Friday, September 30, 2011

Amazon's Kindle Fire Being Sold at a Loss

Amazon's Kindle Fire Being Sold at a Loss

The Register: Amazon's Kindle Fire being sold at a loss
"But if IHS's preliminary analysis is correct, Amazon is more canny than that old thigh-slapper might suggest. IHS believes that Amazon is willing to make only a marginal profit on the Fire plus a relatively small amount of digital content that users will buy per tablet, because the online retailer is using it as a loss-leader to get customers into its online store where they'll pay good, high-margin money for gadgets, gizmos, and gewgaws.

A reasonable argument, but Amazon may have more than mere enticement in mind. Digital content – warning: prepare for a "well, duh!" statement – is the wave of the future."


Well, duh... indeed. 

All Nurses Central reports on the competition (which might explain just why HP is attempting to bail on hardware):
"I read an article back in August by Brooke Meyer titled “Who Made Your Notebook?” Mr. Meyer’s article so interested me that I wanted to share some of it with you today. You can keep up with Brooke Meyer’s reporting on technology by browsing to his website called Brooke's View.
According to Mr. Meyers, the answer to the question he posed is:

"Not the company whose name is on it. Why? “…competition for orders is also expected to further lower notebook makers’ gross margins in 2011 from 4% in 2010.”
  • After the OEM/ODM 4% profit, “manufacturers” like Dell make 5% and HP earns 9%.
  • Apple’s profit on each iPad ranges from 40 to 55%. (Who makes iPads? FoxConn.) Selling 2 million units each month, Apple wins.


If the Amazon Kindle Fire adds nothing to the bottom line... 

How much profit does Amazon make on a digital download of a $9.99 eBook or album?


Amazon Fire: Media Mis-Fires on Announcement (pt 2)

Amazon Fire: Media Mis-Fires on Announcement (Update: Part 2) 

My best ideas come to me at 1:47am. My previous post talks about media response to the Amazon Kindle Fire (Media Mis-Fires). 

Another key question: What about the impact on the Nintendo DS and other handheld players? 

On my personal blog, where all of my deep-inner thoughts and unprofessional rants are posted, I ask if the Amazon Kindle Fire is a better choice for the kids than an Apple iTouch.


Thursday, September 29, 2011

Amazon Fire: Media Mis-Fires on Announcement

Amazon Fire: Media Mis-Fires on Announcement - Part 1

Here are early media themes about the Amazon Fire:

Yahoo News: Kindle Fire may force Android tablet makers to cut prices.
"The pricing is critical to gain traction in the tablet market... Rival manufacturers have failed to attract consumers as they have matched the iPad's price point without matching its content offering," said Adam Leach, an analyst at research firm Ovum. "Amazon's retail-based business model allows the company to subsidize the device on the premise that consumers will buy more from Amazon, be that physical goods or its digital content."
Yahoo Finance Can Amazon Really Bruise Apple?
"However, the main focus of the day is the Kindle Fire. At a price of $199, it could present a real challenge to the iPad, something that past companies such as Motorola and Research in Motion have been unable to do. Microsoft is also preparing to re-enter the tablet market (after past failures) with its Windows 8 in the near future. Analysts were expecting a price of about $250 for the Kindle Fire. At a price of $199, analysts are now expecting Amazon to subsidize the low price tag. However, Amazon has an advantage that past tablet challengers were lacking, a massive library of digital and physical goods. The Kindle Fire will make it easier to buy Amazon’s products, including everything from books and movies to sports equipment.
Simit Patel of Seeking Alpha: Amazon's Tablet Marks Start Of Media Companies Disrupting Hardware Businesses
"Amazon is blazing the trail here. To minimize its costs, the firm's tablets will be built atop a forked version of the Android operating system. Indeed, building off existing open source software as a foundation will be a key part of how media companies create hardware products at minimal cost. On top of this, though, is the fact that Amazon is pricing its tablet at below cost; rather, the company is expecting media sales to make the venture profitable for shareholders. "
Eric Schonfeld of TechCrunch: The Kindle Fire Will Have A Whole New “Cloud Accelerated” Mobile Browser Called Amazon Silk.
“The so-called split browser essentially has two homes: on the Kindle Fire itself, and in Amazon’s EC2. Basically, when a user pulls up a webpage on their Kindle Fire, EC2 handles all the rendering to optimize it for the Fire’s screen. Images are resized on the fly, and what’s more, it tracks user’s behavior. Users who visit TechCrunch all the time, will notice quicker load times because Silk detects that pattern of activity and pre-caches the site.”
Sarah Kessler has poll results from Mashable Readers (whom feel empowered to judge the Fire with little hands on experience. Amazon Kindle Fire: iPad Killer or Ereader Substitute? [Poll]

