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Domain: stratechery.com
Stories and comments across the archive that link to stratechery.com.
Stories · 9
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It's Becoming Increasingly Unlikely that We'll See a Major Shift To Virtual Reality Any Time Soon (theoutline.com)
An anonymous reader shares a report: VR was supposed to be a revolution, with companies like Oculus pioneering a whole new way for gamers and non-gamers alike to be immersed in digital environments -- but that excitement has markedly cooled. The media has gone through several cycles of fawning, optimistic prognostication, and... wishful thinking? -- but for all the hype we have very little consumer interest to show for it. Oculus sold off to Facebook and has become little more than a parlor trick Mark Zuckerberg shows off at every F8 event. As Ben Thompson recently noted, the bet on the company is an awkward fit for Facebook that strays from Zuckerberg's strengths in several ways.
Oculus founder Palmer Luckey is now tooling around on right wing defense projects, while co-founder Brendan Iribe has just left the company amid rumors of future headsets being shelved. Several prominent studios have shut down or ceased VR efforts, including Viacom and AltspaceVR, and Microsoft is a steadfast "no" when it comes to dipping its toes in the water via the Xbox. Sony has boasted about sales of the PSVR hitting 3 million in two years, but there are 82 million PS4 units in the hands of consumers (and keep in mind that Microsoft sold 35 million Kinects but still discontinued the product). With cumbersome hardware (which, let's be honest, looks really stupid to most people), absurd PC requirements, and nearly no AAA titles to lure the curious into the world of VR, it's becoming increasingly unlikely that we'll see a major shift to virtual reality any time soon.
Also worth noting: if you're looking to Magic Leap for a kind of bridge to the future with its AR efforts, don't get too wound up. Brian Merchant's excellent and detailed feature story for Gizmodo on the company's struggles to get around the same hardware, software, and consumer adoption issues that plague VR make it clear there is no easy answer in this space. In my opinion -- as someone who watched this new generation of virtual reality emerge from the earliest days, and was one of its biggest fans -- VR adoption will only happen when the barrier to entry is akin to slipping on a pair of sunglasses (and even then it's no sure thing). Most people don't want to wear a bulky headset, even in private, there's no must have "killer app" for VR, and no one has made a simple plug-and-play option that lets a novice user engage casually. Everyone I know who's tried a VR headset is blown away by the experience, but no one really wants to go deep on it except for what amounts to a rounding-error percentage of enthusiasts. Further reading: 'We Expected VR To Be Two To Three Times as Big', Says CCP Games CEO. -
Intel Is in an Increasingly Bad Position in Part Because It Has Been Captive To Its Integrated Model (stratechery.com)
Once one of the Valley's most important companies, Intel is increasingly finding itself in a bad position, in part because of its major bet on integration model. Ben Thompson, writing for Stratechery: When Krzanich was appointed CEO in 2013 it was already clear that arguably the most important company in Silicon Valley's history was in trouble: PCs, long Intel's chief money-maker, were in decline, leaving the company ever more reliant on the sale of high-end chips to data centers; Intel had effectively zero presence in mobile, the industry's other major growth area. [...] [Analyst] Ben Bajarin wrote last week in Intel's Moment of Truth. As Bajarin notes, 7nm for TSMC (or Samsung or Global Foundries) isn't necessarily better than Intel's 10nm; chip-labeling isn't what it used to be. The problem is that Intel's 10nm process isn't close to shipping at volume, and the competition's 7nm processes are. Intel is behind, and its insistence on integration bears a large part of the blame.
