Lenovo, Public Relations and Superfish

2-Color-Design-Hi-Res-100px-widthIt has been a mere 5 – 6 weeks since public announcements appeared about the security threat represented by preloaded adware from Superfish on Lenovo personal computers first magnetized public attention. But in this short interval the Lenovo brand has taken a big hit, especially around the question of whether or not public announcements from them can be be trusted — not the kind of stuff a public relations team will likely want to handle. CMSWire, for example, published an article on this topic, which is titled Can Lenovo Regain Consumer Trust After Secretly Installing Adware?.

I see little point in raking through the stacks of opinions on this topic. But I would like to present three points I hope early stage ISVs will carefully consider should they find themselves in the kind of quagmire besetting Lenovo at the moment:

  1. Please do not choose the denial route
  2. As well, please take responsibility for any failures to carefully evaluate products before deciding to add them to a core offering
  3. Finally, please defend the important positions you have taken to make a best effort to establish a profitable manner of doing business

The public perception appears to be Lenovo failed to follow these three points, starting with a denial of responsibility. One may argue the denial statement was subtly presented to the public. After all, the earliest headlines were all about the security risk represented by the Superfish adware product. The public appeared to believe Lenovo’s hardware had been hacked. Perhaps this perception was nurtured by the surrounding publicity climate, which was rather full of news about reports from Kaspersky Lab about spyware baked into the hard disks and even CPUs powering desktop and laptop computers manufactured in the US.

In my opinion Lenovo’s PR team should not have allowed the public discussion about the presence of Superfish adware on Lenovo computers to take this “sidetrack”. The inclusion of Superfish was really not a surprise at all, but a method Lenovo chose to exploit in an attempt to squeeze more revenue from the sale of its computers. There is nothing wrong, on paper, about making this kind of effort. Most any business in the type of commodity market Lenovo finds itself as it competes as a PC manufacturer would look for some opportunity to lower its costs to produce product by selling marketing opportunities to third parties.

If readers are hard pressed to accept this point, I would point them to an example from another commodity market — airplane travel and one of the main contenders in the market — Delta Airlines. The Delta branded American Express card is out there for a big reason perhaps lost on the consumer, but certainly one rarely lost on product marketers — to lower production costs. Whenever a customer buys a ticket on a Delta flight with a Delta AMEX the cost of the sale has been lowered by upwards to 4% simply by removing a third party clearing fee.

In my opinion there was nothing, on paper, wrong with Lenovo stuffing its PCs with an adware product. They just did not do a successful job of selecting the right partner (because Superfish product comes with big security concerns), which may result in a very big problem for Lenovo, should someone experience a hack attributable to Superfish. They also appear not to have done a very good job of plainly educating the consumer about the presence of adware on their computers. Finally, they were unable to provide their customers with an easy to follow method of completely removing adware from their purchases, should they wish to go this route.

The whole method of handling this problem has been a failure of public relations, sorry to say.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2015 All Rights Reserved


Working with Windows Preview, tile apps and desktop applications get along better than is the case with Windows 8.1

I’ve been working with Windows Preview for about a month. One of my computers, a laptop seeing otherwise low usage looked to be a perfect candidate for the preview, so I decided to use it to participate in the preview effort. The laptop is at build 9860. The pace of Windows Update is “slow”.

I like what I’ve seen so far, but, frankly, haven’t made much use of the computer, at least as of yet, to try out new functionality. I decided to move slowly on the preview opportunity as the result of several problems arising shortly after I loaded the preview:

  • The Security suite (McAfee LiveSave) on the laptop (originally running Windows 8.1 professional) proved to be incompatible, at least with build 9860 of the preview, so I decided to remove it and migrated down to Windows Defender
  • The fingerprint scanner feature, from HP (the laptop manufacturer), also failed, though I have gotten the scanner to work with the new login featured presented by Windows Preview, which gives me the option of using the fingerprint scanner in lieu of login name and password
  • The wireless adapter on the laptop, a Qualcomm Atheros AR9000, cannot be successfully updated with Windows Preview, build 9860 running

But I can say I find the new O/S to be much easier to use than Windows 8.1. My Windows 8.1 experience was colored by the hassle of switching between the tile interface and the computer desktop interface whenever I needed to use applications. As I just noted, this experience amounted much more to a hassle than anything else. Since I opted to use a Surface 2 RT tablet as my primary device in the category, the hassle presented by Windows 8.1 was probably more pronounced than would have been the case had I made more use of an Android tablet I also have available.

