“Mood” is defined as “a pervasive and sustained emotion that colors the perception of the world. Common examples of mood include depression, elation, anger, and anxiety. In contrast to affect, which refers to more fluctuating changes in emotional “weather,” mood refers to a more pervasive and sustained emotional “climate.”[1] While “affect” is an external and observable expression of emotion, “mood” is internal.

Assessing another’s person’s mood, even when physically present with them, can be very difficult. When in person, one can resort to verbal and non-verbal communication to make this type of assessment. One might simply ask someone questions such as “how are you?” or “is something wrong?”, but we all know this rarely produces a ‘verbal answer’ which actually matches a person’s mood. When it comes to non-verbal communication, one might try to draw conclusions about another person’s mood based on observations of his or her affect.

However, even when one can assess someone’s affect – through tone, gestures, and general demeanor – this may be incongruous with their mood. To complicate matters further, what’s considered an appropriate level of affect to display to the exterior world varies across cultures, situations, and personalities. With it already being so challenging to evaluate another person’s mood correctly in person, with direct access to the physical cues which make up ~80% of communication, think about the challenges of evaluating someone’s mood online.

Well, this is precisely what Apple claims it wants to do – assess your mood, for purposes of ‘mood based advertising’ – in the “inferring user mood based on user and group characteristic data” patent application (No. 13/556023) it filed this past January. Online advertisers already use a host of contextual factors – location, age, time of day, types of searches and purchases, and general browsing history – to target individuals, and knowing someone’s mood would add yet another powerful dimension to their arsenal. No one doubts how influential mood is in the way a person processes an ad, and how mood can impact purchasing behavior.

What might this form of advertising look like, though, you may be asking? Imagine if Apple could correctly assess in real-time whether you’re happy or sad – a brand such as Coca-Cola which wants to reinforce psychological association with happiness may only choose to show you ads when you’re happy, while a shoe brand may choose to show a certain ad to a lonely, sad young woman of a certain income category, who may be more susceptible to the ad at that time and engage in some impulsive retail therapy.

How does Apple intend to accurately measure something as intangible as mood, though?

According to its patent application, Apple’s system would collect and analyze a combination of physical, behavioral, and spatial/temporal data over a period of time to build a “baseline mood.”  This “baseline mood” will be used to assess ongoing data collected, to infer real-time moods by comparing against your profile using “mood rules” set along these dimensions. Behavioral data might include engagement with social media (what are you posting, looking at, and how often, for instance), online browsing, and engagement with apps (what and in what sequence), paired with age, gender, and spatial/temporal data such as location and time.

Physical data, and this is where it gets quite interesting, could include the likes of your heart rate, blood pressure, body temperature, or vocal expressions. Below are some of the diagrams from Apple’s patent application, giving a high level overview of their data process.

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What does it mean for advertisers?

If you think about traditional media, many companies held the belief that people in a good mood would respond better to advertising. Some psychological research suggests that in fact, people who are feeling low may be most vulnerable to advertising. With access to online advertising that can incorporate ‘mood’ as a metric, advertisers could potentially have more runway to test this hypothesis, considering the lower testing costs of online advertising versus TV advertising, for instance. Regardless of this type of testing, however, advertisers will jump on this type of data to further refine their desired targeting strategies – whether it is effective or not, harmful or not, remains to be seen.

What does it mean for consumers?

With privacy already being invaded in countless ways, who exactly will welcome this with open arms?

What data should be available to advertisers? How nervous will people be about Apple keeping this kind of data safe? What if it gets into the wrong hands? What happens if Big Brother knows my mood, location, age, physical characteristics, and interests – all in real time?

The challenge of recognizing ‘mood’ is something medical professionals have not yet untangled to their satisfaction. This begs the question – would something so potentially innovative not serve the world better in the realm of medicine rather than in advertising?? Maybe I’m in the “mood not to see ads” – what then? What is known of the potential effect such advertising could have on my mood? What will be done to protect against misuse, or even understand the scope of what that means?

