Today I could test drive for the first time ever an electrical car from Mitsubishi, the MiEV. (see also the UK page) The car had a great acceleration - as expected - also uphill and was also much faster than my gasoline-driven Mazda 3 1.6.

Assuming you can recharge the car at work the daily radius will be doubled and the majority of the commuters here in Zurich could use one easily I think.

For a video look here and for pictures that I took look here.

It is a good sign if the market leader is rushing out new features as it shows that they fear competition. Today’s announcement of Apple’s new OS 4.0 brings many things that were missing for a long time, also partly due to the hardware limitations of the first iPhone and iPod generations. Still, Steve remains hard on Adobe’s flash and seems determined to fight this out. The new iAd platform essentially tries to make it very easy for developers to make money with ads (40% will go to Apple). Multitasking is the other big feature that will allow you to run Pandora, GPS location, Skype or whatever in the background. Then there is iBooks which was to be expected and will put the pressure on Amazon even more.  For better organizing all of our apps they will bring out folders. And then as one would expect Steve hates Google’s Android which is probably the number one reason why they made all these announcements today.

- Q: Any change in Apple position on Flash and Java?

Steve: No.

- I asked whether Apple will enable unsigned applications like Android and Palm OS.

Steve: There’s a porn store for Android… you can download it, your kids can download it. That’s a place we don’t want to go, so we’re not going to.

Update: Apple boots Google off iPhone 4.0, as reported in this article in Business Insider, it could well be that Apple takes off Google Search with iPhone 4.0. This could mean a range of things. One of them that Apple enters the search market itself (would go well with its iAd launch) or that it uses Bing from Microsoft.

Apple’s impact on Amazon’s Kindle can be seen clearly with Amazon sending out email ads talking about Kindle apps but not Kindle anymore:

Now that everyone expects a huge rise in mobile data traffic (e.g. 40x in 5 years according to Coda Research Consultancy) it is even more important to know that user experience and speed are valued higher by the mobile users than relevant content. This is different than in desktop use and must be taken into consideration when you develop products for the mobile space.

After it now became official that Google decided to redirect its China Google.cn search site to its Hong Kong site Google.com.hk and with that step effectively leaving the China mainland Search market, the question coming up is what will that mean for the future?

Firstly, I think that the decision to leave China had mostly also to do with the fact that Google was unable to gain market leadership in China. It trailed its local rival Baidu. This IMHO had from a pure business point of view nothing to do with being censored or not but simply with the fact that Google like many other US Internet companies face fierce local competition and never gained the market share that they were able to gain elsewhere in the world. That is frustrating for them no doubt and certainly played a major role in its current decision to “pull out”. In fact they did not fully pull out but left all other businesses untouched - so far.

It has to be seen now how the Chinese authorities react and if they block the Hong Kong site entirely which they of course could easily do. That they filter the content that Google Hong Kong’s search finds is clear.

Now what will this mean for the future of China’s Internet business? One will see more and more local Chinese companies gaining more market share and dominating the Chinese market. Those companies will remain local and will enjoy healthy growth not needing any expansion outside of China. While it is a bit too early to say for sure but what could well happen is that the Internet will be divided into two. A Chinese one and a non-Chinese one. This of course will isolate China from the rest of the world something that is not good one would think. Cynics might also say a Google and a non-Google dominated Internet world. The other scenario could be that ways to circumvent censorship will become dominant and that grassroots movements will eventually practically open the Chinese Internet. That I doubt though. People assuming that - like Sergey Brin in the NYT - don’t take the huge effort into account that is being exercised by the Chinese government to control the Internet and censor website content and access. I once heard that there are more than 10,000 people employed in Beijing who search and then filter the Internet for unwanted website content. What happened now though with Google’s announcement is that the world is shown and talks about this Great Firewall of China and as a side effect “China is evil” rather than “Google is evil” is being spread.

Mr. Brin added that efforts by China, Iran and other governments to control online speech — a “half an Internet” approach, he said – will likely fail eventually. “I think that in the long term, they are going to have to open,” he said.

