AMD, What Are You Doing?

The past few months haven’t been kind to AMD. First Lisa Su, the first female CEO, ousted Rory Read. Now three leaders have left including the General Manager John Byrnes, CMO Colette LaForce and Chief Strategist Rajan Naik. Furthermore, it’s pretty clear that the remaining two leaders long term leaders, Mark Papermaster CTO and Devindar Kumar were sort of bribed to stay with restricted stock. This is on top of delays in their desktop, graphics, and mobile chipset and layoffs.

I think it’s pretty clear that AMD no longer has a clear strategy. AMD, while I was working there, was starting to put out some cool stuff that could really define the future of computing. Their APUs were best in class and could have been deployed in a lot of really cool applications. However, those never appeared to have materialized and now Intel is starting to attack the SoC market. While Intel’s Iris graphic chipset is way behind AMD in pure power, I think it’s going to play a serious role in the up coming years especially since Intel is leveraging a similar enough design that they are able to use the Open Compute Language that AMD championed.

Another area of concern for AMD fans is that John Byrne, shortly before his departure, announced at CES that AMD was steering clear of the IoT phenomenon. Which I found surprising considering that their strategy, only a year and a half ago, was to conquer the embedded computing space. Since they restructured again, that’s about 4 times in the past 4 years, they have clearly decided to forego that space. The IoT chipsets are likely going to be a disruptive technology to computing. For instance, this computer you can dock and upgrade every year for about $200, while Intel released a full Windows computer on an HDMI stick for $150. In the past I wrote that I thought that the dockable phone that would turn into a full computer would be the long term future, but these are the incremental steps to get us there.

AMD clearly doesn’t see these spaces the future. They are currently looking at where the market is now and not truly planning for the future. I was excited whenever AMD announced the partnership with Gizmosphere hoping it could compete head to head with the Raspberry Pi, but AMD is clearly failing to embrace that movement, since those devices would be powering the IoT and the maker movement. On the otherhand Intel is rushing to embrace these groups and sees these people as the way into attacking Qualcomm, Samsung, ARM, and Apple’s designs.

Low power is going to be vital for the future expecting a smaller and smaller niche of applications. In these applications, excepting graphics chips, AMD is getting crushed. Even in the graphics space AMD is starting to flounder with poor quality, as @NipnopsTV reported with his year old or so 7970 card.

All of these should be a concern for AMD fans. The company is not investing in the disruptive technology hitting their industry, their market cap is only $2.06B and their shares are at $2.66. They may be positioning themselves to get bought or could be at risk for a hostile take over for their IP or pushed into bankruptcy since their IP might be worth more than the company operating as it is. Look at Nortel to as an example where it’s IP was sold for $4.5B while everything else was just ditched.

Could we eventually see a Samsung R290 and a Samsung Kaveri processor? They gobbled up a ton of AMD’s engineers in 2013 definitely could happen.

Retail and payment intermediaries

In recent months there have been multiple instances where a major retailer has had their data infrastructure breached. This has resulted in millions of customer’s credit card information being compromised and stolen by some variety of criminal organization. It’s likely that the organization used skilled computer experts to hack into the system in some fashion. I also would not be surprised if some type of social engineering was used to ease their access to the data systems. Furthermore, if their Point of Sales devices were not fully secure that information could be gathered using a credit card that could also read information from the system.

This is the problem that applications like Google Wallet and Paypal are trying to solve. They are trying to position themselves as an intermediary between the customer and the retailer to protect the consumer and provide a common transaction method for many platforms including in person point of sales. I think the fact that I’m just now thinking about this has really shown that companies like Google and Starbucks have failed at showing where the true value in their product is.

I didn’t come to this conclusion without help though. Truthfully, it’s because of PalPal ads that I’ve been seeing on Huluplus. This ad walks through how unsafe we are using our credit cards with online retailers and that they protect your creditcard and bank account information from ever being seen by the retailer. Which, is a really powerful argument to use their services. Of course, that’s if you trust PayPal as an organization.

Personally, I’m concerned about using PayPal as they’ve had their own networks hacked with some account information stolen. They aren’t perfect, and honestly it’s likely going to be impossible to maintain and prevent any data breaches, but a company like PayPal should have that as their goal.

