Tuesday, November 26, 2013

Why the Project Ara will never take off?

Google's Motorola Mobility division and 3D Systems, a maker of 3D printing technology, on Friday said they had entered into a multiyear deal to create a platform for designing and distributing components for Motorola's Project Ara. Project Ara represents Motorola Mobility's attempt to bring the relative openness and extensibility of Android software to hardware. It aspires to be "a free, open hardware platform for creating highly modular smartphones."
Project Ara aims for Lego-style durable mobile phone

There are however some principal problems with this idea.

  1. First of all, the level of customization will be limited by the common design of the phone. While users of traditional phones will have wide choice of phones e.g. in different design and sizes, users of project Ara phone will have just “onesquare shape size that fits all”. This is in direct contrast to the original idea of customizability.
  2. Second, the level of customizability will be limited by the number of parts available on the market (and number vendors that sign to this idea). Users of traditional phones will have the option to select e.g. phones with extremely high-resolution cameras (like those from Nokia), while most definitely not all these components will not available in the form of Ara phone components (for example, Nokia will very unlikely support the platform endorsed by its direct competitor).
  3. And third, also the durability of such a phone is in question. If the market with Ara components will not take off, users will be very likely forced to abandon their Ara phone puzzle in exchange for newer and more advanced technology.
And last but not least. These components are supposed to be designed and produced by phone manufacturers. But these companies have indeed no reason at all to support a product which, if successful, will decrease their market by two thirds.
Custom printed circuits will not change a bit on these reasons, not to say that the biggest problem is not to print customized circuits, but to design them.
In summary, Ara phone is an interesting idea which will however never take off.

Thursday, November 21, 2013

What is wrong with Samsung smartwatch? How to make smartwatches really fly?

Written for Start2Cloud.com.

Samsung says it has sold 800,000 of its widely panned Galaxy Gear smartwatches. At least, that’s the word from Reuters. What is Samsung doing wrong? And why this segment didn’t took off yet?

Smartwatches won’t sell until someone figures out what they’re for. The title of today’s article in Wired speaks for itself. So, what are smartwatches actually good for?

Principially, there are two main use cases in which smartwatches have definitely its place on the market - and in our lives:
  1. First, the display of smartwatches can be put into our view much easier than display of any other consumer device, and this is true even in situations when our hands are busy doing other things. Smartwatches are unique in this aspect, comparable only to smart glasses, which however don’t really exist on the market yet.
  2. Second, the act of glancing at our watch is a commonly accepted social custom, while the act of removing our smartphone from the pocket and looking on it during conversation is (still) perceived as rude. Here again smartwatches take the lead over smartphones, tablets and other devices.
On the other hand, we must calculate also with their limitations. Because of their small display size, smart watches are not suitable for displaying a full fledged “information cockpit”-style screen we know so well from our smartphones, and they are also not good for any interaction. They are ideal to display just one piece of information at the time, and because there is no space for more, this piece must be indeed selected very carefully. It should be information that is relevant to our actual situation - the most important piece of information we need at this particular moment. This information can be current time, time to our next meeting, short message that just arrived - and that’s just it. Smartwatches are not suitable for displaying too big text, and are also inherently inconvenient for any interaction. This functionality should thus be solved via other devices, which will be work together with smartwatches; for example, if I remove my smartphone from the pocket, my phone should display the same message as my smartwatch does, but with additional options to display more text, more details like pictures, and indeed with ability to conveniently reply.

In other words, smartwatches definitely have place in our world, but only if they are designed with respect to these limitations.

Those manufacturers who will keep in mind the rules above are on the right way to succeed - and will sell billions of devices instead of just hundreds of thousands.

Monday, June 24, 2013

Will Facebook Reader threaten traditional newspapers?

Written for Start2Cloud.com
According to the Wall Street Journal, Facebook is working on a mobile service that gives users personalized news in a very attractive graphical form. The service is called internally Reader and reminds successful Flipboard service that allows users to browse news of participating media as well as current updates published by our friends.
The original idea of Flipboard came from the brainstorming of its founders, who thought about how would the web look lite if they could design it from the ground up. The result was resembling a color printed magazine, without any windows, but with full page pictures, in which users browse in a very natural way by turning pages just like in a printed magazine.

