Laptops, Netbooks & Handsets

Useful map of smartphone adoption by type and country (larger original is here). iPhone is triumphant, except for China which is mainly Nokia.

Today we read with some amusement that Google is stating that the desktop is dead (again):

Google believes that in three or so years desktops will give way to mobile as the primary screen from which most people will consume information and entertainment. That’s according to Google Europe boss John Herlihy who said that smart phones enhance Google’s mission to make information universal.

Speaking at the Digital Landscapes conference at UCD, Herlihy said that the cloud-computing opportunity will make sure that every mobile device will be capable of doing rapid-scale applications.

“In three years time, desktops will be irrelevant. In Japan, most research is done today on smart phones, not PCs,” Herlihy told a baffled audience, echoing comments by Google CEO Eric Schmidt at the recent GSM Association Mobile World Congress 2010 that everything the company will do going forward will be via a mobile lens, centring on the cloud, computing and connectivity.

This of course was predictable, as the above chart shows. The "Network is the PC" meme comes around regularly every 10 years. Its one of the best examples of a perpetually reccurring hype cycle that we know of. To recap:

The IBM Network PC wave

In 1988 or so and to regain its position (and play to its overall strengths) IBM brought out the Network PC, essentially a dumbed down device that would serve its client faithfully on these new fangled Client-Server Local Area Networks. It failed of course, as (i) The network wasn't reliable enough, (ii) the users liked the standalone capability and control and (iii) the kit wasn't good enough to replace the desktop at that point

The Sun "Network is the Computer" Wave

Cometh the Internet, and Sun has a problem - its tins are in the server farms but not on the desktops. Clearly, the world needs to move towards this new fangled Internet thingy, and put all its data in the (I forget, I think it was called The Cloud at that time too). It failed of course, as (i) The network wasn't reliable enough, (ii) the users liked the standalone capability and control and (iii) the kit wasn't good enough to replace the desktop at that point

The Google "It will be in the Cloud" Cycle

Cometh Big Broadband, and Google has a problem - too many customers are irresponsibly sticking to their desktops rather than sticking all their data into the big GoogleMine. Hence the call for The Cloud rings out clarion like across the Valley. It will fail of course, as......

Why Ten Years? Our hypothesis is that that is the time it takes the Corporate Memory to wane to a level where the Bright New Things can haul the Network PC punt out again without some grizzled and wise old hand reminding them of the phenomenal waste of time and money the last cycle had been. Its also interesting that Eric Schmidt's company (Sun, now Google) has been the major proponent of these last two cycles.

What's interesting about the Googleshot is that this is almost a double top, in that they've tried the "netbook data in the cloud" gambit - which hasn't crossed the chasm - and now its a smartphone gambit. A sign of desperation surely, as if the netbook didn't work its a lot less clear that todays' (even less capable) smartphones will - which is why we think its a sign that this cycle is already on the wane.

Here, as they say, endeth the lesson.

Update - well, not quite endeth - as my learned commentators have pointed out:

(i) There has always been a (shifting) balance between client side and server side, its juts that companies (and bloggers) always push the edges for their own ends

(ii) Each wave does result in a new layer of cloud service usage - networked data, web services etc.

But we suspect static services will be around for a long, long time as (i) people are largely static and (ii) they too improve over time. Th high power workstation with 2 large screens has attractions all of its own.

This is the script - Google's Android takes the place of the IBM PC/MS-DOS play (DOS, for the yoof, was the first Microsoft PC Operating System*, wot came before Windows) in the emerging Smartphone market, knocking out the others and pegging Apple back to its typical 15-20% of any computing market (of the highest margin gear, of course). Figures recently released show Android has doubled in share from 2.7% of the market to 5%, against iPhone's 25% and Blackberry's (read CP/M) 42% (see above)

Is this possible? Well, one person who I trust reviewed his experience of the AndroidoPhone on Twitter:

cluttered ui which punishes mistakes. forces you to learn new non- obvious interactions. screen doesn't work in daylight. no apps

Which he followed up with:

Not an android developer? get an iPhone

However, according to the article quoted above Android is the second most desired platform after the Apple now. So can it play the IBM/DOS role? PR spin or reality? Three things here:

- it seems the Android OS/UI is as user hostile as DOS ever was, so no barrier there . The difference was that compared to what came before you could do a lot more, on more powerful kit, with DOS. IBM's killer play was the PC with (gasp) 10Mb Hard disk at a decent price. Everyone had to have it!

