As the curtain falls on another year, the spotlight shines on the beginning of the Prediction Season. Self-proclaimed experts forecast the outlook for the stock market, economy and which Hollywood stars are headed for divorce court. Most prognosis are bunk. But this one is the genuine article.
How can you be certain? Your journalist ditched his ancient crystal ball this year and decided to consult the Chinese Zodiac sign. This is the year of...wait for it...The Pig. The animal, according to the horoscope, represents honesty, trust and bravery. That bodes well for the New Year.
But there also is a dark side to The Pig. The animal also has characteristics of self-indulgence, naivete, stubbornness and laziness. Ah, forget all those attributes. All you need to remember is that the animal ends up as bacon on your plate. Hmmmm. Bacon! Now there's a reason for optimism.
The piggish forecast for 2019 is not as slovenly as the pessimists among you expect:
1. Despite gloomy forecasts from the likes of Goldman Sachs and other money firms, strong consumer spending spurs an annual gain of 2.9 percent in the Gross Domestic Product (GDP), after posting two quarters of 3+ percent growth early in 2019, outperforming most world economies.
2. With its stock market sinking and its economic growth underperforming expectations, China signs a trade deal with the United States but before the ink is dry the CIA reveals the Asian country has launched a cyber intrusion on our government that approaches a Category 1 attack.
3. Federal Reserve interest rate hikes in the new year continue to be an anchor on the U.S. stock markets as the Dow enters bear territory, igniting a very public feud between President Trump and Fed chairman Jerome Powell. The tension ends in Powell's resignation, calming markets.
4. Special counsel Robert Mueller, appointed in March 2017, finally issues his report on Russian interference in the 2016 election after the new Congress is sworn in. His report is littered with innuendoes about Trump campaign conduct but offers no proof of collusion with Russia.
5. The Democratic Party-controlled House launches a series of investigations aimed at President Trump and his campaign associates, using the Mueller report as its excuse for additional probes. At the urging of Speaker Pelosi, the House takes up articles of impeachment against the president.
6. With a March deadline approaching, a disheartened Prime Minister Theresa May calls for a public referendum on the Brexit deal she negotiated with the European Union after failing to get approval from Parliament. Voters reject the exit settlement, leaving the plan to leave the EU in limbo.
7. Electric car manufacturer Tesla fails to fulfill its commitment to produce 500,000 cars, sending the firm's stock in a nosedive and forcing CEO Elon Musk to give up the company reigns to an executive with auto experience to quiet the financial crisis.
8. Despite most political pundits debunking her chances, Hillary Clinton announces she will run for the presidency igniting a wild scramble among Democrats to come up with a more electable candidate. Former San Antonio Mayor Julian Castro throws his hat in the ring, becoming the favorite.
9. Justice Ruth Bader Ginsburg, who recently underwent cancer surgery, attempts to hang on to her seat on the High Court despite failing health before succumbing to the disease. President Trump nominates former Notre Dame law professor Amy Barrett as her replacement.
10. As the cost of health care and insurance continue to climb, industry giants Goggle, Amazon and Apple jump start more research and development on the use of virtual intelligence for applications in drug development, health diagnosis and personal health care, gaining a new revenue wellspring.
I can hear what your are thinking. These predictions are pig-headed, the figment of a bacon-lover's imagination. You could be right. But the good news is that when 2019 ends, you won't remember these forecasts. So go ahead. Have a wiggly piggly New Year!
Showing posts with label Technology. Show all posts
Showing posts with label Technology. Show all posts
Monday, December 31, 2018
Friday, April 1, 2011
Factoids That You Can Use
Using your cell phone to make payments for merchandise is the next technology wave poised to hit the wireless industry. Although its not a new idea, implementation has been slow in the U.S. compared to Asia, Europe and other countries. Now more software providers are knitting the capability into their operating systems for smartphones. Microsoft recently hinted it planned to make the software available soon. Google already has bolted on payment capability in its Android operating system for cell phones. Wireless observers expect Apple to soon upgrade its software to match Goggle. Retailers are also gearing up with transaction scanners that work with wireless handsets. Starbucks already has inserted the readers at cash registers in most of their stores. In 2010, mobile payments for goods and services topped the $30 billion mark globally. Gartner research expects the figure to mushroom to $245 billion by 2014. Handset manufacturers have taken notice. According to Gartner, cell phones shipped with the payment software will reach 35 million by the end of this year. That number is expected to double by next year. By 2014, Gartner projects that 340 million global wireless users will make payments for merchandise with a tap on the handset screen.
Thursday, August 19, 2010
iPad's Future: A contrarian view
At first blush, it may appear sheer lunacy to question the future of the iPad, Apple's wildly successful entry into the tablet computer market. In its latest update, the Cupertino, California-based maker announced it had sold three million units of the touchscreen device. That would suggest a bright future for the iPad as sales graphs resemble the proverbial hockey-stick.
However, here's a note of caution for Apple investors. The iPad rocketed off the launch pad on April 3, selling 300,000 units by the first weekend. Sales hit one million units less than one month into the introduction of the new product. Since then, reports continue to show steady gains, but nothing like the super-heated introductory phase.
Is the market getting Apple fatigue? Has the iPad fad run its course? Has the growth been driven by early-adopters instead of broad mass market appeal? Are sales about to reach a peak? And what about tablet computer introductions promised by Dell, Hewlett Packard and Lenovo? Only Dell has tiptoed into the category with a new product announcement earlier this month. If this is such a hot category, why are there so few imitators?
Those questions are likely causing heartburn for a few Wall Street analysts. This observer sees trouble ahead for the iPad, unless Apple ramps up unique applications for the device. Right now, most of the apps that run on the iPad are spiffed up versions available on the iPhone. As Apple demonstrated with its iPhone, it's all about the apps. Any manufacturer can produce a smartphone. What makes the iPhone unique is the applications that turn the device into a powerful personal assistant. The same applies to tablet computers.
A larger issue is defining the iPad for consumers and businesses. That may sound simplistic, but to what product category does this device belong? It does not have the processing power of a laptop. For example, it lacks media creation capabilities that computers have.
Furthermore, it cannot do things, like take pictures or handle voice calls, that smartphones can do. It has some appeal to gamers, but when compared with Xbox for example, it comes up short on gaming experience. While it has been hailed as a reader, it costs nearly twice as much as competitors' models, including Amazon's Kindle. And Apple's selection of e-books pales in comparison with Amazon's robust library.