Facebook COO Sheryl Sandberg recently said that every team within Facebook is now focused on development of mobile applications. The company is increasingly focusing on mobile services as it is the area that urgently needs to increase advertising revenue. In a situation where people are increasingly using smart phones at home and at work Facebook has to call for a fundamental change in its corporate priorities. If Facebook succeeds in mobile services, it can reach out to its users through highly targeted advertising virtually anytime and in any situation. If it however fails here, it will leave this lucrative segment to other players.
At this moment it seems that Facebook mobile strategy works well. Facebook "owns" one of every seven minutes PC users spend on the internet, and one of every fifth minute of users who access the Internet from mobile devices. Mobile use of Facebook clearly grows, but what is even more positive for Facebook is the growing revenue from this area. Facebook now gets 30% of its income from the mobile serment, which compared to zero in the time of Facebook's IPO is a truly excellent result.
Facebook Reader is likely going a similar direction as the recently launched Facebook Home - it is a full-screen skin of Facebook interspersed with interactive advertising. In comparison to Facebook Home, Facebook Reader can be for its users more useful and less obtrusive. And that is exactly what Facebook wants to achieve - to dominate the area of mobile devices, and through this to dominate the time of its mobile users.

Monday, June 10, 2013

Apple iRadio marks the end of music industry in its current form

Written for Start2Cloud.
Today, Apple officially unveiled its new iRadio service - free internet radio broadcasting personalized stream of songs funded by advertising. At first glance, it is not no breakthrough; there are already numerous similar services on the market - let’s name for example Spotify, Last.fm, Musicovery, Google Play Music All Access, and especially the founder of this segment, the Pandora service. Yet this step is very important, and it is because of the one who makes it.
Apple's new service iRadio
Apple iRadio is a classic proof of the claim that if two people are doing the same thing, it's not the same. The importance of iRadio is not in its innovativeness (by the way, Pandora offers a similar service for 13 years), but in the power of the Apple brand, which can accelerate, and eventually promote this significant change in the mass market. No one else has the power to force changes in the habits of millions of music listeners so dramatically and quickly, just like Apple. Apple is not only the market leader in IT and consumer electronics, but also the number one in online music sale. Its iTunes Store is since April 2008 the largest music retailer in the United States, and since February 2010 the largest music retailer in the world. Apple will compete in the new market not only with other steaming music competitors, but also with itself. It will cannibalize its own sales of online songs - the more audience Apple manages to get to its iRadio, the less songs it will sell.

Apple is however forced to take this step, because it can not ignore the ongoing general music industry transition from sales of albums and tracks to sale of services. Sales of songs has been declining since 1999, and during this period fell from $ 38 billion to 16.5 billion last year. If Apple did not build its position in emerging markets in time, surely someone else would, and Apple would have missed its chance. By the way Apple is not the first company which decided to cannibalize its existing markets. A similar step was made by Internet bookstore Amazon.com, who reacted to the decline in sales of paper books by developing its own e-book Amazon Kindle, effectively accelerating the paper books decline.

Market of the new music industry will combine revenues of two major markets: Market of sales of tracks/albums and radio advertising market. The size of the second market is estimated at $ 14 billion per year (ie, only slightly smaller than the current market of sales of songs), and in addition, this market has not yet been affected at all by the digitization process. We should underline the word yet, because this is what can Apple change quickly, because of its great market power. In fact, it can change the radio advertisement market in a very similar way to how the company has influenced the music industry with its iTunes Store. As a result, Apple may substantially speed up the already long-going process of extinction of the music industry in its current form, based on sales of music tracks, and contribute to its faster transformation into a new form based on the sale of subscription services and services funded by advertising.

Recall on this occasion one more interesting thing: Apple enters a new market for the first time since the death of its co-founder Steve Jobs. As we can see, surprisingly, it is not the smart TV market, or the market of smart watches, which were so widely speculated about. It is very likely that Apple is working as well as products for these markets we mentioned, but apparently it has been unable to progress in these segments fast enough, so the streaming service came out first. In any case, all this development only confirms the closed and secretive nature of Apple’s business.

Crowded but growing market of streaming music
Therefore Apple is now entering a crowded, but growing market of streaming music and will compete with established players such as Pandora, Spotify or Google Play Music All Access, and also in addition with classical music radio stations - and indeed with itself. But regardless of who will ultimately be the winner of this battle, one thing is certain. The year 2013 will be written in history as the year when the music industry actually died in in its current form and was replaced by significant new services based on the new paradigm of personalized services.

Wednesday, April 17, 2013

#bitcoin - Would it be possible to create a mining algorithm that would promote general useful activity and not just consume 1 GWh a day?

