What an irony if the “relatively simple and straightforward” treatment for Steve Jobs’ hormone imbalance revealed this week is for the lifelong vegetarian to eat meat.  I have no way of knowing that’s his treatment, of course – the idea just sprang into my head. 

But given the press and stock market reaction to details of Jobs’ health problems, I’d say he’ll make a cameo appearance at Macworld a few hours from now even if he has to send his good twin to do so.

I further predict that Apple will make a substantial product announcement or two.  This won’t be the minimalist Macworld that people had feared.  If Jobs won’t be doing the heavy lifting this time he’ll at least leave Phil Schiller with a product or two to announce.

And speaking of products to announce, readers have been wondering whatever happened to the disk drive I was working on with stainless foil media?  It’s still coming along nicely, thanks, but startups without money tend to take longer to succeed OR fail than startups with money.

The recording media is more or less perfected, which was harder to achieve than any of us expected, and we should see prototype drives within the next couple months.  They’ll be comparable in capacity to similar size conventional drives but less expensive to make, more shock-resistant, and require vastly less energy to run.

For an example of how much energy savings is possible with Metal Foil Drives, consider the duty cycle of a traditional glass platter drive inside a media player like an iPod.  The way such media players work is they read data from the hard drive into buffer memory then play from that buffer.  First the drive spins-up, which takes about five seconds.  Then the data is read from the drive, which takes about a tenth of a second.  Finally the drive is turned-off until the buffer memory is depleted and the cycle starts all over again.  Each cycle, then, involves powering the drive for 5.1 seconds.

The Metal Foil Drive (MFD), however, has a LOT less mass to spin up than the heavy glass platter it replaces.  Hard drives moved a few years ago from primarily aluminum to glass platters because glass can be polished smoother allowing lower flying height for the read-write heads and resulting higher arreal densities.  But glass platters are also more expensive than aluminum and heavier.  They are a LOT more expensive and heavier than metal foil.  As a result, an MFD of comparable capacity spins-up in a tenth of a second and reads the data in another tenth of a second.  Not only is 0.2 seconds a lot less time (and energy) than 5.1 seconds, but the lower mass of the MFD platter allows the use of a smaller, cheaper, and lower-power motor to do the work – yet another win.

But why even bother with hard drives with flash memory prices dropping so quickly? Because the more storage capacity we have available the more stuff we’ll want to store.  I see MFD’s carrying HD movies around for years to come.  Maybe your Nano doesn’t need one, but video will keep us buying drive-based media players, too.

There will always be people who don’t want to carry all their movies around with them, of course, and to keep those folks happy Netflix seems determined to stream its B movies to as many consumer electronic devices as possible.  This week we hear about Netflix streaming direct to certain LG HDTVs, which is cool.  But a financial analysis of the product as it will be initially offered is cool only for LG – certainly not for LG customers.

The Netflix-capable LG TV’s, we’re told, will cost about $300 more than LG sets that can’t do such streaming.  The difference between the two TV families is that the streamers have a System-On-Chip to run a minimal operating system and handle H.264 decoding, an Ethernet adapter chip to connect to your home network, and some buffer memory.  That’s three extra chips costing at most $20 extra plus a little software, giving LG a gross profit margin of around 1500 percent for this particular improvement!

If consumers will actually pay $300 more for a TV with Netflix streaming built-in then I predict that EVERY HDTV manufacturer will install Netflix on every set by the end of this year.  They won’t even care if people actually watch Netflix content as long as they just buy the more expensive sets.

The jury is still out, I’d say, on whether people will actually pay this price difference when, for $99, they can simply plug in a cheap media streaming box like the one from Roku and achieve the same result.  Still it’s worth a shot, the folks at LG must be thinking.  

It’s what Steve Jobs would do.

Just in case you ever sue me, you should know that I have every e-mail I have ever sent or received since 1992. That’s crazy from a legal standpoint, I know, but I can’t help myself. I’m obsessive-compulsive that way. But having a clear view of 16+ years of mail amounting to more than four gigabytes of mainly ascii text gives me a sobering sense of how poorly e-mail does the job lately compared to its glory days of, say, 1999.

