Quotulatiousness

July 7, 2012

Tim Worstall: the software patent system is FUBAR’ed

Filed under: Business, Law, Technology — Tags: , , , , , , — Nicholas @ 11:05

In Forbes, Tim Worstall explains the odd situation of Amazon trying to obtain patents to use defensively when (not if) they get sued for entering the smartphone market:

… Amazon isn’t searching out patents which would allow it to build phones to, say, the GSM or CDMA standards. For those patents, by virtue of being included in those standards, must be made available to all comers on reasonable and non-discriminatory terms (RAND, or Europeans add “Fair” to the beginning to give FRAND). So any patent that is actually necessary to make a phone that interacts with the network is already available to them on exactly the same terms that Samsung, Apple, Nokia or anyone else pays for them.

No, what Amazon is looking for is just some bundle of patents, somewhere, that have something to do with mobile telephony. So that when (and sadly, it really is when, not if) they get sued by someone or other for breaching a patent then they’ve got some great big bundle of documents that they can wave back at them. Such patents can range from the possibly valid (slide to unlock perhaps) through to two that really irk me: Apple claiming a patent on a wedge shaped notebook and, unbelievably to me, on the layout of icons on the Galaxy Tablet in Europe.

I take this to be evidence that the technology patent system has simply got out of hand: that the system is entirely Fubar in fact. We need to recall what a patent is supposed to do: it is not that intellectual property is some God given right. Rather, we realise that given that ideas and technologies are public goods it is very difficult to make money out of having invented them. Thus we artificially create intellectual property in the form of patents and trademarks. But we are always walking a narrow line between encouraging invention by awarding such rights and discouraging derivative inventions by awarding rights that are too strong.

June 27, 2012

The “JesusPhone” turns five

Filed under: Media, Technology — Tags: , , — Nicholas @ 08:32

At The Register, Tony Smith looks back on five years of Apple’s iPhone phenomenon:

The iPhone first went on sale five years ago this week and it has already clocked up more than $150 billion in revenues — more than the annual GDP of Hungary — for Apple.

More than 250 million iPhones have been sold since 29 June 2007, the day over-the-counter sales began in the US, almost six months after its January 2007 launch.

That’s just the hardware, of course. Apple takes a 30 per cent cut of the purchase price of ever app downloaded through the iTunes App Store, and with well over 30 billion apps downloaded since the app shop went online on 10 July 2008.

[. . .]

The original iPhone, lest we forget, was a 2G device with GSM/Edge data connectivity. Its 16 bundled apps — it couldn’t run third-party native software, only JavaScript-coded “web apps” in its browser — ran on a 400MHz Samsung ARM11-based S3C6400 CPU and were presented on a 3.5in, 320 x 480 display.

There was no external storage — there still isn’t — and the battery was tightly integrated into the casing — it still is. It has a 2Mp camera and 4-16GB of on-board Flash storage.

But the iPhone introduced the world to smooth touchscreen operation, its capacitive panel outclassing the less sensitive resistive screens commonplace at the time. Likewise, it introduced roll, pitch and yaw detecting accelerometers, now found on every smartphone. Likewise Wi-Fi.

June 6, 2012

Scattering that “social” pixie dust on mobile apps

Filed under: Media, Technology — Tags: , , , , — Nicholas @ 09:37

In the Guardian Technology section, Frédéric Filloux attempts to disabuse mobile developers about one of the “rules” for mobile apps:

Today’s hype leaves no other option but making an application as “social” as possible. This being the certitude du jour, allow me to think differently.

True, some apps are inherently social: when it comes to rating a product or a service, the “crowd factor” is critical. Beyond that, it should be a matter of personal choice — an antinomic notion to today’s the “Social” diktat. When you sign up to Spotify, the default setting is to share your musical taste with your Facebook friends and to suffer theirs. I can’t stand such obligation: I quickly dumped the application and cancelled my account.

The social idea’s biggest mistake is the belief in a universal and monolithic concept everyone is supposed to be willing to embrace with a similar degree of scope and enthusiasm. That’s a geeky, super-cartesian, Zuckerberg-esque view of society. Among my friends, some like opera (the singing, not the browser), others prefer heavy metal and I’m more into jazz tunes; some are tech-minded like me, others are more inclined towards literature. When it comes to sharing news, I tend to be naturally selective about the people I send a link to: I don’t want to swamp everyone with stuff they don’t care about. I might be wrong, but this is the way I see the social cyberspace: segmented and respectful of each other.

