Steve Wildstrom – Page 12

Relax Everyone: The iPhone Is Just a Phone, Apple Is Just a Company

September has been an unusually newsy month, and much of the news has centered on Apple’s introduction of the iPhone 5. The run-up to the announcement, the announcement itself on Sept. 12, and the first deliveries on Sept. 21 have sent the journalists, commentators, and analysts of make up the tech industry commentariat on a run of bipolar mood swings that have been a wonder to behold. Really, everybody, it’s time to take a deep breath and get a grip on ourselves.

The Run-up. The days before the announcement we were actually fairly calm. The rumors mostly sounded reasonable and as the 12th approached, mostly converged. By the time Tim Cook and Co. had finished their presentations in San Francisco, what we got was pretty much what the rumors had led us to expect. In fact, the last few Apple product announcements have all been well telegraphed, either because the company is managing expectations through strategic leaks or Apple’s supply chain has grown so long that and its pre-announcement production needs so great that it is impossible to maintain the secrecy of the past. Most likely, it’s some mixture of the two.

Announcement and disappointment. When Apple announced exactly what was expected, the immediate response in many quarters was crushing disappointment. It wasn’t quite clear what the iPhone lacked. The complaints seemed to mostly be that the new iPhone looked a lot like the old iPhone, even though iPhone design has been on an evolutionary course since 2007. The fact that the iPhone 5 was dramatically lighter and thinner with a much-improved display, seemed to count for little. What it really needed was a quad-core processor and near-field communications. The new Lightning connector was a disaster. The phone offered neither a hoverboard nor a jetpack.

The disappointed missed some highly significant change because it wasn’t apparent and because Apple, which generally doesn’t talk much about internals, didn’t mention it. It took chip guru Anand Lal Shimpi to find out that the A5 system-on-a-chip inside uses an Apple-designed processor in place of the modified Samsung designs used in the past. The custom chip, closely matched to Apple’s software, also a big boost in performance with what looks like a small decrease in power consumption. The result was that Apple was able to use a relatively small battery with no loss in running time. This has important implications for future designs of both the iPhone and iPad, but it went largely unremarked.

Order exhilaration Despair turned to euphoria when Apple began taking preorders and promptly announce that it had a record 2 million orders in hand and had begun pushing out promised delivery times a couple of weeks. The always optimistic and often wrong Gene Munster of Piper Jaffray forecast first-weekend sales of 120 million units with a “worst-case scenario” of 6 million. After counting buyers standing in line at Apple Stores, Munster came down the middle with a forecast of 8 million.

Maps, oh my. Then iOS 6.0 shipped on Sept. 19 and all hell broke loose. there were complaints that Passbook, a new service for storing tickets, boarding passes, loyalty cards, and the like seemed half-baked (In fact, I have yet to get it working at all on my 4S.) But the real furore concerned the new Apple Maps application, which replaced Google Maps.

I think the Maps imbroglio is the one serious piece of all this back and forth. Apple, in most un-Apple-like fashion, shipped a new operating system with a core function that works, at best, somewhat erratically and is markedly inferior to the app it replaced. What we don’t know is why Apple made this move at this time, specifically, whether it was Apple or Google that forced the change. Chances are we never will know, not with any real certainty. But I think Apple could risk some real reputational damage if it cannot quickly improve an mapping app that cannot get me from my suburban Washington home to Dulles airport without climbing a fence and running onto a runway.

But still, the anguish over maps, like everything else in this sequence, was overdone. Some writers said they would swear off the iPhone because Maps had lost transit instructions, somehow forgetting that Google Maps, with transit directions, worked just fine in a browser, so nothing was lost. (The bigger problem is that third-party location-based apps must use Apple’s inferior maps.)

Shipping day. Except for the usual silly stories about people standing in line at Apple Stores, shipping day was a bit of an anticlimax. By then, everything about the iPhone was known. The only real new issue was that the aluminum case, which replaced the stainless steel band and much-reviled glass back of the iPhone 4 and $S, could scratch, especially along the finely chamfered bezel that surrounds the display. It remains to be seen how serious a problem this will be as the phones get used.

The 5-million phone catastrophe. Then came the Sept. 24 news that Apple had shipped 5 million phones on the first weekend of sales. Although this was a spectacular number by any standard, it was widely seen as a disaster, coming in, as at least one headline put it “50% below expectations.”

It’s true that first-weekend iPhone sales were up only 25% over 4S sales for the comparable period, while 4S sales were roughly double sales of the iPhone 4. But it’s worth noting that a 25% growth rate is spectacular for a company of Apple’s size, and doubling could not have continued for long (see the wheat and chessboard problem.) Beyond that, we know very little about how sales are really going. Apple records a sale only when the phone is in the customer’s hands and we have no idea how many pre-orders are still in the pipeline. We have no idea the extent to which shipments were constrained by supply (Bloomberg reported that Apple is facing a shortage of displays, but that’s based on a bunch of reports by analysts who may or may not know anything.) It will take some time to get a good idea of sales; there’s every indication they are strong and the question is just how strong.

Nonetheless, Apple’s stock dropped 3% after the “disappointment.” This is still odd, since Apple is not priced like investors expect 100%, or even 25% growth. It’s price-earnings ratio is just 16, about a point higher than IBM, a company that can thrill investors with 5% growth.

Something about Apple just seems to inspire mass craziness. Much of this dates back to the days when the late Steve Jobs could seemingly pull miraculous products out of his hat and by the astonishing recent growth int he company’s sales, profits, and stock price. But it’s time for everyone to sit back, take a deep breath, and remember that Apple is a very big and very successful company. If it releases a revolutionary product every few years–I’ll argue the last was the iPad in 2010–it’s innovating better than just about anyone else on the planet. If it grows at just 15% a year, it is growing much faster than any other company its size. It operates the most successful retail stores anywhere. And it can be very successful for a very long time.

Business Models, Not Technology Distinguish NY Startups

Last Friday, I headed to the headquarters of IAC in Manhattan’s Chelsea neighborhood for a the demo day for the New York Entrepreneurs Roundtable Accelerator’s third class of startups. Those of you who have attended Silicon Valley demos might be surprised by the difference. In New York, there was almost no talk of technologies. It was all about markets and business plans. The failure rate among these startups will, I am sure, be high, but it is good to hear early-stage companies talking of their plans for success rather than peddling themselves as features to be snapped up by another company.

One theme that ran through many of the 10 companies was the aggregation of data–and not necessarily very big data–to consolidate

Photo of Sandy Lin — Juniper & Trade’s Sandy Lin pitches her service. (Photo: ERA)

fragmented services. CaterCow, for example, collects information from restaurants, caterers, and others providing catering services to provide a one-stop for browsing, pricing, and ordering food service for events. There’s nothing technologically novel about this, but it seems to meet a real need. The business model is one of the oldest in the world–an 11% cut of the value of transactions booked through the site. CaterCow is currently beta testing in New York, and the big problem I see with the service is that it is not likely to scale very well. Catering is a highly localized service and it seems to me to move to new markets will essentially require starting over in each.

Juniper & Trade takes a similar approach to another fragmented market, custom made home goods. Currently, crafts people who make custom furniture and other home goods have unpleasant selling choices. If they are good and lucky, they might be represented by a gallery that will keep 50% of the retail price. The can drag their often-bulky works around to craft shows and fairs. Or they can hope customers discover their web site. Juniper & Trade is building an on-line craft show that can match buyers and sellers in this fragmented market. Like CaterCow, it is launching in New York and has scaling issues, though they are somewhat better because while the producers are highly local, their markets potentially are national.

AngelPolitics is going for bigger data, trying to build a database of donors to the 87,000 candidates who run for office in the U.S. each election cycle. The task is daunting. The data exist in the records of the Federal Election Commission (for everyone who gives more than $200 to a candidate for federal office) and in an assortment of state and local repositories of widely varying quality and formats. Campaign finance records are also notoriously dirty as donors, deliberately or otherwise, confuse things by using variations on their names and posting more than one address. The information is also subject to many different state and federal restructions on just how the data can be used and, especially, on how it can be resold. If AngelPolitics can pull it off, it will have succeeded in commoditizing data that campaigns now go to considerable effort and expense to create. There’s a market for that.

mxHero was unusual among the ERA companies. For one thing, it offers services you can use today. It’s an enterprise infrastructure company with a focus on technology. And it is based in São Paolo, Brazil. mxHero’s business is creating services that enhance the functionality of Google Apps mail, the white-label, paid version of Gmail. One service, called Footers, lets companies using apps mail manage footers, like those annoying disclaimers that law firms love, that are automatically appended to email messages. Another, called Hero Attach allows files of any size to be attached to messages which are then delivered as links the recipient can click to retrieve the file from a server. On the recipient end, this is much the same as getting a file sent through DropBox or YouSendIt, but the sender need only add it like any other attachment, not go through a whole separate process. The company has partnerships with Box.net and Cloudmark and is bringing its tools to VMware’s Zimbra enterprise mail solution. Again, the business model is a simple one: a limited free services with a paid offering costing between $4 and $12 per mailbox per year, depending on services.

There’s something refreshing about the straightforwardness of these East Coast startups. They’re not promising to change the world or even to reinvent much beyond some useful services. They may have something to be modest about, but their modesty is becoming.

