Degen.Net

Psst! hey buddy I have a hot stock pick for yea… Warning: All of my investing advice should be consumed with a grain of salt. In the spirit of full disclosure; I discovered just how bad a day trader I am during the last tech bubble of 2000! But, seeing we are now peaking in the Bubble 2.0 era, it seams an appropriate time for me to dust off my stock prognostication skills and post about two of the most influential tech issues out there.

Apple and Google – In a Class of their own

Some tech companies are all about the hype, while others actually deliver on the goods, but rarely do you find established players that are both profitable while simultaneously maintaining that meteoric level of excitement present in a pre-IPO startup; and then there’s Google and Apple. Titans of tech both command legions of devoted customers, soaring share prices and massive media attention. But is their stock worth it today? Is there still room for growth?

Fundamentals Don’t Matter

While many business analysts and fund managers are quick to cite trends and backup their stock ratings with statistics like earnings per share, Cash reserves, or the state of a company’s management team, in the case of both Apple and Google these hard facts don’t seam to matter.

The usual barometers for company health and stock value can not measure these firms. While some might argue this is just a symptom of the new tech bubble, Apple and Google are so compelling, their momentum is virtually unstoppable. Let’s look a little deeper at each company and try to uncover why this is.

Google – It’s about the Ads stupid!

The key thing to understand about Google is that they’re an advertisement firm. Nope, not a search engine or social network or widget provider or even soon to be a mobile phone OS, Google is the new ad medium of our time – and it’s only going to grow.

Google Ad sense is already the most profitable aspect of the company, and while search made them famous, ads are paying the bills. Look for this to continue especially as Google branches into new ventures and platforms like the Open Social and Gphone OS spec. With a billion plus potential people to target – and I do mean target – the sky, and share price, are the limit.

Potential pitfalls do exist though. Foreign government’s demands to block access or hand over results as a provision of doing business in their country (think China) have created industry watcher and human rights concerns, even some loyal fan base outrage. Privacy, however, is an even greater source of discord. As users freely disclose marketing and demographic data that Google and its partners are using to targeting products and services at users with precision accuracy, privacy advocates warn that too much personal information is being amassed.

While these concerns are only likely to grow given Google’s pervasive plans, end-users simply enjoy Google’s offerings too much to give them up. Combine end users insatiable appetite for convenience with the virtual ubiquity of Google’s services – and therefore ad placement opportunities – and you have a formula for continued success. Looks like the stock is still a bargain at $1000 per share!

Apple Uber Allies

If there is one lesson that can be learned from both the Jonestown massacre and Apple’s stock performance as of late; the cult of personality is alive and well. Now I’m not saying that Steve Jobs is a charismatic, magnetic, tyrannical cult leader… then again, let me get back to you on that. Regardless of whether you want to attribute Apple’s success to its vivacious leader, there’s no question that Job’s return to Apple has ushered in a new era of profitability and market share expansion.

Apple is unquestionably the most over hyped and over covered tech company out there. Despite all the ink that has been spilled chronicling Apple’s greatness and the zealous fan base, even this non-Apple user has to admit; Apple is really firing on all cylinders and its stock is only going to climb. This growth is going to be driven by continued dominance of the iPod/iTunes ecosystem, strong computer sales (as Microsoft Vista falters), and the long term impact of Apple’s entry into the wireless space, ala the iPhone.

So when analyzing Apple the bottom line is: despite the excessive hype surrounding their products, software and dynamic CEO, Apple is still an issue to buy and hold.

Mobiles are the Future

Both Google and Apple are focused on the future, and the future is phones. Apple has already made a tidy chunk of change this year with the iPhone, and relatively speaking this is just the tip of the iceberg. While Google’s Android platform will not be ramping up till mid 2008, the search and ad giant is not about to surrender the mobile market to Apple, Microsoft or Palm.

