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I watched Apple WWDC so you didn’t have to

There was a mix of hardware and software updates. Apple put a lot of focus on  virtual reality, augmented reality and prepping their operating systems for handling larger amounts of data.  There was work done to further optimise video and photo usage on device.

The event offered bad news for online advertisers and a number of consumer electronics manufacturers. Online advertising using retargeting or autoplay video is going to be blocked in Safari. The new HomePod speaker took aim at ‘casual hi-fi’ like Sonos, Bowers & Wilkins and Bose.

Apple is working very hard to try and understand user intent, which is one of the first pieces it needs to put in place to develop the experience of a truly programmable world. What do I mean by a programmable world? A ‘web of no web’ where device intelligence behaves as if it understands user intent like a good valet. It is moving in a stepwise manner towards this.

What was more surprising is how Apple has gone big on VR and AR creation and consumption. Whilst video post-production houses probably have the most to complain about when it comes to Apple’s Pro equipment, they are not name checked. Apple has started to move to address their concerns. The external graphics support in macOS implies that a furture Mac Pro will have the software to match hardware.

More details by platform:

macOS

The name High Sierra implied an OS update that might seem incremental to consumers, but has major technology changes under the hood.

  • Data – Apple File System as default (many features similar to Sun Microsystems’ ZFS). Faster for file swaps and giving a faster computer experience
  • Video – better quality video algorithms with smaller file sizes and integration with
  • Graphics – upgraded Metal API – Apple had been using it on machine learning applications within the OS. Metal 2 has been used to accelerate system level graphics and provides access to app developers. There is OS support for external graphics accelerators. The external graphics developer kit is based on AMD Radeon card.
  • MacOS supports VR through Metal for VR. Steam, Unity and Unreal supporting VR on the Mac. Apple seems to believe that VR and AR content is the desktop publishing of the 21st century, they have gone hard on making the best creators platform that they can
Safari
Focus on being the fastest browser experience, even in comparison to Chrome
  • Autoplay blocking – which will impact advertising network video views
  • Intelligent tracking prevention – positioned to target advertising retargeting and cross-site tracking
Mail
Productivity refinements including a split screen view
Photos
  • Uses machine learning to improve searching and photo recognition and integration with photo-editing

tvOS

  • 50 media partners integrated into TV app
  • Amazon is coming to Apple TV. Interesting move of detente between Apple and Amazon

iOS

iOS 11 – focus on underlying technologies:
  • Machine learning APIs – to help adoption of CoreML on device for third party apps
  • ARKit – to aid AR in apps. Clever work done on scaling and ambient light. This about providing a market for the content which which would be created on the Mac
  • Chinese specific features: including support for QRcodes, SMS spam filtering. Chinese users have a particular set of contexts and these innovations could become popular in the west
  • Interface tweaks in control centre and the lock screen.
Messages
  • Improving discoverability of app stickers and apps – much needed
  • Automatic synchronisation of Messages across devices, delete once, delete across all devices
ApplePay
  • Person-to-person payments as an iMessage app. Obvious competitor would be WeChat in China and PayPal in the west
Siri
  • Improved expressive nature of the voice.
  • Follow-up questions, presumably to improve context
  • Provides translation services
  • Siri integration into a wide range of apps including WeChat and OmniFocus They’ve tried to use on-device learning to try and improve context and being helpful. Siri knowledge is synched across devices. Uses web history to improve Apple News and custom dictionary spellings
Apple Maps
  • Indoor navigation for airports
Photos
  • Better image compression to save space on device. New depth API that can be accessed by 3rd party apps
  • Video autorotates a la Snapchat / Snap glasses
App Store
  • Apps now reviewed in less than 24 hours
  • First app redesign in nine years. Tweaks to improve discoverability and merchandising of apps including in-app sales
 watchOS
  • The biggest feature in watchOS 4 is the Siri-powered face. The Siri-powered watch face provides contextual information on the ‘home screen’. It takes into account past habits, time, location etc. Apple’s language around this was interesting, they described it as an ‘Intelligent proactive assistant’.

More details by hardware

Mac hardware
  • iMac – improved displays, brighter and support for 1 billion colours. Moving to Kaby Lake Intel processors. Up to 64GB of RAM on the iMac and 2TB SSD. Discrete Radeon graphics cards on larger iMacs. – big focus on VR development.
  • MacBook – Kaby Lake processors. Pro machines get updated graphics as well. The MacBook Air gets a processor boost.
  • iMac Pro – single piece machine with workstation specification including 10Gbit Ethernet. Presumably as an interim measure until the Mac Pro arrives next year. How upgradeable would the iMac Pro be, which is a key consideration for workstations
iPad hardware
  • iPad Pro – 20% bigger screen, 120Hz screen refresh rate. Doubling default memory sizes up to 512GB
 
Apple HomePod
Apple is going after Sonos and brown goods companies like Bose, Bowers & Wilkins and Bang & Olufsen. The Siri functionality is a hygiene factor rather than a serious competitor to Amazon Echo. There was a big emphasis on the privacy functionality of Siri in HomePod
Further reading

WWDC 2015: you know the Apple news, but what does it mean?
48 hours with the Apple Watch
Eight trends for the future: web-of-no-web
Eight trends for the future: contextual technology

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2016: crystal ball gazing, how did I do?

Here are the predictions made at the top of the year

I expect Uber will continue to funnel money into China and still get sand in its face. Quite what this means for Lyft I am not so sure.

Uber raised more money, realised that things still weren’t improving and then got a face saving exit from the Chinese market. I’ll call that a win.

Twitter gets a change of management, but that doesn’t do any good… All of this would be bad news for potential advertisers and their intermediaries in the advertising and PR world.

