Hints holiday hiatus...

Happy holidays!The macosxhints.com crew -- OK, so that's just me, myself, and I -- are taking today and tomorrow off to spend the holidays with family and friends. New hints will return on Wednesday, and in case you didn't stop by this weekend, here's what you missed -- the final batch of entries in the 10.5 best hints contest, including a pretty cool one that enables Data Detectors in iChat. Next week, the finalists will go online for voting, with the winner to be decided based on your votes...

Happy holidays!The macosxhints.com crew -- OK, so that's just me, myself, and I -- are taking today and tomorrow off to spend the holidays with family and friends. New hints will return on Wednesday, and in case you didn't stop by this weekend, here's what you missed -- the final batch of entries in the 10.5 best hints contest, including a pretty cool one that enables Data Detectors in iChat. Next week, the finalists will go online for voting, with the winner to be decided based on your votes and those of the Macworld editors.I hope everyone has a wonderful Christmas / holiday season, and we'll be back to hints as usual in a couple of days.-rob.

  • Happy Holidays!

    No new hints today or tomorrow as I'll be spending the holiday with family and friends. Hope you and yours have a wonderful holiday season, and we'll be back as usual on Monday morning. -rob.

  • 2007 Apple Year in Review: Security

    With the year rapidly coming to a close it's time for all those year-end retrospectives to pop up across the internets (and traditional media). 2007 was an especially busy year for Apple who introduced a plethora of revolutionary new hardware and software that has given fodder for post-upon-post to blogs old and new. When not contributing to TAB (or spying on the Caldari for the Amarr in EVE Online) my focus is on all things related to information security (i.e. my day job). With that in mind, I thought it would be interesting to do a “security year in review” as it relates to our favorite OS & hardware vendor to see where we've been and where we're headed, tossing in a bit of advice to help keep your holiday computing secure. Back To Where We StartedFrom January kicked off with The Month of Apple Bugs (“official” web site), a project whose sole intent was to show the world that even Apple has a chink in its dragon-scale armor. While daily flaws were revealed, none were earth shattering and the interest in their releases died down substantially very quickly into the project. The founders showed their lack of professional integrity when they admitted they weren't notifying vendors before releasing the exploits. If the project's integrity wasn't in question from the start, a contingent of vocal uses argued that various bugs had no security impact whatsoever, and it became painfully obvious that the project had to go fishing for issues in many cases since some of the bugs weren't even for Apple-released products. NumberCrunching According to the National Vulnerability Database, there were 79 common vulnerabilities & exploits (CVEs) for “Mac OS X” and 45 for “Mac OS X Server”. The same numbers for 2006 were 106 and 55, but these are difficult statistics to trend since the 2005 data shows 96 & 72 respectively. Overall, it does appear that the operating systems get harder to break through as Apple matures. Apple officially released 32 product and OS security updates, each fixing one or more vulnerabilities (with their latest one for Tiger [10.4] in November 2007 fixing over 40). Unfortunately, Leopard even had a few vulnerabilities as the 10.5.1 update fixed three security issues with the new firewall. New! Impoved!Insecure! Two of the product highlights of the year were the release of the iPhone and Apple's answer to Microsoft Vista - Leopard [OS X 10.5]. The iPhone had detractors from the start, and some of them went off to find a way to make it do what they wanted it to do on their schedule. These hacks have been beaten to death in the blogs and there's even a central repository for them. Unfortunately, many of them require exposing and exploiting security vulnerabilities on the device in order to “free” them from Apple's iron grip. Apple has not been as quick as some would like to patch the device, but they have addressed the security issues as they come up and have done a better job issuing fixes and features than other smartphones (and I've had smartphones from other vendors). There were reports of broken phones after updates due to using these hacks and it's my firm belief that you get what you deserve when you decide to exploit security holes in order to gain functionality. Patience will have paid off for those users who decided to wait for Apple to do the right thing and release an API letting developers go beyond pretty iPhone-tailored web pages. While the iPhone stole the show for the year, Leopard was not without relevance since it may have been the most anticipated operating system release ever (well, perhaps Vista beat it slightly due to the constantly sliding schedule). How successful this release was is a topic for another post, but it was not without many new security features, including application sandboxing, code-signing, library randomization and a new firewall configuration (there was a slew of changes under-the-hood as well). These features were heavily scrutinized, with the new firewall taking an especially hard beating and was the subject of the aforementioned end of year 10.5.1 patch. Expect TheUnexpected The Mac platform gained even further popularity in 2007, but this visibility came at price. As more users flock to OS X we can expect to see hackers migrate there as well. The engineers over at McAfee's AVERT Labs identified a rise in crimeware on OS X, showing that the bad guys see profit in targeting this new playground. This was further demonstrated in November when the Net was abuzz with the news of a trojan horse aimed at Mac users. Then again, November is a rather slow news month. Sadly, 2008 may be a dangerous year for iPhone users with many researches flagging it as a prime target. Given how little problem Apple supporters have with handing over the platform to the enemy by identifying and exploiting vulnerabilities, I'm not surprised. Keeping Safe For TheHolidays 'Tis the season to demonstrate our wanton consumption and many happy individuals will be recipients of a brand new Mac later this month. While the out-of-the-box Mac experience is still a fairly secure one there are some things you can do to ensure that it stays that way. Even though new boxes will be shipping with Leopard, the Tiger Security Configuration Guide - approved by our friends at the NSA & Apple - provides a good starting point for boosting the security profile of your dektop. If you're really the adventurous type, you can even make your Leopard firewall experience a bit more secure. The advent of real malware on the Mac means that you should also definitely consider using anti-virus/anti-malware software. Thankfully, there are many to choose from. McAfee VirusScan 8.6 was the first Leopard compatible anti-virus product, with MacScan (more spyware-focused) and Sophos Endpoint Security & Control coming in shortly thereafter. Norton seems to be lagging behind, but it's in good company with the freely available ClamXav. For all those Airport Extreme recipients, you should definitely check out Glenn Fleishman's Take Control of Your 802.11n AirPort Extreme Network to ensure you've configured your network as securely as possible. And To All A GoodNight Overall, my take is that 2007 was a good year for Apple in terms of security. The Cupertino crew smacked down bugs as quickly as they arose and managed to build products with new features that have laid the foundation for even more secure applications and operating systems in the coming years. Despite the news that Macs are in the sights of more malicious malcontents, it remains the most secure and productive computing platform available today.

