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BlackBerry and Android: A Match Made in Mediocrity

blackBerry androidRumors abound that the beleaguered Canadian company BlackBerry is considering introducing Android-based smartphones to its lineup of products. First off, let me say I’m a little surprised that BlackBerry is still around at all! I figured they’d be long gone by now. It is a testament to how strong they were before, their entrenchment in the enterprise market, and their portfolio of technology assets that they’ve been able to stay in business to this point. Once the king of smartphones, BlackBerry’s world was turned upside down first by Apple’s iPhone and the subsequent plethora of Android-based devices. They are hardly a blip anymore in the mainstream market, and their grip on corporate accounts has been slowly but surely slipping over time. Their BlackBerry 10 (BB10) operating system was their last big salvo in the smartphone war and so far it has been largely ignored by the market at large. So now it seems that perhaps BlackBerry will turn to producing Android-based smartphones to capture any last chance at relevance.

Some industry experts think this is a good idea. To some degree, it could make some sense. BlackBerry 10 already includes an Android compatibility layer so that some Android apps will run on BlackBerry phones. This enlarges the potential library of apps that BlackBerry phones can work with. Certainly apps are critically important to a smartphone platform’s acceptance in the marketplace. So if the BB10 platform is a non-starter, why not go with an Android-based smartphone and go full-bore into that ecosystem?

Perhaps this is BlackBerry’s only option at this point. While publicly, BlackBerry is sticking with their BB10 operating system (which makes sense as to not knife the baby at this point), if they know that BB10 is ultimately doomed, their only chance at smartphone relevance is the “if you can’t beat ’em, join ’em” strategy. Since they can’t make Apple iOS devices, then Android is their only choice.

While maybe this is their only option, it doesn’t mean this is actually a good strategy for profitability. Joining the ranks of the multitude of Android smartphone manufacturers will simply dilute any differentiation the Blackberry brand had. Perhaps 10 years ago the BlackBerry brand would have stood out to the marketplace. However, in 2015, Android is a quagmire of mediocrity and the Blackberry name has not proven itself strong enough to attract customers since Apple introduced the iPhone in 2007, ushering in the New World of Technology. By becoming yet another Android smartphone manufacturer, BlackBerry will simply become another face in the crowd.

BlackBerry’s only chance is to survive in the Android marketplace is to become the flagship Android brand. With Samsung’s sudden decline in the overall smartphone market since Apple introduced their iPhone 6, there is an opening available for someone to swoop in and create a name for themselves. However, the Android marketplace is not a one that values differentiation. Android owners are hardly loyal to their devices, as has been shown with the defection rate from Samsung now that Apple has large-screen devices. I can not see a reasonable scenario where BlackBerry enters the Android market and is able to successfully compete with the other Android handset makers, not to mention Apple’s iPhone. If anything, the BlackBerry name is a symbol of the Old World of Technology and most consumers aren’t all that hip to buying a brand name from the Jurassic period of smartphones. If anyplace, the BlackBerry name may have some panache in the corporate world, but the New World of Technology has taught us that the consumer market sets the trends now. Without the consumer market, a mobile device like a smartphone has little chance of succeeding.

The bottom line is that whatever chatter you may hear about BlackBerry in the near future, don’t put too much stock in any hopeful news you may hear. Unless and until BlackBerry shows itself a resurgent force in the smartphone market, you are simply setting yourself up for another Android flash in the pan, and will likely be stuck with a device that has a dubious future, including the possible lack of timely (if any) updates for security or feature improvements.

Lack of iPhone Was Major Factor in Android Growth

Apple vs AndroidA recently uncovered Apple research study showed that prior to January of 2011, the largest factor for people buying an Android phone instead of an iPhone was that the iPhone was not available on their carrier. This was just prior to Apple releasing an iPhone for Verizon in February of 2011 and then later for Sprint in October of that year. Since last year, the iPhone is now available on the top three carriers in the United States. Not coincidentally, iPhone sales have continued to grow at record paces, and as I wrote previously, carriers who don’t have the iPhone are losing customers to those that do.

The release of the next iPhone model this fall will mark the second upgrade cycle opportunity that customers will have to switch to the iPhone on Verizon and Sprint. This past year I have seen a high number of my clients switch to the iPhone that have Verizon or Sprint. I know many people who say they are waiting for the next iPhone to switch away from their Android or BlackBerry phones this year. Assuming that this small sample size will extrapolate out further, Apple stands to benefit from some pent-up iPhone demand this upgrade cycle. By next year’s iPhone release, customers on Verizon and Sprint will have had at least two full years to complete the usual two-year contracts that most carriers require before upgrading their phones. I expect that we will see the full impact of Apple’s entry into the Verizon and Sprint markets by that time.

