• Newsletter Issue #648

    April 30th, 2012

    THIS WEEK’S TECH NIGHT OWL RADIO UPDATE

    Do you pay much attention to ads for a new TV? I don’t recall seeing many in recent years, although you will often see advertising from dealers, such as Best Buy, hoping to entice you into their stores to buy one. But it’s not as if there’s a world of difference from one model to the next. Even the low-cost models offer decent pictures, and a decent level of reliability, at least most of the time. When you see them lined up side by side in a store, do you gravitate to the one with the brightest picture, or just look at the prices? Do you even look at them at an angle, to see how much the picture deteriorates when you move off-center?

    It’s a sure thing the companies who build those products aren’t raking in the profits. In the more advanced countries, the market is saturated. The new TV you bought a few years ago is still going strong, so why upgrade? Do you really need 3D with those godawful glasses? What about apps? Can you live without having streaming from Amazon, Netflix or Hulu? What’s the point? You can get them on a Blu-ray player — and don’t you need a 3D version with your new 3D set? Of course, you can always buy a separate set top box, such as an Apple TV, to get extra content, but Apple still doesn’t offer 3D. Do you even care?

    Well, on this week’s episode of The Tech Night Owl LIVE, tech writer Geoffrey Morrison (@TechWriterGeoff on Twitter), who covers the TV beat for CNET, Sound&Vision and other publications, discusses current technology and when is the best time to replace your old set. But, I’m still waiting for a reason to upgrade the family’s 2008 Panasonic plasma. They do advertise the panel’s life at 100,000 hours, so I’ve got a few years to worry about it. I don’t care about 3D.

    You’ll also hear from cutting-edge commentator Daniel Eran Dilger, of Roughly Drafted Magazine and AppleInsider, who takes a look at Apple’s ongoing record earnings, and then gives you his take on the PC and mobile platform wars, and the likely winners and losers.

    From The NPD Group, industry analyst Ross Rubin also gives you his views on the latest financials from Apple Inc. and Microsoft, and examines the current state of the art when it comes to 3D TV.

    On this week’s episode of our other radio show, The Paracast: Gene and Chris present a return appearance by crop circle investigator Nancy Talbott of BLT Research – Crop Circle Science. During this episode, Nancy introduces to our listeners Dutch psychic Robbert van den Broeke, who claims to possess a number of extraordinary abilities, such as the ability to see dead people, predict the future and, on occasion, serve as a conduit for so-called psychic photography, where mysterious images appear on photos that weren’t seen when those pictures were taken. We will also ask the skeptical questions listeners have posted about Robbert’s experiences.

    Now Shipping! The Official Paracast T-Shirt — Now with New Design! 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, along with a redesigned storefront.

    IF THEY ONLY GAVE TESTS FOR INDUSTRY ANALYSTS

    Do you want to cut someone’s hair? Well, there’s a license for that, and even a test to demonstrate that you have a flair for scissors and combs. Certainly a lawyer can’t put up a sign on an office and defend you in case you get a traffic ticket, or are arrested and charged with committing a crime, without passing a bar exam to demonstrate their basic competence.

    But if you want to advise people about whether a particular high-profile company stands to rise or fall, or just hang on, there’s really no need to prove you know what you’re talking about. If people read what you have to say, you’re hired. If you predict that a company will fail, and they actually succeed beyond anyone’s imagination, it’s not as if you will suddenly be called on the carpet to explain your failure to deliver.

    At least it doesn’t seem that way. You hear the same old analysts plying their trade year after year, making unfounded pronouncements about all sorts of matters, and getting things wrong over and over again. But so long as people believe them, or at least read what they have to say, they keep their jobs.

    Now you just know Apple’s amazing growth since the mid-1990s has put them on every analyst’s radar. Gone are the days when the word “beleaguered” was used as a prefix for Apple. How can anyone possibly suggest they are about to go out of business, or fail at one of their core businesses, when they keep confounding the critics?

    Yet even when they succeed, they are sometimes accused of failing.

    Take the March quarter, where Apple reported selling some 11.8 million iPads. That represented an amazing growth over the previous year, some 151 percent more, but that wasn’t good enough for some. Industry analysts had speculated that Apple would move up to 14 million iPads. They didn’t meet the challenge, thus they failed. Now let’s talk about the Amazon Kindle Fire.

    Oh, that’s right, Amazon doesn’t release the sales figures for the Kindle Fire or any of the other products in the Kindle family. You have to infer them from their overall sales figures, but that hasn’t stopped some from estimating that the Kindle Fire made up more than half the Android OS tablets sold in last quarter. Talk about using psychic powers instead of logic and reason.

