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re ADBE's business
Knowing ADBE has some serviceable tech is different from having confidence in their capacity to support a profitable long-term business. Solaris? OS/2? WordPerfect? Might be great tech, but there's at least a good question how much profit they produce.
As for PDF, I would point out that the reason Apple's OS uses PDF as the basis for its screen display tech is that Apple didn't want to pay ADBE's demanded PostScript licensing fees, and PDF is a standard that can be complied with without giving rise to a need to pay ADBE any royalties. There have been at least three independent PDF rendering engines built that I know of: Adobe's, Wil Shipley's, and Apple's. Neither Shipley nor Apple pay ADBE a cent to use them. Other folks may license some implementation of PDF, but they don't have to license the power to use the spec itself.
I know there's a big following of power users whose businesses depend on ADBE's content creation tools. I assume this has a lot of value, but it's not my own field of work (I overwhelmingly create text documents,not multimedia images) and I lack the deep understanding of what differentiates ADBE's products from those of its rivals that would enable me to speak intelligently on the degree to which ADBE's tech involves significant protection from competition.
Apple's business, I better understand. So I invest in Apple and express opinions on it. ADBE's business? I withhold judgment. Not to say I'm pessimistic; indeed, your reply message, if you notice, was to my defense of the probability that ADBE's current web app/software-as-a-service movement was not irrational. So, in effect, I posted to give a general vote of support for ADBE's market moves while expressly saying I don't necessarily have the kind of understanding necessary to back a financial investment -- and get slapped on the wrist for not appropriately admiring the power of ADBE's products to withstand competition.
Here's my personal observation:
Photoshop's UI is so complex and opaque that I find it excruciating to use, and I am sure that there are features that exist that I simply can't find because I have no idea whatsoever what ADBE has decided to name them or where it has decided to hide access to them.
Photoshop's PDF viewer performs so poorly on my iMac G5 that I routinely use Preview.app to view and search PDFs (search is so damn much faster in Apple's implementation that it's hard to imagine what ADBE could have done to be so pokey), and I use Adobe's (freeware) product only when I absolutely must type into a PDF form that I later intend be edited. Even then, ADBE's tool impairs my control over my print options, and I find it obnoxious to use. And the UI is less responsive than other text-handling apps, including Apple's PDF viewer (that can allow typing in text fields, but saves non-editable versions). Basically, ADBE's PDF reader's tool for typing into text fields leaves me feeling like I'm trying to type into a big Pages document -- even if it's just a 1-page PDF. The difference between ADBE's product and Pages is that I honestly expect Pages to get faster.
But despite my personal reservations about the experience using Adobe's products, I point out that I am not their core market, so I reserve judgment.
Take care,
--Tex.
PS I have an old HP LaserJet that lacks built-in PostScript, and I considered getting a hardware chip with the PS built in, but the freeware GhostScript software has done a great job of putting excellent text on my LaserJet. There may be a great reason to use PostScript printers, and there may be excellent reasons that freeware like GhostScript will be unable to obsolete PS in the near term, but I don't know these reasons. I just know that the old, eBay-available chips that would enable PS in hardware on my printer are just not needed, and it does raise in me some curiosity whether there's a serious need in anyone's printer. But, it's not my field, I'm not an expert, so I reserve judgment.
re fines and restitution
Restitution is nice, but it's hard to collect $140k from two unemployed twenty-somethings whose job prospects are dimmed by a history of theft from an employer.
Still ... that's a few hundred phones. I wonder what the worst case is on worldwide theft. If I were running things, I'd be curious what techniques exist to ensure production overruns don't occur, to funnel devices into unofficial channel markets. That's a bigger risk, from my standpoint. Unless the hardware manufacturers have no access to the software and packaging ....
Take cae,
--Tex.
AAPL's business model
Back closer to the Board's topic, I note that the Univ. of Virginia incoming student survey may not be a fluke, but is arguably a leading indicator:
http://www.appleinsider.com/articles/08/03/26/morgan_stanley_40_of_college_students_plan_to_buy_macs.html
If Morgan Stanley is right, student demand for university computing resources will turn toward Macs, Mac support infrastructure will improve at universities, and this will mean universities will be churning out grads with a background in managing Macs in enterprise environments (backups, deployments, upgrades, user management, etc.). Apple could be pulling on MS-Windows what MSFT did with NT in the '90s.
Back to Unix, anyone?
It's not a short road, but it's a movement that builds momentum. Since MSFT's business model is in selling software, it's unclear how MSFT could make a case on the point of price without doing what MSFT had to do in some european government contracts, and simply buy the deals. If MSFT ended up subsidizing the hardware to keep students being trained to support MSFT's products, MSFT might stem the tide, but there's a marketing cost to getting caught at this.
If the 40% number is right, and it's consistent, this is a wave that will look awesome as it nears to shoreline.
Take care,
--Tex.
PS if ADBE's "we can use it" clause applies only to stuff published for public viewing, it would be unlikely to impact even pro users, of the product were a good substitute for ADBE's pro image manipulation tools. The question then becomes, must one pay for non-public storage, etc. Still, I don't see ADBE hawking people's pics; I think this language is intended to cover anything ADBE does to create web revenues on the basis of the stuff people do mark public (e.g., advertising, etc.). I think ADBE wants the ad revenue, it doesn't want to be AdSense, paying content people for ad revenues -- ADBE wants to stand in the shoes of the content creator to benefit from whatever revenue stream marketers dream up down the road.
What's different
Honestly, I have no idea what they might offer that is distinctive. I am unfamiliar with their competitors, and I am unfamiliar with ADBE's current online offerings. I'm simply pointing out what ADBE may be trying -- and, I assume, ADBE believes it's got an edge in image manipulation that it can leverage in this competition.
If ADBE has not actually got an edge in this, it will die horribly, soon. The fact people view the company as having value suggests to me there's broad belief the company has some sustainable advantage. If not, it's just a commodity vendor and will have its margins crushed.
Maybe that's your point? That ADBE hasn't got anything going for it but an installed base and a brand name, and the next person to write an app like Acorn will start churning through ADBE's market share and profits?
For my part, I've never claimed special knowledge of or confidence in ADBE's products, but assuming they form a plausible business, there's no reason to pooh-pooh their shot at trying to make a go of it with software as a service, other perhaps than in the course of lambasting all software as a service as a business model, but I didn't think that was your point. Companies like SAS (the statistics package) have done pretty well renting out desktop software, and I expect that if they offered the same power on a per-transaction basis they could make money at that, too. And Google has made some money offering software as a service (by letting folks use its computers and data to perform searches) without any subscription fees at all, using ad support -- and it's made money that would have shocked me to the core to hear about ten years ago.
So, I'm willing to suspend disbelief and let ADBE try to make a go of it online to grow its business, or advertise its tools to new people who don't know the system. Frankly, I find ADBE's interface to be intimidating and inaccessible, so perhaps a freeware SaaS version might offer "training" for prospective buyers. Whatever the case, I'm not an ADBE shareholder, or an ADBE short, so I haven't got a dog in the fight. I'm just withholding judgment.
So far, they don't seem bonkers yet.
Take care,
--Tex.
re ADBE web app strategy
There's a population that has photos it'd like to manipulate but doesn't want to part with hundreds for the privilege. ADBE can do two things at once here: learn, by watching users, what these folks actually want to accomplish (market research in user demand), and develop a user base that might be monetized with ad support, or built into a photo community that might be similarly monetized, etc. And since ADBE holds all the logic on its servers, ADBE can pull the plus any time it looks like it's a bad deal.