Regardless, even if one is inclined to look at the raw marketshare numbers of the various Android-based smartphones on the market, the reality is that pure volume does not drive the success of the smartphone market. Studies have shown that iPhone users are very different than Android users, primarily when it comes to spending money on apps or driving profits for mobile carriers. In addition, Apple makes a lot of money from their iPhone sales, where most of the various Android device makers are not generating great profits, nor does Google derive any real profit from their Android platform. For the sake of the long-term health of a platform, not making any profits doesn’t bode well for continued industry support.

The bottom line is that any perceived marketshare victories for the Android platform in the past were largely due to the simple fact that people who wanted the iPhone on their carrier couldn’t get it. After this upcoming upgrade cycle, we should see further evidence of the ever-growing dominance of the iPhone. There’s little reason to believe that the iPhone is losing its status as the premier smartphone platform, especially when bolstered by the dominance of the other iOS device, the iPad. If you are considering an iPhone or iPad purchase, proceed without hesitation. If you are planning an Android device purchase on the premise that the Android platform is reaching parity with Apple’s iOS devices, please consider very carefully before committing your money.

What the Apple-IBM Deal Means to The Rest of Us

For most, the announcement a few weeks ago of a historic strategic partnership between Apple and IBM was probably a curious aside to their daily lives. If an average person heard about the announcement at all, they probably thought that it was an interesting bit of news, but nothing worth really paying attention to. Other than those who find the Apple-IBM partnership a strange combination of companies given their history, I doubt many people gave it a second thought. While this new turn of events truly does not directly affect either the consumer or small business markets at this time, the announcement is worth taking a look at to understand the big picture.
The strategic partnership between Apple and IBM will likely solidify Apple’s position in the large enterprise market. Whereas Apple is dominating the consumer market, IBM is still probably the most respected name in corporate technology. For IBM to “bless” Apple is a big deal. While Apple has been pushing its way into large corporations through the choices of employees as consumers, to partner with IBM will only acceleate a somewhat begrudging acceptance by IT directors and their staffs. However, this is really of no direct importance to small businesses or consumers. So why does this announcement matter to the rest of us?

Truly it is a sign of the times. Fifteen years ago Apple was hardly a blip on the radar in the technology market. Now, Apple has so thoroughly dominated the consumer and small business markets that even IBM wants to partner with them in the enterprise space. For Apple to become an “accepted” vendor in the large corporate market only means that Apple’s position as a major player in the technology market will be entrenched for the long term. And it may finally push them into markets that have been historically very slow to adopt new technology such as financial and healthcare. But perhaps more importantly, this means that others in the technology market may be significantly impacted by this announcement.

For one, this may squash any of the tiny advancements that the Android platform was making into the corporate space. With the fragmentation of the Android platform, corporations were already squeamish about supporting Android. Samsung was the only company that truly has any unified marketshare and they are not a big name in corporate IT. Now IT departments can lean on the trust that executives have in the IBM name to support Apple iPhones and iPads.

The bigger impact, however, may be on Microsoft. Given that Microsoft’s mobile platform has virtually no presence in the consumer market and their small business influence is quickly fading each day, the large enterprise market is their stronghold. If IBM’s influence can push Apple into companies that would have otherwise looked at Microsoft, this could be a significant blow to Microsoft. Where Android isn’t really a significant money-maker for Google, any hit that Microsoft takes in the enterprise market could mean big drops in revenue.

The bottom line is that Apple is in an extremely strong position now. If anyone had any perceptions left over from the 1990’s of Apple being  a second-class citizen in the technology market, it is now time to wipe those thoughts clean. Similarly, perceptions of Microsoft being the dominant name in technology should be strongly reconsidered. While Microsoft is still making a lot of money today, the rapid pace of technology change has left them very vulnerable.

The Decline of BlackBerry and Windows in the Smartphone Market

State of the Tech Guest post by Lucy Price

nokia-blackberryOperating system giant Microsoft may have moved ahead of BlackBerry (BB) with their Windows Phone (WP) devices in terms of market share but we can’t set aside the reality that both platforms are struggling in third and fourth place. Android and Apple now command the Smartphone market once controlled by BlackBerry and Microsoft. Can these two once dominant players survive? What are the main reasons for their fall?

