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Atari

Image by Matt Yohe

Image by Matt Yohe

Previous reports of Steve Jobs’ death were, like Mark Twain’s, an exaggeration. Sadly, this morning, they are all too accurate. The man who gave the world the iPod, iPhone and iPad, has died aged 56.

Steve’s health issues were well publicised. He suffered with pancreatic cancer, and rumours of his deteriorating health started to circle when he appeared in public, after a long absence from the limelight, looking skeletally thin several years ago. Despite this he seemed to recover and presented several keynote speeches and launch events for Apple’s iPhone and iPad products.

Jobs, who was half-Syrian and raised by his adoptive American parents, was born in San Francisco. He attended high school in Cupertino, California and was a regular attendee at extra-curricular lectures at the Hewlett Packard Company in Palo Alto; he was later hired there and hit it off particularly well with one colleague in particular – Steve Wozniak. And so the first seeds of Apple were sown.

After graduating high school in 1972, and briefly attending Reed College in Portland, Oregon, he returned to California and took a job with Atari before taking a spiritual retreat to India. Shortly after his return he went back to Atari, and enlisted the help of his friend Wozniak in creating a new circuit board for the classic video game Breakout.

Wozniak excelled at the task, eliminating 50 chips from the original Atari design. Noting his friend’s prowess with electronics, Jobs convinced Wozniak that they should build and sell a computer. In 1976, Apple was officially founded by Jobs, Wozniak and their Atari colleague, Ronald Wayne.

Jobs left Apple in 1985 having been relieved of his duties by then-CEO, John Sculley, following the famous internal power struggle and a year of disappointing sales. He went on to found a new company, NeXT Computer, that same year.

NeXT built technologically advanced workstations for the academic and scientific communities but in 1993, struggling after having sold only 50,000 machines, the company abandoned its hardware offering. Jobs switched NeXT’s focus to pure software development and in less than a year turned its first profit of $1.03 million.

In 1996 Apple acquired NeXT for $429 million, and in 1997 Steve Jobs returned as CEO of the company he had founded 20 years earlier.

With Jobs back at the helm Apple’s sales increased dramatically as the iMac and other products underwent a radical redesign, making them not only powerful, but stylish and fashionable to own. The creation of the iPod in 2002 marked the beginning of a branching-out for Apple, and having revolutionised the way we listen to music, Jobs turned his attention to the mobile phone market.

June 2007 saw the launch of the iPhone, which led to the iPod Touch and the iPad and all the Apple products we see on trains, Airports and in offices and living rooms across the world.

In August of 2011 he resigned as CEO of the Cupertino based company, citing health issues. He stayed on as chairman of Apple’s board of directors, and named Tim Cook as his preferred successor – a wish the board happily granted.

Late in the evening of 5 October, it was confirmed that Steve had passed away. He leaves behind a wife, Laurene, and four children.

Everyone who has ever used a smartphone or tablet computer and loves technology owes Steven Paul Jobs a debt of thanks. And we are in mourning.

Rest in peace, Steve.

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The HTC Desire

The HTC Desire

There’s a strange feeling of déjà vu about 2010. In a large part of the technology business it could be 1985 all over again. Once more consumers and businesses are confronted by a bewildering array of devices that seem to do much the same thing, but not quite.

In the mid-1980s it was personal computers. Magazines were filled with advertisements for machines from Apple, Amstrad, Sinclair, Apricot, IBM, Commodore, Atari and a host of forgotten names some of which could run each other’s programs, but most which couldn’t.

This year it’s “smartphones” with large screens and internet access. There are devices running operating systems from Apple, BlackBerry, Microsoft, Google, Linux, Palm and Symbian. To add to the confusion handset manufacturers hide these operating systems under their own “skins” so they look different. Then the mobile operators such as Vodafone, O2 and Orange add their own bells and whistles. It’s all getting a tad confusing.

The recent Mobile World Congress in Barcelona resembled a game of Risk with all sorts of alliances being developed in order to stop the big players from grabbing too much of the board. Everybody was having a go at Google and Apple. (Next year the one to fear will probably be Facebook. It’s only a matter of time before the world’s favourite internet destination moves into mobile.)

