Angry copyfighters barraged a small Scottish food certification agency with abuse last week – in the belief they were protesting against hated US anti-piracy legislation.

The Scottish Organic Producers Association – whose website is at sopa.org.uk – was perplexed when it found itself on the receiving of dozens of nasty and illiterate emails.

Remarkably, nothing about the site’s design – including pictures of sheep, vegetables, Angus cattle and fruit – did anything to suggest to the furious freetards that they’d got the wrong SOPA – or that something might be not quite right.

Dozens of emails were submitted via a form on the the association’s website. Techie Gavin McMenemy told us that the nastygrams had subsided by the end of last week. Here are a couple of examples received by the agency, which certifies organic farmers in Scotland.

One from ‘Josh Chard’ pleaded:

Stop what you are doing. NOW. Your laws are stupid!! We love entertainment. I\’d copyright all i want!! Problem? I\’d do it to entertain friends, Family and even strangers!! You pass and you\’ll be hated everywhere in the world! Why can\’t you fat fuck americans get this in your uneducated heads?!

Topped by this one:
you suck eggs mother fucker sopa

Well, that’s telling them.

But perhaps in the overheated minds of the angry Boing Boing reader, it’s all part of the same giant conspiracy. Look very closely at these pictures:

Is that really a tractor? And that may look like a hen shed – but could it be a secret, RIAA-built holding facility for copyright criminals? Think about it.

I have a list of some words that really should be banned in polite conversation. The only reason not to ban them is that they’re useful indicators, an unambiguous warning that the speakers are going to be a serious waste of our time. The use of any of these words is like wearing a giant invisible that that says: “I have no insight or experience to offer and talking to me represents a huge opportunity cost.”

Many of the most enthusiastic users work in consultancy or academia or punditry or new media – the parasitic professions. So what might be on my little list?

One is “meme”, obviously.

Another is “business model”. Nobody in business ever used the word “business model”; it’s the sign of an outsider who has never run a business. But people in consultancy or academia use it profusely. It’s like virgins talking about complicated sexual practices.

The word I’ll look at today, the first day of the reign of Apple’s new full-time CEO Tim Cook, is “disruption”.

Apocalypse Now! Or soon

The principal reason intelligent people avoid such words is not just a healthy distrust of jargon, but that these words confuse and obfuscate rather than clarify. If you ask for a definition of “disruption”, you’ll get five different definitions. Try it. And that’s if you’re lucky. More likely you’ll get five anecdotal examples, which isn’t very helpful. As someone remarked after first attending a Net Neutrality Conference, when 80 per cent of the time and energy in a debate go into arguing over what the word means, it is a dead end and the substance will certainly be elsewhere.

The word “disruption” and its dim-witted cousin “disruptive technology” were popularised by Clayton Christensen in The Innovator’s Dilemma.

New things challenge old things. Is there any other motivator for scientific enquiry or technological innovation than to do something dramatically better? I suppose there is the orderly accumulation of government grants as motivation, but when it comes to innovation that has never been very useful. I don’t think Herr Haber and Herr Bosch were motivated by grants when they made one of the great breakthroughs of the last century – one which may keep such discussions in perspective.

the examples of “disruptive technologies” proffered by the Priests of Disruption, it looks very like a list of “popular technologies you may have heard of and see lying around the house”.

Steady State

Consumer electronics technology has been “disruptive” for as long as I can remember. Many apparently new technologies are new only to the average consumer, a result of falling prices. Examples include the integration of tape recording into radios and hi-fi equipment, which meant your average listener could tape the Top 40. The VCR is also such an example. And such technology arrives in wave after wave, each new iteration a little disruption of its own. How many tides does one need to experience before we can describe it as the everyday motion of the sea? Surely by this point it has become a continuous phenomenon – and we should be remarking on the waves’ modulation and amplitude rather than marvelling at a single wave’s occurrence. Continuous is the very opposite of disruptive – but continuous is a lot less sexy. The management consultant who deals intelligently with continuations doesn’t have the dramatic appeal of an End-Times Evangelical, which is really why “disruption” sells so well. It may be the case that obsession about “disruptions”, and the time spent obsessively looking for them, may even mean you’re looking at the wrong things, ignoring trends that cause real change in markets. Nokia is a good example. The Innovator’s Dilemma was mandatory reading there – and a fat lot of good it did them.

Yet the term must stand for something, or it wouldn’t have captured any interest, and wilfully pretentious people wouldn’t be able to hold forth on “disruption” with confidence.

Which brings us to Apple.

