• Newsletter Issue #324

    February 13th, 2006

    THIS WEEK’S TECH NIGHT OWL LIVE UPDATE

    When I took college-level broadcasting courses years ago, I learned one salient fact about performing, one that I try to follow through on each show. You see, the radio personality can’t assume he or she is talking to a large audience in a spacious auditorium. Delivery has to be direct, intimate. When you speak into a microphone, you have to imagine that there is just one person seated next to you in the studio, and that is your audience, your entire audience. If you succeed in keeping that person interested, then those seated in front of their radios will be similarly interested.

    At least, that’s the classic approach to take. Of course, there are lots of variations on this theme. Shock jock Howard Stern, for example, creates a setting in an imaginary school locker room, where teens and perhaps their teachers talk frankly about a number of subjects, from the news of the day, to more personal issues, such as sex and coping in this crazy, complicated world. It works for him, and he relishes in pushing the right buttons and the wrong ones, but it’s not an approach that I care to take, or could do well even I even tried.

    This isn’t to say I don’t enjoy the unexpected on my show. Take David Biedny, a highly talented writer and special effects artist. I created “The David Biedny Zone” segment for him simply because he relishes the opportunity to say precisely what he thinks, even if he does rattle a few cages. Sometimes his conversation approaches the edge of acceptability in mixed circles and moves a bit beyond, but he also knows what he’s talking about. So even if he upsets your sensibilities a little bit, well, I suppose he’s succeeded in making you think a little differently than before.

    On this past week’s show, we featured a long session with David, where he brought us up to date on his reactions to Apple-related issues since the first of the year. In addition, we featured a tech update from noted industry analyst Joe Wilcox, of JupiterResearch. We also heard from David Loomstein, Intego’s newly-appointed U.S. Senior Business Development Manager, who described the company’s line of Mac security products.

    Our February 16th episode will feature Craig Crossman, whose Computer America radio show is the longest running syndicated program of its type. By the way, I’m also a special correspondent for Craig’s show, and I consider him a good friend. More guests will be announced shortly.

    In case you’re wondering about that other show, “The Paracast,” we have a couple of shows almost ready to roll. We hoped to debut this week, but the site and other elements just aren’t ready, and we’d like to give the show a little promotion ahead of its debut. So we’ve decided to postpone the show’s debut until the latter part of February. Our first guests will include the famous author of over 160 books, Brad Steiger, and the always outspoken Jim Moseley, publisher of “Saucer Smear.” Other guests include long-time UFO advocate Tim Beckley, who is known to some as “Mr. UFO.”

    And don’t forget our weekly contests. So far we’ve given away such prizes as iPod shuffles, iPod accessories, memory upgrades, network music players, video tuner/recorders, software and books. More great prizes will be offered in the weeks to come.

    If you haven’t heard our program, be sure to visit The Tech Night Owl LIVE Web site to listen to our archives or download the Podcast version. Enjoy.

    CAN APPLE CONTINUE TO RATTLE THE CAGES?

    It probably didn’t take much development money to finance the latest upgrades to the iPod product line. All it required was removing some flash memory from the iPod nano and shaving prices on the shuffle. The end result was, of course, to make it cheaper to buy one as a Valentine’s Day present for your significant other, and confound Apple’s competitors big time once again.

    Indeed, when the iPod was first introduced, the critics pounced upon the product as being overpriced compared to the competition. Apple relied on a superior user interface to gain its place in the sun. Indeed, the music players of the time were clunky little devils, and some, in fact, weren’t so little. In general, they weren’t very user friendly, and, frankly, they were of the sort that you’d just toss in a drawer or closet after struggling to master.

    In fact, I recall reviewing some of these devices in those years, and I couldn’t imagine using them on a regular basis after the test process was complete. In fact, I was anxious to just return them to the manufacturers after completing my articles. Were they truly meant to replace the Walkman? They were works in progress, to be sure, and the manufacturers still didn’t get it.

    Apple’s big secret was not to invent a music player from scratch, but to find good parts, and assemble them in an attractive case. But the next part of the equation was the most important, and that was to make the product as easy to use as possible. The real success factor, however, was the iTunes Music Store and its seamless integration with the iPod. Then Apple added Windows support, so that little Mac curiosity soon became a worldwide phenomenon, embraced by plain folk like you and I, entertainment figures and even some world leaders.

    In order to keep sales humming, Apple decided to run scared, to stay ahead of the industry by not resting on its laurels. Yes, even if a model is successful, such as the iPod mini, that doesn’t mean it shouldn’t be discontinued and replaced with a new form factor. By the time the rest of the industry figures a way to catch up with the iPod nano, there will be an even better model. In addition, Apple continues to take full advantage of the lower costs of production, when possible. So the $99 iPod shuffle is reduced to $69. Based on economies of scale, Apple is able to cut the price and still make a decent profit. Of course, Dell succeeded in the PC business by cutting margins to the bone and using volume sales to keep the prices low. In this sense, Apple is outdoing Dell by passing along the savings to you.

    Dell, by the way, discontinued its hard drive-based music players a few weeks back, hoping that it’ll gain traction from its $99 DJ Ditty. Imagine having to actually pay substantially more for a gadget from Dell.

    The key to Apple’s success in the music arena is to assume that the competition is ready to overtake it at any moment, and to continue rolling out new products and price changes. Keep the other companies off guard and they won’t figure out the real way to compete with the iPod, and that’s to make a product that’s more attractive, easier to use, with a complimentary music service that is integrated seamlessly. Indeed, the rest of the music player market remains scrambled, with companies still struggling to get the message.

    Now we have reports that Microsoft might be working on a music player that will serve as a reference design, one that will indeed trump the iPod. But it’ll take a few years to deliver, at which time the iPod and its companion products will have moved way beyond their present level. That is, if Apple continues to reinvent the wheel, or scroll wheel if you prefer.

    Apple, of course, took the same approach with its Intel transition. Faced with the prospect of slowing sales as customers awaited the new products, it got out its first two MacIntels months ahead of schedule, and moved up its transition timetable by a full year. That means, it hopes to be done by the end of 2006, rather than 2007. I rather suspect that may not be sufficient, because the models that still feature PowerPC processors will soon be bought mostly by people who need to run legacy applications and don’t want to wait for the arrival of Universal versions. Others will continue to wait on the sidelines.

    On April 1st, Apple celebrates its 30th anniversary, and I’m not alone in suspecting it’ll do more than just cut a birthday cake. Just in time for schools to order their new computers for the coming year, you can probably expect an iBook replacement of some sort. It would be reasonable to expect it’ll undergo a name change, probably to MacBook, and feature a single core version of Intel’s Core Duo processor. None of this requires reading tea leaves. Just look at Apple’s direction, and Intel’s processor development plans and you can arrive at a reasonable conclusion.

    The big question mark will be whether Apple can cut the price, the better to compete with those cheap PC laptops. It’s not that $999 isn’t a good price for what today’s iBook delivers, but $899 would be more acceptable in a world where Dell delivers an entry level note-book for $449, after rebate. Now it is perfectly true that even that basic Dell costs over $1,000 if you add even a few essential options, such as increasing standard RAM from 256MB to 512MB, increasing the warranty to a year and bundling even the most basic software package. But, as I’ve said before, people don’t necessarily read the fine print about what they need to have a fully-outfitted computer.

    I can foresee a revised Mac mini equipped with enhanced media center features coming along at the same time.

    If we take the assumption that Apple is feeling the pressure, you can expect enhancements to the MacBook Pro line in the coming weeks, with both 12-inch and 17-inch versions. I rather suspect the paucity of Duo Core chips is a main factor in limiting Apple’s introduction to a single model.

    Where does that leave the Power Mac? Well, Intel is expected to introduce the chips that Apple will likely use in its professional desktops in the second half of the year. I wouldn’t be surprised if much of the development work on the new models is already done, just waiting for the parts to arrive. In fact, you may even hear the official announcement during this year’s WWDC, and that the first units will ship in August or September, which is a common introduction timeframe for new desktop Macs.

    With the threat of Windows Vista coming, will Apple still have the resources to get Leopard off the starting get and into the stores before the end of the year? Don’t be surprised if it does. Apple isn’t taking threats to its newfound success lightly and the pressure won’t let up.

    THE TECH NIGHT OWL: WHAT’S WRONG WITH AMERICAN CARS?

    You have no doubt read the headlines. The remaining players in the U.S. auto industry are in big trouble, and GM, for one, may even be close to bankruptcy. They are in the process of closing underutilized plans, shedding employees, and attempting to reduce benefits to retirees. At the same time, they are trying all sorts of pricing policies, from cutting prices to continuing to bribe people to buy their products, which just confuses everyone.

    Ah, the good old days. When I was a child, the U.S. auto industry was king of the hill, offering the best, flashiest cars. Imported vehicles were curiosities or niche vehicles, filling a product void not suitable for mass production. So if you wanted something really cheap, you might buy a VW Beetle, but the well-heeled would lust after a Rolls-Royce. I think you get the picture.

