Podcast: Play in new window | Download

Christmas is approaching and with it the end of the first fiscal quarter for many computer companies including Apple.  This is the time when these companies make their biggest sales of the year.  It’s also the time when J.D. Power & Associates is finishing-up its PC quality surveys which cover initial quality and overall service and support.  If you are an Apple customer or a prospective Apple customer pay attention, because this could be a very good time to be you.

Apple is proud of its support operation, which is ironic given that back in the early Apple ][ days Steve Jobs wanted to save money by mimeographing user manuals.  I am not making this up. Obviously Steve has changed his point of view because he has been back in charge of Apple now for 12 years and for the last nine of those Apple has been the top PC company for both quality and support according to J.D. Power.

Winning a competition nine years in a row doesn’t come easily, certainly doesn’t come by accident and luck has nothing to do with it.

This month Apple has a chance to clinch a 10th win in a row and the entire company, from Steve Jobs on down, is determined to do just that.  I’m not saying this because of any intuition or simple application of logic.  I’m telling you that Jobs has made it clear in company meetings that Apple will win its 10th J.D. Power award whatever it costs.

So hie thee to an Apple store, my friends.  Take with you any and every Apple product you own that’s still under warranty and attempt to get them to give you a new one, because they’ll probably do it.  Apple is willing right now to spend tens of millions taking back or replacing products they would normally refuse to do — that they’ll probably refuse to do a month from now — just to clinch that darned trophy.

I’m sure they’ll win again, but let’s make them earn it, shall we?

Podcast: Play in new window | Download

“The only thing worse than being talked about,” said Oscar Wilde, “is not being talked about.” That has until recently applied in spades to Steve Jobs of Apple, a guy who, when I’ve interviewed him, has always asked what other people have said about him, “especially the bad stuff.”

Steve is a guy who likes being talked about.  He likes it so much, in fact, that he’s adopted a strategy to encourage it.  This strategy involves very carefully doling-out bits of himself to the press not in an effort to discourage coverage, really, but to ENcourage it by limiting the supply.  Like everything else about Steve it is brilliant and cold.

This was the case until Steve Jobs got sick, of course, at which point he went from skillfully managing the press to just as skillfully avoiding it.  I wonder why?  What did he have to fear about the world knowing he’d been ill?  It’s probably just an artifact of his obsessive need to control.

Whatever the reason, ever since his bout with pancreatic cancer in 2004, Steve and his Apple minions have tried valiantly to keep his health condition out of the news, citing it as a “private matter.”

Except of course it isn’t a private matter at all.  Steve is the CEO of Apple, Apple is an enormous publicly-held company, and many Apple investors are onboard (or remain onboard) specifically because of their confidence in Steve as a sort of high tech rainmaker.  This is a concept that over time Jobs and Apple have done absolutely nothing to discourage or dispel.  And so now I (and the SEC from what I hear) believe Steve and Apple have to live with it.

Steve Jobs’ health is material to Apple and to Apple shareholders.  To say that having taken a six-month leave of absence changes that would be wrong.  What WOULD change that would be Jobs’ resignation, which he hasn’t yet given to the Apple board.  As long as Steve is still intending to return to Apple, his health is material to the company and should be disclosed.

Whatever Apple claims about privacy and however much whining and threatening Steve does to reporters by e-mail and phone, his condition remains squarely on the table, hot and steaming and ready to be served-up, as it should be.

Maybe he wants it that way.  Maybe this is just more of the same limiting supply to increase demand.  It’s possible but I simply don’t know.

Now look, we’re nine paragraphs into this story and I’m finally getting to the lead, which should have been in the first graf.  But by now you understand why I have to do it this way, because you don’t give out unseemly news (at least I don’t give out unseemly news) without putting it in some proper context.  The eight grafs above explain why I feel it is important to say that Steve Jobs has stopped using his computer.

Huh?

Steve Jobs has stopped using his computer.  He’s off curing himself of something he won’t name and in some manner we can’t know but I CAN tell you right now it doesn’t involve using his computer.

