Apple TV: where's the money?

AppId is over the quota

In reaction to last week's technical speculation on the putative iTV, several commenters raised questions about content providers, distributors, and "pipes". Does iTV help or harm NBC, Netflix and Comcast? How does the [one last time: "putative"] iTV make money, and for whom?

Indeed, the column ignored an important – perhaps the most important -- part of the product: the money pump, AKA the business model. While Apple displays a sharp, fulfilling sense of aesthetics and simplicity in the design and implementation of new products, the company didn't reach the pinnacle of high-tech profitability by merely practising l'art pour l'art. Apple isn't deaf to a more practical art form: cash register music.

Starting with pipes, let's look at smartphone carriers as an analogy. When AT&T "won" exclusive iPhone distribution rights in the US, it appeared that it had traded its birthright. The iPhone bore no AT&T customisations, no stickers, no craplets. Worse, the carrier had to let Apple run the content distribution table with iTunes.

As we've since seen, the trade turned out well for AT&T. With more subscribers because it's an iPhone!, and with more revenue per customer, the device yields AT&T a $100 monthly ARPU, much higher than the $50+ industry average.

With this in mind, should we think of an exclusivity deal between Apple and a "TV carrier"? Perhaps another AT&T deal, this time for their TV and internet U-Verse line.

AT&T's network topology – a dedicated set of wires running into each subscriber's home – is ideal for voice and internet traffic. But the company is at a disadvantage when it comes to distributing several hundred TV channels, something a cable provider has no problem with. Comcast simply taps into the coax cable that passes by each house and feeds the same anonymous, multiplexed signal into the set-top box for authorisation and decoding. (This is an oversimplification and ignores the evolving topologies made possible by optical fibre … but we're still far from the dream of Fiber to the Home.

iTV could give AT&T an opportunity to take the lead in 21st century TV, to stop fighting Comcast on its own ground. The resources AT&T deploys today to bring old-style TV channels into markets dominated by cable carriers could be reallocated to the fast internet access that lets several iTV devices run in the same home. (Try asking today's friendly AT&T U-Verse salesperson how many DVRs you can have. "One" is the general answer, as this U-Verse user document cautiously explains. Comcast will let you have – and pay for – as many as you like.) A simpler, more focused life, stealing subscribers from the incumbent, a higher phone plus internet access ARPU… For AT&T, this could be a repeat of the original iPhone deal. Realistic? I don't know if AT&T is bold enough to make such a move.

For cable TV incumbents, the money pump equation is different. By "virtue" of their dominant position, they have more to lose, they have these expensive, inflexible, and tricky channel bundles to protect. What looks like a potential ARPU uptick for AT&T could turn into a subscriber revenue decrease for a cable operator supplying internet access to iTV viewers using apps instead of channels.

This gets us to iTV content. It will either be "free", meaning subsidised by advertising; by subscription, like Bloomberg BusinessWeek on a tablet; or "pay as you go", one show or game at a time. One reader suggested we'd end up paying more than we do with today's bundles. It's a possibility, but we might be happy to pay more in exchange for the freedom to pick and choose, as opposed to today's situation where adding an "extraneous" channel to an existing bundle is a chore that makes you feel like you work for the cable company and not the other way around. Who knows, we might even spend less overall – while giving more money to the better creators.

We now move to content providers. As they ''appify'' their channels, will they be willing to give Apple 30% of the app revenue? If the app is "free", no problem: 30% of zero isn't terribly onerous. But even for a free channel, there's the question of sharing ad revenue: how much for CBS, how much for Apple? This isn't a random example, we just heard Lee Moonves, the chief executive of CBS, say his company turned down a streaming TV deal with Apple because of a disagreement over ad revenue. CBS and others have to see how iTV will make them more money. (The same is true for game developers who could use iTV as a vehicle for living room or networked games.)

Finally, Apple itself. Its emotive talk about the purity of the software architecture, the praise for the elegant kerning of the Garamond Light Condensed ITC font on Keynote slides … such talk is important and relevant, it addresses the very reasons for Apple's success, but we shouldn't forget what rings the big cash register: hardware. The iTV product itself has to generate billions in hardware revenue or stay what it is today, what Jobs felicitously called a hobby, a mere hundreds of millions of dollars of hardware revenue. That's nothing when compared to the tens of billions – soon $100bn – in iOS mobile devices revenue.

How to get there? Recall last week's "no set-top box" configuration:

I've added a twist, one simplification. Why have two devices, one iTV and one Wi-Fi base station or Time Capsule? A unified device saves room, power, the need to have disk storage in two places – and it will help justify a unit price that's greater than the current $99 for Apple TV.

Let's put the price tag of this unified device at $299, the price of today's 2TB Time Capsule. If Apple can sell 10m units, that's $2.9bn in revenue … not bad, but put that number into the context of Apple's overall revenue estimates: $120bn in 2011 (calendar year, not fiscal), $160bn in 2012, and $200bn in 2013. $2.9bn in iTV revenue doesn't get it out of the hobby category. Apple would need to sell 100m units, $29bn in revenue, to really "make a dent in the universe".

What about the revenue iTV will generate through the App Store as users buy apps as channels? Consider iTunes: it made about $2bn in revenue in the 2011 fiscal year ended last September (probably much less in profits as this is a complicated organisation with many revenue streams and an expensive infrastructure). iTunes is hardly a loss leader, but its purpose is to fuel iOS device sales, not the other way around. By analogy, the App Store and advertising revenue share isn't going to make or break iTV.

In last week's Monday Note, I argued against an Apple-made big-screen TV: Too big, can't be brought back to the store for repair, the computer inside would become obsolete much more quickly than the screen itself.