So, mobile app developers, if you find yourself trying to force-fit social features into a Solitaire app, think again.

April 11, 2012

QotD: The silly claims about “capitalism in crisis”

Filed under: Economics, History, Media, Quotations — Tags: , , , — Nicholas @ 00:08

Yes, times are tougher than they otherwise could be; however, to claim that the bumps in the road over the last few years show that “capitalism is in crisis” is absurd.

[. . .]

Even with the a few recessions, Real per-capita Gross Domestic Product is a lot higher than it was in 1960, 1970, 1980, 1990, or 2000. The truly unique fact about the world as it has changed in the last few centuries is that, as a number of economic historians have emphasized, we live in a world where economic growth is taken to be the norm. […]

Indeed, as the economist Joseph Schumpeter pointed out long ago, capitalism has given us the time and energy to criticize capitalism. People content themselves by being outraged at working conditions in Foxconn plants in China. However, it is the economic growth we have achieved in the western world that allows us the comfortable working conditions from which we express horror at working conditions elsewhere in the world. Further, not all the workers are greeting the reformers as saviors (HT: Doug Stuart). If people are willing to trade off longer working hours for higher incomes, I don’t see how it’s my right to stop them.

[. . .] Donald J. Boudreaux points out how we have to be very careful with income data if we are going to get an accurate picture of trends in standards of living.

If we’re going to talk about “stagnation” we also have to be very clear about precisely what we mean. Consider the near-ubiquity of the iconic gizmo of the early 21st century and its technological cousin: the smart phone and social media. My Forbes.com colleague Erik Kain reported in February that “472 million smartphones were sold worldwide in 2011.” In a world of 7 billion people, the top 1% would be 70 million people. If all the gains really went to them, that would be about six and a half smartphones each for the members of the world’s Top 1%. I’m pretty sure that isn’t what’s happening.

Art Carden, “It’s the Final Crisis of Capitalism, Charlie Brown!”, Forbes, 2012-04-10

March 23, 2012

Facebook seen as harmful … to deployed troops

Filed under: Asia, Middle East, Military, Technology, USA — Tags: , , , , — Nicholas @ 08:17

Strategy Page explains how increasing sophistication on the part of the al Qaeda/Taliban forces has been allowing them to select targets of opportunity through things like Facebook posts and cell phone traffic:

The U.S. Army is warning its troops to be careful what they post to on social networking sites (like Facebook). When they post photos of themselves they often reveal militarily useful information. This was discovered in Iraq, where a lot of tech savvy people working with terrorists were able to compile information from what troops posted. This sometimes led to attacks, and this was discovered from interrogating captured terrorists and captured documents and computer data. The background of pictures often indicated targets for the terrorists, or details of base defenses and American tactics. Islamic terrorists have been quick to use the Internet and other modern technology to plan and carry out their attacks.

Some of this technology can be very dangerous, like the geo-locating capability of many smart phones (which include GPS receivers and location data that hackers can obtain.) Troops in combat zones are ordered to turn geo-locating off while in areas where the enemy could use it. Even without geo-locating turned on, cell phone use can provide militarily useful information. This goes back to a century old practice called traffic analysis. This has been used with great success against terrorists in Iraq, Afghanistan and elsewhere, but it can be used against the troops.

[. . .]

Al Qaeda was long suspected of knowing how to manipulate message traffic in order to deceive our traffic analysis methods. This was rarely the case, but this form of deception has been used in the past with success. For example, when the June 6, 1944 D-Day invasion of France was being planned, a fake army group headquarters was set up in England. Actually, this “army group” consisted largely of a lot of radio and telegraph operators sending a large number of messages that would be normal if the “army group” were preparing for an invasion of France, in an area other than where the actual invasion was going to take place. The deception worked. German traffic analysis experts were fooled and the Germans believed the actual invasion at Normandy was just a feint, a move to get the Germans to send their reinforcements to Normandy rather than were the fake “army group” was going to invade.

Intelligence agencies have to be constantly on the guard for al Qaeda, or any other terrorist group, using this kind of deception. It has happened in a few instances, so a larger-scale attempt is not out of the question.

