Forbes' Fake Steve Jobs Is Also Fake On Apple

Daniel Eran DilgerDaniel Lyons is the author of the Fake Steve Jobs blog and a columnist at Forbes. After developing a reputation for attacking bloggers, open source, and any alternatives to Microsoft, Lyons has shed his skin to escape from one scandal while at the same time squirming into position to choke the truth out of his next victim: Apple.Reader Marc Elson sent in a link to Lyons' “Snowed by SCO,�? an article Lyons wrote to both apologize for and marginalize his years of articles in Forbes that misrepresented the issues in the SCO Groups' attack on Linux. He blamed his reporting on bad information he'd been fed by SCO. It's easy to backtrack now that SCO is toast; in fact it's rather impossible not to. However, neither Lyons nor Forbes can erase the years of false information and misleading spin they published, which not only idealized SCO but also lambasted any individuals critical of the company. He described anyone supporting Linux as religious folk "convinced of their own righteousness."While fighting for SCO, Lyons also attacked “bloggers�? in a front page article in Forbes that screamed, “they destroy brands and wreck lives. Is there any way to fight back?�? as if everyone who writes on the Internet operates as a class that can be summarily judged and dismissed at once. [Snowed By SCO - Forbes]Daniel In the Lyons Den Again.Lyons' lack of hesitation in throwing out poorly conceived attacks is getting him into trouble again. He seems to be working frantically to spin together a bizarre new tale of how Apple is going to simultaneously be torn apart by the can-do-no-wrong Microsoft while also turning into a shadow of the evil monopolist itself, threatening us with its fearsome dominance.Lyons resurrected the identical, wholly illogical conundrum of a paradox posited last year by Windows Enthusiasts, principally Paul Thurrott, who spoke in fear of a threatening monopoly position achieved by Apple's iTunes while--puzzlingly--also describing Apple's music business as a pitiful failure that could never withstand the market dominance of Microsoft. Is it part of a new Forbes campaign? Lyons' new work echos other regular articles from Forbes writers, all attacking Apple and reality in the same breath:Presenting Apple TV a supposed flop, despite its profitably outselling the TiVo this year without incurring the tens of millions in losses TiVo has suffered in the last quarter and in every one of the last several years.
Promoting MusicNet Digital's failed Microsoft partnership in selling music against iTunes and describing the Zune as something other than a spectacular failure. Even the most giddy Zune fan sites are appalled by Microsoft's lack of support in providing updates and fixes for the Zune's major failures. How is Forbes framing it as some kind of sleeper hit?[The iTunes Monopoly/Failure Myth][Scott Woolley Attacks Apple TV in Forbes, Gets the Facts Wrong][Forbes Prints Insanely Self Serving Attack on iTunes by MediaNet CEO Alan McGlade]When Cost Is No Object: Microsoft Media Center.Reader Robert de Bie forwarded a link to Lyons' breathless accolades over Microsoft's Media Center software, which opened with the line, “Guess who's got the slickest software for handling TV, movies and music? Not Apple.�?Lyons compared using a Mac and Apple TV with a PC running Vista Ultimate with Media Center features and an Xbox 360 to relay content to a TV. He raved that the Microsoft solution “can do things with digital media that even Apple can't match.�? That's true, as Media Center is principally a DVR, a software version of the TiVo; Apple doesn't sell anything the works like a TiVo to record TV. However, Lyons only noted in passing that “Microsoft charges $400 for Vista Ultimate--$300 too much,�? failing to add up that a Mac comes with free Front Row features. Apple TV hardware costs $300; it supplies ultra fast 802.11n wireless and, at a minimum, a 40 GB hard drive.In contrast, an Xbox 360 with a 20 GB hard drive costs $350, and another $100 for slower 802.11b/g wireless. So as a wireless media extender, the Xbox 360 costs $450 (50% more), but gives you half the disk capacity and slower networking.Additionally, the required Media Center software that costs another $400 in Vista Ultimate doesn't magically provide you with a TV tuner, so you still have to buy one.In other words, all the money you throw at Microsoft only gives you software that is otherwise free. Without having to pay for all that software licensing, you can go buy whatever TiVo-like TV tuner for the Mac fits your needs, and solve the problem for hundreds of dollars less.Of course, what Apple wants you to do is go without a TV tuner and an expensive cable subscription and simply buy the TV and movies you want to watch from iTunes. Of course, that's not necessary to use Apple TV; you can also rip your own DVDs or even use it to manage your home movies and free podcasts, something Media Center isn't really designed to do because there's no money in it. Don’t forget that there are more fees involved with Xbox Live services, and that TV downloads are more expensive. You’ll also need to pre-purchase Microsoft’s points, converting your cash into Microsoft Live currency that’s subject to change. And once you buy Xbox Live TV shows, don’t expect them to play on your Zune or Windows Mobile phone the way iTunes content plays on Apple’s iPods and iPhone.Of course, when Microsoft sends writers all this equipment to try out for free, then it’s easy to gush over how great it all works and report, "No crashes, no reboots, no blue screen of death. Stunning," as Lyons did. Had he actually been forced to pay the $840 premium to actually use Microsoft’s system, perhaps he’d sing another tune.While Lyons is certainly entitled to his opinion, he should at least present the facts correctly. Outlining any Microsoft product without a consideration of its true cost is always a mistake, because the true cost is almost always hidden. Lyons also wrote “Microsoft's system supports high-definition video; Apple TV does not,�? a line that isn't true. Content from iTunes isn't yet available in HD, but the Apple TV does support HD video from other sources and comes equipped with support HDMI, which only the newest Xbox consoles have. Considering that Microsoft has barely sold any new Xbox 360 units this year, fewer than 20% of installed Xbox users even have HDMI outputs. [Windows XP Media Center Edition vs Apple TV][Forrester Research: Epic Terror of iTunes and Apple TV]Big Brother Says: Apple is the New Microsoft.Since publishing that “Media By Microsoft�? article a couple weeks ago, Lyons has ramped up his attack on Apple into a web of false information that approaches his SCO shilling. He even exploits his popular Fake Steve Jobs blog for dramatic effect.Lyons starts his newspeak reporting, ironically enough, in an article titled “Big Brother,�? with a comical juxtaposition of Apple's 1984 Macintosh ad and a modern screenshot of Jobs presenting the new 3G iPod Nano against a huge video screen of his own image. Lyons had earlier published the images on his Fake Steve Jobs blog after a reader had submitted them.This is funny stuff, because in both images, there's a greying white man with glasses on a huge TV screen talking. But in 1984, the man is talking about universal ideology to a numb audience, while in the modern scene, Jobs was talking about changing the market for mobile video with a 6.5mm device, and the crowds were enthusiastically applauding.There was one other amusing similarly however: shortly before eating the hammer thrown by the Macintosh girl in orange hotpants, the 1984 Big Brother screen says, “Our enemies shall talk themselves to death and we will bury them with their own confusion. We shall prevail!�?In 2007, Jobs has said some similar things about Microsoft, but the Macintosh hammer is actually being thrown at Vista. So while it’s not exactly the same thing, it is a funny coincidence. Along those lines, Lyons provided some examples of how, as an enemy of Apple, he can talk himself to death and be buried in his own confusion.[Big Brother - Forbes]Here's What You Believe.So far, we've just covered the photos on the article. Once Lyons started writing, it was like SCO all over again. He says early iPhone buyers “were threatening to take to the streets again--only this time with pitchforks and torches. They were furious because Apple Chief Steve Jobs slashed the phone's price to $400 from $600, making early adopters look like suckers.�?If Lyons really wants to make up garbage and rewrite history, he should confine himself to Wikipedia where he can't do any damage. The people complaining about getting what they paid for were a whiney minority amplified by a desperate press trying to find something wrong with the most successful electronics product launch in history.Anyone who thinks buyers who paid $600 for the iPhone to get the hottest new device available--and who ended up with a phone that cost less overall than even the $99 Motorola Q, and further got a $100 refund credit--are “suckers�? needs to reevaluate what being a sucker might mean. Perhaps paying Microsoft $850 for the equivalent of a $300 Apple TV with less storage and a slower network, and then still needing to buy a TV tuner is a better example of being a “sucker.�?The only difference is that Lyons didn't get a free iPhone from Apple, but did get a bunch of Microsoft Media Center stuff to try out without having to pay for any of it as the rest of us would have to do, were we inclined to let Microsoft control our TVs.[Ten Fake Apple Scandals: 1 - Phony Rage About iPhone Price and Profits]The SCO Shill Lines Up Behind Microsoft, AT&T, and the RIAA.It might not be a surprise that a writer who identified SCO as safe to cheerlead for because of its seemingly legitimate corporate position would similarly jump at the opportunity to weep crocodile tears for some of the other most reviled companies doing business on the planet. Lyons is apparently not very smart about picking corporate favorites.“It looks like an anti-Apple backlash has begun,�? Lyons wrote, noting that NBC Universal pulled out of iTunes to partner with Microsoft's Windows Media DRM-based Amazon UnBoxed store. He didn't mention that NBC also partnered with Fox in setting up a joint Microsoft store, and then went solo on its own website trying to offer ad-encrusted, Microsoft DRM-ed, exploding content. No doubt all of those efforts are going to work out well for NBC.Lyons also said “Vivendi's Universal Music Group also reportedly won't renew its contract with Apple,�? without clarifying that only refers to its long term contract; Universal music hasn't budged from iTunes. He also cites unhappy noises from Hollywood about Apple's desire to lower prices to make content more desirable to consumers, who can already obtain movies and TV programming free over the air or via unauthorized downloads.Omitted from Lyon's one-sided overview of the iTunes Store is CBS executives' comments that they are very happy with its deals with Apple, and that both CBS and Fox are offering free season premieres through iTunes.And what about Viacom billionaire Sumner Redstone, who was recently cited by BU reporter Jessica Ullian as saying that “iTunes has 'resurrected the music industry' by creating a legal, affordable, instantly gratifying purchasing system for fans. The challenge now is for the film industry to catch up, he said, and for competing companies to work together to establish new standards and practices.�?[CBS and Fox offer free TV through iTunes US - iPod/iTunes - Macworld UK][How iTunes Saved the Music Industry - BU Today]Pity the Poor AT&T.Lyons wrote that “Jobs isn't known for treating partners well,�? noting that the iPhone doesn't sell AT&T's worthless media services or overpriced ringtones. That's really an example of Jobs treating the customer well, and the Fake Steve Jobs should know that. Why repeat the “Apple can’t partner myth?�? AT&T is making a major turnaround, funded by record numbers of headlines fawning over the iPhone. Apple has propelled Cingular from a middle of the road brand into its new AT&T name, which the company purposely rolled out in conjunction with the iPhone to benefit from the excitement surrounding it. Should we be aghast that Apple declined AT&T's own overpriced MEdia Net TV clips and ringtones? Is AT&T even worried about it?The service provider reported that the iPhone has outsold any phone it has ever introduced. Does that make Apple a bad partner? Would it be better if Apple really was the New Microsoft, extending its support and then yanking it back in a PlaysForSure/Zune style move? Does Lyons really have the extra credibility to burn in making such ridiculous comments? [How AT&T Picked Up the iPhone: A Brief History of Mobiles]More of the New Microsoft Meme.After noting some of Apple's recent successes, Lyons wrote, “the flip side of Apple's success is that Apple has started to seem scary.�? Scary, uncertain, and doubtful! “No longer is Apple the plucky underdog out to save the world,�? Lyons fears. Oh really? Has evil been vanquished? Is there not still the inky black bile of Windows Media DRM dripping from every alternative store in the universe? Does not Microsoft still have the remains of that $50 billion it took in last year from its monopolies--real monopolies, not the imagined fantasy kind pinned on iTunes by the media? You know, the monopoly in PC desktop operating systems held by Windows, the monopoly in servers, and the monopoly in desktop Office software? The monopolies that earn Microsoft overall profit margins as high as 81% on products that are over a half decade old? From that perspective, Apple could really turn evil over the next twenty years and still not compare to the wrongs we've suffered from Microsoft. Even so, Apple really isn't doing wrong by its consumers. If the best Lyons can do is to suggest that some RIAA labels and Hollywood executives are miffed by Apple's push for low prices, he'd better scramble to find something more problematic than that. I like low prices in content. I don't long for access to AT&T's expensive ringtones.iPhone Price Problems.Apple's iPhone was a better deal at $600 than Microsoft's Windows Mobile Motorola Q at $99, because Apple twisted AT&T's arm to provide lower priced service, making the iPhone around $200 cheaper across two years of use. Apple then dropped the iPhone's price by another $200, making it now almost $400 cheaper than the nearly free phones on the market.Is this wrong? Did Apple harm those of us who recognized value in the iPhone back in June? Did Apple defraud a million people who bought the iPhone at a good price when it lowered the price afterward? [Apple's iPhone Price Cut Unleashes Complaints]Apple TV Only A Flop For Forbes' Frauds.Lyons repeats in passing--without any factual backup--that the Apple TV is a flop. Oh really? Is that because it profitably sold a quarter of a million units with little advertising? Incidentally, that's nearly double the number of new customers TiVo signed up, as reader Timothy Bandy pointed out. He noted that “TiVo-owned subscriptions totaled 1.71 million, up 136,000 on an annual basis compared to the year ago-period.�?If Apple sold 250,000 units of the Apple TV, “it's already doubled the amount of new customers Tivo made last year,�? Bandy wrote, “or to put it another way, they already have 1/7th of Tivos' customer base without hardly trying. And as you pointed out, I doubt they've lost several million bucks in the process.�?TiVo lost $19 million in the last quarter, and $50 million last year. Apple sells the Apple TV at a profit, although not much of one. That's because the company is working to sell content that works on the Mac, and Apple TV only serves as a contributing part of that strategy. Apple is working to expand the market for fair priced Internet downloads, in opposition to high-DRM, high-priced alternatives.Microsoft has lost billions in its consumer electronics products, including the Xbox 360 that Windows Enthusiasts like to compare against the Apple TV. Microsoft also stomped on efforts by Linux users to recycle the old Xbox as a media playback system. Where's the outrage? Where's the “suckers�? blubbering? Where's the reporting that “Microsoft regularly betrays its partners?�? It's certainly not in the pages of Forbes. [Brent Schlender's Apple TV: Fortune Dud or Fortune FUD?]It's all Downhill From Here.Lyons then complained that iPhone sales must be fading because Apple dropped the price, neglecting to account for the fact that Apple met its million unit sales goal three weeks early. “The next version of OS X, called Leopard, has suffered delays,�? Lyons wrote, again failing to compare its 6 month delay to the six year delay of Vista. I guess Apple isn't the New Microsoft after all.Lyons begged for forgiveness after beating on Linux users for years and glorifying a bunch of greedy SCO investors trying to exploit intellectual property rights the company didn't even own. In describing his partnership with Rob Enderle, I downplayed his SCO role after he pleaded for evenhanded coverage of his past, noting that he did publish some correct information after the writing was on the wall for SCO.However, for his shameless attempts to present the same kind of one-sided, half-truth, negative-spin that praises the worst corporations on Earth while reviling the only company that seems to share any interests and values in common with its customers, Lyons has lost the bits of credibility he begged to retain. Shame on him, and Zoon on Daniel Lyons' head. [Daniel Lyons: Fake Steve Jobs and the SCO Shill Who Hated Linux]Thanks to John Schmidt for the “Big Brother�? link.What do you think? I really like to hear from readers. Comment in the Forum or email me with your ideas. Like reading RoughlyDrafted? Share articles with your friends, link from your blog, and subscribe to my podcast! Submit to Reddit or Slashdot, or consider making a small donation supporting this site. Thanks!

