Amazon’s Kindle Fire Raises The Table Stakes For Tablets

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As expected, Jeff Bezos announced new Kindle products yesterday in Santa Monica — and what an interesting range of products these turned out to be! While the updated Kindle eReaders offer better performance and a lower price point for those dedicated eBook lovers, it’s the Fire range that really impressed.

In place of the low-powered, fairly low-spec, North America-only original device, there are now three to four devices — running the gamut from version 2 of the original all the way up to the 4G-enabled 8.9-inch Kindle HD with its own data plan. The pricing of the devices is even more intriguing — at $159 for the lower-end 7-inch tablet, $199 for the 7-inch HD tablet, and $299 for the 8.9-inch HD tablet (Wi-Fi only), these represent a new challenge to other manufacturers’ Android devices and Microsoft’s upcoming Windows 8 tablets. Additionally, European markets (the UK, Germany France, Spain, Italy) will get to see the 7-inch Fire devices (both version 2 of the original and the HD device) at more or less the same time as the US – no sign of the larger device, but that’s probably reserved for the US market while supply ramps up.

What does this mean?

  • Android tablets (aside from the Nexus) are dead in the water. With Google and Amazon both squeezing the price of Android tablets, its difficult to see how Samsung, HTC, etc. can compete in this space, especially given that they don’t have Amazon’s and Google’s alternate revenue streams to supplement loss-leader hardware. The Verge published a very good article on this prior to Amazon’s announcement.
  • Microsoft finds itself at a crossroads. Microsoft now has two options for the Windows 8 RT tablets:
  1. Stick to its “The Kindle Fire and the iPad are just for content consumption; Windows RT tablets will be for so much more” message that has been its mantra for several years and try to price high — a strategy that’s almost certainly doomed to failure if it relies on retail and mainstream consumers to understand the difference.
  2. Price the Microsoft Surface (RT version) competitively to hit Google and Amazon head on and undercut Apple. The downside here is that it means alienating those already-alienated Android OEMs as well (on the ARM platform at least). Also, Microsoft has very little content or advertising revenue to make its money back on hardware subsidies. So as previously mentioned, the $199 Microsoft Surface RT seems unlikely.
  • Apple needs to adjust its medium-term strategy. The iPad, iPhone 5, and (probable) iPad Mini will naturally continue Apple’s policy of premium pricing: Why would it slash margins when the competition hasn’t really made an impact? But it’s more important for Apple now to look at what price its tablets will be in 12 to 18 months’ time — a time frame that allows for Amazon Fire, Google Nexus, and even Microsoft tablets to establish a decent market share and application ecosystem. In a market of similarly designed — lawsuits allowing! — well-built devices with active developer support, Apple will need to adjust its pricing accordingly; consumer ties to the iTunes ecosystem can only be stretched so far.
  • For consumers, it’s win/win (after six months of pain). The upshot of all of this for consumers is that there will be much more choice in the tablet space, more competitive pricing, and a wide variety of capabilities and ecosystems to choose from. This won’t happen overnight, though. To get to this tablet heaven, we’ll need to go through a glut of dismal Android tablets dumped on the market by those OEMs boxed in by Google/Amazon; Windows RT tablets arriving with their confusing “It’s a proper PC, but not really a proper PC” messaging; and endless discussions about poor battery life, built-in obsolescence, and app stores.

What’s next? Apple’s iPad Mini announcement will mix things up again in the next month, and we’re still waiting on pricing details for Windows tablets.

Windows 8 Devices Dominate IFA 2012: They Look Great; Take My Money! (But How Much Are They?)

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For once, IFA in Germany was quite interesting, with many OEMs taking the opportunity to unveil their next generation of tablets and smartphones – the majority of which ran versions of Windows 8.

Both Sony and Toshiba offered sliding-keyboard Windows tablets, with Sony also showing a 20-inch tablet. Dell had a good-looking update of its “flip-screen” Dell Duo device — the Dell XPS Duo 12 — along with a 10-inch Windows RT device. .

