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Archive for: September, 2008
September 30th, 2008
Andreessen joins eBay board
eBay said that Marc Andreessen will join the online auctioneer’s board of directors.
The move, which is effectively immediately, brings some additional brainpower to eBay, which is trying to fend off rivals such as Amazon and Google. For instance, Amazon’s fixed price model has been attracting merchants to its network. To counter, eBay moved to add more goods to its platform and encourage fixed prices.
Also see: eBay has Amazon envy: Cuts fees to get more fixed pricing
In a statement, eBay chief John Donahoe said that Andreessen brings some visionary mojo as the company retools. Andreessen’s ventures have included Ning, Opsware and Netscape. Donahoe said:
“We look forward to learning from Marc’s insights and expertise as we drive further innovation on our platform, invest in growth opportunities and develop technology that will further benefit our customers, build powerful communities and enhance e-commerce.”
Hmmm. Is it just coincidence that Donahoe is talking about powerful communities when Andreessen’s current baby–Ning–is a social networking platform. Can you say exit strategy?
Admittedly, that eBay buying Ning idea is a leap, but crazier things–like eBay’s acquisition of Skype–have happened.
September 30th, 2008
RealDVD officially launches, so do lawsuits; Is it 'StealDVD'?
Update: RealNetworks announced Tuesday that its RealDVD software, which allows you to rip and burn DVDs easily, officially launched. And the lawsuits weren’t far behind.
In a statement (Techmeme), RealNetworks billed RealDVD as a “watershed” product. The software, which goes for $29.99 on sale, allows 
you to rip, burn and organize your DVD collection, which usually is armed to the hilt with DRM restrictions. The RealDVD software encrypts DVDs so they can’t be shared or stolen, but that’s not likely to allay concerns from Hollywood. Headline of the day–Sue. Rent. Rip. Return–goes to John Paczkowski at AllthingsD’s Digital Daily.
The movie industry didn’t waste time suing RealNetworks. In a statement, movie studios sued RealNetworks alleging RealDVD violates the Digital Millennium Copyright Act (DMCA). The argument from Greg Goeckner, General Counsel for the Motion Picture Association of America (MPAA):
RealNetworks’ RealDVD should be called StealDVD. RealNetworks knows its product violates the law and undermines the hard-won trust that has been growing between America’s movie makers and the technology community. The major motion picture studios have been making major investments in technologies that allow people to access entertainment in a variety of new and legal ways. This includes online video-on-demand, download-to-own, as well as legitimate digital copies for storage and use on computers and portable devices that are increasingly being made available on or with DVDs. Our industry will continue on this path because it gives consumers greater choices than ever. However, we will vigorously defend our right to stop companies from bringing products to market that mislead consumers and clearly violate the law.
The MPAA is looking for an injunction and damages.
Meanwhile, RealNetworks issued a statement on a pre-emptive lawsuit:
In response to threats made by the major movie studios, RealNetworks this morning plans to file an action for a declaratory judgment against DVD Copy Control Association, Inc., Disney Enterprises, Inc., Paramount Pictures Corp., Sony Pictures Entertainment, Inc., Twentieth Century Fox Film Corp., NBC Universal, Inc., Warner Bros. Entertainment, Inc., and Viacom, Inc., in the United States District Court for the Northern District of California. The lawsuit asks the court to rule that RealNetworks Home Entertainment, Inc.’s RealDVD software, made available to consumers today fully complies with the DVD Copy Control Association’s license agreement.
However, the damage to RealDVD may be already done. As a consumer I’d hang back on RealDVD as the courts sort this out. Given how the music industry has gone after consumers do you really want to poke Hollywood too?
September 30th, 2008
Socialtext enters Twitter for the enterprise sweepstakes
Socialtext, a company looking to take social networking to the enterprise, has launched its Socialtext 3.0, a suite of social networking applications complete with a wiki and dashboard to manage relationships.
Technically, Socialtext 3.0 consists of People, the social networking app; Workspace, the wiki; and Dashboard, which has custom home pages that let each worker filter information. Socialtext’s big idea is to integrate its social features with other enterprise applications.
