ImaginativePRO Blog

HOW DOGFISH HEAD TEAMED WITH COLEMAN TO COMPLIMENT THEIR "FOOD-CENTRIC" BEER WITH THEIR SAUSAGE AND OTHER GOODIES

These are Dogfish Head's new sausages, made in a collaboration with Coleman Natural Foods. (Click Image To Enlarge)

DOGFISH HEAD HAS TEAMED WITH COLEMAN TO CREATE A LINE OF SAUSAGES WITH A TWIST: THEY’RE SPECIALLY FORMULATED TO PAIR WITH SPECIFIC DOGFISH HEAD BEERS.

I bite into a perfectly cooked bratwurst, but I don’t taste bratwurst. I taste honey and apricots--maybe even the hint of a saison. And as I follow the bit up with a swig of an oak-aged IPA, I can taste as the sweetness of the pork transitions seamlessly to vanilla and then to hops, a continuum of flavor that makes me appreciate both entities anew.

They'll come in four flavors (left to right)--Traditional Bratwurst, Heirloom Italian Brat, Spicy Espresso Brat, and Greek Feta Brat. Each is infused with Dogfish Head beer. (Click Image To Enlarge)

I’m not at a pretentious gastropub paying through the nose for a prix fixe food and beer pairing. I’m on my back porch, grilling up a new line of sausages by Dogfish Head and Coleman Natural Foods (Perdue’s natural food line), sipping on Dogfish Head’s Burton Baton IPA. The bratwurst has a flavor profile designed specifically to be paired with this beer, the result of Coleman’s food scientists teaming up with Dogfish Head brewmasters for months of taste testing and iteration.

But what makes them particularly interesting is that each of these sausages have been designed specifically to pair with certain Dogfish Head beers. (Click Image To Enlarge)

The result is that, starting today, select gourmet stores in the Northeast will carry Dogfish Head–branded sausages, including flavors like Spicy Espresso and Heirloom Italian, each flavored with beer reduction. As a consumer snags a pack of their, say, Greek Feta Chicken Brats (infused with actual Midas Touch beer) and flip over the pack, they’ll see two pairing suggestions: a Dogfish Head Indian Brown Ale or a Burton Baton IPA. Assumably, that customer might go snag a six-pack to match then, too.

So their Spicy Espresso Brats are made with espresso powder, minced habanero and cumin, along with a bit of Chicory Stout. But you then are meant to pair that with a Dogifsh Head India Brown Ale or Sixty-One (an IPA with syrah grape must). (Click Image To Enlarge)

“This is going to be huge,” I think as I reach for another sausage that I follow up with Dogish Head’s Sixty-One, an IPA mixed with syrah grape must. It's rare I've felt so gleefully pretentious in my own home.

In my own taste test, I found the pairings both delicious and fascinating in a really fun, academic way. (Click Image To Enlarge)

A BEER BUBBLE?

The truth is, America's renaissance of craft beer is driving an increasingly crowded market. When Dogfish Head launched in 1995, there were 600 craft breweries in the U.S., and maybe a couple opened every week. Today, there are 2,500 craft breweries around the country (the most since the 1880s), and two more open every day.  Yet for all the new breweries, craft beer can only claim 6.5% of the $99 billion US beer market.

Even beers I wouldn't consider myself a fan of--like Midas Touch, which is considered somewhere between wine and mead--was particularly tasty as it bounced off the flavors of the Greek Feta's dairy kick. (Click Image To Enlarge)

Dogfish Head founder and president Sam Calagione admits.

“I don’t think, mathematically, that the current pace is viable for years to come.  There’s going to be some inevitable shakeout and economic darwinism. Some of these entries won’t make it.”

Now Calagione is quick to point out that he doesn’t actually view his fellow craft brewers as competition--that designation belongs to wine, spirits, and the “craft” brewers that are actually owned by international corporations. Besides, he explains, beer drinkers of today aren’t like our fathers were. We don’t decide Schlitz is our go-to beer and drink it every day for eternity. We’re promiscuous. We want to have a “whole quiver” of different craft beers in our fridge. 

Dogfish Head is also collaborating on a line of pickles... (Click Image To Enlarge)

Even still, Calagione clearly recognizes the value of diversification in an increasingly crowded marketplace, and food is a natural complement of beer. (It’s why Sierra Nevada makes a mustard and Stone has a licensing deal to make hot sauce.) But there hasn’t been a brewery that’s committed to a full lineup of foods, which Dogfish Head saw as a huge, missed opportunity.

Calagione explains.

“Everyone doesn’t eat out at a restaurant every night, and if you’re driving you can’t have too many beers at a restaurant.  How do we bring that artisanal-beer dinner concept into the home?”

...and chowder. (Click Image To Enlarge)

SUPERMARKET PRIX FIXE

Food pairings at the supermarket level are by no means a new idea. Companies like Kraft leverage the collective strength of their 55 or so power brands at the supermarket, mixing Oscar Mayer deli meats and Capri Sun juice drinks in the same Lunchables box.

But we haven’t really seen this approach applied to higher-end goods to re-create the fine-dining restaurant experience. Dogfish Head wanted to create a complete meal of what they’re calling “beer-centric foods.” So they teamed with Brooklyn Brine to make "hop pickles," and Sea Watch to make chowder (both are on sale now). But the pièce de résistance of the lineup would be a main course protein. Pairing beer and sausages was just a natural fit. Coleman and Dogfish Head struck up a deal to collaborate on a release.

With all of these "beer-centric foods" in place, Dogfish Head would like to be able to sell you a whole gastropub-level food and beer pairing to experience at home. And I think they're on to something. But may I be so bold as to make one suggestion? Variety packs. (Click Image To Enlarge)

Coleman's Brand Director Jody Hallman explains.

“It started with, we’ll take one bottle of Raison D'Etre and put it into a small, 40-pound batch of meat, mix, and see how it goes.”  

From there, a one-year process of R&D followed, in which Coleman and Dogfish Head went from 15 ideas for sausages to 10 mixed and tested sausages, to 5 flavors that would eventually make the cut.

For the Coleman team, mixing beer into recipes was a new challenge. But on top of that, pairing those tastes with another beer brought in a whole other slew of considerations. Because Dogfish Head didn’t want to simply match the taste of a pilsner in a sausage with the same pilsner you were sipping on; they wanted to enhance the complexity of the experience.

Calagione explains.

“There’s exponentially more flavors when you have one beer in the sausage but have a different beer from our portfolio to pair it with.”

(That might sound silly, but he’s absolutely right. I found my home taste-test to be academically fascinating.)

That involved several iterative taste tests with both teams. Were the sausages good on their own? Were they good with beer? Which beers were they best with? Then the sausages were offered at Dogfish Head’s own brewery--and eventually, food truck--where eager customers actually paid to serve as a test market. (It’s the same model the brewery uses to test new beers before taking them nationwide.)

A FAMILY RECIPE

The approach to one sausage was proving particularly tricky: the Italian. While the flavor was always in the running, formulating an Italian sausage for the mass market palate is actually more difficult than one might expect.

Hallman explains. 

“You think Italian is going to be a pretty simplistic flavor profile, but it can be pretty complex because everyone's perception of what it should be differs dramatically,”

The solution proposed by Calagione was to try his Sicilian grandma’s family recipe, who’d actually sold sausages out of a storefront while his grandpa made bootleg wine in the basement (a jug would go to the best sausage customers). The story was too good for Coleman to resist.

Hallman laughs.

“We cut our first samples of that, and me and our lead of R&D were like, OK, we’re going to try this, what if it doesn’t taste good?  You get kind of nervous. It could taste great, and that’d be ideal! But the whole time it was like, what if it doesn’t?”

Coleman admits to making some recipe adjustments for commercialization purposes--like saucing a whole hog--but the recipe made it through relatively unfettered. It’s quite spicy for a supermarket product, with a kick of oregano and a strong pepperoni finish.

Hallman confesses.

“You can make the same pork brat for a while, and it kind of feels a little mundane.  This project stepped into our culture and really shook it up.”

TASTES LIKE A TREND

At this point in my tasting, I’m juggling four sausages and three beers while carefully referencing a neatly printed cheat sheet. A bite here. A swig there. But as sensitively as I try to taste, my palate is now shot. The yeast, hops, pork, and seasonings have blended into a cacophony of flavors my mind has grown too tired (or maybe too fuzzy?) to distinguish.

And I can’t remember the last time I had so much fun eating anything that came in shrinkwrap.

Dogfish Head hasn’t just licensed a line of sausages with their logo on it. They’ve found a way to translate a very particular fine-dining experience into processed food. It’s why, even if any old beer and brat will taste fantastic together, Dogfish Head’s will offer something unique.

That is, until every food and beverage company in existence copies the idea. And if they have any sense, they will.

COMMENTARY:    Boy, don't those sausages look good?  And, I bet they taste and smell just as good.   I think Dogfish Head's strategy of partnering with Coleman to increase sales of their brand sausages, pickles and chowder is a great way to increase sales of both products, and will certainly help coleman sell more BBQ grills, lighter fluid and accessories.  This type of marketing strategy is often referred to as a complimentary products strategy.

If you sell gourmet muffins, you have a likely market for gourmet coffee.

That's the concept behind complementary products.  They do exactly that - they complement each other. One might enhance the other as the case might be with wine and cheese, or eyeshadow and mascara.

Products might complement each other from a standpoint of necessity. One example is a computer and a monitor; another would be a vacuum cleaner and vacuum bags.

A customer who has already bought from you is more likely to buy from you again. A customer is also more likely to buy a product that complements one they've just bought.

Selling a pair, or a combination, of complementary products is another smart marketing option. It's easier for the customer to buy from only one vendor and make a single purchase. Offering a discount for this bundle of products can further increase your changes of making the sale.

We all know about bundling. It's become an art form for the communications industry. Customers buy their long distance, cell phone, cable, and internet from a company in exchange for paying less than they would for the individual products and services.

