Since the launch of General Motors' OnStar service in 1996, a portion of new cars has shipped with embedded cellular connections, making these vehicles part of the Connected World. Now, vehicle manufacturers are preparing to significantly increase the prevalence of these connections in their new products, and — more importantly — employ high-speed broadband in place of the narrowband modems of the past.
The connected vehicle is now emerging as a unique computing environment, distinct from the office, home, and on-the-go not just because it's in motion, but also because of its significant constraints and its composition of user- and vehicle-driven elements. Connected cars create opportunities for:
Carmakers. Beyond the core telematics offerings like emergency calling and automatic accident notifications, automotive OEMs have begun to offer connected entertainment like Pandora and information services like Google search. But they've learned the hard lessons of OnStar, and, rather than attempting to drive revenue with these services, they are using connectivity to give more reasons for customers to choose and stick with the carmaker's brand.
Mobile operators. Now that carriers' future revenue growth is being driven by customers adding devices to their plan and bumping up the associated allocation of megabytes, cars fit nicely alongside smartphones, tablets, and other data-hungry devices.
Speculation leading up to today's Facebook Android announcement painted a picture of significant disruption, including Facebook's own branded device running a customized version of Android — potentially implying a Facebook app and content store and its own distinct retail sales model. But none of that makes sense for Facebook. Facebook wants to put itself at the front of the user experience for as many of its customers as possible and to make Facebook more elemental to its customers' experience. It has made strides in that direction with its integration into iOS 6, BB10, and even Windows Phone, but it has leapt further forward today with its new Android Home application, which enables:
An all-Facebook home screen.
"Chat heads" — a Facebook wrapper around communications.
At Samsung's New York City launch event for its latest flagship smartphone, the Galaxy S 4, the company continued the "thumb in Apple's eye" approach that has characterized its marketing campaigns of the past six months. Apparently using the same time machine that every other smartphone and tablet OEM employs to transport us back to the PC market of the late 1990s, Samsung revealed to attendees (and gobs of live blog observers) the usual deluge of tech specs that — for some unfathomable reason — populate the initial paragraphs of every device review: 8 core processor, 13 megapixel camera, 5 inch AMOLED display…
BO-RING! Every Android phone and tablet maker touts these specs because CPUs, image sensors, and displays are the rapidly evolving technology waves that they ride and where most of their evolution resides. To be fair, Apple too is quick with its own spec comparisons, but because Cupertino controls the entire platform from hardware to OS to APIs to cloud and other services, they have a much greater playing field on which to innovate.
With Samsung staking out its ground as Apple's foremost competitor, the Galaxy S 4 and its launch event reveal several insights into the state of this competition today:
No, not cars that move quickly — cars that move data quickly via fast built-in connections. Today, GM announced that most of its US and Canadian 2015 model year Buick, Cadillac, Chevrolet, and GMC vehicles would come equipped with built-in LTE connections — supplied by AT&T — powering a range of OnStar safety, security, diagnostic, and infotainment services. No surprise in cars getting LTE or in GM's leadership — the next logical step in the connected car chain that started with GM's launch of OnStar in 1996. More noteworthy are:
AT&T winning GM's business. Verizon Wireless powers the existing OnStar service, and, considering how vital coverage is to OnStar's safety and security services, Verizon's superior LTE coverage (273.5 million people versus 170 million for AT&T today) would seem to make it a logical choice for GM. Apparently GM was convinced by AT&T's public commitment to cover 300 million US consumers by year end 2014 — in addition to the ability to use the same technology globally and the superior performance of AT&T's network when LTE is unavailable.
The long, much-delayed wait is over. Today RIM took the formal wraps off its new BB10 platform and the first two smartphones running the OS: the all-touch Z10 and the Q10 that will carry the much-loved RIM physical keyboard. RIM has learned at least one lesson from Apple: their launch event included details on launch dates, carrier availability, and pricing. My colleague Thomas Husson has offered a viewpoint on BB10 for product and marketing specialists here.
The good news: RIM's hardware and software rise to the level of their competition, and in some cases — such as the keyboard's prediction and multilingual support — far surpass it; the BB10 catalog of applications, while smaller by an order of magnitude than the selection available for Apple and Android devices, is large and covers a broad range of business and consumer experiences; the platform is designed for a BYOD world, providing support for work and personal identities with an easy-to-access approach (provided the enterprise chooses BES); and RIM has struck deals with a wide range of content providers to offer customers a selection of music, video, and news content.
With Apple's launch of the iPhone 5 and myriad new device announcements from Amazon, HTC, Motorola, Nokia, and Samsung, we pointed out that these devices are just one element of a broader ecosystem battle. Apple's product announcements at its San Jose, California, event this morning evince the company's continued ability to exert a superior gravitational pull on its customers and partners than its competitors. Here's why:
Customers get more choice in design and use model. Since Apple's 2010 introduction of the iPad, its competitors' tablet products have only clicked with customers in a separate category: smaller, handheld tablets directly targeted to content consumption — like Amazon's Kindle Fire and Google’s Nexus 7. The new iPad mini’s design suits this use model but is also complementary to the larger iPad line because of its portability — perfectly suited to a range of enterprise applications like field service, where a larger tablet is cumbersome. We expect that many iPad owners, both enterprise and consumer, will add an iPad mini to their portfolio, as will iPhone owners — the new shared data plans from AT&T and Verizon Wireless help simplify the decision to include LTE in their iPad mini.
