Some feverish pundits even assert that it’s in production. Ticonderoga Securities analyst Brian White thinks Apple TVs are “already flowing through factories over in China in early stage pilot and prototype production”. Piper Jaffray’s attention-seeker Gene Munster cites patents as the reason for his belief that Apple TV is going to become a patent. But we’ve been here before. El Reg’s Rik Myslewski recalled earlier that the iPad was being referred to as “delayed” in 2003 and “long-awaited” in 2004.

I don’t see anything wrong with wishing for a better user interface or consumer electronics experience. The child-like wishful thinking here is evident – but market realities can’t be ignored.

“When people say they want an Apple TV, they mean an Apple UI for their PayTV services,” tweets Enders analyst Benedict Evans. “Which are closed, proprietary and non-standard.” Ken Tindell, whose latest startup Vidiactive brings web video such as iPlayer and YouTube to TVs, agrees that it is an industry that’s closed to outsiders.

That’s not strictly true, and the Digital TV group, which codifies the standards into several hefty volumes, may wish to disagree. The argument that existing standards groupings and distributors can block an upstart was exactly the basis for predicting the iPhone would fail – the operators would continue to set the terms for handset manufacturers. But Apple generated the demand – the iPhone provided real utility – and dictated terms to operators.

Apple TV speculation continues regardless, because there are now so many paths for getting TV material into your home. Fortune magazine speculates that a combination of cloud and Siri voice recognition magic would allow Apple to bypass the existing TV industry. But TV is not a phone with a different purpose. There’s another way of looking at it and, dare I say, it needs a Jobsian perspective.

The iPhone was a success because it removed barriers to tasks that weren’t new but were really unnecessarily difficult on existing equipment. With Nokia’s smartphones you could find your location, find something in a location, you could Google… but it was tedious. And all the while, the user was fretting about the data usage. Steve Jobs’ real insight on technology is much more practical than the myth: he saw electronics as a tool, as a means to an end.

Can Apple TV do the same? It’s not going to be easy. Apple would need to get into the business of acquiring the rights to expensive, exclusive content. It would have to conquer the challenging economics of HD video delivery via IP packets – on someone else’s network. And Apple would have to control the experience end to end. That’s important, because without that pathway, no matter however you envisage it, Apple TV would simply be adding another layer to what is a well-established free-to-air, cable or satellite UI.

It would require a mode switch. TV is simply a frame around some content, at the end of the day, and an extra UI would make what people actually want a TV to do – watch the show, or game – more difficult to reach. I rarely hear people complain about the complexity of the Sky+ UI, and Jobs’ design legacy is all about reducing complexity, not adding to it.

Nor is this a battle Apple needs to fight by knocking down the front door with a SWAT team. Leave the Asian manufacturers to continue to produce their low-margin flat panels with ever diminishing margins. Just use the iPad and iTunes to nibble at away at the cherries, leaving free-to-air TV services looking increasingly bleak.

There might not be a “problem” here that really needs a Steve Jobs fix. Dead or Alive.

But we knew what was coming, didn’t we? In the media, a race to the top of Mount Hyperbole, that was easily won by Stephen Fry, with President Obama close behind. And public, showy and stagey displays of public emotion. (Why? Did no one tell you he was ill?).

I actually find all this disrespectful, and as distasteful as any sick joke.

Nobody could be more scathing about mindless technology worship than Steve Jobs. My favourite interview with him was by Gary Wolf, when Jobs was 39, and had realised the utopianism of his generation was shallow, empty and a giant diversion. The web would augment the world, not change it. Far more important, he stressed, was education.

“What’s wrong with education cannot be fixed with technology. No amount of technology will make a dent,” he said before explaining how to dismantle California’s public school system, and replace it with a system that looks very much like Free Schools.

And prophetically, he anticipated the “revolution” of user-generated content, blogs and tweets in this way:

“To be honest, most people who have something to say get published now.”

If Steve Jobs “changed your world”, then I have to ask – how big is your world, exactly? Perhaps it’s quite small.

As AN Wilson writes today, we need some perspective.

“Whereas we once looked information up in a book, we now search for the (often inaccurate) information online. Whereas we once sent telegrams, we now send emails,” writes Wilson. “Yes, Steve Jobs made shopping online easier and more attractive. But it is still only shopping.”

Many truly life-changing breakthroughs by scientists go uncelebrated, and in courageous defiance of institutions and conventional wisdom. But “boffins” don’t get lachrymose send-offs from strangers. Jobs was a significant figure, but no Nikola Tesla.

The late Norman Borlaug prevented a billion deaths by applying the scientific method to the traditional scattergun approach to crop selection and breeding, creating the “green revolution”. India used to have famines 40 years ago – now it exports grain. There are fewer conflicts in the world as a consequence. Women have more reproductive freedom. These are incredible achievements – and earned Borlaug the Nobel Peace Prize. But he received no such adulation, and even earned a few sneers in some obituaries.

