Technolog is the first in a (mostly) weekly wrap up of the highlights of the technology news and events of the week. These are the tech stories that hopefully are the most relevant to knowing what is likely to have an impact on our daily lives. Former CEO of Nokia, Stephen Elop is fired from Microsoft Microsoft CEO Satya Nadella, this week announced the departure of ex-Nokia CEO Stephen Elop and several other Microsoft executives in a reorganisation of the company that saw the creation of three groups; Windows and Devices, Cloud and Enterprise, and Applications and Services. Whilst at Nokia, Elop arguably destroyed any chances of Nokia remaining relevant in the smartphone world by insisting that all of Nokia’s smartphones move to support the Windows platform instead of Android. Nokia’s death blow came when Elop steered the sale of the smartphone business to Microsoft where Elop then presided over its inexorable journey into obsolescence and the sacking of most of the former Nokia staff. The reorganisation is a good one for Microsoft and will allow them to concentrate on their core strength, namely enterprise software. They are also having increasing success with the move of this software to the cloud. Security Password Manager provider LastPass is hacked Users of the password manager LastPass were advised this week to change their master password after hackers stole users' details including emails from LastPass servers. The hackers did not compromise users’ stored password information itself. It seems unlikely that they will be able to crack the stolen encrypted master passwords with the information they obtained because of the particular security measures LastPass uses. The hack of LastPass showed that even though almost anything can be hacked, how you handle customers afterwards can make all of the difference. LastPass’s fast response and disclosure was praised along with the extensive security measures that they had in place to protect user data in the event of this type of occurrence. Using a password manager is still seen as preferable to using the same password for every account or keeping passwords in Notepad on your computer. Finally, using two-factor authentication with the password manager would still have protected users even if their passwords were compromised and so is still seen as a must with this type of software. 600 million Samsung Phones vulnerable to being hijacked A security researcher this week demonstrated a vulnerability that exists in Samsung phones which allows hackers to send malicious code to install and run on those phones. The vulnerability is specific to Samsung phones, and comes from the way Samsung updates the SwiftKey software embedded in its keyboard on the phone. These updates are not encrypted and Samsung allows code downloaded in this way to get around the normal protections of the Android operating system. Although Samsung has issued an update for this problem, it will depend on phone carriers to actually push it out to customers, and they are typically very slow at doing that. In the meantime, there is little users can do to protect themselves, other than not connect to unprotected Wifi, and this may be a good time for them to consider switching to another brand of Android phone? E3 Game Expo 2015 E3 is the biggest electronic games expo for the games industry held each year in Los Angeles. Upcoming releases of games are announced at the expo along with new games hardware and accessories. There were simply too many announcements to summarise here, but the remake of the first-person shooter game Doom, although stunning in its detail, seemed gratuitously graphic and violent. Another anticipated release was the action role-playing open world game, Fallout 4. Set in post-nuclear apocalypse Boston, the game player can adopt a male or female role, enters a fallout shelter and after 200 years have passed, emerges to explore the world above. What will be interesting about this game is the addition of a device (Pip-Boy wrist mounted computer) that will hold a mobile phone and strap to the wrist of the player, allowing them to interact with the game through that device. Other top upcoming games include Star Wars: Battlefront, Batman: Arkham Knight, Final Fantasy XV and Assassin’s Creed Syndicate. On the console side, Microsoft announced that the Xbox One will support streaming of games to a Windows 10 PC where it will also be able to support Facebook’s Oculus Rift virtual reality headset. Microsoft’s also showed off their own augmented reality headset Hololens being used with Minecraft. The video highlights some of the amazing potential of this technology that will be available in the not too distant future. This article was originally published at The Conversation.
Melbourne-based startup Infiniti Technology has claimed the top prize in CeBIT’s 2015 Startup Pitchfest after debuting a ground-breaking smartwatch keyboard that makes typing messages on a smartwatch both fast and intuitive. Unveiled at CeBIT the new keyboard, called TouchOne, works on Android smartphones, along with both round-screen and square-screen Android Gear smartwatches. The innovative design consists of two parts: a large inner circle for gestures, and the outer circle, which is used to type letters. In the inner circle, swiping from the centre to the left is backspace, swiping up is shift, swiping down is enter and swiping to the right toggles the outer circle between letters, numbers and characters. Around the outer circle, letters are grouped alphabetically in finger-size buttons, each containing three or four letters. So, for example, the top-left has “ABC”, the top button is “DEF”, the top right button is “GHI”, the button on the right has “MNO”, and so on. In a manner somewhat akin to how letters are entered on an old Nokia featurephone, the keyboard figures out which word the user intends to type based on the letters. In case there’s any confusion, tapping an area at the bottom of the screen displays possible words. Unlike some smartphone keyboards, which attempt to shrink a full smartwatch keyboard down to the size of a smartwatch, this arrangement creates a series of reasonably-sized buttons that can be comfortably typed by a user. The watch also has a number of hidden advanced gestures, so – for example – quickly swiping in the middle to the left deletes the last letter, while a faster swipe deletes the whole word. Infiniti Technology chief executive Jingtao Hu told StartupSmart that in a short amount of time, most users end up typing faster on a 3cm smartwatch screen than they do on a smartphone. “Our record at CeBIT was one guy who managed to type at 32 words-per-minute – with 100% accuracy. After five minutes playing with the watch, he was able to reach an average typing speed, and within 15 he reached the record,” Hu says. Hu says Infiniti Technology already has two utility patents on the keyboard for the bootstrapped app. It has also achieved strong interest from developers after being posted to the popular Android developer site XDA-Developers. After launching at CeBIT, Infiniti Technology beat out the following startups to claim the top prize in the PitchFest competition: Appee Blrt CareMonkey Fewzion Prezentt Networking Break Safe Mate Service Paradigm – Gen Swipe Teazl Wattblock Click here to download TouchOne from the Google Play app store. Do you know more on this story or have a tip of your own? Raising capital or launching a startup? Let us know. Follow StartupSmart on Facebook, Twitter, and LinkedIn.
Uber will have to defend itself against a lawsuit which claims the company is discriminating against the blind by refusing to transport guide dogs. A San Jose court has ruled the plaintiffs in the case can pursue their claims because Uber is a travel service and therefore subject to the Americans with Disabilities Act. Aaron Zisser, a lawyer for a disability rights group who helped bring the case to court, told Reuters the plaintiffs were pleased with the decision. “Uber is a very popular service, and it is important for riders with service animals to be able to use it like anyone else,” he said. Guess who’s back – back again Nokia is quietly planning to return to the phone market in 2016, Re/code reports. The Finnish company – which was a household name due to its popular mobile phones during the 90s and early 2000s – is also planning to explore the virtual reality market according to insiders. Microsoft finalised a takeover of Nokia’s devices and services business in April 2014 worth more than $7 billion. Nokia is prevented from selling phones under its name until the end of this year. You can now message someone who doesn’t follow you on Twitter Twitter is now allowing users to private message people who don’t follow them. “We hope these changes help you connect more easily – and directly – on Twitter with the people, causes and businesses you care about most,” the company says. “If you do receive a Direct Message from someone you don’t want to privately converse with, you can still take steps to stop them.” The updates are rolling out worldwide from today and require users to change their settings before strangers are able to message them. Overnight The Dow Jones Industrial Average is down 279.47 points, falling 1.54% to 17,826.30. The Aussie dollar is currently trading at around 78 US cents. Do you know more on this story or have a tip of your own? Raising capital or launching a startup? Let us know. Follow StartupSmart on Facebook, Twitter, and LinkedIn.