God, where do we start with Twitter. It has had extensive management churn and a big staff lay-off. I don’t think that my own view about a change of management is correct though. I envisaged this as a strategic proactive more by the board rather than the current rotating door. I have been impressed by how well Twitter advertising has held up. Twitter might look like the Yahoo! of social media, but it still holds a lot of weight with the mainstream media which still counts for something.

Fintech bubble that will take good ideas and bad ones down together. Banks are currently considered to be ripe for disruption. One of the key problems with this is that technologists think it will be easy to sweep aside regulations that banks operate under.

This one is still percolating out. Banks are looking particularly at Blockchain as the basis of a better transaction ledger/database. Informally, I have heard that VC funding has largely dried up on fintech start-ups; but the other shoe has yet to drop.  Zopa applying for a bank licence and becoming a bank felt like a watershed moment.

The internet in the EU will become increasingly regulated. At the moment the European Union is succumbing to The Fear. 

The fear has grown beyond terrorism to being overrun by immigrants (some of whom will be terrorists). The UK is well on its way to putting into law some of the most Draconian web laws in the western world from porn filtering to sharing citizen web history access with a wide range of government agencies.

Overall this has made less progress than I expected because Brexit became the existential challenge that the EU members will seek to vanquish.

We will have reached peak smartphone and tablet. China has now reached replacement rate for devices, there is a corresponding lack of paradigm shifts in the pipelines for smartphone design and software. Tablets have shown themselves to be nice devices for data consumption but not requiring regular upgrades like the smartphone or replacement for the PC.

We’ve certainly reached peak tablet. Smartphones are taking a longer while to shake out. What we are seeing is declining margins in smartphones. Apple increased its industry share of profits to 90% despite:

  • Making a weak update to the iPhone 6S
  • Having a declining market share
  • Having a higher cost in terms of bill of materials

There were some one-off factors such as the Samsung Note 7 recall and the collapse of Hanjin Shipping which curtailed the supply of some handsets.

VR in 2016 will be all about finding the right content. VR won’t work in gaming unless it provides e-gaming athletes with some sort of competitive advantage, if it does then gaming will blow things up massively. Gaming will not be the only content vehicle for VR, it needs an Avatar-like moment to drive adoption into the early mainstream.

There were two things that surprised me about VR in 2016.

  • It look Sony so long to get VR on to the PlayStation, it will be a while for us to see the impact of gaming on the use of VR. It certainly provides immersive experiences, but does it provide e-athletes with competitive advantage?
  • China blew the amount of VR headsets available out of the water, but there has been a corresponding dearth of content. The stuff on YouTube is nice demo-ware, but where is the ‘Breaking Bad’ of VR

One thing that people aren’t talking about is the role of VR googles as a replacement for a large TV set. I have heard that some of the most used apps for VR is Netflix.

Older predictions
2016: just where is it all going? | renaissance chambara
2015: crystal ball gazing, how did I do? | renaissance chambara
2015: just where is it all going? | renaissance chambara
2014: crystal ball gazing, how did I do?
2014: just where is it all going? | renaissance chambara 
Crystal ball-gazing: 2013 how did I do?
2013: just where is it all going?
Crystal ball-gazing: 2012 how did I do?
2012: just where is digital going?
Crystal ball-gazing: 2011 how did I do?
2010: How did I do?
2010: just where is digital going?

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The internet of hacking or WTF is happening with my smart home?

Mirai – is a bot network that is powered by a range of devices including infected home routers and remote camera systems. It took over these systems by using their default passwords. The network of compromised machines is then targeted to overload a target network or service. Last week the Dyn DNS service was targeted which restricted access to lots of other services for users on the east coast of the US.

DNS is like a telephone directory of internet destinations, if no one knows where to go it becomes a lot harder to get in touch.

DDoSing
Mirai didn’t spring miraculously out of thin air. It finds its history in passionate gamers who used distributed denial of service (DDoS) attacks to slow down or even kick opponents off online gaming platforms. Eventually the gaming companies got hip to it and went after the cheaters, not to be outdone the cheaters went after the gaming companies.

Taking a service offline using DDoS became a source of extortion against online banking and e-commerce services. Attacks can be used as a form of ‘digital hit’ to take out opponents or critics like online security commentator Brian Krebs.

Computing
Moore’s Law meant that computing power has become so small and plentiful that it is surprising what we often have in the palms of our hands. The first Cisco router was built on the circuit board of a Sun Microsystems workstation. Home routers now are basically small computers running Linux. A CCTV camera box or a DVR are both basic PCs complete with hard drives.

Back in 2007, BlackBerry co-founder Mike Lazaridis described the iPhone as

“They’ve put a Mac in this thing…”

The implication being that the power of a sophisticated PC was essentially in the palm of one’s hand. The downside of this is that your thermostat is dependent on a good broadband connection and Google based cloud services and your television can get malware in a similar manner to your PC.

Security
For a range of Chinese products that have been acknowledged as part of the botnet; the manufacturer acknowledged that they were secured with a default admin password. They fixed the problem in a later version of the firmware on the device. Resetting the default password is now part of the original device set-up the first time you use it.

The current best advice for internet of things security is protecting the network with a firewall at the edge. The reality is that most home networks have a firewall on the connected PCs if you were lucky. The average consumer doesn’t have a dedicated security appliance on the edge of the home network.

Modern enterprises no longer rely on only security at the edge, they have a ‘depth in defence’ approach that takes a layered approach to security.

