Thursday, February 11, 2010

The iPad, why you will want one in 12 to 18 months.

Please follow the bread crumbs to my employer's blog site....here

Thursday, December 24, 2009

Why Google entering the smart phone market matters to you

A blog about the significance of Google's announcement to enter the smart phone market published here with Ricoh Innovations. Please enjoy.

Saturday, November 14, 2009

"If I had asked people what they wanted, they would have said faster horses." Henry Ford

I admit it, I first heard this quote the other day and I loved it. Why? Because it gives me the perfect opportunity to talk about the trade off of innovation. I will explain what I mean by that in a minute.

The danger of following Henry's advice

What Henry is telling us is that if you base your innovation methodology only on inputs you get from your potential customers, you may never leap. Sometimes you have to just go with your vision hoping to have done enough homework to convince yourself and your stake holders that you are not insane. Indeed imagine what people around Henry though when he announced he was going to build this weird, expensive and smelly new horseless carriage and that everybody would buy one. In reality Henry was not that much of a visionary in that the technology and the product already existed in another incarnation. Gottlieb Daimler already invented the petrol engine and the automobile, what Henry did was to realize that the time was ripe for a new positioning of the product. That was daring, visionary and indeed risky. In the quest to realize his dream Henry did end up innovating the industry by introducing the assembly line etc. But I digress. The point here is that there is a trade off between timing, risk and knowledge. Before diving into that, let's talk about the converse approach.

The danger of *not* following Henry's advice

Not doing anything that is not supported by evidence from your target audience has the advantage of reducing your risk considerably. Think for example a tire manufacturing company that introduces a new tire that is marginally more expensive but claims to save you $200 a year in gas. In this economy that tire manufacturer knows very well that this will give them a competitive advantage at low risk. It is a relatively safe bet. Now imagine another tire company that introduces a new type of tire that looks blue instead of black and that has no sidewall (incidentally such tire does exist, though it is not blue but brown, see Michelin here). The company claims that this new tire lasts 4 times longer than the old ones and that it never go flat (I am making this up). Despite the significant benefits of this product, this tire company will be taking a much higher risk introducing it since it has to convince its customer base to get over the fact that the new tire looks so very different and yet does what it promises. It is indeed a leap of faith where the only asset that the tire manufacturer can spend is its own credibility with its core customers and early adopters. This is what Amazon did with the Kindle. High risk, big reward. Note that Michelin is not as brave and this distruptive new tire has yet to see production. We will skip the discussion as to why that is but the author agrees with Michelin, the new tire is indeed innovative but not enough to take the risk.

The literature calls following Henry's advice disruptive innovations and not following it, evolutionary innovation. Obviously you can make or break your company with either so you need to be careful engaging with both. Further, the hidden danger of evolutionary innovation is the lack of challenge it presents to the R&D organization that eventually can become completely incapable of disruptive innovation.

Let's go back to the automotive industry. Clearly this industry has thrived on evolutionary innovation for more than a century, let's face it the gasoline engine is very old. But the party is over, the worldwide financial crisis and the renewed public opinion attention to gas mileage numbers is nearly killing many of the big players. Some (Toyota, Honda) saw the end of the gasoline engine in sight and started working on the next paradigm (hybrids, fuel cells). Others (GM, Ford) are playing catch up, they missed the warning signs and they just did some electric car trials as a marketing stunt, there was no company realignment behind it at all. Meanwhile the whole industry was so comfortable with evolutionary innovation that they left the door wide open for new players to come in with nearly no barrier of entry: enter Atom, Tesla and many other big and small ventures trying to be next Toyota or GM. The lesson to be learned here is that every product has a life cycle during which you do need evolutionary innovation but your organization should always encourage disruptive innovation or your will end up like Pontiac and other GM divisions now on the chopping block.

