Why Smartphones Still Elude Japan Inc.

Ever wondered how did Japan lose a game it was set to win? Japanese companies eventually realized it, it is the galapagos effect. But first we need to step back and consider what lead us here.

Japan makes reliable, affordable and competitive products in almost all categories, in cars obviously without a doubt if though lacking in flair and character. Cars that compete on a world scale and are the sweetheart of every goat herder and rebel fighter in war torn regions. Japanese cars compete in every category in every market and there seems no stopping them, or is there? galapagos effect.

In nature, competition breeds stronger living beings. When it is compete or die, you either compete or die. In many market segments, the Japanese competed and triumphed but not in computer software, hardware and not in smartphones. Why?

It is no prize that Japan Inc. treats software as if it was manufactured goods, as if it were hardware and not software. There are many cultural reasons for this and it goes back to something quintessentially Japanese, a philosophy known as monozukuri. Monozukri works for everything from pots and swords to cars and camera, but software is none of them and this approach simply produces bad software if at all.

But software while only one aspect it is a very important aspect of what makes a smartphone a smartphone, but that doesn't explain why Japan Inc still struggles with smartphones. Samsung and HTC, have no software developing experience, they use Google's Android or Microsoft's Windows, just like all Japanese smartphone makers, yet it is the Japanese companies who are finding it hard to compete selling hardware that runs the same software. Can it possibly be, the one thing Japanese people always excelled at, making stuff, is something they can't compete on with the Asian upstarts who grew up and matured emulating Japan?

Actually the reason is very simple and it goes back to the galapagos effect. Japan for the longest of time had a closed market. Whether through tariffs or the adoption of proprietary technology that made the cost of entry to foreign competition too high. For a while, it didn't matter, Japan lead the world in cellular technology and had some of the most advanced flip-phones in the world, but they were only for sale and only sold in Japan. The infrastructure required for them didn't exist elsewhere.

Japanese companies through idiocy or malice created their own technological bubble that sheltered them from foreign competition, they only had to compete with each other. Japanese flip phones grew ever more sophisticated with terrestrial TV access and fast Internet access but only supporting a subset of HTML to fit the smaller screens and the phone's keypad input. MMS was never developed, instead a custom email system was developed, in its place. Brilliant technologies that were all made obsolete and useless right around 2007.

When the iPhone came and then Android followed, the technology wasn't in the hardware. The hardware was very simple and plugged in, into existing networks in North American and Europe. The brilliance was in the software, that can be changed, altered and made better without having to replace the device. Apple, Samsung, HTC and everyone else except the Japanese improved quick because they were competing against each other world wide, in their home markers and in their competitor's home market.

Japan Inc was missing, too Japan-focused, too Japan-centric, still making phones that wont work or appeal to anyone outside Japan. Even when using American OSes (Android or Windows) they still managed to make something no one outside of Japan would want. Soon people in Japan stopped wanting them too. Sony, and only Sony, is making a comeback, why? It competes globally.

This is not about Japan, or something specific to Japanese people, sure they don't understand software but so does the Koreans and Taiwanese. The real issue is, when you lock yourself (or your country) to foreign input, whatever it maybe, you have already doomed yourself to extinction, you might win some time by keeping it locked longer but unlike the galapagos islands inhabitants, humans migrate and learn about the outside world. Protectionism and trade barriers only make your industry weaker. Competition improves the breed.

The world is becoming cosmopolitan, yet at many times Japan is very Japan-centric, as if the rest of the world doesn't exist. This will only continue to create a weaker less globally-competitive Japan. And I'm not the only one who thinks so, Japan's environmental ambassador to the UN also thinks so. I attended a lecture given by him, he encouraged Japanese students to make foreign friends to learn about the rest of the world. Japanese are very lacking in their understanding to anything outside of Japan, no wonder in things that are very trend and fashion sensitive like smartphones they are completely useless.