    Yes, maybe it’s not at all clear that the Kindle Fire uses Android, but it does, deep down where you cannot see anything but Amazon’s custom interface. It’s not even a recent version, so why even bother? Well, that move no doubt simplified the development process, and it’s a sure thing Amazon wanted to keep the price as low as possible to get a foothold in the marketplace.

    You see, even though Apple’s profits remain sky high, Amazon seldom reports high earnings, even when revenues come in at a good clip. Instead, they continue to plough loads of cash back into the company to fuel further growth. So it is reported that the Kindle Fire is sold for roughly what it costs to build, or perhaps a little less. Although you have the usual mobile computing functions, such as email and Web browsing, not to mention apps, Amazon wants you to spend most of your time at their storefront, with the hope that you’ll buy some of their products and services. To them, the Kindle Fire is simply an interactive online ordering gadget.

    Yes, the iPad has loads and loads of applications, many available for a price. There are 600,000 for iOS hardware, and a third of those are optimized for the iPad. But Apple earns the lion’s share of their profits from selling you the hardware. That 30% take on app sales goes mostly to the cost of doing business, from maintaining an online ordering system, to paying for the staff to review all those app submissions and make sure they pass muster.

    As to iPad sales, well, maybe those who want to cry failure haven’t noticed that Apple is still reporting a five to seven-day delay if you order one online. An ongoing backlog means that there’s demand for the product that’s still not being filled. Apple surely would have been able to move more iPads if only they had enough of them in stock. But they didn’t, and it may take a few more weeks before supplies are sufficient to meet demand.

    And, no, I won’t attempt to predict why the third generation iPad remains constrained. Some suggest that Apple and their component suppliers are having difficulties ramping up the iPad’s Retina Display. That makes sense, since that’s a part that has never been used in a tablet before.

    This also means that the iPad’s competitors aren’t going to be able to match Apple for a while, at least with a high resolution display. It’s not as if parts of that sort are so readily obtained, and it’s well known that Apple is using some of their huge cash hoard to reserve the components they need, ahead of the pack, and leaving just the bread crumbs to everyone else.

    But to the industry analyst, the iPad is an underachiever. Any day now, sales will flatten. Wait till Windows 8 tablets begin to reach the market, which is expected later this year. That Microsoft has been unable to succeed with the Metro interface on Windows Phone is beside the point. They want Microsoft to win, and if Windows 8 bombs, no doubt those same industry analysts will simply shrug their shoulders and tell you that success is inevitable. If not this year, maybe the next. Apple, after all, is always fated to be beleaguered, even if sales continue to soar to new heights.

    THE iCLOUD QUESTION THEY NEVER ASKED

    You can be sure that, when Apple executives field questions at a quarterly meeting with analysts — yes the “a” word again — they will be asked softball or relatively obscure questions about the company’s financial performance that few care about. The analysts might even pose a general question about possible future products, knowing that they probably won’t get a response beyond no comment. Or an Apple executive might disparage the product category, which may be a clue that their solution may be on the way in the near future.

    Or maybe not.

    Apple’s responses are no doubt carefully scripted. When Tim Cook denigrated the merger of the desktop and mobile computer, as in Windows 8, he compared it to combining a refrigerator with a toaster. People laughed, except for Microsoft who might have preferred to call Windows 8 a toaster oven, something that properly melds related functions.

    How amazing that Cook has a flair for pithy comments, reminiscent of his mentor and former boss, the late Steve Jobs. But it’s also true that Jobs worked hard to hone his online personality with careful and repeated rehearsals. In the fashion of the presidential candidate who preps for a debate, I have little doubt that Cook and CEO Peter Oppenheimer worked with their aides to consider all the possible questions they’d be asked, and the appropriate answers, or attempts at corporate spin.

    It doesn’t help that these analysts seem not to have the slightest knack for real journalism. Even though they are allowed one question and one follow-up, you’d think someone would ask about Apple’s real problems, such as the ongoing troubles impacting iCloud. Yes, iCloud may indeed have 125 million users, as Apple claims. I have no reason to doubt the number.

    At the same time, what about the quality of the service iCloud delivers. What about the ongoing problems that are still being reported, particularly in syncing bookmarks and contacts across multiple devices? Take this all-too-famliar example: For the longest time, my Address Book has been filled with multiple entries for some names. Those listings aren’t duplicated on my iPhone, so why is it happening on my Mac?

    Worse, when you delete a duplicate, the deleted entry reappears. And I’m not alone in reporting such issues, and there are more.

    Now perhaps it doesn’t make sense to use one specific example to demonstrate the existence of ongoing iCloud teething pains. But surely one of those analysts could have used the iCloud question to ask how Apple is treating ongoing reports of sync problems and email outages. What about a question about the overall customer satisfaction rate with iCloud, and how does Apple plan to eliminate the glitches?

    Never asked.

