Apple’s an example of why it’s so hard to create middle-class jobs in the U.S. now,” said Jared Bernstein, who until last year was an economic adviser to the White House. “If it’s the pinnacle of capitalism, we should be worried.
In this NYT piece about Apple and why, as much as we love tech companies, they are not the economic drivers in the United States that their industrial brethren are/were. A telling paragraph from the same article:
Apple employs 43,000 people in the United States and 20,000 overseas, a small fraction of the over 400,000 American workers at General Motors in the 1950s, or the hundreds of thousands at General Electric in the 1980s. Many more people work for Apple’s contractors: an additional 700,000 people engineer, build and assemble iPads, iPhones and Apple’s other products. But almost none of them work in the United States. Instead, they work for foreign companies in Asia, Europe and elsewhere, at factories that almost every electronics designer relies upon to build their wares.
Here’s something that I don’t think a lot of people working in what are euphemistically referred to as “content industries” — books, movies and television of all kinds, and more specifically the delivery of those said items to consumers — are aware of:
Customers don’t care about your excuses.
They don’t want to have to understand what an mpeg4 file is, or that there are two different book formats out there and which one the kindle supports and which one nook does and where do those free books Google has work, or even want to contemplate the intricacies of taking a movie they “own” (on DVD) and watching it on their Kindle Fire.
“I was told it reads books. Why don’t the books my friend gets from the library work?”
“I thought this could play movies. How come I can’t watch my DVDs on it? Don’t I own them?”
If your answer is not something along the lines of “put the media *here* and press a button,” you are failing your customers. They don’t want to be told that books bought on one device don’t work on another device that you support, as is sometimes the case with children’s books or magazines on the actual nook devices versus the phone apps. They don’t care if it won’t look all that good; they just want the option. (Well, they want it to look good, too. But even if it doesn’t, they want to know that it’s possible.)
Shockingly, music has nearly reached this fluid state, at least in the mp3 form. Everything reads mp3s, they’re easy to make from physical media, and they’re sold from many places unencumbered by DRM. This is not what most people a decade ago would have predicted for music on computers. (Notably, easy access to mp3s has done little to curb interest in streaming services, which have the walled-garden problem in an entirely different way.) For this, we probably have Apple and Amazon to thank above all others — iTunes for making mp3 purchasing commonplace, and then Amazon for forcing the issue with regard to DRM, or more specifically the lack of it.
The fundamental disconnect here is two different ideas of what goes into delivering content to a consumer. Someone who works as a publisher looks at media and sees a complex web of rights, payment, distribution, and technical limitations, with a dozen players and phalanxes of lawyers. A user sees “a thing that I paid someone for, and now it’s mine to do whatever I want with.” Rental v. ownership. One of the most common questions I get about ebooks is about the incomplete mapping of the metaphor of ‘book’ onto the ‘e’ part of ebooks — “Why can’t I give this to someone else, like I can a real book?” Nothing I say at this point — nothing! — is a good answer. If I say something about rights management, the response is “well, I paid for it, didn’t I?” If I wax sympathetic, it just feeds their desire to treat the ebook file exactly the same as a printed copy. (The limitations applied to ebooks in this case are perfectly legal, just not logical to the average reader.)
iBooks Author, and its limiting EULA, are a perfect example of the conflict between the tech and the traditional. Ebook creators want to create one file and make it available to anyone who wants to pay for it — if they have to distribute it through seven different digital storefronts, fine, that’s a hurdle most are willing to clear. But those storefronts, each operated by a separate tech company (and yes, Barnes and Noble’s nook business definitely falls into that category) want to differentiate in how they offer ebooks — to compete on breadth of content, not just quality of service. So the neat ebooks that iBooks Author can create are only allowed to be distributed (for cost) through Apple, for iPads and iPhones. And Apple is perfectly within their rights to require this. But now users have yet more fragmentation to deal with in the ebooks space — iBooks only work on Apple devices. While publishers squabble, the experience for the end user suffers.
The magic solution for this, of course, is probably impossible for now: One format for books (analogous to mp3, it doesn’t have to be the most technically accomplished format, just the one that everyone decides upon), access to the files in an unencumbered format (the actual digital file — a single blob of .epub or whatever), and readers that will read that format on any screen, even across manufacture lines (there is software read an .epub on a PC, an eInk screen, an LCD tablet). Modify the various technologies and formats in there for the applicable media, and you have a recipe for happy consumers, who can choose between technical platforms on their own merits, and not feel locked in to their respective media libraries.
When Barack Obama joined Silicon Valley’s top luminaries for dinner in California last February, each guest was asked to come with a question for the president.
But as Steven P. Jobs of Apple spoke, President Obama interrupted with an inquiry of his own: what would it take to make iPhones in the United States?
