The Smartphone Wars: The invasion begins

For months I’ve been predicting that a flood of ultra-cheap SoC-based Androids is coming at us from China, motivated by the prospect of Third World and BRIC sales volume in the billions and beginning in 3Q2011. The iCube announcement was one harbinger; today we have some others. It’s worth another look at what this trend is going to do to associated markets.

First, a telling anecdote. My wife is finally considering getting an Android. She had been refusing this prospect because she found smartphones too big and ungainly; she has small hands and small pockets and wants something not too much larger than her rather tiny dumbphone. She’s willing to trade away display pixels for this. This is not a crazy set of requirements; smartphone makers, focused on marketing ever-jazzier displays, have been underserving people like her.

Cathy has found a device that tempts her in the T-Mobile store. It’s the T-Mobile Comet, which is specifically designed as a cheap entry-level Android for people transitioning off dumphones. Inexpensive, small, and light are the selling points here, pivoting the relative crappiness of the display from a disadvantage to an advantage. At 240 x 320 pixels it’s no worse than her work-issued Blackberry 8830. Having researched the device, I’ve told her that I approve – it is a good value in current market conditions and does seem well matched to her requirements as I understand them. The street price is $149 and dropping, $99 reconditioned used.

And what is the “Comet” beneath the T-Mobile branding? It’s a Huawei 8150 aka “Ideos”. It is in fact exactly the kind of cheap Chinese takeout I’ve been expecting. It’s a safe bet Huawei is price-taking in the relatively price-insensitive North American market as it ramps up production for BRICs and the Third World; consequently, we can expect prices for this class of phone to drop by $50 or so over the next 90 days, especially if the 8150 is not yet SoC-based.

Comes now The Democratization of Android: 13% of All Mobiles Are From Unknown Brands. The article calls out Micromax, Spice Mobile, and Yulong Coolpad, but Huawei and ZTE – neither exactly a household name in the U.S. – could just as well have been included. Read the whole thing, it’s short.

The invasion begins. And no ESP is required to see what the effects in the U.S. and worldwide are going to be.

To begin with, cheap Chinese takeout is going to put brutal price and margin pressure on brand-name handset makers. Nokia, Apple, RIM, and Motorola are (for differing reasons) probably the most vulnerable. But even established Asian makers like Samsung are going to feel it. It’s not even going to be safe to assume that the cheap Chinese won’t compete on features; the Democratization article notes, for example, that MicroMax and Spice have made a reputation selling multi-SIM phones.

The news is most dire for RIM and the Nokia/Microsoft alliance. Nokia, historically a high-volume/low-price player, can’t survive on the lower margins the Chinese will accept. Even if NoWin actually manages to ship a WP7 phone before the market window for that platform slams completely shut (which is in itself highly doubtful), its odds in price competition against dirt-cheap Androids therefore look very poor. RIM, too, is hideously exposed and lacking a convincing product offering since the Playbook launch cratered.

Apple is exposed in a different way. While it has a brand-loyal customer base at the high end of the smartphone market, the iPhone’s value proposition is weakening in a way well symbolized by the fact that the upcoming iOS 5 will copy some key aspects of the Android UI. Just as the price gap between iPhones and cheap Chinese Androids widens to a chasm, Apple’s vaunted “user experience” is looking like much less of a differentiator than it used to. Apple will face a cruel choice: sacrifice margins or risk disruptive collapse of its market. It may not even be possible for Apple, an American-based company with relatively high baked-in costs and margin requirements, to follow the likes of MicroMax or ZTE far enough down the price curve to remain competitive.

Motorola is an Android partner, but vulnerable for the same reason Nokia and Apple are – as a U.S.-based company, it has higher baked-in costs and margin requirements than the Chinese. To remain competitive it’s going to have to find ways to increase product value while holding the line on unit costs. This is almost certainly the drive behind experiments like the Atrix oh-look-it’s-a-netbook docking station. Very likely it’s behind the recent policy shift to unlocked bootloaders; that’s a way to increase product value by spending less engineering money.

HTC, Samsung and other established Asians have a better fighting position because their cost base is similar to that of the Huawei/MicroMax/Spice/ZTE tier. Still, competition at the high-volume end of the market will have its usual effect. It is likely, for example, that HTC’s Sense overlay will fall by the wayside as prices plummet; in a market where carrier skins are on life support, handset-maker skins hardly look any healthier. Motorola’s recent announcement that it’s shitcanning the MotoBlur brand is a leading indicator here.

Cheap Chinese takeout is also going to be tough on the carriers. The problem here will be the collapse of the contract system and increasing phone sales through third parties like Walmart. The older model – expensive phones sold mainly through carrier outlets with the price spread out in contract-plan charges over multi-year terms – gave carriers a lot of control over handsets and customers. That control is now fast disappearing; the Chinese invasion will probably kill it deader than the dodo.

Without handset control, increasingly carriers are going to be forced into head-to-head price competition on their voice and data plans. Multi-SIM phones even open up the possibility that consumer-grade devices might begin doing automatic cost-sensitive routing over multiple carrier networks. That development would hammer the carriers flat.

Who gets good news out of all this? Smartphone consumers, obviously. This is the free market in action, doing its usual relentless smashing of inefficiencies and rent-seeking. Less obviously, this is Google winning the grand-strategic war that Android was designed to fight. As the carriers are flattened into low-margin bit-haulers and the handset manufacturers increasingly sell cheap generic Android devices, Google will suck up through its advertising business a larger share of the profits in the entire value chain.

And all, mind you, without needing to collect a dime in Android licensing fees. This is what open source triumphant looks like.

UPDATE: And if this isn’t dramatic enough, contemplate what’s gong to happen when SoCs reach the shanzhai…

83 thoughts on “The Smartphone Wars: The invasion begins

  1. Even without this, I don’t see how Apple can last. I just dumped an iPhone 3 whose battery died. I could have gotten it fixed for $79, or picked up an Atrix 4G for $99 + extending my contract. I went the Atrix route, expecting to take a hit on user experience in exchange for speed and power. I clearly missed a few memos, as I found the experience notably better than the iPhone (widgets! notifications! over-air install! native gmail and google maps and google voice search!). My beloved phone that made such a difference in my life two years ago is now literally not worth changing the battery on. That’s for the pricy end of the Android curve, and it’s only going down from there. I can’t even begin to imagine what things must look like in RIM or Nokia boardrooms.

  2. The European dumbphone market has looked like your predictions for a long time. Dumbphones are dirt cheap. Walk into Phones4U or Carphone Warehouse, or any of the dozens of e-shops, and buy a phone for £20 or £30. Get a pre-pay SIM card with £5 credit on it for £5 and you now have a phone. Swap around the SIM cards, and the only thing that changes is the number.

    There are two main reasons that people stick to a single SIM card in that environment – one is that they can only receive calls on one at a time (dual-SIM will fix that) and the other is bulk discounting, ie the marginal cost of a call or text falls with the number of calls or texts made, so, for instance £7.50 gets you 100 texts, but £14 gets you 400 (dropping the marginal price from 7.5p to 3.5p). If you want to send 200 texts on each of two SIMs that would cost you £20, where 400 on one network is £14. Data is rare on these sorts of PAYG / pre-pay contracts because the phones mostly don’t do data. Yet.