So how to deal with this is what every company needs to decide for itself. I for my part see this all a bit different. Having actually lived two years in the region (China and HK) I think one needs to be pragmatic and you cannot judge China with the rules that count in the US or Europe. We all know that also democracy in the Western world has its strong limitations, just looking at the heavy lobbying work that is so typical in Washington (I am sure also Google has its folks there as well). This shows that money has a huge influence on political decisions, something that people too often simply forget also because they depend on it.

The Google decision to redirect its search was at the end more of a face saving act for them than anything that reflects understanding of the Chinese circumstances and dealing with it in a smarter way. Pressure came up to finally do something after they noticed - and published - a sophisticated hacker attack and assumed it was Chinese government-sponsored. Now one needs to know that practically all business in China is in some way controlled by the government and large Chinese corporations are to a good part government-owned (e.g. Huawei). So I am sure that Google’s remaining business will also do business with the Chinese government or they will do no business. Of course that’s not in Google’s hands but the Chinese. Practically I think they won’t do much business there anymore and could as well simply entirely leave.

When I read this in a Twitter post I thought, “Wow, finally they get it and try to do something good and different to fight back.” Well, big was the disappointment then when I checked out their blog and Design by Community announcement. Very disappointing, very. This community campaign once more lacks any thought and preparation. Simply bad. I can’t believe that a company the size of NOKIA constantly screws things up so badly. They need help urgently but I fear for them that they won’t admit it.

Being in high-tech business for nearly two decades I have seen many new ideas come and many more never become mainstream or disappear after only a short amount of time. Also the time it takes - while it seems this is getting shorter and shorter these days - can be relatively long before a new technology becomes used and adopted by the masses.

One reason in high-tech b2b markets why it takes so long to adopt new things is that there is an existing working infrastructure that is good enough and does mostly the job. New things need to be substantially better (10x in price and features) to make a quick impact. Problem here is of course that what is better cannot easily measured and quantified often so it is not even obvious even if companies sales and marketing will find all kinds of use cases showing ROI in a short amount of time.

One other reason are the human beings themselves. Used to do it one way or the other for a long time make them feel comfortable, they enjoy a certain amount of security and the feeling that they can deal with it well. New things are for most people - in particular conservative ones and the older generations - seen more as a threat than an opportunity. Also there is not so much desire to really try out something new, “why change anything?” they ask themselves, “we are doing very well”, so there is no reason really to change anything. We have just seen such thinking with the old boy group at the world soccer organization FIFA (its president Sepp Blattner is 73 and enjoys half the voting rights, whow, how is that possible?) where they ruled out any technical aids such as goal cameras or sensors in soccer balls. This despite the public, practically all coaches and players in favor of using new technologies to reduce the amount of mistakes when it comes to goals and also it is used in other sports (ice hockey, tennis) already. The arguments that the FIFA published are some that could be easily applied to the nay sayers in technology, here an extraction:

Fussball muss, erstens, weltweit nach den gleichen Regeln gespielt werden. Für Teenager in einem kleinen Ort etwa sollen die gleichen Regeln gelten wie für die Profis. Zweitens bringt es nichts, die Verantwortung für einen Entscheid vom Schiedsrichter der Technologie zu übertragen. Selbst Zeitlupen würden keine Klarheit bringen, und zehn Experten hätten zehn Meinungen, wie eine Situation zu beurteilen sei. Drittens kann die Anwendung von Technologie wie zum Beispiel zur Überwachung der Torlinie (mit Kamera oder Chip im Ball) sehr teuer sein. Viertens schliesslich ist Fussball ein dynamisches Spiel und kann zur Überprüfung eines Entscheides nicht einfach unterbrochen werden.

Quite funny some of these arguments. They basically have only one goal: don’t touch our nice world and confront us possibly with challenges that we don’t understand.

