Palm Foleo: It's a PC, dummy

Wow, what an interesting day this was in the mobile and web world:

--Apple hinted that it will allow third party developers to add applications to the iPhone, potentially overcoming one of the device's biggest shortcomings (link).

--Google announced Gears, an open source project to enable web apps to work offline -- injecting Google into the growing effort to make PC operating systems irrelevant, and linking Google with Adobe (link).

--Livescribe previewed its pen computing device, the latest in a long series of efforts to turn Anoto's pen sensing technology into a commercially viable product (Livescribe link, Anoto background).

And oh yeah, Palm finally announced Jeff Hawkins' secret project, the Foleo.

A lot of the online commentary on the Foleo hasn't been enthusiastic. Engadget called it the "Foolio" (link). Ars Technica's article was headlined, "Palm officially out of ideas, debuts 1990s palmtop concept" (link). The discussion on the Palm Entrepreneurs Forum (an e-mail list for Palm application developers) was more balanced between admirers and detractors, but even there a lot of people were very lukewarm.

I think a lot of this is Palm's fault. They're trying to position the Foleo as a "mobile companion,"* a device that smartphone users can carry with them when they need a keyboard and bigger screen. In other words, it's for a small subset of the smartphone market, which itself is a small subset of the phone market. A niche inside a niche. The Stowaway keyboard folks should worry.

But I don't think the Foleo really is a "mobile companion." Back when I started to work at Palm (before the turn of the century) one of the old veterans of the company pulled me aside and passed along a little wisdom. "Michael," he told me, "Ya gotta think in terms of real estate. If you're in another device's real estate, you're competing with that device. Palm lives in your pocket; it competes with other things that go in your pocket. If you get bigger than the pocket, you're living in the briefcase, and you're competing with the notebook computer."

Foleo lives in the briefcase. It's displacing the notebook computer from your bag. I don't care what they call it, I don't care if Palm fully realizes it yet, but the fact is that Foleo's a notebook computer.

More to the point, Foleo is the most significant new consumer PC platform introduced in the US since the Macintosh. All you Linux heads who have been asking for a true consumer Linux PC, you finally got your wish.

Wow. That's kind of cool. It may be crazy, but it's a craziness I like. Palm has reimagined the PC for the wireless Internet era, simplifying and stripping away everything they thought was no longer necessary. So since most people carry a phone, you use the phone as your wireless modem. The device also has no hard drive. Since everything is stored in flash RAM, you never actually shut it down -- you just turn off the power, and when you turn it on again all your data and apps are still there, waiting for you. This is normal in a handheld, but it's long overdue in a PC.

"Desktops and laptops were too large, expensive, complex. You're not going to build billions of these complex machines, you build mobile computers....But it became clear the smartphone wasn't going to fill that role....You need a full size screen and keyboard." --Jeff Hawkins, quoted in Engadget

How well will the Foleo sell?

I don't know. It's not the product I would have built (my long wait for an info pad continues). The most successful mobile devices in the last decade have been specialized products that solve one problem for one type of customer -- iPod plays music for entertainment hounds, GameBoy plays games, BlackBerry does e-mail, Palm Pilot does your calendar, etc. The Foleo flies in the face of that. Although Palm talked a lot about e-mail today, the device also has a browser built in, and clearly has ambitions to be a general-purpose computer. I think we should judge Foleo on those terms, not by measuring it against other products we all imagined or wanted. Here are a couple of quick thoughts, and I'll probably post more in a few days after I've had more time to think about it...

Palm can now succeed even if Treo fails. Palm implied that the Foleo will be able to work with any smartphone, not just the Treo. This potentially gives Palm a larger market, and also sidesteps the operators, since Foleo can be sold through consumer electronics stores. Palm execs have been very public in saying that they are happier selling through retail rather than through operators, so today they must feel a little bit liberated.

Beware the Windows CE factor. I have seen many products very similar to Foleo fail over the years, and that worries me a lot. For years Microsoft and the Windows CE hardware companies produced a series of sub-notebooks that looked eerily like the Foleo. Like Foleo, you were supposed to use them to do light browsing and e-mail. They all died quickly, mostly because they looked so much like Windows that people expected them to run Windows apps. When people didn't get the full Windows experience, there was an immediate backlash.