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Integration Gives iPhone an Unbeatable Advantage

There was only one real surprise when iFixit.com did its by-now ritual teardown of the new iPhone 5. The phone sports a 1440 milliamp-hour battery just a hair bigger than the battery in the iPhone 4S. Yet despite going to a bigger display, boosting processor performance, and using faster but more power-hungry LTE wireless, the new phone seems to deliver about the same battery life as its predecessor. And instead of having to go to a bigger battery, Apple was able to use improvements in case and display design to reduce the iPhone’s thickness and weight markedly.

This is the result of obsessive engineering, not magic. Apple uses its control over every aspect of the iPhone’s design, from the silicon to the software, to fine-tune a device that squeezes maximum performance from minimal resources. This gives Apple an enormous advantage over all competitors save Research In Motion (whose severe problems are the result of its inability to read and respond to the changing market for BlackBerry, not its engineering.)

In his detailed examination of the iPhone 5, the redoubtable Anand Lal Shimpi found compelling evidence that the iPhone 5’s A6 system-on-chip uses custom, Apple-designed ARM processor cores. In previous A-series SOCs, Apple had customized Samsung ARM designs, mostly by pruning circuitry that the iPhone and iPad didn’t need. No USB ports or SD card slots, no need to have controllers for unused devices (its then nature of chips the even unused circuits increase the power draw, not by much but significantly in a design where every microwatt counts.) With the A6, Apple takes the customization a step further, achieving complete control over the heart of this system.

With a fully customized SOC, Apple could then fine-tune the software to wring out every microgram of performance while minimizing power consumption. Even the compiler used to generate iOS code can be tweaked to optimize apps’ power consumption and performance. The tradeoffs between battery size and run time are still there–even Apple cannot escape the laws of physics–but the terms of trade are improved dramatically.

There’s no way Android can match this. Google has to write code that can support a wide variety of SOCs, including those from NVIDIA, Qualcomm, Texas Instruments, and Samsung. Android devices use several graphics systems and provide support for assorted peripherals. Code designed to run on heterogeneous systems will never be as efficient as Apple’s singleminded approach. Things are somewhat better in the Windows Phone 8 world, where the initial offerings all use a Qualcomm Snapdragon SOC. We’ll see how that afffects battery life and performance when the phones ship.

Oops! Apple Needs a Remapping [Updated]

When I looked at the area around my house in the new iOS 6 Apple Maps app, I noticed something seemed to be missing. There was a big pink patch for the Bethesda naval hospital, but where was the very unmissable campus of the National Institutes of Health, located just across the street. Nowhere to be found. A closer examination of the neighborhood showed a county office building mislabeled as a school, while the actual school, a couple of miles away, was missing. A local high school is shown in two different places. A major road was misnamed and the name of an Army facility was misspelled. This just in one small part of one Washington suburb.

There has been a fair amount of early grumbling about the features, such as street view and mass transit routing, lost when Apple switched from Google maps to their own in iOS 6. But I was unprepared for just how bad the maps themselves are.

The thing I associate most strongly with Apple is the extremely high standard for the fit and finish of its products. While the iPhone 6 may look and feel like a fine Swiss watch, Maps looks like a hurriedly thrown together term paper.

Relations between Apple and Google have been deteriorating for some time and the tensions have heightened lately. So it’s not surprising that Apple felt compelled to rid itself of its dependence on Google for such a critical service. Nokia is the second0-best source of mapping data, but Nokia is very tight with Microsoft these days and Apple apparently couldn’t, or didn’t want, to go there. Apple turned to Tom Tom, with additional data from crowdsourced maps and navigation service Waze and others. The result is a big step down in quality.

Fortunately for Apple, maps are maintained on servers, not devices, so improvements can be made quickly and out into effect instantly. It’s somewhat un-Apple-like, but the company ought to quickly establish a system for user reports of map errors, a system that worked very well for Google when it began offering bicycle routing a couple of years ago.

I haven’t yet had a chance to test Apple’s new turn-by-turn navigation. But the fact the database doesn’t know where a lot of things are makes me wary (It relies heavily on Yelp for search; that’s great for restaurants, but not so helpful for government offices.) For now, I’d stick to searching for destinations by address, not by name.

UPDATE: TechCrunch has a post on errors in Apple’s European maps. Sounds like things are a mess on that side of the Atlantic too.

SECOND UPDATE: Jonathan Cartagena (@torah7000) reports via Twitter that there is a link to report problems, though being in dark text on a medium gray linen background, it’s not easy to spot. I tried reporting problems with mixed results. I couldn’t report the fact that NIH was missing because reporting a missing feature requires tapping the feature on the map, which you can’t do if it isn’t there. Just tapping the correct location doesn’t work. Other corrections can be entered by typing in a text box, but the text does not wrap properly at the end of a line but just scrolls off to the left. Still others show a satellite image of the problem area and ask you to drag the pin to the correct location. However when you try to do this, the whole map scrolls with the pin in place. The whole procedure feels a lot less than half baked.

Windows 8 Tablets and Email: A Disaster in the Making

I’m skeptical about Windows 8 as a desktop operating system, but I think it has a lot of potential on tablets. To win a good chunk of the market, however, Microsoft and its OEM partners have to convince buyers, both consumers and enterprises, that Windows serves their needs better than the competition, particularly the iPad. As the Oct. 26 launch of Windows nears, this venture is in danger of foundering on the shoals of email.

I’ve written before about the awfulness of Windows 8’s built-in mail Metro-styles program. The more I use the version built into the finished version of Windows 8, the less I like it. Though it has a very clean touch-centric design, its lack of features long considered essential in any email client makes it a great leap backward. First and foremost, while you can have multiple accounts with support for Exchange, Outlook.com/Live/Hotmail. Yahoo, Gmail, and IMAP. there is no way to combine accounts into a unified inbox. There’s no message threading. You can’t flag messages or create smart inboxes. It feels like a throwback to the bad old days of AOL mail.

The Mail app has gotten marginally better through the Windows 8 beta process, but Microsoft isn’t promising that it will improve much any time soon. My inquiries yielded a bland and noncommittal statement: “The first-party Microsoft apps built for Windows 8, including Mail, will continue to receive updates and feature changes over time via the Windows Store.”

This is an enormous challenge for ARM-based tablets running on Windows RT. because as of now, Metro Mail (sorry, I’m going to call it Metro until Microsoft gives us a real alternative) is the only mail client available for RT. Outlook 2013 has the same architecture and essentially the same user interface as Outlook 2010, and its computational, memory, and storage demands always made it unlikely as a component of Office on RT. Microsoft made this official in a somewhat backhanded reference in an Office Next blog post, that said that the Mail app does not support “certain [Office application] email sending features, since Windows RT does not support Outlook or other desktop mail applications (opening a mail app, such as the mail app that comes with Windows RT devices, and inserting your Office content works fine).”

Unless some third party comes up with a more capable Metro mail client soon, I think RT tablets will effectively be disqualified for enterprise use. Yes, the Metro Mail app is an Exchange client, but it’s a wretched one, far worse than iPad Mail. Enterprise users may have to rely on Outlook Web Access (OWA) for a decent Exchange experience–but the current version requires an active network connection to do anything. Exchange Server 2013 will add offline access capabilities to OWA, but it is likely to be at least a couple of years before this versions is widely deployed by enterprise IT. The fact that Microsoft, which owns the back-end mail systems of the corporate and institutional world with Exchange, has failed to offer a first-rate mail client for a tablet it considers a key to the future is just baffling.

Things are somewhat better for Intel-powered Windows 8 tablets, because they do not have to depend exclusively on the availability of Metro-style apps. Outlook 2013 is only sort-of touch optimized. The cleaner ribbor with larger icons and menu items in touch mode will work a bit better on tablets, but the program is still heavily dependent on cascading menus, which do not work at all well with touch.

Still, it’s good to at least have access to Microsoft’s premier mail and collaboration application. In the enterprise world, Outlook is the program everyone hates and that everyone depends on to get through the day. The lack of a tablet-ready version of Outlook promises to be a huge impediment to the enterprise adoption of Windows tablets and could be a crushing blow to Windows RT.

HumanToolz: Making the iPad a Bit More Usable

As much as I love my iPad, I have to admit it has a problem. Holding it gets tedious and is generally impractical while typing. And getting it to sit in a vertical position requires and external support of some kind.

Apple’s solution to this is hopeless. The Smart Cover works very well to protect the screen, but is a miserable stand. It only works at one angle and at the slightest provocation, its magnetic strip detaches from the iPad, which then topples over. There are many other stands available, but they tend to be clumsy, ugly, inflexible, or all three.

Enter the HumanToolz Mobile Stand, available for $65 as a preorder on Kickstarter; delivery is expected in November.) It’s a handsome aluminum device–the color on my preproduction model almost but didn’t quite match Apple’s–that supports a third-generation iPad or iPad 2 in positions from nearly horizontal to nearly vertical in landscape mode. (In portrait it is limited to a position 11 degrees off vertical.)

The stand consists of two thin bars that snap firmly to the iPad’s corners. A support piece shaped like a broad U attached to the middle of these bars with a clever hinge that rotates smoothly, without detents, through nearly 180 degrees but remains securely in any position you put it.

