Dell Encounters a Changing Era, As Did IBM, Microsoft: Will Apple be Next?

There's a good reason for eras of computing and the scary fact that no leader in one era has lead in the next era. Firms survive the shifts--IBM is the best example so far--but they do not lead in the same way they once did. 

Historically, what it has taken to succeed in each era has required different architectures, has had firms engaging with different customers, or in different ways with customers, and has had different amounts of integration with other parts of life. 

Some would say we have been though four eras, and are entering the fifth of five eras of computing, including mainframes, PCs and Web, while we now are entering the "Device" era, which will be followed by something Robert Grossman calls the "Data" era.

Others might say we have been through four eras, including mainframes, minicomputers, PCs and now are in an era where cloud or mobile might better characterize the new era. 

The point is that, historically, these eras correspond to business leadership. It is therefore no knock on executive skill that firms such as Dell, HP, IBM and perhaps now even Apple have run into problems when eras change. 

Most technology historians would agree there was a mainframe era of computing, followed by the mini-computer and then PC or client-server era. Most would agree that each era of computing has been lead by different companies.

IBM in the mainframe era; Digital Equipment Corp. in the mini-computer era and Microsoft and Intel in the PC (or Cisco in the client-server era, as one might also refer to the PC era) are examples. Apple has been among the brightest names in the current era, however one wishes to describe it. But judging by market valuation, Apple has hit a bit of an air pocket.

But there is no doubt there has been a change over the past decade or so. Where in the late 1990s one might have said EMC, Oracle, Cisco and Sun Microsystems were the four horsemen of the Internet, leading the business, nobody would say that in 2013. 

These days, it is application firms such as Google, Amazon, Facebook, plus Apple, that fit into the typology. 

There has been a trend towards computing pervasiveness, as each era has succeeded the earlier era. Computing used to be in a "glass room." Then it could be done in a closet. With PCs computing moved to the desktop. Now, computing is in a purse or pocket. 

The role of software obviously has become more important over time. But, to this point, computing eras have never been defined by the key applications enabled. Perhaps we will one day see matters differently, but it would be a change to shift from "how" computing is done to "what computing does" to define the eras. 

We all sense that a new era is coming, and that the Internet, mobile devices and applications will be more important. But there is not any agreement on whether we have "arrived" or are still only approaching the new era. 
We certainly are leaving the PC era. That's why former Apple CEO Steve Jobs always insisted the iPad was not a PC. In fact, many would insist that it is the tablet's optimization for content consumption that makes it distinctive. 

We can't yet say that the next era of computing is defined by mobile devices, tablets, the Internet or cloud computing or even the fact that leadership is shifting more in the direction of applications and activities than computing appliances. But all of that hints at the shape of what might be coming. 

If history holds, someday even Google, Apple, Facebook and Amazon will be seen as "former leaders." Despite the success those firms have enjoyed, there is still no precedent for a firm that leads in one era to lead in the next. 

And IBM has shown one way of surviving in an era a former leader cannot dominate. Dell wants to go the same route. But it might be fair to say that "surprise" is one common element when eras start to change. 

Michael Dell, about to execute a deal to take Dell private  said the "rise of tablets had been unexpected."  

"I didn't completely see that coming," he said.

Dell would be in good company. Bill Gates did not "get" the Internet, either. 

Three Breaks Ranks on LTE Pricing

Three UK says it will not charge a premium for customers using its Long Term Evolution 4G network, taking a different retail pricing policy than many other service providers that offer LTE only at higher effective prices. Three UK says all smart phone price plans will include LTE access at no extra charge. 

LTE service will be added to Three’s "Ultrafast" network later in 2013. Unlike some other U.K. mobile operators, it will be available across all existing and new price plans without customers needing to pay a premium fee, Three UK says. 

That's an example of how an upstart contestant in a competitive market can try and disrupt market pricing structures. 

Low-Cost Apple iPhone is Coming

All protestations by Apple aside, Apple has to develop a lower-cost iPhone it is to compete with arch-rival Samsung in developing markets, the next big battleground for smart phone suppliers. Apple might continue to deny it is working on such a device.

But analysts at investment firm Detwiler Fenton say Apple is working on a new product for the low end of the market that uses a Qualcomm Snapdragon processor. The device might even deliberately feature less robust graphics and video support, or other features standard on today's iPhones, to maintain distinctiveness from the rest of the iPhone line. 

100 Mbps Access Will be Common by 2020. Ubiquitous 1-Gbps Access Might Take 10 Years

Policymakers, policy advocates and many bandwidth-dependent interests are calling for either 100-Mbps or 1-Gbps Internet access as a “standard” U.S. reality by 2020 or so. Some will doubt that is feasible. As daunting as that objective sounds, history suggests the goal is achievable.

In fact, some relatively standard forecasting techniques suggest the 100 Mbps target is inevitable. Perhaps the only question is when the 1-Gbps speeds might be common.

Give it a decade. In 2002, it is hard to remember, only about 10 percent of U.S. households were buying broadband service. A decade later, virtually all Internet-using households were buying broadband access service.

Researchers at Technology Futures continue to suggest that 100 Mbps will be a common access speed for U.S. households by 2020, for example.

In 2009, Technology Futures predicted that, in 2015, about 20 percent of U.S. households would be buying access at 100 Mbps, about 20 percent at 50 Mbps, and something more than 20 percent will be buying service at about 24 Mbps.

That might have seemed a bold forecast back in 2009, but Technology Futures uses a rather common method of technology forecasting that has proven useful. In fact, Technology Futures has been relatively accurate about access speeds for a couple of decades, at least.

