more about “Google vs Microsoft“, posted with vodpod
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]]>A year ago this week Apple opened the floodgates and began letting software developers sell software for the iPhone, and geeks everywhere caught iPhone fever.
Since then Apple’s iTunes App Store has swelled to more than 50,000 titles, logged more than 1 billion downloads, and inspired an entrepreneurial surge that’s reminiscent of the dot-com gold rush — only without the illusion that everyone is making tons of money.
In fact, aside from Apple and AT&T, it’s hard to point to many folks that are raking in a pile of iPhone cash quite yet. Matt Murphy, a venture capitalist at Kleiner Perkins Caufield & Byers, guesses that as many as 95% of the developers building iPhone apps “aren’t trying to build a company on the iPhone” — they’re just hobbyists making a little money on the side, or companies using fun iPhone apps as marketing vehicles.
The world is still waiting for the equivalents of eBay, Amazon, or Yahoo — the groundbreaking new companies that will redefine and inspire the mobile ecosystem.
Not that people like Murphy are discouraged.
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On NBC’s Press: Here, a discussion with Leander Kahney about the future of Apple. (AAPL) (PALM) (GOOG) (MSFT) (INTC) (RIMM)
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| Apple’s iPhone will face slimmer margins in the near future. |
Now that the dust has settled from Apple’s iPhone 3GS announcement — video camera! compass! better battery life! — it’s time to face facts. Though Apple (AAPL) still leads rivals in style and technology, it’s not the breakaway frontrunner it once was. The new phone is cool and all, but now Apple is looking over its shoulder — and it will have to make some adjustments.
That’s a big change from just a few weeks ago. Back then, the only credible competitors the iPhone faced were a sleek but boring BlackBerry line from Research in Motion (RIMM) and an exciting but chunky G1 from Google (GOOG).
Since then, however, the landscape has changed dramatically. Suddenly Palm (PALM) appears to have a potential hit with its new Pre, and Google is showing off slimmer second-generation (G2) Android phones. (I’ve used both the Pre and the G2, and they’re pretty darn nice.) All of this new competition is good for consumers, but probably not for Apple’s profit margins.
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]]>This is Jon Fortt’s segment of a review done with Michael Copeland. For the full review including Copeland’s take, click here.
The Palm Pre is the second-best smartphone I’ve used. Its black plastic physical casing is attractive and feels well crafted. Its screen is bright and sharp. Its keyboard, though too cramped for comfortable one-handed typing, feels good and works well when attacked with two thumbs. And the software — the true test of any modern phone — is smooth and intuitive enough to challenge Apple’s iPhone.
Before I share details of my take on the Palm Pre, a little context: I was an avid Palm Treo user (and Sprint customer) for four years. It was a tough decision to leave the Treo, because we’d become friends. I knew its keyboard and its quirks. But after months of frustration with Sprint’s coverage and customer service, I got an iPhone three months ago.
After spending a few hours with the Pre, I wasn’t tempted to give up my iPhone. While the Pre is a very good device that matches the iPhone in many ways and even surpasses it in a few, the iPhone is still a better handset in the ways that matter to me — and in ways that I think will matter to a lot of potential buyers. Here’s how the two phones stacked up against each other:
Design. iPhone has the advantage. When it’s closed, the Pre looks like a smooth stone, fits easily into a pocket, and does so without extraneous buttons — there’s an on/off switch on top and a navigation button in front, and that’s it. Open it and there’s a small keyboard. Compared to the iPhone, the Pre feels lighter, more plastic and less luxurious. But it also feels durable enough that you might throw it into a pocket or purse without worrying about it getting scratched up. The Pre’s camera is better than the iPhone’s too, through many expect Apple to address that with new hardware and a software upgrade.
The Pre gets points for having a removable battery (which the iPhone lacks), and for its keyboard (a must for some heavy e-mailers). It falls short, though, in usability. The Pre is a little too slim and small to use comfortably with one hand, and the keyboard is so small and squat that one-handed typing is a painful affair. And the battery, while accessible, doesn’t last long — with WiFi on it seemed to drain more quickly than the iPhone.
Interface. It’s a tie. Palm deserves huge credit for giving the iPhone a run for its money in the usability department. It’s pretty easy to find what you’re looking for on the Pre, whether it’s e-mail, instant messaging, the web browser or the camera. The touch screen navigation is smooth, including a method of managing tasks that’s like working through a deck of cards – flick to the side to show a new window, flick up to discard it.
There are a couple of areas where the Pre outshines the iPhone. Its ability to run multiple programs at once — a talent the iPhone lacks — is probably the most hyped, but there are others. The way the Pre’s address book pulls down contacts from online sources like Google (GOOG, Fortune 500) and Facebook is nifty, though it can cause duplicate entries for the same person; it similarly pulls info from online calendars. And its universal search function is a nice one-stop way to find information both on the device and the web.
