• Newsletter Issue #796

    March 2nd, 2015


    There has been plenty of fear mongering when it comes to the contentious issue of net neutrality. One ill-informed U.S. Senator referred to it as “Obamacare for the Internet,” while a conservative TV talking head insisted it would somehow slow down the Internet.

    Does any of this even make sense?

    At its heart, the FCC’s net neutrality ruling essentially states that your ISP must allow all legal Internet traffic to reach you without selectively blocking or slowing down some of it or speeding up other traffic in exchange for payments. So if you have a pretty fast broadband connection, your Netflix stream shouldn’t be lost in buffering mode because they won’t pay your ISP ransom to be put in a fast lane.

    As you see, the concept is simple, but the ruling will consume hundreds of pages, in part because ISPs will be covered by Title II of the Communications Act and Section 706 of the Telecommunications Act of 1996. It may be more comprehensive than some might have wanted, but the last attempt by the FCC to enforce net neutrality was turned back several years ago by the courts. Blame Verizon, who filed that lawsuit.

    But none of this would have happened had some ISPs not abused the privilege and throttled legitimate traffic in the hope of exacting higher payments from the content companies. That’s where it all began. How it ends may still be uncertain. There are apt to be more lawsuits, and, if the makeup of the FCC changes or a Republican president signs a bill to undo the rules, we might well be back where we started.

    In addition, on this week’s episode of the The Tech Night Owl LIVE, we couldn’t escape ongoing speculation about an Apple Car. Is this something Apple is really planning, or just a bunch of assumptions based on the decision to hire car industry executives? You also heard speculation about Apple’s March 9th media event, where the final details of Apple Watch will be disclosed, along with some other possible product intros. What about the potential for a larger iPad, known as iPad Pro, and can it help jumpstart moribund sales? Topics also include the FCC’s approval of a set of rules to enforce net neutrality.

    Our guests included author Bob “Dr. Mac” LeVitus, a skeptic of the possibility of an Apple Car, who also talked about his new TV show, and Jeff Gamet, Managing Editor for The Mac Observer, who asserts that his publication is on solid ground that Apple is really designing a motor vehicle that may be introduced several years from now.

    On this week’s episode of our other radio show, The Paracast: This week we’re joined by guest cohost Goggs Mackay. Our three guests discuss a significant victory in the efforts to John Burroughs to receive medical disability coverage for the injuries he claims to have suffered in connection with the 1980 Rendlesham Forest UFO case. We’re also joined by former UK Ministry of Defence official and UFO author Nick Pope, a co-author with Burroughs of “Encounter in Rendlesham Forest,” and J. Patrick Frascogna, the attorney who helped Burroughs achieve his victory with the U.S. Veterans Administration. This episode also covers the UK’s Project Condign UAP (UFO) report, and some of the side issues that have arisen about the Rendlesham case.

    Now Shipping! The Official Paracast T-Shirt! We’ve got swag! We’re taking orders direct from our 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.


    The phrase “jump the shark” has become a popular idiom to describe situations when desperation takes over. The term originated from an episode of the TV sitcom “Happy Days,” where lead character Fonzie (Henry Winkler), demonstrating his water skiing skills, jumps over a shark. That’s when many critics felt the show had lost its creative core and had become in a sense of parody of itself.

    With a TV series nears the end of the line, the producers resort to silly stunts, sometimes calling in famous entertainers as guest stars to lead a lame plot, in desperate efforts to push ratings and keep the show on the air long after its prime. I’ll leave it to you to decide which TV shows fit into that category. But it has also been expanded beyond the entertainment industry to signify a serious decline in product quality or a company’s performance.

    So you can say that a company that can no longer innovate or at least earn decent revenue and profits may have jumped the shark. You might apply that term to Sears and perhaps HP, companies well past their prime. Radio Shack jumped the shark years ago, but took a while for the ever-changing management to realize that basic fact and take steps to put the company out of its misery.

    To some critics, Apple jumped the shark in the 1980s when the first Mac was released. My friends at Mac Observer run occasional columns about the ongoing “Apple Death Knell,” where some online pundit or industry analyst proclaims Apple is fated to face a quick death for one reason or another.

    So from the very earliest days after the first Macs went on sale, the critics proclaimed Apple’s trendsetting graphical user interface as a toy, not intended for serious work. “Real” PC users preferred the command line and MS-DOS. That same belief was expressed for years until Microsoft Windows became good enough, or at least passable, for real work, beginning with Windows 95.

    The ascendancy of Windows came at a time where Apple abdicated their position as an innovative company by releasing poorly-formed products with inept sales strategies. Those who expected Apple to die at any moment were once close to having their wishes granted. Right after Steve Jobs returned as CEO, he found himself in charge of a company that was weeks from going kaput. But those wishes and hopes were never realized, and I suspect some of these people never forgave Apple for becoming so successful.

    Or maybe some of their successors who pretend to be journalists and commentators merely wish to emulate those who got it wrong by getting it all wrong for themselves.

    I suppose a key example of the ongoing importance of Macs can be found when you read the background story about this weekend’s number one movie, “Focus,” which was edited on Macs using Final Cut Pro X and other apps. When FCP X first arrived, the critics proclaimed it as nothing more than an expanded version of iMovie focused on so-called prosumers and perhaps students. It wasn’t meant for editing professional movies and TV shows, they claimed, and it’s true some video editors went elsewhere.

