Wednesday, August 22, 2007

AT&T Bill Fiasco Reveals Industry Secret

As you undoubtedly heard, the first round of AT&T bills were sent to iPhone early adopters last week. Many were delivered in boxes and most were dozens of pages long, with some known to be nearly 300 pages long. What you did not hear was that a deep dark cell phone industry secret was revealed by this minor SNAFU: this fiasco never happened before despite the fact that AT&T has presumably at least a few million users of other fancy phones, despite the fact that the billing system is the same. Why not? Well, it's not because the billing system was magically screwed up for the iPhone launch. The billing system would have sent phone bills dozens or hundreds of pages long to users of fancy "Smart phones" like the Windows Mobile Phones if they had ever bothered to access the internet dozens of times a day, like iPhone users are clearly doing.

iPhone is clearly different. The billing system was the same. iPhone users are, well, using iPhone internet access, Google Maps, and other features with a frequency not seen among users of other high end cell phones.

This article describes the billing fiasco in detail: iPhone bill is surprisingly Xbox HUGE (lol).

Another example of the enormity of the bills.

Thursday, July 19, 2007

See, the thing about the logo is this

So somebody in the trenches got a bright idea to use the Yin Yang to reinforce the association between Windows and Office. Nicely done, making it look so much like the Apple logo for Universal binaries, right down to nearly the same colors, and flipping the image a bit. In a year, most of the world will think that Apple copied us. Just like they do with most of the other stuff. People think we invented the floating on-screen window. People think we invented just about everything we stole.

Monday, July 2, 2007

The Apple Approach

Don't you just love this Burton Smith guy? I hired him, don't let Ballmer tell you any different. He didn't want to talk this smack about Apple at first, but we hung out for a while, offered him Kool Aid now and then. He came around.

Burton Smith as quoted by El Reg:

Facing up to parallelism
"Reinvention" could make all of that obsolete almost over night. It is not a route that he favours, however. "One option with the move to parallelisation is to simply wipe the slate clean and start again with something new," he said. "This is what I call the Apple approach, where a great new technology is introduced with not much thought given to the pain it might cause users of an earlier technology. But we have to take existing users with us."

El Reg is still my favorite tool. They are so snarky that hardly anybody realizes that they actually are an MS Tool. I just love how they let our guy slip that comment in, with nary a passing reference to the fact that it's Apple who has a marvelous track record of integrating new technologies without completely horking over their existing customer base. They switched processor architectures from PowerPC to Intel and their customers scarcely noticed, save the new machines had snappy dual core architectures. Some years before that they managed a similar transition from m68k to PowerPC. The transition from Mac OS 9 to the UNIX based and entirely different Mac OS X went far better than industry pundits and analysts predicted. In fact, these recent transitions, to a new UNIX OS and new Intel CPU, went so well that their market share started growing again.

Apple just pulled off another transition, the port of Mac OS X to the ARM processor architecture, so smoothly that nobody even talks about the fact that they had to port the system to a new platform at the same time as they were re-inventing the entire approach to software on a cell phone. They sure didn't disrupt any users in that scenario, but they damn sure disrupted an entire industry over the weekend, an industry they were not even a player in last week.

Meanwhile, we at Microsoft force our customers to upgrade MS Office en-masse by tweaking file formats every release, and by making sure that the file format architecture precludes forward compatibility. I just love that scheme. Whenever somebody mails out a copy of an Office document from a new MS Office version to a bunch of people, the upgrade orders roll in. Ka-ching!

El Reg doesn't even mention that we try our darnedest (we really do!) to force everyone to throw out their old hardware and get new hardware as often as possible. By contrast, Apple tries to support the oldest Apple hardware they can, even laying hardware foundations like adding USB to all machines or increasing the baseline RAM in new systems. See, Apple does this because it helps boost the Apple presence in the market. Customers who would buy new machines do so anyway, but if the older machines are still useful, they are typically gifted to someone who then becomes an Apple convert. The next time they buy a new machine, it's an Apple. Reg is helping us seed the meme that Apple disrupts their customers, when in reality, Apple's lust for open standards is only disrupting the Microsoft mind-lock on the industry. El Reg, long may you obfuscate.

Sunday, July 1, 2007

Non iPhone pour moi

I don't have an iPhone yet, not for lack of trying. I feel strangely calm.

Saturday, June 30, 2007

Protect Your iPhone... From Theft!

Here's an excellent iPhone theft prevention device which works on the same tried and true security principle as birth control glasses. Available at the AT&T Wireless stores, probably including those that already ran out of iPhones.

In fact, this device is probably a two-fer. In addition to preventing iPhone theft, it is undoubtedly provides effective prevention of user participation in actions which might lead to pregnancy. They may not have FDA approval for pregnancy prevention, so it's probably off-label use only, not mentioned in the product literature.

Friday, June 29, 2007

Separated at Birth: Greg Packer & Leon, escaped replicant

The photographs below show Greg Packer, camping out for an iPhone, and Leon, the escaped replicant. Clearly Greg Packer is a Leon model replicant. When I first saw this dude camping out, I knew I'd seen him before somewhere.

Greg, a Blade Runner will be dispatched shortly to retire you. You don't realize it yet, but one of the many reporters who will interview you will administer a Voight-Kampff test. Blade Runners have seen a sample of your interview performance with ordinary reporters and are highly confident in your identification. It's quite likely you'll be retired before 6:00 PM on Friday, so you probably won't get to hold an iPhone. Sorry about that.

Thursday, June 28, 2007

Apple ships iPhone; Nokia responds by "restructuring"

It's time to short Nokia.

A quick check as Nasdaq shows that investors today bought Research in Motion, Palm, Motorola, and Nokia stock, while selling stock in Apple.

As everyone on Wall Street knows, Apple will ship iPhone tomorrow.

This week Apple announced:

Furthermore, Steve Jobs boosted Apple employee moral to the stratosphere by promising to give all 17,787 employees an iPhone in July.

Today Nokia responded to this onslaught of new technology, new business models, and clever talent retention tactics from Apple by issuing a press release, which describes their internal restructuring plan and layoffs of 700 employees. This plan follows only three years on the heels of their previous restructuring plan, and undoes (puts three groups together) most of what the last plan (put three groups asunder) did.

Short Nokia. That's all I'm saying. Short Wall Street, too. 'Tards. Fell for the old "lay some people off to stop the stock free fall" ploy.

iPhone accessory makers kept in the dark, grow mushrooms

At the D conference a few weeks ago while chatting with me and Walt Mossberg and that other lady, Steve Jobs mentioned that he thought Microsoft was much better at partnerships than Apple, particularly in the early days.

It looks like it's still true. Here's what CNN has to say about it:

Accessory Makers Zero In on iPhone
Even the most enthusiastic manufacturers said creating formfitting iPhone accessories was an enormous challenge.

A notoriously tightlipped Apple kept many partners in the dark on precise specifications, and some of the company's most trusted accessory manufacturers still have not touched a genuine iPhone.

To compensate, many cribbed size and weight specifications from Apple's Web site, then created models out of wood, cardboard or plastic. They shipped models to Apple for advice on whether headset and other outlets were placed correctly. They adjusted and resent revised versions to Apple.

Many made educated guesses about curved moldings or the location of the proximity sensor, which turns off the touch screen when near the user's face. A one-millimeter error could result in headsets that come unplugged or an uncomfortably hot screen. (Watch people lined-up outside NYC's Apple store waiting to be the first to own an iPhone )

"The engineering aspects were a huge challenge," said Marware Inc. sales manager Sean Savitt.

Of course, the NSFreePublicity object might require that the measurements detailing the locations of buttons and speakers and microphones and SIM trays and whatnot be kept secret for six months after iPhone was announced and before it was shipped.

Somehow I suspect that this is an indication that Apple still has some lessons to learn about partnership.

Camping Out for iPhone

Will their be a million people seeking to buy on the first day? It looks that way. People started camping out to get an iPhone at bigger stores on Monday. First in line, apparently no surprise to some New Yorkers, was Greg Packer.

Why would they camp out for a cell phone? Concert tickets, sure, but a cell phone?

Steven Levy (At last, [the] iPhone) describes his own experience with iPhone this way:

"I was able to keep up with my e-mail, negotiate my way around the downtown, get tips on the city from an old friend whose number I don’t normally have handy, check the weather conditions in New York and D.C., monitor baseball scores and blogs, listen to an early Neil Young concert and amuse myself with silly YouTube videos and an episode of “Weeds,” all on a single charge before the battery ran down. Now, just about all those things could have been done by devices that are already out on the market. But considering I’d had the iPhone for just a day, and never taken a glance at a manual, it was an impressive introduction. In contrast, I’ve had a Motorola handset for two years and am still baffled at its weird approach to Web browsing and messaging."