But the biggest part of the Socialtext 3.0 announcement (Techmeme) is something it calls Signals, which is billed as “an integrated Twitter for the enterprise” that “blends into the flow of real work.”
Dennis Howlett: How SocialText is breaking the collaboration mold
Ross Mayfield, co-founder of Socialtext, writes on his blog:
Socialtext Signals is social messaging for the enterprise connected with context. With the rise of Twitter, more people are learning the benefits of microblogging as a medium for conversations and sharing each day. Socialtext developed a standalone version six months ago. Using it internally we’ve learned how different usage is from Twitter, not just because it is more private, but because it is in the context of a company. The social patterns of what people say and share has taught us a lot about potential use cases. Now in private beta with Socialtext customers, Socialtext Signals will provide an integrated user experience across Socialtext Workspace, Socialtext Dashboard and Socialtext People.
That context point from Mayfield is huge and could be what separates Signals from efforts like Yammer and Present.ly, two startups working on the same theme. The problem with Twitter for me is one of noise. There’s a lot of it. Some folks love it, but frankly I need more filters and less noise. In fact, some peace and quiet is kind of nice once in a while. Ever notice how much work you can get done when you’re not connected to everyone?
Also see: Feeds: And in this corner… Present.ly packs a solid punch against Yammer
- Webware: Socialtext co-founder: Enterprise Twitter isn’t enough
- Oracle: CRM software demand bubbly; Social networking meets enterprise data
- Oracle CRM: spot the disconnect
Mayfield notes that the goal with Signals is to find information and people in a company. In a nutshell, Socialtext wants to tap collective intelligence. Think of it as a knowledge management and relationship system.
Sounds great, but will enterprises bite? For all the talk about Twitter’s enterprise potential the fact remains that CIO eyes glaze over–if you’re lucky–when you ask about micromessaging. In fact, I’ll be lucky if this post doesn’t lose page views. The interest in Twitter just isn’t there yet.
That doesn’t mean micromessaging isn’t important. In fact, it could be a big deal inside a business. But it could also be a mere feature to be integrated later by the likes of Oracle and SAP. Is Socialtext a groundbreaking, but way too early company in your enterprise?
September 30th, 2008
Video: Tech earnings preview: Microsoft, Intel and SAP
ZDNet correspondent Sumi Das talks to editor in chief Larry Dignan and senior editor Sam Diaz about the financial health of enterprise giants Microsoft, Intel, and SAP. Dignan and Diaz share their views on the success of Microsoft’s new ad campaign, Intel chip sales for the new Netbook, and whether SAP will have a positive earnings report similar to its rival Oracle.
September 30th, 2008
Zoho launches app marketplace; Aims to rally developers
The application marketplace is becoming a critical cog in the software development ecosystem. Zoho is that latest to hop on the bandwagon.
Zoho on Tuesday launched Zoho Marketplace, an app store with software from its developers, which offer their wares for free or a fee. Zoho’s app store is deployed in its Creator software, which launched its 3.0 version today.
The company, which adds apps at a rapid clip as it tackles everything from CRM to productivity software to the enterprise market, said its Marketplace wares are specific to “a particular use case or situation.” In other words, Zoho’s Marketplace isn’t nearly as fun as Apple’s App Store, but arguably more business friendly.
The bigger question is whether Zoho’s Marketplace can attract more developers to its ecosystem. Salesforce.com’s AppExchange has been a critical cog to its development and strategy. Zoho could do the same. For now, Zoho says its market “is not big enough for vendors to make a living and not small enough to ignore.”
Simply put, Zoho Marketplace won’t lead to world domination, but you have to start somewhere.
September 30th, 2008
Analyst: Intel will weather the storm
Intel got an upgrade Tuesday on the theory that the chip giant’s third and fourth quarter results will be decent amid a weak global economy.
Piper Jaffray analyst Auguste Richard upgraded Intel to buy from neutral based on the theory that the chip giant can top low expectations. Wall Street is expecting Intel (all resources) to report third quarter earnings of 34 cents a share on revenue of $10.27 billion, according to Thomson Reuters. For the fourth quarter Wall Street is currently expecting Intel to report earnings of 40 cents a share on revenue of $10.88 billion.
