Why will iPhone 4S be a success?

I tend to be critical and try to look at things from different viewpoints. It's always good to think "out of the box" and not get influenced by what you are reading in the news, in websites or listening on TV. That is the reason why while there are many people feeling let down by yesterday's Apple presentation, I think they have made a good move.

The last thing I saw yesterday before having dinner and being "disconnected" from the world was that Apple's stock was down 3,3% in NASDAQ. Articles had started to appear here and there talking about the disappointment of fans. However, my image of the day was this one (we'll get back to it later):

(with 2 year contracts)

Lets make a quick revision of the main features of the new iPhone:

Feature 1: A5 Processor
The iPhone 4S features a A5 dual-core 1GHz processor designed by Apple. The same processor you can find in the iPad 2. According to Apple it will be twice as fast as the current iPhone 4 and seven times faster when gaming. However, this won't affect battery as it, in theory, will be able to provide 8hours of talk time over 3G.

Feature 2: Antennas + Connectivity
After all the problems the antenna gave in the iPhone 4, the famous "Antennagate", Apple has revised the antenna setup in the iPhone 4S. It now switches between two antennas, to transmit and receive, and this gives better call quality and faster data, reaching 5.8 and 14.4 mbps upload and download. It's not LTE but sounds pretty good.
The iPhone is now also a "world phone", unifying CDMA and GSM in a single device, allowing you to travel anywhere with the same handset.

Feature 3: Camera (8mp + HD)
The camera system has been revised, introducing a state-of-the-art 8 megapixel camera for phones, higher sharpness, better color accuracy, better illumination and faster, much faster to setup and take pictures.
This same camera is also capable of 1080p HD video recording with video image stabilization and temporal noise reduction. Quite a nice camera.

Feature 4: iOS5
Of course, iPhone 4S will run iOS5, the new operating system by Apple. It's not something new and it's not groundbreaking, but will add some nice features like a RSS reader in Safari, being PC Free, iMessage (similar to BB Messenger), improvements to Mail, etc...

Feature 5: Siri
But the most innovative feature the iPhone 4S adds is Siri. Siri is your voice assistant. It is designed to give information and follow commands. You can check the weather, ask for a contact address, get directions... all buy just asking Siri. It has a female voice (that can't be changed) and will launch in English, French and German, with more languages to follow. We will have to see how well it responds and how it evolves, but it sounds as a good addition.

Seen as a whole it is a good upgrade for the iPhone, but its not the iPhone 5 many people were expecting, and that is why we had all the disappointment floating around yesterday.

Killer-feature: Pricing
But lets get back to the pricing. The features we have been talking about may not be impressive, it may put the iPhone on-par or slightly ahead of several other high-end devices in the market, but the most important move Apple made yesterday was setting up very competitive prices.

You don't need a low-end and a high-end device when you have iPhone 3GS, 4 and 4S in stock, what you need is to set the prices straight. the iPhone 4 is still one of the best handsets in the market and the iPhone 3GS also beats most smartphones. With the pricing Apple is setting there is no reason for many people to get onto the iPhone train as the main barrier before, the price, has disappeared.

Why get a low-end nokia or LG or whatever when you can have an iPhone 3GS for free? It is a powerful phone with a nice hardware and gives you access to the whole AppStore. You may not be able to record videos in HD, but you would definitely have a better handset than 90% of those available in your carrier.

Amazon presented the Kindle Fire ten days ago. It isn't the best piece of hardware of the market but the pricing is competitive and the experience it delivers is better than any other tablet (leaving aside iPad). They are getting 50.000 pre-orders per day and it seems they have crushed all android-tablet competitors.

Apple seems to be attacking now a segment of the market it hadn't bother with before: mid and low end. They are the leaders in high-end smartphones even though, as a whole, Android seems to be passing them, but now they are putting their phones in the hands of kids, teenagers and more price-concerned users. In a single item you have a gaming platform with thousands of games (some free, many cheap), an iPod and a mobile phone.... what else do you need?

