Quotulatiousness

September 9, 2016

Apple may learn the lesson of “option value” with the latest iPhone release

Filed under: Business, Economics, Technology — Tags: , , — Nicholas @ 03:00

Megan McArdle explains why some Apple fans are not overjoyed at the latest iPhones:

You’ve probably been thinking to yourself, “Gee, I wish I couldn’t charge my phone while also listening to music.” Or perhaps, “Gosh, if only my headphones were more expensive, easier to lose and required frequent charging.” If so, you’re in luck. Apple’s newest iPhone, unveiled on Wednesday, lacks the familiar 3.5-millimeter headphone jack. You can listen to music through the same lightning jack that you charge the phone with, or you can shell out for wireless headphones. The internets have been … unpleased with this news.

To be fair, there are design reasons for doing this. As David Pogue writes, the old-fashioned jack is an ancient piece of technology. It’s been around for more than 50 years. “As a result,” says Pogue, “it’s bulky — and in a phone, bulk = death.”

Getting rid of this ancient titan will make for a thinner phone or leave room for a bigger battery. Taking a hole out of the phone also makes it easier to waterproof. And getting rid of the jack removes a possible point of failure, since friction isn’t good for parts.

For people who place a high value on a thin phone, this is probably a good move; they’ll switch to wireless earbuds or use the lightning jack. But there are those of us who have never dropped our phones in the sink. We replace our iPhones when the battery dies, an event that tends to occur long before the headphone jack breaks. There are people in the world who take their phones on long trips, requiring them to charge them while making work calls, and they won’t want to fumble around for splitters or adapters. Some of us do not care whether our phone is merely fashionably slender or outright anorexic. For these groups, Apple’s move represents a trivial gain for a large loss: the vital commodity that economists call option value.

Option value is basically what it sounds like. The option to do something is worth having, even if you never actually do it. That’s because it increases the range of possibility, and some of those possibilities may be better than your current alternatives. My favorite example of option value is the famous economist who told me that he had tried to argue his wife into always ordering an extra entree, one they hadn’t tried before, when they got Chinese takeout. Sure, that extra entree cost them money. And sure, they might not like it. But that entree had option value embedded in it: they might discover that they like the new entree even better than the things they usually ordered, and thereby move the whole family up to a higher valued use of their Chinese food dollars.

May 9, 2016

Coming all-too-soon: your own data as a (paid) service

Filed under: Business, Media, Technology — Tags: , — Nicholas @ 02:00

James Pinkstone talks about the time he discovered that Apple Music had helpfully deleted over 100 Gb of his music files on his local hard drive:

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.

This led to four immediate problems:

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.

I didn’t sign up for the free Apple Music trial when it was introduced because I have a data cap on my internet connection: just a few hours of listening to my own music might well make a big dent in my internet usage for the month. That would be ridiculously wasteful. Even so, every now and again, iTunes cheerfully lets me know that this or that song from my collection can no longer be played (and has deleted it) with no chance to fix it on my part. When it’s a song I recorded from the original CD (and I still have the CD), it’s merely an inconvenience. When it’s a song I paid Apple to download, it’s much more than that. It implies that everything I’ve downloaded from Apple is actually just a rental with an indeterminate-length rental period.

It is, however, a sign of the future:

For about ten years, I’ve been warning people, “hang onto your media. One day, you won’t buy a movie. You’ll buy the right to watch a movie, and that movie will be served to you. If the companies serving the movie don’t want you to see it, or they want to change something, they will have the power to do so. They can alter history, and they can make you keep paying for things that you formerly could have bought. Information will be a utility rather than a possession. Even information that you yourself have created will require unending, recurring payments just to access.”

When giving the above warning, however, even 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.

March 29, 2016

Why did Apple suddenly grow a pair over consumer privacy and (some) civil rights?

Filed under: Business, Technology, USA — Tags: , , , , , — Nicholas @ 03:00

Charles Stross has a theory:

A lot of people are watching the spectacle of Apple vs. the FBI and the Homeland Security Theatre and rubbing their eyes, wondering why Apple (in the person of CEO Tim Cook) is suddenly the knight in shining armour on the side of consumer privacy and civil rights. Apple, after all, is a goliath-sized corporate behemoth with the second largest market cap in US stock market history — what’s in it for them?

As is always the case, to understand why Apple has become so fanatical about customer privacy over the past five years that they’re taking on the US government, you need to follow the money.