While acknowledging that Intel isn’t immune from a slowdown and there have been “some cancellations in the PC supply chain,” Richard noted that Intel continues to run at full capacity largely due to demand for its Atom chips, which power so-called netbooks.Richard’s theory goes like this:
- Intel isn’t likely to miss its third quarter targets;
- Atom is positioned in the PC market’s sweet spot;
- Intel has $12 billion in cash and can use that to whack weaker competitors like AMD.
- And he isn’t expecting much in sequential growth–only a 3 percent revenue gain in fourth quarter from the third quarter. Intel usually does 8 percent or so.
The biggest takeaway is that Intel is in its best position in a while. Richard writes:
Intel’s competitive positioning is the best it has been in the history of the company, in our opinion. While most analysis of Intel focus on the company’s product portfolio, we think the company’s real competitive strength and core competency is its manufacturing prowess. While most other chip makers are pulling back on process development and capital spending, Intel is forging ahead. The company is currently a full process node ahead of its competitor, and with the use of a high-k metal gate the company has faster and more energy efficient products. We believe no one else in the industry is close to moving a high-k metal gate product into production, and we believe investors do not fully comprehend the value of this technology in terms of reducing feature size (cost), improving performance and reducing energy consumption.
September 30th, 2008
Video: IT Dojo: Analyze network traffic with tcpdump
Tcpdump may not have a slick frontend like other packet analyzers such as Wireshark and Ettercap, but this command line tool makes up for its lack of fancy graphics with power and flexibility. In this IT Dojo video, Bill Detwiler shows you why tcpdump is great tool for network debugging and security monitoring.
Once you’ve watched this IT Dojo video, you can find a link to the original TechRepublic article and print the tip from our IT Dojo Blog.
September 30th, 2008
Web 2.0: Unprecedented data liabilities for users and businesses
Guest post: Drew Bartkiewicz is a Technologist and Author of the Upcoming Book, Unseen Liability. He is a Graduate of Yale and West Point. He insures Web 2.0 business risks with The Hartford. His post is a follow-up to a recent talk he gave on Web business risk.
As an industry and as users of the modern Internet we have gone from our Internet childhood of Web 1.0, full of data innocence, data discretion, and truly permission-based advertising. With the recent growth of personal data incidents we increasingly appear to be living during Internet adolescence, awash in personal data excess and advertising over-indulgence.
In many ways Web 2.0 is not a perfect progression of Web 1.0 aspirations. Social networking users, for example, appear too willing to give up something of value to them today (their highly personal attributes of social, commerce, and professional dimensions) for what feels right at the moment, but without consideration for its potential privacy and reputation costs down the road. Though Governor Palin was not a known or active social media user, her personal emails illustrated dimensions of her persona that impacted her social reputation, for better or worse.
September 30th, 2008
News to know: Bailout bust and tech fallout; Cloud computing; Netgear; Apple
Here are today’s notable headlines. You can get News To Know via email alert and RSS daily:
AP: Stunning Defeat for Bailout Plan Torpedoes Stocks; Dow Sinks Over 750. White House, lawmakers plan new bailout deal
- Larry Dignan: Is Apple really recession proof? Wall Street says no. Techmeme
- Sam Diaz: Wall Street slams tech on bailout bill’s failure
- BNET: Fed Bailout Rejected, Now What’s Going To Happen?
- Dennis Howlett: Zoho bitterness at the credit crunch…and a solution
- Phil Wainewright: SaaS and the downturn
- Can IT spending shift from reactive to proactive?
- Which IT jobs will survive the credit crunch?
- Brian Sommer: Accounting vs. technology - who’s at fault
- Joe McKendrick: Silver lining: Now may be the best time for SOA startups. Part 1 and Part 2.
