Why it is So Hard to Innovate Like Apple

Those of you who work inside larger enterprises will appreciate the sentiment that virtually no companies innovate the way Apple does. And even Apple might regress towards the mean in five years or so.

"While driving our new Acura RDX the other day (and trying to find something via the navigation system), my partner and I both looked at each other and said, "When will Apple make a car? They'd get it right," says Jack Aaronson, The Aaronson Group CEO.

"We say the same thing about cable TV interfaces, wishing that Apple TV would finally become a higher priority for Apple. We say the same thing looking at the new slew of Android phones, and are frustrated that Google has chosen to emulate Microsoft's way of designing software instead of Apple's," he says.

Most of you who work in larger enterprises will appreciate the many subtle, and not so subtle ways business-relevant innovation can be stifled. Those of you who work at small organizations will face equally-substantial obstacles, but for different reasons. Bigger organizations have the resources to innovate in relevant ways, but typically have human obstacles to doing so. Smaller organizations often have the will, but not the resources.

If innovation were really easy, more firms would be clearly recognized as outstanding in that regard. Innovation, no less than anything else in the real world, appears to be a "Bell Curve."

Innovate or Get Out of the Way

Amazon to buy WebOS?

Amazon is rumored to be among the top contenders to buy WebOS from Hewlett-Packard. The obvious application would be the 10-inch tablet Amazon is expected to develop.

The Kindle Fire is powered by Android, but it’s been heavily customized by Amazon to the point where you can barely tell, some would argue. Other players in the device business have reasons to create an ecosystem of products unified around a single operating system, Apple being the classic example.

But there has been a rapid trend towards operating system fragmentation recently, with major smart phone suppliers deciding they must own both their operating system and hardware to compete at the top levels globally, in both smart phones and tablets.

Amazon might believe it needs a similar degree of uniqueness for its larger-screen devices that might function less as e-readers and more as full-fledged tablets.

Amazon to buy WebOS?

Microsoft to Add Comcast, Verizon Video Content to Xbox Live

Microsoft Corp. plans to offer online video licensed from Comcast Corp. and Verizon Communications through Xbox Live, so long as consumers already are subscribers to either provider, Bloomberg reports.

Microsoft also is said to be in talks with almost two dozen providers of music, sports, movies and TV shows in the United States and Europe, and may announce an expanded Xbox Live streaming service as soon as next week. Essentially, the moves would allow Comcast and Verizon to enable their current services on the Xbox platform, increasing stickiness, while Xbox Live would presumably also become a more-appealing service.

Microsoft to Add Comcast, Verizon Videoto Xbox Live

How Low can Kindle Prices Go?

Kindles at $79 and $99 ought to drive quite a lot of adoption of basic e-readers. The issue is what comes next, at the low end.

Over the last four years, prices for the low-end model have dropped from about $400 to $80.

Bundle a content subscription and the price could be really low.

Kindle pricing over time

"Unintended Consequences" of Financial Reform Laws

Bank of America Corp. plans to charge its customers a $5 monthly fee for making debit-card purchases starting early in 2012, the Wall Street Journal reports.

The fee will apply to customers with various checking accounts during any month they use their debit card to make a purchase. The fee will not apply to customers who do not use their debit card to make a purchase or who only use it to make ATM transactions. The fee also will not apply to customers in certain premium accounts.

Bank of America is trying to cushion revenue losses it expects to incur from new caps on the fees merchants pay when a customer uses a debit card at their stores. In June, the Federal Reserve Board finalized rules capping such fees at 24 cents per transaction, compared with a current average of 44 cents.

Other banks have introduced or are testing new fees in response to the debit-fee caps, which stem from a provision known as the Durbin amendment in last year's Dodd-Frank financial regulation overhaul legislation.

The moves illustrate the unintended consequences that tend to develop from "well meaning" regulation. The Durbin amendment ostensibly was an attempt to "protect" consumers and retailers from "high transaction fees." But the rules also represent an immediate $6.6 billion reduction in bank revenue.

