Apple’s Suez canal

This morning’s Observer column.

At the centre of the Appleverse sits a single, crucial piece of desktop software – iTunes. You can do very little with an Apple device without hooking it up to iTunes. Until now, this has given Apple a key strategic advantage over all other competitors. But, as Britain discovered with the Suez canal in the 1950s, being unduly dependent on a single strategic asset can also have serious downsides.

The problem is that iTunes is now a pretty ancient piece of software. When it first appeared in 2001 as a reworking of SoundJam, a program Apple bought from a Californian company in 1999, it provided an elegant way of doing just one thing: getting songs from CDs on to your computer’s hard drive. But over the years, more and more functions have been added: first the management of iPods, then the Apple online store. Then iTunes became the conduit for managing one’s iPhone. The latest addition is the Ping social-networking function.

This is what the industry calls “feature creep” on an heroic scale…

How are the mighty fallen

This morning’s Observer column.

You have to feel sorry for Sony sometimes. I mean to say, there it was on Wednesday in Berlin, at the IFA consumer electronics show, launching a new music and video download service called Qriocity (it’s like “curiosity”, only it couldn’t get the domain name, I suppose) – and what happens? Steve Jobs goes on stage in San Francisco and announces that Apple is having another go at the TV download business.

And guess who gets all the media coverage?

How are the mighty fallen. I remember a time when Sony dominated the gadgetry business, when it was a synonym for elegant design and advanced functionality, when Walkmans ruled the world. It had shops in upmarket malls where young males came to drool. And now? Ask a teenager about Sony and s/he will reply: “Aren’t they the outfit that makes flat-screen TVs and DVD players and other stuff for adults?”

Kindle reborn

This morning’s Observer column.

The newest version of the Kindle e-reader is out. And guess what? “Due to strong customer demand,” says the Amazon website, “Kindle is temporarily sold out. Order now to reserve your place in the queue… orders placed today are expected to dispatch on or before 17 September.”

This is interesting, is it not? It’s not all that long ago, in the fevered run-up to the launch of the Apple iPad, that conventional wisdom held that the Kindle was a dead duck – roadkill for the iTunes/iBooks steamroller on the highway to the future. I mean to say, the Kindle was sooo clunky: you had to press buttons just to turn the page and how 1980s is that? With the iPad, you just swooshed your finger and – hey presto! – the page turned. Cool.

Then there was the impact of the iPad on publishers, who saw the Apple iBook store as a way of breaking Amazon’s stranglehold on sales – and, more important, the pricing – of ebooks. And so it came to pass that the Kindle was consigned to the role of brave but outdated pioneer. Amazon might have triggered the ebook revolution, but it would be Apple that would wind up running the show.

The problem with this kind of thinking is that it is based on an elementary schoolboy mistake, namely the assumption that, in a networked world, it is the hardware that matters most…

Android and upwards

From the latest Gartner report.

In the smartphone operating system (OS) market, Android expanded rapidly in the second quarter of 2010, overtaking Apple’s iPhone OS to become the third-most-popular OS in the world.

The rankings for the second quarter of 2010 are:

Symbian (41.2%)
RIM (18.2%)
Android (17.2%)
iOS (14.2%)
Windows Mobile (5.0%)
Linux (2.4%)
Others (1.8%)

This time last year, Symbian had 51% and Android 1.8% of the market. Apple had 13%.

We are all Ancient Egyptians now

This morning’s Observer column.

I’ve just discovered that the ancient Egyptians worshipped a beetle – a scarab. Quaint, isn’t it? I mean to say, we’ve come on such a lot since those primitive times.

But what’s this? A note from my Guardian colleague, Charlie Brooker, about something he calls the Jabscreen. “Several times over the last year,” he writes, “I’ve attended meetings that started with everyone present gently placing their Jabscreen face-down on the table, as though commencing a futuristic game of poker. It wasn’t rehearsed, wasn’t planned, it just happened; a spontaneous modern ceremony.” Charlie was struck by “the sight of a roomful of media types perched reverentially around their shiny twit machines… each time it happened, a vague discomfort would hang in the air until, in a desperate bid to break the tension, someone would mumble a sardonic comment about the sinister ubiquity of the Jabscreen, likening it to Invasion of the Body Snatchers.”

WikiLeaks and mainstream media

Anne Applebaum has set up an engaging straw man in Slate Magazine.

I didn’t think it was possible, but Julian Assange has now done it: By releasing 92,000 documents full of Afghanistan intelligence onto the laptops of an unsuspecting public, the founder of Wikileaks has finally made an ironclad case for the mainstream media. If you were under the impression that we don’t need news organizations, editors, or reporters with more than 10 minutes’ experience anymore, then think again. The notion that the Internet can replace traditional news-gathering has just been revealed to be a myth.

To see what I mean, try reading this: “At 1850Z, TF 2-2 using PREDATOR (UAV) PID insurgents emplacing IEDs at 41R PR 9243 0202, 2.7km NW of FOB Hutal, Kandahar. TF 2-2 using PREDATOR engaged with 1x Hellfire missile resulting in 1x INS KIA and 1x INS WIA. ISAF tracking #12-374.”

