If there ever were a time when perception Trumped reality (capital T intended), this would be it. So much of what we see these days that looks real just isn’t. I can connect a lot of this back to Steve Jobs, who was the master at this in the tech world. However, I’m worried that too many people don’t realize that there were several times Steve missed jail by the skin of his teeth, largely because he did amazing work under pressure.
There isn’t anyone at his level at the moment, suggesting that much of the activity I’m seeing will end badly. A case in point is Intel’s obvious
fake news of 5G at the Olympics. 5G is more than a year out, which means that Intel is clamoring for massive media attention in an effort to convince the world that it is the leader in the next-generation network.
Given the huge focus on cheating — well, stopping it — at the Olympics this year, Intel’s move is either incredibly gutsy or incredibly suicidal, depending on how it plays out. I’ll grant you that from big risks come big gains, but given how Intel has been executing of late, the odds of this ending well aren’t good.
I’ll focus on Intel’s fake 5G Hail Mary and close with my product of the week: The Noon Switch, which is one of the most interesting home automation switches I’ve seen yet.
Background of the Story
I’m fascinated by the Qualcomm vs. Apple/Intel war for a lot of reasons — not the least of which is that it seems incredibly tactical with a very low upside and massive downside, particularly for Apple.
Apple has been fighting a delaying game, but the collateral damage of being nearly locked out of Qualcomm’s engineering assistance is clearly having an adverse impact on its ability to execute. In addition, the animosity between the two firms is such that Apple likely realizes that the only way this doesn’t come back to bite it hard in a few years is if it can kill Qualcomm.
This has many of us speculating that Apple is behind the Broadcom hostile acquisition, which is intended either to distract Qualcomm massively or to allow Broadcom to dismantle Qualcomm.
In the wireless world, Qualcomm is the 500-pound gorilla, and while Apple is incredibly powerful, it hasn’t had a hit product since last decade. In addition, it is only able to hold its profits and revenue growth through increased prices and through pounding on its suppliers. At some point that no longer will work, as there is a limit to how much people will pay for an iPhone, and suppliers can’t live off nothing. In other words, there is hard limit on driving down costs.
Eventually, Apple is going to go through a massive correction. Not being timely on 5G could be the trigger, as it is doubtful that people will be willing to fork over a 30 percent to 60 percent premium for a phone that is seen as old and slow. That’s what will happen if the 5G boat arrives and Apple isn’t on it. Without Qualcomm, it is off that boat — and right now, it is off that boat.
To address the 5G problem, Apple needs Intel to give it 5G. However, Intel is at least a year behind Qualcomm, by my estimate, and Qualcomm seems to be moving faster. Of course, much as we’ve seen with the Olympics, when there is a ton of pressure on winning, and the athlete or team isn’t competitive but desperately needs a win, many are tempted to get “creative” and hope they don’t get caught.
Allow me to digress for a bit to explain how I got here. I’ve been following 5G closely because it will be massively disruptive. The massive jump in wireless cellular speed is expected to impact everything from cars (which will use it to accelerate autonomous car viability) to wired connections for their PCs because wireless finally will be fast enough.
You may no longer need your cable company, for instance, and new high-end TVs may start to ship with built-in 5G — you just plug them in, and all your streaming stuff magically appears.
The change could wipe out Intel’s dominance in PC space, because a pervasive 5G connection could allow access to nearly unlimited cloud power (a direction that Microsoft is exploring with its Connected PC initiative and Apple is exploring with the iPad Pro, even before 5G launches next year).
While both Apple and Intel likely have at least 12 months, and maybe 24, both firms will be screwed if they don’t massively change this dynamic. I’m having trouble seeing how, even in a best-case scenario, Intel can go from a processor company to a modem company in 24 months. The hole it is in is really deep.
I, and a great many of my peers, have been watching 5G very closely, so when Intel announced it was bringing 5G to the Olympics, some of my peers who are in country are looking at what Intel is setting up, and it isn’t 5G at all. Much of it is WiFi, and while Intel will be able to use this technology to emulate some of the experiences — which Intel does well, by the way — it has nothing to do with 5G.
