Phone Encryption

It’s been announced that both iOS and Android are going to have fully encryptable phones which will be a huge boon for our 4th amendment rights. As well as to protect us from more mundane things like theft or simply losing your phone. Our phones these days contain as much or more personal information as our computers do these days. The average person doesn’t have any sort of two step authentication on their personal accounts on their phones. In most case people do have some sort of password protection to get into the phone, but once in it’s fairly easy to get into many applications.

For end users there’s nothing better than having a stronger security measures as in many cases companies poorly manage their security. This can be highlighted from the past week of exploits and those celebrity pictures. Encrypting phones might not prevented the celebrity leak, but in many cases it could. It’s believed that some of the hacks of Paris Hilton years ago came from hacking her phone through a BlueTooth connection, so a fully encrypted phone may have protected her from that hack.

All these things are good, however, the Washington Post has decided that this encryption is a risk to public safety because it will help criminals. This is the exact same argument that people make against BitCoin and full disk encryption. BitCoin ended up spawning SilkRoad, which has been shut down and it’s more likely that more crime is committed with dollars rather than Bitcoin. Full Disk Encryption has been used by both criminals and the more technical savvy. With the recent changes where the government can simply take your laptop at boarder crossings without any sort of warrant. Which means anyone at anytime that could have been flagged by the NSA could have their computer searched at will.

It’s more likely that encryption will protect an average person from an arbitrary search than protect a criminal. It’s likely that without everyone being encrypted, having your computer or phone encrypted would have been a huge red flag, however, with these recent changes that can’t happen. Meaning the average person will be safer as well as the fully legal with nothing to hide security conscious individuals.

The Washington Post, FBI, and other agencies are wrong. Fully encryption on our phones protects our privacy, improves our fourth amendment, and give us more control over our own devices. If the FBI and the US government is successful in creating a backdoor the encryption will be worthless and the put us more at risk as we’ll have a false sense of security.

Venture Capitalists goals to exit will drive winner-take-all growth

While watching a friend stream on twitch today, his radio station played a commercial from Audible an Amazon company. Which made me think about how Audible was a really up and coming company that a lot of people were interested in. Companies like Audible are funded by Venture Capitalists to help them in a few ways – pay for more developers, pay for access to content, hire marketing folks, or any other litany of things that a business needs. They come in at a stage when a company has little to no revenue.

These VC’s then put pressure on the companies to become profitable through new businesses, increasing the number of number of subscribers, or even changing markets or product types (pivots in their language). This is for a pretty simple reason, they make money in a boom or bust manner. If they fund 64 companies having at least one of them profitable means it needs to raise a massive amount of money to break even or to make all of those investments profitable for the company.

This means that whenever a company like Amazon approaches the leadership board of a company like Audible, the board will likely push for a higher price, but will likely be willing to sell. This is because Amazon, Google, Apple, and other companies similar in size, breadth, and depth in the market, offer absurdly deep pockets. For example, Facebook bought Oculus Rift, a company that’s only had a few prototypes released for $2 Billion. This is a huge amount of money which likely made the VC’s extremely happy.

Because of these market conditions we’ll likely continue to see a winner take all approach to markets that these players are in. Since most of these companies are competing in the exact same space, a company like Audible, that could offer a distinct advantage in the market place would be extremely valuable. It would actually have significantly higher value than if there weren’t 4 giant companies competing in the same space.

It’s likely we’ll see this continue to expand as Sony tries to figure out how to move into these spaces more adeptly, as well as Microsoft resurgence in consumer markets. Fully expect more and more of this to happen and greater and greater valuations for these companies in the coming months and years.

Digital control gone too far

So my wife and I drove down to Modesto for this weekend. I wanted to test out using my phone with my car’s Sync, because I noticed it had a USB connection. I tried to start playing Pandora and my car told me Sync was unable to play protected content through this device. Let’s think about how absurd this is. I have an auxilary input into my car, so I can easily use a headphone jack to play the exact same music through the car speakers. The only difference is that I lose the ability to use the on steering wheel music controls. Digital copyright maximalists have decided that to allow microsoft to use Sync they must limit the devices that can play protected content. How assinine. This means that it is now les safe for me to play music because I can’t use the dash screen to see what music is playing or other controls to keep my eyes on the road. I own both the car and the phone and I’m paying for Pandora through ads. There’s no logical reason that I shouldn’t be able to use these products in this way.

