Apple, Cannibalization

In my previous entry I speculated that the recent rumors that Apple was going to switch at least their laptops to ARM processors might be rooted in leaks of a new product offering that would exist between the iPad and the MacBook Air. To be clear, this speculation is based on no outside information and the odds of it being true are very very small. Even so, I do like the idea of a slightly beefed up iPad with an easily detachable keyboard for around $700 base price. I'd wouldn't be surprised if Apples clever design and engineering teams could create such a device in a form factor only slightly bigger than the iPad 1.

You'd need a touch pad on the keyboard, but that shouldn't be a problem. Maintaining the same size as the iPad wold lead to a somewhat cramped keyboard but for casual to intermediate complexity tasks I think it would work well enough.

Of course you can already attach an external Bluetooth keyboard to an iPad. Carrying around even a small keyboard is cumbersome though and not as convenient as an integrated solution would be.

So, imagine what would be possible if you had an iPad with keyboard/touchpad combo. You might have to remotely connect to a more full featured computer to do some of your more esoteric work but for a majority of day to day tasks you would have a very capable platform. The biggest limitation would be the size of the screen and even that could be addressed by versions with larger screens. Lets call such a device an "iKey"

Assume for a minute that an iKey would be as cool and successful as my initial geeky instincts tell me. Is there some reason why Apple wouldn't produce something like this? In short, yes.

A very important consideration in product development is cannibalization. The basic idea is that new products may impact the sales of existing products if their is substantial overlap in their capabilities. This is particularly true if the new product offers a price advantage over the existing product or products. Cannibalizing your competitors sales might or might not be good. If you're entering a new market segment and can build a product that is likely to maintain your desired margins then cannibalizing sales from existing players is a very good thing. This is not generally true if you're contemplating a product for a market that you already have a presence in that is likely to steal sales from your existing offerings. There are circumstances under which this is done, but based on my understanding it's rare. At one time Starbucks was opening so many new outlets that they were starting to steal sales from themselves. This was deemed OK since the thought was that it was better for them to steal sales from themselves than to have others do so. Keep in mind that Starbucks eventually closed a lot of under performing locations.

So, the potential strength of an iKey like device is also it's weakness. If it could provide a significant percentage of the user experience that the MacBook Air provides at a lower cost then Apple would be unlikely to bring such a product to market unless they could sell enough additional units to make up for revenues lost on sales reductions of the Air and other Apple products. This may seem counter intuitive if you're a tech savvy consumer hungry for neat gadgets but it makes good business sense.

Ideally new products need to either slot in nicely between existing products or replace aging offerings. The base MacBook Air retails for $999 with 64GB of storage and 11 inch screen. An iKey would either need to fit between the iPad and the MacBook Air or replace one of the two. While it's possible that Apple could incorporate a keyboard into the iPad line it seems more likely to me that they'd either wedge in such a product between the iPad & MacBook Air or replace the Air.

As I said above, this is all just speculation and tech geek wishful thinking on my part. It is fun to try to figure out where  technology is going to take us in the future and speculate on what companies like Apple might be doing in regards to future product offerings. It helps to have an MBA when doing this but it doesn't make me omniscient.

Image by rafm0913 via Flickr

Related Articles

• Apple/ARM/Laptops (Short Take) (emkey1.blogspot.com)
• Apple To Convert To ARM Processors For Non Mobile Devices? (emkey1.blogspot.com)
• iPad insufficient for travel (notratched.net)
• Clamcase Turns An iPad Into A Clunky Laptop Wannabe [Review] (cultofmac.com)

Apple/ARM/Laptops (Short Take)

In my entry yesterday I talked about the recent rumors that Apple is switching to ARM in their non mobile devices. In general I was dismissive, at least in the short term. The latest reports seem to focus in on laptops. Laptops are an interesting case but only if we're careful in our definition. Laptop can currently be applied to anything from a netbook weighing under a pound all the way up to a desktop replacement that weigh ten pounds or more. Performance characteristics vary almost as much.

Apple's laptop range isn't quite that broad but the difference between the MacBook Air and MacBook Pro line are substantial. Could Apple be considering a move to ARM for the Air? In short, I very much doubt it. Doing so would make the Air a slightly larger iPad with a keyboard and that falls far short of what you get with the current Air.

Of course a slightly larger iPad with a keyboard wouldn't necessarily be a bad idea. I'd think very seriously about buying one, particularly if the keyboard were detachable. The nice thing about such a device is it would be light, ultra portable and capable of doing 90% of the work I want/need to do. I'd still want a full featured laptop for the other 10% though.

Perhaps Apple is considering creating a new product line that sits between the iPad and the MacBook Air? Something along those lines might explain the origin of these rumors. Assuming they aren't completely made up.

