For 20 years, consulting firm Gartner have been calling the future of technology using its now iconic “Hype Cycle”. The Hype Cycle: from hype to reality The Hype Cycle breaks the introduction of new technologies into five phases starting with the “Technology Trigger”, the first point at which a technology comes to the attention of the press and businesses. Technologies then rapidly become oversold or hyped. This is the point at which expansive claims are made about how technology X is going to radically transform and disrupt and the early innovators push to be amongst the first to ride the wave of excitement that technology generates. The initial hype eventually leads to a “Peak of Inflated Expectations” which is subsequently followed by the crash as it is realised that the technology isn’t going to be adopted in quite the way everyone predicted, nor is it generally as useful. This part leads to a “Trough of Disillusionment” which is accompanied by an increasing number of negative articles, project failures and lessening of interest in the technology generally. For some technologies however, the disillusionment is followed by a gradual increase in a more realistic adoption of the technology which eventually results in a “Plateau of Productivity”. Technologies for the next 10 years For Gartner’s 2014 Hype Cycle, the notable technologies are speech recognition which they are claiming to be well into the productive phase. Certainly mobile phones and increasingly, wearables, have driven the adoption of voice control and interaction and it is definitely usable on a day-to-day basis. Having said that however, Gartner also puts wearable user interfaces as having passed the peak of inlfated expectations and rapidly heading to the trough of disillusionment. Given that Google has based their interface for wearables very heavily on the use of voice, it seems odd that these two technologies would be so far apart according to Gartner. The position of the Internet of Things at the peak of inflated expectations will also come as a disappointment to all of the companies like Cisco that are claiming that we are already well and truly in the era of billions of interconnected and independently communicating devices. The future is lumpy Although the Hype Cycle is a convenient way of visualising the progress of technology from invention to universal use, it over-simplifies the way progress is made in innovation. As science fiction writer William Gibson once said: “The future is already here — it’s just not very evenly distributed” Technology innovation is never smooth and never takes a single path. There can be businesses and individuals that are using technologies to radically improve productivity at the same time as almost everyone else is failing to do the same. A good example of this is the hype around “Big Data”. Whilst everyone acknowledges that we are creating enormous amounts of data that ultimately must hold valuable information and knowledge, very few organisations are attempting, let along succeeding, in finding it. Those that are experts in Big Data are the companies that have made digitally massive infrastructure their entire existence, companies like Google, Facebook and Twitter. Whilst Gartner has predicted that Big Data will reach the plateau of productivity within five to 10 years, it is also possible that it will never get there and that very few companies will have the skills to be able to take advantage of their amassed data. The other issue with Gartner’s representation of the technologies that it surveys is that it doesn’t distinguish between the different categories of technologies. Those that are aimed at consumers as opposed to the business sector. Here again, we are likely to see very different paths to adoption and acceptance of those technologies with very different time frames. What we are increasingly seeing is how technology is increasingly being used to enable a concentration of a very small number of very large companies. In turn, these companies are able to focus their resources on introducing new technologies for the public, rapidly iterating on designs until they work. Wearables from Apple, Google and companies like Samsung is a good example of this. As always with predictions around technology, it is very hard to tell what will be the key technologies next year, let alone in five to10 years time. Given that the Hype Cycle has been with us for 20 years however, my prediction is that it will still be here for the next 20. David Glance does not work for, consult to, own shares in or receive funding from any company or organisation that would benefit from this article, and has no relevant affiliations. This article was originally published on The Conversation. Read the original article.
In my last article I responded to an interview in Vox with Marc Andreessen. Andreessen lamented that, in spite of a historic gold rush in technology companies, the IPO is dying in the United States due to zealous over regulation in the form of Sarbanes–Oxley, for example. As a result, the general public is missing out on the incredible gains that were experienced in the listed US technology companies of yesteryear. Yes, the regulators have gone too far and it is creating serious friction in the IPO pipeline. However I argued that perhaps the real reason that technology companies appear to Marc to be listing later and later is because, not surprisingly, the top venture capitalists are keeping these returns all for themselves. It's been a relatively recent phenomenon that US technology companies have been waiting longer and longer to go public. In the US, technology IPOs of yesteryear companies went public much earlier, with market capitalisations in the hundreds of millions of dollars instead of the tens of billions. As a result, the general public had the ability to share in the spectacular returns that technology companies can generate over time as software eats the world and industry after industry is being wholesale remapped and reshaped, with revenue growth at a speed unprecedented in history. Even though eBay's share price went up a spectacular 163% on opening day, if you bought shares on market after this rise and held on until today you'd have made over 3500%. If you bought Amazon the day after it listed, you'd be up over 27,000%. If you'd bought Microsoft at IPO in 1986, you'd be up 66,500% today and 3000% in the first eight years alone. Unfortunately for investors in the US, the general public is missing out. You only have to look at Facebook listing at $104 billion and Twitter listing at $24 billion to get a feeling for just how late these companies are going to market. So who is making all the money as the stocks go from the tens of millions of dollars in market capitalisation to the tens of billions? The answer, not surprisingly, are the venture capitalists. You can't blame them for doing so, because of course their business model is to make as much money as possible for their limited partners. There is another stock market, however, outside the US that is not subject to Sarbanes–Oxley and where technology listings are about to boom. This market is already quite a large market for equity capital issuances. In fact, as much money was raised there in the last five years as NASDAQ. The only problem from a technology company perspective is that most of the money raised there has been for resources companies. I am, of course, talking about the Australian Securities Exchange. Now let me tell you how this has all come about, and why now. There is a disaster in venture capital in Australia with only around $30 million per annum for the whole of seed stage investments, $40 million in early stage and $20m in late stage. AVCAL reports there were 16 "investments" done with this grand sum of $20 million in late stage venture capital in 2013. I am quite perplexed about how they defined "late stage" here, because the very definition of a late stage round size is usually greater than $20 million in one single investment, let alone 16. The only conclusion I can make is that these investments were triaged into bleeding zombie companies – hardly a sign of a successful late stage industry. Either that, or AVCAL has now taken up reporting of late stage investments to include lemonade stands. Atlassian, one of Australia's most successful technology companies, just raised $US150 million in a late stage round. The entire Australian venture capital industry simply isn't big enough to fund that single round. In addition to the lack of venture financing, a major terraforming of the economy is needed. Although we have $1.5 trillion dollars in the fourth largest pool of retirement funds (superannuation) in the world, these funds don't invest very much in Australian venture capital because none of the VCs to date have demonstrated that they can generate a return. It's hard to claim that venture capital is even an asset class in this country, as it's missed every single major technology success story this country has produced all the way back from Radiata: Atlassian, Kogan, Big Commerce, RetailMeNot, Campaign Monitor, OzForex. The list goes on and on. For the life of me, I can't think of one they actually invested in. The funds being invested into Australian VC come roughly equally from corporates, government and high net worth individuals. Corporate investment in VC in Australia is in decline, and with the government recently turning its tap off with the cancellation of the IIF program, I don't see a path to resurrecting a domestic venture capital industry any time within the next decade or two without a serious change in philosophy, which is not going to come