We all now know a lot more about  antennae than we used to.  Or at least we think we do.  The one thing we can infer for sure is that every cellphone manufacturer has invested lots of time and money in antenna design, and in the sophisticated testing required to support the design process.  We know that there are no hard and fast standards in this realm, so that the testing processes are driven by algorithms tuned by each company to produce the results they think their customers want.  And, folks, it should surprise nobody that these tests favor their own designs: The tests contributed to those designs.  In other words, the designs were optimized to the tests.  So Apple’s tests show somewhat different results than RIM’s, which are different from Nokia’s . . .  Get it?  It’s kind of like the old whisper game of telephone — but played with “real, hard data.”

The real stunner is that Steve Jobs actually made an understatement in a press conference!!!  He said that all smartphones have weak spots. He might have gone just a bit further: all cellular telephones have weak spots.  Calls do get dropped, by Verizon as well as AT&T, on every brand of cellphone out there.

In the last analysis, though, the company stood by its users, beginning with a no-risk, total refund policy.  Then comes the free case: if a case makes the it all better, then give everyone a case.  The user platitudes were all fine and good, but he provided the payoff where the rubber (bumper case) meets the road.  Oh, and by the way, where does this scenario leave those quick-draw litigators, with their lawsuits alleging, among other things, “breach of warranty” (one must wonder how they got to that particular allegation in such a short time — remember, the launch was less than a month ago).  Attorneys salivating over hefty class-action fee awards just went from 4 bars to none, I rather imagine.

One last point: Steve Jobs is the High Priest of iLove, Number One Fanboy, and an easy target.  But he is one more thing: Consistent.  Just like his introductory presentations, his mea culpa was tinged with pugnacity and self-congratulation.  Maybe that comes of selling a million phones a week.

And speaking of final points: The estimable Senator Schumer (D-NY) is obivously a man of the marketplace. He wrote a letter to Steve, and he wants answers! I’d like an anwer, too, Senator: Is that an iPhone 4 in your pocket, or are you just glad to see me?

Let’s start with a round of applause for the discipline and ingenuity of the Apple marketing machinery.  It may not take much to start a buzz among one of the world’s most loyal and committed user bases, but the depth of the Apple playbook is truly marvelous.  They even go so far as to sacrifice a few red herrings to  the nets of trash trawlers and divers of dumpsters.  You have to love that they went so far as to register islate.com: irrefutable evidence, you betcha!

As it turns out, iSlate may have been a better choice, hindsight notwithstanding.  For one thing, we’d have been spared the lame feminine hygiene  jokes. For another, it appears that Apple might actually own the trademark on iSlate, which would have been something of an innovation for them these days.  You’ll recall, of course, that Cisco Systems had a product called the iPhone; Apple walked away from negotiations to announce the product, then came back to close the deal.  A bit cavalier, but they got the job done. With iPad, it’s deja vu all over again: the US Patent and Trademark Office’s TESS database records a dozen live trademarks relating to iPad, and Fujitsu has had an application pending since 2002 for the name, which they have used for a sweet little handheld wireless device for inventory applications. Sloppy trademark work?  An honest mistake?  As W once said, “Fool me once . . .”  Or is this just the way they roll at Apple?   “This is Steve’s world, and you all are just lucky to be living in it.  As for us, we’ve got stock options!”

What  gives the lipstick on this particular pig such a brilliant gloss is that Jobs and Company clearly understand the principles of intellectual property, and the impact it may have on P&L.  They have been aggressive in the past defending their many contributions to the art and science of computing.  Why, in just the past few weeks they’ve kicked off another episode of that long-lived reality show, “Claim and Counter-Claim: IP Smackdown,” trading briefs and aspersions with Nokia, who took back a point or two of global market share from the iPhone in the last quarter of 2009.

There is perhaps a faint tinge of situational ethics here.  But we know that consistency is, in addition to its long standing as the hobgoblin of small minds, predictable.  And predictable is good when it comes to earnings, less so when it comes to competitive markets.  And when it comes to competitive markets, Apple has been consistent in its ability to be unpredictable — on its own terms.  Apple’s strategic use of its intellectual property is a glorious lesson in leverage — the kind that adds real economic value to the marketplace instead of balance sheet risk.  This is what makes Apple a rocker of much larger boats.

