AMITIAE - Friday 27 January 2012

Cassandra - Friday Review: The Weekend Arrives

apple and chopsticks


By Graham K. Rogers


Opening Gambit:

More on the successful financial results from Apple. Chicken in the barrel syndrome: Apple is up and must be dragged down. iPhone sells more than all Android . . . ah, but the iPad lost share even with a 150% increase in sales. Rumours, including Apple TV again. Zynga called out on rip off of NimbleBit game. Large Nokia losses. Meddling with DTAC. Twitter can censor tweets for specific countries (but there may be a way round).

Apple Stuff

We had a look at the Apple quarterly figures on Wednesday and lots of people were impressed. And outraged of course. How dare Apple make such an obscene amount of money and not share/give away/drop prices/stop Foxconn abuse, etc.? Unusually, Apple stock rose and we read on Electronista that the 9% was as a direct result of the good figures. Well, it would be, wouldn't it. It eased slightly and is now running at just under $447. If you remember, back in January 2007 it hit $200 for the first time ever.

It was, as Horace Dediu on ASYMCO tells us, with his usual excellent and persuasive charts, the year of the iPad for the second year in a row: the iPad itself would be the largest PC vendor. . . .

To put this all into some form of context, as well as being higher than the value or income of some countries, the iPhone business by itself generated more than the whole of Microsoft we are told by Joe Wilcox on Beta News (link from MacDaily News). It all sounds rather odd really: that little fruit company that was dwarfed by Microsoft was really a giant in disguise. A jaw-dropper Wilcox calls it and adds that Apple revenue ($46.33 billion) was more than twice Microsoft's and puts some more facts in the way too, including Ballmer's dismissal of the original iPhone. [We have another one like that later on regarding Apple's stores.]

Building on that giant and little guy metaphor I use, we have some more comments from Steve Wildstrom on Tech Opinions who also looks at the Apple "blowout" but wonders if this concentration of profits might not be a problem for the rest of the industry. I think it will if they don't try harder. Some will fall by the wayside, but those with a firm foundation and a full understanding of what is wanted by the consumer, will do OK.

Tim Cook admitted he was fallible and had made a mistake. He said during the conference call that he was betting bold on China but still did not bet high enough., Electronista reports, and reminds us of the crowd problems when the iPhone 4S went on sale there.

It is always worth looking past the figures and into the minutiae. Chris Rawson on TUAW has been doing this and some of the little facts are rather revealing. am not going to copy the whole thing. Go and read it yourselves: really. However, the areas he looks at are Research and Development (up considerably), Mac Sales (up), iPod sales, iTunes (revenue of $2 billion), Peripherals, iOS, Average revenue per unit sold, and Overall. Apple has lots of cash too.

But boy did the backlash begin?

Not in major ways, but little things like water dripping on a stone. A fine example was the sudden appearance of a government and Microsoft survey (that in itself should display some red flags) reported by Lewis Page on The Register (more red flags here) that tablet users run a more serious risk of "neck and shoulder discomfort" compared to people using normal desktop kit. This is at the same level as Dvorak's There is no evidence that people will want to use a pointing device, when the first Mac appeared with its mouse, or Ballmer's dismissal of the iPhone (see below. And above). This looks like a classic case of, If you can't join them, beat them. And do it any way you can. There were a number of similar dire warnings over the weekend about reading skills of children when Apple made its iBooks announcements. Back to the dangerous iPad: this is nothing more than the same ergonomics warning that we get concerning sitting badly when using a computer. I could just as easily make a case for, reading is only safe when standing on one's head.

Also released this week coincidentally was a report by Intego on Mac Security, we are told by Topher Kesller: with an increase in malware (Trojans?) over the last 12 months, but there are still no viruses for OS X (it says that), no major security vulnerabilities or breaches and any potential problems were tackled in a timely manner. Kessler tells us that in relation to other platforms the risks on OS X are "minimal".