The Current Market Situation

According to International Data Corporation (IDC)’s latest statistics:

  • Android has almost 73% global market share with 187 million handsets sold in Q2 2013;
  • Apple’s iOS has 13.2% market share with 31.2 million handsets sold;
  • Windows Phone has 3.7% share with 8.7 million units shipped
  • and BlackBerry OS, in spite of releasing their new BB10 operating system earlier this year, dropped to fourth place with only 2.9% share or 6.8 million units sold last quarter.

However, the smartphone market is tricky to get a handle on due to several factors:

  • Global marketshare is very different from United States marketshare. (Android 52%, iOS 40%, BlackBerry 3%, Windows 2%) The influence of the United States market on the rest of the world is significant and can not be excluded from global marketshare analysis.
  • Market share can be calculated by operating system or manufacturer. Apple is the only manufacturer of the iPhone and therefore profits from all iPhones sold, whereas there are several manufacturers of Android, Windows, and BlackBerry phones. In the Android market, only Samsung can be considered successful by measure of profitability. Profitability is ultimately why companies manufacture products and unprofitable manufacturers will not likely have longevity in the market. This could skew market share numbers in the near future.
  • Market share can be calculated by sales into the channel or sales to end-users. Not all manufacturers calculate sales in the same way.
  • In regards to platform viability, he smartphone market is tied to the tablet market. Apple’s iPad holds a stronger position in the tablet market, and Windows and BlackBerry’s shares are minuscule.
  • The smartphone market is still growing, with all major manufacturers showing growth, even as marketshare fluctuates.
  • Market share statistics are generally quoted from the most recent quarter, ignoring the entire installed base of devices currently in use.
  • Market share is only one measure of a platform’s viability. Other statistics show that iOS is actually used by more people and developers are making more money on the iOS platform. This final measurement is very important as will be shown later in this article.

Not Necessarily Inferior Hardware

If we observe the smartphones running the WP and BB platforms, we’ll notice that their specifications are at least on par with the latest innovations in mobile technology. For example the Nokia Lumia 1020 packs the most advanced camera for a mobile device so far. It boasts a 41-megapixel capacity which is far more megapixels than most other smartphones, such as the iPhone’s 8-megapixel camera.

A Lack of Applications

One major factor behind the fall of the the WP and BB platforms are their lack of applications. The WP marketplace only has 100,000 available apps according to Appcelerator’s 2013 Q2 developer survey. And many of which are mere copycats and third-grade clones of the other apps that are available in the leading platforms. For example, in lieu of the Instagram photo sharing app, they have Instacam, which offers a similar experience but with limited features and functions. Even the YouTube application is just a simple app linking the user to the web version through the device’s browser.

BlackBerry claims that their new BB 10 OS has 100,000 applications based on CRN’s latest report. But we have to take into account that 20% of that number are actually Android apps that were ported to the system with the use of an emulation engine. Moreover, these apps are actually optimized for older versions of Android, meaning, they are now outdated based on current standards and specifications.

Microsoft plus Nokia equals “Mokia”

Users need apps to maximize their smartphones’ capabilities and, so far, mobile manufacturers like Nokia are aware of this reality. Recently, the company’s VP for app development aired his disappointment towards Microsoft for the decline of Nokia sales. According to Bryan Biniak, “people rely on applications for their day-to-day life and if you don’t have something which I use in my day-to-day life I’m not going to switch [operating systems] because I don’t want to compromise the way I live my life just to switch to a phone.” Biniak also stressed that, “we are releasing new devices frequently and for every new device, if there is an app that somebody cares about that’s not there that’s a missed opportunity of a sale.”

His statements would prove prescient as exactly a week later, Nokia agreed to a $7.2B acquisition of its devices and services unit by Microsoft. Nokia is the largest manufacturer of Windows Phones through the Lumia series but sales were down 24% in spite of its record sales. Once the deal is finalized and the companies operations merged, all future smartphones will become Microsoft-branded. Building on their previous history, an acquisition like this could mean greater synergy between the two manufacturers and result in a more focused and competitive end product. But given Microsoft’s failure with their self-branded Surface tablets, Microsoft has yet to prove they can compete in the mobile device market.

Microsoft Isn’t After the Top Spot

With the emergence of Mokia, BB’s potential as a relevant competitor in smartphone market share becomes even bleaker. Peter Garnry, equity strategist at Saxo Bank, suggested that the company focus on its security and data network capabilities instead of trying to compete directly against Google, Apple, and Windows with a fourth operating system.