This is a bit of a first world problem sure, but the same idea that is limiting my ability to use products that I own how I want them is shaping the rest of the internet and controlling how media (digital or print in some cases) can be used and consumed the world over. One of the more famous cases of late is the story of a guy that bought a book from Thailand and sold it in the US. The got sued because apparently that’s might not have been legal (supreme court thankfully ruled in his favor) another one is the idea that any software is merely a license and not actually a product that you own. In this case Autodesk sued a guy that was selling an old copy of AutoCAD that he’d never opened, on the grounds that he bought a license and the terms of service (which they can change at any time without you knowing or re-agreeing to) said that he was unable to transfer this license. This wasn’t a digital download it was a physical disk with the content on it.

I believe that because the US market is becoming saturated in many regards for these types of technologies, these companies are looking to turn these aging platforms, technologies, and content into a continual revenue stream. Instead of risking money to innovate they are turning into monopolists that are exhibiting rent seeking behavior. They must do this to keep their stocks from falling. Even the fabled internet companies that are supposed to be different aren’t. Amazon has been accused of limiting access to drive book prices down from their suppliers. Amazon limiting access to books. Think about that. Can you think of anything more abhorent than limiting access to culture and/or knowledge to gain a greater profit margin?

Should companies make profits, by god yes. Should we enable companies that have innovative ideas to enter the market? Definitely, in fact it’s an imperative if we want to avoid rent seeking behavior. I’m not always a fan of Lyft, Uber, and AirBnB but they are making a serious effort to confront entrenched businesses, archaic laws, and meet an obvious market need. So, let’s work to enable market competition and limit monopolistic behavior. The former is good for everyone, while the latter only for those in power.

Should we celebrate about Google joining net neutrality fight?

It’s time we be skeptical of high tech companies that support policies that we want. Today, a large number of tech companies came out against the FCC’s plan to allow internet fast lanes. They aren’t as bold as Mozilla in their claims, they don’t push for the most extreme best for the consumer perspective. We, as consumers, have to understand there’s a reason for this. These companies (and there are a lot) wrote the letter without stating what their position actually is, just that they are for a “free and open internet.” This is essentially a dream statement for a lawyer/lobbyist, because “free” and “open” can mean a variety of things based on that company’s perspective.

These companies are willing to push for a free/open internet insofar as it enables them to make money. We have to understand that. Many of these companies are looking to disrupt incumbent market players and are leveraging the internet to enable them to do that.

Normally, I’d be really excited about all these companies coming out in favor of net neutrality. However, because of their tepid support, their lack of recommendations of what to do to address the net neutrality issue, and tardiness to the conversation I’m concerned as to what their actual motives are for this debate. This is a very different discussion than SOPA, where just coming out against the bill was enough. In this case it’s not, we need them to provide clear direction on what the FCC SHOULD do instead. This provides the FCC a path forward and a way to drive the conversation. Without that, essentially there’s no clearly articulated alternative during THIS debate. Yes, they’ve made an argument before, but they aren’t this time.

I also am concerned by this turn of events because of the recent report that Google and the NSA had a very close relationship. In very strict version of net neutrality deep packet inspection wasn’t possible because there was no way to actually do it. The first step to packet discrimination is knowing what’s in the material. Truly end-to-end net neutrality precludes the ability to eavesdrop and snoop on content being passed along the IP backbone. Any sort of relationship between the NSA and arguably the largest internet company in the world necessarily limits the full extent that Net Neutrality can actually be implemented.

Furthermore, we also must remember that a large number of these companies that are now for Net Neutrality were also for CISPA which includes handing over data to the government. Which, based on Google’s relationship with the NSA, they essentially did anyway.

So, it’s a good thing that these companies came out for Net Neutrality because truly only the power of their lobbying can overcome the FCC’s proposal and push Comcast and Verizon into accept the new rules. I don’t think that we citizens could do it on our own.

