Open source is a response to software market failure.

In the 1990s and early 2000s, PC software was dominated by one company: Microsoft.

Rivals couldn’t successfully sell alternative applications in the face of Microsoft’s monopoly power. Start-ups could get neither market traction or access to capital to grow their businesses.

By doing away with prices and distributing online, open source undermines Microsoft’s marketing and bypassed normal channels.

But developers need to eat. Free doesn’t buy much food.

Today Microsoft is no longer dominant. And thanks to Apple’s iPhone app store, which now extends to the iPad, individuals or small teams of developers can easily enter the software market.

With other companies also offering app stores, we are about see a thousand flowers bloom.

There will be app store millionaires. But more importantly there will be many developers who can now use their skills to put bread on the table.

The bazaar now challenges the cathedral.

But with developers able to make a living from their art, they will have less time and even less motivation to work on open source projects.

Some will survive on idealism, but if a developer has a bright new idea tomorrow, do you think it will see the light as a giveaway or as a $0.99 app store download?

• The iPad won't be on sale in New Zealand for weeks.
• Importing hardware can be expensive and risky. I'd prefer to buy an iPad with official Apple support.
• It's rarely wise to buy version 1 of anything new. Let others be guinea pigs. The only time it's worth taking a risk with new kit is if you can get a strategic advantage from it. That's not the case with the iPad.
• I don't need an iPad at the moment. This may change as my Paperless Journalist project develops.
• I'm secure enough to not worry about owning a status symbol.

Eventually I probably will buy an iPad or similar – but it's not in my current technology plan.  Don't let me stop you.

Your circumstances will almost certainly differ.

The Wall Street Journal notes Sony has dropped the price of its entry-level e-book reader to US$169 just in time for the arrival of Apple's US$499 iPad.

The story quotes an analyst predicting a US$99 e-book reader by next year, pointing out it costs more than $99 to build the devices.

I can see the arrival of free e-book readers linked to online book shops. There's no reason e-books can't follow the razor and blade business model used by game console makers (like Sony) to its logical extreme and give away the hardware to customers willing to commit to so-many purchases over the course of a year.

Let the E-Reader Price War Begin? Sony Drops to $169 – Digits – WSJ.

Updated

You can read opinions about Apple's iPad elsewhere. Here I ask if it is the eBook reader to lead the way from print to a brighter, possibly greener, maybe paperless digital future.

It's a serious contender and likely to displace Amazon's Kindle from pole position. While the iPad in its current form is still short of ideal, it nudges ebooks nearer the goal.

Of course, this barely matters. Consumers will buy the device regardless of its suitability as an ebook reader. So the iPad could be the breakthrough ebook. My comments relate only to Apple's iPad as an ebook reader.

How I rate the iPad as an eBook reader:

Its size is about right. The iPad is lightweight, slim and big enough for comfortable reading.

I've some doubts over the way Apple will sell ebooks – in my view the company clips the ticket too hard. Publishers will feel they have little choice but to conform. It's an ironic lock-in given Apple's historic market strategy of being the anti-Big Brother computer maker.

Ten hours battery life is at the low-end of acceptability. It may handle a long-distance flight, but other readers do better.

At 9.7 inches, the display size is right. Colour is good. The screen resolution at 1024-by-768-pixel is less than ideal for long-term text reading - I've seen reports of either 100 or 115 dots per inch (dpi). I'm indebted to Bruce Hoult (@brucehoult) who twitters a simple calculation sqrt(1024^2+768^)/9.7 shows it's 132 DPI.

While this is way better than the 72 dpi on a standard PC display, it's going to mean tired eyes. Likewise the LED-backlit display is less than ideal.

Apple's price is respectable for a multi-function device able to handle many applications, but at US$499 plus, it's a hefty tag for an eBook reader.

My first impression is it needs a lower price, better display and improved battery life if the iPad is to become a serious threat to the printed book – these are all matters Apple may address in coming months.

Scorecard (out of ten):

Finally

These opinions are based on media reports – I haven't yet touched the device.

Barnes and Noble’s says internal sales data shows the Nook e-reader is already a hit. The company says the device is now its fastest selling item. Not bad considering the Nook doesn't officially go on sale until November 30.

While the Nook, like Amazon's Kindle, pushes e-book technology further into the mainstream, neither is yet the killer product able to do for books what Apple's iPod did for music. Mind you, Apple has a tablet waiting in the wings which could be the breakthrough reader.

For my money, ebook readers still need to be kinder on the eyes. All the technology is now in place except good, readable, high resolution screens that don't tire the eyes. Early adopters won't care about this, but most book lovers won't switch to digital until the experience is as good as reading old fashioned ink squirted onto mashed-up trees.

Meanwhile, Creative Technologies has entered the ebook market.

Acknowledgement to Mark Fletcher at Australian Newsagency Blog who had both stories earlier today.