The use of biometrics, were mood-based advertising become a reality, also makes me think differently about the iWatch.  Initially, I wondered what was so new about this product – how will it serve customers, who may already have an iPhone, in a truly new way? Is there enough to make someone go out and purchase the watch, in addition to their phone? Now, I see this is a first method for Apple to build its capability in collecting biometric data. It is indeed going to serve them quite differently, compared to any of their other products.

Final thoughts

How will Google respond to this? Some say they are venturing into the realm of incorporating data on our behavior in the physical world through acquisitions such as Nest, but have they done anything in the way of detecting and incorporating mood? Which one makes people more nervous, and is taking matters ‘one step further’? Other players such as Microsoft filed for their own patents for similar ‘mood-based advertising’ systems, which would rely on data collected online, as well as data collected through the Kinect sensor.

While there is no ‘real-time mood based advertising’ currently in use, and its use may be quite far off in time, the tale of The Apple and the Moodreader provides some important food for thought.


USPTO – http://www.google.com/patents/US20140025620

Business Insider – http://www.businessinsider.com/apples-mood-based-ad-targeting-patent-2014-1

The American Psychiatric Association – http://bit.ly/1zoDMfk

Apple Insider – http://appleinsider.com/articles/14/01/23/apple-investigating-mood-based-ad-delivery-system

GeekWire – http://www.geekwire.com/2012/happy-sad-microsoft-system-target-ads-based-emotional-state/

[1] Source: The American Psychiatric Association

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In 2011, Steve Jobs famously declared that he was “going to destroy Android because it’s a stolen product. [He was] willing to go thermonuclear war on this” and that he “will spend every penny of Apple’s $40 billion in the bank to right this wrong. [1]” Three years later, Android has arguably beaten iOS for smartphone market share, controlling 62% of the market compared to iOS’s 33%. Despite this seemingly resounding victory for Google, the war between Apple and Google is far from over; in fact, it has only begun as Apple takes the war to where it really hurts for Google—its core search and advertising business.

Google revolves around its lucrative advertising business. Significantly more profitable than any other line of business that Google operates in, advertising composes 96% of the company’s revenue [2]. Google’s advertising business is so important to them that every strategic decision they make can be traced back to helping their advertising business in three ways. Namely, every one of Google’s decisions does one or more of the following:

1.     Increases the number of times users see ads served by Google. For example, Google released Chrome and Android for free with Google Search as the default search engine to direct more users to Google Search, and thus, AdWords.

2.     Increases the effectiveness of ads served by Google. Google does this primarily by collecting more information about users, resulting in better targeting for their ads. Products like Gmail, Chrome, Maps, Google+, and a whole host of others help Google collect more information about users (and as a bonus provide other web properties where they can show display and text advertisements.)

3.     Increases the time users spend online. The logic here is simple: the more time a user spends online, the more they use Google, effectively helping point 1 and point 2 above. This is the rationale for projects like Driverless Cars and Project Loon, which appear completely tangential to Google’s core strengths until viewed from this lens.

These three priorities encompass the core of Google’s business, and Apple has begun to relentlessly attack each one.

First, Apple threatens to disintermediate Google’s search business. One way they do this is through Safari, the default web browser in all Macs and iOS devices. Safari attacks Google’s business in several ways. First, as of version 8, Safari suggests a top hit for users’ searches even if they have never gone to that page before. If a user enters a search term to Safari’s address bar, they go to a search result directly from the location bar, bypassing Google search completely. (See picture.) This is a huge threat for Google: if users get search results without going to Google’s search landing page, Google will not be able to show search advertisements. Incidentally, Safari search results are provided by a combination of Bing, Wikipedia, Apple Maps, Yelp, and iTunes, which gain the added benefit of user data from the queries.

Safari Search

Apple is also using Siri, iOS’s voice assistant, to attack Google on this front. When it launched in October 2011 as part of iOS 5, Siri was nothing more than a toy—novel enough to show friends and family, but not great enough to actually matter in the day to day lives of iPhone users. Since then, Apple has invested great resources into improving Siri, getting it to the point where most basic smartphone functions and many search inquiries (sports scores, weather, stock prices, restaurants, etc.) can be done through Siri. Guess which search engine Siri uses. Hint: it’s not Google. Every search that someone makes through Siri is a search that they are not making through Google, a particularly disturbing development for Google given that traditional desktop searches have remained flat while the majority of growth comes from mobile devices. As Siri continues to improve, it is only a matter of time before Apple brings Siri to the desktop, threatening Google’s desktop search business.

