Six years ago this month, I revealed in Businessweek that Apple had incorporated in Nevada where the corporate tax rate is zero. So I found the Times’ account — written by Charles Duhigg and David Kocieniewski, about the many financial tricks that Apple employs to minimize its tax exposure — to contain a lot of old news, but also some new, fascinating details. Who couldn’t love a phrase like “Double Irish With a Dutch Sandwich” to describe arcane accounting and legal tricks?

But the implication the story leaves a reader with — that Apple is somehow doing society a disservice by not paying its fair share of corporate taxes — is simply wrong on many levels. The most dubious of the lines that the Times attempts to draw is between Apple and the budget crisis at De Anza College, a Cupertino community college where Apple co-founder Steve Wozniak was once a student. The college is facing a “death spiral” because of a decline in funding from the state. This funding, the reader is led to conclude, would be more plentiful if corporations like Apple were to step up and pay, and not escape the tax bill by setting up an office in neighboring Nevada.

What the Times fails to make clear is how community colleges are funded in California. The picture is much more complicated. California community colleges draw the majority of their funding from the state’s general fund — which is drawn directly from the state’s personal and corporate income taxes — and from local property taxes collected by counties. As of the 2009-2010 budget cycle, these two buckets made up about 88 percent of the system’s funding. State lottery funds, federal funds and student fees made up the remainder.

Tax policy wonks — which I’m not — will remember that California was the birthplace of the property tax revolt movement in the 1970s. In 1978, California voters overwhelmingly approved a measure that limits the amount by which property taxes can increase each year. Since then, at least one estimate pegs the amount that the state’s taxpayers have avoided paying at north of half a trillion dollars as of 2009. In February, the property tax shortfall facing the state community-college system was $41 million. Conclusion: If there is to be blame for the shortage of taxpayer funding at De Anza College, a healthy portion of it should be laid at the door of California’s own voters and taxpayers, who in 1978 thought that property-tax limitations were a good idea.

I had a few other problems with the story. Take sales taxes. When you buy a Mac in New York, you pay a sales tax of 8.875 percent. For a base-level iMac, priced at $1,199, that works out to more than $106 in taxes. While some states charge no sales tax — Alaska, Delaware, Montana, New Hampshire and Oregon — the average sales tax in the U.S. works out to 9.6 percent.

Putting aside the fact that the average sales tax in Canada is higher, let’s assume that Apple’s North American sales of $38.3 billion in its fiscal 2011 were taxed at that rate, and do the math: We get $3.7 billion in sales taxes paid into the coffers of states and municipalities, except in those five states that have no such tax. That amounts to more than 1.5 times the $2.4 billion the Times says Apple would have owed the federal government. Factor in VAT and other similar taxes in the U.K. and throughout Europe, and you get the idea that Apple is generating tax revenue aplenty on the sale of its goods. Yes, those taxes are passed on to customers. But isn’t that the case with every tax a corporation making consumer products pays?

Finally, you may remember that earlier this year Apple released an extensive report on the number of jobs it had created and supported both through direct employment and in the orbit of the products it creates. It seemed an odd thing for Apple to release at the time, and now we know why: It reads almost like it was prepared by Apple in advance, knowing this story was in the pipeline at the Times. The final number, by its reckoning: 514,000 U.S. jobs are created by the Apple universe, including 47,000 employees; 210,000 jobs were created as part of the app economy, which didn’t even exist until 2008.

Assuming that each of those jobs pays a salary north of $35,350 a year, taxes collected on that income could range anywhere from 25 percent to 35 percent, depending on the income bracket. And that’s before accounting for any stock-based compensation.

At this point, the discussion turns to a deeper question: Is it better for society to have a company pay more in taxes, or to create more jobs? You can argue that had Apple not taken advantage of the various strategies it employed to pay less taxes, it might not have flourished as well as it has, and thus created fewer jobs. But people smarter than I will likely hash out the finer points of this argument in the coming days.

(Image is a screen grab from this silly Beatles cartoon built around the group’s song “Taxman.”)

Okay. So maybe you still feel a little funny, and/or like a self-parody. But an Apple ad is an Apple ad, so we will dutifully catalog it here.

As many people who catalog Apple ads have noted, this is the first time that Apple has used a celebrity in one of its campaigns for a very long time. The last one that the hivemind can recall: Jeff Goldblum hawking the original candy-colored iMac, back in the late 90s — way back when Apple was still pretty much a niche company:

Piper Jaffray analyst Gene Munster reports that NPD’s data, which counts only U.S. sales, implies that Mac sales for the March quarter ended down 5 percent year over year. And if that proves to be the case, Apple could potentially miss its Mac number when it posts financials next Tuesday. Caveat: Last quarter, Apple beat NPD data by 14 percentage points — something to keep in mind while mulling Munster’s assertion.

Anyway … the Street is looking for worldwide Mac sales of 4.5 million; Munster figures Apple likely sold less than that — somewhere between 4.1 million to 4.4 million, with sales slowed by a core MacBook Pro and iMac lineup that hasn’t been refreshed in more than a year. Those two product lines alone likely account for about 50 percent of Mac sales, so it’s certainly conceivable that diminishing consumer interest in them might affect Apple’s sales numbers.

But is this really anything to worry about?

Munster himself acknowledges that strong iPhone and iPad sales will more than offset any Mac softness. He still expects the company to beat consensus EPS and revenue estimates and, like many Apple watchers, he sees new Macs headed into the pipeline soon, following on the heels of Intel’s new Ivy Bridge processors. Said Munster, “We believe that MacBook, iMac, and potentially MacBook Air, lines could all be refreshed during the June quarter, which we believe would result in a reacceleration of Mac sales.”

First is fixing our execution, ensuring we have the right systems, processes and people. This includes things like optimizing our supply chain, including SKU reduction, to remove unnecessary complexity from the way we design, manufacture and deliver products; upgrading our sales tools and systems to respond more quickly to customers; and increasing the productivity of our sales force by rationalizing our go-to-market.

For those who don’t know, a SKU — pronounced “skew” — refers to something called a stock-keeping unit. It’s business shorthand for a particular model or type of product. A PC with a certain processor, certain amount of memory and certain capacity hard drive, and in a particular color, is a SKU. The same goes for models of printers, smartphones, or different versions of products sold into different distribution channels or with different options inside the box.

What Whitman is saying is that HP is producing too many different types and configurations of products, and this is injecting a lot of expensive operational complexity that might be getting in the way.

My ears perked up at this during the conference call, and when she repeated the phrase on CNBC today (see video below). It took me back in time to — of all things — the very first Steve Jobs MacWorld keynote I ever attended. The year was 1998, the MacWorld Expo that year was in New York and I had begged my boss at the time to let me go. Apple was in those days a company that many media organizations could afford to ignore because its relevance was limited to people who used Macs, which included me.

This was the year the first iMac was about to explode on the scene, and indeed, Jobs talked in great detail about it during this keynote. But not before he set about explaining the strategic problems at Apple he had sought to solve during the preceding several months.

One of them was the fact that Apple made a comparatively dizzying array of computers, nearly all of them labeled with numbers that had no clear meaning to anyone. During his talk (part of which I’ve embedded in a grainy video below), Jobs wiped away the complex list in favor of a four-square grid with four kinds of products. Consumer desktops, consumer notebooks, pro desktops and notebooks.

For a young business reporter just starting out, which I was, the clarity of Jobs’s argument was a revelation: A complex product offering can cause problems both for the customer and the company selling the goods. First, it muddies the waters for customers, especially when two or more versions of a product suit a particular need. Second, it adds operational cost and complexity.

One product — say, a printer — may be manufactured in just one way, but then customized in a mind-numbing set of different variations for different lines of business. There may be different accessories in the box or different service options, or whatever. Each of these is a SKU all its own that has be tracked and marketed and sold and supported, adding costs along the way.

Being the biggest tech company by revenue, working in five major business segments and operating in 166 countries adds plenty of complexity by itself. Why make it more complex than it has to be? Clarity and simplicity work.

Let’s compare Apple and HP on their choice of computers. Shop for a Mac today, and the four-square grid that Jobs showed in 1998 still stands, mostly: There are two kinds of notebooks, and they vary by screen size, and three kinds of desktop machine each aimed at unmistakably different needs, for a total of six. Of course there are variations within them for memory and hard drive and screen size, but you get my point.

On HP.com I see six different notebooks for “everyday computing,” five ultra-mobile machines, six “high performance” notebooks and four machines sold under its “Envy” brand. I count 21 different notebook options, and I haven’t even looked at the desktop models yet. Does anyone really need that many choices?