The first impressions of Helsinki in winter evoke words like “grim” and “desolate”. Rather than shying away from the imagery of a frozen northern landscape, Slush embraces it with the slogan “welcome to the north”. While slightly foreboding, the message is one of a frontier in both location and the startup ecosystem. Where Nokia once held the world’s attention for Finnish tech companies, the country’s gaming scene has charged into focus with Rovio’s Angry Birds followed by Supercell’s Clash of Clans as almost default downloads for addictive mobile gaming. The Slush experience starts right from the beginning, at a sparse airport with a surprising amount of the non-European startup community spilling out into the freezing winds. Including more than a few Australians, who we will meet over the coming days. Day One With what can only be called spectacular growth, Slush has outgrown its previous venue and settled into the Messukeskus convention centre on the edge of town. With an almost absurd amount of attention to detail, the team have converted an enormous convention centre into a thriving and beautiful rave, complete with smoke machines, lasers, and dubstep breakdown. The venue is set up around four major stages, one dedicated entirely to the startup battle pitching 100 international and local startups against each other for a top prize of 250,000 euros. Yes, euros. This alone would be an incredible ringside event, but the day kicks off at high speed with Finland’s Prime Minister Alexander Stubb taking the Silver Stage to launch the event. In the process affirming his support for the national tech and startup community and sharing his belief that "kids need to learn coding at school”. A small comment but a big point of difference compared to the debate surrounding reports in Australia released by Education Minister Christopher Pyne, suggesting that a digital technologies curriculum was unnecessary in Australia as a point of focus for our future workforce. Cementing the contrast are furthers comments by Estonia’s young Prime Minister Taavi Roivas, taking the stage to boast that the country sets the record for most startups per capita, and that he has actively studied the success of major local startup success stories that include the Microsoft acquisition of Skype. Also on the political tip, a few words from surprise guest Chinese Vice Prime-Minister Wang Yang, who despite the pomp and ceremony of his attendance, managed to drop a locally relevant joke by way of “I’m not angry, I’m a fan of Angry Birds”. A little lost in translation perhaps, but it’s the thought that counts. Game On Elsewhere, the schedule splits the crowds into three major streams of Gaming, Leadership and Enterprise Software. On the gaming tip, Rakuten founder Hiroshi Mikitani speaks about leading the curve in converting his company to operating in English, a tactic that is now taught in business school as one of the secrets of Samsung’s success on South Korea. For Mikitani’s moves, he said the appreciation was a long time coming. “Many people really critiqued me & called me crazy,” he said. “But it now allows them to hire from all over the world, and 80% are non-Japanese and the diversity has helped us to become more innovative and is core to our growth.” Similar scaling lessons were shared by GungHo Online Entertainment founder Taizo Son and Supercell’s CEO Ilkka Paananen in a surprisingly intimate fireside chat. Taizo Son notably sharing tales of the days of his shame in being unable to make payroll for the staff of the then-fledging gaming company. The now-billionaire laughing now about advice that startup life is not unlike a video game. "You are like Super Mario,” said Son. "You are struggling in the first stage but its fun to play”. Building a successful company is a game that has come at the cost of many mistakes, with Son claiming that more than 80% of his decisions over the last 15 years have been failures. He advises that startups embrace the opportunity to fail as not only one to learn, but one to define the potential path. "In most of cases we can’t execute what we think ideally so we have to align with the failures.” Supercell CEO Ilkka Paananen on the other hand advised a theme of team dynamics and persistence as a path to luck. "Most successful people don’t know why they are successful so luck does play a role,” said Paananen. "Even if they did know, how do you know those methods are applicable to you situation?” Instead of reliance on advice he spoke of the importance of forming a hard working team with a strong dynamic, and taking the input of adviser’s with a grain of salt. "Be humble and listen to everybody, but make the decisions yourselves and trust your instincts,” Paananen said. Adding a cautionary comment on the topic of diversity, stating that he "would never invest in a group that does the same thing as I did". Back from the dead (but where is Snake?) Of the many product announcements making the most of the event’s media platform today, the most high profile was the launch of the Nokia N1 tablet. Being released in time for the Chinese New Year of February 15, Nokia is jumping back into the consumer hardware space with a competitively priced $249 tablet. The bombastic launch and focus on releasing into the Chinese market first showed a renewed enthusiasm after the Finnish company sold its handset business to Microsoft. To be clear, this is the Nokia mothership reasserting its relevance after selling off it’s most well-known product arm, and we will reserve judgement until we get our hands-on media demo on the second day of Slush tomorrow. In the meantime, the bravado is infectious. At least as far as Scandinavian culture goes, with Nokia’s head of products Sebastian Nystrom taking his time to soak up the stage. “They said RIP Nokia. I say they couldn’t be more wrong”. It wasn’t quite a Jobs-esque performance, but the local crowd were rapturous with the potential of the local heroes rising again. Mikko, don’t kill my vibe In the “mind equals blown” category of the day was the direly titled “RIP Internet”, presented by Finnish security expert (and regular conference celebrity talker) Mikko Hypponen. As a veteran of computer security, Mikko spoke of the looming dangers in the infrastructure of the internet, and the potential for it to be damaged or destroyed by either neglect or intent. “Sometimes it feels like we’ve built a monster,” Hypponen reflected. “We are running our critical infrastructure with ‘projects’”. While an advocate for open source, he points out the recent Heartbleed and Shellshock vulnerabilities of popular and in many cases essential open-source projects, and asks if there’s not a better way to ensure the development of such ubiquitous infrastructure technology. On a darker note, Hypponen walks through an example of governmental interference, showing examples of a WhatsApp message sent during the Hong Kong riots. The message claimed to be from protesters, linking to software to allow them to communicate and organise via a private network. The network allegedly run by the Chinese government as a way to access personal details and track the key organisers of the riots. Heavy. Other examples of impending doom included known cases of bot networks formed via insecure devices in the category of the Internet of Things. “Who wants to infect [web enabled] toasters? It beats me - but combined they make an effective bitcoin mining network!” Design first (or when you need a pick-me-up) For those needing a break from the security downers, a Product Design feature on the Green Stage ranged across topics of interface design, UX and hardware design. Microsoft’s hardware phone designer Peter Griffith talked about obsessive details in hardware development, while Infogram’s Ikko Jarvenpaa talked about the responsibility and ethics of startups where trends and opportunities outpace the legal framework. “Technology moves faster than laws, creating unregulated opportunities,” said Järvenpää. “But we need to be mindful of societal repercussions. With great power comes great responsibility, yes, but those of us working with highly scalable technologies wield great power” What does on sauna stays in sauna As the sessions wound down for the day the halls were cleared to transform into party mode, seeing a literal army of local volunteers spill out to convert the promo stands, stages and social spaces into one big party venue. Given it already looks like that rave I accidentally went to that time and didn’t inhale at, it’s no surprise. But what goes on startup tour, stays on startup tour. Unless you follow the tweet stream, in which case you can tune in tomorrow for more live action on the floor of Slush 2014 – including a hands-on with the Nokia N1 and an introduction to the (crazy) Australians that have made the pilgrimage from Down Under to the northern frontiers of global technology and startup culture. Follow StartupSmart on Facebook, Twitter, and LinkedIn.
