The Dodge Retort

PC Connection  and Motorola released quarterly earnings today both reflect troublesome trends within  PC and handset markets as well as hope for the future.

Indeed, netbooks are not saviors for giant direct sales companies like PC Connections. Its notebook and PDA sales were off by 26% in the first quarter with average selling price taking a hit from “competitive pricing pressure” and “netbooks.”  I have a call into CFO Steve Bainbridge to get some details on just how steep the decline in ASP which is good news for buyers.

Interestingly, I searched PC Connections’ netbook page by most popular models. Number one was Lenovo’s Ideapad S10e model  41872NU with three stars from two user reviews. Second was the Acer Aspire One 150-1447 with 48 reviews and five stars. How does the number one most popular model only get two mediocre user reviews and number two model get 48 glowing assessments? It makes  you wonder about user reviews and whose writing them.

I recall that at one magazine where I worked that invited reader feedback in annual product excellence contests, it was assumed that at some companies, droves of employees would vote glowingly early and often for their own products. That’s why I am a big fan of reviews by indepedent journalists. PC Connection reported that sales in the first quarter dropped 23% over the same quarter in 2008 to $326.2, but the company managed to weather the downturn with a relatively small net loss of $1.6 million.

Meanwhile, Motorola reported a steep drop in handset sales with dollar volume off 45 per cent from the year ago quarter, but the interesting news is that it plans to introduce several new Android-based handsets  for the Christmas selling season which begins early in the fourth quarter. “We plan to have differentiated Android-based devices in stores in time for the fourth-quarter holiday season,” said Sanjay Jha, co-CEO of Motorola and CEO of Mobile Devices.

Android is a highly customizable operating system based on Linux that promises to break down boundaries between applications so they appear more integrated and cohesive.  Stay tuned for some reviews.

You know those “live chat” support and sales folks at humongous companies like Comcast and Verizon? Ever wonder how informed they are? My one live chat support experience with Comcast I would rate as excellent. I’ll let my Verizon experience tonight speak for itself.

I asked Verizon if it had notebook discounts if I signed up for wireless broadband for the typical two year contract. Indeed, Verizon has promotions through June 30 on Dell, Sony, HP, Lenovo, OQO and the Panasonic Toughbook notebooks. I wrote about these notebook promotions and similar ones from AT&T in an April 17 post.

He got the answer half right — nothing public on netbooks yet. I substituted Verizon for the person’s name as given (you never know if it’s their real name). Here’s how it went.

You: do you have deals on netbooks or mini-notebooks if I sign up for wireless broadband?
Verizon: I’d be happy to help you with that.
Verizon: Unfortuantely, we do not.
You: how about deals on notebooks?
Verizon: We do not sale Notebooks.
You: but don’t you have discount coupons on notebooks if i sign up for wireless broadband?
Verizon: Unfortunately, we do not.

IDC's O'Donnell: Mini-notebooks, not netbooks

I just got off the horn (real reporters never call it the phone) Bob O’Donnell who tracks netbooks, er, ahem, “mini-notebooks” for IDC, one the two pre-eminent research firms that track personal computer sales and trends (Gartner is the other). Bob likes the term mini-notebook because he see them as companions to other larger and more powerful PC notebooks and desktops.

“People view them as notebooks instead of its being a web only device. We see it as a companion device,” says O’Donnell, vice president of clients and displays. “They originally had tiny screens, tiny keyboards and ran Linux and quite honestly did not do that well. Now almost 100% Windows.”

IDC conducted a spot check of users in January andy found consumers use mini-notebook the same way they use notebooks – email, browsing and word-processing.A larger study is underway to confirm the earlier finding, O’Donnell says. The idea with netbooks is that all a user needs is access to web to get and his or her data and applications. The term “netbook,” says O’Donnell. was coined by Intel to signify that they were different from notebooks, but anyone using now clearly knows that are simply the smaller sibling to Windows-based notebooks.

“We actually call mini-notebooks/netbooks because you can’t ignore the term everyone uses,” he says. Actually, the term netbook is at the center of a lawsuit where Psion is suing Intel for infringing on its trademarks so you can see why everyone may be calling them mini-notebooks, now.

And speaking of Windows, O’Donnell thinks Android-based netbooks that have grabbed the spotlight for the past couple of weeks “don’t stand a chance” competing against mini-notebooks. Android is a Linux-based operating system originally developed by Google and since taken over by the Open Handset Alliance.