January 6, 2012

A dinosaur mating ritual: Microsoft rumoured to be buying Nokia’s smartphone division

Filed under: Technology — Tags: , — Nicholas @ 09:06

ESR has the scoop:

Just when you thought the smartphone industry couldn’t get any more soap-operatic, everybody’s favorite pair of aging drama queens — Microsoft and Nokia — may be at it again. There’s a rumor, from a gossip with a good track record, that Microsoft intends to buy Nokia’s Smartphone division.

Inexplicably, there are even some people writing about the rumor who think this might even be a good idea. I mean, a good idea for Microsoft. It probably really would be a good idea for Nokia — they’d get shut of their idiotic alliance with Redmond and unload a crappy, chronically underperforming division for a pile of cash (the rumormonger says $19 billion).

But for Microsoft? Nokia’s brand strength was probably the only thing keeping Windows-phone share as high as 5.2%. It hasn’t been Microsoft’s software doing it, that’s for sure. Botched upgrades and a pathetically weak app ecosystem have only been the most obvious problems.

If Microsoft bought Nokia’s smartphone division, they’d mismanage it into smoking rubble within two years. “But wait, Eric…” I hear you cry, “they haven’t done too badly with the X-Box!” Quite right they haven’t — but that’s because Microsoft runs that division as a cash generator, mostly hands off.

Smartphones, on the other hand, are strategic. That means that if Microsoft buys itself a smartphone division, Steve Ballmer’s going to poke his prong into it. Repeatedly. To, um, what’s the B-school jargon? “Maximize the synergies”. They might even be treated to more demented-monkey ranting. Two years. Smoking rubble.

October 17, 2011

What’s in a name?

Filed under: Media, Technology — Tags: , , , — Nicholas @ 09:22

Jean-Louis Gassée contrasts what was expected and what was delivered:

On 4 October, after months of speculation, Apple finally launched the iPhone 5. The commentariat were ecstatic and approvingly listed the new smartphone’s strongest points: twice the processor speed; seven times the graphics oomph; a new camera with an Apple-designed lens, 8MP and improved image processing; the power of the new iOS 5; iCloud integration and synchronisation with iDevices; a new smart antenna; Siri, the innovative intelligent assistant. And, courageously resisting the temptation of capricious cosmetic changes, the iPhone 5 stayed with Jonathan Ive’s elegant, timeless design.

The preternaturally modest Apple execs cringe at the gushing praise, but what can they do? It’s their cross to bear.

That’s what we expected. Now let’s consider the reality: Same phone, same features, same design, but it’s now called 4S instead of 5. This changes everything. The pundits are indignant: The iPhone 4S is a lame, evolutionary product; the bosses’ presentation (video here) is flat, uninspiring. This dog won’t sell. Apple has lost its mojo.

(Regarding the “flat” presentation, Apple executives knew Steve Jobs was just a few breaths away from his last, but they got on stage and delivered anyway. When news of Jobs’s demise came out the following day, many critics, such as blogger Robert Scobble, had the good grace to apologise to Cook & Co for railing about their subdued performance.)

October 11, 2011

iPhone 4S shows big drop in standby time claims

Filed under: Technology — Tags: , , — Nicholas @ 12:08

The Guardian wonders why, if all the other claims for iPhone 4S performance show improvement over the iPhone 4, the standby time has dropped so precipitously:

Here’s a puzzle: where, or how, did the iPhone 4S drop 100 hours’ standby time?

According to official figures on Apple’s site for the phone, it has a standby time of 200 hours (that’s 8 days and 8 hours). That’s a long time. But it’s much less than the 250 hours quoted for Apple’s first effort at its own phone, the iPhone in 2007 — and it’s far less than the 300 hours given for the iPhone 3GS and iPhone 4. (See the iPhone comparison page on Apple’s site.)

Other battery life figures quoted by Apple marketing chief Phil Schiller during his presentation at Cupertino included lots of data about the new phone (on which the new Siri voice assistant is impressive), and its battery life: 8 hours of 3G talk time, 14 hours of 2G talk time, 6 hours of Wi-Fi browsing, 9 hours of Wi-Fi browsing.

Other battery life statistics for the iPhone 4S’s battery life — 3G talk time, 2G talk time, 3G internet browsing, video playback — are the same or better, apart from the Wi-Fi browsing, which is given at nine hours for the 4S, and 10 for the iPhone 4.

I would note that I never found the iPhone 3G real world performance to be anything close to the claimed 300 hours: 72-96 hours would take my iPhone from full charge to redline. As a rule, I shut down my phone overnight, because it didn’t make sense to leave it on standby using up a significant proportion of the battery while I was sleeping.