A sense of clarity is good for business, and it’s an important lesson that many companies of a certain size have to re-learn from time to time. When Jobs learned it at Apple in 1998, its product complexity was nowhere near the level that Whitman now faces at HP. But we all know how keeping it simple worked out for Apple. And while the problem is probably an order of magnitude more complicated at HP, the fundamental business lesson still stands: A stripped-down product portfolio could work for HP, too.

Here’s part of the Steve Jobs keynote I mentioned above. This is Part 2, and he goes on to describe the simplified product strategy in the the first few minutes of part three here.

And here’s Whitman’s appearance from CNBC earlier today.

Among the headline features are deep integration with Apple’s iCloud service, and with Twitter. And several features from iOS devices, like Messages and Reminder, are making their debut on the Mac, and will create a more unified experience among Macs, iPads and iPhones.

The release, which is coming only a year after Lion debuted last summer, might just indicate a speeding up of the cadence at which Apple does Mac software upgrades. Usually there’s an interval of 18 months to 24 months between major OS upgrades. That makes this announcement a bit of a surprise. Does that mean we can expect another one about 18 months from now? We’ll see.

Here’s a quick rundown of the 10 new features:

iCloud built in: Mountain Lion will be the first version of OS X built with iCloud fully integrated. Documents in the Cloud is a new feature that will allow documents you create and edit on the Mac to sync up and readily be available on iPhones and iPads. Changes you make in the document on one device will automatically appear on the other. You’ll be able to use iCloud from the moment you start up your Mac and sign in with an Apple ID.

Messages: It’s crazy to think about it, but iMessage users on the iPhone and iPad have sent something like 26 billion messages in only the few months it has been available. Messages is the new instant messaging application that will replace iChat. It will unify the experience between the Mac and iOS devices, and will still be compatible with services like Google Talk, AOL Instant Messenger, Yahoo Messenger and Jabber, but will also bring iMessages into the Mac. Conversations stay up to date across all devices. It supports photos and videos. Also? There’s a FaceTime button.

Twitter: Twitter is also deeply integrated into Mountain Lion. You’ll be able to tweet directly from within several applications, sharing Web site addresses, photos and videos. Central to this is something Apple calls the Tweet Sheet, which you call up from the Share menu. It grabs what you want to share on Twitter and you write your tweet from directly within the Mac OS. And as cool as this is, it’s notable also for what it’s not: Facebook integration. Expect lots of speculation around that.

Share Sheets: Sharing is kind of a big deal these days, so it makes sense that the ability to do it — whether on Twitter or via email or any one of the cloud services out there — would be available on the Mac. There’s a new Share button in Safari and in other applications that makes it easy to send a photo to a friend via email or to Flickr, or a video to Vimeo or to another computer via AirDrop.

Notification Center: The dashboard of notices saying what’s going on in iOS is coming to the Mac. Similar to how you reach it on the iPhone — a swipe down along the length of the screen — it will appear on the Mac with a two-finger swipe from the right edge of the trackpad, and the list will appear on the right side of the screen. When you get a notification from an application — say, an email has arrived, or a download is finished, or a calendar reminder is going off — you can see them all in one place. Also, short messages with notifications appear in the upper right-hand corner of the screen, and then fade away after a few seconds. It reminds me a great deal of a third-party application enhancer I use, called Growl.

Reminders: Another popular iOS app is being added to the Mac. Your to-do list remains synced across the Mac, iPhone and iPad, and you can add reminders that pop up throughout the day, so you don’t forget.

Notes: The all-purpose “take this down for later” application gets the Mac treatment. Soon you’ll be able to drag URLs into a note. And thanks to iCloud, they’ll be synced across Mac, iPhone and iPad. You’ll also be able to “pin” a note to your desktop, meaning it will stay open even if you close the main Notes application. Notes also has a Share button.

Game Center: Long a weakness on the Mac, gaming is getting stronger all the time. Games, it turns out, are the most popular software titles on the Mac App store. So it makes sense to bring the Game Center experience from iOS to the Mac. I saw a quick demo, where two people played a racing game against each other — can’t remember which game exactly — one was on the iPad, the other on the Mac. You’ll be able to challenge friends, keep track of your standings on a leaderboard and see what games your friends like. There’s also support for in-game voice chat, so you can talk trash.

Gatekeeper: Expect this feature to be controversial among Mac software developers. Basically, it’s an attempt by Apple to deal with the fact that the one serious security threat it faces is software that looks good at first but turns out to behave badly only after you’ve downloaded and installed it. The new scheme basically sets up a three-tier system, where the user can decide from where they will be allowed to download and install new software. In the most restrictive — or some will argue safest — case, you can set your Mac to allow only software from the Mac App store. As it does with the App Store on iOS devices, Apple vets the software sold there for safety. In the second case — this one not as restrictive — you can install software from sources other than the App Store, but only from developers who have signed up as a known developer. Here, Apple will not have checked the app for safety, but will at least vouch that the developer is known. Developers will have the option of signing up for a Developer ID. This is the part that I think they’ll find a little controversial. Anyway, in the third case, there are no restrictions. You can install software from any developer and any source, much as you can do today.

AirPlay Mirroring: If you have an Apple TV handy, you’ll be able to use your TV as a screen for your Mac — it’s super easy. If they’re on the same wireless network, the Mac will have a simple pulldown menu that makes your TV mirror what’s on the Mac.

Finally, Apple added a lot of new features for the Chinese market. Text input has been improved, and several popular Web services — like Baidu for search, integration with Sina Weibo for Twitter-like sharing and video-sharing with Youku and Tudou — have been built in, in order to make the Mac OS experience a lot more China-friendly than it has been before. Given the Apple madness that has struck that country in recent months, it will certainly find a happy audience.

Its his second honor from the Queen, who named him Commander of the British Empire, or CBE, in 2006. The new title will be conferred by the touch of a sword held by the Queen.

Interestingly, Ive is only one of two people being given this particular title this year, from the extensive list of other honors published in the London Gazette. (Ive’s name appears on page 24 of the announcement; there’s a PDF of that page here.) The other KBE recipient is the art historian John Patrick Richardson, who wrote a well regarded biography of Pablo Picasso.

The best profile of Ive that I know of is this 2006 BusinessWeek story by my former colleague Peter Burrows. It’s more than five years old, and so may be a bit dated, but it’s terrific.

The full announcement from the British Embassy is below.

Her Majesty the Queen honours Apple designer with knighthood

31 December 2011

Jonathan (Jony) Ive has been appointed by Her Majesty Queen Elizabeth II a Knight Commander of the Most Excellent Order of the British Empire (KBE).

The honour, for the lead designer at Apple Inc. of products like the iPod and iPad, was part of the New Year 2012 Honours List and was in recognition of Jonathan Ive’s services to design and enterprise.

“I am keenly aware that I benefit from a wonderful tradition in the UK of designing and making,” said Jony Ive. “To be recognized with this honour is absolutely thrilling and I am both humbled and sincerely grateful.”

“I discovered at an early age that all I’ve ever wanted to do is design,” Ive added. ” I feel enormously fortunate that I continue to be able to design and make products with a truly remarkable group of people here at Apple.”

The British Consul General in San Francisco, Priya Guha, said she was “delighted that Jony Ive has been granted this exceptional honour by Her Majesty The Queen. Through his design of the iMac, iPod, iPhone and iPad, his work has transformed the lives of a generation of people, revolutionising the way people interact with technology. He epitomizes the strengths of British design and innovation.”

British Honours are bestowed on merit for exceptional achievement or service to British interests. This is the second royal honour for Ive, who was awarded a CBE (Commander of the British Empire) in 2006 for his achievements in British design and innovation. The current Knighthood recognises his work on raising design standards generally in consumer, industrial and professional goods and for his championing of British design.

Jonathan Ive becomes Sir Jonathan Ive, and the knighthood will be conferred by the touch of a sword by Her Majesty The Queen.

London-born designer Ive is the Senior Vice President of Industrial Design at Apple, reporting directly to the CEO. Since 1996, he has been responsible for leading a design team widely regarded as one of the world’s best.

Ive has demonstrated a life-long commitment to design. He has been recognized with numerous design awards including being named Designer of the Year by the Design Museum London and awarded the title Royal Designer for Industry by The Royal Society of Arts.

Ive holds honorary doctorates from The Royal College of Art, The University of Arts London, the Rhode Island School of Design (RISD) and Northumbria University (Newcastle Polytechnic) where he also received his Bachelor of Arts degree. He holds 596 design and utility patents in his name.

After graduating in 1989, he co-founded the London design agency Tangerine, where he designed everything from washbasins to televisions. In 1992, he moved to Apple and, after the return of Steve Jobs in 1997, became Senior Vice President of Industrial Design, designing the first iMac in 1998, its progressively sleeker successors, and then the iPod, iPhone and iPad.

