Grab your popcorn and take a seat. We might have another Silicon Valley tech feud on our hands. This time it’s Tesla vs. Apple. There have been rumors circulating for a long time that Apple is working on a self-driving car. After reports that Apple was poaching key automotive talents from Tesla, Musk told the German business newspaper Handelsblatt: “If you don’t make it at Tesla, you go work at Apple.” The Tesla CEO went on to say “They have hired people we’ve fired. ”We always jokingly call Apple the ‘Tesla graveyard.”’ When asked whether or not he took Apple seriously as a competitor in the automotive market, Musk replied, laughing: “Did you ever take a look at the Apple Watch?” He then chuckled.
This is a classic Goliath vs. David scenario. Some believe Musk is simply jealous, since the Apple Watch made more profit in three months than Tesla will in 2015. Musk has already taken a step back, as he tweeted that he doesn’t hate Apple and that he thinks it’s a great company with a lot of talented people. He’s still not convinced about the Apple Watch, as he said ”the functionality isn’t compelling yet, by version 3, it will be.” The Apple watch will bring in $4.4 billion in revenue this year. This is not a grand number, since Apple will be good for $233 billion in revenue in total this year. However comparing it to Tesla, who’s expected to achieve around $5.4 billion in revenue, it is pretty big. Especially when looking at the profit margins on the Apple watch.
Both companies have a stellar reputations in the tech space. Yet, I do get the feeling that Musk is taking Apple lightly. He said: ”Cars are very complex compared to phones or smartwatches.” ”You can’t just go to a supplier like Foxconn and say: Build me a car.” Although he has a point, one should never count Apple out. Over the past decade or so, Apple has been very successful at fundamentally reshaping the personal-computing industry.
You’d think that the car industry is very different from the personal computing market (notebooks and phones), however Tesla’s processor supplier NVIDIA stated earlier that cars are basically supercomputers that require ”parallel processing, extensive software based architectures, and deep learning technology.” Then all of a sudden it makes a lot of sense that Apple wants a piece of the automotive market. Looking at Apple’s track record of building game changing computing devices, one should not underestimate them.
Apple has not yet responded to Musk’s comments. If Steve Jobs were still CEO at Apple this could have been very different, as he was never one to mince words. He used to be feared and famous for his tech-feuds. Jobs vs. Adobe Flash, Jobs vs. RIM, Jobs vs. John Sculley, Steve Jobs vs. IBM and of course Jobs vs. Microsoft/Bill Gates, to name a few. Apple does not shy away from taking off its gloves, as can be seen during the more recent feud between Apple and Samsung, filled with all kinds of legal assault.
But let’s not get too carried away. After all, Musk has already apologised in his own way and Apple is still far away from becoming a direct competitor of Tesla. Even if they do clash, the car market is not a clear winner takes all market, so there should be room for Apple and Tesla to coexist. Right now, Tesla has other things to worry about, as its stock has dropped 11.3% in the last three months.
If you liked this blogpost and want to read more about tech feuds, check out this link: The 10 Best Tech Rivalries of All Time.
Is Apple trying to slowly kill Google? Since they are fierce rival this scenario does make sense, but how would ad-blockers play a part in that strategy?
Let’s take a step back.
Google in 2014 announced total revenues of $66 billion (Investor.google.com, 2015). Can you guess what portion of the $66 billion comes from advertisement? Whatever you guessed is probably wrong, because the vast majority of Google’s revenues, $59 billion in fact, comes from advertisement. Specifically in 2014 68.3 percent of Google’s revenue came from advertising through Google sites and 21.2 percent through advertising via Google network sites.
If we focus even further we can observe that for 2014 Google had roughly $12 billion ($11.8 billion) in mobile search revenue, almost 20 percent of its total revenues. Of that $12 billion roughly $8.8 billion was attributed to iOS devices. Taking into account that half of the search volume for Google comes from mobile devices, we can infer that in the future that percentage Google makes from mobile devices is only going to grow (Sterling, 2015).
Distribution of Google’s revenues from 2001 to 2014, by source
A permanent threat of Google’s revenue is ad-blockers. Ad blockers are separate programs or add-ons for browsers that remove or filter advertising content in a webpage, or an application. There are ad-blockers available for all operating systems (Windows, Linux, OSX), mobile platforms (Android, iOS, Windows) and browsers including Firefox, Chrome and recently Safari. The obvious benefits of using an ad-blocking tool for the user is the faster, lighter (in terms of data) and cleaner portrayal of websites and also a frustrating-free navigation experience without annoying pop-ups or videos loading without your permission. Another important benefit of using ad-blocking software is the increased privacy since ad platforms cannot track your personal data. Furthermore security issues can be a reason of using ad-blockers, since dangerous malware is sometimes hidden in advertisements (Navaraj, 2014).
Despite the obvious benefits mentioned above, ad-blockers are a threat to content providers (such as websites, publishers and video producers), which depend on advertising as their main source of income either every time ad is shown to a visitor, or every time an ad is clicked, but also to advertising providers such as Google, which depend on users viewing or clicking their ads on behalf of their advertisers.
There is a growing trend in the use of ad-blocking software. Globally the number of active users surfing the web behind an ad-blocking software in 2009 was 21 million, but has quickly grown to 121 million in 2014.
In 2015 the adoption rate of ad blockers globally increased by 41% in 2014 amounting to 200 million users and is expected to grow even more (Blog.pagefair.com, 2015). So in the last 6 years the users of ad-blockers has been multiplied tenfold. The amount of lost revenue due to ad-blockers is beyond imagination. It is estimated to be $41.4 billion by 2016. That has dare consequences for publishers and content providers in general as well as provider of ads, mainly Google.
