22
Oct

Comments on ReCode Interview Rick Osterloh SVP Hardware Google

In the October 13, 2017 “Too Embarrassed To Ask” show from VOX Media/ReCode, Kara Swisher and Lauren Goode interview Rick Osterloh, SVP of Google Hardware. A few points stand out for me:

1) Mr. Osterloh claims he was actually hired by Google to run the Motorola unit (post acquisition), but Mr. Osterloh’s LinkedIn public profile page says he ran the Android division of Motorola Mobility back in 2007. Is Mr. Osterloh not completely pleased with Motorola’s performance?
2) When asked whether the Google Assistant feature of Google Home products is leveraging the same, familiar, web Google search service, he added “yes, but we’ve tweaked it a bit”. But he did not offer any clear assurances this leveraging is not the case.
3) Ms. Swisher started the interview by noting Google’s new call “we do hardware better than anybody else”. Unfortunately neither Ms. Swisher, nor Ms. Goode pick up on this statement during the interview. Obviously this statement voices the core of “competition to be the best”. Investors bullish on Alphabet should think about whether a strategy built around this “king of the unprofitable hill” of duplicating features, trashing prices, is a smart one promising more profitability, or not.
4) When asked about what, if any, impact concerns about consumer privacy had on the design of the Google Home product, Mr. Osterloh merely answers “if you don’t use the attention phrase, we don’t listen in”. Once again, neither Ms. Swisher, nor Ms. Goode probed any deeper on this point.
5) When asked what the key differentiator is, from his point of view, between Google’s hardware, and “everybody else”, he replied “our AI. Which doesn’t answer your question (chuckles)”.
6) When asked what drove the HTC acquisition, he answers “we hired 2K new engineers”. Once again, investors bullish on Alphabet may want to ask just why the 2K + engineers acquired from Motorola Mobility didn’t cut it, but the 2K engineers from HTC will cut it. Analysts should also take a look at the expense of moving all these people in and out of employment status at Google impacts on the bottom line.
7) Mr. Osterloh pointed to the camera features of the new Pixel phones as an example of big improvements in their hardware devices. (In a recent review of Apple’s new iPhone 8 Plus, we heard very much the same story – “the camera is terrific, 4K video, etc”) Neither Ms. Swisher, nor Ms. Goode probed further on Mr. Osterloh’s comments on this point. Too bad. Pixels & iPhones are smartphones — not cameras with phones included as accessories. Or are they? Anyone interested in what “innovation” means, should take a look at how leading manufacturers of smartphones are producing their latest models. In our opinion, “innovation” has been long gone from any of these devices. Contact us to learn more.
8) Mr. Osterloh disclosed Google Assistant is using the same prescriptive, rote, learning method as other “personal assistants” (Cortana, Siri, Alexa, etc). The lexicon is simply massively larger (he mentioned 100 million possible query strings). So the “intelligence” still isn’t their in any of these devices to “naturally” answer posed questions.

3
Mar

Has the Harvard Business Review embraced the notion of controlled free market competition for the tech sphere?

2-Color-Design-Hi-Res-100px-width On Monday, March 2, 2015, the online edition of the Harvard Business Review (HBR) published an article written by Kira Radinsky titled Data Monopolists Like Google Are Threatening the Economy.

Does it make sense for anyone reading this article to tightly associate (perhaps in a Pavlovian manner) the opinion expressed in it with the Harvard Business Review, itself? Did Radinsky intend to capitalize on the opportunity of publishing this article on as ostensibly a prestigious web site as HBR for some reason?

I hope readers will not find themselves somehow adrift as they ponder the above questions. The questions are not coming out of the void. Because the position Radinsky presents in this article is actually consistent, as I read it, with a Socialist view of how tech businesses should be regulated by the government to ensure “fair” competition.

In fact, a review of Radinsky’s public profile on LinkedIn reveals her management position in a company based in Israel. So why is the HBR publishing her article? Is it not fair to assume the average reader could misconstrue the article and its position on the HBR site as a tacit endorsement of some new test to genuine American free market capitalism (credit to Larry Kudlow for coining this phrase).

So with this preamble in place, let me now dive into what I think really matters. Radinsky presents the following “fact”: “Today, the most prominent factors are historical search query logs and their corresponding search result clicks. Studies show that the historical search improves search results up to 31%.” Sure, if the technology is predicated on personalization techniques and “cookies”, etc.

There is no reason why competitors to Google (for example) couldn’t approach the same objective from a completely different angle. In fact, given the growing public concern about personalization and its dependence on activities of the invasion of privacy kind, there is, perhaps, a palpable imperative to find just this kind of new way of approaching the task.

