Kevin Restivo’s Tech Blog

Economic green shoots may be sprouting but the global recession will dampen the information technology industry’s prospects over the next five years, IDC Canada told attendees of its Directions conference recently.

However, the IT industry will rebound in 2010, for example, along with the economy. Tech companies though will grow slowly - most likely 1% - in 2010, IDC Canada managing director Vito Mabrucco predicted.

The hardware category will grow fastest next year by virtue of the steep expected decline this year; it has more room to grow off a lower base, Mabrucco noted.

Overall, the global IT market will grow somewhere in the 3 to 5% year range over IDC’s forecast period (2009-2013). But the Canadian IT market won’t grow in terms of absolute dollars until 2012, Mabrucco added.

Nevertheless, IT is behind only sales and manufacturing in terms of importance to top Canadian executives, according to a study done by IDC earlier this year. The strategic value of IT continues to increase for executives because it drives productivity and sales, said Mabrucco citing a study of Canada’s top executives IDC conducted earlier this year.

Other speakers during the half-day session such as Danielle Levitas, group v-p consumer broadband digital marketplace research, detailed emerging opportunities for the tech industry during the downturn. One of the notable growth opportunities, Levitas told the crowd of 140 attendees, even during a recession are social networks that can help reduce work inefficiencies in the workplace (e.g. ineffective searches, version control).

IDC conducted three breakout sessions including one on client computing, specifically emerging opportunities around personal productivity and client devices. It was an exchange between the audience and IDC hardcopy and peripherals analyst Evan Hardie, desktop and PC expert Tim Brunt, as well as yours truly. The panel discussion was moderated by veteran analyst George Bulat.

One topic of particular interest to attendees of the was the convergence of client computing devices such as cell phones and mini-notebooks. As development cycles accelerate, the functionality of cell phones resembles that of mini-notebooks and vice-versa.

Those interested in receiving future updates from IDC can follow the company on its Twitter page.

  Line of business managers or tech types trying to figure out how technology will help lead Canada out of the recession should check out IDC Canada’s annual Directions conference this week in Toronto on Wednesday.

Technology can help lead companies out of the recession. Amid the carnage that is the global economy, there are opportunities to be had, IDC contends.

IDC, my employer, will help attendees spot opportunities with interactive presentations and breakout sessions complimented by our array of demand-side research, at the conference (entitled ICT on the Road to Recovery) on June 3rd at the Toronto Board of Trade.

Danielle Levitas, group vice-president of IDC’s worldwide, consumer, broadband and digital marketplace practice, will deliver the keynote presentation entitled: Harnessing the Power of the Marketplace. She’ll be preceded by IDC Canada’s managing director Vito Mabrucco who’ll give a brief Canadian market update to the audience.

Yours truly will be part of two such sessions on Wednesday. I’m first going to moderate/take part in a panel session on emerging firms with my colleague Krista Napier that we’ve dubbed Rising Stars.

Krista has recruited a variety of young Canadian social networking and mobility companies including CellWand, FileMobile, MedShare and Viigo (currently the most downloaded application from Research In Motion’s BlackBerry App World) to discuss their businesses and the issues early-stage companies encounter, such as available financing & access to mentors, among other topics.

In the latter part of the morning, I’m going to take part in a panel discussion that’ll focus on emerging opportunities around personal productivity and client devices, more commonly thought of as cell phones or personal computers. It’ll be a two-way exchange between the audience and IDC hardcopy and peripherals analyst Evan Hardie, desktop and PC expert Tim Brunt, as well as mobility analyst yours truly. The dialog will be moderated by 18-year IDC veteran analyst George Bulat,

The conference, which runs from 8:00AM to noon, is open to IDC subscribers.

For those that can’t attend, look for regular tweets and updates from the conference on IDC Canada’s Twitter page or by following the #idccanada hashtag.

Palm and Google will sail the U.S. and Canadian smartphone waters starting next week, but their webOS and Android powered devices won’t help them capture the smartphone/mobile operating system seas.

The Android and webOS powered mobile phones/devices prospects in North America is a timely one. Rogers Wireless in Canada will start sales of HTC’s Magic and Touch devices next week. Sprint, meanwhile, begins sales of the much-ballyhooed Pre device from Palm, the comeback kid of the mobile device world on June 6th.

North American wireless operators are hoping to find high-margin, fast-selling alternatives to the BlackBerry and iPhone. Android devices are perceived by operators as lower-cost solutions for prosumers and consumers, which may be true. (Google for example doesn’t charge operators – its customers - a fee for the Android operating system which theoretically lowers the customer cost of acquisition for the operator).