[…]

Apple see their long term future as including a global secure payments infrastructure that takes over the role of Visa and Mastercard’s networks — and ultimately of spawning a retail banking subsidiary to provide financial services directly, backed by some of their cash stockpile.

The FBI thought they were asking for a way to unlock a mobile phone, because the FBI is myopically focussed on past criminal investigations, not the future of the technology industry, and the FBI did not understand that they were actually asking for a way to tracelessly unlock and mess with every ATM and credit card on the planet circa 2030 (if not via Apple, then via the other phone OSs, once the festering security fleapit that is Android wakes up and smells the money).

If the FBI get what they want, then the back door will be installed and the next-generation payments infrastructure will be just as prone to fraud as the last-generation card infrastructure, with its card skimmers and identity theft.

And this is why Tim Cook is willing to go to the mattresses with the US department of justice over iOS security: if nobody trusts their iPhone, nobody will be willing to trust the next-generation Apple Bank, and Apple is going to lose their best option for securing their cash pile as it climbs towards the stratosphere.

March 20, 2016

Apple software engineers threaten to quit rather than crack encryption for the government

Filed under: Business, Government, Liberty, Technology, USA — Tags: , , , , — Nicholas @ 02:00

It’s only a rumour rather than a definite stand, but it is a hopeful one for civil liberties:

The spirit of anarchy and anti-establishment still runs strong at Apple. Rather than comply with the government’s requests to develop a so-called “GovtOS” to unlock the iPhone 5c of San Bernardino shooter Syed Rizwan Farook, The New York Times‘ half-dozen sources say that some software engineers may quit instead. “It’s an independent culture and a rebellious one,” former Apple engineering manager Jean-Louis Gassée tells NYT. “If the government tries to compel testimony or action from these engineers, good luck with that.”

Former senior product manager for Apple’s security and privacy division Window Snyder agrees. “If someone attempts to force them to work on something that’s outside their personal values, they can expect to find a position that’s a better fit somewhere else.”

In another instance of Apple’s company culture clashing with what the federal government demands, the development teams are apparently relatively siloed off from one another. It isn’t until a product gets closer to release that disparate teams like hardware and software engineers come together for finalizing a given gizmo. NYT notes that the team of six to 10 engineers needed to develop the back door doesn’t currently exist and that forcing any sort of collaboration would be incredibly difficult, again, due to how Apple works internally.

March 30, 2015

Apple’s cultural significance, as illustrated by reactions to the Apple Watch

Filed under: Business, Media, Technology — Tags: , , , — Nicholas @ 04:00

James Lileks points out that Apple does not get the media attention for being innovative (at least, not just for innovations):

What’s that, you say? You don’t want an Apple Watch?

Let’s talk about that.

People seem obliged to offer substantial, reasoned arguments why they don’t want one — and that seems proof that Apple’s cultural position is enormous. I mean, imagine it’s 1956, and Kelvinator just brought out the new Fido-Matic Fridge that automatically extrudes moist dog food into a bowl at preset intervals. The press wouldn’t say boo. The Today show wouldn’t do a live report from people queued up at the Kelvinator store. There wouldn’t be bitter battles in the letters-to-the-editor section about Kelvinator fanboys falling for the latest gimmick, and besides Frigidaire did that last year.

But Apple invents something, and the world is riven into two camps. Those who desire, and those who decline. The former group is regarded with less interest than the latter, since those who want the Watch are assumed to be devotees of Apple who would pay $199 for a white plastic brick used to prop open doors.

The people who don’t want them — ah, they’re the ones who make for good copy. They’re the rebels now. If I were a New York Times editor, the day the Watch was released I’d run a lifestyle-section story about men in Brooklyn with carefully curated beards who repair 1950s watches, and how this attention to the craft — nay, the art — of timepieces stands as a Contrast, and perhaps a Rebuke, to the overcomplicated Watch the sheep are lining up to get.

“It’s just an honest thing,” the watch-repair guy (Josh, I’m guessing) would say. “You hold it to your ear, you hear it tick. It manifests time in a real way. The delicacy of the movement — it’s almost intimate, to have a machine on your wrist with such precise detail, devoted to just one thing. The time.”

Yeah yeah. Go have a sarsaparilla, hipster. Look: You don’t want an Apple Watch, you don’t. But reject it for the right reasons — and that’s not because it’s another screen that takes you away from dealing with humanity, because that’s not what it is.

