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Apple and the Superman act!

Posted in Mobile Devices and Company Updates by Manas Ganguly on October 21, 2010

Apple reported a profit jump of 70% from last year, driven by strong sales of Macintosh computers, iPhones and iPad multimedia devices. This has taken the analysts by surprise who had underpitched on the numbers. The reported net income for the fourth quarter of $4.31 billion or $4.64 per share, compared to $2.53 billion or $2.77 per share for the year-ago quarter. Gross margin for the fourth quarter fell to 36.9% from 41.8% in the prior year quarter, while operating margin for the quarter decreased to 26.8% from 30.1% a year earlier.Net sales for the quarter rose 67% to a record $20.34 billion from $12.21 billion in the same quarter last year. International sales accounted for 57% of the quarter’s revenue. iPhone sales of 14.1 million were up 91 percent year-over-year, handily beating the 12.1 million phones RIM sold in their most recent quarter. Apple sold 3.89 million Macintosh computers during the fourth quarter, up 27% from the year-ago quarter. Apple sold 4.19 million iPads during the fourth quarter, which however, trailed estimates of some analysts who were expecting the company to sell about 4.8 million iPads during the quarter.

The striking thing about Apple’s numbers are that they are consistent northbound. This is perhaps also mirrored by the share prices. Analysts feel that Apple is not out of steam yet and the rise will continue through a good part of 2011. The factors that would aid the growth of Apple in the future 1 year horizon are the following:

1. Apple is looking to increase its distribution and tieing up with operators such as Verizon will only increase momentum of its iPhone sales. Already the iPhone is eating into a disproportionate share of the global smartphone profits.
2. Apple is building huge economies of scale across its iPhone, iPad and iPod and this helps keeping its costs low.
3. Apple is also able to drive consumer usage across various products. However they have kept the platform constant and its 120 million iOS users are a definite lot who keep coming back for more.
4. iPhone drives data traffic and that is sweet music to carriers who are willing to subsidize Apple products so that the user cost is roughly comparable to Android devices.
5. While Apple TV is taking its first steps, the Apple TV along with the iPhone (for smart computing), iPad (The cross between Laptops and Smartphones),iTunes, Music Streaming, Application Store, iOS, iPods (Multimedia devices), Mac Computers are beginning to forge a media network eco-system which fortifies the Apple Media, Web and Mobile proposition in a unique manner. Come to think of it no other competitor comes close to matching Apple’s scale across these range of devices and solutions.

However the question that nags is while the “Walled garden” approach has yielded great results for Apple, will it be enough to fight the “Open Source” juggernaut. Will Individual brilliance continue to overshine the Collective Enterprise-Open Source (Read Google). Sooner or later Apple will be at crossroads to question its Strategic imperatives and Organization philosophy.

Search goes Social: Perspectives (Part I)

Posted in Internet and Search, Social context, media and advertising by Manas Ganguly on October 20, 2010

The debate- Internet-Searchable or Social seems to now precipitate towards the later.However, the changing landscape of internet has a few perspectives for all the stakeholders in the system. These discontinuities are but natural steps in evolution of internet around the user.

Facebook and Bing tied up last week to feature Facebook contents and recommendations, likes on Bing Search results. Earlier Google also started featuring Tweets and Twitter updates in its search results. It’s a natural innovation that fits into the business models of both companies and takes the trend of individualized search results to its next logical level: results tailored to the searcher’s existing social footprint. Until now, search algorithms have used machine learning and artificial intelligence to predict which of the billions of pages out on the Internet might be most salient to the users’ search. Now, search engines are going to have access to something even more precious: the knowledge of who the users’ friends are and what they like.

This evolution has a ground breaking impact in terms of how Search optimization engines function and the SEO gurus and companies will now have to adapt to the ever evolving user needs. A few thoughts on the impact of the fusion of social media to search:

Search just reached an inflection point. Google’s great innovation was to figure out how to deliver the most relevant search results, based on the assumption that a webpage that had a large number of other pages linking to it would be more interesting than one with fewer links. Google has built its search algorithms by continuing to troll large sets of data for other attributes that indicate relevance. Recent developments (Bing and Facebook in particular) can deliver results based on what the users’ trusted sources of information—the users’ friends and acquaintances—think. This is a giant leap forward. Which leads us to the next point…

Companies have to focus on creating great customer experiences. Because when their customers go searching online—for a movie, a camera, a travel destination—their friends’ recommendations are going to be front and center. Launched a store that no one “Liked?”. Chances are that it is not going to show up in the search results.

