Rocket Bomber - article - business - RBGSX - Geek Biz Report - week ending 16 May 2010


Geek Biz Report, week ending 16 May 2010

filed under , 15 May 2010, 14:33 by

If you’ve been reading my blog or following me on twitter for any length of time (say, a week or so) you know 3 salient facts about me: 1. I like beer 2. I like manga & 3. My name is Matt [Usually you discover this by clicking a profile or ‘about me’ link where I say things like “Hi, my name is Matt, I drink beer and read manga”]

This product announcement fills me with serious nerdlust

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Geek Biz Report, week ending 16 May 2010

I’m going to lead with the editorial this week; in fact I’m going to lead with a reader comment, and then my editorial, and then the biz links; if you’d rather skip my drunken rambling I can provide a link to do exactly that

From Steven Marsh, comments on last week’s Geek Biz Report

I’m a long-time site follower, first-time commenter.

I generally find your insight to be interesting, and you’re right more often then not. Still, I find your analysis of the iPad to be off-base.

First, you mention that selling one million of a $500+-product in a couple of months isn’t a noteworthy event. You cite lots of numbers that are bigger than a million. Okay, whatever. It raises the question, though: At what number threshold do you consider the number of units sold to be a big deal? At what point will they start being something to pay attention to?

10 million? That’s a trivial amount — barely enough to reach the few largest cities in the world combined. Oh, it’s also about how many Blu-Ray players there are, I believe (after four years’ head start) — and, last time I checked, most big-box retailers (book or otherwise) had Blu-Ray sections.

250 million? That’s not even enough to ensure that everyone in the U.S. has one, let alone worldwide. That’s how many iPods have been sold, I believe — and with it has come online audiobook sales, among other retail-affecting developments. To contemplate that the iPod hasn’t been a game-changer in a number of ways is, I think, foolish.

Anyway, I’m curious if you have that internal threshold for what number of iPads would be enough to take notice — or if anything less than seven billion (enough for every man, woman, and child on the planet) is not worthy of contemplation.

Second, I think your analysis of what the iPad is and does is woefully underdeveloped. I have used it to watch videos, but that’s not (in my opinion) the best usage of it — and underestimating this versatility is practically tantamount to dismissing the telephone because all you can use it for is to call your lab assistants.

Last night before I went to bed—in the span of an hour—I read a chapter of a book, played a recreation of the original Dragon’s Lair game, checked my e-mail, and started a game of sudoku. I could’ve watched an episode of something, but I decided against it. None of these would’ve been remotely convenient a year ago.

The people who derided the original MP3s a decade ago were correct but misguided: …Why would I want something that stores less than a cassette player, in worse quality? They didn’t recognize the benefits (lightweight, long battery life, convenience) nor realize the undercurrent changes in technology that would irrevocably change the music industry. Two decades before that, people derided cell phones for the same reason (Why do I want something so expensive that is worse than my home telephone?). Again, same result to the telephone industry.

I believe history is repeating itself, with the iPad. I’m not sure what industries it’s going to revolutionize yet, but calling it a TV Walkman is, I believe, ludicrous and out-of-touch.
It remains to be seen which of us is correct. :-)

Let’s review Apple, shall we?
[this article recycles, in part, some thoughts first posted 28 January]

The Macintosh was a repackaging of PARC‘s Alto user interface — if Wikipedia is to be believed, Apple engineers vistited PARC to get hands-on with the Alto, so there’s no getting around the fact that Apple’s second major success was yet another example of standing on the shoulders of giants and not the revolution propogated in commercials and the Apple company mythos. Jobs & Co. didn’t do the heavy lifting on the Macintosh; they showed up late, with some spiffy new hardware and a polished user interface that immediately captured the attention of a fraction of the market — an enduring fanbase — but the Macintosh wasn’t new, and it never held more than 10% of the PC market until just two years ago — and the more recent bump in Apple desktop & laptop sales are likely largely linked to the success of iTunes, iPods, and iPhones. Apple as a brand, and as a consumer lifestyle choice.

The iPod wasn’t new either; it was a slick revisioning of existing MP3 players. MP3s were introduced, largely, in 1994; spiked in 1997 with the advent of Winamp and other players (not to mention 1999’s Napster and other, later P2P networks) — & the first iPod went on sale in October of 2001 — long after the introduction of digital music files and quite a bit after we’d loaded up hard drives and multiple back-up media with all kinds of music [some of it illegal]. So we were listening to music [even digital music] for quite a while before Apple approached this market: Jobs & Co. didn’t do the heavy lifting on the iPod; they showed up late, with some spiffy new hardware and a polished user interface that immediately captured the attention of a major fraction of the market.

