Apple needs a new product

Steve Jobs used iPod's success to launch the iPhone. If Apple doesn't create a breakthrough product within the next two years, the company could be in trouble.

So far, the iWatch doesn't even register on the trendline.

Predicting smartphone addiction in kids

A study of South Korean elementary school kids has found that stress and lack of self-control are the strongest predictors of the "smartphone" addiction. Although the device to deliver the addiction is the smartphone, the real hooks for the addiction are Social Networking (SNS) and entertainment services (via BBC news).

Since the mobile has become a dominant platform for delivering entertainment services, in a period of two generations we can expect a migration of television advertisement money into online services. The TV and the web are going to go into oblivion like the newsprint. We can also expect that Twitter will not catch up with Facebook or other major SNS'.

Also, it appears that the humanity is running a large-scale Stanford Marshmallow Experiment, dividing kids into those who can exert self–control and those who cannot. 

The first follow-up study, in 1988, showed that "preschool children who delayed gratification longer in the self-imposed delay paradigm, were described more than 10 years later by their parents as adolescents who were significantly more competent."
A second follow-up study, in 1990, showed that the ability to delay gratification also correlated with higher SATscores.^[5]

From an innovation theory perspective, the smartphone represents the Dominant Design, while online services - the Dominant Use.

Lunch Talk: How to Tell Stories with Data

Pulitzer-prize winning journalist and editor of the New York Times’ data journalism website The Upshot, David Leonhardt, shares the tricks of the master storyteller’s trade. In conversation with Google News Lab data editor Simon Rogers, he shows how data is changing the world; and your part in the revolution.



tags: media, lunchtalk, information, trend, data, story,

NY Times picking your friends' noses

"You can pick your friends, you can pick your nose, but you can't pick your friends' noses," so an old saying goes. This notion has become largely obsolete in the age of social networking. For example, when you sign up with your Facebook account on a popular website they typically get not only your public profile, but also your friend list.

Imagine now doing real business, e.g. making a purchase or contacting customer service, using your social networking profile as a login. For the price of the transaction the other party gets access to your entire social graph, which (with a little bit of triangulation through other customer logins) provides an incredible wealth of marketing information. As a result, you give up a large chunk of your privacy for free, without even being aware of it.

We used to think about privacy as a trade-off: you get access to free content by giving up your right to stay anonymous, i.e. providing the content distributor with the information about what kind of content you like to read. If the current trend continues, people will be giving away for free not only their own privacy, but also their friends' privacy too.

tags: trade-off, trend, social, networking, composite actor, privacy, internet

The myopia epidemic among children, continued

Several years ago, I blogged about the myopia epidemic among children. The problem was caused by an increase in the time kids spent staring at their computer screens instead of playing outdoors. The change impacted their peripheral vision and, eventually, resulted in myopia.

I wonder whether the mobile revolution has increased myopia rates further. There several factors that point to it. First, compared with computer screens, smartphones and tablets are even smaller; therefore, they require less peripheral vision. Second, children carry their phones everywhere, increasing the overall screen time. Third, the new touchscreen interface, mobile apps and games make it easier for younger children to use phones and tablets. As a result, they start using technology at an earlier age, which should have a greater impact on their vision over time.

Based on the latest technology developments, we can easily predict that 3D virtual reality devices will also increase our collective screen time. Although it's a speculation on my part, I believe we should start looking for ways to solve the problem before it gets completely out of hand.

tags: health, trend, mobile, innovation, trade-off

Tesla Motors: $415,000,000 equals 112 jobs

According to SF Gate and other news sources, Tesla Motors is expanding its manufacturing operations in California. The company intends to spend $415M on new equipment, which prompted the state government to give Tesla a $34.7M tax break. The number of permanent jobs created is astonishingly low - 112. That is, to create one permanent job, Tesla has to invest almost $4M into new equipment. By contrast, to add a new software engineering job a startup can invest at least 100 times less — $40K for computer equipment, networking, office space, etc.
No wonder, it's much easier to innovation in the software services domain, than build and equip new factories in the US. With the development of robotics, high-tech manufacturing jobs will become quite rare.

See also my 2010 post regarding Andy Grove's article in the NYT.

tags: trend, economics, innovation

Vitamins is a $28B+ placebo industry

Based on multiple medical studies, Annals of Internal Medicine declares the multivitamin industry a fraud:

...we believe that the case is closed— supplementing the diet of well-nourished adults with (most) mineral or vitamin supplements has no clear benefit and might even be harmful. These vitamins should not be used for chronic disease prevention. Enough is enough.

