablet business and push competitors deeper in the hole for 2011.
Thursday, August 26, 2010
That sound you hear is TiVo circling the drain
Residents of Alviso, California have reported hearing a strange "swishing" sound for several weeks. That sound has now been identified as TiVo circling the drain. TiVo's fiscal second-quarter financial results were released yesterday, and the company is continuing its long downward spiral:
In my opinion, it's time for TiVo to actively begin looking for an acquirer. The company still has some valuable patented technology, but as time goes on, more companies are figuring out ways to get around those patents, so TiVo management needs to move while it still has something to sell. TiVo could be integrated into the businesses of set-top box powerhouses such as Motorola, Cisco and Pace. Its DVR and advertising monitoring technologies could be valuable to Google in the future development of Google TV.
- The company lost 125,000 subscribers in the quarter, and its total subscriber base stands at 2.5 million vs. 3.1 million last year, down 22%.
- Subscriber churn in the quarter was 1.9%, up from 1.5% a year ago.
- Revenues fell 11% overall to $51.6 million, and the services and technology component of revenues fell 14.2% to $42.1 million.
- The company posted an overall loss of $15.3 million, compared to $2.7 million a year ago.
- TiVo has been claiming for several years that licensing deals with cable and satellite operators would make up the difference, but companies like Comcast have been extremely slow to roll out services based on TiVo's technology.
In my opinion, it's time for TiVo to actively begin looking for an acquirer. The company still has some valuable patented technology, but as time goes on, more companies are figuring out ways to get around those patents, so TiVo management needs to move while it still has something to sell. TiVo could be integrated into the businesses of set-top box powerhouses such as Motorola, Cisco and Pace. Its DVR and advertising monitoring technologies could be valuable to Google in the future development of Google TV.
Monday, July 26, 2010
Pace to acquire 2Wire for $475 million
On the heels of passing Motorola in the worldwide set-top box business, Pace will acquire 2Wire for $475 million. 2Wire supplies DSL routers for AT&T and other service providers, and also supplies media management software. Pace has recently been chosen to provide next-generation set-top boxes to Comcast, so the addition of 2Wire will give Pace an excellent position in both the U.S. Cable and IPTV markets.
Thursday, June 17, 2010
Big set-top box changes underway at Comcast
ESPN 3D, the cable network carrying 3D coverage of the World Cup in the U.S., is available to cable operators via both MPEG-2 and MPEG-4 compression. MPEG-4 is significantly more bandwidth-efficient than MPEG-2. and according to Cable360, Comcast customers who want 3D programming will have to use MPEG-4 compatible set-top boxes starting in August. Comcast has approximately 10 million MPEG-4 set-top boxes in the field, and 25 million set-top boxes that only support MPEG-2.
Most of Comcast's MPEG-4 set-top boxes are from Motorola, but the company is said to have chosen Pace to supply its next-generation set-top boxes. The Pace STBs will support MPEG-4 H.264 compression and Tru2Way applications, and they may be compatible with Switched Digital Video (SDV) services. Comcast's choice of Pace will have a major impact on both Motorola and Cisco in the U.S. market. Pace has been very strong everywhere but the U.S., but supplying the largest video service provider in the U.S. will dramatically increase its presence and shake up the market.
Most of Comcast's MPEG-4 set-top boxes are from Motorola, but the company is said to have chosen Pace to supply its next-generation set-top boxes. The Pace STBs will support MPEG-4 H.264 compression and Tru2Way applications, and they may be compatible with Switched Digital Video (SDV) services. Comcast's choice of Pace will have a major impact on both Motorola and Cisco in the U.S. market. Pace has been very strong everywhere but the U.S., but supplying the largest video service provider in the U.S. will dramatically increase its presence and shake up the market.
Tuesday, May 25, 2010
Pace passes Motorola on the set top, TiVo supplies Technicolor with PVR software
There were two big pieces of news in the set-top box business yesterday. First, CED reported that, based on preliminary numbers from IMS Research, Pace has overtaken Motorola to become the world's largest set-top box supplier overall (aggregating cable, satellite and IPTV shipments). If the final report confirms this finding, it's huge news. Motorola (and General Instrument, the company that Motorola initially purchased to get into the set-top box business) has been number one in STBs for as long as anyone can remember. According to IMS, the top five STB vendors are now Pace, Motorola, Technicolor (formerly Thomson,) Cisco and Humax.
In related news, TiVo will provide PVR software to Technicolor for its STBs. This announcement is potentially a huge win for TiVo, which has struggled in its efforts to get its PVR software deployed on set-top boxes other than its own. (There's a deal in place with Comcast, but the rollout has been incredibly slow.) Technicolor is the leader in supplying STBs to satellite operators worldwide.
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In related news, TiVo will provide PVR software to Technicolor for its STBs. This announcement is potentially a huge win for TiVo, which has struggled in its efforts to get its PVR software deployed on set-top boxes other than its own. (There's a deal in place with Comcast, but the rollout has been incredibly slow.) Technicolor is the leader in supplying STBs to satellite operators worldwide.
