Tag Archives: apple

The Economist Weekly Round Up, Mar 5th – 11th

WHY OIL PRICES ARE SPIKING
1) Oil prices reached $120/barrel due to FOREIGN WORKERS FLEEING Libya amidst the civil unrest. Compare to the peak of $150/barrel in 2008. There is much concern in India and China where the monetary policy is loose and inflation is rife. Aside from the Libya ‘blip’ wider structural issues remain as oil demand is fast outpacing increases in readily availably supply. More must be done in the areas of electric vehicles and pricing carbons.

DEVELOPING WORLD’S BIG HITTERS
A new trend of ‘diversified global conglomerates’ was identified. Examples include Tata (India), Brazil’s Embaraer (aircraft) and South Africa’s MTN (mobile phones). Such groups able to unlock developing markets where governments are frequently incompetent and the markets are hopelessly underdeveloped.

TIME FOR NO FLY IN LIBYA
Britain is pushing for a no-fly-zone over Libya to quash the regime’s use of helicopter gunships and aircraft on dissecting civilians. Deployment of a no-fly-zone helped save the lives of Kurds in Iraq. America did not support this proposal as it is concerned of being embroiled in another misadventure.

REMARKABLE UN SOLIDARITY ON LIBYA SANCATIONS
Although the international community is mostly against a no-fly-zone over Libya, there is surprising consensus on international sanctions against Libya and the referral of Colonel Gadaffi to the International Criminal Court as unanimously voted for by the UN Security Council (which includes Russia and China). It is believed that this because of the inevitable fall of Gadaffi.

COURT SAYS OK TO BASH THE TROOPS
The Supreme Court defended the right of Kansas’ Westboro Baptist church to PICKET the funeral of troops killed in the Afghanistan and Iraqi wars. The church believes the fatalities are due to American society’s tolerance of homosexuality. Compare to the picketing of returning British military coffins at Wooton Basset.

OBAMA CONCEDES TO MANDATE WAIVERS
Obama will immediately give states the opportunity to seek waivers from the MANDATES in his healthcare package as soon as it comes into effect. There have been state level challenges against the constitutionality of the healthcare mandates.

2012 RUNNERS
Obama’s looking good for 2012 because: 48% approval rating is respectable, economy gradually recovering and he has a slick electoral machine. Obama’s not looking good for 2012 because: whites are deserting him in key electoral battlegrounds including Ohio, Florida, Virginia, Indiana and Wisconsin. Names touted for the republican nomination contest include Romney, Gingrich, Pawlenty, Daniels, Huntsman, Rick Santorum, Hayley Barbour, but surprisingly not Sarah Palin (who only received 3% of the votes at the recent CPAC convention).

WILL APPLE’S CLOSED MODEL WORK FOR APPS?
Apple is steaming ahead in the tablet market (which it itself pioneered) following the release of the iPad 2 (its predecessor sold over 15m units). Competing tablet manufacturers are adopting Google Android’s OS (which has now been adapted for tablets). It is unclear whether the iPad’s closed model will succeed in the same way it did with iTunes (where the music market is dominated by a few major publishers).

SECOND/THIRD GENERATION IMMIGRANTS ARE THE WORST!
Jewish riots in Brick Lane in the 19th Century, black riots in Brixton in 1981 and asian riots in Bradford in 2001. All involving 2nd generation immigrants who are less willing to live with the slights and marginalisation experienced by immigrants. Optimism lies as future generations integrate better. Exemplified by modern day Jews and Blacks.

BANKERS TIRE OF SWIZERLAND
The well off bankers who left London for Swizerland are being outgunned by the super-rich. Schools are a particular background where there is an overdemand for places at the local international schools. Although banks may be regulated less, every day life appears to be regulated more e.g. if you want a Sunday lunch, you have to drive to France (as everything is closed in the city because people are out skiing and sailing in the countryside).

BILATERAL TIES OR GLOBAL INSTITUTIONAL PLAY?
The Labour party is articulating its foreign policy position in opposition. It takes issues against the Foreign Office’s policy of circumventing the international bodies (e.g. EU/UN) in order to forge its own bilateral ties with countries. Douglas Alexander, the shadow Foreign Secretary, believes the real power lies with the internal bodies. He’s seen a right leaning figure in a heavily leftwards Labour party.

HIGH SPEED RAIL NOT NECESSARILY PROFITABLE
High Speed Rail 2 (HS2), which will provide high speed rail to Manchester and Leeds from London, is due to start being built from 2017 and operable form 2026. The cost-benefit on high speed rail investment is not clear following schemes like the Channel Tunnel which has never come close to achieving its projected passenger numbers.

OFSTED ARE A JOKE
Almost half of school pupils leave without 5 GCSE passes despite 89% of secondary schools being rated satisfactory or better by OFSTED.

DEMOCRACY BUT NO LIGHT IN IRAQ
Even though democracy has already been installed in Iraq, street protests against the government continue as it is not able to delivery basic services including a regular supply of electricity.

Won’t be bullied by Apple

jt_on_amazon.jpg

amazon.com’s current selection of Timberlake songs

Apple offers a collection of about 6 million music tracks available for download from its iTunes store. The vast majority of the tracks are DRM protected. The DRM protects a couple of Apple’s commercial interests. First of all, it ensures that a track downloaded from the iTunes store may only play on Apple’s range of iPod mp3 players. This measure excludes the playability of the downloaded track on mp3 players manufactured by Apple’s competitors. Secondly, the DRM imposed on a downloaded track upholds Apple’s ‘fairplay’ doctrine, which limits the number of possible copies of the downloaded track to five.

Apple’s approach to DRM did not seem to perturb their commercial success. Their enterprise influenced the growth in the online music market to such an extent that they inevitably monopolised it. However, in April this year, Apple embarked in joint venture with the EMI record label which amounted to a significant shift in its position on DRM. Apple announced that tracks from EMI artists were to be made available, for download from the iTunes store, DRM free.

So why did Apple change its position on DRM? A major factor is likely to have been the trend in the market for mp3 players. Whilst Apple monopolised online digital music downloads, they were not so overwhelming in the market for MP3 players. Apple’s iPod mp3 player was still regarded as a luxury product (set me back personally over 300 smackers!), and despite it’s efforts to bring out cheaper models, such as the iPod Shuffle, iPod Mini, and iPod Nano, the market for cheap mp3 players blossomed with diversity. Moreover, the mp3 market was gradually being eroded by the mobile phone market, as mobile phone handsets started offering mp3 audio features. Accordingly, the rise in demand for iTunes downloads which could be played on any device and not just the iPod range. This was in effect a demand for music tracks minus the DRM.

At the time when Apple announced it’s venture with EMI, it also suggested that it was looking to establish such agreements with other major record labels. As we approach the end of 2007, it seems that EMI are still the only major record label to have made their tracks available DRM free on iTunes. So what of the other record labels?

Concerned by the power wielded by Apple in the online music industry, the other major record labels decided in turn to establish agreements with distributors of online music OTHER THAN Apple. The first to do so was Universal music, who manage the likes of Rihanna, Kanye West and Jay Z. This was followed up by news today that Warner music had agreed to make their catalogue of music, which includes the works of artists such as Madonna, DRM free, available on Amazon.com’s emerging music store.

It will be interesting to see whether the backing of Universal and Warner can help leverage the Amazon music store as a viable competitor to iTunes and thus tear up the online music market. Also it will be interesting to see what the last remaining major record label, Sony BMG, opt to do. As it stands, consumers will have to wait a while before they can legally listen to Justin Timberlake on their non Apple products.