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ATPM 14.02
February 2008





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Apple Talk

by Angus Wong,

Trade Show

The more things change, the more they stay the same. At Macworld Expo, the event that the rest of the world calls the annual gathering for the Cult of the Mac, Steve Jobs unveils what Apple has been hiding, and the world celebrates by drawing lines in the sand.

We’ve come a long way since January 7th, 1997, when Steve Jobs returned to Apple. Wall Street commemorated the momentous occasion by closing AAPL at $4.375, down from $4.4675 the day before. Obviously, the financial analysts weren’t impressed by this move. Not very many of them were raising price targets like they have been doing in recent years.

Warp to January 15th, 2008. Steve Jobs announces, among other things, the MacBook Air, Time Capsule, iTunes movie rentals, and added iPhone and iPod touch functionality. AAPL closes at $169.04, down from $177.72 at the open. Certain media “pundits” complain about “lackluster” announcements and the absence of iPod growth numbers. PC users slam the MacBook Air, pointing to underpowered specifications.

So what else is new?

OK, so the current price of AAPL probably has more to do with the overall market malaise concerning subprime mortgage issues and recession probabilities than any specific news item from Steve Jobs’s keynote. But increasingly, a new digital divide is becoming apparent: those who have a clue about Apple, and those who wannahave. Long-time Apple watchers will understand when I say that Apple is not conducive to superficial analysis. It’s true that you have to be somewhat of an “Apple follower” to keep track of the company, not so much in the sense of blind-faith that the clueless keep accusing us of, but in the manner of buying and using Apple products over the years, and observing how various personalities and policies influence Apple’s direction at key turning points.

Because Apple is such a hot news item these days, lots of people are writing about the company. It almost seems not to matter that the analysis is wrong, only that hot Apple-related keywords are included so that the publications get reader traffic, and financial analysts get paid for “saying stuff.” To be fair, there are also many good writers and analysts out there, but for this month’s article I wanted to do a little exercise and see if we can’t get away with being a clueless analyst. You can also try this at home with family and friends. Let’s begin:

To start, I’m thinking we should completely dispense with what we honestly think. Since the objective is just to spew out controversy and get read, it’s better to be all negative. It’s easy to be negative. Like Sam Rayburn said, “Any jackass can kick a barn down, but it takes a carpenter to build it.”

So, here’s how I really feel:

And since we’re going negative, we need to take these four points and turn them around, even if we don’t actually believe any of the following crap that I just made up:

So, what do you think? Good enough? I hope I sounded fairly professional and critical. It’s so easy to slam things.

Now, to wrap up the negative piece, we need to say something bad about Apple in general. So we need to pick some low-hanging fruit. A cheap shot, if you will. How about sales numbers? It’s always easy to go negative on sales numbers. Much harder to go out on a limb and be bullish. So, just scramble together some more crap and we get the following:

Translation: A lot of people have bought iPods (duh!). Saying something is “at risk” is saying nothing (markets are always “at risk” of something), and besides, who really knows what the saturation point is? We are not talking copper sulfate in chemistry class. And as for outlook, we have no idea how these new products will do in the market (duh!).

So, whaddya think? Good enough to sound like we got a clue, when we actually don’t?

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Reader Comments (1)

Nolan W · March 1, 2008 - 05:24 EST #1
Interesting observations. I've had high hopes for something like the Apple TV to appear on the scene since 1999. I've wanted the ability to watch video from my computer without having to physically connect my computer to it for over 10 years. I'll probably buy once once I upgrade to a widescreen TV with HDMI inputs.

I actually thought about designing a similar device multiple times. However, mine would have differed in the following ways:
* analog and digital outputs
* scaling for std and widescreen formats and sources (mix or match std or widescreen source with std or widescreen tv)
* 6 gig of flash ram instead of a hard drive (~ 4 gig for a movie and ~2 gig for software)
* firewire (and maybe USB) connections
* wireless and wired network w/ software to connect to any mac or network attached storage

The way it would work:
- transfer movie from computer to the device or from online rental service (iTunes) and then watch
- ability to watch other video, etc via 3rd party developer apps (eg: utube, etc)
- give ADC registered developers access to an API
- provide those developers with a market within iTunes to sell their Apple TV applications

Using flash ram instead of a hd should lower cost since 6 gig of flash is roughly $30 or less now and the lowest retail hd price I've since is at least 2x that. And supporting all TVs makes it something that everyone can use. Opening up APIs to third parties would 3rd party hardware (eg: keyboards, video cameras, microphones) and software (web client, video conferencing, VOIP, etc).

(Note: The option of connecting directly to the iTunes store and iTunes marketplace I stole from Apple... hehehe .. I had all the other ideas before...though in 1999 I was thinking about having only enough ram to buffer streaming video since RAM was sooo expensive back then. )

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