Due Diligence

Monday, February 24, 2003

Apple: Blowing a wireless networking lead

A week ago I trashed Apple for a bogus WiFi implementation in the 15" TiBook I had recently bought. After pondering for that week, I've decided it's not that bad, it's worse, at least as far as Apple's positioning goes. Consider that:

Apple early on staked out a strong wireless position with solid and useable 802.11b implementations in the Airport AP and iBook add-on cards.
This is the year Intel puts WiFi into its notebook reference platform.
According to Instat WiFi unit sales grew 65% in 2002, and (as close as I can tell by squinting at their graph) are projected to grow 75-100% this year.
WiFi is one of the few things driving PC market turnover this year.
Apple needs some of those buyers to 'switch' to remain sustainable as a business.

So why oh why oh why, did they put a flawed WiFi implementation into the most popular form factor of their top end product line, and keep selling it after the problems were obvious? It's not as if the troops in Cupertino don't know. The retail employees know. It sounds from this like tech support and probably customer satisfaction know as well. And I should have paid more detailed attention to the BAWUG list, because the user community knows the problem well enough to have engineered workarounds. The new 12" and 17" Powerbooks have put a workable antenna around the LCD panel, so product engineering knows they shipped a dud last time.

So either the troops know and the word hasn't been passed up (I find it hard to believe), in which case Apple's got serious internal communications issues. Or the TiBook product and product line managers know, and haven't fixed it or passed it up the line, in which they should lose their jobs for undermining a long term position of the company. Or, it's known all the way to the top of the company, and not considered important enough to fix, and that's scariest of all. There's certainly enough empirical evidence of both a flawed design and frequently defective product to get the attention of the class-action attorneys and create a PR blowup just when Apple needs to have its position on WiFi be the strongest. Anyone home?
5:11:50 PM

Some tasty recording industry numbers

The New York Daily News has a very useful study of the financial model behind a gold record. Just plug that in where I refer to 'gold record should be profitable' below. There are nice hard numbers here as well for the distribution chain markups and promotion and packaging costs.

Found via Dan Rosenbaum and Terry Frazier.
3:57:15 PM

First flight test for naval UCAV

Northrop-Grumman's X-47A made its first flight Sunday. This is intended to be the first 'tailhook' style combat UAV, to fly from and back to carriers, a notoriously tough task. If they can make that work under realistic conditions without pranging a few on the way, I'll be really impressed.
3:35:47 PM

Plug: Postini wins PC Magazine Editors' Choice

...as best anti-spam service for enterprises. Congrats to Shinya and all the folks at Postini.

What's the use of a blog if you can't hype a portfolio company occasionally?
3:17:11 PM