So what will the banks do? Raise other fees to recoup the losses. Retailers might still be happy to pay the lower transaction fees. But the shortfall will be made up directly by customers.

BofA to Charge Debit-Card Fee - WSJ.com (subscription required)

More sales leads stem from websites, not social media

The website was cited by executives as the top online source of sales leads (23 percent), followed by e-mail (14 percent), online advertising (7 percent), and social media (3 percent), in a recent survey sponsored by Demandbase. None of that should be surprising. So far, the best advice for a business of almost any size is that if there were only one tool to invest in, the company website would top the list.

Enterprises emphasized the importance of measuring volume (44 percent total), while small businesses emphasized quality of leads (40 percent total). More sales leads from websites, not social media

Social is Not About Media

A social business, then, by definition, is one which engages customers across a multitude of channels, across the entire organization, and is active in their communication and interactions. Human relations, finance, billing, accounts receivable, support and operations all have social dimensions. No group can sit idly by and say that it does not apply to them. You can no longer be indispensable to your customers for long. Your customers can always readily find an alternative. Social is about all business processes, not just marketing and promotion.

Stop thinking social media, just think social

Google Gets New Dept. of Justice Scrutiny

Google says on its policy blog that "we know that close scrutiny is part of the process and we've been talking to the U.S. Department of Justice over the past few weeks" about the acquisition of Motorola Mobility. "

"Today we received what is called a "second request," which means that the DOJ is asking for more information so that they can continue to review the deal. (This is pretty routine; we’ve gotten these kind of requests before.)," Google says.

"While this means we won't be closing right away, we're confident that the DOJ will conclude that the rapidly growing mobile ecosystem will remain highly competitive after this deal closes," says Dennis Woodside, Google SVP.

Maybe the follow up is relatively routine. But these days, antitrust scrutiny seems to be pronounced, in the case of big household names.

An update on Motorola acquisition

Does FTTH Lead to Economic Growth?

If fiber to the home could show clearly that it boosts service provider revenue and reduces cost, more observers would be unabashed supporters. But large-scale deployments in the United States are relatively ambiguous, one might argue. Verizon has the overwhelming footprint and much of the total industry experience, and observers still cannot agree on whether FiOS has been a clear success or not.

Likewise, nearly everybody seems to believe that fiber to the home is required for economic development. But even there, the impact is hard to discern. David Russell at Calix tried to test the hypothesis, looking at communities where FTTH had been in place for at least five years, was deployed ubiquitously and was deployed at a regional commercial center.

Based on what is available today (data through 2008) Russell looked at the growth between 2004 and 2008 and compared the results from the towns served by FTTH with the rest of their states. It turns out that of the five (Bristol, Va./Bristol, Tenn.; Dalton, Ga.; Jackson, Tenn.; Reedsburg, Wisc.; and Windom, Minn.) only three did better in business creation than other towns in their state. In both Dalton and Reedsburg, business creation trailed other areas of Georgia and Wisconsin, respectively.

When it came to job creation, only Bristol and Dalton did better than other towns in their states. But that's not to say they added jobs. Bristol actually lost three percent of jobs and Dalton nine percent.

So only the Bristol area did better than the rest of its state (Virginia) in both job and business creation.

Unfortunately, when economic data is available for the 2008 to 2010, the data isn't likely to improve, given the effects of the Great Recession of 2008. So it is likely to remain more a matter of faith, not fact, that FTTH indeed clearly underpins economic growth.

FTTH's Benefits Are Not Obvious

LTE in France Will Require Facilities Sharing

French mobile service providers are going to have to share tower infrastructure and resources to support Long Term Evolution, analysts at Fitch Ratings say.

The pressure to share infrastructure will occur because the demands of investing in LTE are going to put huge pressure on mobile service provider cash flow. This makes network sharing or roaming more likely. Network sharing key for French LTE

Mobile Broadband Tops Fixed for First Time in Australia

Mobile wireless internet (excluding mobile handset) connections (44 percent) now exceed Digital Subscriber Line (DSL) connections (41 percent) in Australia.

