Design Thinking: User Needs vs. User Wants (What I love about my Aeron Chair...)

If you haven't sat on one of these chairs, I'd highly recommend it (you can always just go to your Local Herman Miller Show-case if your work or friends don't already own one). As a user it's pretty much the perfect chair. I don't think I've sat in a more comfortable chair (when fully configured properly), especially with the optional lumbar support at the back. 

(Not all companies are willing to invest in their employees, but it's definitely a luxury I've totally enjoy at my office.)

(My actual chair - a 10+ year old model)

Herman Miller has always been knowing for their high-end furniture, but when they invented the Aeron, it was a game-changer. I remember being in a fancy dot.com start-up and getting these chairs! It was all the rage, but it was a chair that cost many times more than it's traditional alternatives. (Today's Black-Friday sale @ HM had it at $577.15 from $679.00, but I distinctly remember it being closer to $1000 earlier on.)

This is what the HM sites says in it's description:

The Work Chair Redefined

Aeron changed the way everyone thought about office chairs—from its revolutionary look to its advanced ergonomics to the fact that it's 94 percent recyclable.

Instantly adaptable to all the motions you go through every day while seated, Aeron provides healthy comfort and balanced body support. Its innovative suspension and easy-to-use adjustment controls let the chair move effortlessly as your body moves.

(http://store.hermanmiller.com/Products/Aeron-Chair)

If you haven't already, I encourage you to look at the Design Story feature @ the HM site. 

(Prototype - http://store.hermanmiller.com/Products/Aeron-Chair#story)

(Above is a great example of a low-fi model. In the video, Stumpf talks about another prototype as "just ugly". A topic for another day, but prototypes are great! Sketches are great! Look at how many were created during the Aeron design! Think about the 50lbs of clay from the last blog.)

From the web site there are many quotes, but these are a brief splattering of the most "telling" ones:

"They threw out all preconceived notions of what a work chair should look like."

"Function Is Form"

"We wanted a totally new kind of chair.

"I want to sit on this really bad."

The chair we are looking at today, the first Aeron, over 20 years old (designed in 1992) was a disruptive innovative change. The chair won so many awards and it's crowning achievement is that it's part of the MoMA permanent collection. Yet how could a chair so beloved today actually almost not make it to market?

If you've read Malcolm Gladwell's Blink, it tells of the chair didn't do well.

• 4.5/10 for Comfort Scale
• 2-3/10 for  Aesthetics Scale

It actually didn't even meet min. score (7.5) that Herman Miller internally puts on Test Group ratings before product release. It was actually called "The Chair of Death" by in the 1st group. Yet luckily Max Depree the Chairman and CEO of Herman Miller at the time had the foresight to ship it regardless. This is his explanation:

“We are a research-driven product company. We are not a market-driven company. It means that we intend, through the honest examination of our environment and our work and our problems, to meet the unmet needs of our users with problem-solving design and development”

- Max Depree (Chairman and CEO of Herman Miller, Inc)

Notice that Depree clearly understood the role and limitation of Market Driven data. He had the courage to forge forward and now the chair he oversaw is now in the MoMA. Yet that wasn't blind-faith, it was because he knew his guys *knew* users. The product was too disruptive to get an accurate Market Target Group rating.

*****

So why did I write this post? Was it simply just because I wanted to talk about the amazing chair that I've sat on for far, far too long? No. I believe that today far too many people looking at Design Thinking confuse interviewing Users for their Insights with asking consumers their Opinions. In Design Thinking, especially at the Empathy stage, I would never give a survey on a final product and ask them to rate from 1 to 10 what they thought of Comfort, Aesthetics, Usability and then using some fancy math to determine how to optimize those parameters.

It sounds cliche but simply Users don't know what they want. As Design Thinkers if we get "Lazy" and try to get end-users to design products, we will never get Disruptive Innovation. At best all we can is slightly better, incremental development (ie a prettier iPhone, etc). At worse we get something totally unusable, like the Car built for Homer.

(http://onscreencars.com/tv/the-homer-the-car-built-for-homer/)

"A camel looks like a horse that was planned by a committee"

- Sir Alec Issigonis

Users are great at being Users, but usually are very poor Designers. That's why even in Usability Testing we *never* ask questions which lead a user to offer an alternative design. Questions like: "Oh, so you don't like that button? How would you like to see the button?", rather we're about the why: "Oh, so what makes that button difficult to use/hard-to-find/etc?".

So what are Users good for? Why are they SO vital to Design Thinking? They are vital because:

"It's the user's most primal needs that drive our insights which are the basis for our designs."