Amazon's Kindle Fire

Techcrunch put it plain simple: Amazon Just Won the Android Tablet Wars With Kindle Fire

The first thing that came to my mind when asked about the new Amazon tablet was: cheap. Its bloody cheap. I haven't compared it spec by spec with other tablets (we'll get hundreds of those reviews in a couple of days all around the web) but we have reached a point where hardware is a commodity, the key features are not in the hardware spec of these kind of devices (as Apple knows very well).

Amazon is offering us a new experience. Its not a product, its an experience. Of all my MBA professors and lessons, the ones I always liked the most were the Marketing ones by Fernando Botella, and he always underlined the importance of experience vs product. Apple is the leader in this, and Amazon follows closely behind.

What are you getting with the Kindle Fire? We are getting an experience, something that works perfectly out of the box with the whole environment to make the best of it in a matter of minutes, be it video, music or books/comics/magazines. We get:

• Access to the kindle bookstore (millions of books)
• Access to hundreds of full color magazines
• Access to 100.000 movies & TV shows
• Access to the Amazon App store, full of Android Apps & games
• Access to 17 million songs
• Free cloud storage

And...

Beautifully simple and easy to use (thats what they say)

You may say that with this or that android tablet you have access to an App store and books and whatever... but in the end, what you really want is something your 3year old kid can use because it's as simple as 1-2-3 and that gives you all in a single package. And for only $199!

The iPad Killer?

Is it the iPad-killer? No, of course not. And I don't think Amazon has designed the strategy around it to fight the iPad. Amazon is, at the moment, in a different war, the war that Techcrunch says they've won today.

Today the war was about Android tablets, and Amazon has simply cleared the way to attempt the assault on the iPad. Today Amazon has stated its intentions to Apple: "Hey Mr. Apple, I'm here, I have a good product with  all the power of my online store, cloud, services, etc... I've crushed the other Androids with a single blow and now I'll come for you". 

The rumor is that early 2012 there will be a new Kindle Fire with a bigger, ten inch, screen and prepared for the fight with the iPad. According to this rumor the current Kindle Fire will only be a first step that will get the wheel spinning around, getting speed for the "real" launch. Seems a reasonable strategy and I hope it is true because it will be good for all of us. Competition always is.

Telefónica Digital - A pity (for Spain)

A couple of weeks ago we got the news that César Alierta (Telefónica's Chairman) had decided to restructure the company (Article in El País in Spanish). Telefónica became structured in 4 main divisions: Latam & Europe, General Resources & Digital.

Yesterday the news where that Telefónica had made public the names of the second layer of managment, the people below the heads of the four divisions. (El Economista in Spanish). I was quite happy to see an old school friend there, and also to see a spaniard as head of Product Development and Innovation under Mr. Key.

I haven't seen any reactions yet to yesterday's news. Two weeks ago the first thing I read in twitter was a Spanish ex-minister asking if we should be worried about Telefónica moving its HQ out of Spain. Typical comment by someone that just wants to put the public opinion against Telefónica and Alierta. It is true that there is always that risk, but for the time being I don't think it is realistic to consider it.

However, something dramatic for Spain happened. Almost as important in the long term as having the HQ of Telefónica moved out of Madrid: the new Digital division, that is in charge of all digital services, Internet and innovation (that is, everything that gives money to the company apart from voice, basically) will be headquartered in London and under Matthew Key.

What does this mean? It means that all new revenue streams will come from UK. All innovation, all new ideas will controlled by UK. All decisions regarding R&D will come from UK. Many projects will still be deveoped in Spain and other countries... but the weight of that division is in UK.

Why would Alierta do that? He had no need to do it, he wasn't forced to. If he has made that decision it is because he believes its the best for the company. There are rumors of the reasons but I won't get into them... but the fact is that he has done it and Digital is now in UK.

We must not forget that, unfortunately for them, carriers are currently followers in innovation, not leaders. Their fight (at least in Spain) is to offer more bandwidth or better prices. However, all service and product innovation has been taken out of their hands by the Apples, Googles, Facebooks, Samsungs, RIMs... etc.

I think carriers are making repeated mistakes. They are launching projects that lead nowhere because either they haven't been thought thoroughly or because they are born without leadership in mind.