Wednesday, January 06, 2010
Google's Nexus One: Darwin at Work?
Google formally announced its Nexus One smartphone yesterday, and the trade press, many of whom had weeks to play with the phone prior to the announcement, was free to tell what it thought of the new phone. The verdict seems to be that it's the best Android phone to date, and a worthy competitor to Apple's 3GS. Now, we're going to see if Darwin was right.
Apple's iPhone is an excellent example of a closed ecosystem--everything is controlled by Apple, especially the pace of change. In the Android ecosystem, Google has limited control, in that it controls the pace of new Android operating system releases, but since Android is open source and anyone can build compatible devices, we're seeing a rate of change faster than anything in the Apple ecosystem. The Motorola Droid, which was the best Android smartphone, was supplanted by the Nexus One in just a few months. Motorola already has the next generation of the Droid design in testing, and other players, such as Samsung and Sony Ericsson, are hard at work on their own products.
The only real advantage that Apple has left is its lead in applications, which is still substantial. My suspicion is that Apple is going to try to change the topic of conversation later this month to its new tablet computer, which will likely use the iPhone's operating system. If that happens, Android will once again be playing catch-up. Nevertheless, the iPhone/Android battle is an excellent laboratory for testing evolutionary theory: Is a controlled or an open ecosystem better at producing valuable innovation? Apple's closed ecosystem has led the pack so far, but it's Android's turn to demonstrate the value of openness.
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Apple's iPhone is an excellent example of a closed ecosystem--everything is controlled by Apple, especially the pace of change. In the Android ecosystem, Google has limited control, in that it controls the pace of new Android operating system releases, but since Android is open source and anyone can build compatible devices, we're seeing a rate of change faster than anything in the Apple ecosystem. The Motorola Droid, which was the best Android smartphone, was supplanted by the Nexus One in just a few months. Motorola already has the next generation of the Droid design in testing, and other players, such as Samsung and Sony Ericsson, are hard at work on their own products.
The only real advantage that Apple has left is its lead in applications, which is still substantial. My suspicion is that Apple is going to try to change the topic of conversation later this month to its new tablet computer, which will likely use the iPhone's operating system. If that happens, Android will once again be playing catch-up. Nevertheless, the iPhone/Android battle is an excellent laboratory for testing evolutionary theory: Is a controlled or an open ecosystem better at producing valuable innovation? Apple's closed ecosystem has led the pack so far, but it's Android's turn to demonstrate the value of openness.
Sunday, January 03, 2010
Droid Doesn't?
I just noticed a Verizon commercial where they're giving away a HTC Droid Eris if you purchase a Motorola Droid. These kinds of deals usually don't happen unless sales slow down, which makes me wonder if Droid sales have already peaked. Verizon may also be running the promotion as a preemptive strike against the Google Nexus One, which is scheduled to be formally announced this coming Tuesday. Engadget's early review claims that the Nexus One is faster and better-designed than the Motorola Droid and slightly thinner than the iPhone 3GS.
Handset manufacturers competing in the Android space aren't going to be able to keep a "best-of-breed" position for very long. Motorola leapfrogged HTC, and now HTC looks like it's going to leapfrog Motorola. Samsung and Sony Ericsson are also in the market. It's going to be very tough to compete unless you've got the ability to crank out improved models quickly.
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Handset manufacturers competing in the Android space aren't going to be able to keep a "best-of-breed" position for very long. Motorola leapfrogged HTC, and now HTC looks like it's going to leapfrog Motorola. Samsung and Sony Ericsson are also in the market. It's going to be very tough to compete unless you've got the ability to crank out improved models quickly.
Thursday, October 30, 2008
Goodbye, Moto?
IDC's numbers for the largest mobile phone global suppliers by volume for the third quarter of 2008 are out, and Motorola has slipped to fourth place, down almost 32% from the same quarter last year. Nokia remains #1, Samsung is #2, and Sony Ericsson, which was once all but given up for dead, has passed Motorola to be #3. LG Electronics is #5 and could pass Motorola soon, and Apple is #6 in shipments and #3 in revenues.
At the same time, Motorola announced that it lost $397 million on $7.5 billion in revenue in the third quarter, and has postponed its plans to spin off its mobile phone business until some time after 2009. They're undoubtedly facing the reality that they won't be able to get any reasonable price for their mobile phone division until the current recession lifts. The only question is whether or not they'll have a viable business to spin off by that time.
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At the same time, Motorola announced that it lost $397 million on $7.5 billion in revenue in the third quarter, and has postponed its plans to spin off its mobile phone business until some time after 2009. They're undoubtedly facing the reality that they won't be able to get any reasonable price for their mobile phone division until the current recession lifts. The only question is whether or not they'll have a viable business to spin off by that time.
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