The Queen chooses the recipients of Honours on the advice of the Prime Minister and other relevant ministers, to whom recommendations are made by their departments or members of the public. Private nominations–those made by individuals or by representatives of organisations to the Prime Minister’s Office–can also be made and account for about a quarter of all recommendations.

(Image is a screen grab from this Apple video on the MacBook Air.)

The Macintosh TV

A new iMac with integrated TV functionality.

That’s the latest speculation from Wedge Partners analyst Brian Blair, who believes there will be a step between the Apple TV and the Apple Television.

“We believe Apple’s redesign of the iMac in the first half of 2012 will likely usher in some … TV capability into the iMac offering first, effectively taking the high end and larger screens of the iMac line and pushing it toward the TV market by integrating Apple TV and iCloud features into a slimmer all-in-one PC,” Blair writes. “Apple could effectively start with what they already have on the manufacturing line and slowly push their offering from 27 inches and scale up from there to 32 inches and then move on to the 42, 50 and 55 inch market.”

Blair figures these new iMacs would behave like Apple TVs, streaming movies, TV shows, photo slideshows and more to newer Wi-Fi-enabled televisions and providing them access to content stored on iCloud as well.

It’s not an outrageous idea, particularly as an interim step on the way to a true television set. Or as a good reason for consumers to abandon their current TV sets in favor of iMacs. This would be particularly compelling if Apple was able to persuade the cable companies to stream their content though the Apple TV interface. Add to that AirPlay mirroring on the iPhone, iPad, and iPod touch, voice navigation via Siri, and integrate it all into a 42-inch or better screen, and and you’ve got a pretty good reason to watch TV in your office. Or mount your PC on the living room wall.

Of course, Apple has been down this road before, first with the ill-starred Macintosh TV and then with its Front Row media center program, which was abandoned with the launch of Lion.

The company may not be interested in traveling down it again, particularly these days, when it seems so focused on disruptive changes. If Apple hews to that strategy for its HDTV, there will be no interim step. Just a single big announcement intended to upend the industry as we know it and send the competition scrambling.

Apple typically updates many of its products each year, sometimes extensively, sometimes less so. But in 2012 it’s got big plans for a number of them. Supply chain sources tell the occasionally reliable Taiwanese trade mag Digitimes that Apple will “completely overhaul” its product portfolios this year — everything from the iPad and iPhone to the iMac and MacBook Air. And evidently it’s already hard at work on the iPad and has requested flat panel modules and LED light bars for two prototypes.

Details beyond that are slim indeed, though in a separate report Digitimes says we can expect two next-generation iPads next year: An upgraded iPad 2 around March and a true iPad 3 late in the third or fourth quarter.

Two iPads launched between March and December? Seems dubious to me. As I said, break out the salt lick. Still, you never know.

The research house says the Mac saw a year-over-year sales increase in April 2011 of 9 percent. That’s nowhere near the 22 percent Y-O-Y growth Wall Street is looking for in the entire June quarter.

Why the descrepancy? Simple. April of 2010 is a hell of a tough comparison month.

The refresh of the MacBook Pro line on April 13 drove a 39 percent spike in Mac sales for the month. With no similar refreshes juicing demand in April of 2011, sales aren’t up quite as much.

Which doesn’t mean Apple won’t post that 22 percent increase investors are hoping for. As Piper Jaffray analyst Gene Munster notes, it’s far too early to make a call on the June quarter, particularly given the launch of new iMacs earlier this month.

In fact, according to NPD weekly data, Apple saw Y-O-Y unit growth in Macs of 35 percent during the first week of May following the May 3 launch of the new quad-core, Thunderbolt iMacs.

His name is Michael Wolfe. He’s 52 and has worked for HP for five years, most recently as VP for Information Technology. This will be his second go as a CIO. Before his stint at HP, he spent 24 years at Motorola’s Semiconductor Unit and was CIO during the period it was spun out to become Freescale Semiconductor.

His new boss, AMD’s interim CEO Thomas Seifert, had high praise. “Mike has effectively led IT transformations constantly focusing on reducing operating costs and significantly improving business innovation,” he said in a statement. “His considerable talent and experience will help AMD to continue strengthening our IT infrastructure and streamline our business based on our own products and platforms.”

This hiring is taking place against the backdrop of the complicated, difficult search for a new CEO at AMD following the surprise resignation of Dirk Meyer in January. COO Robert Rivet soon followed.

AMD shares haven’t moved much since then, and it has been the subject of recurring problematic buyout rumors. Today the shares closed at $8.55, unchanged from the prior session, and that’s up only a nickel from where it was at the start of the year. Shares fell five cents in after-hours trading. Investors seem to consider AMD a company in a holding pattern until there’s some resolution in the corner office.

If such a deal happens, it would get Qualcomm, whose business is tied most closely to the wireless handset business, into the business of supplying chips for Wi-Fi and other wireless networking technologies like GPS, Bluetooth and Ethernet. Atheros’s Align product is a set of chips for 802.11n Wi-Fi networking. According to its 10K report, 43 percent of its fiscal 2009 sales were from its networking segment, which went into wireless routers and Ethernet switches, while 37 percent of sales went into notebook PCs, and 20 percent into consumer devices like game systems, navigation devices and Blu-ray players. These are all markets that Qualcomm has had trouble penetrating.

Atheros says its biggest customers are Hon Hai Precision Industry, the Chinese company that owns the manufacturing behemoth Foxconn, and Nintendo, though that only paints a partial picture.

Update: I asked market research firm iSuppli to look through its database of product teardowns to see where Atheros’s chips have shown up in the past, and the list is extensive. Atheros networking chips show up in numerous notebooks, including Hewlett-Packard’s, Toshiba’s, Acer’s, Asus’s, and Apple’s iMac. They’ve also been seen in several handheld products, including Amazon’s third-generation Kindle, Samsung’s Galaxy S, Sony Ericsson’s Xperia X10, the Nintendo DSi, and Microsoft’s Zune HD. Networking customers include Netgear, 2Wire and Huawei. At least now it’s pretty clear why Qualcomm might be interested.

Sales in 2009 were $522 million, and the average forecast by analysts calls for it to report sales of $922 million for the year ended Dec. 31. Atheros shares naturally shot up by a whopping 19 percent on word of a potential deal. At $44 a share, the stock is now trading at nearly double its 52-week low.

A deal for Atheros would also get Qualcomm’s year off to a potentially positive start following the demise of its FloTV business, though there are also several potential developments in the offing for Qualcomm, including augmented reality and a possible design win in Apple’s iPhone 5. Qualcomm investors appeared to like the notion of a combination with Atheros, too, and sent its shares up by 1.5 percent.

Meanwhile, here’s Walt Mossberg’s interview with Qualcomm CEO Paul Jacobs at last year’s D8.

]]> http://allthingsd.com/20110104/qualcomm-close-to-deal-for-atheros/feed/ 1 http://allthingsd.com/20101229/wi-fi-hotspot-safety-and-mac-viruses/ http://allthingsd.com/20101229/wi-fi-hotspot-safety-and-mac-viruses/#comments Wed, 29 Dec 2010 22:50:38 +0000 Walter S. Mossberg http://mailbox.allthingsd.com/?p=805 Q:

I have had a little disagreement with my IT guy. He says that when taking my laptop out in public, I should never type anything with passwords or confidential information. He says that someone can pick up my information. I say that I can’t believe that everyone in public is totally exposed. There must be some way to protect yourself while on a public network. Who is right?

A:

There’s no single correct answer. It’s true that thieves in public places can and do steal passwords and other sensitive information transferred over public Wi-Fi hotspots. But it’s also true that methods like Virtual Private Networks can mitigate this problem, and that most public hotspots are, just by the odds, unlikely to harbor these thieves at any one time. However, my advice is to avoid doing any sensitive tasks, like banking or stock trading, while using public hotspots. And, if you’re doing anything confidential on your company or home network remotely, use a VPN, which is like a secure tunnel through the internet.

Q:

I recently purchased a new iMac and am considering installing anti-virus/spyware/malware programs on it. Reader forums in MacWorld magazine say it’s not needed. A local newspaper computer columnist says he’s had Macs since the early ’80s and has never run an AV program and has had no problems. Other online computer advisers say Macs are always vulnerable and advise to run AV programs. Any recommendations here?

A:

No computer is inherently invulnerable to malicious software, and that includes the Macintosh. However, nearly every malicious program known is meant to run on Windows and simply won’t operate on the Mac operating system. The handful of Mac viruses and other malware that have been discovered are either proofs of concept, or have spread to very few users and done little or no damage. Most Mac users I’ve known don’t run third-party security software and haven’t had malware problems. So I don’t routinely recommend Mac security software.

