Calling Dick Tracy: Will Apple Really Launch An iWatch? Very Doubtful

dicktracyFrom my Forbes.com blog The New Persuaders:

Even in a holiday week, the Apple rumors continue–and today, it’s that the company may produce a smart watch in the first half of next year.

Yes, another techie watch, the bane of the technology industry nearly since the dawn of the microchip. Here’s why I’m not betting on seeing an iWatch anytime soon:

* We all already carry a watch. It’s called a cell phone. And in case you hadn’t noticed, it can tell you the time–more reliably than you can make a call on it, in fact.

* Even Apple would have trouble making a watch with a screen look fashionable enough to wear all the time. Seriously, half the population will never wear anything like this, and I’m betting that even most of the male half would look askance.

* Anything with a screen that would fit on your wrist is too small to do the vast majority of stuff you can do on a smartphone. Don’t even think about anything resembling a keyboard, and Siri isn’t nearly there when it comes to voice commands for a wide variety of applications. The screen also would be too small to run ads on, which, come to think of it, might be a plus for Apple as a way to stick it to Google.

* Apple supposedly isn’t designing this thing. According to the report, Intel would design the watch and Apple would produce it. Sorry, no. Only in the Bizarro universe would this kind of thing happen.

All this is not to say that Apple won’t move into wearable computing at some point. …

Read the rest of the post at The New Persuaders.

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Jeff Bezos: How Amazon Web Services Is Just Like The Kindle Business

From my Forbes.com blog The New Persuaders:

Amazon Web Services, which provides computing and storage services to hundreds of businesses, began as a seemingly crazy idea in 2006, but it has since grown into a $1.5 billion business this year,  according to a new report from R.W. Baird. It’s believed to be one of Amazon.com’s fastest-growing businesses, the largest piece of an “other” revenue category that grew 68% in the third quarter, to $648 million, far outpacing overall company revenue growth of 27%.

Today, Amazon founder and CEO Jeff Bezos offered an explanation of how AWS, often seen as something that has little to do with its core retail operation, fits into Amazon’s business, and how it runs on similar principles. In fact, he says, it’s quite similar to Amazon’s Kindle business, where the company makes little money on the device but a lot more if it’s used–in that case to buy lots of books and movies.

Bezos made his comments, which were webcast early Thursday afternoon, to close the company’s first public conference on Amazon Web Services, a three-day geekfest that started Tuesday in Las Vegas. Following are his edited and sometimes paraphrased comments in conversation with Werner Vogels, Amazon’s chief technology officer, sometimes ranging well beyond AWS to entrepreneurship, rockets, and a humongous clock in the mountains of west Texas. (Unfortunately, he had nothing to say about Amazon’s surprisingly large ad business.) You can view the whole keynote here or click the video above.

Vogels: The last time you were onstage, at the Kindle Fire announcement, you said that Amazon should only win when our customers win, and that’s how the Kindle Fire business works. I’d like to think AWS also works that way, but elaborate on that.

Bezos: It’s very similar to our Kindle device business. We sell our hardware near break-even, so we make money when people USE the device, not when they BUY the device. That is very aligning with customers. It causes us to have the right behaviors.

AWS is very similar. It’s a pay-as-you-go service. We’re not incented to get people to overpay for hardware. In the long run, that will work out very well for customers, and it will work out very well for Amazon.

Vogels: You’ve always talked about flywheels, which in Amazon retail is low prices, convenience, etc. What’s the flywheel in AWS?

Bezos: I always get the question, what’s going to change in 1o years? I almost never get asked, what’s NOT going to change in the next 10 years? That’s the more important question, because you can build a business around things that are stable. One is low prices. Another is faster delivery. Vast selection.

On AWS, the big ideas are also pretty straightforward. People will want more reliability, lower prices, etc. The big ideas in business are often very obvious. But it’s hard to keep a firm grasp of the obvious.

Vogels: What are the real mechanisms of innovation?

Bezos: Innovation is a point of view. You have to select people that want to innovate, to explore. An explorer company isn’t for everybody. But for people who get up in the morning and want to change things, it’s a lot of fun.

Other things important for innovation isn’t as fun. One is you have to have a willingness to fail, to be misunderstood for long periods of time. Then, you can ramp up your rate of experimentation. Successful invention requires you to increase your rate of experimentation. AWS is one of those things that helps startups do experimentation faster. …

Read the complete post at The New Persuaders.

