Ronnie05's Blog

Why the Samsung story feels unsustainable?

Posted in Uncategorized by Manas Ganguly on January 3, 2014

Samsung’s Chairman, Lee Kun-hee has upped the ante for the employees for Samsung 3.0 – asking for innovation and software focus. Mr. Lee is quoted saying “Research & development center(s) should work around the clock, non-stop” and that Samsung “get rid of business models and strategies from five, ten years ago and hardware-focused ways.” This comes after the President of Samsung, Lee Sang-hoon, said just in November that the company needed to focus on software quality, as they were severely lacking in quality software when compared to the competition.
2012-13 have been magical years at Samsung, but towards the end of Q4 2013, profit growth slowdown became a key concern at Samsung. The South Korean company is expected to report an operating profit of more than $9 billion for the fourth quarter, according to a survey of analysts. That’s more than the overall revenues of many tech companies, but it represents a 9.2% increase from the same quarter a year earlier. By comparison, Samsung’s profit in the third quarter was up 26% year-over-year. Declining profit growth was a top concern for Samsung for much of 2013.

Are these concerns exaggerated? Or the conglomerate referred to as the Fifth Horseman on the technology bandwagon is beginning to see a slow and consistent decline reminiscent of commodity companies. I think, what we are looking at is a slow marginalization of Samsung through 2014, very akin to Nokia through 2008-10. Here are my reasons

1. At its core, Samsung is a “device” company – the future belongs to those who “own” customers and eco-systems

a. A Google for instance is 40% of the web – mining, indexing customer details and customizing the web for individual customer in accordance making money in return on advertisements

b. Facebook is the social key to a person’s identity on the web. It follows the same principle as Google but it uses the social plank

c. Apple is the innovator – fusing experiences, services, devices, platforms into one seamless continuum. Personally, i think Apple’s innovation is far deeply entrenched than Google – and i await the iWatch to change the paradigm around the user

d. Microsoft is a little over the place and is yet to get its act in place – but it has very strong enterprise roots. How it capitalizes and leverages is to be seen

2. Apart from device dimensioning i.e a bigger screen, a better screen, alternate screen; Samsung has not been a significant force in services, customization, intelligence and experience.

3. Samsung’s OS strategy has also been unclear. It launched Bada – then EOL’ed it. Tizen is yet to find any traction. For all good reasons, Samsung is completely dependent on Android to drive volumes and value.

4. Also Samsung’s innovations have mostly been horizontals – a watch that is an accessory to a smartphone. They miss the whole perspective of wearables as a key to a much larger opportunity in terms of the user per se. That is where Apple is doing the trick.

5. Samsung has not invested in other variables of eco-system – a map for instance, a music service, or enterprise suit, a gaming platform – Remember Nokia did all this and still couldnot leverage itself.

6. Samsung has been working on chipsets – but again, it is the likes of Apple who steal the march on 64 bit chipsets. By the time Samsung gets one of these on road, Apple would have a 1yr of learning and experience driving their subsequent roadmap.

7. Samsung has been an outstanding innovator in touch interfaces… its video of touch centric world says it all

However, outside of its perspectives of touch centred interfaces, Samsung could be missing the other big interfaces of the future and it has made very little advances in other user interfaces – speech, augmented reality, alpha waves etc… (and they seem to be missing it)

… but then as a device maker, is it Samsung’s job to dab into making and owning user interfaces and users? Probably not! But then this is exactly what is required from a technology innovator. Will Samsung make the jump from a device maker to a service anchor – possibly not.

Amidst the device makers – Huawei, ZTE, Lenovo and the likes, Samsung will be miles ahead of the pack – but i am not sure if it could be the mythical fifth horseman of technology as is generally believed. I see a flaw which will make this story unsustainable.

