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So Far, Rivals Can’t Beat iPad’s Price

So Far, Rivals Can’t Beat iPad’s Price:

Analysts and industry experts point to a number of reasons. Primarily, they say, Apple’s deep pockets — a staggering $60 billion in cash reserves — have allowed it to form strategic partnerships with other companies to buy large supplies of components, for example, in expensive flash memory. By doing this, the company probably secures a lower price from suppliers, ensuring a lower manufacturing cost.

 

At the same time, they say, Apple has sidestepped high licensing fees for other items it needs, like the A4 and A5 processors within the iPads. Those parts, designed in-house at Apple by a company that Apple bought, are among the costlier components needed to make a tablet computer.

Mr. Sacconaghi said Apple also could subsidize some of the cost of building iPads with the money it makes through its App Store, which generates more than a billion dollars each year. This means that Apple can take a lower profit margin on the iPad, 25 percent, than it does on, for example, the iPhone, which can yield as much as 50 percent profit.

Yet another advantage is Apple’s wide net of its own global retail shops and online stores; for customers, this means they can avoid a markup from a third party like Best Buy.

Although other companies have some of these factors in their favor, no one but Apple has all of them.

 

(Via Business and Financial News – The New York Times.)

Add the fact that the hardware and iOS is implemented well, delivering the Apple “experience,” and you have a tough competitor.  It’s not that HP and Samsung can’t compete. It’s just that they have to make different design decisions than they’ve been making to date.  And given the constraints they are under, they have their work cut out for them.

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In a Galaxy Tab Far, Far Away

Samsung panics over iPad 2, may cut Galaxy Tab 10.1’s price:

Samsung was caught off-guard by the iPad 2 and may have to rethink its strategy for the Galaxy Tab 10.1, the company’s executive VP of mobile Lee Don-joo said on Friday. The Korean company had planned to charge a premium over the original Galaxy Tab, which already cost nearly as much as a larger, first-generation 3G iPad, but wasn’t certain it could do so now that the iPad 2 was roughly matching it in features for the same $499 price. Lee didn’t tell Yonhap what pricing was to have been, but a 16GB, 3G Galaxy Tab costs $600 in the US.

“The 10-inch [tablet] was to be priced higher than the 7-inch [tablet] but we will have to think that over,” he said.

(Via MacNN | The Macintosh News Network.)

I bet they do.  I never understood the Galaxy Tab, esp. in a world obsessed with tech specs.  After all, why would I pay more for a smaller tablet?  Now Samsung in in the weird place of charging much more for the same sized tablet minus the Apple experience to justify it.

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Paid not to Understand

Nintendo chief slams iPhone, Android for devaluing games | Electronista:

“Iwata’s comments also sidestepped many of the factors that often force traditional game prices upwards. Nintendo despite its Internet services is dependent on cartridge-based game sales at retail, and its developers have to both account for manufacturing and for the cut demanded by retail stores. Android and iOS developers are only bound by the revenue split with Apple or Google and often have much reduced overhead. A typical 3DS game in the US will cost $40 where most smartphone-class games cost $10 or less, even when they represent direct ports of DSi titles.”

(Via MacNN.)

Iwata is near delusional in his comment about producing value.  His company monetizes value, specifically the value is in the bundle of the game plus the device that runs it.  Apple and Android have simply made it far more difficult for Nintendo to monetize the part of that bundle, i.e. the game, it has in the past.  Nintendo was able to lock the game up in a cartridge to control how the end consumer can enjoy the value that Nintendo “creates.”  Apple and Android destroyed that by using the Internet as distribution rather than expensive physical cartridges in retail stores.  And we’ve seen this movie before with CD’s and now DVD’s.  (No wonder Apple is no rush to get into Blu-ray.)

Upton Sinclair said, “It is difficult to get a man to understand something when his salary depends on his not understanding it.”  But in truth Iwata is paid to understand and it’s sad he doesn’t.

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Malware on Android Market

Malware on Android Market:

Aaron Gingrich, for Android Police:

Openness — the very characteristic of Android that makes us love it — is a double-edged sword. Redditor lompolo has stumbled upon a perfect example of that fact; he’s noticed that a publisher has taken ‘… 21 popular free apps from the market, injected root exploits into them and republished.’ The really scary part? ‘50k-200k downloads combined in 4 days.’

