Planet Money Recommendation

If you’re looking for a good way to pass the time on your iPod, try the NPR Planet Money podcast.

I don’t recall how I discovered them, but I started listening shortly before the U.S. financial crisis two years ago. They once said their original intent for the podcast was entirely different, but as the housing market collapsed and banks went to the brink of failure, their focus quickly shifted and they’ve been reporting ever since. The majority of the stories are serious, with heavy emphasis in the past couple of years on the global crisis and the reconstruction of Haiti. However, they also have a lighter side that comes out well during their purchase of a U.S. toxic asset, they they eventually named “Toxie” for the listeners.

What I particularly enjoy about them is that they aren’t out there to promote a stock, and they definitely are not Wall Street insiders. In fact, most of the time, they are just trying to dig through the mess of the business world and make sense of it for the average Joe. And surprisingly, their analysis has been in my opinion, extremely non-partisan. I’ve listened as  they sometimes are forced to confront their own values with the reality they report on, which just adds to the impact of their stories.

So if you like a more human view of the markets that typically get lost in the numbers, check these guys out…

Apple Antenna Response is Baloney

Yeah, yeah…I know I just posted about what Apple has been doing right, but their response to the antenna issue is tacky at best. I went so far as to even rename my last post from “Why Apple is Successful” to “Why Apple Has Been Successful” just to better reflect my sentiment. Be ready, for the rest of this post, I’m going to reference Engadget quite a bit.

The impulsive side of me appreciates the responses of Nokia and RIM to Apple’s press conference. I can vouch first-hand about Nokia’s historical commitment to antenna performance and call quality. Nokia has 100s of phones where they’ve solved this problem, Apple has 4.

But I really love the veracity by which the RIM co-CEOs have responded:

Apple’s attempt to draw RIM into Apple’s self-made debacle is unacceptable. Apple’s claims about RIM products appear to be deliberate attempts to distort the public’s understanding of an antenna design issue and to deflect attention from Apple’s difficult situation…

During that time, RIM has avoided designs like the one Apple used in the iPhone 4 and instead has used innovative designs which reduce the risk for dropped calls, especially in areas of lower coverage…

Apple clearly made certain design decisions and it should take responsibility for these decisions rather than trying to draw RIM and others into a situation that relates specifically to Apple.

Pay attention to that last statement. My experience has shown that antenna issues almost always involve some sort of design decision, usually along the lines of “pretty vs performance”. They are difficult decisions, obviously one in which Apple has chosen “pretty”. On some levels, it’s hard to blame them as they have a larger-than-life reputation around their design. Metal trim plus antennas are just troublesome, not impossible, but troublesome. Apple should have seen this was coming, especially with the reputation ATT’s network has.

That said, if Apple has issues in the U.S.A. just wait until they begin sales to countries (e.g. China Unicom) whose carriers would love to only have ATT-esque issues. Here in China, I have to walk to the window to take calls (with clarity) on my iPhone 3GS. I imagine I’ll need to strap myself to the building and hang outside to get the iPhone 4 to work.

So Apple, when someone asks you if anything could have been done, don’t try to deflect the question by saying people don’t want big phones. You are right in some regard, but you’re basically telling people that their phone is more “shiny object” than “phone”.  This is insulting to people like me who actually enjoy using your products because the experience is best in class, not because it brings out the color in my eyes. Sadly, the general populace will miss the fact that your competitor’s “big phones” are due to larger display sizes increasingly common on mobile phones. Not everyone fits into one bucket.

And please try not use misleading statistics in the future. The phone has hardly been on the market for more than two months. You haven’t even really begun to really see customer feedback yet. Give it a few more weeks/months and I bet that number of yours creeps up closer to the 3GS.

In the end, I think Apple fans will continue to march on regardless of these issues. The core will stay fairly intact through this mess, but I’m guessing those on the Apple fringe are going to gripe the most. It’ll be interesting to see if this has a huge impact to the iPhone sales growth rate though, as their handling of this situation will probably tarnish a bit of their shine. I also suspect that many in the core (and possibly the press) will actually re-spin Nokia and RIM’s response into being childish rebukes for having lost share to Apple. There might be some truth in that, but deep down, I do believe they are attempting to defend some of their hard-earned reputation from the misdirection and mudslinging coming out of the Apple camp today.

I hope all the iPhone 4 buyers who get the free covers enjoy their “Christmas in July”…

MediaTek-Android Deal to Grow Shanzhai Further?

According to a Network World article, Taiwanese firm MediaTek has struck a deal with Google to release low-cost chipsets specifically for Android. For those familiar with the Shanzhai concept and market (read here for more info), this could be a game changer in developing markets where this approach continues to grow in strength.

