Top 10 tech blunders of 2012

Top 10 tech blunders of 2012

Feature articles |
By eeNews Europe

They say there is no experience without suffering. Let’s hope those who goofed in 2012 will learn from their mistakes.

Apple loses its way on maps
The engine of the “iEconomy” was already taking a beating over reports of labor abuses at its leading manufacturing partner, Foxconn, when the roll out of the iPhone 5 in the fall was overshadowed by a map-app fiasco. Under new CEO Tim Cook, Apple decided to ditch a reliable Google maps system for a poorly designed and inadequately tested version that led users astray and became the butt of talk-show jokes. The consumer electronics giants apologized profusely and vowed to fix the iPhone’s map app, but reports were still trickling in at year’s end of lost, confused and angry users.

Lesson: Don’t try to reinvent the wheel, even if you are the biggest corporation on Earth.

Who will run Intel?
When CEOs at Freescale and Intel suddenly announced retirement plans this year without naming successors, it struck us as odd. The moves were explained as "a necessary step" by companies that said they were also looking at external candidates.

Once a company conducting a CEO search starts calling external candidates, those people are under no obligation to keep the overture confidential. Fortunately, Freescale’s CEO transition moved fairly smoothly as the company tapped ex-TI executive Gregg Lowe to replace Rich Beyer, Freescale’s former chairman and CEO.
But the succession drama at Intel – which had $54 billion revenue in 2011 – is more intriguing. Why would CEO Paul Otellini announce his retirement six months in advance?

Otellini has reportedly expressed his satisfaction with Intel’s internal candidates. He argued that picking an insider would be the smart path for Intel given the challenges the chip giant faces. But he added, “It’s not up to me, but I think that’s the most likely outcome.”

What happened to grooming the next CEO, which at Intel was an important part of the top job? Are the days of seamless leadership transitions over at Intel? The lack of a clear succession plan at Intel undoubtedly troubles the chip maker’s founders as well as company watchers.

Paul Otellini is leaving his CEO post at Intel. Who replaces him?


The hole gets deeper at HP
In August 2011, our colleague Rick Merritt opined that Leo Apotheker was not the chief executive to lead once-proud Hewlett-Packard out of the wilderness. That view was confirmed in spades a year later when Apotheker’s ill-advised $11.1 billion acquisition of British software developer Autonomy blew up in HP’s face.
Some have called November’s stunning $8.8 billion write-down by HP of the ill-fated Autonomy deal the worst corporate deal since AOL’s acquisition of Time Warner in 2000.

Precisely where HP goes from here is pretty clear: If it survives, it can only go up since it now appears the computer company has just about hit rock bottom.

Meg Whitman has her hands full cleaning up the financial mess at embattled HP.

Google’s Nexus Q flops
Google pulled the plug on its media streamer, Nexus Q, only five weeks after its introduction in June.
Google initially gave away about 5,000 Nexus Qs at its developers’ conference in June, and when the company announced it was delaying the product, it shipped free versions to those who had pre-ordered. Despite promises to “make it better,” the cool-looking black ball device designed to stream video and music won’t be coming back any time soon. Google’s Nexus Web site makes no mention of Nexus Q. Nexus Q was essentially a jukebox that allowed different Android users to stream content to it. Critics said the device cost too much ($299) and did too little.
Google’s failure with Nexus Q exposed its weakness in the hardware business.
It’s important to note that Google is serious about hardware. In fact, the Nexus 4 phone and the Nexus 7 and 10 tablets have proven compelling and are competitively priced. But when it comes to devices designed for the home, Google comes up short. The case in point is the company’s Internet-connected Google TV, unveiled a few years back. Although it is still on the market, it has met only lukewarm consumer reception.
As with any software company, Google has forged a strategy of introducing new products early in their development and revising them on-the-fly. While that approach tends to work for software, it’s tougher to pull off in consumer electronics, especially once consumers pay for an expensive device.

While “software upgrades” are viewed as the new nirvana for many traditionally hardware-oriented CE manufacturers, Google’s Nexus Q, along with Google TV, have provided an invaluable lesson: You need to start with hardware that’s clearly defined and, above all, different.

Google’s Nexus Q: Hardware is harder than software.


AMD, Intel ditch WSTS
The decision by AMD and Intel to leave World Semiconductor Trade Statistics (WSTS) organization in 2012 was short-sighted and harmful to the global semiconductor industry, not to mention both chip makers.
Here’s why it’s a mistake.