What the Jobs hyperbole means is that your world is no bigger than your media. Or your computer. There can’t be a more tragic expression of the internet’s self-absorption.

I doubt if any computer or communications technology will have as far-reaching consequences as the work of Dr Craig Venter, another iconoclast, who in a decade will be producing oil and diesel that’s cheap, low-carbon, and renewable – much to the distress of the doom-mongers.

Capitalist iPigs

Two things occurred to me yesterday. Some of the most hyper-ventilating coverage came from parts of the media who spend the most time devoted to agonising about the evils of consumer capitalism, such as the BBC.

Isn’t it awful, they’re usually so keen to tell us, how capitalism encourages us to engage in an empty orgy of consumption? Aren’t these global brands terrible? No wonder there’s so much crime; big business just fuels materialism and envy. God, I hope it has at least a Retina display and 64GB of RAM.

rom which we have to deduce that consumption is evil, but only when it brings pleasure to the masses. Bourgeois consumer gadgets are really OK. They don’t count*.

Another strange thing is that the greatest Apple fans are the sneeriest about ordinary people observing religious rituals. Stephen Fry can wax eloquent about this at the drop of a voiceover paycheck. But what is Apple’s release cycle if not a ritual? What was Fry’s toe-curling visit to Cupertino, other than the act of a devotee seeking to have his faith affirmed?

We didn’t call it the Jesus Phone for nothing.

Some people who noisily self-identify as supremely rational seem to delight in using this to indicate their moral superiority to the pleb – or pilgrim – on the bus sitting next to them. Maybe it just covers some other insecurity. But if they then indulge in utterly irrational behaviour, that claim to superiority is no longer valid.

Let’s remember Jobs for what he achieved. He’d be the first to agree that there are more important things in the world than media devices, and he made that case very eloquently. ®

Bootnote

*Your reporter has owned, in succession, five G4 Cubes – I’m guilty as charged. It’s hypocrisy I can’t stand.

Read the full review here.

Dull people will always cheer a bold experiment that goes wrong. After July 2001, Apple’s design team never again attempted anything as daring or distinctive. It has produced beautiful designs, and unarguably influenced consumer technology design more than any one else.

But essentially, its computer designs are variations on the same theme. The professional laptops have continued in their rectangular, razor-like way. Even the iPad looks very much like how you’d expect a media slate to look like, for example.

But the Cube was different. The Cube looked like Buckminster Fuller talked; the Cube looked like it might have fallen to earth from an advanced civilisation, eager to escape orbit and looking to throw some ballast overboard. Or like a millionaire had given a mad bloke on a bus an unlimited budget.

“Hello. You look like you’ve done a lot of LSD. Well, here’s several million dollars – go and design a computer, any shape you want. Just make sure it hangs upside down.”

We don’t have enough of this sort of thing – Apple’s design is clever but it’s now conservative, and this conservatism seemed to set in a decade ago. (Although the plans for its new corporate HQ complex show signs of the same daring and ambition).

I’ll confess here that I loved the G4 Cube and still do. Until a couple of years ago, one was chugging away on my desk in the Reg office – it literally chugged – and another had a stint tethered to the home HiFi.

I’ve had five Cubes in all, although only two were healthy enough to do any work. I can’t part with the fifth. In a few years it will be hauled out of storage to power a child-friendly Firewire keyboard or Pangea Software’s Bugdom (“Ladybug” is already a hit with one of my toddlers).

Cubes evidently fascinate Steve Jobs, too. The first Mac was a near Cube, and his first NeXT machine was perfectly cubic. When Apple launched its flagship New York retail store, you can guess what shape it was.

What was it all about?

Unveiled at the height of dot.com exuberance, the Cube was the “fifth” product in a four product portfolio – the first of several paradoxes (we will explore a few more) and surely a sign something wasn’t quite right. It didn’t fit from the start. The new marvel was launched alongside three new matching monitors, two LED and one CRT, a new design of keyboard and mouse (not exclusive to the Cube) and Harmon Kardon produced a three-piece speaker to match.

The product wasn’t a cube – the actual computer was an eight-inch cube, suspended in a thick, but clear ten-inch housing. Like Skylon, the essential design conceit was to give the impression of the thing floating above the surface.

In a typical Jobs touch, there was no mechanical switch visible on any surface (although there was a tiny “programmer’s” reset switch underneath). The innards of the machine were one central core, which lifted right out very simply in one piece. And it was designed to operate without a fan: a convection system drew in air from a desk-level opening at the rear, and distributed it out through the grill at the top.

A silent supercomputer is what Apple emphasised. And it was priced accordingly. The Cube came in above the price of the cheapest professional PowerMac, using the latest G4 processor that had only just trickled onto the market the previous fall, at $1,799.

A faster model available only through the online Apple store (Apple had no retail stores back then) was priced at $2,299. Sans monitor. The cheapest PowerMac, announced the same day, cost $1,599.