More than ninety percent of my mail today by volume is spam. Back in 1999 spam was about 15 percent of my mail. Of course I am in large part to blame for this because I sign up for services and tell them, yes, I would like to receive news and offers by e-mail. I do this because I think it is my job to keep a finger on the pulse of the Internet and if you don’t get spam there isn’t much of a pulse. But it sure gets in the way of staying in touch with friends. And as you can imagine, I have a lot of friends.

As e-mail fails, then, we jump to instant messaging and social networks to take up the slack. Instant-messaging, which remains delightfully spam-free, is also like allowing casual acquaintances easy access to your IV drip: they can drop the worst stuff on you with no notice and no way of avoiding it. At least with e-mail you can decide when to check it or not, but IM is relentlessly in your face.

Well then there are the social networks, right? I tried to avoid these for years. I mean YEARS. People would want me to sign onto one or another so we could “keep our address books synchronized.” Why would I want that? But eventually some of my best friends began to take personally my resistance to being part of their automated lives, so I eventually signed-on to Plaxo, LinkedIn, and FaceBook. I might have a MySpace page, too, I’m not sure, but I certainly don’t visit there.

I barely visit Plaxo, but I am pretty consistently on Facebook and at least once a week get to LinkedIn. But that’s it. As far as I am concerned, if you want me to join Bebo or WhereAreYouNow or some other social networking startup, well forget it. Plaxo, LinkedIn, and Facebook do a perfectly adequate job of defining my culture, thanks. I can’t imagine needing another, especially ones that are so gimmicky. Why the hell, for example, would I want to rate my friends or have them rate me? That’s simply stupid.

There’s my money quote for FriendChat, PeopleRadar, RateMyEverything and a hundred other similar sites: “Rate my friends? That’s stupid” – Bob Cringely.

Keeping up with Plaxo, LinkedIn, and Facebook is bad enough, but I now sense that really ugly things are happening to those platforms making them less and less useful to me. It’s the rise of the social networking application.

You know what I am talking about, those applications that are built by third-party developers to take advantage of the social network ecosystem the companies are so proud to create but we all come to hate over time.

My friend Ira is a Facebook whore. He signs-up for every cause, group, or application sent to him by, well, anybody. Then what’s even worse is he expects me to sign-up too so he can send me whatever crap is the specialty of that subgroup.

I love you, Ira, but I just can’t do as you ask.

This is nothing more than social networking spam, folks, and it is sucking the value out of social networks just like mail spam sucked the value out of e-mail. And to those venture capitalists who see all these applications and rejoice because of the added network volume, which they think translates into higher valuations, understand that this very volume will eventually KILL every one of these companies, making your investment in them worthless.

If you think Facebook is immune to this effect because of its success, you are wrong. It’s very success makes Facebook even more likely to fail as a result. It won’t happen right away but it will happen when we’ll all jump overnight to some other platform whose only advantage over Facebook is that it lacks such sludge.

So if you are in touch with me for any reason please understand that while I will become your friend or contact on these services I will NEVER join a group, NEVER join a cause, NEVER accept an invitation (even if I actually end-up attending the event), NEVER become a fan, and NEVER, NEVER, NEVER install third-party applications.

And you shouldn’t, either.

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It’s the day after Christmas so of course sales have started and whatever you thought you bought for a good price is suddenly available for a lot less, especially electronics. But this isn’t your normal after-Christmas sale, it’s after-Christmas during one of the worst economic recessions in decades, so prices are lower still. Add to this, at least in the U.S. market, the pending shutdown of analog broadcast TV in February and there ought to be a feeding frenzy of digital set buying. And there will be I’m sure. But it could be a lot better except for a missing link, one small bit of technology the lack of which is costing TV manufacturers billions in lost sales.

The consumer electronics industry is built on the idea of every few years getting us to throw away everything we own and replace it with something entirely new. In home audio the transition was 78/33/8-track/cassette/CD. In home video it was Beta/VHS/DVD/Blu-Ray. Each time we not only had to buy new equipment, we generally had to purchase again our audio and video libraries. And we did, much to the joy of the music and movie industries, though the jury is still out on Blu-Ray (more on that in a couple days).

