Where is Microsoft going?

Microsoft just selected a new CEO to replace Steve Ballmer who was employee 30.  The new CEO is Satya Nadella, a 22 year veteran of Microsoft and head of cloud services.  Since the old guard is moving into the background, both Bill Gates and Steve Ballmer will remain on Microsoft’s board of directors, this is a good time to examine what Microsoft’s options are going forward and where they’re likely to go.

(1) I predict a grand divergence of the Windows and Windows Phone operating systems.  A handheld device has too many constraints (less memory, slower processor) and too many differences (sensors for location, device orientation, motion, position, temperature, even illumination) for there to be a good technical refactoring into one code base.  iOS and Mac OS X have remained different despite each influencing the other.  On the whole this has been a GOOD thing.

(2) Both mobile and desktop devices connect to the network to pull and post information to servers.  The need  to connect to the cloud for data is perhaps more acute on mobile devices, but who can do their job at a desk without the Internet?  Despite twin code bases for mobile and desktop, I predict Microsoft will integrate Azure cloud services on mobile and desktop OS platforms.  The need is there for both.  You register your Android devices by logging into your Gmail account, why not register your Windows device — phone or laptop — by logging into an Azure account?

(3) Samsung and Google have been feuding in the press over how much customization Samsung can do to Android.  Samsung has definitely pushed the Android envelope coming out with more devices and more form factors faster than any other manufacturer.  Google has let them make changes here and there, but is trying to also keep a uniform Android experience.

Samsung rode Android to first place in the smartphone market and would like to have some leverage renegotiating a better deal with Google.  The only way Samsung can get a better deal is to threaten to use different software.  Right now that is not a credible threat, however if Samsung does come out with some Windows Phone models and they get market traction, then Samsung has negotiating leverage with Google.

So I look for Microsoft to continue to push Windows Phone to OEMs despite buying Nokia’s phone division.  I also expect Microsoft to get some OEM wins as the manufacturers continue to search for other options than Android to differentiate themselves.

(4) Office has been morphed to every iteration of Windows with annoying (to me) user interface changes.  Where can it go?  For mobile devices, the human voice is the natural interface for a constrained screen size, so I see a release of Microsoft Office with a voice-and-speech-only user interface.

(5) In 2008 Microsoft offered to buy Yahoo, but then CEO Jerry Yang kept upping the price and really didn’t seem like he wanted to relinquish being CEO no matter what price Microsoft offered.  Well Yang did go and not long after that botched merger.  Still Microsoft is awash in cash and not producing returns fast enough to even keep up with the S&P 500.  Why not buy Yahoo?

Yahoo has the Internet portal brand and their new CEO Marissa Mayer has pushed them into mobile directions that are application-oriented, somewhere Microsoft is not, but needs to be.  So look for Microsoft to start courting Yahoo — again!

(6) Now that Microsoft has Nokia’s phone division, they need to manage it and that means orient it solely to the future.  So I expect Microsoft to sell off the low-end Asha line of phones, which is really the dying Symbian platform, to some Asian manufacturer.  This would be a deal that would be smaller, but not unlike Google selling off Motorola.

(7) Chromebooks with Google’s Chrome OS have shown that thin-client laptops have some place in the market.  In fact even if they are a loss leader, Chromebooks hook users on the cloud and in the case of the Chromebook, Google’s cloud.

This will not be lost on a CEO who was head of Microsoft cloud services and I expect a push for a “light” version of Windows realized by some kind of Windows ultrabook.  It’s copycat, but it makes sense.

(8) After selling off the Asha business, I expect Nokia ex-CEO, now Microsoft VP Stephan Elop to resign.  Elop shepherded the Microsoft takeover of Nokia from start to finish, in fact you could argue that was his mission when he accepted being head of Nokia.  Could Nokia have survived as another Android smartphone maker?  We’ll never know.

(9) Games and gaming has gone way mobile in recent years.  Microsoft has been slow to get on this bandwagon because of their overall difficulty with mobile and solid Xbox sales disguising the longer term trend.  My kids use tablets for gaming and many other parents push this direction too which means the current generation is used to using flat screens, not game controllers, to play games.

So Microsoft has to start integrating Xbox games with Windows Phone games.  Look for it.

(10) The push in data centers is to lower power consumption by using ARM-based servers.  Even Intel is trying to power reduce its x86 line.  What about Windows Server?  We know Windows RT ran on ARM, but it was sluggish and eventually Microsoft withdrew RT tablets as they were too underpowered to run the Windows Desktop (but not Metro).

So I see Windows Server under the gun to run on reduced power servers.  ARM is the natural architecture to support and there is the Windows RT code to leverage, so I expect that offering to be offered.  I also think this architecture rethink will cause Microsoft to consider the Power ISA architecture (formerly known as PowerPC).  Power ISA is pushed by IBM and Windows Server is a more natural sale into an IBM shop, so the sales synergy will trickle down into engineering requirements.  Consideration of Power ISA is also a nod to the weakness of x86 going forward and recognition that one day x86 may just up and disappear from the planet in a big reorg at Intel.  AMD has essentially dropped x86 for servers already.

