Walter Mossberg, who has been reviewing technology since 1991 for the Wall Street Journal in his weekly "Personal Technology" column, is convinced the companies that succeed in this type of econaclypse, as AllThingsD has dubbed the economy, will be those that focus on innovation. "It has been my observation that while things do slow down in bad times, they don't stop," Mossberg said.
Speaking to a packed room this week at the Dow Jones VentureWire Technology Showcase in Redwood City CA, Mossberg, the "Most Influential Computer Journalist" according to Time Magazine, described the trends that excite him right now as happening both in computer hardware and computer software: outside the browser Web applications, service in the cloud, and hand held computers.
Much like during the mid to late eighties, when we saw advances in the personal computer, Mossberg explained we are once again witnessing advances in hardware innovation. This time however, we are not getting excited about the Commodore, Radio Shack and Apple II devices; instead, a new model of computer is energizing the world of consumer technology. The super smart phones or hand held computers as Mossberg prefers to call them: the iPhone, the G1, and the soon to be released BlackBerry Storm.
In much the same way, this time also reminds Mossberg of the mid to late nineties as we are once again observing a swell of Internet innovation; this one happening on the software front with widgets/Web apps and service in the cloud.
With so much information available on the Internet, and the instant gratification demanded by consumers today, the melding of these products is inevitable. Mossberg, who believes widgets will flourish on hand held computers, suggested that while the new class of mobile devices offer better browsing than their predecessors, it is in the apps that he sees competition, innovation and ideas fermenting. "We don't necessarily need to go through a browser," he said.
The problem of course is replicating data across devices in a smooth, cohesive manner to ensure that data available on the Internet is available on the handheld. And that's where service in the cloud comes in. While corporate America has enjoyed technologies such as BlackBerry Enterprise Server, Microsoft Exchange, and Lotus Notes that have enabled data to be replicated between devices [servers, desktops, laptops and handhelds], according to Mossberg, nobody has yet been "wildly successful" in bringing this technology to the wider consumer world via the cloud.
And so the race begins. While Mossberg has always claimed he is not responsible for business coverage of tech companies, the fact remains that for the past 17 years, the star of the Wall Street Journal has accurately assessed innovation within the consumer tech market. Given his insights this week, the only questions that remain are: who will bring cloud services to the masses, and will it happen during the econaclypse?
Read the transcript of Mossberg's keynote below.
Walter Mossberg: Dow Jones VentureWire Technology Showcase 2008
Effects of the economy
I think it's obvious to everybody that we're in for a serious recession. The question is only how serious. Barack Obama probably had thirty seconds of feeling happy and now has a whole lot to worry about.
At AllthingsD.com, our website, we have coined a term for the economy; we're calling it the 'econaclypse' and I think we are in kind of an econaclypse.
My observation, and I have been writing about tech for 17 years, I don't fund anything, but I do get pitched like VCs do.
I see all kinds of new companies, sometimes many months, sometimes over a year before their product ships. And it has been my observation that while things do slow down in bad times, they don't stop.
There is a digital tidal wave in the world, all kinds of digital products, whether they are hardware products, software products, services, web 2.0, whatever the hypesters are going to call the next phase of the Web. That stuff doesn't stop. It slows down a little, but doesn't stop.
And the companies obviously that can hold together and continue to work on their innovation, whether it's business model innovation, but especially if it's product innovation, those are the companies that come out of these things strongest.
Obviously this is not a typical company and I realize the model is different when you have 25 billion dollars in cash in the bank and no debt - which is what this person has - but Steve Jobs said, it was about a month ago or three weeks ago, Steve Jobs jumped on their earning call - he rarely deigns to be on their earnings call as many of you know - and he jumped on their earning call and said: in the last recession, that's when we opened our Apple stores, that's when we did... and he mentioned a couple of different innovative and expensive projects they'd taken on during the downturn, and he says we're going to try and keep innovating our way out of it.
