Incentive

I got up really early today to go to 5th ave apple store to, don't be shocked, to return the iPhone 4 (I will address this in the next blog, I promise). While I was approaching the 5th ave store, I noticed there was a line outside the store. I was surprised. I know that the demand of iPhone 4 still outstrips the supply but 8 weeks after the release and there is still a line? As I got closer I could see there were about 60 to 80 people there. As I walked by them I heard mandarin, Cantonese among the dialects spoke by these people.  It turns out these are all Chinese, or american chinese. Now I am very curious and hooked. I asked two of them for what they are doing here this early, is there a new apple product that I am not aware of. They just smiled at me and didn't say much.
 
So I went into the apple store and got the refund in the most friendly and fastest way. The apple guy did ask me to confirm that my reason for return is due to the signal issue so he could file the report. Then I left the store.
 
Well, the line of about 60 to 80 people were still there.
 
I spend the next 20 minutes to dig around the Internet once i got to the office, trying to find out why those Chinese look like people were at 5th ave that early. I cannot be 100% sure about my finding but has a good feeling. Pause here and take a wild guess.

Grey market, yea, grey market in mainland china. 

Now, there is no carrier carries the iPhone 4 in mainland china yet. iPhone 4 is seen as a must have cool gadget there so there is a huge demand. These mainland china people don't mind to pay extra to get hold to the iphone 4. According to some chinese Internet sites, iPhone 4 32G could fetch around $1,200 to $1,400 in the grey market. That is about a 100% profit.

So those 5th ave Chinese people were there early to make a killing. Obviously they are just one step in this iPhone 4 grey market chain. Someone else would then buy from them (because the apple store basically limit it to one iPhone 4 per credit card per day), find a way to smuggle these phones into china, probably by bribing the customs officials, and then sell to distributors to distribute them to Beijing, Shanghai markets to retail to the now fat-wallet Chinese white collars. This supply chain seems to be surprisingly efficient.

I bet if I go to 5th ave store tomorrow I will see another line with 60 to 80 people there. The line will be there everyday until Apple announce the release schedule for mainland china.  

But as the blog's title imply, what I really want to talk about is not about the iPhone 4, nor about the mainland china grey market, nor those people in the line. 

My real point is people are smart, and they are driven by incentive, be it money, social status, or something else. The Apple commercial machine is powerful and excellent at what they are doing and yet they leave these huge gaps for people to exploit. And people get organized in no time. Now I remembered on the day iPhone was released, I went by the 5th ave store at 9:00pm, There was a huge line. I did observe that Asian American seem to be out of proportion in that line. Many of them, judging by their dress style, the phone they were holding, and their age, don't strike to me to be a person that is determined to get an iPhone 4 for their own consumption on the release day.  

Now let's imagine the government with vast sum of money and tries to spend it. What kind of hole would be there for all kinds "smart" people to take advantage of. As government find out the programs don't deliver what they were supposed to deliver the government then increases the size of the programs. Of course the government has to increase the tax rate in order to enlarge the programs. Sigh. I will let you to draw the conclusion. 

  
You are a lone reed, standing tall, waving boldly, in the corrupt sands of commerce -- From You've Got Mail, Frank Navasky to Kathleen Kelly

Our north neighbour's healthcare

At the beginning of July, I visited Montreal and stayed at a friend's place for two nights. He has a Phd. in economics and has keenly observation on economic issue, politics, social contract there in Canada. He is a frequent customer of canada's healthcare service, broke his left arm in one year and broke his right arm the next year, has a young daughter that need to visit the family doctor from time to time for immune, and yearly checkup. To say it mildly, he is not a fan of the Canada healthcare system. He waited more than eight hours for one of his arm treatment in the emergency room, he could only make appointment with specialty doctor for a 7 month later visit. All in all, the system is "broken". It is cheap, don't get me wrong, but it is "broken".

