Apple sold 3.6M smartwatches in Q2

But Fitbit held on as the world's top wearables vendor, IDC says

Fitbit retained its title as the world's top wearables vendor for the second quarter of 2015, but Apple is quickly gaining ground.

During its debut quarter in the wearables market, Apple shipped 3.6 million Apple Watches compared to Fitbit's 4.4 million fitness trackers, IDC said Thursday.

Overall, 18.1 million wearables shipped during the quarter, versus 5.6 million units in the year-ago quarter.

Apple began selling its smartwatch in April, but hasn't released sales figures, claiming that disclosing this information would give competitors an advantage.

The company has been vague in describing how consumers have reacted to the Apple Watch. During a call with analysts to discuss Apple's third quarter results, CEO Tim Cook said sales beat expectations while demand exceeded supply.

Apple's reticence has led to speculation and various wide-ranging estimates of Watch sales.

Apple debuted as the second-largest vendor in the wearables market, and dominated the "smart wearables" sub-category, which IDC defines as devices that can run third-party applications: the Apple Watch accounted for two out of every three smart wearables shipped during the quarter.

All other wearables will be compared to the Apple Watch, forcing competitors to keep pace or attempt to surpass Apple, said the research firm. For companies that make basic wearables, that could prove challenging, even for Fitbit.

During the second quarter, Fitbit had notable successes, such as increasing the number of companies using their fitness trackers for corporate wellness programs and posting strong revenue growth, IDC said.

But IDC expects Apple to dominate the wearables space and eventually eclipse Fitbit as the market leader. In fact, IDC predicted that over the next five years, basic wearables will lose market share.

Fitbit's fitness trackers fall into the basic wearables category. Vendors of basic wearables will need to figure out how to make their devices compete with the more sophisticated smart wearables without increasing prices.

Another player in the wearables market is Xiaomi, which in May began selling its Mi Band for $14.99. The Chinese vendor shipped 3.1 million units of the basic wearable in the second quarter, IDC said.

Rounding out IDC's list of leading wearables manufacturers are Garmin, which makes fitness devices like GPS watches, and Samsung, which makes a smartwatch. However, Samsung's products could have limited interest if they run the company's Tizen OS, IDC said.

But Apple will be the wearable vendor to watch, IDC said, especially since the iPhone maker just entered the space and the next version of watchOS will let apps run natively on the Apple Watch.

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After three-day shutdown, HP now effectively two companies

HP is nearing 'the last of the restructuring Mohicans,' said CEO Meg Whitman

Hewlett-Packard doesn't officially become two companies until Nov. 1, but the company has already separated its internal systems and is effectively operating as two businesses.

"On August 1, we successfully split the operations and IT systems for the company. This was an incredibly complex process and the team executed very well," CEO Meg Whitman said on HP's quarterly earnings call Thursday.

HP worked directly with 3,500 of its biggest customers and partners to prepare for the cutover, which involved separating 750 systems that handle 95 percent of its business.

"After shutting down for just three days to transition, critical operating systems across our business segments are now live globally," Whitman said.

It's not exactly clear what shutting down for three days means for a company that size, but HP stuffed extra product into its distribution channel to give it a cushion and make sure the transition went smoothly.

HP had already said it planned to flip the switch Aug. 1, to give it time to iron out any kinks before the official split on Nov. 1.

HP will become two companies: HP Inc., which will sell its PCs and printers, and HP Enterprise, which will sell its servers, storage and network gear, as well as its software, enterprise services and cloud services.

HP's revenues have declined every earnings period for the past 16 quarters -- or for four straight years -- and it hopes the split will give each company a sharper focus and the ability to move faster and compete better.

But the prospects that it will hit the ground running look bleak, at least for HP Inc.

After a respite last year when businesses bought replacement PCs ahead of the Windows XP support cutoff, PC sales are now in decline again, and HP doesn't expect things to get better soon.

"Market declines and competitive pricing pressure have accelerated since May," Whitman said Thursday. "We now see a difficult business environment for several quarters to come."