To be fair, the Ipad is a useful device for reading, watching and browsing. It has a cool, high-definition touchscreen, but not much else to distinguish it from the competition. That's why it seems more of a complement for a personal computer, but does not replace a netbook, laptop or desktop. Its an orphan product looking for a niche to fill.
Apple CEO Steve Jobs didn't help matters when he introduced the new hand-held product as a tablet computer. Given the dismal history of tablet computers, that was not the most flattering market niche for Apple's slick new device. Jobs had an opportunity to define a whole new market in his introduction but blew it. And that name? High gag factor. It sounds like a feminine hygiene product.
Long term, Apple needs to find a market niche for the iPad. For starters, Apple should stop referring to the device as a tablet computer. That's like calling a $250,000 Porsche an automobile. The iPad is a souped-up, high-tech, eye-candy network explorer that excels at visual media.
(Personal Note: Yes, I purchased an iPad and use it mostly to access email and browse the net when I travel. It replaced my clunky, six-year-old laptop. But I don't need the processing power most heavy computer users expect and require.)
Apple should focus its marketing and application efforts in some basic categories to solidify its long-term prospects. Here are a few ideas:
1. HOSPITALS: Patient charts litter hospital wards. It's time to end the paper trail and hang iPads off patient beds. With the right software, doctors and nurses could enter patient data and transfer it instantly to the attending physician. That would allow doctors to check on patients without physically visiting hospitals so often. It would also streamline the way hospitals track drug treatments, medical observations and patient data. Medical record-keeping would be revolutionized. Even the lightest laptops are too bulky for the task.
2. RESEARCH: Research abounds in the country: from political polls to consumer mall research. Most research is done over the phone or with pen (or pencils) and paper. Why not fill out the survey on an iPad and then download the information to a server? The data could be tallied and available faster. In addition, clients could assess the data in real time, aiding the decision-making process. Another application is door-to-door surveys, such as the U.S. Census. Results could be released in months, instead of years.
3. STATE AGENCIES: State governments chew up paper like a first grader on Rendlin. Take one example: the Department of Motor Vehicles. Think of the time and money savings if agencies could use iPads to administer tests, collect information and record data. It would take some of the pain out of the citizen experience with government agencies and increase job satisfaction for state workers.
4. RESTAURANTS: Eateries with diverse menus and large dinning rooms could serve more people faster if waiters used iPads to take orders. The information would be inputted once and sent over a wireless network to a screen in the kitchen. Waiters could spend more time with customers, meeting their needs, and less time darting back and forth between tables and the kitchen.
5. DOCTORS OFFICE: A visit to the doctor's office--even your regular family physician--usually involves filling out countless forms. The paper documents are stored in files that clog up space in cramped quarters. Wouldn't it be a better solution to let patients complete the forms on an iPad and then push "send"? We vote that way today, so why does this seem like such a foreign concept to the medical profession?
Those are just a few of the uses for an iPad that come readily to mind. There are many more out there. The iPad is easily portable, can be operated with one hand and has the screen size (readability) and graphic definition to make it a superior device for inputting information, reading charts, graphs or MRI scans.
iPads could become ubiquitous in many settings because the cost is reasonable ($499 to $829), certainly cheaper than a high-end, awkward laptop that requires (most) users to be in a sitting position to pound the keyboard.
The future is there for the taking. But Apple must re-trench to take advantage of the opportunities. Tablet computers have a terrible track record. Apple thumbed its nose at market history and decided in its arrogance to show the world that its iconic logo could sell tablet computers where others have failed.
I know. I know. It's tough to argue with Apple's track record for success. But even a great company can make a bone-headed miscalculation. The corporate graveyard is littered with examples of once dynamic firms whose visions were clouded by cool technology while ignoring market realities.
It will be worth watching what Apple does next, especially if iPad sales begin to stall. Betting against Apple is always risky. The prediction here is that Jobs will swallow his pride and reposition the iPad. If he doesn't, there may be rough seas ahead for the much ballyhooed device that was predicted to save the tablet computer category from extinction.
However, here's a note of caution for Apple investors. The iPad rocketed off the launch pad on April 3, selling 300,000 units by the first weekend. Sales hit one million units less than one month into the introduction of the new product. Since then, reports continue to show steady gains, but nothing like the super-heated introductory phase.
Is the market getting Apple fatigue? Has the iPad fad run its course? Has the growth been driven by early-adopters instead of broad mass market appeal? Are sales about to reach a peak? And what about tablet computer introductions promised by Dell, Hewlett Packard and Lenovo? Only Dell has tiptoed into the category with a new product announcement earlier this month. If this is such a hot category, why are there so few imitators?
Those questions are likely causing heartburn for a few Wall Street analysts. This observer sees trouble ahead for the iPad, unless Apple ramps up unique applications for the device. Right now, most of the apps that run on the iPad are spiffed up versions available on the iPhone. As Apple demonstrated with its iPhone, it's all about the apps. Any manufacturer can produce a smartphone. What makes the iPhone unique is the applications that turn the device into a powerful personal assistant. The same applies to tablet computers.
A larger issue is defining the iPad for consumers and businesses. That may sound simplistic, but to what product category does this device belong? It does not have the processing power of a laptop. For example, it lacks media creation capabilities that computers have.
Furthermore, it cannot do things, like take pictures or handle voice calls, that smartphones can do. It has some appeal to gamers, but when compared with Xbox for example, it comes up short on gaming experience. While it has been hailed as a reader, it costs nearly twice as much as competitors' models, including Amazon's Kindle. And Apple's selection of e-books pales in comparison with Amazon's robust library.
To be fair, the Ipad is a useful device for reading, watching and browsing. It has a cool, high-definition touchscreen, but not much else to distinguish it from the competition. That's why it seems more of a complement for a personal computer, but does not replace a netbook, laptop or desktop. Its an orphan product looking for a niche to fill.
Apple CEO Steve Jobs didn't help matters when he introduced the new hand-held product as a tablet computer. Given the dismal history of tablet computers, that was not the most flattering market niche for Apple's slick new device. Jobs had an opportunity to define a whole new market in his introduction but blew it. And that name? High gag factor. It sounds like a feminine hygiene product.
Long term, Apple needs to find a market niche for the iPad. For starters, Apple should stop referring to the device as a tablet computer. That's like calling a $250,000 Porsche an automobile. The iPad is a souped-up, high-tech, eye-candy network explorer that excels at visual media.
(Personal Note: Yes, I purchased an iPad and use it mostly to access email and browse the net when I travel. It replaced my clunky, six-year-old laptop. But I don't need the processing power most heavy computer users expect and require.)
