Quotulatiousness

June 20, 2011

Where map collections and railway fans intersect

Filed under: Cancon, Economics, History, Railways, Technology — Tags: — Nicholas @ 09:37

An interview with the author of Railway Maps of the World:

At its peak, there were 92,449 kilometres of rail lines criss-crossing Canada from coast to coast. That was in 1976. Today, almost half the lines have been destroyed, dug-up, or abandoned — only 49,422 km remain in operation. Worldwide, the numbers are just as grim: from a high of 2,500,000 km in 1920, the Golden Age of rail travel, to 1,370,782 km now. Yet, there are still those who prefer the charm of the train to its air or auto brethren. Mark Ovenden is one such man. Ovenden, who enjoyed unexpected success with his 2007 book Transit Maps of the World, has recently released Railway Maps of the World. It is a celebration of beautiful maps, he says, but also a reminder of what we’ve lost. He spoke to the Post’s Mark Medley from his home in Paris.

Although the absolute reduction in rail lines in Canada is quite true, the railway companies could not earn a profit today if they’d kept all of those lines in operation. Some of the lines were abandoned as sources of traffic declined, either through depletion of the resource or improvements to road transportation. Some of the lines were abandoned once passenger traffic dropped below operating costs. Technological improvements in both locomotives and in control and signalling equipment allowed better use of the tracks, allowing redundant lines to be taken out of service.

Railways have to pay taxes on their right-of-way, so once a length of track becomes uneconomic, it will very quickly be taken out of service so that the railway doesn’t pay for maintenance of unused routes and can sell the land. For all the “romance of the rails”, railways are businesses which have to earn profits to continue operating.

Q: What does it say, then, that we were able to turn our back on railways so easily?

A: It’s a very complex and a very sad picture on many levels, from which luckily only in the last five, 10, 15 years we’re beginning to turn the corner. When you look at the influence and the power of the oil companies, and the whole automotive industry, they really were responsible — they saw it as a very deliberate policy to run down the railway services, and buy up things like streetcars and run them down again. The oil companies have blood on their hands, really. They were the ones who forced the railways to shut. They were the ones that had the tracks torn up. Under their influence people were forced to buy cars.

*cough*Bullshit*cough*

This is a lively combination of wishful thinking and conspiracy theorizing. It also nicely conflates the real business of the railways in North America — massive amounts of freight traffic — with a much smaller and unprofitable side-line — passenger service. Few railways ever earned much of their revenues from passenger traffic, which is why most modern subways, streetcars, and light rail systems are in the public sector. The railways can be built to maximize freight traffic (and therefore profit) or they can be built to maximize passenger traffic. Only organizations that do not have to earn a profit can justify concentrating on passenger service.

In the 1920s, automobiles changed from being super-expensive, finicky toys for the rich to being affordable to middle class and even some working class famlies and far more reliable (so you didn’t need to have a dedicated driver/mechanic for each vehicle). Unlike trains, where you could only go where the rails went and only when the train was going in that direction, a car allowed you to go anywhere there was a road, whenever you wanted.

It is difficult for us to grasp just how liberating this was for millions of Americans and Canadians — we’re so used to being able to go where we want at any time that we rarely even think about what it was like before the heyday of the car. Passenger trains had that kind of transformative effect in Europe, but less so in North America, where moving freight was always the primary purpose for building railways (setting aside the Union Pacific and the Canadian Pacific, as the construction of both were more influenced by government policy than profit-seeking).

Stephen Gordon: Don’t lose any sleep over “foreign control” of the Canadian economy

Filed under: Cancon, Economics — Tags: — Nicholas @ 09:22

You can always find someone to get upset about the degree of foreign investment in a given industry or in the economy as a whole. Stephen Gordon explains why you shouldn’t worry so much about it:

If you’re the sort of person who is suspicious of foreigners’ controlling assets located in Canada, and if you equate ownership with control, then you can reach the conclusion that foreign ownership = foreign control = bad without much effort. And since net international investment positions are zero-sum, this sort of analysis would lead you to conclude that Canada is ‘losing’ this game of ‘control’.

Much as I enjoy stomping on the second part of that syllogism, this post is going to take a closer look at the first part: the link between ownership and control is not the same for all forms of foreign ownership. In the case of FDI, decisions are made by the head office in the home country. But FDI is only one mechanism by which foreigners can send their saving to Canada; they can also buy shares in Canadian-registered corporations, or buy bonds issued by Canadian firms or governments.

