After what many would assume would be the lowest point we'd expect to hit in the Dow, hitting the 7,000 mark for the first time in ages, I'd beg to differ. Long time bell-weather of economic resilience, consumer and retail spending in the holiday season is in jeopardy. With BestBuy in anguish, Circuit City filing for bankruptcy and holiday sales expected to slow for the first time in 25 years my prediction is that we have not yet hit a bottom in economic angst. All the bears need is to see the actual results of retail spending to drive the Dow down below to 1980 levels, and it's shaping up to go that direction given the fact that even American Express is seeking protection by converting to a bank to take advantage of the TARP scheme. Maybe every company with debt should consider becoming a bank... Still, the market overall is going to psychologically be swayed by consumer fears about the upcoming retail season. I've yet to see any indication of how the federal financial bailout plans are doing anything to protect the consumer who is ultimately paying the bill twice, once in lost homes and second in tax hikes to offest the debt. In what could be one of the greatest acts of corruption-fueled-socialism in our modern era, the bailout plans have been kept Guantanamo secret for one reason: the administration doesn't want anyone to know how the money is being used, because in reality, its a raw deal for average citizens. The financial institutions are paying themselves, and the government is ignoring the consumer.I'm still shocked how in a government so god-fearing and anti-socialist that more citizens haven't raised their hands to comment on the nature of the bailout as being completely socialist in it's nature. Even more troubling, is that it is practically an dictatorially decided, purely elitist-benefiting move that is socially funded. Read: the rich stealing from the poor. This is taking the government back some 600 years to the level of paying tribute to the royal kingdom. It escapes me how the government can endorse unsafe financial practices in the first place, and then further endorse those actions by providing more cash to the institutions responsible for the meltdown. In effect, the government is rewarding the actions of shady executives meeting at luxury retreats and ignoring those with true problems: the average consumer facing the reality of the downturn. Where are the foreclosure freezes? The interest rate freezes? By siding with the banks, it's as if the government is blaming the uneducated masses for being conned into junk debt. It's everyone's responsibility to be an educated consumer, but in extreme circumstances as we are in now, if the government doesn't side with the people, who will? And, what will happen in the next bubble in seven years? What scheme will Wall Street use to shill the moms and pops around the country next time? It seems like people never learn to distrust the Street.

Wow. I actually closed a deprecated savings account via a simple, secure mail message I sent a week ago. I notified them in the email I didn't need any confirmation at all. 2 days later, the account was closed. God bless the fact that customer support is finally embracing the internet. Just think how long that would have taken 3 years ago... I would have had to come back to the branch in person; not an easy task when you live 3000 miles away. Amen. Two thumbs up.

Besides almost hitting $120 in intraday trading thanks to the news, AppleTV now has some features that would bring it (barely) on par with a modded old-school Xbox: it can play YouTube videos!

Sorry Apple, I'm all tough love. It just means I care.

Amen to this article on the market

segmentation of smartphone users into discreet pools of consumer and business demographics. I posted way back that BlackBerry wouldn't make a consumer friendly phone, and although they did in the Pearl, which has a camera and MP3 player, there's no way it could touch the iPhone on the digital media capabilities. Don't get me wrong, I love my Pearl, but I do so because it's my "killer work email smartphone with a camera and MP3 player on-the-side" workhorse. And, as suspected, iBankers haven't been given the liberty to choose the Pearl's slim form factor option as a corporate-sponsored phone because it lacks the QWERTY keyboard. If you haven't noticed, QWERTY spells PRODUCTIVITY ON MY DIME. Sorry Goldman interns. Now, key to Apple's success in this venture is to make a killer email integration. I can't emphasize how important this step is. Without it, the iPhone is not a smart phone. I would imagine that Apple is going to be smart enough to recognize the demographic split as mentioned, and create seamless integrations with GMail and Yahoo, that leverage a UI that is iPhone specific (read: NOT GMail Mobile). At the same time, it will draw competition from RIM to enhance their media solutions, but this is inevitably in the pipe. Obviously a fool's bet to say that RIM will outplay iTunes, et al. but they need to improve just to stay competitive. However, that doesn't mean that Apple couldn't move into the business user space, but they now would have to replicate BlackBerry server functionality, and that's not in Apple's ballpark to focus on B2B services. Personally, I wish that RIM would get bankrupted by patent lawsuits and then once that's cleared, Apple could make a hostile takeover while RIM is cashless... cruel, but man, how perfect a device would be born out of that fire. No for the Boodos. WHAT IS UP WITH APPLETV? This product has got to be the weakest modern Apple product launch to date. Just when Apple seemed to be poised to  be the only  big player capable of preventing Microsoft from taking over our living rooms, internet television and subsequently... the world; Apple dropped the ball! Apple failed on this version of AppleTV because:

1. It doesn't stream videos from your desktop...
2. It doesn't stream videos from your desktop?
3. It doesn't stream videos from your desktop!?!?!
4. Doesn't let you purchase from iTunes
5. ....