Palm/Handspring or Blackberry deserve more credit in the development of ‘smart phones’ than Apple. The iPhone wasn’t new. However, it had/has the best touchscreen available, Apple built on the success of ‘iTunes’ with their App Store, and the stars just seemed to align for the iPhone. Jobs & Co. didn’t do the heavy lifting on the iPhone; they showed up late, with some spiffy new hardware and a polished user interface that immediately captured the attention of a major fraction of the market.

— and now, we pause.

The iPad is the latest iteration of the Apple/Macintosh spirit. Sure, it’s shiny. But it’s not a desktop replacement (It was never pitched by Apple as a desktop replacement, and yet if you only read PR releases and blogs you’d swear the iPad was the second coming of the PC and all our bases belong to Jobs)

The iPad seems like a revolution. But. [*ahem*] Jobs & Co. didn’t do the heavy lifting on the iPad; they showed up late, with some spiffy new hardware and a polished user interface that immediately captured the attention of a major fraction of the market. One can make the argument that Apple ‘invented’ the tablet computer, since no other successful entrant exists to make the claim, but I’ve yet to see, read, or hear why a ‘tablet computer’ is such a good thing.

On top of that [to repost my initial response to Marsh]:

I don’t buy into the cult of Apple though I can see the appeal. I think some of it is hype, and much of the discussion is shaped by marketing. Apple makes pretty product, and they’re good at selling it.

So, in my comments on Apple and the iPad (flagged as opinion) I feel free to let rip. I Still Don’t Get It. Nintendo has 140 Million DS units out there, and doesn’t get the hype.

Actually, a million is a nice round number, and is a sustainable user base even if aliens land in San Jose tomorrow and in addition to introducing The Next Best New Thing, also drop a nuke on Cupertino on the flight in.

The iPad is here to stay.

It’s a nifty device. It’s a new platform. It’s a toy. There is nothing that can be done on the iPad that couldn’t be done in a web-browser, and as such is available to all platforms, but Apple is Apple and so they get a second look, and a free pass. Yeah, iPad, get that. It’s nice, and you spent a lot of money on it, and I hate to repeat myself: but there is nothing that can be done on the iPad that couldn’t be done in a web-browser, and as such is available to all platforms

The iPad is an internet appliance, the first of many— and actually not quite first but Apple has this knack for making their hardware seem like the first available [with an appropriate mark-up] when in fact the utility and usability of their hardware has been available for years, just without the Apple logo and outside their staked territory.

No, really. Outside of artificially constructed ‘apps’ available from the proprietary ‘app store’ the iPad does absolutely nothing new, and even the Apps are recycled [iPhone] and mostly just copy web functionality, with occasional added GPS and a price tag. It’s all just a slick interface. No matter how beautiful the interface — Not A Damn Thing Is New.

I’m a new-model luddite, in that I prefer mouse-and-keyboard over a touch screen. Hell, I ran computers from the command prompt—keyboard only—for years before I finally upgraded to Windows 95… in 1999. And after that I didn’t upgrade until XP service pack 2 — and only because I stopped building desktops and had to take whatever the laptop manufacturer wanted to sell me (eventually I’ll go to Ubuntu, I suppose, when I stop upgrading my deck every two years and settle in with some older hardware)

My first computer was an Atari 800. I went to Georgia Tech in addition to building computers, so I’ve worked with Macs and wintel, Sun SPARCstations, unix terminals, and used telnet over dial-up to the campus servers to check my email — back in 1992. I remember mudding in the basement cluster at the CoC, using Mosaic on the library Macs, and the time when Usenet slowly overtook BBSs as the internet fora of choice. I fondly recall green and amber monochrome. I know Lynx. I know Gopher. I know vi.

I tell you all this not to brag (because I’ll only come off as ‘grumpy old internet guy’) but to illustrate that the keyboard is my native tongue — the first ‘language’ I learned and still my primary interface. In fact, years of running DOS and Unix programs with nary a mouse in sight conditioned me to default to keyboard shortcuts in all their F-key, ctrl- and alt- glory — a habit that served me quite well when I switched to laptops back in 2004.

