Not All Technology Bubbles Are Expanding

techbubbleburst

 

Technology news has been a bit negative recently. The death of Windows Phone got the most attention last week but Apple and Samsung have their own problems, and there are many other companies and products that are either failing or not living up to expectations. Here’s a sampling of the dark side of recent technology news.


Apple Watch

Apple released the Apple Watch in April after a huge promotional buildup, and predictably more than a million were sold to Apple faithful immediately after it went on sale.

Do you know anyone that has an Apple watch? I don’t either. Sales have fallen off a cliff, down 90% since the opening week according to MarketWatch. Tech journalists and bloggers have stopped talking about it, and non-tech consumers were never interested in the first place. The watches are disappearing from the wrists of the celebrities that flaunted them a couple of months ago.

Never underestimate Apple. It’s certainly possible that sales will turn around as Apple continues to improve the watch and apps appear that create a reason – any reason – to wear one. At the moment, though, there’s no momentum and absolutely no buzz among non-tech consumers.


Samsung

The smartphone market is dominated by Android, which is the OS on more than 80% of all smartphones sold in the world. The Android market is dominated in turn by Samsung, which looked invincible for years and continues to sell more smartphones than any other manufacturer. Samsung sold significantly more phones than Apple in the first quarter of 2015.

But there are two markers that change the perspective.

First: Samsung had a terrible quarter. Its market share dropped precipitously as it faced intense competition for low-end sales in Asia. Its revenue was down 12 percent and profits were down 30 percent. Samsung is going to step up its spending on marketing but otherwise has nothing very compelling in the pipeline to revitalize sales.

Second: A truly shocking analysis in the Wall Street Journal last week. In the first quarter of 2015, Apple made 92% of of the profits in the smartphone industry. Apple sells less than 20% of the smartphones but its profit margins are so high that it leaves Samsung and the other one thousand companies that make smartphones fighting for peanuts. Ninety-two percent of the profits go to Apple! Amazing.


Streaming music

The trend is clear: we’re increasingly going to stream our music online instead of buying music from iTunes or Amazon. Spotify has a loyal following and is growing fast, but there is room for other services – so, of course, competitors are jumping in.

Tidal was launched by Jay Z in March with one of the most disastrous press conferences in recent memory. Sixteen incredibly wealthy musicians were paraded onstage to make a pitch that you should pay more for music so they can get richer. As Gawker put it, “It’s more expensive because it’s “higher quality” and “artist-owned,” which is important because Usher, Daft Punk, and Madonna have been living in wretched penury for far too long, and it’s time for people to give back.” It was bizarre. Tidal is failing miserably; it has already burned through two CEOs and has virtually no subscribers.

Meanwhile Apple has launched Apple Music, a streaming service that will wrap up features from Spotify and iTunes into one big glorious mess of an app. Apple will get millions of subscribers, thanks to its ability to install the app on all the iPhones in the world, but early reviews of the Apple Music app have not been kind – “messy, slow to load, complicated to setup, and missing some social features,” according to a fairly complimentary review. Even worse, instead of scrapping iTunes as it so richly deserves, Apple shoehorned Apple Music into it, making iTunes even more bloated.

Everyone agrees that Apple Music will be successful and attract millions of subscribers, but it’s a copycat of better services and brings nothing new. A shame. We look to Apple for more than that.


MSN apps

Last month I reported that Microsoft had gutted its MSN Travel app without calling attention to it. Now it’s official: Travel will be killed later this year, along with the Health & Fitness and Food & Drink apps. Theoretically the News, Weather, Sports, and Money apps will continue to be supported but I wouldn’t get emotionally attached to them.

Killing the Health & Fitness app is particularly puzzling. At one time Microsoft intended to have a major health platform, with the Health & Fitness app to organize workouts, the Microsoft Band to collect fitness data, and an online HealthVault service to collect your health records from various sources and interface with your health providers. Now the Health & Fitness app will shut down, the Microsoft Band is a nonstarter in the market for wearable fitness bands (although you can make the argument that it looks pretty good compared to Apple Watch), and HealthVault remains a mystery. In one of the truly bizarre twists, Microsoft developed a “Microsoft Health” app to go with the Microsoft Band, separate from the MSN Health & Fitness app – and then did not provide any way to link either one to the HealthVault service, the service that is meant to organize your health records.


Microsoft HoloLens

Microsoft put on a dazzling demo in January of the HoloLens, a product in development that fits over your head and presents a view of augmented reality – see-thru lenses with a 3D holographic overlay that you can interact with. Imagine that you can see your coffee table and couch, but around them is, say, a 3D Minecraft environment that you can manipulate to tunnel through your table to a lava pool on the floor. The demo showed NASA scientists walking around a 3D representation of the surface of Mars, and artists working with 3D sculptures. It was awesome.

Unfortunately, the demo was wildly exaggerated. The next time Hololens was demonstrated, Microsoft confessed that the field of view is going to be a sliver of rectangle in the middle of your field of view – mildly interesting but nothing like the immersive, wonderful experience that was promised. When Hololens goes on sale, it will be a first generation product that will certainly evolve and improve, but there is enormous disappointment among the journalists who saw the first demo and then collided with the reality at the second demo in May.

It’s not all doom and gloom, of course! Obviously technology is transforming and enriching our lives. Just bear in mind that the big companies are trying to figure out what’s next, just like you are, and their crystal balls aren’t always better than anyone else’s.