Samsung labelled its family of Windows 8 devices “ATIV” — announcing both ARM and Intel tablets as well as a smartphone.

Several OEMs also showed touchscreen ultrabooks — HP, Samsung, and Acer among them. Asus revealed a hybrid laptop (the Taichi)  with two screens, effectively putting the tablet screen on the outer lid of the laptop. Samsung has a similar prototype. A bunch of all-in-ones also sported a Windows 8 update, which should be a shoe-in for one of the few PC categories that’s still shown growth over the past couple of years (admittedly from a tiny base).

Of course, while this is interesting to analysts and the kind of obsessive tech fans who read Engadget and Gizmodo, none of this will feel real to consumers until they see devices on sale in Best Buy or Carphone Warehouse.

Naturally, pricing details are still fairly thin on the ground. This is not too much of an issue normally; you can usually guess a price point based on existing products. But the spectrum of potential prices is particularly wide here, especially for the Windows RT tablets; we still don’t know if the Microsoft Surface RT tablet will really be priced at $199, and so the price of the rival RT tablets could be all over the place. Google’s Nexus 7 and Amazon’s Kindle Fire come in at $199 (should you manage to find stock of the latter), but these are just mid-level 7-inch devices. Will a 10-inch Windows RT tablet command a premium? Probably, but only $100 to $150 at most. Hopefully, manufacturers won’t make the “same price as an iPad” mistake again! It’s clearer where pricing will go for Intel-based tablets, both the low-power units and the true PC tablets; they are going to come in at around $600 to $800 for entry-level devices and will head up from there as they become hybrid ultrabooks.

Another reason that OEMs (and Microsoft) may be keeping their powder dry on pricing is the impending announcements from the rival camps. Amazon is expected to announce new Fire devices on September 6 — including a rumoured ad-supported tablet — and potentially a wider geographic reach than just the US. And, of course, Apple is on the verge (maybe) of announcing the ”iPad mini.” Nokia may even get in on the Windows tablet action when it announces new smartphones on September 5; after all, it did release a lovely looking premium netbook  (albeit with sales as near to zero as worth measuring).

With the likes of Sony, Samsung, and Lenovo also showing new Android tablets and smartphones at IFA, the tablet war is finally kicking off!

Hypothetically, What Would A $199 Windows RT Surface Tablet Say About Microsoft’s Strategy?

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The inter-web is awash with rumours that the Microsoft Surface tablet (ARM version) will launch in October at a price point of $199. This is less than half the price many people were expecting on the assumption that Microsoft was following the more usual “price it the same as an iPad and see if it sells” strategy (it won’t).

Is it plausible that this is the target price? If so, and I have no deeper insight into the validity of the rumour than anyone else, what does it tell us about Microsoft’s state of mind?

