Particle Debris (wk. ending 8/27) The Googlized Brain

| Particle Debris

Even before I joined Apple, I saw demos at WWDC by the Advanced Technology Group in the 1990s. The demos were cool, but some got off track by trying to duplicate each of the core elements of the Knowledge Navigator. The ATG was famous for developing some products that never shipped, but also brought us QuickTime, ColorSync and AppleScript among others.

When Steve Jobs returned to Apple, he axed the ATG, claiming that it was a waste of effort, but I think he really wanted to shut down a group (and its VP) that wasn’t focused 100 percent on shippable products, at least according to his own vision. Ever since, Apple has been known for spending very little, as a percentage of revenue, on pure R&D. Here’s a chart from SAI that confirms that trend even today.

Microsoft is routinely, roundly criticized for spending a large percentage of revenue on R&D but not having much to show for it in terms of drool worthy products. Alternatively, note that HP’s CEO, Mark Hurd, who was recently ousted was very unpopular with longtime staff and the board of directors because he slashed R&D money in half. That left the company, according to some, ill prepared to meet the iPad challenge. Striking an efficient balance remains an art form for any CEO.

It’s certainly refreshing when a U.S. Senator appears to be honestly trying to do something positive on behalf of the tax payers. That’s what Al Franken (D., Minn) is doing with Net Neutrality, so I found this story refreshing: “Franken goes ballistic on Verizon, Google, Comcast, and NBCU.”

I have come to like the writing of Jonny Evans — he’s being doing some good work lately. Here’s his very credible take on “Why ‘open’ Android may lose the Apple iOS wars.

Some writers, with a short memory, will have you believe that open software was the reason why Windows beat Mac OS in the 1990s. That wasn’t the reason for its success, and so asserting that Android will beat iOS because it’s open is baloney. It’s 2010, and the Internet is a vicious place for the naive and ill-prepared. Apple knows that. Its customers know that.

Remember the Open Handset Alliance? It was a consortium of companies that was supposed to promote harmony, cohesion and competition for its smartphone building members, befuddled by Apple. But that hasn’t worked out so well, and someone at Motorola finally got a clue. Here’s some background on why Moto bought 280 North. Lesson: never believe executives who argue that its possible to depend on someone else to solve your company’s problems.

Worried about Apple (AAPL) stock these days? Here’s some historical data about how AAPL has done in the past in the month of September. Maybe when the dog days of summer are over and the renewed spirt of back to school, new computers, cool autumn and football lifts people’s spirits, Apple’s stock goes up. Now if the overall economy would just cooperate a little.

Finally, have you ever wondered if there are synergistic parallels between how the the brain physiology works and some kinds of software? Apparently, researchers have found that the human brain tends to light up when it’s in search mode. This article, “Wired For Information: A Brain Built To Google” explains a lot, including our well known obsessions with the Internet. It’s only through introspective research like this that we can step outside ourselves and really understand what the Internet, search, advertising, and behavioral targeting are doing to our culture. Caveat emptor.

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I’ve been very impressed with Franken.

Bosco (Brad Hutchings)

Jonny Evans’ last question pretty much answers itself. What’s to stop Apple from diversifying? Steve Jobs. Would Steve even know how to fit 6 categories or 6 sub-categories on a slide? He does best with 4, one for each quadrant. Meanwhile, more open markets don’t have to do that. They can experiment with form factors and fail. It’s OK. Perhaps not OK for the company whose product fails, but OK for ecosystem that can learn and continue a ruthless search for and develop the right niches. It’s evolution vs. intelligent design.

Lee Dronick

I?ve been very impressed with Franken.

Me too. He was a comedian, but that is not necessarily a bad thing because the good ones are usually quite intelligent. He is also rather artistic, watch him draw a map of the USA.

Tim Robertson

What part of windows was ever open?!?

Bosco (Brad Hutchings)

@Tim, How about the part that says I can buy a Windows OEM CD and the license allows me to install it on the hardware of my choice?

Tim robertson

But you can’t just install windows on anything you want. Besides which, that does not make it open at all. Do you have access ro the source code?


@Tim, How about the part that says I can buy a Windows OEM CD and the license allows me to install it on the hardware of my choice?

Bosco - this does not make Windows open. While I agree that you have a lot of freedom to install an OEM license on your hardware, the Windows software is still a very closed system. The hardware is open, not the software.

I am not sure if Apple will maintain its current lead with iOS and their ecosystem. However, I am comfortable that they will maintain a lead in profitability. Contrary to what many people think, ultimately revenue and market share are poor ways to measure a company?s performance. I would much rather own a highly profitable company with small market share than a company with the greatest market share and poor profitability.

Bosco (Brad Hutchings)

@Tim. I can buy a $120 Mini ITX MoBo and CPU from Amazon, stick it in a $50 case, plop $100 worth of RAM and a hard disk in it, and then install a Windows 7 OEM on it, legally, within the Windows license. If the Snow Leopard CD worked, it would be a Hackintosh and not within the Mac OS license. If you don’t see how it is more “open” on the Windows side, I won’t argue silly semantics with you.

@rabber. We probably completely agree. Apple will lose market share, Android will continue to gain. Who knows what will happen with Win Phone 7. Apple, in keeping a tiny niche will be more profitable, perhaps it will be the only profitable player. For awhile anyway. Just like in the mid 90s, market share will become important to profitability, as the network effects take hold.

Tom B.

“@Tim. I can buy a $120 Mini ITX MoBo and CPU from Amazon, stick it in a $50 case, plop $100 worth of RAM and a hard disk in it, and then install a Windows 7 OEM on it, legally, within the Windows license…”

..and people do. And they sell it to the “sheeple” who then wonder why it never works right. The lack of quality control in the PC market seemed like a great idea to Bill gates and droves of MBA drones, until Steve Jobs came back, pulled Apple out of its 1990’s doldrums, and showed people that computers don’t have to be hair-pulling nightmares starting with the original iMac.

Bosco (Brad Hutchings)

Yeah, Tom. And people do. And if they need an office full of PCs or a small server farm, they can get that without having to raise the war debt of Elbonia to pay for it. Or, if you’re not a big DIYer, you can grab 2 Dell Zino HDs for the price of a Mac mini and have two happy users instead of 1. That’s what “open” means—you have choices and you’re not held hostage by one company. And 90% of people seem to like that.


So much neat greasy meat to stew over but the R&D conundrum is the juiciest. John’s the iChef!

Maybe Jobs is Scottish and careful with his pocket change, and maybe Philosopher Bill was right and adversity is the greater teacher and if so, the question of the day is: Why, spending so little, has iSteve so outperformed the calamity giants in designing the future.

And the lesson for today is: lean, mean and hungry is a more powerful incentive to success than owning the honeypot that has no bottom.

Tomorrow’s question will be, “Why skinny Steve can kick assets like no one else on the beach?”

(Crap! can’t help but add: It’s all one big fat market, bud, and learning from the failure of others is a no-brainer. The brainer part of the equation is designing the future while Evolution blindly and coldly marches on ?  to the iDesigner’s drum. Rum pa pum pum.) I think someone might want to brush up on his Darwinian crib notes.

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