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If you have not heard about it yet, you will probably soon.

To summarize what people have been able to find out so far.

Carrier IQ is a private company who provide some services to the cellphones carriers. For years, the carriers have installed this software on your cellphone supposedly to be able to analyze the quality of the network and improve their services.

After analyzing what the software does exactly it has been recently revealed that it logs pretty much everything you do, your location, the numbers you dial (the carriers already know that anyway), the text messages you send or receive, the websites you visit.
This happens at the lowest level of your phone OS so it can even log your encrypted web connections before they get encrypted, so it keeps track of your passwords for example before they get encrypted.
To make things worse, those data are stored on your phone and sent to the servers at Carrier IQ and made available to the cellphone carriers. You are not aware that this process is happening, you cannot opt out of it, you are not asked for your approval for it to happen and you cannot even shutdown the software or prevent it from starting when you turn on your cellphone.

The cellphones manufacturers are all pretty much explaining that they have nothing to do with that, they give the devices they produce to the carriers who install whatever they want on it and sell them to the unsuspecting customer (that would be you!)

The carriers have pretty much admitted using Carrier IQ but explain that this is a necessary process to improve the quality of their network. Sure, ATT need to know when I log into a website with my username and password and need to keep track of those unencrypted information, it is vital to the optimization of their network. Or you can be the judge of that.

As for Carrier IQ they have been pretty quiet so far but today they received a letter from Senator Franken and it looks like they will have a lot of embarrassing questions to answer.

The story is still developing and could turn into an outright scandal, maybe even a lawsuit as it is not clear if all this is really legal.
We will see how it turns out.

Now, next time I hear somebody explain to me that we have too much government, too much rules, that those rules are bad for the business, they are hurting the economy, they are preventing companies from creating jobs, I think I will use that example. This Carrier IQ story is what happens when you let big companies do whatever they want without putting any regulation on them. It is simply not acceptable.
Sure Carrier IQ is a private company that will soon be in trouble and may simply collapse as a consequence but I still believe the world will be a better place without them. Sure some people will lose their jobs but the problem is that those jobs should not have been created to start with. Not everything is acceptable just to be able to make some profit.

Big companies have proven over and over again that they cannot be trusted, that they are unable to keep a reasonable behavior, that if you let them loose and free to do whatever they want it will end up with that kind of situation. That was the case for the Finance industry, it got us into years of recession and ended up hurting millions of people while making a few executives even more rich. Now we have a pretty good evidence that it’s the same all over again with the cellphone carriers.

So, who’s next? How much more evidences do we need?

It’s been a week now since the CES is over. I spend a significant amount of time reading news and editorial from various contributors and listening to ideas, rumors and comments.
After CES something strikes me even more than before, I could not find anybody able to explain Microsoft current strategy. I have not heard a single comment explaining why it makes any sense to do what they are doing. After a week looking for an explanation I can only come to the conclusion that they are nuts. They must live in a different world than the rest of us.

To bring some rational to what I mean lets’s go back to the recent events and try to pain a view of the big picture.

Anybody who want to build a personal computer need 2 things: some software (an operating system) and some hardware (mainly a processor and a few things around it). For the last 20 years Microsoft has been providing the software and Intel has been providing the hardware. And this has been the case for 95% or so of all the personal computers built so far. It’s not a monopoly but it’s pretty close to it. Linux has been an alternative on the software side but mostly for geeks. And a few hardware alternative existed without encountering much success (mostly provided by IBM and Motorola). Apple is the only one who managed to survive with it’s own solution and have a significant market share. First they used a different hardware solution (PowerPC) but eventually switched to Intel’s architecture, while always keeping their own software solution.

So over the last 30 years the computer industry has been made of various companies providing the very same products. Acer, Asus, Sony, Dell, MSI, HP, Compaq, etc have all been offering pretty much the same thing. Same hardware and same software. The only way they had to differentiate themselves is through branding, advertising, company image and of course product design and price.
Sadly in that process they thought that it was smart to also add a crappy layer of software on top of Microsoft Windows, to be able to pretend that the ‘HP Solution center’ or the ‘Toshiba Assistant’ was changing your entire user experience. Ultimately it was just another useless layer that burdened an already weak and buggy operating system.