- in the DOS/Apple wars, the DOS platform was open, Apple was closed so the developers flocked to DOS and unseated Apple, groovy Rip-Off-The-Wall Ads or not. This time round, Apple has learned the lesson so it has a massive community of developers building Apps already.

- Early DOS machines were sold by retailers with lots of support, which punters loved. Google has used more of a BOFO approach (Buy One and F*ck Off) which has not won friends and influenced enemies as much

- Microsoft were not The Borg at the time, they were seen - believe it or not - as quite groovy people. And everyone moaned about Big Blue but respected their ability to build good hardware. Who is the Groovy Guy in the Googlecamp?

In short, for Google to play IBM/MS-DOS and take centre stage this time round is going to be lot harder, as Apple has learned its lessons. If anything, Google seem to be behaving a bit like Apple did in the 1980s - Arrogant attitude, Average kit and no Apps.

Update...and 2 days later, the story hits Techmeme - again, from Ars Tech this time.

*Well, technically DOS belonged to someone else, but MIcrosoft convinced IBM they had it - its a long story of intrigue and so on.....

Nice story from RWW about the "buzz" over the iPad:

According to an email from Andres Burgos, the project lead for TweetFeel, the company collected almost a half a million tweets since Steve Jobs took the stage on Wednesday, "cleaned the hell out of them and scored about 40,000" and found an overall positive sentiment hovering at around 60%. But this isn't the fun part. Nobody wants to watch people gush, so let's take a look at how that other 40% breaks down.

I've shown their detailed breakdown in their picture above. We qualify in the "its a big iPod" and the "Silly name" camps, but this is where buzz metrics can run foul. If you read our blog post on the subject you can see that we also fall in the "yes, the fanbois will buy it anyway, but the market is bigger and this is more more disruptive than many critics think" camp.

As the article notes, most of the fanbois - the 60% - just say "want one" or "awesome", but the nuance is in the knockers - or what appear to be knockers at first glance.

Google is (in)famous for its (ahem) "user support", whether its for unsuspecting mom and pop merchants thrown off Adwords, or people struggling with its various Office products. To be fair, Google is no different from any other free service provider in that the mindset is something on the lines of "the only Service Level Agreement - SLA - you buy for Zero dollars is Zero SLA). Unfortunately, its release of the Nexus, where real users pay real money for a physical good, seems to be exposing this in spades.

The trouble started over the weekend when people started to find that Google wanted to take $350 from you and give you the same "we'll get back to you by email sometime" service they give their freetard customers. It seems to rather have surprised them that those same punters wot put up with shod...(Sorry, "best endeavours") free service levels have a totally different point of view when they hand over real money. Early complainants were laughed off as Apple fanboi's venting, but that only worked for so long (about 24 hours)

To be fair though, this a tough time for anyone - a 3-way new system launch (between Google, HTC and T-Mobile) is bound to have teething problems, but that's hardly unpredictable, nor is it unknown for disgruntled consumers to shout loudly when it comes to their valuable personal smart status symbols

But now Google are finding that whereas people will just click the Terms and Conditions of a free online service like sheep, when they are looking at 2 year contracts worth many hundreds of dollars they actually read them, and it would seem that when they don't like what they see the wolf comes out of the sheep's clothing. They read this:

You agree to pay Google an equipment subsidy recovery fee (the “Equipment Recovery Fee”) equal to the difference between the full price of the Nexus handheld device without service plan and the price you paid for the Nexus handheld device if you cancel your wireless plan prior to 120 days of continuous wireless service. For example, if the full price of the Nexus handheld device without service plan was $529 USD and the price you paid for the Nexus handheld device was $179 USD with a service plan, the Equipment Recovery Fee you pay will be $350 USD in the event you cancel within the first 120 days of carrier service. The Equipment Recovery Fee is equal to the line item in your confirmation email setting forth the discount on the full priced Nexus handheld device related to your carrier service plan activiation. You authorize Google to charge the Equipment Recovery Fee directly to your credit card, or other payment method used to purchase the Nexus handheld device, upon cancellation of your wireless plan. You will not be charged the Equipment Recovery Fee if you return your Nexus handheld device to Google within the 14 day Return Policy period as set forth below.

......

Please note that the Equipment Recovery Fee is imposed by Google and not your chosen carrier and is in addition to any early termination fees that may be charged by your chosen carrier in connection with termination of your wireless plan prior to fulfillment of your chosen carrier’s service agreement term.

