Looking at Apple’s education announcement and the later statements by McGraw-Hill CEO Terry McGraw that; 1.  school boards would have to pay the $14.99USD “pilot pricing” per year per student and. 2.a paper text book costs $75.00USD per book and is replaced once every five years or so, and that Mr. McGraw expected to make money on “volume”, I had to wonder how Apple was going to knife the publishers? There has to be a plan to take out the publishers, because it is in Apple’s corporate DNA to screw the old school content providers. They almost have to, because the scheme as presented has absolutely no cost savings to cash strapped American school boards, and the prospect of a huge investment into the Apple ecosystem.Here is how I think it is going to play out.  In the US, publicly funded schools are generally overseen by the various states and each county and or city has its own school board that is for the most part funded by local taxes. Apple is going to point out to the state oversight school boards (if the states don’t figure it out on their own) that they can create their OWN textbooks using their own state university resources (ie graduate students) Essentially, once the primary texts are done, its just  a mater of updating and revisions.  For example, the American State of Tennessee has 971,524 students enrolled in K-12. (Think of it as Grades 1-13) The cost of one Apple iTextbook at say $15.00 USD would be $14,572,680. Admittedly, the number includes the entire group of K-12, but, I could see using iPads in kindergarten even if they were not issued to students below 3rd or 4th grade. Assuming 6 courses per student per year and figure 6 textbooks (at least-don’t forget lab books in upper forms)per student, per year, doing the  iMath comes to at least $90USD a year. per student, not counting the cost of the iPads.  However, if the schools create their own content, even at market cost there is about a five year break even for the cost of an iPad. Over, $14 million  US dollars would pay for a lot of work study time to do the basic research and writing of the texts All that has really stopped many state school boards from doing their own textbooks was the economies of scale for for publication.Take out the printing costs and its a whole new match. One the textbook publishers are likely to lose.

Commentators have mentioned that nothing was said about university level textbooks. I suspect not only that was deliberate on Apple’s part, it is where textbook publishers will start feeling the heat. Uni professors love to inset their own spin on the texts they use, even to almost writing their own. In the US, college textbooks are hitting $200USD a book in many subjects. Whilst UK textbook costs are usually 20-50% lower in the US, everyone is looking to cut costs.  Not to mention the potential savings on classes where you get a lecturer who almost never uses the book, but often has other material to read.  In the college setting, an iPad based textbook ecosystem could pay for itself in the FIRST TERM.  The idea of updated content is particularly appealing for technical subjects. From  the university’s perspective, there would not be any real need to issue iPads, students would be expected to buy them.

Where is Apple in all this? Selling a lot of iPads. Where are the textbook publishers? Trying to steal the pudding of the record companies at the home for obsolete business models.

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Is this Apple’s plan for the textbook market?

Thursday, Apple announced the release of iBooks2  and iBooks Author; new and free textbook reading  and authoring tools.  Apple also revealed a partnership to create and sell low cost interactive textbooks with the big three textbook publishers that account for 90% of the sales of textbooks to the first 13 grades of American schools, known as K-12. Finally, Apple expanded its iTunes U uni lecture series to the K-12 market.   Missing from the announcement was any price break for the beleaguered American school system and that it was a closed Apple hardware only system. Also absent was the fact that if you create content with iBooks Author, you have to sell it in the Apple store.

Apple has not indicated any similar arrangement with UK publishers, but as I mention here, that may not be Apple’s scheme in any case. Stay tuned, there may be a bit more to this story as it plays out.

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Apple announces iBook 2 for US schools. Will the UK follow?

Tech blog site Know Your Mobile recently reported that Amazon is getting ready to roll out the Kindle Flame in the UK according to the inevitable “source close to the launch”. The 7 inch tablet has been taking the US by storm, selling for about half the price of the Apple iPad. In fact, the American tech pundits speculate that Amazon takes a loss on every tablet sold.  The reason for this is that the Kindle Fire is really nothing more than a device to read books and watch videos with that just happens to be a tablet as well. Like game console makers, any loss on the hardware is more than made up by inducing customers to buy into the Amazon ecosystem of Kindle format books, Amazon movie and video rentals and even Audible audiobooks.

In all likelihood, the Fire has not been released in the UK as yet because Amazon needed more time to strike the UK content deals required to make the new tablet viable in the UK market and to beef up their UK data center. While Amazon has Loveflims, the licensing  for the Fire would require additional arrangements. Further, compared to what Amazon has on offer for US customers and especially US Amazon Prime customers, Amazon would have to line up far more content to compete with say, Netflix.   For example, I would be quite curious if the Fire supports the Android version of the BBC iApp player or BBC content will somehow be folded into the Amazon player.  Much of the Fire’s content is optimized via use of cached copies of internet pages that are located in Amazon’s data centers, all of which are reported to be in the US.  For the Fire to work effectively it would follow that location based services be served in the UK.

