The Different Tales of Two Nations

This post will most likely stir some controversy among my friends. I am sure that some of them would even accuse me of betraying my own country of birth — Bulgaria.

I typically do not comment on politics on my blog, but the events that have been going on in Bulgaria in the past month and a February 26th New York Times article on a seemingly unrelated topic prompted me to express my opinion. I am going to say some harsh words about Bulgaria, but I believe someone finally needs to call out the inconvenient and cold truth, and since I am a Bulgarian, I might just as well be that person.

In this post, I will compare two nations that are very close to my heart: Bulgaria and Mexico. Bulgaria is the country where I was born and grew up to adulthood. Mexico is the country from where I have a lot of good friends, including my ex-girlfriend and her parents and family whom I respect a lot. Unfortunately, this story is contrasting these two countries and, as in any contrast, one of them has to win, and the other will lose. In my post, Mexico is the winner, or the “comeback kid” as Pulitzer laureate Thomas Friedman calls it in his New York Times commentary on the latest developments in that country. And Bulgaria is, alas, the loser. If you want to find out why I think so, keep reading.

In many ways Bulgaria and Mexico are similar. Two countries that have gone through a lot of ups and downs (mostly downs) in the past few decades. Two countries that hinge between the First World and the Third World. They are not as poor as the typical Third World countries. But they are not well off and organized the same way the First World is. Both of them are on the outskirts of the two largest economic areas in the world. Bulgaria is the poorest country in the European Union. Mexico is the poorer kid on the block in NAFTA. Even the flags of the two countries share the same three colors — white, green, red — “les tres colores” in Mexico, and the “трикольор” (which can be transliterated from Cyrillic as “trikolyor”) in Bulgaria.

However, the two countries are also very different. On the surface, Bulgaria seems to be the better-off country — after the 1996 short period of hyperinflation and financial crisis, the Bulgarian economy has been on the rise; Bulgaria joined NATO, then became a fully fledged member of the European Union. Bulgaria is peaceful. There is organized crime and corruption, but nothing on the scale of the violence taking place in parts of Mexico. As my ex-girlfriend commented during her visit to Bulgaria, “It is amazing that we can walk everywhere or we can drive on a deserted road in the mountain without being worried.” However, this is just about everything in which Bulgaria excels over Mexico.

I agree with Mr. Friedman that Mexico is the real “comeback kid.” And instead of resorting to various economic statistics, results from demographic studies, or world rankings, I am going to point out a much simpler reason why Mexico is winning over Bulgaria: the population’s attitude and approach toward life and the world. In my opinion, there are three key behavioral differences that put a wedge between the two countries and, unfortunately, outline their future trajectories:

1. Mexicans live in the present. Bulgarians live in the past.
If you go to Mexico, you’ll see a lot of people who are very proud of their heritage and proudly boast their national flags. However, most of them are proud of who they are now. When you ask them about accomplishments, they talk about current things — such as Mexico’s men’s soccer team winning the gold at the 2012 Olympics in London, or Ximena Navarrete’s Miss Universe title in 2010, or the nomination of the film Biutiful for the 2010 Best Foreign Language Film Oscar, or Chicharito scoring yet another goal for Manchester United.

If you go to Bulgaria, however, you’ll see a lot of people (many of whom are in the late teens or early 20s) wearing patriotic t-shirts displaying the Bulgarian flag, or the Cyrillic alphabet (which — they would proudly explain to you — was invented by two brothers of Bulgarian descent for the Bulgarian people, and then gifted through our books to other Slavic nations, including Russia). If you stop any of these patriots and ask them if they were proud of Bulgaria and why, they would immediately start talking about the “Golden Age” of the country. This “Golden Age” was hundreds of years ago, but that does not matter to them. What matters to them is that at one point we were the fiercest and scariest rival to the great Byzantine Empire. What matters is that we had universities and books before many of the current wealthy countries of the world even existed. However, you would most likely not hear a single thing about the present.

2. Mexicans enjoy life, even if it is a simple life. Bulgarians complain about life, even when it is simple.
When I went to visit my ex-girlfriend’s family in Mexico, I met a lot of people and was invited to their homes. I even attended a wedding. During the full two weeks I was there, I saw a lot of people who were genuinely smiling. Many of them seemed and sounded happy. Yes, they had their problems. Yes, they were probably worried about kidnappings and killings that were taking place in some states of the country. However, they managed to put these things behind them and look out for the brighter future. Now, I am not Mexican, and I may just as well be proven wrong about this. However, I believe life has taught me how to read people’s emotions relatively well. And the general vibe that I was getting from all the Mexicans I met was positive. People were not complaining. They were not grumpy.

On the contrary, every time before I go back to Bulgaria, I mentally prepare myself for the negativeness and pessimism that I will have to endure for the days I visit. I prepare to endure the constant complaining about the unfair government that does not provide for its own people, about the corrupt politicians who have betrayed the nation, about the evil corporations that exploit all ordinary citizens, about the global conspiracy that has been going for ages against Bulgaria. Not surprisingly, many of my foreign friends who had visited Bulgaria were bewildered why Bulgarians seemed too grumpy to them. Even The Economist had an article that compared income and happiness levels across countries in the world. In that article the authors called out Bulgaria as the special case — Bulgarians were not as happy as their income levels would suggest. “The saddest place in the world, relative to its income per person,” was what The Economist called Bulgaria. And very rightfully so.

3. Mexicans look to the rest of the world for inspiration. Bulgarians look to the rest of the world with mistrust and condescension.
In his New York Times piece, Mr. Friedman provided context and useful examples to many observations that I had previously made on my own. In a way, his article served as a true catalyst to my understanding why Mexico’s tale is so different from that of Bulgaria. Despite the relative poverty, corruption and violence, many young Mexicans had managed to stay connected to the rest of the world. They read about the biggest issues that interest their peers in countries as close as the U.S. and as far as Japan. They participate actively in events, physical and virtual, that matter on a global scale. Therefore, not surprisingly at all, they also exhibit commendable entrepreneurship and social responsibility that is on par with what one would expect from some of the wealthiest and most progressive societies.