By way of example, we can look at Apple’s approach to another form of intellectual property: content.  At a critical moment in the market, when filesharing networks suddenly ripped the gutsout of overpriced CD sales, Apple seized the opportunity to create a distribution channel, with a nifty little receptacle on the end called iPod.  With iTunes, Apple at least impeded the recording industry’s death by a million cuts (downloaded) by forcing them to unbundle their wares.  They gave the labels a palatable alternative to irrelevancy, and with it a seat at the table. Since then, they have ridden the trade winds to great profits, by paying attention to the whole value chain and doing what they can to sustain it.  Users need lower cost options? All in good time.  DRM an issue?  With loyalties and buying patterns established, iTunes learned to do without.  Pricing model too restrictive?  Sure, we can tier things a bit.  The competitive dimension became clear, however, when Palm reverse-engineered a synch-link to iTunes for digital media: their efforts triggered a barrage of iTunes updates that made that plus on the consumer evaluation checklist into a distinct minus.

Comes the iPad and with it iBooks, and the competitive scenario is different: once again content owners — book publishers here — are experiencing difficult times.  This time, however, the user experience is that much more important, because it is so individual: music and movies unfold in the time domain, while books do it in your brain.  What’s more, the iPad/iBooks team was not the first on the field in this instance: Amazon’s Kindle and the Barnes and Noble Nook were both out there with a prix fixe model likely inspired by iTunes, along with other software platforms .  But books are different: Books have long defied standardized pricing, and tiered pricing had already induced tics and tears  in publishing houses everywhere.  So Apple gave the publishers what they needed to conserve the value chain: a straight commission channel.  This might appear to put Apple at a competitive disadvantage in terms of the pricing of their books — well, it does, in fact.  But it also makes it the more likely that publishers will push the ebook format that generates more revenue for them and their authors, e.g. iBooks.  And that disadvantage evaporates once a consumer has committed to the iPad — maybe because it represents a gaming platform and a media player, maybe because they get a richer book experience (all maybes, mind you, until the merits and demerits so broadly discussed are proven or dismissed).  At the very least, we may observe that Apple need not be first to market to call the tune.

That is a measure of market power that falls well outside the realm of  antitrust regulation.  You may take its expression in the marketplace as arrogance, brilliance, or both.   What  impresses most is that it is the result of maintaining a broad perspective on the entire value chain, and then investing in bringing in their fair share of the profits therein.  Or maybe every now and then just a little more than their fair share.

As we are now in the run-up to the presumed introduction of the Apple tablet, whatever it may be called (it isn’t likely to be Newton), the proliferation of more-or-less mobile devices prompts some reconsideration of openness, operating systems and their importance in the technology marketplace.  As in past conflagrations — the various OS and browser wars, for example — there seems to be a lot at stake, and claims and counter-claims, suits and countersuits are flying around like ping pong balls in that classic Mr. Wizard demonstration of fission. We might all want a bit of clarity, as the Cloud becomes more and more a part of packet-driven work- and lifestyles.

The proliferation of form factors, the availability of advanced functionality in packages with different ergonomic strengths and weaknesses, is the norm, of course, and portability — now mobility — has long been a driver.  The Apple iDunno is the latest example of a “mediating” trend in form factors: greater portability  than a notebook or laptop can offer, at the expense of screen and keyboard size and maybe media flexibility, that’s what netbooks and smartbooks are made of.  Now comes this tablet, yet another tweener, reinforcing the notion that the ultimate digital Swiss Army knife isn’t necessarily what we want: simple and intuitive interaction is incompatible with too many functions.  I offer as an example of ergonomic #FAIL the several examples of Universal Remotes that lie in my closet like bad burritos, causing a little heartburn whenever you bring them up.  Sometimes, all you need is a camera spork.

We will continue, in other words, to use an array of devices that are most apt to our individual needs and applications — which sounds rather obvious, but is a rather remarkable step forward from not too many years ago: TCP/IP has been the great equalizer, but WiFi and USB have removed their share of the trauma of interconnect as well.  The days of feudal IT, when vendors held users hostage via prix fixe IT are long gone.