  • Suddenly, it’s a two-platform strategy: Windows RT is for media consumption. One of the main concerns around both ARM and x86 tablets was the potential for consumer confusion – particularly if they are similarly priced. Putting the Windows RT surface device out at $199 does away with much of that confusion and puts the device squarely in the affordable “media consumption” tablet space (something for which Microsoft has continually derided the iPad and Android tablets). It could be the best device in this category – blowing away the Kindle Fire. Of course, this low-functionality positioning is a bigger risk if the breakeven model relies on the upsell of productivity apps (its unclear what version of Office will ship with the Surface) or a vibrant apps marketplace – you don’t need either of these to surf the Web or watch videos.
  • It’s a recognition that this is the only way Windows RT will gain traction. As I said when ARM-based Windows was announced back in early 2011, this seemed like a major coup. Since then, though, it has looked more and more like the Windows RT tablet would be DOA given its lack of backwards compatibility, improved x86 performance, and a price point similar to the iPad. But, $199 for a very compelling-looking device would mean that all bets are off; this is a sweet-spot price for impulse consumer electronics purchases and would guarantee very healthy sales (stock allowing). It would also have the added benefit (to Microsoft) of killing off the premium Android tablet market; then again, Google’s Nexus 7 is doing a pretty good job of this already.
  • It’s a massive internal shift in Microsoft’s strategy. If bringing out its own tablet and disenfranchising OEM partners wasn’t enough, a major Microsoft division is now looking at taking a bath on each unit sold. Bear in mind that this is one of the divisions that has always looked down on Xbox and the consumer businesses for haemorrhaging money. Sure, Microsoft sold Xbox hardware at a loss, but game consoles are recognized industry loss leaders and have shown that the razor/razor-blade model works. Selling enough software, content, or advertising (ha!) for a tablet that may cost you $100 more than the asking price to get out the door is a different matter altogether.
  • It’s an explicit statement of intent: OEMs will only be able to compete with x86 devices. OEMs are already hurting from a declining (traditional) PC business with razor-thin margins; they can’t afford to subsidize their own Windows RT tablets in the same way that Microsoft can. And nobody is going to pay a significant premium for an HP, Lenovo, or Dell device over Microsoft’s own Surface tablet. So if the price point is real, Microsoft is basically carving out the ARM tablet market for itself.

It’s an interesting time for Microsoft. It desperately needs a successful tablet launch to stay relevant — and for that reason, the first three points above are at least plausible. The final point though is more far-fetched. Kicking the OEMs when they are down is one thing; letting them announce Windows RT devices and then bringing your own to market at half the price is more akin to robbing them at knife point. For this reason, my opinion is the $199 price is bogus or contains contractual telco smallprint.

Earnings Season: What Recent Results Say About Consumer Firms’ Future Prospects

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In what is turning out to be one of the most interesting quarterly earnings reporting seasons for some years, Apple, Zynga, Nintendo, Microsoft, and Intel have all “surprised” the market with their “low” numbers — but there are fundamental differences in why these firms have had a tough quarter. (I’m going to use calendar quarters rather than financial quarters to avoid things getting far too complicated).I can think of four main reasons (I’m sure there are more):

  • The tough product transition period, part 1: Apple. Apple had a pretty good Q2 2012 — far better than a year ago — but unfortunately it came on the back of a huge Q1 2012 (largely thanks to iPhone 4S). Citing poor demand in Europe among other factors, Tim Cook also made some interesting comments on the earnings call alluding to anticipation of iPhone 5 reducing demand for current products. Pent-up demand for the new phone seems unprecedented; once this device hits the market, Apple numbers should “improve.” It’s a testament to the financial markets’ belief that Apple can do no wrong that this shock miss of Wall Street’s inflated earnings estimates (albeit more in line with Apple’s own projections) shaved 5% off the share price overnight.
  • The tough product transition period, part 2: Nintendo. Another firm whose current products are looking tired but whose shiny new products aren’t quite ready is Nintendo. The Wii has dropped off console sales charts in the past year, and while the 3DS is doing good business in the portable space, the release of new Wii U consoles is still (probably) several months away. It’s going to be a tough 2012 for Nintendo; crucially, there isn’t that guaranteed pent-up demand for the new console that Apple enjoys with the iPhone 5.
  • Great business but bad investments coming home to roost: Microsoft. In many ways, Microsoft is also in a transition period — Windows 8 OS and accompanying Surface devices won’t arrive until October 26, 2012 — but luckily the rest of its products haven’t run out of steam. In fact, Q2 2012 was a good quarter with rising revenues; it’s just a shame that its on-going fruitless attempts to build a consumer media/advertising strategy led to a $6.2 billion writedown.
  • A changing market causing (hopefully) short-term pain: Intel, AMD, PC OEMs. As expected, a tough global economy and the on-going consumer (and business) infatuation with tablets is hitting traditional PC sales numbers. Ironically, the solution to the tablet challenge may also be causing consumers to delay PC replacements while they wait to see a proper tablet + Windows solution, which won’t happen until the end of October.
  • Wow, we did not expect that! Zynga. Cracks started to appear in Zynga’s “grinding games without the fun game bit” business model some time ago; its valuation at IPO (in November 2011) was based on the continuing stratospheric growth of user numbers (and the accompany microtransaction revenues) seen with early hits like Farmville and Mafia Wars. Unsurprisingly, like every other videogaming market, social games have turned out to be a hits-driven industry, with relatively low barriers to entry and a fickle audience. It also highlights the danger of relying on someone else’s platform (Facebook) over which you have no control. And the strategy of buying a rival “star” product/ firm (Draw Something by OMGPOP) for top dollar just as it became a “dog”(entirely bypassing the “cash-cow” phase) didn’t help . . . see this if that last sentence didn’t mean much to you.