Friends tell me I'm wrong. A big screen might be the answer to the revenue question. At $1,500 or more, an Apple HDTV set might achieve revenue levels in the tens of billions, and, unlike today's TV set industry, it might even be profitable.

(As an aside: Last week, Sir Howard Springer, the courageous Welshman running Sony, let it be known that while his company is – "like Apple" – in the process of reinventing the TV, "Every TV set we make loses money." We also heard about Logitech giving up on Google TV after losing tens of millions in the misadventure. And Adobe decided to stop Flash development for TV. The news from the TV front could be better.)

As a big beautiful flat-screen set, or even as a separate module, an iTV sounds like a great idea. But translating the dream into a viable 21st century TV product looks considerably more difficult. To be successful, the iTV needs to make money for carriers, for content developers, for distributors, and for Apple itself. None of which is self-evident.

Still, the ossified TV ecosystem is ripe for disruption, ready for an annoying innovator.

JLG@mondaynote.com

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Boot up: Facebook prepares music offering, and Apple 'loses (another) iPhone prototype in (another) bar'

... And it reportedly happened on Steve Jobs's watch Photograph: Justin Sullivan/Getty Images

A quick burst of 10 links for you to chew over, as picked by the Technology team

"Facebook Inc. is preparing changes designed to make the site a hub for listening to music, watching movies and playing videogames, according to people familiar with the matter, in much the same way people already use the social network to share personal media like photos and videos."

Note: This isn't a music platform. It's not (really) an iTunes-rival.

"In a bizarre repeat of a high-profile incident last year, an Apple employee once again appears to have lost an unreleased iPhone in a bar, CNET has learned."

Photographer Thomas Hawk: "Flickr asked me if I wanted to apply it only to photos going forward, or also to images that I'd already geotagged. I told flickr to go ahead and apply this setting to all of my past and future photos -- which included a thumbnail of the photo I linked. So now when you go to this photo on flickr, indeed, the geotag seems to be removed from the photo page for the image.
"Except that there is one pretty major security hole.
"Although the geotag information is indeed pulled from the flickr photo page, ANYONE can potentially still get your geolocational data simply by downloading the original sized file and looking into the EXIF data.
"This only seems to apply to images that were geotaged at the file level (i.e. by you or your device/phone, etc.) and not photos geotagged using flickr -- but still, with cell phones and software that auto geotag things, you could easily be lulled into a false sense of security on Flickr when you should not be."

Truly, a website design that sticks two fingers up at you from its lair in the mid-90s.

Pointed out to us by John Dowdell of Adobe, the people who make Flash: details how baseball is being changed by the greater access to information about games. Guess how they access it.

Paul Thurrott, whom nobody would describe as an Apple fan, isn't very keen on the new Windows 8 Explorer ribbon idea: "The Microsoft post describing the new ribbon UI goes into great detail about telemetry data, which provides the company with information about what users are really using in Explorer and elsewhere in Windows. And according to that data, the top 10 commands represent over 81% of all commands used in Explorer. The bottom 18% of commands (by usage) include such things as Open, Edit (Menu), View Toggle, Organize, New Folder, Send To, and Edit.

"And yet, looking at a Microsoft screenshot of the new ribbon, what do I see in the default first tab? A bunch of commands - including Open and Edit, by the way - that are not in the 81% most-frequently used commands." Huh?"

He also described Apple's Finder as "much cleaner and less busy". That's really quite scary.

If you were wondering how Hot Spot and Snickometer worked in cricket...

Good graphic, though it obviously assumes that the software costs nothing to produce, and that the marketing and so on happen magically to give the "Apple's slice" element.

From early in August, but still relevant: "'With a large enterprise, you have to assume that people are going to get tricked into installing malware,' iSec CTO Alex Stamos told The Reg. 'You can't assume that you'll never have malware somewhere in a network. You have to focus on parts where a bad guy goes from owning Bob the HR employee to become Sally the domain admin.'
"At the heart of the Mac server's insecurity is a proprietary authentication scheme known as DHX that's trivial to override. While Mac servers can use the much more secure Kerberos algorithm for authenticating Macs on local networks, Stamos and fellow iSec researchers Paul Youn, Tom Daniels, Aaron Grattafiori, and William "BJ" Orvis found it was trivial to force OS X server to resort back to Apple's insecure protocol."

They also did a proof of concept. OSX Server is the weakest link. Then again, a similar flaw in Windows is what led to Google getting hacked in China in 2009.

"The average selling price for Double Data Rate 3 (DDR) in the 2-gigabit (Gb) density--the bellwether DRAM product--is projected to drop to $1.60 in the third quarter, down 24% from $2.10 in the second quarter. The dive would be the biggest decline for the year, following a surprisingly solid second quarter during which pricing fell only 5% from the first quarter. Moving into the fourth quarter, the price could plummet another 22% to $1.25--dangerously close to cash costs for many manufacturers. Only a year ago in the third quarter, pricing stood at $4.70."

There's been a fall in demand, while yields are about to rise. The money now is shifting towards NAND Flash.

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Boot up: Police 'assisted' Apple in lost iPhone hunt, and no US launch for Samsung Galaxy Tab 7.7 or Galaxy note

Ho Kak-yin in Hong Kong ... not the man whose house was searched by police in San Francisco Photograph: AP/Kin Cheung

A quick burst of 9 links for you to chew over, as picked by the Technology team

"...Anyway, I totally understand why Google did this list. It just isn't a well curated list and so I don't want my name associated with it."

