Author Staff

This seems odd

From Macworld’s article on the Fair Labor Association’s preliminary report of working conditions at Apple supplier Foxconn:

Foxconn told the FLA it plans to reconcile most of these problems, through a variety of means: The company intends to meet overtime standards from both the Chinese government and the FLA itself, improve compensation packages, build new housing and canteen facilities, and more. Foxconn has already put in place a regulation that supervisors and workers are required to report all accidents that involve an injury.

From the report:

Additionally, Foxconn has agreed to change the system by which accidents are recorded. In the past, only those accidents that caused work stoppage were recorded as accidents. Moving forward, all accidents that result in an injury will be recorded and addressed.

It’s the last sentence that’s puzzling. Apple has publicly stated that a major reason for ramping manufacturing in China is that they need lots and lots of industrial engineers. Yet industrial engineers should want all accidents reported.

Now, these reasons are going to sound callous because engineers work with data, not emotions. The zeroth reason (above first) for avoiding accidents is to avoid hurting people. We’re all aware there have been companies and nations that have cared less about their workers’ or members’ health than they should have, and you start getting into that area when you remove the humanity and only discuss workers as “resources.” Yet the only real way we have to analyze problems is with data, and so it’s important that these analysis then be combined with a higher-level, unshakable concern for employee health, well-being, and success. Relying too much on data allows those harder-to-quantify concerns to suffer, and we’re not advocating or talking about that. We’re merely dealing with the data side of things, OK?

Industrial engineers need data to design better processes. Accidents that cause injury obviously have the highest priority not only because of employee concerns, but because they’re bad business (and this is the callous data side): even with an endless supply of cheap replacement labor, it’s better to keep your current skilled workers than to train new replacements. On top of that, injury accidents stop work, slow down everyone else (would you be as efficient just after watching a co-worker get injured?), and depending on the accident, destroy parts or machines that you need for business. These are bad news, and they have to be tracked.

But every accident is bad news for an industrial engineer. An accident that’s not 100% the worker’s fault (carelessness, intoxication, failure to follow specified procedures for personal reasons) means there’s a flaw in the process. If there are three non-injury accidents per day on the iPad assembly line, and each of them destroys one retina display, any decent industrial engineer should want to examine the process and try to find a way to make it so that kind of accident can’t happen.

The 20th century saw massive improvements in manufacturing thanks to industrial engineering. Work studies would find that workers, for example, were sharing expensive hand tools between two stations and therefore reaching in an unnatural direction hundreds of times per day to grab the shared tool, even if assembly was in perfect sync such that no two adjacent workers needed the tool at the same time. By purchasing more tools so each worker had one, it eliminated so many motions per day that production would increase by double digit percentages, allowing the tools to pay for themselves in months. Keeping tools on retractable cords within easy reach rather than cluttering a workbench could turn a 2-minute assembly into a 90-second assembly, allowing for 33% more assembly in the same time with greater comfort. The refinements are real, important, quantifiable, and benefit employer and worker alike.

Accidents mean these processes are failing at some points. Apple has spoken of having “thousands” of industrial engineers to help make these processes. The first thing those engineers should want is to design a process that allows reporting all accidents electronically in no more than 2 minutes. The data could allow redesigning manufacturing to help workers, save money, and improve productivity.

So volunteering to report all “injury” accidents to management? They should want data on every accident. It’s kind of puzzling that they don’t already do this.

Dan Lyons showing self-awareness? What self-awareness?

Dan Lyons tries to say something.

This is typical snarky Lyons stuff. But it’s so arrogant and patronizing that when I read it was brought up short. Because I realized, this guy isn’t joking. Dan Lyons and people like him really believe that Apple just sits around, inventing absolutely nothing, selling overpriced shiny baubles. In their view, all technology is the same, and Apple just makes products whose ideas are all entirely obvious, despite the fact that no one did things that way before.

All offered by a man who couldn’t get one LOLcat’s worth of attention for his writing until he pretended to be Steve Jobs.

Yes, it’s a new site

If you’re seeing a lot of old items marked as new in your RSS reader this morning, it’s because we got around to redirecting the old feed URLs to the new WordPress-powered feed for the new site.  WordPress is a far more stable and pleasant platform than the piecemeal stuff we had been using for the Web side of things, and we’ve long looked forward to getting this server installed and running.

It’s just one piece of the puzzle, though, but as you can see we’re still working on rebuilding for a new era where Apple’s tablet computers lead the world and HP is ditching its entire PC business.  Anyone who says they saw that coming is just lying.  At best, they made wild-ass guesses. We only guessed that the world would change a lot and we needed an infrrastructure that would support that. It’s taking us some time, but we smile at the progress regularly.