Of course it’s not all doom and gloom: ARM and Samsung have reported excellent results of late — and even Facebook did moderately OK, even if that didn’t stop the markets from punishing its share price for not doing better, probably due to the fact that the firm still hasn’t worked out how to really ramp up revenues.

So, while Q3 is typically a quiet period for consumer firms, Q4 is shaping up to be a litmus test for firms like Apple, Nintendo and Microsoft – new products that will need to succeed (and fast), landing at a time when consumers still seem unwilling to recommence their profligate spending ways.

 

Sony Buys Gaikai: A Solid Investment In Future Services

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This week Sony, or more specifically Sony Computer Entertainment, bought Gaikai — the streaming game service. Rumours of a tie-up had been circulating prior to E3, and Gaikai had made no secret that it was on the market for around $500 million. The $380 million Sony paid is well under that, but even so it must have been a difficult decision given the Sony group’s current performance.

What does the purchase mean for Sony and the wider gaming market?

  • Sony is buying networking and service platform expertise . . .  Sony has struggled long and hard with online services and software: its PlayStation network is now robust but suffered an embarrassing hack attack last year, while its PC and phone software (Media Go, PlayStation certification for phones) seems to lag a generation behind folks like Apple or even Microsoft. Gaikai’s core networking and service delivery expertise can fix many of these issues in a relatively short time (months rather than years).
  • . . . as well as console backward-compatibility. Despite consistently offering by far the best access to and support for older titles of today’s three platforms, Sony has long been the recipient of gamer complaints about the removal of backward-compatibility as it has released new hardware iterations of the PS3. Streaming potentially allows both backward-compatibility for today’s PS3 and, potentially more intriguingly, for the future PS4 — allowing it to run today’s PS3 games without additional hardware.
  • Non-console devices can join the game. While not explicitly stated as an aim for Sony Computer Entertainment, its rich gaming back catalogue, along with Sony’s engineering expertise in PCs, TVs, tablets, and phones, means that PlayStation games could now come to all of these platforms. This would provide a USP (if kept exclusively to Sony hardware) and an additional revenue stream for games with little additional investment.
  • Where does this leave Microsoft? Microsoft is already working with OnLive, the rival (and arguably more well-known) game streaming service. However, the relationship has been rocky at times (see this). Does Sony’s news justify Microsoft engaging more here — or even considering an acquisition? Probably not, if Microsoft (along with investors like HTC) can get ready access to the technology as ‘partners’ – Microsoft is already much more competent at online execution in gaming.
  • Connectivity will need to take the strain. One thing is for sure, users will need solid, fast, low-lag broadband connections (and in-home wiring/wireless) to make any of these streaming services work consistently. Netflix and Hulu sometimes struggle with one-way traffic when streaming video into the home; gaming services need to do this as well as upload user actions and act on them at the server end. Let’s also not forget that consumers surrender some of their control with these services — starkly illustrated by the storms last week that took chunks out of the Amazon cloud. This is slightly inconvenient if you want to post your latest wedding dress photo to Pinterest; it’s disastrous if you are 3 to 4 hours into a streamed gaming session without a local save!