It’s not simply the growth in numbers of people using mobile handsets to access the internet, 450 million last year according to IDC, but the possibilities of extracting money from them that’s causing so much excitement amongst businesses. They know how difficult it can be to persuade somebody sitting in front of a computer to enter their credit card details to make a purchase.

A mobile phone can effectively act as a credit card thanks to its built-in security. So-called “micro-payments” are a real possibility. The feeling is that people will spend a few pence on something such as a game, video clip or article if it just takes a couple of clicks on their moby.

Added to this is the falling price of the technology that powers smartphones. Marvell has developed chips which could form the basis of $99 (£64) smartphones. This is reckoned to be the magic price point and it really is cheap if you consider that’s without a contract.

Already the share of the market by what IDC calls “converged mobile devices” is rising very fast, up almost 40 per cent for the last quarter of 2009. It’s a trend that seems set to continue, unless the world tips drastically back into recession.

In this rapidly growing market there are three basic types of business: handset manufacturers, network operators and software companies. But the divisions aren’t straightforward. For instance, Apple, Nokia and BlackBerry develop both hardware and software. Google has its name on the Nexus One handset and could end up running a network. And the networks also put their brand on handsets in various ways.

Behind the competition between these businesses is a wildly varied collection of business models. Two of the big hits of the Barcelona conference were phones using Google’s Android operating system and Microsoft’s Windows Mobile 7, which won’t appear on phones until later this year. The difference is Microsoft charges the manufacturer a licence fee for every device that uses its software. Google gives it away in the hope that it’ll corner the mobile search and advertising market in the way it has for so-called “fixed devices”, laptop and desktop computers. Nokia’s Symbian used on almost half the world’s smartphones is also fully open source as of February 2010, so other manufacturers can use it without charge.

So with all this free stuff, where’s anybody going to make money? “Apps” is the obvious answer. Every handset manufacturer, network and operating system developer is in some way trying to copy Apple’s success. The variations are in how much control is exerted over the apps by the owners of the stores.

Again, there’s a feeling of going back to the early days of PC operating systems. Then, as now, Apple exerted absolute control over the software that could be run on its devices. That was one of the reasons its computers were less prone to problems than, say, those running one of Microsoft’s operating systems which left it up to the user to decide what to run on their PC.

Apple’s continued its old strategy with a rigorous if sometimes arbitrary approval process for its App Store and anything designed to run on an iPhone, iPod Touch or the forthcoming iPad. In contrast, all a software developer has to do to sell applications through Google is to register and upload to the Android Market.

It remains to be seen which model is most effective. Certainly the hit handset of Barcelona was the HTC Desire which runs Android and will be available in the UK next month. In price terms it’s going to be on a par with the iPhone and the smart money’s on Apple making an announcement in June about one or more new models.

The question is whether that will be a smaller, cheaper “Nano” iPhone, following the same sort of marketing strategy as the iPod where Apple started at the top of the market in terms of price and gradually introduced a series of lower-priced devices. If it does, that’ll put it into direct competition with Google which, because it gives Android away free, is more obviously suited to cheaper smartphones. And, of course, Nokia’s Symbian is still the biggest player in the smartphone market and Microsoft can’t be written off.

For the network operators this is very much a two-edged sword. There will be more users possibly paying higher subscriptions, but they’ll be consuming a great deal more data. It’s no secret that there was a drastic underestimation of iPhone use before it launched and now this is putting a real strain on the networks. Customers are going to be extremely disgruntled if their smartphones slow to snail’s pace through lack of capacity.

The networks will have to be upgraded even though the work won’t necessarily provide increased income for operators. Again, the next couple of years are really going to test their business models.

Three, for instance, appears to have benefited from offering Skype on its handsets. The company claims it has 40 per cent of the UK mobile broadband market. Making Skype readily available, however, wipes out the revenue from overseas calls.

That, in microcosm, is the challenge facing network operators. How do they attract and retain subscribers without overloading their systems or throwing away the profitable parts of their business.

Over the next few days we’ll look at what this means for individual consumers and business users including some hints if you’ve decided to buy a smartphone and what new services are going to grab the public imagination.