Many of the reviews are saying similar things. No need to read a manual to do all this cool stuff with iPhone.

The Commercial is the Instruction Manual

If you've seen the iPhone commercials, or maybe the iPhone Guided Tour at the Apple web site, you pretty much know how to do all those things with iPhone.

This is the product of two and a half years of interface design and polish at Apple. The interface is so well designed that the commercial which sells the product is also the instruction manual. That is truly ground breaking.

Ending the Paradigm of Customer Abuse

Contrast this with the experience of the typical Verizon customer. They bear as a cross phones that feature bluetooth for example, but don't let them copy pictures to their bluetooth-enabled laptop or sound files to be used as ringtones from their laptop to their phone. They are tormented by things that they should be able to do with their phone, things possibly fun or even useful, but things so difficult to do that they don't actually do them. Verizon does this to them on purpose. The company is so scared by iPhone that they actually issued talking points (which include a few outright lies in addition to the half-truths and innuendo normally associated with the practice). They are not the only competing wireless carrier to do so, either.

The wireless carriers are all terrified of what will happen when there are a million people running around, just using their iPhone. The gulf betwixt iPhone and everything else on the market is pretty wide.

A friend of mine with a Verizon phone, just the other day and entirely unprompted (we had been talking about artificially enhanced breasts, and then moved on to air pollution), mentioned his new phone, saying, "This phone has a camera. It does all kinds of other stuff, too, but I can't figure it out. The manual is three hundred and eighty seven (387) pages long, and it's so poorly written that I can't understand it. It's like it was translated by a machine from the original Chinese and not edited by a native speaker."

He was probably exaggerating by only a hundred pages or so. I've seen those manuals. Most cell phones have them. Most people don't use most features of their phone, for lots of reasons that iPhone fixes.

That changes, tomorrow.

Hype is overrated

That's why people are camping out to be one of the first to get an iPhone. The level of consumer interest in iPhone, unprecedented in the cell phone industry and perhaps even exceeding the interest in the most popular gaming consoles ever, has nothing to do with "hype". It has everything to do with pent up consumer demand, to be unleashed by Apple on Friday at six in the evening.

People Ready iPhone

Damn bloggers are so unpredictable. Who forgot to pay this guy? You're fired, whoever you are.

people ready software

iPhone-o-nomics: 1 million to be sold on day 1?

This morning, iPhone penny dropped. It bounced from the balcony in the Rotunda of the Nebraska State Capital building, as I lay, incognito and nondescript, in the center of the the cool marble floor below, a loud slow bounce, fading to softer quicker bounces, and finally a rolling, twirling stop (limp simulacrum available from groovy site, The FreeSound Project).

I had been pondering something that bugged me about Steven Levy's iPhone review ( At Last, the iPhone ), in which he says:
"Instead of going through the usual complicated contract signing and credit-vetting ceremony with a fast-talking and slow-processing salesperson, Apple has come up with a startling idea: you simply buy the thing and go home."

One million iPhone

Apple is going to sell a million iPhone the first day.

Well, more properly, Apple are preparing to sell a million iPhone, starting on Friday with a four hour sales window, continuing through the weekend, and capped off with a press release to be issued Monday or Tuesday. They think they can do it.

They stand a non-zero chance of reaching that goal. It would be difficult, and no other cell phone has ever done anything like this on launch day before. In fact, it would be difficult for AT&T alone to sell a million cell phones in a single day under normal circumstances. If things go horribly awry, they'll still sell a million iPhone the first week, and probably take the banner for most impressive cell phone launch of all time.

How to sell a million cell phones: iTunes

I don't think they could do it without iTunes. See, the way things operate today, before iPhone and iTunes, it takes a minimum of about 20 minutes to get into the store, get a phone, choose a plan with the assistance of the helpful staff, register, and activate the phone. This doesn't count the time you'll spend waiting around the store because the guy ahead of you is asking how to configure email on their BlackJack.

iTunes takes probably at least 15 minutes of that process and puts it in control of the customer. They can register with iTunes, which they already know how to use. They can do it at home without a salesperson annoying them. They can do it reliably, securely, and easily, using the world's most popular non-browser e-commerce solution, iTunes.

To prepare for iPhone Day ("iDay" inside the company) AT&T hired, on average, an extra sales agent for each of their 1800 stores. They seem to be limited to an average of three check-out sales agents per store, due to the number of cash registers available. Unlike most days, they will be fully staffed on iDay. AT&T has about 1800 stores x 3 registers per store x 4 hours to sell iPhone from 6 p.m. to 10 p.m on Friday x 60 minutes per hour, for a total of about 1,296,000 minutes to sell phones. At twenty minutes a phone that's a paltry 64,800 phones. With all three registers staffed and other staff in the store to handle questions, at three minutes per transaction AT&T could possibly sell over 400,000 phones on Friday night, over 200 phones per store on average.

There are only 200 Apple stores, but they sport sales agents equipped with wireless, hand-held point of sale terminals. They can probably sell an iPhone every three minutes per employee, and they can probably staff as many as five or six per store on iPhone Day. Big stores might have even more. Apple can probably sell 500 phones per store in 4 hours, for about 100,000 phones on launch day. Almost certainly they will.

Clearly the retail infrastructure will be unable to sell a million phones in four hours on Friday, though they could probably do it through the weekend. However, this estimate doesn't include the wild card: The Apple Store online. There could be quite a few people betting on FedEX as the best way to get an early iPhone, less hassle, no camping on the streets of Manhattan. Apple might easily pick up the extra half million sales online.

How to sell 100 Million iPhone

The iTunes-based iPhone registration system is designed to shake up an aspect of the cell phone industry that hasn't been much discussed, with the focus on all the cool iPhone features. That twenty minutes hanging out in a wireless store to buy a phone isn't really high on the list of things people don't like about their cell phones. In fact, I've never heard anybody mention that, ever.

It is, however, a bottleneck for selling phones.

If you want to sell 100 million iPhone, like you sold 40 million iPod last year, you have to change the very mechanics of how phones get sold. It may not happen until the exclusive ATT agreement has expired and iPhone models for other vendors are created, but eventually iPhone will be available for sale at BestBuy, as well as many if not all of the other thousands of locations where iPod music players are sold today.

Apple is going to try to sell 1 million iPhone on day 1. There is a chance they might miss by half, and if they do, it will still be the most successful launch of a product in the cell phone market, and in consumer electronics in general, of all time.

(Bootnote: Steven Levy is not to be confused with Steven Levitt, co-author of Freakonomics.)

Wednesday, June 27, 2007

Ballmer ticks me off

I finally broke down and called Steve to see if he would arrange to put an iPhone in a secret drop location for me to have Smithers have somebody pick up. A while back he said he would, but Ballmer told me I couldn't have one. I finally figured I could get one if I damn well wanted, and thought it might be fun to get one early. I was even going to tweak Ballmer. Smithers was going to call me while I was in a meeting with him, so that lovely Marimba ring would go off in my pocket. I was going to ignore the ring. Smithers was going to call back. It was going to drive him absolutely nuts.

But Steve wouldn't take the bait. So I asked him flat out, and he kinda hemmed and hawed a bit, then he mentioned something about having somebody set it up and get back to me. I figured my chances were about those of a snowball in hell of getting one early.

Then he blogged about it. Gates Just Called.

This is the Steve Ballmer interview that he mentions:

Ballmer wins again. He's a smart guy, you see. He mouthed off about the iPhone on purpose, knowing full well it would tick Steve off and I wouldn't get an early iPhone. Bastard.

Flash in the pan

There's been a lot of discussion about iPhone's lack of Flash support in the iPhone Safari web browser. What I haven't seen is a frank discussion of Flash, nor any real insight into why it's missing from iPhone. Safari has Flash support on the Macintosh, and now on Windows, too. Apple could have Flash support in iPhone by six PM tomorrow (iPhone Day) if they wanted to. Apple doesn't want to.

Flash Sucks (TM)

There is a reason, a real valid reason, why Flash isn't supported by iPhone. Flash sucks. It sucks big time. It sucks in ways that offend browser developers, operating systems designers, web site developers, and users of their products. Flash is a steaming pile of poo. Flash has the same problem that all the various incarnations of Symabian have, the same problem that Palm OS has, and will have even worse when it's layered on top of Linux.