from either of the two major political parties. The incumbent Liberal party is currently implementing a program of austerity, and the previous Labor government was, at best, only interested in trying to win union votes from bailing out the inefficient and dying local manufacturing sectors. The biggest impact Labor had on the sector during their tenure was to change the laws on the taxation of option schemes, which wiped out the primary incentivisation mechanism for the technology industry (and, ironically, the primary means by which wealth is redistributed from owners to workers). While I personally was not sorry to see the IIF go, I was hopeful that the axing of the program would be replaced with something more effective for financing technology companies down under. A better way would be through taxation reform for investors in qualifying risky technology ventures –front-end relief in the form of tax credits or a reduced rate of tax and back-end relief in the form of capital gains tax reductions or exemptions like the UK's Enterprise and Seed Enterprise Investment Schemes. At the end of the day, the Australian government only provided $25 million a year into the IIF program, which is paltry when you consider Singapore, with a population of 5.4 million, has committed $SG16 billion ($US12.8 billion) into scientific research and development over a four year period from 2011 to 2015. So how are Australian companies getting financed? Whilst the big US VC brands like Accel, Sequoia, Spectrum and Insight are actively prospecting down here, they are mostly just looking for cheap deals by value investing in late stage companies outside the hot money Silicon Valley market. The investments that they have made to date, and which have been trumpeted in the media, have for the most part been majority buyouts or exits (Campaign Monitor, 99designs, RetailMeNot, etc). A notable exception to this has been Accel's investment in Atlassian. However, the lack of funding has not deterred Australia's entrepreneurs from building world class technology companies. Instead, they have focused on raising funds from the best source possible: selling something valuable to their customers. This story continues on page 2. Please click below. Almost all of Australia's best technology companies have bootstrapped all the way through. Those that did take outside funding, for the most part, didn't take it until they reached quite a late stage. As a result, we have some very well run technology companies, and some world class companies in the making. Although I am pretty active in the startup community, every second week I am shocked to discover yet another Australian technology company that I have never heard of generating $10 million, $20 million, $50 million or more in revenue per annum. Until recently, I had never heard of companies like RedBubble, Nitro, and Pepperstone. The latter of which has, in just three years, become the 11th biggest forex broker in the world, turning over $70 billion a month through their online platform). Because the Australian technology industry is mostly bootstrapped, it took longer to get here, but coming down the pipeline are an incredible number of great technology companies. So if the Australian VC industry is dead, then how are these great companies going to raise funds when they need them? Well, I believe the answer is staring them right in the face. It's called the Australian Securities Exchange (ASX). After all, what better way to fund a company than by crowdsourcing it? This is what the resources industry already does today, via the ASX. If you have an early stage speculative mining company, you don't go begging down Coal Hill Road pitching to mining VCs and spending six months negotiating a telephone directory thick preferred stock structure. No, you write a prospectus detailing what you're going to do with the money and list it on the ASX. Likewise if you're BHP or Rio Tinto, you can go to the ASX and the market is deep enough to raise billions. Crowd sourcing equity from the public has been done successfully for decades in resources. The ASX is in the top five globally for the total amount of money raised for equity issuances from 2009-13. There is no Sarbanes–Oxley in Australia, and listing costs are quite low. (In Freelancer's IPO, the underwriting fees were $450,000, legal fees were around $100,000, and investigating accountants cost about $50,000.) Why go to a venture capital middleman unless they are a rockstar with solid operating experience that can add demonstrable value in some way? I believe that Malcolm Turnbull will bring in legislation to allow the general public to crowdfund early stage ventures without a registered offering document, as is starting to happen elsewhere around the world. This will generate further interest and appetite in investing in technology companies from the general public which already actively takes a punt on speculative, early-stage mining companies (not to mention the Melbourne Cup). At the moment, to invest in companies without a registered offering document you need to be a "sophisticated investor", which is curiously defined as a person having income of $250,000 per annum in each of the last two years, or net assets of $2.5 million. I don't know why being rich makes you automatically sophisticated, and being poor means you’re incompetent with your money, but I'm sure that something sensible will happen here. If, by miracle, we see some taxation relief for technology investments, then this will be accelerated. But I'm not holding my breath, even though the Australian government used to provide some form of taxation relief for investors in the mining industry. When we were considering listing Freelancer on the ASX, many people gave us the usual regurgitated responses as to why it wouldn't work; investors here don't understand technology and that we would trade at a discount compared to US markets. Professor George Foster from Stanford Graduate School of Business showed some time ago that country specific factors were a lot less important than company-specific financial statement-based information in explaining valuation multiples in an international setting. Markets are increasingly globalised. It's almost as easy for a US investor to buy Australian shares as US ones. Money flows to where it gets the greatest return for a given risk profile; basically if arbitrage exists, someone will take it. Our stock going to $2.50 from a 50 cent issue price in the biggest opening in the last 14 years and third biggest opening ever on the ASX for an issuance larger than seed size is testament to the amount of pent up interest amongst the general public to invest in technology. We took a calculated risk – nobody wants to be the first to try something new. But so far it has paid off. It’s great to see the sector now heating up with recent listings from companies like Ozforex, iSelect, iBuy and MigMe (up 95% yesterday on their IPO, and like I did, broke the bell), and with WiseTech Global, Vista Group, 1-page, Covata, BPS Technology, Grays Australia imminently coming down the pipeline. I suspect Ruslan Kogan will also be considering his options given the tremendous effort he has done bootstrapping Kogan to date. What surprised me is that the process was significantly easier, quicker and resulted in a more equitable and transparent capital structure than what I have experienced in any of the dozen venture capital financings I have been involved with in the past. Projecting forward, I think that the ASX will be the primary way in which technology companies raise equity in this country in the future. The ASX realises this as well, and is moving to position itself as a regional hub for the Asian technology sector. If it is successful—and I think there is a good chance it will be—it will cover a massive market. There are significantly more people in Asia (with dramatically rising incomes), significantly more micro, small, and medium enterprises (MSMEs). It’s a much bigger market for many industries, and there are a lot more mobile phones than the US, to draw comparison to just a few metrics. The ASX is in a fantastic position to capture this opportunity. In the second half of 2013 a total of 14 technology companies listed on the ASX. Since January 2014 there has been 55. In the entirety of 2013, a total of 59 companies were financed by Australian venture capital. This is the future for financing technology companies in Australia. Matt Barrie is chief executive at Freelancer.com
“Connecting flying robots to what we do every day”: Drone developer wants to make Australia a little more like The Jetsons8:19AM | Tuesday, 12 August