Not only do mobiles represent new revenue streams for Apple and Google, but they usher in the next battlefield for consumer minds and pocketbooks. The companies that dominate the coming generation of highly integrated mobile voice/messaging/computing devices will undoubtedly see dramatic profits and stock appreciation. Google and Apple both know this and have set in motion strategies to capture this market, this anticipated growth and Apple/Google’s positioning for it is one of the most compelling reasons to own both companies.

Forget the Hype, Buy Apple and Google

It’s hard to find two companies that have greater visibility that Google and Apple. They are part of our daily lives, covered exhaustively and considered over valued by many. Despite what the detractors have to say, these issues are must haves for any tech portfolio. Heck the only thing that would make them more attractive is a merger. What would we call them? iGoopple?

As one surveys the tech landscape you don’t have to look very hard before it becomes painfully obvious that some companies that are here today will, no doubt, be gone tomorrow. Many technology and business analysts are quick to point out that we are simply in the midst of, “Bubble 2.0”, and this is to be expected. I argue that there are no prerequisite conditions required for a bad business model.

Having said this, some companies manage to elevate the art of promoting a failing business to epic levels. Today’s case in point is Vonage; or as I like to refer to them, “Dead VoIP Walking.”

Vonage: you know them even if you don’t use their service, thanks to a ubiquitous “orange” marketing campaign that prompts “people do stupid things everyday – like paying to much for phone service”, an ironic marketing tactic seeing how they are trying to operate the organization in a similar illogical fashion. Quickly, let’s look at the factors contributing to Vonage’s impending implosion.

Legal Woes without End

While Vonage is doing some clever marketing and enjoys some modicum of success with attracting new subscribers, market penetration is not really an issue, seeing how they could soon be sued out of existence! Patent case after case not only puts the entire revenue stream in jeopardy, but also acts as a drag on company resources and erodes confidence in the long term viability of the service. New technologies like VoIP are difficult enough a sell to non-tech users as it is, add doubts about your phone provider’s future, and the potential loss of service… Good luck with attracting and retaining customers.

Crushing Competition Closes In

Incumbent Telcos and Cable providers have compelling offerings that are either easier to use (or at least understand) and some cases are even cheaper when you factor in the discounts offered via service bundles. No question local dial-tone providers are not the most innovative kids on the block, but once forced to fight or run, they are now fighting back! In addition to the legal challenges from major players like Verizon, carriers have launched their own VoIP and/or unlimited fixed rate calling programs. Cable companies, long interested in lucrative IP dollars, are now in direct competition with the local bell companies and aren’t about to see an upstart like Vonage steal that action.

Forget about Vonage or your local dial-tone provider – Skype has already won. With a larger user install base then any other VoIP offering, a robust international network, droves of third-party hardware and lower prices, why would anyone select Vonage over Skype? Perhaps Ebay should open its wallet and fund a major marketing effort for Skype; at this point it would be a merciful act, bringing a quicker end to the ill fated Vonage.

The End is Nigh

One might conclude that VoIP is doomed, but quite the contrary. VoIP is just beginning to come into its own, unfortunately Vonage is just a sacrificial lamb on the alter of disruptive technologies – Remember that cute sock puppet or those home grocery vans?

The Bottom line: look for Vonage to cease operations as we know them in the next three to six months. As the Vonage pitch implies, ”Signing up with a VoIP provider that will soon be defunct, now that’s just stupid!”

In the 1980’s music lovers where energized by the fusion of an established medium, Television, and the record business; the result had everyone demanding “I want my MTV!” It’s a fantastic example of two technologies cross-pollinating each other and forming vibrant new products and business avenues. Today a similar marriage of media and technology is taking place in the wireless mobile space – and its going to be big!

The last decade has shown us the evolving face of music, and I’m not talking about the raise or fall of any genre, style or particular artists, but rather the publics method of procuring and digesting their musical selections. Music is moving faster then ever, from car based MP3 Players, to the culture of “sharing” music via P-to-P networks, to the ubiquity iPod users jogging or commuting on the train; music is all digital and always mobile. Music on wireless devices is just the next logical extension of this move to a more on-line and mobile community.