And just because I still love Joey deVilla‘s explanation of the prospective iPhone 4S customer dilemma, here it is again:

October 5, 2011

Apple’s new iPhone

Filed under: Europe, Law, Technology — Tags: , , , , — Nicholas @ 10:14

I’ve been following the lead-up to yesterday’s Apple iPhone announcement, as I’m just out of contract on my original iPhone 3G (yes, Canadian carriers only offered 3-year contracts, unlike US carriers who offered 2-year deals). My iPhone 3G still works well: I’m still happy with it overall, but I’m starting to suffer from “aging hardware syndrome”. More and more of the apps I’ve been using are being updated to use the newer capabilities of more recent iPhones and no longer run on my phone. So far, it’s just been trivial stuff (games and non-critical apps) that I miss but didn’t depend on. It’s only a matter of time before one of the applications I depend on (like my time-tracking and billing software or my personal finance app) is no longer supported on the 3G. At that point, I’ll have to either jump to a newer iPhone or find equivalent apps that work on Android phones.

Yesterday’s announcement seems to have caused a lot of wailing in certain iPhone communities — as far as I can tell, mainly because Apple chose to call the new phone the “iPhone 4S” instead of “iPhone 5”. Yes, some people are upset because of nomenclature, even if the updated features are otherwise a nice upgrade over the existing iPhone 4. I’m sure there’s a term in psychology to describe that phenomenon.

Here’s an overview of the new iPhone and its headline software feature, Siri:

Siri really works, and it’s quite clever
I got some time to test it hands-on, in a booth in a fairly busy room of journalists. “What’s the weather like outside?” I asked. It came back with the weather in London (where I was). “What’s my father’s email address?” It came back with two email addresses for the person designated in the address book as “father”. Not what you’d call a comprehensive test, but it shows that it’s location-aware, context-aware, and works without training. (By contrast, I just tried “Siri app” on voice search on my Google Nexus S running Gingerbread: it took me to the web page for Syria.)

Siri is integrated through the whole phone
You press the home button and the interface comes up. Then ask it anything. It’s very neat. It uses Siri’s servers, so you’ll need a working connection.

I don’t know that I’d get much use of the Siri features, but I’m sure it will move a lot of phones for the “coolness” factor.

The iPhone 4S really does look and feel exactly like the iPhone 4
There’s no difference at all, externally. Apparently the iPhone 4S is very slightly heavier — 139g (4.9oz) v 136g (4.8oz) — but you’d need a very sensitive hand to detect it.

This is probably a good move on Apple’s part (aside from the well-publicized complaints about the iPhone 4’s antenna issues), as it keeps all the companies that produced accessories for the iPhone 4 happy — they don’t need to create a whole new line of things for the iPhone 4S. The push for mobile phones to standardize on mini-USB connectors is why Apple will be selling dongles to convert from the current 30-pin connector on the iPhone to mini-USB. Again, it meets the expectations of both regulators and third-party manufacturers. I suspect Apple will be pushed to provide the dongles as standard equipment for European markets.

The camera in the iPhone 4S is now an 8MP (up from 5MP in the last model), and is claimed to be much faster:

Taking pictures on the 4S is much quicker, and taking extra pictures is too
I tried the camera on taking pictures, and the setup is really fast. It takes more pictures quickly too — almost like firing the motordrive on an SLR camera. Apple says it takes 1.1 second to get to the “click” part — faster than any in a list it provided — and that it’s then just 0.5 second to take another one. It’s impressive: camera setup delay is one of the niggles of modern life (especially smartphone life) that has crept up on us without anyone doing very much.

Overall, the 4S looks to be a nice, incremental upgrade over the iPhone 4, but Siri is the most interesting new development.

In other news, however, Apple’s recent resort to “lawfare” against Samsung in Europe may rebound badly:

Apple’s new iPhone 4S faces the prospect of court injunctions in France and Italy from the Korean electronics firm Samsung, which says the phones breach patents it owns on wireless communications.

It is an escalation of the struggle between Samsung and Apple, who are fighting a number of increasingly bitter court battles in various territories around the world. Samsung, which is challenging Apple for the title of the world’s biggest maker of smartphones, says it plans to file preliminary injunctions in Paris and Milan on the basis that the iPhone 4S, announced in California on Tuesday night and expected in a number of countries including the UK from 14 October, infringes its patents on WCDMA technology.

