Apple

How Amazon And Apple Show That High Profits Stop Companies From Dreaming Big

15 September 2016

From Forbes blogs:

When Amazon first introduced its own tablet, it seemed like just another me-too entrant into a hot category that Apple had pioneered. Five years later (last Saturday), Amazon.com launched a new model that takes its low-price obsession to the extreme. The latest Fire HD 8 comes with 12 hours of battery life and 200 GB of storage. Not only does it include rear and front cameras, but it also comes equipped with Alexa—the voice-controlled helper that answers questions, plays music on command, orders pizzas, and does much more. The price? A jaw-dropping $89.99 compared to Apple’s 8-inch iPads, which start at $399. So, while the overall tablet market has seen some sharp declines in recent quarters, Amazon tablet sales have surged 5,421% in 2016.

. . . .

Every respectable business school teaches at least one thing to aspiring MBAs: Prioritize investments on innovations that promise the highest returns. That is why, in each company, a watchful financial controller assesses investment opportunities and carefully allocates corporate resources. In an ideal scenario, the company sees its operating margins increase steadily with the launch of more profitable products over time. Apple is the poster child for this. The company’s stellar margins of nearly 40%, more than double Samsung’s 16.3%, have charmed investors.

. . . .

But no company operates in a vacuum. Apple’s real trouble lies in its high profitability; it has competitors which are only too happy to live on lower margins.

. . . .

A favorite maxim of Amazon’s Jeff Bezos is “Your margin is my opportunity.” Amazon built its empire selling books, CDs, and DVDs. Next came video streaming, then the Kindle, then the audiobook company, Audible. At every turn, Amazon forewent profitability. Instead, it “trained” investors to accept razor-thin margins. Adopting such a strategy, however, would also have impacts outside Amazon. It has created a precarious situation for a well-run, highly profitable firm such as Apple, whose sheer profitability severely limits what it can pursue now. And Apple is far from being an exception.

Link to the rest at Forbes blogs

Frank Ocean’s release of Blonde marks the start of a major fight in the music industry

25 August 2016

From The Verge:

It was only a matter of time.

The release of Blonde marked much more than Frank Ocean’s musical return after four years away. After satisfying his Def Jam deal with the release of Endless, Ocean released Blonde independently in a move that marks the first shot in an inevitable fight between music labels and streaming services.

The relationship between an artist and a music label has been a notoriously fraught one, but until recently, there was nowhere an artist could run to when they tired of their label besides the next label down the street. Now, in a race to get more subscribers for their streaming services, the biggest company in the world and one run by an artist have positioned themselves as a friendly alternative for musicians. Meanwhile the labels, in a bid to avoid a future they may not be able to survive, may ultimately end up on the side of some fans who want music available through every viable medium.

. . . .

This is the nightmare scenario for music labels. For years, labels have feared that as streaming services grew in power and scope, there could come a time when some artists could choose to forego working with the labels and engage directly with a streaming service to reach their fans.

Up until now this hasn’t been the case with an artist of consequence, for a few reasons. Younger artists need the structure and nurturing that a music label can provide, and established superstars have usually built up a rapport and are loyal to the group of people — most of whom work for the label — that have helped them become stars and simply choose to stay, after getting a big payday.

. . . .

But what Frank Ocean has done is different. This isn’t going independent while still using a major label for distribution, like Jay Z has done in the past. This is a complete avoidance of the traditional musical hierarchy. Ocean has a young, rabid fanbase that primarily interacts with him online; he doesn’t need to distribute physical copies of albums to thousands of stores like Adele or Taylor Swift. He is part of a small club of superstars who don’t need the label system, and who have the leverage to do deals with streaming services instead of re-signing their contracts. And that’s scary for music labels.

Link to the rest at The Verge and thanks to Will for the tip.

Music Publishing and Book Publishing, different coasts, same story.

Is an iPad still worth it for ebook lovers?

11 August 2016

From TeleRead:

When I bought my first iPad, it was $400 and changed my life.

It could go all day on a single charge. I could carry all my teaching materials—books, music, movies, everything—on one clipboard-sized device. I read on it, watched movies, played games. It truly was the ‘laptop replacement’ I always wanted—a do-it-all device that was light, beautiful and went all day on a single charge.

Now, here we are, a half-decade and change later, and…well, for the first time, I find myself wondering whether I would replace my iPad if something happened to it.

