Consumers have had a seemingly indefatigable fascination with gadgets as they shrink into smaller and smaller form factors. Lately though, the main thing getting tiny has been price points. From PCs to video cameras, the best selling items in the market are low cost units. Naturally, there are big trade-offs in performance. It's worth thinking about why no one seems to care.

Firstly the numbers. The FT newspaper reports reports that the new category of 'netbooks' - low priced tiny laptops with small 9 inch screens - are on target this year to sell 10.8m units, rising in 2009 to 20.8m, or 11-12 per cent of the entire laptop market. To that point, Microsoft came out last week with the observation that virtually all the growth in new PC sales in the developed world in recent months had come from this new category of computers. No wonder they are accelerating plans for a cloud based application suite. 

Along a similar vein, the real hit in the consumer electronics world lately has not been the iPod but Pure Digital's Flip video camera. Selling for under $200, the Flip has become the No.2 best selling video camera in the US, and has shipped over 1 million units. The brand is rapidly approaching 20% market share. Not bad for a low resolution, low fidelity device with only an hour's video storage. However the Flip does have a killer app - the ability to directly upload videos to video sharing websites like YouTube and MySpace with a flip out USB plug.

I have two observations about this cheap and cheerful trend. Firstly, as more of the heavy lifting in software moves to web based applications and consumers gain access to faster mobile broadband -  this takes a lot of pressure off devices to be super powerful themselves. Why process, when you can access the super computed results of a Google, Amazon or Facebook? Why store, when you can stream?

Secondly and most importantly, consumers are discovering that the real fun in communications or  content these days is not what your device can do, but how it relates to their broader social interactivity. Taking a video in high resolution is well and good, but it's much more interesting to shoot something and share it with your friends who will immediately comment on it and forward it around. HD post production is a time killer and requires too high a learning curve. If anything, social media has conditioned us for instant gratification. And fortunately for now at least, that has a low price tag.

I was walking around today through the chaotic streets of Hong Kong with Bloom, Brian Eno's generative iphone app providing a soothing soundscape. It's hard to quantify how much joy something so simple can give - not to mention something that only costs $3.99. Bloom uses algorithyms to create and evolve patterns of sounds, at once random and yet strangely structured.

Generative systems are popping everywhere lately. You find them at the heart of complexity theory - the same science that lies behind networks, chaos theory and viral distribution. And they are particularly relevant to music. I caught an interesting exhibition at MoMa in New York a few weeks ago on the origins of music experimentation in the sixties when artists like John Cage used all manner of numeric or occult systems like the i-Ching to create what he called. “Indeterminate Music”. Media artist Toshio Iwai has also recently collaborated with Yamaha to create the Tenori-on, an innovative visual sequencer featuring a 16x16 matrix of LED switches that form a "visible music" interface. You can watch a cool video of Joi Ito playing with his one here. 


Although generative systems make for great toys and music applications, I get the sense that there is potentially for truly great art in all this. I was recently giving a talk at the New Media Days conference in Denmark. One of the other keynotes was Jonathan Harris, the creator of We Feel Fine. Watching the simple but profound results of an algorithm that tracks how people in the world are feeling based on blog entries that begin with 'I feel' was humbling and beautiful. 

If the greatest artists of our past were impresarios of the paintbrush and pencil, it's not inconceivable that the masterpieces of the future will be elegant lines of code.

But it did provoke another thought. What we are seeing now is what you might call the third phase of the mobile evolution. Phase one was about transforming eighties mobile bricks into slick, design lust objects. Phase two was about figuring out how to make mobiles impersonate your Walkman and personal video player. Phase three, in my opinion will now pit Apple, Google and Microsoft against each other as they all attempt to control the ecosystem for cloud based applications.



I won't speculate as to the odds of who will win that, save for making two observations. Firstly, cloud based platforms are, in the end, a winner takes all game. It comes down to scale. More users means more data, more data means more value, which in turn increases your ability to play dirty to win even more users. 



Secondly, the rise of the mobile data cloud is (another) big wake up call for Telcos. The more that value is delivered as a result of cloudware rather than software, bundled content or product design - the more commoditised the simple act of providing a data pipe becomes. Unlocked handsets are the future, as are unlimited mobile data plans that allow the dreaded voice over IP. As the pools of fast WiFI expand across urban areas, and geeks figure out how to make mesh networks easily run on mobile phones - the days of being able to charge monopoly rents for merely plugging holes in people's network coverage will draw to a close far swifter than anyone on the executive floor may realise.

Had an interesting chat about sports rights today with Jason O'Sullivan who is the VP, Digital Media at ESPN STAR Sports in Singapore. There is a growing trend for Federations and rights holders to package and sell online rights distinct from broadcast rights. One of the challenges is that many of the people bidding for the latter are network operators and ISPs, who see exclusive content as a loss leader to get people to buy their communications products. That drives up the prices of those rights. For media companies, online advertising revenues are growing, but not to the extent to monetise massive investments in new media licensing. So, what about premium content? ESPN in the US has been successful with broadband platforms like ESPN 360 but O'Sullivan sees small upside in subscription revenue in Asia for the immediate term. In his view, broadband, disposable income and credit ownership are limiting factors in emerging markets. After all, in India even Pay TV is generally "don't need to pay" TV.

The show was funded by Whedon, cost less than six figures and was shot in a week. His idea was to release it free for the first week, without fees or advertising. As reported by the LA Times, Whedon expects that with merchandising, iTunes sales, the soundtrack and DVDs, the show will pay back its costs within a year. But in a way, that's not the point. By building such a massive online fan base with almost no paid promotion, Dr Horrible has become a content platform in its own right. It is the art of the Hollywood sequel reimagined. Just without most of Hollywood.

When Wired asked Whedon about whether he was worried about illegal downloading and piracy, he was relatively sanguine. "A note to all you would-be pirates" he said "Scurvy is a serious issue. Eat some limes."