One of Steve Job’s greater accomplishments wasn’t design or marketing, it was negotiating with an intransigent music industry and convincing them to let the iTunes Music store sell music one song at a time. At that time, Apple was able to convince them that well designed products and an integrated ecosystem would sell more music than they had done in the past, if only they would make a risky change and invest in his vision.

Apple and Jobs performed a similar task with the new iPhone in which they mobile phone providers were slowly convinced to subsidize the steep price of the iPhone so that consumers would have access to then superior technology and user experience without having to pay the hefty premium Apple needed to get it to market.

The next big thing, so some pundits are saying, is the iWatch. We’ve been hearing about Dick Tracy style connected watches from Samsung, Motorola, as well as smaller start-ups such as Pebble for sometime while the market seems ready to wait and see what Apple brings to the table. But what could they do? What is the real use-case for these smart phone accessories attached to our wrists.

I can think of a few clever ideas beyond just talking into your wrist or rejecting calls but I really can’t imagine that being much of a justification for another screen within easier access. The wrist screen might be used to improve GPS guidance (think smart arrows), and, if it had cellular phone connectivity built in, we might be able to grab all of our music (and more) from the cloud, but, like many, I still don’t see how that justifies the likely cost of these things (or has the battery life to do it for long).

Apple may be focusing on fashion more than functionality (given their recent hires) and perhaps there is an opportunity here, but fashion certainly isn’t the game-changer that will prove Tim Cook is a worthy successor to Jobs. During the 2014 Apple World Wide Developer’s Conference (WWDC), apple released specs for their new Health Kit and Home Kit APIs and, hopefully, those may be hints that Apple has more to offer than just another smart-watch.

FitBit, Nike Fuel and a host of similar devices have demonstrated a vibrant market for wearable technology that provides user feedback about their health. Health Kit is aimed at integrating all these sensors into the iPhone. Unfortunately all these purpose built sensors measure only a few bits of data and don’t represent a platform on which vendors could build and scale.

Apple has a platform ready to build on.

Meanwhile, insurance companies regularly encourage customers to improve their health; sometimes offering competitions and inducements to participants at larger employee providers. Health wearables can offer strong encouragement to users to lose weight, get enough sleep, eat right and so on, and they do this by collecting the data and reporting it to the user (often on a smart-phone). Apple frequently looks at the short comings in an existing marketplace and puts together an ecosystem and a product to address it. The solution I hope they come out with isn’t the iWatch, it’s the HealthWatch.

The HealthWatch isn’t just a NikeFuel band or FitBit, it’s a an extensible platform that can accept heart-rate monitors, pulse-oxymeters, diabetes monitors and more. It coordinates with the iPhone to run these applications (and sell them) to users. It can provide the data to health insurance providers to reduce costs. But why would users want to provide this data to their insurers? If Tim Cook can repeat Jobs’ strategy, it’s because the insurers are the ones paying!

No one but Apple would have the clout today to approach Insurers with this pitch. Apple can provide a winning, extensible platform that is a goldmine of valuable information; but, so goes the pitch, they won’t be successful with this amazing new product if they have to compromise. And no compromises, means a premium price. In trade for that goldmine, insurers will have to pay, just like the music industry did a decade ago and phone companies a bit later: they’ll subsidize the cost. The insurance companies know that Apple has the platform and ability to execute like no other company in the market.

The HealthWatch will tell time and reject calls when there’s a phone nearby, but it’ll also have to have value as a stand-alone device. If it’s just a dongle off of a smart-phone, why bother? But if it’s storing insightful information about your health 24/7 even when you’ve left your phone at home. The data can be downloaded later to that smart-phone, or iPad, or even a web-page and suddenly the HealthWatch actually doesn’t have to be a wrist mounted phone to provide value; and that extends battery-life!

Further, in addition to selling apps on the App Store, the HealthWatch will start selling hardware, because sensors often require more than just programming; they have to get real data out of your body (or…out of your home: HomeKit could have a similar play, requesting subsidies from energy providers to revolutionize the SmartMetering market). Apple doesn’t have to make all of this hardware, but enabling the platform to link it all together and sell it to consumers is a huge competitive advantage that only Google can approach.

Let’s see what this Fall brings, but I sure hope Apple can meet or beat this idea; because, really, who really wants just a fancy iWatch?

