Faced with a question about battery life of devices running Google's Android, Google's co-founder Larry Page said developers needed to be smarter about their applications' use of system resources, particularly when running in the background. If your phone doesn't last a day, google says to blame your third party developers.
This may expose an experience advantage of Apple in the platform-delivery business, which in the resource-constrained world of the mobile device could be a significant advantage. Apple has delivered platforms for third-party development for decades, and is fully aware how developers (ab)use system resources. Apple's strategy to allow only specific APIs to execute on behalf of a background app in iPhone OS v.4 is a design decision made on the strength of long experience that lazy developers' behavior will reflect on the platform. Apple's MacOS 9 crashed only when misbehaving apps ran; yet, who got the blame? Apple has learned something important about both the behavior of developers and about the nature of the blame game, and Apple's design decision is likely to pay off over the next few years as Apple delivers better and better hardware while making it easier and easier for developers to code non-abusive applications.
Apple's decision to craft a particular customer experience, and to expect that developers who want to reach those customers will code accordingly, has caused some irritation. At the end of the day, though, the proof will be in the pudding: do people like what Apple delivers, or perfer a competitor? The fact that Google is out there doing the same things so differently probably helps Apple in its position that users have broad choice and are not being locked into an Apple solution. There's plenty of room in the sandbox.
Thursday, May 20, 2010
Tuesday, May 18, 2010
ACAS: IPO Fever?
The Jaded Consumer recently cheered the apparently impending Mirion IPO, which presumably will be closing in short order. ACAS has been busy, though. There's more IPO in the quarter:
ACAS recently enjoyed the Roadrunner Transportation Services (Ticker:RRTS) IPO onto the NYSE at $14/share. Although American Capital entities (including managed funds) held some 1,493,138 shares amounting to a 7.3% interest in the newly-fledged public company (which would be valued at about $10.8m at IPO prices), ACAS claimed only 7,000 shares in its 1Q2010 10-Q. The 7,000 shares seemed to have a FAS-157-compliant value of $7.9m, making it apparent that some kind of share conversion or transmutation was afoot between the end of the quarter and the day the shares launched: 7,000 shares weren't any $7.9m at $14 a pop. Without specific knowledge of the split of RRTS between ACAS and its managed funds, it would be hard to ascertain the receipts that will actually flow to ACAS' bottom line. ACAS valued the debt it was owed by Roadrunner at $21m at the end of 1Q2010, and Roadrunner acknowledged about $20.5m in principal owed ACAS at the end of 2009 but discussed a deferred-interest arrangement in which RRTS would owe ACAS a deferred margin atop its periodic payments. Presmably ACAS' payoff includes all the deferrals in addition to the principal and interest. The comment from the Prospectus was: "This amount includes $20.5 million owed to American Capital, Ltd., which we intend to pay from the net proceeds of this offering." The question is what beyond the $20.5m ACAS gets in the deal. Anybody have an idea?
Now that RRTS is actually trading, it's safe to say that – press release or no – ACAS has its cash back. The next question is whether the Mirion transaction – first filed last August, and re-filed as a bigger deal twice since then – will occur as described. Give it a few days and we may know more.
As for ACAS' debt restructuring, I can't imagine that ACAS doesn't prefer to get out of its default-rate debt and into a more respectable posture from which it could go back to issuing shares above NAV. And why would Paulson have invested in a deal that his due diligence didn't assure him was about to get straightened out? And why would ACAS have parted with shares below NAV without a hard plan to turn the money into improved NAV? It's times like these that the wait until after the end of the quarter to learn what happened seems such a loooooooong time. Hopefully we get some news soon so we can stop speculating, and the market can stop fearing.