  • Happy Thanksgiving!

    Macosxhints will be closed today and tomorrow for the Thanksgiving holiday (and Black Friday shopping extravaganza). For those in the US, I hope you have a safe and enjoyable holiday. The hints will return as usual on MondayIn the interim, I invite you to ponder OS X 10.6 Snow Leopard's actual "for sale" date. Apple stated last June that it was going to ship within "about a year," but exactly when will that be? Take your best guess in our latest poll. Personally, I voted for March, due mainly to it being the release month for the original OS X 10.0, but I've heard rumors of everything from January to July. What do you think? Will it Snow early next year, or will it be a summer Snow?

  • Microsoft's Mojave Attempts to Wet Vista's Desert

    Daniel Eran Dilger Nearly two years after Windows Vista was finally released, Microsoft has remained unable to shake off its reputation as being slow, incompatible with existing hardware and software, and generally a poor and overpriced product that nobody wants. Microsoft is now trying to reverse Vista's bad reputation by insisting that the software's problems are not technical but rather just the fault of ignorant customers duped in part by Apple's “Get a Mac” campaign. What's Vista's real problems, and will Microsoft's “Mojave Experiment” help solve them? Blame Apple! Microsoft CEO Steve Ballmer has joined Windows Enthusiast pundits in theorizing that Vista's image problems are primarily the result of Apple's advertisements that regularly poke fun at the problems in Vista. The company has now taken aim at shooting at the messenger with a $300 million ad campaign. In July, Brad Brooks, Microsoft's VP of Windows Vista consumer marketing, addressed the company's business partners at its Worldwide Partner Conference, saying, “We've got a pretty noisy competitor out there. You know it. I know it. It's caused some impact. We're going to start countering it. They tell us it's the iWay or the highway. We think that's a sad message.” Another sad message Brooks had to deliver was that Vista's problems aren't really the fault of Apple. “We broke a lot of things,” Brooks admitted. “We know that, and we know it caused you a lot of pain. It got customers thinking, hey, is Windows Vista a generation we want to get invested in?” Vista: Pay it Forward! Brooks also noted that “Windows Vista is an investment in the long term. When you make the investment into Windows Vista, it's going to pay it forward into the operating system we call Windows 7.” Pay it forward? Is Windows 7 going to be a free upgrade to Windows Vista users, in the same way Apple is expected to offer the next Mac OS X 10.6 Snow Leopard release to existing users of 10.5 Leopard? That's highly unlikely, as Microsoft can't sustain its egregious profits collected through the Windows monopoly by giving away updates for free. Windows Vista raised the price of Windows, putting a new definition on the phrase “pay it forward.” Myths of Snow Leopard 7: Free?! Microsoft Admits Windows Vista Mistakes, Criticizes Apple Ads - InformationWeek Reality Impairment at Microsoft Talking out one's ass appears to be a job requirement for all Microsoft executives, starting at the top. A serious case of reality impairment has resulted in the paradox of the company both admitting that Vista is flawed and “broke a lot of things,” while at the same time maintaining that Vista's reputation is entirely the fault of stupid customers and a comically unflattering portrayal by its competitor. In the “Mojave Experiment,” Microsoft plans to dispel the notion that Windows Vista is problematic and incompatible by publishing a series of videotaped interviews with users who arrived with negative impressions of Vista and left excited about the new operating system. This was achieved by presenting the users with a demonstration of “Mojave,” a new operating system that Microsoft later revealed to be Vista, much to the surprise of the interviewed users who'd heard so many bad things about it. However, the Mojave Experiment is so full of false information and saccharine gloss that it couldn't possibly appeal to anyone smart enough to turn on a PC. Even setting aside the fact that the ad experiment basically seeks to blame users for being dumb, the attempt by Microsoft to paint over Vista's problems is transparent and flawed, for a number of reasons. What's wrong with Mojave. Microsoft can't seem to decide whether it wants to admit that Vista has problems or not, and its waffling back and forth just makes the company look increasingly disingenuous. Is Vista a poorly launched, flawed product that the company is working to fix as quickly as possible, or is it awesome and wildly successful and just the victim of bad press? Microsoft tries to tell both stories at once, which is purely dishonest. In contrast, Apple said from the start last year that its Apple TV product was a “hobby” attempting to break into a difficult market. Critics lambasted it for not immediately taking over the market like the iPod had or iPhone later did. Apple's more recent problems in launching MobileMe were quickly noted by the company along with the intent to address complaints about it rapidly. Microsoft isn't alone in being able to stumble, but its complete lack of candor makes it hard to understand if the company realizes that it even has problems to solve. With Vista, Microsoft has issued a flurry of giddy press releases claiming widespread adoption based on the number of licenses sold and naming it “the fastest selling operating system in Microsoft history,” ignoring the fact that Windows sales are increasing simply because they are tied to PC sales. Microsoft has no competition in the PC operating system market due to its monopoly position, so it could release Windows Wet Toast and still sell it faster than XP and ME and 98 Special Edition and every other version of Windows in the past that was tied to an increasingly younger and smaller hardware market. Vista Sales to Non-Users. Many of Vista's “sales” were free vouchers distributed with PCs sold in the holiday season prior to its launch. Even more than a year and a half later, PC makers continue to put Windows XP on their systems, even those sold with a Vista license, while corporate users almost always remove the default Vista to install an earlier version of Windows. There's also a busy third party industry developing around removing Vista for consumers. In late July APCMag cited Jane Bradburn, a manager for commercial notebook sales at HP, as saying, “From the 30th of June, we have no longer been able to ship a PC with a XP license. However, what we have been able to do with Microsoft is ship PCs with a Vista Business licence but with XP pre-loaded. That is still the majority of business computers we are selling today.” The arrangement is supposed to end by January 2009, but HP is trying to extend the deadline because customers simply don't want Vista installed. EWeek also noted that between April 2007 and May 2008, its survey of business users indicated that Vista climbed from 2% to 5%, but that Windows XP jumped from 74% to 83%, three times the adoption of Vista. That growth came from migration from older versions of Windows. Even in its wildest projections, EWeek says Vista will only reach 28% adoption in businesses by the end of 2010. CNET reported that a Jully 2008 survey by systems management appliance company KASE found that 60% of companies surveyed have no plans to deploy Windows Vista, a ten percent increase in disinterest from late 2007. A full 42% were actively exploring Vista alternatives, and 11% had already made the switch to Mac OS X or Linux. Microsoft is simply lying about the level of Vista excitement, and it's gotten too obvious for the company to continue to do so. XP still killing Vista in sales volume: HP 60 percent skipping Vista, so Ballmer looks to Apple | The Open Road The Truth Is… oh Look a Distraction! At the same time, Microsoft notes on its Vista website “we know a few of you were disappointed