Last week I began looking for tickets for the weekend NLDS series between the Nationals and the Atlanta Braves.  The Braves of course were subsequently knocked out in the elimination Wild Card game against the St. Louis Cardinals and now the Nationals are playing the St Louis Cardinals in St. Louis.  But in looking for tickets in Atlanta, I noticed that Atlanta has implemented Demand Based Pricing.  You can read more here.

Here is a screenshot of the FAQs.

With large troves of data, I imagine most event ticketing will move to demand-based pricing.

 

In the past I’ve talked about the importance of hybrid phases in innovation and innovation diffusion.  Rarely (and perhaps never) does a technology jump from one phase to another without first working through a hybrid phase (or series of hybrid phases). One could even argue that each innovation cycle is simply the process of stepping through periods of hybrid development.  Look at tablet computing for example.  We couldn’t jump from large mainframe computers to tablets without cycling through a series of innovations that spanned decades and were essentially hybrid innovations.  While companies would often love to compress the hybrid cycles between different innovation states, it is extremely difficult (if not impossible) to do.

Yesterday, I caught news that Toyota is increasing their hybrid development, while cutting back on their all-electric vehicle program.  Toyota plans to unveil 21 gas-electric hybrids by 2016. You’ll often see this type of behavior. Companies want to accelerate the time between states of innovation, but often realize (reluctantly) that a strong hybrid period is necessary to move from one innovation state to the next.

Get ready to hear a lot about 4K TV.  At the 2012 International CES earlier this year we saw 4K (and 8K) television prototypes from a number of OEMs. LG and Sony, among others, are expected to start shipping 4K TV offerings within the month.

Around CES there was much written regarding 4K television (see here and here as examples).  There is more to come.  I want to highlight a few key points to consider:

  1. While the initial models will be expensive from the perspective of a mass market consumer, prices will move down over time (typical for nascent technologies after first launch).
  2. As of right now, there are no single definitions/standards for 4K. CEA is actively working to bring together 4K stakeholders and solidify relevant definitions for 4K.
  3. The origins of 4K is the cinema. The imminent launch of 4K TVs will usher in 4K  as a home entertainment technology.
  4. The first 50K or 100K units sold will come relatively easy.  The real test for 4K will come after those initial units are sold.
  5. Resolution is a function of an individual’s distance from the display. In order for a 4K display to provide a meaningfully improved viewing experience in the home, the display will need to be large or individuals will need to sit closer to their TVs.
  6. 4K displays can provide am improved 3D experience.  Passive 3D essentially cuts the viewing resolution in half so with a roughly 4K display viewers can still watch passive 3D in full HD.

 

I think Todd Taylor over at OPS Rules accurately captures a few key points about the shifting of tech supply chain dynamics as the industry becomes decidedly more consumer centric.

A more consumer centric supply chain means design cycles (both planning and production cycles) will be compressed.  I’ve spoke with phone manufacturers who want the entire design cycle – from the first thought about the product until the time it is available to consumers at retail – to be under nine months

Google recently introduced Google Now – an app/service available on android.  Essentially, Google Now attempts to predict the information you want. Standing on a train platform – Google Now will deliver up details on the next departing train.  If you have an appointment across town, Google Now monitors traffic and alerts you when you need to leave so you aren’t late.

Here’s a quick commercial video on the service.

The real estate of mobile devices is an incredibly valuable resource.  Clearly Steve Jobs recognized this when Apple provided new app review guidelines back in the fall of 2010. When users are overrun with choice, making a choice can be difficult at best.  Use-case for mobile devices – and especially phones – is one of bit-sized information/content and speed. Consumers also value recommendations and these recommendations can come in a myriad of forms.  The key is these recommendations have relevancy. Google Now tries to take advantage of known information to offer useful bit-sized information in a quick format.  It takes advantage of the clock, the GPS coordinates, and search history.  In the past I’ve written about the sensorization of consumer tech – and how devices moving forward will integrate more sensing technologies.  Ultimately that should mean more meaningful recommendations with greater relevancy.

I’ve written in the past how adoption always follows an s-shaped adoption curve. When it comes to digital data adoption we are in the fat (steep upward sloping) part of the adoption curve.

Reuters reported on Monday that Google is now streaming 4 billion videos a day.  Moreover, 60 hours of video content is uploaded every minute -suggesting it would take 10 years to watch just want is uploaded in a single day.  Sure there is duplication. Storage is “free” and whenever a resource is free, it tends to be wasted. Reuters reports YouTube is only making money on about 3 billion videos streamed weekly – would be interesting to know the make-up of those videos.

Perhaps most interesting will be what YouTube does with their Original Channels. Some of these media partners include the likes of Madonna and Jay-Z.  YouTube has become the MTV of the digital decade.

It surprises me how many Internet properties overlook network theory. With storage prices at zero for the end user, aggregators win.  Aggregators are the bookmaker of the digital decade.

There are (at least) two major short-comings to today’s forecasting approaches. First, forecasters are using increasingly narrow definitions so they aren’t seeing things in the broader context. Secondly (and related), forecasters largely fail to look beyond what is seen – many of today’s forecasts are just projections of the current state of affairs. Taken together, today’s forecasters are missing the broader landscape of innovation that is taking place.

It is important to remember that adoption of innovation – whether it is consumer adoption or enterprise adoption – follows s-shaped power law curves. Growth isn’t linear. Adoption typically starts very slowly and remains low for an extended period (ie several years). After several years of low to no adoption, grow accelerates at an accelerating rate (positive 2nd derivative) for an extended period. Eventually adoption slows – the 2nd derivative turns negative followed by the 1st derivative turning negative.

