Even when Apple is losing, it wins
The Department of Justice, as anticipated, filed suit Wednesday against Apple and five of the Big Six publishers over alleged price-fixing. Three of those publishers have entered into a proposed settlement with the DOJ, but Apple is still on the hook.
We won’t know until we know whether Apple will win, lose or settle (and now there are 16 states piling on the charges, too), but in a way it’s a sort of hapless victim. If the DOJ theory is correct, Apple did participate in a sort of conspiracy, but one driven (again, according to the allegations) by publishers that were determined to keep controlling e-book prices. In the beginning of the e-book industry it was the publishers, not Apple, that had the upper hand.
It’s important to remember the climate in which this alleged conspiracy unfolded. Amazon, against publishers’ wishes, was going rogue with $10 e-books. The mammoth online retailer – which got its start in print books but essentially created the e-book business – was widely thought to be making nothing, or next to zero, on its proprietarily encoded e-books, the better to boost demand for the Kindle.
It was classic razor-and-blades: You want to make money on the razor, so you almost give away the blades, except only your razor can hold the free blades. But in e-books it’s an even better deal. Amazon doesn’t make e-books, and they are virtual goods, requiring no inventory and little overhead in the traditional sense.
But the publishing industry was displeased with Amazon’s new $10 regime. While it was beating on Amazon to change its ways, Macmillan – whose titles at the time included the best sellers Wolf Hall and The Gathering Storm – and Apple were negotiating terms for the iPad maker’s new offering: iBooks. Apple, unlike Amazon, was willing to play by Macmillan’s – and thus the publishers’ – rules.
In Apple’s agreeing to terms from publishers that Amazon had resisted for as long as it could, a number of things occurred. It was high-stakes poker, with most of the cards still face down:
- Apple, always fearsome in prospect if not in practice (can you say iAds?), got all the deals it needed to be a credible e-book player with its new platform.
- The publishers got a new, and potentially fearsome, retailing partner that agreed to see things their way.
- That new dynamic had the immediate effect of making Amazon’s market power less fearsome.
Trolling for a tech showdown
The scene: A federal courtroom in Tyler, Texas.
The drama: A lawsuit by a patent troll who said he owned the rights to the “interactive web.” The troll says he’s owed some back rent for owning the Web we all use every day.
Dramatis persona: Tim Berners-Lee. Perhaps you’ve heard of him. He invented the World Wide Web.
Oh, to have been in Tyler. It was the stage for a showdown in one of the most bizarre patent troll cases ever, pitting (metaphorically if not in fact) expert witness Berners-Lee against some punk who wanted to make his name by taking out a very, very big gun in a shootout. The plaintiff, Eolas, claimed it owned patents that entitled it to royalties from anyone whose website used “interactive” features, like pictures that the visitor can manipulate, or streaming video. The claim, by Eolas’s owner, Chicago biologist Michael Doyle, was that his was the first computer program enabling an “interactive web.”
If Texas was still the Wild West this might have been settled at High Noon at some dusty, just O.K. Corral, with single-action Colt .45 revolvers. There was no gunplay, but for geekdom the calm morning testimony in an air-conditioned courtroom was just as exciting.
On Wednesday, Jennifer Doan, a Texarkana lawyer representing defendants Yahoo and Amazon, examined Berners-Lee for the plaintiffs, which include Google, Amazon and Yahoo. An excerpt from Wired‘s report:
When Berners-Lee invented the web, did he apply for a patent on it, Doan asked.
“No,” said Berners-Lee.
“Why not?” asked Doan.
“The internet was already around. I was taking hypertext, and it was around a long time too. I was taking stuff we knew how to do…. All I was doing was putting together bits that had been around for years in a particular combination to meet the needs that I have.”
Doan: “And who owns the web?”
Berners-Lee: “We do.”
Doan: “The web we all own, is it ‘interactive’?”
“It is pretty interactive, yeah,” said Berners-Lee, smiling.
@danbri Quite right! That last reference was a bad boo boo.
Tech wrap: Zappos hacked
Online shoe retailer Zappos told customers this weekend that it has been the victim of a cyber attack affecting more than 24 million customer accounts in its database. The popular retailer, which is owned by Amazon.com, said customers’ names, email addresses, billing and shipping addresses, phone numbers and the last four digits of credit card numbers and scrambled passwords were stolen. The company, which is well known for its customer service, said due to the high volume of customer calls it is expecting it will temporarily switch off its phones and direct customers to contact via email.