Bitcoin mining
Each currency has its costs,and for example in currencies that need bank of issue and various other institutions to exist, it is completely understandable. Surprisingly, however, its significant costs has also the virtual currency Bitcoin. Server Blockchain.info estimates that "mining" of currency Bitcoin, which is in fact the search for blocks of numbers that will succeed in certain clearly defined test, consumes daily 1 005,59 MWh.
Only the of electricity thus costs modern "gold diggers" $ 150,000 a day. Even so, it is a highly profitable business, because the dredged exchange is $ 470,000 - of course depending on the current exchange rate currency. If the currency will fare badly, this business can immediately turn into a loss.
The easiest way to get money is to start an additional process in your computer that utilizes its otherwise unused computing capacity. Today, however, by using this route of mining the cost of the energy exceeds the value of the dredged currency. Professional miners therefore use special computers, using either graphics processors that are actually parallel computers, or even ASICs (Application Specific Integrated Circuits) - specifically developed integrated circuits. Like many times in the history of real gold rushes, it’s those who are supplying the miners that are finding the real riches. Perhaps we can at least enjoy that, unlike during the real golden fevers, Bitcoin costs only the energy and money, not lives...
But that's a small relief, if we realize that this whole market that consumes large amounts of energy, engages a lot of people and even creates specialized segments in the computer market, is entirely artificial. One would say: what if all these resources and energy have been used for something meaningful? For example, to feed the poorest people in Africa; to create educational activities for the poor people in the developed countries; for the prevention of drug abuse; or on vaccination against infectious diseases?
Logical question that comes to mind, why creators of Bitcoin currency invented so complicated and energy-intensive algorithm of mining? The basis of each currency is its credibility. Rulers and governments have it easier, they may for example declare that they will accept taxes in their own currency, and this step alone makes their currency useful and valuable  But hardly anyone can accept an offer from a stranger, who does not have an existing trust (or power over a group of people, such as a ruler) and starts selling the currency, which he declares that he owns. The principle of "mining" solves the problem quite well. It gives everyone the opportunity to create the currency under certain specified conditions, and thus follows the historically proven examples of mining precious metals.
Bitcoin is after his recent problems with volatility probably already written off: right now, it is suitable nor for investments, because it can quickly evaporate, nor for transactions, because they can currently take so long that the currency value changes significantly during the transaction. But certainly there will be new virtual currencies to follow, and these currencies can learn from current problems of Bitcoin. And it is quite possible that they will also come up with new ideas in the field of "mining" the currency.
For example, is it really necessary to use for mining only those algorithms that have no real usefulness? If we think about the problem more closely, we see that there may be ways to combine mining with certain beneficial activities in our real world. If someone came up with such a project, his virtual currency would actually sponsor worthwhile activities, since these activities would suddenly could be performed for a currency convertible with dollars. In all probability also the currency itself would benefit from such an philosophy, as it would become endowed with much more trust than the currency based on merely abstract algorithms. This mining would be difficult to define and even more difficult to control, but the result could however be a real influx of money into areas that need it most. I am convinced that sooner or later someone will come up with such a project - and will succeed.

Thursday, January 17, 2013

A seemingly small change in Facebook functionality will trigger an avalanche of huge disruptive changes

Let us predict the main consequences of yesterday’s move of Facebook into VoIP: they will go far beyond those for Microsoft and Skype. Facebook's move it will mean nothing less than merging the entire VoIP, messaging, and indeed also mobile telephony into social networks.