Mash Poll

Why are these themes misplaced?
  1. Apple’s price point is not remotely critical to the other Android tablets. Users want content, and Apple and the iTunes eco-system provide content. Apple enjoys huge double-digit margins while other manufacturers are scrapping by in the low single digits. The Amazon Fire comes with Amazon content, but conversion of the Amazon “reading” and catalog retail audience into movie streaming, music playing and (most important) paying customers is still an unknown.
  2. Margins are less important to Amazon Fire. The “razor and blades” model is well established at Amazon. A more interesting question is how the $100 HP and the $200 Fire will impact the low end readers and Android tablets. After all, those users will still need to collect content. This same dynamic is playing out in the Apple iPod product line as prices continue to fall on products with more features. I predict that the iTouch and a new sports-oriented Shuffle (water proof and shock resistant) will be the lone survivors.
  3. Amazon Fire will likely impact readers and low end Androids. But, the better question to ask: Is there a viable Android market that remains to be tapped? I posit that the Enterprise Android (see the excellent Toshiba Thrive) and the “rugged” tablets will continue to be profitable at the $500+ price range. The first Android to be picked up by a major Corporation will take on gravity. In my opinion this is where the Dell Streak was supposed to play. And, until Microsoft gains traction this area is still open territory for Android.
  4. Silk and the split browser. Very cool, very slick. I predict that Silk will get much more press after the end user community can validate the experience. Content distribution and caching built a company called Akamai. The ability to offload the wait time of the dozens of TCIP calls required to render a page may prove more significant than price or content. The X-ms response delays needed to collect data from different servers linger for all users. As more content is seeded into the cloud and spread across servers, datacenters, and continents, Silk might be the moat that Amazon needs for its’ cloud strategy. Silk, even without link pre-cache or pre-fetch, might be the big winner in this release. 
  5. 42% iPad fanboys responded to the poll to support what hypothesis, that they still love their iPad?


Wednesday, September 14, 2011

University of Texas - Tuition and Checked Luggage Fees

University of Texas - Tuition and Checked Luggage Fees

The Houston Chronicle reports: UT report says its grad rates among country's best - Houston Chronicle:
"AUSTIN - The University of Texas ranks among the best and most efficient public universities when it comes to graduating students in six years, but still must help them get their degrees faster, according to a school report released Thursday.

Texas graduates 81 percent of its students within a six-year window, 12th best out of the nation's 120 public research universities, according to the report. In Texas, that ranks second only to private school Rice University. Rice's graduation rate was not included in the report." 
The article cites "in-state tuition averaged $8,000 last year". 

Cough, cough, ahem... 

So, if my round trip airfare from Austin, Tx to San Jose, Ca is $238 on Continental, United or American... which airline has the lowest cost for the trip?

Answer: Trick Question

It depends on the number of pieces of luggage -- i.e. the FEES that they charge in addition to the airfare. 

Texas State is Not UT

The fee table above is from Texas State University. At 12 units, these fees represent a 29% premium over the tuition. Oops, the parking permit required to park on campus is not included - and neither are books, or housing, or food... or beer!

