Posts Tagged ‘Apple’

The Chinese Moto into Chicago

Monday, February 3rd, 2014

It’s a strange experience to attend a tech conference like I did last Thursday and have no one — not the audience or the speakers — mention the biggest tech story of the year. It’s a little like attending a family reunion and having nobody comment on your Aunt Mary’s 25-year old boyfriend.

Motorola Mobility is being sold by Google to Chinese computer powerhouse, Lenovo. You remember them — the company that bought IBM’s ThinkPad division in 2005. They paid $2.9 billion and it’s for one reason: to enter the smartphone war against Apple and Samsung. It’s the largest ever deal by a Chinese tech company (although a relative bargain when you consider that Google paid $12.5 billion for Motorola — primarily for its patent portfolio which it will license to Lenovo.)

For Chicago, the sale comes weeks away from the biggest real estate move of the last year: Motorola moving more than 2,000 workers into the Merchandise Mart and becoming the biggest tech employer downtown. Lenovo says it will all move ahead with no plans for layoffs.

The reason a Chinese tech behemoth with resources pays for an American company is twofold — brand and know how. “Motorola brings a strong brand, brilliant engineering and strong relationships with carriers and retailers.” said Lenovo CEO Yang Yuanqing.

In a blog for Crain’s Chicago Business, John Pletz spells out the challenges: Today, it (Motorola) has just 1 percent global market share, putting it in 16th place among the top cellphone vendors, according to research firm Strategy Analytics Inc. That’s down from No. 2, with 22 percent share, in 2006, when Motorola’s Razr phone was the must-have device.

After the acquisition, Lenovo will be No. 3, with 6 percent of the smartphone market, which accounts for most of the cellphone industry’s profit, according to Strategy Analytics. Samsung is No. 1 with 32 percent of shipments, followed by Apple, with 15 percent.

Black Friday Sales Bring Holiday Cheer to Nation’s Retailers

Tuesday, December 4th, 2012

Black Friday holiday sales set a record in 2012 with 247 million shoppers visiting the malls or shopping online. That’s 21 million more people than in 2011.  Total sales topped $59.1 billion.  The typical holiday shopper spent $423 over the weekend, a $25 increase over the $398 recorded last year.  The National Retail Federation (NRF) defines the “Black Friday weekend” as the Thursday, Friday, Saturday and Sunday after Thanksgiving.  One of the big stories is that online spending alone soared past the $1 billion mark for the first time ever, according to comScore.

Cyber sales rose 26 percent compared with one year ago, when shoppers spent $816 million.  This year, the average online shopper spent $172.42 over the Black Friday weekend, nearly 40.7 percent of their total purchases.  Of online shoppers surveyed by NRF, 27 percent reported making purchases on Thanksgiving Day, while 47.5 percent shopped on Black Friday itself.  Amazon.com was the most-visited retail website, followed by Wal-Mart, Best Buy, Target and Apple.

Retailers’ door-buster specials drew shoppers to the stores.  “There’s no question that millions of people were drawn to retailers’ aggressive online promotions this weekend, making sure to research and compare prices days in advance to ensure they were getting the best deal they could,” said BIGinsight Consumer Insights Director Pam Goodfellow.  “However, with shopper traffic increasing at department, discount, and clothing stores over the weekend, it’s clear that consumers still recognize Black Friday as one of the biggest in-store shopping days of the year, as they have for decades.”

The NRF had forecast that worries over the possibility of the fiscal cliff and the anemic jobs market might put a damper on holiday spending.  Its guesstimate is that holiday spending will rise just 4.1 percent this year, compared with 5.6 percent in 2011.  A survey by ShopperTrak found that 307.57 million Americans shopped in stores, a 3.5 percent increase over last year.  Bill Martin, ShopperTrak’s founder, is more optimistic.  He notes that store traffic hasn’t reached this level since 2006, possibly marking a return to pre-recession levels and could be a sign of recovery.  “We’ve seen that consumers are willing to shop a few extra stores,” Martin noted.  “This could translate into more impulse buying and stronger sales.”

Facebook IPO to Be Listed on Nasdaq

Tuesday, April 17th, 2012

Facebook is friending Nasdaq in one of the most-desirable deals among the Internet companies jockeying ahead in the race for social-media IPOs.  The addition of Facebook’s listing enhances Nasdaq’s reputation as the favored exchange among high-tech companies.  The exchange is home to several tech firms, including Apple and Google.  The stock will trade under the symbol FB, as Facebook prepares its initial public offering for May.