Hackers disrupted online access to the Tel Aviv Stock Exchange, El Al Airlines and three banks in what the government described as a cyber-offensive against Israel. The attacks came just days after an unidentified hacker, proclaiming Palestinian sympathies, posted the details of thousands of Israeli credit card holders and other personal information on the Internet in a mass theft. Israel opened an agency to tackle cyber attacks earlier this month.
A hacker who goes by the name of “Yama Tough” threatened Saturday to release the full source code for Symantec’s flagship Norton Antivirus software on Tuesday. Last week, Yama Tough released fragments of source code from Symantec products along with a cache of emails. The hacker said all the data was taken from Indian government servers.
Use of microblogging in China quadrupled in 2011 compared with the previous year, with nearly half of all Chinese Internet users now taking to the near-instant service to gather news and spread views, a government Internet think tank said. Microblogging, or “Weibo” as it is known in China, allows users to send short messages of 140 characters or less to their followers. The total number of Weibo users rose 296 percent to 249.9 million in 2011, data from the China Internet Network Information Center showed.
The long-term approach of major Japanese investors, combined with an aversion to foreign and hostile takeovers and uncertainty over lawsuits stemming from the $1.7 billion accounting scandal, will likely make any change of ownership at Olympus a gradual process, writes Isabel Reynolds. Olympus is expected to stay listed for the time being and sources with the company’s powerful main bankers, who are also shareholders, say they would be prepared to wait for the firm to recover on its own.
Zappos is giving everyone a lesson on managing a data breach that everyone who may ever have to deal with the problem should look to for guidance. There is a lot to be learned. People understand that such things happen and, unless you’ve been egregiously lax in protecting their account information, will give you the benefit of the doubt. How you respond to the crisis will be what determines whether or not the issue is resolved with minimal damage or it deteriorates into a PR disaster.
As I said, Zappos is giving us a real-time lesson on how to do crisis management properly and we should all be taking notes. For a more detailed analysis: http://blog.unibulmerchantservices.com/z appos-is-giving-us-a-lesson-on-managing- a-data-breach
Tech wrap: RIM’s “BBM” trademark target of new legal challenge
Research In Motion, still smarting over having to change the name of its yet-to-come operating system, faces a similar trademark challenge to its popular instant-messaging service BlackBerry Messenger. The service, which allows BlackBerry users to send each other text and multimedia files and see when they are delivered and read, is widely known and even promoted by RIM via the shorthand BBM. That has proven an encumbrance to BBM Canada, which measures radio and television audience data and expects its day in a Federal Court against RIM by February.
RIM seems determined to keep using the BBM name and not to pay BBM anything. “We believe that BBM Canada is attempting to obtain trademark protection for the BBM acronym that is well beyond the narrow range of the services it provides and well beyond the scope of rights afforded by Canadian trademark law,” it said in an emailed statement.
Facebook, Google and Yahoo, and other internet firms, have been ordered by two Indian courts to remove material considered religiously offensive, the latest skirmish in a growing battle over website content in the world’s largest democracy. One court in the capital Delhi on Friday issued summons to 19 companies to stand trial for offences relating to distributing obscene material to minors, after being shown images it said were offensive to Hindus, Muslims and Christians, the PTI news agency said.
Digital goods are the fastest-growing category online this holiday, led by e-books, suggesting Amazon.com Inc’s strategy of blanketing the world with cheap e-readers and tablet computers may be producing some early gains. Sales of digital goods, which also include music and videos, are up about 30 percent this holiday season, compared to the same period last year, according to comScore data.
AT&T Inc said late on Thursday that it won regulatory approval to buy wireless spectrum from U.S. chipmaker Qualcomm Inc, a move that would boost the company’s 4G network. AT&T is buying 700 megahertz (MHz) airwaves for about $1.93 billion, with the aim of countering criticism over iPhone service quality and competitive threats from rivals like Verizon Wireless.
