August 2007
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Month August 2007

MDJ 2007.08.14 re-issued

One of the delays we’ve seen has been that in the process of retooling for the new world, we keep managing to break things. Our slightly revised PDF production process uses Acrobat Professional 8 tools to slim down the PDF files, but we found out the hard way today that “Discard external cross-references” apparently, to Acrobat, means “throw away some, but not all, URL destinations in the document.”

This left MDJ 2007.08.14 in an interesting state for readers—although all of the URLs were properly styled in blue text indicating clickable links, half or more of them actually were not clickable hyperlinks.

Once we figured this out, it was easy enough to fix. We can’t re-mail the PDF issue to subscribers (and many of you wouldn’t want us to, anyway), but we’ve re-generated and re-signed “Version 2″ of MDJ 2007.08.14 and placed both the uncompressed and Zip-compressed PDF files in the RSS feeds. (The old RSS feed has only the Zip-compressed version, of course, but the new feed has both. The link above is to the uncompressed PDF version for those who want to read it on the iPhone, and requires an MDJ user ID and password to access.)

For reference, the older (incorrect, version 1) PDF file was 221,470 bytes long, and its ZIP archive was 208,152 bytes. The newer, correct version 2 PDF file is 225,351 bytes, and the ZIP archive is 211,404 bytes. (This is listed in the new RSS feed, but it never hurts to document it.)

We apologize for any inconvenience.

Logotards

Blogging has some advantages over a more considered publication schedule in a weekly magazine or daily newspaper (much less MDJ or MWJ), including the ability for a quick and amusing post to set the agenda on a topic before anyone realizes what’s happened.

John Gruber did just that on Tuesday when he quickly branded a question at Apple’s media event:

The Dumbest Question I’ve Ever Heard

Peter Cohen, Macworld:

One question that came from the audience wondered why Apple doesn’t
participate in the “Intel Inside” program, in which PC manufacturers
affix the well-known labels to their computers.

“We like our own stickers better,” Jobs said. “Don’t get me wrong.
We love working with Intel. We’re proud to ship Intel products in
Macs. They’re screamers, and combined with our OS, we’ve tuned them
well. It’s just that everyone knows we use Intel processors. We’d
rather not tell them about the product that’s inside the box.”

Jobs offers a rare chance for a public Q&A and someone asks why they don’t booger up their computers with horrid stickers? Will someone please tell me who asked this question so I can name him jackass of the week?

This caught on fairly quickly. John Moltz at CARS satirized that the questioner was a beyond-clueless Rob Enderle. Mac Publishing has since identified the questioner as Bob Keefe of Cox Newspapers, leading to ridicule from the publishing corp.’s MacUser blog, and from (sigh) MDJ staffer John C. Welch.

All of this is predicated on the assumption that someone who had the chance to ask Steve Jobs any question in the whole wide world would ask something as clueless as a question they interpret as “Why don’t you want your computers to look more like everyone else’s junky sticker-covered crap?”

In the words of The Weekly Attitudinal, “You’re all morons that tempt the Attitudinal to unplug from the Intertubes.”

  1. Asking questions of Apple executives is a complicated ritual because they don’t talk about future products, they don’t stray from the pre-determined message, and they make you feel stupid for trying. As MDJ will soon report, in the recent conference call with financial analysts after Apple’s third fiscal quarter results, executives repeated canned answers as often as we’ve ever heard them do, no matter how non-responsive they were to plainly relevant questions.

    In that conference call, Apple announced that even though it had achieved 36.9% gross margins in the June 2007 quarter, the company guided analysts to expect about 29.5% gross margins in the September 2007 quarter “as a result of the back-to-school promotion [that gives student buyers a free iPod Nano when purchasing a Mac], higher commodity costs, and product transition.”

    Before the call had even ended, analysts were speculating out loud that such a huge margin drop must either mean a huge increase in component costs, lower retail pricing, or both. You may recall that this spurred quite a bit of speculation over what Apple might have up its sleeve: dramatic price cuts, vastly improved functionality at today’s prices, black magic, or something else.

    Quarterly results still kick us in the pants on our schedule, but MDJ and MWJ will make what we believe is a compelling argument that this is not the big deal it was made out to be. Apple’s gross margin guidance has been 2-3 points under actual results for a long time, so guidance of 29.5% probably means results of around 32%. What’s more, 37% gross margin is too high for Apple’s business—dropping a few points should result in higher volume and market share that’s even more valuable to Apple at ths point than the extra cash.

