Category Archives: Quick Thoughts

More quick thoughts on Twitter and Instagram (and Apple)

I posted some initial quick thoughts on Instagram hitting 300 million users yesterday, but there were two articles today that prompted some more quick thoughts on Twitter and some parallels (and important differences) when compared with Apple.

The first article was this one by Walt Mossberg on Apple, and it included this paragraph:

In my conversations with Apple executives, they vehemently insist that market share isn’t — and won’t be — their goal, and even go so far as to say that most public market-share numbers are somehow off the mark, though they decline to explain how.

There are two parts to this: one, Apple doesn’t think market share is the right goal for them to chase, and two, it doesn’t think market observers measure it right anyway.

Now, the second article, which is an interview with Ev Williams, one of the founders of Twitter, commenting rather forcefully on the news that Instagram has more users than Twitter:

Why is users the only thing we talk about? The crazy thing: Facebook has done an amazing job of establishing that as the metric for Wall Street. No one ever talks about, ‘What is a [monthly active user]?’ I believe it’s the case that if you use Facebook Connect—if you use an app that you logged into with Facebook Connect—you’re considered a Facebook user whether or not you ever launched the Facebook app or went to Facebook.com. So what does that mean? It’s become so abstract to be meaningless. Something you did caused some data in their servers to be recorded for the month. So I think we’re on the wrong path.

If you think about the impact Twitter has on the world versus Instagram, it’s pretty significant. It’s at least apples to oranges. Twitter is what we wanted it to be. It’s this realtime information network where everything in the world that happens on Twitter—important stuff breaks on Twitter and world leaders have conversations on Twitter. If that’s happening, I frankly don’t give a shit if Instagram has more people looking at pretty pictures.

Do you see the parallels here? First, a rejection of the metric of choice for comparisons between the company and its competitors, and second, a questioning of the accuracy of those metrics.

I think it’s fair for a company to suggest alternative metrics it wants to be measured by, especially if those relate better to (a) its own strategy and (b) its ability to generate growth and profits for its shareholders. That’s certainly the case for Apple, which generates several times more profits than any other player in the smartphone market despite its minority share, and also captures a great deal of the revenue. But it’s not the case for Twitter, which despite all its attempts over the last few months to point Wall Street at metrics other than MAUs, has failed to either provide alternative metrics in a reliable fashion or demonstrate that those are better indicators of its future profits.

For the record, I’ve no idea whether Williams’ assertion that Facebook counts Facebook Connect usage is accurate, but when Facebook’s users are multiple times Twitter’s users, I’m not sure that matters a great deal. Apple likely objects to market share numbers on the basis that they tend to measure shipments, and shipments are neither the same as sales to end users, nor is shipment market share the same as installed base market share,  and nor do they reflect the way in which those devices are actually used. But in Apple’s case, market share actually doesn’t matter to its business model or its ability to generate outsize revenues and margins from what share it does capture. Twitter’s problem is precisely that its MAUs are exactly the source of its current revenue streams, and it hasn’t yet demonstrated how it will monetize the broader bases of users it wants Wall Street to start thinking about. It’s all very well to jump on your high horse about the metrics you want others to use, but you have to back up your assertion in order to avoid looking bitter.

Quick thoughts: Instagram at 300 million

Facebook today announced that Instagram now has 300 million monthly active users. This has invited inevitable (unfavorable) comparisons to Twitter, which had 284 million MAUs at the end of last quarter. I wanted to talk about a couple of things in relation to those comparisons.

Facebook and Instagram

Firstly, I wrote a post a year ago which I titled “Instagram’s advertising problem” which was really about the challenge of serving relevant and timely ads, and the degree to which various services struggle to hit that sweet spot. Instagram’s core challenge as a standalone business was that it knew next to nothing about its users, especially before brands started being a big presence on the service. What’s becoming increasingly clear since then is that one of the biggest forms of synergy between Facebook and Instagram is the ability to use the data Facebook has on users to target Instagram ads. See this quote from the Wall Street Journal’s interview with Instagram CEO Kevin Systrom today:

We use Facebook to serve the ads to Instagram. Basically, we’re making it very clear that data is shared between the services under Facebook’s roof. Facebook helps us provide relevant ads to the users. You don’t want a 50-year-old male who’s interested in autos seeing an ad for a beauty-care product targeted at teens. If you ask users what they hate most, it’s not having relevant ads being served to them.

