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Article from NYTimes.

Apple fired the executives in charge of the company’s mobile software efforts and retail stores, in a management shake-up aimed at making the company’s divisions work more harmoniously together.

The biggest of the changes involved the departure of Scott Forstall, an Apple veteran who for several years ran software development for Apple’s iPad and iPhone products. Mr. Forstall was an important executive at the company and the one who, in many respects, seemed to most closely embody the technology vision of Steven P. Jobs, the former chief executive of Apple who died a year ago.

But Mr. Forstall was also known as ambitious and divisive, qualities that generated more friction within Apple after the death of Mr. Jobs, who had kept the dueling egos of his senior executives largely in check. Mr. Forstall’s responsibilities will be divided among a few other Apple executives.

While tensions between Mr. Forstall and other executives had been mounting for some time, a recent incident appeared to play a major role in his dismissal. After an outcry among iPhone customers about bugs in the company’s new mobile maps service, Mr. Forstall refused to sign a public apology over the matter, dismissing the problems as exaggerated, according to people with knowledge of the situation who declined to be named discussing confidential matters.

Instead, Timothy D. Cook, Apple’s chief executive, in September signed the apology letter to Apple customers over maps.

Apple said in a news release on Monday that the management changes would “encourage even more collaboration” at the company. But people briefed on Apple’s moves, who declined to be identified talking about confidential decisions at the company, said Mr. Forstall and John Browett were fired.

Steve Dowling, an Apple spokesman, said neither executive was available for an interview. Mr. Forstall did not respond to interview requests over e-mail and Facebook.

Mr. Browett, who took over as head of the company’s retail operations in April, will also leave the company after a number of missteps. Apple said that a search for a new head of retail was under way and that the retail team would report directly to Mr. Cook in the meantime.

Mr. Forstall will leave Apple next year and serve as an adviser to Mr. Cook until then.

Eddy Cue, who oversees Apple’s Internet services, will take over development of Apple maps and Siri, the voice-activated virtual assistant in the iPhone. Both technologies have been widely criticized by some who say they fall short of the usual polish of Apple products.

Jonathan Ive, the influential head of industrial design at Apple, will take on more software responsibilities at the company by providing more “leadership and direction for Human Interface,” Apple said. Craig Federighi, who was previously in charge of Apple’s Mac software development, will also lead development of iOS, the software for iPads and iPhones.

Apple said Bob Mansfield, an executive who previously ran hardware engineering and was planning to retire from Apple, will lead a new group, Technologies. That group will combine Apple’s wireless and semiconductor teams. Apple in a statement said the semiconductor teams had “ambitious plans for the future.”

Recently, Mr. Mansfield had been working on his own projects at the company, operating without anyone reporting to him directly. One of the areas of interest Mr. Mansfield had been exploring is health-related accessories and applications for Apple’s mobile products, said an Apple partner who declined to be named discussing unannounced products.

Mr. Forstall was a staunch believer in a type of user interface, skeuomorphic design, which tries to imitate artifacts and textures in real life. Most of Apple’s built-in applications for iOS use skeuomorphic design, including imitating thread of a leather binder in the Game Center application and a wooden bookshelf feel in the newsstand application.

Mr. Jobs was also a proponent of skeuomorphic design; he had a leather texture added to apps that mimicked the seats on his private jet. Yet most other executives, specifically Mr. Ive, have always believed that these artifacts looked outdated and that user interface design on the computer had reached a point where skeuomorph was no longer necessary.

Mr. Forstall, who trained as an actor at a young age, also shared with Mr. Jobs a commanding stage presence at events introducing Apple products, often delivering his speeches with a pensive style that echoed that of Mr. Jobs.

According to two people who have worked with Apple to develop new third-party products for the iPhone, the relationship between Mr. Forstall and Mr. Ive had soured to a point that the two executives would not sit in the same meeting room together.

A senior Apple employee who asked not to be named said Mr. Forstall had also incurred the ire of other executives after inserting himself into product development that went beyond his role at the company. One person in touch with Apple executives said the mood of people at the company was largely positive about Mr. Forstall’s departure.

“This was better than the Giants winning the World Series,” he said. “People are really excited.”

