MediaFile

Why I won’t be getting an iPhone 5

Thousands of people will be “the first” to get the new iPhone 5 today. I won’t be among them. I’ve had every model of Apple’s revolutionary handset since it was first unveiled five years ago — upgrading even if my phone contract hadn’t expired yet — and, like the first-time parent of a toddler in a public place, am in a state of panic the moment I don’t know where my iPhone 4S is.

But I am skipping this upgrade. And while Apple is already setting sales records (again) with this launch, I’m seeing this milestone as the beginning of the end of the smartphone as the dominant mobile device in our daily lives.

Don’t get me wrong. I’m not abandoning the iPhone, or any smartphone — at least not yet. I’m not even saying my iPhone 4S will be my last Apple handset, or that the smartphone won’t endure, even if only as a commoditized device.

Mine isn’t so much iPhone fatigue as it is ennui. And through the haze of that boredom there’s the gallop of a new horseman.

The iPhone has become such an appendage it is easy to forget that much — if not most — of the iPhone euphoria is because of the software, which also gets a (free) upgrade today and is compatible with iPhones made for the last three years. The 4S is plenty fast, takes a great picture, has a nice display and was the apple of Apple’s eye one short year ago. It introduced Siri (improvements in part of that free upgrade), arguably now the last real innovation for the iPhone and the first really important one since the retina display.

The bigger screen on the iPhone 5 is nice enough (check out any one of a number of Android phones already on the market to see if 4 inches diagonally is that much wicked better than 3.5 inches). It might as well be 4G LTE-compatible, even if that data speed standard is still spotty, even in the densely populated areas it is targeted for.

But regardless of whether the iPhone’s upgrades were drastic or marginal, the early-adopter instinct to upgrade to the newest device every year no longer applies. There’s an abundance of powerful phones already out there now, and it’s tablets — not phones — that are really innovating.

Don't get me wrong. I'm not abandoning the iPhone, or any smartphone — at least not yet. But the early-adopter instinct to upgrade to the newest device every year no longer applies. With viable 7-inch tablets starting to appear, this marks the beginning of the end of the smartphone’s dominance over our hearts and minds. Join Discussion

As Apple’s Passbook hits the scene, Tello tries to end coupon envy

iPhone users get the closest thing Apple has made to a digital wallet on Wednesday with the release of iOS 6’s new Passbook app, which stores electronic coupons, loyalty cards and tickets.

But where will all those nifty new digital coupons come from?

For coffee shops, corner pizzerias and other small businesses that don’t have in-house engineers to create their own Passbook coupons, a new service launching Wednesday aims to make it easy.

PassTools is a Web-based service that lets businesses quickly create Passbook coupons with a few clicks. The service, which costs $99 a month for up to 1,000 Passbook coupons or tickets, is the latest product from Tello, a Silicon Valley start-up that has until now focused on an online customer-feedback service for businesses.

“This is just another tool in the arsenal for businesses to get feedback,” said Tello co-founder Joe Beninato, noting that coupons and reward cards can provide an ideal channel for businesses to solicit information on customer satisfaction.

Since Apple first discussed Passbook in June, Tello has raced to build the PassTools product, working closely with the iPhone maker, said Beninato. In the coming weeks,  Tello will release additional features aimed at larger businesses, such as airlines offering boarding passes, he said.

And with more than 2 million Passbook-enabled iPhone 5’s pre-ordered in the first 24 hours of availability, there will be no shortage of consumers checking their phones for coupons.

For coffee shops, corner pizzerias and other small businesses that don’t have in-house engineers to create their own Passbook coupons, a new service launching Wednesday aims to make it easy. Join Discussion

The new iPhone is a people’s evolution

Revolutions can be exciting, but sometimes evolution can be even more powerful. With the curtain drawn back today on what exactly the new iPhone will do (and will be called), Apple is entering a period of consolidating its lead. Its next trick is to outflank smartphone competitors as deftly as it has in the tablet wars.

The news on iPhone 5 Day began with some some telling iPad statistics: The tablet’s market share has grown from 62% to 68% year-over-year through June, despite strong (relatively speaking) competition from Amazon’s Kindle Fire. And the iPad accounts for a borderline inconceivable 91% of all web surfing with tablets.

Why did CEO Tim Cook drop these little tidbits before the main event? To force the audience, as only the great magicians can, to look “over there” at the shiny stats instead of “over here,” where the devices generating those stats aren’t much changed. And to telegraph his master plan.

All told the newest things about the iPhone 5 aren’t really new. It will sport a four-inch screen, catching up to the standard of most other top-end smartphones. It will access the world’s fastest 4G LTE data networks. The camera gets an upgrade. There will be three mics, the better to allow Siri to give you questionable advice. As I tweeted during the presentation: “Tall, thin, dark and handsome. What’s not to like?”