The Riddle of the Cube

It emphasised minaturisation, but it was actually quite a formidable beast. It demanded to be placed in view – which meant being placed on a desk, and from there it dominated its space.

It was harder to hide the peripherals, too, which inevitably detracted from the clean lines emphasised in the video above. It also hid a hefty secret – a very large (but naturally well designed) power brick dangled on the floor underneath.

As for the vaunted silent operation, well, the intentions were right, and the execution was mostly brilliant. In the Cube’s original configurations, it didn’t need a fan, and it didn’t overheat. Users though, expecting the first version of Mac OS X to drop at any moment, clamoured for the model with the more powerful ATI Radeon 32GB VRAM graphics card – which did have a fan, and a fairly audible one.

There was a bigger problem.

The designers seem to have overlooked the spinning disk drive which transmitted vibration down directly through the plastic, into the desk – making it almost as obtrusive as a desktop machine. You felt the Cube up through your elbows.

The story is now well known of how cracks appeared in the casing, and the press gleefully ran with the story. Apple denied them, explaining they were “mould lines”. What was harder to live with was the power switch.

In theory, you simply placed your finger on the smooth plastic, over a static capacitor concealed within. In a forerunner of the iPhone screen, it was activated using the body’s static capacitance. It could be easily activated by accident – but worse, it responded to light and heat as well as human bodies.

Our publisher was unfortunate enough to decide to put it in a conservatory, where it turned itself on and off as it pleased. Years later it would do the same thing for me in San Francisco. It was never rectified – you had to seal off the sensor underneath with some masking tape..

The press marveled at it, and the Cube began to appear on reception desks at design studios, advertising agencies and dot.coms. Clones began to appear.

But by October it was clear sales were poor, and Apple was offering refunds to bring down the price, effectively throwing in a monitor for free. Apple blamed a poor quarter on lower-than-expected Cube sales. By early 2001 the dot.com bubble was bursting, throwing the economy into a recession. Less than 100,000 Cubes had been shifted.

In March 2001, MacUser reported the team had been disbanded. MacWorld reported that was buying back Cubes from the retail channel, quoting a CompUSA salesman as saying: “When you sell only a couple of Cubes in a month, no price decrease in the world will matter.”

On July 3, Apple put out a statement confirming that it had decided “to suspend production of the Power Mac G4 Cube indefinitely”. Apple wouldn’t put out a headless Mac until 2005, with the Mac Mini. But this was aimed at the budget buyer, used laptop parts rather than premium components for performance, and had none of the style of the Cube. It was designed to be ignored, and not the centre of attention.

What went wrong?

f it had launched a year or two earlier, in the insane spending spree of the dot.com era, it may have been a different story. But Apple’s marketing suggests it too was nervous about the appeal.

The five-minute promotional video introduces it as a “super computer” – and the original press release emphasised a “Pentium-busting” performance. But it was no more of a “super computer” than its G4 siblings in the PowerMac line. This suggests a lack of confidence in the design – Apple felt it had to be utilitarian, too.

Pulling out the reactor core

It hadn’t helped that Apple had missed the Napster era. PCs came with CD burners while Apple insisted machines were sold with DVDs or CD drives. Apple certainly made up for it in 2001, starting with the “Rip Mix and Burn” campaign – and version 1.0 of iTunes. And it never forgot the importance of music – creating the digital music retail market in 2003, where labels had failed.

The problem was that Apple’s customer base was really bifurcated into two camps back then – students and consumers who wanted an all-in-one, and looked for value, and the professionals who expected to expand their machines. The Cube was too expensive for the former, and too restrictive for the pros.
Getting Cubic now

Yet the unworldly design created a fiercely loyal fanbase who supported the market for add-ons. A succession of strong CPU upgrades, from Powerlogix, Giga and Sonnet, which took the Cube up to dual 1.7Ghz G4. There were also beefier, Quartz Extreme-capable graphics cards made available. Third parties even manufactured larger cubic cases – these were needed for the fans and cooling systems.

The community lives on and gathers at Cubeowner.com, where the affection for the machines is evident. Do check out the galleries.

In the UK, you can pick one up for anywhere between £100 and £150 on eBay. The expansion options are limited, ruling out USB 2.0 cards for example, and you’ll be stuck with a Parallel ATA drive that needs special drivers for drives larger than 120MB. But it will still run Mac OS X 10.4 Tiger well enough to get some work done. The problem is the bus speed is constrained; at 167Mhz it’s ten times slower than a 1Ghz CPU, for example.

My first Cube was late adn DOA, and so was the second. Its replacement arrived two months later, spluttered for three weeks and then expired. All were motherboard blow-outs. It was enough to repel anyone but a fanatic from demanding another, so I didn’t.