This phenomenon is commonly called the commoditization. It happened in the computer industry and in many others domains. For example Gas company have a tough time explaining to you that you gas is better if you buy it at an Exxon gas station than at a BP one. Even customers with a pretty low IQ can understand that they are buying gas and nothing else but gas. It goes in your car, you need a refill when it’s empty and that’s it!
Players in the gas distribution business worked on creating a differentiation with everything around the gas distribution – having a nice store, good coffee, free refill of your drink, etc. In the computer manufacturing business the battle turned to price of course, than design and to the crapware that you preinstall on the computers.

And the industry has been going on like that for decades… until last week.

Two major events happened last week:

- About every PC manufacturer announced that they are or will be offering new products that don’t run Windows as an operating system and don’t run with Intel processors on the hardware side.

- Microsoft announced that the next version of Windows will be offered for intel processors but also for anther kind of micro processor.

Those two events were simply unthinkable 2 years ago and that’s whe can safely say that they mark the end of an era. The end of the first era of the personal computer industry.

Now, don’t panic. No need to rush to the store to buy the last remaining PC. They will still be around for a long time, maybe forever. But now you can buy something else, you have new devices that are used in a different way to answer different needs.
Those devices are smaller, more portable, more energy efficient, more convenient, more personal. They have been called the very personal computers, smartphones, tablet computer. Actually nobody came up yet with a generic term that encompass everything they are.

Even if they may be tough to classify those devices need hardware and software in a way very similar to PCs.

So you would think that after leading the computer industry for 30 years, Microsoft will provide the software and Intel will provide the hardware. Wouldn’t that be logical?
After all, when you are leading an industry and one change happens in 20 years it’s not a big deal to anticipate. That would sound rational, except that it’s not happening.

So what is the problem?

For intel the problem is simple – x86. They have one architecture inherited from the good old processor 8086 they created for the original PC (remember the big ugly one created by IBM in 1983). It has evolved a little but not much, now it is smaller and more powerful than before but it has one major issue, it is power hungry and it produce a lot of heat. So when you put it into a laptop it’s ok but when you want to make a small tablet computer or a smartphone with it, it simply does not work.
Intel has been trying to convince the computers manufacturers that things will get better and that they will find a solution soon (the Atom line of processors). This has been ongoing for about 2 years but everybody eventually realized that it’s not going to happen anytime soon and they started to consider alternatives.
So what kind of hardware do you need for those devices? It is called SOC (System on Chip) and it’s basically a microprocessor and some specialized peripheral chips (for example to decode videos) all integrated in one package. Those SOC are based on an architecture provided by ARM a british company. ARM does not make them but provide a blue print that can be customized to specific needs. It gives 10 or 12 hours of battery life and a very portable device the size of a phone.

For Microsoft the problem is Windows. They have gotten into some sort of dogma – Windows everywhere. They dream about a world where Windows is the answer and the solution to every problem. Unfortunately neither the strategy nor its failure is new.
Windows is an operating system that was designed for computer, i.e machines with a keyboard and a mouse. When the user starts to interact with the device in a different way it gets messy.
For more than a decade now Microsoft has been trying to hammer a solution into markets that are simply rejecting it.
They tried to put Windows in our living rooms with Windows XP Media Center Edition or into tablet computers with Windows XP Tablet PC Edition. Than came the ultra portable devices with Windows Ultra-mobile platform, than Windows CE, and eventually Windows Mobile for smartphones.
Than, last year in an unusual move, all of a sudden Microsoft told its customers to wait – Windows Mobile is not good enough but they will do better. If everybody can just wait for a year Microsoft will come up with the solution to all our problems – Windows Phone 7.
This solution has been out for about 2 months now, it’s not a huge commercial success but it’s a descent product, maybe up to what the competition was doing 2 years ago.
Last week in another surprising move Microsoft announced to the world that they found the ultimate solution – Windows will run on SOC and not only on Intel. And with that order will be restored to the world… in 2 or 3 years. And that is supposed to be the Microsoft answer to the iPad?!?