Developers, designers, entrepreneurs and corporate innovators gathered at the Web Directions South Conference in Sydney last week to hear about some of the big picture issues facing the technology industry. Here are seven takeaways from the conference. 1. The network is the new electricity The world is entering a new era, where thanks to the Internet of Things, everything is on “the network”, BERG co-founder Matt Webb told the conference. It’s a technological development that has the potential to be just as impactful as electricity was in the 20th century. He says the network is not about Wi-Fi, or Bluetooth, the things that make up the Internet of Things, but it’s about relationships between people. 2. Communication is key for user research Nokia product marketing team head dreamer Younghee Jung passed on some wisdom she learned during her time conducting user research in India for Nokia. She says given it can be difficult to judge whether or not testers are telling the truth about the products they’re being exposed to, it’s important for researchers to follow their gut instinct, and put their testers in the best possible environment for honesty. For Jung, this involved ensuring her testers had tools to communicate that they were comfortable with, including chalk and blackboard and coins to help with value attribution. When confronted with extremely polite testers she manufactured a situation in which it would be socially acceptable for them to be critical of the product – a debate. 3. Be open to discovery Building on the idea that it’s difficult to know exactly how accurate user research can be, Jung says it’s important to expect the unexpected. That ensures researchers become aware of, and open to hearing about, issues they might not have even known existed. 4. It is important to understand the concept of time and how that relates to the interaction of users with products When working on products, designers should take into account both the measureable and unquantifiable aspects of time and how that influences users, Twitter senior UX designer Erin Moore says. Moore came up with a handy formula to help designers and developers negotiate this topic: In order for people to feel (blank) > We must build an experience that (blank)> some ways we could achieve that are (blank) > and in order to do that we need to (blank). 5. There’s an opportunity for startups targeting the aspects of humanity that are “in flux” Intel anthropologist Genevieve Bell says there are a number of stable and “in flux” attributes that make up what it means to be human. While many startups and technology have appealed to those stable attributes, those in flux attributes have been neglected to some extent, and that presents an opportunity for new startups. Those in flux attributes include the need manage our reputations, a desire to be surprised and on occasion bored, a desire to be different, an ability to be forgotten and a need to feel time. 6. Trust amongst team members is essential to design great products Google UX designer Jonny Mack’s had an interesting insight into team dynamics, when he was working on two projects, one with a large team that struggled with team work, and another smaller team of three where each individual went out of their way to make it work. He says while designers tend to want to jump right in and get to work, it’s necessary to first think hard about how to foster a great team. One way to go about this is by tackling four separate stages. The first stage is forming, a period where the team get to know one another and the project and make decisions about high level goals. The second stage is storming, which occurs once the team has built up enough initial trust so as everybody feels comfortable speaking their mind. This ensures everybody feels their views of been heard, and helps them feel like stakeholders in the process. The third stage is norming, where people have aired their grievances but have now committed to the direction the group has decided to take the project. The final stage is performing, where all members of the team are collaborating well and operating with less oversight from managers. 7. The concept of open internet is under threat There’s a growing movement among entrepreneurs in Silicon Valley to avoiding using the phrase the internet, according to designer and futurist Tobias Revell. He says it’s important to remember and protect the idea of the internet as a great democratic, egalitarian platform not a “series of increasingly expensive walled gardens where you’re constantly spied on”. Follow StartupSmart on Facebook, Twitter, and LinkedIn.
Appster, one of Australia’s fastest growing web and app development companies, has appointed two new strategic advisers to the business, former chief commercial officer at Virgin Australia, Liz Savage, and former CFO for PayPal, David Jaques. Founded two years ago, Appster now has offices in Australia, India and the USA. David Jaques has been instrumental in the financial success of several leading global organisations, including PayPal and BlueRun Ventures (Nokia’s venture capital fund). Currently the CFO at Greenough Consulting Group and former CFO at 500 Startups, Jaques launched his career with Barclays Bank PLC working in both London and New York until taking on the position of senior vice president at Silicon Valley Bank. During his time at PayPal, Jaques was instrumental in raising private equity finance totalling $140 million and coordinated the merger of PayPal Inc. and X.com Corporation, resulting in a $680 million valuation. Under Jaques’ management as CFO, BlueRun Ventures’ assets increased from $150 million to $1 billion in six years. Appster cofounder and managing director Mark McDonald says Jaques is an “institution” of the startup world. “He has provided financial advice to some of the world’s leading organisations and I am thrilled he has agreed to join the Appster team as an adviser,” McDonald says. Liz Savage, who joined as an adviser in May this year, has extensive experience in building and growing brands and businesses globally. Savage was fundamental in building easyJet in its first 10 years from startup to Europe’s leading airline, which now operates across more than 30 countries and last year flew over 60 million customers. Savage then joined Monarch Travel Group as managing director of its Flights & Holidays business, before being headhunted by Virgin Blue to the position of chief commercial officer in Australia, tasked with transforming the airline from low cost to premium, as well as launching and building the new brand of Virgin Australia. Savage held accountability for the group’s $4 billion global revenue and customer-facing functions including sales, marketing, pricing, loyalty, contact centres and the group’s digital and holiday businesses. McDonald says Appster’s future is looking very bright under the guidance of the two new appointments “The whole team at Appster is honoured to be working with Liz and David and we look forward to taking Appster to the next level,” McDonald says. Follow StartupSmart on Facebook, Twitter, and LinkedIn.
"Every large company is just another color of a spore in a petri dish." In the latest ‘Decoding the New Economy’ video, internet pioneer Doc Searls discusses The Respect Network, online privacy and the future of business on the web. Doc Searls is one of the internet's pioneers who helped write The Cluetrain Manifesto, which laid out many of the ideas that underpinned the philosophies driving the early days of the internet. Searls' visit to Sydney was part of the rolling worldwide launch of the Respect Network, a system designed to improve internet users' privacy through 'personal clouds' of information where people can choose to share data with companies and others. A big reset button for business In many ways The Respect Network shows how the internet has evolved since the days of the Cluetrain Manifesto, something that Searls puts in context. "We wrote the Cluetrain Manifesto in 1995," says Searls. "At that time Microsoft ruled the world, Apple was considered a failure – Steve Jobs had come along and they had the iMac but it was all yet to be proven – Google barely existed and Facebook didn't exist at all." "On the one hand we saw the internet, we being the four authors of the Cluetrain Manifesto, and this whole new thing in the world that basically hit a big reset button on 'business as usual'." "It did that. I think we're vindicated on that." New giants, new data "What we have now are new industrial giants; Apple became an industrial giant, Microsoft are fading away, Nokia was the number one smartphone company and they're all but gone." One of the key things with today's markets in Searls' view is the amount of information that businesses can collect on their customers; something that ties into the original Cluetrain idea of all markets being conversations. With the evolution of Big Data and the internet of things, Searls sees challenges for companies using old marketing methods which rely upon online tracking. Something that's a challenge for social media services and many of the existing internet giants. "The interesting thing is there's a lot more intelligence that a company can get directly from their customers from things they already own than following us around on the internet." Breaking the silos Searls also sees the current trend towards the internet being divided into little empires as a passing phase, "every company wants a unique offering but we need standards." For Searls, the key thing about the current era of the internet is we're only at the beginning of a time that empowers the individual, "the older I get, the earlier it seems." "Anyone of us can do anything," Searls says. "That's the power – I'm optimistic about everything." This article first appeared on SmartCompany.