Would the Obama healthcare reform change our current system to what Canada has? No question that we need to find ways to help the 5 pct to 10 pct people that were left behind by the system prior to the reform. However, the debates for the reform revealed that the president and majority of congress/senate were fixated on the if everyone buy insurance then issue solved idea instead of make rooms for a possible alternative solution. They are more focus on passing a bill instead of passing a bill that will work, a bill not only benefit the 5pct to 10 pct people that were left behind but also the 90pct to 95pct people that already benefit from the system prior to the reform.


Technologically speaking, the world's out of hand. Take the VCR. The whole idea of a VCR is that it makes it possible for you to tape what's on television while you're out of the house. But the whole point of being out of the house is so you can miss what's on television. Radio. Now there's a medium I can get behind -- from You've Got Mail by Frank Navasky

iPhone 4 impression II

After about two and half weeks of usage, I could confidently say Apple has pulled off a true winner here. 

I absolutely love the iPhone 4. The stainless steel band is striking. I could understand if Apple indeed made a conscious decision to trade off the signal handling for the beauty of this band thing (trade off, you would be surprised, happens everywhere on our everyday life.) Occasionally I would experience the signal issue but by now I got used to hold in the "right" way. I haven't put any case or screen guard yet, I just remember to reserve one side of my pant's pocket just for the iPhone 4. No key, no coin, no nothing in that pocket but the iPhone 4. It sits very comfortable there. With the steel band, and the black "gorilla" glass the iPhone is high end luxury goods.


1. Battery life is good! It gets me through the day no problem even with semi heavy usage doing email, browse, pandora, twitter, taking several pictures, and iTunes for about 8 hours. It is such a relief that you don't need to constantly remember to plug the phone to a charger.
2. The best app for me is Pandora. I am getting bored with my own music (I have only around 300 albums). Pandora is so good at picking the songs once stations are setup, I seldom skip a song they pick. I am exposed to many more good songs now. The question remaining is how do they make money and continue to provide service to us?
3. The retina display is so surreal. I am surprised Apple only manages to come up a "4" to name the iPhone instead of a better name be able to fully capture the wonder of the display.
4. Would the current news/trend that Android out sold iPhone in the second quarter make apple executives nervous? Granted I haven't watch much tv in the summer time but it doesn't seem apple is doing much ad at all. They need to comes up smart ads to spread the virtue out. (on a second thought, I don't mind Apple becomes an underdog again!!!)


Improvements for the iPhone (or touch smart phone generally speaking)
1. Battery, battery, and longer battery life. I would be very happy if the next iPhone could give us a 12 hour heavy use. I am sure there are very heavy investment in the battery tech. It is just frustrating that the battery life is not moving as longer as we expect. Does the battery life follow the Moore law? Sometimes it is just not enough to throw more money and  more people at this kind of thing. It is waiting for a genius to make a breakthrough discovery. Sigh. What I really want to say is that why cell phone makers, cell phone battery makers don't need government subsidize while the auto maker needs government to provide tax break for the electric car. This is the most absurd things for the government to do since this kind of subsidiary is to redistribute the wealth from poor people to the wealthy people in the names of environment. We don't subsidize a BMW purchase, and why would we subsidize a electric car?  Since the subsidize completely distorts the price signal it would only slow the pace of the innovation. And at what point we would say enough is enough and stop subsidizing? After 100,000 sold? 500,000 sold? Or a million?
2. Nano coating. It is still way to easy to smudge the glass, both front and back.  Fingerprint is a nasty thing. Could nano technology help out here? I remembered Docker has pants that uses nano technology that is able to resist spill, dirt, you name it.

3. Camera, both front and back. I don't carry around my point and shoot anymore. But there is still more to be desired from the iPhone 4 camera. and both hardware and software. the camera software is huge disappointment.
4. There is no doubt Apple is working nonstop on the signal stuff.


