McGuire’s Law

In March of this year, Microsoft formally announced a new class of computing device, the Ultra Mobile Personal Computer (UMPC). The formal announcement followed weeks of intense buzz marketing using the product’s “secret” code name of Origami.

Partly due to the buzz; partly due to the players involved (Intel was also a major participant in the launch); partly due to the value attributed to mobility, this became a huge news story for a few weeks.

And then folks figured out that the UMPC wasn’t nearly as revolutionary as everyone had hoped.

In fact, early skepticism seemed to be quickly validated. Folks hoped for a price point near $500. The early products were around twice that. Folks hoped to quickly get their hands on the devices. Initial shipments were delayed by months and then had logistics and quality challenges. Folks expected reasonable battery life, but instead could only squeeze an hour or two of use out of them.

Bottom line, by late in the year, folks (even Intel) seemed to agree that the UMPC products originally introduced to the market weren’t quite up to what folks really wanted. In short, let’s just say that sales haven’t been nearly up to expectations.

So, the UMPC was a “big news” story for 2006 that ended up being a “no news” story for the year.

But, what will it take for the UMPC to become a big news story in 2007?

Well, if we think about it, the UMPC obviously falls between a laptop (or tablet) computer and a Windows Mobile device. For the UMPC to be a hit, it will need to combine the computing power of the laptop with the mobility power of the Pocket PC.

What does that look like?

A laptop (or tablet) has more computing power than a mobile device because:

• It runs “real” Windows and supports the seemingly infinite array of Windows-based apps.
• It is very usable, with reasonable input, meaningful screen real estate for output, and a big enough screen to comfortably read.
• Our price/performance expectations have been effectively managed by manufacturers.

A Windows Mobile device has more mobility power than a laptop because:

• It’s small enough to conveniently take with you everywhere (high availability).
• It’s likely that you’ll want to use it anywhere, anytime, so you DO take it with you. (Unlike, for example, your digital camera.)
• Mobile devices are always connected, so their value is multiplied by what’s available across the network.
• They are becoming increasingly aware of their context (location, proximity, presence, network strength, relevant data such as traffic and weather, etc.) enabling their value to increase exponentially as the context drives increased relevance to where I am, what I’m doing, who I’m with, what situation I’m in, etc.
• Battery life lasts for hours of use and days of non-use standby.
• Pricing is generally less than $500, making a mobile device an affordable investment.

Will anyone be able to bring a UMPC product to market in the $500 range, with long battery life, the power of “real” Windows (XP or Vista), usability, portability, ubiquitous network connectivity, and contextual relevance?

I sure hope so!

As the year draws to a close, rumors once again abound of Apple bringing an iPhone to market. The latest guesstimates are that the phone will be launched in the first half of 2007.

For a device that’s been rumored for years, and that, at best, is still months away, the iPhone sure makes for “big news.” Typing “iPhone” into Google News results in 894 matches, and that’s just in the last month! Of course, Apple is super secretive about product launches, so there’s no indication out of Cupertino of any real plans.

The iPhone clearly qualifies as a “big news” story for 2006, and since it’s still just rumor, it also qualifies as “no news” for 2006. The question is, will this be “real news” in 2007?

Even if Apple introduces the iPhone (and that’s a big “if”), this isn’t an easy question to answer. Apple worked with Motorola to introduce the ROKR phone way back in 2005 (and even then it was 13 months between announcement and availability). I’m sure that both Motorola and Cingular (the first carrier to offer the phone) had high hopes for the device. I’m not sure Apple really even cared.

In the end, the product was a flop. Why? I think there are three main reasons.

• First, the phone synchronized with iTunes, but only over a tethered connection. In other words, the product didn’t gain any value as would be predicted by the Law of Mobility.
• Second, the phone had limited storage (only holding about 100 songs) and, compared to the iPod, limited battery life. So, the product was actually less valuable than any of the “real” iPod products.
• Finally, the phone was a Motorola product, not an Apple product.

What do I mean by that third bullet? Well, basically the ROKR was designed by a phone company and was about as usable as any feature-rich handset (in other words, not very).

This key point will determine how valuable any iPhone may be. If Apple can successfully bring the value of their usability leadership into the handset space, they will create new, untapped value in a new industry. Good for Apple and good for cellphone customers. But, if Apple can do that AND fully leverage the Law of Mobility to amplify the value of the iPod, then we’ll be looking at a revolutionary product that is helping push forward the mobility revolution.

That’s a lot of “if”s – starting with the biggest one of all – “if” Apple brings an iPhone to market.

And all those “if”s may be closely related. Apple has an incredibly valuable franchise in the iPod. The company has little motivation to either devalue the product line (through carrier subsidization models) or burden the iPod with the heavy technology and performance costs associated with building in a wireless phone. Even more critically, the huge impact of the iPod has come from it’s usability. Apple is highly unlikely to compromise that usability to accomodate the overwhelming plethora of features required by the industry for mobile devices. Finally, and perhaps most tellingly, Apple still defines itself around the personal computer. The iPod is a strategically appropriate product for Apple because it fits into Apple’s vision of the personal computer as the central hub for how people live and play. Essential to that fit is the tight integration between iTunes and the iPod, which of course, further contributes to the iPod’s usability.

Apple is not driven by the Mobility Revolution. The success of the iPod and iTunes is only marginally associated to the Internet Revolution (the iTunes store isn’t a bad revenue source…). The iPod is really all about the PC Revolution that Apple launched more than a quarter of a century ago and which still defines the company.

Is Apple willing to commoditize their economic engine? I don’t think so. Will the company compromise usability to integrate cellphone features into the iPod? I can’t imagine them doing so. Even if they overcome those two barriers and bring an iPhone to market, will they really rally around the real value of mobility by breaking the tether between mobile device and PC? Call me a party pooper if you like, but that hasn’t happened in 27 years, I can’t see 2007 being any different.

Check back a year from now as I run-down the top 10 stories of 2007 and find out whether I was right or wrong!

There was a lot of discussion this year about the 802.20 standards, making it a big story for 2006.  Unfortunately, there still aren’t any standards.  As I discussed in June, the main reason is politics.

This is a classic case of “Big Bell Dogma,” where one party, which is threatened by advances in mobility, actively works to slow the adoption of the technologies that are threatening. 

It would appear that, for years, the 802.20 standards were slowed by Qualcomm, who likely felt threatened by the leading candidate technologies from a startup called Flarion.  Well, eventually Qualcomm acquired Flarion and aggressively started pushing the standards forward based on Flarion/Qualcomm intellectual property.

However, it would appear that Intel feels threatened by 802.20 standardization progress.  Intel, a key proponent of WiMax technologies based on the 802.16 family of standards, complained (perhaps accurately) that Qualcomm had gained too much influence over the 802.20 standards body.  Perhaps Intel’s desire was to slow the standardization to enable Intel’s technologies to gain market traction.

The net result, the IEEE decided that it was time to completely restructure the 802.20 standards group and effectively start over.  In short, another year lost in terms of progress on this potentially powerful mobility standard.

Starting this week, we’ll begin a countdown of the ten biggest news stories of 2006 that relate to the mobility revolution.

Stories 6 – 10 in the list will be five stories that got lots of attention (i.e. they were “big news”) but that really don’t represent significant progress in the revolution.  The top five stories represent significant milestones, pushing the revolution forward.

Look for three stories a week for the next three weeks, with the #1 biggest mobility story of the year featured New Years Eve weekend.

Stay tuned!