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Media: the Paradigm of Passive and Active consumptions

Posted in Semantic Media and Web by Manas Ganguly on March 8, 2013

Platform owners, Content aggregators, Application makers are looking to increase the engagement quotient on the platforms. Engagement by its very definition is about activity as against passivity. Terms such as Activity and Engagement read attention spans, relevance, context, stickiness/repeats and discovery. On higher level – user generated content, user leads creation, influencing user responses and creating user stewardships is where the monies lie for the whole of the eco-system.

If Google calls itself a media company over its earlier definition of a technology company, it imagines the future right. Technology futurists are all for technology that enables active Media consumption, real time measurements of engagement and stickiness and serving up experiences which are relevant to the context of consumption. The ability to measure the consumer behavioral patterns to applied stimulus is key to a connected, converged media – this is something that i call Semantic Media. Quality of Consumer interaction with the content is a high stakes game, with billions of consumer dollars up for grabs: notwithstanding cable licensing agreements, advertising budgets, on-demand subscription fees, not to mention the future of the connected home.

media - active & passive consumption

Whats the future opportunity at hand? You have to think about TV in the 1940s-1950s and multiply the impact a couple of 100 times. Thats what the future of media and technology is worth!

Is Google ace’ing Apple in the race for tomorrow’s Technology leadership?

Posted in Uncategorized by Manas Ganguly on January 28, 2013

If you are not doing something crazy, you are doing the wrong things
Google CEO Larry Page

However what is so interesting in the convergence space is the approach that the two giants – Apple and Google are taking to the leadership of the technology slugfest. While Apple fiddles with its 7 year old Apple TV inching it to perfection and there is some news about Apple delivering an iWatch towards wearable computing – Google seems to be focussing on Project Glass and its Driverless Cars as the prime future projects. From the current state of affairs – it looks like while Apple fiddles over TV and iWatch – Driverless Cars and Project Glass might be the key for Google to Vault and Ace Apple.

Whats emminent in the next 3-5 year horizon is the paassng over of the Smartphone age substituted by more Always on, Real time Computing.

Are valuations in Social Media stretched? (Cue:Under-promise, Over-Deliver. What about Over Promising?)

Posted in Social context, media and advertising by Manas Ganguly on May 20, 2011

Professional social networking site LinkedIn is raising the price at which it will sell shares in its forthcoming initial public offering (IPO). The new sale price values the firm at $4.3 billion rather than the earlier $3 billion. This comes in the wake of the fact that comScore reported 65% Y-o-Y increase, from 48 million users in March 2010 to 79 million as of March 2011 in traffic to Linkedin.LinkedIn made $15 million last year. It’s now worth $8 bln. That’s a P/E of 37+. Isn’t that a sign of bubble?

Signs of trouble yet?

In 1999-2000 Dotcom burst, overvalued dotcom – companies, which were not-profitable, went bankrupt and together with it millions of (invested) money and many jobs were lost! No one really knows if there is a bubble until after one pops. Nevertheless, there are many signs of froth. The valuations in Social Media are stretched a bit. Microsoft bought over Skype for $8.5 billion, Goldman Sachs has invested $1.5 billion in Facebook that has valued FB at $84 billion, Groupon is valuated for $15-$20 for its IPO listing. Such valuations are reminiscent of the dotcom bubble which busted 10 years ago.Twitter is being valued at $10billion and more. Zynga, creator of the popular Facebook game FarmVille, is worth more than $5 billion.Yammer, a system for sending Twitter-like messages inside businesses, recently raised $25 million, while investors reportedly signed a check for close to $30 million for a niche blogging site called Tumblr. GroupMe, a new group messaging app for cellphones, raised $9 million. Path, an iPhone app for sharing only photos on a social network limited to just 50 people, received $2.5 million. Its competitor, Picplz, scored $5 million. And those are just within the last few months. The trend accelerate over the last six to nine months. The valuation of Facebook has multiplied by a factor of 7 in the last 12 months.