Recently, Google’s greatest defense has been its Chrome browser. By investing heavily in creating a technically superior browser to any on the market for much of its lifecycle, Google uses Chrome to keep its search engine as the default for users. Apple has neutered Chrome on iOS by severely hamstringing it. First, there is no way to change the default web browser on iOS from Safari to Chrome. This alone will stop many users from reaching for Chrome on their phones. The default search engine for Safari? Bing. But the big weapon Apple brings against Chrome on iOS is the control that it exerts over apps in the iOS App Store. Apple’s developer agreement bans developers from creating programs that interpret code, preventing Google from implementing its own Javascript engine for Chrome. Instead, Google must use the default Javascript engine for iOS apps, which is significantly worse in performance than Safari’s Javascript engine. As a result, Chrome’s share of the iOS browser market is insignificant. [3]

Apple also presents a huge threat to Google’s ability to capture information about users. The rise of the iPhone and iPad has resulted in an app based ecosystem on mobile rather than a web based one. Unlike on desktop computers, users spend a significant amount of time on individual apps rather than in a web browser on individual sites. Within apps, there are no cookies so an important spigot of user information for Google has been shut off. As users spend more time on mobile and time on desktops remains stagnant, if Google misses on this mobile data, it will find it much more difficult to accurately target advertisements and to reach these mobile users, as Apple’s iAd network dominates on in app devices. As Google spends lavishly on projects like Loon and Driverless Cars to increase the amount of time that users spend online, Apple attempts to capitalize by bringing these users spend their newly freed internet time into its app ecosystem through products like CarPlay and the Apple Watch, thus co-opting Google’s web capabilities.

Fortunately for Google, despite Apple’s considerable resources, Google has several options to counter Apple’s moves. Most importantly, the historical trends of the technology industry favor Google’s web-centric approach over Apple’s app-centric ecosystem. As hardware becomes more powerful and mobile browsers become comparable in performance to their desktop counterparts, webapps will become preferred over native apps, as users prefer easier web access and developers crave the cost savings of developing for the web instead of each smartphone platform. This same trend of decentralization has played out over and over again in the history of the tech industry, from the client-server architecture of the 1980s to the domination of the web browser in the 1990s to the rise of the cloud today. This scenario is Apple’s worst nightmare as it commoditizes its mobile operating system and plays directly to Android’s strengths. Unfortunately for Google, mobile web browser performance today is not yet good enough for this transition to occur. Google must accelerate this improvement as soon as possible. First, they must support a high performance open standard for the web in HTML5 to stimulate companies and developers to create bigger and better products for the web. Then, it must make high performance web browser technologies as widespread as possible, which Google does through the open source Chromium project. Next, Google must increase the performance of the underlying pipes, which they have done by introducing Google Fiber, a loss-leading project that has improved internet speeds at incumbent ISPs just through the threat of entry into a market. Finally, Google must partner with semiconductor manufacturers to produce microprocessors that will power faster and better web browsers. To this end, Google has entered into a partnership with Intel to create more powerful x86 mobile chips. By combining this with their relentless pursuit of the domination of Android, Google may head off Apple’s attacks in the long run.

Finally, there is an interesting opportunity for Google to disrupt Apple’s OS ecosystem from the low end. Today, Macs are more than powerful enough for the work that the majority of their users do: surfing the web, writing emails, etc. Google can develop a cheaper operating system with lower hardware requirements that can perform these jobs as easily. Thus, they can prevent the disintermediation of their business in the desktop by Apple products like Siri and also hurt Apple’s market share on the desktop. Google has begun to do this in their Chrome OS products, although they have yet to fully invest in this business. It will be interesting to observe the evolution of ChromeOS in the next few years and see if it can truly become a substitute for Mac OS X and Windows as the internet performance continues to rise.

