Wednesday, 27 October 2010


SHE REALLY GOT AWAY FROM IT ALL --FOUND HERSELF--ENJOYS LIFE. Got hot in Phoenix---will go to the cool---out there--about a hundred miles--to the Mogollon plateau--(pronounced mug--e--ahn); 7 and 8 thousand feet elevation. RVers learn early that elevation cools at the rate of 4 degrees per thousand feet. (Phoenix is 1 thousand and thus the plateau at 7 will be 24 degrees cooler--on average) Way way out there, I have a friend who long ago went up there in her RV and never came back. I will go find her and give you a report.
There it is--the famous Mogollon rim (edge of the plateau) Zane Gray wrote up there--his novels are sited there often. My friend is up there.
From the rim looking down----aaaahhh--delightfully cool---this spot is a favorite of mine--8000 ft. Stayed two nights.
And then a chilly mist moved in---I'll go find my friend--about 80 miles further in.
Way Way out across this landscape---beyond the city of Show Low--(cute name--interesting story--will share sometimes)
And then Way Way out this gravel road--up there somewhere.
Way, way out this cinder road--hidden among these cedar trees. You are looking at the carcass of a HUGE failed development of 10 square miles and thousands of one and a quarter acre lots, now selling for a song (2-3 thousand) to folks with gumption-----you see, there is no water or sewer and spotty electricity. Perfect for RVers who really don't need either. (in large amounts) folks with gumption come here and thrive---others scurry away.
I discovered that she lives at the end of this trail.
In this cute and efficient house which she designed and largely engineered herself. Water is precious here--she catches what the rains provide. (the amount collected from this roof will surprise you--the formula is .67 gallons per sq ft in a 1 inch rainfall--that amounts to about 300 gallons from this roof in a 1 inch rain.
Here's the front view--note the many windows. Ah but dear readers--prepare yourself for a wonderful surprise---inside is a delightful secret---and to my mind a useful life lesson---I was moved to poetry. I ask you to judge for yourself.
Can you see what she's done? Built her house around her trailer. She sleeps, cooks and bathes in it. Here's the story in rhyme.

Taylor woke one day with an urge to settle
here on the mogollon rim;
A clear certain call from her deep intuition;
not just some idle whim.
Nurtured by her friends and neighbors
she parked her trusty trailer
and stayed all winter long---
damn near freezing Taylor!
Came summer heat and scorching sun
damn near baking Taylor;
So she built a shading roof
above her little trailer.
When winter winds came again
she built a shielding wall
all around the 5th wheel trailer
before the first snow fall.
So now now the trailer's all hemmed in,
Its porch is the living room.
She had a house within a house,
but enclosure brought dark gloom.
So big windows went in that spring
to let the outdoors in.
Now no fairy has a brighter home;
no bear a cozier den.
So the faithful trailer is ensconsed
as core and foundation of a home;
still essential and useful--though
not likely again to roam.
How different is Taylor's way from those
who mire themselves in debt;
paying and paying for 30 years
and they're not homeowners yet.
What really makes Taylor's house unique
is that it rose by evolution.
The old was never cast aside----
just tweaked for new solutions.
God and Taylor chose the same technique
of how to problem solve:
beginning always with what they had--
then to slowly evolve
That's how monkey rose to man:
how microbe became mouse.
We tweak our way to bigger souls
like Taylor built her house.
Meet Taylor---a long time friend and an inspiration. In a long conversation, I asked what you would have asked: What's it like to live alone in the wilderness?--what does it do to your head? ---and heart? Her answers dazzled me! I will share with you a few of her insights.
1. She felt "led" to this spot---invited! Almost instantly desiring to settle here.
2. The sparcity of High desert makes everything an "event"---a flower--an elk---and the nights are stunning. Is in love with big sky, space, sun, quiet!
3. She feels blessed---comfortable---letting life "happen" to her.
4. Moving forward by gently pushing on doors! Some open--She enters--some don't--she moves on.
4. Most are afraid of the quiet--because it strips us of our identity markers.
5. I should not be you! I should work very very hard to be me.
6. Lots of people have the urge for this--- finding a lifestyle that fits their personality---but don't know how to achieve it.
7. The kind of loneliness she feels is the desire to be known.
8. Would like a mate--to know and be known-but realistically assesses the "compound probability". (nice phrase)
9. Personal space requires some protection---not always easy to do tactfully.
10. Living is investment---she chooses to invest in experiences rather than Wall street. The dividend that experiences pay is character. Business is a distraction.
11. "Stuff" does not enduringly entrance----is often nice but not necessary.
12. Happiness is not having what you want but wanting what you have.
13. Says of herself that she is an Introvert--is intuitive and senses oriented.
And much much more. We read together what Kahlil Gibran (The Prophet) had to say about houses. (much recommended reading)
A wonderful interview as you can imagine---I went away with much to think about.

UPDATE!!! 10/24/11---Taylor has decided to sell her cozy estate---(now has electric, septic, internet)the whole shebang--trailer, house, land (2and1/2 acres) and all---to go do something else.  She, like Thoreau---"leaves for as good a reason as she came"--she has many more lives to lead and cannot spare any more time for this one.  If you might be interested e-mail her at
(asking $35,000---will carry a contract)

UPDATE 10/31/11--- Taylor has advised that she has received an acceptable offer and will vacate her little shangralai in two weeks.

Friday, 22 October 2010

What is Samsung thinking?

