With a new year kicking in, it’s time for a new batch of predictions.

Business

One of the easiest predictions to make is that Facebook will go public this year, and it will manage to do so in a very successful IPO. I suspect that this may actually be the high watermark for the current boom cycle as Facebook is the most successful of the companies that were born of the Web 2.0 cycle. In a fashion similar to what happened with the Netscape IPO in 1995, the Facebook IPO may create a small window of opportunity for many other companies to go public.

On the private end of the spectrum, I think we will see the following companies see some form of liquidity event via either acquisition or IPO: Twitter has a strong chance of being acquired by Apple, which will quickly merge the offering into all of its products; Another possibility is that Twitter and Tumblr merge to create a mico-blogging powerhouse spanning both ends of the country. Meanwhile, Foursquare will either IPO or be acquired by Facebook or GroupOn in a share-only deal. Meetup will go public, creating another great story for the New York technology scene.

When it comes to Google, we will see the company continue its integration of Google+ into everything it does, with the biggest impact being the move to migrate all Orkut users to the new service. This will create an outcry in countries like India and Brazil, where Orkut has been popular but will leave many in the American media to wonder what the big deal is as Us customers have mostly left already.

Meanwhile, a lot of the companies that went public in 2011 will meet some strong headwinds as the rigor of the public market make it much more difficult for them to maneuver. Expect some changes at GroupOn and Zynga, with many people questioning their business models and long term viability.

Media

For a couple of years, there’s been a slow ramp up to the integration of the Internet with television. The rise (and to some extent fall) of Netflix, along with the entrance of new players like Hulu and Amazon, have made video distribution on the big screen one of the areas where the Internet and television have already intersected.

However, other areas of interaction have, so far, not been quite as successful. Apple is still treating AppleTV as a hobby, Google has mostly failed so far with GoogleTV, and other players like Roku and Boxee have, to date, been only adopted on the fringe.

In 2012 all that changes as the TV screen takes center stage in a way that a new generation of smart phones arose after the 2007 iPhone announcement. First of all, we will see some increased standardization around how to deliver content to TV screens, with agreements from TV set manufacturers like Samsung, Panasonic, Sony, and Vizio agreeing to some level of standardization. Apple will also announce a large screen product it will position in the TV market: The set will have AppleTV’s technology built-in, be accessible over WiFi, and connect directly to the iTunes store as well as integrate with the iPhone and iPad and other Airplay compatible devices. The set will run iOS and will be managed by a remote that runs on iPod touch, iPhones and iPads.

Meanwhile, cable companies will start opening up their platforms with some software development kits allowing to access content on the set top boxes they use. Once the Motorola acquisition is completed, Google will start transitioning the Motorola set-top boxes, which are a large part of the cableTV market, to GoogleTV, increasing the footprint of the service in the marketplace. Along the way, we will also see GoogleTV become more streamlined and less ambitious, focusing on delivering Android apps to the big screen instead of trying to rebuild the whole TV industry.

The concept of cord-cutting will continue to gain support but will not yet jump into the mainstream consciousness. With shows now being available exclusively on the likes of Netflix, we might see some interesting positioning whereas some TV carrier will offer Netflix as a premium service.

Politics

Social media will dominate the political cycle in 2012, with Twitter, Facebook, YouTube, Tumblr, and Meetup becoming part of the political operative tool belt. However, traditional electoral models will continue to be disrupted by the rise of distributed networked organizations like Occupy Wall Street, Wikileaks, or Anonymous. Except those players and new ones built on a similar model to have a substantial impact in terms of registering new voters and getting those voters to the polls in elections in Europe, the Middle East, and the United States.

In the US, the 2012 electoral cycle will see Republicans select Mitt Romney, a candidate most of their electorate is not very excited about, to run against Barack Obama. With the unexpected support of Occupy Wall Street and its splinter organization, Obama will win re-election as issues around economic disparities and job creation continue to be big topics of discussion.

In Europe, expect to see incumbents toppled in many countries: with major elections coming up in France, Spain, Russia, and Finland, it is possible that we will see a major change in political alignments across most of Europe, along with an increase chance of protest in those different countries. In Russia, in particular, we may see the internet play a crucial role in organizing protest if there are questions regarding voting irregularities.

The continuing protests in the middle east region may also lead to substantial changes in governance in several countries including Bahrain, Syria, and Saudi Arabia. During the presidential elections in Iran, we will see increasing clampdowns on internet sites as the government tries to shut any means of communication available to large groups of protesters.

… and of course, the easiest prediction to make is that the media industry will continue to push for more restrictions on the Internet, leading to more activists pushing back.

Technology

2012 is going to be an explosive year for technology.

First of all, we will see HTML5 roaring back, as many companies realize that it is cheaper to build in HTML5 and that the gap between platform specific code and HTML5 is shrinking. The introduction of WebGL, and proper implementation of geolocation and caching within mobile devices will give developers the ability to develop applications in HTML5 that can rival some of the offerings of native code. This is a move that will be resisted by platform makers like Apple and Google as it will loosen their stranglehold on their respective platforms; however, the split side of this is that effort is that some large companies will look to free themselves from said control by creating HTML5 instances of their own products.

On the mobile end, the Microsoft/Nokia will get some real traction with Windows Phone becoming a strong third player in the mobile market. Apple and Android will continue dominating the market with Microsoft still being a distant third. RIM’s position in the market will substantially worsen and will either be sold or go into bankruptcy.

Enterprise cloud strategies will continue to grow, leading to a growing divide between companies that can get efficiencies through the use of cloud computing and companies that are kept by different regulatory frameworks from being able to realize the financial gains offered by such model.

3D will be a hot buzzword, with the introduction of consumer-oriented 3D scanners and 3D printers that will push the idea of scanning and printing your own plastic parts. This will lead to some controversy around the concept of 3D objects piracy popping up in the media, with little actual evidence to back those fears. On the 3D projection end, we will see the rise of designer 3D glasses and the first glasses-free 3D television hitting the market, as we as a few consumer-grade 3D cameras. At the same time, we will see more and more technology to upscale 2D to 3D, in an attempt to develop a larger consumer market for 3D technology.