What about cars someone might ask, they are still competitive there. While I'd like to leave that for another blog post, I'll just leave you with this. The cars carry Japanese nameplates but they are a collaborative effort with R&D centers around the world. Honda, for example, designs and manufactures more cars in America than in Japan.

The True Cost of Japan Inc

K computer which cost $1.2 billion has been overtaken by the $97 million Titan. If this doesn't exemplify all that's wrong with Japan Inc. I dunno what does! Imagine yourself building a gaming reg only for it to be humiliated 18 months later by a pocket calculator.

Technology does improve and it is not fair to compare a 2011 supercomputer with a 2012 supercomputer, but technology never improved at the rate of twice as fast for one tenth the price in one year, that would be exactly like having a $1200 computer beaten a year later by a $97 calculator in everything. Titan is not only twice as fast but also more than twice as energy efficient. A better comparison to K might be the IBM Sequoia, both are Massively Parallel Processor (MPP) designs and designed by one company using its own hardware from the CPU all the way to the interconnect as opposed to most supercomputers that use off the shelf components and are designed as clusters. Sequoia cost about half as much as K, doesn't use any accelerators unlike Titan and has similar yet not equivalent design to the K.

Then there is this, the K is very expensive to run because it is energy inefficient. The K was designed for another time and age apparently, nuclear era Japan when electricity was cheap and plentiful, no one imagined how things can change. This wouldn't be worrying if it weren't for the strong push towards energy efficiency that everyone jumped on except Fujitsu.

K has a relatively low performance/watt and low performance/cost. The total cost of K is estimated at $1.2 billion with a yearly running cost estimated at $10 million. K ranks 85th on Green 500 list with 830.18 MFLOPS/W. Titan ranks 3rd on the Green 500 at 2,142.77 MFLOPS/W. Titan not only achieves high performance/watt but also high performance/dollar. At $100 million the cost of Titan is a fraction of the cost K, Titan's annual running costs are $9 million. Fujitsu recent announcement of adopting Xeon Phi for its future computers show that K might be the last of the homogenous all-CPU supercomputers and SPARC64 is not long for this world, not if Oracle gets its way.

Transitions

Back in the 1960s when minicomputers first came out, mainframe makers such as IBM called them toys, too underpowered to do any serious work. 20 years later, the same was said about microcomputers (PCs) by both minicomputer makers such as Digital and mainframe makers. Initially, both minicomputers and microcomputers when they first came out weren't used to do 'serious' work. They were used to play games or edit text documents. Heck, Unix was written so two computer scientists can play a video game on their PDP-7. But as they gained acceptance they became serious work tools. Now, 30 years after the microcomputer revolution, the same is being said about the iPad and again the critics and haters are being proven wrong.

People are creatures of habit, change is hard, uncomfortable and down right frightening to some. Especially those who are most comfortable and successful in the old way.

The Irony of Micron's possible purchase of Elpida

In 1989 Shintaro Ishihara and Akio Morita co-authored a book titled "The Japan That Can Say No". The book was an endless trip in Japanese jingoism and how America should just give up and kill itself. The book is garbage to say the least but can be quite hilarious in retrospect. So how does this book connect to Micron's possible takeover of Elpida? In the book Shintaro Ishihara goes on and on over how superior Japanese technology is, evident by Japan's (then) near dominance of the semiconductor industry, specifically DRAM chips. For in the 1980s American DRAM makers found it excessively hard to compete with the Japanese and in 1985 seven of America's semiconductor makers exited the DRAM market due to failure to compete with the Japanese. Micron was the one of the few American DRAM maker to stay in business. Even Intel had to completely abandon DRAM, the technology it pioneered and focus instead on microcomputer processors.

Elpida (Greek for hope) was founded in 1999 as a result of the merger of Hitachi's and NEC's DRAM business and in 2003 it took over Mitsubishi's DRAM business as well. The reason for this merger was the Koreans. Japanese companies found it hard to match and compete with the Samsung and Hynix in the cut-throat memory business without spinning off their DRAM divisions and merging them and thus Elpida was formed. They needed a more nimble and focused company, because the parent companies (Hitachi, NEC and Mitsubishi) were too big, too diverse and too slow to react.