If you are Telefónica and you decide to launch an ebook, its not to put another piece of hardware in an already competitive market... its to offer a whole package of services and a radically different experience to your clients. You are Telefónica, you can do it... you have the cash, you have the people and you have the position in the market needed to align all players in order to offer a successful service. If you launch an ebook its because you want to compete with Amazon, not to make a press release and forget about it. That would mean you've thrown down the drain several million euros during the project and, honestly, you shouldn't want that. If you do it, why don't you do it well? (May seem stupid to quote a green fiction character but.. "Do or do not, there is no try".)

If you are Telefónica you have the research and should have the insights to decide not to launch a project like Keteke and throw down the drain over 10 million euros. Seriously, who didn't see that coming when the project was launched? And in order correct the error you decide to buy another social network for 70 million euros? I think that was another mistake... not for Tuenti, which is a great company and seems to be doing well, but for strategic reasons I may talk about some other time.

If to the above (and some other things) you add that Mr. Key must have done a couple of things correctly... the result is that he has received all digital businesses. It's a prize and Alierta seems to have realised that you need a way of thinking, a way of doing things that here in Spain, unfortunately, it isn't possible yet. Maybe it's a saxon, a british or an english mentality. Maybe it's still the heirloom of the many years Telefónica was a state-owned company.... but something doesn't work.

A few days ago I was saying (check post) that Managers and Directors don't seem to understand the Market and their role in it... sometimes it seems that they are running (because they are, they don't stop doing things, there are many people working really hard) but they do so like headless chickens. In a company such as Telefónica, if they really want to compete with Google, Facebook, Yahoo, etc. they need to wake up. They need to speed up processes to the limit, they need to stop thinking about present revenue streams and how to keep them at current levels and start thinking about what is needed for the future, independently of the current situation.

SMS are dead, revenues will go down and in a few years will disappear. Forget them, full point. Have a small team working on them to manage and try to keep the service alive as long as possible but put all your efforts on developing new revenue streams that will compensate for the loss... without legacies, without barriers, total innovation. Be quicker than Whatsapp, Viber, Skype... See where alliances with other carriers are possible and needed to compete with Apple or Google... because the greatest danger for a carrier today isn't other carriers... its Apple & Google.

Because the threat isn't losing some users to the other carriers... the real threat is that Apple manages to take control of the SIM, starts to offer data plans with roaming for a flat fee and takes all that revenue (and that would really be a lot of revenue) from the carriers. The real threat is that Google launches a MVNO throughout Europe. Just imagine that voice becomes Facetime, SMS becomes iChat... no more voice calls, no more SMS... the carriers would suffer.

Telefónica needs to be able to launch an App Store in just two months after Apple does it. It needs to be able to launch and adapt a social network at the same speed as Facebook is reacting and adapting its own service taking Google+ and Twitter's best functionalities. Needs to be able to compete with Whatsapp in a few weeks and not launch over-dimensioned projects that take months to specify, months to select providers, months to develop, months to integrate, then a pilot, then make a final revision and finally release it. By then Whatsapp, Apple's Chat, Google's one will be all over the place and yours will crash into a concrete wall.

You have 10.000 million euros net profit... what are you waiting for to bang the fist on the table and straighten things out? The changes in the past 3 weeks are the beginning, but they shouldnt stop there!

The pity for Spain, for Spanish engineers and developers, for Spanish technology companies, is that Digital's HQ are now in London.

Business thoughts: Competition vs Market Fragmentation

In the past couple of weeks we have been reading some of these news:

• HTC interested in buying its own mobile OS (and dropping Android?)
• Amazon's next tablet will be a blockbuster and a thought that follows is: How "open" will Kindle tablet be? 
• GameStop Confirms In-House Android Gaming Tablet (Gamestop is one of the biggest videogame stores worldwide)
• Telefónica, Vodafone y Orange irrumpirán en la mensajería instantánea este invierno (Telefonica, Orange and Vodafone will get into IM this winter... )

Some talk about companies getting into markets to compete... but others aren't about competition, they are about fragmentation... which is quite different.

You and I can compete in many things... you may decide to manufacture a car and if I decide to compete with you I could manufacture one too... users would be able to buy yours or mine, but they know that the fuel can be bought at the same place, that they use the same roads and streets, and that they can be parked in the same parking spaces.