One Gadget to Rule them All

Its simple really, users want one device to handle all their mobile needs. Convenience
is cool – who wants to carry multiple devices, but again fusion is the key here. Up till now the convergence of PDAs and Cell phones has represented only a limited segment of the total mobile market; partially due to the marketing of high-end PDA phones to business users vs. consumers, but largely due to price points on these handsets, but that’s changing. The next generation of musically inclined, consumer oriented phones are available now, they’re slicker, sexier and more geared for the mass market then ever before.

While the relatively pricey ($399) iPhone garners most of the spotlight, in this “Music enabled” phone space, many other options abound and at subsidized prices under a hundred bucks. You can be sure that manufactures like Motorola, LG and Nokia will add more music friendly phones at entry level prices, as the real money is in subscriptions not hardware.

As consumers become more comfortable listening to music on their phones, rather then a dedicated music player like an iPod the next wave of music and technology fusion will smash ashore.

The Social Networking of Mobile Music = Payday

This might be the single biggest paradigm shift that the music industry has ever had to deal with – Music on cell phones. But not because of the intricate legal challenges that the RIAA might dream up, rather due to the inherent social nature of music. On one hand music and communications devices should prompt a, “Well duh”, response, but surprisingly, the implications of this new delivery model have been under reported.

“Surprising” when you take in account the recent valuations of social networks like Facebook. Stay with me now… When you combine the features of an iPod like player on a closed distribution network, that has realtime two-way communication; suitable not only for texting, but ad placement and online sales – connect the dots. We are witnessing the birth of an entirely new social network entertainment and communications platform!

What I’m talking about here is Napster, Myspace, Twitter, iTunes, Facebook, YouTube, Skype, and Google all mashed together on a mobile platform – not a fixed desktop or clunky notebook – but a phone, the form factor users already are accustom to using and carrying with them at all times. Its a virtual link into every users wallet as far as telcos are concerned.

Given the present state of exclusive contracts and locked phones in the US market, once a wireless provider get you “hooked” on their phone and service you are locked in and your provider has a few tools to keep you there!

Convenience is King

Let’s face it, we are suckers for ease of use and simplified solutions. Telcos know this, and music on mobiles provide carriers yet another opportunity to exploit this basic human desire.

The sales pitch will go something like this: “Now your whole music collection is available anywhere you are! With {insert provider’s name here} online music library you can easily browse, sample and buy your favorite songs all from your phone.”

It will be criticized by audiophiles and tech aficionados, but is doesn’t matter – the mainstream market, especially everyone under 30 will go gag-gag and start downloading the flavor of the day tunes like a six year old binge eating Halloween candy.

Smart marketing would include an ability to “gift” a song to your friends, building on the social networking aspect of the service, and further shackling you and your “in network” friends.

The Subscription Model finally gets its day in the Sun

While all of these songs could be made available on an ala cart pricing schedule, the truly innovative providers will team with or build their own subscription model. All the music you want for XX dollars a month. Lots of upsides to this approach:

Low-end phones with limited memory will have that same access to the music library buy offloading songs played less often. Limited memory phones can be made available at a lower cost to get users into the service.

Users libraries will be available across multiple phones, so if you change out your handset all your selections just reload to it seamlessly.

End-to-end DRM; again tech savvy customers hate it, but mainstream users are clueless about it. Couple a locked phone platform with a proprietary network and these songs aren’t going anywhere – making content providers happy and more apt to cut deals.

Just like all subscription models, consumers will put on their own handcuffs – if they leave their carrier or cancel the music portion of the contract, none of the music remains.

Finally, an iTunes alternative. A subscription service properly implemented gives carriers a real option to present that customers might prefer over the 800 pound gorilla that is Apple’s iTunes Store. Again, this makes content providers happy, as they are sick of there agreements with the online distribution Goliath.

The Time is Now – Sort of…

So when will get to see and hear all this goodness? The short answer is soon – as the pieces are still coming together. Phone hardware is more than up to the challenge, marketing is on-board and hyping the offerings whether the carrier’s infrastructure is ready or not.