How Apple changed the world

In many places this morning I’ve read that Apple was uniquely “disruptive”, or without Jobs in the hands-on CEO role, it should be fine until the next “wave” of “disruption”. Here’s what I think they mean.

When new (cough) disruptive technologies in the 1970s and 1980s appeared, we didn’t expect Matsushita or Sony to disappear overnight. The language of “disruption” implies that they should be in mortal peril – or at least, like Nokia, the executives must rush out and buy lots of copies of Clayton Christensen’s book.

What the Priests are claiming is that today, there is now some unique volatility that wasn’t there before, and companies have a unique vulnerability to this. There’s a grain of truth to this. But “times change, huh?” isn’t very useful.

So what is going on?

Well, one significant difference is that the media and entertainment industries, which traditionally managed technology transitions pretty well, have spent the last 20 years honking in all directions like rabid geese. Thanks to the flexibility of copyright, technology innovation has made rights-holders and creators richer. The content made technology companies richer, too. All was well.

But suddenly confronted with a technology they couldn’t understand, and taking the apocalyptic rhetoric of showboating screeds such as Declaration of Independence In Cyberspace at face value, the rights industries forgot all about the historic continuum. And that had huge repercussions. With the media and entertainment industries in disarray, the risk for investors in technology and service sectors increased enormously. They could easily find themselves backing the wrong side.

What Jobs figured out Apple needed to do was recreate the partnership between technology and creative industries, and Apple could make a decent fist of doing so. This wasn’t some benevolent Jobsian mission to save Hollywood, but a pragmatic reading of what history was telling him. Hence the iTunes media retail operation, and AirPlay. If Apple hadn’t rolled its own music delivery system, the major labels may still be arguing about whether it was wise to launch one. (They were not only obsessed with control, but fearful of the antitrust implications of acting in unison).

This strategy is implicitly recognised by rivals who aren’t as good at it. When Nokia CEO Steve Elop talks about platforms and “ecosystems”, what he means is that you can’t get The Economist app on Symbian, for example, or the neat WFMU app that caches shows, and to shop at Sainsbury’s on a Nokia you have to do so through a pokey mobile web browser. He knows that all this adds up: this matters.

Apple was equally happy to embrace something like podcasting, which didn’t require so much schmoozing in Los Angeles, if any at all, because podcasts helped enhance the value of Apple’s hardware. This is quite simple. But the Priests of Disruption hate simple explanations: there’s no money in them, hence the obfuscation.

That, to me, seems why Apple has been so successful. It patched up the holes which traditional media and tech partnerships had failed to in the broadband era. And fortune favours the brave.

The challenge for Apple’s new CEO is that he has to juggle two priorities. In addition to the old problems of a Sony – making new gadgets – he has to decide how far into a retail and distribution role Apple should go. Cook and Chairman Steve will have to pick and choose Apple’s fights carefully. As an example, the two HD movie delivery systems are going to be UltraViolet and Apple’s own (whatever it choose to call it). UV has a wide range of manufacturer support, but AirPlay doesn’t, as yet. But how long does Cook decide to fight UV with its own system? Is Apple in the hardware or the media delivery business? Or is it a bit of both.

Now, don’t get me started on the word “ecosystem”. As you might guess from that piece, that’s on the list, too.

TalkTalk boldly promised today to fight disconnection requests in court, at least until after the election. Carphone Warehouse strategy director Andrew Heaney made the pledge on his blog.

The fact that ISPs don’t get any disconnection requests, and if they did, they would (rightly) throw them in the bin along with other junk mail, isn’t mentioned. Such a request would currently have the legal validity of a request to paint your house pink, scribbled on a fag packet and thrown from a passing car.

Heaney’s pledge is only good until “after the Election”. If account suspensions are eventually approved, it won’t be for a long time.

Maybe Heaney thinks we’re all extremely stupid. Or maybe he’s just found his audience.

“I’m impressed. Well done,” comments Stef Lewandowski, a marketing guru who has advised quango Nesta and the Department of Culture Media and Sport, and is a Cultural Leadership Fellow at the Arts Council-sponsored Clore programme, studying “Accelerated Serendipity“.

“Seven Years of Donations Fighting, Brothers…”

Meanwhile Open Rights Group’s Maximum Leader, Comrade Jim Killock, was crowing about the success of the appeals drive, launched to capitalise on the ORG’s spectacular success (are you sure? – Ed) with the Digital Economy Bill.

The ORG’s entire front page was replaced with a “Fuck You” graphic, soliciting donations. This prompted dismay from supporters, according to emails that fell into our inbox.

