Paul Wallbank – Brilliant Communications

Tag: apple

  • Tech’s tough days

    Tech’s tough days

    Today sees another tough day for tech stocks with both Apple and Amazon missing their projected earnings which again finds Microsoft being stood up at their own party.

    For Amazon, along with the costs involved with a new range of Kindles, there’s a huge write down in their Living Social investment, another indicator that the group buying bubble has passed into history alongside tulips, 19th Century Argentinian railway bonds and South Sea investments.

    It’s worrying that while Amazon’s quarterly sales have increased by 23% over last year’s figures to $11.546 billion dollars, their cost of sales has also gone up 23% from $8.325 to $10.319 billion. This is a trend to watch closely over the next few quarters.

    Unlike Amazon, Apple still made a fat profit with income going up to $8.2 billion for the quarter, an increase of 24%. This missed many Wall Street analysts’ estimates.

    Apple’s missed earnings were put down to supply chain constraints and development costs, but what jumps out looking at the cash flow is the six billion turnaround in the company’s Accounts Receivable. One assumes this is the value of pending invoices on the new ranges of iPhones, iMacs and iPads sent out to their sales channel.

    If that’s right, Apple are looking at a big boost in their cashflow next month, although there’s few companies who would like to have five billion dollars in outstanding invoices in today’s economic climate.

    Once again though, Apple have managed to steal Microsoft’s thunder. Despite the glitz and glamour of the Windows 8 launch in New York, Microsoft’s announcement has been muted by the tech and business press’ reaction to the earnings reports.

    What is clear from all three companies though is that hand held devices – the Apple iPad, Amazon Kindle and Microsoft Surface – are going dominate the tech and financial coverage of all three companies for the rest of the year.

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  • Apple’s line in the sand

    Apple’s line in the sand

    The comprehensive refresh of Apple’s product lines announced by CEO Tim Cook this morning is a clear warning to Google and Microsoft that the market leader in the post-PC computer marketplace is not going away.

    With both Google and Microsoft having a major product releases over the next week, the pressure is now on both companies to match Apple’s announcements and product range.

    For Microsoft, the stakes are now substantially higher for their Windows Surface tablets. The Fourth Generation iPad and iPad Mini (or is that iPod Maxi?) are going to be the benchmarks the Redmond tablet PCs will be measured against.

    An interesting part of the Apple presentation was marketing chief Phil Schiller trash talking the Android competitors with a side-by-side comparison between the iPad and the Nexus.

    These comparisons are becoming a hallmark of Schiller’s marketing in the post Steve Jobs Apple, whether this is good or bad remains to be seen, but it is a difference compared to the old boss’ way of doing things. Although Jobs wasn’t adverse to poking fun at some of Microsoft’s confusing habits.

    For geeks, and those who like shiny things that go “beep”, it’s an exciting week and Apple have shown why they are masters at controlling the tech media.

    It’s now up to Google and Microsoft to see if they can match Cook’s announcements and meet Apple’s price points.

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  • Can Microsoft beat the PC marketplace’s structural decline?

    Can Microsoft beat the PC marketplace’s structural decline?

    In New York on Thursday Microsoft will have a marathon launch of their Windows 8 system and the futures of many of their hardware partners lie on the success of the new system.

    For Microsoft, Windows 8 could be the last throw of the dice for the desktop operating system that has sustained the company for thirty years.

    The figures aren’t good for Windows as Microsoft’s 2012 profit and loss shows, here are the figures broken out by operating unit segment from the company’s annual report.

    Year Ended June 30, 2012 2011 2010
    Revenue  bn $  bn $  bn $
    Windows & Windows Live Division 18,818 18,787 18,789
    Operating Income (Loss)
    Windows & Windows Live Division 11,908 11,971 12,193

    The core Windows & Windows Live Division has stagnant revenues and a slowly declining profit margin. We’ll leave the huge losses in the online division for a future post.

    Since the days of the first MS-DOS deal with IBM, Microsoft’s core business has been the licensing of operating systems to PC manufacturers and now that model is in trouble.

    For instance Dell had an 8% drop in revenue resulting in a worrying 22% drop in operating profit, their PC dominated consumer division suffered a fat 22% drop in sales and recorded a miniscule .5% profit margin. Similarly Asus had 25% drop in sales to record a 2011 loss.

    The pain being suffered by PC manufacturers’ sales and margins will almost certainly be shared by Microsoft as companies like Dell, HP and Asus simply can’t afford to pay the licensing fees which have sustained the Redmond business model for so long.

    Microsoft and their partners hope – or pray – that the PC decline is a temporary hiccup in computer sales similar to the traditional lull seen before the release of a new system.

    History’s not on their side with research company Asymco expecting sales of tablet computers to overtake PCs sometime in late 2013.

