App Store “10x” download speed boost in China

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A bit of news that has got minimal English coverage in the past couple of days: Apple seems to have rolled out a CDN update for their App Store in China, with folks talking about as much as a “10x” download speed increase for end-users.

This is the type of unsexy but critical infrastructure work that at the end of the day will make a big difference for the user experience, and therefore, a company’s top line (and bottom line). I tried updating some apps while in China a few weeks ago – it was painful to say the least. Hopefully this dramatically changes things. And this is also the kind of stuff local entrepreneurs in emerging markets need to agonize over – how do you make do with poor infrastructure, be it broadband penetration, availability of credit cards (and other payment methods), or just poor end-device computing power (cheap PCs).

I think this story is interesting for potentially another angle – I’ve always wondered how much of the iPhone sales in China are driven by luxury goods buyers, the type that are usually late tech adopters. I’ve noticed anecdotally that many owners of early version iPhones in China were the well-to-do who used it as a status symbol – I doubt these folks likely explore the App Store that much. On the other end of the scale, there was and has always been a active scene of sideloaders, and I suspect iPhone jailbreak rates are much, much higher in China. These two opposite groups of users both have little use for the official App Store – and that could be why they’ve put up with slow App Store speeds for so long.

Google Keep’s reception woes a lesson in community management

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Google launched a new product called Keep today, and the tech commentary has been quite negative. What’s interesting about this narrative is how little of it is about the actual product itself. Om Malik’s post is very representative in this regard, with a pun jab in the title. And the responses on Twitter aren’t much better.

The general sentiment is – why should I use Google Keep, when you’ve just shown with Google Reader that you can shut down a product at whim? This may be a valid sentiment to have, and it is also only natural for tech bloggers to seek drama (in the interest of generate page views) – so this should have been something that Google product managers have anticipated in advance. Especially given that the blowback from the Google Reader development has been quite strong (a lot of discussion, petitions, competing products jumping on the wave to draw users etc.) and is still very much ongoing, the Google Keep announcement should have been delayed or tweaked to acknowledge the sentiment over Reader.

Overall, the Google Reader situation and the Google Keep launch timing shows a general passiveness on Google’s end to engage with its user-community in online dialogues. It is very interesting given the overwhelming strategic emphasis on Google+, why aren’t Google’s product teams using Google+ and/or other social media to engage their end-user communities? Is there a forum where Googlers regularly interact with end-users? How often has various Google teams done Reddit AMAs (or something similar – it seems a few Google teams have done AMAs on Reddit the past couple of years)?

These questions may be somewhat unfairly overweighing the importance of these community engagement channels, since Google primarily provides a utility-like service (search, email), and alas, most consumers don’t find it interesting talking with their gas, electric or internet provider. However, Google also maintains the image of a bleeding-edge innovation company (Google Glass, self-driving cars etc.), and in that regard it is crucial that Google effectively engage and manage its community, especially the early adopters and vocal advocates.

In the past Google has been seen as the company that does no evil and could do no wrong. It had a golden brand and it could dependably rely on a host of external advocates to defend itself and push its world-view. That has obviously changed, and Google needs to start showing sensibilities towards its end users. Addressing the ongoing complaint towards Google Reader would be a good place to start – it doesn’t need to change its decision, but it should at least provide more context over how the decision was made and perhaps make some compromises / compensation to appease the community.

Google’s long-term disconnect with Android

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Fred Wilson has an interesting opinion piece today. He specifically calls out the following tweet and goes on to argue against it:

Fred’s argument is that Google is thinking long term, while Apple and Samsung are thinking short term. This is why while Apple and Samsung rake in billions of dollars of profit today, and Google comparatively doesn’t seem to be making much in mobile. He concludes the post with a with trailing-12-month stock chart comparing Apple and Google, and noting that the market understands Google’s long term view – hence its stock is significantly outperforming Apple’s stock.

I recreated Fred’s stock chart here:

Screen Shot 2013-03-18 at 10.47.44 PMIndeed a grim chart for Apple, and in support of Fred’s viewpoint, right?