June 19, 2011

“It is clear they are running out of options”

Filed under: Britain, Economics, Europe, Greece — Tags: , — Nicholas @ 10:29

It looks as though the British banks are starting to get very nervous about Eurozone bank defaults:

Senior sources have revealed that leading banks, including Barclays and Standard Chartered, have radically reduced the amount of unsecured lending they are prepared to make available to eurozone banks, raising the prospect of a new credit crunch for the European banking system.

Standard Chartered is understood to have withdrawn tens of billions of pounds from the eurozone inter-bank lending market in recent months and cut its overall exposure by two-thirds in the past few weeks as it has become increasingly worried about the finances of other European banks.

Barclays has also cut its exposure in recent months as senior managers have become increasingly concerned about developments among banks with large exposures to the troubled European countries Greece, Ireland, Spain, Italy and Portugal.

H/T to Elizabeth for the link.

June 17, 2011

I’m glad I sold my RIM stock when I did . . .

Filed under: Cancon, Economics, Technology — Tags: , , , , — Nicholas @ 12:10

. . . because if this analysis at the Guardian is accurate, the stock is going much, much lower:

Here’s what’s wrong: RIM’s platform is burning. Except that this isn’t the fully-fledged conflagration that Stephen Elop perceived at Nokia. It’s more of a smouldering. But it’s happening nonetheless, and it’s been happening for a long time: RIM hasn’t released a major new phone since August 2010. (Yes, that’s nearly as long as Apple.) It sort-of showed off a new version of the Torch in May; that will actually be released in September. (Way to kill the sales, people.)

[. . .]

My analysis: RIM is being pushed down in the smartphone market as the iPhone and high-end Android handsets (and perhaps even a few Windows Phone handsets) take away the top-end share it used to have. By my calculations (trying to align RIM’s out-of-kilter quarters with the usual Jan-March ones), Apple has outsold RIM for phones for the previous three fiscal quarters (July-Sep, Oct-Dec, Jan-Mar) and is all but sure to do the same this quarter. That’s an entire year in which it’s outselling RIM not only in numbers but also revenues (and profits). And of course Android is wiping the floor everywhere else, now being the largest smartphone OS by share.

RIM is getting hammered because its phones are now, in OS terms, old. RIM’s share of US smartphone subscribers dropped 4.7 percentage points to 25.7% in April compared to three months earlier, according to ComScore. None of that is good. And because the phones are old, it can’t persuade the carriers to buy them as it did before; so ASPs tumble. Matt Richman has a stab at calculating the phone ASP and reckons it fell from $302.26 (official, Q1) to $268.56 (est Q2).

[. . .]

So we’re going to see both Nokia and RIM come under incredible pressure over the rest of this year: Apple is going to have a new iPhone, Android is going to rage like a forest fire, and there doesn’t seem to be anything to really stop either of them. Although Stephen Elop talked about the prospect of three ecosystems — Android, iOS, and Windows Phone, completely discounting RIM — it’s looking like it’ll be more like a two-horse race, at least temporarily, by the end of this year.

Of course, even if RIM isn’t one of the market leaders, Apple will not have an easier time of it.

And yes, I did actually have a few hundred shares of RIM stock in my RRSP last year. I was lucky enough to sell at about what I paid for the stock . . . and it hasn’t been as high as that since I sold.

June 13, 2011

World Bank: smaller governments produce higher economic growth

Filed under: Economics, Government, Liberty — Tags: , , — Nicholas @ 09:33

Tim Worstall summarizes a recent World Bank report that seems to have reached quite sensible conclusions:

Given the level of economic debate currently in the UK the results might surprise. For they support an economic and civil liberalism entirely unlike anything that any political party currently puts forward. This first result is that:

For instance, a one unit change in the initial level of economic freedom between two countries (on a scale of one to 10) is associated with an almost one percentage point differential in their average long-run economic growth rates.

This is unlikely to please those we think of as being on the political left: what, you mean people should just be allowed to get on with things without the direction of a beneficent state? But there’s not that much support for the sort of One Nation Tory paternalism of the other lot either:

In the case of civil and political liberties, the long-term effect is also positive and significant with a differential of 0.3 percentage point.

Yes, people really should be left alone, to shag and to smoke and to live their lives as they please. And finally, it’s going to absolutely appal all of those who insist that it’s the positive freedoms that really produce economic growth:

In contrast, no evidence was found that the initial level of entitlement rights or their change over time had any significant effects on long-term per capita income, except for a negative effect in some specifications of the model.

