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Do think Symantec might have an agenda with its OSX virus warnings?
I think it's just sour grapes. Their position is like that of a moribund Maytag man.
4 years, ZERO documented viruses.
So did I, about this time last year...em
Fun stuff - skins for all your gear:
http://www.skinit.com/
Use their designs or upload your own image.
The owners came in today to buy a PowerMac and all the trimmings, saying they'll be back Monday for another one. Looks like business is good for them.
Another reason to love this particular site:
http://onegoodmove.org/1gm/
High quality QT clips galore of the good, the bad, the ugly in the news.
CPU sales still healthy, but we often lack high-end units (dual 2.7, 20" iMac). iBook shipments nowhere near keeping up with demand. Don't know if it's our fault or Apple's. Apple apparently back to the bad old days of stonewalling the channel.
No Nanos here yet, been out of 20 & 60 GB models for a couple of weeks.
Insert frownie
Why oh why did they smush a BLACK nano? They are going to be harder to get than hens' teeth.
The goal is obviously NOT to save lives. And we shall punish those who do:
September 7, 2005
Navy Pilots Who Rescued Victims Are Reprimanded
By DAVID S. CLOUD
PENSACOLA, Fla., Sept. 6 - Two Navy helicopter pilots and their crews returned from New Orleans on Aug. 30 expecting to be greeted as lifesavers after ferrying more than 100 hurricane victims to safety.
Instead, their superiors chided the pilots, Lt. David Shand and Lt. Matt Udkow, at a meeting the next morning for rescuing civilians when their assignment that day had been to deliver food and water to military installations along the Gulf Coast.
"I felt it was a great day because we resupplied the people we needed to and we rescued people, too," Lieutenant Udkow said. But the air operations commander at Pensacola Naval Air Station "reminded us that the logistical mission needed to be our area of focus."
The episode illustrates how the rescue effort in the days immediately after Hurricane Katrina had to compete with the military's other, more mundane logistical needs.
Only in recent days, after the federal response to the disaster has come to be seen as inadequate, have large numbers of troops and dozens of helicopters, trucks and other equipment been poured into to the effort. Early on, the military rescue operations were smaller, often depending on the initiative of individuals like Lieutenants Shand and Udkow.
The two lieutenants were each piloting a Navy H-3 helicopter - a type often used in rescue operations as well as transport and other missions - on that Tuesday afternoon, delivering emergency food, water and other supplies to Stennis Space Center, a federal facility near the Mississippi coast. The storm had cut off electricity and water to the center, and the two helicopters were supposed to drop their loads and return to Pensacola, their home base, said Cmdr. Michael Holdener, Pensacola's air operations chief.
"Their orders were to go and deliver water and parts and to come back," Commander Holdener said.
But as the two helicopters were heading back home, the crews picked up a radio transmission from the Coast Guard saying helicopters were needed near the University of New Orleans to help with rescue efforts, the two pilots said.
Out of range for direct radio communication with Pensacola, more than 100 miles to the east, the pilots said, they decided to respond and turned their helicopters around, diverting from their mission without getting permission from their home base. Within minutes, they were over New Orleans.
"We're not technically a search-and-rescue unit, but we're trained to do search and rescue," said Lieutenant Shand, a 17-year Navy veteran.
Flying over Biloxi and Gulfport and other areas of Mississippi, they could see rescue personnel on the ground, Lieutenant Udkow said, but he noticed that there were few rescue units around the flooded city of New Orleans, on the ground or in the air. "It was shocking," he said.
Seeing people on the roofs of houses waving to him, Lieutenant Udkow headed in their direction. Hovering over power lines, his crew dropped a basket to pick up two residents at a time. He took them to Lakefront Airport, where local emergency medical teams had established a makeshift medical center.
Meanwhile, Lieutenant Shand landed his helicopter on the roof of an apartment building, where more than a dozen people were marooned. Women and children were loaded first aboard the helicopter and ferried to the airport, he said.
Returning to pick up the rest, the crew learned that two blind residents had not been able to climb up through the attic to the roof and were still in the building. Two crew members entered the darkened building to find the men, and led them to the roof and into the helicopter, Lieutenant Shand said.
Recalling the rescues in an interview, he became so emotional that he had to stop and compose himself. At one point, he said, he executed a tricky landing at a highway overpass, where more than 35 people were marooned.
Lieutenant Udkow said that he saw few other rescue helicopters in New Orleans that day. The toughest part, he said, was seeing so many people imploring him to pick them up and having to leave some.
"I would be looking at a family of two on one roof and maybe a family of six on another roof, and I would have to make a decision who to rescue," he said. "It wasn't easy."