Well, if you show the same trailing-12-month stock chart, but just time shift it back 6 months to Oct 1, 2012, this is what you get:

Screen Shot 2013-03-18 at 10.50.13 PMDoes it still support Fred’s argument, or does it support the opposite? What has changed in the past 6 months that has dramatically shifted the tide towards Google and against Apple? If anything, aren’t there reports of Apple gaining market share (and Android losing market share) in the most recent quarter?

We can play around with these stock charts some more, but the point is – it is of little value to pull out the most recent stock chart when it just happens to conveniently support your pre-assembled conclusion. Fred could have made the exact same post a few months back – would he have used the stock chart as an argument then?

But enough of that, let’s talk about some of Fred’s other thoughts, and here I quote the meatiest two paragraphs:

…They have gmail on so many phones. They have google maps on so many phones. They are getting the majority of searches on mobile phones. And that doesn’t even begin to address Android itself. It is the dominant mobile operating system around the world. Just think about all the data they are getting from this enormous mobile footprint they have assembled.

You can change handsets pretty easily when all your data is in the cloud. There is no moat around a hardware only franchise these days. But the software you choose to use on your phone is different. There the moat is much bigger. And where your data goes in the cloud is even more important. Changing that out requires a major effort for an end user.

Some observations here – first, Google doesn’t need Android to put Google maps and gmail onto phones; in some cases Android helps with that, in plenty of others Android actually works against Google in terms of promoting Google services. Just read a few of Benedict Evans’ posts, such as this most recent one.

The second paragraph is a much stronger argument, but again, there is a disconnect – Android the OS is not Google’s cloud service. In an alternate universe, Google never created Android and coexisted peacefully with Apple, offering deep service integration with Apple’s devices (remember the original iPhone and how Youtube, Google Maps et al. got preferential treatment?). If the argument is again Android provides a delivery channel for those cloud services, the counter-argument is again two-fold: 1) if Google had stayed as a neutral cloud services provider, some (if not all) hardware vendors would likely be fighting to integrate with Google’s services, giving Google the access it needs anyway; 2) Android can and has been used against Google, as delivery channels for other cloud service providers – Amazon and all the Chinese internet companies actively do this.

In closing – I don’t disagree that Google could be playing the long-term with Android, but they are tackling the long-term disconnect in terms of how Android fits into Google’s strategy. It’s not all roses as Fred and his stock chart suggests.

 

high-end non-brand Android phones in the US

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following up on my previous post about the large contingent of non-brand (the “others”) Android vendors in China, it’s interesting to read this post in the Verge today. Essentially it’s about a non-brand handset vendor in Florida, BLU Products, that will sell high-end Android phones for $299.

What caught my eye was this intro paragraph from the post:

Sammy Ohev-Zion starts our chat with an economics lesson. It costs every company about the same amount to manufacture a phone, he says — the price of an Nvidia processor and a Sharp display is consistent whether HTC, Nokia, or Motorola is signing the check. But those costs are only a small piece of the price you wind up paying when you walk into a Verizon store and buy that phone — which either costs upward of $500 or requires a hefty two-year contract. You’re also paying for Samsung’s nine-figure marketing budget, HTC’s HR department, or Sony’s huge New York City skyscraper. What if you could buy the same high-end phone from a company without all that cruft and overhead? How much would it cost?

Ignoring the second half of the paragraph for a moment, and we can make a sharp observation from the first couple of sentences – horizontal integration business models (such as those employed by Nvidia and Sharp) have dramatically reduced the barrier to entry for a end-device manufacturer such as BLU. This is nothing new; it existed in the feature phone days, and it certainly existed in the assemble-your-own-PC days. What may be new is how assembly and manufacturing techniques have evolved to the point where a new entrant can storm into the market with devices that look almost as polished as those of the premium brands. In other words, the fact that these non-brands (BLU and the ones I mentioned in my previous post) are offering decidedly mid-market devices, and not just sticking to the low end of the market.

