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Archive for October, 2011
Tuesday, October 25th, 2011
Bluetooth 4.0, which can be found inside the iPhone 4S and the latest MacBook Air and Mac Mini, is being rebranded by the group that controls the technology. The Bluetooth Special Interest Group announcedthat Bluetooth 4.0 devices would be called Bluetooth Smart Ready and Bluetooth Smart, in order to differentiate the type of products featuring the technology.
What is Bluetooth 4.0?
Bluetooth 4.0 is the latest version of the wireless technology found in many electronic devices and peripherals today, including smartphones, tablets. The updated 4.0 version is only found in the iPhone 4S and the latest MacBook Air and Mac Mini, with more manufacturers expected to jump on board in the coming months. The improvements brought by Bluetooth 4.0 include drastically reduced power consumption via a low pulsing method that keeps devices connected without the need of a continuous information stream.
What is Bluetooth Smart?
Bluetooth Smart will represent a new breed of Bluetooth 4.0 peripherals: sensor-type devices like heart-rate monitorsor pedometers that run on small batteries and are designed to collect specific pieces of information. These Bluetooth Smart devices include a single Bluetooth 4.0 radio that will connect only to Bluetooth Smart Ready devices.
What is Bluetooth Smart Ready?
Bluetooth Smart Ready will refer to devices that use a dual-mode radios, which can handle both the 4.0 technology, as well as classic Bluetooth abilities, such as transferring files, or connecting to a hands-free device. So, for example, the iPhone 4S, a Bluetooth Smart Ready smartphone, can connect to the Bluetooth Smart heart rate monitor with Bluetooth 4.0, but it will also work with classic Bluetooth devices, such as hands-free kits or your car’s stereo.
Here’s an overview of the new Bluetooth 4.0 compatibility scheme.
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Monday, October 24th, 2011
Of the 470,000 Wi-Fi connections made on a recent day at Abilene Christian University, fully 94% used the 2.4GHz band, representing an extreme example of how today’s surging number of Wi-Fi clients is crowding the band least able to accommodate them.
At ACU, this is not considered a problem, at least not yet. In part, that’s because of careful wireless LAN design and capacity planning. And partly because a goodly percentage of mobile devices that can run on the alternative 5GHz band, do so: on that same day, 47% of the school’s laptops and desktops, and two-thirds of its iPads cruised on 5GHz, via either 802.11a or 802.11n.
Yet relatively few of today’s Wi-Fi clients support 5GHz.
“The challenge isn’t that 5GHz-capable devices are not connecting the 5GHz band, but rather the challenge is there are too few devices that have 5GHz capabilities,” says Arthur Brant, ACU’s director of networking service. “The 2.4GHz band is congested, a symptom of the number of devices that only operate on that band, and the limitation of its [only] three non-overlapping channels.”
A growing concern
This congestion is a growing concern and, in some cases, a problem on college campuses. More schools are rebuilding campus-wide Wi-Fi networks that now are designed for 5GHz. That means more costs, including half as many access points and associated cabling and ports, because the higher frequency doesn’t penetrate walls as well. But it also means four to six times the number of non-overlapping channels, much greater capacity, and a clean radio frequency.
At a range of schools, IT staff say 50% to 60% or more of their current Wi-Fi device population, including the tidal wave of smartphones and other mobile devices, are stuck with the 2.4GHz band. [See "Wi-Fi client surge forcing fresh wireless LAN thinking".] Somewhat surprisingly, that’s true for many laptop PCs, such as Dell’s value-line of Inspiron laptops and its higher performing XPS line, though the latter do offer a $35 upgrade to a dual-band Wi-Fi radio.
“Since most users don’t understand the difference, they don’t change this option,” says John Turner, director for network and systems, at Brandeis University in Waltham, Mass. The Brandeis Wi-Fi network, based on Aruba’s dual-band access points, benefits from the growing popularity of Apple Macs. About 50% of the students have them “and will connect on the 5GHz band nicely,” Turner says.
“Our jobs would be easier if clients just all did a good job using the 5GHz band and left the 2.4 for other devices, like the [Nintendo] Wii and lower-power devices like smartphones,” he says.
But they don’t. That’s partly because of decisions by radio and device manufacturers and partly due to the 802.11 standard, which from the outset has control of wireless access in the client radio, not the access point. More Wi-Fi brains and control is shifting slowly to the network, as vendors implement optional parts of the IEEE 802.11 standards, and the .11 working group develops new standards. [See "Major Wi-Fi changes ahead"]
At University of Massachusetts/Amherst, the WLAN for campus residence halls has been redesigned for 5GHz (though service on 2.4 is still offered). So far this year, the campus Aruba network has identified 47,000 unique Wi-Fi devices, with just over one-third making use of 5GHz.
The resulting interference levels are high in the residence halls in the 2.4 band, and during peak periods in the evening users on this band see throughput ranging from 5M to 10Mbps. But clients on the 5GHz band, “regularly showed performance in excess of 20Mbps” all day, according to Rick Tuthill and Michael Dickson, network engineers with the school’s Office of Information Technologies.