With the holidays upon us, and if not “The Holidays” themselves certainly the holiday shopping season, wireless companies are desperately working to convince all that its time buy. Thanks to recent high profile product launches of multi function devices like the Apple iPhone and many Microsoft Windows Mobile based phones, music enabled devices are on everyone’s wish list this year, but should users take the plunge?

It’s safe to say that for early adopters and users willing to “hack” a solution, now is the time, but mainstream adoption of this new bread of music enabled phone is still a ways off. As carriers, who are more motived then ever, setup there contracts with music stores or build out their own we will see better integration with handsets and the marketing to entice new customers. Look to see this level of fusion later in 2008, making next year’s holiday season the break through for Music on Mobiles.

Its month three since I jettisoned Microsoft Word and Excel, and switched to Open Office as my full-time spreadsheet and document editor. And while the experience has been overall very positive, I’m quite disappointed with the spell checker correction algorithm.

Good spell check has always been a big part of my word-processing needs – Yes, I’m a horrific speller – and the heuristics for the auto-correction is just not on par with Microsoft Word.

Also lacking is the facility for managing custom dictionaries. I was unable to easily port my existing Word compatible dictionary; and by easily I mean the ability to do it in under an hour!

I’ll have more updates on my experiences switching in future posts, but for now I need to mind my spelling.

As a life long free market capitalist, I have to question just how screwed up an industry has become when I cheer the thought of new government legislation to “regulate” business practices. Yet that’s exactly where US consumers find themselves as state and federal representatives consider vesting a “Cell Phone user’s Bill of Rights”upon mobile providers.

Whether its a great awakening of consumer awareness that we have been pushed too far by greedy monolithic wireless carriers, or the feverish crescendo of pain users are expressing over all things iPhone – Politicians are taking an interest in the idea of new wireless regulations. As state houses and capital assembles around the country begin to debate measures to protect constituents you can be certain that cell providers are watching with great interest.

How did we get here?

While it feels like it’s been an over night transition, this nexus of user frustration toward wireless companies and said companies’ desires to bulk up their bottom lines has been coming for some time. Think back – circa 1990s; In the past cell phone adoption in the US was viewed as a business expense or the purvey of high-end “luxury” and “geek” markets. Subscriber penetration was lower, but usage costs were generally higher due to heavily metered plans and punitive roaming polices. Fast forward to the present, how the marketplace has changed. Cell phones in North America are so pervasive that many consumers opt to cancel traditional residential land-lines, preferring instead the convenience of full-time mobile usage. Team home phone replacement with ubiquitous family plans and it’s normal now to see such proliferation of phones that practically every eight year old is talking/texting away.

This drastic increase in the number of mobile devices has done more than just multiply the number of area codes we need, it’s been a financial field day for likes of Verizon, AT&T, Sprint, T-Mobile, etc. Thanks to rapid user growth and the addition of consumer features like ringtones, gaming downloads, music, and texting carriers have snared the masses, now how to keep and fully exploit these subscribers?

Hello, some service would be nice!

Has anyone every truly had a positive customer service experience with their provider? Really I would like to know, seeing as anytime I walk into a local company store to get help with my device or plan, I usually see the heard of bewildered looking, discontented people waiting in a 30 minute plus line to talk with a rep and turn around and walk out. Later, when I still need help and call the tech support group – and wait that same 30 minutes – I get someone ten time zones away struggling to read an English “support script” that does not address my issue, only to be told that I will need to be elevated to second level support and they will call me back in 4 hours. Or perhaps you need account billing help to get clarification on erroneous charges you have on a statement, only to be told those are not false charges but some “fee” that was not clearly disclosed at the time of purchase.

The examples go on and on, but the problem is obvious and remains unchanged – Cell providers really don’t care. Which leads us to our next point: do you think you are going somewhere?

“Help – I’m locked in.. and I can’t get out!”, of my plan that is.