So there are 10 problems and opportunities for the new CEO of Microsoft to shift and grow the technology and in the process of doing so, remake the company.  Microsoft in 2020 will be a completely different technology company or just an investment bank.

 

Mobile Tech Report 2014 now available for Amazon Kindle, Barnes and Noble Nook and Google Play Android devices.  Apple would NOT publish the Mobile Tech Report and said:

“Links or references throughout the book promote a competing website.”

Well there are links to many websites.  The whole idea of the Mobile Tech Report was to comment on news as reported by different technology websites.  This news is also broken out into categories for the specific technology manufacturer, including competitors of Apple.  Apparently reporting news and giving opinions on it, is now prohibited in iBooks by Apple.

So if you have an Amazon Kindle, Barnes and Noble Nook or any Android device, you can read the Mobile Tech Report 2014 that was censored by Apple.  There’s plenty of insight about Apple inside it, not to mention all the other tech companies.

We’re still living through the paradigm shift of desktops and laptops to tablets and smartphones, but that is a device-level shift.  Is there any sub-device level evolution going on?

In my previous article I argued that effective processor speed has plateaued.  Other than reduced form factors, are we seeing any shift in device technology?  Certainly power consumption is now the new holy grail instead of raw performance, but other than power considerations is any innovation going on with processors?

Well yes.  We’re all carrying these mobile devices and they’re equipped with sensors.  Sensors meaning cameras, microphones, GPS radios and the like.  Ordinary computing processors can poll sensors, but the use of sensors invites a new paradigm, a new way of computing.  That new way is neural networks or neural network processing.

Neural networks are computational models that mimic how our central nervous system operates.  Data from a sensor arrives and is processed by a network of processors.  The idea is that data is compared to an array of “weights” and is recognized or not.  Does the luminance level of a certain color match this pixel or not?  The new data can be recognized or not, or if in learning mode it can affect the weights used to recognize the next data.

In this manner a pre-trained neural network can recognize data.  The key to using neural network processors is whether you have sensor data as input or not.  Since we’re now carrying sensors and will soon be wearing them with wearables, there will be a stream of data coming in.  How will we interpret this data stream?

That is the opportunity for neural processors.  The new sensor stream of data invites a departure from von Neumann architectures.  Qualcomm recently announced their own neural network processor or NPU.   NPUs can be used to recognize data from an incoming sensor stream.  This will be the new computing element to arise and augment, though not quite replace, the traditional von Neumann processor.

So this is good news to both Qualcomm and Intel.  New processors are needed for our mobile devices, but not traditional CPUs, new NPUs — neural processing units.

The semiconductor industry is fond of quoting Moore’s Law, really Moore’s observation, that the number of transistors on an integrated circuit will double every two years.  In the past this has lead to faster and faster computers, but are we really getting faster computers today?

Think about it.  If you have a very fine mesh of transistors that you are going to push data into, then pull data out of after some algorithmic operation, the real performance of the system is based on (i) how much data you can push in and (ii) how fast you can clock it out.

Right now processors are hitting an I/O bottleneck that is limiting how much data can be pushed into and pulled out of your pile of transistors.  While the number of transistors on a chip continues to grow, data buses with 128 bit, 256 or more bits, even with multiplexing are unable to keep those transistors fed, meaning lit up with data.

Why have clock speeds plateaued at several gigahertz?  Clock speeds broke through megahertz level after level, but now face a thermal barrier.  The faster you clock, the more power you pump into the silicon and since you’re not increasing the area of the chip, then you’re putting more power into the same area and voila it gets hot.  If you increase the chip size to disperse the power, then fabrication yields drop.  Yes you can attempt some supercooling techniques, but that isn’t a viable economic answer to the question of computer performance.

The answer that the industry doesn’t want you to know is that we are at the end of significant performance improvements.  We are at the end of computer’s teenage years.  Computers have grown up.  The end of the performance renaissance is at hand.  You won’t know it for a few years because of industry marketing and our shift to smaller (smartphone and tablet) devices, but computers are not getting any faster.  Also the migration to the cloud which uses racks of computers operating in parallel will give the illusion of faster speed for a time.

The computer renaissance is over.  Answers will now only be solved by parallel processing techniques.  CPU speeds will not increase.  We are at the end of the trail and have reached the plateau.  For generations to come, this is as good as it will get.  The abacus computed for thousands of years without getting any faster, so too will its silicon descendants from here out.

You can now read the Mobile Tech Report: 2014 on your Amazon Kindle e-reader.  Find out where the mobile technology industry went in 2013 and is going in 2014.  Check it out here.

I’m at it again.  Here’s what my crystal ball reveals for 2014.

(1) Blackberry spins off QNX.
Lost in the discussion of Blackberry 10 OS, which was actually delivered and worked, was remembering that RIM bought QNX for its real-time OS which became Blackberry 10.  QNX was the number two player in real time operating systems behind Wind River, which Intel bought in 2009 for $884 million.  RIM bought QNX for $200 million in 2010.  Now that QNX did its job by powering Blackberry 10, there’s no reason for Blackberry to keep them in-house and look for Blackberry to spin QNX back off to raise cash.  With Wind River consumed by Intel, there is a market need for embedded systems operating system vendors like QNX.

