Pick of the Week – The Apple of Toys

Fast Company published a fascinating in-depth profile of Lego detailing how it has turned itself around over a decade to become the Apple of the global toy industry:

“In the last 10 years, Lego has grown into nothing less than the Apple of toys: a profit-generating, design-driven miracle built around premium, intuitive, highly covetable hardware that fans can’t get enough of.”

Revenue and profit have doubled and R&D investment has been significantly increased to support their growing ambition:

At the core of this transformation has been the Lego Future Lab, a “secretive and highly ambitious R&D team, charged with inventing entirely new, technologically enhanced “play experiences” for kids all over the world.”  Future Lab has conducted “deep ethnographic research of how children really play” and undertaken lots of experimentation the best of which has filtered downstream into Lego products.  It’s an approach to innovation reminiscent of Apple and slyly lionized at the expense of process-oriented “business as usual” in the blockbuster Lego film of last year:

“The Lego people living in a Lego world sing it because they’ve been brainwashed by an all-powerful corporation to mindlessly—but joyfully—accept a prepackaged set of beliefs and desires, including adamant rule-following.”

Future Lab seems intent on pushing innovation and integration further with their robotic and interactive toys including Lego Mindstorms and Fusion:

Meanwhile commentators are suggesting that market dominance and the need to focus on a global operations setup has made Apple boring:

“Apple is the mid-2000s Microsoft. Its revenues are as healthy as ever, but it’s become a company that seems to make things just because it has to, that doesn’t take risks, that plays catch-up.”

Perversely enough Microsoft with its announcement this week of some of the most interesting software and hardware around (see below) seems to be morphing into the new Apple.

Smartphones and Manufacturers

• As iOS and Android disrupted the incumbent platforms that preceded their arrival so too shall they eventually be disrupted. As device and UI paradigms inevitably evolve, they like Symbian before them could find accumulated technical debt hinders attempts to pivot the platforms:

“for Apple the device is smart and the cloud is dumb storage, while for Google the cloud is smart and the device is dumb glass. Those assumptions and trade-offs remain very strongly entrenched.  Meanwhile, the next phases of smartphones (messaging apps as platforms and watches as a dominant interface?) will test all the assumptions again.”

• The idea that such dominant platforms might one day be disrupted seems far-fetched but it’s worth considering a couple of lessons from history.  It’s no less “laughable as the idea that an aircraft posed a threat to a battleship“ a hundred years ago during the age of the Dreadnought.  Or that the once omnipotent Microsoft could be sidelined so rapidly:

Microsoft

• In attempt to reverse this slide and reinvent itself, Microsoft made a raft of bold, mould-breaking announcements this week at the official launch of Windows 10.  The new platform is to be available as a free upgrade to Windows 7 and 8.1 users if they upgrade within a year and will come with a free Office Suite. There will be greater synergy with other Microsoft products including Cortana, Skype and XBox and a brand new browser called Spartan.  The Verge published a handy summary video compendium of the main announcements:

• The most surprising announcements involved the launch of a new Windows 10 based AR platform called Windows Holographic which will come with a special holographic headset called the HoloLens which has excited some reviewers and raised an interesting thought:

“It’s almost odd to consider, but Microsoft is now one of the most interesting hardware companies. It builds Xboxes, Surfaces, smartphones, huge touch displays and now a holographic nerd helmet that it seems to hope will create a new layer of computing in the world.”

Samsung

• Samsung finally released a Tizen phone in the shape of the Z1 aimed at the Indian market.  It’s fairly pedestrian in terms of specs but a big deal nonetheless not least because Tizen is clearly central to Samsung’s strategic ambitions to be one of the biggest global players in the Internet of Things:

“What is clear is that the Internet of Things is a top priority for the electronics and appliance maker, and that it wants to put its Tizen software into most every connected product it makes, which is a lot—everything from its televisions and kitchen appliances, to smartwatches and now smartphones.”

• What is less clear, however, is how Samsung addresses its software capability shortcomings to operate effectively at scale in the world of IoT services and data.  For now, with the Z1, it is banking on Android to provide app sauce.   The phone is apparently going to be capable of running “thousands” of Android apps thanks to OpenMobile’s ACL (“Application Compatibility Layer”) technology:

http://youtu.be/BQaJEwQ-0ek

• Samsung also seems keen to reduce its dependency on Qualcomm with news that it apparently dropping the Snapdragon 810 for its next Galaxy flagship.  As highlighted here last year, the 810 is set to power most of 2015’s leading  edge Android handsets.  Moving away from it would be a major point of differentiation for Samsung though not as seismic as moving OS from Android to Tizen.

Google and Android

• PasteMagazine outline Google’s “platform within a platform” strategy for addressing Android fragmentation.  The strategy is built around iterative enhancement of their GMS layer to ensure Android users are kept on the latest common Google code and feature baseline.  It doesn’t apply for the non-Google Android products coming out of China of course:

“Google is using its apps and custom launchers to take back Android for itself. You still won’t have access to some of the under-the-hood software changes or things like the redesigned settings or app switcher, but if you live in Google’s ecosystem of apps, you can more or less get the Lollipop experience on any old Android device that you have.”