For example, this news blog. The original site never anticipated such, and when we glued it on, it wasn’t very sticky.  Posting required using a CMS (to avoid hand-editing and updating of links), then publishing through two servers and running a shell script.  Now we can publish from any browser, or an iPad or iPhone app if we’re feeling “hip” (as the kids say these days).  With some luck, we can post some news updates even as we rebuild other parts. And maybe even allow comments at some point if we don’t think the spam will drive us crazy. (The last thing we’re seeking is additional ways to spend time!)

But we hope you’ll start to hear from us more, at least when we have something useful to say. Putting off saying something for several hours and reconsidering has, many times, convinced us that what we were going to say wasn’t worth your time. We’ll try to keep respecting that.

New York Times: Left hand, meet right hand

Brian Stetler, today on the New York Times media and advertising blog “Media Decoder”:

A new study confirms what some in the technology industry have long sensed: that Apple commands an inordinate amount of the media’s attention.

A yearlong look at technology news coverage by the Pew Research Center’s Project for Excellence in Journalism found that 15.1 percent of tech articles were primarily about Apple; 11.4 percent were about Google; and a meager 3 percent were about Microsoft.

It’s not as if Microsoft lacks for public relations people. But Apple is especially effective at seizing journalists’ attention, said Amy S. Mitchell, the deputy director of the Project for Excellence in Journalism, citing the anticipation for new devices and Apple’s “very public way of releasing products.”

Apple software powers only a tiny slice of the world’s computers, an area dominated by Microsoft. But its popular and innovative iPods and iPhones helped Apple exceed Microsoft’s market capitalization earlier this year.

Ms. Mitchell said she was surprised by the extent of Apple’s domination of the media’s diet, “even over Google.”

On the Firing Line: My 500 Days at Apple, by Gil Amelio (former Apple CEO) and William L. Simon, 1998; chapter 11, “Crack of Doom—Dysfunctional Relationships,” paragraphs 3-7, pages 156-157:

The media blitz about Apple should have been a delightful experience; as hoped for in Barnum’s famous phrase, they were spelling the name right. I once asked for a count of how many articles on Apple appeared in a typical month. The answer our PR department came up with: over 1,000 stories, articles, profiles, and interviews. And this was in a quiet month, when we didn’t have any headline activities going on.

I could well understand an extensive interest about Apple in the Bay Area and the trade press covering high tech. But why this excessive level of coverage in other locations? So I posed the question to a New York Times staffer: “You’re a New York newspaper and we’re a California company, why do you include so much coverage of Apple?”

“Because we sell more papers.”

I asked him to be more specific.

He said, “I can give you the exact statistics. When we run a strong story on Apple, we sell three percent more papers. So we run stories on Apple. That’s the bottom line.”

You can forgive the Pew Research Center for not knowing this, but it’s difficult to extend the same generosity to the New York Times itself.

Why let your story’s facts ruin a provocative headline?



(Excerpted from MacNN RSS feed as captured at the specified date and time.)

Not much shorter, but…

John Gruber, Daring Fireball
Gestures as a Language

  • The consistent touch UI you spent millions to research and develop is so compelling that I have decided your competitors must be allowed to use it for free.

TUAW’s ‘liveblog’ coverage

Earlier today, the MacJournals Twitter account alerted its followers to live coverage of Apple’s music event from Macworld, The Unofficial Apple Weblog (TUAW), and Engadget. (We did not provide live coverage of this event as it was less about the Mac than it was about Apple’s other businesses.)

About an hour later, we backtracked on part of that with a follow-up tweet:

We wouldn’t have recommended TUAW liveblog coverage had we known how vicious it would be. We’ll know for the future.

This generated only two responses on Twitter (both in agreement), and as far as we can find, none in E-mail. Nonetheless, Victor Agreda Jr. (who initiated TUAW’s liveblog coverage) called us this afternoon, identified himself as a full-time employee of AOL, and asked for an explanation of the word “vicious,” assuring us that they take such things very seriously.

One would think it wouldn’t be difficult for AOL to ask for a response on the Internet to a comment on the Internet. Either way, our policy is that since the comment was public, our response is as well, and here it is:

TUAW’s coverage of the event was not the same kind of “liveblog” as from Engadget or Macworld: the people posting the coverage for those two outlets were actually at the event. Only one of the TUAW commenters was actually in the room with Steve Jobs and the rest of the press today, making it, as one person put it (our paraphrase), more of a chat about the event than what we would consider a “liveblog.”

That’s fair, of course, but had we known, we wouldn’t have recommended TUAW’s coverage to begin with. However, what TUAW did wind up posting was all but useless as news coverage. It was aggressively impatient for any announcement that didn’t match the rumor mill that the site had been flogging (for traffic purposes) in the weeks preceding the event, and was indeed viciously dismissive of any reality that didn’t match rumor fantasy.

In other words, it was not about what happened. It started with an expectation of pre-determined rumored products (cameras on iPod Touch models, as predicted by John Gruber; Beatles music, and so on), and degenerated when those were not met.