Now imagine if your car and mine couldn't use the same fuel... and that there are 5 or 6 other people manufacturing cars that use different fuels too. And different streets... and... and... it would be a nightmare.

That is the difference between fragmentation and competition.

If you want to fragment a market you need to have all the cards ready to guarantee yourself enough market share to prevail. You can't fragment to keep a 5% market share because you'll be eaten quite fast.

Apple can decide to fragment a market but only because they create a great product and provide all the tools it needs to succeed: good software, application store, content store, etc. Amazon can do the same (and did with Kindle) but what will Gamestop offer to differentiate itself? Games? Sony has a "Playstation certified" tablet... but of course Sony owns the Playstation and the Playstation Network. Will GameStop prevail as a player in the tablet market? We'll see...

The 3 most important Spanish carriers want to enter into the IM arena... (I remember when in 2001 we had in Xfera/Yoigo a IM project, compatible with MSN Messenger and Yahoo Messenger) to compete with WhatsApp (and the messengers Apple and others will release). How much money are they investing to create the "mega IM platform"? How will they make us change from WhatsApp to their new IM? Are their offering innovative new features? Will it be centred on user experience or just a defensive movement? or a tantrum against the loss of income? We'll see...

Apple's "Give us back our iPhone" Ad

Couldn't help but to link this video. Apple taking seriously getting their iPhone prototype back:

:)

El futuro de los medios

Durante las próximas semanas voy a intentar analizar el estado actual de los medios (Radio, Prensa, TV) y de las artes (Libros, Cine, Música) no sólo en España, si no a nivel mundial, con las amenazas actuales y los cambios que previsiblemente van a ir ocurriendo en los próximos meses/años.

Es un tema que he ido siguiendo desde que comencé a estudiar la carrera de Teleco allá por 1993, cuando me "pasaron" por primera vez un par de archivos en un formato llamado MP3 y que sólo un amigo loco que tenía una RDSI en casa era capaz de bajarse en un tiempo razonable (los simples mortales teníamos módems a 19200 o 28800 mientras que los afortunados de la RDSI llegaban a 144000 uniendo los dos canales de datos más la señalización, creo recordar!!!!)

La evolución de las redes, de la conectividad en los hogares y, finalmente y más importante, los dispositivos de "presentación" de la información (ya sea un iPad o un Smartphone) ha llevado al punto actual en el que el cambio es inminente.

La amenaza que sufría a música hace 10 años hoy la sufren todos los medios. Sin embargo, dado que somos el único animal que tropieza dos veces con la misma piedra, medidas similares a las que fueron tomando las discográficas son las que están tomando las productoras de TV, editoriales, etc. La consecuencia de estas medidas ya las conocemos (las discográficas son la sombra de lo que eran y por el camino apareció un tal Steve Jobs con iTunes, entre otros...) y sin embargo el miedo a tomar decisiones valientes y arriesgadas pensando no en la cuenta  de resultados del 2011 o 2012 si no en la de 2015 o 2020 impide que las cadenas de TV, productoras, editoriales, etc. se adapten al nuevo escenario.

Ayer ya vimos que GoogleTV viene a Europa. En mi twitter también mandé un enlace a las previsiones de Amazon de vender 5 millones de tablets en 3 meses (quién disfrute de la lectura y no tenga un ebook o, mejor, un Kindle debería empezar a investigarlo). Y por la noche leí que las ventas del iPad se aceleran por, basicamente, "la incompetencia de su competencia". En definitiva, todo este mercado se está acelerando rápidamente.

En principio estos serán los temas que quiero ir analizando:

1. Música
2. Cine
3. Libros
4. TV
5. Prensa
6. Radio
7. Publicidad

Puede sorprender que la publicidad aparezca ahí... pero dado que es quien mantiene vivas a las TVs, Radios y Prensa... y quien está sufriendo más por el mal uso que se está haciendo de la misma... es importante revisar el rol de la publicidad, cómo debería usarse y cómo mejorar la experiencia tanto para el usuario final, el espectador, oyente o lector, como para el propio anunciante.