Search is going to look a lot different. Forget the list of blue links. The introduction of a social dimension to search results, could actually start representing search results—visually—in new ways. Though it is too early to elaborate: What ways? It still means that search visualization could be wholly different now on.

We’re going to be seeing even more social elements introduced into Bing’s search results. And soon. That is evolution. Microsoft and Facebook collaborative effort took them two months to think up. Which means more are going to be coming down the pike in the months to come.

The user must now master the users’ Facebook privacy settings. Mindful of earlier criticism of Facebook’s handling of privacy issues, both Microsoft and Facebook went out of their way today to stress that users will retain control over what Facebook shares with Bing. The flip side is that users actually have to exercise the control that Bing and Facebook give them.

Windows Mobile 7.0: Microsoft’s Mobile Web Future depends on it (Part V)

Posted in Computing and Operating Systems, Mobile Computing by Manas Ganguly on October 19, 2010

This is the final part of the five part series profiling Microsoft Windows Mobile 7.0. In the earlier posts, i had discussed hardware, software perspectives, developer perspective & platform shortcomings and Microsoft’s service strategy around WinMo 7.0.

For long Microsoft has been sidelined in the smartphone computing space by the Androids and Apples of the world. Windows Mobile 6.5 never gave any hope and as a user and a technoholic, I hope that Microsoft gets its game right with WinMo 7.0. This is not only important for Microsoft but also from an eco-system perspective. The Android juggernaut needs to have some competition from Microsoft to maintain the balance in the industry. Apple is competitive but then it is very elitist and specific. Android seems to be taking the mid end devices fully. Competition from Microsoft space in the mid end could liven up things a bit, which otherwise is becoming Android monopoly.

Summing up the overall strategy

Looking slightly longer term, we think this is an area Microsoft will need to pay special attention to if it wants to join in the looming battle for the Living Room, with mobile devices as a key part of that. Although it has Zune and Windows Media Player, Microsoft has nothing with the market presence and direct link to the consumers’ wallet that iTunes has. It is also not seen as a visionary player in understanding people’s overall media usage.

The WinMo 7.0 release saw a refreshingly humble Microsoft tone for the smartphone world. It spoke of “elegant co-existence” with partners, which will have pleased network operators. Its approach was in stark contrast to the way some manufacturers have approached working with distribution channels.

Microsoft has used its full weight to build an impressive coalition for the launch. This was necessary, given that it is trying to build a strong position from a low starting point. (It provides a good example for other manufacturers with forthcoming operating system launches, such as Nokia and Intel’s MeeGo and RIM’s QNX)

Windows Phone 7 and the way it was brought to market has a good chance oflifting Microsoft’s position in the mobile arena. Microsoft desperately needs this to work well, so that the company becomes relevant again in mobile. The agenda in smartphones is currently being set by Apple and Google, and some observers believe that the battle is really about the future of computing, with the mobile domain as one vital part. Microsoft needs a strong position in mobile to play a part in that debate. To succeed Microsoft will need to see the launch as no more than a key first step and sustain the effort across all fronts. However, even if it does so, we see sales constrained by the high-end hardware specifications and the fact that it is launching into a crowded market.

Mobile is central to the Microsoft’s transformation into a services business. If Microsoft fails in mobile the shift of the wider business beyond a reliance on software licence revenue will certainly falter. More importantly, Apple and Google have proved that the market is still in its infancy, with newcomers still able to cause mass disruption with the right recipe of hardware, software and services. Should Window Phone 7 fail Microsoft arguably has little option but to go back to the drawing board or risk being further marginalised. However, failure at a time when others are becoming increasingly dominant would raise serious doubts about Microsoft’s ability to compete side-by-side in Web services.

Bing adds a social layer to search: Search goes Social

Posted in Internet and Search, Social context, media and advertising by Manas Ganguly on October 18, 2010

In 2007, Microsoft paid $240 million for a 1.6 percent stake in Facebook. Since then, the two companies have worked together to introduce advertisements on Facebook and incorporate Bing Maps into Facebook’s location application, called Places. Facebook and Microsoft appear to be forming a united front against Google, a rival to both in several ways. Despite heavy investment by Microsoft, Bing still greatly lags Google in terms of market share. Google has made several attempts to strengthen its social networking offerings and compete with Facebook.