Income redistribution, high (or low) unemployment pay, child care subsidies, they just don’t make any positive difference to growth but might have negative ones.

In other words, the less your government tries to do outside the basic duties of protecting the citizens from external threats and domestic crime, and providing an honest and transparent set of laws and a stable legal framework, the better off your country will be both economically and socially. Kinda like that minarchistic “night watchman state”.

British carbon tax may spark de-industrialization

Filed under: Britain, Economics, Europe — Tags: , , , , — Nicholas @ 08:51

The current British government’s global warming/climate change programs, combined with the European Union’s policies, may have triggered a race to the exits by British industry:

Now, the CBI and Britain’s leading chemical firms have warned that the proposed “carbon floor” tax (also unique in the world) will make our industry so uncompetitive that, unless the policy is changed, it will lead inevitably to mass plant closures and job losses. Similarly, the European Metals Association warned last week that the EU’s various “anti-carbon” policies are becoming so costly that they are already forcing steel, aluminium and other producers in their energy-intensive industry to relocate outside Europe, losing hundreds of thousands more jobs.

At one end of the scale, then, whole industries are protesting that the soaring costs of “climate change” measures will amount, in effect, to a colossal economic suicide note. At the other, we begin to see how the obsession with “climate change” will push our own household energy bills through the roof, driving millions more people into “fuel poverty”. Apart from anything else, by 2020 our Government expects us to pay £100 billion for a further 10,000 useless, subsidised windmills, plus £40 billion to connect them to the National Grid. These costs alone would almost double our present electricity bills.

Furthermore, we are all unwittingly having to pay billions for the EU’s Emissions Trading Scheme, the Carbon Reduction scheme, higher airline taxes, higher vehicle duties, highly paid “low-carbon officers” in our council offices, and heaven knows what else besides. With the new carbon floor tax soon due to raise our energy bills by further billions, we can see why the Government’s own forecast — that the Climate Change Act will cost us up to £18 billion annually until 2050 — might well be an underestimate.

Most terrifying of all, however, is the extent to which our politicians remain firmly locked in their little green bubble, oblivious to the practical implications of the measures they have set in train. As for what purpose it all serves, we may note last week’s report that China, already the world’s biggest CO2 emitter, is now also the world’s largest energy user. Each year it increases the world’s CO2 emissions by more than the total that Britain emits annually.

June 12, 2011

Montreal model railway loses out to real railway

Filed under: Cancon, Economics, Railways, Randomness — Tags: , , — Nicholas @ 12:36

Canadian National, which owns the building hosting Montreal Model Railway Club — claimed to be “Canada’s largest fully operational model railway” — is terminating the club’s lease because they can get higher rent for the building:

In a warehouse in Montreal’s historic Griffintown neighbourhood, model train enthusiasts have spent 38 years engaging in a labour of love.

Inch by inch, they’ve constructed what is believed to be Canada’s largest fully operational model railway.

More than 300 people have participated over the years, devoting thousands of hours to building life-like models across an eye-popping, detail-laden, 1,493-metre masterpiece.

And it’s about to be detroyed.

The reason for the imminent dismantling is not without irony: the make-believe trains are about to be forced away by a real train company, dealing with real-life issues like rising property costs.

Canadian National owns the 9,000-square-foot warehouse space and wants to lease it out at a higher rent, starting next year. It warned the model-train association five years ago that its time was up.

The club’s website is http://www.canadacentral.org/Reseau_EN.htm.

June 11, 2011

Redefining “high speed” as 45 mph

Filed under: Economics, Government, Technology — Tags: , , — Nicholas @ 12:12

This is very amusing, unless you’re a taxpayer:

The latest in lunacy in high-speed rail lunacy: at Joel Kotkin’s newgeography.com Wendell Cox reports that the U.S. Transportation Department is dangling money before the government of Iowa seeking matching funds from the state for a high-speed rail line from Iowa City to Chicago. The “high-speed” trains would average 45 miles per hour and take five hours to reach Chicago from Iowa City. One might wonder how big the market for this service is, since Iowa City and Johnson County have only 130,882 people; add in adjoining Linn County (Cedar Rapids) and you’re only up to 342,108 — not really enough, one would think, to supply enough riders to cover operating costs much less construction costs.

The federal government must be getting desperate to find some state willing to take this deal . . .

