Friday, 14 December 2012

So long, 2012, we'll miss you!

After a busy 2012, the Amphibian is reclining on a beach in Vietnam, drinking cocktails out of a coconut. Normal service will resume on January 7th.

Friday, 7 December 2012

What I've been reading this week

I’m of the belief that participants in the TMT industry need to read widely in order to understand the present and future dynamics of the market. To that end, this post is a collection of the articles that have caught my eye.

This week: Spotify for everything, social advertising only sort of works but everyone loves it, Apple returns to the US, Windows get sticky for Microsoft. US planned to nuke Moon in ‘50’s.

Digital media

This is a well researched article on whether a “Spotify for books” service could work. I’m undecided. I think that a subset of readers will find this a valuable service, but in the early days the subscription charge will have to be set high in order to create sustainable value.

Meanwhile, the real Spotify has just passed the 5 million paying subscribers mark. That’s pretty impressive and suggests that annual revenue will be somewhere around $250M in the calendar year 2012.

Red Box Instant – Red Box and Verizon’s streaming movie joint venture – is delayed until the New Year.

Internet advertising will overtake print in 2015. Perhaps. I’ll be interested to see how the curated, written word news format develops in emerging markets. There might be a little life in print yet.

The Daily, Murdoch’s ill-conceived tablet only newspaper is closing its doors on December 15th. Can’t say I’m surprised. Reputation equity is one of the few things print newspapers have going for them right now. The Daily had none. Hence it failed.

I agree with the author of this post – mindlessly collecting social media rankings is pointless but something that many marketing departments aimlessly pursue.

And social ads are annoying, ill targeted but get this, also “somewhat useful” according to Nielsen. Although I agree, expecting Nielsen to get off the fence on this is like expecting turkeys to vote for Christmas (or anything else, seeing as they can’t reach the table in the ballet box and are scared of pens). In my opinion.

Still, marketers are always one for the Zeitgeist. They’re super-psyched by social and mobile for 2013. Bless ‘em...

...hence why 92% of agencies are using social in client campaigns. I’d love to see the ROI calculations. What’s that you say? The returns are HUGE? Because you value a “like” at $4? Of course... isn’t much better in truth – smartphone and tablet owners have a generally negative reaction to it. They’d better get used to it though, since it’s here to stay.

Technology market

A great report on the platforms in play in the smartphone market. Ars Technica are producing some great stuff at the moment.

Samsung are in the process of doing an Apple and launching a retail brand. A store has just opened in Paris. I worry about the onset of hubris with Samsung – getting retail right is not easy, it requires genuine understanding of consumer experience, which I’m not convinced Samsung yet has.

This is a classic – pointless – tech story. Rumour has it that the Xbox 720 will have only a 1.6GHz processor, half the clock speed of its predecessor. But clock speed isn’t directly analogous to processing power. Even if it were slower clocked, the 720 processor likely has many cores and is much more efficient than that in the 360. It may also have a comparatively low CPU and one or more high performance graphics and even physics processors. So there.

Nokia have suddenly had a mini resurgence and maps are at the forefront – the only area where they’re effectively competing with Apple and Google. Regular readers will know that I believe maps and street view technology to be an exciting growth market due to the rise of self-driving cars from 2013.

Breakthrough technology

The rate at which password cracking techniques are advancing is pretty scary – this monster, GPU-packing PC can break any 14 character password in 6 minutes using a brute force approach. Any of you have a 14 character password? Thought not.

Emerging markets

Syrian rebels are using Skype and sat phones in their campaign to overthrow Assad.

Microsoft is putting $75Mn into digital education programmes in Africa. Admirable.

Superpower politics

Apple is struggling to keep up with demand for it’s products. You can put that down to “supply issues” as this blogger does, or you can put it down to extreme demand in a PC market that’s otherwise stagnant. Windows 8 is the best thing ever to happen to Mac!

Curiously it seems that some iMac 21” models are assembled in the USA. Is Apple coming home? Probably not – likely the supply issues are causing smaller scale manufacturing centres to take up slack.

As these data on the Windows PC market show. Microsoft are in a tough spot.

Just for fun

I love this piece of retro jingoism. It transpired this week that after the USSR launched Sputnik, the USA needed to show that they were ahead in space. So they decided to nuke the Moon. Obviously.

Thursday, 6 December 2012

Effects of mobile on the economy

A few months ago I prepared an abstract for a paper on the effects of mobile technology on the economy. Since the requirement for the full paper has gone away, I thought I'd share as this summarises several previous posts I've done on the subject. Hope it's useful!

Mobile is often referred to as revolutionary.  I agree, but not, perhaps for the reasons most regularly cited. 

I’m not down on mobile technology. Smart devices have enabled greater scale and scope of communications between individuals, greater consumption of content, greater variety in that content.

Five years ago, applications were the preserve of suits with laptops. Now they are a mega-industry in the making. A new media untarnished by the false dawn of the dotcom era. Androids are cool for the first time since Star Wars.
Mobile has enabled all of this and still found time to revolutionise banking in Africa, catalyse the growth of the largest company in history and overthrow half a dozen regimes. Not bad for thirty years work.

Yet the largest effects of mobile are still to come. In proliferating to the degree they have, mobile devices have fundamentally altered the economics of technology. Low power, high performance computing is now a billion unit a year industry. Digital cameras: a billion unit industry. High resolution screens: you get the idea.

This is why you can buy a tablet computer for $40 on a market in Shenzhen; why it’ll soon be possible to wear your screen on your spectacles, rather than hold it in your hand; why robots have gone from something found in factories and fiction to commodity items that roll around conference suites and hospitals.

All of these applications grow the market for processing, imaging, sensing and communications technology. So those technologies get faster and cheaper still and devices using them proliferate ever-faster. The amount of data generated and consumed by these devices will be many orders of magnitude greater than today’s Internet. Managing it in the way we manage data today will be essentially impossible.

What seems likely to change in lock step is the nature of human consumption and manipulation of data. Rather than today’s more-or-less linear consideration of information, the consumer and worker of the near future will be a fast twitch being, flitting between layers of content that inform, enable and entertain, all empowered by an equally diverse ecosystem of connectivity and service.

