Big, glitzy trade shows may be falling out of favor in these austere times, but this week’s Consumer Electronics Show in Las Vegas will still be the catalyst for enough new product announcements to keep the gadget geeks gurgling contentedly for a while. And if you’re looking for a theme or two to emerge, you can start with networked TV. The show doesn’t officially begin until Thursday, but today brought a brace of news from companies looking to bridge the gap between the Net and your home entertainment system:
* Netflix — already working to supplement its DVD rental business with online streaming via TiVo, the Xbox 360, the Roku set-top box and a couple of Blu-ray disc players — announced the first deal that skips the outboard equipment and integrates the service directly into a television, specifically a line of broadband-endabled, high-def sets coming from LG Electronics. “It’s hugely symbolic,” said Netflix CEO Reed Hastings. “The holy grail has always been to give the TV an Internet jack in addition to the cable jack. It’s an early glimpse of the long-term future.” The emphasis, says Dan Rayburn of the BusinessOfVideo.com blog, is on “long-term.”
* The $99 Roku Digital Video Player, currently able to channel only Netflix to your tube, later this year will add streaming access to Amazon Video On Demand and its library of 40,000 movies.
* Adobe Flash content is commonplace on the Web, and now Adobe and Intel want to bring that video format to the bigger screen. Intel plans to add Flash support to its Media Processor CE 3100, a system-on-a-chip designed for set-top boxes, Blu-ray players, digital TVs and other consumer electronics. Said William O. Leszinske Jr., general manager of Intel’s Digital Home Group, “Our effort with Adobe is poised to accelerate a rich, yet relevant Internet experience on the TV that will provide consumers with access to a growing number of Flash based applications that will ultimately be enjoyed across a number of screens seamlessly, from the laptop to a MID (mobile Internet device) and now the TV.”
* And in related news that helps explain all this connectivity activity, tracking outfit comScore reported that U.S. Internet users viewed 12.7 billion online videos during November, an increase of 34 percent year-over-year, and that the average viewer of online video devoted 273 of November’s minutes to the activity, 40 percent more than in November of last year.
In the tug of war over just which of Steve Jobs’ bodily functions warrant disclosure to investors and fans (see “Steve Jobs health rumors just won’t die“), the Apple CEO gave some ground this morning. In an open letter posted to the company’s site, Jobs begrudgingly acknowledged that he has in fact been sick — just not as sick as some suspected when he passed off his traditional keynote at this week’s Macworld.
“As many of you know, I have been losing weight throughout 2008,” Jobs wrote. “The reason has been a mystery to me and my doctors. A few weeks ago, I decided that getting to the root cause of this and reversing it needed to become my #1 priority. Fortunately, after further testing, my doctors think they have found the cause — a hormone imbalance that has been ‘robbing’ me of the proteins my body needs to be healthy. Sophisticated blood tests have confirmed this diagnosis. The remedy for this nutritional problem is relatively simple and straightforward, and I’ve already begun treatment. … I will continue as Apple’s CEO during my recovery. I have given more than my all to Apple for the past 11 years now. I will be the first one to step up and tell our Board of Directors if I can no longer continue to fulfill my duties as Apple’s CEO. … So now I’ve said more than I wanted to say, and all that I am going to say, about this.” In a separate note, the board reiterated that “if there ever comes a day when Steve wants to retire or for other reasons cannot continue to fulfill his duties as Apple’s CEO, you will know it.”
So, good news for all who found the gauntness worrisome, and a welcome dose of candidness for investors, who boosted the stock price more than 4 percent. Harder to remedy is the credibility imbalance resulting from the push and pull of a legitimate desire for privacy and an equally legitimate desire for material information. Officially, Apple kept saying the Macworld move was simply part of a move away from trade shows. Not quite true. Anonymous Apple insiders insisted to CNBC that Jobs’ absence from this year’s festivities had nothing to do with his health. Not quite true. Gizmodo’s source said Jobs’ health was “rapidly declining.” Mmm, borderline at best, depending on the interpretation. But what are you going to do? Apple and Jobs will continue to play this close to the vest, rumormongers will continue their monging, and the public will continue to pounce on whatever crumbs emerge. Bigger issues deserve our attention. Whatever will be, will be.
“The roll market has continued to decline, which is no surprise. It no longer is, nor has it been for some time, the central part of our business. We’re still doing what we always did, which is to provide software for pianos that play themselves. It’s just the technology that has changed. But I would be lying to say [the halting of production] doesn’t sadden me.”
– Bob Berkman of QRS Music Technologies, until last week the only continuously operating mass producer of piano rolls in the world, declares an end to the punch-card era for player pianos.
The best history blogs of 2008, and one that didn’t make the cut — The Last American Pirate, a hoax site created as a class project for a George Mason University course called Lying About the Past. Also, a roundup of the fiction published in the New Yorker last year.