TUAW’s livebloggers apparently had no idea about new iTunes 9 features, so they discussed (and applauded) items like better sharing, better app management for OS X iPhone devices, Genius for applications, and so on. But when Phil Schiller came on stage to start laying the foundation for any new hardware features, things deteriorated:

10:28 TUAW Host (Mike R.): Reminder all, Sam L. is live onsite

10:28 Tim Wasson: What else ya got for me, Steve?

10:28 Joachim: Phil’s on iPods

10:29 TUAW_DaveCaolo: Here comes Phil!

10:33 Erica: Phil tells us that the iPod is a great pocket computer. Two years late.


10:35 Erica: Hey, I said it’s right up there with Ponies. I *want* but I’m not going to *get*

10:35 TUAW_DaveCaolo: We know the iPod touch is a computer. Move along, Phil.

10:35 Michael Jones: I hope he doesn’t do all of this netbook build-up to just talk about the existing iPod touch.

10:37 Sam Levin: iPhone demo of videos. nice.. ok, where’s the new touch???

It’s worth noting here that Sam Levin was TUAW’s correspondent at the venue. Less than ten minutes after Schiller took the stage to remind everyone exactly where the iPod platform was today, the on-site correspondent was demanding that he stop so Apple could show the new hardware TUAW had been flogging as rumors.

This was necessary, because this event included correspondents from AP, CNBC, and other non-technology people who don’t follow this stuff with a microscope. To explain why the next product is such a great thing, you first have to explain why the current one is a smash hit.

The excerpts above omit many lines of TUAW coverage, but we invite you to compare what you read at TUAW with the same time period in the Macworld live coverage. Macworld provided facts in black text and commentary in brown text, describing what was going on. TUAW was heckling from inside and outside the event demanding rumor fulfillment.

The iPod/iPhone platform would be a nice curiosity without the App Store, but when Schiller took the time to demonstrate new games targeted for the iPod market—the subject once again of Apple’s holiday marketing campaign for the iPod Touch—the cynicism quickly took over:

10:38 Erica: Just announce the new iPod touch please […]

10:38 Tim Wasson: Just show us the camera.

10:38 Erica: Wasting time with demos from developers. Means they pushed another product back?

10:38 TUAW_DaveCaolo: If they’re spending so much time on something the touch has done since its inception, then iTunes 9 + iPhone 3.1 + New touch is it.

10:39 TUAW Host (Mike R.): Ars: Time to take a bathroom break

10:40 Joachim: did they need to take *this* long for demos?

10:40 Megan Lavey: *taps foot* Come on, Apple, I’ve got a copy of Rock Band: The Beatles to pick up.

10:41 Josh Carr: I’m afraid erica could be correct… they’re wasting time on dev-speak.

10:41 TUAW_DaveCaolo: Parade of developers = zzzzzz (with all respect to developers)

“With all respect to developers, you are boring and you’re boring us and you should stop that because we have rumors we’ve been flogging!

There’s really just no way to describe this other than vicious. As soon as the event stopped providing news they hadn’t heard, and left unresolved rumors, the site’s correspondents (all text quoted is from TUAW staffers, not from the public at large) petulantly demanded that Apple stop providing information that mainstream reporters needed to come close to the proper context, and instead resume new announcements at a pace that would have created a fifteen-minute event. It was completely bereft of any understanding that such events have to serve an audience larger than, well, TUAW staffers.

It’s what our grandparents used to describe as “can’t see past the end of their own noses.”

To his credit, Victor Agreda (who asked us to explain our words) seemed to get it:

10:45 Victor Agreda Jr: So far all the games shown look pretty awesome. Maybe boring to us, but some Windows friends are most excited by these announcements

Sadly, most of his counterparts simply couldn’t achieve the same self-awareness. Schiller showed graphics demonstrating that a Dell netbook really isn’t a pocket-sized device, attempting to make mainstream reporters realize that the iPod Touch is pocket sized and very powerful. TUAW staffers said:

10:46 Erica: I’m still thinking: Why do the Dell tease at all?

10:46 Erica: If there is no payoff

10:47 Michael Jones: Erica: agreed. It seemed like an odd buildup if they weren’t going to do anything with it.

A few bright spots:

10:47 Tim Wasson: Erica, I think the payoff is that the touch is better than the netbook.

10:47 Megan Lavey: Or maybe the point was to show that Apple doesn’t need no stinkin’ netbook.

10:47 mikeschramm: I can see it as just a little jibe at the other manufacturers

…contemporaneously shot down:

10:47 Erica: Nobody games on netbooks

10:47 Erica: Nobody sane that is

(The above excerpts are more intertwined in the actual chat, which you can read for yourself.) In other words, showing the iPod Touch running gaming can’t be a shot at netbooks because “nobody sane … games on netbooks,” so mentioning a netbook must have meant Apple was meant to introduce its own netbook—a product type Apple’s executives have repeatedly said they’re keeping an eye on but that, at present, does not provide the experience they want to associate with the Apple logo.

