iPads Outsell HP PCs in Q4 2011

15.4 Million iPadsDuring the keynote address introducing the New iPad, Apple announced that they sold 15.4 million iPads in the fourth quarter of 2011. Certainly, that’s a lot of iPads, but the more significant revelation is that Apple sold more iPads than HP sold PCs in that quarter. Compared to HP’s 15.1 million PCs, Apple’s 15.4 iPads meant that Apple outsold the world’s largest PC vendor during the holiday 2011 season. As more experts begin to acknowledge that the iPad is for all practical purposes a “PC”, this is a very significant development.

Of course, HP responded to Apple’s claim by saying, predictably, that traditional PCs aren’t dead and that a lot of people and companies still rely on them. Way to be stuck in the past, HP. But then they also stated that “… if you’re sending Junior off to college, the first computing product needed for homework is a PC.” Really? What exactly do you mean by that HP? Are college students actually required to purchase PCs? Or have they been increasingly choosing Apple’s Macintosh over the last 5 – 10 years? And could it just be possible that students are discovering that they can actually do most of their homework on an iPad? This isn’t even considering that in a year or two, students could be reading all of their textbooks from their iPads.

But seriously, what else would you expect to hear from a company that killed their tablet product and has nothing to sell but traditional PCs? HP’s former CEO specifically said that the “tablet effect is real“. Now there are some hard numbers to back that up. The Old World of Technology is ending right before our very eyes. If you haven’t already noticed, perhaps this is your wake-up call?

The “New” iPad

Apple today introduced the 3rd generation iPad, interestingly dubbed “The New iPad“, rather than the expected “iPad 3”. Keeping it brief, the New iPad’s updated features are a significantly higher resolution display, more powerful processor and graphics performance, improved camera, and 4G LTE wireless technology.

The 4G LTE feature is certainly a big deal, as 4G speeds can be significantly faster than 3G. For those that use their iPads on the cellular wireless networks, this is a welcome new feature. However, given the limited reach of 4G networks, plus the fact that many people use their iPads over Wi-Fi, the 4G feature is not all that groundbreaking.

The feature that Apple spent the most time on was the new display and graphics performance. Given that the resolution of the New iPad is 4 times higher than the iPad 2, it is quite a significant upgrade. Listening to Apple talk about it, the new screen, which they call a “Retina Display”, redefines the iPad. Interestingly enough, Apple claimed that this is the first device they can not adequately represent through their on-stage projection system because the resolution of the iPad is better than the projection system. They repeatedly asserted that in order to appreciate the Retina Display of the New iPad, one needs to see it directly with their own eyes. That is a pretty strong claim.

Also, Apple announced that they will continue to sell the 16 GB iPad 2 model (Wi-Fi only and 3G models) at $100 off their original pricing. For $399 and $529 respectively, it will be interesting to see how the iPad 2 continues to sell. I’ve been told by many people they were waiting for the price of the iPad 2 to drop before buying an iPad.

My recommendation is to wait until you’ve seen the New iPad in person before making the decision between it and the iPad 2. If Apple’s claims are true that the Retina Display redefines the iPad, it is worth taking a look before purchasing.

Geeks Love Ports!

I stumbled upon an article titled, “The Best Tablet Not Always the iPad“. I was curious as to why the author thought this way so I read through it to understand his arguments. Not surprisingly, as is so common with most unfavorable reviews of the iPad or iPhone, the reviewer finds specific technical specifications of the iPad  (or lack thereof), compares it to devices that have bigger or more powerful technical specs, and comes to the conclusion that the iPad is not as good as those other devices. Generally these types of reviews miss the forest for the trees and do not take into account the entire user experience that has made the Apple devices so popular. And many technical writers wonder why the general public is buying Apple devices like hotcakes while ignoring other products of arguably better technical specifications.

The author bases his argument that the iPad is not the best tablet primarily upon another story that is linked within his article. That story states, “As we detailed in our Thrive [a tablet device] review, the full-sized USB port, HDMI port, and SD card make it a more productive tablet than the iPad.” Both authors have a pretty specific definition of “productive”, being that one can plug various other technology into a device without “expensive accessories”.

