Steve Jobs' Non-Obit

Monday August 29, 2011 – Stewart Wolpin

He's not dead, ya know.

All the Steve-Jobs-resigning hagiographies appearing in the wake of his resignation as CEO from Apple sure read that way, though.

Jobs is not only still alive, he's not even leaving Apple. He just kicked himself upstairs (ow). With iCloud (and the massive North Carolina server farm to support it), the iPhone 5 or 4S or whatever they're going to call it, perhaps a cheaper – $99 – 8 GB iPhone 4, the 1.2 GHz Retina-display iPad 3, likely an Apple HDTV, and rumblings of some new Apple innovation, not to mention new MacAirs and the usual next-gen iPods and desktops (damn, I mentioned them) all in the offing, Apple's pending product pipeline is pretty much packed for the next year at least.

And the planning for the company's super Cupertino campus is pretty much finished.

So, the company can certainly run more-or-less on innovation-less autopilot for the next couple of years under Tim Cook, who already has shown he can run the company sans Jobs.

But Jobs isn't doing a Ted Williams imitation. He's still at Apple – "chairman" isn't exactly a do-nothing job – and I wouldn't be surprised to see him on stage introducing the next-gen iPhone and maybe the pipeline products beyond.

That doesn't mean the Apple will stay ripe (sorry) without its iconic founder. Apple is a company whose image is tightly wound up in its Job's cult of personality. Apple and Jobs' have both become mythical rags-to-riches-to-rags-to-riches American comeback stories, and as a disrupter of a half dozen businesses (just one or two would have been impressive enough to ensure his legacy) in just the last decade, Jobs carries a can-do aura that looms above all American CEOs, past and present.

WHO WILL CARE

But Wall Street isn't necessarily known for its sentimentality or what you did for me yesterday. All the moneybags want to know is, will/can Apple succeed long-term post-Jobs?

In the gadget business, a visionary founder's departure has not boded well.

After David Sarnoff ended his 50-year reign over RCA in 1970, for instance, the company that dominated the consumer electronics business like no other before or since quickly disintegrated.

Sony's decline as the consumer electronics business leading company began after co-founder Akio Morito stepped down in 1994 after suffering a debilitating stroke.

Microsoft continues to prosper as Gates does his Andrew Carnegie memorial evil-tycoon-to-beloved-philanthropist make-over, but the company has been lapped by Apple as master of the tech domain.

Yes, there are plenty of companies that continue to operate successfully after their founders have left – Dolby and Intel are prime examples. Kodak, HP and Motorola have had long, successful runs without their famous founders, and their current problems have nothing to do with the departure of George Eastman, Bill Hewlett and David Packard, and the Galvins, Paul and son Robert, respectively.

But for every exception you can name there are dozens of other companies that foundered after their founders' departure – Ampex (Alexander Poniatoff), Fisher (Avery Fisher), Koss (John Koss), Zenith (Eugene McDonald), to name a few.

Wall Street's dilemma is, do Apple's post-Jobs prospects resemble Intel's or RCA's?

It's 10:00, Do You Know Where Your Intellectual Property Is?

Monday August 22, 2011 - Greg Scoblete

Intellectual property (IP) is the lifeblood of any technology business. It is a source of innovation, of new products and services, and, failing that, a means of extracting lucrative settlements in court. It's safe to say that without IP, there isn't much of a technology industry. It's also safe to say that IP is not safe - not by a long shot.

Indeed, the biggest tech story of August wasn't Apple becoming the largest company in the world by market cap or the news that said company briefly had more money than the U.S. Treasury. No, it was a story by in Michael Joseph Gross in Vanity Fair revealing a massive cyber espionage and cyber theft campaign dubbed Operation Shady RAT.

In details that could chill the heart of even the most battle-tested CIO, Gross illustrates how cyber-criminals, many operating for, or with encouragement from, the Chinese government, have hacked into thousands of computer networks and pilfered gigabytes worth of corporate and government secrets. Dmitri Alperovitch, the VP of threat research at McAfee, is quoted in the piece describing the situation thusly: “It’s clear from this and other attacks we’ve been witnessing that there is an unprecedented transfer of wealth in the form of trade secrets and I.P., primarily from Western organizations and companies, falling off the truck and disappearing into massive electronic archives."