And the punters can do the maths pretty fast too - in effect this means that if you buy a (subsidized) Nexus for $180 and then cancel the contract outside of the 30 day return window, you pay the ETF of $175 to T-Mobile, and then another ETF of $350 to Google. The total price ends up as $705, verse $529.99 original retail price.

Given that the $530 tag gets a phone that can be unlocked to boot, its little wonder that others have worked out where the arbitrage lies - Engadget suggests you:

....consider going the unlocked route with the Nexus One, in addition to having the AT&T (non-3G) and international GSM option.

Those of us who are European won't get nailed if we think its a turkey and return the thing within 14 days, as thanks to our consumer protection laws "residents of the EU will not be charged the $45 USD restocking/refurbishing fee when cancelling these Terms within the fourteen-day period and will be refunded the shipping fees paid for initial delivery of the Device."

No doubt we will see a Googleshift in position in the next few days, after the obligatory PR proxies lash out calling of all critics "Apple Fanbois"and so on

But I think there is a bigger issue here - Google has no people, and no "DNA", capable of handling physical, non-free goods over multiple channels and with high support requirements. I would predict 4 things:

- We will see a number of Googleslips on banana skins before this settles down
- In the short term a bigger handoff (and handout) to the Mobile service provider and potentially reduced emphasis on direct sales
- In the medium term a mass recruitment of FMCG specialists from sales to support.
- Retail shops, or at least franchises. Apple, Microsoft and the Mobile Telcos all have this, and they're there for a reason.

Dell sells the way Google does, but increasingly has to use proxy support, even though one would argue that its users are better at self supporting themselves than the average smartphone user - and still hardly escapes criticism (just Google "Dell Hell" - I await googling "Google Hell" with eager anticipation ) Dell ameliorates this by selling very cheap but fairly decently built computers (for the price....) in huge volumes and low margins. Amazon does the same with the Kindle, buts thats a much simpler thing - and Amazon has real experience of selling priced physical FMCG goods.

The old saw is that women trade love for sex, men trade sex for love. It has been believed and rubbished over the ages, but its been impossible to prove or disprove until the sociological laboratory that is the Web came along. Dan Ariely, who wrote Predictably Irrational (a must read text for behavioural economists among you - actually, for anyone who reads this blog) put up this exhibit above in his post, showing the most popular searches for the term.

QED?

Actually, CES - Technology is getting in the way these days. Historically it has proven easier to build devices to ensure women have no need for men, but cometh the hour, cometh he robotics. Tacked on to every CES is teh Adult TEch show (thats the only reason most people actually attend CES I think, as Paul Carr points out there 's no real need to if its just Tech geegaws you're covering). IN this year's show there are the first:

- Robots that will - ahem - Lurve you, unconditionally. I have already predicted Robotics will take a front seat in 2010. shoulda guessed Porn would be ahead of the game (as it were)
- Devices using Haptics to stimuate your every desire
- iPod/iPhone sound driven devices to stimulate the male...ego. The Beach Boys' "Good Vibrations" will never be the same again
- 3D Moving pictures

This starts a totally new category of Internet User Devices for our value chain models

We have to do this stuff, you understand, but we'll keep it brief.

The long awaited Google Nexus is launched, among hooha, fanfare and all that. But, on the other hand, it looks like an iPhone, quacks like an iPhone....I think the NYT's David Pogue sums it up best - after pointing out the plusses (looks like an iPhone, does a few easily copied things) and minuses (doesn't do some things an iPhone does, but no doubt will in time...) he notes that:

The idea of the Google phone store is pure, giddy idealism: You’ll buy the phone you want, then you’ll shop for the cell plan you want, from the carrier you want. No more “You want an iPhone? Then you get AT&T.”

Well, it’s about time! Rise up in the streets! Power to the people! Truth shall triumph!

Or not.

I mean, it’s a great idea and all. It’s just that, well, apart from the iPhone, who really cares which carrier has a certain phone? In the list of complaints about American cellphone carriers sent to me by readers, that one is waaaaaay down the list.

.....

The Nexus One is an excellent app phone, fast and powerful but marred by some glitches and missing features — a worthy competitor to the Droid, if not the iPhone. The Google phone store is a neat, centralized place to buy phones, but so far, it offers zero advantages over buying a T-Mobile phone any other way.

We have been wondering, since the iPhone came out who will play Microsoft to Apple's Apple (to us the smartphone is just another 1980's PC type marketplace). Apple's typical game is to enter a market underserved by its incumbents with a beautiful, integrated but closed system. Think PC, think iPod, think iPhone. It then typically carves out 10 - 20% of the highest margin customers leaving les autres to battle for the volume market.