Despite sobering evidence of no benefit or possible harm, use of multivitamin supplements increased among U.S. adults from 30% between 1988 to 1994 to 39% between 2003 to 2006, while overall use of dietary supplements increased from 42% to 53% (9). Longitudinal and secular trends show a steady increase in multivitamin supplement use and a decline in use of some individual supplements, such as β-carotene and vitamin E. The decline in use of β-carotene and vitamin E supplements followed reports of adverse outcomes in lung cancer and all-cause mortality, respectively. In contrast, sales of multivitamins and other supplements have not been affected by major studies with null results, and the U.S. supplement industry continues to grow, reaching $28 billion in annual sales in 2010. Similar trends have been observed in the United Kingdom and in other European countries.

The key notion here is "well-nourished." Since people don't know whether they are well-nourished or not, taking vitamins solves an important problem: it simplifies our efforts to find and stick to the right diet. That is, instead of a complex task to select the right food, we can simply take a vitamin pill to make sure we (our children, parents, and pets) get "the right" nourishment.

When food supplies were scares and of low quality supplementing it with vitamins and minerals was a great innovation. As the food industry caught up with the trend, the need for the supplements disappeared, but the perception of the need did not.

Moreover, the trend spread to pets! When we got our dog, the breeder recommended a whole range of dietary supplements from vitamins to "grass" tablets. Needless to say, that dogs don't need any of that stuff because they, unlike humans and monkeys, produce most vitamins internally. Despite being useless, pet food supplements are extremely popular and profitable. And they serve the same purpose as supplements for humans - generate a placebo effect.

I wonder, when a similar "enough is enough" article is going to be published about organic foods.

tags: control, industry, trend, science, biology, business

Separating self from Facebook

CNet runs a story about people getting tired of Facebook:

A majority of Facebook users, or 69 percent, say they plan to spend the same amount of time on the site this year, but more than a quarter, or 27 percent, say they will spend less time on Facebook this year.

Will Facebook follow the typical boom-to-bust pattern for all new games? Will it be different for LinkedIn and other social networking services?

tags: social, networking, creativity, trend, facebook

Innovation and fertility rates

(WSJ, Feb 2, 2013) Low-fertility societies don't innovate because their incentives for consumption tilt overwhelmingly toward health care. They don't invest aggressively because, with the average age skewing higher, capital shifts to preserving and extending life and then begins drawing down. They cannot sustain social-security programs because they don't have enough workers to pay for the retirees.

 I don't believe this claim because over the last two hundreds of years fertility rates kept falling while innovation rates kept going up. The process of long-term innovation depends on invention development (e.g. science) and  investment. Once the government guarantees retirement benefits, there are fewer incentives to invest in one's own children. The society as a whole has to learn how to invest in "somebody else's" children and how to attract immigrants willing to invest in their own children.

tags: problem, demographics, trend, innovation

Zumable User Interfaces (ZUIs)

The Economist (Jun 2nd 2012. Technology Quarterly Q2, 2012): the prophets of zoom:

Zoomable user interfaces (ZUIs), as they are known, are arriving on the coat-tails of touch-screen gadgets such as the iPhone that have popularised zooming to magnify graphics. With ZUIs (pronounced zoo-ees), information need not be chopped up to fit on uniformly sized slides. Instead, text, images and even video sit on a single, limitless surface and can be viewed at whatever size makes most sense—up close for details, or zoomed out for the big picture.

The system-level transition I was predicting two years ago is beginning to happen.

tags: trend, payload, tool, system, model, example, interface, synthesis

TV vs Social networking

An inforgraphic from VBeat about Americans' social networking habits:

For comparison, Americans on average spend 4hrs 39min a day watching TV, which is more than 20 times greater than on social networking. The biggest difference in these two media activities is the mode of user participation: passive vs active. With TV viewers don't add anything to the content, while social networking works because they actively add content and links. It's easy to see that adding social element to TV viewing can help content providers and advertisers engage their audience and introduce various freemium biz models, similar to Zynga's.
Implications for cloud computing and bandwidth provisioning are going to be significant as well.

tags: media, trend, gaming, source, payload

LunchTalk: (TED) The myths about "third-world"

You've never seen data presented like this. With the drama and urgency of a sportscaster, statistics guru Hans Rosling debunks myths about the so-called "developing world."

link

tags: lunchtalk, education, trend

Quote of the Day: Investing in Globalization.