That doesn’t make them best sellers. The smartphone market isn’t being held back by the cost of a mobile operating system license (though operators would prefer not to pay for it.) The cost a data plan, for example, is a greater inhibitor.

Instead, the operators will likely find the Palm/webOS and Android multi-purpose phones appeal to select North American prosumers (those generally speaking that use their devices for business and personal purposes.)

Consumers and enterprises will buy superior devices. The mach-zehnder modulatorwebOS/Pre and Android devices by many accounts seem capable, even intriguing, but are not seen as game changers despite the inclusion of intriguing features (e.g. the advertised webOS ability to integrate disparate calendar and contact information via the cloud).

To be clear, there’s nothing inherently wrong with the mobile operating systems or the devices. Quite the opposite. I suspect the form factors and many other appealing factors of the devices will make for many a happy Android and webOS device user.

However, the Android and webOS powered smartphones represent an evolution in the smartphone market, not a revolution. As a result, the webOS and Android camps will probably grow slowly over the next several years – not leapfrog the Apple/MacOS and RIM/BlackBerry OS camps in the United States or Canada.

Don’t go bragging about the great smartphone you bought just yet.

That do-it-all personal communication device is about to lose a lot of its lustre.

Smartphone suppliers are set to release a bumper crop of devices in North America over the next seven months.

Palm will launch its much anticipated Pre device on June 6 with Sprint in the United States, Apple will likely introduce a new iPhone in June if not the third quarter. A slew of devices, powered by Google’s Android operating system, will be released over the next six to seven months as well. Rogers Wireless, for example, will begin sales of HTC’s Dream and Magic devices on June 2 in Canada.

Not to be outdone, Research In Motion will probably introduce the second version of the Storm and a host of other devices (if widespread speculation is correct) in the back half of 2009.

Cell phone stalwarts LG and Sony Ericsson, will re-enter the North American smartphone market this year. Both companies have said they will begin selling smartphones, which will be powered by Microsoft’s Windows Mobile operating system, sometime after July.

You get the point. Smartphones are still viewed as a high-growth opportunity, which is increasingly a rarity in the tech industry, hence the flurry of product development and marketing activity on the part of manufacturers. Most North Americans still own traditional cell phones, which are typically used for talk and text messaging purposes. Conversely, smartphones contain a high-level operating system such as BlackBerry, Mac, or Windows Mobile that allow users to use location-based services for example.

But it’s widely believed that everyone will own a smartphone in future, which means cell phone makers are scrambling to help consumers with the cell phone to smartphone transition despite the economic recession that has gripped the world. It’s also seen as a wide-open market. Research in Motion dominates the North American smartphone market at present but low penetration, the term used to describe the relatively small percentage of wireless users that own a smartphone, has manufacturers salivating over the market potential.

Smartphones are also a higher-margin business for the manufacturers than traditional cell phones. Meanwhile, service providers love to push smartphones as it gives them a greater chance to sell lucrative data plans or data services, such as wireless e-mail, to consumers. This is especially true if there’s significant buzz around a particular smartphone such as a BlackBerry or an iPhone hence the desire to strike exclusive deals with manufacturers such as Apple or Palm as AT&T and Palm have done in recent years.

Consumers would be wise to hold off on a smartphone purchase until some of the dust settles. Manufacturers, meanwhile, will struggle to stay on top of the industry as product release cycles are quickening and people are increasingly fickle given the pace of change.

It’s widely accepted that Apple will introduce a fourth-generation iPhone to legions of frothing developers and mobile users next month at its annual Worldwide Developer Conference.

Opinions on the forthcoming version of the iPhone diverge thereafter. The guts of the device, as I’ve said for months, will likely be different than the current iPhone iteration. Expect the iPhone 4G (for lack of a better term) to come in 16GB and 32GB flavours. It’ll also likely contain a faster processor thanks to the P.A. Semiconductor employees Apple inherited as part of the acquisition the company made last year. Expect the forthcoming iteration of the iPhone to run on 256MB RAM, double the current amount. However, the next-gen iPhone’s form factor will likely be the same.

John Gruber, of the eminently readable Apple blog Daring Fireball, expounded upon my belief in a blog post yesterday. Gruber, like yours truly, also believes the next two available versions of the so-called Jesusphone will come with additional storage and a faster processor so mobile geeks can download apps and reach their Facebook pages more quickly.

But Gruber also believes the new iPhones will be able to capture video, an interesting development that should help Apple sell to more customers that might have otherwise opted for a Flip Video (from Cisco’s Pure Digital division) for example on top of the iPhone or a simpler, traditional mobile.

In any case, additional storage will need to be included in future versions of the iPhone, to accommodate the growing needs of users. Applications eat up valuable space and data-intensive functions such as video need to be stored somewhere other than a laptop or desktop computer.