You might wonder ok, what does Apple has to do with Google’s revenue model, the wide spread of ad-blockers and how does that involve Apple trying to kill Google?
Well recently Apple introduced a feature on its mobile devices which allowed the installation of ad blockers.
Can you see it now?
Apple is indirectly attacking Google’s revenue model (which is based on advertisement) by enabling iOS users to filter and block all advertisement from Google. That is a war and has huge consequences for Google and publishers that depend on revenues from ads on their websites that now can be avoided.
The question now is how Google is going to respond and how publisher are going to survive without their main source of revenue.
Student number: 401028
Blog.pagefair.com, (2015). The 2015 Ad Blocking Report | Inside PageFair. [online] Available at: http://blog.pagefair.com/2015/ad-blocking-report/ [Accessed 10 Oct. 2015].
Grossman, L. (2015). The Great Ad-Blocker Battle. [online] TIME.com. Available at: http://time.com/4065962/our-attention-is-just-a-pawn-in-the-great-game-of-silicon-valley/ [Accessed 12 Oct. 2015].
Investor.google.com, (2015). 2014 Financial Tables – Investor Relations – Google. [online] Available at: https://investor.google.com/financial/2014/tables.html [Accessed 12 Oct. 2015].
Investor.google.com, (2015). Google Inc. Announces Second Quarter 2015 Results – Investor Relations – Google. [online] Available at: https://investor.google.com/earnings/2015/Q2_google_earnings.html [Accessed 12 Oct. 2015].
Navaraj, M. (2014). The Wild Wild Web: YouTube ads serving malware. [online] Bromium Labs. Available at: http://labs.bromium.com/2014/02/21/the-wild-wild-web-youtube-ads-serving-malware/ [Accessed 12 Oct. 2015].
Patel, N. (2015). Welcome to hell: Apple vs. Google vs. Facebook and the slow death of the web. [online] The Verge. Available at: http://www.theverge.com/2015/9/17/9338963/welcome-to-hell-apple-vs-google-vs-facebook-and-the-slow-death-of-the-web [Accessed 12 Oct. 2015].
Sterling, G. (2015). Report: Google Had $12 Billion In Mobile Search Revenue, 75 Percent From iOS. [online] Marketing Land. Available at: http://marketingland.com/report-google-had-12-billion-in-mobile-search-revenue-75-percent-from-ios-130248 [Accessed 12 Oct. 2015].
Whether you are on Facebook, playing a game or using another application, you will always get bothered by advertisements on your iPhone. However, Apple has allowed a new ad block application into the iTunes App store, known as Been Choice. This app claims to block advertisements in mobile applications, and also in native mobile apps such as Facebook.
Been Choice offers a combination of a content blocker for Safari and a VPN service. Through the content blocker users can enable ad blockers to eliminate ads from Safari during web browsing sessions if iPhone users have iOS 9. When using the VPN service for the first time, you need to install a profile on your device. When the VPN is enabled, your traffic is then routed through Been Choice’s servers where it performs deep packet inspection on the content. After this, specific content can be removed through pattern matching. This ability enables Been Choice to block advertisements in Facebook, Pinterest, Yahoo, New York Times apps and more. Blocking ads in all these applications could be very detrimental for many mobile application developers, because the primary way of how they make money is disrupted. Apple may do a favor to consumers by supporting this ad-blocking technology in iOS 9, however, this goes against Apple own interest since advertisements will also be blocked in their own news application. (Twitter is not blocked because they use end-to-end encryption. This makes it t impossible to block ad traffic without blocking non-ad traffic.) (Perez, 2015)
Thus, this app means to cater to thiose who don’t want ads anywhere, but on the other hand, they need to reach those who are willing to sell their data.
Do you trust this application? And are you willing to sell you data in exchange for no advertisements anymore on your mobile phone?
Perez, S (2015) Apple Approves An App That Blocks Ads In Native Apps, Including Apple News, http://techcrunch.com/2015/10/06/apple-approves-an-app-that-blocks-ads-in-native-apps-including-apple-news, 7 October 2015
Recently there were increased news articles about AI: Artificial Intelligence. Some very smart people were concerned about the progress made in the field of advanced machine learning. Among them were serial Entrepreneur Elon Musk, the famous researcher Steven Hawkins and legendary philanthropist Bill Gates. All of them signed an open letter expressing their concern about the future of AI. Cause for the signage was a video showing Google owned company Boston Dynamics recording a trial run of their human robot ‘Atlas’ running through the woods among other recent advances in advanced machine learning.
What is advanced machine learning?
The field of machine learning in computer science has been there for a while. Starting during the second world war, the first attempts to teach computer to learn and being human were made. The recent movie around pioneer Alan Turing shows the origins of this scientific research field. Until today the Turing Test is still applied to evaluate if a computer is categorized as intelligent.
During the 80ies and early 90ies further attempts were made to teach computers to behave human. Early solutions weren’t practical caused by the limited processing power during that time. A lot of time passed since then.
So what exactly is machine learning? It’s basically to teach a computer to make sense of data. To teach him to recognize patterns in input values and gain insights from the process. Simple machine learning can be a regression analysis or simple classification of data depending on a single value pair into different categories. Advanced machine learning, of which deep learning is a part of, applies multiple analysis layers in analyzing big data sets. The first layer of an algorithm look only at certain parts of the data and then deliver the output value to an analysis layer further up the hierarchy conducting more abstract calculations with the input from the lower layer and itself delivering values to an even more abstract layer of algorithms. This structure allows the modeling of the human brain, imitating the network of neurons in the brain with many (trillions) of synapses.