I haven't checked it out, but I'm sure folks at ADBE are interested in at least testing the feasibility of this. My strong impression is that power users -- the folks who happily pay ADBE's suite fees to churn through their work on their butch desktop systems -- aren't interested in slowing their workflow by squeezing all their in-flow and out-flow I/O through the relatively thin pipe of their network connections. The folks who have been paying for the pro apps probably don't feel this is a substitute for The Real Thing™ on their desktop. Assuming I'm right in this impression, what is ADBE risking with this foray into the web services space? Assuming I'm right on the unlikeliness of significant cannibalization in ADBE's primary market, ADBE is in a position to explore a market segment it's never been able to monetize before: folks who have images to fool with, but won't part with hundreds of bucks.
I think the possibility of ad-supported hobbyist communities or "supreme" versions with a subscription fee is a very plausible later game. First, though, ADBE needs to learn what the users actually do with the app, and how many are interested in doing what. Maybe ADBE ends up partnering with someone's social networking site -- or offering services in connection with those sites, for revenue sharing. Maybe, with significant storage, ADBE gives folks a good subscription value for remote storage and publishing, considering what they get in image editing. Mind you I'm just speculating. But this is the kind of thing that invites itself to my mind. These people are picture enthusiasts, and they are a good market for folks looking to peddle scanners or printers or cameras or lenses or vacation packages or costumes or diving equipment or parachute training ....
It'll be interesting to see where this stuff ends up. For sure, you can't tell from here, can you?
Take care,
--Tex.
Need IE?
IE (pick your version) on MacOS X via Wine and X11:
http://www.kronenberg.org/ies4osx/
Multiple versions, side by side, apparently this isn't possible on MS-Win.
Remember back when we heard about NT admin training on Macs running VirtualPC and saved versions of drives, in case the admins botched their virtual systems? This isn't the same, of course (and Connectix was bought out by MSFT, anyway, which despite promising Mac versions would continue killed Mac products, go figure, leaving the field to Parallels and VMWare) but it's interesting to see how things have come back around after the MacOS X dislocation of people who used to be able to do Win-related and administrative things on their Macs but had it broken in the MacOS X transition.
Take care,
--Tex.
IP litigation?
I haven't reviewed Apple's multitouch patents, but Asus looks to be poised to sell an infringing device:
http://www.electronista.com/articles/08/03/26/eee.pc.multi.touch.at.fcc/
SJ's "boy have we patented it" statement about the iPhone's multitouch interface makes me wonder whether it's bluster, or whether it's intended to signal Apple intends to maintain exclusivity.
On another front, ChangeWave reports that in terms of corporate satisfaction ratings (specifically, reports of being "very satisfied"): Leopard > Linux > XP-Pro >> Vista-Business
http://www.macnn.com/articles/08/03/26/mac.demand/
Same link: intent-to-buy remains strong for Apple, with near-record laptop and desktop intent-to-buy in 90 days.
Growth in Macs, as a trend, may not be entirely unconnected to Apple's recent product releases:
"Macbook Air sales appear to be additive to total sales, rather than replacing Macbook Pro sales," said Andy Hargreaves, analyst for Pacific Crest Securities. "We believe a new set of corporate customers make up a meaningful portion of MacBook Air buyers."
http://www.macnn.com/articles/08/03/18/apple.outpaces.pc.market/
If this is accurate, Apple may have tapped into a space/weight constrained segment of the much-traveling, high-spending market that didn't consider Apple's full-featured products a plausible alternative due to weight concerns, but is excited to take advantage of a product that is an apparent successor to long-discontinued subnotebooks. Anything Apple can do to extend its addressable market is good news, in my view. The initial "oh, MBA is selling poorly" reports didn't leave me with the impression the MBA actually improved anything for Apple, but I'd be happy to learn the product is a real winner.
Now to shift gears again back to 64 bit. Apple's movement to 64-bit may tend to pull old apps toward Cocoa. Why would Apple rewrite apps? Intel's architecture includes backward compatibility for old instructions -- including really old instructions with which the chips were intended to be compatible. Only in the new 64-bit instructions did Intel have the freedom to introduce certain improvements in register size and so forth, meaning that while a 64-bit Cocoa app on PPC might not have dramatic improvements in some cases, the movement to 64-bit on Intel is associated with genuine performance benefit. Moving toward 64-bit code won't be an overnight thing, but it's got to be part of a long-term plan. Hasn't it? Besides, the supposed benefits of object-oriented programming make it likely that migrating code to Cocoa would improve maintainability, leading to improved engineering happiness and cost savings.
Apple hasn't got a reason to launch its pro apps on other operating systems, when its reason to acquire the software was to make the Mac platform uniquely valuable, but there's another reason to move toward Cocoa (i.e., a reason more compelling than being able to use the Safari-tested Cocoa frameworks to run Apple's software on MS-Windows), and the improved reason is this: Apple's advancement in recent years was made possible by the platform-independence of its operating system and key apps. To maintain the same flexibility going forward, Apple's general strategy of platform-independence must include building toward Apple's main platform tech. With Carbon-64 dead, and all the UI stuff for non-Cocoa apps being made possible only through Cocoa integration, it seems the road forward for all MacOS apps (Apple's and others) is migration to some family of 64-bit libraries, and on Apple's platform that's an invitation to go Cocoa.
What will MSFT and ADBE do with their enormous code bases that aren't either 64-bit or non-Carbon? Well, maybe we'll see a long period between upgrades in which newcomers will have a shot at building a performance advantage. But I expect Apple to deliver "performance improvements" via movement to 64-bit (to leverage Intel's superior output in the 64-bit instructions), which in turn should enable Apple to offer superior performance under constraint (like, the constraint of finite battery or limited clock cycles in a portable that can scale down clock speed for power consumption). The better Apple can play the hardware-specific game (graphics subsystems? DSPs?), the better Apple will be able to look on performance metrics as the world looks at battery life and other measures folks will care about. The easiest way to deliver this on Apple's platform seems to be to move everything to Cocoa, then to optimize Cocoa's various parts to sniff out and use the most effective tools available on the running box. The bonuses include (a) ability to bail to new hardware without per-app rewrites, because the one Cocoa fix to accommodate specific hardware will take care of all apps that rely on the Cocoa mechanisms that know about and rely on the hardware, and (b) the ability to speed hardware-specific development for the same reason, which will be a plus as Apple builds a gaming platform and wants to offer developers some hope that new hardware won't kill too much of their existing code (I use games as an example, but the same is true of math libraries that might depend on a programmable GPU or a new set of instructions on the CPU). Apple's ability to quickly adapt to new hardware turns on things like the hardware independence Cocoa makes possible.
I think we should be expecting considerable engineering resources to go into this, with the objective of, in effect, insuring Apple's various code bases against hardware-related threats from evolving hardware and improving the portability of the code to new tools.
Take care,
--Tex.
re $99 training
Without going into whether the length of the sessions and the hourly rate of the trainers leaves Apple with a net on the sessions themselves, I'm thinking Apple sees folks who want to pay for training as power users who will be buying higher up the line, getting interested in complex home networking and server or media creation tools, and will be good candidates for upselling on tech covered in the sessions.
Have you got some highlights you'd like to share, on what you got from the sessions? I don't know enough about them to speak good or ill on them from the customer's standpoint, and I'd like to know more.