Mr. Friedman points to Monterrey, which he calls Mexico’s Silicon Valley. He goes on to explain how Monterrey has cultivated a critical mass of young, confident innovators trying to solve Mexico’s problems, by leveraging technology and globalization. He introduces to us Raúl Maldonado, founder of Enova, which has “created an after-school program of blended learning — teacher plus Internet — to teach math and reading to poor kids and computer literacy to adults.” He then showcases the work of Patricio Zambrano from Alivio Capital who has “created a network of dental, optical and hearing aid clinics to provide low-cost alternatives for all three, plus loans for hospital care for people without insurance.” He praises Andres Muñoz Jr. from Energryn, who “demonstrated his solar hot-water heater that also purified water and could cook meat.” The list goes on and on. But the recurring themes are not only entrepreneurship, creativity, innovation, technological savvy, but also social responsibility. This new breed of young Mexican entrepreneurs creates business opportunities that not only enrich themselves but also transform the lives of the poor — i.e., the people at the proverbial “Bottom of the Pyramid.”

This is in stark contrast to what I see in Bulgaria where entrepreneurship is often frowned upon and equated with profiteering, embezzlement, scamming. Perhaps Bulgarians have a good reason to mistrust most entrepreneurs — the two decades since the fall of the “Iron Curtain” in 1989 have produced numerous examples of phony businessmen with oligarchic tendencies. There are a few examples of honest and decent entrepreneurs in Bulgaria, of course. Some of them have created software companies, web design studios, call centers. However, as progressive as these entrepreneurs look in the Bulgarian reality, their business models are well tested and nothing new. What Bulgaria truly lacks is the kind of “Just Do It” entrepreneurial bravado, mixed with a strong understanding of the current trends that define the world, and a true passion for social responsibility.

Where are the Enova-style blended learning after-school programs to teach math and reading to the kids? What is the Bulgarian equivalent of the low-cost, high-quality care centers that Patricio Zambrano had created in Mexico? Where are the tech innovators to rival Andres Muñoz Jr. and his solar, multipurpose hot-water heater? I have the sad feeling that my questions above will remain unanswered — because Bulgaria is currently lacking this breed of young, energetic and innovative social entrepreneurs. Entrepreneurs who instead of complaining about their living conditions, have grabbed the opportunity to create something new and meaningful for themselves, their neighbors and the society as a whole.

My Recommendation to My Fellow Bulgarians:
This leads me to my final conclusion. Many of you may be asking now: “What are you trying to tell us with your article?” The answer is simple — I am trying to send a wake-up call to my fellow Bulgarians to take a reality check and to start thinking what they can do to make their own existence more enjoyable and more meaningful; what they can do to help themselves, but also their own country.

In the past two weeks, many Bulgarians have taken to the streets (and social media) in protest — however, they have failed to express coherently what they are protesting against, which is why the rest of the world has remained largely unmoved and disinterested. Some of their protests are well justified; others reek of the worst form of an extreme sense of entitlement, to say the least. However, these protests will not help Bulgarians elevate themselves to a higher lifestyle; they are not going to help their country.

If Bulgarians see things that are currently done wrong, they should harness all the technology they have at their fingertips and their innate talents to come up with the best practices and adapt these to the Bulgarian reality. Bulgarians should stop asking their government to dole out money and social services; instead, they should look inwardly and try to find the creativity, innovation, and motivation required to start building new things — things that matter and add value.

As a starting point, Bulgarians can watch John F. Kennedy’s Inaugural Speech from 1961 where he famously said, “Ask not what your country can do for you. Ask what you can do for your country.” This quote should be their guiding motto if they want to get out of the mess in which they find themselves at the present moment.

Bulgaria has existed for thirteen centuries and I hope that this long history has taught the people of that country to adapt and to survive. I also hope that as they adapt, a new generation of young socially responsible entrepreneurs will finally emerge to lead the country. I hope Bulgarians learn from Mexicans and course-correct the path that their nation is taking. Perhaps in a few years, the New York Times will be writing about a new “comeback kid.” Perhaps that “comeback kid” will be Bulgaria… Perhaps…

What are your thoughts? Please let me know in the Comments section.

2 Albums: By Okamoto’s & The Bawdies

This month I relived two of my most favorite moments from the not-so-distant past. And those experiences made me stop and rethink our present-day obsession with digital stuff.

A week ago, while I was on a business trip to Tokyo, I visited the Tsutaya record store in Shibuya and bought CDs with newly released albums by two promising Japanese rock bands.  Then, today — after I’d finally shaken off the jet-lag and had some time to go through my purchases from Japan — I relived a second momentary hit of nostalgia as I slowly unwrapped the CDs and leafed through the pages with lyrics and photos in the artful booklets. Oh, what a bliss! And also, what a revelation about how quickly we’ve forgotten about habits that until just a few years ago seemed so normal to us.

Before you dismiss me as overly sentimental and old-fashioned, please take a pause for a few seconds and picture the two scenes I describe below. I’m sure that visualizing these experiences in your head would bring a nostalgic tear or two to your eyes — provided, of course, that you were born before the 1990s (sorry, dear millennials, I think this post may not resonate with you the same way it will with us Generation Xers). So here are the two scenes:

1. Visit to the Good, Old, Long Forgotten Record Store

When was the last time you actually visited a record store? You know, one of these places where they used to have long racks filled with CDs, ordered alphabetically, and the guy or gal behind the counter had numerous piercings and tattoos on their bodies, and were blasting some cool, catchy tunes on the 200-watt speakers. I bet many of you would be hard pressed to remember the actual time you last did that. Actually, many of you would probably have a hard time to think of such a store that is still in business.

Well, as much as I consider myself a high-tech aficionado, I have to admit that I had missed the occasional visits to the Tower Records store on 20th and Penn Avenue in downtown DC, just below my old office. Amazon’s MP3 store, iTunes and Google Play are all great digital marketplaces, but being virtual, they always feel a bit too sterile and removed to me. So, being in Japan — the land of constant paradox — for a couple of weeks, I was happy to find out that my hotel in Shibuya was surrounded by several mega stores dedicated to selling all kinds of CDs and DVDs.