There were plenty of other complaints that Apple had the temerity to talk to people other than TUAW’s hyper-focused crew, but you get the idea pretty clearly: demands that anything but new product announcements simply stop, completely, because if TUAW’s crew didn’t need demos, nobody possibly could have benefitted from them.

When hardware announcements did start, TUAW’s writers were temporarily mollified, but quickly returned to iPod Touch camera rumors as soon as they saw specs on a new iPod Touch that did not include a camera. When it became clear there was no iPod Touch camera, the disappointment came back fast:

10:57 mikeschramm: On a scale of 1 to 100, I rate this event an iTunes 9

It briefly crossed Erica’s fingers that the camera rumors might be bunk, but once a camera appeared on the iPod Nano, TUAW seemed to admit no possibility that the iPod Touch camera rumors were simply wrong:

11:02 Josh Carr: There have been rumors about the iPod touch camera failing in the test phase… with this report, i’d say there’s some chance it’s true.

Of course, for rumormongers, rumors can never fail: they can only be failed. Rumors are never wrong; something must have happened within Apple or its suppliers to explain why the rumors didn’t come true. This usually manifests as news stories blaming Apple for not having produced a product that the company never intended to produce, a shared lack of self-awareness.

Near the end, a bit of the missing self-awareness slipped in:

11:10 mikeschramm: Why is everyone saying this apple event failed? We got everything we expected but Beatles. No one really expected a tablet, did they? really?

11:12 mikeschramm: the camera in the touch is a legit complaint about this event, but nobody gets to whine about no tablet, that was a pie in the sky

Nowhere does TUAW’s coverage bother to address why no camera in the iPod Touch is a “legitimate complaint.” Because it didn’t meet the promises of people who don’t work at Apple and who do not design the products?

This is like us reporting that TUAW is about to roll out a new design that allows for instant thought-based weblog posts of any news item, eliminating all the typing and proofreading, so they’ll have the most accurate and up-to-date coverage of live events ever. When that doesn’t happen, should TUAW be criticized? Did they fail to meet expectations? Did the new system fall apart in testing, or they just incapable of providing what they needed? Assuming that any rumor must be true is ridiculous.

The most aware post of the entire “liveblog” came from Mike Rose near the end:

11:19 TUAW Host (Mike R.): OK gang we will wrap it up here… Thanks to everyone for turning out — I think our ratio of participants to actual news was higher than it’s ever been… 🙂

Perhaps that’s why TUAW’s participants were so aggressively unaware of their demands that the event be tailored to them, rather than understanding it was an event for the media at large, and that it was not there to valid the rumors they’d printed to generate traffic:

We like TUAW. It’s on our list of daily reads, and it’s staying there. Any outlet is free to cover rumors if it wishes, no matter how often such coverage proves to waste the time of its readers. Coverage of live events doesn’t need to be dry and colorless, either.

However, we found today’s coverage viciously unaware and unsympathetic of anything beyond TUAW’s own narrow view of the technology world. TUAW aggressively dismissed anything that wasn’t a new product announcement, said that Apple’s failure to meet false rumors were “legitimate complaints,” and provided no context for why anyone should have believed any of the rumors other than the fact that they were actual rumors.

Despite using the Flash-based CoverItLive service that made live updates flow smoothly to our (non-iPhone) browsers, it was not useful to our readers, nor to anyone who hadn’t spent time following and dissecting unsourced and unfounded gossip. We would not have recommended that readers follow the live coverage had we known this, and we will hesitate to recommend TUAW live coverage in the future because of it.

TUAW’s later published coverage of today’s events is more considered and useful, though it still maintains an unhealthy tone of wondering why rumors didn’t become reality, rather than ever asking why people believed rumors that turned out to be false. TUAW is far from alone in this myopia, but it’s not nearly at the level that permeated the live chat, and should not dissuade you from reading more if you seek more information about today’s announcements.

On Phil Schiller’s credibility

John Gruber today posts a letter from Phil Schiller, senior vice president at Apple, regarding the company’s recent decision to reject a dictionary app from the App Store because it contained “vulgar” words. Gruber has been understandably indignant about the matter, and the resulting publicity is making Apple look bad, so the company is (also understandably) out to do some damage control.

Without getting into the whole thing, Schiller says Apple did not ask the developers of the dictionary application (based on Wiktionary, which Schiller consistently misspelled) to censor their product; Apple only said that until parental ratings were available so such vulgar words could be restricted to “17+” purchasers, the app could not contain the vulgar words. The developers had no idea when iPhone OS 3.0 with Parental Controls would ship, so their choice was “wait for an unknown amount of time or censor the dictionary and ship it now.” They chose the latter. They might have chosen the former if Apple had provided any specifics about release dates before WWDC, but that’s another story.

