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Tremors among the high-tech pinnacles

Thursday, June 21, 2007

There’s just about a week to go and the tremulous frenzy in the air is palpable. Apple Inc’s bold assault, with the iPhone, on a whole new market - the world’s one billion-strong phalanx of wireless phone users - is causing many nerves to fray.

Some especially nervous nellies in the digital industries are even saying that such a huge gamble for the always-innovative computer firm (but which has significantly dropped “computer” from its name) could end up as a disaster – reversing the wondrous streak of good fortune that came with its all-conquering iPod and the associated commercial tsunami of iTunes. These successes have helped create an annual profit of $2.8 billion and a doubling of the AAPL stock price within a year.

 

Sales of the new device, which promises to deliver the longed-for effective convergence of cellphone, audio and video player, and web-browser all in one sleek hand-held unit, may well be humungous. Steve Jobs (pictured above), Apple’s monomaniacal co-founder and returned leader, is (it’s cautiously believed) banking on 10 million in the first year, even while giddy analysts at Piper Jaffray claim to foresee more than 15 million sales in that time and 45 million by the end of 2009.

 

But the Achilles Heel in Jobs’ plan (as even his most ardent admirers have to admit) is the fact  that the carrier for the iPhone’s signal - the lifeblood for just about every one of its functions - is the so-called “new AT&T” , in other words the old Cingular. Despite all its revamping, this service is still regarded as having the slowest connections and the clunkiest technology in the wireless universe.

 

Most of the doubts being cast over the iPhone’s debut of course emanate from Jobs’ many infuriated rivals in Silicon Valley. But also far, far removed from the tetchiness north and south of Apple’s home of Cupertino, California, New York City’s eponymous magazine New York this week is also promoting a negative case against runaway success for the hot new toy.

 

On close analysis, though, it is purely that thorny question of how good a carrier AT&T can ever be for such a cutting-edge piece of technology that lies at the heart of Wall Streeters’ reservations. NY magazine, with its Big Apple propensity for celebritizing every issue, makes the matter all about Jobs – taking swipes at him as an object of false idolatry and headlining their cover story on him “iGod”.

 

My own feeling is that Jobs – unlikeable and irascible as he is – will simply prove his doubters wrong once again.

 

 

 

THE EXPOSED AND UNSTEADY PERCH THAT TERRY SEMEL ENJOYED (did he?) atop Yahoo! has finally been kicked from under him, as company co-founder Jerry Yang has installed himself as CEO and promoted advertising specialist Susan Decker to president.

 

Semel, as a former co-head of Warner Brothers Studio never seemed a good fit in Sunnyvale. And his efforts, in themselves quite convincing sometimes,  to re-conceive Yahoo! as a premiere entertainment center on the web was never going to lead anywhere big, in a digital environment that was being increasingly defined by one vital internet concept -- Search.

 

For all the mealy-mouthed reasons and excuses being parroted out during the flurry of Semel’s "resignation" and reactions to it, one simple fact about earnings from advertising drowns out every other corporate or departmental squawk  -  Yahoo! earns just HALF as many dollars from every search made through its engine as does the industry leader Google.

 

MediaBistro, the communications business community-board (slash entertainments organizer) canvassed an instant poll of its membership on the story. After aggregating all the biz-news coverage of Yahoo’s changes (a job it does well, always) it went on to ask what it called “the bigger, elephant-in-the-room question: Will Yahoo Ever Catch Google?”

 

As I write the results are not yet in – but I think we all know the answer.

 

 

 

NOT THAT ALL IS STEADY AND UNCHANGING for Larry Page and Sergey Brin, Google’s top men. They have long relied on a lot of fairly unquestioning goodwill, based on their reputations as good guys, if possibly a bit naïve. But such goodwill could prove shaky.

 

Their unofficial motto is often quoted admiringly and sloppily as “Do No Evil” (though in fact its accurate form, in their company’s original mission statement, reads more fully as "You can make money without doing evil.")

 

Well, evil-doing is a relative notion, of course – and more and more critics, especially in the realm of digital privacy, are nowadays seeing Google as sorely tempted by, if not totally won over by the devil. The desire to make money, it’s being said, is turning Google into a technocratic, mercenary super-spy.

 

And it’s not just partisans or fanatics who have become eager to point out error in Google’s ways. That notably business-friendly (and scrupulously impartial) news-source Reuters Agency went, I believe, one surprising step far this week. It opened one dispatch by referring to “the announcement about how Google Inc. wants to burrow inside your brain and capture your most intimate thoughts”.

 

It was a joke (a Reuter’s kind of a joke, I guess) or at the least an exaggeration to make a point. The full article unfolded to explore the controversy over Google’s massively burgeoning data-banks, collected (largely unannounced) from its unwitting users, that create what the agency called “mountains of information about consumer behavior”.

 

"The company,” reported Reuters, ”uses this information to make money by selling advertisements, but people who are used to browsing anonymously around stores or channel-hopping on TV find it unnerving to realize that in a digital world, their every move is recorded.”

 

I - plus any combination of privacy advocates - could hardly have put it better ourselves.