Steve Jobs - A Life Well Spent

It is almost impossible to understand, let alone describe, the creative genius  of Steve Jobs. With little college education, he was neither an engineer nor a computer scientist. But he was a legend with an intellectual curiosity that no one in the contemporary world could match. 
Jobs was not an not inventor in the conventional sense of the term, but he was the force behind the invention of several revolutionary devices that have changed the world. He had the vision and the drive that is unparalleled. 
In mid-seventies, Jobs nudged Steve Wozniak, six years his senior, to work with him to build a computer, and the two successfully built Apple I, a bare bones computer consisting of little more than a circuit board.
The next computer, Apple II, was much more than that. It was, as Jonathan Zittrain puts it, the first “generative" computer. Apple II became the first mass produced computer, and represented the dawn of an age where computers could be programmed, and could use third-party software.
In developing these computers, Wozniak came with technical skills , but Jobs brought ideas and vision. The partnership between the two, unfortunately, could not last very long. In 1981, Wozniak was injured in an air crash and developed amnesia. (He eventually recovered but has had little involvement in Apple.) 
Jobs went on to develop the Macintosh line of computers that represented a leap in terms of technical capabilities, and were a far cry from text-based machines such as the IBM PCs. The Macintosh computers employed highly complex software, but reduced complexity for the end-user. 
Apple went public in December 1980, and two years later it became the first PC company to reach $1 billion in annual sales. Jobs was forced to leave Apple in 1985 after an internal power struggle with CEO Sculley who was enticed into the company by Jobs himself. 
During his absence from Apple, Jobs not only formed NeXT (the developer of the NeXTSTEP object-oriented, multitasking operating system), but bought the computer-graphics division of Lucasfilm, and renamed it Pixar. In 1995, Pixar released its first feature film, Toy Story, which was a box-office hit. (Other hits, such as Finding Nemo, followed in the years to come.) 
Microsoft, a smaller and younger company than Apple, went public in 1986. On December 19, 1989, Microsoft decisively overtook Apple in terms of market capitalization. This was the beginning of a slide for Apple that would take the company to the brink of bankruptcy. 
In February 1997, in a dramatic development, Apple purchased NeXT for $400 million, and with it - after a lapse of almost 12 years - Jobs returned to the company he had founded. In August 1997, Microsoft gave Apple $150 million to keep it afloat, and pledged to develop the Office software suite for the Macintosh platform. 
Formally appointed CEO of Apple in 2000, Jobs went on a roll, producing one incredible product after another. 
In October 2001, Apple introduced iPod, a digital media player with a 1.8-inch hard drive that initially stored 1,000 songs. (Its capacity has continued to multiply, and several enhanced versions of the product have followed – Mini, Nano, Shuffle, and Touch)
In April 2003, Apple introduced the iTunes store with the capacity to store 200,000 songs. Becoming the biggest music store, iTunes has revolutionized how music is accessed. Over 16 billion songs have been downloaded from the iTunes store. 
At a time when no one thought that mobile devices could be made any better, Apple made a dent in the smartphone market by rolling out iPhone. The device introduced in January 2007 has become the standard by which smartphone capabilities are judged. (Since then, the smartphone market has exploded.)
Apple's introduction of iPad in January 2010 was another epoch-making event. This device has changed the way computing will be done from now on. 
Apple's string of successful product launches has had an impact on its market value. On May 26, 2010, Apple overtook Microsoft in market capitalization, becoming the biggest technology company in the U.S. 
In October 2001, the company's stock hovered around $10. In July 2011, the stock price climbed above $400. By his own admission, Steve Jobs was not motivated by money, but by a desire to excel. In the process, however, he made himself and those working for him more wealthy than they could have ever imagined.
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Latin America - The Race to 4G

The Latin American market is embracing 4G mobile networks despite the fact that the region has seen lukewarm response to 3G. HSPA is deployed in over 60 networks in 27 countries, but the number of users is only 11 percent of the region’s 560 million subscribers. Virtually all Latin American countries have far lower 3G penetration rates than other markets across the globe that have seen 4G launches.


