FOSS-tablet Business Report: "Tear down this stair!"

Posted by hkwint on Jun 8, 2010 3:54 PM
LXer Linux News; By H.Kwint - The Netherlands


LXer Feature: 08-Jun-2010

Even though all ingredients for a successful Linux tablet were ready, and the distributed software development used by FOSS is normally much quicker in replying to demands than a closed environment, Apple is already satisfying the tablet-PC market with their iPad. A viable FOSS-solution is not yet available, though Computex will ameliorate the situation.

This 'report' - provided for free to you by LXer Linux News - will show how Apple became the leader and what the competition needs to do to have a shot at all consumers who didn't buy a tablet yet. As an extra, at the end of the article, there's an explanation of why 'competition of standards' fails, harms society and screws customers.

Here's some free tech analysis / trend watching from the "hkwint" group, basically consisting of, umm, just hkwint. If it is too much slang for you, skip to "How will the consumer notice?". What we have noticed is, to be successful in IT, the last decade shows a trend towards consolidation of the whole value chain inside one company. Not selling software as a product in the way popular shrink-wrap software companies such as Microsoft, AutoDesk and Adobe do and IBM once did. But selling solutions, the latter which is also the adagio of Fortune 500 companies like HP.

Apple has been successful largely because they control the whole value chain of their products. They in-sourced all process steps involving 'decision making / design': Chip design, hardware design, software design, application store design, graphics design, add design for their marketing. Processes which do not involve design but consist only of 'producing according to Apple's specs' are outsourced, such as plastic molding, lithography of the SoC's and such. The exception is the design of the CPU-core, for which they just licensed the existing ARM Cortex-solution.

Consolidation of the whole value chain inside one company has proven to accelerate time to market. That is why Apple's Ipad was the first 10" Tablet with a Cortex-A8 CPU and capacitive screen to enter the market in March '10: The whole value network of the product mainly spans one company, and there's a severe advantage of the synergy created by this united environment.

Linux devices however suffer from a fragmentation of the steps needed to introduce the product to the market: The process is fragmented both between different companies, but therefore also fragmented in time. The value network even spans multiple continents. While this enables mutual competition to deliver better products on the long run, it is a severe slowdown when it comes to 'time to market'. In the quickly developing electronics branch, time to market is probably the most crucial aspect of selling to customers, considerably proven even more important than technical excellency. Consider this: Several business units of Apple have been working in parallel on the iPad for multiple years now. Those units include software, hardware, application store design, market research and advertising.

However, when it comes to the Linux-alternatives, there's a cascade / pipeline model, where one company has to wait before the company working on the previous step is done. The System on Chip (SoC) manufacturers wait for the Resistor Transistor Logic (RTL) design companies to finish the design of the cores. The Original Design Manufacturer (ODM) / Original Equipment Manufacturer (OEM) has to wait both for display manufacturers to provide the newest displays, and for the SoC manufacturers to deliver their solutions. The retail companies have to wait for the ODM / OEM to ready their solutions before they can finally sample their products. Software designers on their turn have to wait for the products to become available before they can optimize. This means, there's a huge gap between the highest and lowest step of the stair. Efforts are done to improve the situation by means of providing 'hardware evaluation kits' (hdk's) and 'software development kits' (sdk's), but the current situation has proven that's just not enough for todays markets and demands.

In a demand-driven environment, this cascade / pipeline can even be considered to be bi-directional: After the programmers release their products, sometimes market research shows the result is not what consumers wanted or another company is already offering better solutions. So software providers have to direct their comments upstream and wait for the downstream result. This process, considering these companies are global and language barriers are common, goes along with a lot of overhead, both in money and time: Up and down the long stairs. Consolidating the value chain in one company considerably lowers the language barrier and ensures quicker time to market, one of the leading success indicators in todays volatile markets. It's not without reason slow time to market is known by consumers as 'vaporware': A company has to deliver real products before the attention span of the consumers which goes along with the usual press hype has peaked and fades.

Given the open competing nature of the companies and communities involved in developing solutions which use free software however, consolidation inside one company is not an option at all. Apart from not being an option, in the long run the competitive environments that goes along with the 'free' culture also leads to better products, eventually leading to higher value for society at large.

Apart from that, owning a small market share in a multi-billion dollar business is still more profitable than having a monopoly in a million dollar business. Electronic branches offering new products often suffer from a syndrome known as 'consumer confusion', especially when multiple platforms compete. The result is, consumers often wait for the winner and postpone expenses on new hardware. Cooperation on united platforms decreases consumer confusion and therefore is the best incentive for market growth imaginable. However, optimizing profit by means of cooperation and total market growth instead of aiming for a de-facto monopoly requires a paradigm-shift at these companies of an order which might be considered unimaginable in the short past.