Now it has come full circle. Micron the once small Idaho-based DRAM maker is taking over the last standing Japanese DRAM-maker, Elpida. All of this, while Shintaro Ishihara is still alive to witness it unfold.

Android Tablet Schadenfreude

• As of July 2011, Honeycomb accounted for 0.9% of 135 million active (i.e. sold to customers and in use) Android devices.
• By January 2012 the Amazon Kindle Fire accounted for 36% of all Android devices in use. Amazon claims that they were selling 1 million per week.
• The USA Today app had 260,000 downloads on the Kindle Fire vs 130,000 downloads on other Android tablets. For comparison, the iPad version had more than 2.9 million downloads.
• According to Chitika, for every 100 ads delivered to an iPad, 1.5 are delivered to the Xoom, 1.5 to the Galaxy Tab and 1.5 to the Kindle Fire.
• nVidia's CEO is not pleased with Android tablet sales numbers, at least the ones that ship with an nVidia Tegra (all of them?)
• Unlike Apple, Amazon, Motorola and other Android tablet vendors refuse to disclose their numbers.

How bad are Android tablets sales?

So the PS Vita has Flopped [updated]

With 500k shipped and Sony able of only moving about 72k during its second week, it is the beginning of the end for portable gaming.

The next 3 months will decide the fate of the PS Vita.

[update]
Sales dropped further for the 3rd week, about 43k were sold. A price drop seems imminent.

[update]
What's the antonym of Vita in Latin?

1st week: 324,859
2nd week: 72,479
3rd week: 42,648
4th week: 42,915
5th week: 18,361
6th week: 17,141
7th week: 13,939

Why Did Google Develop Android?

Google claims that it did so to promote an open web and as long no single platform dominates, whether Android comes at top or not it doesn't matter to them. They lied and here's why:

Let's assume Google doesn't want to monetize Android. Amazon and Baidu do worry them. Here's why: 1) No Android Marketplace 2) No Google Apps 3) In case of Baidu no Google search. Amazon and Baidu are riding on Android and then 'forking' it to undercut Google.

Let's assume Google doesn't care about dominating and only cares about people using its search engine. Explain why Google brags about activation numbers? If they make more money out of iOS (or even equal amount) why are they aggressively pushing Android and giving it away for free such that no one can develop a business case in creating a competing OS (Amazon and Baidu found a way around that). Android is to Google what Bing or XBox are to Microsoft. Remember how Microsoft got its Windows and Office monopoly? There is a longterm plan and Google wants to control everything, what better way to sell you ads than controlling the OS you use to access the web on a device that has all your personal info linked to Google services. Why no company is actively developing a desktop OS to compete with Microsoft except for Apple (Linux and others have less than 3%)? Microsoft thru back-room deals with OEMs made it cost prohibitive, and this is Google's game with Android.

One final thing to consider is Google's purchase of Motorola Mobility. If this doesn't have desire to dominate written all over it, I don't know what does.

The Pathetic State of Android Tablets

We know that all Android tablets combined command 33% of the market, nothing to sneeze at, right? Wrong! This 33% is mostly made up of the Amazon Kindle Fire, the Barnes & Noble Nook Color and a variety of $100 and $200 tablets, most will never run Android 4.0 and in the case of the Fire and Nook are forks of Android that Google earns nothing from. Few vendors barely crossed the 1Million units mark, most of them didn't. Usually, I use Amazon.com hourly sales to gauge the success of a product in the market only because Amazon.com is one of the few (only?) sellers that provide such a detailed breakdown of sales. With tablets however you really can't clearly gauge the market since Amazon.com doesn't sell the iPad nor the Nook. With that in mind and knowing that the iPad command about 60% of the market, we examine Amazon.com's hourly sales.