It was 2006 before I picked up a cheap Cube that had been upgraded to a noisy 800Mhz G4 with thanks to Sonnet. But it did great service for a couple of more years. You just had to leave a note on the desk reminding people not to leave their newspaper on the grill …

The Cube remains a quite bonkers, and quite brilliant expression of a particular design – a really outrageous statement. There was no reason it should ever have been cubic, let alone suspended in mid air. It should never have been made – we should be glad it was. ®

Apple will continue to rule the roost, dictating terms and charging eye-watering prices to punters. The punters will continue to be delighted with Apple, and will clamour for more; while BlackBerry has an ace up its sleeve – probably the biggest mobile sensation of the year.

When the crystal ball lies

But first things first. It’s sometimes useful to revisit why you’ve been wrong, because it can tell you a lot about the future.

Ten years ago, I thought the European advantage of GSM combined with the Nordics’ technological and market advantages would eventually result in a real shift in power away from the United States. Nobody dreamed that RIM and Apple would pocket most of the profits. Back then, RIM was a maker of ugly corporate pagers that depended on a complex and expensive proprietary messaging server. Surely Microsoft and Exchange would soon demolish that advantage. RIM had the added disadvantage of being Canadian.

Meanwhile Apple was a boutique, recovering computer company. Its first foray into mobile devices since Jobs returned came in late 2001, and was widely derided by lots of clever people. The iPod was hugely expensive (almost £600 here in the UK), and only worked with the Mac over Firewire.

In 2002, at the first of what became annual "Apple makes a phone" rumours, I pointed out that integration was extremely difficult – integrating the hardware, integrating the device to play nice with the networks. Creating a balsa wood mockup in the lab was easy, but in the wild mobile phones presented lots of complex challenges, and the Nordics’ experience would win out.

I also thought mobile data services would be hugely popular, with the established players learning from the WAP and walled garden mistakes. They never did, and must now join the queue to implement other people’s mobile-unfriendly protocols, such as the angle-bracket stew on offer from Facebook and Twitter.

The networks’ lack of innovation stands in stark contrast to their GSM glory years. It means they have little option but to deal with Apple and RIM on Apple and RIM’s own terms – this will become increasingly important, as we’ll see. In short, Apple and RIM have succeeded where Nokia and Sony Ericsson failed, in making mobile data popular.

Apple’s still got what everyone wants

Apple and RIM’s success will continue, and Android will march on, I believe – but the rhetoric doesn’t quite sit right. The mobile market is too diverse to see a replay of Microsoft and the PC. The triumphalism behind Android now reminds me very much of the Symbian-Microsoft smartphone wars a decade ago.

Android is new. It hasn’t experienced the problems that Symbian experienced, because manufacturers are throwing new models out of factories as fast as they can, and haven’t really noticed where they land.

My confidence in Apple rests on its comparative advantage in the user experience (UX) – it’s still streets ahead of the rivals in ease of use. If you don’t believe me, try a test with someone who has a new, rival touchscreen phone; invite them to change the wallpaper or the ringtone.

I’ve been actively using S60 for much of the past eight years, and I still had to consult the manual recently (when reviewing the X6) to find out where Nokia has stuffed a particular setting this year. I don’t think this is something a newcomer to BlackBerry or iPhone has ever had to do. Nokia and Sony Ericsson – the two dauphins of smartphones ten years ago – have cranked out some really impressive hardware over the past decade, which often succeeded in spite of the user experience, not because of it.

Android will fail to live up to the lofty expectations because the manufacturers are still at the "Wow!" phase with it, bless them. They think that by simply adopting Android and hiding some of the rougher edges of the UI, success will follow. That’s not the problem, and Android isn’t the solution.

The entire "platform" premise behind Symbian, and the many Linuxes such as LiMo, now looks (with the benefit of hindsight) extremely dubious. The idea was that you’d get a common standard, and a network effect. The idea behind Symbian was that the platform company would do the heavy lifting, and because it’s cheaper across a portfolio range, you could do lots of phones more cheaply.

The Android licensees think that today – but throwing out lots of mediocre products isn’t necessarily profitable. The lucrative end of the mobile device market is a product culture, and it pays to put more of your wood behind one arrow, or just a few arrows; the more you make, the less distinctive each one is. Android doesn’t really do anything to encourage the development and marketing of distinctive products, must-have phones that people talk about in the pub.

The economic consequences of the Android approach are also dubious, as Horace Dediu concisely pointed out. It leads to a low-margin, bargain basement culture.

I agree that the supply of Android devices to the market will increase, at least in the short term, and that the usability of the platform will improve. But demand doesn’t necessarily rise to meet supply. If it did, we’d still be WAP-ping away. Or… and insert your favourite technology failure here.

And in a scrap for the scraps in a bargain-basement fight, the winners can only be the companies with huge economy of scale advantages, which means Nokia, or ultra cheap, corner-cutting no-name manufacturers we’ve never heard of.

The BBM Factor

The perception of RIM has changed enormously here in the past five years. It’s a compulsory corporate item in the US, where it’s to the white collar cubicle dweller what the loin cloth was to the cave man. (I get all my history from Hollywood – in this case 1 Million Years BC; I challenge you to prove me wrong).

