The Shape of Wireless Things to Come
May 3, 2012 5:00 AM PT
Congratulations to Samsung on earning the No. 1 position in the wireless smartphone sector. On the other hand, what is the problem at Nokia and RIM? What is happening? What other earthshaking changes can we expect in the wireless space next? Plenty. We are just getting started. So who and what will lead going forward?
My Pick of the Week is the new partnership between Barnes & Noble and Microsoft on the Nook.
Waves of Change
I was interviewed on Marketplace radio last week, and Stacey Vanek Smith asked me about the problems Nokia is now facing and what they needed to do in order to recover. I expanded the conversation to include BlackBerry maker RIM as well. These two companies led their segment until a few short years ago, but now they are struggling.
Things change quickly -- and this is just the beginning.
The change occurred because of the super smartphone Wave that Apple and Google started five years ago with the iPhone and the Android OS. They have transformed the space. Many are now struggling, while smaller competitors like Samsung now lead.
One of the key reasons many successful companies eventually lose is that the Wave of innovation passes them by, and they can no longer keep up. That is happening.
Another reason is they lack good public relations and analyst relations. Look at today's marketplace. It has completely flipped around. Leaders are now followers, and new or smaller companies now lead.
Over the last decade, companies like Nokia and RIM never really had to worry about PR and analyst relations. Suddenly they do. However, now when they need it, they realize they don't have the relationships that could be helpful.
I feel bad for the men and women struggling behind the scenes at those companies. However, this is an important lesson for every company. It just comes at a high price for two great firms.
Apple and Google don't worry about these relationships either. I predict someday they will have a similar problem. Will they catch on before trouble starts and build their public relations and analyst relations activity? We'll have to see.
The wireless space continues to change. Leaders and technology are both changing. So what can we expect going forward?
First, we have to determine what segment we are talking about. We have to realize wireless has several different sectors, including networks, handset makers, operating systems, apps and, increasingly, new industries like automotive and mHealth, which will expand and transform the entire space. There are many different companies in many different sectors.
Some sectors are growing, while others are shrinking -- even in a single sector like handsets. Smartphones are rapidly growing, while regular handsets are not.
Companies and executives need to understand where we are heading and prepare to lead in that new environment, because things change quickly.
If you are not riding the Wave -- like Apple, Google and Samsung -- you get left behind like RIM and Nokia. The formula is as simple and as complicated as that.
Today we have a new two-way race in the super smartphone space between Apple's iPhone and Google's Android OS. While this is good, we need better. We need more.
Microsoft has tried for more than a decade to enter this wireless space, but it has not yet rung the bell. Time and again, CEO Steve Ballmer has stood up and given an exciting presentation of its next-generation smartphone. Despite try after try, its efforts failed.
The Lumia Opportunity
Now Microsoft has teamed with Nokia on the new Lumia smartphone. It is a completely different operating system from both Apple and Android devices. That is good, because as popular as they are, the marketplace wants more choice.
This is a much more aggressive plan for Microsoft. Will it be successful this time?
I spoke with Matt Hamblen, a reporter with Computerworld, who hit the nail on the head with an article last week discussing how carriers are desperately seeking to make the Windows phone successful. He talked about how AT&T and Verizon want other smartphones to succeed so they can gain leverage with Apple.
The reason is simple. Apple is in such a powerful position in the marketplace that it thinks it can be arrogant and overcharge carriers just to carry its brand. Unfortunately, the carriers are paying up.
That may be successful for Apple right now, but it puts an enormous stress on the entire system. Plus, it puts distaste in the mouths of the carriers for Apple products. Will their capitulation to Apple come back and bite them some day? Yes, I think it will, unless they are very careful.
That's why I expect both AT&T Mobility and Verizon Wireless to really promote this new Microsoft and Nokia Lumia phone.
Whether this is successful ultimately depends on two things. One is the marketing and public relations. Two is customer acceptance. Will customers get excited over this new entrant? Many others have tried and failed -- like Palm, for example. So we will just have to watch and see.
However, I do see Lumia having a great deal of support in the industry. The reason is that the exploding smartphone space needs more choices.
In addition, what's coming next in wireless is exciting. Industry after industry is ready to reinvent itself.
As exciting as that possibility is, it is not always enough. Just look at the healthcare industry as an example.
The mHealth Promise
I got a call from a Motorola Solutions executive, and we had a great conversation about the changing future of the mHealth industry. We will be using our own handheld medical equipment, and it will communicate to our doctors from our home. In fact, many apps will also turn ordinary smartphones into medical devices to track diabetes, blood pressure and so on.
Motorola Solutions is positioned as a leader in this space, and it plans to be very important going forward. However, while it is always exciting to talk about today, the road is not clear. Progress, while happening, is not happening fast enough.
Why? There are too many different industries involved. They all have their own captains on the bridge, and none of them speak each other's language.
Qualcomm has been trying to spark a fire in this space for years as well, with limited success.
This is an exciting area, however, and some companies are moving ahead. It is the future.
The upcoming CTIA Wireless 2012 trade show in New Orleans will be a good place to read between the lines and see what is coming next.
Steve Largent, who heads the CTIA, says the industry has been changing since it started. I agree. This year's show should be exciting as it expands beyond the traditional wireless industry.
Expect to see much more activity in the smartphone space.
Expect to see the Lumia heavily promoted by Microsoft, Nokia, AT&T and Verizon.
Expect to see much more from Samsung now that it is No. 1 in the segment.
Expect to see hardware running RIM BlackBerry 10 hit the marketplace later in the year.
Expect to see wireless start to transform other industries, like mHealth and automotive.
Expect the super smartphone race to heat up even more and expand beyond Apple's and Google's platforms.
Expect to see other operating systems enter the fray.
In other words, expect quite a bit of activity and change in the industry.
The industry is full of companies and sectors that are both winning and losing. It depends what side of the growth Wave they are on. And there are plenty on both side of the Wave.
New fortunes will be made. New ideas will break through and change the industry. At the same time, some old- time leaders will struggle if they cannot change with the industry.
That's the nature of this business. It's like we are all sitting in a rocket and are strapped in. Shooting into orbit is a thrill, but it's also a helluva bumpy and stressful ride. Still, that's our wireless business, isn't it?
My Pick of the Week is the new Nook partnership between Barnes & Noble and Microsoft.
The e-book is one of the most exciting areas of growth in the tech industry. Among e-readers, the two leaders are Amazon's Kindle and Barnes & Noble's Nook. I have both, and I think they are two of the best and most innovative devices. They will continue to change the book publishing industry.
The question I always ask is why does Amazon get the majority of coverage and attention? Perhaps it is because Amazon is an innovative growth company.
Things may change now with the Microsoft partnership. Perhaps Barnes & Noble will be perceived as a real mover and shaker like Amazon.
This first Wave will be Microsoft partnering and giving cash to the Nook business. Good.
Microsoft will also put a Nook app on the home screen of Windows 8. Very good.
Next may be a Nook version of Windows 8 on the device itself, and much more as these two companies see a bright future in the partnership. Exceptionally good.
Microsoft is a good and important company, but while it is very successful in the Windows and applications space, it just can't seem to make a dent in other areas, like smartphones.
As I noted above, Microsoft's new partnership with Nokia on the Lumia could jumpstart its engines. We'll have to see what happens next.
This deal with Barnes & Noble, while great for the bookseller's Nook business, is also great for Microsoft. It makes its Windows and other offerings more innovative and valuable.
This could help both companies grow and expand.
So, congratulations to Barnes & Noble and Microsoft on this partnership. If done well, it could mean good things for both companies.