“This is a strong, substantial win for Nasdaq, and no doubt a momentum builder for future listings,” said Richard Repetto, an analyst at Sandler O’Neill & Partners.  Facebook’s IPO — which could raise as much as $10 billion — -is likely to be the biggest Internet IPO since Google’s in 2004.  “Winning Google further emboldened Nasdaq’s reputation as being the exchange of choice for the technology companies,” said Jay Frankl, senior managing director at FTI Consulting.  “The Facebook listing I’ve seen as being similar to the Google listing, which had a similar competition between the exchanges, and a similar win for Nasdaq.”

Companies pay an annual fee to list their stock, while exchanges receive listings-related income from the sale of market data and additional services offered to their listed companies.  A company can pay as much as $500,000 annually to be listed on the NYSE, while all Nasdaq fees are capped at approximately $100,000.

The decision is a big victory for Nasdaq, which competes intensely with NYSE Euronext, which operates the New York Stock Exchange.  The listing will give Facebook financial clout as it works to expand its global audience of about 845 million users.  It also might help Facebook avoid a challenge from Google, which wants to rival Facebook with its own social networking system.

Writing in Forbes, Robert Hof wonders if “Will Facebook’s sudden, outsized presence distort the Nasdaq index of 100 companies so that it becomes even more volatile than it already is?  It’s not a premature question by any means.  Already, just a few companies – Apple, Google, Microsoft, Intel, and Oracle – dominate the Nasdaq index, accounting for nearly half the value of the entire Nasdaq 100.  Thanks to its incredible run, Apple stock once again accounts for almost 20 percent of the index, after exchange operator Nasdaq OMX Group reduced its weighting to 12 percent a year ago.  It’s not clear yet, of course, what kind of presence Facebook will have in the index, since it obviously has to go public first and then get added by Nasdaq OMX.  But it seems a good bet that trading in its shares, like those of many new issues, will be anything but calm.  And given the huge interest in the company by investors and the press, and the relatively small float at the outset, every little announcement or hiccup seems sure to send the shares soaring or plummeting.  If Facebook becomes a significant portion of the Nasdaq index, as seems likely, that could make the famously dynamic index even more volatile.  This isn’t much of a problem for Facebook itself.  Its fate rests less with what the stock does in the short term than with how CEO Mark Zuckerberg and his business executives Sheryl Sandberg and others build out the company’s advertising, payments, and other potential businesses.”

CNBC’s Bob Pisani says that Nasdaq’s securing the Facebook listing is an important psychological victory. According to Pisani, “What does matter are the co-branding opportunities, and it here it gets down to a simple issue: what are you offering in the way of a partnership?  It’s not hard to imagine the pitch: the NYSE would certainly have argued that they have broader business-to-business connections with the biggest companies in the world, with whom they can partner to expand the brand name and co-venture with.  I have mentioned before that, as an example, if Groupon (which listed on Nasdaq) was doing something with Starbucks, Groupon might send out 65 million emails that references a deal with Starbucks and Groupon, with the solicitation noting that Groupon is listed on Nasdaq.  Nasdaq will pick up a portion of that cost.  Zillow, to take another company (also on Nasdaq), might have been very interested that Nasdaq has an enormous electronic sign in Times Square that is a virtual billboard for a company that wants to attract eyeballs to its website.  Get it?  What can you offer us?  And just what did Nasdaq offer to Facebook?”

Is This Farewell to the BlackBerry?

Monday, February 27th, 2012

“They’re going to pry it out of my hands…”

That was President-Elect Obama protesting the idea of giving up his beloved BlackBerry. At one point, Obama suggested that retaining his BlackBerry was one way to stay connected to the real world.  “I’ve got to look for every opportunity to do that – ways that aren’t scripted, ways that aren’t controlled, ways where, you know, people aren’t just complimenting you or standing up when you enter into a room, ways of staying grounded,” he said.

Ultimately, the battle was won by the Secret Service and Obama’s legal team for fear that the device would be hacked and that a damaging national security breach could occur.

Now — five years after its manufacturer, Research in Motion (RIM), was hailed as one of the world’s leading technology companies, the Blackberry’s market share in the United States has fallen from 44 per cent in 2009 to a mere 10 per cent last year.