(2) Chinese tech firm buys wreckage of Blackberry.
Lenovo is most talked about, but network infrastructure-oriented Huawei seems more likely to me.  There will be other private equity offers that won’t be as large or accepted.  Both the Canadian and American government have their doubts about Blackberry being bought by a Chinese firm, but ultimately they won’t stand in the way.

(3a) You’ll see an Android tablet at the supermarket checkout.
Like USB thumb drives, prices are getting low enough for an Android tablet to be an impulse buy as you wait in a store checkout line.  This means the price has to be sub-$50 to be there, probably sub-$40.  Surely not the bleeding edge, but it would have been two years ago.

(3b) Emerging cheap single purpose screens show up in stores.
Imagine a tablet that is actually a subscription to a TV channel or a show.  You might get House of Cards on an Android tablet instead of a DVD pack, for the SAME PRICE.

To be cheap the device has to be low on memory which means streaming video from the cloud which means a WiFi connection you provide.  Look for tablets that are the delivery for a subscription to shows at Target.

(4) WiFi-only phones emerge.
Speaking of WiFi, WiFi phones come back, perhaps with an Ubuntu Linux phone.  WiFi coverage is getting good enough that cheap WiFi only phones are starting to make sense.  I don’t see these coming from the larger tech manufacturers, but smaller players who look to make a quick buck by filling a market niche.  So lose the 3G, lose the 4G, just a WiFi only model for an ultra-cheap feature phone.  Maybe you’ll even throw it away after making a few calls. (See prediction 12).

(5) nVidia exits mobile CPU market.
nVidia will stop making mobile CPUs like the Tegra chip because it’s just not profitable.  Recall that Texas Instruments exited its OMAP line in 2012 citing cost competition in the mobile CPU market.  Mobile consolidation continues.  It’s too brutally cost competitive for nVidia to stay in both graphics acceleration chips and CPUs.  nVidia can only survive playing to its core competence speeding up graphics.

(6) Intel beefing up on LTE will hurt Qualcomm.
Last year I predicted Intel would buy Broadcom.  They didn’t, but I was correct that Intel was looking to acquire LTE technology.  One of new CEO Brian Krzanich’s moves was to approve acquisition of Fujitsu Semiconductor Wireless Products for their LTE transceivers.  LTE was missing in Intel mobile solutions, but now Intel has the whole hardware enchilada for mobile.  Manufacturers that want a one-stop solution for Android need not ARM themselves.

More on this acquisition is at:
http://www.fiercewireless.com/story/intel-buys-fujitsu-rf-unit-beef-lte-expertise/2013-08-13

I still think Broadcom would have been a better, though much more expensive, acquisition.  Broadcom has been aggressive in asserting its intellectual property in wireless and in quite creative ways, like buying a company that possessed a patent just to sue Qualcomm with.  Broadcom bought the company, got the patent, sued Qualcomm and won.

Intel just doesn’t have that mindset to go for the jugular, but now it has all it needs in mobile to give Qualcomm a real headache.  Both Intel and Qualcomm will be duking it out for the high end of the mobile market, meaning the higher performance and cost CPUs and modems.  Since Intel has practically zilch today, any wins by Intel will be coming at Qualcomm’s expense and I do expect Intel to get some market wins in 2014.

(7) Wearables will be worn by early adopters but shunned by consumers.
No one, not even Google with Glass, will be bragging about adoption numbers on wearables in 2014.  The industry is looking past smartphones to wearables as the next small thing that will be the next big thing.  It will be, but it won’t be in 2014.  Next year will be all about product introductions, consumer adoption will lag and disappoint Wall Street.  The real trend on wearables will emerge in 2015.

(8) Personal life-logging will start a new trend.
Imagine Runkeeper on steroids, not just tracking your exercise, but everything you do.  Snap a photo of what you eat, who you talk with, what you say or do you speak more than this person or not.  The logical use of wearable tech will be to log all of your life.  Yes you’ll get some information out of your Google Glass or Samsung Galaxy Gear smart watch, but the enduring use of wearables will be to record everything related to us.  The new Memoto life logging camera, now called the Narrative Clip, points way to this trend, it is a small pendant or lapel clip that takes a photo every five minutes and uploads it to the cloud.  Memoto started as a Kickstarter-funded project, but will wind up a Kickbutter product.

All of this new data gathered about us, by us, will then mean we’ll need analytics to tell us about ourselves too, but not in 2014.

(9) States will start designating texting areas on roads (a la New York).
Frustrated with being unable to stop or discourage driving-while-texting, New York is trying a bold experiment.  Add special Texting Zones to the highway where you can pull over, text, then drive off undistracted.  It’s a great idea, a bold experiment and I don’t know if it will work, but it’s worth a try.  In fact it’s a great idea by instead of saying what you can’t do, enabling what you want to do.