OK, technically this is a business day, but, tucked between a holiday and the weekend, only barely. Anyone with a comp day to spare is relaxing at home, and the rest of us are just looking to run out the clock. Not to overwhelm you with technical terms, but that makes for what we professionals call a “slow news day,” so let’s just take a quick run through what chatter there is, hang it up for the week and get a serious start on 2009 come Monday:
* Google watchers have been saying the search sovereign has ambitions for its Android platform that go far beyond the mobile phone, and as an illustration of one possibility, a couple fellows from a stealth outfit called mobile-facts went and compiled the operating system to run on an Asus EEEPC 1000H netbook. “Here’s the significance,” they say. “Imagine the billion dollar market at stake here if Google can make good on this vision. Netbooks are basically small-scale PCs. For Silicon Valley’s myriad of software companies, it means a well-backed, open operating system that is open and ripe for exploitation for building upon. Now think of Chrome, Google’s Web browser, and the richness it allows developers to build into the browser’s relationship with the desktop — all of this could usher in a new wave of more sophisticated web applications, cheaper and more dynamic to use.”
* According to Dow Jones VentureSource, and to no one’s great surprise, 2008 was the worst year for venture liquidity since the post-boom malaise of 2003. Still, within the industry, there are small pockets of optimism.
* Nielsen’s music industry numbers for 2008 again show an industry in transition. Overall unit sales in the U.S. (physical albums, digital albums and tracks, and music videos) were up 10.5 percent over 2007, but it was digital albums (up 32 percent) and tracks (up 27 percent) pushing the pace, while sales of physical CDs continued to slip.
* No matter how frustrated you might be, do not yell at your hard drive; you’ll just slow it down.
Some will say it’s just part of a natural cycle, nothing to worry about, but looking at the long, softly sloping line that shows an ongoing cooling trend, Microsoft may be dealing with a climate change. Traffic monitoring service Net Applications keeps track of browser and operating system stats from millions of visits to its clients’ sites, and the preliminary numbers from December show Microsoft continuing to slip on both fronts.
Last month, Microsoft’s Internet Explorer was used by 68.15 percent of the Web surfers monitored. In January 2008, that figure was 75.47 percent; in January 2007, it was 79.98 percent. If you’re in Redmond, that’s got to give you a litte shiver. The agents of this erosion? Mozilla’s Firefox browser, which started 2007 with a 13.70 percent share and finished 2008 with 21.34 percent, and Apple’s Safari, which climbed from 4.72 percent to 7.93 percent in the same span. Even Google’s new Chrome browser, still a blip in the market after being introduced just this fall, did what IE could not and won some new fans.
The Net Applications stats on operating systems were no more encouraging for Microsoft. In January 2007, 93.33 percent of the Web travelers monitored were running Windows; last month, that figure was down to 88.68. Across the same period, the Mac share rose from 6.22 percent to 9.63. And while the use of the iPhone for Web browsing is still comparatively tiny, the growth rate gives Apple even more reason to smile. In just the last six months, its share rose from 0.19 percent to 0.44 percent.
In releasing the latest numbers, Net Applications observed that residential use is greater than usual versus office use during the holiday months and that higher unemployment likely meant more users than usual connecting from home, both of which work in favor of Firefox and Mac and against IE and Windows. But smoothed out for such variables, the trend lines still suggest Microsoft better be preparing for a different environment.
“Apple doesn’t always get it right. Remember the launch of MobileMe in June 2008? It was that rare reminder that Apple could, in fact, royally screw up. When Apple released it, it simply wasn’t ready. Early users, myself included, suffered from committing to it before it was ready, and the Mac faithful had a field day complaining about it (legitimately) and using it to declare everything from the upcoming death of Apple to the impending nova of the sun and loss of all life in the solar system. Not that it wouldn’t have felt like that internally. To people who wondered how what the atmosphere would be like inside 1 Infinite Loop, I said: ‘Just imagine Steve Jobs wandering the hall with a flame thrower in hand, asking random people ‘do you work on MobileMe?’”
– Former 17-year Apple employee Chuq von Rospach explains that the smoke over at company headquarters last spring wasn’t from a cookout.
Endangered species ring tones, and the Dylan Thomas random poem generator. Also, if your brain is up for some stretching, set aside a little time for the responses of a bunch of bright minds to this year’s Edge Question: “What game-changing scientific ideas and developments do you expect to live to see?”
You know that comforting little padlock icon at the bottom of the browser that lets you know you’re on a secure, encrypted connection to a bank, merchant or whatever? It’s been picked. An international team of security researchers announced today that, with the help of 200 PlayStation 3 consoles strapped together into a poor man’s supercomputer, they had exploited a known weakness in a cryptographic algorithm called MD5 and created a rogue Certification Authority able to forge the certificates used to authenticate Secure Sockets Layer connections (the padlock thingie). In theory, similarly skilled evildoers could steer users to phishing sites that not only looked legit but also appeared to be properly secured. In practice, the evildoers still have some tech work to do to catch up with the white-hat guys, and the exposure of the vulnerability should be enough to encourage the remaining real Certification Authorities using the MD5 function to switch to something a little sturdier. So no need to panic, but also no time to relax. Said cryptography expert Bruce Schneier, “This is good work, great cryptography. I love the research, but this doesn’t matter a whit. There are half a dozen ways to forge certificates and nobody checks them anyway.”