One thing is for sure, the advent of Nexflix in the UK should get Amazon to move things along for the Fire.

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Kindle Fire about to light up in the UK?

The recent flooding reported in Thailand is definitely going to impact the computer hard drive supply for at least the next six months, with Western Digital reporting that as much as a fifty percent reduction in production.  Western Digital’s main facility is mostly under water, and precision tools and clean rooms do not respond well to large quantities of muddy water.  Since many of the component suppliers for hard drive manufactures are located in the same general area, the entire industry will be affected as companies clean up, purchase new equipment and retool.

What does this mean for the consumer? Because computers are assembled largely in the Pacific Rim nations and work on a “just in time” supply basis, expect greater delays in receiving new machines and higher prices. In fact, be prepared to not be able to get certain size drives at any price.  There have been reports that the supply chain is already starting to increase the price on existing stocks.  The smart money would be to go ahead and purchase a new hard drive now, especially the higher capacity drives, even if you don’t expect to use it for a few months.  The other alternative would be to simply wait out the shortage, as often industries that suffer a supply chain problem over build and create excess product and prices drop accordingly.

The growing push toward cloud computing coupled with the price reductions in solid state drives (SSDs), at least in the 120 to 150 gigabyte range may push some PC laptop vendors to offer SSD drives while marketing cloud solutions to access user data. A lot will hinge on SSD suppliers willingness to cut prices further, possibly in exchange for significant order commitments from laptop OEMs to justify ramping up production.  It is a big gap to consider. A 120 gigabyte SSD drives costs anywhere from $99 to $140 USD.  $70 USD can buy one a top of the line two terabyte SATA drive.  For most users, it is not even a question.  Bear in mind while these are retail prices, the gulf between the respective cost per gigabyte is almost prohibitive.

Unless you don’t have a choice, which is where the PC OEMs are or you see a chance to really gain a foothold in the market, which is the opportunity that the natural disaster in Thailand has created for the SSD makers.

We shall see.

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Hard Drive Shortages Lead to Higher Prices-And SSDs in the Cloud?

The big selling point of the iPhone 4S is the addition of the Siri artificial intelligence assistant. In the UK, Siri has the stereotyped English butler synthesized sound. In the US, Siri is voiced by a female synthesizer type voice.  For US iPhones the Siri voice can not be changed. Apparently, part of the reason for this is that  the location based services that are only available in the the US are tied to the particular female voice.  Apple has not confirmed that, nor is it likely to, but based on empirical data from the web the reports are that if the voice is changed off the preset in the US the location and driving directions features will not work. Apple does report that location based Siri services will be available some time in 2012.

It is something of a mystery as to why the feature is tied to a particular voice. Since the location based services only work in the US at present someone at Apple thought it would be easier to tie the feature set to the US default.  Another question that some have asked is why Siri was released while still in beta. First, other than the general spec upgrade, the Siri feature is about the only thing that distinguishes the iPhone 4S from the iPhone 4. Absent Siri and what it promises, a lot of upgraders would have probably held out for the iPhone 5.

The second reason is that Siri is in a beta, and getting data on its use from literally millions of users will help Apple to improve how the product deals with information requests and most importantly, gives the engineers who are responsible for the voice recognition part of the programs priceless feedback from the millions of people Siri has talking to their iPhones. Anyone who remembers the early days of voice recognition recall how the program had to be trained to recognize the users voice.  Apple wants Siri to recognize any voice out of the box, think the “Star Trek” computers. The information Apple will gather will go a long way toward taking the beta” label off of Siri.

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US iPhone 4S users don’t get a cool English butler, but do get restaurant directions

Lost in the meda frenzy over the passing of Steve Jobs was Microsoft killing off the Zune HD. No, that was a mistake its alive. Yes, it is dead. Nope, that was another error. Apparently, at least as of this writing, the Zune HD is in fact discontinued.

“We recently announced that, going forward, Windows Phone will be the focus of our mobile music and video strategy, and that we will no longer be producing Zune players.”

Bear in mind that this is found on the Microsoft’s Zune support page. You can find a big  BUY NOW button at the entry for the Zune HD. Following that link takes one to the American retailer Wal-Mart. The Zune UK web site has nothing on offer, nor does Amazon. Further complicating matters is that whoever runs the Twitter account for Zune support seems to have missed the memo as well.

The story here is not so much that the Zune HD has been discontinued, its not surprising as sales have been lackluster at best and Microsoft wants to steer users to Windows Phones as their all in one media consumption device, but that the announcement was so badly handled. It is quite obvious that the left hand did not know what the right hand was doing here. The timing was also interesting in that the original announcement was made the same day that Apple announced the iPhone 4S.  That was a good move on Microsoft’s part as the ending of the Zune HD was pretty much lost in the iPhone coverage.  However, the “red light, green light” of the days after not only ruined that, but given that journalists were looking for something to move on from the death of Mr. Jobs, Microsoft’s indecision has become more newsworthy with each change in direction.