Google faces attacks on many fronts from Apple as Tim Cook aims to complete the blood fued that Steve Jobs started. Though only time will tell which of these giants will win the thermonuclear war, it has been fascinating to watch these battles being fought in the last few years.

[1] Steve Jobs, Walter Isaacson, 2011

[2] http://investor.google.com/documents/20100331_google_10Q.html

[3] http://techcrunch.com/2012/09/13/chrome-for-ios-market-share-reaches-2-7/


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Apple Watch: (Not) Death to Current Wearables?

While the Apple Watch has yet to hit the shelves, its announcement on September 9, 2014 has the tech community buzzing. For fitness-conscious consumers, the wearables space has been heating up for quite a while.  With Apple’s entry to the market, it is natural to speculate about how the Apple Watch will shake up wearables for startups and tech giants alike. It’s fair to say that Apple knows how to revolutionize product markets. But will the Apple Watch render recently trendy trackers, such as Fitbit and Jawbone UP, obsolete?  The “wearables” title is very broad, and I will argue that these products are actually quite different. These smaller players will need to adapt, but I think they can remain relevant in a world where Apple has come to play.

Aren’t these devices all the same?

First, let’s look at how key features stack up in the hardware.  In line with Jawbone’s popular UP24, the Apple Watch sensors will track your movement (steps), and provide customized reminders to get up and move. Unlike many of today’s trackers, Apple Watch measures heart rate, and allows for constant access to progress via its color display. But that’s not to say that wearables offering such features are absent.  With several months to go before the Apple Watch is in stores, I expect new product lines from Fitbit, Jawbone, and others to be announced for the holiday season.

For endurance junkies, GPS tracking is an important feature that many were wondering about for the Apple Watch. But no dice. Mapping and tracking functionality will still need to come from the smartphone. This means you will still be taking your phone with you while you run if you want accurate mileage, mapping, and pace data. But many of the mainstream trackers are lacking GPS as well, and arguably this is not important to all consumers. We aren’t all training for a marathon. Though for those that are, watches like the Garmin Forerunner, TomTom’s sportwatch, and Samsung Gear S have internal GPS, a distinctive competitive edge for serving this consumer segment.

A surprising feature to be missing in the Apple Watch is sleep tracking. Wearables from Jawbone (and others like Basis and Fitbit) offer, at minimum, the ability to measure how many hours passed before bedtime and waketime. Jawbone UP goes even further with sleep quality, and provides granular tracking of light and deep sleep. As reported earlier in the year, Apple has hired a sleep expert to the Apple Watch team, so I expect the sleep situation to change for future Apple Watch generations. But in the near term, I speculate that Apple Watch will not be tracking sleep for a couple of reasons. First, Apple Watch has much limited battery life of about a day (compared with several weeks for some fitness trackers). This will likely mean that users will need to charge the device overnight. Second, I am doubtful if the Apple Watch form factor lends itself to overnight wear. Undoubtedly, in the overall picture of understanding health we know that sleep is a critical piece but for now, something left to traditional wearables.

The Apple Watch and traditional trackers start to look even more divergent when we look at physical form factor and price. Fitness trackers tend to be smaller, lightweight and durable. They are intended for 24/7 wear. Whereas the Apple Watch appears to be heavier, with more fragile construction, and better suited for waking hours wear only. And if price wasn’t already the elephant in the room, it should be. In comparison, most fitness trackers come in around the $50-$150 range, while the Apple Watch is slated to start at $350.

The Apple Watch is already starting to feel quite different from the traditional fitness trackers in looking at just a few features. The reality is that the Apple Watch is entering a market with a wide array of hardware options that differ with respect to sensors, style, and price point. I think these elements provide real differentiation, and cater to the needs of different consumers. As such, many of these products can retain a place in the market in the near term. However it’s fair to say that they will probably not coexist on the same wrist. It would be naïve to underestimate the competitive forces, especially with power player Apple. On the positive side, I think the Apple Watch is going to boost the wearable market, offering legitimacy to the space, and growing the overall pie significantly. But on the other side, Apple will almost certainly be taking share off the top from other popular wearable companies. Potential Apple Watchers will be iPhone users, at the higher-end of the market, whom value a more multi-functional wearable. But that leaves a significant market opportunity where I believe that the value proposition of a durable, lightweight, $100 fitness tracker is not yet lost.