Intel and AMD were ranked No. 1 and No. 12, respectively, in worldwide IC sales in 2011. Combined chip sales for the two firms ($56.3 billion) represented 23 percent of global IC sales ($247.1 billion, according to WSTS) last year.

“Given the sheer size of Intel and AMD, their significant share of the worldwide IC market, and their dominance of the microprocessor market (with a combined share of more than 90 percent), there is no doubt that their withdrawal from reporting into WSTS will have a negative effect on the WSTS database,” argues Bill McClean, president of IC Insights.

A reliable database is critical to the supply chain serving every chip company — including Intel and AMD. That supply chain includes raw wafer manufacturers, chemical and gas suppliers, semiconductor equipment companies, packaging houses along with EDA and other software suppliers. “They rely in some part on WSTS data to help them plan and budget their businesses,” noted McClean.

Then there are the unintended political consequences. Without Intel and AMD sales included in the WSTS database, “the Americas IC market could eventually appear much smaller and less important than it actually is,” said McClean.

The Semiconductor Industry Association (SIA) is the voice of the semiconductor industry. The loss of AMD and Intel will weaken “the ability of the SIA to create and establish its policy goals,” McClean warns.

The numbers speak for themselves.

PC pronounced dead
The notion of the "post-PC" era has insinuated itself into technology conversations over the last decade. Still, the imminent death of the PC feels like a shock.
PC shipments are expected to decline for the first time in 11 years, according to market researcher IHS. The PC market is expected to contract in 2012 by 1.2 percent, to 348.7 million units shipped.
The PC industry, led by Intel, continued to nurse false hopes with Ultrabooks. Microsoft has pushed convertible tablets and Windows 8 by running an estimated $2 billion marketing campaign. This is a campaign of denial that signifies one of the electronics industry’s notable blunders of 2012.
You could argue it’s too early to gauge the results of the massive Windows 8 ad blitz. But neither Ultrabooks nor Windows 8-based Surface alone are expected to buck the trend of sliding PC sales in 2013.
Today, consumers have few compelling reasons to purchase new PCs. Practically everything consumers want to do – like posting photos on Facebook, getting directions on Google Map, or e-mail – can be done on mobile phones.
Of course, we’ll all continue to work on PCs at the office, but this alone won’t drive up the numbers for PC shipments, either.

It’s time for everyone to accept the end of the PC era. Just as traditional PCs based on Intel’s X86 CPU and Microsoft’s Windows operating system no longer rule the computing world, the PC industry can no longer depend on the sheer commitment and determination of Microsoft and Intel to drive PC sales ever upward.

Marketing campaigns won’t be enough to save the PC.


RIM, Nokia become irrelevant
Research In Motion (RIM) and Nokia scrambled in 2012 to stay afloat in the smartphone market dominated by Apple’s iPhones and Samsung’s Galaxy S3. It was also the year when both companies lost their market presence, and much of their relevance.
RIM’s blunder was delaying a BlackBerry 10 platform launch until the first quarter of 2013. The company blamed the setback on “the integration of new features and the associated large volume of code into the platform.”
RIM plans a Blackberry 10 launch next month in New York. But the reality is that the six-month delay of the company’s new platform left RIM with no new products to sell for Christmas, plunging it into oblivion in a market where 180 days is a lifetime.
Compared to RIM, at least Nokia launched its Lumia phones in several countries. Initial reports from Europe say that Nokia’s Windows phones aren’t doing badly. Yet, some observers believe Nokia might be in worse shape than RIM since it is dependent on the long-term viability of Microsoft’s Windows Phone OS. Nokia no longer controls its destiny in smartphones.
In contrast, RIM retains exclusive control of its operating system. In December, the U.S. Department of Homeland Security announced a pilot program to test RIM’s new phone and BlackBerry 10 software on its network. Coming from a federal agency that has been phasing out BlackBerry in favor of iPhones, that’s a bit of good news.

While hope springs eternal for BB10, RIM could be still hit hard by reality. Analyst Anil Doradla warned that the U.S. market “continues to indicate the issues that have plagued the company over the past several quarters (such as lack of new OS, weak consumer offering, and threat from competition) have been compounded by RIM hardware getting leapfrogged by the competition.”