“Someone – please – say that the ORG server has been hacked by some script kiddies,” wrote one supporter. “Oh, for heavens sake are we in the school playground? Who are we trying to attract?” asked another. “Yes, we lost a round – there’s no reason to become petulant and offensive.”

Killock eventually obliged, but then noticed something:

“Hum guys, since we took the graphic down, nobody’s joined up (from 16.50 till now) – that’s cost us about £2000* assuming they’re not joining because we’re not pushing them as strongly”

So he put it back up again.

Comrade Jim explained that five people an hour were joining while the front page had displayed the middle finger – which indicates what an impressive mass movement the music industry is up against. That’s almost enough for an ORG Flash Mob. The average pledge was £60, which Jim multiplied over seven years.

(Obviously he expects the ‘copyfight’ to go on… and on… and on.)

“I’m very understanding of the issues people have raised, but a strong reaction – one that will offend some people while making other people agree violently – is required to make people part with their cash.”

That’s the spirit, Jim.

Gladwell gave two vanity “performances” in the West End – prompting fevered adulation from the posh papers – the most amazing being this Guardian editorial, titled In Praise of Malcolm Gladwell.

It appears that we have a paradox here. A substantial subclass of white collar “knowledge workers” hails this successful nonfiction author as fantastically intelligent and full of insight – and yet he causes an outbreak of infantalisation. He’s better known for his Afro than any big idea, or bold conclusion – and his insights have all the depth and originality of Readers Digest or a Hallmark greeting card. That’s pretty odd.

So what’s really going on here? Who is Malcolm Gladwell? What’s he really saying? Who are these people who lap it all up? And what is it that he’s saying that hold so much appeal?

Let’s start with the first two first.

The Master at Work

Gladwell is a walking Readers Digest 2.0: a compendium of pop science anecdotes which boil down very simply to homespun homilies. Like the Digest, it promises more than it delivers, and like the Digest too, it’s reassuringly predictable.

The most famous book Tipping Point, takes an epidemiological view of social trends and throws in a bit of network theory. You won’t draw anything more profound from this than “we’re all connected” – gee! – and you certainly won’t get the drawbacks of epidemiology – much of which is now indistinguishable from junk science. A good book to write would be about how how epidemiology became so debased so quickly: it’s now merely a computer modeling factory for producing health scares, or in the case of British foot-and-mouth disease, catastrophic policy responses that cost billions of pounds. John Brignell’s The Epidemiologists [Amazon reviews / author's page] does just that.

(For good measure, Milgram’s Six Degrees theory, has subsequently been debunked since Tipping Point appeared. Gladwell would have done that himself if he’d engaged in a bit of investigative research of his own – but he probably wouldn’t have liked the conclusion.)

The next book, Blink published in 2004, asks (in his own words) -

“What is going on inside our heads when we engage in rapid cognition? When are snap judgments good and when are they not? What kinds of things can we do to make our powers of rapid cognition better?”

But he ends up pursuing the idea that rationality is overrated – and with only speculative cognitive science to go with, it isn’t suprising that this book, too, doesn’t get to any conclusion. And the message of the new one? Genius takes hard work. Again, it’s something bleedingly obvious, but which leaves deeper questions unanswered. Take two geniuses: George Best and Tesla. What did they offer? Why do we admire them so much? There’s obviously much more to each of them than perspiration – but we don’t find out, and the book is as flattening and reductive as the others.

Perhaps it’s Gladwell’s stunning oratory that draws the crowds? Perhaps he’s such a magnetic performer, that you go for the ride, not the destination? But when we see a example of the Master at Work – the evidence seems to suggest otherwise.

(Bear with me – it also sheds some light on the other half of the Gladwell puzzle – the adulation, which begins to look quite creepy.).

Treading the bores

Here’s an excerpt of the master strolling the stage at Ted – a presentation called Malcolm Gladwell on Spaghetti Sauce.

Gladwell blathers at great length about an obscure market researcher called Howard Moskowitz. Who? On his own website, Howie calls himself “a well-known experimental psychologist in the field of psychophysics“. Yet Gladwell describes Moskowitz’ market testing of varieties of soup as if he was an unsung genius of the 20th century.

All this takes up 15 minutes, but it’s so repetitious and predictable, it seems to take about three times as long. (So much for the dazzling oratory Guardian leader writers admire.) From this Gladwell draws four lessons.

Firstly, people don’t know what they want – or can’t express it. (And need marketing geniuses to figure this out. Funny, that.) Secondly, Gladwell then asserts that horizontal segmentation “democratizes taste”.

