Archive for April, 2013

Apple and Huawei – Zen and the Art of the Long View

Monday, April 29th, 2013

Article first published as Apple and Huawei – Zen and the Art of the Long View on Technorati.

The telecoms and technology markets have always taken the long view with regard to product and business development. This week has seen two companies look to the future in different ways. Apple, the original Zen Master of strategy, coming to grips with an apparent hiccup in their recent string of successes and Huawei struggling in the aftermath of rejection by the U.S. government.

Apple has been in the press recently due to the substantial fall in its stock price and the increasing demands from shareholders to receive part of the $145 billion cash mountain that it has amassed. Apple CEO, Tim Cook, finally acquiesced and has just announced a capital buyback program that will increase the return to shareholders from $10 billion to $60 billion, as well as increasing its quarterly dividend by15%. This may quell the unrest of Wall Street investors in the short term but it exposes the company to a significant long term threat to their enterprise viability due to their increasing risk adversity and lack of innovative product introductions, particularly when compared to those of Samsung. It’s very easy to slip from grace and require cash to sustain operations if you miss market turning points – have a look at what happened to Motorola, Nokia and Rim! Steve Jobs, with his Zen Master ability, excelled at recognizing long-term future opportunities and betting the company in order to secure that future. He was protective of the cash, understanding that to “bet big” you need to cover the downside mistakes. Unfortunately, that doesn’t appear to be the case with Apple today.

Contrast this with Huawei that announced within the last 48 hours that it would abandon its pursuit of penetrating the North American telecoms network market after five years of battling the U.S. government. At the same time as this apparent retreat, however, Huawei has begun focusing on building its consumer product brand in the U.S. The company’s introduction of new products at this year’s CES gave it significant presence, and this month it announced a new marquee handset along with sponsorship for the Jonas Brothers tours, starting in Chicago. Huawei appears to be adopting a long term strategy to establish itself at the heart of the U.S. psyche as a “brand of trust”, potentially making it more difficult for them to be politically blocked in the next round of network purchases. Equally, since 4G networks have effectively been sold and rolled out in the U.S., the market opportunity is now elsewhere. The reality is that the market momentum of Huawei globally over the next five years will probably cause two of the five remaining network providers to be eliminated, meaning that Huawei will be the only real alternative to Ericsson when network operators look to upgrade their systems in 5 years time. The bet is that the U.S. government will have little choice but to reluctantly accept Huawei, even if it’s not with open arms.

The Zen Master, it seems, has actually moved back to China.

Steve Bell, President, KeySo Global

Connectivity – The Space Between

Tuesday, April 23rd, 2013

How WiGig, a new standard, could fill the gap

This year’s Mobile World Congress in Barcelona (MWC 2013) provided an opportunity to foresee the future of wireless technology, not just for mobile phones but for all connected devices.

As this picture confirms, the average computer invariably needs to be connected to numerous other devices in order to perform its multiple daily tasks. Increasingly, the converged world is blurring what content and applications can be obtained from what device; films are available on tablets, Internet on the television and video conferencing on PCs. For those of you who embrace these new opportunities there is invariably that moment when you need to swap from one device to another or share content simultaneously between two devices; at this point you’re scrambling to find the right connector, adaptor or cable. In the very near future this situation may be a thing of the past. Connecting the space between devices and enabling easy and rapid sharing of data, video and connectivity became a step closer to reality over the last three months with the unification of the WiGig and Wi-Fi Alliances.

For the past five years, the Wireless Gigabyte Alliance (WiGig) has been developing a new wireless standard that operates at 60 GHz and can deliver data rates up to 7 Gigabits per second – approximately 10 times the speed of the fastest Wi-Fi technology currently available. One of the major proponents behind this technology is Intel which envisions a future of all your devices cleverly synchronizing masses of data, and without effort on your part. High definition video and images will be instantaneously sharable between PCs, televisions, tablets and other consumer electronic devices. Another proponent, Panasonic, has already demonstrated their prototype WiGig-enabled SD card, showing how it will only take one minute to wirelessly transfer a full DVD video from a wireless controller to a display mounted within a car.

The memorandum of understanding between the Wi-Fi Alliance and WiGig Alliance comes shortly after the IEEE has approved the WiGig standard as 802.11ad, thereby encompassing it within the Wi-Fi family. It is hoped that this unification and standardization will help drive the mass adoption that the Alliance has been aiming to achieve by changing the “perspective of end-users that it was two different standards and two different brands” according to Dr. Ali Sadri, President of the WiGig Alliance, when I interviewed him at MWC 2013 in March.