Microsoft Surface Tablets: A Core Strategic Change For Microsoft.

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Yesterday, in a much-hyped announcement, Microsoft unveiled its future tablet offerings — both an ARM and an Intel-based 10.6-inch tablet running their respective flavours of Windows 8.

While no pricing details have been announced, these aren’t budget devices: they are likely to be on par with premium Android tablets ($500) and the iPad ($650) for the ARM-based device and approaching Ultrabook prices ($700 to $1000) for the Intel-based tablet. I’ve written previously about how the tablet war wouldn’t really kick off until Microsoft arrived, so what can we draw from these initial announcements?

  • The Intel tablet will clearly be targeted at business, at least initially. Microsoft has been running interference over the past two years around businesses adopting iPads as core employee devices. When the Intel-based Surface ships (probably early 2013), it will at last have a proper solution for its big enterprise customers — and one that it can supply directly rather than relying on the vagaries of OEM support. Given a reasonable price point, proven compatibility with legacy Windows applications, and robust security and remote management abilities, I would envisage high levels of interest in the product.
  • Ouch! Talk about kicking OEMs when they are down. Dell, HP, and Acer are all reporting poor financials, mainly thanks to the lacklustre PC market (Lenovo is an exception here, doing rather well, thank you very much). Imagine you are in their position; suddenly, the biggest software supplier you work with has decided to build hardware — and not just any hardware, but the new premium form factor you were planning to use to relaunch your business. Sure, this might “prime the pump” for Windows 8 tablets from other OEMs (as Ballmer hopes) or it could be like partnering with Nokia on phones — instantly alienating other manufacturers like HTC, Samsung, etc.
  • The Windows RT Surface — hmm. Windows RT on ARM seemed like a great idea when announced last year, but in the subsequent months, Intel has pulled a rabbit out of its hat and got x86 architectures performing almost as well as ARM while not being power hogs. So, you’ll now have the choice of a premium ARM tablet running Windows RT (admittedly with free MS Office) but doing little else that people would recognize as Windows — or an x86 tablet running “proper” Windows 8 with full (or nearly full) backward compatibility for more or less the same price. This is not a difficult choice. Admittedly, given that Microsoft is targeting businesses initially with the x86 tablet, its version will be more expensive, but expect one of the OEMs to have a cost-comparable 10-inch tablet running full Windows 8 at or just after launch.
  • It’s time for Android to step up. Android tablets have represented the only really viable alternative to the iPad to date, and yet most have failed to make a mark with buyers. We’re finally getting some good devices (like the ASUS Transformer and Samsung Galaxy Tab), and the Google Nexus tablet is — allegedly — just around the corner. If manufacturers (and Google, of course) want to stay in competition, they need to up their game and produce more stable, aggressively priced devices that can either undercut the Windows/iOS devices (like the Amazon Fire) or offer something better.
  • Are apps the be all and end all? Much discussion is already centring on whether the Surface tablets will have a sufficiently developed apps marketplace to thrive. Certainly, the iPad has been driven by the legacy success of the iPhone apps marketplace; certain categories of applications, such as games, social media clients, and photo manipulation, figure highly in terms of what people use their tablets for. Given that this is effectively a new platform, the ARM Surface will need apps to survive, but the x86 Surface may be able to flourish (at least initially) without this. Why? Windows 8 (on x86) will be the first OS designed for a tablet with backward compatibility (and no — backward compatibility with a phone doesn’t count); on day one, it will already have access to more apps than all the other platforms (although, admittedly, many of these won’t work well with the Metro UI out of the gate).

Overall, while we’re still awaiting vital details, the Surface announcements do at least show that Microsoft is prepared to make a major strategic shift into hardware to protect its position. I have high hopes for the x86 Surface (and the competing OEM that it might spur), but I see the ARM Surface device as falling between multiple stools — a tiny apps market, not as polished as an iPad, not as cheap as an Android device, and not as practical as its own stablemate.