Amazon, the e-commerce internet giant, is launching its first smartphone. Media attention is focusing on whether the phone’s features, such as its rumoured 3D interface, are really as cool as portrayed in its trailer video which aims to wow early users. But by entering into the fray of an already hyper-competitive mobile phone industry, Amazon is doing a lot more than adding another gee-whizz feature to a smartphone. This launch tells us a great deal about CEO Jeff Bezos' strategy for his company – and what it might mean for the future of competition and innovation in our increasingly digital world. First, let’s ask the obvious questions. Why is Amazon, known for internet retailing and related software development, entering a hardware market where leading incumbents like Nokia have already failed? After all, what does Amazon know about the telecoms business? Can it succeed where Google has failed? We have seen Google, which has virtually limitless financial resources, enter the mobile phone handset industry by purchasing Motorola Mobile in 2012, only to take a heavy loss after selling it on less than two years later. Even incumbent firms who had a very strong set of phone-making capabilities have taken tough hits in this turbulent market – witness Nokia’s dramatic plunge, which led to a sale of its mobile phone business to Microsoft. Platform Number 1 You cannot understand Amazon’s move without situating it in the broader context of platform competition. Platforms, these fundamental technologies such as Google search, Facebook and the Apple iPhone, are the building blocks of our digital economy. They act as a foundation on top of which thousands of innovators worldwide develop complementary products and services and facilitate transactions between increasingly larger networks of users, buyers and sellers. Platform competition is the name of the game in hi-tech industries today. The top-valued digital companies in the world (Amazon, Apple, Google, Facebook) are all aggressively pursuing platform strategies. App developers and other producers of complementary services or products provide the armies that sustain the vibrancy and competitiveness of these platforms by adding their products to them. The more users a platform has, the more these innovators will be attracted to developing for them. The more complements available, the more valuable the platform becomes to users. It is these virtuous cycles – positive feedback loops, or “network effects” – that fuel the growth of platforms and transform them into formidable engines of growth for the companies and developers associated with them. The smartphone is a crucial digital platform. Achieving platform leader status in this space is a competitive position all the hi-tech giants are fighting for. Google has its ubiquitous Android operating system, Apple has shaped the whole market with the iPhone, Microsoft has purchased Nokia’s phone business, and Facebook has invested $19 billion in WhatsApp among other acquisitions for its growing platform. In fact, I suppose I should have rephrased my question a little earlier – why hasn’t Amazon already staked its claim to lead this digital space after having launched its Kindle Fire tablet and Fire TV set-top box? Opening the door Simply put, the smartphone is the main gateway to the internet today, and, in the hand of billions of users throughout the world, is the physical embodiment of a conduit that links those users to each other and to the whole content of the internet. There are almost 7 billion mobile phones in the world (and only 1 billion bank accounts). And the trend is staggering. Mobile payment transaction value surpassed $235 billion worldwide in 2013, and is growing at 40% a year, with the share of mobile transactions already reaching 20% of all worldwide transactions. So, while risky, Amazon’s entry into the smartphone business is a classic play: a platform leader entering an adjacent platform market that is also complementary to its primary business. All platform leaders aim to stimulate complementary innovation (think how video game console makers aim to stimulate the provision of videogames), and they often attempt not to compete too much with their complementors in order to preserve innovation incentives. But at some point all platform leaders start to enter these complementary markets themselves. Google has done it through Android, Apple has done it with iTunes, Facebook has done it with Facebook Home. It happens when platform leaders feel threatened by competition in their core market, or when they want to steer demand, competition and innovation in a particular direction. The idea is to use their own user base as well as their own content and technologies to create an unassailable bundle, one that is difficult for external competitors to break into. Think of it as creating barriers to entry, while expanding the core market. The reasoning behind entering a complementary market is well known, and related to the benefits of bundling. In the case of hi-tech platforms, the benefits are even stronger. By optimising and controlling the interface between a platform and complements, a company can have a structuring impact on the evolution of the platform ecosystem – and that means on all the innovators around the world that invest and make efforts to develop complementary products and services. In your hands So, these are the reasons why Amazon is entering the mobile phone market, despite the difficulties inherent in taking on an über-competitive market. This strategic choice makes a lot of sense. As to whether Amazon has a fighting chance of succeeding, there are reasons to be optimistic. Beyond its deep financial resources, Amazon has learned something of what it takes in the development and successful commercialisation of various versions of the Kindle. That has given it expertise in hardware, on top of its software background, and should prove a useful training ground to allow it to launch other consumer products such as the smartphone. But the ultimate judge will be you, gentle readers. Will you be willing to swap your favourite mobile phone for a yet another new kid on the block, even if it does let you browse Amazon’s ever-growing catalogue in splendid 3D? Annabelle Gawer is Associate Professor in Strategy and Innovation at Imperial College Business School. This story was originally published at The Conversation. Read the
The internet ain’t what it was in 2004 and on the tenth anniversary of Web Directions, the conference organisers are taking the time to remember just how far it’s come. “When we started Web Directions, we were just looking at ‘the web’, but now it’s the foundation for almost everything,” says Web Directions co-founder John Allsopp. “It’s powering major financial institutions.” The conference has two tracks, engineering and product, and its status as one of Australia’s premiere web events is highlighted by some of the big local and international names Allsopp and fellow Web Directions founder Maxine Sherrin have managed to attract. Genevieve Bell, Intel Fellow and vice president of Intel Labs, as well as director of User Experience Research at Intel Corporation, is delivering a keynote. Bell leads a team of social scientists, interaction designers, human factors engineers and computer scientists focused on people's needs and desires to help shape new Intel products and technologies. On the product side, Douglas Bowman, who just recently left Twittier as its creative director, is one of the big names they’ve managed to attract. Also on the product line-up is Scott Thomas, who famously worked on the Obama campaign, but also for the likes of Fast Company, Apple, IBM, HP, Nike, Patagonia, Levis, the Alliance for Climate Protection, and Craigslist. Younghee Jung from Nokia’s corporate research team, focusing on enablers of social development through mobile technology, will also be speaking at the conference. On the engineering side, Bill Scott, senior director of business engineering at PayPal, will be speaking, along with Railsbridge founder Sarah Mei and Jake Archibald who works in Google Chrome's developer relations team. Allsopp says he feels the calibre of speakers makes it the best line-up they’ve had and competitive on an international level. “These are world class speakers by anyone’s standard,” he says. This year also means a change of venue, moving from the Convention Centre to the Seymour Centre. “It’s got a good vibe and it’s both edgy and accessible, which makes sense for us,” Allsopp says. Allsopp says they’ve always advocated the benefit for teams and individuals to get out of the office and become rejuvenated by immersing yourself in the amazing work so many in the industry are doing. “We want to create that feeling when you can’t wait to get back to work because you’re just pumped with ideas,” he says. “For a lot of people who come from all over Australia, it’s the one chance in a year to catch up with people in the industry.” The full program can be found here.
Nokia has confirmed that it has acquired Brisbane-based company Mesaplexx in order to boost its radio capabilities in the networks business. Mesaplexx were recent recipients of the now defunct Commercialisation Australia grant. In a statement on its company blog, Nokia says: “Mesaplexx has unique know-how in developing compact, high performance radio frequency (RF) filter technology for the mobile industry. “Nokia is continually improving its radio systems whilst making them smaller, lighter and more efficient. The Nokia Flexi family of radio access base stations offers cutting-edge solutions that balance energy efficiency, power output and form factor. Adding the very advanced Mesaplexx technology can enhance them further, potentially reducing small cells form factor by 30% or more. “Every base station needs RF filters, for example to ensure that spectrum can be shared within the same geographical area and that the same antenna can serve for both transmit and receive purposes. The Mesaplexx expertise could help improve radio performance, leading to higher capacity and more efficient networks. This technology would also help reduce overall cost and power consumption and keep radio signal loss to a minimum.” “Those familiar with radio technologies know that while there has been a lot of progress in recent years, filters are one area where new innovations can still yield significant improvements in performance,” said Marc Rouanne, executive vice president, Mobile Broadband at Nokia. “This company’s stand-out expertise has the potential to achieve that.”
Time-lapse photography app Project Tripod has announced it has cracked the 30,000 download mark since going live on April 23, with founder Catherine Eibner looking to the construction industry to build the user base further. The Windows Phone app allows users to create time-lapse animations and other effects by taking a photo of a landmark (for example a bridge or a building), returning to the same location later, then taking a second shot that is perfectly digitally aligned to the first. The photos are stored through a cloud-based API which allows a number of users to contribute digitally aligned photos of the same landmark. The app has won a number of prizes, including €50,000 ($69,500) in seed funding from Nokia and Microsoft’s joint investment program, AppCampus, in June of last year, and the NSW Innovation MVP Grant. Eibner told StartupSmart the app takes time-lapse effects out of the hands of “high end videographers, documentary makers and scientific organisations” and places it in the hands of ordinary smartphone owners. “The Project Tripod team have spent a large portion of the last year building a Windows Phone exclusive app and enterprise scale cloud powered API that allows people to use their mobile device to make and contribute to long-term time lapses,” Eibner says. “Photos are taken on a smart phone with the app installed. What’s cool is that these can be taken one person, or 100 people, who may or may not know each other over a period of minutes or over 10 or more years. The images then get aligned by the cloud API. This is where the magic happens and where they become a perfectly aligned sequence of images. “Once you have the sequential images, the generation of outputs is now possible, such as traditional time lapse animations, multiple image blends that are only possible when images are perfectly aligned.” Developing a consumer app has allowed Project Tripod to also develop a scaleable, enterprise-ready back-end system that has already attracted the interest of an international infrastructure construction giant. “Construction firms require a quick and cost effective way to professionally and accurately record the historical progress of the projects they have underway globally,” Eibner says. “Project Tripod is garnering interest from global companies in this space because they are able to utilise their existing work force to gather the required imagery rather than go to the expense of locating and negotiating access for major camera infrastructure. “It is also of interest because we are able to make available the time lapse imagery of the constructions progress to stakeholders such as clients and senior management located around the world.” Image credit: Flickr/twicepix.