And thus, we quickly see why so many “techies” have a hard time figuring out why the general public loves their iOS devices: techies think that in order for a device to be “productive”, the device must have specific technology features. The general public knows that being productive means that the device works reliably, is easy to use, and does what they want it to do. Most people could care less about ports. They have found little need to physically connect other things as much as some would lead them to believe. If you don’t believe me, the numbers the author claims to be astounded by should be the proof. If the general public had such a great need for ports or other technical specs, then the iPad would not continue to sell so well – especially to business users.

The author states that he is astounded by the sales figures of the iPad, “considering how little you can do on an iPad out of the box”. I would find his opinion astounding, except for the fact that I have had many conversations like this with techie-types since the iPhone first came out. It simply comes down to the different ways of thinking the “Old World of Technology” has as compared to the “New World of Technology”. Again, he believes the iPad is limited because one can’t plug things into it right out of the box. Most other people believe the iPad is limitless out of the box because they can so quickly and easily get it working. Right away they are on the App Store downloading from an incredible selection of software that will make them productive without the need of a USB device, an SD card, or an HDMI cable. No other company can match the ease-of-use and user experience that Apple has provided for the iPad (and all iOS devices). This is the secret to Apple’s success and everyone else is struggling to simply copy Apple’s hardware – and still missing the point entirely!. The hardware is not so important when compared to the entire user experience.

And if we want to throw down when it comes to technology features, I could argue that technologies like AirPlay make physical connectivity a thing of the past. Why bother with USB and HDMI when one can wirelessly stream their media? Especially when one can still have physical connectivity IF they need it with OPTIONAL accessories (and I don’t agree that a $29 adapter is expensive). No other tablet has a feature that even comes close to the reliability, ease-of-use, and acceptance of AirPlay, so if we want to play the geek card I think Apple still has ’em beat.

Steve Jobs: Leadership vs. Management

Late today, the technology industry was rocked by yet another major announcement: Steve Jobs officially stepped down as Apple CEO after a 7 month medical leave of absence. A quick search on the Internet should provide as much coverage as you care to read, but I think many are missing a simple fact. Since January, when Jobs went on medical leave, he wasn’t acting as CEO anyway. So this really doesn’t change anything except make permanent the situation that has existed for 7 months.

It is also important to note that Jobs has been elected Apple’s chairman of the board and director. While this is being reported as fact, it seems that many are also missing the significance of this development. Steve Jobs is still going to exert his influence on Apple. While he may have officially given up CEO duties, his real value to Apple is not lost.

As Steven Covey, author of The Seven Habits of Highly Effective People, made famous, there is a crucial difference between leadership and management.

Management is efficiency in climbing the ladder of success; leadership determines whether the ladder is leaning against the right wall.

Leaders provide the vision and set the direction of their organization. Managers carry out the mission that the leaders have defined. Steve Jobs has clearly brought back the vision to Apple that it was lacking in the late 80’s and 90’s. With that vision, Apple has become the largest company in the world and has completely changed the technology industry and the world in general. Luckily for Apple (and perhaps all of us), Steve Jobs’ visionary mind is still around and he will continue to put his mark on the new world of technology he helped kickstart.

iPhone on Sprint: For Real This Time?

The Wall Street Journal is reporting that Apple will release an iPhone for Sprint in October. It’s been rumored before, but this article is pretty firm on its assertion. If this ends up being true, then the WSJ has just gotten a huge scoop. Otherwise, they’ll be eating a lot of crow soon. Stay tuned …

The Consumer Power Shift

I’ve written before about how consumers are now pushing their technology preferences into their workplaces. This change in how technology is deployed and utilized comes after the era where the IT departments of companies would dictate what technology their employees would use. By extension, what people used at work is what they generally used at home. Now, what people are using for their own personal or home technology is what they want to use at work, and increasingly forcing their IT departments to ensure compatibility.

I first wrote about this almost exactly two years ago, but I had observed this trend at least a couple of years earlier. Yet it seems that some big companies still don’t get it. Case in point, I recently read an article where a self-described “loyal BlackBerry user and fan of RIM” explained why he made the difficult decision to return his RIM PlayBook (also commonly known as the BlackBerry PlayBook). Even though he feels the PlayBook is technically superior in some ways to the iPad , his reasons for returning the device were not about the technology.

