This Is What Happens To Gold Standards

This is what happens to gold standards when a new, annual revision is announced and sold.

Apple PR:

Apple® today announced pre-orders of its iPhone® 5 topped two million in just 24 hours, more than double the previous record of one million held by iPhone 4S.

AT&T PR:

AT&T* set a sales record with iPhone 5 over the weekend, making it the fastest-selling iPhone the company has ever offered.  Customers ordered more iPhones from AT&T than any previous model both on its first day of preorders and over the weekend.

The iPhone As The New Standard

apple_iphone_5_precision_cameraIt’s iPhone 5 launch week, and as can be expected, there will be nonstop news about the new wonder-phone and all that it can do, can’t do, and how it compares to the competition.  Here’s the thing though, the only people who really care about that, by and large, are journalists, tech pundits, and competitors like Samsung and Google.

Why? Because the iPhone is now the standard. It is the baseline. The norm. The default option. That is both amazing and boring at the same time.

Ever since the iPhone 5 announcement last week, countless journalists have come out saying how boring and how disappointing the iPhone 5 announcement was?  But does anyone really care about that?  Fact is, the iPhone 5’s industrial design was leaked months ago, and this itself takes a bit of air out of the announcement.  But that doesn’t make it any less new.  The iPhone is also nothing but a paperweight without iOS.

In 2007, Apple shocked and stunned the world with the iPhone.  The announcement in January at Macworld, followed by the launch in June signaled a major shift in the industry.  Apple had made its move beyond MP3 players and into a new major industry: not smartphones, not even phones, but mini personal computers disguised as phones. While the first edition was groundbreaking, it still lacked an immense amount of features. These features would need several years of revisions and refinement as the technology slowly matured.  While it can be argued that some launches and introductions were larger than others (ex. iPhone 3G, iPhone 4), the fact is that each revision was merely an evolution of the preceding version.  While many people loved their iPhone 4, the 4S contained significant improvement in the camera and performance department that it was a significant upgrade, even though it looked the same from the outside.

While the iPhone iterates and grows, it increasingly becomes that “one thing” that everyone has with them.  Due to their industry exclusive feature of free, annual OS updates, users feel more than comfortable keeping a handset for 2+ years.  I purchased my 3GS in 2009, over 3 years ago from today, yet two days from now it will receive the brand new iOS 6.  That’s an intangible that Samsung and Motorola and Nokia simply can’t compete against.  You see more old iPhones running around than any other brand of smartphone.  This isn’t just perception.

So what has this brought us to?  We now find ourselves with the sixth generation of iPhone being largely feature complete, now with LTE and a larger retina display while still delivering great battery life.  Could it be better?  Sure! Apple could have included NFC and joined an already immature, increasingly crowded and confusing market, but to what end?  That’s not Apple’s style.  They didn’t include copy-and-paste until it was just right.  They didn’t included multi-tasking until it was great and didn’t kill battery life. But by and large, the iPhone has grown so mature that the industry of mini personal computers has itself grown boring.  And in boring markets, you usually have a standard; a default choice. Consider the iPhone 5 the gold standard. It may be boring, but it’s pretty as hell and most people can’t wait to get their mitts on it.

The Point-n-Shoot Camera is Dead

I’d like to introduce you to a little friend of mine. The little guy you see here is Timone, or “Monie” as his owners like to call him. A couple weeks ago we were up in Brainerd visiting Monie’s family, and being the little rascal that he is (he’s still in the kitten stage of life, being under a year old and all), they got him little bit of cat accoutrement in the form of a shirt that says “Naughty But Nice”. He definitely has the naughty bit in spades, that’s for sure.

So as cute as the little guy is, I ran over and snapped a few shots with my iPhone 4S. I was in relatively well lit kitchen, at night, with predominantly incandescent lighting, and that was the shot I got, straight out of the iPhone 4S camera. And trust me that when you blow it up to 100%, it still looks just as good.

