Circuit City to Test Smaller Format Stores (Goodbye, Best Buy)

In a statement released along side its annual earnings statement on March 29th, Circuit City stated it plans to close up to 50 superstores and focus on a smaller format store, as small as 20,000 square feet.

Wait. Did I say Circuit City? I meant Best Buy:

Best Buy’s retail store strategy is to increase points of presence, while decreasing overall square footage, for increased flexibility in a multi-channel environment. The company intends to remodel key stores with a new Connected Store format in fiscal 2013, and to continue to build out the successful Best Buy Mobile small format stores throughout the U.S. … The company expects total big box square footage in … test markets to be reduced by almost 20 percent through store downsizing and closures, while points of presence will increase by more than 20 percent.

I must have been having a flashback to 2008:

Circuit City is testing a compact, interactive format, called The City, as a key part of its turnaround plan. The stores measure 20,000 square feet compared with up to 33,000 square feet for a regular Circuit City and focus on blockbuster sellers in electronics categories.

Goodbye, Best Buy. It was terrible knowing you.

Aereo

As the content industry struggles to hold on to long established business models, consumers are pushing forward and creating opportunities for new methods of content consumption. Last year a company called Zediva tried to get around the draconian streaming agreement by matching each viewing session up to a physical DVD and DVD player. Unfortunately, they were obliterated in the ensuing legal battle.

A challenger appears! On March 12th Aereo launched an invitation-only service in New York City. They claim to have circumvented the rebroadcasting restrictions placed within US copyright law by leasing each customer their own antenna and having no influence or control over what the customer decides to watch. Sound familiar? The broadcast networks are claiming that they are profiting from the illegal rebroadcast of their content, but Aereo asserts that it is simply providing facility for customers to tune and stream their own content, something similar to Slingbox’s offering.

I’ve tried the service. It currently only works on iOS devices (including AirPlay streaming), which I find strange as desktop Safari and Chrome have excellent HTML5 and Javascript support. The service works well, compression seems fairly limited and the 720p stream looks very good on the iPhone and passable on the new iPad’s retina display. The interface is strangely anachronistic, resembling a Web 2.0 TV Guide. We’re all familiar with the channel guide. Can we move on? The DVR feature is very nice, providing up to 40 hours of recording.

We should brace ourselves for the all but inevitable shutdown, but there is one glimmer of hope in all this: the creator of Aereo is also the creator of Fox Television, and has raised over $20 million in funding. It’s likely that they’ve set aside a significant portion of this funding for legal fees as they’ve gone on the offense, seeking a preemptive injunction declaring their business model to be legal.

It’s doubtful that they’ll survive, but hopefully it pushes the industry just a bit further toward sanity.

Pushing Daiseys

For nearly two years now Mike Daisey has been performing a monolog called The Agony and The Ecstasy of Steve Jobs. Daisey presents this as a bit of investigative journalism, sparked by finding pictures of anonymous Foxconn workers on his new iPhone. He traveled to China and uncovered a scandal that would make Martha Stewart look like Employer of the Year. His work was used to produce This American Life’s most popular episode on record. It sparked a detailed piece by the New York Times on working conditions in Chinese factories. It even may have been the catalyst that caused Apple to increase its supplier responsibility reports to a monthly rhythm and allow the Fair Labor Association to begin inspections.

Last week we learned that Daisey had fabricated most of it. Took bits and pieces of the worst of the events of the preceding few years and collected it all into one nightmarish trip. He then packaged this as the truth and sold it to all of us.

He claims it was to bring attention to the problem. That if he presented it as fiction, or even ‘inspired by a true story’, that it wouldn’t change people’s minds. It would challenge them. It wouldn’t cause change. A certain author by the name Upton Sinclair would strongly disagree.

During the late 19th and early 20th centuries American workers confronted a problem of supply and demand. Demand for goods, manufactured, butchered, forged, cut, welded, or simply picked was increasing rapidly. There was little oversight of working conditions, no OSHA, no workers compensation. Corporations considered laborers as disposable and replaceable, and there was no one to stop them.