The cofounder of a Sydney-based drone aircraft and cloud platform developer says it has the potential to make internet-connected drones a part of everyday life, making Australia a little more like The Jetsons. The comments were made at an Internet of Things event in Melbourne, attended by Private Media and organised by network equipment giant Cisco. Propeller Aerobotics cofounder Francis Vierboom says it is now possible and affordable to create drones that will fly themselves about and capture a lot of different data from a lot of different angles, and feed that information into the cloud. “Thinking about what the internet of everything means from our perspective with the naive, exciting opportunities, I think is about making the world a little more like The Jetsons,” Vierboom says. “The internet has so far been mostly about desk jobs, except recently it has gotten a little more interesting because we’ve gotten to do things on our mobile phones and watches, but there’s still a lot of staring at a screen. “The internet of everything is about creating cool stuff like a jacket that can dry itself out like in Back to the Future or something like that. And the other thing that the internet of everything is about is connecting flying robots to what we do every day.” According to Vierboom, there are a number of industries ready for disruption by a combination of drone aircraft as part of the Internet of Things, as well as cloud-based data storage and analytics. “A lot of businesses see the potential for drones to change the way they do things. There’s a lot of existing applications that are already being disrupted by these machines,” Vierboom says. “So for example, surveys, where you can measure the exact shape and contours of a piece of land or work out exactly how much iron ore is in each of the open cut mine. Drones are changing how that’s done and they can get it done really quickly. “I’ve been working on drones for a long time, and as soon as you tell people that, they spend the next 10 minutes talking about their exciting ideas for what drones can do. And it’s pretty difficult for businesses to adopt that at the moment, the way things are working now.” Vierboom’s startup, Propeller Aerobotics, has made the process of connecting data to the cloud easier through the creation of a new platform called Aerodata. From there, businesses can integrate drone-collected data into external third-party apps and cloud services through its APIs, or view the data directly through an app called Aeroviewer. The startup is one of 19 in the semi-finals of Cisco’s Internet of Things (IoT) Innovation Grand Challenge, with a winner set to be announced on September 18. Follow StartupSmart on Facebook, Twitter, and LinkedIn
Google designed a car without a steering wheel, and now Australian startup KISA has released a phone without a screen or keypad. As smartphones become more and more advanced, they become increasingly inaccessible to the elderly and those with disabilities, KISA phone co-founder Dmitry Levin says. Levin and his fellow co-founders Dennis Volodomanov and Leon Kosher founded KISA in the middle of last year, after watching family members struggle to use smartphones. The KISA phone, which launched last Friday, looks like a bulky, less sleek iPhone and features only the most absolutely necessary buttons, contact buttons, on/off, volume, and a SOS button for emergency calls. Users choose up to 10 dedicated contact buttons which are pre-programmed when they purchase the phone. If one needs to be changed, then this can be done remotely by the KISA phone support team. The phone is designed to be as light as possible to ensure it’s not cumbersome to use and not dangerous when dropped. “This is a purpose designed and built device, it’s not for everyone, but it’s designed specifically for the needs of certain people,” he says. “Even the simplest mobile phones on the market assume something about the user; they assume that they already know how to or are capable of using digital menus, touch screen interfaces, audio commands, or even at the most basic level, they assume the user can read. “We set out to make a mobile phone that assumes close to nothing.” While work is being done to make smartphones and communication gadgets as accessible as possible, Levin says there will always be a market for a phone like KISA. “As humans our ability to deal with new technology diminishes over time,” he says. “Technology moves on and it makes it easier, but it doesn’t take the fear of technology. For people that are afraid of tech, no matter what you do, if it looks complex it won’t work.” The phone has been heavily tested, and designed with extensive consultation with Vision Australia and Guide Dogs Victoria. Levin recalls the experience of one tester which he believes illustrates the value of the KISA phone. “One of our first testers, she did not know anything about the device, it was given to her, we weren’t present there, but we were told when she was presented with the box, she was disappointed, she thought it was another smartphone,” he says. “When she opened it her face lit up, and she said I know what this is and I know to how to use it.” Testers of the phone had difficulty using a regular cable charger, and as a consequence the KISA team developed a cradle charger to make powering-up as easy as possible. KISA will also be offering what co-founder it says are the simplest mobile phone plans available in Australia, with no lock in contracts, and easy to understand terms. Levin says KISA has been approached by investors, but plan to continue without investment for as long as possible. “We believe in it enough to fund it ourselves,” he says.
During the ‘90s and most of the 2000s, there was little doubt about which device was primarily used to access the internet: the PC. Sure, there were other devices you could use to access the internet. The web has been accessible in some form on mobile phones since the early 2000s. There were also early tablets, some PDAs and web TV devices with internet capabilities. But the office desktop, laptop or home computer was the primary device – and often the only device – most people used to surf the web. During the recent Google I/O developer conference, the tech giant revealed that it now views smartphones, rather than PCs, as the primary device people use for accessing the internet. Of course, mobile-first doesn’t mean that people aren’t choosing to use other devices when they have the choice – quite the opposite. It is certainly far more comfortable editing an Office 365 document on a PC or laptop than on a mobile. Likewise, reading an e-book is far more enjoyable on a tablet than on a smartphone. But people aren’t likely to be carrying these devices with them at all times. For most people, assuming nothing better is available, the first device they’ll grab to check for new emails, quickly look up a fact in Wikipedia, take a photo of their restaurant meal or send a tweet will be their smartphones. In other words, their mobile is their first “go-to” device for accessing the internet. Just to be clear, by “the internet”, I’m not just talking about the web. I also mean email, cloud-based services, apps, streaming video, and everything else on the internet. This shift has taken a number of years – it’s certainly not a new trend – and has a number of profound implications for how people use the internet. In turn, these implications have massive implications for many businesses. Here are five of the fundamental and profound differences between the old PC-first internet and the new mobile-first internet: 1. It’s always on and always connected The first is that the internet – including apps, the web, emails, cloud services – is now always instantly accessible. The smartphone – and through it, the internet – is permanently connected, always on and always carried. In the past, even if people carried their laptop around with them in a bag, few would bother to pull out a laptop and boot it up to quickly look something up in the middle of a dinner party. But with a smartphone, whipping it out and quickly checking Google to settle an argument is an everyday occurrence. So long as your customer is awake, you can now assume they have almost immediate internet access. 2. Built-in billing Aside from always being available, by its very nature, there’s also a number of billing systems built-in to smartphones. At the most basic, there’s the carrier bill or the prepaid credit. On top of this, there are the various app stores, as well as services such as PayPal. Unlike on the PC, a purchase is always potentially just a tap away. 3. Tap for customer service Likewise, tapping on a phone number in many mobile browsers will result in a phone call being made. This means making a call is potentially part of the built-in experience of every mobile app or website, unlike when PCs dominated the internet. So placing an order or a customer service phone call from a website is now just a tap away. 4. A location-aware personal media form Unlike on a PC, where people often shared a device or even an account, the smartphone is a strictly personal media form. Smartphones, by their very nature, are also location aware. Even the most basic of ‘90s 2G feature phones had to know which cell tower it was connected to at any given moment. This ability to target consumers by location at all times just wasn’t there in the days when most people relied on a desktop PC. It is now. 5. Incredibly accurate audience information The combination of the mobile as a strictly personal media form and information about the location and context of media that is being consumed means smartphones can produce the most accurate audience information of any media form in history. TV ratings or newspaper readership (the number of people to read a paper, rather than the number of copies circulated) was always a best guess effort. Smartphone analytics tell you the precise number, location, device type and time your customers view your content. And all in real time. Massive opportunities As a result of the ubiquity of the smartphone – and recent ACMA figures show 12.07 million Australians now own a smartphone – it can now almost be assumed that anyone accessing the internet also has access to all the functionality of the internet on a mobile device. So here’s a question: Is your web presence built for the old PC-first internet in mind? Or do you have mobile (or responsive) websites and apps that take advantage of the mobile-first internet? If you don’t have a mobile- first strategy, there are a range of opportunities your business is missing out on. This article first appeared on SmartCompany.