QotD: OPEC’s 50-year fishing trip

Filed under: Economics, Government, Middle East, Quotations, USA — Tags: , , , — Nicholas @ 11:56

The petroleum-exporting countries have kept America as a gigantic fish on a steel line for nearly 50 years, reeling it in slowly, and letting it out (relaxing oil prices), when the United States made purposeful noises about raising domestic production, cutting consumption, and going to alternate sources. As soon as OPEC fine-tuned the fishing reel, the great fish went with the docility of the addicted consumer back to its default position mainlining on foreign oil at steadily increasing prices and in ever larger quantities. Every president starting with Richard Nixon warned of the danger in this addiction, but none has done anything useful about it. There must be an emphasis on cheap and plentiful natural gas, more nuclear (with maximum safety standards), more off-shore drilling (with maximum environmental-protection arrangements), and higher gasoline taxes to raise revenues and restrain use. All of this will bring down the international price and reduce the amount of money available for the Iranians, Saudis, Venezuelans, and others to finance terrorism around the world, and will ultimately reduce U.S. defense costs. None of this has been done, though the need for it has been obvious for decades.

Conrad Black, “Why America is suffering”, National Post, 2011-06-11

They “buried the ban in the 300-plus pages of the 2007 energy bill, and very few talked about it in public”

Filed under: Economics, Government, Law, Technology — Tags: , , — Nicholas @ 11:28

Virginia Postrel talks about the looming ban-that-isn’t-a-ban on incandescent lightbulbs:

One serious technophile, University of Tennessee law professor Glenn Reynolds, spent much of 2007 flogging compact fluorescents on his popular Instapundit blog, eventually persuading more than 1,900 readers to swap 19,871 incandescent bulbs for CFLs. To this day, the Instapundit group is by far the largest participant at OneBillionBulbs.com, a bulb-switching campaign organized by the consulting firm Symmetric Technologies. But Reynolds himself has changed his mind.

“I’m deeply, deeply disappointed with CFL bulbs,” he wrote last month on his blog. “I replaced pretty much every regular bulb in the house with CFLs, but they’ve been failing at about the same rate as ordinary long-life bulbs, despite the promises of multiyear service. And I can’t tell any difference in my electric bill. Plus, the Insta-Wife hates the light.”

That was our experience with the early CFL bulbs, too: they didn’t come close to achieving the longevity we were supposedly paying all the extra money for. And, as I’ve posted before, they’re not as easy to clean up after breakage as the older bulbs.

So the activists offended by the public’s presumed wastefulness took a more direct approach. They joined forces with the big bulb producers, who had an interest in replacing low-margin commodities with high-margin specialty wares, and, with help from Congress and President George W. Bush, banned the bulbs people prefer.

It was an inside job. Neither ordinary consumers nor even organized interior designers had a say. Lawmakers buried the ban in the 300-plus pages of the 2007 energy bill, and very few talked about it in public. It was crony capitalism with a touch of green.

Crony capitalism is what the general public is coming to think is the only kind of capitalism, because they have seen so much of it during the last few presidencies. Your business can be plagued with petty regulators enforcing nitpicking rules, while Congress showers money and special privileges on big businesses and banks.

But, as she points out, it’s not technically a true ban:

Now, I realize that by complaining about the bulb ban — indeed, by calling it a ban — I am declaring myself an unsophisticated rube, the sort of person who supposedly takes marching orders from Rush Limbaugh. In a New York Times article last month, Penelope Green set people like me straight. The law, she patiently explained, “simply requires that companies make some of their incandescent bulbs work a bit better, meeting a series of rolling deadlines between 2012 and 2014.”

True, the law doesn’t affect all bulbs — just the vast majority. (It exempts certain special types, like the one in your refrigerator.) The domed halogen bulbs meet the new standards yet are technically incandescents; judging from my personal experiments, they produce light similar to that of old- fashioned bulbs. They do, however, cost twice as much as traditional bulbs and, if the packages are to be believed, don’t last as long.

I keep hoping that LED lights will be able to produce the kind of long-life that we used to be able to depend upon from incandescents, as CFLs and halogen bulbs have not come close to living up to the promises. However, LEDs have not yet managed that trick in commercial applications.

So, aside from allowing lobbyists to flex their muscles, what is the ban attempting to achieve? That’s not quite clear-cut:

Though anti-populist in the extreme, the bulb ban in fact evinces none of the polished wonkery you’d expect from sophisticated technocrats. For starters, it’s not clear what the point is. Why should the government try to make consumers use less electricity? There’s no foreign policy reason. Electricity comes mostly from coal, natural gas and nuclear plants, all domestic sources. So presumably the reason has something to do with air pollution or carbon-dioxide emissions.

