Archive | May 2014

It’s Time to Re-Imagine Mary Meeker’s Internet Trends Report

Useful thoughts! Except I love two-axes charts!

The 21st Century Monocle


Is it possible that Google Glass’ (or similar head mounted wearable computer) primary use case is as a fashion accoutrement for Digital Hipsters?

I was reading an article about how a New York restaurant was being punished in its online Google reviews (but not Yelp) because it refused service to someone wearing Google Glass for privacy reasons. The lady who had been refused service gave them a one star rating and wrote a note about her experience, which is fair enough. But one of the commenters on her post then suggested a bunch of people give the place a flood of one star reviews, which appears to have occurred.

That’s not fair play, but I was struck by a comment from one reviewer on the restaurant’s Google page: “It’s a real pity that such a great restaurant can have its online reputation ruined by a group of trolls sporting 21st Century monocles.” [Emphasis mine.]

I just Googled that phrase, and it seems to be the first time anyone has applied that term to Glass, or any head-mounted wearable. But as part of my search I came across this article: “One Part Mr. Peanut, One Part Hipster Chic: The Monocle Returns as a Fashion Accessory” from the NY Times of March 5, 2014.

There are so many relevant bits, that I ask forgiveness for quoting it so extensively:

“The one-lensed eyepiece, an item favored by 19th-century military men, robber barons and Mr. Peanut, is finding itself wedged anew into the ocular sockets of would-be gentlemen seeking to emulate the stern countenances of their stuffy forebears.

From the trendy enclaves of Berlin cafes and Manhattan restaurants to gin ads and fashion magazines, the monocle is taking its turn alongside key 21st-century accouterments like sharply tucked plaid shirts and certificates in swine butchering…

…Martin Raymond, a British trend forecaster, credits the rise to what he calls “the new gents,” a hipster subspecies who have been adding monocles to their bespoke tweed and distressed-boot outfits. On a recent trip to Cape Town, Mr. Raymond said, he saw such a group carrying monocles along with tiny brass telescopes kept in satchels.

“All of this is part of a sense of irony and a way of discovering and displaying old artisanal and craft-based technology,” Mr. Raymond said. “You see the monocle appearing in Berlin, parts of South Dublin.”

Toby Miller, a cultural historian, said: “Monocles have always marked people out as beyond the crowd, slightly different. On one hand you have the Prussian officer, on the other you have the effete English lord, and then you also have the New York and London lesbian in the 1920s.”

Aside from the Times publishing “accouterment” (what, they don’t have spell check over there?) the words that jumped out at me were trendy, hipster, irony and different. From the above mentioned swine butchering to the Edwardian beard, Pabst Blue Ribbon, Mason jars and Crosley USB turntables at Urban Outfitters, there is a whole thread of hipster behaviour that reaches back into an artisanal past (whatever the hell THAT’S supposed to mean) and embraces things that are deliberately, conspicuously and ostentatiously anachronistic.


And good for them…speaking as a guy who owns TWO Fatman valve amplifiers!

But it also occurs to me that hipsters can go back to the future, as it were. Can’t you consciously mark yourself out as being “slightly different” by going FORWARD too? Reject print media and traditional TV, pay for as much as possible with your smartphone, quantify yourself with a wrist-mounted wearable, and (as a final frontier, perhaps) slap on a head-mounted device that has been compared to both Geordi La Forge’s VISOR and to humans being assimilated into the Borg in the Star Trek universe?

I call it conspicuous digitalisation. Those are people buying and using technology, not as a utility, but as a fashion choice. There’s nothing wrong with that and tens of billions of dollars can and will be made.

But because Digital Hipsters are buying these things primarily to be ‘slightly different,’ it also means that they will never go mainstream. As I have said elsewhere, there are ubiquitous technologies. In the developed world, nearly 100% of the population has access to all of PCs, TVs, smart phones and tablets.

If Glass is indeed the 21st century monocle, it will never appeal to 100% of people, and will be limited to a mass-niche of 10-20%, at most.

The hardest working generation ever


Just because we answer a work email at 9 pm while watching TV doesn’t make us the hardest working generation in history. And I predict that the next generation will work even less than we do.

At least once a week I hear something about how technology has turned us all into 24×7 employees, instead of the ‘traditional’ 40 hour work week. We are apparently a group that works more hours than anyone ever has before. It is an understandable mindset: who wouldn’t want to be part of the most industrious society ever? It makes us feel good, and even gives us something to complain about when we are in the mood!