    Nonetheless, just two weeks ago, the Mac community was abuzz with Apple’s “product transition” that would reduce margins. It’s also widely known that Intel pays companies big bucks to place the “Intel Inside” logo on computers. Ten years ago, it was common for Intel to reimburse PC makers between US$30 million and US$60 million per year for using the Intel Inside logo. The guidelines were strict, but for those companies that would play along, “Intel reimburses 6 percent of the total average selling price of each vendor’s worldwide monthly microprocessor shipments.” As one PC maker told ZDNet a decade ago, “You’re not competitive if you’re not on board.”

    We know this, Keefe knows this, everybody knows this, and it’s just two weeks after Apple told analysts its margins would drop precipitously during this quarter due to “product transition” and “higher component costs.” That’s what Keefe was asking. If you strip away the formal dance and political niceties, this is what the exchange really meant:

    Q: If your margins are going to drop so much this quarter, why don’t you take the free money from Intel like everyone else does and place the sticker on your computer? You’ve made a big deal about using Intel chips, so it’s not like you’d be surprising anyone.

    A: Because they’re ugly, and we don’t need the money so badly that we can’t afford to make the beautiful products that our customers want. We like the chips, but our products are different than everyone else’s and we’re going to act like it.

    If asking why you’re turning down free money just two weeks after warning that your gross margins are going to drop quite a bit is the dumbest question Gruber’s ever heard, he needs to get out more.

  2. This whole bit about “but he could have asked Steve Jobs anything he wanted! is just beyond stupid and right into fantasyland.

    What questions do you think Steve Jobs is going to answer?

    He doesn’t talk about the past, and he doesn’t talk about future products. He ruled out talking about iPods, iPhones, and the music business because it was a “Mac” event. Read Macworld’s coverage of the live event and look at these other killer questions that people asked Jobs at the event:

    • Does the iMac have a future now that more and more people are buying laptops? (Hint: Jobs had, within the hour, announced three new iMacs)

    • How is Apple’s relationship with Google? (Who really expected an answer other than “Fine, thanks for asking?”)

    • Is Apple going to make a multitouch-operated Mac? (Jobs called it a “research project,” noting, as have many others, that it’s not clear the concept makes sense for the normal orientation of a display. In other words, he didn’t rule it in or out.)

    • Is it Apple’s goal to surpass Windows in PC market share? (They’ve only been asking this question for 22 years, so who really expected a no-win yes-or-no answer? As Apple has done for decades, Jobs said they’re focused on making the best products possible.)

    These people had the chance to ask Steve Jobs “any question in the whole wide world,” and this is what they came up with, yet somehow they avoid excoriation. MacUser’s Dan Moren posed a few theoretical questions of his own about a month ago, but you’re a fool if you think Jobs would answer “How do you think Apple would survive without you,” or “Where is the Macintosh platform headed” with something other than marketing platitudes about great new products, great Intel chips, how cool Leopard is, and how hard they’re working on the future.

Seriously, people are lambasting Keefe for asking why Apple is predicting lower margins and turning down free money from Intel, and their idea of acceptable questions are “Do you like Google?” and “Do you think the new computer you just showed us has a future?” It makes you want to wrap your head in duct tape without breathing holes until the pain goes away.

But one well-timed snarky assessment set the agenda for the entire discussion and made a laughingstock out of a guy who asked what is, by any but the most banal guidelines, a perfectly reasonable question. Perhaps we’ll all be lucky and Apple will release a new version of iTunes so everyone can go back to obsessing about the exact shade of blue on various 1-pixel lines.

We’re going back to work now.

Update: The Macalope disagrees and says it was a stupid question, because the answer was obvious that there was no way Apple would ever put those stickers on its products. It was also obvious, at one point, that Apple would never switch to Intel processors, and that it would not build an absolutely flat iMac because Steve Jobs said those “motherboards glued to the back of LCDs” didn’t work well and weren’t what Apple wanted to make. Many people said it was completely obvious that there’d be a native iPhone SDK, or that ZFS would be Leopard’s default file system.

“Obvious” is in the eye of the beholder, and we still say that if you think the answer to “why aren’t you taking free money after announcing lower margins” is obvious, you need to do more beholding.