Remember when Apple was a small company?

(Flickr version here.)

From today’s New York Times.

The company said net income in the quarter that ended March 31 rose 90 percent, to $3.07 billion, or $3.33 a share, from $1.62 billion, or $1.79 a share, a year earlier, after adjustments for an accounting change. Revenue rose 49 percent, to $13.5 billion, from $9.08 billion, after adjustments.

On average, analysts had expected Apple to report net income of $2.45 a share on revenue of $12 billion.

The company said its gross profit margin rose to 41.7 percent, from 39.9 percent a year earlier.

Apple’s stock stood at $244.59 at the close of regular trading. After the company announcement, its shares rose to around $257 in after-hours trading.

As of this morning, Apple’s market cap was $235.1 billion. For comparison, Google’s is $176.3 billion and Microsoft’s is $274.8 billion. Dell is valued at $33.61 billion. Makes you think, doesn’t it?

Going Out of Print

Perceptive Tech review column by Wade Roush.

For book publishers, color screens are interesting but probably not revolutionary. Vook titles like The Breakaway Japanese Kitchen ($4.99), a cookbook that bundles recipes with related instructional videos, provide a taste of what's possible. But with most long-form writing, the words are paramount. If their purpose is to stimulate the mind’s eye, then color and animation are overkill, which is why I doubt that the iPad will wholly undercut the market for the Kindle-­style devices.

For magazine, newspaper, and textbook publishers, on the other hand, the iPad and the wave of tablet devices just behind it create enormous opportunities. Magazines are distinguished from books not merely by their periodical nature and their bite-size articles but by their design. If digital-age readers still want information that’s organized and ornamented in the fashion of good magazines–and there’s no reason to think they don’t–then devices that mimic the form and ergonomics of old-fashioned print pages will be needed to deliver it.

But to succeed on the new platforms, publishers will have to innovate, not simply imitate established media: they will have to move beyond the current crop of static digital magazines. The problem with most of the publications built on e-­magazine platforms from Zinio, Zmags, and other startups is that they are simply digital replicas of their print counterparts, perhaps with a few hyperlinks thrown in as afterthoughts. Publishers should look for better ways to use tablet screens such as the iPad’s, with its multitouch zooming and scrolling capabilities, and to make their content interactive.

And an interesting (and much longer) New Yorker piece by Ken Auletta, which suggests that the real significance of the eBook boom will be a radical rethinking of the publishing business.

Tim O’Reilly, the founder and C.E.O. of O’Reilly Media, which publishes about two hundred e-books per year, thinks that the old publishers’ model is fundamentally flawed. “They think their customer is the bookstore,” he says. “Publishers never built the infrastructure to respond to customers.” Without bookstores, it would take years for publishers to learn how to sell books directly to consumers. They do no market research, have little data on their customers, and have no experience in direct retailing. With the possible exception of Harlequin Romance and Penguin paperbacks, readers have no particular association with any given publisher; in books, the author is the brand name. To attract consumers, publishers would have to build a single, collaborative Web site to sell e-books, an idea that Jason Epstein, the former editorial director of Random House, pushed for years without success. But, even setting aside the difficulties of learning how to run a retail business, such a site would face problems of protocol worthy of the U.N. Security Council—if Amazon didn’t accuse publishers of price-fixing first.

It’s the old story: digital technology means having to rethink more or less everything:

Jason Epstein believes that publishers have been handed a golden opportunity. The agency model, he says, is really another form of the consortium he proposed a decade ago: “Publishers will be selling digital books directly to the iPad. They are using the iPad as a kind of universal warehouse.” By doing so, they create opportunities to cut payroll and overhead costs. Epstein said that e-books could also restore editorial autonomy. “When I went to work for Random House, ten editors ran it,” he said. “We had a sales manager and sales reps. We had a bookkeeper and a publicist and a president. It was hugely successful. We didn’t need eighteen layers of executives. Digitization makes that possible again, and inevitable.”

Auletta closes his piece with speculation that Amazon (and maybe, one day, Apple) will move to exclude publishers from the process and deal directly with authors. After all, most readers don’t buy books because they’re published by a particular publishing house. For them, the author is the brand.