Gruber writes that “after going back to Ninjawords’s developers and conferring with some trusted sources within Apple, I believe what Schiller says here is genuinely the case,” and later adds, “I believe Phil Schiller that Apple’s policy is not to reject App Store dictionaries for containing swear words.” Gruber then goes on to point out several clear examples of how “this policy has not been consistently enforced.”

We would take one further step back and remind readers that, in MDJ‘s view, Schiller does not deserve the benefit of the doubt because in the past, when Apple faced embarrassing press coverage over its own stupid actions, Schiller went to the press and said things that he either knew were not true, or should have known were not true.

We last reviewed this story in MDJ 2008.10.14, from whence the following excerpt originates:

To understand what’s going on, you should restart the WABAC machine and travel to the previous leap year. Until mid-2004, Apple’s security update policy was even worse than it is now. Security Updates included huge numbers of components not even mentioned in the release notes. For example, from reading the notes for Security Update 2004-05-03, you’d never know that this update included changes to Mail for the then-current Mac OS X 10.3.3, or that the Mac OS X 10.2.8 version included undocumented changes to Safari, Directory Access, Classic, the ISO 9660 filesystem, Web Kit, OpenSSL, Rendezvous (now known as Bonjour), and more. (MDJ 2004.05.05) Some of these were probably part of previous security updates that Apple “incorporated,” but it didn’t say so.

That 2004 release was just the latest of a long line of poorly documented Security Updates, but the fortress around security information rapidly crumbled. Security Update 2004-05-03 included a fix for an AppleShare problem, credited to “Dave G. from @stake,” that Apple said only “improve[d] the handling of long passwords.” However, @stake itself (purchased last year by Symantec) advised the world that this “long password” issue was in fact a buffer overflow concerning password handling, one that allowed attackers to execute code with root permissions. It wasn’t theoretical, either: @stake told MDJ that the firm had developed an exploit that allowed them to run code as root on any system with the buggy version of AppleShare. Apple, for its part, refused to admit there were any root exploits.

Shortly before this, Apple released QuickTime 6.5.1, fixing a bug that Apple described as a simple crasher: “Playing a malformed .mov (movie) file could cause QuickTime to terminate.” The company that originally reported the vulnerability to Apple, eEye Digital Security, then told CNET News that the bug was more serious and allowed attackers to hide executable code in a movie file.

Later in May, everything fell apart for Apple. Vulnerabilities in URL scheme mapping allowed malicious Web sites to remotely mount a disk image on your computer, so an attacker that induced you to visit a bad Web page could mount a disk on your computer, either by mounting it directly from a remote server or by forcing Safari to download a “.dmg“ file that, using Safari’s default settings, would then mount locally. A companion vulnerability in Help Viewer allowed the attacker to use a URL to force Help Viewer to open a system AppleScript that could then open any file—including an application on the malicious disk image. Just like that, attackers could make Safari launch a malicious program on your system (MDJ 2004.05.21).

Apple closed the Help Viewer vulnerability a few days later (MDJ 2004.05.24), but as people examined the custom URL scheme handling, it became more and more clear that it was just far too easy for attackers to use malicious URL schemes to open programs without your permission, or mount disk images, or execute command-line programs, or worse.

But if Apple’s dishonest documentation was unnerving, the next round of revelations was infuriating. The URL scheme bug and the Help Viewer bug had been reported to Apple three months beforehand, in February 2004. The German developer who reported the issues had Web server logs showing that Apple-owned IP addresses visited his test site to reproduce the issue in February, and then Apple buried it. The company released three separate Security Updates after the vulnerability was reported and before the developer went public with it—a move he had told Apple well in advance he would make if the company had not fixed the vulnerability within three months. Not only did Apple not fix the bugs, Apple did not even respond to the developer, despite his repeated urgent messages about the problem.

After he went public, the very next Security Update fixed the Help Viewer bug (MDJ 2005.05.25), but the next week saw Mac OS X 10.3.4 released without the Help Viewer fix included. Apple’s earlier fix in Security Update 2004-05-25 strongly suggested that Apple had no intention of fixing the Help Viewer vulnerability until it went public, because the fixed version was not baked into the OS update. (MDJ 2004.06.02) It took another week, with Security Update 2004-06-07, for Apple to rush out the beginning of “Download Validation” and quarantining that introduced the concept of “safe” files and warning you when opening newly downloaded files. (MDJ 2004.06.08)

By this point, the mess in the technical and business press about Apple’s huge security holes had real consequences. Security Update 2004-06-07 was the first one documented in the “modern” style, where every top-level component is mentioned with specific (and accurate, to the best of anyone’s knowledge) descriptions—no more including mystery fixes to components that weren’t even supposed to be in the update. In the next calendar year, Apple adopted the sequential yearly numbering of Security Updates, starting with Security Update 2005-001.

