Particle Debris (week ending 5/14) Incompetence, Fear and Greed

| Particle Debris

What’s the difference between an exclusive deal with a partner in a competitive market and an illegal monopoly? A lot of people still haven’t figured that out. Anyway, here’s a good take on the exclusive arrangement and contract Apple has (or had) with AT&T by Engadget. It points out that contracts can be amended. Yep.

Expanding on that, I’ll predict, for the third time, that Apple will strike a deal with Verizon in 2010, and the AT&T exclusivity will end. My colleagues at TMO disagree with me, but Apple just cannot turn its back on the sales opportunities with Verizon — which has slightly greater U.S. market share than AT&T.

I once heard that the New York Stock Exchange is driven by only two things: fear and greed. I suppose the Apple iPad has created a market place where those two emotions also come into play, and so last week Borders announced its new eBook store, with over a million titles, and completely compatible with the iPhone and presumably the iPad, though not mentioned by name. We’ll know more in a few weeks. [Update: either i missed it or the Website was updated. The iPad is explicitly mentioned.]

Topherchris, an Internet enthusiast, has concocted a cute love/hate post card from Adobe to Apple. It’s very clever; take a look.

While we covered this at TMO, I can’t begin to say enough good things about Apple’s new iPad ad. I was growing weary of the cheesy, pop music accompanying the iPhone ads, and apparently Apple realized that the iPad merited a more serious approach. The narrator, with a deep voice, rolls out some powerful and key phrases that hit home in a sober, technical, yet fun tone. Check it out one more time to understand the brilliance of this Apple TV ad.

One of the tidbits of information that’s leading journalists to surmise that Apple will strike a deal with Verizon this year is the rumor that Taiwan’s Pegatron Technology will be building CDMA phones for Apple. Whether these are going to China or the U.S and Verizon, or both, isn’t known for sure. And Philip Elmer-DeWitt throws in a healthy dose of skepticism. Even so, it’s just one more piece of the puzzle that eventually leads to enough clues to draw a conclusion.

The Macintosh isn’t making a lot of news lately. That’s okay so long as we distinguish between what’s hot and long term reality. Millions of customers are still buying Macs, and I know I can’t live without one (or two). That’s why I was intrigued by this article, “Ten free apps to install on every new Mac.” I can’t disagree with the selection, and most everyone, I’m guessing, will run across something new and delightful here.

Have you ever wondered what’s going on behind the scenes when you watch Network TV shows on your Mac, iPhone, iPad? It’s not just a simple video stream. Eugene Wei, a VP with Hulu explained all the things that a player environment must do, for Hulu. (His comments have since been removed from the Hulu blog, but not before they were captured by AppleInsider.) The key here is that HTML5 still has some things to work out regarding an agreed upon codec and DRM method. As I’ve said before, commercial motivations to exploit the iPad should light a fire under the standards committees.

Apple is a large, successful and powerful company now. Their size, market cap, revenues, and cash assets make the company a force to be reckoned with. As a direct result of that, everything that Apple does results in growth. That’s important to understand.

Not only are Apple’s sales and revenues going up, iPad and iPhone sales booming, but every initiative Apple engages in can be expected to flourish. While not everyone likes Apple’s stand on Adobe’s Flash, numbers tell the real story. Again, Philip Elmer-DeWitt has uncovered numbers from Mefeedia that show the growing percentage of Web video that’s HTML/H.264 ready. This kind of chart suggests that Apple is successfully forcing the issue on the iPhone/iPad side and that Adobe has lost the war — at least with Apple products. I love charts like this that tell the story, especially when there’s a smart, credible, respected journalist publishing it.

Speaking of Adobe Flash, another thing I like is when an experienced developer jumps in and provides a sane, readable technical explanation of the ins and outs of a controversial issue. This article is by Carlos Nazareno, an interactive media artist, who has a great deal of Adobe Flash experience. You’ll learn a lot from him about where HTML5 stands right now vs. Flash and why Flash isn’t going away, at least on the PC side, for a long time. This is essential reading.

Finally, Mike Elgan at Datamation has written a credible and convincing article about how Apple is so far out front with the iPad that competitors will have a hard time catching up. The result could be that the iPad becomes a de facto standard for personal tablets. Mr. Elgan thinks that’ll be a shame, for competitive reasons, and his approach is calm and sensible from a certain standpoint. You may hope that Apple dominates forever, but Mr. Elgan makes some good points, especially about how incompetent the current competition is. Only Hewlett Packard with its Palm/Web OS on a tablet has a fighting chance — if HP doesn’t screw up as well. Highly recommended: “Why We Need a Real iPad Killer. And Quick.

Business Week’s Cliff Edwards and Peter Burrows have a similar take on how tough it’ll be to compete with Apple: “Tablets: The Scramble to Be Second.”

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13 Comments Leave Your Own

davebarnes

@John,
Stuffit!?
You think people should have AND install Stuffit?!
Seriously.
,dave

Lancashire-Witch

Wow John, A steamer-trunk full of very useful and interesting stuff. And thanks for the “Ten free apps” link. I found one I like that didn’t know about.

