Do you want mustard with that smart phone?

Monday February 21, 2011 – Myra Moore

Why licensing smart phone IP is a lot like making sausage

Watching the sausage being made may be unappetizing but if you plan to sell it to your customers you’d better understand how to get all the ingredients in the casing without it falling apart.

The smart phone and its cousin the tablet have more standards-based and proprietary technology stuffed between their hard casings than any gadgets ever made. Open standards alone make up a dizzying list of technologies that go into the devices -- Wi-Fi, Bluetooth, GSM, MP3, JPEG, AVC/H.264, just to name a few. Proprietary technology lists are just as long. Acquiring the rights to use these technologies is complicated and often times contentious given the red-hot patent litigation currently in play (a mash up of companies like Apple, Nokia, Rim, Microsoft, Motorola, HTC are all in various stages of litigation amongst themselves).

This situation got the spotlight at a panel I moderated February 10 in San Jose at a Licensing Executives Society (LES) conference that was focused on high-tech industries. Gathered together were representatives from Rim, Nokia, Garmin, Intel, the Open Patent Alliance (OPA), and outside counsel involved in some of the aforementioned litigation. Clashing corporate/IP cultures, late entrants by device makers, emergence of non-practicing entities (NPEs), and a thicket of technology licensors from individual companies and patent pools were pegged as contributors to the messy IP landscape in today’s hottest consumer technology product category.

Now that most of the obvious suppliers have jumped into the smart phone and tablet markets we should anticipate a leveling off of new litigation. Right? Apparently not, according to our panel of experts. The lawyers and the licensing folks were in agreement: It is going to get worse before it gets better. Why? There are hundreds of patented technologies in each one of these devices, the stakes are extremely high as all the players (and there are many) jockey for market share position, and the demand for innovation for user interfaces, software, batteries and displays promises to keep the Intellectual Property (IP) folks busy for years to come.

When asked how the confusion and contention regarding licensing all the IP that goes into these convergence devices can be mitigated, the panelists offered a seemingly simple answer: Cross licensing. That should be easy. Right?

When is a Phone Not a Phone?

Monday February 14, 2011 – Stewart Wolpin

When is a phone not a phone? When is a TV not a TV? When is a camcorder not a camcorder?

It depends. Now that the rate at which technologies are converging in single devices has dramatically increased, the answer is a moving target. It may seem trivial, but, in fact, it’s important. As a DTC analyst, I see every day how this situation puts the forecasting and analyzing of markets on its head.

Without thoughtful classification and measurement of product sales, imports, and exports, analyzing these markets is an exercise in chaos.

Without proper classification it’s difficult for retailers to merchandize and promote products and services. Manufacturer product planners must clearly understand the most compelling functions of a converged device to understand how to make it and how to market it. And, it’s nearly impossible to measure supplier market share if we can’t find effective gadget taxonomy.

What's a tablet?

Take tablet PCs. Please (sorry, couldn't resist). Is an iPad a PC? If so, what kind? A laptop? A notebook? A netbook? Gadget analysts are falling over themselves trying to figure out if iPad is a "PC."

In the next few months, there's going to be a flood of new tablets in varying sizes running various operating systems. At what point does what one company calls a "tablet" does everyone else call a mere multimedia device? After all, no one calls an iPod Touch, which is in many ways a smaller version of an iPad, a "PC." Is a 5-inch tablet a "PC"? A 7-inch tablet? Where's the line between "media player" and "tablet" and where's the line – if there is one – between "tablet" and "PC"?

Or, is it the OS? iPod Touch and iPad run slightly different versions of Apple iOS. So, therefore, are tablets running anything less than Android 3.0 not a tablet and, therefore, not a PC? What about the new HP TouchPad which runs webOS or future tablets running the Windows Mobile 7 OS, both cellphone operating systems?

Then there is a particular professional interest of mine – digital imaging. The vast majority of models in each of the four major camera categories – point-and-shoot, D-SLRs, full-size camcorders and Flip-style pocket camcorders – all now shoot multi-megapixel stills and 1920 x 1080 video. Sanyo has been calling their digital imaging wares "Dual Cameras" for the last year or so, refusing by design and nomenclature to identify if their products are either or both "camcorder" or "digital camera" or some new catch-all category. How long will the term "camcorder" even be relevant?

And, what’s a smartphone?

And take the smartphone, please (sorry – I've got Henny Youngman on the brain). The iPhone 4, the Droids, the Samsung Galaxy S, et al, all have more in common with the Flip camcorder than with cheap flip phones, and talking on a phone long ago stopped being a cellphone's primary function. Sprint's Kyocera-made Echo has two screens that can be clicked together to form a single 4.7-inch square display, which is referred to as "tablet mode." So do we start counting cellphones as cameras? Portable media devices? Tablets?

And at a certain point, digital imaging makers are going to figure out how to put a Kindle-like Whispernet on their wares to enable us to immediately send photos like we can on a smartphone. How do we then classify this wireless-capable camera?