On the PC end, netbooks will disappear as a category and the hot new trend will be to offer thinbooks that mirror much of what Apple is offering with the Macbook Air product line.  Solid State Drive will aso increasingly become standard on new computers and we will see Apple actually announce they are getting rid of traditional hard-drive in all their product offerings. This will lead to their being able to announce that all their hardware can now run for at least 7 hours on a single charge.

Any which way, we will be revisiting those predictions at the end of the year and see how well (or badly) I did. I wish you, dear reader, a very happy new year and look forward to a continued dialogue in 2012.

Tristan Louis is the founder and CEO of Keepskor and writes the influential tnl.net weblog, where this was initially posted under the title The 2012 Crystal ball. You can follow him on twitter here or receive his weekly newsletter by subscribing here.

An inexpensive patent bet

In his note announcing the acquisition, Larry Page made it clear that a lot of the acquisition was due to Motorola’s strong patent portfolio. At the current time, the company holds 17,000 patents and has filing for another 7,500.

Earlier this year, Carl Icahn, Motorola’s largest shareholder, estimated that the patent portfolio alone could be worth $4 billion. In June, Apple, Microsoft, and RIM banded together to acquire 6,000 patents from Nortel and keep them out of Google’s hands: the pricetag on that acquisition was $4.5 billion. This means that the consortium had paid about $750,000 per Nortel patents. If you were to apply the same number to Google’s acquisition of the Motorola patent portfolio, the price tag would be $12.75 billion. It is interesting to see how this number is extremely close to what Google ultimately offered for Motorola.

But it gets better…

Motorola Mobility, the unit Google is acquiring, has $3 billion in cash on hands, reducing the price of the overall deal to $9.5 billion and dropping the per patent price to just under $560,000 per patent, assuming none of the filed patents are accepted or under $390,000 per patent if you assume that Motorola will get all 7500 filed patents approved.

… and realize this is all based on a $0 valuation of the rest of Motorola’s assets.

So what’s in there? In order to get a better understanding, one just has to look at some of the patent-related lawsuits Motorola has filed in the mobile space. For example, last October, they assessed that Apple had violated 18 specific patents in areas like WCDMA, GPRS, 802.11, wireless email, location based services, device synchronization, etc…  The next month, they sued Microsoft around things like an online marketplace, map services, video coding, etc…

So the company has a set of patents that are covering large areas of what we now know as the smartphone space but that’s not all.

The handset business

A lot of people are going to focus on the fact that Motorola has a healthy mobile handset and accessories business. This business has been valued at about $3 billion and generated $3.3 billion in revenue in the last quarter. That business covers handsets, as well as accessories.

If Google were true to its word that it wants to continue working closely with its partners in the Android ecosystem, it might have to reconsider the handset unit as part of the asset mix it’s offering. A way to handle some of this could be through divestiture, by selling off some of the parts or exchanging them for patents, if that’s what Google is after.

For example, the company could hand off the accessories business (bluetooth headsets, etc…) to HTC, which has traditionally been a strong player in the manufacturing of such devices, in exchange for a guarantee that the company would continue developing on Android and/or some of the patents the company may have acquired in its recent deal with S3. The company should also look to sell Motorola’s manufacturing divisions to HTC, which could merge them into their more traditional contract manufacturing offerings.

The company could also sell the handset unit to Samsung in exchange for a similar deal.

Google would then be able to consolidate the patents and protect all companies in the Android ecosystem and avoid any potential channel conflict in the process.

The TV business

Another noteworthy part of this acquisition is the TV set-top business, which has been valued at $2.5 billion in the past but is also seen as having a value of near $0 in this acquisition deal.

Through acquisitions, Motorola has become the leader in providing boxes that connect cable and satellite broadcasts to television. In the US, for example, they are part of the duopoly with Cisco in the TV set-top box business.

This creates ample opportunities for Google and its floundering Google TV offering. Through this acquisition, the company now has a chance to control a large part of the future access to the living room. It won’t happen quickly but I would not be surprised if GoogleTV started showing up as part of cable package offerings over the next few years.

Along this path, Google acquires a large amount of relationships with cable TV providers which may help it in ts quest to deliver YouTube content to more people.

Winners and Losers

A deal of this size is so disruptive that it engenders its own set of winners and losers.

I would say that, at first glance, the big winner on this is obviously Google and the big loser is Apple. With this deal, Google has gone on a full assault on the Cupertino-based giant (which, just last week, became the most valuable company in the world.)

First, the cold war between Google and Apple has now gone hot: Motorola and Apple were involved in several lawsuits prior to this acquisition and I assume that Google will not back down from those.

Secondly, Google is not only going after the mobile business but gets to be disruptive to the movie and TV business (due to the set-top unit) and could potentially thwart Apple’s burgeoning AppleTV business while at the same time undercutting iTunes in the video space.

It is unclear as to whether Microsoft and Nokia are either winners or losers in this deal.

Microsoft could end up a winner if Samsung and HTC decide to spend less time on Android and use Windows Phone as a hedge. Or it could be a loser if it turns out that integrating hardware and software is the key to success in this market (the company acquired Danger a few years ago and was unsuccessful with its own handsets).

Nokia could be acquisition targets for Microsoft, which could make them winners moving forward. Or Google could offer free phones, killing both Microsoft’s chances at selling an independent OS and Nokia’s chances at selling many Microsoft-OS based phones.

RIM and HP (due to the Palm unit) strike me as the biggest losers in this market. Neither of them has a strong footing in the marketplace and today’s announcement seems to further strengthen the Android position, giving them less room to maneuver. Furthermore, the rich patent portfolio Google is acquiring may mean that the two companies will have to pay more royalties to a business that has been killing them. Either way, the future is, at best, uncertain (if they were to license their OS out, they may have a chance).

