Posts Tagged ‘Apple’

Dark Side Arises for Phone Apps

June 4, 2010

Dark Side Arises for Phone Apps
Security Concerns Prompt Warnings

By SPENCER E. ANTE

As smartphones and the applications that run on them take off, businesses and consumers are beginning to confront a budding dark side of the wireless Web.

Online stores run by Apple Inc., Google Inc. and others now offer more than 250,000 applications such as games and financial tools. The apps have been a key selling point for devices like Apple’s iPhone. But concerns are growing among security researchers and government officials that efforts to keep out malicious software aren’t keeping up with the apps craze.

In one incident, Google pulled dozens of unauthorized mobile-banking apps from its Android Market in December. The apps, priced at $1.50, were made by a developer named “09Droid” and claimed to offer access to accounts at many of the world’s banks. Google said it pulled the apps because they violated its trademark policy.

The apps were more useless than malicious, but could have been updated to capture customers’ banking credentials, said John Hering, chief executive of Lookout, a mobile security provider. “It is becoming easier for the bad guys to use the app stores,” Mr. Hering said.

Unlike Apple or BlackBerry maker Research In Motion Ltd., Google doesn’t have employees dedicated to vetting applications submitted to its Android store. Google said it removes apps that violate its policies, but largely relies on users to alert it to bad software. “We check reactively,” said a Google spokesman. “There is no manual bottleneck.”

As more companies, governments and consumers use wireless gadgets to conduct commerce and share private information, computer bad guys are beginning to target them, according to government officials and security researchers.

Read the rest of the story here.

Macmillan CEO Fires First Shot in eBook War Against Amazon.com

January 31, 2010

Th eBook War has begun.

On January 30, Macmillan CEO John Sargent took the unusual step of going public in his company’s dispute with Amazon.com. To explain why Macmillan’s books were taken off of the Kindle and Amazon.com, Sargent took out an advertisement in Publishers Lunch, an increasingly influential blog that covers the publishing industry.

The heart of the war is increasing tensions between publishers and Internet retailers such as Apple and Amazon over the pricing of books in the digital age, an issue that I focused on in my BusinessWeek feature, eBooks: Averting a Digital Horror Story. Amazon has deeply discounted ebooks, typically charging $9.99, and sometime going as low as $7.99. However, publishers don’t take a loss. They are typically paid about half the hardcover’s retail price, whether a digital book or hardcover is sold. But Amazon has been pushing to pay them less, and many publishers think cheap digital books undervalue their product and will open the door to lower industry revenues in the future.

That’s the problem that Sargent tackled in his note. In the ad, Sargent proposes moving to a different business model in which publishers set the price of ebooks and split the revenue with retailer, with the publisher keeping 70%, and 30% going to the retailer.

This is precisely the type of business model and revenue split that Apple is reportedly offering publishers who offer ebooks on its new iPad tablet computer. The growing battle between Amazon and Apple over digital content distribution is going to be one of the most important tussles of the Digital Age. It will shape the future of electronic culture. This is just the beginning.

And publishers should be careful what they they wish for. Many publishers are worried that Amazon will end up with the same kind of pricing power in books that Apple has in music, and that the book industry will suffer the same kind of bruising decline. Now, with the iPad, they are clearly trying to use Apple as a wedge in that fight. But as Tim O’Reilly told me, Apple could very well end up being the dominant player in ebooks.

One reason: More than 50 million people have the company’s iPhone or iPod Touch, which can be used to read digital books, compared with just four million who have electronic book readers. O’Reilly says his company is generating far more sales from Apple customers than Kindle users. O’Reilly currently offers 500 books on the iPhone, compared with 350 Kindle titles. Another 500 iPhone titles are in the works. the iTunes/App store and the iPad.

Whether one company will end up benefiting content providers more than another over the long run is the big question.

Check out Sargent’s letter:
Editors’ note: This message ran as a paid advertisement in a special Saturday edition of Publishers Lunch

To: All Macmillan authors/illustrators and the literary agent community
From: John Sargent

This past Thursday I met with Amazon in Seattle. I gave them our proposal for new terms of sale for e books under the agency model which will become effective in early March. In addition, I told them they could stay with their old terms of sale, but that this would involve extensive and deep windowing of titles. By the time I arrived back in New York late yesterday afternoon they informed me that they were taking all our books off the Kindle site, and off Amazon. The books will continue to be available on Amazon.com through third parties.

I regret that we have reached this impasse. Amazon has been a valuable customer for a long time, and it is my great hope that they will continue to be in the very near future. They have been a great innovator in our industry, and I suspect they will continue to be for decades to come.