         User Need ==> Insights ==> Design Ideas

Users don't mean to, but often they aren't trained to separate 'actions' from 'intents', 'opinions and prejudices' from 'feelings and raw emotion'. When we do Design Thinking practically in our teams, we often are asking each other what is the "raw" feeling there, what is the underlying motivation. (Think: Toyota/Kaizen's 5 Why type of approach).

As Malcolm Gladwell put it in Blink:

“The participants in the early experiments weren't telling the testers how they really felt; they were telling them how they were prejudiced against something so different from their experience.”

- Malcom Gladwell (Blink - 2005) 

If you haven't done so already, I suggest looking at my previous blog on Levels of Insight. As we move up the hierarchy we need to become more and more empathetic, it's not up to the user, but the Design Thinker to be properly trained and educated in how to extract those insights. We need to asking the right questions and tune-out the noise.

To become a great Designer I believe you need to ensure that you are not falling in the trap of being caught up with lower insights, fraught with prejudice and fear, but are mining the more deep-seated core "needs" which will drive those monumental "insights". To be honest it's hard work...

    User Interviews != Market Research Panels

If you want to "do" Design Thinking correctly, spend the time upfront with doing single User Interviews that will drive your Empathy stage. Use those interviews to drive your ultimate single Character Composite and then create your Point-of-View and How-Might-We statements in your Define stage.

To end off off, if you also haven't seen the video from the late Bill Stumpf from the Herman Miller sit, it's just great. His best quote is:

"I enjoy myself.. and I do it through Design" -  Bill Stumpf (1936-2006)

(Not surprisingly the video doesn't mention any of the difficulties that Malcolm Gladwell outlined in Blink. It almost makes you think that users loved it on the 1st try! However we know that wasn't really the case. However history and the 'real' market have definitely vindicated Bill Stumpf,  Donald Chadwick and Max Depree.)

Let's get to "WOW". Hope that helps...

Wayne Pau

p.s. Besides reading, Blink and looking at the HM site, another great article on Aeron is on Barkham Office Furniture website here:

http://www.barkhamofficefurniture.co.uk/blog/why-we-love-herman-miller-aeron-chairs-585/

Design Thinking: Quantity vs. Quality (aka Getting to 50lbs of Clay...)

(From Wikipedia)

It's not a new story, but when talking about Quantity vs. Quality there are definitely some misconceptions. However one parable often told about this is about a Ceramics Class. It's actually reproduced in the book Art & Fear, which I got from LifeClever blog entry:

The ceramics teacher announced on opening day that he was dividing the class into two groups. All those on the left side of the studio, he said, would be graded solely on the quantity of work they produced, all those on the right solely on its quality.

His procedure was simple: on the final day of class he would bring in his bathroom scales and weigh the work of the “quantity” group: fifty pound of pots rated an “A”, forty pounds a “B”, and so on. Those being graded on “quality”, however, needed to produce only one pot”albeit a perfect one”to get an “A”.

Well, came grading time and a curious fact emerged: the works of highest quality were all produced by the group being graded for quantity. It seems that while the “quantity” group was busily churning out piles of work ”and learning from their mistakes” the “quality” group had sat theorizing about perfection, and in the end had little more to show for their efforts than grandiose theories and a pile of dead clay.

I feel almost like Nissim Nicholas Taleb (author of The Black Swan) when I point out that there is often this fallacy that its much more efficient if we must focus on Quality and that it's mutually exclusive from focusing instead on Quantity. 

In fact as counter-intuitive as it might sound, the opposite is actually true. I have seen the empirical evidence of this and this is why so many of today's ideologies (Agile, SCRUM, Design Thinking) all are set-up to constantly iterate, evolve and improve. (If you want proof of how this works look at the Intel example in Jim Collins' Great By Choice. Continued innovation is a staple of long-term success.) 

Mathematically this should make sense, but this isn't the point I'm talking about. The "Infinite Monkey Theorem" states that a monkey given enough time at a typewriter could reproduce all the works of Shakespeare. However I'm not advocating randomly trying things and by shear volume making the next great product. I'm certainly not advocating getting more monkeys and more and typewriters! Design Thinking eliminates the need for this type of luck-based brutal force type of approach. 

However, what I feel is understated today is the 'amount of quantity that' people should suspect a project needs before it's 'mature'. Bill Buxton in Sketching User Experiences suggests that good 'sketchers' may come up with 40+ sketches a day! A good Design Thinking project has multiple iterations, often starting with very quick, low-cost, low-fi prototypes and expanding to more elaborate, hi-fi prototypes when the team is more confident on what the users wants.

It's important to note that these prototypes go through iterations. Things changes, new ideas are introduced, but overall each successive prototype is built upon the previous version. Each one (generally - there are some lulls and backtracking...) becomes better than it's predecessor. So back to the Ceramics example, even more importantly if we were to line up all the pots by chronological order, we'd clearly see the progression of skill and mastery.