Compiled by: Information Consulting, LLC

In recent months, as shown in the Table above, several carriers have upgraded their HSPA networks to HSPA+ which is classified by ITU as a 4G technology. These deployments support data rates of 21 Mb/s in a 5MH channel, except for Chile where Entel Movil and Movistar have deployed dual-carrier HSPA+ which uses two channels to double the data rates to 42 Kb/s.

The keenness of the carriers to move to higher speeds stems from their desire to position themselves for the impending wireless data boom. The perception that such a boom is imminent is fueled by the influx of smartphones in the Latin American market, and their falling prices.

HSPA+ is less expensive to deploy and will serve emerging wireless data needs of Latin American carriers for the foreseeable future. These networks can even be upgraded to suppport data rates of up to 84 Mb/s. But mobile carriers are eager to transition to LTE networks which involve a brand new deployment, but offer higher speeds than HSPA+. LTE is capable of supporting speeds of more than 100 Mb/s using scalable bandwidth of 1.4 MHz to 20 MHz.

But there is a snag: carriers at present do not have enough spectrum for LTE deployments. While many countries in the region have allocated the 2.5 GHz spectrum for LTE deployments, few have licensed these frequencies for commercial implementation. Only Columbia has licensed the 2.5 GHz spectrum, allowing UNE-EPM to launch LTE.

Unlike UNE-EPM, Mexico's Telcel is utilizing the 1.7-2.1 gigahertz band for LTE deployment. One of the winners of a spectrum auction for next generation networks, Telcel is currently conducting LTE trials, and plans full-fledged deployments in 2012.

4G networks are a good investment only if carriers are able to generate a critical mass of wireless data subscribers. To do so, the carriers need to be more aggressive in marketing Internet access and come up with creative plans to drive Web surfing. Over 80 percent of the population in Latin America uses prepaid plans. The carriers need to add Web surfing and email messaging to these plans to monetize their high-speed network deployments.

Another area of focus in Latin America needs to be subscriber growth. The region's mobile subscribers roughly match its population of 590 million, but the penetration is not really 100 percent since many users have more than one subscription. In fact, roughly one-third of the region's subscribers do not have a mobile phone. Carriers need to boost subscriber penetration by expanding coverage and offering low-cost plans. Latin American governments will need to get involved as well, offering subsidies to the poor for the purchase of mobile devices.

Note: The statistics in this write-up are for year-end 2010.
If you are interested in publications on the Latin American markets, please click here.
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Steve Jobs' Departure

The departure of Steve Jobs as Apple's CEO is another chapter, perhaps the most significant one, in the company's tumultuous history. Some of the major events that characterized the company's trajectory prior to its resurgence at the turn of the century include the following:

• April 1976: Apple is founded by Jobs, 21, and Steve Wozniak, 26, both college dropouts.
• December 1982: Apple becomes the first personal computer company to reach $1 billion in annual sales.
• January 1984: Apple's Macintosh division, headed by Jobs, launches the Macintosh line of computers that represent a leap in terms of technical capabilities.
• May 1985: Jobs is fired from Apple by the company's CEO. (Jobs goes on to form NeXT, Inc. which develops NeXTSTEP, an object-oriented, multitasking operating system.)
• December 1989: Microsoft decisively overtakes Apple in market capitalization.
• 1996: For fiscal year ending September 1996, Apple posts a revenue of $9.8 billion but suffers a loss of $816 million.
• February 1997: Apple purchases NeXT for $400 million and with it Jobs returns to Apple. (Jobs shutters the clone licensing program and aligns the company closely with Microsoft.)
• August 1997: Microsoft doles out $150 million to to help Apple keep afloat.
• October 1997: Michael Dell suggests at an IT event the only course left for Apple is to shut down.

Apple's meteoric rise began in October 2001 with the release the first iPod music player. The company's stock, which was trading at around $10 a share at the time, witnessed a stunning rise in subsequent years. The company's market valuation, in turn, swelled, and on May 26, 2010 Apple’s capitalization overtook that of Microsoft.