As expected the Bing event announced the partnership of Facebook and Bing to fortify the Bing search domain with inputs from the social networking giant. The Bing Social Layer is more than a strategy to take out Google in search; to me, it is an evolution process.To many it is the coming true of the adage “ enemy (Facebook/ Bing) of the (common)enemy (Google) is a friend (Bing/Facebook)”.The common denominator here is Google, the common enemy. However to me it is the evolution of the internet from being search led to social led. At stake, analysts say, is the ability to know more about users, and to charge more for ads that are more effectively aimed at those users. Making search more social is ultimately going to drive more targeted advertising, a service and ability that marketers are willing to pay a huge premium for.

Bing’s new features now allows users who use Facebook to see Bing search results that incorporate information from their friends, like restaurant recommendations.

1. Bing now integrates information on recommendations and “likes” made by the users’ social circle. Thus Search result makes its transition to a Search Optimization Model to a more Social model. When a user searches for something like a movie, place or product on Bing, information about how many of their friends “liked” that item on Facebook and related links they have shared will appear alongside the results.

2. Bing also integrates people searches based on Facebook profiles and the mutual friends data. I am most familiar with this kind of data from the Linkedin Profiles. Adding this layer will add a certain element of sociability to the internet search domain.

Heres the video explaining the Bing Social Layer:
http://www.facebook.com/v/10150298090235484

Bing is therefore going to introduce the power of social networks to Search. And it will be interesting to see how the search space plays up with the dash of socialization that Bing has injected into it. It is time for Google to react and for one a lot of people around think that Google should now acquire Twitter to counter the Bing-Facebook challenge.

Windows Mobile 7.0: Microsoft’s Mobile Web Future depends on it (Part IV)

Posted in Computing and Operating Systems, Mobile Computing by Manas Ganguly on October 17, 2010

This is the fourth of five part series profiling Microsoft Windows Mobile 7.0. In the earlier posts, i had discussed hardware, software perspectives, developer perspective and platform shortcomings around the WinMo7. This post discusses the importance of Windows Mobile 7.0 for effective launch of the Microsoft Online services. WInMo 7.0 is not just a revenue machine for Microsoft, it also is enabler for other online services for Microsoft.

WinMo 7.0’s integration with Microsoft web-services will determine the successs of Microsoft efforts to bridge the distance between its current state and its future in Mobile/Smartphone computing. Mobile is central to the Microsoft’s transformation into a services business. And WinMo 7.0 is key to Microsoft’s Mobile phone aspirations.

Services
Services is central to the Windows Phone 7 strategy, given the need to provide a rounded offering and the opportunity to substantially extend the reach of such services. Windows Phone and Microsoft services are now intrinsically linked. The success of the platform relies on consumer appetite for Microsoft services, and those services are reliant on Microsoft extending its reach beyond the PC. Windows Phone 7 will be expected to help boost the profitability of the online services division. The success of the platform relies on consumer appetite for Microsoft services, and those services are reliant on Microsoft extending its reach beyond the PC. Windows Phone 7 will be expected to help boost the profitability of the online services division.

The platform’s service offering contains:
• Xbox Live (for updating avatars, posting high scores and communicating with other players)
• MSN/Windows Live Hotmail
• Outlook e-mail synchronisation
• Zune music service (for buying tracks and unlimited streaming through Zune Pass)
• Bing search and maps
• Integration with Office Web applications
• Tellme voice search
• Cloud-based synchronisation (no details were given, but we expect this to be a form
of the company’s SkyDrive service)
• Facebook integration for the People Hub
• Marketplace software store

While the list reads long, it has some very important “misses” which translate into shortcomings. This includes lack of Netflix or a movie download stream and lack of e-book store, Twitter, Skype and Flickr. Microsoft also has some work to do with promoting the Zune which is not recognized as much outside of US.

Fortunately for Microsoft, the strongest service element in Windows Phone 7 is also the one that is of most strategic importance. Bing search is tightly integrated into the platform and closely tailored to the specifics of mobile search. Results are filtered according to locality (derived from Wi-Fi, cell proximity or GPS) and enable direct calling or messaging.

