Will Mobile Ubuntu Revolutionize the Technology Industry? Reply

Have you ever wanted a dual boot smartphone with multiple cores, able to boot from android when used as a handset, and able to function as a fully functional desktop when docked? If you visit this site, chances are this is the achievement of nerd Nirvana! This functionality, according to Canonical, the makers of popular Linux distro Ubuntu is coming to a handset near you.  Soon, Android smart phones will be able to dual boot from a docking station that is plugged into a monitor and keyboard

for use as a portable desktop. Rumor has it that phones are expected to ship with this dual boot capability by the end of the year. It is this website’s opinion this could truly revolutionize the information technology environment. Setting up an environment whereby every android phone owner is distributed a working copy of Linux, could challenge the omnipotence of the Apple Windows paradigm. This would give every information technology person, every business executive, and every student, a free working operating system with computer. All one would have to do is add the peripherals. In a sense, this almost sounds like unfair competition, almost worse than packaging a free web browser in with one’s operating system.

 

 

 

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From luxury to necessity, an article on smart phone usage and demographics. Surprisingly, even those making very little money are now buying smartphones and their accompanying data plans, out of a social necessity, even though they have little to no room in their budgets.

The Ever Expanding Screen 2

Iphone compared to the Galaxy Note 

Not so long ago form factors in cell phones seemed to be decreasing in size. Small was in, with flip phones predominating due to their thinness and their ability to fold in half, reducing the size of what a consumer has to put in their pockets. Enter the Iphone. What one could arguably call the rebirth of the candy bar phone, beefed up with accelerometers, processors, and RAM galore.

The Iphone 3G, 4 and 4S screens are just 3.5 inches, the HTC Thunderbolt sported a 4.3 inch screen, while the recently released Galaxy Nexus has expanded to 4.65 inches. Everyone originally thought the new Iphone, the 4S would also increase in size, that expansion however, has presumably been delayed to the entrance of the theoretical Iphone 5.

Just recently however, the concept of “big is in” is now truer than ever before, with the establishment of the new 5.3 inch Amoled display of the Galaxy Note. The new trend in bleeding edge mobile technology seems to be display, clarity of it, and screen real estate.

The LG Optimus has recently been announced and it will contain a 5 inch screen, and both megaphones will sport dual core 1.5 gigahertz processors, with 1 gig of RAM. Both the Optimus and the Note will be stylus friendly, with the Note coming with one built in to the device. Whether this trend in size will continue or not time will tell. We will have to wait to see whether or not consumers will want to break the 5 inch barrier in display size.

Patent Wars, Coming to a Gadget Near You Reply

By now many of you have heard of a little something happening in the technology industry called the patent wars. A war of attrition between technological giants, some smaller firms, and new patent investment funds (read: patent trolls). This war is designed to raise operating costs of those companies that cannot afford to buy a large portfolio of patents, or cannot afford to staff a team of patent attorneys.

Apple seems to be pursuing a mobile strategy that is partly centered around the use of patent enforcement and accumulation. But for the average consumer, the result of such a divisive struggle between the large mobile players, Apple, and patent trolls will mean higher prices for consumers, due to patent licensing, and litigation costs, as well as an anti competitive atmosphere that prohibits small players from existing in or entering such a hostile market. This patent war could mean the eventual exclusion of players such as RIM, and other smaller mobile players, from remaining competitive in the market.

There is another anti-competitive and distinctly anti free market aspect of the existing patent war. Will this conflict cause companies to spend ever increasing amounts of money on litigation, rather than paying for designers, and engineers? Could there be a congealing of innovation, in favor of a zero sum game approach to competition? Instead of making the pie larger, are we making it smaller by stifling competition, by making every swipe, every design feature, every aspect of a gadget, patent-able?

Some notable examples of the recent patent war insanity:

Swipe to Unlock: Apple owns this patent and is part of its arsenal against other mobile manufactures and Google.