We as a society decided this was unacceptable. Through a combination of worker revolts, organized labor, and federal legislation, working conditions in the US improved dramatically. A line was crossed, society took notice, and positive change came as a result. Books like Upton Sinclair’s The Jungle brought attention to the situation through a fictional account of the meatpacking industry in the early 20th century. Sinclair spent seven weeks working undercover in meatpacking plants in the Chicago stockyards. What he witnessed and the information he gathered inspired the book, which was presented as fiction. Despite it being fiction, it challenged readers to more closely examine the reality of the meatpacking industry, and to a larger extent industry in general. It had a significantly positive effect on America and left a lasting legacy.

This is not what Mike Daisey did.

Sinclair never presented his book as investigative journalism, despite spending seven weeks undercover. Daisey spent six days in China. Daisey did not get a job as a factory worker. He spoke to a handful of workers and toured a few factories posing as a businessman. He then returned and started selling this story as fact. Propping it up as a bit of activism. Trying to rally the troops! He encouraged others to perform his monologue (Red Flag #1?) and uses the phrase “spread the virus”.

On his blog, he writes:

In the last forty-eight hours I have been equated with Stephen Glass, James Frey, and Greg Mortenson.

The comparison is perfect. Stephen Glass frequently mixed fabricated quotes and events into his stories. He dramatized his stories, often slipping into present tense, skirting the edge of self-insertion. After his downfall he even wrote a book, turning himself into a protagonist. How, exactly, is what Daisey did any different than this?

Mike Daisey has a wonderful talent. He’s a great storyteller, he has presence, he knows how to work a crowd, and he’s a showman all around. It’s a shame that his decision to seek attention has not only destroyed his reputation and professional career, but has also distracted from the true issue of labor practices and working conditions in China.

iPad Review (2012)

On January 27th, 2010, I was unimpressed by anything Steve Jobs presented at the Yerba Buena Center for the Arts. I agreed with many of the opinions making the rounds. The iPad was just a big iPod Touch. What’s innovative and revolutionary about that? It’s something we have all experienced already, except bigger.

The next day Stephen Fry wrote about his experience at the announcement event in San Francisco. The core of his message is that the iPad must be used to be understood. He referred to it as the herald of things to come, “like the first iPhone, iPad 1.0 is a John the Baptist preparing the way of what is to come[...]”, and insists that the device will be revolutionary1.

Over the next month leading up to the release there was a constant struggle between those who attempted to bring a rational analysis to the table (the ‘big iPhone’ people) and those who stick to their faith that it must be used to be understood. I paid little attention to this, even ignoring most of the reviews that dropped the day before release when the press embargo was lifted. At that point, I had decided to go and see for myself.

I walked into the Apple store on 5th Avenue in New York around 1PM. Well, more like shuffled. There was still a wait to get into the cube, and move slowly down the glass stairs. Once inside, I waited for an open spot at a display table. The crowd was thick and noisy, and even the blue-shirted employees seemed a bit disoriented.

After using the device for less than two minutes I found an employee and asked if they had any left. She suggested I get in line and see what I can get. Fifteen minutes later I’m asking for a 16GB Black Wifi at the counter. They bring one out (and I briefly see into the stock room where I see a wall of iPad boxes), I pay and head home.

Yes, I’ve written five paragraphs about the first iPad in a review about the new iPad. It’s important to understand a few things about iPad in general. We’re only on the third generation of iPad, and yet the disruption to the industry has been immense. The platform as a replacement for the PC is still in it’s infancy, but was apparent immediately when using the first device: This was something new, this was something different, this was something revolutionary.

This review is not for someone who’s never owned an iPad before. I’m not sure exactly how to review the new iPad without being able to compare it to earlier iPads. It certainly can’t be compared to anything else on the market, so for a first-time buyer the advice is ‘go try one.’

For those of us who have owned an iPad already the question isn’t about specs or design, it’s about experience. Does the new iPad enhance the exerpience? If so, in what ways? We’ll review the major changes that I believe significantly change the exprience from the iPad 2, starting with the screen.