Bing is typical of the service continuity and value that Microsoft is seeking to deliver across multiple platforms. Moreover, the broader business will hope that the richer, contextual experience on Windows Phone 7 will help drive wider usage. The challenge facing Microsoft is Google’s head start and plans to fully integrate search across a wide range of devices. Competing with Google’s growing coverage of consumer electronics must be a daunting prospect for Microsoft and, unlike Android and Chrome OS, Windows Phone 7 will remain limited to high-tier mobile phones.

iPhone 5 being readied for January 2011 release

Posted in Mobile Devices and Company Updates by Manas Ganguly on October 16, 2010

Apple iPhone 4G was the most anticipated device of 2010. However the Antennagate issue played spoilt sport for the iPhone 4G party. Inspite of my earlier thoughts, the Android Army has yet not been able to over throw iPhone from the mantle of technology leadership. Though, the Android army keeps swelling, iPhone holds its fort. However, given the iPhone 4G and its lack of 100% response (the kinds that Apple is used to), the pressure was on Apple to quickly bring in a new iPhone to do good the losses from iPhone 4G.

For starters, iPhone 5 will have dual core processors and higher and powerful graphic chips that can deliver higher video resolutions and better “still” images when taking pictures, and it will make multi-tasking a breeze.The first ever sneak pics provide a stunning Here’s giving a sneak peak on other features expected from the iPhone 5:

The iPhone 5 thickness at 9.3mm is a talking point

1. Thinner! With shiny glass back piece – 9.3 mm thick.
o The first pics give an impression of thinner than credit card width.
2. Face recognition
3. Face Time (Video Chat) access on 3G and 4G
4. Custom SMS tones
5. Custom E-mail alerts with ability to assign different tones to each email address
6. A new, sleeker body design.
7. Retinal screen-packing more pixels per inch than ever
8. Scratch proof and shatter proof screen
9. Wireless sync with iTunes
10. 32G (basic) and 64G of memory: Sure to never run out.
11. Extended battery life: 14 hours talk time on 3G and 7 hours on 4G. Standby 600 hours.
12. Hi Definition audio.
13. Messaging indicator light.
14. True GPS built in.

The iPhone 5 is expected to have curtains up around January 2011 on the Verizon network. Also fabbled is the fact that iPhone 5 may actually feature the iWallet NFC (Near Field Coomunication) technology for seamless micropayments across the counter. Heres a Video about Apple’s iWallet on the iPhone:

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Windows Mobile 7.0: Microsoft’s Mobile Web Future depends on it (Part III)

Posted in Computing and Operating Systems, Mobile Computing by Manas Ganguly on October 15, 2010

This is the third of five part series profiling Microsoft Windows Mobile 7.0. In the earlier posts, i had discussed hardware and software perspectives around the WinMo7. This post discusses the shortcomings in the platform and how Microsoft is wooing the developer community to earn back relevance in the apps space.

Platform Shortcomings
Two main problems remain with the Windows Phone 7 operating system at this stage. Firstly, there is no opportunity for manufacturers or operators to add their own interface layer (although Hubs and tiles do allow for a degree of customization). Microsoft argues that it is putting consumers first and has heavily invested in a strong and consistent interface. The implication is that there is little benefit in manufacturers undertaking further customization that will only confuse users.

Secondly, there is no multitasking. Windows Phone 7 does support some background processes, such as playing music or synchronising e-mail while using another application. However, it does not currently support flipping between live applications in the way that Symbian and Maemo users have had for a long time and Apple users have recently acquired with iOS4. Microsoft may possibly. This would be a thorn at the start and one would expect Microsoft to address the Multitasking measure in future.

Developers
Microsoft is using established strengths and resources to attract developers. It has relied on existing Silverlight and XNA development frameworks, and removed licence fees for many tools, including Visual Studio 2010 Express and XNA Game Studio 4.0. The consistent environment and tools provided by XNA Game Studio 4.0 will enable developers to port games from Windows, Xbox 360 or Zune to Windows Phone 7. Variations in hardware and screen sizes will be limiting factors, but demonstrations of ported titles reveal a rich and consistent experience. The use of common code and tools is a step forward for Microsoft, which has historically had an abundance of tools and developers but a lack of commonality across platforms. Unsurprisingly, Microsoft cites this established developer base with deep existing knowledge of its tools as a significant opportunity.