Uh-oh:

There’s another APK hidden inside the code, and it steals nearly everything it can: product ID, model, partner (provider?), language, country, and userID. But that’s all child’s play; the true pièce de résistance is that it has the ability to download more code. In other words, there’s no way to know what the app does after it’s installed, and the possibilities are nearly endless. [emphasis mine]

(Via Daring Fireball.)

Do I even have to say it?

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iPad 2

I was not that impressed with Apple’s release of the iPad 2.  It was truly anti-climactic what with all the hype and hyperbolic speculation bandied about ad nauseum.  I’ve said the original iPad is a game-changer and was saw a bright future for it at the outset.  I was not wrong.

But the iPad 2 is not a game changer.  It is an evolution of an already strong product, a refinement in point of fact.  It’s lighter, faster, stronger and includes features long predicted to make it into this revision.  FaceTime cameras, for example, have ben expected almost as long as the original iPad has been out.  It’s product positioning relative to the MacBook, esp. the 11-inch Air, has been refined.  No doubt it will be a big seller as its predecessor.   Ironically, the coolest innovation is not strictly within the iPad 2 itself but in it’s cover that doubles as a stand.  Can’t wait to see what the iPad economy comes up with for that magnetic connect.

I was disappointed that Apple stuck with 3G for a couple of reasons.  One, on the macro side their analysis of how 4G is playing out is like mine: Betamax vs. VHS or Blu-ray vs. HD-DVD.  We don’t know whether WiMax or LTE will be the Blu-ray of mobile broadband.  Two, if Apple isn’t charging ahead into 4G it probably means a industry standard that would allow for cheap (and this is important) carrier agnostic components to manufactured is not around the corner.  So 3G it is.

All-in-all ho-hum precisely because this is what we’ve come to expect from Apple.

 

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Time to Wake Up and Smell the Antitrust

Time to Wake Up and Smell the Antitrust:

“If it walks, talks, acts, and smells like a monopolist, odds are it’s a monopolist. And if this monopolist is earning extraordinary profits, and if there is even the possibility that this monopolist might be using those profits to restrain trade, then perhaps the Sherman Antitrust Act is not working. The possibility of online monopolists demands better theory than ‘there are no barriers to entry online’ and purported monopolists need better defense than ‘trust me.'”

(Via Eric K. Clemons.)

Clemons’ post elicits responses from Google within hours.  That should tell you something.

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Facebook Adds Share Capabilities To Like Button

Facebook Adds Share Capabilities To Like Button — Facebook — InformationWeek:

“The move could reduce user confusion over which button to use, especially if Share is dropped in the future. However, the move is more widely viewed as a positive one for advertisers and content creators who can expect to see page views increase as referrals drive traffic to their sites, according to several published reports.”

(Via InformationWeek.)

It increasingly appears to me that Facebook continues to fool users into revealing more and more information by getting them to develop habits then suddenly changing the rules and behaviors of their site after the habits are entrenched.  Not good.

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G.M. Prices Its Shares at $33 in Return to Stock Market – NYTimes.com

G.M. Prices Its Shares at $33 in Return to Stock Market – NYTimes.com: “Fulfilling an implicit mandate from Treasury, the largest allocation of G.M. shares has been made to institutions representing American retail investors, these people said. The move was meant in part to blunt criticism that taxpayers would be cut off from what company and government officials insist was a potentially big rise in G.M. shares. (Several of the people involved in the offering said they expect to see a potential 10 to 20 percent jump in the share price on Thursday, typical for an initial offering.)”

(Via The Daily Beast.)

If you are going to do this, at least do it right.  So far so good.

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RIM Protects its Core

RIM pulls BlackBerry app Kik while Apple, Google OK | Electronista:

“However, some have speculated that RIM was primarily concerned that Kik is too similar to BlackBerry Messenger and is a competitive threat that would reduce the incentive to keep using BlackBerries. The app has been available on Android and iPhone devices and, if popular, could make it easier to switch platforms.”

(Via The Macintosh News Network.)

Exactly.  It would be foolish for them to give BBM addicts a road to recovery.