It’s also very clear that information doesn’t flow back the other way:

WSJ: Does my activity on Instagram affect the ads I see on Facebook?

Systrom: I don’t think we have plans for that right now.

That’s likely because there’s almost no useful information that could be sent back the other way, because Instagram activity provides almost no insight into user demographics or interests (except to the extent that users have explicitly followed brands). All this also raises an interesting question: to what extent do the two user bases overlap? Are the vast majority of Instagram users also Facebook users, who’ve built up enough of a profile there to provide targeted advertising on Instagram? For now, I think the answer is likely yes: many of the teenagers now swarming to Instagram likely had Facebook accounts already (even if they’re not using them as often), but what if future teenagers (or other Instagram adopters) skip the Facebook stage entirely, or never bother populating their Facebook profiles with enough material to effectively target ads?

Twitter and Instagram

So, on to that unfavorable comparison to Twitter. I actually want to talk about two things here: one is why Instagram is growing so much faster, and the other is addressing the idea that Twitter should have bought Instagram instead.

First, why is Instagram growing so much faster? I think the answer is that it basically mirror the network effects of Facebook itself, in that it’s built around a community of friends and family. It benefits hugely from the fact that once a critical mass of your friends joins, it becomes inevitable that you will join too, to avoid missing out. This is especially the case among what is (likely) one of Instagram’s strongest-growing demographics: teenagers. Twitter entirely misses out on this phenomenon, by being a platform that’s largely about connecting with people, brands, news sources and so on that you have no existing personal connection to. It also suffers from the fact that so much of its content is easily available to its famous “logged-out users”. Because it’s inherently a public platform, there’s no great benefit to being logged in (or even registered) for much of the content shared there.

As I’ve written about previously in various posts on Twitter (e.g. here, here and here – full archive here), Twitter’s focus seems to be on talking up the size of its existing audience, partly by expanding the definition of what that includes, but what it really needs to do is find ways to keep growing the core base. And it’ll do that only if it (a) lowers the barriers to entry (as I described in this piece), and (b) taps into those viral and network effects that true social networks enjoy.

Secondly, the issue of whether Twitter should have bought Instagram instead. Arguably, Instagram might have helped Twitter solve the very problem I’ve just been talking about: as a true social network, Instagram enjoys network effects Twitter doesn’t, and it could have both plugged a gap and served as a focal point for Twitter’s messaging and other efforts. Instead, it’s now trying to build those things around the core Twitter experience instead, and that’s going to be tough. So there are some good arguments for such a combination. But the biggest counter-argument goes back to the point I started with, which is that without Facebook, Instagram really had no way to monetize effectively, because it had no way to display timely, relevant ads.

With Facebook’s help, it now scores very highly on the relevancy side, because it can leverage Facebook’s data on its users where the two user bases overlap. Twitter, on the other hand, suffers from a very similar problem to Instagram itself: it knows something about its registered and logged-in users, though arguably not that much, but knows almost nothing on its own about the logged-out users. Instagram wouldn’t have helped with that, and without its own data on those users, and likely relatively small overlap between the two bases, it would have found it very difficult to effectively monetize Instagram. For all these reasons, though there is some logic behind a combination of Twitter and Instagram, it would have been enormously tough to justify financially for Twitter. I think it’s a much better fit for Facebook, but unfortunately that leaves Twitter struggling with the same old problems.

Quick thoughts: BlackBerry’s announcements

BlackBerry yesterday made a series of announcements around its enterprise software and services strategy and roadmap, and I was able to attend both the event itself and some analyst-only sessions under NDA afterwards. I obviously can’t share the afternoon’s content, but from what we learned in the morning and from other insights I gained yesterday, I wanted to update my recent takes (here and here) on BlackBerry a little.

Focus on regulated industries, ambitions beyond

I’ve praised BlackBerry for their focus on the regulated industries when it comes to devices, because it shows how realistic BlackBerry is being about its prospects in the enterprise today. Especially in the US and other mature markets, BlackBerry is unlikely to sell devices other than in the public sector and other highly regulated industries. However, as I’ve said before, BlackBerry’s future lies in building a business that’s not directly tied to its dwindling device installed base and in going beyond these regulated industries to other businesses.