The 2.4GHz junk band
“We would certainly like to see more clients choose 5Ghz when available, because we believe we can deliver a better experience there,” says Dan McCarriar, assistant director of network services at Carnegie Mellon University in Pittsburgh. “The general perception in IT, and it matches our experience, is that 2.4GHz has become somewhat of a junk band, with all the consumer Wi-Fi routers and ‘hotspot’ devices that prefer it.” In off-campus sites leased by CMU, “it’s not uncommon to see dozens of competing SSIDs and ad-hoc devices operating in 2.4GHz frequencies, causing co-channel and adjacent channel interference and any number of other headaches.”
Even where congestion isn’t a problem the collection of “junk” on the 2.4 band can bog down performance. “The older equipment slows down the network for everyone, not just the older clients,” Turner says.
Gaming systems add another, related set of problems. “These clients, like Xbox, Wii, and TiVo, have very old network cards and don’t play well at all with high-speed networks,” Turner says. “In fact, Wii consoles require your network to support a very slow data rate – 2Mbps – or they won’t even connect! In our enterprise network, those clients hang on to the 2.4 signal for dear life, despite our having access points nearly every 75 feet.”
Users with high-throughput 802.11n radios in spiffy new laptops often can’t get the most out of that higher throughput, says Marcelo Lew, wireless enterprise administrator at the University of Denver. “You have a Ferrari, but if you are sharing a single-lane road [2.4GHz band] with a lot of other Ferraris, you won’t go very fast,” he points out. “Now, move the Ferrari to a five-lane highway [5GHz band] and you will be able to move a lot faster.”
A better Wi-Fi highway
The IT groups are taking a number of steps both to build the five-lane highway and get clients to use it. As mentioned, many are redesigning their WLANs for 5GHz, creating smaller Wi-Fi cells and boosting capacity in the process, making the 5GHz signal pervasive. Wheaton College in Norton, Mass., is upgrading its dorm network from 802.11abg to dual-band 802.11n, with the access point placement based on 5GHz. “More in-depth shifting of clients to 5GHz will depend on our ability to expand 5GHz coverage,” says Steven Hess, Wheaton network administrator.
UMass/Amherst’s minimum system requirements for student and faculty include “dual-band Wi-Fi-certified adapter, and before arriving on campus, students are given information on what they can do to “lower the overall noise in the 2.4GHz band,” according to Tuthill and Dickson.
Secondly, more of them are switching on the automatic “band-steering” feature that WLAN vendors now support. When a dual-band client radio switches on, it “probes” for a wireless access point. The access point with band-steering temporarily “hides” the 2.4GHz band from the probe. So the client concludes that only 5GHz is available, and then connects using that band. Afterward, it’s able to use 2.4 if needed for longer range connectivity.
“In locations with band steering turned off, we have almost no 5GHz usage, says Ethan Sommer, associate director of core services at Gustavus Adolphus College in Saint Peter, Minn. “In our new academic building, where I turned on band steering, I think we have almost 4:1 in favor of 5GHz. I guess we should experiment with turning it on in more places.”
Other changes include: setting up a separate SSID for the 5GHz band, and naming it something like “(university name)-fast” to encourage user adoption; and switching off the lower data rates for each connection mode, especially for 11b and 11g.
Many IT staffers say Wi-Fi problems are client-related, often due to aging or badly written drivers. Often, updating the driver fixes the problem. UMass/Amherst is trying out a new program of loaning students who report particular types of network issues a replacement USB Wi-Fi adapter that supports both radio bands. If the adapter solves the problem, the student is encouraged to buy and use the same model.
The influx of Wi-Fi clients that can only use the 2.4GHz band is putting the RF environment under stress. IT groups are responding with better spectrum planning, redesigning WLANs around 5GHz, shifting as many clients as possible to that cleaner band, and using the 2.4GHZ band more efficiently.
“I’d say the 5GHz band is our preferred future,” says CMU’s McCarriar. “But in the ‘bring your own device’ environment that many universities have lived in for years, we’re ultimately at the mercy of the device vendors doing the right thing in designing and testing their products.”
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Sunday, October 23rd, 2011
 iPad 2 owners who use the Smart Cover and Smart Cover unlocking in iOS 5 are exposed to a bug that can potentially leave sensitive information open to others, Apple blog 9to5Mac is reporting.
According to the blog, if users have Smart Cover unlocking enabled in iOS 5 and use a Smart Cover to protect the iPad 2, the last screen they left open before locking the tablet can be accessed with some trickery.
In order to recreate the flaw, 9to5Mac says users must have the iPad 2 password-protected. After the device is locked, those who want to gain access to data need to hold the power button down so the software reveals the slider allowing them to power the tablet down. On that screen, users must close the Smart Cover over the iPad 2, open it back up, and click the “cancel” key. Upon doing so, they’ll be brought to the last screen that was open on the tablet.