That is nice but how does that help my business

It should be clear by now that you need both types of innovations and that there is no single recipe to help you figure out how much of it do you need. Here are some commons sense guidelines that may help:
  1. know where your product line up is on the life cycle curve. Are you in the ramp up? Are you still able to charge a premium on it and enjoying the plateau at the top? Or are you starting the downward slope to commodity? You want to stop working on evolutionary innovation some time during the plateau and redirect your efforts to disruptive en masse then and there. Depending on the size of your company and your industry you may need anywhere from 2 to 5 years for your next big thing to hit the market so you better make sure you have that much time left in the life time of the current line up.
  2. know your talent pool. Do you have individuals in your organization with a track record for evolutionary innovation? how about disruptive innovation? Depending on (1) you want to take the necessary action to re-balance or retrain your team, if possible. And do so with plenty of notice, smart people have big egos and they resist change to their day to day life fiercely, no matter how creative they are at what they do. That used to include the author, I admit it.
  3. innovation should be always on. Innovation is not an event, it is a process that start the moment the founders start a company and ends when the company dies. Or some time before that and probably that is the reason why the company died in the first place! Morale, keep innovation going at all times.
  4. encourage employees to discuss innovation. Particularly listen to your support organization and your development/manufacturing organization. They talk to your users all the times and they know what the problems (aka opportunities) are. Most importantly, have these two organizations talk to each other and to your R&D organization...every day if you can! One caveat follows.
  5. do not listen to your sales organization! Sorry for anybody in sales but this is the single most harmful thing you can do to keep track of what your customers and potential customers want or need. The sales organization is trained to talk, not to listen. They may think they know the problems facing your customers but they do not. They are not there when your product is deployed and when its flaws or missing features emerge. Support is. Development and manufacturing is. They know becouse they have to deal with screaming users and customers. They may not understand the full picture of how your customers live the daily interaction with your product or service but they are your best and low cost tool to feed the innovation process. Further, your sales organization most often does not talk to the people using your product or service but to the people buying it: depending on your line of business these may be very different people. One example will help here: say you manufacture a new medical device for blood test. Your users are nurses. Your buyers are controllers and office managers and your stake holders and decision makers who authorize your juicy PO are doctors. Note how the decision makers and buyers in this example will never use the product and yet those are the only people that sales will talk to. QED, do not listen to sales. Of course I do not mean it literally or ever but you get my point, if your VP of sales tells you it is time to make pink elephants, tell him/her "good idea! we will look into it" and keep going. But if your support organization (or the data collected by it) tells you that more and more of your customers are painting the elephants they bought from you, it is time to call them up to find out why and what color would they like.

Friday, November 13, 2009

Apple and the Giant that came from the North

A few days ago analysts published a report on worldwide market share for smart phones and Apple is firmly in third position.

Here is a link for your convenience.

What is relevant here is a couple of things. First the trend, the "Giant" (AKA Nokia) is losing market share to RIM (the silver medalist in the race) and to Apple. While it is somewhat surprising that RIM is still growing at first glance, this can be explained by market differences and specifically by different business models. In Europe for example the modus operandi of mobile phones is that the end user purchases the device out right. That places the iPhone in the EU599 shelf, considerably higher than most RIM devices. If you are reading this from the US, do not bother to convert that to dollars, you may faint. This obviously limits the market penetration of this device and places it at the same level as the most exclusive and ugly mobile phones from Erickson and Nokia I have ever seen. Hey, I am being honest, they look like bricks and they cost an arm and a leg because the are feature jammed and they can rotate your tires. But I digress. The other point here is the trend. Over time Apple keeps grabbing market share and the critical but often overlooked detail is that it is doing so with....one device. Have you jumped on your chair yet? No? Well, let's work on that shall we.

My point?


Considering the fact that the iPhone is heavily subsidized by AT&T in the US, a 17% worldwide market share is something that Nokia and RIM should fear and understand so that they can fight it. Yes, I do want competition for the iPhone, that benefits everybody.

De facto Apple has a 17% worldwide market share with *one* device, as above mentioned. Nokia has 39% with a ton a different models and RIM is at 20% with a somewhat more organized mess of distinct devices but still a far cry from *one*. Getting the picture yet?