The stand weighs just 2.5 oz. (71 g) and is 5 mm thick at its thickest point, the hinge. It doesn’t really add appreciably to the iPad’s weight or bulk, a good thing since it is just hard enough to remove that you won’t want to put it on and off terribly often.

I found I used the HumanToolz stand in a variety of settings: Propped near vertical on a desk for table for reading or for use with my ZAGGflex keyboard, a bit above horizontal for typing on the on-screen keyboard, propped at a comfortable angle on my legs while sitting, or at a slightly less comfortable angle on my belly while lying down.

HumanToolz funded production of the stand by raising $88,600 on Kickstarter and it will be available online and in stores. Apple has kept stands other than the Smart Cover out of it retail stores, maybe on grounds of general ugliness. They ought to give the HumanToolz version a good look.

Why Apple Couldn’t Go to Micro USB Charging

No feature of the new iPhone 5 has come in for as much criticism as Apple’s decision to drop the venerable 30-pin iPod connector in favor of a new, reversible 8-pin plug called Lightning.

Some people, especially those with a lot of iPod/iPhone/iPad accessories were understandably upset that they have suddenly been rendered obsolete. The $29 price for a Lightning-to-30-pin adapter doesn’t help, although that cost will undoubtedly come down as soon as third-party accessory makers bring theirs to market. The problem is that the nearly decade-0ld 30-pin was obsolete and too big, and was becoming a real design issue for Apple.

A more serious question is why Apple did not go to the micro USB connector that is supposed to be a standard in the phone industry. While the decision is surely due in part to Apple’s sense of esthetics and in part to Apple’s desire to control the accessory market through licensing of the proprietary Lightning connector, there was a truly compelling reason: The iPad.

Here’s the problem: The micro USB pins are very small, and the power-carrying connectors, pins 1 and 5, are rated to carry 1.8 amps at 5 volts DC. That means that the maximum charging power that can safely flow across the connector is 9 watts. But the iPad wants 10 watts to charge. It will charge on as little as 5 watts, the output of most USB 3 ports and the specially modified USB 2 ports on newer Apple products, but needs 10 watts for fastest charging.

Depending on the circuitry involved, there’s some danger that attempting to charge a USB iPad, if such a thing existed, would cause the connector to overheat. But the more likely result would be a 10% slowdown in the iPad’s charging rate, an especially unfortunate outcome on the already slow-charging third-generation device.

Apple has promised a micro USB-to-Lightning connector to comply with European Commission regulatory requirements. But I bet it will generate a warning regarding iPad use when the next generation of Lightning-equipped iPads appears.

Can iPhone 5 Really Boost Economic Growth? [Not much]

JP Morgan analyst Michael Feroli made some news this week with a three-paragraph research report claiming that the introduction of the iPhone 5 could boost U.S. economic growth by as much as half a percentage point. It would be really great if Apple could get the U.S. economy out of the doldrums just by releasing popular new products, but Feroli seems to missed the part of Econ 101 where they discussed how economic growth is actually calculated.

The problem with his argument is breathtakingly simple: He fails to consider the possibility, actually the near certainty, that a fair amount of the spending for new iPhones–$200 per qualified consumer with an extra $400 or so of subsidy kicked in by the carrier–will merely displace other spending. Only the spending in excess of what would have occurred otherwise makes any difference. For purposes of juicing the economy, if not of improving anyone’s balance sheet, it would be best if all the money spent on new iPhones were borrowed by consumers and carriers.

Borrowing, through a process far too complicated to be explained here (but here’s a very simplified explanation), creates money out of thin air. That’s how John Maynard Keynes could famously suggest that the government might boost the economy by paying workers to dig holes and fill them up; he assumed that the government would create the money to pay them.

In the real world, consumers mostly will buy those iPhones by forgoing the purchase of something else. And some portion of the subsidies the carriers will be paying Apple will be money that doesn’t go to Samsung or Motorola for Android phones.

Initial indications based on pre-orders are the the iPhone 5 launch will be very strong, but the overall economic impact will be muted. The U.S. economy is vast, and it’s going to take more than the sale of a few million iPhones to make much of a dent. In the end, the indirect effects of the new iPhone could be stronger than the direct impact. To the extent that iPhone 5 upgrades drive AT&T, Sprint, and Verizon to boost capital investment in their LTE networks, the effect would be far more significant. Expanding consumption is nice, but capital expenditures drive a lot more bang for the buck.

What Do iPhone 5 Critics Want?

Apple’s announcement of the iPhone 5 has unleashed a remarkable wailing and gnashing of teeth in the tech media (for example): Apple has failed to hit us with shock and awe. Apple has become the new Microsoft, resting on its laurels and letting its platform petrify. Apple can’t innovate anymore.

Most of this nonsense seems to be the work of jaded writers who simply don’t have a whole lot to say. What almost all of this criticism fails to do is tell us what the new iPhone ought to have been other than something different from what it is. The complaints seem to boil down to “Apple failed to wow us in some way we didn’t expect.” But as I and many others have pointed out, the smartphone market is maturing fast and changes that add value, rather than changes made for their own sake, are getting harder to come by.

Some writers complained that Apple failed to overhaul the user interface. This is true, but what is the argument for changing what remains, five years after it first challenged the limits of BlackBerry and Palm and the horrors of Windows Mobile, an exceptionally intuitive and elegant design. Apple has been very careful in evolving the iOS interface. But it hasn’t been static. For example, it solved the problem of modal notifications in iOs 5. Should it add live tiles? Of course, this would require a completely new UI. And if the best argument for live tiles is Windows Phone, that platform’s failure so far to make any headway is not much of a case for the appeal of that approach.

Apple has been roundly criticized for failure to incorporate NFC. But as my colleague Ben Bajarin points out, NFC is a mostly solution in search of a problem. Especially in the U.S., there has been little movement by retailers to install the infrastructure needed to support NFC,

The new iPhone screen size has been the subject of rather odd criticism, since the company is accused of imitating Android by going to a larger display when the particular display size it chose is unique. Apple deliberately avoided the sort of mega-screen that had graced recent high-end Android phones, going instead for a screen that is taller than the current iPhone but the same width. One reason Apple avoided a wider display is to maintain the ability to operated the iPhone one-handed, especially for people—like many women—with smaller hands.

I can’t explain just why but the new phone feels very good in hand. It’s actually only a bit lighter than the iPhone 4, but the difference seems more significant, perhaps because the long, relatively narrow design, makes it better balanced. The differences are subtle, but the new aluminum back and precision-machined sides just feel right.

Of course, there are two major changes in the new model. One, which no one is criticizing, is the addition of high-speed LTE wireless. The other is the replacement of the venerable 30-pin dock connector with a new design, dubbed Lightning. (Dan Frakes at Macworld has an excellent rundown on Lightning’s capabilities and deficiencies.)

Lightning has inspired the collective ire of tech writers. Slate’s Farhad Manjoo, for example, calls it “incredibly irksome.” It’s unfortunate that it orphans nearly a decade worth of cables and accessories based on the 30-pin design, and even more so that Apple plans to charge $30 for a Lightning to 30-pin adapter (I expect cheaper third-party versions are not very far away.)

On the other hand, the 30-pin’s time was up. The connector, always a rather fiddly bit, just claimed too much precious device real estate. Manjoo and others criticize Apple for not using the standardized micro-USB connector, and this objection has some merit. But Lightning has distinct advantages over micro-USB. It’s sturdier and reversible. I found I could easily insert it with my eyes closed on the first try, something difficult if not impossible to do with micro-USB.

Probably the oddest complaint is that Apple no longer surprises us a product announcement. First, this isn’t really true. Although all the salient features of the new iPhone were known before the Sept. 12 unveiling, both the details of the new iPod touch and the existence of a redesigned iPod nano were not known in advance. The lack of secrecy about the iPhone, though, is now inevitable. By scheduling the announcement just 10 days before it expects to ship millions of phones, Apple has to deploy a vast supply chain on a scale that makes its former secrecy impossible.

I know that in my decades as a journalist, I never complained about my success in finding out things that the people I was covering didn’t want me to know about. Hearing people other than Apple executives complain the secrets were found out suggests that some writers don’t have enough real work to do.

Is There Room in Apple’s Lineup for an iPad Mini?

The iPhone 5 was the big news from Apple. But the rollout of a new iPad Touch was important in its own right. The big question it raises is whether Apple has left room in its product lineup for the much rumored iPad Mini.

With a 4″ Retina display, iOS 6, improved camera, and Siri, the Touch is more than ever a phoneless iPhone. In terms of functionality, there is plenty of room between the Touch and the existing 9.7″iPad for a smaller tablet with a 7″ or 8″ screen. The problem is pricing.

The new Touch, which will ship some time in October, is priced at $299 for a 32 gigabyte model and $399 for 64 GB. The new iPad starts at $499 for a Wi-Fi-only 16 GB model while the iPad 2 can be had for $399.

It would make little sense for Apple to introduce an iPad for less than $350. And depending on just how Apple chooses to configure this still totally hypothetical product, that price might be necessary if Apple wants to maintain its customary margins. The difficulty is that if Apple wants the Mini to be a smaller iPad without defeaturing it, the bill of materials would not be all that much lower than for the existing iPad. The display of a 7.9″ tablet is about two-thirds the area of a 9.7″. Assuming that Apple would want a Retina display with the same pixel density as its big brother, it would save some cost, but not all that much. The battery would be somewhat smaller and thus a bit cheaper. But the rest of the innards would cost just about the same.