The good news with Windows Preview is most, if not all of the hassle has been removed. I rarely, if ever, experience the display driver crashes which are almost always “there” when I try to use the Surface 2 RT to post to Twitter, or some other app designed for small form mobile devices.

The laptop is equipped with a touch screen. I’m pleased to say I haven’t experienced any detraction from the touch functionality as the result of implementing Windows Preview. I happen to be keen on touch (in fact I’m keen on any input method other than keyboard and mouse) and would like to see this set of features kept as is as more builds are rolled out.

I haven’t any intention to quicken the pace at which I upgrade to later builds. So readers shouldn’t plan on much more content on this topic, at least for now.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2014 All Rights Reserved


Comments on Google’s new InBox email reader

For better or worse, email remains the primary method computer users exploit for asynchronous communication. So Google’s release of a new reader application, InBox, stimulated my interest. I received an invitation to add the application and thought it might be helpful for readers to provide some comments here in this blog. For readers unfamiliar with the notion of “asynchronous communication”, the easiest way to understand the concept is simply to consider messages largely disconnected from one another. In other words, getting the message from an email does not require a review of the reply that may (or may not) result from it. Popular messaging apps like Whats App, or Facebook Messenger, Google Chat, etc. are all examples of synchronous communication, in other words messages are interdependent and really meaningless without the replies associated with them, even if there is no reply whatsoever. In the latter case the initial message is collected by each of these applications into the folder directly associated with a targeted recipient. In the case of almost any email reader, and in contrast, any sent message can be found in the “sent” folder repository for all sent messages, regardless of the intended recipient.

When I consider an application like Google InBox the important points all have to do with productivity, and, further, the pace at which I can locate information of importance to me, as opposed to all of the other information really of low importance to me. So I admit to liking the way InBox collects my messages into broad groupings: “Social”, “Updates”, “Promos”, etc. I find it easier to get the information I’m after as the result of this rearrangement. Dealing with a reorganized repository of messages is something easy for me to do.

But learning a different way of working with messages, which in the case of InBox amounts to using the new “Sweep”, “Pin” “Bundled”, “Unbundled”, etc features is another matter. I have made little, if any use whatsoever of these new features. Why? There is nothing wrong with how I’m presently working with my email, so I have no motivation to changing it. Learning a different way to work with messages is actually a matter of adopting a new computing technique. Adoption is a big deal and not something I want to get into, right now, for my daily, persistent need to interact with email.

I need an application like InBox to work with all of my email — not just the email I receive via GMail. This capability is presently available with Microsoft Outlook 2013, on my desktop. So I still prefer Outlook 2013, even without the new order to messages I’ve received by using InBox for my Google email aka GMail. I understand this capability will be rolled into GMail, but I would rather see it added to InBox. Perhaps I will have more information to share on this in a later post.

A bigger plus, for me, would be to have Google’s search service retrieve and expose relevant email messages from my inboxes based on my queries. Unfortunately the feature is not presently available, neither with Google Search, nor with Bing and/or Cortana.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2014 All Rights Reserved


Have We Crossed the Windows Threshold?

On August 15, 2014 Mary Jo Foley published an article on ZDnet titled Microsoft to deliver Windows ‘Threshold’ tech preview around late September.

Subsequent to the release of Foley’s article, a lot of follow up articles were published on the same topic on familiar PC computing hardware blogs, including PCWorld, Computerworld, CNET and more.

But a core point of interest for most commentators, a rumored capability of this new Windows O/S to auto discover the computer hardware upon which it is running and to serve an optimized User Interface (UI) for it, popped up in the press months before Foley’s article was published.

This post is not a history lesson about rumored features of Microsoft’s next O/S, so it makes sense to take a moment to provide backdrop for why this topic is worth commenting about here.

Bottom line: “Windows Threshold”, and its capability to auto-sense hardware, promises to deliver substantial reductions in Cost of Goods Sold (COGS) for Microsoft. Satya Nadella, CEO, alluded to the promise of a reduced COGS based on one version of Windows for any/all hardware platforms during Microsoft’s most recent earnings conference call.

We assume our readers will be interested in any feature powerful enough to enable Microsoft to preserve gross margin, but still substantially reduce COGS. After all, without this feature Microsoft would continue to require separate versions of its O/S for different hardware platforms — Windows Phone, Surface, XBOX, and PC.