by your early encounter. Printers didn't work. Games felt sluggish. You told us—loudly at times—that the latest Windows wasn't always living up to your high expectations for a Microsoft product.” That's some brutal honesty for a company with a knack for spinning wild fantasies about fictitious product enthusiasm for a product never actually put to use in many cases. At the same time however, in trying to refute away Vista's real problems, Microsoft uses a variety of tactics that just return to blind fantasyland. Microsoft is a Marketing Company, not a Tech Company. The company plays its Mojave Experiment hand on a new website, incidentally designed using Adobe Flash rather than the company's own Silverlight. Despite the site's oddly designed, usability-impared interface, it's still possible to pull out lots of details from the experiment that say as much about Microsoft's crafty, misleading marketing as they do about its technical problems, underling the simple fact that Microsoft is first and foremost a marketing company that flogs third rate technology products. Mojave took 140 people and asked them to score Windows Vista. The average response was 4.4. After demonstrating Vista SP2 under the name “Mojave,” respondents ranked Vista at 8.5, a stunning improvement. But what were they ranking? Microsoft notes that “many said they would have rated it higher, but wanted more time to use it themselves.” That sounds good at first blush, but it really indicates that the responses were biased by hyped up enthusiasm rather than facts, and that participants realized it, reserving their final judgement until they could actually see more. The “Mojave Experiment” What does Mojave Prove? Mojave tries to represent that Vista's bad reputation is the fault of ignorant consumers who have heard bad things that aren't true about Vista, and have made up their mind without getting the facts. At the same time however, Microsoft also publicly admits that Vista “broke a lot of things” and that specifically, “Printers didn't work. Games felt sluggish.” Did Mojave clear up mistaken notions for participants, or did it just erect smoke and mirrors in a carefully controlled demonstration that skirted around Vista's real problems, including those Microsoft admits? That's a question that answers itself. Mojave didn't send uses home with Vista in a Mojave package and then ask them how well it worked with their existing peripherals and games, or how fast it was in comparison to their existing PC software. This is Not the Droid You're Running Vista On. Instead, Microsoft sat them down in front of a HP Pavillion DV 2000 with 2GB of RAM. That's what HP called its “entertainment powerhouse” laptop, although HP only shipped it with 1GB RAM. Microsoft maxed out the RAM for the purposes of the test, making the laptop a bit more expensive than its usual street price of around $1050. According to Windows enthusiast Joe Wilcox, PC laptops actually cost $700, “half as much” as Apple's laptops. At least that's the Average Selling Price for consumer retail PC laptops according to NPD's Stephen Baker, compared to Apple's $1500 ASP. Wilcox insisted that his spin on NPD's figures couldn't possibly be biased because he wrote his article on a MacBook Air running Leopard. However, his $2,700 laptop did help drive up Apple's stellar ASP for its laptops well above the entry price for Mac Books, discounting his theory that revolved around the assumption that every Mac buyer pays the average price of all the laptops Apple sells. Wilcox and Microsoft are both disingenuously dancing on both ends of the truth. Many consumers are actually buying cheap laptops at Target that can't run Vista ideally, while Microsoft demonstrates its Vista on a considerably better equipped system in the Mojave Experiment to suggest that Vista doesn't have the performance problems that users have heard about from the majority of their peers who bought cheap PCs and are seeing Vista run particularly sluggishly on them. Should You Pay Twice as Much for a Mac? I Did! You Get What You Pay For. The fact that Apple sells more high end laptops to pro users at retail, and that it does not sell anything in the range of the cheap junk being hawked at big box retailers like Wilcox' Target both result in Mac laptops fetching a higher ASP. That fact also means that Mac buyers will be happier with their purchase and have a more favorable impression of Mac OS X because they're running it on a better system. That's all obvious stuff. However, selling people cheap laptops that don't work well, and then demonstrating a fake “new operating system” that appears to work well when running on a faster machine full of RAM is simply a dishonest bait and switch scam. Wilcox does nearly admit that PC makers are already stretching their credibility as they attempt to sell cheap boxes based on price alone, citing Baker as saying, “We aren't seeing any particularly substantive moves down in price on the Windows side, either in desktops or notebooks.” PCs can't get cheaper because they're already unprofitable and consumers are already disgusted with their performance when running the increased overhead of Vista. Wilcox also sets up a tilted comparison between a Dell PC desktop with integrated graphics and an iMac with dedicated graphics and claims a price advantage for Dell, although noting that, while “Dell offers more for less than the iMac,” “that 'more' also means Windows Vista, which won't satisfy some shoppers.” Why Aren't Shoppers Satisfied with Vista? Like Microsoft, Wilcox and his Windows Enthusiast pundit friends can't seem to decide if Vista has any real problems or if it's all just an unfair taint suggested by Apple's Get a Mac ads. However, while Apple has taken shots at Vista's incompatibility with printers and other hardware and its scarce updates that have been few and far between over the last year and a half of its being on the market, Apple also notes in its Get a Mac ads that Macs can run Vista, and can run it faster than PCs. So Apple isn't inventing and publishing false reports on Vista, it's merely advertising its Mac hardware as superior to PCs. The Vista flaws Apple's ads have referenced are flaws Microsoft itself has admitted to its partners, so the Get a Mac umbrage frequently voiced by Windows Enthusiasts is both hypocritical and ridiculous. However, in the Mojave Experiment, Microsoft downplayed those well-known faults by only carefully demonstrating certain features on a high end machine, and without actually exposing Mojave/Vista users to 'a lot of things Vista broke,' 'printers that didn't work', or 'games that felt sluggish.' It Can't Even Print. In response to complaints that Vista doesn't work well with existing PC hardware, Microsoft's Mojave website says that “the Windows Vista Compatibility Center lists compatibility status for over 9,000 products (5,500 devices and 3,500 software programs).” It even notes 2,000 printers, 200 scanners, and 500 cameras specifically. That sounds good until you realize that Apple ships support for over 3,100 printers in Mac OS X Leopard, a product that is targeted primarily toward education and consumers and which is not expected by users to run on any old hardware that might be in use by PC users. Vista is supposed to run on 95% of the world's PCs, and yet it doesn't even match the printer drivers that ship with Leopard, a number which does not include all of the third party drivers available for the Mac. Oh, but there's more. Not only did Microsoft dance around the truth to feed its Mojave Experiment participants a carefully controlled stream of garbage, but it also inadvertently revealed more serious problems related to Vista, which I'll consider in the following article. Did you like this article? Let me know. Comment here, 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 (oh wait, I have to fix that first). It's also cool to submit my articles to Digg, Reddit, or Slashdot where more people will see them. Consider making a small donation supporting this site. Thanks!

