Apple Map

It started with a map application, CEO's apology for the bad user experience, and now the departure of a senior executive.

http://www.apple.com/letter-from-tim-cook-on-maps/
http://www.reuters.com/article/2012/10/30/us-apple-changes-idUSBRE89S18H20121030

It is obvious that Apple would want to have a map application of its own. What a smart phone or tablet can provide that a laptop cannot easily match is its mobility and portability. Many applications on iOS give users the ability to make decisions or acquire needed information on the spot in real time. Map data, or say information for location and surroundings, need to be integrated into the platform, iOS, for more interesting applications to happen.

Up to now, Siri cannot have a real conversion with its user. The usage is still limited to question-and-answer in a request-response fashion. When Siri is able to have a conversion, the conversation will have a context. The context may be defined by the state of the conversation on top of other inputs, say, an email, a previous phone call or voice message, or recent locations. Google search and map application may not be able to provide all that Apple needs, not to mention the competition between the two companies. 

Recent news reported Apple's executive, the head of iOS, Scott Forstall was let go for the blame of Apple map. I think office dynamics goes beyond one product flop. Apple has produced 'sub-standard' hardware and software before. It is not the first time and it will not be the last time Apple makes a mistake. Google has been working on map applications for years. Even if there is no bug in Apple's map application, it would not be as feature rich as Google's map in this first release. Judging from Mr. Cook's letter, Apple is working on some advanced applications that require integration beyond today's interface. For an iOS developer like myself, it is good to see someone firmly at the helm of the company. It is even more important to see the company make steady progress and eventually grow beyond its legendary founder. 

Will HTC have its own OS

Rumor has it that HTC is contemplating on buying an OS for itself.
http://www.cellular-news.com/story/50859.php

"We have given it thought and we have discussed it internally, but we will not do it on impulse." HTC Chairwoman, Cher Wang said in an interview.  She went further on, "Our strength lies in understanding an OS, but it does not mean that we have to produce an OS."

It takes approximately 40 to 50 million dollars annually to maintain a team of 200 for mobile OS R&D.  It is quite affordable to today's HTC.  But what will be the strategic position for this OS? If the new OS is to replace Windows Mobile OS, an annual operating cost of $40 million can justify some $70 to $100 million royalty paid yearly for Windows Mobile licenses.  But Windows Mobile OS is not the one making HTC feel naked.  It is Google's Android, which does not have a royalty based license.

Maybe the whole thing is just some psychological response to Google's buying Motorola Mobile. Or maybe it is because HP's webOS is available at this inopportune time. HTC did not express this idea in such a way as "We'd like to build our own team and our own OS". HTC actually had an small Linux team before. Without a strategy in mind and a concise goal to develop OS in a culture dominated by hardware business, acquisition will not add value. The interesting part is that, though everyone in the mobile industry thinks OS makes a difference, not many companies got it right or even bother to approach it.  If Google is to build its own hardware business, what can HTC do? Without an alternative, what HTC should keep an eye on is companies like ZTE, not Google's Moto.

Google Buys Motorola Mobility for its patent portfolio

Google is going to buy Motorola Mobility for $12.5 billion.
http://www.cellular-news.com/story/50468.php

The patent war in the cell phone industry has not ended but Motorola Mobility has benefited from it already. Google is an Internet service company, a software company, but not a manufacturer, not an expert in logistics.  This is purely a acquisition for Moto's patent portfolio. I do not see Google running Motorola Mobility and producing Google phones vigorously.

Some analysts thought Microsoft might be a winner in this deal, because of doubts and distrusts towards Google among the Android licensees.
http://www.totaltele.com/view.aspx?ID=467053
http://allthingsd.com/20110815/u-s-carriers-silent-on-motoroogle-but-france-telecom-gives-it-a-thumbs-up/
It is just a wishful thinking, in my opinion.  Microsoft was in the market licensing its Windows Mobile OS when Nokia had 60% of smartphone market share in 2006-2007.  The fact of dominant Nokia did not help Mircosoft to a strong second place.  Instead, RIM's Blackberry filled the gap and rose to the second place in 2008 and 2009. When Apple introduced iPhone in 2007 and made its stand in 2008, Android was still in its infancy.  Most vendors went to Google and invested their own resources to develop Android phones instead of diving deeper into Windows Mobile.  Why is that?  I have my thoughts on that, though without direct proof.  It suffices to say Windows Mobile is not attractive enough to OEM vendors given all the incentives and the business environment.

Maybe Google will spin off Motorola Mobility and share the patent portfolio with it once the acquisition is done. After all, it is all about patents and it is better for Google and Motorola Mobility to run separately.