But there are other aspects of the Pre’s interface that aren’t so great. The screen is too small to easily navigate through calendar information. And the screen size also becomes a problem on the web, where text is often too small to read without first zooming in.
Applications. Here the iPhone has the advantage. Apple has a store with tens of thousands of applications that iPhone and iPod users can download. Palm doesn’t. The availability of so many applications makes the iPhone a more useful tool. Whether you’re looking for a game, a database, or a Twitter client, you’ll have a better chance of getting a great one that works on the iPhone rather than the Pre.
It’s a bit early to criticize Palm too much for this, since the Pre is brand new. But the disparity in applications isn’t likely to even out anytime soon.
Why? Third-party software developers want to make back the money it costs to create their product, and to do that they need volume. When they’re deciding whether to make an app for the Pre versus. the iPhone, the BlackBerry or Android, they’ll want to see which is most likely to pay off. The iPhone and BlackBerry have sold millions of units already, so they’re in the lead. Android, which is backed by Google, hasn’t done nearly as well — but word is that more than a dozen Android phones will be out by the end of the year, expanding the potential market.
One ambitious mobile developer I spoke with last week said that even if developing for the Pre is easy, he’s focusing on the iPhone and Android for the foreseeable future — the Pre just isn’t worth it yet.
That means even if you’re one of the folks who likes the Pre’s features a bit better than the iPhone’s, you might have to do without some of the cooler mobile apps for a while. If that’s OK with you, the Pre is a very good choice. (AAPL) (RIMM) (MSFT) (GOOG) (S) (T) (VZ) (MOT) (PALM)
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| SanDisk’s Sansa media players are number two in the market, behind the iPod. Image: SanDisk |
SanDisk CEO Eli Harari once plotted to dethrone the iPod with a series of “iDon’t” ads a marketing campaign that cast Apple iPod users as fad-driven sheep, and promoted his company’s Sansa media players as the smart alternative. Some fads, however, don’t pass. And in his sunny Silicon Valley conference room one recent morning, the founder and CEO of SanDisk admits what many music lovers have known for a long time: the iPod wars are over, and Apple (AAPL, Fortune 500) won.
“You can’t out-iPod the iPod,” Harari now admits.
Even so, one could argue that SanDisk (SNDK) won something too. Its Sansa (which remains a distant No. 2 to the iPod) helped prove that SanDisk’s core product, flash memory, is the best storage technology for mobile gadgets such as the Sansa and iPod. This in turn sparked demand for SanDisk’s patents, bringing the company a healthy stream of licensing and royalty revenue. (AAPL) (MSFT) (INTC) (SNE)
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| Yahoo CEO Carol Bartz says she’ll sell, but there’s more to it than that. Photo: Yahoo |
Yahoo CEO Carol Bartz, not one for mincing words, took the stage at the D7 conference in Carlsbad, Calif. on Wednesday and said yes, she is willing to sell Yahoo’s (YHOO) search business or all of Yahoo – for “boatloads” or “big boatloads” of money, respectively.
As always, the tech press ate this up. TechCrunch’s Erick Schonfeld, a smart guy and a former colleague, called it “a softening of her public stance,” since when she arrived in January she said Yahoo was not for sale. While he’s technically right – she even said she had softened her position – I see something different in her comments.
I say Bartz still doesn’t plan on selling Yahoo, or even the search business. Why? In reporting on Bartz for a recent feature in Fortune, I got a sense of how pragmatic she is. When Bartz arrived in January, she knew she had to announce that she was there to run the company, not to break it up and sell it, as a way of defining Wall Street’s expectations. But Bartz is also a veteran executive who knows how this game is played. The truth is that in a well-managed public company, shareholders expect that everything will be for sale at a price. So her statement is probably more a statement of her philosophy than a shift in perspective.
Then there’s the matter of how she phrased this. “Boatloads” of money? Come on. That’s not the language of someone who’s looking to make a deal during a global economic bust.
Even though Microsoft (MSFT), the only likely buyer of anything Yahoo’s selling, is a very wealthy company by any standard, it’s in no position to blithely spend boatloads of money on anything these days. When Microsoft CEO Steve Ballmer first offered a $45 billion boatload of money for Yahoo many moons ago, he planned to take on debt and mortgage his future profits to finance the deal. Today, with Windows and Office sales struggling in a recession, Microsoft is slashing jobs to boost a sagging stock price and praying that its upcoming Windows 7 operating system gives the company a boost. He’s looking to do a search deal with Yahoo that makes him look thrifty, not generous.
If you have any lingering doubts left about Bartz’s intentions, look at the conditions she set on any sale of Yahoo’s search business. Not only would she require boatloads of money, but also continuing access to all search-related data and the right technology. In other words she wants to “sell” it, but maintain access to the most valuable parts.
