April 2012
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Month April 2012

Entries 5 Total

Sponsor: Byword

Apr 12, ’12 12:38 PM

Byword is a Mac and iOS app for modern writers.

Modern writers don’t just sit at a desk and write. Sometimes it’s great to be able to write, edit or proofread when and where inspiration strikes and not be restrained by a single device or location. Byword makes this kind of workflow easy by integrating iCloud and Dropbox synchronization.

Here is how the flexibility of Byword manifests itself:

  • An article idea came to your mind last night on the couch and you began working on it on your iPad.
  • This morning, at the office, you picked up where you left off by opening Byword on your MacBook Air–finding the article was there just as you left it on the iPad.
  • After lunch, on your way to the coffee shop, you pull out your iPhone to proofread and finish the draft.

Byword is available on the Mac App Store  for $9.99, and for iOS on the App Store at the introductory price of $2.99. Check it out.

 

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5by5 | The Critical Path #33: The Futility of Machinations

Apr 11, ’12 10:10 PM

Dan and Horace are back to discuss the latest news from Nokia, RIM, HTC and Sony and what they have to do with each other. We touch on the distinction between market and product orientation and meander into the question of what is the value of the enterprise vis-a-vis the product it sells and what management has meant and what it should mean. We even tackle the history (and future) of history.

via 5by5 | The Critical Path #33: The Futility of Machinations.

This show covered a lot of topics, broad as well as deep.

Show notes and links:

  1. Investors hang up on Nokia after yet another profit warning – Apr. 11, 2012
  2. Sony posts its worst loss ever – USATODAY.com
  3. Sony doubles red ink forecast to worst loss ever – Yahoo! Finance
  4. Sony and Sharp warn of record annual losses – Telegraph
  5. 5by5 | The Critical Path #2: Synchronized failure
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When will smartphones reach saturation in the US?

Apr 11, ’12 1:30 PM

Nielsen has already noted that more than half of US consumers have smartphones. comScore’s data seems to point to that threshold being crossed sometime this year.

If that point is crossed then it would mark the smartphone as one of the most rapidly adopted consumer technologies of all time. I plotted the time it took for a set of technologies to reach 50% penetration of US households.

I also showed the time it took for some of the technologies to reach 80% penetration. 

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Did the dividend decision affect Apple’s share price?

Apr 9, ’12 6:54 PM

One of the arguments made for the cause of the increase in Apple’s share price of late has been that dividends would attract more institutional investors and provide more liquidity to Apple’s shares. Can we test this argument?

We’re not dealing with speculation. The decision to start paying dividends was made three weeks ago. It makes sense to assume that this new information has been absorbed by the  markets and market participants have adjusted their positions. Funds that were previously restricted in their investment in Apple due to its lack of dividend policy, could now go ahead.

However, as the following chart shows, the share price climbed continuously before and after the dividend declaration of March 19th (shown in red). Trading patterns did not show unusual highs or lows. In fact, after March 19th the trading volume decreased on a weekly basis.

The other indicator is institutional holdings.

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Take the money and run

Apr 8, ’12 9:40 PM

In August 2007, during the HD format wars between HD-DVD and Blu-ray format, Toshiba offered Paramount and Dreamworks $150 million to produce HD versions of their movies exclusively as HD-DVD.[1]

This type of deal is equivalent to an “advance” offered to a book author. The DVD manufacturer pays studios up-front cash for the right to make its DVDs. From an accounting point of view this is treated as an advance that the manufacturer recovers by selling the DVDs back to the studio’s video division in the same way a publisher earns back the advance it gives an author.

In this case, the payment was so large and the sales of HD-DVDs so small that Toshiba was unlikely to earn back the entire advance. The way the deal made any sense for Toshiba was that it was exclusive: the studios could not continue to release their movies in Blu-ray. The deal was done explicitly to hobble a competitor and create “critical mass” of content for its own format.

But then in March 2008, Toshiba threw in the towel and abandoned the HD-DVD format. The way the deal worked, the studios got to keep almost all of the $150 million. They then re-released all their movies in the Blu-ray format. The only “cost” to the $150 million windfall was that there was a nine month delay in the eventual release to Blu-ray–a small price to pay for an emergent format without a large install base.[2]

Platform owners go to great lengths to ensure “content” for their platform. They will, essentially, finance an ecosystem when there are barriers to entry or when competing ecosystems are far more lucrative.

This scenario for movies is being played again with Netflix, Hulu and other distributors who need to fill their pipelines. Netflix’s content acquisition costs are exploding and putting the whole company’s future in doubt.

But this scenario is also being played out with app developers. Most recently, news broke that developers are receiving payments from Microsoft for Windows Phone ports of popular apps. In mobile platforms, apps are the new content and developers are the new studios.  It’s also a practice that is not without precedent[3].

This is as it should be. The value of the platform lies mainly in what is built on top of it just like a foundation is not much use without a house on it. However, the practice of “priming the pump” with cash payments for porting is not ideal. Like spiffs, those who receive payments may become used to it and withhold development if there is no payment. Also, those who did not get payment offers may feel shunned and retaliate in kind. Those who receive payment may become cynical about it and may not put in the extra effort (or, more probably, outsource) to make the work spectacular.

Or, like Paramount, they may just take the money and run if/when the platform fails.

—

Notes:

  1. Source: The Hollywood Economist 2.0: The Hidden Financial Reality Behind the Movies by Edward Jay Epstein.
  2. Paramount made $250 million more from three “replication output” deals: $50 million from Toshiba for agreeing to release Titanic on DVD in time for Christmas sales, $150 million from Panasonic for agreeing to allow them to take over video replication from Thompson, and $50 million from the law firm Ziffrin, Brittenham and Circuit City stores for agreeing to support the DIVX format. Paramount got to keep the money even though DIVX never launched.
  3. Although it’s never been reported that Apple pays developers for building iOS apps, some developers do benefit from promotional placement and visibility during launch events and from early access to devices or SDKs under development.
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