BlackBerry shared results from a survey yesterday about enterprises’ concerns about security and risk. There were no new findings here and lots of old themes: a vague sense of unease about the management of mobile devices and potential risks their use in the enterprise pose. BlackBerry is hammering away at worn themes here, but it’s hoping that broader awareness of the growing security risks in the enterprise will eventually pay off for them. There’s an element of scaremongering here, and the real challenge will be convincing enterprises beyond the regulated industries that there’s a real threat in mobile security that (a) requires going beyond the standard basic protections available in major operating systems and management systems today and (b) requires a BlackBerry solution rather than one from a competitor.

Fleshing out the cross-platform story

A big part of that story, in turn, has to be fleshing out the cross-platform story BlackBerry has been trying to tell since the announcement of BES 10. The vision has always been there, but it hasn’t been clear why a company would choose BlackBerry to manage non-BlackBerry devices. BES 12 is part of the answer to that, as it finally provides a unified approach to managing all devices, but the Samsung deal is the first concrete step in fleshing out the cross-platform vision. That’s because it’s the first step towards crafting truly optimized solutions built around a very popular device category in the enterprise rather than just focusing on standard APIs and tools. Samsung KNOX hasn’t been a great success yet, and its contribution to Android’s efforts and the BlackBerry partnership are both signs of its weakness and need to gain momentum. But on BlackBerry’s side, it’s also an admission that the generic approach hasn’t resonated, and something more targeted may be needed. There’s more coming as part of the Android for Work initiative too.

Multiple tiers now available on BlackBerry

CEO John Chen started the day’s sessions by talking about BlackBerry’s end-to-end solution for secure mobile communication and productivity. He made much of the multi-layered approach, starting with chips and firmware, the OS, the applications, the BES and the NOC. This is the top tier of the secure solutions BlackBerry offers. But it now arguably offers two other tiers as well: Samsung KNOX as part of the BES and NOC system, and other devices managed through a BES on a more generic basis. This creates a slight awkward situation where BlackBerry devices managed by the BES are the gold standard, with KNOX/BES devices a second tier (silver?) and others a third. I asked BlackBerry executives about this, and specifically how they imagined enterprises using each of these tiers within their companies, and they said they see companies using multiple tiers for different kinds of users based on their security and risk profiles. That makes a certain amount of sense, but the top tier has always been more or less exclusive to BlackBerry: the question is whether it can make inroads in the middle and bottom tiers, which is where the vast majority of devices in use are today.

Selling productivity against the big guys is tough

BlackBerry’s other big story is selling a suite of communications, collaboration and productivity solutions, with its content storage and syncing solutions such as Blend, BBM Meetings announced yesterday, and so on. It believes it’s created the best mobile-first solution for these things and points to the lack of full feature sets on the mobile versions of Lync, Adobe Connect and other similar products. That’s a fascinating value proposition, but I see two major problems with it. Firstly, the others will catch up fast: for example, Microsoft’s rebranding of Lync as Skype for Business is likely to come with an expanded feature set on mobile devices in the near future. Secondly, BlackBerry isn’t known for these things, and once again the challenge will be selling these new products and services beyond the traditional BlackBerry base. With a direct sales force of only a couple of hundred, BlackBerry will be heavily reliant on its indirect sales teams, many of whom also sell competing products. Why will channel partners sell these solutions when awareness is lower, preference for others is stronger, and many companies already have relationships with competitors?

Short-term growth prospects are all in enterprise software

BlackBerry is very aware of the two peaks problem I talked about in an earlier piece – that is, that its traditional business, which was directly tied to its device base, is in decline, and it needs significant new revenues to slow the decline and eventually get back to growth. The company has in the past talked about three potential new sources of revenue: enterprise software and services, BBM and the Internet of Things. However, of these, only enterprise software and services is going to generate any significant amount of revenue in the near term. The company’s target for BBM is $100 million by next financial year, whereas the target for enterprise software and services is $500 million, a doubling year on year. The company’s Internet of Things efforts, meanwhile, are too nascent even to warrant a public revenue target in the near term. That puts a heck of a lot of weight on the enterprise software and service activities, and the success of BES 12 in particular since so much else is dependent on that. The company’s management seems to be extremely realistic about its prospects overall, but this is one area where their goal seems like it’ll be a real stretch.

