Monthly Archives: January 2008

A Million Unlocked iPhones Being Shown Off All Around the World – That’s a Tragedy?

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Even if the numbers of a million iPhones being unlocked are correct, that’s a MILLION iPhones walking around all over the world as FREE marketing and advertising for Apple – the most effective advertising of all – because it gives those users the cachet of doing something “not quite legal.” That they are “above the law,” and of course, eager to show off they know how to break the rules of normal society … (in reality, they just bought a phone but shhh, don’t tell them that 😉 )

Has Apple sold them a phone subsidized like nearly every phone on Earth at a 75-100% discount? No. Apple got full list price – even if someone marked it up, Apple made at least $399 or £299.

As for the revenue they are giving up that is recorded as future revenue in monthly chunks? Sure, but when you have to service cash, there are costs associated with servicing that cash …

Conversely, they also give up a lot of costs associated with it and saves them a lot of money. They don’t have to offer any tech support or service for these 1-million phones. How much accounting reserve is set aside normally for phone tech support that are locked to a service?

But it’s all just a gray number because how many tech-gadget companies would turn down an opportunity to seed a product in dozens of countries to build awareness & word of mouth? How much money would they have to spend to demo this product in dozens of countries – and less efficient than a “worldly” fan using word-of-mouth and a live demo to his/her friends? What could be better chachet than spending full price to own an “illegal” phone? AND then when the phone is available legally in that country? Won’t they be likely the first to convert anyway to get all the feature sets?

Isn’t all this worth the $10 dollars in revenue per month Apple “loses” (per person) if the phone were locked to its native carrier? Might this not be the CHEAPEST advertising possible AND Apple gets all the revenue upfront without having to share with anyone?

And of course, an “unlocked” phone is still entitled to the full range of services that the iTunes store sells. Of course, that varies from country to country but the most convenient choice is still the iTunes store. So it really a tragedy if Apple trades $10 from AT&T or Orange and instead sells a few iTunes movies, music tracks or videos?

It’s like anything else. When you sell something, you hope to garner a revenue stream down the line – as a car dealer hopes you always bring it back to them for service but at the end of the day, if you sold it at full price, then the rest is gravy.

Sure, you can view the future revenue stream as a 100% loss in accounting terms but if you look at the broader implications, it’s simply a tradeoff in overhead, advertising, marketing and a shift in revenues and expenses.

NY Times readers chime in on doing their part in advertising the iPhone everywhere around the world.

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Filed under Advertising, Apple, Computing, Design, Film, Financial, Gadgets, Internet, iPhone, Marketing, mobile, Music, Retail, TV

Amazon Mp3 Will Affect Amazon Revenue More Than Apple’s iPod or iTunes

It’s pretty amazing the number of journalists who don’t look at a situation before just plowing ahead and writing words and “a conclusion.” They either choose to ignore the real world or they simply don’t understand it. Either way, it’s appalling.

Yes, Amazon’s entry into the “unlocked” DRM free Mp3 market will affect Apple & the iPod but its *affect* is DIFFERENT than you think.

If the iPod did NOT play the mp3 format, it would clearly have a major affect – just as when Sony’s players did not play Mp3’s directly (it would convert to ATRA mp3), when the iPod entered the market, people quickly choose the iPod over the Sony for the simple reason it played mp3’s very easily and transparently. Yes, the iPod looked nice and it was easy to use but if it did not play Mp3’s – there might be a few million out there versus 150 million.

There is no discussion. Mp3 is the preferred format for LEGAL and ILLEGAL downloads. Yes, there are others that hold some interest: mp4, FLAC, APE and even WMA but I don’t think anyone is going to argue that the preferred format OVERWHELMINGLY is not mp3 … sure, audiophiles can argue there are better formats but that’s not the issue.

It’s mp3.

You can do the math. 150 million iPods sold, 5 billion music tracks. That works out to about 34 tracks per iPod. Of course, it’s not 100% accurate as the bulk of iTunes sales are only in a few countries but even presuming double the number in the US per iPod user … and if iTunes music sales drops to ZERO for some reason?

How much is Apple losing in iTunes music store purchases per every iPod if that were true?

@$13.60

Apple is presumed to make $.20 per iTunes music track – not counting the cost of running the iTunes store and credit card fees … so actual profit is maybe $.07 a track but that’s presuming iTunes stores sales drops to zero which is unlikely … if Apple were to lose $7 per iPod in lost sales, I think there are dozens of ways Apple could make up that revenue including shaving $7 in costs from the iPod itself … but the bottom line is that the iTunes music sales are NOT the main reason people buy iPods.

