News, — December 30, 2011 10:34 — 0 Comments
From Microsoft to Android, from Nokia to RIM to Samsung, past the hackers and breakins, to the death sentence on Flash and the rise of HTML5, the continuing death of privacy and patents everywhere – it’s been quite a year. Charles Arthur looks back
In retrospect, 2011 was a year of enormous change in the computing and internet industry – although it was one in which the ground was laid, rather than coming immediately to fruition.
• the ascendance of the ARM chip architecture, and Microsoft’s
• the ascendance of Android, and smartphones
• Samsung’s rise to prominence
• the humbling of Nokia and the crushing of RIM
• the destruction of security and online trust
• the death of Flash and the rise of HMTL5
• the (continued) erosion of privacy
• the intrusion of patents
Into Microsoft’s ARMs
It opened with the Consumer Electronics Show, and on everyone’s lips was just one question: which of the dozens of tablets being announced (and in some cases shown off) would overtake Apple in this intriguing, fast-growingmarket? “Honeycomb”, the 3.0 version of Android, was wafted under our noses by Motorola (and promised but not shown by Asus), while RIM briefly showed the PlayBook, with its promise of Flash playback – the place the iPad would never go.
Then Microsoft leapt into CES and dropped a stone whose ripples will spread for years to come. The next version of Windows wouldn’t only run on Intel chips; it would also run on the ARM architecture used in smartphones, as well as in the iPad and every othernon-Windows tablet out there. The idea of tablets running Windows Phone (then only three months old) was simply not countenanced: Microsoft was going to get Windows onto tablets. Why ARM? Because itslow-power characteristics mean that you get better battery life. Try as it might – and it has tried plenty – Intel’s performance per watt has simply never matched ARM’s.
For Microsoft, seeing the way that the market is shifting – with PC sales shrinking in the west, its traditional market – tablets are an important bridge to the future. The demonstration at CES laid the groundwork for the next version of Windows, which we’ll see in 2012.
Microsoft then has a thin line to tread: if Windows 8 on the traditional Intel desktop form factor is like Windows 7, why upgrade? If Windows 8 on a tablet has both the same licence price as Windows on the desktop and a curated app store (the former is unknown, the latter has been announced) then will people want it? And how will tablet makers be able to undercut Apple with comparable equipment if they’re paying a Windows licence fee?
Despite everything we saw at CES (where Apple didn’t exhibit), the iPad is finishing the year with about 60% of the market, with some Chinese companies withdrawing from the tablet market altogether because it just isn’t profitable if you’re not selling iPads.
Taken together, 2010 and 2011 have been the years of fastest growth ever in the smartphone market, at 72% and 50% respectively. In a world where 8.1 billion people have mobile phones, and mobile connections are outnumbering fixed ones, having a significant share of the mobile market is important.
During those two years, Android went from being 9.6% of smartphones sold to 52% – while the volume of smartphones being sold tripled. That means it was far more dominant at the end of the period than the beginning; Andy Rubin of Google tweeted that activations were now running at 700,000 per day (though an analysis by Horace Dediu of Asymco suggests that Google cherrypicks the activation numbers for peak periods). But still, there seem to be between 224m and 253m Android devices out there.
The reality is that it’s Android which is driving the smartphone revolution. Be in no doubt that that revolution is a good thing: bringing the internet to everyone across the globe, so that they can tell their stories, or get help, can only be positive. Look no further than the Arab Spring, and the way that Syrian activists are able to get their story out by filming and uploading from their phones, for the proof.
Among the rivals, while Apple has had blowout quarters (becoming the largest smartphone vendor both in revenues and shipment in the second quarter, only to be overtaken by Samsung in the third), the sheer tide of Android phones is overwhelming it along with all other competitors. So far Apple has shown no sign of wanting to compete directly on price at the low end, letting older models such as the iPhone 3GS serve to fill gaps in its offering.
