Apple bids fair to take over the electronic world

as iSteve's little Cupertino company doubles revenues year over year, pushes profits to heights not previously imagined, and bids to continue on this path indefinitely. As previously predicted in this space, many of the purchasers of iProducts are now buying Macs as well, ensuring a growing dominance in that space as more and more people come to realize that it's better to use a real operating system rather than a cheap, buggy knockoff. Eventually business will "get" it too, and when that tide turns, the whole industry will reach a cusp.

Perhaps this past quarter offered a defining moment of sorts, as Apple's profit surpassed that of MS for the first time since the early nineties (by several hundred million, and no looking back). Given that Apple is a relatively high-cost hardware operation, and MS an extremely low marginal cost software house, this is a truly momentous kilometrestone.

Apple got to this point by being market-nimble with its products--either anticipating what will be needed or, more recently, defining the want by first creating the product. The "cool" factor now dominates the iProduct space to the extent that Apple could market oranges to rave reviews, long line-ups, and supply shortages--especially if they were painted white.

You see, many pundits have it wrong. There isn't a "tablet market" out there, and there never was. There is an iPad market, and little else. It's a space Apple created, and owns outright, one that is encroaching heavily on the low end laptop market (supplied by nearly everyone but Apple). There are no competing products, just feeble attempts to carve out a slice of Apple's niche. Does no one else have any creativity?

And, we're not talking about a new phenomenon here. Apple has all along either created or brought to the consumer market nearly every innovation in personal computing to see the light of day since the late seventies. It never was a company making toys as some claimed. Rather it was the leading edge of technology development, the definer of the market, the purveyor of quality and innovative gear regardless of what the rest were selling, the company not only where new things were happening, but whose products were making things happen in the broader society.

This has been iSteve's genius--the ability to make products wanted by the masses (a deliberately ambiguous phrase that)--and it makes the questions about the continued growth of an iCook-led company legitimate. Aside: It won't do to try to reserve or innovate around the word "Timmies" as that is reserved here in the frozen north for the premiere doughnut and coffee shop.

The Spy has another concern--that the very size of the company in the light of its own success could outrun it's capability to continue delivering the goods. You see, big trades off with nimble, and with good. We see a measure of this with the latest iPad introduction, where Apple quickly found it could not make nearly enough product to meet demand, and indeed still has not caught up. The next iPhone iteration (world phone, new case design, available in black or white, on sale no sooner than October; you read it here first) is likely to have similar issues. Is it possible for one company to satisfy the demand for say, eight to ten million of a device on the first day of introduction, twenty million in a month? a hundred million plus in a year? Is it even possible to source the components for as many iProducts for which Apple can the create iWant? Each ramp-up in the scale of demand makes this more difficult--not impossible, mind, but poses an increasing risk of failure to deliver the goods.

And, when this enormous demand spills back into the computer marketplace, and upon the inevitable economic uptick, when the corporate world tech buyers realizes what everyone else already has, that the MacOS is not only better, faster and safer, but that Macs are even the best W*nd*ws machines, when Apple's share of that market begins to approach similar percentages, can one company, however insanely great, manufacture and deliver enough of those to meet the demand? (See, a big sentence isn't necessarily a great one, either.) These logistics have fared well thus far, but it may be fair to question whether the company is at greater risk for not having iSteve at the daily design helm, or by having iCook preoccupied away from supply management.

It will be interesting to see whether the coming iCloud service meets with similar success, for if it does, Apple's data centre will quickly prove too small by far, and the existing network infrastructure inadequate to handle the traffic--and a fix will not take the weeks or months of an antenna tweak, but years of limping while building more infrastructure. Let's make a generous assumption and on hope alone give Apple some credit for thinking such issues through ahead of time, but should iCloud meet with the same kind of enthusiasm as has the hardware that will use it, there may be rain on Apple's parade if the company cannot meet expectations or suffers a failure.

It seems to the Spy that reinventing the Cloud so as to create an exclusive and perfect iStorm of data to and from Apple's servers also requires re-inventing security for same. And, as twice previously mentioned in this space, a single data centre may do if you're offering hosting and co-location, but it is worse than unsatisfactory if you are offering cloud services on a worldwide basis. A single locus of failure is a catastrophe waiting to happen, not to mention a juicy target. A web site is easily moved; a hundred thousand servers full of data are not. Thus that giant state-of-the-art data centre is too small even before the day it opens, and remains too small until it is cloned four or five times over and on at least three continents.

