Dell's effort to become the commodity vendor for smartphone hardware hit a snag as carriers greeted it with a yawn. Although Dell's success in low-overhead production has left it consistently at the top of computer hardware unit sales volume, its commodity competition has left it trailing competitors in profit per unit. This setback in expansion beyond general-purpose computing hardware isn't Dell's first. Previously, Dell sought to expand from computer hardware to computer peripherals (like printers) and music players. Dell is a commodity vendor.
The fact that Acer has already beaten Dell to announce commodity smartphone hardware doesn't help Dell in the quest for differentiation or for freedom to price for profit.
This smartphone announcement suggests that Dell is unable to develop available concepts non-commodity hardware business.
Monday, March 23, 2009
A Cop's Cop Car
After hearing about hospitals designed without the input of those who actually take care of hospital patients, and seeing homes built by people who clearly never planned to live in them, The Jaded Consumer is happy to see someone buck the trend. Carbon Motors Corp. has designed a police cruiser with the input of thousands of police officers, to solve the myriad problems associated with the existing converted-from-family-car fleet of police vehicles.
Although they don't confess a particular price, this isn't too surprising: they don't yet have a manufacturing location, either. Presumably the police cars, which are designed to last a quarter of a million miles of police service use, will have a price tag that is designed to be appealing on a per-mile basis even if the per-unit price invites sticker shock. If the cars are safer (resisting collisions and gunfire), they may also improve non-vehicle expense profiles, not to mention morale.
Clean-burning 300HP Diesels with sub-7-sec 0-60 would be a relative novelty in a fully-equipped police car, and the ability to get in and out without adjusting a weapon belt will make it hard to work in anything else after.
Coming to a department near you in 2012, maybe.
Although they don't confess a particular price, this isn't too surprising: they don't yet have a manufacturing location, either. Presumably the police cars, which are designed to last a quarter of a million miles of police service use, will have a price tag that is designed to be appealing on a per-mile basis even if the per-unit price invites sticker shock. If the cars are safer (resisting collisions and gunfire), they may also improve non-vehicle expense profiles, not to mention morale.
Clean-burning 300HP Diesels with sub-7-sec 0-60 would be a relative novelty in a fully-equipped police car, and the ability to get in and out without adjusting a weapon belt will make it hard to work in anything else after.
Coming to a department near you in 2012, maybe.
Oversight Within Federal Offices
With President Obama's prospective Chief Performance Officer out of consideration following concerns about her own performance in making required tax payments, we're left with the question what will be done to cut the fat out of programs that the campaign trail rhetoric suggested would be eliminated as the government increased in transparency and accountability. Apparently, NASA is one place this is needed: its Inspector General reportedly acted to protect reported-on programs rather than to investigate their performance or efficiency.
But is NASA really where it's most needed? NASA's Inspector General Robert Cobb, if he's the oaf he's alleged to be, might be a source of inefficiency and prevent reduction of waste, but he's hardly in a position to save the government most of its lost money. For example, contractors who dutifully perform under cost-plus contracts may have no inefficiency in their performance, but their pre-bid decision to use traditional (costly) methods to achieve objectives may cost NASA millions a year when they decide not to implement novel but proven improvements. (One example here: after each launch, NASA used to have a contractor clean -- for re-coating -- the metal framework from which the Shuttle launches. They long used men with chisels to remove the baked-on insulating mud. When a vendor approached the contractor and demonstrated he could do the job in about a tenth of the time -- and with less damage to the structure, so reducing the need for subsequent repair costs -- using abrasives in a water jet scrubber for an order of magnitude less cost, the NASA contractor sent him packing: on a cost-plus contract, the contractor lost money by finding efficiencies. As long as they kept winning bids, they were best served by gold-plating every possible expense. I have no idea what NASA currently does to prepare these frameworks for re-use, but if they're interested I can tell them who to contact about quick, damage-free water-jet scrubbing for less than a tenth of the cost.)
