Disruption Tour --- Run To Survive

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Is Apple Planning To Buy Adobe? Posted: 03 May 2008 11:05 AM CDT Cringely thinks recetn activity by Apple -- apparently shopping around its professional editing applications business -- means that Jobs wants to buy Adobe: [from Iron Man] [...] The major point here is that Adobe is in play, or at least Apple thinks so. The company has plenty of cash and stock to do the deal and plenty of incentive, too. Apple's goal in acquiring Adobe would be to control first Flash and second Adobe's emerging Air application platform. Adobe announced this week a broad industry initiative to extend Flash to mobile devices, but Apple wasn't a participant. Why bother if you intend to shortly own Flash outright? Owning Flash and merging it with QuickTime would give Apple near-total dominance of Internet video, furthering the advantages of iTunes and shoring up in the process the iPod franchise. They'd be giving up a sports car in Final Cut Pro, but end up effectively owning the road instead. And Cringley doesn't touch on the possible future of Flash on mobile devices, which lines up with Apples iPhone plans, as well. Interesting to have an Apple outpost on 99% of the connected PCs in the world, too. Get iChat running in the Flash player, and voila, the leading IM network in the world, too.

Starbucks remembers they make coffee, step back from being music label

http://www.prefixmag.com/news/starbucks-remembers-they-make-coffee-step-back-fro/18340/

by Patrick Hipp

In a press release on their website, Starbucks has announced that they're handing over control of their Hear Me music label to Concord Music Group. Quoth the CEO, Howard Schultz: “As part of our ongoing transformation, we are committed to examining all aspects of our business that are not directly related to our core.” For those keeping score, Starbucks' "transformation" involves the company transforming back into a coffee shop, although this time without the burnt coffee. Following this move, Ken Lombard--the now former head of Starbucks Entertainment--has "has left the company to pursue other business interests." As Brooklyn Vegan points out, this announcement comes admist news that Starbucks stock is starting to stagnate with the rest of the economy, so he probably wasn't given much choice. 

Motorola’s Loss Is Apple’s Gain: That $2.1 Billion Sucking Sound Is Coming From The iPhone

from techcrunch.com

Razr anyone? Motorola can’t even give those things away anymore. The once-proud company reported horrible earnings today, with sales down 21 percent and a net loss of $194 million. But the big takeaway was the 39 percent collapse in its mobile phone business. Mobile device revenues in the quarter dropped $2.1 billion compared to last year.

Coincidentally enough, that is almost exactly how much Apple made last quarter on iPhone sales. The figure came to $2.3 billion (including lumped-in sales of Apple TVs, which likely made up less than $100 million of that total). During yesterday’s earnings call, Apple CFO Peter Oppenheimer spelled this out:

We sold 1.7 million iPhones during the March quarter . . .. Total revenue recognized during the quarter from sales of iPhone, iPhone accessories, and payments from carriers was $378 million. Total deferred revenue from iPhone and Apple TV was $1.93 billion at the end of the March quarter.

Add those together and you get $2.3 billion. That deferred revenue he is talking about is what Apple collects from its share of monthly subscription fees from AT&T and other carriers partners—an arrangement that Motorola has never been able to negotiate for its phones. So not only has the iPhone replaced Motorola-class phones as the mobile device of choice among consumers, but Apple is also replacing Motorola’s business model by tapping into that rich vein of monthly subscription fees: An arrangement, by the way, that has been as good for AT&T as it has been for Apple.

iPhone: Surfs Great, Does Calls Too

Paul Kedrosky Infectuous Greed

Posted: 18 Apr 2008 04:33 PM CDT

Fascinating data out from iSuppli on iPhone usage compared to the average phone for typical tasks. Some eye-opening differences:

The big differences? Internet use -- no surprise -- and music use, where iPhone is used much more often than other devices. On the other side, hard not to wonder if people aren't noticing that the iPhone, is you know, a phone. (I'm kidding, of course -- these are percentages, not actual time allocations, but the differences are striking.)

How Apple Got Everything Right By Doing Everything Wrong

By Leander Kahney
Wired Magazine click here for more.