Flash is Adobe's clandestine attempt to provide a miniature operating system inside a web browser, and they botched it. They didn't give the task to operating system developers, and they didn't even acknowledge to themselves, at first, what they were really doing quite possibly because they were unaware until it was pointed out by others. Consequently, a whole bunch of wheels, round in the OS universe, have some number of corners in the Flash universe.

For the consumer, the result is somewhat flashy, somewhat cool toys that run in web browsers, but do so quite poorly. Flash applications and web sites typically don't look all that sexy, except by comparison to HTML, which isn't a very high bar. Flash issues contribute to performance and stability problems. Flash makes decent web browsers look bad.

Flash Sucks. Few People Notice. Details at 11.

These problems manifest on desktop and laptop systems (of all kinds), but there is so much extra horsepower these days that people don't much notice how bad Flash really is. On a device like a phone, however, poor Flash performance could lead to an overall poor phone experience. Apple is forgoing Flash not merely to ensure a good experience for iPhone users, although that's certainly a primary motivation. Apple has another plan, and unfortunately for my little empire, it's not Silverlight.

Steve is going to try something bold. He wants the web to suck less. He wants the web to be as cool as OS X.

Apple's Secret Plan to Fix The Web, Part II

Apple is going to try to boot Flash right off the web.

Apple probably won't move on this front until next year at WWDC, at the earliest. The timing will depend on how rapidly the Safari market share of web browsers grows, but you should be able to see this coming. Safari for Windows has some of the parts already, and QuickTime for Windows has some of the other parts. The infrastructure parts of it will very likely be an open source project, already ported to Windows before it's announced.

When they have all their ducks in a row, Apple will introduce a new web plugin for Safari, possibly FireFox, and maybe even Internet Explorer which puts a nice programming layer on top of Apple's core web technologies, exposing them directly to web designers. The foundation technologies of Safari on Windows will be tapped directly. You'll likely see an elegant Apple designed API for web development exposing parts of Core Foundation, Quartz Extreme, QuickTime and, importantly, Core Animation. It will make Flash look and feel like the toy that it is, and Flash will be tossed on the scrap heap of forgotten technologies.

It's another small part of Apple's Secret Plan. If Apple's able to swing this, and it may take years, people will call it Web 3.0. It will really be Web X.

Saturday, June 23, 2007

Apple/YouTube skateboarding dog is Zune Brown

Nobody seems to have noticed yet, but the skateboarding dog in the new "YouTube on iPhone" commercial is brown. Zune brown.

Here's the ad: You'll be Surprised (iPhone ad)

Ballmer will have a cow, or throw a chair or something. He's a little slow on the uptake sometimes, but he'll know that you did this on purpose, Steve. I bet some poor schmuck spent hours color correcting that video to get it just right. You kept sending them back. They didn't even know what color you had in mind, because you had to keep the secret and couldn't just hand them a Zune and say "match this". Bastard.

Thursday, June 21, 2007

The Case of the Missing Browsers (Why the iPhone Can't Fail, Even If It Flops)

The month following June 29 will radically alter the cell phone industry. The pundits of the Information Technology ("IT") trade press are all over the map with comments and theories about the iPhone and whether or not it will "succeed" in the market. They appear to have universally overlooked the most important information available to help them understand the impact that iPhone might have, and that is data that has very little to do, directly, with iPhone itself: the missing cell phone browsers. (The fact that this is a typical type of failure for the analysts explains why I'm the Richest Man in the History of the Planet Earth, and they continue to schlock out the crap theories about what the Billionaire Geek Boy Club will be up to, NeXT (pardon that last pun, please.)) It's pretty amusing, too, since most of them don't even realize that they are my tools.

An entire cottage industry has grown up to convince you that iPhone will fail. I can assure you that there is no possible way that iPhone can fail, even if it's a flop, in the way that Windows Mobile has failed.

The Missing Browsers

The cell phone market and the "smart phone" segment of that market in particular have been extremely successful at delivering phones that have web browsers built in, and selling those devices to prospective users. It has utterly failed to convince those same people, who pay hundreds of dollars for these phones, and hundreds of dollars per year for data service plans, to actually use their cell phone to access the internet.

This chart shows the browser market share, broken out by specific browser version.

Market Share for Web Browsers (by Browser Version)

You can see on that chart that Opera Mini and Pocket Internet Explorer, for example, have a tiny, almost imperceptible market share, around 1/10 of 1% each. An old version of Safari that hardly anybody uses has about seven times the market share of any cell phone browser. This is a curious fact, considering the recent announcement that 100 million phones running the most advanced Symbian operating system have been sold to consumers, and many tens of millions of phones running various versions of Windows CE/PocketPC/Mobile have been sold.

Beyond a doubt, many many millions more cell phones have been equipped with those browsers than there exist Macintosh computers with the old version of Safari installed, probably at least five or ten times as many.

Cell phone browsers should easily account for several percentage points of the browser market by now, three, five, or even nearly ten percent. Where are the missing browsers? Clearly people don't use the browsers on their cell phones.

Why People Don't Use the Web on Their Existing Phone

If you ask people, these are the reasons you hear about why they don't use the browser in their phone:

  • The interface on the phone is so poor that the user doesn't realize it has a web browser.

  • The interface on the phone is poor, and the browser is "too hard to use, it's not worth it".

  • The screen is too small, it's too hard to read.

  • The browser is too slow.

  • The network is too slow.

  • It's too hard to use for the few things that I want to do from the phone (getting directions with MapQuest or GoogleMaps, looking up phone numbers, checking stock prices). I can just wait and use my laptop for everything else.

There are undoubtedly other reasons, but these are the big ones.

Why people will use the web on iPhone

iPhone is poised to change that. It provides several things that other web-enabled phones don't provide.

  • a large (3.5 inch), high resolution (320 x 480), high density (160 pixels per inch) screen, in other words, a sharp, readable image (see: iPhone technical specifications)

  • an interface that is so easy to use, your Mom can learn to drive it by watching a television commercial (see: Watered Down

  • seamless, automatic switching to WiFi where available, for high performance (Don't believe it? It's been working for years on Mac OS X)

  • EDGE for wide coverage (albeit slow "2.5 G" network performance)

  • synchronization of bookmarks with your PC

  • a high performance hardware platform fully exploitable by a finely tuned operating system

    (OS X provides SMP (symmetric multiprocessing) which allows it to exploit dual core ARM processors either now or in the future if needed, and it has built-in support for certain asynchronous multiprocessing capabilities, like offloading tasks to a GPU (graphics processor) or H.264 video encoder/decoder chip, which allow Apple's iPhone engineers to take advantage of hardware architectures not easily exploitable by other systems, for example)

With the major issues dramatically improved or solved outright by iPhone, you will see something you haven't seen before, which is people actually using web services from their phone. The way you see text messaging today, you'll see web services tomorrow, in airports, in bars, out shopping, out hiking in the park, pretty much everywhere.

Sure, in some cases it's a custom application accessing those services. However, don't let that distract, in fact it's part of the lesson. iPhone provides a couple new ways to use web services from the device, and they'll all add up to an impact on the web that no other phone has ever had. It's possible that the custom apps on the iPhone, like the Google Maps & YouTube viewers and the weather and stock price widgets, might even identify as Safari or WebKit, since they use the WebKit to render web content on the phone, even though Safari isn't used to directly access the web services. This would also have the side benefit of helping iPhone show more prominently in the web browser market share statistics.

What if iPhone really is a flop?

So suppose iPhone is a bust. Suppose it falls utterly flat in the market. Suppose only the handful of die-hard Macintosh geeks buy them, and the legion iPod users keep on buying plain jane cell phones and ordinary iPods without a cell phone built in?

Well, if the most pessimistic of pundits has their fantasy come true, then iPhone will still sell several million units between now and this time next year. Inertia will guarantee that.

iPhone, in the absolute worst case scenario cannot possibly fail to rise, almost overnight, to the top of the charts for cell phone based web browsers. If it sells only half of Apple's announced goal (10 million units by December 2008), it would be a disaster for Apple. The value of AAPL would fall by as much as a third when people realized the sales numbers were coming in lower than expected.

If only half of those users actually use their browser, iPhone will become, overnight, the dominant cell phone browser platform, with a market share several times that of other phone based browsers, combined. This will happen no matter how bad of a flop iPhone turns out to be, and it won't be a flop.