The iPhone will probably be sold at the $199 and $299 price points, which of course is what Apple sells the device for at present.  (No price cuts for you!) Apple, which has never been known for price cuts, will hold the  include more functions in the next iteration of the iPhone as a tacit and unique acknowledgement of the brutal economic recession that’s gripped the world.

These are other relatively significant but anticipated if not announced improvements, such as copy and paste, that’ll be contained in the next version of the iPhone too. Many of the 100 or so enhancements, such as copy and paste, that’ll be included in the third version of the iPhone’s operating system, were announced in February.

Much of Apple’s success with the iPhone in Canada course depends on the price of the data plans that come attached to it. Take for example, the 6GB for $30 a month iPhone promo that Rogers Wireless ran in July of last year to stimulate demand. The promo from Rogers, which created it after being roundly criticized (during a slow news cycle I might add) for not matching AT&T’s unlimited data pricing plan in the United States, was successful by all accounts. (It should be noted 6GB a month, though not technically unlimited, is more data than almost any Canadian wireless user will chew up in a given month even with the iPhone, which doesn’t process data nearly as efficiently as the BlackBerry. But I digress).

The promo, should it be reintroduced by Rogers Wireless as rumoured, will do much to drive incremental demand in Canada as data service costs are still the preeminent concern of prospective wireless device users.

We may get the real meal iPhone deal from Apple on June 8, one way or another, when the WWDC commences in San Francisco.

The decline of daily newspapers has accelerated of late; this is no secret. Nary a week goes by without news of further cutbacks or outright closures of newspapers.

The shift to online, changing reader habits and the global recession are the culprits. Newspapers have belatedly tried to capture online revenue as interest in the print cash cow declines with little success. Nor has the industry found new and innovative ways to monetize the vast amounts of information and analysis it generates on a daily basis.

As a result, many a newspaper will soon cease to exist. According to the Economistbackgammon free casino money free craps game play free black jack craps video poker strategy play black jack online how to win video poker casino game online uk best casino online casino secure online gambling jackpot casino online casino black jack learn to play craps how to win at video poker craps online blackjack casino game online casino betting free on line video poker casino games no download casino online gambling casino play free casino slots video poker machine bonus video poker free on line slots double bonus video poker free video poker games free casinos roulette online craps rules free on line casino rules of craps online casino free money blackjack 21 internet casino how to play craps free casino game download fortunelounge online casino free casino download free casino card game free roulette game free casino play no deposit free money casino internet casino online , San Francisco could soon be the first major North American city to exist without a major daily newspaper should the Chronicle go belly up.

Yet demand for news continues unabated. People still want to read about the swine flu, the NHL playoffs or countless other topics. They don’t, I’d argue, want 7 or 8 sections, that come with the weekend paper.

New models and sources of revenue need to be created for demand to be met. Giving away content online isn’t the answer. In fact, it’s a “flawed” model as noted by media scion Rupert Murdoch last week.

Simply charging for online content isn’t the answer either. In fact, it’s a far from sure proposition, as noted by my friend and former colleague Mark Evans in a conversation earlier this afternoon. Readers have been weaned on free for some time now.

To remain viable entities, news organizations will soon have to charge for most online content. Consumers won’t have a choice but to pay for online content at some point in the near future.

The question is how the industry migrates to such a model. No one has wanted to blink for a very long time. Newspapers may need to move en masse from free to fee together. No easy feat for sure.

Necessity will be the mother of invention. There’s still room for news organizations; Twitter and the blogosphere don’t do investigative journalism well last time I checked. Great journalism is an expensive endeavour but people will pay for it.

But a more personalized approach to news delivery (with less paper) will is a must. People want great reporting but they also it want it to be delivered in a number of different ways. Smaller, more personalized models will help the industry match product with demand. The advances in mobile technology (e.g. the iPhone and the Kindle) may help as it’ll help news organizations migrate people from free content to paid delivery.

The future of news delivery is murky at best. One thing’s for sure. Convention can’t be the norm.

Score one for Ivan Seidenberg.

The company’s chairman & chief executive has gotta be smiling after the week of mostly breathless coverage his company has received. (Not like the longtime telecom exec needs any help – his reported pay package last year was over US$20-million.)

Verizon, of course, is believed to be in talks with Apple that may lead to a deal whereby the largest wireless service provider in the U.S. offers an iPhone variant or another yet-to-released mobile device such as an Apple touchscreen mini-notebook this year.

The chances Verizon will carry the actual iPhone anytime soon are slim to none of course. Chief rival AT&T has an exclusive deal with Apple until next year; the parties are apparently working to extend the deal until 2011 -perhaps longer.