Clearly, even people with iPod Shuffles have more than 34 or 68 tracks on their iPod. Whether it’s 100% legal converted from their own CD collection or LEGAL tracks downloaded from musician sites or other sites like iLike.com or ILLEGAL tracks, people know how to load tracks (1,000+ tracks) on a Nano (or up to 20,000+ tracks) on the Classic iPods. The iTunes store is a small part of the reason they buy an iPod.

So, what does that mean for Apple?

How about this ad from Amazon.com?

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That’s right. It might even help Apple sell MORE iPods, NOT less.

Because for all the people who hated the iTunes store for its DRM, now they have a reason to buy an iPod. Sure, it might help sell a few more SanDisks and Zunes but it’s clear that 7 out of every 10 mp3/DAP buyers are iPod buyers AND now that mp3 player sales overall are slowing, it’s rapidly becoming inefficient to stay in the marketplace if you’re 10th or even 5th in marketshare … leaving consumers with fewer choices down the line and we know what’s still the first choice with or without iTunes store purchases.

AMAZON?

If anything, this territory might be scary for Amazon than Apple.

Why?

Amazon sells about 6% of the 500 million CD’s sold in the U.S. or about 30 million CD’s. If we presume the average selling price is around $13 – that’s about $400 million in revenue for Amazon. Now, if you have the choice to buy 4 tracks of a CD for $.99 a piece (some tracks are less on Amazon, some more but let’s say an average of $.99) as an mp3 download or the full CD for $13, what’s your choice? That’s hard to say, of course but that’s precisely what Amazon has to deal with. Is that previous $13 purchase staying the same in revenue? Are you going to buy 13 tracks from 3 artists or are you going to stop at 4? In other words, is Amazon trading a $13 CD for $13 in downloads or are they trading $13 in revenue for $4 in revenue?

It’s impossible to say but the bottom line is that is the choice consumers have to make – sure, maybe instead of buying a $13 CD, that consumer can buy $25 in downloads … but what was holding back consumers before?

DRM?

If we know the average iPod user was spending @$34 at the iTunes music store, what held them back from spending more?

DRM? Really?

Are you that convinced it’s all about the DRM – that without DRM, sales would be up 50%, 100? 1000 percent?

Digital sales are increasing 50% a year anyway but for people WILLING to buy LEGAL tracks online were not doing so because they said DRM was the major hinderance?

I’m not saying the Amazon store won’t sell a lot of tracks but is Amazon trading CD sales for fewer downloads? What is the age breakdown of CD buyers? Is the music industry losing the bottom end of 12-24’s who are downloading free LEGAL tracks from their favorite bands from the musician’s MySpace page/iLike page and of course, clearly, they know how to download illegal tracks to fill their iPods?

Are these the same people who know how to convert tracks to a CD-R?

Sure, there’s a lot of blog talk about hatin’ DRM (and I certainly am NOT for it) but it’s sort like arguing against burning down the Amazon rain forrest, right? Who outside of 300 Brazilians arsonists are for it? But what are people really doing about it?

BOTTOM LINE

My prediction is that sure, Amazon will grab some market share from iTunes music store but as Amazon’s ads say – BUY an IPOD to add Amazon tracks … Apple merely shifts revenue from iTunes to iPods – not exactly a tragedy and if Apple convinces you to buy a few tracks, rent some movies, buy a music video – there are pretty much back to $34 in iTunes revenue AND they’ve sold you another iPod.

The people who really hate Apple and think they should hate the iPod are not going to swayed by this anyway. They are buying SanDisks and Creatives as it is now – this won’t change anything.

The 75% who own iPods might switch and buy some tracks from Amazon but for less savvy users who like being able to preview, buy and sync with one click don’t care about DRM – nothing will change.

And in 6 months or a year, the record labels will be forced to sell DRM free on iTunes … a) because they can’t ignore the place where 70% of the digital music online market is and b) they’ll be sued for restraint of trade by not selling the same thing to everyone – will the iPod marketshare drop to some small percentage? No. Will there as good of a user tie-in as iTunes to the iPod as SanDisk’s, Creative’s or even MS for their software to their hardware? Unlikely.

Now that Apple has added movie rentals and more movie choices, the only real scenario is that the iPod will maintain its market share or more likely, grow slightly. Apple is still the leader in every aspect except the bottom end. There is no small player with the screen, movie rentals & audiobooks to match the Nano, for those who want 160GB, there is no competitor at the same price and of course, the iPod Touch trumps them all and has the highest margins/pricetag – so another 6 months of clear sailing for Apple and the iPod.

Sure, the iTunes store might drop a few percentage in market share to the Amazon mp3 store but the Amazon store has no movie rentals or TV shows (the Unbox has both but no portable player).