Boat owners are familiar with the axiom – The “best day of your life” is both the day you buy your boat and the day you sell it! The same might very well be true of the relationship many have with their cell providers. Arguably, the single greatest factor contributing to mobile user angst these days is the discovery that you’ve been locked in. Locked in by a multi-year contract with early termination fees or the realization you posses a handset that is locked exclusively to one provider.

But these business practices should come as no surprise, as they serve the wireless companies’ best interest. By locking users into both their network and contract they mitigate subscriber churn. Considering the much heavier saturation of current US subscribers The last thing your carrier wants is for you be able to actually change or terminate service.

An Intervention is Required

So then the dye has been cast and the course certain – A federally mandated cell phone consumers bill of rights is destined to be made law? Not so fast. As with all things in politics a simple issue can quickly become clouded.

While consumers certainly have reason to be all worked up, demanding change is a good start, but what should the remedy be? Here are a few key points any Wireless Telco Act should tackle.

1. Say what you mean, and mean what you say. Whether is is confusing contracts or sales/service reps that change their story depending on who you talk to – it needs to be clear, concise and concrete.

2. End phone subsides and the contracts that result. This is good for carriers, manufactures and consumers: Carriers get the cash upfront for the phone, Handset makers don’t have to sign exclusives with just one provider, and Consumers, having already paid for the phone out of pocket, are not subject to a contract or termination fees.

3. Ensure Phone portability – not just number portability. As much as possible the great divide of phone and network lockins needs to stop. If I buy a CDMA network phone from Sprint and want to switch to Verizon I should be allowed to do this. The same would be true for say AT&T and T-Mobile (Yes, I’m talking about the iPhone!)

4. Simplify Pricing/Service Options. Enough with the endless options already! Some strides are being made in this area by MVNOs like “MetroPCS” with a flat price for all that calls/txt/data you want at one price. It’s not that you can’t have tiers of service, but most consumers are just confused with billing plans and complex up charges.

It’s better to be Feared, then Loved.

I’m not sure how Machiavelli would have come down on the question of a mobile users bill of rights, but to barrow from him, his concept of using fear as a motivator might be just what wireless providers need – and that fear is being provide courtesy of pending legislation. Maybe that fear of action is just what the market needs. Let’s face it, codifying this type of legislation will take time – time that carriers have to enact positive changes.

This is the most likely outcome; Congress will stall long enough for a consortium of carriers to sign onto a self policed “Bill of Rights” – not an all bad outcome, as long as there is meaningful change in the practices as outlined above.

“I can’t hear you – must have a bad connection”

Other option is that the industry will continue to turn a deaf ear to the problem and ignore their customers. Bleak as this may sound it’s not unprecedented; look at the upheaval in the long distance market due to disruptive technologies like VOIP.

This much is certain, customers are frustrated and if action is not taken more and more will resort to “hacking” solutions like we have seen with the iPhone. But that’s a story for another column…

So I admit it, I’m embracing a socialistic entitlement attitude, at least about my expectation for free WiFi in Airport terminals!

The Internet, specifically delivered wirelessly, has transcended from a luxury – “Nice to Have” – amenity in our nations airports, its a must have business commodity. And the time has come for it to be available in a uniform manor: free of charge, everywhere!

Portland, Oregon – PDX, for those of you fluent in “Airportiees” (language of the frequent fliers) – has done it right; great access, easy to use and best of all free. I find myself writing this entry from the Alaska Airlines terminal at PDX today, after checking email, Skyping co-workers, downloading the latest podcasts, etc. I think I make my point; computing is a connected experience these days, and with the magnitude of people killing time on their mobile devices while waiting for flights, the need for Internet access has never been greater.

But why does it have to be free? It actually has less to do with the cost and more to do with ease of use. As one who might find himself in three or more different airports each week, I have no idea what provider will be servicing the next hub at which I land. And I’m just not going to manage multiple accounts from the likes of Verizon/T-Mobile/Waypoint and the many others that you might encounter at airports. The other option is to sign up for an hour or day of access, but then I’m forced to fill out a bunch of customer information, not to mention enter my credit card over a wireless, unencrypted connection… not good!