Take care,
--Tex.
buyers?
Just kidding
I saw this at the ApplePeels blog, and thought it an interesting and recent comparison between the experiences on Apple's and MSFT's most current operating systems:
http://viewfromthemountain.typepad.com/applepeels/2008/03/a-mac-users-vie.html
If Vista pushes people onto standards-based tools that support off-migration without requiring it, we may see a slide in business toward platforms which have tried to make standards a priority (Macs, Linux) and which have worked to make the user experience pleasant (well, that might be just Macs).
I'm curious what Apple hopes to achieve with Safari, incidentally. Initially I saw it as a platform for enabling people to test Safari compatibility (and iPhone compatibility) from MSFT's platform, and as an opportunity to battle-test Apple's not-shipped-in-a-long-time Cocoa-for-NT (was apparently a NeXT technology). Was Apple hoping to fund Safari development with Google referral fees? Was Apple hoping to encourage developers to take Safari seriously as a target platform rather than relegate it to some mental niche for a user minority that might be safely ignored? Was Apple trying to build momentum for MSIE share erosion? There's a whole world of possibility. I'm not sure what Apple will achieve intentionally, and what Apple will achieve by accident.
Oh, wait: if iTunes goes Cocoa, Apple will need those Cocoa-for-Win tools to be really solid. Is a Cocoa iTunes in the works later? Will anyone notice or care? I'm thinking that for 64-bit (which on Intel chips has genuine advantages due to the history of the x86 platform), Apple needs to migrate the UI of iTunes to Cocoa, and that code maintenance might be easier down the road with a Cocoa code base, and that maybe Apple has a long-term plan to migrate more and more of iTunes to Cocoa -- and doesn't want to have a very serious MS-Windows fork. Maybe this necessitates a WinCocoa solution to be pretty bulletproof. If QT is going Cocoa, this might also be true: Apple technologies it wants to deploy on MS OSses will require Cocoa be solid, and Safari on Win would be a fairly low-risk way to prove the tech is ready for mass consumption before deploying something that's really important and potentially embarrassing to break.
My current thoughts on Apple are that while iPods might be kinda unexciting (a cash cow now, not a star; though Apple has growth opportunities abroad and especially in markets where Apple hasn't yet bothered to compete, like China and India, which are pretty big and have nontrivial middle classes), Apple's Mac business seems to offer solid growth prospects and the handheld MacOS platform could turn out to be very interesting as it is rolled out this summer (I hesitate to call it the phone business, though this isn't to be discounted, but I expect the camera to be made to behave as a barcode scanner and I imagine all kinds of apps to sprout on the device, which frankly at the iPod Touch's capacity is capable of pretty solid handheld work), and I think phone revenue sharing could be meaningful as Apple grows its addressable market through local vendor relationships in more countries. And Apple as a major app reseller? This might be good revenue. It'll certainly be a big place to see freeware offered by folks advertising their 133+ c0d1ng skillz. I think the transition from freeware app that is a category killer to a paid $2 app for v.2 will probably make some college-age programmers some good money. At $2, who wouldn't buy a nice app? Ohh, I have it. Games with additional level packages for $1 each. Oh, ho, ho! If you want the end of the story ....
Yeah. This will be a big deal for developers, and that will make the platform really attractive -- it'll have the best apps. Whether you want a handheld computer for music and games, or you actually want a phone, the handheld platform is going to hold serious appeal.
Next question: will iTunes allow foreign buyers to use credit cards to get the apps US developers offer? When will non-US developers get a chance to play? Will Apple start drowning in paid registered developers hoping to win the iPod Touch lottery?
This is an interesting time to hold Apple.
Take care,
--Tex.
'Millions of colors' suit ends
Professional photographers from California, irked at MacBook/MBP ads claiming the displays would show 'millions of colors' when the effects were achieved through software dithering, apparently had trouble finding class members who bought the notebooks for reasons of color range:
http://www.macnn.com/articles/08/03/26/millions.of.colors.suit/
A small class is presumably fairly cheap to settle with.
Take care,
--Tex.
3G soon?
3G before the 2.0 software update would be an unexpected but pleasant surprise in my view. Assuming the iPhone isn't experiencing crazy-high sales just now, to the point keeping them in stock is troublesome (a situation I doubt principally because Apple was able to keep them in stock during the real buying season at the end of '07), the idea that Apple is drawing down inventory in advance of a hardware revision is interesting and good news.
The possibility of a thiner lighter OLED display is certainly one thing Apple might do to keep the phone looking like it's a bright shiny fashion item worth a premium rather than a year-old phone folks should expect to find discounted.
In related news, a client could not find a document in court yesterday and I was able to use my iPhone to get into her webmail and look at the message to which it was an attachment. But, the story doesn't end well: the document was something like escrow_release.tif and was thousands of pixels by thousands of pixels, and it would not display. I think it may have been too big for the iPhone to try to digest or download. I could not see it. Her treo could see it -- but shrunk so small no text was identifiable and it was not possible to ascertain whether the document had been signed or if so by whom. Ah, well. We won anyway.
Take care,
--Tex.
re enterprise needs
I think Apple is starting to see (e.g., with iPhone in enterprise) that some enterprise support is part of making some sales. I'll be interested to see whether Apple offers an Apple-backed push email/push contact/push calendar event or whether Apple will tell people that if they want this functionality they need what Oracle calls a "virus exchange".
I'm sure Apple will get shamed into offering the functionality. The question is just how fast. As Apple builds more enterprise stuff (including for its own internal consumption), Apple's expertise in the field should grow, and its ability to deliver and support this stuff should get better and better.
Hmm. You don't imagine that to avoid this scenario -- internal enterprise expertise -- Apple has hired consultants to build its internal operations out of Oracle products, do you? I keep seeing evidence of WebObjects behind the Apple Store and I imagine Apple eating its own dog food ... but ... I wonder whether this is a wrapper around some other tech like Oracle databases that keep Apple out of serious enterprise work.
It's hard to say anything about the rate at which changes will happen, but with Apple offering (more and more) products that have no place outside enterprises, it's clear that at some rate Apple will develop the internal expertise to really offer interesting things. Like someone said about a different issue, though: faster, please.
Take care,
--Tex.
Virginia
Interestingly, this isn't school-bought/school-supported systems: this is student-brought, student-owned systems identified in "surveys of first-year residence halls." It appears to be a favorable a report on the effectiveness of Apple in selling to students before they actually become college students. The school hasn't had much opportunity to influence the purchase, presumably, other than perhaps to identify the list of supported operating systems or to let folks know about software they'll be required to use on campus.
The good news? They aren't chasing folks off non-MSFT systems with incompatibility claims, like some schools I know (when there was, in fact, no evidence of incompatibility), and broader use of standards has given MSFT competitors a foothold for competition.
I am going to guess that increasing student use of Apple products will have some reinforcing effects on the school's support priorities, including in its own hardware purchases.