But a $350 price tag would make the smaller iPad cost $150 more than either the Google Nexus 7 and the Amazon Kindle Fire HD, and that is potentially a very tough sell. Now Apple has lots of experience selling premium products at premium prices. But a price nearly 80% higher is an awful lot of premium. It have little doubt that the iPad would be better designed and better built than the Google or Amazon products with better software and a superior ecosystem, but Apple would have to convince consumers that it was vastly better.

Th upshot of all this is that I am a lot less certain than I was a day ago that Apple will go forward with an iPad Mini. We’ll see in a month or so.

It’s Getting Harder for Apple To Change the World

The last time I felt that an Apple product announcement would fundamentally change the tech landscape was in early 2010 when Steve Jobs unveiled the iPad, a dramatic new product class at a an unexpectedly low price. The products announced since then, the upgrades to iPads, iPhones, and Macs, the new versions of iOS and OS X, have been very, very good and very, very successful. But unlike the original iPhone and iPad, they have not been revolutionary, nor are they likely to be again in the foreseeable future.

This is not a forecast of doom or even gloom for Apple. Continual improvement of already excellent products is a very sound business model. The new iPhone to be announced today and the smaller iPad expected later this fall are as close as new products can get to guaranteed hits. After an expected surge in the current quarter, Apple’s growth is likely to slow from the ferocious recent pace of, but should continue to outpace the industry and the profits will keep rolling in.

But a near- and perhaps medium-term future of incrementalism seems inevitable for several reasons. Apple has already disrupted the music and phone businesses and invented the tablet market; it’s not about to disrupt them again. There is a lack of any buzz about dramatically new products. In other markets Apple’s entry into the phone market was preceded by at least two years of increasingly convincing speculation. The same was true for the iPad. If Apple is working on a new product in that league, it is keeping it a much better secret than its usual very high standard of silence.

Then there’s TV. Of course, the new world that Apple does want to conquer is television. For almost a year, we have been wondering just what Steve Jobs’s deathbed statement to biographer Walter Isaacson that Apple had “cracked” the problem of TV meant. Whatever that breakthrough was, it has yet to reveal itself in a product.

The challenge of TV is vastly different from anything Apple has faced before, and one where success may very well elude the company. In the TV market, as the sports writers like to say, Apple does not control its own destiny. Winning in TV will require the cooperation of some extremely reluctant partners.

This is a new world for Apple. Its success in iPods and the iPhone required partnerships, but of a much simpler sort. Apple launched the iPod with no cooperation from the music industry—the iTunes store didn’t come along until a year or so later. The record companies had no desire to play with Apple and went along only when it became clear to them that the alternative was death at the hands of millions of file sharers.

Wireless carriers also had no desire to let Apple disrupt their industry. But all Apple had to do was strike a deal with one wireless carrier in the U.S. Apple persuaded AT&T to accept the iPhone on its terms and the phone’s runaway popularity soon drove other carriers around the world to sign on (though they did force Apple to drop the innovative subsidy-free revenue sharing AT&T deal in favor of a more conventional arrangement.)

For an Apple television venture to go beyond the relatively insignificant Roku and Xbox competitor that is the current Apple TV and become a dominant force in the industry, the company needs to do deals with a good percentage of the players that control television content and distribution.

What It Would Take. For an Apple TV product to change the world, it needs to offer a user interface that combines the linear content delivered today by cable and satellite with the wealth of over-the-top content available over the internet (the means of delivery is irrelevant unless you happen to be in the video infrastructure business.) Google tried to accomplish this without cutting deals with either carriers or distributors. Google TV was a hideous kludge that no one would buy.

Content owners have been slowly moving their products to the internet, but they have been doing it in a way that protects their lucrative arrangements with distributors. Time-Warner’s HBO Go and Disney’s ESPN 3 offer prime content, but these services are only available to subscribers who already have access to the channels through the likes of Comcast or Verizon FiOS. They have no particular incentive to change those arrangements.

The cable and satellite operators, some of whom have reportedly been talking to Apple, have a strong incentive to resist. They have seen how Apple tends to suck the lion’s share of profits out of any business it enters. Perhaps more significant, they have watched while Apple turned AT&T and Verizon and Vodafone phone customers into Apple customers.

I have absolutely no doubt that Apple could supply a viewing experience vastly better than what I am getting from my Motorola FiOS DVR box. (I had hoped that when Google acquired the set top box operation as part of its purchase of Motorola Mobility that it actually do something with it. But it has made no moves and now reportedly is seeking a buyer for the operation.)

The problem is that it is very hard to see why they would open the door to Apple disruption. Cord-cutters, people who get all their video over the top or over the air, do not yet pose a very significant threat to the cable operators’ business model. And to the extent that cord cutters are moved by economic considerations, it’s not clear they would be lured back by an Apple service that is almost certain to be more expensive (otherwise, no one will make money from it.) They will talk to Apple because they have no reason not to, but the chances of a deal any time soon look grim. (One possibility: Apple strikes a deal with a satellite provider and the service is so good and so popular that the cable operators are forced to go along or face mass defections. There are a number of reasons why this is unlikely.)

I suspect Jobs may well have found a way to crack the TV user interface problem. But Apple’s lack of progress with both content owners and distributors suggest that he didn’t come close to cutting the Gordian knot of business challenges. Apple continues to make its existing products enough better to stay on top of the markets it dominates. But without a TV breakthrough, Apple at the moment seems a bit short of new worlds to conquer.

Apple as Innovator: Four* Contributions That Changed Computing

Reading the comment threads on Tech.pinions’ many posts on Apple v. Samsung and iOS vs. Android, I have been struck by the recurring charge that Apple is nothing but a clever marketer that does nothing but copy (impolite version: steal) and repackage the work of others. To anyone knowledgeable about the history of the industry, this is pure nonsense I’m not sure that evidence will do much to persuade the doubters. Nonetheless, here are three critical Apple innovations that reshaped the tech industry:

Desktop Publishing. The laser printer was invented by Xerox in the late 1960s and developed in the 1970s by Canon, Ricoh, and Hewlett-Packard. But in the mid-80s, nearly all “letter quality” printers relied on typewriter technology. Apple had the vision to combine the capabilities of the laser printer, the new Macintosh, and Adobe’s PostScript page-description language to put something resembling professional page composition on the desktop. Apple’s LaserWriter printers were not terribly successful and the company decided to leave printing to HP and others after a few years. But Apple’s early commitment to the technology set the stage for the desktop publishing revolution that not only made gave every computer user the tools of the graphic artist but revolutionized commercial publishing.

The legacy-free computer. In 1998, every computer was expected to have a floppy drive. Windows PCs came with PS/2 ports to connect a keyboard and mouse, a parallel port for a printer, and a serial port for other chores, such as syncing a Palm Pilot. Macs replaced those connectors with the proprietary AppleDesktop Bus and LocalTalk ports. That spring, Steve Jobs, who had just resumed the helm of Apple, introduced the original iMac. In addition to looking completely different from any computer anyone had ever seen, the iMac dispensed with both the floppy and all legacy ports, replacing them with Universal Serial Bus connectors. USB had been around for a while and was standard equipment on all Intel motherboards, but since Windows didn’t reliably support USB until Windows 98 Second Edition in mid-1999, they were barely used. Apple, which was still in very shaky financial condition, got scathing criticism for its leap into the future. But while floppies and legacy ports persisted on Windows machines for years, the iMac was a runaway success and suddenly all those indispensable legacies became dispensable indeed. (The iMac’s USB “hockey puck” mouse was a less brilliant idea and was soon replaced by a more conventional design.)

Wi-Fi. No, Apple didn’t invent Wi-Fi, or, as it was originally called, wireless Ethernet. That honor goes to AT&T (later Lucent) Bell Labs. But Apple began putting AirPort cards (actually rebranded Lucent Orinoco PCMCIA cards) into Macs, including some desktops, in 1999, before the IEEE even completed the agonizingly slow process of ratifying the 802.11b standard that it was based on. (Here’s a 1999 article I wrote on Apple’s offerings.) Slower versions of the 802.11 standard had been around for a while for commercial and industrial use, but Apple took the blindingly fast version (a theoretical 11 megabits per second, up from 2 mb/s) and turned it into a consumer product. Although others, particularly Intel, were later to play an important role in making Wi-Fi ubiquitous, it was Apple that had the vision that freed our computers from their network tethers.

WebKit. It’s easy to foget how awful mobile browsing was before the iPhone. Not only did most devices have minuscule displays, but the browsers on Palm, Symbian, BlackBerry. and Windows Mobile devices were just terrible. The WebKit browser engine that was the basis of the iPhone version of Safari totally changed the game by bringing desktop-class browsing to a handheld. Even though the original iPhone, which lacked 3G support, suffered from slow connections, it provided a vastly better browsing experience than anything we had seen before. Even better, it’s open source (not entirely by choice; WebKit was based on the KDE project’s open source KHTML) so it is widely used by other company’s browsers, including Google Chrome.