Long term, Apple will correct these, but it's funny how analysts have just figured out how pervasive the internet TV

revolution could be on marketing, advertising and literally up-end mass media as we know it... because while Apple is just scratching this surface with AppleTV vision, guess what, Microsoft already has the hardware, distribution mechanism and loyal base of installed users. It's called the Xbox 360, and it does everything that AppleTV doesn't do yet .... today. I am utterly amazed by how ingenious the Xbox team are in creating this internet TV settop box, hidden and originally sold in a video game console's skin, that  has silently and subtlety made bill Gates the next Ted Turner or Rupert Murdoch. I should also point out the extreme luck that enabled this clean sweep. Sony failed to maintain their title of console king by absolutely blowing the PS3 campaign, from just about every perspective from design to operations. This opened the door for Microsoft to saturate the market, err, steal  the market from Sony. And now, Apple just helped by coming up short on the typically stellar launch of the AppleTV. The paradigm shift that traditional print media faced when the internet grew as a medium is a drop in the bucket, ad -dollar-wise, compared to the disruption the internet will bring by eclipsing TV. That's like hockey taking over major league baseball as the top sport in America. Again like the RIM quandries for the iPhone, you can parallel the differentiators for Microsoft XBox 360 and AppleTV. Apple has the content and licensing  model in iTunes, where Zune and whatever unheard of DRM platform Micrsoft has is infantile (can you smell a partnership?). On the other hand of the corollary, Xbox has the added benefit of appealing as a console to young gamers as well as a perceived cost / value benefit in that it serves as the dual use internet enable home theatre device. AppleTV, not so much on serving multiple age groups. Expect them to use the  iPod / iTunes community as leverage into the youth demographic. I end with a quote that I actually agree from Bill Gates (or I should say whatever visionary in his digital staff prepped him for) : "I'm stunned how people aren't seeing that with TV, in five years from now, people will laugh at what we've had."

Yes. Yes. YES, the iPhone is finally out. Nearly the entire IT industry came to a grinding halt as Steve Jobs announced the iPhone officially. Alongside some of the moust highly receptive praise from the analysts, comes the near certain barrage of doubts. We all know that fame begets criticism, and I'd like to share with you a piece from one of my favorite industry rags and stomping grounds of crazy-man Jim Cramer, The Street

. As much as I'd like to send out a big NYC boo-yah to Kaas, I've found several shortcomings in his argument. The vast majority revolves around a very myopic view of the product lifecycle, and it's phases. Just like enterprise software roll-outs, you cannot expect everything to make the first iteration, not just due to bandwidth limitations, but it's not practical from a feedback perspective, as you need to hedge your bets and adjust your strategy based on the success of each phase. High selling price spells limited marketing potential. An 8GB iPod nano and a high-end handset with similar features to the iPhone would retail for under $300, so the planned pricing implies a 100% premium for device integration and "the coolness of all things Apple." First, I'm not sure where he's getting his numbers. I think "similar features" is a stretch, the size of the Grand Canyon. Industry experts (you know, consumers?) agree that the benefits of usability are priceless. I don't know of a single phone that is more usable than the iPhone. Granted, the iPhone is not cheap - for now.  Like any product who's price is governed by evolving hardware, you're going to see prices fall - quickly. It's no guess that the highly proprietary (read: low production volume, demand and hence high cost) LCD touch screen is taking the lion share of the handsets cost. Expect this price to halve by next year. This is an old concept, and I won't waste time repeating it. Just look at the evolution of iPod pricing over the years. 2. Why not target the corporate market? One word: Blackberry. The last thing Apple needs to do as an emerging entrant in a completely new market, is make it obvious to the current market leader, that its going for it's throat. I blogged on the business vs. consumer segmentation prospects for the iPhone earlier, and still feel that Apple is not yet poised, or flat out even interested, in the business user sector. Microsoft and the stodgy B2B crowd usually beat Apple to the punch, simply becuase I don't think Steve Jobs and the rest of the Apple bunch love to serve that market, they love consumers, and each market has a separate set of expectations. Now, that's not to say that Apple won't ever go there. However, I don't see Apple recreating BlackBerry type functionality. I would love to see them partner with Google Office. Just a wish, here. More post upcoming on this topic.

I guess you have to be careful what you wish for. My buddies at Engadget report

on a quote from the Q3 earnings call I listened to yesterday from CFO Peter Oppenheimer:

"As regards cell phones, we don't think that the phones that are available today make the best music players. We think the iPod is. But over time, that is likely to change. And we're not sitting around doing nothing."

Not a big surprise to the Apple following, but this is a considerably firm public statement regarding direction from management, which for Apple, is rare.

On a side note, Apple stock rallied in after hours trading, making for aboot a 13% gain in 2 days. Incidentally, I bought Apple stock at 60 and was a inch away from doubling down when it hit 50 a share. Had I been a more seasoned investor, I think I would have taken the plunge. At least its good to see that my fundamentals are inline. Next time!