I’ve seen this done very successfully in the past. IBM, back in the 1990s, had the best marketing organization in tech. Its CEO, the only one hired from outside the company, came from Nabisco. While he didn’t know squat about technology, he really understood that perception Trumped reality.
So, when he saw the coming wave of e-commerce and found out that HP had a solution but IBM was years behind, he rolled out a massive marketing program, broadly stating that IBM was the leader in e-commerce. That stalled the market long enough for IBM to deliver, and HP, which actually had a product, was screwed.
That was before the social media era, when most analysts worked for a few large firms or for companies, so there weren’t a lot of folks who could yell foul. Even when we did, it went to a small number of subscribers and not the world. I think that dynamic is important here, but it is hard to believe that Intel doesn’t know that.
Unlike HP, Qualcomm
faces an underfunded hostile takeover. Qualcomm also has been
undervalued significantly, particularly against this massive 5G opportunity.
If Intel can convince the market — even for a few months — that it has bypassed Qualcomm, then Qualcomm’s stock should drop enough for Broadcom to execute and shut it down. That would shift both the short- and long-term threats from Qualcomm to Apple.
However, Broadcom then would move into Qualcomm’s space and likely would replace it, making Apple happy but leaving Intel flapping in the wind. It would be another outcome that would make Andy Grove’s advice to run from Apple like your life depended on it extremely relevant.
Wrapping Up: Will It Work?
Certainly, the strategy I’ve laid out could work. Qualcomm is very light with marketing. Although it has reversed its recent foolish policy of not having a CMO, the new CMO is not yet up to speed.
Also, I don’t think Qualcomm fully understands the threat; it certainly hasn’t resourced an adequate response, given the terminal risk.
On the other hand, Intel’s strongest CMO was Dennis Carter, and even at its strongest Intel was never in the same league that the old marketing team at IBM was. No tech company ever has been, with the exception of Apple under Jobs.
If I know about this, virtually every analyst that covers 5G knows about this, and most of us are on social media — so expect the calls of foul to be numerous and impressive. (I just left a huge meeting of my peers and this was mostly what we were talking about.)
So, the likely outcome is that Intel’s efforts at the Olympics — an event that is about as anti-cheating you can get — will overwhelmed by industry experts screaming foul. I don’t see how that ends well for Intel. If Qualcomm’s new CMO spins up, well, it could get worse.
It will be an interesting week — but between you and me, I kind of wish tech firms would go back to bringing out great products and not be defined by litigation,
insider trading, and fake news. Just saying…
I’ve been following home automation since the late 1970s. It mostly has been a frustrating process defined by firms that didn’t want to create products that would work reliably.
My last home and my current home are
Insteon homes. Insteon works great but it is hardwired and often requires switch upgrades (technology changes) and I’ve been shocked so many times doing that, that I now have serious issues just touching the switches. I’ve argued for some time that these things need to be modular so that they can be replaced easily. Also, I’ve long felt that they needed to look cool, so visitors could see you had something special.
One of the big advantages of home automation is that your home looks occupied even when you aren’t there. Lights come on when you need them and are off the rest of the time. If you need light you can light the entire house up, and when you go to bed, one button turns everything off.
You also can really piss off your spouse by controlling the lights remotely (wait — maybe that isn’t an advantage).
If you have streaming security cameras, you can fire up lights to capture images, scare, or just annoy folks around your home when you aren’t there. More huge positives: You save power, you are more secure, you gain far more convenience, and you can freak folks. (Yes, I’m twisted, sue me.)
Noon Switch, developed by some folks out of Nest, does all of this. It also addresses both of my concerns. While you initially must wire it in, it has a modular base that can be upgraded by snapping in a new control module.
Noon Light Switches
In addition, the primary switch has a display and sensor on it, so it both looks cool and will work as an occupancy sensor. Sadly, it doesn’t interoperate with Insteon, and I’m not yet motivated to replace the switches I have (about 80 of the damn things). However, were I starting from scratch, I’d seriously consider Noon as a better alternative, mostly because it is more easily upgraded.
It is clear this technology hasn’t settled, so there likely will be a number of options in the future. However, because the Noon Switch is the best home automation switch I’ve seen yet, it is my product of the week. If only it interoperated with Insteon… .