Uber-Entrepreneur Jack Dorsey To Startups: Don’t Just Disrupt, Start A Revolution

Image representing Jack Dorsey as depicted in ...

Image via CrunchBase

From my Forbes.com blog The New Persuaders:

Jack Dorsey is a latter-day legend among entrepreneurs, and no wonder. Not only did he help found Twitter, where he serves as executive chairman and head of product development, but he’s also founder and CEO of Square, which is trying to foment a revolution in payments by allowing people to use their mobile devices as wallets.

Revolution, in fact, not simply disruption of the existing way of doing things, was Dorsey’s main message in a keynote talk this morning at TechCrunch Disrupt, a startup tech conference in San Francisco. “We need to change the name of this conference,” he told thousands of attendees hanging on his every word. Here’s a sampling of what he had to say, mostly aimed at dashing precious beliefs of entrepreneurs:

I never wanted to be an entrepreneur. I never woke up one morning and thought I need to get a ticket to San Francisco. I actually wanted to be Bruce Lee.

Actually I wanted to be a sailor, to explore the world. I wanted to be a tailor, to build things myself that I could share with other. I wanted to be an artist, specificallly a surrealist.

Along the way, I realized life really happens at intersections. Literally for me. I was fascinated by cities.

I thought about founders–in particular the Founding Fathers of the United States. They realized they wouldn’t get everything right at the start. There would not be one founding moment but many. A lot of the ideas they had at the time were wrong (slavery, for example, or women’s suffrage).

So there’s a massive amount of energy spent on the founding moment. At Twitter, not so. Companies have multiple founding moments. I consider CEO Dick Costolo a founder. He’s really reconsidered everything and made the company better. Same at Square with its COO. Same at Starbucks with Howard Schultz, who was not a founder. Marissa Mayer, not a founder of Google or Yahoo, but with the drive and smarts to create another founding moment at Yahoo.

So a founder is not a job, it’s a role. An idea that can change the course of the company can come from anywhere.

Science fiction writer William Gibson said the future has already arrived, it’s just not evenly distributed yet. Our job is to distribute the future that is already here. We need to make sure it spreads all over the world, as quickly as possible, and with the right values.

We have the change the name of this conference. What we really want is not disruption, but revolution. It pushes people to do the right thing. It doesn’t always have to be loud or violent. It’s just as powerful in its stillness.

So the key is how we recognize disruption. We want to distribute the future more quickly. We don’t want to just disrupt things and move them around. We want purpose. …

Read the complete post at The New Persuaders.

What Does Apple’s Patent Trial Victory Over Samsung Mean To You? Nothing.

From my Forbes.com blog The New Persuaders:

Apple scored a big victory in its smartphone patent infringement case vs. Samsung late Friday afternoon as a jury awarded the victor $1.05 billion in damages. But does the closely watched verdict mean anything to consumers?

No–at least not for now. Why?

* This case no doubt will be appealed. That means little is likely to change anytime soon, at least until Apple files for injunctions against the Samsung products involved. And those are by no means all of Samsung’s products, let alone other Android smartphones.

* You won’t have to surrender your Samsung smartphones or tablets or worry that some court-induced software update will cause your device to stop working overnight. However, it’s quite possible an injunction that Apple surely will request could stop further sales of infringing devices such as the Samsung Galaxy S II in the U.S.

* Smartphone makers will find new ways to emulate (if not copy) Apple’s features. Patent infringements are often worked around by tweaks that are not very onerous for users, even if they’re a costly hassle for the infringer. So one way or another, it’s hard to imagine that nothing but the iPhone and iPad will have scroll-bounce, pinch-to-zoom, and tap-to-zoom, the features targeted in the case, or something very similar, forever into the future.

* The two companies, with Google lurking in the shadows, might go back to the bargaining table. Samsung won’t have many chips, of course. But it may still be worthwhile to Apple to find a way, perhaps by demanding a very large check or by getting Samsung to back off on other patent claims vs. Apple, to end the hostilities and avoid the costly appeal. Not least, Apple would avoid pissing off half or more of all smartphone owners who just wanted a good smartphone and got caught in the patent crossfire. …

Read the complete post at The New Persuaders.

Is The Tech IPO Deep Freeze Finally Thawing?

