Pogue’s ditty, which will appeal to tech industry followers, is an oldie but goodie that apparently he dredged up at something called the Boston Book Festival over the weekend.

It’s a take on current chief executive Steve Jobs’ return to the company he co-founded in 1997. Over the past 12 years, he’s not only helped bring back the company from the precipice but has helped leapfrog some key competitors on the relevance scale but that’s the topic of another blog post.

I thought it’d be a fun post – it’s still the weekend after all. Enjoy the Evita-fashioned musical interlude. Thanks Mashable for the reference and link to the video which has since been posted to YouTube!

Bell

The impending introduction of the iconic device has led to speculation the iPhone 3GS and 3G will be sold for less than the respective C$199 and C$99 price tags Rogers and Apple sell the devices for at the moment.

(Rogers, for those non-Canadian readers, has been the exclusive reseller of the iPhone and Apple carrier partner since July 2008 by virtue of its GSM network. Bell and Telus have operated and will continue to operate networks based on the less used CDMA network standard.)

Some of the iPhone price speculation has undoubtedly arisen because of recent comments by Apple chief operating officer Tim Cook who had the following to say on the topic last week:

“Generally speaking, in markets where we’re already selling, I would not expect to see a wholesale price difference as we bring on other carriers,” he told analysts and investors on a conference call last week. “However, the end user price is set by the carriers themselves, so you may or may not see a street price difference.”

It would be a mistake to believe the iPhone, however, will be sold for anything less than the prices established by Apple and Rogers in Canada.

It’s a matter of finance, not conspiracy theory. In other words, the iPhone is a very expensive device for carriers to acquire, making device price cuts unlikely, given the additional focus on profitability at the carrier level.

Apple’s premium pricing policy, which can lead to consumer sticker shock, extends to carriers as well; companies pay premium prices as well for the iPhone. That cost has to be passed on to someone unfortunately for consumers.

The greater the hardware subsidy, the harder it is for a carriers to make a customer profitable. By most accounts, iPhone customers aren’t profitable until the third year of their contract.

This is a troublesome metric for carriers as customer profitability is of greater concern. Investors have measured carriers, in large part, on an average revenue per user basis. Trying economic times and lower growth prospects however mean investors are increasingly concerned with average margin per user.

The net result for consumers will be an equally, or more expensive, iPhone sticker price on the Bell and Telus networks. Expect the carriers to at least match the advertised prices the iPhone is sold for by Rogers.

Demand for virtually every one of its products not called iPod is on the upswing even though consumer spending is down on a year-over-year basis in the countries where Apple has a relatively high amount of market share (e.g. United States, Australia and the United Kingdom among others).

Apple, however, has struggled to keep up with demand for the iPhone for example. Demand has outstripped supply of Apple’s popular smartphone, specifically the iPhone 3GS, in many countries other than the United States.

In Canada, where I reside, Rogers and its discount brand Fido struggled in recent months to keep the devices on its shelves, virtual or otherwise over the course of summer.

The supply issue was felt by carriers overseas as well, most notably 3 Italia whose chief executive who said the carrier could double iPhone sales if 3 had access to more devices.

It’s a problem that most chief executives would love to have. For a closely-watched, publicly-traded company, it’s a double-edged sword. More consumers (and some business types) want the device, leading to greater expectations of the company. Apple’s increasingly dependent on its iPhone product for top and bottom line growth. But the company has struggled to make enough of the devices. (N.B. I don’t believe for a minute the shortage is some sort of Apple construct meant to highlight the device. Apple doesn’t need more publicity.)

The likely reason for said supply problems is rooted in manufacturing processes. It’s an expensive product to make, which in manufacturing terms makes it harder to mass produce. This may have contributed to the supply issues of late. It should be noted that in Canada, at least, the backlog of orders seems to have relented as of late.

In any case, Steve Jobs and Co. need to beat the Street’s 7.5-million Street consensus iPhone shipment estimate for the Apple growth train to motor ahead. Apple’s fourth quarter is particularly important to the company’s fortunes as it includes the back-to-school months which are traditionally high-volume sales months for the company.

My personal prediction is that Apple will beat iPhone shipment estimates. The current backlog of devices made by China-based Foxconn, Apple’s chief contract manufacturer, likely cleared enough in the month of September for Apple to meet or surpass investor’s high iPhone sales expectations. Furthermore, Apple has a strong  record of overdelivery on the results side. We’ll see on Monday.