Apple should focus its marketing and application efforts in some basic categories to solidify its long-term prospects. Here are a few ideas:
1. HOSPITALS: Patient charts litter hospital wards. It's time to end the paper trail and hang iPads off patient beds. With the right software, doctors and nurses could enter patient data and transfer it instantly to the attending physician. That would allow doctors to check on patients without physically visiting hospitals so often. It would also streamline the way hospitals track drug treatments, medical observations and patient data. Medical record-keeping would be revolutionized. Even the lightest laptops are too bulky for the task.
2. RESEARCH: Research abounds in the country: from political polls to consumer mall research. Most research is done over the phone or with pen (or pencils) and paper. Why not fill out the survey on an iPad and then download the information to a server? The data could be tallied and available faster. In addition, clients could assess the data in real time, aiding the decision-making process. Another application is door-to-door surveys, such as the U.S. Census. Results could be released in months, instead of years.
3. STATE AGENCIES: State governments chew up paper like a first grader on Rendlin. Take one example: the Department of Motor Vehicles. Think of the time and money savings if agencies could use iPads to administer tests, collect information and record data. It would take some of the pain out of the citizen experience with government agencies and increase job satisfaction for state workers.
4. RESTAURANTS: Eateries with diverse menus and large dinning rooms could serve more people faster if waiters used iPads to take orders. The information would be inputted once and sent over a wireless network to a screen in the kitchen. Waiters could spend more time with customers, meeting their needs, and less time darting back and forth between tables and the kitchen.
5. DOCTORS OFFICE: A visit to the doctor's office--even your regular family physician--usually involves filling out countless forms. The paper documents are stored in files that clog up space in cramped quarters. Wouldn't it be a better solution to let patients complete the forms on an iPad and then push "send"? We vote that way today, so why does this seem like such a foreign concept to the medical profession?
Those are just a few of the uses for an iPad that come readily to mind. There are many more out there. The iPad is easily portable, can be operated with one hand and has the screen size (readability) and graphic definition to make it a superior device for inputting information, reading charts, graphs or MRI scans.
iPads could become ubiquitous in many settings because the cost is reasonable ($499 to $829), certainly cheaper than a high-end, awkward laptop that requires (most) users to be in a sitting position to pound the keyboard.
The future is there for the taking. But Apple must re-trench to take advantage of the opportunities. Tablet computers have a terrible track record. Apple thumbed its nose at market history and decided in its arrogance to show the world that its iconic logo could sell tablet computers where others have failed.
I know. I know. It's tough to argue with Apple's track record for success. But even a great company can make a bone-headed miscalculation. The corporate graveyard is littered with examples of once dynamic firms whose visions were clouded by cool technology while ignoring market realities.
It will be worth watching what Apple does next, especially if iPad sales begin to stall. Betting against Apple is always risky. The prediction here is that Jobs will swallow his pride and reposition the iPad. If he doesn't, there may be rough seas ahead for the much ballyhooed device that was predicted to save the tablet computer category from extinction.
Sunday, July 18, 2010
What's Behind Antennagate
At first glance, the dust-up about the antenna issues surrounding the new IPhone 4 appears to be all about a serious design gaff on Apple's part. However, it really has more to do with the media and Google. The two have joined forces in an attempt to tar Apple's image. Meanwhile, a third ally, the federal government, may be about ready to jump into the breech.
This tidy drama began shortly after the introduction of the new smartphone. A few customers--no one knows the exact number--experienced signal issues which caused reception problems. At first, the blame was placed on a certain way consumers held the phone. Then accounts began circulating that the problems went deeper. After initially being hailed as a game-changing smartphone, The Four quickly became embroiled in controversey.
The media and the blog-a-sphere pounced. Press accounts painted a dire picture of Apple's antenna problems. Some suggested a product recall. Consumer Reports refused to recommend it. Apple's stock plummeted, shaving off $16 billion in market value. Hysteria was rampant. It forced Apple's CEO Steve Jobs to hold a news conference last week to address the issue, something he was surely loathed to do.
Jobs dubbed the whole affair, "Antennagate." He promised users free plastic "bumper" cases that would prevent a user's fingers from covering the antenna. The media wasn't satisfied. They characterized Jobs as "defiant" and "defensive." Apple was accused of being "secretive" in the handling of the whole affair. To these eyes, the media's reaction was overblown.
An analyst for Envioneering Group agrees. He has been trying unsuccessfully to replicate the signal problems on several of the new IPhone 4 models. His conclusion is that there is no science to support the reported antenna problems. "It may be just under 1% of the phones have the issue, less than 1 out of 100," he concludes.
But "Antennagate" is not about reality. There are other reasons that help explain the media's response. The business press, especially, has not taken kindly to the way Apple has chosen to eschew a cozy relationship with the media. Apple shrouds its announcements in secrecy and keeps the media in the dark so that the company can control the news about its new products. That chaps the media. They want unfettered access, especially when it's a high-profile company like Apple. Jobs doesn't play that game. As a result, there is a hate-hate relationship between Apple and journalists.
Moreover, when a publication or reporter prints unflattering reports about Apple, the CEO reverts to attack mode. Jobs doesn't sit back and let the media bash his company or its products. That's why the media should have expected Jobs to come out swinging last week at his hastily called news conference. He didn't disappoint.
Jobs lectured the audience, claiming the press and its competitors were trying to "tear down" Apple. He pointed out that antenna issues were common with most wireless phones. He even showed dramatic video to support his claim. Jobs capped off the event by saying the whole affair was "overblown." He called one media account of the antenna problems a "total crock." Jobs is absolutely correct.
First off, handsets have always had antenna issues since the inception of the wireless industry. True, manufacturers have gotten better over the years at addressing the problem. However, today's miniature models, when compared to the early bricks with huge antennas, are not designed for maximum signal strength. Network providers, like AT&T, often shoulder the blame, but handsets should share at least half of the responsibility for weak reception. There never has been a wireless handset sold that doesn't experience problems with dropped calls and weak signals.
If this is true, then why the media circus? Apple's competitors are feeding the media frenzy in hopes of destroying the image the IPhone has earned in the marketplace. The more doubt the competition can create, the better its chances to overtake Apple in the smartphone category. The company that stands to gain the most by Apple's misfortunes is Goggle, a relative newcomer to the smartphone market. The Mountain View, California, Goliath casts a big shadow over this whole episode.