The backlash against twenty-four-hour connectivity has started. Carmaker Volkswagen has agreed to deactivate e-mails on German staff Blackberry devices out of office hours to give them a break. Under an agreement with labor representatives, staff at Europe’s biggest automaker will receive e-mails via Blackberry from half an hour before they start work until half an hour after they finish, and will be in blackout-mode the rest of the time, a spokesman for VW said.
If Spotify fails, blame the Internet’s grim economics
If anyone has a serious beef with the music labels, it’s Michael Robertson. Robertson took MP3.com public in 1999, only to later to pay tens of millions of dollars to labels that sued the startup, claiming storing songs on servers infringed their copyrights. Fast forward to today: A new wave of music startups like Spotify, MOG and Rdio stream songs from servers with the labels’ blessings. It might all be above board now, but the labels are still bleeding the digital-music services dry.
That was Robertson’s claim in an detailed and elegant jeremiad against the big labels. He claims that Spotify and its peers will never make a profit because of secret, onerous terms that act as a financial straightjacket for the startups, snoop on their users’ data and border on collision. Others were quick to suggest that it’s the music-streaming services that are being stingy. After all, by some calculations, an artist could have a song streamed 4 million times on Spotify and make just $1,200
So who is right? Both. And that’s bad for everyone. Music labels, being greedy music labels, want a profit. Desperate for a piece of a music-streaming market that isn’t going away, they are asking for everything they can in the name of rewarding artists (and investors). But the digital music services like Spotify need a low subscription fee – usually $10 to $15 a month for an all-you-can-eat plan – to build a critical mass of subscribers.
Ten bucks a month for streaming music looks a bit steep if you compare it to Netflix’s $8 monthly fee for streaming video. Or it’s a great deal, if you compare it to, say, the $65 or more that longtime Comcast subscribers pay for cable. But that’s just the problem. Comcast is expensive because it’s cable, and Netflix is cheap because it’s the Internet. We say information wants to be free online, but what we really mean is we want it cheap.
So when we ask who is to blame for the dismal economics of digital music, we shouldn’t point to piracy. That’s a scapegoat that nobody but the labels takes seriously anymore. The true culprit lies elsewhere. It’s just the Internet doing what it does – breaking down the walls and removing the friction that for decades made it such a slog to find and discover new things to hear, to watch, to read.
And we love the Internet for this. We love having several millions songs on tap – playing them when we want, where we want. But the flip side is that this new cornucopia of on-demand music is upsetting the balance of supply and demand that was the standard for decades. The friction-free Internet has brought us so much more music to listen to. But it hasn’t increased the amount of money that people have to pay for it.
Good sir i beg to differ PIRACY indeed does make things more crappy for us the people if you believe it is not the culprit then i do not find this article relevant
Tech wrap: RIM under fire ahead of results
Research In Motion faced renewed calls for a change in its leadership on Thursday, hours ahead of the quarterly results that could fuel criticism over the BlackBerry maker’s poor performance and sagging share price.
Jaguar Financial, an activist shareholder that has asked the BlackBerry maker to sell itself in whole or parts, once again called on two of RIM’s independent directors to push for a separation of the roles of chairman and chief executive.
Bloomberg reports that Zynga updated its initial public offering filing to expand on the risks of losing its chief executive officer after Google Chairman Eric Schmidt called him a “a fearsome, strong negotiator.”
Amazon.com said on Thursday it is selling more than one million Kindle devices a week, an unusual disclosure from the largest Internet retailer that comes in the wake of some negative reviews of its new Kindle Fire tablet.
Chris Maxcer of MacNews World has a look at the most momentous moments the past year at Apple.
Finally, U.S. soldiers facing emotional problems and contemplating suicide may soon be able to use a smart phone application to connect them to help.
But MS don’t need RIM
RIM is a software company, it live on SW, if it live on device manufacturing like MOTO, it has been died 10 death, that is why RIM quick down whenever their SW got problem, RIM got problem,
Device manufacturing need abilities like efficient process, low cost high performance design,….., when new hired employee introduce efficient concept to RIM, they lay them off, they don’t think those is important for a device producer in their mind, they dont want to change, they are software student from university,
google is a software company, they want hardware like moto, nokia, they dont want RIM, so will microsoft want RI
Great artists steal, tablet edition
By Aaron Presssman The opinions expressed are his own.