    Network loyalty (with easy number-porting) is non-existent; people jump to new deals every few months. If anything happens to the phone, they buy a replacement, which also kills repair and insurance markets.

    If Android goes to the same place, the real question is whether there will be a premium phone market at all. If there is, it will be hardware, not software driven. If I were Canon or Nikon, I would be looking at how much it will cost to put a basic SOC and SIM slot into my cameras, so you can upload pictures as you take them. Write the software to ship the photo directly to the user’s private bits of flickr / picasa as they take them. Adding on $50 to a $2000 camera is nothing, though the space and power consumption may be more of an issue (also, it would probably need to be a detachable module, so you can upgrade the $50 “phone” without having to replace the $2000 camera).

    What other electronic devices are there that you could slot a $50 phone into and make the device better?

  3. @esr: “The news is most dire for RIM and the Nokia/Microsoft alliance. Nokia, historically a high-volume/low-price player, can’t survive on the lower margins the Chinese will accept.”

    Do you have data on this, or is this your hypothesis? In principle, it seems to me that they could either use high-efficiency automated factories with low labor costs (doubtful) or outsource manufacture of Finland-designed phones to Asia coupled with shutting down first-world product lines (likely) and successfully competing.

    Of course, the odds of succeeding at this would be much better with an Android strategy. The delays in getting a WP product ready for manufacture will kill them, even if the product is great (highly unlikely).

    @esr: “In a market where carrier skins are on life support, handset-maker skins hardly look any healthier.”

    Did you spot this?

    Virgin Mobile: No Skins for Us

    Unfortunately, Virgin Mobile still hasn’t gotten the memo:

    Unsurprisingly, Virgin Mobile doesn’t want customers rooting their phones

  4. I think you mean, “T-Mobile Comet”, not “HTC Comet”. My fiancee and I picked up two T-Mobile Comets a few months ago. Hers suffered an accidental destruction, and she’s using a different model, now, but I’m still using mine.

    The one thing to watch out for, I suppose, is that some apps (Hootsuite, I’m looking at you!) have always-on background components even if you never use the foreground component after the first run after the first install. Other apps, like the Weather Channel’s widget, cause the entire phone to freeze while it’s doing some of its network activity.

  5. @Michael Mol: “The one thing to watch out for, I suppose, is that some apps (Hootsuite, I’m looking at you!) have always-on background components even if you never use the foreground component after the first run after the first install.”

    Doesn’t Advanced Task Killer take care of that?

  6. >I think you mean, “T-Mobile Comet”, not “HTC Comet”

    You’re right. I thinkoed. Fixed.

  7. >Do you have data on [Nokia having higher margin requirements], or is this your hypothesis?

    It’s a pretty straight-line deduction from the difference in purchasing-power-adjusted wages between Helsinki and Suzhou.

    >Did you spot [No Skins For Us]?

    Yes, it’s one of the recent data points I had in mind along with Motorola backing away from the MotoBlur brand.

    >Unfortunately, Virgin Mobile still hasn’t gotten the memo:

    Fools. One is reminded of Canute commanding the tide not to roll in…

  8. >What other electronic devices are there that you could slot a $50 phone into and make the device better?

    Quite a few, but most of them will simply be eaten by the phone entirely (e.g. music players, point-and-click cameras, hand-held gaming devices, probably wallets and keys next)

  9. >What other electronic devices are there that you could slot a $50 phone into and make the device better?

    Your logic is sound but I think your premise is backward. Remember Raymond’s Rule of Smartphone Subsumption and reflect that a device which can be improved by a $50 smartphone implant is a good candidate to be subsumed by Smartphone, the Eater-of-Gadgets! I’m not saying your high-end digital camera example is wrong, matter of fact I called it out in my original post on this topic. But it may be exceptional.

  10. EsR….

    you still don get it?

    Google hasn’t won or seam to win anything yet!!!

    Even if Android becomes so hugely popular in the Phone world….

    Both Microsoft and Apple are targeting their NUKE on Google!

    They just bidding their time….

    and Google will be in a worst position than those pre Androids days.

    When Androids becomes uber huge there will be DOJ for Google to hide or run too……

  11. esr,

    > Your logic is sound but I think your premise is backward. Remember Raymond’s Rule of Smartphone Subsumption and reflect that a device which can be improved by a $50 smartphone implant is a good candidate to be subsumed by Smartphone, the Eater-of-Gadgets! I’m not saying your high-end digital camera example is wrong, matter of fact I called it out in my original post on this topic. But it may be exceptional.

    Well, it’s true, but, just like electric motors got into everything and micro-controllers are getting into everything (digital vacuum cleaners!?!), I expect cheap data phones will get into everything. Digital Christmas lights that can download new patterns. Bicycles that can summon assistance when you crash. Holsters that call 911 for you so that backup arrives quickly. Brainstorming and it shows, right?

    Yours,
    Tom

  12. The Comet’s been around for probably at least 6 months in the US, I believe. Metro PCS has been selling a pair of Huawei phones, branded as such, for a while too, although they’re pricier, because Metro doesn’t subsidize phones and those, IIRC, weren’t low-end.

    I was going to make the point about not bothering to add phone features to electronic devices, but Dave beat me to it. For that matter, some cameras have already had “upload via wifi” for a while now, IIRC, and with more phones having hotspot functionality, that’s another reason to not bother.

  13. The appealing thing about the T-mobile plans is that you can add unlimited data on-demand for (IIRC) $1.50/day. That and the relatively reasonable voice rates make it a nice choice for someone who will use the smartphone data features on rare occasions (outside of wifi range) but heavily then.

  14. Well, it’s true, but, just like electric motors got into everything and micro-controllers are getting into everything (digital vacuum cleaners!?!), I expect cheap data phones will get into everything. Digital Christmas lights that can download new patterns. Bicycles that can summon assistance when you crash. Holsters that call 911 for you so that backup arrives quickly. Brainstorming and it shows, right?

    Not only is this already happening, but the cheap embedded data phones are running Android!

    Now excuse me while I go file my patent application, “Method of downloading new patterns for decorative lights.”

  15. I do not understand the article linked below. It is completely in the predictions of eric’s original article. But it is about counterfeit products that actually work well flooding markets.

    China’s Cell Phone Pirates Are Bringing Down Middle Eastern Governments
    http://www.fastcompany.com/1758927/how-chinas-cellphone-pirates-are-toppling-governments-in-india-and-the-middle-east

    In 2004, a Taiwanese electronics firm named MediaTek unveiled its latest product–a cell-phone-in-a-box aimed at manufacturers, equipped with everything they needed to make the guts of a working phone on one chipset. Write some software, add features, and snap a plastic case on the front and you’ve produced a new model. It was an immediate hit with China’s notorious counterfeiters, the shanzhai.