Do you print your own books? Most of us have a printer at home, but we’re not doing that much with them these days. Sharing GIFs on Facebook has likely taken attention away from home printing. Somehow, though, despite more than a decade of predictions of its demise, the printing industry is doing just fine and our mail boxes are still filled with flyers and post cards promoting groceries and vacation rentals. Home printing turns out not to be an occasional need, but centralized industrial printing has stayed as steady as ever.

Meanwhile, 3D printing is all the rage in business media. In the latest bombshell, Stratasys, one of the leading manufacturers of rapid 3D printers for rapid prototyping just purchased MakerBot, the leading manufacturer of DIY 3D printers for hobbyists. 3D is tough to do at home. If you’re not a CAD specialist, you’ll need some sort of 3D scanner. Recently PrimeSense, the technology behind Microsoft’s Kinect, was kicked out of Microsoft’s latest Xbox in favor of a time-of-flight technology, but neither Xbox camera offers much resolution, after all, they’re for gesture recognition, not 3D scanning. While 3D scanning technology has been around for a while, most of the high-end systems cost many tens of thousands of dollars. Fortunately, there are companies like Chiaro Technologies, a Boulder-based startup developing 3D capture technology that might cost a bit more than Kinect, but offers an order of magnitude more resolution and accuracy, just what would be micro-manufacturers using 3D printers will need.

It sounds attractive, exciting, even intuitive that everyone would like to print 3D objects at home. It’s too bad that as great as it is to have a MakerBot in your garage, it really can’t do much and each print isn’t cheap. Each 3D printer is optimized for a different material and procedure, but in the real world, objects are made out of combination of materials. Making things with your 3D printer is far from point and click today. You need to get the data, either by modeling or scanning, then massage it to fit the printer you’re working with.

These challenges haven’t scared investors, who are surely excited that Stratasys acquired MakerBot. It justifies a great deal of investment in other 3D businesses. Yet, maybe 3D printing isn’t ready to take home. One company might have the right idea and that’s Shapeways. Shapeways has a manufacturing plant with dozens of different rapid prototyping machines. They have 3D Systems machines and Stratasys too. They probably have a few MakerBots! They also have a rather fun website where designers can submit 3D model designs and others can buy them, quantity one, shipped right to their door. It’s custom manufacturing brought to the smallest quantities, and you didn’t have to learn how to use the 3D printer yourself!

We don’t print books at home but that doesn’t mean we don’t want to print things. If home printer use has slacked, “How much,” Shapeways must have thought, “are you likely to use a 3D printer that does much less, costs much more and is much harder to use?” So they’ve capitalized on the 3D printing excitement by offering something all of us can take part in with very little friction at all.

Which brings me to 3D scanners. Everyone with an Xbox and Kinect has a 3D scanner already (and many are, indeed, using these with their 3D printers). Anybody with a camera, a bit of skill, and an Autodesk account can upload stereo images and download 3D data from the cloud. Neither have nearly the accuracy or resolution to really make much.

Kinect may soon be everywhere, but useful 3D scanning will likely wind up in your corner hobby store before being simple and inexpensive enough to take home with you. Even today you can walk into stores like Direct Dimensions and have your face scanned for your very own avatar. Real DIYer’s need enough accuracy to ensure that their new bike-grip-phone-holder fits all the parts the way it should, and for that they need a 3D scanner designed for 3D capture not gesture recognition. Companies like Chiaro are developing scanners that are inexpensive enough to be hosted anywhere, without sacrificing quality, even if they aren’t quite small enough to fit in your cellphone and take home with you yet. Together, scanners and printers will allow us to make amazing customized things. What remains to be seen is whether or not it’s something we need to do in the garage or whether we can just send the file out and get our new custom gadget in next day’s mail. Sounds like a good start.

A few hours from now, Apple will be hosting a keynote speech at their 2013 developer’s conference. Apple hasn’t released much for quite some time and is often the case around these events, rumors have begun to swirl like tornado in the plains. There’s a lot riding on this presentation because it’s finally time to start seeing if a post-Steve Jobs Apple can still make a big splash.

And that’s a big dilemma. The market, from Wall Street to main street is expecting products and announcements from new operating systems and user-interfaces for both desktop and mobile to new iPads, cheap iPhones, new ultra-thin portables and a power user MacPro.