This is an interesting time for tablet computing fans, with the HP Slate (link) being announced today and a revised B&N Nook (link) supposedly being announced next week. Meanwhile, I'm still coming to the terms with the pricing Samsung announced this week for its upcoming Galaxy Tab.

I had a very strong negative reaction to the price, but I wanted to wait a couple of days to see how I'd feel after I had time to think about it. So now I've thought about it, and here's my reaction:

$600 for a seven-inch tablet?? Are you freaking kidding me? A whole netbook costs about $400. Why does it cost $200 extra just to remove the keyboard?

I don't understand Samsung's strategy. A $400 device is maybe an impulse buy for a rich person at Christmas. A $600 device is a carefully considered investment for most people, especially when all the most enthusiastic tablet buyers have already been siphoned off by Apple.

I got a chance to play with a Galaxy Tab at CTIA. The interface is very cool, but I kept asking myself what I'd actually use it for. What problems does it solve that you can't solve with a smartphone? Samsung appears to assume that Apple has created a market for generic tablets to do, you know, tablet stuff. But has it? Or has it created a market for iPads that seamlessly handle lots of content and unique applications?

And although the design of the Galaxy Tab looks nice, I think the ergonomics of it are questionable. Despite what Samsung's publicity photos show, the device is a bit too wide to hold comfortably even in my dinnerplate-sized hand. To hold it securely, I needed to put my thumb on the front of it. But the margins around the screen are so narrow, and the back case is so slippery, that I felt like I was going to drop it when I put my thumb alongside the screen. The weight of the device also put uncomfortable pressure on my thumb (it's a lever effect). My grip felt more secure and comfortable if I put my thumb on the screen, but then I would accidentally press icons and interfere with the interface.

Although Samsung likes to talk about itself as a leader, in practice it's usually a fast follower -- give it a device to copy and it'll turn out its version faster than just about anyone else on the planet. If the device sells, great. If it doesn't, Samsung just moves on to the next device. My guess is that's what it'll do with the Galaxy Tab.

I'm hoping for better from other new products, although I'm not encouraged by what I'm hearing about the HP device (for one thing, Friday is a terrible day to announce a product because your news coverage gets cut off by the weekend). But I'd like to get my hands on that one before I make up my mind about it.

(Note: This post was modified on 10/22 to correct the announcement date for the HP Slate.)

Tuesday, 19 October 2010


KODGER KING GIVES A PEP TALK. This man speaks for much of the nation. So, beginning here I shall try to do something helpful. What can I do? -- say?---what does he really need? I ask my "good genius" to inspire me.

AND IT DOES----after a time of reflection----and out of nothingness --I get a flash of insight---from the movie "It's a wonderful Life" (remember what happened when James Stewart was ready to fling himself into the river)

Suddenly, I know what to do and say. I put money in his cup---He wakes --I ask permission to photograph --he consents.
I play with him a bit--tell him I can guess his line of work by looking at his hands. He shows me. I guess lumberjack. Not too far off he says---worked in a sawmill.
We briefly traded stories--then I told him I needed some help---that I needed a place to park in Yreka and a place to get some good water. He told me where the truckers sometimes park and where water was available.
I thanked him---told him I couldn't afford expensive RV parks and preferred to boondock. Look at his face and see if you notice a difference from the first photo. I say dignity--for the moment at least --has been restored. Werner Erhard said it best: " all you ever wanted to do was contribute".
RANDY COMMENTS: I've tried an assortment of pep talks ---giving this guy a chance to connect and contribute ---pleased me most. Incidentally, I found the parking spot and the water place in Yreka that he told me about.

Sunday, 17 October 2010

What's really wrong with BlackBerry (and what to do about it)

Just a couple of weeks after Research in Motion turned in a good earnings report, the death watch over the company has resumed, with Business Week magazine running a long article that mocks co-CEO Jim Balsillie (even picking on his duck-emblazoned tie) and saying that RIM needs to learn how to market as well as Apple (link).

Business Week quoted Balsillie at a press briefing:
"There's tremendous turbulence in the ecosystem, of course, in mobility. And that's sort of an obvious thing, but also there is tremendous architectural contention at play. And I'm going to really frame our mobile architectural distinction. We've taken two fundamentally different approaches in their causalness. It's a causal difference, not just nuance. It's not just a causal direction that I'm going to really articulate here -- and feel free to go as deep as you want -- it's really as fundamental as causalness."

OK, he deserves to be mocked for that. But Business Week goes on to conclude that his quote captures the whole dilemma of the company -- technical sophistication coupled with incoherent marketing.

Business Week has joined a large and distinguished group of experts taking jabs at RIM. Morgan Stanley recently downgraded RIM's stock, saying it's going to lose share faster than previously expected (link). Gartner reported that Android had passed BlackBerry to become the most popular smartphone OS in the US (link). And CNET said RIM is about to be kicked out of the enterprise market (link).

I've been getting very tired of the criticisms of RIM, because most of them seem superficial and some are petty. Yes, Android is doing well, but neither RIM nor Apple is giving away its operating system, so it was close to inevitable that Android would eventually get the unit lead. It's the default choice for most smartphone companies, so of course it moves a lot of units in aggregate. But there is room in the market for several mobile platforms to succeed. The companies Android is hurting most are Microsoft, Access, and others that were hoping to sell mobile operating systems.

Yes, RIM's not good at sexy marketing, but it has always been that way. People have been predicting its imminent doom for as long as I can remember (do you recall when Microsoft Exchange was supposed to destroy it?). My guess is that the folks at RIM are shaking their heads at all of the bad press and assuming it will once again blow over in a quarter or two.