ACAS recently enjoyed the Roadrunner Transportation Services (Ticker:RRTS) IPO onto the NYSE at $14/share. Although American Capital entities (including managed funds) held some 1,493,138 shares amounting to a 7.3% interest in the newly-fledged public company (which would be valued at about $10.8m at IPO prices), ACAS claimed only 7,000 shares in its 1Q2010 10-Q. The 7,000 shares seemed to have a FAS-157-compliant value of $7.9m, making it apparent that some kind of share conversion or transmutation was afoot between the end of the quarter and the day the shares launched: 7,000 shares weren't any $7.9m at $14 a pop. Without specific knowledge of the split of RRTS between ACAS and its managed funds, it would be hard to ascertain the receipts that will actually flow to ACAS' bottom line. ACAS valued the debt it was owed by Roadrunner at $21m at the end of 1Q2010, and Roadrunner acknowledged about $20.5m in principal owed ACAS at the end of 2009 but discussed a deferred-interest arrangement in which RRTS would owe ACAS a deferred margin atop its periodic payments. Presmably ACAS' payoff includes all the deferrals in addition to the principal and interest. The comment from the Prospectus was: "This amount includes $20.5 million owed to American Capital, Ltd., which we intend to pay from the net proceeds of this offering." The question is what beyond the $20.5m ACAS gets in the deal. Anybody have an idea?
Now that RRTS is actually trading, it's safe to say that – press release or no – ACAS has its cash back. The next question is whether the Mirion transaction – first filed last August, and re-filed as a bigger deal twice since then – will occur as described. Give it a few days and we may know more.
As for ACAS' debt restructuring, I can't imagine that ACAS doesn't prefer to get out of its default-rate debt and into a more respectable posture from which it could go back to issuing shares above NAV. And why would Paulson have invested in a deal that his due diligence didn't assure him was about to get straightened out? And why would ACAS have parted with shares below NAV without a hard plan to turn the money into improved NAV? It's times like these that the wait until after the end of the quarter to learn what happened seems such a loooooooong time. Hopefully we get some news soon so we can stop speculating, and the market can stop fearing.
Saturday, May 15, 2010
ACAS: Getting Something For Nothing
At the end of last year, ACAS' equity investment in Roadrunner Transportation Systems Inc. had a FAS-157-compliant "fair value" of $0. Shares of the company are being priced from $14 to $16 in a New York Stock Exchange IPO described in a recent SEC filing (this update first provided to the Jaded Consumer by this poster). With a share count of 7,000, this doesn't amount to much for ACAS directly. However, ACAS-managed funds hold over a million shares. Turning $0 assets into hard cash has to be a worthwhile move for ACAS' fee-based asset management service business.
One wonders how many $0 assets on ACAS' books are actually top-tier exchange listings about to happen?
On the debt front, ACAS is slated to be paid $20.5million for subordinated notes which at the end of 2009 had a "fair value" of $17.5m. The 18.5% notes were current at that time. As long as the deal remains pending, ACAS will presumably continue to enjoy the 18.5% interest payable on the $20.2 face value of the notes.
The fact that $0 assets are near-IPO holdings and below-face notes turn out to be about to be repaid early makes one wonder what ACAS' portfolio holds that the street doesn't know and can't price into the shares.
In other news, ACAS' publicly-traded REIT AGNC is issuing 6m new shares at $25.75, with an additional possible 900,000 shares available to cover over-allotments. Given AGNC's end-of-quarter net assets of $22.91 per share, the sale is accretive to shareholder value: AGNC can do the same deals with the same leverage strategy, but bigger – and with more money per share for revenue generation. This is a big win, because it is not only accretive to book value, but grows AGNC by more than 50%. The transaction, which is expected to close May 19, 2010, will net AGNC approximately $147m. On ACAS' management fee of 1.25% of net assets annually, payable monthly, this means ACAS' fee income has gone up overnight by $153,000 per month in cash, or $1.8375 million per year. (Getting the exact number of shares over time requires looking at each quarterly report, because AGNC has instituted a DRIP and realizes above-book sales of newly-issued shares at each dividend payment. Last quarter, that new DRIP equity totaled $62m.) Making larger transactions on the same overhead makes good sense for ACAS, and improves the net it keeps of its gross fee income.