As with the PC/UNIX environment, where the original CP/M and BUNCH incumbents did not measure up to the Apple challenge and IBM/Microsoft entered, here we have Google/Android coming in. This then is the set of this next decade's phase of the Mobile/Smartphone (aka mini-netbook) market.

Only thing is, Apple's already disrupting the e-Reader/Tablet market, Mobile is already done and dusted.

It would appear that we are not allowed to use the word "Smartbook" unless it belongs to the Smartbook company - TechCrunch:

Smartbook AG does indeed own a trademark on the word smartbook in most of Western Europe, Australia, Singapore, South Korea and a couple of other countries. The company sells laptops that are named Smartbook, so I guess the company is well within its rights to try and protect their trademark in any way it deems appropriate.

In the past, the company has gone after companies like Qualcomm and Freescale, who use the term as a generic denominator for portable Internet-ready devices that are neither smartphones or netbooks in product descriptions

It would appear to have managed to trademark the word Smartbook in a number of countries:

In Germany, Austria, Australia, Benelux, Switzerland, Czech Republic, Denmark, Spain, Finland, France, United Kingdom, Italy, Democratic People's Republic of Korea, Republic of Korea, Monaco, Norway, Poland, Portugal, Russian Federation, Sweden, Singapore, Turkey and Ukraine the word Smartbook is a trademark registered by Smartbook AG. Therefore, in these countries the word may not be used in the sense described in this article.

What I want to know is how you get a Trademark on a word in so many countries that is already prior art (Google has references going back to 2001) , and for example Wikipedia defines a Smartbook as:

A smartbook is a concept of a mobile device that falls between smartphones and netbooks, delivering features typically found in smartphones (always on, all-day battery life, 3G connectivity, GPS)[1] in a slightly larger device with a full keyboard. Smartbooks will tend to be designed to work with online applications.[2] Smartbooks are likely to be sold initially through mobile network operators, like mobile phones are today, along with a wireless data plan.[3]

Irony of ironies, Smartbook itself doesn't actually make Smartbooks - they make laptops which on their own website they called Netbooks

Neville Hobson posted this link on Twitter - "5 Reasons to leave XP for Windows 7". Here, in riposte, are 5 reasons not to get off your *rse just yet:

1. XP does the job. It ain't broke, and you know how to use it.
2. You've already paid for it, its fully amortised
3. You just know that Windows 7 will release Service Packs 1 and 2 in the next few months, why be part of the free test cycle?
4. It will come bundled cheaper in the next tin you buy
5. Your next computer may have to be a Mac 'cos you need to get Final Cut Pro for all that video coming down the pike

In fact, the article predicts users will want to switch "within 2 years" rather than right away, and I'd agree with that. Windows 7 will drive the next generation of hardware. My policy is always to switch after SP2 or similar is released (let them be the guinea pigs is the refrain of the Late Early Adopter). This sage advice appears to be what many other people have concluded too

(Update - for those of you faux-geeks who use Macs, this is a Proper Debate for Real Operating Systems that have actual Numbers in their releases, not silly animal names )

Paul Carr has a very funny article summarising the CES show - in essence he partied for 3 days and spent an hour asking actual show attendees what was hot during the main 2nd night afterparty. The summary is here:

With a single lap of the crowded club, I'd spoken to half a dozen of the attendees and had scribbled a list in my notebook under the heading "everything you need to know about CES 09". Here, verbatim, is the list...

• The conference feels pretty busy, but only because most stands were booked a year ago. In reality, most companies have only sent key staff to Vegas rather than entire teams. Everyone worried about their jobs.

• Wireless electricity based on beaming heat across the room is super cool (no pun intended) but nowhere near ready to be unleashed on the public.

• Microsoft really screwed up the Windows 7 beta launch.

• If you like cool televisions, CES will make you shit yourself.

• Palm Pre

• PALM PRE

• PALM PRE!!!

Ah yes, the Palm Pre Smartphone. The conference highlight that everyone – absolutely everyone – wanted to talk about. Apart from being a beautiful thing to behold, combining the multimedia possibilities of the iPhone with the not-having-a-fucking-annoying-virtual-keyboardiness of the BlackBerry, it also boasts the WebOS operating system. In short, WebOS makes developing applications for the device as easy as building a website. Between the aesthetics of the device and the openness of the platform, even iPhone owners I spoke to were considering trading up.

Broadstuff's Service Guarantee - copying the blog of someone who didn't go to CES so you don't have to.