    This is not a cyclical trend – the PC industry is in structural decline; the traditional Windows upgrade cycle is dead and Google are running interference with their Chromebook networked laptops.

    Moving onto tablets and smartphones in this light makes sense for Microsoft and given the PC manufacturers have failed dismally to deliver decent tablet computers or phones over the last 15 years so it’s understandable the software giant wanted to develop their own hardware or team up with a struggling company like Nokia.

    The declining margins in personal computers means we’re seeing the end of the Windows desktop ecosystem. With the rise of the web and cloud computing the type of operating system we use is like arguing between Toyota and BMW drivers; one might be more prestigious but both will get you where you want to go.

    For Microsoft the challenge is to replace those Windows licensing rivers of gold with similar revenue streams through their phone and tablet products but with Apple and Google already dominating those fields, is it too late for the company that dominated personal computing? The next six months will tell us.

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  • Apple’s 2am blues

    Apple’s 2am blues

    Should a Sydneysider or Melbournite wanted to set their iPhone alarm to 2am or 2pm today they were plain out of luck.

    It appears iOS6 no longer likes 2am or 2pm if your location is set to the parts of Australia that switched to summer daylight savings this morning.

    iOS6 loses 2am in Eastern Australia going to daylight savings time

     

    While it’s understandable you can’t set your clock to 2am Sydney, Melbourne or Hobart time as the clocks jumped an hour you also can’t set it to 2pm.

    Although if you already have a timer set, it still appears as 2am, or 2.30am in the case of my phone.

    It’s just a dumb bug and switching to Brisbane time, or any other part of the world that didn’t go over to Australian daylight savings time this morning, fixes the problem.

    Had I known about this yesterday I’d have turned on that 2.30am wake up call just to see what would happen. Then again, maybe not.

    While it will undoubtedly fix itself tomorrow as the transition day passes, it’s pretty clumsy and embarrassing. Moreover it doesn’t bode well for Apple’s attention to detail in the post-jobs era.

    UPDATE: As expected the bug has passed the following day — we have our 2 o’clock back although that such a silly bug could have slipped past Apple’s quality control is still a worry.

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  • Meeting the solid state Woz

    Meeting the solid state Woz

    When the opportunity comes to meet co-founder of Apple computer Steve Wozniak you jump at it, despite being jet lagged from the previous day’s flight.

    One of the tough things when writing about Steve Wozniak is that he is a fast talker. You have to be quick to keep up with his ideas and words.

    Steve was in town to show off the range of solid state computer memory cards manufactured by Fusion-iO, a company based in Salt Lake City.

    Wozniak liked the idea so much he became Fusion-iO’s chief scientist in 2009. “When I first saw the iO drive, it was so beautiful I had to buy one from the company and put it in a frame just to frame it at home.”

    What enthused Woz were Fusion-iO‘s range of NAND flash memory cards that speed up servers while reducing their power and cooling requirements.

    Those power savings are important for data centres when hundreds of thousands of servers might be in one building, Fusion-iO’s CEO and co-founder David Flynn estimates this could save up the industry a $250 billion a year in operating costs.

    Probably the biggest benefits though are in the corporate space, one Flynn’s boasts is how one movie studio used Fusion-iO’s products to reduce transcoding between formats from two hours to 39 seconds.

    Another case study they show off is how grocery chain Woolworths were able to reduce the 17 hours to run their weekly trading reports to three hours meaning they were able to capture weekend figures for their weekly Monday morning board meetings.

    For smaller businesses, the biggest benefit is these products can turn fairly basic desktop computers into workstations with the $2,500 ioFX card promising some serious post production capabilities for a system although one would expect an entry level box wouldn’t have the data connection, hard drive or – most importantly – power supply to cope with the demands of such a device would put on the typical cheap components in a basic desktop system.

    All of these changes though are heralding some pretty big changes for big and small businesses.

    Where Steve Wozniak sees the greatest application of moving data faster is in Artificial Intelligence applications like voice recognition. Apple’s Siri is a good example of this.

    The barrier to effective voice recognition is the sheer amount of data processing required to effectively understand voice commands. Doing this on cloud services is a far more efficient and effective way of doing this.

    As we saw at Dreamforce last week, the sheer amount of data pouring into companies is changing how they manage information. Getting access quickly to relevant information is an important part of managing it.

    “I’ve never gotten so excited about or fell in love with a technology like this since Apple.” Says Wozniak.

    Having a chance to speak to Steve Wozniak up close shows that fast talking enthusiasm is for real. The Woz is a real geek.

    Like all true geeks Wozniak is passionate about what he believes in – whether it’s about NAND flash cards or becoming an Australian resident he bubbles with enthusiasm. Just don’t try writing notes down while he’s in full flight.

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