• RoughlyDrafted Magazine on September 25, 2007
• More Details
• Related News

Why Dan Frommer and Scott Moritz Are Wrong on iPhone Sales

Daniel Eran DilgerSilicon Alley Insider's Dan Frommer says Apple's announcement of reaching its million mark goal in iPhone sales three weeks early is actually bad news for Apple and is convolutedly "below plan." He also says the announcement only props up the speculative conjecture by Scott Moritz of the Street that Apple's iPhones sales are somehow woefully below expectations. They're wrong, here's why.The PremiseFrommer wrote that Apple isn't selling iPhones as fast as planned and is set to only sell around half of its 2008 goal.His premise revolves around the idea that if Apple were selling iPhones at "a constant rate," a million phones in 74 days would be five million per year. However, because it sold over a quarter of those in the opening day and a half at the end of June, Frommer calculates that sales of the remainder in the 72 days since the first of July mean that Apple is only hitting a "3.6 million annual run rate."By the end of 2008, that would only result in 5.8 million units instead of the ten million goal Apple. [Silicon Alley Insider: Apple's iPhone: 1 Million Is Below Plan]Strike One: The Run Rate Myth.The most obvious problem with that idea is the fact that devices don't sell at a constant “run rate." Apple's iPhone sales took off at launch much faster than the original iPod due to the fact that a swell of early adopters were ready to buy it after being convinced over six months of anticipation. At the same time, many potential buyers held off on plans to buy the iPhone until they could read reviews and get a real sense of how it worked. Many were also locked into contracts with Verizon or Sprint. With only six months of advanced notice, it will still be a few more months before the majority of buyers who want an iPhone even get the chance to buy one without having to pay outrageous fees to cancel their existing mobile contract. iPhone sales are also now taking on the network effect of the iPod, as early adopters show their friends. All these factors have difficult to estimate impacts upon sales that make trying to figure a static “run rate�? a very simplistic and pointless exercise.However, there is another factor that simply blows the entire idea of a static “run rate�? out of the water. Last November, I predicted that sales of the Zune would bomb that winter because Microsoft had failed to critically examine Apple's historical sales patterns. Sure enough, the Zune was thrown against the rocks by Apple's riptide. Frommer's idea ignores that same reality by imagining that iPhone sales will schlep along at a linear pace. Had Frommer tried to calculate an "annual run rate" for the iPod based on a portion of third quarter sales at any point over the last half decade, he would never have been close to accurate. That’s because Apple’s iPod sales roughly triple every winter quarter.In 2002, it sold nearly as many iPods in its winter quarter as it did the first three quarters combined: 219,000In 2003, it actually sold more iPods in its winter quarter than in the first three combined: 733,000In 2004, it again sold more iPods in its winter quarter than in the first three: 4,580,000In 2005, it sold more than 4 million units every quarter, but still sold nearly three times as many in the winter: 14,480,000.In 2006, it sold more than 8 million units every quarter, and then sold over 21 million in the winter quarter.In 2007, it has maintained quarterly sales between 10.5 and 9.8 million per quarter.[Strike 3: Why Zune will Bomb this Winter]Strike Two: The Have it Both Ways Myth.One particularly annoying bit of analysts' talk about Apple's expectations is that they can't seem to decide if Apple's projections are bad because they are conservative lowballs, or if they are bad for being overly enthusiastic figures the company won't be able to reach. They often try to describe them as both, loading contempt on both sides of the scale. This makes them look very foolish. Do they think we have no memory, or are they just changing their stories back and forth in sheer desperation?Frommer tried to argue both sides at once in the same article. Recall that Apple only ever gave two iPhone sales goals: one million by the end of the first quarter of sales, and ten million by the end of 2008. In his piece, Frommer suggests Apple will only be able to sell 5.8 million iPhones by the end of 2008, based on that fallacious "run rate." That would be just over half of Apple's ten million goal. However, he then says that Apple's immediate short term goal was an unimpressive low ball, no doubt because Apple reached it three weeks early.Apple's stated goals must be a greatly frustrating logical conundrum for Frommer, because even at a “run rate" of one million in a quarter, Apple could only ever hope to sell six million iPhones by the end of 2008, another five quarters later. No wonder he's faced with trying to say that the immediate goal was too low and the longer term one is too high! Frommer needs to stop trying to pound round facts into square holes just so they can be stacked up like bricks the way he would like them to be.Strike Three: The Market Bearing Price Myth.While Frommer and Moritz are enamored with the idea that iPhone prices could only be cut if sales were in crisis, a variety of obvious market realities don't support that simpleton idea. Between now and the end of 2008, Apple has just two holiday seasons. If it wants to dramatically exploit its historical potential for selling roughly three times as many gadgets during the winter season, it makes sense to trade off unit pricing for volume sales, even if it could perhaps sell fewer at a higher price and make more short term profits doing so.Such a strategy isn't unique. Microsoft and Sony currently lose money on their new game consoles in desperate bids to establish their gaming and HD video playing platforms. Even so, this year they both cut prices again to accelerate volume demand. Nintendo purposely aimed low to capture volume sales using a more attractive price point. Given high demand for the Wii and extremely constrained availability, Nintendo "should" seemingly raise its console price and profiteer. It hasn't. While prices are clearly linked to demand, it is a common fallacy to think that the "right price" is always the highest the market will bear. Jobs' 99 cent pricing in the iTunes store is clearly not the top price consumers will pay for downloads. Music labels are fuming that other licensees such as Verizon will collect $2.50 or more for portions of a song sold as a ringtone. Jobs wants media prices low to induce volume sales and attract buyers to the legitimate market for music and movie downloads. Labels and studios want "market pricing," in part so they can jack up the price of popular music to exploit consumers, and in part so they can exploit artists by threatening to release their work at lower tiered prices and signal to the market that their careers are over.[Universal vs Apple in the iTunes Store Contracts][Nintendo Wii vs Microsoft Xbox 360 and Sony PS3]This All Happened Before.Dial back the clock twenty years, and you'll discover that Steve Jobs also fought with Apple CEO John Sculley over the price of the original Macintosh. The desire to use an expensive but pioneering amount of RAM and a futuristic new processor had inflated the price of the Mac, but the design team was still able to deliver it at a fairly attractive price point of $1,995. Scully determined that the Mac would still sell at $2495, delivering high profits to fund splashy advertising. Nothing on the market was really similar to the Mac apart from Apple's $9,995 Lisa. VisiOn for the PC similarly cost nearly $10,000 and did far less. Sculley thought that the market would bear anything Apple might charge. Andy Hertzfeld recalled on Folklore.org that in October 1983, "Steve Jobs strode into the software area one evening, looking angry. 'You're not going to like this,' he told us, 'but Sculley is insisting that we charge $2495 for the Mac instead of $1995, and use the extra money for a bigger marketing budget. He figures that the early adopters will buy it no matter what the price. He also wants more of a cushion to protect Apple II sales. But don't worry, I'm not going to let him get away with it!'"Jobs fought Sculley over the price increase, but Sculley prevailed. Sure enough, Macs did sell well out of the gate to early adopters at the higher price, but sales then began to stall. While Jobs couldn't cut the price for the original Mac to induce wider adoption in the mid 80s, he could choose to cut the price of the iPhone early and use interest in the iPod Touch to ramp users toward the iPhone. That price cut will dramatically boost sales this winter, just as iPod price cuts and feature refreshes do every year.Apple will earn less profit on individual hardware sales of the iPhone, and may even earn slightly less money overall this quarter than it might have selling the iPhone at $599. However, a $399 iPhone will dramatically boost the company's sustainable subscriber revenues and devastatingly cut into stationary rivals like Palm and the Windows Mobile licensees, giving them little opportunity retool and strike back with copycat products.  [Price Fight - Folklore.org][Office Wars 3 - How Microsoft Got Its Office Monopoly]Strike Four: The Myth of Unlimited Availability.Another problem with idea that iPhone sales were in crisis--and that a price cut is a conspiracy to hide the truth--is that Apple sold out of iPhones in many of its retail stores throughout the first three weeks on sale.Carl Howe of Blackfriar's Communications tracked iPhone availability every day through July, and then animated the results in a movie that depicts just how constrained iPhone inventories in Apple's retail stores were. So not only did Apple meet its 94 day goal 20 days early, but it did so despite having no or few iPhones to sell in many of its stores during the first 21 days. Price isn't just related to demand, but also to supply.That also demonstrates the fallacy of Scott Moritz' assertion that Apple secretly planned to sell a million iPhones in a day and a half, and was sorely disappointed after failing to do so. How could Apple have planned on selling a million units in one day when it didn't even have a million units on the shelves of its stores during the first month? Remember, Moritz wasn't saying Apple had a delivery problem in getting enough units to stores as Nintendo is experiencing with its constrained supplies of the Wii. Instead, he tried to suggest that interest in the iPhone was far below Apple's estimates, and buyers were leaving it on the shelf like Windows Vista. The result, he claimed, was that "rivals were rejoicing."The only real rejoicing by rivals was that Moritz was volunteering to repeat the talking points handed to him by Verizon shill Roger Entner of IAG Research. Just hours before Apple announced it had sold a million units, Moritz tried to get some traction out of the idea that Apple had dropped the price in desperation to find another half million or so customers over the next three weeks. Apple isn't the typical tech company being run by visionless bean counters. It it were, it would have continued selling $600 iPhones at least through the end of September and then announced that it had sold its million. Apple had to push out new iPods in early September and fit the iPhone into the price range because next month it will be rolling out Leopard and a series of new software updates. Apple feeds the press in small, consistent, and regular feedings so reporters know what to write. If Apple were a big stupid company such as, say HP, it would parade out a mix of dozens of consumer and business products all together in one big event, and nobody would ever hear about any of it. HP did.[Why a million iPhones in 74 days is better than you think- Blackfriars][HP's marketing this week: fashionable but ineffective - Blackfriars][Unraveling Anti-Apple Panic: the iPhone Launch Success] [More on Scott Moritz and the Jim Cramer Misinformation Engine]Strike Five: It's Too Late to Deny the iPhone.The most comical part of Frommers’ analysis is that he’s trying to stuff a cat back into a bag and explain that there was never really any cat, long after everyone in the room heard the purr and pet the thing. Sorry, but the windows of opportunity to doubt the iPhone have long since closed.Real Windows Enthusiasts were aware of the need to deny the iPhone well before its release. They all chimed in with reasons why the iPhone wouldn't work, wouldn't offer what consumers want, and wouldn't sell well, all hoping that their non-stop misinformation campaigns would act as a self-fulfilling prophesy. They failed miserably.John Dvorak began his smear campaign immediately, appearing on CNBC to say that the iPhone was "trending against what people are really liking in phones nowadays, which are those little keypads.�? He explained, “The BlackJack, the Samsung, the BlackBerry obviously pushes this kind of thing. The Palm, all of these. I guess some of these stocks went down on the Apple announcement, thinking that Apple could do no wrong. But I think Apple can do wrong, and I think this is it." Reader Jim Barrow sent in a link to a MarketWatch article from March, where Dvorak scribed a rambling diatribe entitled "Apple should pull the plug on the iPhone." He offered no factual basis for worrying that the iPhone might not work out apart from the offhanded comment that "there is no likelihood that Apple can be successful in a business this competitive," words which echoed Dvorak's 1984 observation that "the Macintosh uses an experimental pointing device called a 'mouse.' There is no evidence that people want to use these things."In April, Dvorak inflamed his 'pull the plug' rhetoric further in a TWiT podcast, where he reported to an audience of hundreds of thousands that the iPhone only delivered "40 minutes of talk time" and "the interface fouls up constantly.�? Dvorak said that his inside information on the iPhone came from a "guy at Cingular who’s testing the product," adding, "he’s telling me confidentially and I shouldn’t be telling anybody."[John Dvorak: How Wrong Can One Guy Be?][Readers Write: Don't Write About John Dvorak Anymore]It'll Be the Death of You.Dvorak was joined by Rob Enderle, who called the iPhone “damned�? and “not a very good phone�? at every opportunity in the months before its launch, despite not really knowing anything about it, or even ever offering any rational criticism. Instead, Enderle appealed to fantasy fears of sexual assault, murder, and the violent death of children, all of which he suggested might somehow be related to the iPhone. Unaware that a password protected iPhone--or even a unauthorized unit without a configured service plan--can still be used to make emergency phone calls, Enderle wrote about, "an emergency situation where, say, a woman was being raped and couldn’t call for help because she didn’t remember her iPhone password." As I understand, with a Windows Mobile phone, even if the unit crashed while trying to place the call, at least the victim could use it like a brick as a blunt weapon. Enderle also feared that being unable to take out the battery would somehow making recharging it impossible, resulting an a scenario where one might end up on “the wrong side of town�? with a dead iPhone and be murdered because of it. Being on the wrong side of town was apparently the source of most murders prior to the arrival of the cell phone, which somehow made it safe to be in bad neighborhoods. For those who unfazed by the prospect of one's own own grizzly death in relation to the iPhone, Enderle appealed to his readers to please think of the children, particularly the potential for their brutal decapitation in an iPhone-related collision. "If you are buying this phone for a child or another member of your family," Enderle warned, "please emphasize that entering data on this phone while driving is dangerous." In contrast, operating the slide out keyboards of an HTC brick phone, or using both hands to thumb type on a BlackBerry may or may not save your children as they drive off an embankment, but at least you'll know they didn't die at the hands of Apple's "damned" iPhone.[SCO, Linux, and Microsoft in the History of OS: 1970s][Mac OS X vs Linux: Third Party Software and Security]Pure Concentrated Evil with a Multitouch Screen.Brian Lam of Gizmodo published an impassioned plea to boycott the iPhone shortly before its launch, due to the fact that Cingular had purchased the AT&T name, a brand Gizmodo's writer correlated with "monopoly tactics" in the late 70s. Gizmodo hasn't ever called for the boycotting of Verizon Wireless, which is well known for its anti-consumer tactics and which shares just as much blood with the old AT&T as its Baby Bell sibling Cingular, nor has it ever urged the boycott Microsoft products due to "monopoly tactics." Gizmodo also failed to boycott any other GSM phones that are tied to AT&T.Gizmodo's Lam and Enderle then teamed up with Slate's David Sessions in an article purporting to expose Apple's rated battery life for the iPhone. Sessions complained about the attention the iPhone was getting, and tried to dismiss Apple's announcement of a two fold increase in battery life over what was originally advertised. Unbelievably, Sessions and friends could only explain away the iPhone's jump in talk time by crediting its glass screen, saying that "glass transmits light more efficiently than plastic." That and some witchcraft.However, all of these individuals sharply reduced their squirt rate of false information after the iPhone's successful launch. In day and a half, Apple sold 270,000 iPhones compared to the 500,000 Palm OS Treos, 1.03 million RIM BlackBerrys, and 1.51 million Windows Mobile phones that were sold worldwide in the first 90 days of 2007.Apple has since nearly matched highflying RIM in sales during July, despite being limited to a single carrier and only offered for sale in the US. At this point, denying the iPhone is like saying the Earth is flat. It might be fun to do at a Renaissance Faire, but pretending to seriously doubt reality is not a good career move unless you work for the Street--or perhaps Rupert Murdoch, as Dvorak does.[Secret iPhone Details Lost in a Sea of Hype and Hate][iPhone Sales vs Zune, Palm, RIM, Symbian, Windows Mobile]And Now: a Warning.Let it be known that anyone who publishes further misinformation or blows out similar inanity will risk being instantly awarded a Zoon on the spot. No complicated voting, no tedious application process. New Zoon nominees will be rubber stamped with the same effortless fast tracking as the ECMA declaring Microsoft technology as an international standard.In fact, I’m going to totally Zoon Dan Frommer and Scott Moritz right now, as well as John Dvorak, Rob Enderle, Brian Lam, David Sessions, and even Roger Entner. And John Sculley. And while I’m handing out an intellectual property construct that costs me nothing to distribute, I will also award Steve Jobs with a Zoon for the whole two month “just kidding�? iPhone pricing situation, although I might take half of it back if I get a $100 coupon that doesn’t force me to spend $500 to actually use it. So let that be a warning to you out there on the Tubes thinking about how to linkbait an article at the expense of the progress of technology. I have a rapid firing gun full of Zoons and I’m not shy about cranking them out. Be sure to post any nominees.What do you think? I really like to hear from readers. Comment in the Forum or email me with your ideas. Like reading RoughlyDrafted? Share articles with your friends, link from your blog, and subscribe to my podcast! Submit to Reddit or Slashdot, or consider making a small donation supporting this site. Thanks!

