Top 10 Tech Predictions for 2012
I woke up this morning thinking about what may happen in the world of tech this year based on all the articles I have read and how I think companies like Apple strategize.
10. Media Companies will continue to suck while wasting more money on anti-piracy
These companies just will not learn. Everyone and their mother realizes that it is far better to watch a show downloaded from bittorrent than on one of the lame network websites with the same commercials repeated at every break, yet these companies conspire to cripple legitimate sites. Take Hulu. When that site started it was great. I loved going to hulu.com and watching old shows. When they added commercials I did not mind. It started to suck when the media companies decided that having all the content for ALL seasons of a show was not a good idea. Hulu then introduced Hulu Plus and the site Jumped the Shark. This site went from being the place I recommended to all my friends to one I have not visited in well over a year.
It is hard for these companies to realize that the gravy train is now over. Instead of fighting legitamate options they should work with them. I am sure a lot of people, myself included would rather watch the latest episode of Survivor on Netflix than on cbs.com, but that’s not an option. Faced with cbs.com or bittorrent, many people will choose the better experience which is NOT on the network’s website.
There is a tiny ray of hope. The service I am recommending these days is HBO Go. This service is the one I recommend to all my friends. I love being able to see Boardwalk Empire, the same night it is broadcast, on my iPad. HBO has always been at the top of their game and I hope more companies follow suit, but I have little hope that this will happen in 2012.
9. Netflix will continue to decline
We all know that splitting the streaming and DVD plans was probably among the 10 top worst business decisions ever. Netflix eroded brand loyalty, customer satisfaction, and share price all in one fell swoop. When the announcement first came I thought it was either the most brilliant move ever, or the dumbest. I gave them the benefit of a doubt and thought that maybe they had something up their sleeve that we were yet to find out. All the subsequent moves, including the Quikster drama has led me to the realization that this is it. Now Warner is going to force them to wait even longer for DVDs and Starz is still taking away their content. Look for more drama when the Starz contract runs out in February and get ready to short NFLX. So sad to see this given that they were the single best hope to bring some sense to the entertainment industry. We all want to stream movies and we don’t want to pay outrageous prices.
8. Apple TV will continue to suck
Whether Apple continues to just sell the current Apple TV or a new iTV integrated television is irrelevant. in the end it is about the content. Having to pay for each episode of a TV show is not something people are clamoring for. Maybe Steve had some great epiphany and Apple will surprise me, but I have little hope that the content war will be won this year. A Siri integrated TV may sound great on paper, but if that TV can’t control your cable box and you have to get all your content from iTunes, there’s little chance that people like me will be satisfied.
There is one bit of hope I am holding out for. What if the whole Netflix debacle WAS indeed a brilliant plan. See Apple doesn’t need or want DVD distribution, they just need streaming. Now that Netflix is so weak Apple can take all the money in their bank and make the perfect move against the media companies. The checkmate move for Apple is to purchase Netflix, pay the movie studios a ton of cash to get rights to more content and release this iTV with Siri integration. No one will use bittorrent if they can just ask their TV to play the latest Breaking Bad.
7. Corporations will begin to demand technologies not tied to Microsoft
As devices like iPhones and iPads and even Android devices start gaining more acceptance in the enterprise, companies will begin to see the error of choosing technologies like Microsoft SharePoint. Decisions like wanting to have a full Microsoft stack will finally be seen as less attractive and as these systems reach end of life companies will be sure to assess Webkit/open standards compatibility with any and all new enterprise apps.
6. Fragmentation of Android market will continue
There is no sign that manufacturers will streamline their product offerings and focus on building brands and a few good devices. I don’t know a single lay person that can name an Android phone. Everyone knows Android , but no one knows a single phone model or what the difference is between the models. Most of these users are guided by store clerks, just like in the PC industry. On the contrary these same people know iPhone 4, iPhone 4S and can at least tell you that 4s = Siri.