March 7, 2015

Browser cosplay day

Filed under: Humour, Media, Technology — Tags: , , , — Nicholas @ 02:00

Joey deVilla posted an image which requires no further explanation:

browser-cosplay

January 15, 2015

Why the EFF can’t do an iPhone version of their mobile app

Filed under: Business, Law, Liberty, Media, Technology — Tags: , , — Nicholas @ 04:00

Last week, the Electronic Frontier Foundation‘s Corynne McSherry had to break the sad news to Apple iPhone users that due to Apple’s incredibly restrictive developer rules, the EFF cannot produce an iPhone version of their mobile app:

As we have been saying for years now, the [Apple] Developer Agreement is bad for developers and users alike. Here are a few of the terms that we are worried about:

Ban on Public Statements: Section 10.4 prohibits developers from making any “public statements” about the terms of the Agreement. This is particularly strange, since the Agreement itself is not “Apple Confidential Information” as defined in Section 10.1. So the terms are not confidential, but developers are contractually forbidden from speaking “publicly” about them.

Ban on Reverse Engineering: Section 2.6 prohibits any reverse engineering (including the kinds of reverse engineering for interoperability that courts have recognized as a fair use under copyright law), as well as anything that would “enable others” to reverse engineer, the software development kit (SDK) or iPhone OS.

App Store Only: Section 7.3 makes it clear that any applications developed using Apple’s SDK may only be publicly distributed through the App Store, and that Apple can reject an app for any reason, even if it meets all the formal requirements disclosed by Apple. So if you use the SDK and your app is rejected by Apple, you’re prohibited from distributing it through competing app stores like Cydia.

No Tinkering with Any Apple Products: Section 3.2(e) is the “ban on jailbreaking” provision that appears to prohibit developers from tinkering with any Apple software or technology, not just the iPhone, or “enabling others to do so.”

Apple Owns Your Security: Section 6.1 explains that Apple has to approve any bug fixes or security releases. If Apple does not approve such updates very quickly, this requirement could put many people in jeopardy.

Kill Your App Any Time: Section 8 makes it clear that Apple can “revoke the digital certificate of any of Your Applications at any time.” Steve Jobs once confirmed that Apple can remotely disable apps, even after they have been installed by users. This contract provision would appear to allow that.

We have some other concerns as well, but these top the list.

December 12, 2014

QotD: Apple isn’t worth the same as Switzerland

Filed under: Business, Economics, Quotations — Tags: , , , — Nicholas @ 00:01

It is true that Switzerland’s GDP is around $700 billion. But GDP is a measure of value added in a country in one year. That is, it’s the income of the place. Apple’s $700 billion valuation is the total value of the company: this is akin to wealth, not income. And of course the value of a stock is the net present value of all of the future income from it. So, that $700 billion for Apple is the current value (as the market estimates it) of everything that Apple will ever do in the future. The valuation of Switzerland, that $700 billion, is what the place made this year alone. Two very different numbers.

To get to something comparable for Apple we need to work out this year’s added value. A rough and ready definition of that is profits plus wages paid (this is approximately equal to the labour and profit shares in GDP which don’t quite equal total GDP but good enough for rough comparisons). Apple’s profits are around $40 billion, it employs a little under 100,000 people directly. Say each of those is paid $100,000 a year (obviously, some get very much more but when we add in the Genius Bar folks that might be reasonable enough as an average) which gives us another $10 billion. Not entirely accurate but reasonable enough to say that Apple’s value add, the equivalent of GDP, is some $50 billion.

When we go looking for a country at around that we find The Sudan and Luxembourg jointly on some $55 billion. And Luxembourg is some 400,000 people, and roughly half of the people in a country work (take out the kiddies, pensioners, housewives etc, roughly correct) giving us a Luxembourgois workforce of 200,000 people. 100,000 people in one of the most profitable companies on the planet produce about the same value as 200,000 rich world people in a country. OK, that’s impressive for Apple but it’s a much better indication of the company’s economic size than any other measure. It is, around and about, fair to say that Apple produces the same economic value as Luxembourg. […]

And to repeat the point at the top, we’re never going to really understand corporate power or the size of the corporate sector (or corporations) until we start to understand what these different numbers being bandied about as valuations and value of production etc really mean. Corporations really are very much smaller than countries: even the largest and most valuable of corporations is really only comparable to a city sized country. To give you a much better idea of the size of Apple relative to economic output of an area then Apple’s about the size of Raleigh, North Carolina, Omaha Nebraska, maybe, just maybe as large as Forth Worth, Texas, or Charlotte, North Carolina. Somewhere in that range at least. Or to use States, perhaps around Rhode Island or Maine.