Google has a lot at stake in this drama. The company's latest smartphone, the Droid X manufactured by Motorola and powered by the Google Android operating system, is flying off the shelves. In the race for market share, Droid is closing the gap with IPhone. Billions of dollars are riding on the outcome of this fierce competition.
Despite its carefully nurtured image, Google isn't above undertaking a stealth campaign to sink its competition. Behind the scenes, Goggle is prompting tech analysts, financial researchers and product evaluators to pile on. They are using their extensive contacts to prod the media frenzy that appears unlikely to abate any time soon. Unlike Apple, the folks at Goggle have cultivated a lovable image in the media, which has produced fawning coverage for a company intent on destroying competition.
That's why it was no surprise when Sen. Charles Schumer, a Democrat from New York, wrote an open letter last week to Jobs, urging him to be clearer with the public on the antenna problem. He called the "bumper" case offered by Jobs an "insufficient" solution. It would be wise for tech followers and Apple to take heed.
During the last presidential campaign, Google's managers and employees donated a reported $803,000 to President Obama's campaign. In addition, Google's CEO and other executives forked over another $25,000 each to help pay for the inaugural event. As a result, Google got a seat at the Washington table. A handful of ex-Google managers have joined the Obama administration. The most visible is Andrew McLaughlin, who serves as deputy chief technology officer for the administration. He is in a position to shape policy that impacts Google and its rivals.
Therefore, Schumer's outburst should not be dismissed as mere political grandstanding. He is tight with the Obama administration. You don't have to be a conspiracy theorist to wonder if perhaps Schumer was goaded into action by someone in the administration. A congressional hearing is the last thing Jobs and Apple need at this point. Even worse, regulators, such as the Federal Trade Commission, could step in and demand that Apple do more than offer a free "bumper" case.
With all the negative publicity enveloping the IPhone 4, you'd expect sales to tank. However, just the opposite has happened. Jobs said Apple has sold more than three million units since its introduction three weeks ago. The handset is on pace to break all previous smartphone sales records. Most stores that were contacted are quoting three-to-four week delivery time frames for the IPhone 4. Young people, in particular, are enraptured by the FaceTime video calling feature. Obviously, consumers aren't buying the smear campaign against Apple.
But don't expect the uproar to die down. The media smell Apple-red blood. New press accounts surfaced over the weekend about challenges faced by Apple's glass supplier. The report hinted there would be increasing delays in fulfilling IPhone 4 orders. The news heaped more negative publicity on Apple's new phone.
Apple must face the facts. This is an attack like none other that it has ever experienced. It is time to take off the gloves and go after Google. The Droid X is not without its problems, including a finicky touchscreen. If it waits too long, Jobs may find Apple looking up at Google's market share position in the smartphone category.
This tidy drama began shortly after the introduction of the new smartphone. A few customers--no one knows the exact number--experienced signal issues which caused reception problems. At first, the blame was placed on a certain way consumers held the phone. Then accounts began circulating that the problems went deeper. After initially being hailed as a game-changing smartphone, The Four quickly became embroiled in controversey.
The media and the blog-a-sphere pounced. Press accounts painted a dire picture of Apple's antenna problems. Some suggested a product recall. Consumer Reports refused to recommend it. Apple's stock plummeted, shaving off $16 billion in market value. Hysteria was rampant. It forced Apple's CEO Steve Jobs to hold a news conference last week to address the issue, something he was surely loathed to do.
Jobs dubbed the whole affair, "Antennagate." He promised users free plastic "bumper" cases that would prevent a user's fingers from covering the antenna. The media wasn't satisfied. They characterized Jobs as "defiant" and "defensive." Apple was accused of being "secretive" in the handling of the whole affair. To these eyes, the media's reaction was overblown.
An analyst for Envioneering Group agrees. He has been trying unsuccessfully to replicate the signal problems on several of the new IPhone 4 models. His conclusion is that there is no science to support the reported antenna problems. "It may be just under 1% of the phones have the issue, less than 1 out of 100," he concludes.
But "Antennagate" is not about reality. There are other reasons that help explain the media's response. The business press, especially, has not taken kindly to the way Apple has chosen to eschew a cozy relationship with the media. Apple shrouds its announcements in secrecy and keeps the media in the dark so that the company can control the news about its new products. That chaps the media. They want unfettered access, especially when it's a high-profile company like Apple. Jobs doesn't play that game. As a result, there is a hate-hate relationship between Apple and journalists.
Moreover, when a publication or reporter prints unflattering reports about Apple, the CEO reverts to attack mode. Jobs doesn't sit back and let the media bash his company or its products. That's why the media should have expected Jobs to come out swinging last week at his hastily called news conference. He didn't disappoint.
Jobs lectured the audience, claiming the press and its competitors were trying to "tear down" Apple. He pointed out that antenna issues were common with most wireless phones. He even showed dramatic video to support his claim. Jobs capped off the event by saying the whole affair was "overblown." He called one media account of the antenna problems a "total crock." Jobs is absolutely correct.
First off, handsets have always had antenna issues since the inception of the wireless industry. True, manufacturers have gotten better over the years at addressing the problem. However, today's miniature models, when compared to the early bricks with huge antennas, are not designed for maximum signal strength. Network providers, like AT&T, often shoulder the blame, but handsets should share at least half of the responsibility for weak reception. There never has been a wireless handset sold that doesn't experience problems with dropped calls and weak signals.
If this is true, then why the media circus? Apple's competitors are feeding the media frenzy in hopes of destroying the image the IPhone has earned in the marketplace. The more doubt the competition can create, the better its chances to overtake Apple in the smartphone category. The company that stands to gain the most by Apple's misfortunes is Goggle, a relative newcomer to the smartphone market. The Mountain View, California, Goliath casts a big shadow over this whole episode.
Google has a lot at stake in this drama. The company's latest smartphone, the Droid X manufactured by Motorola and powered by the Google Android operating system, is flying off the shelves. In the race for market share, Droid is closing the gap with IPhone. Billions of dollars are riding on the outcome of this fierce competition.
Despite its carefully nurtured image, Google isn't above undertaking a stealth campaign to sink its competition. Behind the scenes, Goggle is prompting tech analysts, financial researchers and product evaluators to pile on. They are using their extensive contacts to prod the media frenzy that appears unlikely to abate any time soon. Unlike Apple, the folks at Goggle have cultivated a lovable image in the media, which has produced fawning coverage for a company intent on destroying competition.
That's why it was no surprise when Sen. Charles Schumer, a Democrat from New York, wrote an open letter last week to Jobs, urging him to be clearer with the public on the antenna problem. He called the "bumper" case offered by Jobs an "insufficient" solution. It would be wise for tech followers and Apple to take heed.