Interestingly, the university's employees can get MS-Office (MS-Win or Mac) for use on a personally-owned machine for $10:
http://www.itc.virginia.edu/
http://www.itc.virginia.edu/licenses/campusobtain.html
(assuming you agree you're doing UVa work on it ... hmm, maybe Texas' deal for $20 and you can do anything you like on it is a better "deal")
It'll be interesting to see how this trend plots going forward. The charts depicting a trend from desktops to notebooks seem to have played to Apple's strengths, and it'll be interesting to see what plays out over the next few years. Speaking of corporate strengths, I noticed this on the page you linked with the OS chart:
[Mar 24, 2008 9:27] It has been reported that the UVa Exchange Service's Outlook Web Access is not sending mail. ITC is investigating this.
http://www.itc.virginia.edu/stuserv/ca/cainventory/compare/
... If MSFT's tools continue to behave for the next ten years as they have for the last ten years, competitors have a great opportunity to create migration tools and reliable alternatives. I'm guessing that MSFT is squeezing UVa for not only all the MS-Win boxes, but for licenses for all the Macs under the theory they can be used with BootCamp, which is now explicitly addressed in UVa's license agreement (which deals with, among other things, virtualization). When MSFT's demands get bad enough and the alternatives get good enough, organizations in UVa's position may consider site licenses for MS-Office without licenses for MSFT's OS, or the like. The cost for server tools is pretty steep from MSFT, and MSFT tends to license on a per-client basis (e.g., per email user) in addition to the cost for the server. I expect eventually the quality and convenience of the competing systems will lead to a crack in the exit barrier, with the exit driven by price.
I happen to think the next few quarters have some good news in them for Apple: iPhone-related (apps, app sales, enterprise apps, enterprise adoption, foreign iPhone deals, etc.), back-to-school related, and holiday/hardware related. I'm loaded up and am not planning selling anywhere soon.
Of course, we still need some semblance of rationality to prevail in enough of the market to make any good news useful in creating favorable pricing. Or maybe we just need the same craziness, but on the manic upswing For my part, I'm betting Apple continues to provide fodder for folks looking for excuses to become giddy about its future.
(This, while remembering that Apple can take only so much hardware share before competing for market segments that are less profitable. If Apple gets 25% of the notebook market dollars in return for 16% of the notebook market units, it's clear the situation is only good for so much growth in the US. We might want to look for either a reason to believe Apple's got its stuff together abroad -- and is thus safe to hold -- or a reason to believe we've seen what Apple can do and get ready to pile out during a holiday-time party over Apple's inevitability to hit 350.)
Take care,
--Tex.
Fun With Safari
Complete with a demo, the HTML5 parts already implemented in Safari are pretty darned slick. I'm using Version 3.1 (5525.13), and I get the client-side database functionality. This stuff makes web apps vastly more powerful as a concept, and makes offline work and work with intermittent connections a lot more plausible.
announcement:
http://webkit.org/blog/126/webkit-does-html5-client-side-database-storage/
demo:
http://webkit.org/misc/DatabaseExample.html
Now, to cache the key pages you need so switching from Safari doesn't kill your work on, say, a document. Or a multiplatform data-management app. Verrry interesting.
Take care,
--Tex.
more pontification following reported February NPD numbers
"Consumers Will Continue to Buy Apple's Fashionable Gadgets"
http://seekingalpha.com/article/69478-consumers-will-continue-to-buy-apple-s-fashionable-gadgets?source=side_bar_long_ideas
This, on the heels of Shaw Wu describing Apple's business as recession-proof on the strength of the same numbers. Wu also seemed to think NAND and other component prices would push margins up a point or so over earlier projections.
http://seekingalpha.com/article/69448-strong-mac-sales-cheap-nand-should-boost-apple-amtech
My question: if the dollar sucks so bad, how is Apple getting this great NAND pricing from foreign vendors? Long term dollar-priced contracts? A psychic degree of currency hedging?
At any rate, it seems like the story to follow is whether the report of the NPD numbers is accurate, and then, whether this represents a trend that will continue. A quarter of the notebook market by dollar volume is ... well, it was hard to imagine not long ago. Since the PC market is not apparently imploding (HPQ doesn't seem to be off badly, and it's one of the few boxmakers that like Apple has some actual IP to offer, so it is a sort-of comparable in my book, though admittedly its IP is mostly directed at the enterprise and to the printing market, and it's got a big commodity beige box business running MSFT OSses), wild growth in the share should be reason to be fairly ecstatic -- though I suppose rebounding from the neighborhood of 119 may legitimately count as ecstatic soaring in someone's book.
The question I have for Apple is whether people's focus on iPods and phones will cause this to get swept under the run with a headline like "iPod growth slows" or the like. I mean, duh. Where has US share got to go? Growth has to be in other markets, or to new consumer segments, or the like. In the iPod business. In the other businesses, Apple has a ton of headroom.
Between Apple's growth in February (if the number isn't a hiccough but a real indication of Apple's future share) and the likely Apple products that can be sold and cross-sold into the enterprise market following the 2.0 release of the iPhone's software, there's quite a bit of sales Apple can get just from the US market. And Apple has the rest of the world to approach, beginning in all likelihood with global companies demanding one-stop global solutions for certain hardware and software. This is a place, I think, in which Apple probably can be led by enterprise, and will be led in the right direction: toward global growth.
Has anyone seen anything about the reported NPD numbers that serves as a confirmation? Everyone seems to link back to AppleInsider, which isn't the same as The Economist. I'd like confirmation this is real news.
and: Happy Bunny Day!
Take care,
--Tex.
re performance
I would think that the doubling of RAM would be very helpful, as it would reduce the paging to disk that often happens when big media projects are open.
On the other hand, it's worth pointing out that Apple's ability to do developers favors by optimizing parts of Cocoa that can take advantage of hardware-specific acceleration (e.g., the frameworks related to vectorized math, and after the new text extensions go into the Intel processors, all Cocoa's Unicode processing functions including the string compares, sorts, and so on) exists only to the point developers are using Cocoa. To the extent they haven't made the jump to Carbon (and frankly, the only folks doing Carbon seem to be folks with pre-MacOS X code bases, like Adobe, MSFT, and let's not forget Apple itself), they will be stuck with the logic and the calls their code actually makes based on the code and compiler they had the date they froze their app for shipping.
Cocoa developers will get free hardware acceleration of their code's text, graphics, and other functions just as fast as Apple builds this stuff into Cocoa -- and since this will be a major selling point for the new processors (and of Cocoa) I give good odds this is sooner than later.
As Intel keeps changing its architecture, I think the question should be not about "Intel-optimized apps" but "apps that are so current they know about the hardware that just shipped" -- and that list will be pretty short outside Cocoa developers, unless compilers figure this stuff out and sub in the right instructions for the new acceleration ... but even then, with non-Cocoa apps, you need a recompiled version from your vendor to get the benefit.
So my big question is: when will someone write a Cocoa image manipulator that has the breadth of tools offered by Photoshop? Given the time Adobe has been writing image manipulation tools, is this something that's even plausible? Or does the existence of image manipulation modules for things like CoreImage make it really likely that a Photoshop-killer can be assembled, if not by one developer, then by a developer and a marketplace of image plug-ins?
The new memory architecture coming out the end of the year has me really excited now, and I know what machine I'm waiting for. I'll have to pick between Mac Pro models, I'm sure, but I think that's where the Intel chips will first arrive.
Take care,
--Tex.
costs vs margins
Yeah, foreign store's costs are also in inflated local currencies ... but ....
Assuming all the costs and revenues are in local currencies, and assuming one expects prompt profitability on the basis of past performance, I'd think that one might simply look at the size of the expected profits, and pick sites where one would have both strong market research (i.e., best profitability in local currency) and not-too-abysmal taxes (e.g., as little higher than US taxes as available) -- however, since Apple need not choose either/or and can do both, the question is why Apple would pick one place over another.