I think that would be a serious mistake. In my opinion, RIM is indeed in danger, probably a lot more danger than its executives realize. But I don't agree on the reasons most people are giving for why RIM is in trouble, and I think most of the solutions that are being proposed would make the situation worse, not better.

The fault lies not in our ties, but in our selves. In my opinion, RIM's real problems center around two big issues: its market is saturating, and it seems to have lost the ability to create great products. This is a classic problem that eventually faces most successful computer platforms. The danger is not that RIM is about to collapse, but that it'll drift into in a situation where it can't afford the investments needed to succeed in the future. It's very easy for a company to accidentally cross that line, and very hard to get back across it.

There's a lesson in RIM's situation for every tech company, so it's worthwhile to spend some time understanding what's happening.

How a computing platform dies

To explain RIM's challenges, I have to give you a little tech industry history. When I worked at Apple, I spent a lot of time studying failed computer platforms. I thought that if we understood the failures, we might be able to prevent the same thing from happening to us.

I looked at everything from videogame companies to the early PC pioneers (companies like Commodore and Atari), and I found an interesting pattern in their financial results. The early symptoms of decline in a computing platform were very subtle, and easy for a business executive to rationalize away. By the time the symptoms became obvious, it was usually too late to do anything about them.

The symptoms to watch closely are small declines in two metrics: the rate of growth of sales, and gross profit per unit sold (gross margins). Here's why:

Every computing platform has a natural pool of customers. Some people need or want the platform, and some people don't. Your product spreads through its pool of customers via the traditional "diffusion" process -- early enthusiasts first, late adopters at the end.

It's relatively easy to get good revenue from the early adopters. They seek out innovations like yours, and are willing to pay top dollar for it. As the market for a computer system matures, the early adopters get used up, and the company starts selling to middle adopters who are more price-sensitive. In response to this, the company cuts prices, which results in a big jump in sales. Total revenue goes up, and usually overall profits as well. Everybody in the company feels good.

Time passes, and that middle portion of the market gets consumed. Eventually demand growth starts to drop, and you make another price cut. Sales go up again, sometimes a lot. With revenue rising, you and your investors talk proudly about the benefits of reaching the "mainstream" market.

At Apple, when we hit this point we called our low-cost products the Macintosh Classic and Macintosh LC. At Palm, it was the M100.

What you don't realize at this point is that you're not "reaching the mainstream," you're actually consuming the late adopters. Unfortunately, it's very difficult to tell when you're selling to the late adopters. They don't wear signs. Companies tend to assume that because the adoption curve is drawn as a smooth-sided bell, your demand will tail off at the end as gradually as it built up in the beginning. But that isn't how it works. At the start, you are slowly building up momentum from a base of nothing. That takes years. But by the time you saturate the market you have built up huge sales momentum. You have a strong brand, you have advertising, you have a big distribution channel. You'll gulp through the late adopters really rapidly. The result is that sales continue to grow until they drop suddenly, like a sprinter running off the edge of a cliff.

The chart below illustrates how the process works:

Until you get close to the end, your revenue keeps rising, enabling you to tell yourself that the business is still in good shape. But eventually you reach the dregs of the market, and sales will flatten out, or maybe even start to drop. You cut prices again, but this time they don't increase demand because there are no latent customers left. All the cuts do is reduce further the revenue you get from selling upgrades to your installed base. The combination of price cuts and declining sales produces a surprisingly rapid drop in revenue and profits. If you want to make a profit (which your investors demand), your only choice is to make massive cuts in expenses. Those cuts usually end up eliminating the risky new product ideas that are your only hope of re-igniting demand.

At Apple I called this the platform "death spiral" because once you get into it, the expense cuts and sales declines reinforce each other. It's almost impossible to reverse the process, unless you're Steve Jobs and you get very lucky.

The best way to survive is to stay away from the cliff edge in the first place. But that means you need to be hyper-attentive to small changes in sales growth and gross margins. Which brings us back to RIM's situation.

Dissecting RIM's financials

At the top level, RIM's financials look utterly fantastic:

RIM Revenue and Profit

Fiscal years. Dollars in millions.

Since fiscal 2003 (when it turned profitable), RIM has grown from $500m revenue to over $15 billion. That's 30X growth in eight years. The BlackBerry subscriber base has grown from 500,000 people to about 50 million. Throughout that period, the company's net income has hovered at between 15% and 22% of revenue.

This is one of the most impressive business success stories of the last decade, and most CEOs in any industry would kill to have that sort of results. Considering how much turmoil there is in the smartphone market, RIM's senior managers must feel extremely proud of their success, and more than a bit bewildered that people keep criticizing them.

And that's exactly my point. Looking at the high-level financials can lull you into a false sense of security if you're managing a computing platform. You have to really dig to find the warning signs. That's especially hard to do in RIM's case because the company has several different sources of revenue: device sales, service revenue, and enterprise server revenue. The overall results they report are mashup of all three revenue streams. To understand what's really happening, you have to tease them apart. Here are some key data points.

First, let's look at the total number of BlackBerry subscribers:

Total BlackBerry Subscribers

RIM's fiscal quarters. Units in millions.

Pretty impressive growth. But remember, we're looking for subtle signs of saturation. Let's look at the number of subscribers added per quarter...

Net New Subscribers Per Quarter

RIM's fiscal quarters. Units in millions.