And that will bring a revolution to the industry. It will usher in the first mobile internet market, and Apple will dominate it, decisively.

iPhone Commercials, cell spikes, and market research

My moles tell me that some clever statistics wonk at one of the big cell phone providers has been looking for correlations between spikes in cell phone traffic and the appearance of new iPhone commercials on television. They think it might give them an indication of the level of interest that their own customers have in switching to an iPhone.

The data hasn't been presented to management yet. The geeks in the trenches thought of the idea. Apparently the answer is, "yes, our customers are paying attention to the iPhone."

Surface (by Microsoft)

Well, it had to happen. I'm surprised it took this long for somebody to compare Microsoft Surface, the touch sensitive table, to the iPhone.

I told Ballmer the timing was all wrong. Sometimes you just gotta let the new CEO strike his own path. Unfortunately, his path seems to be into oblivion.

Wednesday, June 20, 2007

I love my tools!

I don't know who this tool is, but he's my tool: Guy Kewney. Obviously he's a little bitter that he can't get an interview with Steve Jobs. Hint: spreading false rumors that you made up about his failing health and insinuating that he spreads rumors about Apple to inflate the price of AAPL isn't likely to win you any executive level friends. There isn't a CEO in the country that would consent to be interviewed by you now, Guy, not even me, and I'm just The Chairman.

Keep up the good work, though. Your check is in the mail. Tool.

Tuesday, June 19, 2007

A Picture is Worth 1000 Morons

I never cease to be amazed at how smart people can be so fraking stupid. Take John Lilly, Mozilla's chief operating officer. This little piss ant thorn in my side was handed a gift on a silver platter by Steve Jobs at WWDC, but he's too stupid and arrogant to read the tea leaves that Jobs spread out on the table before him. Those tea leaves say:
"Safari and FireFox,

sittin' in a tree


first comes strife,

then comes free publicity,

then comes the open standards based Internet in a baby carriage!"

What Steve Jobs Knows that John Lilly Doesn't

Five years from now, WWDC 2007 will be known as The Stealth Keynote. Lilly's worldview doesn't much encompass reality beyond the web browser on the PC on his desk. Steve's Jobs thinks big. Really, really big. There were other hidden messages in the Apple WWDC 2007 Keynote Address that I'm honestly too fearful to discuss right now. I haven't slept well since I saw the address on the web that night.

Phishing for free publicity? Piss off the open source "community!"

Steve knew exactly how to play John Lilly. Steve cast his line and set the hook like a skilled angler, reeling in Lilly casually, while Lilly thrashed and fought. But why the stealthy coy angler play? Steve is good, really good, at getting what he wants from people, directly. Steve could persuade the FireFox team to come work for Apple, or join forces with Apple, or even pack up and go home with half his brain tied behind his back, but that's not what he wanted.

Steve knows that Safari for Windows will help FireFox in the long run. Safari 3 (for Windows, Macintosh and iPhone) + FireFox 3 + Opera 9 + Nokia's WebKit based browser will result in a free, open standards-based Internet. Steve also knew that he needed two things that would never happen if he just called up the FireFox team and the Opera team and said, "Hey Guys, I have a plan. If we work together, we can crack the internet wide open. We can take it back from Microsoft." Jobs needed:

  1. Free publicity. Lots of it, to get people to try alternate browsers.

  2. A fire lit under the fat and lazy FireFox asses. Or fear of iGod. Or Something along these lines, to get the open source browsers to raise the bar for what a browser should be.

John Lilly played right into Steve's hand. He got mad, and he blogged, making sure that his team and his legion supporters would get mad, too, and try to kick Safari butt. (See: A Picture’s Worth 100M Users???). It was quite the rant, really, all on about how Steve Jobs showed a pie chart that revealed his secret plan to kill FireFox. What a boob. And it worked. Steve got free publicity, lots of it and it's still coming. (See: Mozilla exec claims Apple is hunting open source and Browser wars: Mozilla exec calls Steve Jobs 'out-of-date').

Even better, for Apple, the open source browser teams were infused with a new sense of passion that they haven't shown a hint of since the Google ad revenues started flowing into Mozilla corporation. These guys are so mad that they might actually make a reasonable browser for the Macintosh at long last.

The Other Reason Why Apple Created Safari, Way Back When

It's easy to forget, what with the behemoth of Microsoft appearing to dominate everything in the IT world, but it was the incompetence of FireFox and Opera, not merely the abandonware of Internet Explorer on the Macintosh which drove Apple to build its own browser, Safari, to begin with. If FireFox on the Macintosh hadn't sucked, Apple might well have simply bundled it. FireFox would have another 5% of the market today if they hadn't been such

A Small Part of Apple's Secret Plan

Yeah, Steve's pie chart conceals a secret plan, all right, but killing FireFox and Opera is defintely not the plan. I wrote about part of Apple's real secret plan, and I show the pie chart that Jobs hopes to show at WWDC 2008, in my discussion of iPhone, Safari for Windows, and the open, standards-based internet. Here it is again, for your review.

In a nutshell, IE will be the loser, because the total market share of browsers that pass the ACID Test (and thus enforce open standards rather than bug-for-bug compliance with the intentionaly broken Microsoft Internet Explorer) will be too high for web designers to ignore.

Jobs knows this. He also knows it can't happen unless the FireFox team aims higher. They can't just be "FireFox: We're a different browser! We're Free! Try us! Open Source is Cool!" They need to be: "FireFox: We're better than IE, better than Safari, and faster than both."

How can a tiny little open source project like FireFox compete with big mean Apple that wants to kill them, you might ask, in all innocence, after reading John Lilly's blog. Well, they thought they were competing with Microsoft just fine. Unlike most open source projects, FireFox is quite well funded. They make money from all the Google ads that people are shown and click on when they use the built-in search box. The figure I've seen tossed about is that they made $40 million last year. They are a non-profit corporation.

Mozilla (Maker of FireFox) Is A Big, Well Funded, Software Company

Apple doesn't spend very much developing Safari, as far as my moles tell me. By my estimate, based on the surprisingly small Safari team size, the Apple yearly budget for Safari is less than $4 million per year. It might be as little as half that. (This is particularly interesting given the recent Windows port, and the iPhone version of the browser, both developed in the past year or so, alongside, and against the same codebase, as, Safari 3)

The Mozilla Foundation employs about 60 people and raked in over Forty Million Dollars last year (one estimate said it was $52 million, I haven't consulted an authoritative source, but forty to fifty million is the ballpark). Mozilla Foundation probably spends more than Apple on actual development of FireFox, and they are certainly funded to dramatically outspend the Safari team, if they determine that they need additional resources to compete. (If anybody can find a link to the Mozilla Foundation's budget for 2006 or 2007, drop me an email.) FireFox supports additional platforms too, (notably Linux), so it's reasonable to expect the FireFox team to be a little larger.

Apple probably rakes in twenty or thirty million in revenue from Google ads, and Apple makes as much as hundreds of millions of dollars per quarter in profits, but they clearly don't need to spend even the Google ad revenue to make Safari twice as fast as Internet Explorer and almost twice as fast as FireFox on Windows.

This graph unfairly shows an estimate of the actual development budget spent by Apple to develop Safari (all versions) between WWDC 2006 and WWDC 2007, compared with a rough estimate of Mozilla Foundation's income in 2006.

The point is, FireFox is an extremely well funded development project. Mozilla Foundation has financial rescoures that simply are not available to the typical software startup. Mozilla Foundation could easily outspend Apple, and in theory could kick Safari's butt. They only do one of those two things right now. The FireFox development team is a whole lot larger than the Safari team. Somebody is slacking over there, Mr. Lilly.

I hope Ballmer doesn't see this. He might throw a chair, or at least a fit, if he knew how little Apple spends on Safari, and how small the Safari team is.

The Problem With FireFox: No "Fire"

For a non-profit corporation with a single family of closely related products, $40 million is a great deal of money. It's probably ten times the amount that Apple spent on Safari last year, possibly as much as twenty times as much.

Nonetheless, FireFox is slower than Safari, crashes more often, and still doesn't support the KeyChain on Mac OS X. Why not? Why is FireFox so mediocre?

No passion.

Steve Jobs just lit a fire under FireFox.

In a few years, John Lilly will thank Steve Jobs for saving FireFox from a previously certain decline into irrelevance.

As my empire crumbles. It was all going so well when I handed it over to Ballmer. Sigh.