Overall, I remain somewhat positive on BlackBerry’s short-term prospects: they’ve reduced costs and cash burn to the point where there’s no longer an immediate danger of going under, and revenues are starting to stabilize. The question continues to be whether these new businesses can grow, and importantly grow independently of the device base, sufficiently in the coming years to return the company to significant growth. The next year or so will give us a really good sense of whether that’s possible or not.

Quick Thoughts: Microsoft’s Office moves

Microsoft today made a series of announcements relating to Office running on platforms other than Windows:

  • Individual Office apps for iPhone are now available, mirroring those launched on the iPad earlier this year
  • Office will be coming to Android, starting with a limited beta/preview next week and full versions next year
  • All the versions of Office on iOS and Android will shift the dividing line between free and paid-for functionality significantly.

My initial reaction to the news was summarized in 140 characters in this tweet:

I wanted to expand on those ideas just a bit.

What the announcement says about Android

The announcement is most telling about Microsoft and its evolving strategy for Office, but it’s also illuminating about Android. Note that Microsoft announced Office for iPad in March and it became available essentially immediately for anyone running the latest version of the operating system. No delay, no beta label, just instant availability. But for Android, Microsoft is adopting a very different model, with a preview period with a limited number of beta testers and general availability coming months later. Why? Well, this is the same old story we’ve heard for years now: the fragmentation of the Android base, although we’re not even talking about Android smartphones. Go to the signup page for the Office for Android tablet preview and you’ll see that you have to specify the make and model of the tablet you want to try it on, and that’s the key here: developing complex software such as Office for Android is enormously more complex than on iOS, and especially if you want to achieve full feature parity across devices and platforms.

What the announcement says about Microsoft

The rest of the announcement is incredibly important in what it says about Microsoft and its strategy for Office. First, the context: Microsoft launched Office for iPad in March and says it’s seen 40 million downloads of the three apps since then. But the full functionality of the apps has only been available to Office 365 subscribers, and it’s added less than three million Home and Personal subscribers since then, at roughly the same pace as it added subscribers earlier.  People have been very interested in the apps, but most haven’t been willing to pay for the full functionality (or already had access to it through existing Home or Business subscriptions).

Why is that? Well, think about the kind of Office-related work you might want to do on an iPad. It likely isn’t writing the next great American novel, preparing the slides for your TED talk or working with pivot tables in Excel. It’s fixing a typo in a Word document, updating a cell in an Excel spreadsheet or inserting an extra slide in PowerPoint. Is that functionality worth $70-100 a year for most users? Likely not. Arguably, Microsoft drew the line between what was free and what wasn’t in the wrong place here, for obvious reasons: full Office functionality has always cost a lot, and there’s never been a version of Office available for free, so it was just following its long-standing pattern. But the way people use Office on tablets will be different from the way they use it on PCs, and Microsoft seems to be recognizing that. As such, it’s shifting the dividing line between free and not-free in favor of providing more functionality for free.

But I think there may be at least two other reasons for this move to provide more functionality for free. Firstly, Microsoft’s Consumer Office business is dwarfed by its Commercial Office business: last financial year, total Office System revenue was just over $24 billion according to Microsoft’s 10-K, but Consumer Office revenue was only around $3 billion over the same period. The vast majority of Office comes from businesses, who can now buy per-user licenses for their employees allowing them to use Office across multiple devices. At some point, Microsoft may decide that allowing consumers (whether acting in their personal lives or as employees) to use at least some functionality for free on some devices is a price worth paying to cement the position of Office as the productivity tool of choice for businesses, who pay most of the bills.

Lastly, Office has long suffered from the fact that it over-serves most users’ needs considerably, and the price charged for Office reflects 100% of the features whereas many users only use a small percentage. One of the attractions of Google Docs and other Office alternatives both for consumers and for businesses is that they allow users to accomplish many of the more basic tasks for free or for a much lower price. Microsoft should be considering a bifurcation of the Office product into at least two alternative versions: a more basic one with limited functionality offered for free or at least a lower cost, and a fully-featured one offered at the traditional price points. Perhaps it sees the new tablet and smartphone apps as an opportunity to experiment with just such a model.