    In 2004, MediaTek sold 3 million of its chips; six years later, its sales had soared to 500 million, more than a third of the worldwide market. Nearly half of those went to shanzhai. The sudden ability to design, manufacture, and ship millions of dirt-cheap handsets in total secrecy led to an explosion in Internet-enabled devices in China. “Five years ago, there were no counterfeit phones,” the sales manager at a Chinese component manufacturer told The New York Times in 2009. “You needed a design house. You needed software guys. You needed hardware design. But now, a company with five guys can do it.”

    What is “counterfeited”? Cheap phones?

    I know you can get all kinds of iPheno, Nckia’s and Blockberry’s, just as Abercomby or Djor stuff. But these are still working phones. The Chinese know that they will not get a real iPhone for under $100 in some shady underground market of Beijing. And anyone who buys one knows his friends will know. So th is whole counterfeit part of the story is silly.

  16. Morgan,

    > Now excuse me while I go file my patent application, “Method of downloading new patterns for decorative lights.”

    Prior art! Prior art! The time stamps give it away! Hey Patent Office Ref! I want an instant replay! Booo! Booo!

    I think I’ve been reading too much coverage of the NBA and NHL playoffs.

    Yours,
    Tom

  17. I guess I’ll have to ask that question too.
    What defines a ‘Counterfeited phone’ as distinct from a ‘cheap knockoff’ phone, unless they are trying to sell them as a phone. From the articles, it sounded like ‘cheap’ and ‘easy to get’ was what they were selling. Probably ‘Not government controlled’ also, altho not nessicarily all at the same time for the same customer.

  18. >What is “counterfeited”? Cheap phones?

    I believe that in this context “counterfeit” means a phone that mimics the design and trade dress of a name-brand phone. Part of the cultural context here is that, in China much more than the U.S., cellphones are status jewelry as well as functional devices; people want to be seem to be carrying high-status designer phones.

    What the shanzhai do is produce phones with small differences from the trade dress they’re imitating, so they can be spotted as fakes from close up but fool people at more distance – hence, for example, “Blockberry”. The differences give them some protection from being pursued for trademark violation but still allow the phone to imitate a status good.

  19. I like your vision, however, I have a big concern. There is one major anti free market tool left to the “pee in the well” big boys: patents.

    As I commented before Nokia and Apple just settled in a big cross patent suit. I suspect that this was more a strategic move than a legal one. It means that these patents have established precedent in the courts, and Nokia can demand danegeld, and Apple can demand that Nokia demand danegeld. That is bad news if it is true. It makes the open source thing a bit of a problem if the courts demand Google play along.

    If I were Apple, I would demand that the settlement said “Apple pays Nokia 50 cents per phone, and Apple, out of a sense of fairness, demands that Nokia demands the same terms from Apple’s competitors.” If I were Apple, that is what I would demand, and if I were Nokia I’d take it.

    But maybe I’m wrong, and to be honest, I don’t really know the nature of the patents in question. I can’t bear to read that sort of thing, it is just so horrendous.

    Once again, patents are sand in the machinery of life and liberty. The only reason they don’t consume us is because the legal system is so amazingly inefficient and ineffective.

  20. A “free” with a 2 year new subscriber contract Sprint EVO 4G is now available at Best Buy.

    This is nuts. It suggests to me that Eric is right – the contract system is not long for this world, and the carriers know it.

  21. @Jessica Boxer
    Patents are the import levies of today. They are used as protectionist tools and a way to tax import. (Local firms a collateral damage)

    In the end, why should Asia play along to pay taxes to the USA on their own products? At some point they will start turning the tables. At that point the patent system will be defanged.

  22. @Jessica:

    Don’t disagree that entrenched “competitors” will attempt to use patents to stifle innovation.

    But settlements don’t set any sort of legal precedent, and even if a patent holder wins against one defendant, that doesn’t necessarily mean it will win against another. Juries decide each set of facts anew.

  23. > she has small hands and small pockets and wants something not too much larger than her rather tiny dumbphone. She’s willing to trade away display pixels for this.

    Interesting. I work for a telco, and the moment I knew the smartphone wave was breaking over us was when the babes from marketing suddenly stopped carrying pretty little pink & silver phones and started carrying a big, ugly – but highly capable – phone instead. This being a telco and telco marketing babes being fairly obviously early adopters, this was around four or five years ago and the phone in question was a symbian device, the Sony Ericsson K850i. Very good phone in its day.

  24. Incidentally, I have a lot of dealings with Huawei on the server software side and am generally iimpressed with the company. Their initial deliveries tend to be about as one would expect from closed source / waterfall developed software written to specifications from us that were mostly produced in English by people who themselves aren’t native English speakers. But Huawei generally fix the resulting problems quickly and with little fuss, and usually get it right second time. We have European, North American – and Indian – suppliers of whom I could not say the same, who should be very afraid.

  25. @ ADL: No doubt many small women want big, flashy phones. But I don’t. I just want not to have to carry a purse to carry a phone.

  26. >I knew the smartphone wave was breaking over us was when the babes from marketing suddenly stopped carrying pretty little pink & silver phones and started carrying a big, ugly – but highly capable – phone instead.

    Heh. My wife is about as different from a marketing babe as a woman can be, with the thankful exception of the “sexy” part – as a data point, she just finished repainting her shield for our next sword training. I do agree, though, with your implication that her willingness to consider a smartphone indicates that the device makers have figured out how to interest a large block of customers who weren’t being addressed by the studliest-possible-pocket-computer design style. I’m expecting the already-rapid rate of dumbphone conversions to crank up another notch.

  27. And all, mind you, without needing to collect a dime in Android licensing fees. This is what open source triumphant looks like.

    This momentum is driven on price and availability due to commodization of the entire product chain. Any other company that dared to give away cheap software to power cheap phones could have been at the center of this. Google pulls this off because of their gutsiness and their financial lack of reliance on selling software or hardware or any tangible product, not because anything inherently open-source about this process has somehow won the heart of the world markets and users.

    Nothing about OODA loop cycles or open-source development in the last two years necessitated this result. By the above criteria, the only limiting factor appears to be the speed of commodization of component prices.

    Or, judging this phenomenon, I’d think if Moore’s law had ramped up faster, Google could have achieved an even earlier victory back in 2009 while still on Android 1.6. The substrate was time, not open-source.

  28. @ kk man:

    If your last comment was serious, you’re missing esr’s point. MS and Apple CAN’T nuke Google because Google isn’t a hardware company; it’s a web apps company. Google’s whole point with Android is to foster the sale and creation of a greater variety of devices–especially cheap devices–that Google apps can run on. That’s a win for Google no matter who makes the phones.

  29. I think I’ve been reading too much coverage of the NBA and NHL playoffs.

    Obviously. It’s nowhere near that easy to get a patent invalidated…

  30. >The substrate was time, not open-source.

    Not so. Without the anti-rent-seeking, we-can’t-screw-you properties of open source, Google could not have assembled enough of a coalition to make the last two years possible. But it is not required that you understand this. Google does. Their partners do. And I do, too, because….well, I wrote the playbook (to borrow Tom’s sports metaphor).

