Interview on Twitter, Blackberry & disruptive business models

While the market complains that the it is an overhyped initial public offering. Many of the detractors are using Twitter to voice their concern. Ironic, isn’t it?  Post IPO, the stock will most likely rise to $30 and wait for Twitter to show some lift in advertising revenue. This will come as the media dollars need a home and their are few options for the digital buyer.

Twitter has moved from a microblog to a trend-crowd-sourcing destination.

1 in 5 have accounts but more and more will use the service to scrap instant and succinct info from the web. With this as a unique value prop, Twitter will capture revenue and drive profit over the next 48 months.  http://watch.bnn.ca/#clip1036995

Andrew Hsu: The Invention of TOUCH & What’s Next

Bill Gates stood on the stage at the (now-defunct) Comdex show in Las Vegas in 2000 with his schoolboy smile touting the new “tablet PC.”  Penned on the tablet in Bill’s handwriting was “Tablet PC is SUPER COOL!”  Behind the stage a backlit sign read “experience the evolution”.

Microsoft evolution never became a revolution because the company’s disparate and factional divisions failed to work together to vision and implement a turnkey experience.

The revolution happened in 2007 with the launch of the iPhone.

(As with most industries) evolution is often interrupted by black-swan revolutions. Sound (voice communications), touch (pinch and zoom navigation), sight (Heads Up Display [HUD]) all changed the way consumer used the phone and is one of the gating factors in technology adoption.

Knowing what technology will help us evolve and what technology revolutionizes is more of a human insight that a science. Ergonomics help us rearrange the digital furniture; however, changing the way we connect with this communication device is profoundly human. What is beyond touch, what is the next revolution?

A Short History of Touch

Although Gates told reporters off stage in Las Vegas that how excited everyone was in Redmond (Developers were checking the tablet out to play with – “a very good sign,” he said) 6 months later warehouses were still full of the Tablets. Q2 shipments had plummeted 25% with a meager 100,000 total units sold.  Mike Magee, technology writer for the Inquirer wrote despondently that “This is another classic case of IT firms thinking they know what technology people will like, and failing to take off the blinkers.”

Touch appeared back in 1971 over a ten year period began to appear in the form of  infrared technology (such as the Hewlett Packard 150) which show up in various military applications. The IR matrix of beams are used to detect a finger touching the screen.

But the IR technology was expensive and the technology gained more mainstream adoption was “resistive touch”.

It was a simple concept. Resistive touch screens were built using two layers of conductive material (Indium Tin Oxide). The two layers were separated by a small pocket of air. An action was triggered when a stylus, or other object, pressed the top layer into contact with the bottom layer.

The limitation was it was like a pin board. You could tell the device where you were move the point of contact. But it did not have multi-touch functionality essential to pitch and zoom navigation.

Mass-market adoption was not an option:

  1. The screen wore out
  2. Required a stylus pen for accuracy
  3. The air pocket made the screen appear hazy
  4. OEMs had to build a clunky hole in the casing (as the top of the resistive sensor had to be exposed to user’s input)

This is the technology that Bill Gates was holding up at Comdex in 2000*. The unit’s resistive touch stylus was used to input into clunky dialogue boxes to input text and commands. The entire project was “resistive”. The Office team refused to build for the unit adding to the painful UX.

*[A technogeek aside: Microsoft’s Surface touch solution uses Frustrated Total Internal Reflection (FTIR)]

Meeting Andrew Hsu

In 2013, I ran an event on connect screens in New York. I wanted to tell a story about the importance of the screen in the evolution of mobile phone design and adoption. I invited Professor Donnell Walton from Corning Glass, as well as representatives from Microsoft’s Surface team, Google Glass and was looking to find a speaker to explain “touch”.  Maybe I could locate someone from the scuttled Apple Newton team?

I found, much to my surprise (like an anthropologist that finds that we did not evolve directly from monkeys) that the precursor to the 2007 Apple iPhone was a skunk works project headed up by an engineer called Andrew Hsu.

Andrew developed and patented a capacitive touchscreen suitable for mobile devices way back in 1999. He developed a system which computes the location of a user’s fingers based on how they change the capacitance values of an invisible matrix of electrodes.  The capacitive touchscreen did not suffer from the various user experience drawbacks of the resistive touchscreen – it does not wear out, it does not cloudy the underlying display, and it does not require a big hole to be cut into the device casing.  But most importantly, it enables natural finger input.