While refueling at a Coast Guard landing pad in early evening, Lieutenant Udkow said, he called Pensacola and received permission to continue rescues that evening. According to the pilots and other military officials, they rescued 110 people.
The next morning, though, the two crews were called to a meeting with Commander Holdener, who said he told them that while helping civilians was laudable, the lengthy rescue effort was an unacceptable diversion from their main mission of delivering supplies. With only two helicopters available at Pensacola to deliver supplies, the base did not have enough to allow pilots to go on prolonged search and rescue operations.
"We all want to be the guys who rescue people," Commander Holdener said. "But they were told we have other missions we have to do right now and that is not the priority."
The order to halt civilian relief efforts angered some helicopter crews. Lieutenant Udkow, who associates say was especially vocal about voicing his disagreement to superiors, was taken out of the squadron's flying rotation temporarily and assigned to oversee a temporary kennel established at Pensacola to hold pets of service members evacuated from the hurricane-damaged areas, two members of the unit said. Lieutenant Udkow denied that he had complained and said he did not view the kennel assignment as punishment.
Dozens of military aircraft are now conducting search and rescue missions over the affected areas. But privately some members of the Pensacola unit say the base's two available transport helicopters should have been allowed to do more to help civilian victims in the days after the storm hit, when large numbers of military helicopters had not reached the affected areas.
In protest, some members of the unit have stopped wearing a search and rescue patch on their sleeves that reads, "So Others May Live."
Copyright 2005 The New York Times Company
Blue, go to this top-notch QT site for a good copy of Keith:
http://onegoodmove.org/1gm/
Save to drive, yup, one for the ages.
BTW, Marie Antoinette Bush (aka Babs) says the poor folks in Astrodome never had it so good:
http://www.editorandpublisher.com/eandp/news/article_display.jsp?vnu_content_id=1001054719
Feed your outrage here:
http://onegoodmove.org/1gm/
scroll down for QT clips for the history books
To you and other racists on this site, here's how your fuehrer pulls it off:
http://www.blah3.com/article.php?story=20050903214041794
I can't stand you liars anymore.
Red Cross ordered to stay out of New Orleans:
http://www.redcross.org/faq/0,1096,0_682_4524,00.html
The lock-them-in-lock-them-out strategy from the Master of Disaster.
Tomm, FWIW, our supply of iPods is drying up with none on the way on this week's trucks. We've been out of 20 and 60 GB models for over a week, and the minis are really low, too.
Probably not significant, but I can't get any high-end PowerMacs or displays. It's a pitiful sight in our department as I had to sell our floor dual 2.7 and the 30" display sits there blacked out.
iBooks sell out as fast as they come in. They are noticeably faster and are such a good value that PB sales are slowing for lack of bang for the buck in comparison.
JMHO.
OT: I'm sticking to the High Plains myself.
No way you'd get me to live within 500 miles of any ocean anywhere in the world. Mother Nature is fixin' to wreak revenge for global warming, with those melting ice caps and such.
Give me a blizzard, a hailstorm or even a tornado over a hurricane or a flood. Now I need to get my kid out of NYC...
This looks very cool, and is Mac first:
The revolution will be televised
Posted by Kristina Rizga on August 17, 2005 at 12:48 PM.
The Worcester-based Participatory Culture Foundation just released free, open-source software for video — DTV — that allows individuals to create their own alternative TVs on the computers. DTV also allows millions of independent video bloggers and makers to bypass mainstream distributors and reach their viewers for free.
In a world where a new blog is created every three seconds, it’s hard to keep up with and filter such massive amount of information. DTV helps to view our favorite video content or ‘channels’ — without visiting their website every day — and learn about the new comers to the open source community.
http://www.alternet.org/blogs/themix/#24204
OT- and it's our custom not to take and hold another man's hand.
When in Rome...
"And from what little I understand, Bush took his hand because it's Saudi custom."
(BTW I spent 16 years as a diplomatic spouse and do know a bit about protocol)
lango, so ubiquitous is the iPod that, from my vantage point, it has now entered the Hoover and Fridge pantheon.
Three times in the past two days, customers have come to inquire about or to purchase an "iPod," when what they really wanted was a Creative Zen or sumfin-River. I had to send them over to the other department.
iPod = Music Player. Got nothing to do with some company named Apple.
OT, yofie, here's a blogger's follow-up on la Harris:
http://starryfever.blogspot.com/2005/08/katherine-harris-has-fake-bouncing.html
Oh, and that reminds me, we haven't received any nipple mice yet at the store. Lots of requests.
OT - Miss Shake-Your-Booty Harris:
http://www.crooksandliars.com/
scroll down to Tuesday items
So where is the Blue Tooth model?
I'm observing that BT mice are really slow in coming and that most of them are disappointing customers. Worse than that, the Kensington $70 BT mouse is crashing Macs (while the smaller $60 model appears to work well).