• RoughlyDrafted Magazine... on September 12, 2007
• More Details
• Related News

Dear Santa Steve: A Sub-notebook, iPhone stability and Aperture 2

Filed under: Humor, iTS, Portables, Odds and ends, PowerBook, Steve Jobs, Apple, Macbook Pro, MacBook, iPhone, HolidaysDear Santa Steve, As my most recent bank statements show: I've most certainly not misbehaved over the course of this last year. I've queued for hours in the bitter cold, and sacrificed myself endured keyhole surgery for injuries from doing so - no really, that bit isn't hyperbole. If there's anyone who's been an exceptionally well behaved Apple fan, you've got to admit I'm up there with the best of them. So what on earth could I be asking for? Just a few simple things: 13" MacBook Pro / MacBook nano Steve, I can wax lyrical about the sheer brute force of my 17" MacBook Pro - I love it, I really do. But lugging it on the train for a ninety-minute commute everyday isn't the pleasurable workout you might expect. In fact, I'd quite like a little version of my MBP, so that I pack it into a reasonably-sized Crumpler with my Nikon D80 and not resort to hiring sherpas buying a small trolley-case to travel. So what might I be asking for? If you were to start by making the display 13 (matte) inches or there abouts, and keep a dedicated GPU, that'd be ace - a machine Aperture would love. In fact, you could even remove the optical drive from the body, and use SSD if you really, really, wanted. I can hear Jonny Ive say 'SSD may be a little way-off yet' in the background, but you get the idea? All I'm asking for is a modern-day 12" PowerBook. I've sold my soul to Cupertino maximised my overdraft told the bank not to block large charges from my local Apple Store, and you've got my bank details. So let's work something out, for I can't be the only one asking for such a machine this year.Stability in my iPhone This one's arguably simpler Steve, what with it not requiring you to design any new hardware. I'd like my iPhone's iPod and Safari applications to get on better than you and John Sculley. I'm sorry, that was perhaps a little too forceful but I think I made my point. A software update to the device that brings some new functionality would be most welcome too, what with it being 'all about the software' and the SDK on the horizon.Aperture 2 This one may seem out of place for Stevemas - for general wisdom places Macworld as the launch of more consumer-orientated products - so I'll happily be told 'be patient, my child' for this one. But with Aperture now the last of your professional applications not to see a notable (paid) update, I'm hopeful that whatever may be in the works arrives sooner rather than later.There's but one more thing, and I'll be content for a while Steve. In fact, if there's one thing I'd choose from my requests this year, it would be this.... Let's take these big-media names to task, and encourage investment in, not criminalisation of, those who do buy their content online. Towards the end of 2007, Apple seemed to lose their iTunes momentum despite the year getting off to a good start. EMI went on the offensive, trying to capture hearts and minds by dropping DRM from their download sales. But since then, we've seen little continuation in the dream of eradicating DRM from our digital lifestyles. Steve, in 2008, all I want is for Apple to help bring the media industry back to serving the needs of its customers as a business model. Let's make it less of the iTunes Extortion and Shakedown Store, and all about the music once more.There's cookies by the side of the MacBook Pro - and green tea simmering on it. Enjoy.Permalink�|�Email this�|�Comments

• The Unofficial Apple... on December 24, 2007
• More Details
• Related News

Forbes Prints Insanely Self Serving Attack on iTunes by MediaNet CEO Alan McGlade