Conclusion

Today’s announcement substantially reshapes multiple competitive fields. The effects will be felt in both the mobile and living room spaces for months and years to come. It’s a bold play by Google but also one that is pretty conservative because the benefits accrued as a result of this acquisition are substantially larger than the price tag (let’s not forget that, considering Motorola’s cash reserves and revenue projections, Google is bidding less than 1x Motorola’s yearly revenue on this).  This deal seems like a real game changer with little or no downside for Google.

Tristan Louis is the founder and CEO of Keepskor and writes the influential tnl.net weblog, where this was initially posted under the title Google Acquiring Motorola. You can follow him on twitter here or receive his weekly newsletter by subscribing here.

It’s a very smart move on the part of Apple, which highlighted the change in the way the company is operating by changing its name from Apple Computer, Inc. to Apple, Inc. , reflecting the fact that they are no longer just a computer company.There were a few interesting items of interest, though.

For starters, no mention of how the phone will sync up with a computer. Are we to assume that it’s Mac Only or will it synchronize with computers running Windows too? If so, does that mean that a new set of applications will be available to Windows users to sync their address book, calendar and email with systems like Outlook or will the device require to manage those things specifically using Apple applications on Windows?

The other thing that was interesting is the announcement that the phone will run on quad-band GSM and will be using EDGE network. This means that the phone will get decent but not great data service. Perfect for email and light web browsing but not quite fast enough for video streaming. However, the introduction of WiFi in the device, which many other companies have avoided for fear of losing battery capacity, could take care of that.

The other interesting thing is that the operating system on this device is OSX. This seems to point out to two possible issues: First, what does that mean for PortalPlayer, which has traditionally provided Apple with the operating system (embedded on a chip) for the iPod? The second question is what does it mean in general: What Apple has introduced is basically a mac in a small form factor, which could easily compete with the UMPC specifications introduced by Microsoft. It’s pretty clear that Apple has a lot of plans in the future for that device but they didn’t say much about the significance of OSX, providing it almost as an aside (and what does it mean for the next version of OSX, which was not mentioned during this keynote at all, a surprising omission in itself.)

Who loses?

Judging from the reaction on the stock market, it’s pretty obvious to see who loses: Palm (makers of the Treo), RIM (makers of the Blackberry), and Motorola and Nokia will obviously not be thrilled with the entrance of Apple in this market. The exclusive deal with AT&T (ooops, sorry, Cingular) will also have a negative impact on Verizon, Sprint, and T-mobile as Verizon will see a number of users switching to them in order to get their hands on this device (in informal discussion with a number of fellow geeks, the disadvantages of moving to Cingular were far outweighted by the coolness of this device).

Let’s take a quick look at specs and see how the difference devices fare against this new entrant:

So looking at it, this phone is pretty expensive (you pay for the Apple premium) but packs a lot more features than other phones in the same category. It’s got a better camera, more memory and a larger screen as well as WiFi. It’s talk time (for the category) is actually pretty good (only bested by Nokia’s E-62) and it is a little heavier than the competition. For a first entry in the market, I’d say that Apple has a winner on its hands.

Tristan Louis is the founder and CEO of Keepskor and writes the influential tnl.net weblog, where this was initially posted under the title The iPhone is here. You can follow him on twitter here or receive his weekly newsletter by subscribing here.

Voice Over IP

The big surprise here was the acquisition game. When I made the predictions last year, i thought that the acquirers would be larger telcos. However, companies like Ebay and Yahoo! have been playing the acquisition game, looking at telecom space as a feature to add to their product set.

It does, however, show the rise of European players in the US telecom market. Skype was clearly a European player that was seen as a major player in the US market, which explains the acquisition by Ebay.

Asterisk also experienced a banner year with deployments increasing in the small and medium enterprise market. It has not yet broken into the large scale enterprise market so I get only half points for this prediction.

Entertainment Convergence

The convergence I predicted in the post is now in full swing. the introduction of the Xbox 360 as a convergence device and the rise of the video iPod as a way to move television into the arena of small consumer electronics has turbocharged the space.

While MP3 has not yet become the standard for mobile phone, it is starting to emerge. The disastrous release of the Motorola ROCKR has probably slowed progress in that area but I still content that it will happen in the future. Pass on this one.

Meanwhile, the prediction that the movie industry would start suing is starting to come true. They’ve started with a campaign trying to convince people of the evils of illegal downloading. However, the MPAA seems to have learned, to some extent, about the disastrous effect of suing one’s customers and is being careful to not follow in the footsteps of the RIAA.

Also as predicted, legal downloading of television shows is happening. It came from an unexpected source in the form of Apple, which is now taking the formula it applied to music into the rest of the space.

The decision by both XM and Sirius to offer a combined solution that includes both Internet streams and satellite feeds in the same package is following my prediction that radio is about to be upended.

The rise of user-created content is also one of the big stories of 2005 and I believe it will continue through 2006. While no star has broken out of the podcasting and videocasting world, I believe we’re on the cusp of seeing this happen. On the video end, I believe rocketboom will be the first star to break out. Their recent announcement of a partnership with Tivo is just the beginning. On the podcast end, the space is getting more complicated: the entry of the mainstream players into the market could act as a buffer, keeping new players away or at least protecting the status quo.

Business

Large mergers did indeed take the forefront in the 2005 year, however none of the mergers I predicted actually happened. A lot of money went into merger and acquisition budgets and has increased greatly in 2005.

Also impressive is the fact that many of the smaller players were the target of acquisition. It seems the new exit scenario for web 2.0 companies is not to go the IPO route but to find a larger company that will gobble you up.

Apple

This one is way off. Most of my predictions were off base: Apple did introduce a video player, to critical and consumer acclaim, and an iWork product suite, but they did not introduce any photo camera, a recording player, or a way to send images straight to printers. Their partnership with a phone company (Motorola and the ROKR) was fairly disastrous, showing the company still prefers going at it alone than trying to partner up.

