• Newsletter Issue #595

    April 25th, 2011


    I recently confronted identity theft up close and personal in a totally unexpected way. As those of you with PayPal accounts know, whenever a transaction occurs, you get an email notice. Well, I got one, but it wasn’t anything I expected to receive.

    It seems someone had nearly emptied my account with the purchase of something from a consumer electronics outlet. Well, I got on the phone to PayPal support, and, realizing this transaction was fishy, they immediately refunded the authorization to my account, which I promptly moved to my wife’s account for added protection. Since the charge was made using my PayPal debit card’s number, that card was terminated with extreme prejudice.

    I also contacted the dealer in question, and upon realizing the transaction somehow bypassed their usual verification measures — or so they claimed — they cancelled it from their end, sending me the documentation I needed to alert the authorities about the thief.

    The real question, though, is how someone go ahold (or guessed) my debit card number, and therein lies a tale fraught with possibilities. You see, a local merchant might capture the number when you’re making a purchase, and then keep that information for nefarious purposes. Or they will skim the data from your card when you insert it into a card reader to make a transaction.

    We covered the subject in detail this week on The Tech Night Owl LIVE, where we presented an update on how to protect yourself from identity theft, with a focus on smartphones, from security expert John Sileo, author of “The Smartphone Survival Guide.”

    Outspoken commentator Peter Cohen, co-host of the“Angry Mac Bastards” radio show and Executive Editor for The Loop, offered his unvarnished views about Apple’s stellar financials for the March quarter, and his issues with so-called financial analysts.

    Industry analyst Stephen Baker, of the NPD Group, provided insights into Apple’s financials, the state of the PC industry, and sales prospects this year for flat panel TVs.

    On this week’s episode of our other radio show, The Paracast: Gene and Chris present an encore appearance by paranormal investigator and writer Micah A. Hanks, publisher of The Gralien Report, who will deliver new information about the legendary “Mothman” creature of West Virginia, and other compelling mysteries.

    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.


    No doubt consumer electronics companies around the world are trying to find a way to tap into the reasons behind the iPad’s incredible success, and leverage them to their own advantage. Even when sales in the last quarter weren’t quite up to industry expectations, Apple simply stated it was the result of the “mother of all backlogs,” and that they were doing everything they could to catch up with demand.

    Had there been more product out there, the sales figures would likely have reflected it, they said. Sure, I suppose it doesn’t take much cynicism to conclude that Apple COO Tim Cook was in high spin control mode when he made that telling pronouncement about the iPad 2’s inventory situation. But it’s also true that the product is really backordered. Go into any store featuring the iPad 2 — as I have done in recent days — and you will see precious few units available. If you want to order one from Apple’s online store, which ought to have the best inventory outside of one of their retail outlets, expect to wait one to two weeks.

    Clearly the channels aren’t flooded with the iPad 2. And it doesn’t matter what the cause might be, although Apple denies that the catastrophe in Japan is having any material effect.The fact of the matter is that the demand still can’t be satisfied.

    Would that Apple’s competitors would confront such a “problem.” More to the point, it doesn’t appear as if people who can’t get instant gratification from Apple are going to competitors to pick up a Motorola Xoom, a BlackBerry PlayBook, or any of the other iPad wannabes. The situation isn’t playing out that way.

    A typical comment about the situation provides a sensible answer: This is an iPad market, not a tablet market. Yes, perhaps the arrival of the iPad did seem to vindicate the concept of a tablet computer that was first espoused by former Microsoft CEO Bill Gates over a decade ago. But that pronouncement wasn’t followed with any trendsetting products. Instead, PC makers grafted stylus-based touchscreens onto traditional note-books, and pretended they had somehow invented a totally new product.

    So the nascent tablet category remained nascent. Physicians adopted them as tools with which to manage patient records, and perform examinations. But if you’ve ever observed a doctor’s assistant clumsily switching from stylus to keyboard to manage data entry, you’d realize just how poorly the concept was developed.

    Now if you believe the claims of Apple co-founder Steve Wozniak, Steve Jobs would have built an iPad in 1984, had the tools and technology been available. To Wozniak, the iPad represents the culmination of Jobs’ search for the ultimate personal computing appliance. The inspiration can also be traced back to tablet concepts of the 1970s, or the handheld computing devices that were employed by the crew of the starship Enterprise in the TV series “Star Trek: The Next Generation,” which premiered 1987. But I don’t know of Jobs was watching.

    The key to the iPad, however, may not be the ultimate realization of a proper tablet form factor, but the development of a unique, iconic product with just the right ingredients to attract loads of customers, and keep them satisfied. Sure, other companies can build tablets that sort of look like iPads, with equally powerful internal workings. But they don’t have the iOS, nor the seamless app and syncing ecosystem to compete.

    Besides, how can you compete with a cultural icon?

    It’s the whole package, not just the raw bill of materials, that make the difference. And you can’t just make magic by checking off features on a bullet point presentation. Certainly, the consumer electronics industry tried that before, with the iPod. But the iPod, in its own way, heavily influenced the iPad as far as sales were concerned. There were digital music players around, but none caught fire. The iPod put it all together in an attractive fashion, and today, even though overall sales continue to decline, its dominance of the market remains intact. Besides, since the iPad and iPhone contain the functions of an iPod, you could say that, in a sense, the iPod and its alternatives continue to grow at an incredibly fast clip.