Like the DNS system run by top level domain registries, where redundancy is taken to extremes, failure in a sufficiently large and relied-upon enterprise is not an option. If one's computer croaks, a new box can be running off a backup of the data in a few hours. If one's cloud service dies for lack of multiple redundancy, it may never rise again.

Consider the parallel lesson learned by the recent failure of Sony's Playstation server--some seventy-seven million people had personal data including passwords and/or credit card information compromised. If every Mac and iProduct user were on Apple's iCloud, a physical or security failure would have the effect of a tsunami. More than any recent product intro, this one must be done right. There is no margin for error or failure. Customers may forgive a wonky antenna, but not the compromise of their personal information

Oh, and most pundits are touting Apple's cloud as a music product. To that, the Spy offers some "yes, buts."

Yes, but, what about books (especially textbooks), cloud data backup, and video--any of which have the potential to require at least as much disk space and bandwidth, in some cases far more than music. The iCloud is just the tip of a cumulus monster--one that Apple will own by right of redefinition, just as it does "app store". Not all the import of last month's column was in jest. But again, when a cloud gets large enough, it's time to be wary of thunderstorms. Hail can ruin an apple orchard in minutes.

As a further cautionary word on one aspect of this subject, when the Spy asks himself whether he would trust critical data to the cloud, he must reply "not a chance". The risk is too great. And, organizations that consider going this route had better consult lawyers, privacy experts, security gurus, disaster scenario experts, and not put a toe into these waters without assuming that everything will go horribly terribly wrong, at the worst time, and in the worst possible way, and have a plan for same. Still want to do it?

iCloud also lends credibility to ideas about the next MacPro

for, though the Spy had thought the current tower iteration seemed like the last, he now believes otherwise--that given Lion will contain the full Apple Server software suite, it makes more sense to tweak the tower slightly to a three unit wide box, and offer a mounting kit to allow the whole things to be turned sideways into a rack. Apple's iCloud facility would of course be a principal consumer for such machines, which could be marketed as a better replacement for the departed XServe, as well as to professionals, with only slight disk, CPU, and memory configuration differences, thus allowing a better price in both markets due to increased volumes. He has since heard rumours to this precise effect, and given they accord with his thinking, he offers them a modicum of credibility.

Curmudgeonly rant of the month department

revolves around the Spy's inability to relate to or even understand the whole silly notion of "celebrity". From royals and entertainment stars/idols to industry moguls or trumps, to pastors who speak endlessly of "my ministry successes" to people who walk the streets dressed and painted in "hey, look at me"--in other words, the whole range of what appears on the surface to be our major societal preoccupation, the self-promoters who are the idols and emperors of billions' affections--among the lot the Spy is constitutionally unable to perceive clothes, substance, "blue" blood, or the significance of fame. True, sports "stars" have actually done something, but does it warrant the salaries they get, the acclaim they receive? In the Spy's HO, this too is obscenely overdone.

To be sure, he understands that one gives respect where respect is due, honour where honour is due, and obedience where obedience is due. The office a person holds is important, and so is the authority that comes with it. The person who routinely scorns all authority is at best an anarchist, and may be far worse. But one also gives worship only where worship is due.

Give the Spy instead that hard working student who finally "gets" calculus, becomes an engineer, and creates products or infrastructure that make a positive difference in people' lives. Give him the corner grocery store owner who serves her customers with old fashioned courtesy and style. Away with self promoters, and up with the humble grinder toiling on the fourth line. Off the front pages with celebrity serial weddings (and their inevitable divorces). Let's instead hear more of people faithfully married for sixty years to the same person and whose children and grandchildren are solid and productive citizens. Down with the cheating stock promoter, the amasser of obscene fortunes on others' backs, and up with those who add real value to real people's lives (whether they are rich or not). Away with politicians and celebrity lawyers who turn the language into knots for their own ends. He'll take the humble civil servant who offers the public real value, the grade one teacher who leads village children to read, or the pastor who preaches and practices the faith any day of the week over self-absorbed talkers. A Thomas Edison, a Grace Hopper, or a Billy Graham may be celebrities worthy of note; so are the secretary and janitor of a Moldavian orphanage, and the doorkeeper and toilet cleaner at the local Baptist church. Heroism is as heroism does, and most of the real thing goes unnoticed in this life in the glare of publicity over cheap, tinselly imitations.