Tapping into the huge potential
Today many layers are applied to solve difficult data analysis problems, therefore the name deep learning. With this methodology it is possible to teach a computer to analyze pictures, handwriting, speech, maps or even videos. In the future all applications that seem to be ‘magical’ will be the result of some kind of deep learning. The application are many: Categorization of images, indexation of unlabelled data, analysis of maps, using big data of many sources to refine and improve prediction models and so forth.
Facebook, Google, IBM and many start-ups today already apply deep learning technologies to gain an edge solve difficult problems. Until today there is no computer who can itself program something that can program. But that day will come, its just a matter of time.
Is it dangerous? Maybe. But it can also do much good if applied correctly.
If you’re interested in deep learning, here are some very interesting companies applying this cutting edge technology:
Have you heard about deep learning before? What do you think: Is it the future? Are you afraid of AI? I’m interested what you think so please leave a comment!
There are thousands of apps around. For multiple platforms (iOS or Android) or in multiple browser. You probably use them on many devices: Your phone, tablet or laptop. But all those applications have very limited functionality on their own. Only by communicating to their user, connecting them between each other and swapping all kinds of information they become powerful.
And that’s where APIs come in. API stands for Application Programming Interface and describes the information and rules software programs interact with each other.
The traditional way of development focusing on web frameworks (e.g. Microsoft .NET, Ruby on Rails, PHP) can require costly integration into other software when not set up properly. Adaption to special needs can easily amount to a project in middle five figures.
An API centric piece of software executes most or all functionality through API calls. So why is this important?
With API-Centric Design the core function of a software (for example the Twitter Stream of new Tweets) is build separately from the way a user accesses it (in our example Twitter can be accessed through a browser, an iOS app from an iPhone, iPad, Android devices, aso.). There is only one core product running in the background and then many different customized front-end ways of accessing the core product running in the back-end. All the communication between those parts happens over? You guessed it: APIs!
No more changing and tweaking the core product because on a windows phone was a display error. You just handle that over the windows phone front-end client.
Bah…. that was a lot of techie talk. So what?! Well that brings us to our next big thing:
The Internet of Things
There are estimates that until 2020 there will be more than 50billion connected devices. That’s a lot! And it will shift who and what communicates over the internet. Today people communicate with people or people communicate with machines and systems. But in the age of the internet of things systems mostly communicate directly with systems. And they don’t care about pretty graphical interfaces on some gadget with touch screen. For those systems to work you need solid APIs connecting many back-ends fast and in a reliable way. And what would be more suitable for this task than software created through API Centered Design?
Oracle recently released an API Management Tool. So did IBM and Intel. These big corporations undertake those steps to be well prepared for what is about to come: The internet of things. It’s gonna be a paradigm shift.
But Where is the Money?
APIs aren’t new. And there are a lots of them. In the Programmable Web Database are more than 14’000 APIs registered. But with the emergence of mobile and the internet of things, they’re in the spotlight again. API centered software enables micro services that fit a specific need an solve a well detailed problem. Other programs can build upon existing APIs using their functionality to expand and build their own. This layer structure can help to automate tedious tasks by integrating and arranging the right APIs. There are many offerings already that allow fast creation of API-based back-ends (e.g. Treeline or Stamplay). APIs therefore build a solid foundation others can build upon. Google does that for a while already and offers a ton of APIs for others to use (e.g. Google Maps). But if you and especially your users call them regularly you have to pay for them. And they’re not cheap:
This example brings us to our first business model with APIs: If you’re providing some service that is of value to others, you can charge for every time a user or program is calling your API and uses its functionality. Even if it’s just a couple cents per call, if your API gets used thousand times a day, that’s steady income.
Another business case is to offer your API for free and animate other developers to build upon your existing API. Through referrals from that software you then generate additional sales. Uber does this with success: By offering their API for free they animate developers to build upon their core product. If someone signs up for Uber through another program that uses the Uber API, they pay the developer who build the new product a commission of $5-10.
There will be many more business models emerging around API. Especially connected to the Internet of Things. The paradigm shift opens up new business opportunity ready to exploit.
What business models including APIs do you see? I’m very interested in reading about them, so please leave a comment!
On 9 September, Tim Cook (CEO Apple) says: ‘the future of television is Apps‘ (Apple, 2015). Not everyone will agree, but it is almost certain that this industry is on the brink of a huge transformation. The only challenge left for television is the input problem, where people primarily pay for traditional, linear, pay-television services and besides that own a secondary device (e.g. DVD player, Apple TV) for additional content (Yarow, 2015). However, it is unclear if or when the ‘secondary’ service can be a substitute for the conservative primary services. Some predictions state that these new devices (e.g. Apple TV) could turn the television into a dumb piece of glass (Yarow, 2015), since many companies are making a bet that the largest screen in our homes is going to become an operating system like the ones that power our computers and phones (Hempel, 2011).
Many things have changed since devices are connected to the Internet. Millions of independent developers have got the chance to create great applications for multiple devices. The television is next and many start-ups will look for opportunities to offer video experience via applications on products such as the Apple TV (Yarow, 2015). Besides that big companies are forced to adjust their content as well. For example, Jeff Bewkes (CEO of Time Warner) spoke about the company’s plan to move its vast catalogue of movies and TV shows onto the Web (Lyon, 2011). Besides that, products like the Apple TV provide opportunities for all kinds of businesses (e.g. Netflix, HBO) to broadcast their content in a new way on the biggest screen in the house.
