It is said that we live in the golden era of the technology world. We have seen advances and innovations in the last 10 years that we haven’t seen in the last 1,000 years. And the next 10 years are supposed to surpass all technologies, inventions and discoveries since the advent of mankind. Thus, these should be happy times for all the companies and people involved in this field. Yet, there seems to be trouble in paradise, in fact large scale trouble brewing from all directions. Three recent happenings have set off a chain of events that will have a tsunami ripple effect across the globe.Small Event 1
HP kills off the touchpad tablet and prephones. Kills off the WebOS completely. Talks of palming it off to another company, but that seems unlikely considering the kind of money (most say foolishly) that HP paid when it acquired Palm.
Larger tsunami: HP all set to sell their entire Personal System group.
This isn’t some random rumour or speculation. Even top HP officials have spoken about it. While many now say it was just to get a valuation, that sounds like complete hogwash. The HP PSG division is world number one in the categories they deal with and the revenues they make are astronomical. The question being asked is why any company that large, that well-established, with a plethora of devices and a number one position, would ever want to sell. The answer isn’t simple and yet it has been staring us in the face for a very long time.
The Real story: Hardware manufacturing isn’t a very lucrative market any more. Competition is cut-throat, profits are low, margins are almost non-existent, risks are very high, entry barriers are very low for even a small player to come in, you need to innovate at a blistering pace and failure rates in even a single category have a deadly effect on the entire company. IBM got out, HP wants to, and many other will follow. Everybody wants to get into the high profit business of software and services and nobody wants to make the hardware to run it all.
Ripple effect: Most of the big names will be bought out by marketing and sales companies and not technology companies. These companies will outsource device manufacturing to contract manufacturing companies in China. For a while, this will lead to great new devices at amazing prices. But without R&D and investments in developing new technologies, innovation will die out and no radical new devices or technologies will be seen.
Small Event 2
Apple sues multiple companies for technology infringement, design plagiarism and patents.
Legal counterattacks from many companies – and it’s a free for all out there right now. New battles start over trying to acquire companies that hold important patents, cartels are formed and companies that wouldn’t even talk to each other suddenly become best friends. An old word is born again – ‘Frenemies’!
Larger tsunami: Google buys out Motorola
This was explained as a move mainly to get proper patents to make sure that the Android Mobile OS doesn’t get into any more legal wrangles. All Android partners have been assured that this will have no effect on their business and the relationship will continue just like before.
The Real story: It’s impossible to ignore future implications. The kind of money paid by Google for Motorola has to be justified. Google will have to make Motorola work and be super profitable. After all, Google has shareholders to answer to. For this to happen, Google will need to give Motorola preferential treatment, first OS rights, and new exclusive features. Google has done that before with its Nexus phone. This is obviously making all its Android partners pretty nervous. Many may drop off the Android system if Motorola becomes the blue-eyed boy for Google’s world domination plan.
Ripple effect: The worst thing that can happen to the mobile phone world is any one OS dominating and killing off all others. Competition is what keeps everyone on their toes and makes them come up with fantastic new products. If the mobile business becomes a one-horse race, we’ll all be flogging a dead horse very soon.Small Event 3
Steve Jobs resigns
Larger tsunami: Steve Jobs resigns
The Real story: Steve Jobs resigns.
Ripple effect: Apple will survive but... While new iterations of the entire existent line-up (iPhone 5, iPad 3, New MacBook Air etc) will come out with frightening regularity, the real question is – will the magic continue? Will Apple still be able to pull new rabbits out of an old hat minus the Stevie magic? To most of us not smoking drugs or not under the Jobs reality distortion field, the one word answer is NO! Apple needs magic. That’s what the company was built on.
These are turbulent times for tech. Turbulent and disturbing. One hopes and wishes that the current events are small bumps in a perfectly paved road. If they are not, then the golden era may well change into the beginning of the dark age of technology.
Rajiv Makhni is managing editor, Technology, NDTV and the anchor of Gadget Guru, Cell Guru and Newsnet 3.
Follow Rajiv on Twitter at twitter.com/RajivMakhni
From HT Brunch, September 18
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