Development

Service oriented architectures, trust and security did take to the forefront this year. Meanwhile weblogs and content management systems have not merged yet. However, more and more large companies are starting to take a look at weblog software, with RSS become a major distribution channel. This trend will continue to accelerate into the new year.

Personal

On the personal front, I made a commitment to blog more often. While it looks like this commitment will not come true (I didn’t create more entries), it comes with a substantial disclaimer. This year, I tried to focus on longer, more analytical types of pieces. My decision of doing it that way was largely due to a decision to try to add to the overall discussion instead of rehashing what other people have been saying. The interesting thing is that this approach has actually resulted in more readership. You don’t have to blog a lot to get people to read you; you just have to craft quality blog entries.

Tristan Louis is the founder and CEO of Keepskor and writes the influential tnl.net weblog, where this was initially posted under the title 2005 Predictions: Keeping the Score. You can follow him on twitter here or receive his weekly newsletter by subscribing here.

The 5-years outlook

The interesting thing is the timing of the move, a bit over 10 years from the move from 680x processors to PowerPC and a big over 5 years from the transition from MacOS to OSX.

In 1994, the company decided to abandon some of the more proprietary components of its hardware architecture and move to a more “open” hardware architecture, using models similar to what was then available in the PC world. At the time, the transition was largely seen as just a processor transition but it was a much larger move to more open hardware architectures.

Then, in 2000, the transition started from the proprietary MacOS to a more open Unix-based operating system. Once again this was seen as an Apple only move and mostly seen as a simple migration.

Today, the company announced that it was moving from PowerPC to Intel-based x86 processors, a move that leaves open more questions than it answers.

However, it shows a clear trend in the company’s approach to change: Every 5 years or so, the company makes a move towards more openness. I’m assuming that, at this rate, Apple will make a decision to either move to a more open platform (notice in today’s announcement that they did not announce they would be available on hardware beyond Apple’s own hardware) or ditch the operating system and work on being a hardware company with a few Windows-based (and/or linux based) software products. This decision, in my view, will be announced in either 2010 or 2011.

The short term outlook

I would say that, short term (under 5 years), the move will be towards introducing an Intel-based laptop running OSX. Basically, the G5 laptop is not just not happening this year, it’s as dead the famous Monty Python parrot. However, the Apple Intel laptop is coming and it will probably be one of the first item they introduce under the new line.

The next thing that we’re going to see is a new price drop in some of the hardware. Expect more of the iMac line to trend down price wise. I suspect Apple will use the iMac line as a value line with prices ranging from $399 to $1000 for desktop and from $999 to $1500 for laptops. However, they will probably bring to market a higher end line of pro (or prosumer) devices. This strategy might help them grow their marketshare.

Third, expect Motorola/Freescale to be the first one to suffer. The transition, on the desktop, will probably start with the G4 line and then be followed, later, with the G5.

Fourth, expect Apple to announce a new version of their server and a new version of OSX running on either Intel x86 processor or Transmeta chips (technically, one could assume it’s possible).

And what about the lawsuits?

A few months ago, some blogs leaked information about upcoming Apple products and Apple filed suits to find who their sources were. Last week, the Wall Street Journal and Cnet leaked info about this move to Intel and… well, I guess Apple must have decided to stop suing people or maybe they are just reserving lawsuits for bloggers.

Update

: A helpful reader pointed out that I had argued in favor of the switch last year.

Tristan Louis is the founder and CEO of Keepskor and writes the influential tnl.net weblog, where this was initially posted under the title Apple moves to Intel. You can follow him on twitter here or receive his weekly newsletter by subscribing here.

Size matters

My first thought, when I read the specs, was about the size of the device. My Shuttle computer, is 6 inches high by 8 inches wide and 12 inches long (yes, I had to pull out the ruler on that one). By comparison, the Mac mini comes in at 6.5 inches square and 2 inches high. Something tells me that there is more to the dimensions that pure aesthetic design. For comparison’s sake, I decided to take a quick look at my entertainment center: 2 inches happens to be about the height of my VCR (yes, I still have one) and my DVD player is taller than that.

I then decided to look around the web. Tivo 2 boxes come in at over 3 inches in height; The smallest Windows Media Center edition machine (from Hush Technology) comes in at 3.9 inches in height. In fact, I could find very few items that would come in at the same size. Somehow, I don’t think it’s a total coincidence or has much to do with design.

It seems to me that the play here is for the living room and not just the living room but right there under the TV. I would not be surprised if a future version comes in slightly larger but with things like a TV tuner built in or what not.

But the entertainment center is just the first place where a Mac mini would fit. It seems perfect for a car too. Apple has been courting a lot of car companies about integration with the iPod. What if the play is larger than that? Somehow I don’t think BMW, Mini Cooper, Mercedes-Benz, Volvo, Nissan, Alfa Romeo and Ferrari are only interested in the iPod. What if Apple has showed them something more? Something like a Mac mini as in-car entertainment center. The power input seems to be external to the mini itself, something that not only save space but is also unnecessary if you already have a power converter (as cars do).

Since Apple is currently playing the consumer card (hence the iPod strategy), why not take it all the way. The size seems to point to more than just the desk (so we can already assume the entertainment center). The car partnerships have one thing in common: generally higher end (luxury) cars. These are the types of cars that usually sport in-car entertainment centers (DVD player, television, GPS navigation, integration with cell-phone, etc…) so it seems that it’s a solid high end consumer market.

Price point

Which makes the price point all the more interesting. It’s a small computer so you’d expect to pay a premium but no. Apple has decided that this is their new entry point price, selling the machine at under $500. Why? Well, for starters, it makes it easy to go after the switcher market (they have monitors, keyboards, mouse, etc… already) so Apple plans to capture people that have bought iPods (or lust after one) and get them to check out the Mac. Cool… and obvious.

