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?

Wanting to hook up Netflix to the new flatscreen? Well the job just got easier with the announcement of the debut of the Roku box in the UK and Ireland today.  Currently available for preorder only through Amazon, the little box that has allowed so many in the US to cut  cable or satellite bills by streaming content over the internet, can now spread its lie in inducing goodness here as well.

Roku LT

Roku will initially offer two models from its current lineup, the Roku LT at £49.99  and the upmarket Roku 2 XS at £99.99. Other than price, the main difference between the two products is that the LT does not have external storage options and is limited to 720p. Nor is it Bluetooth capable. The Roku 2 XS supports, true HD 1080p, has a slot for an miniSD card, Bluetooth, and both Ethernet and USB ports.The XS also has an enhanced game controller to get your Angry Birds on.  Because you don’t have enough addictive time wasters in your life, each set also has a free copy of Angry Birds. Both devices support b/g/n Wi-Fi.

Anyone familiar with the history of Roku would not be surprised by the introduction of the tiny player  following hot on the heels of the Netflix rollout. Roku started out as a division of Netflix, tasked to create a simple and easy to use device to stream video content over the internet to subscribers TVs, which was released in 2008. The group was quickly spun off as Netflix realized the need to be on as many products as possible and the creators of the Rouku box realized there was a lot more content out there than Netflix. The result was a win-win, with Netflix applications on the Sony Playstation 3, Nintendo Wii and Xbox 360, not to mention many of the newer SMART TVs and Rouku becoming the streaming device of choice for over 2.5 million users, with access to over four hundred channels in the US, including HBO GO, Crackle, the Wall Street Journal, the TWIT tech network, and many music and international interest channels.

The press release issued today showcased Netflix the Wall Street Journal, Ultimate Fighting Championship, MLB.com, and  games such as Angry Birds.  The movie service Crackle will be available in the UK but not in Ireland. Music is also a bit thin on the ground, with Tunein and Classical TV on offer. In fact only forty channels were announced, although Roku officials were quick to add that they expect more channels to be added prior to the expected launch date in late January.

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Roku Players set to land in United Kingdom and Ireland in late January

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 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?

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

Microsoft gave users and developers many things to think about at the BUILD conference in California this last week.  One that is getting a lot of traction is the idea that Microsoft will be developing a Metro style, touch friendly version of Microsoft Office that will run on tablets. Metro is the name of the user interface language used for Windows Phone 7, and after BUILD, seems to be the direction that Microsoft Windows UI is heading going forward. A lot of analyses are saying that if Microsoft can follow through on the promises made to developers at BUILD, then they will have an OS ecosystem at least on par with Apple.

In fact, Microsoft better be working on a tablet friendly version of Microsoft Office. Office is probably the second largest source of revenue after Windows itself and played a large part in establishing Microsoft’s global dominance.  Microsoft Office has become the default bundled business productivity suite for concerns from mom and pop stores to FedEx and JP Morgan.

However, as tablets become more popular, Microsoft is going to have to rely on a “Metro Office” if it expects to have a chance at blunting the hold Apple has on the tablet market. Apple has a self contained ecosystem of products and apps and right now is so far out in front it is rumored that Apple is delaying the introduction of the iPad 3, because in essence it’s lapping the competition.  Microsoft seems to be adopting a similar approach through its co opting of Nokia to [produce Windows Phone based handsets and the direction being taken with Windows 8 and Metro.

Microsoft has made a lot of exciting promises with Windows 8 and Metro.  Microsoft also has a bit of reputation for talking about new things that never see retail shelves.  However, the last time Microsoft had the kind of competition it is facing now from Apple and Google for operating system market share Bill Gates was writing code for the company and IBM was selling PCs.  In order to succeed, Microsoft needs its star business tools ready for the tablet generation.

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Rumors of Microsoft Office on Metro Tablets? It better be a fact

Amazon has been widely touted as the killer of bricks and mortar shops but apparently they have found a way to co-exist.  It has been widely reported that the Internet purveyor of all things shippable has struck an agreement with mall operator Land Securities to host lockers, much like one finds in rail stations and airports, that will serve as a pick up point for parcels that will not fit through mail slots. A similar service is being tested in the US with quick shop chain 7-11 acting as the host.