It can make sense to give away a complementary service. Printers sometimes offer free layout and design services for large printing jobs. It can also be an incentive for establishing repeat business.

One key to successfully promoting complementary product pairings or packages is to break it down in dollars and cents.

Tell the customer how much they're saving in cold, hard cash. That's usually more effective than expressing it as a percentage discount.

Establish immediacy. Offer your customer a discount on a complementary product if they make the purchase within a certain time period.

Informational products make great choices to give away as complementary items.

If you're a representative for health and beauty products, offer your customers a free booklet full of makeup tips and tricks. Include your contact info, including website URL, throughout the booklet along with coupons. And don't forget coupon codes for online purchases.

You can take advantage of customers' purchases of complementary products even if you don't offer them yourself. Establish an alliance, or multiple ones, with those who do offer them.

If you're a caterer, establish marketing alliances with photographers, florists, and musicians.

If you specialize in pet photography, your market is one that pampers their pets. Logical complementary products and services would include pet grooming, doggie spas, and clothing for pets.

So, who are your customers? And what else do they want to buy that you aren't selling?

Courtesy of an article dated September 12, 2013 appearing in Fast Company Design

HOW TO DESIGN A BETTER OFFICE FOR BOTH INTROVERTS AND EXTROVERTS

Colleagues can easily collaborate in small groups in this quiet location in Vodafone’s Amsterdam office. (Click Image To Enlarge)

COULD A “PALETTE OF PLACE” GIVE WORKERS CONTROL AND CHOICE OVER WHERE AND HOW THEY WORK? ONE COMPANY GOES DEEP INTO WORK SPACE.

Ask workers what bugs them most about the office, and chances are they’ll tell you they can’t concentrate or focus on their work.

At Steelcase, we regularly survey workers from diverse industries, job types, locations and age groups about their workplace satisfaction, and for years the number one issue has stayed the same: 95.3% of workers say having “access to quiet, private places for concentrated work” is important, but over 41% say they don’t have them. That’s a big problem for all workers, but especially for introverts (estimated at one-third to half of the population), who recharge their batteries by being alone. It’s an even bigger issue for organizations that employ both introverts and extroverts and who need to leverage the strengths of all workers as they strive to be more innovative and nimble in a competitive climate.

Steelcase workers take advantage of quiet spots for focused work. (Click Image To Enlarge)

Several factors contribute to this lack of quiet and privacy, regardless of whether we’re wired more toward intro- or extroversion. The shift toward mobile work has left tribes of nomads with limited options for concentrated work. Sometimes the local coffee shop is a great option, at least for anonymity, but even the best ear buds can’t tune out those toddlers at the next table. And our technology devices are a constant source of interruption, constantly tugging at us for attention. Places that used to be our last refuge for privacy, like our homes, and even our bedrooms, have become extensions of our workplaces, where interruptions can barge in with a single alert or silly ringtone. Perhaps the biggest culprit is actually our quest for interaction and collaboration--both of which are critical components of innovation and essential to high-performance companies. The pitfall for some organizations is the assumption that group work is the exclusive means to an innovative end. Design some cool-looking collaboration areas in the middle of an open office plan, with lots of traffic from nearby workers, throw in some beanbag chairs or fake grass floor covering and brilliant ideas will spontaneously erupt . . . right?

Steelcase’s new Innovation Center at its Grand Rapids, Michigan, headquarters offers plenty of collaborative zones, but there are also spaces like these for quiet, focused work to let ideas develop. (Click Image To Enlarge)

Sometimes. For some people. Take my colleague Katie, for instance, who draws energy and motivation from groups of people and lots of stimuli. Testing as an extrovert on quizzes from both authors Susan Cain (Quiet: The Power of Introverts in a World That Can’t Stop Talking) and Daniel Pink (To Sell is Human), she is happiest among a big group of boisterous creative types, with lots of sensory stimulation. You’ll often find her working in the café, interacting with a variety of people as she works on a new idea. But even Katie has moments when she needs to get away and focus, either alone or with a small group.

Conversely, another colleague, Uli, thrives when she has access to areas where she can control the sensory stimulation, eliminate noise disruptions, and engage in deep, focused work. When it’s time for the team to come together, she’s ready to contribute new ideas and participate in a group session to iterate and create. As for me, I’m a confirmed ambivert. It depends on a variety of factors: the type of work I’m doing, the tools I need, or the mood I’m in. Some days, I get my best thinking done when surrounded by people and activity. Other times, I need walls with full acoustical seals that shield me from disruptions (plus ear buds, for good measure).

Check out Drake Baer’s recent look at how organizations can benefit from embracing qualities of both introverts and extroverts. And recall that Cain struck a nerve within the corporate world by drawing attention to the needs of introverts and challenging the notion that creativity and innovation come exclusively from boisterous socialization. Cain makes the case that people are more creative when they enjoy privacy and freedom from interruption and notes that even extroverts need time for contemplation and focused, individual work. Our research at Steelcase corroborates this point--we all need time to ourselves. To read. To think. To reflect.

Some workers choose to retreat from the structure of their day and relocate for a few hours to these comfortable spaces in Steelcase’s WorkCafé that create a “palette of place” throughout their workday. (Click Image To Enlarge)

The point is, whether you’re an extrovert or introvert, we can’t expect workplaces designed with a cookie-cutter approach to help us do our best work. We need a range of spaces that are created for both group and individual work, some that are assigned and others shared. Some in the middle of activity, and others tucked out of the way. At Steelcase, we call it a “palette of place” that offers workers control and choice over where and how they work. It is organized in zones for different kinds of work that allow people to amp up or down the degree of sensory stimulation they want, and to signal their level of availability for interaction. It doesn’t require any more space than a conventional office and can actually use real estate more efficiently.

Providing sensory control is critical to employee well-being, especially for introverts who are more sensitive to stimuli. It’s important to integrate spaces that encourage people to retreat from the structure of the day, to renew and rest or gain fresh perspective. Employees should be able to control lighting, sound, and temperature, work in relaxed lounge or resting postures, and be free of interruptions. It’s equally important to provide spaces that allow workers to feel a physical connection with others, even when working alone.

One of our clients, Vodafone, created a space called Club 11 in their Amsterdam office that offers food, an outdoor terrace, and upbeat music. It’s fun and functional, but you wouldn’t mistake it for a library or choose it when you need quiet focus. The space for that is actually called the library, located in another zone, and one of the few places with rules about how people work: talking and phone calls are not allowed.

At Vodafone in Amsterdam, workers can quickly move into small rooms such as this one for solo, focused work or small group collaboration at Vodafone. (Click Image To Enlarge)

At Skype’s Palo Alto offices, collaboration is nurtured, and workers sit at benches that allow for an easy exchange of ideas. Yet, headphones are the respected way of signaling “leave me alone, I’m thinking,” and the company also offers a variety of small, private places for individuals who need quiet and less stimulation.

Steelcase’s WorkCafé at the company’s Grand Rapids, MI HQ is a space designed with a coffee shop vibe that’s a popular spot for both collaboration and solo, focused work, in addition to eating and socializing. (Click Image To Enlarge)

We recently opened a new WorkCafé in our Grand Rapids, Michigan, headquarters, a space designed with a coffee shop vibe that is a great spot not only for eating but for all kinds of work--social, learning, collaboration, as well as focused. We found that 80% of our employees choose it for individual work at least some of the time. They know they might be interrupted, but they prefer to be near others.

Extroverts and introverts have plenty in common: They both need to feel like they’re connected to other people and to the organization. They also need quiet places where they can focus, reflect or recharge--it just might be in different degrees. Ultimately, they need workplaces with a range of spaces that allow them to choose what works best for them.

--Chris Congdon is director of global research communications for Steelcase Inc.. Follow her on Twitter at @cscongdon.

COMMENTARY:   I have posted a number of articles about trends in the workplace and office furniture.  Checkout my posts dated April 3, 2013 about Knoll's "Activity Spaces" office furniture line, my post dated September 26, 2011 about Steelcase's "cafe-like" Media:Space office furniture designed for social collaboration, my post dated March 30, 2012 about Herman Miller's Aeron chairs and the plant where they are manufactured, my post dated February 10, 2012 about Lego PMD's (Lego toys) corporate offices in Billud Denmark and how Lego toys are incorporated into their workplace, my post dated December 17, 2011 about how Plantronics, the famous headset maker, has designed offices for their telecommuting staffers, my post dated December 7, 2011 about the new office digs for the IT department of Switzerland's ATG, my post dated November 2, 2011 about the interior design of Twister's Restaurant that incorporates the look of tornados and rain in Kiev, Ukraine, and my post dated September 30, 2011 about Herman Miller's ergonomic "Envelop Desk."

Courtesy of an article dated August 30, 2013 appearing in Fast Company

WHAT GE'S INDUSTRIAL DESIGNERS THINK YOUR KITCHEN WILL LOOK LIKE IN 2025 TO SUIT DOMESTIC LIFESTYLES OF THE FUTURE

So what did they come up with, exactly?  A compendium of innovations that we've seen glimmers of in prior coverage on Co.Exist. (Click Image To Enlarge)

Smart refrigerators, faucets that detect bacteria on produce, and 3-D printed dishes are just some of GE's predictions for the kitchen of 2025. Don't pass them off as unrealistic: GE has been right before.

A typical product development cycle for corporate industrial designers lasts two to three years, which means today's designers are working on products that won't hit shelves until 2015 or 2016.

In GE's appliance unit, four teams of industrial designers were asked to dream up what kinds of products they might expect the company to release in 2025 to suit the domestic lifestyles of the near future. More conceptual than practical, the Home 2025 challenge invited designers at GE Appliance's home base in Louisville, Kentucky, to combine research on cultural and demographic trends--like an aging U.S. population, the decrease in demand for larger homes, and the increasing demand for fresh produce--as well as technological shifts to imagine how products should evolve to match a new American life. The results are both tangible and thoughtful.