Even worse, this isn't the only Apple Secret Plan hidden in the WWDC 2007 Keynote. There is a bigger plan, much, much bigger. So big I don't even want to think about it. The End of the World as We Know It big.

Monday, June 18, 2007

iPhone & Safari trashed by SuckLess CoolTards

I love these guys...

Coolness Roundup # 92

They did their own Safari performance benchmark tests, by clicking on web sites. Safari wasn't any faster than FireFox. Ha! Of course, if you listen closely, it's clear that they performed their test in a test environment that had a severe bandwidth bottleneck, which would, of course, completely obscure the Safari performance advantage.

They also say that the iPhone only works "in bigger cities".

They do all this in a completely casual, friendly, consumer-oriented fashion, with a straight face.

I love these guys, tards that they are, they are my tards.

I wonder how much we paid for that.

Tuesday, June 12, 2007

iPhone evaluation kit

OK, so despite the fact that my empire is crumbling, with Apple poised to quietly take from 1/4 to 1/3 of the browser market this year, I find myself obsessed with the iPhone. I must have one. Nobody must know, except of course Smithers who facilitates such things for me, discretely.

So, I had Smithers use one of my secret online identities to join the Apple Developer Connection (it's free!) and request the iPhone Evaluation Kit. It should arrive soon.

Walt Mossberg, an obscure reporter from the The Wall Street Journal, an old fashioned newspaper (they still print on paper!) read largely by elderly technophobes, has already received his iPhone Evaluation Kit.

A full day hasn't even passed and he's already showing it off to people, and insinuating that touchscreen keypads are "teh suck". It seems he was trying to pick up college girls or something. He's not going to have much luck with that, even with an iPhone, if he keeps dis'ing the touch screen keypad like this.

Walt Mossberg Shows College Leaders His New iPhone

My iPhone evaluation kit still hasn't arrived, although Mossberg clearly got his yesterday. Since I'm a youthful technology professional, in touch with the mobile digital lifestyle and perfectly adaptable to a touch screen keypad, (and am therefore more likely to say complementary things about the product, under the guise of my secret online identity) I'm sure that my ongoing lack of an iPhone evaluation kit is an oversight.

Smithers hired a stoner high school dropout to let me ship the package to his place. It's a service he apparently already provides to others.

My stomach is still in knots about the whole Safari for Windows + WebKit on Symbian S60 + Safari on iPhone + Safari on the Macintosh == at least 15% of the browser market by WWDC 2008 math. I did get about four hours of sleep last night, filled though it was with crazy dreams of being chased by flying colored icons with hundreds of little beach movies playing on them.

Monday, June 11, 2007

WWDC 2007: Worst. Keynote. Ever.

Apple turned the world upside down today, and nobody noticed, except me. Well, I guess it was my world that they rattled. I just finished watching The Worst. Keynote. Ever. If, like me, you've been under a rock, you'll want to know that I refer to a presentation given by Steve Jobs at WWDC 2007 on Monday. Oh, to be sure, my deepest fear (licensing the OS X to Palm) was not yet realized but the damage was certainly bad enough. I have been the accidental undoing of my own future, the undoing of Microsoft. My stomach is all knotted up.

Can't Sleep, Clown Will Eat Me

Yeah, I know, it's the middle of the night and I haven't slept well for days. I was trying to help save half a continent from some strange tropical disease that I hadn't heard of a week ago, so I had to put the keynote off until later. Even though I don't regularly use a Macintosh, I really enjoy watching the SteveNotes. He's truly a master of presentation and salesmanship. I wish I could get Ballmer to watch a few of these.

The thing I love most about the WWDC keynotes in particular is how the Wall Street analysts:

  • never seem to quite understand what's important and what's a smokescreen for Steve's Real Plan, nor what the implications might be,

  • don't bother to ask anyone who does know,

  • start whining all over the eager press about the utter insignificance of anything announced by Steve, no matter how earth shaking it happens to be,

  • respond in emotional synchronicity to a bunch of fifteen year old (and emotionally stunted, slightly older) bloggers who failed to get satisfaction from their week-long erections waiting for some mythical hardware product of their wet dreams that never showed up, and then

  • send AAPL stock into a tailspin.

Oooh! I just love the fact that, if I may borrow a phrase from Dr. Evil, "I'm surrounded by frickin' idiots". The kind and good gentleman of the Circus apparently didn't say it, but I will: There's a sucker born every minute. The fact that nobody understands the earthquake that Steve unleashed today might buy me some time to figure out how to respond. But I'm jumping ahead.

Steve's keynotes, you see, are very, very carefully scripted. Sometimes the exact words used by Steve to describe a particular feature, or even by some of the on-stage guests (not all of them) are scripted. Let's start at the end.

Pundits & Bloggers & Analysts! Oh my!

A quick scan of the various Macintosh news, rumors, blogs, and discussion forums reveals an apparent collective disappointment in the keynote. Nothing new! Waaah! We guessed all that! Waaah! Cry babies. Liars, too. Lying damn crybabies. The web was not exactly littered with predictions that Apple would release Safari for Windows, now, was it? No, it was not. I knew it was coming, of course. Many Bothans died to bring me this information. Not.

Hints of a Coming Storm

I had as hard of a time hiding my distress at the recent D conference, as Steve did hiding his glee at his coming and secret NeXT move on the chess board that is your digital future. He could scarcely contain himself when he unleashed the now famous quip, "It's like giving a glass of ice water to somebody in hell" in response to a question about Apple being one of the largest makers of software for Windows, with iTunes and QuickTime. See his scarcely contained excitement here:

Here you can see Jobs grinning like a schoolboy who just made out with Mary Pigtails behind the stage curtain. iTunes is old, old news. He was grinning about his secret plan to hand another glass of ice water to the people in hell: Safari for WIndows.

And One More, "One More Thing"

Now consider the end of the WWDC 2007 keynote address, which, for the first time included not one, but two of Steve's famous signature "and one more thing..." segments.

The first "and one more thing..." announced Safari for Windows. The second announced Apple's initial, careful steps toward a software ecosystem on iPhone, which is "simply" the WebKit engine in iPhone. These are really the same announcement, considering that Safari for Windows makes it easier for non-Macintosh developers to write iPhone compatible web sites and Web 2.0 / AJAX applications. The fact that they were presented as two separate items is a significant clue that Safari for Windows is much, much more than that. But first things first.

Safari, iPhone, Web 2.0 and AJAX

The open source WebKit at the heart of all versions of Safari can render modern "Web 2.0" style AJAX, JavaScript, and HTML powered web applications from web servers in a nicely integrated way. The applications look and to a large degree feel like "native" applications on iPhone. They can even integrate with basic iPhone features, placing calls, sending emails, manipulating media like pictures and so forth on iPhone.

In fact, Scott Forestall, VP iPhone Software for Apple had this to say about it:

"All the standard web pages out there 'just work' on the iPhone."

Standard web pages. That should have been the first clue. It was entirely too subtle for the lizards on Wall Street.

Movie UNIX Arrives. Pundits Fail to Notice. Hollywood Lags Behind Apple.

The pundits and analysts are not software developers and really don't grok WWDC to start with. They don't really know what "Developers Conference" means.

Take Gene Munster of Piper Jaffray, for example. He called the WWDC 2007 keynote speech, "underwhelming." Was he on valium during the keynote?

Did he not notice that Steve Jobs was not promising to deliver "Movie UNIX" aka "The Hollywood Operating System" in October, but actually showing it, live, on stage? It's not just Microsoft that has a lot of "catching up" to do, but Hollywood, too!

Somehow these analysis remain, after decades of pretending they can, unable to understand the layers of abstraction in technology, business, and strategy with respect to the importance of technology platforms and ecosystems. They seem also to have collectively forgotten United States v. Microsoft. Lord knows we bought them enough cocaine and hookers, so perhaps it really is simply forgetfulness, but still, I am surprised. Perhaps all the Wall Street lizards who were around at that time have since struck it rich and retired, leaving young upstarts who get all their "facts" from blogs to run the town. I might be moving a little more of my money overseas, come to think of it. But I digress.

Web Standards Rising, Like Zombies From the Grave

There are no standard web pages, not really. Well, there are some now, but they were quite rare until recently.

Standard web pages don't work in most versions of Internet Explorer. Since we have the overwhelming majority of the web browsers in the market, the vast majority of web pages comply with our bugs and quirks. Web designers often berate and belittle people who champion web standards. Their only supporting argument: "most people run IE, so that, bugs included, is the standard, , and any competing open standards are irrelevant."