Fast twitch responses and instant, infinite information provision will further increase productivity, a boon as decreasing technology costs and increasing capability make automation ever more possible. Supply chains will fragment, yet become markedly more efficient as advanced manufacture processes and simple localised supply and demand matching platforms supersede manually enabled super-scale global ones.

The threshold at which human beings are required to participate in business processes will rise and rise fast; however this is unlikely to lead to more free time. Instead, white collar workers will be required to compete harder to derive insight from a flood of data. Efficient software agents, matched to machine vision and voice-controlled interfaces will go some way to empowering this process, but the demands on the human brain will be greater than at any time in our history.

All of this machine enablement should fuel the most rapid growth in global GDP in human history. But we shouldn’t be complacent. Growth is not merely a function of MIPS, terabits and megapixels. Legislation and regulation must loosen or tighten appropriately to avoid stifling progress; education in particular must evolve to become more relevant to a society in which experiences are customisable and fit for purpose. It is these basics that must be correct if we are to build a digital dividend, rather than a digital divide.

Wednesday, 5 December 2012

What I've been reading this week

I’m of the belief that participants in the TMT industry need to read widely in order to understand the present and future dynamics of the market. To that end, this post is a collection of the articles that have caught my eye – a late posting this week as I was on holiday. Lucky me!

This week: Apple and Amazon beat Microsoft on Black Friday, Volvo goes self-drive but Cambridge warns of robogeddon

Digital media

ITN launch a citizen journalism on Youtube. Perhaps one of the aforementioned citizens can post a story about why ITN would do that.


Jawbone were one of the first companies to launch a wristband activity monitoring product. Seems like they’re still learning.

Tiresome tech wannabe launches an add on gadget that turns the iPhone into a camera. Unless it’s super-cheap I don’t see the point, although I’ll doubtless now be proved wrong by the power of celebrity.

Amazon’s “Black Friday” sale in the UK yielded record sales of Kindle tablets and eReaders. These categories will be the tech’ gift of Christmas 2012 and a force for change in publishing in 2013.

Nokia has re-introduced “Facebook” buttons on phones. I think this might be a good idea – it’s still faster to press a single button to jump to a function than navigate a menu. Good for Facebook too, provided it is the default setting. Most users won’t bother to customise.

The revamped Asha looks like it could be a real winner for Nokia. Here’s more details about some of the device’s features – aimed at catering for multi-SIM users and social sharers.

Intel has reduced forecasts for sales of its education tablets. Intel not a consumer brand? Who’d have guessed?

Galaxy Note was one of the unexpected tech successes of 2012. Samsung have managed to sell 5 million of the sub-tablets/ super-smartphones worldwide.

Inrix is an interesting company that provides real time traffic data. The article shows Black Friday congestion – a barometer for retail sales, but I’m more interested in the increase in points of presence, all of which are collecting data that will be useful for self-driving cars.

Breakthrough technology

On the topic of self-drivers, Volvo are launching their own in 2014. My prediction is already coming true J.

Bionics are another super-growth area. Here’s some information on different types of bionic leg.

Cambridge University are investigating whether robots will one day try to overthrow us. Glad we’re funding that out of the UK Government research budget.

Emerging markets

African innovators are benefiting from the reduced infrastructure in their countries according to Ethan Zuckerman. I can’t agree. It’s much better to have all the infrastructure and brilliant access to information and capital. Necessity is the mother of invention, but how innovative is your mother?

An excellent blog post about the divergence of sub-Saharan African economies.

Superpower politics

Sigh. Just when you thought the Patent Wars were on the wane, Apple takes aim at Samsung once more.

Apple comfortably outsold Microsoft on Black Friday according to exit polls conducted in the US.

Friday, 30 November 2012

2013 trend #4 - the decline of print

My predictions for 2013’s TMT trends have so far covered wearable computing, 4G and self-driving cars. In this fourth installment I’ll look at the emergence of truly digital business models in the book market.

What it is: the speed at which ebooks have come to prominence as a viable alternative to print seems to have taken the publishing industry somewhat by surprise. So far the business model by which these digital books have been sold has been a carbon copy of the physical book market: titles are priced and sold individually, often for the same or a higher price than the physical version. But many of the models that have driven the growth – and death – of other media in digital markets are also feasible for print. And it’s these that I expect to come to prominence next year.

My prediction: 2013 will mark the largest shake up in the business model and structure of the trade (aka consumer) book market since the paperback book. 

  • The number of large publishers will halve
  • eReader penetration in the UK will exceed 40% of the adult population by the end of 2013. These single function devices will be supplemented – but not substituted – by applications on tablet computers and smart phones
  • In volume terms, half of the UK trade book market will be delivered electronically.
  • In value terms the trade book market will contract by £100Mn

Why I think this: like the music industry, the book market has endured for many decades based on the nature of the relationship between publishers and creators. The dream of the creator is to receive a healthy advance, for which they deliver a finished manuscript to the publisher for editing, preparation and distribution. The publisher does a lot of useful things – co-ordinating the process of printing a physical book, organising its distribution into channels and marketing it with readers. They also apply a little of their reputation equity so that the reader has the confidence to spend £7 or more of their Earth pounds on a relatively unknown pleasure.

Of course it wasn’t always like this. Dickens wrote a number of his greatest works episodically for publication in newspapers. Limited time between creation and publication meant that the role of the editor was more limited then than it is now. Likewise, the total expenditure by the reader was rather lower – certainly relative to the then high price of books – so there was an easier trade off between price and quality. There was more reader choice too, again relative to the smaller number of titles then readily available to readers.

Low quality, low priced self-published titles consumed on eReaders are a modern re-imagination of a value equation that the traditional book publishers have hitherto believed favoured curation and high cover price. My thesis is that the availability of heavily marked down physical books in supermarkets has already commoditised the book for many readers and that eReaders will simply continue that trend.