You’d be forgiven if you thought the opposite will soon happen. After all, Apple’s chief operating officer Tim Cook boasted on Wednesday evening, during the company’s call to discuss its out-of-this-galaxy third quarter earnings results, that 20 of the world’s 100 largest companies have purchased in excess of 10,000 iPhones, (presumably over the past two years- Cook didn’t cite timelines.) The interest from small companies is also significant, he said.

“We are seeing growing interest with the release of the 3GS and iPhone OS 3.0, due in part to the new hardware encryption and the improved security policies. The phone is particularly doing well with small business and with large organizations that allow people to purchase the phones for individual use, and this is both in corporate and government settings.”

The fact employees of companies such as Exxon Mobil and Wal-Mart (in the Fortune 100), (may) have opted for iPhones in some cases is significant. The BlackBerry has been the smartphone of choice for North American enterprises to date. (editor’s note: Apple is a Fortune 100 company. I’m guessing it’s one of the 25% that bought the device in large quantities. Microsoft is also part of that crowd though I’m sure they’re not part of the club. But I digress).

Apple has yet to capture the biggest deals, whereby a chief information officer or a finance head approves a purchase order for thousands of devices en masse.

Instead the iPhone has proved popular per Cook’s comments with prosumers, those employees whose bills are paid by employees but aren’t on corporate plans, and who will buy devices in “one-off” instances. These employees aren’t the big fish in Corporate America. Typically, large companies who want to arm employees with mobile phones prefer to herd their employees onto a company plan so as to exercise their buying power with carriers. This allows the company’s procurement types to extract the greatest discount possible from the OEM and the carrier.

Its growing prosumer base does give Apple a wedge in the enterprise, which could prove helpful to the company when trying to grow share. Perhaps that satisfied iPhone user spreads the word about his or her experience which may lead to a groundswell of opinion in the enterprise and ultimately a large purchase order. Or so the hope goes.

Problem is the largest deals are usually struck at the highest levels. That’s a problem as Apple has very little sway in the so-called c-suite ranks now. As a result, Apple’s early progress in the enterprise it doesn’t portend a downward trend for RIM. The Waterloo, Ont.-based company’s relationships with enterprises and  network operators are far deeper and not easily replicable. I’ll also fathom a guess RIM is still leaps and bounds ahead of Apple on the security front. These are advantages that don’t go away overnight even if the iPhone is a fantastic looking device with over 65,000 applications just waiting to be downloaded.

There is no question Apple will make headway in the enterprise in the coming quarters and years. Enterprises always want alternatives to incumbents, in this case Research In Motion and its ubiquitous BlackBerry; the smartphone field is no different.

But Apple’s readiness to meet the coming demand is another question. Apple’s sales efforts, since CEO Steve Jobs returned to his old post in 1997, have been heavily weighted towards the consumer. As a result, the ability to handhold large corporations through long sales cycles which is exactly what the chief information officer or her/his lieutenants needs and wants from Apple to sign off on a large iPhone purchase order, need to be honed if not created.

It’ll also have to make the iPhone more carrier friendly. Apple, for example, should make the iPhone process data more efficiently not unlike the BlackBerry. It’ll also have to develop additional (and deeper) relationships with network operators.

Those aren’t easy tasks. Let the competition for enterprise users begin.

Here’s one ad, featuring the Blue Man Group, Apple has aired with hopes of building support for the iPhone.

Consumers are choosing some lower-cost options such as the iPod Touch over the iPhone, presumably to save money in a recessionary environment. For evidence, look at the sequential decline in iPhone sales. Now that the initial iPhone 3G promotions are over, wanna be iPhone owners are staring down the barrel of an expensive three-year contract and they don’t like it.

This will naturally lead many to the iPod Touch as an alternative to the iPhone.

The iPod Touch, of course, is the lower-cost, less connected version of the iPhone, which has grown by leaps and bounds since it was conceived by Apple in July 2007.

In a down economy the iPod Touch, which allows users to access the Web via short-range Wi-Fi networks, it seems has become an iPhone substitute for cash-strapped consumers. It’s a phenomenon in the business world known as “cannibalization.”

This is significant as Apple needs to sell a larger and more varied group of products to consumers and businesses in order to sustain its current growth trajectory.

The real issue for Apple, as noted by the company on yesterday’s call, is the substantial cost of data pricing plans by carriers such as AT&T in the United States.

The ongoing global recession (my term for the current economic situation though it hasn’t been declared as such formally) is causing consumers to think twice when deciding whether or not to splurge on an expensive gadget and an accompanying service plan.

This is a troubling trend for the company, whose bottom-line prospects are built on the sale of high-margin devices. The iPod Touch (presumably) doesn’t deliver the same kind of margin an iPhone does for the company. One can only assume the trend will continue for the length of the slowdown/recession.