What’s in and what’s out with the free version?

One other interesting thing to look at is what’s in and out of the free version. According to Microsoft’s blog post, these are some of the features that will be exclusive to the paid version:

advanced editing and collaboration capabilities, unlimited OneDrive storage, Dropbox integration and a number of other benefits.

It’s interesting that both of the recently-announced storage enhancements are exclusive to the paid version: Dropbox integration and unlimited OneDrive storage. The latter has a real cost associated with it, so it makes sense that it’s reserved for the paid version, but it’s intriguing to see a partner feature exclusive to the paid version too. I’ve pasted a screenshot from the iPad app that summarizes the premium features. I think there’s a risk that the dividing line feels arbitrary, but this list looks like it makes sense. It’s also interesting to see that Microsoft still requires the user to log in with a Microsoft account for the new functionality, even though a paid Office 365 subscription is no longer necessary.

Office premium features

Quick Thoughts: Apple and shutting down Beats

There are reports today that Apple is planning to “shutter” the Beats Music service, which seem to be causing consternation, surprise, and comparisons to Google’s acquisition and subsequent dumping of Motorola. As I see it, there are a couple of different ways of interpreting the news, and although one of them would indeed be shocking, the other is entirely predictable, and that’s the way we should be interpreting this.

Two ways to interpret the news – one is clearly wrong

The first way to interpret this is that Apple is shuttering the Beats Music service as it currently exists in order to replace it with an Apple and/or iTunes-branded replacement using Apple’s delivery technology, label relationships and so on rather than those developed by Beats. This was an entirely predictable development and one which everyone should have been expecting from the beginning. Why would Apple acquire a product like this and simply let it continue as it is without either wrapping it into the Apple fold, slapping an Apple brand on it and integrating it with the broader Apple ecosystem? Especially when Beats Music wasn’t a massive hit with consumers in its current form? The Beats Music service only makes sense as an acquisition in the context of the broader iTunes service, which lacks an on-demand subscription option without it.

The second way to interpret this news is that Apple is shutting down the service entirely without any plans to replace or integrate it into iTunes, and that seems to be how many people are interpreting it. The reports from Re/code and others seem to be refuting this interpretation, though without much detail behind the refutation. But under this interpretation of events you’d see the Beats Music service shuttered at midnight one night, never to be seen again, and with no replacement lined up from Apple. That’s patently incredibly unlikely, especially given Apple’s assurances at the time of the acquisition.

What does the Beats replacement look like?

What, then, is likely to replace Beats when it is wound down and/or wrapped into iTunes proper? I see several elements:

  • it fills the on-demand subscription service hole in iTunes, possibly with subscription and ad-supported elements (though I think the latter is unlikely given both Apple and Iovine’s insistence that music command a proper price)
  • it incorporates some recommendation and curation elements from Beats Music
  • it introduces a new format, as alluded to in U2’s recent interviews, which adds more to the classic album format than just the music.

There will almost certainly be some sort of migration path and/or grandfathering in of the smallish number of existing Beats Music customers.

Timing – “one more thing” in October?

When might we see this new service make its debut? I’d argue pretty soon, especially given today’s reports. It might make a good “one more thing” at Apple’s October event, if that happens. It would also nicely reintroduce a music theme to Apple’s fall events which has been missing since the iPod began playing second fiddle to the iPhone and iPad.

Beats was never about one thing

As I wrote in my original Apple/Beats post, the Beats acquisition was never about just one thing. Rather, it combined the headphones business, the music subscription business and the relationships and expertise of Jimmy Iovine and Dr Dre in one package. As such, the comparison to Google’s acquisition of Motorola may perhaps be apt in that Google got significantly more than just Motorola’s handset business when it bought it (including patents and the set-top-box business sold shortly after the acquisition). The Beats Music service in its broadest sense – the customers, the service, the technology and expertise behind it – was just one part of that acquisition. Of that, only the service as it currently stands, arguably the least-valuable part of that package, will go away. All the rest – inasmuch as it’s valuable – will be incorporated into what Apple ends up launching off the back of it. And then there’s the headphone business, which is both a lucrative business in its own right and potentially a jumping-off point for new products from Apple under both the Beats and Apple brands. As such, these reports – even if true – are the furthest thing from an admission of failure of the Beats acquisition imaginable.

