Last week was so ugly the economic conditions had me up on YouTube looking for things to put a smile on my face, and I found two — one that has the “Pimp My Ride” folks pimping an IT shop with an Xbox (not some marketing group’s best moment), and an HP ad spoof that has Steve Jobs selling HP computers. Increasingly lots of us are viewing these ads and other short videos on our phones, and that isn’t all we are doing. E-mail, light document creation, and even a lot of gaming have moved over to cell phones.
With the launch of the G1 from Google, the coming introduction of the BlackBerry Bold and the maturation of the iPhone, more and more of us will be living off this new mobile platform. A recent study by ABI research is predicting the crossover between notebooks and smartphones will happen in 2013 — or 5 years from now, which agrees with my own projections. This will mean a significant shift. The last shift like this was when we moved from mainframes to PCs and IBM was replaced by Microsoft at the top of the IT pile.
This change is likely to shift the hierarchy as well, and both Google and Apple are shooting for the top spot, but only Google is currently positioned properly to take it and, unlike IBM, Microsoft is planning to put up a huge fight.
Let’s talk about the competition for the next platform, why Microsoft is at risk, and why Google is blending Chrome and Android in a Microsoft-like strategy to take out Microsoft.
We’ll end with our product of the week, a product I wish I’d thought of that can make sure all those pictures on your PC aren’t going to go away if you lose a hard drive or catch a nasty PC virus.
Smartphones Are Coming
The growth numbers that ABI research is predicting seem very aggressive until you realize that the total market for phones is estimated to be around 3.3 billion. These phones increasingly are becoming more capable and data services more affordable. Additionally, with the fact that the phone market — in terms of volume — is so much larger than the PC market ever has been and that smartphones roll against this 3.3 billion opportunity, there is a chance that the ABI report I mentioned — which seems aggressive — is actually more conservative than reality will be.
This is because the market growth models most of us are using are based on product growth into a market that isn’t primed for the emerging platform, and this one clearly is.
Now, what is keeping this market from going vertical this year isn’t so much the technology, though that does play a role (it remains too complicated for many). It is the cost of the data services, which, while they have been dropping, remain above what most are willing to spend right now. If we add in the current economic conditions, this move to more expensive products is being significantly hampered by conditions other than technical. The economy will improve, however, and with the introduction of WiMax, the cost to connect to a wide area data service should drop to affordable levels by the end of the decade.
By the way, we have two concepts running at each other: The smartphone, led by the G1, Blackberry and iPhone on one side, and the netbook running at it from the other. Smartphones are drifting larger and netbooks smaller, and we may be waiting for the ideal middle ground. Until we get there, check out the coolest netbook from custom shop Smooth Creations, called the “Smoothbook.” Now that’s something I’d carry.
Google vs. Apple vs. Microsoft
Google’s intent isn’t to go after Apple; the two companies don’t view each other as competitors. However, Google is attacking Microsoft on this smartphone wave, and when you have two companies with the resources these guys have going after each other, there is a good chance there will be collateral damage. Apple, Motorola and RIM (among others) could be hit rather hard as Microsoft and Google really start to engage in 2009 and 2010.
While Apple has traditionally out-marketed everyone else in the segment, it will have difficultly funding the kind of US$300 million campaign that Microsoft is currently running. Google, on the other hand, appears perfectly willing to match Microsoft dollar for dollar and toss in its considerable advertising placement technology on top of that significant spend. To counter Google, Microsoft is building up its own ad engine and no one else — including Apple — has the mix of advertising dollars and resources that these two companies are bringing to the table.
Now, I’m not suggesting that Apple or the iPhone will go away — Porsche did just fine while GM, Ford and Toyota battled it out for the lead in the car market. However, Porsche remained a niche and only recently started to move on VW to take a shot at becoming a major market leader (if you are into cars, this is a battle to watch).
If, and “if” is a big word, Apple wants to have a shot at dominating this new market as it currently does the music market (which may be displaced by these new phones), it will need to gain substantial additional capability, either through mergers or through partnerships, and neither is a traditional Apple path.
This, to me, means that either Google or Microsoft (of all the current players) — because they have the greatest resources and because they both have shown they can scale to the kind of numbers we are talking about here — will emerge as the new or reborn king of the hill.
Google vs. Microsoft: The Bridge Too Far
To win, Microsoft has to address the user experience problem it has with Windows Mobile and had with Plays for Sure. With that last, it doomed Zune and destroyed its own ability to out-scale Apple and assured that it would always be a smaller player in the MP3 space. That same path would have an even more dramatic limiting result here. But Microsoft still has to assure an iPhone-like user experience, and it has been unwilling to step up and do what it takes to achieve that on any platform it sells through partners — but that may be changing.
Google has a different problem. It is not a platform company, and this move to making platforms will distract Google significantly from its core search and advertising business. Google may end up losing far more revenue than it gains long-term, and that could keep it from funding this effort, which goes beyond Android and includes the Chrome browser, to displace Microsoft. Google’s path appears deceptively easier, but having studied companies ranging from Chrysler to National Harvester that made similar decisions, I would say it may also be the most risky. When you aren’t yet expert at something, it always looks deceptively easy, and Google is not yet expert at driving platforms.
It is too early to call a winner. That winner will likely be the firm that does the best job of getting out of its own way.
Product of the Week: Verbatim PhotoSaveDVD
Every once in a while, I run into a product that gives me a “damn, I wish I’d thought of that” moment. We all have lots of pictures on our PCs we’ve downloaded off our camera. Very few of us do regular backups, and I’m willing to bet even fewer know for sure that a restore will actually work. Doing DVD backup of pictures makes a lot of sense because you still can likely put all of them on one DVD and just toss the thing into some safe spot, but we can’t be bothered to go through and find the darned pictures, then copy them onto a DVD.
PhotoSaveDVD is a package of DVDs that has the application that finds and saves the pictures on it. You just load the DVD, go grab some lunch, then come back and all your pictures are now on that DVD, which you can now put in a safe place. Do this once a month or so, and you’ll probably never lose another picture. And even if you lose one DVD, there is a good chance you won’t lose all of them.
Memories are important, and pictures can’t be replaced. It’s cheap, too, at $15 for 5 — that’s $3 a disk. Because this is simple (and cheap), because it protects some of our most valuable memories, and because I wish I’d thought of it, Verbatim’s PhotoSaveDVD is my product of the week.
Rob Enderle is a TechNewsWorld columnist and the principal analyst for the Enderle Group, a consultancy that focuses on personal technology products and trends.