"The kitchen is sort of disappearing," Lenzi says, at least in the sense of a territorially bounded space. "Now it's part of the overall environment. [...] Kitchen appliances need to become part of that overall connected system."  (Click Image To Enlarge)

While some critics have questioned the necessity of a Wi-Fi-equipped toaster, GE's project sheds some light on the motivations for why we'd even want to have interconnected kitchen systems. (Click Image To Enlarge)

Lou Lenzi, industrial design director for GE Appliances, explains. 

"Each group was assigned not just a living environment.  But we also asked the teams to break up and look at personas or do some scenario-planning."

Those scenarios include a house for empty-nesters, another for a young, tech-savvy couple, a third for young people living in an "emerging urban environment" like Detroit, and another for an adult taking care of an elderly parent.

As homes shrink, you can save space by finding appliances that do more than one thing, like an entertainment center that also has cooking capabilities, for example. (Click Image To Enlarge)

Or a refrigerator could be part of a system that takes inventory, suggests recipes based on what's about to go bad, curates shopping lists, and places orders for food delivery. (Click Image To Enlarge)

So what did they come up with, exactly? A compendium of innovations that we've seen  glimmers of in prior coverage on Co.Exist. While the teams focused on the whole home, their take on the kitchen was particularly interesting.

Lenzi says, at least in the sense of a territorially bounded space. 

"The kitchen is sort of disappearing.  Now it's part of the overall environment. [...] Kitchen appliances need to become part of that overall connected system."

That "system" is what you may have heard called the "Internet of things" (or the "industrial Internet" in GE-speak) by futurists and designers.

"You may set up a relationship with a local grocer or produce stand that would allow you to inventory-manage through the appliance," Lenzi explains (Click Image To Enlarge)

Deliveries would show up on demand and bring food directly into the home via an externally accessible fridge, so no one would need to be there to receive the order. Rinse produce in the sink, and the faucet's sensors would detect the presence of pernicious chemicals or bacteria. (Click Image To Enlarge)

While some critics have questioned the necessity of a Wi-Fi-equipped toaster, GE's project sheds some light on the motivations for why we'd even want to have interconnected kitchen systems. As homes shrink, you can save space by finding appliances that do more than one thing, like an entertainment center that also has cooking capabilities, for example. Or a refrigerator could be part of a system that takes inventory, suggests recipes based on what's about to go bad, curates shopping lists, and places orders for food delivery.

Other innovations focused on sustainability, like repurposing grey water from the dishwasher to circulate through other appliances, as well as educational apps to make home gardening easier. (Click Image To Enlarge)

GE is considering turning some of the 2-D renderings created for the project (and currently on display at the Cressman Center in downtown Louisville) into 3-D objects. (Click Image To Enlarge)

Lenzi explains. 

"You may set up a relationship with a local grocer or produce stand that would allow you to inventory-manage through the appliance."  

Deliveries would show up on demand and bring food directly into the home via an externally accessible fridge, so no one would need to be there to receive the order. Rinse produce in the sink, and the faucet's sensors would detect the presence of pernicious chemicals or bacteria. (No organic labels needed.)

Other innovations focused on sustainability, like repurposing grey water from the dishwasher to circulate through other appliances, as well as educational apps to make home gardening easier.

One particularly promising concept is for a technologically connected kitchen island. (Click Image To Enlarge)

Asked how much change is actually possible in a 12-year period, Lenzi replies that "in 2001, we did a kitchen-of-the-future project with Wired, and you saw the emergence of connectivity. And now we do have connectivity in our products." (Click Image To Enlarge)

Lenzi says.

"I think there's great value in this whole notion of personas and scenario-planning as we think about the future, and frankly speaking, I think this is just a great way to promote a dialogue about where we think the home is going on a larger scale."  

GE is considering turning some of the 2-D renderings created for the project (and currently on display at the Cressman Center in downtown Louisville) into 3-D objects. One particularly promising concept is for a technologically connected kitchen island.

Of course, we'll have to wait until at least 2025 to cook or clean with any of these appliances. Asked how much change is actually possible in a 12-year period, Lenzi replies that "in 2001, we did a kitchen-of-the-future project with Wired, and you saw the emergence of connectivity. And now we do have connectivity in our products."

More telling is a comparison between a similar project at GE in the 1960s. In a photograph, Arthur N. Becvar, the guy who had Lenzi's job 50 years ago, is sitting in his vision of the kitchen of the future. Appliances include an "electronic oven," "a frozen food locker," the "ice water and ice dispenser," and the "automatic plastic dishmaker." The first three--a toaster oven, freezer, and ice machine--are now standard in every kitchen. (Click Image To Enlarge)

A typical product development cycle for corporate industrial designers lasts two to three years, which means today's designers are working on products that won't hit shelves until 2015 or 2016. (Click Image To Enlarge) 

More telling is a comparison between a similar project at GE in the 1960s. In a photograph, Arthur N. Becvar, the guy who had Lenzi's job 50 years ago, is sitting in his vision of the kitchen of the future. Appliances include an "electronic oven," "a frozen food locker," the "ice water and ice dispenser," and the "automatic plastic dishmaker." The first three--a toaster oven, freezer, and ice machine--are now standard in every kitchen. The plastic dishmaker hasn't come around yet, but according to GE's designers, we'll finally get to make our dishes at home in 2025, using 3-D printer technology.

 
In GE's appliance unit, four teams of indsutrial designers were asked to dream up what kinds of products they might expect the company to release in 2025 to suit the domestic lifestyles of the near future. (Click Image To Enlarge)

 
More conceptual than practical, the Home 2025 challenge invited designers at GE Appliance's home base in Louisville, Kentucky, to imagine how products should evolve to match a new American life. The results are both tangible and thoughtful. (Click Image To Enlarge)

"Each group was assigned not just a living environment," explains Lou Lenzi, industrial design director for GE Appliances. "But we also asked the teams to break up and look at personas or do some scenario-planning." (Click Image To Enlarge) 

COMMENTARY:   The ideal kitchen "system" should incorporate smart technology, especially apps like a meal planner based on the specific needs and requirement of the consumer or household.  It should focus on a balanced diet and the nutritional needs of each consumer or members of the household.  Meals would be scheduled automatically throughout the week or month.   And the system would provide information about the fat, salt, calorie contents for each meal by serving size.    I also think that besides meal planning, the kitchen system of 2025 should include a meal budget, allowing consumers to establish food spending budgets.  The system would then plan the meals around that budget, insuring that spending is kept within those limits, but insuring optimal nutritial values for each meal.

Courtesy of an article dated August 26, 2013 appearing in Fast Company Exist

APPLE UNVEILS THE iPHONE 5S AND A LOW BUDGET iPHONE 5C IN FIVE COLORS, BUT STILL LACKS A LARGE DISPLAY PHONE

Apple CEO Tim Cook kicked off the iPhone 5S unveiling event in Cupertino on September 10, 2013 (Click Image To Enlarge)

On Tuesday, September 10, 2013, Apple unveiled its new flagship iPhone 5S and a new budget smartphone, the iPhone 5C, as it seeks to attract more customers and revitalize interest in its devices.

The launch comes as the Cupertino, Calif., company faces heightened competition. Apple has been losing market share to rivals, such as Samsung, with its position in the most recent quarter falling to its lowest level in three years.  As growth in the high-end smartphone market slows, Apple must find ways to attract new buyers, as well as expand into lower-priced phones.

 
Philip W. Schiller, senior vice president of worldwide marketing at Apple took over the microphone and talked about reatures of the new iPhone 5S and 5C at the unveiling event in Cupertino. (Click Image To Enlarge)

iPhone 5S

The iPhone 5S is Apple's newest flaghip smartphone.  According to Phil Schiller, Apple's Senior Vice-President of Worldwide Marketing,   

"The iPhone 5S the most forward-thinking phone we've ever created." 

A person holds the new iPhone 5S during an event at the Apple campus on Sept. 10 in Cupertino, Calif. (Click Image To Enlarge)

The iPhone 5S includes updated components, comes in three colors (white, black and gold), and includes a fingerprint recognition sensor to unlock the device and make purchases.  It will retail for $199 for 16GB, $299 for 32GB, or $399 for 64GB, all with a contract. 

Oh, and in the off chance that you're not a fan of cracked screens, Apple's also offering up proprietary cases that'll run you $49 a pop.

It's made of high-grade aluminum and comes in silver, gold, and "a new space gray."

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The iPhone 5S comes in three colors -- white, silver and gold (Click Image To Enlarge)

The iPhone 5S also sports a new A7 processor.  The A7 chip includes 64-bit capabilities, which brings the processing speed and capabilities of desktop personal computer microprocessors to the iPhone 5S.   The iPhone 5S is "up to twice as fast" as the previous-generation system and has twice the graphics performance as well.   There's OpenGL ES 3.0 on board, but the next-gen handset still promises, thankfully, to remain compatible with the 32-bit apps of yesteryear. 

Apple also incorporated a chip that it calls the M7. This is a "motion co-processor" that aggregates and monitors accelerometer, gyroscope, and compass data and offloads it from the A7.  That enables a new generation of health and fitness apps, such as a new Nike+ Move app. The app keeps track of what users do, tracks their Fuel points, and lets them compete with friends.

On the Surface

Battery life is on par with the iPhone 5. The 5S has 10 hours of 3G talk time, 10 hours of browsing over LTE cellular networks or Wi-Fi, 40 hours of music playing for all of your live Grateful Dead material, and 250 hours of standby. 

The iPhone 5 camera features a sensor that's 15 percent larger than the one on its predecessor as well as a five-element, Apple-designed lens with an f/2.2 aperture.  Also on board is autofocusing matrix metering, so you can leave the arty blurring to Instagram.  Even the flash is getting an upgrade this time out.  Apple's offering up "True Tone," which features 1,000 variations of color temperatures to help you get things like flesh tones just right. 