Google mobile payment and PayPal

Google just announced it is entering the mobile payment market and PayPal responded with a lawsuit alleging Google misappropriated its trade secrets through hiring its former employee.

http://www.cellular-news.com/story/49343.php
http://www.cellular-news.com/story/49351.php

I just blogged my idea that eBay should spend the proceeds from selling Skype's stake on mobile payment solution for its PayPal division. I believe money and brand name are very important for this emerging product. PayPal's suing Google seems to indicate that PayPal thinks the same way. There are a lot of mobile payment start-ups. I just did a quick search, and within 5 minutes, I got company names like Square, Corduro, Boku, Billing Revolution, Mobillcash, and Zong. But PayPal did not go after any one of them. Instead, PayPal cared about what Google is doing so much that it went to court to prove a point.

There is a quote in Bloomberg's report on this lawsuit:
“Silicon Valley was built on the ability of individuals to use their knowledge and expertise to seek better employment opportunities, an idea recognized by both California law and public policy,” Aaron Zamost, a Google spokesman. In a way, the series of events is a norm in the Valley between companies, employers and employees. I hope this lawsuit is a PR stunt by PayPal. Tomorrow, it can be Yahoo, Facebook, or Microsoft buying a mobile payment company to compete with everyone else. PayPal has so far enjoyed a perception of providing credit card/banking services without being regulated as a bank in the US. The benefit to its users, individuals and merchants, is that the money stays in PayPal's domain to lower cost. Otherwise, it is like a money transmitter business which has other costs associated with its products when the money has to go in and out. A segmented market will not provide such cost benefits and PayPal probably understands that.

Android Phone Delay

The rumor had it that the Android phone could face delays, http://www.cellular-news.com/story/31963.php.

But wait! Google immediately re-confirmed that the Android phone will be on schedule for release by the end of 2008. With T-Mobile US preparing for the launch of its first Android phone, everything seems to be on track. Then why was the rumor in the first place.

Not sure! It can be just a small marketing PR skirmish. It may be a good idea to remind people of Android amid the iPhone hype. I wrote two blogs on Android late last year and earlier this year. All indications pointed to the year end of 2008 as the earliest time frame for Android phones to join the market. In a way and in my opinion, Google has the easier part of creating an Android phone. Linux is part of Google's culture and it is not the first time for the Android team to put Java on top of an operating system. The manufacturers are taking the hard part in providing the Board Support Package (BSP) which links Android software to the underlying hardware. After all, cell phone hardware is far from being standardized as that in the PC industry.

Base on the track records of HTC and Samsung, it is a tight schedule for anything to show up for this Christmas. Nevertheless this rumor validated the marketing success of Android as press and consumers believed the "2nd half of 2008" to be July not December.

Google Android Is Coming to Town

Google formally joined the cell phone industry by announcing its Android.

On November 5, 2007, Google announced Open Platform for Mobile Devices, so called Android platform. A week later, Google announced the Android Developer Challenge and released Android SDK.

Microsoft CEO Steve Ballmer said Android is just a few words on paper right now and it is hard to make any comparison. This statement has certain truth in it than just a defensive spin. Among the one billion annual global shipment of cell phone handsets today, a little more than 12% of them are smart phones. It took Microsoft 10 years to reach the 12-month volume of 10 million Windows Mobile handsets in mid-2007. And for iPhone, Apple has to incorporate such a huge marketing effort hoping to achieve a similar volume target by sometime in 2008.

Now only HTC, one partner in the Open Handset Alliance, committed to ship Android based handsets in 2008. With its current capacity and potential expansion, HTC can probably ship 1 to 2 million of Android phones by end of 2008. This is assuming there is no porting and integration problem and Google has figured out all the distribution channels. Unless LG, Samsung and Motorola make some sizable commitments soon, Android will still be a very small player in the high-end market, even by 2010.

Why is that? The BOM cost of a smart phone is around $120 to $160 on average. Some really well equipped smart phones such as Apple iPhone may cost up to $200, according to street estimate. Comparing to software licensing cost, which is around $10 to $20, this industry is still a hardware and logistics play than software. If Android phones have to sell through distributors and carriers, the price will be at least $400 and hardly profitable. If Apple iPhone's price cut taught us anything, there is a price ceiling for a consumer-oriented handset. It also sets the limit on the premium that software can add. Of course, Google can always sell directly to consumer by opening its online store, Android Checkout. If that happens, it will speak loudly for Google's commitment to Android.

This is not a detraction to Android, but a reality check. If you are a developer and your focus is on Web 2.0 and the long tail, it may be worthwhile to consider Android. The Android platform may as well be the platform for Google's future consumer gadgets. In any case, it will be Google's commitment to Android that makes developer's effort worth. For the rest of us in the cell phone industry, there are too many things to improve and compete on. One more Android will not make the Borg cube collapse but more to assimilate.