- TechCrunch: VCs (And Startups) Won’t Be Immune To The Credit Crunch
Steve O’Hear: UK secret service recruiting on Facebook
Michael Krigsman: World’s worst IT failure report
Deb Perelman: Wired workers never catch a break
Sean Portnoy: Netgear unveils new energy-efficient Draft N routers
September 29th, 2008
Wall Street slams tech on bailout bill's failure
updated: Wall Street reacted sharply to news that Congress failed to pass a $700 billion bailout bill this morning, sending the Dow Jones Industrial Average into a downward plunge more than 777 points. The tech-heavy Nasdaq, not immune to the financial ripple-effect that stems from the financial crisis, was down more than 9 percent on the news, led by Apple, which took an immediate beating and fell almost 18 percent after brokers cut their ratings. Likewise, Google, Dell, IBM, Microsoft, Yahoo and Intel also saw sharp plunges as the news hit. (Also see: Apple: Is it really recession proof? Wall Street says no)
(Yahoo Finance: Quotes chart after the market close today.)
I’ve posted some charts of what happened to the stock of some of the big tech companies. Larry Dignan is working on an entry that looks closer at the impact of today’s news on the tech sector and will post it soon.
APPLE: Down almost 18 percent to close at $105.26 (Click chart to enlarge.)
GOOGLE: Down more than 11 percent to close at $381.00 (Click chart to enlarge)
IBM: Down 4.15 percent to close at $114.46 (Click chart to enlarge)
INTEL: Down more than 10 percent to close at $17.27 (Click chart to enlarge)
MICROSOFT: Down almost 9 percent to close at $25.01 (Click chart to enlarge)
DELL Down more than 9 percent to $15.41 (Click chart to enlarge)
YAHOO: Down more than 10 percent to close at $16.88 (Click chart to enlarge)
September 29th, 2008
Apple: Is it really recession proof? Wall Street says no
Updated below: Morgan Stanley analyst Kathryn Huberty thinks that Apple can’t outrun a slowing economy. And she’s betting her estimates on it.
In a research note Monday, Huberty downgraded Apple shares from “overweight” to “equal weight” and lowered her price target to $115 from $178 on the theory that the company can’t beat a PC unit growth slowdown.
Huberty’s theory, which along with an RBC downgrade knocked Apple shares down 17 percent to a 52-week low, goes like this:
September 29th, 2008
WiMax service rolls out; Who's buying?
Sprint and its Xohm unit have finally made WiMax a reality. Now it will be very interesting to see who buys the service.
In a statement (Techmeme), Xohm, soon to be a joint venture between Sprint and Clearwire, announced that its WiMax broadband service, also known as 4G, has launched in Baltimore with areas such as Boston, Chicago, Philadelphia, Dallas and Washington DC en route. While the companies call the launch “historic” the timing is a bit tricky. The economy stinks; consumers are reeling and it’s unclear whether they will leave their existing providers and buy WiMax enabled devices.
The promise is that WiMax will extend beyond mobile access and allow folks to use it as their sole broadband option. Xohm’s service delivers download speeds of 2 Mbps to 4 Mbps and may be coming to a city near you (at least if you’re an East Coast person).
The rub: WiMax devices aren’t exactly everywhere. Xohm is launching in Baltimore, which isn’t a tech haven like the Bay Area, and it’s unclear that consumers are in any mood to ditch their triple plays (Internet, phone, TV) to give a fledgling service a spin.
Some of those concerns are reflected in Xohm’s pricing. Consider:
- Xohm has no long-term contracts and will sell you access monthly at home ($25) and mobile ($30) or by the day ($10);
- One charge works on multiple devices;
- Xohm is ditching the walled garden approach deployed by Verizon Wireless and AT&T.
Simply put, Xohm really wants you to try WiMax. But I’d expect a slow rollout due to the lack of WiMax enabled devices (and some subsidies would help too). Xohm has Samsung Express air cards and modems, but USB modems, notebook PCs and wireless devices won’t surface until later in the year. Rest assured that Intel will push devices out the door. Sprint is chipping in dual-mode 3G/4G handsets.
But the WiMax rollout is really wait and see at the moment. The case for WiMax is there. The timing, however, could be off.