He gave three reasons why he felt that RIM was “screwing it up”. His first was “Not recognizing the consumer power shift”. To quote the article:

The fundamental pattern of technology adoption is shifting. In the old world, in which corporate IT departments determined which technology to approve and employees (users) simply had to follow suit, BlackBerry wielded a clear advantage. IT departments loved RIM’s solution for its security and reliability.

But the winds of adoption are shifting. Employees are in the driver’s seat. They are convincing their IT departments to adopt the platforms employees desire. The winners of tomorrow need to create solutions that appeal to consumers, not just their employers.

He then goes on to say that

Such adoption shifts have taken down giants.

He gives an example of beer purchasing in Japan, but we have examples much closer to home with Blockbuster and Borders. Companies failing to see changes in technology affecting consumer choices is a key reason they fail. This is nothing new, but yet it still seems that the lesson has not been learned – or many companies are just bad at executing change.

It took me 45 minutes from opening the box to being able to explore my new PlayBook. When my wife bought her iPad, she was already connected, and exploring within 10 minutes.

It’s time to make sure your company is recognizing the changing tides in technology. Don’t be late to the party like Blockbuster, Borders, and RIM.

HP: “The Tablet Effect is Real”

In the second shocking technology announcement of the week (after the Google announcement that they are going to buy Motorola Mobility), HP revealed that they are killing the TouchPad product after only 6 weeks, as well as their WebOS-based phone line. Additionally, HP stated they are considering leaving the PC business, possibly spinning-off the division that made the mobile devices and makes their PCs.

Let’s get clear just how important these announcements are.

1) The biggest PC company in the world threw in the towel after just 6 weeks in the “tablet” market. Why did I put the word tablet in quotes? More on that in a bit.

2) The biggest PC company in the world wants to get out of the PC business. The same business that brings in one-third of its revenue.

For a company to throw in the towel after 6 weeks is almost unprecedented (only Microsoft has done this with their Kin phones of last year). Sales of the Touchpad must have been utterly abysmal. This just shows how much of a lock on the market Apple has with their iPad. This is why I put the world “tablet” in quotes. As I’ve said before, along with a growing number of others, there really is no such thing as a tablet market. There is only an iPad market. People do not seem to want anything except the iPad. Most people probably aren’t even aware that the other tablets compete with the iPad. I wouldn’t be surprised if they think that the iPad is the only product of its kind – which in many respects, it is. Just look at the recent report that 97% of all web traffic by tablets is from the iPad.

This utter domination of the tablet market by Apple’s iPad explains why HP bailed out on their TouchPad so quickly. But it doesn’t explain why HP wants to get out of the PC business. Or does it?

Just look to one comment by HP’s CEO, who said “the tablet effect is real.” What he is referring to is the thought that tablet (i.e. iPad) sales are eating into PC sales. Up until now, the “tablet effect” has been sort of a hush-hush topic among the PC makers. Sure, PC sales were shrinking for the first time in history, but other factors such as the economy were surely to blame. Certainly the iPad could not be a significant factor, right? Well, now the cat’s out of the bag – big time. There’s no denying it anymore. The iPad is not only dominating the tablet market, but it is eating away at the PC market as well. HP sees the writing on the wall. The PC market has become stagnated with price being the only real differentiator. Competition is fierce and profits are slim. The PC Era is ending, the market is moving towards mobile devices, and the rats are leaving the sinking ship. Well … except for one company.

The only “PC” company that is growing sales, revenue, and profit is … you guessed it … Apple. The Macintosh personal computer, seemingly long forgotten until recently, is seeing tremendous growth while the rest of the PC industry is shrinking. So not only is Apple poised to dominate the “tablet” market, the Macintosh may be the “PC of choice” of the “Post-PC Era”.

Imagine a world where Apple completely dominates the “personal device” market – tablets, smartphones, iPods, laptops, and desktops. Does it seem like fantasy? Perhaps 10 years ago, even 5. But ever since the iPhone was introduced 4 years ago and the iPad just a year and-a-half ago, nothing seems out of reach for Apple. And perhaps companies like HP are waking up to that realization now.

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.