However, it is nonsense.  As the Atlantic points out this month: “…we’re working less than we did in the 1960s and 1980s and considerably less than we did in the agrarian-industrial economy when Keynes foresaw a future of leisure…Every advanced economy in the world is working considerably fewer hours on average than it used to.” The key is to look at the total work that people do: on the job and around the home.

Individuals may vary, of course, but across time, countries and society as a whole, technology has almost certainly enabled us to work fewer hours: the decline in the USA in hours worked since 1950 may only be about 10%, but a) they started out lower, and b) other developed countries have seen a drop of 25-40%!

How is this possible?

Both sets of my grandparents had electrically powered labour saving devices called “washing machines” in their basements, and they looked like this:


Those two rollers at the top are called mangles, and they did NOT dry your clothes: you fed the cleaned washing through the rollers, which squeezed most of the water out, then you still had to hang dry the washing, and then fold and iron EVERYTHING. (No artificial fabrics or Permanent Press back then!) Each load was a solid 10-15 minutes of squeezing and hanging. Today? We throw the stuff in a dryer, hit a button and get to relax.

In my great-grandparents time, a purchased chicken (let alone one you raised, which was even more work!) came full loaded: head and feet still on, wearing feathers, and filled with bits that you needed to remove.


I once bought a bird that way: plucking, gutting and butchering a bird took me over an hour. I am sure that folks in 1900 were faster, but it would still be 15-20 minutes of prep before you were even able to start cooking the damn thing. Today? Most of us feel like heroes when we don’t go out for dinner or order in. And don’t get me started about microwave ovens.

In the last 60-120 years, think of all the work that people used to do that has more-or-less stopped. Not just cooking and laundry: vacuums instead of brooms, chopping wood for the stove versus natural gas or electricity, pumping the well water compared to turning on a tap, filling the kerosene lamps contrasted with flicking a light switch…making your own clothes, knitting, darning, tatting, push lawn mowers, ice for the icebox. Dishes! I forgot about washing and drying dishes for three meals a day, nearly every day of the year.

For both men and women (not counting those who had servants, I guess) it adds up to an easy 10-20 hours per week of additional labour, or an extra 500-1000 hours per year.

So be honest with yourself: do you really spend 15 hours a week answering your bosses’ emails after “regular working hours?”

In a number of countries, the average person 60 years ago worked almost twice as hard as the average person in those countries does today, and I would suspect that that the average person 120 years worked three times as many hours.

Don’t get me wrong: being on call 24×7 has its challenges, and almost certainly is a new form of stress that will have long-term psychological and societal implications. But along with that “curse of technology” comes the blessing of technology as well: literally hundreds or even thousands of hours of leisure time that the average person would not have enjoyed in 1894.

  1. It’s not technology’s fault that we waste those hours playing Candy Crush!
  2. Our great-grandparents would have been a little upset at the idea of taking a call from the boss at 9 pm. But they would switch with you in a heartbeat, if it meant never plucking another chicken.


I found the primary data source for the chart at the top.

There was no Canadian line on the chart (the other countries go back to 1950, but Canadian data only starts in 1961.) I was able to add a chart (below – click to enlarge) which shows the US and Canadian numbers: our average annual hours worked has declined a bit faster than the USA, at 18% since 1961.

OECD Stats with Canada


TV cord-cutting: the smallest ‘epidemic’ in history


The Canadian Radio-television and Telecommunications Commission (CRTC) released the 2013 results for the cable* and satellite companies yesterday. Despite headlines showing that one in six Canadians are thinking about “ditching” cable or satellite TV, the reality is remarkably different.

21% of Canadians had access to Netflix as of last summer, and the number is almost certainly higher now. But despite the popularity of Netflix and other over-the-top (OTT) video services, there has been almost no change in the number of pay TV subscribers in the last year. Here is the detailed breakdown:





Percent Change

















That’s right: regardless of what you hear in the media and from your friends, the actual number of Canadians paying for a package of TV fell by less than one tenth of a percent. Just how few people are 7,602? The smallest city in Ontario is Dryden: pop. 7,617. 🙂

Now a few caveats are in order.