(if you want to try to fight corruption that’s sort of on display here, check out Mayone.us)

Samsung, the battle for tablets isn’t going to be over specs soon, get ready for Customer Service Wars

I recently got a Samsung Galaxy Note 10.1 2014, in fact, I got it for Christmas as a present from my awesome wife. I plan on using the tablet as a replacement for my laptop as that’s on it’s last legs and I’m not quite ready to build a PC. I’ll be doing that for my gaming and other stuff, but in the mean time a tablet is going to fit my needs for blogging, watching streaming video, surfing the web, and even a lot of gaming. 

The thing about blogging, is that you really need a keyboard to be able to be efficient at writing. So, I bought a blue tooth keyboard so I can do my writing. Combined, this was a pretty sweet set up. When I was typing it worked pretty much perfectly, however, as I started to use my tablet more for this, I was having blue tooth issues, figured it out about 2 days later. So I talk to support after doing a lot of investigation myself, including reverting to factory settings, and eventually figured out that my blue tooth would drop whenever I switched applications. That’s clearly not acceptable as the tablet is designed for a user to have multiple windows open at the same time and multi-tasking. 

So, I contacted support and they requested that I send my tablet into to get fixed. I sent my tablet in on the 28th and I didn’t hear anything from Samsung until 1/8/2014 when the tablet was repaired. I still haven’t gotten my tablet back. Apparently the label to return the tablet to me was created on 1/11/2014 and still hasn’t shipped out 2 days later. 

Samsung should be concerned the long term impact on their business. I’m probably early as someone that will fully replace a laptop with a tablet, but still rather late to the tablet game as a consumer. Samsung is competing with both Amazon, Google, and Apple for best tablet. Amazon has a fantastic track record with customer service for the products they have full control over. Apple has really good support as well. Google, from my understanding, is also excellent. To this point Samsung has been able to rely on their cell phone providers to provide customer service for their devices, now it’s incumbent upon them to properly manage their customers when they have issues.

What I wanted as a customer in this case was pretty simple, clear expected delivery date to Samsung’s repair facility, clear report on the problem as well as how to deal with the problem if I ever have to do a factory reset, fast turn around time on sending my tablet back to me. At this point I’ve gone much longer without my table than with it.

I’ve had issues with Amazon’s products in the past, my Kindle broke while I was flying and it was well out of warranty. What happened with that, they told me if I paid $50 and sent them my broken Kindle they would replace it. In fact, they actually shipped me a new one and asked me to use that box to return my other one. This worked really well and allowed me to get my Kindle back faster and the customer reps made it very clear what was going on.

How Samsung could have made this better.

  1. Provide Tracking Number for my tablet to Samsung’s repair
  2. Failure analysis with a way of ensuring that I wouldn’t never have this problem again
  3. Shipping my tablet out the very next day from their repair facility to me. It’s been 5 days and the Tablet hasn’t shipped yet.
  4. More information on their service tracking website.

I’ve been extremely disappointed in this service experience. If this problem isn’t resolved, I’m going to be returning the product and likely will not return to the Samsung ecosystem in the future. The great product I bought has been pretty well tainted by their horrible customer service. 

Also, Samsung also asked me to review their service before I got my product back. Talk about tone deafness. Samsung needs to fix this otherwise they will not be able to compete especially with these extremely strong customer service companies in Google, Apple, and Amazon. Great products won’t matter because Laptops will be replaced with tablets and tablets need different levels of manufacturing support than laptops. 

Content is king, but if you build it will they come?

In yesterday’s blog I wrote a lot about the different operating systems and what differentiates them. However, I didn’t answer the question around how to build a user base or even more importantly the app base. For all operating systems there is a chicken and egg problem, which comes first the apps or the users – you can’t get users with out apps and no users will go with your system with no apps!