As a life-long pixel peeper, ever since switching to digital for my photography business back in 2002, I’ve always been frustrated by how stupid cameras are. There’s really no other way to say it, but cameras are stupid. Why do you think that when I shoot a wedding, 99% of the shots I take are on full manual exposure? Yep, you got it: stupid camera. Cameras don’t know how to properly expose, focus, balance the color of light, or just about anything. That’s why most pro shooters use RAW: it’s so much easier to correct the decisions of the stupid camera.

And now Apple comes along with the iPhone 4S’ 8 megapixel pocket shooter and I’m telling you that it is just blowing me away. Shot after shot is not only sharp and in focus, but also very well exposed and remarkably accurate white balance. And that’s not even touching on the natural color balance as well (most p&s cameras and camera-phones have a nasty habit of over-saturating photos so that they look hyper-realistic and not at all natural). This little photo of Timone above is just one perfect example of many.

Apple is doing it right. I can’t stress that enough, and as a dyed-in-the-wool pixel peeper, I want to stand up and applaud them for doing that. They’ve learned much from their mistakes: the poor over-saturation from the iPhone 4’s camera, poor white balance, and slow shutter response times. This camera is amazing and produces so many “winners” right out of the gate, that it almost makes me not care that I can’t shoot in RAW. 😉 Almost….

One great example is white balance. Nailing accurate, neutral white balance has long been a great bugaboo of the camera industry, just ask any engineer from Canon or Nikon or Panasonic and they’ve really come a long way and have been at it for years. Incandescent shots come out way too orange, fluorescent light shots come out too green, sunny shots too blue, on and on and on. In the end, we just want it to look like how our eyes are seeing it, but that is so much easier said than done. But this simple shot of Timone, bathed in only incandescent light, simply has a nice warm glow to it, very close to neutral, yet ever-so-slighly warm. Just look at the white of the shirt and you’ll see that it’s very close to pure white, but a little on the warm side. But that’s just how I like it. Portraits look good when they’re a little on the warm side (despite what the Instagram hipsters will tell you…)

I’m telling you, the only thing holding back the true death of point-n-shoot cameras everywhere is the true lack of a zoom lens on camera-phones. That’s the only appreciable advantage they still have. When a company like Apple now has finally nailed it on the optics, the sensor (sony-made), the processing and the software, how on earth can Canon and Nikon compete with that?

We live in a truly amazing time.

R.I.P. Beluga

I sincerely hope this is the last post regarding Beluga I have to write. Since becoming a big fan of Beluga just a year ago, I became concerned when they were bought by Facebook, and then further disheartened when it became apparent that Beluga was no longer loved.

Well, the day has finally come to give Beluga a proper burial:

Now that Facebook Messenger is available everywhere, we’ve decided to stop offering Beluga as a separate service. You can keep using Beluga for now, but we’ll be phasing it out over the next few weeks:

… We’d like to thank you all for being such enthusiastic and loyal users. We’ll continue to use your feedback to improve Messenger and make messaging your friends easier, faster and more fun.

Grrreeeeaaaat… So now that you’ve effectively killed a fantastic, simple, and extremely effective group messaging app, even though there was nothing wrong with it, and now I get to use Facebook instead? You’re assuming I trust Facebook to begin with, and that would be an assumption you shouldn’t make right now.

I’d be lying if I thought we didn’t see this coming. It just would have been nice if they had told us this a long time ago, like back in April when Facebook acquired Beluga in the first place.

So where does that leave us? Well, at this point the only good recommendations I can give are each flawed in their own way. GroupMe is great in many way, but is tremendously hobbled by its ridiculous 160 character limit and the way it deletes your message if you go over while using the web interface. And with GroupMe now owned by Skype, and Skype being owned by Microsoft, I’m not putting it past MS to pull a Facebook and kill the app altogether for their own nefarious reasons.

My new interest is TigerText, which seems to have a lot of potential, but stumbles a little on its non-standard UI. Also of note, TigerText’s 500 character limit isn’t so bad. I’ll be keeping an eye on that one.