And here comes the iPhone, basically a track-pad overlaid on a backlit LCD screen. From my experience, that’s 2 things I don’t really need, but together they’re the only interface on an iPhone, except for a ‘keyboard’ that pops up when, you know, you actually want to communicate with someone.

Eventually I will be superseeded, relegated to the unix cluster of history, when the touch-this and minority-report-style-that are the last remaining interfaces. Touch-screen is fine for browsing, but blogging needs input, and the on-screen keybord isn’t quite up to the task yet. iPads are fine for passive consumption, but the internet is not TV; the new model, [grumpyoldman] the model we built, dammit [/grumpyoldman] is interaction and contribution. Read, enjoy, yes. But also remix, re-post, reply, and eventually, post your own. This is why I characterize the iPad as merely a ‘smart tv’. It is a consumption-only device.

But Computers… are Computers — with all the possibilites and applications we’ve discovered in the last 35 years. I’m going to need all of that to keep writing, to keep churning long lists of numbers into usable facts, to keep up with long-distance friendships with folks I haven’t even met yet (in person) and to keep contributing to the conversation. The internet isn’t jokes, porn, lolcats, blogs, streaming video, and quick updates on ‘social networking’ sites: the internet is a conversation a billion people have about everything and nothing, all at once. The iPad can connect to the internet— to read, watch, or consume it—but that is not the internet’s primary function. Take away the ability to react, reply, and contribute and the internet is just fancy cable TV. While some could argue that YouTube-style “video reactions” can take this role, I’m not giving up my keyboard yet. In fact, I think you’ll have to pry my keyboard from my cold, lifeless hands after my death.

[If I plan it right, I’ll have 6 months of blog posts queued and uploaded at that point so the site lives even after me. Immortality, for the short term]

Even if I persist in 20th century interfaces, it’ll be a long, long while before I have to give up my physical-button keyboard — no technology I’ve seen yet is an adequate replacement.

##

And. One Million iPads. Great. Bully for Apple.

Perspective: one mil out of One Billion Screens — oh, and those are just PC screens, and doesn’t include the additional 1.5 billion TV sets. So the iPad (at one million proud units) is just four-thousandths of one percent of the total ways we view content, and just one hundredth of one percent of available ‘computer’ screens.

Google is focused on the web: which is accessable (at least in theory) to all of the one billion PCs. I like that potential market better.

and the next internet boom will be phones not iPads — and cheap phones, at that. Twitter, as the bridge between SMS text message and the web, is better positioned than Apple or Facebook (or Google) to be the bright beacon that leads us into the new internet age, and the simplicity (some might call them limitations) of Twitter captures the core of the internet: interaction, and conversation. — and might I add, 6 billion people using mobile phones to exchange text is like the first information revolution, the telegraph on steroids and amphetimines. The internet is just getting started, folks.

Apple will do quite well with the iPad. They will continue as a company long after the iPad brand is retired, and however we consume content in 2076 (the year of Apple’s centennial) no doubt, Apple will be a part of that. Maybe not the largest part, however.

A company can be significant, successful, and profitable without controlling its market, or even directing the overall range and scope of development in it’s field, or even pioneering the new technologies that drive that market. Apple will make money. But it’s not because Apple is a leader in computers. They sell content (iTunes, a 4 Billion Dollar business), they sell a lifestyle brand, and they sell a customer experience.

It’s fine to talk about Apple in any of these contexts. It’s even OK to discuss Apple as a (very fine) hardware manufacturer, as that has always been the core of their business and is the source of both their reputation and sizable profits — but Apple is not a market leader. Through pricing and other strategic decisions, they have purposely limited themselves to niche markets and the top fraction of consumers. They do what they do very well, but they themselves are not the mainstream, or the future. And for my money, the iPad is no laptop — and that’s a deal-breaker. As fine as it is at what it does, it still falls short.

My opinion matters for naught, and Apple will make billions off of other people who don’t share my needs, background, and perspective. Like all Apple products, it’s awfully pretty. But I still think the iPad is a toy (or a TV—a special type of toy) and does little to advance computing or the development of the internet.