It is those decades that concern me now, as I am sure they concern you. In the ink-on-paper world we sell books to retailers far and wide on a business model that provides a level playing field, and allows all retailers the possibility of selling books profitably. Looking to the future and to a growing digital business, we need to establish the same sort of business model, one that encourages new devices and new stores. One that encourages healthy competition. One that is stable and rational. It also needs to insure that intellectual property can be widely available digitally at a price that is both fair to the consumer and allows those who create it and publish it to be fairly compensated.

Under the agency model, we will sell the digital editions of our books to consumers through our retailers. Our retailers will act as our agents and will take a 30% commission (the standard split today for many digital media businesses). The price will be set the price for each book individually. Our plan is to price the digital edition of most adult trade books in a price range from $14.99 to $5.99. At first release, concurrent with a hardcover, most titles will be priced between $14.99 and $12.99. E books will almost always appear day on date with the physical edition. Pricing will be dynamic over time.

The agency model would allow Amazon to make more money selling our books, not less. We would make less money in our dealings with Amazon under the new model. Our disagreement is not about short-term profitability but rather about the long-term viability and stability of the digital book market.

Amazon and Macmillan both want a healthy and vibrant future for books. We clearly do not agree on how to get there. Meanwhile, the action they chose to take last night clearly defines the importance they attribute to their view. We hold our view equally strongly. I hope you agree with us.

You are a vast and wonderful crew. It is impossible to reach you all in the very limited timeframe we are working under, so I have sent this message in unorthodox form. I hope it reaches you all, and quickly. Monday morning I will fully brief all of our editors, and they will be able to answer your questions. I hope to speak to many of you over the coming days.

Thanks for all the support you have shown in the last few hours; it is much appreciated.

All best,
John

Tablet Mania: Why The Tech Industry Thinks Their Time Has Finally Come

January 22, 2010

Here’s a story I wrote that gives some perspective on the long and mostly disappointing history of tablet computing.

The Next Big Thing, 20 Years Later
The tech industry thinks the time is right for tablets, thanks to lower prices and friendlier features

By Spencer E. Ante

If there was a land of misfit gadgets, the tablet computer would be one of its oldest residents. The tech industry, though, refuses to give up on these slate-like portable PCs. Tablets from Hewlett-Packard, Dell, and others were some of the stars at this month’s Consumer Electronics Show in Las Vegas, while the buzz around Apple’s long-awaited entry into the market, due out this spring, is already deafening. “The industry understands better how people can use tablets,” says Roger Kay, president of Endpoint Technologies Associates.

Yet PC makers have been trying to sell consumers on the utility of tablets for decades—with little success. In 2001, Microsoft Chairman Bill Gates predicted that tablets would be the most popular form of PC sold in the U.S. within five years; in 2009, they made up less than 1% of the market, according to estimates from research firm IDC.

The first generation was doomed by a combination of big price tags, short battery life, and clunky interfaces. Tablets’ capabilities have since evolved, as have the tastes of consumers. Portability is paramount, and the latest crop are lighter, boast longer battery life, and better screen technology. Software is more sophisticated, too, and Web connections have improved. “The timing is right for this,” says Philip McKinney, vice-president and chief technology officer of HP’s Personal Systems Group. “We wouldn’t go into a market that we felt wasn’t going to be widely adopted.”

Read the rest of the Bloomberg BusinessWeek story here.

Exclusive: Apple in Talks with McGraw-Hill, Hachette over Tablet

January 22, 2010

Apple in Talks with McGraw-Hill, Hachette over Tablet
The maker of the iPhone is discussing ways to include McGraw-Hill and Hachette e-book titles on its tablet, due to be introduced Jan. 27

By Spencer E. Ante

Apple is in talks with the McGraw-Hill Companies and Hachette Book Group to include educational and trade titles on its planned tablet computer, according to people familiar with the negotiations.

McGraw-Hill Education, the third largest educational publisher in the U.S. by sales, is discussing getting electronic textbooks and parts of its online learning system onto the tablet, say two people. Apple has also held talks with trade book publisher Hachette Book Group about distributing e-books on the tablet, says one person involved in the discussions.

Apple’s tablet, due to be introduced Jan. 27, is likely to feature content from a wide range of book, magazine, and newspaper publishers, as well as entertainment. “Everyone is expecting e-book capabilities and services,” says Roger Kay, president of Endpoint Technologies Associates. “This generation of tablets is all about the consumer and media consumption.” As it has pushed deeper into consumer electronics, Apple’s strategy is to combine cutting-edge hardware design with access to music, video, games, and other applications.

The company’s interest in educational content underscores the longstanding popularity of Apple products among schools and institutions of higher learning.

