The Professor's Notes

I caught in Twitter today a “retweet” from @MacsFuture where they said that the Nexus 1 isn’t selling well. There was a link to the full comment on posterous, where the author writes:

I wanted to tackle this for a minute.¹  I would have to agree that the NEXUS is not selling as well as, well, most other smart phones on the market right now, but on the other hand let’s balance the assessment by pointing out a couple things contained in the short post above.

1.  The forecast anticipates selling 1 million units by the end of 2010.   This is actually quite a  significant figure for a phone that really only works best (for now) with T-Mobile.

2.  The Nexus is only “sold directly by Google.”  In fact, let’s be more pointed with this: it’s only sold by Google, through an online purchase.  Imagine if the only way to get an iPhone was through the Apple Store site.  Would they still have sold millions? Yes, undoubtedly, but one cannot discount the tremendous boost Apple received by having their products in the hands of thousands of people nationwide, simultaneously.  Not to mention the tremendous press coverage of the “long lines waiting to get their hands on their first iPhone” that we saw in every news media market.

Now, a million units sold in 1 year is relatively trivial compared to the numbers of even the iPhone 1st generation phone.  That said, consider the deck that Google has elected to stack against itself.

T-Mobile is a good and worthy network, so I am told.  But more often than not, people talk about it as if it is the little sibling of the  ”big 3″ when people talk about their cell-carriers.  I think I can count on one hand (without resorting to binary)  the number of friends and colleagues that use T-Mobile.  Selling a million units for a phone that is, out of the box, tied to a company with http://en.wikipedia.org/wiki/T-Mobile_USA is “not too shabby.”  (This compares right now with AT&T having approximately 85 million wireless customers.)  Given the large numbers of people who are locked in to their existing contracts, I don’t see many people switching carriers, especially since they are not afforded the opportunity to “try before they buy.”  (See next point)

Additionally, the decision by Google to only sell the Nexus online, through their website, has to hamstring their sales.  I may like tech, but when it comes to dropping $500 or more on a phone (and/or getting a long term contract) I want to be able to touch it first, see how it feels and responds in my hands, and feel like I was an informed consumer when  I make  my decision.  I suspect I am not alone.  More than once I have driven past our local T-Mobile store thinking that, if only they had a Nexus in the store, I would stop and at least test the waters.  I suspect that, if I could go in to a T-Mobile and not only play with the phone a bit, but talk with them about the affordability of switching from AT&T to T-Mobile, I would make the switch.  And again, I suspect I am not alone.

Finally, early reports of lack-luster customer support by Google has most likely scared off a number of would-be consumers.  Take away the store front/salesperson access, and market your phone on a network that would require me to switch carriers, and I am going to want, nay expect, a rather significant online and “on phone” support structure.   Unfortunately, Google has grown a culture based around offering “free” and “Beta” services.  Expectations of support for “free” services are far lower than expectations when one spends a significant amount of cash.

And make no mistake–$500 is significant.

In the final (as of today) analysis, I would say that 1 million units sold is actually a remarkable number given that Google has left the confines of their “core competency” (which I will describe as creating free and innovative software-based experiences) and ventured in to the world of offering “for sale” hardware products.²  Additionally, they seem to be wanting to “play by the rules” of traditional retailing instead of breaking new ground in the cellphone industry (as was speculated prior to the offering of the Nexus).

What does the future really hold for the Nexus line?  It is now a waiting game, I suppose.  Imagine Google addressing even 1 of the issues above. An expansion to another network (such as a Verizon or AT&T) or even the opening of sales at T-Mobile stores could make a significant difference for the phone.  Or, perhaps they utimately will rewrite the rules for cell-phones, offering free phones to those that actively use Google services, extending the Ad Revenue model to a whole new domain.

Considering the mis-steps one can only conclude that the Nexus succeeds, despite itself.

Once again we can’t turn on a news reader on the internet without be reminded of the Great Steve (not me–Jobs) and how he always has the “right sense” for business.  In addition to his design sense, and ability to time the introduction of products perfectly, many often credit him with “saving” the music industry by making music affordable at just 99 cents per song.

But could he have lost his touch? Could Steve Jobs and Apple not only missed it this time, but could they be responsible for bringing down a whole nascent industry with them?

On the heels of the introduction of the Apple iPad (and their announcement that books would cost between $13 and $15) we saw an emboldened Macmillan publishing house pressing their case against Amazon.  For a brief moment Amazon seemed to be fighting the good fight for consumers, and went so far as to ban direct sales of Macmillan books.

Macmillan was simply “acting out” what Steve Jobs told to Walt Mossberg when he said that the prices would end up being the same (between Apple and Amazon), because the publishers are not happy (with Amazon) and are going to pull their books from there.  It appears that Steve Jobs is doing the work of the Publishers, pushing the price points up, rather than down.  Rather than being a champion of the individual, does this make Steve Jobs simply a big business “hack?”

