Apr 112012
 

True to their alleged word, the U.S. Department of Justice filed a lawsuit against Apple and five book publishers “for conspiring to increase the prices that consumers pay for e-books.” Three of the publishers, Hachette, HarperCollins and Simon & Schuster, have already agreed to a proposed settlement, which I imagine puts some nasty writing on the wall for the other two hold-outs (Macmillan and Penguin). But how does Apple fit into all this? Earlier today at the E-books Press Conference, where the lawsuit was announced, Attorney General Eric Holder attempted to set the stage:

Beginning in the summer of 2009, we allege that executives at the highest levels of the companies included in today’s lawsuit – concerned that e-book sellers had reduced prices – worked together to eliminate competition among stores selling e-books, ultimately increasing prices for consumers.   As a result of this alleged conspiracy, we believe that consumers paid millions of dollars more for some of the most popular titles.

During regular, near-quarterly meetings, we allege that publishing company executives discussed confidential business and competitive matters – including Amazon’s e-book retailing practices – as part of a conspiracy to raise, fix, and stabilize retail prices.   In addition, we allege that these publishers agreed to impose a new model which would enable them to seize pricing authority from bookstores; that they entered into agreements to pay Apple a 30 percent commission on books sold through its iBookstore; and that they promised – through contracts including most-favored-nation provisions – that no other e-book retailer would set a lower price.   Our investigation even revealed that one CEO allegedly went so far as to encourage an e-book retailer to punish another publisher for not engaging in these illegal practices.

So publishers allegedly met regularly with the intent of fixing e-book prices. Whatever figure the publishers allegedly agreed to, Apple would receive a 30% “commission” to host the content in its iBookstore. Coincidently, this same 30% is what Apple charges developers to host apps in its App Store. And what Apple takes for facilitating in-app purchases. It’s not a “commission”; it’s the cost for Apple to host, market and facilitate the monetary transactions for e-book content provided by publishers. Whatever price is set, however it is set, Apple gets 30%. How does this make them a party to price-fixing again?

It stands to reason that the three stooges that buckled under the DoJ will force the other two publishers to settle as well. But Apple? Notsomuch. You may have heard that Apple is a company that doesn’t mind digging its heels in when it feels like its being slighted. I think being painted as a price-fixer would fall pretty neatly into that category. 1997 Apple might be content to take it in the shorts from the government; 2012 Apple will feel no such compunction. I hope Mr. Holder has clean laundry in his drawers and has stockpiled ample foodstuff, cuz there’s a siege a comin’.

Mar 092012
 

I have a love/hate relationship with the DoJ. I love them when they go after Google like when they did with the whole “Canadian prescription drug” thing. Good times. But now they’re allegedly going after Apple. Thankfully, it doesn’t matter if we’re talking about knock-off Android OEMs or the U.S. Government, Apple isn’t backing down in its stance regarding any iBooks-related price-fixing.

The skivvy knot is over Apple’s role in allegedly conspiring with publishers to fix the price of e-books and the evidence against Apple is pretty damning. And by “damning” I mean “anecdotal and circumstantial”. Exhibit A: Prices of e-books went up after the introduction of the iPad and its iBooks, even though Steve Jobs was quoted by Walt Mossberg that the Amazon competitor’s offerings would “cost the same”. Exhibit B: Apple would not let publishers offer an e-book for less on a competitor’s platform. Exhibit C:…

/shuffles through imaginary papers

//imagines this is the part of the Matlock episode where a judge would let Matlock fish around for 10 minutes speculating while the witness and counsel for the defense sat mute

I guess that’s it. It’s likely that the DoJ is just saber-rattling and holding back information before taking more formal action. They may want to consider releasing something that resembles actual evidence of price fixing before they go to trial, unless of course they want to come off as bigger idiots than the guy who writes the TSA’s blog. In a separate court matter dealing with the same theme, Apple released some statements relating to a currently-filed class action lawsuit. Quotes taken from The Verge:

“Guilt by association” and sinister interpretations of Apple’s public statements (Jobs’s quote to Mossberg re: iBooks “costing the same”) do not make up for basic deficiencies in Plaintiffs’ conspiracy theory. The facts depict unilateral – not conspiratorial – action by Apple. Before Apple entered the eBook market, one competitor, Amazon, the nation’s largest bookseller, had taken 90% of the market by pricing key eBooks below their wholesale cost. Having no desire to incur the losses that would flow from retailing in such an environment, Apple individually negotiated separate vertical agreements with each of the Publishers to serve as a distribution agent in exchange for a 30% commission on eBook sales. Each Publisher set its own prices – and Apple “exercise[d] no discretion” over prices but to ensure that Apple’s iBookstore would not be undercut by other sellers and that these offerings would be attractive to consumers, Apple negotiated general limits to the prices set by the Publishers, requiring that the Publishers match lower prices on key titles offered elsewhere. These were competitive, not conspiratorial, actions.

Did that man from Apple say that Amazon had 90% of the e-book market?

/hears no saber-rattling

Apple is stating that they had no desire to compete with Amazon’s pricing model by taking a loss, so they told publishers to set their prices and Apple would take 30% of whatever each of them decided – individually. That 30% is a pretty damningly round number, however. Regarding the allegations that Apple was using iBookstore agreements as a way to hinder Amazon’s entry into the tablet market:

…if Amazon was a “threat” that needed to be squelched by means of an illegal conspiracy, why would Apple offer Amazon’s Kindle app on the iPad? Why would Apple conclude that conspiring to force Amazon to no longer lose money on eBooks would cripple Amazon’s competitive fortunes? And why would Apple perceive the need for an illegal solution to the “Kindle threat” when it had an obvious and lawful one which it implemented – namely, introducing a multipurpose device [the iPad] whose marketing and sales success was not centered on eBook sales?

I would have also added “The necessity of Amazon having to use the Android operating system was a far more effective “self-squelching” strategy than anything Apple could have done.”, but I’m not a lawyer.

If this is the kind of hard line that Apple will take with the DoJ – and if you’ve been following any of the Android OEM litigation, I hear they can be real dicks – I don’t see an easy $500 million payoff in their future.

Sep 292011
 

I’m surprised it took this long for the first “how the Amazon Fire is better than the iPad” post to be expectorated onto the interwebs. I thought the wait would be spent on authors coming up with myriad reasons that the touched-by-barely-anyone tablet would be better than Apple’s dominant entry, but alas, ExtremeTech (no linkage for flametards) could find only 5. Five separate pages to maximize page impressions, obviously.

1. Amazon has more content

Touting something like 18 million discrete, downloadable or streamable songs, movies, and TV shows, Amazon definitely has a comparable amount of content to iTunes — but when you factor in e-books and magazines, Kindle Fire simply stomps Apple into the ground.

Having more books should be an Apple-pulp-smashing game-changer, all right. I mean: Amazon’s 7″ multi-touch IPS display with 1024x600p resolution at 169 ppi just screams to have books read on it. Didn’t they even make a commercial about it? And that full 8GB of space will allow users to jam their Fires full of the media that it can’t stream when it’s out of range of WiFi. And isn’t there a Kindle app for the iPad?

2. Portability; Kindle Fire fits in your pocket

The Kindle Fire is just 4.7 inches (120mm) wide — skinny enough to fit in your pants pocket or purse — and the iPad 2 is 7.3 inches (185mm), far too big for anything other than always-in-your-hand, or in a proper bag.

Reason number 2 is that it’s smaller? This has to be some kind of slideshow 60-0 braking record. And check this shit out:

Fits...*uhh*...in...*grunt*...your...*hmmph*...POCKET! /exhale

I mean: why even use that image? When people think “fits in your pocket”, people aren’t thinking “1/6 of the devices can be lodged in your back pocket with a shoehorn”.

3. Cost; Kindle Fire is less than half the price of the iPad

This is the clincher: the Kindle Fire is $199, and the lowest, “equivalent” iPad is $500.

Got me there. It does cost less. I may have taken the wrong message away from Bezos’ introduction of the Fire, but I think that was the point.