Text prediction: Apple owns this patent, though it is arguable they were the original developers of the technology. Most likely, they bought this patent from a third party.

And voice recognition: Really? On an anecdotal level, I remember a few instances of the technology showing up in products before the advent of Siri.

However, Apple needs to be careful where it chooses to tread. Motorola owns a vast array of patents that are intrinsic to the technology of the cell phone. And um, who owns Motorola? Google. Recently, Apple was almost forced to cease the sale of its IOS products in Germany, due to a judges ruling.

Current Court battles by country:

Australia
Japan
South Korea
All across Europe
U.S.

The patent wars are spreading, a war of attrition, with no winners.

Motorola Droid 4, It Just Works! Reply

The Motorola Droid 4 just works.

I loved the Iphone series, but like all things, you grow up, and move on. The HTC Thunderbolt was the next foray into smartphone user-ship, and Marveled at the the increased freedom . I’ve enjoyed all of these products, as well as their jailbroken and/or rooted counterparts.  As everyone knows by now, the Iphone invented the “it just works” test. And the best thing about that platform is ease of use. My mother has an Ipad for example, and she loves it. She can’t use a PC to save her life. But for her, the IOS platform, “just works”.    The

downside of this platform, in my opinion, is its uniformity. If there is something specific you need to have the Iphone do, it better fall in line with the boundaries of the existing platform, otherwise, the only option is to buy another phone. You want your todo list to show up on your home screen? Sorry, to bad.

The Thunderbolt was a unique change from this user’s perspective. It was my first foray into the Android series, and I was both pleased and disappointed. The level of augmentation the user is allowed to make on the Android platform was far different from the “model T” nature of IOS. The Thunderbolt was Verizon’s first 4g phone, and in 4g coverage the phone navigated through websites like a foreign sports car. The downside of course, much like a foreign sports car was the Thunderbolt’s infamous many issues. Random reboots, bad data connectivity, locking up, the list of issues I had to work through with Verizon’s troubleshooting staff was long. The Sense UI was a joy to use, and very attractive, perhaps my favorite of the Motorola, HTC, and IOS interfaces. But a robust user interface comes at a price of reduced performance, and once rooted the Thunderbolt, with a rooted/modded UI, was much faster.

Enter the Motorola Droid 4: 8 megapixel rear camera, Slide out keyboard laser cut with back lighting, 16 gigs of internal storage, two 1.2 gigahertz processors and an ample gig of ram. Though upon first glance, I preferred the sexiness of the Sense UI, I found the performance and reliability of the Droid 4 to be quite good. No random reboots, excellent data reception, adequate call quality, combined with a slim size for a phone with a keyboard, makes for an excellent high end business phone. The Droid 4 also features the security protection of a phone designed to be used in the office, and an HDMI port, and docking station compatibility. The phone can be recommended as an excellent choice, for any student or professional, that would like to have the use of a full keyboard with the convenience of a candy bar multitouch smart phone. The only downside this writer has encountered is mostly aesthetic, the Motorola UI isn’t really my preference, but that is easily changed with third party software available in the Market.

Pandora and a History of its Freemium Business Model 1

By Jordan Marx, MBA

Chris Anderson, Editor-in-Chief of Wired magazine, coined the term “Freemium” to describe the changing nature of business models for content as it is distributed on the web. The theory contends that as the marginal per person cost of a

digital good becomes close to zero when distributed over the internet, the nature of a business’s economic model needs to change to encompass this new reality. A strategy therefore, has developed, in which an enterprise offers the service for free to many, in the hopes that a few will subscribe to a premium or ad free service, thus helping to subsidize the many that use the tuned down equivalent.  Pandora Radio, an internet radio company that specializes in streaming music tailored to an individual’s unique music tastes, is an interesting test case for this new business paradigm. The Freemium model, has evolved to solve the dilemma of users expecting digital content to be no or low cost.