A friend of mine has for years been one of Steve Jobs’ Internet chat buddies.  And as such his chat client has – again for years – shown as Steve came online each day and remained there for hours and hours as you’d expect a Silicon Valley mogul to do.  And it’s a trend that continued well past Jobs’ announcement that he was taking a six-month leave of absence to get well.  But then Steve started logging-on less and less.  And several weeks ago he stopped logging-on at all. 

Silence.

No big deal, right?  He’s off the clock; Cook and Schiller are fighting for the tiller; Apple’s in good hands; who cares?

Anyone cares who actually expects Steve Jobs to return to Apple.  

Podcast: Play in new window | Download

I knew things were bad when Steve Jobs didn’t make even a token video appearance at Macworld.  He would have done it, I’m sure, had he been well enough.  Maybe someone at Apple, weeks before, thought of suggesting such a video, but of course to do so then would have been committing career suicide even if in retrospect it would have been a good idea.  So now Steve is off on his six month (or longer) medical leave, readjusting those hormones, and the press is abuzz with what the heck Apple will do without Steve.

Apple will be fine.

Steve Jobs is an amazing chief executive, clearly the best of his era, but that doesn’t make him irreplaceable.  True, he saved Apple, but now Apple is saved.  The company is rich, has growing market share and a mindshare dominance envied throughout the computer AND music AND video AND mobile phone industries.  Steve could die tomorrow and Apple would be fine for years to come.  Apple might even be better.

Steve, for all his design insight and high standards is also a pain in the ass, but it is his narcissism – keeping the whole company on edge and terrified, will he or won’t he? – that has to have taken a toll and may well land the company in court.  Twenty thousand people are sitting around wondering whether their jobs are endangered because he is ill and that’s just crazy.

For a time Apple will be run with everyone asking, “What would Steve say?”  And because he’s been such a huge factor in the lives of his direct reports for so long, they’ll have that voice of Steve in their heads and will do the right thing automatically.  And eventually, if Steve for some reason doesn’t return to Apple, new Steves will emerge.  If that happens I’m guaranteeing right here that Apple will gain a new CEO and it won’t be Tom Cook OR Phil Schiller because neither man can replace Steve Jobs and they know it.

In the long run the goal won’t be to replace Steve, anyway, but to transcend him, because Steve was far from the perfect leader.

The last time Steve Jobs left Apple, back in 1985, the entire company breathed a sigh of relief.  Steve back then was an undisciplined brat.  John Sculley was able to dramatically improve Apple’s balance sheet through one simple technique – eliminating all the wacky projects Steve was spending $200 million per year running at Apple – projects that were generally never going to hit the market anyway.  Alas, that’s where Sculley ran out of gas as a leader because he lacked technical vision where that’s all Steve had in those days.

It took learning to run NeXT on a budget and almost losing the company to teach Steve how to be a leader.  It took learning to leave Pixar alone to teach Steve that there were some things – many things – best left to others more talented than he.  Those two experiences, added to his fall from grace in 1985, made Steve Jobs the leader he is today.  Still all elbows and shoulder blades, he somehow makes it work.

I feel for the guy.  It’s not his health scare, but his lack of true friends that worries me.  When your best friend is Larry Ellison you know you are in trouble. But that may be the best that either man can do. 

Steve is the critic of everyone around him. Yet the image I prefer to keep in mind was from an InfoWorld meeting years ago – back in his NeXT days – when Bob Metcalfe got Steve to show up and he brought with him his little baby.  In that short time I saw a doting and concerned father — a side of Steve I would have sworn could not exist.  Cynically I attributed it at the time to the baby being pre-verbal: how do you criticize someone who can’t understand what you are saying?  But Steve went on to have more kids, apparently with equal success, and I give him credit for that.  It’s not easy to be a good Dad.

So here’s to Steve Jobs, may he return in six months or go off and do anything else he likes.  But don’t worry about Apple. 

Apple’s on a roll.

Podcast: Play in new window | Download

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.