Dotcom was different

Back in the ’90s, companies got funded for five times the amount that Tumblr raised and didn’t have anything close to a business model. People were getting $50 to $200 million a pop and it brought down an entire industry. The frenzy is as much the result of simple laws of supply and demand as the herd mentality. Thanks to the constantly falling cost of computing power, a start-up needs less money to get off the ground. More wealthy people are viewing investing in technology as a hobby, which has increased the competition. Investing in technology has become fashionable. It used to be that angel investing was the province of wealthy men. Now its become the province of everyone. Venture capitalists — hungry for growth and troubled by weak returns — are moving toward smaller investments, hoping to catch the next Facebook in its infancy.

Valuations and Companies will need to move with caution

There’s a lot of exuberance in the social media and technology. A lot of the valuations there don’t make a lot of sense.But, most Silicon Valley investors still see no signs of gloom and doom. Start-ups today have robust business models and business cases that make them viable. The Internet ecosystem has also matured. There is more to valuation than just eyeballs. It could be different this time! In 1999 when the bubble happened many companies did not have business models and advertising on the Web was very immature.2010 and onwards, the real challenge for start-ups flush with venture cash would be proving they were worth the investment or risk having to fold their companies.There may not be a big implosion, but down the road there will be a bunch of blood and tears. The music is going to stop and people will realize there aren’t enough chairs for companies to get the next round of financing. The High valuations though may be cheered for are long term liabilities on the entrepreneurs.The key question now is whether they can accelerate their revenue and earnings growth to eventually validate the valuations.

There are elements of the LinkedIn model – recruitment search – which reflect successful models elsewhere.The LinkedIn Valuation is, of course, just an appetiser for the big one – the prospective float of Facebook at some point in the not-too-distant future. How it is priced will provide a clearer picture of whether the possibly irrational exuberance around LinkedIn’s debut was specific to the dynamics of its offer or reflects the broader capitalisation of optimism about the commercial prospects for the major social networks.

A sound business proposition is the ability to under-promise and over-deliver. Currently the Social Networking valuations are very tall promises which make delivery (at such high order) a suspect. What we will need to wait and watch over the next 2 years is the ability of organizations to be able to spin the profits that the valuations oblige them to. If they cannot stand up to the expectations, then we all know that this is a bubble.We live in interesting times, dont we?

Powering Inclusive Growth through ICT (Internet, Communication and Technology)

Posted in Technology impact on economy and population by Manas Ganguly on August 16, 2010

10% increase is Mobile penetration would lead to .6% increase in GDP of the nation: That speaks volumes of Telecom as a economic multiplier. In a nation as large as India, the power of Telecom to connect its 1.2 billion people with Information and utility services is seen as the next Mass movement to drive the a broad based fundamental growth.

The Government of India realizes the potential of Telecom and has been at different levels pushing the levers for stimulating Telecom/Broadband growth. In what is a spin-off of sorts, the Government of India in partnership with NABARD, Department of Telecommunications, Banking/Financial institutions and funded by the USOF (Universal Service Obligation Fund) is launching a spate of micro-programs that will aid Women in Rural areas (Aggregated to Self Help Groups) to become entrepreneurs and gain some socio-economic independence.

The project which is un-named yet, focuses on females, and uses NGOs and Micro-Finance companies to reach out to these Self help Groups (SHGs), helping them with micro-credit and loans to finance their ventures. Furthermore, GoI is also joining hands with market players under the aegis of Corporate Social Responsibility to support the SHGs in their entrepreneurial endeavor. So, the Nokias and Airtels of the world are a part of this whole exercise extending their support, help and expertise to the SHGs. The beauty here is that while this is under the aegis of CSR activity, it has economic and business relevance to these players as well.

The SHGs adorn the role of last mile distribution houses in an otherwise lengthy and economically unviable distribution supply chain. Thus the whole template of a win-win-win for all three parties in the program. The Government benefits from economic-inclusion of the bottom of the pyramid people. The SHGs would benefit from being able to have an earning for themselves at the end of the month. The Companies would benefit from benefits of getting connected to the last mile and the last consumer in the value chain.

That’s called reliving C K Prahlad’s Value at the bottom of the Pyramid.