Daniel Eran DilgerForbes, best known to many readers as the soapbox Daniel Lyons used to promote--perhaps unwittingly--a pro-Microsoft agenda backing SCO and vilifying Linux and open source, has taken another opportunity to present outrageously false information serving the interests of Microsoft: an impassioned outcry of rage over the success of iTunes.This time, rather than using a journalist Forbes gave its bullhorn to Alan McGlade, the CEO of MediaNet Digital. Although not identified as such by Forbes, his company supplies the music library behind MTV's Urge, Yahoo, FYE, and the Zune Marketplace, all of which are Microsoft’s partner Windows Media DRM stores. I wonder if he has anything bad to say about Apple and its music business?[Daniel Lyons: Fake Steve Jobs and the SCO Shill Who Hated Linux]Tear Down This Wall!In a rapturous plea to abandon Apple, McGlade complained that "In a flat, digital world, walls don't need to be torn down. Thanks to online file sharing and social networking, people are able to go over, under and through walls." No doubt the company stocking Microsoft's Windows Media stores would like nothing more than an open playing field where everyone could compete. Oh wait, companies already can. Stores like eMusic profitably sell MP3s online next to iTunes, and Apple has made no efforts to erect barriers to sales of open music on the iPod. Apple does stop DRM providers from using the iPod, and this incenses DRM providers like Real and Microsoft.The other problem for companies selling egregious DRM is that customers hate their business models. People don't want to pay to rent music, or they would be. They have had lots of opportunity to do so.McGlade is bitter to have partnered with Microsoft--the most deviously anticompetitive and monopolistic company in technology and the biggest proponent of the most restrictive types of DRM--only to lose out in the music business to more permissive and liberal stores like Apple's iTunes and the popular iPod, which will not support anti-consumer Windows Media DRM at all.[Of Apple And Oranges - Forbes]McGlade Cries Over His Own DRM Failure. McGlade weeps out a portrait of his own failure, writing, "How is it then that one of the world's most innovative technology companies has managed to erect its own exclusive, and so far impregnable, kingdom? A relatively small percentage of world music sales occur through digital downloads. But, those that do, happen mainly through iTunes, Apple's online music store. "It's hard to remember any one company establishing such total control over a segment of our culture as Apple has on digital music. The iPod accounts for 70% of personal music player sales, while iTunes is estimated to direct more than three-quarters of all music downloads."Yes it is easy to forget about Microsoft when you are bound to the company's teat. With some objective perspective, perhaps even McGlade could recognize that he bought into a deal that was 'guaranteed to win' because of Microsoft's 97% monopoly hold over computers worldwide. But he lost, and miserably so, as he points out. Now he wants the market to pay him without having to compete. McGlade expects the world to ‘correct’ his defeat because he is simply owned profits for offering DRM in partnership with Microsoft. Sorry McGlade, you have to earn your money.[Microsoft’s Outrageous Office Profits]Double Locked Down!"Apple has maximized its dominance of the digital music market with a double lockdown." McGlade says, but leaves it somewhat unclear what either of those locks are. "The combined clout of iPod and iTunes is mutually reinforcing and gives Apple enormous marketing leverage." Is the iPod at all locked to iTunes music? No, in fact we know, as McGlade earlier pointed out, that downloads only amount to a small percentage of music on all music players, including iPods. Most music comes from users’ own CDs.McGlades' comment is particularly saturated in hypocrisy because the stores he represents--as a competitor to iTunes--are mostly geared toward subscription plans, and therefore lock users to to a specific store and lock them to a monthly fee. That's the real double lock down, but McGlade doesn't want his readers to think about that. He just wants their money.[BBC Prints Irresponsible Rubbish on Apple]Remember: Apple is the New Microsoft.McGlade then describes how Apple is defining popular music, and that it has the power to promote music on the front page of iTunes. He warns that "as digital devices diversify [through the imminent adoption of Microsoft-partnered players]... music lovers will inevitably seek digital music from a multiplicity of sources [selling music from MediaNet]."This makes lots of sense! I know when I find a grocery store offering good deals on everything I need, I run to competitors to see if I can pay more to sign up for subscription memberships that will bill me whether or not I shop with them.McGlade then describes Apple as the Orwellian "Big Brother of the digital music scene." In case you didn’t get the memo that’s being passed around by every flack in the business of shilling, Apple is the New Microsoft, and so consumers should revile the company and flee to the safe harbor of Microsoft, which is now, logically, less of a Microsoft than Apple.Forbes’ Lisa DiCarlo paints ugly pictures of Apple at every opportunity, but really outdid herself with the 2005 headline “Is Apple The New Microsoft?�? which castigated Apple for its lawsuits against bloggers. In the same year, Daniel Lyons advised in Forbes’ “Attack of the Blogs�? that, “you can't stop bloggers from launching an allout attack on you or your business if that's what they decide to do--but you can defend yourself.�? So which is it Forbes?Since then, the idea that “Apple is the New Microsoft�? has been aped by such objective thinkers as Paul Thurrott of Windows Supersite, and supreme shill Mike Elgan, the former editor of PCWorld. How they can claim that Apple is bad for being like the company they have made excuses for over the last two decades is difficult to explain. Fortunately, they’re still wrong.[Microsoft Surface: the Fine Clothes of a Naked Empire][Paul Thurrott's Merciless Attack on Artie MacStrawman][Myth 4: The iTunes Monopoly Myth]Forbes' Fraud in Photos.We don’t expect much from Thurrott and Elgan. We might expect more from Forbes. However, in a move that erases any suggestion that Forbes is objective and honest in the information it publishes, McGlade and Forbes put together a slide show of stomach churning, false information that goes far past disingenuous and lands directly in a patch of flat out fraud.The first slide depicts a “DRM is Killing Music" t-shirt featuring an iPod. McGlade says "It's through proprietary DRM software that Apple enforces iTunes/iPod exclusivity." Except that that is a lie. The iPod doesn’t use DRM at all unless users chose to buy tracks online, which only a minority of users do.He then notes that things are changing, starting, he says, with Universal and WalMart. He also notes that "Apple, to its credit, has embraced this shift, offering DRM-free downloads on its site. However, every other retailer chose to offer-DRM free in the open MP3 format except for Apple."This is all very convincing except for the fact that we all know that Apple shocked the industry by announcing the first DRM free deal with EMI. Other groups slinked along later, offering a few MP3s only when browsing Windows-only sites as WalMart does. Apple sells its music in AAC format, which is as open as MP3, but more technically sophisticated and easier to license. McGlade is working hard to associate DRM with the iPod, but he’s withholding the truth to do so.The second slide of misinformation depicts the clunky failure of the Zune, along with a McGlade caption that notes "Serious competition [to the iPod] has emerged in the past year or so, and its impact is beginning to be felt." No it hasn't. The Zune is a joke and a major failure. Microsoft is losing billions in its consumer electronics efforts in order to establish a monopoly position in music with Windows Media, but is failing. McGlade is just sorry to be on the losing side, and is scrambling to tell us that up is down. [Ten More Myths of Zune]More Promotional Zune Fraud.McGlade dives deeper into the toilet to fish out a third slide, which depicts a man in a wireless cafe using a Titanium PowerBook, photoshopped to obscure its Apple logo and further tampered to include what appears to be fake Intel and Windows stickers. To what further fraud will Forbes stoop?Dear Forbes: your next assignment to is photoshop a VW Beetle to look like a generic car, and then use it in an article assailing Volkswagen for being too much like General Motors in the 1970s.But what does a doctored Apple laptop at a hotspot have to do with the music industry? "Samsung, Sandisk and Microsoft's Zune were the first to innovate with features like wireless, access to music subscription services, unprecedented battery life and larger screens,�? the caption announced. “Fast wireless puts the 'music anywhere' dream within reach.�?The Zune did include WiFi, but it was completely worthless for anything apart from draining the battery. Microsoft limited it solely for use as a way to send exploding commercials to other Zune users. It was Apple that delivered the first and only WiFi music store, delivering the supposed 'dream' of buying music anywhere. McGlade makes no mention of this because he makes no money on sales through iTunes.[iPod vs Zune: A Buyer's Guide]Enter the iPhone."While Apple has scored another hit with the iPhone, the company will posses only a tiny segment, about 1%, of the global cellphone market in the product's first year." McGlade wrote. He should have said, "1.5% of the market in its first month," but his version sounds better for rivals. Why would he need to lie about the iPhone in a music article? "By 2008, hundreds of millions of these phones will employ standard Microsoft software that will make them compatible with most download stores and subscription services." Because that "standard Microsoft software" would sell McGlade's MusicNet content, he has to desperately overreach to suggest that the future will suddenly change and consumers will somehow get excited about Microsoft's truly awful Windows Mobile products, despite their being a complete failure on the market even prior to the release of the iPhone. Microsoft only has a tiny scrap of the smartphone market, about 5%, despite representing a broad selection of phone makers for half a decade. Apple outsold every one of those models in its debut month, selling at a premium price. That adds up to a wide spectrum of flacks, shills, and desperate CEOs ready to bad mouth Apple for their own loss in supporting Microsoft.[Secret iPhone Details Lost in a Sea of Hype and Hate][Apple: iPhone Now Costs Less than Ballmer's Lame Motorola Q]Music Anywhere.The next slide describes diverse devices that can play digital content, and depicts a Pioneer car CD player, which can play MP3 CDs and the radio. That means it can play CDs burned with iTunes, including purchased tracks, but not subscription music or WMA DRM.It strangely makes no mention of AirPort Express or Apple TV and their ability to play iTunes content wirelessly to home stereos or TV, or Apple’s lead in iPod integration with car makers, or its deals with airlines to plug the iPod into in-flight audio and video playback systems. That would undermine the intent of the photos. Besides, Forbes just printed an article by Scott Woolley which pretended that Apple TV was a huge failure compared to the massive losses behind Tivo (tens of millions per year) and Microsoft (billions).As reader Timothy Bandy pointed out, “overall, TiVo-owned subscriptions totaled 1.71 million, up 136,000 on an annual basis compared to the year ago-period.“So if Apple sold 250,000 Apple TVs, it's already doubled the amount of new customers Tivo made last year; or to put it another way, they already have 1/7th of Tivos' customer base without hardly trying. And as you pointed out, I doubt they've lost several million bucks in the process.�?[Scott Woolley Attacks Apple TV in Forbes, Gets the Facts Wrong]Double Locked Down Subscription Services.Touting the double locked down rental music business McGlade represents, the next slide notes, "subscription services, which allow unlimited access to millions of music tracks for an average set monthly fee of $10 to $15, have been around for some time." Yes, and have failed miserably! "But with the advent of wireless-enabled players, phones and home devices, they are just now poised to deliver on an awesome promise: access to virtually all recorded music, anywhere, any time." How? Ubiquitous networking "may soon render the idea of exclusive music ownership obsolete." In other words, no CDs for you. You will rent what MusicNet sells you, and you'll like it at whatever price they set. You can rent access from any Microsoft/MusicNet store you chose, and play it on any Microsoft PlaysForSure or Zune player you pick, just not both, because they’re aren’t compatible with each other. Both are, however, double locked down.Music You Want.Speaking of which, McGlade reaches out embrace Latinos and Christian music buyers by advertising two specialty web stores that sell music from... well, you-know-who: MusicNet. For this shameless and desperate advertisement / hit piece masquerading as news, Forbes gets a Zoon, as does MusicNet and its shameless CEO, Alan McGlade. Good luck trying to sell it, they’re worthless! I crank them out like paper money.What do you think? I really like to hear from readers. Comment in the Forum or email me with your ideas. Like reading RoughlyDrafted? Share articles with your friends, link from your blog, and subscribe to my podcast! Submit to Reddit or Slashdot, or consider making a small donation supporting this site. Thanks!

