Tag Archives: ipod

Microsoft to Open Retail Stores: Bullet Proof Glass Industry Rejoices!

Appropriately, a web site called Fudzilla is reporting that Microsoft is going to open retail stores.

It’s time for shareholders to weep a little more.

Everytime, Microsoft has a brainstormin’ meeting, it’s more money down the drain:

Let’s buy Yahoo! ($45 BILLION)

Let’s launch a DAP/MP3 Player! (3% marketshare) ($1 BILLION)

XBox – The Xbox division is @$16 BILLION in the hole after 8 years.

MSN – $1.1 BILLION in R&D & a marketing blitz is all we need to get MSN going ($700 million – 2002), 2005 & 2007).

MSN is down to 8.4% (Google at 70%). Nice use of $2 BILLION dollars. Most people lose 50% of their market share in 2 years by not spending any money on a product, only MS can spend $2 BILLION for the same result.

Let’s spend 6 years and $6 BILLION on creating Vista … and of course …
“Microsoft is planning to promote the launch with a $500 million marketing campaign”

The list goes on and on – why? The simple fact is that when consumers have a choice, they do not choose Microsoft. This isn’t some whim. Microsoft worked hard to destroy their credibility as the leading edge of technology from 1995. After that, they simply thought they had everyone else locked down and out and could just rest so they offered products such as OSes riddled with hundreds of thousands of different infections … or me-too products such as PDA’s, watches, Talking Barney’s, video consoles, MP3 player, home networking or MSN and both an ISP & as search … all failures in the sense that they offered nothing new and they are ALL are losing money or losing market share.

In fact, they have become the “dollar-store” of technology. They are only worth buying if it’s rock bottom $399 pricing – why PC makers margins are all falling because of association with MS OS … why bother paying for even a $999 machine when it’s just going to run as well/poorly as a $399 machine?

Hey, if the shareholders don’t care, why should we?

Now, another meeting and another “brilliant” idea without mentioning you-know-who in the meeting.

It is almost laughable how clueless they are.

It would be like the IRS opening retail stores. Come. Mingle. Hang out.

Though this is a good plan for the bullet proof glass industry. You know Microsoft, they’re not just going to open 1 store at a time, that’s no way to spend money fast, if the budget isn’t a $1 BILLION, why bother so I’m sure they’ll sign 20-year leases at 100 locations.

Photo Courtesy of Pacific Bulletproof.com (where I go for my bullet proofing 😉 )

“Sir, I can’t help you, it’s a hardware issue – reformat the drive and then come back … yes, this is bulletproof glass, why do you ask? Have a nice MSN/Live Day!”

So, how exactly are you going to find employees to staff this place?

Who here would like to stand at a desk and answer questions about why ME, 2000, NT, XP or Vista is not functioning correctly?

Who thinks there might just be a few slightly annoyed to raging Windows customers?

Will they be taking red-button-of-death XBox returns and softly announce they’ll get another in 4-6 weeks?

Will they answer why Microsft Plays4Sure WMA is not the same as Zune WMA?

Can they point us to where the Apple store is in the mall?

Microsoft doesn’t really get that consumers don’t really like them. They don’t seem to notice that when consumers have a choice, they don’t buy MS. The OS issue is a heated one but let’s look at some more neutral markets. Look at the home networking gear they tried to sell. While there are some known brands, there are plenty of detractors for #1 & #2 but MS couldn’t even crack that market – why? Because MS poisoned the brand name. The average consumer took a look and decided – NO MORE IN MY HOUSE, DO NOT WANT.

Or using MSN search. It’s 100% FREE and takes 2 seconds to type and bookmark but now down to 8% market share? What does that tell you? That either their search results are poor or that consumers don’t believe their ‘technology’ is any good – either way, bad, bad news for MS.

That is why their retail stores will be a miserable failure as branding because they rank somewhere near the IRS. How often will you step into an IRS store to hang out?

AND at the IRS store, you know if you complain too much, they’ll audit you but aren’t you just going to go into the MS to vent and unload?

Yea, good luck finding employees.

(on the corporate side, they’re doing fine, IT guys made a choice and now are stuck with MS so whatever but when you’re spending your own cash, MS – DO NOT WANT).

Yet again, it proves that they are clueless about their place in the consumer’s mindset.

MS will build a 100 retail palaces because they think they are the king … but MS is really like those local cable ads where the guy wears a crown selling the very ordinary at a huge markup.

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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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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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Hello From MacWorld 2008

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Not actually blogging from here since we’re only #72,000 on Technorati 🙂 … there are only about 15 seats … maybe next year.

Other than the keynote, there’s not much to see that’s new – I don’t think Adobe is even here. The nicest booth by far is Belkin’s

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If this were in Venice, it’d be about $900,000.

The coolest booth is Crumpler (they make messenger and brief bags). It’s a castle made up of interlocking cardboard or some sort of polymer board.

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Only thing I bought From XtremeMac:

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I took a photo of the MacBook Air but not only were there way too many people crowded around it, there is no way a photo can do it justice in how thin it is. If you have a pad of yellow legal pads … yea, that’s your MacBook Air. It’s pretty amaazing and of course, me wantee. Apple website. Ad for Air. Guided Tour – multiple resolutions + downloads.