I see other states following New York’s lead, but no definite decision on how effective Texting Zones are in 2014.  And eventually, though not in 2014, those Texting Zones will have free WiFi hotspots.

(10) Smartphones evolve towards always-on, always-recording (voice, photos, location).
Where do these thin flat panels of glass go from here?  Actually the Moto X was pointing the way, not in its highly customizable exterior, but in using voice recognition almost all the time as an interface.  Voice is a natural interface for a small device with a cloud connection, so we’re done.  It’s happened.  The rest of the smartphone evolution has to do with acquiring other data besides your voice.

Look for smartphones to start taking photos at regular intervals, or recording audio too.  Why not track your location perpetually as GeoLoqi (acquired by Esri) was implementing.  The only factor holding back continuous data acquisition is battery life.  Every improvement in battery life will be eaten by increasing data acquisition on the smartphone.  It’s the Runkeeper app paradigm that points the way for smartphone evolution, so I look for the next crop of features to be automatically recording your movements, your speech, heck even who and what you see.  It’s Little Brother in your pocket blabbing to Big Brother in the cloud.

(11) HTC put on life support by market and Taiwanese government.
Microsoft doesn’t need them anymore after buying Nokia, really even after Stephen Elop chose Windows Phone.
HTC has been losing to Samsung and LG is rising in smartphones now as well.  Smartphones and also the now-required tablets are too tough a road for HTC and while they won’t die quickly they will (continue to) fade significantly.  Notice the lack of HTC recent Nexus devices.  Microsoft is also beating them up on patents, wanting an install Windows Phone option on their devices.  HTC profits will evaporate as the company treads water, but they are in real trouble.

(12) Debut of disposable feature phones introduces disposable tech that is coming.
Make a few calls and throw the phone into a recycle bin.  This will be like the cameras you bought that had film developed by returning the camera, maybe your voice message is delivered when you turn in the phone?
While most disposable tech won’t be seen until 2015, we’ll see the start of this trend in 2014 with low end feature phones.
What about grabbing a tablet as you board a plane from an airport vendor, then discard it as you disembark?  How about a smart watch you throw out when the battery dies?

(13) Samsung does not have the top selling smartphone in 2014.
They did in 2012 and again in 2013, but the Galaxy S run will stop short of the gold in 2014.

 

So there you have it, actually 14 predictions because (3a) and (3b) were so related I had to group them under one number.  I’m seeing 2014 as another start of an innovation cycle with ever-cheaper screens heralding disposable computing.  I’m also seeing the trend of logging ever more data about ourselves.  I don’t think privacy issues will stand in the way, they haven’t yet really for any tech of significance.  I see more about us in the cloud than ever and actually a step function rise to a new level starting.

We’ll see how well these look in twelve or so months.

How did my predictions for 2013 hold up?  Here’s the rundown.

(1) Android smartphone marketshare exceeds 80%
Yep.  This did happen in 2013-Q2.  You can read about it here.
http://news.cnet.com/8301-1035_3-57596548-94/android-nabs-record-80-percent-market-share-in-q2/

(2) Nokia brings 41 megapixel PureView camera to its Windows Phone Lumia
Yep.  Despite my concerns about Nokia putting this prediction in peril, it was too obvious a task not to do.

(3) Instagram continues its mobile rise and Facebook treads mobile water
Nope.  Instagram has kept on innovating and growing, recently copying Vine on the ability to post short video clips, but Facebook did an about-face, dumped its slow HTML5-based Android app and went full bore native.  Not that even that mattered.  Facebook has over ONE BILLION users and is likely the most used mobile app anywhere.  So while I can say that yes, Instagram has continued to add users and features, Facebook did not tread mobile water.  Facebook adopted mobile whole hog and is even kicking Google’s butt in mobile ads as a percentage of ad revenue.  This prediction was half-right, but all wrong.

(4) RIM delivers on BB10, but fades into obscurity
Yep.  The only question now is who will buy the wreckage.

(5) Apple launches AirBook Jr. with ARM processor
Nope.  There was an iPad Air, but no keyboard.  Apple is still following Steve Jobs dictum that tablets don’t need keyboards.  Also there was no downsizing of the MacBook Air with Mac OS X ported to ARM.

(6) Samsung Galaxy S4 will be the top selling phone
Yep.  I didn’t know what this phone would be at the end of 2012, but I was dead on right.  The S4 sold 4 million in 4 days and 10 million in 27 days making it the fastest selling smartphone in Samsung’s history and also the fastest selling Android device in history.  There have been 40 million S4s sold as of this writing.  And yes, the S4 outsold the iPhone 5 as you can read here:
http://www.neowin.net/news/samsung-galaxy-s4-edges-iphone-5-in-sales-despite-slump

(7) Intel buys Broadcom
Nope.  Intel got new CEO Brian Krzanich as Paul Otellini was edged out for failing to make any progress in mobile. Intel did buy a division of Fujitsu for their LTE technology (Fujitsu Semicondutor Wireless Products based in Arizona).  I still think Broadcom would have been a better albeit more expensive acquisition.  Intel is viewing mobile as acquiring the correct bill-of-materials without thinking about sales forces and chutzpah, so while the acquisition is progress, it still is a technology in search of a sales visionary.