September 29th, 2008
Watch Out: Digital TV Transition Starts ... Now
You thought you (or your Mom) didn’t have to worry about whether your household was prepared for the transition to digital TV broadcasting until February of next year.
Wrong. If, for instance, that household is in Austin, Green Bay, Indianapolis and eight other markets where LIN TV stations operate in areas served by Time Warner Cable, D-Day is Thursday (Oct. 2). Not Feb. 18, 2009, when all over-the-air signals are to be sent as digits.
That’s because Wednesday is Oct. 1 – the date that the Federal Communications Commission has said (see declaratory order on Sept. 26) that broadcasters must make a choice that will affect how (or whether) their signals will be carried by cable television system operators, nationwide, from 2009 through 2011.
This is the day that broadcasters have to tell the cable operators that they must carry their digital signals. Or whether they have to negotiate for the right to retransmit those signals on their cable systems.
Broadcasters increasingly see retransmission rights as a source of revenue. They figure, in the end, cable operators will have to carry their signals, to satisfy local customers and keep them from switching to satellite TV rivals. This is LIN TV’s tack.
It says that Time Warner Cable must agree to pay for retransmission by Oct. 2 – or it will have to stop carrying LIN TV signals. Oh, and by the way, it has formed a partnership with the DISH network to encourage customers to switch, should Time Warner Cable remain reluctant to pay.
And, as Multichannel News reported over the weekend, small cable operators are being asked to pay anywhere from 40 cents to $1.10 a subscriber a month, for retrans rights. LIN TV’s digital revenues doubled in the first half of this year, to $11.6 million from $5.8 million.
It’s going to be interesting then, to see who gets the blame as the next few months unfold. Congressmen and women are worried, after the Wilmington, N.C., test case of changing over to all-digital transmission from broadcasters, that they will be inundated with calls in February when they can’t get local broadcast signals on their TV sets.
Hey, that’s not necessarily a bad thing. Congressmen and women should welcome every opportunity to talk with their constituents. Plus, it’s hard to cry over the calls that come in, since this is a federal mandate in the first place.
But, if local broadcasters yank their signals because cable operators don’t want to pay to retransmit signals that are using scarce public airwaves to get to households, who’s the public going to call in that case?
Their congressman? Their broadcaster? Their cable operator? Or a satellite service?
Or all the above?
The fun is just beginning – if every broadcaster in every market elects Wednesday to opt for negotiating payments from cable operators for the right to retransmit their signals during the next three years.
IMAGE SOURCE: Warren Sentinel
September 29th, 2008
Apple TV: End of an error?
Rumors are swirling that Apple’s “hobby,” also known as Apple TV, is about to get deep sixed for something else. Is this a case of Apple fans projecting rumors to make up for a so-so Nano launch?
Apple TV has a few fans–our own Sam Diaz is one of them–but for the most part the product just hasn’t gained much traction. Apple TV is a hobby for Steve Jobs–not a world conquest.
Now TUAW is reporting rumors that Apple is telling resellers to remove Apple TV displays and literature by Sept. 30. TUAW added to its post and noted that it’s possible that just the licensing is expiring–not Apple TV’s life as a product. MacRumors adds that new Mac part numbers are appearing. Certainly it must be some Apple TV/Mini hybrid living room must have thingamajig. Or not. MacRumors downplays its original report.
GigaOm cooks up what the ultimate Apple TV replacement would do.
No matter what Apple cooks up it’s going to have a tough slog. Why? The fundamental premise of YASTB (yet another set-top box) is all wrong. Let’s add it up: The cable box, DVD player and video game machine add up for one crowded entertainment center. Any other set-top box requires thought–too much for a consumer like me. Apple would be better off allowing you to plug your iPod into the TV and use it as a conduit from your living room to iTunes.
The dirty little secret here is that your cable box works pretty well. Sure, gadgets like Apple TV and the Netflix player by Roku have a role, but the market may be limited. Both devices appeal to their respective bases, but it’s not like folks are lining up around the block for them. At least Netflix has a core base of subscribers that will fork over $99 for its player.