The updated AppleTV looks very nice – also with a Guided Tour. In case you missed it, the big news is Movie Rentals from all the movie studios and even in HD!

And linked with Leopard’s “Time Machine” backup feature, Time Capsule with allows you to back up wirelessly.

So, nothing as startling as last year’s iPhone but honestly, how many iPhone-like cottage industries can you pull out year afer year 🙂

Not sure why some people were so sure about a 3G iPhone … the 3G iPhone is ready to go when AT&T is ready and when Apple needs the sales boost.

The Tablet Mac? Pleezeee … Outside of 5,000 people and apparently 900 squeaky-wheel bloggers and analysts, hardly anyone cares or actually wants one – how are those WIN tablet sales? EGGXACTLY!

Everything released was nice, interesting and useful – it’s nothing revolutionary but that’s fine. Not every keynote can be revolutionary. Making food into pellets is revolutionary but sometimes you just want a juicy burger, eh?

Speaking of food, of course, just one block away – a dozen Beard Papa’s fresh giant cream puffs …

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The best food surrounding a convention center in America … unless of course, you enjoy $8 pizza made in 2005 and reheated … oh, and it’s sunny and 65 degrees here in SF so come on by!

(PS – Of course for those that keep track of such things – Best Booth Babes – Skull Candy and best DJ!)

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Microvision Pico Movie Projector for Your iPod

You’re on a plane, the movie they are offering is NORBIT or the edited 9-minute version of DEADWOOD … fortunately the rotund dude in front of you who had to buy two tickets is sound asleep and he’s wearing a white shirt – just attach the Pico Movie Projector to your iPod and you use his shirt as your projection screen … your own drive-in movie … Now all you have to do is convince the marshall sitting next to you to switch with the drunken cheerleader …

In the CES demo, it’s a snippet of CARS …

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Microvision Website.

Via GIZMODO with video.

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iPhone Caller ID: Glitch Fix

This might not apply to everyone but if you added additional information to the phone number in ADDRESS BOOK and after transferring/syncing – the iPhone cannot interpret the additional text and the iPhone CALLER ID feature won’t work correctly.

As a result, it will only display the incoming numbers only when the person is in your phone book – so you stare at it thinking, this phone number looks vaguely familiar but you can’t quite place it … (some people just hate when you don’t immediately recognize or hestitantly answer the phone … your wife, for example 🙂 )

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As in this case, because I added ASPEN after her number, when Leslie calls, only her number will display – the iPhone attempts to match the incoming caller ID info with your address book but since ASPEN is not part of the incoming caller ID information – the iPhone blanches as a call NOT from someone in your phone book – so no caller ID info.

This also applies to people with landline phone extension numbers you might’ve added to their regular phone.

The solution is there but not necessarily apparent.

In the ADDRESS BOOK>PHONE, select CUSTOM

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In ADDRESS BOOK, “custom” is smart (as is a lot of Apple apps), it’s ONLY custom to this person so in this case, I enter in ASPEN H but you can essentially enter any info you want – you get about 10 letters before it gets truncated.

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Voila!

(then of course, sync …)

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AT&T CEO “Leaks” News of iPhone Going 3G

To some, Randall Stephenson, CEO of AT&T blabbing that a 3G iPhone is coming is a slip of the tongue, to some, it’s a well planned metaphoric stab at Steve Jobs and to others, it’s old news.

The bottom line is it’s a combination of all three but the consequences are very mimimal.

Why? Because there are two camps.

People who have no idea what 3G is.
People who care about having 3G.

Here’s your test, go up & asks someone if they are GSM or CDMA. That’s ALL you ask them – no alluding that it’s a cell phone acronym – just ask them GSM or CDMA?

90% of the people will go – huh?

The 10% who can actually answer can tell you about whether 3G is important to them.

Of that 10%, 100% can tell it’s a feature the iPhone will eventually add just like GPS.

IT’S JUST A GIVEN.

It’s like asking if the laptops in the stores will be faster next year?

Or if NAND memory will get smaller & cheaper per GB.

IT’S A GIVEN.

In fact, Steve Jobs answered the questioned that 3G was not included because of battery usage right upfront … part of the answer may have been AT&T was just not ready to provide a 3G network at the cost that Apple was happy with … how many people wants 3G at $60-$75 EXTRA per month? How many iPhones would Apple have sold if the lowest price package was around $120 a month and the high was $160 a month?

THOUSANDS of bloggers (lead by ZDNet, no doubt) would have SCREAMED – why not EDGE – it’s “good” enough for maybe $10 extra month?!! Why, oh why is Apple forcing 3G down the throats of innocent people who just want EDGE?

There is just no pleasing some people …

Part of the answer was undoubtly the battery life but part was also AT&T’s network capability … they seem barely able to handle the voice portion – how are they going to deal with 4 times the number of TOTAL 3G subscribers in the US all jumping on their network to text and VOIP?

When will we get 3G iPhones?