But Apple saw that there had been damage done, and rather than fess up to it, the company sent executives to the press to speak falsely about the issues. Phil Schiller, then as now a senior vice-president of Apple, told Macworld on 2004.06.07 that the risks of these vulnerabilities “are still in the realm of potential risks, not actual risks.” As MDJ said at the time, Schiller’s remark is the same as saying that a bomb is not a weapon until it explodes—transparently ridiculous.

Schiller also told CNET News that week that the February bug report “was only a small piece of the picture and didn’t present as great a threat,” and that “the complete picture of this current threat has actually been very recent. That, too, was demonstrably false: the developer explained the entire vulnerability in his February bug report, as he said in his public online warning and later confirmed to Wired’s Leander Kahney. MDJ has cautioned readers ever since about trusting any technical pronouncement from Schiller: the chronology makes it quite likely that Schiller knew at the time that his statements were false (MDJ 2004.06.08).

We do not offer an opinion as to whether Schiller is being truthful in the App Store censorship matter. We only point out that his past statements when Apple was under fire mean that he does not get the benefit of our doubt. If Apple’s policy truly is not to censor applications for “including references to common swear words” (or ask their developers to do so to gain approval, either explicitly or implicitly), we’ll see the results in the App Store, and Schiller will have won back some credibility.

If he is dissembling, we’ll continue to hear stories from developers whose software was rejected because of such references, and it will be clear to anyone paying attention that Schiller’s press statements about how Apple didn’t do awful or stupid things simply cannot be trusted.

We’re willing to entertain the idea that Schiller’s telling the truth. We’re just not assuming he is.

CNBC: willfully ignorant?

MDJ has previously noted that CNBC, the financial news network partnership between NBC Universal and Dow Jones (now owned by News Corp.), has such strong ratings among financial professionals that, for all intents and purposes, it sets the narrative about breaking financial news. When CNBC gets it wrong, Apple (and to varying degrees, Apple’s customers) have to fight first just to set the record straight. Our coverage of a particularly egregious episode a year and a half ago was reprinted by, if you’d like to read it.

Today’s live coverage of Apple’s latest record-breaking quarterly results only eneded about an hour ago as we post this (we live-tweeted the conference call, if you’d like to see our real-time updates from it). In all fairness, Silicon Valley reporter Jim Goldman did much better than 18 months ago, and in fact improved not long after that particularly bad day.

Nonetheless, it’s dismaying how eagerly the network’s on-air talent appear to be to spout misinformation, such as bogus “facts” that someone at CNBC should have used an earpiece to correct as soon as they were put on the air.

Fortunately, you don’t have to take our word for it. CNBC is wired enough that the two segments in question are already available online, starting with this segment from the top of the show featuring Apple’s results and a report from Jim Goldman.

Goldman acquits himself well here, but even as he does so, the onscreen graphics starting at 1:16 into the video says “APPLE FORECAST DISAPPOINTS.” This is an all-too-familiar story, as our January 2008 story points out. This time, none of the on-air talent actually said that Apple’s forecast was “disappointing” in that it was, as it always is, below Wall Street’s earlier estimates—but the on-screen graphics said the same thing. We can’t begin to guess how many financial professionals have CNBC on but muted during calls like this, and they didn’t hear the correct words on the air—they saw only the incorrect graphics.

The anchor crew did address the topic, as you can see in the video starting at 3:05, saying that everyone anticipated Apple would produce guidance below what Wall Street was estimating, and that was exactly what happened. Pete Najarian was very positive on Apple’s performance, despite an unfortunate desire to rename Apple’s products to suit his needs. He repeatedly referred to the “iTouch.” (If we get to rename things that other people named, we’re calling Najarian “Loud Bald Guy with Unfortunate Ponytail.”)

It was Karen Finerman of Metropolitan Capital who forfeited her credibility at the 3:46 mark:

I don’t even know why they [Apple] bother to give guidance. The only thing we know about their guidance is that that’s not going to be the number. We don’t know what it is. [Interruption: “They’re going to beat that conservative guidance.”] Most likely, they’re going to beat it. We know that’s not going to be the number. I don’t even know why they bother. It’s an exercise in… [crosstalk, “underpromise!”] but they do it so often now that the one time where they actually don’t, it’s going to be a disaster.

No one corrected Finerman, even though at the top of the show, anchor Melissa Lee correctly stated that everyone expected Apple to report guidance like this. Everyone also knows why, as we said in January 2008:

Peter Oppenheimer revealed several quarters ago that Apple issues guidance that the company is “relatively certain it can meet.” Apple’s guidance is not the center of an expectations interval, much less the high end of that: it’s the low end, and has been for years, and Apple has not been hiding this for some time. Apple gets punished so badly in the stock market any time it doesn’t meet its own guidance that, out of a surplus of sanity that’s clearly not about to affect Wall Street, the company simply stopped issuing guidance that it wasn’t nearly certain it could meet. The estimates of financial analysts are always higher, because they’re projecting actual results, not lower boundaries.