For those who doubted the original report was correct: "The bizarre saga involving a lost prototype of the iPhone 5 has taken another interesting turn. Contradicting past statements that no records exist of police involvement in the search for the lost prototype, San Francisco Police Department spokesman Lt. Troy Dangerfield now tells SF Weekly that "three or four" SFPD officers accompanied two Apple security officials in an unusual search of a Bernal Heights man's home."

Police don't get involved in publicity stunts.

An intriguing stack chart of the ever-growing number; the lifespans are interesting to compare.

"For example, you're doing TDD, you write a test, do some coding and hit run test but have to wait 30 seconds+ for it to run. This takes long enough to break your flow, you have a quick think about something else and then you realise the test has run and you need to switch you attention back. You might have a quick chat about something else with your pair.
"We know it's hurting our velocity but without numbers it's difficult to convince management of the true costs.
"So what did we do?
"We took a stop watch, kept it with us all day and recorded all the time that where we were waiting for the computer to do something - from opening apps, running builds and tests, searches and refactorings in visual studio - any time at all where the developer had to wait for the machine to work, be it 5 seconds or 5 minutes the stop watch was running. It took quite a lot of discipline. The results were startling."

Worth buying the fastest possible if the project lasts more than a month.

"The Galaxy Tab 7.7 and Galaxy Note are two devices that are generating quite a bit of buzz here at IFA 2011 in Berlin. There's a lot to like about these devices, but unfortunately you might not be able to buy one stateside. According to Samsung, there are currently no plans to ship either of the devices in the U.S."

Simplifies the questions of whether to stock or not for retailers.

MG Siegler, visiting Seattle, doesn't have pictures but has been trying it out - a 7in tablet with multi-touch.

The 16GB version is $450 (save $50!), the 64GB is $550 (save $150!) and the 32GB version is... $550 (save $50!).

Explanations for this pricing regime where 32GB of Flash memory costs nothing welcomed.

Martin Belam, writing in a purely personal capacity (you understand): "[if you're moderated] ask yourself, "Was I being a bit of a dick?".
"I'd define dick-ish behaviour on a news site as including, but not restricted to: personal attacks, using 'amusing' clichés like EUSSR and Tony Bliar, making the same off-topic point day after day, being rude and grumpy and unwelcoming to newcomers, mocking other people's spelling, bullying and hectoring staff and journalists appearing in the comment threads, asking 'is this news?' on a story you are not interested in and which nobody forced you to read, hate speech, 'ironic' hate speech, anything that might now or in the future potentially land the publisher in legal hot water, and any comment which includes the phrase 'I don't suppose the moderators will publish this but...'"

Three strikes filesharing rule comes into play in New Zealand: "The three-strikes regime is not expected to be widely used by rights holders, however, because of the high $25 fee they must pay to internet providers to forward those warnings to internet users and a $200 fee for bringing cases in front of the tribunal."

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Will Apple launch a TV set?

Not another Apple TV black box but a real 50" flat-screen TV, "Designed by Apple in California" – and made in China, like most Apple products. Or made In Korea, if the company concludes a new pact with its best "frenemy", Samsung, the new king of TV sets, the new Sony.

Rumours of an Apple TV set have been circulating for at least two years. In a May 2010 blogpost, Peter Yared wrote:
"Stylish, high-end TVs is the last consumer electronics frontier for Apple to dominate, and it will make apps as much of a differentiator on TVs as they were on smartphones."

and:
"The TV is the last frontier in Silicon Valley's relentless drive to computerise every screen. With the price of fully internet-enabling a screen at below $300, everything that people see and touch is being turned into a computer: mobile phones, billboards, price displays, and with the iPad even magazines, books, and newspapers."

More recently, Gene Munster, an oft-quoted analyst at the PiperJaffray investment bank, repeated his prediction of an Apple TV set launch in 2012, with Stewart Alsop adding:
"Apple will do to television manufacturers what it did to phone makers with the iPhone …"

The idea is exciting and so obvious it's got to happen. Imagine a true plug-and-play experience. One set with only two wires: power and the cable TV coax. Turn it on, assert your Apple ID credentials and you're in business. The programme guide looks good and is easy to navigate; pay channels are just a click and a password away. The TV runs apps, from games to FaceTime and Skype, it "just works'' with your other iDevices and also acts as a Wi-Fi base station using the cable provider's internet service.

But when we turn to the small matter Of implementation, we see a few obstacles.

First, the TV incorporates a set-top box, with storage for the DVR function. It's feasible: the CableCARD was invented for that very use. The electronics of a set-top box:

Now squeezed onto a card that's inserted in the back of the TV set:

It's an attractive idea, but the implementation failed to meet expectations. Although critics accuse cable carriers of being technically incompetent and lazy, I think there's a more acceptable explanation: Carriers looked at the CableCARD and saw complicated field service calls in their future. A separate, outboard set-top box is easy to diagnose and fix; a card inside the TV set, not so much. It generates a host of hard-to-understand bugs: Is the card working? Is it kind of working but causing the TV to malfunction? Is the TV working but killing the card?... and so on. More calls, more finger pointing, more expensive field techs…

Apple's product culture, its talent for giving birth to nicely integrated devices could overcome some of these problems, but not the field tech issue. Would this new product force Apple to deploy its own Geek Squad, or do we see ourselves carrying a 50" Apple TV set back to the store when something goes wrong?

Then there's the complexity of supporting multiple cable systems. Large carriers, such as Comcast, are known as multiple system operators, MSOs. They're a patchwork of acquired systems that have never needed to be compatible. This would either restrict the TV set to a small number of carriers, or make the product more complicated and prone to more bugs – and more field tech visits.