It's nice to have the built-in BT on PBs and iMacs, but there are few choices for users wanting to go wireless BT. In my personal experience, even the RF devices are crappy. Who wants a jumpy, flakey mouse that always wants new batteries? I'm staying wired for the time being.
Anyone know what's up with BT standards and implementations?
Two new iBook models definitely in pipeline. eom.
OT - Another toasty ebay item:
http://cgi.ebay.com/ws/eBayISAPI.dll?ViewItem&rd=1&item=5599303357&ssPageName=STRK:MESE:...
Interesting podcast discovery--Our corporate network prevents web radio streaming but allows (so far) podcast via iTunes (no browser required).
I wonder how many other slackers are figuring this out.
Dill, now that is a strange test. I did it 3 times and got 10-12 MBps...while streaming radio.
Maybe my Comcast is superfast because all of my neighbors are in their 70s and 80s and don't know the internet from a mimeo machine. I think I have the whole pipe to myself.
Crunch these results on my QS:
Firefox: Download speed: 3623 kilobits per second
Safari: Download speed: 3289 kilobits per second
Internet Exploder: Download speed: 2411 kilobits per second
I can replicate till the cows come in.
Cranky, yep. This board has been a cesspool for some time, and I'm just about outta here.
Go fix yer Macs.
Just ran it on 4-year-old PM G4 QS 867 wired into cable modem via 3-year-old D-Link wireless router:
Download speed: 3147 kilobits per second
PB is running Tiger, PM is running Panther. My initial impression of Tiger on the PB was of improved AirPort performance. The stupid test confirms that impression.
What have you done to your Mac? I don't believe you.
Cheers and another glass of Shiraz for me.
Reread my post, genius....
My 2-year-old PB gets the same results as Bootz's Autostrada burner.
Then make a sane reply. Or none.
PowerBook 867, Comcast cable, over Airport Extreme, with Safari, your stupid test gave me:
Download speed: 3835 kilobits per second
You telling me my li'l ole PB is a Ferrari?
Random musings from the front line:
Fabulous quarter, with kudos all around to the Cupertinians. Are we looking at $15B in annual sales pretty soon?
This week is slow, last week was decent but nothing to crow about. FYI, we've been experiencing a RAM crisis and were told today by corporate that it is industry-wide and stems from some sort of "shake-up" over there in Taiwan/China. It's nuts when I can't find the basic chips, especially the 1 GB sticks, that customers want.
Hell froze over yesterday when an old high school buddy, a lawyer and Windoze geek, walked in and bought a 17" iMac from me. He's had enough. Called me today and wants to swap it for a 20". He'll be using VPC for a couple of Windoze-only apps.
Today two skinhead-type guys were killing time in the Mac department while their car was in service. One seemed to be falling in love with a PB, learning about all that nixie goodness underneath. The other guy spent the whole time on my antique Mac SE from 1990 (it's there for old time's sake), playing SimAnt, his favorite game from grade school. He was still at it when I left. Nice tattoos they had on their bare arms.
Go AAPL.
Blue, here's what my buddy has put together:
http://www.machelp4me.com/index.html
I've turned over most of my customers to him because my schedule has gotten overloaded and my sales are good enough to support me so far this year. I refer lots of people to him from the store (he gives me regular referral fee checks...).
Many new Mac buyers are looking for help and ask me where to get training. You might want to leave brochures or cards at retail locations. We encourage that.
Air America podcasts, including QT downloads:
http://www.airamericaplace.com/archive.php
I agree with you that the main website needs this link.
If you want to hear my fav wild man, listen to Mike Malloy.
Strange week retail report.
It was a relatively crummy week until today when I sold $15K, mainly 2 PMs, a dual 2.3 and a dual 2.7 with the 30" beast. The latter customer wanted 8 GB of RAM, but I could only come up with 6 GB. He added 2 300 GB Maxtor drives, etc., etc.
I could have sold another dual 2.3 had I had one. All three of these guys were graphics pros. They never mentioned Intel or PPC. They were ready for new high-end systems to make their living.
There is no pattern here, folks...is what I say.
Then there was the Boston guy who picked up a mini from us on his one-day passage through town. He usually shops the Cambridge store. A switcher, of course.
To finish off the week in magnificent OT, I attended an event to hear Robert F. Kennedy Jr. speak. The tears of my senior year of college in 1968 returned in a flood as I relived the Kennedy magic of so long ago. This Kennedy is the best one ever, and I hope he never runs for any office. I couldn't stand to see another one go down.
Lango, on the anecdotal front, I'm holding up YTD at $100K/month in Mac and related sales (all those attachments). That's roughly twice my 2004 average.