• RoughlyDrafted Magazine on September 22, 2007
• More Details
• Related News

Six Reasons Why Apple May Never Open the iPhone

Daniel Eran DilgerThe history of the Office Wars provides interesting context for Apple’s software strategy with the iPhone today. While third party software development offers all kinds of tantalizing potential for the new mobile, there are a half dozen reasons why Apple may not ever deliver the iPhone fully open to third party development, following the model of gaming consoles.Office Wars 1 - Claris and the Origins of Apple’s iWork Office Wars 2 - Microsoft’s Outrageous Office ProfitsOffice Wars 3 - How Microsoft Got Its Office MonopolySoftware Lessons For the iPhone: 1997 - 2007.When Steve Jobs gained the opportunity to retake control of Apple in 1997, he immediately set out to build and assemble a software business for the Mac platform. Apple restarted serious development of QuickTime, much to the chagrin of Microsoft, which had targeted its sights on quickly destroying it to make way for monopolistic expansion of its Windows Media. [Microsoft's Plot to Kill QuickTime][How Microsoft Pushed QuickTime's Final Cut][Why Apple Failed][How CPR Saved Apple][Why Apple Bounced Back]In addition to repurposing NEXTSTEP as Mac OS X and buying and building a series of professional and consumer software suites, the new Apple also developed the iPod platform. The iPod used intuitive software to differentiate Apple’s hardware, launching the computer maker into a new market for sophisticated, data-driven consumer devices. Microsoft’s own efforts in consumer electronics have flopped miserably with the failures of its Handheld PC, Pocket PC, UMPC, Windows Mobile, Media2Go, Mira, SPOT, and Personal Media Center initiatives, among many others.[Apple’s NeXT Server Offensive on Microsoft][The Spectacular Failure of WinCE and Windows Mobile][Windows XP Media Center Edition vs Apple TV]Microsoft Outgunned in Software by a Hardware Maker.Microsoft was late to realize the software threat posed by the new Apple. Five major revisions and over thirty free updates to Mac OS X have ran circles around Microsoft’s capacity to deliver one desktop operating system software update and a couple service packs since 2001.[Leopard, Vista and the iPhone OS X Architecture]Apple also introduced three generations of iWork as an expanding productivity suite during the four year hibernation period Microsoft left since its last version of Office for Mac. Apple delivered support for Microsoft’s own proprietary OOXML file format on the Mac even before Microsoft itself could. At $79, iWork will eviscerate sales of the $400 Office for Mac, which has until now been a cash cow lazily ruminating for years between releases.This year, Apple also targeted and destroyed Microsoft’s fledgeling efforts to repurpose WinCE as a smartphone platform, seemingly overnight. That has given Apple a significant new platform in the iPhone, soon to be joined by the new iPod Touch. [What’s New in iWork 08][Apple's Secret iPhone Application Business Model][Curious Stuff About the New iPods]Six Reasons the iPhone Will Stay Closed.Will Apple give third party developers the keys to its new vehicle and allow them to drive off with the value it has created? It hasn’t yet, and there are a number of reasons to think that Apple won’t. Note that I am not expressing an opinion that the iPhone should be left closed, but rather simply presenting why I think it is unlikely Apple will ever open it up in the same way the Mac is open to any and all development.First, the company has lined up a suitable outlet for third party expansion via the standards based web platform available within Safari. That’s not enough to do everything developers want to do--it has serious constraints for creating games, for example--but it offers a good enough alternative to serve more than 80% of most developers’ needs.

[Mobile Disruption: Apple's iPhone and Third Party Software]
[iPhone Gremlins: Crashing, Security, and Network Collapse!]
Second, the company has developed and begun production testing of online software sales through iTunes, currently limited to 5G iPod games. This mechanism appears too sophisticated to simply be designed for a half dozen $5 games. Apple is quite obviously going to distribute other software through iTunes for the iPhone. If it were going to be open, there would be no need for such a secure software distribution system.

[Apple's New Dual Processor Game Console]
[Hacking iPod Games: How Apple's DRM Works]
Third, historical perspective suggests that once a solid platform has been established, a vendor can sell software as fast as it can deliver it without even trying very hard. Apple’s Claris, Microsoft’s Windows, and the game consoles from Sony and Nintendo all provide examples of this. The iPod’s success suggests Apple can establish a viable mobile platform without the need for software partners. It can handle software transactions as fast as it can sell iTunes songs. That’s big.

[Office Wars 1 - Claris and the Origins of Apple’s iWork] 
[Office Wars 2 - Microsoft’s Outrageous Office Profits]
[Office Wars 3 - How Microsoft Got Its Office Monopoly]
[Nintendo Wii vs Microsoft Xbox 360, Sony PlayStation 3]
Fourth, depending upon large third party developers has caused Apple--and Steve Jobs--some severe headaches. Microsoft's late 80s betrayal of the Macintosh led to Apple’s enslavement to Office, and induced CEO John Sculley to sign away broad intellectual property rights to Microsoft, which Microsoft then immediately used as a weapon against Apple.

In the mid 90s, Microsoft led Adobe, Macromedia and other large companies to abandon the Mac platform. In the late 90s, those same companies refused to support Apple’s new Rhapsody plans following the company’s acquisition of NeXT, forcing Apple to spend half a decade retooling the Mac OS, primarily so those developers could sell their existing apps to Mac users without much effort, even while they were earning fantastic software profits and delivering minimal innovation.

In other words, Apple’s technology game plan was delayed for a half decade so that Microsoft could sell its $400 copies of Office and Adobe could sell suites of its $500 and up creative applications, all while Apple did all the work in adapting its $99 operating system to run their Classic Mac OS code with minimal effort. 

Prior to returning to Apple, Jobs experienced his own betrayal and abandonment at the hands of partners--including IBM, HP, Digital, Data General, and Sun--related to NeXT and OpenStep. 

In all of these cases, the third parties were simply acting in their own best interests. With the iPhone, Apple will act in its own best interests. It will carve out a phenomenally powerful software platform for itself.

[Why OS X is on the iPhone, but not the PC: The History of NeXT]
[Office Wars 3 - How Microsoft Got Its Office Monopoly]
[Cocoa and the Death of Yellow Box and Rhapsody]
Fifth, open Application Programming Interfaces involve complex management and maintenance. This is not a problem unique to Apple; it exists for Microsoft and every other company that offers an API for developers to build upon. An API is an interfacing boundary between the software supplied by a vendor and the software supplied by third parties. 

Ideally, an API allows third parties to do everything they need very cleanly. That allows the vendor to make changes on their side of the API curtain without causing any compatibility problems for software on the other side. In reality, nearly every change and update has significant impacts for third party developers. The more complex and low level of an API being exposed, the more difficult it is to manage significant changes without introducing problems for third party partners. 

Apple has worked to develop objective APIs that are stable and resilient to internal changes, but if developers are unsatisfied with the level of performance or portability provided, they will work around the API boundary, almost guaranteeing that any significant changes made on Apple’s side will break their applications in the future. 

Microsoft has often accommodated such “bad programming�? by expanding APIs and creating new ones, and lugging around a legacy of old APIs to retain broad compatibility with existing applications. The result is that it is very difficult for Microsoft to actually innovate, or to offer OS level enhancements that upgrade existing applications. 

This is particularly a problem for Windows Vista, which is hamstrung between the problem of providing entirely new hardware driver APIs on one hand while also maintaining a boatload of crufty legacy APIs on the other. It is absolutely the worst of both worlds. 

[Five Windows Flaws]
[Leopard vs Vista 5: Development Challenges]
Sixth, as is the case with software APIs, closed hardware platforms offer a vendor open flexibility for future expansion, portability, and upgrades. 

With the Xbox, Microsoft didn’t provide a wide open set of APIs for developers, only a subset for building very similar types of games. This closed API allowed Microsoft to move the console from Intel to PowerPC hardware in the Xbox 360 without extreme problems, something the company was unable to maintain earlier when it tried to deliver Windows NT for various hardware platforms in the late 90s. 

Apple has already benefitted from the flexibility of a closed hardware platform on the iPod. Had Apple allowed developers to write applications for the iPod, it would have to string along support for those old applications across every new generation of the iPod. Having to do that would complicate Apple’s own efforts to deliver new iPods. 

Additionally, customers would be upset with Apple’s iPod if the apps they downloaded crashed, installed spyware, or caused performance problems. While a rogue Mac app isn’t likely to drain a laptop battery down dead, power management is far more critical on handheld mobile devices like the 11 mm thick iPhone. 

Given that many consumers are already flummoxed by the reality that batteries wear out after a few years, imagine their rage at finding out that Apple allowed them to install a some worthless Tamagotchi pet that destroyed their battery early. 

Similar problems plague Palm OS and Windows Mobile devices. In particular, Microsoft’s attempts to provide a “one size fits all�? solution and broadly license it to hardware developers results in API constraints that limit supported screen size resolutions, break compatibility with existing versions of applications, and severely limit the power management performance of those devices and their ability to deliver acceptable battery life. 

If there were any meaningful installed base of Windows Mobile phones, it would also be plagued with spyware and viruses, just as Windows is on the desktop. 

[Inside the iPhone: UI, Stability, and Software]
[Device Problems In Search of a Solution]
[David Sessions Tries to Milk iPhone Battery Panic in Slate]A Safe API Boundary for Third Party Development.The simple solution to all these issues is to not offer a custom, wide open API at all, and instead leave third party developers to build applications that make use of open web standards. Nothing new to learn, no barriers to adoption, no proprietary development tools to maintain, no pleading with developers to support a new platform that remains unproven in the marketplace, and no third party crisis to manage when the hardware and software are significantly upgraded.No API, no problem! Hackers can discover how to install tools and handy mini-apps, but Apple’s next software update or hardware revision won't have to figure out how to maintain compatibility with those hacks. That allows the hackers to hack without holding things back. Meanwhile, Apple can reserve the right to offer highly integrated applications of its own that take full advantage of the underlying system without revealing or sharing its intellectual property secrets with third parties that may choose to use those secrets against it--just as Microsoft did to Apple with Windows in the late 80s, or as Sony did to Nintendo with the original PlayStation just a few years afterward.[Mobile Disruption: Apple's iPhone and Third Party Software]Closed Development Involving Third Parties is Not Open.Incidentally, this is the same closed model that resulted in great success for Microsoft and Sony after they betrayed and then supplanted their former partners. Microsoft set up the illusion of an open, developer-friendly platform with Windows, but then used its home field advantage to plot out the assassinations of any and all of the potential rivals it didn’t want to compete against: WordPerfect, Lotus, Ashton-Tate, Borland, Netscape, Sun, and today’s targets such as Google and Symantec.The unsurprising result was that Windows users ended up using Microsoft’s Word, Excel, Access, Fox Pro, language tools, web browser, media software, desktop search, anti-virus, spyware management, etc ad nauseam. With Windows users completely enslaved to Microsoft’s own applications, it was easy to erect significant barriers to prevent the emergence of any new competitive applications from rivals. Clearly, Windows is only an “open platform�? in areas where it suits Microsoft. Further, Microsoft’s idea of who a “competitor�? is can change. For example, Windows desktop search wasn’t a rival feature for Microsoft to kill until it decided it wanted Google’s business.[Office Wars 3 - How Microsoft Got Its Office Monopoly]Windows Enthusiasts’ Slavery to a Vicious Master. Whether Microsoft’s closed Windows platform is a bad thing is a matter of debate; Windows Enthusiasts celebrate their enslavement. It is my opinion that Microsoft’s closed Windows platform isn’t bad simply because it is closed, but rather because Microsoft’s insatiable greed is holding back innovation that would otherwise flourish. One example is Microsoft’s Internet Explorer browser, which rapidly advanced until Microsoft destroyed Netscape. After that, it went into maintenance mode hibernation and didn’t budge until Firefox began to threaten Microsoft’s position years later. That’s anti-consumer; Microsoft won’t do anything for its enslaved users until a would-be savior threatens to set them free. Microsoft isn’t bad because it is closed; it is bad because it is disgustingly greedy. Windows Enthusiasts need to stop deluding themselves into thinking that they live in a free world of an open platform. They are slaves, and their master is not only vicious, but also incompetent and has no taste. [Safari on Windows? Apple and the Origins of the Web][Apple in the Web Browser Wars: Netscape vs Internet Explorer][The Web Browser Renaissance: Firefox and Safari]Closed Without Pretense.At the same time, it is possible to voluntarily join a closed platform and benefit from its advantages. Nintendo carved out a closed video gaming empire that required third party developers to pay it licensing fees in order to develop any games to sell for its system. Nintendo’s closed business model worked better than Atari’s with the 2600, which had earlier allowed third party games developers to glut the market with bad games, resulting in the video game crash of 1983. Consumers were left thinking that home video games were done to death and would never recover.Sega, Sony, and Microsoft’s Xbox group have all similarly managed closed gaming platforms to deliver high quality expectations, even subsidizing game consoles to establish user interest. The only differences for Apple’s closed iPhone may be that:Apple’s iPhone hardware sells at a sustainable profit without a desperate subsidy, removing risk and allowing for regular feature upgrades. 
Apple is likely to use software downloads as a way to integrate the iPhone into Mac hardware sales and its online services, rather than simply trying to make a killing selling $50 to $75 game software titles as the console makers do.[Mac OS X vs Linux: Third Party Software and Security]Software as a Great Differentiator.By offering free or low cost software in the model of $5 iPod games, Apple will be able to use its closed platform to deliver software designed to:attract more iPhone and iPod Touch hardware buyers.earn iPhone mobile service revenue fees.earn commissions from WiFi iTunes sales and related deals. direct new iPhone users to iTunes and Apple TV.draw attention to the Mac, which will offer iPhone integrated features Windows does not. Microsoft does some of the same things with Windows Mobile, which ties into the company’s Windows Server products--including Exchange Server--and is also deeply integrated with the desktop sync services of Windows and its Office applications. The problem for Microsoft is that it does not sell phones or make money on service revenues as Apple does. Microsoft charges expensive client access and software licensing fees, but still can’t make a sustainable profit on its Windows Mobile business. It’s also stuck with lame vendors such as HTC, which make poorly integrated hardware that is embarrassing to use. Microsoft could make its own phone, but like the Zune it would alienate its existing hardware partners; further, the Zune disaster indicated that hardware sales isn’t a core competency of the company anyway. [Phone Wars: iPhone vs TyTN, Treo, Pearl, E62, P990, Q][iPhone Sales vs Zune, Palm, RIM, Symbian, Windows Mobile]Selling Hardware with Software vs Selling Software Licenses.Using software to sell hardware fits in with Apple’s past and present use of free or low cost software to differentiate the Mac. In the distant past, that included HyperCard and QuickTime; today it includes the shareware-priced but highly regarded iLife and iWork apps. The full version of Mac OS X costs $129, while Microsoft’s Ultimate Windows Vista is an absurd $400, the same price as an iPhone!Apple’s strategy of using low cost, high quality software to differentiate its hardware plays well against the fact that consumers simply don’t want to pay for software, while they think nothing of paying big money for desirable hardware. Nobody would pay much for an iPod “OS�? or a software music player, but millions of people have paid hundreds of dollars for an iPod.That principle has worked in Microsoft’s favor in the past, as it hides the cost of Windows by invisibly bundling it into PC sales. However, its recent fantasy that consumers will widely upgrade their PCs to more expensive versions of Vista indicates Microsoft is highly delusional. Pro-Microsoft wags can chart out their predictions of “impressive Vista adoption�? based entirely upon OEM bundled copies, but consumers don’t want it, and no significant number of people are going to pay big money to upgrade to the $400 Vista Ultimatum. [Windows 95 and Vista: Why 2007 Won't Be Like 1995]The Commodity Future of PC Software.What will happen instead is an increasing commoditization of the consumer PC and its software, driven towards standards by an industry that demands interoperability. Microsoft couldn’t hold back the web with its proprietary MSN a decade ago, and companies that once pushed Windows are now behind Linux, including Novell and IBM. PC OEMs are also rethinking their unilateral relationship with Microsoft as they struggle to survive in the shadow of Microsoft’s vast profits. Rather than paying $400 for a PC with a $50 OEM copy of Windows running IE and Outlook, nagging you to verify your software as Genuine and to upgrade to the $400 version of Vista and to hand your credit card number to the dancing paperclip recommending a subscription to Windows Live OneCare terrorism protection, the $250 PC of the near future will come with a standards based web browser and email client. It will be called an iPhone, and it won’t run Microsoft Office.What do you think? I really like to hear from readers. Comment in the Forum or email me with your ideas. Like reading RoughlyDrafted? Share articles with your friends, link from your blog, and subscribe to my podcast! Submit to Reddit or Slashdot, or consider making a small donation supporting this site. Thanks!