  • 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!

  • Happy New Year, new poll, and Expo stuff...

    Mac OS X Hints will be closed for the new year's holiday tomorrow and Friday, returning Monday with the usual hints -- I'll be at Macworld Expo next week, checking out the latest in tech toys along with the rest of the mob. If you're going to be at the show, feel free to stop by and introduce yourself, as I love meeting readers and contributors. I've posted my currently-known schedule in the 'read more' part of this message.For entertainment during our down time, please contribute to our latest poll about how much (or little) you use the Places section of the Finder's sidebar. Thanks to Perceval for the poll suggestion. My Expo schedule, at least as I know it now...Tue Jan 6:12:30pm - 1:30pm -- Podcast in the Macworld booth on the show floor2:30pm - 3:30pm -- Podcast in the Macworld boot ...

  • Reminder: No new hints Monday

    Monday is the Labor Day holiday in the USA -- so I have the day off, which I'll spend not laboring on hints :). If you have the day off as well, enjoy the long weekend with friends and family. We'll be back as usual on Tuesday morning.-rob.

  • 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 migrated to Windows, effectively pruning Apple's Macintosh into a Bonsai platform. The inability of one company to dominate any product category has been frequently repeated by PC industry pundits as a given, despite the fact that history is full of examples of this happening. Sony dominated personal music players for two decades under the Walkman brand even while equally large competitors tried to push it from this position; Nintendo has similarly owned handheld gaming despite ill-fated efforts to grab a piece of its pie by products running a generic platform such as Microsoft's WinCE (Gizmondo), Linux (GP32), and Symbian (N-Gage). In fact, outside of the Windows/DOS PC, there are actually few examples of a generic platform taking over an industry. Nearly every other consumer-facing product uses proprietary platforms: car makers, stereo equipment, appliances and so on typically all use designs custom to their maker. The paradox of the Windows PC market has been that Microsoft's broadly licensed software supposedly saves hardware makers from investing in software development while ensuring compatibility, when in reality it adds significant costs to PC makers while limiting their ability to differentiate themselves. That explains why PC makers have been perpetually merging together and going out of business while Microosft has rolled in money over the last two decades. Parallel efforts to copy Microsoft in broadly licensing an operating system have regularly failed: IBM's OS/2, Apple's Mac OS, Palm's PDA OS, even Microsoft's own efforts to duplicate Windows dominance in other markets, from copy machines to PDAs to smartphones to SPOT watches to music players. The closest copy may be Symbian, but its customers are partners, not simply consumers of a generic third party's operating system as Windows licensees are. That indicates it is not necessary to duplicate the dominance exercised by Microsoft over the PC industry in the smartphone market. Google's Android and Symbian exist more as technology sharing pacts among manufacturers, but both aspire to take Microsoft's DOS role among smartphones. However, the idea that Apple's iPhone must be dethroned by a modern-day DOS, whether Windows Mobile, Android, or Symbian, is not just debatable, but does not sync with the reality of more recent events. Apple's recent history of the iPod further refutes the idea that a software analog to Microsoft is needed. The iPod Emergence: Apple & Pixo vs IBM & Microsoft. Apple's iPod in 2001 made no effort to clone the DOS business model; it actually did the opposite. When Apple entered the market, there were a number of existing MP3 devices using custom software, hardware designs, and DRM codecs. The iPod used off the shelf components to deliver a custom MP3 player using third party software, but Apple also added its own technologies: easy to use sync with iTunes, a fast Firewire interface that made uploading music far faster than the prevailing USB 1.0, and an attractive industrial design. With the iPod, Apple played the role of IBM in 1981, using Pixo's embedded operating system to enter the market quickly, just as IBM had used DOS. The difference was that Apple didn't direct any market attention toward Pixo and added a lot of value on top of that core embedded OS. A modern day Compaq couldn't simply clone the hardware and license Pixo to run on it in order to compete against the iPod, because the iPod was much more than just generic hardware running Pixo software. As the iPod developed, Pixo's role diminished and was eventually displaced. Just like IBM, Apple jumped into a new market just as demand was beginning to explode. Apple made MP3 players far more attractive to a general audience by delivering greater playback capacity than most entry level devices offered, along with an ease of use that encouraged buyers to jump in at the higher end of the market. That left Apple with not only the lion's share of the market, but also by far the most profitable segments of the market. Two decades prior, IBM badly fumbled its play with the early PC and ended up irrelevant in the PC world by the late 80s, sideswiped by Microsoft's DOS and the cloners who were licensing it in parallel, notably Compaq and later HP and Dell. Steve Jobs had witnessed that happen, and was determined to not let it happen again to Apple. Rather than being manipulated by a software middleware vendor as IBM had, Apple worked to incrementally develop the iPod market itself. After consuming the hard drive-based player market, Apple took on the Flash RAM-based market with a tiny hard drive system used in the iPod Mini, and followed up with Flash-based devices of its own in the Nano and Shuffle. This allowed Apple to progressively serve an increasingly wider market, incrementally growing upon an established foundation. With the iPod, Apple became, in effect, an IBM with its own internal Microsoft. Microsoft's Failure Despite Features. In contrast, Microsoft entered the music player market by promoting music player hardware reference designs around WinCE. However, it was unable to ship a finished design until the iPod had become firmly established around 2005. Later branded as PlaysForSure, the devices were sold by various hardware makers and all purported to support the same DRM and the same music subscription services while also offering a broader array of hardware that presented video before the iPod did, supported wireless before the iPod, and so on. Despite these unique features, all of those PFS designs