Manufacturers such as Samsung have built their business on hardware. They could care less about the whole user experience. They know how to churn out new devices at an astonishing rate and there are no signs of that slowing down.
5. Google Chrome will continue to gain marketshare at the expense of Firefox
Sadly Firefox has become today’s Internet Explorer. Years of features and bloat has taken their venerable browser to the point where it can no longer be compiled in 32-bit Windows. Many people still swear by FF and the competition from Chrome has led to the Mozilla team changing the way they version their browser and moving to automatic updates, but I’m afraid it’s a little late. I believe Mozilla will use this opportunity to start over with a new browser, maybe one based on Webkit. Only time will tell.
4. iOS will continue to surge in marketshare
Two factors will help iOS continue to grow thus fueling the whole ecosystem.
1) Phones: As more Adreoid contracts come due, a lot of those users who were attracted to a “cheap” device will realize how much better their iPhone friends live life. I have yet to meet anyone who owns an iPhone who is not satisfied. The same can’t be said for people I know with Android phone.
2) Touch Pads: iPad still has no true competition. Apple is so far ahead this is not even a fair fight. Most fortune 500 companies are looking to deploy or have deployed iPads. I know of companies that have deployed iPads to their entire salesforce. iPads are now on planes and boardrooms across america. Corporate users are loving their iPhones and welcome devices that are instant-on and have great battery life. Consumer love and enterprise acceptance means huge win for Apple and iOS in 2012.
3. Mac marketshare will continue to increase at the expense of PC manufacturers
Corporations are realizing that Apple devices can function well in the enterprise. They are reaping the benefits of reduced support costs. Many corporate apps these days are web based. This fact alone allows companies to deploy Macs and have them work well for their users. I know a Microsoft centric company that has allowed departments to get Macs as long as they did not have to support them. Users have taken the opportunity to ditch ugly, slow HP laptops in favor of MacBook Airs and Mac Book Pros.
Companies are also looking at products that will allow users to use remote windows desktops for those applications native to Windows while users get to benefit from fast 64-bit machines that are almost instant on with SSDs and hardly ever need rebooting unlike their Windows counterparts.
2. Adroid touch pads will continue to suck
While Android phones have been successful mainly because the OS is free to manufacturers (in my opinion). I don’t believe we will see the same scenario in the touch pad arena. While Android phone manufacturers were helped by mobile carriers’ need to offer phones where they could install their crapware, the same is not true of touch pads. There is no overarching entity that can subsidize the development of these devices so that manufacturers can flood the market. No subsidies and lock-ins means that no one will by sub-par devices. Amazon’s Fire has seen some early success, but this is due to the loss leader strategy they are following. Companies like Samsung can’t sell a device below cost. The only other companies that “could” offer a touch pad are Facebook and Google. I don’t see Facebook doing it, and I don’t think Google would heavily subsidize a touchpad just to gain marketshare.
1. iPad 2 will be kept on the market at a lower price when iPad 3 is released
The Kindle Fire seems to be off to a good start primarily because of its price tag. I think Apple will mirror the iPhone 4/iPhone 4S pricing by offering the older model at a $100 discount. The iPad 2 will still be at a premium in terms of price, but iPad 2 is hands down a better device than the Kindle Fire. This lower cost may be enough to fight the Fire while helping to keep other manufacturers at bay.
User Centric Experience at its finest
I recently had the opportunity to fly Virgin America for the first time. I had read about this airline since before it was approved for commercial flights in the US, so I was eager to see what it was all about. I came away feeling very pleased with the whole experience and three things stick out in my mind:
- Efficiency
- Customer Focus
- Great Design
Efficiency
When I arrived at the Virgin America check-in counter a few things struck me:
- there was a short line
- there were only a few check-in kiosk and they weren’t all in use
As an industrial Engineer it’s second nature for me to analyze a process. I knew there had to be something different about Virgin right away. There was no mass chaos as I am accustomed to seeing at almost every other airline.
What could possibly contribute to this harmonious sight?