The fingerprint reader folks were predicting ahead of launch.  The iPhone 5S features a 170-micron-thick fingerprint recognition sensor with a 500 ppi resolution built into the Home button, dubbed Touch ID, that'll biometrically let you into the phone.  It's still a physical button that a user needs to push down, but there's a metal ring that senses the person's finger. It can be used to unlock the phone or purchase items from iTunes.    Oh, and if someone else wants to access your phone, you can also set the thing up to read multiple fingerprints. And before you ask, for extra security, all of that fingerprint information isn't stored directly to Apple's servers, because Apple apparently isn't in the market of collecting that info.

The Apple iPhone 5S now comes with finger print recognition for increased security and a more powerful A7 microprocessor that is twice as fast as its predecessor that will greatly improve digital images, music and video performance (Click Image To Enlarge)

The iPhone 5S is available for pre-order in three days.  It'll start hitting Apple stores on the 20th of September in the US, Australia, Canada, China, France, Germany, Japan, Singapore and the UK.  In December, that list will expand to include more than 100 countries. 

The iPhone 5 is going away, but the iPhone 4S will now be available for free with a two-year contract.

iPhone 5C

The iPhone 5C, which is made of plastic, starts at $99 for the 16GB version or $199 for 32GB with a two-year contact.

Preorders start Friday. The devices will be available in stores on September 20.

The new lower-priced Apple iPhone 5C front, back and side views. (Click Image To Enlarge)

Phil Schiller said during the event.

"The iPhone 5C is made with all the incredible technology that customers have loved with the iPhone 5, but there's more, too.  It has an incredible new design -- one that's more fun, and more colorful than anything we've made before."

The iPhone 5C has a polycarbonate wrap-around back.  It will come in five colors -- green, white, blue, red, and yellow. The screen wallpaper will match the exterior of the phone.  

The iPhone 5C has a polycarbonate wrap-around back that will come in five colors -- green, blue, yellow, red and white. (Click Images To Enlarge)

For the new iPhone 5C, Apple also designed $29 custom cases made of silicon with a microfiber lining.  The new custom cases come in six colors:  white, red, yellow, blue, green and black.  Add one of the six Apple‑designed cases to your iPhone 5c and it instantly goes from colorfully cool to impossible to ignore. The case design allows the color underneath to show through, creating 30 fun possibilities. So the iPhone 5c Case does more than just protect your phone — it helps it stand out. And it helps you make it yours.

The new iPhone C custom cases come in six colors:  white, red, yellow, blue, green and black. (Click Images To Enlarge) 

The iPhone 5C will sport a 4-inch retina display, like the iPhone 5, as well as an A6 chip inside with "blazing-fast performance."   The battery is larger than in the iPhone 5, and it includes an 8MP iSight camera, with the five-element lens and IR filter as seen on the 5.

The iPhone 5c also comes with a new Camera app that raises your photography game.  Now you can shoot images in a square format.  And choose from eight live filters than can be applied before or after you take your photo. Use the Instant filter to give a group shot at the beach a vintage color look. Make a sunset even more vivid with the Chrome filter. Or choose Noir to capture a self-portrait in dramatic black and white.

The iPhone 5c also comes with a new Camera app that raises your photography game. (Click Image To Enlarge)

Now when you record video in 1080p HD, the new 3x zoom feature lets you get in tighter on your subject. Video image stabilization helps smooth out shaky footage from your high‑adrenaline moments. (Running of the Bulls, anyone?) Face detection for up to 10 faces makes sure nobody gets lost in the crowd. And the ability to take still photos while recording video comes in handy when you want to tell that story within a story.

The iPhone 5C camera includes video image stabilization to help smooth out shaky footage. (Click Image To Enlarge)

iPhone 5c comes with a new FaceTime HD camera. Larger pixels and an improved backside illumination sensor give it increased sensitivity in low light — great for, say, letting your friend back on the East Coast experience a West Coast sunset with you. You can also make audio‑only FaceTime calls with clearer sound than even wideband audio. 

The new Phone 5c comes with a new FaceTime HD camera. (Click Image To Enlarge)

The iPhone 5C also represents Apple's chance to broaden its market. While its smartphones are popular around the world, the majority of people in places like China can't afford $800 phones. The company plans to host an event in China later this week, where it is believed that Apple will announce a partnership with China Mobile, the world's biggest carrier.

Upgraded iOS 7 

Both the iPhone 5S and 5C come loaded with the latest version of iOS 7.  Apple CEO Tim Cook calls the latest iOS 7

"The biggest change to iOS since the introduction of iPhone."  

The newer iOS7 incorporates a "flatter" user interface and esthetics that provide a whole new user experience and does away with 3d icons, bevels, shadows, and rounded corners, and makes some operatons automatic and behind the scenes.  Checkout the video:

 

But, there is good news for owners of older iPhones.  On September 18, you'll be able to download the latest version, iOS 7 onto your older iPhone (models dating back to the iPhone 4), iPad (version 2 or later), iPad Mini or iPod touch (fifth generation). Here's a look at ten key new features.

1. Control Center: Swipe up from any screen to immediately jump into system settings such as Bluetooth and Wi-Fi, as well as brightness controls, a flashlight, calculator and other utilities.
2. Camera app: When the camera app is open, beyond stills or video, you'll get two other labeled options: shooting the photo as a square picture or a panorama. You can also edit photos with Instagram-like filters.
3. Photo app: Apple is bringing organization to hundreds of photos, using the camera information about where and when they were shot to organize them into "Moments," "Collections" and "Years."
4. Find My iPhone lock: A new "activation lock" feature requires your Apple ID and password before you can turn off Find My iPhone, further thwarting thieves.
5. AirDrop: The new feature is Apple's answer to Samsung's Galaxy S line of phones, which let other Galaxy users share photos and other files by clicking the phones together. AirDrop lets other iOS users send items directly to each other, without opening up a text message or e-mail to do so. A slightly different version of the AirDrop feature has already been available on Apple's latest Mac computers.
6. Multi-tasking: Apple has improved multi-tasking. By pressing the home button twice, you can see preview screens of all your running apps and swipe to move from one to another. By swiping up you can delete an app.
7. Background updates: The new iOS will update apps automatically in the background and does so when you're plugged into Wi-Fi. The idea is that fetching such updates won't kill your battery.
8. iTunes radio: Apple's answer to Pandora will be available on computers and mobile devices when it arrives with the new operating system on Sept. 18. The program brings in pre-programmed radio stations to iTunes, and will let listeners create stations based on their favorite artists.
9. Safari: Apple's new look for the Safari browser will let you see more of your content and includes full-screen browsing. There's also a "smart search" field that unifies separate search and address fields into one, and a cool new tab view for scrolling from one page to another.
10. Siri: You'll find new male and female voices in Siri. Also new: Twitter search integration, which lets you ask Siri what people are chatting about on Twitter. Siri also now taps Wikipedia as a resource as well as Bing search.
11. Design: Not to be underestimated is the overall look and feel of the operating system. With freshly designed fonts, icons and animations — a flash of lightning, say, in the weather app — you may feel like you have a new phone without actually buying the latest hardware.

COMMENTARY:    CEO Tim Cook is stuck in a no-win situation. On Tuesday, he was master of ceremonies of the unveiling of the new iPhone 5S and budget-priced iPhone 5C that seemed to please no one. 

The unveiling event was short on surprises, and the new iPhone's played it safe for the most-watched company in the world.

Cook was criticized for pricing Apple's new cheaper iPhone 5C too high. By making the 5C a midrange product instead of a low-end smartphone, he protected the company's profit margins — and left a large swath of the market open to rivals selling inexpensive Google (GOOG) Android-based smartphones.

His decision on pricing also preserved Apple's reputation as a premium, aspirational brand. But Cook sacrificed the opportunity to increase Apple's smartphone market share and boost unit sales and revenue in order to maintain the company's business model and image.

On selling a cheap iPhone, Cook is damned if he does and damned if he doesn't. And Apple stock was down nearly 6% in midday trading in the stock market Wednesday.

As for the lack of surprises at the product launch, Apple is battling media leaks from supplier partners and lofty expectations set by its history of groundbreaking products under the late, great Steve Jobs.

Even when it did announce something unexpected on Tuesday, the media mostly shrugged, failing to see the significance.

Tech bloggers had photos weeks in advance of the iPhone 5S fingerprint sensor, dual-LED camera flash, the gold model 5S, and the colored plastic cases of the iPhone 5C, but they didn't predict everything. Those surprises, mostly overlooked Tuesday, concerned the details of advanced components and software in the new phones.

• New A7 64-bit microprocessor chip that promises to deliver processing speeds twice as fast as its predecessor chip.
• New M7 motion co-processor that gathers data from the accelerometer, gyroscope and compass to offload work from the A7 for improved power efficiency. 
• Free productivity apps available on both the iPhone 5S and 5C including Pages, Numbers and Keynote, which previously cost users $9.99 and let users create, edit and share documents, spreadsheets and presentations, and iPhoto and iMovie, which previously cost users $4.99 for editing snapshots and videos.

Making Pages, Numbers and Keynote available for free could make the handsets even more popular with professionals. Those software products compete with offerings from Microsoft (MSFT) and Google.

The pressure on Apple's CEO is likely to intensify in the months ahead. Cook has promised "amazing" products to be rolled out through 2014 and he had better deliver. Whether those include the rumored iTV television and iWatch smartwatch remains to be seen.

Apple Makes Huge Mistake Not Introducing A Big Display Phone

In my opinion, Apple lost out on another huge money-making opportunity -- launching an iPhone with a big display to match that of Samsung's Galaxy S4 (5-inch) and Galaxy Note 2 (5.5-inch).  Samsung will also be unveiling a newer Galaxy Note 3 (5.5 inch) within the month.  As you already know, the S4 (and S3 before) has run away with the market for large display smartphones.  Since the S4 was introduced in May, Samsung has sold over 10 million   

During a press event at IFA on September 9, 2013, J. K. Shin, President of Samsung mobile communications, revealed some interesting sales figures for the Galaxy Note and Galaxy Note 2.   According to Shin, Samsung has sold over 38 million Galaxy Note devices over the past two years.