I think availability of training is likely a potential bottleneck in new store rollouts, and a reason the US is easiest and the UK easier than France of Germany. In the UK where stores exist, it's easier to get folks trained in real Apple Stores than in countries where there's no store.
There may be some more sophisticated time value of money considerations to bring to bear on the cost of opening stores abroad, but I think the fact the stores are highly profitable suggests that strong foreign currency works in Apple's favor.
Take care,
--Tex.
re UK stores
Apple was in the UK earlier, and Apple probably has been doing homework on the locations earlier. I'm sure Apple has plans for good locations in other countries, but just not announced plans.
I'm not sure who Apple has working on the site locations for Apple, but it's got to be easier to handle foreign issues when the language there is the same language understood by top management.
It's also possible that Apple enjoys the local tax rate. Corporate income tax in the UK is 20%. While Apple faces US taxes because of its US citizenship, a foreign tax higher than US taxes bites a bit harder (doesn't wash out in foreign tax credits), so the payoff is better building stores (and sales) where taxes will be lower, than building them where taxes would be higher.
Just a thought. Still, I like seeing stores open where the currency is more solid than in the US
I wonder how much is consumed in corporate managerial attention in Cupertino when a store is opened. I'm guessing not very much ... there should be no competition for resources limiting store opening rate other than perhaps the capacity to train employees properly. The bottleneck surely isn't capital, the company is swimming in cash :P
Take care,
--Tex.
re performance of iApps
I was looking at the Intel roadmap document, and its associated whitepaper, and the new instruction set extensions to the late-'08 45nm chips, beyond the existing SSE4 instructions, include instructions specifically geared toward handling strings (XML, unicode) for low-power, high-speed handling of bigger-than-one-byte character operations, sorts, compares, etc. I'm going to guess that some of the iApps have not been given a serious dose of manpower for optimization, and that the presence of this specialized kind of instruction may be the kind of thing that causes Apple to rework its implementation of string-handling functions throughout Cocoa.
With Cocoa being a run-time-linked environment, the frameworks Apple jazzes up to handle the new instructions will give existing apps (all the text processing applications that rely on them) an effective upgrade -- and could change the places in the apps that are most deserving of optimization. I wonder to what extent Apple's knowledge of Intel's roadmap may have impacted performance-tuning decisions (e.g., the decision not to tune).
I find it interesting that the things that "feel slow" on my iMac G5 all seem to turn on display issues. I wonder whether the new hardware would change my view on how pokey this all is. I suspect Apple's new apps are developed by guys on 4- or 8-processor rigs. Though, in fairness they should be writing stuff for the case of 2 processor cores, since that describes their largest market segment (notebooks and iMacs). With the release of the new Intel chips, we won't see 4-cores all the way down immediately: the price on one of those suckers is expected, apparently, to be $1500. I don't know if this is the price in lots of 1000 or what, but it makes the iMac and MacBook look implausible. Whether there's room for this wizardry in a MBP ... well, that'd be fun to see.
Meanwhile, I've now got a new feature over which to salivate: the new FSB-less point-to-point controller system, whose throughput should rock the casbah. I wonder if this kind of tech will appear in the ultraportable market, and make I/O from compact flash storage ridiculously fast. Ahh, well.
Take care,
--Tex.
iPhone Flash
Remember that Adobe statement on Flash being whipped up soon for iPhone? Not so fast:
http://www.macnn.com/articles/08/03/19/adobe.flash.on.iphone/
... Flash's close relationship with the browser means Adobe needs Apple cooperation to pull off a better plug-in, and that mere possession of the SDK isn't enough.
Interesting possibility: Adobe wants on the iPhone enough to promise to make a really good Safari/MacOS Flash client, usable on the desktop as well as the phone, so Flash behavior will be better, perform better, etc. Might this work?
My own question is how to make Flash content behave properly in the face of lack of mouseover, etc. -- though perhaps fingers that aren't taken as taps would be interpreted as mouseovers, etc. Might not be fatal. Does Flash require right-clicks?
With Flash going H.264, one wonders what Apple's objection would be down the road if not simply that it wants to try to own the platform.
Speaking of platform, Gartner now greenlights iPhone in enterprise as an "appliance" but not as a "platform" -- apparently, there's some doubt that the tools will behave as expected, and Apple is the sole source for hardware, and T the sole source for phone service. Ahh, well.
Take care,
--Tex.
re iWork pricing
I really wish that they'd just go ahead and start bundling it with new Macs like they do with iLife.
Well, they also sell iLife. The computer generally outlives the version of iLife that one gets on the machine. There's no price break for "mere upgraders" -- everyone pays full fare. So I would argue they are selling iLife, and I can't imagine Apple isn't making a pretty penny on it. I mean, iPhoto 1.0 sucked so bad (performance wise, anyway) that everyone was dying for something less painful (this is starting to sound like my criticisms of MSFT-ware, hmm, I'll have to think about that), and I know lots of folks who shelled out to get that update and garage band.
So, as for iWork: if it's true that Apple has taken over ten percent of the office suite market from MSFT with iWork, then Apple is making good money. You can't believe Apple actually has so many people working full time on Pages that it isn't a total cash dowsing rod, do you?
My personal feeling is that since Apple's products look so much better, and offer the promise of better integration (services, etc.) with native Mac apps, I would rather Apple see the products as a winner that deserves the investment in improvement to grow share and profits than I would like to see a copy bundled on the next Mac I buy. The truth is that I'd rather have the apps good than cheap.
What I'd like to see is Apple slowly building a suite that really is good enough for most people to do without MS-Office. Then Apple would have a much better pitch for migration. I have the sly fantasy that experience implementing ActiveSynch will teach Apple what people really demand from email, schedule, contact, and other enterprise apps so it can build a better mousetrap ... with a migration tool. I mean, if I'm going to light up, I'd just as soon smoke the good stuff, no?
Was iWork launched as a replacement for AppleWorks? I recall paying for AppleWorks. I have a box, still, from a copy I bought for MacOS 9. I gave some grad school presentations using it. Keynote is slicker-looking. Keynote was worth the entry fee. AppleWorks had a terrible spreadsheet, utterly unable to support use of workbooks brought over from MS-Office. AppleWorks was, to my thinking, an advert for MS-Office. iWork actually is pretty, and when you use it you catch a glimpse of what the future should look like. Then you try to get the autonumbered outline bullets to match the font of the text in each of the paragraphs and as you troll through the help files, you slowly realize you're not missing the place to set some mysteriously hiding preference, the problem is that these guys never actually tried any of the features they implemented. Pretty soon, you don't even bother to look whether there's support for making tables of authorities or glossaries or the like, you just figure if you need to make a real document you need a real word processor instead of a consumer layout engine.
What I would like to see is Pages become a real document tool and Numbers become a fully serviceable spreadhseet application (yes, I realize it was intended only to create tiny little charts for Keynote, but if you expose huge sheets of cells people will expect them to function, duh). I think the movement on Keynote shows Apple can turn pretty into serviceable. Maybe I should start leaving feedback instead of walking away. Hmm.
On the other hand, Numbers seemed snappy on the newer machines at the Apple Store. Maybe I'm overstating how abysmal the performance is on Pages and Numbers, since I'm on a G5 iMac. I kinda doubt it, though.