This capacitive touch is not a mouse click. It is not a data poke with a Stylus. Andrew Hsu’s touch allowed us to communicate in a very human way with pointing and pinching space.

Don Norman is often quoted about touch.

“We’ve lost something really big when we went to the abstraction of a computer with a mouse and a keyboard, it wasn’t real . . . swiping your hand across the page  . . . is more intimate. Think of it not as a swipe, think of it as a caress.”

While mobile success is almost always based on interface and usability, it took seven years for Andrew Hsu to convince the industry to adopt the technology. Revolutions come in simple packages: text messaging, Apple’s mobile application SDK, gesture-based gaming.

We talk about the consumerization of technology; touch was the humanization of technology. In a world where data appeared cerebral and uninviting, we suddenly can interface in this data and content as we do with real object. The physical world became extensible and less scary.

From Click to Pinch & Zoom

In 2006, handset manufacturer LG trialled launched capacitive touch with their designer Prada phone. The LG phone had all the correct ingredients – capacitive touchscreen for intuitive finger input, high resolution display, and one of the first graphics co-processors in a handset. Prada brought style to the table and LG brought the insight that touch that would ultimately inspire the new mobile consumer.

But we had to wait one more year.

When Jobs returned to Apple he shut down the Newton project.  This legacy 1993 technology had poor handwriting recognition and had little traction in the market. But Andrew Hsu’s capacitive touch appealed to Steve Jobs UI sensibilities.

As a post Newtonist, Jobs once said “we are born with five styluses on each hand”.

When he introduced the iPhone, we knew that being able to move large format data on a small screen with a pinch and zoom changed the way the consumer saw their mobile device.  Where Steve Job went further than touch was his insight in designing a full edge-to-edge screen that had the dimensions of a letter size piece of paper.  The screen called out to be touched, worked on and paged through.

Although touch revolutionize the phone and lines weaved around the block for new product releases of Apple new “human” interface, the consumer was still nose-to-screen, bumping into lamp posts while elegantly navigating data a hundred miles away.

“Bump” (the file exchange application recently acquired by Google) and other application including NFC payment extending this love of tactile interface by promote social touch between other phones and public devices such as POS.

Gesture: Moving Beyond the Cool?

While touch is an important sense, sight is essential for navigation. The next revolution is to make data come to live seamlessly in the real world.

When we talk about HUD, we think of the new Google Glass and the opportunity to integrate data into our line of site. In parallel, see the world and the data behind it. Integrated cyborg solutions like Google Glass and future visions of embedded epidermal circuit (seen in Total Recall).

Microsoft had the lead in a new HUD interface using gesture.  XBOX Kinects was the one product that Microsoft was seeing growth in the consumer sector. However, the leviathan was unable to make this a multiscreen strategy fast enough.

Moving gesture elegantly to PCs and window phones never happened. There is a Kinect for Windows but it lacks the software for controlling the interface.

The Leap motion controller is a step forward.  A small multiscreen sensor box not tied to console in the dean but with the ability to tether like a dongle to a wide variety of screens and deliver better sensitivity to Kinect. It has multiple commands down to finger level accuracy.

Andrew Hsu still believes that touch is less ambiguous on the consumer navigation intent. “How can you disambiguate between “accidental” and intentional gestures.  The beauty of touch interaction is that you basically get user intent for “free” – a user typically only touches the device when he/she wants to interact with it.  The cases of accidental activation are much lower and easier to reject.”

Arguably HUD is a solution looking for a problem. Like the inspired Seque cycles, the inventor’s goal was to develop an urban consumer transport vehicle but he failed to get significant adoption. The Segue has now found a home with urban tourist touring groups and airport police. Why? It provided an elevated view with minimal multitasking: Ideal for tourists and law enforcement.

Andrew agrees: “What these technologies really need to address is what sort of “problem” they are trying to solve.  That is, with capacitive touchscreens, there were certainly a number of value propositions that arguably were superior to the previous (resistive) solution that helped transform/enable touch input.  Natural gestures (HUD) is still looking for a compelling value proposition”

Google Glass is a platform without a certain home. Will “super cool” it has not inspired the consumer. We have not seen the “a-ha!” that Jobs brought to the touch. We know new more intuitive human interfaces are coming. But we need a Steve Jobs to take the technology and humanize it for intuitive consumption.