The bottom line here really is that Amazon knew 2 years ago what Steve Jobs should know now. Verso Direct has conducted a book buyers behavioral study/survey, in which they discover that the magic price-point for digital books seems to be right at $9.99.  According to the article “Amazon Flanks…” when Verso presented their study and broke down their findings, they reported that 3 out of 5 people will consider buying an ebook at or below $9.99.  Raise the price, and that drops to 1 out of 5.

The article then goes on to identify the real “winners” as pirates.

Is it possible that, in his rush to kill Amazon, Steve Jobs may have instead spell the death of eBooks?¹

I have seen all the mock-ups, and the “leaked” images, and various speculations, and what strikes as interesting is how uncreative so many folks seem to be.  Digging back to my blog entry from March 2006 you will see an idea of what many thought (1 year in advance) a new, all glass, iPod Video would look like  Note they assumed the interface would just “virtualize” the wheel.

Jump forward nearly 4 years and many MegaDecibles of hype later, and you can see the lack of creativity still abounds.  Most prognosticators are predicting “a larger iPhone” with some of the images shown (purportedly “legitimate from inside sources”) showing exactly the same layout–to include a speaker where there is currently an ear piece.

Give me a break.  We won’t have to hold this up to our ears so why should Apple be captive to that design?

I see no reason for the device to look “like a larger iPhone” except in the broad brushes of Steve Job’s design Ken.  Remember, Jobs likes simplicity, and we were “told” after the release of the iPhone that he wasn’t happy with the concessions they had to make for the few buttons that exist on the iPhone.

What can we expect to see? (and check back in 16 hours for my Mea Culpa.)

• All Glass Front
• Touch Interface
• No buttons on the front
• In fact, no buttons.  Except power.
• Pencil thin
• limited physical connections, if any. Yup, no Firewire, no USB. Maybe not even an iPod connector. WiFi/3G only.
• Power connector? (can you say “no–inductive charging?”)

So, if the rumored names are true, expect exactly that-a slate.  A blank slate.

My thoughts? Apple will surprise us again.  And that should be no surprise.

(I am currently teaching a Service Operations Management course for our MBA program, and part of the requirements for the course is for students to blog weekly on service experiences they have had, and relate and assess that experience as it directly relates to the recent chapters covered in class.  In that spirit, I am offering some of my recent service experiences on my blog.)

My wife is an insulin dependent diabetic, and has been using the Medtronic “pump” for several years now.  In addition, she has the “continuous glucose monitoring” (CGM) sensors, that talk with the pump, and allow her to get information far more quickly about changes in her glucose levels.  ¹

As part of that treatment regimen she has to order supplies on a regular basis.  Of course, these supplies are only available from the manufacturer.   Our insurance company picks up the tab for much of the supply cost, and as part of the typical healthcare regimen, we pay our portion of the bill as well.  I typically call  Medtronic, or at least their billing contractor, and make the payment over the phone with a credit card.

In December I called, and quickly dispatched with the task, paying the balance owed on the bill, and writing down the confirmation number.  Then, in January, we received another bill, for the next set of supplies received, and I called back.  This time, they told me I owed for the new supplies, and that I still owed the (now late) payment for the prior supplies.

Here is where things could have gone terribly wrong, with accusations, recriminations, and the like being passed back and forth.  But instead, things went terribly RIGHT. (um… is that possible?)

I dug around, and found my copy of the previous bill, with the confirmation number written on there (in traditional, Air Force “Memo for Record” fashion.  Old habits die hard.)  I read the customer service representative the number, and she looked it up.  And then she gasped! “I was the person who took the payment!”

She immediately sprang into action, verifying that they had, indeed, taken my call on that day, and that I had indeed paid my bill.  She went to her supervisor whom I was told was “as we speak” taking the paperwork to the accounting office to straighten them out.  We then proceeded to take care of the rest of the business, and process the payment for the balance owed.

At the end of the call, I asked if she wouldn’t mind sharing her name with me, just in case I had any other issues.  She was very gracious and agreed to that.

So, Esther, thank you for your gracious and attentive support to your customers.  It is very appreciated!

The attentive reader of Kindle News knows that the Kindle (much like the Apple Mac) seems to imply hardware, or software, or both.  By this I mean we first heard about the Kindle as the digital ebook reader now known as the Kindle 1 (and then the Kindle 2 and Kindle DX)  Then Amazon announced the Kindle app for the iPhone, separating the Kindle reading experience from the Kindle hardware device.  That was recently followed by the release of the Kindle reader software for Windows PCs.  A Mac version is coming soon.