still failed. Microsoft blamed the failure of PFS upon its music store and hardware partners and decided to take Apple on itself in 2006. It relaunched a Toshiba PFS player as its own device under the Zune brand, adding WiFi music sharing features and a larger display than the current Pods had. It failed dramatically as well. Did Microsoft's attempts to float a new DOS among music players fail because of Apple's success, or due to Microsoft's own problems? The failure of the Zune, which followed the iPod model rather than the DOS model, seems to suggest that Microsoft itself was to blame. Consider too that Microsoft's Windows Mobile phones, which use the same underlying operating system as its failed PlaysForSure music players and the Zune, had similarly flopped even before Apple could release a charismatic phone equivalent to the iPod. Of course, when the iPhone was released, it hit Windows Mobile hardest. The iPhone made Windows Mobile Smartphones look ridiculous and underpowered, and made Windows Mobile Pocket PC phones look clumsy and awkward, despite the fact that they both supported a variety of features the iPhone didn't, including the ability to edit documents, capture video, send MMS, and so on. Simply adding on features did not enable Microsoft to compete against Apple. The only conclusion that can be drawn from all this is that competing against Apple requires more than just having a feature arsenal. Microsoft's failures in themselves do not necessarily mean that Google's Android will fail in its attempts to float its own smartphone platform. Why Microsoft’s Zune is Still Failing Microsoft’s Zune, Vista, and Windows Mobile 7 Strategy vs the iPhone Will Google Succeed where Microsoft Failed? Microsoft's demonstrated inability to successfully enter consumer markets for MP3 players and smartphones has given observers little faith that the company will somehow turn things around in late 2009 when its next generation of devices are expected to be released. However, prior to that the first fruits of Google's efforts to build its own smartphone operating environment will arrive. Will Google's Android take over Microsoft's crown as the “DOS vendor” among smartphones? Supporters of Google's Android project point to some parallels between Android for smartphones and Windows on the PC: Android will allow hardware makers to differentiate in ways that can offer features Apple can't (or doesn't want to); it should allow software developers to offer features Apple does not allow on the iPhone; it embraces open, hobbyist experimentation in ways that Apple currently isn't; and it opens the potential for content providers that Apple is not interested in allowing. Openness is Android's key competitive feature. Will all this openness allow Google to unseat the iPhone to become the primary platform developers want to participate in, and subsequently soak up the market for third party hardware makers that Windows Mobile serves? While Google currently has no market share due to the fact that no Android phones have yet shipped, it does have broad vocal support from a variety of the same kinds of hardware manufacturers that supported DOS and Windows and helped to make those platforms successful in the desktop PC market. HTC and Android. The first Android phone is expected to be the HTC Dream; Taiwan's HTC (High Tech Computer) also manufactures Palm's Treo Pro phone as well as many of the most visible Windows Mobile devices. In addition to models produced under its own name, HTC also sells Windows Mobile devices under the Dopod brand, as well as no-name phones branded by providers, such as AT&T, Orange, Sprint, T-Mobile, Verizon Wireless, Vodafone, and others. HTC will also be building the XPERIA X1 Windows Mobile phone for Sony Ericsson. HTC was quick to throw its support behind Android despite its long term alliance with Windows Mobile. Why would it so enthusiastically support an unproven platform from a company that has no experience in consumer hardware platforms? One can only assume that HTC is not happy with the current state of Windows Mobile, and desperately wants another “DOS” to succeed where Microsoft's has so spectacularly failed. As an Original Design Manufacturer for Palm, HTC watched as Palm adopted Windows Mobile in place of the Palm OS and subsequently fell even deeper into crisis. Palm's only successful phone since has been its Palm OS-based Centro. HTC undoubtedly sees Android as its ticket to becoming the next Dell, but without a similar dependance upon Microsoft. Android for mobile phones is essentially playing the role of Linux for PCs, except that it has the backing of a major company behind it. Can Android Take on the iPhone with Openness as its Feature? As great as this sounds, it's important to consider that Linux on the desktop has made no significant progress in eating into Windows dominance after a decade of trying. Being open, free, flexible, and decentralized hasn't been enough of an advantage to get consumers to migrate from Windows to Linux in any fraction of significance. Similarly, in the music business, Linux-based MP3 players have had no impact on the iPod, despite offering more features, flexibility, support for additional codecs, and so on. In the mobile phone area, Linux enjoys a sizable portion of the smartphone market, but this is almost entirely due to phones sold by Motorola in China, where the advantages of Linux' openness are void. Motorola's Linux phones offer nothing to users in terms of openness or flexibility, and are really no different in terms of features than other appliance 'feature phones' based upon closed operating systems. And again, a key problem with assaulting Apple in a feature war is that neither the iPod nor the iPhone became popular by being “highly featured.” They both delivered perhaps 80% of the functionality found in all other devices in the market. Rather than trying to match every feature and cater to every niche as Microsoft had with Windows Mobile, Apple's devices did a few things very well at launch, and incrementally developed into full featured devices that still lack some of the more unique features of their competitors. Further, in terms of openness, the demographic that embraces Linux' characteristic freedoms is not the same as the demographic that buys smartphones in quantity and then pays for data service. This is a critical fact to consider because a big part of the iPhone's success stems from the fact that it is being pushed by mobile providers who want to capture the cream of the market willing to pay a premium for data services. The Frankenphone. Combining the fractured aesthetic of HTC's Windows Mobile phone hardware with Android's software, based upon Linux' perpetually unfinished DIY openness and Google's