Well, part of the answer is when AT&T’s network is ready. Is it ready? Did anyone bother to ask the CEO that? It’s not like adding a feature to an OS – if AT&T networks is not ready, why bother? And analysts presumably can tell when it’s ready … ONLY THEN will we get a 3G iPhone.

Because a 3G iPhone itself is not hard – a software upgrade … a new chip … other than the battery issue, Apple’s portion of this is EASY … is AT&T ready? Is AT&T ready AND not ready to charge us another $60 a month because if that’s the case, it will be as popular as 3G is now in the United States … out of 150 million internet users and over 200 million cell phones, how many 3G users are there now at $60-$100 a month?

LESS than a million.

People have an opportunity to choose and buy 3G RIGHT NOW but it’s clearly not at a price that interests people.

Prior to the iPhone, people didn’t really want to surf the internet on the phone because they didn’t want to pay $15 to $30 extra a month – but Apple made AT&T bundle it in with the regular monthly fee which is only slightly higher than a non internet plan with other phones so is AT&T really ready to deliver 3G at a slight bump in cost?

And yes, Cringley is probably right that it’s a shot at Steve Jobs but ultimately, who cares?

Oh, boo-hoo that AT&T takes a shot at Apple because Apple might jump into bed with Google on the 700 Mhz thing … or boo hoo that Apple might “double cross” AT&T … to use a “street” phrase these “journalists” might understand …

THAT’S HOW CORPORATIONS ROLL.

Not only do corporations cross partners and jump in with someone else, sometimes they do it with their own divisions. That’s just the way business is. It’s nothing new and nothing different.

As for consumers, look 90% don’t care – the buy an iPhone because it offers 30 features no more than 2 taps away and with one device, they get a phone, the internet, SMS, music, video photos and handy information plus cachet & fashion … 3G is nice but do I want to wait 35 seconds for my NY Times page to load or do I want to wait 364 days and 8 seconds for 3G and my NY Times page to arrive.

If I want 3G when it actually arrives, I will buy another phone.

That’s how people roll.

Sure, do people claim that they will wait for a 3G iPhone – of course, but I’ll bet 90% of those people will then claim they are “now” waiting for a 3G & GPS iPhone or if Apple delivers both that, they’ll want a video camera iPhone … or if that’s included, a 12-MP camera … that “wish” list is never ending and it’s a moving target because they DON’T REALLY WANT AN IPHONE – they just want to appear they are rich or savvy enough to want an iPhone if only it had that one crucial feature THAT NEVER ARRIVES IN THEIR MIND.

Will there be a faster laptop next year – uh, d’uh …

Why buy a car when somewhere down the line a hovercar might actually be available – why compromise?

If you want an internet-iPod Phone, what are you waiting for? Perfection?

Or do you really never intend to buy one and just talk a good game?

There will always be something faster & better NEXT year but you can wait and use NOTHING or use something until the better one actually comes out?

Of course, we are at the nascent stage of the iPhone and it is understandable that not everyone needs an internet-iPod-Phone – but the bottom line is 90% of the people who claim to want is a 3G iPhone is just plain lying, just want to sound savvy or just like to hear themselves talk.

That’s NOT to say there aren’t plenty of other reasons why people don’t want to buy or don’t need to buy an iphone – some of the REAL reasons might include:

not wanting to pay more than $25 for a phone because they cannot afford it;
not wanting to pay more than $25 for a phone because they don’t see the need
they hate AT&T
they are boycotting AT&T for the wiretapping issue
they can’t get out of their contract
they hate Apple
they hate their cell phone as it is …

and the list is nearly endless but 3G is way down the list for the average consumer and even on the list of savvy buyers who claim to be holding off because the iPhone is not 3G … they clearly don’t need internet access that much because they’d rather WAIT ANOTHER YEAR for the internet on their phone instead of waiting :30 seconds more TODAY with an iPhone.

The biggest hinderance to wider iPhone acceptance is simply the price but that will not change. Apple is not about to do a Moto or Nokia and sell their crown jewel Apple “name” AND kill their margins just to grab market share willy-nilly. Apple simply wants the greatest market share at the highest margin … and the bottom line to slow(er) iPhone acceptance is much like the iPod. People do NOT believe anyone when they are told something is easy to use – they have not only been fooled, they’ve been conned so they are naturally leery. Even if their regular cell phone promises them music, the internet and the moon and is crap – at least, they are just out $25 bucks and can go swap it out AGAIN for another phone (of course, the cell phone companies are happy – they just re-trigger the 2-year contract from today – what do they care about Nokia or Moto branding?)

So, the 3G iPhone is not much news. Will a couple hundred people hold off? Sure – much like the iPod or the person who wants to wait just anoither 4 months before buying that new laptop to make sure a faster one isn’t coming (pssst, a faster one is coming but maybe you don’t need a laptop if you can go 4 months without one).

And yes, it could get interesting corporate-gossip wise if Apple jumps in with Google but AT&T is not exactly a mom-pop operation who have placed all their marbles in with Apple – they are advertising other phones and even have other competing features with Apple like the other music store but is Apple crying boo-hoo? No – because they realize that’s the business of business. It’s a cold hard world and only high margin revenue will keep them warm 😉

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