(8) Large screen innovation yields to small screen innovation
Yep.  Can you say Google Glass or Samsung Galaxy Gear?  We didn’t see the Apple iWatch — yet.  Wearables are the new frontier for tech and they will be smaller.

(9) Yahoo launches branded device(s)
Nope.  New Yahoo CEO Marissa Mayer has bought up content, including Tumblr for one billion dollars, but not produced a game changer for the organization.  Yahoo is still just getting by and even trending down slightly.  I saw branded devices as a way to change the state-of-play, but it didn’t happen.

(10) Windows 8 is over, expect Windows 9 to be announced in 2013
Yep.  Windows 8.1 was announced and arrived.  It wasn’t called “9”, but it was the next Windows.

(11) Trouble at Qualcomm with big stock sell-off
Nope.  As of this writing QCOM is close to where it started the year at, so no rise, but no big sell-off either.  I still think increasing verticalization trends in the big players bode ill for Qualcomm and Intel is now poised to also give them trouble, but the market has also been expanding with tablets being the golden devices everyone wants.  Anyway this does match my own personal record at never being able to predict the stock market.

(12) Robert X. Cringely makes a prediction
Yep.  Back at the start of 2012 Robert X Cringley was looking to turn off his blog and made prediction 8: No more predictions.  Here it is:
http://www.cringely.com/2012/01/05/prediction-8-no-more-predictions/
Of course that wouldn’t last as his blog is a great place to promote his other works.  However Bob did make a prediction which you can read at:
http://www.cringely.com/2012/12/29/silicon-valley-conquers-hollywood-part-1-setting-the-scene/

So the tally is Yep, Yep, Nope, Yep, Nope, Yep, Nope, Yep, Nope, Yep, Nope, Yep which comes down to 7 Yep and 5 Nope.  So 7 out of 12 predictions came true in 2013.

Keep track of all things mobile on Twitter at @pdxmobile and keep an eye out for year end predictions for 2014 coming soon.

What is an anti-prediction?

It’s something that won’t happen and here are 12 things that won’t happen in 2014.

(1) No big mobile payments solution.

Near Field Communication (NFC) is the Great Green Hope for mobile payments.  NFC is starting to show up in smartphone hardware, but still has a very long way to go.  Your tablet probably doesn’t have NFC.

NFC piggybacks on the same 13.56 MHz frequency that contactless cards use.  The credit card industry marketed contactless cards as a faster way to pay and contactless card readers were sold to transaction time-sensitive businesses like fast food restaurants and convenience stores.  Contactless cards contain a chip that activates in the presence of the electromagnetic field generated by a card reader.

The problem is that for NFC to take hold there has to be widespread merchant adoption of the contactless readers.  Merchants don’t want to buy new credit card terminals until customers want to use them.  It’s a classic chicken and egg problem waiting for Apple to solve it.  Eventually Apple will solve it, but not in 2014.

(2) No carrier consolidation.

The Obama FCC nixing the AT&T takeover for T-Mobile has frozen the current players until the next president.  Verizon and AT&T will continue to duke it out for number one and way, way back Sprint and T-Mobile will continue to try things to grab a few more customers, or at least lose fewer.

Verizon uses CDMA technology while AT&T uses the more universal GSM tech.  Sprint is CDMA and T-Mobile is GSM, so it would be natural for Verizon to gobble up Sprint and AT&T to acquire T-Mobile.  AT&T tried just that, offering to buy T-Mobile for $39 billion in 2011, but the Obama FCC torpedoed it.

So no Obama-allowed buyout of T-Mobile also means no Obama-allowed buyout of Sprint.  Sprint was acquired by Japan’s Softbank in 2012 for $20 billion, but really Sprint’s natural home is as a subsidiary of Verizon to consolidate the redundant spectrum using the same technology.  Still this won’t happen while Obama is in office.

(3) No iOS smartphone marketshare gain.

The so-called “low cost iPhone” was too expensive and too late.  The iPhone 5C was a great way to recycle last year’s unsold inventory, but not a real attempt at competing with Android on price.  A low-cost iPhone in 2011 might, might have stalled the overwhelming push of Android into uber-dominance, but now it’s only a gesture at trying to retain the minority marketshare Apple has.

Note that I am not saying iOS marketshare will actually decline.  It might, but I’m not predicting it.  Windows Phone appears to be winning at iOS expense, but it’s still too soon to tell for sure.

(4) No big HTML5 adoption.

HTML5 is the Great Web Hope to unify development across multiple platforms so developers have less to learn and managers can spend less on development.  That’s the theory.

In practice native apps are more popular than ever with both the Android Play Store and Apple’s App Store poised to top one million apps EACH.

The new Firefox OS for smartphones has found some love from ZTE, but is still only selling on low-end devices for the third world.  This won’t change in 2014.

(5) No big new social network to rival Facebook, Twitter, LinkedIn or Google+.