Despite this NO, I am convinced that in only a few years, when some of these people are retired (finally) technology will come where it makes sense and where it clearly helps to make better decisions. Grassroot movements and opinions cannot be stopped, only delayed. New ways in discussing opinions in blogs, communities, news portals will help to keep the pressure up. Below an online survey done in the Swiss newspaper Tagesanzeiger. 72% say about the FIFA decision “total nonsense”.

This question is something I have been asking myself for quite a while, and a recent article in The Guardian writing from the Mobile World Congress in Barcelona reminded me of my own thoughts. Author Rick Wray said:

“Europe has become the ‘flyover states’ of the mobile industry,” says a ­senior European executive, referring to the disparaging term used to describe middle America by high-powered business travellers shuttling between California and New York.

“All the service innovation is being done on the west coast of the US, and all the manufacturing and technical innovation is being done in the Far East. All we’re doing is selling other people’s products.”

Quite frankly, it is not even a flyover state anymore since the traffic goes from the US west coast westwards to Asia. No need to fly across Europe. Rick Wray’s article is worth reading and I concur with his views but would like to add a bit more depth to it and look at some of the reasons, as well as what could be done.

The key reason is that IT, Internet and software innovations, a domain of the US for a long time now, is becoming the ruling power in the mobile landscape. The pure infrastructure business has been targeted by the Chinese government for more than 10 years now, supporting first Huawei and then ZTE, among a few others not yet widely known outside of China such as Datang. These companies profit heavily from government support and the enormous market growth in China, but are now also entering international markets everywhere.

Entirely busy with fighting these Chinese vendors, European infrastructure vendors focused on keeping their customers - the mobile operators - happy by providing more and more services to them (up to outsourcing the whole operation) but ignored the most powerful force, the end users. And that is what Google and Apple are after, the masses of end users, who will in the end decide what is successful. Some of the players have already dropped the ball, such as Siemens, first selling off its mobile phone business and then getting rid of its infrastructure business as well by forming a NOKIA-led joint venture. Now it seems they are trying to become a Chinese-style company shutting down one location after the other. But while cost cutting is inevitable for them, the real thing they should be doing is focusing on cloud computing, and getting extensively into innovative mobile service offerings that they then run for the operators.

They have one advantage that they could play nicely and that is the good long-term relationships with the mobile operators, who are facing similar pressures from the same US companies. The operators also own the networks - hundreds of billions $ worth of assets - and the clients using them. Something a company like Google would love to own, and use to augment their service offering. One note here: Google has the backend infrastructure already (data centers) but not the access networks - yet (for background info on Google’s latest FTTH project read here). I think there is also one other asset that I would play out: Google is seen as a threat by governments and increasingly individuals who simply don’t trust them. Operators - with their local ties to end users might have had customer support issues here and there, but at the least no-one thinks of them as a privacy threat; so this trust base could be used offering cloud computing services.

Mobile operators and the infrastructure vendors need to explore new business models and they also need to find a way to handle advertisements. The biggest threat I see for them though is the speed with which this transformation is happening. And speed has not been something they have been able to handle so far, mostly because their management do not understand the new challenges, threats and opportunities and what to do about them. Most importantly, they need to hire people for these positions who understand the IT and internet business and are not simply large company operational experts.

Now the world is growing together and even if the US president says in his speeches that America has to lead, I think big companies should not be seen as US-, Europe- or Asia-based organizations but as worldwide operating companies since none can survive by only serving parts of the world.

SAP has changed its management and the founder Hasso Blattner is back watching it all. As German’s number one newspaper FAZ commented:

Wenn ein Unternehmer Jahre nach der Unternehmensgründung wieder ins operative Geschäft eingreift, ist etwas schief gelaufen. (free translation: when an entrepreneur after the successful founding and developing of a company again enters operational activities something must have gone wrong.)

They also mention that Shai Agassi - who is now trying to overcome the limitations of car battery technology with country-wide battery replacement stations - would have been a Silicon Valley like entrepreneur. Now SAP picked a double heading the company. A Danish and American with long-time experience working for SAP have been selected to run SAP- as it appears - by Hasso Plattner who will oversee it all again.