I think a look at how two companies have worked to overcome this is crucial to provide a path forward for the other operating systems. First of all, Google entered the mobile market in exactly this position. I wrote a paper on this while I was in my Master’s (written 2011) the really details this if you want to read that. Google decided to approach the app issue from a very different direction than Apple. First, Google offered a good deal of money for developers to begin making apps for the operating system. Second, Google create a different reimbursement structure for their purchases of apps that provided incentive for developers to develop apps for them. Apple would essentially take ~30% of the total price the developer charged for their apps. This rent seeking behavior of Apple means that the developers could make more money on Android if they sold the same number of apps in both ecosystems. Both of these provided incentives for developers to develop – free money and more money for development. Furthermore, Google made it extremely easy to port an app from iOS to Android which increased the app development rate – Apple of course worked to eliminate this benefit. Finally, Google had different payment schemes than Apple for ad revenue and is a significantly better company for dealing with ads than Apple to this day. All of these provided a great deal of incentive in addition to the fact that there have always been anti-Apple developers and consumers.

The second case (which I didn’t do a research paper on) is of course Amazon. As I mentioned in yesterday’s post Amazon rarely makes a profit on any of their Kindle sales. Amazon’s current foray into tablet’s was not a serious surprise to me. The Kindle was clearly an effort to learn about their users and their consumption habits. Amazon first targeted their most loyal customers, book readers. Tablets weren’t really on the horizon at this point as anything beyond a novelty that Microsoft was pushing and eReaders had a questionable spot in the market when Amazon came out with the Kindle (the same year as Apple’s iPhone – I feel that the Kindle was a bigger step for Amazon than the iPhone for Apple). It was widely successful. I personally bought a second generation Kindle in 2009 (and have since upgraded to Paperwhite 1st gen). Amazon over time continually refined the Kindle and looked for more content to bring to the users. Amazon began to experiment with browsers, apps, and other features. Even at this point the Kindle was Android based, but their own custom version. This marked on of the first forks in the operating system. Amazon also developed applications for iOS, PC, Chrome, and Android for Kindle users. This helped to increase adoption and encourage Amazon that digital content is extremely valued by consumers. When Amazon introduced the Kindle Fire line of tablets they continued to focus on content. This is apparent from the design of the operating system. Content is first and foremost. Books, TV shows, and Movies are easily accessible and essentially the default view for the device. Through a different type of content Amazon has attracted users, furthermore, they are likely attracting a different set of users than the iPad or Nexus market. These users are very consumption focused and less engaged with applications.

Amazon has continued to push the quality of their products and can now compete spec to spec with any top of the line Android or iOS device. Their advantage is the Amazon ecosystem (which many tech writers scoff at), which is more accessible and connected with prime on their devices.

How can other operating systems learn from these cases? The owners of new operating systems need to provide an easy development platform. Many of Android’s applications are developed in HTML5 which should make it easier for porting from one OS to another. Another option is to partner with a third party company (if you know about it or not) like Microsoft did with Blue Stacks where it is possible to play any Android app on a computer. Google is doing something similar with the Chrome App store and browser, essentially turning any Win8 machine into a Chrome OS computer. Firefox OS could go this route on any computer and help to encourage developers to think multi-platform like this. Of the two problems, I believe that the app problem is the easier one to solve assuming it’s easy and there are the right incentive for developers. There are many platforms or tools that can even the playing field. Including marketing that users are able to use other platforms on your platform.

The more difficult type of content to pull is the licensed content from the RIAA and MPAA type organizations. I think that there could be a way for this content to gain the same feel as the Amazon experience. A mobile OS could partner with either Hulu or Netflix to provide an exclusive or personalized experience for the app that allows tighter engagement, then partner with B&N and build a strong app presence for the Nook. The next step would be to develop a seamless transition between the Nook application and Netflix/Hulu so that on one hand you knew when you switched, but it felt painless and enhanced the experience. Such as recommending books or movies based on your consumption of the other.

Finally, I think the crucial step is to find the right market. There are tons of under served markets especially in the smart phone/tablet sector. Firefox OS is going after the extremely low budget market, while it’s likely that both Ubuntu and Cyanogenmod are going to be going after the extreme high end market. I think those two are going to have more competition with the Nexus line up of devices and the extra support Google is providing to non-Samsung manufacturers like ASUS and LG. Google is doing everything they can to keep the market competitive and not owned by a single manufacturer. Cyanogenmod and Ubuntu could also work those same manufacturers to help them develop other markets that aren’t served by Google.