 4. Comfort; You can use the Kindle Fire with one hand

/checks reason 2.

I guess we’re trying to separate the quantitative from the qualitative here.

The Kindle Fire, on the other hand, can be gripped in a single hand *as opposed to the hundreds of documented emergency room visits by people attempting this with an iPad* — you can grasp both the left and right edges with thumb and forefinger *??*, it has softer (plastic) *just in case you thought the Fire was using some kind of soft metal, balsa or talc* edges, and it’s even grabably chubby *there’s something that ends in “that’s what she said” here* (11.4mm vs. 8.8mm for the iPad 2). As a result, you can easily whip your Fire (that name is going to get old soon) out of your back pocket *with assistance*, comfortably read or watch something on the train (even while standing up and holding a rail!) *because you can use one hand, GET IT?!*, and then pocket again *with help from a stranger* when you alight *writer’s workshop word alert* at the station.

5. Web; Amazon Silk will blow Mobile Safari away

If I twack you in the balls with both hands like this, you're going down. I'm just saying.

Not only is the Kindle Fire a cloud-backed OS — everything you do, download, or watch is mirrored with the cloud — but it also has a browser that promises to redefine mobile surfing. For the most part, Mobile Safari and Android’s stock browser are just cut-down versions of a desktop browser. The Fire’s browser, Amazon Silk, is a brand new re-imagining of what a mobile browser can be.

I’ve already commented that I’m impressed with how Amazon is leveraging its EC2 presence with its browser, but let’s not get carried away. First of all, the iPad trounces the Fire’s RAM and processor, so it’s not like the comparison started off even to begin with. Second, Apple created WebKit – the engine that powers a bunch of different browsers, including the Fire’s – so I think the iPad’s implementation is going to be about as good as it can be done. Let’s see how a side-by-side comparison between the two shakes out before we declare a winner. There’s also that small issue of Amazon having to know everything you browse in order to serve up whatever speed benefits are realized. I’m sure no one will have a problem with that.

The Fire costs less than the iPad – that much is obvious. Saying that the Fire “beats” the iPad stinks of the kind of linkbait bullshit I’ve come to expect after the announcement of something resembling an Apple product. Regurgitating Amazon’s marketing and slapping it in a slideshow doesn’t make it so.

Sep 282011
 

To understand why I think Amazon’s Fire will absolutely crush the Android tablet market, it helps to look at what both Google and Amazon bring to the tablet market.

The premise for Google’s Android started as a means of milking mobile device users for ad revenue. It was accomplished by knocking off Apple’s superior interface using stolen code from Java. The ends justified the means. With tablets, Google mistook the artificial market dominance it was handed by Apple’s exclusivity with AT&T – and competing carriers’ and manufacturers’ desperation – for success. They looked at the iPad and thought they could apply the same model to tablets. But with no exclusive carrier relationship to exploit, no desperate carriers and no subsidies, Android tablets have been a running joke.

Compare this with Amazon’s approach to making a tablet: the end is a more logical product of the means. Amazon took things it does well – books, movies and cloud computing – and used only as much hardware as they needed to deliver it at a jaw-dropping price. They took pains not to characterize the Fire as “an Android tablet” and it’s not meant to compete with the iPad, regardless of how badly the pathetic tech press wants to characterize it that way.

Deciding between a high-end Android tablet and an iPad? You’ll going make the same decision that made punchlines out of the XOOM, Galaxy Tab 10.1, Streak, PlayBook and TouchPad. Deciding between a Fire and an iPad? Sure, there might be some people who will purchase a Fire, but Apple’s device is much more than a storefront for media – it’s the app powerhouse that the Fire could never be, not just because of the limitations of the Android market itself, but the hardware driving the Fire experience restricts it.  Deciding between a Fire and a XOOM? I would argue that its superior integration with what Amazon does well combined with being “just enough” of an Android tablet and its absurdly low price will capture 9/10 of the people looking to buy a tablet that doesn’t have an Apple inscribed on the back.