First, we look at the tablet best sellers. The Kindle Fire is an obvious leader followed by the Coby Kyros and ASUS Transformer Prime. I've been following the hourly sales for a while, the latter two exchanged places back and forth but Kindle Fire remained supreme since hitting Amazon.com's virtual shelves. You might think ASUS is doing great, it is 2nd or 3rd after the Kindle Fire, but you'd be wrong!

Next, we examine the parent category, the best sellers in computers and accessories. Kindle Fire remains the best seller here, the Coby Kyros is at number 10 and the ASUS Transformer Prime is at number 12. The Apple TV at number 3 outsells both by a huge margin. Yes, Apple's hobby, the Apple TV outsells the best selling Android tablets. It gets worse.

The Kindle Fire remains the best seller in all electronics that Amazon.com sells. The Apple TV is at number 9. Where do the leading Android tablets fall on the top 100 electronics? They don't! The Apple Airport Extreme at 71 sells more than any Android tablet does on Amazon.com.

ASUS, Motorola and Samsung, to name a few. Mistakenly assumed that there was a tablet craze, like a smartphone craze but the truth is, people want the iPad. People are choosing the iPad, not over other tablets, but over netbooks. Tablets existed for 10 years and no one cared about them until the iPad. This is not a new market that Apple has created but a hit that people want. They assumed they could just copy the iPad, as they did with the iPhone and people will flock towards them, which obviously didn't happen in 2011. Samsung, the biggest of the Android cartels in 2011 -partly due to selling 5 different Android tablets- is at 5.6% and this won't be getting better. In fact, by the hourly sales on Amazon.com they seem to be falling further behind, as ASUS seems to be positioning itself as the sales leader among high-end Android tablets.

In 2012 it will only get worse for ASUS, Motorola and Samsung, among others. The tablet market, unlike the smartphone market, seems to have clearly divided itself between those who want an iPad and those who don't and the majority of those who don't are opting for no-name cheap $100 Android tablets and now with the advent of the Kindle Fire and Nook, it seems those two, carrying brand recognition will become the default Android tablets that happen to not run Google-sanctioned Android. The Kindle Fire and Nook are the unexpected Android-killers.

Google 201x =? Microsoft 199x

Long long ago in a galaxy far far away... It was a different time then. It was thought to be the up and coming underdog. It was the proponent of open systems and no one thought of it as evil, yet. That was Microsoft. At that time, Microsoft was a much smaller player compared to the much larger Apple Computer. Funny how history repeats itself.

Microsoft had one trick that it played over and over. Licensing its software to hardware makers, not selling directly to consumers. Shrink-wrapped Windows sales are excessively low for an OS that dominates +90% of the market. The majority of Windows users get it pre-bundled with their hardware, very few consciously choose Windows. In many ways, Windows chooses the user and not the other way around.

Just like Microsoft, Google is a one-trick pony. Microsoft has Windows and Office. Google has its ad business and search. Both use their monopoly in one market to dominate another. Just like Microsoft, Google exists to stifle innovation. If it were any other company, Android would have bankrupted it, just as the XBox or Zune or Bing would have bankrupted Microsoft. Google is using its ad revenue to undercut other companies and kill them, the same way Microsoft uses its Windows and Office money to subsidize its failures just to get into a market, undercut them by offering a lesser quality product for near-free and crush their competitor and create yet another monopoly. That's exactly what Google is doing with Android. Google earns nothing from Android, they give it away to destroy others. The OEMs won't develop their own OS since they can get Android for free and those who dare to go against Google's will and develop their own will find themselves locked out of the market, unable to compete. By offering their lesser quality OS for near-free, they will kill all the good quality OSes that exist or might emerge. This was Google's goal.

Unfortunately for Google this isn't working as good as they hoped. Microsoft is collecting royalties on Android, rendering Android costly for hardware vendors. Also companies like Baidu and Amazon are using Android to compete against Google and cutting Google off of any profits that they might make. Android might stifle innovation as Google intended but it will also compete against itself, leaving Google with an expensive endeavor that can never be truly monetized and if we are lucky Google will slowly distance itself away from it.

