Apple's Trojan Horse Strategy

Cloud-computing, the buzzword of Q1 2008, has recently been gaining a lot of traction (if you saw the movie August, you get that reference). The most notable feature, or missing feature, of the latest line of mini-notebooks (Acer One, EEE PC, HP Mini, and soon to be DELL E) is a high storage hard-drive. For the most part they come standard with around a 4-8GB solid state drive, upgradable to around 32GB; the current Ipod classic on the other hand comes in a 160GB version. Although innovation in the storage sector has revolved around fitting more storage in less space (the CEO of Seagate is very bullish on the idea that cloud computing will only increase the need for storage on the client side), these new Mini-notebooks are a very interesting indicator as to where the entire segment of portable devices is heading.

This is where the IPhone 3G and Ipod Touch come in. 16GB may ultimately be enough. I recently signed up for the Rhapsody service and I must say, aside from the occasional unavailable album, to ability to have almost any song available on demand is really quite something. This is the future of the music industry; the subscription model will be the last one standing. Having to pay $.99 per song versus pirating it is one equation. But, paying a flat fee monthly and having an entire high quality, virus free, catalogue is entirely another. Ultimately, as long as that music is truly available anywhere, anytime, on any device, people will adapt the subscription model. Although there is certainly something romantic notion lost in not having albums that you own to pass down, I don't think your Itunes library was filling that void anyway. Your kids probably won't care much as the entire music library of all time will be available.

That is largely what the Iphone is all about. It's not merely a replacement for your PDA/phone, it's Apple's realization that the Ipod was a dying concept. Same for the Itunes store. By putting a device in your hand that presumably will always be connected, Apple was laying the groundwork for what will be the next phase of it's media strategy: Itunes subscription service. Available on your Apple computers, your AppleTV, your Iphone, and your soon to be Apple controlled home media center (an actual TV to bypass the set-top box?). This model will probably also include a video subscription service to rival Netflix, among other things. Who knows, the entire thing might all be a packaged deal (maybe even with your Broadband/Wireless access).

Nokia has been trying to reposition its handsets in a similar way, becoming not only a hardware provider, but also a media provider. Although Apple may not be in the media game for that much longer than Nokia, the closed system approach that Jobs has developed is why they are ultimately better positioned to win the game. Nokia has no skin in any other hardware/software game; they have no ecosystem. Apple has rapidly been putting its products at every step of the chain. Jobs has long understood that the future is about the entire chain, not disparate devices. Cloud-computing, the storing of the actual media on the server side, will help realize this reality. When the time comes to choose who will be delivering your content from the cloud, Apple has already placed their shiny and well designed Trojan horse in your hands, your bag, and probably your house. 

On the heels of my bus post

I see this:

http://www.carectomy.com/index.php/Train/All-Aboard-the-Train-that-Never-Stops

Sounds a bit too complicated to me, but it's heading in the right direction. How the people move from the pod to the train and vice versa I don't fully understand. For instance, let's take the NYC subway as an example. You get on this pod at West 4th street, but are planning on going to Columbus circle. Once in the pod, you need to get on to the train itself, as this pod will be dislodged at the next stop, but you have many more to go. So you have to get off the pod and get on the train, while those looking to exit at the next stop need to get into the pod and off the train. Considering the size of the pod and its position on top of the train, it sounds like a pretty complicated, messy, and crowded process. I'm sure this is a beta though, and they will figure out a way around this problem.

Another It's About Time.....

http://www.techcrunch.com/2008/06/26/exclusive-peek-at-nrme-location-based-twitter-without-the-noise/

Post to follow

It's about time.....

http://www.nytimes.com/2008/06/30/technology/30sony.html

Post to follow.

Your car is surfing the Internet

And so it begins......
http://www.latimes.com/business/la-fi-wificar25-2008jun25,1,2980140.story

Invention of the Day

So I got off the subway today and figured I would transfer to the bus in order to go the 8 blocks to my house (I was feeling lazy). Luckily, when I exited the subway station, I saw the bus waiting right across the street. I raced to catch it, and made it before the doors closed, but noticed that it was packed to the gills. I decided I was better off walking than taking part in the human tuna can.