If users lock their iPad 2 on the home screen, those who access the tablet won’t be able to click any applications, 9to5Mac said. However, if an application is left open, users will be able to interact with it, even though the device is technically locked.
Although there are several steps required to recreate the flaw, it can be troublesome. As 9to5Mac points out, if users leave open their e-mail platform on the tablet, that data can be accessed.
9to5Mac’s discovery is the second potential security flaw to arise this month. Earlier this week, CNET reported that Apple’s voice-activated personal virtual assistant, Siri, has a flaw that lets folks make phone calls and send e-mails or text messages from the password-protected iPhone 4S‘ lock screen.
However, MacWorld reported last week that in order to fix that flaw, users need only to turn off Siri support in the operating system’s Passcode Lock settings.
The flaw 9to5Mac came across is similarly easy to fix. According to the blog, users need only to disable Smart Cover unlocking in the operating system’s settings pane to ensure others can’t exploit the bug.
Apple did not immediately respond to CNET‘s request for comment on 9to5Mac’s findings.
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Monday, October 17th, 2011
 The iPhone 4S is not the last major project that Steve Jobs worked on, according to one analyst. That would be the next iPhone–let’s call it the iPhone 5.
The next-generation iPhone “was the last project that Steve Jobs was intimately involved with from concept to final design. For that reason…this product will establish the high water mark for iPhone volumes,” Ashok Kumar, an analyst at Rodman & Renshaw, wrote in a research note this week. He expects the iPhone 5 to be a “cult classic” because of Jobs’ involvement.
In the note, Kumar said the phone will have a slimmer profile and larger screen size but with the same dimensions as the iPhone 4S (the relatively-small 3.5-inch screen is not one of the 4S’ best features). The iPhone is also expected to have LTE, or Long Term Evolution–what’s sometimes referred to as 4G.
Another source, who I spoke with this week and who claims to have knowledge of the redesign, said the iPhone 5 is a “complete redesign. This is a very large project that Steve dedicated all of his time to. He was not that involved in the 4S because his time was limited.”
That makes sense to me. Cosmetically, the iPhone 4S is identical to the iPhone 4. So no big change here. And though the 4S has been revamped on the inside, in some respects, it carries over technology already in the iPad 2: the same dual-core processor, same memory capacity, same accelerometer, same gyroscope, among other similarities.
So, it’s probably not unreasonable to expect the iPhone 5 to be a “complete redesign,” as the source said–meaning both externally and internally, though probably less so internally when compared with pronounced user-facing changes like the display size. (No telling what kind of plans Apple has on the software front: iOS 6? Siri 2?)
The iPhone 5 should debut around the time of Apple’s Developer’s Conference in the summer of 2012, according to Kumar’s research note.
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Wednesday, October 12th, 2011
 A senior investment banker at a major Wall Street firm kept sending out emails on his BlackBerry on Wednesday morning. And they kept bouncing back.
“It’s one of those things — you don’t realize how important it is to breathe, until you can’t do it,” said the New York-based banker, who declined to be named because he was not authorized to speak about the subject on behalf of his bank.
The banker is one of millions of BlackBerry users in various regions around the world who have been plagued by service disruptions over the last three days, with North American users of Research in Motion’s popular handheld device being the latest to get hit on Wednesday.
Indeed, Wall Street honchos and others who tend to spend more time on their BlackBerry than perhaps with their families were left frustrated at the service disruption — a sentiment that does not bode well for Research in Motion.
The disruptions were the worst since an outage swept North America two years ago, and analysts said it could ratchet up the negative sentiment toward a company already losing market share to rivals such as Apple and Samsung.
Research in Motion advised clients of the outage in the Americas and said it was working to restore services. The company wasn’t immediately available to comment on this article.
The disruption comes on top of increasing demand from bankers to be allowed to use other devices on company networks. Some do not want to carry two phones, and some prefer tablet computers such as iPads over laptops.
Banks also have an incentive in allowing employees to use their own devices, as it can save on costs that come with the company paying for the BlackBerry and the service plan.
One London-based banker, who advises telecom and technology companies, said he has been increasingly using an iPad with clients during pitches but was worried about data security.
“I only use my iPad for publicly available information at the moment because we are not yet sure about security for nonpublic and sensitive information,” said the banker said, who wasn’t authorized to speak publicly about the subject.
One of Blackberry’s main selling points has been Research in Motion’s top-tier security features.
But mobile device management companies such as Good Technology and MobileIron are offering alternatives, allowing some banks to start letting employees use other devices like iPhones, iPads and Google Inc’s Android-based phones on the company’s network.
Credit Suisse, for instance, allows employees to connect to other devices, while Barclays Capital allows some employees to use iPhones and iPads. Standard Chartered switched from BlackBerry to iPhones for many users several months ago.
