How Apple is planning to pump up the smart watches market

Apple-Watch-logo-main1Some people say smart watches, like Android Wear watches or Apple Watch, are a product with no market and no need. The reasoning behind it is that we can already do everything a smart watch can do with our smart phone. So how could smart watches find a wide-spread adoption? I think Apple has the successful formula in mind already.

Market it as a fashion item

Smart Watch is distinct from our smart phone in that it is worn on our wrist. Since we often wear fashion items on our wrist, people would buy a watch just for the fashion reason alone. This is how the Swiss luxury watch industry survived the onslaught from cheap Japanese quartz watch competitors. Apple understands this lesson well. Unlike the original iPhone which was released with one model and one color, Apple Watch comes with 2 sizes, 6 different custom alloys including 2 18k gold alloy, 6 different bands with each band having several different colors, all these grouped into 3 distinct editions. It is a nightmare for supply chain SKU management, but this is what it takes to build a fashion item.

Migrate existing use cases, making them more convenient

All watch makers understand this point. They have all made glancing notification a top priority. Instead of pulling out your phone to see each incoming email or text, you can simply glance down your watch.

While Apple is doing the same thing, it is going one step beyond. Apple purchased Beats not only for their music streaming service, but more importantly for their headphone business. They are reportedly making an Apple branded bluetooth headphone, and I think this is designed for the Apple Watch. Listening to music is going to be an important use case. It is not only limited to young folks, I also observe many people like to listen to their iPod during workout. When you strap you iPod to your arm, a wired earphone may be acceptable, but if you were to listen to music from your Apple Watch on your wrist, the wire will be a significant disadvantage. Instead, a bluetooth headphone will greatly improve the experience. With Beats’ existing user base in the young audience, they can easily move these young folks off iPod onto Apple Watch. My prediction is that Apple Watch will function as a stand-alone music player even when it is not paired with an iPhone.

Create new use cases

A key difference of a smart watch from a smart phone is that it is worn on your wrist, thus it is finally able to track your fitness intimately. Apple emphasized on its use in health and fitness, and has designed a built-in fitness tracking app aimed at replacing activity trackers such as Fitbit or Jawbone. But, its tracking capability is beyond a simple fitness tracker.

For example, our Jamo Dance (Jamo Dance on Android) product could use the Apple Watch to track your dance moves. VimoFit product demonstrated that you could track in-home/in-gym exercises and automatically count repetitions with a watch’s built-in motion sensors, you can even use our VimoGolf product to track your golf swing, both are something not possible to do with just your mobile phone.

With the focus on the right design concepts and on key use cases, I think Apple has cracked the secret sauce on how to jump start the smart watch market. I would not be surprised if they sell tens of millions of Apple Watches in the first year. I would be the first in line to purchase one.

 

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Chromecast vs. Roku streaming stick? Guide on which one to buy

roku-streaming-stick

Roku introduced its streaming stick last week. Its aggressive $50 price point puts it in a direct competition with Chromecast. Which one should you buy? They look similar on surface, but once you realize they are targeting different market segments, the selection decision is a lot easier.

Chromecast is a second screen for Apps:

Whether your App is a Chrome tab or an App on Android or iOS phone, you can enhance your application experience by sending content to the TV through Chromecast. The Chromecast SDK is designed to support interactive applications with rich UI interfaces. It provides a bi-directional messaging channel from the App to communicate with Chromecast device, and the Chromecast device uses HTML5, which easily enables rich application interface.

Roku streaming stick is a set-top box that can be controlled by a remote:

Roku application is built to run mostly on the streaming stick. A remote device (the remote control, or an App on smart phones) can send commands to the Roku application. The command could be a key stroke or a control stick movement (up, down, left, right). Of course the command could be fancier, but it is not supported easily by the SDK. An application developer must build a bi-directional channel to communicate with the application running on the stick. The UI interface on Roku is built from a set of templates that are designed for navigating through video contents, that is why all the Roku applications look alike. If a developer wants a fancier look, she has to spend significantly more development effort.

Because these two devices are built for different markets, the user experience is very different. For example, the Netfix experience on Chromecast is that you browse through the collection on your phone, then when you are ready to view, you send the video to the TV. On Roku, you browse through the catalog on the TV with the remote controlling the navigation.

The difference also means you will see different applications developed for them. The Jamo (a Wii-style dance game) App (Jamo is also on Android now) we have developed easily replicated a game console experience with Chromecast, but we have not been able to with Roku due to its lack of bi-directional communication channel. Since Jamo runs entirely on the iPhone, it needs a second screen to send dance videos to in order to replicate the same experience that we have with dance games on Wii or Xbox.

Imagine a game of tic-tac-toe, where two smart phone users play against each other, and they use the TV as the game board. This kind of non-video-viewing application is a lot easier to build with Chromecast than with Roku.