Snapchat is the darling now for it’s deliver and delete messaging system and it has a reported eight million users.  Will Snapchat be snapped up?  I think it will be snapped up or snuffed out by copycat functionality in the big social boys.

(6) No let-up in technology patent lawsuits.

If anything, with Microsoft buying Nokia, lawsuits will increase as the remaining non-mobile Nokians in Finland will redouble their efforts to get some cash from their patent trove.  Also look to Blackberry to partner with some other firm and push back in court.

(7) No Amazon or Google bricks and mortar stores.

Apple did, Microsoft did, Samsung has a place in Best Buy.  Google and Amazon WON’T open bricks and mortar stores.

(8) No Yahoo big win.

Despite modest improvements, Yahoo will not make a major move forward.  Marissa Mayer staunched the bleeding, but big innovation has not and will not arrive.  Flickr was improved, but Instagram still reigns and will continue to.  Summly was bought for $30 million to scan news and generate shorter synopses, but this still is derivative work, not actual content generation.

No new technology, meaning hardware devices or winning big audience websites will come from this behemoth of the past.

(9) No 5G technology in sight.

While 4G is still being deployed, but is fairly widespread in the United States, we crave more bandwidth.  What’s next?  5G will be the fifth generation mobile technology and as with all its predecessors it will be better, faster and cheaper.  We want it.  We won’t get it.

(10) No smartphone from Amazon.

Rumors abound and there are new Kindle Fire HDs to be considered for your purchase and enjoyment, but Amazon will not join the smartphone market since it would mean cozying up to carriers and wining and dining those operators.  That takes a dedicated sales force for shmoozing, not just an engineering team making a smaller tablet.

(11) No buyout for Foursquare.

Foursquare has raised $71 million of venture capital since its inception.  This makes Foursquare an expensive acquisition, one perhaps only Google or Microsoft would consider.  I don’t think they will consider this extravagance since location-based mobile use cases have been very hard to monetize.  Foursquare still struggles to make a case to advertisers.  I expect Foursquare to glide as far as their venture dollars will let them.

(12) No new chairman for Microsoft.

Bill Gates will continue on and on as Chairman of Microsoft.  It is all about him, despite investor’s desire for a fresh look at the business.  Actually CEO Steve Ballmer’s departure will likely lengthen Gates stay as conservative investors won’t want to completely break with the successful past leadership.

So there you have it.  A dozen things you can’t count on for 2014.

MicroNoke? KiaSoft?

What will the merger of 99,000 Microsoft employees with 32,000 Nokia phone division employees produce?

It’s hard to say for certain about technology, but without a doubt it will bring lay-offs.  I’d expect about one-third, that’s over 10,000, of the Nokia folks to be shown the door.

That much is pretty typical for mergers, which are usually part of the death spiral of decline for large operations.  Is there any chance that adding Nokia phones to Microsoft will change anything?

It can’t hurt.

Apple has shown that vertical integration is not only possible, but very lucrative in mobile technology.  Samsung too is highly vertically integrated, really only relying on Google for Android and Qualcomm for LTE modems in the United States.

Is Microsoft going down the vertical integration path?

Yes, but they don’t know it yet.

The laws of economies of scale and cost-cutting will require Microsoft to make more and more.  Google has an out by practically owning the cloud for mobile.  Microsoft doesn’t have that out, so Microsoft too must relentlessly cut costs.  Microsoft also has deep pockets and will be forced to subsidize their new mobile products division for some time to come.  Times will not be pleasant in that division as cost-cutting will mean lay-offs and sizable ones, despite the transfusion of cash that will accompany this pain.

What does this mean for Windows Phone?

Despite the pain to employees, this merger does breathe some new life into Windows Phone and also the related Surface tablets.  Windows 8 just came out last year and Windows 8.1 is about to be released.  I’d expect a new version of Windows Phone OS every year also now.  So the pace is about to quicken and if Microsoft is to gain any traction in the market, they have to move faster.

Can this work?

Yes and no.  Yes Microsoft will gain in smartphone marketshare, but frankly at 3% they and Nokia, have nowhere to go but up.  I don’t doubt they’ll double what they have and reach 6% by year’s end, but can they contend for market leadership?  That’s where the trouble with this deal is.  Microsoft by its nature, moves incrementally and the smartphone market has been one leap after another.  Fortunately for Microsoft that pace of rapid innovation and change has plateaued, so Microsoft now has specifications fully realized and can target them.  The only area Microsoft is weak at is the cloud support mobile devices crave, but I’m sure those can be bought too.

The problem for Microsoft is the next market: wearables. Smartphones are sooo yesterday. Google Glass is the cool new thing, at least until the Apple iWatch comes out.  Microsoft can’t compete with that, they don’t do new well.

One of the consequences if wearables really do take off will be the increased importance of the cloud, because without significant cloud services, wearables would be little more than the Casio calculator watch, a kind of smart toy.  So that $7.1 billion for Nokia was just an ante to get into the poker game.  The real bets are still to come and will involve cloud services and probably even cloud infrastructure.  It’s not hard to imagine Microsoft gobbling up Rackspace soon.

