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Dana Blankenhorn
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Dana Blankenhorn http://www.danablankenhorn.com has been a business journalist since 1978, and a futurist all his life.He warned about the coming Houston oil collapse in 1979. He began making a living on the Internet in 1985. He launched the first e-commerce daily for CMP in 1994, warned of the... More
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Dana Blankenhorn
My blog:
Dana Blankenhorn and the War Against Oil
My book:
Moore's Lore: Better and Better, Faster and Faster
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  • Google is All-In with Motorola Purchase

    A year ago, at ZDNet, I was railing against Google crapware.

    The Samsung “Android” phone I'd gotten from my AT&T store was filled with crapware – programs placed there by AT&T and Samsung. Some seemed to want me to pay for things I knew the phone could do for free. And I couldn't get rid of them. Still can't.

    This is hurting Google's brand, I wrote. When people get an Android phone they expect that Google is standing somewhere behind it. Even if they got it from a carrier, no matter whose brand name is on it, there are brand expectations here the phone's not meeting. What I found on reading other blogs and investigating things further was that, not only was this the case, but there seemed to be little the company could do about it.

    Turned out there was.

    Over the last year Google has steadily taken more-and-more control over Android. They updated my software, in the background, and it's better. They imposed new conditions on OEMs and stopped talking so much about the Open Handset Alliance in favor of the Android brand. Now the main differences I note between my phone and my daughter's iPhone are that my GPS is an energy hog, and her music integrates well with her phone.

    The news peg here is Google's purchase of Motorola Mobility, the shank half of the Motorola ham, for $10.5 billion, which includes a $2.5 billion “breakup fee,” money that will go to Motorola if for any reason the deal isn't consummated

    Much of the early talk about the deal was it was about patents. Motorola has thousands of patents. But as Florian Mueller notes at his excellent blog FossPatents, Motorola is in court against Microsoft, Apple and many trolls over other patents, and Motorola's court cases are not going well.

    No, this is about control. By having a real Google phone, designed by Motorola and produced under Google's direction, in the marketplace, Google sets a bar for every other Android phone maker (think Samsung and HTC). By having its own name and design out in the market, and its own name on Motorola's lawsuits, Google can also face the legal difficulties of its OEMs squarely, like the sibling whose kid brother is getting beat up and finally comes outside.

    “You want a piece of me? You want a piece of The Goog? Well here I am, come and get me.”

    Which they will.

    Apple has been down this road before. Apple innovated the Macintosh but was unable to keep Microsoft out of the market. The low costs of Microsoft's OEMs, and their enormous production capacity, eventually took the PC market from Apple, 20 years ago. People were willing to wait years to get Windows rather than pay-up for the Mac.

    This time the playing field is more level. Apple has learned to work with Chinese OEMs to control its costs. Apple has also accepted changes in the patent system aimed at giving it a long-term monopoly over its key features. And that's the battle that is going to play out over the next few months and years.

    It's a battle Apple will lose. Not because things aren't exactly as Apple wants them, within the patent system. It was beating Motorola in court, it seems to have Samsung on the ropes in Europe, and in the ITC it has a venue that can give a quick, sure remedy – exclusion of imports for products that don't comply with American patent law.

    But it's still going to lose. Because Chinese and Indian courts won't give Apple the monopoly it seeks. Because that's where most of the growth is. And because in the long run consumers won't be denied. Americans aren't going to sit around on their hands for the next 15 years, buying only Apple phones and only Apple tablets, buying apps only from Apple stores, with no choices available because the law won't let it be so, while consumers elsewhere are free to get the latest innovations at lower prices.

    It ain't going to happen. Google doesn't need a new patent law to change the legal environment. It just needs some decisions to go its way. And the protection Apple has in the market isn't written into the patent law, it's in interpretations of that law by courts during the 1990s and the refusal of recent courts to re-examine those decisions.

    Getting from monopoly to competition is going to take money. But it has proven to be a prize worth fighting for. Because once you control mobile Internet clients you control the mobile Internet, which means you have control over the cloud, and the larger computing environment. This market may have started as a sideshow, but it's now the whole ball of wax, Larry Page is smart enough to know it, and he's going to fight for it with everything he's got.

    As the sneaker commercial says, with the Motorola deal Larry Page is all-in. Google is all-in. Fasten your seat belts, it's going to be a bumpy night.

    Aug 16 8:36 AM | Link | 3 Comments
  • The Obama Shock

    Almost 40 years to the day, President Obama has signed his version of the Nixon Shock.

    The Nixon Shock had two elements, one highly controversial but unimportant in the greater scheme of things, one almost ignored but far more vital to growth in the long run.

    What was controversial was the imposition of wage and price controls. What was important was that America abandoned the gold standard.