Despite concerns that Apple's business model may not be sustainable, Apple's stock has continued to skyrocket, and on July 26, 2011, it closed above $400 for the first time, marking a 60% gain in just over a year. This rise in stock price brought Apple's $374 billion market capitalization even closer to Exxon's valuation of $418 billion.
Apple's phenomenal growth is a testament to Job's considerable genius. The company has churned out product after product of unsurpassed excellence, and its dominance of the computer, tablet, and smartphone markets is unquestionable. Despite frequent bouts of sickness in recent years, Jobs has demonstrated an uncanny resilience, and his appearance at the company's product launches contributed in no small measure to the market's confidence in the Apple brand.

The impact of Jobs' departure from Apple's helm can be profound. His decision to step down from the CEO's position means that his health problems have (sadly) compounded, although his decision to stay on as the company's chairman is somewhat reassuring. However, it appears that his involvement in Apple's day-to-day affairs will diminish, and his ability to function effectively in steering the company's course will be impaired.

 Apple certainly has a treasure trove of highly capable and skilled professionals, both in terms of creative abilities and management savvy. Timothy Cook has been Jobs' highly trusted lieutenant, deftly managing the company's sprawling operations. However, one thing is clear: Jobs departure will leave a void which will be hard to fill.

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3D TV Prospects Brighten

Until recently, the prospects of 3D TV appeared dim. This skepticism was fueled by past failed attempts to make 3D TV a mass consumer product. Even today, 3D TV is not without its drawbacks since there are many scenarios that do not translate well into a 3D viewing experience. This makes it imperative that studios are extremely selective in producing content for 3D TV.

3D viewing is not well suited to a small screen. In addition, the expense of 3D TV has served as an inhibitor to its widespread adoption.

However, consensus is now emerging that 3D TV is poised for speedy growth. The immense popularity of 3D movies has created the expectation that 3D TV will grow fast. Moreover, 3D TV technology has found a niche in video games. In addition, falling prices of 3D TV sets is helping propel their sales.

In a recently published Video/Display Market Tracker, Databeans forecasts the rapid growth of 3D TV sales over the next five years. The Market Tracker highlights market developments that are contributing to the growth of 3D TV, particularly the strong presence of 3D viewing in numerous consumer markets.

Databeans points out that:                                                                    

• Many companies like DIRECTV and Dish Network are coming up with numerous 3D channels and the amount of this content will only increase over time.
• Advances in televisions add to consumer appeal for 3D TV. For example, Samsung, Sony, and Visio offer large sized televisions with Internet and media capabilities. This allows users to stream programming from the Internet, have Skype calls and check their work email without leaving the couch.
• HTC has released an EVO 3D phone that has two cameras to create retinal disparity and the 3D illusion. To semiconductor manufacturers, this trend means double the chip sales for a phone with dual cameras.

However, Databeans points to one final hurdle that needs to be crossed before the 3D TV market is catapulted into mass adoption, and that hurdle is 3D glasses. According to Databeans, when the technology for 3D television without glasses becomes available, 3D TV will be much more widely accepted.

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The Next Frontier of Growth: Machine-to-Machine Communications

Wireless networks have reached saturation levels in most industrialized markets in terms of penetration by individuals. Developing countries have seen widespread deployment of wireless technologies, and growth rates are skyrocketing. In many parts of the world, wireless usage has surpassed that of landline networks. Nevertheless, the real opportunity in the use of wireless technologies is not in person-to-person interaction, but in machine-to-machine (M2M) communication.  Consider the following statement by TIA:

Numbers so mind-blowingly big that it makes the M2M space impossible to ignore: There are ten times more machines than humans.  Here's the math: 7 Billion people on mother earth x 10 = 70 Billion machines!  Each would benefit from communicating with another machine. 

A number of developments have converged to give fillip to M2M. The most significant of these are the widespread penetration of wireless networks and the availability of high speeds over these networks. Wireless networks obviate the need to deploy wiring making it easier and cost effective to implement M2M solutions.