Take care,
--Tex.
re enterprise swapping
But I find it hard to believe big corporate installs would consider swapping out the mission-critical MS Office suite for Apple's iWork
While there are some Apple products that I think make interesting fodder for discussion of enterprise plays, I don't think iWork is there yet by any stretch. I was thinking that the home user, who hasn't got a site license, might benefit from a family pack that does Mac and Win and will support him as he transitions at home. This idea could be applied to the single-seat license that would install on either Mac or Win with the same key. The home user might have less need for some of the things iWork won't be able to do by the next version or two, and might accept iWork as a good-looking and affordable alternative to costly MS word processing, presentation, and spreadsheet tools. I'm guessing that by next version, Numbers will suck less. Most home users don't make documents with the features that make me wail at Pages, and Pages output should be prettier (or at least, closer to what you thought you were getting).
The Unix theory of applications, that tools should do one thing and do it well, is reflected in Apple's separate calendar and email apps; the Leopard behavior of letting folks select dates in emails for making calendar events is a good way to patch up the separateness. It's worth pointing out that Apple did not go this way with iTunes: it was a jukebox with an electronic video accompaniment (remember that demo? that was a real feature when it was bought from Cassaday & Greene (sp? RIP.)) and it encoded your CDs, but now it's the synch tool for portable players and an online music store and a tool for downloading your school's lectures and it activates your phone and ensures your email and contacts synchronize and soon it will sell you software ... oh, it already sells software for iPods, and soon it will sell software for your phone and the iPod Touch too .... It's obvious one can have "success" with either the monolithic (iTunes) approach, or with the specialist approach (Apple's pro apps aren't one big monolithic juggernaut with a zillion plug-ins, they are a film editor, a DVD encoder, a film clip library, etc.; and Keynote's progress shows Apple can make tools useful, and I'm hopeful that the disgrace that is a big Pages document is straightened out eventually and that Numbers will be re-issued in time in a form that will allow real datasets to be crunched in it). It's not obvious that Apple's tools are fit to be called specialists yet, as you ably point out.
I have some concern about web apps, but perhaps those concerns will be fixed by improvements in offline tools to enable web apps to continue behaving (and saving, etc.) when people are unable to connect (or unwilling: battery life, data security, etc.). I didn't buy iWork because I was keep to send money to Apple, but because I like having slick presentations and Keynote and iLife made this really feasible, while traveling, on the fly, with heinous time constraints. I'm hopeful that Apple's revenues convince Apple further development and improvement is warranted.
Clearly Apple's energies have been directed to the iPhone platform and the core OS. Frankly, it's hard to see the roadmap for web services (.Mac), iWork and iLife. Doesn't seem to be much vision or strategy there.
I'm with you here, at least partway. I don't see what Apple hopes to offer with dotMac other than remote prefs synching and remote backup for some miniscule fraction of what people create, and my experience with dotMac years ago was that backup just ate the dirt under the horse's excrement and did it with bad mayo. I think Apple has a nice little business getting people with more cash than savvy to pay for super-slow-delivered email, and as a shareholder I can sorta almost respect that, except that I have this inkling that Apple should really be building a quality image everywhere it raises the flag, and I don't think dotMac is it. For this reason I was pissed at Apple over the behavior of Pages on 50-page documents. They should have called it "Page" to make sure you didn't think the tool was suitable for multi-page documents. My slight experience with Numbers is that while I was able to make it do some of the simple things I make Excel do, it did these things sloooowly. I have a copy of Office:Mac 2004 (with the cheap Texas $20 or so license, it's legal, but it was cheaper than iWork) or so on this same iMac G5, and it seems snappy in comparison to what Apple delivers atop its own OS.
I think iLife has an important role to play in getting folks' gadgets attached to their computer. My camera is worth more because of a working version of iPhoto. My iPod wouldn't be worth much without good synching with my music. I would not bother to own a video camera if not for iMovie's power to allow me to make something viewable and fun out of the great mass of stuff that one collects when the green light is blinking. I think iLife should continue in this way, offering a free-with-every-Mac tool that makes the Mac the center of gravity for all the household electronic gadgets. This was a great strategy. Watching me edit movies on the Mac sold a client a Mac, and it also sold me my next video camera.
I think iWork is a work in progress. Apple knows there's demand for presentation software, and Jobs thinks .ppt is uuuugly. Jobs is right-on in this. Therefore, I expect Keynote to get the most attention. However, Pages ... needs serious help. Numbers is, so far, a toy -- though I will make a point to experiment with table/graph functions to see if I can spice up presentations with its output. I think the prospect of linking Numbers and Keynote to allow beautiful and interactive presentations might have possibilities, for example. But mostly Apple needs to get some folks who make documents for a living -- maybe they should scare folks out of the legal department to give feedback the next time they need to make a brief -- to demand the features real users need. Apple needs some users who really hammer the tools to give feedback. I think one reason Apple's dev tools have gotten better is that they are used by folks who demand a lot from them inside Apple, and the company can churn out improvements that make users' lives better. Apple needs to direct this attention to its revenue-generating applications that it is making from scratch, and not just the ones it bought feature-complete and about which it's been reading $999-buyers' comments on what they would like the next time they buy a seat license (or ten).
I think Apple's OS work has been great for Apple -- and it will continue to give Apple an edge as Apple switches iPhone architectures (users may never notice), and as Apple moves to increasingly newer Intel hardware in its main line of computers (though as units increase in iPhones, Apple may end up shipping more MacOS in phones and iPod Touch units than it does in computers ... does it already), Apple will be able to push those benefits through to users via its work in run-time-linked libraries that will keep improving underneath all the shipping apps from all the developers on the platform. I don't think Apple will be able, without threatening its hardware sales, to offer an OS as a stand-alone product outside the upgrade environment, and I think Apple is therefore unlikely to do this soon. Thus, Apple's software sales business seems to depend on getting right things like iLife (also an upgrade), iWork (which gets better as its components get better, and as integration with other tools gets better), and even that old dog I gave up on years ago, dotMac. I'm not sure what Apple really could offer with dotMac (multiple machine pref synching? Is that really cool? I know some developers who have taken advantage of it, but do any users?), but for one I'd sped up that glacial mail delivery. It gives Macs a bad name in servers :P
Tex, I like the direction you're thinking, and your speculation on Safari as trojan horse for Cocoa on Win is interesting.
I sure would like to think someone in Apple has a plan to make good on this. I don't see it soon, of course; what would Apple offer now? iLife is all tied into drivers and OS-level functions and performance and Apple would drown in support headaches because folks' drivers for their cameras aren't working with their such-and-such OS version on their so-and-so motherboard and the thus-and-so controller chipset. iWork isn't ready to be shown to any non-fans, except Keynote is pretty (but how will its performance be on Win? Usable? Does Keynote depend on an OS that prioritizes certain things in ways Apple's Cocoa DLLs might not be able to ensure on Windows?). Apple doesn't want to make pro apps available on Windows, it wants to sell Macs, and most of that stuff was bought from Win developers and won't run in Cocoa anyway, it's all Carbon.
Oooh, there's a thought. With 64-bit UI all being Cocoa, what will become of the pro apps Apple bought from third parties? Will iTunes go Cocoa? Final Cut? Will they stay 32-bit and lag in performance because Intel's 32-bit setup has fewer registers and thus worse performance? Will Apple have to lead the way on Cocoa-izing old apps, or will Apple demonstrate to the world it's not worth eating the proffered dish?
Curiouser and curiouser.
Take care,
--Tex.