Which one should you buy? If you are an App person, where you consume content mostly from a smart phone, tablet or a computer, but needs a TV to see it bigger, you should get Chromecast. But if you are a TV person, where you just want to surf for interesting videos to watch, you should get Roku. Of course, all these will change when Apple introduces their next Apple TV. Apple TV already has a great screen casting experience, and it already has a lot of TV content available. If the next Apple TV opens up more developer support or adds more contents, it does not matter if you are an App person or TV person anymore, you only need one device — the Apple TV — to fill both of your needs.

Amazon EC2 grows 62% in 2 years

I estimated Amazon data center size about two years ago using a unique probing technique that I came up with. Since then, I have been tracking their growth (US East data center monthly, but less frequently for all data centers). Now is the time to give you all an update.

Physical server

I will not cover the technique again here, since you can refer to the original post. But I want to stress that this is measuring the number of physical server racks in their data centers, hence deducing the number of physical servers. There are other approaches, such as Netcraft that measures the web facing virtual servers. However, Netcraft only measures the number of virtual servers (and only a subset of it, those that are web facing), where a virtual server could be a tiny Micro instance, a very small slice of a physical server. If you want to know how big EC2 is physically, this is the definitive research.

The following figure shows the growth of the US East data center.

useastgrowthtrend

Number of server racks in EC2 US East data center

The growth in US East data center slowed down in late 2012 and 2013, but the growth has picked up quite a bit recently. It only added 1,362 racks between Mar. 12, 2012 and Dec. 29th, 2013, whereas, it has been adding on average 1,000 racks per year between 2007 and 2013. Then, all of a sudden, it adds 431 racks in the last month and half. However, other EC2 data centers have enjoyed tremendous growth in the two years period. The following table shows how many racks I can observe today, and at the end of last year vs. two years ago by each data center.

data center # of server racks on 3/12/2012 # of server racks on 12/29/2013 % growth 3/12/2012 to 12/29/2013 # of server racks on 2/18/2014 % growth 3/12/2012 to 2/18/2014
US East (Virginia) 5,030 6,382 26.9% 6,813 35.4%
US West (Oregon) 41 619 1410% 904 2205%
US West (N. California) 630 847 34.4% 950 50.8%
EU West (Ireland) 814 1,340 64.6% 1,556 191.2%
AP Northeast (Japan) 314 589 87.6% 719 229%
AP Southeast (Singapore) 246 371 50.8% 432 75.6%
SA East (Sao Paulo) 25 83 232% 122 488%
Total 7,100 10,231 44.1% 11,496 61.9%

There are a few observations:

1. The overall growth rate shows no sign of slowing down. From Jan. 2007 to Mar. 2012, EC2 grows from almost 0 server to 7,100 racks of servers, roughly 1,420 racks per year. From Mar. 2012 to Feb. 2014, EC2 grows from 7,100 racks to 11,496 racks, which is 2,198 racks per year.

2. Most of the growth is not from the US East data center. The Oregon data center grows the most at 2205%, followed by Sao Paulo at 488%.

3. There is a huge spike within the last 1.5 months. The number of racks increased from 10,231 to 11,496, adding 1,265 racks of servers.

The overall growth in the last two years is 62%, which is quite impressive. However, others have estimated that AWS revenue have been growing at a faster rate of more than 50% per year. The discrepancy could be due to the fact that AWS revenue includes many other AWS services including some new ones they have introduced in recent years, and EC2 is just a smaller component of it.

Virtual server growth

Another way to look at EC2’s growth is to look at how many virtual servers are running. Since a customer is paying for a virtual server, looking at the virtual server trend is also a good predictor of EC2 revenue.

As part of our probing technique, we enumerate all virtual servers, regardless whether it hosts a web server or not. If a virtual server is running, the EC2 DNS server will have an entry translating its external IP address to its internal IP address. By counting the number of DNS entries, we arrive at an upper bound of the number of virtual servers running (it is an upper bound because when a virtual server is terminated, the DNS entry is not deleted right away).

The following figure shows the number of running virtual servers (active DNS entries) in the US East Data center in orange. AWS also publishes the number of IP addresses that are available periodically, and we have been tracking that over time. The blue points shows how many IP addresses that are available to assign to virtual servers. AWS has been constantly adding more IP address allocation ahead of the expected growth.

AWS number of running virtual servers

EC2 number of running virtual servers

The green dots show the total available IP addresses across all data center. It is an upper bound on the maximum number of virtual servers EC2 can run. On Dec. 29th, 2013, our data shows there are up to 2.97 Million virtual machines that are active. You can put in an assumption of the average price AWS charges for an instance to roughly estimate EC2 revenue.

Density

From our data, we can also derive the density — the average number of virtual servers running on a physical server. On Mar. 12, 2012, there are 120 virtual servers running on each server rack. However, on Dec. 29th, 2013, this density has increased to 245 virtual servers per rack. Either the Micro instance is gaining popularity, or AWS has been doing a better job of consolidating their load to increase the profit margin.

