Nicest of the Damned

Why Apple isn't shaking over the Wal-Mart MP3 announcement

www.fool.com | Before You Bite Into That Apple ...

Over at The Motley Fool, Rick Aristotle Munarriz notes that Wal-Mart is looking to bolster its online music offerings by offering DRM-free MP3s, and for $.94, where Apple's higher-quality MP3 files are $1.29. Munarriz thinks this may finally be the chink in Apple's iPod/iTunes armor that pundits have predicted pretty much since the iPod arrived in 2001.

Unfortunately, according to Kirk Biglione over at MediaLoper.com, the Wal-Mart Music Store is an even more bewildering mess of dark alleys than their brick-and-mortar locations. He spent two hours trying to download a single Elvis Costello MP3, having to upgrade his Windows Media DRM and the Wal-Mart software itself in the process, and being rejected when he tried to connect via a Macintosh or even through Firefox for Windows. Using IE under Windows, he eventually was able to buy a song file.

So, the Wal-Mart store isn't much for now, but Munarriz is absolutely right about one thing -- the days of a monolithic iTunes Music Store are probably coming to a close. The future of music retail looks a lot like its past: There will be dozens of different outlets for music. Where once you could buy 45-rpm singles at the drugstore (for 99¢!), department stores, and music retailers, in the future, you'll be able to buy singles through online retailers, the artist's home page, and through listening stations in brick-and-mortar retailers.

Where Munarriz misses the boat is in suggesting a diversification in music retail is a major hit for Apple:

iPod users have gone through 3 billion downloads on iTunes because iTunes is pretty much the only show in town for iPod-ready downloads. Most of the other digital-music merchants sell tunes in the WMA format, which works on more conventional MP3 players but cannot penetrate the protected iPod fortress.

An MP3 file is universal. It will work on any and all players, the same way a ripped physical CD would. And if a record label makes its tunes available as standalone MP3 files -- the way EMI has for Wal-Mart, Apple, and eventually Amazon.com (Nasdaq: AMZN) -- it doesn't matter where you get the track. As more studios begin to back the unshackled MP3 format and more Web retailers begin to sell them, the line will also blur as to who makes your digital-music player, if audio is your bag.

I see estimates of Apple's take per song sold as low as 10¢ and as high as 35¢ (that one ignores distribution costs). If you take the highest possible estimate, the one that ignores Apple's server, bandwidth, and marketing costs, the iTunes store has made Apple a little over $1 billion since it opened in April 2003, or around $250 million/year.

iPod hardware sales continue to grow at more than 20% year over year. Apple sold more than 9.8 million iPods last quarter (more than 10 million if you include iPhones), for sales revenue of $1.57 billion (excluding the iPhone). Last quarter alone. Meanwhile, woot.com is trying to unload overstocked Zunes for $149.99 while the positively archaic 5.5-generation iPod just keeps selling, with, I'll wager, major new iPods arriving before Christmas.

So who's going to be selling the hardware that plays all those unlocked MP3s? For the forseeable future, it's still going to be Apple. The only possible market or technological derail I could see for Apple would be if a transition to video players happens quickly and Apple blows it -- even the people I know with the video iPods don't think of them as great video players. Even so, I don't know anybody who has given up their less-than-ideal iPod in favor of a more capable video player.

Motley Fool-style disclaimer: My wife and I both own Apple stock.

Finally, a candidate we all can get behind

Tired of all the political ads this season? Here's one candidate who tells it like it is:

Josh Jennings for Congress

Flickr zeitgeist

Tip of the cap to Janet at tech ronin, who was the first blogger I saw with the Flickr zeitgeist web app on her front page.

Here, it's set to only my photos, which I hope will encourage me to keep posting new photos. There have been a couple of times it appeared to slow down page loading, so let me know if you see loading problems.

I've added it to TdFBlog, as well.

Panning the flash (iPod)

I'm a big fan of John Gruber's Daring Fireball. He's a knowledgeable Mac user, a terrific writer, and really gets what makes the Mac insanely great. I proudly wear my Daring Fireball t-shirt.

