The MacBook Air – Part I

Hardware

Finally a quality netbook.

My experience with laptop computers has not been a happy one. All three of my iBooks failed shortly after the warranty period ended and the best I used, an MSI Wind netbook hacked to run OS X, broke its screen hinges after two years of hard use. While the keyboard in the Wind could have been a bit larger that netbook was excellent value for money, especially once Windows was removed. Mercifully, the iPad came to market at just that time so the netbook went off to the recyclers and the iPad became my sole portable computing device, if you exclude the iPhone from that definition.

Well, that’s about to change. The rumor mill called the release of the new MacBook Air dead right, predicting both sizes – 11.6″ and 13.3″ – and my price point of $1,000 was right, so I ordered the 11.6″ base specification model for $999 yesterday and expect it here early next week.

The new MacBook Air.

Let’s be clear about one thing. If your Mac laptop serves as your primary computer, maybe connected to a larger display at work or your TV at home, the Air is not the right choice. While the Air supports external displays, it’s slow by comparison, has little internal storage and, until I use it for a while, is probably a good deal more fragile than the MacBook Pro.

On the other hand, if you want a capable road machine which can do light Photoshop and Lightroom work on your photos, the Air may be just the thing. The 11.6″ model I have on order runs a 1.4gHz Intel Core2Duo CPU which should equal the performance of the overclocked 2.0 gHz Intel Atom in the MSI Wind, which was just fine with Lightroom. Now while the smaller Air does not come with an SD card slot – there’s no room for one – a small card reader will do, plugged into one of the two USB sockets. And if the 64gB Flash storage, in lieu of an energy sapping conventional disk drive, proves too small, an external self powered USB HDD will do the trick. Finally, the screen aspect ratio is widescreen which works well with movies.

What is most significant about the Air, however, is what it lacks. Not just weight, where the 11.6″ model comes in at just 2.2 lbs (the iPad is 1.5); Apple has deleted the DVD drive from the machine and followed up by announcing the App Store for the Mac whereby all future software purchases will be optionally made over the air from those vendors who join the Store. And as you already watch movies streamed from any number of sources it’s safe to say that the DVD drive, and the DVD it reads or writes to, are both effectively dead. The machine also lacks the traditional power sapping spinning hard disk drive, replacing it with flash memory and “instant-on” functionality, once you have booted it, that is, with 30 day standby time with the lid closed. That’s a feature in the iPad which I never want to lose.

The iPad? Well, until someone (Adobe – are you awake?) comes along with photo processing software engineered for the touchscreen, there’s only amateur-hour apps out there for the photographer. The iPad is a gorgeous device for viewing pictures but it’s not there yet for processing. How hard can it be to add a touch overlay to a great app like Lightroom. for heaven’s sake?

Part II appears here.

Disclosure: Long AAPL stock and call options.

The end of IT hegemony

iPad, Photography

No more Mr. Bearded Guy.

For much of my life in business you got what the Information Technology department (rarely was there a greater misnomer) dictated, meaning a PC with Windows, Word, Excel and Powerpoint.

Likely as not the guy in the corner office was computer blind and had (as did many of my bosses) his secretary print out his emails so he could read them and she would type replies. I am not making this up. That generation regarded using a keyboard not only as demeaning, it was a servile function reserved for low paid ‘girls’.

This was great for IT as they got the ultimate in job protection – they chose the hardware and software, got the vendor kickbacks, and there were no decision makers to argue. Their ‘client’ was a secretary ….

But that is all quickly coming to a close. The moment I exited the corporate system, because I hated being told what to do by someone I mostly had little regard for, and started working for myself, I dumped the PC and anything to do with it, and moved to the Mac. I still needed Excel, true, because I crunch a lot of numbers in my day job of managing money, but what drove me to the Mac was my love of photography and a desire to have as little technology intrude between my snaps and the finished print. Plus, I hated having to reboot all the time.

However, Apple has done a lousy job of selling to big enterprises and that only started changing with the iPhone, the most disruptive technology of the past five years. The CEO got one because his existing cell phone was garbage, and told IT to make it work with the company’s systems, over all their self-serving protestations about security. He then went home, buying an iMac on the way, because he was tired of having the smelly, bearded guy from IT come around, pick his nose and reboot his PC. Plus the iMac looked cool in his mansion.