This is a great idea for more than just search, actually. It works just as well for real estate. In fact, I would like to sell my home for boatloads of money, so long as the buyer does some renovations and lets me continue to live in it. Any takers? (GOOG)
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| A sign of things to come? In its Atlanta stores, AT&T is selling the Acer Aspire One for $49 with a 2-year wireless data plan and DSL signup. Image: Acer |
PC retail is in rough shape again, and it’s about to get rougher.
Evidence of hardship is everywhere. Hewett-Packard (HPQ), the world’s largest computer maker, says it’s selling about the same number of computers as a year ago, but getting a lot less money for them – sales dropped 19% in the most recent quarter. When Apple (AAPL) reports earnings in July, analysts expect Mac sales to be off as well. And while Intel (INTC) says it’s hopeful that its chip sales are bottoming out, chip revenues are lower than they have been in years.
Why are things so bad? The easy answer is that PCs cost hundreds of dollars, and consumers don’t have a lot of extra cash floating around these days. Unless your computer has been struck by lightning and given up the ghost, chances are you’re holding off on purchasing a new one. One tech industry executive recently confided to me that it’s not just U.S. consumers thinking this way – the entire global PC market headed off a cliff at roughly the same time late last year, forcing computer makers to cut workers and rethink their strategies.
In the midst of all that, wireless carriers are poised to shake up PC retail. AT&T (T) announced this week that beginning this summer, it will begin selling small, low-cost Windows XP netbooks from Acer, Dell (DELL), LG and Lenovo in all 2,200 of its U.S. stores. (In case you’re counting, that’s about twice as many locations as Best Buy (BBY) has.) Rival Verizon (VZ) has already begun selling an HP netbook.
Why buy a computer from a phone company? Price, of course. Sign a two-year wireless data contract with AT&T, for example, and you get $50 knocked off the price of a netbook. Get home DSL service too and save $100. In Atlanta, where AT&T has been testing the deals, the cheapest Acer netbook sells for $49 after rebates.
Sales there have been brisk enough that AT&T execs are confident that cheap laptops will lure customers nationwide the same way cheap phones have in the past. And the deals will only get better: It’s easy to imagine that in a year or two, customers who sign up for two years of voice and data service (at a cost north of $100 per month) will leave a store with both a “free” phone and a “free” computer. Exciting, huh?
While this is great news for netbook-loving consumers, it’s a downright scary prospect for PC makers. If the phone business is any guide, carriers will fuel demand for the cheapest and least profitable computers out there, and put pressure on traditional PC stores to sell low-price PCs. And that will force tech companies to work harder to lure shoppers toward more powerful (and more expensive) hardware.
That’s not an impossible upsell, as the iPhone and BlackBerry (RIMM) have proven in the phone business. But it’s yet another challenge the PC gang doesn’t exactly need right now.
]]>Cisco CEO John Chambers doesn’t just talk a good game about telepresence, the videoconferencing technology that creates the illusion you’re in a room with someone who’s actually thousands of miles away. He’s planning to install his company’s high-end system in his Silicon Valley home, provided he and his wife can agree on a spot for it. “I figured we could convert one of the kids’ old bedrooms,” since they’ve grown up and left the house,” he says. “She told me, ‘You do that and you’ll be sleeping in there.’”
Though he’s not done negotiating the location, one thing that Chambers doesn’t have to worry about is cost. As longtime chief at the networking giant, he can surely afford the installation, which can easily run north of $150,000 per room.
But can his customers? Even as Chambers and rivals such as Hewlett-Packard (HPQ, Fortune 500), Polycom (PLCM) and Tandberg tout telepresence as the perfect tech tool to reduce travel costs and boost productivity, observers have their doubts. Sure, telepresence enables meetings on three or more huge screens, in high definition with pristine audio quality. (CSCO) (HPQ) (PLCM) (T)
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Microsoft’s follow-on to Vista, Windows 7, is getting closer to launch. Guess what? The buzz is better than you might expect. (MSFT) (HPQ) (DELL) (AAPL) (INTC) (AMD)
]]>Jon Fortt and Michael Copeland of Fortune weigh in on the latest buzz around Silicon Valley. (AAPL) (GOOG) (MSFT) (YHOO)
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On NBC’s Press: Here, I talk with a panel about the latest issue of Fortune, the Fortune 500 list, and changes to the tech landscape. (AAPL) (MSFT) (INTC) (CSCO) (GOOG) (TIVO) (EBAY) (YHOO)
]]>During Yahoo CEO Carol Bartz’s conference call Tuesday to discuss the company’s quarterly results, there was much to discuss: Sales fell 13% and profits sank 78% as advertisers cut back on online spending. And the company confirmed reports of layoffs, saying it would shed about 675 jobs. Yet analysts seemed to care about only one thing: Yahoo’s search business.