Metadata is in the news again with revelations that police in Australia have been getting access to data collected from mobile base stations (cell towers). In the wiretapping world there is a distinction between call content and call metadata. The call content is the actual recording of the conversation. Metadata is data about the call, such as who has called whom and when. In the Fairfax report it says the metadata is about the location of mobile phones and hence the location of the mobile phone owner. According to the report law enforcement agencies are accessing data that tells them who was located within particular cells at particular times. What’s the cell in cellphone? Mobile telephony is based on the idea of cells. As we move around we are connected to a nearby base station. The coverage of a base station is called a cell. The size of a cell depends on many factors but its diameter ranges from a kilometre or less in densely populated areas up to about 30 kilometres in rural areas. Consequently, data on which base station we are connected to can provide information as to our location. Most people do not appreciate just how “chatty” their mobile phone is. When a mobile phone is switched on, there is a constant dialogue between it and the network, even without a call being made. In particular there is a constant exchange of data as to which cell the device is currently located in and which base station it should be connected to. If a signal becomes too weak because we have moved out of the cell, or if the current base station we are connected to becomes too congested the phone connection may be handed over to another base station. All this happens without our intervention and without us making a call. Locating the baddies The data exchanged as part of this process can be of great use to law enforcement agencies since it can provide information as to the approximate location at certain times of the owner of the mobile phone. At the very least it can tell an investigator which cell the mobile device (and hence the owner of the device) was located in at a particular time. But if the investigator is prepared to analyse the data, much more accurate location information can be obtained. To manage handover between cells, the base station monitors the signal strength from the handset. This can give an approximate measure of the distance from the base station. Also, since most base stations use directional antennae, the base station can give a good estimate as to the location of the mobile device. Multiple base stations may be monitoring the signal strength, making it possible for an investigator to pinpoint the location of the mobile phone to a particular house. It is worth pointing out this method of estimating location is quite distinct from GPS used for location aware apps in smart phones. Apps in smart phones may include GPS data (such as location services in mapping applications or geotagging in images) but accessing it by law enforcement agencies is not straightforward. In contrast, determining location using tower data is much simpler since the method relies only on monitoring who is connected to the base station and what their signal strength is. Should we be worried? The main concern expressed so far is the indiscriminate nature of data collection. Rather than collecting data for particular individuals, it is claimed that all location data for the base station is collected and the investigators pull information of interest. If true, there are obvious possibilities for data to be collected and leaked about people who are not suspected of being involved in criminal behaviour. There is also concern about disposal of collected data. So unless we are confident that there is some trusted oversight of it, then yes, there is some cause to be worried. Trusted oversight in the past has been through a magistrate issuing a warrant for an intercept. At the moment police do not need a warrant to access phone tower data. Maybe that should be changed. This article originally appeared on The Conversation.
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
With the ATO announcing their hit list for 2013-14, it is time to do some urgent tax planning. 1. Keeping a car log book could increase your refund by thousands If you use your car for work purposes and keep a log book for 12 weeks then the deductions can be in the thousands. Make sure that you keep all costs associated with the running of your car (such as petrol, insurance, registration, servicing and lease payments) for the whole year, not just the period that you kept the log book. Remember that the ATO motto is no receipt = no deduction so you could be costing yourself $$$ by not keeping those dockets! 2. Claim a deduction for the costs you incur in running your home office This is a big hit-list item of the ATO this year. More people these days are working at home, but not many are aware they can claim a deduction for costs incurred in running a home office, even if a room is not set aside solely for work purposes. Deductions are available for the work-related portion of home telephone, internet, stationery, computer equipment and printers. Keep a diary of your time that you work from home and claim a 34 cents per hour deduction for electricity, gas and depreciation of home-based furniture. For those that use mobile phones, look at a bill for one month to work out your ‘mobile phone log’ and apply the work-related percentage across the whole year. With respect to internet, tablet and computer usage, take note of the time that you use them for work versus personal (especially the kids playing games or doing homework). Note that it is expected that you will have a personal usage as we become more reliant on this technology for personal and social media purposes. On investigation, the ATO would like to see proof of websites that you regularly look at for work. 3. Minimise capital gains tax (CGT) by deferring sale or offsetting losses against gains already made The sharemarket has had a roller-coaster year in 2013-14. If you made a nice capital gain or two earlier in the year then you can reduce CGT by selling any non-performing shares that you may be holding. Any unrealised gains should be sold after July 1 to defer tax for another year. And remember that if you hold shares for more than 12 months you reduce CGT by half. 4. Build your nest egg quicker by paying 15% rather than 46.5% by salary sacrificing into super Salary sacrificing into superannuation is one of the best, and legitimate, ways to minimise your income tax bill. You can contribute up to $25,000 per year into super ($35,000 for those aged 60 and over) which is only taxed at 15% instead of your marginal tax rate (potentially 46.5%). There are not many pay packets left to do it this tax year, so keep in mind to start putting extra away when July 1 arrives. 5. Income expected to be lower next year? Bring some 2014-15 expenses forward into this year If you are expecting that you will have a lower income next year – due to factors such as maternity leave, redundancy, a smaller bonus or perhaps cutbacks to overtime – then why not try to bring forward your deductions into this tax year. Stocking up your home office with stationery, laptops and printers or prepaying subscriptions and interest for up to 12 months in advance are just some of the simple ways to reduce your income before June 30. 6. Prepay private health insurance A 29.04% rebate on private health insurance premiums gradually phases out for those who earn over $88,000 (single) or $176,000 (couple). If you are currently under these thresholds, but think you will earn above these levels in 2014-15, you can still get the rebate in full if you prepay 12 months of premiums before July 1. 7. Take advantage of the government’s free money service known as the “super co-contribution” It is surprising how few people actually take advantage of some free money from the government. If your income is under $33,516 and you contribute $1000 post tax into super, the government will match it 50 cents in the dollar. Whilst this incentive gradually phases out above this figure at $48,516, it’s free money! Also, if you earn less than $10,800 then your spouse can put up to $3000 into your super fund and they will receive an 18% rebate ($540) on tax via the spouse super contribution rebate. 8. Buy a new business asset for under $1000 and claim it as a tax deduction this year There have been some great tax concessions over the past few years for small businesses, with none greater than the immediate write-off available for the purchase of new business assets. However, draft legislation is in place to reduce the threshold for this concession from $6500 to only $1000 for business assets purchased after January 1, 2014, so don’t get caught by wily retailers trying to tell you otherwise! There is no limit to the amount of assets that you can purchase under this concession. Businesses also can no longer immediately write-off the first $5000 of any new vehicle purchased. If your business is registered for GST, then you can buy a business asset for less than $1100, claim the 10% GST credit and get an immediate write-off for the balance in this year’s tax. 9. Keep your receipts With the ATO continuing to ramp up their audit activity yet again it is important that you keep your receipts. The ATO motto is no receipt = no deduction so you could be costing yourself $$$ by not keeping those dockets! 10. Get a great accountant Avoid paying too much in tax or leaving yourself to a visit from the taxman. Great accountants are like surveyors – they know where the boundaries are. And their fees are tax deductible! Dr Adrian Raftery is a senior lecturer in financial planning and superannuation at Deakin University and author of 101 Ways to Save Money on Your Tax - Legally! 2014-2015 edition.
