The great idea that Capitalism will kill in the cradle

Build-a-Phone






















I mean obviously it is appealing, PCs are very similar to this in a respect. I personally would love it if this were the case. However, I can't see this happening for three reasons.

1) The phone OEMs (Samsung, HTC, RIM, Microsoft via Nokia, and most of all APPLE) will never let this happen in the way Dave Hakkens imagine it. This disintermediates them because component manufactures like Qualcom and others enter into very detailed and binding contracts with the above OEMs. Some of these contracts limit who the component manufactures do business with; exclusivity clauses if you will. Just like the iPhone was an AT&T exclusive for several years. If any of the major component manufactures indicate that they might bypass the OEMs and release one of their top of the line processors or sensors directly to customers in a form that is compatible with this lego style phone, the OEMs would retaliate. They would threaten to ditch them as suppliers. Since the OEMs have all of the marketing power and carrier deals this could be a death sentence for their main business. Which leads me to reason two.

2) The one component that makes or breaks this idea is the 3G/4G radio. A stand alone plug and play radio would have to get blessed by the carriers that it plans to connect to. Due to the lack of common carriage laws in the US there is no regulation that says any carrier has to allow a device on to there network. So since this will not only bypass the OEMs, but also the carrier's handset retail business (which is just as lucrative as their service business if not more so), no carrier will approve a modular radio to connect to its network.

The result of these first 2 will relegate these modular devices to wi-fi only handsets with medium to low quality parts from small component manufactures. This may find a place with niche consumers, but will never come close to replacing anyone's main smartphone. It would be a companion device at best and therefore likely never get made. Now you might see a form of this but only in a form that doesn't threaten any of the established players. I could see Samsung releasing a line of modules that will work together, the catch will only Samsung parts will work together. The component manufactures would still ship the raw components to the OEMs, and then they would add encase it in the swappable module. This would allow you to upgrade your Samsung branded processor with another Samsung branded processor. If you wanted to use parts from say HTC if they started doing the same thing, you'd have to start over and get all HTC parts thus defeating the purpose.

3) Getting past 1 and 2 are not impossible but will require significant regulation reform in the US to prevent these types of exclusivity contracts and require wireless carriers to act as common carriers with mandated connection requirements. When/if this happens it will be years from now, in addition to make all the modules work well together, someone (The FCC maybe?) would have to put out strict interoperability protocols and then enforce them. Each component would have to have it's own FCC filing which will increase the cost of going to market with new components. This is all possible, but the time to get it in place is staggering, and my prediction is if/when it is, smartphones will no longer be the main computing paradigm. These components are getting very small very fast, and wearables/implantables are right around the corner. So unless you want to assemble the component modules of your smart contact lens with a microscope, the smartphone is likely the last chance for modular computing in the macro sense and due to the lack of regulation on US capitalism it will never reach its full potential.

Driverless Cars...

RE:Google's Trillion-Dollar Driverless Car -- Part 2: The Ripple Effects

In part 2 of Chunka Mui's series on how the driverless car will shape society he expounds on how many business models will be disrupted in the near future by the technology. While he also predicts some opportunities that will emerge, reading the first 2/3 of the article left me deeply concerned.

While i have considered many of the implications of an economy of driverless cars in the past, Mui's assembly is a much bigger and more far reaching set. I agree with most all of the claims but what has me concerned is not "what" will happen but how arduous the transition will be. If the past 100 years and even the next 5-10 years of disruption in the information system economy is any barometer, the industries that stand to loose in Mui's predicted disruptions will look to block the transition in every way they can. Instead of looking to capitalize on the opportunities this new and revolutionary technology presents, they will lobby heavily against laws that will allow driverless cars to do more.

There have been laws past so far allowing driverless cars in some states. I believe that this will become a harder battle in other states as the implications that Mui has outlined become more and more real. There will likely become a huge argument over who is to blame when a car that is driving its self is responsible for an accident. Just because i hasn't happened doesn't mean it won't. This responsibilty question is almost trivial in that the frequency of this happening will be in the six sigma range, but the fact that it can happen will be fuel for the opposing argument, especially from insurance companies.

To build on the that thought, the implications of having a vehicle drive it's self has significant implications when you apply it to shipping. If large trucks could be automated, why have a driver in the truck at all? This adds one more group that stands to loose, truck drivers. The labor unions will lobby heavily to make it illegal to operate a vehicle without a capable driver in the vehicle. If states go different ways on this matter i can image trucks going stopping at state borders just to pick up a driver so as to operate legally in the next state. How do you enforce this? What happens when a vehicle get's pulled over and there is no person in it? I can see the trucking company getting fined and having to send out a driver to move it. All to satisfy a law that was put in place to keep a dying profession alive. Small indications of this are already starting to crop up in the case of NYC banning Uber to keep the taxi's in business.