  1. The number of households in Canada grows by about 150,000 per year on average. So if pay TV penetration rates were steady, we should have seen an increase in the total. The fact that we didn’t means that pay TV penetration is falling, which is a sign of some cord-cutting going on. (Although still less than 1% of total subscribers.)
  2. Traditional TV tends to be more popular with older Canadians and less popular with younger demographics: that has been true for decades. But something new appears to be happening: the historical popularity of traditional TV has experienced a very sharp inflection down with those 16-24. That doesn’t matter in 2013, or even 2014. But as these people move out of their parents’ homes and create new households, and if they continue to be averse to traditional pay TV packages, then we will soon see the numbers of total subscribers begin to fall at a faster rate than we have seen thus far.
  3. But probably only single percentage points at most. Those who provide pay TV services have a number of tools to retain and attract subscribers: ranging from bundling TV in with other services, or buying up exclusive rights for ‘must see TV’ like live sports.

But for 2013 and 2014, the phenomenon known as cord-cutting is almost entirely hype. As predicted by Deloitte’s TMT Predictions, in our 2013 edition**!

As I said to CBC Radio yesterday: “If there is an epidemic of cord-cutting going on, it is one of the smallest epidemics I have ever heard of.”

* Historically, the CRTC has talked about the pay TV industry as Broadcasting Distribution Undertakings or BDUs. And they have reported on subscriber numbers for satellite, cable (through a coaxial cable) and telco IPTV (through a twisted copper pair wire) as three distinct categories. This year, they have lumped cable and IPTV together as one category, called cable. This makes a lot of sense, since most Canadians don’t care (or know) which wire is delivering the signal to their house. And the packages of TV channels and prices are basically the same from both the legacy cable players and the telcos, so aggregating them is a good thing.

** By the way, the cord-cutting rate in the US is very similar. According to one analyst, there were 251,000 fewer subscribers between cable and satellite (and telco TV) services in 2013, a drop of 0.2%. Which suggests that Americans are cutting the cord at a slightly faster rate than Canadians. But the numbers are so small I wouldn’t rely on that trend: even very small changes (another Dryden or two) would change the balance.


A case study of a secular sales decline: “This can’t go on!”


Not to be a pessimist, but yes it can.

I have been tracking Compact Disc sales for two decades now. Things were going well, until Napster and friends came along. CD sales had been growing since 1983, so the year-over-year decline in 2001 was an enormous shock to the industry. Down 3% was bad, but then the annual decline steepened in 2002 and 2003, at 7% each year.

I remember analysts and CEOs reassuring each other, both in private and in the media, that 7% declines: 1) were a temporary thing – it would be probably better next year; 2) couldn’t go on at this rate – 2-3% declines were likely to be the norm; and 3) at least it couldn’t get worse – who had ever heard of such an important and popular product falling by more than 7% in a year?!?!?

And for one brief happy year, they were right: CD sales actually went up by 2% in 2004. But it was only a temporary reprieve, and 2005 saw an 8% drop: slightly weaker than before, but “at least it can’t go on at this rate.”

It didn’t: it got worse. 2006 saw the first double digit drop of 11%. “This must be the bottom, right?” the same CEOs and analysts asked. Not even close: revenues fell 20% in 2007 and then 27% in 2008. The erosion continued, but at least the percentages improved a bit: after two more years in the twenties, 2011 saw sales drop ‘only’ 8%. Was this the new run rate? Nope, 2012 was back down into double digit declines at 18%.

Now take a look at the chart at the top of this post, and imagine you are a compact disc manufacturer at the end of 2012. What would you guess the 2013 number would be? The economy is doing OK, there are some good bands out there: maybe we can get back to single digits?

Negative 17.6% for 2013. Out of the last seven years, sales have fallen by more than 10% in all but one year. CD sales in the US are now 84% lower than in 2000. (And that’s in unadjusted dollar terms. Factoring in inflation, the decline is 88%.)

All of this may feel like I am picking on the compact disc industry, but that’s not my objective. Over time, many products or industries reach a tipping point and enter a period of inexorable decline. The folks who run those companies and the analysts who follow them ALWAYS make the same mistakes. Here are a few rules:

  1. It can always get worse. There is no “floor”, no magic number that your sales will hold at.
  2. It can stay bad much longer than you think. In a declining industry, there is no guarantee that good years will offset bad years.
  3. The only time you can say that the decline is at an end is when your sales are zero. At ANY point before that, telling yourself that “this can’t go on” is untrue, not backed by empirical evidence, and will lead you to make bad decisions.
  4. Which is not to say that (relatively) good years might not occur: see 2004 and 2011. But you can’t count on that.

Why does Apple even bother making iPods any more?


Sales of iPods are declining, and many wonder why Apple even bothers. Trailing 12 month revenues are down about half from Q4 2012, and now represent less than 2% of all Apple sales!