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“Its dead Steve”

The worldwide press is saturating all media with the death of Steve Jobs, who passed away Wednesday from complications of pancreatic cancer. Rather than repeat all the typical reporting of his passing, it is better to focus on a celebration of his life and his many, many accomplishments that has shaped and changed the world everyone lives in today.  The list is long, the Apple I, the Apple II, the Macintosh, the Lisa during his first stint at Apple. During his time away from Apple he founded NeXT Computing and created Pixar out of pieces that he bought from LucasFilms. Pixar under Jobs became the gold standard for animated films, and is widely credited as revitalizing the genre and the fortunes of Walt Disney Studios when Disney subsequently purchased Pixar for almost ten billion dollars.

All this seemed to be only a prologue for the return of Mr. Jobs and what was arguably his and his teams greatest contributions to the way the world consumed its music, media, and used its phones. Starting with the iMac, Mr. Jobs and the people he surrounded himself with, went on to revolutionize the way we consume music, the iPod and the Apple Music Store.  Starting in 2001, the iPod completely changed the music industry and in all likely hood stated the death spiral of music CDs.  Moving from that the iPhone in 2005, and then the iPad in 2009. It is easy to forget that Apple did not found any of those product categories. Music players, smart phones and tablets all came about well before Apple entered the scene. The tribute that should be rendered to Steve Jobs and his team was that in each product area, Apple came along and arguably perfected the category.

What are your thoughts of your experience of Apple and thoughts on Steve Jobs?

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A Celebration of the Life of Steve Jobs

The Internet has been abuzz with rumors that Amazon, fresh off its Kindle announcements is poised to buy the bones of Palm from HP. Those bones would be the web os operating system and the substantial amount of patents Palm obtained during happier days.  This is very unlikely to come to pass for several reasons.  First, Amazon has spent a lot of resources creating the Android variant that the Kindle Fire uses. Second, Amazon has also expended a fair amount of coin in creating the Android App store that directly competes with the Google Android App store.

If the rumor does happen to be true, the reason would be little comfort to the web os faithful as such a move would probably be made to obtain he intellectual property and be able to cannibalize web os features for the forked Amazon version of Android. While Jeff Bezos, has proven time and again that he is willing to make unusual moves, Amazon seems to be pretty well invested in their customized version of Android with the App Store and Silk, although there might be some merit in using web os in a European only version of the Fire to get around privacy problems that seem to be preventing the Flame being deployed in the UK

On HP’s side, if Amazon offered say, $1.6BN USD for everything and took over legacy web os support. HP would more than likely jump on that. Its quick money to bolster theirQ4 earnings, and further lets them save having to write off some of the wind down costs.

If Amazon did buy web os, don’t be surprised to see Todd Bradley exit HP, quite possibly for Amazon. Frankly, since HP is likely to not spin off the personal computer division at this point and Mr. Bradley, who has been courted by the likes of Intel for their CEO sport, but twice passed over for the top job at HP, he is getting ready to go elsewhere anyway.

Time will tell, but I would not bet the rent money on it coming to pass.

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Amazon buying web os?

A few days ago Jeff Bezos unveiled three new additions to the Kindle family. However, it looks like two of them will not get to visit England’s green and pleasant land, not to mention anywhere else in the UK or the European Union any time soon.  Amazon is not saying why only the new entry level Kindle is getting a UK debut, but the reasons seem to be due to a mix of commercial and governmental roadblocks centering around the Silk browser accelerator, the “X-Ray” feature in the reader application, and content rights.

Two of the key attractions of the Kindle Fire are the ability to consume Amazon instant video and movies and the Silk browser which provides for a cloud based accelerated browser experience.   Right now Amazon has an extensive library of streaming movies and television shows that can only be streamed in the US.  Until such time as Amazon is able to license worldwide rights, the Fire loses its allure as a content consumption device.

The main barrier to a UK and EU release of the Fire is the superfast Silk web browser.  Amazon makes Silk work in part by acting as a trusted “middleman” with browser information taking web site data and optimizing it for the Fire. In fact, you will actually be getting a cached version of the web content you request hosted from Amazon’s servers that has been optimized for the Silk browser.  A necessary part of this process has to be the retention for some period of time of individual browser data.  That period of time is specified in Amazon’s terms of use as thirty days for web data.

