How the value trap squeezes Windows PC makers’ revenues and profits

The Guardian discusses the impact of the value trap on Windows PC makers.

The problem for Windows PC makers is that they are caught in the “value trap”. Even as prices are being forced down by commoditisation and slumping demand, they have no obvious way to capture any of the money that a consumer who buys one of their products subsequently spends with it.

A comparison reveals the stark difference in profitability between Mac and Windows machines.

And how profitable are Macs on their own, even without that revenue stream? Apple doesn’t break out the figure for Mac profitability. But Horace Dediu of the Asymco consultancy reckons there’s a good-enough rule of thumb: assume that Macs have an 18.9% profit margin, which fits well enough with its historical operating margins.

That metric gives a hardware per-PC profit which has dropped from $241 to $232 – an erosion, certainly, but a margin that Windows PC makers would kill for: it’s more than 10 times greater than their per-PC profit.

LG and Sony are leaving the PC market. Acer might be the next in line if it does not turn its fortunes around.

Apple’s Tim Cook on the smartphone market

WSJ.com interviews Tim Cook and asked him about the smartphone market.

WSJ: Will the smartphone market follow the PC market, where Apple is a niche player?

Cook: I don’t view it that way. There are several reasons. If you look back at the Mac/Windows battle that was going on at the time, you’d find that one of the things that was the catalyst for separating Mac from Windows share was applications. There was a vast, vast difference in the number of applications that was available for the Macintosh than what was available on Windows. Over time, that gap grew and grew and grew. And in fact, the Mac began to lose some key applications. We have over a million apps on iOS. We have over half-million that have been optimized for iPad. That half-million compares to 1,000 for Android tablets. That’s one of the reasons, although not the only reason, why the experience on Android tablets is so crappy because the app is nothing more than a stretched out smartphone app.

It is the attention to details that make the iPad stand out.

Cook: The other thing is that Windows pretty much was one thing. Android is like Europe. Europe was a name that somebody came up with for Americans who didn’t understand that Europe was a lot of countries that weren’t like U.S. states. They were very different. Android is many things. How many people who use a Kindle know that they’re using Android? And you see what Samsung is doing by putting more and more software on top. I think it’s night and day. The compare is so off.

So, no, I don’t see it as same. And I’m not saying this just because I am at Apple because I do understand the PC world at that time because I was in it. It was totally different. If you really talk to the people who went through it and understood it at a deep level, I don’t think any of them would tell you it’s the same.

Sony revises its profit forecast to a $1.1 billion annual loss

WSJ.com reports on Sony’s forecast of $1.1 billion annual loss, down from its previous forecast of $300 million profit.

In an unexpected move, Sony also said it would split off its TV business and operate it as a subsidiary, similar to what it did with its mobile-phone and PlayStation videogame businesses. Sony said the move is aimed at accelerating decision making, while analysts speculated that it could leave open the option of selling the business in the future. For the full year, Sony now expects to record losses from the TV business totaling ¥25 billion—its 10th straight year in the red.

I think Sony plans to sell off its Vaio PC business to get out of having to compete in a shrinking market. It is a wise move ditch PC and focus on mobile devices in the post-PC era instead.

Why does Google keep making products for nobody?

The Tech Block asks why Google keeps making products for nobody.

Just look at Chromebook Pixel for example. How many people are really going to spend $1300 on a high-resolution Chromebook? Are techies going to? No so much. Are everyday consumers going to? Hell no. Why even build it? To prove that they can build a high-resolution laptop for $1300? At this point, any hardware manufacturer can do that. Just go to your local Best Buy.

Or what about Google Glass? If Glass dropped by half, or even a quarter of its current price, would consumers buy it? I’d wager that most wouldn’t because no price drop would change the awkwardness of wearing one in public.

But at least they’re trying, right? Absolutely. I’m glad they are. But it would be awesome if the brilliant minds at Google worked on something everyone reading this would actually want to buy. Not something we probably won’t see for years, maybe even decades.

This adds on to points raised in the previous article.

One diabetic’s take on Google’s Smart Contact Lenses

Om Malik shares his thoughts on Google’s smart contact lenses.

For example, why would they ignore the fact that as a diabetes patient, it is generally recommended that I not wear contact lenses. Yes, I understand that there are many different opinions about this, but it is generally thought of as smart to not wear contact lenses, as they always carry the risk of increased complications for diabetics. And on top of that if you have say, astigmatism (like I do), then contacts are less of an option.

Never mind the big fact that most of the people who do suffer from diabetes (Type II) tend to get it because of poor diet, most often because of lack of better diet options due to increased economic and financial stratification of our society. Diabetes is a growing problem in countries in South Asia and parts of Asia and Latin America, especially among those who fit in the lower income category; you know, the kind of people who might find contact lenses an expensive luxury. The less financially fortunate among us are very same group who are much more likely to not monitor their blood sugar levels due to work conditions and financial limitations.

Google lacks the human approach.

And yet, I cannot get over what seems to me a tone-deaf approach by Google’s scientists. It also highlights Google’s fundamental challenge: it fails to think about people as people, instead it treats them as an academic or an engineering problem. Instead of trying to understand the needs of actual people, they emerge with an elegant technological solution.

It is not just this one time. Google+, their social network, is a fail because it fundamentally isn’t social or about people — it is an effort to solve Google’s need for social data for better advertising using machines. Similarly, Google Glasses are a cringe-worthy assault to the social interactions of normals, but because a certain subset of Googlers — including co-founders Sergey Brin and Larry Page — have a cyborg fetish, it is okay to make that design. It is frustrating for me to keep repeating this, because Google is a company with huge resources and those resources could be deployed more effectively and have a much more positive impact, more quickly. And to do that, the company needs to learn to be human and develop compassion for human condition.