Just for the record, I call Japan the land of constant paradox, because people there take for granted some electronic gadgets that the rest of the world may consider exotic, but at the same time may adhere to habits that may look a bit old-fashioned to the casual stranger. Take as an example the fact that you can be served a draft beer with the perfect foamy head on top, meticulously poured for you by a robot, and at the same time people still visit real, physical, multi-floor record stores, where they discover new music at the listening stations and then line up at the cashier’s to pay for their newly acquired CDs, while chatting with their friends on their smart phones.

But back to my story. My curiosity finally took the upper hand during my second week in Shibuya, and I ventured into the huge Tsutaya store right across the train station. I went to the New Releases section, and picked up a few CDs. I wasn’t sure what exactly I was looking for. But, by chance, I happened to pick up the new album by Okamoto’s (not to be confused with the eponymous leading Japanese brand of condoms). I put on the headphones hanging from the near-by listening station and quickly skimmed through the tracks on the CD. The band, originally from Shinjuku which is just a few train stops from Shibuya on the Yamanote line, immediately grabbed me with its rocky beats that somehow reminded me of the Beatles or Rolling Stones, but wrapped in Japanese lyrics. Excited, I picked up the CD next to Okamoto’s and it turned out to be the 1-2-3 album by another young Japanese rock band, called The Bawdies. Before quickly going through all the tracks on that album, I had already made up my mind — I was going to buy those CDs. With utmost exhilaration in my mind, I went to the counter, lined up, and was delighted to see the cashier adding an Okamoto’s sticker with their album cover and a Tsutaya / The Bawdies co-branded mini tote bag as free goodies to my purchase. Oh, what a bliss! The forgotten memories from the not-so-distant past started flowing in my mind, as I exited the store and went for dinner with two colleagues from the Japanese office.

A mini tote bag with The Bawdies’ new album?! Nice!

2. Unwrapping the Albums

After I came back from Japan this past weekend, I was a bit too overwhelmed with new experiences and sensations — and also jet-lagged — to sit down and immediately unwrap my newly bought CDs. I let a few days pass, and finally got to business and opened them up today. The mere action of unwrapping and opening the jewel cases, taking out the thick artfully printed booklets and leafing through pages with lyrics and photos, and then holding the CDs in my hand, made me feel so good… and young… and human — again.

Unwrapping the Okamoto’s CD

There was a strange sensation all around me. There I was, sitting on my bed, doing something that I had done numerous times in my younger years, and at the same time I had the latest Nokia Lumia 920 smart phone lying next to me — a device that has more capabilities and processing power than my laptop had the last time I unwrapped a CD case!

Time has flown so fast in the past few years. And things have changed so much. We have become extremely empowered by the ubiquitous digital technology surrounding us — that is a fact that I am not going to contest. However, we have also become a bit less human. We have forgotten what it means to touch a product, to assess its quality not only based on how it sounds, but also on how it looks and feels in our hands. Strange thoughts, indeed.

The irony of reliving these favorite moments from the not-so-distant past was strong enough to force my will to return to my blog (after almost five months of pause) and write this post. But as I set about to do that, I actually had one even more ironic experience. I inserted the CDs in my laptop and ripped them to 320 kbps mp3s, then synced them wirelessly via Skydrive to my Nokia Lumia, paired my phone to my digital Bluetooth receiver, and started blasting Dance The Night Away, the opening song from The Bawdies’ album, on my large speakers. Why did I do it? For a very simple and ironic reason — I realized I no longer had a standalone CD player hooked to my Hi-Fi music system in my living room… I’ll upload the two albums’ mp3s to my car stereo’s hard disk tomorrow so I can listen to them while I drive around my neighborhood. Then, I’ll let the two CDs stand prominently on my bookcase — to remind me of a past that was only a few years ago, yet feels ages away… And to remind myself that I am still human!

Isn’t that ironic?

The Pepe Food Truck

Eight months ago I blogged about celebrity chef José Andrés’s plans to join the Street Food revolution by adding his truck to the vibrant Washington DC food scene. Today, I am happy to report I finally experienced his new offering.

After lining up for 15 minutes and slowly savoring my coveted Pepito de Ternera sandwich, I can finally announce that Street Food has graduated out of its nascent first years where young entrepreneurs were trying to make their mark and benefit from the revived craze about local and hip places to eat. Street Food has officially entered a more mature stage where the “big guys” are starting to realize the attractiveness of that business model.

José Andrés’s food truck is a great idea indeed. Through its mobility, office workers across different neighborhoods of the Greater DC area can experience high-quality and signature dishes in-between conference calls or spreadsheet-crunching marathons. The prices are a bit high for a typical workday lunch ($8 for a gazpacho soup and $14 for the beef tenderloin sandwich), but they are more than worth it for a quick touch of Spanish flavor and food goodness to spice up the mundane Monday at work.

The Pepe Truck Menu

The menu contains a pretty eclectic mix of Mediterranean-inspired dishes. There is a gazpacho soup, a burger, a grilled cheese sandwich, a beef delicacy… even a chicken sandwich dedicated to FC Barcelona!

One thing I would have preferred differently is to have a Spanish brand for chips rather than the rather pedestrian Route 11. Or he could offer a whole other way to complement the main meal — leveraging a Spanish appetizer or something similar.

The other thing that I missed on the menu is the ubiquitous Spanish jamón ibérico sandwich. But I guess José Andrés does not really want to fall into the typical stereotypes, so he is trying to keep the bar a bit higher than the tourist fare on the streets of Madrid.

The sandwich comes in a typical European deli style white wrapping paper, and even sports a flashy silver Pepe label to prove its authenticity and make it stand out from the rest of the food truck crowd. The “icing on the cake” is the fact that the sandwich is personally inspected and wrapped by Executive Chef Sean Wheaton from José Andrés’s Think Food Group (TFG).

