The Chinaization of Apple

Many years ago, when Chairman Mao first met the Dalai Lama, he concluded the meeting by warning the young Tibetan monk that, “Religion was poison”. Last week, with Apple’s revisions to Section 3.3.1 of its Developer SDK agreement, essentially banning non-Apple sanctioned third party development frameworks, and in particular,  Adobe’s Flash compiler for the iPhone, Chairman Jobs has finally completed Apple’s Long March to Chinaization.

Not only does Apple ban iPhone applications that mimic basic functions already offered by Apple’s own iPhone offerings, the Google Voice app being an example of such rejection, but now developers are being told that their actual development tools must exclusively come from Apple. This essentially kills hundreds, if not thousands of applications developed with open source frameworks or third party development tools. It also raises the possibility that Apple will come under renewed European and possibly American anti-trust investigation for what appears to be, at least on the surface, blatant anti-trust behavior.

On the first count, Apple is standing on a very weak legal precedent. Like Microsoft’s argument over ten years ago, that Internet Explorer was irrevocably linked to the Windows desktop, Apple’s claim to exclusivity for it’s iPhone applications is troublesome. The mantra-like rationale being that consumers get the very best applications that meet Apple’s extremely high standards. Surely, however, consumers should be given the privilege to pick and choose between browsers, mail applications and 3G/4G voice tools they wish to use. And surely Apple should not be allowed to cherry pick those applications based on their country of origin (read Cupertino, CA) simply because they are the iPhone OS platform landlord.

Landlords, whether they be of the brick and mortar type or those working in  intellectual property space such as Apple, need to observe rules of commerce just like anyone else. And those rules are clear as illustrated by the European Union’s recent settlement with Microsoft allowing consumers to choose which browser they install in a Windows environment. The principle being that multiple applications within any software category ensure consumer choice. And consumer choice is good since there is a high level of competition which almost invariably results in a higher standard of product quality.

On the second count,  Apple is treading upon anti-trust law. To dictate that only Apple created shovels and pitchforks can be used to build software for the iPhone platform, is preposterous. Again, to return to the Microsoft example, even at Microsoft’s most maniacal anti-trust moments, the company encouraged multiple compiler vendors to make their tools available to developers. Names like Borland and many others could be cited as an example. If Microsoft had gone the extra distance of proclaiming that only their Visual C++ compiler would be the de-facto sanctioned compiler for Windows applications, then U.S. courts and most definitely, the European Union would have quickly interceded.

As the Chinese government loves to remind its critics when reacting to unpopular policies like Internet censorship, jailing dissidents and currency manipulation, they will not allow outside interference in their internal affairs. Chairman Jobs and Apple are making the same argument over application choice and developer tools, but in this case, they just happen to be making these announcements from Cupertino, California which is a problem.

It’s high time, therefore, that Apple come under investigation for its anti-competitive practices to ensure more openness and fairness on the iPhone playing field. To do nothing, will lead to a second cultural revolution whereby programmers, third party framework developers and even open source advocates will be ostracized from competing with Apple and not having their wares available in the App Store. That’s bad for consumer choice and it’s bad for iPhone application development.

Alternatively, Chairman Jobs could move Apple and all its employees to Shenzhen in southern China where the iPhone is actually manufactured to avoid the possibility of any governmental oversight. That would cement Apple’s Chinaization.

“Computers make us software”

A thought provoking piece in the Atlantic Monthly entitled: Is Google making us stupid? has attracted a good deal of media attention.

Almost instantly, a semi rebuttal cum discussion of this piece appeared in the New York Times exploring the hypothesis that computers might not be so good for our mental health after all.

Or put in a slightly different manner, computers are rapidly contributing to global sensory overload. We have become like a sparrow devouring enormous amounts of information yet without the requisite filtration system to retain what is of bodily value. This filtration system, as these authors argue, is based on good old analog thinking encouraging contemplation, discussion and deeper reflection. Instead, such age old skills have been sacrificed at the digital alter in favor of Twitter-like ambient awareness, an ‘on demand’ trivia feast lacking any real redeeming human qualities.

Part of the problem seems to be generational: those who are crying foul are more often than not analog veterans, information warriors of the past who bled to get knowledge somewhere in a university library stack.

Another part of the problem is misinterpretation. McCluhan, the guru most often cited in these discussions, has a doozy of an aphorism to sum up this predicament:

” Computers make us software.”

