Monthly Archive for July, 2007

iPhone vs iPod: It’s called up-sell, not cannibalization, idiots.

Published
by
eas
on July 26, 2007
in Stupid Tricks, apple and iPhone
. 0 Comments

I apologize for yet another iPhone related post, but I still have something I need to get off my chest. For months now, various stock analysts have been attracting press coverage and garnering free publicity for their firms by publicly worrying that iPhone sales would “cannibalize” sales of the iPod, that people would buy iPhones instead of upgrading their iPods.

I’m sure that dynamic has played out in a number of cases, but if you take a step back and think about Apple as a whole, it is clear that this isn’t cannibalization, its up-sell. The most expensive iPod goes for $349. The cheapest iPhone is $499, while retaining nice healthy margins.

In other words, if someone forgoes an iPod for an iPhone, Apple is getting even more money! This is not something to worry about.

It might have made sense to worry that iPod sales would slow while people waited for the chance to by an iPhone, but apparently this was not the case. iPod sales grew faster than expected in the last quarter.

iPhone Sales, Perhaps Not So Dissapointing After All

Published
by
eas
on July 26, 2007
in Stupid Tricks, apple and iPhone
. 0 Comments

Yesterday, Apple announced they sold 270,000 iPhones in their last financial quarter. This is no doubt giving conniptions to people who were, only days ago, calling iPhone sales disappointing.

Earlier in the week, some members of the press seemed to be having second thoughts about their profession’s participation in the iPhone hype storm, so some of them lept upon a little fact from an AT&T earnings call that they’d only activated 140K iPhones in their last quarter, the last 30 hours of which overlapped with the iPhone’s debut.

This was terrible terrible terrible, because it was only a few weeks ago that they were hyping reporting the most breathless predictions that 700,000 or even one million iPhones had been sold shortly after launch. So they eagerly compared this information about iPhone service activations with AT&T over a 30 hour period to the most optimistic estimates for iPhone sales (ie, they compared oranges to apples) for the entire weekend. They also ignored or downplayed the fact that a lot of iPhone customers had trouble getting their phones activated that weekend, because AT&Ts systems couldn’t keep up.

Predictably, the same people who bought the earlier hype, happily swallowed this “news,” and Apple’s stock price, which had recently shot up on the positive spin, sank due to the negative spin. This drop then lead to more stories about how disappointing the iPhone was and reassured the press that they still have some influence.

Well, Apple stock is back up again. It’s recaptured everything it lost two days ago after the AT&T earnings call. The latest numbers hold up well against earlier estimates of earlier iPhone sales, many of which were in the range of between 300,000 and 500,000. Even if Sunday’s sales were 1/3rd of what they were for Friday evening and all of Saturday, it’s likely that Apple sold over 350,000 phones in the first weekend, and it looks like sales during the following week were also quite strong as most stores sold out of the phones almost as quickly as they received new shipments. I should note that even these estimates would probably have been considered optimistic back in June.

My Take on Someone Elses Take on One Month With the iPhone

Published
by
eas
on July 25, 2007
in General, apple and iPhone
. 0 Comments

Dave Weiner writes about his first month with an iPhone. I generally share his criticisms, but he gets off to a rough start by resorting to a common but intellectually dishonest journalistic touch at the beginning

He uncritically restates the overly simplistic headline of a NY Times story, (thereby reinforcing it) and takes it at face value as a segway into the rest of his own piece.

The NY Times reports that iPhone sales are disappointing, I’d like to add that the product itself is disappointing.

This is a problem, because the NY Times story draws shakey conclusions based on suspect and incomplete data. The only data available when that story was written was the # of iPhone activations on AT&Ts service over the first 30 hours after launch. That number is not the same as the number of phones Apple sold in the first weekend, it doesn’t count Sunday, July 1st, and it doesn’t take into account the phones that people didn’t activate immediately, either because of AT&Ts systems problems that first weekend, or because the buyer didn’t have time right away.

