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TMCNet:  Tech Roller Coaster [Financial Express (India)]

[December 31, 2012]

Tech Roller Coaster [Financial Express (India)]

(Financial Express (India) Via Acquire Media NewsEdge) The tech sphere proved to be amongst the most dynamic sectors this year. Besides innovation, patent wars, lawsuits and overhype made it a year when technology was in the news for more than mere gizmos. Here's the story behind the screen The year began with Apple retaining its position on top. The iPad was the king of its kind; "once you go Mac, you don't come back" remained largely true; and Apple's share price made it the world's biggest company through market capitalisation. However, by the end of the year, the frame shifted substantially, and the iPad, though still at the top, is more of a "first among equals", with affordable and efficient Samsung and Google tablets munching at its market share; Windows 8's daring new look may not leave the Mac as the jazziest operating system; and it seems Apple's share price, which peaked in September at $702, has now declined by 25%, to near $515.


So, what's clawing at Apple's formidable realm Competition. Competition, which has finally caught up following Steve Jobs' thunderous revolutions. Amongst other things, Jobs' tenure at Apple was both breathtaking and maverick. The iTunes, iPod, iPhone and iPad revolutionised the consumer industry in ways unprecedented. In doing so, not only did Jobs bring about one of the most dramatic corporate turnarounds, but also left rivals confused in the mud. Microsoft, at least in the rich world, quickly lost consumers to Apple's Mac, while RIM and Nokia, with much smartphone market share, lost to Apple and later to Google's Android, saw a sudden plunge into the pool for survival.

So, who is trying to storm Apple's strongholds The rise of efficient but affordable tablets and smartphones, and competitors. At the forefront is the Samsung/HTC-Google duo, reminiscent of the Microsoft-IBM partnership, whereby one firm specialises in software (in this case Android by Google), whilst the other specialises in hardware (which explains Samsung's affordable array of smartphones).

Google's entry into the smartphone business, and its apparent adaption of many of iOS's features, was, for Apple, tantamount to declaring war. And it promised to go "thermonuclear"-which should explain the ferocious patent wars and Apple's foray into Maps. Nevertheless, Android's rise, complemented by affordable smartphones, has made it the world's most popular phone, albeit not as profitable as the iOS with around 63% of market share. It serves as a perfect alternative for the millions who dreamt of Apple, but could never afford it.

Essentially, the iPhone 5 was faster, bigger and thinner (but more or less the same); the iPad Mini was a smaller and lighter version of the iPad. There was little in product line this year that truly really revolutionised consumption pattern in the way the iPhone or iPod did.

Although, save for the Apple Maps glib, Apple post-Jobs continues to run smoothly under Cook, what remains amiss-and this may have been inevitable-are products that dazzle.

Patent wars One of the deadliest underlying currents in the tech industry today are the patent wars between big giants like Apple, Samsung and Google, and a gratuitous increase in litigation. Not only are they increasingly adding to costs of innovation, but also bolstering barriers to entry for new tech firms.

For instance, most litigation in Silicon Valley today is done by patent trolls-firms whose sole business model is to buy patents and litigate on their basis. And new entrants are almost always the first ones to be picked on, thanks to their limited millions to fight such litigation.

But at the root of it lies a serious deficiency in the US patent law. Patents, in theory, should encourage innovation, but often end up doing the opposite. For a patent to be a patent, it needs to be "novel, non-obvious, and useful"-but, varied subjective interpretation of these criteria often allows petty look-and-feel aesthetic options to be patented. Apple has a patent over the slide-to-unlock; but since it is a conceptual patent, another firm using the same feature with drastic differences in aesthetics is liable to litigation. Such patents lie at the heart of the many patent battles won or lost.

Apple's $1.06-billion victory against Samsung in US courts counted "the pinch-to-zoom" feature, "bounce-back" feature and the "rounded-square icons" (almost all of them now common in most touchscreen phones) amongst the patents Samsung violated. Now, Apple has been sued in Korean courts over the use of the "notification centre" (the thing that pops up when you scroll down).

Since 2006, these firms have spent over a monumental 20% of their R&D budget on litigation itself. Yet, these patent wars are set to continue, and, with little respite in sight, only look to get uglier.

Cloud gets bigger If cloud services were said to be the next big thing last year, with the smartphone, the tablet, and the (increasingly obsolete) personal computers now being done to death, it may jolly well be right.

But here, the stakes are against the pioneer. Google and Facebook, both Apple's core and potential competitors, have cloud services as their core strengths. Google leads the pack with synchronisation of brilliant mapping, document, blogging and other utility applications through its Google account and Chrome browser-so much so that it is now being investigated by EU's antitrust regulators for bundling too many software through its search options.

At the same time, Facebook itches to find new ways of exploiting consumers' social behaviour and relationships, and collaborate its platform with a host of online games and music services like Zynga and Spotify (not in India yet).

Apple's detour to cloud computing, most famously through Siri and Apple maps, has a slightly mixed record. Siri is arguably the best voice assistant out there-even though it is not used as often as Cook would have liked. Samsung's S Voice is barely a competitor, but Google's new voice search in Android phones can become a serious adversary.

But, Apple Maps, the more serious of the detour to cloud services, was, for a company like Apple, a disaster-Cook had to sign an apology letter. Analysts say it is mostly because Apple's management structure is ill-suited to the kind of rapid update required for a cloud service like mapping application, and that it is hard to make a mapping application. Google has been doing it for seven years; Apple was likely to get it wrong the first time.

Nonetheless, the future promises to be even more dynamic for consumer-related technology. Hopefully, cloud computing may end the need for desktop applications in entirety, while new arenas of competition between firms old and new could beget another flurry of innovation.

Copyright 2012 The Indian Express Online Media Pvt. Ltd., distributed by Contify.com Credit: Akshat Khandelwal (c) 2012 The Indian Express Online Media Pvt. Ltd., distributed by Contify.com

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