A World Without Borders

There has been much hand-wringing in the media and on social networks over the announcement that Borders is going out of business. A lot of talk has been centered around the death of printed books and how the closing of Borders is a sign of this trend. Let me tell you a little secret: eBooks didn’t kill Borders

Mismanagement killed Borders

Lack of vision killed Borders

Failure to adapt killed Borders

It is clear that eBooks are changing the book publishing world just as digital music changed the recorded music business and the Internet changed the news publishing industry. And certainly businesses must adapt to the changing landscape. However, it doesn’t mean that eBooks are a certain death for printed books or stores that sell them.

While the growth of eBooks drove the final nail in the coffin for Borders, it wasn’t the eBook itself that killed Borders. Borders could have adapted to eBooks and even could have used eBooks to save the company. However, missing the eBook train was the last in a long line of mistakes the company made dating back to the early 1990’s

I read two articles back in January (one from Newsweek, the other from The Washington Post) that relayed the story of Borders, detailing the mistakes that took down the company, especially their lack of both Internet and eBook strategies.

The story of Borders is a case study in how technology can either create a business or destroy it. Borders came to prominence because of their technology. Their innovative software allowed the company to better predict which books consumers would want to buy and what to stock. This allowed Borders to create the model of a book superstore, offering not only bestsellers, but a plethora of harder-to-find titles. It is therefore ironic that what ultimately killed the company was the failure of Borders’ management to identify emerging technology and how it would change the competitive landscape.

Take the time to read the articles if they interest you. But ultimately, the moral of the story is that the bad guy isn’t technology. Change is inevitable. It is the inability or unwillingness of companies to adapt that leads to their failure. It is the story of Blockbuster. It is the story of Ultimate Electronics. It is the emerging story of RIM (Blackberry) … and maybe even the not-too-distant future story of Microsoft.

If anything, I believe the emergence of eBooks opens the door for smaller, local bookstores to successfully cater to those who seek printed books. They can provide services and the personal touch that big-box or Internet stores simply can’t. Perhaps, instead of mourning the death of Borders, we should be looking forward to the opportunity small business has in front of it.

Where Tech Companies Go To Die

The now-famous open letter to RIM executives references a quote that one of RIM’s CEOs recently made in regards to RIM’s so-far-not-yet-successful technology transition, “No other technology company other than Apple has successfully transitioned their platform. It’s almost never done, and it’s way harder than you realize. This transition is where tech companies go to die.”

In fact, Apple has done it by my count, 4 times (Apple II to Macintosh, Motorola 68000 processors to PowerPC processors, Classic Mac OS to Mac OS X, PowerPC processors to Intel processors). And now it is possible to argue that Apple is doing it for a 5th time, transitioning from Mac OS to iOS. How does a company like Apple manage to pull off these transitions, during both good times and bad? It stems from their deeply held beliefs that technology must be user-focused. Great technology is born from this and it requires great technology (along with proper execution) to pull off major technology transitions.

As RIM’s CEO said, most companies that try it fail. It’s an incredibly risky time, as RIM is experiencing right now. Poorly executed transitions are opportunities for customers to jump ship. It’s why Microsoft has never done it. They know their continued success is contingent on the inertia that the Windows platform has built up in the industry. But more importantly, Microsoft realizes that this inertia is maintained by all the software that runs on Windows. In order for Microsoft to develop a truly next-generation operating system, they must give up the shaky foundations that Windows is built up. But they know that if they do this, they cut the ties that binds users to Microsoft, as software that runs on Windows would likely need to be modified or completely re-written to run on a next generation of Windows. Only an exceptionally executed transition across all phases would ensure that Microsoft keeps most of their customers. There’s not yet been a need for Microsoft to take that chance. But it is becoming increasingly clear that standing still is also becoming risky. At some point Microsoft, and many other tech companies, will realize that they must make a transition to survive. And that’s when things will become very interesting.

If one pays attention to the market, it is coming into focus that Microsoft is entering (or already has entered) a transitional state. As I alluded to before, the “PC” market is transitioning into mobile devices such as tablets (i.e. the iPad) and smartphones (i.e. the iPhone). Microsoft’s announcements of Windows 8 and their attempts at re-creating their mobile strategy with Windows Phone 7 is evidence that Microsoft has realized the changing state of the market. But a lot hinges on what Microsoft does over the next two years. If Microsoft doesn’t pull off this transition well, the entire future of the company is in doubt. If one doesn’t believe that a company like Microsoft could fall, just a little study of history can show what happened to tech giants like IBM.

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