Estimates of the growth of M2M vary.  Information Consulting publisher partners, IDATE and Mind Commerce, have published in-depth reports that offer their perspectives on this market. According to TIA, there will be close to 300 million M2M connections by 2015. With M2M communications solutions, the ARPU is relatively modest but that is compensated by exceedingly low churn rates.

Information Consulting believes that the market for cellular M2M services is in its incipience and is, in most respects, still being defined. There are two sets of players competing for a share of this burgeoning industry, namely:

• Service providers who use their own network (network operators) or lease capacity on operator networks
• Applications providers who have developed solutions to address specific market segments

One of the first forays in the M2M space was with in-vehicle communications systems such as GM’s OnStar. More recent impetus to this market has come from the emergence of eReaders, such as Kindle. Point-of-sale systems have also evolved that are helping drive the M2M market. The foregoing systems, nevertheless, have required some form of human intervention.

Information Consulting sees the future of M2M communications in the proliferation of intelligent gadgets that interact without any human input. Evolving solutions include the remote monitoring of electric meters and vending machines. As the number of network-enabled appliances grows, there will be an inexorable push towards a world where interconnected devices will be the norm.

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The Net Neutrality Conundrum: Does the Internet need Regulation?

 Information Trends (IT) has published a study, “The Net Neutrality Conundrum: Does the Internet need Regulation?,” examining the recent moves to limit FCC’s ability to enforce net neutrality. The FCC has always exercised forbearance in regulating computer technologies, the study says, and its net neutrality rules that were enacted in December are designed to keep the Internet free of attempts by operators to prioritize traffic.

 The FCC is being attacked on two fronts, the study points out. On the one hand, ISP’s such as Verizon and MetroPCS have sued the FCC in an attempt to have its net neutrality rules repealed. On the other hand, the House of Representatives has passed an amendment to its annual government funding bill that would prohibit the FCC from using any funds to implement the net neutrality rules.

The beauty of the Internet is a user’s ability to go to any website and access any application without the intervention of a third party, the report says. Paid prioritization will change that because it will put into the hands of the operator the power to control a user’s Internet access. It will inhibit the growth of small, entrepreneurial companies who are not able to match major corporations in filling the coffers of the operators.

 If operators are allowed to selectively prioritize Internet traffic, the study says, it will amount to censorship of content in violation of First Amendment rights of content providers. Such a move will have international repercussions since it will set a precedent for other countries to follow. Prioritization of Internet traffic will be used by governments in undemocratic countries to block their citizens' access to information.

 It is true that the Internet traffic is seeing rapid growth, but the solution is to add network capacity rather than prioritize traffic. Any attempt to stifle net neutrality will inflict a blow on new product innovation, limit a user’s Internet access, and increase price of operators’ Internet services. One the other hand, if the Internet is allowed to continue its tradition of openness, it will spur market growth and technical innovation.

 The Internet is one of the most phenomenal developments of this age, and it is critical that its neutrality is maintained. Web 2.0 represents dynamic as opposed to static site content. The provider of a Web 2.0 service offers a platform for the users to interact. With Web 2.0, a group of people collaborate to create and share information. On the flip side, Web 2.0 provides operators with the capability to block or slow access to competitors’ websites by users. Rather than enforce net neutrality, operators want to implement “paid prioritization” that will allow them to generate additional revenue streams.

 If FCC’s net neutrality rules are blocked, it will severely inhibit the ability of the regulator to perform its functions, particularly with reference to the "public interest, convenience and necessity" provision the Communications Act. Moreover, it will compromise the implementation of the National Broadband Plan, so critical to widespread availability of broadband speeds throughout the nation.
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Power Grab at Google

The change at Google with Larry Page becoming the company’s CEO may seem inconsequential but Information Consulting believes it is a significant development. The change reflects the market realities of intensified competition and increased regulatory oversight.

Even when Eric Schmidt was at the helm, its co-founders, Page and Sergey Brin, were essentially running the show. Page, in particular, has been the driving force behind the company. Schmidt, nevertheless, was the face of the company, and all major decisions flowed through him. Now that Schmidt is the company’s Chairman, he has a diminished role. Page’s ascendancy will accelerate decision-making and Google will adopt a more aggressive posture as it pursues new markets.