If Jobs we’re still in charge I would confidently predict what Apple will do this afternoon: they’d release just one (maybe two) of those things (probably a MacPro, and maybe MacBook Air). They’d talk about software and keep things nuts and bolts for developers, letting the interface changes stay locked away for a while longer, while focusing on one or two products at a time.

Wall Street would punish them for not being innovating enough, but the media would focus on those products and the market would have enough time to digest the news and run out and buy whatever it is they want before the next bit of news is released.

With the stock price off more that 25% from previous highs and people grumbling about the lack of entirely new product spaces, CEO Tim Cook may feel compelled to placate and release news on all of these fronts.

If your small business is ever the power house of development that Apple can be, resist this temptation. There’s nothing in it for you. No matter how exciting and innovating each product is, only one of them is going to get the limelight, and worse, you might not be able to choose which one that is. It’s a waste of marketing effort and money, even if expectations are high.

As for Apple, I’m really hoping they resist the unusually high temptation to show it all, but if I had to bet, I’d say it’s going to be a big show. Too bad.

The internet is a buzz with prospects of Apple making an iWatch. And now, analysts are saying it’s not a good idea: watches have too little margin, their too competitive, and it’s just not a big enough deal for Apple.

Apple will be wise to ignore them.

Have you heard of the iPod? They’re not selling like they used to, but these little music players were once all the rage. They’ve mostly been replaced by phones, but in fact, many people, particularly exercise enthusiasts, still use theirs. Apple once made an iPod that even had a watch feature built in and it was so popular that people starting making their own wristwatch bands for it.

What could Apple do to revitalize its iPod segment? Why it could add useful features to the iPod. The iPod could have a built in wristband and receive information from your phone. It could start and stop music from your phone and pause when a call comes in. It might show you your heart rate and read outs from your GPS (all in an app in your phone). Wouldn’t this be better than an iPod? Might you consider upgrading your iPod shuffle or nano for one with these nifty features?

For some reason, all these analysts have missed this simple fact. An iWatch is a new segment they say. It’s building a new eco-system. Is there even a market for it? Since Apple has already made an iPod that worked like a watch, I am dumbfounded at how no one has noticed that this isn’t a new segment at all.

Apple has built up a reputation for life-changing devices and the stock market is expecting nothing less. That’s the argument given why Apple shouldn’t make an iWatch–they’ll disappoint the stock market. Except it’s ridiculous. It’s good business to make good products, even if they’re not ground breaking. The lowly iPod was the first step in remaking Apple; it seems almost sad that it’s all but forgotten now. Good thing Apple hasn’t forgotten it.

Bloomberg quotes Thrivent analyst Nabil Elsheshai “It’s no coincidence that Google’s rise has coincided with Apple’s demise. Making money from services versus devices is growingly perceived as a better business model.”

Please, correct me if I’m wrong, but somebody has to make something for a service to actually be of any value at all.

You service your car; no car, no service.

You get information from the web about where to buy things; nothing to buy, no reason to search for info about it.

Crowd sourcing tells you which restaurant you want to eat in and Pandora streams music to your desktop, but the food had to be prepared and musicians had to create the music; everything, it seems to me, starts and finishes with things.

Right now, Google makes much of its revenue related to advertising. It’s genius really, all the ways they skim money from that business and what it’s done for them. For that Google should be commended. But to suggest that services are more valuable than devices seems crazy to me. On the plus side, Google makes money from the advertising of, well, anything. That’s, no question, a pretty big stream of money, but it’s literally pennies an ad. Margin per transaction is important for a business because each transaction, even with Gooogle’s efficiency, costs something.

Meanwhile, thing-makers, like the companies I usually work with, have to set aside some of their margins for advertising—money they’ll pay maybe to Google in order to get the word out about their new thing.That advertising dollar can never be greater than the money made from the thing in the first place though, can it? Google’s ultimate market, if unopposed and if they get every advertising dollar out there, is certainly large and, likely larger than Apple’s. Apple can make only so many different categories of iDevices after all. Except Apple, and all of us thing-makers (manufacturers) typically make quite a bit more money every time someone buys our object; even if we pay Google a little bit to help convince them. The broader suggestion, that services are more valuable than things is ludicrous.