Interesting stuff.

The United States of Apple

21.6% of US adults own or use an iPod, iPhone or Mac computer. That’s right, one-fifth of Americans own some type of Apple hardware. What’s more is that 21.6% doesn’t included under-18s — and how many teens have you seen without an iPod?

It’s funny how the image of Apple as a plucky underdog still persists.

[Source.]

The war against Flash

This morning’s Observer column.

Last weeks announcement by Apple that the UK launch of the iPad will be delayed by a month was the headline news for consumers, but for geeks a more significant development came on Thursday with some changes in the 21,000-word ‘agreement’ that you have to sign if you are going to develop applications for Apple’s iDevices…

So why are newspapers like the NYT sucking up to Apple?

Hmmm… I’ve been wondering about this, ever since noticing that many of the publicity pics for the iPad (see above, from the back cover of the current New Yorker) feature the NYT. But Dan Gillmor nails it, as usual.

It’s been more than a week since I asked a number of news organizations, chiefly the New York Times, to answer a few questions about their relationships with Apple. Specifically, I asked the Times to discuss what has become at least the appearance of a conflict of interest: Apple’s incessant promotion of the newspaper in pictures of its new iPad and highlighting of the Times’ plans to make the iPad a key platform for the news organization’s journalism, combined with the paper’s relentlessly positive coverage of the device in news columns.

In addition, I asked the Times, the Wall Street Journal and USA Today — following up on a February posting when I asked why news organizations were running into the arms of a control-freakish company — to respond to a simple question: Can Apple unilaterally disable their iPad apps if Apple decides, for any reason, that it doesn’t like the content they’re distributing? Apple has done this with many other companies’ apps and holds absolute power over what appears and doesn’t appear via its app system.

Who responded? No one. Not even a “No comment.” This is disappointing if (sadly) unsurprising, but in light of other news this week it’s downright wrong.

Apple bans Pulitzer Prize-winning political cartoonist from iPhone

From The Register.

This week, a California political cartoonist was awarded the prestigious Pulitzer Prize. Last December, Apple’s App Store police barred his work from its hallowed online halls.

As reported Thursday by Harvard University's Nieman Journalism Lab, Pulitzer Prize–winning cartoonist Mark Fiore submitted his cartoon app NewsToons to the App Store Police, only to have it rejected.

Fiore’s sin: violation of the sacred section 3.3.14 of the iPhone Developer Program License Agreement, which reads:

Applications must not contain any obscene, pornographic, offensive or defamatory content or materials of any kind (text, graphics, images, photographs, etc.), or other content or materials that in Apple's reasonable judgment may be found objectionable by iPhone or iPod touch users.

We’ll gloss over that risible ‘reasonable judgement’ bit and instead pose a simple question: Keeping in mind that Fiore is a political cartoonist, might that “offensive or defamatory” judgment be solely in the eyes of the beholder?

Meaning, are the App Store police censoring commentary based upon their own tastes? Well, of course they are.

LATER: It seems that the ban has been rescinded. Amazing what a firestorm of bad publicity can achieve.

Apple’s Strategic iParadox

Interesting blog post by Umair Haque.

The iPad's like an amazing hairdresser — who wants to monitor your bathroom for authorized shampoo, conditioner, and water. By building a device that liberates services, but locks down ‘product’, Apple’s shooting itself in the iFace. It’s as if Apple wants to step into the hyperconnected network age — but also keep one foot firmly planted in the industrial era.

The iParadox is this: Apple should be striving to commoditize products if it wants to benefit from services (or vice versa). But it’s trying to benefit from both at once — which is, simply put, strategically self-destructive. One is the mirror image of the other.

The real promise of the iPad is to help the beleaguered media industry, bereft of imagination, kickstart the great shift from products to services. Media’s been stuck for too long in the the industrial era, trading in mass-produced, mega-marketed stuff. But in a hyperconnected world, as media players are finding out the hard way, mere stuff’s a commodity. Service economics are superior: services are less risky, less capital intensive, higher skill, higher loyalty, and dramatically less imitable. The result is that service-centric businesses tend to have higher margins and create significantly more value than product-centric businesses. That’s why every economy (and sector) that transitions past the industrial era is built on them…

Why the iPad and iPhone don’t support multi-tasking

Really useful explanation by Robert Love (an Android developer).