James Packer’s Crown Resorts is set to make a bid for a $US2 billion casino on the Las Vegas Strip. The investment marks a return to Vegas for the gaming tycoon, who was burnt by two Las Vegas Casino investments made on the eve of the global financial crisis. Packer is believed to be interested in investing in The Cosmopolitan, which was taken over by Deutsche Bank in 2008 after gaming tycoon Ian Bruce Eichner defaulted on a loan, and is located next to MGM Resorts International's Bellagio. Nokia deal with Microsoft to close this week Smartphone maker Nokia has told investors it expects the $US7.2 billion sale of its devices and services business to Microsoft to be finalised this week. The company says it has now cleared all major regulatory hurdles required for the deal to go ahead. The deal will see Nokia sell its mobile phone division to Microsoft, including its Lumia smartphone line, with the Finnish company retaining its network equipment manufacturing business. US fibre optic rollout continues One of the largest telecommunications carriers in the US has announced plans to deploy fibre to the node (FTTN) or fibre to the premises (FTTP) services across 21 US cities, including Chicago, Los Angeles, Miami and Atlanta. The AT&T U-verse deployment comes as Google continues its fibre optic network rollout in selected US cities. The company claims it already has 10.7 million internet and pay television subscribers using its fibre optic services. Overnight The Dow Jones Industrial Average closed up to 16449.2. The Aussie dollar is at US93.27 cents.
Microsoft chief executive Satya Nadella has announced the first major management shakeup of his leadership. Under the reshuffle, Nadella has appointed Scott Guthrie to his former role as head of cloud and enterprise group, former Nokia boss Stephen Elop is now head of devices, while Phil Spencer oversees Xbox. “As I said on my first day, we need to do everything possible to thrive in a mobile-first, cloud-first world,” Nadella says. “The announcements last week, our news this week, the Nokia acquisition closing soon, and the leaders and teams we are putting in place are all great first steps in making this happen.” CBA calls for greater regulation of finance tech companies Commonwealth Bank has called for the financial regulations applying to banks to be extended to “shadow banks” and new finance tech companies in a response to the Financial System Inquiry led by David Murray. It argues that if non-bank entities conduct the same activities as banks, they should be regulated in a similar fashion. In its submission, the bank also calls on the federal government to take a greater role in lending to startups, which it says find it tough to win bank financing. Private sector credit grows Total credit to the final sector grew by 0.4% in February, putting the annual rate of growth at 4.3%, according to new figures from the Reserve Bank. The figures show business loans grew by 0.4%, up from 0.2% in January, which was less than the 0.5% rise in February for housing credit, although personal lending declined 0.2%. “An improvement in business confidence and conditions is evident in rising business credit growth. However, shaky consumer confidence is weighing on personal credit growth,” Commonwealth Bank economist Diana Mousina said. Overnight The Dow Jones Industrial Average is up 16457.7. The Aussie dollar is up to US92.72 cents.
This week in Barcelona, the GSMA – the peak global standards body for the mobile phone industry – is hosting its annual industry trade event, the Mobile World Congress. The MWC is arguably the largest annual event in the telecommunications industry. It brings together carriers with mobile phone makers, equipment makers and app developers. It’s where handset manufacturers make the big pitch to mobile carriers for the year ahead. A strong presentation can bring your products to the attention of mobile carriers the world over. Perhaps more than the Consumer Electronics Show in January, the MWC is the big event where mobile phone makers unveil their new smartphones and other products for the year ahead. This year’s event certainly hasn’t underwhelmed, with major announcements from some of the industry’s biggest players. It’s time to take a look at eight of the biggest announcements from this year’s show: 1. Samsung Galaxy S5 Samsung is now easily the biggest handset maker in the industry. According to IDC, for the full year of 2013, it shipped a massive 313.9 million smartphones worldwide – that’s three out of every 10 smartphones shipped anywhere in the world. Forget about Apple versus Samsung, it’s not even a race anymore at this point. Apple shipped 153.4 million units in 2013, meaning that for every handset Apple shipped, Samsung shipped more than two. In fact, with the exception of the US and Japan, Apple is not even really competitive with Samsung anymore. That race was lost two years ago. In addition to manufacturing smartphones, it also supplies itself with almost every component, from batteries and processors to cameras, memory chips and displays. It is both the world’s second biggest chip builder, and the world’s second biggest ship builder. So when Samsung unveils its main, flagship smartphone for the year, you better believe that everyone in the industry – from carriers to competitors – is watching very closely. This year’s flagship, the Galaxy S5, was largely an incremental improvement on its predecessor, with the South Korean tech giant confirming speculation the new device is both dust-proof and waterproof. Needless to say, both Telstra and Optus have already announced they’re carrying the new smartphone. Aside from the Galaxy S5, Samsung shocked the industry when it snubbed Google for the latest version of its Galaxy Gear smartwatches. Instead of Android, the new devices will be powered by its own operating system, known as Tizen. 2. Microsoft’s Nokia X smartphones – powered by Android For nearly two decades, Microsoft’s Windows operating system had battled an open source rival, known as Linux. While Linux has struggled to make inroads in the desktop PC market, it has emerged as the dominant operating system for servers. Linux also forms the basis of Google Android, which competes head-to-head with Microsoft Windows Phone. Meanwhile, in September last year, Microsoft bought the mobile assets of Nokia, along with a licence to use its patents, for $US7.2 billion. In light of this, there was some scepticism when rumours first surfaced that Nokia was gearing up to release a series of smartphones powered by Android. At MWC, Nokia confirmed the rumours by unveiling a new smartphone product line powered by Android called the Nokia X series. The new devices will come with Microsoft’s cloud-based apps and services pre-installed and won’t come with the Google Play app store. Nonetheless, when Microsoft takes control of Nokia in April, it will be selling a consumer product based on Linux. Who would have thought it? 3. Facebook buys WhatsApp for $US16 billion A week before the MWC, Facebook announced it is taking over mobile messaging service WhatsApp for an incredible sum – $US16 billion. With both WhatsApp co-founder and chief executive Jan Koum and Facebook founder and chief executive Mark Zuckerberg delivering keynote speeches at MWC, the tech world was certainly going to pay attention. During the keynote, Koum did not disappoint, announcing WhatsApp was launching free voice calls through its app during the second quarter, once the takeover by Facebook has been completed. No doubt some of the mobile carriers were a little edgy about the prospect of Facebook launching an all-out assault on their lucrative voice call and text message businesses. 4. Mozilla unveils a $25 smartphone This year’s Mobile World Congress marked the one year anniversary of the debut of Mozilla’s smartphone platform, Firefox OS. For those unfamiliar with the platform, Mozilla is best known for its Firefox web browser. Last year, it announced it was creating a mobile operating system based on Firefox that would compete head-to-head with Google Android, Apple iOS, Windows Phone 8 and BlackBerry 10. In Firefox OS, all apps basically work like interactive websites and are coded in web standards, including HTML5 and CSS. Since this is less demanding than running a “full” operating system with apps, the theory went that Firefox OS would perform well on low-end devices aimed for emerging markets. In practice, some of the first Firefox OS smartphones, including the ZTE Open, have left a lot to be desired. As I explained in Control Shift last week, Mozilla’s expansion drive has left it in a precarious position in the marketplace: As if the situation weren’t already urgent enough already, Mozilla’s lucrative deal with Google expires in November of this year. In a sense, it’s fitting that [Mozilla founder Mitchell] Baker has taken up trapeze as a hobby, because Mozilla’s in the middle of a high-wire act. It might be that, over the coming months, one of Mozilla’s growing number of Firefox OS-driven side-projects gains traction in the market place. However, it could also backfire spectacularly, endangering its main source of revenue in the process. Aside from the seven new smartphones on display, Mozilla also announced that a smartphone costing just $25 would hit the market this year. Given that, up until the fourth quarter of last year, more than half of all mobile phones sold worldwide were still featurephones, mostly in emerging markets, the $25 phone might just be the big hit Mozilla’s looking for. Story continues on page 2. Please click below. 