Sep 282011
 

So Amazon’s big event in New York has come and gone and it’s left Apple’s competitors with a lot to think about – and maybe a thing or two for Apple to contemplate as well. While I agree that people looking to read books will look to the Kindle – like they always have – the iPad is still the device to beat. The “people who want to run Android on a tablet” aren’t consumers, they’re contrarians.

OK: it’s possible that I’m being obtuse and blindly supportive of the iPad here. Let’s take Jeff Bezos touted advantages of the Fire and see where the device stands in relation to its Android brethern:

  • $199

People making a 7″ tablet, like Dell and their (Bacon) Streak, will knock $100 of the price of the WiFi-only model and people will get their dual cameras, multi-touch and GPS.

  • Cross-device syncing and Whispersync for movies.

According the ads I see for devices like the Droid Bionic, not only can I “control all machines” (proving once again how utterly fucking retarded Verizon thinks its customers are), I can wirelessly sync my content. iOS 5 will also allow wireless syncing. Whispersync for movies would be cooler if it was used for actual downloads, but remembering media locations across devices is a nice touch. The fact that several TVs, such as the Vizio Via line, also feature Amazon’s Instant Video app, which provides a healthy level of pre-release device saturation.

  • The browser experience has a cloud back-end: Amazon Silk.

Now we’re talkin’. Because I have no standing in the tech press community and have a day job I have to hold down, I haven’t seen how Amazon’s “fat pipes” benefit the browsing experience first-hand, but as my favorite scoundrel once said “I can imagine quite a bit”. Amazon geeks: tell us what it’s all about…

No hands-on takeaway: it’ll be balls-out fast, but the same people who were pissed about Amazon taking highlighted passage data from ebooks and aggregating it – or anyone who’s got a bugaboo about Big Brother – will absolutely hate it.

In the end, I think this may affect some of the population who is trying to decide whether or not to buy an iPad, but not a lot of them. What it does do is pretty much Hulk-smash the Android tablet market, especially if Amazon decides to release a 10″ edition. It’s not an iPad, but it will offer a better media consumption experience for people wanting a little more than what the Kindle offers.

May 142011
 

Mark Reschke, one of the three wise men over at Three Guys and a Podcast (T-GAAP) posits that Amazon – and the recent intimations that the company will be releasing a competitor to the iPad – is the biggest threat to Apple.

They shouldn’t be, but they are.

Although Amazon isn’t what I’d call a hardware company, they obviously have experience with its manufacturing. I also wouldn’t call the Kindle an unmitigated success: it wasn’t until Amazon slashed its price in response to the announcement of the iPad that they were anything but a niche product. To this day, no one knows how many of these things have been sold, let alone what the margins on them are.

The credential that makes Amazon dangerous to Apple is the reason I recommended they take over the Android Market: their selling infrastructure, specifically with media. This, combined with their size, makes them a capable adversary for Apple.

Why size? Because Andy Rubin’s shop isn’t going to yield significantly on the Android experience to a nobody – especially with all the mouth moving at Google’s I|O about anti-fragmentation. And as Reschke mentions, for Amazon’s tablet to be successful, it’s going to have to deviate from other offerings to leverage the strength of their media library. If Google is interested in having their Android tablets do anything but fail miserably, Amazon is their best bet.

Game on, Bezos.

Apr 042011
 

Some of you may recall that not too long ago Google had a small problem with its Android Market: malware representing a developer’s entire portfolio was downloaded over a quarter million times before Google yanked it after an Android hobbyist website discovered it. Now step back for a moment and imagine the fireball of rage that would have broke the internet if this was a problem discovered in the Apple’s App Store. The beauty of Google’s customer base is that it’s comprised of two polar opposites that together don’t really care about Google’s hilarious non-stance on protecting consumers in their own marketplace. One the one hand, you have freetard hobbyists; on the other people who believed the pre-iPhone Verizon salesman when he said that an Android phone is every bit as good as an iPhone. The hobbyists’ “free as in freedom” mentality that allows them to tinker with their kit without harassment classifies downloading malware as a small price to pay for the ability to steal apps. The customers who were bamboozled into thinking their shartphone was “just as good” as an iPhone probably don’t know how to download an app in the first place and don’t know this issue even exists.

