“MicroFlix”…Funny name; how crazy would it be if Netflix joined the Microsoft Family?

Here’s why the rumor that Microsoft may buy Netflix could be valid.

Figure: There’s a rumor that Microsoft might be interested in Netflix. How could that be?! (Logos belong to their respective owners. All rights reserved.)

 

The heartbeat of the embedded industry these days is galvanized by content provided to consumers anywhere they want it. This lub-dub mantra creates smartphones, tablets, Ultrabooks, 4G/LTE, digital medical records, home health care, the Smart Grid, and on and on.

Rumor late last week was that Microsoft might acquire Netflix. This isn’t such a crazy idea, since if Microsoft wants to play with Amazon, Apple and Google – three companies who drive embedded around like a child’s Tonka truck — it’ll need a meaningful content strategy that goes beyond Bing, Hotmail, MSN, and Live!  (And SkyDrive, which is really your content.)  Microsoft certainly has the reach to blanket the planet and play with these other three guys if they have significant skin in these critical areas:

  • Hardware
  • Content
  • Connectivity

On the hardware side, the XBox 360 (and the masterful Kinect) are non-trivial nodes in a possible Microsoft strategy, though efforts like the Zune are not. The new Surface tablet family (running either Windows 8 or Windows RT, I’m still trying to figure it out) might be the beginning of MSFT signaling they want to get into the hardware game (though only Apple seems to make any money at it). In fact, over the weekend I read multiple reviews by Engadget, CNET and other techies who generally said nice things about Microsoft’s Surface and Win8 launch last week.

Buying Netflix would amp up their content strategy big-time. It’s undeniable that a huge majority of the Internet’s traffic is video bytes fed by Netflix and other content providers. A Netflix play would give Microsoft a better negotiating position at the MPAA table.  After announcing less-than-stellar earnings on Tuesday (see “cliff” in Figure), the Microsoft rumor brought Netflix stock above where it started to fall.

Figure: After announcing less-than-stellar earnings earlier in the week, the rumor that Microsoft might buy Netflix sent the stock soaring. (Courtesy: Yahoo Finance.)

But what of connectivity? Apple has the carriers over a barrel with its hot-hot iPhone 5 (a barrel that started with the original iPhone). Google has Fiber back East and owns Motorola Mobility, and a bunch of FCC licenses for RF spectrum in case they want to become a wireless carrier. Amazon could use a connectivity strategy; they’re rumored to be interested in some part of Texas Instruments’ wireless product line.

I don’t believe Microsoft needs a carrier or will be forced to buy their own RF spectrum or bid for their partner Nokia (but don’t discard that idea, either). Instead, if you go back a year and look at Microsoft’s not-well-articulated strategy in embedded, the company wants a piece of all the Internet’s traffic. With their central role in servers, Microsoft has stated that merely touching and monetizing the data moving across the net is where they want to play. So one might not need “connectivity” per se if you still control and make money on the data flowing over someone else’s pipes.

So the Netflix/Microsoft rumor is an interesting one. If it turns out to be true, add Microsoft into the triumvirate that drives embedded: Amazon, Apple, and Google. It just might be crazy enough to make sense.

C2

Paris: Technology Observations from an American in Paris

I was looking for the hottest tech trends in cars and trucks on a recent week long trip to Paris attending the international auto show. But I found something else, too: everyday European technology mimics that found in American society (but with a few differences).

Before leaving I called ATT (my cellular carrier for my iPhone 4s) and activated the various way-too-expensive international calling, SMS/MMS, and data plans. I wasn’t at all sure I’d find Wi-Fi or at what price, and I wanted to stay minimally connected to the grid. Turns out I rarely used the text or direct dial phone features, thanks to heavy reliance on prevalent Wi-Fi, and the combination of my Google Voice account and a recently established Toktumi/Line2 VoIP app for the iPhone. While I added ten bucks to my GV account just in case, I needn’t have bothered. Three hours of calling home and the office didn’t make much of a dent at pennies per minute.

Line2 by Toktumi provides a nifty VoIP app for the iPhone using free Wi-Fi.

Wi-Fi Everywhere

But this connectivity was possible because of the excellent Wi-Fi found at my hotel on the outskirts of Paris. A Mac-based establishment, the hotel was in the process of adding additional Apple repeaters to all floors of the stone buildings and I had excellent and reasonable bandwidth reception at all times. Due to the language barrier (French/English/Geek) I wasn’t able to query the hotel on what technology they used, but it appeared to be Livebox hardware running on an Orange network. Unsure if it was an LTE cellular link or terrestrial, but I managed to sort-of stream an Amazon video through a US-based IP address. I say “sort of” because it dropped off after 20 minutes; guess the IP police found me.