This is where you get the first little twinge of discomfort. Until a year ago, the rate of growth of BlackBerry subscribers was itself increasing every quarter. In other words, RIM added more new subscribers each quarter than it had added in the previous quarter. But for the last four quarters, RIM's subscriber growth has plateaued at around 4.7 million net new subscribers a quarter. The company's still growing, but it looks like the rate of growth may be flattening. That might imply the beginning of saturation.

Next let's look at net new subscribers as a percent of total BlackBerry units sold.

New Subscribers Added Per Unit Sold

RIM's fiscal quarters.

This one's a little disquieting as well. Five years ago, RIM was getting .7 new subscribers for every BlackBerry sold. In other words, most of its sales were to new users. Today, RIM is getting .37 more subscribers per BlackBerry sold, and that figure is at an all-time low. To put it another way, RIM now has to sell more than two and a half devices to get one more subscriber. Either RIM is selling most of its units to its installed base, or it is having to bring in a lot of new customers to replace those who are leaving for other devices. My guess is it's a mix of both.

If you look closely at that chart, you'll notice a curious bump in the line at Q4 of 2009. The percentage of new subscribers went back up all of a sudden. What did RIM do to produce that growth? A look at device gross margins tells you.

Device Gross Margin Percentage

RIM's fiscal quarters.

[Note: RIM does not report separately the gross margins it gets in the devices business, so I had to estimate this number using the company's hardware revenue and the total cost of goods sold across all of its businesses. Most of RIM's total COGS are hardware expenses, but they also include some server costs associated with providing e-mail service. That means my calculation understates RIM's device margins by a bit. But as the company grows, server costs should go down as a percent of overall costs (because you get better economies of scale). So apparent hardware margins should be going up over time. That makes the fact that they're declining all the more ominous.]

RIM increased new subscriptions by substantially cutting the profit it makes per device. What happened is that the BlackBerry Bold, Storm, and Curve all came to market with increased features, replacing older devices that were much cheaper to build. That should have produced only a one-time hit to margins, though -- they should have gone back up as component costs on the new phones declined. Instead, margins have stayed down ever since. Why? Let's look at the what RIM gets paid for each BlackBerry it sells:

RIM's Revenue Per BlackBerry Device Sold

RIM's fiscal quarters. Hardware revenue per unit sold.

This chart shows the average price the carriers pay to RIM per phone, prior to the discount they put on the phone when you sign up for a contract. The line looks pretty flat, and in fact through the middle of fiscal 2009 RIM's price per unit was very stable. Then in Q3, with the introduction of the new devices, RIM gets a temporary spike in revenue per unit. The new phones are selling at a premium. But that goes away in the next two quarters, and then about a year ago, RIM started cutting prices. Today the company gets about $50 less per unit than it usually did in the past.

When you assemble the big picture, it looks like this: To keep growing, RIM has been forced to reduce margins and prices. Despite the cuts, the rate of growth in subscribers appears to have flattened out. And more and more of the sales mix is going to existing users, or user replacement, rather than new users. RIM starts to look like a company that's working harder and harder just to stay in one place.

The picture gets more ominous when you look at some recent surveys of smartphone user satisfaction. In JD Power's 2010 smartphone satisfaction survey, BlackBerry finished near the bottom, with below average ratings in every category except battery life (link). Just three years earlier, as the iPhone was coming to market, BlackBerry had the highest satisfaction ratings in the industry (link). I don't love JD Power's methodology (for reasons that are too long to explain here), but no way should RIM's rating be declining like that.

The low satisfaction is starting to threaten RIM's future sales. In June of this year, Nielsen released some tidbits from a survey of the future purchasing plans of smartphone users (link):

OS Preferences of People Planning to Replace Their Smartphones

The chart shows US smartphone users who were thinking about buying a new device in Q1 of 2010. More than half of the BlackBerry users considering a new smartphone were leaning toward a different OS.

If I were working at RIM, that chart would scare the crap out of me.

The company is by no means dead, but the symptoms of a stalling platform are definitely there. If you work at RIM and are reading this, here's what I want you to understand: Your company's at risk. Your great financials mask that risk, and give you lots of logical-sounding reasons to avoid making the changes that need to be made. RIM is like a 53-year-old man who has high blood pressure and cholesterol but tells himself that he's OK because he can still run a half-marathon. You are indeed fine, right up until you have the heart attack. Then it's too late.

Here's what you need to do:

How to avoid the cliff

To keep a platform viable, you need to focus on two tasks: Keep the customer base loyal, and add adjacent product categories.

Keeping the base loyal. This is transcendently important to a platform company. As your market matures, more and more of your sales will come from replacement devices sold to the installed base. You'll also depend more and more on a base of developers who add value to your products. If you can keep these people happy, you'll have a steady stream of replacement sales that you can build on. It won't be enough to produce the growth that your investors want, but it'll be a great foundation.

On the other hand, if these customers and developers drift away, there's virtually no way you can grow something else fast enough to offset their loss. The trick here is that the supporter base for a computing platform is like a herd of cattle. They move as a group. When the herd is contented, it tends to stay in one place. But if the herd gets restless, even a small disturbance can cause a stampede in which they all run away at once.

For example, this is the factor that HP failed to consider when it bought Palm. The Pre's small base of users and developers was a classic group of restless cattle. When HP bought the company, the first priority should have been to calm those people by promising a renewed commitment to the Pre and follow-on products. Even if HP didn't see smartphones as its long-term future, it should have focused on keeping the developers and users loyal until it had something else for them to buy and develop for. Instead, HP CEO Mark Hurd more or less killed the product line a day after the purchase (link):

HP won't "spend billions of dollars trying to go into the smartphone business; that doesn’t in any way make any sense....We didn’t buy Palm to be in the smartphone business. And I tell people that, but it doesn’t seem to resonate well. We bought it for the IP."