For when this life is over, and the its deeds are tallied up, no one will care any more how much money someone made, what colour was their skin or hair, how well they, spoke, acted, sang, passed the football, looked when painted up, or persuaded others of their worth. (S)he who dies with the most toys, acclaim, or power wins nothing at all, still dies, and is soon forgotten. Enquire instead what legacy a person leaves in lives changed, society altered for the good, and people quietly served who cannot pay back, but are instead inspired to pay forward. At the end of life, will anyone say "well done, good and faithful servant"? Or will it be a case of "gone and best forgotten?" Real celebrity is value added, not parasitical.

Prediction of the month department?

As a few in the Excited States may have noticed, Canada is in the throes of a Federal election, brought about when the combined opposition created a "contempt of parliament" motion targeting the minority Conservative government. That opposition vote has been shifting around quite a bit in the opinion polls lately, but it begins to look like Canada is about to adopt "American style politics", not merely with divisive attack ads and empty rhetoric, but also with a two party system. Stay tuned, but the story of the election could well be (per the polls, if you believe them) the razor thin Conservative majority he's privately forecast all along (plus or minus seven seats) but now with the historic Liberals and the regional Bloc Quebecois both reduced to a rump.

Does this election have any significance in the technology space? The New Democrats (read "somewhat to the left of the American (old) Democrats") have attempted to harvest results from social media as did Obama, but their perhaps temporary success is more to the credit of Quebecers apparently abandoning their separatism while retaining their socialism. The Liberals (read "somewhat to the right of the Democrats, but on fiscal policy only") are an historic old party that seems lost in the modern era, with little to say to a technological society, and little to differentiate them from other parties on their wing. The Conservatives (read "well to the centre from Republicans") are running on their record (vinyl) looking for a majority, but using the tried and true old-style politics and issues (economy, jobs, family-oriented social policy) with little apparent interest in technology issues. The Greens are not a factor (remote chance of one seat), and the Bloc (separatists) are a one-issue and one-Province party. Neither of these have put forward any policies of particular relevance to the technically minded.

In short, it's not an election to excite anyone on the cutting edge. Now for the truly bold prediction. This will be the last time one can say that. The politicians may not yet have taken notice, but society has changed, and is changing further. Issues like technical literacy, the demise of privacy, the shortage of high-tech workers, the failures of the education business, multinationalism, social responsibility in post-industry industry, access to the metalibrary (what the Internet is becoming), the coming demise of many old industry stalwarts (pulp and paper, oil, dead tree publishing, and the post office, for instance), and the radically different modes of social and business intercourse will, perforce, all become front and centre in future elections, both as issues and for strategic reasons. Does anyone think the current style of campaigning and voting is likely to survive much farther into the information age? More, does anyone really think government needs to be as big and as centralized as it has become, when the issues that affect most people live at the local level?

The Spy will do his bit for democracy as a scrutineer on Monday, and by the time most people read this, the results will be known, but somehow the whole exercise this time has the feel of savage antiquity about it--somewhat like a typewriter, a dial telephone, a steam powered automobile, or a card punch machine. Past time to upgrade this system. It is possible to do participatory democracy now; representative democracy seems obsolete.

--The Northern Spy

Opinions expressed here are entirely the author's own, and no endorsement is implied by any community or organization to which he may be attached. Rick Sutcliffe, (a.k.a. The Northern Spy) is professor and chair of Computing Science and Mathematics at Canada's Trinity Western University. He has been involved as a member or consultant with the boards of several organizations, including in the corporate sector, and participated in industry standards at the national and international level. He is a long time technology author and has written two textbooks and six novels, one named best ePublished SF novel for 2003. His columns have appeared in numerous magazines and newspapers (paper and online), and he's a regular speaker at churches, schools, academic meetings, and conferences. He and his wife Joyce have lived in the Aldergrove/Bradner area of BC since 1972.

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