I also had Wi-Fi at the auto show venue, the mini-Disneyland-esque Porte de Versailles which was like any tech convention you’ve been to times 10. Huge on the order of CES, Las Vegas. But there was Wi-Fi at all the cafes and restaurants, too. In fact, I’d bet there is better Wi-Fi coverage in Paris than cellular. The trick to using it is a bit like using a public washroom: you’ve gotta buy something first and ask for access. A €2 cup of cafe au lait was enough garner a password, and because of the hospitable French culture, I was able to nurse one or two coffees for an hour while surfing away catching up on email. I never tried Skype outside of the hotel, but my iPhone-based VoIP apps usually worked well from a Parisian cafe. I fit right in with all the locals chatting away on their often not-so-smart phones.

The Paris Porte-de-Versailles was the scene for Mondial de l’Automobile – the 2012 Paris Auto Show. (Courtesy: Google Maps.)

 

Feature Phones Still Common

The phenomenon of pulling out one’s phone and staring at it or texting on it is just as common in Paris as it is in the U.S. That is: none of us can sit still or be bored for more than 30 seconds without looking for instant gratification (or validation of our place in the cosmos) from our phones. But while I saw plenty of iPhones (no iPhone 5 handsets as this was soon after announcement), I also saw plenty of candy bar feature phones, too. Even saw my share of not-yet-extinct clamshell phones. I asked someone about this and was told: “We French would rather spend our money on a good meal with friends than on a cell phone.” And that apparently extends to their calling plans, too, as European carriers like Orange struggle to raise the average revenue per user (ARPU) with add-ons like location-based services and digital money transactions. The idea of an American spending $100 per month on a smart phone plan is insanity to a French citizen, I was told.

Location Based Services

Speaking of location-based services, Google Maps was a frequent life-saver for me. My “favorite” Metro mistake was to emerge from the wrong Sortie (exit) and find myself on a totally unfamiliar side street. That’s where the ATT roaming data plan came in handy, madly consuming megabytes loading up street data while I occasionally nervously followed the moving blue dot to a familiar location. My phone roamed onto multiple carriers, but the little screen badge always showed “3G” and I found the data rate usually acceptable and not all that slower than ATT’s “4G” badge in the Portland, OR area. I know that ATT doesn’t really have LTE in Portland, but the “4G” makes me feel special while at home and takes the edge off of wanting a Samsung Galaxy S III with real 4G LTE.

I’m lucky I didn’t “upgrade” to iOS 6.0 before my trip, else I’d have exchanged the native Google Maps for Apple’s Maps and I might never have found my way. Ironically, the whole “Map-Gate” fiasco – complete with Tim Cook’s apology – boiled over while I was in Paris. I met with Nokia, Garmin and TomTom at the auto show, each of which provided some colorful commentary on Apple’s situation that I can’t print here.  Since it’s inevitable that Apple will slowly break things in iOS 5.x until I “upgrade” to 6.x, I took the time to add Nokia Maps and the HTML-based Google Maps to my 4s. Just in case. Not that I have no faith in Apple, you see.

Other Tech Miscellany

I saw one guy wandering through the tradeshow taking pictures on his iPad, and that was the only time I saw a tablet anywhere in Paris. Now, I’m sure they exist, but my leisure time for people watching was confined to the show, the Metro, and the cafes. The only other interesting tech device I saw was a Kindle. I saw a lot of those on the subway. Then again, I also saw a lot of newspapers, too. I like that.

Lastly, since I was there to cover cars (look for a separate blog from me), I paid close attention to what I was seeing on the street. As expected, everything was small. Scooters and motorcycles, including motor bikes that had two wheels but full roofs and roll cages. Interesting. And there were lots of diesel automobiles, including billboards for the New! Diesel! Mini Cooper!  What I didn’t see anywhere was an electric car, though there were lots of announcements for them. We’ll see if that happens, since Paris might be a great place to have them and build up an electric charging infrastructure. Ironically, most of my taxi rides were in a Toyota Prius, the same as I find in San Francisco.

All in all the tech in Paris looks like the tech everywhere else in the Western world, which gives credence to what we tech journalists write about all time. It’s a connected world, and technology is a great enabler everywhere.