On the campaign trail, McCain singled out cost-plus contracts as the bane of the Defense Department budget. There may be other problems, but the conflict of interest created by these contracts is so against the interest of the public fisc that effort should be made to contract on some other basis. Not just in DoD or NASA but government-wide.
Perhaps what we need to motivate innovation toward effective use of tax money is an increased private incentive to identify to Congress or an appropriately-empowered official office any ongoing inefficiencies costing the government unecessary funds, or routinely obtaining a substandard result -- and a more visible avenue of expression for this information. At present, individuals can bring a False Claims Act suit to restore fraudulently-taken funds to the federal piggy-bank, but there is much that is waste that isn't within the False Claims Act. Improvement in the ability of citizens to spot and stop waste may be the cheap way to bring the most eyes to the problem, and one way to do it without risking the new watchdogs will simply fall asleep at the kennel door.
But is NASA really where it's most needed? NASA's Inspector General Robert Cobb, if he's the oaf he's alleged to be, might be a source of inefficiency and prevent reduction of waste, but he's hardly in a position to save the government most of its lost money. For example, contractors who dutifully perform under cost-plus contracts may have no inefficiency in their performance, but their pre-bid decision to use traditional (costly) methods to achieve objectives may cost NASA millions a year when they decide not to implement novel but proven improvements. (One example here: after each launch, NASA used to have a contractor clean -- for re-coating -- the metal framework from which the Shuttle launches. They long used men with chisels to remove the baked-on insulating mud. When a vendor approached the contractor and demonstrated he could do the job in about a tenth of the time -- and with less damage to the structure, so reducing the need for subsequent repair costs -- using abrasives in a water jet scrubber for an order of magnitude less cost, the NASA contractor sent him packing: on a cost-plus contract, the contractor lost money by finding efficiencies. As long as they kept winning bids, they were best served by gold-plating every possible expense. I have no idea what NASA currently does to prepare these frameworks for re-use, but if they're interested I can tell them who to contact about quick, damage-free water-jet scrubbing for less than a tenth of the cost.)
On the campaign trail, McCain singled out cost-plus contracts as the bane of the Defense Department budget. There may be other problems, but the conflict of interest created by these contracts is so against the interest of the public fisc that effort should be made to contract on some other basis. Not just in DoD or NASA but government-wide.
Perhaps what we need to motivate innovation toward effective use of tax money is an increased private incentive to identify to Congress or an appropriately-empowered official office any ongoing inefficiencies costing the government unecessary funds, or routinely obtaining a substandard result -- and a more visible avenue of expression for this information. At present, individuals can bring a False Claims Act suit to restore fraudulently-taken funds to the federal piggy-bank, but there is much that is waste that isn't within the False Claims Act. Improvement in the ability of citizens to spot and stop waste may be the cheap way to bring the most eyes to the problem, and one way to do it without risking the new watchdogs will simply fall asleep at the kennel door.
Apple's iPhone Moat
This article argues that Apple is working to broaden the moat around iPhone and to ensure continuation of the rich profits deriving from that platform (the platform including all the iPhones, and also the iPod Touch, which runs the same applications and games but which doesn't make calls). The article has it right: Having taken the lead in (the unsurprisingly connected) mobile development environment and mobile application sales, Apple is working to advance its gains.
Acquisitions that enhance Apple's ability to deliver mobile tech should be paying dividends in the form of improved hardware (and perhaps software compilers), which Apple's developing platform will leverage better than rivals. Rivals aren't apparently prepared to re-allocate on the fly computation instructions from a general computing processor to a graphics-specialized processor or some other onboard coprocessor (DSP?) that might allow Apple's product to achieve user-friendly performance in the face of developing demand (either on lower-powered hardware than competitors, or under greater demand loads than competitors. The ability of Cocoa to offer this to developers, without developers needing to know low-level information about the presence or capabilities of any of the processors that will be present in a particular user's configuration, makes Apple's platform particularly attractive to developers -- they will be safe from future platform hardware development even as Apple is free to migrate hardware in the direction dictated by performance and price.
