Right and wrong

Steve Jobs announced the new line of Apple iPods today, and my predictions were both right and wrong. (I was in class and then meetings and so only now have been able to catch up with the video broadcast).

Of course, the big news was that Steve Jobs is not dead yet — as he said “I’m vertical” — publicly admitting to the liver transplant from a donor who died in a car accident. He did look haggard, 10 years older than his last public appearance, and was on stage less than 15 minutes.

Before he stepped away from the pdoium, he made a few announcements:

• iPhone: 30 million sold
• iPhone App Store: 75,000 apps, 1.8 billion app downloads (not including updates).
• iTunes 23 countries, 8.5 billion songs, 100 million customers, #1 retailer in the world
• iTunes LP: “Some of us here are old enough that we actually bought LPs. It was great, because you not only got the music but you got great photography, you got liner notes, you got essays. Who could forget some of these classic albums?”

Of my product predictions, the major one was clearly wrong: I’m not buying the new iPod Touch this week because (despite my prediction) there is no new iPod Touch. Rumor has it that a product is planned but has been delayed due to component problems.

One minor prediction was more on target: Users hate the proprietary headphones on the iPod Shuffle so much that there is now an adaptor to allow third party headphones. It sounds like the main plan is to license rights to the proprietary controls to headphone makers (presumably royalty bearing, raising consumer prices), so it’s not clear this really solves the problem. As they say, the devil is in the details.

Four deficits of the Apocalypse

From the WSJ:

David Walker sounds like a modern-day Paul Revere as he warns about the country's perilous future. "We suffer from a fiscal cancer … Our off balance sheet obligations associated with Social Security and Medicare put us in a $56 trillion financial hole—and that's before the recession was officially declared last year. America now owes more than Americans are worth—and the gap is growing!"
…
He became president and CEO of the Peter G. Peterson Foundation, a group seeking to educate the public and policy makers on the need for fiscal prudence. … Last year, it released a documentary "I.O.U.S.A.," … [I]n its diagnosis of the problem the film scores a bull's-eye. Among the fiscal hawks featured in the film is Rep. Ron Paul, who memorably tells Alan Greenspan that if doctors had the same success rate in meeting his goals as the Fed has had, patients would be dead all over America.

Mr. Walker's own speeches are vivid and clear. "We have four deficits: a budget deficit, a savings deficit, a value-of-the-dollar deficit and a leadership deficit," he tells one group. "We are treating the symptoms of those deficits, but not the disease."

Mr. Walker identifies the disease as having a basic cause: "Washington is totally out of touch and out of control," he sighs. "There is political courage there, but there is far more political careerism and people dodging real solutions." He identifies entrenched incumbency as a real obstacle to change. "Members of Congress ensure they have gerrymandered seats where they pick the voters rather than the voters picking them and then they pass out money to special interests who then make sure they have so much money that no one can easily challenge them," he laments.
…
As I prepare to go, Mr. Walker returns to the theme of economic education. Poor schools often produce young people with few tools to help them realize the extent of the fiscal trap their generation is going to fall into.

One way the Peterson Foundation wants to change that is to bring big numbers down to earth so people can comprehend them. "Our $56 trillion in unfunded obligations amount to $483,000 per household. That's 10 times the median household income—so it's as if everyone had a second or third mortgage on a house equal to 10 times their income but no house they can lay claim to."

So instead of conquest, war, famine and death we have “a budget deficit, a savings deficit, a value-of-the-dollar deficit and a leadership deficit” — a different form of judgement day.

Latest in a series of outsourced economic policy criticism as a cost-cutting move during difficult times.

Never too big to fail

From a Financial Times editorial Tuesday arguing for policy reforms in the U.K. financial sector:

Second, banks must also be made safe-to-fail. … "Living wills” — pre-arranged plans for taking apart banks safely should they become insolvent — should be drawn up.

The goal should not be to restrict business, to cap the size of companies or to vindictively cut profit margins. Rather, it should be to prevent growth in the financial sector if it occurs in ways that rely on implicit public guarantees. Rewards should accrue only to people who take risk on their own account. The UK government must take action to create a genuinely private financial system.

Normally the FT’s editorials on government economic policy read like a manifesto for New Labour (pre-Gordon Brown), so it’s nice to see the newspaper discover its Libertarian side. Perhaps these ideas will catch on on this side of the “pond.”

Latest posting as part of an ongoing cost reduction via outsourced economic criticism.

Welcome back, RCR

I got started on cellphone research back in 1996, when my advisor said that if I wanted to study standards, I should study cellphones. Since then I’ve done a fair amount of research indirectly or directly related to the wireless industry, mostly around mobile handset platforms and of course the CDMA wars.

I quickly discovered three invaluable publications for follow the industry: RCR News and Wireless Week in the US, and Mobile Communications International for Europe and the GSM world more broadly. I subscribed to all three, and I still have paper copies of these precious trade journals in my files from my research a decade ago.

Alas, publishing a magazine (like newspapers) is not as financially viable as it once was. The paper and online version of RCR (now RCR Wireless News) died on March 3. It had almost 100,000 readers a month.

Fortunately, RCR has been sold and the new owners have brought back two RCR veterans to act as editors. They plan to relaunch it as an online-only publication starting today.

I look forward to reading the new RCR as an invaluable resource for mobile phone research.

iPhone beats Android 250:1

Matt Hall on his Larva Labs blog laments lousy sales on Android Market, both for his apps and those by other companies. For one application, the iPhone App Store is outselling Android Market 250:1, while (as a commenter notes) the iPhone installed base advantage is only 15:1.

The conclusions are based on AdMob data, which notes that iPhone/iPodTouch owners are 2x as likely to buy paid apps as Android users. (That would only suggest a 30x discrepancy between the two platforms).

Hall laments several aspects of the Android Market shopping experience. It’s not clear whether these decisions are just implementation errors that are easily fixed, or systematic choices, perhaps (as Hall suggests) reflecting a bias towards free apps.

The latter point I don‘t quite follow: Google is making money off of Android (through increased use of its ad-supported online services), so what’s wrong with the software developers making money? Google has already so commoditized mobile phone software — and Apple has established a standard $1 price point for most paid apps — that smartphone app developers already face a considerable challenge in monetizing their creative efforts. Why force a zero price rather than a near-zero price?