On Steve Jobs from the WSJ

“Those who knew Mr. Jobs say that one reason why he was able to keep innovating was because he didn’t dwell on past accomplishments or legacy but kept looking ahead and demanded that employees do the same. Hitoshi Hokamura, a former Apple employee, recalls how an old Apple I that was displayed by the company cafeteria quietly disappeared after Mr. Jobs returned in the late 1990s.

“Remembering that you are going to die is the best way I know to avoid the trap of thinking you have something to lose,” Mr. Jobs said in a commencement speech at Stanford University in June 2005, almost a year after he was diagnosed with cancer.”

Read the full article here: http://online.wsj.com/article/SB10001424052702304447804576410753210811910.html

HP’s Big Move

It’s time to applaud Hewlett Packard. The company has made a landmark, gutsy decision to sell off it’s PC business and look to license its mobile OS business in the wake of bleak margins, low market traction in mobile devices, and waning interest in the WebOS platform. It’s easy to draw correlations to IBM’s exit from the hardware business, or even Dell’s focus on professional services. But HP’s other announcement – the acquisition of information management leader Autonomy for $10.25B – points to a broader strategy in software and services. Even as their stock takes a significant hit, both moves signal a stronger potential future for the brand and its relevance to the enterprise marketplace.

Big Data

The acquisition of Autonomy gives HP a strong play in big data, a sore spot for many large organizations with terabytes of information flowing through a variety of disparate systems. It empowers HP to quickly make innovations to their professional services offerings, and capitalize on the existing client footprints of both organizations. The best part? It will give them autonomy – no pun intended – from their deep integration and dependance on Oracle, and frees them to better compete with IBM on the enterprise software and service front. Autonomy was the purchaser of Iron Mountain’s digital business, and has made great strides in strengthening proprietary methodologies for delivering IP. Autonomy is strong internationally, adding value by helping to emphasize HP’s service strength outside of the US market.

The Mobile Front

HP’s WebOS has been hailed by many as a great platform to develop, packed with features, and possessed all the attributes necessary to be a leading contender in the smartphone and tablet space. However, the rules of market engagement have changed significantly in the past several years. The ultimate success of any mobile OS relies on checking critical boxes in the go to market strategy: a strong ecosystem of developers, high quality applications, and adoption on innovative devices. Over the past year, HP has been unable to check any of these. The TouchPad has never gained ground, and developers continued to hedge their futures on established markets with Apple, Google and Microsoft. Even RIM looks good in context.

Future Dependencies

While the announcement from HP holds great promise, there are gaps. First and foremost, there are no identified buyers for the PC business. Suitors are sure to appear, but the path to closure on this asset remains to be seen. A long, drawn out spin off will seriously defocus and impair HP’s ability to execute on other initiatives. Second, HP has a strong, entrenched culture that will require finessing as the business shifts and transforms its focus to software and services. While this territory may be comfortable for CEO Leo Apotheker, employees will need a strong shepherd to ensure success. HP faces a tough and expensive uphill battle in this space, and positive inroads will take time. Finally, HP needs to find a strong set of partners – quickly – to carry WebOS into the marketplace. The company has assured employees it won’t “give up” on the mobile OS, but that is little solace to employees or investors looking at adoption rates and market penetrations of competing platforms.

To see the original HP press release, please visit http://www.hp.com/hpinfo/newsroom/press/2011/110818b.html

A Viable Contender in the Mobile Ecosystem: Google and Motorola

Yesterday’s announcement that Google is purchasing Motorola’s mobility unit for $12.5B created a storm of speculation and musings on why the deal was a “must have” for Google. Just weeks ago, Google lost the bidding game on Nortel’s mobile patent portfolio to Apple, RIM and others. Their bidding strategy, which included monetary amounts reflecting scientifically-significant numbers, showed a Google that did not seem serious about winning – and stopping just inches short of mocking the process. The Motorola patents are a solid win for Google in this deal, but patents are only part of this equation. Here’s why this deal works now, and in the future for Google:

Strong platform to further develop a unified Android

Google may be enjoying rocket-propelled growth of Android penetration in the marketplace, but it’s fractured. They remain the only viable competitor to Apple for an “ecosystem” play, encompassing hardware, software, apps and value-added services. Since Android is an “open” platform, many iterations exist. The transaction will give Google some leverage and a channel for unifying Android in the future, and provide a more cohesive baseline for developers and consumers.

