SMS: Technology

Microsoft benefits on PS3 launch day

Sun, 26 Nov 2006 18:59:26 GMT

I am not a hardcore gamer by any means but I was intrigued by all the hype around the release of the PS3 by Sony. I have been following the much hyped launch of the PS3 and have also been reading the reviews that its getting. The much hyped launch of the PS3 was exactly that, way too much hype. There was no product for consumers to buy or for the retailers to sell. Most retailers received very few quantities of the PS3 and clearly had signs on their doors, indicating that it was Sony's fault that they didn't have enough quantities. Retailers loath disappointing customers in their store and not being able to monetize the traffic that is being driven into the stores. It also paints them in a bad light as consumers might think that the retail store did not plan well and therefore are out of stock. None of the stores had any demo models on display where consumers could try out the PS3 and experience first hand the gaming experience on the Sony platform. The Sony store out of all places didn't have a demo model either. Not to worry though, the large retailers did monetize the traffic that was driven into their stores by all the hype that Sony had created by selling them Xbox 360 consoles. I personally got two emails from Future Shop advertising a special Xbox bundle with an aggressive price point on it. Consumers who were resourceful enough to get their hands on a PS3 were probably selling it on eBay for approx $1,200-$2,000. Good for them, you have to love the free market, everyone can make a buck or two! I am surprised that being in the business so long Sony does not realize that your manufacturing team has to be in sync with your marketing team and you have to pay close attention to supply chain management, especially during new product launches.

Shortage of gaming consoles during major launches should not be a surprise to Canadian consumers. This year was a repeat of what happened in 2005 with the Xbox 360. Microsoft received a lot of heat from the press and consumers as there were shortages of Xbox 360 consoles during the launch. The press was all over the Xbox 360 launch, there were images of people lining up to buy a Xbox 360 on the tele and stories about people profiting by selling their Xbox consoles on eBay for 5-10 times what they had paid for it. That's lot of free publicity that adds to the hype of a gaming console launch. Was this done intentionally, I don't think so. I am sure any company would like to cash in on the hype by actually selling consoles by ensuring its major retail partners have enough quantities to sell. In the end, companies are rewarded on total revenues and profits, not hype or pent up demand for their products. I think Sony had to make a tough call, further delay the launch of the PS3 and miss out on the 2006 Holiday season or launch with very limited quantities. Sony made the same call that Microsoft had made in 2005, however the difference this time around was that there was a strong competitive product to the PS3 already in market. This resulted in Microsoft gaining as a result of Sony's loss on the PS3 launch day.

Cell Phone Etiquette

Fri, 17 Nov 2006 20:33:32 GMT

I came across these really funny commercials that have been developed by Kyocera to reinforce the need for cell phone etiquette. I am surprised people still need to be reminded about proper cell phone etiquette. I think we need to move on from cell phone etiquette to PDA etiquette. I am so tired of people typing away on their CrackBerries or Windows Mobile devices while I am talking to them or while someone is giving a presentation. People don't realize how rude it is when they are typing away on their PDA while someone is talking to them or presenting something to them.

Coming back to the commercials, there are two of them that were really funny. The first one is about a person at a vet's office. The second one is about a person at a funeral.

After watching these commercials, I hope these folks believe in "PDA Karma" :) Check out these commercials and enjoy.

The gloves will come off in the VoIP arena

Thu, 16 Nov 2006 05:40:23 GMT

Industry Minister, Maxime Bernier has over turned the previous decision of the CRTC to regulate the VoIP marketplace in Canada. I am glad someone has finally taken a stand and is allowing market forces to prevail in the telecommunications industry. At times, I feel the CRTC over regulates the industry and stifles innovation and competition.

This decision will definitely allow incumbents such as Bell and TELUS to charge lower prices for VoIP services. Previously, they had to gain approval from the CRTC on pricing for VoIP services. CLECs such as Vonage, Primus, Rogers will now face much stiffer competition. I am still waiting for TELUS to launch a VoIP offering to the consumer/household segment in western Canada and also provide some competition to Bell in eastern Canada. I really hope that this decision will make the CRTC re-examine the role it should play in the telecommunications industry and how much regulation is required in Canada. I would like to see how involved the CRTC gets with local number portability around the corner. What's next, should we expect the rules around foreign ownership to change soon?

iPhones...boom or bust?