The worst-kept secret in the tech world is that Yahoo (YHOO, Fortune 500) and Microsoft have been talking again about a potential deal. So everyone wanted to know if Bartz would sell search. But that was the wrong question. A better one: Why would she?
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| Cisco CIO Rebecca Jacoby |
Even in these tough economic times, tech giant Cisco offers employees some pretty sweet benefits: Employees can visit on-campus doctors and dietitians, drop off dry cleaning, or get an oil change, and now they can pick the kind of computer they want to use at work.
That’s right – Cisco has started letting workers choose from a handful of laptops, including an Apple MacBook Pro. Only don’t call the program a perquisite. Rebecca Jacoby, Cisco’s (CSCO, Fortune 500) top information technology officer, says the initiative, launched last year, should actually save the company money. The fact that employees involved in the pilot program are deliriously happy with it – Jacoby and her peers even get love notes from satisfied road warriors – is a bonus.
Of course, that new freedom requires companies and employees alike to make sacrifices. Since Cisco began offering a choice of machines last June, roughly a quarter of employees have opted for Macs, yet they are pretty much on their own for tech support. (An in-house online community for Mac users gets a little help from Jacoby’s department.) Cisco, in turn, has to make a slightly higher upfront investment for the workers who want Macs, which are pricier than PCs.
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| A departing designer claims data too often trumps art. Image: Google Sketchup logo |
On his way out of Google, Douglas Bowman has posted a blog missive that might haunt the company one day. Bowman, the (now former) visual design lead, accuses the company’s culture of relying too much on numbers, to the point where creativity suffers.
“Yes, it’s true that a team at Google couldn’t decide between two blues, so they’re testing 41 shades between each blue to see which one performs better,” he writes. “I had a recent debate over whether a border should be 3, 4 or 5 pixels wide, and was asked to prove my case. I can’t operate in an environment like that.”
It’s hard to get on Google’s (GOOG) case for loving data; after all, expertise in number-crunching algorithms and attention to user behavior are a big part of what’s grown it into a company with a $104 billion market cap and nearly $16 billion in the bank. Google’s data wizards have humbled Yahoo (YHOO), and set Microsoft (MSFT) on its heels in the online game. If that’s where data gets you, well, then, more data for everyone. Right?
Maybe not. When I read Bowman’s post, I immediately thought of Apple (AAPL) – a Silicon Valley company that has a very different relationship with numbers. Unlike Google, which is (if Bowman is to be believed) running online focus groups to choose among 41 shades of blue, Apple hates focus groups. Focus groups trigger Apple’s cultural gag reflex. Where Google leads with the left brain, Apple leads with the right. Sometimes Apple’s attitude yields products like the Flower Power iMac and the G4 Cube. But sometimes you get the iPod or the iPhone. Apple’s attitude is that sometimes, to truly innovate, you’ve got to go beyond giving people what they say they want.
Who knows if Bowman has an ax to grind with Google – but I still hope Bowman’s criticism at least gets some attention at the Googleplex. As Google has grown, so have its ambitions – it wants to expand beyond the number-centric search ads game into brand advertising, operating systems and phone design. And those are areas that favor Apple types – the right-brained. (Don’t believe me? Think about how well Apple does in all those areas.) Perhaps search optimization can be boiled down to finding the answer to very complicated math problems, but these are design problems that are more subjective in nature. It’s a different thing than online apps. You can’t soft-launch a phone to the public, get feedback, and tweak it endlessly in public beta. You have to design a phone based on a bold vision, and try to release a product that wows people. Try to imagine a focus-grouped iPhone; it would have been a clunky thing with a slide out keyboard and pretty-good software. (Kind of like the first Google phone, which is due for a software update any day now.)
This is not to suggest that Google is lacking in right-brain skills. Fantastic designs like its search pages and maps prove it can do art, not just numbers. But if Google wants to be as successful in other areas as it has been in search, it may do well to heed Bowman’s words. It may well have to develop more of an artist’s arrogance – that quality of being able, in the right situations, to put aside its beloved data points and do what’s best, even if it’s not what users say they want.
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On the San Francisco Bay Area’s local NBC station, Jon Fortt and Sarah Lacy talk to Craigslist CEO Jim Buckmaster about controversies surrounding the company. This episode of Press:Here airs on Sunday, 3/22. Part 1 of 4. (EBAY) (YHOO) (GOOG) (MNI) (GCI) (NWS) (MSFT) (AAPL)
]]>Jon Fortt recaps Apple’s preview of the next-generation iPhone OS, due this summer. (AAPL) (RIMM) (T) (PALM) (MOT) (NOK) (MSFT)
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