Forks in the Road Ahead?

By | July 17, 2012
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Two interesting pieces in the past 24 hours that, almost in passing, look at a growing conundrum for Google: how to cope with the fact that Android is largely a profit center for Samsung and nobody else.

Horace Dediu at Asymco (From bad to worse and from good to great) looks mainly at how the mobile world’s value is mostly going to Apple. Samsung is the only other one making any money out of the whole thing:

In absolute terms the iPhone franchise created $244 billion in value while Samsung created $83 billion. The others destroyed $37 billion.

Elsewhere Horace has looked at Android economics (The Android Income Statement among others) and concludes that “Google’s benefit from the platform is modest. He concludes:

In contrast, Samsung, and Samsung alone, is benefitting greatly. It could even be said that today Samsung is the only Android profit engine.

This seems to be the case. Which prompts several questions, some of them addressed in the comments. Is Samsung likely to continue merely taking another person’s operating system, free though it is, and adding a skin or two? How does Samsung feel about sharing a brand — Nexus — with competitors like Asus?

Jean-Louis Gassée in his weekly column for the Monday Note takes a look at this (Business Model Dances). Google, he argues, have not necessarily followed Microsoft by extending vertically with the Nexus 7, but he does believe that “the gentle folks at Samsung are not going to take this with a smile and a quick genuflection.”

If they’re not cowed by Apple, they certainly aren’t going to let Google eat into their tablet business. As for phones, there’s Google’s $12.5B subsidiary, Motorola Mobility, another irritant for Samsung and other Android smartphone makers.

It’s interesting to consider whether Samsung think that the Nexus 7 is a challenger. I tend to think they’re more worried about what’s behind it: lots of content.

As Jean-Louis says, it’s going to be interesting.

Ending the Tyranny of the Telephone

By | June 26, 2012
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How do we deal socially with the new technology around us? How do we come up with new norms, wrestle with the loss of privacy, deal with the way technology seems to force us to change the way we live, work and communicate,?

It’s not a new question, but I feel we need a new answer. We tend to focus on the intrusiveness of new technologies, and agonise over how they’re changing society, while failing to notice that the old technologies were just as intrusive. In fact, I’d argue that with each advance of communication technologies, they get less intrusive rather than more.  Our problem is that we have memories the size of hamster droppings.

Imagine a device that dominates every desk, every home, is on every street corner and train platform. Where we are so conditioned to answer its call we get upset when it’s left to ring. Even when we’re eating, praying, watching TV, asleep. Where we are expected to identify who we are, where we are to a disembodied voice at the other end, to run off searching for someone at its behest, jot down messages on its behalf.

Yes, of course I’m talking about the telephone. An awful device that intruded upon our conversations, our reverie, our concentration, our world. What is remarkable, then, is not how much we’ve submitted to technology but the speed with which we’ve embraced a different technology that better suits our world.

As quickly as technology allowed it, we have started ditching the idea of getting each other’s attention through voice. First we adopted the cellphone, but when users figured out they could use it to send messages by text or SMS instead, the telephone as a predominantly voice-driven device was doomed. It’s not that we don’t want to talk to people; it’s just that we want to ensure that the time and place are  convenient for both of us.,

The truth is that the telephone imposed its tyranny on us and dominated our lives so much that we still can’t let go of the idea. We still call our mobile devices ‘phones’ even when that’s no longer what they’re primarily designed to do. (I have a mobile phone that is as big as a croissant; this was not something that the ubiquitous ads touting its glories will ever show being held up  to the ear.)

Now, in 2012 most mobile phones are not used as phones primarily — if at all. Australians, for example, are making 12.5% fewer phone calls than five years ago. People have been giving up having a landline phone: South Africa’s Telkom, for example, has lost more than a quarter of its fixed line customers since 2000.  We have thrown off the shackles of a 140 year tyranny remarkably quickly, realising just how intrusive the telephone was.

Yes, we’ve replaced it with technology that can be antisocial. We download a lot of data over our device, and much of that data is personal, for our eyes only, or gaming with others not present. We ignore those we’re with, preferring the absorption of the small screen to the social complexity around us. But we’ll figure this out. First, we had to deal with the tyrant. Nowadays, in this mobile spring, look around you differently: listen for the absence of ringing phones. For once we have the technology — SMS, the instant message, the tweet, the email–to retrieve our lives.

My croissant sized phone, for example? It has a feature that, when I turn it over, mutes all incoming calls and sounds. Now that’s civilized.

Singapore startup Viki aims to take local TV global

By | May 29, 2012
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Viki has long interested me and their deal with Warner offered a news peg: 

Who would want to watch a South Korean soap that was a flop back home?

Lots of people, it turns out – something that Singapore-based startup Viki feels vindicates its business model: an ad-supported streaming TV and movie site where unpaid fans add the foreign subtitles.