Another thought I've had relates to the transition and the interaction between automated and non-automated vehicles. How long will they be allowed to co-exist on the same road. The benefits Mui highlights about lighting and road construction are great but only apply if "ALL" the traffic is automated. The answer is certain roads will have to become "driverless only" roads. The opposition will argue against tax dollars being put toward infrastructure that can't be used by all. This is a ridiculousness argument but it will be made by a subset of the population that will refuse to use driverless cars. There is still a subset of the population that even refuses to use cars.

To be clear I want driverless cars right now. I don't ever want to drive a car ever again. The benefits Mui has presented so far are real and can change so much. I am just very concerned about how we are going to get there. The linear thinking that has been so pervasive in industry as of recent does not lend it's self to such step changes in technology. The industries that will be threatened by the commercialization of driverless cars have a lot of money and a lot of friends in government. I don't think they have really seen the writing on the wall but they will and when they do, things will come to a screeching halt.

Aereo case is huge turning point

Latest on Aereo Case

Very soon a decision will be handed down that will decide the fate of television as you know it. Although Barry Diller and his co-horts at aereo won't admit it, the company is more about forcing change than making money. As you'll read at the end of Greg's article; the opposition to Aereo is claiming that if left alone Aereo's service will kill "free" television. This is the most misleading statement ever. What he really should say is that it will kill cable television. If aereo can deliver the same content as cable without paying for it the business model of cable collapses. The cable companies will loose subscribers in droves as aereo expands to other markets and won't be able to pay as much for content from the providers (CBS, ABC, NBC...). To preserve revenue these content providers will have to do what the cable companies have been holding them back from doing; sell there content directly to consumers over the internet. Advertisers will follow the content providers and some of the biggest advertising cash cows in television (reality shows, American idol and pro sports) will be free but instead live streamed from FOX or NBC directly. This outcome is what the cable companies fear since it is a future where they are reduced to mere conduits for data. This future is nothing if but a huge win for consumers in that all the possibilities of TV will become available to anyone with an internet connection. Consumers will then get to select what connect to pay for and what to watch with adds. The first wall that will break is HBO. They are poised to do it today with their HBOGO service.

 The aereo court case is about way more than a round about way to not pay for cable. It's is a landmark decision that has the potential to usher in a new era of content delivery that is long overdue. It's the "boss stage" of a game that has taken almost 2 decades to beat. It started with the music industry and mp3s (music stores died off in the process). More recently the same happened to books with the kindle (books stores died). If aereo is allowed to continue to operate it will mark the start of the grand finale. In the end aereo won't last either way. If cable collapses and the content producers make their content available online it will render aereo unnecessary. However, letting it persist now will have the most profound and necessary effect on the industry since broadcasting was conceived.

Verizon, T-Mobile and AT&T invest $100 Million in Isis; prepare mobile payment battle with Google

Verizon, T-Mobile and AT&T invest $100 Million in Isis; prepare mobile payment battle with Google

So this headline would have you thinking that Google is the Behemoth and these guys are just trying to keep up, but that couldn't be further from the fact. In reality Isis is nothing more than a cow on the tracks that has been put there by these wireless and credit card companies as a form of collusion.

Wireless payments are not a priority for the wireless and credit card companies. The last line of the article says it all "ISIS has not yet announced a national rollout plan" and if if weren't for Google why would they ever. The wireless companies are not merchants accounts. They have no history making money off point of sale transactions so this is extremely new territory for them. The credit card companies are scared about disintermediation of the all of the merchant account companies (hanger-ons) that have gotten rich off of playing middle man every time a card gets swiped. Square has shaken things up and merchant fees have gone up because these companies are hearing the death bell and are scared. The best thing for all of these companies to do is to stop mobile payments dead it it's tracks until they find a way to make sure all of the intermediate companies get paid; Enter ISIS.

Google has already demonstrated that mobile payments in action with the Google Wallet, hell Japan has been doing it for years. So why is ISIS trailing so far behind with out any goals or ambitions? Because they have the weight of most credit card companies and wireless companies saying "we aren't sure this is good for us right now" so they all make a deal to sit on their hands and call this anti-competitive deal ISIS. The ISIS website is ironically deceptive because it displays exactly what it's supporters don't want right now, a mobile payment system.

So why do they need ISIS? If they didn't have this deal, then any one of the players could be lured to join the Google bandwagon which would drive up competition. Mobile payments would hit the street sooner than later and threaten the established payment system. By keeping all of the biggest players in credit cards and wireless in a deal to do nothing, they all can feel safe doing business as usual.

I should have been born like 2 years ago.