The UK lockers appear to be marketed as a matter of convenience for customers who don’t have to take off work to wait for large gadget parcels, whereas the US trial seems to be based more on concerns one might have about leaving parcels on the doorstep, which is common in most parts of the US. It is believed that one wanting to take advantage of the service will be given a code to be entered at a keypad and the locker with the customers parcel will open.

It is a bit ironic that a company that’s business plan has had the effect of shuttering many booksellers and other small businesses is now using retail malls as pick up points for their deliveries.  Retail Week reported that the first locker is in place at London’s One New Change and had pictures of the installation.  Amazon has declined comment to the media on the matter.

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Amazon bringing lockers to the UK

CNET reported earlier this week that Apple has lost another prototype iPhone. Losing the phone has become old news and the twists and turns of the story have overshadowed the disappearance of the  phone itself, with the San Francisco Police Department (SFPD) first being involved in the investigation, then denying that Apple had filled a report. Now it’s being reported that SFPD officers accompanied Apple security personnel to the home of  Sergio Calderón and while the policemen waited outside, the Apple employees searched the home and computer of Mr. Calderon, finding nothing.Previous reports indicated that Apple was able to track the phone to the Calderon apartment, probably through the Find My Phone application. Mr. Calderon denies any knowledge of the lost iPhone but has said to the media that he thought all of the individuals who visited him were police officers and further claims that he was threatened on one hand and offered money on the other to return the phone, no questions asked.When confronted by a reporter from the SF Weekly, a spokesman for the SFPD indicated that all the officers did was to escort the Apple investigators to the residence. Mr. Calderon  states that he thought all six individuals were law enforcement officers and would not have consented to a search of his home otherwise.  If this is the case, then Apple, its involved employees, and the San Francisco Police Department could be looking at civil and possibility criminal liability under American law.  It is possible that Apple was able to originally prevail on law enforcement to not file any reports in an effort to keep the affair under the press radar and avoid a repeat of the media frenzy that accompanied the widely reported loss of a prototype iPhone 4 in April of 2010.All that is known at this time about the missing iPhone 5 is that it was reportedly sold on Craig’s-list for $200.00.  In light of the legal firestorm that resulted from Gizmodo buying and disassembling the then unreleased iPhone 4 last year, it’s highly unlikely that the new missing iPhone will ever see the light of day.

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Apple loses another iPhone prototype- might be the least of its problems

Steve Jobs  today informed the Apple Board of Directors that he was resigning as Chief
Executive Officer effective at once and recommended to the board that Tim Cook,
Apple’s Chief Operating Office be named as has successor. According to an Apple
press release issued at the same time as Mr. Jobs letter, the Apple board not
only named Tim Cook as Apple CEO, but also named Steve Jobs as the new chairman
of the board of Apple.

In the  letter, addressed not only to the Board of Directors but the “Apple Community”,
Mr Jobs stated:

I have always said if there ever came a daywhen I could no longer meet my duties and expectations as Apple’s CEO, I would be the first to let you know.Unfortunately, that day has come.

I hereby resign as CEO
of Apple. I would like to serve, if the Board sees fit, as Chairman of the
Board, director and Apple employee.

No reason was given for Jobs stepping down.  While there has been recurring rumors of
declining health since his transplant surgery in 2009, it is equally possible
that he has simply elected to leave the day to day operation to others. Not
only was Mr. Jobs a co-founder of Apple,  but he also has led Apple from the shambles
the iconic co-founder found upon his return in 1997 to create perhaps the most dominant
tech company in the world today. Further, it seems clear that he will still be
playing an active role as Chairman.

Tim Cook has been with Apple for the last thirteen
years and stepped in to run day to day operations during Mr. Job’s prior leave
of absence when dealing with his illness. With his elevation to CEO, Mr. Cook
also will be joining the Apple board.

Source: Apple via
Tech Meme

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Letter from Steve Jobs