What's needed for products which feature free software to thrive in today's markets is more collaboration, earlier and more often release of the hardware, and more focus on united initiatives. An environment in which more tasks can be done in parallel, and in which new improvements don't have to travel up and down the mentioned stairs. What's needed, is somebody or some organization who says: "Tear down this stair!"

The Linaro group seems to be answering this demands. IBM, Samsung, TI and Freescale can be considered the 'hardware roots', while Ubuntu, MeeGo and Android communities can be considered leaves, but what this tree lacked is a trunk. Linago might be that trunk that will enable quicker time to market. It is the node at the cross that was missing. The other two notable hardware makers working together with the software community in the MeeGo environment also got the message. What we're basically seeing is a trend towards consolidation in 'foundations' in which competitors cooperate instead of consolidation in one company. This marks an important step in a quicker time to market, the much needed step to advance in the direction of the ultimate goal: Linux world domination.

How will the consumer notice?

Now let's cut the gibberish and ask ourselves: How will the consumer notice the change? I envision a modular world in which an app or peripherals made for one device works also for other portable mobile devices. Where one who is able to work with one platform, is also able to quickly adapt to another platform without being 'educationally' locked in.

Consider Philips and Sony. First they competed. Phillips had Digital Compact Cassette, imagine a CD on a tape, and CDi, a competitor to CDROM. Sony had MiniDisc. What's the link between these products? They all flopped. Even though Philips almost had a monopoly on the DCC's and CDi's, and Sony on the MiniDiscs. All those MD, CDi and DCC devices can be considered 'bricks' today, or nice paperweights.

Both however also cooperated on what can be considered one of todays most famous success stories: The CD and CDROM. They created a market which is much bigger than the platforms they fully owned. And maybe more important: Three decades later, the standard still survived and still generates income by means of royalties to both companies. The simple CD player I bought in 1999 is still usable to play music I can buy in the store today.

The software industry however still hasn't learned a dime. They still think competing standards as a means to reach a monopoly is a good thing. Even if it screws their customers. Look at Blu Ray versus HD-DVD: All people who bought a HD-DVD player for several hundred Euro's can drain it down the toilet as the platform lost. Look at h.264 vs. Microsoft's VC1 and recently WebM: Another failure of the industry as they failed to cooperate on one platform and bring more benefit to the society as a whole. After all, 'consumers' (which can be the ones building web pages, the ones building devices or the ones desperately trying to "just make the freakin' streaming media work in Firefox!") can be left hesitant what to choose, and normally if they're smart, they don't decide at all and pick the winner after the fight is over.

Even worse, they confuse their customers by selling them their adago of 'competition is good for customers'. Though that's true, it mainly goes for implementations. Multiple MP3 encoders competing will lead to a better MP3 encoder. However, in the forest of digital media formats, attention is fragmented, and even if competition is possible and products compete, it's almost not possible to take a winner as some product might be better on standard A and B, but another on standard C and D. When 100 streaming video formats exist, all working on a different subset of operating systems and a different subset of CPU-architectures, those hundred different possible combinations leads to a landscape which is so complex that it becomes almost impossible to pick a winner, measure results, let alone foster competition.

So basically this leads to a 'natural boycott' of allcompeting standards: Consumers don't buy standards which are "not winners yet". However because of the nature I just tried to explain it's impossible for 'competing standards' to compete against 'united standards' in which companies cooperate. It's usually one or the other, not both. In branches where only competing standards are available the consumer doesn't have the choice to pick the standard supported by the whole industry, and is left confused and trying to pick a winner or waiting till the storm has settled.

However, what's truly unique to the iPeds vs. the Androids today is the thing I declared impossible is happening right in front of us. Apple - with their closed standards and aiming at a monopoly for their platforms - is competing against united organizations such as Khronos, Linora, LiMo, Open Handset Alliance and to a lesser degree Global Foundries. The situation is even more complex when better examined: Android is a bit open but also closed and controlled by one company, both the advocates of 'competing standards' and the ones advocating 'united standards' use ARM, almost all of them support h.264 - an open standard which is not royalty free but more open than WebM, and I could go on.

My prediction is that in a free market with limited patentability eventually the 'united standards' will provide for better cheaper products which provide an even better user experience than the closed successful products of today. Vested interest companies however will use all defensive measures at their expense to fight this innovation. Given the patent-wall has not yet been teared down, the fight is undecided. So, let's continue to watch round 2!

In the ring in the left corner: Apple. In the ring in the right corner: Microsoft and Intel.

Unchained by rings in the equal playing field: Most of the rest, lots of them gathered under the Khronos, W3C and Linaro flags.
Undecided, in the doorway between the boxing hall and the soccer field, taking advantage of the Mode du Jour: Google, HP, Samsung and some others.

Let's rumble!

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H.264 more open than WebM? Sander_Marechal 2 923 Jun 10, 2010 2:56 AM

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