In a radio interview about the article, Gross explained how this worked in practice. A chip company in China, Gross said, with very little track record in the industry would suddenly produce cutting-edge processors using designs and other IP stolen from their competitors. Source code from software companies has also been lifted, either to exploit for vulnerabilities or to profit from.

China is no stranger to IP piracy concerns. The U.S. has filed several complaints with the World Trade Organization through the years regarding the theft of Hollywood movies. But cyber theft introduces another level of complexity - and danger - for technology companies around the world since the threat is so insidious (it can take months or years before it's discovered). What's more worrying is that, if Gross' account is to be believed, most companies are either in denial about the threat or largely unaware that it exists. Even companies that have been victimized have refused to publicly acknowledge it. According to Gross, firms like Google naively thought that the U.S. government was keeping America's network infrastructure secure and thus were lax about their own security.

While the U.S. government has slowly been getting its cyber act together, it's clear that the onus is on private companies to secure their IP, before it ceases to be theirs alone.

3D Futility Gesture

Monday August 15, 2011 – Stewart Wolpin

Panasonic, Samsung, Sony and XpanD (in politically correct alphabetical order) last week announced a universal 3D glasses standard.

Upon hearing of agreement between the three leading active shutter 3D HDTV makers, the first thing that jumped to mind was the brief exchange between Howard Johnson and Sherriff Bart as the Rock Ridge townsfolk prepare to escape from Hedley Lamarr's terror gang of toll-paying desperados in Blazing Saddles:

"Can't you see that's the last act of a desperate man?" exclaims Sherriff Bart.

Replies H.J., "We don't care if it's the First Act of Henry the Fifth!"

My point is, announcing a universal glasses standard (to supplement the IR-based M-3DI universal glasses standard announced last a few months ago) is paramount to spitting on an actual blazing saddle, using a Q-tip to staunch an abdominal knife wound, ducking-and-covering under a wooden desk to survive an atom bomb attack – the last futile act to save a doomed format.

Who's buying/who's watching

It is estimated that about 2 million households are estimated to have purchased 3D HDTVs.

But just because people are buying 3D HDTVs – a growing number of step-up sets are including 3D as an "oh, it also does…" feature rather than as the primary selling headline – doesn't mean folks at home are actually watching anything in 3D.

Yes, once upon a time, having 3D glasses that worked only with a specific brand of 3D HDTV was considered dumb and might have stalled sales.

But it's now becoming clear the lack of 3D HDTV adoption is not the lack of cross-compatible glasses – it's the glasses to begin with.

Late last year, 89 percent of consumers surveyed for a report from Nielsen and the Cable and Telecommunications Association for Marketing felt glasses would get in the way of doing other things while watching TV – such as surfing the net on an iPad or laptop, a growing American habit – and 57 percent said they wouldn't buy a 3D HDTV because of the glasses.

And an active v. passive glasses format war doesn't help.

So, yes, universal glasses – finally – are a nice and good thing. But it may be the last act of a desperate format.

Checking in with Internet video subscriptions (aka: online movies you have to pay for)

Tuesday August 9, 2011 – Shelby Cunningham

Although they pale in comparison to the number of free/advertising-supported online video-entertainment programs streamed and downloaded, internet video subscription services are illustrating that pay is a viable model for accessing movies and TV programming on the Web.

DTC’s recently updated forecast projects a more than 2,000% increase in buyers of subscription services between 2010 and 2011 that play programming encoded in the Web’s most widely used video compression format, MPEG-4 AVC. All signs point to dramatic increases in these subscribers, but the forecasted 2011 growth occurred mainly because some high-profile purveyors of online video jumped into the subscription market, which marks a significant milestone in the infant online video market.

Hulu started the paid Hulu Plus subscription service in mid-2010 and has already reached 1 million subscribers. This is an amazing feat because once people are hooked on free content it’s hard to convince them to pay. By offering Hulu Plus on multiple devices in the home and mobile realm, and giving the subscribers a significant amount of content that the free service didn’t offer, Hulu has been able to entice people to pay up and join.