  31. Patrick Maupin Says:
    > But settlements don’t set any sort of legal precedent,

    I misspoke (or typed anyway.) The problem is that usually the first step in any patent litigation is for the defendant to try to get the patent invalidated on various grounds. Apple will have done that (and Nokia will have done that on the reverse patents), and consequently established their validity. Having a patent does not mean that i is a valid patent, it only means you have the right to try to enforce it, and then the validity will be finally determined. That is the problem.

  32. Without the anti-rent-seeking, we-can’t-screw-you properties of open source, Google could not have assembled enough of a coalition to make the last two years possible. But it is not required that you understand this.

    The last two years have seen the rise of an effective coalition of Google partners, but I thought that this new wave of ultra-cheap smartphones would be coming from grey market manufacturers who have no official ties or loyalties to any of these known companies in the West?

    I might be misunderstanding the strength of tie implied by coalition of course, but this next round is the wild-free market part where Google has to watch it’s masterwork unfold among many players we haven’t heretofore seen without its direct involvement, correct?

  33. >I thought that this new wave of ultra-cheap smartphones would be coming from grey market manufacturers who have no official ties or loyalties to any of these known companies in the West?

    Indeed it is. And if Android were hedged about with the usual closed-source IP restrictions, they’d be begging for restraining orders preventing their phones from being sold in the U.S. It’s because they knew that wouldn’t happen that they could put together the risk capital for the move they’re making.

    >this next round is the wild-free market part where Google has to watch it’s masterwork unfold among many players we haven’t heretofore seen without its direct involvement, correct?

    Quite so. What Google is counting on is two things: there’s no incentive for the shanzhai to diverge from stock Android more than (say) enough to localize it to Chinese, and the app store exerts a centripetal pull on “wild” versions. Everybody wants to be able to run the same apps.

  34. Assuming so, insidiously clever no doubt.

    But I still believe it is not the presence of open-source IP so much as it is the absence of closed IP restrictions. However, that may be a practically semantic matter at this point…

  35. On the “nuke google” ravings, it’s worth noting that getting the Justice Department involved on anti-trust issues would require 1) showing that Google has a monopoly in a market and 2) that they are attempting to leverage that monopoly to dominate other markets. 1) is surprisingly tricky. The closest “market” that Google can be said to dominate would have to be defined as something like “search-driven advertising”. There, they could probably be shown to have something like 80% market share, and really do act as a monopolist. That said, “search-driven advertising” is a lot smaller than either “advertising” or “search”, and Google manifestly doesn’t have a monopoly in either of those markets (a fact that Google’s lawyers can leverage into _at least_ 3 years grace period). Even getting “search-driven advertising” recognized as a market wrt anti-trust litigation would take at least a year. The real problem comes with 2). Google has been very careful not to try to leverage their “search-driven advertising” monopoly into _any_ other market. Want Android, not looking to become an AdWords customer? No problem. The AdWords people (i.e. where the money comes in) and the Android people don’t even appear to be talking to one another, as near as anyone can tell. Literally no one is being leveraged into taking any Google software as a condition of taking any other Google software. Legally, this matters. From the point of view of most people, Google is mostly dominating the “market” of “giving away bitchin’ software”, which is the sort of thing the Justice Department specifically can’t touch*.

    This whole war will be done in 15 months at the outside. Anti-trust law moves to slow to make a difference. IP law moves quicker, but most likely only quick enough to force a lump-sum settlement after the market has been lost.

    *(EU anti-trust law is a bit more aggressive, and hemmed around with fewer restrictions, but is even slower. By the time it comes into play the fat lady has sung.)

  36. > But I still believe it is not the presence of open-source IP so much as it is the absence of closed IP restrictions.

    The primary difference between these two is the guaranteed ability to fix and enhance the code that you’re using that doesn’t have the restrictions.

    The old “freeware” model worked well for some, but if a customer comes to rely on “freeware” and there’s a problem, it can be hard to rectify.

    In some cases, this is as innocuous as a company delivering the first version of its product for free, and a significant upgrade that everybody will want for money. Any users of the first version (especially who redistribute it, as a cell phone vendor would) are providing free advertising for the (originally free) product, and then once the product gets popular enough, network effects can help the company to raise the price for newer versions.

    Open source makes it extremely hard to apply that sort of lock-in. At a minimum, the customers can choose between paying for the new version, or using a fork that will probably remain reasonably close in capability to the main branch (and might even be enhanced in some ways).

  37. she just finished repainting her shield for our next sword training

    Psh. She wouldn’t have to paint it at all if it were SIM-slottable. (Hey, Morgan! I found an extension to your… what am I saying? Last one to USPTO’s a rotten egg!)

    P.S.: And while we’re at it, let’s see what we can do with that sword…

  38. P.S.: And while we’re at it, let’s see what we can do with that sword…

    Downloadable lightsaber-style sound themes?

  39. Mr. Raymond,

    To say Android has/will Won is one thing….
    To say Google has/will Won is a different thing altogether!!!

    When and if Android becomes so hugely popular….
    Amazon, Facebook, Yahoo, twitter n other web services will not let things slide…

    They will either create their FORK or
    seek equal parity from DOJ/EU.
    And the big phone player and big carrier will demand/seek their custom fork too…

    What about those Dektop Makers would do?
    Bill and Steve?
    Apple and Microsoft?

    Will they let Google slide along?
    No, Apple and Microsoft will send their NUKE!!!!
    Not at ANDROID or opensource…………

    But directly at GOOGLE.

    And boy will it be nasty!!!!

    The only thing saving Google is Steve Jobs though,
    He still think that Microsoft is the biogger and more powerful threat to apple than Google Ad company is.

    wonder how long will steve be around before he retires though?

  40. @kk man:

    Your arguments are getting very tiresome. Nevertheless:

    1) There’s nothing, absolutely nothing, to stop Amazon, Android, Facebook, Yahoo or Twitter from forking Android. The fact that they haven’t done so already or haven’t even made noise towards moving in that directions indicates that they are unlikely to do so and probably don’t care enough to even bother. They do not need to seek equal parity from the DOJ or the EU. There is nothing to stop them from making their own forks, aside from the possibility of paying for the same patent license fees Google and HTC are being subjected to.

    2) The same thing applies to “big phone players” and “big carriers.” BTW– who are these imaginary people? The big carriers are already in on the Android fun. So are nearly all “big phone players,” with the exception of Nokia, RIM, Apple and HP/Palm. Who knows? I’m betting RIM has an Android entry by this time next year, with full BES and Blackberry service support, after they throw in the towel on their own OS platform.

    3) What about the desktop makers? They already have their dogs in this fight.

    4) Apple and Microsoft can’t afford to destroy Google, no matter what Ballmer says.

  41. @kk man

    Google has proven that they are very, very good at monetize increased Internet usage. Therefore,

    Google makes lots of money (big, beyond the mere defensive hedge) even if all Android ends up doing is speed up the dumbphone -> smartphone conversion (which has already happened).
    Google makes more money if Android speeds up smartphone subsumption (seems very likely).
    Google makes lots more money if Android expands the zone of smartphone subsumption (which will happen if the Accessory Development Kit succeeds).