Just Tax me already!

Yes you heard me right, if the argument against airports deploying free public WiFi networks is cost, go ahead and charge for it – but in the form of a small per ticket tax. No one is going to get worked up about buck or two per ticket fee to cover this. Many airports already pass on terminal expansion costs in in this manor. Airlines would collect the surcharge and administer it’s payment to the individual airports. Modest fee, uniform access – ah, life is good.

Don’t know if my idea has a snowballs chance in hell, but there are several airports already taking the lead in this matter. Here is a list I was able to find with airports around the world offering free WiFi.

So if you are lucky enough to have free WiFi at your airport, I suggest you enjoy Degen.Net from it, and tell a friend about the hotspot. In the meantime the rest of us will continue to suffer and look forward to finding a free access point.

With practically everyone losing their minds these days over feature rich phones boasting everything from Bluetooth to PDA to Music/Video Player functionality, it would seam a foregone conclusion that WiFi will be the next “Must Have” in any new cellular device. And why not – with free and low cost hotspots dotting the landscape around the globe; it’s only logical that consumers should be able to take advantage of this ubiquitous 802.11 goodness?

Sounds cool, right. Now that your even more convinced of your need for a WiFi enabled mobile – prepare for your hopes to be dashed. Here is the dirty little secret that your mobile carrier doesn’t want you know; WiFi is not a welcome addition to their business model. Think about it? If you are able to access your favorite services like web, email and (heaven forbid) VOIP via free WiFi access points, what do you need those expensive voice and data plans for?

Skype on your mobile phone plus WiFi equals no revenue for carriers. Up till now the relatively limited number of higher cost PDA style phones capable of running both WiFi and a VOIP client have posed enough of a bearer to entry so that wireless providers have been low key about the threat. However, as more next generation handsets begin to offer WiFi at lower price points, a whole new front on the consumer rights war is about to open between carriers and customers. Cell providers, who already infuriate consumers with costly contracts and locked phones, are not about to lose out on potential revenue on both voice and data services – not without a fight at least.

In addition to the financial threat that WiFi enabled phones pose to wireless providers, there is the intangible marketing value they place at risk. With WiFi enabled phones, arguments that carries like to squabble over, like Edge vs EVDO, become irrelevant. Since even the slowest 802.11 speeds are multiples faster then any “3G” technologies on the horizon. Why do I care if my network is 1XRTT or GSM-GPRS, I’m not going to use them anyway.

Screwed again! Since WiFi enabled phones pose such a clear and present danger to the established wireless providers, you can be certain that they will oppose them, or if they do provide them the best interoperability functions will be crippled. Since the vast majority of cell phones are purchased from, or in conjunction with wireless carriers these “nerfed” or crippled mobile devices will have limited value to consumers. Which truly does beg the question, “What’s So Great About WiFi?”

So I thought you’d like to read about something other than Halo 3 or yet another Apple iPhone story this week, I for one have pretty much had my fill, and there is no shortage of stories about these out there to titillate your pallet should you need. Instead let’s talk about a really sizzling product: Microsoft Office. /end sarcasm

About a year into the life of Office 2007 and I have to tell ya, I’m still scratching my head and asking, “Why did we need this Office Upgrade?” And from experiences working with many different customers they are asking the same question; opting not to adopt it as well! While some in the industry are arguing that this is due to Microsoft’s downward slide into technological irrelevance, and that is certainly a factor, Office 2007’s lack of penetration has more to do with it’s own failings as a product and other worth competitors stealing market share.

Fear, Uncertainty and Doubt – or the DOCX format

In addition to a total menu redesign, that repeals existing Office users, the new DOCX format by default is causing many companies anxiety as they grapple with significant incompatibility’s between their existing Office versions. This is a major problem. Companies are faced with a tough choice – complete, wholesale upgrade to 2007, mixed 2000/XP/2003/2007 and deal with multiple format types, or just stay back on your tried and true version of Office.