Corporations just aren’t as large and economically powerful as some seem to think.

Tim Worstall, “Apple Isn’t Worth Switzerland But It Is Worth All The World’s Airlines”, Forbes, 2014-11-22.

November 12, 2014

An honest, unbiased review of the iPhone 6+ by a guy who owns Apple stock

Filed under: Humour, Technology — Tags: , , , — Nicholas @ 00:02

Scott Adams relates his quasi-religious experience with the latest iPhone:

The experience of getting the iPhone 6 Plus was like getting a puppy. From my first touch of the sleek, sexy miracle of technology I was hooked. I loved it before I even charged it up.

It was large in my hand, and slippery to hold, but I didn’t mind. That would be like complaining that my newborn baby was too heavy. This phone is pure art and emotion frozen in a design genius so subtle that competitors probably can’t even duplicate it. It was pure beauty. Sometimes I found myself just staring at it on the desk because I loved it so. Oh, and it works well too.

But I needed a case. I tried to imagine my anguish if I accidentally dropped this new member of my family and cracked it. I needed protection.

So I went to the Verizon store and bought the only cover they had left that doesn’t look like a six-year old girl’s bedroom wall. The color of my new case could best be described as Colonoscopy Brown. It is deeply disturbing. But because I love my iPhone 6 Plus, and want to keep it safe, I put it on.

Now my phone is not so much a marvel of modern design. Nor would I say it is nourishing my soul with beauty and truth the way it did when naked.

Now it just looks like a Picasso that three hundred homeless people pooped on. You know there’s something good under there but it is hard to care. Now when I see my hideous phone on my desk I sometimes think I can hear Siri beg me “Look away! Look away!”

[…]

Beauty needs to be temporary to be appreciated. I think those magnificent bastards at Apple know that. I think they made the case slippery by design. They want you to know that if you keep your phone selfishly naked, and try to hoard the beauty that is designed to be temporary, that phone will respond by slipping out of your hand and flying to its crackly death on a sidewalk.

November 6, 2014

Apple is working really hard to keep their customers

Filed under: Business, Technology — Tags: , , — Nicholas @ 00:03

… but not necessarily in a good way:

Here is what they never tell you — Apple has devised a very clever way to make leaving the iOS world really, really painful. Specifically, when you send a text message on an iPhone, unless you fiddled with the default settings, it gets sent through iMessage and the Apple servers. If it is going to another iPhone, it can actually bypass the carrier text messaging system altogether, a nice perk back when texts were not unlimited but useful today mainly for international travel.

But here is the rub — when you switch you phone line away from an iPhone to an Android device, the Apple servers refuse to recognize this. They will think you still have an iPhone and will still try to send you messages via the iMessage servers. What this means in practice is that you can send messages from the new phone to other iPhones, but their texts back to you will not reach you. They just sort of disappear into the ether, and will try forever to be delivered to your now non-existent iPhone.

September 20, 2014

Can you trust Apple’s new commitment to your privacy?

Filed under: Business, Technology — Tags: , , , — Nicholas @ 12:32

David Akin posted a list of questions posed by John Gilmore, challenging the Apple iOS8 cryptography promises:

Gilmore considered what Apple said and considered how Apple creates its software — a closed, secret, proprietary method — and what coders like him know about the code that Apple says protects our privacy — pretty much nothing — and then wrote the following for distribution on Dave Farber‘s Interesting People listserv. I’m pretty sure neither Farber nor Gilmore will begrudge me reproducing it.

    And why do we believe [Apple]?

    • Because we can read the source code and the protocol descriptions ourselves, and determine just how secure they are?
    • Because they’re a big company and big companies never lie?
    • Because they’ve implemented it in proprietary binary software, and proprietary crypto is always stronger than the company claims it to be?
    • Because they can’t covertly send your device updated software that would change all these promises, for a targeted individual, or on a mass basis?
    • Because you will never agree to upgrade the software on your device, ever, no matter how often they send you updates?
    • Because this first release of their encryption software has no security bugs, so you will never need to upgrade it to retain your privacy?
    • Because if a future update INSERTS privacy or security bugs, we will surely be able to distinguish these updates from future updates that FIX privacy or security bugs?
    • Because if they change their mind and decide to lessen our privacy for their convenience, or by secret government edict, they will be sure to let us know?
    • Because they have worked hard for years to prevent you from upgrading the software that runs on their devices so that YOU can choose it and control it instead of them?
    • Because the US export control bureacracy would never try to stop Apple from selling secure mass market proprietary encryption products across the border?
    • Because the countries that wouldn’t let Blackberry sell phones that communicate securely with your own corporate servers, will of course let Apple sell whatever high security non-tappable devices it wants to?
    • Because we’re apple fanboys and the company can do no wrong?
    • Because they want to help the terrorists win?
    • Because NSA made them mad once, therefore they are on the side of the public against NSA?
    • Because it’s always better to wiretap people after you convince them that they are perfectly secure, so they’ll spill all their best secrets?