My prediction is that the eReader and the tablet computer will be the varsity present of Christmas 2013. My “field work” on Putney High Street uncovered the fact that eReaders are now not just a product for electronics stores and book shops but are also worthy of shelf space in the hardware store and a high street clothes retailer. At £50 and below they could well be the new DAB radio – a present that the recipient probably won’t have, is expensive enough to feel special but not overly so.

More eReaders, more tablets and more smartphones means more places to view ebook content. And wherever there are screens and content, there’s innovation. Amazon are already offering a couple of new business models aimed at both professional and self-publishers: serialisation and loans (bundled into their Prime subscription service). Others are at it to, with “pay what you want” or "pay what you read" and book club based models coming into the market this year. There have also been early attempts at “Spotify for books” services.

New models are probably mainly for early adopters. The mass market, newly screen equipped, are more likely to dip their toes in the water. I suspect that the first thing most of those receiving a Kindle, Nook, Kobo or any other reader will do is download free classic books to begin the process of filling their virtual shelf space. So the journey into this new experience will start with free.

Most new self-published content is pretty bad. But I wonder whether people who pay 99p for it really care all that much. Many readers will simply read books to pass the time, in the same way that they read a cheap gossip magazine. Also remember that most readers are relatively undiscerning (the average IQ is 100...) so they might not notice plot holes, poor editing and so on. They’re just looking for a bit of escapism. 

I’ll mention 50 Shades here, because I feel I should. It’s not the only self-published title pushing huge volumes, but it is the most public. I also love the parodies – here’s two of my favourites: 50 sheds of grey and, for the football fan, 50 shades of Andy Gray.

Implications: I’m not suggesting that the traditional publisher will imminently disappear, merely that their influence will decline. As with record labels, large publishers are the best way for popular creators to monetise their wares, in that they offer reduced risk for reduced return. What will continue is polarisation of the market. 

Mid-market fiction titles could well disappear from the publisher catalogue as the economics of producing them degrade. This could be seen as a long term “dumbing down” of literature; however my view is that the high brow titles may simply find themselves part of subscription services targeted at a particular niche. The movies versus TV analogy which works so well in games also applies here – the big authors will still make big bucks, but most written content will be (and to an extent already is) filler.

Is any of this for 2013? Not much, but we’ll see the trend developing in terms of volumes moving rapidly to electronic and an upsurge in UK self-published authors. I’d be surprised if there wasn’t a UK equivalent of EL James in 2013. Habitual behaviour will mean that the print book will soldier on for a decade at least. But soon it’ll be the niche product and that will open up a world of exciting business and creative opportunities.

Wednesday, 28 November 2012

2013 trend #3 - self-driving cars

In my first posts about 2013’s trends I covered wearable computing and 4G in the UK. In this third instalment I’ll look at the self-driving car, a long predicted technology that is finally ready for the limelight.

What are they: pretty simple to describe! A self-driving car doesn’t need a human driver to get from A to B. The driver tells it where to go and the car does the rest, navigating, dodging other road users, swearing at bad driving and doing burn outs at traffic lights.

My prediction: cars that self drive under certain circumstances will go on sale in 2013, starting with Mercedes’ flagship S Class and Audi’s A8 executive saloon, both of which are already announced. These first generation self-drivers can operate autonomously on the motorway, but not in urban areas or back roads. Second generation self-drivers, able to operate anywhere, are probably for 2018 or 2019’s models.

Why I think this: Plenty of cars on sale in the UK today have elements of self-driving technology in them. These “generation zero” elements are technologies like self-parking, collision avoidance and adaptive cruise control.
The chart shows the proportion of cars launched in the last 3 years on which these technologies can be specified as an option. What Mercedes and Audi will offer next year is integration that make these things work together as an autopilot under controlled conditions.

Motorways represent a simple driving environment. They are relatively straight, the chances of unexpected events like a child running into the street are extremely low. Furthermore, traffic speeds are relatively sustained and predictable. With lane following sensors, adaptive cruise control (which maintains a distance between the car and that in front, rather than a set speed) and collision avoidance systems (automatically stops the car when objects suddenly appear in front of it) the in car computer can take control of driving in traffic or on open roads.

All of this is made possible by other fundamental changes to car architectures that have happened somewhat under the radar of the average consumer. Electronic power steering and throttle control have replaced direct mechanical control, principally because they are a means of reducing fuel consumption.

In most new cars, turning the wheel or pushing the throttle is actually an instruction to a computer to do something, rather than a direct link to the wheels and engine.

Full self driving cars are more challenging. As Google have ably demonstrated in Las Vegas it is perfectly feasible to create a package of processing, sensors and hardware that enable a car to drive on any road, recognising signs and navigating the street.

Rumour has it that Google’s technology package costs $200,000. I’ll get to the money in a minute, but first, the tech’. I’ll make a list, because I’m in that sort of mood:

  • GPS – navigation systems are a common fixture in today’s cars. All but one model launched in the UK this year and last could have integrated navigation as an option. This is a fundamental technology for the self-driver as it enables long range journey planning (i.e. the driver to tell it to go to the shops and the car to know where that is). It also enables the self-driving software to “know” what the road looks like. Warnings of traffic lights, street furniture, speed limits, traffic and so on are all features of the latest navigation systems. Having foreknowledge of these things will enable the computer to be alert to danger zones.
  • Street view – Google’s street view and equivalents are a useful part of the car’s situational awareness suite as they offer another perspective on the roadside environment. What would be even more useful is the use of a live street view from the cameras of cars navigating the same route that give warning of unexpected roadside situations – road works, for example.
  • Data connectivity – many mid-to-high end cars are available with cellular data connectivity built in. If there were a single web service that enabled interchange of the data they collect on traffic conditions, street views, the position of other cars and so on, then the practicality of self-driving cars would increase considerably. Frankly even if a major manufacturer like VW did this for its group then feasibility would increase.
  • Machine vision – can read road signs and use the results to determine likely hazards, traffic laws and so on. Can also detect red lights, which is useful. Some cars – Ford’s Focus, for example – already feature image recognition technology that flash up speed limit warnings on the dash when they see a sign beside the road, but the feature is not yet integrated with safety systems
  • Lidar – or laser radar – uses a rapidly rotating laser to scan for objects and thereby builds a 3D picture of the environment many times a second. This is an intermediate range warning system that enables the car to understand where objects are in a 20-50m radius.
  • Collision avoidance/ adaptive cruise control – these systems are based on either radar or ultrasonic systems and are a last ditch defence against objects that unexpectedly appear. The classic emergency stop by the car in front challenge.