But banning light bulbs is one of the least efficient ways imaginable to attack those problems. A lamp using power from a clean source is treated the same as a lamp using power from a dirty source. A ban gives electricity producers no incentive to reduce emissions.

June 10, 2011

With extended lifespans . . . will come later retirement dates

Filed under: Economics, USA — Tags: , , , — Nicholas @ 16:49

For all of us who’ve spent our working lives assuming that 65 was the age of retirement (or 55 for those of you who paid closer attention to retirement planning 20 years earlier than the rest of us), you won’t like this:

Americans better get used to working longer, even until they are 80 years old, according to a study by the Employee Research Benefit Institute (via Robert Powell at MarketWatch).

Naturally, those with lower incomes will need to work longer.

Here’s how it breaks down (via MarketWatch):

  • If you make around $11,700 dollars a year you have to work to age 84 to have a 50% chance of affording retirement.
  • If you make between $11,700-$31,200 a year you have to work to age 76 to have a 50% chance affording retirement
  • If you make between $31,200-$72,500 a year you have to work to age 72 to have a 50% chance of affording retirement.
  • If you make $72,500 or more a year you have to work to age 65 to have a 50% chance of affording retirement.

This study does point out one bright spot for those working past 65 though. If you are putting your money into some kind of retirement fund, your chances of saving enough increase substantially.

Cold War thinking on Chinese-US relations

Filed under: China, Economics, History, USA — Tags: , , — Nicholas @ 09:13

Brad Glosserman asks if China is using its new-found economic muscle to bankrupt the United States.

One popular narrative credits the end of the Cold War to a US strategy to bankrupt the Soviet Union. Well aware of the advantage conferred by its superior economic performance, Washington pushed Moscow into a military competition that drained the USSR of its resources. In this narrative, US President Ronald Reagan’s push to create a missile defence system — realistic or not — was the straw that broke the Soviet back.

Are Chinese strategists pursuing a similar approach to the United States? Is Beijing pushing US buttons, forcing it to spend increasingly scarce resources on defence assets and diverting them from other more productive uses? Far-fetched though it may seem — and the reasons to be sceptical are pretty compelling — there is evidence that China is doing just that: ringing American alarm bells, forcing the US to respond, and compounding fiscal dilemmas within the United States. Call it Cold War redux.

If that is indeed China’s strategy, then they’re wasting their efforts: without strong action in the very near term, the US government is going to bankrupt the country with no additional help from overseas required. The “popular narrative” Glosserman refers to handily glosses over the fact that the Soviet economy had been on a downward slide for decades. The Reagan-era military build-up merely hastened the end for Soviet economics, it did not bring it on in the first place. As Adam Smith famously noted, there is a lot of ruin in a nation, but eventually it does go smash — especially if no efforts are made to avert that nasty ending.

H/T to Jon, my former virtual landlord, for the link.

June 9, 2011

Whistleblowers must take a number and wait to be served

Filed under: Bureaucracy, Economics, Law, USA — Tags: , , , — Nicholas @ 09:21

Edward Siedle, foolish man, takes the Securities and Exchange Commission at their word:

Last Friday afternoon I got it into my head that I should try to contact the head of the SEC’s new whistleblower office and discuss a money manager scam I’d uncovered. Surely, I figured, in this post-Madoff era the SEC must be rolling out the red carpet for those looking to clue it in on financial shenanigans.

On the SEC’s home page, at www. sec.gov I found a new button that says “Questions, Tips and Complaints Whistleblower Provisions.” The bureaucrats behind this nifty new feature were so prescient that they even included a picture of a whistle for the convenience of illiterate snitches.

But he’s in a hurry, and doesn’t want to just fax or email the information — he wants to talk to a human being. That’s where it gets amusing/alarming depending on your view of government:

I got the number of the SEC’s media office from the folks at Forbes and called it. I asked the person who answered for the number of the SEC’s new office of the whistleblower.

“There is no new office of the whistleblower,” I was told.

“Can l please have the number of the head of the office then,” I asked.

“There is no new head of the office and there is no office,” the woman told me in a tone that she appeared to have honed while humoring morons.

“Now wait a minute,” I said, “I read an article about the new guy who is running it. He’s a former tobacco lawyer or something. I know his name … it’s McKessy or something like that.”

My handler laughed and said, “So you believe everything you read?”

H/T to Tim Harford, who linked to this article saying “Adapt emphasises whistleblowing as a way of uncovering hidden problems in fragile systems. Therefore: HEADDESK”.