E3 2012: A Quiet Year For Videogaming

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E3 took place in LA last week, perhaps for the last time, but it failed to really hit the headlines in the way it usually does. Why? Well, as expected, it was a very quiet year for announcements, with most firms recognizing that now is not a great time to heavily invest in the industry (see the recent game retail crisis, etc.). It was common knowledge that Sony and Microsoft were unlikely to announce new consoles, but even Nintendo failed to excite, despite the Wii U coming out later this year. However, there was some interesting news aside from the inevitable announcements of game title sequels.

  • Microsoft focused on the “home entertainment” angle. The Xbox has always been a potential Trojan horse to get Microsoft into consumers’ living rooms — and it demonstrated this strategy at this year’s E3: new music services, deals on video streaming, and, most interestingly, SmartGlass technology to link various Microsoft-based platforms.
  • Sony played it straight. Along with some new game announcements (mainly sequels, of course), it announced a revamp of PlayStation Plus — adding more free full games to make the service even better value. Sony’s interesting new product was Wonderbook: Book of Spells, an augmented reality (AR) book tied to the Harry Potter franchise that works with the Move peripherals. Sadly, while Sony has years of interesting AR/video products (dating all the way back to EyeToy in 2003 and EyeToy:Chat in 2005), these never seem to draw in consumers in sufficient numbers.
  • Nintendo snatched defeat from the jaws of victory. It should have walked away with the conference, but instead it failed to impress — failing to confirm pricing or launch details for the Wii U. Still, we got Pikmin 3 — finally! Luckily for Nintendo, at least some of the third-party publishers announced some interesting Wii U titles.

Elsewhere, the show highlighted a slew of sequels from the major publishers and the continuing resurgence of the indie developer sector. Most interestingly, Peter Molyneux’s new firm 22Cans announced Curiosity; it’s not really a game but more of a social media experiment. Elder Scrolls Online also got its first real showing. Whether the franchise can reverse the ongoing trend toward free-to-play (F2P) MMOs remains to be seen; it’s a strong brand but, arguably, not Star Wars strong and The Old Republic is losing subscribers.

What is E3 good for?

Slow years like this inevitably lead to questions about whether E3 is as relevant as it once was. After all, many of the new game announcements were trailed or leaked prior to the show; with so many online sources (Eurogamer, Joystiq, Kontaku, Spong) covering gaming every day of the year, E3’s no longer a great way of getting that big-hit mainstream press coverage. However, E3 is:

  • Great for doing proper business. While the gaming media (and gamers) bemoaned the move to a much smaller show in Santa Monica in 2007 as lacking in glamour, you can bet just as much useful business was done between distributors, retailers, developers, and publishers.
  •  A useful date in the diary for an industry temperature check. E3’s June date puts it right at the point when vital Q4 titles and hardware have been finalized — meaning distributors, developers, and the media get hands-on with near-final game builds or hardware. Admittedly, given that some titles have already slipped to 2013, the usefulness of the timing has been somewhat diminished this year.
  • A great venue for the whole gaming ecosystem to have a meeting of minds (hopefully). E3 was born in the PC gaming age, just as consoles were enjoying their second coming (e.g., original PlayStation, Sega Saturn). It has continued to be dominated by these platforms — mostly the consoles and their portable stable mates. While recent years have seen some embracing of mobile gaming, the booming casual/social game market hasn’t been particularly well represented. This is changing: Zynga was at the show this year for the first time — albeit on more of a recruitment drive rather than to demonstrate its wares — and the pace of change should accelerate, turning E3 into a truly platform-agnostic forum for the industry.

So, When Do The Tablet Wars Start?