During the last presidential campaign, Google's managers and employees donated a reported $803,000 to President Obama's campaign. In addition, Google's CEO and other executives forked over another $25,000 each to help pay for the inaugural event. As a result, Google got a seat at the Washington table. A handful of ex-Google managers have joined the Obama administration. The most visible is Andrew McLaughlin, who serves as deputy chief technology officer for the administration. He is in a position to shape policy that impacts Google and its rivals.
Therefore, Schumer's outburst should not be dismissed as mere political grandstanding. He is tight with the Obama administration. You don't have to be a conspiracy theorist to wonder if perhaps Schumer was goaded into action by someone in the administration. A congressional hearing is the last thing Jobs and Apple need at this point. Even worse, regulators, such as the Federal Trade Commission, could step in and demand that Apple do more than offer a free "bumper" case.
With all the negative publicity enveloping the IPhone 4, you'd expect sales to tank. However, just the opposite has happened. Jobs said Apple has sold more than three million units since its introduction three weeks ago. The handset is on pace to break all previous smartphone sales records. Most stores that were contacted are quoting three-to-four week delivery time frames for the IPhone 4. Young people, in particular, are enraptured by the FaceTime video calling feature. Obviously, consumers aren't buying the smear campaign against Apple.
But don't expect the uproar to die down. The media smell Apple-red blood. New press accounts surfaced over the weekend about challenges faced by Apple's glass supplier. The report hinted there would be increasing delays in fulfilling IPhone 4 orders. The news heaped more negative publicity on Apple's new phone.
Apple must face the facts. This is an attack like none other that it has ever experienced. It is time to take off the gloves and go after Google. The Droid X is not without its problems, including a finicky touchscreen. If it waits too long, Jobs may find Apple looking up at Google's market share position in the smartphone category.
Friday, July 9, 2010
Factoids You Can Use
If you want your son or daughter to grow up to be a millionaire, the path to wealth is paved with a career as an application developer for smart phones. According to industry figures, there are now 225,000 apps available for the IPhone. More than 50 million IPhone handsets have been sold and the number is surging, thanks to the introduction of the latest model, dubbed The Four. With that many handsets, the app business has become a $4.1 billion gold rush. There were seven billion downloads of apps on the IPhone in 2009. That's just a drop in the bucket compared to some forecasts. By 2012, app downloads are expected to skyrocket to 50 billion. Revenues are anticipated to grow to $17.5 billion during that year, according to at least one industry follower. As a result of the rise in app revenue, some developers have become overnight millionaires. Forget that career advice about becoming a doctor, lawyer or Wall Street mogul. Teach your kids to grow up to be app developers.
Sunday, June 13, 2010
GPS: Locating an uncertain future
Global Positioning System (GPS) data is seeping into practically every segment of business and society. Trucking companies use it to manage their fleets. Surveyors use it to map streets. Businesses use it to control remote machines. Drivers use it to find their way on highways and streets. Sailors use it to navigate the seas. Golfers use it to measure distances on the course. Police use it to track stolen vehicles and monitor sex offenders. And that's just a partial list of uses.
In particular, the growth in automotive and consumer applications has contributed to a worldwide GPS boom, including in untapped markets outside the U.S. For that reason, the global market for mobile location technologies is expected to rise at a compounded annual growth rate of 20 percent. That means the worldwide GPS industry will top $70 billion by 2013, according to a new research study published on ReportLinker.
At first glance, that forecast appears to be great news for shareholders of TomTom and Garmin, the world's largest retailers of portable GPS-based navigation devices. However, the two heavyweights should be concerned about another trend that looms as a threat to their market dominance.
Cell phone handsets equipped with navigation applications are eating into the big two's market share for portable devices. By 2013, GPS-enabled handsets will account for 66 percent of the market share for portable devices, research suggests. Not good news for TomTom, Garmin and other device makers.
Consumer demand for cheaper navigation solutions is driving this trend. Voice-guided navigation systems with turn-by-turn directions are available today on the IPhone. For example, AT&T offers its Navigator app free, but the company charges $69.99 annually for the service. Magellan RoadMate and TomTom offer slightly lower priced applications. However, unlike the AT&T solution, the apps must be paired with expensive ($120-$130) car kits. Even that is cheaper than Garmin's new portable GPS unit, the NUVI 379OT, which retails for $449.99. TomTom's XXL 550 goes for $249. Application developers for IPhone will be able to exploit the price differential between the software solution and a dedicated navigation handset.
Consumer demand for navigation applications is robust. According to market research by J. Shapiro and Associates, 24 percent of today's cell phone users want navigation services on their next handset. Just six percent of cell phone users currently have the application. This underscores the pent-up demand for GPS technology on a single device that can not only function as a navigation tool, but perform other tasks as well.
The big portable navigation device makers recognize their products risk becoming the next CB radio. In fact, Garmin is hedging its bets with a smart phone of its own that uses Google's Andriod operating system. However, Garmin's track record in the cellular handset arena is lousy. Its earlier Nuvifone marketed in 2009 had many critics. Garmin claims it has fixed the problems and the sequel, called Garmin Fone, will be able to hold its own against other smart phones, especially at a retail price of $199. That sounds like wishful thinking. The folks at Apple probably aren't losing sleep over Garmin's latest entry into the smart phone market.
That isn't to gloss over the problems with current GPS applications on the IPhone and other smart devices. The sound quality for directions tends to be poor. Incoming phone calls disrupt the navigation guidance. Then there is the drain on battery life. All these issues contribute to some bad experiences with GPS on smart phones. But the issues are being addressed by handset makers. Given the growing importance of navigation applications, there is plenty of incentive for the handset manufacturers to solve these problems.
In the end, consumers will vote with their wallets. The bet here is that consumers will prefer a single device to meet the needs of voice, Internet and navigation. That means Garmin and TomTom's days are numbered. They won't disappear overnight. But remember you can still buy a CB radio, too.
In particular, the growth in automotive and consumer applications has contributed to a worldwide GPS boom, including in untapped markets outside the U.S. For that reason, the global market for mobile location technologies is expected to rise at a compounded annual growth rate of 20 percent. That means the worldwide GPS industry will top $70 billion by 2013, according to a new research study published on ReportLinker.
At first glance, that forecast appears to be great news for shareholders of TomTom and Garmin, the world's largest retailers of portable GPS-based navigation devices. However, the two heavyweights should be concerned about another trend that looms as a threat to their market dominance.
