Posted by: crudbasher | August 29, 2011

Apple, HP, and Apple

In the last week there have been a whole bunch of tech stories that can impact Education. Here is some of my analysis.

Item #1. Steve Jobs Resigns

Steven Paul Jobs

It’s fascinating to watch the impact of Steve Job’s resignation has on the rest of the tech world. I think they are a bit intimidated by him because he is this larger than life figure. If you watch one of his famous media events, he is the consummate sales man. At the end of the show you can see the audience is desperate to buy whatever he is selling. They will even pay a premium just to have a device made my Apple. This is called the “Apple Tax“. Other tech CEOs dream of having that much charisma.

So what now? Like a child who fears a bully, the rest of the companies can now dare to innovate again. They knew that every product they came out with in the past 10 years was going to be compared to Apple. Now that changes. The magic is going with Job’s departure. Now Apple is just another tech company.

Interestingly, the new CEO Tim Cook, said he wasn’t going to change a thing. On the surface that sounds like a good idea, but does that mean they won’t innovate anymore? Will they second guess every decision with WWSJD? (What Would Steve Jobs Do)

I predict that Apple will be just fine for the next two years but their lock on the hearts and minds of the tech elite is over.

Item #2 HP Commits Suicide

I’m writing this post on a brand new HP workstation. It’s very tasty and fast.  Despite that, HP has announced they are getting out of the hardware business completely. On one hand I can understand that. Unless you are Apple and can charge the Apple Tax, PCs are a very low margin product. Even so, they were selling a ton of them! Why HP would choose to jettison a money making business is beyond me.

They tried to release their own tablet a month ago to compete with the iPad. After a few weeks of disappointing sales they pulled it from the shelves and killed the product. All that R&D down the tubes. Ugh.

So what is the new HP going to do? Software. They will be focusing on software solutions like Oracle and SAP is already doing. That’s the problem right there. They are leaving a market they are doing well in and entering a new market with existing players. Good luck with that.

So here is where it gets interesting. If you graph out the margin on hardware over time, it eventually drops to just about zero. By 2020 we will have have computers that are so much faster and much, much cheaper than what we have now. By 2025, computers will be built into everything, even clothing. You won’t think about what kind of computer you are using because it won’t matter anymore. We will live surrounded by a computation substrate. We will be able to use whatever computers are around us. Our online lives will live in the cloud. Once that happens, the computer becomes a dumb terminal into the cloud.

So HP is probably doing the right thing, but at the wrong time.

Item #3 Rumor that the iPhone 5 will run on any cell network

I remember when the first cell phones came out. I would read about the latest technology and then when I actually got it, half the features were either crippled or disabled by the carrier. For example, my current Verizon phone (not a smart phone) allows me to transfer an mp3 onto it via Bluetooth from my computer. However, you can’t use it as a ringtone. Why? Because Verizon wants you to buy it from them. This is not a technology issues, it’s a business issue.

Now I don’t have a problem with this. It’s irritating but it’s not a deal breaker for me. The other big trick cell companies do is to have exclusive phones. For a long time, the iPhone was only on AT&T. Now it’s on Verizon but the next step for Apple is to spread to other carriers and get their numbers up. Remember, the iPhone is different. Buying the phone is one thing, but buying apps is a different income stream that the carriers don’t really see. Apple was able to change the game a bit. Now they might be changing it a bit more.

The rumor is that the newest iPhone might have a radio that allows it to use any cell network. This means that you could buy the phone from say Verizon, then if you were unhappy with them you could switch to AT&T and didn’t have to buy a new phone.  This is huge. It means that there will be direct head to head competition between the carriers finally.

What I really want to see if to be able to choose between carriers on the fly. If I travel to a city where my cell provider has poor service, I want to change to a better one. I want to get specials from the providers offering deals. You know, like in a real free market.

This could be the start of something that would upset the whole market. Of course the cell companies won’t go down quietly so this isn’t a done deal. Still, I think smart phones will be common in classrooms soon. It would be nice if they were fully functional, instead of crippled.


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