The biggest new thing: The Thermostat

Things like this really inspire me. I was a semi-finalist in St. Thomas’ 3rd Annual Fowler Business Concept Challenge and now that I’m halfway through the first semester in my New Ventures Strategies Class, my entrepreneurial spirit is awakening big time.

Years ago I was inspired by great photography. As a photographer myself, I saw the work of fantastic portrait and wedding photographers and I said to myself, “I can do that!”. And so I did. That same inspiration I used to get from amazing photographers like Denis Reggie, I now get from ideas like this one from Wired). The article is about the new Nest Thermostat.

A THERMOSTAT?! Why on earth would anyone care about building a new premium, high priced thermostat?! What problem are you solving? Is the market asking for this or are you trying to create a market? In short, I believe this in innovation that really changes the world. Is it coincidence that one of its founders is Tony Fadell, one of the original creators of the iPod?

Take an industry with zero innovation, that essentially hasn’t changed in decades. Yet here is something that everyone has in every home. It also has a direct effect on energy usage, but more importantly wasted energy. Remember those old stats of “If everyone in the US replaced one incandescent lightbulb with a CFL, we would save XXX tons of carbon each year…”. Now take out lightbulb and insert Nest Thermostat.

And lastly, you can tell that they’re on the right track with ideas like this:

An unhappier discovery came when Matsuoka learned that some of the Nest’s prototype testers were unhappy with her algorithms. She had instructed the thermostat to proactively set temperatures for efficiency: Once it learned when people were out of the room, it greedily lowered temperatures in winter and raised them in summer. But people felt that the Nest was forcing them to change their behavior. It was like Al Gore himself was in the room, barking at you to put on a sweater.

So Matsuoka changed the algorithms, shifting the Nest’s personality to more of a gentle coach than a noodge with a climate-change slide show. Her model was the dashboard on the Toyota Prius hybrid car. Just as the Prius provides feedback on fuel consumption, the Nest gives owners a sense of how they’re using energy — and an incentive to save, as opposed to a guilt trip when they don’t. Now, when you set the energy to a temperature-saving level, the Nest awards you with a virtual leaf — a little icon that Nest hopes you will cherish. It’s like a DIY carbon offset.

It learns, yet also assists you in saving energy, and thus money, but it does it in a way that isn’t overbearing. That’s really the right approach, and I personally can’t wait to see one of these things in action.

Moving At The Speed Of Change

The other night I was cycling around lovely Lake Nokomis when I nearly got into what could have been nasty accident simply because someone wasn’t paying attention.  At Nokomis, they have separate paved trails around the likes, one for walkers and runners and another for people riding bicycles, the whole point being that the traffic for each is such that separate paths are necessary for proper safety.  It’s a great idea, you just have to get people to follow it.  Such was not the case the other night when I was cycling down the bike path and a family of six was walking towards me.   As I approached them, a couple young girls in the family were distracted by a loud airliner flying low overhead and didn’t see me coming at them at almost 20 mph.  Even though I was riding on the very edge of the path, I still passed within a foot of the young girls who were simply walking along, oblivious to their surroundings, on the bike path.

It’s easy to get distracted and not see what’s coming.  I’d be lying if I said I don’t have lapses myself.  Everyday we witness those (our ourselves) who simply aren’t paying attention to their surroundings and ultimately it doesn’t matter whether you’re going 2 mph or 200 because you could end up in a big crash either way.  The short version is to simply call it “change”.   No matter what we do, change is occurring all around us.  Sometimes it may be very slow, virtually imperceptible to the human mind over a lifetime, such as evolution.  Or it could happen very, very quickly.   In business this is no different: the change itself is inevitable, but our reaction or plan for change is what can often mean the critical difference between success and failure.