The first major miss [for Intel] was mobile: instead of simply manufacturing ARM chips for the iPhone the company presumed it could win by leveraging its manufacturing to create a more-efficient x86 chip; it was a decision that evinced too much knowledge of Intel's margins and not nearly enough reflection on the importance of the integration between DOS/Windows and x86. Intel took the same mistaken approach to non general-purpose processors, particularly graphics: the company's Larrabee architecture was a graphics chip based on -- you guessed it -- x86; it was predicated on leveraging Intel's integration, instead of actually meeting a market need. Once the project predictably failed Intel limped along with graphics that were barely passable for general purpose displays, and worthless for all of the new use cases that were emerging. The latest crisis, though, is in design: AMD is genuinely innovating with its Ryzen processors (manufactured by both GlobalFoundries and TSMC), while Intel is still selling varations on Skylake, a three year-old design. -
Intel Is in an Increasingly Bad Position in Part Because It Has Been Captive To Its Integrated Model (stratechery.com)
Once one of the Valley's most important companies, Intel is increasingly finding itself in a bad position, in part because of its major bet on integration model. Ben Thompson, writing for Stratechery: When Krzanich was appointed CEO in 2013 it was already clear that arguably the most important company in Silicon Valley's history was in trouble: PCs, long Intel's chief money-maker, were in decline, leaving the company ever more reliant on the sale of high-end chips to data centers; Intel had effectively zero presence in mobile, the industry's other major growth area. [...] [Analyst] Ben Bajarin wrote last week in Intel's Moment of Truth. As Bajarin notes, 7nm for TSMC (or Samsung or Global Foundries) isn't necessarily better than Intel's 10nm; chip-labeling isn't what it used to be. The problem is that Intel's 10nm process isn't close to shipping at volume, and the competition's 7nm processes are. Intel is behind, and its insistence on integration bears a large part of the blame.
The first major miss [for Intel] was mobile: instead of simply manufacturing ARM chips for the iPhone the company presumed it could win by leveraging its manufacturing to create a more-efficient x86 chip; it was a decision that evinced too much knowledge of Intel's margins and not nearly enough reflection on the importance of the integration between DOS/Windows and x86. Intel took the same mistaken approach to non general-purpose processors, particularly graphics: the company's Larrabee architecture was a graphics chip based on -- you guessed it -- x86; it was predicated on leveraging Intel's integration, instead of actually meeting a market need. Once the project predictably failed Intel limped along with graphics that were barely passable for general purpose displays, and worthless for all of the new use cases that were emerging. The latest crisis, though, is in design: AMD is genuinely innovating with its Ryzen processors (manufactured by both GlobalFoundries and TSMC), while Intel is still selling varations on Skylake, a three year-old design. -
Ends, Means, and Antitrust (stratechery.com)
Analyst Ben Thompson on the European Commission's $2.7 billion fine levied on Google for anti-competitive behavior: The United States and European Union have, at least since the Reagan Administration, differed on this point: the U.S. is primarily concerned with consumer welfare, and the primary proxy is price. In other words, as long as prices do not increase -- or even better, decrease -- there is, by definition, no illegal behavior.
The European Commission, on the other hand, is explicitly focused on competition: monopolistic behavior is presumed to be illegal if it restricts competitors which, in the theoretical long run, hurts consumers by restricting innovation. -
'The Unwillingness To Foresee The Future' (stratechery.com)
An anonymous reader shares a few excerpts from Ben Thompson's analysis: Back in 2006, when the iPhone was a mere rumor, Palm CEO Ed Colligan was asked if he was worried: "We've learned and struggled for a few years here figuring out how to make a decent phone," he said. "PC guys are not going to just figure this out. They're not going to just walk in." What if Steve Jobs' company did bring an iPod phone to market? Well, it would probably use WiFi technology and could be distributed through the Apple stores and not the carriers like Verizon or Cingular, Colligan theorized." I was reminded of this quote after Amazon announced an agreement to buy Whole Foods for $13.7 billion; after all, it was only two years ago that Whole Foods founder and CEO John Mackey predicted that groceries would be Amazon's Waterloo. And while Colligan's prediction was far worse -- Apple simply left Palm in the dust, unable to compete -- it is Mackey who has to call Amazon founder and CEO Jeff Bezos, the Napoleon of this little morality play, boss. The similarities go deeper, though: both Colligan and Mackey made the same analytical mistakes: they mis-understood their opponents' goals, strategies, and tactics. -
Peak Google: The Company's Time At the Top May Be Nearing Its End
HughPickens.com writes Farhad Manjoo writes at the NYT that at first glance Google looks plenty healthy, but growth in Google's primary business, search advertising, has flattened out at about 20 percent a year for the last few years. Although Google has spent considerable resources inventing technologies for the future, it has failed to turn many of its innovations into new moneymakers. According to Manjoo, as smartphones eclipse laptop and desktop computers to become the planet's most important computing devices, the digital ad business is rapidly changing and Facebook, Google's archrival for advertising dollars, has been quick to profit from the shift. Here's why: The advertising business is split, roughly, into two. On one side are direct-response ads meant to induce an immediate purchase: Think classifieds, the Yellow Pages, catalogs or Google's own text-based ads running alongside its search results. But the bulk of the ad industry is devoted to something called brand ads, the ads you see on television and print magazines that work on your emotions in the belief that, in time, your dollars will follow. "Google doesn't create immersive experiences that you get lost in," says Ben Thompson. "Google creates transactional services. You go to Google to search, or for maps, or with something else in mind. And those are the types of ads they have. But brand advertising isn't about that kind of destination. It's about an experience." According to Thompson the future of online advertising looks increasingly like the business of television and is likely to be dominated by services like Facebook, Snapchat or Pinterest that keep people engaged for long periods of time and whose ads are proving to be massively more effective and engaging than banner advertisements.