Reality vs. Talking Points 

The Star-Telegram reports, "Gov. Rick Perry on Tuesday outlined a plan as part of his State of the State address that is challenging public universities to make that a reality. He says the key to making a university diploma more financially attainable is having public universities freeze tuition. He further challenged public universities to try to develop a bachelor's degree at a cost of $10,000, including books." 

How do you spend $100,000 on a 4-Year Degree 

Universities and airlines are "unbundling" prices in order to present the "lowest" tuition price (as determined by their marketing department). You might also say that they are trying to "hide" their total cost. 

6 years * ($8,000 + Fees + Books + Living Expenses) = Cha-ching.

Bottom Line 

Until you understand what the total COST is, comparisons between airlines and Universities will continue to be difficult to judge.


Bachelor's Degree in Sarcasm

Bachelor's Degree in Sarcasm

The Money Matters Column in Gawker has a beautiful chart from a report by Georgetown University in their post " College Is a Decent Bet (That You Might Lose)". Gawker cites a post by Motoko Rich in the NY Times Economix Blog that "The bachelor's degree holders most likely to be at a disadvantage, he said, are those with liberal arts degrees. "

 Gawker then posits (possibly in a sarcastic tone) 
"...the chart above shows you just how many people with a lower level of education than you will end up making more money than you. Not a ton, but just enough to make you question whether that art history degree was really worth it, or whether you would have been better off using that money to pay for plastic surgery to turn yourself into a white male. (Yes.) Haha, but seriously, no, overall, chances are you're better off going to school."
Kim Brooks of  Salon writes "Is it Time to Kill the Liberal Arts Degree?" and cites the same NY Times article. She then tries to chases down the obvious question from her Alma Mater the University of Virginia: 
"When I asked him how a 22-year-old with no job, no income, no health insurance and, in some cases, six figures of college debt to pay off is supposed to be a citizen of the world, he said he had no comment, that he was the wrong person to talk to, and he directed me to another dean, who was also unable to comment."

Issue 1 -- too much sarcasm is a bad thing:

I take issue with the Gawker post, because it is difficult to see their opinion - the sarcasm is a touch strong and it left me questioning their intent. The Georgetown report makes the same (devastating) statement about the liberal arts degree, without introducing sarcasm and with a clear opinions of pending failure.

Recommendation 1 -- Read the Salon article, skip the Gawker article:

The Brooks article was more specific to the question. I have to take issue with the two (2!) Deans from the University of Virginia that could not reply to the most basic question of why does your Liberal Arts program exist? How do you take tuition for a program that has no specific benefits (how did you even get your job)?

Disclaimer Time

I have a Liberal Arts degree (History) and an MBA, my brother has a Liberal Arts degree (Psychology) a professional degree (MD) which cost him 6 more years of school and hundreds of hours of internship. He is much smarter than the average bear and we are Hispanic. Face it, not everyone can be an MD, RN or Engineer. 

So let's review the rules:

  1. A college degree is not a guarantee of a job
  2. A college degree is not about a guarantee of success
  3. A college degree is not a guarantee of happiness, riches or satisfaction
  4. A college degree that that sinks you into $100,000 of debt does guarantee a long lasting relationship with the US Government
The Georgetown Report makes it crystal clear that "workers progress up an occupational hierarchy, not an industry-based one". Interesting that they provided no commentary on how this might manifest itself in unemployment - as it would appear to exacerbate structural unemployment.

Of course, a Liberals Art Major might prove to be flexible enough to leap over structural problems. 