One Infinite Loop, Apple's street address, is a programming in-joke — it refers to a routine that never ends. But it is also an apt description of the travails of parking at the Cupertino, California, campus. Like most things in Silicon Valley, Apple's lots are egalitarian; there are no reserved spots for managers or higher-ups. Even if you're a Porsche-driving senior executive, if you arrive after 10 am, you should be prepared to circle the lot endlessly, hunting for a space.

But there is one Mercedes that doesn't need to search for very long, and it belongs to Steve Jobs. If there's no easy-to-find spot and he's in a hurry, Jobs has been known to pull up to Apple's front entrance and park in a handicapped space. (Sometimes he takes up two spaces.) It's become a piece of Apple lore — and a running gag at the company. Employees have stuck notes under his windshield wiper: "Park Different." They have also converted the minimalist wheelchair symbol on the pavement into a Mercedes logo.

 

Morgan Stanley: 40% of college students plan to buy Macs

By AppleInsider Staff

Apple's rapidly rising mindshare amongst current generation college students is setting the company up for an "aging phenomenon" that will spur further market share and revenue growth as those students enter the work force, investment bank Morgan Stanley said Wednesday.

A recent higher-education survey cited by analyst Katy Huberty reveals that roughly 40 percent of college students say their next computer purchase will be a Mac, well ahead of Apple's current 15 percent market share in the demographic.

In the near term, this sets the Cupertino-based Mac maker up for a strong September quarter -- a three-month period that embodies the heart of the back-to-school buying season, where incoming freshmen, existing undergraduates, and universities all plunk down considerable sums of cash in order to invest in computer hardware for the coming school year.

"Longer term," Huberty said, "we see an 'aging phenomenon' that will put Apple in a more mainstream market share position as students enter the work force, much like Linux adoption in the 1998-2003 time frame."

She noted that as the Linux platform matured and developers entered the workforce, enterprise-level Linux adoption accelerated eightfold, with 16 percent of servers shipped in 2003 running flavors of the linux operating systems compared to just 2 percent five years earlier.

For Apple, which holds just shy of 3 percent worldwide share of the personal computer market, each incremental percentage point of share gain means billions, Huberty said; approximately 6 billion in yearly revenues, and a full dollar in per share earnings for investors.

The analyst maintained her Overweight rating on shares of Apple, with a $185 per-share Base Case scenario that assumes Mac unit share rises to 3.5 percent from 2.9 percent in the next 12 months, and that consumers continue to buy up into the Mac product family, providing the company with some gross margin leverage.

Huberty also outline a $225 per-share Bull Case scenario which assumes twice the operating margin expansion of her Base Case scenario for the 2008 calendar year, driven by 40 percent revenue growth from broader demand for mobile products and greater success in the international and enterprise markets.

Apple Trying To Sneak Safari Onto Windows Machines?

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techdirt.com

by Timothy Lee from the nobody-here-but-us-safaris

 

Last week, Apple apparently began distributing its Safari web browser to Windows users using the software update mechanism that comes with iTunes. This has generated a firestorm of controversy, notably from Mozilla CEO John Lilly, who says Apple's behavior undermines users' trust in the software update process. He's got a point. What Apple is doing here is a little bit sleazy. Users who opt to download iTunes aren't necessarily interested in installing or running Safari, and so making installation the default is an abuse of the relationship between Apple and its customers. On the other hand, I think it's important to make it clear that there's nothing inherently wrong with Apple using its installed base of iTunes users to help promote Safari. The issue here is that the opt-out mechanism it's chosen is somewhat misleading. Apple can fix the problem very easily by switching the default, so that Safari is unchecked until the user chooses to check it. Or, if Apple wants to be a little more aggressive, a pop-up window could require the user to make a yes or no choice on installing Safari. If the user clicks "no," the update mechanism should respect this choice and not bring it up again. The problem, in other words, is not that Apple is using the popularity of iTunes to promote another of its products. The problem is that it's not being as transparent as it could be with its users.

What to Expect from the Open iPhone

click here for more from techlogyreview.com

Freed to design software for the iPhone, programmers outside Apple plan to revolutionize the handheld.

With its easy-to-use touch screen and slick software--including Apple's iTunes--the iPhone is the darling of the cell-phone industry. And last week, Apple made an announcement that only enhances the phone's appeal. The Cupertino, CA, company unveiled a set of new features for the phone that allow it to work well with business software, including e-mail and data-synching software. And crucially, the company released the instructions for the iPhone's hardware, offering a software development kit (SDK) that lets programmers outside Apple peek inside the gadget and write their own applications for it.