BTW, that's pretty close to what the average PC associates do. I'm the only full-time Mac person, so I estimate another $50-$80K/month getting moved when I'm not there. Management announced the best year in Mac sales since 2000 for the whole chain.
So it's not just because I'm a terrific salesgal...
Sold 3 iMacs and a peecee today. Watch me run out of iMacs AGAIN by Saturday.
iPods are slowing, but generally sell really well during holidays, graduation season, etc. Minis slowing but still selling pretty well.
OT, Blue, I picked godaddy a couple of years ago for the website of a non-profit that I created and maintain.
As fate would have, our account is up for renewal on 6/30. Buh-bye, Bobster.
I'm seeing no significant drop-off in Mac sales in my neighborhood. Just had a very nice week with a mix of all products. Lost only one sale to a know-it-all potential switcher who was set to buy a 20" iMac. He felt betrayed or something like that...
Most of my customers who want to talk about the Intel future are positive and, like me, just want a box running the best OS around. If it's time for them to get a new Mac, they buy it.
OT - The scariest "Made on a Mac" site I've ever seen.
http://www.jimbob.info/index.htm
Doin' that baby thang, round and round.
Ditto. 1-800-MY-APPLE. em.
Blue, I apologize for potentially dimming your bliss.....but I think I'm smelling a strong citrus scent coming from your direction.
Seen a few of those in our service shop.
Hope your QS is still available for emergency duty.
smoochies
Well, Tom, I now intend to keep my venerable G4 QS 867 in service for another year, just to see how this all shakes out. I never was crazy about the G5 PMs anyway.
Unfortunately, I suspect my personal plans will correspond to those of many of my potential customers. Time to tighten the belt again after an excellent YTD in Mac sales. I may be joining our regular systems sales associates for the transition (just to minimize dining on dogfood).
Cheers to all for the long term, batten the hatches for the near term.
Long, fascinating analysis of our brave new iPod world from Salon.com (need premium subscription, so I might be in trouble)
"The world in the iPod"
The microchip that runs Apple's popular music player is made in India, Taiwan, China and Silicon Valley. Is this an example of how globalization works to everyone's benefit -- or a sign that the world economy is about to roll over America?
Editor's note: Salon staff writer Andrew Leonard is on special assignment to explore the impact of globalization on the U.S. "The world in the iPod" is Part 1 of his series "How the World Works," which takes readers from the vacant business parks of Silicon Valley, Calif., to the high-tech boomtowns of China.
- - - - - - - - - - - -
By Andrew Leonard
June 3, 2005 / Crack open an iPod and what do you see? Laid out in silicon is a road map for the world economy: globalized, outsourced, offshored, interconnected and complex. Take a look at the components: the hard drive, circuit board, click wheel, battery pack and all the rest. The iPod is a striking Apple success story, but the first thing worth noting is that Apple doesn't "make" it. Steve Jobs and Co. led the overall design, but the pieces get put together in China by a pair of Taiwanese firms.
On its own, this is hardly eyebrow-raising. Consumer electronic manufacturing has been moving to Asia for decades. The Taiwanese companies now setting up shop in China are following exactly the same impulse -- cheaper costs -- as their Western forebears. They aren't alone. Nearly all the other makers of iPod components are also en route to China.
But let's go deeper, into the brains of the iPod, the microchip that makes the music player go. Designed by a Silicon Valley company called PortalPlayer, this "controller" chip offers the real blueprint of how the modern world works. Headquartered in the U.S., PortalPlayer got its chip into one of the world's most coveted consumer electronic devices by outsourcing or subcontracting every possible step of design and manufacturing. By operating around the clock, with teams of engineers across the globe hammering out the chip's hardware design and essential software, PortalPlayer relentlessly delivered new versions of the chip, each one cheaper and faster than the one before, packed with more features but using less power.
PortalPlayer itself is a success. The company is now listed on NASDAQ and turns a profit. But if you visited PortalPlayer's Santa Clara, Calif., headquarters in April, you would have seen, all along one of the city's main thoroughfares, ominously large signs emblazoned with the words "Commercial Lease Available." Santa Clara, it turns out, is suffering a 28 percent commercial real estate vacancy rate, the worst in the Bay Area. Even worse, the San Jose metropolitan area, the heart of Silicon Valley, has lost almost 200,000 jobs in the last four years.
The chip business has not abandoned Silicon Valley. Intel, the industry's king, is still based here, as are scores of other companies involved in semiconductor manufacturing. The world market for semiconductors is growing and the Valley has a big chunk of it. But the jobs and real estates statistics pose an unavoidable question about PortalPlayer's success: Has the rush to outsource high-tech jobs, and maybe more crucially, high-tech expertise, inflicted a body blow on Silicon Valley, and by extension, the U.S. economy?