In an interview with Microsoft Business manager Larry Liebman, they consider their current position as a “victory.” Liebman added, “We think we’re solidly the third ecosystem right now.  That’s a huge announcement in some respects.  [WP] growing faster than anyone else right now.” While it seems a stretch to consider 3rd place a victory over the falling BlackBerry platform, Microsoft has the luxury of a significant cashflow from other markets. Windows on the PC and Microsoft Office keep Microsoft in a strong cash position for now, so they have time to develop their market share.

Creating a strong following of app developers for either Microsoft of BlackBerry is now a chicken-and-egg problem. Without a strong market share (or other platform viability measurements) developers have little incentive to create for those platforms. But without a strong app marketplace, those platforms are not likely to grow stronger. BlackBerry almost certainly does not have the cash reserves to reverse their fall. However, Microsoft with their recent purchase of Nokia and a strong cash position may just be able to weather the storm and become a strong third-place player.

About The Author

Lucy Price is a specialist in web design, branding, pop music and the latest gadgets. Her love of classical music takes up most of his spare time and she also maintains a passion for action movies. You can follow her on Twitter @lucyyyprice


RIM is Dead; Long Live BlackBerry?

BlackBerry 10The company formerly known as RIM, whose claim to fame is the BlackBerry smartphone line, has changed their name to BlackBerry. I, for one, am entirely ecstatic about this, as this will be the last sentence I will ever write explaining that RIM is the company that makes the BlackBerry. Most people had no idea who RIM was, they just assumed the company was called BlackBerry. Apparently, RIM finally got the hint. Oh, and by the way, the company also finally released their long-delayed and somewhat-anticipated new smartphone platform, the BlackBerry 10.

I long ago wrote off RIM, er BlackBerry, as dead. Once they announced they were delaying BB10 until after the 2012 holiday season, I called Time of Death. Truly, last year was their only chance at capitalizing on a new platform, and by missing the holiday season, they effectively lost an entire year. Assuming there even is room for a 3rd place competitor in the mobile device market, BlackBerry will be fighting for table scraps against Microsoft and there really won’t be any winners in that war.

By and large, most pundits agree that BlackBerry’s chances are extremely slim. But if you follow the technology industry at all, or if you are exposed to people in the technology industry, you will read or hear some positive reviews as well as some arguing that BB10 will save BlackBerry. Let me summarize why none of this matters, especially to consumers and small business owners.

While I haven’t had any hands-on with a BB10 device (the devices won’t be released until March or April), many reviews are positive regarding the BB10 user experience. I won’t argue those points. The real question should be is BB10 so much better than its competitors that it will cause a huge defection from people using iPhones or Android-based phones? Almost certainly not. Especially considering that changing phones will mean the loss of purchased apps for that platform, and in the case of the iPhone, a move away from the iTunes ecosystem. BB10, just like Microsoft’s Windows 8 phones, will have a huge challenge fighting the inertia of the installed user base of the iPhone. Evidence shows Android phone users are not as loyal, so they might gain some adopters from that platform, but not likely much of any consequence.

Why should you care if BlackBerry has a large marketshare? The reality is that most developers will not put the effort into writing Apps for a platform without a sufficient user base to profit from. But without quality Apps, a platform will not attract a large user base. It’s a chicken-and-egg problem that BlackBerry just doesn’t have the time or financial resources to overcome. Microsoft maybe, but even that’s to be seen.

One train of thought I’ve seen from technology writers is that the BlackBerry 10 will be a hit among its traditional stronghold of corporate IT departments. They claim that IT departments will be eager to upgrade the BlackBerry devices they currently deploy to their corporate users. This might be true, although there is also a chance that IT departments will be slow to adopt the entirely new BB10 platform, either because they want to take the time to thoroughly test it or because they aren’t convinced of its future. Even assuming that IT departments like the BB10 platform, the reality is that it simply doesn’t matter.

First, corporate smartphone users, who used to make up the vast majority of the market in The Old World of Technology, now make up a fraction in The New World of Technology. Consumers and small business owners now rule the roost, and they have all but forgotten about BlackBerry. Second, because of this consumerization of the technology market, the Bring Your Own Device (BYOD) movement is spreading rapidly across the corporate IT world. In a nutshell, BYOD is the idea that employees are expecting that their workplaces will support the use of their personally-owned technology devices, such as smartphones. By and large, these devices are iPhones – not BlackBerry phones. And by and large the movement is so strong that corporate IT departments have little choice but to comply with their users’ wishes. The era of corporate IT dictating smartphones to their users has passed. The idea that corporate IT will have any significant influence on the smartphone market is wishful thinking.