Massively reduced cost in developing tablets and other form factors

Google has a less than stellar history in bringing hardware to the marketplace. Motorola knows how to effectively and efficiently design, develop, manufacture, and launch winning devices on a global scale. This expertise will serve Google well in the mobile space initially, and perhaps on an expanded scale as Google pursues more in-home, lifestyle strategies for creating revenue – such as Google TV.

Supplier and channel relationships

Motorola knows the supplier space well, and represents an alternative relationship to the relationships Google has fostered through Android and its mobile applications. This transaction should add a needed dimension to Google’s interaction with the players who bring the ecosystems to market, and will add leverage to future opportunities for pushing Google-based standards and revenue initiatives. Remember, Google still remains a search technology and advertising company at its core. This relationship expertise, and the acquisition of the executives who built the relationships, will be critical to Google’s success.

Access to the Motorola Solutions business

Google has plenty of options in bringing applications, cloud services, and business solutions to a broader audience. The Motorola Solutions business has enjoyed strong results and maintains a potent base of clients in the private and public sectors, giving Google a solid path of entry if terms and conditions can be made attractive for both parties. Also, for Motorola Solutions, Google represents a much less expensive think tank for experimenting in unified communications, collaboration and social media strategies. There is plenty of upside for both organizations to make this compelling once the deal is complete.

“All but death can be adjusted” – Does RIM have the desire to win?

Emily Dickinson eloquently portrayed how dynasties can be repaired – and the only thing exempt from change is ultimate demise. For many years, RIM was the undisputed leader in mobile email and messaging. They set the industry standard and created the performance benchmark, and helped propel mobility into the mainstream of business. Unfortunately, recent media almost exclusively focuses on their diminishing market share, bad management, poor tablet strategy, and how the Blackberry brand is entangled in a downward spiral of obsolescence.

These observations have strong elements of truth – RIM is being taken to task by hungry, agile competitors with a clear vision for the global mobile ecosystem. It needs to reengineer its brand, product portfolio and go to market strategy in its entirety to compete. Nothing can be left “as is”, since this is honestly how they arrived in their current state.

As early as 2006, before the formal launch of the iPhone, RIM had already buried its head in the sands of arrogant market leadership. Whimsical quotes about the challenges of typing on a glass screen, security issues, carrier-friendly efficiencies and other “obstacles” for iPhone adoption were launched from the RIM marketing machine. When the iPhone did launch, it garnered nearly 20% domestic market share in less than six months. Soon after, Apple was selling more iPhones monthly than RIM moved in an entire quarter. Alarms were sounding. Apple had, for all intents and purposes, completely reset expectations of the smartphone experience. RIM missed this crucial point, focusing instead on historical demand patterns and accomplishments.

Instead of taking tangible action to address new competition, the market was treated to more quotes on elusive strategies yielding little result.

“I wouldn’t underestimate the amount of research we’ve done on user interfaces and technologies. We are not afraid to reinvent ourselves.”

We’re still waiting for reinvention, and it may be too late. Apple and Google are nimble, cash-rich and willing to innovate rapidly. They are well positioned in adjacent markets to fully exploit opportunities far beyond handsets and the OS. Paramount to their success, they understand clearly the role of the product, consumers, developers, and the larger revenue-generating ecosystem surrounding their platforms. Even Microsoft is posturing for a strong re-entry into the marketplace and is slowly building credibility through enhancements to Windows Mobile. It’s next release due this fall, Mango, integrates multiple points in the Microsoft product portfolio – and represents a giant leap forward in Microsoft’s global approach.

RIM needs to follow a similar path.