There’s the core rub, Office 2003 and before are pretty dang good. Much like the XP vs. Vista conundrum, Microsoft is again competing against itself, and many users actually prefer the previous generation product.

Think Different – Think Free

Open Office is more then just fine, its a serious challenge. Free, powerful and portable Open Office, is not just a Microsoft disgruntles’ Linux only copy cat of MS Office. Besides the price being right (did I mention its FREE again), OO is winning hearts and minds for more than just fiduciary reasons.

While Office 2007 is running many away, due to it’s new file formats, some are running the the Open Doc (ODF) non-proprietary formats OO supports. In the spirit of full disclosure, this post was edited in Open Office 2.3. Personally I’ve found OO’s interoperability back and forth to DOC format (Office 2003 at least) to be superb.

Another extremely compelling aspect of Open Office is it’s cross platform uniformity and availability. Regardless of your environment, Windows, OSX or Linux, Open Office is basically the same application. This commonality across platforms is something I appreciate more and more move from machine to machine. Compare this to the Office family, and regard less of the price, there is no smooth transition between Windows and Mac, and no option on Linux.

It’s worth pointing out that Open Office is just part of a larger sea change that is rolling ashore on the computing coastline. Wonderful applications like GIMP, VLC and others are not only no cost, there best of bread, and quickly becoming the applications of choice for many.

So Good Luck with that Microsoft

MS Office has long been a cash machine for the company, practically like a mint printing out millions annually for the software giant. In the past companies marched in lock and step to the Microsoft dictated upgrade cycle. Now all that is being questioned.

With Redmond fending off the epic level of user discontentment surrounding Vista, the last thing they want to deal with is stagnant sales of Office, yet that is the situation at hand.

In the meantime I’ll keep using Outlook 2003 and Open Office as my migration path out of the Microsoft controlled upgrade ferris wheel.

How the mighty have fallen! With last week’s announcement that Palm will discontinue production of it’s yet to be birthed “Foleo” product many annalists are forecasting something that Palm loyalist have known for quite sometime – Palm OS is just a “dead man walking”

Palm, the innovator responsible for popularizing the handheld computer, is now teetering on the brink of obscurity, a jagged precipice that drops off into the great chasm full of once great, but now forgotten, technology luminaries that line the footnotes of computing history.

But how did this happen to Palm? It actually has much less to do with features or failings of a single product like the Foleo, and everything to do with a corporate culture lacking the bold leadership that created and defined the handheld market of the late 90s’. Think about it, just a few years ago Palm was in the driver’s seat; both in terms of market share and casting vision for the future of the Personal Data Assistant (PDA) marketplace.

The same cannot be said today. And its not that the iPhone is to blame as some might point out. Apple will play a major role moving forward, but does not account for Palm’s slide from prominence in the PDA/Phone space to date. No, Palm’s own internal lack of focus on innovative, yet easy to use devices and their corporate mis-organization is to blame. (You can read about that confusing history here if you don’t recall all the confusing dance steps of the PalmSource/3com/PalmOne/USRobotics/Handspring shenanigans.)

“Not so fast Eric!”, Say some of you who might not share my dire assessment of Palm’s future; pointing to the recent European product announcement of the Treo 500 as proof to the contrary. Hey, I’m a long time Treo user and fan of the platform, I want to believe in Palm, but a “sold out” Windows Mobile based revamp of an over 5 year old product is not going to be enough. BTW – remember that the Treo was never really Palm’s idea in the first place, rather a product that Handspring developed and was then absorbed back into Palm in the acquisition.

It’s that decision, to “sell out” to Microsoft Widows Mobile OS, that has doomed the Palm OS and they don’t even realize it. These new 500s are not even going to come with a Palm OS option.