At Sagent Advisors, an independent investment bank in New York, 10 percent to 15 percent of the users have switched to iPhones, while another 10 percent to 15 percent have taken up Android devices.
“It is still mostly BlackBerry but quickly moving away,” said Terrence Barron, Sagent’s head of marketing and communications. “Over time there has been much more of sliding over to Android devices and iPhones for us.”
Still, Blackberry remains ubiquitous on Wall Street, and some bankers said they prefer the device over others when it comes to work.
One Houston-based investment banker who focuses on energy sector deals said while Wednesday’s disruption was frustrating, he felt it was not frequent enough to force a change at his firm.
“If BlackBerry were down every other day it would be a pretty big issue,” the banker said. “It just forces you to actually call your assistant. It’s like the old days, when you had to talk to people.”
The banker, who requested anonymity because he was not authorized to speak to the press, said he also carries an iPhone for personal use.
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Tuesday, October 11th, 2011
 An activist Research In Motion investor says holders of at least 8 percent of the BlackBerry maker’s stock back its call for a sale or a corporate shake-up at the struggling Canadian company.
Jaguar Financial Corp said it expects the percentage of RIM stock that supports its position to keep rising as it talks with more institutional shareholders about joining its campaign for sweeping change.
“Our supportive shareholders approve Jaguar’s plan to negotiate, at this point in time, changes in governance and the pursuit of a value creation transaction,” Jaguar Chief Executive Vic Alboini told Reuters on Tuesday.
Shares of RIM, which makes the BlackBerry smartphone and Playbook tablet computer, have been battered this year, reflecting a steady erosion of market share to devices made by Apple or powered by Google’s Android software.
Jaguar, a Canadian merchant bank that targets underperforming companies, wants RIM to hire a new chief executive to replace current co-CEOs Mike Lazaridis and Jim Balsillie, and to put itself up for sale, either as a whole or in parts.
With 8 percent support Jaguar could demand a shareholders meeting, ratcheting up the pressure on RIM’s board and management to address its demands, Alboini said.
RIM said at its annual meeting in July that holders of more than 90 percent of its voting shares had backed the reelection of a slate of directors that includes the co-CEOs.
RIM could not be reached for immediate comment on Tuesday.
Stock in the company hit a 52-week low of $19.29 a share on the Nasdaq on Oct. 4, less than a third the C$70.54/share high it touched in February.
Alboini said a reasonable range for RIM’s stock valuation would be between C$40 and C$60/share, depending on the nature of any change fostered at the company.
“Everybody is in support of a sale of RIM or another value creative transaction,” Alboini said. “Like splitting the company into separate public companies – a network company, a device company and a patents company.”
Alboini said Jaguar’s campaign for a shake-up at RIM would gather steam as talks with other institutional shareholders deepened. He said Jaguar had so far only spoken to about 20 of the larger institutional holders, compared with the more than 1,000 investment managers listed by Thomson One as stockholders.
“We haven’t adopted a call-center approach,” he said. “It has been very highly targeted, but now that we’ve got the response, you know we are going to go out and see how many more we can get.”
Alboini said he had not been in contact with activist investor Carl Icahn and could not confirm speculation in recent weeks that Icahn might take a stake in RIM.
Alboini says RIM’s leaders have lost their way in competing in a technology landscape that has changed dramatically, forcing it to play catch-up to the likes of Apple , Google , Microsoft , Samsung ElectronicsHTC .
“It is time for RIM to bring in a transformational leader and a respected independent chairman,” said Alboini, who has accumulated more shares of RIM since its stock price plunge.
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Wednesday, October 5th, 2011
 Steven P. Jobs, the Apple Inc. chairman and co-founder who pioneered the personal computer industry and changed the way people think about technology, died Wednesday at the age of 56.
His family, in a statement released by Apple, said Mr. Jobs “died peacefully today surrounded by his family…We know many of you will mourn with us, and we ask that you respect our privacy during our time of grief.”
The company didn’t specify the cause of his death. Mr. Jobs had battled pancreatic cancer and several years ago received a liver transplant. In August, Mr. Jobs stepped down as CEO, handing the reins to Tim Cook.
“Apple has lost a visionary and creative genius, and the world has lost an amazing human being,” Mr. Cook said in a letter to employees. “We will honor his memory by dedicating ourselves to continuing the work he loved so much.”
During his more than three decade-long career, Mr. Jobs transformed Silicon Valley as he helped turn the once sleepy expanse of fruit orchards into the technology industry’s innovation center. In addition to laying the groundwork for the high-tech industry alongside other pioneers like Microsoft Corp. co-founder Bill Gates and Oracle Corp. founder Larry Ellison, Mr. Jobs proved the appeal of well-designed products over the sheer power of technology itself and shifted the way consumers interact with technology in an increasingly digital world.
“The world rarely sees someone who has had the profound impact Steve has had, the effects of which will be felt for many generations to come,” Mr. Gates said in a statement Wednesday.