Purists can complain that Apple didn’t invent any of these. But that’s the difference between invention and innovation. And while the cleverness and insights of the inventor are essential, we need the daring and vision of the innovator to move forward. The iMac in particular was an extremely gutsy move by Apple; Steve Jobs bet the company on a novel design and its failure would almost certainly have meant the end of Apple.

Even during Apple’s darkest days of the mid-1990s, Apple remained a remarkably inventive company. For example, the Newton MessagePad was a failure, but no one can say that it did not break significant new ground. There are many things you can fairly criticize Apple for, but the charge that the company fails to innovate is just plain silly.

*-There are three kinds of mathematicians–those who can count and those who can’t. The original headline said “three.” While writing the piece, I added the section on the LaserWriter, but forgot to change the headline.

The New OS Wars: The Variety of Android Boosters

The verdict in Apple v. Samsung unleashed a flood of commentary on the relative merits of Apple and Android, and the one thing that has struck me as I read through the posts and comments is the passion of Android supporters. I’ve been following OS wars for 25 years or so since the heyday of Mac OS vs. MS-DOS and I’m still surprised at how invested some people get in their choice of software, the code equivalent of fans who show up at Lambeau Field in December with their half-naked bodies painted green and gold.

I spent years being taken to task by Apple advocates any time I said anything less than totally favorable about any Apple product, often being accused of being on the Microsoft payroll. Today, the Android fans (please don’t call them, or anyone else, fanboys. It’s a childish epithet) seem to be the most passionate. In reading their views, I have identified several sub-species of Android enthusiasts.

The Makers. This is the group I find most appealing. They are inveterate tinkers drawn to Android because what others see as chaos in the Android world they see as opportunity. To them, the most important characteristic of a new Android handset is the ability to “root” it to circumvent whatever restrictions Google, the phone manufacturer, or carrier may have placed on it. They will sacrifice convenience and even functionality for freedom and are repelled both by Apple’s “control freak” approach to apps and the closed Apple software/hardware environment. Tinkering is the mother of innovation and let us not forget that Steve Jobs and Steve Wozniak got their start as phone phreaks. The Makers’ principal sin is failing to realize that they represent a tiny slice of the market and assuming that their views are far more widely held than they are.

The Open Source Hardliners. This group is related to the Makers, but not nearly as much fun. The truest believers find the idea of making money from software morally repulsive. Their problem is that while Android may look open in comparison to iOS, Android’s open source cred is a little shaky. In theory, anyone can take Android code and use it freely under an Apache license. In practice, most of the major OEMs (Amazon, hardly a paragon of openness itself, is the leading exception) have chosen to use Google’s official versions of Android and to play by Google’s rules. The principal practical difference in openness between iOS and Android as they come from the factory is that Android requires only a simple change in preferences to install apps that do not have Google’s official sanction while an iPhone requires a warranty-voiding “jailbreak.”

The Underdog Backers. There seems to be something in human nature that causes people to back an underdog. And even though Android is backed by a powerful Google and Android handsets have been outselling iPhones for a while, it is still seen by many as David to Apple’s Goliath. Some of this same sentiment worked in favor of Palm’s webOS, even after Hewlett-Packard bought it, and actually strengthened for a bit after HP killed it. (Death is the ultimate underdog status.) Somehow, though, back-the-underdog sentiment hasn’t done much for poor Research In Motion, and viewing Microsoft as a spunky challenger seems to make people’s heads explode, even if Microsoft is a very distant third or fourth in the business.

The Apple Haters. This is the group, in some sense a more hard-edged and nastier version of the Underdog Backers, that I find most troubling. It almost seems as if a whole group of people who used to hate Microsoft have transferred their animus intact to Apple. Strangely, the complaints are almost exactly the same. Folks used to denounce a greedy Micro$oft. Now they complain about a greedy Apple’s prices. They regularly denounced Microsoft as a bully using its power to crush competitors; now they say they exact same thing about Apple. There’s at least a bit of truth in this charge. What is much stranger is the charge that Apple is brilliant at packaging and marketing but provides no innovation and develops its products by copying, or in the less polite version, stealing. Of course, the exact same charge used to be leveled at Microsoft. It wasn’t true of Microsoft and it most certainly is not true of Apple. If Apple had done nothing but the iPhone, it would still be one of the most innovative companies in history. I have trouble figuring out just what motivates the Apple haters, but I imagine I’ll be hearing from plenty of them.

Of course, the great majority of Android buyers don’t fall into any of these classes. The are buying Android for a large variety of reasons, ranging from supersized displays to super-low prices. Some carriers push Android hard because they don’t have an iPhone to offer. Some with iPhones in their portfolios push Android anyway because it is more profitable or more in line with their strategy. Verizon, for example, has been soft-pedaling the iPhone because it made a strategic decision to push only phones that support its massive investment in LTE technology (this is likely to change with the release of the next iPhone.) Of course, most of these people also don’t write or comment on blogs. They just buy, use and, I hope, enjoy their phones, whatever device they have chosen.

A Smartphone Patent Pool: A Way Out of the Litigation Thicket

Photo of Gene Quinn from IP Watchdog — Gene Quinn

One major misconception arising from Apple’s legal victory over Samsung is that Apple now has some sort of monopoly over critical components of smartphone touch screen interfaces. Patent lawyer Gene Quinn of IP Watchdog explains the problem with this view in considerable detail, but a quick and dirty way to look at it is that patents almost never are issued for broad, sweeping ideas. Instead, as is the case with the Apple claims in dispute, most patents cover small, incremental improvements in existing ideas. The design of smartphones is covered by hundreds if not thousands of such patents, distributed over a large number of patent holders.

The parties could spend an inconceivable amount of time and money trying to litigate their way out of what Quinn calls a “patent thicket.” Or they could turn to a solution that has resolved such messes in the past, a patent pool. The idea of a patent pool is simple: Each player with a relevant patent contributes it into the pool. Anyone who wished to use any of the patents buys a license. And the royalties are divided among the contributors by formula. Anyone who needs the patented technology can use it and everyone who owns patents gets paid.

Pools have been used with considerable benefit in the tech industry. For example, the development of digital entertainment media was greatly facilitated by patent pools covering CDs, DVDs, and MPEG, among other technologies. People grumbled about paying for the licenses, but development proceeded with little litigation.

Of course, a patent pool for smart phones is more easily talked about than created, especially when many of the players are at each others’ throats. Coming up with an equitable licensing arrangement is a challenge and agreeing on a formula for distribution of the proceeds is a bigger one. The fact that Apple and Microsoft are likely to be the biggest winners, at least regarding touch interface patents, will not sit well with many.

But pieces of such an arrangement are already in place. Microsoft and Apple have an intellectual property nonaggression pact dating back to 1997, when they agreed to end their numerous IP disputes with a broad cross-licensing agreement. And most Android phone and tablet makers have already agreed to license Microsoft’s patents.

But hard though it may be, establishing a pool serves everyone’s long term interests better than the present litigation free-for-all. Says Quinn: “Eventually a patent pool is almost certainly how this will resolve. If you look at the history of so-called patent thickets, the players fight and fight for a while and then, as more and more innovation occurs, they enter into a patent sharing arrangement of one kind or another. Patent thickets lead to a tremendous growth in innovation. We will see that in the years to come. Likely not too far off if you ask me.”

Windows RT Grows More Mysterious as Launch Nears

Microsoft Surface — Microsoft’s Surface Windows RT Tablet

I expected we would be seeing more clarity on the distinctions between Windows 8 and its Windows RT sibling (for ARM processor devices) as the expected late October launch grows closer. But the picture seems to be growing murkier instead.

I didn’t make it to the IFA show in Berlin where many Windows 8 and RT devices had their unveiling but read dozens of reports. I was particularly struck by this hands-on video from The Verge’s Tom Warren. When Microsoft first announced what was then called Windows on ARM in February, it said Windows RT would have very limited access to the traditional Windows Desktop:

WOA includes desktop versions of the new Microsoft Word, Excel, PowerPoint, and OneNote. These new Office applications, codenamed “Office 15”, have been significantly architected for both touch and minimized power/resource consumption, while also being fully-featured for consumers and providing complete document compatibility. WOA supports the Windows desktop experience including File Explorer, Internet Explorer 10 for the desktop, and most other intrinsic Windows desktop features—which have been significantly architected for both touch and minimized power/resource consumption.

It seems that the definition of “intrinsic Windows desktop features” is somewhat broader than most of us had expected. For example, Warren found versions of Notepad and Paint included. Maybe RT will support all of the applications and utilities traditionally found in the \windows\system32 directory. (It would certainly be the most robust utility tool kit on an ARM tablet.)

Isn’t all this extra stuff a good thing? Not really. For one thing, these apps are not optimized for touch and Warren’s video shows how awkward they are when the on-screen keyboard is covering half the display. (This was a chronic problem on Windows Tablet PCs going back a decade. The keyboard was never smart enough to stay out of the way of the programs it was interacting with.)

The bigger problem is that this is going to be very confusing for consumers. If Windows 8 and Windows RT look alike and to a considerable extent act alike, how are consumers going to understand the difference? But the differences are large and important. Whatever classic desktop applications come on the RT versions, those are all you are going to get. Windows RT only allows installing of software downloaded through the Windows App Store. There will inevitably be a jailbreak that allows sideloading of apps, but even if you could load them, they won’t run: Code compiled for an x86 processor simply will not execute on an ARM system.