Ooookay, so if you're a Pre customer, do you buy again? Do you tell your friends to buy? If you're a WebOS developer, do you keep writing code while you wait for HP to decide what it'll do with that "IP" it bought?

The answer is, you run for the exit as fast as you can. HP bought a company for a billion dollars and then immediately trashed it.

Back to RIM. Your cattle are restless. If you don't believe me, go look at that Nielsen chart again. Your goal is to keep the cattle content, by feeding them a steady diet of delightful new products that deepen their commitment to the platform. RIM's record in this area is very mixed. There have been a lot of new BlackBerry products announced in the last few years, but most of them seem to be focused on copying things Apple has done rather than finding new ways to delight BlackBerry customers.

Some of the Apple imitation is probably necessary. Apple has turned a lot of features into checkoff items that are now expected from any smartphone -- a better browser, for example. If RIM didn't eventually add those features, the herd would at some point stampede away for sure.

But what I haven't seen from RIM is a vision for deepening the special features that made people bond with BlackBerry in the first place. The personal communication functionality of BlackBerry is about the same now as it was five years ago. Why in God's name was Apple the first North American smartphone company to really push video calling? As the communication beast, RIM should have led that years ago.

Instead, the latest BlackBerry devices feel a bit like an overbuilt ice cream sundae -- the original BlackBerry functionality is at the base more or less unchanged, and a bunch of gooey media toppings have been dumped on top of it. I see sprinkles, fudge, marshmallow, pineapple, whipped cream, a cherry, and a few gummy bears, but no significant improvement to the old, dried-out ice cream at the bottom of the bowl.

Inevitably, RIM can't implement those new media toppings as cleanly and elegantly as Apple did, because its platform wasn't designed for that. So what you get is a BlackBerry that endorses Apple's design direction but fails to fully deliver on it. Maybe that helps keep some BlackBerry users from leaving instantly, but it doesn't give them a positive reason to stay. Rather than playing to win, RIM is playing not to lose, and doing it poorly.

This is especially scary because RIM depends much more than Apple on mobile operators to help drive demand for its products (if you're in the US, ask yourself how many Verizon and AT&T ads you have seen for BlackBerry, versus how many ads you've seen from RIM itself). The operators follow customer interest, they don't create it. If they get the sense that BlackBerry users want to switch, they will be only too happy to facilitate that switch -- especially since they don't have to share service revenue with Android vendors the way they do with RIM.

What RIM should do. RIM need a product vision identifying a few new differentiators for BlackBerry that will resonate well with the busy knowledge workers who are at the core of its installed base. There should be no more than three of these features (because customers can't remember more than three), and they should not be copies of things that Apple is already implementing. RIM should focus on building them deeply into the product, so they are very well integrated with the rest of the device. My nominees are meeting planning, conferencing, and live document sharing.

Other smartphone companies will eventually copy these features, so RIM needs to create a pipeline of development in which it'll bring out another 2-3 new differentiators every 24 months.

Adding adjacent categories. Settling down the installed base is not enough. It's an enormous task, but all it'll do is stabilize the business. It won't produce the growth that investors expect. To get that, RIM needs to eventually add new types of product that expand its market.

Apple is a master at this process. When Steve Jobs came back, Apple had only the Macintosh. It refreshed that product line, securing the customer base. Then it added the iPod, iPhone, and iPad. Each of them targeted Apple's core market of creative, entertainment-loving people, and each of them leveraged Apple's existing software and hardware. This overlap made the new products relatively inexpensive to develop and market -- they could be sold to the same sorts of people, through the same channels, and they reused a lot of technology. Each new product line also tended to drag a few more customers back to the earlier products, so they reinforced each other.

These new products enabled Apple to grow its revenue rapidly without putting pressure on the Macintosh to carry the whole load. Apple could invest enough in the Mac to keep it a stable and very profitable business, while the new products produced the topline growth.

To understand how wickedly efficient Apple's business model is, take a glance at the R&D budgets of RIM and Apple.

Quarterly R&D Spending of Apple and RIM

R&D spending in most recent four quarters. Dollars in millions.

Although Apple has about three times the revenue, RIM's R&D spending is about two-thirds of Apple's. With just a third more money, Apple produces the Macintosh, iPod, iPhone, iPad, Apple TV, iTunes, App Store, custom microprocessors, and a suite of mobile services. RIM is producing a bunch of minute variations on a family of phones, an e-mail server, a new OS, and a suite of mobile services that also has to be individually interfaced to each operator. RIM puts much of its effort into infrastructure that has little or no impact on features that users can see and value.

Now RIM wants to add more product lines. Its first effort will be the PlayBook tablet in 2011. This will be a decisive test of RIM's ability to grow in the future, and so far the signs are worrisome. Unlike Apple's first announcement of the iPhone, the PlayBook announcement didn't show much functionality that looked fundamentally new compared to the competition (in fact, the interface looked to me a lot like a warmed-over version of Palm's WebOS). The pitch was almost all about enabling technology rather than user benefits. When you find yourself talking up the dual-core processor and symmetric multiprocessing in a consumer product, it's a sign of a serious lack of differentiation.

I'd be more hopeful about the prospects for the PlayBook if RIM had done a better job of evolving its BlackBerry products recently. Unfortunately, RIM's latest innovation flagship is the BlackBerry Torch, an overproduced heap of half-integrated features that ranks as one of the most disappointing mobile devices I've seen from a major manufacturer in years.

