Thursday, September 29, 2011

Purchases Using Tablets Has Surprising Results

Story first appeared in the Wall Street Journal.

Retailers have found an interesting characteristic of consumers who browse their websites using tablets: They're much more likely to pull the trigger on purchases than other online shoppers.
That discovery is making retailers focus on tablets ahead of the all-important holiday season, as the tough economic backdrop puts a premium on what the industry calls "conversion"—making sure the shoppers who show up actually buy something.
Tablets still account for only a small percentage of overall e-commerce, but they are punching above their weight. While the conversion rate—orders divided by total visits—is 3% for shoppers using a traditional PC, it is 4% or 5% for shoppers using tablets, says Sucharita Mulpuru, an analyst at Forrester Research.
Many retailers also report that tablet users place bigger orders—in some cases adding 10% to 20% more to the tab—on average than shoppers using PCs or smartphones. Retailers are trying to take advantage of that trend by tweaking their websites to better accommodate tablets and rolling out catalogs that have been developed for the device.
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The tablet market is still dominated by Apple Inc.'s iPad. Offerings from new entrants including Inc., which is expected to unveil a tablet Wednesday, could further broaden the market. Forrester Research thinks one-third of U.S. adults could own tablets by 2015.
For most retailers, e-commerce is the fastest growing part of their businesses, posting double-digit revenue gains each year even as in-store growth remains muted. Around 3% of the nearly $150 billion U.S. consumers spent online last year came via mobile devices, of which tablets are a rapidly growing component.

Members of the media examined Sony's new Android-based tablet computers. Tablets account for a small percentage of overall e-commerce, but they are punching above their weight.
While only 9% of online shoppers own tablets, their behavior is encouraging for retailers. Consumers tend to spend more time on the Web after buying a tablet, and nearly half shop from the device, according to a survey of more than 2,300 consumers by Forrester. Tablet owners tend to be wealthier, which gives retailers a self-selected audience of their best customers. They may also be encouraged to spend by less tangible attributes: large touchscreens that draw users into the content, and a portability that helps users get more comfortable than when surfing on PCs.
Macy's, teen retailer Abercrombie & Fitch Co. and Gap Inc. all say they are seeing the highest percentage of conversions from shoppers using tablets. The companies wouldn't disclose figures.
Blake McCrossin, a public-relations associate in New York, says he thought shopping would be the last thing he would do on his iPad. The 30-year-old has since used the Apple device to order everything from clothes to a flat-screen television and has already finished most of his Christmas shopping using it. "The visuals and graphics are amazing, and I get caught up in impulse buying.
Shopping network QVC promotes tablet use on-air and through its social media channels. It is also using alternative technologies to Flash on its website to accommodate the iPad, which doesn't support that software.
Mobile commerce accounts for about 3% of QVC's revenue, which last year came to $7.8 billion. Tablets are the fastest growing part of mobile and deliver a higher conversion rate than mobile or PC users.
Macy's, which owns its namesake department store as well as Bloomingdale's, began making its sites compatible with devices that don't support Flash this year. The department store owner is rethinking the "point and click" experience of its website, which like most others was designed on the premise that links would be clicked with an arrow controlled by a mouse rather than by a user's finger, which is more blunt.
Many retailers are finding tablet users prefer to visit their main websites directly through a browser, just as they would from a PC, even though some companies have pumped lots of money into creating specialized sites that would work better with mobile phones' small screens and long load times.
Cosmetics chain Sephora uses the same website for tablets as it does for PCs, says Bridget Dolan, Sephora's vice president of interactive media. Sephora also has a free tablet app. QVC also says more tablet users visit directly through its website than via its apps.
Some retailers are revamping their catalogs in light of tablets, which allow them to add videos, slideshows, how-to demonstrations and 'order' buttons. Sephora dropped its summer catalog for the first time this year and shifted entirely over to tablets in an experiment to see what effect it would have on sales. The company will continue to produce print versions of its other seasonal catalogs.
Sephora has partnered with Google Inc. and online shopping site TheFind, both of which have tablet apps that aggregate catalogs from brands such as Nordstrom Inc., Crate & Barrel, Neiman Marcus and Urban Outfitters Inc. Users can swipe through their favorite catalogs and place orders through the free apps.
Siva Kumar, CEO of TheFind, says the conversion rate on its Catalogue app is about 10% higher than on its website, and average order size is between 10% and 20% higher.
Tablet users on average are spending three times as much time on the catalog app than on the website, he says.Sephora receives as much revenue from tablets as it does through mobile, even though people visit Sephora by smartphone much more often. Sephora's tablet conversion rate and average order size is also higher than PC and mobile.