And as we all know, software is only as good as the human brain that carves it out of silicon.

In short, the media has changed: goodbye paper, hello silicon.

No big deal!

E-COMMERCE REPORT

A Referral Service That Ensures Someone Actually Makes a Sale

By BOB TEDESCHI
ONLINE shoppers who can’t decide whether to pull the trigger on their next purchase may be surprised at a new alternative: an offer to get it free.

The offer is not a swindle, nor is it a return to the insanity of the early days of the dot-com boom, when retailers practically gave away goods in order to attract buzz and customers. Rather, it is a new marketing method that relies on a web of business relationships to give consumers free goods, as long as they buy something else from a long list of well-known online stores.

The idea comes from TrialPay, a company that has recently gained a following among online businesses and investors. Now that the idea is attracting more well-known retailers, analysts said, consumers could see more free offers in the coming months.

“This is a very strange, unique animal, but I could see where it would work,” said Dana Gould, an analyst with Financial Insights, a consultant group based in Framingham, Mass. “And since these offers come at exit points, companies are basically saving lost sales.”

Stopzilla, which sells computer security software for around $40, already offers 15-day free trials for prospective customers. After the trial period, those who go to the site to uninstall the program are shown a pop-up window asking if they would like to receive the product free.

They are then shown a list of companies, including Blockbuster, GameFly and Citi, that have agreed to subsidize the cost of the Stopzilla purchase if the customer agrees to also sign up with them.

If they agree, customers are taken, at that point, to a Web site like Blockbuster or Gap, and when they complete their purchase they are sent a code by e-mail for redeeming their free item. Sometimes, these merchants and other TrialPay advertisers, like Gap and Stamps.com, will sweeten the deal with discounts of their own.

“All three parties benefit,” said James M. Bortnak, the chief marketing officer of Stamps.com. “The consumer gets a sizable and immediate discount on a purchase, advertisers like us find new long-term customers, and the original merchant is more likely to complete a sale.”

Mr. Bortnak said he started using TrialPay’s service in March, after hearing some industry talk about it. He would not disclose details, other than to say it has a “very positive” effect on his business.

TrialPay’s service is a twist of sorts on a longstanding online practice, where merchants offer bounties of 5 to 15 percent to Web sites that deliver paying customers. This so-called affiliate advertising model is popular because merchants spend less to acquire customers. Meanwhile, as long as the customers buy more than an item or two, the merchant earns back whatever bounty was paid.

As the intermediary, TrialPay receives an undisclosed portion of that commission, and it also uses some technological wizardry to determine which free-product offers a prospective customer is more likely to click on.

TrialPay is the brainchild of Alex Rampell, who achieved a measure of fame when, as a 15-year-old in 1996, he wrote a popular software program that allowed AOL users to avoid losing their connections.

Mr. Rampell started TrialPay in 2003 as he looked for creative ways to entice software customers to pay for his products. In the first incarnation of the service, he offered customers his PC-security software free, as long as they signed up for a Netflix account.

“We made more money on that than we did selling our applications, which cost $25,” Mr. Rampell said. “If someone signed up for Netflix, we might make $40.”

The list of merchants who offer free products is heavily weighted toward software companies, Mr. Rampell said, “because almost nobody will pay for software.” Aside from companies like Stopzilla, WinZip and ZoneAlarm, there are roughly 2,500 merchants who now display TrialPay offers to prospective customers, with about 10 signing up daily, Mr. Rampell said. That volume helped increase revenue more than 10 percent, with annual sales likely to exceed $20 million, he added.

Based largely on the strength of those figures, TrialPay said it recently raised $12.7 million in financing from, among others, Index Ventures, an early investor in Skype, and Battery Ventures, which backed Akamai Technologies.

Merchants who make free offers on their site with TrialPay said that after compensating TrialPay for managing the transaction, they must typically squeeze more business out of the customer to generate a profit. Rick Trefzger, vice president of sales for Stopzilla’s parent, iS3, said his company profits on customers it attracts through TrialPay if those customers renew their annual software subscriptions.

Mr. Trefzger said an additional benefit of the service is that it does not diminish the perceived value of his software, as other discount offers might. “It’s not like we’re saying ‘Hey, buy this for less than what you would’ve paid when you first got to our site,’ ” he said. “TrialPay has to follow through with an offer.”