Image via Wikipedia

Apple To Convert To ARM Processors For Non Mobile Devices?

Earlier this week there were reports that Intel was working hard to get Apple to use some of Intel's fabrication capacity. Now I'm reading that Apple is going to switch all their devices, including laptops, desktops and servers over to ARM based processors ASAP. Could these two stories/rumors be related and is either credible?

Apple made the transition from PowerPC to Intel based processors in their Mac line in January of 2006. This move was hard on many of the Apple faithful who had been extolling the superiority of the PowerPC based Macs for years. While the PowerPC is a much more elegant design it was also rapidly falling behind Intel's X86 based architecture in many areas. Apple has seen substantial sales growth since this transition for several reasons, not the least of which was that porting code from Windows based PC's to Apple MacOS based computers running Intel processors was much easier. Keep that in mind when evaluating the chances that Apple will switch to ARM.  ARM is a great architecture in the mobile space, it is not ready for prime time in the desktop and server market at this time.

It is true that Microsoft has announced support for ARM in Windows 8, but so far as I can tell they haven't uttered a single word that would indicate they are going to drop support for X86 based processors. Given this my initial reaction to the rumor was to guffaw. Then I did a bit of research and decided a bemused grin might be more appropriate response.

The primary reason I didn't initially put any credence in this rumor is that I thought ARM was missing two pieces of functionality that are vital in non mobile computing platforms.

1. Support for Virtualization
2. 64 bit instructions set

It turns out that item one is in fact a part of the ARM Cortex A-15 architecture announced last September and that item number two is currently being worked on by NVidia as part of their project Denver. 

So far as I can tell nobody has announced an implementation of ARM that supports both virtualization and a 64 bit architecture but it seems credible that such a processor could be available in the next few years.

Why are these features important? Processors that provide virtualization functionality can be efficiently time sliced into multiple virtual processors. This capability provides two main advantages. In the server space processors historically ran at 10% or less average utilization. Time slicing the processors in a server allows companies to fully utilize the hardware they've invested in because they can run as many virtual servers as they need to in order to push the utilization of their available resource as close to 100% as they want. Virtualization can also be used to create a "sandbox" that can run codes more securely by isolating them in their own virtual machine. 

In the case of 64 bit processors you gain two things. The ability to process data twice as fast and the ability to utilize much larger amounts of addressable main memory which is especially important to servers and high end workstations.

So what about the rumors that Intel wants to put some of their foundry capacity to work for Apple? That makes a lot of sense. I'm not an engineer and the kinds of technologies used to fabricate processors and other silicon based products fall well outside of my day job but two things are clear. One, Apple is selling a lot of hardware and Intel would no doubt love to get a bit more of the revenues that are being generated by those sales. The second important consideration is that Intel arguably has the best semiconductor process technology in the world. Their recent announcement of a viable commercial process to create 3D transistors is going to allow for significant reductions in power consumption and increases in speed. Industry analysts believe Intel is two years or more ahead of their competition. So, if you're Apple why wouldn't you be interested in working with Intel if the price is right? Ironically this may mean Intel ends up producing ARM architecture processors. 

This wouldn't be Intel's first foray into manufacturing silicon for others. In late 2010 they announced a partnership with startup Achronix to manufacture Field Programmable Gate Arrays using Intel's 22nm process.   

So in summary, while Apple is not going to switch to ARM in the next two years they might just be able to make that leap some day in the not too distant future and when they do it is possible that Intel will be making those processors. Sound a little far fetched? Perhaps, but if ARM continues to evolve and move up market Intel's going to have a lot of excess capacity and shrinking revenues. Smart companies adapt in those kinds of scenarios.

Image via Wikipedia

Related Articles

• Rumor: Apple To Replace Intel Chips With ARM Processors On Laptops? (macstories.net)
• Intel PC hegemony facing ARMy attack (go.theregister.com)
• Is Intel going to build Apple's A6 chips? (9to5mac.com)
• Intel 3-D Transistor + Apple = Mobility Dynamite (informationweek.com)
• Intel's 3D Transistor: Why It Matters (pcworld.com)

RIM/Microsoft (Short Take)

Blackberry maker Research In Motion continues to make moves designed to reverse their recent setbacks and move the company in a positive direction; the most recent being an announcement that they'll be switching from Google to Microsoft's Bing as the default search engine on their phones and devices.

Based on my reading it seems clear that Microsoft is paying a hefty sum of money for this change. Clearly Microsoft is working hard to build a presence in the mobile space. Their partnership with Nokia was apparently just the opening salvo of a new offensive. With the Nokia deal they get the potential for substantial exposure and market penetration of their windows phone 7 operating system. Their RIM deal doesn't go that far but it does give them first dibs on a substantial additional chunk of the mobile search space going forward.

