March 2014
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Month March 2014

The Critical Path #114: Veronica’s Dilemma

We talk about the major triumphs and minor failures of the Veronica Mars campaign on Kickstarter and kick off a series on The Capitalist’s Dilemma.

via 5by5 | The Critical Path #114: Veronicas Dilemma.

Airshow Vancouver, Wed March 26, 2014

We will be conducting our 9th Airshow event in Vancouver next Wednesday, March 26, 2014.

Airshow

The purpose of Airshow is to:

  • Understand how data can be used to persuade through an appeal to logic as well as through empathy.
  • Understand the basics of “data cinematicism” including the techniques analogous to cinematography and direction.
  • Understand story development techniques including how to facilitate the audience’s entry into the story.
  • Learn how to build a cinematic presentation.

The method we devised borrows heavily from the techniques of cinematography and screenwriting to impart meaning to the audience beyond the literal words spoken or images shown on screen. These techniques are demonstrated with “feature presentations” and then deconstructed in interactive lectures. Throughout we also weave Aristotelian rhetorical tips and present from the Asymco repertoire of stories.

Discounted registrations are available for readers of this blog, and students.

Sponsor: AAPLTrader.com

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asymcoadd3-17-14

Invaluable

The smartphone market continues to grow. 2013 saw total shipment of around one billion units (up from 683 million in 2012). In contrast, non-smartphone shipments continue to decline, with shipments around 800 million (down from 987 million in 2012).

This pattern is shown below:

Screen Shot 2014-03-18 at 3-18-12.45.12 PM

Note that prior to 2012 the non-smart market seemed to be holding steady in spite of the growth in smartphones. The notion that smartphones would become universal was widely dismissed. I certainly heard many objections to my 2010 hypothesis that not only would smartphones become ubiquitous but that it would become increasingly difficult to find anything else to buy. (This in spite of the clearly evident demand for “low-end” non-smart devices.)[1]

I also suggested that the notion of distinguishing phones with the”smart” tag would become irrelevant and that we would just call these devices “phones”.

Notes:
  1. The analogy I used was that of the black-and-white TV market as color TV became increasingly popular. There probably was a market for monochrome screens for a long time after they were discontinued but that is beside the point: the old technology becomes increasingly scarce because of economies of scale []

The Thin Red Line | Asymcar

We explore the strategic and tactical considerations behind BMW’s i sub-brand. Why did BMW attach a new BMW sub-brand to a new powertrain rather than using another brand, like Mini? The answer helps explain how innovations and brands inter-relate and how incumbents can attempt to absorb what is potentially non-sustaining.

We consider the pros and cons of innovation within an operating business – “intrepreneurship” – compared with creating an autonomous enterprise for the “new new thing”. I contrast BMW i with General Motors’ failed Saturn experiment.

We consider the burden that regulation, girth, cycle times, legacy practices, financialization and strategy taxes place on incumbents.

Finally, we look at what it takes to cross over the line which separates the device-based nice-to-have infotainment options from the must-have driver and ownership assistants that will inevitably find home in these devices.

via The Thin Red Line | Asymcar.

Sponsor: Tab Dump

There was once a time when websites published only what mattered and nothing else. But thanks to the way content is monetized, today’s journalists have become the equivalent of 1950s factory floor workers. Tab Dump aims to wind back the clock to a simpler time by rethinking what a news site should look like.

First: Forget rich media, and forget stories in reverse chronological order. Tab Dump has no images, so it loads instantly, and it’s split into two sections: Tech News and World News. Each section has stories listed alphabetically, making it easier to find the exact story you care about.

Second: The “stories” are only a few sentences long, packed with as much detail as possible, because your time is valuable, so why waste it with filler?

And third: Tab Dump has opted out of the page view race, there’s only one Tab Dump per day.

tabdump

On Google’s Future. Part 1

From 2005 through 2012 Google site revenues[1] have risen at a rate consistent  with the growth in global Internet population excluding China[2]. The Internet population and Google.com revenues for the period 2005-2012 are shown in the following graph.

Screen Shot 2014-03-13 at 3-13-3.17.02 PM

The correlation is shown in the following graph:

Screen Shot 2014-03-13 at 3-13-3.17.21 PM

Taking into account costs and expenses, on a per-user basis profitability per user (assuming all non-Chinese internet users are Google users) is shown below:

Screen Shot 2014-03-13 at 3-13-3.17.14 PM

The simple conclusion is that Google earns approximately $1.2 per user per quarter (net income is the blue area above). This figure is relatively constant with a slight increase (~20%) over 3 years.

If the company does not alter its business model then the future potential of the business could be measured as a function of Internet (ex. China) population growth.

How hard can that be?

The next post will answer this question.

Notes:
  1. Google revenues are reported as “Google.com”, “Network”, “Motorola” and “Other”. For this analysis I am including only the Google.com revenues []
  2. Internet population is calculated as a combination of penetration as reported by the ITU and population data from the World Bank []

Sponsor: Creative Labs

We believe there’s so much more that your portable wireless speaker should do for you. That’s why we made the AXX 200.

The AXX 200 is a Bluetooth wireless speaker + Sound Blaster audio processor. This means a portable wireless speaker with power for real-time audio enhancement.

Intelligence. That’s what the AXX 200 brings to the table.

  • Make a call. Listen to music. AXX 200 intelligently adjusts the audio settings for you.
  • The Sound Blaster Central App for your iOS or Android device places the control in your hands.
  • Built-in quad array microphone – That’s FOUR microphones in a single wireless speaker for 360° of clear, unmatched audio pickup for voice calls and recording.
  • A wireless speaker that automatically cancels out noise during voice calls. For real.

It’s for work, it’s for play.
It can be everything you need it to be.

The AXX 200 is now on sale for a limited time at Creative.com and Amazon.com.

The Critical Path #113: Takt Time

We talk about CarPlay, MWC2014, Microsoft and Nokia, “Tim Cook’s outburst”, per-user value, and re-evaluating how we analyze companies in tech.

via 5by5 | The Critical Path #113: Takt Time.

Tim Cook’s outburst [Updated]

When trying to assess the success of an ecosystem, the primary measure is the size of the user base or the “audience” for the product. Companies like FaceBook and WhatsApp and Twitter are measured first and foremost on this metric. Companies like Google, Amazon, Apple and Microsoft are less so. When revenues are firmly attached to products the focus shifts to “follow-the-money” rather than “follow-the-users” metrics.

That’s as it should be, but for the sake of understanding the competition between ecosystems, they should be compared on some similar basis. If the basis of competition in this day and age is ecosystems[1] how does one evaluate Facebook’s vs. Microsoft’s? Or, more poignantly, how does one compare WhatsApp’s valuation with that of iMessage?

It’s common to value a company which aggregates audiences at a multiple of that audience size. The implication being that each member of the audience returns a certain cash flow to the aggregator and the discounting of those flows is the net present value. Which is why, for example, a newspaper is valued in terms of its subscribers. As is a TV network and as might be a social network. Using this metric, a WhatsApp (i.e. free messaging) user is worth $40 and the average social media user may be worth around $100.[2]

The implication is that users/subscribers/audience members are loyal and will stay with the programming for some time. There is also a second implication that businesses which are not measured by audience size don’t have this loyal and recurring revenue base. The absence of an “audience” implies transience and impermanence and results in deep discounting of long-term viability.

Notes:
  1. As Microsoft, Apple and Google seem to agree it is. []
  2. The degree to which a user is actually worth the sum of all the subscriptions she may have made is a good topic for discussion. []