The departure of Mr. Browett was less surprising to outsiders. In August, the company took the unusual step of publicly apologizing for a plan by Mr. Browett to cut back on staffing at its stores. Charlie Wolf, an analyst at Needham & Company, said he was never convinced that Mr. Browett was a good choice to join Apple because he had previously run Dixons, a British retailer that is viewed as being more downmarket than Apple’s retail operations.

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Article from GigaOm.

Zscaler a four-year-old startup that has bootstrapped its business by providing a new form of security designed for a mobile and cloud-dependent workforce, has raised $38 million in first-time financing. The round was led by Lightspeed Venture Partners and an unnamed strategic investor.

Zscaler has been fairly successful in its four years building a significant base of clients including Crutchfield Corporation, La-Z-Boy and Telefonica. The company’s software as a service is hosted in more than 100 data centers around the world and essentially protects a company’s web traffic. It does this by routing requests through Zscaler’s software. But there’s no software for users to download on their clients and there’s also no appliance for corporate IT to worry about.

As the cloud and mobility do away with the perimeter model of security where a firewall may prevent harmful traffic from getting in and corporate secrets from getting out, Zscaler is one of several new companies trying to adapt security to a world where there is no perimeter. And even if the corporate IT thought it had a perimeter, the corporation may not own it or have a say in what runs on it. A perfect example of this might be the CEO’s iPad (a aapl).

Zscaler doesn’t solve all problems, but it’s certainly ahead of the pack in thinking about security in a forward-looking way. Other companies trying to address the changes in security required by BYOD and corporate access to the cloud applications are Bromium and CloudPassage. And by waiting to take on venture capital Zscaler’s CEO Jay Chaudhry has joined a select group of established companies who are finally succumbing to the lure of VC cash. For example Qualtrics, a ten-year-old company this year raised $70 million in its first round of outside investment. Another company, Code 42, avoided VC dollars for 11 years before this year raising $52.5 million.

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HuffPost Social Reading  by John Backus Managing Partner, New Atlantic Ventures 

Reclaiming Your Online Privacy Posted

Face it. Everything you do online is visible to someone and can be used without your approval or agreement. You leave details of your online activity in your browser, on your desktop, in your smartphone. All the while, companies, your employer, advertisers and the government are picking up those traces, and piecing them together to make a more perfect profile of – you!

If you aren’t scared now about what organizations know about you, you should be.

Companies have a voracious appetite for your information. The more they know about you, the more they can charge advertisers to micro-target you. The most recent and worrisome real world example is happening as you read this — Google! They just changed their privacy policy, under the faux auspices of “simplicity across sites” to be able to track the content of the emails you write and receive in Gmail, what you search for on Google, what you watch on YouTube, and where you are looking to go on Google Maps. And that goldmine of data wasn’t enough for them. In addition, they specifically and intentionally bypassed Safari’s private browsing mode on your iPhone and iPad to learn more about you.

And, Apple let application developers exploit a flaw in iOS to see all of the contacts in your address book.

Facebook settled with the FTC last fall over its own questionable privacy policies and is now rumored (though they deny it) to be tracking the contents of your text messages from their smart phone app. “Like” something on a website? Facebook knows exactly what you were looking at. Think of every “Like” button on a web page as a Facebook cookie. And remind your friends that “Like” is simply a sneaky way for you to give more personal, valuable information to Facebook.

Your employer knows everything you do at work. They archive your emails – and the court has ruled that company emails are company property — not personal property — and that employees should not have an expectation of privacy when using company resources. Employers also know every website you visit, what pages you see, and how long you spend on each site. You have no privacy when you are working in the office, out of the office but online on your company’s VPN, or doing anything on your company-provided smartphone, tablet or laptop. What you say and where you go belongs to your employer.

Advertisers have an insatiable appetite for user-specific information. Let me share my personal story (and you can try this yourself) Using Firefox, I went to preferences, privacy, and clicked on the underlined text that says “remove individual cookies.” I was taken to a box that showed all of the cookies on my machine. I had over 1000 cookies, most advertiser-related. AND, I use Adblockplus, Betterprivacy, and had checked the privacy box titled “Tell websites I do not want to be tracked.” The same thing happens with Internet Explorer, Chrome, and Safari. Scary. With much fanfare last month, the Government announced the “Do Not Track” browser button, which 400 companies have agreed to honor. Don’t be fooled. This provides limited privacy at best — and only from specific types of advertising, and only certain advertisers have agreed to use it.