The first thing is the kiosks. As someone who has done his fair share of flying I know that the User Experience of an airline kiosk can vary greatly. At Virgin I could not ask for a more streamlines process. Swipe a credit card and your information comes right up. Select the number of bags to check-in and print out your boarding pass. Contrast this to the American Airlines kiosk which has 3 ways to find your information and if you are flying AA through another carrier good luck figuring out what your record locator is.
Like most other airlines today, at Virgin you do have to pay to check-in a bag. Unlike other airlines however, for $25 you can have up to 70 lbs. in your luggage. I am sure this is a huge contributor to the fact that I saw a short line at the check-in counter. How many times have you seen people repacking at the airport in order to meet the 50 lbs. limit most airlines have.. No one wants to pay an extra $100 or more because they packed an extra 10 pounds in their luggage. It is very common to not only see people repacking their luggage at the airport, but to see passengers argue with airline staff when they are over the limit.
Customer Focus
The Virgin boarding pass is a welcome change to the hideous boarding passes that are common in the industry.
Not only is it smaller than a traditional boarding pass, thus saving paper. It actually has only the information you need, fantastic. I am not the only one to have noticed.
That ticket was made for us, not the airline. Someone actually sat down, figured out what we need to know and laid it out in a clean concise form factor. Beautiful. Oh, and that boarding pass is also your baggage ticket, one barcode to rule them all.
Who here likes listening to or watching the flight safety information before the flight departs? I do, well, I do on Virgin America. The flight safety video was animated and really well done. It was actually entertaining. Again, someone, like me realized that all passengers would have to endure the flight safety information video and decided to actually make it pleasant, that is simple customer centric design.
The in-flight entertainment system which includes live TV, on demand movies and tv shows, music, games and in-flight text chat with other passengers is top notch. I know this alone would keep my kids entertained on a 6 hour flight, no need to let them use the iPad 
One negative I would note about the on demand movies and TV is their cost. At $3 to $6 I find them kind of expensive. I’ve always been turned off to the constant nickel and dimming when it comes to the airlines. I would much rather they increase the cost of the ticket by $20 and include all these “extras” than ask me to take out my wallet at every turn.
Virgin America also has in-flight wifi, but yeah it’s at an additional price. They do have mobile device pricing which is a few dollars less, but an iPad is considered a full computer so no break.
That entertainment system has another trick. You can actually use it to order food right to your seat. They have a nice assortment of items on the menu, but overall I have to give Virgin a negative rating for not even including a cookie in the price of your ticket. Here Jet Blue wins. I have always loved that about Jet Blue. At least you can get one or 2 snacks from those guys and the quality of the food is really good.
Great Design
I’ve already spoken about the great design of the boarding pass and that’s the type of quality to expect from Virgin America’s design decisions. Prior to flying VA I had noticed that their website was extremely user centric. If you do a search you will note that the departing city is auto populated and if you leave the site and come back a few days later and perform a search, the last criteria you entered will be auto populated. It’s these little things that count.
When you walk into a plane you are greeted by a pleasantly illuminated modern interior. You kind of feel like you are walking into a Star Trek movie set, but its actually a welcome change from the drab interiors most airlines have.
Another well design object at Virgin America is the remote used to control the TV. When you first sit down you may wonder how you control this screen in front of you. While the screen is a touch screen, hidden beneath the arm rest is a tethered multi-function remote. In the arm rest it serves the typical functions you would normally see on seat controls like volume up-down, but when you take it out you notice that it not only has more functions on that face of the remote, but underneath it has a full keyboard and a credit card reader to pay for the food and on demand offerings.