Java-like development platform, will not result in a product similar to the iPhone. Instead, it will look a lot like phones that have already failed in the market. Apple's advantage comes from slick hardware designs with a close attention to detail, combined with software that purposely does less so that it can do what it does better. Even Apple's own conservative attempts to broaden its software capabilities with iPhone 2.0 have resulted in instability problems that can be blamed upon both Apple's early releases of its phone operating system and software from inexperienced third party developers new to the platform. Would the current frustrations with iPhone 2.0 be somehow mitigated by additional openness that also embraced all kinds of variables from different hardware makers with less quality control than Apple, a loose committee of additional cooks working to serve up operating system features targeted at every possible conceived need, and a wider third party software group with fewer constraints on illegal behaviors? The Failure of Open. While it is politically unpopular to criticize the well meaning efforts of open source contributors, the failure of Linux on the desktop, the failure of the vaporware Indrema game console, and the failure of the OpenMoko project to deliver a workable phone within a year of its deadline all underline the serious problems open development faces in the world of consumer oriented devices. Open has simply failed to deliver on its promises in the world of consumer hardware. OpenMoko was supposed to release its first mobile phone to consumers for $250 several months in advance of the iPhone. When the iPhone shipped, the group then announced new plans to get its phone out by the end of 2007. Instead, this spring the group announced new plans to move to an entirely different development platform, and ship its phone mid year for $400 with limited functionality and incomplete software outside of basic GSM phone features. Linux's notable successes, from Motorola's Linux phones to the Tivo DVR to Linksys Routers, have often come without any associated openness or freedom, and were instead delivered simply to provide their manufacturer with a free kernel to build upon. This indicates that while Linux may find its way into an increasing number of smartphones, it will likely not be accompanied by the glorious freedom of an open development environment Google has said it would offer with Android. Apple iPhone vs the FIC Neo1973 OpenMoko Linux Smartphone Can Google Succeed Where Open Has Previously Failed? Despite “openness” being Android's strongest competitive feature compared to Apple's iPhone, Google recently revealed that its wide-open development model is intentionally gravitating towards a closed association of top tier partners due to practical considerations. In July, Google accidentally sent out a notice that revealed that it had been seeding private SDK updates to only a subset of its contributors, angering those who believed that Android would be as open as Linux on the desktop or the OpenMoko project. Further, Google has restricted initial development to higher level APIs just as Apple did, further indicating that Google itself realizes that being wildly open to impress a minority of hobbyists will not result in the commercial success of its new platform. That serves to neuter Android's primary advantage over the iPhone. Without delivering on the premise of being wide open, Android is really just a less mature set of Java libraries used to create a specialized binary that runs on a Linux foundation. Unlike Apple's iPhone, Android phones won't have a slick user interface developed by professional artists, nor the iPhone's legacy of mature software development frameworks crafted over the last thirty years, nor the iPhone's tightly integrated hardware with award winning industrial design, nor its marketing power tied into the iPod and Apple's retail stores. Android won't be an open iPhone, it will only be a Windows Mobile phone with a better kernel that runs specialized Java software instead of Win32 or .NET code. Don't expect consumers to be impressed by that. The Biggest Missing Feature. There is one remaining factor that strangles to death any last remaining hope that Android might assassinate the iPhone and assume the crown of the “DOS of smartphones.” That is: Android delivers zero price advantage to consumers. In 1981 and 1991, consumers who wanted Apple computers faced the sticker shock of a somewhat arrogant price tag. Apple sold its computers, as it still does, at the higher end of the market, but there was simply far more range in prices available. In 1981, that meant the Apple II was $2600 and the new Apple III was $3500, even before you added a monitor. On the low end, Commodore sold its far less powerful, but “still a computer” Vic-20 for $300, while IBM entered the market with the IBM PC at $3000. Over the next few years, Apple focused on delivering additional sophistication at the same price, releasing the $10,000 Lisa and then the $2,500 Macintosh. IBM continued selling PCs in the same $3,000 to $10,000 range, but other DOS PC vendors began selling machines at prices that ranged as low as $1500. That left Apple with a roughly $1000 price premium over low end PCs. The products weren't really comparable, but consumers only saw the huge price difference. In 1991, Apple was still selling moderate to high-end Macintoshes for $3,800 to $10,000; the crippled Mac LC was $2500, and obsolete-at-birth Mac Classic ranged from $999 to $1500. Windows allowed PC makers to ship a functional $1500 PC and claim a rough approximation to Apple's $2500 entry level system, maintaining that apparent $1000 price premium. Today, pundits are lucky to find a Dell or HP system that is even a couple hundred dollars less than a comparable Mac. However, in the smartphone business, the iPhone 3G is now the same price, if not less, than generic competing phones on the market. Even more significant is the fact that the price of the phone hardware is nearly nothing compared to the cost of the service plan. This fact simply eases any price premium that could cause buyers to flock to a smartphone running a generic operating system over buying the iPhone 3G, regardless of whether it runs Windows Mobile or Android. 