Five for Friday | 五日(星期五)

Things that made my day this week:

Tic-Tac have put together a great tie-in with local Hong Kong independent musicians and music festival Clockenflap (Hong Kong’s answer to Glastonbury). Budding artists can submit their own video with a chance to play at Clockenflap.

FutureDeluxe did this great bit of CGI work for the adidas X Primeknit football boot.

Italian brand Stone Island put together this ‘look book’ video for their Shadow Project range. It has all the classic Stone Island design traits using adventurous materials and textures.

Bill Drummond (of The KLF) fame did this really good talk about how the iPod (and you could add smartphones) have changed our relationship with music

Amanda Murray directed this great documentary on the 1939 world fair in New York. It was something that was filled with hope and captured the imagination in the kind of way that inspires the innovators of tomorrow. The enthusiasm of those who saw it was palpable.

Contrast this with the lack of interest and hostility to this year’s world’s fair in Milan, Italy. Where are the dreamers of the future?

Links of the day | 在网上找到

Most Marketers Don’t Use Social Relationship Platforms | Forrester – I am not that surprised, Hootsuite’s user experience isn’t exactly intuitive for the PR people that I have worked with on campaigns and their pricing policy isn’t transparent – but more like feeding your wallet through a salami slicer

End of the Line? Messaging app in big trouble as active user growth stalls | Techinasia – really?

Flipboard’s Fanfare Fades as Executives Exit, Sale Talks Stall – Bloomberg Business – the writing was on the wall with Flipboard back when I ran into some of their people in Seoul a few years ago

Inside Innoway, China’s $36 million government-backed startup village – in just two years, Beijing city planners transformed a no-frills walkway in the city’s northwest into a symbol of China’s internet ambitions

Mossberg: The Apple TV gets smart | The Verge – wait for the next version basically

Hong Kong is the happiest place in China, according to WeChat posts – Hong Kong is home to the happiest people in Greater China, closely followed by Taiwan

The Architecture of Communication: The Visual Language of Hong Kong’s Neon Signs | NEONSIGNS.HK 探索霓虹 – great article on decoding Hong Kong signage design

(in)visible (de)signs | Designs that often go unnoticed – architecture of communication: the visual language of Hong Kong’s neon signs

A movement in the making – Dupress – some nice slide ware on maker economy

IBM to Buy Weather.com, But Not the Weather Channel – NBC News – surprised this didn’t happen sooner. Great case study for IBM, surprised if AccuWeather doesn’t receive offers after this

The Cheapest and Most Expensive Places to Live in Luxury in Asia – WSJ – the cost of living in luxury has come down in Mumbai making the Indian financial capital the cheapest place in Asia to live it up, according to a new report that examines the price of top-end goods and services

BMW Icons Guide. – I like the thought put into the icon design

Taxi groups unite to fight Uber with $250m start-up – FT.com – interesting meta taxi app (paywall)

On innovation

Back in the day I used to work agency side on the Microsoft account. Unlike a lot of my colleagues who worked on it full time, my workload was usually tangental to everything else that I had going on. My senior colleagues had worked on the business for a long time and became what you might term institutionalised. They had a definite dogmatic world view, which I was wasn’t comfortable with as I felt it lacked the objectivity required to give good client counsel.

That world view was baked into the descriptor of the agency, that we provided ‘innovation communications’, that is focused on communications programmes for innovative organisations. For certain people innovation became defined purely in terms of what Microsoft was doing at that time. For instance, winning a client that had a new business model would challenge mainstream ‘gourmet’ food brands like Kettle brand crisps (chips in US parlance) – saw colleagues berated over e-mail by senior leadership for bringing the wrong kind of innovation into their consumer brands part of the business.

Businesses change, no more so than the technology sector and agencies with anchored positions are left behind in spite of their loyalty as clients need fresh ideas.


Steve Jobs (WIRED Japan - August,1995).


I was thinking about at their dogmatic view of innovation when I read this quote from Steve Ballmer talking about Microsoft’s landmark investment in Apple back in 1997.