Less obvious, however, is the price to retailers. If you think that the average price on an in-car multimedia is around $500–800, then it starts to makes sense. About $400 for the machine, throw in another $150–200 for LCD screens and GPS navigation and you’ve got a good car system. All it needs is an interface.

The Interface Conundrum

So the iPod is nice but its interface is very text-centric, a bad thing if you’re sitting across a room. However, it’s simple and Apple has learned a lot about how consumer use electronic devices in the process. They are now learning about the mobile phone market, observing through their partnership with Motorola. With all this experience, they’re refining. I remember talking to the WebTV management team when they were getting started. One thing that always stuck with me was that they had all worked for Apple at one time and that they had all worked on set-top boxes. It means that, for almost a decade now, Apple has been playing around with the concept of entertainment centers.

The simplicity of the iPod interface was largely due to the fact that it was designed outside of Apple. However, the simplicity lesson may be one they learned. Look at the Shuffle and realize that they have seen how to “simplify” interfaces to the point where they become ubiquitous.

Ubiquitous computing or Apple as consumer electronic giant

Ubiquitous computing has long been a dream but Apple may be working on it. Notice how they tend to look at the PC world: ugly boxes, bad design, etc… The only company that seems to scare them a little is Sony. Why Sony?

Well, because Sony is a consumer electronic giant and that’s where Apple wants to play. At the end of the day, Steve Jobs realizes that the days of Apple as a computer company are numbered. However, the company can reinvent itself as a consumer electronics giant.

This is where the mini goes. It’s not really a computer but it may be the second front in the battle for consumer electronic supremacy.

I can already hear nay-sayers going “But Steve always says that there is no play for Video…”

If that’s truly the case, explain the work on Quicktime? Explain why the company continues to invest in products like iLife and Final Cut (and its express version)?

The truth is that up until last week, Steve Jobs was on the record poo-pooing the flash MP3 player market (that is, until he introduced an Apple branded one.)

At the end of the day, what he’s building with the mini is a platform, not just offering a new product.

Apple vs. Microsoft

When talking about Apple, the elephant in the room is always Microsoft. This is where it gets interesting. Apple and Microsoft are going after the same market but looking at it from different standpoint. In a way, Apple is the revolutionary storming the castle, offering a view of the world that is shaped around creating and sharing digital content (hence the iLife products and their higher end counterparts). Microsoft is about receiving content that has been created by others (hence the Windows environment, where the focus is on being able to record television, buy music, etc…) That’s the commonly expressed view, anyway.

However, upon closer inspection, Apple is trying to lock more down. Their strategy is an end-to-end one: we have the software, the music store, and the devices to play the music on. Microsoft is more egalitarian in its approach: we build the environment, what people do with it is up to them and we hope some good software will help us sell more.

Both companies offer DRM but with a difference. Apple keeps its DRM to itself. Microsoft sees their DRM offerings as respecting boundaries. I’m not sure I fully buy into the Microsoft argument or the Apple one but I know that I will be writing more on all this soon.

Tristan Louis is the founder and CEO of Keepskor and writes the influential tnl.net weblog, where this was initially posted under the title The Mac Mini platform. You can follow him on twitter here or receive his weekly newsletter by subscribing here.

I know mac users will probably flame me for this but I believe that the direct result of this is the need for Apple to start taking a serious look at more of a cross-platform approach. Before you send me irate emails, however, realize that I am a mac user (we have several macs at home and I use an iBook as my primary machine, largely due to the small footprint factor (there are previous few 10 inch screen computers in this world and I am among the list of oddballs that prefer that form factor when it comes to portables)) and that I only want to see the best for Apple, a company that exudes coolness when it comes to marketing and design but one that may be losing the war in the consumer space.

Why I feel now is the time for Apple to consider a change

Over the past few years, Apple has made great headways in the music business, first with the iPod, which now holds a substantial lead over all of its competitors, and later with the iTunes Music Store, which has solidified the company’s position in the emerging world of digital music. Much of that success, I believe, stems from a smart decision to look beyond the mac and start offering like-for-like products on the windows platform. First, it was an iPod that could work with Windows, and then it was iTunes for Windows. Historically, Apple has had many successes on the Windows platform. Look, for example, at the success of Quicktime, which still represents a dominating force in the world of digital video. I believe the embrace of either Windows or Intel as a platform (in the examples I’ve given, it is the combination of both) always benefits Apple as a company. Every time Apple has offered a product on those platforms, it’s been successful. Let’s look at different combinations and the advantages and/or pitfalls of that approach.

Apple and Intel

It’s hardly a secret that Apple has switched CPU providers in the past. While their relationship with Motorola sustained them through the 80s and 90s, the move to the G5 architecture showed a willingness to switch provider. In that case, the provider became IBM, ie. the other provider of PowerPC chip. Who’s to say that Apple could not start holding discussion with Intel, looking to them as a provider of chips for their platform?

One of the possible combination here would be to port the Mac OSX operating system to the Intel platform. The bottom line would be a new market for Apple software product and a third alternative to Windows and Linux on the Intel platform. Darwin, the underlying core of OSX, is based on BSD. It has already been ported to the Intel platform and BSD itself has a rich history of distributions running on Intel processor.

The advantage of this approach is that it would make OSX available to a much wider public. This could translate into higher software sales for Apple (which provides a more end-user focused product than Linux at this time and a more secure product than Windows at this time) and could allow for a rise in the number of developers for the OSX platform as the potential of a larger market could enlarge the whole eco-system. One could foresee a time when iLife would be offered on that platform and Apple could use this as a seed for their new product offering.

On the downside, is the competition presented by Windows and Linux. By some accounts, Apple is now in danger of becoming the third most popular Operating System, behind Linux and Windows. However, one could look at this approach as a way to stem some of the losses. Another downside would be that Apple hardware would no longer be tied to the OS itself so people who want the features of OSX would not have to buy Apple hardware.