The NYT compares the 142K phones activated in the first 30 hours to the most wildly optimistic estimates of iPhone sales for the entire weekend.

As to his critique, I agree that rendering full web pages intended for desktop browsers isn’t the ultimate mobile web experience, but I don’t think Apple thinks that is the whole story. By making the web at large practical for mobile users, Apple brings more mobile users to the web at large. This creates a larger installed base, which creates incentive for publishers to invest more effort in creating optimal experiences for users of small-form-factor devices. Plus, mobile safari gives them a rich platform for developing that experience. Apple has provided a mobile device with backwards compatibility on the web, while also providing the incentive for 3rd party developers to take advantage of the new features provided by the platform.

More Stupid iPhone Press Coverage: “Disappointing Sales”

Published
by
eas
on July 25, 2007
in Stupid Tricks, analysis, apple and iPhone
. 0 Comments

Apple stock took a 4% hit today because their carrier partner, AT&T announced they only activated 146,000 iphones in the last two days of June

Here is a fine friendly clue. The iPhone didn’t go on sale until 6pm eastern, 3/4 of the way through the first of those days two days. Furthermore, the optimistic estimates from various stock analysts were for the whole weekend, which included Sunday, July 1st. Finally, AT&T had trouble servicing iPhone activation requests over the weekend, so some significant number of iPhones probably weren’t activated until JULY, which would put it after the quarter AT&T was reporting earnings on.

In its second-quarter earnings report Tuesday morning, AT&T said it activated about 146,000 customers who bought the iPhone during those two days.

This number would not include buyers who purchased the device with the hopes to re-sell it over venues such as Craig’s List and eBay. However, the figure seemed to worry investors who had been primed to expect much larger numbers.

Before Tuesday, analysts had been projecting opening-weekend sales for the iPhone of between 200,000 and 400,000 units.

A few projections reached as high as 500,000 units, with analysts citing long- lines at stores and initial inventory figures for the device.Watch interview with Piper Jaffray analyst predicting initial iPhone sales of 500,000 units.

I guess “reporters” need something else to do now that they’ve beaten to death the whole “the iPhone really costs $2000,” because they cleverly included the cost of a two year service plan. Never mind that most iPhone buyers probably already have cell phone service, which would probably run them $1000 over two years anyway. That leaves us with $500-600 for the iPhone, and $480 for the incremental cost of the data service.

Google Acquires ImageAmerica, maker of high res aerial cameras

Published
by
eas
on July 22, 2007
in Google, mapping and strategy
. 0 Comments

TechCrunch reports that Google has acquired ImageAmerica, which makes high-resolution aerial cameras that have provided Google with images for Google Maps and Google Earth, but neither the author of the post, nor the commentors seem to know what to make of it.

I don’t know the aerial imaging market at all, but I think I can make a good guess. There are atleast two complimentary reasons why Google would buy a company like this.

First, Google want’s to deny competitors access to a key technology or service. If this company is the clear leader in it’s market, then they have just denied Microsoft access to a potentially important resource for their own mapping efforts.

Second, Google want’s to make sure they continue to have access to a key technology based service. If Microsoft bought the company instead, they could have cut off Google’s ability to acquire the highest resolution aerial photography, which would hurt Google’s mapping efforts.

Make no mistake, mapping is very important to Google, because mapping is very important to local services, and locality is a very important piece of context in context specific advertising.

Uruguay got Screwed!

Published
by
eas
on July 20, 2007
in General
. 0 Comments

So, it just occurred to me, it would be cool to own the “in.ur” domain, because then you could sell people URLs like “im.in.ur/base/killing/all/ur/d00dz” (if I have to explain to you why this is desirable, you probably don’t want to know).

So, I figure .ur must be the top level domain for Uruguay, and so I set about trying to find out how who the Uruguayan registrar is. Man, was I disappointed! Uruguay’s tld isn’t ”.ur,” it’s ”.uy.” If they controlled UR, they’d be set selling URLs to internet goofballs obsessed with a silly meme and bringing in useful foreign currency.