Microsoft’s Windows 8 strategy was always courting massive consumer confusion and the prospects are getting worse. Manufacturers are showing keyboard-equipped Windows RT devices that pretty much look like notebooks, At a minimum, Microsoft faces a large-scale consumer education problem.

A Cautionary Tale About Market Share

TI Travelmate ad — via spaziodigitale.net

My colleague John Kirk’s series of posts about Android, iPhone, and the importance–or lack thereof–of market share brought back memories of some fights over share in the PC business. The moral of all the stories is that companies that went after share at the expense of profit were either forced to reverse course quickly or get out of the business.

My favorite example was Texas Instruments, which decided to make a big splash in the laptop business in the mid-1990s. TI was making a nice line of TravelMate laptops (if the name sounds familiar, it’s because it lives on as an Acer sub-brand) but was lost in what was then a crowd of PC makers. It decided to cut prices sharply. This set off a 1996 price war in the industry, but had the desired effect of greatly boosting TI’s market share. It rocketed out of the pack to, I believe, a #3 rank in the market. Unfortunately, it lost TI a couple of billion dollars in the process and within less than a year, the company sold its PC assets to up-and-coming Acer and exited the business.

This was an extreme case, but HP, Dell, and Acer have all played the market share game. Each achieved dominance at the expense of profits. And none has fully recovered from the experience.

And that is why I believe apple’s profits-first strategy is a much better forumla for long-term success

Pinch-to-Zoom and Rounded Rectangles: What the Jury Didn’t Say [Updated]

As the Apple v. Samsung trial neared completion last week, I worried about how a jury of nine ordinary folks were going to make sense of hours of highly technical testimony, more than a hundred pages of jury instructions, and a 20 page verdict form. I needn’t have worried. Whatever happens on appeal, I think the jury did an admirable job making sense of the case they were given. They certainly did better than much of the tech media, which have made a complete mess of the verdict.

Pinch and stretch drawing — Drawing: Microsoft Developer Network

For example, this by Craig Timberg and Haley Tsukayama in the August 29 Washington Post: “Friday’s $1 billion court ruling for Apple, which upheld patents for what manufacturers call ‘pinch to zoom,’ among other popular features, has clouded the future of the gesture for anyone inclined to buy mobile devices from other companies. Apple made clear its determination to press its advantage Monday, announcing plans to seek preliminary injunctions on eight phones made by Samsung, the loser in the case.”

There’s one serious problem with the first sentence, which was repeated dozens of times in stories in print and on the Web. Apple only has a limited patent (US 7,812,826) on the pinch to shrink, stretch to zoom gesture that is a core element of touch interfaces. And the ‘826 patent wasn’t in dispute in the Samsung case because Apple never asserted it. In fact, this particular patent does not seem to be in dispute in any litigation.

I wanted to make sure I wasn’t imagining this, so I checked with The Verge’s Nilay Patel, an intellectual property lawyer by training and a consistent source of solid reporting on patents and other IP issues:

The actual issues in the Samsung case involved several patents covering the overall design and “trade dress” of the iPhone and iPad and three Apple “utility” patents that cover specific software behaviors. One covers the bounceback behavior of screen objects when you try to scroll beyond the edge of the display. A second concerns how the device differentiates between a one-finger scroll gesture and a two-finger move gesture. The third covers tap-to-zoom, which expands objects in the display centered on the point of the tap (think Maps).

Equally strange was the treatment of the notorious “rounded rectangles” argument. Michael Hiltzik wrote for The Los Angeles Times: “The illogic of the patent system is what generates nonsensical verdicts like last week’s jury award. Apple’s allegation that Samsung copied the iPhone with its phones is virtually identical to its allegation that Samsung copied the iPad with its Galaxy tablet computer. In its briefs, Apple describes both of its devices as ‘a rectangular product with four evenly rounded corners, a flat clear face covering the front of the product, a large display screen under the clear surface … and a matrix of colorful square icons with evenly rounded corners,’ etc., and alleges that Samsung copied these ‘distinctive’ features.”

Samsung contributed greatly to this with a post-trial statement that said: ““It is unfortunate that patent law can be manipulated to give one company a monopoly over rectangles with rounded corners, or technology that is being improved every day by Samsung and other companies.” It’s more unfortunate that the claim was a gross exaggeration that was swallowed whole by many writers.

Apple claimed that Samsung infringed on four design patents. The D’677 patent covers the overall design of the iPhone while D’305 covers the layout of icons. These claims were upheld. But the jury rejected infringement claims based on patent D’889, which covers the iPad, and rejected eight of 13 claims under D’087 and which deals specifically with the rectangles-with-rounded-corners design of the iPhone (see the relevant sections of the jury verdict form below.) Corrected–see note at end.

How did so many get this so wrong? I fear it betrays something ugly about the way tech reporting works–and doesn’t work–these days. Depth, expertise, and reflection are all lacking. So is serious research. If you are going to write about a patent case, it’s a good idea to read the patents in dispute. Reading patents is not a particularly pleasant business. The language is tedious, legalistic, and often deliberately obfuscatory; you want to give the Patent Office the required information while giving away as little as possible to your competitors. But reading the claims, the critical section of the patent, isn’t all that difficult. There are a total of 101 claims for the three patents and they fill about five printed pages. Yet I suspect very few of the people who wrote about the trial actually made the effort. If they had, they would have known that the range of gestures covered was much narrower than has generally been reported.

I’m not sure where the idea that pinch and stretch was at stake originated. It seems to have crept into the trial coverage at some point and become part of the folklore of the case. And when the jury announced that it had found infringement by Samsung on all three utility patents, a large number of writers seemingly assumed that one of those covered the gesture. In the case of rounded rectangles, Samsung’s obfuscation certainly contributed. So did a general hostility toward the entire patent system in the tech community, including tech writers, which created a readiness to believe in the most absurd interpretation of the outcome.

I’m not minimizing the significance of Apple’s victory in the case (and again, we’ll have to wait for appeals, likely several years’ worth considering the languid pace of the Circuit Court of Appeals for the Federal Circuit, before the matter is settled once and for all.) But while the multitouch gestures covered by the Apple patents are important, there is nothing as critical as pinch-to-zoom and nothing that would prevent an innovative designer from coming up with non-infringing alternatives.

Note: The original version of this post said the jury had rejected all claims regarding the rounded-corner design. The jury in fact rejected all claims only regarding willful infringement. On the simple question of infringement, the jury rejected a majority of claims, but did accept five regarding the iPhone. The corrected version appears above.

Patents: Who Has a Portfolio With Clout

One thing that put Samsung at a serious disadvantage in its patent fight with Apple was the weakness of its own portfolio of relevant patents. Conflicts between companies with roughly comparable portfolios almost always end in a cross-licensing agreement. A fight to the death only makes sense when one company thinks it has a clear advantage.

A look at Apple’s scroll-and-zoom patent (US 7,844,915), one of the software patents Samsung was found to have infringed, sheds some light on who had clout and who didn’t around the time the patent was filed in early 2007 (it was granted in 2010.) A total of 50 other patents are cited in the application.

Seventeen of these are apparently the work of individual inventors or researchers; they are not assigned to any corporation. Five others are Apple’s own, one going back to 1993. Microsoft accounted for the largest number, 10, including some patents clearly related to the Microsoft Research project that produced the Surface touch table. IBM came in with three and Philips two. The application cited single patents from Autodesk, Cygnus Systems, Design Intelligence, Elan Microelectronics, Ericsson, Hewlett-Packard, Laszlo Systems, Magnifi Group, Nokia, Picsel, Sony, Synaptics, and Tatung.

Who is missing from this list? Samsung, of course. And, Google, including its new Motorola subsidiary. Being there matters.

Of Apple, Samsung, and Obviousness (Updated)

Calimni's patentent drawing — Calimani’s patent drawings (Galla Coffee)

In 1929, an Italian named Attillo Calimani received a patent for a French press coffee maker. The French press is an extremely simple design: a glass beaker, a metal mesh filter attached to a push rod, and a gasket to form a seal between the filter and the glass. Calimani’s coffeepot looks remarkably like the Bodum press I use every morning. Its design follows its function so elegantly that it doesn’t seem like something that needed inventing. Yet it wasn’t until coffee had been around for hundreds of years that the imagination and manufacturing technology combined to make the French press a practical device.

This, in fact, is a characteristic of the very best in design and invention. Once you see it, it seems inevitable, as though it should always have existed. But that simplicity often takes a a tremendous amount of effort to achieve.

And that is what is wrong with the arguments of Samsung and its supporters that Apple’s iPhone patents were invalid because the key design features were obvious. U.S. patent law imposes a threefold test for patentability: An invention must be novel, useful, and non-obvious. The much-maligned U.S. Patent & Trademark Office found that Apple met that test for various features of the iPhone and the jury, the the extent it could consider the validity of the patents, agreed.

Now it’s true that there is nothing completely new under the sun. According to the history of the French press on the Galla Coffee web site, two French inventors came up with the French press idea nearly a century before Calimani. But their design lacked the gasket around the filter, leaving a lot of coffee grounds behind when the plunger was pushed, In other words, they had the right idea but it it didn’t quite work. Success requires that you both have an idea and find a way to make it practical.