Over the long term, however, iPod Touch sales will drive iPhone sales. Buoyed by the experience, consumers will eventually upgrade to an iPhone. Or multiple products will be bought for the same household.

Apple detractors point to lower iPhone sales as a sign the company’s iPod Touch and iPhone product lines now overlap, leaving one category to lose in an internal race. It says here the least of Apple’s problems are overlapping product lines; Apple’s handheld products are meant for specific audiences and are therefore complementary. The iPod Touch, in fact, will serve to augment iPhone sales over the long term as it will drive interest in the smartphone, which is a richer mobile experience than the iPod Touch. This upgrade path will, in fact, drive device sales.

There’s anecdotal proof at least that some smartphone users will happily use an iPod Touch on top of their telephony-enable device. That’s because they can’t or don’t want to sideload games or music onto what may be a device used for business purposes. Come time to buy a new smartphone, the iPhone will be considered for that user type.

I am no Apple bull. This growth story will be difficult to sustain for a number of reasons, most notably economic conditions and the mysterious ongoing health conditions of its esteemed leader.

The Apple growth story can be doubted for myriad reasons. But releasing newer and arguably better products to market can’t be counted among them.

[tags] Steve Jobs, Apple, iPhone, iPod [/tags]

This much we know. There’s a lot more left unclear after yesterday’s announcement that Jobs has once again been felled by an unnamed ailment leaving him more or less out of commission until the end of June. The company said Jobs will keep his hand involved in strategic decisions.

Take the more obvious questions for example:

1. What is the nature of Jobs’ illness?
2. Is the reason for his medical leave related to his hormone imbalance?
3. Is it pancreatic cancer which he was treated for five years ago?
4. Is there a succession plan in place? One can only assume that’s the case.
5. Who’s Jobs’ permanent successor if his medical condition(s) worsen?

The answers, of course, are difficult at best to answer for everyone except those that are closest to Steve Jobs and his medical records. or the company’s senior leadership team.

Here’s what we do know:

• Lawsuits. Expect Apple to be hit at least one class-action lawsuit in the not-too distant future. Shareholders the world round are looking to vent their frustrations of the past year or so out on someone or some company. Some may feel Apple hasn’t disclosed enough information to date. There’s a cottage industry of lawyers in the U.S. that’ll be more than happy to help litigious Apple shareholders vent their frustrations in court. Most of these lawsuits are either settled out of court so the inevitable class-action lawsuit won’t affect the company’s performance in any measurable way.
• Apple’s succession plan is now officially an issue (again). It’s a topic Apple has tried to push under the rug for some time. I believe the last comment on the matter from the company was something to the effect of: “We’ll announce something, when we need to.” I have no doubt a succession plan has been created by Apple’s senior management and its board. Apple could, however, assuage the nerves of many a jittery investor, customer and company watcher if it was to provide (some) details of that plan.
• Tim Cook seems to be the heir apparent to Steve Jobs. The company’s chief operating officer will run the company until Jobs returns to his throne. This is Cook’s second stint as acting CEO. In 2004, he took the helm for month when Jobs was treated for a form of pancreatic cancer. Apple is undoubtedly full of skilled executives but Cook’s operational experience and steady hand seems to have landed him the role of successor to Jobs should a worst-case scenario need to be implemented.
• Apple, however, is still very much on a roll. The company’s results have been stellar of late. Will Job’s absence affect product development? Too little is known about the decision-making process inside Apple to answer that question.
• Jim Goldman of CNBC and Dan Lyons, a Newsweek editor, really, really don’t like each other. Anyone catch the nasty exchange between these two on CNBC Wed. evening? I’m not sure I’ve ever seen two people argue so vociferously on-air. Lyons, best known for his hilarious Fake Steve Jobs blog, attacked Goldman last night in a special report on Apple’s announcement yesterday. Specifically, he accused Goldman of being “punked” by the company for reporting that Job was in OK health some time ago and that the company’s Macworld pullout had nothing to do with his health.

UPDATE: Doctors interviewed by Bloomberg News say Steve Jobs may have to have his pancreas removed as part of his ongoing medical condition. Just last week Jobs said the treatment to cure his unnamed condition should be “simple and straightforward.”
[tags] Apple, Steve Jobs, Tim Cook, CNBC, Fake Steve Jobs [/tags]

There’s the obvious (the explosive growth of social networks such as Twitter and Facebook) to the stories that didn’t happen (Microsoft Corp.’s proposed US$44-billion takeover of Yahoo Inc.) to the fascinating but ultimately underwhelming product releases (Google’s Chrome browser).