According to author James Surowiecki, “These days, it seems more like the SlackBerry.  The BlackBerry’s reputed addictiveness now looks like a myth; a recent study found that only a third of users planned to stick with it the next time they upgraded.  R.I.M.’s stock price is down 75 per cent in the past year, and two weeks ago the company was forced to bring in a new CEO.  The easy explanation for what happened to R.I.M. is that, like so many other companies, it got run over by Apple.  But the real problem is that the technology world changed, and R.I.M. didn’t.  The BlackBerry was designed for businesses.  Its true customers weren’t its users but the people who run corporate information-technology departments.  The BlackBerry gave them what they wanted most: reliability and security.  It was a closed system, running on its own network.  The phone’s settings couldn’t easily be tinkered with by ordinary users.  So businesses loved it, and R.I.M.’s assumption was that, once companies embraced the technology, consumers would, too”

Adoption of the BlackBerry can be compared to the latest technologies of the last century or so.  For example, the telegraph was initially used primarily by railroads, financial institutions, and big companies. Although the telephone became popular with consumers relatively quickly, it initially was a business tool.  Typewriters also were found primarily in offices.  The Internet had its origins as a means of communications by the military-industrial complex, and found an audience among academics and scientists.  The personal computer gained market dominance once IBM introduced models targeted squarely at businesses.

According to Surowiecki, “Even as the BlackBerry was at the height of its popularity, we were entering the age of what’s inelegantly called the consumerization of I.T., or simply Bring Your Own Device.  In this new era, technological diffusion started to flow the other way — from consumers to businesses.  Social media went from being an annoying fad to an unavoidable part of the way many businesses work.  Tablets, which many initially thought were just underpowered laptops, soon became common among salesmen, hospital staffs, and retailers.  So, too, with the iPhone and Androids.  They’ve always been targeted at consumers, and tend to come with stuff that I.T. departments hate, like all those extraneous apps.  Yet, because employees love them, businesses have adapted (and the iPhone and Androids have upgraded security to make themselves more business-friendly).  As a result, the iPhone and Androids now control more than half the corporate mobile market.”

The trend toward consumerization sounded a death knell for R.I.M., because the company had no idea about what consumers want. R.I.M. didn’t introduce a touch-screen phone until long after Apple; the device was a pale imitation of the iPhone.  Once seen as a ground-breaking success, the R.I.M. started to be perceived as offering too many choices and confusing model names.

“The workplace is changing, too,” Surowiecki said.  “The barrier between work and home has been eroded, and if people are going to have to be constantly connected they want at least to use their own phones.  And since workers often end up paying for their own devices, it can also help businesses cut costs.  One way or another, consumers are going to have more and more say over what technologies businesses adopt.  It’s a brave new world.  It’s just not the one that the BlackBerry was built for.”

Visionary Apple CEO Steve Jobs Dies at Age 56

Monday, October 10th, 2011

Apple’s  iconic co-founder and CEO Steve Jobs, who altered the habits of millions by reinventing computing, music and mobile phones, has died at the age of 56.  With Jobs’ passing, Apple has lost a visionary leader who inspired personal computing and products such as the iPod, iPhone and iPad.  These innovations made Jobs one of his generation’s most significant industry leaders.  His death, following a long fight with a rare form of pancreatic cancer and a liver transplant, set off an outpouring of tributes as world leaders, business rivals and customers mourned his early death and celebrated his historic achievements.

“The world has lost a visionary.  And there may be no greater tribute to Steve’s success than the fact that much of the world learned of his passing on a device he invented,” said President Barack Obama.  Even Bill Gates, his rival at Microsoft, joined in the laments.  “For those of us lucky enough to get to work with him, it’s been an insanely great honor,” Gates said.

With a passion for minimalist design and a genius for marketing, Jobs laid the groundwork for Apple to flourish after his death, according to analysts and investors.  A college drop-out, Jobs altered technology in the late 1970s, when the Apple II became the first personal computer to gain a wide following.  He repeated his early success in 1984 with the Macintosh, which built on the breakthrough technologies developed partially at Xerox Parc to create the personal computing experience. 

“Steve’s brilliance, passion and energy were the source of countless innovations that enrich and improve all of our lives. The world is immeasurably better because of Steve,” Apple said.  “His greatest love was for his wife, Laurene, and his family.  Our hearts go out to them and to all who were touched by his extraordinary gifts.” 