That is a very healthy number and raises the question yet again about large screen smartphones (5 inches and over) verses smaller screen smartphones (4 to 5 inches). Apple has rigidly stuck to the smaller end, but iPhone fans seem happy with Apple’s choices since the iPhone continues to sell well.  However Samsung has taken a different approach in that it offers phones with a variety of screen sizes including the popular Galaxy S3 (4.8 inches) and the Galaxy S4 (5 inches). If Samsung, HTC, LG and others are able to sell millions of phones with 4 to 5 inch displays plus the very same companies are able to sell millions of units featuring even larger displays then it is clear that consumers cherish the choice and that larger screen phones are not just an odd statistical blip.

Shin didn’t elaborate any further or breakdown the number per year or per device, but he did add that Samsung expects to sell at least 10 million Galaxy Note 3 phones. The 10 million figure is probably low, or maybe only a short term prediction, as both the Note and Note 2 sold in greater quantities.

The Samsung Galaxy Note 3 will go on sale internationally from September 25 except for in the U.S. and Japan where it will be released during October.

Large display phones, also referred to as "phablets," because they resemble a hybrid between a phone and tablet, out sold tablets and laptops combined during Q2 2013, but Apple got exactly zero of those sales.  According to several mobile technology analysts, iPhone owners are crying for an iPhone with a larger display.  Having said this, you have to question why Apple CEO Tim Cook never considered producing the iPhone 5S with a 5-inch display as a defensive strategy. There is no longer any doubt that there is a demand for large display phones.  If an iPhone phablet is in the works, why put it off when the market for them is boiling hot?  

Apple made a similar mistake with the iPad, when Steve Jobs called 7-in tablets like the Amazon Kindle Fire and Samsung Galaxy Tab as "dead on arrival."   Well, surprise, surprise, Amazon sold 10 million 7-inch Kind;e Fire tablets over the next 12 months from it launch.  Apple finally realized this mistake, and introduced the 7.9 inch iPad Mini in 2012.  But, that was a rush job, the iPad Mini is under-powered and has an inferior display.  I thought about buying a 9 or 10-inch tablet, and was even leaning towards an iPad, but after seeing and reading the reviews of Google's Nexus 7 2nd generation 7-inch tablet in early August,  I bought one.  Now I am leaning towards a 5-inch phone.     

iPhone 5C and 5S Specifications

For those readers interested in the iPhone 5C and 5S technical specifications, check this out.

Click Image To Enlarge

For more detailed iPhone 5S and 5C technical specifications refer to GDGT1 and GDGT2.  

Courtesy of an article dated September 10, 2013 appearing in C|NET, an article dated September 10, 2013 appearing in Engadget, an article dated September 11, 2013 appearing in USA Today, an article dated September 9, 2013 appearing in Android Authority, an article dated September 9, 2013 appearing in Forbes, and an article dated September 11, 2013 appearing in Investors.com

AS MORE AMERICANS RAISE CONCERNS OVER PRIVACY AND SECRET NSA SURVEILLANCES, STEALTH WEAR BEGINS TO TAKE OFF

The OFF Pocket claims to block all signals so that a cell phone can't be tracked. (Click Image To Enlarge) 

ARTISTS BEHIND A LINE OF ANTI-DRONE STEALTH WEAR ARE OPENING FOR BUSINESS.

Artist Adam Harvey has been working with the idea of anti-surveillance for years, creating, for instance, a handbag that thwarts paparazzi with a flash of its own, a series of portraits that fool face-recognition technologies with blocks of makeup and obtrusive hairstyles, and a line of “stealth wear” designed to camouflage its wearers from drones.

A handbag that thwarts paparazzi with a flash of its own.  When triggered by a flashing camera, the anti-paparazzi clutch sets off a photo-ruining flash of its own. (Click Image To Enlarge)

The anti-drone scarf will be sold with other projects in Harvey's online store. (Click Image To Enlarge)

In a project called 'CV Dazzle,' Harvey used makeup and hairstyles to confuse face-recognition technology. (Click Image To Enlarge)

But only recently did his projects begin to seem as marketable as they are provocative.

His latest invention, a collaboration with performance wear designer Johanna Bloomfield called “OFF pocket,” is an envelope for cell phones that supposedly blocks all cellular, Wi-Fi, and GPS signals. More than 650 Kickstarter backers have contributed $56,447 to see it be manufactured en mass.

 

The project may not have generated as much interest before the NSA’s mass electronic surveillance program was revealed to the public earlier this year.  Harvey says.

“In the first few years after 9-11, talking about privacy was nearly taboo.  Its relevancy was buried in jingoism. Now, privacy is the topic du jour at cafés. Having double identities brings you cache. And a modest amount of paranoia is considered healthy.”

In the wake of OFF Pocket’s success, Harvey is planning to launch an online store called PRCVM (short for “privacy mode”) on December 1. The store will sell the OFF Pocket and other items created for a collaboration with the New Museum store called “the Privacy gift shop.” Some other products from that collection include an “I Love New York” T-shirt that can’t be read by machines ($40), a copper wallet insert that blocks credit cards from RFID scanners ($25), and an anti-Drone scarf ($450).

Harvey says of the camouflage scarf,  "I see it more as a tuxedo--which I don’t wear either, very often--but it’s a piece that could be worn if you ever needed to wear it.  And it’s available." (Click Image To Enlarge)

The anti-drone scarf demonstrates its camouflaging properties that make the wearer virtually invisible to drones (Click Image To Enlarge)

Many of these projects started without commercial intentions. Before developing the OFF Pocket, for instance, Harvey modified a pair of his own pants with a signalproof pocket and wore them around. The interest those privacy pants generated led him to look at the idea from a product design perspective. Other products, like the anti-drone scarf, remain more art than product. That project's website explains.

"Conceptually, these garments align themselves with the rationale behind the traditional hijab and burqa: to act as 'the veil which separates man or the world from God,' replacing God with drone."  

The point of selling the scarf, Harvey says, is partly to raise awareness about privacy issues so that other designers, artists and thinkers can approach them another way.

Harvey's line of anti-drone war masks the wearer's thermal imprint by reflecting heat. (Click Image To Enlarge)

"Conceptually, these garments align themselves with the rationale behind the traditional hijab and burqa: to act as the 'veil which separates man or the world from God,' replacing God with drone," that projects website says. (Click Image To Enlarge)

The anti-drone burqa demonstrates its camouflaging properties which make the wearer virtually invisible to drones. (Click Image To Enlarge) 

One already has--but with a very different philosophy. Called HyperStealth Biotechnology Corp, the company makes a fabric it claims can make soldiers completely invisible.  It is careful to not sell its full-fledged stealth wear to civilians.  Its designer told The Guardian,

"The only people who really don't need to be seen are the ones who are doing something wrong out there."

Harvey, on the other hand, sees his product as a way to explore offsetting military technologies like drones as they inevitably enter everyday life.   He says.  

“I see it more as a tuxedo--which I don’t wear either, very often--but it’s a piece that could be worn if you ever needed to wear it.  And it’s available.”

COMMENTARY:   I totally agree with Adam Harvey that these camouflaging products must not be sold to criminals, jihadists and terrorists.  If you ask me, this is a no-brainer.   These stealth and camouflaging technologies definitely have uses within the U.S. military fighting forces, especially special forces like the U.S. Army Rangers and U.S. Navy Seals, and regular Americans concerned over secret surveillances by our government.  

With celebrities and public figures seeking privacy from the paparazzi PCRVM camouflaging apparel and accessories are going to be very popular.  And with more Americans concerned that the NSA is conducting secret surveillance of U.S. citizens by tracking their cell phones without regard to their civil rights, under the so-called "authority" of the Patriot Act, the OFF Pocket definitely could fill a real need in the marketplace.

It is absolutely incredible that private citizens now find it necessary to fight back against the unobstructed and illegal surveillance activities of their own government.  What kind of country do we live in?  Why is President Obama defending the activities of the NSA?  We are most definitely not "the land of the free" and a country with "liberty and justice for all."     

Courtesy of an article dated September 4, 2013 appearing in Fast Company

AN UNABASHED ANALYSIS AND CRITIQUE OF MICROSOFT'S $7.2 BIL ACQUISITION OF NOKIA'S DEVICES & SERVICES BUSINESS

Nokia CEO Stephen Elop and Microsoft CEO Steve Ballmer announce the acquisition of Nokia's Devices & Services unit, license patents and mapping software on Monday, September 2, 2013 (Click Image To Enlarge)

Microsoft announced on Monday, September 2, 2013, that it will buy most of Nokia’s Devices and Services business unit for €3.79 billion ($5 billion) and will spend a further €1.65 billion ($2.2 billion) to license Nokia’s patents — making a total cost of €5.44 billion ($7.2 billion) which will be paid out in cash.  The transaction is expected to close in the first quarter of 2014.

After the transaction goes through, several Nokia executives will transfer to Microsoft, including Nokia CEO Stephen Elop, Jo Harlow, Juha Putkiranta, Timo Toikkanen, and Chris Weber. In total, about 32,000 employees are expected to transfer from Nokia to Microsoft.

Click Image To Enlarge

This means that Elop will be stepping down as Nokia CEO.  Nokia announced in a statement  that Risto Siilasmaa will assume an interim CEO role for Nokia, while Stephen Elop will take on the role of Executive Vice President, Devices & Services.  

In an email to employees, Microsoft CEO Steve Ballmer says that Elop will head to Microsoft to lead an expanded Devices team, “which includes all of our current Devices and Studios work and most of the teams coming over from Nokia”.