Gary Schwartz is the CEO of Impact Mobile. Having been at the frontlines of the mobile industry for over a decade, Gary is the author of two books, “The Impulse Economy: Understanding Mobile Shoppers” and “Fast Shopper. Slow Store: A Guide to Courting and Capturing the Mobile Consumers,” both of which highlight the current state of the mobile commerce space and chronicle the significant impact that mobile is having on consumers, retailers and brands. Gary is also a chair emeritus for the Interactive Advertising Bureau and the Mobile Entertainment Forum NA and global director of the Location Based Marketing Association.

Apple feels more gravity. What to do?

by Gary Schwartz  (24/07/2013)

In a post-Job’s era is Apple losing its innovation edge? While in Q3 ’13 results, Apple was upbeat on earnings, its revenue outlook dropped precipitously.

During a conference call with analysts to discuss its quarterly performance Apple’s CEO Tim Cook pointed to enterprise and horizontal product growth:

“From a growth point of view for Apple, our key catalyst will always be new products and new services in existing categories that we are in and in new categories. In addition to this, we have opportunities in distribution in terms of expanding our retail stores, expanding our online store.”

Apple continues to hold ground as an aspirational brand but the market for high-end devices is fast becoming saturated and the only growth window is low-cost devices in emerging markets.

Tim Cook tries to sound bullish: “I don’t subscribe to the common feeling that the high-end smartphone market is at its peak. I don’t believe that, but we’ll see.”

However, while some operators still are required to meet volume guarantees made to Apple, this will not continue. Consumers are no longer buying new phones based on glamorous launch campaigns that tout better cameras, higher-resolution displays or a reduction of a millimeter in its profile.

Apple’s needs to keep its loyalists buying across its portfolio of screens. Apple must focus on its multiscreen strategy with ‘Maverick’ and continue to expand its cloud and iTunes wallet positioning.

From Singapore to Moscow: Is OPEN a four-letter word?

by Gary Schwartz  (23/07/2013)

I recently returned from speaking in Singapore at the regional CommunicAsia conference and Rasia.com event in Moscow. Innovation was a central theme.

In Singapore I was in a discussion with Google, SingTel and Microsoft. I asked Doug Farber, managing director for Google in Asia-Pacific, if mobile innovation is stifled when there are only a few power brokers that control the mobile ecosystem.

Google has always had a “healthy disregard for the impossible,” Mr. Farber said. Agreed. However, while Google has a healthy internal innovation culture, is it allowing the ecosystem to do the same?

I recall Richard Kramer from Arete Research’s jab that in mobile O-P-E-N is a four-letter word.

There are only a few powers that are trying to lock the mobile ecosystem: Apple, Amazon, Google, Facebook, Microsoft and Du. And while Apple and carrier networks are unabashedly closed fiefdoms, Google’s Android empire may not be truly open.

“But,” Mr. Farber said, “I am the open guy.”

“Open only on the front end,” responded Bill Chang, CEO of group enterprise at SingTel.

Outside of a few global plenipotentiaries, mobile developers have had to pick from the crumbs at the table.

Twenty-five applications command 50 percent of the app store revenue. The billions in revenue do not feed many mouths. The average developer lives on $5,000 per month, which is a bread-and-water diet of $60,000 per year, said Richard Kramer. “Where are the developer’s yachts?”

Hardware innovation has flat-lined and power is exclusively in the hands of Apple and Samsung.

The yearly CES announcements have underwhelmed and recently left the Las Vegas melee altogether. Another handset release with faster “mega” screens does not excite the crowds. With $75 smartphones entering emerging markets, smart has become a commodity.

SingTel’s Mr. Chang said in a market where companies are “cost-cut to death, it is difficult to drive innovation forward. Mobile-first is a challenge.”

Mr. Chang talked about the importance of the CIO is this process. He plays the initialism game that we all do at public events: “The CTO is now the chief transformation officer and the CIO the chief innovation officer.”

But what does that really mean to companies trying to navigate the mobile marketplace?