Foleo's a little different because it doesn't pretend to be any flavor of Windows. But the hardware design looks an awful lot like a Windows PC, and that's going to create the wrong impression. Maybe Foleo looks nicer in person, but in the photos it looks like an anonymous gray box, disturbingly like a Dell subnotebook. It doesn't seem to have the lust-inducing look of the Treo 600, let alone the Palm V. I wish they'd made the case more distinctive, or at least a different color, because then people might expect different things from it.

Success probably depends on the apps. Like other PCs, Foleo doesn't do all that much out of the box. It apparently comes with Documents to Go (a well respected suite of Office apps, ported from Palm OS), an e-mail client, and a browser. That's all nice, but it's definitely not enough to make me put down my notebook computer. I think Foleo will eventually live or die based on whether it attracts a lot of third party applications that do interesting things you can't do with a notebook PC.

Palm has been evangelizing a number of developers to create apps for Foleo, but for some strange reason it excluded them from the Foleo announcement today. Instead, the announcements are going to be dribbled out one by one over the next few weeks and months. I presume the idea was that they'd create a sense of momentum, but I think instead what Palm did is make today's announcement less impactful than it could have been.

That means we haven't heard the full Foleo announcement yet. There's more to come from the third parties. We won't be able to really judge the device until we see the totality of what it'll do at launch.

My bottom line, based on what I know today: As a standalone mobile data device, the Foleo is uninspiring. As a potential challenger to the notebook PC, I want to believe, but the proof will be in the third party apps.

_______________

*By the way, the term "mobile companion" is perilously close to "PC Companion," one of Microsoft's early terms for Windows CE devices. The phrase gives me hives, but I think that's just me.

Nokia, the computer company?

Ten years from now, Nokia's going to be the subject of an interesting business case study. It'll either be the stirring story of a company at the height of its power that had the courage to challenge its deepest beliefs. Or it'll be the cautionary tale of a company that had it all and blew it.

Nokia says it's planning for what comes after the mobile phone.

I've heard this from Nokia before, but I always used to think it was posturing. Companies say that sort of thing all the time -- "we're looking for the next big growth driver" or something like that, meaning they plan to keep doing all the same stuff they do today but also desperately hope they can grow another line of business alongside it. That's typical in business; you try to have your cake and eat it too.

But after hearing several senior Nokia people repeat the message over the last couple of months, I've started to believe they're saying something different. Don't get me wrong, I'm not trying to say they are about to abandon mobile phones. But I think they sincerely believe that business won't last forever, and they're starting to lay the groundwork for what will replace it.

The message really hit home last month, when I heard it from Nokia CTO Tero Ojanpera and Bob Iannucci, head of Nokia Research Center, at a Nokia strategy briefing in Silicon Valley. Iannucci pointed out that Nokia started as a paper mill and has a history of completely changing its industry from time to time -- from rubber boots to monitors to mobile phones. He said it is once again "a company in transition to the next phase." That next phase is mobile computing.

Not smartphones, not converged devices, but full-on mobile computers intended to replace both PCs and mobile phones. Nokia says it expects these devices to eventually sell in the billions of units, and to become the world's dominant means of accessing the Internet.

Even though these future devices will still be mobile, if you take all of Nokia's statements at face value the changes from mobile phones will be so extensive that it's fair to call it a new business.

The fact that Nokia's even talking about this is a remarkable change. Five years ago, Microsoft was charging hard in mobile and the big topic of discussion was how could a company like Nokia possibly defend itself. Now Nokia's talking about how it will put the PC industry out to pasture, and oh by the way take over the Internet as well.

Although the goal is almost insanely ambitious, I can't say that Nokia is wrong to try. Mobile phones are gradually becoming a commodity. The biggest unit growth is in low-end phones, a strength for Nokia because of its volumes and efficiencies. But even Nokia managers will tell you that creating low-end products in a saturating market is not a fun business. It certainly won't produce the sort of growth and margins that investors expect.

Nokia's not predicting the instant death of the mobile phone business. It's a very large and divisionalized company, and I'm sure big chunks of Nokia are hell-bent on staying a mobile phone company forever. But it sounds like the senior management feels the mobile phone business is becoming uninteresting, and they want to get started on the next thing before the current business rides off into a long Nordic sunset.


The hard part is implementing

Becoming a mobile computing company is a lot harder than talking about it. The mobile phone world is based on managed competition, in which operators, handset vendors, and governments create shared standards even as they compete. It's a closed circle in which new features flow down from the top like molasses running down a cake of ice, driven by fiat from the leading vendors.