The bottom line is that if BlackBerry’s only hope is in corporate IT, then they have almost no chance at all. The era of trickle-down technology, where small business and consumers waited to see what technology shook out from big business, is over. Since small business and consumers drive The New World of Technology, BlackBerry has simply become irrelevant. BB10 is BlackBerry’s last gasp before they sink below the surface; don’t get dragged down with them.

Microsoft Enters the Tablet Wars

Today is a historical day for Microsoft, and not just because they released their latest operating systems (the various flavors of Windows 8 and Windows RT). By also introducing their “Surface” tablet device, today marks the first time that Microsoft has produced a computing device of any sort. For all the devices that have run Microsoft operating systems and software, Microsoft has never made PCs, never made laptops, never made smartphones, and up until now, had never made a tablet. The Surface represents a huge step for Microsoft’s future, but the important question for those planning technology purchases remains – what does Microsoft’s future hold? And how does the Surface play into that future?

At this point, Microsoft’s future is quite uncertain. For as large of a company Microsoft still is, all of their strength lies in the PC market. However, the PC market is shrinking rapidly, largely being replaced by mobile devices such as tablets and smartphones. Mobile devices won’t completely eliminate the PC market, but it will reduce it down to a size that will likely not support a company the size of Microsoft – at least not in the manner they are accustomed to existing. So while Microsoft is in no immediate danger of collapsing, such as a company like RIM, their future 5 years out is shaky at best. Microsoft’s only chance of remaining a dominant company in the future is to compete successfully in the mobile device market. Up to this point, Microsoft has had no success at all.

Windows 8/RT is Microsoft’s attempt to bridge their dominance in the PC market into success in the mobile device market. The Surface is Microsoft’s attempt to inject a level of control over an entire platform, both hardware and software as Apple has successfully done. The strategies are independent yet intertwined. If Windows 8 and RT are wildly successful on their own, it will prove that the Old World Technology paradigm of one company making software for a plethora of hardware vendors can still be viable. However, it appears that Microsoft is hedging their bets and getting their feet wet with hardware manufacturing. If Microsoft’s hardware partners can’t make inroads into the dominance of Apple’s iOS devices and Google’s Android-based devices, then Microsoft’s last hope will be to offer consumers a 100% Microsoft solution, one in which they control all aspects of production and, perhaps more importantly, marketing and promotion. The next few months should give us a good indication how successful Microsoft’s strategies will prove. Unfortunately, even today at day one, it seems they are already off to a rocky start.

So far early reviews have been mixed. The general consensus is that while Microsoft’s Surface may have strong hardware specs, the software leaves much to be desired. Too many inconsistencies and missing features plague the new Windows RT platform. While Microsoft could afford to release subpar products into the PC market, they are not afforded the same luxury in the mobile device market. Consumer expectations are set very high due to the ease-of-use and robustness of Apple’s iPhone and iPad. Consumers and small business owners are not as forgiving of flaws as are corporate IT departments. These flaws could very well hurt Windows adoption on the mobile device front.  Given the rapid pace of technology development and the speed at which products come and go, a slow start is a bad sign for a mobile device platform these days. If Microsoft strikes out with Windows on a mobile platform now, they may be relegated to a third-place also-ran, behind Apple and Google.

Microsoft is betting that those people who currently are still tied to Microsoft on the PC will hold out for Microsoft on mobile devices. While that’s Microsoft’s only bet, it’s not a good bet for consumers and small business. The mobile device market has established itself without Microsoft and will continue to entrench itself over the next few years while Microsoft is still figuring out how to catch up. I can not recommend that any small business wait to see how Microsoft fares in this market. The longer any business waits to jump into The New World of Technology, the further they fall behind their competitors who are embracing it. Waiting for Microsoft to get their act together is time that most small businesses simply can’t afford.