This is why Design Thinking is tightly coupled with building prototypes and more accurately sometimes called "Design Doing". Often times Design Thinking teams are crippled at a decision point and as Design Thinking Coaches we're encouraged to help them push through it by being decisive and often taking a risk. The reason for this is because we don't want teams stuck or bogged down by indecision. We'd rather a team make a choice, prototype it and the most importantly *test* it out on users. (At that point it often much quicker than just trying to guess what the user would like better...)

This is what I believe was equivalent to the "Quality" ceramics group was doing:

...the “quality” group had sat theorizing about perfection, and in the end had little more to show for their efforts than grandiose theories and a pile of dead clay

Show me a team that has a large graveyard of prototypes and sketches and I can almost guarantee they are being productive. What Design Thinking is not is simply a framework for brainstorm and evaluating ideas. It's an overall systematic approach of being in user insights that drive an iterative, feedback based approach to improve dramatically the odds of creating user-driven products.

Being of Asian decent, I can't resist the opportunity to use this famous quote:

"I hear and I forget. I see and I remember. I do and I understand."

- Confucius

Even 2500 years ago, we knew that doing was more important that just listening and observing. As sacrilegious as it sounds, I'd almost modify this to read:

"I hear and I forget. I see and I remember. I do and I understand...

...I then keep doing over and over and over again and I get BETTER." 

- Confucius + Wayne

(If you've ever seen small Chinese children learn to write their first 5,000 Chinese characters, you'll understand what I mean!)

Still don't believe why quantity focus triumphs just quality focus? This is why rule #2 for Brainstorming from Stanford d.school is:

"#2 - Go for volume. Getting to 100 ideas is better than 10, no matter what you initially think about the “quality”. Try setting a goal for the number of ideas you’ll get to in a certain amount of time to provide some stoke."

So I guess my main question to you if you're doing design thinking is "How many ideas and prototypes have you been through lately?" Are you getting Quality via Quantity from your Design Thinking team?

One of the most famous quotes about volume is likely this one by Thomas Edison

"I didn't fail. I just found 2,000 ways not to make a lightbulb; I only needed to find one way to make it work." - Thomas Edison

However, I see the # of attempts anywhere between 2,000 to 10,00, but I think it's more likely 6,00-ish, according this quote from Franklin Institute:

"Before I got through," he recalled, "I tested no fewer than 6,000 vegetable growths, and ransacked the world for the most suitable filament material." - Thomas Edison

Reached your 50lbs yet? (.. be it 200x post-it ideas, 30x user interviews, 20x prototypes, 10x iterations, etc) Ensure you're setting a worthy Quantity goal constantly with your Design Thinking initiatives!

Hope that helps...

Wayne Pau

p.s. Just remember you still have to put in the time and that means actions. Just remember Malcolm Gladwell 10,000 hrs theory (also clearly stated in his Outliers book). Hitting the jackpot product in only a few iterations or prototypes is just getting lucky. If you want to take luck out of equation, you need to iterate and you need to keep going back to your users to get feedback and improve, evolve and re-factor.

Design Thinking: Levels of Insights (Pau's Hierarchy of Empathy)

So... following up the Empathy video from the Cleveland Clinic in our last blog entry, I thought back to how we do User Interviews with Design Thinking and how we try to 'mine' core insights view User Empathy. As I was trying explain this, I came up with a quick and dirty "Hierarchy of Empathy" that I believe helps to explain the levels of empathy or insights we can get from interacting with users.

I largely based this on the Stanford d.School Bootleg Empathy Mapping tool. As I was trying to explain the Empathy Map, that got me thinking about framework to help explain to reach those special, deep, inferred "insights" during User Interviews.  We use this at SAP for Design Thinking User Interviews, as this helps to formulate the notes from User Interviews in a useful grouping. 

Empathy Map - Stanford d.Sdhool

It's a little like Maslow's Hierarchy, so I'm going to call it:

 Pau's Hierarchy of Empathy

(Pau's Hierarchy of Empathy)

The hierarchy has 5 levels, (0-4, I must be a programmer... *hehe*), where:

Level 0 - "IGNORE" - General Apathy

-------------------------------------------------------

Level 1 - "LISTEN" - What I am Saying...
Level 2 - "OBSERVE" - What I am Doing...
Level 3 - "READ" - What I am Thinking...
Level 4 - "EMOTE" - What I am Feeling...

Levels 1-4 match up directly to the 4 quadrants of the Empathy Map. On the left is the "Observed" or Level 1 & 2 insights and on the right is the "Inferred" or Level 3 & 4 insights.

So in more detail...

