Weakonomi¢s » technology

A Warm Thanks To Apple

The Weakonomist — Mon, 30 Jan 2012 15:45:33 +0000

Not much bandwidth is wasted on this blog cheer-leading companies. Especially companies that already have a track record of creating incredible products and generating enormous profits.

Please don’t consider me an Apple fanboy. This post is being written on a Samsung/Windows machine using a Google document and by the time you’re reading this I’ll be in a world of Windows XP and Blackberry. A world I prefer. But between The Sheconomist and me, we’ve owned 4 iPods, 4 iPhones, and a Macbook Pro. These are all Apple products and very rarely have we ever had an issue with them.

Which brings me to my issue. The Sheconomist got me a brand new iPod Nano for Christmas, a wondrous and highly desired surprise. This iPod is touted for fitness types with a built in tool for tracking your jogging and is light enough to not be felt. It even has a convenient clip. Ahh the clip.

There is a problem with the clip. It’s not a manufacturing one but one of design. It doesn’t grip things easily. And just barely a month after I received this prized possession, the clip slipped off my shorts during a routine walk and the following happened.

Tragedy!

An accident, some asphalt, and a heartbroken Weakonomist. Knowing how expensive consumer electronics are I’ve always bought protective cases. My original iPod Nano doesn’t have a scratch on it. Because this device was so small and had a clip, I never bothered to acquire a case for it. As a matter of fact, my local Apple store only sold one case that protected it, and the case was an ugly thing with a carabiner attached to it. Apple appeared to be sending the message this device was durable enough for its intended purpose.

This was the cusp of my plea to my local Apple store for help. Apple is smart, they looked up my account and can see all my activity. This essentially allows them to determine if I’m profitable enough to help out. My service history with them has been zilch, other than a replacement iPhone that was defective. My relationship is profitable to them. And so, much to my delight, they replaced my Nano free of charge!

That last sentence alone sets apart Apple from most other companies I’ve ever had a relationship with. Apple does this for two reasons. First, they’re willing to eat some profit on the hope that I will reward them in the future with more business, which I will. Second, they’re able to price their goods in such a way they can build in the cost of such consumer friendly behavior.

What further sets them apart is their empowerment of the workforce on the ground to make these decisions. Surely a tool probably helps them, but the final decision is likely theirs. I didn’t have to ask for a manager, I just presented my case.

Why aren’t more companies operating this way? Surely Apple isn’t just a diamond in the rough. In some ways Apple is. For too long companies have been focused on short term results. It’s easy to make a chart showing how great margins will be this quarter if we just cut a couple of corners on outstanding customer service. And when profits start to suffer, going the extra mile for the customer is the first thing to go.

For the last decade or so Apple has been able to avoid short-term thinking. Many times the pressure to thin short-term comes from Wall Street, and the late Steve Jobs wasn’t a fan of “the analysts”. Should Jobs’s successor have a similar disdain for the street I would expect such high levels of service to continue. So thank you Apple. I am impressed.

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Weakend: Trusty Mouse

The Weakonomist — Sat, 28 Jan 2012 16:16:15 +0000

I’ve had this mouse for almost nine years now. I remember exactly when I got it. At the time, optical mice were just hitting the mainstream and mine was purchased to go with my new laptop.

In all that time this mouse has lived in 7 places in 4 cities. I’ve bought two wireless mice to replace it twice and they’ve both broken after a year or so. After the last one broke I got out this guy again and decided to keep using him until he broke. The button in the middle stopped working a long time ago but all I care about are the clickwheel and the thumb button (and the left and right clickers).

Untold levels of dirt, grime, coffee, and dust have accumulated on it over time but it’s still going strong. Some things are just built to last. So to you, Logitech mouse, you have my undying appreciation. Here’s to another 9 years.

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In The Future, We Won’t Own Anything

The Weakonomist — Wed, 18 Jan 2012 14:31:44 +0000

Do you remember when you used go to the store and buy music? Then you’d go home, put it in your player and listen to it? Then you would own that music forever or until you lost it moving but it doesn’t matter because you weren’t sure what you were thinking when you bought it in the first place?

You owned that cassette or CD or record and no one could take it away from you. These days, when you want music you might get it from a subscription service. Services exist where you pay $x per month and are allowed to download as much music as you want. The catch is when you stop paying the monthly fee you might lose the music. But even if you buy the music from Amazon’s MP3 store or iTunes, you’re really at the command of the service.