Listen to this -- the entire work force of the state of Virginia had to have solitaire removed from their computers -- because they hadn't done any work in six weeks.… You know what this is, you know what we're seeing here? We're seeing the end of Western civilization as we know it. -- From You've Got Mail, by Frank Navasky

Save barnes and noble -- II

If you buy a CD, you could easily rip it to mp3s without paying extra royalty or fees; or if you buy mp3 direct from iTunes store or Amazon, you could burn them to CDs without extra charge either. However, if you buy a hard cover, and then later you want to read it on your iPad or kindle, you have to pony extra hard cold cash from $9.99 to $12.99 -- $12.99 thanks to apple. Why is that? I like books especially good hard covers that with a good jacket design, good bindings, and with good paper. They are an art in it themselves. I don't mind spend extra money for them but I also like the convenience of ebook. But I don't want to pay the full price again.

So here comes the first suggestion for barnes and noble to goto the mattresses for. They should negotiate a deal with publishers, with which a user would be given a voucher for $1.99 more they could get the digit version if they buy the physical book, be it hard cover or paper mass. Maybe they could charge $2.99 if the physical book is paper mass. Readers would cheer the deal and support barnes and noble in a big way.

Second they could do more promotion in their store such as give away their membership for free, from time to time, offer a discount on the Starbucks coffee, arrange more author signing opportunity, and more kids activity cause kids activity bring the parent to the store as well. They should also design more ads to display in the local store to emphasize the contribution they do to the local community.

The whole purpose of places like Starbucks is for people with no decision-making ability whatsoever to make six decisions just to buy one cup of coffee. Short, tall, light, dark, caf, decaf, low-fat, non-fat, etc. So people who don't know what the hell they're doing or who on earth they are can, for only $2.95, get not just a cup of coffee but an absolutely defining sense of self: Tall. Decaf. Cappuccino. -- From You've Got Mail by Joe Fox

Save barnes and noble

It was said the barnes and noble was asked whether their name could be used in the movie You've Got Mail. Not wanted to be associated with the infamous discount store image the movie is projecting that drove the little boutique bookstore shop around the corner BN rejected the offer. It is ironic that now BN turns out to be the bookstore around the corner that its fate is in serious doubt, given Amazon is doing a major push of the Kindle device by dropping the next wifi only version to only $139.

It would be very sad if BN would go under just like blockbuster video store did recently. to a lot of local communities BN is not just a bookstore but a gathering place for many people, book clubs etc. My younger one just performed his group violin in the local BN store for a fund raising event. Many people play chess in sunder afternoon there. There is a singing group as well. Kids meet there for play date. It serves a noble social functions.

How should BN go the go to mattresses?

"Save The Shop Around the Corner and you will save your soul - From You've Got Mail."

Apple, Google, or Microsoft

Say you are into high tech, and you happen to have some money to invest. You checkout some sites for ideas, and apple and google seems to have all the focus. iPhone and Android, hmm. And Microsoft seems to be making too little and too late an effort to compete with Apple and Google. So you decide to invest either in Apple or Google, and are flipping coin to help you to pick one.

Wrong decision.

Microsoft maybe be late to the smartphone game -- they were actually earlier with Windows mobile, I will leave it to another story -- but that is how Microsoft was operating and that is probably how they would move forward. When they see an opportunity they could pour their energy and people into it and make a killing. That was how they defeated Apple and IBM on operating system, defeated Wordperfect and Lotus 1-2-3 and Lotus Notes, defeated Netscape, made huge gain on game console, good position now with SQL server, and cloud service as well. Now they have set their sight on smartphone with a singularity focus and I fully expect them to make inroad. Today Wall Street doesn't give Microsoft its due respect and its stock price has moved anywhere for the past decade. But Microsoft is make progress on all fronts, especially with Windows 7, the coming office 2011, XBOX live, they are really a money machine and a utility company which has many products to offer -- not like Google that soley depends on ad, the Android maybe popular but it's free --, doesn't depend on a charisma leader -- Steve jobs's health should be a big concern --, even a guy like Steve Ballmer could run Microsoft well enough. Microsoft maybe boring for now -- but has a mole status in many products, even Mr. Buffet wont mind to invest in microsoft given its current situation. Microsoft would not go anywhere but up.

But, there is a but, apple has dominated mp3 player market with iPod for about 8 years now. So who knows. However mp3 player is relative small compared to smartphone.

Disclosure: long on all three, apple, google and Microsoft.