But in the US, as soon as the "cabin doors to open" announcement is made, out come the ugly, chunky BlackBerrys. Most of them are still monochrome. In Europe, however, a BlackBerry is now what you buy if you don’t buy an iPhone. (I know many people who have both.)

The BlackBerry isn’t the best voice phone in the world, but neither is the iPhone. It does have a reputation of getting one or two things done very well, and of handling the rest (photos and music, and a bit of web) adequately. RIM never skimped on high quality screens and keyboards; there’s a real assurance to that. As with the iPhone, its high word-of-mouth reputation does the marketing.

The ace that BlackBerry now has is BBM, the UI which for devotees is now the gateway to the entire phone. To see a BBM user in full flow, typically with a wired headset, scrolling away, is quite something. It makes you wonder why the phone giants have never done this properly, instead of focussing on all the cruft that comes with "personalisable Outlook screens". (Actually, the last few years of smartphone UI development pre-2007 were devoted to taking out UI features, and optimising one-handed use, which left the cupboard bare when Apple came along.)

While BBM was originally sold as a business tool, it’s the ordinary people who are now the greatest users. Even only using a fraction of features in RIM’s one minute demonstration video takes you quite a long way.

Ironically, Google sort of had the right idea with Nexus One, which was to make a stand-out product that got people talking. The error was insisting on doing Nexus One itself.

In short, Apple and RIM will continue to prosper because they focus relentlessly on user experience, and because they do one or two things well. This is a Good Thing.

One of the oldest mottos at Vulture Central is Show Us The Money. There’s one even better, I think, which is Show Us The Profits. Are there any? If there are, where are they going? At a stroke, this cuts through huge amounts of hype and puts entire industries (and, for good measure, almost anything WiReD magazine has ever endorsed) in a much clearer perspective. So have a gander at the following analysis of the mobile phone business – it’s quite startling.

Asymco is a one-man analyst company operated by Horace Dediu, a former Nokia manager in Helsinki, erudite and informative with a good eye for history. Earlier this week he looked at the profits of the largest seven manufacturers, responsible for 80 per cent of the phones sold, over the past three years. The trend indicated last year is now quite clear, with two North American companies capturing the lion’s share of the profits. In Q2 2007, Nokia pocketed 63 per cent of profits; Apple and RIM just seven per cent between them. Wind forward three years, and Apple and RIM snag 65 per cent of the profits, largely at the expense of Nokia, but helped by the collapse of Sony Ericsson and Motorola, who are a tiny shadow of their former selves.

There’s a conclusion to be drawn for Google and the Android licensees, thinks Asymco. None of the three leaders are likely to abandon their in-house platforms for Android, it’s either inferior (to iOS) or (as with BlackBerry OS, Symbian or Meego) switching simply isn’t worth it. So Android is left to target the very manufacturers who have been squeezed. And that in turn leaves them with some tricky choices to make. Android is becoming a commodity platform, so they need to differentiate themselves from the rest of the Android rabble: we’ve seen Sony Ericsson, HTC and Motorola invest heavily in their own UIs. But because Android is a commodity platform, this investment isn’t worth it.

Dediu reckons:

“The real challenge is that partnership with defeated incumbents whose ability to build profitable and differentiated products is hamstrung by the licensing model and whose incentives to move up the steep trajectory of necessary improvements are limited.”

Their fate, predicts Dediu, might mirror something quite familiar:

“Android’s licensees won’t have the profits or the motivation to spend on R&D so as to make exceptionally competitive products at a time when being competitive is what matters most…the same lack of symmetry with licensed software vendor Microsoft is what led the failure of the same incumbents to make a dent in the industry with Windows Mobile [2003 to 2010].”

Ten years ago, this was always the fate that Symbian dangled in front of licensees tempted to follow the Microsoft path. Look at the PC business, they said, nobody makes any money. (Today, we know the PC business is an illusion, a polite fiction that behind the curtain is funded by Intel and Microsoft themselves.) Symbian’s proposition was that manufacturers could differentiate themselves at the UI level – similar to what Google preaches today. But this never really solved the profits conundrum either. Maybe no platform company can ever offer a solution – today’s bling, high-margin high-end phone will always going to be tomorrow’s throwaway low-margin commodity, and the only way to keep profits coming in is to keep creating cool innovative things people want to buy. Android’s licensees won’t have the profits or the motivation to spend on R&D so as to make exceptionally competitive products at a time when being competitive is what matters most. An analysis of the smartphone business seems to put things in perspective quite nicely. Related Link : ‘Android’s Pursuit of the Biggest Losers’ – Asymco

It seems absurd, at first – Nokia is still turning a profit in the billions, while Apple’s annual loss was in the billions of dollars. But one thing should focus minds of executives and shareholders for one reason that’s never mentioned – the Sudden Extinction Event.

A recent theory suggests that life on Earth is extinguished and starts over every 27 million years. Coincidentally, 27 million years is how long it takes the Dave TV channel to show every repeat of Top Gear without showing the same repeat twice [*].

