Tag Archives: technology

Disrupting Mobile Phones – Google’s taking the lead and Apple is going to lose

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http://news.phonebloks.com/

Photoblok’s high level picture of their design

For some people, Motorola’s Project Aria, in partnership with Phonebloks, is going to be a game changer, while others are kind of like, meh. I think that the end result of this phone will actually be a game changer, but not everyone will switch to this format of phone. Many people will continue to buy phones that have been designed for the full experience. However, I do think that theses phone will significantly impact in how many people think of phones.

These phones represent a disruptive shift for the phone industry. Why are these disruptive when I said that Kayak isn’t disruptive? Well, in the book Innovator’s Dilemma Dr. Christensen argues that when new industries are formed the leaders are companies that are able to combine all the pieces that are needed for producing that good under one roof. In the case of airline travel all the booking used to take place through the airlines, eventually this was outsourced to Travel Agents which were something of an extension of the airlines. The first disruption came when other groups were able to use the internet to book reservations. The act of reserving a seat on a plane became decoupled with the actual flight and service.

So, in the case of mobile phones, specifically smart phones of course, the most successful firms were the ones that were able to combine everything you needed for the phone to be useful. Blackberry did this, but Apple was clearly the best at it. The original iPhone was basically an iPod with a cell antenna in it. This was an amazing thing though. Apple had disrupted the music distribution industry with iTunes and was able to leverage that innovation into smart phones. This of course was a disruption in that industry because everyone was focusing on productivity first, Apple approached it from a content perspective. Content always beats out productivity. In a very real sense, the market changed over night. Apple owns everything in their cell phone, the OS, the design of the chip, the distribution network for apps, music, movies, etc. This is a very classic example of fully integrating as much of the supply chain as possible.

This is exactly how computers started. Large companies like DEC and IBM built everything for a computer. The boards, the operating system, the software, and the interfaces. These companies were large and structured in a way to make money from extremely expensive mainframes which had a very small market. Between Xerox and IBM the personal computer as we know it today was invented.

Our PCs today are modular, which means that every portion of the computer can be built and designed by different firms. This allows a lot more innovation across the platform because it doesn’t rely on one firm to create everything. It allows specialization and diversification for an assembly company. It was because of this modular nature that Intel, Dell, and Microsoft became successful. They were able to leverage the platform that IBM delivered with the PC and grow and develop new capabilities.

This modularity also allowed just about anyone that wanted to the capability to built their own custom made computer. This has become less so with laptops – you can’t buy an empty laptop but you can customize it from a company. This just isn’t the case with smart phones – which are essentially mini computers. The new tablets coming out are as powerful as computers from the early 2000s.  The modularity of PCs offer an additional benefit, you have the ability to easily fix them. If your processor dies or your graphics card does you can buy another and simply pop it in. Even if the motherboard goes, you can still replace that and plug all your existing components into the board. The case is the only thing you don’t have to change if you don’t want to.

With phones the screen is like the case. You don’t really need to upgrade your screen every time. Especially with how hard the screens are unless you drop the phone and crack the screen you don’t need to replace it. Furthermore, we’re getting to the point we are with TVs that the resolution of the screen isn’t going to make much of a difference. Yes, we’re in a DPI battle between Amazon, Google, and Apple but we’re getting close to the point where we can’t tell the difference. Which means that the screen is a perfect thing to act as the phone’s “Case” for modularity purposes. The modularity will help immensely with repariability, which current scores pretty low, if you’re interested in those scores check out iFixit.

So, how does Phonebloks come into all of this? They are essentially pulling an IBM by creating a system that can be modular. Google’s Android will be the operating system of choice, but it’s likely that even this could be flexible in the manner that PCs are today. It’s unlikely that iOS will be on these phones legally, although I’m certain someone will figure out a way to install the operating system on these phones. This will hurt Apple in the long run as people will not be using their operating system will leave their ecosystem and prevent them from making as large of revenues in the future. People will still buy their products, but there will be much less sales. Apple could be repeating history if they don’t offer to sell their operating system for phones like this.