In fact, the 2nd most popular browser, FireFox, and some of the other browsers, too, use a rendering engine called Gecko which features a "quirks" mode specifically to help the browser support standards to the extent that it can do so, and also remain bug-for-bug compatible with Microsoft Internet Explorer. We have had those upstarts over a barrel for years. If they support pure web standards, then their browser won't correctly render pages that were coded to work around bugs and other behavior in IE that doesn't comply with open internet standards.

Why Does the #1 Open Source Browser Support IE Bugs?

In fact, most alternative web browsers, including FireFox, intentionally support IE bugs which were designed to allow Microsoft to control web standards, and make it difficult for alternative platforms, like Solaris, Linux and Mac OS X to get much traction on the web. Understanding why that's been the case, and why it about to change, requires knowing a little about the psychology of the typical web user. They don't know much about computers, you see.

It's helpful to understand a few principles about web users.

  • Users don't like it when browsers don't render web pages.

  • Users don't know when the fault lies with the web page or the web browser

  • Users don't know when a page is standards compliant and when it's not, and really don't even know what that means, and furthermore, don't even care what it means

  • Users can replace their web browser, but they can't repair a web page

Therefore, users might try an alternate web browser, out of some curiosity perhaps, but they often give it up if it fails to correctly display even a single web page. They go back to Internet Explorer, which is installed by default on every Windows PC.

By shipping slightly broken implementations of web standards, we can make the web an inferior experience to the desktop, and prevent other platforms from leveraging the web as a "new platform" to attract users away from Microsoft.

At least, we could. Now that FireFox has a 15% share of the browser market, and emboldened by the Safari and Opera commitment to strict compatibility with open web standards, the FireFox team now plans to adopt that approach with the next version of their browser, FireFox 3. Apple wants to hasten this along. In the future, these browsers will only support web pages that code to IE bugs to the extent that they can, without breaking the browser's ability to render a standards compliant page.

The Industry Standard

This is important to Apple, because we work the other side of the coin, too. We at Microsoft call ourselves "the industry standard", so that web designers and systems administrators feel like they don't need to support other browsers. Sometimes they even go so far as to check browser type in their web code, and deny all other browsers! I have no idea why they do that, it's probably copy and paste from some of our old example HTML code or something, but whatever the source, I sure love that. I feel all warm inside when I think about it. Well, I used to.

Browser Market Share, Before iPhone

For the most part, that, coupled with some cleverly brutal and technically illegal anti-competitive practices, has, for the most part, kept the upstarts in their place, as you could see in one of Steve's charts, which looked something like this:

Microsoft Internet Explorer has almost 80% of the browser share. Safari has only 5%, FireFox has almost 15%

Carefully Obfuscated Peek at Browser Share After Safari for Windows

Then Steve pulled a fast one. He very meekly suggested that they would like to maybe see their browser share grow and slipped in a quick glimpse at a pie chart showing the Safari market share growing, but the Internet Explorer market share remaining the same. He just removed the FireFox and Other sections to make room for the Safari growth.

However, what Steve expects to happen is much more subtle.

The iPhone Dilemma

Safari is one of the few browsers out there that is very closely standards compliant. Safari users complain about it sometimes because some pages that are designed to work only with Internet Explorer, don't work in Safari.

Those pages won't work on iPhone, either.

Steve presented some interesting numbers. There are about 18 million Safari users today. That number aligns pretty well with the expected number of internet connected Apple Macintosh computers in the world today, as he had earlier mentioned that about 22 million copies of Mac OS X were in use, mostly Tiger and Panther, where users can and do run Safari. The pie chart shows this pool of users to be about 5% of the browser market. That also lines up pretty well with the approximate representation of the Macintosh in the marketplace. It's maybe a little higher than you might expect, but not much. Macintosh enthusiasts have long claimed that, in percentage terms, more Macintosh computers are connected to the internet, Macintosh users use the internet more often, and Macintosh computers stay in service longer. Perhaps that's true in some marginal way that boosts this number by a point.

What's really interesting here is what he didn't say.

WebKit: Tens of Millions of Users Today, Before iPhone Has Even Shipped

Steve didn't mention that Nokia adopted the WebKit, the open source core of Safari, and adapted it to create the S60WebKit, which will be the core of Nokia's new browser on their smart phones, starting with the S60 Release 3 edition of their Symbian OS.

By the way, Symbian S60 phones reached an interesting milestone this spring. At about the same time as Apple reached the 100 million iPods sold milestone, Symbian S60 phones (Editions 1, 2, and 3 total) also reached 100 million units sold. The Safari WebKit based browser on the S60 Edition 3 smart phones has been available to Nokia and its partners since about November of 2005 which implies at least several million phones with this browser have been shipped, even if some S60 Edition 3 phones don't include the browser.

With sales of S60 Edition 3 smart phones at 15 million per quarter in Q1 2007, it would seem fair to say that the WebKit based share of the browser market might also increase from this source, and could potentially double the "Safari" share of the browser marker if nothing else changed.

But oh, yes, there are changes.

Steve mentioned that a half a million FireFox downloads occur each day, and that 1 million iTunes downloads happen each day, too. If Apple can persuade 5% of their iTunes downloaders to use Safari for Windows, they'll add nearly another 18 million Safari users, doubling their market share over today's 5%.

So far we're projecting a 15% market share for Safari by WWDC 2008, and we haven't even accounted for iPhone sales, which could easily add a few more percentage points to browser share for Safari.

All of this is really about the iPhone.

Standards Compliant Web Browsers: Apple's Secret Plan to Save the Internet, and iPhone

As long as Safari is a 2nd class web citizen, Safari users will face web sites that are IE only and lock them out or shunt them off to an inferior web experience. This affects users on the Macintosh to some degree, but those users can install alternate browsers that take a bug-for-bug-compatibility-with-IE strategy, rather than emphasize standards-compliance, like Safari. On the iPhone, users won't have that choice, at least not in the foreseeable future.

Safari for Windows is a bold play to recapture the internet, which we more or less successfully hijacked for a long time. Steve is betting on a combination of standards compliant browsers to build up a large enough market share to boost the efforts of the tiny open source community, and reinforce in turn the efforts of Apple.

At WWDCD 2008, Steve expects to show a graph like this one, where perhaps FireFox has taken a small, probably temporary hit in market share, but begins to enforce the same standards as Safari, and where Safari gains ground from the iPhone, by alliance with the Nokia S60WebKit browser, and where Safari for Windows draws from Microsoft Internet Explorer, too.

Safari on Windows, in combination with Safari on the Macintosh and iPhone, WebKit on Nokia's smart phones, Opera (which is already ACID compliant) and finally, a more rigorously compliant FireFox 3 (which also aims to be compliant with the ACID Test standards test suite) will capture a significant fraction of the browser market, and finally motivate web designers the world over to realize that they need to produce standards-compliant web sites. If those web site owners are alienating 15% to 30% of the browser market, rather than merely 5%, they will undoubtedly begin to insist themselves on standards compliance, and become champions of the cause.

iPhone Development & Saving the Internet

And now, back to the end again for a moment. Shortly before the Wall Street lizards and bloggers unleashed their fury on Jobs, he delivered the coup de grĂ¢ce to Internet Explorer. It's like one of those fan made star wars clips, where a light saber dual leads to someone getting sliced in half, and experiencing a moment of shock and terror before they split in half.

Since the announcement of the iPhone a the MacWorld 2007 developers have been clamoring for a chance to write applications for the iPhone. Those poor sods want to break out of the tiny niche, and write software for Mac OS X that has a chance to sell more than a few tens of dozens of copies.

There are four logical ways that Apple could deliver a software development platform on the iPhone, and they will, eventually, deliver at least three out of four.

  1. J2ME(a platform-independent, but probably sub-standard performance characteristics native client)

  2. iPhone Cocoa Kit ("fully native applications, full client-server ability, etc.")

  3. iPhone DashCode Widget Kit ("mini web / javascript applications, can be client-server")

  4. Web 2.0 + AJAX in Safari ("fully server based web applications")

Apple will deliver these in reverse order, starting with the low hanging fruit, and told developers that they could have applications ready in the 18 days before iPhone ships, give them a quick test, and deploy to their own web infrastructure by the first few days after the iPhone ships. This is true, they can. It's also true that this will give most developers a higher profit margin, lower cost model, and higher quality product experience for their customers, while still delivering applications that look and act like native client applications, because they *are* native client applications -- basically they are Safari plugins at that point.