I recall seeing the first Palm Windows Mobile phone, the 700w, at CES 2006. At that time I commented to the Palm rep that this pretty much spelled the end of the Palm OS – and by extension the end of software innovation at Palm – the truly great part of the picture Palm brought to the handheld party. The company spokeswoman was polite and assured me that Palm had no plans to cease offering the Palm OS, I smiled, but knew she was deluding herself.

I understand the Treo 755 comes in both “P” and “W”, flavors and technically the Palm OS is not dead yet, but the demise of Palm OS is getting closer every day. Announcements like we have seen in the past few weeks, to kill the Foleo and launch a new line of Windows Mobile only Treos, only serve to reemphasize Palm’s systematic and intentional abdication of its once mighty handheld hardware/software empire.

While this might sound like Palm OS fanboys rant against Windows Mobile its not. Ironically the future might prove that it is not Microsoft whom Palm has to fear, as Palm would make a wonderful handset hardware manufacturing division for Microsoft. Think about it. By 2008 Palm discontinues Palm OS and exclusively embraces Windows Mobile, shortly thereafter Microsoft acquires Palm and releases the Microsoft Treo 9000 (Zune edition) with wide-screen, WiFi and perhaps an exclusive deal on a CDMA network to counter a certain Apple product. Stranger things have happened?

Regardless how cozy MS and Palm get, I’m quite certain the future is not bright for the once dominant Palm OS, and for that I shed a tear.

Farewell Palm OS – So Long and thanks for all the fish!

So on the off chance you are one of Apple’s blindly devoted fanboys (or fangirls) who already bought a $600 iPhone over the last couple of months all I can say is; here let me get you a little salt to pour in that open wound. This week, after just two months of being on the market, Steve Job’s gleefully slashed the 8GB iPhone price by a third to $399, and discontinued the 4 Gig model all together. At this point rumors are swirling and there are reports of people having mixed success getting refunds and credits, but this much is for sure; Apple has yet again managed to steal the media spotlight and create product buzz for the iPhone unlike any other cell phone manufacture before.

What’s most surprising is the outrage people are expressing over the sudden price reduction, not the price drop itself. But this is nothing new from Apple. Let’s face it, Apple has built the iPod economy around planned obsolescence and the disposability of their consumer electronics from the beginning. No removable/replaceable batteries in any iPods or the iPhone. No external expansion options for memory in any model. No credit is given towards a new model purchase nor is there any upgrade program. Apple has always been about pumping out units, not customer “satisfaction.” In fact, the more dissatisfied you are with a previous generation iPod (or Mac for this matter) the more likely you are to just chuck it and pony up for the latest flavor?

Take a cue from the photo I took at the airport last week. People now purchase $300 iPods as you would a bag of chips or a coke. And its not just the airport, these are popping up at malls, school campuses, heck I saw one at the Hilton in Vegas next to the elevator going to my room! Good Lord, have we gotten so trivial with our dollars and reduced our expectations of how long a piece of consumer electronics should last that it’s now normal to buy and dispose of them while walking down a hallway to a hotel room?

So why are the early adopters of the iPhone shocked over this sudden price drop? This is nothing new from their precious Apple. Besides, the same individuals that are so bent over this travesty are going to be the first ones in line around the Apple store next year to by the iPhone 1.5?

In fact that’s what they should be demanding, not a $200 credit for the price drop, but a refund on their time spent in line, we’ll call it “iLine.” It’s a fantastic new offering from Apple where you pay $599 for the privilege of camping out in front of an Apple store for a “limited” new product that will actually be readily available to anyone one week after launch, in fact they will have so many of them in stock two months after launch that there’ll be a price drop to entice sales in order to hit the 1 million unit projections for the end of September! Silly isn’t it, surely Mr. Job’s would never try such a thing.

So all you crazed iPhone users, while you are crying to get your technology tax of $200 refunded, why not ask Apple for a voucher to reserve your place in iLine 2008. Then you can again pay too much for an over-hyped, over-priced product that will again be discounted soon after you purchase it, and you can again swear how this is the last time you will fall under the sway of Apple’s marketing machine.