One of the hottest industries of the past few years is the mobile phone industry, specifically with regards to smartphones and their emergence as a large segment in the mobile device industry.  While smartphones weren’t invented in 2007, the introduction of the iPhone in January, 2007 had more to do with shaping the smartphone landscape today than almost anything else.  Back in early 2007, smartphones were very different than they are today.  The most popular models ran Palm OS, Windows Mobile 5, Blackberry OS and Symbian.  Blackberry had been around for a while, but they were really coming into their own with their new camera sensors built-in to the Blackberry along with a calendar and contact support and web browser.  The Blackberry always had fast and secure email, but now it was a full-fledged smartphone.  Due to the super secure, lightening fast, don’t-have-to-think-about-it email built in to the Blackberry, it was quickly becoming a favorite in the business market and to a much lesser extent, the consumer market.  This would be a time of tremendous growth for Research In Motion, yet also the moment when they most needed to innovate and realize change.

The writing was on the wall.  Whether you bought an iPhone or not, you couldn’t deny its appeal:  sleek and simple design, easy to navigate, big touch screen, geared for average users.  This was something new, something not seen before from any other company.  Even at the exorbitant price of $499 (or even $599 for the 8GB model!) and despite the fact it was a 2G phone (many phones were packing faster 3G radios at that time, albeit at the cost of shortened battery life), it was still an instant success.  Apple had brought a massive wave of change to the industry before they sold a single unit and regardless of whether they actually succeeded themselves.  Their message of beautiful simplicity, an approachable user interface and consumer centric design was powerful.  The only thing standing in their way was the actual execution of the idea and getting the price down from their original stratospheric levels.

We could go on and on about the minutiae of what happened in the years to follow the iPhone’s original announcement, but suffice to say, here in 2011 the landscape is radically different than it was in 2007.  Before the second half of 2007 Apple hadn’t sold a single handset.  Now in 2011 Apple is the most profitable mobile phone company in the world, the iPhone is the most popular smartphone in the world, smartphones are officially mainstream consumer devices and we’re witnessing the repercussions of the companies who failed to pay attention and realize the rapid change that Apple ushered in.

After bringing us some of the first popular smartphones with the Treo back in 2002 (building on the success of the Palm Pilots and Handspring Visors before that), Palm quickly realized that neither Palm OS nor Windows Mobile could compete as a new, modern smartphone OS.  But modern smartphone operating systems don’t exactly grow on trees.  With a new infusion of capital and led by their visionary Jon Rubinstein (one of the co-creators of the original iPod at Apple), they created webOS and the Palm Pre.  However due to their late start, the Pre debuted a full two years after the original iPhone.  The exclusivity to Sprint wireless also hindered their adoption (debuting a device exclusively on the third largest carrier in the US probably wasn’t the best strategy), and in 2010 Palm was bought by HP.  WebOS was commonly thought of as a truly capable modern mobile operating system that truly had the chops to go head-to-head with Apple’s iOS, but what Palm really lacked was great hardware.  So teaming up with the world’s leading PC manufacturer should be a win-win, right?  Sadly, that didn’t happen.  After HP promised to double down on webOS, they squandered many opportunities and released a half-baked tablet called the TouchPad that seemed to have great potential but didn’t offer enough compelling reasons for consumers.  Now on August 18th, 2011 HP has announced their intentions to jettison their personal devices and sell-off or spin-off their PC business.  Could this be the end of Palm, the Pre, the TouchPad and webOS?

Due to having a strong market share amongst OEMs, Microsoft was in a strong position as they licensed Windows Mobile to industry heavyweights such as Samsung and Motorola.  To Apple, Windows Mobile exemplified everything that was wrong with smartphones before the iPhone: very technical, lots of menus and submenus, stylus input, geared exclusively towards business and very unapproachable to the average consumer.  Microsoft’s CEO Steve Ballmer didn’t seem to think the iPhone as much of a threat, yet as their market share took a rapid decline over the next few years, Ballmer finally realized that Windows Mobile 6 was not only not what consumers wanted, but it wasn’t what business users wanted either.  Microsoft went back to the drawing board and finally created a truly modern smartphone OS in Windows Phone 7 (taking some cues from OS design elements from their Zune music player.  Like Palm, it took Microsoft some time to get Windows Phone 7 phones to market (even for Microsoft, modern mobile operating systems don’t grow on trees either!).  Through their licensees they finally launched in late 2010 but have yet to reach significant adoption or consumer acceptance in less than a year.  Shareholders continue to be worried about the direction and leadership at Microsoft.