Put a Fork in it

Flurry: Is it Game Over for Nintendo DS and Sony PSP?

Flash on Mobile is Dead

To all the Adobe shills and the Android retards where is your Flash now?


Steve Jobs famously opposed allowing Flash on iOS and wrote Thoughts on Flash to explain the position taken by Apple, which any sane person that desires an open web would share. It was only a matter of time before Flash dies but at one moment when scumbag Google endorse Flash in an unethical matter typical of a drug pusher, it seemed as if Flash would be forced upon the web for many years to come. Now however it is officially dead on mobile devices.


I applaud Microsoft for helping to kill Flash. Flash was dying but Microsoft's decision not to allow it on WP7 and W8MUI pretty much delivered the final blow.
Microsoft could have been a bunch of scumbags like Google and tried to push Flash but for once they did the honorable thing and copied Apple's position.

Thank you Microsoft.

Android is a Threat for The Future of Mobile OSes

Android made software irrelevant. Google is giving away for free what costs millions to develop, effectively destroying the software market. Just look at the Android marketplace, thousands of ad-supported apps. Software has no value and thus no one is willing to pay for it. Very depressing for who wants to work in the software industry. No one talks about the quality of software anymore, which misses the point. Hardware is nothing without software, and Google is effectively destroying that. I won't assume malice. I won't accuse Google of intentionally trying to destroy the software industry and remove all value from software and forcing the smartphone market into a downward spiral. Google is oblivious to what they are doing. They are high on themselves. Simply, they are a bunch of morons.


Android succeeded in killing interest in mobile OS development, just as Windows did with desktop OS in the 1990s. So, in other words, the long term effect of Android's success will be sending the mobile OS world to another dark age, killing innovation and discouraging new competitors from entering the mobile OS market. Just this year, due to Android, we saw the demise of Symbian and MeeGo and even though HP won't admit it, webOS seems to be the next victim. What Android succeeded in doing is allowing lazy and non-innovative companies to enter the market and kill competition with their cheap handsets. Hardware is cheap, that is why it is always on sale, but developing an outstanding OS that takes effort. What we are witnessing right now is a repeat of the late 80s and early 90s. Major OS names fading into oblivion.

XP in the age of 8?

Next year Microsoft will be releasing Windows 8, which despite the name isn't the 8th release of Windows. Windows 8 is a great leap forward and the first true remigration of Windows since Windows NT3.1, the first release of Windows NT. Windows NT3.1 was the first release of Windows to run on Alpha and MIPS as well as x86. But one thing could still hold back Microsoft's ambitions and that's Windows XP.

Four years after Vista, two years after Windows 7 and still, Windows XP the 10 year-old Windows is used by the majority (~40%) of Windows users, more than any other OS version. This was never the case before, when XP was released a very few were using Windows 3.x or older. In the 90s Microsoft was pushing a new release every 2 years or so, and this way they got people to update often, similar to what Apple does with Mac OS X today. A rapid release cycle where running a 5 year-old release means you are 2 releases behind.

So the domination of XP is Microsoft's fault. Microsoft's inability to get the next release of Windows on time in 2004, pushing it back by 3 years to 2007, resulted not only in a huge install base of XP that can be expensive to upgrade, but also in the lack of willingness to upgrade. Microsoft also botched the launch of Vista with a confusing upgrade policy. Whether Vista was good or not isn't the point, what matters here is Microsoft failed to migrate users to the new OS and Windows 7 while better received still is at about 30% usage share.

For how much longer will we be stuck by an OS designed in the late 90s? How much innovation was wasted because a lot feel they need to tend for the about 40% who still use outdated technology? Windows XP is the Internet Explorer 6 of OSes.