But they shouldn’t sit still.

How should the pure play wearable companies be thinking about the future? To hedge against lost growth in hardware sales, there is going to be more focus than ever on software. From a financial standpoint, they must build revenue flows from their apps that will out-sustain the commoditization of hardware in the long term. But companies like Fitbit and Jawbone are well funded, and I am optimistic they can ride out such changes in their business models.

Lucky for such companies, from a software perspective, the Healthkit app doesn’t appear to be giving us anything new. How many steps today? This week? This month? For every wearable tracker out there, there’s at least an app, or several, that show aggregate data. There are many niches within health and fitness, so I don’t expect a winner-takes-all market with one killer app to rule them all. Nevertheless, some apps will stand out in the crowd, but who will they be?

As useful as it is to have a record of my steps, sleep, etc… this in itself is not revolutionary. I think what users are looking for is, in fact, actionable recommendations based on their data. We want our data to be analyzed, and personalized insights to be provided to help us better understand our health status and how to improve it. Secondly, we want those analytics to be as smart as possible. Most likely this will require many datapoints to be aggregated from multiple activities in our days– steps, workouts, meals, sleep, commutes, hours spent at your desk. This goes beyond what a single piece of hardware alone can accomplish (at least right now).

Therefore the real play is in growing the platform. As Apple HealthKit enters as a datahub, I expect that we’ll see other platforms (also effectively datahubs) open up as well. Jawbone UP, for example, has already announced that its app is open to data from Apple Healthkit, Google Wear, Pebble Smartwatch – in other words, compatible with tracked data from devices like the Apple Watch. Platform players like Jawbone should be thinking about how to actively promote their APIs to ensure that other apps (hardware based or otherwise) play nicely with their aggregating product. There are many strong fitness apps out there that they should integrate, rather than compete with. Apps like Runkeeper, Strava, MyFitnessPal, and others already have millions of users. Integrate with them, and leverage their data to build a smarter total health app. Furthermore, they should take advantage of social features to cross-promote and build stickiness into their product.

By scaling such partnerships, better analytics will be fueled by both quantity and breadth of data that the platform can capture. The best analytics will lead to the best recommendations, the best user experience, and ultimately the most impact on individual health… no matter which product is worn on the wrist.





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Will Google’s Search Engine Run Out Of Steam?

It is difficult to believe that, in ten years’ time, Google may not still be the number one search engine, though there are a number of factors that are changing the way in which search operates and thereby who will emerge the final winner in this multi-decade saga. Google clearly beat its early rivals based on search quality – a new way of indexing websites compared to the antiquated (more game-able) Yaho/AltaVista methodology. However, as our recent class experience with Bing/Google showed, competition between browsers is increasingly based less on the quality of search results, and more around inertia and complements. This is changing the game, and Google may well not end up the final winner.

Searching via the OS

As mobile becomes increasingly important as a mechanism for search, the operating system and browser become the primary way for a user to search for content online. We have seen this shift with iOS 7 whereby a user simply types into the URL box to conduct a search – they do not have to type into a Google-branded search bar, or visit Google.com itself. It happens that Google is the default search engine used in iOS 7, but this need not be the case. Indeed, given the more limited Google branding within iOS 7, many consumers might not notice if iOS 8 shifts to Bing as the default search engine, searchable from anywhere within the iOS system (e.g., no need to open a browser, etc.). Apple seems keen to wean itself off the Google ecosystem (hence the introduction of Apple Maps) and so long as Apple remains a preeminent player in mobile, Google’s hold on search is not inevitable. It doesn’t require too much of a mental leap to envisage Microsoft paying significant sums to Apple for Bing to become the default search engine on iOS devices, thereby ending the Google monopoly.