All fine and dandy, but not worth champagne sabering and a balloon drop.

But there’s the rub. Since Apple disrupted the smartphone business with the original iPhone five years ago, it has maintained a significant market share advantage. But it has also seen the competition mushroom and … flatter the company with imitation (sometimes illegally). Most smartphones look astonishingly like the iPhone, and nothing did before the iPhone.

Revolutions can be exciting, but sometimes evolution can be even more powerful. With the curtain drawn back today on what exactly the new iPhone will do, Apple is entering a period of consolidating its lead. Its next trick is to outflank smartphone competitors as deftly as it has in the tablet wars. Join Discussion

Amazon and the tablet market’s 7 / 10 split

Amazon is going where few have dared to tread, announcing a “full size” tablet that takes on Apple directly — and has the gall to be cheaper than the iPad. The tablet highway is littered with the remains of wannabe iPad killers from big hardware names — Motorola, Blackberry, Samsung. Even Google, whose Android software powers the Amazon tablets, didn’t bother to poke the Cupertino giant when it released its Nexus 7, choosing to make a tablet a smidge under two inches smaller than the iPad.

Amazon’s new large tablet, the 8.9-inch Fire HD, has a slightly smaller screen than the iPad’s 9.7 inches. But the entry-level price, announced today, is $300 — $200 less than the iPad equivalent, and only $100 more than the industry standard price for the new 7-inch interlopers, pioneered by Amazon.

Why bother overtly taking on Apple? Because Amazon can — and almost only Amazon can.

Apple is expected to sell 73 million iPads this year, about 61 percent of the global tablet market, Gartner Group estimates. There’s plenty of gold in them thar hills, even if you believe (as I do) that seven inches will become the dominant tablet size in the next year or so.

Amazon has pricing power that the Motorolas, BlackBerrys and Samsungs of the world don’t, accepting margins that Apple doesn’t (yet) have to contemplate. It’s convinced that the best way to mine the gold is by selling picks to the miners at a discount.

“How are these prices possible?” Bezos mused rhetorically near the end of a news conference announcing the new line of tablets. “We want to make money when people use our devices, not when they buy our devices.” (How things have changed. Remember that the original Kindle, released five years ago, was priced at $400, $100 more than the far-more-versatile Fire HD tablet announced today.)

Amazon's new large tablet has a slightly smaller screen than the iPad's 9.7 inches. But the entry-level price is $200 less and only $100 more than the industry standard price for the new 7-inch interlopers, pioneered by Amazon. Why bother overtly taking on Apple? Because Amazon can – and almost only Amazon can. Join Discussion

Will Twitter’s uncanny luck ever run out?

Editor’s note: This piece was originally published at PandoDaily.com. 

This past week I heard two rational arguments on the fate of Twitter from two smart investors.

One was an argument that it’ll likely fail in its bid to become a public company. The logic went like this: Facebook, Groupon and Zynga have proven the private markets are fundamentally horrible at valuing companies. In the early stages, that doesn’t particularly matter. But when you get into pre-IPO secondary shares being bought and sold, it does. Just ask the people who bought pre-IPO shares of all three of those companies.

Twitter – with its relative lack of a business – was always a more dubious growth bet than those other three, buoyed by the sheer strength of its product. And now, there’s just no way it’s worth anything close to the $8 billion it was valued at at the last round, this person argued. If Facebook, Groupon and Zynga have all had a greater than 50 percent haircut – Twitter can’t even dream of going public now.

This doesn’t mean Twitter is going under. The company has enough cash to grind it out, and it could always raise more money – albeit a larger valuation might prove a challenge until some of the questions around its business model are answered. But odds are, this person argued, in this new public market reality, with Twitter’s business still very much TBD, the company will sell for less than its last valuation to a Google or a Microsoft.

The other argument was for why Twitter is in a far better position than Facebook. This had to do less with its current revenues or valuations, and more with future prospects. Twitter’s ads – while nascent – just work better, this person argued. Twitter is a simpler product (or will be, now that it’s asserting more control over how users interact with it), and when inserted in a stream responsibly, people don’t tune their ads out the way they do on Facebook. Also, unlike Facebook, its audience transitioning from Web-to-mobile isn’t a problem for its business. Twitter has always been heavily mobile. Its ad products can work equally well on either.