Mobile wireless (excluding mobile handset connections) was the fastest growing internet access technology in actual numbers, increasing from 4.2 million in December 2010 to 4.8 million in June 2011.

That doesn't mean mobile and fixed service are equivalent. People use the connections in different ways. But one does wonder how fixed network demand will be affected as more mobile devices require a broadband connection. At some point, many household will find themselves paying more for mobile broadband than for fixed broadband. For many households, this already is the case.

The point is that demand for more-expensive fixed connections will be dampened as more consumers find they must spend on mobile broadband. There is, after all, only so much any household will be able and willing to spend on broadband, overall. 

Mobile now dominates Australian broadband

Is Amazon Kindle Fire Really a Tablet?

Amazon’s launch of a new seven-inch, color screen “Kindle Fire,” priced at $199,  got most of the attention, talked about by many as an “iPad” competitor, but Amazon actually also released three other new Kindle devices that aim to strengthen Amazon’s grip on the e-reader market.

One of the new Kindle e-readers does away with the touch screen and 3G features that the other new Kindle models employ, using Wi-Fi and a directional pad instead, and will cost just $79. That is an attempt to lock up the e-reader market at the low end. Amazon launches Kindle Fire

The other two Kindles that Amazon introduced are based on the black-and-white “E Ink” displays. The Kindle Touch 3G uses infrared senors for touch, and thus eliminates the tiny keypad below the screen. It includes free wireless 3G data service, which will work in over 100 countries, for just $149. The Kindle Touch model is identical but lacks the free 3G service, relying on Wi-Fi instead, for just $99.

Some will say the Kindle Fire is designed to compete more with the Barnes & Noble Nook than the Apple iPad, at least in the current form factors. Until a larger-screen Kindle is introduced, the Kindle will largely remain a content consumption device, where the Apple iPad can be used for some work tasks as well.

Of course, many of use would argue that the iPad, though it can be used for a bit of work, also mostly is a media consumption device.

What is clear enough is that, as expected, Kindle will be designed to be a razor to sell razor blades. The idea is to put a low-cost device widely into the hands of users and then create revenue by commerce and content sales.

The comparison to the Apple iPad will be irresistible, but some of us would argue the Kindle Fire and the other devices more directly represent an evolution of the e-reader device.

Originally designed to support reading books, the e-reader is becoming a portable multimedia platform, supporting consumption of magazine, video and audio content as well.  Kindle Fire not a direct iPad competitor

In that sense, Amazon might be on the verge of dominating one part of the media consumption device space that more closely resembles the iPod touch market segment than the iPad.

Though it remains to be seen how end user behavior could develop, retailers say tablets already have changed end user online shopping behavior. Tablets still account for only a small percentage of overall e-commerce, but account for a higher percentage of commerce activity.

While the conversion rate—orders divided by total visits—is three percent for shoppers using a traditional PC, it is four percent or five percent for shoppers using tablets, says Sucharita Mulpuru, an analyst at Forrester Research. Tablet Users Spend More Online - WSJ.com:

Many retailers also report that tablet users place bigger orders, in some cases adding 10 percent to 20 percent to their orders, than shoppers using PCs or smart phones. In a behavioral sense, a tablet seems to facilitate different behavior than a PC or a smart phone.

It remains to be seen how other behavioral differences might emerge as the tablet space and the media consumption device space begin to differentiate.

When Measuring Broadband, Methodology Matters

The FCC recently released a report that contradicts previous speculation that American ISPs deliver much less broadband performance than advertised. This event examined the report, highlighting methodological improvements over previous studies and examined the stresses and strains on the broadband ecosystem.

Mobile Devices Have Eclipsed the Desktop

International Data Corporation has predicted a compound annual growth rate of 16.6 percent for mobile Internet use, with mobile Internet traffic eclipsing PCs and wireline devices by 2015. Mobile devices will continue to provide the richest, most fully featured experiences and we'll see the gap continue to grow. Mobile Devices Have Eclipsed the Desktop

Mobile Changes Shopping Behavior

New research in Germany and the United Kingdom shows the importance of e-commerce using a mobile device among younger consumers.