And there's Moore's Law. In addition to the CableCard, the wonder set contains a little computer running iOS, and enough storage for apps and content that's not hosted by iCloud. Great …but how long will it last? Not in terms of reliability, that's not a problem -- especially with an SSD replacing the DVR's conventional hard disk – but in terms of being competitive with newer hardware.

Conventional TVs aren't really affected by Moore's Law. As long as the electronics work and the display doesn't fail – and today's sets are exceptionally reliable – there's little pressure to upgrade. Once a family shells out for a nice 1080p set, it's difficult to sell them the new improved model next year.

We're willing to upgrade our laptops, smartphones and tablets every year or two because Moore's Law keeps improving the CPU and other electronics at the rapid rate that made the computer industry's fortunes. An integrated Apple TV set wouldn't benefit from better electronics as naturally as an iPhone does … unless, of course, the tiny iOS computer is implemented as an easily accessible plug-in module. This could also solve – or at least mitigate – the field service problem: Bring the module to the store, we'll diagnose and replace it if needed … or sell you this year's model.

In one device we might have something like: a CableCard inside an Apple TV 3.0, itself inside a TV set.

With regard to carriers, there's no need to disintermediate them, no need for Apple to seduce them into giving up content sales the way Jobs did with AT&T. Carriers ought to welcome an Apple TV set as a way to increase their ARPU, but for this to happen much work remains. Try getting a human on the phone when you want to add a channel to your current Comcast bundle. At home, you're connected through a secure device with a known MAC address, so why can't you simply point to a channel and click-to-add? This and other bone-headed commercial practices – such as refusing to suspend your billing when you're between houses – reveals a depth of customer-hostile culture that an Apple or a Google would find intolerable, but might have trouble changing.

I mention Google because they're in the TV/internet/apps integration game as well. The first Google TV wasn't a success, to say the least. My friends at Logitech lost tens of millions of dollars – and a CEO – with the first iteration. And Sony's Google TV implementation didn't fly either.

But the concept remains valid. And now that Google owns Motorola, a company with known expertise in set-top boxes and CableCards, we can expect a next-generation Google TV and, quite likely, a Samsung TV set with an integrated Google TV running Android apps and competing with the putative Apple TV.

I used to think product size, carriers and the rapid obsolescence of the integrated computer made an Apple TV set an impossible dream. I'm not so sure any more.

JLG@mondaynote.com

PS: To help think about this some more, a great counter-example: the Bose Videowave TV set. I use and like other Bose products but, with this one, what are thinking? $5,000, no cable box integration, a separate console box for the "integrated" set. See the setup and owner's guides for more details.

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Tech Weekly podcast: Steve Jobs steps down as Apple CEO

In a special programme we discuss the career of Apple guru Steve Jobs as he steps down from his role as chief executive. Jemima Kiss, Charles Arthur and Dan Crow of UK startup Songkick share their thoughts on the effect Jobs has on computing and the company that just two weeks ago became the world's biggest (by market capitalisation).

Dan, who worked with Jobs on his return to the company in the mid-90s suggests that Steve may be the greatest marketer of our time, because of his ability to understand products and what people find exciting in them.

Apple co-founder Steve Wozniak also shares a story from a turning point during the early years of the company – the launch of the Mac – and how Jobs's tyrannical reputation was evident even then.

We also discuss Apple's new chief executive Tim Cook, and ask what the future now holds for Apple.

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Boot up: US antitrust probe on Google Android, Apple goes after Motorola Xoom, and more

A quick burst of 7 links for you to chew over, as picked by the Technology team

Surely it's the (hardcore) few that are the influencers? Of course the group en masse doesn't agree - where would they go inbetween bouts of crippling state websites? - but that doesn't matter.

"Google's online Hotel Finder app reveals a stunning lack of vision at the search giant -- and a glaring weakness in its ideas about innovation."

"News Corp lost $254 million on MySpace, the company said as it reported revenue that beat analysts' expectations."

It goes on.

"U.S. antitrust regulators are focusing their investigation of Google Inc. on key areas of its business, including its Android mobile-phone software and Web-search related services, people familiar with the probe say."

The background. What ever happened to the careless Apple engineer?

"We are pleased that the District Attorney of San Mateo County, Steven Wagstaffe, has decided, upon review of all of the evidence, that no crime was committed by the Gizmodo team in relation to its reporting on the iPhone 4 prototype last year. While we have always believed that we were acting fully within the law, it has inevitably been stressful for the editor concerned, Jason Chen, and we are glad that we can finally put this matter behind us."

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Boot up: Apple may invest $1bn in Sharp, HP Tablets 'not selling' at Best Buy, and more

Apple chief Steve Jobs at Apple the of the second generation iPad. Sales of the tablet last quarter were three times the sales in its first three months Photograph: Kimihiro Hoshino/AFP/Getty Images

A quick burst of 6 links for you to chew over, as picked by the Technology team

"Apple Inc may invest $1 billion in Sharp Corp's Kameyama factory to secure the supply of screens for iPhones and iPads, MF Global FXA Securities wrote in a sales note on Wednesday, sending shares in the Japanese consumer electronics maker up more than 2 percent."

"In a note to investors on Tuesday, Jeffries & Co. analyst Peter Misek concluded that Apple is likely to "strike back" by acquiring patents from rivals such as Nokia or Research in Motion as a response to Google's purchase of Motorola Mobility. He also mentioned InterDigital, which has been widely viewed as a potential target for acquisition by Apple and other major players in the smartphone industry."

"At an event last week, Facebook director of game partnerships Sean Ryan had some choice words for his new competitor. "Google has emulated aspects of our system, which is what they have the right to do," he said. "We just need to be better." He's referring to the way the companies make money from casual online games like Farmville and Words With Friends. Players pay for play time or virtual goods within the games, and the social networks take a cut of the sales. Currently, Facebook reportedly takes 30% from game developers, whereas Google takes just 5%."