Yeah, I know there are some people who like the Torch. But there were also people who thought MS-DOS was easy to use.

Burned by the Torch. I recently bought a BlackBerry Torch for my wife, who needed a smartphone to manage work e-mail. We both wanted her to have something simple to use, with a keyboard that made her comfortable. She liked the Torch in the store, so we bought it for her.

The device was a usage nightmare. Even after years of working with touch screen technology, RIM hasn't managed to evolve its user interface to the point where the touch pad and the touch screen work together smoothly. Some functions are easier to perform on touch screen, and others are easier on touch pad, and so the whole interface feels muddled. But by far the more disappointing problem was that the huge number of new applications just added to the phone do not work together properly. I can't even list all of the problems we both had figuring out how to use them, but one vivid example should suffice. My wife entered a lot of contacts directly into the device's contacts app, but didn't bother to include the area code in the phone numbers. The BlackBerry didn't warn her about this.

Then she went to the messaging app and tried to send a text message to our daughter. When she tried to send the message, the app reported that it could not send to a contact without an area code. So she went back to the contacts app and added area codes.

Then she went back to the messaging app and again tried to send a text message. The messaging app reported once again that it could not send a message without an area code. It had apparently made a copy of the data from the contacts app when it was first used, and would not update the copy. So my wife then edited the contact information from within the contacts app (it lets you do that). But when she tried to save the updated contact, the phone responded that it could not accept external changes to the contacts, and deleted the change.

Next, she tried to send a message by typing our daughter's phone number, including area code, directly into the To: portion of a new message. When she tried to send that message, the messaging application did a lookup on its contacts database, changed the phone number back to the version without an area code, and then reported that it could not send the message because the phone number lacked an area code.

Using the BlackBerry Torch is like being trapped in a real-life version of "Waiting for Godot."

I've seen this sort of incoherent design before. It happens when you have several teams working on parts of the device, and you haven't done proper planning up front to make sure the apps will work together well. It is a symptom of an out-of-control development process. The fact that this happened on RIM's flagship product is deeply disturbing. If the same incompetent processes are applied to the PlayBook -- a much more complex product with a lot of new functionality -- it is almost certain to fail.

By the way, we returned the phone.

What RIM should do. To fix this problem, RIM needs to create rigorous up-front planning processes in its software team, with someone who has dictatorial power placed in charge of overall software integration for a device or OS release. Also, the product manager needs to be empowered (actually required) to delay shipment of a product if it's not right. I'm sure someone at RIM knew about the problems in the Torch. The fact that the company went ahead and shipped it is almost as disturbing as the problems themselves.

Rescuing RIM

To sum up, RIM is at risk because its natural market is saturating and many of its customers are considering a switch to other platforms. The company may be able to bumble along in this situation for years before the problem comes to a head, but once a migration away from BlackBerry starts it would be almost impossible to stop. So if the company wants to ensure its survival, it needs to act now. Two steps are needed:

--The BlackBerry line needs to be given a several fundamental, visionary innovations that will give its core customers a reason to stay; and

--The company needs to change its development process to guarantee proper design and integration in all of its products.

Given the time needed to create a new product, these changes will take at least 18 months to bear fruit, probably more like two years. During that time RIM will remain at risk of a platform collapse. What's worse, the company's engineers already have their hands full copying iPhone features, customizing phones for a huge range of operators, and simultaneously creating a new operating system and developing a new version of the current one. The sort of changes I'm suggesting would disrupt that work, forcing the cancellation of some projects and slips in the schedule for others. They would make the problem worse before they make it better. In the meantime, the company would lose serious revenue, and might even miss earnings projections for a quarter or two. The stock's value would be trashed, and there would be calls for firing management.

As the founders of the company, Jim Balsillie and Mike Lazaridis could probably pull this off without losing their jobs. And I know they have the courage to make big changes. But I doubt they can see the need, or especially the urgency. Their current processes and business practices got them to $15 billion in revenue; why should they change now? It's much more prudent to focus on making the numbers for next quarter.

That's probably just what RIM will do. And if it does, that's why the company will probably eventually fail.


[Edit: Since this post is still getting a lot of traffic, I wanted to let you know that I've posted a look at RIM's Q3 FY 2011 financials, with  updated charts and a deeper look at international sales.  I think the situation is both better and worse than I originally believed (link).  And you can see my take on their June 2011 layoff announcement here.]

Sunday, 10 October 2010


KODGER KING ANSWERS THE QUESTION: I SLEEP IN THE SAME PLACE EVERY NIGHT----BUT NOT THE SAME SPACE---- changing that-- very often as you will see. Here's a months' worth of my sleeping places from 9/1/10 to 10/3/10. I hope to illustrate the relative ease of finding free boondocking sites in cities and in the countryside. The big secret to city boondocking is to slip into a spot later at night--get a full nights sleep and move the next morning. --- Only the hours 11pm to 7pm are problematic--the rest of the time RVers may be anywhere they can park. AS I HAVE POETIZED-------"BOONDOCKING IN THE CITY"

Let us travel more boldly,
Range into urban locals,
Dare to camp in the city
Outside campground corrals.

Enjoy the city splendors
And when comes time for dreams,
Slip away from No, No land
Into city seams.

Seams are iffy zones
where oversight is rare.
Sleep a full eight hours,
then move away from there.

Doing the boondocker shuffle.
Moving twice a day.
Living free and easy
In Phoenix or San Jose!