Google has predicted advertisements could soon be featured on places such as refrigerators and watches, in a bid to capitalise on the roll-out of ‘smart’ appliances. In a December 2013 letter to the US Securities and Exchange Commission, released earlier this week, the tech giant said it expects to see itself and other companies develop advertising on devices beyond mobile phones. “We expect the definition of ‘mobile’ to continue to evolve as more and more ‘smart’ devices gain traction in the market,” the letter reads. “For example, a few years from now, we and other companies could be serving ads and other content on refrigerators, car dashboards, thermostats, glasses and watches, to name just a few possibilities,” said the company. In the letter, Google described this approach as “device-agnostic”. This means rather than traditional desktop or tablet marketing campaigns, advertisers’ campaigns will not be tied to a particular device. Michelle Gamble, founder and chief executive of Marketing Angels, told SmartCompany she isn’t shocked by Google’s suggestion that advertising could intrude further into the home. “I think we’re already seeing it,” says Gamble. “It’s the price you pay for having amazing technology offered to you very cheaply. As things have gotten cheaper and moved to the cloud, you’re starting to see advertising being integrated into your applications more and more,” she says. Gamble says consumers could react negatively at first, but examples such as Facebook jumping on the advertising bandwagon show that if the product is good enough, people will eventually get used to the idea. “I think there will be a bunch of early adopters that will rally against it, but much like anything else they’ll eventually accept it,” says Gamble. “Consumers are always going to protest against more advertising. But they’re certainly not going to stop paying for a service they’re hooked on,” she says. They key here is striking a balance between the advertiser and consumer, says Gamble. “One thing Google has always done though is put the user first,” she says. “They’re great at technology and rolling out new ideas, and quickly canning them if they don’t work. I’m sure they’ll somehow find the right balance between pushing advertising onto the consumer and interrupting the consumer too much.”
We hear of many stories from Silicon Valley of start-ups getting millions in venture capital, but the reality for most start-ups is you are going to have to fund your early days with your own money. Credit cards can be a risky way to finance your business, but if managed correctly, they could also be a great help. They can help you bridge the gap from raising capital through to achieving positive cashflow. Despite the risks involved, many entrepreneurs have no other choice but to fund their start-up with a credit card. There are so many options available, it can be confusing as to which is the right credit card for you. The biggest thing you need to realise is this: If you are sure you’re not going to repay your balance every month, get a low interest credit card. Why is a credit card a good idea? Even bearing in mind the risks, credit cards can be an ideal way to get your start-up running. Here’s why: The application process is much simpler with fewer requirements to commercial finance options. A credit card can help you buy the things you need from day one. Getting the right tools and equipment to help improve productivity and assist in earning revenue, will help give your business a better chance of success. If you have an existing credit card, you can look into getting a credit limit increase to help get the initial funds you need for your start-up. Credit cards allow you to redraw funds after you’ve made repayments. This is a good thing, and a bad thing. It can help with cashflow, but if you’re not careful you could end up in a bad cycle where you don’t repay your balance each month. Key factors in choosing a credit card for your start-up You don’t need a dedicated business credit card.A personal credit card is fine so long as you separate your personal purchases from business purchases. More often than not, a personal credit card is actually going to be much more cost-effective for you with a lower purchase rate and annual fee. Take advantage of 0% purchase offers.For many start-ups, the majority of your initial purchases are going to be for asset acquisition – buying things like computers, printers, mobile phones or any other office equipment your business might need to be up and running. There are a number of credit cards available that allow you to make a purchase and pay 0% interest. This can be helpful, so long as you make sure you have repaid your purchases within the “honeymoon” period. Do an online credit card comparison first.You don’t need to show any loyalty to your current bank. In most cases, it won’t give you any benefit applying with your existing bank, so I strongly encourage doing an online credit card comparison before making the decision to do that. If you compare credit cards, you might find that a competing bank has a much more competitive offer. Managing your credit card “The most powerful force in the universe is compound interest” – Albert Einstein.Fifty dollars can be extremely powerful. On a credit card balance of $3,000 with an interest rate of 18%, you’d be looking at taking up to eight years to repay that balance if you had just made the 2% minimum repayment each month. If you pay an extra $50 each month, you could repay that debt within three years, shaving five years off, and saving around $1,800 in interest repayments. Treat it as a short term solution for funding.Using credit cards to fund your daily operations should only be treated as a short-term solution. It should be your priority to organise a more suitable financing arrangement for your business, once you have a track-record for your business. Consider balance transfer offers.If you’ve racked up a debt on your card, and you are struggling to make more than the minimum repayment, a balance transfer offer could be for you. Essentially, a balance transfer allows you to transfer your existing balance to a new credit card, with a special rate applied for a certain period of time. There are a number of balance transfer options including 0% p.a. for six month offers and 2.9% p.a. for 12 months.When it comes to choosing your balance transfer option, you have to be realistic and ask yourself if you’ll be able to pay your balance off in the introductory period, otherwise you could be stuck paying a much higher interest rate. Some cards revert to the purchase rate, and others to the cash advance rate so you’ll need to check the terms and conditions when applying. It’s also important to cancel the other credit card as soon as the balance transfer is done. With some financial diligence you can make a credit card work for you, instead of you working for your credit card. Picking a great low interest offer, and following a repayment plan will help keep your credit card under control.
Mobile payment technology could swipe out the use of traditional wallets in eight years, a Commonwealth Bank survey finds. After surveying 1024 Australians the bank forecasts that paying with cash or cards could give way to mobile phones by 2021, according to a report in the Australian Financial Review. Commonwealth Bank executive general manager of cards, payments, analytics and retail strategy, Angus Sullivan, told the AFR he thinks a digital or e-wallet will become an important part in people’s lives. “We’re reaching almost to the point of ubiquity around smartphones so I think that’s one big driver,” he said. “You’re also seeing more convergence around technology solutions – the wide scale rollout of contactless terminals in Australia has been a really big tipping point.” The AFR reports that mobile phone payments are growing by around 58.5% a year. Kounta founder and chief executive Nick Cloete says he thinks the prediction of 2021 is too cautious and that change will likely happen much sooner. “I most definitely agree with the findings but I’d bring that date forward,” he told SmartCompany. “Most countries like Australia now have such a high mobile phone penetration… Because the future of technology is moving so fast, consumers are demanding that they want to do everything on their phone.” Cloete says with the payment technology his business creates, many businesses are already using it to offer mobile phone payment to customers, but a challenge is building customer awareness in order to increase uptake. He explains that a typical mobile payment works with a customer logging into a payment App on their phone, choosing the business they are in, and allowing it to connect to the retailer’s computer system. “The future of retail online and the future of online is mobile,” he says. However, while Cloete and the Commonwealth Bank are confident about consumer uptake, late last year Reserve Bank of Australia governor Glenn Stevens told an Australian Payments Clearing Association conference that elements of Australia’s payments infrastructure are “a bit dated”. “It is very clear that both individuals and businesses are demanding greater immediacy and greater accessibility in all facets of their day-to-day activities,” Stevens said. “This includes payments.” The results of Accenture’s Consumer Mobile Payments survey from 2013 found that many consumers know that mobile payments are an option, but still do not make them. Once consumers had made a mobile payments, they were much more likely to become converts. Incentives from retailers or businesses also helped take-up rates. Accenture found 60% of consumers who already make mobile payments said they would probably do so more often if they received instant coupons as a result. It also found that 36% said they would hand over personal information in exchange for such rewards, while 46% of users indicated that they would increase payments if offered short-term location-based coupons. Security concerns were found to hold back consumers from taking up mobile phone payments more rapidly. “While the industry is pre-occupied with the technology roll out, consumers are much more concerned about the security, privacy, convenience and value of using their phones to make payments,” Accenture reported. This article first appeared on SmartCompany.