And digital convergence? I already have that. I watch TV with a laptop on the couch–especially when watching football. I suppose I could use some widget on my TV or stream videos. But really I just want to know how my fantasy team is doing while my Eagles are about to lose to the Bears. Unless a set-top box can ease my pain I’m not terribly interested (at least the Phillies serve as a balm).
September 29th, 2008
Can IT spending shift from reactive to proactive?
Pity the poor IT department.
Seriously. I feel for the IT departments out there, especially in this economic climate. It’s hard to think of another department within a company that’s been dealt more changes over the years than IT. It’s no longer just a Windows PC and an e-mail account for every employee. Today, IT is supporting Macs and PCs, Blackberrys and iPhones, Salesforce and Oracle, VPN networks and overloaded and overheated servers. It’s no wonder that IT budgets are among the largest within a company, a distinction that also makes them among the first to be identified for potential cutbacks.
I recently talked about the woes of IT with a company called Apptio, which bills itself as a provider of IT Cost Transparency solutions. Basically, that means that Apptio comes into your company and starts micro-analyzing the IT budget, staff and operations for the purpose of painting a true picture of IT costs. It gets into the granular data - the support tickets, the cost of licensing and maintenance, the workflow - and looks for trends to start identifying places where companies can improve their effiiciency. Apptio says that 73 percent of IT budgets today are spent “keeping the lights on,” just meeting the daily demands of the network changes, hardware replacements, software patches and demanding people.
I often wondered if companies might actually save in the long run if they made solid investments instead of forcing one of its biggest-budget departments to support outdated equipment, sofware and even procedures. Maybe that’s an unfair assessment but how would anyone know if it were right or wrong unless someone analyzed the data.
I realize that a lot of companies are using the big guys - the IBMs and HPs and such - to manage all of this for them. But for those who are trying to manage internally or determine where to best spend their investment dollars, taking a more detailed look at the big picture might be a good investment of time and money.
It makes sense to me - but I defer to our IT readers who live in this world day-after-day. I’ve never worked in IT, so I don’t have first-hand experience there. But I know how my demands have changed over the years and can only imagine having to deal with 10,000 of me.
If you’re working in IT, I want to hear from you. Would something like Apptio’s offering would be helpful or just another expense? Do the execs really have a good understanding of what’s driving the IT budget? Do you have ideas that you’d like to implement or pursue but are pushed back because of lack of time or money? I’d be interested in hearing your tales in the talkbacks.
September 29th, 2008
Gauging the ThinkPad: Before (IBM) and after (Lenovo)
Has Lenovo lost whatever mojo the ThinkPad had? That simple question raised a lot of discussion at TechRepublic and it’s worth pondering. The problem: Gauging Lenovo’s performance depends on a lot of anecdotes with few concrete answers.
As background, John Sheesley asked a simple question: Has Lenovo ruined the ThinkPad? John outlined the history–IBM unloaded its PC unit to Lenovo in 2005–and noted that the latest ThinkPads just don’t seem to have the fit and finish as before. The questions about Lenovo have popped up before, but are quite current today since I smoked (literally) three T42s–older ThinkPads–on Thursday. The guts of the laptop started smoking so I have a loaner that will be upgraded to another Lenovo in the next few weeks.
September 29th, 2008
Video: Software licensing agreement strategies
ZDNet senior editor Sam Diaz talks to Eliot Arlo Colon, president of Miro Consulting, discussing the ins and out of software licensing agreements with companies like Oracle. Colon shares his views on new Web 2.0 software and how businesses can get an edge in the negotiating process.
September 29th, 2008
News to know: Tech sales and the art of spin; Firefox; Apple; HD streaming
Here are today’s notable headlines. You can get News To Know via email alert and RSS daily:
Brian Sommer: Quit Spinning - You’re Making Me Dizzy
Ryan Naraine: Firefox rushes out fix for password manager bug
- Matthew Miller: Microsoft deep sixes Deepfish mobile browser
- Windows Mobile browser news; Skyfire and Internet Explorer Mobile 6
Adam O’Donnell: Information Warfare and the 2008 Presidential Election: A Recap
Garrett Rogers: New Google tool called “Moderator” released
Oliver Marks: The productivity dilemma
Richard Koman: 243,112,609 -1: Distributed computing finds largest prime yet
AP: House to vote on $700 billion market bailout
TechCrunch: Motorola Building Up 350-Person Android Team. Nokia Also Sniffing Around.