There’s no way to invest in a world where globalization fails.

The question then becomes what are the best investments that are geared towards good globalization. Facebook is perhaps the purest expression of that I can think of.”

- Peter Thiel.  (quoted from The Facebook Effect, by David Kirkpatrick.)

tags: investment, model, business, trend, constraint, startup

Medicare: Disaster 20 years in the making.

One of the reasons for Medicare going broke these days is an accounting rule adopted twenty years ago. It required corporations to account for post-retirement employee healthcare liabilities. Here's what Warren Buffet's wrote in his 1992 letter to shareholders:

Another major accounting change, whose implementation is required by January 1, 1993, mandates that businesses recognize their present-value liability for post-retirement health benefits.

A CEO didn't need to be a medical expert to know that lengthening life expectancies and soaring health costs would guarantee an insurer a financial battering from such a business.

In health-care, open-ended promises have created open-ended liabilities that in a few cases loom so large as to threaten the global competitiveness of major American industries.

Concerned with open-ended liabilities, CEOs began dropping healthcare retirement benefits for their employees. As a result Medicare got hit with a triple whammy: 1) the rising costs of healthcare; 2) the rising wave of retiring baby-boomers; 3) a drastic reduction in corporate healthcare available for the retirees.

Now twenty years after the accounting change, Medicare is struggling to sustain the demand. Reduced levels of reimbursements lead to doctor bankruptcies:

Jan 5, 2012. CNN -- Doctors in America are harboring an embarrassing secret: Many of them are going broke. This quiet reality, which is spreading nationwide, is claiming a wide range of casualties, including family physicians, cardiologists and oncologists.

Pentz said recent steep 35% to 40% cuts in Medicare reimbursements for key cardiovascular services, such as stress tests and echocardiograms, have taken a substantial toll on revenue. "Our total revenue was down about 9% last year compared to 2010," he said.

Unfortunately, we don't know the extent of the disaster because the federal and state governments are not required to account for unfunded liabilities. The rules of the game they imposed on private businesses in 1993 do not apply to them.

tags: problem, detection, trend, health, business, finance

The second+ dimension of the Internet infinity.

Here's another piece of data confirming the trend that the web (as envisioned by Tim Berners-Lee in the early 1980s) is going away.

December 29, 2011. VBeat - Most interestingly, however, is the switch from browsing to application usage. In the three months prior to this current study, 42.1 percent more people used their browsers to get information, compared to the 41.6 percent that used apps. Now, however, applications have taken the lead by .5 percent. The percentage is small, but shows a significant shift in how people consume information on their mobile devices.

The new devices (touchscreen mobiles and tablets) provide  a richer set of options for user interaction than the good old web browser on PC. The old web is infinite, but linear. That is, you can jump from link to link in one dimension only. [The original web was unidirectional, but Google made tons of money by discovering a way to go back and forth between links.]

On the other hand, applications that take advantage of the touchscreen interface provide a way to explore the depth of information, i.e. zoom in and out of streams of data. It will take time to create high-performance zoomable streams, but the transition is already under way.

tags: system, evoloution, tool, s-curve, trend, mobile, cloud 

$20M investment per job created?

There's an ongoing debate about the causes of the slowdown in productivity of American workers, beginning some time around mid 1970-s. The chart below shows trend vs actual productivity since the post-WW|| recession. (the chart below is from an MIT Tech Review article - click to read.)

The IT productivity paradox is often cited as one of the major reasons.

The productivity paradox (also the Solow computer paradox) is the peculiar observation made in business process analysis that, as more investment is made in information technology, worker productivity may go down instead of up. Before investment in IT became widespread, the expected return on investment in terms of productivity was 3-4%. This average rate developed from the mechanization/automation of the farm and factory sectors. With IT though, the normal return on investment was only 1% from the 1970s to the early 1990s.

Recently, economist Tyler Cowen wrote a book on this topic - The Great Stagnation, which I'm in the process of reading. In the meantime, it's important to note that heavy IT investment does not create a lot of jobs. Here's how Apple's new datacenter looks like from a job creation perspective:

(Nov 24, 2011. Washington Post) - Just off Startown Road, on the edge of town, Apple recently completed a massive $1billion data center to help power its cloud computing products.
Total new full-time jobs running the facility: 50.

A trillion-dollar question would be, What kind of innovation creates local jobs? For some reason, I have this vague association between our times and the times of the 18th century agricultural revolution in England. On one hand, the revolution produced a breakthrough in food production; on the other, it displaced hundreds of thousands of peasants [and their children] who had to move to the cities in search of work. Where would all the displaced factory workers go now? Social networking?

tags: innovation, destruction, niche construction, trend, economics, system

The Brave New China.