Furthermore, Verizon’s network, which runs on the CDMA standard (A Wall St. Journal blog post neglected to mention over half of Canadian wireless subscribers have phones that run on the Bell and Telus CDMA networks).

The talks, even if they fizzle out in the short term, will help the company reinvigorate the company’s mostly moribund brand. Verizon isn’t exactly regarded as a provider of leading-edge handsets and services.

AT&T, though it’s the No. 2 provider in the U.S., has overshadowed Verizon of late by virtue of its deal with Apple to be the exclusive seller of the iPhone, which accounted for about 80% of AT&T’s net subscriber additions last quarter.

Best-case scenario for Verizon? The company brings to market some sort of iPhone or iPod Touch variant (maybe even a Microsoft iPhone alternative) this year. Verizon records incremental revenue and brings some much needed lustre to the brand.

Eventually, it’ll be able to offer the iPhone or any other device presumably that has captured the imagination of U.S. wireless device users once it has the LTE standard lit up in 25 to 30 cities at some point next year. That’s right around the time the AT&T deal with Apple will expire as it stands now.

Your turn AT&T.

Sometimes things are as they appear.

For proof, one need only look at Apple’s unofficial exit from the netbook category earlier this week.

Tim Cook, the company’s chief operating officer, summarily trashed the low-cost computers during a conference call to discuss the company’s better-than-expected second-quarter earnings with analysts.

“For us, it’s about doing great products,” Cook said. “When I look at netbooks, I see cramped keyboards, terrible software, junky hardware, very small screens. It’s just not a good consumer experience and not something we would put the Mac brand on. It’s a segment we would not choose to play in.”

I doubt Apple’s being coy about its netbook plans (or lack thereof.)

You can quibble with his characterization of netbooks but it’s hard to argue with Apple and Cook’s logic. Apple charges premium prices for its products. Netbook, which sell for as little as $300, prices flies in the face of the Apple business model (read: high prices for what it sees as premium/better products).

Furthermore, there’s no need for the company to rush into an emerging category with a ‘me-too’ product given the company’s strong financial performance of late.

True, the company’s Mac sales have dropped (when the most recent quarter is compared to the prior-year period) but the iPhone is more than making up the difference for the company.

There’s still a good chance Apple will release a premium mini-computer of sorts – perhaps it’ll come with a touchscreen if the blogosphere speculation is correct. One thing’s for sure. A hybrid iPod Touch/Macbook Air will probably only vaguely resemble the ultra-portable Windows-powered laptops.

In the meantime, the company’s content to rake in revenue from iPhones and iPod Touch sales as Cook noted.

If tech company earnings were a sporting event, Apple’s financial results can be compared to the Super Bowl (or at least a football conference championship game.)

Apple is a closely watched company as its results are taken as a proxy for consumer confidence, which seems to be in short supply these days.

(By the way HP, Oracle, Google, Microsoft and IBM could arguably be the other finalists.)

Apple’s divergent revenue streams makes it a tough company to follow. The company essentially has two divergent revenue streams; the Mac and iPod product lines which is lucrative but is still largely revenue that can be counted on a one-time basis as there’s no transactional revenue derived from consumers and businesses. Conversely, the iPhone sales from past quarters can be turned into recurring revenue seven or eight quarters out as the company realizes a percentage of sales from carrier partners such as AT&T. A cut of wireless data sales is passed on by carriers, such as AT&T in the United States, to the company.

Apple received a US30 to 40 cent a share lift, depending on the Wall St. analyst’s estimates you believe, in the second quarter as a result of the deals.

Apple, of course, isn’t immune to the global recession that has gripped the world. This hard to ignore problem will very likely have a dampening effect on its the Mac and iPod businesses; in other words two of its three growth engines have very likely stalled (relatively speaking), which makes the iPhone business all the more crucial to the company’s growth prospects.

Other factors to watch for when the Cupertino, Calif.-based supplier of Mac computers, iPods and iPhones reports after the bell today.

• iPhone growth again, as its the engine driving Apple’s results. Apple needed to have an outstanding quarter of iPhone sales to beat expectations. It’s the fastest part of Apple’s business even though it represents a smaller percentage of the company’s revenue.
• iPhone substitution. Are concerned, cash-strapped consumers that still crave the Apple experience opting for the less expensive iPod Touch to avoid expensive data plans? There was an obvious substitution pattern that happened in the last calendar quarter. Whether it continued in North America in the January to March timeframe will help determine the company’s second quarter results.
• New product announcements. It’s always something to monitor closely as it can create momentum for the company. However, Apple is unlikely to detail new product plans as announcements to that end are typically announced at the company’s worldwide developer conference which opens on June 7.