Signature Wrapping

I could not wait to go back to the office and indulge in this little culinary gem. I was not disappointed when I unwrapped the sandwich and took the first bite. It felt as if I had miraculously escaped from the office and was sitting at one of José Andrés’s fancy restaurants in downtown DC or — even better — at his new and very hyped The Bazaar venue at the SLS hotel in Miami’s South Beach.

Office Lunch Goodness

What are your thoughts on celebrity chefs’ foray into the truck food scene? Is that the right direction for the whole street food movement? Would you pay $10+ for a sandwich made on a truck, even if it comes with the brand and “blessings” of a successful restauranteur and celebrity chef? Let me know in the Comments section.

“So what is it that you are talking about?” Many of you are probably asking this question at the moment.

It’s very simple — really. Nokia has just launched a new ad that advertises its freshly released and highly acclaimed Lumia 920 smart phone. Instead of praising Lumia’s advanced features, superior specs, and intuitive user interface, the Finnish company has decided to call its competitor’s iPhone out for betraying the same values that Apple once embraced and represented so strongly.

Let’s take a look at the 1984 Apple Macintosh ad.

• Creativity
• Individuality
• Ergonomics
• Forward thinking

The list of values that were implied in Apple’s old 1984 ad can go on, and on. But nowadays, people finally start to realize that by being offered limited choices not only in terms of hardware and features, but even in terms of basic things — such as colors — they themselves have slowly turned into the grey silhouettes in the ad. They are expected to follow and obey the “Big Brother,” refrain from any form of criticism, cherish anything that “Big Brother” condescends to give them, and generally serve as good “cogs in the great machine” of Apple marketing.

Now, let’s look at Nokia’s new Lumia 920 ad.

Can you put your hand on your heart and deny some of the obvious “facts” implied in this ad?

What is your reaction to that? Do you agree that Apple may have become the very Orwellian “Big Brother” it once rallied to fight? Do you find Nokia’s new marketing strategy ingenious? Or do you find it too arrogant? As always, I look forward to reading your opinions in the Comments section.

Quick Disclosure: As I write this post, I do not own stock in either Apple or Nokia.

Saturday, September 22nd, 2012, 3:48 PM EST — just a day after iPhone 5 has been released. I’m standing outside the Apple Store in Clarendon — the fancy, affluent and ever growing hip center of Arlington, VA. There are about 10 customers randomly strolling inside the store, and a few others casually exiting, no purchases in hand. The whole scene looks anticlimactic. No cops on stand-by — ready to rein in the crowds; just a few Apple Geniuses in blue T-shirts, and a handful of customers… So much for the iPhone 5 hype in DC.

Fast forward to 8:30 PM EST — the day is nearing its end, but the main street of Georgetown is busy with people. I’m standing outside the original Georgetown Cupcake store on M Street (of TLC TV reality fame). As always, the side street next to the store is packed with eager foodies, waiting for the chance to savor the coveted cupcakes. Many of them have spent about an hour in line, but are still happily taking photos of the lucky ones coming out of the store with the signature pink boxes filled with cupcake delight. Cops are guarding the peace in case the occasional impatient mother and her 3 infants get rowdy as they try to cut the line. Nothing new on M Street — this has been a typical daily sight since the store opened up a few years ago.

The two stores are only about 2 miles apart (see Nokia map below) but the atmosphere is very different. Both of them belong to one of the wealthiest and youngest (and by way of these two qualities, also the hippest) parts of the nation — yet, at the store where hipsters were supposed to be flocking, there are only a few; meanwhile plenty are waiting in line for a cupcake or two.

Why is that discrepancy between reality on TV and reality in my neighborhood happening?

Is it because the citizens of the 4th best place for the rich and young in the nation do not really care so much about the new iPhone — at least not as much as they care for a nice, little, savory cupcake?

Or is it because the media frenzy, driven by clever Apple PR, has been showing images of people flocking to Apple stores only at select locations — stores that historically have been frequented by the biggest concentration of die-hard fanboys?

What have you seen in your own neighborhoods? Are people really rallying to buy the iPhone, as the media would like us to believe? Please share your experiences in the Comments section.

The email informed me that my online account had been locked since someone had erroneously tried to log in more than the maximum amount of attempts allowed. For a few moments, my heart beat rose and hundreds of thoughts went through my head. I started asking myself who might have tried to hack into my account, whether they had tried to log into some of my other credit card accounts, what the damage would be, how much time it would take me to reopen all accounts, etc. Then, I calmed myself down and continued reading the email.

The “fraud notification” went further ahead to assure me that my credit card number had not been compromised, apologized for the inconvenience, and advised me to reset my online account. Instructions on how to do that were helpfully offered in an attached “secure form.”

Those last two words — “secure form” — raised the first warning flag in my mind. This did not sound right!

• Why would the bank attach a “secure form” to help me re-instate my online account?
• Why wouldn’t it just prompt me to visit the secure web site and re-register there?

I quickly scrolled down to the bottom of the message to take a look at that “secure form.” I expected some sort of a PDF. Instead, it was an HTML file, casually called Chaseonline.html. That raised early-warning flag #2 in my mind.

• How can a simple HTML file be a “secure form?”
• Why would they ask me to open an HTML file in my web browser, when they could simply direct me to the web site?

I scrolled back up to the top of the message, already knowing what I would see. The email address in the “To:” line was not mine. It contained my name’s initials, and was addressed to one of the big and well known U.S. universities. Now that did not look right at all!

The final blow to this scam came when I double-clicked on the “Chase” alias to reveal the actual email address. Not surprisingly, it was extremely generic and did not belong to the Chase.com domain at all!

Having read The Art of Intrusion, the book on social engineering by the famous hacker-turned-writer Kevin Mitnick, I had started paying attention to identifying telltales  of potential hacks or scams. In the past, email scams were relatively easy to identify by their use of incorrect English, weird formatting, strange use of punctuation. This time around, however, the scam looked very polished and professional. And it sounded real.

Scammers are becoming increasingly sophisticated, my friends. Beware of their social engineering skills!

Below is the full email — I thought I’d share it here to help others avoid falling in this pitfall.