To convince the consumer, the only way to win it digital is to keep it simple (Lyon, 2011). Then if the new platform works, the prediction is that the traditional, linear, pay-television services will become secondary, because people will start to wonder why they are wasting money on this conservative service (Yarow, 2015). To make this transformation from traditional television to the Internet happen, some things need to be taken into consideration. Especially content expectancy, social influence, facilitating conditions, hedonic motivation and habit have significant effects on behavioral intention on (mobile) television (Wong et al., 2014). Additionally, Wong et al. (2014) claims that gender and other demographics tend to have a moderating effect on this television behavior. The question remains if online television is better in serving the needs of users than the traditional television service. And will suppliers be able to adapt new technologies to capture value? Research implies that this adaption is needed. For example, the viewer engagement actually is greater when social media is involved (Pynta et al., 2014), and new social possibilities come along with Internet on television.
From the supplier side, the web has the power to make media distribution cheaper and more efficient (Hempel, 2011). On the other hand, the current business model heavily relies on the revenue they earn from licensing. In each country there are able to capture value since it is legally possible to capture value in each geographic region. The web is breaking this business model. Ad rates are much lower on the Internet. Networks cannot collect their fees. Cable companies fear losing our business. Someone has to pay for all that bandwidth we are using to stream our shows (Hempel, 2011). This means that the suppliers must look for new opportunities to generate their revenue. The Internet on television not only brings opportunities, but also big challenges for the current participants, if they want to stay alive.
Vincent Laduc (417658vl)
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Hempel, J., 2011. What the hell is going on with TV?. [Online] Available at: http://fortune.com/2011/01/03/what-the-hell-is-going-on-with-tv/ [Accessed 1 October 2015].
Lyon, D.W., 2011. JEFF BEWKES AND THE APPLE TRAP. B-School Connection.
Pynta, P. et al., 2014. The power of social television: Can social media build viewer engagement? A new approach to brain imaging of viewer immersion. Journal of Advertising Research, pp.71-80.
Wong, C.H., Tan, G.W.H., Loke, S.P. & Ooi, K.B., 2014. Mobile TV: A new form of entertainment? Industrial Management and Data Systems, 5 August. pp.1050-67.
Yarow, J., 2015. The new Apple TV will blow up the TV industry. [Online] Available at: http://uk.businessinsider.com/the-new-apple-tv-is-going-to-blow-up-the-tv-industry-2015-9?r=US&IR=T [Accessed 1 October 2015].
On 9 September 2015 Apple presented the iPhone 6S, where they claim: ‘The only thing that has changed is everything’ (Apple, 2015). On the other hand, Samsung claims that ’The next big thing is (already) here’ with their new smartphones (Samsung, 2015). Since I need to buy a new phone very soon, I am starting to doubt how different these products actually are.
The acknowledgment must be made that these companies do not make these phones by themselves. For example, Apple has over 200 suppliers to create their products (Apple Inc., 2015). Besides that Samsung aims to strengthen its position as worldwide computer chip manufacturer (ANP, 2015), which implies that they supply other firms to make their electronic devices (e.g. iPhones).
According to Kaufman et al. (2010) these business networks emerge because customers are more informed and therefore increasingly demanding products and services tailored to their specific needs. This results in business networks, which are able to break up their value chain into independent modules (Kauffman et al., 2010) and thereby are able to add more value to the final product (Ketchen Jr. et al., 2004). One of the reasons to participate in a business network is that it accomplishes more as a whole than the value it can capture by its individual parts (Kauffman et al., 2010). Another reason, especially in this technology driven industry, is that business networks tend to be more innovative (Möller & Rajala, 2007) (Gnyawali & Park, 2011). Therefore all these firms help to grow their entire business network (Gnyawali & Park, 2011), to motive more external parties to join the network (Gallaugher, 2014) and further improve their competitive advantage with their final product (Ketchen Jr. et al., 2004).
The uniqueness of Apple’s business network is that a direct competitor (e.g. Samsung) is a supplier for their products (e.g. iPhone). Scientific literature names this phenomenon co-opetion, where end-product competitors are contributing in each other’s value chain. As aforementioned a reason to embrace co-opetion is more innovation (Gnyawali & Park, 2011), but this still does not clarify why for example Samsung might cannibalize its own products. An explanation is that co-opetition is only beneficial when businesses are still able to differentiate with their value adding activities (Ketchen Jr. et al., 2004). Therefore if end-product competition is growing, businesses are trying to further protect their differentiating activities (Ritala & Hurmelinna-Laukkanen, 2009). A good example from Apple and Samsung are the patent wars they are having for the past few years. They are blaming each other for copying each other innovations to protect their differentiating activities. However, co-opetition will still be beneficial for both parties, since another observance states that it results in less vertical integration and more diversification (Gnyawali & Park, 2011). For example, this ensures that Samsung can further grow as a chip manufacturer without the interference of Apple. Additionally, the suppliers of companies such as Apple benefit from the demand they generate (Zhang & Frazier, 2011). Therefore the question about co-opetition should be: do we as a business want to capture value from competitors or establish a greater competitive advantage? (Park et al., 2013)
To be honest I really admire the research done about this phenomenon named co-opetition. However I still can’t figure out my personal issue. Therefore I would like to ask you: what phone should I buy? Since I can’t see the difference between the products of Apple and Samsung anymore after this study.
Vincent Laduc (417658vl)
Anderson, A., Park, J. & Jack, S., 2007. Entrepreneurial social capital: Conceptualizing social capital in new high-tech firms. International Small Business Journal, 25, pp.245-72.
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Ketchen Jr., D.J., Snow, C.C. & Hoover, V.L., 2004. Research on Competitive Dynamics: Recent Accomplishments and Future Challenges. Journal of Management, 30(6), pp.779-804.
Möller, K. & Rajala, A., 2007. Rise of strategic nets — New modes of value creation. Industrial Marketing Management, 36(7), pp.895-908.
Park, B.-J.R., Srivastava, M.K. & Gnyawali, D.R., 2013. Walking the tight rope of coopetition: Impact of competition and cooperation intensities and balance on firm innovation performance. Industrial Marketing Management , 43, pp.210-21.