John was also among the first pundits to appreciate the attraction of the iPod mini, which has, of course, been a huge success.

Last week, John ran a post debunking rumors of a flash-based iPod, whose intended appeal he says he just can't understand.

Gruber complains that people advocating a flash iPod are proceeding from the mistaken impression that there are two kinds of music players, flash and hard-drive. Both, he argues, are “implementation details,” unimportant next to essentials like the user interface.

That much I agree with, but Gruber's argument against two kinds of music players essentially boils down to an argument for only one kind of music player: He argues that only the hard drive player has what it takes. There I disagree: different component choices lead to a range of different products, just as my 12-inch PowerBook and G5 are both Macs, but radically different.

Part of the brilliance of the iPod is the way it overcomes compromises that crippled previous hard drive players. The scrollwheel/clickwheel took what had been 5 or 6 different controls and combined them into one intuitive package. Another innovation: the iPod doesn't actually play your music off the hard drive; it would exhaust your battery in no time and skip like crazy, so Apple periodically spins up the drive, grabs a bunch of music, and loads it onto ... some flash memory, from which your music is played.

John looks at three different angles he think Apple could take with a flash iPod: “iPod cheapy,” “iPod tiny,” and “iPod sport.” None of them warrant a second look, he says.

Cheapy: John says Apple can work their way down in price point by dropping prices on the mini and offering larger capacity drives at the current price point. But Apple's in an enviable position with both lines of iPod, selling all they can make. There's really no reason to lower prices on either line until demand at the current prices abates, so Apple has maintained (even raised) their price points over three years and kept the value up by raising capacity on iPod drives. Why sell a $199 iPod mini with a 2-gig drive when there's someone in line waiting for a 4-gig mini at $249?

On the other hand, Apple has to know there are millions of sales out there for the right player at the right capacity at a lower price. And most people would pay more for an iPod-brand player than your generic Coby. The Mac Observer posted some music player market share data last month showing that sales of hard drive and flash-based players are both growing, but that flash players are growing faster, with no single manufacturer taking more than 20 percent of that market. Smells like an opportunity. By introducing a flash player as a third product line, Apple can hold the line on pricing and margins on the existing models while opening up a new market, and introduce Apple products to a wider variety of people than ever before.

Also note that retail prices for flash (so presumably wholesale prices) appear to be dropping faster than prices for small hard drives, probably because there are many other consumer uses for flash memory (cameras, phones, PDAs) and very few for tiny hard drives.

Tiny: John says there's no utility to a player smaller than an iPod mini: the screen wouldn't show enough text, and the clickwheel is the perfect control mechanism. The rumored flash iPod over at MacMind takes an interesting approach here: no display at all and a minimal clickwheel.

I can actually remember the bad old days of a 64-meg Rio 500 (second from left, above), and what I remember most is how often I had the damn thing hooked up to my computer, since I had to swap music onto it pretty frequently, and it was USB 1.1, so it took a long time to load (small AND slow -- such a deal!). This design makes that an advantage: FireWire takes care of the download speeds, and iTunes can dynamically handle the rest, with smart playlists. Why not manage your music on your computer's big screen, and only use the player to listen? Bang -- there's the cost of a display saved, and the price point lowered.

Another advantage is that you don't have to power the screen, so you can have a smaller, lighter battery or longer battery life, and a smaller package. Add in the power and form-factor savings of ditching the hard drive, and you can build a seriously tiny package. Sony used to sell an MP3 player in a pen.

And perhaps there's an optional display, letting Apple tout the low entry price, but selling most of them with the optional display at a higher price.

But nobody has built an MP3 player without a screen, I've seen people argue. That's sort of true, but Apple partner Audible.com worked with IDEO to build an award-winning audiobook player, based on flash memory, that worked great without a screen (at right and above, far left), and had an FM transmitter (a la iTrip) on board, to boot. The Audible MobilePlayer used audio cues for user feedback, and held hours of spoken-word content in its 4 megabytes (!) of storage, circa 1998. Flash memory was pretty expensive then.