“The fact is people did not want Linux or just a web-only device. Didn’t they learn the first time? Android doesn’t have device drivers and is for smart phones. Sure, everyone wants an alternative, but those are the folks who want anything but Windows or  people in Silicon Valley who want to say they have an Android netbook.”

O’Donnell isn’t buying that ARM-based netbooks will be that much cheaper than Wintel mini-notebooks, either.

“They’re not going to sell for $50. The bill of materials for an ARM-based device and Atom-based is not that different. It’s maybe $20 and all the other stuff such as memory, the display and keyboard are not going away. There’s no secret sauce here. To me, this smacks of people who want to say there’s an alternative and who hate Microsoft.”

Yours truly takes a break for the roving photographer.

As you’ve undoubtedly noticed, The Dodge Retort has taken on a new look and has become focused exclusively on mobile computing with netbooks as a core topic. In short, TDR has transitioned from a personal blog covering a range of subjects to covering netbooks, handsets and wireless. As the saying goes, focus builds a marketable audience.

What can I uniquely deliver that myriad other sites covering mobile  computing don’t already blast out through a firehose? To begin with, I have three decades of not only covering technology, but offering perspective that comes with experience. You will see that here as well as news reporting which is my specialty. Check me out on the about page.

I invite you send me tips, rumors, netbook applications, case studies and if you’re interested in blogging on TDR, please let me know at jdodge349@gmail.com.

The other thing I want to point is the web site of which I am proud. Any web site is a work in progress, but I am have reached some milestones with TDR after three months. First, The Dodge Retort is a real self-hosted WordPress 2.7.1 blog now. This WordPress version is a more robust content management system than auto-hosted WordPress.com which got me started. The chief advantage of 2.7.1 is that TDR can deploy any of the 4,500 free plugins. For example, I can now use Google Feedburner to send out email newsletters (please sign up) and have a range of social media elements that I could not dep0loy with WordPress.com. And I will selectively experiment with more plugins. It will also be easier to optimize the site for building traffic.

I’d also like to thank Dan Englander at High Rock Media for his help with the transition. As a web developer,  Dan knows his stuff and is wonderful problem solver. My plan isn’t to deploy every feature under the sun. The site will continue to be simple and uncluttered with my thinking and writing as its main asset. I hope you like it and welcome all views, opinions and comments.

It's all the Palm Pre's fault.

The plot thickens with Verizon’s next move in touch screen iPhone sweepstakes and the latest story says it doesn’t even involve the iPhone as we know it. After the WSJ reported earlier today that Verizon and Microsoft are working together on an iPhone knock-off of sorts, BusinessWeek fires back that Verizon and Apple are working together on an “iPhone lite” and a “media pad that would let users listen to music, view photos, and watch high-definition videos.”

One analyst quoted in the story threw cold water on the idea because Verizon’s network is CDMA-based which is different than AT&T’s GSM technology supported on today’s iPhone. Building two different types of iPhone-alikes would increase Apple’s costs. The story also posits that Apple is trying to get Verizon with its whopping 86.6 million subscribers to steer away of Palm’s much-hyped Pre due in June.

In any event, the cell phone market by the end of the year should be chock full of slick new models, helping to rouse the Sleepy economy out from its slumber.

Pardon me if I don’t get excited about a rumored Verizon-Microsoft partnership to develop a touch screen cell phone that challenges the  iPhone-AT&T partnership. Microsoft doesn’t have much of a track record here in considering what the Zune has done to the popularity of the iPod. That’s nothing except reinforce Apple’s reputation for superior engineering, design, marketing, sales and performance.

Verizon is crazy to bet on Microsoft’s consumer device prowess  even though it’s frustrated with archrival AT&T’s lock on the iPhone. The Wall Street Journal reported this morning that Verizon and Microsoft are in talks to develop an answer to the wildly popular iPhone (I have an iPod touch and love it. As for a phone, I prefer Verizon service to AT&T and getting an iPhone is not enough to lure me away. That said, I sure would like to see Verizon carry the iPhone.).

The WSJ says work on the device and software that goes with it is being designed by staffers from Danger, Inc., which developed software for the popular Tmobile Sidekick which always felt a bit cheap to me. Danger was bought my Microsoft last year. I never used a Sidekick and talked my forever-texting daughter out of getting one. No way was I going to convert to Tmobile.