The 2009 forecast by Technology Futures furthermore seems to be a reasonable approximation of reality. Technology Futures had expected that roughly 20 percent of U.S. households would be buying 1.5 Mbps service by about 2010, another 20 percent would be buying 24 Mbps service, while 40 percent of U.S. households would be buying 6 Mbps service.

The Technology Futures estimates of 2009 seem to match other data reasonably well. An Akamai study suggested that typical U.S. access speeds. were about 4 Mbps, on average, in 2010,

Separate test by Ookla cited by the Federal Communications Commission show widely varying speeds in different cities, but running generally from 8 Mbps to 12 Mbps in 2010.

Recall the Technology Futures forecast that 40 percent of U.S. households would be buying services of about 6 Mbps, with 20 percent buying 24 Mbps and 20 percent buying services of about 1.5 Mbps. Average them all together and you wind up somewhere between 6 Mbps and 12 Mbps.
But the forecast of 100 Mbps by 2020 requires movement of two orders of magnitude in less than a decade, and three orders of magnitude to reach 1 Gbps.

You can count Netflix CEO Reed Hastings as among those who think the typical U.S. household will be buying quite a lot of access capacity by 2020. The difference is that where Technology Futures believes 100 Mbps would be typical in 2020, Hastings thinks 1 Gbps could be a reality.

Back when modems operated at 56 kbps, Netflix took a look at Moore’s Law and plotted what that would mean for bandwidth, over time.

“We took out our spreadsheets and we figured we’d get 14 megabits per second to the home by 2012, which turns out is about what we will get,” says Reed Hastings, Netflix CEO.“If you drag it out to 2021, we will all have a gigabit to the home.”

The difference between the Netflix expectation and that of Technology Futures probably can be accounted for by the fact that Moore’s Law applies to only a relatively small amount of access network cost. Physical costs other than semiconductors account for nearly all access network capital investment and operating cost, and none of those other cost elements actually follow Moore’s Law.

The point is that, whether government policies and incentives are in place, or not, it is highly likely typical access speeds will be relatively widely available by 2020 or 2025.

With most things broadband, a decade is plenty of time to bring surprising speed increases into common and typical use.

PC Won't be So "Personal" in Future

How people use PCs at home is changing, with most likely to shift to a "shared" device model, with the personal devices becoming the smart phone and tablet, one might suggest. As once was the case with additional access lines in the home being purchased for teenagers, fax machines or dial-up Internet access, a shift in demand might be occurring.

The change is that although most homes will keep a PC for content creation, on a shared basis, spending that once went for "personal" PCs might be shifting to tablets. That means the replacement PC market will shrink. 

“Tablets have dramatically changed the device landscape for PCs, not so much by ‘cannibalizing’ PC sales, but by causing PC users to shift consumption to tablets rather than replacing older PCs,” says Mikako Kitagawa, Gartner principal analyst.

That implies a market where most people will use "personal" tablets as the primary Internet appliance, while the shared PC gets used when people have to create content. That might also imply that the replacement PC market will shrink, as PCs will be retired and replaced by tablets over time, with only one PC in a home upgraded over time as the shared content creation device.

So PCs will tend to become less "personal," becoming a shared use device, more like a TV screen or microwave oven, in that sense. 

Google, French Publishers Compromise on "Link Taxes"

Google will create a €60 million Digital Publishing Innovation Fund in France that is a compromise designed to avoid payment of "link taxes" to French publishers. The new fund will avoid setting a precedent whereby Google pays content owners to index their content. 

On the other hand, the deal funnels resources to French publishers. As part of the deal, Google also says it will work with French publishers to increase their online revenues using Google's advertising technology.

The compromise avoids putting Google in a position where it directly is paying content owners to index their content. On the other hand, French publishers will be compensated in other ways, including by potentially higher advertising revenues. 

The deal is significant because it shows the growing number of ways that Google has to adapt to growing regulatory oversight and commercial pressures by ecosystem partners that think application providers are building big businesses without adequate compensation to content developers or access providers. 

The compromise probably is a direction that will happen more often in the future, as ecosystem revenues are essentially transferred from Google to other partners, but in indirect ways that do not force Google to directly pay for either terminating access or copyright fees. 

94% of U.S. Homes Can Buy Mobile Broadband at 3 Mbps Speeds

Some 93.9 percent of mobile Internet access subscribers in the United States have access at 3 Mbps or faster, compared to about 93 percent of fixed network subscribers, an NTIA analysis suggests. The latest NTIA analysis will be updated in another six months, and the NTIA says it still wants feedback on the accuracy of the maps supporting the data.

Some 34 percent of homes have access to fixed wireless networks offer access at 3 Mbps. When considering that figure, keep in mind that fixed wireless does not operate as ubiquitously as do DSL and cable modem networks. The NTIA data only suggests that about a third of U.S. households can buy service at 3 Mbps from a fixed wireless provider.

That scenario does not change for speeds of at leaset 6 Mbps. As you would guess, fixed networks using optical fiber or cable modems have broad coverage at 6 Mbps or higher speeds. Some 86 percent of locations can buy cable high speed access at 6 Mbps or faster.

About 64 percent of digital subscriber line locations are able to get 6 Mbps service. About 78.6 percent of locations have access to mobile broadband of at least 6 Mbps.

Availability begins to diverge more at speeds of 25 Mbps. Only about 7.7 percent of U.S. homes have access to DSL at that rate. But 75.5 percent of homes can buy cable modem service operating at 25 Mbps.

About 4.7 percent of homes can buy fixed wireless service at 25 Mbps.