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The iPad is a true phenomenon, selling around 70 million units since launch and projected (by Gartner) to reach up to 169 million units per year by 2016. It has demonstrated the consumer (and, potentially, business) desire for a simpler device that delivers a fantastic media “consumption” experience in conjunction with simple yet compelling apps.

Android tablets and Windows 7-based tablets have also been around for some time, so you’d have thought that the tablet “war” would have started already. Not so much. There have been a couple of false starts: the Samsung Galaxy Tab, BlackBerry PlayBook, and HP TouchPad — the latter two briefly even outselling the iPad in certain segments/markets, but only after “fire sale” discounting — have all been heralded as serious challengers but have failed to make an impact. These were certainly no more than “skirmishes” rather than an all-out war.

The Amazon Fire made some inroads in Q4 2011, extending the firm’s e-reader device line, but this seemed to wither on the vine in Q1 2012. New devices like the Asus Transformer and second-generation Samsung Galaxy tablets seem to be better received, and Google’s own tablet may arrive soon. These will, doubtless, cement Android’s position (based on cumulative sales) as a significant second-place player. But the tablet war won’t really heat up until Microsoft hits the market with both Windows 8 RT and Windows 8 tablet devices.

Microsoft needs Windows 8 and Windows 8 RT to work straight out of the gate.

Windows RT on ARM architectures will provide a proper Metro-driven, Windows-like tablet — one better than those cobbled together with Windows 7 to try and keep business clients from buying iPads — and at a price point (hopefully) comparable with other tablet offerings. Meanwhile, if you need real Windows on a tablet with proper backward compatibility, Windows 8 tablets with x86 architectures should arrive at around the same time. Pricing on the latter is likely to start high and then trickle down as component prices drop; it’s also where we’ll see interesting “hybrid” devices like laptops with touch screens and tablets with slideout keyboards.

It’s a bold move and, arguably, one that Microsoft should have made last year; Windows RT will introduce a lower-cost iPad competitor with a good user interface (UI) and some legacy compatibility (for Office docs), but it may end up as just another Zune HD — superior to the iPod in terms of hardware and UI but gaining zero traction in the market. Similarly, Windows 8 tablets could be far too expensive; if they cost more than a decent laptop and iPad combined, it’s hard to envisage rational IT managers or brand-conscious consumers opting for the untried tablet.

Perhaps this is why forecasts from the likes of Gartner and DisplaySearch see iOS as the leading tablet platform all the way out to at least 2017, with Android only gaining ground slowly and Microsoft performing poorly (according to Gartner) or atrociously (according to DisplaySearch).

It’s too early to call a winner in the long term.

The truth is that with no international market for the Kindle Fire yet, only rumors of the Google tablet, and no pricing on details for either flavor of Windows 8 tablet, it’s too early to announce the winner of this war. Apple heads into the conflict with tremendous momentum and economies of scale, but the same could have been said of Sony, Kodak, or Atari in the past. The key questions will be:

  • Who will deliver a tablet that supports those neglected usage scenarios (transactions, work stuff, communications)?
  • What will be the difference in price points between Windows RT devices and entry-point x86 Windows 8 tablets? Will all Windows 8 tablets be “transformer” or hybrid models that have slideout keyboards . . . or will there be a mainstream, pure tablet offering based on x86 architecture?
  • How long will there be manufacturers with feet in both the Windows and Android camps? Will we see this breaking down, as per today’s “PC manufacturers” and “smartphone manufacturers”, with just a few firms (Samsung, Apple, Sony) being global players in both?
  • Who is going to explain to the poor consumer standing in a PC retailer the difference between and unique benefits of: 1) a traditional notebook running Windows 8; 2) an Ultrabook with a touch screen running Windows 8; 3) a tablet running Windows 8; 4) a tablet running Windows 8 RT . . . even before we factor in Apple devices, Android tablets, hybrid Android devices, and Chrome OS laptops!