The biggest contributor to the 2,000% increase in AVC subscribers has been Amazon.com. When Amazon announced the addition of an instant video service to their existing Amazon Prime subscription, about 5 million people automatically became subscribers to Amazon’s video service, which encodes its TV shows and movies in AVC.

MPEG-4 AVC appears to be video codec of choice among content providers who are scrambling to make their content available on the multiple devices – TVs, PCs, smartphones, tablets – that are increasingly the nodes of the emerging video ecosystem. In just a couple of years, DTC estimates that there will be about 11.2 million internet video subscribers who will be paying for a service that offers programming encoded in the MPEG-4 AVC format. And by the middle of the decade, that will likely only be a drop in the bucket.

Sue Me, Sue You Blues

Monday August 1, 2011 – Stewart Wolpin

One look at the list of patent infringement lawsuits occurring amongst the smartphone and tablet set tells you all you need to know about how high the stakes are in these red-hot markets.

And Apple, the epicenter of the smartphone and table market, seems to be the most active patent plaintiff and defendant. Not since the mid 1990s when GoVideo seemed to exist almost solely on proceeds from patent lawsuits on its dual VCR design have I seen this much tech legal activity.

It seems not a day goes by that I don't read that Apple is suing someone, someone is suing Apple, a previous law suit has been settled or adjudicated or is moving on to the next arcane stage of the legal process.

Sue me once, shame on you…

For instance, Austin, Texas-based Affinity Labs is suing Apple for the second time in two years, this time over two patents covering "content delivery system and method" and "method for managing media." In 2009, Affinity Labs sued Apple over three different patents.

Samsung and Apple lately have been lunging at each other's legal throats – odd since iPod, iPhone and iPad components comprises Samsung's largest component business. Business meetings between the two must be just slightly less awkward than Woody Allen's Easter dinner with Diane Keaton's Wisconsin family in Annie Hall.

Anyway, their latest legal tug-of-war has Samsung applying to the ITC (International Trade Commission) to ban imports of all Apple products (wait, I'm ROFL) because Samsung claims Apple copied many of Samsung's innovations.

Samsung's action follows Apple's April allegations against the Korean company for allegedly copying iPhone's and iPad's look-and-feel. Hmmm. Why does that claim sound familiar?

Nokia and Apple recently settled a two-year legal back-and-forth with the latter signing a patent license with the former, which I guess means Apple lost this one.

Kodak is waiting on an ITC ruling about Apple and RIM allegedly violating its digital photo patents. Sadly, like Go Video, the photo pioneer's primary source of income seems to be its digital photo patent portfolio, which it may soon have to sell.

Last week, the ITC ruled Mac OS X violated some of S3's patents, which had been acquired by HTC – more about those folks after the next subhead.

Then there's a company called Personal Audio which, less than two weeks after scoring a patent infringement victory against Apple and a bunch of other well-heeled companies over a technology used in iPods, is suing Apple AGAIN over (wait for it) the same exact patent. This time, though, the company is claiming other Apple products are infringing. Apple is, of course, arguing the original settlement covered all infringing products. At the end of last week, a judge sanely ruled the first judgment covered all of Apple's products.

And this is all just a recap of the last week's action. Does anyone make anything but lawsuits anymore?

Hold that OS!

Possibly the most impactful suit is one Apple seems to have won against HTC – as previously noted, one of numerous litigious brouhahas between the two – after a ruling two weeks ago by the ITC. (And Apple has laughingly demanded for an HTC import ban as well.)

Apple claims the ability of a smart phone operating system to detect and highlight a phone number embedded in an email or text and then to be able to tap that now-highlighted number to initiate a voice call is its patented technology. ITC has agreed.

I'm not sure why Apple sued HTC over this since this is an Android, and therefore, a Google issue. Google apparently agrees, because it has joined HTC in its appeal.

You don't need me to tell you what happens if Apple's appeals on this matter are successful – because no one knows. Just as banning imports is unrealistic, so is forcing Google to update Android to eliminate this embedded phone number detection capability.

One wise Nostradamus has prognosticated that money likely will change hands (Really? Ya think?). There’s so much money at stake and there are literally hundreds of patents that go into these converged products. We’ll just call it the latest high-tech spectator sport.