This is juxtaposed with the problem facing many content providers. Some level of fixed and/or variable costs occur even in e-commerce. How does one provide a unique and useful service, for next to nothing in cost and still operate as a profitable e-commerce company? This is the dilemma facing many today. It is said that two to five percent of users will end up subscribing to the premium option, in a healthy Freemium enterprise.  

An Evolving Model

Pandora’s business model has continued to evolve over the last decade. The Music Genome Project was created in the late nineties by musician and entrepreneur Tim Westergren. Westergren conceived of  a radio format in which music could be continuously catalogued with over 400 different tags. Thus, one could evolve a radio in which a customer picked a favorite musician and from that choice, hundreds of different descriptive words would help to create a playlist that matches the musical tastes of the customer’s favorite musician. Originally, Westergren thought of Pandora as a technology that could be licensed to other companies, such as AOL or Yahoo. For four years, Pandora pursued this strategy with no luck. In a sense, this was a web 2.0 business with an older business 2 business paradigm, perhaps not quite right for a new media company. Pandora briefly switched to a subscription only service utilizing a pay wall that would cut off services after a user utilizes their free sample. Pandora would give a small portion of a free sample, such as ten hours of free service, and then charge for additional content.

An image springs to mind of a shopper at the local Costco sampling a cookie in order to decide whether or not the product, in this case the box of cookies, is worth its cost. The problem is there are real costs associated with the brick and mortar associated box of cookies example, and much cheaper costs associated with the marketing and sale of a digital product. The secret is the consumer is intuitively aware that the marginal cost of an online good is (or should theoretically be) close to zero. When the consumer listens to music, they know they can buy from I tunes, or they can listen to free internet radio somewhere else, or they can just listen to traditional radio, for free. The cost of replication and distribution is so low, many users won’t know or believe they need “your” product until they use it, and perhaps only then, they may decide to purchase content.

The problem with Pandora’s original business model is the need to convince the consumer they need the cookie, and with such a low marginal cost, it pays to give a product away, in the hopes they become convinced that in Pandora’s instance, ad free digital streaming music is worthwhile. Pandora’s new business model follows the Freemium strategy as described by Anderson. Users of Pandora’s services are many, and those that pay are few. The advertisements meanwhile drive much of the revenue in which Pandora counts on, while a small yearly fee adds additional revenue. Westergren is a big believer in the ad supported Freemium model. If an advertiser were so inclined, he could request of Pandora to “put this advertisement in front of men in their thirties, listening to rock music in Kansas”. Pandora and Westergren seem to understand Freemium is and will be the dominant business model that drives commerce on the web. Businesses such as Evernote, a cloud based note taking company, Drop Box, a cloud based file sharing company, and Pandora, have only begun to become profitable once they surrender their traditional conceptions concerning the need to maximize the profitability of each paying customer. In e-commerce, the economic theory of marginal benefit is king. After surrendering these notions and allowing for the marginal cost of user-ship to drive marketing, each of these companies have seen revenues increase. It is a paradoxical relationship, but the theme remains true for many large players in digital commerce.

The Value of Free

Pandora offers a unique customer value proposition. They offer an uncanny algorithmic ability to predict the music their customers want to listen to, and unlimited free musical content for those that don’t mind listening to advertisements. They offer this because they have faith the economics of the digital era will equate to a profit margin for hooked users that desire a better bandwidth equipped data stream, no ads, and the unlimited ability to skip tracks. This strategy, known as the feature-limited Freemium model, or FLF for short, allows the customer the time to get acquainted with the product in a way that the Time-limited Freemium model does not. The challenge associated with the time limited Freemium model, is that consumers switch to another product whose marginal cost is closer to zero, as opposed to paying for the content.

Is the Future Free?