Back on April 2, 2014, in a video webcast of an interview between Charles Torre, a Senior Quality Engineering and Designer at Microsoft and Kevin Gallo, Director of Program Management, Windows Phone, Microsoft, mention was made of a “Universal App” process.

This webcast, titled What’s New for Windows and Windows Phone Developers, is devoted to a discussion of this new App development process, which Gallo defines as “an App designed to run across many different form factors, PC, tablets, Phones. The App adjusts itself so that the UI and the interfaces work across all of those different devices . . . ” (quoted from the webcast of Torre and Gallo’s discussion, which was held at Build 2014).

As we noted above, the big deal about this feature is the room it may provide to Microsoft, and to its OEMs, to offer consumers PCs at substantially lower cost, perhaps on par with the street price for typical examples of the Chromebook platform Google has developed and most prominent PC OEMs have opted to produce.

If this holiday season does provide the venue for a market debut for these lower cost computers, it may not be a stretch to see Microsoft reclaim some of the ground it appears to have lost to Chromebooks at the low end of the consumer PC computing market.

Disclaimer: I’m long Microsoft and have no position in Google as of the time of the publication of this post

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2014 All Rights Reserved


Writing About Better PCs While Focusing on Macs

In a manner emblematic of the times, on Saturday, July 26, 2014 Barrons published an article written by Alexander Eule on the topic of the resurgence analysts have recently noted in consumer interest in PCs. But, with the exception of a paragraph or two about Intel, and the evident success of its 3 year old objective of re-architecting CPUs for thinner, lighter laptops, the rest of the article is entirely about Apple iPads and Macs.

This article, titled What Comes Next in the Post-PC World? Better PCs, begins with some remarks about the troublesome sales plateau Apple’s iPad has apparently reached, at least according to its latest quarterly earnings report. Eule attributes diminishing consumer interest in iPads to “tablets [getting] squeezed out of the picture”. He suggests Apple may be looking to “cannibalize” its own position in the tablet market by introducing a larger iPhone in the fall.

But, despite quoting Gartner analyst Mikako Kitagawa, who reported (within a quarterly review of global PC sales) “‘[t]he availability of affordable thin and light notebooks have drawn consumer attention'” along with, perhaps, renewed interest in touch O/Ss: “‘Touch-enabled devices are also widely available with decreasing price premiums compared to a year ago'”, there is absolutely no mention, whatsoever, of Microsoft’s Surface 3 hybrid tablet/laptop.

Given Kitagawa’s comments, and Eule’s report on the success of Intel’s project to re-architect its PC CPUs for thinner, lighter, battery-powered devices, omitting mention of the Surface 3 is at least curious, and maybe a lot more.

This writer visited a local BestBuy in the metropolitan New York market recently and spoke directly with floor sales staff about the Surface 3 and the level of customer interest in the product. What he heard was very positive. While he was in the store he noted a lot of floor traffic interest in the Surface pavilion, as well as a lot of effort by sales staff to point prospects to these very thin, but very powerful computing devices.

When these same sales personnel were asked to characterize the type of customer moving to one of the Surface Pro 3 models, there was no mention of Macbook Air converts. Rather the Surface Pro 3 appears to be taking market share from laptops.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2014 All Rights Reserved


Will Microsoft Add Some Definition to the Implications of Intel’s Guidance Announcement for the Broader PC Market?

In the aftermath of Intel’s Guidance announcement of June 21, 2014, thousands of words have been written by what looks like an ever growing list of analysts about what the import of these numbers actually mean, not only for Intel®, but for the overall PC market.

Three themes run through most of the commentary:

  1. The improved demand for PCs is a temporary phenomenon, largely the result of increased sales of PCs to businesses
  2. Business demand can’t be counted to last as the driver is the end of product life for Microsoft® Windows XP
  3. Some of the increase in sales can be found in more interested consumers purchasing “2 in 1” computers, which can be used either as a laptop, or as a tablet

There are some issues with each of these three themes:

The first theme underestimates the importance of improved business appetite for PCs, and includes a prediction about how long this improvement will last. There are few tablet computers on the market today (with the notable exception of Microsoft’s Surface Pro 2 and 3, but more about these later) with attractive street prices above $1,000.00. But there are quite a number of PC options for desktop computers, laptops, and, especially, servers carrying a price about the $1K number. So improved business appetite for comparatively higher priced computers will likely be a good thing, not only for Intel, but for its OEMs, the businesses manufacturing other parts for these computers, and more.