That would be a range of technology including:

  • At least one firewall at the edge
  • Intrusion detection software as part of a network management suite
  • A firewall on each device
  • Profile based permissions across the system (if you work in HR, you have access to the HR systems, but not customer records
  • Decoy honey post systems
  • All file systems encrypted by default so if data is stolen it still can’t be read

Processes:

  • Updating software as soon as it becomes available
  • Hard passwords
  • Two-factor authentication

Depth in defence is complex in nature, which makes it hard to pull off for the average family. IoT products are usually made to a price point. These are products as appliances, so it is hard for manufacturers to have a security eco-system. The likelihood of anti-virus and firewall software for light bulbs or thermostats is probably small to non-existent.

The Shenzhen eco-system
Shenzhen, just across the border from Hong Kong has been the centre of assembly for consumer electronics over the past 20 years. Although this is changing, for instance Apple devices are now assembled across China. Shenzhen has expanded into design, development and engineering. A key part of this process has been a unique open source development process. Specifications and designs are shared informally under legally ambiguous conditions – this shares development costs across manufacturers and allows for iterative improvements.

There is a thriving maker community that allows for blurring between hobbyists and engineers. A hobbyists passion can quickly become a prototype and then into production . Shenzhen manufacturers can go to market so fast that they harvest ideas from Kickstarter and can have them in market before the idea has been funded on the crowdsourcing platform.

All of these factors would seem to favour the ability to get good security technologies engineered directly into the products by sharing the load.

China
The European Union were reported to be looking at regulating security into the IoT eco-system, but in the past regulation hasn’t improved the security of related products such as DSL routers. Regulation is only likely to be effective if it is driven out of China. China does have a strong incentive to do this.

The government has a strong design to increase the value of Chinese manufacturing beyond low value assembly and have local products seen as being high quality. President Xi has expressed frustration that the way Chinese manufacturing appears to be sophisticated, yet cannot make a good ballpoint pen.

Insecurity in IoT products is rather like that pain point of poor quality pens. It is a win-win for both customers, the Chinese manufacturing sector and by extension the Party.

More Information
WSJ City – Massive Internet Attack Stemmed From Game Tactics
Your brilliant Kickstarter idea could be on sale in China before you’ve even finished funding it | Quartz
Asus lawsuit puts entire industry on notice over shoddy router security | Ars Technica
Europe to Push New Security Rules Amid IoT Mess — Krebs on Security
Why can’t China make a good ballpoint pen? | Marketplace.org

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The QRcode post

A few years ago, I was involved in a project that used QRcodes on OOH (out of home) activity for a retail launch. QRcode scanners varied in performance. In addition you had to think about:

  • Contrast – did the QRcode stand out?
  • Relative aspect – would it be too big or too small for the audience to scan?

In the UK, QRcodes are seen by marketers as old hat (but then they didn’t ‘get’ them in the same way that Asia did). Other people don’t really understand how to use them.
QRcode 101
Above is the picture of the local cafe around the corner from my office. The QRcode is too disjointed and blurred to read. I asked a member of staff about it and he told me that he thought it was some type of logo…

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WWDC – what did it all mean?

I watched the few hours of keynotes at Apple’s Worldwide Developers Conference. I also read some of the resulting analysis and wondered if we’d been watching the same event.
Cómo ver la WWDC 2016 en vivo en iPhone, iPad, Mac, Apple TV
So thought I would think about the event carefully and come up on my take of what it all meant. This is a bit later than I originally planned to publish it.

Firstly, there was no change in direction for Apple from a strategic point-of-view. Apple has been clear about its direction, it is the ‘how’ which is the mystery.

Over the past few years, Apple has focused on the integration of its devices. The reason why there isn’t one OS*, a la Windows 10, is that the different form factors have different contexts. Cross-pollination of services only takes place where it makes sense, which is why Siri has taken a while to roll out.

The first big thing is APFS – a new file system for all of Apple’s devices. This builds on upon a feature set of ZFS which was a file system developed by Sun Microsystems for its Solaris UNIX operating system. Solaris runs on large enterprise computers where the prevention of data corruption and handling a large amount of file changes simultaneously is very important. Like ZFS, APFS supports encryption, granular time stamping, fast file management and has improvements in data integrity. When it’s fully finished it should make encryption on devices easier to manage and provide the user with more control. It should also help with syncing data across devices and the cloud.

The interesting thing is how this technology will scale over time handling multiple devices and form factors working seamlessly from a common database. Like many of there other technologies this is an extension of Apple’s Continuity offering and future integration with a wider IoT offering.

When Steve Jobs launched Mac OSX 10.0 in 2001 he described it as being the OS for the next 15 years. At the time the original MacOS was showing its limits. The UI was colour but hadn’t really moved on that much since System 7.5. The operating system wasn’t multi-tasking. The internet felt kludgy even though it performed well on the hardware at that time. Looking at OSX / macOS now, the operating system it feels fresh. The tweaks and changes under the hood keep the performance hub and the features comparable with the rest of the Continuity eco-system. macOS also doesn’t seem to be seriously threatened by iOS ‘pro’ devices.

iOS 10 was important to me for its embrace of messenger-as-a-platform. Apple innovates within its own Messages apps with some UI gimmicks. More importantly, notification real estate that was once the exclusive preserve of the Apple dialer. This allows you to accept calls from the likes of Skype, WeChat or Slack from the lock screen. This follows Apple’s model of using it’s own apps to work things out and then open up the function once it is mature. Apple’s own Messages app includes a number of features including:

  • Simple chat bot-like functionality
  • Swipe to read on messages to prevent shoulder surfers from reading messages
  • Messages app takeover emotions
  • More emoji / sticker like icons

Apple Pay roll-out – continued geographic roll-out makes sense. Apple Pay isn’t about building a rival payment system a la PayPal. Instead, Apple is trying to build more touch points with the user. The level of usage doesn’t matter too much from that perspective. Geographic roll-out to Hong Kong and more European countries makes sense. The more exciting development is two-factor authentication for e-commerce payments on compatible sites using the Apple Pay infrastructure. This is big for shopping on both Mac and iOS-powered devices.

