Business, Chinese style?

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In a recent post I mentioned Mark Anderson’s criticisms of China which were posted on his Bright Fire blog.

Here’s an update:

I want to thank all of our posters on “What is China?” for their postings. I will note that our servers were attacked and brought down for a few minutes today, Friday, and that our tech team had the servers back up and running within minutes. Why do I mention this? Yesterday, an LA law firm which had filed a $2.2B suit against China for stealing the IP of a California company also found their servers attacked, just a day or so after the suit was filed.

Is this how we do business now?

I think it is very important, and enlightening for the rest of the world, that those who suffer cyber attacks after crticizing China, should go public IMMEDIATELY.

Like Google, and like SNS, the effect of this should be obvious: depriving China of the cyberattack tool it has recently deployed. Google claims that 34 other corporations were also hacked.

OK, CEOs of these corporations, it is time for you to step forward. We already have a human rights student from Stanford willing to stand up and say NO. Are you CEOs more afraid than she is?

The future according to Deloitte

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The Technology, Media and Telecommunications practice at Deloitte has announced its predictions for the media sector in 2010. Main headings are:

Video-on-demand takes off – but not how you expect
In 2010, the greatest revenue growth in this space will come from a surprising source: the vending machine. Although the web has already become the most efficient means of distributing short-form content, the volume of DVDs distributed via vending machine is expected to double in 2010.

Linear TV survives a bit longer
Though 2010 has been viewed as the beginning of the end for the linear schedule, the gap between linear and non-linear usage will remain substantial. Despite the growing range of non-linear options, most content will continue to be consumed according to broadcasters’ programming schedules, with over 90 per cent of television and 80 per cent of audio, respectively, being consumed in this manner.

TV and the web belong together, but not necessarily on the same screen
Melding web content with television programmes should intensify as concurrent use of the web and TV takes off in 2010. But don’t expect a surge in internet-enabled television sales or an explosion in the use of television widgets; converged web and television consumption is likely to be more pragmatic.

Publishing fights back: pay walls and micropayments
In 2010, the newspaper and magazine industry will continue to threaten to charge readers for online content, however that talk is unlikely to be matched by action. Publishers rumoured to be thinking about pay walls may ultimately decide against it, or are choosing hybrid models where most content is free, while charging only for a limited quantity of premium content. Publishers who use pay walls need to maintain and publicise the premium nature of their content. Excessive cost-cutting could devalue the brand. Online readers might be willing to become micropayment customers, but only if the content is good enough and worth the effort. For some, acquiring an article for 30 cents online may not justify the time taken to enter credit card details. Also, the value of the micropayment strategy to the content provider requires volume: one micropayment per customer every two weeks might result in transaction costs exceeding gross margins

The lowdown on teardowns

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This chart comes from an interesting piece in this week’s Economist on the business of dissecting electronic gizmos to assess their manufacturing costs.

Most smart-phones’ retail prices (before operator subsidies) are around $500-$600. Not all of the difference is profit. There are many other costs, such as research, design, marketing and patent fees, as well as the retailer’s own costs. But the big gap between the cost of building a smart-phone and its price in the shops should widen further as ever more previously discrete components are packed on to a single main microchip. Howard Curtis of UBM TechInsights predicts that as software and mobile services come to represent more of a smart-phone’s overall value, this too will widen the gap between manufacturing costs and selling prices.

What this gap demonstrates is that for smart-phones, like most other electronic devices, most of the value lies not in manufacturing but in all the services and intellectual property it takes to create and market such products. That is something for politicians to ponder: instead of making empty promises about saving ailing manufacturers they might instead consider how best to promote the growth of high-value service industries.

Sobering to think that the Apple tablet will soon be subjected to this kind of analysis.

How not to own up

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David Pogue of the New York Times recently panned the Barnes & Noble e-Reader, the Nook. But in his review he missed something.

Barnes & Noble has been claiming that the Nook weighs less than it really does.

OK, not by much. The company says the thing weighs 11.2 ounces. In fact, it weighs 12.1 ounces. (I discovered this when my daughter set it on a home postal scale. Later, I confirmed it with a fancier scale at the actual post office.)

That’s right: Barnes & Noble conveniently shaved 7.4 percent off of the Nook’s weight, and hoped nobody would notice.

Well, OK. What’s 7.4 percent? I mean, we’re talking about an understatement of one ounce here. Who cares?

First of all, you might care if you have to hold this hard plastic slab in your hands for hours, as you must when you actually read books on it. (USA Today’s Ed Baig almost uncovered the secret when he wrote in his review: “Nook weighs 11.2 ounces compared with 10.2 ounces for the Kindle. I felt the extra ounce.” No, Ed–you actually felt the extra TWO ounces.)

The really interesting part of the saga begins when he contacts B&N for their reaction. They claimed it was all the result of an innocent mistake:

“Given the higher than anticipated demand for Nooks last year, Barnes & Noble made some minor variances in the manufacturing process to get units to customers more quickly,” says spokeswoman Mary Ellen Keating. “Those minor changes resulted in a marginal weight difference from the pre-production specs, making Nook 12.1 ounces. We are in the process of updating all references to the weight.”