Read the rest of the story on Bloomberg BusinessWeek.

The Coming E-Reader Shakeout

January 12, 2010

Fresh from his first Consumer Electronics Show, here’s my colleague Doug MacMillan’s new story about the growing number of electronic reading devices:

Johnny Makkar is intent on buying a digital book reader. Yet he won’t consider any of the more than two dozen new devices introduced in recent months, many of them at the just-completed Consumer Electronics Show (CES) in Las Vegas. For Makkar, a resident of Fairlawn, N.J., with a background in marketing, only two manufacturers will do, and one has yet to unveil a reader. “I want the e-book buying process to be as effortless as possible,” says Makkar, 26. “Only Apple or Amazon are going to be able to provide that.”

Standing out may prove challenging for many new entrants to the market for e-readers, expected by Forrester Research to double to 6 million devices this year. “Half the e-readers that have been announced [at CES] won’t be around a year from now,” says Forrester analyst James McQuivey.

Click here to read the rest of the story.

Inside Amazon.com’s Love-Hate Relationship with Book Publishers

January 4, 2010

e-Books: Averting a Digital Horror Story
Amazon.com’s growing might and the sizzling success of the Kindle has publishers terrified. Hachette, Harlequin, and others are fighting back

By Spencer E. Ante

On Christmas Day, for the first time in its history, Amazon.com (AMZN) sold more digital books than the old fashioned kind. It was a watershed moment for the book industry—but it’s scaring the hell out of traditional publishers. Even though they make the same amount on sales of both kinds of books, they see Amazon’s digital dominance as a looming threat to their business, and with good reason. Their big worry: Amazon will end up with the same kind of pricing power in books that Apple has in music, and that the book industry will suffer the same kind of bruising decline.

One goal for publishers is to dilute Amazon’s power. Hachette is selling e-books through more than a dozen partners, including Sony, Apple, and small retailers such as Fictionwise. By partnering with multiple outlets, publishers hope to regain control over pricing and gather purchasing data that could fuel future sales. They’re unhappy Amazon has dropped the price of some new digital best-sellers to as little as $7.99, compared with $35 for hardcovers. Hachette and Simon & Schuster plan to delay the release of certain digital books for several months to avoid undercutting the sale of best-sellers. “We are giving away the family jewels,” says David Young, chairman and chief executive of Hachette Book Group, which publishes authors Malcolm Gladwell and Walter Mosley.

Publishers are typically paid about half the hardcover’s retail price, whether a digital book or hardcover is sold. But Amazon has been pushing to pay them less, and many publishers think cheap digital books will open the door to lower industry revenues in the future. Amazon, for its part, says publishers’ concerns are overblown. “We are selling a lot of books for publishers. We feel like that relationship continues to be a good one,” says Ian Freed, Amazon’s vice-president for the Kindle business.

Read the rest of the feature and see pictures here at Businessweek.com

Exclusive: Verizon Wireless Prepares for the iPhone

December 18, 2009

Verizon Wireless Prepares for the iPhone
Verizon Wireless is buttressing its network in the event Apple drops AT&T as the exclusive carrier of its popular smartphone

By Spencer E. Ante

There’s no telling yet whether or when AT&T (T) might lose its position as the sole U.S. carrier of the Apple (AAPL) iPhone. But in the event Apple opts to partner with other mobile-phone service providers, Verizon Wireless says it’s up to the task.

Verizon Wireless has even made upgrades that would make its network more capable of handling extra traffic that would be generated by the iPhone, Verizon Wireless Chief Technology Officer Anthony Melone says in an interview.

“We have put things in place already,” Melone tells Bloomberg BusinessWeek. “We are prepared to support that traffic.”

AT&T has come under fire for the spotty performance of its network. Vexed by dropped calls and slow download speeds, some consumers say the company was unprepared for the surge in traffic that’s resulted from iPhone use. Verizon Wireless in TV commercials has mocked AT&T’s network coverage, and Melone says his company’s equipment would do a better job catering to the heavy data demands of iPhone customers. “Absolutely, I think we could handle it,” he says.

Read the rest of the BusinessWeek story here.

Verizon: Who Needs the iPhone?

October 29, 2009

Verizon: Who Needs the iPhone?
To stay ahead of AT&T and Apple, Verizon is placing a big bet on Android smartphones and other new gadgets

By Spencer E. Ante

Can Verizon Wireless keep its spot as the leading wireless company in the U.S. if it doesn’t have the industry’s hottest phone?