I understand that Google’s $200k self-driving package incorporates most of the above technology. This seems like a crazy amount of money, but unlike really cutting edge tech such as fuel cells, the Google package is basically all standard computing and sensing technology. The Lidar is the only low volume component.

If you apply Moore’s Law to that cost, you end up with the complete package costing $12,500 by 2018. That’s still quite a lot (and assumes quite a lot!). The other thing that’s worth considering is that once the algorithms that enable a car to self-drive are understood, they also improve at a considerable rate. So in reality the computing gets cheaper while the problem gets easier.

The minimum I’d expect is that the cost of providing the complete package of tech would fall below $20k by 2018. It could be a lot lower and doubtless will be if there’s widespread adoption amongst automobile manufacturers.

Implications: Self-driving is hugely beneficial for society. Computers are simply much better drivers than people. Although the very best human drivers might be faster than a computer, they still get tired and are randomly fallible. If the majority of cars were computer controlled then accident fatality rates would fall – possibly quite substantially.

Furthermore, human drivers are pretty poor when it comes to avoiding jams and driving fuel efficiently. Computers are much better. So emissions would fall, journeys would – on average – be faster.

Productivity and general wellbeing would certainly improve as well. Commuting time is not particularly productive time and it’s often (but not always) relatively stressful.

But there is a crucial hurdle to get over. Very few people would feel comfortable with letting an invisible driver control their vehicle, at least initially. In most parts of most of the world self-driving cars are illegal as the driver has to be in control of the vehicle. Whether legal systems could accommodate the challenges of computer glitches causing accidents (as opposed to far more common human glitches) is another question entirely.

Google’s experiments in Las Vegas graphically demonstrate the feasibility and benefits of self-driving cars. If human reticence to believe in the power of the machines that they’ve created can be managed, then the rest of the world can soon enjoy the same upsides.

Monday, 26 November 2012

What I've been reading this week

I’m of the belief that participants in the TMT industry need to read widely in order to understand the present and future dynamics of the market. To that end, this post is a collection of the articles that have caught my eye.

A short update this week - I blame Thanksgiving, even though I live in London.

This week: More social/ Gaza news, Nokia leaves Windows (a bit), Steve hopes MS is becoming cool again, Apple UFO delayed

Digital media

After Penguin House, Harper Collins and Simon Schuster are in merger talks. Publisher consolidation is inevitable as innovation finally enters the book market via digital.

The Gaza conflict is another step in the digitisation of warfare, but it’s a two edged sword: the IDF has had to tell citizens not to tweet where rockets land to prevent social media being used for targeting by Hamas.

Here’s a summary of the broader Gaza social war. A quick and worthwhile read.

Nokia has finally clocked the fact that it needs to get off Windows... if only for applications. It has launched the ‘Here’ mapping and discovery for iOS. A new dawn in Espoo?

Businesses are all about innovation these days. IBM’s latest research says that lots of companies are using social media to enable this. Excellent, but how many of those using it are actually innovative? It reminds me of Geocities – just because you can create doesn’t mean you’re any good at it.

Young people watch 15 minutes less TV a day than they did a year ago. Interesting – a slow drift away from the platform perhaps?


My view is that wearables will be a big trend in 2013. Here’s another new device hitting the market soon – an unobtrusive movement sensor similar to Nike Fuelband, but half the price.

It’s not just wearables – drones and robots taking advantage of cheap processing, interface and detection are on the rise. This self-flying UAV can be used by non-pilots. The computer does the flying. It’s the future.

Turn your smartphone into a Star Trek style diagnostic device. Sounds good and more reliable than trying to self-diagnose in isolation.

I missed this when it was first reported two weeks ago: Canadian researchers have established two-way communications with patients who’ve been in persistent vegetative states for many years. This has huge implications, not just for the people in question, but also for device interfaces. Amazing stuff.

This analyst expects PC demand to be weak over the black Friday shopping weekend. I agree – the PC is now an item that is replaced infrequently, like the TV before it. They’re still a fixture in the home and the office. So I think they’ll cost more and last longer.

Superpower politics

I’m not sure I agree with this bloggers assertion that Microsoft is capturing public perception, but it’s a well thought out view. That said, I’m reminded of the car industry, in which the car experts will bang on about the latest Alfa Romeo ad infinitum; however when it actually comes to recommending something, they’ll never stay away from the safe, high quality, low risk German alternative... these data from Pricegrabber demonstrate, iPad is the tablet/ tech that consumers want.

Steve Ballmer, on the other hand, believes that there are four ways of making money in technology... but these all seem like customers, Steve? Where are the business models? How good are you at that?

Last week I reported how Apple sabotaged Google’s data centre with an alligator. Google, however, at least has a building – Apple’s new HQ is delayed until 2016. Poor show.

Tuesday, 20 November 2012

2013's trends #2: 4G in the UK

In my first post about predictions for 2013 I covered wearable computing. In this second instalment I’ll look at “4G” in the UK, another hot topic amongst my clients. Apologies to non-UK readers for the parochialism – perhaps there will be some useful context for your own market within this prediction.

What is it: “4G” is a term used to described the next generation of mobile network. 4th Generation networks offer a number of user experience advantages over their predecessors, foremost of which are greater connection speeds and quicker responses. In the real world this means less time spent waiting for web pages and Internet-connected applications to load and respond and smoother video when using cellular networks.

In the UK we already have a limited 4G service delivered by Everything Everywhere; however it will be summer 2013 before we see the long term networks come on stream from the other UK networks (EE will also ultimately move their network to mirror their competitors). Preceding the network deployments will be a set of auctions for the radio spectrum on which signals are carried.