Two things are happening

Number one, Apple's rivals are plagued by product line up fragmentation and the burden of multiple platforms. Big problem, why? Because it costs more than a pretty penny to maintain and develop multiple hardware and software product lines. More importantly, it takes some serious guts for the executives and senior management at Nokia and RIM to push a top down company wide mentality change needed to move to one platform so they can compete. Not to mention you need to reorg like there is no tomorrow and possibly lay off people including some of the managers whose help you need to push the policy forward.

Good luck with that.

Number two, the mobile industry is all about software now. Sure one can foresee a future where consumers can purchase a more rugged iPhone for the outdoorsy audience Vs. a super-thin one for the trendy bunch. But the hardware inside will be the same and so will the software. What has happened is a paradigm shift in customization and personalization. Consumers can now project their identity onto their devices in a richer way than ever before. We went from expressing one's individuality via the physical features of the device (who can forget the Motorola Razor Vs. LG Chocolate battle?) to the customization of both exterior and interior. this is thanks to more iPhone cases than you can count and...software. An iPhone is an iPhone but if you grab mine and my wife's, for example, you will be looking at two completely different user experiences. That is the future. In fact I would expect to see many more ways to customize via software like desktop themes and so on and more ways to personalize the exterior via choices of colors, even more cases and, why not, custom paint schemes.

Wait a minute said the Android's crowd

I know, I am overlooking the Android platform. But for a good reason. I really wish Android well but until someone finally realizes that the only product design that will work is a de facto clone of the iPhone or better, we are not going anywhere fast. Read more here, if you like. Moreover chances are that Android will become a success story in an adjacent market: web enable devices other than mobile phones! Have you noticed how many such devices are running Android? We will cover that another time...

What does that means for the players in the industry?

I would start selling Nokia and RIM stocks sooner rather than later. Sure they have a long way to fall but I have yet to see signs that they are serious about reshaping their business to align with the new paradigm of mobile phones consumption. And if you think a corporate mentality shift is not that big a deal, you probably never lived through one with your company: if you do not execute it right or at all....this is how great companies die.

The good news is that it can be done. Ask IBM or indeed Apple, they know a few things about that ;-)

Friday, November 6, 2009

Droid, the new smart phone straight from the ...90s?

A slide out keyboard.

Really? Motorola guys, are you kidding me? Do you ever get out of your office and look around? Have you not seen what is happening in the consumer electronics marketplace? Even laptops and PC use touch screens, let alone a ton of mobile devices. And what do you do? You release yet another hyped iPhone killer with a UX from the 90s. Wow, talk about living in denial.

The iPhone needs competition!
This one goes out to all mobile device manufacturers: please get your acts together, accept what the iPhone did to the industry and...move on! You want to build an iPhone killer? Here is what you need to focus on:
  1. get over memory concerns, solid state memory is getting cheaper and cheaper, put plenty of it on it and get over it, you will not make your money playing nickle and dime on memory. Why? Because that ship has sailed, today you need to at least match the iPhone and I am ready to bet 90% of smart phone users could not care less to have an SD card in their phone. Have a look at the iPhone demographics, who do you think the audience is? The cashier at the local grocery store who saves his paychecks for months to buy the flat screen TV at Walmart, that's who. That is how you make the big numbers.
  2. get over offering a ton of features that make your hardware not backward or forward compatible with Android releases. Fragmentation of your product offering is your death sentence. An iPhone Edge today can run the same OS as an iPhone 3Gs. Beat that. Can't? Good, get a clue and get busy. That means you Erickson!
  3. superior UX, the device should have the same user guide as an iPhone: none. It is so intuitive to use you do not need one. Don't know how? Hire Interaction Designers and get with it.
  4. Establish a supported development community and the keyword here is *supported*. You cannot have one store for provider A and one for provider B and ...no, no, no! Developers will not come. They have to spend their time (=money) to embrace your platform, you have to make it as painless as possible!
  5. A way for app developers to digitally sign their software so piracy is not possible! Sharing is all fine and dandy but at the end of the day money has to exchange hands, developers need to pay rent too. Apple got it and that is why there are anywhere from million dollar software houses to high school students making money selling apps. That is how is done, pay attention. It is really not that hard.
It will cost millions of dollars to do the above but the more time goes by, the more it will cost to close the gap with Apple. Stop spending money on hype (the Droid campaign surely cost more than a pretty penny) and get busy building a valuable alternative or get out of the business.