Ritala, P. & Hurmelinna-Laukkanen, P., 2009. What’s in it for me? Creating and appropriating value in innovation-related coopetition. Technovation, 29, pp.819-28.
Samsung, 2015. Homepage. [Online] Available at: http://www.samsung.com/us/ [Accessed 1 October 2015].
Zhang, J. & Frazier, G.V., 2011. Strategic alliance via co-opetition: Supply chain partnership with a competitor. Decision Support Systems , 51, pp.853-63.
Microsoft seems to not only be following in the footsteps of Apple’s success, but is trying to take it to the next level. Apple has been a very popular and successful brand, which apart from quality, has resulted from their innovative way of linking different Apple devices with one another through iCloud. iCloud allows users to send and receive messages, and use apps and tasks across all their Apple devices at the same time. Microsoft, however, is adding onto their competitor’s strategy and provides the ability to link Windows 10 PCs with devices of other brands and operating systems as well, significantly enlarging their target market.
The Phone Companion app links your Windows 10 PC with your other mobile devices, regardless of whether they have a Windows operating system or not.  They allow accessibility to iOS and android users as well, and offer compatible apps for each system, linking users’ devices in the same way iCloud does, without forcing users to buy all their smart products of a single brand.
After Microsoft failed to grab a share in the operation systems market, by lagging behind in the app revolution , they are now working hard to gain a good position and obtain a share of the market. In order to take some steps in the right direction, Microsoft has made some acquisitions in recent years, including Sunrise and Acompli; two apps that are compatible with both iOS and Android operating systems. . The release of Phone Companion will take this development to a new level and offers positive prospects for Microsoft in this volatile market.
I find it particularly smart that they reach out to all smart phone users, and that the app isn’t limited to just those few who use a Windows phone. Forcing your users to limit themselves to a single brand, like Apple does, can possibly hurt their sales, as users have to make significant investments in several new devices of the same brand, in order for them to reap the benefits of the linking systems of said brand. In that sense I highly prefer Microsoft’s tactic in this matter, as I can keep using my existing mobile devices, and the initial investment to start enjoying the possibilities Phone Companion offers is limited to only a single purchase.
Of course the question remains whether it is not too late for Microsoft to try and conquer a market already so well established. And then there is also the matter of their competitors, who will most definitely not sit by idly and watch as Microsoft eats away from their market share. However, an intelligent move like that of Microsoft will certainly bring about one beneficial change; the mobile market will become more and more user friendly as the different companies, like Apple and Microsoft, battle each other for the satisfaction of their users.
 Sawers, P. (May 26, 2015), ‘Microsoft Announces Phone Companion App for Windows 10 And Teases Cortana for Android and iOs’, retrieved from http://venturebeat.com
 Bajarin, B. (May 17, 2013), ‘Microsoft is Missing Apps the Same Way They Missed the Early Internet’, retrieved from https://techpinions.com
 Finneran, M. (June 2, 2015), ‘Microsoft Gets a Whole Lot More Mobile Friendly’, retrieved from http://www.nojitter.com/
Of course you are, and so am I. Online ads are on the rise and can be very annoying. Thankfully, ad blockers easily allow you to block advertisements and increase the speed of browsing. But did you ever wonder what the consequences of using ad blockers are? And what about the latest developments in this industry? This 3-minute read will get you up-to-date.
The online advertising industry
Online advertising is one of the few industries that can bend on growth rates between 15-20% each year. In the past 10 years, internet advertising has seen a CAGR (compound annual growth rate) of 17%. Mobile internet advertising even shows a CAGR of 110% over the past 5 years.
The rise of ad blockers
With the rise of online advertisements, there has been a rise in the adaptation of ad blockers as well, especially in the last few years. A recent report from Adobe shows that globally around 200 million people are currently making use of ad blockers, a growth of 41% in comparison to 2014.
Graph 2: Global monthly active users that have an ad blocker
As we speak, ad blockers are mostly used on non-mobile devices. However, Apple’s newest iOS 9, which runs on iPad and iPhone, might change this trend. The new software update of Apple makes it possible to use ad blockers on both iPhones and iPads. Mobile ads seemed to be the future of advertising, but might stagnate due to this development.
Companies are missing money – a LOT of money
There are a lot of companies and content creators who are dependant of online ad revenues. Ad blockers are bad news for them. Some websites, among which Wired.com, kindly request you to whitelist their page, in order to keep their websites running. But how big is this ad-blocking problem for these companies? According to the report of Abobe and PageFair, $22 billion(!) of ad revenue is lost due to ad blockers this year. If the increasing adaptation rate of ad blockers continues as it did in the past few years, the results for content creators and companies can be devastating – and might affect the average internet user as well.
What will the future bring us?
A decrease in ad revenues might result in less content on the web, as ad revenues won’t always enable people and companies to cover their expenses. The entry barrier to create and share quality content might rise, as revenues derived from this content will get more uncertain. A second consequence might be that there will be more places where you will need to pay to access content. Personally I can see the upside of this second consequence, as it makes us, as internet users, more picky in what and how much content we consume.
Seen from a business perspective, the increase in the usage of ad blockers might lead to a change of business model for a lot of companies; they cannot just simply rely on ad revenues anymore. In the future we might see websites with a Spotify-type of business model: view content for free if you are willing to accept ads (whitelist a website if you are using an ad blocker), or pay a subscription fee if you want ad free content.
Studies and examples such as Spotify Premium have shown that users are willing to pay for an ad-free web-environment. Would you be willing to pay, or would you rather see ads in return for free content?