Lowell McAdam, the company’s chief executive, is trying to make the case that it can. Two years ago, Verizon Wireless passed on the chance to become the exclusive U.S. distributor of the Apple (AAPL) iPhone and pushed Apple into the arms of rival AT&T (T). Since then the iPhone has become a megahit, helping AT&T close the gap with Verizon. In the most recent quarter, AT&T added 2 million wireless subscribers, bringing its total to 81.6 million, while Verizon Wireless added 1.2 million, for a total of 89 million.

Now, McAdam is launching a slew of products designed to keep Verizon ahead. In the fourth quarter the company is rolling out its largest new-product lineup ever: 14 devices, vs. half that number a year ago. Among those will be two netbooks and five smartphones, including the Droid phone from Motorola (MOT), a sleek device with a touchscreen and keyboard that runs on Google’s (GOOG) Android operating system. The new products are backed by an unusually aggressive marketing campaign. In one TV spot, Verizon takes direct aim at Apple with a series of “iDon’t” quips that explain all the things an iPhone can’t do. “The Droid can compete head to head” with the iPhone, says John Stratton, chief marketing officer of Verizon Wireless.

Check out the rest of my BusinessWeek story here, along with a video of me discussing the Droid launch. We’ve already got 44 comments on the story. Join the fray!

Behind the Droid Lauch: A New Motorola?

October 28, 2009

Who was the big winner of today’s much-hyped Droid launch?

Sure, the warm reception that the new Android-based smartphone is receiving is a big win for all of the parties involved: Verizon Wireless, Motorola and Android-maker Google. (Personally, I was impressed by the phone, and thought it represented a nice package of features, design and functionality.)

And the stock market seemed to agree. Today, Verizon’s stock was up nearly 3% and Motorola’s stock was up 1%, while the Nasdaq tanked nearly 3%. Google fell about 1.5%. And Apple took a hit, falling 2.5%.


[Verizon Wireless Chief Marketing Officer John Stratton and Motorola co-chief executive Sanjay Jha hold up the new Droid cell phone.]

But I’d venture to say that Motorola was the big winner, if only because the company was in such desperate need of a win. After all, the cell phone biz is a hits-based business. A best-selling product can reverse a company’s fortunes quickly, as Motorola has seen first with its popular StarTAC, and then with the Razr line of devices.

Since Motorola has bet the farm on Android, technologists and investors would have lost a whole lot more confidence in the company’s ability to manage a turnaround if it blew this launch. There was so much at stake with Droid that they had to nail it, or come close to nailing it.

At today’s unveiling at the W Hotel in New York City, Verizon Wireless Chief Marketing Officer John Stratton went out of his way to pump up the fallen icon. “This is a new Motorola,” said Stratton. “We took a chance, some would say a big risk at this early stage in their turnaround. But I am delighted at the level and quality of work. We will continue to work with Motorola.”

Motorola co-chief executive Sanjay Jha, who seemed nervous at first, grew more comfortable as the event wore on and the media got their hands on the devices. Next year, Jha said Motorola would release at least 20 Android-based handsets. The strategy, he said, is to offer more smartphones for the lower end of the market, as well as selling more devices around the world. “Android is evolving faster than any other platform,” said Jha.

For now, though, Jha was all about the Droid, claiming it was the world’s best current smartphone.

Stratton agreed wit Jha’s assessment, arguing that the Droid could “compete head to head” with the Apple iPhone. But he acknowledged that consumers would be the ultimate judge. “The market will tell us how well we did,” said Stratton.

Verizon Still Wants the iPhone (Despite those Droid Ads)

October 26, 2009

Despite a recent slew of negative ads dissing the Apple iPhone in support of Verizon’s new Android-based device, Verizon chairman and CEO Ivan G. Seidenberg told investors on its earnings call today that the company still covets the iPhone.

“This is a decision that is exclusively in Apple’s court,” said Seidenberg. “We obviously would be interested in any point in the future they thought it would make sense for them to have us as a partner. And so we’ll leave it with them on that score.”

This statement jives with my feeling that Verizon’s embrace of the Google Android operating system is just as much a negotiating tactic as a hedge against the iPhone.

Without the iPhone, a game-changing devices that is the world’s single hottest smart phone, Verizon is pursuing a sort of spread-your-bets strategy in which they offer a whole range of new devices, including most importantly a series of Blackberry handsets.

For example, Verizon this week is launching the Storm 2, an updated version of the first touchscreen Blackberry, which is getting much better reviews than the first one. And the Motorola Droid, a super-thin phone that uses Google’s Android operating system, will be unveiled on Wednesday.

“We have expanded our base of other devices,” explained Seidenberg. “So our view is to broaden the base of choice for customers and hopefully along the way, Apple as well as others will decide to jump on the bandwagon.”


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