• Newsletter Issue #657

    July 2nd, 2012


    When you do a weekly radio show, as I do, it’s not easy to set up live events, since most content is recorded ahead of the broadcast, so we can get a wider variety of guests. Well, we came close to the live feel this week, when one of our guests did his interview direct from a Wi-Fi hotspot at the airport in San Francisco, while waiting to board a plane to New York. You even heard occasional announcements about the departure of his flight, but he got aboard with plenty of time to get comfortable before the plane left the terminal.

    On this week’s episode of The Tech Night Owl LIVE, we start off with author and commentator Kirk McElhearn, Macworld’s “iTunes Guy,” who evaluates suggestions to change iTunes, such as the value of splitting the features into separate apps.

    We also cover Google’s I/O conference in San Francisco, where they launched the 7-inch Nexus 7 tablet, a potential competitor to the Amazon Kindle Fire, the Android 4.1 “Jelly Bean” OS, and the Nexus Q set top box. Along to talk about the event, and Microsoft’s recent mobile-related announcements, is industry analyst Ross Rubin of The NPD Group, and Avram Piltch, Online Editorial Director of Laptop magazine.

    Yes, it was Avram who gave us that special interview direct from San Francisco International Airport, with lots of fascinating information about Google’s new products. We’ll be hearing more in the coming weeks, and I’ll have more coverage later on in this issue. As with all those who attended the Google event, he went home with all the key products introduced at the session, including an unlocked Samsung Galaxy Nexus, the very phone that has been barred from U.S. sales in a court ruling from a California judge.

    On this week’s episode of our other radio show, The Paracast: Gene and Chris present a return appearance from UFO documentary filmmaker James Fox, who produced “I Know What I Saw” and is now one of the three UFO investigators featured on the National Geographic Channel’s “Chasing UFOs” series. You’ll learn about the evidence they’ve uncovered, and about some of the intriguing material that did not make it on the air.

    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.


    When Google acquired a certain startup known as Android in 2005, it was clearly meant to compete with Microsoft in reaching the mobile space. Certainly both companies saw the potential, but you had to expect that any smartphone running Android would probably have been designed with a physical keyboard to compete with the BlackBerry.

    Yes, as RIM teeters towards ruin, it’s hard to believe that, not too many years ago, the BlackBerry was the fashionable tech toy for business power users. That was true even for a first-term Illinois Senator named Barack Obama. To this day, it appears the President still uses a BlackBerry — and an iPad for that matter. In any case, few expected a certain company in Cupertino, CA to upend the industry.

    When Steve Jobs first unveiled the iPhone in early 2007, I suppose it was hard for more skeptical media pundits to take him seriously. After all, the “real” smartphone was a BlackBerry. Real smartphones had physical keyboards, not virtual keyboards on a touch screen. How could Apple possibly get away with that?

    Just this week, I read a few quotes that the skeptics made in 2007. I even recall the stories about the reaction of a laughing CEO from that big tech company in Redmond, WA, who also dismissed the prospects of the iPhone. In some ways it was all reminiscent of how tech pundits reacted to the iPod in 2001, but you all know how that turned out.

    Now it’s not as if Apple boasted that the iPhone would take over the market. Steve Jobs said he’d be satisfied if Apple had one percent of the worldwide market by the end of 2008. The first iPhone, which went on sale on June 29th, 2007, sold for the full price. Even though only AT&T supported the thing, it was expensive. You paid $499 for the 4GB version and $599 for the 8GB version.

    I wonder how many of you remember that the 4GB iPhone quickly went by the wayside, and Apple chopped $200 from the price of the 8GB model by September. In response to a hue and cry from customers who paid full price before the 14-day “price production” period, Apple granted a $100 credit. This move came just days after Jobs declared that this is what early adopters should expect.

    By the following year, the iPhone became yet another subsidized smartphone, with a starting price of $199. Since then, Apple has begun to keep older models available, and you can buy an iPhone 3GS from some dealers, a product first introduced in 2009, for essentially nothing with a two-year contract.