    An important point is that Google makes this money whether or not Android is the dominant smartphone platform! As long as Android is successful enough that Google cannot be locked out of any important smartphone platform (which has also already happened, IMO), Google wins.

  42. Apple will be fine. They’re already shifting the emphasis to tablets, where they have a year’s (?) lead on android. When android catches up there, they’ll shift emphasis somewhere else. It’s a risky business model, but they’re pulling it off beautifully. Remember a few years ago when their cash cow was ipod and then the revenue fell out of the music player market?

  43. >I’m betting RIM has an Android entry by this time next year, with full BES and Blackberry service support, after they throw in the towel on their own OS platform.

    That would be intelligent of RIM. But the company’s last two years gave been so badly bungled that I can’t see them making a recovery like this short of a stockholder revolt throwing that idiot Balsillie out on his ear. Remember, this is the guy who resigned as chairman of the company in 2007 after the auditors turned up US$250 million in stock option accounting errors; why they let him keep the CEO job is beyond me, because I can’t see that he’s done anything since but run RIM’s once-enviable position into the ground.

  44. @esr, @Morgan Greywolf

    I agree that RIM *should* have an Android entry by this time next year, but I also agree that they are too confused and incoherent to pull it off.

    Which is a shame, really, because I think RIM has the pieces (QNX and the Oracle / Sun Java licensing) and motivation to try making “a better than Android than Android”. And RIM could avoid the OS/2 trap because they [should] only care about selling hardware to their loyal business customers, not capturing an ecosystem.

    Here are some questions I wish they’d try answering:

    – Does a QNX kernel under an Android userland actually help with any of responsiveness, power consumption, performance … compared to Google’s kernel(s)?
    – Oracle / Sun owns the most mature, battle-tested and wide-ranging JVM implementation code in the world. Are there any pieces worth adapting / reusing? Garbage collection technology? J2ME or SavaJe nuggets? Even though both of them failed at the business level, there still could be useful components at the technical level. And so on…
    – Did Google make any painful compromises in trying to avoid stepping on Oracle / Sun Java patents (I’d guess not, but we don’t know for sure)?

    Instead, RIM seems destined to keep Nokia company on the path to oblivion :(

  45. I’m betting RIM has an Android entry by this time next year, with full BES and Blackberry service support, after they throw in the towel on their own OS platform.

    Assuming they’re not going to try the hail mary of porting Android to their own architecture (i.e. QNX not linux) and differentiate based on that. If they are doing that, I wish them luck. They’ll need it but Android as a platform will be all the better for it.

  46. @esr I think your law of Smartphones consuming anything that doesn’t have a physical constraint on the form-factor is a good one. But the reverse is also interesting – putting a small, cheap data-only phone into things that do have a physical constraint on the form factor. Things that already have computing power have had 3G receiver/transmitters for a long time (laptops, tablets), but there’s a fair amount of consumer electronics that doesn’t have computing power already, and Android SoC is the cheap way of adding it

    DSLR cameras and prosumer camcorders are obvious examples. TVs already do internet streaming video (netflix, etc), but sticking a standard Android SoC in will be a lot cheaper than the custom kit that the likes of Sony put in them, which will drive that further downmarket (especially into bedroom/kitchen TVs). Also Android will do it better than the interface in my Sony Bravia, and will be standard across multiple brands, so they avoid the UI learning curve on each new TV. That could also eat low-end gaming consoles (ie Wii) by running Android games on a big-screen TV, using your smartphone as the controller. It might also turn TiVo into an app you run on the Android in your TV (though you’d need external storage, and I can’t see that being USB hard-drives you plug into your TV, which means a home-storage box – which are becoming more and more common anyway)

    The other big expensive piece of consumer electronics is HiFi, but I struggle a bit to see what that will benefit from having an Android SoC in, but I suspect someone will come up with something.

    On RIM:

    I’ve just spent several days justifying (on security grounds, to a number of our customers) why I want to let users at my firm access email on Android phones on the same basis as Blackberries. As a result, I can say is that Microsoft’s Exchange ActiveSync is going to kill Blackberry in their home market of corporates. Blackberry Enterprise Server used to have a bunch of central-control and security (securing the device from its user, that is) features that no-one else can match. But Exchange ActiveSync in the 2010 version of Exchange can match it, and you don’t have to pay $50 a user for BES licensing. RIM have released BES Express (which is free, but with a 2000 user limit) to salvage that market – which shows how much they are under pressure – but that reduces them to competing head-to-head on device quality.

    Our policy now is to give the user a budget for a phone, tell them that if they want a fancier one, they can top-up from their own pocket, and they can run any phone that supports BES or EAS. And I’ve just got a number of banks to sign off on the security of a selection of phones, including several Androids, when they were expecting to be Blackberry only. I know at least one bank’s security officer who is going to start pushing for non-Blackberries to be permitted for his own users as a result. RIM’s corporate USP is dead.

  47. The other big expensive piece of consumer electronics is HiFi, but I struggle a bit to see what that will benefit from having an Android SoC in, but I suspect someone will come up with something.

    Other than the obvious: Google TV is ChromeOS now, but in the long term, I see ChromeOS and Android sort of merging.

  48. @Richard:

    And I’ve just got a number of banks to sign off on the security of a selection of phones, including several Androids, when they were expecting to be Blackberry only.

    I’d short RIM, except that Microsoft could give it a huge bump once they realize that they’d rather compete against Blackberries than Android, and start charging $60/phone for Android conections to Exchange.

  49. Other than the obvious: Google TV is ChromeOS now, but in the long term, I see ChromeOS and Android sort of merging.
    If by merging, you mean that Android will subsume the best features of Chrome, while Chrome dies a quiet death, then sure, they’ll merge.

    My bet is that Chrome will be hanging by a thread in a year, and completely gone from the landscape in two.

  50. >DSLR cameras and prosumer camcorders are obvious examples.

    Agreed. There again, the optics won’t fit in a smartphone case.

    >TVs already do internet streaming video (netflix, etc), but sticking a standard Android SoC in will be a lot cheaper

    Agreed again. The form-factor constraint here is the large-screen display.

    >That could also eat low-end gaming consoles (ie Wii) by running Android games on a big-screen TV, using your smartphone as the controller.

    Disagree. An Android device can easily match the computing power of a game console, but ergonomically a physical game controller beats a smartphone touchscreen all hollow. If somebody were to ship Bluetooth game controllers designed to talk to Android, then the game console would be under threat. But there’s a bit of a coordination problem with API standardization for controllers and displays.

    >It might also turn TiVo into an app you run on the Android in your TV

    As you say, this needs external storage. I don’t see a smartphone-centered design making a lot of sense here.

    >I struggle a bit to see what that will benefit from having an Android SoC in [HiFi],

    I’m not seeing it either.

  51. I struggle a bit to see what that will benefit from having an Android SoC in [HiFi],

    I’m not seeing it either.