The road to recovery starts with changes at the top, most notably the RIM leaders we see publicly every day portraying a reality that is well removed from the truth. No one can dispute Mike Lazaridis and Jim Basille played key roles in building RIM to fantastic levels of success. Unfortunately, given at least four years of public miscues and product challenges, it is time for change. Rebuilding the brand and creating a new organization will require fresh leadership, signaling acknowledgement of the issues and potentially slowing the downward pressure on RIM’s stock.

RIM also needs to quickly hit a “product home run”, developing a handset or tablet that creates genuine emotion and loyalty. The PlayBook is not that device. Historically, RIM has been part of the all star team in terms of game-changing handsets that push the industry forward: the StarTac, BlackBerry 957, RAZR, Nokia 9000, the “Blueberry”, iPhone and others. All of these products were surrounded by stellar marketing that created fanatical consumers. More important, they were products that worked well, delivered as promised, and were surrounded by organizations with vision and focus.

Ironically, the biggest opportunity for RIM to recover may lie in the Blackberry suite of software and infrastructure services. Blackberry Enterprise Server, MVS, Pushcast, hosted infrastructure and even Blackberry messenger represent a massive installed base of touch points to be monetized. This could be the saving grace, if they aggressively pursue interoperability and invest in their developer community with strong corporate commitment. Enterprises are ready to open the door to app stores and secure consumerization, unified communications is poised for critical mass, and messaging continues to grow at hockey-stick trajectories. RIM is uniquely positioned to be disruptive, and it’s time to take the restraints off the employees who see the opportunity and can make it happen.

Time is running short for course-correction, as the organization grows more attractive every day for acquisition. It would be healthy for the marketplace, and beneficial to consumers, to have a strong RIM competing for business globally. It would also be good to see a world-class organization regain its culture of innovation and succeed.

Update: Verizon iPhone launch

As an update to our previous post, Verizon introduced the iPhone Tuesday and provided select details about the launch including:

- Pricing: 16GB for $199, 32GB for $299
- Data plan: no formal announcement, but expected to be unlimited data for roughly $30-$40
- Availability: Feb 3 for existing subscribers, Feb 10 for new subscribers

Most commentary surrounding the launch in centered on the network differentiation (no simultaneous voice and data on Verizon), and the lack of LTE support. Telwares maintains its earlier key observations:

- AT&T’s quarterly churn numbers could jump significantly if there’s a mass exodus, but that’s not likely. A vast majority of AT&T’s installed base of iPhone users are tied to family or corporate plans, making it more difficult to switch without prohibitive financial penalties.
- The most significant difference (and differentiator) in the network offerings of AT&T and Verizon is the ability to talk and use data simultaneously – an advantage AT&T has leveraged in the marketplace since launching 3G services.
- The network capacity and quality issues caused by an overwhelming amount of data traffic on AT&T’s network could replicate themselves on Verizon’s network as well. While Verizon maintains their network is ready to handle the demand, there’s no guarantee and no way to predict what actual demand will be.
- Verizon will have 7 to 9 million iPhones in its subscriber base by the end of 2011.
- The most interesting metric to observe, if the announcement happens as planned, will not be the bleeding of customers from AT&T to Verizon – it will be the battle for market share between Android, Apple and RIM in the Verizon customer base.

Verizon to announce iPhone offering today

According to multiple sources, including the Wall Street Journal, Verizon will formally announce later today the carrier will begin offering the Apple iPhone at the end of January. This will mark the end of AT&T’s exclusivity deal with Apple regarding the devices, but also represents a pivotal moment for both AT&T and Verizon in terms of Wall Street and network performance.

The impact to AT&T could be substantial given the network capacity and quality issues that subscribers have reported, leading to frustrations that could result in a switch of service providers. Quarterly churn numbers could jump significantly if there’s a mass exodus from AT&T, but that’s not likely. A vast majority of AT&T’s installed base of iPhone users are tied to family or corporate plans, making it more difficult to switch without prohibitive financial penalties.