    These so-called analysts only have to spend a few hours looking through the support forums at Apple’s site to get a sense of the problems being reported by large numbers of users, and maybe ask a few questions about them.

    Yes, the financials are important, not just for investors, but for millions of Apple fans and customers who remain curious how the company in which they’ve invested their faith and their money is doing. Apple’s audience for those quarterly conference calls goes far beyond the Wall Street community, although the participants are limited to the analysts of which they approve.

    Sure, there’s only so much ground that can be covered in the roughly one hour session, and the financial community will demand answers to certain key questions. But wouldn’t a few left field questions help enlighten people about what’s going on inside Apple? Maybe it would force Cook and Oppenheimer to display some real spontaneity.

    Or maybe the offending industry analysts will just find themselves disinvited to future conferences.

    THE FINAL WORD

    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: Sharon Jarvis



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    12 Responses to “Newsletter Issue #648”

    1. HammerOfTruth says:

      One of the reasons why the analysts don’t answer those type of questions is that they are clueless when it comes to technology, (why do you think they like to quote Rob Enderle). They pretend to know the details on why a particular company is doing so well and then recommend their stock, but it reality, they only want to put a spin on a stock their company wants to buy or sell.

      Just take a look back when Steve Jobs took over Apple, most of the analysts never expected Steve to save the company. A lot of them said that the iMac was the final nail in the coffin. It wasn’t until the iPod became popular and the iTunes music store came out for Mac and PC when they finally thought Apple might be a good buy.

      I personally liked Apple more when they were the underdog. Back then shows like Macworld were magical, and a Steve Jobs keynote was like getting a big wrapped present on your birthday. Products had extra touches like getting a dock with your iPod or iPhone along with a little cleaning cloth. It seems those days are long gone, and the bottom line is profit.

      • @HammerOfTruth, Well, the products are as good or better. As to the cleaning cloths, well having lost many of them, I’m not surprised my wife has a handiwipe nearby when she users her iPad. The Apple cloths were too small, even if you can find them after a few days of use. 🙂

        Peace,
        Gene

      • Peter says:

        @HammerOfTruth,

        Products had extra touches like getting a dock with your iPod or iPhone along with a little cleaning cloth. It seems those days are long gone, and the bottom line is profit.

        One of the reasons I always liked Apple was, way back when, if you bought an ImageWriter (remember those?), it actually came with a cable to hook it up to your computer!

        As he says, it’s the little things that count.

        • @Peter, What Apple is doing is beefing up the raw components of all their products. There has to be a trade off, and that trade off may mean the little cleaning cloths most people lose anyway. But it’s not as if iPhones, iPads, and Macs are being cheapened in terms of the hardware.

          Peace,
          Gene

    2. Jim says:

      It really does annoy me when the media outlets go back to the same so-called “financial analysts” to get quotes every time Apple make some sort of a major announcement. These guys prove time and time again that they don’t have a clue about Apple, or anyone else for that matter. I think a lot of times the reason they can’t help being negative about Apple is because Apple makes them look more stupid than some of these other more conventional companies.

      The company I used to work for provided an IRA for me with a very large well-known financial institution, who shall remain nameless. About five years ago they invited me to a meeting where they were telling me I should get out of a lot of my Apple stock. They said I had too much invested in Apple, if there was a downturn which they expected anytime, I would lose all that money. The money I invested in Apple stock, was money that was left over after I evenly distributed money between the three different funds that they had recommended to me. I had bought small amounts of Apple between $8 and $40 a share. At that time the stock was currently at 130 something dollars a share. They were quite concerned because they expected Apple shares to drop down below $100 a share. They kept insisting that too much of my portfolio was invested in Apple. I finally ended the discussion by telling him that I heard Apple was headed for closer to $200 a share. I’d heard they had some exciting products in the pipeline, possibly a new phone, and the few analysts that I believe in were saying Apple was going to go up. I also pointed out that the reason so much of my portfolio profit was due to Apple, was because the funds they pointed out to me we’re doing a terrible job. I finally got rid of that company a few years later, once I left my job. But before that happened, I got a phone call from that weeks advisor du jour telling me how well Apple was doing, and taking credit for it on behalf of their company. He seemed to forget that they wanted to get me completely out of Apple just a few years ago. Fortunately I NEVER considered listening to them, and my only regret is that I didn’t buy more Apple stock at the time.

      Seriously: If these folks were so smart about the financial world, why are they appearing in newspapers and on TV stations giving advice? Why aren’t they putting their money where their mouth is by investing in some of the stocks that they’re so bullish or bearish on? It’s because they don’t have a clue and they know it. To be an expert all they need to do is know slightly more than the people they are talking to. It’s okay for them to be wrong when it’s not their money on the line. These guys are wrong more than the weatherman and yet they still have jobs. Really makes you wonder.