    There must be some other reason, I’m just having trouble thinking of it.

March 30, 2014

In which Tim Worstall admits that Karl Marx was right

Filed under: Business, Economics, Law — Tags: , , , , — Nicholas @ 10:37

Well, right in this particular analysis, anyway:

Which is where we can bring Karl Marx into the discussion. Wrong as he was on many points he was at times a perceptive analyst. And he noted that what determined the wages of the workers wasn’t some calculation of a “fair wage”, nor some true value of their production (although he had much to say on both points), but in a market economy the wages that were paid were a reflection of what other people were willing to pay for access to that labour.

If, for example, there were a large number of unemployed (that “reserve army of the unemployed”) then a capitalist didn’t have to raise the wages of his workers however far productivity grew. If anyone tried to capture a bit more of the value being created, say through a strike or other activity, then the capitalist could simply fire them and bring in some of those unemployed. No profits needed to be shared with the workers. However, when we get to a situation of full employment then the dynamic changes. It’s not possible to simply hire and fire to keep wages low. For the other capitalists are competing for access to that labour that makes those profits. The higher profits go the higher all capitalists will be willing to bid up wages to continue making some profit at all.

The obverse of this is if the employers collude in order to artificially suppress the wages of the workers which is why that case involving Apple, Google and so on is going to trial. That’s monopoly capitalism that is and we really don’t like it at all.

But in this case with Yahoo trying to challenge Google’s YouTube, it will be the workers who benefit. For the two companies are vying with each other for access to the content being made and thus the profits that can be made. Of whatever revenue can be made a larger portion will go to the producers of the content and a smaller one to the owners of the platforms. Which is excellent, this is exactly what we want to happen.

January 12, 2014

Obscure old German book from 1925 becomes surprise e-book hit

Filed under: Books, Europe, History, Media, Politics — Tags: , , , , — Nicholas @ 00:01

Dust jacket of 1926–1927 edition

Dust jacket of 1926–1927 edition

Sales of printed copies of Mein Kampf have been declining for years, but the e-book version is disturbingly popular:

Adolf Hitler’s Mein Kampf has quietly become an e-book bestseller, climbing high on the charts of political books on Apple’s iTunes and Amazon’s Kindle, even as print sales of the 1925 anti-Semitic screed continue to languish.

Mein Kampf hasn’t made the New York Times‘ nonfiction chart since its U.S. release in 1939, the same year Germany invaded Poland, and its print sales have fallen steadily ever since,” Chris Faraone wrote for the website Vocativ. “But with a flood of new e-book editions, Hitler’s notorious memoir just clocked a banner digital year.”

Two different digital versions of Mein Kampf currently rank third and fourth on the Politics & Current Events on iBooks, outpacing books by modern-day conservative pundits and celebrities such as Sarah Palin, Charles Krauthammer and Glenn Beck. The books sell for 99 cents and $2.99 respectively.

On Amazon, the Kindle version of Mein Kampf ranks No. 1 in the category of Propaganda and Political Philosophy.

Odd how the LA Times‘ instinct is to compare the sales of Mein Kampf with books by American conservatives, rather than works by, say, Marx, Mao, or Mussolini. You know, comparable theorists of totalitarian power (oh, wait…that is how the Times views Palin, Krauthammer, and Beck).

In a post from 2010, Reason TV looks at the power of Nazi Propaganda:

From radio and film to newspapers and publishing, the Nazi regime controlled every aspect of German culture from 1933-1945. Through Josef Goebbels’ Ministry of Public Enlightenment and Propaganda, the German state tightly controlled political messaging, promoting deification of the leader—the Führerprinzip—and the demonization of the ubiquitous and duplicitious “racial enemy.” A new exhibit at the United States Holocaust Memorial Museum in Washington, D.C., examines “how the Nazi Party used modern techniques as well as new technologies and carefully crafted messages to sway millions with its vision for a new Germany.” Reason.tv’s Michael C. Moynihan visited with museum historian and curator Steve Luckert to discuss the role and effectiveness of propaganda in the rise of fascism and what lessons can be drawn from the Nazi experiment in mass manipulation.