In less than five years, Facebook has also built an enviable ad-technology infrastructure, a huge sales team that aims to persuade marketers of the benefits of Facebook ads over TV ads, and new ways for brands to measure how well their ads are doing. These efforts have paid off quickly: In 2014 Facebook sold $11.5 billion in ads, up 65 percent over 2013. Google will still make a lot of money if it doesn't dominate online ads the way it does now. But it will need to find other businesses to keep growing. This is why Google is spending on projects like a self-driving car, Google Glass, fiber-optic lines in American cities, space exploration, and other audacious innovations that have a slim chance of succeeding but might revolutionize the world if they do. But the far-out projects remind Thompson of Microsoft, which has also invested heavily in research and development, and has seen little return on its investments. "To me the Microsoft comparison can't be more clear. This is the price of being so successful — what you're seeing is that when a company becomes dominant, its dominance precludes it from dominating the next thing. It's almost like a natural law of business." -
Verizon Working On a La Carte Internet TV Service
An anonymous reader writes: One of the reasons people have been fleeing cable TV in droves is the idea that they're paying for hundreds of channels but only using a handful. Even though that's not really true, Verizon is now working on an internet TV service that lets people pick and pay for only the channels they want. Verizon CEO Lowell McAdam said, "I think everyone understands it will go to a la carte. The question is what is that transition look like ... I don't think there is anyone that would stand up here and say the only way it's going to be offered five years from now is linear and it's going to be tied to your TV set because frankly they will miss the market and they will be the ones left behind." -
Figuring Out the iPad's Place
An anonymous reader writes "One of the most interesting notes from Apple's recent quarterly report was that iPad sales are down. Pundits were quick to jump on that as evidence that the iPad was just a fad, but there were still more than 16 million units sold. iPads, and the tablet market as a whole, clearly aren't a fad, but it's also unclear where they're going. They're not convincingly replacing PCs on one end or phones on the other. Meanwhile, PCs and phones are both morphing into things that are more like tablets. New form factors often succeed (or fail) based on what they can do better than old form factors, and the iPad hasn't done enough to make itself distinct, yet. Ben Thompson had an insightful take on people demanding desktop functionality from the iPad: 'This sounds suspiciously like the recommendation that the only thing holding the Macintosh back was its inability to run Apple II programs. It's also of a piece with the vast majority of geek commentary on the iPad: multiple windows, access to the file system, so on and so forth. I also think it's misplaced. The future of the iPad is not to be a better Mac. That may happen by accident, just as the Mac eventually superseded the Apple II, but to pursue that explicitly would be to sacrifice what the iPad might become, and, more importantly, what it already is.'" -
Microsoft Rumored To Integrate Android Apps
phmadore writes "Windows Phone has been struggling for market share, largely due to a serious lack of developers willing to invest their time in what one might consider a niche market. Statistically speaking, Android has more than 1.1M apps to Windows Phone's 200,000+. Well, according to unnamed sources informing the Verge, Microsoft may soon integrate/allow Android applications into both Windows and Windows Phone." This follows the recent debate over whether Microsoft should try to fork Android. Peter Bright made the point that doing so would be extremely difficult, and probably not worth Microsoft's time. Ben Thompson has an insightful post about how Microsoft's real decision is whether to focus on devices or services.