Apple Music vs Spotify
With the advance of technology, the world has entered a digital society. The inevitable shift to digital music forced the industry to seek new business models. Legal downloads became available with the launch of iTunes in 2003 and a decade later subscription-based “pay-to-stream” services emerged. The streaming services made a large impact on the industry. With Spotify being the current market leader with 75 million users and Apple Music the latest entrant and a serious competitor, a new battle for market share developed. This article will provide an analysis and future prediction of both companies.
Spotify uses the so called freemium model, which offers free service with additional features that can only be utilized once someone has subscribed to a premium account. In order to also generate revenue from its free users, Spotify occasionally inserts audio advertisements that cannot be skipped. Unlike Spotify’s freemium model, Apple Music uses a free-trial model, meaning that after the free-trial period users are required to pay a monthly subscription fee to make use of the service. Apple Music is trying to offer an all-in-one solution to music lovers and therefore tries to make the monthly cost seem negligible.
SWOT & future prediction
The defining key trend in early 2015 in the global music market is the continued surge in consumer uptake of streaming services. This uptake of streaming services drives subscription to listen to music. On top of this, there is a substantial untapped potential for growth within the paid-for category. So we can say that Spotify and Apple Music are competing in the right market.
At the same time, the streaming market entered a new phase of growth. In a few years a lot of big players entered the market (e.g. Google, Apple, Amazon and Tidal). The near future of this market will cause intense competition between those companies. For Spotify and Apple music to win this fierce battle, a few key trends are extremely important:
– Revenue model and artist royalties. People will choose the service with the most and the best artists. One important factor to attract the most and the best artists is to have a revenue model that is considered to be fair according to the artists. Due to Apple’s subscription model, we expect that they will be more successful in attracting artists than Spotify.
– Partnerships. In order to accelerate the growth of their customer base, they have to form bundled offers with telecom companies and make exclusive deals with artists and labels. It is hard to predict who will be most successful in this area.
– Competition on curation. Surfacing songs and editor recommendations that are tailored to the listener’s taste is key to customer retention. We expect Apple Music to have the best tech team to be able to outperform Spotify in the future on curation.
Another factor that can’t be left unmentioned and can play an important role in gaining market share in this rapidly developing market is the brand community of Apple.
After the analysis of both companies and taking into account their future potential, we believe, that Apple Music will be the most profitable on the long term.
Sjaak Meeuwsen – 437156
Claude Zwicker – 437277
Yinuo Jin – 373227
Hidde van Heijst – 436800
Ruud Schippers – 441698
- Diversity Reports: although tech companies are completely data driven when it comes to their business up until super recently we didn’t even had the data about how diverse (or non-divrese) company workforces are. We all know that you will never achieve what you don’t measure so Tracy Chou, engineer at Pinterest started a movement to collect more data about diversity in a call for tech companies to be more transparent. Growing from this initiative last week Slack became the fourth unicorn publishing it’s diversity report after AirBnB, Pinterest and Dropbox. With these reports potentially published every year in the future we will be able to see how companies progress in this question.
- Hiring Heads of Diversity: some companies like Yelp, Facebook, Twitter, Square already have a responsible for diversity within the company, others like Asana, AirBnB, Autodesk and Dropbox are currently looking for one. This shows that transforming a companies workforce, mindset and attitude towards multiculturalism is not a side-job although C-level involvement is also an irreplaceably important factor in achieving success.
- Working with companies specialised in diversification like Paradigm or Culture Shift Lab: Pinterest recently announced it’s new initiative Inclusion Lab initiative created in cooperation with Paradigm. This start up helps innovative companies attract, select, develop and retain a more diverse workforce.
- Building awareness about unconscious bias in hiring and promoting women and people of colour and explore how could this be decreased
- Focusing on retention: “It’s not just about hiring diverse candidates; it’s about keeping them. If companies don’t foster a welcoming environment, diverse candidates will be out the door just as quickly as they walked in”. For example there should be surveys to ask employees things like how long they plan to be at the company, how they perceive diversity and inclusion in the company, and if they are aware of opportunities for advancement
- Support initiatives aiming at creating diverse pipeline: Often times companies complain that they would hire people from more diverse background if there would be sufficient “supply”, a solution for this problem could be supporting girls and minorities to learn to code and get more involved with technology. There are already many initiatives of this kind like Black Girls Code, Code2040, Hack the Hood or Skool and many others.
Pundits have long called for transformation of news media that will bring new business models better fitted for the digital age. It is still common that publishers offer separate subscriptions for online and offline channels or expensive bundles for mobile access. Efforts to breath new life into the publishing business came not only from publishers and media companies but also technology companies such as Apple, Google, Microsoft. Apple’s Newsstand app, which was introduced in 2011 as a hallmark feature of iOS 5, allowed publishers to recreate and publish their magazines on the iOS platform. Magazines published in the Newsstand app behaved differently from regular apps and had more rights that ought to make them more attractive for publishers and subscribers. Apple provided the tools for publishers to offer free and paid subscriptions and the possibility to push new content to subscribers. Similar solutions were also created by companies such as Samsung and Google. Large and small publishers saw this as an opportunity to reach new customers, with news/magazine apps that stood out from other apps.
Marco Arment, one of the first employees at Tumblr and creator of Instapaper, took on the challenge to create a magazine native to the digital age and perfectly suited for the capabilities of mobile devices. the result was The Magazine.
Introduced, in 2012, the Magazine was a Newsstand app that released weekly issues. Because there are many freelance writers who produce content for their own websites, Marco figured he could attract those writers to produce content for The Magazine. For writers it was attractive to write for The Magazine, since the company allowed all contributors to retain ownership of their content and let them publish it on their own sites two months after it was published in The Magazine. Marco believed that the new tools created a new category for magazines such as The Magazine:
But just as the App Store has given software developers a great new option for accepting direct payment, Newsstand has given publishers an even bigger opportunity with subscription billing and prominent placement. Yet most publishers aren’t experimenting with radical changes.
