Amazon's challenge, 'blue packets', disrupting disruption theory…

Plus Microsoft's Cortana headscratcher, the thing about Windows 8, Samsung's family, and more

Android web traffic distribution: Samsung, LG see quarter-over-quarter gains 

Two and a half years after launching its first Kindle Fire tablet, Amazon is expected to unveil its first smartphone on June 18, 2014. Usage statistics point to the company already having made a sizable impact in North America on the strength of its existing tablet offerings, but becoming the market leader will not be quick or easy for the online retailer. Samsung users continue to generate the majority of Android-based Web traffic in North America, and LG recently overtook Amazon to become the second-largest Android traffic source across the continent.

The Blue Packet 

Don't worry, you don't have to sign in to LinkedIn to read it. Rui Carmo is head of department at SAPO, a Portuguese carrier: Once in a while, I get e-mail asking me how the telco industry works. My usual reply is "it is far, far more complex than anything else you could ever imagine", and the comeback (if any) is usually around the lines of "but isn't it just a bunch of servers like the Internet"?

Enough deeply clueless people keep doing this that I thought it worth while to try and describe how a new mobile service is designed, implemented and launched end-to-end. All five (yes, five) years' worth of it. Year five: "The Linux guy eventually leaves the company to start his own internet venture and ends up buying Google five years later."

Samsung restructuring could offer opportunities

The Lee family may have to restructure their holdings in Samsung because of 72-year-old Lee Kun-hee's health problems:

The family's needs seem to be two-fold: to raise money to pay inheritance tax, and to maintain control of the companies while doing so. Their control of the most valuable asset, smartphone leader Samsung Electronics, rests on direct family holdings of just 4.7%, while Samsung Life Insurance has 7.6% and two other affiliated companies hold 5.3%.

Crucially, Samsung Electronics also holds an 11% stake in itself in the form of treasury shares. Under Korean securities law, companies don't have to cancel shares they buy back. These don't have voting rights while they are held by the company, but would if they were transferred, for example, to a holding company. That is a scenario tipped by CLSA analysts and would follow the model of previous Korean conglomerate restructurings.

Investors have agitated for Samsung Electronics to return part of its $60 billion cash hoard. It seems likely that a large portion of such returns would come as buybacks instead of dividends, as adding to the treasury holding would help consolidate ownership. Have a gander at the shareholding structure. It's a doozy. But what sort of meaningless headline is "could offer opportunities"?

The Technium

There is a huge lag between the arrival and our use of something and our complete understanding of it, what its role is and what it means and its effects plus and minus. That gap, even when we speed up, is going to remain. There's still going to be a gap between our placement of it and our acceptance of it. The acceptance comes first, but this is actually important, because I did a study of technology looking at prohibitions, which don't work. Prohibitions are always just postponements. We can't regulate technology by prohibiting it. We have to only regulate it by use. We have to use things in order to steer them or rearrange them or reassign them. We can't manage our technology by not using them, by prohibiting them, by outlawing them.

What the theory of "disruptive innovation" gets wrong 

The theory of disruption is meant to be predictive. On March 10, 2000, Christensen launched a $3.8m Disruptive Growth Fund, which he managed with Neil Eisner, a broker in St. Louis. Christensen drew on his theory to select stocks. Less than a year later, the fund was quietly liquidated: during a stretch of time when the Nasdaq lost 50% of its value, the Disruptive Growth Fund lost 64%.

In 2007, Christensen told Business Week that "the prediction of the theory would be that Apple won't succeed with the iPhone," adding, "History speaks pretty loudly on that." In its first five years, the iPhone generated $150bn of revenue. In the preface to the 2011 edition of "The Innovator's Dilemma," Christensen reports that, since the book's publication, in 1997, "the theory of disruption continues to yield predictions that are quite accurate." This is less because people have used his model to make accurate predictions about things that haven't happened yet than because disruption has been sold as advice, and because much that happened between 1997 and 2011 looks, in retrospect, disruptive.

The precision with which Lepore tears apart the case studies Christensen has used is forensic and unrelenting. It doesn't destroy some part of disruption theory, but it calls a lot of it into question. Definitely a must-read.

Microsoft debating Cortana's possible future on Android and iPhone 

"It's a bit of a head-scratcher for us right now," acknowledged Marcus Ash, a group program manager for Windows Phone, when he was asked about Cortana's possible future on Android and iOS at the SMX Advanced search marketing conference in Seattle today.

For example, a Windows PC user who uses an Android phone could find Cortana on the desktop or tablet to be an incomplete experience if the virtual assistant wasn't able to take into account activity on the phone, and interact with the user via that device.

However, Ash added, "It's interesting to think about the future of these assistants and whether they become a reason to buy into the ecosystem. That is the other tension we have. If you play this out five to ten years, and these assistants become the reason you choose Android or iOS or Windows, then what's our position? Could Cortana be the thing that, as a Windows user, (makes me feel like) I've got to get a Windows phone?"

Thus neatly embodying why you can't be equally a devices and services company. A services company must think cross-platform; a devices company ties services to its own platform.

If you are using Windows 8, I feel sorry for you 

Shaun McGill bought a Windows 8 laptop because his son's school required it:

I have been using a Mac for the past 4 years and a Windows 7 laptop for work, but nothing prepared me for the changes in Windows 8 and the sad news that some things never seem to change.

This laptop came with Windows 8, not 8.1, installed and despite realizing that there is no start button, when I came to try to work the PC without it things immediately became confusing. After some time I realized that I could tap the Desktop tile to get back to familiarity and then I couldn't work out how to find the installed apps. A selection are shown as tiles, but that didn't help until I accidentally swiped from the top of the screen to be greeted with an 'All apps' option at the bottom. Tapping this brings up a disorganized list of apps to choose from, but at least I could pin them to the task bar which offered a minimal shortcut setup for my needs.


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