Friday, October 20, 2006

You can trust me now

I'm free from potential conflicts of interests as I've closed my positions in Apple and Google. Sad, but not a bad time, right. Apple still didn't revise the their earnings to take into account the options irregularities, but oh well. No more silly half-hearted disclosures like "the author of this article owns shares of the aforementioned company".


Cogito said...

A nice move to close the positon of Apple.

Before the take-over of youtube, i see Apple as bright as the sun; however when gootube comes to be truth and G has agreements with major music Inc...sooner or later, music/video in gootube must be availalbe to download to some devices LEGALLIY.

Hence, the story of ipod approaches its end.

Will said...

Cogito, thanks, but I disagree about the impact of the YouTube deal with record companies. While the content producers have a lot to gain from iTunes sales, Apple mostly benefits when iTunes makes iPod look good. Secondly, strong Mac sales suprised analysts this quarter in the face of slowing iPod growth, so we might be seeing the halo effect where iPods helping Apple sell Macs.
Finally, iPod has sold so well (and from what I read at substantially higher margins) when Apple hasn't introduced a major upgrade in about a year. This goes to show that music has still been the name of the game and that their market segmentation (hat tip to you) is effective. The best selling iPod is the nano, which doesn't play video.

Going forward, I do share your concerns that iPod will run out of steam, but better a soft landing buffered by improving Mac sales. If you look at all the patents they have out for the next video iPod, or the fact that Vista might make customers think a little harder about switching to Mac, or their new initiatives in media and iTV, I'm very optimistic.

Cogito said...

Suppose the model youtube running can keep running, (meaning that they need not be on court with Safe Harbor Provisions being tested), then the implicit meaning is that google successful liaised with the records.

I would suggest a model that Google asks the users to flag their uploads as copyrighted materials, or any users could flag a video/sound as copyrighted. Then google pays the records for a sum correlated to the amount of views with the flagged uploads. The revenue, of coz, comes from the ad we clicked, and will be greater than what itunes should generate.

What could be better if someone pays the music I play? We would pay no a penny to google or the records, but enjoys music/video legally. Then, why should we pay 99cents at itunes shop? And further, if a device is invented to download from youtube easily and free, I am wondering how beauty the next nano should be to keep us addicted to its appearance.

Well..but if the first assumption comes into trouble, it will not only hurt youtube, but google is a target as it does have the money and is therefore worth to be sued.

For video, I would say it is sth that can be shared among friends. I mean, I can laugh with a girl together for a video playing on my device, when we are waiting in the underground. But it is hard to share music. Video is definitely an area Apple should work more on for ipod; otherwise, producers in S Korea will hit Apple some day. As an observation, PSP is very popular here in my city, as popular as iPod. And it is mainly used to play video/movie/mtv, rather than playing games. I dun have one just because I think PSP is too large.

I agree that ipod help the image of Mac; Macbook is too good-looking. Plus, it runs Windows and so even a thirty something asked me if Macbook is a better choice.

P.S., someone from Taiwan claims that a OEM company there received order from Apple to produce so called “iPhone”. So…let s wait from what is coming out from Steve’s pocket.

Will said...

The more I think about the YouTube deal, the more I wonder about the stated justification. Google bought $1 billion worth of equity in AOL to keep them using Adsense. Maybe Google did the same thing in the case of YouTube with an added bonus for a "common mission" to organize the world's information. They just happened to end up owning the company now. Nevertheless, not a bad company to own.

So far, I don't think there's a huge difference in Google and Apple's models. They both need content to draw in customers and to do that they have to keep producers happy. That means DRM or advertising. I'm not sure people will embrace advertising for music, though.

Even if they converged, Google and Apple don't necessarily have to be on a crash course. Afterall, Eric Schmidt is on Apple's board of directors. One of the coolest things about Google Video right now is the ability to easily download to iPod/PSP feature for free videos. It would be cool to have that in YouTube. This feature isn't offered for premium content that contains commercials or costs money because they'd lose control. Too bad it's be too unlike Google to embrace a proprietary third-party DRM scheme like Apple's FairPlay. And, too bad Apple won't license it to anybody, or support other DRM on iPod. Who'll give to make it a better world /: ) And, yeah, then there's iPhone. If iPhone is connected to the internet, would they block YouTube?

Ethan said...

Still think you made good decisions in closing AAPL and GOOG?

Will said...

It was close or pay some money to transfer the stock to another account... Sure, I wish I still had Apple and Google : )