[Update] rumor has it Google is working on a branded Android based phone that will not have a physical keyboard and that will not have software compatibility issues or product fragmentation. Now that *is* the way to go! Let's hope rumors are true in this case, please see this link.

Tuesday, November 3, 2009

Hard Disks are dead, so are Blue Rays and DVD

We all know it was just a matter of time and it is finally happening. Solid state storage is a consolidated technology and their pricing will start the downward slope towards commodity very soon. The result? HD will be displaced and they will become a thing of the past. The interesting side effect of that is that, wait for it...., DVD and Blue Ray will become collateral damage in the process, disappearing from the market in the next 36 months.

At the beginning it was Air
Let's go in order, the first clear sign of things to come was Apple's Air laptop. A clear statement that you no longer needed a CD/DVD drive. A closer look would have also told you that if your pocket was deep enough, you did not need an HD either. In fact the only "Air" worthy of that name because it was indeed lightweight was the most expensive version using solid state storage instead of HD. Whereas this was done to save weight it was still a clear sign of things to come.

Here come the net-books
someone finally listened to consumers and they realized that the time was ripe for a portable computer that does not weight more than the kitchen sink. Enter the finally small and lightweight net-books. Yet another proof that web enabled devices (loosely defined as a gizmo that is always online) did not need physical storage media and that solid state storage was clearly the way to go. Case and point: the latest laptops now have memory stick ports. So long DVD, has been nice knowing you.

A moment of silence for Blue Rays
The possibly unintended consequence of the raise of solid state storage is the de facto death sentence handed over to Blue Rays and DVD. The convergence of devices always online and solid state storage makes these media obsolete as well. As technologist I feel sorry for the Blue Rays, they were clearly destined to a short shelf life but I was hoping (and so was Sony) for a fast and furious tale instead of a stagnant and boring one due to the battle with Toshiba and the HD DVD gang. Who won? Nobody. Not even us the consumers as we had to wait for things to settle before enjoying the benefit of high definition media and now it is basically over. Locally I give Sony credit for not crying on spilled milk and moving on already: this week they announced they will partner with NetFlix to deliver movies via IP on the PS3. Yep, that is the way to go boys. Let's all hold hands and let physical media rest in peace.

What is next?
Obviously we can look forward to more lightweight computing devices using solid state storage solutions. We can also expect that multimedia content will be sold on memory sticks for the conceivable future until everybody and their grandma will have internet access 24x7. The advantages of this technology are many but the one that marketing and sales will embrace is that it is cheaper to ship and package since it is considerably smaller and lighter. Just last week I read a press release about one of the Hollywood studios working on this already. It is coming, do not say I did not warn you and stop buying DVD already ;-) Oh and you may want to make sure you do not own stocks of companies who did not get the picture...

Tuesday, October 20, 2009

Alex reader, how good intention translate into a bad idea

[update: B&N announced their e-reader. It is a dual screen like Alex but they did improve the UX a little. Most if not all of what follows still stands.]

Well I am sorry for the engineers and designer who worked on Alex but that is the way I fell. In case you have not seen photos of Alex, an epaper reader to compete with the Kindle, it has two screens one of top of the other. The top one is pretty much the same size and characteristics of the Kindle and the bottom one is a LCD of sort. Frankly the technical details are irrelevant. The problem is the UX (user experience).