Thursday, September 15, 2011

Can Best Buy Compete With The Internet?

Story first appeared in the Wall Street Journal.
Investors abandoned Best Buy Co. Tuesday amid new signs its big-box strategy is being undermined by cost-conscious shoppers shifting more of their spending to online rivals.
The world's largest electronics chain reported a 30% drop in quarterly profit and saw its stock decline after saying sales at its U.S. stores open at least 14 months dropped for the fifth-consecutive quarter. However, Used HP Procurve Routers say a slight increase in sales.
Its shares, which reached their lowest level since December 2008 in Tuesday trading, fell 6.5% to $23.35 in 4 p.m. composite trading on the New York Stock Exchange.
While the retailer said it gained market share in smartphones and tablets—the hot growth categories in electronics retailing—those gains fell short of offsetting declines in its old cash cows, sales of televisions and computers.
Best Buy also cut its full-year earnings forecast, saying it expected tough consumer spending trends to continue through the holidays.
Some analysts said investors appear to be losing confidence with what they see as a slow response by management to a growing crisis.
Executives earlier this year set plans to cut the company's big-box square footage by 10% over the next five years as leases expire, but company critics want the retailer to close underperforming stores faster.
Best Buy Chief Executive Brian Dunn said in an interview the company's 1,100 U.S. namesake stores are still an advantage over online-only rivals such as Inc. Roughly 40% of online purchases from Best Buy are picked up by customers in stores, it said during a conference call with analysts.
Mr. Dunn said he understands there is sentiment in the market that they'd like to see him close more stores, but the company's mixture of online and store retailing is the winning scenario for the long haul. He added that there are still things in the physical world that are going to be important: expert advice and the ability to see and touch the latest tablets.
Best Buy became the dominant electronics retailer in America through oversized stores that carried a broad assortment of music and movie discs, televisions and computers, all under one roof. But online competitors now offer vastly greater assortments—without collecting sales taxes in most U.S. states—and movie and music sales have dwindled due to the rise of digital downloads, turning what was once an advantage into a potential liability.
Best Buy has responded by beefing up its online assortment by more than 20,000 extra items this year, and expanding a smaller new store format called Best Buy Mobile that is focused on selling smartphones inside malls, but not Used Adtran Switches. But its signature stores are still struggling to adapt to the changes in the electronics market, and analysts worry many of them have become showroom" for merchandise that consumers wind up purchasing online from competitors such as Amazon.
In addition to concerns its big-box stores may be too large for modern electronics retailing, Best Buy faces questions about its struggling venture into U.K. retailing. Best Buy said Tuesday it remains committed to opening namesake stores in the U.K. despite disappointing early results from a partnership with Carphone Warehouse Group PLC.
Best Buy established its electronics dominance largely by grabbing an outsized market share in lucrative categories such as high-definition televisions and laptop computers. But sales of those products are stagnating, as many consumers are being cautious with new purchases and delaying replacing older models.
Profit for its fiscal second quarter, ended Aug. 27, fell to $177 million, or 47 cents a share, from $254 million, or 60 cents a share, a year earlier. Revenue was up a hair at $11.35 billion.
Meanwhile, Best Buy is facing tough competition for such items as tablets and smartphones, for which the market is significantly more fragmented due to rival stores run by mobile-phone carriers, as well as the retail outlets of Apple Inc.
For example, mobile phones now make up 15% of all electronic sales but are only 5% of Best Buy's sales. However, they have considered increasing sales by selling Used Cisco Catalyst Switches.
Best Buy said it now expects a lower profit this year than it had previously projected. Though the company actually raised its per-share earnings outlook to a range of $3.35 to $3.65, up from $3.30 to $3.55, it was now factoring in the expected benefits of buying back $1.5 billion in stock to reduce shares outstanding.

Technology: IPad Outsells 19-1

Story first appeared in Bloomberg News.