It's a question fraught with contradictions. PortalPlayer has done nothing wrong; on the contrary, it has done exactly what it is supposed to do, according to the dictates of the market and its responsibilities to its shareholders. But what is the impact of a thousand PortalPlayers, acting together, shifting jobs and technology from the U.S. to locations all over the world?
Critics are worried about trade deficits, job numbers, and even national defense. They are convinced the U.S. has sown the seeds of its own decline by shipping jobs and technological know-how to future superpowers like India and China.
Defenders of Silicon Valley argue just as strenuously that the U.S. will continue to stay at the top of the "value chain." They say that whatever economic blips the Valley's chip industry might be experiencing are just part of an age-old boom-bust cycle. They portray a "golden triangle" new world order in which every nation contributes what it does best -- low-cost development in India, manufacturing in China, high-level design in the U.S. -- and all prosper together.
Who's right? The more closely you examine a microchip, the more complex it appears, and so does any attempt to grapple with the true impact of globalization. But following the journey of PortalPlayer's chip from Santa Clara to Hyderabad, India, to Taipei, Taiwan, to Shanghai, China, and back around again, offers clues on how to think about it.
A few points stand out. Making a buck in high-tech has never been harder and competition will only get more intense. World dynamics are changing and not just because U.S. companies go abroad in search of cheap labor. Along with the strategic decisions of companies, the political actions of nations play important determining roles in who will dominate the crucial industries of the high-tech future.
As Silicon Valley companies seek profit, East Asian nations seek to build up entire industries. While one side outsources, the other side gobbles up. The willingness of U.S. chip companies to move operations to, say, China plays into the hands of China's intention to become a world leader in one of modern economy's most crucial industries.
Open up an iPod and pull out the PortalPlayer chip. Stare at the silicon, see the world.
In 1999, Gordon Campbell, a venture capitalist with a wealth of experience in the chip industry, came to one of Silicon Valley's long-established powerhouses, National Semiconductor, with a suggestion: The company should make a chip targeting the MP3 player market.
The idea was slightly ahead of its time -- Napster had yet to break big and the music industry still hadn't given up its efforts to sue the first entry in the MP3 player field, the Diamond Rio, out of business. National Semiconductor said no thanks.
But according to one published report, National's chief technology officer, John Mallard, followed Campbell out into the parking lot. Soon enough, in time-honored Valley fashion, six National execs jumped ship and formed PortalPlayer. Right into the teeth of the great tech bubble blowout.
Michael Maia, V.P. of marketing for PortalPlayer, laughs out loud when the parking lot story is mentioned, but neither confirms nor denies it. He agrees, though, that starting a new company in late 1999, just before the bottom dropped out of the tech economy, "was an interesting time to be building a business."
So interesting, in fact, that success demanded innovative thinking, not just in chip design, but in business model. On the manufacturing side, PortalPlayer would follow a path well-worn in the Valley for at least a decade or more. It would be a "fabless" design house -- so-called because PortalPlayer would not fabricate its own chips. That job would be outsourced to Taiwan. But PortalPlayer added a tweak: The chip's design, an immensely complex and labor-intensive undertaking involving both hardware layout and software coding, would be split between the U.S. and a fully owned subsidiary in Hyderabad, India.
"From the very beginning, we said we are going to set up a good-sized Indian facility, because the breadth of available resources coming out of India in the software area is huge," says Maia. Three of PortalPlayer's original six founders are of Indian descent.
It's part of the logic of market capitalism that political or national loyalties make little sense in individual companies' Darwinian struggle to make a buck. In Silicon Valley, prospective start-ups that don't include an Indian component in their business plan will get the cold shoulder from venture capitalists. Are you asking not to be taken seriously?
Today, PortalPlayer employs some 194 people. About half of those are in Hyderabad. Another 50 or so are now in San Jose (the company moved its headquarters from Santa Clara in May). Around 30 are in Kirkland, Wash., about 15 minutes from Microsoft and RealNetworks, two central players in the music delivery business.
There are several advantages to this setup. The first is overhead. Indian engineers are cheaper than American engineers but capable of working at just as high a level. What's more, in the ultra-competitive world of both chip design and consumer electronics, the pressure of the business cycle is remorseless. Being late to market with a new version of your product can spell doom. Any number of companies in the Valley, the U.S. or, increasingly, abroad would love Apple's business. (Indeed, the iPod Shuffle, which uses Flash memory instead of a hard drive, runs on a chip from a competing company.) All they need is a slight edge, in price, in power, in features, to make their move.