Printer sales were also down last quarter, when the strong U.S. dollar helped Japanese firms to undercut HP's prices.

The enterprise division is faring a little better. Sales were up 2 percent last quarter, with gains in networking and industry-standard servers. The enterprise group has a profit margin of 13 percent -- though that was down a point from last year, in part because HP sold more high-density cloud servers, which yield smaller profits.

But the enterprise group is turning a corner, according to Whitman. In storage, for instance, sales of HP's newer "converged systems," including 3Par equipment, now account for more than 50 percent of sales, Whitman said, overtaking its older, legacy storage products.

HP has done a lot of restructuring in the past several years, including laying off 55,000 workers. A financial analyst on the earnings call noted that the restructuring has cost it roughly $1 billion a year for the past several years.

It's not over yet, but it's drawing to a close, according to Whitman. HP wants to cut more costs from its enterprise services business, which likely means more job cuts. HP will describe those plans at its financial analyst summit next month.

After that, she said, there may be smaller restructuring efforts, but they'll be accounted for within the enterprise services group, rather than by HP as a whole.

"We know it’s been a concern, and frankly it's been a concern to us," Whitman said of the restructuring costs. "So this will be the 'last of the restructuring Mohicans.'"

HP's shares were down about 1 percent after the results were announced, after falling 1.4 percent in the regular trading day. The company's net profit for the last quarter fell 13 percent to $854 million, on revenue of $25.3 billion, down 8 percent.

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Microsoft's rollout of Windows 10 gets B+ grade

General vibe of the new OS remains positive, say analysts

Microsoft has done a good job rolling out Windows 10 in the first two weeks, analysts said today, and the general vibe for Windows 8's replacement has been positive, even though glitches have dampened some enthusiasm.

"If I had to give Microsoft a letter grade, it would be a B or a B+," said Steve Kleynhans of Gartner. "It's not an A because it hasn't gone perfectly. They've stubbed their toe over privacy issues, for example."

Microsoft began serving up the free Windows 10 upgrade late on July 28, giving participants in the firm's Insider preview program first shot at the production code. It then slowly began triggering upgrade notices on Windows 7 and 8.1 machines whose owners had earlier "reserved" copies through an on-device app planted on their devices this spring.

The Redmond, Wash. company has said little of the rollout's performance other than to tout that 14 million systems were running Windows 10 within 24 hours of its debut.

Estimates based on user share data from U.S. analytics company Net Applications, however, suggests that by Aug. 8, some 45 million PCs were powered by Windows 10.

Analysts largely applauded the launch. "As far as the roll-out, it's not any worse than any other Windows," said Kleynhans. "But it's all happening at this compressed timetable.

"And social media now amplifies any problems," he continued, much more so than three years ago when Windows 8 released, much less in 2009, when Microsoft last had a hit on its hands.

Others were more bullish on Microsoft's performance. "Windows 10's go-to-market was really quite good," said Wes Miller of Directions on Microsoft, a research firm that specializes in tracking the company's moves.

Miller was especially impressed with Microsoft's ability to make customers covet the upgrade. "Something Microsoft has not always done a great job of is creating a sense of exclusivity," said Miller. "But they're withholding [the upgrade] just enough that there's a sense of excitement. People are saying, 'I want it, I'm not getting the upgrade yet.' Arguably, that exactly what Microsoft wants."

Windows 10's rollout has departed from those of past editions in significant ways.

Historically, Microsoft released a new Windows to its OEM (original equipment manufacturer) partners first, who were given months to prepare new devices pre-loaded with the operating system. Only when the computer makers were ready did Microsoft deliver paid upgrades to customers who wanted to refresh their current hardware. Relatively few users paid for the upgrades; most preferred to purchase a new PC with the new OS already installed.

This cycle, Microsoft gave away the Windows 10 upgrade to hundreds of millions of customers -- those running a Home or Pro/Professional edition of Windows 7 or Windows 8.1 -- to jumpstart the new OS's adoption. With some exceptions, the upgrade hit before OEMs had prepared new devices or seeded them to retail.