"In other words--and I never thought I'd say this--Steve Ballmer was right. Android isn't free. In fact, it's not even cheap. As Daring Fireball's John Gruber points out, the $12.5 billion that Google is spending for Motorola amounts to almost two years' worth of the search company's profits. No company--not even Google--can throw around that kind of cash without envisioning a direct return on its investment"

"According to one source who's seen internal HP reports, Best Buy has taken delivery of 270,000 TouchPads and has so far managed to sell only 25,000, or less than 10 percent of the units in its inventory."

Microsoft is finally ready to talk about Windows 8. Here's the new official blog.

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Boot up: Hands on Google+ games, Apple 'hikes iPhone orders', and more

A quick burst of 6 links for you to chew over, as picked by the Technology team

"Google passes the test so far. It can essentially duplicate Facebook's platform for games and bring over a lot of games that already exist elsewhere. The next test is to see how many games it can get and how the performance works when the games scale to millions of players. Facebook may not be that worried about Google for now, but it definitely has to watch its back because its platform is not so hard to clone."

"Apple has upward adjusted the total order volume for iPhones, consisting of iPhone 3GS, iPhone 4, iPhone 4 CDMA and iPhone 5, for the second half of 2011 by 12-13%, from 50 million units originally estimated at the end of the second quarter of 2011 to more than 56 million units. iPhone 5 will account for 25.5-26 million units, according to Taiwan-based supply chain makers."

So-called digilantes ditch their mission ... because the tech wasn't good enough. I'd wager that's got as much to do with the balaclavas as the tech.

"...Those movies include titles like The Hills Have Thighs and Bikini Jones and the Temple of Eros."

Buddy Media, the Facebook advertising affiliate, now worth about $500m, according to its latest funding round.

"The idea came up during a "what if" conversation with my wife Brigitte, while walking along University Avenue in Palo Alto. What should Apple do with its almost beyond comprehension $76B in cash? The COO of the Gassée family is creative and practical, an abstract painter turned "lumber VAR"-she builds or rebuilds houses in Palo Alto. She's not enthralled by technology and takes a utilitarian view of computers, phones, navigation systems, tablets...an attitude that provides a useful counterpoint to my sometimes overly-enthusiastic embrace of anything that computes."

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Boot up: Apple blocks Samsung Galaxy Tab, Nokia pulls Symbian from US, and more

Samsung's Galaxy Tab 10.1 was launched at the company's headquarters in Seoul. Photograph: Jo Yong-Hak/Reuters

A quick burst of 8 links for you to chew over, as picked by the Technology team

"The US Patent and Trademark Office officially published a series of 20 newly granted patents for Apple Inc. today. There were three notable inventions presented today. The first relates to Apple's "Integrated Touch Screen". The invention allows the touch display to be manufactured with fewer parts and/or processing steps as well as ensuring that the display itself may be thinner, brighter and require less power."

"Motorola Mobility CEO Sanjay Jha now says he'd be interested in shipping Windows Phones if Motorola could get the same kind of deal that Nokia got from Microsoft."

Good luck with that.

Not looking good for Dropbox: "I've spent a bunch of time talking to entrepreneurs who are building companies in and around the cloud storage space. It's not a space I like very much because I don't think we'll be using files in the cloud. Now Dropbox is a brilliant company and an amazing service and they are doing very well, but will we need a service like Dropbox when everything is in the cloud? I don't think so."

'Citing privacy concerns and the difficulty involved in deleting a Facebook account, Anonymous hopes to "kill Facebook," the "medium of communication [we] all so dearly adore."'

"Today, Facebook released their Messenger app and seconds later, we see that there is a video component to the application"

"Nokia plans to stop selling both feature phones and Symbian-based smartphones in the United States and Canada as it tries to put all of its muscle behind the company's huge bet on Windows Phone."

Samsung: "Samsung is disappointed with the court's decision and we intend to act immediately to defend our intellectual property rights through the ongoing legal proceedings in Germany and will continue to actively defend these rights throughout the world.

"The request for injunction was filed with no notice to Samsung, and the order was issued without any hearing or presentation of evidence from Samsung.

"We will take all necessary measures to ensure Samsung's innovative mobile communications devices are available to customers in Europe and around the world."

"There are differences in competition law between Germany and the Netherlands, which is why Apple filed separate lawsuits. In Germany, Apple asserts not only an infringement of the said Community design but also cites unfair competition grounds, denouncing the Galaxy Tab as an iPad imitation."

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Boot-up: Google buys Dealmap, Apple blocks Samsung Galaxy tab down under, and much more

Samsung Galaxy tab 10.1. blocked a turf war down under photography: Jo Yong-Hak/Reuters

Quickly to chew over, as picked by the technology team burst of 9 links for you

Question: what took it so long?

Plus the title text, of course.

Tomi Ahonen, ex-Nokia EXEC, always with the happy: "Nokia handset unit generated EUR 8.5 billion (b $) sales in the fourth quarter by around 1 billion euros profit." So if we don't ignore Nokia's network unit of NokiaSiemens networks - was initially a group that Nokia has tried, for six months now nobody willing sell, but, if the price of the loss-making unit to pay - business phones from Nokia, smartphones, and 'Featurephones' the size of 44 billion dollars at the annual level six months ago.
Now where are they? The handset unit reported total revenues to €5.5 billion (US$ 7.5 billion) and a loss of 247 million euros ($321 million). ..'Leadership under Stephen Elop called' and his foot-in-mouth disease... Nokia has already shrunk - 32%! In five months! When was the malaise only in one of the three great departments of a company, the other two can tolerate it. "But right now, Nokia disappears before our eyes!"