    Maybe not “hi” fi, but what about a streaming-enabled (personal storage or Pandora or whatever) ghetto-blaster? 40 hours at the beach for about 5GB, and you don’t have to worry about people “stealing” “your” tunes…

    You can get boomboxes that hold iPods, but the cellphone is eating the iPod (but can’t eat the boombox because of the size of the speakers and requisite batteries).

    Yes, I know that there are iPhone and Android add-ons that let you dock phones to your blaster (and there will be more after the release of the Android hardware devel kit), but the more popular you are over the phone, the less popular you’ll be in person, if the music stops every time you get a phone call.

    An enterprising company could probably sell a $50 boombox with a $5/month music plan that included 5GB of data.

    The boombox can have decent sized rechargeable batteries, and is begging to be plugged in (it can come with a tethered power cord with storage), so it’s the perfect location for the wi-fi hotspot as well (with the enhanced $30/month data plan). You could be popular at the beach, providing tunes and connectivity.

    It’s the perfect product for acquiring the “cool” early adopters at a high price point and then ramping the price down and the volume up. You could also buck the trend (at least temporarily) and hide part of the hardware price in the subscription.

  52. Slightly off topic, as an uncle, seeing all of this innovation happen overseas pains me.

    If my nephews and nieces’ interests do not happen to line up with jobs that are inherently domestic, they are going to be screwed when they enter the workforce. If I were a parent, I’d even be more worried about my kids’ future.

  53. >I’m not saying your high-end digital camera example is wrong, matter of fact I called it out in my original post on this topic. But it may be exceptional.

    The moving-mirror DSLR is going to get eaten from below by the mirrorless interchangeable-lens camera. Micro-4/3 and so forth. Turns out just having a huge sensor gets people to move up from compact, and once you realise you don’t actually need a mirror then the camera can be a lot smaller. Micro-4/3 is not bad so far. Even though they’re specifically targeting the compact market, here’s no actual reason it can’t eat DSLR right up to the EOS-1D level.

    So you have something the size of a Panasonic GF3 that shoots as fast as a high-end DSLR and also has Internet and makes phone calls … I’m thinking of a Samsung phone a friend had a couple of years ago that is the size, functionality and quality of a Samsung camera of a year or two before. Phones with interchangeable lenses!

  54. > seeing all of this innovation happen overseas pains me.

    There’s plenty of on-shore innovation.

    Sure, there always will be painful disruptions, because a lot of markets are a lot more global now. But Chinese are consumers, too.

    Global connectivity (both the internet and the easy movement of goods and people) reduces friction so much that a lot of companies are employing increasingly purer business models. If you categorize businesses as to how capital-intensive they are, how labor-intensive they are, the quality of the labor required, and how difficult it is to scale the business, you will see that it is increasingly easy to build a small (perhaps not very scalable) business which relies on other capital-intensive and labor-intensive businesses.

    Fabless semiconductor companies (like the one I work for) are part of an ecosystem business model that will increasingly be employed by diverse businesses. Capital-intensive fabs are increasingly automated. They need high-quality labor, but not much of it, and have other concerns (like ground stability, because earthquakes play havoc with the machinery and product), water, electricity, etc. Labor is such a small portion of the fab cost that (for example) Samsung has fabs in Austin, Texas.

    Scalable labor-intensive businesses, on the other hand, will continue to migrate around the globe. There is some friction associated with moving, but nonetheless, we’ve seen call-centers move to many different countries, and now some of them are being “in-sourced” to heartland America because the labor cost is low enough and the productivity is high enough.

    A mixed model capital-intensive and labor-intensive business is harder to move than a labor-intensive only business. It requires significant planning to set up to begin with, and tends to attract labor, which attracts surrounding businesses, which drives up the cost of labor in the local neighborhood. At the end of the day, it’s hard to project your labor costs fifteen years out, so a lot of these projects don’t necessarily rely on bottom-dollar labor anyway.)

    Then we have non-labor-intensive, non-capital-intensive businesses. Physical and electrical global connectivity has made it easier than ever to start one of these, find customers, find suppliers (from the capital-intensive and/or labor-intensive markets), figure out who your competitors are, etc.

    Even financing (despite the meltdown) is much easier than, say, 20 years ago for a lot of potential small businesses. Yes, you have more competition globally, but you also have more opportunity globally.

    And, of course, if you’re worried that you personally aren’t capable of competing globally, one trick is to figure out a location that has the right mix of businesses to do well globally, and go there and provide local services.

  55. >>DSLR cameras and prosumer camcorders are obvious examples.
    >
    > Agreed. There again, the optics won’t fit in a smartphone case.

    You’re really just a sad old man. You know that, right?

    Consider what can be done computationally with post-processing replacing optics. Think carefully about
    what, say, the “Keyhole” platform does with CPU power replacing optics.

    >>TVs already do internet streaming video (netflix, etc), but sticking a standard Android SoC in will be a lot cheaper
    >
    > Agreed again. The form-factor constraint here is the large-screen display.

    cell phone sized projectors already exist. Next question!

    >>That could also eat low-end gaming consoles (ie Wii) by running Android games on a big-screen TV, using your smartphone as the controller.
    >
    > Disagree. An Android device can easily match the computing power of a game console,

    Well no, not really, given that most of the computing power of a game console is in the GPU.

    >> but ergonomically a physical game controller beats a smartphone touchscreen all hollow.

    A simpleton child of the 70s you are.

    > If somebody were to ship Bluetooth game controllers designed to talk to Android, then the game console would be under threat.

    Idiot. Rather than point out the various products that exist today, that people have hooked up to Android,
    I’m going to just demand that you Google it for yourself.

    > But there’s a bit of a coordination problem with API standardization for controllers and displays.

    “API standardization”? All you need to know is how to decode the bitstream coming off the controller.

    >> It might also turn TiVo into an app you run on the Android in your TV

    As you say, this needs external storage. I don’t see a smartphone-centered design making a lot of sense here.

    Moore’s law. Ever hear of it? Flash is currently exceeding Moore’s law, halving feature size every 2 years.
    And when Flash hits the wall, several technologies like: FeRAM, MRAM, PMC, and PCM stand ready to replace it.

    >> I struggle a bit to see what that will benefit from having an Android SoC in [HiFi],
    >
    > I’m not seeing it either.

    Again, you merely show your age with this viewpoint. Do you mean precision reproduction of an A/V signal? These will surely fall to increasing amounts of computational power. A shared/synchronous group listening experience? Sure, and not with the current requirement that everyone be in the same room.

  56. @Patrick Maupin: “Capital-intensive fabs are increasingly automated. They need high-quality labor, but not much of it, and have other concerns (like ground stability, because earthquakes play havoc with the machinery and product), water, electricity, etc.”

    Interesting; that would never have occured to me. So California and Japan are not ideal places for fabs.

  57. > Interesting; that would never have occured to me. So California and Japan are not ideal places for fabs.