Level 0 - is happens when developers create apps without even considering or thinking about the user. This is the worse way to develop or design anything. By the very nature not knowing or not caring enough to find out about end-users, they almost guarantee they will have no meaningful insights.

(This mirrors most of the 7+ billion people in the world you've never met or know anything about. Someone once said that "Apathy" is worse than "Hate". At least with hate, you need to know what you hate. It's the "Takes ones to know one" thing... You don't even know who they are.) 

Note: I draw the line between level 0 and Level 1, because below this line, there is no real quality "user-driven insights". End-user need is not driving the project at this point.

Level 1 - is the first step to cater to the needs of users. The bare minimum is know your end-user enough to communicate to/with them. To have a "common" language when you can 'listen' (and not just hear), what the user is saying. The limitation here is that the Design Thinker still needs to interpret what is said within their own understanding or world-view. 

(This mirrors strangers who you may strike up a one-time conversation with. You have very little background or context, but at least you are able to talk to them. For example, travelling in a new country, while you might technically know the language you could be easily "confused" by an unfamiliar culturally based idiom that wasn't meant to be taken literally.)

Level 2 - is the second step to gather the true needs of users. Unfortunately as we discuss often in Design Thinking people sometimes say one thing and do another. Ethnography is basically a branch of research that involves just 'observing' subjects. Words can sometimes be misleading, but actions have an "honesty" to them. 

(This mirrors people you interact with for longer periods of time and know or judge/assess them by how they interact with you, not just what they say to you . You know their body-language and can read their gestures and actions. That mean-looking colleague just bought you a chocolate bar for no reason, shows maybe he/she doesn't hate you...)

Level 3 - is the start where the designer needs to intimately understand the user as they move away from "observed" insights and into "inferred" insights.  I used 'read' here as in somewhat like "mind-reading". As we all know, there are many things we as human think, but never act upon. There are also many things we want to do, but never actually get around to doing. 

(This mirrors people who can communicate non-verbally with you. Sometimes you can tell what is on their mind without them telling you verbally or non-verbally. When done correctly, there is less chance for being mislead or misinterpreting something as these are in fact the motivations or 'means reas'. If it were real, telepathy would be a great tool, but in its absence we use a combination of context, observations and conjecture to come up with our 'best-guesses'. )

Level 4 - is the highest level of empathy, where you can 'emote' with the subject. Feelings are like raw emotions and can be the core or root of some very powerful insights. Some of the best designs feed off of our very primal emotions, satisfying some of our very deep seated needs/wants. For Design Thinkers, this is the ultimate or root "Why?" 

(This mirrors the very small circle of intimate people in your life that you naturally feel for and over time become intuitively attuned to their state of mind and moods. You basically know them and can live in their "skin". You can literally "be" them for short periods of time.)

The reality is that as you move up the levels, it takes more much time, energy, training, determination and experience to reach the next level of empathy when interacting and interviewing with End-Users. On the flip side, the higher the level of empathy, the more core the insight. If you want to be a *great* Design Thinker, you want to be moving upwards in the hierarchy, to get those more deep-seated, core insights and drivers. 

Hope that helps...

Wayne Pau


p.s. When I tried to Google this and find something similar to this Hierarchy of Empathy (to ensure I did not copy from previous source), I could only find M.L. Hoffman's "Four Levels of Empathy" (below), which was similar, but different. However the list itself does help to re-enforce that as 'children', we start move up a hierarchy of "Understanding" those around us.

1. Global empathy
2. Egocentric empathy
3. Empathy for another's feelings
4. Empathy for another's life condition 

My source for this was: https://www.msu.edu/~mandrews/mary/empathy.htm

There are a lot of parallel's with Hoffman's 4 levels and my Hierarchy of Empathy. However I've made my divisions much more aligned with the Empathy Map of Stanford d.school's Design Thinking process. 

I apologize in advance to anyone else who might have come with a similar pyramid before mine. It wasn't meant to be radical, just a vehicle for visualizing something I wanted to explain as part of User Interviews.

Design Thinking: Explaining Empathy (In a 4 Min. Summary)

(Cleveland Clinic - Every life deserves world class care.)

Just yesterday I was sort of asked last minute to help introduce Design Thinking to a small team at work. As I was rushing through trying to get some core points down that I could communicate in 30min-to-1Hr cram-session, I came across a YouTube video I used again and again to help explain "Empathy". 

If you have less than 5 mins (it's 4:24 long) to explain to someone what Empathy is and why it's so core & fundamental to Design Thinking, I encourage you to consider this video. 

Even if I had only 30 mins to talk about Empathy  I'd put aside 5 mins to show this video. That's how powerful I think it is.