The digital world has come a long way since the hemorrhaging of the more traditional methods of commerce on the web. The digital world is no longer divided between obtaining free content illegally, as in the case with Napster and the more recent issues with Torrent files, or conversely paying for each item at its retail non wholesale value, as if it were produced by a brick and mortar store. The true marginal cost of digital content, is so close to zero, that the benefits of an ad based revenue model with a pay wall for “premium” services continues to be a growing and sensible method of enterprise. Customers expect digital goods to be easily acquirable, and they don’t mind wading through an ad or two to get quality services at low/no cost value. The true challenge is how a small startup, in the face of recession, can pay for fixed costs, while trying to grow large enough to obtain the marginal cost benefit of the “digital product”. In a high risk economic environment, selling a free product may be the solution, but much like poker, it is high risk and all in.

For Further Reading:

Anderson, Chris. 2009, Jan. 31st. The economics of giving it away. The Wall Street Journal.

Gannes, Liz. 2010, Mar. 26th. Case studies in freemium: Pandora, Dropbox, Evernote,

Automattic and MailChimp. Gigaom. Retrieved from http://gigaom.com/2010/03/26/case-studies-in-freemium-pandora-dropbox-evernote-automattic-and-mailchimp/

Laudon, Kenneth, C. & Traver, Carol, Guercio. (2011) E-commerce: Business. technology.society. (7th ed.)  Upper Saddle River,  NJ: Prentice Hall

Niculescu, Marius F. & Wu,  D.J. 2011 May 25th. When should software firms commercialize new products via freemium business models? College of Management, Georgia Institute of Technology.

Rose, Charlie. 2010, July, 1. Pandora founder Tim Westergren. The Charlie Rose Show. http://www.charlierose.com/view/interview/11097

Even Zuck has got to Pay the Man! Reply

Everyone by now knows that Mark Zuckerberg will be one of the richest people in the world, but do you also know that he will have paid the highest tax bill of all time?

Zuckerberg owns Imagemany shares outright, and in 2005 received options to buy 120 million shares of Facebook for 6 cents a share. The shares are currently valued at more than $40 a share” (Forbes, 2012).

How is this profit taxed? According to Forbes, it is taxed as the options are exercised the same way that one would be taxed for any sort of compensation, at the hefty tax rate of 35%.

$1,500,000,000 in federal taxes

$500,000,000 in state taxes. That’s a hell of a lot of zeroes.

FIPO Countdown! T Minus… Reply

Mark Zuckerberg of Facebook

The WSJ is reporting that FIPO will hit. What is FIPO you ask? Just the grandaddy of all IPO’s coming to a NYSE/NASDAQ near you! But seriously, there will be Multi Billionairres minted this week, and anyone who has been watching the drama of the Facebook IPO story knows that this is going to be one of the hottest IPO’s in Wall Street History. How hot? Anywhere in between 50 Billion to 100 Billion in market capitalization. What was once an idea in a college student’s head, will soon be one of the largest companies on earth. Now, normal human beings cannot get in on the Facebook IPO bandwagon, but there are companies being traded on the NYSE and NASDAQ right now that have stakes in Facebook. What are there symbols? GSVC, and MSFT, come to mind, but there are more…

How will these companies benefit from a successfull Facebook IPO? This humble tech writer can only speculate, but watch the WSJ and Bloomberg next week for all the DOPE on FIPO.

(Full Disclosure, this author owns a few shares of GSVC)

Meet the Nexus, now for $99 1

The Galaxy Nexus A $299.00 Android smartphone on sale on Amazon for $99.

The Galaxy Nexus is considered, and rightly so, the premier android flagship smartphone. Samsung/Google’s Nexus comes equipped with the latest Ice Cream Sandwich operating system pre-installed, with none of that bloatware that weighs down other non nexus branded Android phones in the market. Also, in the smartphone world, big is in, and the Nexus certainly has that, sporting a 4.65 inch screen. As for hardware, the Nexus sports dual core processors with a gig of ram under the hood–I think this thing can handle angry birds….

And if you are into video, the camera shoots in 1080 p high definition.

But mostly, it’s one of the baddest handsets on the market right now, and Amazon is giving it away at $200 off the list price for a two year contract. Get em while they’re hot.