• ComputerWorld provided this summary of the main software quality issues it sees with Google’s Lollipop release.  Memory management seems a particular concern that Google are likely to address in their MR2 update for the platform which reading between the lines may be due as early as February:

“Lollipop represents a foundational shift for Android, and by and large, it’s an enormous leap forward for the platform.  …. But it’s very much a beginning — and particularly now that we’ve had more time to live with Lollipop and experience it on a variety of devices, it’s clear that Google still has some work left to fine-tune the software and iron out the kinks.”

Apps and Services

iOS is Bigger than Hollywood

• The iOS app development business is huge.  So big that “in 2014 iOS app developers earned more than Hollywood did from box office in the US“:

https://twitter.com/balajis/status/558451359255519232

• @asymco provided some additional context on its relative importance to Apple compared to iTunes video and music content sales cost:

• Relatively few app developers are making Hollywood level earnings though.  Marco Arment disclosed some fascinating data on how much money he’s making from Overcast, an iOS podcast app he developed and published in August last year.  It turns out that after the initial month, in-app purchases have ensured a regular income stream of around $400/day.

• It’s not dramatically more than you could expect as a senior software engineer in the US but as he memorably puts it, there are plenty of other great reasons to prefer it as a lifestyle choice:

“After the self-employment penalties in taxes and benefits, I’m probably coming in under what I could get at a good full-time job in the city, but I don’t have to actually work for someone else on something I don’t care about. I can work in my nice home office, drink my fussy coffee, take a nap after lunch if I want to, and be present for my family as my kid grows up. That’s my definition of success.”

Photography

• WhiteAlbum is a retro photography service for your smartphone focussed on printed copies of your photos.   The tagline: “Beautifully printed photos in your hand. Not digital images in your feed.“

• Meanwhile GigaOM teamed with Magisto to provide some interesting data on how we really use our smartphones for photography.  Their analysis contains insights such as this:

• A Verge contributor implores us to consider buying a camera for your most precious moments instead of relying on your smartphone:

“For most, the markedly improved cameras in our cell phones are enough. But I do suspect there are people like me who unwittingly forgot the pleasure of good photography because their phone made things easier and it captured images well enough. And when it didn’t, well, you could always add a filter.”

Internet Scale

• Spotify now has over 15 million paying subscribers and 60 million monthly active users (MAUs).

• Shazam is worth over a billion dollars and has over 100 million MAUs.

• Twitter seem to be looking at ways to monetize logged out users who on this analysis form as large a cohort as the number of monthly active Twitter users.

• Social media proposition Plague has now “infected” 150k users in just two months:

“Plague is designed as a way to spread content the same way a pathogen would spread across the globe.”

Personalisation

• The BBC have created a personalised news feature for their News app:

“Readers can now access local news reports for the first time, complimenting the BBC’s national coverage, and also choose to follow specific topics that they’re interested in. The latter are collected in a section of the app called My News, where users will also be suggested new topics based on what they’ve been reading recently.”

• Fascinating insight into how high end Western brands from MontBlanc and YSL to Burberry are using innovative WeChat campaigns to reach out to customers.  They involve going beyond using a basic WeChat Subscription account and setting up their own infrastructure to support a WeChat Service account. MontBlanc’s WeChat proposition “includes on the watch dial a moon phase complication that tracks the wax and wane of the moon“:

Asia

• More evidence of active state backing for innovation in China reminiscent of the UK National Enterprise Board set up in the 70’s:

“China will set up a government venture capital fund worth 40 billion yuan ($6.5 billion) to support start-ups in emerging industries, in its latest move to support the private sector and foster innovation.”

• Industry analyst Ben Bajarin published this article in Time on how the Shenzen manufacturing ecosystem is disrupting Samsung and helping fuel the rising power of Chinese OEMs:

“Even with new hardware products, Samsung’s lack of software and services for local markets will continue to make it difficult to compete with Xiaomi, Huawei and others, especially in markets like China and other parts of Asia.”

• TechInAsia on how phone brands are trying to copy Xiaomi and its phenomenal success.  Among other approaches, competitors are attempting to create youth-oriented regional sub-brands and employing web-only sales tactics.   They would be advised to note this VisionMobile analysis of Xiaomi which suggests the source of their strength is their approach to building a loyal fanbase:

“It’s clear that those who view Xiaomi as a smartphone company miss the point. Xiaomi operates a new kind of business model in which smartphones serve as a distribution channel and not a source of profits, as we explained on the VisionMobile blog in August 2013.”

• Tencent have started beta testing their own Android ROM presumably building on Cyanogen.

• LinkedIn has never really taken off in Japan.  It seems the Japanese don’t use LinkedIn in part because they use Facebook to humblebrag about their work achievements.  There are also famed corporate loyalty considerations to take into account:

“God forbid their bosses were to see that they’ve completed their LinkedIn profile. It would be career suicide.”