It’s annoying because one thing may be true about this quote: perception. Small startups selling real live things you can touch and use have a hard time just competing for investor ear-time with thousands of software models based on some variation of ‘get a load of users for a service and then sell the users to advertisers.’ Usually this business model is called a service, but it’s driven by advertising, and there is only so much advertising revenue to go around. And it’s always going to be smaller than the revenue from selling actual objects.

In other words, without the nouns, there’s really no reason to bother describing them.

Imagine you get a letter in the mail predicting who will win the weekend’s football game—and, it turns out to be correct. Before next weekend, another letter arrives and it too predicts the outcome of the weekend’s game. This amazing streak repeats for eight weeks in a row and at this point you’re absolutely amazed at the sender’s ability to correctly predict the outcome of these events—and that’s when the ask comes. That’s when the letter writer requests something of you in trade for his amazing predictions. Eight in a row sounds like a pretty good bet; so there’s little to lose, but, of course, it’s a scam.

It’s remarkably easy, after all. Our letter writer has prepared multiple letters split between predictions of which team will win. The next round of letters is sent only to those who received the correct letters in the previous week. You are simply the lucky recipient of a series of correct letters; but many, many others stopped receiving letters much sooner.

It’s virtually the same scam, perpetrated every day, by financial analysts. Take, for example, this New York Times article.

Last September, Apple shares hit a record $705. And to the overwhelming majority of Wall Street analysts, that meant one thing: buy.
By November, with Apple stock in the midst of a precipitous decline, they were still bullish. Fifty of 57 analysts rated it a buy or strong buy; only two rated it a sell. Apple shares continued their plunge, and this week were trading at just over $450, down 36 percent from their peak.
How could professional analysts have gotten it so wrong?

[…]
It may be no coincidence that the only analyst who even came close to calling the peak in Apple’s stock runs his own firm and is compensated based on the accuracy of his calls. Carlo R. Besenius, founder and chief executive of Creative Global Investments, downgraded Apple to sell last Oct. 3, with shares trading at $685. In December, he lowered his price target to $420, and this week he told me he may drop it even further, to $320.

Is Mr. Besenius really the only genius who called Apple’s retraction? Mr. Besinius certainly thinks so. “I’m paid based on performance,” he said. “I have to go to my clients and explain why they should pay for my research when they can get it for nothing from the firms where they pay their trading commissions.”

Really, though, Mr. Besenius is just writing letters and he makes it into the news when he gets a series of them correct. The other letters, the ones he falsely predicted, simply get ignored. And that’s what will happen to this one. Apple, for example, has climbed for a week from 440 to 480, and that’s after paying out a dividend. Surely someone called that too.

What’s the difference between Apple’s iPad and Google’s Nexus? Sure there are differences in prices and features, but what really sets them apart is in how these products make money for their manufacturers. Apple has always been a hardware company, and one that has managed to demand high margins on the hardware they sell. From Apple’s point of view, software is simply an absolutely critical part of the Product (with a capital ‘P’). Apple views software as something that combines with the device ships to you in a package and together they are the product you buy. For this reason, well integrated software is critical to your purchasing choice.

Of course, Google knows about software too. What makes Google so innovative is that they use software to sell something quite unexpected. What Google is selling, above all, is ad revenue. Even the Google Nexus device is subsidized by the business model which says, it’s not about the device, but rather owning the platform through which potential consumers gather information about purchases and then selling this information to advertisers. It’s an old idea made very new again, and Google is the absolute master of it.

Google, and Amazon for that matter, want to make revenue off the channel to market. More Nexus tables into user’s hands is a very good thing. The critical element here, though, is not just selling customers razor blades, but making sure that they are using them to shave. Of course, Google is aware of this and that’s why so much ongoing effort is focused on creating and improving the Android mobile operating system. Apple, meanwhile must ensure that its operating systems are engaging only if they hope to sell you another iPad someday in the future; or to your mom, or brother. Google’s model scales better (how can you still make money when everyone’s already bought an iPad?) but has its risks.

Given the disparity in how Apple and Google try to make money, this info graphic from IBM is an eye-opener. One read is that even as Andriod catches up to and even surpasses Apple’s iOS in number of users, iPad and iPhone users spent more time actually using their devices for, at very least, shopping.