Sport: I honestly don't get John's argument here:

One other difference between flash-memory and hard-drive based players is that because it’s a solid state technology (i.e. no moving parts), flash-memory players are skip resistant and less prone to break if dropped. Thus, a flash-memory iPod might conceivably be targeted as a workout companion. Lower weight would also be a plus in this market. But if this is the case, I see even less reason to expect that such models would cost less than existing models.

He seems to admit the flash player has advantages here, but can't see a reason to charge less for it just because you can manufacture it for less, since this isn't the “iPod cheapy.”

The shortsighted thing about Gruber's post is that he's thinking one-dimensionally times three: either cheaper, or smaller, or more rugged. Any flash iPod will improve in all three dimensions: it will be the “iPod cheapy tiny sport,” not just one of the above.

A flash iPod that was $99, smaller, and tougher than the existing models would be a great gift for 'tweens and teens, a great workout companion (where the iPod classic is a little bulky), and priced for impulse buyers.

Every time Apple has launched a new model of iPod, they've been able to hit a price point at or below retail for the storage itself. The 5-gig drive in the original iPod was about $400 when the iPod was introduced at $400; the Microdrive in the iPod mini was $300 and up when the mini was introduced at $249. Volume wholesale prices mean Apple can build in a profit margin and the other components for less than the difference between wholesale and retail.

On a less expensive player, there's less money in the markup on the storage, so an iPod flash might have more invested in other components than in the memory, but I doubt it. Flash cards at 1 gigabyte are around $90, with 256 meg cards in the $30 range -- at retail. If the MacMind rumor plays out, and Apple sells a 256-meg player at $99, they should be able to maintain very healthy profit margins on the new players.

Will they cannibalize sales of other iPods? Maybe a little, but that's all the more reason for Apple to reinforce how useful the current iPods are for a million things other than playing music, like photos. It might also explain why the flash iPods haven't been released, despite earlier rumors that they would be available for Christmas: Apple may have a specific level of demand for current models, or a specific wholesale price for “iPod classic” components, that would trigger the flash player's introduction.

I thought Republicans were for small government?

cloudy, chance of sun breaks... | Redefining Marriage

Paul is on about the rabid defenders of marriage, and their sudden discovery that marriage is only intended for procreation. Paul suggests the only logical conclusion is the establishment of a learner’s permit for those desiring the marriage penalty, until they prove they can have kids.

The whole question seems so incredibly simple to me: Get government out of the marriage business altogether. The Republicans should be pleased with that; they want government out of emissions controls, the Internet, meat inspections, and business regulation, so why should marriage be any different? Only churches should be able to perform a marriage ceremony. The legal benefits of that ceremony? They should be utterly and completely zero (of course, your friends and family can still give you gifts).

If you want the legal benefits of spousehood, we’ve got a legally binding contract for a civil union or commitment ceremony, fully endorsed and recognized by the federal and state governments. It’s open to two adults of any combination, and really smart chimpanzees (if they have a voting record).

The right-wingers suggest that homosexuals are trying to get special treatment, but that’s 100 percent backwards. The special treatment has been the entwining of government and religious marriage for hundreds of years. With my small modifications, churches can marry or not marry anyone they please. Perhaps it would become a status symbol to have a “private wedding,” as it is to send kids to private school, or maybe the wealthy would have “private weddings” to avoid expensive divorces.

No reason my tax dollars should go to support a religious institution, particularly one that’s apparently so hidebound and exclusive. I mistakenly thought the government’s role in marriage was all about promoting lifelong commitment, building stable families, and encouraging tax revenues (spouses being better able to afford a mortgage).

And yes, Christy and I were married by a magistrate, so my money is where my mouth is on this one.

Inside the iPod mini

iPoding.com | iPod mini Dissection

iPoding.com offers a look at the new iPod mini in pieces, including the tiny, tiny 4-gig MicroDrive from Hitachi (formerly IBM).