Meanwhile, Nokia announced 10,000 job cuts in 2012 alone in a bid to save 1.6 billion euros by the end of 2013. The company will be also selling its head office in Finland. Will those moves be enough?

RIM gets one more shot at relevance when a government agency tests its next phone and operating system.

Japan’s consumer giants stumble
This year marked a turning point for the Japanese electronics industry as major consumer electronics companies, including Panasonic, Sony and Sharp, fell apart as their TV manufacturing business collapsed.
As they scramble to restructure, Sharp took the first step in March by announcing a deal with Taiwan-based EMS giant Hon Hai. Sharp originally agreed to cede to Hon Hai’s 9.9 percent stake in the company, making Hon Hai its biggest shareholder. Separately, Hon Hai’s billionaire founder Terry Gou invested his own money in Sharp’s Sakai fab, gaining a 46.5 percent share. Capable of handling super-large glass substrates, the Sakai fab is the state-of-the-art in LCD panel production.

Originally billed as an historic collaboration between Taiwan and Japan, the soon deal stalled. The central disagreement was a dramatic slide in Sharp’s stock price to about one-third the price that the two sides had specified in March.

In December, Qualcomm said it will invest as much as $120 million in Sharp, making it the struggling Japanese TV maker’s biggest shareholder. Qualcomm, through its Pixtronix subsidiary, will work with Sharp which supplies screens for the latest iPhone. They also will develop new power-saving screens based on Sharp’s IGZO technology.

Hon Hai claimed the Qualcomm’s investment was unrelated to the Taiwan firm’s plan to buy into Sharp, but that looks more like a face-saving statement now that it’s deal with Sharp has hit the skids.
Hon Hai may reportedly buy some of Sharp’s overseas TV assembly plants – including three factories in China, Malaysia and Mexico for $667 million.

Hon Hai founder Terry Gou put his money where his mouth was, but couldn’t close the deal with Japan’s ailing Sharp.

EUV: Not ready for prime time
Continuing delays in delivering a commercial extreme ultraviolet (EUV) lithography capability have become an annual ritual. The inability to bring the technology home will likely have real consequences for the semiconductor industry over in the next few years. A group of lithography experts estimates that commercialization of 14-nm chip fabrication could slip to 2014 or beyond unless powerful light sources of EUV can be perfected.
Meanwhile, Intel and the Taiwan Semiconductor Manufacturing Co. aren’t giving up. In October, they committed billions of dollars to the Dutch EUV developer ASML. Intel, which expect to begin manufacturing 14-nm chips in 2013, said it could make 10-nm processors in 2015 using existing immersion lithography. Without EUV, however, Intel knows it will have to write as many as five immersion patterns on a chip.
Holding up the promised delivery of EUV is the use of light sources nearly 20 times more powerful than those used today. The light source is used to pattern next-generation chips with feature sizes as small as 14 nm. IMEC researchers in Belgium have created wafers using less powerful light sources in its EUV systems. But throughput remains 15 to 30 times too slow for Intel, Samsung and TSMC. All this could mean that Moore’s Law might finally be running out of steam. The semiconductor “industry is no longer taking full steps, but implementing half nodes,” said Kurt Ronse, IMEC’s director advanced lithography program. In other words, while chip vendors might still call it 14 nm, they will be forced, in reality, to use the process technology closer to 16 or 17 nm.

Let’s hope the rewards of EUV technology are as big as the tools themselves.


Battery maker A123 goes belly up
A123 looked like the next big thing in cleantech when it emerged as one of the hottest MIT spinoffs about the time the Obama administration arrived. The company had – and still has – promising lithium ion battery technology, but at least one battery recall showed that A123 would have a hard time delivering on all the promise of clean technology.

The company filed for bankruptcy protection mid-year, and it looked for a while like its technology would remain in domestic hands when power management specialist Johnson Controls made a strong bid to acquire A123. But the Wisconsin company along with Siemens and other suitors were outbid in November by the well-heeled Chinese auto parts conglomerate Wanxiang Group Corp. for $256.6 million.

While A123’s demise falls short of matching the failure of solar startup Solyndra in 2011 – A123’s key government contracts will remain with another U.S. company (Navitas Systems) – the bankruptcy of a promising cleantech startup with solid battery technology represents a blow to the renewable energy sector.

Most of A123’s innovative battery technology now belongs to a Chinese auto parts conglomerate.

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