Dmitry Levin’s newly designed phone doesn’t have a touchscreen. In fact, it doesn’t even have a screen. It’s a couple of buttons but it’s designed for a big and growing market: the elderly or people whose disabilities limit their access to smartphones. Kisa has been developing the product for just under two years, after the three co-founders realised their elderly grandparents owned phones they will probably never use. “We all tried explaining how to use smartphones to our grandparents, but I know my wife’s grandfather still looks for a payphone when he’s out. We realised we needed to create a phone design from scratch that would actually be used,” Levin says. While images of the phone aren’t available yet, Levin can reveal it doesn’t have a screen and includes one to 10 buttons. Using the same technology as speed dials (pre-programmed numbers assigned to buttons) each button bares a word or image such as a photograph or picture of a house or doctor. After spending months trying to find a way to manufacture the phone in Australia, Kisa has had to develop the phone overseas. “It just turned out to be impossible to make mobile phones in Australia,” Levin says, citing inexperience with phone creation as the major issue. “High-tech manufacturing does not happen here often, so there aren’t cheap manufacturers to work with.” They’re working with functional prototypes and developing their partnerships with Vision Australia and the Seeing Eye Dog association in Victoria. But beyond the vision impaired, they’re also focusing on people with Alzheimer’s disease and dementia. “Every stat shows the majority of people over 65 mostly use a landline. We wanted to create a way for those who may need care to get in touch when they’re out that’s even easier than using a landline,” Levin says. “If we can achieve just a fraction of the change we’re hoping for, we’ll improve so many lives and it’ll have quite a significant commercial return for us.” The biggest challenge for the Kisa team has been surviving the past 18 months without the full-time wages they commanded prior to putting their all into the business. They’ve bootstrapped the business so far and intend to have the product in the market within six months. More information: http://kisaphone.com.au/
Are you trying to pick a name for your business? Looking for something really unique? Old Taskmaster has a radical idea that will make you stand out from the start-up crowd. But first, I need you to imagine a strange land. A land before time. A land before mobile phones and the internet had been invented. Now, for some of you young whippersnappers, I’ll admit it might be tough to imagine, but bear with me. In this strange land, product and company names generally communicated information about the company. Sometimes, a business would be named after its founder. For example, Myer’s department store was founded by Sidney Myer, while Grace Brothers was founded by Albert Edward and Joseph Neal Grace. An alternative was to name products based on where it was from. No prizes for guessing where the cannery for SPC, the Shepparton Preserving Co-operative, was (and yes, it was a farmers’ ‘co-op’ before it was a ‘company’). Others opted for names that describe what the company did. As shocking as it sounds, International Business Machines was an international company that sold business machines. Sure, there were products with misspellings and poor grammar – Old Taskmaster is looking at you, Weet Bix – but those products stood out from the crowd by virtue of their unique name. Even in the early days of the computer revolution, brands like Digital, Commodore, Apple, Radio Shack, Acorn or Atari at least chose sensible names. Of course, times change. Like goth kids in high school playground, everyone decided to be unique – by doing the exact same thing as everyone else. It might have been the influence of rock and roll bands, from the Beatles to Motörhead. It could have been the camel case commands in various programming languages (as if anyone who ever typed ‘WriteLn’ needed another reason to hate Pascal). It was, possibly in large part, due to the success of the iMac and web squatters claiming every word in the dictionary. These days, it seems a start-up name isn’t complete until it’s grammatically incorrect. CamelCase everywhere. Companies insisting the first letter in their company name should be lower case. Needless exclamation marks! Vowels missing. Letters replaced by numb3rs. Then there’s the letters replaced with an upper case X, sort of like the “X Games”. After all, it might not be immediately clear to the casual observer that optimising a database query in PHP is really an extreme sport, like a skydiving contest. That’s before you get the PR reps who insist that a Welsh-looking company name that would not look too out of place near the town of Llanfairpwllgwyngyll must be spelled in a particular Pantone shade of red, lower-case italics. With that type of pressure, it can be tough to stand out. Well, Old Taskmaster says this: If you’re choosing a business name, it’s time to do something really radical. Something to make you really stand out against all the other tech start-ups out there. That’s right, it’s time to buy a vowel! No italics, no unnecessary ‘i’ or ‘e’ at the start of your company name. It’s time to really stand out from your competitors – by choosing an old-fashioned, grammatically correct business name! Get it done – today!
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.