Again, this is enabled by horizontal business models across every layer of the value chain – since Foxconn owns the assembly lines that craft Apple’s devices, you can be sure that sooner (ever more sooner, these days) rather than later these manufacturing know-hows are enjoyed by Foxconn’s other clients. This leads back to the point I harped about in the previous post – hardware differentiation is no longer a source of competitive advantage, as no one can exclusively enjoy hardware differentiation for pro-longed periods of time (it’s now measured in months, not years); to achieve differentiation and therefore profits, players must differentiate on software – and thus all the players in the Android camp are in a battle till death.

The “Others”

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Techrice has a good recent post on China’s army of hardware vendors creating competitive Android smartphones. Benedict Evans has also written about this some weeks ago, and I will borrow the category name from his eye-popping chart as the name of this post.

Having spent a week back in China, I’ve had a chance to witness first hand the Android devices commonly tracked as “Other” in market share reports. A good friend of mine showed off his Jiayu G3 and quizzed me on the price. I guessed 2000 RMB (a bit over $300), since this was the price point for a mid-high level phone in my memory, and the production quality of the device (I didn’t know the brand at the time) seemed quite high. I lowered my bid a number of times before he finally said, “it’s under 1000 RMB.”

When I got home that night, I did some quick browsing of Jiayu’s website. Interestingly, this small vendor from the west of China (registered in Shaanxi province, hardly a place renowned for consumer electronics, as far as I know) is on the brink of releasing its latest flagship device in its most premium line, the G series. The upcoming G4 boosts a quad-core CPU, a gorgeous 4.7″ screen, and a 13MM pixel back-camera. It’s not exactly the Samsung Galaxy S4, but it will be on sale at a fraction of the price – I couldn’t find the exact price, but based on the marketing positioning, it should be around 1000RMB (roughly $150).

Jiayu is obviously not the only game in town. On its community forum, enthusiastic supporters of the brand were quick to dismiss the upcoming iocean X7, which seemed to be a hot competitor of the G4. So I went over to the iocean site for the product to check it out. The X7 boosts some equally impressive specs – the same quad-core 1.2GHz CPU and a 1920*1080 resolution 5″ screen (which is a PPI of 443, even higher than the Galaxy S4 I believe?).

Now, both of these devices are not live on the market yet, so the exact price points are not known, and whether they actually are as advertised remains to be seen. However, there are already a few things worth commenting on.

First, the heated e-commerce wars in China of the past few years, as well as the prevalence of Taobao (which popularized shopping online), has meant that it is legitimately possible for a Chinese hardware startup to try direct selling smartphones online, as opposed to navigating the deeply complex offline handset retail landscape. This doesn’t mean that offline handset retail is unimportant; it just means the entry barrier has been significantly lowered.

Second, in my opinion these devices reaffirm the argument that it is near impossible to achieve differentiation in Android manufacturers based on hardware. It seems that any vendor worth his salt can create sexy devices, with design inspirations from the leading brands such as Apple and Samsung. And the moment the top brands reveal their latest hardware design, you can be sure that players like Jiayu / iocean (of which there are many) will take note. (After all, the current hardware paradigm revolves around a big piece of touchscreen-glass – how different / unique can your design be?) This is why Samsung is trying so hard to introduce software features unique to its hardware, as the specs alone do not justify the price premium.

Third, it’s exciting to see Chinese companies pick up so quickly the marketing execution skills of global brands. Both Jiayu and iocean’s websites were clean and minimalistic, which could be taking a cue from Apple. It was also funny to see these local brands copy each other in terms of marketing tactics – Jiayu and iocean used the same icons where they list out their shipping and return policies (7 day free return, 15 day exchange etc.). But beyond website design, these companies are also savvy enough to build and leverage their consumer community – both companies’ discussion boards seem to be quite active, with vocal posters discussing topics ranging from software/games to debating how their phones stack up against the competition. Jiayu’s discussion board gets 10,000 posts a day, which is not a trivial number by any measure – and this community approach is certainly distinctive compared to the big brands (which usually don’t offer a general discussion forum, and instead only a customer support board).

To sum it up – I will enjoy following up on this topic and watching to what extent these scrappy Chinese hardware companies can impact the market. This could be a very exciting year.