Apple's developing freedom in hardware will offer a lasting advantage over rivals whose software is tweaked for specific hardware and whose applications cannot run without the specific computation instructions supported by the particular hardware for which the application was written. Rivals will have terrible migration pains as platforms attain obsolescence (or will suffer in bake-offs as rival hardware becomes distinctly superior), whereas Apple will be largely able to sail smoothly -- with its developers' applications intact -- into whatever hardware makes the best business case for release.
Although this is hypothetically a performance advantage, it opens choices that ensure a profit advantage. If Apple doesn't get a handle on security, it'll need it!
Acquisitions that enhance Apple's ability to deliver mobile tech should be paying dividends in the form of improved hardware (and perhaps software compilers), which Apple's developing platform will leverage better than rivals. Rivals aren't apparently prepared to re-allocate on the fly computation instructions from a general computing processor to a graphics-specialized processor or some other onboard coprocessor (DSP?) that might allow Apple's product to achieve user-friendly performance in the face of developing demand (either on lower-powered hardware than competitors, or under greater demand loads than competitors. The ability of Cocoa to offer this to developers, without developers needing to know low-level information about the presence or capabilities of any of the processors that will be present in a particular user's configuration, makes Apple's platform particularly attractive to developers -- they will be safe from future platform hardware development even as Apple is free to migrate hardware in the direction dictated by performance and price.
Apple's developing freedom in hardware will offer a lasting advantage over rivals whose software is tweaked for specific hardware and whose applications cannot run without the specific computation instructions supported by the particular hardware for which the application was written. Rivals will have terrible migration pains as platforms attain obsolescence (or will suffer in bake-offs as rival hardware becomes distinctly superior), whereas Apple will be largely able to sail smoothly -- with its developers' applications intact -- into whatever hardware makes the best business case for release.
Although this is hypothetically a performance advantage, it opens choices that ensure a profit advantage. If Apple doesn't get a handle on security, it'll need it!
Tuesday, March 17, 2009
iPhone OS v. 3.0
As expected, Apple announced iPhone OS v. 3.0 today, and not hardware.
Interestingly, the new OS includes lots of new developer APIs, including APIs for in-app purchase of content, additional game levels, and -- who knows -- maybe even a cup of coffee when it notices you are standing in the store's WiFi zone.
I think the announcement -- which included free upgrades to all iPhone users (rather than a paid upgrade for those whose 24-month free-upgrade term had expired), and $9.99 for iPod Touch users (as was the prior OS upgrade) -- is an event for developers, and is designed to keep the platform improving incrementally for users. Hopefully the streamlining and performance work in Snow Leopard will result in improved behavior in the handheld space on older hardware.
On future hardware, Apple reps had no comment.
Interestingly, the new OS includes lots of new developer APIs, including APIs for in-app purchase of content, additional game levels, and -- who knows -- maybe even a cup of coffee when it notices you are standing in the store's WiFi zone.
I think the announcement -- which included free upgrades to all iPhone users (rather than a paid upgrade for those whose 24-month free-upgrade term had expired), and $9.99 for iPod Touch users (as was the prior OS upgrade) -- is an event for developers, and is designed to keep the platform improving incrementally for users. Hopefully the streamlining and performance work in Snow Leopard will result in improved behavior in the handheld space on older hardware.
On future hardware, Apple reps had no comment.
Monday, March 16, 2009
Scandalous Fund Dispersals from AIG
Recent news items about AIG bonuses have members of Congress up in arms puffing about the scandal of AIG paying ineffective execs fat bonuses for helping auger the company straight into the ground.