Research In Motion Ltd., depending on its new PlayBook to bolster sales as demand for its BlackBerry phones withers, may have shipped just one of the tablet computers last quarter for every 19 iPads from Apple Inc.

The company, which reports earnings tomorrow, probably sold about 490,000 PlayBooks during the first full quarter of sales, according to a Bloomberg survey of analysts, compared with the 9.25 million iPads shipped last quarter. Analysts cut estimates for full-year PlayBook shipments, to an average of 2.2 million, according to the survey.

RIM overplayed the PlayBook in terms of its sales and prospects,
said Charlie Wolf, an analyst at Needham & Co. in New York. What this really shows is that the company’s prospects will depend on the next generation of BlackBerrys.

When RIM first disclosed plans for a tablet last year, analysts including Tero Kuittinen, then at MKM Partners LLC, said the device had the potential to evolve into a significant new product category.
Yet RIM didn’t get the 7-inch tablet to market until April, a year after the first iPad and behind rivals such as Samsung Electronics Co.
Even then, RIM drew criticism for introducing the PlayBook without dedicated e-mail or instant messaging and a shortage of consumer applications like Netflix Inc. movies.

The company will ship about 1.5 million tablets this year, compared with 39.2 million for Apple and 7 million for Samsung, said Michael Walkley, an analyst at Canaccord Genuity Ltd.

Minneapolis-based Walkley, who has a hold rating on the company said RIM hasn’t given up on the PlayBook, but it’s clearly off to a poor start. That creates huge pressure on the new BlackBerry phones, he said.

Revenue Decline

Last week, Walkley lowered his PlayBook forecast for fiscal 2012 to
1.5 million from 2.2 million, and William Power, an analyst at Robert W Baird & Co., cut his 2012 estimate to 2 million units from 2.45 million. This week, Steven Li, an analyst at Raymond James Ltd., reduced his PlayBook forecast to 2.4 million units from 4 million.

The Waterloo, Ontario-based company will likely report its first revenue decline in nine years when it releases results tomorrow. Sales for the fiscal second quarter will probably decline to $4.53 billion from $4.62 billion, according to a Bloomberg survey of analysts.
Profit may drop to 91 cents a share from $1.46, according to analysts.

New Smartphones

RIM is struggling to compete in the smartphone market against Apple and companies such as Samsung and Motorola Mobility Holdings Inc. that use Google Inc.’s Android operating system. RIM’s share of the global smartphone-software market dropped to 12 percent in the second quarter from 19 percent a year earlier, according to Gartner Inc. In the same period, Apple climbed to 18 percent from 14 percent, and Android rose to 43 percent of the market.

After its last earnings report in June, RIM tumbled 21 percent as the company cut its profit forecast for the year. RIM also unveiled plans to eliminate about 2,000 jobs, or a 10th of its workforce.

RIM slipped 4 cents to $30.13 yesterday in Nasdaq Stock Market trading and has dropped 48 percent this year.

The company is introducing new smartphones to gain back ground against rivals. RIM started selling phones that run on the BlackBerry 7 operating system in the U.S. this month and in Europe last month. The company plans to shift to a new operating system, QNX, with a lineup of phones that co-Chief Executive Officer Mike Lazaridis said will come out in early 2012.

Analysts have mixed impressions of the latest phones. Power, of Robert W Baird, said early sales of the BlackBerry 7 phones are sluggish.
Ehud Gelblum, an analyst at Morgan Stanley, said positive initial reviews may bolster sales.

QNX Prospects

Models like the new touchscreen Bold 9900 are proving popular with corporate users and existing BlackBerry fans, while phones without keyboards like the Torch 9810, aimed at ordinary customers, are selling less well, said Canaccord’s Walkley.

He said consumer-centric retail store checks indicated smartphone customers continue to overwhelmingly choose the iPhone 4 or new Android smartphones.

The real test of RIM’s ability to compete with Apple and Google will come when it introduces the first QNX phones, said Gelblum. Because of how long it took RIM to get the PlayBook on the market, he’s concerned they may be delayed.

Gelblum, who is based in New York and rates RIM equal weight and said BB7 is just a stepping stone to QNX devices, but given RIM’s recent track record, it is difficult to know for certain if these devices ship on time.

Slow sales of RIM’s PlayBook raise the stakes for the next generation of smartphones. Now more than ever, RIM needs a hit to rebound the company's fortunes.