"" [RFL] spoke by e-Mail with Oxblood Ruffin, a Canadian hacker (just), joined the cult of the dead cow a hacker group, the the word "Hacktivism."He coined is also founder and Director of Hacktivismo. I asked him about anonymous of recent operations and the ethics and the rules for the use of hacktivism.
RFE/RL: How would you define "Hacktivism"?
Ruffin: "Hacktivism uses technology to improve human rights." Also employed nonviolent tactics and leans on the original intent of the Internet, which is to keep things and run.
"Things like DDoS attacks, Web happened, malware and network are violations of restricted area relating to tactics." "These generally limit speech and are a violation of first amendment went out and contrary to article 19 of the ICCPR [International Covenant on Civil and political rights] and UNDHR [Universal Declaration of human rights]."

Oxblood Ruffin. Make room, game of Thrones.

"Adobe today a new tool called Adobe edge of creative professionals, animated Web content with Web standards like HTML5, starts to design CSS, and JavaScript." Does not Flash.
"Is aimed with Adobe Flash can be used, but not replaced, the Web design software is Adobe's big bet on how it will continue to consolidate its position as a top player in the infrastructure of the modern Web, especially as increasingly mobile going on the Web." "In this new mobile context in the Web has become a more hostile environment for Flash, which is no place on Apple mobile devices, and probably never has."

"I have technology products for 20 years was review." I've seen everything from products, which were those astonishing of the get-go (the first Palm pilot mind comes), were the downright dangerous (a mouse, the fire caught on). But it has never been a time, when I look so much of the new stuff, so much is long not ready for mass consumption. Sometimes it is a bit quirky; Sometimes I can get it work. "And when I call the manufacturer for help, they are often aware the problems I experienced."

You imagine new released products for which this could be true?

"Apple Inc. won an agreement from Samsung Electronics Co., that the South Korean company is not the latest version of their Tablet PC in Australia sell, until a patent infringement lawsuit of the country has been resolved."

"The Samsung Galaxy tab 10.1 violates 10 Apple patents, including the"Look And Feel"and touch screen technology the iPad, Steven Burley, a lawyer for Apple, Federal Court Justice Annabelle Bennett in Sydney said yesterday." "One in Cupertino, California-based company Australian injunction and also wants to stop the sale of the tablets in other countries Samsung searched, said Burley without."

It is an interesting way to keep the market share. Apple is Samsung damage numbers, if the patent suit fails.

Paul Carr skewers the issue with the promise. "And therein lies the real problem of Web 2.0-whether it related accommodation takes form of SEO-driven"news"or amount." To money-real money-attract millions or millions of users have in this game. And if you have to do with this kind of numbers, it is literally impossible to treat not the user as part of the data. "It is but depressing not surprising that Web 2.0 is faux socialization and democratization create a world in which everyone to a number in a spreadsheet is reduced ironic."

Ed Bott provides for bad times: "even if Apple Adds a definition for this piece of malware, I suspect that the next iteration of Mac malware authoring Kit contains a feature parity with its Windows counterparts to put on it." These days, malware on Windows side use usually polymorphic code that makes each sample unique. The technique makes detection systems, such as Apple's XProtect, essentially useless it signature-based malware.
"" The bad guys have many options to the distribution of malware: booby trapped porn sites, counterfeit audio and video codecs, pirated copies of the software, with "a little something extra", coming also fake security updates. "The increasing success of the Mac platform and its relatively weak security ecosystem easy prey for means enterprising crooks."

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Post-PC? What Apple iPad you tell us about computing future sales and PC trends