One of the developers here bought one Friday night, and is pleased so far. It’s certainly a nice little package, and has the same sort of heft as the original iPod, suggesting that This is a Quality Product.

The buttons aren’t backlit (the display still is). One factor I haven’t seen anyone talk about is the display size: It forces the text to be pretty small, which might be a factor for some buyers.

An insider's view of Bush National Guard controversy

It’s no secret that I would vote for Reagan, Alzheimer's and all, before I would vote for a second term under G.W. Bush. (Historical note: 12-year-old Frank thought G.H.W. Bush was the best candidate in the 1980 race. I was disgusted when Bush refused to run as his own candidate in '88, instead running as Reagan II).

I'm torn as to whether the controversy over G.W. Bush's military service is a legitimate story or just a sideshow, but I'm following the story with some interest. CalPundit, in particular, is covering the story from almost every angle, and Joshua Micah Marshall is keeping up, as well.

But in reading CalPundit, there were a few comments from someone who spent time in the service as a personnel officer for the Air Force Reserve. Jerry at Milblog has posted why he doesn't believe Bush was AWOL and his analysis of Bush's service points for his May '72-May '73 service year.

I think Jerry is going a little easy on Bush, but his perspective based on his background is valuable. If you're following the story, you'll understand it better after you've read his take.

Schoolies go to School of Rock

Guardian Unlimited | Arts features | Under eights v middle eights

A writer from the Guardian played a number of classic rock songs (not necessarily Classic Rock songs) for a group of north London six- and seven-year-olds. Among the songs: The Who's Substitute (“He's getting things stuck in his mouth and he can't chew.”), Sex Pistols' Anarchy in the U.K. (“Who's Annie Key?”), Nirvana's Smells Like Teen Spirit (“This would definitely win Pop Idol.”), and Led Zeppelin's Immigrant Song (“This sounds like Busted.”) .

All of them must eventually be compared to Busted, who are apparently the hot British boy band at the moment.

Greatest crime of our generation?

How I PC'd an Apple G5

My vote goes to the guy who built this web page. Reminiscent of monkey excrement art, this guy ripped the beating heart out of a G5 (a dually, to boot), and popped in a generic Athlon.

That's the moral equivalent of getting a new Porsche, and swapping out the motor for one from an AMC Pacer.

Check out the after photo, to see why we should leave computer design to the professionals.

This is a crime of Bush v. Gore proportions. Update 1/31: The original perpetrator now claims that he did it as a joke on a Mac-using friend, when he acquired a bare G5 case. He received 1300 e-mails within a day or so of the article appearing.

Now I'm a homosexual activist?

Wired News: Gay Marriage Poll Gets Annulled

The American Family Association launched an internet poll to find out Americans' views on gay marriage. Many, many Americans voted, almost 1 million in all. Sixty percent, or around 508,000 said they favor legalizing homosexual marriage, and almost 67,000 favored a " 'civil union' with the full benefits of marriage except for the name.' Taken together, two-thirds of respondents opposed a constitutional amendment outlawing gay marriage, which wasn't what the group was looking for.

How to explain the results?

"It just so happens that homosexual activist groups around the country got a hold of the poll -- it was forwarded to them -- and they decided to have a little fun, and turn their organizations around the country (onto) the poll to try to cause it to represent something other than what we wanted it to. And so far, they succeeded with that." — Buddy Smith of the AFA

I voted in the poll, and I did it because I believe the AFA's insular membership doesn't represent the world at large very well. You could, of course, argue that the internet itself doesn't, but I think it's more representative than the AFA. I'm neither homosexual, nor particularly activist, though I am an American with a Family, just no Association.

I'm pretty sure I read about the poll at Boing Boing or at cloudy, chance of sun breaks, neither of which strike me as bastions of the Gay Mafia.

Judging by the number of right-wing weblogs, you would assume that if people online were that worked up over gay marriage, they would have taken the time to vote in the poll.