1990-1995: Planting Software Seeds Android Partners Have Already Failed. That same pricing principle similarly prevented buyers from considering many of the alternatives to the iPod. While Apple's original iPod models were more expensive than many of the first MP3 players on the market, they were price competitive with models offering similar features. By 2004, it was Apple who was undercutting MP3 competitors on price. Microsoft offered zero price advantage when it began selling the Zune, a major factor in its failure, but Microsoft simply couldn't out-price the iPod; it was already losing money offering the Zune at the same price as the iPod. Apple now has tremendous market power in buying RAM and other components that will prevent any competitors from being able to offer a huge discount over the iPhone's $199 price tag. Even if competitors were to give their phones away, they would only offer a $200 discount to users who would then still need to pay the same mobile fees to use the phone. Android's other partners, including Samsung and LG, have already failed to capture any significant market share in the music player market. Are they going to maintain their position as smartphone makers now that they face similar competition from Apple, its iPod ecosystem, its iTunes Music and Apps Store, Apple's retail store experience, and other factors that are pushing the iPhone? If they can, it is not obvious how partnering with Android will help. Other Problems for Android. Android was announced in early November 2007 and was followed with an early preview SDK within a couple weeks, a month ahead of Apple's initial announcement of the iPhone 2.0 SDK. However, between March and July 2008, Apple delivered nine progressive releases of its SDK, opened its App Store, and sold 60 million apps, raising $30 million to support iPhone software development in just the first month. It has since released three more SDK updates to developers related to iPhone 2.1, which is expected next month. Android just published its first open SDK beta update earlier this week, warning developers that “applications developed with it may not quite be compatible with devices running the final Android 1.0.” Additionally, Android still has no phones available. By the time the HTC Dream is expected to launch, Apple will have an installed base of around ten million iPhone (and iPod touch) users supporting software development through iTunes. The business model for selling Android apps is no better than that for selling jailbreak iPhone apps: there is no iTunes Apps Store to promote them, so users will have to track them down on their own. Android developers also have no real freedom that jailbreak iPhone developers lack. The only difference is that there are ten million iPhones to sell jailbreak apps to, and currently zero Android phones. If selling a jailbreak iPhone app sounds like more trouble than its worth, imagine trying to sell Android apps to a non-existant audience. Now add the official iPhone App Store into the mix, where publicity, promotion and profits are booming. What platform is going to have the most applications? How many users will flock to a smartphone platform with no apps? The wisdom of releasing a desirable phone and achieving a significant installed base before releasing an SDK makes a lot more sense in retrospect. Additionally, while Apple has a decade of experience in shipping regular updates to Mac OS X and its Xcode developer tools, Google has only shipped a random assortment of web-oriented SDKs (a number of which have been abandoned) as a tangent to its core business of selling advertisements. When the Android SDK 1.0 is finished later this year, developers will not only lack an installed base to sell their apps to, but will also have no high profile market for selling their apps in, and subsequently no financial incentive to develop applications that add value to the Android platform, just like Linux on the PC desktop. Around the same time, possibly within the next month, Apple will be shipping its second major OS release: iPhone 2.1. Apple will also be upgrading its entire user base to the new software so that developers will have a cohesive platform to target. This mirrors the efforts Apple has taken to upgrade its Mac OS X users to the same reference release. Mobile developers will be seeing money pouring in via iTunes while crickets chirp in the Android section of various mobile online stores. Apple’s iPhone Vs. Other Mobile Hardware Makers: 5 Revenue Engines Same Same, But Different: DOS Model Problems. Android developers will also have a series of other problems to manage. Like Windows Mobile, Android is intended to support everything, from BlackBerry-style keypad phones with a small touchscreen to the simple Windows Mobile Smartphone form factor lacking a touch screen to iPhone-like full size touch screens. Also like Windows Mobile, Android phone makers will have the option to leave off Bluetooth, WiFi, GPS location services, graphics hardware acceleration, and so on. Each Android phone will also have unique camera hardware, support for different video and audio codecs, and varied support for other differentiating proprietary services demanded by mobile operators. This will force developers to to make complex decisions regarding the lowest common denominator they choose to support. So while the iPhone will have a cohesive feature set, a managed software environment, and a functional market, Android will be a loose federation of hardware makers selling the same random features found on Windows Mobile today, with a chaotic development environment that lacks any central market for users or developers. And it will be run as an experiment by a company with no experience in consumer hardware or platform development. The Missing Tap. One specific example of the “DOS model problem” is that Android currently does not support multitouch. It's not touched on in the API, and Google quietly tap dances around its omission. Why no multitouch? Because multitouch screens are expensive, and most OHA hardware members are more interested in making a profit in a competitive phone market rather than impressing consumers as Apple did with the iPhone. Most existing smartphones, even those trying to directly rival the iPhone, use a stylus driven, pressure sensitive tap screen or a simpler, cheaper touch technology that lacks support for sensing multitouch. The iPhone's screen can actually sense up to five fingers at once, but the primary feature multitouch offers on the iPhone is the two fingered tapping and the pinching effects everyone associates with it. Android could certainly support multitouch if there were a demand for it, but that's the point: Google knows that its hardware partners are cheap and unlikely to put out hardware that actually competes with the iPhone. Instead of using expensive technologies that deliver clever yet largely invisible functionality, OHA members, just like PC makers, are far more likely to add flashy, impractical gadgety fluff that's cheap to tack on, such as slide out keyboards, neon tubes, and scratch and sniff stickers. That's how you impress gullible nerds on the cheap. Google itself is blowing smoke and erecting