The change in leadership reflects Google’s desire to expedite decision-making and take a more proactive approach in confronting competitive threats and regulatory roadblocks. The U.S. Justice Department, for instance, is pondering whether to file an antitrust lawsuit challenging Google’s proposal to acquire ITA Software, Inc., a provider of online flight and ticket information. The proposed acquisition is being vehemently opposed by software and online travel companies including Microsoft Corp., Expedia Inc. and Sabre Holdings Corp.

Google’s rivals are employing every tool in their arsenal to try to counter the software giant’s market onslaught. Despite Google’s dominance of the search engine market, a resurgent Bing is beginning to gnaw at its market share. Its Google TV is facing resistance from cable companies making its future uncertain. Another ominous development for Google is its delay in introducing Chrome OS. The software, ostensibly designed for notebooks and netbooks, was expected to threaten well-established rival platforms from Microsoft and Apple. But reports suggest that Google is finding it challenging to pull it off.

However, not all is lost for Google. Its Android platform has been a runaway success, and its share of the Internet advertising market is growing. And with a more aggressive leadership, Information Consulting believes Google will continue as a force to be reckoned with.
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Steve Jobs’ Illness

 Steve Jobs, Apple’s founder and CEO, sent a note to his company’s employees yesterday saying he is taking a medical leave of absence so he can focus on his health. The note said that Jobs would continue to be involved in major decisions, but that he would give up the day-to-day running of the company. Information Consulting earnestly hopes that Jobs recovers from his illness and comes back to the helm of Apple. He is only 55 and should have a long life ahead of him.

 Since August 2004 when his pancreatic cancer was first revealed, Jobs’ health has been the subject of frequent speculation. This speculation was further fueled by the fact that in public appearances, Jobs has appeared thin and frail. Jobs took medical leave in the first half of 2009, returning to the company in late June. He received a liver transplant while on leave.

 Because Jobs has been the force behind Apple’s products, his health issues have raised concerns about the future of Apple. The latest news about his illness is vague; it is not known what the nature of the problem is. Jobs’ previous medical history and the very real possibility of medical complications means that Apple should be more forthcoming about the medical condition of the company’s founder.

 Few would doubt that Jobs is one of the brightest men ever born with an array of accomplishments under his belt. Under Jobs’ guidance, Apple has created products which made their mark on the industry. The brain behind the Macintosh line of computers, Jobs panned out the idea of an iPod, followed by the unleashing of ground-breaking products such as iPhone and iPad.  

 No major corporation is identified with its creator as much as Apple is with Jobs. Should anything happen to Jobs – and it is by no means certain that anything will – it is likely to have a profound impact on the future of Apple.

 Jobs’ heir apparent is Timothy Cook, Apple’s Chief Operating Officer. Cook has distinguished himself for his ability to make Apple’s sprawling operations move on time. He handled the company’s day-to-day operations during the first half of 2009 when Jobs was on medical leave, and received a bonus of $22 million for his “outstanding performance.”

 Information Consulting has concerns whether a post-Jobs Apple will be able to maintain the kind of momentum and market clout that the company currently enjoys. Despite Cook’s exceptional management skills, it is unclear if he will be able to offer Apple the kind of direction that Jobs provided.
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Bill Daley and the Telecom Industry