This is where today’s analysts tend to stop. The drive towards specialization forces forecasters to focus on very narrow definitions. Analysts tend to take a micro approach to forecasts and focus only on single s-shaped adoption curves. They look at things in isolation. They look at markets in two states – growing or shrinking.

In reality, developments materialize over long stretches of time and typically overlap other trends. A single s-shape adoption curve will beget dozens or even hundreds of other s-shape adoption curves. In this way, innovation is much larger in aggregate than forecasters convey with their narrowly-defined forecasts. We think in narrow terms. In reality innovation follows k-waves as opposed to standard normal curves. More, k-waves overlap. Because these developments occur over long periods of time most companies are typically able to adjust to the evolutionary process of adoption. They are able to move to areas with positive 2nd derivatives, while abandoning areas with negative 1st derivatives. This transition doesn’t always happen smoothly, but it does happen naturally. But the desired immediate applicability of forecasts fails to accurately account for this evolutionary process.

CAPTCHAs are a challenge-response test used to help decipher human responses from that of a computer in order to prevent automated software from performing actions which degrade the quality of service.  Recently I’ve noticed that CAPTCHAs are getting increasingly difficult.  Is this a sign of tech evolving faster than the human mind?

Most technology companies are cognizant of how network effects influence adoption, but fail to adequately stimulate these network effects.  However, a few recent service launches by Apple recognize the influence network effects can have on the uptake of Apple devices.  AirPlay and AirPrint both illustrate Apple’s understanding that the greater the sphere of influence iOS devices can have, the stronger the network effects and therefore the greater the consumer adoption.  For example, Canon recently announced they would add AirPrint support to their PIXMA printers. This simple adjustment allows these printers to become more relevant to the iOS ecosystem, but also strengthens the relative position of iOS devices within the broader device ecosystem. Being able to sent content – either audio in the case of AirPlay or print in the case of AirPrint – to adjacent devices like speakers and printers directly from iOS devices strengthens the network effects surrounding iOS devices and will only strengthen the consumer appetite for these devices.

IHS iSuppli recently projected sluggish growth for single-purpose consumer tech devices like MP3 players, PNDs, and digital cameras.  At the same
time they expect multi-function devices like smartphones and tablets to enjoy strong double-digit growth over the same horizon The IHS iSuppli statement quotes, Jordan Selburn as saying,

The success of multipurpose electronic equipment, often coming at the expense of devices dedicated to a single task, is reshaping the landscape of the consumer electronics industry… In many cases, users can replace a slew of dedicated systems with just one multipurpose device, gaining functionality and portability while simultaneously saving money… The story of consumer electronics is an ongoing survival of the fittest, and multi-tasking systems such as media tablets will have a hand in turning yesterday’s hot consumer electronics gear into tomorrow’s fossils,

While their trends and predictions are all directionally accurate and something we’ve been pointing to and discussing with clients since early last year as we’ve tracked the monthly OEM data, I think IHS iSuppli and Selburn are overly strong on the causality of these declines.

What is primarily driving the decline in these categories are the individual structural issues these categories face directly.  For example, according to CEA Research, digital cameras are owned by 79 percent of households and these households own on average 1.8 digital cameras.  Eight-nine percent of self-identified early adopters own a digital camera and even 73 percent of self-identified late adopters own one.  Fifty percent of the households who do not own a digital camera say they’ll never buy one – suggesting we are extremely close to full market saturation for this category.  Digital cameras will never be owned by all households and this has nothing to do with the introduction of other devices.  Very few products ever enjoy 90+ percent ownership rates. The primary decline in digital camera sales isn’t necessarily what is happening in other categories – it is a function of what is happening in the camera category itself.

PND growth slowed and then outright declined largely because the technology is increasingly integrated into vehicles.  I suppose the argument could be made that this is the ultimate multi-function device.  MP3 players are owned by half of US households. We know MP3 players aren’t  for everyone.  In fact, 56 percent of non-owners still say they’ll never own one. Despite the fact the technology has been in the market for over a decade, only 37 percent of self-identified late adopters own one. Here again, the category declines as a result of hitting market saturation and not necessarily because there are alternatives.

Certainly, single purpose devices are impacted by Swiss Army Knife-like devices. Calculators likely have lower replacement rates (and subsequently growth rates) because of the ubiquity of computers. Multi-function printers represent a large share of the computer printer market.  And I’m sure paper calendar
sales have slowed since the introduction of digital alternatives. Some of these changes might be more a result of living in an increasingly digital world than as a
result of multi-function device substitutes. Still, the impact is noted. About a quarter of the households who own a digital camera say they’ll never buy another digital camera. This rate is consistent with many other products (18 percent of households owning a smartphone say they’ll never buy another one). Still this result does suggest some households will not replace/upgrade their digital cameras because of alternatives.

Single-purpose devices have through the history of technology existed – even with the entry of multi-function devices. Single purpose devices have (and always will have) an important place in the market. The article/report cites Cisco’s decision to shutter Flip.  By all accounts, Flip was highly successful. It was profitable and owned 40 percent of that market.  Cisco closed the business unit to send an important message to the market generally and shareholders specifically that they were committed to moving away from experiments in adjacent consumer businesses and return a full focus within their core enterprise business.  Despite high ownership rates of digital cameras (most if not all of which shoot video), Flip was able to do well.  It did one thing and it did it well.

e-Readers are another great example of a single-purpose device that can thrive despite the introduction and existence of multi-function alternatives.  e-Readers continue to grow rapidly despite the success of products like the tablet and the smartphone – both of which enable mobile/portable reading.  Recent research shows consumers have a very low interest in considering other devices when they shop for an e-Reader – suggesting consumers largely find no alternatives to an e-Reader.

These are just a few examples of devices that have (and continue to) do well despite the introduction of new multi-function devices.