There are two caveats, however. If you are running Windows on your Mac, you should install Windows security software, to run while Windows is in use. Also, Mac users are just as vulnerable as Windows users are to online scams, or to insecure public networks. So, even though you may never get a virus, you still have to be careful about doing sensitive Internet tasks via public hotspots or careless behavior like clicking on links sent you by unknown email senders.

Q:

My car has an audio jack that integrates any input into the sound system. I know that Kindle has a text-to-speech feature. Would I be able to use that feature via the audio jack in the car?

A:

Without having tested your car’s input jack, I assume the answer is yes. The Kindle has a standard headphone jack.

However, note that the text-to-speech feature works only on certain books, not all of them. Publishers have the right to allow or disallow it for any book.

Also, even if it’s enabled, it isn’t the same as an audio book, which is usually read by a trained narrator or by the author. Instead, it’s a computer doing the reading.

You can find Mossberg’s Mailbox and my other columns at the All Things Digital website, http://walt.allthingsd.com.

]]> http://allthingsd.com/20101229/wi-fi-hotspot-safety-and-mac-viruses/feed/ 2 http://allthingsd.com/20101228/ipad-rivals-underpowered-poorly-constructed-and-largely-not-ready-for-prime-time/ http://allthingsd.com/20101228/ipad-rivals-underpowered-poorly-constructed-and-largely-not-ready-for-prime-time/#comments Tue, 28 Dec 2010 11:02:56 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=54667 This holiday season the iPad was pretty much the go-to device for consumers looking to gift a tablet. In a note to clients this week, Wedge Partners analyst Brian Blair said recent retail checks point to significant end demand for the iPad.

“Even with a handful of tablet competitors hitting the market, the iPad remained the only game in town in our holiday checks largely because many of the tablets hitting the market are junk for lack of a better word,” he wrote. “They are underpowered, poorly constructed and largely not ready for prime time.”

Evidently, Blair wasn’t too impressed by Samsung’s Galaxy Tab.

Anyway…

The holiday season is always particularly kind to Apple, but this year it may have been even kinder than usual. In addition to the iPad’s continued momentum at market, Blair observed stronger than expected holiday sales of iMacs, MacBook Pros and the new 11-inch MacBook Air.

Sounds like Apple’s December quarter is shaping up to be another blowout.

]]> http://allthingsd.com/20101228/ipad-rivals-underpowered-poorly-constructed-and-largely-not-ready-for-prime-time/feed/ 0 http://allthingsd.com/20101222/no-signal-homes-often-baffle-wi-fi-from-routers/ http://allthingsd.com/20101222/no-signal-homes-often-baffle-wi-fi-from-routers/#comments Wed, 22 Dec 2010 23:55:59 +0000 Geoffrey A. Fowler http://ptech.allthingsd.com/?p=1687 Technology companies are touting wireless homes, where we can download a book in the tub and beam a movie from a tablet to the television set. But too often, that potential doesn’t live up to the reality of sluggish and flaky wireless networks.

My apartment has more than a dozen devices that feed off the network: two laptops, a printer, an e-reader, wireless speakers, two smartphones, an iPad and more. Yet getting gadgets to connect to my two-year-old wireless router is a dark art. I can surf the Web on the street in front of my house, yet can’t get a signal sitting in bed. In desperation, I even tried dangling a router—the equipment that takes your Internet connection and shares it with the devices in your home—from the ceiling in an effort to distance it from interfering walls.

Surely, covering a whole apartment is a problem that the decade-old Wi-Fi industry can solve. So I tested four top-of-the-line home wireless routers, each of which features the latest generation dual-band “wireless N” technology designed to increase performance.

The result was disappointing. None of the routers could deliver a 100% consistent wireless experience that could take advantage of the latest technology, like Apple’s AirPlay media-streaming service.

One came close, thanks to a controversial signal-boosting feature that could potentially interrupt my neighbors’ networks: the Netgear WNDR3700, which retails for $169.99. Another, the $179.99 Cisco Linksys E3000, was runner-up in some tests, but still sometimes dropped out when streaming music.

My tests weren’t scientific studies of signal strength and speed. Every home is a different combination of size, building materials and potential competition for precious wireless bandwidth, such as other Wi-Fi networks and cordless phones. Even pets can obstruct signals. Because of that, router manufacturers won’t even offer estimates on the range their devices can serve.

I conducted real-world torture tests designed to see how the routers might perform in challenging scenarios at completing tasks like streaming media to iPhones and moving large files between computers. I didn’t test devices known as repeaters, which extend the range of an existing network, because I wanted to see how far I could push the routers on their own.

My 100-year-old apartment building features materials that act like kryptonite to Wi-Fi signals, such as metal mesh in plaster. Worse, my urban San Francisco building is surrounded by apartments with their own Wi-Fi networks—25, at last count.

For balance, I also tested the same four routers on my friend Mark’s suburban house, which competes with fewer neighboring Wi-Fi networks, but is larger. In our suburban tests, the routers performed in largely the way they did in the urban environment, though in that setting both the Netgear and Cisco performed admirably. A third model, the $109.99 Belkin Play N600HD, performed adequately.

All the routers I tested, which included the $179 Apple Airport Extreme, feature a technology called simultaneous dual band. This means they really run two networks. Devices that need to receive a lot of data, like video, can use the digital equivalent of a carpool lane, while the rest of your data take the regular highway.

That seems like a good idea, but the technology made little impact in my tests, because many devices don’t yet support the new frequency, 5 GHz. The iPad does, but the iPhone 4 does not, and nor did my older H-P laptop. Moreover, 5 GHz comes with a drawback: its signals usually can’t travel as far through walls as the older technology, transmitting at 2.4 GHz.

Rather than overall speed, the biggest Wi-Fi problem I encountered was getting the network to reach the nooks and crannies of the house. To test that, I compared the ability of each router to stream media to a device like my iPhone in trouble spots, such as my dining room or Mark’s patio.

The results were often stark. To Mark’s upstairs bedroom, the Netgear and Cisco routers could stream a video with ease, but the Apple would sometimes slow to a crawl. When I sent a file over the network to that same spot, the Apple router was sometimes one-tenth the speed of the Netgear and Cisco.

In my urban apartment, only the Netgear router was able without interruption to stream music from an iMac to speakers about 50 feet and five walls away. The music would conk out occasionally with the Cisco router, and quite often with the Belkin and Apple.

And even the Netgear would stumble when I tried the latest feature for the iPhone called AirTunes, which lets you stream media from an iPhone or iPad to the Apple AirPort Express or Apple TV. That technology requires the data to take a longer round trip to its final destination, stressing the network further.

With the Netgear router, I experimented with a setting called “performance mode.” Using it significantly improved the reliability of the network in some parts of my apartment, and put Netgear into a higher class.

But that option, which is sometimes called “channel bonding” or “20/40″ mode, is controversial because it essentially pushes signals from your neighbors’ Wi-Fi networks out of the way.

The Wi-Fi Alliance, which certifies Wi-Fi equipment, said it now requires routers to switch to a neighbor-friendly mode if other networks are around—but this Netgear router was certified prior to that rule. The other router makers say they either don’t offer the option, or automatically downscale when there are neighboring networks.

Wi-Fi technology shouldn’t make me have to choose between my neighbors and my network. A Netgear spokesman told me that in my situation, neighbors aren’t likely to feel an impact, because my impenetrable walls keep the signal from traveling very far anyway.

Being a good neighbor aside, I’d recommend either the Netgear or Cisco routers for users looking to cover a tough space—and hope that the networking industry can come up with even better technology soon. In the meantime, moving a router away from objects that can degrade the signal, like mirrors and refrigerators can help. And the desperate can fall back on a wireless repeater.

---

Apple Airport Extreme, $179
The most pleasing to look at and simple to install, but suffered from slow transfer speeds and frequently struggled to stream music to difficult locations.

Belkin Play N600HD, $109.99
Acceptable and sometimes impressive file transfer speeds, but often dropped the connection while streaming music.

Netgear WNDR3700, $169.99
The least pretty, but most reliable, especially when using the potentially neighbor-unfriendly ‘performance mode.’

Cisco Linksys E3000, $179.99
Fast in most tests, but sometimes cut out when streaming music. A good option for the less technically inclined

---

Walter S. Mossberg returns next week.