The nights of 9/1-3/10 I slept in the Eugene /Springfield Industrial district. This spot is is a classic "seam" because it borders a string of rent-it garages. I Considered staying at the Nearby Moose Lodge but they raised their rates to $10----too much for boondocking!

The night of 9/4/10 I slept here in a park and ride zone of Springfield, Or.
Posted this note. The trick of deflector notes is to give a plausible explanation why you are parked there---if anyone should object.
For the next two nights 9/5-6/10 I'm cloaked with permission. This is the wonderful Valley River Mall in Eugene, Or. where RVers are generously given 2 nights to enjoy the amenities nearby. The photo does not do justice to this terrific spot---Americas' finest free parking spot.
I always have my mail sent to a small town (getting general delivery at big city post offices is a pain) This time it was Creswell, Oregon. Settled here beside this closed up business for the night. No one disturbed me. Enjoyed a rain in the night.
Spent the day and night of 9/8/10 in the lovely little town of Winchester. A quarter nile away is an RV park asking $20 to boondock. Wouldn't think of paying that.
The night of 9/9 slept at Walmart in Grants Pass, Or. 9/10 at Walmart in Medford, Or. The next two nights I stayed here--A nice quiet spot on the edge of Yreka, Ca. Stayed 2 days (9/11-12/10)exploring the old mining town. Truckers love little niches like this--several came and went during my visit.
Got sleepy and pulled off the Interstate to rest---enjoyed the area and my view so well that I stayed the night of 9/13--will show you--
View from my back window---recognize it---New Agers think it's the most spiritual spot in America----Mt Shasta---once drove nearly to the top--found a cluster of believers camped at road's end. I joined them---heard lots of wonder tales.
Night of 9/14 beside these old railroad coaches in the interesting old sawmill town of McCloud.
9/15 and 16 I stayed right here---near a brake check area for trucks. Was hesitant to go down the hill---too hot down there in Susanville. Got lots of work done just sitting there. Are you persuaded yet that millions of nice free camping places are available---if you're self contained.
My first night in Reno, Nv--- jangled by city clatter---Got off the Interstate and settled in this strip mall---9/17. I have things to do here so I did the Boondocker Shuffle for 3 nights---then was given a spot at the VFW by my friends Jim and Mary--who just happened to be passing through. Stayed through 9/22
Bridgeport, Ca---An interesting and historic town---parked here for the night of 9/23.
Then here--in Bishop, Ca. in the parking lot of K-mart the night of 9/24. Great spot--great view. Bicycled the town.
Then on to the lovely town of Lone Pine, Ca---scenic setting of 500 Western Movies---this is a favorite spot on a quiet street. Engaged the family behind those gates---the heirs of the guy who invented the EKG and other medical devices. Note the view of the mountains. (Night of 9/25.10
And then---and then--I took a disasterous route down into death valley and got trapped in the same way as the unfortunate pioneers who named it. I simply could not climb out the other side--so had to turn south on an obscure back road, barely managing to reach Ridgecrest, Ca for the night of 9/26 and this very hot night in the desert near Ludlow, Ca 9/27---Have learned my lesson--don't come south till late oct. At this point I decided to go get cool---the nearest high ground is Flagstaff, Az---So I went there!
AAAAAhhhhhh-----this is where the cool is----A-1 Mountain Rd outside town---elevation 7,500 ft. That's Humphrey's peak back there--12, 633 ft---highest point in Az. Stayed here a week--9/27--10/3. Hurried south just ahead of that terrible storm you may have read about. Now I'm on the fringe of Buckeye, Az and the weather is fine.
Randy Comments: Where I sleep is of little interest to me and mostly accidental. My business is engaging my environment, whatever and whoever it may be---asking ever better questions of it and reporting any insights to you. This simple list of my nocturnal roosting sites is not the story I wish to tell. I share it because many of you ask--and I hope to persuade the hesitant-- that houseless is not homeless. That it is indeed possible to do as Thoreau instructed: "let the night overtake you everywhere at home." I will back-track and reveal the real story later.

Monday, 4 October 2010


I propose that all the religions of the world be forced to compete on a level playing field. Perhaps a world---weary of religious strife--finally traced the problem to its roots: ---THE INDOCTRINATION OF CHILDREN. What if we finally realized that INDOCTRINATION IS CHILD ABUSE---and we made it Illegal. Parents could still share VALUES with their children but not doctrines. Children would then reach age 12 or so with their minds more open. And when they demonstrated sufficient mental competence and curiosity--- would be allowed to visit the ---------RELIGION WAREHOUSE----------

Kids are gathered outside at eight,
Doors are opened at nine.
They are here to sample religions of the world,
All strung out in a line.

Row upon row---every living faith
Represented in spacious booths.
And every booth has people anxious
to share their"eternal truths."

They have pamphlets and films and all 27
Major "Holy Books"--
The Bible, the Koran, The Bagavad Gita.
Every kid's invited to look.

As they wander up and down the aisles,
Believers of every bent
Urge the children into their booths
Like barkers at a side show tent.

The Christian section has 200 booths,
Each with a different slant
On God, salvation, Jesus and Heaven
That they wish to implant.

There are nine different versions of Islam;
Six different kinds of Jews,
A host of Buddhist sects;
A hundred types of Hindus.

The new age section is replete
With people pushing "spiritual" stuff,
Smiley faced believers in a thousand things,
Like crystals and superstitious fluff.

The American Indians drummed up a crowd
With dancers adorned with feathers
Truly believing that Shamans can heal
And Kachinas can change the weather.

