Tag: IT Futures

Expect More Casualties

    Jim D

Smart phones, tablets, and their digital ecosystems have had a stunning impact on a range of industries in just a few short years. Those platforms changed how we work, how we shop, and how we interact with each other. And their disruption of traditional product companies has only just begun.

The first casualties were the entrenched smart phone vendors themselves, as IOS and Android devices and their platforms rose to prominence. It is remarkable that BlackBerry, which owned half of the US smart phone industry at the start of 2009, saw its share collapse to barely 10% by the end of 2010 and to less than 1% in 2014, even as it responded with comparable devices. It’s proving nearly impossible for BlackBerry to re-establish its foothold in a market where your ‘platform’, including your OS software and its features, the number of apps in your store, the additional cloud services, and the momentum in your user or social community are as important as the device.

A bit further afield is the movie rental business. Unable to compete with electronic delivery to a range of consumer devices, Blockbuster filed for bankruptcy protection in September 2010 just 6 years after its market peak. Over in another content business, Borders, the slowest of the big bookstore chains, filed for bankruptcy shortly after, while the other big bookstore chain, Barnes & Noble, has hung on with its Nook tablet and better store execution — a “partial” platform play. But the likes of Apple, Google, and Amazon have already won this race, with their vibrant communities, rich content channels , value-added transactions (Geniuses and automated recommendations), and constantly evolving software and devices. Liberty Mutual recently voted on the likely outcome of this industry with its disinvestment from Barnes & Noble.

What’s common to these early casualties? They failed to anticipate and respond to fundamental business model shifts brought on by advances in mobile, cloud computing, application portfolios and social communities. Combined, these technologies have evolved to lethal platforms that can completely overwhelm established markets and industries.  They failed to recognize that their new competitors were operating on a far more comprehensive level than their traditional product competitors. Competing on product versus platform is like a catapult going up against a precision-guided missile.

Sony provides another excellent example of a superior product company (remember the Walkman?) getting mauled by platform companies. Or consider the camera industry: IDC predicts that shipments of what it calls “interchangeable-lens cameras” or high end digital cameras peaked in 2012 and will decline 9.1% this year compared with last year  as the likes of Apple, HTC, Microsoft, and Samsung build high-quality cameras into their mobile devices. By some estimates, the high-end camera market in 2017 will be half what it was in 2012 as those product companies try to compete against the platform juggernauts.

The casualties will spread throughout other industries, from environmental controls to security systems to appliances. Market leadership will go to those players using Android or iOS as the primary control platform.

Over in the gaming world, while the producers of content (Call of Duty, Assassin’s Creed, Madden NFLC, etc.) are doing well, the console makers are having a tougher time. The market has already forever split  into games on mobile devices and those for specialized consoles, making the market much more turbulent for the console makers. Wii console maker Nintendo, for example, is expected to report a loss this fiscal year. If not for some dedicated content (e.g., Mario), the game might already be over for the company. In contrast, however, Sony’s PS4 and Microsoft’s Xbox One had successful launches in late 2013, with improved sales and community growth bolstering both “partial” platforms for the long term.

In fact, the retail marketplace for all manner of goods and services is changing to where almost all transactions start with the mobile device, leaving little room for traditional stores that can’t compete on price. Those stores must either add physical value (touch and feel, in-person expertise), experience (malls with ice skating rinks, climbing walls, aquariums), or exclusivity/service (Nordstrom’s) to thrive.

It is difficult for successful product companies to move in the platform direction, even as they start to see the platforms eating their lunch. Even for technology companies, this recognition is difficult. Only earlier this year did Microsoft drop the license fee for its ‘small screen’  operating systems. After several years, Microsoft finally realized that it can’t win against a mobile platform behemoths that give away their OS while it charges steep licensing fees for its mobile platform.

It will be interesting to see if Microsoft’s hugely successful Office product suite can compete over the long term with a slew of competing ecosystem plays. By extending Office to the iPad, Microsoft may be able to graft onto that platform and maintain its strong performance. While it’s still early to predict who will ultimately win that battle, I can only reference the battle of consumer iPhone and Android versus corporate BlackBerry — and we all know who won that one.

Over the next few years, expect more battles and casualties in a range of industries, as players leveraging Android, iOS, and other cloud/community platforms take on entrenched companies. Even icons such as Sony and Microsoft are at risk, should they cling to traditional product strategies.

Meantime, the likes of Google, Apple, Amazon, and Facebook are investing in future platforms — for homes, smart cars, robotics and drones, etc. As the ongoing impacts from the smart phone platforms continue, new platforms will add further impacts, so expect more casualties among traditional product companies, even seemingly in unrelated industries. 

This post first appeared in InformationWeek in February. It has been updated. Let me know your thoughts about platform futures. Best, Jim Ditmore.