The competitive pressure has forced PortalPlayer, like many of its colleagues, to work on a 24-hour development cycle. Each morning and evening, PortalPlayer's U.S. developers meet online with their Indian counterparts. Either side can then hand off work-in-progress to the other, check the other's work for errors, or proceed collaboratively. From Hyderabad to Santa Clara, the sun never sets on PortalPlayer.
Success did not come immediately. At one point, the plan was to make a CD recorder; at another, PortalPlayer execs prepared to get into the music delivery business. But in the summer of 2001, PortalPlayer's chip, which reportedly delivered better-sounding music and offered more flexibility than the offerings from nine other competitors, landed the Apple contract. "I'm quite impressed with PortalPlayer," says Shyam Nagrani, an analyst at iSuppli, a firm that tracks developments in the semiconductor industry. "Their products are obviously very good." Ever since, the company's fortunes have followed the iPod. (PortalPlayer refuses to comment on any aspect of its relationship with Apple, and Apple, as a general rule, does not comment on its suppliers.)
Still, even after Apple's blessing, PortalPlayer's road was a little rocky. Mallard left in December 2002 ("to pursue other interests" says Maia), and there were layoffs in early 2003. But the company went public in November 2004, has recorded two consecutive profitable quarters, and total iPod sales are expected to reach 35 million units by the end of 2006.
"Getting to that first million [dollars of revenue] was tough," says Maia, "but each subsequent million is happening at a faster rate."
"When we talk to our customers," says Michael Maia, "what I say is, we're a firmware development house but we also sell semiconductors."
What Maia means is that the value PortalPlayer offers isn't contained primarily in the hardware design of its chips but in the software that the company cooks up to make the best use of the chip's capabilities.
"Firmware" is a fancy term for software that is embedded directly into hardware and generally does not get modified by the end-user. In PortalPlayer's case, the term refers to about a million lines of code, a miniature operating system that carries out all the tasks necessary for a state-of-the-art media player device. Such tasks include audio encoding, digital-rights management, power management, a database for handling thousands of files -- music, photographs and eventually video -- on a tiny hard drive, and hooks for all the other technologies built into the iPod.
Those million lines of code are PortalPlayer's competitive advantage, the intellectual property that makes songs on your iPod sound good and the device easy to use. The code is written by PortalPlayer's developers in Santa Clara and Kirkland, and its fully owned subsidiary in Hyderabad, India. Everything else that can be spun off, is.
PortalPlayer didn't even create the basic structure of its own chip. The first step in the chain is to license a microprocessor chip design from U.K.-based ARM, a company founded in 1990 by Apple and two other firms.
Starting from that ARM template, PortalPlayer's engineers then modify the original layout so that the hardware is optimized for the functions necessary to power a digital media player. This is a complicated, painstaking process. A chip is a piece of silicon with millions of transistors arranged in intricate, interconnecting patterns and layers. As PortalPlayer's engineers revise the original template pattern, the chip must go through a series of verification and testing steps to make sure the modifications work.
But even portions of that task are outsourced. PortalPlayer works with two other Silicon Valley semiconductor design companies, eSilicon and LSI Logic, who help do the nuts and bolts work of translating the design into workable hardware.
Once the final specifications are hammered out and the chip prototype works in the lab, the design is sent to the "wafer fab," a factory that etches discs of silicon with the multilayered patterns.
PortalPlayer relies on two different "foundries," the term for companies that specialize in made-to-order chips. Both are headquartered in Taiwan: the Taiwan Semiconductor Manufacturing Corp. (TSMC) and United Microelectronics Corp. (UMC). Here is where, Maia says, "the huge money" starts getting spent. Manufacturing chips is a process involving hundreds of steps and extraordinarily expensive machinery. (A state-of-the-art fab costs about $3 billion to set up.)
The fabs end up producing thousands of disc-shaped wafers, each of which is imprinted with hundreds of chips. The wafers then go to yet another tier of companies that specialize in testing and packaging. First the wafers have to be chopped up into individual chips, or "die," and then each chip must be tested to make sure it isn't a dud. Finally, it is coated in plastic and made ready for assembly. PortalPlayer uses two different companies for this part of the process, SiliconWare in Taiwan, and Amkor in Korea.
The finished product is shipped to a warehouse in Hong Kong, and then to an assembly plant in Shanghai where it is plugged into a circuit board and inserted into an iPod. And the last step? That iPod is loaded onto a FedEx jet for shipping to your front door.
And that, in a nutshell, is how a state-of-the-art Silicon Valley fabless design house operates.
But what does it mean?
Up until around the mid-'80s, a typical semiconductor company handled every step in-house, from design to final packaging. Such a company was described as "vertically integrated" -- a one-stop shop for semiconductor manufacturing. It was an industry that began in Silicon Valley.