Cults took up a whole wall---
"Gurus" of every stripe--
Dominating tyrants trolling
For the total submission type.

The Atheist booth had scrappy folks,
Dead sure in their conclusion
That religion is the opiate of the people:
A dumb and deadly illusion.

Agnostics had a cheerful booth
With banners above and below.
The upper said: keep an open mind;
The lower said: Nobody Knows!

The Mormons were talking 'bout golden books.
The Quakers pushed peace and hope.
The Amish urged us back to the land.
Catholics said: Obey the Pope.

Back in the corner were the Unitarians;
Of all the churches most odd;
The only church that didn't claim
To have a message from God!

Muslims were a backward lot;
Their religion frozen in time;
Their nations ruled by autocrats;
Their women treated like slime!

Voodoo believers sacrificed chickens;
Spiritualist summoned ghosts;
Urantia folks told of flying saucers;
Tantrics urged sex uppermost.

On and on the religions stretched;
Children came and went until;
In a day or a year, their minds were clear;
Or perhaps just had their fill.

Then back to the world, having chosen
"truths" that suited their taste.
Most took bits from several faiths
With a job of "cut and paste."

Gone was arrogance and dogmatism;
Their study of religion and history,
Lets them tolerate ambiguity;
Embrace the human mystery.

In a few short years, religious wars ceased;
All nations made a truce:
Every civilized person now agrees:

Freedom to choose your religion
Is a universal human right.
Parents stopped laying their "trip" on kids
And the world sleeps better at night.

Sunday, 3 October 2010


Eric Hoffer--wrote a book in the 50's entitled the Passionate State of Mind----about people who live for a cause. In just one day I met the following:
A Jesus truck--I see them fairly often---many like this one engineered for living in. Most carry Biblical carrot and stick messages---God loves you--but if you won't believe Jesus was god, repent of your sins and accept him as your savior--then you will spend eternity in hell.
I poked my camera into a crack in the back to see what was inside. I suspect his mind is organized like his belongings.
A festival was underway downtown--I hurried to catch the flavor. Recognize this guy? None other than the fastest bird in the world--a peregrine falcon.
And a turkey vulture---it excrets antiseptic feces on its feet---keeps its feet germ free. I think raptors are meat eating birds.
The toughest of three dilemmas I considered. See the banner? what they are advocating? I listened while a passionate mind told me her vision for peace in the holy land---basically let the ousted palestinians come back and reclaim what was theirs and live side by side with Israeli settlers--having full voting rights with them---in a one-state solution which includes the west bank and the gaza strip. One big peaceful family. They point to South Africa as proof that it can be done.
They make a strong legal case---but I don't think it would work. The religious and cultural gap is just too great. The Jews are determined to have a distinctly Jewish homeland---can you blame them? The solution I envision is an IMPOSED two states--with borders defined by the UN. I think It is a good thing to have a democratic, civilized nation sitting square in the Muslim uncivilized middle east. An enraging but stimulative irritant like a sand grain in an oyster might provoke the Muslims to moderate their religion, liberate their women, activate positive creativity and build a humane society for themselves.
Here's a really controversial issue. This lady represents a persecuted minority in China ---the Falun Gong --a quasi-religious group numbering perhaps 70 million--mostly Chinese. She wants world pressure brought on the Chinese government to legitimize their practice. Wikipedia has an excellent article on the controversy. I come down on the side of the Chinese government---Falun Gong is one of those wildfire religions that threatens the stability of China and its dominant meaning system. For whatever comfort and therapy it delivers---it still has superstition at its core and it pleases me to see it stamped out. What? You think every religion should be allowed to run its course--seduce whomever it will? Consider that the Japanese saw the insidious danger of Catholicism to their culture and resisted it. The Philipines did not---nor did Mexico.----Now look at the difference. Japan is not crippled by superstition as are the other two. The entire Islamic world is enfeebled, distracted and made crazy by the superstitious belief that God sent the world a Prophet and a holy book detailing how life should be lived. I believe there are times when a state ought to squash a crazy religion. Texas recently considered doing just that to the fundamentalist Mormons in their state---I cheered! Vast numbers can be swallowed up in a wildfire religion--seducing the gullible---brainwashing the children--perpetuating the evil for hundreds of years. I think tomorrow I will post my poetic solution to this problem entitled The Religion Warehouse.
And speaking of crazy---You'll have a hard time believing this one---brace yourselves. A man has emerged---he says out of the godhead----never born---and is appearing at various places around the world---just suddenly appears in a huge crowd---and addresses them in their language---swahili in the picture above--with a message of peace and love. He is the one, his followers say, the world has been waiting for---Christians, Muslims, Buddhist, Hindus etc--all expect a divine being to come to earth and he is it. He is called Maitreya and that page on the right says he appeared in Portland, Or on Jan 4, 1998----19 times altogether he has appeared in the US---says that he will soon announce himself as the expected Messiah.----says that an unusual star will herald his full disclosure to the world.
A Maitreya believer----with charts and signs--She was charming--enthusiastic---on fire with the good news.
Supposedly an authentic photo of the Norway Spiral that appeared Dec 9, 2009
Anybody out there know anything about this?
Other unusual stars recently photographed that may be the looked for sign.
And if we will all just get on board this train--there will be peace in the world.

RANDY RUMINATES: I think my readers get weary of my rants against religion--and I must admit--so do I. There are more interesting subjects to address and I think I will---after tomorrow when I post my solution in the form of a poem.