The Screen

In 2010, Apple introduced the concept of a “Retina Display” in the iPhone 4. It was a doubling of screen resolution on each axis, resulting in four times the number of pixels in the same sized screen. At this number of pixels per inch, most people cannot distinguish between individual pixels on the screen. The result is a stunning display that must be seen to be believed. Text and high-resolution images look like glowing print and eye fatigue seems to be eliminated for most activities.

With the introduction of the 3rd generation iPad Apple once again upped the resolution game. The new iPad sports four times the pixels of it’s predecessor, at an incredible 2048 by 1536, for a total of 3,145,728 pixels on a 9.7 inch display. The result? Similar to the iPhone 4 and 4S, pixels are essentially indistinguishable and the display again resembles glowing print.

UI elements that have been updated to take advantage of the new resolution look amazing. Text drawn independently of resolution is crisp and fluid. Notice the skeuomorphic elements of the Notes app. On the new iPad they almost look like genuine remains of a torn off page.

There are some drawbacks in the short term. Besides apps that haven’t yet been updated to Retina graphics, the low resolution assets of most websites are now painfully obvious. While visiting your favorite website you may be disappointed with the fuzzy graphics elements that used to look so crisp. Additionally, images posted on social networks and blog sites, such as Tumblr, look generally bad. It’s going to take time for the web to catch up, but I believe it will. Look what happened to Adobe’s Flash after the popularity of the iPad.

Another drawback of the Retina display is the power draw itself. It’s likely that the quadrupling of pixels has necessitated the massive 70% increase in battery volume found in the new iPad. There are some consequences of this, such as the device being noticeably heavier, slightly thicker, and taking much longer to fully charge.

The drastic improvement in display quality is worth these trade-offs, and one could reasonably assume that Apple will continue to reduce the weight and thickness as other components are made more efficient.

The Camera & iPhoto

Apple also brought camera technology over from the iPhone 4, including the backside illuminated 5-megapixel (compared to the iPhone 4S’ 8-megapixel) sensor, upgrading the photographic capabilities substantially.

The front-facing FaceTime camera remains the same VGA unit from the iPad 2.

In addition to an updated Camera app that makes some much-needed usability tweaks to make the iPad easier to use as a camera (though no less dorky), Apple also released iPhoto for iOS. The next piece in their ongoing effort to show that iOS is not just for consumption, iPhoto joins GarageBand, PhotoBooth, the iWork suite, and others to expand the user’s ability to create content.

Watching live video through the iPad's new camera is impressive. It quickly focuses and adjusts exposure, and it's focal length allows for near-macro shots.

iPhoto is suprisingly full featured. Most of the normal image editing tasks one may find necessary on a desktop can be done on the iPad (and iPhone!). From basic edits such as crop, rotate, scale and skew, to more robust such as adjusting color saturation, brightness, contrast, and even applying Intragram-esq filters to your photos.

iPhoto keeps a seperate album of edited photos, so your originals are always still there, untouched. This is an interesting approach to file version management that I find refreshing. Rather than dealing with versions within the same file name, as with iCloud and other versioning-enabled apps on OS X, the user can edit and play with an image as much as they want without fear of mixing anything up.

The usual export features are present as well, including publishing your edited photos out to your PhotoStream. Photos quickly appeared on my Apple TV, floating upward as the device loaded them from iCloud.

Connectivity

The new iPad has also been updated to take advantage of the newest high speed mobile network in use in North America, LTE. Available for both AT&T and Verizon, LTE has a theoretical downlink speed of 72mb/s. Here in Manhattan I averaged just under 20mb/s downstream and 11mb/s upstream on Verizon.

Pricing is similar between the two carriers, but Verizon has graciously provided the Personal Hotspot feature at no additional charge while AT&T has not even committed to offering the feature at all. Verizon’s coverage is also significantly larger than AT&T, even though AT&T claims the largest “4G” network. Most of AT&T’s “4G” is not LTE, but rather an older technology called HSPA+ that maxes out at 14.4mb/s.