It’s useful to reflect on just what Apple invented with the iPhone that did not exist in 2007. Apple did not invent the multitouch capacitive display, but was the first to use it in a phone. (Microsoft, by contrast released a version of its Windows Mobile software in late 2009 with no support for multitouch displays.) Apple designers realized that a multitouch screen made both an on-screen keyboard and the elimination of virtually all physical buttons practical. (Large-screen Symbian phones existed before the iPhone, but they lacked multitouch and designers felt compelled to add physical keyboards or at least dialpads.) Despite the handicap of slow network connections–the original iPhone did not offer 3G wireless–Apple realized there was real value in web browsing on a phone and even originally thought that the web was a viable alternative to native apps.

It’s interesting that the most successful competitor to the iPhone is the one that has stuck most closely to the Apple formula, Android. Research in Motion, which thrived for a long time partly because of another obvious, non-obvious invention–a practical miniature keyboard–lost its way by ignoring the Apple assault until too late. Palm offered a real alternative with webOS, but lacked the financial resources to give it a fair chance (I’m not going to go into the Hewlett-Packard fiasco again.) And Microsoft has had a very tough time gaining traction for its distinctive approach, but it’s way to early too count them out.

There are legitimate fears that the decision in Apple v. Samsung will stifle innovation, but I am optimistic that the result will be the opposite: Forced to compete rather than copy, Apple’s competitors will find their way to true competition.

And as for the claim that Apple really didn’t come up with anything strikingly original in the iPhone design, that anyone could have done it, I’ll paraphrase what Aaron Sorkin’s “Mark Zuckerberg” famously said in The Social Network: If you guys were the inventors of the iPhone, you would have invented the iPhone.

UPDATED: At TechCrunch, Leonid Kravets, an actual patent lawyer, weighs in on the issue of obviousness and the Apple-Samsung verdict. The conclusions are similar, but I bet he had less fun writing it.

What Does Microsoft Have Against Email?

Email in Windows 8 is a catastrophe.

I know the cool kids think email is last decade’s technology, but the fact is that it remains a vitally important communications tool for both businesses and consumers. But it gets no respect from Windows 8, and this could be a huge problem on Windows RT tablets.

When I first started playing with the Mail app in the first preview of Windows 8, I didn’t pay too much attention to its glaring deficiencies, figuring it was a placeholder for the real application that would come along later. The version of Mail that’s included in the RTM version of Windows 8 Pro is better, but not by much. Support for IMAP accounts has been added, though POP3 is weirdly still missing. And the list of missing features is longer than the roster of present ones: multiple accounts are supported but there is no unified inbox, there’s no way to search,* thread, sort, or arrange messages in anything but newest on top. I haven’t seen anything this bad since AOL Mail, circa 1995.

At first, I thought this was a clever plot to drive users to the new Outlook.com mail service. Outlook.com’s browser user interface is a lot more capable than the Win 8 Mail app. But it’s account support is sadly deficient. It supports only Outlook.com web mail (the replacement for Hotmail) and POP3 accounts. (Do the Outlook.com and Windows 8 Mail teams talk to each other? I doubt it.)

The lack of a decent built-in mail client is not a crushing defect for a operating system. Windows 7 shipped with no mail client at all, though you could easily download the confusingly named Windows Live Essentials Mail, a latter-day Outlook Express. If you had Office, you could use Outlook, and almost certainly did if your mail system was Exchange-based. Or you could download any of a number of free or paid mail clients.

The same is true for the x86 version of Windows 8. But Windows RT, the vers. ion for ARM-based tablets, is much more problematical. The version of Office included with RT does not include Outlook and Microsoft has not said whether there will be an Outlook for RT. Unless some developer comes up with a good mail client for RT (which would have to meet with Microsoft approval for distribution through the Windows Store), consumer users of RT tablets are going to be annoyed and business users will be in deep trouble. The Mail app does support Exchange accounts, but only the most basic features are available. Outlook Web Access is an alternative, but it has the significant disadvantage of only working on a live internet connection, along with the lack of a unified inbox that will combine messages from other accounts.

Much about Windows RT is still speculative, because we have yet to see systems in the wild. But if Microsoft is going to win back ground lost to the iPad, it will have to do a whole lot better on email support.

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*–Commenter Bam! pointed out to me that you can indeed search through messagers using the standard Search charm. It’s a bit crude–there seems to be no way to limit search to a specific folder, though you can use specifiers such as from: and to:. I still find the idea of the Search charm as a sort of do-anything tool somewhat confusing. And considering the amount of space the full-screen Mail app wastes, there was plenty of room for a conventional search box.

The Twitter Kerfluffle: You Gets No Bread With One Meatball

The world of Twitter has been a-twitter for the last few days over changes the microblogging service is making in the third-party access to Twitter APIs. In general, the rules restrict or outright block the access of many third parties. Reaction ranged from apocalyptic (Buzzfeed’s Matt Buchanan: “Twitter is in effect holding a pillow over Twitter apps as you know them, smothering the ecosystem over time.”) to the relatively sanguine (Tweetbot’s Paul Haddad: “Don’t panic.”)

Others have said more than enough about the merits, or lack of them, of the Twitter changes. I want to talk about their inevitability. I am an active Twitter user and find it hard to imagine how I got by without this relatively young service. But those of us who love and depend on Twitter have to realize that since we have never given it a penny, it doesn’t owe us anything. The same is true in spades for developers who have built their own apps and services on APIs that Twitter has provided without charge–and without any guarantees about their future availability.

There comes a time in the life of any startup when it has to think about its sustainability of itself as a business, and Twitter is reaching that point. Managing the tradition from unmonetized success to sustainable business is one of the toughest challenges for any startup that has grown as a free service and many fail. MySpace never pulled it off, and the jury is still out on Facebook.

Twitter has chosen that advertising is its primary route to monetization. Given that, it is going to have very little tolerance for third-party apps that fail to display Twitter’s ads. It also will become increasingly reluctant to letting third parties help themselves to information on Twitter users, hence the blocking of “find my friend” features on Instagram, Tumblr, and other services.

Perhaps Twitter had an alternative course available, but it would have required charging for what has been a free service for more than five years. A startup called app.net is trying to build an ad-free, more open Twitter-like service by charging $50 a year. I wish them well, but I suspect they’ll have a very tough time achieving critical mass.

For better or worse, the internet has created a culture where we are used to getting valuable services without paying to them, at least in cash. But sooner or later, the piper must be paid. That’s when we learn that the service belongs to its investors and managers, not to us.

Why We Hate Carriers (AT&T Edition)

Watching folks try to untangle themselves from messes of their own making is often painful. No, I’m not talking about Missouri Senate candidate Todd Akin, but AT&T and the trouble it has made for itself by restricting the use of Apple’s FaceTime on its wireless network. AT&T’s latest effort, a posting by its top regulatory official, Bob Quinn on the AT&T Public Policy Blog, only makes things worse.

AT&T had prohibited FaceTime on its network since Apple introduced the app, allowing its use from AT&T iPhones and iPads only over Wi-Fi. It recently announced that it would allow FaceTime use for customers of its new Mobile Share plans, but not others. Presumably, the intention is to drive customers toward the Mobile Share plans. Or something. It makes no sense from any technical perspective since all the customers are using the same network.

The blog post, a nice piece of sophistry, is dedicated to explaining why the policy does not violate the Federal communications Commission’s network neutrality guidelines. The crux of the argument is that FaceTimes is a “preloaded” app and “the rules do not require that providers make available any preloaded apps.” Meanwhile, Quinn notes, customers are free to download and use other video chat apps. If this makes sense to you, you are living on a different planet than I am.

The question of whether the AT&T rules violate FCC guidelines isn’t very important. For one thing, there’s a better than even chance the guidelines won’t survive a legal challenge. The bigger issue is that the AT&T policy is a badly conceived, anti-customer business practice.

AT&T meters customers’ wireless broadband use, effectively charging by the byte. If customers choose to use up their monthly allotment in FaceTime chats, what business is it of AT&T? It’s their data, to use as they please. In fact, the company ought to be happy because the use of a bandwidth-gobbling app like FaceTime is likely to push customers into overages, producing more revenue.

Another weirdness about the post is that it suggests that after five years of selling iPhones, AT&T still has no idea of how this business works. There are no preloaded apps on iPhones, not in the sense of the often junky applications carriers used to pile onto their phones (and still do on some Android models.) The software load of the iPhone is completely controlled by Apple and FaceTime is a core feature of iOS. The statement, “Although the rules don’t require it, some preloaded apps are available without charge on phones sold by AT&T, including FaceTime, but subject to some reasonable restrictions” comes off as nonsense when applied to the iPhone.

Tech Journalists Need To Learn Something About Business

A week ago, Engadget published a thinly sourced report that Microsoft would sell its new Surface tablet for an improbable $199. Despite a lack of any further confirmation, the report was endlessly repeated, commented upon, and used as the basis for endless speculation. My colleague Tim Bajarin did a very effective job of puncturing the rumor, based on supply chain reporting and his extensive knowledge of the industry. What very few others did was to look at the report with a jaundiced eye and ask whether such an action made any business sense for Microsoft.

This is a rampant problem in technology journalism today, whether in print, online, or broadcast. Many technology writers appear to have little interest in the business side of their industry and little background or training in the intricacies of operations or finance. If they ever read financial reports, it doesn’t show in their work. I doubt that most of them know an S-2 from a 10-K. And this is unfortunate because it often produces shallow and uninformed reporting.

