Peter Christy

Why You Should Really Pay Attention to the iCloud .......

In the recent newsletter, John talked a little about the recent Apple introductions at WWDC. I think that the implications go far beyond the surface and deserve attention. Here's why.

• Last year Mary Meeker pointed out that in 2012 more smart phones would be shipped than PC's. We're clearly at an important inflection point. Inflection points are confusing because they are about rate of change, not volume: the installed base of PC's is far greater than the installed base of smart phones and it will be for some time. But the world is changing and we're seeing that right now, unambiguously.
• If Jobs were to just watch, as a key particpant in the new platforms his position would get stronger over time, but he's accelerating the process in a very clever way.
• iOS 5 was introduced at WWDC and will be available later this year. With iOS 5 it will no longer be necessary to have a PC or MAC order to maintain your iPhone or iPad; they become "untethered". They will come from the factory with enough software built into do those functions by themselves as long as they have Internet connectivity.
• That still leaves the PC or Mac in the equation as the place you store al your content and keep your various devices up to date with each other. As Jobs pointed out, the coordination process is tedius requiring serial synchronication of each device, possibly more than once to get all the exchanges and updates done.
• iCloud fills in that gap (a shared content repository) and by implementing Groove-like synchronization greatly simplifes the device coordination as well and by doing so makes having a PC or Mac for those functions unnecessary.

It's likely that these new features will "canabalize" Mac sales. The rush for the iPad is pretty obvious; how many of these new Apple users also bought a Mac as well?  But Jobs clearly understands that accelerating the move to unteathed, mobile, wireless (and non-Windows) devices is all in his favor.

This isn't only about individuals and personal devices I think. We need to reimagine how IT will be done in the interconnected, mobile device, Cloud world that is rapidly upon us. To stimulate your thinking, imagine a small business running on iPad's, sharing and replicating data locally, and linking to shared applications that run in the (i)Cloud with no local "servers" whatsoever. What's wrong with that picture other than the implications for Microsoft?

The Year of the iPhone

Having worked at Apple during the period when Michael Spindler tried to create an OEM Mac ecology and failed, when the iPod came out I foolishly predicted that Apple would once again grasp defeat from the jaws of victory and screw things up when it came to high-volume, low cost devices. Boy was I wrong. Now, possibly equally foolishly, I'm going to step out on the other side and suggest that the iPhone will take over the world (at least at first approximation). The question I ask is how many categories of portable and mobile devices don't really make sense any more if you can just create iPhone apps instead. Car Navs for example: most are pretty clunky compared to the iPhone versions, and a phone has built in cellular connectivity to boot (not to mention Wi-Fi in many cases going forward). If you own the phone already, and the navigation apps don't cost very much, why would you want a new and different device rather than just buying a car mount? John and I were breakfasting in Palo Alto recently and I encountered a parking "meter-man" and chatted him up. He was using a bright-yellow handheld and entering in license plate ID's manually. I asked him why he didn't just snap a photo and his answer was "damned good question" more or less. The device was a Trimble Nomad, a Mobile 6 device with cellular and camera options, and of course GPS, since it's made by Trimble. But those units seem to sell for $2,500 and compared to an iPhone are harder to program, harder to use and a lot more expensive (that sounds like the Trifecta). Besides, wouldn't it make sense to do the license plate reading "in the cloud" or at least check the ID done locally and refine the algorithm dynamically? The iPhone certainly raised the bar on usability as did the iPod, but more importantly Apple created a whole solution ecology - iTunes on steroids. The biggest breakout of the iPhone was the destruction of the application walled garden by the mobile operator, and the construction of an open market to sell apps that didn't need permission to run. From time to time Steve Jobs' totally unique skills come together for huge home runs, and the iPhone is certainly one of them (Nobel prize in business innovation were such offered). Now that we have usable and programmable phones with GPS and cameras built in high volume and I suspect it won't take a long time for us to collectively realize that there are a whole lot of portable devices that don't make much sense any more. Of course I've been wrong before, and full disclosure requires that I admit to using a Blackberry and having a Garmin GMS in my car (go figure).

As The Chip Turns

Steve Jobs might be strange but he sure isn't stupid.  When Apple moved from IBM to Intel for CPU's for the Mac a lot of people wondered whether this was in the best interests of the Mac cultists since Intel iconoclasm was always part of that. Apple understood that since Intel now had the power minimization religion the Intel processors would overtake IBM in power efficiency. It turns out there are other powerful benefits. When Intel brings out a new CPU now it tends to have architectural visibility (e.g. more cores, virtualization capability, …). The pipeline between Intel and the customer on the Windows side is long and hard often requiring some support in Windows and then by the ODM and computer vendor.  In contrast, here in Silicon Valley Apple and Intel have a small team of bright engineers and if it is to Apple's benefit they can easily be the first to market with a MAC that leverages a new Intel CPU. Intel loves it because the not-to-price-sensitive MAC purchaser is a great way to take advantage of Intel's newest. So expect to see some share growth for Apple in areas like laptops especially given the fact that you can run Windows virtualized if you want.  And speaking of competition, we would guess that AMD is in for a pretty hard time now that the CPU competition has moved to mine-has-more-cores-than-yours (naa, naa, naa!). AMD is better than Intel at many things but getting new processes into volume production is not and is not likely to be one of them. Smaller features and more transistors is the way you get more cores, and Intel seems destined to win those battles for the foreseeable future.