Apple says they do not support multitasking because it is a hamper to stability and a drain on battery life. That clearly isn’t true—the iPad has plenty of processing power and battery capacity. Rumor is that Apple is going to add multitasking in a future OS release. This rumor likely is true. Is Apple somehow going to make background applications not consume any battery? Of course not. These excuses are straw men.

The real reason that the iPad and iPhone do not allow third-party applications to multitask is likely more complex, more technical. Bear with me here. Both the iPad and iPhone, as mobile devices, have limited memory (256MB in the current incarnations) and no hard drive. No hard drive means no swap file. Limited memory and no swap imply that applications have a small, fixed amount of memory at their disposal. They don’t have the luxury of seemingly-infinite memory, as a modern system with swap has. Memory consumption is thus a critical system constraint. Like most systems, the iPad and iPhone deal with this by killing applications that use too much memory via a mechanism called the out of memory (OOM) killer. Unlike most systems, applications designed for the iPad and iPhone know how much memory they have at their disposal, and are designed to operate within those constraints. This is classic memory management in embedded programming. No swap, fixed memory, you deal.

What would happen if third-party applications could multitask? Some number of applications would be in the background. But each application was written presuming it had access to some fixed amount of memory. Thus, if the background applications consumed too much memory, the operating system would have to kill them. But the user would expect that he or she could switch back to an old application, and it would still be running where it was left. He or she certainly doesn’t expect applications to just die every time a new application is run, losing state and even data.

Simply put, the reason the iPad and iPhone do not support multitasking is because it is hard to allow multitasking in a system with no swap and a limited amount of memory. Apple could enable multitasking—indeed, there is no reason that the devices couldn’t support it right now, with a one or two line code change—but your applications would constantly be killed. That isn’t a very useful feature.

So how is Apple going to enable support for multitasking? Likely similar to how Android allows it…

He then goes on to outline how Android does it via its Bundles concept, which effectively enables apps to be stateless. A really informative post, and a good illustration of why the Web is wonderful.

Computing for couch potatoes (contd.) Or coffee-table computing?

From Jeff Jarvis.

The iPad is retrograde. It tries to turn us back into an audience again. That is why media companies and advertisers are embracing it so fervently, because they think it returns us all to their good old days when we just consumed, we didn’t create, when they controlled our media experience and business models and we came to them. The most absurd, extreme illustration is Time Magazine’s app, which is essentially a PDF of the magazine (with the odd video snippet). It’s worse than the web: we can’t comment; we can’t remix; we can’t click out; we can’t link in, and they think this is worth $4.99 a week. But the pictures are pretty.

That’s what we keep hearing about the iPad as the justification for all its purposeful limitations: it’s meant for consumption, we’re told, not creation. We also hear, as in David Pogue’s review, that this is our grandma’s computer. That cant is inherently snobbish and insulting. It assumes grandma has nothing to say. But after 15 years of the web, we know she does. I’ve long said that the remote control, cable box, and VCR gave us control of the consumption of media; the internet gave us control of its creation. Pew says that a third of us create web content. But all of us comment on content, whether through email or across a Denny’s table. At one level or another, we all spread, react, remix, or create. Just not on the iPad.

LATER: Just noticed this comment by Quentin on Jeff’s post:

I don’t know, Jeff… I never expected to do much more than consume with it. I saw it as a better iPod rather than a better laptop. After all, I never worried that the Kindle would turn people into mere consumers of books, rather than authors.

So I have been pleasantly surprised, for example, by how good the onscreen keyboard is, and I can use my bluetooth keyboard if wanted…

I’m more likely to have this with me than I am a laptop, and I’m more likely to create content on it than I am on an iPhone. So I think content creation may increase rather than decrease for me.

Your point about data being locked inside apps is a good one, though needs to be balanced perhaps with, say, the adoption of the open epub format for books, which could result in an increase in the amount of searchable data out there when compared to things like the Kindle…?

Quentin calls it “coffee-table computing” btw. Not a bad metaphor.