This was well known a year and a half ago. Peter Oppenheimer actually repeated the same thing in today’s conference call (our transcript, from about 22 minutes into the call answering a question about why some of the Q4 guidance was lower than the analyst had expected):

We give you guidance that we have reasonable confidence in achieving, so no change in our thinking.

Everyone expected it because it’s an extremely well-known issue—except to the highly paid financial professionals that CNBC puts behind the trader’s desk to explain it to everyone else.

About 15 minutes later, Goldman was back with his only big mistake of the day, one that’s unfortunate but understandable. It’s about 7:20 into this video:

In a conference call update, Goldman referenced his own tweet that said, as seen on-screen, “cnbcfastmoney: Apple CFO: Half Macs Sold in Quarter Were To People Who Never Owned Mac Before”. The tweet was timestamped “half a minute ago from web”. Goldman said:

This is an interesting factoid: half the Macs sold during the company’s quarter, especially through its retail stores, better than 470,000 of these, were sold to first-time Apple buyers. This is a very important fact because what it does is it speaks to Apple’s ability to expand the marketplace, to expand its market share. And this is a trend that we have seen developing over the past several quarters, that these Apple stores have become a magic bullet now, its own sort of halo effect, to generate more of the “Mac faithful” if you will. Once they go in and they buy a Mac, then the question is, do they buy an iPod? Did they already buy an iPod or an iPhone? And now they’re buing a new computer and switching to Apple? This is very good news [on] a trend that’s developing nicely.

It is a “very important fact” in the sense that it’s not a fact at all. Here’s what Apple’s chief financial officer Peter Oppenheimer said about nine minutes into the call, reading from his prepared statement (our transcription):

Our stores sold 492,000 Macs, compared to 476,000 Macs in the year-ago quarter, and about half the Macs sold in our stores during the June quarter were to customers who never owned a Mac before.

It was in the middle of an update all about retail, so there should have been no confusion: Oppenheimer said, clearly, that half of Macs sold through the retail stores were to customers who had never owned a Mac before. Goldman translated that into half of all Macs, but “especially” in the retail channel. Apple only knows if customers had Macs before if it asks them and they answer, and that only happens at retail stores, not through other distribution partners.

What’s more, Oppenheimer was probably a little loose with his own wording. The metric Apple has used for the past several years is not “never owned a Mac before,” but something the company has called “new to Mac,” a phrase that Apple has used historically to mean people who were not using a Mac computer at the location for which they bought their new Mac (MDJ 2007.04.27). Apple’s gaining a lot of switchers, but there is no evidence that half of all Mac sales are to “new to Mac” customers. CNBC’s on-screen “BREAKING NEWS” graphic said exactly the opposite: “APPLE: HALF OF MAC SALES IN QTR. TO NEW MAC USERS”

In a later segment in the Fast Money show, the traders behind that anchor desk just went completely off the rails.

Tim Seymour, billed as “founder and Managing Partner at Seygem Asset Management, asked:

Hey, Jim, I’m hearing some rumors about the iTouch adding a camera and a microphone to basically bring this to the point where people don’t need a home phone—they’re taking it to that next step. There’s a lot of talk about that. People are looking for the next exciting thing from Apple. What do you think?


This is where you can actually feel sorry for Goldman, who has to make this look sensible (CNBC has already fired talent from this show, this year, for insulting the other talent on the air). Goldman referenced Wired’s rumor report that a future iPod Touch will have a camera and a microphone, making videoconferencing possible over WiFi without an iPhone and without requiring a cellular connection—perhaps a sticking point with Apple’s carrier partners who don’t want to carry that much data over their cell networks.

But how, exactly, do you get from “handheld device that can videoconference only over WiFi” to “no longer need a home phone line?” Live TV is known for non-sequitors, but that’s got to be one of the all-time great ones, at least about technology. “We’ve heard Apple is about to add push notifications to thousands of iPhone and iPod apps, so people will finally be able to get rid of their street addresses. What do you think?”

We want to be clear that CNBC’s performance today is worlds ahead of where it was 18 months ago. You can speculate all you want about future products, or how important a “halo” effect is (or how important each of Apple’s handheld devices is to feeding into that effect), or the importance of enterprise sales of iPhones that really shouldn’t surprise anyone but it proves tough to shake people off the false “businesses and government agencies don’t buy Apple products” idea. Expert opinion is welcome—but for the love of dogcow, can you please start with a foundation of facts?

It’s better than it was. It needs to get better still.

(In the spirit of openness, it seems only right that we correct one of our own mistakes. During the call, we live-tweeted Goldman’s voice from the teevee saying that for the first time, iPhone revenue has eclipsed iPod revenue. We did not hear, and did not report, that Goldman credited Andy Zaky with this insight, or we would have attributed it appropriately. Our apologies to all concerned for our mistake.)