The most productive chapter in Mr. Jobs’s career occurred near the end of his life, when a nearly unbroken string of successful products like the iPod, iPhone and iPad changed the PC, electronics and digital media industries. The way he marketed and sold those products through savvy advertising campaigns and its retail stores, in the meanwhile, helped turn the company into a pop culture icon.
At the beginning of that phase, Mr. Jobs once described his philosophy as trying to make products that were at “the intersection of art and technology.” In doing so, he turned Apple into the world’s most valuable company with a market value of $350 billion.
After exhibiting significant weight loss in mid-2008, Mr. Jobs took a nearly six month medical leave of absence in 2009, during which he received a liver transplant. He took another medical leave of absence in mid-January without explanation before stepping down as chief executive.
Mr. Jobs is survived by his wife, Laurene, and four children.
Although his achievements in technology alone were immense, Mr. Jobs played an equally groundbreaking role in entertainment. He turned Apple into the largest retailer of music and helped popularize computer-animated films as the financier and CEO of Pixar Animation Studios, which he later sold to Walt Disney Co. He was a key figure in changing the way people used the Internet and how they consumed music, TV shows, movies, books, disrupting industries in the process.
“Despite all he accomplished, it feels like he was just getting started,” Disney CEO Robert Iger said in a statement Wednesday.
Mr. Jobs also pulled off one of the most remarkable comebacks in modern business history, returning to Apple after an 11-year absence during which he was largely written off as a has-been and then reviving the then-struggling company by introducing products such as the iMac all-in-one computer, iPod music player and iTunes digital music store.
The company produces $65.2 billion a year in revenue compared with $7.1 billion in its business year ending September 1997. Apple has become one of the world’s premier designers of consumer-electronics devices, dropping the “computer” in its name in January 2007 to underscore its expansion beyond PCs.
Although Mr. Jobs officially handed over the reins of the company to Mr. Cook, his long-time deputy, in August, his death nevertheless raises a high-stakes question for Apple of how the company—which has been in the vanguard of technological creativity for most of the past decade—will sustain its success without his vision and guidance. Other icons of American capitalism, including Walt Disney, Wal-Mart Stores Inc. and International Business Machines Corp., experienced some transitional woes but eventually managed to thrive after their charismatic founders passed on.
But few companies of that stature have shown such an acute dependence on their founder, or lost the founder at the peak of his career. Several years after Mr. Jobs was fired from Apple in 1985, the company began a steady decline that saw it drift to the margins of the computer industry. That slide was reversed only after Mr. Jobs returned to Apple in 1997.
Mr. Jobs also leaves behind innumerable tales about his mercurial management style, such as his habit of calling employees or their ideas “dumb” when he didn’t like something. He was even more combative against foes like Microsoft Corp., Google Inc., and Amazon.com Inc. When Adobe Systems Inc. waged a campaign against Apple for not supporting Adobe’s Flash video format on its iPhones and iPads in April 2010, Mr. Jobs wrote a 1,600 word essay about why the software was outdated and inadequate for mobile devices.
The CEO maintained uncompromising standards about the company’s hardware and software, demanding “insanely great” aesthetics and ease of use from the moment a consumer walked into one of Apple’s stylish stores. His attention to the smallest details in the development and design process were instrumental in shaping some of the most distinctive features of Apple’s products, while his meticulously planned onstage demonstrations helped fuel excitement that was unmatched by his peers.
At event after event to introduce new products, Mr. Jobs often puckishly proclaimed “There is one more thing” before revealing the most significant news at the very end of a speech. He enforced strict secrecy among Apple employees, a strategy that he believed heightened anticipation for upcoming Apple products.
Mr. Jobs, the adopted son of a family in Palo Alto, Calif., was born on Feb. 24, 1955. A college dropout, he established his reputation early on as a tech innovator when at 21 years old, he and friend Steve Wozniak founded Apple Computer Inc. in the Jobs family garage in 1976. Mr. Jobs chose the name, in part, because he was a Beatles fan and admired the group’s Apple records label, according to the book “Apple: The Inside Story of Intrigue, Egomania, and Business Blunders” by Wall Street Journal reporter Jim Carlton.
The pair came out with the Apple II in 1977, a groundbreaking computer that was relatively affordable and designed for the mass market consumer rather than for hobbyists. The product went on to become one of the first commercially successful personal computers, making the company $117 million in annual sales by the time of Apple’s initial public offering in 1980. The IPO instantly made Mr. Jobs a multimillionaire.
Not all of Mr. Jobs’s early ideas paid off. Apple’s Apple III and Lisa computers that debuted in 1980 and 1983 were flops. But the distinctive all-in-one Macintosh–foreshadowed in a ground-breaking TV ad inspired by George Orwell’s novel “1984″ that famously only aired once — would set the standard for the design of modern computer operating systems, in which users point and click on icons with a mouse rather than typing in commands.