Apple Winning Sales Race

Story first appeared in USA TODAY.
The breathless anticipation swirling around the upcoming iPhone 5 release, and the runaway success of the iPad 2, may make it seem like Apple is entirely focused on its iOS devices these days.
But the company's Mac division is no slouch, either.
According to the latest figures from research firm NPD, MacBooks, Mac Minis and iMacs had a really strong summer, with sales rising 22% in July and August. Based on those figures, Gene Munster — a veteran Apple analyst at Piper Jaffray — released a short note predicting Apple will sell a total of 4.5 million Macs this quarter. (And that's a conservative estimate, based on the notion sales will slow to 16% growth for the quarter overall.)
To put that in perspective, Apple sold 4.1 million Macs during the 2010 holiday quarter — traditionally the strongest time of year. That marks the company's previous one-quarter record.
What's driving all the sales? In part, they represent a roaring start for Lion, the latest version of OS X, which came out in July and is packed with more cool, new features than the average OS X upgrade. On its first day of release, Lion — which is only available online or pre-installed in new Macs — saw an incredible 1 million downloads. That made it more popular than any previous Apple desktop operating system.
Timed to the Lion release, Apple also launched updated versions of the MacBook Air, Mac Mini and Apple Cinema Display. After this the sales of IBM pSeries Servers leveled off.
Things should naturally quiet down a bit in the Mac section of Apple Stores as Lion gets a little longer in the tooth. On the other hand, nobody knows how much foot traffic the iPhone 5 launch will bring into stores next month — or how many customers might pick up a laptop or a Mini while they're there.
But it seems a fair bet that the passing of the baton from Steve Jobs to Tim Cook has not slowed the juggernaut that is Apple — just as we predicted.