5. Major updates for BlackBerry enterprise customers BlackBerry chief executive John Chen’s bid to turn around the fortunes of the smartphone pioneer were filled out in a series of major product announcements at MWC. Up until now, enterprises using BlackBerry Secure Work Spaces on BYOD (bring your own device) smartphones needed to use different versions of BlackBerry Enterprise Service (BES) depending on whether staff used newer BlackBerry 10/Android/iOS devices, or older BlackBerrys. That has been cleared away with the release of BES 12, in the process clearing away many headaches for IT administrators. As an added bonus, it supports Windows Phone devices too. The company also unveiled a new flagship phone with a full keyboard called the Q20 and an enterprise version of its BlackBerry Messenger service called eBBM Suite. 6. At least Sony’s new products are water-tight Earlier this month, Sony announced it is selling its VAIO PC business to investment firm Japan Industrial Partners, spinning off its Bravia TV business into a separate subsidiary and slashing its global headcount by 5000 as part of a major restructure. At the time, the Japanese tech giant announced it’s setting its sights on the smartphone, tablet and wearables markets for its future growth. Suffice to say, the company is hoping it delivered a hit with the products it unveiled at MWC. The company unveiled a new flagship smartphone called the Xperia Z2, a 4G Android 4.4 KitKat smartphone powered by a 2.3 GHz quad-core Qualcomm processor. The company is proclaiming its 20.7-megapixel camera capable is the most ever used in a waterproof smartphone. Which I’m sure is fantastic news for scuba-diving photographers. The company also unveiled a 10.1-inch tablet called, imaginatively enough, the Z2 Tablet. The tablet is being marketed as the lightest ever used in a waterproof tablet. Finally, the company unveiled a smart wristband called the SmartBand. 7. Opportunity knocks for LG? The highlight for LG was an update of the KnockON security system called “Knock Code”, which uses a series of knocks rather than a password to secure a device. The new feature will appear on the LG G Pro 2 phablet, a new six-inch phablet set to go head-to-head with Samsung’s popular Galaxy Note devices. The company also unveiled its “L Series 3” range of low- to mid-range smartphones at the show. That said, most of LG’s big announcements came at the 2014 Consumer Electronics Show in Las Vegas in January, including its LG Lifeband Touch activity tracking bracelet, LG Heart Rate headphones, and webOS-powered smart TVs. 8. Tickets please! With the rapid growth of mobile ticketing, it’s no surprise the world’s largest telecommunications show would embrace NFC tickets. Telstra was one of a range of carriers to trial NFC badge technology for tickets to this year’s event. The badges use information stored by a mobile carrier, including name and telephone number, to help verify an attendee’s identity. The validation process also includes a photo ID check. This year’s show also features an NFC Experience demonstrating NFC-based mobile commerce systems for payment, retail, transport, mobile identity and ticketing/access. In addition, there are 61 NFC-enabled Tap-n-Go Points providing event news, schedules, documents, presentations, videos and other information. According to figures published by ABI research, in the next five years, 34 billion tickets to be sent to mobile devices,. In terms of technology used to authenticate tickets, the figures show 48% will rely on QR codes, near-field communications (NFC) will be used on 30%, while SMS or other technologies will be used on 22%. If the forecast is accurate, it suggests using our smartphones to touch on for events, public transport or entry into secure areas could soon be a part of everyday life.
Ollo Mobile, a tech start-up aiming to help seniors, has taken out top honours at this year’s West Tech Fest OzApp Awards. The Brisbane-based start-up receives a $100,000 convertible note with Qualcomm Ventures. Their product is a wearable panic button that triggers call-outs to family members and support networks. The five finalists were assessed by a judging panel including Qualcomm Ventures director Patrick Eggen and Silicon Valley-based start-up investor Bill Tai who has backed Australian start-ups including Shoes of Prey and Canva. Co-founder Ken Macken told StartupSmart getting the backing of Qualcomm and Bill Tai will increase their chances as they raise funds in the United States. They’ve this week announced an American business entity, Ollo Wearables, to simplify this process. “This is a big Australian award with international judges. This is really going to help bring things together and build the credibility of our business,” Macken says. The team of six are rolling out the fourth iteration of the hardware component and the second iteration of the support software. The $100,000 prize will go to speeding up the development of the product and growing the team. Macken says they’ve lined up 12 people they’ll be hiring in the next three months. Other OzApp Award winners include fashion networking app Infinite Wardrobe, announced as the runner-up, and time lapse photography app Project Tripod, which won the pre-revenue award. Project Tripod co-founder Catherine Eibner told StartupSmart they were lodging their developed app with investor Nokia later this week and should have it in the market shortly. Getting out and pitching the app has helped them realise the scope of the app they were creating. “The most interesting thing with Project Tripod is every time we mention it people have another idea of how to use it so it’s turning out to be bigger than Ben-Hur,” Eibner says. “It could work for anything that can be tracked and measured visually, from nature photography to construction.” Once the app is launched, the team will be focused on developing their APIs so it can be used widely.
Are you thinking about developing an Android or iPhone app? Perhaps you have already established a business and remain a mobile sceptic? Or maybe you are looking for a good business idea? If so, it’s time to take some inspiration from one of the world’s pre-eminent experts on mobile, Tomi Ahonen. Who’s this Tomi Ahonen character, you ask? He was a senior executive at Nokia back in the ‘90s, the good ‘ole days when the Finnish mobile phone giant dominated the planet. Since leaving the company, Ahonen has become an outspoken critic of the now-former Nokia chief executive, Stephen Elop, and the company’s recent Windows Phone 8-powered smartphones. If you carried a Nokia 3210 in your pocket back in the late ‘90s, it was partly due to forward thinking Finnish engineers and executives like Ahonen. Amongst many other achievements, he oversaw Nokia’s 3G Research Centre and wrote the first industry white paper on bringing internet services to mobile. Back in the golden age known as the late ‘90s, Ahonen foresaw that online services on mobile would be used in a fundamentally different manner to how it is on a desktop computer. It’s a theme he discusses in greater depth in his book The Seventh Mass Media, which argues mobile is the seventh and most recent of a series of fundamentally different media forms, following print, recordings, cinema, radio, television and the internet. See, these days, Sonny Jim Crockett, it’s common sense to assume that your desktop website will work differently to a well-designed mobile site. Not so, back in the ancient days of the internet. Heck, right up until recently, Microsoft’s Steve Ballmer was still insisting mobile devices were just PCs in a different form! But that’s another story! Anyway, during the video, Ahonen lists nine unique benefits of mobile. They are: 1. It’s the first personal media form. 2. It’s (almost) permanently connected. 3. It’s always carried. 4. It has a built-in billing system. 6. It has the most accurate audience info of any media. 7. It captures the social context of consumption. 8. It enables the eight mass media: Augmented reality. 9. It’s a digital interface to the real world. What implications do these nine unique benefits have if you own or are about to start a business? How should you optimise your business for mobile communications? And why does mobile matter for business in the first place? All is revealed in this video. Your task for today is simple. Watch it: Get it done – today!