Even then, Mr. Jobs was a stickler about design details. Bruce Tognazzini, a former user-interface expert at Apple who joined the company in 1978, once said that Mr. Jobs was adamant than the keyboard not include “up”, “down,” “right” and “left” keys that allow users to move the cursor around their computer screens.
Mr. Jobs’s pursuit for aesthetic beauty sometimes bordered on the extreme. George Crow, an Apple engineer in the 1980s and again from 1998 to 2005, recalls how Mr. Jobs wanted to make even the inside of computers beautiful. On the original Macintosh PC, Mr. Crow says Mr. Jobs wanted the internal wiring to be in the colors of Apple’s early rainbow logo. Mr. Crow says he eventually convinced Mr. Jobs it was an unnecessary expense.
Many ideas in the Macintosh came from a visit in 1979 to Xerox Corp.’s Palo Alto Research, where Mr. Jobs saw a machine called the Xerox Alto that had a crude graphical user interface and a mouse. The episode underscored his recurring role as a refiner and popularizer of existing inventions.
“Picasso had a saying, ‘Good artists copy. Great artists steal,’” Mr. Jobs said in a PBS documentary on the computer industry from the mid-1990s. “I’ve been shameless about stealing great ideas.”
Even in his appearance, Mr. Jobs seemed to cultivate an image more like that of an artist than a corporate executive. In public, he rarely deviated from an outfit consisting of Levis jeans, a black mock turtleneck and New Balance running shoes.
As Apple expanded, Mr. Jobs decided to bring in a more experienced manager to lead the company. He recruited John Sculley from Pepsi Co. to be Apple CEO in 1983, famously overcoming Mr. Sculley’s initial reluctance by asking the executive if he just wanted to sell “sugar water to kids” or help change the world.
After Apple fell into a subsequent slump, a leadership struggle led its board’s decision to back Mr. Sculley and fire Mr. Jobs two years later at the age of 30. “What can I say – I hired the wrong guy,” Mr. Jobs brooded in the same PBS documentary. “He destroyed everything I had spent ten years working for.”
Mr. Jobs then created NeXT Inc., a closely watched startup that in 1988 introduced a distinctive black desktop computer with advanced software that was initially targeted at the academic computing market. But the machine was hobbled by its exorbitant price tag and some key design decisions, including its use of an optical disk drive and a Motorola Inc. microprocessor at a time when Intel Corp. chips and floppy drives had become the norm.
NeXT eventually stopped selling hardware and failed to make money as a software company. But its operating system would become a foundation for OS X, the software backbone of today’s Macs, after Apple purchased NeXT for $400 million in December 1996.
In 1986, using part of his fortune from Apple, Mr. Jobs paid filmmaker George Lucas $10 million to acquire the computer graphics division of Lucasfilm Ltd. The company he formed out of those assets, Pixar Animation Studios, first sold hardware, then software, and later turned to feature films. Pixar went on to create a string of computer-animated hits, from “Toy Story” to 2008′s “Wall-E.” Mr. Jobs sold Pixar to Disney in January 2006 in a $7.4 billion deal that gave him a Disney board seat and made him the entertainment company’s largest shareholder.
Meanwhile, Apple began foundering. Computers using Intel chips and Microsoft software grew to dominate the market, a trend that accelerated after Microsoft’s Windows emulated many elements of the Mac’s visual interface.
Apple, by contrast, had to finance both hardware and software development internally. Fewer developers of application programs created products to make the Macintosh more useful. Apple would eventually decide to license its operating system to other hardware companies, but it was too late to reverse the swing to Windows-based machines.
By 1997, Apple had racked up nearly $2 billion in losses in two years, its shares were at record lows and it was on its third CEO–Gil Amelio–in four years. Eight months after the deal to buy NeXT in December 1996, Mr. Amelio was ousted and Mr. Jobs appointed interim CEO, a title that became permanent in January 2000. One former Apple employee recalls Mr. Jobs joking soon after he returned that “the lunatics have taken over the asylum and we can do anything we want.”
Mr. Jobs, who was given a salary of $1 a year along with options to Apple stock, made a series of changes that started paying off quickly. He ended the nascent software licensing program that created Mac clones, killed the struggling Newton handheld computer and trimmed a confusing array of Mac models to a handful of systems focused on the consumer market.
In May 1998, he introduced the iMac, an unusual one-piece computer that sported a colorful casing in translucent turquoise and gray. The popular machine–which sent competitors scrambling to improve their own designs—was embodied by a bold ad campaign that featured the phrase “Think Different,” with the picture of one of Mr. Jobs’s heroes, such as Albert Einstein and Muppets creator Jim Henson.
While shareholders cheered the changes, Mr. Jobs flexed his power on Apple’s Cupertino, Calif., campus. Within months of taking over, he had replaced four of the five top executive positions with former NeXT underlings. He issued emails forbidding employees on the famously laid-back campus to bring pets to the office, smoke even in parking lots, and threatening to fire anyone caught leaking company documents.