“Proprietary” got a bad name because companies like IBM maintained strict control over who had access to the computing resources they sold.  Talk about “You’re either on the bus or off the bus!”  Customer relationships were necessarily long-term, which created advantages for both parties in the early days of “do not bend fold spindle or mutilate” computing.  Antitrust actions notwithstanding, semiconductors greased the way for technology’s escape from the data center, and the genie was out of the toothpaste tube.  The focus of IT broadened to distributing processing power and information access, and the ensuing flood of innovations has transformed the world economy.  And with the economy, of course, culture: Voila, Facebook and texting-as-U-drive!

As a consequence, the stigma of proprietary technology is steadily fading, because the connective tissue is so much more forgiving, and the proprietary nature of the data mass is declining.  There’s still plenty of proprietary data, of course, particularly in the enterprise, and it permeates the technosphere from data center to delivery van.  This is why IBM is still a US$170 billion company (the bulk of it service revenue), why Blackberry remains so strong in corporate environemnts, and why Nokia’s global share of the smartphone market remains high, skeptics notwithstanding.  But a larger and larger chunk of devices are being sold into consumer hands.  Outside of the enterprise, operating systems, per se, are almost as invisible as firmware: the critical and open standards stand outside the device, insulating the market from the chill of the proprietary — and giving the user the advantage of unfettered innovation inside the box.

Moreover, at every level of the game, we have a relatively smaller investment invested in each box we own: smaller, faster, cheaper.  That tends to go for software, as well: consider the pricing of apps for the iPhone and its competitors.  The data files that are the product of your work are more or less portable, or easily and inexpensively rendered so.  Your carrier will most likely even port your address book to your new phone, if its one of those dumbphones (slowphones? specialphones?) that you don’t already know how to synch with your computer.  Which means that its easy to switch, which  gives design and fashion more weight in purchases, and incents manufacturers to take into account the entire ownership experience.  That means prettier packages, better ergonomics, and better (usually) support.  All because we’ve got open where we need, and proprietary where it works best.

This is not to say that proprietary technology doesn’t generate significant business leverage: Consider the hegemony of iTunes, and the merry chase Apple has led Palm engineers (and users) in need of a Pre fix.  And then there’s Google . . .

Where we most need openness is outside the box, in the networking standards and APIs that so broadly enable productivity, creativity  and convenience. There was lots of bloodshed along the way, as with any growth industry, but we have gotten this far at least: to the point that if you are looking covetously at thy neighbor’s cellphone, it probably has nothing to do with its OS.

* Os Mutantes imported the urgency and influences (musical, chemical, and otherwise) of psychedelia, took them to the beaches of Rio and Salvador and  transmuted them into into something very Brazilian indeed.  They called it Tropicalia,  a cultural movement that insisted on being heard over the quiet brilliance of Tom Jobim and bossa nova and produced some of the ’60s most compelling music — along with such MPB luminaries as Caetano Veloso, Gal Costa, Tom Zé, and Gilberto Gil (who now serves as Brazil’s Minister of Culture, which is not quite analogous to having, say, Wavy Gravy as U.S. Secretary of Agriculture).

The buzz around 3D TV at CES 2010 brings all this to mind, as the big players launch their latest effort to confuse the screen count: If screen 1 is the TV, screen 2 the computer and screen 3 the smartphone, is 3D TV screen 4, or screen 1.3 or . . .  Avatar notwithstanding, do these companies feel that 3D TV will advance the human condition, or do they simply have focus group data that support funky Urkel specs as the next hot fashion accessory?  One way or the other, the experience will have to measure up to the hype, and the social dimensions of the viewing experience will have to justify an initial sales premium for the set and hundreds of dollars for additional goggles if sales are to reach critical mass.  Can it be that the average numbers of TV sets per household climbs further from last year’s three and change (actually more like 4 among households with more than one set)?

Of course, there may be a fourth dimension that accompanies 3D TV: mass, as consumers seize on one more reason to order a pizza and never leave home, even to go to the movies.  The optimist would suggest said consumers might eat less popcorn at home, but the curmudgeon counters with, “Only because they’d have to get up off the couch to fetch it.”