Thinking differently about intelligence. Unless you have been living under tech industry equivalent of a stone, you’ll be aware of cloud companies like Microsoft, Amazon, Google or Baidu using artificial intelligence techniques to drive device function. Apple hadn’t been as visible in this space up to WWDC. The reason for this is due their rigorous approach to user and device privacy.  There were two approaches to this:

Having the mobile devices GPU to perform relatively simple neural-network computing. This can learn user preferences or intent over time and be more helpful

Making Siri more intelligent by looking at the behaviour of users encrypted, salted with false data and aggregated up. Differential Security is the process of acquiring this data. In the second world war, the Allies cracked the cryptography derived from the Enigma machine. But that was only the first part of the challenge. In order for it to be useful the Enigma team used statistics to hide any usage of the intelligence hiding reactive activity in the midsts of statistically expected ‘normal’ behaviour.

Differential security is kind of similar to this. All the data is encrypted, the phone sends a mix of false data and real data. When Apple looks at aggregated data they can see the false data as being false, but can’t tell which users data is false at a given time.

Apple’s WatchOS 3 is interesting because of the performance boost it gives the wearable. The difference is really noticeable. The boost in performance is due to Apple having more memory to use than it had originally allowed for. This provides a more refined experience. Much of the UX enhancements were focused on fitness.

From a developer perspective there were a few things missing:

  • Apple had no new pro-level hardware announcements
  • Apple later walked away from Thunderbolt displays, saying that 3rd parties were now making great displays. This reminded me of when Apple stopped making printers, it felt permanent, though there is a lot of speculation about a forthcoming Apple 5K display – we’ll see
  • Apple still needs to do more work on integrating its Swift programming language throughout its OS’
  • Given Twitter’s peak in growth, Apple didn’t show how Siri would cope in a post-Twitter world

Finally the two-hour keynote was a love letter to China. At every opportunity Tim Cook mentioned the Chinese market, support for China-specific items like language and called out Chinese apps like WeChat.

* From a technical point-of-view; tvOS, iOS, and macOS all share underpinnings based on NetBSD and a Mach micro-kernel.

More information
Apple Pay supporting banks | Apple Support Documents
Apple finally opens Siri to third-party developers | TechCrunch
Apple rolls out privacy-sensitive artificial intelligence | MIT Technology Review
What is Differential Privacy? A Few Thoughts on Cryptographic Engineering
Digging into the dev documentation for APFS, Apple’s new file system | Ars Technica
Apple File System Guide | Apple Developer documentation
Mac & iOS Continuity | Apple

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June 2016 online marketing and technology research slides

Here is a copy of the slides that I pull together (when I have the time) each month of publicly available data that would be of use.

This month I have some new data around search which came from disclosures at Google I/O in terms of search volumes. We talk about social as if search has gone out of style but its growth is still staggering, driven by mobile device penetration.
Google global search volume
Looking at global search revenue over time, Google’s monopoly position becomes immediately apparent.
Global Search Revenues
More details about me here.
Slide20
Full presentation available for download as a PDF on Slideshare

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Online advertising and technology data points – focus on China

I have been pulling together slides for me that were useful for the work that I have been doing. I thought it would be worthwhile sharing these slides with a wider audience.

This month, I have selected a few slides that shed a light on advertising and consumer behaviour in China.
May online marketing
Looking at platforms it is hard to over play the importance of Tencent in the Chinese internet. Looking at mobile behaviour Tencent is responsible for at least four of the top ten properties: WeChat, QQ, QQ Browser and Tencent Video.
May online marketing
If we look at two Chinese internet companies Tencent and Netease we can see how the companies have massively increased the number of non-game apps that they provide to keep consumers in their eco-system for their digital lives.
May online marketing
(Microsoft’s high number is driven by a number experimental project apps and enterprise apps). What this means is that the mobile OS becomes less important, which is one of the reasons why western brands from Samsung to Apple have been hit in the market. Their platforms give them less leverage.

Tencent’s WeChat is one of the most popular methods of payment in China
May online marketing

If we look at advertising spend in the Chinese market we can see that digital and radio advertising spend over-indexes. In some ways this is surprising. Online content is huge and historically the government controlled traditional media much more tightly than online media – to the detriment of watchable content on the television. More recently, government regulation has tightened across platforms.
May online marketing
Print advertising only slightly over-indexes in comparison to digital or radio. On the face of it there looks to be a massive opportunity in television advertising.

If we look at the media market consumption habits two things immediately stand out. Television and radio are largely holding their own in the face of rapidly growing digital consumption. The rapid growth in digital consumption is being driven by non-PC devices.
May online marketing

If you want to know why Huawei has partnered with Leica to boost the perception of its smartphone camera function, one of the factors involved is the massive growth of photography in Chinese mobile behaviour. This is especially interesting when one compares it to messaging and social – WeChat the largest mobile social platform is all encompassing in its functionality and place in modern Chinese life. A second factor is the way manufacturers are trying redefine the premium smartphone sector, at a time when innovation and experiential difference have become incremental.
May online marketing
May online marketing


You can see the full presentation here

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WeChat Life Report

Nice collection of consumer behaviour data on WeChat. Over the past year WeChat has expanded the services that it provides to include Skype like conference calls, which changes and expands the behaviour in this report. (Presentation on Slideshare)

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Churchill Club on the increasing use of learning machines

I don’t want to get into an argument of what an AI actually is, so hence the title change – but interesting watching.