Did you get that? I didn’t and would be the first to admit it. I do understand it somewhat better now, however, because the New York Times helpfully explains on its Web site that this excerpt, from one of the WikiLeaks documents, describes a Predator drone firing a missile at men suspected of planting roadside bombs.

Hmmm… I don’t know anyone who doesn’t think that professional reporting is useful and necessary. This was also obvious after the (redacted) ‘official’ version of the MPs’ expenses file was published. Suddenly, one realised how much journalistic slogging went into the Telegraph‘s publication of the details. The truth is that the Web and professional journalism have a symbiotic relationship and feed on one another. Without WikiLeaks, there would have been no Afghan War Log story. And without the interpretation of the raw data, we’d be less the wiser.

The UK Parliamentary expenses scandal also suggests another angle on the Wikileaks story, namely the question of whether the Big Bang release of a torrent of data is the best way to get the public’s attention. What the Daily Telegraph did was to drip-feed the public, day after day, with selected excerpts from their data trove. This kept the story in the headlines for weeks, and undoubtedly magnified the impact of the revelations. Slate writer Jack Shafer thinks that the Big Bang release of the Wikileaks data may have, paradoxically, weakened its impact:

The speed with which the press and the politicians have normalized the material as “nothing new” indicates that WikiLeaks leader Julian Assange may have miscalculated in his desire to get the biggest media bang. He’s been meditating aloud for some time on how to maximize publicity for his material, complaining that media organizations have routinely ignored WikiLeaks postings because nobody gets exclusives on the released material. None would do a document dive for a story if that meant competing with other news organizations.

Could Assange have milked the material to better effect? Shafer thinks that he could have.

To begin with, and I’m repeating myself here, there was too much material for the newspapers and magazines to swallow on such a short deadline. The publications felt that way, too. As Hendler reports, they asked for and got a week extension on the original Assange embargo date. Perhaps he should have given the three publications—which shared notes about the material but not copy— another month. Lesson learned: Too much is sometimes worse than not enough.

By inundating readers with Assange’s trove, the three news organization broke one of the sacred rules of journalism: If you have a big story—especially one based on a leak like this one—drip, drip, drip it out to your audience rather than showering them with it. The reader can absorb drips better than torrents. Leave the reader wanting more and then deliver the next day. Besides, a drip strategy requires the publication to determine what’s most important in the story. Without looking, can you remember what the most significant part of the Afghanistan story is? The surface-to-air missile report? The stuff about Pakistan’s Inter-Services Intelligence? I’m still dazed by it all. By pouring out the material so quickly, the press caused a flash flood that has already cleared. Lesson learned: Drip irrigation works better than a monsoon.

In a comment on the Shafer piece, Tom Ricks thinks that it’s more complicated than that. He makes a useful comparison between the Wikileaks data and Daniel Ellsberg’s release of the Pentagon Papers, which were essentially a compendium of Administration thinking about the Vietnam war:

“The reason Wikileaks’ [Assange] did a data dump the way he did, I suspect, is that there really is no there there. That is, he probably knew there was no way to drip this out. These report are similar to what you hear as an embedded reporter sitting around a tactical operations center in the middle of the night. They are the beginning of reporting, not the end. You hear something and say, Is it true? How could I determine that? If it is true, is is significant? Does it mean anything? The Pentagon Papers had all that. This stuff doesn’t.”

Growing pains

This morning’s Observer column.

Over the past two months, Apple’s market capitalisation (ie its value as measured by the stock market) averaged out at $229.8bn.

The corresponding figure for Microsoft was $215.9bn. And yes, you read those numbers correctly: Apple is now worth significantly more than Microsoft, and the difference isn’t just a flash in the Wall Street pan.

This has implications for all of us who follow these things. The mainstream media, for example, need to discard the rose-tinted spectacles through which they have viewed Apple ever since Steve Jobs returned to the helm in 1997. Apple is no longer the Lucky Little Company That Could but a looming, secretive, manipulative corporate giant.

Recent developments suggest that Apple itself also needs to adjust to its new status as just another company…

Apropos the Microsoft comparison, Randall Stross has a useful piece in today’s NYT. Microsoft continues to be a formidable company, but from the viewpoint of investors it’s become more like GE or Big Oil (excepting BP, perhaps) — a good ‘banker’ stock for a part of one’s pension portfolio.

Apple: the new Microsoft

From today’s NYTimes.

Apple said on Tuesday that its net income rose 78 percent last quarter, driven by strong sales of the iPhone, the iPad and the Macintosh line of computers.

The results show that Apple is continuing to outpace its competitors in its three major lines of business: computers, phones and tablets. And Apple would be selling even more iPhones and iPads if it could keep up with demand.

“More and more, people’s lives are dependent on desktop and mobile computing,” said Gene Munster, an analyst with Piper Jaffray. “People realize that and are willing to pay up for it, and Apple is capitalizing on that.”

Apple executives said they were pleased with the results, which topped Wall Street’s forecasts.

“IPad is off to a terrific start, more people are buying Macs than ever before, and we have amazing new products still to come this year,” Steven P. Jobs, Apple’s chief executive, said in a news release.