The CIO never had power, said Michael Thatcher, chief technology officer of Asia for Microsoft. “It is only when something is broken they have power. How can we advance this and stop being tech centric? Stop being reactive. Follow the money.”

But is there money in mobile innovation?

Outside of the big six ecosystem players, there are few that command significant market share. We live in an “app store economy” where we all need to play the piper 30 percent and never own the customer. To make money on Apple’s SDKs or Google’s, dominant big data position is difficult.

The social leviathans are also closed.

Facebook has built a business on connecting people. With its post-IPO revenue focus, it has worked hard to create a media buying tollgate on the impressions and big data that it owns.

In social portals there is little big data sharing and little opportunity to make money as an outside developer. It is a bigger issue for the entire social ecosystem.

The more that these social portals try to leverage these assets to generate revenue, the less socially authentic they become to the consumer. Our social spaces have become more like driving down the public highway.

Social portals such as Tumblr and Instagram have generated such value in the market because they remain authentic – pre-revenue and pre-commercial, of course.

Everything is disintermediated. App stores and social portals are all controlled by Facebook, Amazon, Apple, Microsoft and Google, and somewhere we all have to pay the piper.

Telecommunications is the history of open and then closed systems, from RCA closing down FM Radio and early television.

It is the same recent history of Apple disintermediating the wireless carriers with an “Internet device” and then turning around and using the same iPhone to shut down the mobile Web with a closed App Store.

Are we entering another closed loop where innovation becomes stifled? What does this mean for business?

Google sponsors the ship, “Unreasonable at Sea,” to sail around the world evangelizing entrepreneurism and innovation. How can we make the power brokers more unreasonable at home?

MultiScreen not Omniscreens or Second-Screen

I strongly believe that the space between the screens that allows the brand to connect their consumer experience is critical. I call this “digital Velcro”.  Connecting your consumer screens seamlessly throughout their day is one of the most important challenges we face.

Additionally, one media experience plus other media screen experience equals a multiple of value to the brand: “1+1=3”  This is not a second screen debate. It is a consumer journey challenge that impacts all brands and retailers in their media buying and engaging. That is why we focus on the MultiScreen not the Omniscreens or Second-Screen discussion.

Next week on Tuesday and Wednesday in NYC I will be hosting the MultiScreen Summit. We incubated this event concept in Los Angeles, last year and have expanded the MultiScreen Summit to include Abu Dhabi and Berlin (which will be held in October). Our goal is to establish a global platform to address the growing needs of business to create a seamless digital experiences across their customers, fans, audiences, shoppers . . . screens.

So who owns this? CIO, CMO and CDO? CIO needs to get together with the CMO and the Chief Digital Officer (CDO) needs to become the Chief Disruptive Office (CDO) making backend process screens work with marketing engagement on the consumer screens.

Data has always been important. In a connect device world with location and behavioral
MultiScreen economy and media strategy will become the most important element tying a brands strategy in place.

The question is: How can buyers think horizontally across their consumer screens and add value to their vertical investments? We need to buy media both vertically and horizontally. Small screen buys need to have native mobile strategy attached that go beyond CPMs and drive mobile conversion goal into the cloud and into the mall.data, this consumer journey is more complex than we had assumed. We now know that we need to work harder to drive real shopper insights and shopper marketing goals. Data tools we can use now include location, screen insights and digital relationship building.

As the MultiScreen Summit Chair, I am so grateful to have such an remarkable group of media thought leaders onstage next week at the MultiScreen Summit, June 11th and 12th.  www.thescreensummit.com.

SCREEN WARS (Digital Media Forum Keynote 2013)

In Dubai talking to agencies and brands about “digital velcro”. How linking content seamlessly between one screen plus other consumer screen equals a multiple of value for a brand.  20  mins – view here.

Premature Technology Arousal (PTA) in Barcelona

To sum up Mobile World Congress 2013, I will borrow from Peter Marx, head of business development at Qualcomm Labs. Peter talks about a tendency for PTA or (for those in the know) Premature Technology Arousal in the mobile industry.

Much of the MWC 2013 floor area at the new Fira Gran Via venue exhibited PTA or Premature Technology Arousal. Solutions that are excited about being solutions. Solutions that are too early. Solutions that are missing reach and frequency. Things that are just not simple enough to drive adoption.