The Amazon mp3 store affects Apple just as if you were to open a Best Buy across the street from an Apple store. The revenues would shift around a little but at the end of the day, Apple actually comes out ahead because all you’ve done is given the consumer another reason to buy an iPod.

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Filed under Apple, Film, Financial, Gadgets, Internet, iPhone, mobile, Music, Retail, video

Happy Valentine’s Day: DeBeers Diamond Class Action Settlement

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I knew $97.99 for the 143-carat pinkie ring I bought last year was overpriced.

Now, you can get some of your money back from DeBeers …

Do you qualify?

“People and companies who purchased Diamond Products for personal use, including to give as gifts. This is the Indirect Purchaser “Consumer Subclass.”

Yes, you are subclass but you might get some money and/or coupons 🙂

What was the original class action lawsuit?

“The lawsuits claim that the largest suppliers of diamonds in the world—De Beers S.A. and its associated companies—violated antitrust, unfair competition, and consumer-protection laws by monopolizing diamond supplies, conspiring to fix, raise, and control diamond prices, and disseminating false and misleading advertising. De Beers and the other companies deny they violated the law or did anything wrong. They also say that because they do not do business in the United States, the courts in the United States do not have authority over them.”

What happened in court? No surprise, DeBeers would rather settle …

“There have not been any trials of the lawsuits, and the Court has not decided who is right or wrong. Instead, the Plaintiffs and Defendants agreed to a Settlement on behalf of Class Members. Both sides negotiated the Settlement for several months with the help of professional mediators. By reaching a Settlement, they avoid the risks and costs of further litigation, including a trial, and Class Members have the opportunity to receive money and other Settlement benefits. You can read the entire Settlement Agreement by clicking here.”

Qualify?

“First, you must have purchased a Diamond Product in the U.S. between January 1, 1994 and March 31, 2006. A U.S. purchase is any purchase where the Diamond Product was delivered to you in the U.S. and includes purchases made from establishments in the U.S., as well as purchases from establishments abroad that were delivered to you in the U.S.. Second, you must have resided in the U.S. on October 1, 2007. For individuals, this means that you maintained a place of residence in the U.S.; for companies and other business entities, this means that you were organized and existed under the laws of any state or territory in the U.S. or maintained a place of business in the U.S.”

Read all about it here.

The FAQ.

You can also file your claim online. Or via printed PDF here.

The settlement for consumers is out of a pool of @$135 million.

Along with my government tax rebate check, I can finally afford the CARS Speedway of the South set.

More about diamonds? How the mofo of diamonds, it’s way, way, way, way, way, way larger than you think …

How and where diamonds are found.

But who needs mines – just pressurize your own.

But diamonds are boring … gold? That’s a cool journey across the cosmos …

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“According to Tyson, author of Death by Black Hole and Other Cosmic Quandries, all gold on Earth started out in the center of a star; he says stars are “in the business of cosmic alchemy.” Via NPR.

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Filed under Advertising, Financial, Internet, Marketing, Universe

Moving Day is NEAR For Two A Day (WordPress)

We are getting ready to move!

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While we had a great time here at WordPress, it was starting to get a little cramped and simple things like posting charts was complicated so we’re moving to …

TakeFiveADay.com

or if you prefer, Take5ADay.com

Don’t worry, we’re packing ALL the posts and even ALL your comments so it’ll all be there soon.

Right now, there’s not much there but we’re moving as fast as we can and trying to learn PHP & AJAX … well, one of us is … I’m busy using a microgram scale to verify the weigh difference between the Thailand Hudson and the China Hudson. Just kidding!

I have been busy on two important CARS project – one which is ready to go … yes, we have t-shirts now … in part to help us defray the cost of the move, most of them CARS and collecting related. Hope you like them:

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Or this one that’s hard to read on the website but it reads:

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ULTRA COMPLETIST
The Secret Code
No Promo – Filmore – 39 Posters SC
Canadian SC – Canadian MM SC – Tuf Guy – Yellow Tail Light

+ about 15 other choices in dozens of t-short configurations, all at our new CafePress Store – TakeFiveADay.com.

Enjoy!

Unfortunately, due to Mattel, Disney, Pixar & CafePress all lawyered up, there are lots of words, images and photos we’d love to add on there but can’t.

Of course, Cafe Press is all on-demand, so once you order it, they print it up and send it out to you – there’s no cost to us and of course, you don’t have me looking through my office to find an manilla envelope to mail you a t-shirt … 🙂 So, thanks for your support and enjoy!

See you at TakeFiveADay.com in the near future!