      Jim

    3. We Are A Petty Bunch, Aren't We? says:

      Really? Is this the best you can do? address book synching? dude, really? dude – it’s a free service. does Apple get any time to work out the kinkage?

      Apple, the true ‘rising from the ashes Phoenix’; the gazbilliondollar company everyone dismissed as dead or at least irrelevant is once again subjected to the parasites and leeches that need to fill vacuous web space.

      Come on! Apple out-rocks and out-rolls any other company and has done so even when they were down and hurting and managed by morons.

      Please go back to using WindozePCs and bitching about them. This is the lamest story of the day. Congratulations. Oh, I heard your mother calling. Your mac & cheese is ready!

    4. Well, actually it’s more than just Address Book — dude! How about syncing bookmarks? How about email that isn’t reliable because of periodic outages? Our business email host, Polaris Mail, almost never has outages. I said iCloud is glitchy and it is — and don’t get me started about iTunes Match. I’ve talked about that on the radio show, and written about it here on several occasions.

      Please take the blinders off!

      Peace,
      Gene

    5. dfs says:

      Gene, I’m amazed that in the course of your work helping computer users you haven’t encountered the exactly similar problem with iCal: unwanted duplicates that appear on at least some calendars shared via a Cloud. Plus a second problem, the spontaneous appearance of new calendars.

      Now let me try to answer the guy who keeps calling you dude and accuses you of nitpicking and looking a gift horse in the mouth. All of a sudden a lot of new Clouds are springing up, each clamoring for us to entrust it with our connectivity and/or our data. Plenty of consumers will simply gravitate to the Clouds that offer the largest amount of free storage space. More thoughtful ones (and this is particularly true in the Enterprise) are going to ask questions about how trustworthy each rival Cloud is. Trustworthiness can be broken down into a series of issues having to do with a.) security — how protected is it from hacking? , b.) reliability — how well does it function? , and c.) possible corporate abuse of the data entrusted to it. Apple’s particular scorecard looks pretty good regarding a.) and c.), its weaknesses are limited to b.) Here I am not thinking of occasional e-mail outages (which are transient and which, I suppose, can happen to anybody) but of the kinds of problems Gene is describing. These are not new problems, they have been long-standing ones on MobileMe and have carried over into iCloud unchanged. Surely Apple is aware of them, but appears to have taken few steps to address them (beyond acknowledging the Address Book problem by adding a Search For Duplicates feature which does only a limited amount of good). And here I think I agree with Gene. If iCloud makes a hash out of handling my contact and calendar data, isn’t it reasonable that I should be a bit reluctant to entrust it with my music, photos, and documents? Don’t I have the right to be disturbed that Apple evidently assigns a very low priority to fixing these problems? Any Cloud service, as I say, is all about trust.

    6. Petty Bunch's l'il brother says:

      Petty’s comment is brilliant and hits to the heart of internet criticism: one buffoon with an over-blown ego decides there is a ‘problem’ out there and he/she/it is going to use his/her/its god-given freedom to draw the world’s attention to it! iCloud is coming along very nicely, thank you very much. The few, and I mean very, very, very few of you, who experience a hiccup and then extrapolate that the entire service is built on faulty foundations need to raise your sight-line just a wee bit and get a grip. Please do not use the iCloud service if you are not happy with it. You will not be missed.

      Exactly what is the readership of this blog? Ha!

      • @Petty Bunch’s l’il brother, It isn’t one “buffoon,” but a decent number of people who report ongoing problems with iCloud in terms of syncing and email. This isn’t going to go away until Apple fixes these problems. You have no way to know how many Apple users are impacted. I suggest you spend a little time over at Apple’s site, in their support forums, check the problems being reported and how quickly the number of posts swells.

        Overall, iCloud is a promising service, but that doesn’t make it perfect. And keeping your head in the sand and ignoring reality isn’t going to help continue a productive dialog.

        Peace,
        Gene

        • @Gene Steinberg, Oh, and I encountered another email hiccup Tuesday afternoon, May 1, on the account converted to iCloud last year. I confirmed this problem on both my desktop Mac, and via Webmail. After about 15 minutes, email began to load again, but only briefly. The problem returned soon thereafter, but the situation soon stabilized. I don’t see Gmail offering such occasional outages. It’s rare over there.

          But, no, that never happened. It was the one-armed man.

          Peace,
          Gene

          • dfs says:

            Look here, Petty, if the address duplication Gene is complaining about isn’t a serious problem, would you care to tell us why there are software products on the market, such as Address Book Cleaner, Contacts Cleaners, and Spanning Tools, that at least claim to weed out duplicate entries? Nobody would write programs like this if they didn’t think there was a healthy amount of public demand.

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