Peeve of the day iTunes Advertising

One of the benefits of Mac ownership has been NOT having to wade thru crapware on my computer all the time.  Now comes this  

Almost everytime I sync my phone I have to click thru this MobileMe Ad?  At first I thought it was just when I synced my new iPhone 4 for the first time.  but it has been there almost every day.

CRAP!

Make it end Apple

Regardless of the relative merit of MobileMe (not good for me but I am hopeful long term) I find this type of  advertising putoffish and invasive.

Now, lets try a thought experiment.   Assume that  customers that sync their phones are better Apple customers than non-syncers.  (we know who you are). The presumption being that syncers use their phone more, buy more apps, and are happier overall with their user experience and as a result more likely to buy another phone or even better MORE apple products.

Do you think having to click thru an add every time I want to sync my phone makes me want to sync more or less? It adds friction.  like a paywall or even a registration wall does.  (see Rupert Murdoch Times 60% traffic drop off for Free restration wall went up)

There are two lessons here.

First,  If their is value in the product people will find their way to it.  Make the product better.

Second, and it is a correlary to the first.  Advertising it more make increase sales but it will not increase satisfaction and repeat customers (see rule number one)

Lastly,  I know there are opt outs for email marketing and even for iAds so if there is an opt out for iTunes I have not found it yet.  If I find it. OR if the add goes away so will my Peeve.

Bad day to be a case manufacturer

I think the most important news to come out of today's press conference was missed by most if not all of the scads of reporting firepower assembled to record the event.

Apple is in the case business because of the failure of existing manufacturers to keep their collective mouths shut about upcoming products.

Can you imagine being the CEO of an accessory maker and having to hear that today? Ouch. It reminds me of the take the cookies away from all the kids until whoever scratched dads car door comes forward. ( it wasn't me really ).

Steve Jobs...

Sometimes websites buy stolen property and they get out there... and case makers have a history of showing off their new cases for our new products. The case vendors haven't had a history of helping to keep our work under wraps

Maybe they already knew they were screwed, maybe Phil or Steve told them just how screwed.

But now they have been screwed.

Antennagate: The pre presser briefing

Ben Vested

Only a few people know what apple will announce at tomorrows press conference. Every news outlet in the country will be covering the pressed as the biggest story of the day...

Did anyone notice BP stopped the oil today on day 90 (maybe)

This silly season frenzy is fun ( maybe not so much for the few at the center of this), a welcome diversion from the real news that is so serious and depressing. There are also a huge number of stakeholders in the outcome. The two to three million of us that already have the phone-4 the 80 million of us that have older iPhones. The stockholders, press/blogosphere.

Friday afternoon coverage will be wall to wall.

The facts have been well covered so I will not repeat them here. For my part I think that there is a perceptible reception issue with the new phone. That said, I have used mine daily since launch day I find it delightful to use with significantly better coverage and sound quality than the previous phone.

The real issue is that it is an issue. At every opportunity since the stunning 1.6 million unit launch weekend. Apple has stepped on it's collective wiener. (Hold Different?)
Apple is going to have 60 billion dollars in revenue this year they are second only to Exxon in US market cap. They are no longer the little guy they are no longer "The Rest Of Us".

I do not know what he announcement will be. I do expect it will be definitive and final. It is fun watching everyone try to guess. Who knew RF engineering could be cool?

Here are a couple of great links to articles summarizing the events of the last three weeks.
Anantech
A little geeky but very clear follow up on the actual issue and performance. Link

Arrington
He famously does not use an iPhone. Interesting take Link

Under Construction

Under Construction.

BnVseted is being reconstituted, rebuilt, and reworked. My Appologies for the font and layout obsessed in the world my CSS is non existant and my taste... well you can see. (best for the time being to follow RSS)

Layout suggestions are welcome as are suggestions for hosting.

Apple and Psystar Restore my Faith in Humanity

Hello Apple!

Welcome to my twisted world.  Where things make sense when you "Follow the money"

Hewdell Packovo you say?!!! Hewdell Packovo is behind Psystar?!!!! who would have thunk it possible that two twenty somethings could start a real (albeit illegal, imoral, cruel, ok maybe mot cruel) company, stick their middle fingers up in the air, hire a big expensive law firm to defend (dare I say OFFend) them selves against a 100 billion dollar company.

Someone finally figured out that there may be players in the current market place that might benefit from Apple losing control of their IP as it pertains to Hardware made to run OSX.   Hmmmmmm.

If I cannot pose that I called the housing crash (and I cannot, I did really but you know the saying... If it wasn't blogged it did not really happen.. its a saying, really)  Than I CAN say I called Hewdell Packovo the nefarious funder of all things Psystar.  

Here are some of the Psystar links from the last SIX months.

July

Aug story 1

Aug Story 2

Sept 1 

There are more just click on the keyword Psystar

First post in a while, I am pondering my navel trying to figure out the best way to take over the world.  When I figure it out, I will let you know.  Unless taking over the world means I cannot tell you first.  In which case, Sorry.