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WWDC 2015: you know the Apple news, but what does it mean?

I watched the introductory keynote to Apple’s Worldwide Developer Conference (#WWDC2015) with my colleague Ed. The overall take was one of ‘is that it?’. Even Apple can’t do miracles all the time

I thought that it was worthwhile picking through the announcements to see what they mean.

With OS X, it was like some of Apple’s earlier releases like 10.2 ‘Jaguar’ which was a discernible step up in performance and stability in comparison to 10.1 ‘Puma’ or 10.6 Snow Leopard in comparison to 10.5 Leopard. It gives Apple an opportunity bed in the flat design of Yosemite, make third party application development easier and improve performance across the OS. (As an agency person, the idea of more powerful integrated development tools that would provide a better performing user experience on iOS and OS X was interesting). The name El Capitan implies a a derivative relationship to Yosemite. (Yosemite is the national park and El Capitan is a granite monolith at the north end of the park).

There has been tightening up of the interface design, which Apple’s own news releases allude to:

Mission Control®, the quickest way to view all open windows, has a cleaner design so you can find the window you need even faster.

Apple has also looked at improving internationalisation of the operating system with new Japanese and Chinese system fonts and improved keyboards.

Part of the improvements in services like Spotlight were part of the ongoing war of attrition with Google. Pinned sites and performance improvements in Safari where aimed at Google Chrome.

At each step of the announcements Apple was at pains to emphasise its efforts in providing users with privacy. Apple genuinely believes that privacy is a point of differentiation, not just amongst developers, but also amongst consumers living in a post-Snowden world.

The services put into OS X (and across iOS) try to be smarter and anticipate the needs of a user. Natural language search in Spotlight has similar aspirations to the kind of experience Facebook aimed for when it launched its Graph Search functionality in 2013.

These are baby steps to position Apple products as the front door of a programmable world, ‘a web of no web’ where device intelligence behaves as if it understands user intent like a good valet.  In the improvements of iOS 9 Apple was much more explicit in describing its aims:

Siri features an all-new design in iOS 9, contextual reminders and new ways to search photos and videos. Proactive assistance presents the most relevant information without compromising users’ privacy and suggests actions at a particular moment — even before you start typing — automatically suggesting apps to launch or people to contact based on usage patterns, and notifying you when you need to leave for appointments, taking into account traffic conditions. iOS 9 can even learn what you typically listen to in a certain location or at a particular time of day, so when you plug in headphones at the gym or hop in the car before work, it can automatically display playback controls for your preferred app.

These baby steps towards a programmable world are important, mainly because the Apple Watch is currently a solution looking for a problem and would make much more sense in the context of a programmable world. Looking at the Apple search interface on iOS 9, Foursquare’s area exploration app looks particularly vulnerable as search seeks to recommend coffee shops and the like in the immediate area surrounding the user.

If one looks at the things Apple is doing in home automation and wireless payments it is all about producing a frictionless process needed for a programmable world to happen. And iOS and OS X hint at the next stage of trying to build in intelligence (at least in small increments).

Apple Pay

Apple Pay is most interesting when one considers it as part of a wider play by Apple to reduce the processes that act as friction in a programmable world. Despite the high profile launch, it hasn’t taken off in the US as dramatically as anticipated by pundits. It’s expansion to the UK is likely to be a steady slow burn. It will be interesting to see if Samsung’s phone payment system due in the autumn (fall for our American readers), will do a better job of moving payment technology along. The feature of being able to use your iPhone as an Oystercard substitute in an emergency on Transport for London has a certain amount of appeal that would be balanced against the likelihood of being mugged for the phone depending on which tube station you are using. My home station of Mile End is likely to be a laggard for just that reason.

The News app

The News app on iOS take direct aim at Flipboard, which is hardly surprising given Flipboard’s previous overtures to the likes of Samsung in the past, offering media access as a differentiator on the Android platform. Apple’s News Format™ challenges responsive web design and provides publishers with alternative to full-scale app development. The curation engine behind News app could be as important in the future as Techmeme, Hacker News or Google News are today – which makes it important to communications professionals as a distribution channel for coverage and own brand content. It is only like to be power news junkies who are likely to stick withn RSS readers like feed.ly or Newsblur.

Apple Music

I won’t comment on the cringeworthy Dad dancing that happened on stage, or the cliched advertisement Apple showcased. Apple Music service was a clever mastery of marketing over technology. Whilst the keynote was going on my colleague James had been persuading his mobile carrier to raise his monthly data package up to 15GB in order to cover his streaming of music. It was with this in mind that I thought about Apple’s new mobile application. It was interesting that streaming was positioned as a mobile app only thing, in stark contrast to to the likes of Spotify, Pandora and Soundcloud which provide desktop streaming (which is important for the millennials that I work with).

The interface reminded me initially of the Chinese app: Doumi which goes to show that this isn’t just about Apple versus Spotify and Pandora, but Apple against a range of services throughout the world. What the K-pop and Mando-pop playlists are like will be as important as whichever ‘hottest band in the world’ Zane Lowe latches on to this week. WWDC presented a very white liberal middle class view of what good music is with the launch of Beats 1 – a clone of BBC Radio 1 FM which is available around the world for free thanks to the British TV licence fee.

The curation feature felt a bit like back to the future for iTunes which used to have artists curate their favourite songs in a playlists of tracks that you could purchase, and users like you could share lists of tracks curated around genres or ‘special moments’ as Jimmy Iovine called it, like commuting, exercising or setting a mood in your home. In the office, this curated list will have to compete with Spotify, random play on my iPod and YouTube playlists depending on how the mood catches us.