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Filed under Advertising, Blogroll, Computing, Internet, Marketing, Mattel Disney Pixar CARS, Media, Toys

Fortune Names Mattel on List of Top 100 to Work For

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With Google topping the list, Mattel comes in at #70, pretty impressive considering the tens of thousands of companies not on the list … is one the criteria for making the list ‘being ultra secretive’? JUST KIDDING! Just kidding … sort of 🙂

Here’s the criteria for making the list:

“How we pick the 100 best? To pick the 100 Best Companies to Work for, Fortune partners with Great Place to Work Institute® to conduct the most extensive employee survey in corporate America. Of some 1,500 firms that were contacted, 406 companies participated in this year’s survey. Nearly 100,000 employees at those companies responded to a 57-question survey created by the Great Place to Work Institute®, a global research and consulting firm with offices in 30 countries.”

Here’s Mattel’s page.

And the full list is here.

Here are some of the benefits of working at Mattel other than of course being surrounded by toys … Very nice list …

Friday Half Days
Mattel closes up for the weekend at 1:00 p.m. on Friday, all year long.

Casual Dress
Every day the dress is business casual at Mattel.

Child Development Center
Our onsite center provides year-round care at subsidized fees for children ages 6 weeks to 5 years.

Fitness Center
Our center, which is open 14 hours a day, has state-of-the-art equipment to keep you healthy and in shape.

Toy Store
Our onsite toy store allows employees to purchase Mattel products at a discount.

Toy Testing and Playlab
Relatives and children of Mattel employees can be among the first to test our toys.

Activities Committee
The Mattel Employee Association sponsors a variety of events throughout the year for employees, including ski trips, Take Your Daughter To Work day, theatre and sporting events, and an annual holiday party.

Onsite Services
An excellent cafeteria as well as an onsite film-processing and dry-cleaning service make the life of a working professional a little easier.

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Filed under Advertising, Financial, Marketing, Mattel Disney Pixar CARS, Retail, Toys

Mattel Pixar Disney Cars Checklist: The Alpha List 2008

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Reader Jake sent along this alphabetized list of the 66 CARS announced so far & scheduled for release in 2008 (that is not already out). This includes all the Piston Cup race CARS that presumably will be the set coming in (rumor has it) June 2008.

The only thing we know for certain for that we can be sure the final list at the end of 2008 will be longer than 66 … which is either good news or bad news … depending on grumpy you are and how much you like your second kidney.

Toyfair is in NYC – starts February 17th, we’ll hear more around that time.

Unfortunately, wordpress doesn’t allow for much formatting or grids so you can paste this list somewhere and add your own …

Of course, we have a checklist/spreadsheet with grids online here at EDITGRID. If you preuse the tabs at the bottom, you can choose the spreadsheet that fits your collection. The newest addition is a checklist by sealed case so you know what’s coming … which is also available as a download here.

The main list by case is in this post.

Thanks, Jake.

Anime Chuki
Apple (#84) – Mac iCar
Axle Accelerator (Security Car)
Brian Antenna Ball
Bumper Save (#90) – Ponchy Wipeout
Charlie Checker/Pace Car (Yellow Tail-Light)
Chick Hicks Pit Crew
Chief No Stall
Chief Trunk Fresh
Clutch Aid (#121) – Kevin Shiftright
Cora Cooper
Creme Filled Gask-its (#80) – Sage Vanderspin
Dexter Hover
Dinoco Crew Chief
Dinoco Mia & Tia
Dudley Spare (Octane Gain Pitty)
Dustin Mellows
Easy Idle (#51) – Ruby “Easy” Oakes
Elvis RV
Faux Wheel Drive (#54) – Johnny Blamer
Fiber Fuel (#56) – Brush Curber
Flea
Flik
Gasprin (#70) – Floyn Mulvihill
Gold Mia
Gold Tia
Greta
Jay Limo
Lightning Ramone
Lightning Storm McQueen
Lil’ Torque Pistons (#117) – Ralph Carlow
Luke – Dinoco Pitty
Marco Super FAV18 (Jet)
Mini
Mood Springs (#33) – Chuck Armstrong
N20 (#68) – Manny Flywheel
Octane Gain Crew Chief
Patti (Andretti Assistant)
Petrol Pulaski (RPM Pitty)
Pit Crew Member Sarge
Race Damage King
Retread (#79) – Paul Inngas
Rev-N-Go (#73) – Misti Motorkrass
Re-Volting (#84) – Davey Apex
Richard Clayton Kensington (Security Van)
Ron Hover
Shifty Drug (#35) – Kevin Racingtire
Shiny Wax (#82) – Darren Leadfoot
Sidewall Shine (#74) – Slider Petrolski
Spare Mint (#93) – Earnie Gearson
Sputter Stop (#92) – Murray Clutchburn
Sven Hummer
Tach-O-Mint (#101) – Greg Candyman
Tank Coat (#36) – Eugene Carbureski
Tar Lightning McQueen
Timothy “Tomezone” Truecoat
Tires Lightning McQueen
Tow Cap (#4) – Rusty Cornfuel
Transberry Juice (#63) – Lee Reukins
Trunk Fresh (#34) – Dirk D’Argostino
Tumble Weed Lightning McQueen
Van
View-Zeen (#39) – Ryan Shields
Vitoline (#61) – James Cleanair
Whitewall Lightning McQueen
Yellow Pitty Leak Less