Stick a Fork in ’em; RIM and the BlackBerry are Done

BlackBerry DeathThe news has been going from bad to worse over the last year for the Canadian manufacturer of the BlackBerry phones, Research in Motion, also known as RIM. It is no secret that RIM’s sales have suffered ever since the iPhone was originally released back in 2007. Since then, RIM has endured misstep after misstep and is on the verge of extinction. Let’s look at some of the low-lights over the last 12 months:

  • The October 2011 BlackBerry outage was a huge PR nightmare for the already struggling company
  • RIM announced earlier this year that that their upcoming BlackBerry 10 operating system would be delayed until fall 2012.
  • RIM warned it would post a Q1 loss, its first operating loss in 8 years
  • RIM’s stock slipped under $10/share, the lowest the stock has been since 2003, and down from it’s highpoint of $147.55 in 2008
  • RIM’s announced loss for Q1 was significantly higher than expected
  • RIM cut 30% of its workforce in an attempt to preserve its cash reserves

Even with all that, I gave RIM a sliver of hope that if they could survive until the fall of this year, the release of their BlackBerry 10 operating system before this Christmas holiday season might give them some sales that could keep them breathing for another year. But now, a couple of things have happened that I believe are the final nails in the coffin for this once great company.

First, RIM has just announced that the BlackBerry 10 operating system will now be further delayed until early 2013. This means that they will miss this year’s holiday season, effectively putting them another full year behind the iPhone. That by itself is a fatal blow. Start writing the eulogy because RIM is terminal.

If that wasn’t enough, it has been confirmed that carriers are negotiating to lower the fees they pay RIM for the BlackBerry service. These fees are charged to the carriers by RIM for every subscriber that uses a BlackBerry and accounts for one-third of RIM’s revenue. RIM can ill-afford to lose any revenue right now, but it is likely that the carriers have leverage against the struggling company. Consider that there are no such fees charged by Apple for their iPhones or Google for any Android-based phones or Microsoft for any Windows-based phones. The reality is that due to the legacy nature of the BlackBerry service, RIM must support infrastructure costs that Apple or Google or Microsoft do not. When BlackBerry was king of the Old World of Smartphones, carriers just had to deal with those fees. Now with RIM on the ropes, carriers probably know they can get lower fees. So if RIM loses even more revenue it will only accelerate the end.

The question is what does “the end” mean for the BlackBerry? RIM is rumored to be courting companies to buy them out. The question is who would want to buy them? What company could do anything better with the BlackBerry brand? It may be very possible that no company is truly interested. If this is the case, the end may come suddenly and abruptly for the BlackBerry, possibly leaving their users without e-mail service if some company or companies (perhaps the carriers) do not pick up the management of the BlackBerry service infrastructure. However, even if some company does buy out RIM, will the BlackBerry brand fare any better than the Palm brand did when HP bought them out? HP couldn’t gain any marketshare with their WebOS-based devices and completely killed the line last year. The tale of Palm’s WebOS and its fate with HP seem to be have many parallels with BlackBerry’s situation to this point. Companies may be heeding HP’s costly lesson which would explain why there is little interest in purchasing RIM. Any way you look at it, It seems certain that the days of the BlackBerry are numbered. If you currently depend on the BlackBerry, it would be wise to start planning a migration to another platform as soon as possible.

The Future is Tablets … and the Future is Already Here

iPadsResearch firm NPD expects that tablet shipments will grow fivefold over the next five years and will overtake notebook shipments within that timeframe. They also predict that Apple’s iOS will still dominate the market, with over 50% marketshare.

This information is all well and good, but it doesn’t really take a rocket scientist to see this trend. As the article I linked to summarizes, tablets are quickly becoming the portable PC of choice. But not 5 years in the future – it’s happening today. However, the term “tablets” is far too generic. As I’ve said before (and others are as well), Apple’s iPad so thoroughly dominates the industry that there is no “tablet” market – there is only an iPad market. We’ve already seen that the “iPad Effect” is significantly cutting into PC marketshare. So the reality is that iPads are quickly becoming the portable PC of choice. Research firms are usually fairly conservative in their reports. So we should probably expect that given Apple’s success over the last several years, the predictions by this research firm will probably either happen much quicker or to a degree much bigger than they predict.

This report acknowledges that the tablet market has been dominated by Apple. But in the usual conservative nature of the industry, it also predicts that others will begin to make inroads, believing that the Android operating system will have 40% of the market in five years. However they base this prediction on the assumption that, “competitors become better attuned to consumer preferences and find opportunities to break new ground …” Given the way that Apple’s competitors have yet to figure out why Apple has been and continues to be a runaway success, this assumption is very weak. More likely, given Apple’s lead in the industry, it will be many, many years before anyone can “catch up”, and by then Apple may have moved on to the next big thing. If anyone thinks this isn’t possible, just take a look at the iPod market. Apple still dominates after over 10 years and the battlefield is littered with the corpses of competing devices that failed. Basically the iPod’s only competition are Apple’s own new iOS devices. The iPhone is responsible for any decline in iPod sales, but if you consider the iPhone (and the iPad) to be an iPod, then it obviously isn’t any decline at all.