4G is synonymous with the LTE (Long Term Evolution) standard. In reality, for various technical reasons LTE is not actually a 4th generation standard at all. It will ultimately evolve into one when LTE-Advanced is fully deployed.

My prediction: Because of the complexity of the issue, I have split the prediction 4 ways:
  • Collectively the UK’s mobile operators will pay 5 billion Euros +/- 10% for the 800MHz and 2,600MHz frequencies on offer
  • Although there will be additional bidders besides Everything Everywhere, Vodafone, O2 and 3, the UK market will remain a 4-player one at a network level
  • By the end of 2013 2.5m 4G-connected phones will be in use in the UK; however tariffs will retain the capacity limits in evidence today (e.g. 500Mb of data as standard)
  • There will be a large number of media stories relaying the disgruntlement of buyers of the iPhone 5 and cellular connected iPads who will be unable to use 4G services despite branding to the contrary
Why I think this: Although Ofcom have set a reserve of £1.3B on the spectrum on offer, evidence from recent European auctions suggests that the asset carries a substantially higher intrinsic value. At a lower price a non-trade (e.g. private equity or equivalent fund) buyer could create an attractive business case for that asset. Likewise I suspect that incumbent Telco BT will bid as a cheap price would make the case for a renewed mobile offering attractive.

From a consumer side, the mobile operators will launch a massive marketing campaign and push 4G-ready handsets very heavily. LTE (the 4G standard that will be deployed in the UK) makes better usage of the expensive spectrum asset and therefore it is proportionally cheaper to carry data, voice and SMS traffic on LTE than on its predecessors. The marketing costs around 4G will therefore be a price worth paying. A knock-on effect is likely to be a bounce upwards in advertising spending for 2013.

In terms of the numbers of handsets in service, Deloitte research suggests that 15 to 20 percent of consumers will replace their phone next year. In countries where 4G services have been heavily marketed, as many as half of consumers say they will choose to replace their current handset with a 4G device. In this case as many as 2.5m 4G handsets could be in service by the end of next year. Although these customers will enjoy higher speeds than those restricted to 3G, the large number of consumers using 4G networks before they are fully deployed mean the difference will be less significant in 2013 than marketing messages might suggest.

Vodafone, O2 and 3 customers who have already invested in iPhone 5 or iPad devices in 2012 and 2013 might well expect that their devices will work on the new 4G networks as they are 4G-ready. Unfortunately the 4G networks being deployed by their operator will not support their devices as it operates on different spectrum. This will prove difficult to explain.

Implications: a legion of ill-formed commentators believe that 4G/ LTE will “change everything”. In reality this is an incremental upgrade to today’s 3G networks and the consumer benefits will initially be small. There will also be many comparisons between DSL broadband and 4G. These too are uninformed – physics mean that cellular wireless networks cannot currently approach the capabilities of fixed networks for carrying large volumes of data traffic, particularly given the caps that will remain in place on 4G networks.

Any business that provides a mobile experience for its customers or mobile tools for its employees would be well advised to take hype emanating from the telecoms industry or popular media with a pinch of salt. 4G is an improvement on 3G but in use will only just meet the original promises attached to 3G. Creating bandwidth-hogging experiences that use the technology’s promised capabilities would be ill-advised. Business as usual is the best policy.

Monday, 19 November 2012

Ireland's bumper 4G auction impresses

Lots in the press today about Ireland's 4G spectrum being allocated. No real surprises in the winners, who were drawn from the existing network operators, but the price they paid was pretty astounding. The "on target" value of the spectrum was about EUR677 using my market model. As the link shows, Ireland achieved EUR855, 21% over the expected amount.

I suspect that recent turbulence in the ownership of telecoms companies in the country has rather inflated the bidding for what is an important asset but in a small country with limited head room for growth in its telecom market. Still, this bodes well for a good result for the UK when our equivalent assets are auctioned in 2013.

Sunday, 18 November 2012

Impressions from Newsxchange #3 - a billion camera world, Millenial portrayal and the future of broadcast news

The final part of my impressions from Newsxchange 2012 is the text of my own speech at the conference, which was 1/3 of an Associated Press session on the future of news broadcasting. My piece covered the effects of proper technology on the creation and distribution of news. I don't do much work in the industry, so this was set up as a techie's impressions of the future.

Innovation in capture devices like the panoramic ball camera and Google Glass have been enabled by massive growth in the sales of smartphones and tablets, which next year are set to be the first billion unit a year computing category.

And when you have a billion smart devices shipping, you have the manufacturing capacity for billions of fast CPUs, billions of DRAM chips and billions of CMOS digital camera chips. And what's more, there are tens of thousands of people with the software and hardware design skills to bring those components together into an amazing computing experience.

But back to cameras. The human race has become obsessed with recording itself. 250 million photos are uploaded to Facebook every day, tens of millions more on other social networks.

There is a substantial degree of narcissism in the behaviour of social network users, which I expect to drive great success for wearable technology. It will also, I expect, create difficult conditions for delivering World news to Generation Y and Millenial audiences.

The problem, as I see it, is that avid social network users are immersed in their own story arc, in which news is always breaking. Since being part of the action is always more impactful than watching from afar, there is now a substantial part of the developed market audience who will only dip in and out of the traditional fare of broadcast TV news providers.

It's important to mention at this juncture that this really is a relatively small proportion of the total global audience. Facebook may have a billion registered accounts, but a substantial proportion of these are duplicate or fake. More still are effectively inactive - the accounts of parents and grandparents experimenting with the technology. The average Facebook user does four things on the site daily - be that posting a status update, liking something or posting a photo. Advanced users are few and far between in 2012.

Other social networks are an irrelevance in the grand scheme of things. Deloitte data suggests that even Twitter counts only 40% of early adopters in the UK as members. Fewer than 20% of the mass market even have accounts. And the UK is traditionally an early adopting market. News organisations can get as excited as they like about Twitter, but it has a long way to go to threaten their existance.