I don’t expect smartphone hardware to improve much by any vendor, but I do expect Microsoft to improve their smartphone software and hopefully, but not for certain, also improve their wretched tablet software.  The new Microsoft mobile unit may start to copy Samsung’s strategy of many different form factors and sizes.

However all-in-all this was a deal that had to be done.  Nokia was unsustainable on its own and would have had to keep cutting until it could no longer play the smartphone game.  Microsoft did not have a horse in the race and needed something to leverage to get into the market.

So now the fun begins.  Maybe Microsoft can make a better smartphone.  Or at least one as good as the iPhone or Samsung Galaxy.  I applaud Microsoft for trying.

At the end of 2012 PDXmobile made a tech baker’s dozen mobile predictions for the coming year.  Now that it’s halfway through 2013, how are those predictions faring.  Let’s see.

(1) Android smartphone marketshare exceeds 80%

Not quite there yet, but we have seen Android top 75% marketshare in 2013-Q1 as reported by IDC.  Can Google, Samsung and friends put the squeeze on Apple, Microsoft and others to get that 5%? Stay-tuned.  This prediction is definitely In-Play.

(2) Nokia brings 41 megapixel PureView camera to its Windows Phone Lumia

Nokia has been falling like a rock with its cellphone sales dropping 31% in 2013-Q1 alone.  Like others I had expected Nokia to take their best Symbian technology, which was the 41 megapixel camera in the Symbian 808 PureView, and cram it into a Windows Phone as fast as they can.

Well perhaps as fast as Nokia can isn’t fast enough.  While the Lumia 925 is a nice Windows Phone, all eyes are on that 808 PureView camera technology resurfacing.  It hasn’t, so Nokia is putting this prediction in jeopardy.

If Nokia brings out their 41 megapixel camera-phone in 2014, it may hurt my prediction batting average, but it hurts Nokia more that they are taking so long to bring a competitive product to market.  Nokia just can’t be another “me-too” smartphone maker and survive.  It’s innovate or die time and all the talk lately of Microsoft or Huawei buying out Nokia (won’t happen) is a sign of Nokia’s weakness.  Will Nokia shrink into oblivion?

This prediction (of the 41 megapixel camera Windows Phone) is still In-Play, but I’m doubting it since Nokia’s new phones are probably out for the year.  I’d rate this one as Doubtful.

(3) Instagram continues its mobile rise and Facebook treads mobile water

Well this one was a bit of the poke-in-the-eye to Facebook saying that buying Instagram was brilliant, but their bread and butter site had become too stodgy and wasn’t cutting mobile mustard.  Certainly Instagram has continued to innovate, most recently by copying Vine and allowing short videos as part of their service.  Instagram has continued to rise.

What about Facebook?

On the one hand Facebook did an about face and got on the Android native app bandwagon after showing how slow an HTML5-based website can be.  Kudos for the switch to a genuinely fine native Android app.

On the other hand young people have been ditching Facebook left and right with analysts speculating why.  Why?  Well it’s like this: would you have wanted someone to follow you around with a tape recorder, camera and movie camera your whole life?  No of course not, we don’t want to relive youthful indiscretions in public forever and if they’re recorded, we do.

So the new competition for Facebook is from services that allow you to send messages that evaporate and disappear after being read once or within some fixed time.  In a sense these services are providing for a new kind of privacy by removing the persistant nature in digital communication.

While this is a big challenge for Facebook and really the very idea of Facebook, it hasn’t stopped Facebook’s proliferation to virtually every smartphone everywhere.  Yes the Facebook Home phone made by HTC bombed, people want to use other apps than Facebook, but Facebook is the most used app on all smartphones.

So then how do I rate this prediction?

I don’t want to cave so quickly.  Instagram has continued to rise and gain mindshare among youth, presence on devices and innovation for mobile.  So that half of this prediction is correct.  Is Facebook just treading water by being on almost every smartphone?  Doesn’t seem so, but I’m not giving them a trophy yet.  Let’s rate this one as In-Play and revisit how they are standing at year’s end.

(4) RIM delivers on BB10, but fades into obscurity

RIM did deliver their Blackbery 10 OS and devices.  RIM did change their name to Blackberry.  Yes RIM is fading into obscurity, their smartphone marketshare is now down to less than 3% as of 2013-Q1 and Windows Phone has passed them.

So I’d rate this one as Yep.

(5) Apple launches AirBook Jr. with ARM processor

At their recent WWDC developer conference Apple launched a new refreshed MacBook Air, but  with updated Intel Haswell processors and longer battery life.  What about the iPad and keyboard combo I’ve been expecting?  Is it so hard for Apple to do a downscale product?

Yes it is soooo hard for Apple to do a downscale product.

Apple will be launching a new iPhone later this year.  Will there be new iPads also?  Almost certainly there will be, but it’s hard to see the downscale AirBook I was predicting happening.  Why?  Where did I go wrong?