This is a very grand claim. It needs us to assume that there was very little diversity before – or that if it existed, producers and distributors didn’t offer it. Yet step into an old sweet shop, an Italian deli, or a traditional pub serving Scotch malts, and incredible diversity abounds: these are very old recipes too. You could equally explain consumer diversity because we enjoy greatly increased trade and affluence, combined with the new and cheaper technologies of production, all of which mean that things that were once exotic and exclusive are now available cheaply to us plebs. The Deli and malts examples suggest that where less-perishable goods could be brought to market in diversity, they were. No marketing segmentation specialists were needed. So what Gladwell calls “horizontal segmentation” is a consequence not a cause of increasing trade and affluence, and technologies of storage and distribution. But hey, that would mean you were using the power of thinking, not Blinking! – so let’s press on.

Gladwell’s third point promots a pleasurable brain spasm in the audience – and it introduces his narrative trademark. He adds a sloppy science generalisation to go with the sloppy marketing generalisation he’s just made.

“Science is not about universals but about variability: genetics has opened the door to understanding of variability,” Gladwell declares.

This is so breaktakingly dumb we’ll have to return to it another day. It’s a muddled moron’s version of science. (For the time being, try Anton Wylie’s potted history “At home with Hume“…). But note the self-serving aspect. A hundred years ago, Freud’s nephew Louis Bernays came to America and by selling corporate America a cartoon version of his uncle’s ideas, invented modern public relations. Surely a Gladwell role model, and similar to what he’s doing – only there aren’t any covered in his books, and the audience is “democratized”, now: there are tens of thousands of people who can create an Excel pivot table!

“When we pursue universals in food we’re doing ourselves a disservice…”

(I think we’ve already knocked down that straw man.)

“…In embracing the diversity of human beings we will find the true way to human happiness.”

So there you’ve got Gladwell in essence: he always ends with a Hallmark style greeting telling you something sweet, bland and uplifting – that you already knew.

What does this tell us about the Gladwell fanbase? How can we explain the demand?

The rise and rise of the Vertical Marketing Bureaucrat

I think this owes much to the rise of a new class. The past decade has been incredibly kind to the traditional public sector bureaucrat. But it’s also seen the emergence of a kind of “private sector” bureaucrat too – and they have a great deal in common.

In the public sector, you’ll find a new bureaucracy devoted to measurement and monitoring. Health and environment scares provided the justification for this monitoring: from your wheelie bins, to smoking signs in thousand year old Churches, to the all-encompassing ID Card. These naturally need quangos. And the quangos need some purpose in life. So they’ve adopted a weird parody of commercial language: it’s full of “performance targets” and “customer facing” marketing.

Simultaneously, a new class has emerged in the private sector – ironically, echoing traditional public sector rhetoric of “community” and “responsibility” and “environment”. Interestingly this class cuts through different business sectors: in brand marketing are big corporations, in advertising and in the media.

You could say these are non-productive jobs in non-productive companies: the skills required to prattle on about “horizontal marketing segmentation” have very little to do with traditional sales skills, or R&D. But what they rely on are the same things the New Bureucrats rely on: measurement and monitoring.

Add to that the traditional neurosis of Big Brand Marketing Honcho or Media Strategist – who has Bill Hicks’ routine about marketing playing on a loop at 4am – for whom Gladwell provides some reassurance.

For want of a snappy description, and because it traverses the public and private sectors in a kind of League of the Clueless, I’ll call this new class the vertical marketing bureaucracy, or VMB). These are people whose ambition is to speak at, or at least attend, New Media Conferences. Gladwell is their passport. And because TV and posh paper executives are now essentially part of the same vertical marketing bureaucracy (VMB) too, they’re only too happy to report on Gladwell, the Phenomenon.

So there you have it. That’s my theory.

“I’m with Stupid”

As we can see, each time Gladwell has the opportunity to engage with challenging ideas he cops out. Addressing rationality, social trends or genius properly – and failing – would still leave us richer than Gladwell’s approach, which is empty, cynical and trite.

But Gladwell can’t do science. He can’t do people. (In a recent profile he explained that he didn’t have time for relationships because they got in the way of His Life’s Work.) And as we noticed back here with the fiasco of the open source cookie – where he bodged the inconclusive competition to premature conclusion to fit his deadline – he can’t really do journalism, either.

The man has a 6,300 word disclosure statement on his website. All it needs is: “I’ve got nothing to say, move along.”

His enthusiasm amongst the VMB class tells us a lot about how stupid they think we are.

As humans we are naturally insatiably curious and inquisitive – and demand answers. Mostly. Then there are people who read Malcolm Gladwell’s books.

Anderson bet that the orange portion – the “Tail” – has more value than the red portion – the “Head”. But it doesn’t.