Those “stores” could shut down at any time. Or if they went out of business and could no longer support your library, you might not be able to access the music anymore if you didn’t store it locally. Essentially, you’re kind of renting it.

And with services like Netflix giving you access to movies and TV, you aren’t buying movies much anymore either. Heck, even with the housing bust people are reluctant to buy residences. We’re looking at a future of a lot more rentals. And it’s brilliant.

The children being born today will easily live to see the next century. Though few people will say such things, I think the increased lifespan has lead people to be less commital than their parents were. Divorce rates are higher, we get new phones every two years, and we are as loyal to our employers as they are to us these days. Back when a career was 20 years spending it all with one employer seemed like a good idea, and the employer rewarded it. Now careers can last 40 years and there’s little reward for loyalty.

A future that let’s us rent more and own less is supportive of this change as well. We can pay monthly rates and own things for only as long as we intend to use them. I believe a new service called ybuy believes that as well. For $25 a month you can get all the coolest gadgets. You can try them out and should you decide to buy them the $25 goes towards the purchase. It lets you rent, and you don’t have to commit. They have stuff like espresso machines, iPads, and even golf clubs.

I don’t normally talk about specific companies and this is certainly not an endorsement of ybuy, but new businesses like this that capture our issues with commitment interest me immeasurably. I only expect to see this trend continue, especially over the next decade as we continue to sort out our issues with committing large sums of money to anything.

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The Real Reasons Smartphones Are So Popular

The Weakonomist — Wed, 09 Nov 2011 15:32:44 +0000

The smartphone today is as prevalent as the Motorola RAZR was a few years ago when carriers started giving them away for free. Now tweens, great grandmothers, and even a homeless guy I pass on the way to work have some kind of smartphone.

We say they are so popular because it allows you to stay connected to the outside world. The expense isn’t too bad, especially if by now you’ve given up your landline. I’d rather have my iPhone than TV or a number of other discretionary expenses at this point so I pass no judgment on people of all income levels having smartphones. But let’s be honest with each other, we aren’t getting smartphones because we need them. It’s completely changed what we do in our downtime, but that’s about all it’s done. Few people have practical or professional uses for smartphones. Here’s what I’ve been thinking why smartphones are so popular:

Web history at work: Many workers have access to the internet from work. But, many of the websites people want to visit may not look good in the histories the company IT teams track. Or maybe you spend too much time on the internet and don’t want your employer to know you’re a slacker. Either way, using a smartphone is a way to see what you want to see without the prying eyes of the corporate big brother.

Work inbox: Email is quick and convenient for communication. Most email services are blocked at work so if one wants to communicate with friends or family, they might use their work inbox. But that means your conversations are tracked and followed by the tech teams. Again, the smartphone keeps those eyes away from your lack of productivity and your need to pick up milk on the way home.

Parents hate waiting on their kids: Parents, I don’t know how much of your time is spent on this, but I’ve heard enough to guess this is a big reason for the success of smartphones. Waiting to pick them up from school, soccer practice running late, sitting in the waiting room at the doctor’s office; downtime while the kids finish up used to be filled with books and magazines. Now those books and magazines can be read on the phone, and so much more.

Parents tired of small talk with other parents: Parents may be friends with other parents, but they might not be. But they still have to hang out while their kids play t-ball or swim. The small talk got old and so enter the smartphone. Not only does it help with the boredom, but by looking down you project the image of not wanting to be talked to. Which is kind of the point.

Trying to look busy: More broad than the last category, this is for anyone in any social situation. Having a smartphone used to make you look busy. Now that everyone has one, we know you’re just looking at Facebook. Your phone is there to pretend to look busy so you don’t have a reason to talk. I’m intimately familiar with this one, but have also halfway convinced myself I am busy by answering Weakonomics related emails.

The list is not complete. I want to know why you have a smartphone. If you don’t have one, that’s great. You don’t know what you’re missing and I’m saying that in a good way. If you do have one, fess up to what you really use it for in the comments.

Image: mujitra

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Weakend: I’m Going To Miss Physics

The Weakonomist — Sat, 29 Oct 2011 14:30:11 +0000

NASA is now but a shell of its former self. Relegated mostly to launching satellites and resuming the search for bacteria on foreign worlds. Not that there’s anything wrong with that, but NASA won’t get the kind of pop culture attention it once did. Hopefully the private sector and step up, but the days of hope having the world united around the singular goal of space exploration are gone. Maybe it will come back when the economy recovers, until then, this is likely the last of such awesome videos as this one.