As surprising as this might sound to readers whose experience with mobile devices is limited to the past 4-5 years, the paragraph above represents very accurately a prior era. An era when Apple was just a computer company, Google was content with dominating search and online services, Microsoft was busy connecting PCs, and the other big players in the mobile world were Motorola, Sony Ericsson, Siemens, Samsung and LG.

In this post, I’ll focus mostly on Nokia’s innovations from the past few years — since those have been grossly understated by the tech blogs and mainstream media alike. In a future post, I plan to dwell more on the merits of Nokia’s strategy (e.g., the seemingly risky bet it took to partner up with Windows Phone, and the choices it made about features to include and exclude from its new Lumia phones).

To put things in perspective, this is my final, third, post in my September 2012 trilogy on smart phones and innovation. Since you are already here, please keep on reading. However, don’t forget to check later my other two posts:

• Apple’s Innovator Myth
• Apple — Most Valuable but Also Most Vulnerable

Despite all the negativity and ridicule that have oftentimes accompanied Nokia over the past few years, the Finnish company has managed to preserve its focus on innovation and high quality. Even Nokia skeptics have a hard time denying the uncompromisingly high standards of the company’s build quality, and the rich feature sets of its products.

Nevertheless, it is very hard to find a comprehensive blog or article that celebrates some of the innovative breakthroughs that Nokia has had since it lost its industry leader’s luster. Somehow, the attention of the masses has invariably stayed fixated on the latest iterations from Apple. Retina display, Siri, thunderbolt connectivity — those are all things that even technophobes can easily talk about, since they have been inundated with facts by corporate PR and the general media…

…Meanwhile, somewhere in Finland, a company has been cooking up a few new goodies that deserve their own space on the pedestal of contemporary innovation. I’ve focused below on outlining my favorite 5 innovations. (Please note that I am not an engineer so I am not going to dive deep into the very technical facts — I’m mostly reviewing these from the point of view of an avid tech aficionado and a very early adopter of technology.)

Innovation #1: PureView Digital Photography
Quoting directly from a Nokia white paper:

“The Nokia PureView Pro imaging technology is the combination of a large, super high resolution 41Mpix with high performance Carl Zeiss optics. The large sensor enables pixel oversampling, which will be explained in detail in this paper but in a nutshell it means the combination of many pixels into one perfect pixel. PureView imaging technology is the result of many years of research and development and the tangible fruits of this work are amazing image quality, lossless zoom, and superior low light performance.”

Nokia first revealed PureView in its “experimental” Nokia 808 phone, released in early 2012. I call that phone experimental because it was not intended to serve as the savior of the company, at least not in terms of commercial success. Nokia 808 featured the dependable but old Symbian OS rather than Windows Phone OS, and was pretty thick as per 2012 form factor standards. However, it had a fully loaded, super-high-resolution sensor, which allowed an active area of 7728 x 5368 pixels, totaling over 41 megapixels. The phone was meant to create hype among photo enthusiasts and serve as a sort of a real-market test of the technology.

Most journalists and tech bloggers got stuck on the 41 megapixels, scratching their heads why on earth anyone would want to have that many megapixels for a casual photo image. But that was not at all Nokia’s main intention. What Nokia really aimed at was to achieve “pixel oversampling.” In simpler terms, this means combining many pixels to create a single “super” pixel. “Super” pixels allow users to keep virtually all the detail, while filtering away visual noise from the image. In layman’s terms, the images a user can take with PureView are more natural and perhaps a more accurate representation of the original subject than has ever been achieved via a phone camera before.

A second and equally important benefit of PureView is the ability to zoom digitally without sacrificing quality. The 41 megapixels mean that a user can zoom 4x and still obtain a clean, unpixelated and undistorted image, with the equivalent resolution of a 3 megapixel camera.

For the photo enthusiasts, I recommend reading the whole white paper — it explains all the technical benefits of PureView in a concise and easy-to-read style.

Below is one very revealing comparison between Nokia 808 PureView on the one hand and Apple’s iPhone 4S, Samsung’s Galaxy S III, and HTC One X on the other. The matrix represents four photos taken in low light without flash. The striking difference in detail, focus, contrast and color quality explains very clearly why PureView has become one of my favorite new innovations.

For more comparison photos, take a look at this photo shoot-out on PocketNow.com’s web site. CNET’s Jessica Dolcourt has done an excellent and very professional shoot-out, as well.

Innovation #2: Everyday NFC, Beyond Mobile Payments
Much has been said about using NFC (near-field communication) technology for mobile payments. Google has been one of the early supporters of mobile payments through NFC, pushing its Google Wallet technology. Many of the latest Android-based smart phones have built-in NFC and are Google Wallet ready. However, the road to mobile wallets is long and bumpy, and we — as consumers — are just starting to take small steps on it. As a fresh-out-the-press Wall Street Journal article comments:

“[There are] many hurdles facing widespread adoption of mobile payments. Banks, merchants and technology companies have bet billions of dollars on the technology, but those investments likely will take years to pay off.”

While we wait for mobile payments to start picking up in adoption, Nokia offers several other very useful ways to leverage NFC. My personal favorite is the ability to quickly pair a phone to other NFC-enabled devices, for easy transfer of audio/video or photos, or documents, or even your contact information. The video below demonstrates some of the most popular use cases for Nokia’s NFC:

Here is one more user-created video, demoing the pairing of a Nokia phone to an NFC speaker to play music:

“Pretty cool, but when and where would I really use this?” you may ask yourselves. Good question. But let me give you a few cases that I would personally appreciate having the ability to use NFC:

• You enter a cafe or a restaurant and want to use the free WiFi. There is an NFC logo imprinted on the table; you touch your phone on it, and you’re immediately connected to WiFi.
• You rent a car (maybe a Zipcar or a Car2Go), and want to be able to play your phone’s playlist on the car radio. You tap the phone on the dashboard, and voilà — your music is blasting through the car speakers!
• You meet someone at a house party and would like to get their contact details. Tap your phones together and you already have their phone number, email and even Facebook and Skype usernames saved to your address book.