John Martellaro

Dave: Depends on how long you’ve been using a Mac:

http://www.macobserver.com/tmo/article/how_to_open_and_migrate_your_old_stuffit_archives/

gplawhorn

Add my vote for a Verizon iPhone. AT&T has decided to ignore northeastern Nebraska, which may actually be a good thing, given their reputation elsewhere.

UrbanBard

I don’t know what Apple intends, but an iPhone from Verizon in CDMA would be disappointing. Apple would be better off waiting for LTE and G4 service in two to three years, but if it did deliver a CDMA iPhone, some of the irrational hype could be discounted. That way, people could get pissed at both AT&T and Verizon’s poor service.

A Verizon iPhone is not magic; the technology which Verizon uses is inferior. CDMA does not provide Data and Phone service simultaneously, choose one. Next, Verizon only has a good reputation for providing phone service, not data service. Verizon’s network is wide, but shallow; There is ample evidence that an iPhone would bog Verizon’s network down. Finally, Verizon would not work any better in New York City or San Francisco, than AT&T does now. The reason is that hills and tall buildings block the signal. You need a new technology to be implemented, such as Femto-cells, and that is barely getting started.

gplawhorn

If I had a choice between AT&T and Verizon, I might choose AT&T. Since I have no choice at all, I’d take an iPhone without simultaneous data and voice over no iPhone at all. And it’s for certain that Verizon beats AT&T in places where AT&T doesn’t offer service.

Bosco (Brad Hutchings)

To best understand Apple’s rhetoric on Adobe and Flash, you just have to look at how politicians deal with “the Mexicans” in an election year. The similarities are striking.

* They’re lazy. Check.
* They’re responsible for all the crime/crashes. Check.
* They drain our batteries/welfare system. Check.
* We will speak English/Objective-C only! Check.

Forget the realities which every competent economic study demonstrates that illegal immigrants are a large net-positive on the economy, necessary to many domestic industries, actually commit less property and violent crime per capita than citizens, etc. Just like, forget all of Nazareno’s points, because Flash is the enemy!!

UrbanBard

That’s fine for you, gdlawhorn, but what is an appropriate strategy for Apple? Right now, Apple has a choice between no option and a bad option. What Apple has been doing has been forcing a solution on us. That solution will cost about a trillion dollars. Who do you think is going to pay for it? How soon can it appear?

None of this is Apple’s fault. The government screwed up Phone service in America from the beginning because it was considered a natural monopoly. There is no such thing. This is bad history and total corruption.  Ma Bell (AT&T) was given a monopoly over phone service. Then, it was turned into local monopolies by the local Bells. The government lied and called it deregulation. The Cell Phone systems were designed by the local bells to deny competition with a complexity of different frequencies and technologies. It was an unholy mess.

The question is whether a CDMA iPhone improves Apple’s reputation. I don’t believe it will, so I guess that Apple will wait for the technology to improve.

Meanwhile, you have all these numbskulls demanding the impossible. Talk about ignorant and impractical; they ought to run for congress.

UrbanBard

Yes, Bosco, it is far better to leave the Mexicans to wallow in their squalor. We should never force the kleptocrats in Mexico City to improve their political and economic system, so they can provide for their own people. There should never be any attempt to move away from popular and notoriously inferior technologies. It is far better for Americans to never have their laws enforced or seek to have new technologies adopted. It doesn’t matter that the vast majority of felons in our prisons have no legal right to be here. Nor does it matter that there is a political movement in the Southwest by La Raza and MEChA which says that California, Arizona, Nevada, New Mexico and Texas actually belong to the Mexican people.

Of course, none of that matters, because people like you will give it all away. But, that will be over YOUR dead body and millions of Mexicans killed.

gplawhorn

You’re right, UrbanBard, I’m not particularly concerned about Apple’s strategy. Apple is primarily concerned about what will move product out the door. For all of The Steve’s ideology, his greatest gift to Apple has been tremendous profitability. That’s his responsibility, and the aim of every Apple stockholder.

What I care most about, and I believe what most of us care about, is whether or not we can have the product that we want. I just happen to want an iPhone. But you can substitute any widget whatsoever for the iPhone.

Whether or not Apple has a “bad” option is a judgment call, not an absolute right-or-wrong call. I think that Apple’s products are pretty consistently amazing, and choose to use them whenever possible. I do have the option of paying full price and jailbreaking and unlocking an iPhone, and using it with Viaero. My Crapberry contract is up in December, so I’ve still got a few months to see what happens.

UrbanBard

“Apple is primarily concerned about what will move product out the door. For all of The Steve?s ideology, his greatest gift to Apple has been tremendous profitability. “

You misjudge Apple and Steve Jobs harshly. Microsoft is about the Money; Apple is about pursuing a vision of excellence—that is, changing the world. Steve jobs’ great complaint about Microsoft was not about its success or its profits, but that it made third rate products. It turns out that creating first rate products makes money, too. Why? Because Apple has a good strategy. It doesn’t deliver products in a half finished condition.

