THIS WEEK'S TECH NIGHT OWL RADIO UPDATE
Net neutrality remains a hot political issue, even though it seems on the surface to be simple. It means that your ISP cannot throttle or block traffic on their pipes, and they cannot prioritize one content provider over another just because a company can write them big checks.
In essence, net neutrality is very much in keeping with the concept of a free and open Internet, but it's immersed in politics. So the opponents will claim that it's an example of government overreach, that they shouldn't be telling private companies how to manage their Internet pipes. But that point of view ignores the freedom of the individual to get what they paid for. It's not that you even have a choice, since there is usually not much in the way of competition in case you don't like what an ISP offers in the United States and want to switch. In most cities, there is just one, or one with decent service, and one with poor service.
The FCC's first attempt at net neutrality was overthrown by a Federal court on the grounds that the agency didn't have the authority to make a ruling in the way they did. So the FCC went back to the drawing board and came up with a curious concept that supposedly prevents throttling of any services, but will still allow an ISP to charge a content provider, such as Netflix, for a dedicated fast lane. Call it trying to have it both ways, and it appears it won't be sorted out until some time in 2015.
In any case, on this week's episode of the The Tech Night Owl LIVE, we welcomed Josh Centers, Managing Editor for TidBITS, and author of "Take Control of Apple TV" and other titles, who discussed the contentious issue of net neutrality, the curious episode where the TidBITS email newsletter was bounced by some major ISPs, Apple's mistakes in dealing with the iMessage "lock" issue that impacted people who switched from iPhones to other platforms, and the good, bad and ugly issues of iTunes 12.
You also heard from former Macworld Editorial Director Jason Snell, who discussed the reasons the print version of the magazine folded. He also gave you his up-to-date comments on the state of Apple and the state of Microsoft.
On this week's episode of our other radio show, The Paracast: Gene and Chris present the one and only and always Don Ecker, host of the real "Dark Matters" radio show (accept no substitutes!) to talk about the death of "UFO Magazine," the state of UFO research, lunar mysteries, possible conspiracies, the almost complete lack of traditional investigative reporting and a whole lot more. You'll also hear Don's answers to questions from our listeners.
Now Shipping! The Official Paracast T-Shirt! We're taking orders direct from our new Official Paracast Store, where you can place your order and pay with a major credit card or PayPal. The shirts come in white, 100% cotton, and feature The Paracast logo on the front. The rear emblem states: "Separating Signal From Noise." We've also added a huge selection of additional special custom-imprinted merchandise for fans of our show.
THE DEMANDS THAT APPLE BUILD CHEAP GEAR
There's a published report from IDC claiming that cheaper tablets are driving growth in the market at the same time that iPad sales have continued to decline. So total shipments, which include those $59 pieces of junk sold at Walmart, reportedly grew 15% in the last quarter. The average price dropped to $294, 13% less than last year.
Now I don't presume to know what customers expect from cheap tablets, or whether the decisions are made on factors other than price. If a tablet is meant as a cheap consumption device, for reading and watching videos, I suppose there are plenty of choices. Consider an Amazon Kindle, which is decent enough for such purposes. Amazon manages to keep the prices low by giving up on potential profit, hoping that sales through their online storefront will make the difference.
I wouldn't guess how well the Kindle is doing, except to say that Amazon doesn't break out the sales figures. We do know that the Fire Phone was a huge failure, and it was the one Amazon gadget that was sold for full price at first. It's now 99 cents with a two-year AT&T wireless contract. In any case, it's not that Apple is unaware that people are looking at price tags when they buy tablets, even if they are giving up on performance and the ability to use nearly 700,000 tablet-optimized apps from the App Store.
This price sensitivity is no doubt a key reason why there is a $249 iPad mini, a first generation model. Sure, it's a two-year-old product, and it's not quite as snappy as current models. But the audience for which this is intended may not care so much, particularly if they aren't into gaming.
So does this mean that Apple needs to move downmarket to survive?
That's hardly likely. As I said, cheap hardware means low profits. Manufacturers hope to make up the difference with higher sales, but that seldom happens. Besides, Apple won't sell junk. Low-cost gear, made to lesser standards in terms of components and build quality, is certainly going to tarnish Apple's reputation. Besides, Apple will never be able to compete with those $59 pieces of junk. It's a huge waste of time.
I even wonder how many of those cheap tablets end up being returned to the dealers, or just placed in drawers or closets because they just don't work very well. This isn't the way to stay in control of a market.
Apple's iPad plans clearly include a heavier emphasis on the enterprise. In addition to the recent marketing deal with IBM, Apple is reportedly adding enterprise sales people. So new sales may help compensate for the fact that consumers aren't apt to upgrade their iPads as frequently as an iPhone.
Now it may well be that those cheap iPad minis will be flying off the shelves, thus encouraging Apple to keep them in production. Or maybe to produce a newly designed version with Retina display and beefed up innards that will continue to be available for a low price. Right now, it would seem that the original Retina iPad mini will hit the $249 sweet spot next fall if past is prologue.
Still, Apple will continue to earn high revenue and record profits overall. It's possible that iPad sales will continue to decline for the holiday quarter, and the media will complain. But if total sales and profits otherwise increase at a healthy clip, will it really matter?