Smartphones and 2013: What we really want

    Jim D

With CES 2013 starting this week, we will see a number of new features and product introductions particularly in the Android space. Some of the new features are questionable (Do we really want our smartphones to be projectors?).  But the further fragmentation (just within Android but also with the advent of Tizen (the Linux-based OS)) will drive feature innovation and differentiation faster. And to help with that differentiation is an updated list of features that I’d like to see in 2013!

1. Multiple Personalities: It would be great to be able to use one device for personal and for business – but seamlessly. Consider a phone where your office or business mobile number ring to your phone as well as your personal number. And when your boss calls, the appropriate ring, screen background, contacts, and everything else aligns with the number calling. You can switch back and forth between your business world and your personal world on your phone, just as you do, but with one device not two (or if you are using one device today, you get both numbers, and no mixing). Some versions of these phones are available today, but not on the best smartphones, and not in a fully finished mode.

2. Multiple SIMs: Multiple SIM phones – where two or more SIM cards are active at the same time, have been available in some form since 2000. These enables you to leverage two networks at once (or have a business phone on one network, and a personal phone on another), or more easily handle different networks when traveling (e.g., one network for domestic, one for Europe and one for Asia). When you landed in a new country, you could keep your primary SIM in your phone, purchase a low cost local SIM and voila! you would still receive calls on your primary number but could make local calls inexpensively on the local SIM. Today, there are low end phones in developing markets or China where these features are available — so why not have this in the high end smartphones in the developed world? Samsung may be cracking this barrier – there are reports of a dual SIM Samsung high end smartphone. Perhaps Apple will follow? This would be much to the dismay of the carriers as it is then easy to switch carriers (call by call) and lower your costs.

3. Better, perhaps seamless voice: Siri can be good in some situations but like all other voice apps currently on the market, the limitations are real. And the limitations are particularly evident when you most need to be hands-free — like when you are driving. With the continued improvement in processor speed and voice recognition software, we should see next generation voice recognition capability that makes it an ease to use voice rather than a chore.

4. The nano-smartphone companion: How many times have you been either exercising or on a fishing trip or out for night out or an elegant evening, and the last thing you want to do is bring along a large, potentially bulky smartphone that you might lose (or drop in the lake)? Why can’t you have a nano iPod that has the same number and contacts as your iPhone that works as a passable phone? Then you can leave the iPhone at home bring your music and a nano cell phone, and not worry all evening about losing it! Again, the manufacturers must work with the carriers to enable two devices with the same number to be on the network and for you to chose to which one the calls ring. But think of the convenience and possibilities of having multiple orchestrated devices, each tuned precisely to what and when you want to use them. Isn’t this what Apple does best?

5. Better power management: Even with the continued advances in battery life, nearly everyone encounters each month times when their use or their apps have completely drained the battery. Today’s data intensive apps can chew up battery life quickly without the user being aware. Why not alert the user to high usage (rather than wait until the battery is almost dead to alert), and enable the option for power saving mode. when this mode is selected the phone OS switches apps to low power mode unless the user overrides. This will keep power hog apps from draining the battery doing unimportant tasks. It will avoid a late afternoon or evening travail when you discover your phone is dead and yet you need it to make a call.

6. Socially and physically aware: While there are plenty of apps that create social networks and provide some physical awareness and some phone plans that enable you to know where a family member is by their device location, you still require a precise device/app/option selected that minimizes the possibility of casual interaction with your known acquaintances. Consider your linked in network and when you are traveling for business, it would be excellent to be able to chose to let your links know that you are walking through O’Hare, and for those associates that chose similarly, you would know that your colleague John is at gate B5, which you happen to be walking by, and you can stop and chat before you have to catch your flight. You can chose to be anonymous, or just aware to your friends or links, or for extroverts, publicly aware. Unfortunately, this would require a common ‘awareness’ standard and security for devices and social sites, which at this stage of the social media ‘Oklahoma land rush’, it is doubtful that cooperation required would occur.

7. Better ‘offline’ capabilities: Far too many apps today still require a constant internet connection to work. Even for those apps where it is used when offline mode is likely, many apps still require an internet connection – translation apps and London tube apps come to mind. Why can’t you download 90% of the translation requirements to your app while on your home wi-fi, and then, when in Paris, bring up the app to suffice for faster translation offline instead of using international data rates? (At which point a paid translator would be cheaper and much faster). Again, I wonder how much collusion (or lack of common sense) goes on to encourage nonsensical data usage versus designing ‘data-lite’ apps.

These are the seven features I would like to see in 2013. And while I am sure that there are phones or apps that do some of the features, I think it would be an advance to have the features mainstreamed on the latest and best smartphones. (Though I am still looking for a great translation app with good ‘offline’ capability, if you know of one, please recommend it!). What features would you like to see in the next generation of smartphones in 2013?

Best, Jim Ditmore