    What the Shock recognized was that the rising generation's economics were naturally deflationary. Gordon Moore's famous article on the economics of microcomputing was just a few years old then, Intel's first 4004 chip just leaving factories, but the implication was plain. The coming abundance of processing power would create a deflationary spiral if dollars were tied to gold. Nixon headed it off.

    The Obama Shock also came in two parts, one highly controversial, one almost unnoticed. The controversy you know, the debt ceiling deal that pleased no one. The more important act was a doubling of CAFE standards, to 54.5 mpg, by 2025. Auto makers are already rushing to meet them.

    Why does this matter? Why is this such a shock to the economy? Because 70% of our oil use comes in transportation. Rising fuel economy cuts oil imports. It puts a thumb down firmly on energy prices.

    It also redirects research away from pure computing toward manufacturing, for the first time in a generation. The modern equivalent to magazines like Popular Electronics from 1971 are the Maker Faires, where a new generation of tinkerers combines cheap computer technology with mechanics. The most recent one was held last week. In Detroit. 

    Pointing engineers toward new challenges is the essence of leadership. President Kennedy pointed us to the Moon, based on the challenge of the Cold War. This President is pointing us in a more prosaic direction, based on the challenge of energy

    Just as we had rockets in 1961, so we have the basic technologies to meet today's challenge. Hybrids are common. The Toyota Prius already meets the new standard. Fuel cells exist across our electric grid. The electric Chevy Volt and Nissan Leaf are both on our roads. Some Detroit models are already half-way to the new standard, including the Ford Focus and Chevy Cruze

    What the President has done is to unleash innovation. Combine what he's done here with the money to be made in our cheapest renewable energy – efficiency – and with the continuing expansion of solar, wind, geothermal and biomass industries – and you begin to see a way out of our present situation.

    If America can cut its energy bills substantially, that growth will pay down the deficit and unleash a new generation of prosperity. Just what the Nixon Shock did.

    What we learned on the race to the Moon is now well-known. It spurred innovations in computing, in materials, and in the imagination that remain vital today. This new direction, too, will result in the creation of great fortunes, and new technologies, that will put today's problems firmly in the past.

    But please, continue with your pessimism. That was the common attitude in 1971, too.

     



    Disclosure: I am long F.

    Additional disclosure: Don't know what you're going to think of this one, and I would not be offended if you turn it down flat, but it's an important turning point that needs to be defended and placed in context.
    Aug 03 8:24 AM | Link | Comment!
  • Building Integrated Photo Voltaics (BIPV) Products Lack a Sales Channel

    There is yet-another big Building Integrated Photo Voltaic (BIPV)  start-up in the news.

    Pythagoras Solar, an Israeli start-up, says its solar cells, sandwiched in glass, can both lower heating and cooling costs and generate electricity, paying for themselves in 3-4 years.

    Pythagoras is private, but before you go rushing to your broker, waiting on that IPO, remember that BIPV stocks are regulars in the “penny stock” pages. I've covered such BIPV stocks as QSolar elsewhere, in industry publications, but I don't recommend any penny stock, and Seeking Alpha doesn't analyze them.

    I could only find only one pure play BIPV stock that is publicly traded, Ascent Solar. They are not focused on buildings, but on direct-sale applications like the military, autos, space, and custom manufacturing.

    By contrast Konarka Solar
    , whose Power Plastic is an interesting BIPV product, is privately held with $150 million invested.

    Suntech Power of China  has gotten into the BIPV market with solar shingles. But it is telling that Dow Chemical, which announced its PowerHouse solar shingles to great fanfare last year, has yet to release them to the market.

    Why has BIPV failed to launch? Distribution.

    BIPV should be a natural home improvement offering. But Home Depot and Lowe's only sell products that are in scaled manufacturing and generate their own demand. Creating that demand starts with a long sales cycle, high margins, and a lot of hand-holding.

    There are such businesses. They call on architects, on builders, on people who specify what will go into new buildings. It's a long, hard slog. They tend to be small and local.

    Due to the expense involved BIPV sales also depend on financing deals through companies like SolarCity , SunRun, and Trinity Solar.

    There are signs of distribution starting to gell, but it will take a few years to emerge in something you can invest in.

    The relative success of Toll Brothers, which created a “solar home” project called Toll Green with financing from SunRun last year, is one promising sign of what is to come. The growth of retailers such as Solar Home, which sell BIPV along with other energy-saving products, could also create a channel for the sector.

    But here is the bottom line. You can buy stock in a solar panel maker with confidence, knowing that there is a distribution channel available for their product. Until such a channel develops in BIPV, it will be difficult to buy the companies making the stuff.

    No matter how exciting their technology.

     

     

     



    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Additional disclosure: I removed references to HSOL and also the bullet points. The current HSOL is not heavily into BIPV. I also added some other examples of BIPV companies and described how they are reaching the market.
    Jun 27 12:07 PM | Link | Comment!
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