According to Apple co-founder Steve Wozniak, “We’ve lost something we won’t get back,” he said.  “The way I see it, though, the way people love products he put so much into creating means he brought a lot of life to the world.”  Wozniak said that Jobs told him around the time he left Apple in 1985 that he had a feeling he would not live beyond the age of 40.  Because of that, “a lot of his life was focused on trying to get things done quickly,” Wozniak said.  “I think what made Apple products special was very much one person, but he left a legacy,” he said.  Wozniak hopes the company can continue to succeed despite Jobs’ death.

Computerworld raises the question “Where will that excitement come from now?”  When Jobs stepped down as CEO in August, industry analysts said that Apple, with a team of talented, creative employees, will be able to continue his tradition for ingenuity, if not all of his passion, perfectionism and energy.  “Steve’s excitement for technology will still come from Apple and from the team that Jobs carefully built that worked with him to give us the iPhone and iPad and many other successful products,” said Carolina Milanesi, a Gartner analyst.

“Jobs didn’t just change mobile phones — he reinvented them,” said Ken Dulaney, an analyst at Gartner.  “That was typical Steve.”  In another example, the iPad took user-centric values inherent in the touch-screen iPhone and larger-screen laptops, and found a useful compromise — a classic expression of Jobs’ ability to combine technological concepts, art and ideas and deliver a product that was termed “magical,” according to analysts.  “Apple, under Jobs’ leadership, focused on the user experience first and the technology second,” said Jack Gold, an analyst at J. Gold Associates.  “This focus was groundbreaking in that most tech companies were just the opposite.  Apple pioneered hiring many usability specialists, human factor engineers and designers before it was fashionable to do so.  Jobs’ vision of technology was to make a smooth intersection into our lives and our work, and that was what put Apple ahead of the pack.  He redirected engineering from technical engineering to engineering for usability.”

One question that has industry analysts abuzz is whether Apple will be able to maintain its dominant position now that Jobs is gone. Jobs’ passing and the industry’s mixed response to the recent iPhone 4S model create challenges for Apple in coming quarters,” said Neil Mawston, an analyst with Strategy Analytics.  “Industry eyes will inevitably turn to the iPad 3 launch next year to see whether Apple can continue the company’s impressive legacy of innovation created by Steve Jobs,” he said.  In a sign of deepening competition, Amazon.com recently unveiled its Kindle Fire tablet at an affordable $199 that could pose a serious threat to the iPad.  “Apple is facing a competitive firestorm from not just one company but a coalition of rivals that are trying to beat it, including some of the largest consumer electronics companies on the planet,” said Ben Wood, head of research at British mobile consultancy CCS Insight.

Writing in the Washington Post,  Melissa Bell believes that one of Jobs’ longest-standing legacy will be the recognition that his illness and death are bringing to pancreatic cancer.  According to Bell, “Steve Jobs knew the art of keeping your cards close to your chest.  Though  leaks did spring from the closely guarded Apple world, Jobs was a master at unveiling his secrets only when the time was right for him.  As with his business ventures, so it was with his cancer.  Jobs ‘kept his illness behind a firewall,’ the Associated Press reported.  Apple released no more of a statement than that they lost a ‘visionary and creative genius, and the world … lost an amazing human being.’  It was not known whether Jobs died from the rare form of pancreatic cancer that plagued him for seven years, or from complications from a liver transplant two years ago.  Despite the lack of details, Jobs’ role as the very public face of Apple put his illness on display along with his products.”

Is the Motorola Mobility-Google Marriage Made in Heaven?

Tuesday, October 4th, 2011

Google’s recently announced $12.5 billion acquisition of Chicago-based mobile phone maker Motorola Mobility could be different if Google CEO Larry Page keeps his promise to run the acquisition as “an independent business.”  “If you believe what they say, they’re going to leave the company alone and let it do what it has been doing,” said Steven Kaplan, a professor at the University of Chicago’s Booth School of Business.  “If anything, maybe they would move resources here because the tech talent is less expensive and our taxes are lower (than California’s).”