Quick Thoughts – Apple’s different audiences

I’ve already written three posts about Apple’s announcements from last week, but there was one topic I had intended to squeeze into one of the others but which never actually made it in. So here it is, in brief.

I originally planned to title this post “Who Apple keynotes are for” as an echo of my piece on what the Apple Watch is for, but in the last couple of days we’ve seen more news that turns this into a broader theme. Specifically, Apple launched a new section on its site about privacy, with a letter from Tim Cook to Apple customers about how Apple treats their data, and more broadly Apple’s attitude towards data collection. On top of all the discussion about the keynote last week, this has got me thinking about the different audiences Apple addresses in different ways with different communications:

  • Launch events: these are watched by at least three separate audiences: the press, the Apple faithful and gadget lovers more broadly. Apple has different objectives for each of these three groups.
  • Website communications, such as the privacy letter: the letter is linked to from the front page of Apple.com, but only down in the bottom right corner, where many users visiting the site to learn about or order a new iPhone won’t even notice it. Those visiting the Apple site are going to be people with some interest in Apple products, many of them already customers.
  • Advertising: this is the only Apple communication that really gets broad play among the population as a whole, including those with no existing interest in Apple. TV ads, billboards, bus shelter posters and the like all generate broader awareness of and interest in Apple products, and its TV ads are particularly crucial.

Of those three sets of communications, only the third is mass-market in nature. Apple doesn’t typically say how many people watch its keynotes, but I would guess it’s 10 million or fewer in most cases. Even if it was double that, it’s a tiny fraction of its customer base (which numbers in the hundreds of millions) let alone the total addressable market. Website communications are likely read by far fewer people, though they also get some pickup in the press, as Tim Cook’s letter has this week. But advertising is where Apple not only talks to the total addressable market, but also where it provides specific triggers to buy, rather than just generating interest. Launch events are held before products are even on sale, and in the case of the original iPhone, iPad and Watch events, well before customers could even place a pre-order. Website communications like the privacy letter are about educating both existing customers and potential switchers, but again aren’t a call to action. Only advertising is a call to action: a specific invitation to buy an Apple product.

As such, the nature of these communications will be different. Just as the emphasis, tone and content of the iPhone introduction event was different from those of the ads that followed when the product went on sale, so I would expect the Apple Watch commercials to be very different in their tone and focus from the launch event. The launch event was about seeding interest and intrigue (with a significant element of mystery, especially around pricing), while the commercials will be far more specific, focused and with a specific aim in mind: getting people to buy one.

Quick thoughts: on Microsoft’s IFA announcements

Half the tech world is making announcements this week at the IFA trade show in Germany. A couple of other companies are making announcements elsewhere (Motorola today/tomorrow in Chicago, Apple next week in Cupertino). Samsung, Sony and other companies’ IFA announcements have received plenty of coverage, but Microsoft’s have flown somewhat under the radar, at least in part because there was no new flagship device. And yet I think there’s more significance in Microsoft’s IFA announcements than people realize. Here’s why.

Reconciling “devices and services”: a third way

There’s been significant discussion about how to reconcile Microsoft’s continued focus on both cross-platform services and making its own devices (this is a topic I’ve previously tackled here). The question has been: does Microsoft distinguish its services on the basis that they work just as well on any device, or its devices on the basis that its services work best on them? This week’s announcements suggest a third possibility: Microsoft will distinguish its own devices through commercial bundling of its services at attractive terms in a way others can’t match. For example, bundling in three months of Skype international calling with one of its new phones. We’ll see more of this sort of thing going forward both with Lumia smartphones and Surface tablets. Incorporating Nokia into Microsoft made this sort of thing much easier, and it will fully take advantage of that.

Smartphone positioning beyond low end remains challenging

Microsoft was smart to sit out this round of flagship phone announcements – Nokia’s flagships haven’t sold well anyway, but going head to head against new entrants from Samsung, Sony, Motorola, Apple and others seems particularly foolhardy. But Microsoft’s big challenge is that it’s been unable to establish a solid set of differentiators in the mid and high end, even as its “cheap, but still good” strategy makes big inroads at the low end. Its 500-series devices are its top sellers in almost all its major markets, and that’s useful for scale purposes, but it doesn’t help at the high end (and in fact may hurt if the Lumia brand gets a reputation for being a budget marque).