Write to Geoffrey A. Fowler at geoffrey.fowler@wsj.com

]]> http://allthingsd.com/20101222/no-signal-homes-often-baffle-wi-fi-from-routers/feed/ 0 http://allthingsd.com/20101222/apple-where-are-the-tv-apps-asks-kaufman/ http://allthingsd.com/20101222/apple-where-are-the-tv-apps-asks-kaufman/#comments Wed, 22 Dec 2010 17:46:52 +0000 Tiernan Ray http://voices.allthingsd.com/?p=34282 Kaufman Brothers analyst Shaw Wu this morning responds to Apple’s announcement yesterday it was closing in on one million units sold of the Apple TV, writing that the company should add support for its iOS apps on the device.

The one million units is in line with his forecast, and a bit ho-hum given it equals just $400 million annually in revenue on an $88 billion top line. The units might be “significantly higher” if Apple TV had access to the 300,000 apps in the Apple App Store, writes Wu.

“One questions many investors have asked us is how does Apple add multi-touch capability to a TV?” writes Wu. “Our answer is the ability to connect the Magic Trackpad, similar to adding multi-touch to its desktop macs including iMac, Mac Mini, and Mac Pro.”

Read the rest of this post on the original site

]]> http://allthingsd.com/20101222/apple-where-are-the-tv-apps-asks-kaufman/feed/ 0 http://allthingsd.com/20101214/year-of-the-mac-how-about-years-of-the-mac/ http://allthingsd.com/20101214/year-of-the-mac-how-about-years-of-the-mac/#comments Tue, 14 Dec 2010 11:32:18 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=54311 Back in January, Piper Jaffray analyst Gene Munster proclaimed 2010 the “Year of the Mac.” Now, with the year nearly over, it’s looking like he was right.

The latest domestic sales data from NPD shows Apple on pace to sell between 4.1 million and 4.3 million Macs in the December quarter. Which would make for another record breaker in an ever-lengthening string of them. After all, Apple’s U.S. Mac sales are up 20 percent year-over-year for the first two months of the current quarter. And with international sales growing faster than domestic, the company will likely see between 22 percent and 28 percent year-over-year growth.

If that trend continues–and with the recent refresh of the iMac and MacBook Air lines, there’s no reason to think it won’t–2011 could end up being the “Year of the Mac” as well.

]]> http://allthingsd.com/20101214/year-of-the-mac-how-about-years-of-the-mac/feed/ 0 http://allthingsd.com/20101203/back-in-the-day-with-woz-a-sneak-peek-inside-the-new-and-improved-computer-history-museum/ http://allthingsd.com/20101203/back-in-the-day-with-woz-a-sneak-peek-inside-the-new-and-improved-computer-history-museum/#comments Fri, 03 Dec 2010 17:51:56 +0000 Drake Martinet http://voices.allthingsd.com/?p=33419

What could be better than listening to legendary Apple co-founder Steve “Woz” Wozniak wax poetic about his first and favorite gadget–which turns out to be a transistor radio?

Well, doing it inside the newly renovated Computer History Museum in Mountain View, Calif., certainly raises the geek factor to 10.

The museum has spent the last five years planning and installing “Revolution: The First 2,000 Years of Computing” and will open the doors to the public on January 10, 2011. That’s “011011,” Woz reminded the small crowd of journalists invited for an early tour of the new Silicon Valley facility.

The museum has more than doubled its public space to accommodate the new exhibit, which includes an impressive collection of the rare, revolutionary and ridiculous–mostly relating to computing from the 1950s onward.

The whole shebang was largely funded by Microsoft co-founder Bill Gates, whose name features prominently in the signage.

Woz led a tour that highlighted some of the machines that meant most to him. He recounted hours spent at the IBM Model 026 punch card machine, and fawned over a Honeywell Kitchen Computer.

That device was originally sold by Neiman Marcus, complete with mod ’60s styling and bearing the “Mad Men”-esque slogan: “If only she could cook as well as the Honeywell computes.”

Woz said it was the machine that inspired him to believe computers could be attractive things for the home.

After a long meander through many, many more Woz-ly musings, the tour ended at the Homebrew Computer Club exhibit, complete with an Apple 1–signed by Woz–basically identical to the one that recently sold at Christie’s of London for $210,000. (Woz flew there and signed that one too.)

Once open, the expanded museum promises to be the perfect spot to take that über-geeky date, or just wander and reflect amidst hundreds of miles of wire and mountains of transistors.

No word on whether Woz will also be on permanent display.

He seemed to enjoy it, but you can judge for yourself by checking out our highlight video reel from the tour, complete with an interview about Woz’s first and favorite gadget, the coming robopocalypse and the iPhone as a future historical artifact.

Enjoy:

]]> http://allthingsd.com/20101203/back-in-the-day-with-woz-a-sneak-peek-inside-the-new-and-improved-computer-history-museum/feed/ 0 http://allthingsd.com/20101103/a-fall-guide-how-to-pick-your-next-computer/ http://allthingsd.com/20101103/a-fall-guide-how-to-pick-your-next-computer/#comments Thu, 04 Nov 2010 02:05:08 +0000 Walter S. Mossberg http://ptech.allthingsd.com/?p=1603 If you’re shopping for a new computer this fall, you won’t find big surprises. But you’ll still have to juggle a lot of technobabble terminology and watch your budget. Perhaps the biggest question for some buyers will be whether to get a tablet or a laptop, now that Apple’s iPad is a proven hit and a flood of competitors is on the way.

So, here is my annual fall computer buyers’ guide, a simplified road map to the key decisions shoppers must make. I’ve focused on laptops—the most common purchase—but much of this advice also applies to desktops. As always, these tips are for average users doing the most common tasks. This advice doesn’t apply to businesses, to hard-core gamers, or to serious media producers.

Tablets vs. Laptops: If you’re looking for a light-duty, highly portable computer, it’s worth considering the iPad, which starts at $499, instead of a small laptop. This is especially true if you’re in the market for a secondary computer, or one mainly for use on the go. Many owners of iPads, including me, are finding it handily replaces a laptop for numerous tasks, such as Web browsing, email, social-networking, photos, video and music. It has superior battery life, lighter weight, and it starts instantly. I don’t recommend it for people who are creating long documents, especially spreadsheets and presentations, even though it is capable of those tasks. And I don’t recommend it for users who require, or prefer, a physical keyboard.

If you don’t like the iPad, there will soon be alternatives. For instance, Samsung’s Galaxy Tab, which has a 7-inch screen versus the iPad’s 10-inch display, and runs Google’s Android operating system, will be available this month from major wireless carriers. Sprint, for example, will offer it at $400 with a two-year contract. But some tablet buyers may want to wait till the first half of next year, when many more models will be available, and Apple will likely roll out the second-generation iPad.

Netbooks: These low-cost, low-powered little Windows computers are losing popularity, but are still available, typically for about $350 to $500. They are being hurt by the rise of tablets and by light but larger laptops. Some buyers also find the screens and keyboards are too cramped. But these are evolving. Some now have bigger screens and roomier keyboards. And Dell will soon introduce a sort of hybrid netbook-tablet. Called the Inspiron Duo, this model, starting at $499, has both a regular keyboard and a touch screen that flips around when the lid is closed to act like a tablet.

Windows vs. Mac: Windows laptops can be much less costly—and come in many more styles and varieties—than Mac laptops. The Macs start at $999, versus as little as $500 for a decently equipped Windows portable. Windows laptops are still dominant. But Apple laptops are stylish and reliable, and usually boot much faster than Windows machines, in my tests. Also, Apple scores high on surveys of customer support. Its latest models, like the new, light MacBook Airs, have extraordinarily good battery life. Macs also aren’t affected by the vast majority of malicious software, have much better built-in multimedia software and, at extra cost, can run Windows programs in cases where Mac equivalents aren’t available.

The light but speedy 13-inch Toshiba R705 offers good battery life.

Cost: Most of the popular consumer Windows laptops cost $500 to $800. You can get full-size laptops for as little as $280, but their processors and graphics are weak and some lack webcams. If you can afford it, a light but speedy 13-inch machine like the Toshiba R705 offers very good battery life for just under $800. All-in-one desktops typically cost around $1,000 and some, like the HP TouchSmart, offer touch screens with special touch software. Apple’s popular all-in-one iMac starts at $1,199.

Processors: The most promoted chips are Intel’s i3, i5, and i7 Core models, the latter two of which can turn on and off some of their functions to boost power or save energy. But there is nothing wrong with buying a PC that uses chips from rival AMD, which usually cost less. For average users, Intel’s older Core 2 Duo still works just fine, even with the latest software. Intel’s weaker Atom processor line powers most netbooks.

Graphics: Integrated graphics, which share the computer’s main memory, are fine for most common tasks, but costlier discrete graphics, which have dedicated memory, can speed things up by taking some of the load off the main processor. They also are better for games. Some computers have both and can switch among them.