Unlike automobiles, where there is a robust second-hand market, the consumer electronics food chain is simple and clean: whatever we invested in before is suddenly worthless. But for these technology transitions to be truly successful we ALL have to switch, which doesn’t always happen. Many people never owned an 8-track player, for example, or even a cassette deck, jumping straight from vinyl to CD. But that jump to CD’s, since it was an all-in 100 percent market transformation, was enough to power the audio business to record profits for more than a decade even without a lot of new hit songs. That’s how the Beatles still make $100+ million per year even though the group disbanded in 1970.

The goal, then, is a vinyl-to-CD type transformation. It happened exactly like that for VHS-to-DVD, much to the joy of Warren Lieberfarb. And there’s hope right now that a similar market upheaval will happen as digital TV sets replace analog.

Already there is good news for manufacturers on this front. Something unanticipated happened that has driven LCD and plasma TV sales higher than expected. The fact that these new sets are skinny and can be hung on a wall has changed the way we buy televisions, not just in the U.S. but globally.

There has for almost a century now been a space carved out in most American living rooms for a piece of consumer electronic furniture. Originally it was a console radio complete with gleaming wooden cabinetry. Later the radio was replaced with a TV of comparable size or larger. We positioned our furniture to help us see or hear better, changing the social dynamics of our living spaces. Rooms came to be sized with televisions in mind. And the biggest analog TV screen in my era were 21-23 inches measured diagonally, a size dictated both by the economics of glass blowing and by the maximum cabinet depth the manufacturers thought they could get away with.

Bigger sets were rare because they were expensive but also because they required bigger rooms. Projection sets went into American homes as a result, rather than into homes in Europe or Asia with their generally smaller rooms. And because the size of the market was limited in this way, so too were limited the economies of scale that could be enjoyed by the projection TV makers. Big sets were not only more expensive — they were a LOT more expensive.

Then along came plasma and then LCD displays, which could be hung on a wall taking no floor space at all. Wonder of wonder, when these TVs started selling in Japan most of the buyers were replacing smaller sets with ones that were substantially larger. You could put a honking-big TV in a tiny room if you liked – especially if it was a tight-grained 1080p set. Japanese customers started buying bigger sets, economies of scale began to kick-in so those sets got cheaper so people bought sets that were bigger still. The size effect happened everywhere, too. People the world over are buying bigger sets than ever because they can hang them on a wall.

While this is generally good news all around there is still a disconnect in the marketplace, which is to say a lost opportunity to take even more of our money. When projection sets cost $10,000 most of them were sold to people building home theaters. Now only about 7.5 percent of flat panel televisions are sold for home theaters, which means the market for Dolby 5.1 and 7.1 Surround Sound equipment is severely constrained with prices higher than they ought to be.

We mount a big 120 Hz. 1080p TV up on the wall having bought it for $1100 after Christmas, maybe connect it to a Blu-Ray player or an HD cable or satellite box, then sit down to watch The Dark Knight, listening to the audio through tinny little speakers. What’s wrong with this picture? Everything.

It’s not the money that keeps people from completing their home theaters — it’s the complexity. Ideally we should space-out the front speakers, add rear speakers and then a sub woofer, but this takes extra equipment and, especially, extra wiring. Sure the Geek Squad will install it all for you but that costs extra and limits market penetration. Besides, what if we move and have to rip it all out?

What’s missing here is a de facto wireless audio standard for televisions. Look on the back of any of these new TVs and you’ll find a forest of connections but none of the audio is wireless. There are RCA jacks, minijacks and optical, but no wireless. How much could it cost to add one more audio option? Not much – generally less than $10 in manufacturers’ cost.

Adding less than $10 to the cost of a TV, then, would make it dirt simple to have a home theater. Just buy compatible speaker systems, plug them in and sync them with the TV. The TV will figure out how many speakers and what type are connected and configure the sound output accordingly. There’s no need for wiring and no need for the Geek Squad, either, unless you want them to put the TV on your wall.

Edit — Some readers have pointed out that this could be accomplished just as easily through power line networking.  Maybe so.  If the price is the same I say go for it.  I don’t care.  Though a look at the HomePlug market suggests that the price WON’T be the same — it will be higher.  I don’t know why.  Now back to your regular programming…

If this simple change were to take place the cost of 5.1 and 7.1 audio equipment would drop and consumers could more easily enjoy the true potential of their new TVs. The result for the consumer electronics industry would be even more profound, though – a 50 percent increase in net profit per TV sale. That’s HUGE.