Even Java Micro Edition might happen someday, hardware performance may need to improve first, and it might depend on demand from large enterprise customers for Java Mobile technology or applications. Nothing about the iPhone strictly prevents it, but the J2ME market right now is a pretty good example of how to get it wrong. Apple is wise to leave this out for now.)

Again, the thing Steve didn't mention is more important than what he did mention.

iPhone Market: Millions of Users before A Single iPhone Ships

Where are those Nokia Symbian WebKit users? By and large, they are not on the web for whatever reason. Nokia's smart phones tend to have tiny, swiveling, tilting, scrunched up web-hostile form factors, so that's part of it. Some of their phones have a decent screen, however, and they've already sold millions of phones that come with WebKit. Perhaps these users don't spend much time on the web because there aren't many applications optimized for use on Phones. Apple's going to force that to change by limiting developer access to the iPhone market initially, to AJAX and Web 2.0.

Developers don't even need to wait for iPhone market to mature. Nokia is creating new potential customers every day, and has been for months, by shipping millions of WebKit enabled phones every quarter.

By delivering the "lowest common denominator" first, in such an elegant simple way, Steve Jobs is handing his developers a new market on a silver platter, a market that already has more application-hungry customers than the entire Macintosh market has ever had, and which will easily double in size this year, even if the iPhone utterly flops. He's handing them Nokia's customers, and all the iTunes using Safari for Windows customers, too, really.

Of course, iPhone won't flop. It will penetrate markets that all the pundits have been saying lay beyond it, due to the presumed "lack" of an SDK. Well, the SDK was right there in front of them, all along. A mere man-month and 600 lines of code later, and a mission critical business application was demoed on stage, live, on an Phone, 18 days before the iPhone ships. It has flick-to-scroll lists, hot-links, touch-to-call ability, pinch-to-resize, and the whole taco right there, carefully hidden in plain sight all along.

iPhone is a Computer, In Your Pocket, in Your Enterprise

iPhone is Apple's first computer that will directly appeal to the Enterprise customer in a way that circumvents all the bean counter's brainwashing we've done for decades. Custom applications, easy to build with open standards, and a major industry partner with substantial market penetration already, Nokia.

And that, my dear blogosphere friends, is why I think this WWDC Keynote was an earthshaking event, cleverly hidden behind the glitz of Core Animation and the iPhone.

The internet will never be the same again.

You would think with the stress I've been under lately that I'd be freaking right the hell out, but I'm strangely calm. We've seen this one coming, after all, since the day that Safari first emerged from Steve's magic lantern. Sadly, we brought it on ourselves, too. It could have been avoided, but we shipped a crap browser for Mac OS X and didn't maintain it. In our hubris, we forced Apple into a desperate corner. The web was rising to be of paramount importance to the general computing experience, and web surfing in Internet Explorer for the Macintosh sucked. We wanted it to suck, and it did suck. Then Apple had to fix it. Without the source code to IE. So they did what software developers do: they wrote some code.

When Safari came out, I knew this day would come. I feel a strange relief.

Friday, June 8, 2007

My Deepest Fear

So groggy today... My therapist says I need to get this off my chest. I'm not so sure it will help, but here goes. See, I can't sleep. It's that darn Elevation Partners investment in the beleaguered Palm that's bugging me. Last night I passed out briefly, and moments later I awoke in a full on panic. I couldn't move my arms or my legs or turn my head. I was sweating and breathing really heavy. I couldn't even call out. Worse, I couldn't get it out of my mind, that damned Expand Your Universe banner that Apple hung up in Moscone West for WWDC 2007 next week.

After seeing that yesterday, I couldn't sleep last night worth crap. In fact, I haven't slept more than a couple disjointed hours a night, a few minutes at a time, since "WTF!!!? Tuesday", as I think of it, now.

My attendant had to jack me up on Ativan to get me through the Harvard gig. I didn't want to go there that day. This whole Palm thing has been bugging the hell out of me and I couldn't figure out why. Now I know why, and I wish I didn't.

Bono and My Deepest Fear

I mean, seriously, WTF?!!! Bono is involved in Elevation Partners, isn't he? I mean, Steve and Bono are good friends. Bono doesn't even take my calls any more, since I squirted contact info on him at a meeting with the staff over at The Bill & Melinda Gates Foundation. I mean, he autographed a U2 iPod with a dremel when my cousin wanted one, but you know, he won't like come over for dinner or anything.

Jon Rubenstein and My Deepest Fear

The same day they announce Jon Rubinstein is joining Palm. He used to be the head of the iPod over at Apple until he left the company in April last year (2006). He did some of the cool iMac designs, too. I wish Dell would have hired him. I tried to call Jon to see if he wanted to come help us innovate in the music player space with the Zune, but he wouldn't return my calls. They're too stupid and cheap over at Dell to hire a decent designer like Jon. According to a few of the articles announcing his departure from Apple last year, Rubenstein planned to do some amount of consulting for Apple for a while after that.

Paul Mercer and My Deepest Fear

A couple months ago Palm hired a former Apple employee by the name of Paul Mercer. He isn't just any former employee. He helped make the original iPod. I tried to hire Paul to come help us innovate in the music player space with the Zune, but he wouldn't return my calls. I figure that's not much of a loss. He's responsible to some degree for the abortion that is the Finder. If I was him I wouldn't put that on my resume, and I'd have the Microsoft Ninja take care of anybody who saw me there, as well as any written records.

Oh, that's right! We've got Ninja around here somewhere... maybe they can help take care of this. Damn. I'm afraid there are too many high profile people involved. I don't think we'll be able to stop it that way. Too many of them are already gazillionaires, too, or I'd pull a Detroit on the industry and hire them to party on the beach and forget they ever knew anything about handheld computers.

Yeah, you know what's bugging me. I can't bring myself to say it out loud.

Maybe I can sneak up on it, slowly...

Saving Palm and My Deepest Fear

My deepest fear concerns the question, "What would you do, to save Palm?" I mean, let's face it. Palm is in serious, deep, trouble, or they were until WTF!!!? Tuesday. Palm haven't been able to make software for so long that they finally gave up, I mean, innovated, and licensed Windows Mobile. Everybody with a clue knew they were in trouble way back with the spin-off. And that re-merger activity which they seemed to think was a substitute for innovation? It's a wonder they are still in business at all. Check this out boys: when you buy a company, either use it or kill it. Don't pretend that your worthless pile of poo is somebody else's gold mine. If it had gold in it, you wouldn't have sold it. And damned if it's not embarrassing to have to buy it back again, eh? It isn't very often that you make money with a deal like that. Like Daimler selling Chrysler. Everyone knows you screwed the pooch on that deal.

I still can't say it.

Cell Phone Innovation and My Deepest Fear

Look, everybody has Windows Mobile. It's the best platform for cell phones. Ballmer keeps telling me that. But why do I find myself unconsciously surfing to watch iPhone commercials when I'm on boring conference calls with the money guys?

This is the reason: cell phone makers don't know how to innovate.

Windows Mobile and My Deepest Fear

We give them this remarkable toolkit that is Windows Mobile. It's basically the same system that runs 90% of the desktop computers in the world. Well, it's not really the same. In fact it's pretty different. But it looks the same, and some of the parts are the same, and we tell them it's the same and they believe it and that's what matters.

They could innovate on Windows Mobile. Yeah, I know, you have to reboot your phone once in a while. I had to re-install my phone (a beta test unit) just this morning (another reason I'm so late getting to this blog). But heck, it's not that bad. It's a real operating system, and they could do cool stuff with it. But they didn't. For years. Do we have to do everything for them? It's like they didn't get the innovation gene or something.

So the Palm guys I kinda feel sorry for. Re-org after re-org, mergers and spin-offs. Downsizing and partnerships that fizzled. And all the while stuck on Palm OS. I can totally grok not getting much innovation done under those circumstances.

HTC Touch, and My Deepest Fear

But what about everybody else? They've had Windows Mobile for years, and this is the best they could come up with:

Yeah, that pretty much sucks. And we had to hand-hold them through every step of the process. Even the form factor. Idiots. I mean, seriously, that's the best they can do?! I could do better than that, but I'm busy trying to save human kind.

Breathe in.... breathe out... breathe in... breathe out... I'm in a calm, happy place... breathe in... breathe out... OK, I can do this...