Examining tens of millions of transactions from a large digital music provider, economist Will Page with Mblox founder Andrew Bud and Page’s colleague Gary Eggleton, looked to see how large and valuable the “Tail” of digital music may be. They produced a spreadsheet with 1.5 million rows – so large, in fact, that it required a special upgrade to their Excel software (and more RAM) – and the three revealed their work at the Telco 2.0 conference this week.

They discovered that instead of following a Pareto or “power law” curve, as Anderson suggested, digital song sales follow a classic Log Normal distribution. 80 per cent of the digital inventory sold no copies at all – and the ‘head’ was far more concentrated than the economists expected.

“Is the ‘future of business’ really selling more of less?” asks Page. “Absolutely not. If you had Top of the Pops now, you’d feature the Top 14, not Top 40.”

As Andrew Bud explains:

“The Long Tail’s argument is that the pattern of consumption for media is bent out of shape by the limits of the shops selling them. Digital media lets the nature of people’s demand flow free. Well, we now know what the shape of that demand curve looks like.”

Bud told the conference that the basic shape of consumer demand for digital music clearly fits the Log Normal distribution, “with eye-watering accuracy”. That’s no surprise, he says, because so many sales curves he’s seen over the past ten years follow this distribution.

“Now we’ve seen what happens when tens of millions of choices are thrown in the air and people can go pick them up. What was astounding was the degree of inequality between the head and the tail – by a factor of three. It’s specifically the Log Normal shape that leads to a rather poverty stricken Tail.

“There are Tails where the Tail lives as a kind of welfare state. Not this one. You starve in this Tail.”

Brown’s 1956 lognormal curve fits digital sales data much better than “The Long Tail”

This really isn’t the upbeat fairy tale message Anderson has spent four years selling on the conference circuit.

However, as he took his “message” to Davos and beyond, the Long Tail has gradually developed into a ‘Policy Based Evidence Making’. Having convinced himself of the truth of his hypothesis by looking at one US music service, Anderson widened his search for facts that might fit his theory. But he didn’t examine the numbers closely or critically enough, say the economists.

“You need to consider much more than just some flimsy volume-based Rhapsody data if you’re going to say the world’s changed,” says Page. “For instance, understanding value both in terms of retail spend and then marginal profitability to the artist and songwriter would have been a logical extension”

In another surprise, 80 per cent of the revenue came from 52,000 songs. What’s eye-catching about the number? Well, the typical inventory of a conventional high street record store was around 4,000 CDs. Or … around 52,000 songs.

Old Rules rediscovered

Page says the breakthrough had come via Andrew’s father Martin Bud, a businessman and researcher whose work had informed a now obscure tome with a distinctly unsexy name. John Goodell Brown’s Statistical Forecasting for Inventory Control was published in 1957, and is now out of print. But it forecast the digital world far closer than anything in WiReD.

“In many ways, we’ve been in the Long Tail business since 1914″, says Page, referring to the UK copyright collection society the MCPS-PRS Alliance, where he is chief economist. “That’s what collective rights licensing is. It doesn’t matter if a song is a hit or niche, once it’s been licensed under a blanket agreement so there are no barriers to using it.”

And neither lead economist agrees that the Tail will be any more prevalent when P2P file sharing is taken into account. If anything, it’s more pronounced, Page suggests:

“Look at Radiohead’s experiment. Even when they reduced the price of copyright to free, there were 2.3 million downloads in the first three weeks – and 400,000 in a day. This was perhaps the most pirated piece of music of all time – and yet every fan could get it legally without paying. So the black market could potentially be even more concentrated.”

New World, Old Rules

For Page, the grain of truth in the digital music revolution is buried beneath a mountain of nonsense.

With cheap production tools and the internet as a new distribution channel, some costs of production are indeed lowered, and some artists can indeed cut out (or “disintermediate”) the middle man. But those old rules still make a significant difference to your business strategy.

“In particular, the division of labour and economies of scale still have tremendous relevance to understanding today’s market”, Page notes.

The division of labour means it can benefit you to employ a specialist intermediary, while economies of scale mean the bigger you are, the better terms you can negotiate.

“What’s interesting, from a collecting society’s perspective, is that when you have a dramatic increase in both rights holders on one side – more artists and songwriters – and rights users on the other side – an explosion of more digital music start ups – then, regardless of what the Long Tail is or isn’t, the case for a common platform grows. This common platform pools rights, reduces transaction costs and prevents fragmentation – and everyone sees benefits.

“Otherwise those start ups won’t get started – and those performers and songwriters won’t get paid”.