Facebook is 10 years old today. It’s time for birthday celebrations for the social network with 12,800,000 Australian users and 1.19 billion users worldwide. But it’s also time to reflect on 10 interesting things you don’t know about the social network. 1. The social network makes more money now from mobiles than PCs Facebook is worth around $US135 billion and has successfully made the shift to focusing on mobiles. In Facebook’s fourth quarter earning report filed on January 29 this year the social network disclosed that for the first time sales from ads on mobile phones and tablets exceeded revenue from traditional PCs. In an interview marking Facebook’s 10th birthday, founder Mark Zuckerberg told Bloomberg the shift to mobile was “not as quick as it should have been”, but “one of the things that characterizes our company is that we are pretty strong-willed”. 2. Facebook tried to buy Snapchat In 2012 Facebook bought Instagram for $US1 billion even though the photo sharing app had no revenue source. Zuckerberg described the deal as a milestone, saying "we don't plan on doing many more of these, if any at all"; but last year, Facebook reportedly offered $3 billion to buy Snapchat. On two occasions. Snapchat refused the offer. 3. Paper has just launched Facebook’s latest creation is a newspaper-style app called Paper. Paper includes photos, friend updates, and shared articles in an image-heavy, uncluttered way. The stories are picked and ordered based largely on how much they are shared and “liked” on Facebook, with a team of human editors ensuring that the content comes from the right sources. “Paper makes storytelling more beautiful with an immersive design and full-screen, distraction-free layouts,” Facebook states. 4. Zuckerberg and Facebook are all about goals Zuckerberg told Bloomberg he has lots of goals for Facebook and for himself personally. Facebook’s founder has in previous years vowed to learn Mandarin (2010), to eat only animals he slaughtered himself (2011), and to meet someone new each day (2013). For 2014 he intends to write at least one well-considered thank-you note every day, via email or handwritten letter. “It’s important for me, because I’m a really critical person,” he says. “I always kind of see how I want things to be better, and I’m generally not happy with how things are, or the level of service that we’re providing for people, or the quality of the teams that we built. But if you look at this objectively, we’re doing so well on so many of these things. I think it’s important to have gratitude for that.” Story continues on page 2. Please click below. 5. Voting is the most talked about topic on Facebook The 10 most talked about topics on Facebook in 2013 by Australian users were ‘vote’, Kate Middleton, cricket, Kevin Rudd, Grand Final, Election, GST, Lions, Tony Abbott and Big Brother. 6. It’s set to compete with Google Over the next five years, Zuckerberg wants Facebook to become more intuitive and to solve problems that in some cases users don’t even know they have. He wants to target the 5% and 10% of posts on Facebook where users pose questions to their friends, such as requests for the names for a good local dentist, or the best Indian restaurant. Zuckerberg told Bloomberg the social network should do better at harvesting all that data to provide answers. A domain which is traditionally the preserve of search giant Google. 7. Users are a devoted bunch Facebook users generally log in to the social network regularly and stay for long periods of time. The percentage of Facebook users that log in once a day is now 76% while the average time spent on Facebook per user per month is 8.3 hours. 8. Facebook is targeting developing countries Facebook is targeting developing countries through the formation of a group called Internet.org with six other technology companies, including Samsung, Qualcomm and Ericsson. The group is looking at simplifying their services so they can be delivered more economically over primitive wireless networks and tapped into using cheaper phones. Zuckerberg says more users in undeveloped countries will subscribe to mobile services for the opportunity to use Facebook, which in turn makes it more economical for mobile operators to improve their wireless networks to support higher-bandwidth services such as online education and banking. He has described early tests as “promising”. 9. Doomsayers warn Facebook could go into rapid decline Researchers from Princeton University published a paper earlier this year suggesting Facebook might lose 80% of its users by 2017 entering a period of “rapid decline”. “The application of disease-like dynamics to [online social network] adoption follows intuitively, since users typically join OSNs because their friends have already joined,” says the study, which is awaiting peer review. Facebook has hit back at the work as “incredibly speculative” and used its own data engineers to use the same methods of "scholarly scholarliness" to prove that Princeton itself was on the brink of extinction. 10. It’s king of social referred traffic Facebook is still the king for social referred traffic, according to Adobe’s most recent social intelligence report. But Facebook is slowly losing ground to other social media, in particular Twitter and Pinterest.
Australian technology start-up Ninja Blocks set out to raise $115,000 for their new Sphere device through crowdfunding. By the end of the campaign they’d smashed their target more than six-fold and raised $702,937 on Kickstarter. “It was just a demonstration of people wanting this kind of product and looking quite sexy,” says Ninja Blocks chief executive Daniel Friedman, adding that the campaign video also included compelling case studies of how it can be used. Ninja Blocks are small, cloud-enabled computers that can sense their environment by receiving input from a variety of sensors and can alter their surroundings by controlling appliances like lights, heaters and air conditioners. “We didn’t want to build something we thought the market might have wanted and it to be a flop,” Friedman says. The new Sphere device offers gesture control, in-home location for items like mobile phones or pets and can connect to almost any device. “This doesn’t really exist anywhere in the market,” Friedman, who was one of StartupSmart’s Future Makers for 2013, says. “People see the benefit and are excited by it,” he says of the Kickstarter campaign reaction. The next step for Ninja Blocks is to start gearing up for production and building the Sphere. “We’re still a relatively small company and it’s quite a lot of work to spin out a hardware product and do next day shipping,” Friedman says. He urged other hardware makers considering crowdfunding campaigns to do their research before launching “so they don’t overpromise”. Ninja Blocks also had the benefit of conducting a successful crowdfunding campaign prior to the Sphere campaign.
The new year has opened with some significant breakthroughs for those preparing for bitcoin to hit the mainstream, with major international game developer Zynga announcing a partnership with BitPay that will enable people to use bitcoins while playing games such as the phenomenally successful Farmville series. The trial has been heralded as a breakthrough for BitPay, but also bitcoin more generally. Closer to home, two Australian start-ups are exploring the potential of bitcoin payments for smaller and more common payments such as parking and bills. Parkhound, a start-up that enables the leasing and sharing of parking permits and spaces took its first payment in bitcoin last month. Co-founder Robert Crocitti says the innovative step was an unanticipated step forward for his team. “The first bitcoin payment wasn’t actually our decision. We’re just a start-up so we’re happy to try and accommodate any customer that comes our way. Many are more innovative than us, so we took our first payment in bitcoin when one of them asked us if we could,” Crocitti says. He adds it was lucky they were using the Shopify payment system, which already had the built-in capacity to take digital currency payments. As part of the growing group of companies beginning to translate bitcoin from the first adopters to more mainstream consumers, Crocitti says 2014 is likely to be the breakthrough year. “Bitcoin has gained a lot of prominence in the last two years, but I think the big clincher will be when it’s available for people to pay using their mobile phones through NFC or some other kind of chip technology so you can use bitcoin via your phone at bricks-and-mortar store. This is likely to happen this year with a range of apps,” Crocitti says. One Melbourne-based start-up is already bridging the gap directly, enabling Australians to pay their electricity and water bills with bitcoin. BitBillPay.com.au has processed over $7,000 worth of bills already. The payments are made via CoinJar, an exchange and payment system that recently received $500,000 in investment funding from Blackbird Ventures. Ryan Zhou, co-founder of CoinJar and founder of BitBillPay.com.au explains on the latter’s website he isn’t making any money from the service, and outlines the potential he sees for Bitcoin. “I deeply believe that the true potential of Bitcoin lies on its intrinsic ability to provide a solid digital-native financial foundation to incrementally improve how people use money. It has never been easier to positively change the status quo of payments today with the power of a widely accepted decentralised currency,” Zhou says. Bitcoin is set to be one of the biggest start-up stories of 2014, with over 140 bitcoin start-ups listed on investment information aggregator AngelList and several local start-ups beginning to gather momentum. A range of Australian start-ups are working out ways to ride the bitcoin wave, including booming BTC.sx which announced in November it had processed over $14 million in transactions in six months, and Slingshot accelerator graduate World BX. Bitcoin exchange World BX founder Nick Trkulja told StartupSmart in October that the digital currency’s growing respectability boded well for its future uptake. “This is an exciting space to be in right now. Over the next year in particular, there will be a big shift in the ecosystem as it moves beyond the early adopters,” Trkulja said. “The Bitcoin revolution was started online, and online retailers will increasingly accept it. This has helped to fuel its growth and spike the price, and we’re beginning to see bricks and mortar retailers follow.” Evan Lucas, a market strategist at IG Markets, an investment and trading company that trades in a variety of assets including bitcoin, told StartupSmart in August that regulation will be essential for the digital currency to become mainstream. “If it wants to become mainstream, it is going to have to subject itself to regulation. That will be a very interesting situation for those involved to subject themselves to that kind of scrutiny,” Lucas says. “It’ll certainly be growing in its reach more and more as people start to look at it, but it’s still a very infant currency and the concern that a lot of analysts have about bitcoin is its regulation.”