Facebook's iPhone users in the U.S. can now make calls to each other through the Facebook Messenger app anywhere they have a Wi-Fi or cellular data connection, avoiding carrier charges. Facebook said it was working on adding the feature to its Messenger app for Android and BlackBerry users. Right now, calls can only be made to another user who has Messenger installed on their iPhone. Users can not call a landline number, and they cannot even call a Facebook friend who is using Facebook via web browser.
This move will have much broader consequences than is immediately apparent. Let us mention here the three most important:
Bell's Telephone
  1. Microsoft is out of the Messaging / Telephony game because once messaging merges with social networks, MS will be unable to compete in this field with heavyweights Facebook and Google. This is indeed a bad news namely for Skype and Lync. With its acquisition of Skype in May 2011 for US$8.5 billion, Microsoft bought namely users (because similar technology Microsoft already had, and even in the form of three different applications: Windows Messenger for common users, Xbox Live for Xbox users, and Lync for corporate users). But these expensively bought users will now switch to Facebook (or Google+), which they already use anyway. This step will be only logical from their point of view, as it will allow them to get rid of the need to use two separate applications for similar functionality.
  2. Google will become the biggest competitor of Facebook, thanks to its Gmail, Google+, and related voice and videotelephony services. Let us recall that Google has a head start here: it is offering video calls already since its launch of Google+ in June 2011, and since March 2012 it even offers free calls from Google+ to ordinary telephone numbers in the US and Canada. The battle between Facebook and Google will be very balanced - both competitors have chances for victory. Facebook has more users, while Google has better technology, namely in messaging where Facebook up till now depended on technological partners.
  3. Last but not least: This move is indeed very bad news for telephone operators. VoIP ceases to be a technology used only by enthusiasts and becomes a mainstream commonplace. A typical user will prefer to call his friends directly from his favourite social network, no matter whether he is on computer or mobile phone, as it will be indeed much simpler than manually dialling the number on his phone (in case he is on computer) or leaving the application in order to make a call (in case he is on mobile). Using VoIP instead of carrier voice telephony will thus no more mean any complication for a user. The opposite is true: VoIP calls will be simpler and more convenient, offering additional related services. At this moment, billing based on length of the calls and their distance will become history, and so will become the voice telephony service that was the main cash cow of telcos for more than a century.

A seemingly small change in Facebook functionality will thus likely trigger an avalanche of huge disruptive changes in several important sectors.

Wednesday, January 09, 2013

Facebook launches telephony - Microsoft may write off its $ 8.5 billion investment in Skype

Written for Start2Cloud.com.
Since last Thursday, Canadian users of smartphones running iOS and Android can use Facebook for voice calls directly from Facebook. The call is routed through VoIP, so it uses existing data plans, not a voice plan of the user. Facebook thus started to offer - so far only in Canada and so far without video - the same service as Skype. For Microsoft, which bought Skype in May 2011 for $ 8.5 billion, it's a bad news.
Above all, we must say that the voice communication is a logical function of social networks and it was only a matter of time when it becomes their natural part. The primary aim of social networks is to connect people through various forms of communication: short messaging, photo sharing, video sharing, and also the voice and video telephony. This is well understood not only by Facebook, but also by its main competitor, social network Google+. Google+ is in this direction significantly ahead of its competitor offering video calls (via its custom function Hangouts) since its launch in June 2011, and continuously improving its VoIP functionality. Since September 2011 it is possible to use Hangouts directly from the Google+ app for mobile smart phones and tablets, and since March 2012 it is possible to make calls from Google+ on ordinary telephone numbers; moreover, calls to numbers in the U.S. and Canada are even free. While Facebook already offers voice calls as well, from April 2011, it is not via its own service, but via a service called Bobsled provided by a partner company T-Mobile. Since June 2011 Facebook offers also video calling, but again through technological partner, which is in this case just Skype. In both cases, users must however download a separate application and switch to this application to start the call; calls directly from Facebook are not yet possible - unlike calls in Google+. Facebook is thus clearly under pressure of its biggest competitor, and has to react.
Fortunately for Facebook, Facebook has all the potential to succeed, and not only that, it is even probable that it can completely dominate this market. In telephony, like in social networks, the so-called network effect takes place. Telephone service is the more useful, the more users we are able to reach through it. And here comes Facebook with its claimed billion of users on the top, without serious competition. For the user it does not make sense to have a green phone on the table from which he is able to reach a billion users, and next to it still a yellow phone from which he can reach 600 million users, who significantly overlaps with the first group. Users will retain only one service, and it is that one which is most universal.
As a result, there is no bright future for once famous and successful company Skype. The VoIP technology is now so mature that it is itself no  differentiator from the user’s perspective. What matters is number of other users available through this service, and a seamless interconnection with other useful services – namely with other ways to communicate with our friends, such as sharing of photos, videos, and of course contacts. To sum up, at the same time when Facebook launches its global telephony, Microsoft may write off its 8.5 billion dollar investment in Skype, because Facebook users will no more need Skype as a separate application.
Anyway, history is only repeating itself. Microsoft itself could tell - for example, how did browser in the 1996 became an integral part of the functionality of the Windows operating system, which caused current leader in browsers, Netscape, to lose its market. That time the problem was that Netscape users were also users of Windows which brought them the browsing functionality they needed, so they had no reason to buy another product with the same functionality. Today, therefore, this story will play again, albeit with a slightly different cast. Facebook will beat Skype simply by expanding its functionality to the field of its opponent. Unfortunately for Skype, also in this case, its users are also users of Facebook.