There’s room for another category between individuals and major publishers, and that’s where The Magazine sits. It’s a multi-author, truly modern digital magazine that can appeal to an audience bigger than a niche but smaller than the readership of The New York Times. This is what a modern magazine can be, not a 300 MB stack of static page images laid out manually by 100 people.
On the money side, The Magazine relied on paid subscriptions from readers and individual issue sales. This revenue was used to pay writers (the subsidy side),editing, illustration, proofreading, design, and programming for each issue.
Although The Magazine was fairly popular and highly profitable according to the owners, the company recently announced that it is shutting down.
Why did it fail?
Apple’s Newsstand is also partially to blame. Because all apps created for the Newsstand are locked into the Newsstand app, they are no longer visible on the homescreen. And because the average mobile device already has dozens of apps fighting for attention, out of sight means out of mind for apps locked in folders. Furthermore, these apps also often faced download issues, causing frustration for subscribers. But unfortunately, the main reason for shutting down is the lack of subscribers. The Magazine did not have a high enough retention rate and was losing subscribers faster than it was gaining them.
What are the possibilities?
The Magazine has shown that it is possible apply a new business model for news media. However, just applying the newest technologies and building a high-quality app was not enough. Publishers already have the writers, they need to find a way to gain and retain as much subscribers as possible.
Do you think large publishing houses should take example?
Slowly but steadily they have been infiltrating all aspects of our lives, wanting to be a part of everything you do, almost like that annoying friend we all have had once. Yet I’m not talking about a friendship here, I’m aiming a little higher. Apple, Google and Microsoft high that is.
Everyone these days has a smartphone, and almost all of them are either iPhones, Android phones or Windows Phones. Laptops and computers is also a commodity we all have these days, preferably more than one. Here we meet the same competitors again; Apple, Google and Microsoft. Tablet industry; same story. And that’s not even the end of it, all of three companies are continuously expanding their reach, all for one reason: to get you into their ecosystem.
First off, we have Apple. The company that became immensely popular overnight because of the iPhone. This popularity had an influence on all of their other products they sell as well. Macbooks, iPads, Apple TV’s, for all of them sales rose incredibly. And so, the first form of an ecosystem was born. Every device you had could be an Apple, and it wasn’t long before there were people everywhere who didn’t want to touch anything not produced by Apple. These days Apple’s reputation is starting to show some cracks and dents. Competitors have caught up and the same quality products are now available, but for a lower price than Apple products. Apple has to step up their game to stay on top.
Google has always be a company which is active in a hundred different industries. It has taken them a couple of years, but they have now also moved into position to offer a full Google ecosystem. Android phones, Chromebooks and tablets manufactured by Google gives customers a viable alternative to Apple. Android has even taken over Apple as market leader, although this is also because of the sheer volume of mobile phone producers using the Android OS. The approach Google has is a bit different than Apple’s. Where the Apple ecosystem is really closed, but therefore fine-tuned to provide ultimate user satisfaction, Google has a really open system with a lot of producers and different products. Google’s motive is also a bit different, because they always have their mighty search engine in mind. For this reason they want as many people possible to have access to their products so they can track their behavior online. They are the most active with “side-projects” though. Google Glass is a completely new way of interacting with the digital world and they have also developed self-driving cars. You never know what Google comes up with next!
Then there is Microsoft. The former giant of the digital age who couldn’t keep up with the mobile market. But while many people have already written them off they are actually stepping up their game. With the introduction of the new Windows 8, the start of their own production line of Tablets (Surface) and their takeover of Nokia’s mobile department they are all set to provide users with a complete Microsoft experience. And they have the power to make a very swift comeback. What a lot of people are forgetting is that almost the complete business world is still using Windows and almost everyone uses some form of Offices. If Microsoft gives them the option to combine their long trusted Windows machine with a tablet and phone, a lot of people will be interested.
It’s very interesting to see these three companies clash with each other, recently Google has blocked Microsoft out of their services for example, but perhaps it isn’t necessary that one of them comes out of the smoke as victor? Maybe they can all exist next to each other?
Personally, my money is on Microsoft, but what do you guys think? Who has your vote as the best ecosystem around?
I have never really been a fan of green technology – for no apparent reason. However, this year’s fastcompany ranking of the most innovative companies highlighted one company, which changed my indifference into sheer excitement. Ladies and Gentlemen, I present to you: Nest.
Nest is based in Palo Alto, California, and produces a wireless and intelligent thermostat. It has been founded by two former Apple employees, one of whom has been directly linked to the design of the iPod and iPhone. Surely a great legacy to build upon in order to revolutionize the energy world.
What is it ? In our student house we have a manually adjustable thermostat, which implies that the temperature does not change unless we alter it by hand. Fancier houses have a digitally programmed thermostat that regulates inhouse temperature based on pre-programmed time settings. Now, imagine you have a thermostat that learns from your movement and activities in your house about personal patterns of energy usage. Nest shuts down the energy in your house when you are away and powers the heating up when you are approaching your house or apartment. Furthermore, you can access your thermostat via a mobile app, which would allow i.e. remote controlling your radiators after a holiday and arriving in a pre-warmed house.
How does it work ? As before mentioned the thermostat gathers data and learns. It gets current weather updates via WiFi, detects movements and light changes via a sensor and is equipped with not one but three temperature sensors. The data is then transformed into a personal energy schedule. The outcome of such a calibration are “Away Times”, during which the system estimates that you are not at home and reduces the energy usage of your home appliances.
