Posts Tagged ‘rants’

The 30% Rule

The powers that be have decreed that all subscriptions bought via Apple’s iStore must pay the piper to the tune of 30% of the take. My question concerns, very simply, why?

Indeed, credit card companies routinely take 2-5% of net receipts of sellers, a small ‘convenience fee,’ and there is nary a whisper about this part of their business (though this might be changing). Groupon, from industry murmurs, takes 50% and people are either wildly positive or negative about that. All said though, the Groupon value proposition is that businesses can/should convert those first time customers to repeat customers without paying the Groupon tolls.

The 30% Apple Tax appears to be too large to fit into the former ‘convenience fee’ category. And since it charges repeat business too (e.g. if I sell a monthly subscription via the iStore, I owe Apple for every month), it doesn’t quite fit the Groupon ‘large upfront cost for customer acquisition’ model. So, indeed, what is it?

My suspicion- this is a ploy to make the apps that compete with Apple’s walled garden less competitive- in particular Kindle (v iBooks), Netflix/Hulu Plus (v iTunes video), Pandora and so on. All the 30 percents in the world wouldn’t make a dent on Apple’s large revenue streams, and wouldn’t be worth the bother in and of itself. Dressed as a move to herald and improve consumer choice is potentially an interesting variant on Apple’s standard walled garden- if you have content we approve of/ you hand over to us (via say iBooks), we sign you a potentially better deal. Otherwise, you pay us a crazy percentage.

Now you might say- crazy conspiracy theory, but where is the evidence? As with all conspiracy theories, I don’t have any. I do offer one potentially telltale sign though. If this control freakiness is, indeed, the root of Apple’s decisions, then they will potentially reduce the investment on the one part of their system they cannot control- the Browser. So how much will Apple invest in their browser- mobile safari? It already seems strange that for a platform so otherwise well put together, their browser is painfully slow, under-innovative, and generally a pain to use. If it falls further behind whenever Honeycomb makes the leap from vaporware to reality and the iDevice 2011 edition responds, I think we have an answer…


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By the time this post is up, Nokia will have announced its new strategy to go with Windows Phone 7 in some shape or form. With the HP/ Palm marriage consummated, this will leave us with 4 major platforms in the smartphone space  (I’m assuming that the two Nokia OS’s will soon be put out of their misery). So here are my thoughts on how this will play out-

  • With WinP7 now tied to Nokia, I suspect the other manufacturers will slowly bow out of that platform- one dominant OEM is bad news for smaller OEMs. If that happens, a lot of their joint future depends on how fast Nokia can get competitive WinP7 devices to market.
  • HP/Palm will win several awards for the best product brought to market roughly 6 months later than needed to be seriously competitve. There’s something to be said for just getting stuff out the door.
  • Android Manufacturers will win the award for worst executed vision- a special commendation to Motorola for Xoom pricing and the Atrix Dock. Android Jalebi launches late December 2011, bringing some much needed Indian representation to the high tech industry.
  • The iDevice behemoth will hopefully, at some point, slow down (try the 2:50 mark). More realistically, I suspect they’ll continue to sell millions of devices to people like these. John Gruber will exult on how this shows how truly individualistic humans are.

To summarize, the carriers win as all 4 camps make concessions to get carrier support for their device(s). Apple makes lots of money, Google makes a fair bit on mobile, Microsoft continues to dump money in the general direction and HP makes the most beautiful printers anyone’s ever seen.

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Telling It Like It Is

Its never a good idea to go too long on a blog without some good, old-fashioned, over the top name calling. This seems as good a time as any to start (or at any rate to link to someone else doing it).

The New York Times has been significantly more readable of late thanks to the self imposed sabbatical of their worthy foreign affairs columnist, the eminent Tom Friedman. As a result the fraction of news stories telling us that China has great trains and the solution to the middle east crisis is to send the kids to bed without dinner, seems thankfully lower than normal.

Yet what the Good Lord giveth the Good Lord taketh away and Friedman seems to have re-emerged on NPR. Its a familiar role and a familiar anecdote. In his own words:

First of all, you get there by leaving Beijing South train station, which is this ultramodern flying saucer of a building with 3,200 solar panels on the roof. You get on a bullet train that takes you about half the distance between New York and Washington, D.C. in twenty-nine minutes. You arrive to another beautiful train station. You then go to the Tianjin-Beijing Conference Center, a building so vast and beautifully appointed that if it were in Washington, D.C. it would be a tourist site….

And so I just was doing the math in my head: “Let’s see, China can build a whole convention center in eight and a half months and we can’t repair an escalator with twenty-one steps in six months.” You know, everyone, anyone who flies from Shanghai to LAX Los Angeles airport or JFK knows you’re really flying from The Jetsons to The Flintstones.

One could of course go on at length about the worth of this type of analysis but that would make for rather grim reading. Instead this seems a good time to revisit a couple of the more entertaining book reviews you will come across, both by Matt Taibbi, both destroying Friedman. As with all name calling, Taibbi is unfair, and as with anything reasonably well written and amusing thats something we’ll completely ignore.

On “Hot, Flat and Crowded”:

When some time ago a friend of mine told me that Thomas Friedman’s new book, Hot, Flat, and Crowded, was going to be a kind of environmentalist clarion call against American consumerism, I almost died laughing….

Where does a man who needs his own offshore drilling platform just to keep the east wing of his house heated get the balls to write a book chiding America for driving energy inefficient automobiles? Where does a guy whose family bulldozed 2.1 million square feet of pristine Hawaiian wilderness to put a Gap, an Old Navy, a Sears, an Abercrombie and even a motherfucking Foot Locker in paradise get off preaching to the rest of us about the need for a “Green Revolution”? Well, he’ll explain it all to you in 438 crisply written pages for just $27.95, $30.95 if you have the misfortune to be Canadian.

And on “The World Is Flat”

I think it was about five months ago that Press editor Alex Zaitchik whispered to me in the office hallway that Thomas Friedman had a new book coming out. All he knew about it was the title, but that was enough; he approached me with the chilled demeanor of a British spy who has just discovered that Hitler was secretly buying up the world’s manganese supply. Who knew what it meant but one had to assume the worst”It’s going to be called The Flattening,” he whispered. Then he stood there, eyebrows raised, staring at me, waiting to see the effect of the news when it landed.

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