Alec Saunders SquawkBox

Morgan Stanley’s Internet Trends report for March of 2008 is out. You may have seen the reports from TechCrunch, where Michael Arrington has focused nearly entirely on the social networking trends.

I also found the mobile trends, starting on slide 42, to be dramatic.

Morgan Stanley is forecasting that the inflection point for 3G service will come in 2009, as greater than 20% of the global mobile user base will be 3G subscribers.

The iPhone’s adoption rate is crushing all previous records. The presentation (perhaps unfairly) compares iPhones adoption to RIM a decade ago, but the point is striking nonetheless. Apple’s timing is uncanny, hitting the market at the instant that smartphone adoption is finally taking off.

It’s a dense presentation, but worth a view. Too bad that SlideShare is such a sucky way to read all the microscopic type on the slides.

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Today we talked with Kleer VP Ron Glibbery about their innovative audio technologies and the markets for them. By way of background, Kleer is a fabless semiconductor company that has developed the first wireless audio technology to combine high quality audio with low power consumption to address portable, home and automotive audio markets. Kleer’s patented radio architecture delivers lossless CD-quality digital stereo audio, while achieving 10 times the battery life of a comparable Bluetooth solution.

I’ve heard headphones built with the Kleer chipset. They sound GREAT! Recently, their technology has made its way into products from Sennheiser and RCA. Soon we’ll all be able to get our hands on these.

On the call this morning: Dan York, Ken Camp, James Body, Steve Sokol, Jeanette Fisher, Brad Jones, Ian Hood, Sheryl Breuker, Susan Verrecchia, Kyoko Kataoka, Ron Glibbery, and James Elrick.

 

 Squawk Box April 28 [32:43m]: Play Now | Play in Popup | Download

The Sunday New York Times published a piece titled BlackBerry’s Quest: Fend Off the iPhone. Although it nicely introduced the coming conflict, frankly, it didn’t go far enough.

If innovation in these markets were to stop today, iPhone wouldn’t sway too many BlackBerry users. Poor integration with Exchange and the lack of a keyboard would end the conversation. Likewise, BlackBerry wouldn’t challenge iPhone on it’s core turf — the media and web browsing experience is not there.

But Apple claims huge pent up demand for iPhone in enterprise, and will introduce Exchange integration in iPhone 2.0, along with 3G. And RIMs 3G is apparently delayed.

So how will this likely play out?

First, ignore the analyst reports showing that RIM has lost market share. The dip from 45 percent to 40% reported by the Times needs to be considered in light of the fact that smartphone shipments have jumped by 60% due to the entrance of Apple into the market. A rising tide floats all boats.

The key to understanding this conflict is to understand the respective strategies.

Apple’s strength is user experience. They’ve focused on a fabulous consumer experience, and are working on connecting that to enterprise. RIM is focused on enterprise, and expanding to consumer. RIM’s user experience is a corporate IT managers user experience — incomprehensible for most people, and with a steep learning curve.

RIM’s strength is channel. Hundreds of carriers worldwide sell RIM products, but only a few carriers sell iPhone. Moreover, Apple is imposing serious (some would say onerous) demands on their channel
for the privilege of a short period of exclusivity. RIM can counter Apple’s challenge with aggressive marketing and channel support in hundreds of countries. Apple must negotiate each new agreement in an environment where RIM holds the upper hand.

Moreover, partnering just isn’t in Apple’s DNA. Witness their repeated channel and OEM failures.

Look for RIM to focus aggressively on user experience. Apple has raised the bar and they must now respond. It would be a disaster for RIM if Apple were to ace the Exchange integration, removing yet another barrier to iPhone in Enterprise.

Similarly, expect BlackBerry to be aggressively marketed through the might of RIM’s global channel. Expect RIM to flood the market in geographies where Apple isn’t present (most of the world) in order to dominate those markets. Expect RIM to offer incentives to carriers and consumers in order to cement its position.

And Apple? If they were smart, they would steal a page from Nokia. iPhone 2.0 would be an unlocked worldphone, with preprogrammed carrier information for every carrier globally. Rather than perpetuate the fiction that they need carrier relationships, they would go directly to the consumer.

I’m looking into buying a new car, and finding the process quite frustrating.  I’ve checked out MSN auto’s and several other sites, but so far have been unable to find a site which answers a simple question.  Because our garage has one large bay and one small bay, I need to find a list of vehicles that are under 175 inches in length.  I’d like them sorted by fuel economy rating.

Has anybody seen a resource that would allow such a query?

I awoke yesterday morning to mail from PhoneBoy telling me that iSkoot is passing passwords in the clear, unencrypted. He put a packet-trace on his WiFi router, and used the Nokia N95 to access iSkoot via WiFi rather than the way it is more usually accessed which is over the air. This morning he has also provided a dump of the session to prove to the network geeks out there that his assertion is correct.

iSkoot should take note and encrypt that channel.  That goes without saying.  It’s an exploitable flaw.

In the meantime, I’m not worrying about it too much.  The vulnerability occurs when using iSkoot from a WiFi enabled phone (not too many of those out there, although we’d all like to see more), and when your password is being passed to the system.  In order to exploit it, a hacker would have to crack the encryption on your WiFi router, and sniff your password out of the air at the point in time you were logging in.

The biggest issue I see is that so many people use the same password on every site.  If someone were to discover your Skype password this way, you might lose whatever balance you have on your SkypeOut account, but more importanly they might also be able to compromise the security on other sites - say your bank - if you habitually reuse your password as many people do.

If you own a WiFi enabled phone and use iSkoot via WiFi:

1. Don’t use the WiFi at a public access point.
2. Or, if you must use iSkoot at a public access point, change the password on your Skype account to something that you don’t use anywhere else.

Perhaps the most peculiar aspect of this was Mark Jacobstein’s denial, in the comments on PhoneBoy’s blog, that passwords are being sent in the clear.  I hope to see iSkoot publicly acknowledge the issue and commit to a very fast timeline to get a fix in.  If they let this issue linger, it has the potential to damage the business that they have worked so hard to build with carriers.  That would be a shame.