Thank you for flying
No airline is perfect. I can say that there are things I like better about Jet Blue and there are things I love about Southwest, but all in all I can say that Virgin America really impressed me. From the simple check-in and 70 pound luggage limit to the efficient and effective boarding pass and the great in flight entertainment system. One thing that you have not heard me say is anything good about the legacy airlines. In my mind they have no redeeming qualities. They are bloated, inefficient, rude and the polar opposite of customer focused. My dream is that one day there will be no American Airlines, no Delta, no United, no Continental and a new era in air travel will arrive. An era where these newer players get to compete on service and where efficiency, customer focus and design are used to create a measurable differentiating advantage by all airlines.
Branding: EVO, Droid X, Captivate, Galaxy S, Epic, etc. vs iPhone
This morning while reading Crunchgear I came across a review for the Samsung Galaxy S. The blurb to the article made my brain hurt.
There are a total of five Galaxy S-based handsets: The AT&T Captivate, which I have here in my hand, the T-Mobile Vibrant, the Verizon Fascinate (identical to the Vibrant except for an LED flash), the Sprint Epic 4G (with slide-out keyboard), and the “vanilla” international Galaxy S. They’re much the same but have some features setting them apart, mainly in the body department. Even so, the experience on one should be pretty similar to the experience for another, so consider this our review of the Galaxy S line — with the caveat that your mileage may vary slightly on the other models.
All the models listed there are for ONE phone from ONE company. This is nuts. Now if you start adding all the other Android phones in the market like EVO, Droid X, etc. you start realizing that these companies have no chance against Apple marketing.
I consider myself a techie and I can hardly keep up with all these names, imagine how well the average Joe keeps up. The only unifying brand is Android and I dare you to ask a lay person what that is. I can just imagine the blank stare. Now I know from experience that everyone knows iPhone. Simple, one company, one brand, one phone. Did these people not learn anything from “Intel Inside.” This is basic stuff people. A friend posted a picture of his new Droid X and what brand stood out most to me when I saw the picture? Verizon.
If Google wants to have a shot at Apple, it should get some marketing behind Android and work with device manufacturers to unite under the Android brand instead of creating one phone with 5 names. When I saw Palm not focusing on one simple Pre model I saw their end, I feel like a fortune teller again with the mess that is the android device marketplace.
Competing poorly outside your core is not the way to win
On Twitter today @paul_irish shared this infographic which illustrates why the legacy carriers can’t effectively compete with low-cost airlines.
The information on this picture is nothing you can’t learn from taking any business school class, but what is interesting is how something so obvious is not put to good use. I have felt for a long time that by trying to compete with the low cost airlines, the legacy airlines are “stuck in the middle” as Porter suggested. Today these companies are neither differentiated nor low cost.
Bailout after bailout the legacy airlines pursue the same failed strategies. They continue to cut costs at the expense of service and I have noticed in my travels that the low cost airlines continue to outperform. The same was true of the US automakers and we see where that led.
Instead of trying to compete on price, legacy airlines should look for ways to leverage their size and put up a good fight against low cost airlines. A “fly anywhere” for a month pass from American Airlines is surely better than one from JetBlue. How about giving passengers who have to go through hubs the flexibility to book their connecting flight on a different day? I think everyone would see the value in being able to take a detour for a few days in Chicago on their way to Indiana. This perk would win favor with passengers while only increasing airline costs marginally (for additional baggage handling, automated check-in, etc.).
When a company sees itself losing sales to someone following a different generic strategy it can’t defend itself by trying to compete using the competitor’s strategy. It needs to get better at their strategy when on the surface it appears they need to abandon it.
Could Target ever beat Walmart on price? Probably not. Instead it chooses to have reasonable prices and compete on differentiation tied to style and trendiness. Dell has been trying for a few years to compete with Apple on style and has not done any better. When Apple was faced with extinction in the 90s instead of trying to compete on price they chose to go after innovation which was their core and is why today they are the model every company tries to copy. If you look at the early 90s, you can argue that it was the CEOs who lost that focus at Apple which put it in the predicament in the first place.
So when someone is competing with you don’t blindly abandon your core strategy. Look for ways to leverage what you have because your competitor won’t be able to effectively counter a strategy foreign to them.