Cell phone handsets equipped with navigation applications are eating into the big two's market share for portable devices. By 2013, GPS-enabled handsets will account for 66 percent of the market share for portable devices, research suggests. Not good news for TomTom, Garmin and other device makers.
Consumer demand for cheaper navigation solutions is driving this trend. Voice-guided navigation systems with turn-by-turn directions are available today on the IPhone. For example, AT&T offers its Navigator app free, but the company charges $69.99 annually for the service. Magellan RoadMate and TomTom offer slightly lower priced applications. However, unlike the AT&T solution, the apps must be paired with expensive ($120-$130) car kits. Even that is cheaper than Garmin's new portable GPS unit, the NUVI 379OT, which retails for $449.99. TomTom's XXL 550 goes for $249. Application developers for IPhone will be able to exploit the price differential between the software solution and a dedicated navigation handset.
Consumer demand for navigation applications is robust. According to market research by J. Shapiro and Associates, 24 percent of today's cell phone users want navigation services on their next handset. Just six percent of cell phone users currently have the application. This underscores the pent-up demand for GPS technology on a single device that can not only function as a navigation tool, but perform other tasks as well.
The big portable navigation device makers recognize their products risk becoming the next CB radio. In fact, Garmin is hedging its bets with a smart phone of its own that uses Google's Andriod operating system. However, Garmin's track record in the cellular handset arena is lousy. Its earlier Nuvifone marketed in 2009 had many critics. Garmin claims it has fixed the problems and the sequel, called Garmin Fone, will be able to hold its own against other smart phones, especially at a retail price of $199. That sounds like wishful thinking. The folks at Apple probably aren't losing sleep over Garmin's latest entry into the smart phone market.
That isn't to gloss over the problems with current GPS applications on the IPhone and other smart devices. The sound quality for directions tends to be poor. Incoming phone calls disrupt the navigation guidance. Then there is the drain on battery life. All these issues contribute to some bad experiences with GPS on smart phones. But the issues are being addressed by handset makers. Given the growing importance of navigation applications, there is plenty of incentive for the handset manufacturers to solve these problems.
In the end, consumers will vote with their wallets. The bet here is that consumers will prefer a single device to meet the needs of voice, Internet and navigation. That means Garmin and TomTom's days are numbered. They won't disappear overnight. But remember you can still buy a CB radio, too.
Tuesday, June 8, 2010
Last Best Hope For Electric Cars
You are excused if you did not see the recent announcement about Tesla Motors, the one shining example of the future of electric cars. The news was buried in the small print in business sections of most newspapers, if it was covered at all. However, the news deserved more attention because Tesla Motors has the distinction of being the first U.S. company to produce and sell an all-electric car. That's no small feat when you consider the world's largest multi-billion auto manufacturers' plans for producing and retailing electric cars are still years away.
In its announcement, Tesla Motors and Toyota unveiled plans to work jointly on electric vehicle development and production. As part of the agreement, Toyota signaled that it will purchase $50 million of Tesla's common stock. Currently, Tesla is privately held, but it filed papers early this year with regulators, revealing its plan for an initial public offering. No date has been set for the IPO.
Perhaps, the lack of excitement about the investment can be traced to Tesla's checkered past. Its founder, entrepreneur Elon Musk, has been a mercurial leader for the motor company. Musk, who co-founded PayPal, has flitted between the car company and SpaceX, a private space exploration company he started. There also have been questions about the firm's financial viability. Since its founding, the company has lost about $290.2 million. Add on top of that, Musk's brushes with messy lawsuits and legal settlements during his tenure at the company, and it's little wonder skepticism runs deep. In addition, Tesla's public relations machine has often ginned up expectations that went unfulfilled. That has created a credibility gap that makes the media wary of any Tesla announcement.
Yet the Toyota investment could be the spark that jump starts mass production of electric cars. This is more than Toyota just throwing chump change at a potential competitor. Money aside, the real news is that Tesla has purchased a part of the former NUMMI manufacturing factory in Fremont, California. General Motors and Toyota had been sharing the facility until GM pulled out in June, 2009. Toyota produced its last car there in the plant a month ago.
What has always hamstrung any start-up car company has been mass production. Modern automobile plants require nearly a billion or so dollars to build, making mass production out of the reach for small firms. Producing a few hundred cars is all Tesla could manage on its own. Even with limited facilities, the Palo Alto-headquartered Tesla has manufactured 1,000 of its Roadsters, attracting a loyal if small following of car enthusiasts. The Roadster, equipped with a 375-volt AC induction air-cooled electric motor, looks like an European expensive sports car. The price tag is around $100,000, putting it out of the reach of ordinary Americans. Without mass production, the Roadster will remain a novelty.
However, Tesla has developed a sleek sedan, dubbed Model S, with a base price of $49,900 and a range of 300 miles on one electric charge. The car zooms from zero to sixty in a breathtaking 5.6 seconds. According to Tesla officials, the new model can be quick charged in a mere 45 minutes and is twice as efficient to operate as today's hybrids. If indeed the car can deliver on those numbers, then highway-capable electric cars could go mainstream faster than anyone imagined.
Another thing Tesla has going for it is the design. Its electric vehicles do not look anything like the prototypes the big auto companies have unwrapped in recent years. They share design traits with European sports cars, not the boxy hybrids being pumped out today. Why anyone would buy one is beyond me, unless it is a person wants to thump his chest and proclaim, "I am an environmentalist!"
The key to Tesla's success is producing enough cars to seriously contend with the big automakers. Mass production not only amps up the inventory, but it will bring down the per unit price of each electric vehicle sold, driving up profitability. That means it will be affordable to more Americans, a key to breaking through in the cluttered market place. If you heart rate isn't elevated over that prospect, then you are seriously in need of a pacemaker.
Of course, production doesn't guarantee sales. Big automakers have huge dealer distribution networks that seriously handicap small firms' ability to compete. This may remind you of the ill-fated DeLoren, which has disappeared from the automobile landscape, although it still has its share of devoted fans who cling to their cars.
To survive, Tesla needs to break the distribution mold. More cars are being sold over the Internet than ever before. Even brick-and-mortar dealers use the net to lure customers to their lots. One avenue for Tesla would be to strike an agreement with a firm such as Costco, a discount wholesaler with locations throughout the country. Tesla's cars could be showcased at the wholesaler's stores. Costco is already in the car business today, offering its customers discounts on automobiles. This would be a lot less expensive way to enter the market than building an extensive dealer network. Of course, Toyota already has its own huge worldwide distribution network that it could make available to Tesla.