“Google controls too much of China’s smartphone sector”

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Reuters published an article that summarizes a recent white paper from China’s Ministry of Industry and Information Technology. In the white paper, the ministry expressed concern that Android has too much market share in China, and that Google has discriminated against local companies in the ecosystem, as well as restraining their development in certain cases.

The white paper is early signs of a regulatory threat, but that’s not what I’m interested in discussing – Google has long had a tumultuous relationship with the Chinese authorities, and this development would also further reinforce the stereotypical view (in the west) that the Chinese government favors local companies and discriminates against western tech companies.

I have not used Android much in China, but I’m having some ongoing experience as I have a temporary Android phone while I’m currently in China. This device is a sample of one, of course, but it paints a very different picture than the notion that Android has too much control over China. The phone is a Samsung phone (model number GT-S5820) deeply customized for China Mobile. It runs a heavily modified version of Android 2.3.6. There are no Google services installed on the device; instead, it comes pre-loaded with 5 different browsers, courtesy of all the local Internet giants (a browser from Sina, a browser from Tencent, Opera, etc.). The map application is from Autonavi, the major local player (which Google also sources data from, if I’m not mistaken). What I was surprised at was the lack of any pre-loaded apps from Baidu – perhaps they didn’t get a deal with China Mobile?

I wonder how many Android phones in China are like this one – yes, it is running Android, but for all intents and purposes, Google has no say / no gain from this device. It merely provides a free OS on which all these other players provide their own value add. Samsung is the gate keeper for OS upgrades – it seems I’m locked on 2.3.6, unless I hack the phone and gain root access. There are one-click apps that help do that, but probably the majority of users will not go through the hassle of rooting their phone and loading the latest and greatest from Google, especially when the phone is deeply customized for them already – all the services are very local.

When Google made its high-profile exit from China a few years ago, it also burnt all bridges for profiting from Android in what is probably Android’s largest market. If the Chinese government piles on regulatory action on top of this, the irony would be too rich. Regulatory fireworks aside, I expect local companies to continue to thrive off of forking Android – what will be really interesting is if any of those local players can gain enough domestic traction to start pushing their version(s) of Android in international markets.

How the West was Won (or, another round of “open” vs. “closed”)

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John Gruber posted a critique of a Tim Wu piece in The New Yorker. The ideas in the Gruber post are nothing new, but it’s interesting to see this topic come up time and time again.

Wu’s basic argument is “open beats closed,” with the modifier that “closed can beat open, but you have to be a genius.” Unsurprisingly, he enlists Wintel and Google as supporting evidence for why open beats closed.

Gruber specifically disagrees with Wu’s logic for why Windows defeated Mac in the original PC platform wars of the 80s-90s. In Gruber’s view, Windows won not because it was more open, but because Mac innovation had stalled, allowing Windows to catch up. He uses Mac’s brief period of allowing 3rd party licensing as evidence that being more open did not help Apple grow the Mac business; quite the contrary, after Jobs came back and closed off Mac licensing, Apple begun its resurgence.

Over at Techcrunch, Michael Arrington chimes in by stating that the Internet was the unmentioned factor that leveled the playing field for Macs – because the Internet became the core application, it mattered less that Macs had far fewer compatible software.

To me, the question to ask is (and has always been) why did Wintel win in the 80s/90s, and why was the Mac able to stage a come-back in the 2000s. Open vs. closed is simply a popular variation on this core question, because it has been twisted by folks such as Wu to be the critical success factor. It is not.

Wintel was immensely successful due to its leverage of network effects – i.e. the utility of the product grew as more people used it. Microsoft Word is powerful because everyone uses it, and the .doc format is near ubiquitous; if only one person used Microsoft Word, it wouldn’t be that useful outside of creating documents to print.

Wintel was also a two-sided network made up of both hardware/software vendors on one side and consumers on the other. This further reinforced the network effects on the consumer side.

The fact that Wintel chose to be “open” at the hardware layer (can be installed on any IBM-compatible PC) certainly helped drive adoption, but does not itself create network effects. The simple counter-argument is iOS – iOS is certainly “closed” at the hardware layer (exclusive to Apple’s products), but that does not prevent iOS users enjoy the network effects of iOS-exclusive apps (such as Instagram, which for a long time was iOS-only; another example is iMessage, which will probably always be exclusive to iOS).