• Popular Japanese OTT Messaging service Line could exploit this gap with a new product focussed on HR intelligence called Line Baito.

Open Source, Enterprise and Cloud

• ArsTechnica reckon Microsoft should open source Internet Explorer because “being the only closed source mainstream browser isn’t a good position“.  Besides they now have Spartan on Windows 10.

• Facebook at Work is an attempt by the social media giant to use its huge consumer brand power to enter the lucrative Enterprise collaboration space:

“The product puts Facebook head-to-head with the likes of Microsoft’s Yammer, Slack, Convo, Socialcast, and a huge number of others who are trying to tackle the “enterprise social network” space”

• Alibaba are also trying to get in on the team collaboration act with a cross-platform Enterprise proposition called Dingtalk:

Wearables and the Internet of Things

• DC Rainmaker published an exhaustive review of the Fitbit Surge smartwatch, the flagship Fitbit product for 2015 suggesting it is best suited to the occasional athlete:

“if you’re out to enjoy a bit of running, perhaps a spinning class here and there – then the Surge will give you the gist of things.  Further, if you’re primarily looking to use it for steps and sleep, and 24×7 heart rate monitoring – again, it does well there.  It’s just unfortunately not for someone that wants absolute HR accuracy – which, I suppose is sorta the point of the device.”

• The Leatherman Tread is a refreshingly different take on wearable technology that brings 25 tools to your wrist:

• Teenage Engineering’s PO-12 pocket synth costs $59 and runs of two AAA batteries:

• Audio giant Harman have bought embedded software consultancy Symphony Teleca and FOTA (firmware over the air) vendor RedBend in what seems like a $1 billion dollar long term attempt to play in the Internet of Things space.

Science

• This Quartz post highlights some research connecting city expansion to galaxy expansion by way of a power law probability distribution encapsulated in Zipf’s Law.  Somewhat in line with the anthropic principle in fact:

“the underlying laws that govern some fairly complex human behaviours are the same as those that determined the formation of the very galaxy we live in.”

• Quora asked “What laptop do physicists use?”  The top answer:

tl;dr – in most cases, anything that lets them SSH into the 1500 core computing cluster

Inequality

• The “one percent” meme seemed to be everywhere this week thanks to Davos.  It was picked up on by some technology heavyweights too:

World's richest 1% will soon own same as poorest 99%.

*This* is the root of the problem.#inequality pic.twitter.com/m5gFhrHkb0

— Aral Balkan (@aral) January 22, 2015

• The “one percent” were also referenced in this powerful WashingtonPost article linking automation, Uberization and inequality:

“It’s clear by now that the fruits of automation, computerization and outsourcing are being reaped by the top 1 percent — in this case, shipping companies and not drivers. The old bell curve with the middle class bloating comfy in the middle is being replaced by what’s called the power curve, in which something called the 80/20 rule applies: 20 percent of the participants in an online venture get 80 percent of the rewards. Think Uber. It’s not the drivers who are getting rich. Something new and possibly awful is happening.”

Work and Culture

• Algorithms lie at the heart of advancing automation.  A thought-provoking article in The Atlantic entitled the ‘Cathedral of Computation’ suggests that ‘algorithmic culture’ is fast becoming a secular substitute for God.   Whether tacitly or not we are increasingly under the influence of algorithm worship:

“The scientific revolution was meant to challenge tradition and faith, particularly a faith in religious superstition. But today, Enlightenment ideas like reason and science are beginning to flip into their opposites. Science and technology have become so pervasive and distorted, they have turned into a new type of theology. … algorithms hold a special station in the new technological temple because computers have become our favorite idols.”

• Netflix in that analysis would be a shrine to algorithmic culture. Employee Brendan Gregg provides this fascinating insight into what it’s like to work there.  It reveals cult-like tendencies from the rigour of the hiring process to the elevation of behaviours and alignment on performance culture:

“When I joined Netflix, I expected many aspects to be excellent: the technical challenges, my colleagues, the compensation, the mission, and the ambition of the company – and they are. What surprised me most by its excellence was the culture. It’s made me think differently about our industry: Netflix is proving that company culture doesn’t just have to be accepted: it can be engineered to be positive.”

• It’s a bit of a cliché but for most companies not on the same celestial plane as Netflix good, frequent feedback is absolutely key to ensuring staff motivation and retention:

“A majority of people who plan to leave (pdf) their current job around the world cite ineffective or infrequent communication as part of the reason.”

• This NYT article on why some teams are smarter than others suggests it is down to just three factors:

“the smartest teams were distinguished by three characteristics.

First, their members contributed more equally to the team’s discussions, rather than letting one or two people dominate the group.

Second, their members scored higher on a test called Reading the Mind in the Eyes, which measures how well people can read complex emotional states from images of faces with only the eyes visible.

Finally, teams with more women outperformed teams with more men.”

• Why most attempts at industry networking are a “waste of time” from a Davos attendee:

“Almost everything in life is worthless noise, and a very few things are exceptionally valuable. This is as true in networking as it is in almost every other area of life.”