Because of the large number of customers eligible for the free upgrade, Microsoft announced it would distribute the code in several waves that would take weeks (according to Microsoft) or months (the consensus of analysts) to complete. While some had predicted that the upgrade's massive audience would stress the delivery system Microsoft had built, or even affect the Internet at large, neither happened.

The "Get Windows 10" app -- which was silently placed on PCs beginning in March -- not only served as a way to queue customers for the upgrade, but also ran compatibility checks to ensure the hardware and software would support the new operating system, another slick move by Microsoft.

"Microsoft rolled out Windows 10 to the audience that would be most receptive," said Patrick Moorhead, principal analyst at Moor Insights & Strategy, referring to the Insiders-get-it-first tactic. "Then they rolled it out to those who weren't Insiders, but who had expressed a desire to get the upgrade. And only those [whose devices] passed all of its tests got it. That was a smart thing to do."

The latter was designed to limit upgrade snafus, something Microsoft has chiefly, although not entirely, accomplished. "While the rollout was pretty clean, there have been glitchy issues here and there," said Kleynhans, who cited post-Windows-10-upgrade updates that crippled some consumers' machines.

Moorhead echoed that, highlighting the out-the-gate problem many had keeping Nvidia's graphic drivers up-to-date as Microsoft's and Nvidia's update services tussled over which got to install a driver. "Problems have been more anecdotal than system-wide," Moorhead said. "And they seem to get remedied very quickly."

The bungles haven't been widespread enough to taint the generally favorable impression of Windows 10 generated by social media, news reports and Microsoft's PR machine, the analysts argued.

"Overall, I'd say Windows 10 has received a much more positive reception than other [editions of] Windows," said Moorhead, who said the reaction was justified, since the developing consensus is that Windows 10 is a big improvement over its flop-of-a-predecessor, Windows 8.

"The vibe is positive, but it's much more about consumers now than businesses," said Directions' Miller. Enterprises, he said, will take a wait-and-see approach -- as they always do -- before jumping onto Windows 10, as they must if they're to stick with Microsoft, a given since there isn't a viable alternative.

A credible reaction from corporate customers, Miller continued, won't be visible until Microsoft finishes unveiling its update tracks, called "branches," particularly the "Long-term servicing branch" (LTSB). That branch will mimic the traditional servicing model where new features and functionality will be blocked from reaching systems that businesses don't want to see constantly changing.

"People are liking what they are getting out of the other end" of the upgrade, added Kleynhans. "From what I've heard, they're happy, surprisingly happy, and generally pretty positive about the OS. But I'd expect the new shine to wear off after the first couple of weeks."

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Virtual Mobile Infrastructure: Secure the data and apps, in lieu of the device

VMI offers an effective, efficient way to provide access to sensitive mobile apps and data without compromising security or user experience

This vendor-written tech primer has been edited by Network World to eliminate product promotion, but readers should note it will likely favor the submitter’s approach.

Corporate use of smartphones and tablets, both enterprise- and employee-owned (BYOD), has introduced significant risk and legal challenges for many organizations.

Other mobile security solutions such as MDM (mobile device management) and MAM (mobile app management) have attempted to address this problem by either locking down or creating “workspaces” on users’ personal devices. For BYOD, this approach has failed to adequately secure enterprise data, and created liability issues in terms of ownership of the device – since it is now BOTH a personal and enterprise (corporate)-owned device.

MAM “wrap” solutions in particular require app modification in exchange for ‘paper thin’ security. You cannot secure an app running on a potentially hostile (unmanaged) operating system platform, and critically you can’t wrap commercial mobile applications.

By contrast, Virtual Mobile Infrastructure (VMI) offers an effective, efficient way to provide access to sensitive mobile apps and data without compromising enterprise security or user experience.

Like VDI for desktops, VMI offers a secure approach to mobility without heavy-handed management policies that impact user experience and functionality.

From IT’s perspective, VMI is a mobile-first platform that provides remote access to an Android virtual mobile device running on a secure server in a private, public or hybrid cloud. The operating system, the data, and the applications all reside on a back-end server — not on the local device.