Some might argue that Google+ has been a success. Well, if it was, why would Google integrate it into YouTube and force YouTube users to use Google+ comments? Why integrate Google+ with Gmail and allow users to receive emails from strangers?

Adware vendors buy Chrome extensions to inject ads and malware

Ars Technica reports on adware vendors buying over Chrome extensions and then injecting ads and malware into the browsers of existing users.

Google is aware of the issue, stating that it will be changing its extension policy in June this year to allow only single-purpose extensions. So for the time being, either you live with the ads, remove the offending extension or switch to a different browser.

Apple expands worldwide access to educational content

Apple announced that its iBooks Textbook and iTunes U Course Manager are now available in over 50 countries.

About a week ago, Walter Isaacson talked about how Apple should “disrupt textooks”. I am pretty sure Apple is already doing so. For Isaacson to comment that Apple needs to disrupt cameras and textbooks shows that he is probably better off at writing than analysing tech trends.

Sometimes we need to step away from our own little world and look at things as a bigger picture. I see people criticising Apple’s new iPad ad for paining a false impression of what the iPad is used for. They fail to realise that while they use tablets to only to surf social media, watch videos or play games, there are people out there who are making better use of their devices.

I have evolved as an iPad user. When I got my first iPad, I used it for entertainment, mostly gaming. But the iPad has since become a medium for consuming content for me. When schools and students start to embrace the iPad as something more than an entertainment hub, it will become a powerful educational tool.

How Newsstand broke the home button on iOS

It goes without saying that Newsstand is a controversial topic in the iOS world. Some think it’s a welcome improvement to the ecosystem, while others blame the app for locking their hard work away in limbo.

In 2012, John Gruber said that Newsstand is a place where apps go to be forgotten. Today the Newsstand app is much worse. The folder-like design in iOS 5 and iOS 6 has been replaced with an opaque app icon. The end result is so horrible that it’s hard to avoid thinking it was done maliciously: if someone was tasked with hiding away a set of unwanted apps, they would be likely to come back with a design that was something very much like the iOS 7 Newsstand.

Influential blogger and Instapaper founder Marco Arment definitely isn’t a fan of it.

I see no benefit to magazines being in Newsstand anymore. Newsstand apps now have no meaningful exclusive abilities, and iOS 7 effectively buries them in a bland, opaque folder that’s easily hidden.

I am not overly concerned about that, but I do question why Apple treats the home button differently when you’re in the Newsstand app.

What’s the problem?

From my early days in computing, I always remembered that there was one button that you could press to solve a frozen computer, and that was the reset button. Aside from you not plugging that button in correctly, pressing it always meant that your computer would be forced to restart. Kind of like a get-out-of-jail card. Aside from the issues that could arise from forcing your computer to restart, it was your safety net.

The iPhone’s home button doesn’t restart the phone, but the use of it has always been consistent: you press it, and you’re taken back to your home screen. Aside from situations where an app has crashed badly, you could always rely on the home button to take you home. Until now, that is.

Pressing the home button within the Newsstand app just takes you back to your library of magazines. From there, a second press (finally) takes you back home. Doing the five-finger pinch-to-home gesture on the iPad yields the same result.

So the home button works as a back button in Newsstand? You could argue that Apple didn’t want to include a button to take you back to your magazine library, but if you take a look at the updated iBooks app, there is a button (or should I call it label) there that states “Library” which does just that.

It’s not the end of the world

I could scream bloody murder, but the reality here is that it’s not a big deal, and is probably something that Apple will address in the future. The usual reminder that iOS 7 is still fairly new should be brought up, so while I’m not impressed with this, I’ll continue to press the home button. Twice.

PS: On a related note, the Newsstand app also doesn’t show up in the multitasking list when you press the home button twice in quick succession. What is that about?

Apple agrees to refund $32.5 million for unauthorised in-app purchases

Re/code reports that Apple has agreed with the Federal Trade Comission to refund $32.5 million for unauthorised in-app purchases.

Re/code obtained a copy of Tim Cook’s memo to Apple employees. Although Apple had taken action to rectify the concerns raised by customers, FTC stepped in and sued Apple.

It doesn’t feel right for the FTC to sue over a case that had already been settled. To us, it smacked of double jeopardy. However, the consent decree the FTC proposed does not require us to do anything we weren’t already going to do, so we decided to accept it rather than take on a long and distracting legal fight.

Despite the perceived unfair treatment, Apple has decided to do the right things, simple because it was the right thing to do.

Apple is a company full of disruptive ideas and innovative people, who are also committed to upholding the highest moral, legal and ethical standards in everything we do. As I’ve said before, we believe technology can serve humankind’s deepest values and highest aspirations. As Apple continues to grow, there will inevitably be scrutiny and criticism along our journey. We don’t shy away from these kinds of questions, because we are confident in the integrity of our company and our coworkers.

Apple should be applauded for doing more than what its competitors have. If the FTC is so zealous about the issue, they should investigate other companies as well.

Smart appliances make a connected home vulnerable

TechCrunch reports that smart appliances are starting to spawn spambots and make the home vulnerable to hackers.

Example A: according to a new study by security firm Proofpoint, hackers have already started crackin’ away at smart appliances in hopes of further expanding their zombie spambot armies. Between December 26th, 2013 and January 6th, 2014, Proofpoint says they detected upwards of 750,000 spam emails being sent from over 100,000 compromised routers, multimedia centers, smart TVs, and, in one case, a smart fridge.

There needs to be a way for users to secure the connected home network. Rolling out automatic updates would make keeping the softwares up to date easier.