Microsoft notes that purchasing Nokia’s devices and services business, as well as its patents, is key to “furthering the company’s transition to a devices and services company”. It will build on the partnership with Nokia announced in February 2011 that saw a series of Nokia’s Lumia smartphones being released.

With this move, Microsoft says it aims to accelerate the growth of its move into mobile devices via faster innovation, increased synergies, and unified branding and marketing. Microsoft CEO Steve Ballmer says:

"Bringing these great teams together will accelerate Microsoft’s share and profits in phones, and strengthen the overall opportunities for both Microsoft and our partners across our entire family of devices and services… In addition to their innovation and strength in phones at all price points, Nokia brings proven capability and talent in critical areas such as hardware design and engineering, supply chain and manufacturing management, and hardware sales, marketing and distribution."

In it statement, Nokia says it plans to focus on three of its other businesses: network infrastructure and services, mapping and location services, as well as technology development.

Nokia interim CEO Risto Siilasmaa, also the Chairman of the Nokia Board of Directors, says:

"After a thorough assessment of how to maximize shareholder value, including consideration of a variety of alternatives, we believe this transaction is the best path forward for Nokia and its shareholders."

Microsoft’s move to purchase Nokia’s devices and services business is a smart one, considering that Nokia has been one of its most loyal partners to date (and this could probably explain the rumor that Nokia is making a Windows RT tablet).

It has been nearly three years since the first version of the Windows Phone arrived in the smartphone market and Microsoft is keen to see it gain traction faster to become a worthy competitor to iOS and Android globally. The only way to drive this forward earnestly would be to take over Nokia’s devices business and integrate it even closer with the company.

Its move also marks Microsoft’s commitment and ambition toward making it big in the mobile market. Could this possibly render the Windows Phone a threat to the dominant operating systems now (especially after positive news yesterday from Kantar that said the Windows Phone has picked up pace across five major European markets)?

COMMENTARY:  Microsoft's outlined its reasoning behind why it's gone deep into smartphones in a lengthy presentation file.  Alongside cheering Windows Phone's current growth (No.3!) to third place behind Android and iOS phones according to Strategy Analytics, it's reaffirmed that it'll bring its products and services to rival mobile OSes, still involving itself with "iPhone and Android/Galaxy phones."

Click Image To Enlarge

However, it tempers this point, adding.

"We can't risk having Google or Apple foreclose app innovation, integration, distribution or economics."

Given the strength of the top two, Microsoft is telling it straight, adding that it needs a "first-rate Microsoft phone experience for users" to compete, suggesting that its portfolio of devices isn't quite there yet.

The slides also outline the purchase of Nokia's patent collection, one which Microsoft believes is one of the most valuable in the tech sector. MS also thinks that the acquisition will speed up innovation within Windows Phone and protect its future. So, some high hopes for the purchase.

The Nokia Acquisition

In order to get an understanding of what Microsoft acquired for that $7.2 billion, it is important to review Nokia's financial performance, existing business operating units, partnership with Microsoft, overview of Nokia's Devices & Services business unit, Nokia's Devices & Services financial performance, competitive environment and effect on mobile phone volume sales and market shares and other issues.

Microsoft Partnership

In 2012 Nokia's Devices & Services business continued to be in transition, following the announcement of a partnership with Microsoft in February 2011 where Nokia adopted Windows Phone as its primary smartphone operating system platform and phased out the Symbian smartphone operating system platform.  The partnership, under which Nokia adopted and are licensing Windows Phone from Microsoft as our primary smartphone platform, was formalized in April 2011.

Nokia continued to sell Symbian devices during 2012, with decreasing volumes every quarter due to the deteriorating competitiveness of Symbian devices.   Nokia does not expect to sell any significant volumes of Symbian devices in 2013.   At the same time, during 2012, Nokia built
out its Windows Phone 7 portfolio and considerably broadened the geographical reach from the initial launch in six Western European countries.  Towards the end of 2012 Nokia introduced mobile devices based on the new Windows Phone 8 operating system.  

Nokia launched the Nokia Lumia 920 and Nokia Lumia 820, its first smartphones based on the Windows Phone 8 platform, in September 2012 which started shipping to customers in select markets in November 2012.   The Nokia 620, an affordable Windows Phone 8 device, was launched in December 2012 and became available in select markets in January 2013.

Nokia Mobile Phone Sales Continue To Deterioriate in 2013

According to Gartner Research, a marketing research firm that tracks sales of mobile devices, Nokia continues to experience major deteroriation in volume sales of mobile phones (smartphones and feature phones) and continues to loose market share to competitors during Q1 and Q2 2013 (See Below).

Q1 2013

Worldwide Mobile Phone Sales to End Users by Vendor - Units Sold and Market Shares - Q1 2013 vs Q1 2012 - Gartner - May 2013 (Click Image To Enlarge)

Q2 2013

Worldwide Mobile Phone Sales to End Users by Vendor - Units Sold and Market Shares - Q2 2013 vs Q2 2012 - Gartner - August 2013 (Click Image To Enlarge)

Nokia Business Operating Units

At the end of December 31, 2012, Nokia operated three business operating units:

• Devices & Services - Includes smart devices (smartphones) and mobile phones (feature phones).  The smart devices segment includes both Nokia's native Sybian OS smartphones and smartphones developed for Microsoft that utilize the Windows Phone 7 and 8 OS platforms.   This is the piece that was sold to Microsoft.
• HERE  - The HERE business, which formerly operated under the name Location & Commerce during 2012, develops a broad range of location-based (GPS) products and services for consumers, as well as content and platform services for device manufacturers, automobile manufacturers, application developers, Internet services providers, merchants and advertisers. 
• Nokia Siemens Networks - Nokia Siemens Networks is a leading global provider of telecommunications infrastructure, with a focus on the mobile broadband market. Inits target market, Nokia Siemens Networks believes it is the second largest company worldwide, by revenue. It has a strong position in the newer infrastructure technologies of 3G and 4G (LTE). In 3G, Nokia Siemens Networks is the industry leader by customers served. More than a billion subscribers connect through Nokia Siemens Networks’ 3G networks. In LTE, Nokia Siemens Networks had 77 commercial contracts at the end of 2012. The company is the number one provider of subscriber database management, an essential tool in effective network operations.

Devices & Services Operating and Reporting Segments

Nokia's Devices & Services business unit includes two operating and reporting segments;

• Smart Devices - Focuses on Nokia's most advanced Smartphones, including Lumia smartphones, and Mobile Phones, which focuses on more affordable feature mobile phones, including Asha full touch smartphones.   
• Devices & Services Other - Includes intellectual property income, net sales of spare parts and related cost of sales and operating expenses and common research and development expenses. 

Devices & Services is responsible for developing and managing Nokia's portfolio of mobile products, which are manufactured for all major consumer segments, as well as designing and developing services, including applications and content, that enrich the experience people have with their mobile devices.  Currently, is addressing all key geographical markets except Japan. Devices & Services also manages Nokia's supply chain, sales channels, brand and marketing activities and explores corporate strategic and future growth opportunities for Nokia.

In 2012, the worldwide industry mobile device volumes increased by 2% year-on-year while the market value in US dollar terms increased by 12%, according to Strategy Analytics. Smartphones continued to show strong volume and value growth, as well as continued to capture the public focus in the mobile products market. According to Strategy Analytics, Nokia’s mobile device volume market share was 21% in 2012, compared to 27% in 2011, with the decline primarily driven by market share losses in the smartphones segment. In 2013, Strategy Analytics forecast that the worldwide industry mobile device volumes will increase by 6% and the market value in US dollar terms by 7%.

Nokia Corporation Results of Operations

The following is Nokia Corporation's Results of Operations for the years ending December 31, 2012 and 2011.

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Nokia Corporation Consolidated Statements of Financial Position

The following is Nokia Corporation's Consolidated Statements of Financial Position for the years ending December 31, 2012 and 2011.

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Nokia Corporation Segment Assets and Liabilities

The following is Nokia Corporation's Segment Assets and Liabilities for the years ending December 31, 2012 and 2011.

Year 2012

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Year 2011

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Devices & Services Segment Financial Results

Year 2012

Nokia reported the following financial results for the Devices & Services division for the year ending December 31, 2012 versus December 31, 2011. 

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Year 2011

Nokia reported the following financial results for the Devices & Services division for the year ending December 31, 2011 versus December 31, 2010. 

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Devices & Services Financial Results - Year 2013

Q1 2013

Nokia reported the following financial results for the Devices & Services division for the Quarter ending March 31, 2013 versus March 31, 2012. 

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Q2 2013

Nokia reported the following financial results for the Devices & Services division for the Quarter ending June 30, 2013 versus June 30, 2012. 

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Devices & Services Net Sales By Geographic Area

The following table sets forth our Devices & Services net sales and year-on-year growth rate by geographic area for the fiscal years 2012 and 2011. The IPR income referred to in the paragraph below has been allocated to the geographic area contained in this chart.

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The 34% year-on-year decline in Devices & Services net sales in 2012 resulted from lower volumes in both Smart Devices and Mobile Phones as well as a lower Average Selling Price (ASP) in Mobile Phones, partially offset by a higher ASP in Smart Devices. Devices & Services Other net sales decreased in 2012 due to lower non-recurring IPR income, the divestment of Vertu during the fourth quarter 2012 and lower spare parts sales.

Unit Volume

Year 2012

The following chart sets out the mobile device volumes for Nokia's Devices & Services division and year-on-year growth rates by geographic area for the fiscal years 2012 and 2011.

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On a year-on-year basis, the decline in our total Devices & Services volumes in 2012 was driven by lower volumes in both Smartphones and Mobile Phones (Feature Phones) discussed below.

Year 2011

The following chart sets out the mobile device volumes for Nokia's Devices & Services division and year-on-year growth rates by geographic area for the fiscal years 2012 and 2011.