The study found that young people in the United Kingdom are used to go online using their mobile devices, with 62 percent of them regularly doing so. This figure is lower in Germany, namely 34 percent of the participants confirming that they use their mobile phones to access the internet.

While shopping for groceries, young consumers form Germany are using their mobile phones to compare prices, make shopping lists and look for discount and deals. Apart from that, young users from the United Kingdom are also searching for product information.

When it comes to fashion shopping, customers from both Germany and the United Kingdom are using their mobile handsets to make shopping lists, finding store locations and comparing prices, the report indicates. Mobile changes commerce

Amazon Unveils $199 Kindle Fire

The new Amazon "Kindle Fire" will have a seven-inch display and sell for $199, compared with $499 for Apple’s cheapest iPad, Amazon executives said. The device, a souped-up version of the Kindle electronic-book reader, will run on Google Inc.’s Android software.

Sales of Amazon’s electronic books, movies and music on the device may help make up for the narrower profit margins that are likely to result from the low price, said Brian Blair, an analyst at Wedge Partners Corp. in New York.

Amazon Unveils $199 Kindle Fire Tablet

Will Apple kill the iPod?

Some now are speculating that Apple might phase out all iPods that do not have touch screen interfaces, namely the "Classic" and "Shuffle" versions. Others speculate that the iPod itself will be discontinued.

In the fourth quarter of 2010, iPod sales made up just eight percent of Apple's total revenue, and they have been in a steady decline ever since the iPhone's introduction.

Will Apple kill the iPod? | Crave - CNET:

Visa Announces New Mobile Payment Services

Visa Europe today announced the launch of "Visa Mobile Person-to-Person" payments and "Visa Alerts."

Visa Mobile Person-to-Person payments allow registered users to transfer funds to any Visa cardholder in Europe from their mobile phone. The app makes it possible to send money to an address book contact, to a mobile phone number, or to a specific Visa card number.

Visa Alerts notify registered Visa cardholders on a real-time basis whenever their card has been used to make a purchase or to withdraw cash through Visa Europe's payment network.

The services are commercially available to Visa Europe's member banks from October 2011. Visa Announces Mobile Payment Services

Amazon to launch Kindle tablet today

Amazon will unveil its new "Kindle Fire" tablet computer today, Sept. 28, 2011, reports TechCrunch. The Fire will not replace the Kindle e-reader, which remains available. Retail sales are expected to begin in November 2011, and some speculate the device will resemble the Research in Motion "Playbook." Amazon to launch Kindle tablet

Samsung bets on Tizen?

Tizen, a new open source project, is a mobile and device operating system based on Linux and intended to support multiple device categories, such as smartphones, tablets, smart TVs, netbooks, and in-vehicle infotainment devices.

The Linux Foundation will host the project, where Tizen development will be completely open and led by a technical steering team composed of Intel and Samsung. The Tizen application programming interfaces are based on HTML5 and other web standards.

Samsung appears to believe it will have to feature its own operating system in the future to compete with the other ecosystems which integrate hardware and operating system. Apple was the original model, but Research in Motion, Palm and Symbian were examples. In a new twist, whether a platform is "open" or "closed" is not the key issue.

What matters is whether a significant ecosystem can be built around the platform, which might be anchored by a single supplier. Both Android and Windows now are trending in a direction that could be described as freely licensed, whether open or more closed. Tizen might expect to develop as an open, freely licensed, but still "captive" operating system in some key respects.

"Open or closed" used to be a key dividing line in the mobile operating system area. These days, such distinctions appear less important. What is starting to emerge is a view that user experience cannot be optimized unless the OS and the hardware are tightly integrated.

Apple's model seems to be winning, in other words, not the older Microsoft Windows model.

Welcome to Tizen