Cleveland Clinic - Empathy: The Human Connection to Patient Care 

(I originally got this video from Tim Brown of IDEO and also author of Change By Design in his blog post here.)

For me personally, I've been in more hospitals lately that I generally wanted to. After seeing this earlier, I certainly did not look at hospitals the same again.

If the Cleveland Clinic approaches their medical work like they do their videos, I believe they will change the world. They are already one of the US' top 4 hospitals. It's no wonder they have a great slogan:

"Every Life deserves world class care."

Hope that helps...

Wayne Pau

p.s. You might want to dim the lights, there may be moist eyes. This video so falls in line with David Kelley's TED Talk I mentioned in last post about the MRI machine and making it more kid-friendly.

Design Thinking: Creative Confidence

I haven't really talked about DT in a bit, so when read about David and Tom Kelley's new book "Creative Confidence: Unleashing the Creative Potential in All of Us", it really got me thinking. 

(Cover from Amazon here)

For those who have been around Design Thinking for a while, David Kelley is pretty much the 'Michael Jordan' of Design Thinking (and his brother Tom is at least his 'Scottie Pippen' or even more). Being the founder of IDEO and Stanford d.School he is at the forefront of everything DT related. However even more amazing is that his brother, Tom Kelley is also a great force at IDEO and the author of two fundamental books on Design Thinking in The Art of Innovation and The Ten Faces of Innovation. 

(David Kelly - from Stanford d.School website)

However if you listen to David Kelly talk, it shouldn't shock you. He talks about his dad and how he encouraged their family to actually figure out how things worked and actually fix things. He talks about how he works on projects with his daughter even now. 

I haven't read the book yet, but I assume it's likely along the lines of very powerful TED talk he gave in May 2012 on Creative Confidence:

• http://www.ted.com/talks/david_kelley_how_to_build_your_creative_confidence.html

I really encourage you if you haven't heard this powerful talk, to go head and spend the 11 minutes it takes to view it. I have a feeling that for many it will touch you. It doesn't matter if you're a developer or designer. I feel if you're teacher, you should be made to watch it!

In the talk, David talks about CEO types saying they are "Not the Creative Type". He places this as a "Fear of Judgement" many adults have developed. He tells us that with things like Design Thinking, if you "stick" to the process, you can learn to be creative. (My own Design Thinking coach Niels Billou always says "You got to be believe in system...believe in the process...") He states that after his cancer, his new mission is help people "regain their creative confidence". 

Here's an article from Harvard Business Review from David & Tom about Creative Confidence as well. It's a lot like the TED talk, but with some more concrete d.School examples (Pulse reader, Baby incubator, etc):

• http://hbr.org/2012/12/reclaim-your-creative-confidence

If you look at David Kelley 60 minutes interview, around 6:40, they talk about his childhood, where "...he learned the value of building with his hands...".  A great story is how he took apart the family piano, but neglected to put it back (because that was less fun).

• http://www.cbsnews.com/video/watch/?id=50138327n

While I don't want to go on the record as encouraging "failure", Niels would always tell me that over 80% of projects fail. A lot of people don't like to hear that. What if David's mom got upset that not every project of David or Tom's went right or got finished? What if David or Tom's crazy ideas were ridiculed, put down or discouraged? Design Thinking has always been about "Fail often to succeed sooner". It's *never* about never being able to or fear of failing

A great by-product of this interview is that David talks a little about his relationship with Steve Jobs and it humanized him a lot for me. What struck me is that David says that Steve tells him the important things in his life, his kids and focusing on the family. Kids. Not legacy, not devices, not apps.

That got me *thinking*. 

If we as Design Thinkers want to change the world, maybe we don't need to do it with 30 & 40 years olds, but maybe with 3 & 4 year-olds. For me, the lesson is that with my 2x daughters that I can help them best by making sure their 'Creative Confidence' is nurtured, blossoms and never questioned.

OH yeah. Here is blog from Metropolis that I believe has some excerpts from the new book and triggered this blog post in the first place!

• http://www.metropolismag.com/Point-of-View/October-2013/Empathize-With-Your-Customer/#!

Hope that helps...

Wayne Pau

p.s. Yes, if you watch the 60 mins video, it's the same SAP founder Hasso Plattner that helped David Kelley the d.School, to the tune of $35 million. I can also attest that yes, SAP is still very much committed to Design Thinking. Hasso also went on to found HPI School of Design Thinking back in Germany. He and SAP do walk-the-walk.

Fun Topic: Cellphone Economics Part 3 (No Free phones...)

Sorry for lull in posting. It's been a busy few weeks...