    Perhaps the consumer electronics makers ought to learn to show their feelings about a product concept, rather than just have a committee work things out from a set of objective standards and practices. You can’t just innovate with check boxes. But these companies have been playing that game for so long, perhaps they haven’t a clue how to unleash the creativity of their employees to design gadgets that are actually better than the iPad in terms of delivering a compelling user experience, a feeling of joy as users enrich their lives, their digital lifestyle.

    As I said, magical experiences don’t happen in committee rooms. They don’t spring full-blown out of the rush to imitate someone else’s product. If the industry wants to beat Apple and their own game, it’s not going to come with me-too products at similar or higher price points.

    I suppose they could strive to take on Apple with cheaper gear, but so far the only products that are less expensive than an iPad appear to be utter garbage. A low-cost knockoff is only going to attract customers who cannot afford the real thing, and if the user experience is sharply inferior, they’ll be returned. It’s not the same thing as making a cheaper version of an article of clothing, or a popular fragrance. Being able to look fashionable for $50 instead of $5,000 can sell lots of garments, and if the imitation appears to be close to the original, few will notice or care unless they are connoisseurs. But that’s no way to beat Apple and the iPad.

    But even if the iPad is truly a category unto itself, that doesn’t lessen the pressure on Apple to make them better and better every single year. I have little doubt that someone from a competing company will ultimately find a much better way to build a compelling tablet computer. If the concept gets the green light, Apple will have to work that much harder to stay on top. And that would be a good thing, when and if it happens, since every potential user will benefit.


    In the old days, folks were inclined to keep the family TV for years. When the picture dimmed, or the repair bills seemed high, you replaced them for something newer and, one hopes, better. As your family expanded, you’d add a second or third set, if you could afford them of course. The industry depended on both growth and replacement to prosper.

    At least that’s my personal history. I didn’t buy the most expensive model, but chose products that were rated well, and delivered good pictures. In almost every case, it was the threat of a huge repair bill that made me go out shopping again. But I have to tell you that I ordered several sets over the years by mail order (and online merchants as the industry recognized the expansion of the Internet). It’s not that I ever had a car large enough to carry those things home from the retailer, other than the 27-inch Sony I bought for my son, Grayson, in 1995.

    That set, by the way, is still here, ready for Grayson when he returns home from Madrid for his annual visit. It seems to work as well as it did when it was new, and I highly doubt you could expect 16 years of serviceable life from very many of the current models.

    Certainly the arrival of major new technologies helped the TV industry expand. Both high definition and flat panel sets (LCD or plasma) fueled major growth curves. As production techniques improved, it reached the point where $1,000 could cover the cost of a high-quality flat panel TV that once cost 10 or 20 times that much.

    But all good things must come to an end, and it seems as if TV sales are flattening once again, and not because of the slim profile cases. Most of the customers who wanted flat panel sets have them. Other than serving the needs of those who need to replace an older TV, or the few who can afford another set, the industry has been striving to find new ways to deliver an old product.

    Yes, picture quality continues to improve in incremental ways, but I doubt that most of you could tell the difference between a 2006 set and a 2011 equivalent without comparing them side by side, assuming similar screen resolution ratings of course. So the TV makers have struggled to find new must-have features that will continue to move product from the store warehouses to your living room.

    The incredible success of “Avatar,” the most compelling 3D movie of our time, convinced TV makers to add 3D to their gear. They even developed fancy glasses with which to inflate the already bloated price tags. But it doesn’t seem as if the uptake of 3D has been as high as they anticipated, or hoped for. Yes, cable and satellite TV services are offering a modicum of 3D fare. You can buy a Blu-ray player with 3D, and watch the handful of movies offered in that format. But it’s the chicken versus egg syndrome. The case for 3D hasn’t been made.

    I recall when I finally bought the 2D Blu-ray version of “Avatar” when it first came out. Yes, I had a wonderful time watching it in 3D at the local multiplex, but I enjoyed it just as much without the glasses and the eye-popping embellishments. I expect most of you would say the same.

    So while 3D TV remains a future possibility — and maybe developing technology to eliminate the need for glasses will help — the consumer electronics industry is devising other schemes to make you place that order. So instead of just watching one of the hundreds of channels the cable and satellite companies send your way, or a Blu-ray disc, they want to entice you to get a “connected” TV, which means one that can receive streaming online content.

    As a result, more and more sets have built-in Ethernet ports — or even Wi-Fi adapters — to enable you to receive content from the likes of Netflix, Amazon, and other companies who make your favorite shows and movies available. More and more of these apps appear to close in on smartphone territory in terms of what they hope to offer.

    Apple is playing that game with the Apple TV. This tiny set top box emphasizes iTunes content, but there’s Netflix, YouTube, sporting events, and other services available. Since today’s Apple TV employs hardware similar to what’s featured in the iPhone, there’s little doubt more apps will be offered in time to expand the available content. There’s even a published report that Apple might license the technology to other companies, so you could buy a TV with an Apple TV module inside. Either way, Apple will be happy to set you up with iTunes content, and a subscription service remains a potential, although it’s still but a rumor. Those greedy cable and satellite companies will have to take notice.

    The real question, though, is whether you really need a “connected” TV, or the one you have will serve your needs. After all, if you want streaming content, there are low-cost set top boxes are there to satisfy that need, without forcing you to buy a new set. Sure, having all those capabilities already bundled in your TV set may be a tad more convenient, but buying separate components is surely a whole lot cheaper. You can keep your present set until time takes its toll, even if the TV makers wish it were otherwise.


    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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    One Response to “Newsletter Issue #595”

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