Businesses suffer Sudden Extinction events too, and we saw one in the past 12 months right in Nokia’s backyard: the rebirth and crash of Palm. Some businesses are much more vulnerable to Sudden Extinctions than others, and I’ll explain why by using Apple’s pre-Jobs quandary to illustrate it.

Nokia’s huge asset today is cash. It turns over a lot of cash, and it still makes a tidy profit. The most recent financial year saw a profit of around €9bn gross, with a net profit of €3.3bn for its devices and services division. Maintaining profitability is a decent achievement. Nokia also has around €8.8bn cash in the bank.

Back then Apple was smaller, of course, and it was hit harder. It saw revenues fall from $11bn in 1994 to under $6bn in 1998. Unable to respond to falling demand quickly, Apple lost $1.8bn over two successive financial years. (It took a decade, and the iPod, for Apple to rescale the peak of its 1990s income.)

But Apple had two great advantages.

The replacement cycle for Apple products was much longer than it is for Nokia’s products today. It varies in each market and each age group (and on who you ask) but it’s around 18 months. Apple’s kit back then was replaced every few years – and it didn’t help that they were built like tanks.

Much more importantly, Apple had a “network effect”. It had lost the IT productivity market to Windows, but in education and particularly in professional content creation, it was the dominant system.

Repro houses took Apple files. The publishing systems were Apple. They were usually tied together using AFP and AppleTalk networks. The workforce of contractors knew Apple products. (I recall how difficult it was to find Photoshop or Quark contractors who knew the shortcuts for the Windows versions in the mid-1990s – the Apple shortcuts were so deeply ingrained.)

And in this market, Apple’s computer continued to work. The PowerPC chip was still pretty fresh, and looked to have plenty of life in it. So making the move to Windows would have been costly.

Even for individuals, moving away from the Mac was much more problematic than it is today – valuable data was trapped inside extended attributes (or in Apple parlance, resource forks), that Windows had problem reading. Better to sit tight than move.

Despite its terrific brand, particularly in Asia, Nokia has no such network effect. Customers can choose to switch from a Nokia phone quite painlessly. They copy the address book to a SIM, and off they go. Given a bad experience, customers can stay away a long time.

A recent poll by YouGov showed that only a third of smartphone owners would even consider a Nokia as their next purchase, a drop of 12 per cent in just six months; only 15 per cent would recommend a Nokia, another number falling.

Today, Nokia cites amongst its great advantages its scale and logistics, and in particular its manufacturing assets. But there’s no point in having manufacturing if the demand isn’t there – the factories become a costly overhead. Without high-margin products of its own, Nokia may as well become a contract manufacturer.

Cash is still King

Opinion is pretty unanimous why Nokia is getting beaten up by analysts and pundits on a daily basis. A little may be American triumphalism, but most of it is sound. Nokia isn’t making high margin products, and its lower margin products aren’t significantly better than the competition, which gets better every year.

Ten years ago, a low-end Nokia was still much better than a low-end rival – it was easier to use, had better battery life and reception, and often had better build quality. Today, Samsung makes very good ‘cheap Nokias’, and Apple and RIM have stolen the ‘aspirational’ bit of the market. With two billion new members of the middle class looking to make a statement, this is quite ominous.

In recent years Nokia has become so used to splashing the cash about that it’s rare to find a marketing consultant who doesn’t or hasn’t worked for the Finnish giant. It single-handedly keeps parts of the economy going – particularly the Strategy Boutique sector – people who dream up segmentation strategies or demographic shorthand. It funds entire branches of academia. But Nokia’s cash cushion isn’t so great that it can afford that anymore.

For example, this means it can’t afford too many splurges like the Navteq acquisition, which will never recoup the mind-boggling €8.1bn investment but has yet to be turned into a differentiator. In under three years, Maps has been Ovi-fied into near-oblivion, and Nokia needs to turn it into an asset that retains existing customers and attracts new ones. Nor can it afford to fail as it did with games, another expensive adventure it embarked upon with N-Gage in 2002 and finally abandoned last year.

With a network effect, Apple could afford to annoy partners and customers as it fought its way back to profitability. It did so again with the move to Mac OS X, before it was ready. Each time Apple gambled that customers could endure a bit of temporary pain. That’s not the Finnish way – it still talks in terms of ‘eco-systems’ and about generating opportunities for partners, who increasingly realise they can seize them without Nokia’s help.

Without a network effect, it’s not a luxury Nokia can afford. Its responsibility is to shareholders, and it has to be pretty brutal.

Footnote

You can view Steve Jobs case-study keynote at MacWorld in 1997 explaining Apple’s recovery strategy here. The segment identifying the market starts at around 18m:30s.

It hasn’t taken long for the iPad to be seen as a bit more than a pointless and expensive luxury lifestyle accessory. Just nine weeks – and in that time the hardware spec hasn’t changed at all.

But last week’s iPhone 4.0 preview, which isn’t due on the iPad until autumn, already makes it look much more attractive as a netbook or laptop replacement than it did on Wednesday.