PSP near death, DS threatened

Quote:

Originally Posted by Arstechnica Flurry says that 40 percent of all consumer app sessions on iOS and Android were spent on games throughout 2010. As a result, the two platforms generated $800 million in game revenues—an increase from $500 million in 2009. It's important to note, however, that Flurry only tracked iOS game sales in 2009—the iPad and other tablets didn't exist during that time, nor did much of the Android gaming market. Still, even with Android in the mix, the company said that the "significant" majority of the combined gaming revenues were generated by iPhone games, so it's possible that Android and tablets are still only beginning to contribute to that slice of the pie. (Flurry also does not count PC games in its numbers—only console, portables, and iOS/Android.)

iOS, Android gobbling Nintendo's share of portable game market

Things to note:

1. Compared to 2008 - 2009, the biggest loser this time was the DS, the reasons are many but chief among them is the nearing launch of the 3DS.
2. The PSP only lost 2 percent, the remaining 9% is the PSP defense force and the PSP will probably stay at 9% until the launch of NGP.

iPad haters flopped?

The Disappointment of the MacBook Pro Update

All the way back in late 2010, the MacBook Air was launched as the next generation of MacBooks, fast forward to last month, and there is nothing MacBook Air-inspired in the updated MacBook Pro lineup. Where is the instant on, long lasting battery, and MacBook Air-like standard SSD storage? Maybe next year.

Sony is Evil

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The Next MacBook Air

Last month Apple brought an all new MacBook Air which they dubbed as a marriage of iPad and MacBook, and in 1H 2011 Apple will bring a new iPad, most probably bringing much wanted features like FaceTime camera and improved hardware specs. After playing around with the 11-inch MacBook Air I realized it is a crossover product and could cut into the iPad's market.
The current top of line iPad is a 64GB, WiFi+3G iOS tablet priced at $829. The current low end MacBook Air is a 64GB, 11-inch, ultra-thin MacBook priced at $999.
There is a bit of overlap between the two. For an extra $170 you gain a full sized keyboard, larger screen, more  processing power and Mac OS X, but you'll lose ease-of-use, portability, 3G connectivity and battery life. Apple products rarely overlap, add an Apple Bluetooth keyboard to the iPad and you are almost in MacBook Air territory, as an iPad owner I never bothered with an external keyboard. It might seem that the iPad is threatened by the MacBook Air, but it actually it is going to be the other way around.
It is easy to see how the iPad can run over the MacBook Air especially with the release of iOS 5 in the summer of next year -if Apple follows it's usual iOS update cycle- adding more necessary features. Hopefully, features like over the air updates are in the pipeline, this will enable even more people to use it without need of tethering it to a minicomputer or laptop. Apple could do it the other way around and bring the MacBook Air closer to iPad level in portability and battery life, but that would take longer for battery technology and ULV processors to make a thinner, lighter and longer lasting MacBook Air possible.
This is where Cortex A15 comes in. It will bridge the performance gap, allow Apple to grow iOS into a more featured OS. As an iPad owner my biggest complain remains Safari's insistence to reload all pages instead of storing them in cache, mainly due to being limited to 256MB of main memory. The Cortex A15 won't happen for 2011, though an internals update is certain and will go a long way into making the iPad a more capable multitasker.
Unlike the MacBook Air, the iPad has a clear upgrade path, as it is not trapped in the struggle between Intel and nVidia. It is safe to assume that updates for the MacBook Air will be few and far between, before it is obsoleted by a mature iPad.

6th gen iPod nano a flop?

Apparently so. There aren't any sales figures yet, but the reaction has been tepid at best, hostile at times and judging by hourly sales figures from sites that provide such info, the new nano isn't doing so well..
One major failure of the nano is the loss of video playback, it was a big deal when Apple brought it into the 3rd gen nano in 2007, and judging by how some of my friends use their nano, it is an indispensable feature. To others was the loss of the click-wheel. So, here is how I believe Apple can fix the nano:

1. Volume +/-, Forward, Rewind and Pause/Play buttons.
2. Drop the price
3. Market it as the iPod shuffle
4. Bring back the 5th gen iPod nano with double the storage capacity