I am no Apple fan boy even though I’ve written multiple blog posts on the company this past year. Too often, the company gets a free ride from media and users.

But in the case of the App Store, its impact cannot be denied despite the fact it was announced six short months ago. Currently there are more than 140 new apps being released every day, over 9,000 available for download, and a ratio of paid to free apps of 7:2. The average price is roughly US$4.15.

It has helped reinforce and drive the success of the iPhone, which was already one of the world’s fastest-growing mobile devices. Its success comes despite the fact most of the applications offered to date range from the inane (the iPhone Fart apps) to the only somewhat useful (the Flashlight).

More importantly, Apple has single-handedly managed to pry open the application download process from the hands of the wireless carriers. No longer must users take what is given to them the applications optimized from by carriers.

Its immediate success has also inspired competitors, such as Research In Motion and and Google with its Android Market, to create application development stores as well. Others application development stores are likely to be announced in 2009 (Microsoft SkyMarket anyone?)

Oddly, the App Store was a secondary item of note at best in June when Apple announced the store at its annual worldwide developer conference. Now it’s seen as the driver of what is a fast-growing mobile development platform.

This all spells good news for consumers, developers and yes, even the carriers for years to come as interest in the mobile platform is on the rise.

[tags] iPhone, Apple, mobile application development [/tags]

Theories on the amount of days Steve Jobs has to live, rumours of internecine executive struggles, an orderly leadership handoff and general teeth gnashing over the company’s future have all been hot Apple-related topics of discussion this week.

Anyway, here’s a smattering of the more popular theories and my personal take on them.

1. Steve Jobs is on his deathbed again. This is the elephant in the room given his bout with pancreatic cancer in 2004. As a result, it has been easily the most circulated and discussed theory this week. It should be a concern for investors going forward. And yes, Apple has been criticized in past for its poor disclosure or lack there of it and its corporate governance so the speculation is easily understood. But it’s too easy and/or early to say that the company’s guiding light is in any way, shape or form going to his resting place in the near future. One Wall St. analyst says his sources claim Steve Jobs is cancer free. Nonetheless, Apple could do itself a favour by showing interested parties that Steve Jobs is indeed alive and that there’s no reason to believe the company is going to have to wheel him around to maintain investor confidence like a scene out of the movie Weekend At Bernie’s. Probability = 50%.
2. Apple is set to change leaders in the near future. This theory seems to have been sparked by a research note from Gene Munster of Piper Jaffray published this week. He seems to think the fact Phil Schiller, the company’s vice-president of marketing, is going to speak at this year’s Macworld signals some sort of impending leadership change. That’s a lot of reading of tea leaves but Mr. Munster’s opinion should be taken seriously as he is one of the more respected authorities on the topic of Apple. I’m still giving this theory a thumbs down. Jobs is alive and probably well, which means he’ll be the leader for the foreseeable future. Probability = less than 20%.
3. Apple wants to release products on its own schedule. This is one of the most plausible theories or reasons for the Apple pullout. It is next to impossible to release a market-changing product every January as Apple did with the iPhone in 2007 at Macworld. Yet that’s the expectation Apple has set for itself because it keeps upping the ante on itself with products of greater importance each year at Macworld; it has traditionally been the major product launching pad. It has been Apple’s Super Bowl. Apple likely doesn’t want to have to pull a "rabbit out of a hat" (e.g. an iPhone type release) every year at the trade show. How Apple will create the anticipation or buzz for products in future is anyone’s guess. One thing’s for sure. The fact Steve Jobs won’t speak at the show next month means the company definitely won’t announce a product anywhere near the impact of, oh say, the iPhone. Probability = 100%
4. Apple wanted greater control over the show. Apple, like many companies of its ilk, probably doesn’t like it when others set the agenda, directly or indirectly. Macworld is run by IDG, a conference organizer, publisher and owner of research firm IDC (full disclosure: I am an employee of IDC, which is a unit of IDG). By virtue of this fact, Apple probably had less control over the show than it would’ve liked. But I think Apple’s Macworld pullout has more to do with the company’s growing dislike for trade shows as opposed to a control issue. Probability = 40%.
5. Apple is ditching Macworld for the Consumer Electronics Show in Vegas. It’s boring and unlikely but not an entirely implausible theory forwarded by BusinessWeek writer Arik Hasseldahl. CES may very well have thrown, or will throw some sweeteners, at Apple to make it the headliner at the annual gadget fest. As Hasseldahl points out, Bill Gates is no longer the annual keynote speaker so perhaps that leaves a void for Jobs to fill. As for Apple’s actual participation at the most excellent show, which I’ve attended twice? I say not a chance. Remember, Apple likes to "be different." This means the end of almost all participation in trade shows for Apple. Probability = less than 10%.