mirrors to distract from the reality that it being a “DOS vendor” means supporting bargain basement hardware from penny pinching duplicators. Android has been demonstrating some “wow” features such as a Street Maps app that pans around based on an internal compass in the demonstration phone. The problem is that that kind of thing only makes for a fun demo. Nobody needs to twirl around their phone in the air to see a view of the other side of the street, but everyone who has used an iPhone will wonder why they can't pinch to zoom out. Even worse, most Android phones aren't going to have a compass built into them, so Google is demonstrating features most Android users won't be able to use. That Sounds Like Microsoft… Google's design decisions are beginning to look a lot like Windows Vista; rather than actually working to make laptops boot faster, Microsoft came up with the idea of adding a small screen to the back of Vista laptops so users could check their email without having to wake the system up. But this was a stupid idea for a number of reasons, the most obvious being that most users just want a laptop that boots up quickly. Few laptops got the mini screen, but every user who tries Vista on their laptop will wonder why it doesn't boot up as fast as Mac OS X Leopard. In the same way, Google is advertising features for Android that most users won't ever see in their actual phones while ignoring things people will expect based on their exposure to the iPhone. Android is simply selecting the wrong features. Android will offer the advantages of supporting MMS, recording video, and the list of other features Windows Mobile already supplies. Those features didn't stop Apple from firing past Microsoft in the smartphone arena however, just as the Zune's highly touted WiFi and screen didn't phase iPod buyers. Incidentally, just months after the Zune, Apple had not only demonstrated a larger display but a higher definition multitouch screen, and not only WiFi, but functional WiFi that could be used to browse the web or check email. This suggests that Apple, with its faster release schedule, won't stay behind any of the leading features potentially offered by Android for very long. Android partners, however, will find it as difficult to catch up with Apple's unique features, just as Microsoft has been stymied to keep up with Mac OS X, the iPod, and the iPhone. The underlying reason: both Google and Microosft are tasked with maintaing support for a huge variety of hardware options demanded by all their partners. Apple has the unique circumstances to do only what it needs to do itself. Android in Windows Mobile's Shoes. Like Windows Mobile, Android faces a difficult market. In the US, it competes against the popular BlackBerry in corporate markets and the iPhone among consumers. Worldwide, it competes against entrenched market leader Nokia. The difference is that Google, unlike Microsoft, has no in. Windows Mobile was adopted by Windows-bound IT shops despite its weaknesses. Nobody has any preexisting reason to try an Android phone apart from hobbyists and open software enthusiasts, a demographic that has done little to move Linux on the PC desktop. Google also lacks Microsoft's installed base; it's starting from zero. The smartphone industry initially doubted Apple's chances of making much progress with the iPhone, despite the company having the Mac platform, the iPod, retail stores, platform development experience, marketing savvy, industrial design prowess, and so on. Google doesn't have any of those things. Mobile Providers vs Android. Apple also started with an exclusive partnership with AT&T, a three legged race that demanded effort from both. Google is hoping that hardware makers handle the hardware details and that mobile providers will be excited to sell its Android phones. While hardware makers such as HTC clearly appreciate having found a free alternative to Windows Mobile, it's not obvious why providers would be excited about Android, as it promises an openness that most mobile providers strongly oppose. AT&T took a big risk in getting behind the iPhone, as the phone encouraged users to use email rather than fee-based SMS and MMS, it supported WiFi for data access, and it bypassed AT&T's MEdia Net services to plug into iTunes instead. Verizon refused to parter with Apple and grant it those kinds of concessions. Is AT&T going to take a similar risk to partner with a phone that is not exclusive to it, and is Verizon now going to open its arms to support phones that do not exclusively support BREW, VCast and its other proprietary services? While Android may well eat into Microsoft's Windows Mobile business by stealing away its hardware makers, it seems unlikely that Android will ever serve as more than free alternative to Windows Mobile in a market where Windows Mobile is increasingly irrelevant. Android may have the dubious distinction of swallowing Microsoft's mobile business the same way Microsoft ate up the Palm OS, but even if it accomplishes that goal, Google will likely find itself unsustainably hungry immediately afterward. It will also find itself swimming in a shark tank of hungry rivals, including Nokia's Symbian, RIM's BlackBerry, and Apple's iPhone. Symbian is the final generic platform vying for the opportunity to play DOS in the smartphone market. The next article will examine Nokia's chances in its bid to match Microsoft's PC dominance in the mobile market while setting out in a new venture to copy Android's open software model. Did you like this article? Let me know. Comment here, 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 (oh wait, I have to fix that first). It's also cool to submit my articles to Digg, Reddit, or Slashdot where more people will see them. Consider making a small donation supporting this site. Thanks!

  • 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.

  • Best OS X 10.5 Hints contest winners revealed!

    After some delays due to both Macworld Expo and hearing back from all of the winners, I'm please today to announce the 10 winners in our Best Leopard Hints contest. The winners were chosen by rankings from both the public voting, and votes from the Macworld editorial team (yours truly excluded). We then took the average of both groups' scores, and used that number to create the final rankings. Note that this is the first time the winners will see what they've won -- as of now, they only know that they've won something. So without further ado, here's how things wound up...iPod Shuffle winners:10th: Enable data detectors in iChat -- Zach S. from New York, NY. 9th: Use Help to select menu items via keyboard -- Aaron J. from Beaverton, OR (and no, I don't know him!). 8th: ...

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