They’ve done a great job. They’re a company that’s done a great job. If you go back to 1997, when Steve came back, when they were almost bankrupt, we made an investment in Apple as part of settling a lawsuit. We, Microsoft made an investment. In a way, you could say it might have been the craziest thing we ever did. But, you know, they’ve taken the foundation of great innovation, some cash, and they’ve turned it into the most valuable company in the world.

It probably would have been enough to make a couple of my former colleagues extremely uneasy to say the least, especially given Steve Ballmer’s hard charging reputation. One thing that Ballmer misses is that even though Microsoft couldn’t vote with those shares, it was potentially as well-made a deal as Jerry Yang buying into Alibaba – if Microsoft had held those shares for long enough. Regardless of this, the Office unit of Microsoft more than made up for this investment with the amount of profit they made over the next few years on versions of Mac Office.

More information
Steve Ballmer: Microsoft investing in Apple ‘might have been the craziest thing we ever did’ | BGR

Links of the day | 在网上找到

REI to Close Stores on Black Friday and Encourages Customers to Go Outside | Time – smart for keeping things on brand, focusing purchases to their online channels

Oxford Professor Schools CalPERS: Contrary to Board Presentation, Private Equity is “Most Expensive Asset Class, By Far” – not terribly surprising results

Google Reveals Its New “RankBrain” Artificial Intelligence System – interesting focus on complex queries

IBM Opens the Door for Carbon Film NV Memory | EE Times – This latest work may well have solved the problems that have so far inhibited the development of carbon-based memory and opened the door to the possible use of oxygenated amorphous carbon

SMARTPHONES: Smartphone Price Wars Claim More Suppliers ~ Young’s Business China – consolidation at component level likely to affect smaller phone manufacturers, but will it cause more sensible component pricing?

WPP reports 3.3% hike in net sales for Q3 but UK revenue growth slows – WPP attributed to a “softening” in advertising, media investment management (media buying), data investment management (market research and CRM) and healthcare – interesting that this vertical in particular is soft (paywall)

Advertisers often don’t know what they are buying when talking mobile | Campaign – lack of context, intrusive formats and taking the piss on data connections (paywall)

On the sofa: No blood no tears

One of the best kept secrets in London is the free sessions put on by the Korean Cultural Centre just off Trafalgar Square. I caught the last film of the year to be shown at the centre. No blood No tears is a Korean heist story. Gyung-Sun is a former safe-cracker who has reformed and become a taxi driver.

Her husband is in the wind and left behind a lot of gambling debts that local loan sharks try to collect on. She doesn’t know where her child is and to cap it all Gyung-Sun has a difficult relationship with the police and her short temper.

A chance car accident brings her into contact with a petty gangsters moll and a plot ensues to rob the dog fighting arena where illegal gambling takes place. What ensues is a film that is part comedy, part Thelma & Louise and a healthy dose of ultra-violence that would be familiar to Hong Kong cinema and Tarantino fans.

Over the next few weeks I will be getting my fix of Korean cinema at the London Korean Film Festival. I can recommend from personal experience:

  • Raging Currents
  • The Man From Nowhere
  • The Classified File

Links of the day | 在网上找到

Why Yahoo is worth less than nothing – I, Cringely – for someone who bleeds purple this was said to read, but that doesn’t mean that its not true

Disney near deal to buy a stake in Vice Media | New York Post – alongside investment bank Raine Group, WPP, Technology Crossover Ventures and 21st Century Fox

Microsoft stops reporting Xbox console unit sales, shifting focus to Xbox Live active users | Geekwire – online services must the prime mover here which spells bad news for games resellers like Gamestop

Verizon: Millennial phone ‘frustration’ – Business Insider – the network is key, but will they blame the device or their carrier?

Businesses will not get new powers to clamp down on copycat packaging, UK government confirms | Out-law.com – will this dissuade supermarket private label products who are often the worst offenders?

Hacking Fitbit | Schneler on Security – one malformed packet over Bluetooth and both wearable and laptop are pwnd

The future of encryption | NSF – National Science Foundation – but can it be trusted?

PR ethics in Asia are a patchwork of values | PR Week – and they aren’t in other places?