The social aspects of Apple Connect were interesting as an assault on Bandcamp, Soundcloud and a plethora of services which allow musicians to build up social and email contact databases. I am not convinced Apple will give musicians the same ability to build a listener relationship programme in the same way.

A second part of Apple Connect is if it will allow labels or brands to build profiles? In certain genres of music where the artists may have several or shifting identities, have profiles build around labels that have a certain sound or producers and remixers would be more important. Brands such as Starbucks and Battersea Dogs Home have used music curation effectively in the past as part of their marketing campaigns, will Apple Music provide a similar opportunity?

More information
Apple Announces OS X El Capitan with Refined Experience & Improved Performance | Apple Press Info
Facebook Announces Its Third Pillar “Graph Search” That Gives You Answers, Not Links Like Google | TechCrunch
In the Programmable World, All Our Objects Will Act as One | Wired
Apple Previews iOS 9 | Apple Press Info
Apple Announces News App for iPhone & iPad | Apple Press Info
Introducing Apple Music — All The Ways You Love Music. All in One Place. | Apple Press Info

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The Amazon Dash button post

At the beginning of this month Amazon launched an addition to their Dash ordering hardware with Dash buttons. There was a lot of incredulity amongst the media heightened by the unfortunate timing which overlapped with April’s Fool Day.

Why the incredulity?

I would break the cynicism down into two broad buckets:

  • Dash buttons have a very singular usage / use case, narrower even the Yo! app which was a bit of a tech fad last year. Critics are at best uncertain that consumers would use them? I generally buy toilet roles every 4-6 months, do I really need a button for that?
  • Dash buttons imply that the hardware required is ridiculously cheap. How many boxes of washing powder, packets of Mac & Cheese or toilet rolls would be required for a button to break even?

Business perspective

Rather than ripping into this into too much depth I thought I would share Benedict Evans’ interesting hypothesis about the Amazon Dash button:

Amazon is trying to eliminate both vendor and brand decisions, and turning itself into a utility company – get your house connected to power, water, gas and Amazon. And choosing which commodity product you need is just another piece of friction to be removed by Amazon’s kaizen

There are some interesting directions that come out of this view point. Let’s break Benedict’s analysis down chunk-by-chunk:

  • Eliminating vendor decisions: there are two prongs to this. Firstly, it would reduce the basket size for supermarkets and also reduce impulse purchases. Let’s think about the Walmart ‘beer and diapers’ retail urban legend for a moment – if you weren’t shopping for the diapers, you aren’t likely to have picked up the beer next to it as you would have had no reason to go near those shelves. By implication it is also an attack on some of the categories carried in convenience stores. Given that the button is about ‘just-in-time’ shopping it implies that the users are not likely to have rooms in their lives for big box retailers or CostCo. The buttons are likely to aimed at urban dwellers rather than the suburbs were larger homes and larger vehicles to do the big box store shop are the norm – Sam’s Warehouse is safer than Walmart in this scenario
  • Eliminate brand decisions: since sales are diverted from supermarkets this also affects their private label sales, especially where they are acquired by accident as lookalikes stacked next to well-known brands. Challenger brands find that switching becomes much harder as they can’t intercept the customer at the point-of-intent through shopper marketing and the opportunity cost for the consumer gets raised due to the comparative nature of the friction in purchase.  It also begs a question about how much it affects the share price of WPP and other marketing combines who have spent big on shopper marketing acquisitions over the past few years. Do buttons offer a net gain or loss of value to them? I do know that the button puts Amazon in a much more powerful position versus vendors in terms of discount pricing to retailer and warehousing. The key to understand the power  that Amazon would bring is ‘choosing which commodity product you need…’. The very idea of a product being boiled down to a commodity buy would scare the living daylights of the average brand manager in an FMCG mega-corp
  • Turning itself into a utility: for Amazon this is about locking the consumer in via Prime to the consumer life. At the present time, logistics costs have been an increasing proportion of the cost of sales for Amazon, there must be a hope that the scale of grocery shopping will bring down the price of Prime and drive profits higher?

There is no reason why the likes of Tesco, Ocado or Iceland couldn’t have done this. The wider Dash technology would make it easier for consumers to do grocery shopping and reduce the friction of online purchases. Instead they seem to have wanted to reduce cashier numbers inshore and focused on self-service tills. Time will tell if they made the right technological choice.

What about the user?

This is designed to make the consumers life easier and I can see how it makes purchase of otherwise annoying to shop for items frictionless, but it only works within reason. You can’t have a wall of buttons on the front door of your fridge freezer and just when do you press the button in the bathroom to order up more razor blades or toilet roll? What happens during the run up to Christmas when Amazon has had sub-optimal performance with regards deliveries on occasion? What is the buying frequency required to make the button habit forming, used without thinking about it, without consideration. When does the opportunity cost for the consumer tip in their favour regarding button usage?

What I don’t have yet is a clear understanding on depth and breadth of the customer problem being solved by the Dash button.

Product design

The original Dash device was interesting because it represented a rejection of the broader theme of convergence where functionality is subsumed from dedicated hardware into a software layer running on a computer, via a web browser, tablet or smartphone. Instead Dash is a shopping appliance and wouldn’t look out of place in a cupboard full of Braun kit.

The Dash button represents a further evolution of specialist hardware, a brand-specific, tactile hardware interface. It mirrors software like IFTTT’s ‘Do’ application, the Yo! messenger app and the Dimple smartphone button project.