AGNC offers a quick overview of its business, showing how it obtains its interest rate spread and explaining how much leverage it uses to obtain its results. ACAS' ability to grow its managed funds with AGNC's issuance, DRIP, and subsequent offerings shows ACAS still has some managed-funds business capability. ACAS' 2.5m shares of AGNC ensure AGNC owners that ACAS is taking the owners' interest seriously, as well. Making a percentage from someone else's equity is great, but making huge ROE on your own equity is a thing of beauty.
Let's hope for more $0 that turns out to be valuable :)
One wonders how many $0 assets on ACAS' books are actually top-tier exchange listings about to happen?
On the debt front, ACAS is slated to be paid $20.5million for subordinated notes which at the end of 2009 had a "fair value" of $17.5m. The 18.5% notes were current at that time. As long as the deal remains pending, ACAS will presumably continue to enjoy the 18.5% interest payable on the $20.2 face value of the notes.
The fact that $0 assets are near-IPO holdings and below-face notes turn out to be about to be repaid early makes one wonder what ACAS' portfolio holds that the street doesn't know and can't price into the shares.
In other news, ACAS' publicly-traded REIT AGNC is issuing 6m new shares at $25.75, with an additional possible 900,000 shares available to cover over-allotments. Given AGNC's end-of-quarter net assets of $22.91 per share, the sale is accretive to shareholder value: AGNC can do the same deals with the same leverage strategy, but bigger – and with more money per share for revenue generation. This is a big win, because it is not only accretive to book value, but grows AGNC by more than 50%. The transaction, which is expected to close May 19, 2010, will net AGNC approximately $147m. On ACAS' management fee of 1.25% of net assets annually, payable monthly, this means ACAS' fee income has gone up overnight by $153,000 per month in cash, or $1.8375 million per year. (Getting the exact number of shares over time requires looking at each quarterly report, because AGNC has instituted a DRIP and realizes above-book sales of newly-issued shares at each dividend payment. Last quarter, that new DRIP equity totaled $62m.) Making larger transactions on the same overhead makes good sense for ACAS, and improves the net it keeps of its gross fee income.
AGNC offers a quick overview of its business, showing how it obtains its interest rate spread and explaining how much leverage it uses to obtain its results. ACAS' ability to grow its managed funds with AGNC's issuance, DRIP, and subsequent offerings shows ACAS still has some managed-funds business capability. ACAS' 2.5m shares of AGNC ensure AGNC owners that ACAS is taking the owners' interest seriously, as well. Making a percentage from someone else's equity is great, but making huge ROE on your own equity is a thing of beauty.
Let's hope for more $0 that turns out to be valuable :)
Iced Tea Report: Danton's
Danton's sits at the southeast corner of Montrose and the Southwest Freeway in the same commercial development as Main Street Theater's Montrose location. When I visited May 14, parking was tight because so many school busses full of schoolkids, dressed by color so adults could sort them back into the right busses, had descended on the place to attend an event at Main Street Theater.
First, a word about Main Street Theater: See the shows. The ticket is much cheaper than at The Alley, and you won't be "treated" to some unheard-of new Mamet production whose main child lead sounds like he's reading the ingredients from a cereal box. (This is not to trash The Alley; its production of Proof was absolutely outstanding in a way the movie – which lacks the intermission cliffhanger – was at pains to achieve. But for The Alley's price, I expect consistency. I am now quite careful only to attend what is proven in advance to be worth seeing. At Main Street Theater, you can show up and see anything you please, without fear.) I took L to Main Street Theatre's production of Oscar Wilde's wildly entertaining The Importance of Being Earnest (best bought in a collection for many more hours of enjoyment; also now both a movie and an older movie), and there is only one way to put it: they nailed it. Main Street Theater has also done outstanding work with titles you've never heard of, such as the based-on-the-true-story play The Trust (now apparently a movie) which explains – to the widening eyes of locals who had no idea the story was so fraught with intrigue – how Rice University came to be funded.