PS anyone care to guess where Safari-related Google search revenue shares might show up on Apple's financial statements? It'd be nice to be able to track how significant this revenue is. Particularly as iPhone users seem to dominate web use, it may be that Google and other search referral revenues become a meaningful revenue stream over time. Measuring this, of course, requires knowing where to look ....
Looking ahead
I was reading on Intel's processor roadmap:
http://www.betanews.com/article/Sixcore_Intel_processors_coming_this_year/1205790710
The interesting features seem to include simultaneous multithreading on each core (not just the pretense of it that is currently available), plus designs that seem to encourage 4 and 8 core machines in the consumer space (well, and memory enhancements like onboard controllers and point-to-point no-bus-contention architectures that seem likely to be good for anyone, but that's beside my point on how this impacts Apple's competitiveness).
My thoughts on the move toward multicores ...
... Years ago when NT was still selling, adding a second processor to an NT box yielded a performance gain that was, perhaps, 40%; if MSFT's products haven't gotten much better, then Apple's designed-to-love-multicore systems will have a significant performance edge in the world Intel is building, and I'd expect to see bake-offs (maybe not in a Stevenote, but elsewhere)
... Apple's tools make it easy to take advantage of multiple cores, and Apple's OS has been increasing in the fine-grained-ness of its in-kernel locking to enable more kernel threads to be running at once, to prevent contention for kernel resources; between Apple planning for the future, and Apple's developers making multithreaded applications that message each other instead of huge hulking monolithic apps, the environment Apple has created will be well-positioned as the world necessitates higher and higher core counts
... the gaming features we saw displayed at the SDK announcement (3-D sound? hello, who but gamers need this? how often do you expect iPhone users to need it? This is so obviously a design decision intended to prepare Apple to expose top-notch game development platform ...) should make it possible for Apple, using things like MacMini and all the way up to the pro desktops, to offer a heck of a range of gaming tools for folks who want to experience as much game as they can afford to have delivered to their sound system and screen ...
... novel competitors to Adobe products might have an edge compared to the competitors to the MSFT products, since Adobe's products tend to output standard formats (PDF, TIFF, JPG, etc.) and MSFT's products' claim to fame is interoperability with opaque, poorly-documented file formats access to which has been traditionally spotty ... so while Adobe has a potentially tough time moving into the new era with zillions of lines of code, the barrier to entry is higher for a MSFT competitor, for whom (a) output will be harder to match and (b) performance will be less material, since most users of the Office suite aren't doing anything as computationally demanding as users of Adobe products ...
This brings me back to my speculation on Cocoa-on-Win. Apple might be able to bring it's own apps (not necessarily support others' development atop the DLLs it delivers) to MSFT customers to show them what they're missing, and show them how they can pay Apple money while saving on the cost MSFT would demand for possibly-fuller-featured products that don't look as good and whose extra features may not be in genuine demand by much of the user community ... thereby advertising itself to Win users, monetizing a market to which it had little exposure (QT Pro?), and generating revenue (what fraction of Win/Office seats would Apple have to replace at $75 to dwarf Apple's iWork revenues from Mac users?).
At the moment, I don't see a reason for Apple to launch anything like a declared war on a MSFT cash cow like Office, but there's ample reason to think that after Apple has had some time to battle-test and improve its offerings to the point that they aren't shameful next to MS-Office (Performance on Keynote 1.0 was ghastly compared to MSFT's less-pretty product, and on Numbers 1.0 it still is), Apple might try tempting folks with licensing terms that would encourage migration to the Mac (e.g., one price for Mac or Win installation, same code to support your Mac's copy when you migrate, etc.).
In the meantime, I'm interested to see how the rest of the quarter does after the report of the crazy-high February Mac numbers. I think WWDC will support quite a few iPhone sales, which will be good anywhere Apple releases the 2.0 software. Hmm. Will international enterprises be able to install their apps on iPhones worldwide notwithstanding iTS' limitation to the US market at launch of 3rd party apps? This may be interesting ....
If Apple's current quarter is as the last Mac sales report suggests, this will be one very exciting year. If MSFT hasn't been keeping up on multiple processor performance in its software, the next few years will really rock the casbah.
Take care,
--Tex.
re IPO sale
Are you allowed to turn them around this quickly? I was under the impression from prior IPOs that dumping IPO shares could get one blacklisted from future IPOs.
At any rate, that was a nice, nice return there!
... my question is whether I should join the fray. Are you looking to add back to your position, or was your plan to sell half during a post-commencement-of-trade runup?
Take care,
--Tex.
Congrats on V em.
what price V? em.
silly Cocoa portability idea
Suppose Safari were considered not so much as a campaign to get Google referral fees from Windows users, as suggested, and had a greater purpose than enabling inter-browser compatibility checking. Suppose Safari were intended to beta and battle-test Cocoa on Win32 (or whatever the API is now called). As MS-Office continues to be pricey, and there are apparently a non-trivial class of users who are satisfied with Apple's nascent office suite, and especially as MSFT opens an API licensing scheme for accessing MSFT's proprietary file formats, perhaps Apple is readying a launch of a sub-$100 office suite for the larger market.
Keynote looks really slick. I'd think Apple would want to capitalize on this, especially as computer-driven presentations have become so ubiquitous. I assume off Apple's own platform, it's harder to control what shows up on which screens, but I'd think this might be a market worth looking at.
Upgrade revenue, advertising for Apple's broader range of products, profit off non-Mac users ... it seems fairly attractive to me.
Anyone got thoughts on this?
Take care,
--Tex.
re Numbers and Share (oops)
I read the wrong row, sorry. I thought the US Retail row also was Apple data, when there's a row above it for Macs in US retail; I was reading about desktop declines in the US market generally, not for Apple, but misunderstood. Apparently, while desktops in US retail were down, Apple had a >50% gain in both units and dollars. Boggles the mind, no?
The interesting thing I noticed was that while Apple purportedly has a 14% share now in units, it's got -- allegedly -- a 25% share in dollars (up from 9% units/16% dollars in Feb'07). Apple is apparently able to pick off the best part of the market for this growth, something that the US market for computers isn't able to do as a whole (US retail is listed as up 9% in units but only 5% in revenues, an indication of expansion into the realm of diminishing profits). The chart is here:
http://www.appleinsider.com/articles/08/03/17/apple_snags_14_percent_of_us_based_pc_retail_sales_in_february.html
Curiously, Apple is set to pass WalMart this year in music sales, with physical media vendors feeding a negative cycle of reducing inventories as sales decline, which makes it harder for shoppers to find the albums they want, which reduces their purchases. Apple meanwhile is always in stock, and the gift cards are everywhere. http://www.ipodnn.com/articles/08/02/27/itunes.to.beat.wal.mart/
Meanwhile, on the high-margin/low-cost front, Apple has hit double-digit share in the office suite space on the Mac, with 16% of the market (the rest is held by MSFT products). http://arstechnica.com/journals/apple.ars/2007/12/05/iwork-makes-a-small-dent-in-mac-office-market-share ... In MSFT's defense, iWork's spreadsheet is glacial on my iMac G5. I have an old copy of MSFT's suite on my Mac, bought for under $20 through a State of Texas site license program open to folks enrolled in a state school, and I was planning to avoid upgrading it, like, ever -- but of course they have a new file format now that nobody's tool can read. Do I hear a chorus of groans?