Innovation #3: Wireless Charging
With the release of the much anticipated new Lumia 920 and 820 — the first phones to feature Windows Phone 8 — Nokia also made an important step into taking wireless charging to the mobile mainstream. Wireless charging has been used in other appliances before — Philips Sonicare electric toothbrushes charge through electromagnetic induction. Nokia builds on this by offering several options for charging a phone without plugging any cables. Nokia 920 or 820 users can simply rest their phones on their choice of charging plates, pillows and stands, and get the much needed juice back into their handsets. They can even charge up while listening to music, by resting their phones on top of the JBL PowerUp Wireless Charging Speaker.

This may sound a bit redundant — after all you still need a special dedicated charging device. But think of this as just the tip of the iceberg. As the technology gains traction, we may get to charge our phones by simply resting them on the table while sipping coffee at Starbucks, or even “borrowing” some juice from a good friend by keeping our phone pressed to their phone for a few minutes to bring that dead battery back to life.

Curious to see a demo? Here is a video that Nokia posted as part of its ad campaign for the new Lumia phones:

Innovation #4: Super Sensitive Touch — Even with Gloves on Your Hands
I am sure that most users of smart phones have run into the debacle of using their phones while wearing gloves. Add to this the inconvenience that many ladies face when trying to type on their phones with their long nails. This deficiency of the capacitive surface displays has forced many iPhone and Android users to buy unsightly special gloves with metal tips.

Nokia has decided to address this problem head-on by bringing in a Synaptics ClearPad Series 3 sensor to its new Lumia 920 phone. This new sensor allows the phone’s capacitive surface screen to react to more than just direct skin contact.

Here is a demo video of using the Lumia 920 without taking your gloves off:

Innovation #5 — Making Phones Flexible… and Bendable
This last innovation in my Top 5 Favorites list is still in an early prototype stage and will most likely not see the commercial daylight in the immediate future. However, it just shows how forward-looking Nokia can be in some of its technological endeavors. Imagine a phone that you can control not only through touch but also by flexing and bending.

Nokia’s prototype Kinetic Device aims to do that. In certain instances, bending the whole device may feel more natural to a user than swiping or tapping the screen. I can only imagine what mobile gaming would feel like if and when this technology gets widely adopted.

If you are curious to see how bending a phone works, check out the two demo videos below. Very interesting and eye-opening stuff!

Bendable phones also offer an additional advantage that may have a more immediate impact on everyday users. As a sneak preview on Geek.com from October 2011 rightly points out:

“Sturdiness is one advantage here. There will be no question about whether a flexible phone will survive a pavement drop. A collision with a hard surface isn’t likely to damage it much more than it would a banana, a shoe, or a piece of garden hose. The Nokia rep also suggested that you could actually run the device under a water faucet to clean it, without suffering any problems.”

If Nokia ever pulls this off, there will be no need for rubber or plastic cases. That will return the phone to its original pure form. It will also most likely wreak havoc among the multitude of vendors pocketing handsome profits by selling overpriced cases to the smart phone customer masses.

Did the Top 5 Favorite innovations I featured here impress you? Do you know of other recent Nokia innovations that you think should be popularized? Do you agree that Nokia deserves to be re-installed at the pedestal of great modern-day innovators? Let me know your thoughts in the Comments section.

Quick Disclosure: At the time of writing this post, I do not own stock in Nokia. However, after having followed the recent encouraging trends surrounding Nokia, I am strongly considering buying stock in that company. And here is a nice post by at least one more person who thinks the same as I do.

Please note that this post is part 2 in my September 2012 trilogy, which also includes the following:

I hope you’ll read the other two posts, as well. But since you’re already here, why don’t you first learn how the “most valuable” company may also be very, very vulnerable.

The Bass model is a very useful tool for forecasting the adoption (first purchase) of an innovation (more generally, a new product) for which no closely competing alternatives exist in the marketplace. An important corollary of this model is that any product follows a life cycle. Even the most successful products reach their peaks at a certain point and then start declining in their appeal. Companies use this model not only to predict their future sales, but as an early warning of when they need to innovate in order to move on to the next Bass curve. For more information on this model, you can read this informative technical note posted on University of Washington’s web site.

I am going to borrow from the main premises of this model to show why I think Apple may be reaching an important milestone — i.e., the tipping point where the iPhone would reach its peak in terms of market appeal and will start its sun-setting trajectory.

Without diving into unnecessary technical detail, the Bass model stipulates that each product follows a predefined trajectory of adoption. Some products have very long lives — mainly because they are staples and related to needs that do not change very often. Other products are very dynamic and short-lived. As Prof. Ashwath Damodaran from New York University — one of the most prominent academics in Finance — states in one of his recent blog posts:

The iPhone has a short life cycle. […] Since the iPhone 4 came out in June 2010 and the iPhone 4S was introduced in October 2011, that puts about a two-year life cycle on the product. […] With a short product life cycle, a company is faced with two challenges. First, it has to come up with innovations to its product to retain its customers when the cycle is renewed, and that will require investment, especially during the later parts of each cycle. Second, even with these innovations, there will be customers who switch to competitors’ products (either because they are cheaper or because their innovations are more attractive) and for a company to maintain it’s market share, it has to get more of it’s [sic] competitors’ customers to switch to its products.

In short, the iPhone is no different from any other product out there. It has a life cycle. And its life cycle is relatively short — by dint of the dynamic industry that it represents. Apple has been employing two classic ways to “stretch” the Bass curve further out into the future. It releases iterations of the iPhone on a regular and relatively frequent basis, and it flexes its powerful marketing muscle to squeeze as much juice out of each iPhone version as possible.

Take a look at the illustrative graph below:

Through creative product versioning and aggressive marketing, a company can extend the life of a product. Eventually, however, a company needs to move on to a new Bass curve; otherwise, it risks losing revenue and thus shareholder value.

This is important for Apple because the iPhone has been the flagship product for the company. The iPhone accounted for 43% of all Apple sales in 2011, and its share is trending even higher YTD (as of the company’s third fiscal quarter in 2012).