The computing world is much more Darwinian. Barriers to entry are lower, and innovation often flows up from the smallest players. Companies compete in something that resembles a free-for-all, with the marketplace choosing winners.

So what Nokia's talking about is not just a change in product design. It's more like a wholesale remaking of the company's culture, processes, and partnerships. The advantage of this for Nokia is that if it successfully makes the transition, it will have put everyone else in the mobile phone industry -- handset vendors and operators -- at a permanent disadvantage, unless they can make the same wrenching transition.

The disadvantage is that the change is pretty darned wrenching for Nokia as well.

Nokia seems to understand at least some of the changes it has to make in order to be a computing company. Iannucci acknowledged that the "Internet model" of product development is to create and ship products first, and then bother about standards later (if at all).

He said Nokia's research labs, formerly fairly closed, have re-oriented themselves to work collaboratively with universities and other parties in the industry. The collaboration part is essential because "we can no longer fuel...internally" the amount of technology the company has to develop now that it wants to be a computing company.

Thus the briefing in California -- they want to be a part of the peculiar hive mind we call Silicon Valley.


The transition will be awkward

One amusing example was when a Nokia speaker solicited feedback from the audience on what barriers to success they see in the mobile marketplace.

A VC shot up his hand: "Operators."

Dead silence for a second. Then the Nokia speaker asked uncomfortably, "what in particular about operators?"

And you had to laugh a bit, because the question didn't really need to be explained. What the questioner meant was: "we want the operators dead; are you going to help make that happen?" Everyone in the room knew that. Nokia knew that. The question was a test of Nokia's seriousness.

Nokia didn't exactly pass the test. They won't answer that question on stage because it creates too many political issues for the current mobile phone business. So what could have been a nice bonding moment between Nokia and the Silicon Valley folks degenerated into a carefully nuanced spiel about "we're working together to address many issues" and bland verbiage like that. They ended the Q&A soon after.

Lesson: If you want to bond with somebody, be prepared to discuss the issues they care about. And don't ask for feedback unless you're prepared to answer tough questions.


Next steps

Here are some other issues that I think Nokia will need to work through if it really wants to bond with Silicon Valley.

Get real about the role of mobile computing. As far as I can tell, Nokia's hoping that the mobile computer will literally replace PCs. I think that's both naive and unnecessarily limiting to Nokia's prospects. Mobile usage is a different paradigm from personal computing. You use a PC in a long sessions at a static location; you use a mobile while on the go, in places where a PC isn't convenient. That different usage pattern means the users are likely to have different requirements and different expectations for mobiles than they have for PCs. If Nokia tries to just make mini-PCs, it's probably going to end up with products that don't deliver on the great new stuff that mobile computing can really do.

To give a rough analogy, if the mobile phone companies had focused only on making land lines mobile, would they have ever invented SMS?

Nurture developer communities. Nokia has a very extensive developer support organization, but I'm not yet seeing the sort of broad-scale evangelism -- developer recruitment -- that an Apple or Microsoft practices. To really win over the best developers, it's not enough to just make their development tasks easy, you have to make sure they have the opportunity to make money. No one's doing that well in the mobile space today. Including Nokia.

The mobile software companies continue to flail around trying to figure out which company can build a business opportunity worth committing to. The opportunity is there for Nokia, but it has to invest in building the market.

Manage Adobe vs. Microsoft vs. Sun. Nokia said it's working very closely with Adobe on Apollo, the new software operating layer derived from Flash and Acrobat. The implication is that Nokia will distribute the mobile version of Apollo on its phones, just as it distributes Flash today.

There are two potential downsides to this. The first is that Adobe might lose -- it's facing strong competition from Microsoft's Silverlight, and apparently from a revamped version of mobile Java from Sun (I'm planning to write about that one in the future). If one of the others wins, Nokia might end up deeply committed to a failing standard.

The second danger is that Adobe might win, leaving Nokia at the mercy of a mobile software standard controlled by a different company. Replacing the Microsoft monopoly with an Adobe monopoly would be delightful for Adobe, but it isn't going to feel like much of a win for Nokia.

Learn to design solutions, not gadgets. I think this is Nokia's biggest challenge. The most popular mobile computing products so far have been integrated hardware-software systems aimed at a single usage: GameBoy, iPod, BlackBerry, and of course the mobile phone itself. Nokia hasn't been notably good at designing this sort of integrated system. In fact, its most prominent effort so far, the nGage, was an epic failure on the scale of the Edsel and the presidential campaign of Michael Dukakis.