But I was meeting a client for lunch at Dalton's: to time to stop for a show. Dalton's enjoys the same comfortable booths that have characterized the place since it was a steak joint run by an opera singer back before the Montrose bridge project cut off access to the property and, over a period of grueling months, suffocated the business in an ignominious death. Like many Houston restaurant locations, it's been the scene of a production whose tradition is much older than any ever cast at The Alley or Main Street: the survival of the fittest. Dalton's succeeds a string of fore-bearers in occupancy of the northwest corner of the southeast block of the intersection.
And the Jaded Consumer is here to tell you about the iced tea service at Danton's. As seen in the
picture, Danton's serves a tall glass cylinder of tea as full of ice as drink, complete with lemon and ready for sweetening with a tea spoon and collection of sweeteners. The lemon is served on the edge of the glass so that one may – without need to fish in one's drink for the fruit slice – choose to ignore, remove, or squeeze the lemon into the tea. When the tea arrives, the sugar is already there – and present in sufficient quantities to service two refills before the need arises to request more. The refills come swiftly, and the skilled staff cares enough to honor your request not to overstuff the glass with ice as the tea is poured, so your second glass can be stirred without further intervention. That first glass, though, can't be stirred at all until you dish some ice into the water glass. Fear not, though: you have a spoon and the water is right there. All is well. Besides, you get to giggle while you do it. All is good.
Not present in the photograph was the switfness of the waitstaff. No sooner than I sat was I given water and asked for my choice of drink. Before it arrived, my waitress had introduced herself as Rebecca and also inquired after my drink preference. When the bus-boy showed with the tea, I thought it only sporting to suggest he let Rebecca know the tea had been covered already. (He never told me his name.)
The downside? The tea seems a bit overbrewed, requiring an extra sugar or two to kill the bitterness. This accomplished, it's juuust fine. Drank several of them with relish and was sad to leave the empty glass behind as I took off to my next appointment. I mean, if someone would follow the glass, refilling it and the sugar service, I would feel like a king all day.
GRADE:
A Lemon
A Tea Spoon
B- Ice (rescued from D by presence of an ice water into which to ferry extra ice by using the spoon, which was conveniently there as soon as the ice arrived; the water preceded the tea; disaster easily averted)
A Sugar
A Refills
Conclusion: the whole is better than the sum of the parts. Getting all this right is exactly what we need for an outstanding tea experience. Dalton's has serving tea figured out, and gets full marks.
Now for the main course. The restaurant seemed to be of the $$$ variety (menu can be downloaded here), with most entrées in the $20+ range and a wine list preceding all food for the first pages of the menu handed out at lunch. However, I was there to discuss documents with a potential client and needed something that would not occupy me too thoroughly. In the sandwiches section was something the restaurant called Debris, which turned out to be stewed beef on an open-faced French loaf. I ordered it with a side of grilled vegetables. The carrots in particular were excellent, but the flavor of the veggies was uniformly fine. Seasoning was mild and enjoyable. Debris was outstanding. I ate it with a knife and fork rather than fold it into a po-boy, because I was intermittently handling documents, and it was excellent. The larger parts of the beef were happily forkable and didn't require recourse to a knife; the only reason I needed a knife at all was to slice through the French loaf underneath and to get mouth-sized bites. Debris was $9.95, including one side. Outstanding.
Blues – from things I didn't recognize to near-pop titles from Creedence Clearwater – played in the background and was enjoyable while allowing conversation. Noise level was excellent, booth seat comfort was excellent, table size was ample, and service was swift and attentive. Nobody pressured me off the table when the food was gone, I was refilled until I left, the place was pleasant on the eyes. What more could you ask?
There is a weekend live-music event nearly every Sunday, with 1.5 hour sittings that include bayou blues from ancient fonts of blues who still know how to lay it down. At $30 for adults and free under 12 years, I'll need to see if the kiddos like blues music. Could be educational :-) Since the opera singer no longer runs a steak joint, the music has changed; but the quality of the experience remains high at the corner of Montrose and the Southwest Freeway.
Danton's Gulf Coast Seafood gets a very solid A on mere average. However, the whole is greater than the sum of the parts, and Danton's is an A+ on overall. Go eat there: I'm told by a local – living two blocks away – that everything else is good, too.