All our other posts are linked here.

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Filed under Advertising, Film, Marketing, Mattel Disney Pixar CARS, Toys

MacBook Air: Not For You So Don’t Panic

Quick, name the perfect product for everyone?

Air, the other one? The thing we breathe? Yea, how is that air in Houston in August or in Beijing?

Um, not so perfect.

Water? Who here only drinks tap? Don’t we like it flavored, carbonated, with taurine, mint or almost anyone other than tap?

So, not water … but apparently if it’s announced from Apple, it must be 100% perfect for everyone at all times.

Yea, not too high of a benchmark so that anything that falls slightly short of that is a “failure” or “disaster.”

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The MacBook Air is what it is. It’s a lightweight fairly speedy laptop with emphasis on lightweight.

Is it for everyone? No.

It’s for road warriors and those who are tired of carrying a heavy laptop around. For those that have NEVER traveled for an extended period with a laptop – you just don’t know. Holding it in a store for a minute is NOT the same thing. At the store holding it for a minute, you can’t justify spending a few hundred dollars extra but try running down a mile-long airport terminal or carrying a bag full of printed collateral and then ask yourself if 2 lbs, 4 lbs, etc. extra is worth the difference? Until you’re at that point you simply don’t know or don’t need an Air or any other ultraportable.

All you see is what’s “missing” but when you’re schelping a 5 lb or 7 lb laptop from room to room and then around a giant Pentagon like building – that’s when you wonder – how much weight are those extra CAMERA memory slots or how many peripherals do I need to plug into this thing at once? This is NOT a desktop machine for everyone. Is Apple not manufacturing any of their other lines or computers? No. You want full power and have the room? Buy the desktop Mac Pro. You want an all-in-one? Buy an iMac. You want portability on a budget and are willing to trade a little speed and screen size? Buy a MacBook. Need the most features, speed and screen size? Buy a MacBook Pro. You choose what you want – everything in this world including Macs are a compromise in some way because there’s no perfect for everyone 100% of the time but for those who want thin, light, good enough speed, a nice screen, OSX, and a full keyboard?

The MacBook Air has a lot of nice touches …

The Apple Air has built in WiFi and the new Remote which lets you mount a CD or DVD on a nearby machine – what more do you need?

Want security or recovery utilities – a 16 GB USB stick weighs a few ounces or would you rather carry around a bulky optical drive internally or externally?

Still without WiFi at home or at the office? How about a $8 connector from Ethernet to USB that weighs a few ounces.

Can’t live without extra USB ports? Unpowered or Powered.

At home, you can add the Apple Time Capsule so you can print, share a hard drive and of course access the internet via WiFi:

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As for the “non-removable” battery, AppleInsider points out it’s a three minute job but more importantly, in a few weeks, I’m sure there will be a USB long life external battery which is even BETTER that it’s external. First, you’re going to have to carry a spare battery anyway whether it’s internal or external, they both weigh about the same – and with an external battery, you can charge it without having to insert it into your larop OR carry around its own charger AND even better, when your internal battery goes low, you can simply plug in the external battery (presumably through the USB) and best of all, without having to shut down and remove the other battery.

So for those worried to no end about a battery that is not removeable is simply over worrying the solution. Of course, the perfect solution would be a battery that would run for 19 hours but until we get to that point, saving a few lbs is much more important than whether the additional 1 lb battery I have to carry anyway is external or internal.

The MacBook Air is clearly NOT for everyone but finally a full sized laptop in screen, speed & keyboard but one that weighs much like a sub notebook. The thin-ness is an extra bonus. Just ask the ‘road warriors’ what’s at the top of their wish list? The MacBook Air delivers 98% of what’s most important – bulk, screen size, processor speed, battery life and keyboard size.

Along with the built-in WiFi and a USB stick, the remaining 2% is easily manageable.

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Filed under Apple, Apple Mac, Computing, Financial, Internet, Retail