Click Image To Enlarge

On a year-on-year basis, the decline in our total Devices & Services volumes in 2011 was driven by lower volumes in both Smartphones and Mobile Phones (Feature Phones) discussed below.

Average Selling Price (ASP)

Year 2012

Nokia's total mobile device Average Selling Price (ASP), including IPR income, in 2012 was EUR 47, down 18% from EUR 57 in 2011.  The decrease in Nokia's mobile device ASP in 2012 was due to a higher proportion of Mobile Phones volumes and lower Mobile Phones ASPs, partially offset by higher Smartphone ASPs.   Nokia's total mobile device ASP, excluding IPR income, in 2012 was EUR 45, down 18% from EUR 55 in 2011.

Year 2011

Nokia's total mobile device Average Selling Price (ASP), including IPR income, in 2011 was EUR 57, down 11% from EUR 64 in 2010. The decrease in Nokia's mobile device ASP in 2011 was driven primarily by the increase in the proportion of Mobile Phone sales partially offset by the positive effect of higher IPR income and the lower deferral of revenue related to services sold in combination with our devices. On a year-on-year basis, the impact from the appreciation of the euro against certain currencies had a slightly negative impact, almost entirely offset by the positive impact from foreign currency hedging. Our total mobile device ASP, excluding IPR income, in 2011 was EUR 55, down 14% from EUR 64 in 2010.

Gross Margins

Year 2012

Nokia's Devices & Services gross margin in 2012 was 21.3%, compared to 27.7% in 2011.  On a year-on-year basis, the decline in Nokia's Devices & Services gross margin in 2012 was due to gross margin declines in Smartphones and to a lesser degree in Mobile Phones (Feature Phones) and Devices & Services Other.

Year 2011

Nokia's Devices & Services gross margin in 2011 was 27.7%, compared to 29.9% in 2010. On a year-on-year basis, the decline in Nokia's Devices & Services gross margin in 2011 was driven primarily by gross margin declines in both Smartphones and, to a lesser extent, in
Mobile Phones, as discussed below, which was partially offset by higher IPR income.

Operating Expenses

Year 2012

Devices & Services operating expenses decreased 20% year-on-year in 2012.   On a year-on-year basis, operating expenses related to Smartphones decreased 32% in 2012, where Mobile Phones (Feature Phones) remained approximately on the same level.   In addition to the factors described
below, the year-on-year changes were affected by the proportionate allocation of operating expenses being affected by the relative mix of sales and gross profit performance between Mobile Phones and Smartphones.   This resulted in higher and lower relative allocations to Mobile
Phones and Smartphones, respectively.

• Research & Development Expenses - Devices & Services research and development expenses decreased 24% year-on-year in 2012 due to declines in Smartphones and Devices & Services Other research and development expenses. The decreases in research and development expenses were due primarily to a focus on priority projects and cost controls as well as business divestments.
• Sales and Marketing Expenses - Devices & Services sales and marketing expenses decreased 15% year-on-year in 2012 primarily due to lower overall business activity, improved efficiency in general marketing activities and business divestments.
• Administrative and General Expenses - Devices & Services administrative and general expenses decreased 19% year-on-year in 2012, primarily due structural cost savings as well  as business divestments.
• Other Income and Expense - In 2012, Devices & Services other income and expense had a negative year-on-year impact on profitability.   In 2012, Nokia recognized special items of net EUR 393 million in Devices and Services Other, comprised of restructuring charges of EUR 550 million and related impairments of EUR 30 million, a benefit from cartel claim settlements of EUR 56 million, a net gain from the sale of a real estate of EUR 79 million and a net gain from the divestment of the Vertu business of EUR 52 million. In 2011, we recognized special items of net EUR 287 million in Devices and Services Other, comprised of restructuring charges of EUR 456 million, impairment of assets of EUR 90 million, Accenture deal consideration of EUR 251 million, impairment of shares in an associated company of EUR 41 million and a benefit from a cartel claim settlement of EUR 49 million.

Year 2011

Nokia's Devices & Services operating expenses decreased overall by 20% year-on-year basis in 2011.  Expenses related to Research & Development decreased by 9% year-on-year between 2011 and 2010.  Most of the decreases was in lower smartphone-related R&D expenses, which offset higher mobile phone (feature phones) R&D expenses.  Sales and marketing expenses decreased by 4% year-on-year between 2011 and 2010.  Administrative and general expenses decreased by 7% year-on-year between 2011 and 2010.   Nokia incurred other expenses of EUR 773 million in the year 2011, as opposed to other income of EUR 170 million in 2010.  This meant that other income and expenses increased by  EUR 943 million between 2011 and 2010.  Most of the increase in other expenses had to do with the writedown of non-operating assets in 2011.      

Operating Margins

Devices & Services reported an operating loss of EUR 1.1 billion in 2012, compared with an operating profit of EUR 884 million in 2011.  Devices & Services operating margin in 2012 was negative 7.0%, compared with positive 3.7% in 2011.   The year-on-year decrease in operating margin in 2012 was driven primarily by the lower net sales and gross margin compared to 2011 in both Smartphones and Mobile Phones (Feature Phones).   The net sales, unit volume, average selling prices and gross margins for Smartphones and Mobile Phones (Feature Phones) for the years 2012 and 2011 are compare below.

Smartphones

The following table sets forth selective line items for Smartphones for the fiscal years 2012 and 2011.

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The declines in Smartphone net sales, unit volume and average selling prices was driven by the strong momentum of competing smartphone platforms relative to Nokia's Symbian devices.  On a geographical basis, the decrease in volumes was due to lower volumes in Greater China, Europe, Asia Pacific, Middle East & Africa and Latin America, partially offset by slightly higher volumes in North America.

Mobile Phones (Feature Phones)

The following table sets forth selective line items for Mobile Phones for the fiscal years 2012 and 2011.

Click Image To Enlarge

The declines in Mobile Phones (Feature Phones) net sales, unit volume an average selling prices was due to the challenging competitive environment and market environment, which negatively affected Nokia volumes across the Mobile Phones portfolio.   In particular, low-end smartphones powered by the Android operating system proliferated at lower price points throughout 2012.   During the second half of 2012, Mobile Phones started shipping Asha full touch smartphones, which improved the competitiveness of Nokia's higher end Mobile Phones product portfolio.  During the second half of 2012, Mobile Phones shipped 15.8 million Asha full touch smartphones.

Conclusions

As you can readily see, Nokia is experiencing intense competition in both Smarphones and Mobile Phones (Feature Phones) in all major geographic markets and by every measurement metric.  The result are significant declines in market share, net sales, unit volume, average selling prices, gross margins and net profits since the start of 2010.  Competing iOS and Android smartphones are the principal culprit. Microsoft will have to find a way to stop the hemorraging in order to prevent the acquisition of Nokia's Devices & Services units from becoming a major boondaggle.

Microsoft clearly overpaid Nokia in order to acquire the Devices & Services business unit and related patents and copyrights.  If you use Nokia Corporation's Segment Assets and Liabilities as of December 31, 2013 as a benchmark for valuation purposes, the Devices & Services business unit had a negative net book value of EUR 800 million (Liabilities of EUR 7.173 billion less Assets of EUR 6.373 billion).  Microsoft paid EUR 5.44 billion or $7.2 billion for Devices & Services and related patents and copyrights.  That's an over payment of EUR 6.24 billion or $8.25 billion.  Microsoft is probably treating this as a "cost of market entry" for becoming a player in the highly competitive cellular device market.  

I won't second guess Steve Ballmer's decision to acquire Nokia's Devices & Services business unit and related intellectual property, but it might actually be cheaper than developing a mobile device brand on your own.   The acquisition brings Nokia's Devices & Services management team and Nokia's former CEO into the Microsoft family.  That's a huge plus, but is this enough to make Microsoft Windows Phone's competitive in the marketplace.          

Acquiring a competitor outright or a competitor's assets to enter a hot or emerging market is not a new strategy, but more often than not, they are money losing propositions or under-performers for the acquirer.  

Truth be known, Microsoft has made numerous acquisitions, and with very few exceptions nearly all of them have failed or underperformed.  

• aQuantitative - Acquired in 2007 for its digital advertising technology for $6 billion to match Google's acquisition of DoubleClick.  The integration with Microsoft failed miserably and aQuantitative CEO and other key executives quit.  Microsoft has used some of aQuantive's technology in its own ad platforms, but a lot of it was discarded, and Microsoft sold Avenue A for $530 million to ad conglomerate WPP in 2009.
• Navision - Microsoft bought this Danish accounting and business management software company for $1.45 billion in cash and stock in 2002 to round out its Microsoft Business Solutions portfolio -- Navision was stronger in Europe while Great Plains (acquired in 2001) was stronger in North America. Of all the products gained in those two acquisitions, the Axapta software suite from Navision is probably the most successful, but the overall business unit never quite lived up to early expectations.
• Danger - Microsoft bought Danger for a rumored price of $500 million in early 2008 to help boost its mobile strategy. But the acquisition was botched by internal infighting -- while the Danger team was put to work on what eventually became the Kin phone, a separate group was building Windows Phone 7. The Kin launched late and with fewer features than specified, and was can celled less than two months later.
• WebTV  - When the Internet first became popular, Microsoft -- like a lot of folks -- thought that people would want to surf from their TV. To make sure it had an offering, Microsoft bought WebTV for $425 million in cash and stock in 1997. The product sold poorly, however, and a rebrand as MSN TV didn't help. Microsoft finally stopped selling MSN TV a couple years ago, and is focusing its living room strategy on the much more successful Xbox.
• Hotmail - Microsoft bought one of the first Web-based e-mail providers, privately held HoTMaiL (the capitals spell out HTML, get it?) in 1998 for a rumored price between $400 and $500 million. Hotmail is still around, but rebranded as Outlook.com, but Microsoft admits that it's basically a break-even business that is used to drive traffic to more strategic products like Bing and Office 365.
• LinkExchange - In a classic case of missed opportunity, Microsoft bought this early pioneer in paid search for $265 million in 1998. But as LinkExchange founder Ali Partovi (pictured here) explained in an essay for TechCrunch, Microsoft shut down the service a few months after launching it on MSN Search because it was scared it would cannibalize banner advertising. Whoops.
  