Obviously on a smaller scale and without the 25 billion in cash, and maybe with a little debt that he doesn't have, still I think it's the right thing to do. And even if you don't manage to do that, somebody else will.
Just because the market is in the eight thousands instead of the eleven thousands or unemployment - which is actually the more serious number in my opinion for gauging the length of the recession - is 8.5 percent, which it might get to rather than 4 percent, it doesn't mean people stop working on new ideas, particularly in tech and particularly in consumer tech.
Mossberg's take on consumer technology today
Let me talk about what I think is going on, kind of the big picture of where we are and then we'll do some Q&A if you want.
This period we're in right now if we put the econaclypse off to the side for a minute, this period we're in right now, to me reminds me a lot of the mid to late eighties and the mid to late nineties at the same time. And here's what I mean. It reminds me a little bit of the mid to late 90's because we have another wave of Internet innovation going on.
There is obviously a million different things going on in the Internet but there are two categories I look at - and you've got to remember I don't write about, and I don't pay any attention to corporate technology, or niche technology. I also don't ever use the word enterprise, because the least enterprising and least entrepreneurial part of the entire economy are these giant bloated corporations to whom that term is often applied. I don't see anything enterprising about Ford Motor Company I just call them big corporations or big government agencies or whatever they are. Fine with me that they buy technology - it's great that they buy technology, and sure there is wonderful technology being produced for those folks, but it's not my job to write about them. So everything I say is in the context of consumer
So what do I mean when I talk about things going on on the Web that are to me as exciting and there is as much fervor and ferment and intellectual energy as there was when the Web was getting going in the mid to late nineties?
There are two buckets.
One is outside the browser - it's these widgets, web apps, whatever you want to call them, that did start on the PC and Mac. Actually in a funny way, some of them were tried in Windows 95 with what was called Active Desktop. Unfortunately the way that Microsoft presented it to the world was as sort of selling your personal computer desktop to Disney and Warner brothers, which allowed me to write a couple of great fulminating columns, and not just me.
But it was kind of this idea. And then the next instantiation of any importance, of any sort of economic clout was when Apple put this dashboard aspect into the Mac OS and then Microsoft followed with the sidebar in Vista. But really the place where I think it flourishes is on handhelds. Hand held computers, the iPhone class of computers of which there are now about to be three, and I'm going to get to that in a minute.
So, that's the first bucket, and I think there is colossal developer energy, intellectual energy, going into this question of "okay we have the Web out there, the Internet out there, it's just full of all kinds of information; commerce engines, and search opportunities, and entertainment opportunities, but we don't necessarily need to go through a browser - we can go through an app that takes advantage of the processing power and the graphics engine and all that on the computer that is narrowly focused on whatever it is.
How many people here have an iPhone or an iPod Touch? I'm talking about everything from the simple stock widget on there, to the now over 7000 apps for that phone - for that hand held computer. That's since 11th July. Two million downloads and 7000 apps for that phone, for that hand held computer. So that's one big area of excitement.
The other one, of course, is trying to take what has been true in corporate America for a long time, which is a sort of service in the cloud - whether it's the Blackberry Enterprise Server, or Microsoft Exchange or Lotus products that replicate data across devices and, push e-mail and other data out and bring that to the wider consumer world.
You see Google making some effort, you see Microsoft making some effort, you see Apple with Mobile Me making some efforts - that so far hasn't been successful. Nobody has really been wildly successful. Even RIM - much of the RIM effort has been focused - and when I talk about the consumer space most of the RIM, distributed computing through the cloud, is still out of the enterprise - although that is changing with their customer profile.
So those are the two big exciting areas that I see. I'm not talking about business models for those things. I understand that there has been some debate in some of the sessions about the viability of the advertising model versus other kinds of models, and I share some skepticism about relying solely on advertising.
But without regard to business model for a minute, I think those are two huge pools of excitement.
And then, complementing that and this is what makes me think of the mid to late eighties as opposed to mid to late nineties. What was happening in the mid to late eighties?