Nokia was also in a position of strength in 2007 as the worlds leading mobile phone manufacturer.  They leveraged their Symbian OS for their smartphones and while they were extremely dominant around the world, Symbian-based smartphones never quite took off in the US.  While Nokia put tremendous resources to the Symbian ecosystem, the OS itself was never quite powerful enough to compete with the modern smartphone operating systems of today.  It was essentially an advance feature-phone operating system that Nokia kept refining and adding more features.  Unfortunately, just like lipstick on pig, you can’t deny what’s really underneath all that glitter and Nokia’s advanced hardware design couldn’t make up for the shortcomings of Symbian.  With Nokia and Symbian market share plummeting (along with their profits), Nokia replaced their CEO with former Microsoft Business Division President, Stephen Elop in September, 2010.  Elop, with his famous “burning platform” memo, promptly turned the direction of the ship around, declared Symbian dead, and formed a groundbreaking partnership with Microsoft to become a featured hardware partner (though not an exclusive partner) for Windows Phone 7 devices.  Because of Nokia’s traditional strength in hardware and weakness in software, this partnership could ultimately bear much fruit, but as of yet, no Nokia-Microsoft devices have been released and Nokia’s market share continues to drop in the meantime.

Google became an unexpected player in the mobile business when they acquired the small Android Inc. in 2005.  While the new smartphone operating system was originally patterned after the Blackberry and Windows Mobile OS, it changed dramatically and altered course shortly after the iPhone was unveiled in 2007.  They quickly realized that the traditional smartphone user interface was not the template to pattern a new operating system after.  Through extensive financial support of Google, Android has grown and evolved to become the dominant smartphone OS today, largely due to their lighter restrictions, open-source nature (allowing great customization by carriers and manufacturers), and because they’re essentially giving the operating system away for free.  While Android Inc. operates as a subsidiary of Google and their smartphone operating system has seen incredible adoption, the fact remains whether Android Inc. is actually profitable as a business.  While some estimates have Android bringing Google $6-$10 per user, per year in search revenue, how certain can you be that they would not realize this revenue from competing platforms without incurring all of the development costs that go along with a modern operating system that you’re giving away for free?  Combine that with Android’s recent litigation over patents and use of Java, and it remains to be seen if Android, in its current form and business plan, is a wise investment for Google.  Google makes money off of search.  Does Android really bring more people to search than they would if they were using an alternate non-Android device?

With all that has changed in the industry, it’s amazing to see how little Research In Motion has changed.   From 2002:

Blackberry 5810
released 2002

To now in 2011:

Blackberry 9930
released 2011

Now in nine years of research, development, and technological advances, how far has RIM really come?  Besides adding a color touch screen and a better browser, how different are these phones really?  While RIM also works on keyboard-less versions of their smartphones (Storm, etc.), their sales have paled in comparison to the traditional Blackberry layout of full keyboard, short widescreen display.  Does this really look like the phone of the future to you by a company that prides itself on innovation?

The point is that change is not only inevitable, it’s constant.  Some companies create and drive change, some react quickly to it, and yet others play catch-up only after they’re absolutely sure it’s a safe bet.  But if you’re not willing to change with the times, to pay attention to your surroundings and be agile enough to see what’s coming ahead, then you must also be prepared to get off the bike path and into the slow lane for walkers.

Wayne Gretzky once said, “A good hockey player plays where the puck is.  A great hockey player plays where the puck is going to be.”  Is your company playing to where the puck is going to be?