Wireless: More and more laptops are coming with optional cellular modem chips in addition to Wi-Fi. These can be handy while traveling, but be warned that they require a cellular data contract, which can be costly.

Connections: If you plan to connect your laptop to a TV, look for a connector called an HDMI port, which is used on most high-definition TVs. Some laptops also come with a feature called Wireless Display, or Wi-Di, which, with an extra-cost adapter, can beam your laptop screen to a TV without a cable. There is a new, much faster USB port, called USB 3.0, but, so far, it’s on very few machines.

Memory: Aim for 4 gigabytes of memory, or RAM, on a new computer, and never settle for less than 2 gigabytes.

Hard disks: A 320 gigabyte hard disk should be the minimum on most PCs, though 250 gigabytes is OK if price is key, or if it’s your secondary machine. Solid-state disks, which lack moving parts and use flash memory like smartphones do, are faster and use less battery power. They cost much more, but are coming down in price fast. However, they typically offer much less capacity.

64-bit: Many models now use a 64-bit architecture, which allows properly written software to use more memory and run faster. If possible, buy 64-bit, which will become more and more important.

Touch: Some Windows 7 computers have touch capability built into the screen, though Windows wasn’t designed with touch as a core element and the combination isn’t ideal. Computer makers try to resolve this with special touch software, which you should try in a store. Apple laptops use huge touch pads as the multitouch surface, instead of the screen.

As always, don’t buy more machine than you need.

Find Walt Mossberg’s columns and videos online at the All Things Digital website, walt.allthingsd.com. Email him at mossberg@wsj.com.

]]> http://allthingsd.com/20101103/a-fall-guide-how-to-pick-your-next-computer/feed/ 0 http://allthingsd.com/20101018/live-apple-earnings-call-2/ http://allthingsd.com/20101018/live-apple-earnings-call-2/#comments Mon, 18 Oct 2010 22:58:07 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=24788 Steve Jobs made a rare appearance during today’s Apple’s earnings call and spent most of his time beating up his rivals, past and present. Summary: The iPhone has left Research in Motion’s BlackBerry in the dust. And while Google’s Android phones and tablets-to-be looked impressive, they weren’t.

Great fun to listen to for Apple watchers. But not that meaningful, really–mostly positioning and spin. There was at least one important nugget, though: Apple has a specific shopping list, with some very big-ticket items on it.

Jobs wouldn’t lay those out, of course. But when asked if he planned on spending any of Apple’s $51 billion (!) in cash via a dividend or stock buyback, he explained that he had something else in mind. From my notes, a combination of direct quotes and paraphrase:

“We strongly believe that one or more very strategic opportunities may come along that we’re in unique opportunity to take advantage of because of our cash,” and we want to keep our powder dry “because we feel that there are one or more” opportunities in the future.

M&A guys, start your engines!

The “what will Apple do with all its cash” speculation story is a time-honored tradition–I seem to remember writing one four or five years ago, when Apple had $6 billion or so lying around, and discussing whether it made sense for Jobs to buy a music company like Universal.

But I don’t remember Jobs every signaling his desire to go shopping quite as openly as this before (feel free to correct me in comments if I have this one wrong). Two caveats:

• Jobs is famous for saying one thing and doing…something else. So don’t get too riled up about this.
• Just because Jobs is talking about spending money on “opportunities” doesn’t mean he’s talking about buying a company. He could be talking about big, hairy capital expenditures, like the billion-dollar server farm Apple is finishing up in North Carolina.

Still. It’s hard not to read or hear that quote and not think that he’s thinking about some very big buys. Like what?

A lot of folks will assume that Jobs is talking about buying a big content producer. Music doesn’t make any sense, because there’s little value left in that business. But if Jobs wants to make headway in the TV business, perhaps it makes sense for him to snag a big broadcaster or programmer to give him the leverage he needs with the Comcasts, Viacoms and Time Warners of the world.

Or you could make the same argument for other content makers, like game studios. The biggest one, Electronic Arts, has a market cap of a mere $5.21 billion. Jobs could give ERTS shareholders a hefty premium and still have plenty of walking-around money.

Or perhaps it makes zero sense for Apple to be in the content business, because it’s done just fine not being in the content business to date.

So then what?

Feel free to throw your own guesses in, but I’ll kick off with my own: It’s a company that has yet to compete with or brush up against Apple in any significant way. And it’s one that Apple seems unlikely to be able to move aside, even if it wanted to. And it’s one that’s already competing directly with Google, which has to make Jobs like it even more.

And, if you believe this L.A. Times report, Jobs is already strolling around Palo Alto with its CEO: What do you think of Apple buying Facebook? Discuss….

Earlier

Apple investors who got their first look at the company’s earnings numbers don’t like them–AAPL is trading down seven percent after hours. Let’s see if Apple executives can soothe their concerns during the earnings call.

You can listen in for yourself via this link, or follow along in my liveblog below:

Live Blog

Apple or Apple’s IR company trying some very, very mellow string and piano stuff while we wait.

CFO Peter Oppenheimer kicks off. “Outstanding results” for September quarter. Highest quarterly revenue, earnings.

Mac products and services: 3.9 mm Macs. Record quarter. 27% y/y growth. Double market growth for Q.

IMac, Macbook, Macbook Pro all good. Asia/Pacific performing best.

IPods: 9.1 million.

ITunes revenue more than $1 billion.

IPhone. “Extremely pleased” with 14.4 million unit sales; basically doubled y/y.

$8.6 billion in sales value of iPhones alone.

Heaping praise on iPhone 4 (justified) and stressing iPhone’s move into corporate market, rattling off blue-chip customers.

IPad. “Thrilled” with momentum. “Great enthusiasm” from customers.

65% of Fortune 100 deploying or piloting iPad. Lists some of them.

125 million iOS device sales last month.

200,000 registered iOS developers.

“Very happy” with results of iAd so far.

On to Apple stores. More records here.

Expects to open 40-50 stores next year, 50% of them outside U.S.

IPhone sales mix “better than expected”–boosted overall margin.

$51 billion cash hoard. [Deep, longing sigh from everyone in media, tech business.]

For the year: 5x revenue and 10x earnings compared with five years ago.

“Very enthusiastic” about lineup, “extremely confident” in new product pipeline.

Rare appearance from Steve Jobs!

Had to drop by for first $20 billion quarter.

“We’ve now passed RIM, and I don’t see them catching up to us in the foreseeable future.”

They have to move into software/platform development, and I don’t think they can.

So what about Google?

Apple is activating 275,000 iOS devices per day on average over the past 30 days; peaked at 300k iOS devices some days. 300,000 apps in app store.

Unfortunately, there is no solid data on how many Android handsets sold each quarter.

Google loves to characterize Android as open, Apple as closed. “We find this a bit disingenuous.”

Windows is “open.” But Android is “very fragmented.” OEMs like Motorola install own stuff to make their phones stand out. We don’t do that.

Shout out to “Twitterdeck” ( I think he means Tweetdeck) and their challenges running 100 versions of Android client. “Compare this to iPhone, where there are two versions of the software…to test against.”

Meanwhile, at least four app stores on Android. “This is going to be a mess for both users and developers.”

Apple’s app store has 3x apps compared with Google marketplace.

“Even if Google were right, and the real issue was closed vs. open, it’s important to remember that open systems don’t always win.”

For instance: Microsoft’s [miserable] “PlaysForSure” strategy, RIP.

Google’s “open” argument is a “smokescreen.” Real issue is what’s best for customer–”fragmented vs. integrated.”

Integrated is a huge advantage for us, because it’s better for customers, and better for developers. “We are very committed to the integrated approach no matter how many times Google tries to characterize it as closed.”

Now! On to our tablet competitors:

First of all, only a few credible competitors.

Second, most of them are pushing 7.5″ screen. That means they are just at 45% size of our 10″ screen. “You heard that right….This size isn’t sufficient to create great tablet apps.”

Extolling features of iPad size vs. teeny tiny tablet competitors: They’re “tweeners”–too small to compete with iPad, too big to compete with smartphones.

IPad has 35,000 apps. New crop of tablets will have “near zero.”

Competitors having a hard time coming close to iPad pricing, even with their puny screens. We make our own everything, and this results in an “incredible product, at a great price.” Our competitors will “likely offer less, for more.” They’ll be “DOA. Dead on arrival.”

Questions and Answers

Supply constraints on iPad?

COO Tim Cook: We’ve got a handle on it. And note that we’re expanding distribution in the U.S. and internationally, with more countries to come.

Question about margins I didn’t quite catch.