By offering their operating system on Intel processor, Apple could find itself with a growing market again in the OS world, providing a solid mainstream consumer alternative to Windows. On the downside, it could be cannibalizing its own hardware sales.

Apple and Windows

All this brings me to part two of the Wintel Strategy: Windows machine from Apple. It is undeniable that the look and feel, the design, and the marketing of Apple hardware exude coolness. The hard work that the Apple design team puts in its products is a large part of the company’s continued relevance in the market and few companies (Sony and Alienware are the only ones that come to mind) in the industry have the kind of following that Apple hardware enjoys.

If Apple started offering hardware that ran with Transmeta CPUs and could run Windows software, one could see an upsurge in the sales of laptop and desktops as part of the Apple business. For the last few years, sales of macs have been sluggish at best and I believe that part of the problem is a skittishness on the part of consumers to be locked into the Apple world, forced to use only Apple hardware and software. With the software being liberated, Apple could look to a slow migration of its hardware platform to Transmeta processors (AMID or Intel could also be contenders).

Why Transmeta? Well, my thinking is that the Transmeta approach is to do software-based processor units through code morphing. If they were to offer a G5 equivalent of their morphing software. This would establish a base line in terms of offering equivalence with current hardware. The next step would be to offer the same hardware but with the Transmeta Intel-based chips, which could then run the windows or Linux platform (or any other Intel-based OS). Users who want to experience the coolness factor of owning a mac would be able to do so and still run the apps that somehow kept them from moving to OSX.

On the downside, Apple would not necessarily hold much of a lead with the operating system. As more and more Intel-like systems go out the door, Apple could loose some of the remaining market share they hold in the operating system. Another potential downside would be the commoditization of the hardware platform. However, I believe they would still be able to hold patents on their designs and continue producing products that look cool.

Sounds crazy, doesn’t it?

Some people will probably dismiss these concepts as plain nuts and I have to admit that it takes quite a leap of faith. To me, however, that leap of faith was made by Apple with the iPod and I believe that they can make it again as a way to increase their overall market share.

The overall downside of this strategy is that it might anger fans, who are notoriously devoted to the company. However, Apple has not really worried about this much in the past. In the 90s, the company started OEMing their hardware platform but decided to pull back when some vendors started representing real competition (remember PowerComputing?)

The question is whether Apple wants to remain a niche player in the computer market. Based on the last quarterly report, it seems that most of the growth is coming from the music business. So maybe this would be a good way to reinvigorate the computing part of the business.

Tristan Louis is the founder and CEO of Keepskor and writes the influential tnl.net weblog, where this was initially posted under the title Why Apple should consider Wintel. You can follow him on twitter here or receive his weekly newsletter by subscribing here.

Last week, while on a business trip in California, I bumped into what may be the largest barrier to a wireless Internet: lack of connectivity.

San Francisco had OK coverage but the Silicon Valley, supposedly ground zero for the Internet revolution, seemed to lack the proper infrastructure. At any moment, your connectivity is jeopardized and a move of a few feet can make all the difference in the world between connection and lack thereof. All and all, a sad state of affairs.

However, it was perfectly understandable, considering all the hills and valleys covering the area. What is more worrisome is that I have yet to find someone else addressing this issue. In the last week, I have talked with several people in that area and most of them looked at wireless internet access as somewhat of an oddity. All the people I talked to are actively involved in the Internet industry, either as I-builders, content developers, or software manufacturers. All of them took it for granted that bad cellular coverage and lack of reception was a fact of life. A lot of them were involved in wireless development.

What does all this mean? It means that we are dealing with people developing applications without really using them. Is that good? I doubt it. From my point of view, one can only make truly revolutionary advances in a field if he or she lives within that environment.

So the progress will have to come from somewhere else. Last year, I warned of Europe potentially becoming centerstage to the Internet revolution; This year, I am starting to see proof of that.

In Finland, Nokia has already connected most of the country with a very impressive WAP network. 65% of the people have cell phones and most of those are WAP enabled. Want to check a movie time or restaurant reviews, you can do so, using WAPit, one of the largest portals in the world for WAP applications (unfortunately, most of the content is in Finnish so if you dot know the language, is pretty difficult to use).

Most people over there send short e-mail like messages over the SMS protocol. At 160 characters per message, you cannot say much but is enough for “Meet you at the movie theater at 7pm” or “Lunch?”

In Spain, Motorola and Packet Video recently demonstrated wireless video over a GPRS ( the next generation of high speed GSM) network. For the Barcelona exhibition, both streaming and live video content are being provided from the Internet and a selection of web cameras, and transported across the Motorola end-to-end GPRS solution to the end-user device. The web cameras are situated at PacketVideo’s headquarters in San Diego, at the Barcelona congress centre itself, and at the Invisix centre of excellence in London, a Motorola/Cisco joint venture says the press release.

In Japan, the revolution is in color. A recent survey by Nikkei Market Access showed that over half of the Japanese phones produced this year will have color LCD screens. Those will be use to not only surf the web (in full color) but also potentially to do videoconferencing over GPRS.

Why is progress happening outside to the US? Quite simply put, because they have agreed on a standard (GSM) and are now all working on building its next generation. In the US, we are crippled by a number of different proposals from each of the providers, which has crippled progress as each company goes its own way developing its own proprietary network and technology.

What is needed now is for the American wireless service providers to sit down and agree on implementing GSM. Once that first step is accomplished, they will then need to figure out a system to charge each others back for carrying a competitors traffic on their network. Here’s how it would work. At some set times, the wireless service providers would sit down and agree on a standard and a rollout schedule. Once that is accomplished, they would jointly rollout GSM networks all over the country and work on building a system that would allow anyone to use anyone else’s wireless network. The companies would then charge each others back at the end of the month for all the minutes that non-subscribers have spent on their network. The result would be increase coverage for everyone, but may be a little more expensive than the service we have nowadays.

Where phone companies would innovate is on package of new services they could offer and still on the discounting schemes they already offer.

