Thursday, August 25, 2011

HP's Consumer, Smartphone, and Tablet Businesses Exit Stage Left

In a dramatic move last week, HP announced it is exiting the smartphone and tablet business and putting its personal computer division up for sale, thereby making the business market  HP's core focus.  In many ways this move was inevitable (as IBM successfully demonstrated when it made this transition back in 2004)-  HP's PC division generated the highest revenue, but the lowest profit margin;  the smartphone and tablet business was under tremendous pressure from Apple and Google and it was unlikely that it would catch up or even lead the market in the foreseeable future.  Since HP is the largest tech company by revenue, this transition has broader implications for the tech industry:  Does this mean that tech companies can be too big to compete on multiple fronts?  Is the PC market destined to end up as a low cost commodity?  Is the business market still profitable?  Can a tech company successfully compete in the consumer and business spaces simultaneously?

The bigger issue surrounding HP's transition is the role of acquisitions for tech companies.  HP spent the first decade of this century buying tech businesses at an alarming pace.  The most notable was its acquisition of Compaq Computer, catapulting HP to the top of the PC market.  More recently it purchased Palm and IT consultancy EDS.  One has to wonder if all these purchases were worth the cost, and whether a tech company can build a solid foundation simply with acquisitions, an issue Microsoft has been struggling with lately (Oracle are you paying attention?).  It is too early to tell, but the size and shape of the long-lasting, self-sustaining tech company is still being defined.

Read the article.

Steve Jobs Has Left the Building

Yes the news is true, Steve Jobs is finally stepping down as CEO of Apple. This move has been the subject of speculation for a couple of years now, particularly after Jobs's kidney transplant in 2009 and leave of absence this year.  While Jobs will remain involved as chairman of Apple's board, he is turning over his CEO title to Apple's COO Tim Cook.  Jobs is credited with one of the most successful business transformations ever, taking over the reigns of a failing company in 1997 and turning it into a market dominating juggernaut by 2011 (surpassing Google as the most valuable brand).  His influence and importance to the company cannot be understated.  Apple's stock dropped 5% in after-hours trading on the day of the announcement.  The real question is - can Apple create game changing technology (like the iPad, iPhone, App Store, etc...) without Jobs?

This story leads to a related question-  as tech companies mature, what happens to these innovative companies when their founders leave?  Microsoft has been seemingly rudderless in the post-Gates era.  Can tech companies like Oracle, Salesforce.com, or even Facebook thrive without the influence of their charismatic (or vilified) founders?  Most of these companies were created less than 30 years ago, so charting their trajectory compared to other long-established industries has been hard, but this is certainly a trend to watch.

Read the article.

iPad: Flying the Friendly Skies

The U.S. FAA has given approval for pilots to replace their 40 lb. (18 kg) paper flight manuals with iPads.  The benefits of this are obvious: a richer interface, faster access to information, and easy to updates to changing information.  Other benefits include reduced health-care costs by avoiding injuries resulting from lifting/maneuvering these manuals in tight places, as well as the environmental advantages of paperless e-publishing.  Not only will thousands of trees be saved from needlessly printing 16 million pages, but an estimated 326,000 gallons of jet fuel will be saved as well (statistics here).  That adds up to millions of dollars saved.  The only surprise about this article is, what took so long???

Read the article.

(submitted by Bharath)

The Rise of the Smartphone, The Fall of Nokia

Non-business related smartphones are on the rise and are expected to capture 28% of the 2011 mobile phone market. This trend is spurred predominantly by the popularity of smartphone Apps, and benefits manufacturers Samsung and Apple, who make some of the most successful smartphones on the market.  At the same time, this trend is rapidly eroding the demand for a basic cell phone market, Nokia's bread and butter.  Nokia is estimated to lose 16% of its market share this year alone.  Will there be a viable product offering between the basic cell phone and the smartphone, and is there even a market for such a product?

Read the article.

(Submitted by Atiyah)

Web 3.0...You've Got To Be Kidding

Are we done with Web 2.0 and ready for Web 3.0?  Well...Web 2.0 was a tired and overused term back in 2008.  The blog article below argues that the social media revolution has led to a new paradigm in how users interact with each other and the web, termed "the social web."  In other words, users are not searching the Internet (i.e. "Googling") as much as they are engaging with their friends, family, and followers through social networking sites to find the information they are looking for.  There is little doubt the web has shifted and social networking is at the core of this change, but do we really have to call it Web 3.0?

Read the article.

(submitted by Judi)