Oppenheimer: Sold more iPhones than planned, and commodity prices came down, so that helped.

Q for Steve. Please talk about “iPad opportunity.” Size of business, etc., two years or more down the road?

Jobs: “The iPad is clearly going to affect notebook computers. The iPad proves it’s not a question of if, it’s a question of when.” Already seeing “tremendous” interest from education and “much to my surprise, from business.”

“The more time that passes, the more I am convinced that we’ve got a tiger by the tail here.” We’ve trained tens of millions of people on this OS via the iPhone. “I see it as really general purpose, and I see it as very big.”

Could it be the second biggest business after the iPhone?

“I try not to predict, I try to report.” We’re selling more iPads than Macs.

What about Flash? Any update?

“Flash memory? We love flash memory” [hohoho]

A question on iPhone demand, which I missed.

Q: Steve, “You are the tablet market.” Do you see tablet competitors cutting into your market in the same way you cut into RIM’s market? Won’t that fragment the market?

“I have a hard time imagining what those strategies…are.” Pricing won’t work. “Flash hasn’t presented any problem at all; as you know, most video on the Web is now presented in HTML5.” The iTunes store is dominant and “we’re not done” working on stuff for the future.

Q: Smartphones–”Do you see that as a zero-sum game?”

Jobs: As you know, most phones in the world aren’t smartphones. They’ll convert over time, so there will be room for multiple competitors, but “eventually it will turn into a zero-sum game, or close to that.”

Q: For Oppenheimer: Another margins question.

A: We do see a small sequential decline. Higher-than-expected mix of new iPods and new iPads. We’ve been very aggressive on pricing there, and that’s what’s pushing down margins.

Q: Steve, how’s your Apple TV “hobby” coming? And what’s up with streaming media?

Jobs: We don’t talk about unannounced products, but I’m happy to tell you what we know about Apple TV. We have moved to streaming. It’s all streaming. Everything is rented, and/or soon to be streamed from iPad or iPhone.

So far we’ve sold 250,000 new Apple TVs. “I’m thrilled with that.” And with Airplay set up, “it will give people another big reason to buy it.”

Another margin/guidance question. Seems to be the same one repeated each time, with the same answer.

Q for Steve: Key risks for company?

The goal is to make the best devices in the world. “It’s not to be the biggest. As you know, Nokia’s the biggest… but we don’t aspire to be like them.”

Android is the biggest competitor. Outshipped us in June quarter as we transitioned. We’re waiting to find out what happened in this quarter. “I don’t know how we’ll find out” though.

Our approach is to create products that “just work” and “their approach is very different from that.”

Questions for Steve and Tim: Aspirations for iPhone and iPad. In Mac, you didn’t aspire to high market share; in iPod, it was the opposite–you own that market. In the past, Tim you’ve described iPhone business as closer to the iPod model. Steve, you sort of said something different. Please resolve that difference: Biggest, or best?

Jobs: “Nokia makes $50 handsets. We don’t know how to make a great handset for $50.” We want to make “breakthrough, best products,” and “drive costs down” while making them better through “relentless improvement.”

We have a very low share in the phone market. Single digits. And a very high share in tablets. But we don’t think about it that way.

The reason we won’t make a seven-inch tablet isn’t because of price point, “it’s because we don’t think you can make a great tablet with a seven-inch screen.” And as a software company, we think of software first. Developers don’t want to build for all these different platforms and devices, and on this small screen. “It’s not about cost, it’s about value, when you factor in the software.”

Q: Okay, but if the market moves toward lower-functionality smartphones and “dramatically lower price points,” then you’ll cede share, right?

Jobs: “You’re looking at it wrong.” You’re looking at it as a hardware guy who doesn’t really know about software. You assume that software “can come alive on this product that you’re dreaming of. But it won’t” because developers want to build for better products, with faster processors and better screens.

Q: You have about $50 billion in cash. What are you going to do with that? Why not return it to shareholders?

Jobs: “We strongly believe that one or more very strategic opportunities may come along that we’re in unique opportunity to take advantage of because of our cash” and want to keep our powder dry “because we feel that there are one or more” opportunities in the future.

Missing next question about iPhone and iPad penetration into corporate market.

[Market not sold on Apple's story yet, btw: Stock still down 5.84%.]

Question for Oppenheimer. Guess what? It’s about gross margins. Any change in manufacturing, etc? Any color at all?

Oppenheimer: Don’t provide product-specific gross margins. Always trying to lower costs, though. “We were happy” with gross margins for quarter. Down slightly because of product mix, as I’ve said over and over.

Q: Talk about demand from carriers to pick up iPhone 4.

Cook: The pressure I’m feeling is about supply. That’s the problem. At the country level, we have 166 relationships in 89 countries. In many countries, we went to more than one carrier. Latest one of those is Germany.

IPhone 4 in 85 of 89 countries. Will be in all 89 by end of year.

What happens to margins and subsidy when you go nonexclusive?

We don’t give information out on specific markets, but you can see that our ASPs have stayed above $600.

For Steve: Why do you have advantage in price on iPad, as opposed to PC?

Jobs: We engineer so much of it ourselves. Everything from chip to battery to enclosures. We’ve learned so much. We’ve learned a lot, developed a lot of our own components, where competitors have to go through middlemen. “This is a product we’ve been training for for the last decade.”

Call is over. You can hear the whole thing on a podcast later this evening.

]]> http://allthingsd.com/20101018/live-apple-earnings-call-2/feed/ 56 http://allthingsd.com/20100803/apple-magic-trackpad-review/ http://allthingsd.com/20100803/apple-magic-trackpad-review/#comments Wed, 04 Aug 2010 00:03:36 +0000 Katherine Boehret http://solution.allthingsd.com/?p=1305 Last fall, I watched in awe as my friend’s 1-year-old picked up an iPhone, swiped the screen with her pudgy pointer finger and scrolled through a list of emails. I had a similar reaction last month when my computer-challenged aunt discovered the joy of two-finger scrolling on a MacBook Pro’s large, multi-touch trackpad. “Now this,” she said without a trace of the frustrated tone she usual reserves for discussing technology, “is very cool.”

Just what is it that makes gesture technology so very cool? For one thing, it’s more satisfying and intimate to use your own fingers to control something on a screen rather than punching buttons or maneuvering a mouse to do so. And touch gestures are easy to remember because, more often than not, they work using intuitive movements you already know, like flicking a finger across a screen to page through an electronic book.

It’s hard to find a consumer-technology company that doesn’t use touch gestures in at least one of its products. Some Microsoft (MSFT) Windows PCs have touch screens, and certain Windows laptops have emulated at least some of the Mac’s multi-touch trackpad features. But Apple Inc. (AAPL), in particular, has made a concerted effort to spread multi-touch gestures across all of its product categories from the iPod touch to the iPhone to the iPad to MacBook laptops with oversized touchpads that accept various gestures for controlling things on the screen.

The Magic Trackpad, which has a glass-top surface, is propped up on one end by a thin tube that holds two AA batteries.

Now, the Mac desktop can have a touch of fun, too. Apple’s latest gadget, the $69 Magic Trackpad (apple.com/magictrackpad), is essentially a freestanding touchpad that brings multi-touch features to desktop Macs, which lack touch screens. Its entire surface also functions as a button for selecting and it measures about the size of a mousepad. The Trackpad connects wirelessly via Bluetooth to any Apple desktop PC running Snow Leopard, the latest iteration of the company’s operating system. It works in addition to, or instead of a mouse.

I’ve been using the Magic Trackpad on two different iMacs, one that’s about five years old and another that’s less than a year old. In both cases, I found its glass surface to be cool and smooth, and it worked well as a solution for small work surfaces where a mouse can’t move around much. I was also glad to finally bring the same touch gestures that I use on my MacBook Pro laptop to these desktops. For instance, I placed four fingers down on the Trackpad and pushed up to hide all opened programs and reveal my computer desktop. Then, by swiping four fingers down, I showed all opened windows, a feature Apple calls Exposé. When photos are opened, moving two fingers apart or together will zoom in or out on an image. Turning two fingers clockwise or counterclockwise on the Trackpad rotates the image.

But $69 is a lot to spend for the added pleasure of touch gestures, especially considering that the mouse already does some of these things—though not as cleverly—and keyboard shortcuts do others.

Installing the Magic Trackpad is a pain, as far as Apple standards go. First, users must be sure they’ve upgraded to the latest version of the Snow Leopard operating system—the most recent version is 10.6.4. Second, people must also go to http://support.apple.com/downloads to download a driver update for the Trackpad, a step that can be easily overlooked by users who are anxious to get going with their new gadget.

