August 25, 2011
ESR: what now for Apple in the wake of Jobs’ resignation?
Eric S. Raymond looks at the hard road ahead for Apple without Steve Jobs:
I’ve said before that I think Apple looks just like sustaining incumbents often do just before they undergo catastrophic disruption from below and their market share falls off a cliff. Google’s entire game plan has been aimed squarely at producing disruption from below, and with market share at 40% or above and Android’s brand looking extremely strong it is undeniable that they have executed on that plan extremely well. The near-term threat of an Apple market-share collapse to the 10% range or even lower is, in my judgment, quite significant — and comScore’s latest figures whisper that we may have reached a tipping point this month.
For Apple, the history of technology disruptions from below tells us that there is only one recovery path from this situation. Before the Android army cannibalizes Apple’s business, Apple must cannibalize its own business with a low-cost iPhone that can get down in the muck and compete with cheap Android phones on price. Likewise in tablets, though Apple might have six months’ more grace there.
Of course, this choice would mean that Apple has to take a massive hit to its margins. Which is the perennial problem in heading off a disruption from below before it happens; it is brutally difficult to convince your investors and your own executives that the record quarterlies won’t just keep coming, especially when your own marketing has been so persuasive about the specialness of the company and its leading position in the industry. This is a failure mode that, as Clayton Christensen has documented, routinely crashes large and well-run companies at the apparent peak of their success.
Does Tim Cook have the vision and the will to make this difficult transition happen? Nobody knows. But the odds are against it.
Look at what they actually do, not what they say
Tim Worstall peers behind the curtain of those noble, generous French fat-cats who wrote the letter to the French government, insisting that they be taxed more. It’s not a pretty picture:
All very jolly and public-spirited you might think, but applying a little bit of economic theory reveals that they’re somewhere along the “speaking with forked tongues” to “lying toads” continuum.
That bit of economics is the concept of “revealed preferences”: translated out of the jargon it just means don’t look at what people say, look at what they do. For example, Liliane Bettencourt, the L’Oreal heiress, is one signatory calling for higher taxes on herself: it’s also been widely reported that she has received tax refunds under French “fiscal shield” provisions intended to limit taxes on the wealthy to 50 per cent. Madame, if you really want to pay higher taxes, just don’t cash those cheques.
We see the same sort of call everywhere of course. All sorts of people call for higher taxes: it’s just that very few actually pay higher amounts of money. We can see this in both the UK and US.
The US has an account, “Gifts to the United States”, specifically for charitable-minded citizens. Send them a cheque, they’ll cash it and spend the money on government. Last time I checked, the figures they received were $2,671,628.40. Roughly speaking, 1 cent per head of population. OK, so, yes, taxes were too low in the US that year. By exactly that amount.
The UK numbers aren’t even that good. In the same year only five Brits sent in cheques to the Treasury and four of those people were deceased. No, the fifth was not Polly Toynbee, despite the impression one might get from her columns (well, I don’t know it wasn’t her but I’m sure she would have urged the rest of us to do the same if it were).
An FOI request revealed that from 2002 to 2009 actual living people contributed £7,349.90 to the Treasury, over and above their legally due taxation. No, not each or per year… but in total.
There’s literally nothing stopping people from paying more taxes than they actually owe: every jurisdiction appears to allow people to give more money voluntarily. The US government even allows it to be done electronically. So, if you feel you’re not paying “your rightful share”, go right ahead and give it to the government. If you don’t, you’re demonstrating that you really don’t feel under-taxed after all.
Niagara winemaker being punished for “stepping out of line”
Michael Pinkus who rarely lets an opportunity pass to let us know how he dislikes the LCBO (or as he sometimes calls it, the KGBO), reports on the troubles of Daniel Lenko, who appears to have provoked retaliation from the board for his criticisms:
An “order to comply” certificate was slapped on Lenko’s winery door. The order, from the Region of Niagara dated July 18, 2011, listed two areas of concern an official found after inspecting Lenko’s property on June 29, 2011. First, “Lenko must cease and desist from discharging winery production waste” (Lenko says this waste is 99% water and 1% wine) into an unapproved septic tank and then discharging that onto the ground surface. Second, Lenko is ordered to apply to the Region for a permit to construct a sewage system and, upon application, submit a detailed design plan from a qualified engineer or sewage systems designer and, upon approval, proceed to install the new system by Sept. 14, 2011. Costs for this work could get into the $50,000+ mark.
[. . .]
Then it hit me. I saw Danny’s face peering back at me from between two barrels in a May 6, 2011 article in the Toronto Star entitled “Grape Expectations frustrated by LCBO”. In the article Danny, who has never been shy about his dislike for our monopoly system and those who run it, said: “In the real world, there’d be an alternative, some place else to sell our wines, but the LCBO’s the only game in town … They say they’re the best at what they do, but how can you say that when they have no competition? What’s wrong with having a VQA store?” Another prominent quote in the article is not attributed to anyone, but with Danny’s face front and centre at the top it is easy for any reader to make an inference (rightly or wrongly): “Would I like to get more of my product on the shelves? Sure. But why would I provoke an 800-pound gorilla? There’s just no way to win that battle.”
[. . .]
The aforementioned picture at the top of the article had a caption that read: “Daniel Lenko started his winery in 1999 using the grapes from the vines that his father planted in Beamsville in the Niagara Wine Region, in 1959. Lenko sells his wines from the kitchen of a small house on the vineyard which he also uses as a wine testing lab and an office.” Now what do you think it take for the LCBO to get on the horn with the AGCO (Alcohol Gaming Commision Ontario — who “oversee” the wineries) or even a local official and say to them: “maybe you’ll want to look into this Lenko guy a little harder” he is after all selling wine from his kitchen and a kitchen might not be considered a suitable place to be selling alcohol from. I think someone is making an example of Danny.
Review of Australian defence establishment extended
They’ve apparently been overwhelmed by complaints, so the original term is being extended:
A review into sexual abuse in the Australian military has received such a high volume of complaints that it is being extended, Defence Minister Stephen Smith says.
The government asked a law firm to begin a review following a sex scandal at an Australian defence academy.
Mr Smith said investigators were dealing with more than 1,000 allegations of abuse.
The review will now report back on 30 September, one month behind schedule.
Investigations began after two cadets from the Australian Defence Force Academy were accused of secretly filming a female cadet having sex and broadcasting it on the internet.
They have now been charged in connection with the incident, which raised questions about the treatment of women within the Australian defence establishment.