First, a word about Main Street Theater: See the shows. The ticket is much cheaper than at The Alley, and you won't be "treated" to some unheard-of new Mamet production whose main child lead sounds like he's reading the ingredients from a cereal box. (This is not to trash The Alley; its production of Proof was absolutely outstanding in a way the movie – which lacks the intermission cliffhanger – was at pains to achieve. But for The Alley's price, I expect consistency. I am now quite careful only to attend what is proven in advance to be worth seeing. At Main Street Theater, you can show up and see anything you please, without fear.) I took L to Main Street Theatre's production of Oscar Wilde's wildly entertaining The Importance of Being Earnest (best bought in a collection for many more hours of enjoyment; also now both a movie and an older movie), and there is only one way to put it: they nailed it. Main Street Theater has also done outstanding work with titles you've never heard of, such as the based-on-the-true-story play The Trust (now apparently a movie) which explains – to the widening eyes of locals who had no idea the story was so fraught with intrigue – how Rice University came to be funded.
But I was meeting a client for lunch at Dalton's: to time to stop for a show. Dalton's enjoys the same comfortable booths that have characterized the place since it was a steak joint run by an opera singer back before the Montrose bridge project cut off access to the property and, over a period of grueling months, suffocated the business in an ignominious death. Like many Houston restaurant locations, it's been the scene of a production whose tradition is much older than any ever cast at The Alley or Main Street: the survival of the fittest. Dalton's succeeds a string of fore-bearers in occupancy of the northwest corner of the southeast block of the intersection.
And the Jaded Consumer is here to tell you about the iced tea service at Danton's. As seen in the
picture, Danton's serves a tall glass cylinder of tea as full of ice as drink, complete with lemon and ready for sweetening with a tea spoon and collection of sweeteners. The lemon is served on the edge of the glass so that one may – without need to fish in one's drink for the fruit slice – choose to ignore, remove, or squeeze the lemon into the tea. When the tea arrives, the sugar is already there – and present in sufficient quantities to service two refills before the need arises to request more. The refills come swiftly, and the skilled staff cares enough to honor your request not to overstuff the glass with ice as the tea is poured, so your second glass can be stirred without further intervention. That first glass, though, can't be stirred at all until you dish some ice into the water glass. Fear not, though: you have a spoon and the water is right there. All is well. Besides, you get to giggle while you do it. All is good.Not present in the photograph was the switfness of the waitstaff. No sooner than I sat was I given water and asked for my choice of drink. Before it arrived, my waitress had introduced herself as Rebecca and also inquired after my drink preference. When the bus-boy showed with the tea, I thought it only sporting to suggest he let Rebecca know the tea had been covered already. (He never told me his name.)
The downside? The tea seems a bit overbrewed, requiring an extra sugar or two to kill the bitterness. This accomplished, it's juuust fine. Drank several of them with relish and was sad to leave the empty glass behind as I took off to my next appointment. I mean, if someone would follow the glass, refilling it and the sugar service, I would feel like a king all day.
GRADE:
A Lemon
A Tea Spoon
B- Ice (rescued from D by presence of an ice water into which to ferry extra ice by using the spoon, which was conveniently there as soon as the ice arrived; the water preceded the tea; disaster easily averted)
A Sugar
A Refills
Conclusion: the whole is better than the sum of the parts. Getting all this right is exactly what we need for an outstanding tea experience. Dalton's has serving tea figured out, and gets full marks.
Now for the main course. The restaurant seemed to be of the $$$ variety (menu can be downloaded here), with most entrées in the $20+ range and a wine list preceding all food for the first pages of the menu handed out at lunch. However, I was there to discuss documents with a potential client and needed something that would not occupy me too thoroughly. In the sandwiches section was something the restaurant called Debris, which turned out to be stewed beef on an open-faced French loaf. I ordered it with a side of grilled vegetables. The carrots in particular were excellent, but the flavor of the veggies was uniformly fine. Seasoning was mild and enjoyable. Debris was outstanding. I ate it with a knife and fork rather than fold it into a po-boy, because I was intermittently handling documents, and it was excellent. The larger parts of the beef were happily forkable and didn't require recourse to a knife; the only reason I needed a knife at all was to slice through the French loaf underneath and to get mouth-sized bites. Debris was $9.95, including one side. Outstanding.