Voice Dictation

While Apple’s Siri voice-enabled personal assistant has not yet been ported over to the iPad, its voice dictation feature was. I’ve found it to be as good as the experience on the iPhone 4S, if not better.

As you can see it did a passable job, needing some editing after the fact.

Wrap Up

Using the iPad and iPad 2 was like holding the future in your hand. Using the new iPad is like using the future’s future. Apple has managed to produce a display unlike anything most have ever seen before, they packed in the latest in mobile connectivity technology, and they did it with virtually no impact on battery life.

Apple continues to push the boundaries of change in personal computing. The frequently used term “Post-PC” becomes real when you use the new iPad. The new Retina display tears down the walls between interface and content, removing that layer that we all came to know as the “screen”.

There is still room to grow, however. iOS needs to continue to develop as a platform, and if Apple truly wants to position the iPad as a competent device for content creation it will need to more closely integrate apps and allow 3rd party apps to better utilize each others capabilities (see Microsoft’s ‘contracts’ system in Windows Phone 7).

In the mean time, however, the new iPad is a marvel of engineering and the next evolution of the post-pc experience. Can I recommend buying one? Of course, but keep in mind I’ve bought a new iPhone and iPad each year. The new iPad isn’t really going to let you do anything you can’t already do with the iPad 2, but the overall experience is something that must be seen. I’d suggest that anyone interested go to your local store and play with a display model. Only then can you truly appreciate something entirely indescribable.

1. http://www.guardian.co.uk/technology/2010/jan/29/stephen-fry-apple-ipad

The Death of Retail

Target CEO Gregg Steinhafel:

"What we aren't willing to do is let online-only retailers use our brick-and-mortar stores as a showroom for their products and undercut our prices without making investments, as we do, to proudly display your brands[...]"

Target has a proposed solution to the problem of "showrooming", or looking at product in a store and then purchasing from an online retailer. This solution includes creating derivative products that are too hard to compare with the models sold online.

Yet another example of fundamental changes in an industry causing the long-time leaders to dig in their heels. The music industry, the movie industry, publishing, and now mass merchant retailers.

The solution is not to put up barriers to the way the customer wants to shop. Even if Target can convince manufacturers to reduce their economies of scale to produce derivative products for them, even if the manufacturer or Target is willing to eat the additional cost without passing it on to their (newly confused) customers, even if Amazon doesn't respond by simply lowering prices further or making an offer to the manufacturers they can't refuse, it will have no effect on customer behavior other than stopping them from coming to your store at all, even for convenience goods.

There is a set of forces coalescing around the dismantling of the traditional retail model. Beyond the competitive issues, there are other factors making it easier for consumers to make major purchases online without ever seeing the product itself.

The idea of 'social search' has become a focal point recently. Even Google is looking for ways to include social signals in its search, and expose when people's connections have had some influence on search ranking. As people come to depend on the opinions of those in their ever-expanding social network, the need to go speak to an underpaid and usually under qualified salesperson in a store is diminished drastically.

According to a study performed in 2011, a substantial portion of consumers are heavily influenced by information found on Twitter and Facebook1. It's well established that consumers weigh personal word of mouth recommendations above all other forms of marketing, but now we're learning that they value recommendations from strangers online almost as much2. According to a study performed in 2009, 90% of consumers trusted to some degree personal recommendations from those they know, while 70% trusted recommendations from consumer opinions posted online. It starts to drop off sharply when asked about any form of actual marketing, such as radio or television ads and print media.

Customers have spoken. They have made clear to retailers what they value: Low prices, good selection, easy purchase options, and customer service that is at least transparent if not acceptable. Retailers, like Target and Best Buy3, are reacting in the same way the recording industry has reacted historically to changes in technology and consumer preference. They are trying to fight against the forward momentum of consumer choice and progress by putting up barriers and obstacles that they believe will go unnoticed by their customers.

Ultimately, we know how this will end: Circuit City, Borders, and CompUSA are gone. Others are circling the drain, and unless they learn to compete on what matters, they'll soon be joining the aforementioned in the Great Cash Register in the Sky.

Source: Wall Street Journal

1. Internet Retailer

2. Nielsen Blog

3. Forbes

I've Got an Idea!