One personal assistant became a target when he failed to arrange the installation of a high-speed digital data line to Mr. Jobs’s office fast enough to suit the interim CEO. The worker said Mr. Jobs fired him for the delay, but rescinded the firing the next day after he had cooled down. (The worker ended up resigning soon afterwards).
Apple had some stumbles during Mr. Jobs’s second coming, including a cube-shaped Macintosh that failed to catch on and was scrapped in 2001. The failure was one reason that Apple posted a quarterly loss and warned it would miss estimates several times in 2000 and 2001.
But big hits followed. In 2001, Apple introduced a PowerBook laptop made from titanium, a metal more frequently found in fighter airplanes. The same year, it introduced the iPod, which transformed digital music players with features such as its smooth shape and DJ-like wheel for navigating through songs. As of Sept. 2010, Apple had sold more than 275 million iPod devices since its introduction, and it has more than 70% market share in the market for digital music players.
A key differentiator was the iTunes Music Store, opened in 2003. At the time, the music industry was largely sitting on the sidelines of the digital revolution, badly wounded by illegal downloads but unable to agree on an easy, inexpensive way to sell songs online. But Mr. Jobs helped convince major record labels to sell recordings for 99 cents each, along with antipiracy restrictions that most consumers found acceptable.
The store, which has sold more than ten billion songs, became the largest music retailer in the U.S. in 2008. It also became an incentive for consumers to buy iPods because, for much of its history, songs from the iTunes store could only be downloaded to Apple’s music player and not devices made by other companies.
At the same time, Mr. Jobs was building a deep bench of executives. He recruited former Compaq Computer Corp. executive Tim Cook in the late 1990s to straighten Apple’s operations and promoted him over time to chief operating officer. Ron Johnson, senior vice president of Apple retail, was hired from Target Corp. in 2000 to launch Apple’s stores worldwide. Apple’s lead industrial designer Jonathan Ive took charge of the physical look-and-feel of the company’s products and is said to share in Mr. Jobs’s sensibilities about design.
In 2004, Mr. Jobs had to lean on this bench when he disclosed that he had had surgery to remove a cancerous tumor from his pancreas. Apple revealed the procedure in early August 2004, but a person familiar with the situation said Mr. Jobs first learned of the tumor during a routine abdominal scan nine months earlier. The board and Mr. Jobs said nothing to Apple shareholders as the Apple executive, during that time, dealt with the tumor through changes to his diet, the person said.
In June 2007, Mr. Jobs made another splash when Apple introduced the iPhone. The cellphone pushed the envelope in the mobile phone market with features that included a touch-screen interface, allowing tricks such as blowing up images by spreading a thumb and finger on the phone’s surface.
Mr. Jobs was typically hands on in the creation of the iPhone. People familiar with the matter say the CEO was the one that made a decision to change the screen of the iPhone from plastic to glass after he unveiled the product at the Macworld trade show in 2007. The iPhone team scrambled to procure glass that would meet his exacting standards, so the devices could be manufactured in time for the launch, which took place just seven months later.
Despite skepticism about Apple’s ability to enter an already-competitive market dominated by the likes of Research in Motion Ltd.’s Blackberry devices, Apple quickly became a force in the mobile phone market, selling 92 million iPhones as of December 2010. The product kicked into a higher gear earlier this year when Apple said it would begin selling iPhones through Verizon Wireless in addition to carrier AT&T.
Last year, Mr. Jobs also unveiled the iPad tablet computer to great fanfare, billing it as “magical and revolutionary”. In the first nine months of the product’s release, Apple sold 14.8 million iPads as consumers snapped them up to use as a casual multimedia device for activities such as emailing, watching video and reading. People who work closely with Mr. Jobs said the project was so important to him that he was intimately involved in its planning even while recovering from his 2009 liver transplant.
A major selling point for both the iPhone and iPad has been the App Store, which allows developers to easily make application programs that users can download for free or for a small fee; the store meanwhile has seen more than seven billion downloads as of the end of 2010.
One cloud to Mr. Jobs’s reign came in 2006 when Apple also disclosed that an internal investigation had discovered that stock option grants to Apple executives between 1997 and 2002– including to Mr. Jobs– were improperly dated. Apple became the most high-profile technology company caught up in a broad series of options backdating scandals that helped inflate the profits executives made from their stock awards.
Apple later disclosed that Mr. Jobs helped select the favorable option dates, but denied that he did anything wrong since he didn’t understand the accounting implications of his actions. Apple’s investigation ended up blaming two ex-Apple executives – former general counsel Nancy Heinen and former chief financial officer Fred Anderson – for their role in the backdating. Both were later charged by the Securities and Exchange Commission. They ended up settling the charges. Mr. Jobs was never charged with any wrongdoing.
Those who knew Mr. Jobs say that one reason why he was able to keep innovating was because he didn’t dwell on past accomplishments or legacy but kept looking ahead and demanded that employees do the same. Hitoshi Hokamura, a former Apple employee, recalls how an old Apple I that was displayed by the company cafeteria quietly disappeared after Mr. Jobs returned in the late 1990s.