WiReD‘s faith-based economics

Bud is surprisingly generous about Anderson’s book.

“It’s an excellent book and thoughtfully written. But The Long Tail receives very little numerical examination. Saying the Tail has great value is not borne out by the evidence in this case.”

Anderson’s inspiration was the desire to put a positive spin on a depressing observation. An essay by Clay Shirky suggested that weblog readership followed a Pareto Curve (or “Power Law”) – which dismayed many early Web 2.0 evangelists. Early bloggers began to lose faith. The Long Tail helped bolster morale – although its success owed much to sloppy thinking – and in particular, metaphorical logic.

This supposes that because one thing is like another, it exhibits the same characteristics. For example:

• Oranges are nutritious
• Billiard balls are like oranges
• We should eat billiard balls

To see how far this can travel, once borne on the heady vapors of Web 2.0, take this passage by Jack Schofield in The Guardian from 2006:

“The Long Tail is making an impact because it is a powerful idea that provides us with a new(ish) way of looking at the world. Copernicus did the same thing for many people when he pointed out that the earth went round the sun, not vice versa, though no planetary bodies were physically moved in the process.”

The propensity of journalists – even highly experienced journalists – to fantasize about the world rather than examine it critically is one of the defining features of modern technology coverage.

As Andrew Bud puts it -

“The Long Tail created a Movement, and it’s the Long Tail ‘Movement’ that’s in trouble.”

Page is making a habit of debunking the WiReD clique that is the source of so much bad business advice. We published his response to Kevin Kelly (WiReD‘s founding editor) – Can 1,000 fans replace the music business? – here earlier this year. More of his work can be found online here. ®

[Disclosure: your reporter's explanation of Californian technology utopians was credited in this presentation]

Speaking at a marketing website called Nokia “Conversations” (“Stories from around the neighborhood” – it says), Jalkanen gives a very frank overview of the grassroots enthusiasm for Nokia’s S60 platform.

“Pretty much the only community around S60 is the community we pay to be there,” says Jalkanen, “a few lone, strong, awesome warriors notwithstanding”.

He’s speaking in a personal capacity, but is actually saying much the same as Symbian’s John Forsyth said here, only without the wishful thinking. But what a great metaphor for the Finns’ oh-so-earnest attempts to manufacture grassroots enthusiasm.

Nokia didn’t invent the idea of astroturfing, but more than any company in the Noughties, it’s taken it to heart.

Nokia’s Ambassador program turns participants into walking billboards – get a phone, and talk about it in the hope someone will hear it. And that’s just the tip of the “social media” iceberg. Never have so many freebies been thrown at so many bloggers – with so little to show for it. For as soon as anyone starts talking (or commenting) about how delightful these products are, you know you’re listening to a paid-for robot. This cheapens everyone.

(We put this down to the corporate equivalent of a midlife crisis.)

Now what a contrast with Apple. Many of you find the Apple cult downright creepy – and it is. But there’s no doubt that the enthusiasm exhibited by fanboys (and fangirls) is genuine. There are few sadder sights in London than the “flagship” Nokia Store on Regent Street, almost directly opposite Apple’s temple.

This gleaming, high budget glass and steel designer affair is an homage to the Apple store on which it’s modelled. Floor and ceiling are silver birch, apparently “inspired by the forests of Finland”.

Only there’s nothing to buy – just a few phones behind museum-style glass cases. Consequently the only humans in the store you’ll ever see are the staff.

The Casio store on Carnaby Street, I noticed this morning, is a-buzz. Do Casio need “social media”? Or do they just make stuff people actually want to buy?

When, a few years ago, I described Sony and Nokia as the only two companies who could call the shots in consumer electronics, a few eyebrows were raised. Sony, yes. But Nokia?

I anticipated that success in smartphones would be a beachhead into a bunch of other consumer electronics markets. Few noticed that Nokia already made TVs and set-top boxes. It had just launched a games console, too.

In fact, Nokia had began planning for “mobile multimedia convergence” in the mid-1990s, when it began sniffing out a next-generation operating system – it eventually opted for Psion’s Epoc, which became Symbian OS. For years Nokia put its best brains on the task – and sat back and waited. And waited.

Believe it or not, the iPhone has become a stealth hit over on this Soggy and Septic Isle. But this should come as no surprise to anyone familiar with the psychology of the British punter.

When the iPhone arrived it here it was greeted with studied indifference. You’ll recall that Carphone Warehouse and O2 stores stayed open late for a stampede that never came.

The splashy launch – and the glee at O2′s discomfort that followed – only seemed to confirm the view that British punters congratulate themselves for being immune to imported hypes.