For non-food products like toilet rolls that come in a plastic bale that is quickly discarded, there may not be a barcode to scan in on your Dash device. Instead you would have to ask for a new pack of Charmin’ or more Mach3 razors. Processing each voice message is expensive, which makes the opportunity cost around creating dedicated buttons for certain classes of product much more attractive. Amazon first and foremost is a data-driven company, they will know which product categories that they want to have buttons for. However, what makes on an Excel spreadsheet doesn’t always make sense to the consumer…

More information
Amazon Dash button
Benedict Evans newsletter edition 106
Investing in smart logistics | Fidelity Worldwide Investments
Amazon, in Threat to UPS, Tries Its Own Deliveries | WSJ (paywall)
Supply Chain News: A 360-Degree View of E-Fulfillment Part 1 | Supply Chain Digest
Amazon joins numerous startups in building delivery networks to disrupt Fedex and UPS. | DataFox
The Amazon Dash post
Dimple smartphone button project | Indiegogo
SpinVox: the shocking allegations in full | The Kernel

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Smart home: is all we want is a better burglar alarm?

The Bluetooth Special Interest Group put together some PR-able research on what consumers think about the smart home.

Methodology
First of all the methodology:  online survey of over 4,000 US, UK and German consumers. The sample size is better than many, however I don’t know if the sample was self-selecting or what kind of biases might be in there. Since it was gathered solely online one has to have a certain amount of skepticism on sample make-up.

The nature of the questions means that answers are prompted which would again affect consumer attitudes rather than open answers which are then categorised.

Finally, some cultures (like the Japanese) are much more accepting of technologies than others. Home ownership differences will also add into the mix depending on the depth of capital expenditure required to deploy a given technology. Renting is much more common in Germany, the UK has an aspiration to purchase.

How valid are consumer opinions?
In evolutionary products such as a new chocolate bar or toilet roll, consumer opinions on developments make more sense than a largely unwritten future a la the smart home, as Steve Jobs is reputed to have said:

“It’s really hard to design products by focus groups. A lot of times, people don’t know what they want until you show it to them.”

On to the results
They put together some nuggets of data from the questions as diagrams, the most interesting was
Print
Ease-of-use is an interesting, but largely predictable response. I guess useful was assumed rather than asked in this question.

There was a comparative lack of interest in smart appliances in comparison to smart environment controls (lighting, HVAC and home security), I suspect that this is partly because ‘smart’ technology has rolled out first in offices with touch control A/C and motion-controlled lighting – where respondents have been exposed to it.

The thing that puzzles me is why one would want to control some of this technology via the internet. Something like smart lighting doesn’t need to connect to a cloud but instead use local sensors whether it is a Bluetooth MAC address or infra-red heat signature that moves.

More information
From Sci-Fi to Reality: Almost Half of Consumers Think The Smart Home Will be Mainstream in Five Years
Bluetooth SIG (Special Interest Group)

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O2O (online to offline) or what we can learn from the Chinese

My friend Sam Sun used to flag up O2O as the most important trend he saw when we worked together on mainland Chinese campaigns. O2O means online-to-offline. An integration of digital marketing tactics with marketing to drive retail footfall.

In China, there is real consumer demand for this type of marketing. Tencent surveyed WeChat users and found out that 13 per cent of them would prefer to have O2O adverts in their moments (think a stream of friends Tumblr accounts or Facebook’s news feed).
wechat_moments_advertising_consumer_preference

There is a whole eco-system that the Chinese can tap into.

QRcodes have greater customer acceptance in Asia than in Europe, where despite the efforts of Pepsi and other brands to encourage consumer adoption, it has been tepid at best. QRcodes are often confused for barcodes and take-up is a fraction of that in other countries like Japan. By comparison here is the picture of a real estate advert on the table of a Chinese fast food restaurant in Shenzhen.
Ridiculiously small QRcode on these property ambient ads

In-store wi-fi in the UK is often clunky, poorly run by a major carrier like EE or a specialist provider like The Cloud. By comparison, in China, Tencent’s WeChat provides a turnkey solution for retailers, restaurants and bars to provide wi-fi and build their social following in a relatively painless manner for the consumer. (Though the software used by the retailer needs regular updating to keep up with Tencent’s ambitious development of the platform).

On the face of it however China isn’t the most promising market for O2O. It is a vast, diverse country, which makes it hard to build a truly national network of retail outlets. It has a dominant e-commerce platform this is more like eBay than an Amazon in that it doesn’t compete directly with its merchants. Secondly, the cost of labour and the huge funds available to internet companies mean that building a logistics network is more likely to succeed than it would do in a more expensive country like the UK or US.

Contrast this with the west, where Scott Galloway predicts Amazon’s demise because of the unsustainable cost of its product delivery system. Galloway hypothesises that ad-hoc logistics networks based on the sharing economy a la Uber and clicks and mortar businesses like Tesco offer a better alternative. Apparently doing the warehousing towards the edge is more cost beneficial than the Amazon model.

In the west, we seem to be on the cusp of a range of technologies that could make indoor location, identity and marketing a whole lot easier.

Hong Kong developers Green Tomato, have used ultrasonic signals and low power Bluetooth to allow applications to interact with their surroundings from sports check-ins to shopping mall navigation.

Low power Bluetooth beacons have been experimented with by retailers for encourage mobile augmented shopping and by organisations including Japanese Railways to aid indoor navigation. CSR and other companies have talked about using wi-fi as an indoor navigation aid. Further out quantum technology offers highly accurate GPS type location finding within buildings. All of this technology has the potential to further move O2O further forwards, if the user experience is made sufficiently simple and seamless. In the meantime the humble QRcode soldiers on connecting consumers and retailers in Asia.