Blues – from things I didn't recognize to near-pop titles from Creedence Clearwater – played in the background and was enjoyable while allowing conversation. Noise level was excellent, booth seat comfort was excellent, table size was ample, and service was swift and attentive. Nobody pressured me off the table when the food was gone, I was refilled until I left, the place was pleasant on the eyes. What more could you ask?
There is a weekend live-music event nearly every Sunday, with 1.5 hour sittings that include bayou blues from ancient fonts of blues who still know how to lay it down. At $30 for adults and free under 12 years, I'll need to see if the kiddos like blues music. Could be educational :-) Since the opera singer no longer runs a steak joint, the music has changed; but the quality of the experience remains high at the corner of Montrose and the Southwest Freeway.
Danton's Gulf Coast Seafood gets a very solid A on mere average. However, the whole is greater than the sum of the parts, and Danton's is an A+ on overall. Go eat there: I'm told by a local – living two blocks away – that everything else is good, too.
Saturday, May 8, 2010
Handheld Hegemon Update
Apple's handheld business, previously predicted to explode right here, recently posted a +131.6% annual handset unit growth in a market that grew 56.9%, causing share growth from 10.9% in Q1 of 2009 to 16.1% in Q1 of 2010. This share came at the apparent expense of RIM, whose Blackberry products' unit growth of "only" 45.2% led to a share drop from 20.9% to 19.4%. Unit growth like RIM's can't really be called "failure", but the trend suggests that Apple's operating system is on the rise and RIM's – dependent as it seems to be on high-overhead corporate server middleware licenses – is losing its shine.
HP To Face Lenovo's ARM/Flash Problems?
If the "Hurricane" tablet HP is rumored to launch this summer is really an ARM/WebOS number, how would it deliver Flash support in the face of Lenovo's ARM/Flash issues?
Hypothesis: HP will declare Flash unfit for non-Intel machines and use Apple as an illustration that non-shipment of ARM should be accepted by the market. Else, HP has Adobe working on an ARM version that is ostensibly going to be ready by HP's ship date, and is being paid to promote Flash as "the real web". It's not likely HP really believes Flash is a competitive advantage over the long run – even current Flash supporters think Adobe's Flash is not the future of the web, but is a next-18-months phenomenon.
Might HP think Flash is an advantage over the next few quarters? Since content sources haven't prepared HP-tablet-specific apps for delivering streaming content yet, HP would have to rely on HTML5 migration if it didn't deliver an acceptably-working Flash plug-in.
Hypothesis: HP will declare Flash unfit for non-Intel machines and use Apple as an illustration that non-shipment of ARM should be accepted by the market. Else, HP has Adobe working on an ARM version that is ostensibly going to be ready by HP's ship date, and is being paid to promote Flash as "the real web". It's not likely HP really believes Flash is a competitive advantage over the long run – even current Flash supporters think Adobe's Flash is not the future of the web, but is a next-18-months phenomenon.
Might HP think Flash is an advantage over the next few quarters? Since content sources haven't prepared HP-tablet-specific apps for delivering streaming content yet, HP would have to rely on HTML5 migration if it didn't deliver an acceptably-working Flash plug-in.
CBS Joins Flash Snub
Unlike ABC, which uses a custom app to provide its web site's video content to Apple's iPad users, CBS will provide all its content by delivering an HTML5 web site by next season– apparently cutting Flash out of its future video tool chain.
Web standards über alles?
Maybe Adobe's plan to offer the best HTML5 tools is the best defense of its content developer tools after all.
Web standards über alles?
Maybe Adobe's plan to offer the best HTML5 tools is the best defense of its content developer tools after all.
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