Governments want to know more about you as well. The Electronic Frontier Foundation released a report entitled Patterns of Misconduct, which outlined the FBI’s ongoing violation of our Fourth Amendment rights. If not for an aggressive, last-minute online campaign by an unofficial coalition of Internet freedom fighters, Congress was about to pass the SOPA legislation (Stop Online Privacy Act), which would have allowed (and perhaps in some cases required) the government and ISPs to inspect the contents of every packet of information sent across their networks. And Europe isn’t far behind with SOPA’s ugly cousin, ACTA, (Anti-Counterfeiting Trade Agreement) which entrepreneurs in the EU have just started fighting against.

What can you do to reclaim your privacy? There is only one thing to do:

Go invisible. That’s why our venture firm invested in Spotflux. Started by two Internet freedom fighters that have more than a decade of experience solving large-scale security challenges, Spotflux is a free privacy application for consumers, which works by encrypting your Web connection. It downloads in less than a minute on any Windows or Mac computer, anywhere in the world. Spotflux ran a beta test and in less than a year, attracted 100,000 users in 121 countries. It launches globally today.

Spotflux encrypts everything that leaves your desktop, pushes the data through their privacy-scrubbing service, and sends it along. To a website, you are not you — you are Spotflux. And you are invisible unless you choose to login to a website, like your bank, Google, Twitter or Facebook. Even then, companies only know what you do on their site. When you log out, they don’t see where you are on other sites. Better yet, Spotflux’s HTTPS security means no one can eavesdrop on your conversation over a public Wi-Fi connection. And you can surf just as freely overseas as you do in the U.S. Want more? Spotflux also strips out annoying ads and injects real-time malware detection into your browser. Consumers, policy makers and activists are fighting the privacy issue hard but they often face a daunting and cumbersome process. It shouldn’t have to be this way, which is why we think Spotflux is on to something.

Weigh in here with your own privacy horror stories and what you think can be done to reclaim our lost privacy online. Follow John Backus on Twitter:

http://www.twitter.com/jcbackus

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Article from Outside the Box by John Mauldin

an article By Louis Gave

“Talking about the Russian Revolution, Lenin once said that there are decades when nothing happens and there are weeks when decades happen.” The last quarter of 2001 looks in retrospect like one of those exciting periods: three events occurred which set in motion the main economic trends of the ensuing decade. Successful investors latched on to at least one of these trends. The problem is, all three trends are now over. The investment strategies that worked over the past decade will not continue to work in the next. What comes next?

The three big events of 2001 were:

• The terrorist attacks of 9/11. This unleashed a decade of bi-partisan “guns and butter”policies in the US and produced a structurally weaker dollar.

• China joined the WTO in December 2001. China’s full entry into the global trading system signaled a re-organization of global production lines and China’s emergence as a major exporter. Export earnings were recycled into the mother of all investment booms, which drove a surge in commodity demand and a wider boom in emerging markets.

• The introduction of euro banknotes. The introduction of the common currency unleashed a decade of excess consumption in southern Europe, financed unwittingly by northern Europe through large bank and insurance purchases of government debt.

But today, all three trends have stalled—and this perhaps accounts for the discomfort and uncertainty we find in most meetings with clients. Indeed:

• US guns and butter spending is over. For the first time since 1970, real growth in US government spending is in negative territory:

• Chinese capital spending is slowing. China still needs to invest a lot more, but future growth rates will be in the single digits.

• Excess consumption in southern Europe is done. Money is clearly flowing out to seek refuge in northern Europe.

Thus, like British guns in Singapore, investors whose portfolios still reflect the above three trends are facing the wrong way. Instead of lamenting over the past, investors should be coming to grips with the trends of the future: the internationalization of the RMB, the rise of cheaper and more flexible automation, and dramatically cheaper energy in the US.

1- The internationalization of the RMB

China is now the centre of a growing percentage of both Asian, and emerging market trade (a decade ago China accounted for 2% of Brazil’s exports; today it is 18% and rising). As a result, China is increasingly asking its EM trade partners why their mutual trade should be settled in US dollars? After all, by trading in dollars, China and its EM trade partners are making themselves dependent on the willingness/ability of Western banks to finance their trade. And the realization has set in that this menage à trois does not make much sense. Indeed, for China, the fact that Western banks are not reliable partners was the major lesson of 2008 and again of 2011.