It’s nothing like its approach to the music player market, when it constantly refreshed the iPod lineup, in different sizes and prices. But the smartphone market is not like the iPod market (or the tablet market): it’s divided among many players, and none has more than about 25% of the sector. That makes it prone to sudden shifts when one company or another gets a competitive advantage.
The Korean company has grasped the opportunity offered by Android with both hands and made the most of it. It was the first to react to the iPad with an Android tablet, the 7in Galaxy Tab (remember?). That didn’t sell, so it ditched it and moved to a larger version, while its smartphone division worked overtime to produce more and better phones.
Samsung’s advantage isn’t just that it’s big: it’s also inventive, and can get a lot of what it wants donein-housebecause it makes everything from NAND flash and DRAM chips to touchscreen panels to flatscreen TVs. The only thing it doesn’t make is the software (apart from its Bada mobile OS, which is being quietly deemphasised.)
2011 was the year that Samsung discovered it could rule in the way that it wants to: it is reckoned to have become the largest smartphone vendor by shipments and revenue in the third quarter. I say “reckoned”, because it didn’t release any precise figures for revenues or shipments. (Contrast that to Apple, RIM or Nokia, which provide hefty amounts of detail about where their business comes from.)
Will analysts start querying its financial and shipment figures (which presently they have to guess at)? Will Samsung provide more clarity about its financial workings, or does that go against the rules of the chaebol?
Crushed by circumstance: Nokia and RIM
On arriving at Nokia from Microsoft in September 2010, Stephen Elop found a company whose strategy was in tatters. Symbian, the mobile OS that apparently dominated the world smartphone market, was making no impression in the US, the biggest smartphone market, and dwindling in Europe. Worse, it wasn’t suitable for the touchscreen operation that people were demanding.
Elop decided that Symbian had to go; it wasn’t future-proof. But the parachute that the Nokia team had been relying on, Meego, wasn’t ready either, and he could see it wouldn’t be ready in time. After some rapid negotiations with Google and Microsoft, he convinced his former employers to hand over $1bn for marketing and let Nokia tweak Windows Phone to its taste. The announcement came in February, and had been expected (helped by a tweet from Google’s Vic Gundotra – who’d been in on the negotiations – that “two turkeys don’t make an eagle”.
Nokia didn’t do well as a result. Its travails have beenwell-reported: Symbian’s market share has gone fromAndroid-ishlevels to an also-ran. Its Lumia 800 may or may not have sold well (the lack of any hard figures suggests there’s nothing stunning happening). A company that once ruled the mobile world is now under attack on all fronts – in China, its former stronghold (where cheapwhite-labelphones are taking off) and in Europe.
Yet Nokia has determination; there’s a sort of corporate culture that drives the company onwards towards the light. Elop made tough decisions which have killed projects and moved thousands of jobs out of the company, but Nokia has snapped to it: the Lumia is a wonderful piece of hardware, as nice to hold as any phone produced in the entire year.
One can’t help but contrast that with RIM, which began the year promising that it would have a 4G version of the PlayBook which would connect to the Sprint network, yet when it arrived it underwhelmed: there was no inbuilt email or calendar functionality, and its lack of apps made Android’s Honeycomb lookwell-stocked– which it wasn’t.
RIM wasn’t helped by the late arrival of new phones, and the fact that it had completely overestimated how the PlayBook would sell: it ordered something like 2m, and shipped about 850,000. Overconfidence is a continuing trait of the public pronouncements of RIM’s chiefs.
The company has serious problems. The co-chiefexecutives don’t seem to be able to figure out a strategy that will keep them ahead of the rivals. The situation was bad enough when it was just Apple and Android; but now that Microsoft and Nokia have teamed up, adding their heft to the Windows Phone platform, RIM is beginning to look like the runt of the pack. In December, when RIM announced its quarterly financial results, Mike Lazaridis – or was it Jim Balsillie? – said that they were in a strong financial position, given that they have a billion dollars in cash.
True. But six months earlier, they had two billion dollars in cash. Like Nokia, but about a year later, RIM is discovering that its existing operating system isn’t up to the challenges of present competition. However, Nokia has survived multiple existential threats, and adapted to them. RIM has never had to go through that.