• RoughlyDrafted Magazine... on September 11, 2007
• More Details
• Related News

The live music talk

As promised, I've put together a PDF transcript of the talk I did about the music industry. (click to get the PDF). I know it's not a video, but I'm afraid this is the best I can offer right now. I find that if you read it out loud and wave your arms a lot, you get the entire effect. Have fun. [Cory asked for it in plain text. Here you go]: On the future of the music business ...I keep writing books, and writing books about this industry and the industry has never invited me over, so thank you. So, I’m going to start by pointing out that for the period I’m talking about, which is my entire youth, not ill-spent enough, but my entire youth, the record business was perfect. It was a perfect industry. And I want to tell you why. Each one of these factors is important. Number one: An entire medium and entire section of the spectrum devoted to promoting the stuff you make...thats great right...for free! An entire thing built around helping you sell more stuff. Number two: An oligopoly. For those who didn’t grab an MBA [an oligopoly] is where there is a small number of people competing against each other. If you are a band hoping to break out in 1974, 1984, 1993, you didn’t have a lot of choices, and since you didn’t have a lot of choices guess who had a lot of power, a few companies.� And, those companies could demand certain things that they needed from the world. The third thing that made it perfect is it was a key part of out lives. Look up senior prom on the internet and all you’ll see are stupid pictures, ugly dresses, and people remembering the songs they were listening to. It was the soundtrack for generation after generation. The people in the shoe business don’t have this advantage. The people at almost every business aren’t featured on the prom pages, you guys are. The next thing, entire chains of retailers devoted to selling your product. In malls they’re paying the rent, not you, Sure they’re extracting shelf space allowances from you, but isn’t that really cool? Whole stores you don’t even have to own, devoted to promoting what you sell. Next thing, you have God on your side. (slide of “Clapton is god�?) Where was the last time you saw a piece of graffiti that said Starbucks is God. This is really good times. The next thing, one of my favorites, this piece of technology is so cool, it is really cheap to make. You can sell it for a fair amount of money. You can’t copy it, you wear it out and then you need another one. Its pretty, other people can see you own it, and they want one too. And once I don’t have it anymore and give it to you, I don’t have it anymore. This was a really cool thing, bad idea to get rid of this. (audience clapping) Alright, I’m on a roll here. The next thing, a magazine, not one magazine, several magazine devoted to promoting the product you sell. Again, no magazines about coffee, plenty of magazines about music. And, a whole cable TV channel about it. Lets see if I understand this. Everyone else has to buy TV commercials, you guys get your own channel...and you’re allowed to put scantily clad women on it. (laughter) This is amazing. I’m almost done-almost done with all the good news. It used to cost a wicked lot of money to make a record. (laughter) Thats good for you because that means the artists need you. Because you’re the ones who pay all the money it costs to make a record. And the last amazing piece of news is this guy. The voice of Scooby Doo (slide of Casey Kasem). Because, if you made it to the top 40, you made it! There is really something special about best seller lists. Something magic happens when you make the best seller list. What happens is people buy your stuff because other people are buying it. Think about that. You’re popular because you’re popular. And it’s an ever going cycle. And that is underlying a lot of what is going on. So! We can look at this and say, “this was good�?, and I’ll grant you, it was good. But that doesn’t mean it’s going to last forever. Just because all of those things lined up to make this the greatest business in history, thats legal, doesn’t mean that you should assume it’s all gonna stay. So, rather than me going through each one of those and bumming you out I’m just going to pick a couple of them and remind you of how the dynamic changed. Obviously, it’s really hard to make money doing that. Also, remember those guys who bought Beach Boys records? This is what they look like now. (slide of aging couple) (laughter) Now this is really important to understand because when the typical person is a teenager, they’re spending a lot of time looking for more. “What’s the new thing, what’s the next thing, what’s the new thing?�? But these guys don’t want that. They want to remember THEN, they don’t go looking for the new thing. And, it’s not your fault they were baby boomers, it’s not your fault the baby boomers are getting old. It’s just true. The next thing we talked about, this technology wasn’t as good as we hoped when we started. And it’s had a lot of side effects, the biggest one of course being it’s digital. And once you make it digital, all of a sudden the math changes. Because, it used to be if I gave you my record, I didn’t have my record anymore. And now, it’s if I give you my record, I still have my record. And that’s different. I’m not saying it’s better, I’m not saying it’s worse. I’m not saying it’s moral, or immoral, I’m just saying it’s different and we got to accept that. And, one of the side effects of that is that something has fundamentally shifted here. Now, I’m going to give you a little bit of a preview which is, I think the internet is the new radio. And I think we’re needing, in the record business, people in the record business are going to have to think about the fact that, that might be a really good thing, not a really bad thing. And, we’ll come back to that in a minute. The next idea is this idea that American Top 40, Casey, I don’t even know if he is still alive but its doesn’t matter so much anymore. And the reason it doesn’t matter is because of something called the long tail. I don’t know if you’ve read this book, you should go out and read it right now, you can read it in 45 minutes. And what Chris Anderson [author of The Long Tail] pointed out is this, if I look at Netflix, what I see is that Netflix rentals, half of them are products Blockbuster doesn’t even carry. If I look at Amazon sales, half of Amazon sales are products that are unavailable in any Barnes & Noble store. If I look at the iTunes music store, half of iTunes sales are titles that you could not buy if you went into any record store. What happens when you give people an infinite number of choices in any genre, polka, doesn’t matter, they spread out. And two things occur. One, they go down the tail and start finding what’s just right for them, and two, sales go up. And so what this means is that the very structure of “how do we force as much attention as we can to the top 40�? is actually the opposite of what leads to more consumption. And then the last one, you’ve seen it before, is this idea of suing the very people you’re trying to talk to is unfortunate. So, what’s next? And where do we go from here? I want to start by saying this really clearly. Music is not in trouble. I believe more people are listening to more music now than any time in the history of the world. Probably five times more than twenty years ago...that much! But, the music business is in trouble. And the reason the music business is in trouble is because remember all those pieces of good news?...every single one of them is not true anymore. Every. One. Now, if you want to, you can curse the fact the Solomon’s couldn’t figure out how to keep the tower going. You can curse the fact that it’s really easy to copy a CD. You can curse the fact that we don’t care about the American top 40. You can curse the fact that there isn’t top 40 radio that matters. What good is that going to do? Or, we could think about the fact that you have more momentum and more assets and more talented people than any body else. [And], at the very same time that people are listening to more music than ever before. Thats really cool. And, so when we think about transitions what we know is that timid trapeze artists are dead trapeze artists. And, that the only way you get from here to there is to just do it. Now, you might be wrong but the alternative is you WILL be wrong. There is no way to go from the perfect music business to the new music business with guaranteed ROI and written assurances-it doesn’t exist. So what will happen, I will guarantee this to you, is that 90% of the people in this industry will timidly start walking their way over and they will all fail. Thats why when you go to look up something online, you don’t go to RandomHouse.com, you go to Google.com. Thats why when you go to buy something on auction online you don’t do to Sothebys.com, you go to Ebay.com. Go down the list, what happened was AOL lost their nerve and didn’t start AOL Book where you could meet friends. They forgot. They were too busy trying to get people to buy a CD and start joining a membership internet service because they weren’t willing to do this. So it’s a little quixotic on my part but I’ve devoted my career to try and get people to do this. So, I think there is a new business here that might even be more perfect than the last one. It’s not the same business, the waves are shaped differently, and you need different skills but someone is going to win big in this business. So, what I want to do, and I’m excited-I’m talking too fast, we don’t have a lot of time here and thats fine with me, is tell you some of the tactics that I would use if I were in your shoes. But I don’t think I’m necessarily right. And if Berry Gordy had called me on the phone in 1964, I would have given him bad advice too. But, I hope what you’ll see in this is the thinking process about some of the realities of what really “is�? in the world because you guys are much better than I am at turning those realities into an actual business. So let me try. The first one is that people don’t listen to companies, they listen to people. And what is unique, almost entirely, compared to the movie business, the book business, whatever, is that you sell people. And, there is something magical about the connection between one person and another person. There is something magical about the way we treat celebrities.� And so part of the thing that is out there is that there is a large number of people who want to be led. There is a large number of people who want to connect. There is a large number of people who want to join a tribe. And you have the ability, from where you stand, to make some of those connections happen. What’s really neat is...my friend gets all excited because he needs to score some Bruce Springsteen tickets. Isn’t that interesting, right, because he’s using Greg to get to this tribe of people. That’s really valuable. He doesn’t need to have somebody get a copy of an album, he can just get that, you know, from Amazon for ten bucks, or for free. But the tickets, the connection, the insider, the handshake to one handshake-thats worth a lot! And so far you guys have been treating it like an interesting side effect. But it might be something right at the core of what you do every day. The next one is my biggest one, and what started me down this whole path which is, if I asked you for the name and address of your 50,000 best customers, could you give it to me? Do you have any clue? Then what happens every day is you guys go to a singles bar and you walk up to the first person you meet and propose marriage and if that person won’t marry you, you walk down the singles bar to every single person until someone says I do. Thats a stupid way to get married. A better way to get married is to go on a date. If it goes well, go on another date. Wait to tell them on the third before you tell them you’re out on parole. (laughter) Then you meet their parents, they me your parents, you get engage, you get married. Permission is the act of delivery. Anticipated, personal, and relevant messages to people who want to get them. I have every record Ricky Lee Jones has ever made including the boot legs that she sells. Rick Lee Jones should know who I am! (laughter) I have bought many of them (pause) well her agents, her people [should know who I am]. I’ve bought many of them directly from her site. I desperately want Ricky Lee to drop me a note telling me when she is going to be in town. I want her to ask me, “should I do a duets album with Willie Nelson, or should I do one with Bruce Springsteen?