Even so, the long term future is clouded by the problem that has also beset newspapers. At some point in the next decade Generation Y will be the force majeur in global spending. And if technology continues to advance as it has done, their media lives will be dominated by the personal timeline. This isn't a slight against TV, which I expect to continue to be popular, it's just that connected time will increase to the point where most waking time is connected and most connections are rich in the extreme.

In my view this will be an audience that is interested in many things. An audience that wants to be informed of things that are happening in the world the instant that they occur and will want to deep dive frictionlessly into detail where they find interest.

This is why the role of the news broadcaster and the journalist is as relevant now as it has ever been. Curating the huge volume of stories coming to light at any one time and providing a neutral view on their significance and further reading is something that only a trusted party can provide. Most Internet users are anonymous to the majority. News broadcasters are by their nature in the public eye.

But this can go wrong if the industry fails to get one thing right. Just as it seeks to portray news in a manner that is sympathetic to the attitudes and motivations of the subjects, the industry needs to consider portrayal for the audience of tomorrow.

Gen Y and Millenial portrayal is the most important thing that the news broadcasting industry has to work on right now. Get it right and it can be one of the most equitable parts of the future reputation capital based Internet. Get it wrong and eventually a true disruptor will emerge to take their place.

For me, that means two things. First, creating an operating and technology model that enables sources to be gathered and sourced from a huge range of channels and distributed back in economic fashion. That quite possibly means looking beyond today's broadcast hardware suppliers and instead seeking advice from the burgeoning software industry. Marklogic and Opentext may well be the Sony and Panasonic of 2020.

Second - and most importantly - it means ensuring that journalists must remain impartial and inquisitive. It's all too easy to pursue short term gain with shock stories, but this is an all or nothing strategy and exposes mainstream journalists to competition from the entire of the Internet's gossiping classes.

If the industry takes this path then it will devolve into a free-for-all of freelancers and the crowd will take over. Only in long term integrity and use of financial power (which however depressed the industry is, remains colossally greater than that of citizen or online journalists) can news broadcast endure.

What I've been reading this week

I’m of the belief that participants in the TMT industry need to read widely in order to understand the present and future dynamics of the market. To that end, this post is a collection of the articles that have caught my eye.

This week: Gaza conflict spreads to social, Pebble suffers growing pains, Apple to lose tablet dominance next year, attacks Google with giant reptile

Digital media

The most interesting bit of this fluff piece on how people use their mobile phones is the proportion of UK consumers that think the devices stop them truly relaxing. I can’t decide whether uptake of wearables would make relaxation easier as the connected experience fades into the background, or harder because connection is even more persistent.

Israel’s offensive in Gaza has led to a rather public slanging match on social media, with Twitter hosting the brunt of the fighting. A couple of articles on the subject:

eProf is a technology platform that allows anyone to become a teacher in an online classroom and charge lucky students for the privilege. Nice idea and a natural extension of the cult of expert trend that has been building on the Web for a while now. Here’s some more about it.

Matter, a kickstarter funded business that intends to produce well thought out essays on a rolling basis and sell them for $0.99 a time has just published its first story. In a sign of things to come, it’s about a psychological condition that compels the sufferer to amputate their own limbs. I’ll stick to X-Factor.

At the other end of the digital media spectrum, Spotify has just received another $100m in funding, with $10m coming from Coca Cola, of all people.

Business models

Facebook are daring to charge brands for reaching their target audience. As the title of this blog makes clear – that really shouldn’t be a surprise!

Bloomberg is launching an app store to enable users of its financial systems to get alternative features and create an apps revenue stream for themselves. A number of specialist platform providers have gone this way recently – RM in UK schools being a good example. It’s fine as a strategy provided you can fulfil one side of the bargain, which is to bring in captive consumers. Bloomberg clearly can and I suspect this will work well for them. Others I’m less convinced about.

The Pebble smartwatch was a huge Kickstarter success story, so much so that they’re struggling to fulfil orders in time for Christmas. The positive spin to the story is that it’s pretty amazing to get a product like this designed, built and launched in such a short time. Ten years ago this would have been a multi-million dollar, two or three year project. Not anymore.

Programmes like Haxlr8r in Shenzen will enable technology start-ups to advance to manufacture much faster than has previously been possible... provided they can afford the downtime.

Practical advice from innovative leaders on how to create innovative organisations. Number 1, use your mind. Too many leaders are operators in this day and age (I blame “best practice”). They need to think and to explain the future to their organisation.

An interview with Dennis Crowley of Foursquare fame about how he’s aligned that business around a Brownian pursuit of his North Star. Or vision, to the rest of us. Some good lessons in this piece.

Use of predictive analysis to work out where crimes are likely to occur ahead of time is a smart idea and, according to IBM at least it’s possible and UK police forces should be doing more of it.

Walmart is a smart business. It’s using it’s impressive logistics platform to launch new businesses into niche markets – a similar strategy to that taken by Amazon. This one delivers artisanal food boxes on subscription. Not a typical Walmart business, but popular in much of the developed world’s aspirational classes nonetheless.

I can see local peer-to-peer delivery services making a big splash in 2013. Here’s a short article about Instacart, which is doing just that in the US.


Data can tell you a lot about the performance of sport, but as this Washington Post article explains, there’s also lots it can’t. A lesson that advocates of BIG DATA should heed.

Natural selection has made us more stupid than our ancient ancestors, according to new research out of Stanford. Interesting philosophical point, but fortunately collective intelligence is enhanced by mass communications, so although we have perhaps reduced raw creativity by devoting evolutionary imperative to disease resistance and so on, we now waste less time on blind alleys and have to compete with ideas from a much wider community. But then I’ve never been the sharpest tool in the box.

A nostalgic story about the first British laptop, from back in the days (1984) when we were leaders in computing (and yes, I know about ARM and CSR, but I mean a full on computing industry)

Emerging markets

A wonderful article on the reality of African emergence on the global scale. This is a story that is positive on the individual level, but should not be overstated into a driver of global economic growth. Yet.