Content is king

Across the entire online economy, we are increasingly seeing greater demand for premium content as a way to drive both users and revenues. In the search space, players are increasingly investigating new ways to attract users to one ecosystem over another. For example, one search engine recently explored licensing music and video content which would be offered to users on a gratis basis, ad-free, in return for search engine loyalty. Essentially, so long as a consumer only used search engine X, they would get unlimited access to a Spotify/Hulu equivalent. If they used an alternative search engine, they would be forced to pay for the content. This product has not yet been rolled out, but it points to the opportunity in search given how valuable each individual user/search can be to a major player. Given how similar Google and Bing currently are in terms of search results, it might not take much in terms of free content to convince users to switch default engine.

The importance of semantic search 

The last big change to search comes in terms of ‘semantic search’. This essentially focuses on delivering to users specific answers to questions, as opposed to simply algorithmic search results. Google is probably a front runner in this space, having recently announced its new ‘Hummingbird’ system which is designed to interpret the sematic meaning of the search itself in order to deliver a more attune result. For example, if I search for “what is 10 pounds in ounces”, Google will tell me “160 ounces” as the primary search result. Previously, I might have simply received a Wikipedia article on pounds and ounces. While Google may be first here, there is clearly a long way to go. For example, asking a more complex question such as “what are the top 10 VCs in Boston” results a suite of news articles related to the topic without actually delivering answers themselves. Perhaps therein lies an opportunity for a challenger with development resources and significant motivation, though overcoming Google will not be an easy task.

In summary, Google clearly still has a stranglehold on search. Nonetheless, there are cracks in the armor appearing as OS becomes more important, content can be used to drive adoption, and consumers are looking for a different kind of search result. Google has a defensive position in all of these areas – with Android, Google Play, and Hummingbird. But will it be enough to stave off a hungry competitor that is rapidly seeing its core cash cow (PC OS) being supplanted by new mobile OS? The incentives are there, but can Microsoft (or anyone else) deliver.

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How iOS 7 Could Disrupt the International Phone Call Market

A little known feature on Apple’s new iOS 7 operating system could potentially disrupt the international phone market. The new app is called Facetime. While most iPhone users know Facetime well, what they probably do not know is that the app received a makeover with the latest iOS release. Now iPhone users have the option to Facetime audio. Ever since the release of iOS 5 in 2011, users have had the ability to make Facetime video-chat calls over 3G networks. What the new functionality allows users to do is less. Apple now is giving users the option make video-chat calls without the video. Most people would say that this sounds pretty boring. That it is nothing more than the ability to make a normal phone call. And they would be exactly right. The “so what” is that two iPhone users in different cities, states, or more importantly, countries, or continents can now make pure data phone calls to each other through a native phone application. The question is: how will this affect the international phone call market?

First things first, this is not an earth-shattering new technology. Many critics will assert that other Voice Over Internet Protocol (VOIP) applications such as Skype, Tango, Talkatone, and Viber have given users this functionality for at least the past few years. While this is true, none of these companies have been overly successful at gaining a substantial market share for multiple reasons. One such reason is that for any of these apps to work, both participating parties must have the same application installed. As a result, many cellular phone owners have multiple VOIP applications and rarely use any because of the hassle of maintaining multiple contact lists. Additionally for any of these applications to work, users have to allow them to run in the background of their phones utilizing precious battery life and processor speed. Facetime solves both of these problems by being integrated into iOS 7. It utilizes the phones organic contact list, so users do not have to shuffle to find a phone number and remains dormant while not in use just as the previous version of itself did, to preserve battery life and processor speed.

So the underlying question is whether or not large telephone companies should be concerned. Although Apple holds approximately 40% of cellphone market in the United States, its worldwide numbers are not nearly as high. Commanding only a 25% global market share, Apple is not placing its new, industry changing software in everyone’s hands; however, whether or not it will be in enough people’s hands to make the telephone companies feel a little queasy is a different story. Apple has broken down the barriers to adoption of its new technology by making it as simple to use as a standard phone. All you have to do is open your iPhone’s contact list, find a friend with an iPhone, select Facetime audio, and chat away.


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