The customers might have to pay a little more for service from their provider but they will not have to worry whether they are running on AT&T, Sprint, or someone else’s network.

Crazy concept? I dot think so. Do you worry about whose network you’re running on when you are making a long distance call on your landline? No, you do not and the kind of agreement I am talking about already exists among telcos in that space. Why should it be different in the wireless world?

You’re probably wondering why any company would agree to something like this? How about to regain a leadership position in the world market and allow to use your phone anywhere. If such a plan were to be put in place, you could technically have the same phone whether you are in the US or in another country and the wireless provider could expand into overseas markets more easily. Foreigners are already starting to get onto the American market (British company Vodafone, for example, merged its American wireless operations with Bell Atlantic). If American companies want to continue their growth, thell have to expand overseas.

Last but not least, the Internet industry will have to eventually push for something along those lines if it truly wants the wireless revolution to happen. Otherwise, the US will still remain one of the most disconnected country in the world.

Tristan Louis is the founder and CEO of Keepskor and writes the influential tnl.net weblog, where this was initially posted under the title It’s Connectivity, Stupid!. You can follow him on twitter here or receive his weekly newsletter by subscribing here.

AOL started moving further on its AOL Anywhere Strategy by announcing partnerships to deliver its Instant Messenger services on the Bell South and Sprint PCS network and to equip Neopoint, Nokia, and Motorola devices with the necessary software to do this too.

Microsoft announced partnerships with Nextel and Airtouch to deliver MSN to their networks. This follows recent announcements by Microsoft that its technology would be integrated in Sony and Quallcom wireless devices.

Meanwhile, Palm Computing announced a deal with Sun Microsystems to make Sun’s iPlanet service available to Palm VII users.

But with all the hype, one has to wonder whether wireless is truly here and what hurdles it has to overcome. From this issue on, I will take a quick look at some of the issues facing wireless web implementors these days, adding wireless as a new category of coverage. We will start with the formats.

WAP, WML, HDML, PQA???

It seems the wireless space in adept at developing a new set of standards. While this world is just burgeoning, a number of implementations have already surfaced.

WAP

: As defined by the WAP Forum, WAP is the Wireless Application Protocol. Think of it essentially as HTTP for the wireless crowd. Backed by the W3C, the IETF, and the ECMA, as well as most large wireless industry players, WAP has become the de facto standard for wireless delivery. However, some companies (NTT comes to mind) have tried presenting alternatives to WAP and have so far been relatively unsuccessful. However, I doubt that WAP will go very far as it limits the number of characters that can be sent to about 1600. For stock quotes or weather reports, it’s a great think but beyond that, I doubt that anyone will use it for Ecommerce or content.

WML

: WML stands for Wireless Markup Language and is an XML based subset of HTML. However, a war as broken out in that space, with phone.com (one of the early pioneers in the wireless space) striking out on its own and developing a competing standard called HDML.

HDML

: HDML, or Handheld Markup Device Language, phone.com proposal for a new markup language. At the current time, the W3C has worked with phone.com and other markup language partners in an attempt to resolve the incompatibilities between the two offerings. With the cachet of WML increasing over the past year, phone.com has started supporting both format but offers HDML has a language with new tags that allow it to extend WML applications. Because it was an early player in the field, phone.com has taken a lead and could be the Microsoft or Netscape of that space. As a result, the extensions they are providing can’t be ignored.

HTML 4.0 mobile

: Last year, with the introduction of HTML 4.0, the W3C made some recommendations in terms of supporting HTML for wireless devices. Throwing further confusing in the wireless space, the W3C decided that HTML 4.0 and its successors might be the way to go, throwing more oil on the wireless fire. While no recommendation has been made yet on an actual standard and in spite of the W3C’s claim that it is working to resolve disputes with the W3C, expect some serious in-fighting between the different groups as they try to position themselves in the next hot web application space.

PQA (Palm Web Clippings)

: A couple of years ago, I pointed out that the Palm OS could be a potential Java competitor in the non-PC devices space. As could be expected, Palm went out and introduced the Palm VII, a wireless device with connections to the web. What was surprising, however, is that instead of going out and supporting either WML, HDML, or even HTML, they decided to introduce their own format to distribute web content: PQA or the Palm Query Application language. PQA is a paired-down HTML version that allows you to distribute content on the wireless Palm platform. Since services like OmniSky plan to offer wireless access to Palm devices other than the Palm VII, and since Palm already has an established footprint in the PDA space, expect PQA applications to pop up left and right.

A lot of format but what do I implement for?

At the current time, it seems there are no clear winners in the space however it seems clear that WAP has a strong lead in the delivery space for small bits of data. But WAP will not be the way to do Ecommerce or content as a clear character limitation makes it fairly useless for this. On the markup front, I’d strongly recommend looking at WML as it has received support from some of the larger players (Microsoft and Sun, among others) and seems to be the basic level of functionality. However, you should also look very seriously at the PQA format because of Palm’s extremely large footprint in the PDA space.

Tristan Louis is the founder and CEO of Keepskor and writes the influential tnl.net weblog, where this was initially posted under the title Wireless: A confusing Landscape. You can follow him on twitter here or receive his weekly newsletter by subscribing here.

Morphing software

Many of the media seemed to miss the story, however, treating it as just another company announcing a new computer chip. What they missed, largely, is the revolution heralded by Transmeta’s code morphing software. What it does is translate X86 instruction into Transmeta’s native code.

The revolution behind this lies mainly in the fact that this architecture could theoretically allow machines running Crusoe (the Transmeta line of chips) to act not only like x86 machines running either Windows, Linux, BSD, BeOS, or Solaris for x86 but also run code designed for any other chip. All they would have to do is throw in a different version of the morphing software on top of the chip (say, for example a G4 software layer) and run the OS running on other machines.

Logically, what Transmeta has done is simply create the most versatile chip in the industry, allowing it to morph into all the most popular computer chips out there through software emulation.