From a user’s perspective, VMI is simply another app on their iOS, Android or Windows device that provides the same natural, undiluted mobile experience, with all the accustomed bells and whistles. Written as native applications, these client apps can be downloaded from the commercial app stores, or installed on devices using MAM or app wrapping technologies.

As Ovum states, “Put more simply, this [VMI] means in effect that your mobile device is acting only as a very thin client interface with all the functionality and data being streamed to it from a virtual phone running in the cloud.”

Getting started with VMI
After downloading and installing the VMI client, users go through an easy setup process, inputting server names, port numbers, account names and access credentials. When users connect to the VMI device they see a list of available applications, all running on a secure server that communicates with the client through encrypted protocols.

The client accesses apps as if they were running on a local device, yet because they are hosted in a data center, no data is ever stored on the device. Enterprises can secure and manage the entire stack from a central location, neutralizing many of the risks that mobile devices often introduce to a network.

Two-factor authentication is supported via PKI certificates in the physical phone’s key store. The physical device forces the user to have a PIN number (or biometric) to unlock the phone when there is a certificate in the hardware-backed key store. Additionally, the client supports variable session lengths with authentication tokens.

The server infrastructure that supports VMI clients can be implemented as multiple server clusters across geographic regions. As users travel, the client synchronizes with the server cluster closest to its physical location to access the applications on its virtual mobile device. The client continues to communicate with one server at a time, choosing the server location that provides the best performance.

In a typical deployment, there are compute nodes that host the virtual mobile devices, a storage service that holds user settings and data, and controller nodes that orchestrate the system.

The controller node(s) can be connected to an Enterprise Directory service, such as Active Directory, for user authentication and provisioning, and systems management tools such as Nagios and Monit can be used to monitor all parts of the system to ensure they are up and behaving properly (e.g. are not overloaded). The server hosting the devices creates detailed audit logs, which can be imported into a third party auditing tool such as Splunk or ArcSight.

VMI is platform-neutral, which means organizations can write, test, run and enhance a single instance of an app on a ‘gold disk’ OS image, rather than building separate apps for each supported end-user platform. This represents significant time and cost savings for resource-constrained IT organizations.

And while VMI takes a different approach to securing mobile endpoints than MDM, it does not aim to replace those solutions. Instead, VMI can integrate with MDM, MAM and other container solutions allowing organizations to use MDM to configure and manage an enterprise-owned virtual mobile device running in a data center, and MAM to support version management and control upgrade scheduling of VMI thin clients.

Mobile by design
Because VMI is optimized for smartphones and tablets with small touch screens and many sensors, users enjoy native apps and a full mobile experience. VMI supports unmodified commercial apps, allowing for greater workflow and productivity, and complements sandbox container solutions that provide limited offline access to apps such as corporate email by providing a richer user experience when the user is online (the vast majority of the time).

Users can also access separate work and personal environments from a single device, enjoying Facebook and Instagram and sending personal emails without worrying that corporate IT teams will seize data or wipe their data. When an employee leaves an organization, IT simply revokes their access privileges to the virtual mobile device.

Similar to VDI, there are many different business scenarios in which organizations should evaluate VMI. The most common include:

Healthcare - Enables access to electronic health records and other sensitive apps and data from mobile devices, in compliance with HIPAA privacy requirements.
Financial Services - Facilitates access to more sensitive client transaction data and business processes, from both personally owned and enterprise owned devices.
Retail - Supports secure Point of Sale as a Service for credit card transactions; Protecting the confidentiality of customer data accessed both from on and off premises.
Enterprise BYOD - Provides secure access to native apps from employee-owned mobile devices; keeping all data secure in the data center while at the same time not infringing on personal privacy.

Commercial Services - Extends the mobile enterprise to contractors, partners and customers.
Classified mobility - Allows government and security services to access data and applications from classified mobile devices, ensuring compliance with the thin client requirements of NSA’s
Mobility Capability Package.

With 1.9 billion devices expected to hit the market by 2018, IT professionals are on the hunt for a more effective way to secure the enterprise. VMI provides the access they need without compromising security or user experience.

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