Update: Speaking of Android phones, here’s Alun Taylor with a list of ten smartphone alternatives to the iPhone 4S:

Yes folks, it’s that time again when across the land otherwise rational and even sensible adults feel the need to whip themselves into a frenzy over the pending arrival of the latest iPhone.

To be honest, I find the whole charade rather entertaining and have taken to sauntering over to the Trafford Centre come launch day, grabbing a cup of coffee and a sticky bun, pulling up a chair and making fun of the twerps lined up outside the Apple Store opposite.

Yes, I know it’s wrong, but just like laughing at Daily Mail readers or at anyone who voted Liberal Democrat in the last general election, I simply can’t help it.

With Android devices now outselling iOS phones by two-to-one there are many, many alternatives if you want a good smartphone with access to a shed-load of apps but don’t want to take the Apple shilling.

So here are ten of the best Android-powered alternatives. In case you’re wondering why I’ve avoided any of the recent 3D phones like HTC’s Evo 3D or LG’s Optimus 3D, that would be because it’s a stupid technology bereft of point or purpose.

Remember, if none of these handsets put their hands up your dress, the next few months we will see the arrival of Samsung’s phenomenal 5.3in Galaxy Note; Sony Ericsson’s 1.4GHz powerhouse the Xperia S; Google’s Android 4.0-packing Nexus Prime; and LG’s LU6200 with its 4.5in, 1280 x 720 IPS screen. Choice — by gum, it’s a wonderful thing.

Update, the second: Joey deVilla explains the prospective iPhone 4S customer dilemma:

September 1, 2011

Did Google buy Motorola Mobility just for the tax advantages?

Filed under: Economics, Europe, Technology, USA — Tags: , , — Nicholas @ 12:12

If so, it was probably a brilliant move:

I think we all know that Google’s pretty good at, um, obeying tax laws to the letter. For example, they’ve paid an entire £8m in UK corporation tax on revenues of some £6bn from 2004 to 2010.

[. . .]

However, this deal to purchase Motorola Mobility might be a coup to beat that hands down. The headline price to purchase the handset-maker and their bundle of patents is $12.5bn but that’s not what the net cost to Google might turn out to be. How about $3.8bn for that? For, along with the company and the patents, Google has also bought a series of tax losses.

For the record, it’s cheap politics to accuse a person or a corporation for paying “only” so much tax. If the politicians have set up the system to allow certain deductions or credits, then you’re insane not to take advantage of them. Like a number of headlines over the last day or so, pointing out that this or that company paid less in taxes than they paid their CEO. If the company paid more than it should, it’s depriving its shareholders of what they are rightfully due, and will likely be facing them in court.

August 29, 2011

Freedom, Science Fiction and the Singularity: A conversation with author Vernor Vinge

Filed under: Books, Liberty, Media, Technology — Tags: , , — Nicholas @ 17:12

August 25, 2011

ESR: what now for Apple in the wake of Jobs’ resignation?

Filed under: Media, Technology — Tags: , , , , , — Nicholas @ 09:58

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.

August 15, 2011

Google buys Motorola Mobile: it’s all about the patents

Filed under: Law, Technology — Tags: , , , — Nicholas @ 13:03

At least, so says Eric S. Raymond:

We’ll see a lot of silly talk about Google getting direct into the handset business while the dust settles, but make no mistake: this purchase is all about Motorola’s patent portfolio. This is Google telling Apple and Microsoft and Oracle “You want to play silly-buggers with junk patents? Bring it on; we’ll countersue you into oblivion.”

Yes, $12 billion is a lot to pay for that privilege. But, unlike the $4.5 billion an Apple/Microsoft-led consortium payed for the Nortel patents not too long ago, that $12 billion buys a lot of other tangible assets that Google can sell off. It wouldn’t surprise me if Google’s expenditure on the deal actually nets out to less – and Motorola’s patents will be much heavier artillery than Nortel’s. Motorola, after all, was making smartphone precursors like the StarTac well before the Danger hiptop or the iPhone; it will have blocking patents.

I don’t think Google is going to get into the handset business in any serious way. It’s not a kind of business they know how to run, and why piss off all their partners in the Android army? Much more likely is that the hardware end of the company will be flogged to the Chinese or Germans and Google will absorb the software engineers. Likely Google’s partners have already been briefed in on this plan, which is why Google is publishing happy-face quotes about the deal from the CEOs of HTC, LG, and Sony Ericsson.

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 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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