More information
WeChat Adds Wi-Fi Solution to Public Accounts | Technode
China consumers voice their preferences for WeChat Moments ads | Resonance China
Proposes new indoor requirements and revisions to existing E911 rules | FCC
New indoor positioning system lets you do Batman-like echolocation on your phone | ExtremeTech
CSR claims it will be able to fix your indoor location accurately | VentureBeat
UK military creates quantum compass that could be the successor to GPS | ExtremeTech
JR Rolls Beacon Navi for Tokyo Station | Wireless Watch Japan – interesting internal navigation application of beacon (low power Bluetooth technology)
WiFi Chip Tracks Indoor Location | EE Times
Five examples of how marketers are using iBeacons | Econsultancy
Mapping Our Interiors – NYTimes.com – interesting business model by IndoorAtlas
Grindr – Lisa Page – HyperIsland – really interesting insights on LBS design
Green Tomato Limited

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2014: crystal ball gazing, how did I do?

For the past few years I have been thinking about where digital is going and what it all means. At the end of last year here were my projections

Amazon won’t do drone delivery in 2014 – Whilst trials of drone deliveries have been ongoing and drones seem to be getting more mainstream thanks to companies like DJI Amazon hasn’t done deliveries yet. In addition, the FAA in the US started to regulate commercial drone usage, which is likely to slow down adoption in the short term, while providing a stable legal framework of operation in the longer term.

Small data – Not so much an explicit interest in smaller data sets for meaningful things, but the Hortonworks IPO had an almost Netscapean quality to it with shaky revenue streams and a healthy share price bounce when it came to market. It also made Silicon Valley nervous as companies were concerned about negative perceptions toward the big data ‘sector.

Offline to online integration – O2O seems to be a bigger thing in China and other east Asian markets with ‘mobile search keywords’ put into adverts and TV programmes for years. The QRcode seems to be a uniquely Asian form of integration largely abandoned by western developers – mainly because they didn’t seem to use them in as imaginative a manner compared to Tencent et al. Lower power Bluetooth beacons are still experimental. Weve the joint company set up by the UK wireless carriers to provide contextual data about consumers to integrate online and offline marketing is running at a loss and has abandoned peripheral business opportunities in mobile wallets/ m-payments.

Algorithmic display advertising – there are a number of ways in which greater data is being brought to bear on programmatic ad spend but algorithms weren’t the biggest thing shaping the market this year. Major brands seem to have developed a distrust of the agency trading desks and the lack of transparency into market data. Instead of giving agencies an unfair advantage and allowing them to play both sides of the trade, they are bring the trading desk in-house.

Mobile display advertising gets a radical reduction in formats – at the time I wrote this prediction, I had been concerned about clickthrough rates and mistaken clickthroughs, so I considered a reduction in mobile formats to just the ones that worked best like the page takeover. I didn’t forsee a bubble economy driving mobile display revenues around games apps. This may come to a head soon as western consumers seem to be less open to downloading to new apps according to research by Deloittes.

Content marketing on OTT platforms – WeChat has evolved in leaps and bounds with some amazing campaigns coming out in China, Burberry has worked with Tencent to push the envelopes on their campaigns and have included live webcasts. We haven’t seen so much of this happening with campaigns aimed at western consumers, but one brand springs to mind Vivienne Tam who ran a super model contest on the platform including a voting function and a special blog covering activity around New York Fashion Week as a separate tab on the account – all in English.

Chinese technology brands will finally be successful outside China – It’s still early days, but we’ve seen Lenovo and other Chinese brands demolish Samsung’s share of the smartphone market in the developing world. WeChat has expanded into India, Spain and South East Asia. OnePlus and Xiaomi have started selling direct in Europe, Singapore, Indonesia, Malaysia and Hong Kong. Alibaba had a monster IPO and Baidu bought into fast start-ups like Uber.

Privacy issues won’t change much with consumers – Back at the end of last year I didn’t expect the Snowden story to continue to echo onwards. On the surface things didn’t seem to change with consumers, but there has been sufficient consumer interest that technology vendors are addressing (some) consumer privacy needs much to the chagrin of the law enforcement/military industrial complex. This privacy experience hasn’t been universally enjoyed (depending on country regulations) but things are changing.

Technology company workers are the new bankers – the tech worker bus protests that started at the end of December 2013 mushroomed, so by August 2014 Westboro Baptist Church got involved. Uber’s surge pricing and Snapchat’s frat boy CEO were just some of the lightning rods that made the tech sector look like vintage Wall Street.

The rise of immersion – When I wrote my predictions I felt that I had been cheated out of the cyberpunk future that I had been promised and saw it as a major opportunity. Virtual reality had lost out in the 1990s when cumbersome helmet displays would disorientate you and cause you to throw up as the visuals and movement created dissonance partly due to a lack of computing power. Now we’ve seen cyberpunk author Neal Stephenson the chief futurist at one VR company, Facebook own another and companies like Zeiss and Samsung enter the fray. Together with advances in AR post-Google Glasses we are likely to see major innovations beyond gaming in the web-of-no-web.

Machine learning will threaten to disrupt programming – while machine learning is making an increased amount of noise in the tech media it is being seen as a leap forward in artificial intelligence rather than as an alternative strategy to traditional application programming. Skype adopted for their latest language training.

A race to the bottom will bring out hyper-competition in mobile semiconductor suppliers – the mobile market did race to the bottom which has made a major dent in Samsung and Huawei’s marketshare. Mediatek and Hi-Silicon are producing innovative silicon that has pushed phone performance forward. However rather than being a race to the bottom on pricing, Qualcomm has been taken to task by the Chinese government and Qualcomm admitted in its own financial documents that there at least some partners who weren’t paying them licence fees.

More information
2014: just where is it all going? | renaissance chambara