TrialPay is yielding improved dividends as it reaches a broader audience of merchants and advertisers, said Will Hunsinger, general manager of Gap.com. And, he said TrialPay attracts customers who frequent stores, like Blockbuster, that one might not immediately consider fertile ground for Gap shoppers.

“That’s the kicker here,” Mr. Hunsinger said. “You can reach out into the virtual space and find new customers you wouldn’t have otherwise reached. It’s a little different model, which is something we haven’t seen come out of the Valley in a little while.”

Toyota rolls out upgraded fuel-cell vehicle

Last Updated: Friday, September 28, 2007 | 10:06 AM ET

Toyota Motor Corp. unveiled an upgraded fuel-cell vehicle that successfully completed a test run Friday, proving its ability to run a longer distance than its existing model, a move to take a lead in the future power-train technology race.

The latest model has accomplished a total distance of 770 kilometres with a single fill-up, more than double the mileage achieved by Toyota’s existing model, the company said in a statement.

Toyota has been in a race with global automakers, including General Motors Corp., to develop non-gas-emission vehicles. A major challenge in developing fuel-cell vehicles is their limited driving distance.

Toyota, which became one of the first carmakers to obtain government approval in Japan to market fuel-cell vehicles in 2002, said the advanced vehicle is 25 per cent more fuel-efficient than the existing model. It reduces use of electricity for electronic equipment installed in the vehicle, the company said.

In a public road test Friday, two advanced fuel-cell vehicles ran about 560 kilometres from Osaka to Tokyo without refuelling, while keeping their air conditioning on, Toyota said. About 30 per cent of the fuel was unused when they arrived in Tokyo.

Fuel-cell cars are widely viewed as the most promising pollution-free vehicles for the future because they are powered by electricity generated through the chemical reaction between hydrogen and oxygen and emit only water as a byproduct.

Toyota said the company plans to continue its research and development to further improve driving distance, usability at low temperature, durability and cost reduction.

Virtural Worlds: Virtural money?

Source GigaOm:

Here’s some recent Second Life-related news items:

• A development studio based on an SL avatar secured venture funding from a NYC financier.

• A consortium of U.S. government agencies (including the Navy and Air Force) announced plans to develop a substantial presence in SL.

• An international coalition of labor unions is preparing to strike on behalf of Italian IBM workers at the company’s massive SL campus today.

If you’re a successful tech professional with zero personal interest in online worlds, those blurbs probably just provoked a bemused shrug. Even after reading constant rumors that Google (GOOG) itself is creating a competitor to Linden Lab’s user-created MMO, you’re probably still wondering, “But why should Second Life matter to me?”

In full disclosure, I’m writing a book on the subject, so I have a vested interest in replying. And while I’ve already written a lot about Second Life here, Om asked me to back up, and start from the beginning.

So, the brief answer: In a rapidly growing market of online world users, it’s the most successful example of an embodied, dynamically collaborative content creation platform that’s personally and economically transformative, and scalable to the entire world.

That’s a mouthful, so to break it down into individual parts:

1 – Rapidly growing market: By one reasonable estimate, 80 percent of active Internet users will participate in an online world by 2011, a trend largely driven by the young, who define and shape future Net usage. (A separate study forecasts 53% of all kids on the Internet will be in an MMO by that year.)

2 – Most successful: Currently with some 550,000 monthly active users, SL has grown rapidly and with general consistency since 2004 (12 months ago, it only had about 150,000 avid residents.) Yes, other MMOs are larger, but none of them are user-created, a crucial distinction I’ll get to later.

3 – Embodied: A 3D space navigated by user-controlled avatars that are convincing enough to make their owners feel a personal and social investment in the simulated world they’re in. MMO players refer to their avatars as “me”; several studies suggest this perceptual leap is a real phenomenon. When controlling a Second Life avatar, we even unconsciously obey our unwritten rules of eye contact and personal space.