One can argue that the release of the iPad in 2010 was an attempt to break out of the iPhone Bass curve and move on to a new one. However, despite all the hype surrounding the iPad, it accounts for only approximately 20% of the company’s sales. What is more important — three years into its product life cycle, the iPad represents only 50-60% of the slice of the pie that the iPhone commanded in its third year.

Moreover, the iPad’s average order value (as crudely measured by dividing total dollar sales by total number of units) has already fallen below the AOV for the iPhone.

Having shown that the iPad may not be (at least as of yet) providing a new Bass curve for Apple, let’s get back to the iPhone. Bass curve calculations can be fairly complex and require extensive research. Rather than spending too much time constructing a Bass curve on my own, I have decided to highlight one that a site, called Strategy Questions, has put together. Below is one of the Bass curves that the site proposes. For the full analysis, please visit the actual post.

Please keep in mind that that site’s analysis was done in late 2011 and long before the release of the iPhone 5. I don’t recommend blindly drawing conclusions based on this site’s analysis — the iPhone hegemony may be shorter or longer than the site predicts. I am just using this as an example of how even the “most valuable” company in the world has to follow the basic rules of product life cycles.

The two big questions that remain are:

Only time will tell us the answers of these two questions. On one end, Apple had demonstrated in the past that it can rise from the ashes like the proverbial Phoenix. On the other end, Apple had fallen in the Bass curve “trap” before — just remember the first Macintosh computer in the 1980s and how the company was on a precipitous trajectory to the cliff until Steve Jobs came back to the rescue and moved the company to the iMac Bass curve.

What is your take on this? I’ll appreciate your thoughts in the Comments section.

Quick Disclosure: At the time of writing this post, I do not own stock in Apple (and at its current price and given the Bass curve analysis, I do not intend to buy in the foreseeable future).

As Apple grew in its dominance both on the consumer electronics market and the financial stock exchange, reasonable analysts started asking themselves when the hype would evaporate and the Apple bubble would finally burst. I’ve seen too many flame wars online between die-hard Apple fanboys and their equally relentless opponents from the Fandroid camp. Instead of adding fuel to the fire by going for the countless time through the same arguments that you can find on other sites, I thought I’d contribute by offering a slightly different perspective.

This post is part 1 in a trilogy that I have been meaning to write for a long time. In the ensuing paragraphs below, I use financial analysis — something that has been blatantly missing from most tech blogs’ posts and mainstream media articles about Apple lately — to dispel the myth that Apple is the great innovator in the smart phone space.

The other two posts in my trilogy focus on related topics:

I hope you’ll read the other two posts, as well. Meanwhile, if you want to find out why Apple is a marketing machine, not the incubator of innovation that it would like you to believe it is, first read my insights below.

A few days before Apple released its newest iPhone 5, I read a very thought-provoking article by Dan Lyons, published on BBC News. Dan gained cyber fame a few years ago by running a “Fake Steve” blog where he pretended to be Apple’s late co-founder and former CEO, Steve Jobs. In his September 12 2012 BBC article, Dan brought up a very interesting point — that Apple’s spend on R&D (a widely used measure of innovation for most tech companies) looks surprisingly small.

Inspired by Dan’s findings, I studied the income statements of Apple, Nokia, Samsung Electronics and RiM (the maker of BlackBerry). The insights from that follow below. Please note that all financial numbers in this post come from Morning Star’s free investor online service. Historical exchange rates for Korean Won to US Dollar were calculated using data from OANDA.com.

Fact #1: Apple’s R&D Budget is Low, Very Low.
Contrary to what most people would believe, Apple does not find it important to spend too much on innovation. Its R&D spend as percent of total revenue has averaged 4.35% over the past 10 years. Compare that to Nokia’s 12.19%, RiM’s 8.55%, and Samsung’s 6.07%.

Before someone rushes to offer a hypothesis that Apple does not need to spend too much on R&D because it is ahead of the competition, please look at the company’s year-over-year record in the past 10 years. The Cupertino, CA giant has been consistently spending less than the competition — even if you go back to 2002. And that was many years before Apple released the first-generation iPhone and got an edge over Nokia or any of the other competitors.

Below is a chart for those who like to visualize things:

Fanboys may try to diffuse this attack on their beloved Apple by pointing out that the company’s sheer size dwarfs the competition, therefore rendering the R&D spend percentage of revenue minuscule. The hypothetical argument may center on the premise that while looking small in percentage terms, Apple’s R&D spend is large enough to outspend Nokia and the others.

The bad news for those who may believe this argument is that the gap between Apple and the others is even more pronounced when expressed in absolute (dollar) numbers — only that it goes in the opposite direction to what they would expect. Apple’s 5-year average annual R&D spend is $1.49 billion, which is predictably greater than RiM’s $0.98 billion, but significantly below Nokia’s $5.80 billion or Samsung’s $5.23 billion.

Let’s take a look at the chart below.

In other words, Nokia has been outspending Apple on R&D on average 3.9 times over the past 5 years. And in 2007 (immediately after Apple released its iPhone and at a time when Nokia was still the “big whale” in the mobile world), that outspending peaked at 7.2 times!

Fact #2: It’s All About Marketing, Baby!
The following revelation should not be a surprise for most people, even those blindly believing in Apple’s innovator mantra. For most of its existence, Apple has been lauded by business experts for its marketing savvy. Therefore, it should not come as a shocker that Apple has spent on average 13.11% of revenue on Sales, General & Administrative (SG&A) costs over the past 10 years — compared to 11.14% for Nokia and 8.90% for Samsung. The only potential surprise comes from RiM — somehow I never pictured the BlackBerry maker as a marketing machine. But that company has managed to spend on average 16.76% of its revenue on SG&A.

Interestingly, while Nokia has been fairly constant in its SG&A allocations over the years, Apple has drastically reduced its SG&A spend as percentage of revenue. I suppose this can be attributed to the luxury of being considered the “hypest” brand these days. When so many people blindly buy your products, you don’t really need to spend that much money on advertising.