The Magic Trackpad weighs about 5 ounces and measures a bit more than 5 inches by 5 inches. It’s slightly tilted, propped up on one end by a thin tube that holds two included AA batteries. If you happen to also own the $69 Apple Wireless Keyboard, the Trackpad design is in line with that of the Magic Trackpad so when the two devices sit beside each other, it’s easy to move from the keyboard to the Trackpad and back.

A button on one end of the Trackpad’s battery tube turns the device on, and a blinking light indicates it’s ready to pair via Bluetooth with your Mac desktop, assuming you’ve downloaded the two necessary software updates.

Apple’s $69 Magic Trackpad brings multi-touch gestures to the Mac desktop and connects wirelessly via Bluetooth.

If you don’t pair the device within three minutes, the Magic Trackpad turns off to conserve battery. An Apple representative estimates that the Magic Trackpad’s batteries will last about four and a half months with alkaline batteries.

My Magic Trackpad easily paired with my iMacs over a Bluetooth connection. After installing, a screen displayed settings and animated tutorials on how to use the touchpad. Settings included options like telling the Trackpad to enable right-clicking with a two-finger tap on the touchpad or just by touching its bottom right corner. All other gestures, which will be familiar to MacBook owners but not everyone else, are demonstrated in helpful animated videos.

If you can afford it, or if touch gestures simply make you a more productive computer user, the Magic Trackpad is a real asset. It can co-exist with a mouse or totally replace it, if you want. After just minutes of use, I stopped using my mouse altogether.

Edited by Walter S. Mossberg

Email Katherine Boehret at mossbergsolution@wsj.com.

]]> http://allthingsd.com/20100803/apple-magic-trackpad-review/feed/ 0 http://allthingsd.com/20100727/apple-updates-imac-and-mac-pro-debuts-multi-touch-trackpad-27-inch-led-cinema-display/ http://allthingsd.com/20100727/apple-updates-imac-and-mac-pro-debuts-multi-touch-trackpad-27-inch-led-cinema-display/#comments Tue, 27 Jul 2010 13:15:29 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=45557 That telltale “We’ll be back soon” sign appeared on Apple’s online store early Tuesday morning, and when it disappeared a few hours later the company had refreshed a number of its product lines and debuted some entirely new gear as well. Announced this morning: new Mac Pro desktops, new iMacs, a 27-inch LED Cinema Display, an eco-friendly battery charger and a multitouch Magic Trackpad.

Apple’s (AAPL) iMac and Mac Pro lines now offer faster Core i3, Core i5 and Core i7 processor options, with the last available in a $4,999 configuration with a full dozen Intel Xeon cores. IMacs cost between $1,199 and $1,999.

The long-awaited 27-inch LED Cinema Display boasts 2560 x 1440 resolution and a 16:9 aspect ratio. Optimized for Apple’s latest hardware, it features a built-in iSight video camera, microphone and speakers, 3-port USB 2.0 hub, and a universal MagSafe connector for charging up a MacBook. Price: $999. It ships in September.

Finally, there are the peripherals: An Apple Battery Charger that senses when its batteries are fully charged and adjusts its power usage accordingly ($29.00 with six rechargeable AA NiMH batteries), and a $69 Magic Trackpad that adds to the desktop the same gesture commands supported by the iPhone and iPad.

]]> http://allthingsd.com/20100727/apple-updates-imac-and-mac-pro-debuts-multi-touch-trackpad-27-inch-led-cinema-display/feed/ 0 http://allthingsd.com/20100420/time-to-stop-betting-the-under-on-apple-earnings/ http://allthingsd.com/20100420/time-to-stop-betting-the-under-on-apple-earnings/#comments Tue, 20 Apr 2010 16:00:04 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=38729 Apple is scheduled to report earnings after the closing bell today, and by most accounts they’re likely to be strong, though the company’s January-to-March quarter is historically not its best.

The Street is expecting earnings of $2.44 a share on $12 billion in revenue, and most analyst reports I’ve seen so far suggest Apple will easily meet those expectations and perhaps surpass them.

As I’ve noted here before, NPD sales data for the first few months of 2010 points to strong Mac sales, up 39 percent year-over-year through the first two months of the March quarter. Apple iPhone sales are likely to be impressive as well given increased international distribution and broader carrier support.

“We believe Apple will report ~7.25M+ iPhones in the quarter due to strong iPhone 3G S adoption and better penetration into international markets,” Deutsche Bank analyst Chris Whitmore wrote in a research note.

“In addition, we expect solid Mac results (healthy units) and positive product mix towards iMac and MacBook Pros (DB at 2.9M units) due to the continued benefit of the refreshed iMac line up,” the analyst notes. “We expect iPod units of ~10M and the continued mix improvement to support iPod revenue (i.e. strong iTouch).”

Healthy numbers if Apple (AAPL) delivers them, and a nice segue to the company’s June quarter, the first to reflect the market debut of the iPad and last week’s update to the MacBook Pro lineup.

]]> http://allthingsd.com/20100420/time-to-stop-betting-the-under-on-apple-earnings/feed/ 0 http://allthingsd.com/20100407/streaming-video-to-a-tv/ http://allthingsd.com/20100407/streaming-video-to-a-tv/#comments Thu, 08 Apr 2010 01:01:45 +0000 Walter S. Mossberg http://mailbox.allthingsd.com/?p=619 Q:

Is there a device that would enable me to watch streaming movies from Netflix directly on my TV, without using a computer?

A:

Yes, there are many. A small portion of Netflix’s huge catalog is available for streaming, as opposed to viewing on DVD, and the company has struck deals with various makers of set-top boxes and other TV-connected hardware that allow these movies to be played directly on a TV. Among these are the Roku digital video player, TiVo digital video recorders, and the Xbox 360 and PlayStation 3 game consoles. The simplest and least expensive is the Roku, which starts at around $80. A complete list is at netflix.com/NetflixReadyDevices.

Q:

I’m going to graduate school, and need a PC mostly for word processing. I am not interested in gaming, movies, etc. I am looking at the Asus UL20A. Is that a good idea?

A:

I haven’t reviewed this model, but, if you’re comfortable with its keyboard and screen, you should be fine using it mainly for word processing (though it’s capable of many other tasks). However, there are many competitors in this size and price range, and, unless you have already done so, I’d suggest shopping around to make sure the Asus is the best choice for you.

Q:

Which version of Windows (XP, Vista or 7) runs best using Apple’s Boot Camp?

A:

I have run all three just fine on an iMac using Boot Camp, Apple’s built-in feature for booting Mac hardware into Windows when you like instead of into Apple’s (AAPL) own operating system. However, I would suggest Windows 7. It’s much better than Vista and much more modern than XP.

You can find Mossberg’s Mailbox and my other columns, free of charge, at walt.allthingsd.com.

Write to Walter S. Mossberg at walt.mossberg@wsj.com

]]> http://allthingsd.com/20100407/streaming-video-to-a-tv/feed/ 3 http://allthingsd.com/20100405/ipad-wifi-woes/ http://allthingsd.com/20100405/ipad-wifi-woes/#comments Mon, 05 Apr 2010 16:56:13 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=38179 Though a marvel of design and engineering, Apple’s iPad, like most first-generation devices, is not without flaws. Just two days at market and already some new iPad owners are flocking to Apple’s support forums, complaining about temperamental Wi-Fi connectivity.

“I have…noticed very weak wifi signal in my 16GB iPad,” one post to Apple’s iPad support discussions reads. “Even when standing in front of the wlan router the signal fluctuates from strong to very weak. The router has very strong signals as every other computer here has full signal strength, even 20-30 meters from the router. So there is definitely a wifi signal issue here with the iPad.”

“I’m having the same problem,” reads another. “iMac, Macbook, Macbook Pro and iPhone all work great 3 rooms from my house (all connecting through an airport). My iPad is only getting 1/3 on Wifi and frequently dropped the connection.”

This is obviously a supremely annoying problem since Wi-Fi is the iPad’s only means of connecting to the Internet.

It is not yet clear how widespread this issue is. As I write, there are several iPad Wi-Fi-related discussions on Apple’s support forums, the largest of which hosts about six pages of comments.

That said, I have not had any problem with my iPad–moments ago, I streamed a Netflix (NFLX) movie to it from the sidewalk in front of my house–and my informal poll of friends and colleagues who own the device turned up no reports of weak or temperamental Wi-Fi connections. Which is not to say they don’t exist or that they’re the result of user error, just that they appear to be fairly limited in scope at this point.

In any event, Apple (AAPL) has posted two support documents (1, 2) for iPad owners to troubleshoot ornery Wi-Fi connections.

UPDATE: A commenter below points out a list of potential fixes.

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