Why is Alex's design wrong:
  • people in the western civilization read horizontally. Stacking information vertically goes against the grain of how people consume information. If you need to teach people how to consume information via your device... you may have a problem, a big one in fact.
  • our vision is wired to continually move the eyes in a span motion. Overall the brain tends to focus on one area (i.e.: the paragraph you are reading) while still capturing cues from what goes around you. Introduce two potential main attention grabbers and you just gave yourself a headache. This is, sadly, the main principle behind web based advertisement, how many of you enjoy being distracted by an animated ad while you are reading the news? Well that is exactly what Alex can do. Oops. So the brain will try to focus on one of the panels actively trying to ignore the other. Not exactly the relaxing experience of reading a book.
  • the UX model e-readers replace is a book. If you think about it carefully, that is hard enough, there is no need to get creative adding more features. A book is easy to access, share, browse and it is fault tolerant. Drop it on a concrete floor, pick it up and keep reading. Try any of the above with an electronic device and you will see why I said it is hard to replace a book. Amazon was smart about that and they realized that they should tackle the problem one feature at the time. That is why Kindle is successful, they replicated one of the aspects of a book (reading from paper) while still lacking others. But users forgave them and bought the device en masse. For lacking others I am referring to, for example, browsing a book or browsing your own library is much more complex in Kindle than with physical books but people deal with it because a Kindle weight less than carrying around your library. So what's wrong with Alex? Books have one page per sheet, not two. The interaction with a page does not changes from top to bottom, a page is a page. Ditto for Kindle. Alex is introducing split features, the top and the bottom screen are capable of doing different things and that has nothing to do with the experience of reading a book, browsing a magazine or consulting a manual. All experiences that I am sure Alex will try to replace. See my point at the very beginning on having to teach consumers how to use your device...
  • manufacturing costs: two screens means more inventory, more electronics, more assembly costs etc. You better have a really good reason to introduce a competing product that costs more to manufacture.
  • simplicity: consider the following, Kindle has one screen, a keyboard and a bunch of buttons. Alex has two screens, a touchscreen keyboard (or so I hope) and a bunch of buttons. That is, now you need to learn how to use this thing, for example, how to navigate between screens. Sound unnecessarily complicated, because it is.
Wait a minute, what if Alex is a disruptive innovation?
Well, I am sure it is possible that I am missing something here but my point is that there is a better way to build a device that is aimed to replace printed media and that can surpasses the Kindle. That is, a tablet pc with touchscreen controls a la iPhone. One screen, one interaction model very close to paper, no new mental model required. If anything I think B&N will help Apple take over this market if they ever decide to introduce the rumored iTable or iPad or whatever they will decide to call it. In fact Amazon and B&N may very well be solving the pricing problem for them (see previous post here). More in a moment.

So why hasn't anyone done it right?
hold on a minute, someone has done it partially right, Kindle is a good starting point. Why is it not better? Because the technology is not quite there yet, we are close but not close enough. The main problems are:
  • refresh rate vs. power consumption of the screen, namely paper like display Vs. your favorite flavor of LCD
  • color vs. BW (see above)
  • weight vs. battery life
  • and last but not least, positioning and revenue model
The last one is a show stopper for many players. Before we go there, notice that Alex is a compromise on all of the above, instead of solving the problem, they doubled the solution. Good idea? You decide.

Back to the business model. Think Sony, they were the first to introduce a capable e-reader and yet they are now trailing behind Amazon. The latter outsold them because they own the content and they waited for the convergence of technologies needed to build a better user experience (paper like display, affordable 3G and small lightweight batteries). More importantly, Amazon created an ecosystem in which Kindle makes sense. They learned from iTunes and applied that lesson to books. But if you are Acme inc. and you manufacture devices and you have no access to thousands of e-books, you do not have a business model hence you do not have a product.

Now B&N does have access to the content but their attempt to one up the Kindle look ill advised because of the factors I highlighted above. Not to mention that eventually e-readers will have to take it one step further and replace notepads. And that is a whole other ballgame with a whole other set of technical and financial challenges that Alex just made harder to tackle.