Answering those questions is a moving target, but they’re questions that must constantly be analyzed. How can a company move forward in R&D, planning and product design without knowing what they’re making and how to market it?

P.S. Friday, February 11, was Thomas Edison's birthday. Given how dominated our world is by technology, and given Edison's foundational role in nearly every device and technology we use, either directly, indirectly or even just by inspiration, I'd love to see some national or international recognition of his birthday to celebrate all the inventors, scientists and engineers who have brought us our modern technological society.

The Long Road to a la Carte

Monday, February 7, 2011

The recent announcement from Roku that it had signed its first live cable TV channel, WealthTV takes us back to circa 2005-2007 when U.S. pay TV a la carte programming packages were hotly debated in the industry and in Washington.

Back then the concept of getting TV shows and movies off the Internet and directly displaying them on the living room HDTV was only understood by a handful of IP jockeys and a few Silicon Valley VCs. But the implied promise of one of its by products, the ability to build your own TV package by purchasing only programs/channels you really want, is immediately grasped by anyone who’s ever subscribed to pay TV.

It’s such a compelling idea that former Bush administration FCC Commissioner Kevin Martin encouraged the U.S. Congress to pressure cable/satellite/telco companies to offer a la carte packages. In fact, the Family and Consumer Choice Act of 2007, which would have allowed some cherry picking inside an expanded basic cable package, was introduced in the U.S. House of Representatives in the summer of 2007. It didn’t get very far and is now only a faint memory.

For many reasons – some obvious and others best batted about in another post – it’s highly unlikely that the U.S. Congress will be taking up the pay TV a la carte charge anytime soon. Any strides there are likely to come from the private sector and in its own sweet, messy time.

It’s tempting to see a deal between an Internet TV provider and a cable TV network as a first step toward a programming nirvana where consumers can cherry-pick their own TV packages. A small pay network like WealthTV doesn’t have much to lose by experimenting with Roku. The success (or not) of the venture probably won’t tell us much about whether we’re heading toward a pay TV future where consumers can drop hand-picked niche program streams into a basket that also includes ESPN and the Lifetime picked from a more choice part of the orchard.

But, for now, the seed is planted.

Pocketcams: Between a rock and a hard place

Monday January 31, 2011 – Stewart Wolpin

Quick quiz: What product offers 1080p video recording and high-megapixel digital still snapping for less than $200?

If you guessed a pocket camcorder such as the Kodak Sport or a Sony Bloggie or a JVC Picsio, you'd be right. But so do several new digital cameras. And so do several Android smartphones (and I suspect in the annual iPhone update, iPhone 5 or 4G – or both – in June).

Uneasy lies the head that wears a crown, in this case pocketcams, which assumed the total overall sales crown from standard camcorders last year.

Compared to pocketcams, digital cameras with 1080p video recording offer superior still picture taking capabilites (obvious), better lenses (really obvious) and better optical image stabilization (not so obvious but really important to staunch the nausea induced when viewing unstabilized handheld footage is shown on a big screen.

High-megapixel/1080p smart phones' advantages over pocketcams also are really obvious – a user can instantly send photos and footage to friends or post to social networking sites, or will be able to send HD video footage once 4G networks become more prevalent. Oh, and smartphones make phone calls (as long as they're not on AT&T, he said sarcastically), too, and surf the Web, perform many app functions – they even open beer bottles.

I see a king quivering.

A camcorder war on two fronts

With threats to pocketcams' crown coming from two vastly better-equipped directions, the new camcorder king's reign may be short. Consumers might be enamored with Flip and its ilk for another year or so, but soon consumers will realize their digital camera and/or smartphones do everything a Flip can do, and much much more.

At CES, I queried a couple of pocketcam makers about this double threat, expecting some grandiose marketing pronouncements designed to boost both expectations and their own confidence in the future – and got mostly shoulder shrugs. They're aware of the double-whammy facing them and seem resigned to their fate.

That's not entirely accurate, actually. A couple of pocketcam makers are resorting to niche categories with new products, such as waterproof pocket cams – no waterproof digital camera at any price includes 1080p video recording and what'd be the point of a submersible cellphone?

And then there is 3D. Several pocketcam makers have or will sell sub-$300 3D pocketcams this year. (On a side note, I got a lot of double-talk hems and haws when I tried to discern the difference between $300 3D camcorders and $1,500-$2,000 3D models from Panasonic, Sony and JVC – that's one bizarre price differential. But I digress).

But fewer than 2 million suckers…er, I mean, consumers (slight error – I'm been reading a lot of Roger Ebert's 3D criticism of late) have bought 3D HDTVs. That's a really tiny constituency at which to aim a product.

No, pocketcam makers are going to have to come up with something/anything radical if they want to continue to rule the camcorder kingdom.

Stewart is Digital Tech Consulting's Senior Analyst.