A new iPad Air 2, not even the latest model, goes for $499 CAD on Apple Canada—more, even, than the first one I bought all those years ago.

Even a new iPad Mini is almost $350. That’s a lot of money for something that, more than ever, is a want and not a need. So, what’s changed? Why is an iPad not worth it anymore? For me, there have been a few sea changes.

1) In the Cloud, you can access content everywhere. This has been the first big change. I used to carry my iPad around with me because I stored my content locally. Ten CDs worth of music, all on my one device! And now, every classroom I teach in is equipped with a laptop and SMARTboard. Teachers are not using CDs anymore. They are not using local music files ripped from a CD. All of that stuff is on YouTube now, and you can project it into the giant ‘tablet’ that’s mounted on the wall.

. . . .

3) The form factor is wrong for a book reader. When I was still doing actual work on the iPad, I liked having the full-sized screen. But now that I’m not, I’m finding the full-size tablet to be a little much for my leisure tasks. I want to read ebooks, check Facebook and look at YouTube videos while I’m lying on the couch, and that’s pretty much it. I appreciate that they have made the iPad fairly light and sleek. But I am finding, especially now that I am in the later stage of my pregnancy, that it isn’t comfortable to lie on the couch with it. It’s too cumbersome to hold it one-handed, and when I try and rest it on my lap, it slides onto my tummy and pokes. A seven-inch Android I can hold in one hand is much easier.

Link to the rest at TeleRead

Apple E-book Refunds to Begin June 21

21 June 2016

From Publishers Weekly:

The book business is about to get a summer boost. Attorneys today confirmed that $400 million in refunds due readers following the end of the Apple e-book price-fixing case will begin flowing into customer accounts on June 21—with refunds for New York Times bestsellers approaching $7 per title purchased.

Similar to the prior settlements with publishers, which were paid out in 2014, the bulk of the Apple credits will be automatically delivered directly into the accounts of consumers at major book retailers, including Amazon, Barnes & Noble, Kobo, and Apple. Consumers will receive a $6.93 credit for every purchased e-book that was a New York Times bestseller, and a $1.57 credit for other e-books. The credits can be used for “any product or service” offered by the retailer, unlike the publisher settlements, which restricted refund credits to book purchases (print or digital) only. The settlement covers books that were purchased between April 1, 2010 and May 21, 2012.

Link to the rest at Publishers Weekly

PG received his refund this morning.

Apple Addresses App Developers’ Complaints

9 June 2016

From The Wall Street Journal:

Apple Inc. wants to make its developers happier.

The company said Wednesday that it would implement a series of changes to its App Store, including allowing more apps to charge customers via subscriptions. Apple also said it would start running ads with App Store search results.

The moves address complaints from developers who have said it was difficult for smaller, independent apps to get noticed among the millions in the App Store and it was hard to support some types of apps, such as those for workplace productivity, with only a one-time upfront fee.

Previously, Apple limited subscriptions to certain categories of apps such as music-streaming services, news publications or dating services. Apple said it would now allow all apps, including games, to bill via subscriptions.

Apps with longtime subscribers would pay Apple smaller commissions. Under the standard revenue split in the App Store, Apple keeps 30% of the fee with the rest going to developers. After a customer subscribes for more than a year, the revenue split would change to 15% for Apple and 85% for the developer.

. . . .

It is essential for Apple to keep its developers happy or risk losing them to Alphabet Inc.’s Android operating system, which runs about three-fourths of the world’s smartphones. Google parent Alphabet generally offers developers the same 30%/70% split of revenue, though for the past year it has allowed developers of some subscription-based apps to keep 85% of the revenue, according to a person familiar with the matter. The company plans to offer the more-favorable rate to more developers, the person said, though it is unclear if it will become a blanket policy for all apps.

Link to the rest at The Wall Street Journal (Link may expire)

Why Can’t Apple and Google Sell More Ebooks?

8 June 2016

From Vearsa:

As a veteran of the digital publishing era (slightly depressing at my age) one question has persistently bothered me. It’s about the limited routes to market for publishers. It’s not, “why does Amazon have such market share?” That answer is pretty obvious – innovative, aggressive, admirable focus. Instead, we should be asking is: why Apple and Google (two of the biggest companies in the world) only sell somewhere in the region of 8% of book publishers’ eBooks?

. . . .