Monday, September 12, 2011

Free TV and Movies

Story first appeared on
Not long ago, TV reception depended on how well your rooftop antenna picked up the signal. But now cables and satellites have commandeered our screens. Today, about 87% of U.S. households subscribe to a multi-channel video service, mainly cable or satellite TV.
Thanks to new offerings via the Internet, viewers are increasingly catching their favorite shows free or for a fraction of what their cable company charges. And going online to view TV shows or movies doesn't mean you're stuck watching programs on your computer or tablet screen.
The Apple TV box ($99), for example, streams iTunes, Netflix, YouTube and some sports programming to your TV. Or you may be able to use a video-game console -- such as a Sony Playstation 3, Wii or Xbox 360 -- or a device designed to stream TV shows and movies from the Web to television, such as a Roku box ($60 to $100) or Boxee ($200). Plus, some Blu-ray players and HDTVs have built-in connections for receiving shows online. Using either a cable or a wireless device, you can connect your PC to your TV and view anything that's streaming to your laptop on your big screen. An HDMI cable, for HDTVs, offers the best-quality picture, and you can find a cable for $15 or less. For about $100 to $200, you can buy a wireless device, such as the Warpia StreamHD, to do the same job.
You may already be paying for Netflix or other services that can substitute for cable, and some replacement programming is free. Here's an incentive: Letting go of cable or satellite TV would save the average household about $840 a year.
A new antenna or shows ordered a la carte from the Web may be all you need.
First, find out what you can watch free on local broadcast TV. At, enter your address and other information about your home to see the stations you can likely receive and the kind of antenna you need to access them. You may be able to find an outdoor antenna for $30 to $150, depending on the type; indoor antennas cost $40 or less, but reception may not be as good.
Then check to see whether you can watch your favorite shows free. Hulu has partnerships with many network and cable channels. A lot of prime-time shows appear on Hulu the morning after they air, although you won't find popular shows from premium cable channels. With Hulu's free service, you can typically watch only the five most recent episodes in the current season; the subscription service, Hulu Plus ($7.99 per month), provides access to full seasons and the ability to stream programs to your TV via gaming consoles and other devices. Also explore the Web sites of networks and cable channels to see what's available. Many have partnerships with Hulu to aggregate content.
Fans of Fox TV shows, take note: If you don't pay for participating cable or satellite services, you now must wait eight days after episodes air before you can watch them free with Hulu's regular service or at; Hulu Plus subscribers can watch them the next day. More networks may follow Fox's lead as they try to boost revenue and ratings.
Some services offer TV shows to rent or buy. With iTunes, you can rent single episodes for 99 cents, and Amazon Instant Video sells discounted episodes if you sign up for a TV pass. Full seasons of shows are also available for purchase. These services may be most useful if you've missed most of a current season and want to catch up, if you'd like to buy previous seasons of shows, or if you prefer to own episodes so that you can watch them repeatedly. Otherwise, find out whether you can view new episodes free on Hulu or on the network's Web site.
Ditch the premium channels and stream or download the latest blockbusters.
Some services allow you to stream the newest movies. Vudu, for example, has a wide selection of high-definition movies available to stream the day they are released on Blu-ray. (You can also watch Vudu movies at Amazon Instant Video, CinemaNow, iTunes and Zune also stream new movies that you can watch on your computer or TV. Most of the services also offer a selection of movies (and TV shows) in HD, usually for an additional price. You may not be able to watch HD programming in all formats. Amazon Instant Video, for example, currently streams HD movies to your TV through compatible devices, but not to your computer.
Many online services limit the amount of time you have to watch a rental to one to two days after you begin to play it. Netflix, however, lets you keep discs as long as you wish, and its streaming content is available to view anytime. Netflix is getting heat from customers for changing its pricing model, charging separately for disc-rental and streaming subscriptions. But if you watch several movies in a month, a subscription service could still save you money. If you're primarily interested in newer, popular movies, stick with disc rental. If you'd rather browse for less-current movies, documentaries and TV shows, Netflix's streaming service has a broad selection.
You can search elsewhere for lesser-known or older movies at a discount. Look for 99-cent movie specials from CinemaNow and iTunes. Vudu offers a different 99-cent special every day, and you can choose from thousands of movies to rent for $2 for two nights. Amazon Instant Video has special deals on movies and TV shows, and it compiles movies into price categories. Recently, for example, the first six movies in the Harry Potter series were available to rent for $2.99 each. Hulu has a collection of free movies and documentaries but no new releases.
Willing to get up from the couch? Aside from visiting a standard movie-rental store, you can go to Redbox or Blockbuster Express kiosks to rent new movies on DVD or Blu-ray for $3 or less per night. And renting films from the local library is free.
It's not as easy for rabid fans to watch their favorite teams without cable.
Depending on which sports and teams interest you, you may be able to catch games you want to see free. Fan of the home team? Local broadcast TV may carry most of the games, depending on whether blackout policies prohibit coverage in local markets. (The National Football League, for example, doesn't allow games to be broadcast locally unless they sell out.) streams live broadcasts of professional baseball, basketball, soccer, golf and tennis, as well as college football and basketball. You can stream content to an Xbox 360 gaming console and watch it on your TV, but you must have an Xbox Live Gold membership, which is $9.99 per month or $59.99 per year. (Ditto for streaming Netflix content to your TV with the Xbox 360.)
Some sports leagues, including Major League Baseball, the National Basketball Association and the National Hockey League, offer packages that stream out-of-market games. So if you're a Los Angeles Dodgers fan living in New York City, you can catch your team's games with (depending on blackout rules). NHL GameCenter Live and NBA League Pass Broadband allow subscribers to watch up to 40 out-of-market games per week.
If you want to watch all the NFL games, you have to buy DirecTV's NFL Sunday Ticket package ($335) -- available only if you're a DirecTV customer. (One exception: If you can't get DirecTV -- say, because your condo prevents you from using a satellite dish -- DirecTV allows you to buy Sunday Ticket and stream to your computer without subscribing to a TV package.)
You'll need a fast connection.
Enter your address at to compare prices and data speeds for broadband Internet services available in your area. A tool on the site tests the speed of your current Internet connection. The average bill for Internet service from cable and satellite companies is about $47 a month, but you may find that your current service is still the best deal.
Streaming quality increases with the amount of bandwidth you have. Some services list minimum requirements to stream video. Vudu, for example, suggests a connection speed of at least 1 megabit per second for standard-definition movies (480p), 2.25 Mbps for HD (720p) and 4.5 Mbps for HDX movies (1080p). Netflix automatically chooses the level of video quality you'll stream based on your connection speed.