The network capacity and quality issues caused by an overwhelming amount of data traffic on AT&T’s network could replicate themselves on Verizon’s network as well. While Verizon maintains their network is ready to handle the demand, there’s no guarantee and no way to predict what actual demand will be. For example, several studies have cited that Android users (the bulk of Verizon’s non-Blackberry smart phone portfolio) use more data than current iPhone users on AT&T’s network.

Perhaps the most significant difference (and differentiator) in the network offerings of AT&T and Verizon is the ability to talk and use data simultaneously – an advantage AT&T has leveraged in the marketplace since launching 3G services. This functionality is important to many subscribers, and may prove problematic for Verizon if the majority of potential new subscribers are not aware of the technology difference.

The most interesting metric to observe, if the announcement happens as planned, will not be the bleeding of customers from AT&T to Verizon – it will be the battle for market share between Android, Apple and RIM in the Verizon customer base.

Given the announcement is still pending, Telwares believes:

- Verizon will announce the iPhone with an unlimited data plan, attempting to lure dissatisfied AT&T users across carrier lines and attracting smart phone upgrades within their installed base of subscribers.

- Verizon will have 7 to 9 million iPhones in its subscriber base by the end of 2011.

- Verizon will not experience the network issues that AT&T has endured; all service providers are now beyond the shock factor of data usage from smart phones, and Verizon has the advantage of the lessons learned from AT&T’s deployment.

- AT&T’s quarterly churn numbers will be moderately impacted, but will not drastically impact stock price during 2011.

RIM and Nokia Fight Back after Apple Press Conference

Apple CEO Steve Jobs had to know he was opening a can of feisty worms when he accused RIM, Nokia and other handset manufacturers of the same antenna design flaw that’s haunted the launch of Apple’s iPhone 4.

Users report dropped calls and weakened signals when holding Apple’s iPhone 4 a certain way. Jobs defended the phone at a July 16 press conference and offered free “bumpers” to prevent signal disruption.

Jobs tried to deflect criticism by characterizing antenna problems as a challenge faced by the whole wireless industry, and then pointed to alleged similar flaws with the BlackBerry Bold 9700, HTC Droid Eris and Samsung Omnia II.

It took only hours for RIM to defend its BlackBerry antenna design:

“Apple’s attempt to draw RIM into Apple’s self-made debacle is unacceptable,” say RIM co-CEOs Mike Lazaridis and Jim Balsillie in an official statement posted on Crackberry.com. “Apple’s claims about RIM products appear to be deliberate attempts to distort the public’s understanding of an antenna design issue and to deflect attention from Apple’s difficult situation.”

“RIM has avoided designs like the one Apple used in the iPhone 4 and instead has used innovative designs which reduce the risk for dropped calls, especially in areas of lower coverage,” Lazaridis and Balsillie continue. “One thing is for certain, RIM’s customers don’t need to use a case for their BlackBerry smart phone to maintain proper connectivity. Apple clearly made certain design decisions and it should take responsibility for these decisions rather than trying to draw RIM and others into a situation that relates specifically to Apple.”

Nokia also fought back with a statement. As reported by Engadget:

“We prioritize antenna performance over physical design if they are ever in conflict,” Nokia says. “Antenna performance of a mobile device/phone may be affected with a tight grip, depending on how the device is held. That’s why Nokia designs our phones to ensure acceptable performance in all real-life cases, for example when the phone is held in either hand. Nokia has invested thousands of man hours in studying how people hold their phones and allows for this in designs, for example by having antennas both at the top and bottom of the phone and by careful selection of materials and their use in the mechanical design.”

It’s unlikely that we’ll see the end of the antenna scandal soon. In the meantime, Telwares’ mobility experts urge enterprises to take the same measured approach to deploying the iPhone 4 as they would any other brand, carrier or platform. There’s no fundamental need for a change in direction for any enterprise evaluating the merits of deploying the iPhone to its user community.

Telwares instructs enterprise organizations that have already deployed the iPhone 4 to closely scrutinize their commercial agreements with AT&T to determine device support from multiple channels, how they can approach implementing the remedies Apple has outlined with minimal business interruption and the contractual implications where the need to terminate specific services exists.