Courtesy 20th Century Fox

From my Forbes.com blog The New Persuaders:

Facebook’s initial public offering in May was supposed to be the bellwether for an expected pile of IPOs this year, but the subsequent dive in the social network’s shares appeared to put new offerings into a deep freeze. Now, it looks like the mini-Ice Age for IPOs is starting to thaw.

Today, two companies that were widely expected to file for an IPO before Facebook’s IPO faceplant, said they plan to go public this month. Internet security firm Palo Alto Networks aims to raise up to $175 million with an offering at $34 to $37 a share.  Kayak, which had put off an IPO expected late last year, also priced its offering, hoping to raise $87.5 million at $22 to $25 a share.

Given that Facebook’s IPO was supposed to be a sure thing–and most assuredly wasn’t–there’s certainly no guarantee that these two companies will help bring back the IPO market. Investors will be cautious about every new IPO, not only because of Facebook, but because of the poor subsequent performances of tech IPOs such as Groupon and Zynga. What’s more, the economy is simply too uncertain to bet on a momentum-driven market like IPOs.

Nonetheless, successful IPOs by Palo Alto Networks and Kayak–on top of another recent IPO success by ServiceNow in June–would inject new life into the technology investment cycle. Indeed, investors such as YCombinator’s Paul Graham have warned that Facebook’s face plant has already cooled early-stage tech investment. So any revival would be positive for the innovation and growth that comes out of that cycle. …

Read the complete post on The New Persuaders.

For Once, Google Tops Apple: Today’s Death-Defying Demo

From my Forbes.com blog The New Persuaders:

Apple is legendary for its demos at its software developer conferences, introducing products that surprise and delight the crowd and then consumers. Even with the passing of cofounder and master showman Steve Jobs last year, Apple will likely continue to set the gold standard in launching products in the most public and desire-inducing way.

Google? It’s known more for rather geeky demos, and even one or two that didn’t work very well, like the demo of Google TV two years ago.

Today, however, it outdid itself–and even more amazing, outdid Apple. Reminiscent of Jobs’ famous “one more thing” announcements, Google cofounder Sergey Brin bounded onto the stage at the Google I/O conference keynote to “interrupt” VP Vic Gundotra with a demo of Google Glass, those wearable computer glasses he has been seen wearing in the last few months.

But this wasn’t just any demo. Google had a few people in an airship wearing the glasses, and when they looked down on San Francisco, it was pretty cool in a vertiginous sort of way.

Then it became apparent that these guys (and a woman) weren’t going to stay in the airship for long. They were going to jump. Over a heavily populated city. Onto the roof of the very conference center where Brin and 5,000 engineers were gathered. …

Read the complete post at The New Persuaders.

LIVE at Google I/O Conference: New Tablets, Home Media Player, Google Glass and More

From my Forbes.com blog The New Persuaders:

Google’s annual conference for developers, Google I/O, is about to begin here on the morning of June 27, with the usual secrecy about what it will announce to thousands of engineers attending. What’s likely: a cheap tablet, a Google cloud service, and more.

Update: See much more below, but here are the big things Google introduced: the new version of Android, called Jelly Bean, completely expected; the Nexus 7 7-inch tablet, also as expected; and, in a surprise, Nexus Q, a home media device. Also, software developers will be able to pre-order Google Glass, those wearable goggle computers, which cofounder Sergey Brin demonstrated as colleagues did a skydive from an airship to the roof of the conference building.

I’ll be liveblogging the highlights here, so keep refreshing to see what will be unveiled. Remember, this is a software developers conference, so even the keynotes tend to get very nerdy; I’ll spare you the most arcane details as much as I can.

Vic Gundotra, Google’s senior vice president of engineering and longtime emcee, opens up the proceedings for this fifth annual event. “We still have some surprises left,” he promises. …

See the complete post, including an appearance by Google cofounder Sergey Brin, at The New Persuaders.

The Top 10 Tech Trends, Straight From the Top 5 Tech VCs

Cross-posted from my Forbes blog The New Persuaders:

Everyone in Silicon Valley wants to know what’s coming next, and every year for the past 13 years, a panel of the most forward-thinking minds in technology and tech finance convenes here to provide a look at what innovations are likely to emerge in the next few years.

Last night it was time again for the Top 10 Tech Trends dinner, hosted by the Churchill Club, which puts on a bunch of Valley events with top tech folks every year. I wrote about last year’s here as well.