Free market capitalism always rewards the “better mousetrap”. So why argue for a controlled marketplace where stakeholders in one approach are penalized just because the “better mousetrap” has yet to be found?

Granted, we have yet to witness the introduction of this “better mousetrap”, but I would argue the recent successes Facebook has reported over the last several business quarters are indicative of a real shift away from the kind of traditional search engine marketing for which Google is renowned.

In my opinion the editors at HBR should have thought a bit more about Radinsky’s article before agreeing to publish it.

Ira Michael Blonder

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

17
Sep

When Different Words Mean Different Things to Different Writers, Readers Feel the Pain

On Friday, September 12, 2014, the Wall Street Journal featured an article by Peter Thiel on competition and monopolies. The Journal supported the article with a video interview with Thiel about his notion.

In the second paragraph of Thiel’s article he contrasts the financial performance of Google, in the year 2012, to the performance of the entire airline industry: “But in 2012, when the average airfare each way was $178, the airlines made only 37 cents per passenger trip. Compare them to Google, which creates less value but captures far more.” But what does “value” mean, and for whom? Unfortunately Thiel includes neither a definition of “value” nor much of any description, whatsoever, of just how Google “captures far more”.

One may argue Thiel’s failure to support his thesis with these points of detail is trivial. But, in this writer’s opinion, the lack of detail is, thematically, consistent with the rest of the “atmosphere” of this article, and, actually, a very important indicator of some “snake oil in the wine”. So neglecting to include any notion of what “value” means, Thiel proceeds further, and presents the core of his thesis: businesses should make best efforts to achieve monopolies in their industries, and avoid reacting to competitive pressure as much as possible.

Leaving aside, for a moment, the decidedly non free market capitalism at the core of an argument for monopolies, this writer would prefer to focus back on Thiel’s construct of Google vs the airlines as the preferred method of demonstrating, ultimately, a lack of connection between building a business plan to prosper by delivering value to a market, rather than building a business plan to prosper through some other means.

We are choosing to refer to the method Thiel evidently presumes Google implemented to make “100 times the airline industry profit margin that year [2012]” as simply “some other means” for a reason. In this writer’s opinion, there is no other way for a business to prosper than by delivering “value”. Google made a lot more profit than the entire airline industry because customers paid them, proportionately, more money for a product much less costly to develop than the cost of flying a jet plane, with hundreds of people on board, anywhere. They paid more money because they thought they received something more valuable from the product purchased from Google. They would not have paid this price had they thought otherwise.

Further, we would argue, airlines have failed to deliver any more value to customers other than a lowest possible price of a flight at a most convenient time because of market pressure, where consumers have come to expect essentially the same product to be delivered from any number of sources. Flights are, for better or worse, commodities. Back in 2012, click ads on Google were not.

We would recommend readers read Thiel’s article very closely and be wary of semantic stretches.

Ira Michael Blonder

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

30
Jul

Why Isn’t Flash Player Available for Most Tablets?

We own a Samsung Galaxy Note 2.1 10.1. Our business requires us to frequent websites with Shockwave features, which require Flash player on clients. But our tablet does not support Flash Player. So we can’t use our tablet to visit some of the websites we use on a daily basis. At least we couldn’t until we bought a Puffin Browser for our tablet. We will write more about the Puffin Browser in another post to this blog, but for our purposes in this post, we will simply say the Puffin Browser works.

Who benefits when consumers like us cannot access the services they require with computing devices? We aren’t sure. But we are confident somebody eventually benefits from constructing a serious obstacle between consumers and successful use of tablets (built with ARM chips) to access the information they need. (Note: the Microsoft Surface RT is a notable exception to the “ARM Chip/no Flash Player” rule. Flash Player works fine on the Surface RT)

Laptops, desktop computers, and even hybrid laptop/tablet computers are all entirely capable of supporting Flash Player. So we think it’s safe to say excluding tablet users from accessing Shockwave features on websites benefits PC manufacturers. At least two of these manufacturers are also prominent manufacturers of consumer printers — Dell and HP. Adobe, who also happens to be the ISV behind Flash Player and Shockwave, has deep relationships with each of the printer manufacturers (after all, Adobe is also the ISV behind PostScript).

It’s also important to keep in mind two other facts:

  1. Steve Jobs spoke publicly about Apple’s decision not to support Flash Player with the first iPad tablets
  2. and Google, the ISV behind Android, has its own video player for Youtube

Given the above points the whole issue of Flash player and tablets is controversial. At present it appears Adobe is highly selective about just which tablet manufacturers can support Flash Player.

When we consider this problem, we can’t help but think the industry has cannibalized itself.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2013 All Rights Reserved