Before we address how silly AIG's explanations for this conduct are, I'd like to point out how silly it is to see members of Congress complaining about AIG pouring valuable funds into pointless bottomless pits like the pockets of ineffective oversight personnel. It turns out AIG's federal lobbying budget as the crisis approached included over $50,000 per day Congress was in session. Heck, as a member of Congress Obama received over $45,000 from AIG -- second only to Democratic senator Christopher Dodd.
As explained at the Huffington Post, it's worth asking what Americans have really gained in fiscal accountability or control since the recent election. Considering how seriously fundraising accountability has been taken by the current incumbent (using shared accounts to evade campign contribution limits isn't fraud?), this might not really be a surprise (not that either major party's candidate wasn't playing the same game; gamesmanship like this is apparently just business as usual on both sides).
Now, to AIG's own silliness. Claiming that the payments could not be stopped because they were required by contracts is pure idiocy. Ask Steve Jobs: breach of contract is not a criminal offense, just a business tactic. I'd like to see executives who crashed AIG try arguing to a jury of taxpayers they should receive a damages award for failure to pay a bonus to the idiots who caused the crash.
Before we address how silly AIG's explanations for this conduct are, I'd like to point out how silly it is to see members of Congress complaining about AIG pouring valuable funds into pointless bottomless pits like the pockets of ineffective oversight personnel. It turns out AIG's federal lobbying budget as the crisis approached included over $50,000 per day Congress was in session. Heck, as a member of Congress Obama received over $45,000 from AIG -- second only to Democratic senator Christopher Dodd.
As explained at the Huffington Post, it's worth asking what Americans have really gained in fiscal accountability or control since the recent election. Considering how seriously fundraising accountability has been taken by the current incumbent (using shared accounts to evade campign contribution limits isn't fraud?), this might not really be a surprise (not that either major party's candidate wasn't playing the same game; gamesmanship like this is apparently just business as usual on both sides).
Now, to AIG's own silliness. Claiming that the payments could not be stopped because they were required by contracts is pure idiocy. Ask Steve Jobs: breach of contract is not a criminal offense, just a business tactic. I'd like to see executives who crashed AIG try arguing to a jury of taxpayers they should receive a damages award for failure to pay a bonus to the idiots who caused the crash.
Sunday, March 15, 2009
One Laptop Per Child In the USA
In 2002 (after a couple years of controversy and wrangling after the issue got national press), Apple provided Maine a laptop computer for every seventh- and eighth-grader in the state's public school system -- 17,000 machines in all. Maine intended that students take the machines home for use in both school and non-school purposes. Maine's idea was to enrich all the kids' lives with a computer and to bring their families into the digital age. Although initially regarded as a stunt and subjected to national press and claims Maine had made terrible resource allocation decisions, the program has been considered enough of a success that despite the economic climate the program is expanding to include ninth-, tenth-, eleventh- and twelfth-graders.
The new program will include 30,000 machines, and will increase annual fees from $13m to $25m.
The more material impact for Apple, however, may be much more than the difference in $12m in gross revenue per year. Since delivering a Unix desktop, Apple has fought from behind to regain relevance as a computing platform since being eclipsed during the '90s by Microsoft's one-two combination of (a) the functionally acceptable graphical user interface of Windows 95 and (b) Windows NT's ability to be navigated by non-Unix administrators. The result was that by the end of the '90s, Microsoft had taken effective control of computers' desktops, browsers, and servers and had created a Microsoft monoculture in business and higher-ed software (the latter of which fed the former (due to familarity among new hires), which in turn reinforced use in the latter (because its dominance made it the most relevant platform for training future IT professionals). The answer to questions about Mac deployment was largely "why bother" and the explanation was largely that "we can afford to use Microsoft" because "we already know its products." Microsoft monocultures were both an established fact and a self-replicating phenomenon, because virtually all new IT hires had Microsoft administration experience and nothing else ... and therefore (to protect their own positions and because they knew nothing else) supported more of the same.