And because the first translation layer they built is the x86 one, it means that their chip can now power Windows and Linux boxes as well as any Intel chip.

In other words, what Transmeta announced today is that they had built a chip that is what Sun is trying to build with the Java chip, and in the process they have created what is essentially a virtual machine that addresses directly the chip, completely bypassing the OS.

Caching for better performance

Another interesting part of the announcement of an adaptive algorithm in their chip set that caches the most often use instruction sets. As a result, the performance of the chip is greatly increased because the Transmeta software caches the information that repeats itself. In the demo they gave at their press conference, they showed how running a DVD movie on a Pentium III processor compared to running the same movie with the same DVD reader on a Crusoe chip. The difference was stunning. While on the Pentium III, the idle time drop from roughly 90% to roughly 50% for the duration of their running the application, the Crusoe chip first saw a spike to less than 50% for a couple of minutes and then went back into idle mode as all the necessary instructions to run the DVD players had been cached in memory.

The bottom line here is that they have essentially created an adaptive multi-tasking environment on a chip.

Built-in power management

The other thing that was interesting was their approach to power management. For starter, the Crusoe chips do not call on all areas of a processor all the time. Because of the adaptive nature of their memory caching system, they show a major performance increase at a lower consumption rate. According to the Transmeta web site,

When an application doesn’t need peak processor performance, the model TM5400 can save power by reducing its clock speed and voltage. Using Transmeta’s LongRun power management technology, software continuously monitors the demands on the processor, dynamically and smoothly adjusting the processor’s speed to exactly what is needed to run the application.

You probably keep more than one application open on your computer at a time (for example, as I’m writing this, my email client is running in the background, as well as a few browser windows from which I’m getting information) but most of those being in the background, they should take major amounts of CPU. A Crusoe enabled machine would realize that and reduce the voltage consumption of those tasks, therefore increase the battery life on your computer (this is, of course, aimed at the Mobile market Transmeta is going after).

On a regular machine, the chip knows either how to turn a process on or off but not how to degrade it to lower power consumption. As a result, Transmeta has built a better mousetrap.

Upgradeable through the Internet?

Because the core of the chip resides in a software layer that sits above the hardware level, it is possible to create a chip that is upgradeable through the Internet. A few years ago, the first ROM-upgradeable modems came out, allowing users to move from a 28.8kbps modem to an 56k modem by just downloading software. Theoretically, Crusoe chips should be upgradeable in much the same way, which makes for an interesting world where hardware and software become closer.

But why does Linus Torvalds work there?

The question on the mind of hordes of Linux users was why would Linus work at a chip company? Well, today, the answer was given. Along with the announcement of the new chip, Transmeta announced Mobile Linux, a version of Linux designed for systems without hard disks, such as Mobile Internet devices (for example, Web pads, palmtops, etc…)

The principal enhancements for Mobile Linux will be in power management and in the reduction of the memory footprint. So that’s what Linus has been working on all this time, as well as being part of the team that built the morphable software. All and all, one can say that it was really smart of them to add him to their roster of talent, as it will fire up the Linux community to develop for this new version of Linux (and yes, Mobile Linux will be open source).

Style change

In what may be a departure from the industry’s playbook, Transmeta decided to announce the products they had on hand. Yes, the chips are available today (they mentioned that IBM would manufacture some of them) and no, they won’t answer any questions about the future. In other words, this is no vaporware but a very real set of products. This could change the way companies around the industry release their products.

The losers: Palm Computing, Sun, Intel, Motorola and AMD

All and all, this announcement changes the landscape for a couple of major players. For starters, Palm Computing might find itself in the middle of a very big battle. Because of the low power consumption of the Crusoe chips and the introduction of Mobile Linux, it is now possible to envision Palm-sized devices that can run audio and video. This represents a major threat to Palm Computing’s installed base.

Second among the losers today are the chip companies. Because they can run the x86 set, Transmeta’s chips are a potential replacement for Intel and AMD chips in the laptop market. A lot of the problems those chips have encountered is that the higher the processor speed, the hotter the chips run, and the larger the fans that need to be used to cool them. If Crusoe holds up as well as they demoed, Transmeta could capture a major lead in the laptop market. Add the morphing software architecture and Transmeta could also become a competitor to chip makers Sun and Motorola.

Sun is further hurt in the fact that this is a virtual chip that takes away from the concept of virtual machines that Sun pushed with Java. As a result, Sun’s hope of covering the market with Java devices as well as their JINI-everywhere strategy may have to be rethought.

The winners: Linux, Microsoft, Consumers

Linux is a clear winner with the introduction of Mobile Linux, which will strengthen Linux’s gain in the computer market by offering it as an alternative to any other OS in the hand held market.

Microsoft, interestingly, also becomes a winner with this. With Intel making some moves to back alternative operating systems, Microsoft was finding itself in the difficult position of being somewhat subservient to its biggest ally. Yes, there’s AMD but Crusoe is yet another competitor to Intel, which only strengthens Microsoft’s position in dealing with the chip manufacturer. Also, Microsoft gains some advantage here because its Windows OS can now run at better performance levels on handheld devices. Yes, it will have to battle Mobile Linux but this could make the main Windows line (Windows 9x and 2000) an alternative platform in the portable device market, which means that Microsoft could now ditch their efforts on WinCE and still have a card in that new market if they want to.

Consumer also stand to win from this announcement as it heralds a new age of mobility. Soon, a lot of low powered mobile devices will hit the market: Portable DVD players and wireless Internet devices now have more of a chance in the marketplace since they won’t consume as much in batteries. I think we’ll all be happy to see those new devices hit the market.

All and all, it was yet another day when a major announcement changed the computer landscape. Since that’s two major announcements in as many weeks, I wonder what’s going to happen next week.

Stay tuned!

Tristan Louis is the founder and CEO of Keepskor and writes the influential tnl.net weblog, where this was initially posted under the title Transmeta Changes the Landscape. You can follow him on twitter here or receive his weekly newsletter by subscribing here.