Saturday, May 25, 2013

Free The Press: Indiegogo campaign to raise $660M to buy The Tribune Company

Free The Press is an Indiegogo campaign, sponsored by The Other 98%, aimed at raising enough money to buy The Tribune Company.

So, okay, I'll admit there's something about this that smells slightly fishy. There's no mention, anywhere that I could find, exactly what they intend to do with The Tribune Company should they succeed in buying it. Will contributors to the campaign become stockholders? It seems not. More likely they'd set it up as a private, non-profit corporation, but that's speculation on my part.

Nevertheless, I hope they do succeed. Whatever they have in mind, even if it is to set the staff of The Other 98% up as the The Tribune Company's new board of directors, has got to be better than the alternatives mentioned in the featured video.

If this succeeds, maybe we could start a campaign to raise enough money to buy Monsanto.

I wish I could afford to kick in a million or two.

Monday, May 20, 2013

Something to Yahoo! about

Marissa Mayer is swinging for the fences. First we hear about Yahoo!'s acquisition of Tumblr, then, almost as a footnote, we learn that Yahoo! property Flickr is undergoing a major facelift, which includes a full terabyte of space for each user!

Apple's position on corporate taxation

As expected by anyone with more than half a brain, Apple has not been engaging in tax evasion, here or anywhere else, and only seeks to avoid paying the full U.S. corporate tax rate of 35% on funds earned and already taxed outside of the country, just to be able to bring those funds here. Quoting from Apple's official position document, Current US corporate income tax law severely discourages the use of these funds in the US by imposing a 35% tax on repatriation. Having been singled out for criticism on this issue, Apple is taking advantage of the platform they have been handed to push for corporate tax reform. The company's official position is available as a PDF.

Update: The Senate Permanent Subcommittee on Investigations has issued a report which tells a very different story, and for which that committee is very likely to soon be sorely embarrassed, as the weight of public opinion shifts behind Apple.

Sunday, May 19, 2013

Apple needs to grow a parent company

Apple has a branding problem. No, there's nothing wrong with the brand "Apple" as currently used. The problem is that it isn't pliable enough to encompass new businesses the company might want to get into. To solve this, Apple needs to become the wholly owned subsidiary of its own parent company, which would initially be nothing more than a shell for the company as it currently exists, but that would change as new businesses were added.

Call it Pome, if you like, or Rose, both of which are generalizations of "apple" in botanical terminology, or find some other name that projects Apple's approach to business without its product category limitations, and, to give it an immediate reason for being, move Filemaker out from under Apple, giving it sister company status.

A rule of thumb might be that any operation with something to sell independent of the Apple product supply chain should be moved in this manner. This might include Apple's IC design operations, if, for example, they were to decide to sell older designs into the microcontroller market. It would also facilitate the acquisition of companies with existing businesses representing more than a small fraction of their value, businesses that didn't fit Apple but which it wouldn't make good economic sense to shut down, while easing the problems associated with being assimilated into Apple's corporate culture – specifically including the dissatisfaction experienced by ambitious key personnel, resulting from the transition from having creative control to working in service of some personally less-compelling purpose.

It would also provide a framework for spinoffs, businesses based on technologies developed internally, with greater potential than could be realized within the context of the role they might play in Apple's product line, and which, in some cases, would need a degree of independence in order to provide Apple with the greatest benefit, for example proposed industry-standard technologies.

The logistics of such a change are conceptually rather simple, although I have no doubt the details would be anything but. Convert all of Apple's current stock to stock in the new parent company, convert the Board of Directors to being the board of the new parent company, and allow Tim Cook to serve as CEO of both Apple and the parent company, at least to start with. This would require approval by the shareholders and from the SEC, no doubt, but being a value-neutral change intended to reposition the company for further growth, neither should be a problem.

Given this new arrangement, the board might find that it has better things to do with the company's liquid assets than to buy back stock.

Saturday, May 18, 2013

Wednesday, May 01, 2013

Apple's new core competencies, and where they lead

Back when Steve Jobs had just resumed control of Apple, as the iCeo (‘i’ for interim), the focus was on trimming back speculative projects and making the company concentrate on its core competencies, which, at that time, meant Macs – two desktop lines, one consumer and one professional, and two laptop lines, also one consumer and one professional.