Why do I think that these phones are going to be winners? Well, it will increase the longevity of the phone. With phones costing upwards of $600 for the top of the line phone anything that can increase the length of time that a person is using one is a good thing. Secondly, as Android and other OSes evolve they require more capabilities from the phone which means older phones aren’t able to use the latest operating system. Buying a much cheaper CPU to install would be a lot better for end customers. This will also disrupt the supply chain as companies like Qualcomm aren’t used to selling directly to customers. Finally, as long as the design is good, then it won’t seem as much of a burden to have the same phone year in and year out. It will require people to think differently, but that’s something that I believe Motorola and PhoneBloks can over come.

These phones are going to change the industry and possibly enable other companies to develops phones in the same way. Hopefully they pick one standard interface like the Motherboard that all companies conform to. This will allow companies like Google and Microsoft to go back to innovating on operating systems and to get out of the phone building business.

Goofy Stock photos might not be so silly any more

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Silly Stock photo

@NFEN and @Cheddarchezz having a conversation about “hacking”

I just saw a few people that I follow tweeting about trying to take over Youtube. There’s a Meme on Youtube right now that’s been going on for a while as a form of protest over some of the recent changes to the comment policy, copyright policy, integration with Google+ and probably a litany of other issues. To the gaming community Youtube is a dying platform.

What struck me about the conversation wasn’t really what they were talking about, but the stupid stock photos that are supposed to represent “hackers’ breaking into a network. For some absurd reason stock photography companies almost always put them in the same outfit they’d be wearing if they were breaking into a house, mugging someone, or doing some other nefarious activity. Clearly it’s just a ploy to help people understand that the person using the computer is up to no good, but it just looks ridiculous as almost no one wears any of those clothes while using the computer. So instead of making it look like a criminal it just make it look like an idiot. However, I think that with some recent revelations about the FBI and the hacking process called “RAT” these imagines are looking less absurd. Not that I’ll go out and buy clothes like this to work at my computer on.

One of the more recent Edward Snowden revelations has to do with breaking into personal computers by the US government. This isn’t really shocking, nor is what they do when they are on the computer. The FBI has admitted that they have the capabilities to hack into your computer and activate your webcam without turning on the indicator light. These capabilities aren’t new. In fact Ars Technica did a report on this in the kiddie hacker community called RAT. I imagine that some of the tools that my friends used to use while we were in highschool to remotely open a CD drive or type messages to each other operates in a similar fashion.

So, if you are hacking a computer does it make sense to take precautions against showing your face? It might or as the Ars article suggest, just cover up the camera.The difference is that you don’t know if you’re under surveillance or not. It’s also not clear if the FBI only means laptop webcams or if they are able to do the same to a smart phone or tablet. As the ACLU mentions in one article “we’ve never had discussion” about law enforcement hacking into computers. This is part of the reason there was a petition for We the People to update our privacy laws. Regular mail and packages are protected by the fourth amendment while email is not. Using a web cam with or without a web cam constitutes a much larger breach of privacy than just taking pictures through the camera. It’s likely that with access to the webcam the entire computer is open to the FBI, which means that a warrant for a web cam is a warrant for everything you do. If you have services that you’re always logged into like Drop Box or Tresorit those are also accessible through the computer you’re cam is being used on.

We need to have a conversation about the limits of searching and privacy. I don’t want to sit around in a ski mask or cover up my webcam. Users likely need to install firewalls, more passwords, and disconnect from services they aren’t actively using.

Amazon’s potential army of Drones – what’s the point?

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Amazon wants to deliver packages to you in 30 minutes via drone. While the convenience might be pretty awesome. I’m not sure how good of an idea this is going to be. I also think that this points to a broader push for Amazon. In the past Amazon has mentioned how they had plans to sell groceries locally and deliver rapidly. This is currently in beta test with only two cities involved, LA and Seattle. Depending on the size of these drones this will make delivery of groceries much easier and reduce the risk for goods to thaw while waiting for the resident to come home and get the groceries. Furthermore, if these drones are really good, Amazon could time the delivery of the groceries based on when the customer wanted them to arrive at their home. Let’s say you place the order in the morning, but know you won’t get home until around 6:30, you could ask Amazon to deliver the goods around 6:30 so you could just bring them in the house and start cooking.