Out of the blue (almost) for example was a major article by Charles Duhigg and David Barboza in the NYTimes on Apple and those who work for other companies, particularly Foxconn. The article was several pages long and had a lot of information that I am sure I have seen before. Throughout, much of the deliberate heart-rending was an anecdotal tale radiating round the death of one young man last May. As the report makes clear, and as is repeated by several sites, such as by Dieter Bohn on The Verge, some former executives from Apple have been spilling the beans, but remain anonymous of course. As Bohn points out, that super profit came from human labour. One thing that stuck me was that this was not about Apple at all, although you would be persuaded that it was. This is a Foxconn problem and it is in China, not the US. Appel can pressure the company (and has) but as MacDaily New points out in its commentary on a link to the same item,

"Apple" was deployed 105 times (105 times!), "iPad" 12 times, "iPhone" nine times, and "iPod" once. That's 139 Apple-related mentions in an article detailing conditions at Chinese, not Apple, companies that, oh by the way, also happen to assemble products for Dell, Hewlett-Packard, IBM, Lenovo, Motorola, Nokia, Sony, Toshiba and many, many, many other companies. . . ." [My italics]

Another idea to come to the fore again is the dividend issue, especially now that Apple's pile of cash is almost up to $100 billion -- several ceilings high. Brad Cook on the MacObserver reports the thoughts of an analyst who writes, "We believe Apple is likely to announce a dividend during 2012, potentially next quarter when crossing $100B in cash and cash equivalents. We view this as very bullish for investors, as we believe a new group of investors seeking dividends would invest in Apple and drive shares higher". There was no comment from Brad Cook -- but remember Analysts have been wrong more times about Apple than anyone else, even my cleaning lady gets it right more often. Apple will tell us about a dividend when and if Apple makes a decision on this and magic figures will have little to do with it. Another note on analysts comes in an article by Steve Sande on TUAW who reports on what Philip Elmer-DeWitt wrote about analysts and bloggers. As far as Apple's results were concerned, more amateur bloggers got it right than professional analysts. Again.

It got worse when Apple was compared to the Chinese economy on Seeking Alpha. Spiraling out of control, Apple has had no cooling so is overheating and is ready to burst. The arguments here seem to be: Steve is dead so Apple should fail; Apple products are high priced and a recession is a-coming; there are too many Apple products, once we all have one (I have 6 or more) there is nowhere for Apple to go but down; because it is number 1 in size, it cannot go any higher or grow much more; there is competition apart from Microsoft (there has always been competition, like IBM, HP, even Acer in a way); surely Apple cannot keep coming up with new ideas because I can't. Sell, sell, sell, sell, sell. The sky is falling, the sky is falling.

The Register's Tony Smith had to admit that the iPhone had overtaken Android, but in a typical Register sneer, could not resist a dig by mentioning that it was losing ground in the tablet arena. I am not sure that this is right however and Smith conveniently forgets that this is one smartphone against all Android phones. As for those tablets, Smith uses an analyst's figures to tell us that Android increased its global market share, from 29% to 39% which I guess includes all those cheap ones and the Kindle Fire, 20% of which remain unused. Oh, and the way I look at it (I can play the stats game too) is that Apple still has a 60% share against ALL the others. On the other hand, Josh Ong on the clearly-biased AppleInsider, reports that Apple maintains dominance of the tablet market with 58% with global shipments of 27 million giving an increase of 150%. These are the same figures that the Register saw.

And all those iPad buyers were idiots. Why on earth didn't they wait asks Rick Munarriz on The Motley Fool. Referring to all the cheap tablets that are on the market -- you know the Blackberry Payback, the HP Crutchpad and the Amazon Kringle -- Given all of this markdown madness, you have to wonder what the 15.4 million buyers of iPads at $499 or higher were thinking. It was a buyer's market for tablets, yet they went ahead and paid retail.

No, they went ahead and bought a device that could do the task that the others fail to do. He goes through them all and why they should have waited for the iPad 3 when the price will come down and writes, "I'm not asking iPad buyers to "think different" as much as "think," period." Maybe they did; and maybe having the real thing in the hand for Xmas was what they decided. I feel sorry for Munarriz if that reality does not match his idealism.