Parting comment

I have not been blogging much in the last two years. You may be wondering what I have been doing. Well, I have been working on a startup, today we finally come out of stealth mode, and we are officially launching at the Launch Festival. It is an iPhone app, called Jamo, that brings dance games from Wii and Xbox to the iPhone. If this research has been helpful to you, please help me by downloading the App, and give us a 5* rating. You can read more about the App in a previous post.

Forget Wii or Xbox, your favorite dance game is now on iPhone

Do you love to dance? Do you play dance games? If you ever bought a dance game on Wii, then you know how much fun it could be.  Now you can have the same fun without even owning a Wii.

We have been working on an iPhone App, called Jamo (dance game on iPhone). It turns your iPhone into a Wii console which connects to your TV wirelessly. Then when you pick a dance routine, the iPhone turns into a Wii controller. You then hold the iPhone like a Wii controller, and the Jamo App tracks your motion with the built-in sensors (gyroscope and accelerometer) and scores your dance performance.

jamo_illustration2

In addition to following along other people’s dance routine, you could easily create your own dance routines. Simply hold the iPhone while you are dancing, iPhone uses the built-in sensors (gyroscope and accelerometer) to record your dance moves. Creating a dance game is no longer limited to big game studios, you can be the star!

05_Create

The game is now in Apple App store , give it a try. If you like it, please leave us a 5* review 🙂 Thanks!

Cloud is more secure than your own hard disk

I had several feedbacks from my last post on the Outlook Attachment Remover from my colleagues. The number one response is: “Do not put our client’s data there, even if encrypted, it is against the policy”. In this post, I will discuss why Cloud is secure and what a sensible company policy should be.

When CIO gives us the company laptop, we promise to take full responsibility for it. We are expected to set a strong password so that no one can logon to our machine, and we are expected to lock our screen whenever we are away. When clients send us their confidential data, they expect us to secure it in areas where only we have access to. We do not need client permission to store the data on our hard drive because we have promised to our CIO and our clients that we will guard our laptop and hard drive.

When we request a bucket from Amazon S3, the bucket, by default, is readable/writable by us only. Similar to a password, our access to the bucket is guarded by our Amazon credential, which includes both a 20 alpha-numerical characters of Access Key ID and a 40 alpha-numerical characters of Secret Access Key. We promise to keep the Keys to ourselves and Amazon promises the access right works as designed. So, just like our hard disk, the bucket is ours and ours alone. Why should not we be able to store our and client data there? Why do we need client permission?

As much as we promise, accidents do happen. Our laptop could be infected with virus and Trojan horses, we could lose our laptops, Amazon security could be breached. In the past year alone, I know at least two incidents where our company laptops were stolen. In contrast, I have not heard ANY S3 security breach since they launched their service three years ago. It is a more dramatic contrast than you think because S3 has millions of customers and it hosts 29 billion objects, whereas, our company has much fewer employees and far fewer number of laptops. So, is our hard disk more secure than S3?

Since no one can say their system is 100% secure, we have to put in measures to guard against the rare events. Our company laptop has encryption software installed. When the laptop is lost, we are safe because no one can read the data.

 Now, if I encrypt my email attachments, including client data, and put them in my own S3 bucket that is readable/writable by me only, and hold on to the password to myself, why would I need client permission? Why is it not secure? Why is it against the company’s policy? If anything, based on the past track record, CIO should ban us from storing data on our hard drive instead.

An “unlimited” email inbox in the Cloud

Do you work for one of those stingy companies who only give you a tiny email Inbox? My CIO gives me 120MB, which runs out two month after I joined the company. Even if you have a bigger one, it will run out fast enough because everyone likes to send large attachments around.

If you are like me, you will spend hours each week cleaning up your Inbox, archiving your emails, and backing up all your data. Well, I am happy to report that help is finally here. There is a new Outlook Attachment Remover from a startup that can detach your attachments and embedded images and put them on the Amazon Cloud (i.e., S3). For $0.15/GB/month (the price Amazon charges), you can get rid of all the hassles and have unlimited storage.

When I first started using their software, I did a few experiments to see how well it performs. I have an archive folder which has 12000 messages and it is about 890MB in size. The size is small because I deleted most attachments before I put the emails into my archive folder. After I converted them, my archive folder shrinks to about 400MB, which is very impressive since I did not have many attachments in the folder. I guess those embedded images take quite a bit of space.

Next I ran the same test on my working folder. My working folder has all important emails that I need to keep around for reference. They all have their original attachments because that is the reason I keep them in my working folder. It has 400 messages at about 200MB. After the conversion, it is at 25MB. Wow! That is a size that I can fit into the mailbox my CIO gives me.

After I converted my old mail, I just enabled the “auto-detach” option. So whenever a new mail arrives, the attachments are automatically stripped and stored in Amazon. If I want to convert it back for whatever reason, all I have to do is click the “re-attach” button.

I have been using the product for a few weeks and I am quite happy with it. I hope you find the tool useful too.