    But as Apple restored lost features and added new ones, and video editors became accustomed to the new tools, it has become a more credible alternative. Understand that “Focus” isn’t a two hundred million dollar special effects extravaganza. It’s an R-rated comedy with a $50 million budget, and that’s not a category that often delivers blockbuster receipts at the box office, but $19.1 million ($31.3 million worldwide) isn’t too shabby a start.

    It doesn’t matter whether the film is good or bad, however. It’s about the production values impacted by using a $299 Mac app with a Mac Pro, an iMac and a MacBook Pro. In other words, a serious Hollywood production with an A-list star, Will Smith, being made on a Mac. A recent episode of a TV sitcom, “Modern Family,” was shot with iPhones and iPads.

    But anyone who doesn’t believe that Macs can be used for serious work is living under a tree.

    Today’s argument against Apple is that the company is far too dominated by iPhone sales, which make up the largest part share of revenue. In the last quarter, the iPhone accounted for roughly 70% of Apple’s revenues, and 85% of its profits. The theory has it that iPhone sales must be reaching the saturation point any day now, so what does Apple do to keep the growth curve? Apple Watch? That’s still a largely untested market, and the potential isn’t certain, though I suppose that’s not a view that’s especially unusual. Maybe we’ll all have a better picture of that potential if Apple rushes to release early sales figures after the rollout weekend. As of now, Apple Watch sales will not even be listed as a separate category in Apple’s financials.

    I suppose some critics might use that as a reason to dismiss the possibility for its success, that Apple knew it wasn’t going to be a sales superstar, so they hedged their bets. But stellar sales could change the reporting scheme real fast.

    Regardless of what happens to Apple Watch, it’s clear the iPhone hasn’t reached its potential. Depending on whose figures you trust, iOS is in the teens in terms of worldwide market share, give or take a few points, compared to Android. Apple may not play in the cheaper markets, but as more and more people aspire to something better, iPhone will get its share. So even if the iPhone remains Apple’s top-selling product by a huge margin, the end isn’t near.

    Remember it wasn’t so long ago that Macs dominated Apple sales, so why assume there can be no successor to the iPhone, or smartphones in general, and that Apple isn’t capable of delivering that successor whatever it might be?

    Imagine, for example, if the Apple Watch grows into a standalone communications gadget that, with voice controls, performs many of the functions of an iPhone. Sure, you’ll want a larger display for typing more than a few words, unless Siri takes over the task. Maybe we’re destined to stop typing words altogether except for long documents.

    Unfortunately, we really have very few clues about what might be under consideration in Apple’s top-secret developer labs. That Apple has hired some executives from the automobile industry has led the media to assume an Apple Car is coming a few years hence. Maybe, or maybe Apple is just taking a gentle step into the business to consider the possibilities, and those possibilities may focus more on the dashboard than the entire vehicle. Even if a car is being worked on, a final decision on production may not come for quite a while. It’s not that such things spring full blown.

    Don’t forget that, to build a car, Apple not only has to bake a full design, but develop a method for manufacturing, even if an existing plant is used. There will also have to be dealer networks, owned by Apple, partly owned by Apple, or using the traditional franchise model. Apple wouldn’t want to have a motor vehicle sit side by side with anyone else’s car.

    Also, if this is to be an electric car, which is what is expected, Apple would have to consider a nationwide — and eventually worldwide — charging network so that you wouldn’t have to motor far to get a quick recharge. Maybe there would be a modular approach to components to allow for quick field replacement of worn or defective parts. I wouldn’t presume to guess.

    Some suggest that reports that Apple’s Jonny Ive was speaking intently with Tesla’s CEO, Elon Musk, at a recent event, as evidence the former company wants to purchase the latter. Or maybe the two companies, perhaps destined to be competitors in the marketplace, are working on developing batteries that can serve both. That, plus compatible changing stations, would expand the joint market.

    Remember that, even in the existing auto industry, manufacturers will sometimes team up with one another to jointly develop technology. In fact, Tesla has been reported in conversations with BMW over battery technology. This may be something that won’t reach its potential until several companies get into the act.

    At the end of the day, though, it’s premature to think of an Apple Car as a successor to anything the company is doing now. As I said, it’s hard to predict what Apple is doing behind closed doors, but to think that the company will live and die by the iPhone is as silly as the original claims the company lived and died by Macs.

    Didn’t happen then, so don’t think it’ll happen now.

    What’s true about the peddlers of Apple’s doom and gloom is that they are almost always wrong, despite repeating the same old tall tales over and over again. It’s getting tiresome and boring, and this endless process becomes less credible as time goes by. That, to me, is jumping the shark.


    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
    Sales and Marketing: Andy Schopick
    Worldwide Licensing: Sharon Jarvis

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    2 Responses to “Newsletter Issue #796”

    1. Aardman says:

      Tim Cook made Apple’s supply chain run like precision clockwork. That required the ability (mainly, mental and capacity) to keep meticulous track of a complicated system that has lots of moving parts. Now that he’s CEO, he will apply that vast mental capacity not just on the supply chain but on all of Apple’s operations. In particular, he can effectively manage a product line that is broader than what Apple had under Steve. I expected that Apple will widen its product scope under Tim, and that’s what we are starting to see right now.

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