With that in mind, it’s kind of helped me think of the true value of both cash and a BitCoin like solution. At this point, it’s pretty clear that BitCoin has been compromised at least on some level. It’s not truly anonymous any more. Cash is still though. It’s the best way to buy anything from a store. It also reduces the rate that you spend your money compared to buying everything with a card. As you actually see the money disappear. Although, some times it doesn’t feel that way, especially when you’re out drinking at a bar.

I’m not sure I truly trust any of the large companies that offer these intermediary services. PayPal, Google, Apple, Samsung, Starbucks, and etc… all have their own version and all of these companies make money by locking you into their services. Google, Apple, and Samsung have the most incentive and potentially access, as they are selling you the only other thing you’ll have with you besides your cards, your phone. Locking you into not just their device but payment methodology is powerful. Not because it keeps you on their network, but also because it provides them with a huge amount of information about the rest of your life. Google likely will already have a lot of it based on your search history, but they don’t know what you’re actually buying. At this point they don’t have the full data to connect search results to purchases. Using Google Wallet closed that gap and provides a really valuable set of data for their customers.

Intermediaries are going to be really important moving forward because they will help reduce customer risk. It’s going to be important to figure out how to balance the risk of not using an intermediary with using one and providing them with massive amounts of data as well as extremely personal data that if all your eggs in one basket could be devastating.

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).

Apple v Samsung: iJury

As most of you are aware Apple crushed Samsung in it’s suit. Every patent of Apple’s was upheld and Samsung owes Apple just a touch over $1Billion. This is going to do a great deal to chill innovation. Many other people are commenting that these patents and the idea of copying isn’t new and that Apple has stolen a great deal themselves. In one discussion with an author at the Urban Times, he seemed to argue that the theft of these ideas is more honest than copying and that Apple was a better company for doing so. Well, there’s a major flaw in that idea, the theft of an idea is essentially copying the idea, the only difference is you act as if it was always yours and that you didn’t copy someone else.

One author thinks that one billion is a small price to pay to be the second largest mobile manufacturer in the world. While I understand the thinking behind this, sure they copied a great deal from Apple and it only cost them a portion of what it could have cost. However, this is a short sighted view. The manner in which Apple has attacked Samsung isn’t going to stop and will likely intensify. The ruling in San Jose wasn’t the only ruling that came in yesterday. In Korea a judge ruled that both companies were infringing each other and banned both products from being imported to the country. The judge also found that Samsung didn’t copy and in the UK a judge also said that Samsung didn’t copy and wasn’t cool enough to be confused with an i Anything – ordering them to post it on their website.

The idea that Apple’s design for the phone’s desktop being unique is a bit absurd. They simply changed the way the buttons looked, but there had been interfaces that were extremely similar for years. I had a Sony Cliq PDA in 2001 and 2002 and some of the way that product looked was similar to the iPhone. Apple repackaged things extremely well. Judge Koh did not allow Samsung to present all the information to the jury related to prior art, which certainly didn’t help Samsung’s case (Samsung released it to the public though).

The other major issue with this case is the idea that laypeople can really understand the issues with patents. They are difficult to understand, written in legalese and intended to be so broad that they can be interpreted in many different ways. I’ve read through several patents and they quite frankly are confusing and in many cases don’t convey the information they are required to convey (how to manufacture or build whatever is patented).

For a patent to be valid it only has three conditions to meet: Novel, which means that nothing like it has been done before; Non-Obvious, which means that (originally) that an expert in the field wouldn’t see this as a natural extension of previous work; now it must be non-obvious to a layperson; the final one is the possibility of industrial application, this means that the technology must be useful in some way. Many of Apple’s patents do not meet the threshold for the first two, novel or non-obvious. Now of course people that disagree will argue that in hindsight these patents are obvious because Apple did such a god job at inventing them. I disagree primarily because many of the patents are reapplication of ideas from the computer to the smart phone.

I’m extremely worried about the future of innovation in light of this ruling. I think that there will be serious repercussions and whatever comes out of this will be terrible for consumers.

Finally check out this video discussing what Apple has invented: