• Newsletter Issue #573

    November 21st, 2010


    So does Apple really expect you to believe that their most important announcement in years was the arrival of The Beatles on iTunes? Certainly, the negotiation process must have been exasperating, since it took so long to make it happen. I can imagine all the executives involved may simply have been too tired to think clearly, or maybe the announcements were written years ago, hoping it would all come to pass long before now.

    This is not to say that I don’t like The Beatles. I have bought all of their original albums at least twice, though I’ve not acquired the remastered set released last year. I think most fans have all or most of them as well, so I wonder what advantage iTunes is supposed to serve, other than to enrich the Fab Four and their heirs even further, and their embattled recording company, EMI.

    In any case, Saturday night’s episode of The Tech Night Owl LIVE featured Macworld Editorial Director Jason Snell, who talked about the stuff that Apple has given up, such as the Xserve, and then, as a TV commentator, Jason reviewed the current season, along with the winners and the losers. But not The Beatles.

    NPD Group vice president Stephen Baker was on hand to outline the potential sales of tech gear this holiday season, along with the expected hot ticket items. He also covered 3D TV and whether it’s yet a success. And, by the way, since talking with Stephen, we’ve gotten wind of a new technology that will display 3D pictures on your TV — without the glasses! I’ll have more to say about that real soon now.

    Author and commentator Kirk McElhearn says he’s a fan of The Beatles and is pleased with the fact that the Fab Four are now digital, and available on iTunes. So there you go.

    This week on our other show, The Paracast, co-host Christopher O’Brien presents a special episode, featuring the return of Dr. Jacques Vallee to The Paracast. This wide-ranging discussion will include his newest book, coauthored with Chris Aubeck, entitled “Wonders in the Sky: Unexplained Aerial Objects from Antiquity to Modern Times.”

    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 selection of additional special custom-imprinted merchandise for fans of our show.


    Yes, we all know that an iPad version 2.0 will be out early next year, probably in February or March. With the onslaught of supposed iPad killers from Samsung, HP, RIM and other companies, this comes as no surprise. Despite having trouble keeping up with demand, Apple moved the iPad into the top slot among all existing tablet-based computers, with 95% of the market.

    This almost leads you to wonder if the iPad will remain as dominant in its market as the iPod, for similar reasons. The competition will try to trump Apple with extra features, but they won’t be able to topple the iPad so easily. The fact that the highly-touted Samsung Galaxy Tab can barely match the iPad’s price, even though it incorporates a much cheaper 7-inch display, clearly indicates that Apple has the pricing issues down pat.

    Now that they are building loads of them, perhaps economies of scale will even make it possible to drop the price. When industry analyst Stephen Baker, of the NPD Group, suggested that a $499 entry-level price isn’t quite “mass market” when he appeared on The Tech Night Owl LIVE this weekend, I suppose he was largely correct. But if tens of millions of people pay more than that for even a fairly basic personal computer, you have to wonder.

    The original iPod, which blew the digital music player market wide open beginning in 2001, started at $399. Yes, it was considered overpriced then, but customers didn’t seem to notice; today’s cheapest iPod is $49. The iPad’s pricing, on the other hand, is supremely aggressive, and this is confirmed by the inability of competitors to match it.

    For 2011, it’s very possible Apple can deliver a spruced up version, no doubt with one or two digital cameras, for $399 at the entry level. Apple has a corner on the solid state memory markets, and they have no doubt contracted for many millions of LCD displays for this gadget. If they build 30 or 40 million of these things next year, they might be able to make loads of cash and still give you a discount.

    Clearly, Apple wants to fill the market with the iPad, and satisfy every last ounce of pent-up demand. In recent weeks, most of the major retailers of electronics gear have begun to offer iPads, ranging from Wal-Mart and its discount subsidiary, Sam’s Club, to Target and even Verizon Wireless. Isn’t that a change, but it’s also a harbinger of the expected arrival of the iPhone on Verizon’s network early next year.

    There are also published reports that the next iPad will be slimmer, perhaps even lighter, because, at 1.5 pounds, it can be a little much for one-handed use. If Apple can bring the weight down to just over a pound, and perhaps improve display resolution, most of the Amazon Kindle holdouts might just change their ways.

    But here’s a reality check: I do not pretend to have any true inside information on Apple’s future direction. That there will be a camera seems a given. A lower price seems sensible in light of the potential competitive landscape, but that’s not a certainty either. The same holds true for revisions in the case, perhaps employing an aluminum unibody design.

    On the other hand, it all makes perfect sense.

    This isn’t to say that the imitators won’t try to match Apple’s price, however aggressive, even if profits take a hit. They will examine the iPad feature by feature to determine what’s missing and what they can add, even if these extra capabilities aren’t well integrated.

    The most troubling factor is the operating system. Samsung is using a modified version of Google’s Android, despite the fact that Google doesn’t even recommend their mobile OS for tablets. That will supposedly be remedied in the next version, but you also wonder when special apps to accommodate the 7-inch display will arrive. More to the point, does that size even make sense?

    In his recent remarks at Apple’s quarterly conference call with financial analysts, Jobs maintained that the iPad’s 9.7-inch screen is just right for the purposes for which that gadget was designed. He claimed that a 7-inch display, which affords you only a fraction of the screen real estate, was far too small and not sufficiently larger than a standard smartphone.

    Sure, other companies have lambasted Jobs for making that claim. But you have to think: Apple is perfectly capable of taking the very same iPad design and shrinking it to fit a smaller display. This is a trivial engineering decision. It would bring the iPad down to under a pound, and cut the price even further.

    But Apple didn’t go there, not because they have some misguided or paranoid vision of control, but because they want to sell loads of hardware. If their research indicated that smaller sizes weren’t sensible from a usability standpoint, they’re probably right. Otherwise, there would have been a 7-inch iPad too.

    Apple is very much concerned with user experience. Even though some features, such as multitasking, came first to Android, few will deny that Apple found a better way to offer it, and ensure that few apps would be able to suck up too much in the way of system resources, and drag down battery life.

    While I have yet to buy an iPad — I did spend a month with one, courtesy of Apple — I am intrigued by the possibilities of version 2.0. The way things are going, however large the demand, it’s clear I won’t have any trouble finding a place to buy one. In fact, the nearest Target store is right across the street.


    I remember when I was first introduced to Vonage several years ago. Chafing under high phone bills, I was delighted to free myself of the burden and move my phone service online. But the transition was often troubling.

    Despite promises of superior sound quality, I often confronted a digital haze, near as bad as a poor mobile phone connection. There were occasional disconnects, and rapid busy signals, indicating the limited bandwidth was clogged and the call couldn’t go through.

    I also kept one landline, a no frills deal for faxing. You see, Internet — or VoIP — systems have historically had trouble handling faxes, and, despite the fact that it’s a dying technology, I still need the capability from time to time. People still say “send me a fax,” even though I can just as easily scan a document and forward it via email with far greater image quality.

    Well, Vonage’s technology got somewhat better, but customer service has remained a sore point. Most of it is outsourced, and while I have no problem with a company hiring the best and the brightest wherever they might reside, Vonage has found far too many rude techs who are barely conversant in English. So I left.

    These days, Vonage keeps dropping the price to keep afloat, and there’s even a deal that offers free calling to many foreign locales. But there’s so much competition, a company has to earn your trust.

    Recently I spent time with VoIPo, a service run by the founders of HostGator, a large Texas-based Web host. Sound quality has been excellent, but some features remained in eternal beta, and I did run into far too many situations where I’d get rapid busy signals when placing a local call. Customer service is great, but the technology seems a tad unfinished.

    I did appreciate the fact that I could get 60 minutes free calling to international landlines, and the per-minute overseas rate had declined.

    After listening to my friend Steve Kruschen, known on radio and TV as “Mr. Gadget,” extoll the quality of Phone Power, a California-based phone provider, I decided to take the plunge.

    Indeed, it seems that VoIPo may have taken some cues from Phone Power, which also offers an hour of free international calling, but with much lower minute rates after that ceiling is reached. The phone adapter hardware, from Grandstream (the HandyTone 502) is much newer than the Linksys adapter provided by VoIPo, although that may not be a serious detriment to call quality.

    Although the monthly rate is somewhat higher, Phone Power delivers near-perfection in making calls successfully. Call quality is almost uniformly excellent, even to my son’s home phone in Madrid.

    The only glitches I encountered were part of the initial setup process. If you want to move your phone number to Phone Power, they expect to activate your account once that number is ported; there is no temporary number to use in the interim. Then you can add more numbers if you wish. In my case, I wanted to bring two numbers to the service right away, rather than have to confront the potential incompatibilities of running two adapters on my network. Fortunately, their billing people worked it all out for me, and, within two weeks, both numbers were ported and everything was working as it should.

    Now remember that, when you use an Internet phone service, you need to configure your online customer control panel with your home address to support E911 service. That allows the local police and fire department know where you’re located in case of an emergency; it’s not automatic.

    In a sense, I still think that Internet telephony is the wild frontier. With Google Voice, Skype and other alternatives to consider, you have to wonder where this business may go. But it’s a far cry from the heady days of Ma Bell, and a whole lot cheaper.


    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
    Business Development: Gil James Bavel
    Worldwide Licensing: Sharon Jarvis

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    5 Responses to “Newsletter Issue #573”

    1. […] Continue Reading… Please Link to Us!<a href="http://www.technightowl.com/2010/11/newsletter-issue-573-does-anyone-not-sell-the-ipad/&quot; >Newsletter Issue #573: Does Anyone Not Sell the iPad?</a>Related Articles:Yes, Folks, Apple Can Price AggressivelyYes, Folks, the iPad is an IconApple Doesn’t Have to Be First to Succeed!Wacky Apple Acquisition TargetsIn Search of the iPad Killer […]

    2. Bob Perdriau says:


      Seems like some of the more important Phone Power features are Windows only? How can you recommend that?

    3. Jase says:


      I listened to your guest talk about Phone Power VoIP, and I was thinking about trying it out. Thanks for sharing your personal experience with the product. I listen to your show every week and am never disappointed. You have a very good selection of guests. Keep doing what you are doing.

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