There remains the question of the economic impact of the sale on Chicago’s economy, especially in northwest suburban Libertyville, IL, where Motorola Mobility has its sprawling campus.  If Google retains Motorola Mobility’s Illinois workforce, the move will represent a win for the state, giving it the bragging rights that come with being part of one of the world’s wealthiest and most entrepreneurial companies.  If Google moves Motorola Mobility to California, it will be a blow to Chicago’s northwest suburbs, where many of Mobility’s employees live.

Motorola Mobility has deep roots in the Chicago area, which go back to the 1928 founding of Galvin Manufacturing Corp. in Chicago.  The company, which was rechristened Motorola, pioneered early televisions and two-way radios during the World War II years.  Motorola helped lay the foundation for the mobile-phone industry, and demonstrated its original handset in 1973.  “Motorola was a pioneer in this business,” said Will Strauss, an analyst at Tempe, AZ-based Forward Concepts Co.  “They certainly have a lot of intellectual property.  It will certainly level the playing ground quite a bit. It’s going to give them an awful lot to defend Android with.” 

One reason for the purchase is the patents that Google will acquire as part of the acquisition.  Google pointed to patent disputes as important in its agreement to buy Motorola Mobility.  Apple, the iPhone’s manufacturer, and Microsoft, which created Windows Phone software, have targeted phones that run on Google’s Android system.  Lacking its own trove of patents to vie with Apple, Microsoft and other companies, Google and its hardware partners were targeted by suits aimed at slowing the adoption of Android smart phones.  Adding Motorola Mobility, with 17,000 patents, which has been inventing mobile-phone technology since the industry began, may help Google stanch the onslaught.

“The analogy to a nuclear arms race and mutually assured destruction is compelling,” said Ron Laurie, managing director of Inflexion Point Strategy LLC, which counsels companies on purchasing intellectual property.  Google and its rivals “look pretty evenly matched at the moment.  Google may have become a patent superpower.”

Google plans to continue to license its Android system to other smart phone makers, such as HTC, Samsung and LG. ”Many hardware partners have contributed to Android’s success and we look forward to continuing to work with all of them,” according to Page.  According to analysts, the Motorola deal is likely to help Google expedite its innovation in smart phones and tablets.

Bernstein Research analyst Pierre Ferragu believes the acquisition was “solely driven by the ongoing patent war and is an unambiguous positive for the Android ecosystem.  It is in the interest of Google to continue to offer a fully open Android platform with equal access to all manufacturers.  For Google, there is much more value in securing a major market share for Android than favoring Motorola against HTC and Samsung,” Ferragu wrote.

 Writing in The Business Insider, Henry Blodget predicts that the deal will be a “colossal disaster.”  According to Blodget, there are multiple reasons why this venture will fail.  “Google is a massive global software company with huge profit margins, genius engineers, extraordinarily high pay scales, and a near-monopoly on the most amazing advertising business the world has ever seen.  Motorola is a has-been, low-margin, global hardware-manufacturing business that operates at break-even, has 19,000 employees — 19,000!  Motorola, in other words, is a VAST company, one that will increase the size of Google by a staggering 60+ percent.  Mergers of this size rarely work well (or smoothly), even when managed by companies that are very experienced at making huge acquisitions (which Google isn’t).  Motorola does not have dominant share of the key businesses Google is buying: smart phones, tablets, and TV gadgets.  This means it does not have the weight necessary to push anyone around.  For example, Motorola only has a small slice of market share (10 percent) in its key business (smart-phones).   It’s nowhere in tablets.  The only way to make decent money in the hardware business is to have real leverage, and Motorola doesn’t have it.  The only thing that Google and Motorola have in common is that they are loosely considered ‘technology’ businesses.  This is not enough commonality for a massive merger like this to be a success without heroic integration efforts.  (Think AOL-Time Warner).”

Steve Jobs Exits Apple

Tuesday, September 20th, 2011

The abrupt departure of Steve Jobs from Apple marks the end of an era, although his leaving is unlikely to have an immediate impact on the company’s product line, according to analysts.  Jobs, 56, submitted his resignation to the Cupertino, CA-based Apple board of directors and asked that they name chief operating officer Tim Cook as his successor.  In announcing his resignation, Jobs said he wanted to stay on as chairman and an Apple employee.  “I have always said if there ever came a day when I could no longer meet my duties and expectations as Apple’s CEO, I would be the first to let you know,” Jobs said.  “Unfortunately, that day has come.  I believe Apple’s brightest and most innovative days are ahead of it.  And I look forward to watching and contributing to its success in a new role.”  Jobs has been on medical leave from the company since early this year. 