But if Nokia really wants to be a mobile computing company, this is a skill it absolutely must learn. It is an incredibly hard change for Nokia, because computing systems design requires a very strong culture of product managers who understand the customer and have dictatorial control over the features and interface of the product. A good computing system is a product of idiosyncratic vision. Collectivist Nokia, with its endless conversations and responsibility fragmented across dozens of teams, is in a terrible situation to pull this off. Frankly, I'm skeptical that they can do it.

But on the other hand, if they can turn a pulp mill into a mobile phone company, would you really bet against them?

Apple's industrial design: The value of a decisive bastard with good taste

There's a splendid article in MIT's Technology Review on The Secret of Apple Design. It confirms a lot of what I've always thought about Apple's industrial design prowess but couldn't put into words.

The article argues that Steve Jobs improved Apple's industrial design not because he's a great designer, but because he protects the work of the company's designers from being watered down by committees and compromises.

In the article, former Apple design director Bob Brunner (himself a fantastic designer) describes what happened at Apple before Jobs' return:

"The businessman wants to create something for everyone, which leads to products that are middle of the road.... It becomes about consensus, and that's why you rarely see the spark of genius."

But the issue's more than just decisiveness vs. bureaucracy. I think Steve Jobs also has very good taste in hardware. I watched the Apple industrial design folks up close for almost ten years, under both Brunner and Jonathan Ive. The groups produced a huge variety of product concepts, ranging from sublime to downright ugly. The bureaucracy pre-Jobs (including, alas, myself) generally picked designs that were nice but prudent -- easy to produce, low risk, not too expensive.

Steve Jobs picks the pretty ones. The ones your average risk-averse business manager would look at and say, "gee, that's nice, but..."

Steve sometimes goes overboard (remember the G4 Cube, a triumph of gorgeous shape over practicality; or the magnesium fetish of the NeXT computer?). And I think his taste in software interfaces isn't as good as his taste in hardware, which is why the current Mac interface is (in my opinion) tarted up like a teenage girl just learning to apply makeup.

But Steve usually chooses very well in hardware -- and even when he does make a mistake, since he's Steve no one can punish him for it.


Steve envy

I've been trying to figure out what lesson this gives to CEOs at other companies who are jealous of Apple's gross margins. The obvious (and useless) advice is that you need to have taste as good as Steve Jobs, and trust your gut. The trouble is that most of us don't have the design taste of Steve, we have the design taste of Larry King.



Yikes.

There is another alternative. Hire someone with good taste, and then back their choices vigorously when everyone else tries to compromise them. Go watch the movie Amadeus. If you can't be a Mozart, be a Salieri -- recognize and use the genius in others.

Mobile phones and navigation: I've seen this movie before

Reuters published an article saying that navigation features are the hot new data function on mobile phones. News.com picked it up, and by now I'm sure it's all over the Internet.

Which is fine, and very exciting. But I keep remembering all the other things that were supposed to be the hot new data functions on mobile phones. Remember mobile video? Wasn't that the cool new thing just a couple of months ago? And e-mail? And MMS? And PIM? And WAP? And so on?

And despite all that effort and all that investment, at a briefing a week ago Nokia said that mobile billings are 84% due to voice, 10% SMS, and everything else accounts for just 6%.

Maybe navigation will be different. It certainly makes intuitive sense to me that navigation should be a hot feature in a mobile device. You need navigation when you're on the go, and that's when you have your mobile device with you. Reuters quotes the market analysis firm Canalys as predicting that the mobile navigation market will grow by about two-thirds this year.

And yet, and yet...

I remember a couple of years ago, Canalys predicted that navigation features in PDAs would be the hot new thing. And they were -- for a couple of quarters, until the market collapsed. We have this weird collective ability to forget all the past disappointments when we see a cool-looking new feature. We forget that cool doesn't sell, and nice doesn't sell. What sells is a comprehensive, simple solution to a compelling need that millions of people have.

I sometimes feel as if all of us watching the mobile market are a bit like Judy Jetson. Remember her? She was the teenage girl in the Jetsons TV show family, the one who always had a new crush every episode. "Ooooh, he's the dreamiest," she would gush. And if poor old George Jetson ever asked what happened to the boy from last week, Judy would roll her eyes and say, "daddy, you're old, you just don't understand."

So maybe I'm getting old.