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Weakend: Stuff Siri Says

The Weakonomist — Sun, 23 Oct 2011 14:17:38 +0000

The new iPhone is out and many people have rushed out to get themselves one. Mostly really just to play with Siri, Apple’s new voice-guided assistant that can help you do everything from setting an alarm to the answer of a math problem to composing an email with a simple button press and your words. If you haven’t seen the commercials, here’s Apple’s site where they talk about their latest achievement (acquisition actually).

Being an advanced form of artificial intelligence, Siri is almost capable of having a normal conversation with you. Which means of course that people try to get her to say interesting things. Naturally, there’s already a website publishing some of the responses Siri has. It’s called “Shit That Siri Says” and it’s hilarious. But it’s also quite amazing that Siri understands what we say so frequently, and has interesting responses. While some on this website are kind of crude, they are worth looking at nonetheless. Here are a few of my favorites:

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The Curse Of The Madden

The Weakonomist — Wed, 19 Oct 2011 14:46:48 +0000

Fans of football or video games may be familiar with the the John Madden Curse, but for others I might need to explain. There is a very popular video game that provides realistic football game play called “Madden”. Since the late 90s the game has featured a well known football player on the cover each year. Usually they players that have had a good season the prior year. Perhaps unusually, those players typically suck the next season. In fact, only one player in the last decade hasn’t sucked the season they ended up on the cover: Larry Fitzgerald.

I’ll give you a few examples:

2004: Michael Vick on the cover. Broke his leg before the season even began. His team sucked that year.
2008: Vince Young on the cover. Publicly announced he would be on the cover and that the curse didn’t apply to him. He got hurt and his backup was good enough that Young was benched even after recovery.
2012: Peyton Hillis on the cover. Not only is Peyton not even close to his stats from last year, other Peytons are struggling too. Peyton Manning is one of the league’s best QBs and has been out all season. Sean Payton, coach of the Saints, tore is MCL and broke his leg; and even Hall of Famer Walter Peyton had a book published about him painting the picture of a drug addict with homicidal/suicidal tendencies this fall.

The curse is spreading…

Or is it. They Peyton expansion problem notwithstanding, most of the players featured on the cover of Madden all have a few things in common. They all had good seasons the year before. But we all know past performance is not an indication of future performance. Anyone with a mutual fund is familiar with that. So picking the star from last year doesn’t really guarantee they will be one the next year.

But if you go through the list, and are a big football fan, you’ll notice something else. Most of these guys were relative unknowns before they had a breakout season. Statistically speaking they weren’t likely to have another good season. But, financially speaking, they were also itching to ride the star train while the tickets were cheap. When you get your 15 seconds, you got to play it right in order to turn it into 15 minutes.

There are a number of fantastic football players that have never been on the cover of Madden. For one reason, they don’t really need it. They have their endorsements and sufficient media attention. Being on Madden might be overkill for some players.

The Madden Curse sure is interesting to talk about. However all it is really doing is showing what is very common in football, it’s damned hard to have a consistently successful career. It’s not always the fault of the player, it’s hard for teams to surround a good player with good talent that magnifies how good the star is. Football is also an aggressive sport so injuries are very common. If you’re a player and get a call from EA sports about being on the cover for the 2013 game, don’t be afraid. Whatever is going to happen to you is going to happen anyway. That train may only stop once. Toot, toot.

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Capitalism And Socialism In Your Cell Phone Bill

The Weakonomist — Tue, 18 Oct 2011 14:47:16 +0000

The telecommunications industry has always been a fickle one. They had monopolies, they were broken up, they gradually monopolized again, and face very little competition. They were originally granted monopoly power in order to make it worth their investment in all the telephone poles they had to put up. Nowadays the industry makes more money on cell phones, and the old telecom companies now compete with cable companies for service ranging from phones to TV to the internet.

Looking at the industry you can see elements of staunch capitalism, and gross levels of government intervention. Today, when reviewing my own cell phone bill I saw elements of capitalism and socialism at its finest.

Have you ever seen the fees in your bill? I saw fees for “regulatory cost recovery”, “telecom relay service”, “federal universal service”, “911 service”, and a state sales tax. Within these five fees are some of the purest elements of socialism and capitalism.

Let’s start with the Universal Service Fund. It’s a direct fee that helps support the expansion of affordable telecommunications services all over the country. Sounds like something from the 1920s, but it’s a recent invention from the 90s. It’s basically a fee that the government charges providers, who then charge you, in order to subsidize services for the poor and expand services for the rural and underserved. There’s no better redistribution of income than such a fee. The only problem is that there are probably more cell phones out there now than people so who is really benefiting from this fund at this point?