By establishing a desktop sweep in an entire public school system, Apple will redefine normalcy for an entire generation of the school system's graduates. After accepting Apple's UI and performance norms, these users' inertia will support rather than thwart future Mac sales. Students taking Macs to higher ed will, in turn, create demand within higher-ed for administrative expertise (fulfilled in many cases by students learning support while performing on-campus jobs, wherein future IT expertise is germinated). Apple's effort to replace all-Dell enterprise contracts with all-Apple contracts is not just a blow to steady revenue at Dell, but evidences weathering of the bulwark Microsoft built to protect its integrated software monopoly. The monopoly was Microsoft's to lose.
The recent decision to expand a contract to provide Macs to the entire student body, not only for school use but for use at home, enhances Apple's effort to unwind the effect of Microsoft's successful NT advance against Unix by creating stable and ongoing demand for Apple's products and for the expertise to operate and support them in large numbers. Expertise like this will make more Macs easier to sell, and experience creating profitable high-volume enterprise supply contracts will place Apple in a better position to make other large-scale sales. As hardware becomes more powerful at the same price point, Apple's ability to offer differentiation on the basis of Apple-owned software will enable Apple to offer profitable competition at as low a price point as Apple feels is required to achieve its purposes. Moreover, as software becomes an increasing part of Apple's revenue stream, the ability to deliver both Apple-owned solutions and Apple-vended third-party solutions will enable Apple to profit from a larger and larger user base that buys lower and lower cost hardware.
The new program will include 30,000 machines, and will increase annual fees from $13m to $25m.
The more material impact for Apple, however, may be much more than the difference in $12m in gross revenue per year. Since delivering a Unix desktop, Apple has fought from behind to regain relevance as a computing platform since being eclipsed during the '90s by Microsoft's one-two combination of (a) the functionally acceptable graphical user interface of Windows 95 and (b) Windows NT's ability to be navigated by non-Unix administrators. The result was that by the end of the '90s, Microsoft had taken effective control of computers' desktops, browsers, and servers and had created a Microsoft monoculture in business and higher-ed software (the latter of which fed the former (due to familarity among new hires), which in turn reinforced use in the latter (because its dominance made it the most relevant platform for training future IT professionals). The answer to questions about Mac deployment was largely "why bother" and the explanation was largely that "we can afford to use Microsoft" because "we already know its products." Microsoft monocultures were both an established fact and a self-replicating phenomenon, because virtually all new IT hires had Microsoft administration experience and nothing else ... and therefore (to protect their own positions and because they knew nothing else) supported more of the same.
By establishing a desktop sweep in an entire public school system, Apple will redefine normalcy for an entire generation of the school system's graduates. After accepting Apple's UI and performance norms, these users' inertia will support rather than thwart future Mac sales. Students taking Macs to higher ed will, in turn, create demand within higher-ed for administrative expertise (fulfilled in many cases by students learning support while performing on-campus jobs, wherein future IT expertise is germinated). Apple's effort to replace all-Dell enterprise contracts with all-Apple contracts is not just a blow to steady revenue at Dell, but evidences weathering of the bulwark Microsoft built to protect its integrated software monopoly. The monopoly was Microsoft's to lose.
The recent decision to expand a contract to provide Macs to the entire student body, not only for school use but for use at home, enhances Apple's effort to unwind the effect of Microsoft's successful NT advance against Unix by creating stable and ongoing demand for Apple's products and for the expertise to operate and support them in large numbers. Expertise like this will make more Macs easier to sell, and experience creating profitable high-volume enterprise supply contracts will place Apple in a better position to make other large-scale sales. As hardware becomes more powerful at the same price point, Apple's ability to offer differentiation on the basis of Apple-owned software will enable Apple to offer profitable competition at as low a price point as Apple feels is required to achieve its purposes. Moreover, as software becomes an increasing part of Apple's revenue stream, the ability to deliver both Apple-owned solutions and Apple-vended third-party solutions will enable Apple to profit from a larger and larger user base that buys lower and lower cost hardware.
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