This year, the 14th, the panel is especially venture capital-heavy, but these folks are also, to a person, heavyweights in the Valley, so their opinions carry special weight. On the panel: Kevin Efrusy, general partner at Accel PartnersBing Gordon, investment partner at Kleiner Perkins Caufield & ByersReid Hoffman, partner at Greylock and executive chairman and cofounder of LinkedIn; panel regular Steve Jurvetson, managing director of Draper Fisher Jurvetson; and Peter Thiel, president of Clarium Capital. Moderating the festivities in place of longtime emcee  Tony Perkins, Churchill Club cofounder with Forbes Publisher Rich Karlgaard, are Forbes’ Eric Savitz, San Francisco bureau chief for the magazine, and Managing Editor Bruce Upbin.

The panel portion of the dinner, which attracts several hundred people (you can watch it live here for a fee), starts at 7 p.m. Pacific at the Hyatt Regency Santa Clara. The audience gets to vote–in past years, with red and green cards as well as electronic voting devices. This year, they’ll be using a Twitter-based polling system. Panel members have similar red-green paddles they hold up. I’ll post the highlights as they happen.

And we’re underway. Eric and Bruce will describe each trend and then the owner of that trend, one of the panel members, will explain it.

1) Radical Globalization of Social Commerce: Efrusy explains that companies today will be instantly global, or they will fall behind those that aren’t. For the previous Web generation, international was a distinct minority. Groupon, for example, was half international when it went public last year. If you want to be the leading global player, just leading the U.S. might not be enough. You can’t wait to win the U.S. and then open an office.

The other panel members wave half-red, half-green panels. Gordon, who waved a red, says that’s going to take awhile. Hoffman, also red, said the U.S. is still the most important. Thiel’s in-between, I think, but because he thinks it’s not very interesting. Jurvetson says it’s true, but 12 years old. It’s what every consumer Internet startup has been doing for 12 years. Thiel on second thought thinks it’s a worthwhile rule to go international early to avoid local copycats.

The audience shows mostly greens, matched by about 70% supporting the trend on TwitPolls.

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Will Digital Stuff Always Be Worse Than Analog?

ImageWhen I tweeted today that it’s getting tougher to do phone interviews because of poor-quality cell and IP telephony calls, I touched a nerve. “Bring back the Bell System!” said one tweeter.

The fact is, cell phone quality has never been great, but a lot of people, CEOs and executives included, now seem to use them almost exclusively, so the poor quality is more noticeable–and annoying. And while enterprise-quality IP phone systems seem fine, home versions like your cable company’s or Google Voice that more people are using still don’t match landlines.

Perhaps it’s just a transitional phase, before we get the unlimited bandwidth we’ve been promised for so long. But it seems like a long transitional phase.

And it’s not just phones. CDs still don’t sound as good as vinyl, and MP3 files are even worse. Do I even need to mention Internet video? Most people probably don’t notice that the average digital camera image can’t match the best film images, but film images taken with a good camera still have better resolution (or at least the grain looks better than pixels).

Of course, digital has its advantages. No skipping records, for instance. (Well, not actually true–my car CD player doesn’t like it when I hit a bump.) No snarled tape. Digital phones and music players are much more convenient to use, and do a whole lot more than just make calls. Videos taken with most digital cameras look a lot better than anything we used to take with tape-based camcorders.

I don’t mean to sound like an old crank, even if I might be. But I wish in the rush to digitize everything, we could remember that quality matters, and make that as important as convenience.

Five Small Stories About Steve Jobs

Lots of people who were closer to Apple cofounder Steve Jobs than I have written moving memorials to a man who, in an industry and a region where people love to say they want to change the world, actually did it. The Apple II, the Macintosh, the iPod, the iPhone, the iPad–and Pixar!–none of these would have happened, certainly not in the same culture-jolting way, were it not for Jobs’ imagination and determination.

Because I was busy enough watching Intel create the electronics revolution, chronicling Scott McNealy and Sun kicking Hewlett-Packard’s butt for awhile, and witnessing Jim Clark and Marc Andreessen birth the commercial Internet, I can’t share tales of watching the genesis of the particular revolutions Jobs sparked from a front-row seat. All I’ve got are a few small, even inconsequential tales of Steve Jobs from my brushes with him over the years. But I wanted to share them anyway in the hope that they add a little more color to the life of a man who brought so much to ours.