African mobile subscriptions to break 750m this year, say Informa. I say 750m SIMs, which is an important distinction. A personal focus on economy and the poor quality of networks in much of the continent mean that multi-SIM is a common behaviour, so it’s likely the actual number of subscribers is much lower – perhaps 400m? Other interesting stat: only 5,000 LTE subscribers on the whole continent today.

7iber is a great service that enables citizen journalists in the Middle East to tell their stories. Worth looking at during the current Gaza crisis.

Superpower politics

iPad’s share of the tablet market will dip below 50% for the first time next year. Amazing it’s taken this long, to be honest, although shipments are massively up and I’d imagine Apple remains the most profitable company in the industry by a country mile.

Android is also more than 90% of the smartphone o/s market in China. Again, no surprises there.

Some stats on iPad Mini purchasers – apparently they’re more likely to be new to tablets and replacing PCs with them than they are to be replacing a full size tablet.

Apple and HTC have settled all patent litigation. The beginning of the end of the patent battles or a lull before an Apple/ Google/ Samsung showdown.

And is the first salvo in this battle the introduction of a 4 foot long alligator into the cooling pond of a Google server farm? Read here to find out:

Friday, 16 November 2012

Impressions from Newsxchange #2: the role of Twitter in broadcast news

Next up in my impressions from Newsxchange 2012, an interesting conversation between Erica Anderson (@ericaamerica, followers: 10,700), Head of News for Twitter and Rory Cellan-Jones (@BBCRoryCJ, followers: 42,000) the BBC’s technology correspondent and self-confessed Twitter-holic, about the use of Twitter in News Broadcasting.

Erica is in charge of creating a mutually beneficial relationship between news organisations. She’s an former journalist for CBS News and citizen journalist for MTV. Since 2011 she’s been responsible for the health of Twitter’s relationship with news organisations, enabling them to use the platform to connect products, services and stories. Interesting initial revelation: there are no phones on the desk at Twitter.

Erica came to Twitter having been on a personal journey to learn how journalists can learn about new tools and how to apply ethics to it in a much more connected world where there is a great deal of misinformation. Journalists need to be able to apply context to the information fire hose on behalf of readers. It’s also the case that although citizens can now be journalists, they are so by circumstance – they don’t know that they’re the source until they go viral. Their reputation capital might not be up to their new role so they need to turn from journalist to source.

Twitter offers or promotes a couple of tools that can help newsrooms use Twitter in their editorial. Topsy is a service (not owned by Twitter) that enables users to trawl through a historic database of tweets to track conversations. Erica gave the example of Gaza, which has been mentioned in 309,000 tweets in the last 24 hours. Topsy could help a journalist figure out what’s valuable and how to support their angle.

The second tool is Tweetdeck for newsrooms. Tweetdeck (a British company that Twitter acquired in 2011) is another analytics tools that helps news organisations (or anyone else) figure out what happens when they tweet by comparing retweets, mentions and traffic dynamics between a website and Twitter.

Rory asked for good practice examples from the news broadcasting sector. Erica had two; first, MSNBC and the Breaking News business they recently acquired. The @breakingnews handle (followers: 4,200,000) has been demonstrably fed traffic into MSNBC and been used to break and maintain stories. In my terms it has great reputation capital.

The second example was the BBC’s Middle East Bureau Chief Paul Danahar (@pdanahar, followers: 20,600) who’s been in Gaza this week tweeting photos that have started off story threads and enabled checking of the accepted “facts” back in the office. These are examples of a change in the world. News used to break and only the news wires would have access, now it breaks in public so the news wires need to have the trust of citizens not just each other in order to be relevant. In Erica’s estimation, when there are unplanned events, people come to Twitter to find out more about them. Because of the size of the fire hose, reputation capital is very important on Twitter.

Organisations are therefore understandably wary to risk their reputations on Twitter. Over time that fear recedes as people give Twitter a try and see the benefits in terms of retweets and links back to the original broadcaster. Journalists themselves need to exercise their judgement. There is a blend between being yourself (Danahar is a Spurs fan and quite willing to advertise the fact) and presenting opinions about a story as facts.

I agree with this to a degree. Truth is that although there are hundreds of millions of Twitter accounts, the vast majority of citizens don’t have an account and a sizable proportion aren’t active users or are fairly low volume followers of other people. Fewer people still actually interact. To give you a sense of proportion, there are a billion tweets every three days. 250 million photos are posted to Facebook every day – a vastly larger amount of information, but also insignificant in terms of time spent than is spent actually watching events on broadcast news. How many people watch Paul Danahar on the TV than the 20,000 that follow him?

Yes, Twitter and other types of social service are interesting sources of data, but they are just one small part of the craft of being a journalist in 2012. Will they be a more important source in the future – yes – will they be the primary source of content and reach (two areas that Erica suggests are the core of monetisation of Twitter for news organisations) – not in my view.

An observation from the audience was that Twitter is an American service with American values. There are some positives to this – the “Trust and Safety” department within the organisation has lately become adept at supporting people and businesses that are receiving death threats or being impersonated. This wasn’t so true in the early days of Twitter.

The flip side is that although Twitter can intervene to take down inaccurate stories, it can’t deal with everything. Nor should it in my view – if a regime says that something on Twitter shouldn’t be viewed within its borders then why should Twitter take it down? The audience should be given some credit to decide for itself what it wants to read. If you don’t like something use your freedom of expression (on Twitter at least) to do something about it! Reputation, reputation, reputation.

Someone in the audience from Al Arabiya asked whether the Arab Spring would have happened if Twitter was censored. Well, gee, in September 2011 Twitter had 100m active users globally. How many were in the Middle East and how many tweeted? I think mobile phones calls, SMS and word of mouth were the key communication mechanisms of the Arab Spring. Twitter existed and played a role. It was not significant and it was not decisive. Twitter – for now at least – is a growing and exciting niche. I love it, but I know its limitations.

A final aside from Erica on Twitter. They don’t comment on their long term business model. Is that because there isn’t one? Couldn’t resist. #weakminded. Yes, I really just hash tagged a blog post. I feel wrong inside.