The uncertainty over what to make of Twitter goes well beyond recent macro events. Twitter has long defied all startup reason. Join Discussion

Apple and the burden of being a behemoth

In the annals of meaningless milestones, Apple’s latest achievement — surpassing Microsoft, circa 1999, as the largest U.S. company ever — is right up there. I mean, how high is up? How big is BIG? What does Apple win, Johnny!?

But it did get me to thinking again about the lifespan of successful tech and Internet companies. There seems to be a trajectory that grants them life in the fast lane for 10 to 20 years before they are overtaken, made obsolete or dismissed as boring. The general public is a punishing grader that deifies promising, charismatic kids with hoodies and burn rates (at least for a while) but dismisses massive companies — like Microsoft, Oracle, Silicon Graphics and IBM — that print money and arguably control the world but aren’t sexy.

Microsoft is, of course, more IBM than Palm or even Sony on my spectrum. It was one of the original Harvard dropout startups and among the first of them to mint wealthy employees (called Microsoft Millionaires). And in December 1999, at the height of the dot-com boom, Microsoft became worth $616.34 billion — more than any U.S. company had ever been. (By one metric it still holds the record: Apple would have to reach a market cap of $842.5 billion, Microsoft’s inflation-adjusted market cap, to be the clear winner of this meaningless milestone sweepstakes.)

During the tech bubble of the late ’90s there were a lot of screwy valuations for companies that are now worth exactly nothing. Netscape was valued at $4.2 billion by AOL. Yahoo paid $5 billion for Broadcast.com. CMGI bought a search engine called AltaVista for $2.3 billion and scotched a deal to sell another, Lycos, for more than $100 a share. Terra then purchased Lycos for $12.5 billion.

Microsoft came by its valuation honestly. It powered virtually all of the computers in the world, and its Office suite was ubiquitous — and neither of these facts has changed. Microsoft hasn’t faded as much as its buzz has.

Can Apple avoid doing the same?

I think the answer is a qualified yes, for the opposite reason that Microsoft was fated to fade.

In the annals of meaningless milestones, Apple's latest achievement -- surpassing Microsoft, circa 1999, as the largest U.S. company ever -- is right up there. I mean, how high is up? How big is BIG? What does Apple win, Johnny!? Join Discussion

Stick a fork in it: Dell is done

Editor’s Note: This piece was originally published on PandoDaily.com. It is being republished with permission.

Sometimes when life gets too stressful, I try to remind myself that things could be rougher. Sure, I’ve got a raucous toddler and three deadlines in two days, but at least I’m not a coal miner. At least I don’t toil in a factory that renders pink slime. And best of all, at least I’m not running a large American personal computer company that has no conceivable way of combating an existential threat to its business.

I highly recommend this as a stress-reducing technique: However ugly your life gets, just try to put yourself in Michael Dell’s shoes. Imagine what that’s like. Picture yourself at the helm of a company that rakes in $60 billion in annual revenue — and then watch the money evaporating, floating away on a post-PC cloud. You built this company on the theory that computers were a forever-business, that the world would never fall out of love with the PC, and that you would be the guy to supply their fix.

The tragedy is that you were right: The world will never fall out of love with the PC. The PC is still riding high, the PC will be bigger than ever. What blindsided you is how the word “personal computer” would come to be redefined.

The PC is not the standalone, high-maintenance, low-end commodity device that it once was, the device that made you, Michael Dell, the king of computers. The PC is now a dozen different kinds of devices that are connected through one of two or three dominant platforms. The PC includes not just laptops and desktops but also big tablets, small tablets, and surely a coming wave of hybrid devices that function as several of these things at once. All these products favor the skills that Dell, as a commodity bottom-line chaser, has never had a chance to develop: An eye for design, a flair for user interfaces, seamless data management, excellent customer service, magical marketing, and the ability to present a coherent story about how the products can fit into people’s lives.

In a week and a half, Dell will announce its second-quarter earnings results. Expect a bloodbath. In the first quarter, back in May, Dell gave the market a goose egg — analysts had expected Dell’s revenue and earnings to fall from a year ago, but the company slumped way worse than people were guessing it would. Shares tanked, and they haven’t recovered. Analysts aren’t expecting anything stellar this time — Dell said its outlook was weak — but I suspect Dell could deliver another shock, presenting numbers that will begin to confirm a permanent downward trend.

It's all the iPad's fault. Join Discussion

Data shows thousands circumvented NBC Olympics coverage

At least one company benefited from Olympics fans in the United States who tried to circumvent NBC’s television coverage during the London Games. AnchorFree, the Mountain View, Calif.-based startup released data to Reuters on Monday showing a major bump in users who installed a product that gives U.S. users an anonymous IP address in the United Kingdom. Presumably the people who signed up for the product, called ExpatShield, used it to watch BBC’s online streams of the Olympics.