I don’t believe there is enough data, at least as of yet, to produce a reliable prediction as to how long this improvement can go on. No one has factored in the possibility of a change in consumer sentiment about the safety of cloud computing. If one agrees with a notion about consumer appetite for tablets (but this notion can also be applied to smart phones and even home entertainment computers/game consoles) based around the usefulness of these “portable screens” as superior viewers for e-reading, movie watching, games, and television, then cloud SaaS products are going to be more important for this segment of the computing market than would otherwise be the case for PCs. If the present market potential for these devices is approaching saturation, and the threats represented by the never-ending string of successful cloud computing hacks grow more intimidating, then it may be the case the improvement in the PC market may have greater longevity than analysts have planned upon.

As to the 2nd theme, as I wrote in an earlier post to this blog, perhaps a driver is an improved consumer perception of Microsoft’s Windows 8 operating system. Microsoft formally announced the end of life for Windows XP last year, and the actual due date, in April of this year, will soon be a quarter behind us, so I’m not sure migrations to new computers replacing Windows XP is a big driver, any longer.

Finally, and this is a big point, hasn’t Microsoft maintained a very consistent approach to the tablet market, all along, to present the Surface product line as the best method of improving productivity, while, at the same time, supporting consumer needs for great e-readers, movie viewers and portable game consoles? In sum, isn’t the Surface tablet a great example of one of these “2 in 1” computers? But with the name tablet?

Since the Surface Pro 3 announcement last month, which included a video presentation about how some customers have been using the Surface tablet to enhance productivity, the New York Times web site has featured what looks to be a daily ad from Apple presenting precisely the same type of information about some prominent consumers of iPads. Is it safe to assume, then, some traction for Microsoft’s tablets as examples of these “2 in 1” computers. If this assumption is reliable, then doesn’t the argument end up in the circular file? After all, the Surface is a tablet and not, per se, a PC.

Ultimately, when Microsoft either next reports earnings, or, potentially, announces a change in its own guidance (and I have absolutely no indication whatsoever of its plan to do so), we should get some more useful color on this point, right?

Disclaimer: I’m long Microsoft and Intel. I am not invested in Apple. Neither am I invested in the New York Times

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2014 All Rights Reserved


Intel Raises Guidance, is it Safe to Say the PC Market is Revitalized?

On June 12, 2014, Intel® published a press release on its Investor Relations web site titled Intel Raises Second-Quarter and Full-Year Revenue and Gross Margin Expectations.

The first sentence of the release specifically noted “stronger than expected demand for business PCs”. The guidance towards an improved gross margin attributes the improvement to “mostly higher PC unit volume” as the principal driver. Confidence level seems high based on a tighter “plus or minus $300 million” than the $500 million range included in earlier guidance.

If PC sales are better than expected, is it also safe to assume tablet sales are taking the hit, and fickle tablet consumers are making their way back to PCs? This explanation doesn’t look reasonable. As Microsoft made clear in the Surface Pro 3 debut event, best of breed tablets have been consumed for different objectives than would be the case for PCs. Certainly there is a segment of the PC market consuming tablets, but the majority of these sales (and I should say I think Microsoft’s notion is accurate) have been to consumers looking for a great book reader, or a movie player, or, perhaps for other casual purposes.

Perhaps a more helpful reading of why PC sales are up has more to do with much better price/performance than was the case earlier this year, or even since the release of Windows 8.0. In June, 2014, it is quite possible for consumers to acquire quad core powered PCs and laptops at an under $500.00 price point. Market sentiment on the O/S running on most of these systems, Windows 8.1, is now more favorable, for example, a review of Windows 8.1 on the techradar.pro site carries the title “Major Update to Windows 8 goes a long way to solve some of its original shortcomings”.

While PCs running Windows 8.1 have become more appealing to consumers, resellers are also closely managing how consumers approach alternatives for serious business computing, meaning Google Chromebooks. A visit to BestBuy.com and a search for “Chromebook” landed the writer on a web page with a bold header at the top: “Is a Chromebook Right for You?”. The paragraph of information just below this heading emphasized how dependent this computing device is on the Cloud.

So is BestBuy on to something potentially even more important than Intel’s improved guidance? Is the consumer finally starting to feel anxious about cloud computing, in general? A change in consumer sentiment about cloud, and a new appreciation of the threat represented by online hacking, would certainly be a big deal.

Disclaimer: I’m long Intel and Microsoft, and neither have an investment in Google, nor in BestBuy

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2014 All Rights Reserved