For those that don’t know, MediaTek has for years been the supplier of a “system on a chip” that many China-based handset manufacturers have used to eat away at the market shares of many mobile giants like Nokia, Moto, and Samsung. Collectively, they are labeled as “Shanzhai” and are as much a culture as a business. Some of them are the source of fake name-brand phones, but many develop their own (creative and hilarious) designs. When you have a company like MediaTek who can provide a cheap hardware solution, it becomes easy for new companies to put out their own phone model.

So how does this new announcement affect the Shanzhai ecosystem?

Even though MediaTek partnered with Microsoft, a lower-cost Android platform provides a real weapon. Not only do they make a significant jump in terms of UI and functionality, they get access to a growing developer base. On some metrics, this could allow them to stay on par with other big-brands using Android, and maybe even ahead of Nokia/Symbian. Obviously they lack the marketing and distribution to really go big, but 1000 little guys each carrying a pretty big gun has the potential to do serious damage to existing players.

Not only is the Shanzhai movement strong in China, but their products are making inroads into India and Africa, which are strongholds of companies like Nokia. Africa is a rapidly growing mobile market, one that is still not yet one. If any of the Chinese manufactures (even a Shanzhai one) were to overcome the perceived issue of Chinese-made products, things could change. And in markets like India, where once again Nokia has a huge brand preference, a Shanzhai-Android combination could start tilting the market. As a market that values new features at an extremely low price, this new type of competitor could sway over many of the locals.

Why Apple Has Been Successful

Apple Study: 8 easy steps to beat Microsoft (and Google)

I would argue that the title of this presentation is a bit misleading; Google and Microsoft do employ some of the key points from this presentation, just maybe not always with the same effectiveness. Also, one could also each company  holds a unique view of what constitutes value, progress, and success.
Regardless, they’ve done a nice job distilling the key components of the Apple approach. Many of these have been discussed ad naseum in other places, so the conciseness of this report much easier to digest.
A few of my favorite points were:
Apple re-legitimize vertical integration (slide 10,11): It seems a few years ago “vertical integration” was almost a curse word. Apple has definitely resuscitated this approach. However, I believe its more a result of their strategy to control the user experience that pushes them into this model rather than some innate superiority to this approach. It has failed for them in the past, so time will tell if they can maintain this structure moving forward.
App Store revenues a drop in the bucket (slide 16): I didn’t know this, I was always under the impression this was a huge money-maker for them. Considering the content-providers involved, one could assume they must take a large cut. If this is really a driver for their hardware, as the report indicates, one has to wonder what would happen if they actually started feeling price pressure on their physical products. I guess it will continue to make sense for them not to license out their software assets. Letting lower-cost manufacturers fight price wars with you and others would definitely erode their margins quickly.
Integration reinforced by retail strategy (slide 24): Can we just retire the words “halo effect” sooner than later? I admit it, this phrase is a personal pet peeve.
iPad embodies the transition to post-PC era (slide 34): Gotta love the “truck” versus “car” analogy here. I’m still not on-board with the post-PC era yet, but that may be due to the fact I’m a truck guy.  Unless  new innovations start pushing the boundaries of existing hardware, I might start migrating to a “car”.
Overview of Apple, Microsoft, and Google (slide 39): I’d love to know what the reasons are for the difference in the number of patent filings between these companies. With Microsoft, they do a bit of everything, so I can understand the number of patents, but Google is also involved in multiple markets. So why are these numbers so drastically different?
In the U.S., I think Apple and Google would be lauded as innovative, while Microsoft as stagnant. So to play devil’s advocate, could the number of patents filed and awarded actually be a symptom for lack of focus? I think some of Microsoft’s moves over the past years could make you wonder. I don’t have a strong opinion either way, just food for thought.
What are Apple’s main short-term risks? (slide 43): As I write this, Apple currently has a press conference scheduled where some are debating whether Apple would announce a recall on the iPhone 4 due to its antenna issues. This report could almost be prophetic.
On the last page I noted, don’t miss the the comment about Steve Jobs insistence that an early desktop Apple product not have any fans. As a “product guy”, it’s nice to know that even the most famous have their little embarrassing mistakes they’d like to take back. It’s a good reminder that Apple is still a speed-bump or two away from losing all they’ve gained, although they have been doing more right than wrong over the past few years.

If I had a Hammer…

Google is quickly catching up to Apple’s iOS in terms of professional developer mindshare, so with the introduction of the App Inventor for Android they may have opened up the market to the hobbyist-developer.  It’ll be interesting to see if this tool has the support and flexibility to make this a success, while keeping bloated apps and potential security issues down to a minimum. Regardless, it has to be more capable than the RSS-to-App alternatives.

Good job Google! Here’s hoping for a few heart-warming, garage-entrepreneur stories coming from this announcement…