“What I care most about, and I believe what most of us care about, is whether or not we can have the product that we want. I just happen to want an iPhone.”

Yes, but great products don’t come from nothing. Apple has a vision of why it works so hard. That effects what it does and how it does it. The products are just the result of Apple knowing who it is and what it believes in.

But, Apple has to deal with the fact that all mobile ISP’s are crap. I see nothing to change that for a few years.

“Whether or not Apple has a ?bad? option is a judgment call, not an absolute right-or-wrong call.”

Every product is the result of millions of judgement calls. But, Apple has to deal with what is possible. What many people ask for is either not possible or it is loaded with such bad consequences as to rule them out.

The point about “right and wrong” is that the world tends to punish bad decisions. Relativism does not work; wishing does not make anything so. The world operates according to its rules. Anything good comes out of someone’s vision, toil and energy.

“I do have the option of paying full price and jailbreaking and unlocking an iPhone, and using it with Viaero. “

All I am saying is to be careful; you may not get what you want. What you want may not be possible, yet. Look for testimonials before deciding. Be real world, not airy fairy.

gplawhorn

I don’t think I judge Apple or Jobs harshly; in fact, I greatly admire Job’s ability to a) make really cool stuff and b) make a boatload of money doing it. As for a vision of changing the world, that’s clearly secondary, and subsequent to, profitability.

Apple is a fantastic company, no question. They are one of the few Great companies out there.

What I want is simple - an iPhone. My biggest need is to have a cell phone. Having a smartphone that seamlessly syncs with my Macbook Pro, and allows me to have my contacts, calendar, planning, etc., is a close second. I don’t really care about the internet portion of the iPhone so much. It’s handy, of course, but not mission critical.

If Apple would a) convince AT&T to service my part of the midwest, or b) allow others to carry the iPhone, then I could a) get rid of my Crapberry, and b) get rid of my iPod Touch, which together are a smartphone. Two devices become one device. That’s all I want. And harsher penalties for parole violators. And world peace.

UrbanBard

“I don?t think I judge Apple or Jobs harshly… As for a vision of changing the world, that?s clearly secondary, and subsequent to, profitability.”

We will have to agree to disagree, then. The cool stuff and the high profit margins are a result of Apple’s pursuit of excellence, but it is not Apple’s prime goal. Here is what Apple is all about.

http://www.ted.com/talks/simon_sinek_how_great_leaders_inspire_action.html

“If Apple would a) convince AT&T to service my part of the midwest, or b) allow others to carry the iPhone, then I could a) get rid of my Crapberry, and b) get rid of my iPod Touch, which together are a smartphone. Two devices become one device. That?s all I want. “

Unfortunately, what you want may not be in the cards, yet.

Four years ago, the mobile phone market was totally screwed up. This was because Congress had broken up Ma Bell (AT&T) in an anti-free market way by giving the local Bells a regional monopoly. Those local bells completely balkanized the mobile phone space with incompatible technologies and frequencies (GSM vs CDMA mainly). What followed was a series of mergers to try to put Ma Bell back together. The two largest pieces were AT&T and Verizon. Their mobile phone systems had been intentionally selected so they couldn’t be used on each other’s network.

AT&T was way behind Verizon in phone service when it bought Cingular. It must have been in panic mode, otherwise it would have never given Steve jobs so much control over the technology. AT&T had the largest landline system and the most customers, but its mobile system barely had EDGE technologies (2.5 G). AT&T had to spend between two and three billion dollars just to upgrade its system for the original iPhone. Since then, AT&T has had to spend another 4 to 6 Billion dollars for 3G service.

None of this will be resolved until LTE and 4G hardware is put into place. That will take another two to three years in the major cities and will take 20 Billion dollars just for AT&T’s side. If Net Neutrality Common Carrier rules are put into place by the FCC, it will take much longer and cost more. There are no good guys on either side of Net Neutrality, but the solution is not to be anti-competitive.

New York and San Francisco are special cases because they have hills and tall buildings producing dead zones. That is the major cause of dropped calls. The solution will probably need a Femto-cell implementation.

World Peace is impossible; I guess you are being whimsical.  It never happened before, and any person who attempted it, like Neville Chamberlain, got millions of innocent people killed. Even local peace is damned near impossible when the Left is in charge.

Parole violators? Why have parole? Oh, yes, that is from crowded prison conditions being considered torture. It is far better to let the poor misunderstood felons out of prison early.

It isn’t as though the government recognizes that it has a responsibility to protect the lives and property of its citizens. Those citizens aren’t allowed to protect themselves, either. Despite the US Supreme Court saying that Gun ownership is an individual right and gun control is illegal, the poor citizens of Washington DC, the most dangerous residential area in America, are denied access to weapons. Who gives a damn about them?

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