IAB: US Internet Ad Revenues Up 19 Percent In First Half of 2015, Driven By Mobile, Social, Video – the second quarter of 2015 generated a record-setting $14.3 billion in online ad revenues

Instagram Blog – Boomerang – short form video clips

Yahoo’s stab at original programming didn’t work | VentureBeat – not terribly surprised

In D.C. And China, Two Approaches To A Streetcar Unconstrained By Wires | NPR – super capacitor powered trams in Guangzhou

Learn More About China | MRUniversity – great market primer

Disney to launch its own streaming service in the UK | The Drum – interesting move, especially that is it mobile only. Disney used to have MVNOs, surprised this wasn’t tied into that in some ways (though if I was them I would want this traffic on home wi-fi networks)

Jimmy Kimmel on Back To The Future Day

Whilst its a great bit of nostalgia, it makes great points on how technological progress hadn’t occurred in ways that were beneficial to society. Doc Brown is correct in describing a smartphone as a tiny supercomputer: in the cold war that’s what devices of equivalent computing power would have been. I guess the future is generally more vacuous than one generally predicts.

Five for Friday | 五日(星期五)

Things that made my day this week

Hermès MANifeste is a short motion graphics based video aimed at their menswear collection

The Project Apollo archive on Flickr gives us access to all the NASA photography from the project.

The Spirit of Buffalo video by Dazed Digital featuring Jamie Morgan and Neneh Cherry is a documentary about the Buffalo Collective who influenced the way modern streetwear is styled. Blame Pharrell Williams look on late 1980s London.

 

(1) 香港警察 Hong Kong Police | Facebook – acts as lightning rod for the divisions in society made apparent during the Occupy protests, but its also very surreal.

A great remix by The Avalanches which has been on heavy rotation during my dipping into Soundcloud

Links of the day | 在网上找到

Google hunts down Microsoft Office | Techeye – Google’s move is a big one but indicative of how desperate Google needs to diversity from its current online ad based model

Google and Yahoo sign search partnership – San Jose Mercury News – interesting because Yahoo! gets around the antitrust hobson’s choice it had with Microsoft and works with someone who can monetise half their search traffic better

Yum Brands to spin off China business after activist investor named to the board | SCMP – whilst they have had problems in China, it is still over half their revenues (paywall)

8 Things About WhatsApp You Should Consider Before Signing Up | Makesuseof – quite damning

Yahoo and Google strike a search deal—if the Department of Justice says it’s OK | Quartz – this is huge for Yahoo!

Tommy Hilfiger Introduces Virtual Reality Headsets for Shoppers – The New York Times – to showcase Autumn and Winter range (paywall)

Popcorn Time Download Not Needed, New Browser App Even Better | BGR – interesting hybrid of streaming and bittorrent

Socialbakers Launches Advanced Native Analytics on Weibo | Socialbakers – interesting given that the data has to stay in China

A Brand New Sysomos MAP And More Updates | Sysomos Blog – really nice interface changes

Deutsche Telekom Said to Weigh New Antitrust Complaint Against Google – The New York Times – interesting that T-Mobile has stepped in on this given their pioneer status with the first Android handsets

New Arduinos will be shipping soon with Intel’s Curie chip inside | ExtremeTech – this is about getting back into product prototypes and building a skill set ecosystem in the technology community

Amazon PR Boss Blasts New York Times Exposé, Digs Up Dirt on Its Sources (Update) | Re/code – Amazon goes all Frank X. Shaw on the New York Times

Pioneer Joins High-Resolution Audio Player Market – smartphones not cutting it

CONSUMER: Wal-Mart, Suntory Struggle in China; Bright Shops in NZ – bottom line: Declining Wal-Mart China sales and Suntory’s decision to dissolve a China joint venture reflect difficulties foreign consumer names face in the fast changing market

GPS and electronic payment: Hong Kong taxi industry insiders have big ideas for government review in wake of Uber crackdown – a cab drivers’ representative is calling on the government to review how taxi licences are issued and traded as the city’s transport chief plans to overhaul local taxi and car-hire services (paywall)

The new favorite sport of wealthy teens: Soccer – data via Piper Jaffray

The China Context | Alibaba Group – some great datapoints for presentations

The Google search post

Charles Arthur wrote an an interesting analysis piece on Google’s current business which I have linked to in the more information section called Google’s growing problem: 50% of people do zero searches per day on mobile.