In 2007 and 2010 Apple released the iconic and genuinely groundbreaking iPhone and iPad devices. Heralding an era of unforeseen mobility and connectivity, these devices would immediately redefine personal communication and computing.

With an intense focus on quality and the customer experience, Apple has emerged as the premiere luxury brand in the world. They may produce fantastic hardware but in many ways they are selling a lifestyle, as evident in unprecedented consumer demands and queues, as well as socio-economic trends.

But the key here is that Apple has always been about selling hardware and devices that enable creativity and progress rather than content. Apple’s current mission statement starts with the line, “We believe that we’re on the face of the earth to make great products and that’s not changing.” Content is important to Apple only insofar as it helps to sell and sustain hardware.

. . . .

So for Apple, there is not a compelling, core reason to sell books. They are happy to let others sell eBooks through their app store – and gain 30% commission on sales for little effort.

. . . .

Google on the other hand is the company I expect more from. Their official, oft-quoted mantra is “Do no Evil,” but it’s mission is actually stated to be “to organize the world’s information and make it universally accessible and useful.” Google’s philosophy is a world of transparency and collaboration– open source, the collective, the universal struggle for betterment and progress. As part of that mission there are now over 1.4 billion active android devices worldwide.

Yet why does more than 1 billion devices worldwide, in all socioeconomic strata and often most dominant in emerging markets, only account for 6% of publishers’ sales typically? Unlike Apple, Google does not have a compelling reason to prefer hardware over content. They do benefit greatly from Android license fees, but they generally suck when it comes to hardware (note the poor performance of the Nexus lines of phones and tablets as well as the failed Google Glass).

In actuality, their fierce defiance on the Google Book Library project and their willingness to battle for what they believe to be the necessary accessibility of humanity to knowledge and education seems to further contradict their poor bookselling performance.

. . . .

In my time in the industry I’ve come to this somewhat depressing conclusion: Neither Apple nor Google really care about books.

What I mean is that part of Amazon’s success and dominance is predicated on Jeff Bezos’ genius, his uncanny ability to see “a bookstore as a means to world domination.” In Apple and Google’s case books are a small line item for companies focused on hardware and advertising respectively.

. . . .

Ultimately, what Amazon achieved through Kindle was to give those people who are educated and have disposable income a simple entry point to e-commerce: books. Way ahead of its time, Amazon focused on gaining market share ahead of exclusivity, prestige or a higher purpose. It wanted user’s credit card details because it believed it could build a better commerce experience and value proposition on the back of loyal customers and scale.

Apple have been focused on your point of sale dollars for hardware. Google by its very DNA doesn’t generally share this aggressive, mercurial streak.

Link to the rest at Vearsa and thanks to William for the tip.

The creators of Siri just showed off their next AI assistant, Viv

10 May 2016

From The Verge:

Dag Kittlaus and Adam Cheyer created the artificial intelligence behind Siri, Apple’s iconic digital assistant, and one of the first modern apps to capably handle natural language queries on a smartphone. Today the pair showed off their newest creation, Viv, a next generation AI assistant that they have been developing in stealth mode for the last four years. The goal was to create a better version of Siri, one that connected to a multitude of services, instead of routinely shuffling queries off to a basic web search. During a 20-minute demo onstage at Disrupt NYC, Viv flawlessly handled a dozen complex requests, not just in terms of comprehension, but by connecting with third-party merchants to purchase goods and book reservations.

The major difference between Siri and Viv is that the latter is a far more open platform. One of the biggest frustrations with Siri is that it has only a small number of tasks it can complete. For the vast multitude of requests or queries, Siri will default to a generic web search. Viv’s approach is much closer to Amazon’s Alexa or Facebook’s Messenger bots, offering the ability to connect with third-party merchants and vendors so that it can execute on requests to purchase goods or book reservations.

. . . .

The critical distinction here is between broad horizontal AI and specialized vertical AI. A service like x.ai, which shares investors with Viv, is focused on just one thing: scheduling meetings. It does this task very well, but it can’t do anything else. Siri, Alexa, Cortana, and their ilk are meant to be broad AI, able to handle a variety of different tasks. They act as the command and control bot, forwarding on queries to the appropriate bot for booking a hotel room or ordering flowers. So far Amazon and Facebook have been clear that their approach will aim to integrate with as many third-party services as possible. Siri and Google Now, on the other hand, have remained more closed off.

. . . .

