At the intersection of technology, finance and the Pacific Rim.

Sunday, November 29, 2009

Budhism and Business

Jonney Shih's Company, Asustek, created the Netbook and is now a USD 21BN revenue company. He applies Buddhism to business and is quoted in Fortune as follows:

"In Buddhism you learn to accept everything, to let it flow through you," Shih says. "Then you can slow down and think clearly."

"Most people think Buddhism is passive or about escape," he says. "It's not. It's about confronting what's in front of you with a clear and flexible mind. That might be a hot day or your competition, but you accept it and do everything the best at that moment."

It is as Shakespeare says: "There is neither good or bad and it is our thinking that makes it so."

For those who are not familiar with Taiwanese companies, it is good reading.

Thursday, November 26, 2009

Apple vs. Microsoft

The below (source: citing NPD) is a stunning number:
PC Revenue Share 09-10

It is due to the fact that the average sales price of an Apple is in the range of USD 1.4K whereas for Windows it is closer to USD500. Also Windows 7 release slowed PC sales significantly in the month. Nevertheless, Redmond Washington must be in a state of apoplexy.

How to Launch

Tech Crunch discusses the latest marketing foray of Google and their mobile offensive:

oogle, Verizon, Reuters, and R/GA areteaming up to take over the largest displays on Times Square to allow for a giant Google Search by voice experiment/Droid advertisement.

What does this mean? On Black Friday, anyone who calls 888-376-4336 and does a Google Search by voice, will see their results displayed on either the Reuters sign or the NASDAQ sign in Times Square. So, if you say something like “new Jonas Brothers CD,” the display will come up with a giant Google Map complete with signs showing you where you can find that. Also included is the embarrassment that everyone in Times Square has just seen what ridiculous thing you are searching for.

Friday, November 20, 2009

Sony vs. iTunes---Me Too!

There is in the high tech world something called a "Me Too" strategy. This means a mimicking of other companies' thinking--and there is little to no differentiation or cost advantage. Imitation is the best form of flattery--and Me Too companies are often followed by Me Three and Me Four and Me Five companies as well. Look at the App Store of Apple and all of its imitators--and yet very few people end up changing their preference--because the river current is set and there is no reason for the river to change its direction. This is often called the "First Mover" advantage and it is why I have spent some time talking about innovation.

So Business Week wrote about Sony's new i-Tunes like store. Some highlights (with questions by me):

How is Sony doing?

The global recession has pummeled Sony's businesses and left its earnings in a shambles. With consumers cutting back on electronics, Sony says it's heading for its second straight loss. This fiscal year through March 2010, Sony predicts an operating loss of $674 million, from last year's $2.6 billion loss. Sales are expected to slide 6%.

Sony's core electronics business has been its biggest problem. The two worst-performing products: TVs and video games. Reversing the losses of those divisions is crucial because they account for more than a quarter of Sony's $82 billion in annual revenues. The games division is expected to post its fourth straight operating loss. On Nov. 19, Sony said both the gaming and TV businesses aren't likely to see profits until next fiscal year. Stringer also pushed back the company's overall goal for a 5% profit margin until the fiscal year ending March 2013.

To help its chance of a comeback, Sony is trying to cut $3.4 billion in costs in the year through March 2010 by centralizing parts procurement, reducing inventory, and closing factories. By May 2010, it expects to have 47 plants globally, from 57 last February. "We know we have to restore profit in our game and TV business," Stringer told a news conference at Sony's headquarters. "We must deliver sustainable financial results."

How are they Trying to Turn the ship in terms of product strategy?

Four years ago, Stringer hired Tim Schaaff, a top lieutenant of Apple CEO Steve Jobs, to lead Sony's software development efforts. After encountering strong resistance from hardware engineers, Stringer announced a management shakeup last February, appointing a younger generation of managers who share his belief in the power of software. The move has paid off. "I couldn't be happier with the pace of change," Stringer said.

Lesson: Adjust to the Industry or Go Home

How will they differentiate?

Sony will try to differentiate its service from iTunes. One example: Users will be able to upload videos shot on camcorders, save photos taken with digital cameras, and post other digital content to their personal online accounts. That's how Google's suite of Net-based services (such as YouTube video-sharing and Picasso photo site) works. At some point down the road, Sony would consider letting independent software developers create applications for the service, much the way Apple does for its iPhone. "The new online service will be one key factor as we introduce new types of mobile products," Hirai said.

NOT ENOUGH--could be lights out at Sony as we know it in 5 years. Light are definitely dimming.

Google Operating System

Google showed off its operating system, which is scheduled for release in the second half of next year. The NY Times described it as follow

Not surprisingly, the Chrome desktop looked similar to the Chrome browser. It included a handful of smaller tabs that Google calls application tabs, which are meant to run the programs people use most often, like e-mail or calendar software.

The netbook using the operating system booted in seven seconds, and Google said it was working to make the start-up time even faster. Google declined to say which hardware makers were planning to build machines that used the operating system, but said it would work closely with manufacturers. It said it had been pushing them to make netbooks that were slightly larger than today’s models and included full-size keyboards.

Thursday, November 19, 2009

Windows 7

Cringeley was asking the other day why Windows 7 costs so much. In fact, Apples' New OS costs $30 vs. Microsoft's $120 for Windows 7. His answer:

The better question to ask is why Microsoft decided to set the price point where they did? And the answer to that one is quite simple: Microsoft doesn’t actually want you to upgrade to Windows 7 at all.

Microsoft wants you to buy a new Windows 7 PC instead.