Few would doubt that Apple continues to charge more than the competition for entry-level gear. But Apple's entry level is often as good or better than competing products at similar or higher price ranges. Going downmarket to Apple is something that is best avoided. By selling older gear for less, with an occasional price drop on new models, the illusion that Apple is selling boutique hardware is just that. It's not true! Apple hardware tends to start in the middle of a market's price range.
You can, for example, buy a basic PC at a Walmart or consumer electronics store for $300 or so. The cheapest Mac mini is $499, plus display, keyboard and mouse. That takes the total to roughly $650 or so if you stay on the cheap side with the peripherals. But you still get a pretty well equipped computer that performs decently enough for most tasks that don't require heavy-duty audio and video rendering and dedicated gaming.
The MacBook Air, one of Apple's most popular products, can be had for $899 and up. Competing PC UltraBooks are very much in that range, and even more expensive if you choose a convertible model with a touchscreen of some sort.
Apple gear also has a pretty solid reputation for long-term reliability. While you may want to upgrade your iPhone every two years or so, it's not uncommon to find a Mac hanging around performing full-time tasks for five years or more. Apple helps by making recent versions of OS X compatible with a variety of hardware dating back to from 2007-2009, depending on the model. You may lose a few features that the hardware can't support, but most things work quite well with no real evidence of system bloat.
So even if you bought a cheaper smartphone, tablet or PC, would it stay in service just as long? If not, and you have to buy near gear more often, and put up with transferring your data from one device to another, the price advantage soon disappears.
Clearly customers approve, which is why Apple continues to do so well. Indeed, the entire PC industry might do better to emulate some of what Apple is offering. Build better quality gear, charge a fair price, and customers who want value will come. Chasing to the bottom means that customers who want or need to save money end up with junk.
That industry pundits continue to believe that building such junk is the right idea, and that Apple should travel that road, doesn't make a lick of sense.
A BRIEF ENCOUNTER WITH A VONAGE KIOSK
No doubt you've seen those ubiquitous TV ads for Vonage, one of the original companies to offer VoIP phone service; it launched in 2004. Instead of sending your phone calls through old fashioned cables, your call passes through the Internet. It means much lower prices than POTS (Plain Old Telephone Service), but call quality was apt to be shaky at the beginning.
So you'd frequently encounter signal quality no better than a poor cell phone connection with all those digital artifacts, and frequent disconnects. Over time, the technology improved, and the best of the VoIP providers today deliver call quality as good or better than traditional phone service. But that all depends on you having a decent broadband connection, and that might be the achilles heel of such a service. If you have an outage, what then?
Most of the VoIP services I know about offer a "Find Me" or "Follow Me" feature that will forward the calls to a phone number you designate, usually your cell phone, in the event the service, or your router, is offline. I also use that service with my current provider, Voipo, to send the calls to my iPhone after three rings.
I did try Vonage for a while, but gave up over intermittent service glitches and the inability of the outsourced phone support to handle even the simplest problems. I still see those TV ads, and the other day, I encountered a Vonage kiosk at the nearby Walmart.
The reps wearing Vonage T-shirts were handing out "Where Do You Call?" brochures that offered nationwide calling plans for as little as $14.99 per month. But wait a minute! The prices for all the plans are for the first year only. So the basic "U.S. & Canada Unlimited" plan increases to $25.99 thereafter. Prices for the higher tiers also increase at different levels.
Now my Voipo deal is month-to-month, at $15.00 per month with 60 minutes free International calling to 60 countries. I can leave at any time, and the only reason I'd consider a switch is due to the fact that connections, or the ability to make a call, can be slightly flaky. There have also been a couple of network outages in recent months.
But if I were to switch, I'd want feature parity for the ones I need the most. So I asked one of the Vonage reps about "call block." Not blocking anonymous calls, those that fail to display a proper Caller ID, but the ability to selectively block any phone number I want, to blacklist that number.
Most VoIP providers offer such a feature, but it doesn't seem Vonage does. So I asked one of the reps, a burly gentleman, when it might appear, or if it might appear. Considering Vonage has been around for a decade, you'd think they'd offer such a feature. But I was unable to find any listing online, except for a response to an FAQ that indicated, "You cannot block a phone number or caller from ringing your Vonage phone at this time."
Despite that posting, the rep claim that this feature already existed, and when I asked where it was listed on the brochure they were handing out, he pointed to "Anonymous Call Block." I explained in detail what a selective call block involved, and he seemed to believe that the feature was being offered, but couldn't figure out where in the online user control panel one might find it.
He tried to be reasonable by calling up a regional sales rep and attempted to convey my request, but not very well. So I asked if I could speak to the rep, after which I went through the process of explaining why such a feature is needed — and just to stop people from annoying you on the phone is a good reason — and he also felt it was available. All I had to do was login to the control panel to use it; if I had an account of course.
So I asked him to do just that with his account, and he promised to call me back.
An hour later, he kept that promise. I was surprised and pleased to hear from him, but he only confirmed that he was wrong. The block call feature is not available, and he didn't know when or if it would be.
But potential customers who didn't follow up on such a question as I did would have been misinformed. Does Vonage care? Do they even train their sales reps to give accurate information about available features to the public? I can honestly say I'm not sure.
THE FINAL WORD
The Tech Night Owl Newsletter is a weekly information service of Making The Impossible, Inc.
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