The Future Of The Digital Home

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(see the previous 3 posts for background; part I, part II, part III)

Is the concept of the digital home redundant now? Have events bypassed “something that never was”? No. While the need for a self-contained system in a consumers home with storage, intelligence and management may have been superseded by high bandwidth / availability broadband and cloud services, the things that I believed consumers would need from digital services, devices, and applications are still true — and in many cases still haven’t been provided by today’s technology.

Future trends that fall under the “digital home” umbrella include:

  • The fight for “aggregation hubs.” Streaming services have made an impression, and the seamless delivery of content — ranging from e-books to videogames and device applications — now happens as a matter of course. However, these services are still fragmented; a range of suppliers (Amazon, Steam, iTunes) requires different interfaces and supports different client devices. Global titans like Google, Apple, Amazon, and even Microsoft want to bring all this together via individual or household user accounts that tie together all your legitimate movies, music, applications, and e-books. The successful firm becomes a trusted resource for the consumer — and can corner the market in upselling or advertising to them.
  • Network refinement. Wi-Fi still isn’t the networking nirvana that device makers would have you believe; at the very least, it can be complemented with other technologies like NFC, Bluetooth, or 4G, and perhaps even those low-power technologies like Z-Wave and ZigBee will finally come good (although I’m not holding my breath!). But as we reach a point when gigabytes of data could be moving to and from devices in the home on a regular basis, Wi-Fi may hit its capacity limits. Shifting to a powerline-based network or wired backbone may be the only way to keep up with traffic demands.
  • Storage and application migration to the cloud. Today’s browser-based applications and social networks already run across multiple devices without ever leaving the cloud, but traditional applications will increasingly do the same — be it Office 365, photo-editing packages, or gaming via OnLive or Gaikai. The advantages of online version control, storage, subscription models, and easy sharing make the locally installed software package look increasingly redundant, while the lack of optical drives in devices like Ultrabooks or tablets makes installation from disk very tricky. Online storage is already going this way as Dropbox, SkyDrive, iCloud, and Google Drive compete for consumer attention.

Even without these specific areas of focus, there is still mileage in the concept of greater inter-operability between devices and services – maybe Microsoft Research is on to something with its HomeOS, but this would take many years to achieve a critical mass.

Whatever Happened To The Digital Home? Part III

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(carrying on directly from my previous post)

Stuff that didn’t even occur to me:

  • Tablets. This isn’t a great shock; forecasts and models are all based on evolutionary change to existing ecosystems and technology. Apple’s iPad success was a revolutionary change that no analyst could have predicted. Interestingly, the iPad is a sort of half-way house between the old PC-based home and the potential digital home, offering an easy-to-use, flexible consumption device that hides all that techie stuff. It helps that in iTunes, Apple has delivered the equivalent of another concept in the report: the third-party media/content aggregator.
  • Social networks. Like tablets, the rise and rise of the likes of Facebook, and Twitter has fundamentally changed consumers’ relationship with their home technology. A PC, TV, or mobile phone in the home is now merely a gateway to accessing friends and the wider community rather than a solution in itself. Arguably, this is a far healthier relationship, aside from the desperate need to communicate absolutely everything, obviously.
  • The move to web-based services and then back to apps. This is an interesting one to consider; as a consumer technology analyst, I naturally expected digital home experiences to be delivered via installed software — software that was perhaps even installed at the factory for devices like TVs. The growth of Flash, HTML5, Ruby on Rails, etc. meant that many services and experiences were delivered via a browser. This makes sense in retrospect: once a compatible browser is available on a device, a service becomes available with very little (if any) tweaking — much better than having to rewrite for every architecture or operating system. More interesting still is the reversal of this trend as app stores and downloadable apps for phones, tablets, and PCs aim to “monetize” consumer service delivery; you lose some of that web browser compatibility if you code directly for iOS, Android, or Windows, but you gain consumer engagement (and, potentially, direct revenue).

(I’ll finish off this series of posts with a look to the future — is the digital home a redundant concept?)