I’ll admit I truly loathe netbooks. When the first models emerged at least they had their size going for them. Now they’re bigger and more expensive, but mostly dog slow.

Size and weight matters to me, and the iPad has had these advantages from the start. The disadvantages of an iPad over a laptop were many, but the lack of multitasking was the biggest. That’s been fixed now – at least well enough so most people don’t notice.

Lack of a physical keyboard is another problem, but iPhone 4.0 gets proper third-party Bluetooth keyboard support. Apple’s official keyboard accessory, the ‘iPad Keyboard Dock’, is very unlike-Apple. It can only be used on a flat surface, and doesn’t look toddler proof: it places a lot of strain on a fragile connection. The Apple Wireless Keyboard will work, but it’s a generic device. It doesn’t make typing on your lap practical, as a custom-designed keyboard might*.

But the iPad has gained VPN support and crypto, two strong candidates for grown-up computing. Whether any of the iPhone OS ssh clients can now sprout standard features such as port forwarding remains to be seen. I have no fear of jailbreaking to get at such raw features, but plenty of people quite understandably do.

Apple’s version of multitasking may almost be good enough. I liked the observation that “if you see a stylus, they blew it. In multitasking, if you see a task manager… they blew it. Users shouldn’t ever have to think about it.”

True, but Apple’s method gets weary and RSI-inducing very quickly. Remember that most of us, most of the time, switch between just two tasks. iPhone OS 4.0 lacks a quick gesture to achieve this.

But I think with the OS update, the iPad will be finding its way into potential buying decisions in a way it didn’t at launch.

In January I had three good reasons to dismiss it as a laptop alternative: price, multitasking and the lack of a USB port. I consider the latter an essential gateway to a wider world of hardware such as cameras, card readers, controllers and things we haven’t thought of yet.

Well, USB obviously isn’t going to be fixed in this year’s model, and may never be. It clashes with the purity, or puritanism, of the Steve approach. Multitasking has been fixed. The price for UK users still hasn’t been revealed – so that’s a variable. Obviously I’m not going to be writing a book on an iPad. But quite unexpectedly, it’s looking like a useful bit of daily computing kit.

What can rescue the Pre, then? All is far from lost, since it’s still early days. In fact, the 2009 shortfall was more predictable than shocking. After wowing critics with a ‘better iPhone than the iPhone’, Palm chose to launch with a marginal, cash-strapped carrier, Sprint. Since Sprint is fourth in the marketplace and committed to WiMax for 4G, this is a barking mad decision that few outside Intel HQ expect to turn out well. Only in the autumn did Palm go to market with a significant US partner, in the shape of Verizon. And Verizon now admits it ballsed it up.

Add O2 to Palm’s coalition of the apathetic. Bloggers have noticed how its site renders it invisible, and Carphone’s isn’t much help either. Palm isn’t listed as one of its suppliers in the main navigation (where the potential punter can opt for Apple, BlackBerry, Nokia, and others). A few of O2′s own stores have Palm Pre models on display. O2 insists that sales are good but won’t give out figures.

Palm Pre Pixi:
still pretty nerdy

Usually three things are identified when a company gets its forecast so badly wrong. It needs to make the product better, it has its go-to-market strategy wrong, or else it’s not promoting the phone adequately. Which is it here?

Well, the latter is blindingly obvious, for a start. In the UK, this outstanding phone has been lost in the noise. The UK market now has lots of cheap but perfectly serviceable touchscreen phones, by Samsung and LG, from which to choose. Operators are carpet bombing us with Android devices, which come and go, but are well promoted. While they’re visible, they’re very visible, but the all-conquering Apple and Blackberry call all before them.

Palm’s chief asset remains webOS, and it needs to realise that asset. Palm’s webOS can go into a lot more different kinds of devices. In the US, the company appears to have made the conservative BlackBerry-style keyboard mandatory. This isn’t necessary in Europe – where sliders and pure touchscreens have sold well. In Europe too, it should make more of the well established operators’ subsidies that Apple has done so much to upset. It may need more low cost (the Pixi is now $79 on Sprint). If you’re in the business of selling phones, go and sell some phones.

Much of the US ad spend has been spent on very expensive and pointless ‘rebranding’ ads, allowing Motorola and Verizon to go aggressively head-to-head with the iPhone. Check out this – although you’ll probably wish you hadn’t.

Expensive and pointless, and saying what exactly?

A phone is just a tool, and it can be a useful tool. When I first saw the Pre, in launch week in DC, I thought it had got so much right, in many ways what the iPhone should have been, and made Nokia’s S60 edition look prehistoric. Surely success was assured.

Maybe Palm thought something similar, too, and believed the market would beat a path to its door, simply because it wasn’t Apple. It knows it’s in a fight now.

There are many harmless and very entertaining pages on the internet devoted to speculative history, some of which are devoted to Moses’ Ark of the Covenant. It was apparently some kind of electrical apparatus. Possibly involving fusion. It performed magic. It transformed the destiny of people who used it wisely.