�?. I want to have these interactions. And I want her to say, “I’m making another bootleg, but not until I get 10,000 people to buy it as patrons before I make it�?. Because I’d sign up. I’d buy five if it would help, but she doesn’t know who I am. She doesn’t know who I am, she never talks to me. And then every once in a while her record label tries to yell at me, but I’m not listening because they’re yelling at me in a place where I’m not paying attention. And so we look at these phrases, “paying attention�?. That’s what you’ve wanted people to do all along. “Pay attention to this artist�?. Paying is a weird word isn’t it? You want me to pay you something-my attention. And if you’re wrong, I get nothing back. I had to listen to the Backstreet Boys...AHH! I want those three minutes back. So, it’s a weird relationship. The next thing is this idea that people care very much about who is sitting next to them at the concert. They care very much about the secret handshake. They care very much about the tribal identification. “Oh you like them, I like them�?. The Grateful Dead is an amazingly successful paradigm for many of the things I’m talking about. They didn’t make any money selling records compared to the way they made money doing everything else. Part of it was, you knew if you met someone at a dead concert, they had some things in common with you. The secret handshake, the clothes, whatever it was. And that was important and you were willing to pay money to be with those people. And after Jerry died it was very interesting. Because obviously there was thousands of hours to listen to but that’s not what the people missed. The people missed the place they could go to meet the people like them. At Facebook, it’s all about that. 64 million people who go there every day so they can meet people like them because [Facebook] is very good at dividing people up. The next thing is what I call the Seinfeld curve. The Seinfeld curve shows us Jerry’s life. If you like Jerry Seinfeld you can watch him on television, for free, in any city in the world two or three times a day. Or, you could pay $200 to go see him in Vegas. But there is no $4 option for Jerry Seinfeld. This is death. You can’t make any money in here. Because if you’re not scarce I’m not going to pay for it because I can get if for free. And one of the realities that the music industry is going to have to accept is this curve now exists for you. That for everybody under eighteen years old, it’s either free or it’s something I really want and I’m willing to pay for it. There is nothing in the center-it’s going away really fast. The next one is back to this long tail model. The magazine business imploded a long time ago. Saturday Evening Post, Time Magazine, they’re all irrelevant. But you can make a fortune with Playstation magazines, PC gaming [magazines], Game Informer, because there are silos of people who care a great deal. And if you know who those people are, if you have permission to talk to them, ready for this, if you stop looking for listeners for your music, and start looking for music for your listeners instead, the economics of your business totally changes. Magazines make 10x return on equity of books, you know why? Because magazines have subscribers and books don’t. So every time a book comes out they gotta run around looking for someone to buy it. Where as the magazine people just look for the next author to write the next article in the next magazine. The next idea is this idea of liking. There is a lot of music I like. There is not so much music I love. They didn’t call the show, “I Like Lucy�?, they called it “I Love Lucy�?. And the reason is you only talk about stuff you love, you only spread stuff you love. You find a band you really love, you’re forcing the CD on other people, “you gotta hear this!�?. We gotta stop making music people like. There is an infinite amount of music people like. No one will ever go out of the way to hear, to pay for, music they like. And the last one is back to this tribal thing. It’s really important to people to feel like they are part of that tribe, to feel that adrenaline. We are willing to pay money, we’re willing to go through huge hoops, trampled to death in Cincinnati if necessary, in order to be in the environment where we feel that’s going on. So if I put all this together I’m going to come up with what I call the Merchant Solution. It has nothing to do with stores, it has to do with Natalie Merchant. (laughter) So, Natalie Merchant shows up in the New York Times last week saying not only do I not have a record label, I’m not going to make records anymore because I just figure out how to do it. And that is the biggest opportunity times 10,000 because Natalie doesn’t want to be in business, Natalie wants to make records. Thirty years ago Natalie couldn’t put together the scratch to record an album because she couldn’t afford a recording studio. Thats what you guys did for her. She couldn’t come up with the time and energy to go out to California to sell and pay for shelf space at Tower, thats what you guys did for her. The point is, now she needs somebody to say “let us take care of your tribe�?. Let us figure out the business model that says you get to do what you’re great at, write songs, perform them, find people who love you, not like you, and they are A LOT in the case of Natalie Merchant, and we will figure out not how to exploit that, not how to write a contract that you’re going to regret for the rest of your life, but to sit next to you and say guess what, there are all these people in the tribe [and] we need to figure out how to make stuff for them. And, because we have three other artists that are just like you, Cowboy Junkies, we can start mixing tribes together in appropriate ways that makes everybody happy. Because you [record label] could go to the Cowboy Junkies tribe and say Natalie Merchant is coming to town and they’ll all go. Because they love her and they love each other and they want to see each other again because they can’t wait a whole year till the [Cowboy] Junkies come back. So if the model that we loved about the record business in 1968 was A&R, taking care of artists, finding artists who people will love, and the model that we hated was brand management, I want to argue that the next model is tribal management. That the next model is to say, what you do for a living is manage a tribe...many tribes...silos of tribes. That your job is to make the people in that tribe delighted to know each other and trust you to go find music for them. And, in exchange, it could be way out on the long tail, no one wants to be on the long tail by themselves, the polka lovers like the polka lovers, they want to be together. But that you, maybe it is only one person, technology makes this really easy, your job is to curate for that tribe, like the curators upstairs [at the museum]. There is a museum of modern art tribe, you can see them here every Thursday. And if you can curate for them guess what the [musical] artists need...you! Guess what the tribe needs...you! You add an enormous amount of value by becoming a new kind of middleman. So let me go through, real quick, a bunch of tactics and we can come back to these after I’m done if you want. So, old world, new world. Old world: it mattered who you knew. You know Jan Wenner...thats a good thing. Now it doesn’t matter because there’s an infinite number of outlets-you can have your own channel. Number two: limited number of physical outlets, now there’s an infinite number of online outlets. An infinite number of places where I can find music. Number three: an emphasis on hits because you didn’t have a lot of channels, you had to own the ones you had. Now, it’s about niches. I write the number one marketing blog in the world. Who cares. Well not many people here care, but lucky for me that niche has a bunch of people in it who care. And so I enjoy my day writing that blog, I could never write a blog that appealed to everybody. I couldn’t write a Boing Boing blog or a blog about popular culture, but because I get to be the king of this little silo I get benefits out of it. Number [four]: you yelled at the consumer. You talked directly to the user. Now it’s about two things. One, consumers talking to each other and two, consumers talking to you. How easy is it for a fan to talk to you? Almost impossible because you’re not organized for that and because you didn’t see that there was a benefit. But if you’re in tribal management thats the number one best thing that could happen to you all day is that you get an email or a phone call. Alright? Back to the barrier between the consumer and the permeability. The next one: your whole life was about interrupting people with messages they didn’t want to get. Fortunately radio made that socially acceptable. Unfortunately the government made it against the law for you to pay for that to occur but you still managed to pull it off. I could get in the car, turn on the radio and hear a song I wasn’t expecting and maybe I would like it. If I didn’t like it, it didn’t cost you anything anyway. Now it’s about permission. Now I get on the radio and in my car I have either my mp3s in there or I have satellite in there, I don’t hear anything i don’t want to hear. So, the model has totally changed. Next one: you used to have a factory. The factory is the recording studio, you know, the ability to get the number of things on the shelf space at Tower. You built everything around that factory. There’s no factory anymore! If you guys put up one ad on Craigslist you’d have records here tomorrow, done, finished, by email. Because everyone has the ability to make a record now. It used to take a long time. Someone would go to the studio, Boston, and we’d hear from them three or four years later. Now you can put a State of the Union speech out as a hip-hop record one day after he gives his speech and you could sell a bunch on iTunes. It used to be “how big a share of the market can we have?�? Now it’s about “how do we touch a tribe, just for a minute?�? As long as the tribe is happy, we’re happy. It used to be about what features, checklist stuff, now it’s “is there a story behind this artist, is there a story behind the person?�?. Advertising, promotion, shelf space, that used to be what you paid cash money for. Now you’re going to have to figure out how to innovate in the way you interact with people. And I think this is my last one: stability used to be “we’re big, you can trust us.�?. Now small overhead, we own the polka silo, we only need one person to take care of it, gives you the ability to have low risk when taking care of the long tail. Customer support isn’t as important as consumer support. How do you get people to help each other? So, if I had to show you one slide again, it would be this one. It would be, “I really want to hear from you�?.� Ricky Lee. Please! write to me, I want to be part of the tribe, I want you to talk. It’s not about, anymore, how many people can you reach. Super Bowl, doesn’t matter. it’s irrelevant. The internet is the new radio. What that means is this you’ve been arguing and hassling and yelling and pushing for 40 years to get more air time. Now you have infinite air time. That’s what the internet is for you. The internet is the ability to get any song you want in front of the people who want to hear it with huge reach and no barriers. What matters isn’t how many, it’s who. Who are you reaching, who are the thought leaders, who are the people who are going to tell other people? Who are the people who are out there trying to find the next big thing because those people are going to influence what the next trend is, and if you’re in the middle of that trend, because you’ve used this new medium to spread the ideas, you’re going to start paying for internet airtime soon because it’s worth it. It’s not that you need to say “no, no, no, I can’t let you hear this�? it’s “I want you to hear this�?. Because if you hear it you might join the tribe, and if you join the tribe then over time I’ll take care of you so well you’ll want to pay me. And then people will be passionate when they hear what you do for a living, they’re going to die to have you help them meet other people in the tribe.