A few years ago there were some rumors that Amazon was planning on going to brick and mortar stores while everyone else is going more web, web, web. These drones that are in the video do not look like they have the farthest range in the world, which means for a place like my home town about an hour north of Pittsburgh by car and if there was a distribution center in Pittsburgh (there’s not, but there is one in Allentown), the drone would need to fly close to 120 miles per hour. That doesn’t seem likely for these things. They don’t look like they have the speed, they are clearly designed for shorter ranges than that. Additionally, implementing these drones would require significantly more distribution centers throughout the US. Distribution centers work best when there is a need for high volume, high speed, and high variety at least in many distribution models. However, if Amazon were to use retail stores as part of their distribution network and looked to use the stores as the location where the drones would send goods from, this makes a lot more sense. Retail stores aren’t really there to be retail stores, but micro distribution centers.

This would impact the types of items that would be a candidate for Air Prime in many locations, for instance cities with Stores only would have a much smaller list of applicable items. Cities with distribution centers near by would likely have any item up for Air Prime that would fit on the drone.

This is still 4-5 years out from being deployed, so why is Amazon showing this off now? Well, bad press recently. There have been several articles that came out this past month about how horrible the distribution centers are in the US.

All said though, I think these drones point to continued interest in providing different approaches to brick and mortar stores as well as grocery stores. I think it will start out small and grow from there. Amazon will likely build out some stores first with a similar function to Best buy where you can pick up in the store. In later store deployments they will have options for Air Prime and pick up in store for certain items. It will certainly change things for Amazon workers and will change the way the distribution centers are managed. They may simply become hubs with a lot more being pushed out closer to the end customer.

3D Printed Gun, Robots, and the future of food pricing

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Recently there’s been a company based here in Austin Texas called Defense Distributed, which has been garnering a lot of attention. This is due to the fact that first, they developed a 3D printed magazine for an AR15. Then the decided to develop 3D printed versions of portions of the gun itself. These parts are being printed in plastic, so it seems unlikely that a plastic gun would work right? Well, the lower receiver for the AR15 can survive shooting 600 rounds. That’s a big deal. The first version was able to shoot one, the second only 7. As of yesterday they released a fully printable handgun. Due to restrictions in the US gun code a gun must have a certain minimum weight of metal to be detectable by metal detectors (125g). I think that this will have major ramifications – I’m not even talking about gun rights, or gun ownership or gun whatever. I’ll discuss those in a later post. Below is a video of the “Liberator” in action.

How is this a big deal in other ways than just Gun rights? Well, several months ago a book came out called “Race Against the Machine” which argues that we need to figure out how to work with robots and computers in an effective way to maximize the returns for both workers and for the owners of the computer/robots. One of these robots they discuss is a $25k robot called Baxter. This robot is extremely easy to program and control. It offers a lot of the capabilities that a low skill employee could offer and more than many expensive robots. In fact we’re seeing this in re-shoring efforts from companies like Tesla and Apple. They won’t be bringing back the old school manufacturing jobs. There will only be technician jobs related to fixing broken equipment, which will be significantly fewer jobs. Even if Baxter only lasts 3 years, it more than paid for itself in being able to operate for 24/7 for 25k in total rather than paying four people more than that each year.

Add in the capability for people to download  designs for guns and many other things from Thingiverse which can be printed from home and how cheap it is to send designs to companies like Shapeways – where you can print in metal, these changes are going to radically change our current manufacturing infrastructure and distribution system. We aren’t prepared for this and it’s going to reduce the number of low end jobs in existence.