(November 23, 2011. VBeat) - Smartphone sales in China for the third quarter of 2011 surpassed U.S. sales, making China the largest smartphone market by volume, reports Strategy Analytics.

The firm’s research found that smartphone shipments reached 23.9 million units in China during Q3, while the U.S. had 23.3 million units shipped.
Nokia leads China’s smartphone market with a share of 28 percent. HTC, on the other hand, leads the US market with 24 percent .

 It is important to note that China is entering a stage in its technological development when its scale  requires new solutions. That is, over the last thirty years, since the introduction of economic reforms, the country could reuse solutions developed elsewhere. Now, they will be increasingly encountering unsolved problems (see e.g. my earlier post about diabetes II in China.) There's no country on the planet that has experience in solving those problems on China's population scale of 1.3 billion people.

In view of that, I believe, over time China will adopt IP laws and enforcement practices similar to those of the US and Europe. The society will have to provide IP protection incentives to inventors and innovators who take on the new problems.

tags: trend, intellectual, property, scale, infrastructure, china

2012-2015: lucky years to have babies in the US.

In his book Outliers, Malcolm Gladwell notes that the generation of Americans born during the Great Depression ( when the birth rate in the US was the lowest on record) did really well economically. They studied at schools and colleges that were less crowded; they got good jobs working for the Baby Boom generation families, and etc. Now, with the Great Recession entering its 5th year, we see a similar birth rate troff:

(Nov 21, 2011. BusinessWeek) - The number of births fell to an estimated 4 million last year, the fewest since 1999, according to National Center for Health Statistics data. American families -- whose finances have been hurt by high unemployment, falling home prices and low pay raises -- lack confidence to plan for “explosions in spending” required by a new child...

By 2015, women in their childbearing years may average 1.75 babies each, a 30-year low, while “ Americans still believe that two or more children is ideal,” said Bradford Wilcox, a sociology professor and director of the National Marriage Project at the University of Virginia in Charlottesville. 

Taking into account that "The annual cost of raising a child ranges between $11,880 and $13,830 for a two-parent family earning $57,600 to $99,730," parents who plan to have kids now will presumably get an immediate hit, but their children will gain a long-term advantage over other age cohorts. Further, housing prices for families with kids will soon be the lowest in a generation, which will also add to the advantage. 

Disruption: everything everywhere all the time.

Disruption has become a meaningless buzzword applied to any new technology to make it sound more solid than the good old "cool."

(November 13, 2011. NYT. Disruptions: The 3-D Printing Free-for-All.) - A recent research paper published by the Institute for the Future in Palo Alto, Calif., titled “The Future of Open Fabrication,” says 3-D printing will be “manufacturing’s Big Bang.” as jobs in manufacturing, many overseas, and jobs shipping products around the globe are replaced by companies setting up 3-D fabrication labs in stores to print objects rather than ship them.

 Let's do a quick reality check. What is the problem the technology is going to solve? Assuming the technology works, is there a large-scale need for making more physical things?

I don't think so. The overwhelming trend is toward creating and consuming virtual rather than physical stuff. Electronic books are killing paper books. Electronic toys are killing physical toys. For example, here's what today's kids want for Christmas:

One generation from now, when the presumed 3D revolution is supposed to take over the world, these kids will be into manipulating 3D virtual objects, rather than printing and throwing them out after they turn out ugly.

Further, there's a lot of research that show people prefer experiences to objects in( see for example, Carter & Gilovich, 2010. The Relative Relativity of Material and Experiential Purchases. DOI: 10.1037/a0017145)

Unlike material possessions, which are typically made to fill a specific, concrete purpose, experiences are often purchased for a variety of different reasons, both abstract and concrete.

 

Transportation cost savings will also be negligent because you'll have to transport raw materials for making the stuff in your home/garage/office. Most likely, 3D printers are going to make a difference in rapid prototyping of new devices or making lawn furniture on demand. Is it going to be a disruption? Maybe for the current prototyping methodologies, but far from a revolution in consumer goods.

Lunch Talk: Jeff Jarvis on privacy vs information tech.

tags: trend, information, social, privacy

 

Eisenstadt (a Gutenberg scholar): the book did not take on its own form until 50 years after it was invented by Gutenberg. Printing was originally called "automatic handwriting." [horseless carriage]