A Perfect Example of the Law of Accelerating Returns

For the longest time i have walked past these adds at the grocery stores that are on back list scrolls behind glass. If you don't pay them much attention they look like LCD screens but up close it's just paper behind glass. Ever 30 seconds or so the scrolls rotate and a new add replaces takes the frame. I always thought "How restrictive? if they want to change the adds they have to take the damn thing apart and put a new scroll in there. The possibilities of such adds are so limiting. It saddened me to know that the the grocery store had invested in this old medium instead of just waiting. Well today i was extremely relieved...

The slight of this was fantastic. This is a sign that LCDs have gotten so cheap that the obvious benefits of having a dynamic remote controllable screen are enough to justify the costs. Now if they want they could simply flash a store specific add for a sale item like fish or blueberries in between the paid adds for branded products. The grocery store is like a garden of eden for tech innovation. I'll go ahead and say in 5 years this LCD TV will be replaced with a static symbol. At first this would appear to be a step backwards but in actuality this symbol will be an anchor for an AR (Augmented reality) add that will only show up in people's glasses and contact lens. In fact the add will be different for each viewer. Personal buying habits based on customer loyalty program data. Today's display is just another glaring reminder that i was born way to early.

MS Office is a problem

Microsoft word and excel are becoming serious problems. They are like drugs almost in that people in professions all over the world couldn't function without them. The same could be said about electricity so what is my point? My point is both of the programs put handicaps on productivity potential. Writing and data analysis aside the programs have been integrated into businesses to act as information carriers in the form of forms them selves.

Everyone has probably filled out a form that exists as a Microsoft word or excel file. Applications, interdepartmental requisitions, background check forms... the list of forms that are filled out in MS word or excel on a daily basis is staggering. Now i'll admit this is better than having to hunt down a paper form like 20 years ago but this is still a dead end. These forms are essentially a way to move information (data) from one entity to another, it's great that the conveyance is paperless but they require a person on both ends. Addresses, social security numbers, dates, names, all of this data on these office file forms are essentially trapped in the form unless a person looks at it. Now this information likely started in a data base, was looked up by the person filling out the form, emailed in the form, read by a person on the other end and then entered into another database. There have been standards out for years now that take both of the people out of this process. It is called extensible markup language (xml), it is a scripting language that requires that the form be defined once as a schema or DTD and then any simple web software (such as java script) can be programmed to pulled data from a data base and create an xml file automatically. If both the sending and receiving entities have access to the schema then they can ensure that there software can write or parse the xml file flawlessly with no human intervention. Even if the source of the data has to originate from human entry by design a very few lines of HTML can be written to make text entry spaces appear on a web page for data gathering and then some java script can take the entry and generate the xml file. All of this can happen with orders of magnitude less memory and processor time than opening and running Microsoft word or excel.

Office programs are overkill for this kind of information traffic. It's like constructing an imax theater just to communicate the names and phone numbers of training session participates for a particular training session. Just consider how quick you can blaze through links on twitter. Then compare that to how long it takes to open a large form in MS with macros. Oh and word can freeze completely deleting hours of work. Websites can be built to constantly save your work instantly (google docs and blogger) with some java script so even if your computer explodes the most you have lost is 15-30 seconds of work.

The problem is HTML, XML and JavaScript are foreign to people outside of computer science type fields like software engineering and web development. Yet people of all disciplines are making and updating these forms in MS office programs all the time. They gravitate toward office because it's easy to learn but as i highlighted it's a dead end to productivity. The solution lies in secondary education. These scripting languages are not hard to learn. They don't require a mastery of discrete math or data structures. A high school Junior could pick up XML in a week or two. Arming tomorrow workforce with these skills is crucial. These scripting languages should be a mandatory part of every high school curriculum.

Why does everyone need to know how this stuff works? It's because forms and information transfer are never static. Now when a company decides to do some web based data gathering from user input they rely on web developers to do the code. When slight tweaks need to be made, they are helpless without the web developers. For smaller companies that means either maintaining a costly ongoing contract or letting the required tweaks accumulate until they can be contracted as a large project justifying the cost of paying for the web developer services. If the majority of the graduating workforce was familiar with this web standards, then tweaks to web sites would be done as needed since everyone could easily update them.

Passwords are seriously becoming a problem

Passwords are quickly becoming a plague to interoperability. To often are people forgetting their passwords to various internet services due to auto-login. Just last year my wife and I set up an account on The Knot to organize our wedding. We both quickly became auto-logged into the site on our laptops. The one time I tried to get in on my phone was never successful because neither of us could guess at the password or the username for that matter. There is more than a couple internet services that I just automatically click "forgot password" on because it will take less time to reset my password via email then try and actually remember it. The problem is that every internet service has different rules to what is allowed as a password. Facebook connect is great if you are on your normal device. I read an article recently that predicted that passwords will soon be replaced my NFC style communication with a smartphone that will authorize the user via fingerprint. This can not come fast enough.....