    An oil crisis or two and the growing perception that American cars were unreliable changed things considerably over the decades, and, as you know, Toyota is close to becoming the number one auto maker on the planet. It’s not that Toyota offers the flashiest or fastest cars. In fact, there’s the general perception that they are nice looking overall, perhaps a bit dull, but they are user friendly and incredibly reliable. That counts for a lot of you cherish long drives, and don’t enjoy taking side trips to the dealer or having the family car towed away because something failed.

    This doesn’t mean that distinctive cars have no role to play. A BMW 3 Series stands apart from the crowd, and it also offers an unparalleled driving experience and decent reliability, so it sells well. Mercedes-Benz was once regarded as the premier luxury make, but it has been overcome by rampant defects and is struggling to regain its luster.

    At one time, and I suppose some still feel this way, it was thought to be almost unpatriotic to buy a foreign car. But the definition of a real foreign car is blurred these days. My 2002 Honda Accord was assembled in Ohio, built mostly of American-made parts. Other than the fact that the company who made it is headquartered in Japan, it is as much an American car as, say, a Ford. And speaking of Ford, the quintessential American car maker, how many of its cars are really built in Canada or Mexico? Did you know that one of Ford’s midsized cars is based on a platform designed by its Swedish subsidiary, Volvo, or that another is based on a design from Mazda of Japan? The distinction blurs.

    Indeed, it probably doesn’t matter to most where a car is assembled, so long as it looks good, drives and handles at least acceptably, and doesn’t require frequent visits to the repair shop. Here, my personal experiences with American cars hasn’t been all too good, and I expect it mirrors that of many others.

    When I was very young, a leased a red Pontiac, equipped with a big V8, sports suspension, fancy radio and just about every other option on the order sheet. To be sure, I could barely make the monthly payments, but it handled like a dream. But it was a dog when it came to reliability. The transmission leaked and needed to be rebuilt after just 1,000 miles, and various and sundry defects of a less serious nature made me quickly regret my choice. This was my first American car, and I vowed it would be my last. But I gave the American car makers another chance, when I purchased a Buick Skylark some years later. Again, it was decked out with a reasonable number of accessories, and it had some delivery defects, such as rattles and the wheel alignment. But a few dealer visits quieted things down and it was actually a fairly reliable vehicle.

    In fact, I was impressed enough to acquire a Buick Riviera in the 1980s. I had gorgeous cloth upholstery, a supercharged engine, and the fanciest radio of the time. It also rattled like a truck, and had a sufficient number of assembly defects to frustrate. Again, repeated dealer visits quieted things down, but I figured enough was enough and I swore off American cars, once again, until the early 1990s, when I took a chance on a Saturn. Yes, Saturn, which has become GM’s failed effort to beat the foreign makers at their own game.

    Here I was lucky. The first one I bought, a white SL2 with all the options, was cheap, economical, handled well and was fast enough not to embarrass. The downsides were few. The engine could get buzzy and some of the door fittings vibrated in sympathy. But the factory and the dealers understood the problem and thus a couple of hours spent fitting foam and other goodies massaged away the most annoying noises. That first Saturn survived the move from New Jersey to Arizona in good form, and I was impressed enough to replace it with an updated model of near-identical configuration several years later.

    My final foray into the American car arena was a 1999 Cadillac Catera, built by GM’s German subsidiary, Opel. All right, so it wasn’t an American car, just one built by a company headquartered in the U.S. I’ve written about it before, and I’ll only state that it suffered more than 30 visits to the dealership in the three years I had it and was an endless source of frustration. The Catera’s replacement, the CTS, supposedly is far more reliable, and has actually gotten decent reviews from the car magazines for its polarizing looks, ride, handling and reliability. In fact, among the GM brands, the new Caddies are one of the few success stories, simply because the company decided to actually build vehicles that people want to buy. Ditto for Ford’s new Mazda-derived Fusion, or the Chrysler 300, which actually has suspension and interior parts sourced from Mercedes-Benz.

    My feeling is that there’s nothing wrong with the American auto industry that good products can’t cure. But I feel for the thousands of employees that will be displaced because these companies got fat and complacent. Maybe these companies, after undergoing various and sundry overhauls over the years, will finally get the message about what they need to do to survive. Those pockets of success among the aging car lines clearly shows they do have the talent to do the right thing now and then, and that, my friends, may be their only hope for long-term survival.

    THE FINAL WORD

    The Mac Night Owl Newsletter is a weekly information service of Making The Impossible, Inc.

    Publisher/Editor: Gene Steinberg
    Managing Editor: Grayson Steinberg
    Marketing and Public Relations: Barbara Kaplan
    Worldwide Licensing and Marketing: Sharon Jarvis



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