On Analysts and Earnings Apple Reports today

This afternoon Apple will report another record quarter with both unit sales and revenues the best in the companies history.

If you knew before the announcement how many computers, phones, music players, Apple sold AND how much revenue they took in, you still could not reliably come up with a per share earnings number within 10% of what will actually be announced.

Analysts come up with a number because we (the investing public) goad them into it. It is a spectator sport. Some analysts will come closer to the actual number than others. Assuming they do not have inside information it is simply chance. Most of the analysts know this simple fact yet they submit to the kabuki because, well, they want to make a living.

Here, I can prove it.
If you knew Apples Gross Revenue all you would have to do to come up with an earnings number is accurately predict gross margin and tax rate. (that's all?) so on earnings of say 8 billion a 4% difference in gross margin would indicate a range of ~ 23 cents a share. Compound that with a 4% difference in tax rate (12 cents) and you could be off by 35 cents a share. And you knew the earnings!

Is that enough of a disclaimer?
Because I have to...
1.22 on 8.3 billion in Revenue

Writer is long Apple. Don't believe a thing he says, he is not particularly stable as evidenced by his willingness to predict (guess) earnings KNOWING he cannot possibly be correct.

So listen to what the Analysts say about the business

Apple Laptops Squeeze fun out of Business for Hewdell Packovo

Apple is going up-market.  Oh you say they were already there?  Not like this.  And what it means for Apples Desktop will be interesting to see too.  The new MacBooks and MacBook Pro's are beautiful.  Anyone that uses a laptop of any OS would want to use one.

Apple is telling the rest of the PC Business don't even try we will crush you if you try and chase us in the high end.

It was inevitable that as the price declined on the "commodity" end of the computing business that there be more differentiation.  That one company (Apple) has come to dominate the high end, while playing the underdog in the marketplace is amazing.

Remember the iBrick Apple building its own Factory Rumor?  ...  Ya well the fact that Apple is not selling a cheap laptop is as a result of that decision.  

Since Apple does not own factories (No-well less Fixed costs to distribute) they are not concerned about the utilization rates of those factories.  No Fixed costs or in place assets that must be used.  Apple could be the largest "virtual manufacturer" in the world.  (Made up but I will update if anyone knows for sure).   As a result, Apple can maintain high margins while Hewdell Packovo, all try to figure out how to compete.  

HewDell Packovo

The last figures I saw Apple 66% of the computer business selling for more than $1,ooo.  That means that not only is Apple making high margins  they are squeezing all the profits out of their competition at the same time.  At best 34% of the high priced Lappie business is left for Acer, Sony, HP, Dell, Lenovo, Panny....)

The Take Home (short term)

Apple has decided to forgo some level of market share growth in order to maintain high margins on their Laptop computers

The Take Home (Longer Term)

The PC business may continue to grow in unit terms but Apple is telegraphing by this decision that they think in Dollar terms the business is maturing.  The evidence suggests that further differentiation is the way to maximize the profit available for Apple.  This necessarily will limit growth of income from PCs

What this means for company growth (iphones product X) in the future is a discussion for another day (Asus as Volkswagen)

PC MAG  Dan Costa

Mac NZ Mark Webster

iBrick predictions 50-50

Apple "Tax"

Apple v Dell

Kvetching iPhone

iPhone is the Coolest Gizmo Ever.  Of this there is little doubt.  Even Joe the Plumber agrees!

That said I have a list of things that have begun to get on my nerves with my iPhone.

iPod

Prior to V. 2.2 a video podcast could be played as a video OR alternately as a Podcast.  This functionality is gone and it means that even if all I want to do is listen to the audio I am forced to leave the screen on wasting the battery.  There must be a way to let me listen to the Audio.

Podcasts now roll to the next file at the end of a recording.  Why?  I could see why you would want this in an audiobook but not a podcast.  Just End.  or better yet give me a choice in settings.

Maybe I am alone on this but the "Not New" flag is unreliable on syncs.  Meaning after listening to a recording to the end.  I sync my iPhone and it both does not reset as being read on iTunes and then is re-loaded as new content on my phone.

Alarm Clock

So do you think that clicking into the clock, then the alarm clock, then hitting edit, then selecting which of the multiple alarms you might have you actually want to edit, then setting a time, and then finally saving.  (Oh by the way you have to get up in 5 minutes!)

Mail

Mail Box that can deal with more than one account.  Because the iPhone cannot deal with more than one account there are 4 clicks to jump between inboxes.

Calendar.

Why limit me to iCal?  (or Outlook?) aren't there some open calendar schemes that could be supported?  Say Thunderbird?

Synced calendars don't show up.  Makes it unusable for me.  There are multiple calendars updated by multiple people that I need information from.  This should, to coin a phrase, Just Work.  In my mind it is the baseline sales pitch for the whole Mobile Me-Apple-environment thing.  So I use Google calendars.  