• Massive - Microsoft bought this company, which figured out how to place ads in console games, in 2006 for about $280 million. But in-game advertising never really took off, and in 2010, Microsoft shut the unit down.
  

Other companies have tried the acquisition strategy to enter new markets and failed miserably.  

• Hewlett-Packard  - In July 2010, HP acquired Palm's WebOS operating system for $1.2 billion.  It incorporated WebOS into its TouchPad tablet.  But, after only a few months following its launch, HP took TouchPad off the market due to poor sales, then this was quickly followed by a fire sale of its remaining inventory.  In February 2013, HP sold the remnants of WebOS to LG Electronics for an unspecified price.   In 2011, HP acquired Autonomy, an enterprise software provider for $8.8 billion.  In November 2012, HP wrote-off that $8.8 billion after discovering gross errors in Autonomy accounting which seriously overstated its value.  In 2008, HP also wrote off $8 billion in assets pertaining to its acquisition of Electronic Data Systems.          
• Facebook - In December 2011, Facebook acquired Gowalla, a location-based social network startup for a reputed $3 million in Facebook stock.  Within just a few months, Facebook shutdown Gowalla, rather than have to compete headon with LBSN market leader foursquare.  It later claimed that it bought Gowalla for its mobile knowledgeable staffers.  

According Microsoft CEO Steve Ballmer, the acquisition of Nokia's Devices & Services division is part of the company's mission to transform Microsoft from a predominantly software company to a hardware business.  The company has also established some very lofty goals for the Nokia Devices & Services acquisition.  It would like to boost its smartphone share to 15 percent by 2018, around four times what it has now, depending on which numbers you believe (See above charts).  Redmond also revealed that it makes less than $10 per handset in its current arrangement with Nokia, and thinks it can make over $40 going forward, while saving $600 million in costs. With all that, Microsoft is projecting $45 billion extra in revenue by 2018, with profits in the $2.3-4.5 billion range. High hopes indeed.

I have to admit that those are some very lofty goals considering the dominance of Android and iOS in the marketplace.  By its own admittance, the Microsoft Windows Phone "experience" is not up to snuff.  The new Windows Phone OS  UI did not go over very well with many users. There is a longer learning curve and takes take to getting used to.  

A marketing concept I learned in graduate school says that consumers will only switch to a competing brand when the switching costs are not overly prohibitive and the benefits of switching greatly outweigh the switching costs.  In order for Microsoft Windows Phone to succeed and steal away market share from the competition and meet those lofty goals is to create smartphones that far exceed anything offered by the competition.  This requires making a quantum leap in technology.  Steve Jobs "re-invented" the mobile phone when he unveiled the iPhone.   Jobs truly elevated the user experience to a new level.  The new phone will have to disrupt the industry standards to such an extent that consumers will clearly see the advantages of switching to Microsoft Windows Phone.  Whether Microsoft will be able to accomplish this remains to be seen.  

Another huge part of the user experience is apps.  Microsoft has ramped up mobile apps for Windows phones, reporting that in July 2013 it had 160,000 apps in the Windows Store. 100,000 of them are for Windows 8.  However, those number pale in comparison to Apple (700,000) and Google Android (800,000).  In July 2013, Windows reduced its Windows developer registration fee from $99 per year to $19 for 60 days.   A lack of sufficient apps can kill a product very fast. Here's a history lesson:  A lack of apps resulted in the downfall of HP's TouchPad tablet and slow death of BlackBerry phones and PlayBook tablet.  

Technological design innovation needs to be ramped up in order for Microsoft Windows phones to compete against No 1 Samsung and No 2 Apple.  Samsung stole Apple's thunder when it launched the Samsung Galaxy S4 equipped with a faster processor, more storage, longer battery life, and a huge 5-inch display sporting clearer and brighter resolution.  You can expect Apple to try to match or exceed the Galaxy S4 specs that when the new iPhone 5S is unveiled later this month.  Microsoft cannot just copy what the competition is doing, but greatly exceed it with every new product launch.  

To its credit, Microsoft showed touches of design brilliance when it launched the Surface tablet on October 26, 2012.  However the Surface RT and Surface Pro tablets caused confusion in the marketplace.  The RT was wholly underpowered and quickly crashed and burned in the marketplace.  This leaves only the Surface Pro with a faster processor, but it still does not match the iPad 5 in the specs that count, and its lack of sufficient apps could spell its downfall. Microsoft must win the battle of technological design innovation if the Windows Phone series is to capture the hearts and minds of consumers, otherwise it will remain at the bottom of the cellar. 

Courtesy of an article dated September 3, 2013 appearing in The Next Web, an article dated September 3, 2013 appearing in Engadget, an article dated August 1, 2013 appearing in Engadget, an article dated March 8, 2011 appearing in Business Insider, Nokia Corporation Year Ending December 31, 2012 SEC Form F-20 and an article dated June 27, 2013 appearing in The Next Web

THE FERRARI SPECIALE 458 -- ESTABLISHES NEW BECHMARKS FOR INNOVATION AND TECHNOLOGICAL RESEARCH

It’s called the 458 Speciale: it’s Ferrari’s new sportscar, the fruits of the innovation and extreme technological research that have gone into a car as outstanding as the 458 Italia.

The aerodynamic efficiency (an E index of 1.5), a more powerful aspirated V8 engine (605 cv) and the highest power density (135 cv/l) in the history of Ferrari road cars, an extraordinary weight/power ratio (2.13 kg/cv), electronic control of the slip angle (SSC): these are some – but not all – of the characteristics that make this car truly Speciale and that are destined to become standard for the Ferraris of the future. The aptness of the car’s name is easily shown by its performance figures: accelerating from 0-100km/h in 3s (or 9.1s for 0-200km/h) and a best lap time round Fiorano of 1m 23.5s.

Ferrari Speciale 458 side, front and rear views (Click Images To Enlarge)

The new 8-cylinder mid-engine berlinetta, which will be launched at the Frankfurt Motor Show on September 10, was designed with the target of raising performance and driving emotion to the highest levels, while still guaranteeing ease of control in every situation.

Ferrari Speciale 458 top view, cockpit view and transmission shifting controls (Click Image To Enlarge)

The 458 Speciale is the latest product of Ferrari’s core philosophy of extreme technological innovation and research which, in this instance, has yielded powertrain, aerodynamics and vehicle dynamics advances that transform the already exceptional 458 Italia into a car genuinely worthy of the “Speciale” moniker. The result is a completely new, uncompromising, streamlined sports car concept.

 

Many of the sophisticated solutions being applied for the very first time to an in-range car in the 458 Speciale, including its advanced active aerodynamics, will become a standard feature of all new Ferraris in the future.

Flanked in the Maranello marque’s range by the multi-award-winning 458 Italia and 458 Spider, the new mid-rear-engined V8 berlinetta was designed to boost both performance and driving emotion to unprecedented levels, yet simultaneously guarantee smooth, effortless control in all kinds of situations.

  

Ferrari Team drivers Fernando Alonso and Felipe Massa both take turns driving the Ferrari Speciale 458 in a racetrack in Barcellona, Spain.  Looks like both drivers had a great time.

Having lavished meticulous attention on the power unit that was named “Best Performance Engine” at the International Engine of the Year Awards for two consecutive years, Ferrari has now built its most powerful naturally aspirated V8 ever (605 cv) with an extraordinary specific power output of 135 cv/l , the highest ever achieved by a road-going naturally aspirated engine.

Thanks to an equally exceptional weight/power ratio of just 2.13 kg/cv, the 458 Speciale can sprint from 0 to 100 km/h in a mere 3.0” (0-200 km/h in 9.1”) and also clocked a lap time of just 1’23”5 at the Fiorano Circuit.

 

The 2014 Ferrari 458 Speciale taken through its paces on a test drive on the country roads of Italy.

Aerodynamic requirements guided the work of the Ferrari Styling Centre, which led the project in cooperation with Pininfarina, to sculpt the car’s forms to ensure they were more performance-oriented than ever. The most notable features in this sense are the front and rear movable aerodynamics which balance downforce and cut drag, thus helping make the 458 Speciale the most aerodynamically efficient range production car in Ferrari history (E Index of 1.5)

The technology used in the vehicle dynamics subsystems which gives the driver instant confidence and control at high speeds, natural power oversteer management and precise response to commands are further advances in an area in which Ferrari is already a well-established leader.

One of the most innovative content of the 458 Speciale is the Side Slip angle Control system (SSC) which makes it easier to achieve car control on the limit, thereby greatly improving driving emotions.

Thanks to the development of an accurate new algorithm SSC performs instant-to-instant analysis of the car’s side slip, comparing it with the target value and then optimising both torque management (via integration with F1-Trac traction control) and torque distribution between the two wheels (via integration with the E-Diff electronic differential).

Part and parcel of the car’s development included Michelin Pilot Sport Cup2 tyres which were specifically honed for it in an intensive collaboration programme involving, amongst other factors, numerous track test and simulator sessions. Conceived for the 458 Speciale, they boost performance over a single lap in the dry as well as improving performance consistency in subsequent laps. They also allow the car to avail of maximum available grip in the wet.

The abovementioned technical content has improved the 458 Speciale’s single lap time and also delivers repeatability of that performance on subsequent laps that is absolutely unprecedented for a car not designed exclusively for track use. The result is that the 458 Speciale has the fastest response time (0.060 s) and highest lateral acceleration (1.33 g) ever achieved by a car in the Prancing Horse range.

COMMENTARY:   For you automotive aficionados here are the specifications for the Ferrari Speciale 458:

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Courtesy of the Ferrari Speciale 458 Official Website