If Apple devices engage their users longer and better than Android users, that is some pretty disturbing news for Google. Apple needs to make better software so that customers will recommend their products, but beyond that, once they’ve sold a device, they have relatively few channels to make money from them. Google, meanwhile, is depending on the use model, for that is a critical piece in what they sell to their customers (advertisers).

The lesson for consumers might be to understand just who the customer is for a given product and be sure you’re it. If not, you have little leverage to be sure you’ll get the best experience going forward. For manufacturers, (and Google) it’s a sobering example of how important it is to understand the ecosystem of your product. Specs are so 90s, use-case is third millennium, and now we have to add engagement, if we want to make sure our products succeed.

Analysts are worried that a new iPad mini would cannibalize Apple’s iPad sales. They’re right, of course, but that doesn’t mean there is anything to worry about. Apple is practicing a time honored strategy for successful businesses, both large and small. I call it “Be Your Own Competition.”

For the past two years starting with the Blackberry Playbook, which went nowhere because of its high price to the Kindle Fire which sold like hotcakes as Amazon is more interested in selling content than devices and were comfortably able to subsidize the cost of their products; the market has seen a range of smaller, cheaper, tablets. Apple, meanwhile, has stood on the sidelines, insisting that a smaller interface doesn’t really bring about the advantages of a tablet at all.

I’ve finally spent some time on an iPad and, I have to begrudgingly admit that I agree. The size of the screen is part of the interface. Games and applications take on a different level of interactivity simply by offering more room than on a smartphone. Unfortunately, this doesn’t make me want to own an iPad. It’s too expensive and still can’t do what a notebook can do for me, and worse, the size makes it just too ungainly to use in a truly portable fashion like, say, I used to use my Newton (stop laughing).

I travelled recently with an iPad, attempting to replace a guidebook with this single device that could also help to book hotels. I needn’t have worried so much about looking ostentatious as many people seem to think that iPad actually makes a good camera; holding up this giant slab in front of monuments and looking utterly ridiculous. It worked well enough that I doubt I’ll be bringing paper guide books along in the future, but the iPad was still too big to tote around or to whip out during a walking tour.

The larger interface is nice, the size is right, for many things, but I am still not going to buy one. But an iPad mini? That could truly be the crossover between feature-poor, does one thing super well, e-book readers, and feature-rich, does loads of stuff super well but cost more and are too big tablets.

Of course, these products exist already such as the aforementioned Fire and the Google Nexus. Which brings us to Apple’s problem. Releasing an iPad mini will, indeed, likely cannibalize sales of their iPads (and iPod touches) and worse, competing with the existing market will do damage to Apple’s enviably high margins, but who better to steal your sales away than yourself?

When you’re thinking of your next product and wondering if it will cannibalize your market, ask yourself if someone isn’t already trying to do that already. It’s much better to be your own competition than to let someone else do it.

Everyone already hates Microsoft’s Surface which shouldn’t really be surprising, because, when I say “everyone,” of course, I mean internet pundits who hated the iPod, iPhone, iPad and most everything else they now love to death (and provide as evidence for why they hate the Surface). Look at those headlines in the links: “Surface table guaranteed to fail”, “Will Microsoft Surface Sink?”, “Microsoft’s table could be a major loser.” Hopefully Microsoft subscribes to the ‘say whatever you wish, just spell my name right‘ school of marketing.

I don’t want a Surface. Of course, I don’t really want an iPad either. These are great devices for consuming content, which, of course, is most of what we do, but I haven’t seen how I would even successfully edit a blog post on an iPad. (I have to switch back and forth between many, many pages to find links, for example.) Ultimately, I like tablets, but they’re just too expensive for my current usage to justify one. And I don’t want a Surface because I am a Mac user. I doubt that there would be much added value for me using a Windows-based tablet with my Mac based laptop. But then, I am not the target market and none of this is to say I don’t think Microsoft is doing something right here.

Apple took its desktop operating system and scaled it back so that it could work on a mobile device. It’s the same programming language and borrows much from the existing infrastructure. Microsoft is doing the same thing. It remains to be seen just what they’re leaving out in order to make it effective for mobile devices, and what you leave out is often critical to success, but it enables existing developers to make minor modifications to existing applications quickly.