    To be perfectly honest, I wasn’t an early adopter. I failed to see the need for an iPhone in my life, and thus kept my Motorola RAZR around for mobile calling. I didn’t concern myself with texting or Internet access, both of which were quite inconvenient on a regular feature phone. But after reading all the praise heaped upon the very first iPhone by reviewers and customers alike, I decided to see what the fuss was all about. Months after the second generation model, the iPhone 3S appeared, I got a review sample from Apple, with the admonition that I return the unit within two weeks.

    Two weeks later, and I asked Apple to extend the loan, which they did. But I didn’t wait for the review period to expire before I bought one for myself.

    The main reason boiled down to email and Internet access. I was accustomed to taking my MacBook Pro into the bedroom at night to keep tabs on email and my various online watering holes. With a few exceptions that required a larger computer, I found I could do most of what I wanted with the iPhone. And certainly the industry took notice, so when the first Android OS gear was released, most sported a touch screen and, in other respects, took more than a few hints from Apple.

    Now I don’t pretend to know how long the iPhone gravy train can last for Apple, or whether someone else’s smartphone or a successor device will deliver a superior user experience and take off in a big way. Right now, there are Android smartphones that might eclipse Apple when it comes to some hardware or software features, but they are having a rough and tumble time beating Apple on delivering a solid user experience.

    This past week, you saw the direction of the newest generation of potential iPhone killers. Android 4.1 Jelly Bean promises speedier performance and a solution to ragged touch response, a bane of the Android user experience, although I hear that it’s still not perfect. The number of new features is relatively slim, though, which is why it’s 4.1 rather than 5.0.

    Microsoft Windows Phone 8 is also light on new features, although there’s baked in support for multicore processors and higher resolution screens, stuff that other mobile operating systems have supported for quite a while. There will supposedly be better multitasking, once again an example of Microsoft playing catch up. But only the revised Metro tile layout will make its way to older Windows Phone devices. The rest will require the next generation of hardware.

    So I think of those curious and irritating TV ads for the Nokia Lumia 900, the flagship Windows Phone, claiming all the other smartphones up till now have been “beta,” and this is the real thing. Well, maybe the Lumia 900 is real to some people, but it’s real certain that, except for a minor interface revision, the people who sign up for a two-year deal, even now, will never see an OS update. Talk about planned obsolescence, and isn’t that the charge that used to be leveled against Apple?


    This past week, Google held their I/O conference at the familiar Moscone Center exhibition hall in San Francisco. Those who paid $900 to attend the event were given a surprisingly large collection of Google branded gear, such as the Nexus 7 tablet, the Nexus Q set top box, or whatever it is supposed to be, and, among other things, a Samsung Galaxy Nexus smartphone, unlocked for the provider of your choice.

    Since the Galaxy Nexus was given free of charge, I wonder if that allows it to sidestep that new court injunction blocking sales of the device in the U.S. Or maybe Google beat the deadline, since the injunction doesn’t go into effect into Apple posts a bond of nearly $96 million. That payment is required to cover damages to Samsung in case the injunction is overturned.

    But don’t expect much of delay. That amount is chump change for Apple, and they could easily earn it back quickly just from sales won from customers who might have otherwise purchased the Galaxy Nexus.

    I won’t go into the legal by-play or why U.S. District Judge Lucy Koh ruled that Samsung had violated Apple patents. But since the Nexus line is meant to represent the unvarnished Android OS user experience, with the fewest customizations from the handset maker or carrier, this development could pose potential headaches for Google.

    However, court actions, appeals, and requests to reconsider appeals, can drag on for years, long after today’s iPhone and Samsung Galaxy smartphones are history. Meantime, it’s always possible Google and Samsung will find ways to reverse engineer their way out of perceived infringement. Who can tell?

    Meantime, Google is evidently pinning hopes, however slim, to gain a foothold at the lower end of the iPad — I mean tablet — market with the Nexus 7. In practice, it emphasizes Google Play and content consumption, evidently to compete with the only reasonably successful iPad alternative, the Amazon Kindle Fire. It’s priced the same, at $199 for the 8GB version, and offers more powerful hardware, plus a front-facing camera. The Kindle Fire doesn’t have a camera.