Get rid of TouchWiz.

Did it come from the Android Name Generator?

The name in question:

Galaxy S II, Epic 4G Touch

The answer:

No! It's real.

For the low low price of $485,000,000

Me, last Monday:

Can't wait till the quarterly earnings statement that includes this promotion.

RIM, this morning:

Research In Motion Limited (RIM) (Nasdaq: RIMM; TSX: RIM), a world leader in the mobile communications market, today announced that it would record a pre-tax provision in the third quarter of fiscal 2012 of approximately $485 million, $360 million after tax, related to its inventory valuation of BlackBerry PlayBook tablets.

As 'a world leader' this must be a tough pill to swallow. Who would've guessed that a product which excludes one of the primary features that made RIM famous would sell so poorly. It's ok though, they'll add it by February.

Reactions to Gruber

How not to open an argument if you want to be taken seriously:

John Gruber is suffering from a lack of critical thinking about his own opinions. I'm here to think critically about them for him, so he can keep not bothering to.

Yes, Gruber borders on Apple apologist territory; so do I. He has also never created and published a web site attacking entirely one person.

I think someone is a bit jealous.

Raises Questions of Fact

Jim Cicconi, AT&T Senior Executive Vice President-External and Legislative Affairs: 

The FCC has recognized that it is required by its own rules to dismiss our merger application. This makes all the more troubling their decision to nonetheless release a preliminary staff report on the merger. This report is not an order of the FCC and has never been voted on. It is simply a staff draft that raises questions of fact that were to be addressed in an administrative hearing, a hearing which will not now take place. It has no force or effect under law, which raises questions as to why the FCC would choose to release it. The draft report has also not been made available to AT&T prior to today, so we have had no opportunity to address or rebut its claims, which makes its release all the more improper.

Translation: Our PR budget isn't large enough to spin this because we owe DT $4 billion.

"...that AT&T has portrayed..."

That phrase nicely sums up the FCC's findings on the proposed AT&T/T-Mobile deal. Chris Zigler, The Verge (emphasis his):

T-Mobile's balance sheets just don't support what the FCC calls "the bleak short-term outlook... that AT&T has portrayed in its submissions," pointing out that the carrier pulled in $5.4 billion in earnings last year on revenue of $21.3 billion (and it remains profitable as of Q3 '11). The Commission also cites the fact that both carriers use HSPA+ as evidence that T-Mobile isn't way behind the times, and it goes onto say that speeds are "expected to be comparable for the next several years." Unfortunately, this part dives into some redacted statements and there's no mention of LTE, but we'd love to see the documentation that the FCC is using to assert that these guys will be at speed parity for the foreseeable future — it's an interesting claim.

Even I've bought in to the disinformation that T-Mobile is on the brink of failure.

On pages 32 and 33, the Commission also rattles off a couple examples of plan tweaks AT&T has made in recent years in direct response to T-Mobile, further damaging AT&T's claim that it doesn't view T-Mobile as a viable competitor.

Beautiful.

$199 BlackBerry Playbook

Can't wait till the quarterly earnings statement that includes this promotion.

Charlatans!

Chris DiBona, Google's main open source guy:

Yes, virus companies are playing on your fears to try to sell you bs protection software for Android, RIM and IOS. They are charlatans and scammers. IF you work for a company selling virus protection for android, rim or IOS you should be ashamed of yourself. 

If you maintain a platform that allows 'virus companies' to play on your customer's fears by publishing their anti-virus software to your marketplace, you should feel ashamed of yourself.

If you read an analyst report about 'viruses' infecting ios, android or rim, you now know that analyst firm is not honest and is staffed with charlatans. There is probably an exception, but extraordinary claims need extraordinary evidence. 

Funny, I never read anything about 'viruses' infecting iOS or "RIM". The hysteria tends to revolve around Android.