Even before 70 thousand executives hit the show floor, there were signs of “PTA”. From the Near Field Communications (NFC) show name tags that tried to emulated plastic (but that few used because you still needed to show the plastic) to tapping on Coke dispensers with cloud-base wallets that are many quarters away for mainstream adoption.

Booth after booth in this 1.01 million square feet techno-playground displayed incredible solutions and screens.  But the real story to follow was how each solution quietly added value to a given business ecosystem. There was an invisible hand playing connect the dots. Here are a few examples:

The Invisible Google Hand

Google was almost absent – unlike the MWC of 2011 and 2012 where Google groupies ran from partner booth to partner booth in search of cute Android pins. But Google was most definitely on the floor. This year the company is wisely playing “powered by Google”. They are the dark silent type. Turn left or right in every hall, Android is the fuel this industry is consuming.

The same holds for Qualcomm. They are the chip manufacture that is quietly taking the lion’s share of the revenue on each global handset. (Intel just cannot seem to create a competitive landscape.) Qualcomm Labs is building in consumer identity and credentials onto its “platform” hoping to not only power the connected device but also own the big data behind the user. When Qualcomm demos a vision of a home of the near future, they power many of the moving pieces.

The Samsung Show

While Qualcomm’s chip and Google’s OS were the main stories in Barcelona, another key and not so silent player is Samsung. (So much so that my hotel concierge asked me if I was attending that “Samsung” show that was in town.)  The word that floated above the white new-age Samsung booth was “innovation” but the innovation is not just the 3D camera or the ubiquity of the new S-Pen. The innovation was in their business model connecting their screen across the consumer journey. The 3D camera sells their tablet and television. The S-Pen and its SDK allows for ergonomic continuity across their new tablets and fablets.

Mozilla is other important story in Barcelona. Using the Firefox browser on lower-end ZTE devices to run the camera, map and  . . . oh ya the browser was a definite tech-turn on. Moving the developer and more importantly the consumer out of the (Apple-invented and dominated) app store into the real world super-app is an inevitable step and fundamental to our mobile evolution. The quicker the industry can move away for relying exclusively on industrial design and the app storefront as the sales tool, the faster we will grow.

2014 Screen Wars

The most important leitmotif was the screen. Not only the proliferation of devices with new form factor and appliance, but the realization that it is in the connecting of these screen that the we can accelerate business models. Samsung, ZTE, Motorola, Nokia all address the consumer journey across all screens and throughout their day. Nearly all marketing VPs had spent their last few months and budget trying to tell this consumer story.

Again while many products had indecent “PTA”, the most important insight was not what was happening on the screen but what companies were doing to connect them seamlessly. The new battle ground this year moving into MWC 2014 will be centered around who can best manage big data, wallet credentials and identity between the screens.

Apple feels Gravity

Jefferies & Co discovers gravity and Apple’s stock plummets. The Wall street pundit says that iPhone slowdown is “real and material” and here for the long haul.

But the most interesting part is the justification Jefferies analyst Peter Misek gave. Misek explained when discussing Apples move from iPhone’s 3.5-inch and 4-inch screens to screens of 5 inches:

“We think Apple is losing the screen-size wars.”

This is the story.When Apple defensively launches an alsoran screen size offered by rivals such as HTC, Nokia, and most pointedly the screen king, Samsung Electronics then the aspirational brand is no longer aspiring.

Screen size will continue to be the dominate discussion and the defining business differentiator. Understand the “consumer’s journey” and produce the size that suits his or her mobility needs.

The iPad invented couch commerce and Apple understood and capitalized on the consumer’s at-home portability needs.

However, in a fast-moving screen war, Apple has not been aggressive over the past four years. Beware falling apples.

Top Ten round up from MWC (in under 100 words)

Besides great tapas, getting caught in a student protest in Plaça de Espanya and a sea of 70,000 deal-hungry mobile folk, here are the Hill’s Notes of Barcelona:

  1. Google wins best event marketing with Android pins
  2. Look to the Cloud for efficacy and checkout
  3. Windows 8 is a’coming
  4. Battle of the screens fragmented size and form factor
  5. Lots of OTT angst from operators
  6. NFC payment take back seat to NFC value add 
  7. Focus on smart management of network load 
  8. Privacy an issue with no obvious solution
  9. Security is now part of every sales pitch
  10. China, China, China