This deal seems to make good business sense from RIM's perspective. They get cash which is never a bad thing and likely other benefits as well.

Microsoft now has the potential to make substantial inroads into Google's search engine dominance. Given the probable continued growth in this space I don't believe Google will see much of an impact revenue wise in the short to midterm. That could change a couple of years out if things work out the way that Microsoft is no doubt hoping.

On a side note, it always kind of amuses me when industry pundits try to pick a winner in these scenarios. Both companies win assuming both sides are competent and I see no reason to assume otherwise in this case. The point of a partnership isn't to cheat your partner, it's to gain an advantage in the marketplace that will be mutually beneficial. The loser in this deal is very likely going to be Google.

Image via Wikipedia

Related Articles

• Microsoft, BlackBerry Team Up to Battle Google Search (wired.com)
• RIM taps Microsoft Bing for phone and tablet search (go.theregister.com)

RIM To Support iPhone, Android Platforms (Short Take)

In my previous entry I talked primarily about Research In Motion and their eroding market share. I concluded that their smart phone platform was no longer an asset and that it might be wise for them focus on their current competitive advantages which from my perspective are security and infrastructure. Infrastructure in this case means their Blackberry Enterprise Server software which amongst other things provides a gateway between Microsoft's Exchange platform and Blackberry phones.

BES is a significant differentiator for RIM in the area of smartphones and tablets. Yesterday RIM announced that they are in the process of acquiring ubitexx, a company that owns technology that RIM will be able to use to rapidly add the capability to provide much of the functionality of BES to Android and iOS based devices.

RIM said the single web-based console is being designed to provide IT administrators with the ability to distribute software and manage policies, inventory, security and services for BlackBerry devices, as well as other mobile devices. IT administrators will be able to manage devices over-the-air, including activating devices, distributing software and applications, locking or wiping devices, enforcing and resetting device passwords, setting IT policies, and managing optional mobile applications for end users.

The snipped quoted above is from this article.

This is a smart move on RIM’s part. Many companies when faced with a similar scenario would have chosen to continue to support only their own products. From a business perspective this doesn’t always make sense, but internal loyalties and self-interest often run deep. While it is true that RIM is arguably undermining a competitive strength of their smartphone line by adding support for Android & iOS to BES they are also building on a strong product offering and providing themselves with an avenue for future revenue growth. They are essentially hedging their bets in case they continue to have difficulty competing in the smartphone market place.


Image via CrunchBase

Related Articles

• RIM purchase to add iOS, Android management features (macworld.com)
• BlackBerry Enterprise Server to Manage Android and iOS Devices (intomobile.com)

Smartphones, RIM, Android & Apple

Research in Motion is starting to get some bad press in financial circles. The maker of the popular Blackberry line of smartphones is getting significant pressure from two different competitors and this is starting to make wall street very nervous.

The Android platform has continued to see significant growth. An article I read recently quoted Nielsen research as saying that Android market share has more than doubled from 23% to 50% since October of 2010. In the meantime RIM's share has gone down from 27% to 15% and Apple has essentially tread water with a modest drop from 28% to 25%. While this is great news if you're Google it also needs to be put in perspective. In the first quarter of 2011 alone world wide mobile phone demand grew 20% with most of that growth coming in the smartphone sector. So Apple saw some growth while RIM's reduction in units shipped was most likely modest. It's also important to keep in mind that the Verizon iPhone didn't become available until after that data was gathered.

The second competitor RIM has to worry about is of course Apple. Blackberry phones used to be cool. You'd see pictures of celebrities carrying them all the time. RIM was really ahead of their time in terms of putting together a compelling platform that combined ease of use with enough functionality to get people excited. If the market had remained static they would still be in great shape. If there is one thing you can count on though it's that people and companies run to where the money is. Given how lucrative mobile phones were to RIM it was inevitable that new competitors would enter the fray. 

One of the difficulties RIM is having is centered on the fact that two very strong, and very different competitors emerged. The iOS platform is offered by a single vendor, Apple. In regards to phones Apple is generally offering only a small number of variants on their base platform. Right now you have the 4G and the 3GS.  This limited number of choices makes it relatively simple for RIM to create products that either compete with Apple’s iPhones or to carve out niches that Apple is not serving well. Apple also has reasonably long product life cycles with a year or more between releases. For these reasons I don’t view Apple as the largest threat to RIM.