(iPhone 5C from here)

Well I guess I was wrong about the iPhone 5c. Turns out the "c" didn't stand for cheap. At $450 it isn't really that much cheaper that it would be a zero dollar phone on 2 year a contract. (Update: confirmed. See here that it's $99 phone on 2 year from Verizon) I don't see that many new people who weren't already planning on buying a iPhone to go ahead and buy the iPhone 5c.

(Turns out the out-of-pocket difference is only $100 on 2 year contract between iPhone 5c and 5s. For my $ I would have likely upgraded to 5s.)

• http://www.usatoday.com/story/tech/2013/09/09/amazon-no-free-phone/2789091/

No "Free" Amazon Phone.

Also it seems that Amazon rumours of a FREE Android phone have been over exaggerated. From the looks of it, it will be "likely" an "at cost" phone, just the Kindle Fire, if it ever launches. If the Kindle Fire HD is around $215, how much would you pay for an Amazon phone? More or less than the 7" tablet? If you cut costs from smaller display and battery, will that offset the cellular modem costs?

My thoughts were the Kindle sold right against the Kobo and Sony reader. 7" is basically the size of a trade paperback and just smaller than a hardcover. Would you attempt to read a whole novel on your phone?

Part of me thinks that people already read *a lot* of email on your phone. Add on top of that, today on my commute I forgot my book, you *always* have your phone on you. This means your more likely to read more, even if it's in shorter bursts.

As a side note, great article on why the Kindle Paperwhite outsold the Sony Librie:

• http://www.fastcompany.com/1781303/real-secret-kindles-success. 

The other part of me feels that the main motivation of a cell phone is being a phone. If the Amazon phone isn't a better phone (or at least a very very good one), why would you sacrifice that to get books which you can already get via Kindle app? Building a WiFi 'tablet' I think is easier than true telephony features. Most phones today have a lot of software and hardware to make calls sound good.

Watch out for Xiaomi?

Yes, it's *that* company that lured a Google Exec away with a $58 million compensation package.

(New Xiaomi Mi3 from here)

From the reports (Xiaomi does *not* sell here in North America yet so I have never played with one) Xiaom Mi is the new 'king of cheap'. In Asian, this phone outsells the iPhone by a huge margin. I think the market in North America is huge for zero dollar phone on contract and maybe this is it.

You believe it? Here is an article showing just how fast these phones are selling:

• http://allthingsd.com/20131014/xiaomi-sells-100000-smartphones-in-less-than-90-seconds/

From my Asian friends, they said they have heard nothing by positive things about it in the news & social media sits overseas.


Asus (Cheap) phones also coming soon?

With the success of Nexus 7 by ASUS, it seems they are ready to enter the phone market in North America. This is possibly via FonePad. Or maybe a totally new device. So far they have been locked out of the market, but with their engineering skills and co-innovation with Google, I see a very good chance of them being successful. If they can get out a Market-Leading 7" tablet for $250, how hard would it be for them to release a 4-5" good phone for under $300?

The bottom line is that I strongly feel like we need better cheap phones to continue driving cellular data and next wave of apps. The feature or dummy phones available today are getting long in the tooth. While they won't make a killing on margin per device, I see whoever can do this win on total sales and revenue. I think too many people are overdue for an update on a lower cost phone and the window of opportunity for major mobile device penetration in North America is now. (Implying the market for $700 and $800 upgrades of bleeding edge devices is drying up for now.)

Overseas where devices aren't usually subsidized as heavily, only the big spenders it seems can purchase devices outright at the high end of prices. Buying a new iPhone every year can add up quickly. Damage, loss or theft of a expensive new can be painful.

Lastly, not every wants or needs a Porsche. Companies like Hyundai are making a very good living selling reasonably priced cars.

So with that, are you, or someone you know looking for a new phone? Thoughts on what you might get?

Hope that helps...

Wayne Pau

p.s. While the talk now is about BYOD, there are stilll companies that give employees company standard issues phone. While a price difference one time of $50 to $100 might not seem like a lot, what if you multiply that out by 500x or more employees every few years? (FYI - that's $25K or $50K a year. Or $250K to $500K for 5000x person company.) I don't imagine that the more expensive product increases productivity that much (or if any at all).

On a related note, it seems Amazon is positioning Kindle now as a BYOD device. See:

• http://www.zdnet.com/amazons-kindle-fire-hdx-a-potential-byod-keeper-7000021409/
• http://www.businessspectator.com.au/article/2013/5/28/technology/how-byod-could-fuel-kindles-fire

UX: Silly Error Messages (Is this Violent & Destructive, ending in Utter Failure?)

This is a quick post. Today, as I was doing some UX work, I got this error in Windows 8:

It was while trying to over-write an image (PNG) with a newer one. 