Monday, September 12, 2011

The Zero Jobs Report - It's Cool to Stay in School

The Zero Jobs Report - It's Cool to Stay in School

Seeking Alpha comments on the The Zero Jobs Report:
"Once again we are seeing the real return of an educationally bifurcated economy, as those with either some college or a college degree gained (Household Survey numbers) 449,000 jobs last month, which was offset by losses of 581,000 jobs by those with just a high school diploma (all numbers are for ages 25+). The economy actually appears to be doing okay for those with a post-secondary education, but's still mired in losses for those without."
Even was pessimistic: Jobs Report: A Big Fat Zero "...the report screamed stagnation, except where it documented decline." Michigan Live ( cites a study by the Brookings Institute that reduces the problem to a very simple mathematical equation:

"According to Brookings, in the Detroit, Warren, Livonia Metropolitan Statistical Area (MSA), workers with bachelor's degrees had only a moderately high unemployment rate in 2009 of 6.8 percent, while 21.5 percent of those with a high school diploma or less were unemployed in 2009."
Again, the Xolotech position is that a College Education is critical for developing relationships and garnering critical "signaling" attributes. We just don't think you should go thousands of dollars into debt. After all, the survey does not quote schools attended or academic achievement - only Pass/Fail.

Bottom Line: 

You can pass, or you can fail.  


Friday, September 9, 2011

Google Music Beta on iOS - Early Results = Fail

Google Music Beta on iOS - Early Results = Fail

PC Magazine reports Google Music Beta Comes to iOS, Sort Of 

"It's still invite-only, and there's still no store, Google Music Beta is now accessible on iOS devices like the iPhone, iPad, and iPod touch. No, there's no app, but there is a new iOS-specific HTML5 Web interface that makes playing songs in your Google Music locker a snap. It's a very Google-like solution (Google's whole Chrome OS is based on the same approach), though, ironically, Google makes an Android app for the service. Unlike Apple iCloud's iTunes in the Cloud service, Google Music actually streams your music from the cloud. 

Apple's service works by on-demand downloading rather than streaming, so you need to have the full audio files stored on your device. A true cloud-based solution like Google Music doesn't require this. Where Apple wins this race, though, is with its enormous store of music available for purchase."

So the first three tries resulted in a Microsoft-esque error message. So I applied Microsoft-esque solution: Closed the browser window, opened iGoogle in another browser window (to confirm my login/identity) then navigated to

5 Minute Review: 

  • Album Art is still hideous
  • Duplicate songs still evident 
  • Streaming works just fine - so 6000+ songs on my phone with little impact to storage
[Edit: 15 minute update - Music was interrupted when Meeting Reminder Alert was triggered, but the Alert was never displayed. Google Music acted like it lost connection (3-4 seconds) then resumed.]

Bottom Line: 

Where Apple wins this race is that their applications work and work well. 

See our previous post: Google Music Beta - Designed by Experts

Also, I still have invites to give away... 


Thursday, September 1, 2011

University as a Social Networking Opportunity

University as a Social Networking Opportunity

The Chronicle of Higher Education discusses "Business Educators Struggle to Put Students to Put Students to Work". 
"Business education has come to be defined in the minds of students as a place for developing elite social networks and getting access to corporate recruiters," says Rakesh Khurana, a professor at Harvard Business School who is a prominent critic of the field. It's an attitude that he first saw in M.B.A. programs but has migrated, he says, to the undergraduate level."
So, is there any advantage to a pursuing a Liberal Arts Major? 
"A forthcoming report from the Carnegie Foundation for the Advancement of Teaching praises 10 American colleges of business as models for integrating the liberal arts and practical training.
"One of the objects of praise is business-oriented Babson College. Its president, Leonard A. Schlesinger, says that concrete business skills tend to expire in five years or so, as technology and organizations change. History and philosophy, on the other hand, provide the kind of contextual knowledge and reasoning skills that are indispensable for business students."

The Bottom Line:

Success is about effort. Coasting, and networking is not a dependable strategy. 

Great (local) Reference: 
Dr. Katharine Brooks' "You Majored in What?". She is currently the Director of Liberal Arts Career Services for The University of Texas at Austin.

Recruiting Intensity

Recruiting Intensity

Bloomberg News discusses "Why Employers Are Slow to Fill Jobs: Business Class" based on work by Stephen J. Davis, Jason Faberman, and John Haltiwanger.