A lot has changed in the meantime, Macs included, and Apple has a whole new set of core competencies. These include materials, fabrication methods, automation, radios and antennas, solid state storage, integrated circuit design, operating systems, APIs, development and application software, natural language comprehension, cloud storage, and powerful encryption. They also have an experienced and adaptable supply chain, a large and growing distribution network, and stellar customer satisfaction.

So, looking at this collection (and even this list is incomplete), what can we conclude about where Apple is headed?

First, Apple is too heavily invested in hardware to become a company that only concerns itself with software. If there was ever a time when such a move was under serious consideration, those bridges have long since been burned. If anything, Apple is now more of a hardware company than it was a decade ago.

On the other hand, Apple gains too much advantage from its software and services ecosystem to let that go. The pairing of apps and online businesses is a cash cow, from which Apple has gained a huge amount of experience, experience that is now being applied to building out their iCloud services. Remember iTools? Apple hasn't pushed their online services through four iterations – iTools, .Mac, MobileMe, and now iCloud – just because they were bored with the names. Sure, they were a little late getting into this game and haven't executed in the same deft manner as they do with hardware and operating systems, and really they have yet to broadly succeed in the social space. But they continue to try.

It's notable that we haven't yet seen a series of acquisitions. Apple could easily afford to pick up a few social internet operations, cobble them together, and integrate them with iCloud. That they haven't done so might be taken as an indication that it just isn't that important to them. Alternatively, you can interpret it as meaning that they won't be satisfied with anything not developed in-house, to Apple's exacting standards. Considering how visibly embarrassed Steve Jobs was by the awkward roll-out of MobileMe, I lean toward the second interpretation. If they were to acquire one-to-several such companies, that would be a clear indication of their intention to stake out a significant piece of the social pie. Meanwhile, iCloud has several hundred million active users and is growing rapidly, meaning that even services only available between iCloud users can no longer be taken lightly. Given sufficient intrinsic value, iCloud may begin to gain converts, corporations and associations as well as individuals.

Apple's design prowess and its family of closely-related, scalable operating systems make it rather simple for the company to prototype new devices, not only in categories we already associate with the company but of practically any sort whatsoever. Taking the device to market is another matter. Apple's brand more easily stretches to encompass some new additions to the product family than others.

Moreover, Apple doesn't have much experience with moving parts. There was the arm on which the display was mounted, for the second major iteration of the iMac, but aside from that the only examples of mechanical design from the company are hinges, clasps, switches, including keyboards, and the SIM drawer in iPhones and cellular iPads. Other examples, like the trays in early optical drives and the active insertion that came later, were designed and built by suppliers. Of course, as with IC design, Apple only stands a few acquisitions away from possessing leading-edge mechanical design skills, so we can't eliminate products with moving parts from consideration.

The biggest question is where the market opportunities in closest conjunction with Apple's existing competency set lie. There have already been open hints that they are getting into the wearable computing business, which is likely to mean more than just an iWatch, even though that by itself should prove very profitable. They may also have something comparable to Google Glass in development. Wearable augmented reality, a VR layer over physical reality, especially if it is unobtrusive enough to be worn routinely, should prove to be huge market. The potential applications are endless.

But even the wearable market will sooner or later begin to feel limited. To continue to grow, Apple must find markets beyond gadgets, and the sooner they lay the groundwork for this the better. One such possibility is 3D printing. Apple could buy their way in, acquiring a user base so long as they maintain those relationships without significant disruption, and begin to push the technology (for example printing circuitry as well as structure). Combined with support in Xcode for programming common microcontrollers, this would, in short order, endear them to the hobbyist community, with moderate investment and minimal risk. And as those hobbyists generated designs worth producing in larger numbers, that would drive demand for the 3D printing equipment. And, so long as that equipment was up to Apple's usual standard of quality, it would act to stretch the brand without distortion or dilution.

And, really, that's the trick for all of us, to find ways of growing with integrity, without sacrificing who we are.