Defensive Jobs Hosts iPhone 4 Press Conference

The iPhone 4 “antennagate” scandal has been blown out of proportion, Apple CEO Steve Jobs insisted when he took the stage at an Apple press conference held today to address complaints about the device.

Users report dropped calls and weakened signals when holding the phone a certain way. Jobs countered that more than 3 million iPhone 4s were sold in the three weeks since the iPhone 4 launched, and that it’s received the highest customer satisfaction rating of any iPhone or any smart phone, Engadget reports.

Antenna problems are a challenge faced by the whole wireless industry, Jobs says, as he pointed to alleged similar flaws with the BlackBerry Bold 9700, HTC Droid Eris and Samsung Omnia II.

Jobs also acknowledged that iPhones use a faulty algorithm to calculate signal strength. But even the updated algorithm in a forthcoming software update will show a signal strength decrease when the phone is held the wrong way.

But the degradation is slight, Jobs maintains: The iPhone 4 drops one more call per 100 than the iPhone 3GS. Only 0.55% of iPhone 4 users have called AppleCare to report signal degradation, and 1.7% of iPhone 4s have been returned – a decrease from the 6% of iPhone 3GSs returned.

Apple will attempt to combat the negative publicity by giving away free cases to mitigate the antenna problem and issue refunds to users who bought the cases proactively. Users can also return the iPhone 4 for a full refund (and no restocking fee) within 30 days of purchase. Jobs indicated he thinks AT&T will refund money spent on its service contracts when users return iPhone 4s.

Here’s the bottom line for enterprises: There’s no fundamental need for a change in direction for any enterprise evaluating the merits of deploying the iPhone to its user community, according to Telwares’ mobility experts.

The issues and challenges faced by some end users on the iPhone are not drastically different than any other brand, carrier or platform. The same measured approach to deploying any enterprise technology still applies and is not altered based on the data available today.

Telwares instructs enterprise organizations that have already deployed the iPhone 4 to closely scrutinize their commercial agreements with AT&T to determine device support from multiple channels, how they can approach implementing the remedies Apple has outlined with minimal business interruption and the contractual implications where the need to terminate specific services exists.

NTP Sues Apple, Google, HTC, LG, Microsoft and Motorola

The company that sued BlackBerry maker RIM for patent violation and incited enterprise panic in 2005 is at it again.

Richmond, Va.-based NTP Inc. filed suit July 8 against Apple Inc., Google Inc., HTC Corp., LG Electronics Inc., Microsoft Corporation and Motorola Inc. in federal court. NTP alleges the six companies infringed on eight of its wireless e-mail delivery patents and wants the companies to pay licensing fees for using the technology.

There’s precedent from NTP’s suit against RIM: The BlackBerry maker was found to have willfully infringed NTP’s patents and the verdict was affirmed on appeal. RIM paid NTP $612.5 million to settle its patent infringement lawsuit in March 2006, which included a perpetual, fully paid license going forward.

If the court finds NTP’s new claims to be valid, the six manufacturers and developers named in the suit must pay the fees or cease use of the technology.

Telwares believes settlements and fees are the most likely outcome. As in the RIM case, NTP has little interest in stifling smart phone sales or use; its revenue will come from licensing fees.

So enterprises shouldn’t worry about losing their iPhones, Android handsets or Windows Mobile phones. The real question is whether licensing fees will increase device and service costs for enterprises, according to Telwares experts.

NTP is a privately held intellectual property firm and claims its founder, the late Thomas Campana Jr., invented wireless e-mail in 1990. NTP already has licensing agreements with RIM, Good Technology Inc., Nokia Inc. and Visto Corporation.

“Use of NTP’s intellectual property without a license is just plain unfair to NTP and its licensees,” says Donald Stout, NTP’s cofounder, in the company’s press release. “Unfortunately, litigation is our only means of ensuring the inventor of the fundamental technology on which wireless e-mail is based, Tom Campana, and NTP shareholders are recognized, and are fairly and reasonably compensated for their innovative work and investment. We took the necessary action to protect our intellectual property.”