Now I doubt if you’ve read anything or seen anything in the last few days about Apple’s next computer that is very much more rational. Only most of this output has been written not by UFOlogists, but by grown-ups – professionals in fact, who are paid not to be stupid. It’s the most interesting thing about any new Apple device: the childish and idiotic inflated expectations that precede it. But you’ll have noticed that even by the standards of idiocy set by Big Media, the professionals have excelled themselves this time with iTablet speculation.

The reason is that they don’t just want one to play with, fanbois or gadget fans. This time, they fully expect Apple to save their jobs. That’s quite a big difference. (The New York Times let slip that Apple had a new platform for publishers last year.) So the result has been awful. Like holding up a highly-reflective idiot in front of an idiot mirror – the result has been infinite recursion of stupidity, as far as the eye can see.

I was again reminded of childish and idiotic expectations of technology yesterday, reading a lecture by the G-Whiz-driving editor of The Guardian newspaper, Alan Rusbridger.

Rusbridger had come to attack Murdoch’s paywall strategy, only he didn’t go quite so far as to say they were stupid. He admitted that from a rational business perspective, charging for some content online was the right thing to do – and The Guardian was doing it. But he had to "balance" this by a pledge that he had to make everything open and a free for all, because that was the nature of the technology.

Technology to the rescue

Examine this passage, and marvel at how the technology itself is both a religion and a progressive movement, all in one:

people are expressing themselves, about how societies will choose to organise themselves, about a new democracy of ideas and information, about changing notions of authority, about the releasing of individual creativity, about an ability to hear previously unheard voices; about respecting, including and harnessing the views of others. About resisting the people who want to close down free speech.

The Guardian is a beautiful physical product, but the people in charge don’t expect it to be around in a few years. So any editor who defied these online imperatives would be swept away by the tide of history. That isn’t rational: it’s a faith-based view of the world, with technology as the religion.

Apple, like Google, has become a religion for media people. Jeff Jarvis’ book self-consciously asks, after the popular Born Again evangelical bumper sticker, What Would Google Do? It isn’t just newspaper people who are expecting Apple to deliver them from a sticky fate. It’s people in the music and movie businesses too. They’ve looked enviously at closed locked-down platforms like the Xbox 360 and PS3, and wondered if something could allow them to flourish, too.

Maybe it wouldn’t have to be quite so locked down – or at least, not with the same high ground rent that Sony seeks. But if only they could get valuable subscription revenue from a new ‘platform’, all would be well. So something will step in and save them.

The Hollow Men

Yet executive in entertainment and news over the past decade have made this much more difficult; the media’s crisis is one of its own making. Over ten years, they’ve hollowed themselves out. Newspapers are now excellent lifestyle magazines, delivered in instalments on a daily basis. Their capability to provide us with something we didn’t know, or couldn’t find out, or give us new ways of thinking about something, is just not there any more.

Ten years ago you could be sure a broadsheet transport correspondent both knew his field technically and knew the business landscape, while a health correspondent could put the complex into context. I’m not even sure there are any transport correspondents any more, while the other specialists – if they are there – simply reprint press releases from industry, or from the tight-knit hairball of government, academia and pressure groups. A newspaper today is like Google News with the news taken out.

us not to give them our money. They also neglected physical formats and decided to ‘compete with free’ by giving away the crown jewels for nothing, although perhaps not to the same extent. But we now see Spotify lauded for (apparently) "reducing piracy", when its return is negligible.

For these industries to rescue themselves, they don’t need Steve Jobs. They simply need to stop being idiotic. Nobody ever put a gun to a newspaper executive’s head and instructed them to ruin their business. Take away the utopian religion and they can start to be rational again.

Now I appreciate there are subtleties here a broad brush can’t capture. Every newspaper proprietor wants to drive the competition into the ground. Murdoch uses aggressive pricing. Echoing the US city newspaper monopolies, Rusbridger has already mooted a future where public subsidies fund ‘quality journalism’. A translation of that is "we’re a commercial basket case, please give us a tax handout". I find it hard to believe that with the nation utterly broke, politicians will look upon this request with sympathy. What I can say with certainty is that they’re not going to call it correctly.

Looking back at my own tech predictions, as well as other people’s, there’s a consistent theme. My worst call in the past ten years, for example, was expecting smartphones to become much bigger and broader than they have. I should have anticipated physical constraints, crappy UIs, and dodgy and late network infrastucture.

But I downplayed all of these in my estimates, because I wanted them to succeed. I thought it would be a good thing if they did succeed. But things don’t work like that. Oops. Epic Fail. Similarly, sky high expectations of Linux were powered by the deep desire that Microsoft go away. Linux is very good now, and better than ever – but the expectations were pure wishful thinking.

Because media people think Apple’s iTablet will save them, you can safely disregard everything that’s been written, or will be written, by large media companies about the launch tomorrow.