Another note on Foxconn concerns a tax break that it had been angling for which we reported on months ago, when the story about it setting up shop in Brazil first did the rounds. Lucky Foxconn, they have the tax exemption and according to Chris Rawson, it is expected that iPad production will start soon.

Also in other countries is the news that Apple's new venture in Israel, that was related to the buyout of Anobit, the research and development center, is about to get under way in Haifa we are told in an AppleInsider item. More secret Apple developments there and fewer chances of leaks.

We knew there was to be an Apple Town Hall meeting this week after all the news about the quarterly results was done and dusted, but we were expecting some amazing revelations about Apple's future products (slim hope there, I know). Electronista reports on the event that was transmitted over the internet to those who could not make it to Cupertino. This is also a little interesting in the light of what we reported on yesterday (see below re pricing in Thailand). The staff of Apple who have been employed for over 90 days are to get $500 off a Mac (but not the Mac mini) and $250 off the iPad, but they can only do this once every 3 years. This is another demonstration of Tim Cook being in charge.

Tim Cook is an oddity as far as Apple and Steve Jobs were concerned as he was one of the only execs that Jobs dod not mind sitting on the boards of other companies. We are told by MacNN that generally this was frowned on at Apple (after Eric Schmidt, who can blame Jobs?) but there was an exception made for Cook because he was unlikely to be poached or divulge trade secrets.

A user who actually reads the articles I put up on the website (there are one or two) sent me a link to an article on MacNews which reports on the findings of a site that compared prices on the Apple online stores round the world and I wrote about this then. This region has the best and the worst. While the US and the Singapore stores are considered to offer the best deals on Apple, it was not good to see Thailand near the bottom of two of the tables.

As a comparison, we were interested to read in an item by David Goldman on CNN Money (link from MacDaily News) that an Apple store is worth almost as much as the White House, with the Apple retail stores generating around $4,709 per square foot. That MDN link recycles a quote from the analyst David Goldstein: "I give [Apple] two years before they're turning out the lights on a very painful and expensive mistake." Now, what do we think of analysts?

Rumours on the upcoming iPhone 5. First we are told in an item by Andrew Wray on iMore that a leak from Foxconn has iPhone 5 production starting for a summer launch and that it will have a 4" display as well as being longer and wider. And then we read in an item by John Gruber (reply on the RSS feed copied into iMore) that this really is nothing more than a rumour. However, Rene Ritchie adds some more information on this as did Josh Lowensohn who like the others mentioned the shape.

More rumours on that Apple TV thing reported as an exclusive by by Jon Rettinger in TechnoBUffalo (linked from MacDaily News) suggests that April may be the month of its release and the very thin device will be come using OLED panels in various sizes up to 42", with iOS that integrates with other such devices (iPhone, etc.) and voice control. And the price? . . .

A note on some updates this week came from MacNN who report on EFI updates for certain mid-2010 notebook computers and the Mac mini. There is also a note on MacNN concerning the latest developer release of 10.7.3 which has no known issues so I guess may be with us real soon now. But heavens, it is apparently almost 1MB and 1.26MB for the Combo (which I always go for).

Programmable magnets? Seriously and Apple has a patent for it. I refer you to the aptly-named Motley Fool who was concerned about (among other things) Apple's ability to continue to innovate. Patently Apple has some of the interesting details of this new technology.

Half and Half

Along with Apple's super quarter, and Kodak's Chapter 11 filing as well as the AMD loss and Western Digital slim profit in the wake of all that water, it was revealing to see that Nokia lost $1.38 billion, with sales dropping 21% we read in an Associated Press item on the New York Times. No matter, Elop and Microsoft will fix it. Like RIM promised they would fix the Blackberry. This was also carried by the BBC Business section. We are also told by Vlad Savov on The Verge that Nokia paid Microsoft $250 million in the quarter to use Windows Phone.

We can add Motorola to that list with a reported loss, according to Mikey Campbell on AppleInsider of $80 million and a report there also of only 200,000 tablets sold. Ah yes, that was another iPad killer.