Impressions from Newschange: the role of stereotypes in African news reporting

I was lucky enough to be invited by the Associated Press to speak at the annual Newsxchange conference in Barcelona. As you’d expect for the premier gathering of the broadcast TV news industry, Newsxchange attracts some great speakers. I therefore thought I’d try and summarise some of the best sessions from the packed schedule.

First up, my thoughts on a session entitled “Africa: defying stereotypes”. As you can imagine I was really looking forward to this session; however although I found it stimulating I was a little disappointed by some of the points of view put across by the panel of African news people and journalists.

The primary contention of the session was that global news media persists in reporting Africa as a continent in strife. The compere, Yvonne Ndege from Al Jazeera said that this was not an accurate portrayal, throwing out the implausibly speculative stat that by 2100 (!) half of the world’s largest economies will be in Africa as evidence that “Africa” should be shown in a positive light.

I have a fundamental problem with this idea. First off, those in the investment and aid communities are for the most part pretty clear on where different African countries are in their development cycle. Specialist media outlets have long been focussing a portion of their efforts on the continent and I actually think coverage is reasonably good... given that in reality the only news that’s reported in any country is bad or very good news. “Life really not as bad as you think in Africa” isn’t a headline that people in Munich, Hanoi or Dallas are going to be interested in and vice versa. News is fast twitch nowadays and most international news is sound bite, rather than story.

The criticism from the panel was that talented local journals are not given sufficient airtime. Africans should also be in editorial positions internationally to ensure portrayal. The “Western World” should not indulge in tokenism. My instant thought was “which Africans” – there are over 50 countries on the continent. It’s like saying that someone from Liechtenstein should be made European editor for the Jakarta Post to ensure accurate portrayal. Over-simplified. It also made me a little irritated as there are plenty of non-African natives who have an affinity and an understanding for life and issues on the continent.

A truism about the latter is that there are still organisations – particularly NGOs and charities – that choose to portray Africa in a particular way. They provide an illusion of context, but in reality it’s a one dimensional view. A Swedish broadcaster mentioned that their positive stories about African hope and expectations had led to them being turned upon by international charities trying to rubbish that alternative perspective. A sad situation, but not surprising to me, I’m afraid. The joie de vivre of the continent is rarely portrayed internationally... but then neither are the excellent culinary options now available in London. Stereotypes persist because rebutting them is hard and not very profitable.

Three interesting segments on African stories and how they’re portrayed are worth mentioning: 
  • The Kony 2012 scandal in Uganda, where a US team launched a misguided campaign to inform the world about the rebellion in Northern Uganda... which had been going on for 20 years. The story was riddled with inaccuracies, outed by a Ugandan blogger. I thought this was a good insight into where Internet comment can be superior to traditional news in developing countries. The Internet is inherently international. TV News has a tendency to be local.
  • Electronic waste dumping and recycling in Ghana. A juxtaposition of massive multinationals based only a couple of hundred yards from people sifting through their waste. Some good images of the way in which those people live though – a vibrancy and life similar to that you see in India (in terms of happiness, culture and colour, rather than specifics)
  • A South African school that wasn’t properly connected to the communities it served, such that the kids had to swim a river to get to class! It was a well produced story, the point of which from a session point of view was that in the year after broadcast the problem had been for the most part resolved by philanthropists who’d given the kids bicycles and pressured the local government to build a proper bridge.
So there we go. Everyone has stereotypes. Global news somewhat stereotypes Africa as a continent in strife. African news stereotypes the rest of the world as a Western elite that persists in simplifying their situation. The Internet enables those who care to find perspectives that approach a truer portrayal, but few will do that because they’re interested in other things. C’est la vie, as the old folks are wont to say.

Wednesday, 14 November 2012

2013's trends #1: wearables

As the end of the year approaches, many of my clients and Deloitte clients are thinking about what 2013 holds for the markets in which they operate. Predictions is something my colleague Paul Lee and his team do really well, so I won’t replicate their thinking. Instead, over the next month I’ll write down a few trends that I think will either gather or emerge in 2013. First up, wearable computing.

What they are: Internet connected devices that are worn in place or instead of or in addition to conventional jewellery. Emerging categories include smart watches, personal health monitors, life blogging photo recorders and heads up displays.

My prediction: each of the above products will be million unit+ per year categories in 2014, which means that they should be hundred-thousand unit categories in 2013. One or more of them will hit iPad 2 levels of distribution (10’s of millions) in 2015.

Why I think this: smartphones are to mobile computing what laptops are to desktop – they’re a utility device that can do everything but few things optimally. If I want to see a route to the nearest shop, glance at a news story or see how active I’ve been, doing so on a smartphone means getting it out, loading an app and so on. Not to mention holding a big block of plastic in front of my face. That’s why tablets are successful – they do browsing and video consumption really well, but aren’t quite as portable. They're used for consuming content (of all kinds) in stationary moments.

Wearables fill in this gap by persistently doing something in the background (Taking photos, measuring heart rate, steps, location) or by providing rich information at a glance (directions, messages, location). Wearables have been around for a while, but historically have been impossible to make slick and cost effective. Now that smart devices are a billion unit category, all the ingredients of wearables – small, fast processors, interfaces, batteries, DRAM – are now super cheap and relatively easy to integrate. Furthermore, there is a global tech-buying market that are willing to experiment with new tech providing the price isn’t excessive.

Smart watches are currently the best developed category. I’ve knocked together a little chart to show how pricing of these devices has collapsed in the last 4 years.

A quick look on Google price checker shows that dozens of devices are available around $100 and some are as low as $60 making them incidental purchases for the tech-mad and the gift idea short.

Implications: the smartphone seems likely to have a shorter time in the limelight than the PC did. It, like its predecessor will be replaced less frequently and used as a general purpose communicator. Over the next decade, consumers will own more and more specialised connected devices and segment their connected lifestyles to match. Anyone wanting to create a lasting mobile experience for consumers should bear this in mind when setting out long term strategy. Over-focus on applications is a dangerous strategy in a dynamic marketplace.