Story first appeared on ABC News.
When HP announced its most recent quarterly financial results, the company had some shocking news: it would no longer offer its recently released tablet, the Touchpad. HP followed up this unexpected announcement with a closeout sale, with prices at many retailers initially slashed to a mere $99 -- one fifth of the price of the popular iPad 2 or Samsung Galaxy Tab 10.1. Those promotions spurred such demand for the device that it can now be very hard to find.
Of course, many buyers were no doubt opportunists looking to resell at a higher price. If you happen to come across one, though, it may be worth buying and keeping.
The Touchpad's dimensions are very close to those of the original iPad. Unlike the wide screens on many Android tablets, the dimensions of Touchpad's 9.7-inch screen are more like those of a photo. In fact, the Touchpad's controls and jacks -- including volume, power, and the microUSB charging and transfer port -- are arranged so similarly to those of the iPad that some cases designed for the original iPad may fit the HP device very well.
(The Touchpad is significantly thicker than the iPad 2 and lacks the iPad 2's rear-facing camera. That said, it does have a front-facing camera for video chat, as well as tightly integrated support for the popular Skype service.)
But a big part of the story is webOS, the Touchpad's operating system, which made its debut with the Palm Pre and became part of HP when the company purchased Palm about a year ago. The larger screen really allows webOS to perform well -- particularly its innovative system of managing different on-screen cards that can be grouped to keep parts of related tasks together. For example, if you're a singer using a Touchpad rehearse music, you can have several sheets open at once, alongside a media player screen the plays music tracks, so you can hear how a song should sound as you read the music.
Another Touchpad benefit is Just Type, which lets you search a wide range of Web sites and information on the tablet just by tapping an area of the screen and starting to type. The Touchpad also boasts great sound, courtesy of its stereo speakers and Beats Audio interface for headphones. That should come in handy when watching TV shows and movies, a key way consumers use tablets according to the Broadband Video survey by NPD Connected Intelligence.
Unfortunately, while the Touchpad has solid Web and email apps, only a few hundred third-party applications take advantage of the product today, and the system can get bogged down and present messages about having too many cards open. Like Palm before it, HP has had limited success in wooing developers attracted to the high volumes of the iPad and the promise of sleek Android-based competitors.
Making matters worse, HP compounded its problems before the Touchpad's release by changing a key method for developing webOS applications. Now many apps created for older devices simply won't run on the Touchpad, and it may take some time for even wiling developers to come up to speed with the new system. HP says it will continue to encourage developers to create webOS programs, but it will be an even steeper uphill climb than it has in the past, since there is now so much doubt hanging over the webOS operating system.
Even so, HP did offer a number of nifty accessories in its Touchpad lineup, including a custom Bluetooth keyboard and a Touchstone wireless charging dock. The dock allows you to charge the tablet's battery just by placing it against a flat stand, and the tablet can display a clock or photos as its battery refills. If you can make do with the basics of tablet apps while hoping that HP will be able to finally fill out the Touchpad's app gap, you'll enjoy an elegant if occasionally balky tablet experience.

Wednesday, September 7, 2011

Farmers’ Almanac Still Used

Story first appeared in USA TODAY.
The Farmers' Almanac has a hole punched in the corner, made for hanging it on a hook in the outhouse "library" in the olden days. These days, though, there are some higher-tech options, including social networks, cellphones and e-readers used for predicting when you should do fall lawn care.
Known for forecasts that use an old-fashioned formula, the almanac now has a mobile website for smartphones and nearly 6,000 followers on Twitter. More than 30,000 people "like" the publication's Facebook page. By year's end there'll be software applications for Kindle, Nook and iPad.
Karen Shackles, of Dillon, Colo., follows the almanac on Twitter and Facebook, checks its website and receives its email newsletter. She likes the folksy style of the almanac and appreciates its embrace of technology. She and her husband use the information for their snow-plowing business.
She said they try to reach out to see who is giving some long-range forecasts and then they go through them all and put them together and come up with what we might expect for the winter, and the Farmers' Almanac is one of the best sources for long-range forecasts, which is used by those doing fall lawn maintenance.
The latest version of the annually updated almanac, released this week, is predicting stormier-than-usual weather this winter from the Middle Atlantic to New England. Its reclusive weather prognosticator, who works under the pseudonym Caleb Weatherbee, sums it up as a winter of "Clime and Punishment."
Editor Peter Geiger said this one is definitely wet, and definitely stormy, and depending upon where you are, it's going to be either snow or rain, leading farmers to purchase new ag tires.
Elsewhere, the weather formula dating to the 1800s suggests it'll be colder than usual in the Upper Midwest and wetter than usual in the Pacific Northwest.