As a result, China is now turning to countries like Korea, Brazil, South Africa and others and saying: Let’s move more of our trade into RMB from dollars” to which the typical answer is increasingly Why not? This would diversify my earnings and make our business less reliant on Western banks. But if we are going to trade in RMB, we will need to keep some of our reserves in RMB. And for that to happen, you need to give us RMB assets that we can buy”. Hence the creation of the offshore RMB bond market in Hong Kong, a development which may go down as the most important financial event of 2011.

Of course, for China to even marginally dent the dollar’s predominance as a trading currency, the RMB will have to be seen as a credible currency—or at least as more credible than the alternatives. And here, the timing may be opportune for, today, outshining the euro, dollar, pound or even yen is increasingly a matter of being the tallest dwarf.

Still, China’s attempt to internationalize the RMB also means that Beijing cannot embark on fiscal and monetary stimulus at the first sign of a slowdown in the Chinese economy. Instead, the PBoC and Politburo have to be seen as keeping their nerve in the face of slowing Chinese growth. In short, for the RMB to internationalize successfully, the PBoC has to be seen as being more like the Bundesbank than like the Fed.

Following this Buba comparison, China has a genuine opportunity to establish the RMB as the dominant trade currency for its region, just as the deutsche mark did in the 1970s and 1980s. But interestingly, China seems to consider that its “region” is not just limited to Asia (where China now accounts for most of the marginal increase in growth—see chart) but encompasses the wider emerging markets. How else can we explain China’s new enthusiasm in granting PBoC swap lines to the likes of the Brazilian, Argentine, Turkish and Belorussian central banks?

China’s attempt to move more of its trade into RMB is interesting given the current shifts in China’s trade. Indeed, although the US and Europe are still China’s largest single trade partners, most of the growth in trade in recent years has occurred with emerging markets. And China’s trade with emerging markets is increasingly not in cheap consumer goods (toys, underwear, socks or shoes) but rather in capital goods (earth- moving equipment, telecom switches, road construction services, etc; see China Bulldozes a New Export Market). In short, yesterday China’s trade mostly took place with developed markets, was comprised of low-valued-added goods, and was priced in dollars. Tomorrow, China’s trade will be oriented towards emerging markets, focused on higher value-added goods, and priced in RMB.

This would mark a profound change from China’s old development model: keeping its currency undervalued, inviting foreign factories to relocate to the mainland, transforming 10-20mn farmers into factory workers each year, and triggering massive labor productivity gains—gains which the government captures through financial repression and redeploys into large-scale infrastructure projects. But China’s change in development model may be less a matter of choice than of necessity.

2– Virtue from necessity: the rise of robotics

The first harsh reality confronting China is that the country is now the world’s single largest exporter. Combine that impressive status with the reality that the world is unlikely to grow at much more than 3% to 4% over the coming years and it becomes obvious that the past two decades’ 30% average annual growth in exports just cannot be repeated.

Beyond the limits to export growth, the other challenge to China’s business model is the second step, namely the transforming of farmers into factory workers. Not that China is set to run out of farmers (see The Countdown for China’s Farmers). But the coming years may prove more challenging for unskilled workers as robotics and automation continue to gather pace. Over the coming decade, cheap labor may not be the comparative advantage it was in the previous decade, simply because the cost of automation is now falling fast (see The Robots Are Coming).

Of course, factory and process automation is hardly a new concept. What is new is the dramatic recent shift from fixed automation to flexible automation.For decades we have had machines that could perform simple repetitive tasks; now we have machines that can be reprogrammed easily to perform a wide range of more complicated functions. With improved software and hardware, robots can do more, in more industries; and the purpose of automation has shifted from improving crude productivity (making more of the same things at lower cost) to more sophisticated targets like adaptability across product cycles, and improved quality and consistency.

One consequence of cheaper and more flexible automation is that some manufacturing that fled the developed world for cheap-labor destinations like China may return to the US, Japan and Europe, as firms decide that the benefits of low-cost labor no longer outweigh the advantage of better logistics and proximity to customers. Even if this does not occur, factories in places like China may become ever more automated (e.g.: electronics assembler Foxconn, Apple’s main supplier and one of the world’s biggest employers with some 1mn workers, has started to talk about building factories manned with robots). This then raises the question of what China’s hordes of manufacturing workers will do should Chinese factories automate and/or re-localize to the developed world. One obvious conclusion is that China’s leaders will thus have to deal with slowing growth through further deregulation, rather than stimulus and currency manipulation. The remedies of 2008 (large fiscal and monetary stimulus) will not work again.