It’s seven years today since the launch of Apple’s first iPhone and since then it’s brought about new sectors of business, increased connectivity around the globe and forced its competitors to innovate. On this day seven years ago (January 9 in the United States), Steve Jobs introduced the first iPhone in a keynote address at the Macworld Conference and Expo in San Francisco. It wasn’t the first smartphone, it didn’t have the best hardware, but its software and usability quickly made it the dominant phone on the market and Apple challenged the positions of other phone manufacturers and telecommunications companies. With the introduction of the iPhone, opportunities for businesses emerged which had never before been realised. Social media became pervasive, app businesses emerged and new payment technologies were developed. When the iPhone launched on the market in November 2007, thousands of people queued around the world to secure their first iPhone. Many of these people are still devout Apple users today. Telsyte managing director Foad Fadaghi told SmartCompany in the past seven years consumers have adopted smartphone technology at a rapid rate. “This has created both opportunities and challenges for businesses. On the app side of smartphones, it’s provided a new platform for businesses to sell and interact with customers which is more engaged and it’s also facilitated micro-transactions,” he says. “But it’s also created additional requirements for businesses to have mobile websites and to actually develop these apps.” Technology expert Paul Wallbank told SmartCompany the iPhone also challenged the business models of telecommunications companies. “The iPhone broke down the telco model of trying to lock us into their proprietary applications… Apple went behind the backs of the telcos and they’ve never really forgiven it for it,” he says. “The iPhone has been a huge thing for business. Apple created an app store and showed businesses they can help drive sales and productivity. It’s helped businesses both as technology consumers and by allowing them to create their own apps to capture further business opportunities.” Thanks to the rise of the smartphone, driven largely by the success of the iPhone, businesses such as Appster, Smart50 winner Outware Mobile and AppsPro have come to exist. Businesses have also been forced to up their customer engagement via social media, new banking methods have been developed to allow people to transfer money and monitor their accounts on the go, and increasingly businesses are developing payment technologies which allow people to pay for things like their morning coffee while in transit. But Wallbank says the best innovation has been the most simple – making business mobile. “It’s liberated people from the office and automated a lot of field workers systems. At the time the iPhone was released I was running an IT support business and I was struggling to find something which would let my field technicians do their paperwork on the road,” he says. “Smartphones have changed the way many industries can work with their mobile workers. Before the iPhone, the mobile revolution was stunted by the telcos and companies like Blackberry and Nokia, but Apple opened up the platform.” Both Fadaghi and Wallbank agree in the next five years smartphones will become integrated with other smart devices. “What we’ll see is an extension of the smartphone to a number of connected devices and smart accessories. Their functionality will be extended through wearable devices, docking solutions and software which lets it integrate with other devices,” Fadaghi says. “When it reaches maximum penetration innovation will be around its integration with other devices… There is a pent up demand for Google Glass and these kinds of products at certain price points.” Fadaghi says the success of wearable devices will depend on their price. “Longer term, one thing which will occur is the computing part of the technology will get smaller and smaller. You’ll have the full functionality of a smartphone in wearable devices, SD card-sized computers and smart computing units will be applied in different ways like wearables and sensor type devices.” Wallbank says the current International Consumer Electronics Show in Las Vegas has shown there will be more integration between smartphones and in-car navigation and entertainment systems, fitness equipment and medical devices. “Smartphones and tablets are becoming the centre of our digital lives. They’ll be the remote control for everything from home security systems to fitness watches,” he says. “The trend prior to smartphones was phones getting smaller. I think the form factor of the phones will evolve as we use them. It could go back to tiny phones if we use them to engage with things like Google Glass and smart TVs predominantly.” Wallbank says just as the motorcar changed the twentieth century, “the smartphone will change the twenty-first”.
The tech sector has always been hyper-competitive, and never has this been truer than in 2013. For the likes of Twitter, Samsung and Google, the harvest of 2013 was bountiful. However, from the perspective of Nokia, Microsoft, BlackBerry or the PC industry, it was a year to forget. Here’s a look back at 10 of the big events and trends that shaped the tech sector in 2013. 1. One billion smartphones sold this year – and counting The most important tech story of 2013 didn’t take place with a major product announcement or a Steve Jobs-style keynote speech. Instead, it took place without fanfare at an ordinary mobile phone retailer somewhere deep in suburbia. It was there that a consumer decided to purchase the one billionth smartphone to be sold during 2013. To put that number in perspective, it is projected that 227.3 million tablets shipped worldwide during 2013, 158 million television sets, 180.9 million portable PCs and 134.4 million desktop PCs. Meanwhile, figures from market analysts IDC show smartphones also outsold featurephones worldwide for the first time in history during the first quarter of 2013. What this means is that while smartphones now account for more than half of the 418.6 million mobile phones shipped worldwide each quarter, there are still millions of old-fashioned featurephones being sold each year. Especially in the low-end of the market and in emerging economies, that means there’s plenty of extra room for growth in the future – especially at the low-end of the market. Make no mistake about it. The smartphone industry is big – far bigger than the PC or TV business. And it’s only going to get bigger in 2014. 2. Google Android and Samsung: The juggernaut rolls on The biggest winners from the spectacular, ongoing growth of the smartphone market have been Samsung and Google. Last year, smartphones running Google Android outsold Apple. In 2013, that trend morphed into total industry domination. For example, of the 261.1 million smartphones shipped worldwide during the third quarter of 2013, 211.6 million or over 80% ran Google’s Android operating system. That compares to just 33.8 million iPhones, representing around 12.9% of the market, and a measly 3.6% for Windows Phone. Samsung managed to ship 72.4 million smartphones during the second quarter of 2013 alone, representing around 30.4% of the market – more than double Apple’s sales during the same period. Those device sales also mean increased component orders flowing through the various divisions of the South Korean tech conglomerate, which manufactures everything from semiconductors to batteries and smartphone displays. The growing strength of the South Korean electronics behemoth is demonstrated by its advertising and marketing budget, which has been estimated at around $US14 billion worldwide. To put that figure into perspective, as of 2011, North Korea’s entire national economy was estimated to stand at $US12.385 billion. 3. The PC industry bloodbath While Google and Samsung have had a stellar year in 2013, the same certainly can’t be said for the PC industry. The September quarter was the sixth consecutive quarter of falls, according to Gartner, with shipments falling to 80.2 million units for the quarter from 87.8 million a year earlier. Figures released by IDC forecast PC shipments for the full year to fall 9.7% in 2013. More alarmingly, it appears the emerging middle class in China, India and Brazil aren’t keen on buying computers, with total PC shipments in emerging markets expected to drop from 205.2 million to 185 million this year. Australia and New Zealand led the trend, with a massive 21% year-on-year fall in shipments for first quarter in Australia, along with a more astounding 27% fall in New Zealand. The implosion of the PC market was disastrous for a number of PC makers, including Dell, HP and Acer. In August, HP announced a major shake-up of its senior management team after announcing a large 15% year-on-year drop in net earnings and a 22% drop in revenue from consumer devices during its quarterly results. That same month, Dell reported a massive 72% year-on-year collapse in quarterly earnings, while a consortium including founder Michael Dell, Silver Lake Capital and Microsoft successfully fought off high-profile investor Carl Icahn’s bid for control of the company. And at Acer, founder Stan Shih made a surprise return as interim chairman and president, following the resignation of former chief executive JT Wang and president Jim Wong after the company recorded a record third-quarter loss. The resignations came after Acer announced its consolidated revenues for the third-quarter of 2013 fell 11.8% year-on-year to $US3.11 billion, resulting in an operating loss of $US86.6 million. 4. Surface falls flat On top of falling PC sales and 3.6% Windows Phone market share, the news was dire for Microsoft on another front in 2013. Late last year, Microsoft launched its Surface series of tablets as a first step towards making devices, with the company believed to have manufactured around six million units. The release of the Surface instantly made Microsoft a direct competitor to many of its already struggling PC partners, straining relations in the process. Fast forward to July of this year when Microsoft announced a massive $US900 million writedown on its inventory of unsold tablets. The writedown came less than a week after Microsoft announced a large price cut of $US150 for the struggling product line. Adding insult to injury, Microsoft also revealed it has spent $US898 million advertising the tablets, while only generating $US853 million in sales. According to many leading analysts, the company was believed to have sold just 1.7 million of the six million tablets it had built. To put those numbers in perspective, Apple sells around 14.6 million iPads each quarter, while Samsung sells around 8.8 million. 