Will you still love your personal organiser if your mobile does more? Bill Bennett contemplates a techno-death.

Those shiny new Palm Pilots and Pocket PCs sitting on store shelves may look like the last word in mobile computing. However, a new generation of smart phones is about to arrive that could leave them for dead.

Smart phones combine digital organiser or hand-held computer functions with normal voice telephony in a single compact package. You can manage your address book, organise appointments and record or write memos with them, just like you can with today's hand-held computers. At the same time you'll be able to surf the Web, read email and handle instant messaging.

Eventually smart phones will work with a whole range of Internet-delivered applications. Business people will be able to use their phones to send or receive information from company databases or use complex commercial applications. Consumer models will even allow you to download and listen to music or capture pictures and send digital snapshots to friends.

Smart phone hardware is already on the market overseas and selling fast. At the time of writing, a number of manufacturers are preparing models for the Australian market.

The German computer maker Siemens will launch its first Australian smart phone later this month. Siemens' product manager, Tarquin Swift, says the SX45, which costs $2199, is essentially a Casio Pocket PC with a built-in phone. "We added extra phone functionality to the Pocket PC," he says.

"For example, you can click on a name in your Outlook contact file and decide to send them an email, an SMS message or call them on the phone."

Swift says combining a Casio Pocket PC with a phone was the fastest way to get a product to market. The product is not really aimed at home users, though some early adopters will buy it. He says, however: "There is a definite demand from corporate and business customers for this kind of product."

While the SX45 is far from cheap, it is advanced. Swift says it has a colour screen and can receive streaming video or audio. The SX45 also has a number of built-in multimedia functions and works with multimedia messaging services (MMS) – an advanced version of the SMS found on conventional phones.

Another of the new breed of phones will be the Handspring Treo Communicator which, although based on Palm Pilot technology, looks nothing like the shirt pocket computer. The mono-screen version will sell for $1399 when it is released here next month.

Robin Simpson, research director with Gartner Australasia, says: "Treo brings a new level of usability to phone functions. Handspring has integrated the components very well. There's a jog wheel and a keyboard for short messaging." The Treo also has email and a Web browser – which he says is much better than the browser on a Palm Pilot.

Simpson says that, strictly speaking, the Treo is not a smart phone – it's more of a mobile phone with a good user interface than a computer. It does point to the future, however.

He thinks it will be popular with SMS users: "People will use it as a messaging tool; SMS will really take off now someone has developed a decent user interface."

But while the Treo has features that will attract individual consumers, Simpson says it will also strike a chord with business users. He says: "There's a strong community of Palm developers in Australia. All of a sudden there's this strong integrated platform. It is going to be a real boost for the developers and business use is going to spur the uptake of the technology."

Microsoft is busy trying to sell an alternative smart phone technology. Previously known as Stinger, the device is now called the Windows Powered Smartphone 2002. Like the Pocket PC, it uses a cut-down version of the Windows operating system and links easily to desktop computers and their applications. It also has a colour screen.

Simpson says that, so far, few phone makers have opted to use the Microsoft technology because it requires an expensive software licence but offers few real advantages. Australian consumers may soon be offered a version of the phone, however. "British Telecom is selling a version in the UK that works and we could see something similar from Telstra," he says.

Hand-held computers were always meant to be mobile communications devices. Almost a decade ago Apple's marketing for the original Newton PDA showed young professionals sitting in cafes, wirelessly transmitting data to and from each other. The Newton came and went, however, long before that dream became a practical reality.

The problem is that connecting a hand-held computer to the phone network has always been a bit tricky. In general you need to carry a phone and a computer along with something to connect them. It is sometimes possible to use infrared links between the two devices, but an old-fashioned cable is generally more reliable.

Smart phones sidestep these problems by integrating phone and computer hardware. Connecting the devices, however, was only part of the problem. Until recently, most mobile phone networks in Australia could not reliably transfer data at speeds faster than 9.6Kbps. This might be fast enough for dealing with email but browsing the Web is painfully slow, even allowing for the cut-down Web pages used by today's hand-held devices.

Mobile-connected computing won't really take off until 3G networks are in place. Hutchinson, which owns the Orange mobile brand, is building Australia's first 3G network. The service is expected to open for business at the end of the year or early 2003 in east coast metropolitan areas, with other cities to follow. At the time of writing, Telstra and Optus's 3G plans were unclear.

In theory, 3G networks can run at 2Mbps, though few users will see anything like that. More realistically, users can expect to see a few hundred Kbps.

In the meantime there's an interim technology known as general packet radio service (GPRS) that sits somewhere between today's second-generation networks, GSM and 3G. The service has been live for a few months but has yet to be promoted. Like 3G, GPRS is always on, so there's no waiting to connect to the network. But it's still pretty slow.