Vertically integrated semiconductor companies still exist. Santa Clara's Intel, which alone accounts for some 15 percent of chip sales in the world, is the leading example. But in the late '80s, a different model -- the fabless design model -- began to emerge and has been growing ever since.
The internal dynamic of the industry forced the change. Over time, the capital investment necessary to operate a fab simply became too great for any but the most well-heeled to afford. And even then it was risky. Owning your own fab, explains Maia, is great when business is good. But the chip industry is intensely cyclical and when business goes sour, "They weigh on you like granite."
But if you didn't own a fab, how were you going to get your chips made? You couldn't exactly go to one of your competitors and ask them for help. For the fabless design niche to grow, it needed another industry niche to appear in concert. Enter the made-to-order foundry business, pioneered by Morris Chang, the founder of Taiwan's TSMC, initially a joint venture between the Taiwanese government and Philips Electronics.
Chang was born in China and worked at Texas Instruments in the U.S. for 20 years. Then he emigrated to Taiwan, where he figured out that if he focused on manufacturing made-to-order semiconductors for outside customers, he would protect himself from exposure to the market failure of any single customer. At the same time, he could insulate the design houses from the huge capital investment necessary for manufacturing. It was a win-win innovation. Both sides have flourished ever since. The fabless design sector of the chip industry now accounts for 16 percent of the overall semiconductor market and is growing every year.
But stripping wafer fabrication from the traditional structure of a chip company was just the first domino to fall in the chip production cycle. If it made business sense to rely on an outside foundry for chip manufacturing, then the obvious next question was what other portions of the supply chain could be shed?
Next on the chopping block: assembly and testing. What was the point of having your chip manufactured in Taiwan, then shipped to Santa Clara for testing and packaging, and then shipped back to Taiwan or Malaysia or China for final assembly into a CD player or cellphone or fancy toaster? It was obviously more efficient to rely on companies that specialized in the task and were located closer to the point of production.
And so it goes. The evolution of chip manufacturing has relentlessly followed a process clunkily dubbed "vertical disaggregation." One step after another in the supply chain gets spun off to those who can do it more cheaply and efficiently, leaving the companies at the top of the value chain increasingly focused on their core competency. One-stop shops have been replaced by what academics call "cross-national production networks."
The rise of vertically disaggregated, cross-national production networks can be seen as a persuasive demonstration of the free market in action. Individual entities, like PortalPlayer, constantly in search of a competitive advantage, dispense with any task that someone else can do more cheaply or efficiently and focus R&D on the particular job that it does best. The wide, immaculately groomed avenues that connect Silicon Valley's business parks are jammed with hundreds of other companies doing exactly the same thing.
But what happens when you've disaggregated everything. If India can do the design and East Asia handles the manufacturing, what's left for Silicon Valley? Lunches with venture capitalists? Meetings with reporters? Or empty office buildings?
I ask Maia if he's worried about some hungry new design start-up from Shanghai knocking on Apple's door tomorrow with a new generation digital media player chip -- faster, cheaper, more powerful than ever before?
"Oh, we're always worried," he says, laughing. But he's not panicking. He is confident that the Valley will find a way to maintain its leadership. "The innovation and the standards and the leading-edge stuff is still primarily coming out of the U.S.," he says. Maia notes that all the "offshore companies" -- the chip companies based in China and Taiwan and Korea -- want to set up shop in Silicon Valley, "so that they can keep their ear to the action."
By "action," Maia means the cutting edge, the latest innovations in design, the ferment that comes from being the historical center of the world's computer business. "We are here," says Maia. "We are the action. We are creating the action."
Indeed, just a block or two from PortalPlayer, stands Hynix Semiconductor, a Korean manufacturer of memory chips. In the global economy, it makes sense for the world to come to Silicon Valley as much as for the Valley to go to the world.
I ask PortalPlayer India's J.A. Chowdary what is to stop Indian chip designers from working directly with Asian manufacturers, cutting out the Silicon Valley middleman. He soothingly invokes a "golden triangle" of U.S. designers, Indian engineers and Chinese manufacturers, balanced in a mutually beneficial stasis for a good long time. "The design and architecture development is done in the U.S. The development work is done at comparatively lower costs in India and has a huge manpower of skilled technicians. And the manufacturing is done at affordable and cost-effective prices in China. Each country has its own significant part to play, and contributes in a major way, to the successful production and exporting of globally competitive products. This model will continue to grow and will sustain each other."
In a perfect world, that "golden triangle" would be a globalization dream come true. Every country, every region, contributes what it does best, and the tight links and interconnections made possible by global networks allow everything to work smoothly together, without friction. A rising tide of world prosperity raises all boats.