The problem with SKU proliferation
TechCrunch has a short post on the number of models of handsets Nokia and Sony Ericson have on their site.
Why Nokia and Sony Ericsson are failing
For reasons of market segmentation and distribution strategies electronics companies choose to spin new almost identical models of products which on some marketing plan may seem reasonable, but which in fact tend to confuse the customer and add operational overhead.
Whenever someone asks me about a laptop I can quickly tell them about all the Apple models, not only because I am a Mac user, but because remembering the permutations is incredibly simple. MacBook, MacBook Air, and MacBook Pro. It’s not hard to remember even for a person who tends to forget things, like me.
Look at companies like Toyota and Honda and you will find the same thing. Very simple, clearly differentiated models each targeting a specific segment of the market.
Large consumer manufacturers should take note and not create a new indistinguishable model just to sell a “different” TV at Costco. The iPod you can get at Costco and Walmart are in fact the same ones you get at Best Buy or at the Apple store. Simple for the company and simple for the consumer.
Apple embraces accessibility and helps everyone in the process
Most people don’t know that Macs are by default the most “off-the-shelf” accessible computers sold today. Every single Mac comes with accessibility features for the physical and motor skills, hearing, and vision impaired. This means that a blind person can walk into any Apple store and use any computer without installing any software. They can even carry all their settings on a USB drive so that their customization can travel with them. On Windows computers these features need to be purchased separately from third parties and as such lack the level of refinement and availability of the Apple solution.
Since 2002 Apple has been investing on accessibility on the Mac platform, but in the last year it has been taking steps to make it’s other products namely iTunes and iPods more accessible to the blind.
Today Apple demonstrated how a company can use accessibility to it’s advantage. By integrating Voice Over into the latest iPod shuffle not only did they make the product accessible to the blind, they made it accessible to everyone. Since the shuffle has no screen the product has always been marketed as one where the listener has little control of the listening experience, hence the Shuffle name. Now that the device has Voice Over a listener can select a specific play list allowing them to customize their experience to their current mood.
Making Macs accessible led to making iPod Nanos accessible. This work led to Voice Over in the new iPod Shuffles giving Apple another competitive advantage. A short sighted company would not invest in this feature for a product line where they already own the market. But at Apple this work will not be limited to the iPod line. I am sure this trend will continue at Apple because it makes sense. The iPod “experiment” is just baby steps.
Currently the iPhone is the least accessible device they make, but think of what text-to speech can do for Apple. Imagine your phone reading your RSS feeds and email while you drive to work or speaking the name of the caller so that you don’t need to take your eyes off the road? The iPods currently don’t have enough processing power to actually generate the speech real time, Apple actually does the work on the computer prior to loading the music on the device, hence the different voices depending on whether the iPod was synced on a PC or a MAc. However, the iPone’s CPU is a lot more capable and the next version will be even more so allowing Apple to explore these capabilities on the device.
Apple, unlike Amazon and the Author’s Guild, today demonstrated how a company can embrace accessibility and not only help those in need, but improve its product along the way.
Here is a video of the new iPod Shuffle in action. (Quicktime Required). More info can be found on the Shuffle page.
Marketing to Hispanics
I came across this article today and I thought it had a lot of great insight on marketing to the growing Hispanic population in the US.
Goya is Big, But Not Great (Yet)
I have felt for a long time that many companies miss the boat when trying to market to hispanics especially English speakers. Marketers tend to want to put one generic message that “should” apply to all hispanics, but they miss out on the big picture. In my experience, a lot of this has to do with not really knowing the population. It is one thing to study something, it is another to live it. Companies should focus more on diversifying their workforce to bring in the type of diverse talent needed to reach this market.
There are amazing organizations like NSHMBA and SHPE where companies can attract and interact with top talent. Just like in any relationship, a company can’t expect to just jump into a new market and be successful. First it has to want to slowly get to understand the segment by bringing into the decision making process those who have the insight that will allow the company to be successful.
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