Apple built a “there’s an app for that” eco-system which competitors are finding it hard to break through. Microsoft has a huge leg up if their tablet runs PC software—for real—not just new software with the same name, like the used to do for WindowsMobile. Microsoft can pretty much claim they have more apps that even Apple’s juggernaut of an app store. They are a few steps behind; typically Windows apps aren’t selling for $0.99, but if you can ensure a bigger pirate-free market for applications as Apple has done with its AppStore, you can convince developers to accept less on a per unit sale. Apple’s own software, for example its office-like suite iWorks, sold for $49 – $79 but dropped to $19.99 the day the AppStore for MacOS went live. Other developers followed suit. Microsoft needs a functioning online store, and a market that will use it (Surface owners) but clearly, they have been putting these pieces in place.

Apple owns the whole widget; which really means they can be a bit more secretive about what they’re going to sell, they can integrate features more carefully and thoughtfully, and they can optimize performance. Microsoft could always do this, and while it’s only been really nice mice, a very successful Xbox and a not so impressive Zune so far, there is no reason Microsoft can’t make stuff they make software for. Much of the gnashing of teeth has transpired since Microsoft decided to compete with their partners, but really, where are ASUS (who complained) or Dell (who didn’t) really going to go for their operating system? Let’s face it, Windows is still around 92% of the desktop OS market and not in a great deal of danger if their partners get a little miffed. What integrating does mean is that instead of begging their partners to please make a cool device around their new operating system, they can take control of the buzz and the marketing and actually get the thing into people’s hands without depending on partners. In today’s post-PC market (there will still be PCs, but clearly, there is more going on than just desktop computers when iOS holds a 62% of search) making your own mobile device, software and hardware, is proving to be a powerful solution.

Microsoft made at least one clear misstep, as far as I can see. You can’t actually buy one. The website has too little information for folks to decide they want one. Some are suggesting Microsoft will sell this only through their own stores (of which there aren’t very many) and we don’t really know what the price will be. Even though it actually looks like a bolted together laptop with ridges and screws and panels, and not what people have come to expect from mobile phones, it does weigh about the same as an iPad; it’s about as thin as one, and it has a heck of a lot of ports! Except, without an availability date or a price, it isn’t really a product.

Will the Surface be a hit? We can’t even know if it isn’t vapor-ware at this point and I can see little value in Microsoft pre-announcing it. Frankly, though, aside from the launch, this may be the best product and strategy out of Redmond in years. When people say they’ve finally stopped copying Apple, they’re wrong; this time they’ve finally started copying just the strategy that may pay off.

Addendum: 21 June, 2012, I just want to add a few more points.
Apple reinvented the tablet market by suggesting that trying to be all things to all people isn’t the right way to go about it. When the iPad first came out, many thought it targeted netbooks but only had a terrible on screen keyboard. Well, why has it dominated netbooks so successfully? Perhaps because netbooks were just too underpowered to manage full PC software, and too flimsy and poorly put together for people to really feel they could take them everywhere and anywhere.

In fact, Microsoft’s surface might well be the perfect netbook. It’s good looking and rugged and easy to take with you everywhere, but still runs PC software Netbook’s attraction was also in their price. Apple was arguably able to charge much more for less, but the attraction PC users have to bring their applications with them may outweigh their cost expectations.

Finally, IT/IS departments everywhere can return to their (evil) original ways back before the “bring your own device (BYOD)” days and tell their executives: ‘you want a tablet? Fine! Here’s a surface! Now stop asking me to somehow manage your iPad in our company security.

Yup, I still don’t want a Surface tablet, but I think, contrary to just about everyone else on the net, it seems, Microsoft may have a hit on its hands.

I’ve had a Flickr Pro account for years after a very kind, and prescient, friend gifted one to me. He was prescient because he’d already been on this early social networking site for years and was trying to help a budding hobby photographer get with the third millennium. I really enjoyed Flickr too, in fact, it’s the only internet property I’ve actually shelled out money to use, but Flickr, frankly, hasn’t been going anywhere. I haven’t been uploading many pictures lately and a few months back I let my Flickr Pro status lapse.

Gizmodo’s detailed description of the hows and whys of Yahoo!’s mismanagement of Flickr is an amazing, and perhaps disturbing read. It’s also a must read for flickr users, social media creators, and maybe anyone who’s working for a company that’s been acquired by another.