News.com: Net radio bill passes House
Paul Murphy: Escalation in the storage wars
Sean Portnoy: New chip promises four separate HD streams over Wi-Fi
Tom Steinert-Threlkeld: Wall Street’s Pain = Tech’s Gain
September 26th, 2008
Was RIM's Wall Street beating unjustified?
Shares of Research In Motion got hammered to the tune of more than 27 percent to close the week - this despite a quarterly earnings report yesterday that included a 72 percent jump in profit from a year ago. That just goes to show that, especially in the quick-growth, suddenly-crowded smartphone business, you’re only as good as your next quarter. And for RIM, that doesn’t look as good.
It’s not enough that RIM, which once dominated the smartphone business in the corporate market, is being challenged by the likes of powerhouses Microsoft, Apple and now Google, with its Android operating system. Now, as so many of the players in the game go after the ripe consumer market, the outlook for the key holiday season is clouded by a crashing economy.
Like Apple, RIM is both software and hardware, the Blackberry (and the iPhone for Apple.), which means they’re managing both sides of the equation. Microsoft’s Windows Mobile runs on a number of devices manufactured by partners - the Nokias, Samsungs and LGs of the world. Google’s Android is subscribing to that same strategy. The market is growing quickly: Smartphones now account for almost 10 percent of mobile phones in the U.S., as of July 2008, an increase from 4 percent in July 2007, according to comScore M:Metrics.
Here’s two things worth noting: The number of subscribers more than doubled during the same period, from 9 million to almost 20 million and teens 13-17 saw the biggest jump in the adoption of smartphones. In that age range, the number of mobile subscribers was mostly flat year-over-year but the number of smartphone users in that age range jumped 44 percent in one year.
RIM is smart to sacrifice margins now to try to grow subscribers and hook those kids to the Blackberry platform instead of the iPhone or Android. (My 12-year-old daughter is dropping hints for a Blackberry Pearl for Christmas, giving up on the iPhone because she knows our family plan is tied to Verizon Wireless.) Larry Dignan wrote in his earnings report entry yesterday:
(RIM CEO Jim) Balsillie made a good argument that the company should sacrifice margins today to grab the most platform market share. Balsillie said the mobile market is undergoing a sea change and RIM would be foolish not to expand aggressively. He noted that investors need to determine whether they want margins today or a platform that can be leveraged years into the future.
It’s not enough, though, to gain customers because of the shortcomings (iPhone tied to AT&T) elsewhere. It’s going to take a diverse product line (check) tied to a variety of wireless carriers (check) and an catchy marketing campaign like the one that shows icons of the various applications morphing together to form a Blackberry (check). It’s no Jerry Seinfeld but I do remember it. Still, it might be better to spend some marketing and advertising money and really get aggressive about locking in that market of new subscribers (and help stimulate the economy, too.)
If investors could force themselves to look beyond the next quarter or the next year, then maybe the beating against RIM today might have been a bit more tame. But then again, if investors started looking at the long-term, lawmakers in Washington might not be spending this weekend hammering together a financial bailout plan that is bound to have implications that last longer than a sluggish holiday shopping season or an aggressive advertising campaign.
September 26th, 2008
Video: Ballmer's quest to compete with Google
At a Churchill Club event in Santa Clara, Calif., Microsoft CEO Steve Ballmer talks to Ann Winblad, a partner at Hummer Winblad Venture Partners, on its long-term strategy to battle Google in the search market. Ballmer says that to succeed, the company will have to find a way to change the experience and the economics of search, redefining the category. Play video
David Grober is managing editor of ZDNet Blogs. See his full profile and disclosure of his industry affiliations.
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