An aside...  Do you think that Apple can compete long term with Android if the Google Calendar WEB Application is better than what is written in native code on the device?  

Contacts

Give me the ability to forward a contact in an email (or text).  Preferably in multiple formats but as a VCard for sure.  how embarrassing to pull out a pen and paper to write down information that I have to re-type into an email.   The people that see this are not thinking Gee Where can I get THAT phone.

Lastly is the most obvious.  Copy & Paste!  

Some Recent iPhone/Touch writeups

Verizon iPhones

Rimm Spends to keep up

Android and the iPhone

Iphone/Touch Kick Nintendo's Everloving ass

iPhone Sales projections (With Real Math and stuff)

Writer is long Apple, and is sad he listened to the little voice in his head that said "Sub-Prime" it's the wave of the future!  Don't let this guy be the little voice in your head.

Apple Refuses to give away Computers: This investor Cheers!!

$899 computer....  

Apple said their margins were going to get squeezed over the next year and the whole world thought.  Oooohh Apple's giving away free stuff!  (However unlikely I thought it was a possibility too)

Real back of the envelope stuff here but here it is.  Apples PPU (Price per unit) on computers of all kinds fell only 80 bucks from the year ago quarter.  

If Apple dropped the price of the lowest price laptop by $200 bucks and since the product mix favors sales of the lower price laptops a $200 price drop would have an outsized effect on the average.  combine that with the falling price on the Air and average PPU could drop by $200 would mean that just to maintain revenue equal to last quarter they would have to sell 20% more computers just to maintain their 3.6 Billion in Revenue.

So here is the take home.  If the business is growing. and revenue is growing.  Don't give up margin.

Apples cost to make a less expensive (at retail) computer is only pennies cheaper than making a more expensive one.  Apples strategy has and apparently will be (until it is not) to try and add further value to convince us that we do not want a $600 laptop.  (In fact Apples average PPU will be crushed this quarter anyway because of the Back to School promo but will be similar YOY)

I will write some more later on the effect this has on Earnings Growth prospects for next year.

Here are some related links

Reasons for Narrower Margins

Earnings release next week

Apple Crushes Dell

Why Apple should pay a dividend

Is Apple stock cheap?

Writer is Long Apple and is depressed that the Red Sox cannot beat the team from Tampa.  If your depressed you may be a Red Sox Fan too.  Don't love the Red Sox it only brings pain.  Love Apple but not because of Writer OR the Red Sox

Verizon iPhones on the Horizon?

AT&T Exclusivity

 

Apple's decision to be exclusive to AT&T is not based on the revenue from AT&T alone.  We know this because of the bleedingly obvious fact that they would have significantly more revenue selling to a larger market with lower subsidy fees than to a smaller market with higher subsidy fees.  Apple is currently made the iPhone available to significantly less than half of the US handset market.

So was this a strategic decision by Apple to NOT manufacture a CDMA phone (Verizon) to control development costs? 

Given the hiccups over the last year with Apple product launches you could see why they might have wanted to focus on a single product. That said if the 3g is safely being sold in 70ish countries and being manufactured at volume is it possible that a CDMA Verizon iPhone be coming soon? 

 

It is not entirely clear what AT&T is paying to Apple for each iPhone added to its network.   The rumors put it between two and three hundred dollars per unit, about double what is reportedly the current standard subsidy for non iPhone smartphones.  The Exclusivity agreement reportedly extends for 5 years (2011). 

 

What raised the issue for me is the outstanding G1 Pre-sale of 1.5 million units.  Significant evidence of demand for an "iPhone like product" available on a network other than AT&T.  There is no way to know for sure but I strongly suspect that 1 million of those G1s are potential iPhone sales that were unwilling to accept AT&T as their lord and savior.  T-Mobile is only 10% of the market but credible competition is coming so why lose out on profit AND give the competition a leg up in by providing an iPhone free zone within which to sell?

 

As stunning as iPhone sales have been in the US they have been limited for a number of reasons.  Tethering to AT&T reduces the possible US market by more than  half and limited outlets (Sales by only Apple and AT&T about 2200 stores all in) further constrain availability.  Now iPhones are widely available at 850 Best-Buy locations and 4200 Wal-Marts around the country.  Look RIMM will sell phones HTC will sell some phones but everyone knows who the competition is.  The Coolest Gizmo Ever (CGE)

 

One wonders...How much would ATT have to pay to limit sales of a product to less than half the available marketplace and by doing so give a leg up to the competition?

 

So what is the point?  There is no denying gravity.  There is immense support for the existence of a Verizon CDMA iPhone at some point in the not too distant future.  Will it happen?  Not a clue.

 

Writer is long Apple and is a customer of AT&T.  He does not hate his carrier.  You may hate your carrier but don't be a hater.  Don't hate on Me or Apple or AT&T  because of anything this lunkhead says either.