According to the data, the number of installs of the free software surged 1,153 percent in the United States during the games. The company, which recorded an average of 220 installs a day before the Olympics, saw the number of installs increase to 2,753 installs during the 17-day event.

Its daily number of users also quadrupled to 8,121 compared to 2,040 average users before the Olympics. The peak day was on July 31 when 10,105 users logged in to catch the  U.S. women take gold in the gymnastics team final while in swimming, South Africa’s Chad le Clos edged out Michael Phelps in the 200 meter butterfly.

While these aren’t massive numbers, it’s just one company that people turned to during the Olympics to find a workaround to NBC. Others said they used TunnelBear and StreamVia while some tech savvy people like Walnut Creek, California-resident Jason Legate devised their own methods.

AnchorFree’s best known product is Hotspot shield, which lets users in certain countries visit blocked U.S. websites by offering an anonymous American IP address. The company has caught the attention of Goldman Sachs, which led the company’s last funding round of $52 million.

At least one company benefited from Olympics fans in the United States trying to circumvent NBC's television coverage and heavy use of the tape delay during the London Games. AnchorFree, the Mountain View, Calif.-based startup released data to Reuters on Monday showing a a major bump in users who installed a product that gives U.S. users an anonymous IP address in the United Kingdom. Presumably the people who signed up for the product, called ExpatShield, used it to watch BBC's online streams of the Olympics. Join Discussion

HuffPost launches live streaming with live comments

The Huffington Post on Monday launched its latest foray into video with a twist: Live programs that are intended to get people to talk about the segment in real time.

HuffPost Live “airs” its programs in real time -- some examples include Mitt Romney’s veep choice of Paul Ryan and  how white supremacy groups are using music as a recruiting too — though the videos can be watched even after they have been shown live. It is streaming 12 hours of programming, five days a week from its  studios in AOL’s New York headquarters, Los Angeles and Washington D.C.

“When we starting thinking about this we wanted to make this the most social video experience possible,” said Roy Sekoff president and co-creator of HuffPost Live and founding editor of the Huffington Post. “People are about real time. They want to tweet about something as it is happening.

Sekoff said it took about 8 months to get the project off the ground after it was given the green light and has a staff of about 100 people working on it full time.

To show just how active visitors to the main Huffiington Post website are, the company said it attracts an average 2 million comments a week.

Cadillac and Verizon are the founding sponsors of HuffPost Live.

 (Image curtesty of Huffington Post)

The Huffington Post launched its latest foray into video with a twist: Live programs that are intended to get people to talk about the segment in real time. Join Discussion

Starbucks and Square want your phone to be your wallet

After years of fits and starts, the prospect of using your phone to make purchases instead of your credit and debit cards is entering a promising era. The struggle for who will control your virtual wallet is intensifying, and while it’s far from certain what will replace plastic, it’s almost certain something will, very soon.

This isn’t about a gimmicky new way to separate you from your money. It’s about replacing credit and debit cards, and all of their vulnerabilities, with your phone. That phone will be linked to those same cards (and bank accounts), potentially enabling you to pay as you go without toting around cards or cash, and even without taking anything out of your pocket.

Within this revolution, there are two different technologies hoping to become the default. This time, instead of Betamax and VHS, we have NFC (Near Field Communication) and GPS (the same kind you use to navigate a map).

NFC backers – and there are plenty of them – are pushing a technology that sends payment information using radio waves from one device to another. GPS’s contingent is led by Square, a startup founded by Twitter inventor Jack Dorsey, and uses the location-awareness functionality of smartphones to establish a connection between you and a vendor.

This week, Starbucks announced it was partnering with Square, the best evidence yet that GPS might have an edge over NFC. For Starbucks, a $25 million investment in Square is pocket change, but the deal also puts visionary CEO Howard Schultz on the startup’s board and “Pay with Square” in every Starbucks, (eventually) letting caffeine addicts pay for their latte fixes with little more than a smile.

GPS mobile payments are at the opposite end of the conceptual spectrum from NFC, and therein lies their power. NFC is specifically designed to work only over tiny distances – a few centimeters – the better to avoid mishaps that might occur if you were just walking past a terminal. But that means the consumer is invisible to the retailer until she’s paying for something. GPS, on the other hand, can alert consumers to nearby establishments’ special offers, and alert establishments when returning customers are on the premises. That creates untold opportunities to cultivate customers, not just take their money.

Mobile payments are coming, and Starbucks, partnering with Square, thinks it can take them mainstream with a technology that helps cultivate customers, not just take their money. Will they have an edge over Google's Wallet? In the end retailers, not customers, will decide. Join Discussion