The bottom line is that the future is already here. We don’t need to wait five years. Apples’s iPad is the future and the present. Other devices are years away from even getting close to where the iPad is today. But many people and business are waiting. And that is a recipe for failure. The New World of Technology gives everyone a chance to get on an even playing field. There are no more excuses for being “technology illiterate”. If you do fall behind, the only person to blame will be yourself.

Hello, Moto?

In a move that was as surprising as it is rife with possibilities, Google announced today they will purchase Motorola’s Mobility division for a staggering $12.5 billion. It is clear that this move is a game-changer for the smartphone industry. But the real question is who’s game does it change?

Is this move simply a patent portfolio purchase? Perhaps Google is trying to shore itself up against future litigation like the lawsuits their hardware partners are encountering now. But it isn’t evident that Motorola Mobility had any patents worth gobbling up. If so, likely the other players who have been purchasing patent portfolios would have been bidding. And from early reports, it appears that Google will keep Motorola Mobility running as a wholly owned and independent subsidiary. So it doesn’t appear to just be a patent grab – especially considering what Google paid. $12.5 billion is about one-third of their cash reserves.

So if Google is interested in making both the hardware and software (a la the Apple iPhone and iPad), where does this leave Google’s current Android partners? Does Google actually intend to allow other companies to continue to make Android-based phones and tablets while competing against them with their own devices? Does Google think that their partners are excited about this?

If it is true that Google wants to move to an Apple-style production model, it only reinforces the idea that Apple’s top-to-bottom control model is the only viable blueprint for the New World of smartphones. The Old World of smartphones was characterized by one company creating the software, other companies creating the hardware, and the carriers enforcing their whims on both. I’ve written many times how Google was following the footsteps of the Old World smartphone market with potentially disastrous results. Perhaps they’ve figured this out now?

Then the question becomes can Google compete against Apple in the game Apple invented? Apple has been in the hardware manufacturing business for over 35 years, has a minimum 4 year head-start on smartphone manufacturing, and has ample experience with all the business infrastructure required to run a company that makes physical products for their customers (support staff, fabrication contacts, supply chains, etc.). Google has never competed in this market before, and when they tip-toed into it with their Nexus One phone, most agree it was a disaster across the board for Google. Has Google learned from their mistakes or are they hoping that Motorola’s experience will fill in the gaps? Either way, it seems like a long shot for Google to take Apple head-on. But, after a couple of years of doing things the Old World way, perhaps Google has come to the realization it is their only viable strategy?

If so, can Google rollout this new model quickly enough to avoid a potential disaster? If Google chooses this new path, it goes against almost everything Google has said to this point regarding their strategy for the smartphone market. Not only could this destroy some of their credibility in the industry, but it could also devastate their relationships with their current hardware partners. What would happen if their partners suddenly stopped making new phones (say after the holidays this year)? Could Google’s Android platform survive such a blow? Could Google have a full-blown operation running to counter this potential so soon?

The bottom line is that this move won’t have any effect on the market until at least the beginning of next year. However, it is not too early for those considering device purchases to ponder the ramifications that this move will have. Primarily, if Google’s move destroys their relationships with their current hardware partners, what will happen to their options for support and upgradability over the next couple of years? If one buys an Android-based Samsung phone today, for example, and expects to keep it for 2 years, will they be orphaned in 6 – 9 months?

Already, Apple iOS devices have an overall ease-of-use and reliability advantage over the various Android-based devices. Now a cloud of uncertainty exists over the future of the current line-up of Android devices. At least until it is clear what Google’s plans are with this purchase and what effect it will have on their current hardware partners, I must recommend extreme prudence to those considering a purchase of an Android device.

Introducing the RIM Bleak-berry

To those that follow the industry, it’s no secret that the company that makes the Blackberry, RIM, is in trouble. From a sales perspective, they still sell a lot of devices, but from a consumer perspective, they are nearly forgotten outside of the “old” smartphone market (i.e. corporations and tech-savvy people that have had Blackberries for a long time). Industry experts have been warning that RIM has fallen way behind to Apple’s iOS (iPhone and iPad) and Google’s Android platforms for some time now. But it doesn’t take an expert to see that the operating system of the Blackberry is still rooted in it’s original design that was created in the late 90’s. It was great back then, but certainly seems dated today.