That same CEO just got an iPad because it didn’t cost much and he knew it would work. The most disruptive technology of the next five years. And his kids loved it. And, yes, it too looked cool. Now he has his salesforce using the iPad and IT has reverted to being servant and is no longer master. They have to support what revenue generators demand, not what they think gives them job security. Hurrah for that. And the back end has migrated to Unix servers leaving no room for MSFT’s substandard server software.

That’s why the potential for corporate sales of AAPL’s mobile products is where the greatest revenue growth lies for AAPL, because Apple is just waking up to the demand. Tablet devices will front as the smart client for all those Unix servers and corporate users will increasingly write tailored apps (which do not have to go through the awful App Store and the related approval process staffed by that same bearded guy who lost his job in IT) for in-house use.

The primary users of full blown desktop computers will be the accountants, marketers and engineers. Few others need one. And once we get voice-to-screen perfected, the keyboard will die and a new generation of users will have to learn dictation skills. As for the laptop, it’s already rapidly becoming an anachronism.

Yesterday’s IT. Leica M2, 50mm Summicron.

Disclosure: Long AAPL and AAPL call options.

Time for an Apple camera?

Hardware

Needed: A proper UI.

With Apple stock opening over $300 per share for the first time this morning and Apple Computer poised to report its first quarter with sales in excess of $20bn on October 18, 2pm PDT, fans of the stock are asking “What’s next?”

Well, Apple mobile devices (iPhone, Touch, iPod, iPad) now account for a stunning 60% of revenues and growing. They were zero four years ago. The iPad will sell anything between 25 and 50 million units next year, generating $26 billion or more in revenues and some $8.25 in EPS and adding maybe $80 to the stock price. With competitors all over the place with multiple operating systems and few developers writing applications for any but iOS, the iPad has a solid 3-5 year lead on the competition, just like the original iPhone. Cannibalization of traditional computer sales is mainly hurting PCs and netbooks, as MacBook sales continue growing. The newest iPhone is selling like hot cakes, global distribution grows apace and the iPod refuses to die , morphing into the Touch. So it’s not like there isn’t a lot of gas left in the tank for existing products to continue to sell nicely for a while.

Many commentators think Apple should try to get serious about home entertainment with an Apple television but I doubt that will work. The problem with an integrated TV/computer is that you have one part with a ten year life, the LCD display, and another with a 2 year life, the computer hardware. So the consumer will be confronted with the issue of recycling a perfectly fine LCD display just because the computer part is obsolete. That does not solve. Plus dealing with multiple TV and movie studios to get distribution rights to their content is a Sisyphean task.

But how about an Apple camera?


The Apple Quicktake 200 – 1997

Apple marketed three Quicktake models in the 1990s, each 640×480 pixels (0.3 megapixels!) priced at $600-750. They were not successful, the first two being a rebranded Kodak made by Chinon in Japan, serial makers of contract garbage then and now; the last, shown above, was made by Fuji. Steve Jobs rightly discontinued this “me too” product shortly after his return to Apple.

Rebranding is not a formula for success. It’s merely a formula for low sales and even lower margins.

Apple has been using optics in its computers for a long time. There was the excellent 2003 iSight webcam which clipped to your iMac which I happily used for years with my iMac G4 and G5; after that iMacs and MacBooks came with built-in webcams, none quite as sharp as the original clip on which now sells for a small fortune in the used market.


Apple iSight webcam.

The iSight had autofocus and exposure and a fast, sharp lens.

Finally, Apple has made huge strides in cell phone camera design, with the 5mp variant in the latest iPhone4 eschewing pixels for image quality and adding automated HDR in the process. I am still on the iPhone 3G so cannot comment on the quality firsthand, but user reports suggest it’s excellent for that format.

And if anyone knows User Interface design, it’s most certainly not the goons at Microsoft.

So Apple could make a crackerjack separate camera in a sector replete with poor design and near total absence of correct thinking about user interface design. Panasonic and Olympus are among the worst here, with endless menus cluelessly named. What is called for is a simple mechanical analog interface for a few of the most commonly used functions and a voice activated or touchscreen approach for everything else which is rarely used. The Panasonic G2 makes a stab at touch controls, but it does nothing to change the poor menu structure of the G1.

Lenses? Hardly an issue. Any of Schneider, Fuji, Cosina, Sony and many others will be more than pleased to come up with a cool design for what is now the world’s second largest company, just behind ExxonMobil. CPU? The customized ARM A4 used in the iPad will blow anything else out there out of the water.

Disclosure: Long AAPL and AAPL call options.