At the heart of the paradigm shift from apps to bots was the concept of “conversation as a platform,” said CEO Satya Nadella. Viv epitomizes this trend. Its creators have been working on the problem of natural language comprehension for over a dozen years, starting with a DARPA-backed AI project in the early 2000s. That has led to a very nuanced and powerful system, capable of understanding and acting on queries like: “On the way to my brother’s house, I need to pick up some cheap wine that goes well with lasagna.”

“Viv is designed to be devices agnostic — think one platform, open to all services, for all devices, personalized for you. Viv’s goal is to be ubiquitous so it will understand your preferences and history as you engage with it on your mobile device, or in your car, or with your smart device at home,” said Adam Koopersmith, a partner with Pritzker Group Venture Capital, one of Viv’s investors. “Our sense is there will be a move away from having hundreds of different apps that act independently. These services will be integrated into everyday life. Viv will be the platform to enable it.”

Link to the rest at The Verge and thanks to Jan for the tip.

Apple Stole My Music. No, Seriously.

6 May 2016

From Vellum:

“The software is functioning as intended,” said Amber.

“Wait,” I asked, “so it’s supposed to delete my personal files from my internal hard drive without asking my permission?”

“Yes,” she replied.

. . . .

I had just explained to Amber that 122 GB of music files were missing from my laptop. I’d already visited the online forum, I said, and they were no help. Although several people had described problems similar to mine, they were all dismissed by condescending “gurus” who simply said that we had mislocated our files (I had the free drive space to prove that wasn’t the case) or that we must have accidentally deleted the files ourselves (we hadn’t). Amber explained that I should blow off these dismissive “solutions” offered online because Apple employees don’t officially use the forums—evidently, that honor is reserved for lost, frustrated people like me, and (at least in this case) know-it-alls who would rather believe we were incompetent, or lying, than face the ugly truth that Apple has vastly overstepped its boundaries.

What Amber explained was exactly what I’d feared: through the Apple Music subscription, which I had, Apple now deletes files from its users’ computers. When I signed up for Apple Music, iTunes evaluated my massive collection of Mp3s and WAV files, scanned Apple’s database for what it considered matches, then removed the original files from my internal hard drive. REMOVED them. Deleted. If Apple Music saw a file it didn’t recognize—which came up often, since I’m a freelance composer and have many music files that I created myself—it would then download it to Apple’s database, delete it from my hard drive, and serve it back to me when I wanted to listen, just like it would with my other music files it had deleted.

. . . .

1. If Apple serves me my music, that means that when I don’t have wifi access, I can’t listen to it. When I say “my music,” I don’t just mean the music that, over twenty years (since before iTunes existed), I painstakingly imported from thousands of CDs and saved to my computer’s internal hard drive. I also mean original music that I recorded and saved to my computer. Apple and wifi access now decide if I can hear it, and where, and when.

2. What Apple considers a “match” often isn’t. That rare, early version of Fountains of Wayne’s “I’ll Do The Driving,” labeled as such? Still had its same label, but was instead replaced by the later-released, more widely available version of the song. The piano demo of “Sister Jack” that I downloaded directly from Spoon’s website ten years ago? Replaced with the alternate, more common demo version of the song. What this means, then, is that Apple is engineering a future in which rare, or varying, mixes and versions of songs won’t exist unless Apple decides they do. Said alternate versions will be replaced by the most mainstream version, despite their original, at-one-time correct, titles, labels, and file contents.

3. Although I could click the little cloud icon next to each song title and “get it back” from Apple, their servers aren’t fast enough to make it an easy task. It would take around thirty hours to get my music back. And even then…

4. Should I choose to reclaim my songs via download, the files I would get back would not necessarily be the same as my original files. As a freelance composer, I save WAV files of my own compositions rather than Mp3s. WAV files have about ten times the number of samples, so they just sound better. Since Apple Music does not support WAV files, as they stole my compositions and stored them in their servers, they also converted them to Mp3s or AACs. So not only do I need to keep paying Apple Music just to access my own files, but I have to hear an inferior version of each recording instead of the one I created.

. . . .

If you’re wondering why Apple hasn’t been sued yet, it’s because the iTunes Terms of Use vaguely warn of this issue, then later indemnify Apple and preclude any litigation from users who’ve been boned.

. . . .