"...recruiting intensity per vacancy plummeted during the recession. Despite a modest rebound, recruiting intensity in 2011 remains 20 percent below 2006. Lower recruiting intensity leads directly to a slower pace of job filling.
Why did recruiting intensity plummet? More to the point, why hasn’t it returned to pre-recession levels? Labor-market slack is part of the answer. Many employers see little downside to passing on marginally qualified applicants when new candidates arrive daily. There is no rush to hire. Anecdotal evidence suggests that some employers see the current situation as an opportunity to upgrade labor quality, hiring only the most outstanding candidates."

Recently a friend applied for two project manager positions with a finance company. Both positions seemed to be a good fit, until a simple survey (6-7 questions) popped-up after the standard demographic questions. 

How many years of Oracle 12R programming experience do you have?

The good news is that the rejection email came back in less than one day. The bad news is that the position was for a Project Manager (not a developer, programmer, or analyst). The company must have felt that they could find a PM with 10+ years experience in a complex work environment with Oracle programming skills. 

My experience is that Project Managers are not usually good programmers, and programmers are not always good project managers. As a person grows in their career discipline, they are becoming more specialized.

The Bottom Line:

Outstanding candidates are in demand - and employers are being very selective.


Education Bubble - The Entrepreneur's Dilemma

The Education Bubble

Zoe Fox (@zoebfox) of Mashable covers: Diploma or Dropout: The Entrepreneur's Dilemma:

"In May, Facebook investor and PayPal founder Peter Thiel launched the “20 under 20 Fellowship.” It awards $100,000 to students to pursue entrepreneurship. The motley crew of 24 fellows (20 total teams) will substitute traditional academics for two years of tutelage under Thiel’s oversight.

While the benefactor has two degrees from Stanford, he’s infamously outspoken on the over-hyped status of higher education. Thiel believes his fellowship will help solve the bubble of underemployed American degree holders and nourish the creative spirit in the America’s business environment."

Sarah Lacy (@saracuda), previously at TechCrunch, adds to the conversation: Peter Thiel: We're in a Bubble and It's Not the Internet. It's Higher Education.
"Like the housing bubble, the education bubble is about security and insurance against the future. Both whisper a seductive promise into the ears of worried Americans: Do this and you will be safe. The excesses of both were always excused by a core national belief that no matter what happens in the world, these were the best investments you could make. Housing prices would always go up, and you will always make more money if you are college educated."

The Education Bubble seems to be a discussion of Elitism - the old value system where the fruits of higher education is an unchallenged story. Now that story is slowly devolving into modern myth. 

Sarah Needleman (@saraheneedleman) recounts a horrifying story in her Wall Street Journal column "The Accidental Entrepreneur". No, not the story of inventory software that did not scale with a small business (the primary intent of the story). But the story of an entrepreneur with $200,000 in student loan debt, who then borrows $60,000 more to open the fumee cigar shop. [Update: This "Best Kept Secret" in Austin really was well kept... it closed in 2011).  

MarketWatch has a timely article by the firm LeClairRyan about the Tuition Bubble [2/2015: the story at this link is no longer available].
"Both the mainstream media and education-focused publications such as The Chronicle of Higher Education have noted the growing sense that higher education is overpriced and under-delivering, but the risks this poses to higher education risk management has yet to be adequately explored, the attorney contends. The cascading effects of a bubble collapse "would impact risk analysis and preparedness in manifold ways,"
Smith notes. "For risk management professionals, a useful thought exercise is to envision an environment marked by plummeting enrollments, shrinking endowments, and disappointing levels of tuition income. Over the long-term, what might such a collapse mean for higher education and society?"

The Bottom Line: 

1 - Colleges are being run like a business, you have to decide if the ROI is good enough.
2 - You have to sell a lot of $10 cigars to pay off $250,000 in debt. 
3 - $250,000 buys a pretty nice house in Austin, Round Rock, or Cedar Park.

The sheepskin that you receive at Graduation should not be a Debt-Sentence.

[Updated 2/2015]