A note on Western Digital from Kelly Hodgkins on TUAW tells us that the company has released a new Thunderbolt connectable drive called the MyBook Thunderbolt Duo which supports two 3.5-inch hard drives in a RAID 0 striped array.

Other Matters

We hear enough about patents and companies copying ideas in the areas of hardware and the like, but a recent story concerns what might be a case of outright plagiarism (or worse) in the games world, with many sites reporting that Zynga, whose IPO did not go as well as they had hoped a short while back, appear to have copied a game called Tiny Tower and released it as Dream Heights. Chris Parsons on iMore has information on this and some interesting comparisons are being made, most notably by NimbleBit who created the game allegedly being ripped off. As a point, before this happened, Zynga tried to buy NimbleBit and were turned down.

Former security company Symantec are telling customers of pcAnywhere to pull the plug after a hacker downloaded the source code, we are told by Richard Adhikari on TechNewsWorld, among others.

Apart from the usual spam mail that I get every day, this morning I had two examples of phishing that purported to come from Intuit telling me that they needed my information to comply with an IRS/TIN matching scheme they had joined. Don't get caught.

You thought SOPA and PIPA were done? Now there is ACTA and this is being sneaked in via Europe Iain Thomson on The Register reports. 21 EU countries have signed this law that gives more power to authorities to enforce copyright than was in the US legislation, he tells us, but there is much protest about this and before it becomes law, it has to be debated in the EU parliament, although there may be attempts to circumvent that. I later found another item on this from Electronista.

We read in an item by T.C. Sottek on The Verge that Twitter is now saying that it has the ability to censor tweets for specific countries. There may be some countries that have specific laws, or cultural mores (or dictators) that make it unsafe to post certain comments. Big Brother comes ever closer.

To the rescue comes a report from Anna Heim on The Next Web who tells us of ways to get round any such restrictions if they are applied.

OK, it is a concept situation, but Harrison Weber reports that GM has collaborated with a design lab in Israel to come up with touchscreen windows for a car. This particularly aimed at keeping children entertained on long journeys (or short ones for that matter). There is a video.

Local Items

We have broadband here, sort of, although the speeds are not brilliant when compared with other countries, and part of the reason is that much still replies on POTS installations: Plain Old Telephone System. That means copper wire and electrical noise. Much better is fiber-optic and while there is some (we have lots at work, but it has to connect to the outside world somewhere), there is much room for improvement. A report by Irene Tham on the Straits Times tells us that 1 in 10 households in Singapore now uses the ultra-fast fibre broadband network down there: about 100,000 subscribers, with 13,000 joining up each month now.

Local writer Don Sambandaraksa who used to contribute to the former AMITIAE site has been writing on Telecom Asia about DTAC again and the way the regulators are trying to micromanage the company concerning its recent service problems. How a company can be held responsible for a car crash and a bush fire at about the same time may be beyond these mandarins. We had all suffered problems in Bangkok the previous month, but hardly gave any thought to leaving. Friends who use other services complain just as much about lousy lines and creative accounting. The reasons, suggest Don, may be less a desire to regulate a service, but may be rooted in nationalism.

And we have wondered if that nationalism may have been instigated by people outside the regulators' offices.

In a report on the Straits Times, Goh Eng Yeow writes that there was a technical glitch at the data facility that hosts the OCBC Securities server and that caused all trading to halt for some 3 hours on Thursday.

Late News

A late item that links to the Twitter censorship idea above comes in an item by Jim Giles on New Scientist who discusses the FBI plan to monitor social networks. As ever the intent seems benign, but law enforcement agencies always want to push the envelope and sometimes misconstrue comments taken out of context. Were such monitoring to be done, there needs to be no action on any social network entry by a user unless there is corroboration concerning the source and the information.

Graham K. Rogers teaches at the Faculty of Engineering, Mahidol University in Thailand. He wrote in the Bangkok Post, Database supplement on IT subjects. For the last seven years of Database he wrote a column on Apple and Macs.



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