Source: The Verge

AmazonWireless Instant Discount Policy

When you purchase your device with service from AmazonWireless.com, we automatically pass along an instant discount from the carrier to you.  This discount has been provided to you based on your agreement to (a) activate a new, or extend an existing, line of service for this device with the carrier, and (b) maintain this service in good standing for a minimum of 181 consecutive days.  If you do not activate or extend a line of service in connection with this device, or if your service is canceled/disconnected before 181 consecutive days, AmazonWireless.com will charge you $250 per device, plus applicable taxes.

Amazon adds an ETF, and provides a bit of insight into how "authorized resellers" make their money. Interesting that the whole ETF expires at only 6 months into the contract.

Android Ecosystem: 8 out of 10

At the very bottom of The Verge's review of the recently released Galaxy Nexus you'll find a table of ratings for the device. The very last item rated is "ECOSYSTEM"

The rating is 8 out of 10.

Earlier today, Mr. Gruber over at Daring Fireball made note of a story at Global Threat Center about Android malware.

If you shop for and install apps only from, say, Google’s own Android Market and Amazon’s Appstore, how likely are you to encounter [Android malware]?

Perhaps Google Trends would provide a view on how prevalent this issue is:

Well, that's interesting. What about searching just for "ios malware"?

People are discussing malware on Android. They are not discussing it on iOS. This obviously doesn't tell the whole story, but another interesting statistic may be the number of anti-virus/malware apps on each marketplace.

Searching for 'anti virus' on the Android Marketplace...

Not exactly off to a good start. When searching for 'anti virus' on the Android Marketplace, the results were counted as literally 'At least 1000' results. When searching for the same phrase in the iOS App store, there were a total of 35 results, none of which claimed to be any soft of anti-virus or anti-malware app, but rather games or information about web based threats.

I suppose it's a good thing that Google lets anything into the Marketplace. If they didn't developers wouldn't be able to sell their anti-virus apps.

'We're Committed'

RIM will "maintain choice within its product portfolio" and is "absolutely committed to building more great keyboard-based smartphones."

Anonymous RIM employee via Engadget, November 16th, 2011.

Holding on to conventions of the past is the last bastion of the freightened and confused. The music industry, the motion picture industry, the publishing industry. Besides, we've heard the words 'we're committed' before...

We are not walking away from webOS.

Stephen DeWitt of HP, via The Verge, August 18th, 2011.

We need to earn our way in. But we’re committed [to WebOS].

Richard Kerris of HP, via mocoNews, March 30, 2011

We believe webOS can become the backbone for many of HP’s small form factor devices, and we expect to expand webOS’s footprint beyond just the smartphone market...

Marc Hurd formerly or HP, via BGR, June 3rd, 2010.

Since When Did Apple 'Slash Prices'?

The class act of Cupertino may have priced its iPad out of the market this holiday season.

By keeping the price of their market-leading market-making product the same as it was at launch, the same amount that has made them the only successful tablet manufacturer, they have priced themselves out of the market this holiday. This just reeks of analyst rhetoric...

Goldman Sachs analyst Bill Shope is advising clients to keep an eye on iPad sales this quarter, fearing that the company is facing some near-term demand challenges for its iconic tablet. He argues, and rightfully so, that Apple is long overdue for a price cut.

Goldman Sachs! Well, if there was ever a respectable Wall Street firm...

It doesn't take a rocket scientist to figure out that Apple -- until now the runaway market share champ in this nascent niche -- is finally facing legitimate competition at ridiculously attractive price points.

Analyst from Respectable Wall Street Firm suggests to Mercedes that it lower the price of it's E-Class under threat of competitive pressures from recent Hyundai and Kia offerings. Also notes, beware of bargain-basement used car lots selling their failed products for a fraction of original retail price.

Props to MSNBC for the breaking the story.

Nobody Expects the Spanish Inquisition!

But even in the event they begin to receive payments, Sabam stresses that any compensation would by no means legalize piracy. The license fee is only meant to legitimize the ISPs part in transferring these unauthorized files.

I don't even know where to begin with this one.

Are there even $100 worth of apps in RIM's store?

Alternate title: 'RIM offers one of every app to users'

$5/month for 50 songs

Strange from a company that loves to have more than necessary.

Good luck with that, RIM.