But what’s so special about feeling like you’re in a 3D world? The better question is: what’s so special about words, numbers, and flat imagery? Those are relatively new tools, artificially imposed on a human evolutionary cycle of a couple million years. When we remember the past, plan the future — when we dream — we do so in the three dimensions displayed by our mind’s eye. Communicating information in simulated 3D seems to enhance learning and insight for that very reason: a common sense intuition that some studies seem to reinforce. Of course, other successful MMOs convey this embodied effect, but largely through content created and controlled by the world’s holding company. Which brings us to the next feature:

4 – Dynamically collaborative content creation platform: A medium where online multi-user content creation is updated in real time. SL is often called “a 3D wiki” — an apt analogy. Consider Wikipedia: At first, most entries in the amateur-driven encyclopedia were mediocre; through a networking effect, however, it quickly became an indispensable resource for every type of information. Second Life is Wikipediafying the universe in 3D, not just the real one, but fictional and even conceptual realities, including abstract art and mathematical theorems. Like Wikipedia, Second Life content skews heavily toward Internet culture in all its lovably geeky strangeness. But dismissing it on those grounds is like dismissing Wikipedia because most of its users ( as this search ranking shows) are primarily interested in sci-fi/fantasy/videogames, celebrities, and sex.

5- Economically transformative: SL’s virtual currency (which can be bought and sold for US$) and intellectual property rights to user-created content (which are retained by their creator, even in non-SL projects) are transferable in and out of the global economy. In practical application, this has resulted in movie-makers, fashion companies, and even architecture firms using SL as a prototyping platform for their real-world businesses. The depth and variety of projects that have made the leap from online world to the real world market is unprecedented in other MMOs — or, arguably, in any other web 2.0 platform.

6 – Personally transformative: The striking thing is just who is doing this work, even making a living at it. Often they’re business-savvy homemakers, talented bohemians, physically or mentally impaired people, retirees, tech workers in developing nations, and people who’ve been otherwise kept out of the mainstream job market through real-world barriers that become irrelevant in Second Life. And this is what’s meant by personally transformative: a technology that improves people’s lives in a substantial, profound way. On the macro level, this leverages dormant human capital into the larger economy. eBay (EBAY) is revolutionary because it converted thousands of people into garage-based entrepreneurs and channeled enormous wealth back into the market. Second Life is an eBay of the imagination. (And unsurprisingly, eBay’s founder was an early Linden Lab investor.)

7 – Scalable to the entire world: Last January, Linden open-sourced its client code, and from this flowered a variety of alternate access portals into SL, including Wii controllers, cell phones, and thanks to a 15-year-old female hacker, the web itself. This makes SL a lead contender to become a universally accessible mirror world, where all our physical data is modeled in a dynamic network, an inconceivably valuable resource for scientists, governments, corporations, and beyond. Linden’s stated intentions to open-source their servers would make this outcome even more probable, while transforming the Net itself into a 3D medium.

That’s just the beginning. Many futurists envision a time when 3D printers will supplant or enhance much of our traditional modes of production. Impressive trial runs are already being conducted in Second Life, exporting avatars and other content into the real world — early glimpses, perhaps, of a time when most of our real world goods are developed and produced in the metaverse.

Does the above mean SL itself is an all-bets-on phenomenon? No, because it’s still staggering under scaling difficulties and poor retention rates, while a slew of competitors — Metaplace, Multiverse, HiPiHi, whatever Google’s cooking up, and near a dozen more — are attempting to outgun Linden Lab on their own terms. They’re creating new MMO platforms that’ll also feature avatar-based content creation where users own their IP, and some will probably do it better than Linden is right now. The ferocity of this competition proves one thing: from the market’s perspective, what Second Life originally unleashed is simply not going away.

Moving way beyond small talk

Source: The Boston Globe

http://www.boston.com/business/globe/articles/2007/08/29/moving_way_beyond_small_talk?mode=PF

By Carolyn Y. Johnson, Globe Staff | August 29, 2007

The cellphone world, dominated by giant telecommunications corporations, is colliding head-on with the Internet, where hackers abound and a good idea can grow into a Google — spawning a full-fledged mobile media industry.

The intersection of the wireless world with the Internet’s openness has long been anticipated, but it’s edging closer to reality as new technologies, devices, and consumer behavior finally chip away at the telephone’s long legacy as a device used for talking.

Apple’s high-profile iPhone launch cast a media spotlight on a device that is more handheld computer than phone. Internet giant Google sparred last month with wireless carriers over the rules governing the upcoming auction of radio spectrum, used to carry calls and data. Sprint plans to build its highly anticipated wireless broadband service, called WiMax, in Boston in 2008. And the first Mobile Internet World, an industry conference on the mobile Internet, comes to town this fall.