[tags] Apple, Steve Jobs, Macworld [/tags]

The latest evidence is Apple Inc.’s decision to cease attendance at Macworld come 2010.

The Web, of course, has made it easier, some might even say a necessity, for consumer-oriented companies such as Cupertino, Calif.-based Apple to advertise and sell its wares.

This is a trend that’s been a long time in the making. It has made the “one to many” trade show, where people gather to see the latest wares of companies such as Apple, a relic of yesteryear.

The truth of the matter is recommendations from other users have always been the most effective way to influence prospective buyers. Trade shows are a limited way to reach the 100-million users Apple considers its market. The Web’s a far cheaper and more effective sales and marketing channel.

Social networks and blogs, for example, are more effective channels for Apple when trying to influence peers. Apple can fan the product flames to more people at a lower cost to the company which helps Apple and Steve Jobs generate a better top line for the Street.

“Apple is reaching more people in more ways than ever before, so like many companies, trade shows have become a very minor part of how Apple reaches its customers,” the company said in a statement posted to its Web site.

Nonetheless, Macworld will be remembered by many a gadget geek as it has been the venue where the company launched some of its most popular products (the iPhone launch in January 2007 comes to mind).

Now I’d expect to see the company amp up its Web 2.0 efforts (e.g. social networks, e-commerce engines and peer-to-peer technology).

The return on investment argument for a show like Macworld was probably never a solid one. It’s just not worth people’s time and money to travel thousands of kilometres to obtain the same information that could otherwise be obtained in a myriad other ways. Nor is the networking argument in support of trade shows a strong enough one anymore.

UPDATE: Macworld organizer IDG said the annual show will be held as per usual: “While we are obviously disappointed by Apple’s decision not to participate in Macworld 2010, we are on track for a terrific show this year, with strong attendance numbers and nearly 500 exhibitors showcasing their products at the January event. Macworld Conference & Expo has thrived for 25 years due to the strong support of tens of thousands of members of the Mac community worldwide who use Macworld as way to find great products, partake in professional development training, and cultivate their personal and professional networks. We are committed to continuing to serve their interests at Moscone Center, January 4 – 8, 2010.”

[tags] Apple, social networks, trade shows, e-commerce [/tags]

Yet people can’t seem to put their cell phones down, which gives the carriers no end of pricing power (for now) which of course only serves to frustrate consumers further. (Customer service is another story but I digress).

Rogers fanned the flames of carrier hatred two weeks ago when it told prospective iPhone users they’ll have to take a three-year contract and oh by the way, no unlimited data plan for you.

Apple, apparently, isn’t amused either. The company, according to one blogger, is now going to limit iPhone shipments to Canada as some sort of retribution for the expensive data plans.

I am dubious of this rumour for a number of reasons.

1) Apple may very well be upset with Rogers. Carriers and handset manufacturers enjoy a contentious relationship at best. It is also true that Apple doesn’t often play well with others but limiting shipments to a rich country like Canada where iPhone demand is latent would be a downright stupid and self-limiting move.

It’s akin to cutting one’s nose off to spite his or her face. Apple is a large, publicly-traded company focused on top-line growth. It is also locked in a battle with Research in Motion, Nokia and others for dominance of the nascent smartphone market. It’s also a company full of very bright people. The bright minds at work at Apple HQ in Cupertino were no doubt painfully aware of the cartel run by the wireless providers in Canada before striking a deal with Rogers. It doesn’t mean Apple is now willing to sabotage the relationship.

2) Apple’s manufacturers have finite capacity. Remember when Apple first rolled out the iPhone to Americans last year? Supply was limited to 10 or 20 units per AT&T store. Anyone who’s ever bought a product from Apple soon after its initial release knows it nearly impossible to get your hands anytime soon launch date.

It is entirely possible supply may be limited for the short term as Apple’s manufacturing partner(s) ramp up manufacturing of the 3G iPhone. Canadians will get the short end of this stick if true. Remember Apple will be rolling out the same models to a number of countries simultaneously. Many of these nations are far more densely populated than wee l’il Canada. It is therefore smart business sense to divert more shipments to other rich countries where demand is also latent. This rumour may very well be a case of broken telephone or information taken out of context.

Finally, this rumour says more about the demand and fascination with the iPhone than it does about the Apple and Rogers relationship. Canadians and for that matter tech followers worldwide will pounce on any morsel of iPhone news whatever the source or level of credibility.

I am done.

[tags] Apple, iPhone, Rogers [/tags]