It could happen. The figures on job losses and vacancy rates in Santa Clara don't prove that the Valley is in decline. It's just as likely, notes University of California at Berkeley economist Cynthia Kroll, that the empty offices are a result of overbuilding during the go-go dot-com years as they are of outsourcing. Burned by the excesses of the bubble, the Valley is acting more prudently now.
"It's very hard to disentangle the wave of off-shoring from weakness in the economy," says Greg Linden, a researcher at Berkeley studying the global semiconductor industry.
It's also hard to refute the oft-heard argument in favor of outsourcing that suggests that companies like PortalPlayer would not exist at all if they did not rely heavily on offshoring. In other words, the 80 employees that PortalPlayer has in the United States would not be possible without the 100 in India.
But there are a couple of other factors to consider in the perfect world of the globalized golden triangle. The chip industry is one of the crown jewels of a highly industrialized economy. If outsourcing leads to a critical mass of technology expertise and manufacturing capability migrating to locations outside the United States, the long-term consequences could be severe. So the Pentagon is worried that it won't be able to find local suppliers of chips necessary for next-generation weapons systems. Economists worry about spiraling trade deficits.
An odd, intriguing aspect of globalization is that the decision by the fabless design houses to pursue their individual interests -- cheaper costs -- plays right into the hands of national entities focused on their own strategic imperatives. It is no accident that Taiwan became a leader in bleeding-edge, made-to-order chip manufacturing, or that China looks set to follow in its much smaller neighbor's path. Before Chang started TSMC, he directed a government research institute that targeted strategically important technology development. In both Taiwan and China, the government has encouraged the chip industry with tax breaks, real estate deals, loans and an assortment of other incentives.
That's because government and business leaders in East Asia consider the chip industry not just as a source of economic profits but as a key component of national strength. So while the fabless companies shed what they consider nonessential, East Asia eagerly snaps up everything it can. As a result, "disaggregation" on the one side has led to "reaggregation" on the other. Look at the PortalPlayer chip: manufactured in Taiwan, tested and packaged in Taiwan, Korea or China, and plugged into an iPod in China.
"The supply chain of the market has fundamentally shifted to Asia," says Len Jelinek, an iSuppli analyst.
This shift has some people very worried -- and they are not just out-of-work engineers. They fear that advanced R&D follows the physical location of production. If you are a cutting-edge engineer interested in working with innovative new techniques for chip manufacturing, you will be drawn not to Silicon Valley but to the scores of brand new fabs being built in Asia. So, for example, the foreign-born engineers getting Ph.D.s at Stanford and Berkeley, who used to get jobs in the Valley, will now increasingly go back to their homes where they can work at the top of their field. That is where engineers are being trained to use the newest tools, and that is where further innovations in technology are likely to spring from.
That is also why analysts in Silicon Valley and policymakers in Washington are asking a host of urgent questions. Will state-of-the-art chip design be the next link in the chain to move? What happens when the U.S. military needs a custom-designed new chip but all the facilities capable of manufacturing it are in China? Will the PortalPlayers of the Valley continue to stay one step ahead of their foreign competitors? Or has Silicon Valley midwifed its own successor into being through its eagerness to divest itself of manufacturing and every other "nonessential" job?
As the U.S. trade deficit with China continued to rise in the spring of 2005, along with signs that China's chip industry was surging ahead at a remarkable pace, the questions were being asked with increasing frequency. In April, the Defense Science Board, an advisory group to the Pentagon, released a 118-page report warning that critical semiconductor manufacturing technology was migrating to Asia, and in particular, China. Also in late April, at hearings held before the U.S.-China Economic and Security Review Commission to evaluate China's high-technology development, speaker after speaker testified to the rapid growth of China's chip-making industry. Meanwhile, venture capitalists in Silicon Valley are making their own move across the Pacific right now, pouring millions of dollars into Chinese chip design start-ups.
Will one of those start-ups end up displacing PortalPlayer? Will the new skyscrapers of Shanghai cast a dark shadow over the office parks of Santa Clara and Mountain View, Milpitas and San Jose? Over the past few years, if you were discussing the challenge of globalization in the Valley, the topic usually was India, with its legions of inexpensive programmers. But today, more likely than not, the country on everybody's mind is the Middle Kingdom.
End of Part 1. Next: China's love affair with the chip
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About the writer
Andrew Leonard is a staff writer at Salon.
I may get to play a Mac sales associate on teevee (as well as in real life).
PBS is filming a story on consumer electronics at Micro Center. Don't know if it's only at our store, but the videographer spent a long time in the Mac department today. Shot me with customers, customers, Mac hardware, etc. I set up some iPhoto and iTunes shots for him with visualizer and all that cool stuff. He's also buying a PB from us since our manager is offering him a nice deal.
Should be on the News Hour in a couple of weeks.
Drat, I knew I should have washed my hair this morning.