I've been predicting that Palm would be the first casualty of the iPhone. They have been on the ropes for years. They can't write software to save their life. They didn't even do anything interesting on Windows Mobile.

Then they hired Paul Mercer. A guy who understands that the iPod is software. Then Jon Rubenstein. Then they get Bono and Fred Anderson? That's the WTF moment.

OK, I can do this...

OS X, Palm and My Deepest Fear

This is my deepest fear.

Palm is going to license OSX from Apple for their next generation of smart phones.

Come to think of it, maybe that's why they stopped taking my calls...

Look, Apple really can't license the Mac OS X to Dell, IBM, or HP for laptops. I made sure of that years ago. If they tried it, some cheap ass outfit from Taiwan would sell ugly beige and black clunky boxes with scads of wires and cables and weighing twice as much and basically being total eye-sores even worse than a Dell running OS X at Walmart for 12% less and take 40% of Apple's hardware market away overnight. The overall Mac OS X marketshare might grow for a year or so until the cannibalization killed Apple, and took the entire ecosystem down with it.

They even tried it back in the 1990s and it almost killed Apple, until Steve came back and introduced sanity by whapping a few people with a clue stick. So they are boxed in. Their market share will always be less than 10% on the desktop, and there isn't any way around that because I've got what I need from them -- just enough competition to give the stooges over at the Justice Department plausible deniability on the anti-trust front.

It's win-win, too. Apple gets some good press, with stories about how they crush those Dell clowns as a hardware vendor, growing 3x to 5x faster than the market grows, which means Apple is taking laptop sales away from any vendor tied to Windows. Hey, that's just part of the deal. We gotta give a little too. Just between you and me, it's chump change, though. They grow a point here, a point there, but they are boxed in. Even now that they run the Intel chips, they are perceived as a risk by big corporate accounts because they look like a "sole supplier". Yeah, whatever. Dell is a sole supplier of Dell's, and Microsoft is the sole supplier of Windows, too, but the bean counters are too frigging stupid to get that, and that's just fine by me.

Apple Breaks Out of The Box

Apple is in position to take a chunk of the cell phone market with the iPhone. I don't know how big of a chunk, but it's was going to be good for everybody. Apple was going to show those clowns over at HTC and everywhere else how it's done. People who would never have bought a smart phone would buy a smart phone. The smart phone market would grow from a tiny, basically insignificant percentage of the billion a year cell phone market. Everybody wins.

But this could change everything. See, the cell phones are another deal.

Apple has no existing cell phone sales to cannibalize.

In fact, the cell phone market is so large, and the access to customers so deeply entrenched through the retail access points of wireless carriers, that Apple's currently announced strategy of a long term partnership with AT&T/Cingular in the U.S. market places an upper bound on Apple's market share. Sure, a couple million people might switch to AT&T/Cingular, but Verizon, Sprint, T-Mobile and other carriers will still keep from 1/2 to 2/3 of the U.S. market. Apple can't get to these other potential customers because of its exclusive agreement with Cingular.

However, Palm devices running OS X could bring iPhone features, notably iTunes, to nearly the rest of the entire market (Verizon prefers to tighly restrict their customers ability to interact with other networks, devices, and services, so perhaps those customers would remain locked out, but at a minium, Palm could open up half or more of the otherwise untapped market, potentially doubling the market penetration of OS X with a single partner, Palm. In addition to established relationships with several carriers, Palm has an enormous retail distribution channel, including its own stores, many prominently placed in Airports where they have access to a trapped pool of pre-selected high value customers.

As a maker of "smart phones", Palm's share of the overall cell phone market is relatively small. Apple could license OS X to Palm and virtually guarantee a much deeper penetration into the market than Apple could secure alone.

When the other handset makers realize that Apple and Palm are taking market share, premium customers, and bottom line revenue, they would face a choice. Motorola, Nokia, LG, Samsung, HTC, and everybody else, would be tempted to license OS X, to get iTunes and the iPhone application development toolkit. Some of them undoubtedly would.

The Cell Phone Handset Market Thinks Different

In the PC desktop or laptop market, consumers have been trained to think that they have an "investment" in the platform, and that the cost of switching is high. This really isn't true for many home users, but they think it is, and that's just fine with me. We do quite a bit to help instill that fear of change in them, so that when they need a new computer, they pick up another Windows machine.

In contrast with the PC market, the barrier to switching from one handset to another is so low for the average cell phone consumer, that they don't even think about it. In fact, the vast majority of them dont' even realize when they've changed from one cell phone platform to another.

Nokia could switch to OS X over the course of a year as they introduce new models, and consumers would not miss Symbian for even one second. Nokia engineers wouldn't either. Nokia customers would get the cool new features from the iPhone OS X and Nokia engineers could spend their efforts making games and other user level applications to differentiate their products, rather than re-inventing the operating system wheel. Same goes for Motorola and Linux.

Basically, the other handset makers continue to struggle to copy Apple features on top of diverging variants of Linux, Symbian, and Windows Mobile, or they could adopt an underlying platform that lets them immediately exploit the Apple design effort that went into OS X and the iPhone.

My Deepest Fear and The End of The World as We Know It

None of that would be all that bad for Microsoft, since undoubtedly some of the handset makers will continue to back the Microsoft horse in the race. Except for one thing. Far more people are going to own the hand-held portable computer that the cell phone is evolving toward than will ever own a desktop or laptop computer. If Apple licenses OS X to Palm, the djinni is out of the bottle, and Apple is no longer boxed in. They could license OS X to anyone for any device, grabbing market share in significant percentages on a platform that will evolve to be more powerful and more important in the long run than the traditional PC desktop. Once this has happened, even the Microsoft dominance of the PC desktop is at risk. At what point will licensing the Mac OS X be a negligible risk for Apple? When Macintosh desktop and laptop sales are 30% of Apples total revenue, with iPhone, iPod, iTunes and other stuff making up the rest? Maybe not until PC hardware is only 20% of revenue? Eventually it will happen. Then the unthinkable will inevitably occur, and Apple will license the Mac OS X to Dell, and everybody else, too.

Sigh. This could be The End of the World as We Know it, and I still want an iPhone so badly I can hardly stand it.

Damn, but I really do feel better, now that I've got this off my chest! Maybe Oprah is right about this whole "closure" thing, too. I might try that some day.

Thursday, June 7, 2007

John Dvorak needs better friends

Everybody seems to think John Dvorak is my best friend or something, but I'm tellin' ya that guy irritates me no end. What with all his constant jockying to figure out how to boost his web traffic by slamming Apple, he just fans the flames. People see a loud mouthed idiot picking on the little guy and spouting FUD all over, and they just get angry... at me! What the hell did I do? This guy isn't on my payroll.

Dvorak is probably single-handedly responsible for at least a third of the market share gain that the Macintosh has seen. We should pay him to retire and shut the hell up. I wonder which VP idiot is in charge of stuff like that, and what the hell is he doing? Crap... if I could figure out how to connect to the corporate Sharepoint server I could probably figure that out... I'm going to have to go to one of those training seminars that Ballmer keeps talking about... When am I going to find time for that? I have to re-install my phone tomorrow...

Sorry, got a little distracted there. Anyway, get this. Dvorak is accidentally pimping the iPhone now. Turd-hammer. Doesn't Microsoft have Ninja or Guido mobster types on retainer to take care of clowns like this?

As if that were not enough, he's plagerizing one of the cheesy Macintosh rumor sites... like nobody's gonna notice. Hell, 0.017 seconds with a Google search will tell you which cheesy Mac rumor site in a heartbeat... yeah, here it is... that John Markoff guy over at the New York Times. Always on about iPod this, iPhone that, market share, this...

So that twit Dvorak claimed today: Time to short Apple?

{ My unnamed friend also offered an odd anecdote that I found somewhat weird, but worth mentioning. He said that he was in the Apple store and the personnel there were showing videos of the iPhone, when a customer said, "Wow, you mean it is also a cell phone!" }

Markoff wrote a few days ago:
{ During an onscreen demonstration of the iPhone in Apple’s sprawling retail store here recently, an employee, clad in a black T-shirt, of course, surprised a potential customer. Nonplused, the customer stammered, “You mean it’s a cellphone, too?” }

I'm sure it was an accident, but jeesh. Doesn't this guy know when to quit? There is no possible way that the set of all friends of a cheesy Macintosh rumor site blogger like John Markoff overlaps with the set of all friends of John Dvorak. That latter set is pretty small, I bet, too, so it should be easy to verify. Get somebody on that right away.