The appointment of William (Bill) Daley as the White House Chief of Staff is raising eyebrows in the telecom industry. As commerce secretary under President Clinton from January 1997 to June 2000, Mr. Daley oversaw the National Telecommunications and Information Administration (NTIA). He played a more direct role in the telecommunications industry when he was president of SBC Communications Inc. from December 2001 to May 2004. Mr. Daley worked at SBC before it acquired AT&T and took the smaller company's name.
Mr. Daley’s stint as commerce secretary was free of any major controversies. However, his stewardship of SBC made many in the telecommunications industry uncomfortable. In essence, he was seen as having moved from a cabinet position, where he represented the wider concerns of the U.S. government, to representing a vested corporate interest.
Mr. Daley assumes his position as President Obama's Chief of Staff while a battle is looming in Congress over net neutrality rules. Net neutrality is based on the concept that companies providing Internet service should treat all sources of data equally. Supporters of net neutrality contend that Internet providers cannot give preferential treatment to their own content or that of content providers for a fee, and that they cannot block or impede content that represents controversial points of view. The FCC favored keeping things that way, but its ability to do so was hampered by a federal appeals court decision in April 2010 that restricted its authority to regulate broadband providers.
In December 2010, the FCC passed a watered down “compromise” version of these regulations that, for the first time, allows for “reasonable” paid prioritization. Nevertheless, the rules ban outright blocking and “unreasonable discrimination” of Web sites or applications by fixed-line broadband providers.
President Obama, whose campaign commitment was to enforce net neutrality, supported the FCC decision. However, consumer groups blasted the new rules, calling them woefully inadequate. On the other hand, Republicans have rejected the regulations, maintaining that they represent an interventionist overreach on part of the FCC.
With Republicans in control of the House of Representative, a bill is on the anvil seeking to scrap the net neutrality rules. If the bill goes to the President’s desk, Mr. Obama will most likely veto it. However, consumer advocates are concerned that Mr. Daley may try to influence the president not to do so.
Information Consulting believes that Mr. Daley does have corporate leanings, but he is unlikely to try to influence the President when it comes to net neutrality. Now that he is a part of the President's team, Mr. Daley is more likely to support Mr. Obama's decisions and faithfully follow the President's agenda.
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Verizon's iPhone launch: Better late than never

The iconic iPhone is finally coming to Verizon Wireless. And the new device will not only support Wi-Fi but the carrier’s CDMA network as well. Verizon, the largest U.S. wireless carrier in terms of subscribers, made the much anticipated announcement on January 11, 2011 at an event in New York City.
Existing customers will be able to preorder the smartphone on February 3rd, and others will be able to do so on February 10th. With a two-year agreement, the device will cost $200 for a 16GB model and $300 for a 32GB model.
In most ways, the Verizon iPhone will be similar to iPhone 4 that uses the AT&T network. However, the smartphone will use Verizon’s older CDMA EV-DO network and not the newer LTE. Unlike AT&T’s device which can tether to only one computer, Verizon’s iPhone will have a five-user Wi-Fi hotspot capability. This functionality has been standard on Android devices.
This is the first time U.S. consumers will be able to choose between two networks for their iPhone device. Lifting AT&T’s exclusive hold on iPhone, the Verizon smartphone will unleash competition in the market for iPhone handsets.
The rollout of a Verizon iPhone embodies Apple’s move to expand the user base of its devices. The move comes as iPhone faces increasing competition from Android smartphones that have flooded the market. In fact, Verizon itself strengthened its position in smartphones by launching Android handsets from Motorola and HTC.
Apple’s iOS has been fighting a losing battle with Google’s Android. While Apple’s OS is technologically more advanced, the company has not been able to match Google’s market savvy. Android smartphones have already overtaken iPhone handsets in terms of end-user sales. (For a better understanding of the two companies’ market positioning, please read Information Consulting, LLC’s report, Google vs. Apple: Clash of the Titans.)
Ever since it introduced iPhone on AT&T’s network in June 2007, Apple kept itself confined to the same carrier. Rather than use all possible carrier outlets for its device, it chose to put all its eggs in one basket. Information Consulting is of the view that Apple may have paid heavy price for this decision.
Due to its Wi-Fi capability, anyone should have been able to use iPhone on any network. But that was not to be. Despite user complaints of dropped calls and poor service on AT&T’s network, Apple’s commitment to its carrier of choice was unwavering. On the other hand, Android devices have been available with every U.S. carrier, giving Google a huge advantage in terms of solidifying its market position.
Information Consulting wonders if other U.S. carriers – Sprint and T-Mobile - will carry iPhone. So far, there are no signs pointing in that direction. Moreover, Information Consulting is curious if Apple will offer the CDMA version of iPhone to operators in emerging markets such as China and India. Failure to do so – and soon – could inflict irreparable damage to Apple’s already vulnerable position in the market.
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