5. Steve Ballmer resigns During the 1990s, Microsoft was undeniably the 800-pound gorilla of the tech industry. Then, in January 2000, founder Bill Gates stood aside as chief executive, in favour of Steve Ballmer, in order to focus on his philanthropic efforts. Since then, the company has lost much of its former dynamism, and has failed to become the dominant player in a range of new technologies that have emerged since then, including search, tablets, smartphones or social media. In August last year, Vanity Fair magazine journalist Kurt Eichenwald ran a feature exploring why Microsoft fell behind its rivals. A management technique called stack ranking was almost universally blamed. “If you were on a team of 10 people, you walked in the first day knowing that, no matter how good everyone was, two people were going to get a great review, seven were going to get mediocre reviews, and one was going to get a terrible review,” a former software developer told Eichenwald. “It leads to employees focusing on competing with each other rather than competing with other companies.” Add the low market share for Windows Phone, poor sales of the Surface and the PC industry bloodbath, and it became clear something had to give at Microsoft. In July, the company announced a major management restructure, with the company’s strategy shifting to focus on “devices and services”. Then, just one month later, Ballmer resigned as chief executive, with stack ranking dumped as a management technique soon after. The Redmond, Washington-based tech giant is currently searching for his replacement. Story continues on page 2. Please click below. 6. Nokia sold for a song Soon after Ballmer’s resignation, the news was overshadowed by an even bigger story. In September, Microsoft announced it was buying Nokia’s smartphone and devices businesses for $US7.2 billion, with the Finnish telecommunications company retaining its Nokia-Siemens services network equipment business and the Nokia brand name. The deal came after Nokia announced its smartphone sales had slumped 27% year-on-year during the second quarter of 2013, with an overall loss of €115 million ($A190 million) for the quarter. The sales plunge was led by the company’s Windows Phone-based Lumia smartphone unit, where shipments fell 27% from 10.2 million units during the second quarter of 2012 to just 7.4 million for the same quarter in 2013. To put that number into perspective, it was a little over one-tenth the number of smartphones sold by Samsung during the same quarter. It was an inglorious end to a company that absolutely dominated the mobile industry through the 1990s and 2000s. As recently as 2010, when Apple sold 47 million smartphones, Nokia managed to sell 104 million. According to prominent industry analysts, such as former Nokia executive Tomi Ahonen, the fateful moment came in February 2011, when then chief executive Stephen Elop made the decision to switch its smartphones to the Windows Phone operating system. Soon after, a leaked internal letter from Elop known as the “burning platform” memo likened the company’s situation in the mobile phone market to a person standing on a burning oil platform. After the takeover was announced, Elop was named as one of the top contenders for the position of Microsoft chief executive. 7. BlackBerry’s failed comeback and takeover attempt It wasn’t just Nokia that had a tough time in the smartphone market at the hands of Samsung and Google. In January, BlackBerry launched its new, all-touch BlackBerry 10 smartphone operating system. The platform, originally scheduled for late 2011, had been delayed by a year, preventing the company launching a flagship phone in 2012. The Australian launch for the first smartphone to run the new platform, the Z10, came in March at a gala event in Sydney hosted by Adam Spencer. A second device using a traditional BlackBerry keyboard, called the Q10, came soon after. While the reviews were generally positive, the new devices failed to be the big comeback success the company’s then-chief executive, Thorsten Heins, had hoped for. By August, the company formed a special five-member panel to examine takeover options after director and Canadian investment guru Prem Watsa quit the board. In its September quarter results, the full carnage was laid bare. The Canadian smartphone maker reported just $US1.6 billion in revenues for the quarter, down 45% year-on-year and 49% quarter-on-quarter. The company also revealed it sold just 3.7 million smartphones for the quarter – and less than half of those ran BlackBerry 10. Total losses came in at $US965 million, including a massive $US934 million inventory writedown against unsold stock of the company’s Z10 smartphone. The company announced more than 4500 staff layoffs, representing nearly 40% of its global workforce, while Heins bought a new private jet. Meanwhile, the company’s rollout of its Messenger app for Android and iOS was frozen due to technical issues with its release. In early November, with banks uncertain of the company’s long-term future, Watsa failed to raise the requisite $4.7 billion for a buyout, instead lending the company $US1 billion. As part of the deal, Heins stood aside as chief executive, replaced by former Sybase chief executive John Chen, with Watsa rejoining the board. Heins received a $US22 million golden parachute for his efforts, significantly less than the $US55.6 million he would have received had the sale gone through. 8. The Twitter IPO Last year, Facebook’s disastrous IPO ended in tears – followed by lawsuits. Thankfully, the outcome was not repeated when its social media rival, Twitter, listed on the New York Stock Exchange in November. After opening at $US26 per share, the company’s share price surged 72.69% in its first trading session. It closed at $US44.90 per share, before dropping slightly to $US44.44 in after-hours trading. Making the result even more amazing was the state of its balance sheet. While the tech giant has revenues of $US534.46 million and around 230 million users worldwide, it has never posted a profit. Despite this, the company now has a market capitalisation north of $US20 billion, with chief executive Dick Costolo claiming the company’s long-term investment strategy has prevented it from chasing profits in the short term. 9. iOS7, iPhones and iPads For Apple, 2013 was a solid if somewhat unspectacular year. In June, the company released a redesigned version of its smartphone and mobile operating system, iOS7, alongside a new version of its Mac OS X desktop operating system, known as Mavericks. It was the year that Apple finally unveiled a low-cost version of its iPhone, known as the iPhone 5c, alongside a new 64-bit flagship smartphone called the iPhone 5s, complete with a 64-bit processor and a fingerprint sensor. Then, in October, the company unveiled a lighter version of its iPad, known as the iPad Air. None of the products had the industry-shaking impact of the unveiling of the Macintosh, iPod, iPhone or iPad. That said, with billions in profits each quarter, a solid second place in the smartphone market and the world’s biggest selling tablet, solid and unspectacular for Apple is better than most companies could dream of. 10. Xbox One and PlayStation 4 launch Last, but certainly not least for gamers, 2013 marked the introduction of next generation games consoles from both Sony and Microsoft. Coming a year after Nintendo launched its Wii U system, Sony announced one million first-day sales of its PlayStation 4 system, but the launch was marred by a number of angry consumers taking to social media to complain about non-functional systems. Sony’s first-day sales were soon matched by the first-day sales of Microsoft’s new Xbox One system. So how will the two new devices perform over the long term? We’ll have to wait until next year to find out! This story first appeared on SmartCompany.
Over $US60 billion ($64 billion) worth of investment deals were done internationally in quarter three this year, up significantly from $US23 billion in the same quarter in 2012, with the Asia-Pacific region leading the average deal value with $30.4 million. According to quarter three’s Internet Dealbook produced by Right Click Capital, 985 deals were made this quarter, down from 1248 made in the same period in 2012. In the last year, financial services and transaction related deals were up by 284%, and mobile apps up by 381%. E-commerce deals were down by 36%, and software as a service by 11%. The games industry has slumped with total deal value dropping by 90% since quarter two 2013. Right Click Capital partner Benjamin Chong told StartupSmart the data revealed some interesting target industries for local founders. “There continues to be a lot of interest in mobile apps, so the acquisition and investment amounts have gone up, but there has been a big decrease on games,” ,” Chong says. “There are some amazing success stories but it appears investor appetite for games has waned. Investors are focusing more on serious apps and those that can provide ongoing value to users.” Chong says he was surprised software-as-a-service (Saas) investment trend. “I would’ve assumed software-as-a-service would’ve trended up, so this is definitely one to keep an eye on. I’m still very positive and bullish about SaaS, as for the target business market the model of pay by month makes a lot of sense and anecdotally is taking off,” Chong says. Despite the lower number of deals made, the average deal value (over $81 million) was almost triple 2012 quarter three average (over $27 million). RightClick Capital omitted the multi-billion Verizon deal from the totals as it would skew results, but infrastructure investment boomed on the back of Dell returning to being a privately owned businesses and a series of large deals including the Microsoft-Nokia deal. “Australian founders who have start-ups who can add significant strategic value to these large companies and recent deals should explore the new partnerships to create value for themselves,” Chong says.
Let’s role-play for a second, you are making a business deal, it is 1996 and you’ve been through a few updates to your work mobile to arrive at the email-capable Nokia 9000 Communicator. Do you text your business proposition to your potential partner? Do you fax it? Do you tap it out in an email? Or do you phone them to organise a face-to-face meeting? A survey of 457 owners and managers of Australian businesses has found that a remarkable number of communications channels are now being used, including social media and texting, to seal deals. Your 1996-self would surely blanch at how your future-self avoids face-to-face contact. The Galaxy poll for the Servcorp Good Business Study found they pursue face-to-face meetings only 19% of the time, preferring a phone call 54% of the time followed by email 25% of the time. In terms of communication forms, 91% said email is preferred, followed by 64% saying face-to-face was their chosen form. A quarter said text messaging, once considered the domain of teenagers, was their preferred form of communication, and 10% preferred social media. There is a hidden pitfall in the rise of written electronic communications, the survey reveals 58% of business owners are “significantly influenced” by typos and grammatical errors when choosing a supplier or awarding a contract. Other top grumbles were not having their calls/voicemails returned, at 78%, and not feeling their needs are understood or met coming in second at 67%. Servcorp, which runs serviced offices, released the results today.