Crystal Gazing: Mobile technologies to watch for in 09/10

Mobile technologies/trends to watch in 2009 and 2010

1.         Bluetooth 3.0 —will likely include features such as ultra-low-power mode that will enable new devices, such as peripherals and sensors, and new applications, such as health monitoring. Bluetooth 3.0 is intended to support “classic” Bluetooth, Wi-Fi and ultrawideband (UWB). It’s possible that more bearers will be supported in the future. Wi-Fi will allow high-end phones to rapidly transfer large volumes of data.

2.         Mobile User Interfaces (UIs) — UIs have a major effect on device usability and supportability. They will also be an area of intense competition in 2009 and 2010, with manufacturers using UIs to differentiate their handsets and platforms. Companies should expect consumer interfaces to drive new expectations of application behavior and performance. Better interfaces will make the mobile Web more accessible on small devices, and will be a better channel to customers and employees.

3.         Location Sensing — Location awareness makes mobile applications more powerful and useful and will be a key component of contextual applications. Location sensing will also enhance systems, such as mobile presence and mobile social networking. The growing maturity of on-campus location sensing using Wi-Fi opens up a range of new applications exploiting the location of equipment or people.

4.         802.11n — 802.11n boosts Wi-Fi data rates to between 100 Mbps and 300 Mbps, and the multiple-input, multiple-output technology used by 802.11n offers the potential for better coverage in some situations. 802.11n is likely to be a long-lived standard that will define Wi-Fi performance for several years. High-speed Wi-Fi is desirable to stream media around the home and office. From an organizational perspective, 802.11n is disruptive; it’s complex to configure, and is a “rip and replace” technology that requires new access points, new client wireless interfaces, new backbone networks and a new power over Ethernet standard. However, 802.11n is the first Wi-Fi technology to offer performance on a par with the 100 Mbps Ethernet commonly used for wired connections to office PCs. It is, therefore, an enabler for the all-wireless office, and will be considered for replacing older 802.11a/b/g systems in 2009 and 2010.

5.         Display Technologies — Displays constrain many characteristics of both mobile devices and applications. During 2009 and 2010, several new display technologies will impact the marketplace, including active pixel displays, passive displays and pico projectors. Pico projectors enable new mobile use cases. Battery life improvements are welcome for any user. Good off-axis viewing enables images and information to be shared more easily. Passive displays in devices, such as e-book readers, offer new ways to distribute and consume documents. Display technology will also become an important differentiator and a user selection criterion.

6.         Mobile Web and Widgets — The mobile Web is emerging as a low-cost way to deliver simple mobile applications to a range of devices. It has some limitations that will not be addressed by 2010 (for example, there will be no universal standards for browser access to handset services, such as the camera or GPS). However, the mobile Web offers a compelling total cost of ownership (TCO) advantage over thick-client applications. Widgets (small mobile Web applets) are supported by many mobile browsers, and provide a way to stream simple feeds to handsets and small screens. Mobile Web applications will be a part of most B2C mobile strategies. Thin-client applications are also emerging as a practical solution to on-campus enterprise applications using Wi-Fi or cellular connections.

7.         Cellular Broadband — Wireless broadband exploded in 2008, driven by the availability of technologies such as high-speed downlink packet access and high-speed uplink packet access, combined with attractive pricing from cellular operators. The performance of high-speed packet access (HSPA) provides a megabit or two of bandwidth in uplink and downlink directions, and often more. In many regions, HSPA provides adequate connectivity to replace Wi-Fi “hot spots,” and the availability of mature chipsets enables organizations to purchase laptops with built-in cellular modules that provide superior performance to add-on cards or dongles.

8.         Near Field Communication (NFC) —NFC is emerging as a leading standard for applications such as mobile payment, with successful trials conducted in several countries. It also has wider applications, such as “touch to exchange information” (for example, to transfer an image from a handset to a digital photo frame, or for a handset to pick up a virtual discount voucher.NFC is likely to become important sooner in emerging markets, with some deployments starting by 2010.

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