Two quick reactions:

1. I would hate to be translator @ Microsoft who had to translate this into other languages. How bad is it really? Catastrophic, that must be really really really bad. Better get out my thesaurus so I get the 'tone' just right...
2. As a end-user, I was trying to understand what to do next? I tried it again, got the same error. Then I was thinking, do I need to restart my laptop? So do I prepare for a upcoming crash? Should sell my stocks and prepare for the end of the world?

This is what Webster's dictionary says about the word:

1 :  the final event of the dramatic action especially of a tragedy
2 :  a momentous tragic event ranging from extreme misfortune to utter overthrow or ruin
3a :  a violent and sudden change in a feature of the earth
3b :  a violent usually destructive natural event (as a supernova)
4 :  utter failure :  fiasco <the party was a catastrophe>

So basically my Folder view is like a:

1. A tragedy...
2. A 'violent' and 'destructive' end...
3. An "Utter" failure...

On top of THAT... my only recourse or option is..

"press OK to continue"

Like everything is going to be OK after this Catastrophic event. 

No 'cancel'. No revert. No retry. No where to get additional help or error codes. No support logs. Nothing... 

...Go about my normal business. Move along. Nothing to see here... 

The 'error message' does not match the 'response'. It doesn't seem like an appropriate response. As an end-user (with my Design Thinking/Empathy hat on...) this would irk me. It's like it got me worked up for nothing!

But at last, thanks Microsoft! You made my day. =) Or at least you put a smile on my face... (To be fair, Microsoft isn't the only software vendor to have error messages like this. We all do it... we should just all do it less often...)

Bottom line: I'm going to think twice when I write my next error massage. That's for sure...

Hope that helps...

Wayne Pau

Fun Topic: Cellphone Economics Part 2 (aka. WiFi iPad vs. 4G iPad)

So this is a follow-up to Part 1 in which I compared the iPhone 5 to iPod Touch, which was almost 1/2 the price. I got thinking and said, 'hey wait, the iPad comes in in WiFi and WiFi+4G versions', maybe we have a breakdown for that. Luckily, IHS/iSuppli has come through again:

(From http://www.isuppli.com/Teardowns/News/Pages/New-iPad-32-GB-4G-Carries-364-35-Bill-of-Materials.aspx)

So, when looking at the iPad 3, the main difference is the $41.50 modem. (I believe this is a Qualcomm Golbi, but it's not officially called out. For some reason it's about $3 more expensive than the one in the WiFi iPod Touch.) We also have a slightly more expensive Manufacturing cost, about $0.75, most likely from the need to mount and solder on the chip, maybe antenna, etc. The total difference is $42.25.

The simply math is that $42.25 allows Apple to charge $130 more. That's basically 3x or 308% markup. Compare that to the roughly $52 (Camera + 4G modem) that allows Apple to charge $420, that 8x or 807% mark-up when going from iPod Touch 5 to iPhone 5!. (This is one is "approximate" because I have costed it out totally electro-mechanical differences + labour cost, etc., unlike in the iPad 3). 

Clearly, there is a huge mark-up for making an iPod Touch 5 (entertainment device) into a iPhone 5 (cell phone). 

If you think this is the only place where Apple really gauges people, it's not. Another very obvious area is extra memory aka. NAND flash memory. (BTW, note that Apple isn't the only one to do this.)  For iPad 3 WiFi+4G, going from 16GB to 32GB, it's an additional $16.80, but an overall consume cost of $100, or basically 6x or 595% mark-up. Going from 16GB to 64GB it's an additional $50.40, but an overall consume cost of $200, or basically 4x or 397% mark-up. (Note to self, if you're splurging, it's a better deal to go for the larger 64GB. You're paying less mark-up!)

I *think* this is a BIG reason why all iOS devices don't offer external storage via MicroSD slot is because it makes good business sense *not to*. The going rate today I think is about $50 for 64GB MicroSD. So on any Android with MicroSD slot you are only paying like 25% of the price (or $50 instead of $200) to get at least 64GB of (extra) memory (that you can re-use potentially later down the road). 

Andrew Rassweiler of IHS pretty much sums it up here:

“The NAND flash memory is one of the key profit-generating components for Apple in the new iPad line, as it has been in previous iPads and in the iPhone family,” Rassweiler noted. “Apple makes far and away more money in selling consumers NAND flash than NAND flash manufacturers make selling it to Apple. And the more flash in the iPad, the higher the profit margin there is for Apple.”

(http://www.isuppli.com/Teardowns/News/Pages/New-iPad-32-GB-4G-Carries-364-35-Bill-of-Materials.aspx)

So while there may be concerns with security of having external storage, etc, Apple is definitely taking full advantage of the situation.

Hope that helps...

Wayne Pau.

p.s. So what *if* Apple did offer external storage like Android does? 