We have yet to be offered a true contender for a highly consumer-friendly MP3 Phone. Apple needs to do this. And they need to get on this one... now. I'm really disappointed that Motorolla beat them to the punch with the V3 RAZR.  Playing MP3's on your phone old hat? Absolutely, Motorolla's V3 RAZR is not new, but it combines an already market-proven phone with a convergence idea that is golden. It trumps Cingular's play with iTunes, since its not iTunes that's going to sell cell phones. iTunes didn't sell me, or anyone, on the iPod at the first glimpse. Sarcastic voice, fist-shaking: "It's the design and interface of the product you fools!" The marketing, people, the product marketing... not tech. Someone please tell Microsoft that in regards to their magic WiFi bullet. I swear to god, the white earbuds have done more for capturing initial audiences than any other feature of the iPod, as it is immeidately recognizable. It's the Bently logo on your MP3 player's hood. Will the V3 dominate? I'm not certain that 1 commercial of a dude on a treadmill is going to rock the USA. Trendsetting consumers don't pay attention to cell phone commercials, becuase, well, they come off like car commercials, and we're all trained by the age of 3 to completely ignore those on a subconsious level. We do live in America, right? What makes people buy consumer electronics? By and far, things that are adopted by the uppoer crust as having adequate cool factor. Edit: Schomer raises a good comment about iTunes solid synchronizing capabilities having sold him on the sexy iPod (two points for alliteration?). Granted that this is a good thing, I think this more or less fulfills a customer's expectation more than exceeding one. I think grandpa would expect the synchronizing feature to work seamlessly, it's just such a fundamental requirement to any nontechnical person who can't appreciate the engineering feat. I think Apple did however exceed everyone's expectations on making MP3 player's and other tech paraphernalia sexy, which is critical for consumer products. I guess the real question is to counter Schomer's point, would the iPod have taken control of the market to the extent it has if it had iTunes, but had as lackluster an appearance and usability as an iRiver? I couldn't disagree more Market Trendsetting There's something to be said about convergence and the market forces... I know it's not as big a deal to most middle-Americans who can stuff several items in their pockets if only for the morning and afternoon walk down the driveway to their car. But for urbanites on the move, the thought of being able to haul around one less piece of techmass in their suit pants on the subway is priceless. Elitest, yes, but priceless. ;)  And we know from the cultutal dynamics of capitalist nations that the elite trends are often mimicked by the masses.

So, where are the problems for the V3? Not having a true competitor, I think the V3 will continue the bestselling trend of the RAZR. But the tipping point question is:

Is Motorolla really monetizing convergence as much as an Apple inspired iPhone would?

In this case, the consumer benefits more than the corporation, in the long run. Only Apple has the potential to benefit from convergence to such an extent to build synergies with music ordering, as V CAST is a joke compared to iTunes. I don't think there's any customer loyalty being built from a lifestyle standpoint. If someone comes out with a smaller, sexier phone and a challenging cell provider has equivalent support, I don't see a compelling reason why the elite will stick with the provider (assuming that cell phone coverage becomes a commodity over time, which it will. Go to Europe for proof, this is is not a long term competitive advantage.)

Grand Unified Lifestyle Theory

Now, on the other hand, if you tie in the lifestyle choices, the marriage to iTunes for your pod-casts, music, etc. you create glue. You stick the consumer to your service because there is a value add outside of the hardware itself. Obviously, this is highly dependant on what Apple can bring to the table in terms of an integrated electronic lifestyle. Given that it's common for consumers to not have a ShackleBerry, the lack of Office features on a mass consumer phone developed by Apple is not troubling. I'm of the faith that there will always be a divide between work and play computers, evidenced by console gaming vs. business machines.

Can Microsoft compete in this space? Sure, they can provide competitive forces, but given their recent track record of failing (read: Microsoft Live) all they will do is keep Apple on it's toes, perfecting their existing model, while Microsoft realizes they still operate like a enterprise software vendor. Untill Microsoft develops core values that recognize (and actually cater to ) the consumer mind, I think they're SOL.

I think what's more intriguing is the long term prospect of adopting a more (gasp) Web 2.0 mindset when developing consumer products. No, I don't think WiFi is here yet, we need better data plans in the US. But the prospect of incorporating aspects of iLife and iTunes on your cell phone are promising. I think if Apple can leverage this trend by realizing that they cannot limit to iLife, but instead should work this angle to leverge best of breed web applications, much in the same way Vox has (shameless plug!)

Why not  have Flickr house your cell phone wallpapers? Why not have your cell phone photos immediately sent to Flickr instead of sitting on your phone memory? Why not support mobile photo/video blogging (really support it, that is)?

Failure to Launch

As far as failing to move on the iPhone, who knows why. I do know that it's unfortunate that Apple didn't partner with Motorolla... just think of a white, iPod-esque RAZR as the Stage 1 iTunes phone. Why would this be better than Cingular's push? Well, the phone Cingular pushed stinks... it's an outdated clamshell. That's not iPod-sexy enough to make someone change cell phone plans and jump contracts, not by a freakin' mile. For now, I guess we'll have to sit on our hands, as perhaps Apple is focusing on their Windows MediaCenter counterpunch. Controversially enough, I'm a big fan of MediaCenter, despite the occasional freezing up, that is, of course. :)