Jeff Bezos, CEO of Amazon, said essentially that the reading of Kindle books, and the hardware that we know as the Kindle are separate businesses.  In that article Bezos specifically described the competitive environment inside the Kindle world:

The device team has the job of making the most remarkable purpose-built reading device in the world,” Mr. Bezos said. “We are going to give the device team competition. We will make Kindle books, at the same $9.99 price points, available on the iPhone, and other mobile devices and other computing devices.

Jeff Bezos saw the need to create a competitive environment inside Amazon for the Kindle device design team.  As we all know, there are now more outside competitors, with the Barnes and Noble Nook making a strong run towards toppling the Kindle as the preferred eReader.  Many have called it “Kindle killing,” or a Kindle incinerator (cute play on words there) and suggest Nook will “eat Kindle’s lunch.”  All strong words, and so far most of the reviews seem to indicate the Nook lives up to the hype.

One interesting feature of the Nook is that it runs on the Google Android platform.  So what, you might ask?  Good question. Read the rest of this entry »

Amazon has announced a firmware update for the Kindle 2 and the Kindle DX that enhances battery life, provides native PDF support for the Kindle 2, and improves the PDF support of the DX.  You can read more about it from Amazon directly here.

The biggest downside?  That this doesn’t help the Kindle 1 owners at all.  Needless to say, those of us that weren’t convinced that the few features added to the Kindle 2 were worth the full purchase price for the upgrade are not too pleased with the lack of support (read the comments in the above link.)

On the other hand, perhaps this is a good reason to consider the Barnes and Noble Nook (if they can keep them in stock.)

The New York Times has the story, Broadband Now! So Why Don’t Some Use It? where they ask the question “Why not?”

So for those that have been listening to our podcast Real Tech for Real People, we have talked quite a bit about the numbers of people that don’t have high speed (broadband) internet access.  We have been reporting the numbers we had previously read that had anywhere from 40-45% of the population does not have access.

Okay, I am confused. FCC says 96% of households have, or have access to, broadband.

“No less than 96 percent of households either subscribe to or have access to broadband service, according to an F.C.C. task force, which presented a status report to the commission last month.” (see commission report here)

The article reports that the task force goes on to report that:

• median speed is 3 megabit/second ¹
• 1/3 of households “choose” to not subscribe Read the rest of this entry »

This week I am attending  the 2009 INFORMS “Annual Meeting.”  This is more of a Symposium, or a Conference, than a “meeting” with nearly 70 sessions occurring simultaneously, 4 times a day for 4 days.  That is 1, 120 sessions and each has 3 (or more) presentations! 3,360 presentations! Whew!

Now, I won’t make any bones about it–I am not attending all of them.  Heck, I am trying my best to attend the few that I think I can get the most from for either Supply Chain discussions, or (yes, surprise) Social Networking analysis.

Why Social Networking? Setting aside for the moment that I think it is simply “cool” I am also quite interested in what we can collectively learn from these networks.  But apparently my interest is not the same as the interest of those Read the rest of this entry »

In researching stories for our upcoming “Real Tech for Real People” podcast, I came across this story in the Washington post about efforts to outlaw texting while driving.  There were many things that I thought were “interesting” in the article (such as by allowing someone to claim they were dialing a phone legislators have some how “weasel’d out” of their responsibility. Hmmm… )

What ultimately caught my eye, though was the argument, buried deep in the article, that for such a pervasive and deadly action to be occurring  so frequently (the article reports “at any given moment the drivers of 812,000 cars are in mid-conversation on the nation’s highways”) we are not seeing a comparable increase in accidents/deaths.

What Does It Take to Get Texting Off Roads? (Wash Post)

“Given those findings and vast cellphone use, the experts are puzzled by the fact that overall crash rates haven’t increased dramatically, too. Without statistics to show that, persuading drivers — and legislators — not to use cellphones becomes more problematic, even considering the current impact.

“If it’s not causing additional crashes, then banning it isn’t going to reduce crashes,” Lund said. “The risk of talking on a cellphone is real, but it’s entirely possible that it’s replacing some other risky behavior.”"

I am not seeking to defend (or condemn) texting while driving in this blog post.  I am, however, wondering when we are going to see the return to objective analysis of data.  Wasn’t that what the new Administration was going to bring?  A removal of political motivations from science, and a return to objectivity?

Just a thought.

Want to hear my thoughts more fully on this, and other tech topics that “Real People” have to deal with?  Come listen, as Tony Pittman and I discuss Real Tech for Real People–a weekly podcast talking about tech where we all live.  (Don’t have iTunes?  Go listen at Tony’s site: Get The Next___)

I have entered into a new podcasting venture with Tony Pittman (@TonyPittman).  We have decided to start talking about tech from the perspective of real people, outside the “tech bubble” of Silicon Valley.  Our goal with our podcast is to talk with regular users, and focus on regular technology.

Listen, join in, and let us know how you use technology, and what you would like us to talk about each week.  We are already lining up guest speakers, so tell us who you want to hear!

If the other link doesn’t work, listen here

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