Australian carriers say their GPRS networks will operate at 10Kbps per channel. This sounds bad but phones can have multiple channels. In practice, most users will find the service works at about 30Kbps – that's considerably slower than today's desktop modems and roughly one-tenth of the practical speed available on 3G. In both cases you can expect to pay for the amount of data traffic rather than the time spent online.

While smart phones look set to replace conventional hand-held computers, they don't pose much of a threat to mobile phones – especially in business and corporate markets.

Swift says that although you can use the Siemens SX45 as a phone, "most people probably won't". He says he expects it to sell as a connected PDA and that most users will probably keep a tiny, minimal-feature mobile for their voice calls. He says that devices such as the SX45 are more likely to replace laptops than anything else.

Simpson takes the argument further, saying that there is definitely a consumer market for converged devices: "The phone market is largely ruled by fashion. There's a part of the consumer demographic that simply has to have the latest and flashiest phones." Likewise he thinks the one-unit convenience will appeal to certain groups of people, but not everyone.

Simpson says that for lots of users the current wave of converged devices involve too many compromises to be practical. For example, they have poor battery life, small screens, cramped keyboards or are too big and clumsy. Some have limited functionality. Many of the first generation of devices are difficult to use for ordinary voice calls. But future smart phones may progress past these initial limits and, inevitably, become more affordable.

For the next five years at least, Simpson says, the majority of users will choose to buy a best-of-breed hand-held computer and a best-of-breed mobile phone. The glue that will stick the two devices together is Bluetooth. "That way you can carry a hand-held computer that doesn't compromise on screen size and a practical phone handset," he says.

There's another advantage to this approach. Simpson says that the technology in hand-held computers and mobile phones is changing fast. By using separate devices you can upgrade one without having to upgrade everything.

Smart phones hit the streets

Already on sale in Australia, Kyocera's QCP 6035 smart phone combines a CDMA phone with a Palm hand-held computer. The $1299 device runs all normal Palm applications and can be used to browse the Internet either through HTML Web pages or WAP. It also has a folding full-size keyboard add-on. Scheduled for Australian release towards the end of this year, Sony Ericsson's P800 is a multimedia smart phone with a large colour screen, an Internet browser and a built-in digital camera. While the resolution of the camera will not be up to professional photography standards, it will enable you to take pictures while on the move and send them directly to other phones.
The P800 will also function as a pocket organiser and features Bluetooth wireless technology, making it easy to connect the phone to PCs or other devices without the need for cables. Sony Ericsson says that when it arrives, the P800 will probably be priced at the high end of the range.
Like the P800, Nokia's 9210i Communicator uses the Symbian operating system. This is a development of the technology used in the Psion range of hand-held computers and enables the phones to work with Microsoft Word, Excel and PowerPoint documents as well as Adobe Acrobat. Organiser information can be synchronised with Microsoft Outlook files on desktop computers.

Priced at $1800, the 9210i Communicator looks like a doll-sized laptop with a tiny keyboard and a colour screen. The phone can handle streaming video and audio as well as Macromedia Flash animations. Nokia is aiming at business users: the phone can run a virtual private network so that people on the move can link to databases securely. The 9210i is expected to arrive in Australia by the middle of the year.

Businesses think long and hard before buying computer hardware and software. Some have finely tuned technology plans. Others might take an ad hoc approach, making up the rules as they go. This sounds unwise, but it has the advantage of flexibility.

Some managers consult with their end users and technology specialists before drawing up specification lists. Many business buyers prefer the security of a known brand, some seek comfort in long-standing ‘technology relationships’, and others like the prices or local service offered by smaller outlets.

Whatever the details, business people tend to put a lot of research and effort into their system and software purchases. So should you. But it's easy to hung up worrying about the wrong things.

While it makes sense to plan software buying in detail, this is not always the case for hardware. After all, modern computer hardware is a commodity. There isn’t much difference between one brand and another. Inside they are pretty much the same. After years of conducting in-depth benchmarks (among other jobs I edited the Australian edition of PC Magazine), I can confirm that the difference between the top-performing brands and the average is rarely more than a couple of percent.

Whisper it quietly, but this difference is well under the margin of error. When comparing classes of computers, the performance spread between the highest and the lowest is usually less than the margin of error. And even if it isn’t, I challenge anyone to sit at any two similarly configured PCs and tell me which one is running five percent faster. You won't notice any difference running Microsoft Word or working online with Firefox or any other browser.

Frankly, for people in business performance is an issue, but the performance that matters is that between different classes of machine and not different models within a class.

Oh and before we go any further, if raw processing speed really worries you, most of the time you can boost it  by adding more Ram. Spending a $100 on extra memory chips is the best IT investment you’ll ever make. Not only will this kick-start sluggish systems, but you’ll be able to do more work and work more productively.