Tuesday, September 6, 2011

Are PCs Dead?

Story first appeared in USA TODAY.
Steve Jobs' bombshell resignation as CEO. Hewlett-Packard's abdication of its multibillion-dollar PC group. Google's $12.5 billion purchase of Motorola Mobility. Dell's wobbly sales forecast.
The whipsaw sequence of recent events in the technology industry highlighted what many are calling the rise of mobility and the marginalization of the PC. Meteoric spikes in the sale of smartphones and tablets are merely hastening the diminished status of the traditional desktop PC, whose sales have flattened the past few years with little relief in sight. This has great benefits for Used HP Blade Servers.
The shift from PCs to mobile devices and so-called cloud-based computing has sent ripples throughout the high-tech industry, uprooting HP's business strategy and propelling a Google wireless partnership that seemed unthinkable weeks ago.
Google Chairman Eric Schmidt put it bluntly last week at a cloud conference here: He said tech had exhausted the limits of the PC as a platform, and the future would center on mobile devices.
Absent Jobs' daily wizardry and exacting standards, many now openly question whether even Apple can maintain its innovative ways and marketing guile several years from now, further jeopardizing its own PC sales and inflicting more damage on an-already reeling PC industry.
PC's waning dominance
Certainly the PC isn't necessarily going the way of the dinosaur, pay phones and space shuttle missions. But "personal computer" isn't necessarily the first thing most people think of when they talk computers. For many, it's iPhone, Android phone, iPad, Kindle — even BlackBerry.
Mark Dean, an IBM veteran who helped build the first PC 30 years ago, recently wrote that when he helped design the PC, he didn't think he would live long enough to witness its decline on his blog. But, while PCs will continue to be much-used devices, they're no longer at the leading edge of computing.
The social revolution is driving a paradigm shift in hardware and software, says CEO Marc Benioff, who has predicted the end of the PC for years. HP was the first to go, and others will if they don't keep up with changes, he added.
The rise of software and cloud computing have paralleled the waning dominance of the PC and contributed mightily to its current state, say venture capitalists and tech executives. Kids, in particular, are eschewing desktop PCs and laptops for smartphones and iPads to play games, use e-mail and perform other tasks that do not require large screens.
Pat Richards, a former IBM executive that worked with IBM Memory, is now chief technology officer of SCIenergy, an energy-management software company, says the PC device has evolved in terms of size, shape, use and ubiquity, and there is no doubt software and apps are a huge part of that by letting consumers perform computing tasks everywhere at any time.
He says we are moving from the general-purpose PC to task-specific devices. He adds that the iPad can do a lot of what a PC does, and, increasingly, TV screens are replacing computer screens.
Kevin Spain, general partner at Emergence Capital Partners, which has invested in and Yammer, a social-networking service for companies says Cloud-based services eliminate the need for heavy local software.
And, despite its formidable stronghold at businesses, there are signs that the Microsoft Windows monopoly is "cracking," says Ben Horowitz, co-founder and general partner at venture-capital firm Andreessen Horowitz.
The massive move to mobile devices and tablets is reflected in worldwide sales. Market researcher Gartner says sales of smartphones will soar 56%, to 467.6 million, this year. Tablet sales will grow nearly four times, to 69.8 million this year, Gartner says.
Worldwide PC shipments, meanwhile, are expected to edge up 9%, to 383.6 million this year, Gartner says.
As PC shipments slacken, so have sales of the peripherals that work with them. U.S. consumer sales of printers and keyboards/mice are flat to slightly up, while those for monitors are flat or slightly declining, says researcher The NPD Group. Intel, meanwhile, increasingly is going mobile. Though it builds chips that power 80% of the world's PCs, it cannot escape the inevitability of the smartphone age.
HP's cautionary tale
The jump to mobile devices, especially outside the U.S., happened so fast that it caught many flat-footed. The immolation of HP, the world's No.1 PC maker, is Exhibit A.
The original garage start-up's abdication of the PC business is the latest blow to an industry reeling from paper-thin margins and a massive migration to mobile computing.
Just a year ago, HP was inhaling lesser rivals such as 3Par and ArcSight and posting sterling financial numbers. Today, it's contemplating whether to sell or spin off its PC division, which could mean more than one-third of its 300,000 employees might be working for someone else soon. With less new sales the sales of Used HP Procurve Routers increases.