You haven’t seen us
The hacking of Sony’s PlayStation Network in April is claimed to have revealed tens of millions of credit card details. It’s impossible to know how many were actually stolen, or used. Nor do we know – even now, seven months later – what Sony has found out, or who was behind it. The loose hacking collective Anonymous was blamed, though no definite proof has been provided.
Then came the hacking of the business owned by Aaron Barr, who had been promising that he could get inside Anonymous and identify – in real life – its “leaders”. He got turned over himself, and the results weren’t pretty – although it’s worth noting that by the end of the year Barr was back, and appeared mostly unscathed.
But that was the start of a hacking spree, by a ”crew” calling themselves LulzSec (“lulz” for the laughs, sec for the security, or lack of it) who broke in to various sites. The lesson was obvious, and has been known among security circles for a long time: many websites aren’t that secure, because they use slightly outdated software (for the web server, or PHP, or database). LulzSec simply brought that into the open, most notably in breaking into the News International servers to put up spoof pages.
It couldn’t last – principally because they had attacked the US Congress website and the UK’s Serious Organised Crime Agency (Soca) site. “If they had just stayed with the commercial ones, nothing would have happened apart from some folks would have had meetings and consumed huge amounts of coffee and biscuits and resolved to improve their security,” one expert told me. A number of people are awaiting trial in 2012 in relation to attacks on a number of sites.
Those, however, were just a sideshow. Elsewhere, the entire web of trust surrounding secure sites was unravelling. In March, a certificate authority called Comodo was hacked, and used by a self-proclaimed Iranian hacker to issue “legitimate” SSL certificates for a number of sites – including Google, Skype, Mozilla, Live.com and Yahoo.
Certificate authorities are to SSL-basedsecurity (when you see the padlock in your browser bar) what domain name servers are to web navigation – you have to trust that they’re correct, because otherwise everything falls apart.
SSL certificates confirm that a secure site really is what it says it is; your computer (or smartphone) has a list inside it of certificate authorities that it trusts, so when you visit an SSL site it checks the certificate against the issuer. If the issuer isn’t on the list, you get a warning.
But what if a hacker has created a fake certificate from the real authority? Then any site is, as far as your computer or phone knows, legitimate if it presents that certificate. The implications for shopping or other interaction are huge: you become vulnerable to a ”man-in-the-middle” (MITM) attack, where someone operates a site using the ”new” certificate between you and the real site. From your end, it’s a legitimate SSL site. For the person running it, they can see everything passing between you and the real site. Comodo’s certificates were revoked, but it depended on whether people accepted a browser update whether they would be protected.
That wasn’t the end. In July, a Dutch SSL certificate authority Diginotar – which provided the SSL certificates for sites including the Dutch government – was hacked, and a number of certificates, including one for Google, issued. That was used for a MITM attack on Iranian users of Google Mail – another indication that web security really does have human consequences.
Nobody quite knows what the next step for the certificate authority system is. But those in the know agree that it’s broken. This is, potentially, one of the most important things to have happened to the web in 2011 – and how it is dealt with in 2012 may be crucial.
Flash in the pan
You’ll probably have noticed that Apple hasn’t exactly been in love with Adobe’s Flash platform since the launch of the iPhone, but that intensified with the iPad’s arrival in spring 2010. So what was Adobe going to do about it? Initially, fight. During the Mobile World Congress in March, Adobe put out some forecasts (go to 11.45) about how many mobile devices would have Flash on them by year-end: 132m, including 50 tablets. However, in the context of an expected 450m smartphones to be sold this year (which is on target; 324m in the first three quarters), that was less thanone-third.
Apple didn’t support Flash, RIM didn’t support Flash on its BlackBerry (though confusingly it did on the PlayBook), Microsoft didn’t on Windows Phone 7; in fact, only Android handset makers did. Of course, they’re rather important, but Adobe could see that it was more important to be pervasive – as Flash is on the desktop, with 95%-plus penetration – than a ”nice to have”.