[/editorial]

##

Rich Johnson @The Beat on iPad – re: e-books — we owned them already

► There are two hardware-focused manufacturers who continue to play as “content” publishers, and at least one commenter is finding it hard to tell the two apart. – let me note, the DSi XL is $300 cheaper than an iPad, and also plays Chrono Trigger. Nintendo, or at least one Nintendo executive, considers the war with Sony over, and the war with Apple the next challenge

► Speaking of Nintendo and the DS, they sold 440,000 of them in March — the DS doesn’t get the coverage of Apple’s-latest; in fact, it’s considered by most as ‘old’ tech, or merely gamer tech, not worthy of blogging. Not quite a million in sales this month, but the DS is six years old already and at 140MM, total, puts iPad to shame. Since (as previously stated) I consider the iPad to be little more than an content-consumption device, I have to wonder why Apple gets all the love, while Nintendo gets zilch. [The DS doesn’t connect to the internet; that’s the only thing I’ve been able to come up with.]

Would otherwise be the lead story:

Viz Media Layoffs. There is all kinds of reaction to this news [& 1, 2, & an official response]

We’re in a recession; the news isn’t that Viz reported layoffs, but that they held on for 2 years before they had to.

► One assumes Go!Comi remains as a corporate fictional entity—and potential ongoing manga publisher at some future point—but short of outside rescue, it’s hard to see how they’ll survive the year. Once again, the web comments on this in detail.

► 4Kids reports loss. I’d love to characterize that as “4Kids acknowledges error; returns to anime” but if the Choatic bet had paid off, it’d be a whole new market. Wizards of the Coast [now wholly owned by Hasbro] was founded on less. Chaotic wasn’t a bad move on the part of 4Kids; given the success of Pokemon, Yu-Gi-Oh!, Magic and other CCG – hell, it looked like a slam dunk. Trends are not guarantees, however, and the kids didn’t pick up on Chaotic; maybe it lacked that ‘Japanese’ cuteness or some other intangible. At any rate, 4kids is now, once again, primarily a licensee with a kids anime focus

► via Pop Culture Shock, Dark Horse’s Carl Horn on Love & Wonder — while I was over at the Dark Horse site I also unearthed ‘Overdelivered’ Would Be An Understatement and Manga on the Wing

► e-books aren’t new; looks like the technology is 24 years old

► EA Not Going to Be Happy Until It Steals Shooter Market from Activision. EA also reports quarterly earnings

► The Census Bureau [love ‘em] report retail sales numbers for April.

► Lagardere SCA [owner of Hachette, and Yen Press] reports 1st quarter revenue is down, but that trends are encouraging. In fact net publishing sales are up – though largely due to Twilight, Meyer, et al.

The Age of the Blog Is Upon Us

Sony reports loss but looks to future profits

Disney is still making money

Amazon does the obvious and drops ‘free’ from it’s ebook bestseller list Dude, this took more than a year? Isn’t it obvious that ‘free’ and ‘seller’ are antonyms?

And:

► Via tested.com All of this week’s tablet news in a nutshell
► Plus Sony Considering Tablet to Compete with iPad

##

Aggregate prices on the Rocket Bomber Geek Stock Index rose 38.38 points (4.1%) to 974.44. Last week was nuts, this week was marginally more sane, and yet, stock prices are only a marginal indicator of either company strength or investment value.

Rolling 20-week RBGSX Aggregate Price

[we’re slowly working up to first, a 26-week graph, and eventually a full year]

& the 25 stocks: CBS Corporation (NYSE:CBS), The Walt Disney Company (NYSE:DIS), News Corporation (NASDAQ:NWSA), Sony Corporation (NYSE:SNE), Time Warner Inc. (NYSE:TWX), Viacom, Inc. (NYSE:VIA), Wiley John & Sons Inc. (NYSE:JW.A), The McGraw-Hill Companies, Inc. (NYSE:MHP), Lagardere SCA (EPA:MMB), Pearson PLC (NYSE:PSO), Scholastic Corporation (NASDAQ:SCHL), Amazon.com, Inc. (NASDAQ:AMZN), Books-A-Million, Inc. (NASDAQ:BAMM), Borders Group, Inc. (NYSE:BGP), Barnes & Noble, Inc. (NYSE:BKS), Hastings Entertainment, Inc (NASDAQ:HAST), Indigo Books & Music Inc. (TSE:IDG), Best Buy Co., Inc. (NYSE:BBY), Netflix, Inc. (NASDAQ:NFLX), Navarre Corporation (NASDAQ:NAVR), Activision Blizzard, Inc. (NASDAQ:ATVI), Electronic Arts Inc. (NASDAQ:ERTS), GameStop Corp. (NYSE:GME), Nintendo Co., Ltd (OTC:NTDOY), and Apple Inc. (NASDAQ:AAPL)

Please note: nothing here is investment advice. full disclaimer



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