January 8, 2014

“Silicon Valley was … collateral damage in the war on terror”

Filed under: Government, Liberty, Media, Technology, USA — Tags: , , , , , — Nicholas @ 08:40

In Wired, Steven Levy explains how the NSA nearly killed the internet:

On June 6, 2013, Washington Post reporters called the communications depart­ments of Apple, Facebook, Google, Yahoo, and other Internet companies. The day before, a report in the British newspaper The Guardian had shocked Americans with evidence that the telecommunications giant Verizon had voluntarily handed a database of every call made on its network to the National Security Agency. The piece was by reporter Glenn Greenwald, and the information came from Edward Snowden, a 29-year-old IT consultant who had left the US with hundreds of thousands of documents detailing the NSA’s secret procedures.

Greenwald was the first but not the only journalist that Snowden reached out to. The Post’s Barton Gellman had also connected with him. Now, collaborating with documentary filmmaker and Snowden confidante Laura Poitras, he was going to extend the story to Silicon Valley. Gellman wanted to be the first to expose a top-secret NSA program called Prism. Snowden’s files indicated that some of the biggest companies on the web had granted the NSA and FBI direct access to their servers, giving the agencies the ability to grab a person’s audio, video, photos, emails, and documents. The government urged Gellman not to identify the firms involved, but Gellman thought it was important. “Naming those companies is what would make it real to Americans,” he says. Now a team of Post reporters was reaching out to those companies for comment.

It would be the start of a chain reaction that threatened the foundations of the industry. The subject would dominate headlines for months and become the prime topic of conversation in tech circles. For years, the tech companies’ key policy issue had been negotiating the delicate balance between maintaining customers’ privacy and providing them benefits based on their personal data. It was new and contro­versial territory, sometimes eclipsing the substance of current law, but over time the companies had achieved a rough equilibrium that allowed them to push forward. The instant those phone calls from reporters came in, that balance was destabilized, as the tech world found itself ensnared in a fight far bigger than the ones involving oversharing on Facebook or ads on Gmail. Over the coming months, they would find themselves at war with their own government, in a fight for the very future of the Internet.

December 4, 2013

Apple iPhone pricing in different markets

Filed under: Economics, Technology — Tags: , , , — Nicholas @ 08:06

In Forbes, Tim Worstall explains a misunderstanding of Ricardo’s Iron Law of One Price on the part of the Guardian:

This is a fun little bit of data calculation and visualisation. It’s a database and then mapping of the global price list for Apple’s iPhone 5s. And there are two interesting ways of using it. The first is simply to look at how prices differ around the world:

iPhone price mapYou can do this in USD or GBP as you wish. And this can be used to explore the violations of Ricardo’s Iron Law of One Price. Which is where David Ricardo insisted that the prices of traded goods would inevitably move to being equal all over the world. Well, equal minus the transport costs of getting them around the world. And transport costs for an iPhone are trivial: it would be amazing if Apple were paying more than a couple of dollars to airfreight one to anywhere at all. So, we would expect prices to be the same everywhere: but they obviously are not.

[…]

However, when The Guardian reports on this something appears to go wrong. Not their fault I suppose, it’s about economics and lefties never really do get that subject. But here:

    Similar to the way the Economist tracks the cost of the ubiquitous McDonalds burger across countries, nations and states, Mobile Unlocked tracked the price of the iPhone 5S across 47 countries in native currencies with native sales tax, and then converted those prices into US dollars (USD) or British pounds (GBP).

No … the Big Mac Index operates entirely and exactly the other way around. We need to make the distinction between traded goods and non-traded goods. The Iron Law only works on traded goods. What we’re trying to find out with PPP calculations is what are the price differentials of non-traded goods? Which is why the Big Mac is used. It is (supposedly at least) exactly the same all over the world. It is also made almost entirely from local produce bought at the local price in local markets. US Big Macs use American beef, Argentine ones Argentine and so on. So we get to see the impact of local prices on the same product worldwide. That’s what we’re actually attempting with that Big Mac Index. The Economist then goes on to compare the prices of this non-traded good with exchange rates and attempt to work out whether the exchange rates are correct or not.

This is entirely different from using the price of a traded good to measure local price variations. For what we’re going to be measuring here is what interventions there are into stopping the Iron Law working, not what local price levels are.

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