The tech industries have long been fertile ground for cultivating such strong feelings, of course: what other set of SIC codes could glorify an employee as an “evangelist?”  From the earliest days of Usenet — and probably Darpanet before that — flames have taken advantage of the remoteness and abstraction of  the ‘Net: You don’t have to face the object of your invective.  It’s not even your handwriting, for goodness’ sake.  We have had UNIX wars, supporters of everything from Windows and Macs to open source software are described as “bigots,” and many other geekworld manifestations of the same hormonal impulses driving cage fights and NASCAR (and no, WWE is different: That’s entertainment! Albeit on steroids.  Kind of like baseball.  But I digress.)

The point seem to be, we’re just fans.  And like any other fans, we’re committed to our team to the exclusion of rational argument.  We have apparently passed the point where we can even agree to disagree without pointing out that said  disagreement makes the other guy an idiot.  Preferably with CAPS LOCK on.

Marketeers observe all this with a highly crocodilic tear dangling suspiciously from the corner of one eye.  Engagement is engagement, after all, and that kind of loyalty should not bear the burden of courtesy, consideration, or other human attributes once considered virtues.  Those wonderful ads anthropomorphizing the Mac and the PC have a wonderfully light touch, but Apple’s true believers take them as Gospel, building up the knowledge-working-class resentment of PC users, resulting in . . . WELL,YOU KNOW!

Of course, I could be wrong: Maybe it’s really all about errant fingers and the CAPS LOCK key.

The Madness of Crowds: The Soaps and

Prediction Markets

POSTED BY BILL BENNETT. FILED UNDER EMERGING ADVERTISING TECHNOLOGIES, ONLINE EXPERIENCE.»

Why are soap operas so popular? What need do they meet in the American psyche? And what does it matter, except to those who are invested in whether Tiffany or Paloma decides to carry the child to term?

The folks who are promoting the notion of prediction markets would have us believe quite a lot. These systems use “virtual currency” to aggregate the instincts of market participants (or, in other words, viewers) to better understand the broad public perception of everything from March Madness to mortgage rates – which might as well be soap opera plots, with their tenuous link to the rational. They speculate we could end up using Second Life to predict what will happen in our “first life,” and maybe even help Bono solve the problems of the Third World. If they’re right, we have some serious predictive power to tap into: Consider the 30+ million votes cast weekly on America Idol. The implications for marketers are perhaps not so obvious, however: what we understand in the aggregate oftendoesn’t apply to the individual. So when it comes to delivering messages that consumers want to hear, it is still a guess, no matter how big the database of information. Why should we be guessing? Why aren’t we asking?

And even if they’re right, questions remain. Because if the soaps and those who watch them in such statistically significant numbers are such a powerful predictive tool, why did it take so long for Susan Lucci to win her Emmy?

Click Here for Economic Stimulus

POSTED BY BILL BENNETT. FILED UNDER INTERNET ADVERTISING »

Two Fed Rate cuts in a week: The recession is on, and we can expect immediate cuts in ad/marketing budgets. Right?

Maybe not. Early this month TNS Media forecasted a 4.2% increase in US advertising spending in 2008 [for the record, it didn't happen -- the spend fell 2.6% -- still, less than one might have expected], with increases in internet advertising and new media making up for cuts in old media, radio and print ads. This shift from a CPM model to a PPC model makes costs contingent on results, not a flood of irrelevant, impressions.

So what does this mean? It means that the search for meaning in a media world still largely driven by advertising continues: same dance, different tempo. Advertisers will raise the bar on campaign performance and success rates, and consumers will be more deliberate with how they choose to spend their money and what they choose to spend it on. When the market won’t boogie, it’s time to tango.

Advertisers are always looking to “engage” the consumer and consumers hate getting bombarded with irrelevant ads. But what exactly can help resolve the tension between these two apparently conflicting desires? Dialogue. Conversation must become a key element in the exchange between advertisers and consumers. And at Rabio, we hold this notion close to our hearts. Instead of using invasive tracking methods and attempting to decipher abstract metrics, we know that advertising works best when the consumer is interested, and we’ll know when they’re interested because we have the audacity to ask.