Mr Pogue isn’t taken in.

No “oops,” no “we apologize for the error?” Nope; nothing but a cheesy attempt to spin this gaffe into a marketing message. The company blames the error on “the higher than anticipated demand.” …

And by the way — isn’t it funny that Barnes & Noble knew about the error, but never bothered to correct it until today, when I caught them and let them know I’d be publicizing it?

The moral he draws from the story is that if B&N faked something so simple that it could be checked with a simple postal scale, then reviewers will now have to be sceptical about all the tech specifications of devices they are given to test. For example, what about all those ludicrous claims of laptop battery life? How come no actual user ever seems to be able to get anywhere near the claimed usage time out of his/her machine?

For me, though, the more acute lesson comes from the way B&N tried to spin the story (“higher than anticipated demand”) when they were caught out. Why does nobody — well, almost nobody — ever admit a mistake any more?

Primary Apps

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How about this — from Porchester Junior school.

If you’ve got an iPhone, or an iPod touch, then you need to get the Porchester App. Yes, that’s right, we have our very own App, designed and created by Mr. Widdowson, available for free from the App store that brings you the latest website articles, videos and audio from school.

We’re [sic] think it’s brilliant, and we’re not sure but…we might just be the first school to have our own App.

Eat your heart out, Eton!

iPhone saves lives. Well, a life anyway

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Heartwarming Wired story.

U.S. filmmaker Dan Woolley was shooting a documentary about the impact of poverty in Haiti when the earthquake struck. He could have died, but he ultimately survived with the help of an iPhone first-aid app that taught him to treat his wounds.

After being crushed by a pile of rubble, Woolley used his digital SLR to illuminate his surroundings and snap photos of the wreckage in search of a safe place to dwell. He took refuge in an elevator shaft, where he followed instructions from an iPhone first-aid app to fashion a bandage and tourniquet for his leg and to stop the bleeding from his head wound, according to an MSNBC story.

The app even warned Woolley not to fall asleep if he felt he was going into shock, so he set his cellphone’s alarm clock to go off every 20 minutes. Sixty-five hours later, a French rescue team saved him.

“I just saw the walls rippling and just explosive sounds all around me,” said Woolley, recounting the earthquake to MSNBC. “It all happened incredibly fast. David yelled out, ‘It’s an earthquake,’ and we both lunged and everything turned dark.”

Woolley’s incident highlights a large social implication of the iPhone and other similar smartphones. A constant internet connection, coupled with a device supporting a wealth of apps, can potentially transform a person into an all-knowing, always-on being. In Woolley’s case, an iPhone app turned him into an amateur medic to help him survive natural disaster.

Bet Steve Jobs never thought of that.

IPREDator launches. Howzat, Mandelson?

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Latest front opens in the arms race — Pirate Bay’s Ipredator VPN Opens To The Public | TorrentFreak.

With a beta launch coinciding with the introduction of the controversial IPRED law in Sweden, the service promised to offer users an anonymous connection to the Internet. IPRED gave the copyright holders increased power to track down pirates, and with the launch of IPREDator the creators neutralized this new ‘threat’.

Much like many other comparable VPN services, Ipredator allows users to connect to the Internet while hiding their own IP-address. The interest in services like this is booming. In Sweden alone, an estimated 500,000 Internet subscribers are already hiding their identities online, and that number is expected to rapidly grow in the new year.

Not us, guv

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You may be puzzled by this Telegraph report.

Both France and Germany’s governments have respectively advised computer users to download an alternative web browser to the most popular browser in the world, after a security flaw was detected.

The French government issued an advisory to computer users, recommending that they switch to a different web browser, such as Firefox or Google Chrome. It follows a similar move by the German government, after it was discovered that Internet Explorer contained a serious security flaw that could be exploited by hackers and cybercriminals.

However, a spokesman from the British Cabinet Office told The Telegraph that the British government would not be issuing a similar warning and instead would be referring anyone who was concerned about cyber security to getsafeonline.org.

Microsoft last week admitted that its Internet Explorer browser was the weak link in recent attacks by hackers who pried in to the email accounts of human rights activists in China. But the company said that the German government had over-reacted about the threat posed by the vulnerability, and that general users were not at risk.

Cliff Evans, head of Security and Privacy at Microsoft UK, advised people who were still using Internet Explorer version 6 to upgrade to version 8 – which is the most recent version of browser and less susceptible.

He said: “The quantity of exploits which have occurred been minimal and very targeted. The general public do not need to worry and we have not yet had a case in the UK.”

Of course, this could be an example of the UK government keeping its head while all around them others are losing theirs.

Alternatively, it could be due to the awkward fact that every PC in the vast NHS system is required to run IE 6 — which is a real pain if you’re a company trying to pitch web 2.0 products at the health service.

LATER: Charles Arthur’s take on it in the Guardian.