“We call it content arbitrage,” said Razmig Hovaghimian, Viki CEO and co-founder. “Ninety percent of content is trapped within borders. We’re taking things that aren’t travelling and making them go places.”

The service plays on a number of trends both in Asia and worldwide: a passion for watching video over the Internet; a growing interest in content from other countries; and the emergence of more sophisticated software to spread the burden of laborious tasks like subtitling.

Viki provides a platform that pulls together two traditional strangers: broadcasters and other video producers who license out content to territories where there are no existing rights with local broadcasters, and volunteer “fansubbers” who translate and write subtitles in any language they want.

Viki then inserts ads and provides the streaming service, and shares the ad revenue with the broadcasters.

Take, for example, that Korean flop, “Playful Kiss”. Ratings sank below 5 percent when it was aired during primetime in Korea in 2010, says Hovaghimian, when a top drama might capture up to 30 percent of viewers. But on Viki it topped the site’s charts for several months and was translated into 56 languages.

The company behind the show made “hundreds of thousands of dollars” in ad revenue and was able to secure rebroadcast deals with 10 countries it would otherwise never have reached, Hovaghimian said. The broadcaster wasn’t eating into existing audiences, it was finding value in new ones. “We’re increasing the size of the pie for you, we’re not cannibalizing,” he says.

Rest of the story: Singapore startup Viki aims to take local TV global | Reuters. 

Samsung and phone companies [BBC]

By | July 28, 2020
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This is a piece I’m recording for the BBC World Service. It’s based loosely on my piece about possible limits to Samsung’s impressive foray into smartphones. 

The interesting thing about covering technology for a living is that while pretty much every company within the sector is very, very different, all are, or want to be, the same.

Take a mobile phone manufacturer like Samsung. These guys are huge and have gotten huge very fast. In the first quarter of 2011 they shipped fewer smartphones than Apple, Nokia or Research in Motion, but in the most recent quarter shipped more than any of them. Needless to say they’ve very happy. But actually this success presents them with a huge problem. Because it turns out that making cellphones isn’t enough.

First is the problem of the software that run Samsung phones . After all a phone is just a chip or two, a screen, a battery, a microphone, a speaker, a case. Without software they just make useful paperweights.

Nearly all Samsung’s phones run on Google’s Android operating system. Which is free. Except of course it’s not. Because Google knows that the software is in some ways more important than the hardware. Ever tried to get an Android phone going without signing up for a Google account? Can you hear the clink clink of ad revenue dropping into Google’s pocket?

Samsung is an excellent maker of things, but not very good at making software. So it saves money, time and the groans of dissatisfied users by running Android on its phones. But the company  knows that this is not a good way to go in the long run, because you may end up like one of those PC makers back in the 1990s. What we call a commodity manufacturer, indistinguishable from other PC manufacturers, with price to reflect it.

So part of the problem for Samsung is not hardware but software. Then there’s another problem.

When we used computers in the old days they pretty much stood alone. Microsoft sold us Office, maybe a game or two and the thing sat alone in the corner of the room gathering dust. Nowadays every device is connected to the Internet, and we expect to be able to use that connection to interact with other people, download software, play games andbuy stuff and generally facilitate our lives.

What supports all this is an ecosystem. Payments, catalogues, developers, marketplaces, digital goods. Think Amazon. Think Apple’s iTunes and AppStore. Every Samsung phone connects to this world but most do it without Samsung seeing a cent.

Of course Samsung is trying to fix this. It has a store, it has content, it’s even hoping people will buy a smart TV that’s connected to the Internet and will let you move stuff between a Samsung TV and a Samsung smartphone.

The trouble now is, everyone wants this. A mobile phone maker wants to be a content seller, a search engine wants to have its own cellphone and operating system, an online store wants to sell its own tablet, a tablet maker wants to own its own network. No one player with big dreams can afford not to think in terms of owning the whole nine yards—the whole chain in which we the consumer live. To settle for anything less may end up meaning you settle for nothing, as just a commodity supplier of hardware, or content, or software to the others.

This is great for me as a reporter because every step takes us into uncharted territory. There are no maps for this anymore, and it will only get more interesting. 

ZTE confirms security hole in U.S. phone

By | May 29, 2012
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This is a piece I wrote with my colleague Lee Chyen Yee on the ZTE vulnerability. 

ZTE Corp, the world’s No.4 handset vendor and one of two Chinese companies under U.S. scrutiny over security concerns, said one of its mobile phone models sold in the United States contains a vulnerability that researchers say could allow others to control the device.

The hole affects ZTE’s Score model that runs on Google Inc’s Android operating system and was described by one researcher as “highly unusual.”

“I’ve never seen it before,” said Dmitri Alperovitch, co-founder of cybersecurity firm, CrowdStrike. The hole, usually called a backdoor, allows anyone with the hardwired password to access the affected phone, he added.

Read the rest at ZTE confirms security hole in US phone.