But, at just under $3 billion in the last 12 months, iPod sales would have represented 45% of ALL Apple revenues in 2003, when total sales were $6.21 billion for the year!

Funny how times change…


[Edited to add: The chart above is from Business Insider.]

Rugged is the new black: water-resistant phones will take over


I predict that by the fourth quarter of 2015, more than 50% of global smartphones sold will comply with the IP67/68 standard, and be dust-proof and water-resistant or even waterproof.


Because making phones water-resistant is easy, cheap, useful and inevitable. Ten years from now, no one will even believe you when you tell them that phones used to have the warranties invalidated after only a few seconds in water, or even spilling a coffee on the device! Plus, it will help sell more phones faster, which the device makers are always keen on.

Let’s start off with cheap and easy. Just think of all the MUCH-cheaper consumer devices that are already water-resistant or water-proof: GPS devices and so on. Many also have headphone jacks, card slots or replaceable batteries, yet they manage to keep working , even in very harsh conditions.

There are multiple or mixed approaches that smartphones could adopt: silicone plugs for the ports; do away with ports and rely on Bluetooth and wireless charging; conformal coating or nanocoating; or even plain old gaskets! I can’t find any hard data, but based on the specs and prices of the phones out there that are already water-resistant, the cost can’t be more than $1-2.


30% of American iPhone owners have had their phones damaged in the last 12 months, with 27% of those reporting damage due to liquid, or 8% of all iPhones! The “stick it in uncooked rice” trick is all over the web, but it appears not to be a very good idea. If the phone is irretrievably damaged by water, it is usually not covered under warranty and you are out hundreds of dollars. Why not just make the device water-resistant for a couple of bucks?

Next, although a recent online poll suggested that only 11% of consumers insist on water-resistance in their next smartphone, manufacturers are almost certainly going to be pushing this feature. We are collectively upgrading our phones at longer and longer intervals, now waiting 24 months between new devices. For an industry that used to get us to buy a new phone every year and half, they don’t like this trend and they need something to get us to pony up the dough. And some of the things that worked in the past won’t work in the future.

Screens with better resolutions and more pixels per inch (PPI) have been driving upgrades for the last few years: but even-higher pixel densities will offer improvements that can’t be seen by the average human eye. Bigger phones like phablets are working: they will be 25% of all smartphones sold worldwide. But they can’t get any bigger without turning into tablets. Better cameras used to be a great reason to buy a new phone – but after about 10 megapixel sensors, the limiting factor on picture quality becomes the camera lens and that is not easy to incorporate into the average slim smartphone body.


Batteries aren’t getting any better, 4G radios will be the norm for the next five years at least, and while quad core processors have their virtues, going to eight or even 16 cores has no real benefit on any device, following Amdahl’s Law.

Once again, why not spend $2 on making a phone water-resistant, and offer users something they actually need and makes a real difference?

I have seen this movie before. In 1976, my family took a trip to Disneyland, and I came back with a Mickey Mouse watch. As always, my sister and I took turns washing the dishes after dinner when we got back home. I usually remembered to take off my new watch first, but one time I forgot, a little bit of water got inside and the watch was ruined forever. 😦


And that was normal. It was quite rare for watches to be water-resistant in the 1970s (and earlier): companies like Rolex and Timex made waterproof watches, and that was their main selling point! “Takes a licking, and keeps on ticking.” At a guess, fewer than 10% of watches were water-resistant when I was growing up. But technology improved, quartz watches are easier to waterproof than mechanical movements, and time marched on.

I asked a group of around 50 people yesterday who owned a watch. Almost everyone put up their hand. Then I asked who owned a watch that was NOT water-resistant. Not a single hand went up. Water-resistance is table-stakes in the watch business in 2014, and I predict the same will become true for smartphones over the next few years. And ten years from now, you probably won’t even be able to buy a smartphone that isn’t waterproof.

Thanks again to Brian Piccioni, who provided some of the ideas and fact checking on this topic. You can read more from Brian here.

[Please note that the first sentence does NOT say “Deloitte predicts…” This is my personal blog. For a prediction to go through the full Deloitte process involves hundreds of hours of research, checks with customers, buyers, other research firms and some of the more than 8,000 Deloitte practitioners who specialise in Technology, Media & Telecommunications. But this may turn into a full Deloitte TMT Prediction for publication January 2015, so you can say you were there at the genesis!]

Next post: What about shock-proof? Water is only half the battle…