    But as with Amazon, it is being sold at or near cost, meaning Google can only earn a decent profit from the sale of apps and streaming movies and TVs. But Google doesn’t offer the vast supermarket of products you can buy at Amazon. A Kindle Fire user can launch the Amazon storefront and acquire cosmetics, flat panel TVs, washing machines, groceries, audio electronics and loads of other stuff. A single transaction can ring up thousands of dollars. Pretty soon, Amazon earns back the cost of giving you a cheap Kindle Fire.

    In contrast, Google’s hopes and dreams just don’t compute. There is no way they can ever hope to become an alternative to Amazon except in a very narrow way. Worse, early reviews of the revised Google Play service aren’t too encouraging. If the Nexus 7 vanishes into the limbo occupied by other Android tablets, I wouldn’t be surprised one bit.

    You can even expect a less favorable reception to the Nexus Q. In his interview on the tech show this week, industry analyst Ross Rubin, of The NPD Group, defined Q as “quandary,” and I have to wonder what Google hopes to achieve with such a device, particularly at a $299 purchase price. Yes, that it is made in the U.S. is a refreshing change at a time when most electronics from U.S.-based companies are built in Asia. But that’s not a reason to buy a product whose functions can largely be replaced with an Apple TV at $99. That the Nexus Q has a built-in amplifier represents a silly decision, and little in the way of a useful advantage.

    The Q may also represent Google’s last gasp at making Google TV work. They are way out of their league entering that space. The larger share of Google’s income still comes from targeted ads. While I expect some tech pundits will praise Google’s efforts to the skies, it’s clear others are skeptical. One reviewer’s hands-on includes “The buggy streaming story” in the title. That doesn’t auger well for the potential success of that thing.

    Yes, I suppose you could say that the Apple TV is by no means perfect. But it’s cheap and, as a supposedly “hobby” product, it’s clearly a work in progress. Apple’s end game may not be altogether clear, whether functionality will continue to be expanded, or whether their living room initiative might morph into a full blown TV set. But at least Apple has found a direction that works. Google is still looking, and not doing so well in finding their way.


    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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    4 Responses to “Newsletter Issue #657”

    1. […] Continue Reading… Related Posts: Newsletter Issue #637: More Solid Evidence of Android Fragmentation […]

    2. dfs says:

      Once upon a time, back before Steve came back as CEO, Apple was all over the map, putting out half-baked products and technologies that never went anywhere (remember Open Doc, anybody)? Sometimes it would announce a new technology and then fail to capitalize on itself, thereby telling the rest of the world that it could safely be ignored. Apple’s problem wasn’t that it had too few creative people within its ranks, it was that it had all sorts of people in the company running around pushing their own pet projects, and nobody at the top able and willing to pick the viable ideas and then get everybody pointed in the same direction. Steve put an end to that era. What he managed to do was impose a massive self-discipline on the company, so that it would identify the few best projects, push and polish them until they were perfected before announcing them. The days when Apple employees were permitted to go charging off each in his own direction came to an abrupt end. The key to Apple’s success during Steve’s tenure has been precisely that corporate self-discipline. Apple has not made tentative forays into new markets, it goes in massively and with a successful product in hand or it doesn’t go in at all. It would seem that no other big tech company in this country has a similar sense of self-discipline, focused purposefulness, and an equally clear sense of its own limitations, which is why the landscape is littered with the corpses of their failed products. The truly amazing thing in this is that their stockholders are willing to sit still for these shenanigans.

    3. Peter says:

      I have to wonder what Google hopes to achieve with such a device, particularly at a $299 purchase price. […] a product whose functions can largely be replaced with an Apple TV at $99.

      Nexus 7 8GB ($199) + Nexus Q ($299) = $498.
      Nexus 7 16GB ($249) + Nexus Q ($299) = $548.

      iPad 2 16GB ($399) + Apple TV ($99) = $498.
      iPad 3 16GB ($499) + AppleTV ($99) = $598.

      Hm. Looks like it’s about the same price, or cheaper, than Apple’s solution. Go figure…

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