Tagged: HTC

Facebook Has a Phone and Soon Facebook ID May Be Your Next Phone Number

It’s not just a smart move, it is a brilliant move. Facebook brings back the glory of making software. While many large IT companies rushes to control both the software and the hardware as a way to dominate the market, Facebook is attempting to succeed by just being best at designing great software. In a way this is similar to what Microsoft has done through their partnership with Nokia, only at a grander scale. Google must be secretly brooding now. For a moment Google seemed to have it all, software and hardware together set in motion in a big wave overwhelming their long time foe, Apple. But here it is, the nightmare called Facebook is back on the front page. All that money poured into Android and Motorola hasn’t yet given any assurance that it will lead to world domination as planned.

The beauty of Facebook Home, as a concept as we don’t know how successful this is going to be, is its simplicity. Facebook created a social software layer on top of an entire ecosystem: Android operating system, hardware manufacturers, telecommunication networks and application developers.  They have a phone, without having a phone. If there is someone else affected almost as much as Google is that must be Samsung. They have tried hard to build a services shop on their phone for some time, but with not much success. The media still calls the Samsung branded software applications ‘bloat ware’.  And here it is, Facebook just comes along and in one swoop they capture the attention of all those eyeballs. At least what they hope they will do.

The move is brilliant, but it doesn’t guarantee success. Facebook desktop attraction started to lose some of its lustre and consumers have cooled off a bit.  It will be interesting to see how the consumer will feel when Facebook is in their face all the time. Mark Zuckerberg describe Facebook Home as “highest quality experience you can have on Android“. If this is true, then the chances of broad adoption are greatly enhanced, but if not, the brand might suffer.  The highest risk for Facebook is that although this move is brilliant, it may be too brilliant for their own good. Users may feel Facebook is too much into their lives. Success could irritate because by occupying the space in a dominant way it causes resentment.  We have to wait and see.

It Facebook is successful, this may lead to the demise of good old phone number system. Instead of calling your friends using the telephone system, you just talk to  your friends using the Facebook voice or video chat. Your Facebook ID could well be your next phone number.

Tablet Wars 2012: Best Hardware or Best Content?

18 months have passed since Apple launched iPad creating in one single swoop an entire new market. Several hardware manufacturers were selling a class of devices referred to as tablets, but they were based on Windows, the same operating system that powered the PC in general. The iPad tablet used an operating system that was designed entirely for user interaction based on gestures and touch, a proposition that was instantly embraced by the public.

For more than a year Apple has enjoyed almost an absolute supremacy in this market. Samsung, one of the most notable competitors, barely made a dent into that dominance. Late of 2011 Amazon issued a challenge that was considered by some pundits as serious, launching a new tablet, the Kindle Fire. This ménage a trois relationship is still evolving with no apparent forgone conclusion. Who is going to win?

Deloitte predicted in its annual Technology, Media and Telecommunications Predictions that in 2012 almost five percent of tablets will be sold to individuals that already own a tablet. This represents about five million tablets worth between $1.5 and $2 billion spent by people who buy their second tablet. This is quite remarkable, a historic record for any device. But the most interesting part of this prediction is that Deloitte anticipates that tablets will come in a broad range of size factors, not just the iPad’s 10-inch size.

In the quest for satisfying the huge demand for tablets and for carving up the largest stake possible out of this market, hardware manufacturers will try to fill in this space using different strategies. Some will make cheaper tablets, smaller in size or less powerful, but good enough to do most tasks, or larger tablets for more demanding applications, better graphics.

The business model will change. Currently Apple has a huge gross margin of 24%, but this may be about to shrink to more earthy levels. Currently 85% of overall gross margins come from iPad and iPhone. Deloitte predicts that hardware manufacturers will be willing to forgo gross margin on the device now and recuperate that later through profits made on subsequent service revenues: content purchases, subscription and rentals.

This just highlights the real game in the tablet wars. It is not about the hardware, it is about the ecosystem. The tablet is only the sweetener designed to tempt the buyers to enter the theatre and stay captive to content attractions. This is where the real action is. This is where Samsung is at a great disadvantage because it doesn’t have anything that comes close to iTunes. And again, this is not about what you see, the iTunes software, but about the market place behind it where major media houses agreed to sell their wares. The core of the ecosystem is to have this multi-layered engagement that binds the content creators, distributors, networkers, software operating system and device manufacturers together to the level at which the choice is too good to resist and too easy to effect for most of the potential customers.

Amazon is probably the best better prepared to fight that battle. Google is a formidable player, but it has spread too thin and over the years had a few tensed episodes with some of the key participants in the Android ecosystem. The Google market place is at times chaotic, some would say.

What about Microsoft? This is a big unknown. Its marketplace hasn’t competed nearly well with Apple’s iTunes and AppStore. Zune looks OK, but it is not as good as iTunes. The range of offerings makes Microsoft’s global marketplace look like a lemon stand versus Wal-Mart when compared with iTunes.

Apple forged great relationships with major content providers much better than anyone else. Until this situation changes, the other tablet manufacturers will face an uphill battle because they cannot recuperate the manufacturing costs which will prevent them from competing successfully in this market.

In the end, it is all about content, simplicity of delivery, user friendliness and the positive vibe of the marketplace. This is where the likes of HTC will have a really hard time to compete. Even Nokia will find it difficult to survive if Microsoft doesn’t build a more consumer friendly and richer ecosystem. This is something that I expect Microsoft will improve this year in preparation for an innovation-reboot with Windows 8.

Tomorrow, Apple will launch the new iPad 3. Things will get pretty interesting this year.