But this has been overtaken by another aspect of consumer psychology here. More than anything else, British punters love boasting about a bargain. Like tea, it’s something that unites all classes. Even if one must lie about the “bargain” that isn’t a bargain at all – and has just been bought on an already over-extended credit card.

So we shouldn’t be surprised that shortly after Apple’s UK retail partners slashed the price of the 8GB by £100, it had sold out.

Bargain. Innit?

This also confirmed that the iPhone has been more successful as a word-of-mouth hit than it was as sensation-of-the-month. I’ve noticed that the people sniffiest about the product are people who have yet to see a friend using one. The huge and incessant advertising campaign from O2 and Apple may actually have obscured, rather than illuminated, two facts: it’s a pretty decent product, and that people like to use it.

Satisfaction ratings for the iPhone after months of use are far higher than for any other phone – which suggests it’s passed the real world test. For sure, it isn’t perfect – but most of what it does, it does superbly. And yes, it really has got grown men stroking a piece of glass in public.

So we can surmise that so far, this is a piece of kit that has been held back by the exclusive distribution model (the exclusive carrier deals) that Apple has preferred. Fortunately, we’re already seeing this crack, with non-exclusive deals signed in Italy, India and Australia. This means that means rival operators in each market will be prepared to lower the upfront cost of acquiring an iPhone: remember that when you get a phone, you’re essentially getting it on a hire-purchase agreement at a subsidized price, paying for it over the period of the contract. Which means an iPhone will no longer be prohibitively expensive.

Let’s contrast this with Nokia’s fortunes.
Can Nokia still cut it?

When, a few years ago, I described Sony and Nokia as the only two companies who could call the shots in consumer electronics, a few eyebrows were raised. Sony, yes. But Nokia?

I anticipated that success in smartphones would be a beachhead into a bunch of other consumer electronics markets. Few noticed that Nokia already made TVs and set-top boxes. It had just launched a games console, too.

In fact, Nokia had began planning for “mobile multimedia convergence” in the mid-1990s, when it began sniffing out a next-generation operating system – it eventually opted for Psion’s Epoc, which became Symbian OS. For years Nokia put its best brains on the task – and sat back and waited. And waited.

Then there’s another factor: Smartphone Apathy.

I first drew attention to this almost two years ago – when it was evident that Nokia’s vision of convergence was in a lot of trouble. As I wrote in Whatever happened to … the smartphone?.

The smartphone had found a niche with enthusiasts, but most of the potential of an open, flexible device with lots of third party software was ignored by most of the people who had one. Nokia has the volumes in the smartphone market, but it hardly matters.

Pundit Dean Bubley recently drew attention to just how indifferent the public is to this prospect.

All of which must make long-time Symbian veterans wince – it’s not their fault, after all, that their dominant customer keeps churning out products that fail to excite the market.

My particular favourite example of how the iPhone succeeds where Nokia’s S60 fails is their respective Maps applications. With the iPhone, you start typing a name and it will assume that it’s the name of a contact with an address that you’re after. With a minimum of keystrokes, you’re away. It’s so obvious. Yet despite a €7.7bn acquisition of the world’s leading map provider, Nokia still doesn’t provide this deep level of integration, and in keeping with the Spirit of S60, simple things are hard to do.

There’s another reason Nokia is weak where it should be strong.

What are they smoking in the Strategy Boutique?

In a recent blog post titled Nokia goes for 1% market share in the US, analyst Michael Mace gave a damning overview of Nokia’s marketing. As we’ve noted before, this is designed to win over gadget bloggers in focus groups, but looks shockingly bad to your ordinary civilian.

Michael takes apart the “Open to Anything” advertising campaign -

“Once again, Nokia is communicating that its users are freaks and morons, which in the US is not the way to build a loyal following. Nokia has a long habit in the US of positioning itself as the preferred phone of people who lack social skills.”

One great example of this is the “Jealous Computers” site for Nokia’s Nseries phones. This purports to show victims of “attacks” by jealous laptops. Trebles all round at the ad agency.

But of course, laptops aren’t sentient, and don’t attack people. So one must conclude that Nokia Nseries owners have a fetish for self-mutilation:

We’d never thought of “Total Cost of Ownership” quite like this before. While this may go down a storm with the Emo kids, it’s not the way to sell a mass market consumer device. But because it’s dependent on closed feedback loops, or what is fashionably called an “information cascade”, Nokia seems unable to accept this.

(For example, Nokia’s feedback tells it that the N95 is a hugely well-loved phone – but real feedback suggests otherwise. Only a recent flurry of activity by fanboys at the O2 site has dragged the N95′s rating up above mediocre.)