Remember the personal computer; the mass market personal computer appeared in 1977.
You had three of them; one of the most important of the three was the Apple II, but you also had a Radio Shack and Commodore. And those were the first machines where somebody without an engineering degree could actually take it out of the box and do something with it. And on the Apple II in particular, that's where business began to adopt personal computers because Dan Bricklin and Bob Frankston wrote a program called VisiCalc. It was a spreadsheet, it ran on the Apple II and you were off to the races in terms of businesses using personal computers.
But it was in the eighties that you began to see this tremendous competition and intellectual activity and design activity and engineering activity around "what is a personal computer?"
So you had Apple doing its stuff, you had Commodore, you had Radio Shack, you had, you know, a million companies.
When I started writing my Personal Technology column in 1991, PC Magazine, and first of all, PC Magazine was the size of Vogue, and when they did their ratings of computers, there were 75 or 80 PC makers, and they were not all making the same sort of thing.
Well I think we're kind of back there because I think there are new form factors and models of computers. Some of them are these netbooks, everybody's heard that term, it's actually a misnomer. The original idea was it would be a very thin client, with very little memory and processing power and would mostly be used to access things on the Net, these widgety kinds of things. And there is still some of that, but within eight months, they've all gotten hard disks, they've all gotten Windows XP so they've all kind of become very small laptops, but nevertheless, it's an interesting category.
The much bigger category of new kinds of computers is what I call hand held computers or another term might be super smart phones. I mean this smart phone term has been out there and has meant very little. At one point Microsoft actually was using it as a brand for something that by today's standards would look very primitive.
You know, Treos were smart phones, Blackberry is a kind of smart phone, obviously these Windows mobile phones that have been out there but there is something new, another whole level of game changing power, and application development that was kicked off with the iPhone and there are now two devices in my opinion that are in that category; one is the iPhone, and one is the G1, the first Android phone, and there will be many other Android phones.
And this week we're about to see a third, which is this, the BlackBerry Storm, which is their effort to compete with the iPhone head on. It's a touch screen phone which will have an app store, and I'm not referring to the - there have obviously been third party apps for the Blackberry, but this is going to have, it has a new SDK, and it will have a major app store like Apple has like Google has for the G1.
These things are computers that happen to make phone calls.
Some of you who have tried some of these 7K apps on the iPhone know that here is pretty much a staggering variety of what you can do on there. And I at least can say in my travels and daily life, I'm as glued as the rest of you probably are to this stuff. I'm pulling out my laptop less and less often during stopovers at airports, and it's not just like when you use to have your Blackberry or Treo and you could look at your e-mail.
I'm doing Web surfing in the browser - which is a good browser in the iPhone - and all of these, the marks of these is they have a much more real browsers than the old phones used to have, but I'm also using a lot of these apps. These are kind of big broad areas where I think it is quite fun and exciting to see competition, ideas ferment; and innovation.
Now are these things immune to the economy? Of course they're not - of course RIM would rather be launching and Verizon would rather be launching Blackberry Storm in last years economy than in this years economy, and it may be that what it would have done in last years economy is not going to happen in this years economy. But luckily for me, I don't have to cover the business side of RIM or Verizon, I don't have to predict sales, I just have try to review and try to understand these products and where they are heading.
Just as a lot of the design and engineering energy left things like CD-ROMs and rushed into the Web when it was clear that it was a big deal, I observed, and I don't know about all of you, but I'm observing a tremendous migration of design and engineering activity into these super smart phones or hand held computers, iPhone class devices. And into these both cloud services and these kind of widgety outside the browser Web apps.
So that's what I think are the big kind of trends that going on right now, at least in consumer technology - of course mixed with other things. People are still making laptops, we have a new version of Windows coming, which I actually think has a chance of being quite good, and quite good is not a phrase you would have seen in any of my columns next to the word Vista, but I think the track they're on with Windows 7 is quite promising. So I'd like to open up to Q&A and we can talk about these topics or any other topic you might think I might be quite competent.