So now I really wonder if they really have a clue on what they are doing.

The company just came up with a new product Windows Phone 7 which is supposed to be appropriate for smartphones and tablet computers and the CEO tell the world that he does not believe in that because but he will have something better, the real Windows… in 2 or 3 years.
That is certainly the best way to inspire confidence in the new product and attract developers to the platform, if you already know that the CEO does not believe in it.

Microsoft came up with this “Windows Everywhere” dogma 12 years ago. Since they tried over and over again to push the product in every possible niche and they have consistently failed. But still after 12 years of failure, this is all they can come up with.
Ironically, 12 years ago Windows was not running only on Intel processors, you could run it on x86, PowerPC, MIPS, and even the DEC Alpha chipsets.

Windows is simply not the right product to run on tablet computers and smartphones, Microsoft should be the first to see that and do something about it. Now it’s pretty clear that it’s not going to happen.
Oh well, computers manufacturers will just turn to another provider and Microsoft will keep on with his dogma even if nobody is listening anymore.

In a sense what happened is relatively simple – 2 companies ruling an industry with a quasi monopoly for 30 years unable to realize that their market is changing and who keep trying to sell the same products over and over to clients who want something different.

More later on the alternatives and the strategy of the various competitors.

Android, the open source smart phone operating system that Google generously develops for the benefit of the handset manufacturers and the wireless carriers, is undoubtedly a commercial success, in particular in the US. Each major US carrier has a few Android devices in its line-up, consumer electronics giants like Samsung, Sony and Motorola have abandoned Windows Mobile for it, and the Verizon “Droid” brand is almost as well known as the iPhone. According to Google, 200,000 new Android phones are activated each day of the week, which could mean an installed base of 30 to 40 million devices at the end of the year.

So why are reputable IT on line magazines like Infoworld or self proclaimed experts like Bob Enderle writing about the “Android train wreck”; why is frustration about Android mounting on the developers and end users forums?
• Unlike iOS and the iPhone, the Android platform is not managed by the iron fist of a single owner, powerful enough to impose its control on the whole ecosystem. With Android, smart phone manufacturers and carriers are free to modify and to add to the base program provided by Google, and most of them have developed their own user interface layer and their own widgets, as a way to differentiate each new phone from the dozen of new Android devices launched every other week. This code fragmentation is a promise for a software maintenance nightmare over time.
• Similarly, Google does not prevent the carriers and the cell phone manufacturers from removing modules from Android as they see fit, or from adding crapware in order to make a little more money, with a negative impact on the end user experience. The app store is not curated, which opens the door to the distribution of malware and spyware, and could lead to a major PR disaster in the future.
• Over the last 18 months, Google has been launching new versions of Android frenetically, without ensuring (as Microsoft would have) that all the hardware manufacturers are following. As a result, Android phones launched today can have very different technical characteristics, and run on versions as dramatically different as 1.5, 1.6, 2.1 or 2.2, adding to the end user confusion.
• The high level of customization, compounded with the frantic pace of the Android evolutions and the disparity in hardware specifications, makes the manufacturers’ promise to provide OS updates to existing customers untenable, a major source of discontent for tech savvy consumers who form the core constituency of Android.

But the worst is still to come. Oracle sued Google last week, for multiple patent infringements related to the use of Java in Android. If it is confirmed that Google irresponsibly reversed engineered Java and used the product of its hacking efforts as the basis for Android without permission, the future of the smart phone OS may be severely compromised. At best Google will have to pay very significant license fees to Oracle, and accept Oracle’s stewardship of Java, which will slow down Android’s evolution. Worst case, Google will throw the towel and RIM, Microsoft and Apple will have lost a very aggressive competitor.

Xavier Talfumiere (guest contributor)