I think that the battle is going to be on the low budget space. Amazon is working hard to capture that with powerful but affordable tablets that are subsidized by ads. While Motorola is going after a similar market with the Moto G, a high power phone that is affordable. However, if a company looks at the base of the pyramid they are likely to find a huge untapped market that will never even own a laptop. They will go from a phone only capable of texting directly to smart phone or tablet. Developing tools that these underserved users can exploit will create a huge market that will catapult the operating system past all the others in global market share. It’s just a matter of figuring out how to survive on little to no margin.

Content is king, but if you build it will they come?

We are in a time when the number of operating systems are growing incredibly rapidly. This is essentially a throwback to the time when every company that made a Mainframe or Minicomputer developed their a custom operating system for that line of systems. This was because it was difficult to translate operating systems from one system to the next, each system had such radically different components that were hand built by the engineers designing the system, and the OS was a differentiator on the market that would increase sales based on its capabilities.

As it is the mobile operating system market has already gone through at least one round of expansion and contraction. Blackberry is on the brink, Palm was bought by HP and then sold to LG, Windows Mobile replaced by Windows RT (or just Windows 8), Nokia’s Symbian, Nokia’s MeeGo, Samsung’s operating systems Pre-Android Bada, and there are likely others. In general these have contracted down to two primary operating systems: iOS and Android on mobile. Windows is still trying to threaten with Windows 8 (the ARM version) but their market share is very limited (4.5% in August of 2013). Which essentially puts it down with all the other new operating systems that have recently come to market.

In my opinion there are two front runners for OSes not based on Android that have a chance to take market share. The first is Firefox OS, which has just begun shipping phones. I would argue that Firefox OS is actually more similar to Chrome OS than to Android because it’s very webcentric and focuses on apps that can be developed for Firefox and HTML5. I believe this does allow for a great deal of flexibility as Firefox is a great brand and already has a set of applications for the browser. These, hopefully, will be easily transferred to Firefox OS from the browser.

The second OS that I find especially interesting is Ubuntu mobile OS. This operating system I believe offers the future path that all OSes need to be considering. While running purely on battery it enters a scaled down operating system and power consumption, but when the phone or tablet is plugged in it converts to a full blown Linux operating system with a significantly higher level of processing power behind it. I believe that in the long run this type of operating system and processor combination will ultimately be the future (Samsung is doing some of this with their 10.1 2014 edition), because we will want to eliminate as many of our computing devices as possible. Tablets are already beginning to do this, and with the Phablet tablets are being replaced in some sizes. The lines will continue to blur and I think Ubuntu will be in a unique position to take advantage of that in the upcoming year.

There is one other dark horse OS that I know very little about, it’s Samsung and Intel’s joint venture. It is Linux based like Ubuntu and Android and it’s called Tizen. This has little to no adoption, but could be a player in the very low cost market. Which is where Firefox OS is positioning itself, while Ubuntu is putting itself at the high end market.

As for the Android derivatives, the most successful and largest threat to both iOS and the general Android platform is Amazon’s Fire OS. Amazon has had a long practice of pushing content over the cost of the product. In fact with most of their Kindle products they are barely breaking even or making pennies on each one sold.

The other derivative is also wildly popular but with a specific type of user. Cyanogenmod has offically become its own company and recently raised $23 million from venture companies. This is going to be a change for Cyanogenmod because they will not longer be able to use the Play store, which may not be that big of a problem because they’ve had an underground app store for some time.

There are others, I’m not trying to display an exhaustive list of mobile operating systems. What I’m trying to display here is that there’s a lot of competition in the mobile operating system space that is only going to become more difficult.

For a mobile operating system to be successful they need two things, applications and content that is viewable in those applications. This is the number one thing that most tech pundits talk about when discussing which platform is better between iOS, Android, or Amazon. In fact, they argue that Amazon’s weakest because of the limited number of apps partially because they do not have access to Google Play. Currently, Android and iOS are well over a million apps each. Which essentially means that they both have a huge number of apps and most of them are never used. It will take years for Amazon to come close and even longer for the other OSes to reach those numbers.

How can the other operating systems over come this limitation? I’ll answer that question in my next blog (published on 12/20/2013).