• Newsletter Issue #460

    September 21st, 2008


    As the current quarter ends, and considering all the financial turmoil on Wall Street, a lot of analysts are no doubt wondering just how Apple is going to fare. So far the picture is looking mighty favorable, with regular estimates of record Mac sales, perhaps approaching or exceeding three million units, and continued growth from the iPod segment. iPhone estimates are all over the place. It’s either a huge success or even an extraordinary one, if you can picture at higher number of units than anyone expects.

    So in keeping with all these expectations, on last week’s episode of The Tech Night Owl LIVE, we presented noted industry analyst Ross Rubin, of the NPD Group, who evaluated Apple’s recent iPod refresh and their sales prospects for the coming year. He also examined the HDTV market, reporting that, despite the state of the economy, it appears that flat panels will continue to fly off the shelves in large numbers.

    After an absence of a few months, we celebrated the return of web guru Denis Motova who explored the touchy issue of managed hosting and what it means for business owners. You’ll also learned about the legalities of stock photos and movies with Kelly Thompson, of iStockphoto.

    With the release of two major security updates for Mac OS X in recent months, security expert Rich Mogull explored what they fix and whether Mac users face any serious malware threats. His conclusion: Always be wary, but it’s probably not time yet to start installing virus protection software, unless that’s required by your employer or course.

    Moving on to another front, on The Paracast this week, meet author Lisa Lindley, who describes herself as “a haunted survivor of a demonic haunting,” and has written a series of books recounting her experiences.

    During the course of this wide-ranging conversation, Lisa will explain how these alleged evil entities have terrorized her and her family over the last few years, and how they’ve coped with the situation.


    You’d think a company that owns more than 90% of its primary market would understand how to sell its products and services. After all, isn’t that how they made it to the top?

    Well, it appears Microsoft hasn’t found the going terribly easy when it comes to convincing individuals and companies that Windows Vista is impressive enough to make them upgrade. As it stands, many still prefer XP, which has been tested and proven for seven years and has, after service packs and other fixes, proven to be fairly secure (with proper malware protection installed) and reliable.

    In contrast, Vista has been shown to be a bloated, rather buggy beast, with lots and lots of driver conflicts. While the bugs and driver issues are supposedly largely resolved, most older PCs will have difficulty meeting its extraordinary resource requirements without costly upgrades — or replacement. Worse, some of the interface changes, which seem arbitrary rather than logical, will likely require retraining.

    So businesses are showing an understandable reluctance to migrate until absolutely necessary, and that might be years away, since it’s still easy to roll back the operating system on new PCs to XP.

    As far as Vista’s successor is concerned, well Windows 7 will still be largely based on the same code base, so it’ll be just as bloated, if not more so, assuming Microsoft wants to pour lots more features into it. That will probably be a given, since they want to entice people to upgrade. That is, after all, their way of doing business.

    That takes us to Microsoft’s questionable efforts to boost the image, and, of course, the adoption rate for Vista.

    When Microsoft began their $300 million dollar campaign to resurrect the tarnished image of Windows Vista, you have to wonder if they had any real marketing strategy behind it all. Some people say it smacks of desperation, which seems peculiar for a company that is doing so well financially.

    Microsoft’s first attempt was to put supposed Vista skeptics in front of specially-configured PCs, while trying to fool them into thinking it was an even newer Microsoft operating system. Understand these PCs were designed to exploit Vista’s capabilities, so the “victims” of this misguided survey would be satisfied with its performance and stability.

    When they were told that they were, in fact, using Vista, they were supposedly surprised. To most of us, however, they came across as just plain stupid. Microsoft must have realized this too, so they set this pathetic campaign aside and tried yet again.

    The next misbegotten attempt to extoll the virtues of Windows was to pair Bill Gates with comedian Jerry Seinfeld. Now Seinfeld is best known as the star of a popular 1990s sitcom “about nothing.” Indeed the two spots aired so far, one taking place in a shoe store, and the other with a family, also seemed to be about nothing, since any message that would actually make you feel warm and fuzzy about Vista was so subtle as to be missed by most viewers.

    Sure, people talked about the Bill and Jerry show, but they weren’t swayed in any way to suddenly embrace Windows. The general tenor of the chatter was how awful these spots were, and perhaps Microsoft finally got the message, because a third spot was shot, but never aired, and now they’re trying something new.

    Their latest scheme is what appears to be a send up on the Mac versus PC ads, with someone portraying the poor, stereotyped PC who seeks, I suppose, vengeance or just wants to be taken seriously. The problem with this new set of spots, other than that part of the content was created on Macs, is that it just calls attention to Apple’s own ads, and affords them greater prominence.

    More to the point, just what is it that Microsoft is trying to sell? It’s not the PC. They don’t build PCs, just the operating system that is preloaded on most of them. It’s not as if most PC users even have a choice either, other than to downgrade from Vista to XP. Or empty their hard drives and switch to Linux.

    So once again, Microsoft is using the wrong technique with apparently limited understanding of what they are supposed to accomplish. Or perhaps they simply have spent so many years living in a bubble of unchallenged success that they simply don’t know how to demonstrate their product’s advantages or why you might want to give Vista a try.

    But with a large part of that $300 million left to spend, there’s little doubt that, if this particular campaign doesn’t bear fruit, they’ll try, try again! Whether they’ll succeed is another matter entirely, and I continue to have my doubts.


    Over the years, since the iPod became number one in the music player segment, tech pundits have been talking about alleged “killer” players that would soon end Apple’s dominance.

    That, however, hasn’t happened. No company, not even Microsoft with its Zune, has come even close. Indeed, it does appear that the market is heavily saturated and that there is simply less room to grow. Most of the customers out there may indeed have a player already, and that’s likely an iPod, or perhaps two or three.

    Even considering a player’s useful lifetime of two or three years, it very likely means that many iPods being sold these days are additions or replacements. Yes, sales still appear to be growing somewhat year over year, but how long will that happen before people move on to some other gadget? Is the iPhone the ultimate replacement, or will the iPod touch or a possible successor product have that honor?

    Looking at the latest iPod refresh, it doesn’t appear as if Apple has taken extraordinary strides to enhance the device. The nano, for example, returns to the tall and slim form factor rather than the previous fat design. In fact, the screen size remains the same, but you would view videos horizontally rather than vertically, with some aid from Apple’s accelerometer.

    A few more odds and ends, some extra colors and extra storage space for the same price, amount to the sum total of the changes in the nano.

    The touch got a somewhat lower price, a built-in speaker and a slightly rejiggered form factor that comes closer to the iPhone 3G. As far as the classic is concerned, it’s down to one size, 120GB, and a definite end of the line whenever affordable Flash storage can replace most of that. Or sales dip to the point where production simply doesn’t make sense.

    Of course, you might suggest that Apple has no real incentive to make anything more than incremental changes to the iPod. It’s not as if another consumer electronics maker can somehow come out of nowhere and build a music player that would suddenly take control of the market. I think we’re long past that.

    Now it may well be that Apple understands this too, and that the vast majority of their future development efforts will be expended on products in other categories, or their burgeoning Wi-Fi mobile platform. That leads us to the iPod touch, of course, and its possible future directions.

    But that’s a topic that I’ll discuss in more detail in a future issue.


    The Tech 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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    One Response to “Newsletter Issue #460”

    1. Jim says:

      Apple may need to make some answer to music on SDcard. Either incorporate it or blow it out of the water. I vote for blow it out of the water; it’s the Apple way.;-)

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