These days if you’re working at all, it’s unseemly to complain too much, but that didn’t stop workers at companies like RadioShack, Compuware, EDS, Real, eBay and AT&T from badmouthing their employers down to the tail end of Glassdoor.com’s first Employees’ Choice Awards listing. The site, which launched early this year, offers a water cooler around which the rank and file can anonymously dish praise and peeves. Over the year, it collected almost 75,000 surveys from employees of more than 11,000 companies and now has crunched the results into a year-end award list. General Mills and Bain & Co. lead the rankings of best places to work, but the first of the Silicon Valley contingent, Netflix and Adobe, hold third and fourth places. Other tech names of interest in top 20: Google, SAP, NetApp, Intuit, FactSet, Genentech, CareerBuilder, Apple and Juniper Networks.
If you hold Apple stock, you might want to watch where you set your stop-loss target, given the sudden cliff dives it takes at each of the now chronic recurrences of the “Steve is sick” rumor. Today’s temporary drop of almost 4 percent was set off by Gizmodo, which quoted a source, previously reliable on matters involving unreleased Apple products, saying that official explanations aside, the real reason for the retreat from Macworld (see “Smackworld — Apple and Jobs won’t be back“) is that “Steve’s health is rapidly declining. Apple is choosing to remove the hype factor strategically vs. letting the hype destroy Apple when the inevitable news comes later this spring.”
Apple, as usual, had no interest in responding officially to loose talk, but the insiders who told CNBC’s Jim Goldman two weeks ago that the decision had nothing to do with Jobs’ health reiterated today that nothing had changed since. It’s troubling to watch stockholders get yanked around when somebody pulls the fire alarm, but maybe what we need are even more frequent revivals of the rumor. Once every few days, and pretty soon you figure investors’ knees would get tired of jerking.
“I think (our descendants) will curse us less if we choose to keep the clock reading near 12:00 when the sun is highest in the sky.”
– Steve Allen, an analyst at the UC’s Lick Observatory, warns of an eventual time warp if atomic clocks become the official chronology standard, replacing the occasional addition of a “leap second” (as will happen Wednesday night) to Greenwich Mean Time to account for the minute slowing of the Earth’s rotation.
For several years, Cisco Systems, the leading provider of the routers and switches that handle Internet traffic on the way to your front door, has been looking for ways to get into the house. Looking at the increasing sophistication of home networks, Cisco sees a sweet spot for its expertise if it can just get consumers to start associating its name with Apple, Sonus Sonos, TiVo and others aiming to help people access video, audio and online content on an assortment of devices scattered around the house. A daunting task, but in the new year, the push will begin in earnest. At the Consumer Electronics Show in January, the New York Times reports, Cisco will introduce a line of entertainment products for the home, including its own wireless digital stereo.
The appeal of the residential market is obvious. With sales directly to consumers representing only 2 percent of Cisco’s $40 billion total in the most recent fiscal year, the growth possibilities are tantalizing. And the company can leverage not only its own plumbing technology, but its acquisitions of cable-equipment supplier Scientific Atlanta and home networking company Linksys as well. Plus, whatever Cisco starts with now will serve as a beachhead on the way to the big prize — bringing easy, high-definition video conferencing to the family room. But for now, Cisco will have its hands fighting both the battle of the brands and consumer wariness about adding yet another box or two to the home network. Speaking of home users, Sonus Sonos CEO John MacFarlane sniped, “I don’t think that when they hear the name Cisco, they think of great products in consumer electronics.”
In related news, HP has introduced an updated version of its MediaSmart Server, a home network appliance for data distribution and backup, and something similar is rumored to be coming from Apple.
Employees of the National Archives are filling sandbags and stocking up on supplies in anticipation of a tidal wave of electronic data scheduled to hit on Jan. 20. The New York Times reports the agency has gone into emergency mode, worried that its new $144 million computer system will not be up to digesting the massive accretion of digital records documenting the Bush White House and required by law to be preserved. Archivists estimate the data dump, which runs from top-secret e-mail on war plans to first-pet videos from Barney Cam 2008, may total 100 terabytes — about 50 times the volume of electronic records left behind by the Clinton White House in 2001. E-mail alone is expected to make up almost a fourth of that (and that’s not including the millions from 2003 to 2005 that seem to be missing). “It’s a monstrous volume of material, and some people wonder if the system can absorb it,” said Lee White, executive director of the National Coalition for History.
Paradoxically, there are also worries that the load of data handed over by the White House may not be as big as it should be. Some open-government advocates and historians, for who knows what reason, are concerned that Vice President Dick Cheney and others might not be entirely forthcoming in their submissions, misgivings that were not eased by Cheney’s recent assertion of absolute discretion over determining which of his records are official and which are private.
The transfer of the data is only the beginning of the challenge for the National Archives. Much of the material was produced with proprietary commercial software, some in “formats not previously dealt with,” and it needs to be preserved in a form that will remain accessible in the future. And nobody’s even guessing at when all this information will become actually useful. “The electronic records archives system may be able to take in a tremendous amount of e-mail and other records,” said Paul Brachfeld, the archives’ inspector general. “But just because you ingest the data does not mean that people can locate, identify, recover and use the records they need.”