Which brings me to the next point. Food prices are high. When people can’t feed themselves there are riots and revolts. We’ve seen this twice already in the past 5 years and we’re poised for more violence by August of this year. According to a study published two years ago food prices are near the threshold level of the Arab Spring. If these prices are still as high as predicted then we could see some serious issues in the next few years unless we radically begin rethinking our economic models.

We’ll be seeing massive disruption and opportunities in the manufacturing space. This will likely have massive ramifications on our supply chain, which has huge numbers of employees. The ability to print your own cheap plastic products could impact toy sales and the retail industry.

Is this bound to happen, no, certainly not. However, 3D Printers are now available for sale at Staples for $1,300 prebuilt, they’ve come pretty close to mainstream. The next step are going to be more advanced printers that are able to print faster, cool faster, print more complex designs with less structure, and eventually we might be able to print metal products on a printer that costs $1300. A lot of people won’t want to do this, but there will be enough where it could have a serious impact on the economy.

What do you think? Am I overreacting?

Looming battle: Content providers vs. service providers

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In my last post about the PS4, I discussed how the PS4 is a long term play and that over time the product will move away from playing directly on the PS4 towards utilizing servers to stream the game to the user. This was an argument to counter many PC gamer’s disdain for the specs for the system. Sure, the specs aren’t great, but they are a huge advancement over the PS3, which is still able to play, rather well, new games.

Most of the feedback I got on the article basically went “well that’s great and all, but the infrastructure isn’t there for this in the US.” This is extremely valid feedback. AOL still records $500 Million in revenue from dial up connections. The US rates among the worst in developed world for internet speeds and penetration. Of course there’s the argument that our country is so much larger, well, the EU as a whole tops us, it’s not uniform across the EU, but that still makes it a valid comparison. The other thing to remember, the console won’t just come out in the US. Many of these features will work better in Korea and Japan than in the US. Typically Sony has released different features by region and will likely experiment with the sharing features in Japan before rolling it out to the US, where Sony knows it will have infrastructure difficulties.

This discussion raises additional concerns though, infrastructure isn’t just about the lines in the ground, but also the structure of the service providers that allow access. In the case of the US, not only does quality and speed of the connection vary wildly but we also have more restrictions on the amount of data we can download than other countries. For a typical family you end up buying the internet 2 or 3 times at the minimum (smart phone access per family member and then the main house connection). Each of these connections likely has a different maximum for downloading or uploading with fees for going over this.

This creates a lot of difficulties as we don’t always know how much bits a specific file will use as we access it. In many cases, it likely drives consistent under utilization of the service do to excessive fees and user dissatisfaction for those hitting the cap. Americans are starting to cut the cord in record numbers, my wife and I don’t have TV, just cable internet; I have a lot of options without Cable. This is going to start increasing the rate of frustration users have with caps. I typically watch live streaming video in 720p while my wife surfs the net and watches a show on Hulu.

I have absolutely no idea how much bandwidth is being consumed on a typical night. There is no easy way for me to measure this or plan for getting close to a cap. Furthermore, both my wife and I use our phones to access the internet, listen to music, watch videos, and play games on our phones. Again, all of these use bandwidth and likely push us against our cellular plan. Sure there’s meters for these, but they are notoriously inaccurate.

This issue with be further exacerbated by the proliferation of cloud services like Drop Box, video sharing on YouTube, streaming new services all the time, and the eventual goal of offloading computing power to the cloud. The measurement of these services will be extremely difficult and planning for how much data these services will require will be absurdly difficult at best for the average user. It is likely that these services will push users over the usage caps on a monthly bases.

I think that we need to start looking for another solution. I think that Google Fiber is a start, it would make sense for Netflix, Amazon, Dishnetwork, Microsoft, Intel, and other content providers to join a consortium that will introduce a new service provider to attack the incumbents. I have heard that Dish is currently working on creating their own system with Google or some other company, I think that this could potentially shake up the industry and allow users more options. There are going to be a wealth of new services that require more and more bandwidth and higher speeds. If these content providers want users to be able to access and enjoy their services they need to challenge the status quo to enable their customers.