And so in November, in a rather mealy-mouthed blogpost, said – as if happy – that “HTML5 is now universally supported on major mobile devices, in some cases exclusively. This makes HTML5 the best solution for creating and deploying content in the browser across mobile platforms. We are excited about this.”
Flash for the desktop will continue, it suggested, but it’s hard to imagine that it will have any energy poured into it: the share of browsers capable of showing HTML5-specific content is growing rapidly. Flash was necessary once, but that was then, and HTML5 is now – or at least will be in 2012. Especially given the way that smartphones have outsold PCs in every single quarter, and that tablets (of all sorts) are going to be equivalent to 25% of PC sales for the fourth quarter.
In 2011 both Facebook and Google were told that they would have to submit to oversight from the Federal Trade Commission (FTC) in the US for the next 20 years. Google was pulled up over Buzz, which opted you in whether you wanted it or not; Facebook over its continual changing of privacy settings. Facebook’s approach to privacy seems to be to suggest that you don’t really want it. Just when you think you’re comfortable, it changes again.
Google tried again with Google+ in June. My own first experience wasn’t great (it improved) but – like almost everyone, I suspect – nobody could work out was Google+ was for, except to be “something that will divert some people away from Facebook”. The idea of ”Circles” into which you put people, and then tell them things specific to them, is classic Google – the engineering solution to a people problem. In a way, it’s the flipside of Buzz, where everyone got connected whether or not they wanted to be.
The trouble with Circles is that nobody who has anything resembling a job has time for them. Should that thoughtful insight about Strictly Come Dancing go to everyone? Just your family? The workmates who you might see on Monday, so they can enjoy your wit? Hell, who knows? As for Sparks, its source of ”highly contagious content from across the internet”, that seems to have been killed. (If it’s there, it’s well hidden.
Details of the number of users have beenwell-hidden, but the real problem with Google+ is that its approach to privacy works against what we’ve gotten used to over the past decade. We’re used to putting our stuff on the net, and then desperately rowing back; the European Commission’s forthcoming data privacy principles are expected to allow us to wipe out embarrassing or unwanted data from the past – an interesting idea.
Nevertheless, privacy is starting to look very ill indeed. All a private investigator needs these days is a couple of pages where you’ve left a pseudonymous comment, and they can follow you around the web and unearth your real name, family connections and probably phone number. No subterfuge required; it’s all there if you join the dots.
Patents. Oh, what a year. Apple’s war on Android (more specifically, what Steve Jobs saw as Android’s copying of iPhone features – something which Google’s lead designer declined to comment on) spawned dozens of lawsuits. Microsoft pitched in, extractingper-handset licence fees from Samsung, HTC and a number of other Android manufacturers. Google huffed that: “Failing to succeed in the smartphone market, they are resorting to legal measures to extort profit from others’ achievements and hinder the pace of innovation.”
The response of Frank Shaw, Microsoft’s head of PR: “Let me boil down the Google statement … from 48 words to one: Waaaah.” Android is set to do better business for Microsoft then Windows Phone at the moment. And it’s all profit.
Then there were the ones by Lodsys on app developers, despite the fact that both Apple and Google had licensed itsin-apppurchasing patents.
Yes, yes, you can argue about whether those should be patentable. But they have been, and the US does have a patent system, and that’s how it works. Grumbling really isn’t going to change it – although the protestations of large companies with powerful lobbyists might. That, and the fact thatnon-Americanapp developers began moving out of the US, because they worried about its effects.
Overall, it was a remarkable year: Android’s rise means that there’s a new ruler in the smartphone market, rather as Microsoft used to be with Windows Mobile. The hard question now is whether it can hang on to it.
Meanwhile, the mobile web is growing faster than the desktop one, and becoming the focus. But the far, far bigger question is about what will replace certificate authorities and rebuild a trust system on the web. That’s far more important than the ups and downs of the smartphone world.
guardian.co.uk © Guardian News & Media Limited 2010