The hardware that breaks the commoditisation rule

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Insightful column about the iPhone phenomenon by Farhad Manjoo: The nub of it is this:

In many fundamental ways, the iPhone breaks the rules of business, especially the rules of the tech business. Those rules have more or less always held that hardware devices keep getting cheaper and less profitable over time. That happens because hardware is easy to commoditize; what seems magical today is widely copied and becomes commonplace tomorrow. It happened in personal computers; it happened in servers; it happened in cameras, music players, and — despite Apple’s best efforts — it may be happening in tablets.

In fact, commoditization has wreaked havoc in the smartphone business — just not for Apple. In the last half-decade, sales of devices running Google’s Android operating system have far surpassed sales of Apple’s devices, and now account for the vast majority of smartphones in use.

For years, observers predicted that Android’s rising market share would in turn lead to lower profits for Apple (profits, not market share, being the point of business). If that had happened, it would have roughly approximated the way the Windows PC industry eclipsed Apple’s Mac business. “Hey, Apple, wake up — it’s happening again,” Henry Blodget, of Business Insider, warned in 2010. And again in 2011, 2012, 2013 and 2014.

None of those predictions came true. While the iPhone’s sales growth slowed in 2013 and 2014, it rebounded to near-record levels later last year, and its profits have remained lofty.

Instead of killing Apple, commoditization caused something stranger — it hobbled Apple’s main competitor in the smartphone business: Samsung, which until last year was gaining a creeping share of the profits in the smartphone business. At its peak in mid-2013, Samsung was making close to half of every dollar in the smartphone business, according to the research firm Canaccord. (Apple was making the other half.)

But the rise of low-end, pretty great Android phones made by Chinese upstarts like Xiaomi — and the surging popularity of Apple’s large-screen iPhones — put Samsung in a bind. In July, Samsung reported its seventh straight quarter of declining profits.

Yep. The reason why the Apple phone defies the commoditisation rule is that it’s not a standalone device, but part of a highly-functional (and useful) ecosystem. That’s why iPhone users who hanker after, say, Samsung’s or Sony’s latest phone think twice before making the switch: do they really want to leave the comfort and ease of the Apple ecosystem. And Apple has just made joining that ecosystem easier — by releasing an Android App that allegedly makes it simple for Android users to take their data etc. across to their brand new iPhones! Given the amount of money Apple makes from the iPhone, it does now look set to become the world’s first trillion-dollar company.

EULA news

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First_born_child

Some time ago, the Finnish computer security firm F-Secure set up a free WiFi hotspot in London and invited people to use it. Before doing so, they had to click ‘Accept’ to the Terms and Conditions. This was one of those conditions. Nobody balked — because obviously nobody read the T&C.

Source

The joys of examining

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“I feel much better but fearfully exhausted from examining the extraordinary outpourings of my own students who return my own words to me in grotesque shape, a duly humbling experience, though excellent for one’s self-esteem, but severely shaking to one’s general faith in the rationality of man.”

Isaiah Berlin, writing home after spending a semester in 1949 teaching undergraduates at Harvard.

Run, Lessig, Run

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My OpEd piece about Larry Lessig’s bid for the Democratic nomination:

Intellectually, he is always seeking ways to turn the adversary’s strengths against him. His first idea was to harness the Citizens United judgment to create a new “super PAC” (a type of political action committee) – Mayday.US – that would support politicians who campaigned against corporate interests. The PAC raised nearly $11m in 2014, but its plan of electing candidates friendly to campaign-finance reform turned out to be, at best, an honourable failure.

Last month, Lessig came up with a new idea: that he would seek the Democratic nomination for the 2016 presidential election if he could raise $1m by tomorrow. He added an original twist. If nominated, he would run on a single, overriding issue: getting a single bill – the Citizen Equality Act – through Congress. And if he were elected, once that was done, he would resign, enabling the vice president to become the next president.

Sounds daft? Sure. The probability of a Lessig presidency is lower than that of a Trump one. But it’s another neat hack. And as a way of raising the profile of the key issue in American politics, it has a touch of genius. We could use that kind of thinking over here. Run, Lessig, run.

Read on.

UPDATE He passed the $1m mark.

Two cheers for Google?

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This morning’s Observer column:

You know the problem: you’re on a train and suddenly realise you need some information that is available on the net. So you pull out your smartphone and type a web address into the search box. The server responds, the page you want begins to load and then suddenly there’s a big box obscuring the content. The box tells you that you’d be much better off downloading the company’s app. Inducements include the possibility that you might get a better rate by booking via the app than via the boring old website. Sometimes the “close” button that will enable you to get rid of this intrusion is obvious, but sometimes it’s hard to find on a small screen. In the meantime, the train has just gone into a tunnel and you’ve lost your internet connection.

Welcome to the world of “app-install interstitials”. They are, IMHO, a pain in the butt. On the scale of web annoyances, they rate just below pop-up ads and those display ads placed by companies that covertly monitor your browsing. But now it transpires that Google doesn’t like these interstitials either and has announced that henceforth it will be downgrading in its search results any mobile-oriented web pages that produce interstitials…

Read on.

Refugees: back to the Middle Ages

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Regugees-page_pic

Some of the photographs coming out of Turkey and Hungary at the moment are as striking as some of the pictures that emerged from the Vietnam war. My eye was caught by this NYT front page, for example.

Just look at the detail:

Refugees_detail

Not only is it ‘painterly’ in its texture, but it could be part of one of those allegorical paintings from the 1650s. Except that it’s much more moving. These are not creatures from a long-distant past, but our fellow-humans.