PC sales without Apple 2007q3-2011q2, around the world. Source: Gartner
Some interesting points, the third as a result of Apple's quarter (fiscal year starts in September) results, and the lion version and the version of the new computer of the other day and broader developments in the computer sales:
• iPads (9.2 m) exceeded Macs (3.95 m) in the fourth quarter in a row - and they are now more than double sold.
• If you iPads "Piece described" as (Steve Ballmer does, but you can not agree) then Apple would be the second largest PC maker in the world (according to HP, which in the second quarter according to Gartner 14.9 m units shipped.)
Probably not useful one IOS as "PC" define it however. The whole Tablet class is intended for a different kind of data processing; the HP TouchPad safely positioned itself as a business device (something that by its leaders me time and again stressed), but the kind of work do you do with him fits in places where laptops and desktops just not go.
The new Mac mini released • no optical drive (CD or DVD) on Wednesday.
• The new MacBook Airs have released on Wednesday no optical drive.
• The low-end MacBook is gradually abolished.
The new MacBook Airs • use only Flash (SSD) drives. They are smaller, but they are much faster than hard drives.
• Lion will be available as a download for $29 in the United States (£ 21 in the UK) or can it on a USB key for $69.
• Lion is much more like a Tablet operating system than previous versions of OS X. Not surprisingly, since Snow Leopard came out before the iPad OS had been completed.
• Lion has a "Internet recovery" where if the hard disk of your computer needs repair, you can start from the Internet. You need high speed, but it is available in many places. This will not help if your hard drive crashes, but it is certainly helpful.
• If you Apple's Macintosh auctions of the worldwide PC market, a total of 81.2 m (Gartner), or 80.4 (IDC)-strip Windows PCs were sold in the quarter. I assume that close to accurate as if it compares you with my analysis of Microsoft's "more than 400 m Windows 7 licenses" sold where I 80 m PCs than the figure offered (because obviously Microsoft has received a license to Macintosh programmes).
• Who is a year growth of Windows PCs by only 1.8%; and that growth is only visible as a clip of 9% of PC sales in the Asia Pacific region grew to. The picture in the United States and Western is the contraction in Windows PC sales. (I am qualified to add as Apple, grew again faster than the rest of the market - 11.9% or almost ten times faster - for 16 consecutive quarters.) (It comes from a very low base, but it is still an interesting fact, which must point to a "halo effect" from the success of the iPhone and iPad recently.)
• Microsoft is looking for tablets and other devices to: his ambitious "an ecosystem" plan seems in a world where you can not, your desktop PC... or you may be aligned. You may be on a tablet. For Microsoft, it is the only way forward.
Since all... you'll see a few things. PC sales in the West, where they first invaded really look how they have passed their peak. Companies replace older systems have been driving sales together, but consumers hold back. Sometimes this will be due to the Economic Outlook: faced people in the paddling is no reason at the moment when the prognosis is exactly rosy with the United States United States and Europe with its debt ceiling and the euro area a meltdown.
But the risk that at the time these two crises have sorted itself out and in the United States and Europe back to "normal" growth (what that sees in the future), will have turned to computing trends. Apple tends to be the computer industry to places to which already it could go, but is enough not quite brave to in to move: give up floppy drives with the iMac, and Wi-Fi in laptops. (True, Dell was the first time with Wi-Fi in laptops, but not push it it out more than half of its laptop line, as Apple did with the original iBook.)
Now Apple are saying is that the future is no optical drive, no hard (Flash instead) Internet and boots. Many of the computing future might look not like the computing past. Are the right way for children to interact with computers learn elementary schools first desktop PC really? Does everyone in a company need a desktop or laptop?
Yes, one could certainly argue that tablets are just a passing fad like Netbooks. (And look where going Netbooks: sales are way down.) But Microsoft doesn't seem to think that; It seems to think tablets (as a slate or "Convertible" tablet with keyboards) are an important segment.
Apple, meanwhile, thinks that all connections in the cloud. Google agreement with its GoToMyPC, which is completely cloud-based (albeit with some offline work promised.) Which provides on also a note if you're going to see that Blu-ray drives in Apple Macs. Yes, they are all over the place in Windows laptops. But it looks that they will never come to Apple machines. Apple is instead in the direction of downloads show way she sees things in the future.
And if you think that's just Apple, consider this question: faith guides you, that we are all at some point end 2012 expect these Windows 8 tablets, bulky DVD or Blu-ray drives will contain? And do you think that it the spinning hard drives or SSDs? The answer is pretty obvious.
Microsoft reports results on Thursday night. See what he says about PC sales. (The transcript is time on seeking Alpha the next morning UK.)
Go - predictions, what the data will look like in five years. Five years ago there was no iPads, no Netbooks, hardly SSDs, and you get even floppy drives, but it was a Blu-ray drive is difficult to achieve. How about 2016? What does, that you look like?

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Apple stores: a steamed 10-year anniversary

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California has 49 Apple Stores. France has seven: Photograph: Elise Amendola/AP
Apple and understatement aren't close relatives. Not that they don't have a right to strut a bit: after all, under its returning co-founder, Apple 2.0 performed the most stunning corporate turn around ever – and shows no sign of slowing down. As a result, product launches, developer conferences and quarterly earnings announcements all turn into opportunities for the company to blow its own horn.
So, when the 10th anniversary of the first Apple Store came by, I expected a big celebration: fireworks, decorated stores, laser engravings on anniversary edition iPods, a coffee table book with a Steve Jobs foreword, a speech, a video … Yet, on 19 May, nothing happened. At least publicly.
All we got was a leaked internal poster celebrating 10 years of achievements and learnings:

An eyeful or an eye-chart. You can get a more legible PDF version from ifoAppleStore.com. Or, courtesy of Tech Evangelist Joey deVilla, a version obligingly rendered in text with paragraphs. Longish as it might be, the document is worth reading: it rings true and proud; it is a manifesto of Apple's retail philosophy – and of its impact on the entire company.
I decided there had to be a reason for the official silence. I wanted to make the anniversary a Monday Note topic, but hearing the silence and unable to ascribe a meaning to it, I decided to bin the topic for a while.
The wait didn't last long: Ron Johnson, Apple's senior vice president of retail operations, announced his departure right after the 6-10 June WWDC. Divorce papers the morning after the anniversary … The muting of the celebration made (some) sense.
But why did Ron Johnson leave?
Under his tenure, Apple Stores has become the envy of the retail industry, breaking one record after another: revenue per square feet, year-to-year growth, store size, foot traffic and architectural design. (See here for a neat set of Apple Store statistics.)
With such a record, one can easily see Apple's "retail guru" standing up, declaring "My Job Is Done" and leaving on a high note.
Then, sparing us the rote "spending more time with my family" explanation, Ron states he always wanted to be the chief executive of a major retail chain. JC Penney just happened to need a new chief, this was an opportunity to fulfil a long-time ambition, to become his own boss.
All very logical, but, for a number of reasons, the polished tale doesn't quite ring true.
First, with 326 Apple Stores, the job isn't quite done. Exceedingly well done so far, but not complete. For example, after the US, China is now Apple's second market, it is where Apple experiences its largest year-to-year growth. According to ifoAppleStore.com, the site that does an excellent job of documenting the life of Apple Stores, Apple will open 25 more stores in China by the end of 2012. My own observations of Apple's third market, western Europe, lead me to believe Apple is very far from reaching saturation there. For example, with a population of about 36 million, California has 49 Apple Stores. France, with a population of 62 million, only has seven. Per capita GDP differences ($47K vs. $34K yearly) don't account for the disparity. We can safely assume this applies to western Europe as a whole, showing how much headroom Apple Stores still has there.
No one knows what the saturation is, fortunes have been lost by those who believe trees grow to the sky, but there is no reason to consider Apple Stores is "done". One could just as easily call today's Apple Stores network ''a good start''.
Second, Apple Stores is always evolving. This gets us much closer to the real explanation than my previous point. The never-ending stream of changes, the attention ranging from architectural design to minute furniture details all bear another man's imprint: Steve Jobs'. We'll recall he picked Bohlin Cywinski Jackson as the architects for Pixar's elegant headquarters – and kept using the firm for most Apple Stores building or renovation projects. In the process, several Apple Stores became architectural icons. Then, when it came to interior design, Jony Ive, Apple's senior vice president of industrial design took a lead role.
For the ever-changing details, watch Jobs proudly take us through the first Apple Store in this 2001 video. And compare with today's setup.
For amateurs of minutiae, ignore the main checkout podium where MacBooks run transactions and, instead, take a look at a standard product display table. Your friendly Apple Store employee just performed a painless cashectomy using the newer iPod Touch-based portable point-of-sale terminal. Now, where is the printer for your receipt? Affixed under the table's main board, upside down, invisible. No unseemly display of non-Apple appliances. For the occasional cash transaction, foreign visitors mostly, a few tables also carry a barely visible cash drawer cut in the side.
Recently, stores reduced space dedicated to accessories, peripherals and, with the Mac App Store in mind, boxed software. This resulted in more room for something called Personal Setup, where an Apple employee helps a customer get started with his/her new purchase.
You get the idea: "Apple", meaning Jobs, is never satisfied, always looking for ways to improve its stores or, for that matter, anything else Apple.
In the end, in spite of his signal contribution to Apple's success, Johnson must have felt disenfranchised. Coming in, he brought with him expertise and contacts "Apple" didn't possess. Over time, Jobs' keen interest in the matter turned into heavy involvement in every facet of the operation. Apple Stores became Steve's brainchild, not Ron's. Hence his decision to look for an opportunity to be really in charge, as opposed to working for a gifted, focused and strong-willed visionary.
Now, why did Ron Johnson pick JC Penney?
He doesn't need the money, we're told he made about $400M working at Apple. And JC Penney, to say it politely, isn't the most attractive of US retailers. Once an American icon, JC Penney is now a tired chain. All the better, some say: Ron Johnson will bring some of the Apple magic and revive the company. This is drawing a very superficial comparison: the two kinds of retail establishments couldn't be further apart. Apple runs with a very small number of SKUs (Stock Keeping Units), a very short product line. Conventional retailers tens of thousands of different products. Apple is willing to spend tens of millions on a single store, JC Penney never did and very likely never will. Apple products are often elegant, if not iconic, not something that can be said of JC Penney's merchandise.
Further, it looks like Ron's CEO title isn't exactly endowed with full meaning: Reuters and the WSJ let us know his role will be "limited", at least initially, "focussed on marketing and merchandise selection, while Ullman [the real chief and chairman] will oversee the more common executive responsibilities of accounting, finance, corporate strategy and logistics …"
The Ullman in question is Myron (Mike) Ullman, age 64, a veteran retail executive with experience at LVMH's DFS (Duty Free Stores) business unit and RH Macy, among others. He also sits on the Board of Directors of companies such as Starbuck's and Global Crossings, and of several Bay Area charitable organizations.
Another unexplained datum is Ron's start date: 1 November. The most likely but hard to confirm explanation must lie in a paragraph of his Apple exit agreement.
When that date comes, we'll see if Mike Ullman really handles the reins to Ron or if the Apple alumnus finds himself working for yet another strong-willed boss.
Back to the Apple Stores and to Ron Johnson's legacy: quoting David Berman and his quarterly DeeBee Index, USA Today reports Apple contributed to 20% of "all sales growth by publicly traded retailers in the US", this for the first three months of 2011. One has to qualify the number a bit: it relates to publicly traded retailers only, not to the entire US retail sector. Still, keeping in mind the likes of Walmart are all publicly traded, Apple's share is surprisingly high.
We'll now more in a few days, when Apple releases its numbers for Q2, the April to June 2001 quarter.
— JLG@mondaynote.com
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Apple "Lion": due on Wednesday via app store would 1330 BST you fit?

X 10.7. real soon now come Apple OS.
During its earnings conference call, Apple confirmed that the next version will be released by Lion, OSX 10.7, on Wednesday. It is expected that it 1330 BST made available.
Since it through the app store, what means that the release can simultaneously be all over the world - and not, as in the past happened, comes at different times depending on store openings or early deliveries over the parcel services. For marketing people, like in the Apple, it is a dream come true.
Note that you can update only the lion, if you are already running OSX 10.6.7 10.6.8. You should also run software update first to ensure that you have published the latest Migration Assistant, overnight.
You should also, and you always back up. The download is about 4 GB.
We have a quick preview of what to expect from Lion - done and if you tuned stay then we need a full review, as soon as possible.
Previously: Apple's Mac OS X Lion could arrive next Thursday: here's what to expect.
Once again, the upgrade costs $29.99 or £ 20.99 in the United Kingdom. Lion requires at least 2 GB RAM and an Intel Core 2 Duo, core i3, core i5, core i7 and Xeon processor - what does it mean that is now compatible with Apple computers, the Mac mini from late 2006 with the exception.
And did we mention, that first a backup should you make?
(Of course we were thing wrong on the Thursday, how, that passed last week.) But we are sure it will be published.)

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