Verizon, says the WSJ, was in talks with Apple about getting the iPhone given that AT&T’s exclusive on it ends next year after an initial extension went into force last year. And AT&T is seeking another year-long extension after selling more than 17 million iPhones  during the past two years.

Certainly, the exclusive makes life very predictable for Apple and lucrative for AT&T. The bobbing and weaving in this negotiation is far from over. Apple has to be behaving like Scott Boras negotiating baseball phenom Mark Teixeira’s free agency, but Verizon could still end up with the iPhone.

Really folks, the AT&T exclusive  amounts to a restraint of trade and I blame Apple for that. If it’s developing insanely great technology, why wouldn’t it want it in as many hands as possible? Ahhh, the lowly consumer and business user lose again.

As for any forthcoming phone and software platform from Microsoft, I welcome the competition and let’s hope it’s a smash hit so AT&T ends up eating its exclusive that has denied the iPhone to millions. Maybe, just maybe Microsoft will come up with that perfect broadband fueled netbook-handset hybrid I’ve been writing about and praying for.

Files sit locked away in Sony file format jail.

Damn Sony and its proprietary file formats. I have a Sony ICD SX46 audio recorder and have used it for podcast forever. Lately, though, it’s got completely flaky with transferring its proprietary audio files and turning them into something sensible like an MP3.

Using the ICD-SX46, I recently did two 20 minute audio interviews with Bill Pulleyblank, a VP with IBM Global Services. I did not want to know about IBM Global Services as much as his intimate involvement with the Blue Gene and Deep Blue projects, the latter of  which gripped the public when a supercomputer squared off in two epic chess matches with grand master Garry Kasperov. The result was a split between man and machine.

But my recordings sit stuck on the recorder because Sony operates with proprietary files. Ever heard of a DVF or MSV file? No, I didn’t think so.

MSV stands for Memory Stick Voice, Sony’s own memory file format. It drives me nuts because it doesn’t work with anything I have, including Son’y own voice editing software. Shouldn’t I be able to right click on start, then explore and find the files on the device to download? Not with Sony which has overcomplicated this to an extreme.  I am even using the Sony proprietary ow Digital Voice Editor 2.31 and have explored every corner of it to understand why it keeps telling me the Sony’s recorder’s files are incompatible. With what!? How!? Why? This is sooo dumb. I’ve changed every setting and this recorder/editor combo was working fine until a year ago. All I want is a .wav or MP3  file to I can edit it in Audacity.

I guess Sony never got over the betamax mentality trying for force its own formats an unsuspecting consumers. By the way, Sony discontinued this line of handy recorders years ago and replaced with models that natively record in MP3.

One of the first Android netbooks is being billed as an “easy to use full functioning PC” and presents tangible evidence  of a  shift away from the Wintel architecture that has dominated PC computing for decades. It certainly looks like a netbook and boasts standard apps such as email, word processor and others which can be found on the Internet.

The Alpha 680 appeared on Guangzhou Skytone Transmission Technologies Co. Ltd’s web site last week with full laundry list of specs. At the heart of the Alpha 680 is the ARM11 CPU used in a wide variety of applications ranging from automotive to PDAs. Android, the open source OS backed by Google, has generated considerable excitement in the netbook community as a serious threat to Windows in the netbook arena initially.

Last week, Computerworld blogger Seth Weintraub spotted the Alpha 680 on Ghanzhou’s web site and labeled it “a glorifed cell phone without the glory.” By that, he meant its weak specifications – a 7-inch display while most netbooks now have 10 inch or better, 128 MB of memory while most now have 1 GB, and only 1 GB of storage upgradable to 4 GB when most netbooks now have hard disk up to 250 GB.

Guangzhou Skytone has six other netbooks in the Alpha product line, several of which run Linux. The company’s  mission, according to its about page is “to provide a series of more affordable Internet access terminals…” And indeed that may be all the Alpha 680 or a netbook needs to be given standard apps such as full email, social networking and word processing apps can be used free in the Internet cloud.

Microsoft Windows relies on apps that based on each computer. What’s more, Android is free to hardware makers, giving them an immediate cost advantage. Windows XP Home Edition typically adds $15 to the cost of netbooks.