Anyone who uses Amazon regularly should not be surprised that the company keeps information on its users, as the customer suggestions have to come from somewhere.   The issue here is a conflict between the European Union’s privacy regulations and the United States anti-terrorist inspired Patriot Act. Even if Amazon did its best to insure that any data derived from any EU Kindle Fire resided on EU based servers, as a US company, Amazon would be obligated to turn over any information that could be traced from an EU tablet to a US data center. Apparently Amazon is not willing to risk possible EU sanctions for privacy breaches so, for now at least, the Silk browser will keep the Fire firmly on American shores

What about the Amazon Touch? The situation here is not nearly as clear, but in all likelihood has to do with the “X-Ray” feature.  When reading on the Kindle Touch, one can, according to Amazon;

“… explore the “bones of the book.” With a single tap, readers can see all the passages across a book that mention ideas, fictional characters, historical figures, places or topics that interest them, as well as more detailed descriptions from Wikipedia and Shelfari, Amazon’s community-powered encyclopedia for book lovers. 

Amazon built X-Ray using its expertise in language processing and machine learning, access to significant storage and computing resources with Amazon S3 and EC2, and a deep library of book and character information. The vision is to have every important phrase in every book. “

The fact that Amazon uses its S3 and EC2 storage and processing  resources coupled with the policy of Amazon to retain notes and marks for Kindle books probably has similar privacy issues as Silk does. The question does remain as to why a UK/EU version of the Touch without the x-ray feature can’t be sold. Again, this could be a digital rights issue, as American copyright law has a “fair use” exemption that can allow for access to other literary resources that is unavailable in the United Kingdom.

Amazon could make all this clear, but for right now continues to remain mum.

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Why is the UK being left out of the Kindle Fire and Touch?

The most one can say for Leo Apotheker at this point is that he lasted longer at HP than he did at his prior gig at SAP. After less than eleven months on the job, the HP board sacked Mr. Apotheker stating that HP needed an executive who could execute on the details.  The fact of the matter the Apotheker reign, brief as it was saw several executions:

-the Web OS hardware and smart phone business, while making vague statements about doing something with the web os operating system.

- business confidence in the Personal Systems Groups’ ability to sell and support  personal computers and printers was executed by the pronouncement that HP was looking at either spinning off or selling the PSG.  Businesses put a hold on, or canceled outright, purchasing decisions and opened the door to inroads by Dell and Lenovo to take lucrative purchases from HP.

-the execution of the purchase of Autonomy, a UK software company for well over its market value. In fact this purchase was the cornerstone of Apothekers’ stated vision of turning HP away from hardware into a software and services group, much as IBM did in late 2004. However, IBM did not telegraph its intentions before a buyer was found and certainly did not tell industry analysis’s that they wanted to dump the business because it was not making the kind of profits HP wanted to see.

-finally, Mr. Apotheker  presided over the execution of over forty percent of HP’s share value.  When a publically traded company’s share value tumbles like that, shareholders want either a human sacrifice or new leadership.

Lest anyone accuse the HP Board of slipshod incompetence, the board quickly threw Leo out of the sled and to the wolves. Or so it appears. More on that later. The HP board them embarked on an exhaustive search for a new CEO. Provided that taking a quick look around the boardroom and noticing that board member Meg Whitman was not going to be governor of the US state of California after all and was at loose ends was exhausting.  In addition, ex-Oracle COO and non-executive chairman of the HP board, Ray Lane became the Executive Chairman of HP. In plain English, that means that Mr. Lane would become involved in day to day corporate decision making, rather than the broad oversight that most corporate boards exercise.

In subsequent interviews, it has quickly become apparent that Mr. Lane may well share at least equal power with Ms. Whitman.  Interviews and communications to HP staff have for the most part been of a joint nature and Ms. Whitman seems to be adopting more of a communicator role, while Mr. Lane does the heavy lifting as it were.  There may well be very good reasons for this. Ms. Whitman, former CEO of Ebay is widely seen as having little tech experience but a lot of consumer expertise.  HP desperately needs to develop a consistent message and execute on it.  This may be the board’s answer.

As for the timing of the termination of Mr. Apotheker, apparently Mr. Lane has admitted in interviews that the wheels for that decision started turning over eight months ago. Which raises the question, which has been asked quite often, what kind of vetting process was used to hire Leo in the first place? According to the New York Times, not much as it was reported that most of the board voted to hire Mr. Apotheker without ac tually meeting him. Since the gentleman in question was terminated after a bare seven months as CEO of SAP, reasonable people would think that a personal meeting was in order. Of course, Mr. Lane is quick to point out that this is not the same board that hired Apotheker, that there have been eight board members replaced since that decision was taken, including Mr. Lane and Ms. Whitman to name two.

What does all this mean for HP? First, innovation is going to suffer, as anyone who can is going to be looking for more stable pastures. Second, it is by no means certain that HP’s personal hardware business will be able to recover from the doubt and uncertainty.   Finally, there is an excellent chance that if things do not turn around fairly quickly at HP, Ms. Whitman may be the next one to walk the plank.

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More drama at Hewlett-Packard