Let’s switch gears and look at the regulatory cost recover fee. This is capitalism at it’s finest. This is a fee AT&T charges to offset the costs they incur while dealing with the government. So they charge you for the trouble of dealing with the government. AT&T breaks down this fee quite well on one of their product pages here. But I can’t help but laugh that in the midst of all these fees the private corporation has to pay in order to help the disadvantaged or pay for stuff a business just has to pay for, they are allowed to just inject that fee as a line item into your bill.

Could you imagine if every company could just line item fees they have to pay the government into your monthly bill? It’s a good think banks can deduct 50 cents a month from your account to help them pay for all the settlements they’re going to shell out for. Or if BP added 1% on top of the advertised gasoline price to help offset all their losses from the oil spill.

Only with capitalism can we see a highly regulated industry so blatantly force their own customers to pay their for them.

Be mindful that I’m not necessarily complaining about this, I have a choice of service providers and the choice not to have a cell phone at all. But the irony that the government can charge a fee directly to service providers and the providers can charge it to the customer in a line item on the bill is just too funny not to point out.

And let’s not even get started about being charged an ongoing sales tax for cell phone service. I’m not being sold anything.

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Weakend: Steve Jobs’ Commencement Speech At Stanford in 2005

The Weakonomist — Sat, 08 Oct 2011 13:49:53 +0000

I heard from someone this week that Jobs was first and foremost a philosopher. That person has probably watched this. Related posts:Apple CEO Steve Jobs’ Health Sparks Fascinating Debates For Investors Or Maybe This Is When Jobs Will Return Too Many Government Jobs Related posts brought to you by Yet Another Related Posts Plugin. Related posts:

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In Remembrance

The Weakonomist — Thu, 06 Oct 2011 14:38:11 +0000

Just a little over a month ago, Steve Jobs stepped down from Apple. That was such a significant event that I chose to cover it on Weakonomics. As many thought, it was unlikely for him to step down unless he was suffering some pretty serious health problems. We now know just how serious it was, that’s all I’m going to say about that.

Most people understand that Jobs was responsible for some cool technology. The iPod, iPhone, and iPad are of course the most recognizable. What most people don’t understand is that his impact goes much further beyond a couple of toys.

First you need to understand what happens to an industry when a company releases a product. Most of the time, nothing. Apple has changed probably a couple dozen industries. With the iPod and iTunes Apple was able to create real competition for CD stores, while at the same time still getting artists paid. The recording industry at first embraced iTunes but in the last couple of years have sought to try and bring it down by partnering with other digital distributions like Amazon. But iTunes and Apple continue to bully the music industry now with new streaming services.

The same happened when Apple released the iPhone. No one really expected it to succeed, mostly because it was expensive as hell and the only interesting thing about it was the touch screen. But here we are now and everyone is playing catch up to the iPhone. The tablet market is so dominated it’s not even worth talking about. Apple even turned the retail store industry on its head.

Nowadays Apple is in the publishing business too and if you’re willing to pay for the entire ecosystem, they have a seamless environment where everything syncs up behind the scenes you have technology with very few hassles.

But that alone isn’t what makes Steve Jobs special. What does is the fact that he ruled this company with an iron fist. If you’ve ever worked for a large company you will know how hard it is to get anything done. For all intents and purposes, Steve has steered a ship that almost always gets things done. Very few customers are ever disappointed, even after paying much more for their products and competing manufacturers and software providers.

Business schools study him, technology nerds and MBAs alike want to work for him, and Apple is the most valuable company in the world. I mean the man went to a lunch with Obama and the heads of other tech companies and still rocked a turtle neck. How many people wear a turtle neck to go have lunch with the president?

I’ve been a PC/Windows guy for most of my life. I learned how to use a computer on an Apple, and I’ve been very happy as an iPhone customer. The simple fact of the matter is that Steve Jobs forced every other company to make better technology in order to keep up with Apple’s 12 month product cycle; this is true whether you like the company or not. Your technology is better because of him. He made everyone in the world rethink how they look at technology. He made business leaders rethink the way they run their own companies. He made the world better, and he didn’t do it by giving away his wealth. Though he may have given away some of it anonymously.

Steve Jobs is one of the most important people of this century. To lose him is not a tragedy on the scale of war, or poverty. But he’s a symbol, an icon, and still probably had a lot more to give to the world.

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