According to Fortune, advertising counted for 90 per cent of Google’s revenue stream in 2014. By comparison Tencent makes just 17 per cent of its revenue from advertising; its revenue instead comes from payments  a la PayPal, premium accounts (brands pay for specialist facilities on WeChat for instance) virtual goods including gaming and stickers. Whilst Google has tried to diversify beyond advertising (payments, paid for content on YouTube, enterprise product sales), it has failed to change the balance of revenue. Any disruption of the advertising ecosystem represents a threat to their business.

The key points in Charles Arthur’s article:

  • Consumers are using apps on smartphones rather than searching for a given services (which puts to rest the app versus mobile web argument mobile developers have)
  • This will have a more pronounced effect as the world internet population starts to level out next year
  • New internet users in the developing world may not be worth having (from a commercial perspective ‘An ad click from the US/Germany/Japan/Taiwan can be worth from 5 cents to $1 depending on the day/season, but clicks from China/India/Brazil/Vietnam are worth fractions of a penny to maybe 1 penny’

Arthur’s assertions represent a huge change in consumer behaviour. Working for Yahoo! in the mid-naughties, we used to cite a Morgan Stanley quoted statistic that seven out of ten web journeys started with search. Search Engine Journal cites Forrester as the source of a claim that 93% of online experiences started with search.
Mobile application is just one part of a wider change:

  • Google started to see a decline in the growth rate of search volumes to about 10 per cent a year, yet the amount content to be indexed continues to rise on a non-linear scale
  • Whilst the internet usage has been expanded by cheaper broadband with wi-fi and the rise mobile devices (both feature phones and smartphones) there hasn’t been a universal adoption of the open web. Yes smartphones have apps which disrupts the open web, but in places like Indonesia a lot of new feature phone surfing netizens don’t realise they are online and only go as far as Facebook
  • Amazon has risen as a wide ranging threat to Google. If you want to buy a book, many people’s evoked set is to go on Amazon. Amazon is not only an e-tailer but a vertical search engine across an increasing number of retail categories. Eric Schmidt claimed that about 30 per cent of purchase web journeys started on Amazon, that represents a significant lost opportunity for Google

More information
Google’s growing problem: 50% of people do zero searches per day on mobile | The Overspill
10 Stats to Justify SEO | Search Engine Journal
Is Tencent leading the way or lagging behind Facebook? | Walk The Chat
In online search war, it’s Google vs. Amazon | Fortune
Google’s Eric Schmidt: “Really, Our Biggest Search Competitor Is Amazon” | Search Engine Land
Amazon Vs. Google: Understanding the buyer’s search engine | Wordtracker
Millions of Facebook users have no idea they’re using the internet | Quartz
Google Search Stats | Internet Live Stats

Links of the day | 在网上找到

Microsoft and partners revive Mac vs. PC ads — without mentioning Mac – CNET – its all a bit crap really

Taking Stock With Teens – Fall 2015 – US only research, OTT video increase is no surprise, what is how far Hulu has fallen

The subprime ‘unicorns’ that do not look a billion dollars – FT.com – Michael Moritz calling out unicorn businesses due to their risks, negative sentiment to Silicon Valley boom. No big deal except that Moritz is a former journalist who knew the likes of Steve Jobs well. He then moved to Sequoia Capital and funded businesses like Google, Yahoo!, PayPal and Zappos (paywall)

Is Tencent leading the way or lagging behind Facebook? | Walk the Chat

The CEO of one of South Africa’s largest mobile networks thinks Whatsapp is a freeloader | Quartz – interesting that WeChat clocks in at 7% usage for South Africans

HKMA warns banks about security loopholes with NFC credit cards – the Hong Kong Monetary Authority (HKMA) ordered banks Monday to conduct a thorough review of the security of their credit cards

Hong Kong Luxury Stores See Worst “Golden Week” Ever – overly dramatic but interesting

New-media firms shift attention to TV  – online a training ground for media mainstream?