HP's decision to distance itself from the PC business reflects CEO Leo Apotheker's desire to expand the company into software and services that help customers deliver computing over the Internet, via the so-called cloud.
Its challenges are underscored by lackluster quarterly results and dim prospects for the near future. HP's about-face echoes a plan laid out by IBM CEO Sam Palmisano in 2005. Then, IBM sold its PC business to Lenovo to focus on services and software. This drove up sales in Used IBM Storage Arrays.
Not dead yet
Or is the PC era — whose roots stretch back 30 years — not dead but merely changing in size and shape?
The post-PC era, if that's the right terminology, is essentially a new mix of desktop PCs and laptops, with smartphones and tablets thrown in. Analysts believe hand-held devices, which are selling like digital hotcakes, are new must-have "addictive" markets and that the PC will continue to rule workplaces and have a place in the home.
Mark Anderson, publisher of Strategic News Service, one of the longest-running tech newsletters, says the PC is not dead. Its paid subscribers include tech executives such as Microsoft CEO Steve Ballmer, Oracle co-president Mark Hurd and Dell CEO Michael Dell.
Anderson says two things are happening: There has been an explosion in consumer devices for watching a movie, reading a book, playing games, looking at photos, and these devices that Steve Jobs incorrectly calls post-PC are mobility devices and carry-alongs, but they have nothing to do with personal computing.
He says the recession impacted PC sales more than anything else, because corporations and government agencies cut back on purchases, and consumers saved their money during a down economy. That means more people are re-purposing old equipment and looking for Used HP Server Racks.
Gartner analyst Michael Gartenberg says tablets such as iPad and Samsung's Galaxy won't displace PCs but will increasingly be used as a second or third device for consumers and business users.
A worldwide installed base of 1.2 billion Windows-based PCs is proof of the PC's relevance, says an analyst at market researcher The NPD Group.
By comparison, Gartner predicts an astounding 1 billion smartphones will be sold in 2014, about double that of PCs in the same year.
Former Microsoft executive Paul Maritz envisions consumers getting mountains of information from whatever device or cloud-based application is best for them.
He says we inexorably are shifting from a device-centric world to an information-centric world.
He added that an individual's data will determine what devices look like, rather than the other way around, because it will outlive any particular piece of hardware where it may reside.
Hardware — whether a desktop PC or tiny smartphone — will always be necessary to encase data, says Sandy Kurtzig, the former Ask CEO who came out of retirement to launch cloud computing-based company Kenandy last week.
Reinventing an industry
History is littered with dead industries that were victims of new ideas or new business models, says Michael Lenox, professor at the University of Virginia's Darden School of Business. In the case of diminished industries, survivors must reinvent themselves. For example, we still have mainframe (computers); they just have a new role. The same will happen with PCs. They may end up being used for PowerPoint presentations. Some have been searching frantically for Used HP Procurve Switches.
Lest anyone else dismiss the PC as an endangered species, consider speculation that Oracle is sniffing at HP's PC division. Even Microsoft has been mentioned as a possible suitor for HP.
Analyst Anderson says HP's situation is unrelated to the health of PC sales. Adding that Lenovo just announced great numbers.
The Hong Kong-based PC maker, benefiting from low-manufacturing costs and government contracts in China, announced $5.8 billion in third-quarter sales.
Microsoft's role
And Microsoft is a multibillion-dollar testament to the power of the PC market. Some 31% of its nearly $70 billion in fiscal year 2011 revenue came from Windows Operating System-related products and services. The Windows OS is still used in more than 90% of the world's PCs, and Microsoft plans to roll out 75 retail outlets called Microsoft Stores in the near future.
Microsoft co-founder Bill Gates said in a 1999 opinion piece in Newsweek, that they prefer to think of this as a PC-plus era that will be just as revolutionary. He added that it will take the PC's power and make it available almost anywhere, on devices that haven't yet been dreamed up, including those that may use a Dell Poweredge Server.
Microsoft still adheres to that credo.