Unexplained Twitter failure during WWDC 2009

If you follow @macjournals on Twitter (thank you), you probably noticed that our live coverage of the WWDC 2009 keynote came to an abrupt end at 11:11 AM PDT (2009.06.08 1611 GMT) with this tweet:

You undoubtedly know that the keynote continued beyond that point. You can view the event as a live stream, or download it to your computer (or iPod or Apple TV) by subscribing to the Apple Keynotes podcast in iTunes, but that doesn’t explain why our updates stopped after 63 messages.

At least we weren’t alone: virtually the same thing happened to the Twitter coverage from @maclife. A reader told us that the same happened to @macrumors, but their coverage seemed to have come back and filled in the gaps, even though we’re told the live updates stopped during the event.

One significant difference: @macrumors only posted about 20 tweets during the keynote. We, and @maclife, posted significantly more (63 for us in the first hour, as noted). We mostly use @macjournals for live event coverage, and 63 messages shouldn’t be any problem at all, especially given Twitter’s documented limits:

What are the limits?

We’re starting with a few limits based on various parameters, and we’ll be adding more as time goes on. We reveal some limits only when you reach them, and tell you about others in advance. Twitter currently applies limits to any person who reaches:

  • 1,000 total updates per day, on any and all devices (web, mobile web, phone, API, etc. )
  • 1,000 total direct messages per day, on any and all devices
  • 100 API requests per hour

We’ve also placed limits on the number of people you can follow. The number is different for everyone, and is based on a ratio that changes as the account changes. If you hit a follow limit, you must balance your follower/following ratio in order to follow more people- basically, you can’t follow 50,000 people if only 23 people follow you. Based on current behavior in the Twitter community, we’ve concluded that this is both fair and reasonable.

Given this knowledge, you can understand that when updates stopped flowing, we at GCSF World Headquarters assumed that network access at the venue had broken down, or John’s device had drained its battery, or something similar. So we tried posting a couple of updates from here linking to other coverage.

Those didn’t show up either. We had a mystery.

In an attempt to get back to the basics of the problem, we posted an update from Twitter’s Web page, using no client other than the service’s own Web interface. (This would rule out any chance of it being a Twitter API problem or limit.) After doing that, Twitter’s Web page displayed something strongly resembling a sheet sliding out from the top of the page that said something very similar to this:

Wow, you’ve tweeted a lot today! You’ve exceeded your capacity for now; try again later.

(I apologize for not having exact wording or a screen shot; I was so surprised that it simply didn’t occur to me)

We have been unable to find any Twitter documentation explaining how 63 messages in 67 minutes triggers any documented limit. What’s worse, though, is that Twitter did not return errors to Twitter clients while refusing these messages. Until trying the Web interface, we had no idea Twitter was receiving our messages, only to discard them.

We tried a couple of different Twitter programs during this “tweeted too much” period, and everything we tried accepted our messages without complaint. They just didn’t show up. They never showed up, not even days later. And we were never told. Had I not tried to use the Web interface, I would not have seen the mysterious “you’ve tweeted too much” sheet, and I still wouldn’t know what happened.

We have yet to find any explanation for what happened, or any explanation of what is obviously a Twitter limit policy. You can imagine a Twitter program showing a message about an application-imposed limit, but the Twitter Web site itself only displays messages sent by Twitter’s servers.

This raises serious questions for us about using Twitter for live event coverage. We chose Twitter for live events because of its simplicity. We send simple, small updates to the service, and it makes them available to you in whatever way you choose: text messages, via a Twitter client (at an update rate you choose), via RSS feed, or just via the Web. “Liveblogging” is more complicated because in addition to adding content at a furious pace, we also have to keep the HTML updated and published, and one mismatched tag can make the page undisplayable. Twitter takes care of those details and many more for us, and you don’t even have to sign up to see the updates on the Web or via RSS.

That falls apart when there are hidden, undocumented limits on what we can send, and it dissolves into protoplasmic goo when messages are accepted without error and then discarded. That’s what happened on Monday: John spent the next hour or so after the last message sending live coverage of the event to Twitter, which then threw his messages away without telling anyone. Those writings are now lost forever. That’s never going to be acceptable.

We’re not even sure how to ask Twitter what happened, and right now, it seems like they’re busy dealing with the Twitpocalypse anyway. We’re not sure what we’ll do for live event coverage going forward, but we definitely need to find some assurances from Twitter about what already happened on 2009.06.08, and instructions on how to avoid it in the future. If Twitter doesn’t explain, or the limits are too onerous for live event coverage, we’ll have to seek out a different service.

If it comes to that, we’ll let everyone know both here and on the @macjournals Twitter feed. We apologize for the inconvenience, but to the very best of our knowledge, it was not our fault.