Pre-Internet, the core application of computers were productivity applications such as Office, and Microsoft Office was (and Lotus 123 etc., before Office) exclusive to Wintel. In a sense, it is a bit of a chicken and egg problem – Wintel’s “openness” to hardware vendors drove OS market share, which in turn amplified network effects of the most popular applications on this platform, which in turn lead to more OS market share. It was a great, virtuous cycle.

It’s hard to say what choices Jobs would have made had he stayed at Apple in the late 80s; it’s a convenient side argument that Apple lost the 80s/90s platform wars due to poor business leadership, however I find this side argument to be often distracting.

Moving on to the late 90s, Arrington is correct in stating that the Internet leveled the playing field. Specifically, as the Internet became the core application, it removed the network effects exclusive to Wintel thanks to Office and other Windows-exclusive software. (Jobs’ successful negotiation to get Microsoft to develop Office for Mac is also Apple’s attempt at leveling the playing field.) And ever since then, network effects have had diminishing influence on PC platform wars – this is the underlying reason why Macs could stage a come-back from low single-digit market share; the beautiful execution (consistently excellent hardware/software iterations) also certainly helped.

As a corollary of this observation (diminishing network effects due to the Internet being the ultimate cross-platform application), we can predict that in the mobile platform wars, despite the seemingly dominant positions of Android and iOS, it is certainly possible for a late-comer (such as the new Firefox OS, and/or other new entrants) to enter the market and capture significant value. However, the success or not of those mobile OSes will not be determined by whether they are “open” or “closed” – by that measure, we can certainly already declare Firefox OS as the winner. The next few years in mobile will be very interesting.

Engadget reviews Pixel (or, how not to design for real-world users)

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http://www.engadget.com/2013/02/25/chromebook-pixel-review/

Sums up what I think of the device nicely with these two sentences:

For an MSRP that is on par with some of the best laptops in the world, the Pixel doesn’t provide anywhere near as much potential when it comes to functionality. It embraces a world where everyone is always connected and everything is done on the web — a world that few people currently live in.

Essentially, a product that was designed for Googlers, not for real-world users. This is not the first time Google has committed this mistake. It’s good that Googlers are passionate about what they work on; it’s bad that they equate themselves as good samples of real-world demand. And to be frank this is a very common mistake to make, and this is why at my work-place one of the most common phrases I hear is “I know I’m not real player[don’t represent a real user], but this is how I think about this feature…” so that at least the internal feedback is explicitly qualified.

2012 / 2013 tech thoughts

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Here’s a quick and dirty post to capture some of the thoughts that I’ve been brewing.

2012 to me was a year of continued trends in tech. Looking back, I couldn’t name any major disruptions in the major consumer-facing sectors of tech. The continued trends that I see are:

  • Rise of tablets vs. decline of PCs in all form-factors. The “tablets as cars vs. PCs as trucks” metaphor seems to be materializing everyday
  • Continued penetration of smartphones
  • Within smartphones, the platform wars mostly continued previous trajectory. Apple maintained, if not grew, its overall market share and leadership in the higher end segment. Android market share continued to be fueled by low-end devices (essentially, Android-powered smartphones at price points that replaced feature phones, and probably used as feature phones, if the mobile web usage data is any indication). Blackberry / Windows Phone remain on the fringe, while there continues to be new platform entrants (Tizen etc.)
  • In terms of apps and services, perhaps I’ve not been paying close attention, but there wasn’t really a defining new service that broke out (would Pinterest count? I don’t use it enough to comment). (Obviously not every year would there be a new Google / Facebook / Amazon / Twitter)
  • For buzz-words, “cloud” / “big data” are not new concepts by any measure, but they have gone more mainstream
  • crowd-funding (Kickstarter) got a lot more mainstream, but I personally would lump it together with the rise of angel investing a few years back as niche alternatives to raising capital. It’s a compelling alternative for very specific teams

Looking ahead to the rest of 2013, these are the things that I think may define the year:

  • Intensified competition to be the “center” of the living room, from all angles. Maybe Apple will do a real TV. Current TV brands will also further their “smart TV” offerings. There’s also a whole host of set-top box alternatives, anything from dedicated streaming boxes to new gaming consoles such as Ouya / the “Steam Box”
  • Related to the above, will this year be the year that the mainstream TV content model first see major disruption? There’s been a storm brewing for the past few years, but we’ve yet to see what the storm actually looks like. With every year more and more pieces seem to be coming together though
  • In mobile, I don’t expect smartphone landscape to change much, but it would be extremely interesting to watch how Android vendors compete against each other. Would Motorola stage a comeback / would Google become more determined to own more of the mobile value via hardware sales? Would Samsung make major platform decisions in response?
  • In tablets, I also don’t expect the big picture to change much, but would be interesting to watch how Android tablets continue to materialize and compete against Apple (as well as each other)

 

Max Payne 3 – semi review

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I’ve been spending a few hours this past week on Max Payne 3. I’m a quite a fan of the series, and consider Max Payne 1 & 2 among two of the best action games I’ve ever played (which is a limited selection, I’ll admit). As such, I was quite enthusiastic about the 3rd installment, but halfway through I’m sorely disappointed.

My main issues with this Rockstar production are two-fold – 1) narrative over gameplay; 2) frustrations at the core gameplay design.

The first is by far my biggest complaint with this title. The previous titles in this franchise were noted for their noir style as well as comic-book narrative device, which I felt worked extremely well with the action gameplay. The series has always been story-heavy, with fairly complex plots (for action games), but the story development never took too long or got in the way of the action. With Max Payne 3, it seems Rockstar has got the relationship backwards – the gameplay is very frequently disrupted by cut-scenes, some of which are often drawn-out sequences. These cut-scenes also serve as save points for the “chapters,” which is how the game is organized (missions, effectively). Each mission is therefore typically broken down into half a dozen save points; a mission usually do not last more than an hour if the player is not getting stuck. This means that the core gameplay is effectively being given out to the player at 10-minute (or even less) installments, which breaks all sense of flow and suspension of disbelief. Additionally, while Max Payne was never a franchise about open exploration of levels, the game at least offered flexibility and progression in terms of gearing; 3‘s structure completely breaks this – guns come by easily, and are also lost easily (some cut-scenes/save points seem to reset/adjust the inventory).

Regarding gameplay, my frustrations so far are:

  • Extremely restrictive and linear level design, with a extended on-rails shooter sequence in one level being especially blatant and bad
  • The extremely fragmented level design, with cut-scenes liberally sprinkled about. Also, the player is often immediately placed in a boxed setting with immediate threats, which may seem like a good way to throw the player straight into the heat of the action, but after a while becomes highly repetitive. It doesn’t feel like a free-flow action game, but instead a sequence of action puzzles, where the player has to figure out the path of least resistance out of a scripted setting.
  • The introduction of cover mechanics, while in line with modern shooters, doesn’t seem to fit well with the frantic (and arcade run-and-gun) style that the series is known for. My memory of Max Payne 2 is the extremely enjoyable (and definitely arcade-like) combat sequences where you are overwhelmed by enemies and have to charge in with bullet time; this type of experience rarely happens in this title, and bullet time effectively becomes a support to fast aiming from cover.
  • The under-emphasis of weapons – it seems, based on the 7 or so chapters I’ve played through, that Rockstar decided that gun variety / uniqueness is not important at all to this game. Sure, the previous titles didn’t have any ridiculous sci-fi weapons, but previously each gun felt unique and acquiring a new weapon was an exciting moment; in this game, the guns are extremely generic, and because of the “streamlining” of inventory (reset every chapter, and sometimes within a chapter) there was little excitement when you ran across new arsenal.

So far, I’m still enjoying this title, but barely. There are genuine moments of suspension of disbelief, where you have an extended action sequence uninterrupted by cut-scenes and you are focused on making pathing decisions instead of being presented with a scripted scenario which you have to get out of. But these moments are hard to come by and I keep invoking memories of Max Payne 2.