Not long ago, Apple boasted that its products were made in America. Today, few are. Almost all of the 70 million iPhones, 30 million iPads and 59 million other products Apple sold last year were manufactured overseas.
Why can’t that work come home? Mr. Obama asked.
Mr. Jobs’s reply was unambiguous. “Those jobs aren’t coming back,” he said, according to another dinner guest.
One former executive described how the company relied upon a Chinese factory to revamp iPhone manufacturing just weeks before the device was due on shelves. Apple had redesigned the iPhone’s screen at the last minute, forcing an assembly line overhaul. New screens began arriving at the plant near midnight.
A foreman immediately roused 8,000 workers inside the company’s dormitories, according to the executive. Each employee was given a biscuit and a cup of tea, guided to a workstation and within half an hour started a 12-hour shift fitting glass screens into beveled frames. Within 96 hours, the plant was producing over 10,000 iPhones a day.
“The speed and flexibility is breathtaking,” the executive said. “There’s no American plant that can match that.”
DING DING: How WhatsApp delivered RIM’s final blow
We’ve seen this for a while – it’s not a new story. It’s the beginning of an end. Here is why I think that it was a number of startups and a series of mistrials and tribulations, and not a Fortune 500 company, that really led to RIM’s demise.
We’ve seen it in it’s messaging. We’ve seen it in its advertising. For many years now, BlackBerry Messenger (BBM) has been considered RIM’s most valuable asset. But the problem lies within the proprietary messaging service’s very name – as the name suggests, BBM, in its current form, works only with RIM-built devices. This has led to a number of Silicon Vally garage-starters to enjoy the first mover advantages in the space. Of course, having Apple develop iMessenger did not help either.
Recognizing a need for cross-platform messaging services, a number of third parties – mostly small startups – have filled a gap that the Canadian tech giant, with years of expertise, could have easily filled. WhatsApp only charges $2 on an annual subscription basis after a one year trial. With relatively small development costs, and existing platform and a superior product, RIM could have easily charged $25/year or more.
But the emergence of WhatsApps (and a number of other third party messaging services) is not just competition, but rather a metaphor for the Waterloo-based company’s flawed strategic thinking.
A paradigm shift needed to occur. Failed management and corporate bickering led RIM to completely miss the theoretical boat. They could’ve sold BBM to consumers for millions, and to corporate users for billions more.
RIM first started to fall apart in the early 2000’s when it became complacent in it’s R&D efforts. Hazy executives used their clouded judgement to mistakenly forecast their industry’s advancements further than simply email. At one time, RIM was on top of the world, with Ontario’s Kitchener-Waterloo region widely regarded as Canada’s technology hotbed – even Google made Waterloo it’s Canadian home.
Once email became the norm for smart phones, however, RIM’s focus shifted to security, reliability and integration with apps such as BBM – all strengths which could be provided for devices built by other manufactures.
RIM needed to become a service company; they needed to accept the fact that they will never be a best-in-class hardware manufacturer when competing against category leaders such as Apple and Google’s Motorola.
For the consumer segment, RIM is at the mercy of its competitors. It needs to play within the existing framework of innovations such as the App Store and Android Market. RIM should take every positive feature from BlackBerry OS and develop each as third party apps for Android and iOS devices or, if its competitors allow, through licensing partnerships with Apple and Google integrated into their respective operating systems.
And to survive, RIM should focus the majority of time its time on keeping corporate users. Everyone knows that corporate sales is RIM’s real bread and butter. It needs to bundle its corporate segment strengths (security, encryption, and service reliability) to offer a compelling product. An offering that needs to seamlessly integrate with existing corporate IT infrastructures, but that is flexible enough to cope with the dynamic new services of the twenty-first century that will undoubtably deliver real business value.
The real question is, has the boat sunk? Is it too late?
A stand for tablets, phones, eReaders, cameras, etc. Looks like a Facehugger from Alien, thus it is cool.
Instead of offering any sort of constructive ideas on how to curb piracy, Sopa’s opponents say the music industry should move with the times, not hold on to an old business model. Yet, despite many of them declaring themselves entrepreneurs, they can’t offer any valid suggestions of what that business model might be. Quality content is not cheap to make, hence why online ad-funding has not managed to save some of the world’s best newspapers from running at a loss and cutting staff. We may not see the repercussions of it now, but a Wikipedia-style blackout of all music, television and film would give a taste of what’s to come if we do nothing. Maybe then these technology companies would realise there is something to lose, even for them. Believe it or not, there’s a limit to how many cute animal videos one can watch on YouTube.
Seriously? You’re going to Atlas Shrugged us? (or should that be Atlas Shrug us?)