“Good artists copy, great artists steal.” – Pablo Picasso via 1994 Steve Jobs
Amazon’s new Kindle Fire tablet seems like the anti-iPad to many. With its chunky design, smaller low resolution screen and occasionally stuttering software interface, the Fire has been blasted by some of the iPad’s biggest fans. And they’ve predicted it too will end up on the growing trash heap of previous iPad competitors that arrived with high expectations only to be found selling on Woot for 75 percent off six months later.
But a lot of people seem to have missed that while this latest creation from Amazon CEO Jeff Bezos does not copy the iPad, it flat out steals more than a few of Steve Jobs best ideas. And those pilfered ideas will — pardon the pun — ignite sales of the Fire well past the ranks of the earlier crash and burn crowd and their slavish copies of the iPad’s look and feel.
With a price less than half that of the iPad, the Fire doesn’t have to do everything the iPad can do. Instead, it does 80 percent of what people actually do with their iPads – watch video, surf the web, check Facebook, play games – in a way that passes the test of “good enough.” It’s Amazon’s Honda Accord to Apple’s BMW 5-series sedan.
The most important concept swiped from Apple is the wide ranging and easily accessed ecosystem of content for Fire users.
Via its iTunes Store, Apple has long offered the most straightforward and well-stocked storefront of digital delights. From any iPad, it’s one simple click to get to the iTunes store and another click or two to buy music, movies, books, TV shows and more.
One thing neither B&N or Amazon have copied: Making any money off the device itself. They may even be losing money. It’s an old strategy to give away razors to sell blades, but Apple makes lots of money off the hardware, and lots off their cut of apps, which still attract outsized developer interest over Android (at least when it comes to tablets). So I think Apple’s agita index will remain quite low for the foreseeable future.
The bearable lightness of tab-lites
But fixing something seems to be what Amazon and Barnes & Noble are doing with new tablets which burnish their stable of e-readers beyond e-ink and into an entirely new arena still dominated by the iPad.
In recent weeks we saw the unveiling of Amazon’s Kindle Fire and Barnes & Noble’s Nook Tablet, a faster/lighter/smarter version of the discounted, year-old Nook Color. With the high-end becoming even higher it’s now possible to pay as little as $80 for Amazon’s entry-level Kindle e-reader and as much as $250 for a Nook Tablet, with plenty of other options in between.
In other words, e-readers have become so widely accepted that there is room for flavors and price points to be all over the map, just like there are a multitude of iPods when there was once only one.
But does the reading public really need what isn’t so much an improvement on the e-ink reader but an attempt to eat a bit of Apple’s lunch? Is it confusing — or clarifying — to have tablet readers from two of the major innovators in the e-ink revolution?
Jeff Bezos made it clear in an interview with Wired that, as far as he is concerned, the Amazon Fire tablet is clarifying. “They’re going to buy both,” he told Steven Levy, when asked whether his customers would favor the e-ink reader he had previously evangelized to the exclusion of all else. A year earlier he told Levy that tablets and e-ink readers preached to non-overlapping choirs. “It’s a different audience,” Bezos said. “We’re designing for people who want to read.”
That was then. This is now.
Ok, developing relatively inexpensive tablets as e-readings devices with benefits isn’t necessarily a bad idea when the undisputed leader is $500 and, not counting used or late models, isn’t likely to be sold for less any time soon. After all, nobody has yet to come up with something that can last one round against Apple’s tablet, much less be considered an iPad killer.
I think all three devices are the solution although not carried at the same time. My Sony Reader is mostly a stay at home and is used for the heavy duty reading that makes the eInk screen a blessing for the eyes. iPad goes traveling with all its great ability to stay connected. And its screen is OK for the light reading of a trip: travel guide and bedtime novel. And of course the phone all the time.
I think B&N and Amazon have to be careful marketing. A lot of people who would be so pleased with just an eInk reader are going to buy something they will not like as much because it is the “best” or more exepensive one.
Tech wrap: Can Nook tablet take on Kindle Fire?
Let the low-end tablet wars begin. Barnes & Noble unveiled a Nook-branded tablet on Monday, the company’s answer to Amazon.com’s recently announced Kindle Fire. At $249, the 7-inch Nook tablet is a bit pricier than the $199 Fire, but Barnes & Noble is betting that consumers will pay the extra $50 for the device because it offers faster processing speeds and 16 gigabytes of storage space compared to the Amazon tablet’s 8 gigabytes. Both devices hit shelves next week. Barnes & Noble, which operates a chain of 700 U.S. bookstores, also lowered the price on its Nook e-book devices in an effort to take on Amazon’s line of Kindle e-readers, which were recently reduced in price.