If I were Google, I would actually be pursuing Amazon to take on the role of exclusive curator of the Android Market. Why?

1. The pay isn’t that good. I think people overestimate the rewards and downplay the responsibilities of running an app store. In exchange for 30% or so of an app’s cost, Google has to host all the content, manage (however reactively) the presence of apps that blatantly violate copyright, are malware, promote bad things like hate speech – whatever. This kind of management saps resources that significantly cut into that 30%. And let’s not forget that in the Market, free apps outnumber paid apps by a much greater margin than the App Store, which means that 30% is drawn from a much smaller pie. Here’s a business reality that may not resonate very popularly with the freetard community: when you destroy the value that a good or service is meant to have (“meant” as defined by the market, not necessarily what the developer wants you to pay), you’ll end up with an ecosystem devoid of value for the people providing the goods or services. Google has to realize this.

1a. This isn’t how Google makes its money. The Market is one of those “nice to have” things that allow clueless salespeople to claim that Android is competitive with the iPhone. It’s not Google’s core business – not even close. On some level, Google has to realize they’re not doing this very well. Amazon, on the other hand, possesses the infrastructure – and apparently the desire – to do this at least as well as Google does now.

2. Freedom to be a hypocrite. Check out the reaction to Google circling its wagons and telling manufacturers and carriers that they can’t mess with Android too much or they’ll risk getting shoved out of the ecosystem. Even as Android apologists are arguing (poorly) that this is the right move for Google, a lot of freetards aren’t too happy about it – basically because it’s the complete opposite of what folks like Andy Rubin and Vic Gundotra have been talking up about their ecosystem. Imagine what will happen if Google starts to aggressively bounce crapware from its Marketplace? If you look at its content, you have to wonder how much longer Google can not purge it. Between the “ringtones apps” that rip off Top 20 pop singles and movie wallpaper, It’s amazing to me that Google has been allowed to operate an appstore environment that turns a blind eye to flagrant copyright and trademark violations for this long. Where is the RIAA? The MPAA? Bueller? With Amazon, Google has a chance to offload the responsibility for the mess that the Market has become. With Amazon’s credibility on the line, it’ll take at least some care in screening which apps appear on their site and give Google plausible deniability. Lord knows they hate to come off looking like hypocrites.

So as much as I’d like to see Google continue to mismanage its app store so TMA can continue to point and laugh at it, I also feel like this is pointing out the obvious. The best place for the Android Market is with Amazon.

Mar 312011
 

TMA has already given his stamp of approval on Amazon’s move to provide free/cheap cloud storage for music (and other things). Turns out the music labels were a little miffed at the move, being that Amazon neglected to negotiate any kind of deal with them to do it. Sony seems most overtly pissed, but you can assume that in an industry that kicks and screams anytime someone wants to monkey with their definition of ownership, that’s how all the labels are feeling. TMA shares the opinion of a lot of technorati: this issue of media ownership needs to be tucked in for a dirt nap now. Amazon’s got the legal firepower to bring the issue to a head if the labels want to go to the courts with it.

TMA’s advice to the labels? Keep using your RIAA scumbags to hunt down file-sharing individuals who don’t possess the resources to bury you…errrr…I mean…Lawyer up and fight that evil Amazon! Yeah!

Mar 222011
 

Poor MG Siegler. He’s a writer for TechCrunch, which is pretty bad in itself. Two words: Mike Arrington. When your site’s founder isn’t hyping a tablet project that ended up getting yoinked by his partner, only to have it launch DOA, its filling its RSS feed with doth-protest-too-much entries about maintaining its journalistic integrity after selling out to AOL. So, you may ask, what’s worse than writing for TechCrunch? Writing the de facto Apple beat and liking the company you’re writing about. Perusing the comment sections of one of his articles is like watching a predator-prey scenario unfold on the Serengeti, except in this case the hyenas are retarded. Continue reading

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