With technology always and rapidly evolving, it can be tough for small businesses to keep up. While nearly all small and medium-sized businesses in Australia have a computer, according to Sensis’s 2013 e-Business Report, more are acquiring laptops and tablet devices, how effectively they use that technology can influence how successful they’ll be. As Australians increasingly access the internet on mobile devices such as smartphones and tablets, businesses should factor that into their digital planning for 2014, says Sensis’s advertiser insights manager Christena Singh. “When people come in (to a business website) on a mobile device they need to get a mobile experience,” Singh says, warning that if a customer doesn’t get a mobile experience they will probably go to another business that does. Australians using the internet on their mobile phones continued to grow over the past year at 68%, up from 58% last year, and half of Australians accessed the internet on a tablet, the Sensis report says. Here, Singh shares the top five technology trends small businesses should prepare for in 2014: 1. Making sure websites are optimised for mobile With more and more people using mobile devices such as tablets and smartphones to access the internet, it’s become essential for businesses to ensure their web presence appears and functions well on those screens. It’s called “mobile optimisation”. “The proportion of small to medium enterprises with a website that’s optimised for mobile has gone from 5% two years ago to 17% this year,” Singh says. She says start-ups and small businesses should make ensuring their websites are optimised for mobile devices number one on their list of things to do in 2014. Singh says optimised sites could include buttons that use a smartphone’s maps function to locate the business or a button to dial its phone number. 2. Consider the devices that customers use to access a business’s website Singh says if a business is targeting a population demographic that uses tablet devices then they should consider putting in place features that cater to that audience. She says businesses may look at having apps created that work on particular devices, adding that 5% of businesses have an app and 13% are looking at having one next year. 3. Cloud Software and data storage in the cloud is becoming increasingly accessible and attractive for small businesses that don’t want to pay the costs of expensive hardware or computer program tools. “It (the cloud) can save you costs and give businesses access to any number of utilities without purchasing them outright,” Singh says. She says businesses could use the cloud to access software such as word processing and store files which can be accessed from almost any location. 4. Considering innovative technology such as apps, wearable technology Singh suggests businesses should consider what technology is gaining traction with consumers and investigate ways it can be applied in their own business. She says wearable technology is an area that’s emerging as popular with consumers, noting that Google Glass, Google’s wearable computer, is a device that’s eagerly anticipated. “Look at technologies and how they might be able to draw people into your business,” Singh says. She says a tourism-based business may look at using wearable technology in some way to enhance a customer’s experience. Location-based technology is also innovative and could be used in stock handling, Singh says. “Taking a leaf out of the consumer book and seeing how some of the new technology can give you benefits and how you can flexibly do business,” she says. 5. Strategy Singh says one of the most important things start-ups and small businesses need to have when adopting new technologies is to have a strategy to back up what they’re doing with it. “Small businesses are spending on average $15,800 on technology. That’s quite a lot of money for business to be spending,” she says, noting that only about 19% of businesses had a digital strategy. Singh says a business may spend money and time on social media but without a strategy behind it, that money and time could be wasted. “There should be strategies in terms of website presence, social media and how they work and develop leads,” she says.
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.
Yesterday, your humble correspondent looked at four key trends in the smartphone industry that every mobile app developer should be aware of. While the figures can be dry, the information is critical, whether you’re planning your start-up or looking for big numbers when you are strategising your future direction. Likewise, coming up with a few hard numbers can be useful if you’re pitching for capital. So, without further ado, here are four more essential trends emerging from the mobile sector: 1. Android dominates over Apple in most other major markets – except Japan Okay, so Android is strong in the US and Australia, but what about the rest of the world? In terms of market share the most competitive major market against Android is Japan. In Japan, Apple claims 47.4% of the market, compared to Android only a notch higher at 48.6%. Across Europe, the story is very different, with Apple claiming 27.5% market share in the UK, compared to Android’s 56.3%. The situation is worse elsewhere in Europe, with Apple trailing 17.5% to 63.3% in France, 14.4% to 71.6% in Italy, 9.5% to 78.7% in Germany and claiming just 2.2% to 90.8% in Spain. As for China, Android’s market share is now at 72.4%, compared to a respectable 20.8% for Apple. And there are a few very good reasons why you should pay attention to China when it comes to mobiles. 2. The world’s biggest smartphone market is China – and it’s huge! Australia’s population stands somewhere around 23 million. The total population of the US is around 310 million. This year, IDC anticipates China’s smartphone market will hit 360 million people. And that’s not including all the people still using older feature phones. Next year, it is projected to hit around 450 million, including around 120 million users on 4G. Now here’s an astounding statistic. The worldwide smartphone market reached 216.2 million units during the first quarter of 2013 according to IDC figures, while China’s shipments stood at 75.28 million. That means China accounted for around one-third (34.8%) of the worldwide market for smartphones. And there’s still a lot more room for growth. The largest carrier in China – China Mobile – is estimated to have around 700 million mobile phone subscribers, including both smartphones and older phones. Kinda makes Australia and New Zealand’s 2.6 million mobile phones per quarter look pathetic in comparison, doesn’t it? 3. Mobile apps are now a multi-billion dollar industry – and growing If you thought China’s mobile market had some big numbers, take a look at the size of the worldwide app industry. According to Gartner, last year there were 63 billion apps downloaded worldwide, including 57.3 billion free apps and 6.6 billion paid apps. Total revenue from apps hit a massive $US18 billion. If you keep in mind that the total population of the Earth is estimated as being somewhere between 6 billion and 7 billion, a number like 6.6 billion paid app downloads starts sounding quite astounding – let alone 63 billion total downloads. This year is on track to be even bigger. Worldwide, we’re on track for a total of 102 billion app downloads, with 92.8 billion free apps downloaded and 9.9 billion paid apps. Gartner predicts those numbers are only going to get bigger. In the year 2017, they anticipate a total of 268 billion apps will be downloaded. That’s right, two hundred and sixty-eight billion apps. Of those, 253 billion will be free and 14 billion will be paid. 4. Most Android users now use a recent version One of the issues when it comes to developing for Android is how much you support legacy versions. Well, the answer is increasingly clear: Don’t bother! According to Google, 48.6% of all devices running Android are now powered by JellyBean (that’s Android 4.1/4.2/4.3). A further 20.6% run the previous version, 4.0 Ice Cream Sandwich, with 69.2% in total running a recent version of Android. Meanwhile 0.1% of the Android user base is hanging on to 1.6 Donut, 2.1 Eclair or 3.0 Honeycomb. The only old versions to have significant user bases anymore are 2.2 Froyo with 2.2%, and 2.3 Gingerbread on 28.5%. So sure, as far as Android fragmentation exists, much of it is over obsolete versions no-one uses anymore. Time to cash in! The global appetite for apps is huge – and growing. And contrary to popular myth, most of it isn’t in countries where English is the first language. Now, are you going to let this opportunity pass you by? Or are you going to cash in? Get it done – on mobile! Click here to read part one.