Apple sold nearly 3.3 million iPads in the quarter. Consumers gravitated to higher-priced models of the tablet, helping to create a new segment of Apple’s business that generated revenue of $2.1 billion.

With 8.4 million units sold, the iPhone remains Apple’s biggest and most profitable business, generating $5.3 billion in revenue in the quarter. Most of the sales were of the iPhone 3G and 3GS, since the iPhone 4 went on sale June 24, just three days before the quarter’s end.

And Apple sold 3.47 million Macintosh computers, the most ever in a quarter, dispelling fears that the iPad would hurt those sales.

“Apple was scared that the iPad would cannibalize sales of Macintosh computers,” Mr. Munster said. “That’s not happening.”

Apple said its net income rose to $3.25 billion, or $3.51 a share, a 78 percent jump from a year earlier. Revenue rose 61 percent, to $15.7 billion…

Just to emphasise the point, the market cap of Apple today is $229.2 billion. Microsoft’s is $223.3 billion.

Apple’s coming shitstorm

If you weren’t immediately struck by the patronising ‘Listen with Mother’ tone of Apple’s initial response to the iPhone 4 antenna problem, then have another look. Are you sitting comfortably?

The iPhone 4 has been the most successful product launch in Apple’s history. It has been judged by reviewers around the world to be the best smartphone ever, and users have told us that they love it. So we were surprised when we read reports of reception problems, and we immediately began investigating them. Here is what we have learned.

To start with, gripping almost any mobile phone in certain ways will reduce its reception by 1 or more bars. This is true of iPhone 4, iPhone 3GS, as well as many Droid, Nokia and RIM phones. But some users have reported that iPhone 4 can drop 4 or 5 bars when tightly held in a way which covers the black strip in the lower left corner of the metal band. This is a far bigger drop than normal, and as a result some have accused the iPhone 4 of having a faulty antenna design.

At the same time, we continue to read articles and receive hundreds of emails from users saying that iPhone 4 reception is better than the iPhone 3GS. They are delighted. This matches our own experience and testing. What can explain all of this?

Eh? No wonder Dave Winer thought it had been written by a comedian:

When I read their first public response on July 2, the one that said the problem was the meter measuring the strength of AT&T’s signal, I couldn’t believe this was meant to be taken seriously. It’s the kind of story The Onion might have written on a bad day. Or Jon Stewart. That a corporate PR team wrote this says how unseasoned their people are. That they thought this answer was going to satisfy anyone says how out of touch they are with the world they are in.

Dave’s point is that instead of just being a Plucky Little Company Apple is now just Another Big Corporation. Like Microsoft. Like Google. Like BP.

The Reality Distortion Field bubble is about to burst. Their run as the Exceptional Company is about to end. And they’re going to be the last ones to figure it out. And it’s going to be the ugliest shitstorm you’ve ever seen.

Why will it be so ugly? Because Apple’s hype has been steadily inflating since 1997 when Steve Jobs returned, and it’s never taken a dip. They’ve risen from being written off to being worth more than Microsoft.

It’s also going to get ugly because we’re fed up with corporations. It was remarkable that there were no ads for oil companies on the World Cup broadcasts (at least the ones I watched). Can you imagine listening to a pitch from Exxon or BP saying they are working for our energy independence, or to clean up the planet or all the other lies they were telling us while they were taking huge unnecessary risks with the ecology of the oceans? They’re smart enough to know now is not the time to be spouting bullshit at us.

It will be ugly because Apple is going to let it get ugly. Because unlike the oil companies they have no experience with PR disasters… Apple has no concept of what’s it like to be disbelieved, untrusted, seen as an American corporation and nothing more.

Apple’s free ride by the mainstream media is also long overdue for termination. What I found surprising, nay borderline nauseating, was the soft treatment Steve Jobs received at his press conference about the iPhone 4 antenna problem last Friday. Any half-sentient reporter ought at least to have called him out on his disgraceful ploy of claiming that, hey, all smartphones have reception problems. Apart from the intellectual shoddiness of this, it also contradicts the First Axiom of the Reality Distortion Field: Apple is Different. Not any more, it isn’t. It’s just another big corporation.

Invasion of the Jabscreeners

Wonderful column by Charlie Brooker about the iPhone, er Jabscreen.

Several times over the last year I've attended meetings which started with everyone present gently placing their Jabscreen face-down on the table, as though commencing a futuristic game of poker. It wasn’t rehearsed, wasn’t planned, it just happened; a spontaneous modern ceremony.

There’s something inherently nauseating about the sight of a roomful of media types perched reverentially around their shiny twit machines, so each time it happened, a vague discomfort would hang in the air until, in a desperate bid to break the tension, someone would mumble a sardonic comment about the sinister ubiquity of the Jabscreen, likening it to a scene from Invasion of the Bodysnatchers. This would in turn prompt a 25-minute chat about apps and gizmos and which level of Angry Birds you’re stuck on. Sometimes there wasn’t much time for the meeting at all after that. But never mind. You could all schedule a follow-up on your Jabscreens…