Servicing is another huge stumbling block to new entrants. Dealer networks provide the maintenance, repair and service every car requires. Today, Tesla has so-called "service rangers" who make house calls to work on its Roadsters. Quaint, but it won't work for Tesla if it begins selling 20,000 cars a year. Again, the partnership with Toyota could be the answer.
However, Toyota also has announced its own plans to market an electric vehicle in 2012. No one knows how this will impact its allegiance with Tesla or even if Toyota will be able to get its electric vehicle production ramped up by that date. There has been lots of talk from the big auto manufacturers about electric cars, but not much to show for all the hype. That's why its best to wait and see what happens. This could turn out to be another false start for the electric vehicle as a mainstream replacement for gasoline powered cars.
All that said, there is cause for hope. Tesla has actually produced and sold a world class, highway drivable electric car, something no big automaker can claim. Tesla Roadster owners seem to love the vehicle. It has the looks and performance to turn any potential buyer's head. Now if Tesla will not muck up this opportunity with Toyota, there just might be an electric car in every one's future.
In its announcement, Tesla Motors and Toyota unveiled plans to work jointly on electric vehicle development and production. As part of the agreement, Toyota signaled that it will purchase $50 million of Tesla's common stock. Currently, Tesla is privately held, but it filed papers early this year with regulators, revealing its plan for an initial public offering. No date has been set for the IPO.
Perhaps, the lack of excitement about the investment can be traced to Tesla's checkered past. Its founder, entrepreneur Elon Musk, has been a mercurial leader for the motor company. Musk, who co-founded PayPal, has flitted between the car company and SpaceX, a private space exploration company he started. There also have been questions about the firm's financial viability. Since its founding, the company has lost about $290.2 million. Add on top of that, Musk's brushes with messy lawsuits and legal settlements during his tenure at the company, and it's little wonder skepticism runs deep. In addition, Tesla's public relations machine has often ginned up expectations that went unfulfilled. That has created a credibility gap that makes the media wary of any Tesla announcement.
Yet the Toyota investment could be the spark that jump starts mass production of electric cars. This is more than Toyota just throwing chump change at a potential competitor. Money aside, the real news is that Tesla has purchased a part of the former NUMMI manufacturing factory in Fremont, California. General Motors and Toyota had been sharing the facility until GM pulled out in June, 2009. Toyota produced its last car there in the plant a month ago.
What has always hamstrung any start-up car company has been mass production. Modern automobile plants require nearly a billion or so dollars to build, making mass production out of the reach for small firms. Producing a few hundred cars is all Tesla could manage on its own. Even with limited facilities, the Palo Alto-headquartered Tesla has manufactured 1,000 of its Roadsters, attracting a loyal if small following of car enthusiasts. The Roadster, equipped with a 375-volt AC induction air-cooled electric motor, looks like an European expensive sports car. The price tag is around $100,000, putting it out of the reach of ordinary Americans. Without mass production, the Roadster will remain a novelty.
However, Tesla has developed a sleek sedan, dubbed Model S, with a base price of $49,900 and a range of 300 miles on one electric charge. The car zooms from zero to sixty in a breathtaking 5.6 seconds. According to Tesla officials, the new model can be quick charged in a mere 45 minutes and is twice as efficient to operate as today's hybrids. If indeed the car can deliver on those numbers, then highway-capable electric cars could go mainstream faster than anyone imagined.
Another thing Tesla has going for it is the design. Its electric vehicles do not look anything like the prototypes the big auto companies have unwrapped in recent years. They share design traits with European sports cars, not the boxy hybrids being pumped out today. Why anyone would buy one is beyond me, unless it is a person wants to thump his chest and proclaim, "I am an environmentalist!"
The key to Tesla's success is producing enough cars to seriously contend with the big automakers. Mass production not only amps up the inventory, but it will bring down the per unit price of each electric vehicle sold, driving up profitability. That means it will be affordable to more Americans, a key to breaking through in the cluttered market place. If you heart rate isn't elevated over that prospect, then you are seriously in need of a pacemaker.
Of course, production doesn't guarantee sales. Big automakers have huge dealer distribution networks that seriously handicap small firms' ability to compete. This may remind you of the ill-fated DeLoren, which has disappeared from the automobile landscape, although it still has its share of devoted fans who cling to their cars.
To survive, Tesla needs to break the distribution mold. More cars are being sold over the Internet than ever before. Even brick-and-mortar dealers use the net to lure customers to their lots. One avenue for Tesla would be to strike an agreement with a firm such as Costco, a discount wholesaler with locations throughout the country. Tesla's cars could be showcased at the wholesaler's stores. Costco is already in the car business today, offering its customers discounts on automobiles. This would be a lot less expensive way to enter the market than building an extensive dealer network. Of course, Toyota already has its own huge worldwide distribution network that it could make available to Tesla.
Servicing is another huge stumbling block to new entrants. Dealer networks provide the maintenance, repair and service every car requires. Today, Tesla has so-called "service rangers" who make house calls to work on its Roadsters. Quaint, but it won't work for Tesla if it begins selling 20,000 cars a year. Again, the partnership with Toyota could be the answer.
However, Toyota also has announced its own plans to market an electric vehicle in 2012. No one knows how this will impact its allegiance with Tesla or even if Toyota will be able to get its electric vehicle production ramped up by that date. There has been lots of talk from the big auto manufacturers about electric cars, but not much to show for all the hype. That's why its best to wait and see what happens. This could turn out to be another false start for the electric vehicle as a mainstream replacement for gasoline powered cars.
All that said, there is cause for hope. Tesla has actually produced and sold a world class, highway drivable electric car, something no big automaker can claim. Tesla Roadster owners seem to love the vehicle. It has the looks and performance to turn any potential buyer's head. Now if Tesla will not muck up this opportunity with Toyota, there just might be an electric car in every one's future.
Friday, May 21, 2010
Factoids That You Can Use
Recent research from a variety of sources underscores the glacial shift from wired to untethered telephone usage. Cell phones are so pervasive that 234 million Americans or 78 percent of the total population now subscribes to service. Meanwhile, the Federal Communications Commission estimates that land lines or wired telephone subscribers have dipped by 37 percent since 2000. This trend is unlikely to reverse, since demographic research indicates that those 30 years of age and younger are most likely to dump their land line for exclusive mobile service. The mobile phone manufacturers and operators are ramping up advertising and marketing to take advantage of the trend. Over the next five years, ABI research predicts expenditures will grow at a compounded annual rate of more than 40 percent. In the battle between the country's two largest wireless operators, Verizon held the largest market share at 31.1 percent. However, the firm lost share to AT&T during the most recent quarter. AT&T raised its market share to 25.2 percent. Developments to watch: more than 30 percent of all subscribers are using web browsers on their mobile devices, while 28.6 percent have downloaded applications for their phones. No question both will drive higher usage, straining already overtaxed networks.