So why doesn’t it happen? That’s because these bozos, as they have shown us time after time, can’t bring themselves to agree on a new technical standard without first enjoying a bloodbath in the market.

There are chipsets available right now to achieve everything I have described. The one I am most familiar with comes from Eleven Engineering in Canada, maker of high-end wireless audio technology for customers like Bose. But there are alternatives to Eleven. All the consumer electronics industry has to do is choose one – ANY ONE.

Boom. We all would suddenly have an incentive to buy more and better stuff. The positive effect this would have on Blu-Ray, for example, should be obvious. It would help video gaming. Heck, it would help the entire economy as we all pump an extra $200 into home electronics – in this case electronics we can take with us next time we move.

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Mary Alyce, Bob, Channing, Cole & Fallon Cringely

Some people have hobbies, I have blogs.  This is the mortgage blog I started quietly a few weeks before leaving PBS.  It reflects my discoveries and thinking about an area that directly affects about 51 million U.S. families.  What has YOUR mortgage done for you lately?  Not much, eh?

Take a look at the site, which in theory you can reach by clicking on jumbo there.  Otherwise it is at http://blog.cringelysmortgage.com/blog/.

Bentonville stands in the northwest corner of Arkansas only a few miles from Missouri, Kansas and Oklahoma. It is a little city in the Ozarks with a fine town square where once there stood a Ben Franklin variety store owned by Sam Walton. Today, that store on the square is a museum, and Bentonville is the headquarters of Wal-Mart, not just the biggest retailer in the world, the biggest COMPANY in the world. There is nothing fancy about Wal-Mart, and that certainly applies to its corporate headquarters, a nondescript brick building where every day suppliers from around the world come to peddle their wares. The place where would-be suppliers meet Wal-Mart buyers looks like an old Quonset hut from World War II. The hut is filled with folding chairs and metal tables where the meetings are held. This, with no exceptions, is how business is done, and that Quonset hut explains exactly why Wal-Mart is bigger than all its competitors and strikes fear in smaller retailers the world over.

Wal-Mart is a pure example of keeping transaction costs low as exemplified by the modest global HQ and the Quonset hut meetings with suppliers. But it’s what goes on during those supplier meetings that is even more important, because Wal-Mart buyers are notorious for demanding product design and packaging changes from suppliers — changes that are usually more intended to lower costs than to increase customer appeal. As long as Wal-Mart buys more from a supplier than any of its competitors does, Wal-Mart will get the best prices, which can be converted into the most sales, the most profits or the highest market share, depending on what Wal-Mart values at that time. So if you can keep transaction costs down, bigger is better, way better. Since the playing field is never truly level for this reason, Wal-Mart will always have an advantage, and small town retailers will always be threatened. There is nothing illegal about this, either. There is nothing illegal about being big.

Which brings us to this week’s surprise announcement that Steve Jobs would not be giving the Apple keynote at MacWorld next month.  And in fact Apple won’t be participating in future MacWorld shows AT ALL.  Isn’t this a trend?  As I recall Apple pulled out of European MacWorld events years ago.  They see the future of product introductions generally done online and at Apple HQ and they don’t care at all about third-party vendors.

But given that Apple is contractually obligated to participate in one final January show, why isn’t Steve Jobs doing the honors?  It isn’t because of his health.  I blame Wal-Mart.

A reader from Arizona just reported to be seeing an iPhone sales display being unpacked in the back room at his local Wal-Mart.   Wal-Mart is going to start selling iPhones after Christmas.

Now this is just a guess, but if Wal-Mart is about to start selling iPhones, then given the nature of their vendor relations typified by that quonset hut, they’ll demand Steve Jobs come to them – perhaps even to Bentonville – for whatever iPhone launch event Wal-Mart plans.

Steve paces himself.  There is no way he’ll do two product intros in one month.  And I doubt Wal-Mart would allow him to in any case.

We’ll just have to see what happens.

Microsoft

Microsoft may or may not make a deal for Yahoo’s search service.  What neither firm realizes yet is there is a better way to do searches with value advertising.  It will be easier than what Google is doing and can produce more tangible results.  Right now both firms are in the mind set of “competing with Google” instead of being creative and innovative.  When they start thinking independently and start tuning into what the customer needs, Google will have some competition.