Adapt, of course, is Harford’s latest book, which I quite enjoyed reading and recommend to your attention.

June 8, 2011

Ontario’s (pathetic) choices in the next election

Filed under: Cancon, Economics, Politics — Tags: , , , , , , — Nicholas @ 12:04

Read ’em and weep:

Dalton’s McGuinty’s record is so well known it barely justifies repeating: the health tax he promised not to introduce, but did. The HST. The eco tax. The soaring power bills. The epic borrowing. The multiple boondoggles. The “wage freeze” that turns out not to apply to police, nurses, civil servants or anyone who actually gets paid by the government. The big bonus for eHealth workers for overseeing a billion dollars in wasted spending. Stop me before I break into tears.

Tim Hudak says he’ll end the agony, but can’t be believed. Sorry Tim, but it’s true. If the campaign platform recently released by the Tories was handed in as a project in a first-year finance class, it would be returned with suggestions that the author find another line of interest. Like line dancing; something that doesn’t involve numbers, or adding and subtracting. Mr. Hudak says he’ll raise spending on all the important programs, but make up for it by finding “waste”. We all know that isn’t going to happen. Politicians never find waste. What they find is that if they keep spending money, their chances of re-election improve. The federal Tories have been promising to find waste for five years now, and have jacked up spending every year.

It’s been widely understood that this election was the Tories’ to lose . . . and they’re determined to do exactly that. This is how the NDP might finally get another chance to form a government . . . perhaps the misery of the Rae experiment has finally been forgotten. Between McGuinty and Hudak, the NDP could run a cardboard cut-out of Jack Layton and be (significantly) more appealing to the average Ontario voter.

June 7, 2011

Why Apple didn’t introduce the next iPhone model at WWDC

Filed under: Economics, Technology — Tags: , , , — Nicholas @ 17:28

Charles Arthur thinks he’s cracked the mystery over when the next iPhone will be introduced, and why:

This might seem blindingly obvious, but lots of people were hanging on to the hope that Apple would launch the iPhone 5/4GS/4G on Monday. The fact that it hasn’t — unlike the past two years, when it has announced new versions of the iPhone at, guess where, WWDC — indicates that Apple is shifting its strategy in phones.

Presently, Apple’s phone market segmentation strategy is to sell the newest model (the iPhone 4, now around a year old) at the highest price, and the second-oldest model (the 3GS, two years old) at a lower price. Hence you can find carriers such as Orange selling the 3GS for free with a £25 per month contract, while the iPhone 4 is still has an upfront price plus a £30+/month contract.

Presently this is as much segmentation that Apple is able to achieve, because it was locked into the yearly release schedule. That’s not surprising; Apple was a comparative newcomer to the mobile phone industry. Remember how the original iPhone couldn’t forward SMS or send MMS? How we laughed.

Now Apple is a serious player. And (we’re hearing from the supply chain) it is shifting the release date of the newest phone to September/October, which means a lot can change.

I’m still waiting on the next iPhone announcement, as I’m still at the tail end of my three-year contract (yes, Canadians only had the choice of a three-year contract when the iPhone 3G came to town). It’s running a very old version of iOS — 3.1.3 — as all the reports from the early adopters said that iOS 4 was a total pig on the 3G. Newer versions of iOS 4 don’t run on the 3G at all.

After August, I’ll (in theory) have the choice of going with the new iPhone or switching to an Android smartphone of some description (provided I can find good functional equivalents of the software I use on the iPhone). Hence, my interest in what Apple is doing for the next iPhone.

Instead, look to Apple to consider iPhone updates on a six-monthly basis. One model in September/October; another in March/April. That allows for incremental differences between versions which provides the updraft for sales, which carriers will like. But it also means that Apple doesn’t have to sweat too hard on how different to make the next handset — unlike the present situation, where every new model has to blow the bloody doors off.

Yet it also means that it will have a wider range of handsets to offer over time because of the natural segmentation of age: the iPhone 4, iPhone 4GS, some time next spring, the iPhone 5; in the autumn, the iPhone 5G (or whatever). And so on. The ages of the devices will create the tiers, which will allow it to slice the market into different price tiers and compete with Android — and more importantly RIM, which Apple clearly has in its sights as a rival to be crushed (why else introduce iMessage, which looks like a clone of BlackBerry Messenger?).

So that’s it: if you’re wondering where your iPhone 5 (4GS/4G) is, it’s being built in a factory in China. And Apple is getting ready to unveil a completely different way of slicing and dicing the phone market.

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