This dilemma implies that the robotics trend dovetails with the RMB internationalization trend. To understand just why, it is important to recognize one aspect of policymaking which makes China unique: the country’s leaders wake up every morning pondering how to return China to being the world’s number one economy and a geopolitical superpower in its own right (few other world leaders harbor such thoughts). And ever since Deng Xiaoping, the answer to that question has typically been to sacrifice some element of control over the economy in exchange for faster growth.

Today, China faces the imperative of making just such a trade-off between control and growth: the old model of cheap labor and vast capital spending is near exhaustion, so the only way to sustain growth is to go for more efficiency, especially through financial sector reform. For China’s leaders, reform will be painful but the cost of missing out on the global power that comes with further growth would be even more painful. Hence we are convinced Beijing will eventually bite the financial reform bullet, and RMB internationalization is the leading edge of that reform. In that light, the creation of the RMB offshore bond market is an event of much greater significance than is currently acknowledged by the general consensus.

3– Cheap US energy

Along with the possibility of manufacturing returning to the developed world from China and other low labor-cost countries, another key trend of the coming decade should be the gradual achievement of energy independence by the US. Given the discoveries of the past few years in the exploitation of shale gas and oil, and assuming the existence of political will to invest in reshaping US energy infrastructure, such a development is now within reach.

These large natural gas discoveries have two potential global impacts. First, the combination of low-cost automation and low-cost energy could encourage manufacturers to locate their plants not in countries with the lowest labor cost, but in those with the lowest energy cost. For example, on a recent visit to Germany we kept hearing how chemical plants would have a tough time competing with American plants if the price of US natural gas stayed below US$2.50. In fact, with Germany having decided to pull away from nuclear and bet its future on high-cost wind power, energy- intensive industries in the country could be in for a challenging decade.

Second, the return to manufacturing and energy independence should lead to sustained improvement in the US trade deficit. Energy imports account for around half of the US trade deficit (while the other half is broadly manufactured goods from China). Today the US, through its trade deficit, sends roughly US$500bn worth of cash to the rest of the world every year. This money helps grease the wheels of global trade since more than two-thirds of global trade is still denominated in dollars. But what will happen if, in the next ten years, the US stops exporting dollars, thanks to its new strengths in manufacturing and cheap energy? In such a scenario, the dollars would run scarce.

In fact, this may already be happening. This would explain why the growth of central bank reserves held at the Fed for foreign central banks has been in negative territory for the past year—and why, over the past two quarters, the Fed has been exceptionally generous in granting swap lines to foreign central banks (notably the ECB).

This does not make for a stable situation. And given that the RMB is unlikely to replace the dollar as the principal global trading currency for many years to come (see History Lessons and the Offshore RMB), the likely combination of expanding global trade and a shrinking US trade deficit should mean that either the dollar will have to rise, or US assets will outperform non-US assets to the point where valuation differnces make it attractive for US investors to deploy dollars abroad (since US consumers won’t).

4– Conclusion

Obviously, we do not claim to have identified all the big trends of the coming decade. The next several years will doubtless deliver many more important changes and investment opportunities (monetization of Japan’s debt and a collapse in the yen? Demographic challenges in numerous countries? Reform and modernization in the Islamic world? Political upheaval and regime change in Iran? Water shortages in China, India and other Asian countries? Possible energy independence for India through thorium-based nuclear energy plants?). But we are nonetheless confident on these main points:

• The three key macro trends of the past decade have come to a screeching halt. This explains why financial markets seem to lack conviction and direction.

• The internationalization of the RMB and the birth of the RMB bond market is likely to be one of the most important developments of the decade. The closest analogy is the creation of the junk bond market by Michael Milken in the 1980s. Interestingly, just as in the early 1980s, few people are taking the time to work through the ramifications of this momentous event. Understanding this new market will prove essential to understanding the world of tomorrow.