I met Jobs face-to-face for the first time just before he was to introduce, if I’m not mistaken, the NeXTcube computer in 1990. BusinessWeek writer Kathy Rebello and I visited Jobs to see the machine at NeXT’s offices in Redwood City, Calif. He was his usual charming self–and make no mistake, despite his well-deserved (and self-described) reputation as an asshole, he was very charming. And his enthusiasm was infectious even though I had doubts about whether he could widen NeXT’s wedge between Apple and Sun into a sustainable business.

I remember two things distinctly. One was his focus on the shape and design of the jet-black machine, which I recall him touching fondly. That love of good industrial design is something he clearly never lost.

The other thing I remember is that he nervously fingered the wedding ring on his finger. When I jokingly asked him if it perhaps it wasn’t fitting so well, he launched into a story about his grandfather, who was a machinist (if I remember correctly–though seeing that his adopted father Paul was a machinist, I wonder if I heard wrong). Anyway, he said his grandfather was operating a machine with his wedding ring on, and it got caught in the machinery, removing his finger along with it. So every time he felt the ring on his finger, it gave him a twinge.

Now, this was Jobs before his canonization as the savior of Apple, so perhaps it’s just an example of a CEO trying to make nice with reporters with a personal tale. Still, the story stuck with me precisely because it was such a human, uncorporate story to bother telling.

I also saw Jobs just a couple of times doing his famous product introductions. One was the introduction of the first NeXT machine at a huge gala event in San Francisco in October 1988, if I recall correctly, because BusinessWeek writer Katie Hafner needed help reporting on a NeXT story she was working on and I was the new guy getting sent to whatever needed doing. (She thought she was getting an exclusive, though Jobs apparently promised an “exclusive” to two other publications–vintage Steve Jobs.)

In demonstrating a built-in dictionary that could call up definitions with amazing speed, he said, “Hmm, what shall we look up? How about ‘mercurial’?” That was the most common descriptor of Jobs at the time, and his joke brought down the house. Like I said, he could be the most charming guy in the room when he wanted to conjur up his famous reality distortion field.

The next time I saw Jobs onstage was just three years ago in San Francisco at his introduction of the iPhone 3G at Apple’s Worldwide Developer Conference, helping out my BusinessWeek colleagues and Apple aces Peter Burrows and Arik Hesseldahl. I hadn’t seen Jobs in person in many years, onstage or anywhere else. Of course I knew about his health issues, but as I liveblogged the event, it still struck me how frail he seemed:

Maybe it has been far too long since I’ve seen Jobs speak in person. But he seems a little laid-back, even tired?

As it turned out, this appearance kicked off another round of speculation on his health. Even without the benefit of hindsight today, it felt to me that, at the least, Jobs’ ability to carry Apple entirely on his shoulders was fading.

Update: Oh, how could I forget that photo shoot? For a special issue on Silicon Valley in 1997, BusinessWeek had somehow gathered many of the leading lights of the Valley at that time. I later wondered how on Earth we made that happen, but there’s Jobs on the left, dressed characteristically with more style than the rest put together.

I don’t remember much about Jobs’ behavior during the shoot beyond his huddling with his friend and Oracle CEO Larry Ellison at one point. And maybe that was the point: While there was no doubt he had to be in that photo, he wasn’t yet Steve Jobs, the icon, he was the guy who had just returned to Apple after it bought NeXT and faced a huge uphill battle to save it. Still, he was Steve Jobs; I remember his letting the magazine know that he was annoyed about the photo because his white shirt stuck out from under his vest.

One last story: My wife and I used to frequent a small restaurant in downtown Palo Alto called Caffe Verona. One evening around 1999, more or less, we were getting coffee, and suddenly I noticed that ahead of me was Ellison. That was interesting enough, but then I saw him take his drink out to the small patio entrance–where sat Steve Jobs and his wife.

Being a reporter, and because I think neither recognized me in the dark, I took a seat outside a few feet away, hoping to overhear any juicy details about coming products, Silicon Valley gossip–whatever. Long after my wife went back inside to get warm, I kept nursing my cappuccino and pretending to read magazines. So what did I overhear?

A half-hour of talk about the details of macrobiotic diets.

It was a mildly funny story to tell for years afterward. After Jobs’ health issues, it became less funny. But I always thought it was significant for another reason anyway. Here was one (actually, two) of technology’s leading lights, and they somehow found time to pal around talking about everything but their businesses.

Ultimately, what I remember about Steve Jobs was not the showman, the icon, the visionary. I remember a real human being who just happened to change the world.

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