The iPad six months later

iPad

If you don’t have one you are getting left behind.

Just over 6 months ago I was amongst the first in line with our son to buy an iPad, a fairly unusual ‘early adopter’ stance for one who prefers to let others do the testing for him and then buys Mark II of a gadget. You know, the one that works properly.

Well, since that great day three things have happened. Our son is one inch taller, I have bought five more iPads as gifts for friends and a piece of junk named ‘Kindle’ has come and gone. No, none of the gift recipients have returned their iPads.

And, not coincidentally, AAPL stock has risen over 20%.

Mobile devices (iPad, iPhone, iPod) now account for nearly 60% of Apple’s revenues and, depending whom you believe, somewhere between 8 and 14 million iPads will be sold in the last nine months of 2010.

But the grumblers continue to wait for something better, denying the time value of information. It doesn’t run Flash, it doesn’t have an SDHC card slot, it’s clunky for file sharing with your desktop, it doesn’t multitask, it doesn’t print, there’s no matte screen version and on and on. Meanwhile I have found the iPad has become my dominant reading tool, be it blogs, news, books, art, photography, PDF files or music. And our son loves it for gaming!

While what I really want is a 21″ iPad for art and picture books, it seems that the next variation will be a 7″ model with greater portability which I expect to start at $299 compared to $499 for the original.

The next iPad.

That one will be fine for books and snaps but of less interest to photographers who generally prefer a larger screen.

The early adoption decision was easy. After three years with the iPhone there was no learning curve, and the touch screen technology is identical. The same features that make the iPhone so successful – instant on, bog reliable OS, high manufacturing quality, reasonable price – were all expected in the iPad and I was not disappointed. Plus, unlike a MacBook or any other laptop or netbook, it runs very cool, a pleasant and unexpected bonus. Finally, the eleven hour battery life is a game changer.

I have placed more stock trades and read more research reports using the iPad than I can recall. Now instead of catching the market open bleary eyed in the office, I simply prop a pillow under my head and have at it in bed, if you get my drift. Waking at 3 am to check the far east markets is now a process with a very low resistance factor, as I do not have to go anywhere to do it.

So, time is money and information is power. If you are still waiting for something better, you have just lost 6 months – of time, money and power – for what is a trivial outlay. What’s your problem? Heck, your local Target now has them and even the maker of that execrable piece of junk, the Kindle, will sell you one sales tax free.

And next year when I get the second version I’ll hack the original to run Flash and spray the screen with matte enamel, making for a complete experience.

Disclosure: I own more AAPL stock than you do.

Greed as Art

Photographs

A number-blind nation’s output.

One of the most obvious ways to economic success is to do the difficult thing, meaning you study math, or chemistry, or engineering at school. Not English or Poetry. While the latter are doubtless noble aspirations their result is that all you are qualified for is to turn out …. more English and Poetry scholars. Neither avocation creates wealth for you or the nation.

And capitalist society is expert at avoiding doing the ‘difficult’ thing, given its desire for instant and easy gratification. Be it passive activities like TV or watching sports, vicariously living the experiences of a highly paid athlete, we are simply being passive consumers, creating no wealth in the process. And the alternatives to creating wealth are easily seen in Africa or North Korea, like it or not.

In Western societies the passivity of populations and their general unwillingness to study difficult subjects is seen daily in macro economics. (In Asia, by contrast, the pure and applied sciences are revered). Had consumers learned one iota of math or finance, the housing bust would never have happened. Predatory lenders would have been short of suckers to buy their criminal products. Liar loans would have not seen the light of day and borrowers would have looked at prospective cash flows in the light of rational expectations for income and expense and made objective, informed decisions as to whether a home and loan were affordable.

So continuing yesterday’s aerial theme, here’s a truly exceptional image from Google (presumably taken by US taxpayer-owned satellites, which makes it especially poignant) of the greed that results from number blindness. It’s of a halted residential real estate development off the I75 freeway in Florida on that state’s central western coast – you know the once pristine one now covered with BP’s crude oil. No great photographer was involved, just a passive drone designed and launched by the same people we denigrate as nerds and mad scientists, which we so sorely lack. They make them in copious numbers in India and China but, being the smart people we are, we refuse them entry. It wouldn’t do to actually enhance the gene pool now, would it?

Take a careful look. This development just stopped – the plots at the upper right have pads but no homes. The others, I would bet, are empty or in foreclosure.

Greed as Art. Stalled real estate development in Florida from Google.