Jobs, who has been treated for pancreatic cancer and undergone a liver transplant, rocked Silicon Valley with his decision.  Recently, Hewlett-Packard said it was exploring options to sell or spin off its multi-billion-dollar PC division just as the PC industry was celebrating its 30th anniversary.  Jobs played a key role in creating that industry.  “Hewlett-Packard has given up because of what Apple has done,” said Jay Elliot, a former Apple senior vice president who worked closely with Jobs from 1980 to 1985.  “The reality is this guy was so committed to making the best products in the world.”  Perhaps no tech figure in recent history carries as much power as or has made a greater imprint on his company than Jobs.  Since returning to Apple 14 years ago, he almost single-handedly has resurrected the company from near-extinction to a company worth more than $330 billion. 

Apple is expected to unveil its iPhone 5 over the next few months and a new version of its popular iPad 2 tablet. Nevertheless, a smooth transition is likely.  Cook, 50, has earned praise for his steady leadership at Apple, acting as temporary CEO, while Jobs was on medical leave.  Apple is also renowned for its impressive group of engineers, marketers and other executives.

“The next wave of Apple products are well into the product-development cycle,” said Charles Golvin, analyst at Forrester Research.  “The next iPhone is certainly done.  The next iPad is certainly along the way.” 

Writing in Computerworld, Jason Snell says that “The greatest fallacy in the story of Steve Jobs stepping down as Apple CEO, the one you’ll find in endless media reports, is this: In 1985 after Steve Jobs left Apple, the company went on a downhill slide that led it to the brink of bankruptcy.  Therefore, the Apple of 2011 is at risk of doing the same.  But the flaw in the History Repeats Itself storyline being promoted in some corners as Jobs steps down as CEO is that the Apple of today is nothing like the Apple of 1985.  By 1997, Jobs ran Apple with absolute power, the kind of power he had never had during his first go-round at Apple.  Jobs was a co-founder, yes, and his time working with the original Macintosh team is the stuff of legend. But the Apple of 1985 wasn’t Steve Jobs’ company, not hardly.  When he took the interim CEO job more than a decade later, Jobs didn’t make that mistake again.  Older and wiser, and with the complete support of Apples board of directors, Jobs remade the company to his specifications.

“The iMac was a first quick sign of the turnaround.  The original iPod and the decision to open retail stores began the real momentum.  The release of the iPhone and the iPad marked Apple’s ascendance to what it is today:  The most important technology company in the world.  The Apple of today is hugely profitable, with tens of billions of cash, a 90 percent share of the tablet market, a rapidly growing smart phone business around the world, and the only truly profitable personal-computer franchise left.  This is where Steve Jobs leaves Apple as CEO: on top, with momentum to carry it further up.” 

“The Macintosh turned out so well,” once told the New York Times, “because the people working on it were musicians, artists, poets and historians who also happened to be excellent computer scientists.”  The people who bought the first Apple Mac computers tended to be architects, designers and journalists.  Steve Jobs and Steve Wozniak, who created the Apple Macintosh computers in the 1970s, came up with a line of products that – though initially clunky –appealed to buyers, and continue to excite those engaged in design and the media; those who were optimally placed to sow the Apple seed. 

Bob Boilen of NPR’s “All Songs Considered, offers this perspective. “I find the news of Steve Jobs stepping down as Apple’s CEO particularly sad.  In some ways, I feel something like I felt when The Beatles broke up.  Sure, I’d always have the band’s music, but damn, what a special time.  What special chemistry.  It will never be the same.  We listen to music in the 21st century in a profoundly different way than we did in the 20th century.  And, though Apple didn’t invent the portable music player, the vision of Steve Jobs (a music geek himself) and his company of designers and engineers changed our listening landscape dramatically in 2001 with iTunes and the iPod.  Some of those ways are wonderful: Portability of huge libraries, shuffling, quick access to millions of songs, and custom playlists are a few of the upsides.  For some, shuffling may be a bittersweet downside, like compressed sound files or isolated listening, but I think the good far outweighs the bad.  Of course, Steve Jobs and Apple didn’t invent the MP3 player, but they sure made it work.  The creation of iTunes in January 2001, and later that year the release of the iPod, made organizing music, making playlists, and happy random accidents a listening joy.”