I recovered my original music files only by using a backup I made weeks earlier. Many people don’t back up as often as they should, though, so this isn’t always an option. Amber relayed to me that she’s had to suffer through many calls from people who cancelled their Apple Music subscription after the free, three-month trial, only to discover that all of their own music files had been deleted and there was no way to get them back.

So my files were temporarily restored; but the only way to prevent this from happening over and over, according to Amber, was to cancel my subscription to Apple Music (which she herself doesn’t use due to the above-listed reasons) and to make sure my iCloud settings did not include storing any music backups.

. . . .

[E]ven in my most Orwellian paranoia I never could have dreamed that the content holders, like Apple, would also reach into your computer and take away what you already owned. If Taxi Driver is on Netflix, Netflix doesn’t come to your house and steal your Taxi Driver DVD. But that’s where we’re headed. When it comes to music, Apple is already there.

Link to the rest at Vellum and thanks to Niki, who says its lessons may apply to authors who save material to clouds, for the tip.

PG has been dealing with computer files for a long time and experience losing important files has lead him to believe that you can never have too many backups. On more than one occasion, PG has lost a file and discovered that his primary backup system didn’t have the file (or the latest version of the file) either. A secondary backup system has saved him.

Cloud backups are great with the right cloud services provider (PG patronizes a couple of different clouds in case one has problems). Backups on external hard drives sitting next to your computer are great and backups on external hard drives that spend most of their time far away from your computer are great.

Yes, this costs more money than not having any backups, but the costs involved in reconstructing even a single important file are much higher than expenses of several years of backup services.

iBooks and iTunes Shut Down in China

22 April 2016

From The New York Times:

For years, there has been a limit to the success of American technology companies in China. Capture too much market share or wield too much influence, and Beijing will push back.

Apple has largely been an exception to that trend. Yet the Silicon Valley company is now facing a regulatory push against its services in China that could signal its good relations in the country may be turning.

Last week, Apple’s iBooks Store and iTunes Movies were shut down in China, just six months after they were started there. Initially, Apple apparently had the government’s approval to introduce the services. But then a regulator, the State Administration of Press, Publication, Radio, Film and Television, asserted its authority and demanded the closings, according to two people who spoke on the condition of anonymity.

“We hope to make books and movies available again to our customers in China as soon as possible,” an Apple spokeswoman said in a statement.

. . . .

To a degree more than many tech companies, Apple relies on the smooth operation of its software — including its App Store and services like iTunes, which are tightly integrated with the iPhone and iPad — to keep customers coming back to its devices. Apple, which is facing a slowdown in sales of its iPhones, is also reliant on China for growth, so further moves by Beijing to curtail services could crimp sales.

The company counts China as its second-largest market after the United States. Its China numbers will be dissected on Tuesday, when it reports quarterly earnings.

China’s pushback against Apple shows that the company may finally be vulnerable to the heightened scrutiny that other American tech companies have faced in recent years. That scrutiny was spurred by revelations from the former United States National Security Agency contractor Edward J. Snowden in 2013 of the use of American companies to conduct cyberespionage for Washington.

Link to the rest at The New York Times

Content + curation + community = a new Apple Books

29 March 2016

From The Bookseller:

Apple is missing the boat on e-books.

And there’s billions of dollars at stake.

. . . .

If you’re buying an e-book, there’s only one place to go: Amazon. It’s not because of discovery; it’s mindshare. Most books aren’t discovered on Amazon – just bought there. Opportunity.But it’s easy to forget how deeply Amazon has burrowed into the online book world. Most Facebook shares or book reviews link to Amazon. Amazon results dominate bookish web searches. Goodreads is the online books community.

Conversely, iBooks is little more than a reader app and a buy link, with no community to speak of. Consider Gates of Fire by Steven Pressfield (one of my favorites): Amazon/Goodreads have 2,600 reviews of the book, Apple has seven. A Google Search for “Gates of Fire” has Amazon 1st, Goodreads 4th, and Apple on page four – essentially invisible! The iBooks web experience is an ugly mess.

It’s instructive to look at Apple’s response when threatened by Spotify. Apple launched a major initiative, Apple Music. It was a “Manhattan Project” with internal and external components:  Apple acquired Beats for $3B and re-invented its music experience as Subscription + Curation + Beats 1 Radio. Connect, a centralised artist blog platform, was another unique addition. The result generates at least $1B annually.

Link to the rest at The Bookseller

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