• Seth's Blog on March 2, 2008
• More Details
• Related News

Scott Woolley Attacks Apple TV in Forbes, Gets the Facts Wrong

Daniel Eran DilgerScott Woolley of Forbes tried his best to paint Apple TV as a colossal failure, but his article is based on supposition and false comparisons, and demonstrates he doesn't know much about the video distribution industry he writes about. Woolley described Apple TV as a flop, comparing his own unit sales estimate against the record breaking sales launch of the iPhone. Of course, lots of successful products might look like a flop compared to what appears to be the most successful consumer electronics product launch in history. Apple TV Sales.Woolley estimated sales of 250,000 Apple TVs, but he really doesn't know how many have sold, because Apple doesn't isolate sales numbers and it counts revenues of the Apple TV over a subscription basis like the iPhone. Apple rarely isolate product sales for any individual items, a competitive game played by most manufacturers. Instead, the company has typically reported revenue buckets for computers and iPods, and only occasionally breaks down sales for specific models or classes of models, such as laptops and desktops. It's therefore no surprise that Apple isn't publishing Apple TV figures. Woolley is doing his readers a disservice to speculate that "apparently the truth is too humiliating." Either he doesn't understand basic marketing, or he knows he's presenting a false angle to whip up a frenzy of ignorant sensationalism. As evidence of the Apple TV's "lack of sizzle," he only cites the fact that some Circuit City employee had "trouble locating the product's small kiosk," and that at a nearby Apple Store, the Apple TV had been "shoved aside" to make room for more iPods. Hobbies and Jobs.Jobs has described the Apple TV as a 'hobby' several times, once in talking to employees about his vision for Apple's future business. He described the Mac and iPod as two legs of a chair, and hoped the iPhone would act as a third leg. The Apple TV, he noted, might work out as a fourth leg in the future, but until then it was being run as a hobby and the focus was on establishing the iPhone.A hobby is something you do primarily for fun or experience, not as a profitable exercise, although hobbies can turn into big business. Thirty years ago, Steve Wozniak's hobby was wiring together electronics. Steve Jobs' hobby seems to be taking ideas and turning them into profitable businesses, as he did with Woz's computer design (Apple is now worth $120 billion), NeXT (sold to Apple in 1996 for over a half billion), and Pixar (sold to Disney for $7.4 billion in 2006). So when Jobs says he has a hobby, he's not talking about painstakingly putting ships into bottles. Lots of people dismissed the iPod in 2001; that product did take a few years to get established, but has since attained explosive growth. Many pundits also announced that Apple would become the iPod company and let go of its Mac sales, but Apple has also dramatically increased Mac sales over the last two years, in large measure due to the move to Intel processors[Inside Apple TV]Success Is Failure, Up is Down.Woolley says Apple execs ignored the product in its last quarterly earnings reports. Apple did spend its time talking about the iPhone, record Mac sales, and improved gross profit margins. Apart from the highlights of what it wants to talk about, what Apple executives say in earnings reports conference calls is largely based on what analysts on the call ask them.In the previous quarter, Tim Cook answered a question about Apple TV sales by saying, "we just started shipping on the third week in March. We're off to a very good start and we're going to continue investing in this area. We're very, very excited about the long-term potential of the product," but added, "we're not releasing the exact unit shipments."Apple never bragged that it would sell millions of Apple TV units per quarter, as it did with the iPhone. The company isn't making big money on the Apple TV. Its price--compared to the components inside it--indicates Apple knew the box wouldn't be a high demand seller, or it would logically set a higher price target. There's little money to be made in selling and supporting a $300 box full of nearly $250 in hardware. Instead, Apple offers the unit as an alternative way for consumers to make use of the developing video market in iTunes. [RSS: How Apple Will Change TV in 2007]Sustainable Platform Development.This slow growth strategy requires the playback pieces to be in place while the content lines up. Assembling both ends of a platform and distribution chain is the classic catch-22: which comes first, the eggs or the frying pan? Do you crack open eggs and let them sit out while you set out to obtain a frying pan, or put the pan on the flames and then go to the store to find eggs? Ideally, you have them both lined up before things get cooking.Apple had already added TV content to iTunes, and was selling respectable numbers of shows to users with 3" iPod screens or hunched over their PC. When it added movies, it couldn't really market the idea of rapid growth in iTunes without a TV-centric playback system. Apple is still working to add movie content to iTunes, but now it has a marketable way to sell them. [Brent Schlender's Apple TV: Fortune Dud or Fortune FUD?]Measuring Success By Accomplishment. Apple doesn't have to make fantastic money on the Apple TV for it to be a success, just as Sony and Microsoft can afford to actually lose money--billions in the case of Microsoft--if only sales of their game consoles take off at some point and establish a critical mass of a platform. That being the case, why would Forbes tear into Apple TV for not outselling the iPhone? The simple answer is that finding problems with Apple's ongoing strategy is so difficult that only a cheap shot that skirts reality can even hope to make the company look bad.Apple TV exists as a product to legitimize the company's movie strategy. Expanding sales of movies and TV content will help sell the iPod and retain a commercial availability of legal content for Mac users. Really, the main point of the iTunes Store is to save Apple from being ostracized by Microsoft in a dystopian world where all media is tied to Windows. Apple didn't have to destroy the market for Windows Media to establish iTunes as a success; that was just a nice bonus. After just short of a year of existence, iTunes certainly isn't the best movie selection on the web. However, while its easier to find more movies elsewhere, those sources don't offer the benefits of Apple's tightly integrated and well conceived ecosystem. [Universal vs Apple in the iTunes Store Contracts]Apple TV vs Netflix.One of the best options today is Netflix; it has nearly everything, but it involves waiting for days to get the DVD you request. If you get an unplayable DVD, you have no recourse but to wait out a few more days to get a replacement. Netflix has recently moved to offering subscribers instant playback over the web for a good variety of titles, but the service is Windows only and offers very low quality. It's a great way to watch a documentary or slapstick comedy, but it's not a cinematic experience, it's a YouTube experience. That leaves Netflix a very good option for people who like to watch lots of movies. For less than $20 per month, you can cycle through several movies a week and always have at least a couple DVDs available to watch. You pay a monthly fee whether you use the plan a lot or not, so if you go without updating your queue or are busy with other things, you pay for content you're not watching, just as with a cable subscription.The downsides to Netflix--and DVD rental in general--is that DVDs can't easily be accessed on demand, or kept in a digital library that's available to any TVs in the house or any iPods for portable playback. [Apple TV: Using DVDs and other Video Sources]Pulling the Woolley.Forbes' Woolley didn't mention Netflix. Instead, he boasted up TiVo, the Xbox 360, Slingbox, a yet to be delivered product from Poloroid, and Vudo, a small startup that sells downloadable movies for $20 each. All are apparently in far better shape than the Apple TV hobby, which is a great flop of a failure, according to Woolley. Except that he withheld the truth:the staggering, multibillion dollar losses of Microsoft’s Xbox every year over the last half decade.the regular, multimillion dollar losses at Tivo over the last several years--it lost $52 million last year, and another $19 million in the most recent quarter ending in July.Polaroid Corporation went bankrupt half a decade ago. Its name is being licensed by a holding group.
Vudo is an interesting box offered by a group of WebTV and TiVo refugees. It's a $400 box with very similar features to the Apple TV. It also features rentals and has hardware support for 1080p and Dolby Digital surround. It demands a 3 Mbit Internet connection. 
Slingbox is a streaming device that transmits a video signal over a network. It has nothing to do with Apple TV.So Wolley paraded out some real failures, some vaporware, a promising potential rival, and something completely unrelated. That's proof of the Apple TV's great failure? In contrast, it looks like Apple is among the few companies with a viable plan for video distribution, and stands among the minority who can actually earn any profit at all.[Ten Myths of the Apple TV: 5.1 Audio][Ten Myths of the Apple TV: Xbox and Hardware][Apple TV: Turn DVI into HDTV; HP Drops Microsoft]Wholly Weaselly Woolley.Not content with simply blowing out some ignorant misinformation, Woolley then went on to castigate Jobs for choosing to "shut out millions of Web downloads on YouTube" with the release of Apple TV in a "parochial and proprietary approach" that forced users to get all their content from the iTunes Store. Except that isn't the truth at all. Is every feature Apple adds to is products now going be described as a "freedom previously withheld by Jobs' arrogant tyranny" in retrospect? What a weaselly, desperate spin! Woolley also stated that "NBC Universal scrapped its deal to sell movies and shows via iTunes, making Apple TV even less appealing." While admitting that Apple backed out of negotiations with NBC Universal after the studio made absurd demands, Woolley called Apple "sulky and pious" for doing so. Sounds like Woolley couldn't find a story and had to make one up with the help of a thesaurus. One should expect more from Forbes. For his sloppy efforts in crafting a sensationalist headline, Scott Woolley gets a Zoon.What do you think? I really like to hear from readers. Comment in the Forum or email me with your ideas. Like reading RoughlyDrafted? Share articles with your friends, link from your blog, and subscribe to my podcast! Submit to Reddit or Slashdot, or consider making a small donation supporting this site. Thanks!

• RoughlyDrafted Magazine on September 16, 2007
• More Details
• Related News

Will Google's Android Play DOS to Apple's iPhone?

Daniel Eran Dilger Today's broad array of smartphone operating system contenders are offering lots of potential answers to a problem that only requires one. It appears the market has two options ahead: either pool generic hardware makers behind a single operating system and deliver a smartphone marketplace that resembles the Windows PC market, or watch them fall to a dominant leader and have a smartphone market that resembles Apple's iPod ecosystem. This decision isn't going to be made by a class of intellectual elite, or by government mandate. it's going to be made by the market itself. Here are the factors that will influence the outcome, either marginalizing Apple's iPhone into a niche as the company has twice experienced previously at the hands of DOS in 1981 and Windows in 1991, or positioning it as the dominant leader as Apple has achieved for itself with the iPod since 2001. The third segment in this series looks at Google's Android and the Open Handset Alliance as a possible “DOS-attack” against Apple's iPhone. Subsequent segments will look at Nokia's newly opened Symbian and other mobile contenders challenging the iPhone. Will the iPhone Meet its Match from a Modern Day DOS? Will Windows Mobile Play DOS to Apple’s iPhone? Will Google's Android Play DOS to Apple's iPhone? Will Symbian Play DOS to Apple's iPhone? Google Acquires Android. In 2005, Google purchased a startup named Android, which had been in business for nearly two years. The secretive startup was known only to be working on software for mobile phones. It was being run by a who's who of mobile industry veterans, including Andy Rubin, the founder of Danger. Rubin had earlier worked at WebTV along with Chris White and Andy McFadden, both of whom had also joined Android. Richard Miner of Orange and Nick Sears of Tmobile also brought their mobile provider experience to Android. At the time of the acquisition, Google didn't announce any plans for Android and instead only told BusinessWeek, “We acquired Android because of the talented engineers and great technology. We're thrilled to have them here.” It appeared that Google was only going to be expanding its search services for mobile phone users, along the lines of the Google SMS answer system it had recently released. Google Buys Android for Its Mobile Arsenal - BusinessWeek Windows XP Media Center Edition vs Apple TV: The Fall of WebTV The GPhone Myth. As reports began to leak out about talks between Google and hardware makers throughout 2007, rumors began to fly about “the GPhone,” a competitive offering that was supposed to take on the iPhone. Some phone enthusiasts hoped Google would jump in to rescue the struggling OpenMoko project and turn it into a viable project that could attack Apple's new smartphone. In October 2007, I printed the Great Google GPhone Myth, taking apart the idea that Google would be directly competing against the iPhone, and describing that Google was really working on a free alternative to Windows Mobile as a conduit for getting its search and related services on a broader variety of mobiles. Google's services were already on the iPhone. In November, Google played its hand: it had organized a consortium of companies called the Open Handset Alliance to develop open standards for mobiles. The first product from the group would be Android, a mobile operating system built on the Linux kernel. Google wasn't getting into the phone handset business at all; it was only making sure that its mobile search products would not risk being marginalized by the threat of Windows Mobile on phones in the same way Microsoft had been working to leverage its PC monopoly to push Google search off the Windows desktop. The Great Google gPhone Myth Introducing Android: Leader of Linux. Two weeks later, Google released an early version of the Android software. On top of a Linux kernel, Android uses a specialized version of a Java Virtual Machine that takes Java language code and turns it into what Google calls “Dalvik bytecode” rather than Java bytecode as a standard JVM would. This allows Google to leverage existing and familiar Java language tools without paying Sun for a Java license. Like Mac OS X and its fraternal iPhone OS, Android includes a variety of open source libraries, including SQLite and WebKit. On top of that, Google developed a series of frameworks that handle the tasks Cocoa Touch does on the iPhone. Android also bundles a set of applications. While Apple adapted its existing Mac OS X to work in a mobile environment to create the iPhone OS, Android is more like a customized Java environment running on a specialized mobile Linux variant: elements of maturity in an otherwise experimental new platform. What is Android? -Google Android was by no means the first mobile OS using Linux. Both Palm and its amputated ACCESS software arm have Linux-based mobile platforms. Nokia has Maemo, which it uses in its Internet Tablets, and also recently acquired Trolltech and its Qtopia mobile Linux platform. Motorola has teamed up with MontaVista Software to use its Mobilinux. Intel created the Moblin project for mobile Linux, aimed at Internet devices. Google's OHA also isn't the first consortium to attempt to standardize a mobile Linux platform. The OSDL started the Mobile Linux Initiative to define requirements for hardware; the Consumer Electronics Linux Forum (CELF) then worked to define various phone profiles aimed at the Japanese market; the Linux Phone Standard (LiPS) Forum tried to do the same thing in Europe. In 2007, LiPS was folded into the new LiMo Foundation, along with the OSDL. All of these committees have had some overlap and some complementary features. Several of Google's OHA partners are also LiMo members, including NTT DoCoMo, Wind River, and Motorola. So why didn't Google just join LiMo? “LiMo, very candidly, wasn't moving fast enough,” OHA board member John Bruggeman told CNET. Google hopes to herd the Linux cats into a progressive, structured platform that can battle against Symbian and Windows Mobile to succeed as the new DOS of smartphones. Will Google fracture or unify mobile Linux? The Presumption of the Necessity of DOS. The previous segment examining Windows Mobile pointed out how the PC industry as a whole assumed that Microsoft's desktop Windows monopoly would easily take over dominance in the MP3 player market, pushing Apple into a niche position. This was expected because DOS had pushed Apple's early computers into a reduced role starting in 1981, and Microsoft had repeated this again in 1991 when the DOS world mi