An open letter to RIM’s executive management from an anonymous RIM senior manager was recently published on the Internet. The letter portrays a company internally dysfunctional and lost on what it needs to do to successfully compete. This is the major takeaway for anyone who has any interest in the Blackberry platform.

However, while the letter is focused on RIM’s issues, it brings up many topics about the smartphone industry that I have talked about before, both in this blog and to my clients directly. It is those points that I’d like to emphasize, taking quotes from the letter.

We often make product decisions based on strategic alignment, partner requests or even legal advice — the end user doesn’t care. We simply have to admit that Apple is nailing this and it is one of the reasons they have people lining up overnight at stores around the world, and products sold out for months. These people aren’t hypnotized zombies, they simply love beautifully designed products that are user centric and work how they are supposed to work.

I’ve made reference many times to how most smartphone vendors market their products as if they are “made by geeks for geeks”. They talk about specs, speed, capacity, and how “kick-ass” they are. Yet the reality is that most other smartphones simply don’t work as well as the iPhone. What this letter points out, and I can substantiate, is regardless of all the marketing done, if a product simply doesn’t work how it is supposed to (and the common expectation is that it will work as well as the iPhone), then the end-users will not like it. For all the “cool” technology behind a product, users just want something that works and works well. The iPhone should have made this abundantly clear to all tech companies. Obviously, it hasn’t sunk in yet for most.

Until companies embrace user-focused product development AND then figure out how to successfully implement it, they won’t touch Apple. And therein lies the rub. Companies must first embrace this thinking, which is extraordinarily difficult for most tech companies to come to grips with. It won’t happen overnight. There’s a lot of corporate culture to change and that takes time. And then once that long process is over, the company actually has to figure out how to make great, user-friendly products. That of course takes vision and talent, but it also takes experience. That is experience Apple has learned over 35 years. RIM, and most tech companies, have very little of it.

There is no polite way to say this, but it’s true — BlackBerry smartphone apps suck. Even PlayBook, with all its glorious power, looks like a Fisher Price toy with its Adobe AIR/Flash apps.

The original iPhone was successful. It made people stand up and take notice. Looking back, however, it really didn’t make that much of a dent in the smartphone market. It was the next year that Apple changed the world by introducing the App Store. Since that time, the tremendous success of the App Store has catapulted iOS devices into every aspect of society. Overnight it was no longer enough to make a nice smartphone. That smartphone had to run apps – and lots of them. It took a year or two for competitors to even get into the game. Now it seems that Apple’s experience working with third-party developers as well as the polished and mature software development environment provided for the iOS (both honed for years on the Macintosh platform) have put Apple into a position where the quality of their Apps is head-and-shoulders above everyone else. No other tech company (besides Microsoft) has the wealth of experience working with developers and development tools, so it would seem that this puts RIM at a distinct disadvantage.

25 million iPad users don’t care that it doesn’t have Flash or true multitasking, so why make that a focus in our campaigns? I’ll answer that for you: it’s because that’s all that differentiates our products and its lazy marketing … My mother wants an iPad and iPhone because it is simple and appeals to her. Powerful multitasking doesn’t.

Earlier I mentioned how most smartphone companies market their products as if they were “made by geeks for geeks”. Compare this to Apple’s marketing where they highlight the simplicity and ease-of-use of their products. In many cases, Apple’s marketing is inconsequential as the real secret to their growth is word-of-mouth. Apple owners tend to become evangelistic about their devices, proudly showing them off to their friends and family who quickly purchase their own Apple products and continue to spread the word. Again, most tech companies simply don’t understand that “old world” marketing only appeals to tech-savvy people. When the smartphone market was small and made up of mostly geeks, that worked well. Now that Apple has kicked open the doors of the smartphone market to the mainstream, that type of marketing is no longer effective. But again, it will take a complete corporate culture change for a company to embrace this type of thinking, then they must create the products that are user-focused, AND then they must understand how to market it. Again, none of this will happen overnight.

The bottom line is this letter highlights the trouble with RIM, but it basically shows the fundamental weaknesses of most tech companies which Apple is currently exploiting. The secret to Apple’s success is that they are the ONLY company in the market with so much experience in user-focused computing. That experience has been gained over 35 years, starting in the dawn of the personal computer market. No other company can touch that level of expertise and it is showing now. Only the companies that are strong enough to stick around, gain the necessary experience, and change their corporate culture will have any chance of competing with Apple. Unfortunately for RIM, time is a luxury it does not seem they have. Unless RIM can pull off a miracle, dramatically change their company, and introduce products that can feasibly compete in the new world of technology, it seems their days are numbered.

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