Let’s go back to that $199 Surface. The Surface is the most interesting product announcement from Microsoft in many years because it represents an important break with the company’s core business model of licensing software while leaving the hardware business to its OEM customers (Yes, Xbox is an exception, but a very limited one. We’ll get to that in a bit.)

Microsoft makes nearly all of its money from three roughly equal revenue streams: Windows and Windows Live, Servers and Tools, and Microsoft Business. The first is the core Windows business, the second all the back-office software Microsoft sells to enterprises, the third is mostly Office. Recent trends in the industry, especially the rise in tablets and the accompanying collapse of consumer software prices threaten the first and third streams.

Microsoft is getting into the hardware business because it wants to shake things up–a bit. But its position is not so threatened that it wants to destroy the ecosystem that it has spent the last 30 years creating. A $199 high-quality tablet would have two drastic effects on Microsoft’s business. It would produce enormous losses of perhaps $150-200 per unit; modestly successful sales of 5 million units–about the number of iPads Apple sells in a month–could knock a billion dollar hole in Microsoft’s earnings. And it could make it impossible for OEMs such as HP, Lenovo, Dell, and Acer to enter the market. With the traditional PC market beginning to shrink, a Microsoft loss-leader tablet would be an existential threat to these OEMs–with no guarantee that Microsoft rather than Apple or Google and its partners would pick up the pieces.

Some speculation (for example) focused on the possibility of typing that $199 price to a subscription to–something. But again, this reporting failed to do any real business analysis. Wireless carriers provide up-front subsidies for phones, so why not Microsoft for Surface. For one thing, contracts for smartphones bring in around $100 a month, leaving lots of room to pay for the service and recoup the subsidy. A similar model was tried for both some notebooks, especially netbooks, and Android tablets, but it has been a dismal failure to the point where carriers are abandoning it. And the availability of free services is so great that it is hard to see what would get Surface buyers to pay a monthly fee.

The Xbox has also inspired a lot of bad business analysis. It’s true that that the Xbox was introduced at a price well below its cost in the hopes that game licensing feeds and outright sale of Microsoft games would make it profitable. Fortunately, the Xbox has never been a huge part of Microsoft’s business because this strategy took years to pay off. It’s true that today you can buy a $99 Xbox if you agree to pay $15 a month for two years for an Xbox Live subscription. But this is really a financing alternative rather than true subscription, since you will pay $359 for a subscription that could be bought on its own for $120. The Xbox is simply a very different kind of business than Windows, aimed at a very different audience.

The big problem here is the fact that too many tech writers don’t look at the numbers or don’t know what to make of them if they do. In an earlier generation, it was common for tech writers to have put in some time on the business beat, and the most of the best still have that experience. The quality of tech writing would improve immeasurably if such skills were more widespread.

Dear Industry: Time To Rethink Attitudes About Age

Last month, I officially crossed the line into geezerhood.

Entering the land of Medicare as part of the baby boom vanguard has served the heighten my irritation at the tech world’s frequently patronizing, even pitying attitude toward what it regards as the clueless old. Marketers ignore this fast growing demographic at their peril, but those who think of us geezers only as customers for medical devices and dumbed-down computers are making an even bigger mistake.

My hackles (I think you develop those with advancing age) were raised today by a Kickstarter project called Pure Device, brought to my attention by Ross Rubin. Pure Device is a cloud-based touchscreen tablet in a frame with what appears to be a much simplified user interface. Its marketing pitch: “In the U.S. alone, there are 34 million people over the age of 65, a large percentage of whom struggle with effectively using the current available technologies. As a result, it is hard for them to stay connected with their families due to this sharp divide in accessible and user-friendly technology.”

Let’s look at the intersection of today’s 65-year-old and technology. Many of us were introduced to computers in college in the 1960s; my first computer was an IBM 7090 mainframe. Many of us learned about electronics building things from Heathkit or with bits from Radio Shack. By the mid-1980s, when we were in our late 30s, PCs were invading the workplace in significant numbers. By the mid-90s, home computers were becoming ubiquitous and many of us had our first cell phones, often in the form of a car phone. By the late 90s, we were all on the internet (or at least AOL.)

In other words, most people in their 60s have been familiar with personal technology most of our working lives. We have laptops and desktops, iPhones, Androids, BlackBerries, and iPads–and we know how to use them. There are lots of 60-somethings in the crowds that pack my local Apple Store.

The reality is that as we get older, vision and hearing tend to deteriorate and arthritis and other conditions can limit dexterity. These mostly are not serious issues for those of use in our 60s, but they become more so in the 70s and beyond. But what they call for is the use of good adaptive technology to facilitiate use, not a dumbing down that assumes we are ignorant and incapable of learning. (Sadly, dementia and other cognitive impairments do become a growing problem with advancing age, but it’s not clear to me that any of the non-medical products being marketed to today’s 65+ population address this in any serious way.)

Not everyone is missing the boat. Longtime tech journalist Gary Kaye has stared a web site called In the Boombox, aimed at tech-savvy and active baby boomers. (The current home page features two GPS devices for back-country hikers.) But despite the interest and high disposable income of the baby boomer generation, efforts such as this are rare.

The tech world is a kingdom of the young, a place where 43-year-old Sheryl Sandberg is regarded as a (metaphorical) graybeard and 56-year-old Bill Gates a fossil. It’s not surprising that the young whippersnappers who run the industry view people their parents’ age as ancient, irrelevant, and probably helpless. But they are making a big mistake.

P.S.–Pure Device, your pictures make it look as though that tablety thing is designed primarily as a stationary device held vertical in its frame. The ergonomics of touch are awful on vertical surfaces and vertical touch keyboards are nearly impossible to use. We boomers are comfortable with keyboards; we’ve used them all our lives. Think about adding one.

The Trouble With Open Source: My Sage Saga

At a recent conference of mathematicians, I heard a lot of talk about Sage, an open-source project designed to create an alternative to powerful but pricey mathematics packages such as Wolfram’s Mathematica, Maplesoft’s Maple, and MathWorks’ MatLab. Do I decided to give it a try. The resulting struggle is a powerful indication of why open source will continue to struggle to find a place on the systems of all but the most dedicated users.

Sage, which is available free under the General Public License v. 2+, is an impressive piece of work. It falls far short of the polish of its commercial competitors, but offers a wealth of tools with its broad range of mathematical functions and commands and its Python-based programming language. But, as has so often been the case with open source projects, it falls drastically short on user experience, starting with an installation process so difficult that most people are likely to give up long before they get it running. First, although Sage claims to be available for Windows, Mac, and Linux, it only runs natively on Linux or UNIX systems. On the Mac, it is installed to run directly on Darwin, OS X’s BSD UNIX-based kernel, rather than the normal Mac user interface. On Windows, it requires an Oracle Virtual Box virtual machine.

I tried the Mac version first, but ran into total failure installing it. It starts with a normal-looking DMG disk-image file, but the process quickly requires the use of the Terminal command line. My problems is probably explained by the warning in the readme file: “These binaries are only for the OS X version that is indicated by the package .dmg name. They generally will not work on any other OS X version (unless explicitly stated otherwise).” The latest version I could find was for OS X 10.6 (Snow Leopard) and I’m running Mountain Lion. Scratch that attempt.

I figured a native installation in Linux might go better so I tried the Ubuntu version. People accustomed to Windows or Mac software installations will find installing most programs in Linux more than a little intimidating because Linux lacks standardized installers. Fortunately, an Ubuntu forum offers a very detailed guide to installation that includes command line steps such as:

sudo chmod -R 755 /usr/local/src/sage-3.1.4-ubuntu32-intel-XEON-x86-i686-Linux

(Acting as the superuser, change the rights of the files in this directory and all its subdirectories to read-write-execute for the user and read-execute for everyone else.)

Alas, after faithfully following the instructions, Sage still didn’t work:

(I think there something wrong with the path, but I’m not enough of a Linux guru to figure it out or fix it.)

Finally, the Windows version came to the rescue. It’s a lot more complicated than a normal Windows install, but after all I’d been through., it seemed like a snap. First, you have to download and install VirtualBox. You download the Sage package, which is actually a Red Hat Fedora virtual machine preconfigured with Sage and import it into VirtualBox. Then you fire u the VM. It takes a bit longer than launching a normal Windows program since it actually has to boot Linux, but Sage loaded and ran fine.

The point of all this is that the folks behind Sage, like they participants in many other open source projects, have failed to tackle the critical issues of usability. They have not transcended the “real men use command line interfaces” mentality and show little interest in the hard, but to most hackers, unrewarding, work of providing a great, or even a satisfactory, user experience. As a result they end up writing code mostly for themselves and each other. This helps explain why open source has had great success on the server (for example, Linux, the Apache web server, and squid proxy server) and tools for pros (for example, the Wireshark packet sniffer) but has had little impact on the broader world of applications.

This is a shame because the open source model has both produced some great software and provides an important alternative to traditional commercial development. But for both individuals and institutions, the initial cost of software represents a small part of the total cost over its life, whether that is measured in dollars or hours of frustration. That means that free is not enough to drive user acceptance; the convenience and polish has to be there too.