Of course, benchmarking does show up poorly performing products. But these are as likely to come from the most prestigious stables as from the cheaper no-brand operators. By all means use benchmarking information to avoid the dogs, but in the long run, average performing machines are as good a buy as the fastest.

While the performance spread of similarly specified PCs is minimal, prices tend to have more variation. Both follow the well-known bell curve. But the top and bottom performers in any class might deviate three or four percent from the average, while prices can vary by up to 20 percent; and even more if we include Apple's expensive hardware in the list.

You might expect that prices vary with performance. They may, but only up to a point. Statisticians and economists call the way two variables interact; ‘correlation’. So, if price and performance ratings match, they would be highly correlated, if cheaper machines performed best, then they would have negative correlation. In reality, there is merely a weak correlation between price and performance.

If you draw a graph and plot performance against price, there would be a pattern, but a number of points on the graph would sit a long way from any trend line or cluster. These are the machines to watch. Those that are nearest to the corner where performance is sluggish and prices are high represent the worst value. Those in the opposite corner represent the best.

It might seem like a lot of work, but this is a worthwhile process if you need to buy a lot of hardware. However, it is worth remembering that differences in performance rarely matter, dollars in your pocket do.

So, what PC purchasing lessons are there for individuals and small business owners? The key is to get your IT spending into perspective. When shopping for hardware, you should pay more attention to the features included in the package than to any benchmarking details. Remember warranties and reliability are more important than performance. And above all else, remind yourself that a low-price, average performing system plus $100 spent on Ram will almost always give you a better return than a pricey speed demon.

Anyone who has been around the IT business for a while can name great products and technologies that didn’t make it.

My favourite is the chording keyboard. When I first saw one (in the early 1980s) I thought it would succeed.

On the other hand plenty of lacklustre products took off. Some started life as ugly ducklings, growing into swans.

We’ve learnt to love dodgy technologies despite their awfulness: SMS text messaging might be essential but the user interface is a nightmare. Other bits of high-tech naff-ware still haunt us years after they should have been put out of their misery.

Spotting winners and losers early is useful. However, it isn’t easy or straightforward. In this context better doesn’t necessarily mean more successful.

Some believe technically poor winners beat technically better losers because of clever marketing. There’s a grain of truth in this, but the reality is more complex.

In the early 1990s, US writer Geoffrey Moore found that all business technology products go through an adoption life cycle.

At the sharp end of the cycle are the early investors. These are companies that must have the latest technology, either for prestige or perceived competitive advantage. They’ll willingly pay a relatively high price which funds further development or marketing.

Next are visionary customers who need a product to gain a real competitive advantage or control costs. They  accept immature support, absorbing technology risk. They’ll pay a premium allowing the maker to develop the marketing channels and support infrastructures required in the next phase.

The third phase is the bulk of the market. Moore calls the people in this group early majority or pragmatic customers. They look for clear pay-offs from a technology investment. This group delivers the profits and locks a technology into the mainstream.

The fourth group are reluctant adopters. If a sensible case is made, they’ll buy mature, proven technologies incorporated into commodity products. The last group are those who may never adopt a technology, for example companies that still don’t use email, mobile phones or computerised book-keeping.

Moore says that for any technology to succeed it must cross the chasm from the first two phases and enter the third. It’s an Evil Knievel leap, many technologies can’t make it.

The bridge across the chasm might be technical, it might be channel organisation, support infrastructure, political matters such as establishing a standard or it might just come down to old-fashioned marketing.

If you want to improve your winner picking skills, put everything else in the background and focus on the product, service or technology’s ability to cross the chasm between visionary and pragmatic customers.

In addition to Moore’s chasm, consider common sense concepts of price and utility. Any product which meets certain key standards can sell; but the number sold depends on price and function. A lower price or more functionality means higher sales. If the first two phases of the adoption life cycle enable a maker to build in enough functionality or make price reductions through economies of scale then it’s easier to bridge the chasm.

Standards are a further good indicator of likely success. However you need to read the signs correctly. Many so-called standards are anything but open. And widely accepted standards aren’t always the ones which prevail, especially in the face of market dominating companies like Intel or Microsoft. The standards used in a particular product or technology are not always fixed. For example, a non-standard communications protocol can  be changed with a software upgrade.

Although Moore’s focus was originally on business technology, the principles also apply to consumer products such as DVD burners or Apple’s iPod. The rules don’t change much between the suits and the open-neck shirts but their interpretation does.

Building up a head of steam to cross the chasm is harder for makers of consumer hardware. Consumers rarely look for a return on their investment in the conventional business sense and they are less willing to pay top dollar for new products.

Complicating matters further is the way many products now straddle both markets. In some areas the consumer market influences business purchasing strategies. For example, the first customers to adopt the iPhone were consumers. Business users are still behind on the adoption curve.