A funny thing then happened. I ended up walking the 8 blocks significantly faster than the bus was able to drive. I noticed that there were 3 main things that slowed down the bus:

1) Having to load passengers
2) Having the passengers take turns swiping their Metrocards (50% probably do it wrong the first time and get one of the most annoying beeping sounds ever synthesized)
3) The huge bus having to wait for a traffic opening in order to pull out from the curbside bus stop.

I thus present you with a vision of the bus of the future. I was discussing with my girlfriend today how every generation thinks they have reached the technological apogee, and can't envision of any future innovation. But, they always do come. So here are the three solutions to the above mentioned problems:

1,2) Based on a variety of sensors and telecommunication, the bus will convey in real-time to the various stops along the route how many seats/spots are available. People will arrive at the bus station and swipe their phones or some other form of virtual currency systems to reserve a spot. They will also see in real time on a digital map how far away the bus is (and could potentially choose which bus they want to ride on).

3) There will then be some (glowing) markers on the floor where they stand as the bus is approaching. This will Star-Trek like particalize them into the spots on the bus. The bus will not have to stop in traffic but will simply continue driving. If the Star-Trek technology is not available, and the bus does have to pull over for some sort of loading contraption, it will be in communication with all the cars driving by, and they will be forced to stop as the bus is pulling out. This can be done literally, by reducing the cars speed (don't worry, it's safe, as the cars all around the passing car will react to this as well), or by warning drivers that if they don't stop an e-ticket will be filed and e-mailed to them.


Walla. We solved the bus problem. But then I realize, that if we have the Star-Trek technology, who needs a bus. Beam me up Scottie!

P.S. - For the record, I found that image after I wrote this post and searched Google Images for "Beam me up Scottie." Apparently, I have a mind double.

Pascal's Wager and Global Warming

For those unfamiliar with that dashing man, he is Blaise Pascal. Aside from his many contribution to philosophy, mathematics, etc, he is probably best known for Pascal's Wager.

Pascal's wager is simply an application of Expectation Decision Theory for those of you familiar with economics/probability. It's a very simple theory. Essentially, when computing the potential return of almost any decision, you simply need to take into account two things: a) the probability of the various outcomes and b) their payoff.

This translates into an equation where P(x) is the probability of outcome x, and R(x) is the return of outcome x as such:

Expected return = (P(x1) * R(x1))+(P(x2)*R(x2))+(P(xn)*R(xn))

Pascal, not only one of the first to really use and understand decision theory, but also maybe the first to insert infinity into the mix. Essentially, if the return of any one of your outcomes is infinitely large (or close to it), then the probability of that option is irrelevant, as anything times infinity is essentially infinity. So basically the decision ends up being a no brainer.

Pascal's infinite was the alpha and omega, g-d. Essentially, Pascal's Wager can be broken down as follows. If g-d does exist, he is clearly the infinite. So regardless of the rational probability of his existence, from an expected decision standpoint, we should adhere to religion as its reward/punishment is so grave.

In other words, if g-d exists, and you follow him, HEAVEN. If not, HELL (not necessarily fire and brimstone, but some eternal negative). Those are pretty eternally good/bad, and therefore it probably makes sense, regardless of the probability of g-d's rational existence, to go with it. Pascal took it as far as to say that if g-d doesn't exist, and you abide by religion, you lose nothing, so it's a win win. I'm sure no one would agree with that today as a life predicated on religion is quite different than one without.

I am not writing to defend this theory, and obviously like any other theory, it has been criticized sufficiently since its inception. Yet, it is a great paradigm for the problem of global warming. A problem that if what they say is true (or even kind of true), has eternal implications, at least for us humans. Maybe g-d (if you believe in him), can wait millions of years for the minute probability of life forming again, but for most of us, that's an infinite amount of time. So essentially, the outcome of global warming, if it's true, is the end of life and earth as we know it. Sounds pretty damn infinite.

As we've established, when we're dealing with an infinite outcome, the probability is irrelevant. Maybe the scientists are 50% right, maybe their 10% right, and maybe when they say 20 years they mean 50. Who cares?!?!?!?! We are talking about the end, kaput, finale. It's an idea that's hard to comprehend. We humans are wired to assume that tomorrow will pretty much be like yesterday. It's quite hard for us to imagine, and alas except, anything different. This may be the only area where all humans are skeptics.