Thu, 16 Nov 2006 03:57:37 GMT

I came across an article on Apple's rumoured entry into the wireless phone market. The convergence of PDAs, MP3 players and traditional mobile phones has given rise to a significant market opportunity, one that Apple cannot afford to miss out on. Imagine a Windows Mobile smartphone, with 4GB of storage and a Windows Media Player, all of a sudden carrying your iPod becomes redundant. It is rumoured that Apple has placed an order for 12 million iPhones with Foxconn Electronics, the registered trade name of Hon Hai Precision Industry Co Ltd in Taiwan. There will be two models available, a PDA model with video, email, music functionality along with a keyboard and a traditional phone with music capability.

I am sure the iPhone will be released for the GSM networks before it is available for CDMA networks. The OEMs always manufacture devices for the GSM networks before the CDMA ones. I can't wait to see the UI on the iPhone, will be based on the infamous iPod? I am not sure if Apple will be able to successfully enter the mobile phone market, it will face stiff competition from the giants such as Nokia, Motorola and Samsung. Apple had partnered with Motorola last year to release the Motorola ROKR, a phone with the iPod software on it. The phone did not realize much success, will this change with the iPhone?

I know Apple will benefit from the halo effect of the iPod brand. People will be very keen to see and try out the iPhone based on their affinity to the iPod brand. However, Apple has its work cut out for them, people will expect the same high quality in the iPhone that they are used to in their iPods. The heavy hitters like Motorola have failed when it came to combining the iPod and mobile phones, I am not sure if Apple will be able to get it right. Manufacturing a phone is quite different than manufacturing MP3 players. In addition, I am not sure that the model being used by Apple will allow it to scale and produce enough handsets to satisfy demand. Will it be able to spit out multiple different models a year to compete the with Nokia's of the world?

The analysts at Bear Stearn are a lot more optimistic than I am:) In a note sent out to their clients, they are forecasting the iPhone to add an incremental $6 billion to Apple's revenues and 22% to earnings in CY07 resulting from the shipment of 12 million phones in the 1st half of CY07. They have forecasted a 30% cannibalization of iPods resulting from the launch of the iPhone.

I would love to check out the iPhone, I wonder when Rogers (the only GSM carrier in Canada) will start carrying the phone in CA.

VoIP quality in steady decline over the last 18 months

Thu, 27 Jul 2006 17:51:49 GMT

Brix Networks recently released results of a study which indicates that the quality of VoIP phone service has been dropping steadily over the last 18 months. The study claims that nearly 20% of the calls placed in the last 18 months were of “unacceptable call quality”. This is data collected from testyourvoip.com, a free voice quality testing portal that enables people to measure the quality of their broadband Internet phone connections. Although this study was probably conducted in the US (I am not sure of this), I am positive the experience in Canada will not be any different.

Based on the experience I have had with using a VoIP based phone service and the experiences of my friends, VoIP service providers have a long way to go. These quality issues are one of the biggest hurdles to adoption of this technology. Although the global market for VoIP based consumer solutions is estimated to be 20 million, I am sure the growth rates have been below estimates. When exposed to ads for VoIP home phone service, everyone pushes the cost savings when compared to traditional phone service. However, this is not enough to make people switch. If the QoS (Quality of Service) does not live up to people’s expectations, and the bar has been set quite high by the telcos that provide the traditional phone service, this technology will not be adopted by the masses. Reliability, excellent customer service, accuracy in billing and a competitive feature set are key helping VoIP “cross the chasm”. I think we are atleast 12-18 months away from these issues being resolved to the satisfaction of consumers. Don’t get me wrong, VoIP is a reality and is eating away at the telco’s revenues; however it is currently being used by the early adopters and extremely price sensitive consumers. I think the people that will switch to these lower price “unlimited calling” plans from VoIP service providers are the heavy users, this will result in increased load on the network and can contribute to the degradation in service quality and uptime.

Regardless, I am excited to see how this technology and the market for it in Canada develops. The introduction of this disruptive technology represents a unique challenge for the telcos and lets see if they can rise to the occasion.