Friday, April 16, 2010
The Next Big Thing: Free TV
Emerging firms with names like Crackle, Free TV, Spreety and Hulu are changing the way we watch television. They are offering television programs online for viewing at no cost. This development threatens the business models of the $84 billion cable, satellite and telephone company television access industry.
Some industry watchers are dismissing the impact because the numbers of viewers remain minuscule. According to Convergence Consulting Group, last year 800,000 households unplugged their cable or other provider's service and decided to use online services to watch television programs. It is a tiny number when compared to the estimated 101 million subscribers who watch "regular" television.
However, it may signal a coming tidal wave as viewers opt out of their current provider and flee to the Internet. At the end of 2011, some analysts expect the number of customers who unplug their provider will double to 1.6 million viewers. But those numbers don't tell the whole story. An estimated 17 percent of today's television audience views at least one program of a full-length TV show every week. As those viewers become come accustomed to getting their television online, more will join the growing ranks of those who unplug their provider.
So what is driving this development? Here is a partial list of reasons:
1. People view the PC as a more personal way of watching video than a television. For one thing, the content is always available on line whenever they want. If you don't have a DVR, you may miss a program and never be able to see it. Also, laptop PC's can be carried wherever you want to watch a program. Viewers aren't tethered to their hard-wired television. In addition, the content can be viewed on a host of other devices, including their cell phones. This portability issue is growing in importance, especially among younger viewers.
2. PC's have improved video capabilities, which is helping to change viewing habits. Screens are near HDTV quality. Sound quality has improved significantly. The real game-changer will be the recently introduced IPad. It offers 720p resolution, which produces a picture that is stunning. The IPad increases portability for viewers who prefer online television over the cable, satellite and telephone solution. The device will fuel more content providers to offer programming online that can be easily downloaded on the IPad. It's coming and sooner than most think.
3. There are more tools online to help viewers navigate the bucket-load of content that exists on "regular" television. You can take online content and move it around to your cell phone, media player or other device. A growing number of search engines are available on the Internet to allow users to find episodes and programming content for delivery. While cable, satellite and telephone companies offer some search capabilities, the solutions pale when compared to what's available on the Internet. What good is 500 channels if you can't find what you want? People get discouraged and reduce their channel packages, which means lost revenue for the providers.
4. Television providers' revenue model is outdated and will lead to its downfall. Cable, satellite and telephone companies push bundles of programming. The more packages, the higher the revenue from subscribers. These same firms have staunchly opposed a la carte pricing. It is not in their economic interest to let subscribers choose only the programs they want to view. The reason is simple: the providers want to spread the cost of content across as a large a base of subscribers as possible. Great for the providers, but not so popular with subscribers. This is one reason why many are fleeing to free television. These viewers can get only the shows they watch and nothing else. Unless the big providers address this issue, their subscriber base will continue to erode.
If the giant television providers choose to fight the wave, instead of riding it, they will drown in their own greed. Those providers who move first to address this online growth will win. Check out what has happened in the music and book industries. They fought "free" online content and lost millions in the process before changing their pricing models. Will television providers choose the same path?
My guess is that most providers will fight rather than change. By doing so, they risk ceding the market to the Internet.
Some industry watchers are dismissing the impact because the numbers of viewers remain minuscule. According to Convergence Consulting Group, last year 800,000 households unplugged their cable or other provider's service and decided to use online services to watch television programs. It is a tiny number when compared to the estimated 101 million subscribers who watch "regular" television.
However, it may signal a coming tidal wave as viewers opt out of their current provider and flee to the Internet. At the end of 2011, some analysts expect the number of customers who unplug their provider will double to 1.6 million viewers. But those numbers don't tell the whole story. An estimated 17 percent of today's television audience views at least one program of a full-length TV show every week. As those viewers become come accustomed to getting their television online, more will join the growing ranks of those who unplug their provider.
So what is driving this development? Here is a partial list of reasons:
1. People view the PC as a more personal way of watching video than a television. For one thing, the content is always available on line whenever they want. If you don't have a DVR, you may miss a program and never be able to see it. Also, laptop PC's can be carried wherever you want to watch a program. Viewers aren't tethered to their hard-wired television. In addition, the content can be viewed on a host of other devices, including their cell phones. This portability issue is growing in importance, especially among younger viewers.
2. PC's have improved video capabilities, which is helping to change viewing habits. Screens are near HDTV quality. Sound quality has improved significantly. The real game-changer will be the recently introduced IPad. It offers 720p resolution, which produces a picture that is stunning. The IPad increases portability for viewers who prefer online television over the cable, satellite and telephone solution. The device will fuel more content providers to offer programming online that can be easily downloaded on the IPad. It's coming and sooner than most think.
3. There are more tools online to help viewers navigate the bucket-load of content that exists on "regular" television. You can take online content and move it around to your cell phone, media player or other device. A growing number of search engines are available on the Internet to allow users to find episodes and programming content for delivery. While cable, satellite and telephone companies offer some search capabilities, the solutions pale when compared to what's available on the Internet. What good is 500 channels if you can't find what you want? People get discouraged and reduce their channel packages, which means lost revenue for the providers.
4. Television providers' revenue model is outdated and will lead to its downfall. Cable, satellite and telephone companies push bundles of programming. The more packages, the higher the revenue from subscribers. These same firms have staunchly opposed a la carte pricing. It is not in their economic interest to let subscribers choose only the programs they want to view. The reason is simple: the providers want to spread the cost of content across as a large a base of subscribers as possible. Great for the providers, but not so popular with subscribers. This is one reason why many are fleeing to free television. These viewers can get only the shows they watch and nothing else. Unless the big providers address this issue, their subscriber base will continue to erode.
If the giant television providers choose to fight the wave, instead of riding it, they will drown in their own greed. Those providers who move first to address this online growth will win. Check out what has happened in the music and book industries. They fought "free" online content and lost millions in the process before changing their pricing models. Will television providers choose the same path?
My guess is that most providers will fight rather than change. By doing so, they risk ceding the market to the Internet.
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