Will Apple Create the Next Great Building?

Tuesday, July 19th, 2011

A giant spaceship is destined to land in Cupertino, CA – at least if Apple CEO Steve Jobs gets his way with the city council.  The new building will accommodate 12,000 employees and house its own green-energy power plant.  Apple’s current headquarters accommodates approximately 2,800 people, Jobs said.  “We’ve got almost 12,000 people in the area,” he said.  “So we’re renting buildings — not very good buildings, either — at an ever-greater radius from our campus and we’re putting people in those.  And it’s clear that we need to build a new campus.”

As envisioned, the new campus would be built on about 150 acres of land that the tech giant owns.  Jobs said Apple’s plan would involve tearing down buildings currently on the site and constructing a new ring-shaped building that would be four stories tall, with four floors of parking underneath and a large landscaped courtyard in the middle.  If approved, the project will increase landscaping to approximately 80 percent of the site, which currently is 20 percent trees, plants and grass.

“And we’ve used our experience in making retail buildings all over the world now, and we know how to make the biggest pieces of glass in the world for architectural use,” Jobs said.  The campus wouldn’t be powered by Cupertino’s energy grid.  Instead, an on-site power facility will provide 100 percent of energy.  “I think what we’re going to end up doing is making the energy center our primary source of power, because we can generate power with natural gas and other ways that can be cleaner and cheaper, and use the grid as our backup,” Jobs said.  “We think that makes more sense.”

Mayor Gilbert Wong said that Cupertino is excited that Apple is moving forward with a new campus, an idea first suggested to the city in 2006.  “When Apple submits their building plans later this year, we know that we will be looking at a state-of-the-art facility and all the challenges and opportunities that go along with that,” Wong said.  The review process will be the same as any other construction project, with evaluations of environmental impacts, air quality, traffic and other matters.  “The project will come to the City Council for approval in the fall of 2012,” Wong said.  “Following approval, Apple can submit building permits.  Construction will follow, and Apple and the city expects the new campus to be completed by 2015.”

“I think we’ve found a way to stay in Cupertino,” Jobs said, reminding the city council that “since we’re your largest taxpayers, we thought you’d be happy about it.”

In a town with a population of 55,162, Jobs’ announcement was an important event.  Asked about the design, in which Jobs has reportedly played a role, city council members said they were impressed when they first saw it.  “It’s so, well, pretty,” said Councilman Barry Chang.  “Wow! is the operative term,” said Councilman Orrin Mahoney.  “There’s nothing like it.  And while some people might wonder why a CEO would get so involved at such a level of detail around a company headquarters, with Steve, it’s not surprising.”

The four-story, circular campus is said to be the design of superstar British architect Norman Foster.  “We do have a shot at building the best office building in the world,” Jobs said, adding that it won’t contain a straight piece of glass.  “Architecture students will come here to see this.”  Here’s a video of Jobs announcing the building

Writing in the Wall Street Journal, Dave Kansas points out that snazzy new office buildings are not always successful.  According to Kansas,  “Companies that build fancy, new digs often do so at just about the wrong time from a market perspective.  Splurging on a new corporate palace doesn’t necessarily improve the profit picture.  And there’s a clutch of anecdotal evidence that would support that notion.”

Kit Eaton of Fast Times noticed a strong resemblance between the Apple design and a security-heavy location in the United Kingdom.  “We just have one question for Steve.  Has he ever been to Cheltenham, England?  You know, the home of famous horse races, hats, posh private schools, and the U.K.’s Government Communications Headquarters.  GCHQ, spy-central for the Brits.  A glass-fronted spaceship-like ring, with glass-roofed atria, good green credentials, and a private-access garden concealed inside the giant ‘O’.”

Increased Consumer Spending Lifts U.S. 2010 GDP

Monday, February 7th, 2011

road-sign-blogThe United States’ 2010 GDP soared at an annualized rate of 3.2 percent, as consumer spending rose by the greatest levels in four years.   “The consumer really drove the economy in the 4th quarter,” said Guy LeBas, chief fixed-income strategist at Janney Montgomery Scott LLC in Philadelphia.  “The economy has moved beyond recovery to a stable state of growth.”  For all of 2010, the economy expanded 2.9 percent — the biggest one-year jump in five years — after contracting 2.6 percent in 2009.  The volume of all goods and services produced climbed to $13.38 trillion, for the first time surpassing the pre-recession peak reached in the 4th quarter of 2007.  Tiffany & Co. saw a significant increase in the sale of fine jewelry.  Apple reported record 4th quarter sales as consumers bought 7.73 million iPads as holiday gifts.  Ford Motor Company’s sales have been so good that the automaker plans to add an additional 7,000 manufacturing jobs over the next two years.  The automaker, which did not undergo bankruptcy, did lay off some salaried employees in 2008 as part of a restructuring in the face of slumping sales.