The DraftKings Crash | Slate – Nevada gaming laws may make Overseas expansion a ‘do or die’ requirement

Lenovo nixed idea of selling Microsoft’s Surface Pro tablet – CNET – interesting that HP and Dell will sell it

Why mass market VR won’t come soon | GigaOM – assuming you have to run at 4K, HD would be good enough and the content could be immersive but passive like film rather than games

WSJ: NX could launch in 2016, will be Nintendo’s most powerful console ever – this is a high risk play given how the last console did

IBM Allows Chinese Government to Review Source Code | WSJ – (paywall)

The return of Radio Rentals in the smartphone era

This post came out of a couple of conversations that I had over the past few months.

Sony Trinitron TV

As of February this year Apple was sitting on a cash hoard of 178 billion US dollars, most of which is kept outside the US to ensure it doesn’t get taxed. It has made the bulk of the money from the iPhone.  However the smartphone market is changing, the growth in mature markets is slowing down dramatically, as has smartphone growth in China. The growth in developing markets is being driven by smartphones priced so low that margins are razor thin. Things are so tight that component suppliers have gone under.

Apple is at the premium end of the market but other players are trying to migrate in that direction to which means that the middle of the market and premium products are very similar in terms of industrial design.  So if one had a cheap source of capital it would be advantageous to come up with a way to stitch in clients and making it easier to onboard clients from the competition.

So when Apple launched the 6S range of handsets, this wasn’t much of a surprise

Exclusively at Apple’s retail stores in the US, customers can choose their carrier and get an unlocked iPhone 6s or iPhone 6s Plus with the opportunity to get a new iPhone annually and AppleCare+ on the new iPhone Upgrade Program with monthly payments starting at $32 (US) and $37 (US), respectively.

From a carrier point-of-view this presents a set of mixed blessings, it decouples the handset upgrade path from the consumer’s mobile carrier plan. On the one hand carriers no longer have to foot the high cost of iPhone purchases, but iPhone customers have less of an incentive to sign up to two-year contract with the likes of Verizon or Sprint which will make their cashflow less predictable in the longer term as consumers churn contracts and carriers will have get more creative with their contract incentives.

We may see hybrid deals of content, voice minutes and data – rather like cable companies or BTVision. Of course, having those kind of OTT bundles has implications for for their networks and the likes of HBO are probably not likely to commoditise their product prices so that bandwidth and be saved from a downward spiral.

Apple’s move has some advantages, but isn’t without risks:

  • Moving consumers to a lease model means a degree of predictable revenues
  • It provides with a modicum of control over the market for pre-used handsets, if they use it. This huge. Think about the roles that smartphones play in our lives for a moment; they aren’t just communications devices but give an idea of status and self expression as well. Just because cheap smartphones are for sale in the developing world doesn’t means that consumers don’t want the real thing. Apple could tap into a pre-existing informal market of channels to sell pre-owned smartphones into these markets and make their competitors hurt a lot more. It would effectively dig a trench between mid-market and premium handsets and force competitors to go to lower price points
  • It raises competitive barriers against competitors. Not that many competitors have the access to easy cheap money in order to finance this kind of scheme. If it could be done profitably by third parties; we would see the  likes of ICBC and the Bank of China setting up subsidiaries to finance Huawei phone purchases. There is little to no margin in the financing itself. For investors the opportunity cost wouldn’t be worthwhile.  Given its lack of profitability the leases can’t be securitised easily to palm the risk off on institutional investors – which was how the likes of MBNA grew their consumer finance businesses. Third parties would need to get involved in areas that aren’t their strength such as a superior supply chain and channel strategy to that held by the wireless carriers to bring down the cost per handset and ensure that the handset was available near the consumer. Apple doesn’t need to make a profit on the leasing business, it just needs to not make a loss

The risks in this move are:

  • Increased amounts of handset repairs. Many consumers today put up with cracked screens rather than having them repaired due to the cost and inconvenience involved. Going to the leasing model puts all of that back on Apple. If a third party were  to attempt it, there would be a whole service network which they would need to build out
  • Leasing agreements like this will be a magnet for organised and disorganised crime. There will be small but significant loses of handsets from false address fraud to ‘fake thefts’, Apple will be facing the kind of persistent criminal problems that face catalogue retailers to credit card companies
  • What happens when the US economy tanks and Apple faces default payments on its handset leasing programme?
  • The strategy relies on consumers seeing a continued value in regularly upgrading their handset. What led to the demise of TV rental companies was: more reliable televisions with the move from discrete components to integrated circuits, real cost reduction of TVs as they became more popular and a lack of compelling reason to upgrade once they had a colour TV. When we think about smartphones, the cost of a handset is being reduced  (at least in the Android eco-system), they are generally pretty reliable – the weak points being the easily damaged screen and chemical life of the battery and there hasn’t been significant new use cases from successive generations of handsets

More information
CCS Insight cuts global handset forecast | TotalTelecom
SMARTPHONES: Price Wars Topple Huawei, ZTE Supplier
Apple Introduces iPhone 6s & iPhone 6s Plus

#LVSeries3 Louis Vuitton Series 3 exhibition, 180 Strand, London

Having been involved in a number of events over the past couple of years where creative digital work intersected with experiential marketing I was keen to look at Louis Vuitton’s Series 3 exhibition before it closed.

Burberry tends to get the plaudits for digital experiences in the luxury sector and they do a lot of interesting work. Louis Vuitton’s initiatives like an online service that allows ladies to personalise their bag a la Nike ID.

I found it interesting that Louis Vuitton’s approach seems to have been guided by exclusivity not being the same as accessibility. There was a wealth of helpful staff, you were positively encouraged to take your own pictures – again unusual for a luxury brand, many prefer to give you content that upholds their standards.

A few touches that I really liked

#LVSeries3 Louis Vuitton Series 3 exhibition, 180 Strand, LondonLV logo motion graphics at the start of the exhibition, no real surprise right? What the designers did was remove the polarisers from the LCD screens so that the screens are apparently blank. The polariser is laid out in vertical strips at different distances and widths from the screen. This gives a kind of lenticular effect when you walk past it. This modern logo morphs through matrix-like digital noise and on to the more traditional LV design.
#LVSeries3 Louis Vuitton Series 3 exhibition, 180 Strand, London
It seems absurdly simple, but the idea of using projecting mapping techniques on a flat LED screen to emphasise how Louis Vuitton products are cut from a common material before being assembled was clever. Just because you have projection mapping technology at your finger tips means that one often looks for complex shapes like building fronts rather than a flat panel.
#LVSeries3 Louis Vuitton Series 3 exhibition, 180 Strand, London
Getting the balance right between protecting the product so that it doesn’t look grubby from being over-handled, whilst still making it accessible and tactile rather than a museum experience.

Links of the day | 在网上找到

Asian FMCG gain ground on global brands in their home market | Kantar World Panel – MNCs losing out to own brands

Alibaba just offered $3.6 billion to take over the YouTube of China | Quartz – it makes sense. Tencent has been challenging Alibaba in other areas and already has the QQ video platform. QQ however isn’t as big in terms of views as YouKu / Tudou

China’s big media challenge | Marketing Interactive – twice as many touch points required compared to just five years ago

W+K Shanghai Gets Inspirational in New Tiffany’s Campaign | AdWeek – focus on confidence rather than status in a series of documentary type videos (paywall)

Getting LEAN with Digital Ad UX | IAB – Light Encrypted Ad choice supported Non invasive ads

Twitter now shows advertisers which ads perform better | VentureBeat – smart move by Twitter

TeliaSonera accused of making €1.8bn in corrupt payments | TotalTelecom – some interesting reading

China’s middle class has overtaken the US’s to become the world’s largest | Quartz – pure numbers

China’s `Big Three’ e-commerce platforms extend lead | Kantar China – interesting how JD comes out top in the benchmarking

Facebook Goes On Privacy Offensive in Europe | WSJ – (paywall)

Aspirationals: Who are they and why they matter to marketers | Marketing Interactive – positive about outlook so more likely to consume?