The activity has created opportunities for a slew of new local wireless start-ups. Mobile media companies in New England attracted $33.5 million in investments in 2005, a number that tripled to $104.2 million last year, according to Dow Jones VentureOne. In the first half of 2007, mobile media companies have attracted $49.5 million in investments in Massachusetts.

“People say that it’s just a novelty now. But when the PC connected to the Internet, it transformed a word processor to a communication platform, to a media platform,” said John Puterbaugh, founder and chief strategist at Nellymoser in Arlington, which takes content from places like Comedy Central and VH1 and mashes it up into cellphone-sized bits of video, audio, and visuals. Phones are now at a place much like the PC was in the mid-1990s, Puterbaugh said, and the Boston scene is rich with a new generation of consumer mobile companies trying to make a business in a largely undefined space.

Established local industry leaders are key to the burst of new activity. Two companies that went public this year build the backbone infrastructure that enables carriers to send network data — Starent Networks in Tewksbury and Airvana in Chelmsford. M-Qube Inc., a Watertown company that built technology to deliver content to phones, was bought by VeriSign for $250 million late last year. Third Screen Media, a Boston company that created a mobile advertising network, was acquired by AOL for an undisclosed amount in June.

But on top of those more established players are start-ups that are so plentiful that the mobile scene is beginning to seem crowded — even as only about 10 percent of cellphone users subscribed to a data plan in the first quarter of 2007, according to Julien Blin of the industry analyst firm IDC.

Many companies offer new ways to get content on a phone — whether it’s mainstream music videos or niche content, like a foodie’s favorite video podcast, and their approaches include everything from working with carriers to trying to reach consumers directly.

Buzzwire, a Bedford company that received $4 million in venture funding, lets people stream podcasts, live radio, video clips, or other content on their phones. Groove Mobile in Bedford is a mobile music company that powers Sprint’s music store and also provides downloads and sharing services to users. Cambridge’s Oxy Systems earlier this year unveiled Phling, a service to allow a user to stream a music collection from a home computer onto a phone. Mobicious, in Needham, raised $4 million in venture backing this year and aims to become the ultimate go-to spot for mobile content — allowing people to search for mobile content and ship it directly to their phones instead of going through carriers’ stores.

“It’s sort of a cross between Google and Yahoo in the early days when they were indexing the Internet; we’re indexing the mobile content,” said George Grey, chief executive of Mobicious.

Already, the cellphone industry has spawned new business — the ringtone industry in the United States was valued at $600 million in 2006, according to Broadcast Music Inc. The content industry is also projected to grow more than 60 percent, from $2.3 billion in the United States last year to $3.8 billion this year, according to IDC. But many believe mobile content will have room to expand further as consumers begin to use phones more like they do the Internet.

Razzberry Sync, a Boston company, creates premium text message content — ranging from beauty and fashion tips for teens to “blitz fiction,” fiction fed to the phone in SMS chapters. And 80108 Media sends insider thumbcasts, including music reviews, event alerts, and news to phones.

Many new companies are also bringing new categories of Web content to phones. Mobile social networking sites, which allow people to tap into their online network of friends when they are walking among people in the flesh, may seem a bizarre concept, but a US study by M:Metrics found that already 7.5 million people, or 3.5 percent of mobile subscribers, use such mobile networking websites.

MocoSpace in Boston has created a social network primarily geared for phones. It says nearly a million people have signed up. RPM Communications is working toward a mobile social network that incorporates voice and sound. This year, the company launched Foonz , a service to quickly set up group conference calls. RPM says Foonz is a stepping stone toward its larger vision of a voice-enabled mobile social network.

Meanwhile, other wireless companies are trying to break the most formidable barrier to cellphone usage — the keypad. Digit Wireless in Burlington integrates letters and punctuation keys onto the keys found on a standard cellphone keypad, and has launched on several handsets used in other countries. Vlingo Inc., a Cambridge company, introduced a beta version of its voice-based cellphone interface this month. Nextcode Corp. in Concord is working on turning a mobile phone camera into a barcode scanner, so users can click a picture of a bar code from a poster or in the pages of a magazine and be directed to a related Web page or get content on their phone.

“People know there’s stuff out there they could be doing with their mobile phones — they just don’t know how to find it,” said Jim Levinger, chief executive of Nextcode. “They’re building out a Wal-Mart-sized amount of content for these stores, but a cellphone has a newsstand-sized interface, and you just aren’t going to buy it.”