Knowledge Nuggets from Steve Jobs

Fortune.com

The March 17th issue of Fortune magazine has a "Good Steve | Bad Steve" take on Steve Jobs. The Good Steve article has chewy knowledge nuggets from him on being innovative, connecting with consumers, staying focused, managing people, and hiring talented people. Good stuff.

on being innovative…
"You can't ask people what they want if it's around the next corner," says Steve Jobs, Apple's CEO and cofounder. At Apple, new-product development starts in the gut and gets hatched in rolling conversations that go something like this: What do we hate? (Our cellphones.) What do we have the technology to make? (A cellphone with a Mac inside.) What would we like to own? (You guessed it, an iPhone.) "One of the keys to Apple is that we build products that really turn us on," says Jobs.

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on connecting with consumers…
"It's not about pop culture, and it's not about fooling people, and it's not about convincing people that they want something they don't. We figure out what we want. And I think we're pretty good at having the right discipline to think through whether a lot of other people are going to want it, too. That's what we get paid to do.” [MORE]

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on staying focused…
”People think focus means saying yes to the thing you’ve go to focus on. But that’s not what it means at all. It means saying no to the 100 other good ideas that there are. You have to pick carefully.” [MORE]

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on managing people…
“We've got 25,000 people at Apple. About 10,000 of them are in the stores. And my job is to work with sort of the top 100 people, that's what I do. So when a good idea comes … part of my job is to move it around, just see what different people think, get people talking about it, argue with people about it, get ideas moving among that group of 100 people.” [MORE]

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on hiring talented people…
"When I hire somebody really senior, competence is the ante. They have to be really smart. But the real issue for me is, Are they going to fall in love with Apple? Because if they fall in love with Apple, everything else will take care of itself. They'll want to do what's best for Apple, not what's best for them.” [MORE]

And The Number 2 Music Retailer Is...

profy.com

A major tide is shifting in the music industry as the digital age slowly eats away at the number of CD sales in favor of downloadable MP3s. Today, Apple has announced that the sales figures for 2007 are in from the NPD Group, and iTunes has come in as the #2 music retailer, trailing only behind Wal-Mart.

In today's press release, Apple has revealed that more than 50 million people are now using the iTunes store of more than 6 million songs, which has sold more than 4 billion songs to date. Even more impressive are the sales for Christmas Day 2007, which Apple puts at "an incredible 20 million songs."

“We’d like to thank the over 50 million music lovers who have helped the iTunes Store reach this incredible milestone. We continue to add great new features like iTunes Movie Rentals to give our customers even more reason to love iTunes.” announced Eddy Cue, VP of iTunes.

The latest release of the iTunes software, version 7.6, has now integrated access to the service's newly launched Movie Rentals feature that allows customers to rent movies to be watched on a computer, a current iPod, an iPhone, or even on an HDTV through the use of an Apple TV device. By March, more than 1,000 movie titles should be available, including at least 100 titles in hi-def. Does Apple have it's sight set on NetFlix and Blockbuster next?

It's very impressive to see iTunes so high amongst traditional CD retailers. This goes to show how wrong industry execs were in viewing the digital age as a curse to the music industry that should be avoided. All the outrageous lawsuits against file-sharers and P2P networks still has not prevented the inevitable from happening. The success of the original Napster should have shown the RIAA in advance how customers wanted their music, and labels should have jumped to develop a legal and profitable way to provide it.

Oh well, I guess that's why the deep pockets of Steve Jobs and Apple stepped in and seized an opportunity many other were too blind to see. This is only the beginning of digital music stores rivaling CD retailers. The major success of the completely DRM-free AmazonMP3 marketplace, as well as the Zune marketplace (despite its flawed pricing structure), pretty much shows us that CDs probably won't last much longer.

Now, if only the car audio industry could catch up with the digital age and start providing more logical ways to listen to those digital files in the car, while maintaining quality. FM transmitters sound horrible most of the time, and having to control an iPod as well as the car's stereo can, at times, be too much for someone driving a car at the same time as well. Really, this is the only place I even listen to CDs anymore.