Branding strategy is confused but should be reconciled soon

The IFA announcements also highlight some brand confusion caused by the co-existence of the Nokia and Microsoft marques on the devices announced. The two smartphones are dubbed Nokia Lumia, while the accessories are the Nokia Wireless Charging Plate and the Microsoft Screen Sharing solution. The Nokia brand is supposed to go away soon except for low-end phones (since it belongs to the rump of the Nokia corporation), but that hasn’t happened yet. And yet Nokia needs to do more than just replace the Lumia brand – it ideally needs to reconcile its various hardware brands, at the very least Surface and Lumia.

Microsoft Screen Sharing has promise but not just yet

The Microsoft Screen Sharing device flew almost completely below the radar, but has in fact been heavily trailed for months. It’s a Chromecast equivalent, but at an Fire TV / Roku price point, and that’s its first big problem. But it’s symbolic in that it’s Microsoft’s first foray into the living room for non-gamers. The second big problem is that Microsoft has done very little to promote the Miracast support in its devices until this point, mostly because it hasn’t had a companion device to sell. But now that it does, the challenge will be educating existing device owners that their devices are compatible. Microsoft Screen Sharing may become a Google Cast / AirPlay equivalent brand which we’ll see show up in more places now, and I think Microsoft should absolutely play that up. But it should also cut that price significantly and/or enable carriers to bundle it for free with Lumia devices.

I’ll be publishing more on Windows Phone in the coming weeks as I have an in-depth report on the state of the platform coming shortly, though I may follow Microsoft’s lead in waiting until after the IFA / Apple hubbub dies down…

Quick Thoughts: Uber competitive practices

I’ve been meaning to try something different on here for a while now. Most of my posts are pretty long and in-depth, but every now and then I have a thought that’s too long to express clearly on Twitter and too short for an in-depth post. Those tend to either go unpublished or crammed awkwardly into a tweet (some of which do go on to become blog posts later). So today’s post is the first in what I think will be a regular series of what I’m calling Quick Thoughts.

Uber is in the news today for some of its more extreme competitive practices. Casey Newton at the Verge published a story, which got a prebuttal from Uber once they knew the story was coming. I encourage you to read both. Most people seem inclined to believe Newton’s piece, though Uber denies some elements of it while almost boasting about others.

Here’s the thing, though: what I think Uber is suffering from here is not so much the specific reporting as the fact that its previous behavior has made it so believable. There are two basic ways to compete in a market: focus on creating the best possible products and promoting them effectively; or spend most of your time focused on your competitors, and tearing them down. Both are common in the consumer technology market, and if we’re honest most companies engage in both to some extent, though the balance between the two varies widely.

But my point here is this: when your whole philosophy is beating the competition at all costs rather than building the best possible product, you create a culture in which employees will always be tempted to cross the line between aggressive and immoral, and between immoral and illegal.

I’ve seen this in lots of environments, perhaps most especially in enterprise software sales. This descent into inappropriate conduct is especially likely if you’re competing in a category where you have relatively little differentiation and a winner-take-all market structure. Uber and Lyft are essentially offering the same product, and trying to use the same basic assets (car owners wanting to earn a little more money) to do it. Potential Uber drivers are also potential Lyft drivers, and vice versa, and the overall supply is limited. Both services benefit from having the largest possible number of drivers on their platform and the smallest possible number on the other platform. It’s a zero-sum game to a great extent, and neither company has significant advantages over the other from a product perspective.

I’ve been a somewhat regular Uber user when I travel on business, and I’ve found the service enormously useful. I like what Uber and Lyft are doing to the transport business. But I really dislike the way they’re choosing to compete, because it leads to the kind of shady business practices Casey Newton’s report highlighted today. Whether or not you believe the individual allegations (I’m inclined to believe them), none of us should be all that happy about the basis on which these two companies are competing. The problem is that it makes for great theater, and much of the tech crowd seems more prone to pull out the popcorn and watch rather than doing anything about it.