Early reaction to the device was varied. One analyst characterized it to Reuters as a “wow” product, while another said it will keep “Barnes & Noble shoppers loyal.” All Things D’s Peter Kafka called Barnes & Noble’s product pitch “a bit muddled” when it came to explaining how people will access content on the device: “Unlike Amazon and its Kindle Fire, Barnes & Noble isn’t marketing its tablet with a proprietary cloud service that will get you access to music, movies and TV shows. Instead, the bookseller is leaving that up to other cloud-based services, like Netflix and Pandora. But make no mistake — these are cloud-based services,” he writes. Why then was the company so eager to play up the Nook Tablet’s extra storage capacity if it expects you’ll be streaming most content, not storing it, wonders Kafka. Engadget takes the new tablet through its paces in a hands-on video.
Google+ expanded its circles to make room for businesses who are looking to reach out to customers on the social network. Called Google+ Pages, the new service will allow corporate brands and businesses to set up a special page within the social network . Google said that 20 businesses, including Toyota, Pepsi and retailer Macy’s, have set up special pages so far, and that any organization will soon be able to join as well. Until now, only individual users have been able to sign up for Google+. Businesses are increasingly using online social services, such as Facebook, to reach new customers and to cement relationships with loyal customers through special offers and promotions.
A German court granted a preliminary injunction against Apple in a patent infringement case that banned the California company from selling some devices in Germany. But the ruling should not impact Apple’s sales in Germany as the company sells all its product there through a local subsidiary, which was not covered by the injunction, reports Reuters correspondent Poornima Gupta. The district court in Mannheim, Germany, said on Friday Apple may not sell certain mobile devices in Germany that infringe on two Motorola Mobility patents related to wireless technology. If Apple does sell the devices, it has to pay a fine of up to 250,000 euros, according to the court.
HTC said on Monday it will put equal investment weight on emerging markets next year as it does in developed ones like the U.S. and Europe, and will dip its toes back into the tablet market with a new model next year, reports Reuters correspondent Clare Jim from Taipei. HTC CEO Peter Chou told a media briefing HTC would not give up its “premium brand” image by expanding in emerging markets through cheap phones. Regarding tablets, Chou said: “Tablet is a market we would like to try and test, to see whether we can make ourselves stand out and prevent a me-too product.”
Tech wrap: U.S. spies Chinese and Russian cyber spies
China and Russia are using cyber espionage to steal U.S. trade and technology secrets to bolster their own economic development, which poses a threat to U.S. prosperity and security, a U.S. intelligence report titled “Foreign Spies Stealing U.S. Economic Secrets in Cyberspace,” said. Intelligence services, private companies, academic institutions and citizens of dozens of countries target the United States, the report said. But it only named China and Russia. “Chinese actors are the world’s most active and persistent perpetrators of economic espionage,” the report said.
Online retailer Amazon.com added library to the list of services it offers. Kindle tablet owners with the Prime membership can choose from thousands of books to borrow for free on a Kindle device, including more than 100 current and former New York Times bestsellers, as frequently as a book a month, the company said. Amazon will initially offer slightly more than 5,000 titles in the library, including more than 100 current and former national bestsellers, such as Stephen R. Covey’s “The 7 Habits of Highly Effective People,” The Wall Street Journal reported.
Eastman Kodak warned that it must raise $500 million in new debt or complete a multibillion dollar patent sale to survive the next 12 months. The photography company also posted dismal third-quarter results, with cash holdings down 10 percent from the second quarter, and it projected deeper losses this year as new printers and digital cameras failed to gain traction. Kodak hired investment bank Lazard in July to help it sell more than 1,100 digital imaging patents, which analysts have estimated could be worth as much as $2 billion to $3 billion.
Apple said it will release a software update to its iOS 5 operating system, acknowledging some customer complaints on the performance of the new iPhone 4S battery. Apple did not provide any more details but a rash of complaints on the new phone’s short battery life have cropped up in online forums.