A new form factor enters the ecosystem without requiring any adaptation. Because the iPad mini display features the same specs as the iPad 2, neither customers nor developers need worry about compatibility or adaptation. All the apps and sites just work. The new device slots into the app and content ecosystem seamlessly — and into the support system that CIOs have put in place for enterprise tablets.
Today Softbank — whose assets include the third largest mobile carrier in Japan — announced its intent to purchase a 70% share of Sprint in a complex financial transaction. It's a gutsy move by a company that has proven success as a market disruptor, first in fixed broadband service and more recently in mobility. Assuming the deal passes regulatory and shareholder muster, Sprint will receive a massive cash infusion that will expedite its implementation of its Network Vision update and its deployment of LTE technology across its national footprint.
But for Sprint to have any realistic chance of wresting market share from the Verizon and AT&T behemoths, it requires additional spectrum to expand its LTE capacity beyond the puny 5x5 MHz of its current plan. And there's a carrier rich in that spectrum resource: Clearwire. Sprint holds a minority interest in Clearwire, some of its customers use Clearwire's network, and it has designed support for the company's spectrum into its Network Vision, but Clearwire needs capital to complete its network and to effect the network's transition from WiMAX to LTE.
If Softbank's president Masayoshi Son is serious about enabling Sprint to disrupt the US mobile market, he needs to add control of Clearwire to his shopping list. CIOs looking to exploit Sprint as a viable alternative to the Verizon-AT&T duopoly need to see this additional step on the roadmap before making a commitment to Sprint for the long-term future.
To the surprise of no one, Apple today announced its new iPhone 5. Given that the iPhone 5 is unlikely to solve the European debt crisis or bring peace to the Middle East, it won’t be surprising if we hear a resounding "meh" from Apple's critics, with them dinging the company for a paucity of innovation. Indeed, competitors like HTC and Nokia have already offered some of the features that Apple highlighted today, such as those for imaging. But Apple still outpaces the competition when it comes to the entire package — the new iPhone unites significant improvements in industrial design, imaging, audio, and connectivity, along with the wealth of new capabilities that iOS6 enables. Apple will sell a boatload of iPhones — especially now that both Verizon Wireless and Sprint will have an iPhone (the 8 GB iPhone 4) for consumers' favorite price: free.
But make no mistake, this is not about the iPhone 5 versus the Samsung Galaxy S III or the iPad versus the Kindle Fire HD; this is about customers' attachment to the larger ecosystems that those devices inhabit. Amazon, Apple, Google, and Microsoft all aim to translate customers' investments — of money, information, personalization, and social connections — into a gravitational field of loyalty so powerful that few customers will ever attain escape velocity. This market is still taking shape, but the iPhone 5 will markedly increase Apple's pull, already the strongest out there.
The outpouring of remembrance and appreciation of Steve Jobs reflects the breadth of his influence: on technology, on industries ranging from music to retail, on consumer behavior, and on individuals — it’s nigh impossible to think of a CEO about whom consumers feel as passionately. Steve Jobs was many things — visionary, business disruptor, marketing genius — but his most indelible mark is in the products he created.
Of course, it’s overly simplistic to advise product strategists that they should emulate Steve Jobs — I might as well say “be visionary!” or “create the future!” But there are key lessons in product strategy that spell success for mere mortals:
Simpler is better. Too often, reviewers and commentators characterize Apple’s products and interfaces as “intuitive.” For an entirely new product like the iPad, there is very little intuition on which to draw — therefore it is critical to ruthlessly simplify and make it abundantly clear to the customer how a function works. One reason that people love Apple products is that they spend their time doing, not figuring out how to do. Keep it simple.
Have the courage of your convictions. Steve Jobs has many famous quotes along the lines of “we all do this today . . . and it sucks” — in every case, he believed these experiences could be better, asked himself how things should work, and took it in hand to realize that vision. Apple famously eschews market research in its product ideation and design (which is not the same as not valuing market research) because it believes in its vision for a better experience. Believe in your vision.
Google today announced its intent to purchase Motorola Mobility for $12.5 billion. While Google assures its other Android licensees that the platform will remain open and license-free, product strategists at Samsung, LG, and HTC are certain to revisit their Windows Phone hedge strategy. We see two key reasons for Google to take the risk of alienating its other hardware partners:
Intellectual property rights (IPR) protection. Google brings little to the table in the form of patents relevant to handsets and tablets, forcing Android licensees to beef up their own portfolios in the legal derring-do that, for example, has Samsung Galaxy tablets locked out of the European market by Apple lawsuits. Motorola’s rich collection of patents greatly strengthens Google’s position at the IPR table.
It’s a multidevice, multiconnection world. Consumers are no longer reliant on one dominant device like the PC for their connection to the content, commerce, communications, and comfort that the Net provides. Instead, they have multiple choices sitting in front of them at any moment and are often connected to more than one — today it’s the PC, tablet, phone, and TV, but connections are beginning to pervade the car and myriad devices in the home. Android is present in most of these devices today and aims, with GoogleTV and Android@home, to be in all of them. Excepting the PC, Motorola has products in these market segments today and is the only large original equipment manufacturer (OEM) exclusively reliant on Android for its mobile devices.