Exports also helped boost the American economy which should boost job creation over the next several years.  “The U.S. is expected to be one of the fastest growing developed countries in 2011, largely reflecting the contrast of the ongoing stimulus with other countries, such as the U.K. and other heavily indebted European nations, where austerity measures designed to reduce deficits are stifling domestic demand,” said Chris Williamson, chief economist at Markit, a London-based research firm.  “The acceleration of the U.S. GDP in the 4th quarter, and the changing composition of growth, raises hope that the economic recovery will move into a more self-sustaining phase in 2011 and generate sufficient jobs to reduce unemployment.”

Even the Federal Reserve, which renewed its commitment earlier this week to buying $600 billion in government bonds, agrees that the report shows the economy ended 2010 with moderate strength and breadth, but not enough to bring down the 9.4 percent unemployment rate anytime soon.  Personal consumption spending contributed slightly more than three percent to 4th quarter growth.  That is in line with retailers’ reports showing a respectable holiday shopping season.   Whether that level of spending holds up remains to be seen.  Many retailers remain cautious in their forecasts and report that consumers are still bargain-hunting.  As gasoline prices rise, disposable income may be limited.

Alter Now does see it as important to note the correlation with an overall increase in consumer credit debt in December, the first spike since 2008.  According to the Fed, overall consumer credit debt rose by 6.1 billion, or 3.0%, to $2.41 trillion while revolving credit debt (primarily from credit cards) rose by $2.3 billion (3.5%) to $800.5 billion. No revolving credit rose by $3.8 billion, or 2.8%, to $1.61 trillion.  While the spike in GDP is good news, let us remember that it is still being driven by deficit spending.

Compare the U.S. GDP with that of other nations last year and it’s clear who is winning.  China, for example, is expected to report an 8.5 percent jump in its GDP, not unexpected in the world’s fastest growing economy.  Japan’s real GDP was 3.9 percent higher in annualized terms for the 3rd quarter, beating estimates for a 2.5 percent rise for the year.

In the U.K., the economy shrank by 0.5 percent in the 4th quarter, compared with a 0.7 percent increase in the 3rd quarter.   By contrast, the nation with Europe’s largest economy – Germany – recorded a 3.6 percent growth rate in its GDP in 2010. 

Will the iPad Make Laptops Obsolete?

Monday, April 12th, 2010

Will iPad put the PC to pasture?  Does the introduction of Apple’s new iPad sound the death knell for laptop computers?  The Wall Street Journal’s Personal Technology columnist Walt Mossberg’s test drive of an iPad has him believing that the new product has “the potential to change portable computing as we know it.”  During the test drive, Mossberg used his laptops only 20 percent of the time, because he found the iPad to be extremely user friendly and significantly lighter in weight.

According to Mossberg, “If people see the iPad mainly as an extra device to carry around, it will likely have limited appeal.  If, however, they see it as a way to replace heavier, bulkier computers much of the time – for Web surfing, email, social-networking, video- and photo-viewing, gaming, music and even some light content creation – it could be a game changer the way Apple’s iPhone has been.”  Weaknesses include the inability to write and edit long documents or view Adobe Flash videos, which the iPad doesn’t support.

Based priced at $499 and topping out at $829, the iPad “is thinner and lighter than any netbook or laptop I’ve seen,” Mossberg says.  “It weighs just 1.5 pounds, and its aluminum and glass body mere a mere half-inch thick.  It boasts a big, bright color 9.7-inch screen that occupies most of the front.  As on all Apple portable devices, the battery is sealed in and non replaceable.  It has a decent speaker, and even a tiny microphone.”

Mossberg concludes:  “All in all, however, the iPad is an advance in making more sophisticated computing possible via a simple touch interface on a slender, light device.  Only time will tell if it’s a real challenger to the laptop and netbook.”