    Everything’s a tradeoff. There are a lot of fabs there for historical reasons, so people who know how to work in fabs live there, so even California and Japan have cutting-edge new fab projects. Sure, Micron has fabs in Idaho, and has grown the local workforce there, but how many people want to move to Idaho? As I mentioned, the quality of the labor may be more important than the quantity.

    As the geometries get smaller, earth movements get more important, but there’s enough experience now to build buildings (for a bit more capital) that can ameliorate small earth movements. But big earth movements are going to cause damage, no matter what:

    http://www.eetimes.com/electronics-news/4214035/Quake-caused–substantial-damage–to-TI-fab

    Companies like TI, with in-house fabs, often have unrelated reasons to put the fab somewhere. All your DLP experts here? That’s a mighty fine spot for that specialized fab.

    But when a pure-play foundry is trying to get the business of a company like the one I work for, attributes like “not being in an earthquake zone” can be useful selling points.

  58. @not(andy rubin):

    > Consider what can be done computationally with post-processing replacing optics.

    We yet to reach the point on cellphone cameras where optics that could gather more light (or additional lighting in the form of a flash) would be useless. If you agree we haven’t yet reached that point, you’re just trolling. If you don’t agree, then you’re much stupider than you make esr out to be. Either way, I’m not going to bother with the rest of your post.

    (Quantum physics being what it is, I postulate that if we do reach the point where additional electromagnetic gathering capability is unhelpful, it will be because of errors in magnification, not because we have achieved the perfect picture. The Chinese apparently agree)

  59. > We yet to reach the point on cellphone cameras where optics that could gather more light (or additional lighting in the form of a flash) would be useless.

    You must note that I never said, “Useless”, only that Eric hadn’t considered algorithmic techniques. HDR is already present in smartphone camera apps.

    Others have already pointed out the Micro-4/3rds market. Very little prevents a future smartphone from including a mount for the lenses in-question.

    It’s not me that trolls, it’s the guy in your mirror.

  60. As for your Chinese FAST telescope. I see you, and raise you an astronomical interferometer.

  61. > Consider what can be done computationally with post-processing replacing optics.

    Not much anything. Physics bases pretty strict limits what you can do with limited amount of gathered light — there is absolutely nothing that lots of computing power and fancy algorithms can do when you simply do not have any data, because your camera didn’t gather enough photons to know what is out there.

  62. Moreover good optics trumps number of pixels in CCD in giving quality of image. Up to some point, of course.

  63. only that Eric hadn’t considered algorithmic techniques.

    What algorithmic techniques? The ones that make a fuzzy interpolated hash to make up for non-existent data?

    Others have already pointed out the Micro-4/3rds market.

    Yes, but they haven’t discussed the pros and cons of applying the format to cellphones.

    Very little prevents a future smartphone from including a mount for the lenses in-question.

    I am sure there will be smartphones available with these lens mounts. Or cameras that are cellphones. Whichever. I am equally sure that not every cellphone will have these mounts, and pretty confident that most phones won’t, in fact, have these mounts, for the simple reason that the mount will make the cellphone bulkier when it is less than useless (because there is a cap attached rather than a lens) so now your camera isn’t even as good as a regular cellphone) and will make the cellphone much bulkier when it is useful (when the lens is attached).

    One final note. The standard cellphone camera has quickly dominated the useful niche of ad hoc recording, by replacing the polariod and the super 8, and adding a spycam. Having to choose and mount a lens and/or remove a lens cover detracts from the instant-on capability of the device, and completely destroys the spycam capability.

    It’s not me that trolls…

    Ah. Stupid it is, then. Thanks for the confirmation.

  64. And, of course, if you’re worried that you personally aren’t capable of competing globally, one trick is to figure out a location that has the right mix of businesses to do well globally, and go there and provide local services.

    You say this like it is easy to do. It’s not. Emigrating to other nations, even for work purposes, can be extremely difficult to do, even for the motivated.

    Compared to the USA, most other nations are stricter at issuing long term work visas.

    That’s the single biggest problem of free trade: free trade requires free movement of labor. That is, employment shifts with the trade surplus. The more trade surplus, the more jobs. Thus, in a global environment, people need to emigrate to where the jobs are.

    But nearly all nations highly restrict long term immigration. This makes it very difficult to move to where the jobs are. And that’s not even considering the cultural and linguistic challenges of moving to another nation.

    By the way, I’m not worried for myself; I got lucky. My chosen profession naturally lines up with well paid domestic employment. I’m worried that the next generation coming up is going to face a small middle class, because most of the jobs are overseas.

  65. You say this like it is easy to do. It’s not. Emigrating to other nations, even for work purposes, can be extremely difficult to do, even for the motivated.

    Compared to the USA, most other nations are stricter at issuing long term work visas.

    I think you missed my point. My contention is that, despite market shifts, there will be plenty of places inside the US that have significant globally competitive businesses. You can easily migrate there from inside the US, and you already made the point that if you are skilled labor, you can relatively easily migrate to the US from outside the US…

  66. What algorithmic techniques? The ones that make a fuzzy interpolated hash to make up for non-existent data?

    Patrick, the algorithm for that is open-source and documented here.

  67. @Paul Brinkley:

    I just checked all my pockets and I don’t have a Jesus handy, so I can’t make use of that algorithm. BTW, in case I ever do find a Jesus in my back pocket, do you have any more specifics on the interface protocol? Is it sufficient to whine that material objects are lacking? Do they have to be necessary material objects like food, or would a 52″ television qualify? (How about clothing — that’s sort of in between?) In the food category itself, does it have to be really basic sustenance like bread and fish, or would filet mignon and lobster qualify? Can I get this miracle with a side miracle of water-to-wine, and will the wine quality match the food? Does Jesus even know about the price of fish these days? He could make a fortune.

  68. @Jakub Narebski

    More pixels and better postprocessing always win over better optics, so long as you can assume that each pixel receives enough light from the target that you can assume it to be “smooth”, as opposed to a noisy stream of individual photons.

    Which, for the ridiculous pinholes that most cellphone cameras have, was about 5 megapixels ago. Cameras need to gather light to take pictures, and no amount of neat tech can help that.

  69. You can be assured, the wine will be good.

    I know there is historical precedent for this, but I’m still not sure about either the exact capabilities or the interface protocol. For example, the fish and bread seem to be based on some kind of 3D copier technology while the water to wine was perhaps done alchemically. Or maybe it’s all down to Star Trek replicator-type technology, and Jesus didn’t have any other food patterns handy, so he had to input the fish and bread into the replicator. Of course, nobody would ever be caught short without the “wine” USB key for their replicator, so the same technology could easily have been used for that miracle.

    Remember God’s other son. (In a sonorous southern minister drawl) “Send for my free cookbook and I will show you how, with just one package of Mrs. Paul’s frozen fishsticks and one loaf of genuine Jewish rye bread, you too can feed up to 5000 unexpected drop-in guests, say hallelujah!