My thinking has been that ARM would go upscale and it is trying to, but at the same time Intel with x86 is trying to go downscale.  Where x86 and ARM are intersecting is now increasingly on x86′s turf, meaning the complex structures involving performance where Intel has been making a living.

So the mojo seems to be with actually replacing ARM processors that sip less battery with more powerful x86 processors, rather than replacing x86 processors with ARM.  Intel is getting design wins and these are for devices that crave more performance, like the Microsoft Surface Pro Tablet.  Can Intel stave off ARM?  Can ARM unseat Intel in the laptop?  Not in this year’s prediction, maybe next.

In the meantime there will be a fall “new iPhone” event from Apple, so I can’t dismiss this prediction yet, so I’ll just rate it as Doubtful.

(6) Samsung Galaxy S4 will be the top selling phone

I didn’t know what this phone would be at the end of 2012, but I was dead on right.  This one is a Yep.

(7) Intel buys Broadcom

Intel is on a mobile warpath with new CEO Brian Krzanich and his first acquisition was the GPS division from ST-Ericsson.  Certainly this acquisition was mostly arranged prior to Krzanich taking over the reins, but it required his approval.

The black hole in the Intel mobile portfolio is in modems.  Qualcomm is kicking industry butt with their LTE technology and patents.  Can Intel get into this game?  Not without help and significant help.  Broadcom is the one company that has been giving Qualcomm fits.  Broadcom is smaller and significant cheaper than Qualcomm and a good takeover candidate for Intel, so I’d still rate this prediction as In-Play.

(8) Large screen innovation yields to small screen innovation

Whether you’re saying Google Glass or Apple iWatch, the flat slab of glass in your pocket that is your smartphone is done.  It is what it is and little more it will be.  New innovation will be in form factors you wear not carry and we’re starting to see it already.  I rate this prediction as a Yep.

(9) Yahoo launches branded device(s)

Yahoo CEO Marissa Mayer came over from Google and has keen insight on what can drive the Mountain View masters-of-the-universe mad.  Mayer has already presided over a revamp of the Yahoo home page and breathed new life into Flickr.com which really should have done what Instagram did.

So Yahoo is showing signs of mobile life, but is it enough?  The changes now had to be done to prevent fading to obscurity, but frankly they’re not enough to arrest the slide.  Yahoo needs to be bolder and try more.  My idea for them was to launch some branded devices.  Given the disaster of the HTC Facebook Home phone this may not sound like such a great idea, but if you’re just software and you’re not the operating system, then you’re easily discarded.

The only way for Yahoo to rise to its former prominence is some bold move like branded devices, and perhaps selling them in consumer outlets like Target.  The Peek email device did get significant traction in 2008 by doing just that, though the small outfit wasn’t able to continue innovating and got hammered by smartphones that have email.  Consumers are paring down to carrying only one device that combines cellphone, email, etc.

Still a Yahoo-branded device would attract a great deal of attention and might bring in some valuable youth market.  I’d rate this prediction as In-Play.

(10) Windows 8 is over, expect Windows 9 to be announced in 2013

No brainer.  Microsoft HAS to deliver software faster and speed up its development cycles.  Although it’s called Windows 8.1, it is the next version so I’d rate this one as a Yep.

(11) Trouble at Qualcomm with big stock sell-off

Qualcomm’s stock has been treading water this year, so this hasn’t happened YET.  However the pressure on companies making baseband processors has increased.  Samsung uses Qualcomm CPUs but also has its own Exynos 5 Octa chip.  Why use Qualcomm?  Simple, where LTE is required Samsung picked Qualcomm as it’s easier to integrate the modem and baseband CPU from one vendor than mix and match.

So really it’s Qualcomm’s wireless technology that has enabled them to sell baseband chips.  Without the modems Qualcomm would be out of the business like Texas Instruments who exited mobile basebands despite selling high volumes of their OMAP processors to HTC.

Samsung illustrates that if they had their druthers, Samsung would use their own baseband processor chip.  The problem lies in not having the modem technology.  That’s why Intel should snap up Broadcom before Samsung does.

But Qualcomm has the modem technology so does this save them?

No.

LTE has enough dispersed intellectual property to prevent one company from dominating it as Qualcomm did with CDMA.  This means that other modem vendors will be popping up and supplying parts and companies to take-over so large smartphone makers (i.e. Samsung and Apple) can buy a company to take their manufacturing internal and eliminate another third party vendor.

So just as baseband processors are being made internally, so too will modems become another part of the vertical integration of smartphones.  When this trend emerges analysts will not be kind to third party suppliers like Qualcomm, so I’d rate this prediction as In-Play.

(12) Robert X. Cringely makes a prediction

The King was dead, long live the King.  I knew he would and he did.  No doubt he’ll be making more too.  This is a big Yep.

So the tally is In-Play, Doubtful, In-Play, Yep, Doubtful, Yep, In-Play, Yep, In-Play, Yep, In-Play, Yep.  That’s 5 Yep, 5 In-Play, 2 Doubtful.

Keep track of how these pan out on Twitter at @pdxmobile and keep an eye out for year end predictions for 2014.

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