So to use the decision theory approach once again, let's assume global warming is true. If we take all the necessary steps to fight it, HEAVEN ON EARTH (literally). If not, THE END. So we should probably fight it. But what if it really is all a big sham, or not a big sham but largely scientifically inaccurate? Here is where our equation differs from Pascal's. He claimed that if g-d does not exist, and we believe, we lose nothing. I think most people disagree. Yet, with global warming, that just might be true. Even if global warming is false, or simply a bit exaggerated, are the steps that we are going to take so bad.

Is clean air bad? Conservation? Environmentally Responsibility? An end to McMansions and SUV's? An end to our oil dependency that skews our national politics and our wallets? Sustainability? A little respect for Nature? Innovation of hundred year old industries? Sustainable energy policy? The list goes on. Sure a few big wig oil executives and some other people with a vested interest (and quite deep pockets) in the status quo will fund lots of studies and spend lots of ad dollars to try and dissuade us. It's pretty sad to think that some people value another summer house or nice car over the human race.

It seems that the debate is over. Who cares if global warming is true or not. Regardless, the benefits of fighting it are both socially and economically positive in the long run. If it ends up being nothing more than something that motivated us, America, to get off our lazy (but nicely cushioned) behinds and finally see a tomorrow that's not like yesterday, it really is Pascal's win win.

Another Netflix Update

http://www.alleyinsider.com/2008/5/time_warner_cable_touts_web_to_tv_device

It seems that the television set is going to be the next major battleground. I think Time Warner's announcement is rather important because the cable operators are generally the point of first entry, whether it be the modem or cable box. Furthermore, they are already ubiquitous in most homes. They are staring down a tremendous opportunity to fend off the likes of NetFlix and AppleTV from eating their lunch with IPTV.

Unfortunately, history has shown the telcos and cable companies unable to innovate effectively in the consumer space. Bureaucracy. Wall Street. Whatever the cause, they just seem unable to get their act together. It is similar to the fate of the newspapers. Instead of taking their product into the future, they continue to try to defend the past. There is certainly the psychological barrier of the endowment effect. It's hard to let go of what was once a cash cow. You simply can't believe that it's going to disappear after watching it flourish for so many years. History has seen many industries fall by the wayside. Makes you respect the likes of GE that much more. Will the cable companies be able to avoid this fate before it's too late?

The Holographic Screen Revisited

Ray Kurzweil, my personal tech hero, agreeing with me about the mobile phone:

http://www.businessweek.com/globalbiz/content/may2008/gb20080519_782410.htm?chan=globalbiz_europe+index+page_top+stories


You have to cherish these. Even more motivation to really finish the piece in its entirety.

Follow up on Netflix

Here are two interesting pieces of news out today related to the Netflix piece:

http://newteevee.com/2008/05/27/sony-tru2way-no-more-set-top-boxes/

http://www.techcrunch.com/2008/05/28/amazon-ready-to-unbox-video-streaming-for-digital-movies/


I hope to write a little more about it later today. In brief, there are two trends that seem to continually be popping up.

1) Convergence - as the internet platform continues to emerge and develop, we will have to stop thinking of consumer devices in terms of purpose. Forget the labels that subdivide. No more TV v. set-top box v. (HD)-DVD player v. Video game console. There is hardware that can deliver the internet/software experience to you. That's it. Some are smaller. Some are bigger. Some are in your living room. Some are in the bedroom. But you can access anything digital (and offline stuff as well) from anywhere, anytime. Obviously this will happen in stages. But it is a major trend to watch.

2) Ubiquity - Content will become ubiquitous while the distributors will fall to the background. Forget the notion of websites and destinations. Think of widgets, RSS feeds, and mashups. The future is in the customized experience. You will be able to download that movie directly to your TV in seconds. The Itunes closed platform will break down. How you decide who you get your content from (Itunes, Amazon, etc) will be an interesting part of the transition? Obviously it will continue to drive the price of digital content down to it's marginal cost of $0. Advertising will continue to play a big role. But why would I go to Amazon vs. Itunes vs. etc to get a movie? What will be the differentiator if it's not price or platform lock-in?