Apple

If Apple would port its Mac software (iWork, iLife, Final Cut, etc) to Windows it could quickly OWN the software market.  Microsoft’s competitive advantage is not Windows — it is Office.  Apple could take them out if it chose to.  They won’t in 2009.  But if the economic crisis really hurts Apple’s 2009 business, taking business away from Microsoft in 2010 could become a real consideration.

Google

Android, Google’s phone software will suddenly become much better and will become the preferred software platform for the cell phone industry.  Competitors of the iPhone will jump on the Android bandwagon and rush many new products to market in 2009.  This will force AT&T and Apple into some uncomfortable decisions.  Should AT&T be open to iPhone competitive products?  Should Apple open up to other telco providers?

IBM

Thanks to the economic crisis, the IT industry will take a beating.  To survive many IT providers will cut costs and services to the point of driving away customers.  IBM is more diversified and has deeper financial reserves.  In time customers will begin to return to IBM, but with some new expectations.  They’ll be willing to pay more for help desk workers who speak understandably.  They will want to see more people on site, more face-to-face support.  This won’t stop the rush to offshore IT jobs.  It will however signal a change in the direction of the pendulum and will force IT providers to rethink their business model.

So far IBM and most IT providers have cut support costs by shipping work offshore to lower paid workers.  Someone in the industry will finally realize there is another way to cut — by using quality improvement techniques to reduce the occurrence of problems.  This will become a game changer in the industry.  Sadly IBM is too big, too bureaucratic, too set in its ways to catch this wave.  What will happen instead is firms will start in-sourcing their IT again.  Watch for this in the next 5 years.

Yahoo

Someone will buy a controlling interest in Yahoo.  There will finally be a big house cleaning of Yahoo’s board and senior management.  Then either of two things will happen.  The new leadership will unlock Yahoo’s value and creativity — and Yahoo will soar again.  Or, Yahoo will flounder and continue to become less relevant over time.

DTV

There will be problems with conversion to DTV.  It will take months, perhaps a couple years for the problems to become apparent.  The original NTSC system was basically an “open” system.  All stations, satellite, and cable providers used it and it worked on every television made.  With DTV content providers will attempt to introduce proprietary technology in an attempt to “lock in customers.”  Only open-air transmissions will use DTV.  Cable and satellite will use different and proprietary digital communications.  Cable and satellite will start increasing their prices to the point where consumers start spending less.  To make matters worse, the Internet will become a big provider of DTV content and it will also use “different” technology.  At the same time ISP’s will implement bandwidth restrictions to thwart DTV content that is not their own.  It won’t take long for the S consumer to get very upset with things.

Internet Centric devices

Theft of smart phones and Internet centric devices will become a big problem.  Thieves will figure out how to steal identity information, raid bank accounts and investments, and so on.  This will become a big problem.

Intel/AMD

Intel will launch an 8-core processor for the PC market.  It’s price point will be too high for the consumer market and the product will languish — forcing Intel to lower the prices of its product line.  Worse, Microsoft will limit its support of this chip to Vista.  While we can expect Vista to continue to get better and better, the extra cost and hassle of Microsoft’s software, Office upgrades, etc will limit sales.  Apple will swoop in and take more market share.

Obama

As a result of all the economic problems and scandals on Wall Street, I predict the Obama administration will propose a comprehensive financial monitoring system for the banking and investment community.  It will be proposed in 2009 and will take a few years to implement.  With it government agencies will have the means to thoroughly monitor and regulate the industry.

The Obama administration will move forward, as promised with a national program to computerize medical records.  They will however, miss one of the greatest values of such an effort.  Because of privacy concern, government ignorance of technology, etc the system will not have the ability for the medical industry to do data mining.  With computerized records we will finally have the ability to spot drug interaction problems and perform research on the effectiveness of treatments.  With data mining with patient privacy protection, our health care system can be greatly improved.  We will miss that opportunity.

The Obama administration and/or Google will create a new Google Gov service.  Like its news service, Google Gov will start tracking everything going on in Congress.  Committee hearings, votes, discussion of bills and amendments will be captured by Google and made public within days.  We will finally be able to see in real time what our elected leaders are really doing, who is influencing them, etc.  This will be a game changer.