The thermostat costs around 250$ per item. A fair amount of money. However, Nest claims that on average a household can save 173$ per year, which would mean that you break even after around 1 year and 4 months. Sounds like a no-brainer. It is therfore not surprising that it is being bought by US consumers at a fast growing rate. You might think, ‘fair enough, but would it work in Europe’?
Well, firstly, I reckon that the savings per household in the US wooden cabins, drastically outweigh the savings that are possible in a regular, stone build European house. On the other hand, we Europeans are much more sensitive towards our Energy bill than the Americans, simply because we pay more than double the price. Consequently, we can assume that by only having half the energy savings, Europeans are likely to save the same amount in heating costs.
I think it is safe to say that we are looking at a sound business concept. Therefore I am excited to hear that analysts assume that the Nest thermostat, just like the iPod, is just the start of a great range of revolutionizing products.
Lucky for us – they are expanding to Europe and as a BIMer I’d say that we should keep our eyes open for these sort of companies.
Scewomo-what?? No need to remember this thorny word, because as fast as it took over the design world in 2007, it is already on its decline. Anno 2013 people are starting to embrace a new design concept.
Skeuomorphism means using the design of concepts inherent to an old technology as input for the implementation of a new design.
Most people associate skeuomorphism with Apple products. Just consider the Calculator, Clock, Calendar or Newsstand on your Iphone; they are all digital illustrations of their real-world counterparts. But not only these obvious recognizable components stand out, the subtle movements in the images act as if they are physical products. Originally these ‘old’ designs were used to evoke a sense of familiarity to the user when encountering a new concept or app online. Thanks to Apple’s (read: Steve Jobs’) objective to make a user-friendly design, this has been the look of Apple software for years. Its hardware on the other hand was designed by Jony Ive for the past two decades, a British industrial designer that values a functional and clean look. This combination has made Apple’s look of products world-renowned and extremely popular. A perfect fit.
But times have changed. As many of you know, there has been some shake-up in Apple’s executive positions back in 2012; with as a result that Jony Ive is now responsible for both the software and hardware of Apple. The ultimate result of this decision has been unveiled yesterday. Launched 18 September 2013, Apple has shown an entirely different look, the flat user interface of its 7th mobile operating system (iOS7). Flat design takes out the graphical look of different textures and strips away all the non-functional elements thereby making it a more minimalistic and clean design. But whereas skeuomorphism limited creativity, flat design fosters it by thinking of new ways to represent elements. Not only Apple is embracing the flat design, Windows is following this trend suit with its Metro design in Windows 8.
First opinions have called the flat user interface minimalistic and childish, while others love it. Nonetheless, if it will make skeuomorphism redundant is yet to be seen, for the moment being people are obsessed with its design-counterpart. Don’t forget that the discussion can be extended beyond Apple or Windows to mechanical vs electronic wristwatches, dashboard elements in a car, the traditional look of a house, etc.
What do you think? Should skeuomorphism disappear entirely?
PS: if you wonder who was crazy enough to think of this word: skeuomorph is derived from the Greek; skeuos (container or tool) and morphe (shape).
A lot has been written about the Apple TV, and many had expected it already. Now there are many other forms of set-up boxes that you can use to stream media onto your TV. I have build a FreeNAS server very easily from which I can stream media content across my house. You can stream it through your television, if it has that functionality (check this BIM post), through your Blu-ray/DVD player (again if…), or through set-up boxes like the Xtreamer, or from Eminent for example. Google also has launched their Google TV. (See post by jordydebruijn) Now Apple has their Apple TV already for quite some while, and they state it is more of a hobby project than serious business, but is it? Everyone who can still remember the VCR players that were a pain the bottom to set-up might know the feeling that the current solutions are just not it. Steve Jobs has said in his biography that he cracked the code, meaning he found the next best thing for television.
But there is more in your home entertainment system besides your TV and Media-player. You might have an Playstation 3 or Xbox360. The latter has come up with Xbox SmartGlass, your interactive remote control: (source with video!: Gizmodo)
As Steve Balmer wrote in the annual shareholder letter: “There will be times when we build specific devices for specific purposes, as we have chosen to do with Xbox and the recently announced Microsoft Surface,“
David Zax, journalist for the MIT Technology Review, is pointing out that Microsoft is going Apple. We are also seeing that Google is going Apple, although still licensing other manufacturers to build the Nexus 7 tablet. Is the way Apple is doing it the right way? Does the customer benefit from a closed ecosystem? The user experience might be better, but the user is “locked-in” by the manufacturer.
What are your opinions on this move in the industry?
While I am not sure if Apple or Google decided that the iPhone 5 would have no longer Google Maps Data; I am sure that Apple’s self-inflicted map app has been widely criticized in the media. In a review by Walt Mossberg in the Wall Street Journal about the Iphone 5 he called it ‘a step backward’ and ‘the biggest drawback’ of the new phone.
After the launch of the iOS6 system, which comes preloaded with Apple Maps, some strange things happened. According to Garside in an article about the new Apple Maps Appin the Guardian (2012) users reported that London had been relocated to Ontario, Paddington station had disapeared, the Sears Tower in Chicago had shrunk, and Helsinki railway station had been turned into a park. The most notable report was in Dublin, where a previously undiscovered airport popped up. Airfield, a 35-acre Greenfield site with working farm, formal gardens and cafe, has been designated as an airport by the Apple database, which has labeled it with the airplane icon it uses for genuine aircraft landing spots.
Mapping is a really important function for smartphones. I always use it when I’m lost and I’m sure I’m not the only one. It’s also an essential way to find something somewhere, whatever you’re looking for. I’m an Android user, so I haven’t experienced the Apple Maps App yet. Anyone who did? What do you think about it? Found any new airports? 😉