This will be important, because application developers typically develop for three or four platforms. The current pecking order for many of them is Apple, Android, Blackberry, other. The last category includes, of course, Symbian, MeeGo, Flash, Java (for Qualcomm’s BREW, Sony Ericsson’s Cappucin and Nokia’s Series 40 feature phones) and Microsoft. If Microsoft decides it needs to address these developers, the task will be to pull itself out of the “other” category.

Motorola gaining in Android strength

Posted in Mobile Devices and Company Updates by Manas Ganguly on October 14, 2010

Four years back, the Motorola Razr was the most happening handset in terms of its looks, forms and style quotient. However, having delivered Razr and generated volumes through the Slvr series, Motorola got stuck. All its new line-up was strangely Razr looking and the form factor was extended to the point where it was over-used and lost all its charm and novelty. That was Moto’s last big platform which leveraged them to the tops in North America and brought them in a striking distance of Nokia elsewhere, but then the Razr platform also was the chief cause of Motorola’s fall. Motorola leadership got “stuck” to the Razr and didnot innovate ahead. That was the last we heard of Moto. Sales plummeted, Shares nose-dived, Moto Mobiles was dead and even went to the point of being bought over by some very dubious buyers.

But then Android happened and the Motorola CEO, Sanjay Jha was quick to identify the Android platform as the next big thing in 2008 and consequently diverted all of the Moto Smartphone portfolio to Android. Android, the new kid on the block also needed a pedigreed OEM for partnering with it in its infancy.The rest (in cliche) is history!

Android and Motorola delivered the most stunning Droid/Milestone last November and beat iPhone in becoming the best gadget of the year by Time magazine. From the launch of Droid to others such as Backflip, Sholes Tablet XT720 to the Droid II and the Droid X, i have been following Moto as they have inched forward slowly and slowly gaining acceptability and credibility all the time yet again. The good news is that Moto clawed back into Black after 8 quarters of Red last quarter.

If the earlier bits were the beginning of a recovery, then the recent device announcements made by Moto should be seen as an indication that Moto is going strong and has for most parts recovered from its 3 year stint “down in the ditch”.


The Android-Motorola line up announced. Please click on picture for detailed specs

The new Portfolio of Motos on Android power are a very interesting lot. They are as good as it gets in devices and theres no beating that. The range goes from Full Touch to QWERTY phones to Slider QWERTYs to Side Slider QWERTYs to Twist QWERTYs. 2 of the 7 Androids cover CDMA and Moto has covered 3 of the 4 US operators: AT&T, Verizon and T-Mobile as its partner. Motorola has also covered most of the target groups with different form factors: Business Users, Style Seekers, teens, Casual Users, Heavy Messaging Buffs and more. The portfolio announced is seriously potent and with Android, the only was Moto smartphones will move is upwards.

For the emerging Markets Motorola is looking the Mediatek way and is trying to leverage its scale to source devices from Chinese ODMs. The EX115 and EX 128 are two prime examples of the focus on emerging markets. The challenge however in the emerging markets is that Motorola is weak in distribution and there are just too many competitors offering same specs at more value for money prices. Beating that is going to be tough and Moto will need to take a holistic and integrated approach to its mid and low end strategy in this segment.

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Bing and Facebook can spell problems for Google and Foursquare

Posted in Internet and Search, Social context, media and advertising by Manas Ganguly on October 13, 2010

October 2007: Microsoft takes a 1.6% stake in Facebook for $240 million.

November 2009: Microsoft integrates Facebook Feeds into Bing search results.

October 2010: Fingers crossed as Facebook and Microsoft are due for a big announcement at the Bing Event tomorrow. It is expected that tomorrow’s Bing event is about bringing Bing and Facebook even closer together. It is reported that Bing may employ Facebook “like” data to make search results more personally and socially relevant. Here’s the example of search going social.

Whats at stake? Checkmate Google and Foursquare

That could be a huge blow to Google, whose relevance ranking algorithm is the company’s crown jewel and the main reason why it still dominates the search market. Google guesses what users are interested in based on their past behavior. Facebook knows what users are interested in because they’ve entered the data right there on their profile pages and news feeds. If Bing can get that Facebook data, that’s an advantage.