Setting the price at $119.95 is a brilliant move on Microsoft’s part. The company doesn’t want users to upgrade so by setting the price high Microsoft is essentially imposing a Windows 7 upgrade tax on users. Buy a new Windows 7 PC from Staples and the software price drops to $49.95, the same as Snow Leopard.

Microsoft likes to make money, hence the Windows 7 tax, but their main reason for setting the price so high is to get us all to buy new computers. That brings Microsoft less revenue per unit but more revenue overall as businesses, for example, decide to upgrade a whole office with new PC’s rather than pay $119.95 per desk just for new software. New PCs come with dramatically lower support costs for Microsoft than do retail upgrades. The pricing ploy makes Microsoft very popular, too with its Original Equipment Manufacturers (OEMs) like HP, Dell, and hundreds of others.

Here’s another piece of evidence aiming in the same direction: have you actually done a Windows 7 upgrade? Mine took seven hours! It shouldn’t have to take that long unless part of the goal was simply to discourage upgrading. Snow Leopard took me 20 minutes to upgrade, but then Apple has no OEMs to please (this is key) and makes lots of money on upgrades even at $49.95.

When Windows 95 was introduced (I was there, shooting Triumph of the Nerds), part of the Bill Gates and Jay Leno performance that day was upgrading a 486/66 machine from Windows 3.1 to Win95. It took about half an hour. With more modern processors, memory, disk drives, and a new OS touted as being lean and mean, why should Windows 7 take significantly longer than that to upgrade?

Wednesday, November 18, 2009

Google and the Android Phone

This from Tech Crunch a fairly reliable tech blog in Silicon Valley:

"there are a few things we have absolutely confirmed: Google is building their own branded phone that they’ll sell directly and through retailers. They were long planning to have the phone be available by the holidays, but it has now slipped to early 2010. The phone will be produced by a major phone manufacturer but will only have Google branding (Microsoft did the same thing with their first Zunes, which were built by Toshiba)."

And where will it be built?

"We have some fairly good information that suggests Google is working with a Korean phone manufacturer on the Google phone – LG or Samsung. Samsung has multiple parts in the iPhone and could be pressured by Apple not to work with Google, which says LG is the more likely partner for Google. .... But either way, the best information we have right now points directly at Korea as the birthplace of the Google Phone."

So where is Microsoft in the smart phone wars. Their chief software architect, Ray Ozzie (whose predecessor was Bill Gates) says the following in Venture Beat:

“All the apps that count will be ported to every one of them, It’s a completely different situation from the PC market, where software’s built to run on a Windows or a Mac, Mobile apps require very little development, so it’s much easier to bring them onto every platform"

And Robert Scoble, an ex-Microsoft executive (and fairly well-known) flatly disagreed:

If Ray thinks that the best apps will come to Windows Mobile and that the best developers will spend time developing for that platform well, then, Ray is drinking better Merlot than I am.

I’ve seen how even kids compare their phones on the playground. They compare apps and games. The functionality of the phone doesn’t really matter anymore. It’s what’s built on top that gets the kids excited.

Same in business. Last week a VP at Citrix came up to me showing off his iPhone app (it let him get into a Windows box somewhere else in the world and use Microsoft Office).

Even today at the PDC, what did Vivek Kundra (America’s CTO) show his app off on? Yeah, an iPhone. And this was at Microsoft’s own conference!

Ray, the truth is I was there in 2006 talking with the Windows Mobile team when they told me they were going to only build devices for the enterprise. Back then they thought the growth would come from going after RIM. Even Wired Magazine can now see the fumble the team made. They were wrong and now you are wrong. Apps are what will decide winners in this play. For now that’s Android and iPhone. Big time.

But if I were losing developers the way Microsoft is I’d probably say they don’t matter either. It just shows that Microsoft has no secret strategy up its sleeves and has no way anymore to get developers excited about its mobile platforms. Google is now in the best position and Ray knows it.

Thursday, November 12, 2009

Smart Phones of the Near Future

New York Times had an article on the Smart Phone of two years from now. To read it in full you should go here. One interesting prediction:

Smartphone apps could, for instance, recognize when a doctor is in the building, and alert him if another person nearby had dialed 911. Or, your phone might capture images from a video camera around the corner from a subway station.

This idea, labeled “the third cloud” by David P. Reed of MIT, underscores the most profound change for smartphones currently coming to the market — namely, that they need not communicate with the carrier at all.

“Carriers used to control everything, and now the tables have utterly turned,” Dr. Lippman said. “That’s what’ll make the future so interesting.”

Tuesday, November 10, 2009

Google's Latest Acquisition

Earlier, I detailed the acquisition path of Google, which looked like a subway map. They announced yesterday a new acquisition with the details here.

On commenting on the strategy behind the acquisition, Read Write notes:

AdMob's own numbers claimed that mobile traffic from the iPhone and iPod touch grew 19X over the last year. AdMob is making a strong play on the iPhone. TechCrunchreported this Spring that the company claims to be the biggest mobile app ad network on the iPhone and is working on a traffic exchange system for app promotion similar to what's been done on Facebook. Now move those efforts over into the Google column and Google is making money off of the free apps on Apple's platform. That's probably not something Apple feels great about."

Sunday, November 08, 2009

Apple in China

After the last two sessions, you may have come away thinking that the Company (or that I think the Company) walks on water and can do no wrong--quite to the contrary. They launched the -i-Phone in China and it has been a bust so far. For details go here.

Tuesday, November 03, 2009

More on Apple for Saturday Discussion

We have alluded to Apple TV and their potential to disrupt. For further insight to where Apple is going see this article. Who might be the victim?

And they are hiking their capital expenditures to record levels, as this article states. Where are they going?