  70. Back on topic, some kind of topic. The upcoming crumbling of MS:

    As Microsoft’s monopoly crumbles, its mobile future is crucial
    http://www.zdnet.com/blog/bott/as-microsofts-monopoly-crumbles-its-mobile-future-is-crucial/3454

    Now that we’ve seen demos of Windows 8, it’s clear what he meant. With Windows 8, Microsoft is unifying its user experience across an entire range of devices, including traditional PCs, ARM-based tablets, smartphones, and the Xbox 360. The stakes are incredibly high, and there’s really only one chance to get it right. if Windows 8 flops on phones and tablets, Microsoft’s future is very dim indeed.

    It will be a smaller, humbler MS that will need to work hard for a 5% margin. Just like the rest of us/them. If there will be a MS left.

  71. I forgot the other link:

    Windows’ Endgame. Desktop Linux’s Failure
    http://www.zdnet.com/blog/open-source/windows-endgame-desktop-linuxs-failure/9109

    None of these though are traditional Linux desktops. Only Ubuntu’s Unity comes from what most of who’ve been using Linux for years think of as mainstream Linux. Perhaps Unity will become a major player in the mobile space. I fear it may also be a case of too little, too late, but we’ll see what we see.

    So it is that while I’m now more sure than ever that Linux, thanks to its presence in servers, cloud, and mobile devices, will eventually be more important than Windows, I also think that almost no one will know it. Linux will–indeed already is–become the foundation on which many other user systems will be built. But both desktop Windows and Linux are going to decline.

  72. Ed Bott has the Windows logo tattooed on his right bicep. And even he’s saying Microsoft’s reign is over. What’s next? Duke Nukem Forever gets published? Oh, wait…

  73. @Winter: “But both desktop Windows and Linux are going to decline.”

    I agree with your statement that the desktop will decline somewhat from its current role as other (mostly mobile) devices take over some of the usage occasions that have belonged to desktops/laptops for the past decade.

    But Linux is such a tiny percentage of desktops today, and those Linux desktops are disproportionately in the hands of geeks who need the extra capability of a general-purpose computing platform, that its total market size could go either way. As total desktop share falls, Linux desktop share could go up, down, or sideways.

  74. @Cathy:
    “As total desktop share falls, Linux desktop share could go up, down, or sideways.”

    I agree. Personally, I think that desktops will only see a relative decline, less than an absolute. However, I expect that personal computing will move towards “dockable” smartphones. In the end, Linux could even overtake what is left of the desktop. Curiously, I already see highschool kids and students around me switching towards Mac and Linux. Even those I would have never expected to even think about technology. MS are surely doomed in their current form.

    I expect that the shareholders of MS will soon realize Steve is wasting their money in a hopeless fight for a monopoly in the mobile space. At that point they will start to liquidate the company and go over in “customer milk” mode.

    2012 is my bet.

  75. “I expect that the shareholders of MS will soon realize Steve is wasting their money in a hopeless fight for a monopoly in the mobile space.”

    I’m really surprised that Ballmer wasn’t fired long ago. What the heck has he done to add value to the company, vs. simply milking the desktop monopoly for what can be extracted?

  76. @Cathy: “I’m really surprised that Ballmer wasn’t fired long ago.”

    They love the fact that he’s nuts they (Microsoft) are on the face of it souless, it’s good for them in a strange way to have an eccentric in the mix. It’s kind of an accepted standard in high level tech companies nowadays. Whether they bring value to the business or not. Sad I know but it’s all internal macho power struggles. Now Bills gone what will they do!

  77. “the iPhone’s value proposition is weakening in a way well symbolized by the fact that the upcoming iOS 5 will copy some key aspects of the Android UI. Just as the price gap between iPhones and cheap Chinese Androids widens to a chasm, Apple’s vaunted “user experience” is looking like much less of a differentiator than it used to. Apple will face a cruel choice: sacrifice margins or risk disruptive collapse of its market. It may not even be possible for Apple, an American-based company with relatively high baked-in costs and margin requirements, to follow the likes of MicroMax or ZTE far enough down the price curve to remain competitive.”

    Huh? This is the perfect example of why so many geeks just don’t “get” Apple, and why their crys of “Apple is Doomed! Doooooommmmeeeedddd!” are so laughable.

    First off, a few checkmark features don’t make a user interface. Secondly, the much vaunted “user experience” is far more than the iPhone UI. With iOS 5, this is going to be underscored further. With iCloud being freely available to anyone and through iCloud the dependance on a computer being totally removed, iOS adoption – particularly in devices other than smartphones – is going to really accellerate.

    And as for smartphones – sure Android will have the volume. What a surprise – it’s freely available! Duh! Do you think Apple cares? Not in the slightest! Until Apple stops sucking up over 80% of the profit in the smartphone market, I doubt they will care one whit about marketshare.

    Just like with netbooks – everyone insisted Apple was dead because they didn’t have a netbook solution. Apple never intended to put out a netbook solution! Netbooks are the worst of all – small, cheap low resolution screen, small keyboard, crappy processor, limited RAM, tiny hard drive – all in the name of price. The useability for netbooks stinks! The only people enamoured with them are technologist that are willing to overlook the faults because netbooks are cool, unique and another gadget to add to the stable. For the average non-technical person who just wants a tool, once they get home with a netbook they are often dissapointed and often return them.

    You can be dismissive about “user experience” all you want but that’s what it’s about baby! My father loves his iPad not because it’s a tablet, not because it’s from Apple, or for any of the other points being argued in this artile or in the comments – he loves his iPad because *IT DOES WHAT HE WANTS WITHOUT GETTING IN THE WAY*

    If you thought to yourself “big deal, I can do that with a PC” congratulations – your not the target audience. Your also in the vast minority. Only because the Internet is inhabited by technical people do we get lulled into the false complancency that people like my father are abnormal. He’s not – he’s mainstream. He’s the 80% of the human population. He doesn’t and never did want a computer. What he does want to do is keep up with friends, have conversations with them, get the news, weather and keep up with his sports. Computers were tolerated because they allowed him to send and recieve email and do some light research, but he never really liked them. The iPad is a hit with him because it’s NOT a computer. Its an intimate device. He directly manipulates things on the screen – the feedback is immediate and there are no intermediate abstractions like Mice to get in the way. If he want’s to interact with something *he touches it*.

    What a concept!

    So y’all can argue about marketshare, feature checklists and even price all you want – it doesn’t matter. Until other companies are customer experince focused like Apple, and start taking into account the entire experience of using their products llike Apple, they aren’t going to be as successful as Apple. And by success, I am referring to profit, not meaningless measures like marketshare. You want to talk about marketshare that matters, how about valuation on Wall Street? There is a reason Apple is number two behind Exxon – they make products that connect wtih people because they are designed for the average person. They are tools. They aren’t technology for the sake of technology. That’s heresy for many techies – but again that’s the point that keeps flying over their head and why they just can’t fathom how Apple is successful!

    And no, it’s not marketing either. Yes, you can trick people some of the time with marketing – but if your product or service is fundimentally crap, eventually you will be found out. Apple has owned the customer satisfaction surveys and has the lowest product returns in the entire tech industry for over a decade, and that has extended into their Smartphones and the iPad as well. The reason is simple – they pay attention to the fundimentals!

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