Even that, however, is only relative. Apple is more efficient in its advertising due to the positive externalities of its hip brand image, but is still one of the two heavy spenders. At $7.6 billion, it came very close to Samsung’s SG&A in 2011.

Fact #3: Marketing Trumps Innovation at Apple — by a Large Margin.
I hope that by now most of you have become convinced of the main premise in my post. However, if doubt still lingers in some of you, please take a look at the chart below. On average, for every $1 in R&D, Apple spends $3.14 on SG&A. In contrast, Nokia spends only $0.92 on SG&A for every $1 spent on R&D.

Did these facts surprise you? Do you still perceive Apple as the great innovator? Or, rather, does Apple look more like the great master of marketing? Let me know your thoughts in the Comments section.

Quick Disclosure: At the time of writing this post, I do not own stock in any of the four featured companies. However, after having followed the trends around Nokia, I am strongly considering buying stock in the Finnish tech giant, hoping to benefit from its much anticipated revival.

My Apple Infringment

What a “fruitilicious” weekend did we just have! A company that once shot an iconic Orwellian-themed TV ad fighting for the people against “Big Brother” corporations has succumbed to its own success and become the ultimate “Evil Empire.” A company whose founder believed that “good artists copy, great artists steal,” has hired the highest-paid IP lawyers to turn into the greatest patent troll of history. Yes, you guessed it, this post is about Apple!

I was having a quiet lunch in a favorite Viennese restaurant in Georgetown, when I saw the news flash on the TV screens. Apple had just been granted $1 billion by a California jury in a historical ruling against Samsung for copyright infringements.

I’m not a lawyer so I’m not going to analyze this decision from a legal perspective. I’ll leave that to the numerous pundits who will no doubt write about this in droves over the next few weeks. My post is going to be extremely personal. As I write this, I know I’ll raise a lot of commotion and make a lot of people (mostly fanboys whether they admit it or not) angry. However, I can’t force myself to keep silent on an issue as blatantly arrogant as this.

Apple made billions of dollars over the past 5 years selling its original iPhone and the several iterations following it, as well as the iPhone’s “Big Brother” (pun intended) — the iPad. Kudos to the Cupertino-based company for achieving this. Their forward thinking when designing the original iPhone and their marketing genius deserve the success that followed that feat.

However, despite my admiration for that success, as well as for Apple’s hits from my childhood (my first ever interaction with a computer was with the Apple ][, when I was a very little kid), I can’t help feeling appalled by Apple’s ulterior motives in suing Samsung. Instead of continuing to push the frontier in the mobile world, Apple has become entrenched in its legacy and started defending vigorously its “old laurels.”

Apple has used a simple truth about corporate strategy and marketing and turned it into the “weakest link” in its nemesis’s defense. Large and successful companies typically have competitive intelligence teams. These teams are usually housed in the Consumer Insights (or Market Research) departments and try to connect the dots between consumer needs and wants on one hand and competitors’ value propositions on the other. When such teams identify important gaps in their own companies’ offerings vs. their competitors, they highlight those to their product teams, so that said gaps be duly closed. Now, imagine Samsung doing its typical competitor intelligence. They see that people like certain features in other products, and obviously try to replicate (and exceed) that customer experience.

The trick is whether companies just blatantly copy all features and pose as a replica of the original product, or whether they try to replicate some of these features, but mixing them with other unique characteristics. I’d argue that Samsung did the latter — they closed the gaps between themselves and Apple in those areas that they deemed important, and then added their own “flavor of goodies” — i.e., unique features that were not present in their competitor’s offerings.

Unfortunately, however, people tend to neglect these general truths about business — perhaps because many of them work in completely different fields and never really experience these things first hand. So they tend to believe when a company presents the facts as if another competitor has atrociously stolen its innovations. I really liked a quote from Samsung’s lawyers immediately after the jury’s decision was announced: “[it is] unfortunate that patent law can be manipulated to give one company a monopoly over rectangles with rounded corners.” Sign of the times, my friends, sign of the times…

Before you start countering me, let me pose a question for you. When Mercedes introduced the blinkers on the side mirrors many years ago, that was a very cool feature that many drivers of other car brands dearly coveted. What did the other manufacturers do? They updated many of their next car models to have the same feature — i.e., blinkers on their side mirrors. Did Mercedes claim a “monopoly on blinkers on side mirrors?” No!

One more example. Four years ago, Audi pioneered the “Christmas tree” LED day lights design. Again, that feature was the envy of the automotive world… Until competitors caught up and started having all kinds of weird looking LED light designs on the front of their cars. Did Audi sue the others for stealing its innovation? No!

The damage has been done and the flood gates have been widely open. Apple’s victory in court has given all the patent trolls even greater motivation to keep on doing the destructive work they have been doing for years now. This also gives the “green light” to Apple fanboys for all kinds of incredible accusations. Just this morning, I read on TechCrunch about the arrogant claim that Microsoft’s new logo (revealed last week) is a cheap knockoff of Apple’s logo! What, who, how, when?!?!

At this rate, I am sure we’ll soon read or hear about claims that NYC is infringing on Apple by calling itself the “Big Apple.” In fact, by uploading my photo of an apple with a bite on one side on top of this post, I risk prompting vigilant Apple fans to claim infringement again. At least, I can try to pass the responsibility to Whole Foods who sold me that delicious apple in the first place.

One thing I know for sure is that I will certainly think very hard before buying another Apple product in the future. I have been a proud owner of a number of Apple products in the past (in addition to that archaic Apple ][, I also have owned two iPods, a Mac Mini, an iPad, an Airport network hub). I even use an iPhone (but that is my company phone so I wouldn’t count it toward my personal ownership of Apple products). I am currently in the market for buying a new laptop and have spent significant time debating between the Macbook Air and the new Lenovo ThinkPad X1 Carbon. After the jury verdict on the Apple vs. Samsung case, this debate is over for me — I’ll buy the ThinkPad X1 Carbon without a blink.

What are your thoughts on this development? Do you ascribe to the arguably populist view that Apple deserves $1 billion compensation or do you see things a bit differently? Let me know in your comments.