A long follow-up story in Computerworld this morning included an interview with Gangzhou co-founder Nixon Wu who said the Alpha 680 will cost about $250 which may not be enough of price differential to lure buyers away from traditional Windows-based netbooks, but it is clearly a sign of things to come. Indeed, ARM told Computerworld that as many as ten ARM-based netbooks could be on the market by the third quarter.

Prototypes of the Alpha 680 will be out in June with market ready units to follow a month or two later units , according to the Computerworld story.

Photos source: Gangzhou Skytone

Computerworld blogger Cyber Cynic Steven J. Vaughn-Nichols wrote an interesting post this morning about Microsoft’s ploy to suck in netbook users with Windows 7 Starter edition, have them get “disgusted” with it and then pay to upgrade to full Windows 7.

The ploy put forward by Vaughn Nichols makes me feel almost lucky that I have netbooks with full version of the aging Windows XP Home Edition, which is not limited to running only up to three applications simultaneously which is the alleged to be the case with Windows 7 Starter.

But the conspiracy theory here is beyond the pale. If netbooks continue to be the only sweet spot in the PC market, a bad user experience with Windows 7 would give the entire family a bad name. Cyber-Cynic Vaughn-Nichols suggests that Microsoft has deliberately hamstrung Windows 7 Starter to get folks to eventually pay to upgrade to full Windows 7 which the more netbooks in the pipeline will run just fine.

The upgrade is Microsoft’s way of solving the netbook conundrum which is reaping far fewer dollars on pre-loaded XP than Windows on full notebooks and desktop PCs. Such a ploy seems so utterly transparent, but I can’t deny the Windows Starter scenario is plausible.

The Windows 7 version strategy is explained in a Feb. 3 Q&A with Windows general manager Mike Ybarra (also referenced in Vaughn-Nichols post).

“With Windows 7 there will be two primary editions: Windows 7 Home Premium, and Windows 7 Professional. For a majority of our customers the choice is really simple: Windows 7 Home Premium or Windows 7 Professional” Ybarra says. But that’s not really the case because in the next breath, he talks about an Enterprise version, Starter, Windows 7 Home Basic and Windows 7 Ultimate. I add that up to be six versions.  Windows has more than a billion users so obviously there’s many, many  niches the ubiquitous operating system.

So I will go out on limb (I have not run Windows 7 beta) and say for many millions of netbook users, Windows 7 Starter probably be perfectly fine especially if it solves the performance problems netbook users  currently experience. Stay tuned.

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The Universal Charging Solution (UCS) that will allow all mobile phones to be charged with the same charging unit also promises to standardize the data connection between such things as headsets and connection in cars. The plan is to implement such devices on a wide scale by Jan. 1, 2012. Seventeen 17 major makers of mobile phones are backing and  it appears some will beat that deadline (much of the same functionality and connectors can be found in a Blackberry today).

The standard charger will untether users from proprietary chargers for each model of phone. If you went on a business trip and forgot your charger, you could use anyone else’s under UCS.

I wondered why it will take so long and got the following response from the CTIA- The Wireless Association which on April 1 agreed to back the UCS. Here’s the explanation sent to me by a CTIA spokeswoman:

The 2012 date reflects the time it takes to design a wireless device, source new battery packs, obtain regulatory approval from the FCC, manufacture and ship new phones. Between now and them, consumers will see more and more devices with USB chargers (like the Blackberry). The chargers will be manufactured by the same companies which make them today and whether or not chargers will be included in the box with the phone will depend on consumer preferences.”

The work is being overseen by the five-year-old Open Mobile Terminal Platform consortium comprised of eight mobile phone makers. Below are all the conveniences and functionality that will be afforded to mobile phone users under UCS, according to an OMTP white paper.

Charging

-Phone can charge on any UCS charger

- User can keep old charger when buying a new phone

-User can charge phone through laptop or any device with USB Standard A port

-Chargers are brand independent. For instance, a Nokia phone could use a Motorola charger

- Connector can be used for data while phone is charging

Data

-User can connect to any PC or entertainment system supporting USB

- Use port with a headset

- Phone charges while data cable is in use

- Allows phone to be used as a data modem

- Can stream Standard Definition video, High Definition video, digital audio and digital still pictures

- Phone can connect to a car-kit