Once again with Android  (And from this post, it seems *a lot* actually do) , if it supports SDXC, you could actually get even more memory than just 64MB. The specs say that SXDC can actually hold up to 2TB! Imagine a 2TB iPhone? No need for iPod Classic anymore...

However SD card storage comes at a cost. It's harder to manage from a software point of view and it's a potential security threat or attach point. Yet a big part of the real motivation for for Apple is 'possibly' economics.

For the record, HTC One line (everywhere but Asian) doesn't offer SD Card storage either. So it's not just Apple. 

Fun Topic: Cellphone Economics Part 1 (aka. iPhone vs. iPod pricing)

The question I've been asking myself lately is:

"Are cellphone prices heavily inflated?"

So a few weeks ago I had a posting about the rumoured iPhone 5C release and I had a link to IHS/iSuppli breakdown of the iPad Mini. That got me thinking (which is never a good thing...) as I was peeking around at the pricing of the latest generation of iPod Touches and compared that to iPhone 5.

• iPod 5 Touch 16 GB - $229
• iPhone 5 16 GB - $669 (unlocked)

Pricing from Apple.com

 I was *shocked* (although I probably shouldn't have been) that you could get a iPod Touch 5, essentially get a iPhone 5 without the cellular part for less than HALF the price!

What is the *same*:

• 4" retina display (1136x640 @ 326 PPI)
• Almost identical bodies (iPhone is 7.6mm vs iPod 6.1mm)
• FaceTime HD Camera (720p)
• WiFi & BT connectivity
• Apple EarPod headphones

What is *different*:

• iPhone 5 has 8MP camera, iPod 5 has no camera (only 5MP on 32 + 64MB models)
• Qualcomm Golbi MDM9615 4G LTE modem

I checked to see if IHS/iSuppli had a breakdown of the iPod 5 available for public consumption, but they did not. However I did find the iPhone 5, which I was at least a starting point to do some estimates on:

(From http://www.isuppli.com/Teardowns/News/Pages/iPhone5-Carries-$199-BOM-Virtual-Teardown-Reveals.aspx)

So... basically the total cost of iPhone is $199 in parts and $207 in BOM + Manufacturing in 2012. That's about 29.6% of $699 list price. Now if we subtract out the Golbi modem and camera, that's a simplistic subtraction of $52. That leaves $155, or 67.7% of the list price of $229. (Note: I image if I were cut everything we'd be closer to 50% mark... with lesser processor, etc)

That's *shocking*, that the margin on iPod is HALF of what it is on the iPhone.If we interpolated the same mark-up on iPod as the iPhone, we get $306, which is less than HALF again what the list price is. Now there may be more sub-par components in the iPod that I haven't caught cost-wise, but I can't image that you could get the BOM + Manufacturing costs below or around $100. 

(I'm actually more confident in that, after looking at the iPod Nano breakdown, which  IHS/iSuppli pegged at $43.73. This is with only 8MB and tiny display. There is $40 difference alone in LCD display and $6.45 in memory. That would put that almost at $90.20, and we aren't adding in more costs for bigger battery, WiFi and housing ,etc.)

What are looking at here then? I mean the iPod Touch is the closest thing to a cellphone without a cellular modem. Does this mean that Cellphone Companies and the ODMs are colluding together and inflating the prices of "smart-phones"?

This article from CNET had Luke Westaway discuss a very similar comparison with Asus. However I found the article somewhat unsatisfying considering I have the BOM breakdown in front of me from iPhone 5. Processor only accounts for less than 10% of the build cost.

Bottom line is that cellphones have a inherent "luxury" tax over non-cellular versions. This is probably driven by carriers who want very expensive phones that they can heavily subsidize with multi-year plans.  They want to sell you $700-$900 phones, it makes good business for them. 

Note (again): please understand that I am using information from IHS/iSuppli in my analyst which is by no means official pricing from Apple (as I doubt any exists). I have also made a lot of estimates and assumptions. This article was created for education or entertainment reasons *only*. 

Hope that helps...


Wayne Pau.


p.s. So what does that mean for someone frugal like me who might want a iOS device? (ie. for those Candy Crush Saga addicts...not me...personally, I'm OK with my current phone...) I'm wondering if you're better off with a $0 Android phone that you can share WiFi and buy a iPod 5 Touch. The main drawbacks are:

• you won't have integrated calling and contact book 

• you will have to carry 2x devices

• you have to charge 2x devices

but you could be saving yourself like $400! Like you'd also save yourself some data charges as you're more likely to go free WiFi spots than tether to your Android Phone when given the chance @ Starbucks, etc.

I wonder what the carriers would do if everyone did this? Would that deflate or inflate usage charges as maybe more expensive handsets help off-set data, messanging and voice changes?