• The likely evolution of the US from record high twin deficits to much smaller budget and trade deficits should help push the dollar higher over the coming years. And this in turn will have broad ramifications for a number of asset prices.”

Contact john at: JohnMauldin@2000wave.com.

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Article by John Backus, Partner New Atlantic Ventures

“Much has been written about the explosive growth of smartphones and tablets, but apps are what make them useful and are driving their adoption. IDC estimates mobile app downloads will reach nearly 182.7 billion in 2015. There are now nearly one million apps, mostly for Apple and Android devices, and Gartner projected app revenue from app stores alone will reach $58 billion by 2014. Apps are big business.

But this sheer volume of apps creates real complexities for app developers and consumers alike. As a developer, how does your app stand apart from the pack? As a consumer, finding the right app is like looking for a needle in a haystack.

Conventional wisdom suggests that search is the answer. Chomp, Quixey and even Yahoo! let you discover apps through search. Others are trying to help you search for apps with various algorithms, through social networks and games.

I disagree with this this entire approach.

Search is not the answer for app discovery – finding the top apps is serendipitous.

We find our best apps today by talking to our friends at a restaurant, by reading about them in a blog or an article, or by stumbling upon them on a recommended or top ten list.

Not a month goes by when an entrepreneur I meet, developing a smartphone app, can’t quite answer a simple question: How will you market your app to your customers? All too often the answer lies somewhere between “Apple is going to feature my app,” and “I’m going to advertise it in other apps.” Neither is a compelling answer, nor likely to help developers build a big business.

We’re placing a big bet, alongside VC media giant, Syncom, that serendipity will drive the app discovery process. That’s why we invested in Apptap. Similar to what an ad network does today, serving you ads based on the content of the web page you are viewing, AppTap serves you apps to consider, based on that same content.

A USA Today online reader, browsing an article in the sports section, is likely interested in seeing sports-related apps. A visitor to TUAW (The Unofficial Apple Weblog) is likely to be intrigued by cutting edge Apple iPhone or iPad apps, but not by an advertisement on basket weaving. A Pandora iPhone listener, on the other hand, is likely not interested in clicking out of Pandora to check out a flashing app advertisement.

So if you are a developer, quit trying to trick customers into downloading your app via incented downloads. Don’t run random app ads, it is too reminiscent of early run-of-site banner ads. And don’t think that hoping to be featured in someone else’s app store is a good strategy.

Instead, put your app where your customers are likely to discover it, and you will be well on your way to growing your audience with users actually interested in your app.

Originally published on the Huffington Post, January 13, 2012. Follow John on Twitter @jcbackus”

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Article from GigaOm.

Don’t get mad at me for not finding seven stories for you to read this weekend. I have been busy with some other stuff and as a result I have not been able to spend as much time reading as I normally do. Regardless, here is an abbreviated recommendation list. Hope you enjoy them.

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Article from GigaOm.

Whatever the final tally is, one thing is for sure — Amazon’s Kindle Fire is a legitimate platform and will be driving app downloads for the tablet based on a modified version of Android OS. Today, Read It Later (a service that is like TiVo for web content that I recently profiled) came out and said their downloads are getting Fire-d up.

A lot of happy people unwrapped new gadgets this holiday: Device registrations for Read It Later jumped 148 percent from November to December—a bounce for all the devices and platforms we support, including the iPhone and iPadAndroidKindle Fire and Firefox extension.

This holiday it was the Kindle Fire—12.5% of all devices registered on Christmas day and an impressive 17% of new users on the day after Christmas were from the new Amazon device. As you can see below, the Kindle Fire is still quite a bit smaller than our Android and iPhone/iPad audiences (it’s also the only platform with no free version yet).

While some have claimed that Android users aren’t interested in paid or premium apps, 45% of Read It Later’s Pro users during the holidays came from Android, and 19% came from the Kindle Fire.

Those are some substantial gains for a new tablet that came to market just a few months ago. Nate Weiner, CEO and founder of Read It Later, tells me that “the Fire had a huge presence in our holiday numbers (almost on par with the iPad).” His findings are in keeping with early results from other developers, as my colleague Ryan Kim reported earlier.

It is clear that Kindle Fire will be a presence in the tablet landscape. Only yesterday I was saying that app developers with limited resources need to support two flavors of Android – Samsung’s version and Amazon’s version. The early data from Read It Later only reinforces that.

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