With multiple manufacturers planning to install WiGig technology into devices across a broad spectrum of consumer electronics products, this will not only increase the speed of massive data and video file transfer but also – through improved and efficient protocol adoption layers (PALS) – facilitate enhanced applications for HDTVs and other consumer electronic devices in the future.

Another potential benefit of WiGig could be seen in large venues, such as shopping malls, sports stadiums, hotels or conference facilities, where high speed, ubiquitous coverage for high volumes of users is difficult to provide using current Wi-Fi technology. The 802.11 ad / WiGig standard will allow five access points instead of the single Wi-Fi access point currently in existence, thereby allowing approximately 50 times more capacity. In addition, the range is controlled utilizing sophisticated beam-forming antennas with a footprint of about 10 m so that overlapping footprints can be created every 10 m or so, enabling users to connect and shift seamlessly between access points while maintaining a high speed data link connection.

Needless to say, key players in the semiconductor industry such as Intel, Broadcom and Samsung will be aggressively marketing this technology. They may not have to push too hard because the huge appeal of being able to wirelessly connect devices and seamlessly share ever increasing amounts of content is bound to drive rapid consumer adoption. Finally a solution to all those trailing wires and connections!

Steve Bell, President KeySo Global

Digital Awareness – a Critical Component for Success

Tuesday, April 2nd, 2013

A key pillar of our work at KeySo Global is the belief that digital technology has significantly impacted and changed the digital lives of every one of us, and that systems and business models are consequently having to adapt to meet multiple stakeholders’ expectations.

Business models are dynamic and unique, and are a reflection of historic development, management personalities, economic and business environments, customer and channel requirements as well as resource, assets and technology. As much as humans like stability, no business model stays the same, no matter how perfect it seems at the time.  In their 2001 book entitled “How Digital Is Your Business” Adrian Slywotzky and David Morrison compared the brilliance of the Dell business model with competitors like HP, Compaq and, at that time, struggling Apple. Dell spent limited amounts on R&D, leveraged a choice board for consumers to design their own PC, and outsourced manufacturing to Taiwan and distribution logistics to FedEx; this was seen as a virtue at the time when compared with HP, Compaq and Apple. Technology and a successful business model don’t guarantee success if a company doesn’t keep up with consumer need changes or fails to innovate. The focus that Apple placed on user experience changed the game; in recent news we’ve seen how Dell’s business model is now struggling to compete against the growth of smartphones, tablets and cloud services – particularly those of Apple.

Being aware and responding to developments around you is a significant and important part of senior management responsibility. We strongly advocate the interaction with external resources that will bring a different perspective to a business. Utilizing “thought leaders” or tools that allow the current situation to be viewed from a different vantage point can greatly strengthen a company’s thinking and focus. As the saying goes “no single event makes a trend” but the search, listing and assembly of data from multiple sources can enable companies to recognize emerging patterns and opportunities, particularly in complementary industries where competitive shifts in business models could be applicable.

Over the last few weeks I’ve observed in the news a number of noteworthy events that will, I’m sure, impact multiple industries. I’ve listed these below, together with what I believe are the broader implications for business.

Recent news events:

  • Online clothes shopping hit 10% of U.S. sales.
  • Macy’s overall sales increased by 11.7% and their online sales increased by 48.9%.
  • H&M and Inditex – European fashion retailers – are reported tochange their in-store clothing range every two weeks.
  • 15% of shopping malls will close in the U.S. over the next five years.
  • Amazon’s fourth-quarter sales were down but their margins increased.
  • Netflix develops streamed original content (House of Cards) targeted at “cord cutters” abandoning cable and satellite TV.
  • Traditional Procter & Gamble partners with crowd sourcing venture capitalists “Circle Up” for new ideas and innovation.
  • BSkyB in the U.K. introduces advertising based on localized demographics and TV program choice.

Digital implications for your business:

  • smartphones and tablets have changed consumer behavior patterns i.e. online couch shopping and mobile price comparison
  • traditional T.V. advertising is losing its effectiveness
  • the digital consumer expects broader and more frequently refreshed product lines
  • digital business models enable diverse competitive offerings
  • traditional business models now embrace crowd sourcing and funding

If they haven’t already done so, these implications and others like them are likely to impact your business model. My message here is that you need to become aware of digital change and be prepared to do something about it. Have you checked to see if neighboring industries and competitors are already responding to the urgent need to adapt? The big question is – are you? Are you ready to take the first steps towards adopting a digital strategy, one that will strengthen your competitive position in today’s digital marketplace?

We at KeySo Global can help. To discuss how you can structure a digital strategy innovation session, contact us at info@keysoglobal.com or visit our website www.keysoglobal.com

Steve Bell, President KeySo Global