The Android platform on the other hand is used by many different vendors on hundreds of different phones. There is no way RIM can come up with a coherent strategy to compete with Android. If there is a market hole to be filled than the odds are good that some vendor has an Android based phone available that fills it. Of course all those choices do lead to fragmentation as I've discussed before but that hasn’t been a significant issue to consumers so far and I don’t believe it will be.

So RIM is essentially being beaten with precision by Apple and by way of a thousand cuts by Android. This is not an enviable position to be in.

RIM’s strength still lies in the area of data security. If you’re a large company or an individual that cares about the confidentiality of information flow than RIM is your only choice. The fact that some foreign governments are pressuring RIM to break that security within their borders is very telling.

So, on the plus side the market for smartphones is still growing rapidly which is helping shield RIM a bit from the significant inroads that the Apple iOS and Google Android platforms are continuing to make. The fact that their unit sales are not increasing at nearly the same pace as their competitors is very troubling but not fatal in the short to midterm. The question is, can they bring out a compelling set of product offerings quickly enough to start reversing their market share erosion?

From my perspective a compelling match up would be a RIM smart phone that leveraged Android and the security infrastructure and operational excellence the company has developed over the past decade plus.  At this point RIM’s OS is costing them a lot of money to develop and support and is rapidly becoming a disadvantage. They are going to have to lose a lot more market share before they even consider a shift in strategy this significant though.

Image by Getty Images via @daylife

Related Articles

• RIM's Reduced Forecast Darkens Outlook (informationweek.com)
• RIM cuts expectations amid weak BlackBerry sales (news.cnet.com)
• Anatomy of failure: Mobile flops from RIM, Microsoft, and Nokia (macworld.com)
• RIM Collapse Beginning? (mobile.slashdot.org)

The Demise & Repair Of A Kindle 3

Through a series of unfortunate events my 3G Kindle suffered an untimely demise this past weekend. Without going into too much detail lets just say that sitting on a Kindle is not recommended. One other piece of advice is to invest in a case and use it. I'd gotten in the habit of carrying mine around "naked" as it was more convenient.Until I sat on it any way.


After an hour of searching on line it became clear that replacement displays are not easy to come by. I did find one place that would sell the display for $80 which wouldn't have been horrible given the $190 price tag of the 3G Kindle but they also insisted on doing the repair themselves and wanted another $80 for that. I didn't bother to find out if postage both ways was included.

The Wireless only Kindle is $140, so I decided to buy one hoping that I could use it to repair the broken one. I'll get into some more detail on that in a moment but first a picture.

Broken display on the left, new display on the right

I'd purchased the white Kindle 3 originally. The wireless unit is graphite as I prefer the way it looks.

In the picture above you can see the back sides of the screens for both my original white Kindle and the new graphite one. It's easy to see the cracks on the old Kindle display. They branch out from the right hand side. That isn't a picture in the graphite screen BTW, it's just the reflection of our dining room lights. One thing to note is that the displays appear to be glued in. Given how fragile they are I don't recommend trying to remove one.

FYI, You can click on any of the pictures in this entry to get a larger version.

My original idea was to swap the SIM card and 3G modem from the old Kindle to the newone. I could tell that the logic board on my original Kindle was fine as the lower left portion of the display still kind of worked but I wasn't sure if the logic board was the same between the 3G and wireless Kindles and nothing I could find on line answered that question. It turns out that they are different as the following picture shows.

3G on the left, Wireless only on the right

If you look in the upper right corner you can see what I'm talking about. The 3G Kindle; which is on the left has a cellular modem that plugs into a mini PCI-E slot. The wireless only version doesn't have the slot or the SIM card which is just below the cellular modem.

I'd taken apart the broken Kindle before ordering the new one so I knew what it looked like inside.  I wasn't totally surprised to find out that this wasn't going to be possible to just swap the SIM and modem so I went with my backup plan which was to swap the guts of my old Kindle into the new case. I did a little bit of mixing of parts in the process. I ended up keeping the white keyboard for the repaired unit.

Below you can see the final product on the right with the leftover parts on the left.

Mirror Images, Kind of

The "new" unit is working perfectly with my old logic board and keyboard. It's not hard to see the damage to the display on the left in this view. The E-Ink screen didn't show any signs of damage right after I sat on it. It was when I powered it up that the problem became obvious.

The only serious pain in this process was sitting on my Kindle and the expense of the new one. Getting to pull both the old and the new unit apart, find out what was inside and put everything back together again didn't make up for that but it was a bit of a consolation and not difficult. You can almost pry apart the Kindle 3 with your fingernails and a small screw driver makes it easy. After that it's just a matter of removing a bunch of small screws.

This probably invalidated my warranty. I'm OK with that.  I have a working Kindle along with a spare logic board, battery, keyboard and case. That is a big improvement over what I had prior to the purchase of the second unit.