Another possibility is integration between Facebook Places and Bing Maps. Imagine signing into Bing Maps using your Facebook name, then seeing the location of all your Facebook friends who’d also checked in. Facebook certainly could use help getting people to use Places. Facebok places is yet to find traction after launching in August 2009.More and more users are signing up for geo-location service Foursquare.

Possibly this will bring more search traffic Bing which has been able to make about marginal gains even after its association with Yahoo Search.

Lets watch this space then.

Windows Mobile 7.0: Microsoft’s Mobile Web Future depends on it (Part II)

Posted in Computing and Operating Systems, Mobile Computing by Manas Ganguly on October 12, 2010

This is the second of a 5 part series profiling Windows Mobile 7.0. In the earlier post, I had discussed about the benefits and losses of hosting a vertically integrated model for Hardware design in terms of user experience, Operator tie-ups and Operator services and the fact that WinMo will solely be devices competing at the high end mobile computing spectrum.

Software

Windows Phone 7 is a drastic step for Microsoft, in that it completely discarded the Windows Mobile platform and allowed designers to start largely from a blank sheet of paper. The exception to this was the work done in developing the Zune user interface, which has been carried across to Windows Phone 7. The “clean sheet” approach may have resulted in a lengthy development cycle as Apple and Google grew exponentially, but we believe the outcome vindicates the decision to build an entirely new platform, designed from the ground up for Microsoft services. Indeed, Windows Phone 7 puts further pressure on Nokia to ensure the swift delivery of MeeGo and Symbian^4, not only to alleviate further drops in market share, but to bolster a weakening position in developer support.

Unusually for Microsoft, the design has been led almost completely from a consumer’s point of view, even though the company has ambitions for Windows Phone 7 in the enterprise market. The emphasis throughout has been on quality of execution rather than stuffing it full of features. The interface is very smooth, slick and fast on all the devices CCS Insight has used. It has also been designed with fresh thinking and it contains a number of neat innovations. For example, the camera interface shows a glimpse of the previously taken photo at one side of the screen, making it obvious how to get back to an earlier picture.

The architecture of Windows Phone 7 is also innovative. It is based on “Hubs” — areas of the software that manage access to different types of content. Microsoft provides six Windows Phone Hubs: People, Pictures, Games, Music and Videos, Office and Marketplace. In addition to these it is also possible for handset manufacturers and carrier partners to create Hubs as a way of presenting their own content and services. Beyond this, Microsoft’s partners can create tiles for the home page, so that users have a shortcut (containing live content) to the Hubs. Hubs effectively blur the line between applications and services, enabling closer integration of services with aspects of the phone. Examples are already seen in the way that the People Hub integrates with Facebook and in the way some of the music service applications connect to the Music Hub.

Windows Phone 7 serves up opportunities for deep third party integration. Third-party applications can make use of the same design elements used in Hubs, so that applications work like native software. This represents a fundamentally different philosophy to the closed Apple environment and application-centric ethos of the iPhone. For Microsoft, this represents a clear
point of differentiation as it seeks to win developer support.

Although Windows Phone 7 has a consumer-friendly design, Microsoft has built in significant capabilities for Office, including the ability to view, edit and annotate Office 2010 documents, integration with Outlook and collaboration with OneNote and SharePoint. As a result the platform has respectable enterprise credentials. However, the high cost of handsets will be a significant inhibitor to widespread adoption among businesses in the short term and the platform lacks the comprehensive device management and security policy features that characterized Windows Mobile 6.5. It is expected that WinMo 7’s enterprise capability will evolve much the same way as iPhone and Android did in the Enterprise segment.

The bigger play for Microsoft is positioning Windows Phone 7 as “a great gaming platform”. Microsoft has linked Windows Phone 7 into its Xbox Live service. This could establish Windows Phone 7 as the leading mobile platform for high-end games. Although the size of this opportunity is arguably smaller in volume terms than the more casual gaming segment, it could prove a highly lucrative opportunity for game developers. This would represent healthy competition for the iPhone, which has come to dominate gaming on high-end devices, particularly given Android’s limited standing as a games environment at present. However, Sony’s PlayStation Portable gaming platform is expected to migrate from dedicated hardware to Sony Ericsson Android devices in the near term. Such a move would not only increase competition but represent a solution for a far broader range of mass-market devices.

Continued here

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