I must admit that I never warmed up to SAP. When I had to pick a ERP solution while with Bertelsmann (BMG) in Asia I felt that Oracle would be a better solution that is less dependent on experts and as such offers a better deal. Of course the company’s IT department already purchased many licenses forcing them to “convince” the rest of the company to use SAP so that they could apply the already purchased licenses. While this model has worked extremely well for SAP it seems to also be its limitations and the now replaced Theo Apotheker was a guy from having excelled with that business model.

Europe would need successful IT companies since the future will be much more driven by such companies than by car manufacturers. But apart from SAP there is only one other good-sized company that is known on an international scale: Software AG. These guys I know even less but they seem to do quite well around the buzzword “XML”.

Back to SAP: In my opinion they need to be much more aggressive in innovation and also need to reach out to new areas. This could well be by acquiring promising technologies from startups. So far SAP has not applied acquisitions much but I think they should do much  more. Also I think SAP needs to expand into areas where Oracle and Microsoft are active. There is no reason why they should not be able to offer their own relational database or offer enterprise software office solutions. In what of the currently hotly debated IT subjects is SAP present? social private communities, mobile enterprise solutions, real-time communications, mobile advertisement, virtual software, cloud computing, unified communications. Hardly anywhere. This needs to change if they want to have a future.

Techcrunch Europe just brought out a top 100 Europe startup list. The ranking is done by some (secret) but - as they say - accurate algorithm that can not be gamed and is updated constantly. They partner with YouNoodle who says about its scoring:

YouNoodle Score is a quantitative measurement, on a scale of 0 to 100, of a startup’s progress and traction based on its traffic, funding, employees, buzz and other activity. The score is based on information pulled in from thousands of online sources: traffic sources, mainstream media, funding sources, the blogosphere, conversations on Twitter, and other key factors.

Personally I have a problem with such attempts to rank startups based on - as it seems - online buzz simply because it says practically nothing about how viable, close to a good exit etc. the startup is.

Any algorithm is highly subjective and open for BIG manipulation. I don’t want to suggest that Techcrunch or YouNoodle supportive startups are higher ranked than the ones who could care less about them but at the least questions remain and that should not be.

Therefore I call to either publish the algorithm and make it transparent or do no scoring at all. Better would be to rank the startups by simple metrics alone like funding, revenue (already tricky since this can be manipulated as well by private companies), number of employees. Or, what I would consider the best for a social media blog like Techcrunch, let the crowd do the ranking.

There are many voices out there that say that only a few mobile OSs would survive and among them Apple, Google (Android), RIM, and Microsoft (Windows Mobile). Nokia’s OSs are not mentioned. One of the major reasons brought up is that Nokia is not a SW company but a hardware manufacturer only. I am not sure though if that is correct. In particular if Nokia continue to make the right moves like this free SW GPS, and acquires SW companies, then they have their current market leadership behind them. Also, unlike both Google and Apple, Nokia have a very strong relationship with the mobile operators as their distribution partner. To change a working infrastructure is a tough thing to do and typically requires really big differentiation and benefits. Of course Apple is able to deliver them but also seems to be the only vendor out there with that capability. That would reduce the battle for Nokia to one company “only” which is Apple. And to do that they need to do more than provide SW. Nokia have known that for a while and that’s the reason why they launched their Ovi platform, offering free music downloads and now free GPS capability. Of course free is not a good business model for a CE vendor and that’s why they have to really integrate this all well so that they offer an alternative to the Apple platform (touch phones, iTunes store, music player, apps, ebook reader). Looking at their website that’s exactly what they are working on but you can also see their main deficiency: while maps are free, network download charges for synchronization are of course not, and depend on your operator and your mobile plan. Apple would have provided deals with the major operators offering a complete end-to-end user experience (and if it is only that you can conveniently buy/activate it through iTunes). So still some way to go for Nokia, but first steps look promising at least.

One additional question now is what will happen with GPS vendors when what they offer is essentially a freebee on mobile phones. Worth a new blog post I think…