If Apple can get its tools to run better (and not just look better, which is nice, but ...) it's clear Apple has a product that people will accept for lots of purposes -- especially at the $79/$99 price point Apple's offering. Maybe Apple can license MSFT's APIs for document interchange and provide a migration tool for folks needing to talk with customers of the Beast. Knowing how those tools have worked in the past, though ... I doubt it.
Take care,
--Tex.
re equal to Q1
Who heard of an Apple Q2 number that looked anything like an Apple Q1 number? Up sixty-something vs the same period last year is quite a bit higher than guided, and with Macs such a high fraction of revenues and profits, it seems it should be a nice figure to average into the quarter even if the months bookending February aren't better than forecasted.
I was prepared for ho-hum numbers until the iPhone 2.0 software. This would be a nice treat, if it proves out. Even reducing it to reflect retail-only seems to leave a nice bump -- and if the trend isn't limited to retail, all the better.
The next question is what hardware was leading this Mac sales bonanza. According to the reports, it's not Air. Is it iMacs? This link suggests it's notebooks:
http://www.appleinsider.com/articles/08/03/17/apple_snags_14_percent_of_us_based_pc_retail_sales_in_february.html
Interestingly, I can't find any posts regarding January NPD data on computer sales. Do they normally announce by month, or by quarter, or ...? The article seemed to be pretty specific about the gain addressing only February, though of course March isn't in yet.
Of course, in January we had things like waiting-for-MWSF and consumer fears that seem higher than now.
Take care,
--Tex.
wowsers. em.
re iPhone
That's a great link, and helps explain both the likely result of numerous net-aware apps trying to poll the network off one phone ... and the likely solution (queueing for notification the network is up, for doing work while it is up).
There's always the question how Apple's device will handle the user desire for GPS-like behavior -- but hopefully Apple solves that with, like, GPS. The current location tool is, in my experience, weak -- it gets me inside the circle about half the time, and even then not particularly near the middle.
I think Apple won't be stealing business from Garmin any time soon. However, with Core Location abstracting away from apps any knowledge of Apple's location determination procedures, Apple is free to add all kinds of whizbang things without rocking the boat. I fantasize about an Apple-involved in-car dash system, techniques to take advantage of a car's GPS, and even an Apple-supplied in-phone GPS. My own car's in-dash system is terrible for maps (awfully out of date on the day it was delivered) and has an awful UI and desperately needs Apple to deliver Google's content to me. Ahh. Too bad that's just a dream at present.
Take care,
--Tex.
re Flash
The fact that Flash is kind of a bad actor, assuming it can eat unlimited CPU, makes it rough on mobiles. Possibly a bigger reason for Jobs to resist licensing it is that iPhone, while a minority of the handset sales, appears to dwarf other platforms in actual online use -- making Apple possibly of the opinion that it can pull the web toward iPhone rather than having to accommodate the web's use of proprietary codecs.
Honestly, I would not miss Flash if it disappeared. If it's true that the codecs involved are bad (performance, efficiency, etc.) then all the better -- HOWEVER, Flash now supports H.264:
http://blogs.zdnet.com/Stewart/?p=652
... so the question is, does Flash performance depend on something besides a misbehaving codec, or is this more about politics? Will codec licensing push people onto H.264 and away from the other codecs over time?
Will Adobe create and demonstrate a Flash plug-in that is a good citizen on iPhone, or the Mac generally?
Interesting stuff. Personally, I've seen so many bad UIs in Flash that I can't really say I'd want it on an iPhone if I had an alternative.
And what about Java? Is that dead, too? Or is it a matter of getting it to perform well and play well with others without Apple having to support it? Will Sun development of iPhone JVM mean a better MacOS X JVM?
How the world has changed -- Apple migrates Cocoa to Java to lure developers on, Apple deprecates Java/Cocoa, Apple nixes Java on iPhone ... how the parties' positions have changed in a decade.
Take care,
--Tex.
re 25bp
Honestly, there's a limit to what they would be able to cut before they paid people to take the money, no?
As a percentage of the total rate, I think even modest cuts should look pretty big about now, though perhaps that's not the view anyone's taking.
I'll be looking for irrational fear in financials today, to try to find entry points in companies I don't think actually have exposure to further surprise.
Take care,
--Tex.
Nike offering iPodless Nike+ (this one's for Lango!)
Cost: ~$95:
http://www.electronista.com/articles/08/03/15/nike.sportband.unveiled/
What does Adidas' solution cost? How does one synch the Nike+Sportband?
Take care,
--Tex.
re not sandbagging
I think there's definitely near-term downside in the event of a miss (even a miss of numbers above the projected ones), but ...
... then they sandbag the next quarter and blow that out of the water:
http://www.apple.com/iphone/enterprise/
(Enterprise beta will help Apple actually deliver what it claims -- and will get enterprises used to dealing with Apple and show them how Apple actually responds to bug reports, which may be a shocking change from some of their other experiences.)
I'm kinda curious what the count is like for developers who want to build iPhone apps. The 100k download number is fun marketing, maybe, but there's lots of not-serious folks who might download it for various reasons, and at $0 it's not like there's much cost of entry.
Take care,
--Tex.
Which hall of fame?
The Vulcan Hall of Fame, perhaps?
Take care,
--Tex.
re large-capacity iPhones
It's interesting Apple would not even make the thing available at low volume in other countries. I certainly believe channel-clearing would explain shortages ... but ... this far in advance of the 3G phone? Don't they expect some of those high-capacity phones to sell in the intervening months?
I was only mentioning high-density flash parts because it was blamed in the article I linked. I've toyed with some other explanations for Apple being unable to supply the phones but I don't like them. I'm not sure why Apple would not sell the larger iPhone.
Is the report just not true? Are iPods available at all sizes?
Just curious ...
Take care,
--Tex.
high-density flash constraining iPhone supply?
16GB units apparently not available internationally, and have weeks of wait in the US:
http://www.macnn.com/articles/08/03/14/16gb.iphone.shortages/
Take care,
--Tex.
PS with the dollar in the toilet, why not make those sales available in €/£ countries?
CNBC: Apple entering enterprise
From their lips to God's ear:
http://www.cnbc.com/id/23633514/site/14081545?__source=yahoo%7Cheadline%7Cquote%7Ctext%7C&par=yahoo
Maybe the IT track at WWDC is intended to fuel this. Hope so. Between Leopard Server's apparent nod to intranet offerings and the iPhone's apparently upcoming support for enterprise, Apple may begin to look interesting to the back office guys.
Incidentally, yesterday I sat in on a friend's law school lecture on medical/legal issues, and he forgot some slides. I was able to bring up on iPhone/EDGE the image he wanted to display, and passed it around class. Some folks could be seen to entertain themselves turning the phone to see the image rotate. The device definitely has some "whee!" factor to new users. The image was good and crisp.
Take care,
--Tex.
OT re big five
Thanks.
I bought some GS over a year ago (~196) when I thought diversifying into financials would be good for the health of my AAPL-dominated portfolio. Heh, heh.
At least ACAS has a fat dividend to keep me company. I'm holding pat on the financials -- I think the ones I'm holding have been tarred with a brush inked for some other companies, and aren't really "worth less" they're just cheaper for now. I expect that with business, fees, managed assets, and so on all growing that GS, MKL, ACAS, and others will be the long term winners I originally thought, though it's a drag to see them go on sale after my purchase.
I had a relative buy a bunch of ACAS under 30 in January, and that's looking smart. Too bad it wasn't my own money
Take care,
--Tex.