“Remembering that you are going to die is the best way I know to avoid the trap of thinking you have something to lose,” Mr. Jobs said in a commencement speech at Stanford University in June 2005, almost a year after he was diagnosed with cancer.
Source
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Wednesday, October 5th, 2011
 It’s easy to point to yesterday’s iPhone 4S unveiling as a ho-hum affair, that is, if you were expecting something more. And the truth is, most of the tech world was.
Look no further than the slew of rumors that took on a life of their own in the extended wait between last year’s model and this one. A bevy of silicon cases flying out of China sporting a dramatic new design derived from an allegedly leaked Foxconn prototype? Check. Gorgeous renderings of devices with a huge display, tapered design, and a change to the iPhone‘s iconic home button that’s gone unchanged four versions over? Check. And hey, how about two new iPhones this year? Add that one to the pile too.
What we got instead was the iPhone 4S, a phone that looks just like the iPhone 4 on the outside but with faster innards. Will people still be lining up for the thing when it’s released next week, and will it sell even better than last year’s model? Yes and yes.
Apple watchers will remember Apple pulled a similar move going from the iPhone 3G to the 3GS. Almost identical to the 4S update, the 3GS too was a collection of inside changes. The processor got a boost, as did wireless networking with speedier HSPA. The 3GS also brought a better camera, and Voice Control–the voice recognition software that let users launch a song, or make a phone call with their voice.
As the 3GS’ spiritual successor–the 4S–does that same trick once again. There’s a considerably zippier processor, a better camera, more built-in storage (if you want to pay for it), and faster cellular data networking that works in more places since it’s got both CDMA and GSM hardware built-in. That, combined with the iPhone 4S-specific Siri voice recognition feature, makes for a solid update, especially for 3GS users who are itching to update their devices. For people who bought last year’s iPhone 4? Probably not so much.
The thing to point out to those who may have been expecting the next big hardware jump is that Apple’s not just marketing to those two groups. The goal is to keep pulling in new users from competitors as well as those still using feature phones. Apple CEO Tim Cook said as much yesterday while pointing to a chart of how much of the handset market Apple currently occupies.
“Despite all of this success and all of this momentum, the iPhone has a 5 percent share of the worldwide market of handsets. I could have shown you a much larger number if I just showed you smartphones, but that’s not how we look at it,” Cook said. “We look at the entire market of handsets because we believe that over time, all handsets become smartphones. This market is 1.5 billion units annually. It’s an enormous opportunity for Apple.”
Apple’s plan of attack for that “enormous opportunity” is of special interest. Beyond the 4S, Apple is continuing to sell the iPhone 4 and the 3GS. The company has a long history of continuing to offer last year’s model, but the 3GS is now being offered free of charge. It’s the first time Apple’s ever done that. Sure you could get older iPhones for about the price of one month of smartphone service, but this is the first time it’s been offered with no cost up front, just a carrier contract. Apple also added an even higher tier $399 version of the iPhone with more storage. That’s the same price as the original iPhone after its controversial price cut but likely with a better margin than the other two 4S configurations.
In other words, instead of three choices, there are now five. Those changes to the product lineup are something I’d expect to have a dramatic effect on sales, especially given that Apple has extended the iPhone onto new carriers, including Sprint in the U.S. and KDDI in Japan.
Furthermore, this isn’t new behavior from Apple. The company does not radically change its computers every year. As we’ve seen with the unibody MacBook Pro and iMac, it’s worked out pretty well to tweak some things, add a new port and make adjustments to carry a product through its lifetime, eventually working towards a major overhaul.
The difference in this case is that the phone world is moving quite a bit faster, with competitors pushing out new models every few months, running operating systems made by other companies. That affords certain luxuries, like not having to wait for an OS update to sync up before releasing a new model. With the iPhone and its other iOS products, Apple’s banking on the fact that users will come to invest in that system by tying in its media stores, app library and the upcoming iMessage platform.
Coming back to disappointment though, worth remembering is the unveiling of the iPad 2 earlier this year. There were rumors abound about Apple packing in a Retina Display, adding speedy Thunderbolt connectivity, and maybe even an SD card slot. What we got instead was a visual redesign of the original iPad that added cameras to the outside, and a speed boost inside. Sound familiar? In the end it didn’t really matter. Buyers still snatched them up, besting sales of the first generation device handily. Would anyone want to mess with that formula? Apple certainly doesn’t seem to want to, not then and not now.
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Monday, October 3rd, 2011
 Congratulations to Allegiance Bank Texas’, Scott Lester, WINNER of the Percento Technologies drawing at the 2011 IBAT’s 37th Annual Convention, this week at the Westin La Cantera Resort in San Antonio, Texas. Mr. Lester won $100 Cash Gift Certificate.
Thank you to everyone who joined our drawing.
Financial Technology Support
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