3G prospects

So Apple has simply stepped into a market which was ailing through customer indifference, and rejuvenated it. How will the rivals fare with the imminent launch of the 3G iPhone?

Ominously for the established players, Apple is loosening the carrier restrictions which have held back adoption. Reports suggest it may also lower the price of the older model, to further stimulate the market. All of which means the iPhone is a bigger threat than rivals have realized. When the iPhone is priced similarly to the competition, the quality simply blows them away.

Sony Ericsson, whose investment in UIQ has given it a far richer and friendlier interface than Nokia’s cumbersome S60, looks well placed to capitalise on the renewed interest. It’s given a little bit of “touch” to its new phones, but focussed on how the touch UI can help do a couple of things very well. (Page down to the promo videos, here, and you’ll see what I mean.) But SE has only two UIQ phones announced, so far.

While it’s reasonable to argue that “smart devices” may never become a truly mass market, and will remain niche, Apple has earned its leadership through sheer quality – making rivals looks stupid.

And along the way its strongest potential competitor, Nokia, has turned into a Sony – but not how I imagined. Sony was always a hothouse of viciously warring factions, far keener to kneecap each other than sock it to the competition. Just when the market needs a strong and coherent response, a similar fate has befallen Nokia.

On the face of it, it looked like Web 2.0 had found its “Long Boom” moment. Facebook has yet to turn a profit, so Zuckerberg hardly seems in a position to advise other people how to make money – let alone place himself in a pantheon of historic business greats. In Web 2.0-land, merely “being there” is a substitute for having “made it”.

But then Zuckerberg is no stranger to bluster. This, notoriously, was the 22 year-old who had “I’m CEO…bitch” on his business card.

Behind the calculated bluster were a collection of ideas perhaps equally designed to distract the attention (no pun intended).

Of the three ideas Zuckerberg outlined, one in particular provoked horror and ridicule. It was to turn Facebook users, accustomed to its clean and spare UI, into human billboards. Advertisers could build presences in Facebook – at the moment, you must be a person – giving users the opportunity to “affiliate” with them.

“Users can become a fan of a business and can share information about that business with their friends and act as a trusted referral,” is how the company described it.

“What do the users get in return?” asked the IT commentator Nick Carr. “An animated Sprite Sips character to interact with.”

But Nick is forgetting that this cuts both ways – it isn’t a static picture at all.

Take the example of Stella Artois, which was once a “premium” lager brand owned by brewing giant InBev. In recent years this has acquired the notorious nickname “wife-beater”. This is now so pervasive, that lawyers defending their clients on assault charges refer to the “Stella” defence. Sales fell 10 per cent last year – and it isn’t quite so “premium” any more.

An affiliation is not an endorsement – yet Facebook collects either way. Would Stella’s fall have been accelerated by Facebook affiliation? Almost certainly, for on the web, jeering is the background noise. Only the most delusional marketing person thinks that their brand is in any way enhanced by proximity to the mob – brand advertising is all about keeping a distance. A corporate reputation is like a party frock – it crumples easily.

So shrewder advertising spenders will quickly realize the dangers in such 2.0-style “interactive” engagement and how phoney “conversations” with customers really are – and wisely gravitate towards traditional methods, such as plain ol’ display ads.

Nevertheless, and here’s the rub, they still want to have better, more targeted advertising. And even the slightest improvement helps.

Facebook’s future is much more down to who it lets into the club, rather than anything we heard this week.
Don’t be bluffed by bluster

The picture is far more nuanced than a simple analysis permits.

Because Facebook has wrapped up pretty much every internet application protocol ever invented under its umbrella, it’s the portal the old dotcom portals wished they would be. [MySpace gave us the first hint of this shift two years ago, when we observed that users rarely left MySpace - using it for everything except IM.]

For Facebook today, most of its value is as an email replacement – which represents the balkanization of the internet, with people only talking to people they already know. This is socially dismal, but again, good for advertisers. We’ve also seen a successful example of transactional revenue in the Facebook application iLike, which allows you to buy concert tickets. Others will find a way to persuade the in-Facebook brethren to part with their money.

So it’s worth remembering that there are many businesses within Facebook, and we’re barely at the nebula stage: the star is still forming.

This week reaction to Facebook’s announcement fell into two camps. The cynics saw it as confirmation that Web 2.0 companies were only ever out to screw their users as quickly as possible. The technology utopians appeared shocked – shocked! – that Facebook wanted to monetize its user base at all.

The truth is somewhere in between. Facebook may be far cleverer than we’ve been told this week.