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Apple vs Microsoft vs Sony [Graphs]
The core of any long-standing technology company is research and development. Here’s how Apple, Microsoft and Sony’s last decade of spending stack up.
Note that the first graph shows research and development as a percentage of revenue (to scale the spending by company, since revenues differ so greatly). This next graphic can help you conceptualize the revenue and R&D gap:
A Few Interesting Notes:
• Now, Microsoft spends about 17% of their revenue on R&D. Sony spends about 8%. Apple spends less than 4%.
• If you were to break down the amount of R&D that goes purely to physical (non-software) products sold by Apple and Sony, Sony would spend about $11.5 million per product while Apple would spend about $78.5 million per product. (Of course, that’s rolling the cost OS X and iPhone OS development into Macs and the iPhone, which could be seen as inflating their per product spending.)
• Microsoft just spends a lot of money in R&D, period—about $9 billion last year in generalized research (that often doesn’t lead to specific products). In terms of percentage growth over the last decade, Apple’s R&D has grown the most (nearly quadrupled) while Sony’s has grown the least (not quite doubled).
In light of these bare numbers, is it any surprise that Sony is struggling the most to capture the hearts and minds of a public hungry for gadgets?
Sources:
Apple
Apple Public Relations
Apple Investor Relations
Apple Insider 2004
Apple Insider 2005
Apple Insider 2006
Apple Insider 2008
Mac Observer
Microsoft
Microsoft Investor Relations
Sony
Sony Investor Relations
Research by David Chaid
This Is Why that Amazing NASA Earth Image Looked So Familiar
After publishing the The Most Accurate, Highest Resolution Earth View to Date, it got extremely popular: The day after, countless newspapers and blogs worldwide reposted the story. NASA wrote to us, surprised. Why? Because everyone already knew about it:
Yes, the Blue Marble is the iPhone’s default screen, which have been seen by millions of iPhone owners and by everyone who has read about the iPhone since 2007. In fact, the image has been public since 2002:
From: *************** <***********@nasa.gov>
Mr. Diaz
Hello. I am the photo editor for the Public Affairs Office at NASA’s Goddard Space Flight Center.
We were happy to see you featured our Blue Marble image on your website last week.
http://gizmodo.com/5478787/the-most-accurate-highest-resolution-earth-view-to-date#comments
We also featured it on our Flickr page but it has really taken off on the web. We had over 500,000 hits in the last two days alone.
Given that this is an image from 2002 I’m just curious what prompted you to post it on your site? Or did you pick it up from someplace other than our site? I see at the bottom it says “NASA via Twitter”
Really, I’m just curious because it’s gotten so much play over that few days.
Thank you for your interest in our work.
Take care,
Rebecca
The reason? Because it’s a beautiful image, that’s all. One that makes you marvel at the beauty of our planet, and how tiny and insignificant we are, but also how unique and rare. [Gizmodo—Thanks to John Hermann for telling me about the obvious]
Don’t forget to check NASA Goddard’s Flickr page. They keep posting really cool stuff.
The iPod Touch Is This Generation’s Tamagotchi
Source: http://feeds.gawker.com/~r/gizmodo/full/~3/SM6HjEBs9Ok/the-ipod-touch-is-this-generations-tamagotchi
All these wonderful things we’re learning today, from data! First, we find out that Android is a guy thing. Now, we discover that the iPod Touch shares more demographics with glittering vampires than smartphones. iPod Touch: Kid stuff.
The age distribution makes a lot of sense, especially with the direct available comparison of the iPhone: the iPod Touch is a good gift, a plausible purchase, and a good investment for a young person right now. An iPhone with a $70-a-month minimum contract is a tougher sell, either to parents, or to kids mostly supported by their parents.
And these kids don’t just buy different gadgets than adults—they use them differently, too. For example, they looooove apps:
But they’re stingy little bastards, these kids: 
Buying an app can be tough without a credit card, so again, this isn’t shocking. But it does poke a little hole in the idea of the iPod Touch as a massive moneymaker for Apple. Hardware sales are tremendous and highly profitable, sure, but once the devices are in users’ soft little baby hands, they don’t keep raking it in like the iPhone does. [AdMob]
Inside Google’s Secret Search Algorithm
Source: http://feeds.gawker.com/~r/gizmodo/full/~3/zzkIcilnJp4/inside-googles-secret-search-algorithm
Wired’s Steven Levy takes us inside the “algorithm that rules the web“—Google’s search algorithm, of course—and if you use Google, it’s kind of a must-read. PageRank? That’s so 1997.
It’s known that Google constantly updates the algorithm, with 550 improvements this year—to deliver smarter results and weed out the crap—but there are a few major updates in its history that have significantly altered Google’s search, distilled in a helpful chart in the Wired piece. For instance, in 2001, they completely rewrote the algorithm; in 2003, they added local connectivity analysis; in 2005, results got personal; and most recently, they’ve added in real-time search for Twitter and blog posts.
The sum of everything Google’s worked on—the quest to understand what you mean, not what you say—can be boiled down to this:
This is the hard-won realization from inside the Google search engine, culled from the data generated by billions of searches: a rock is a rock. It’s also a stone, and it could be a boulder. Spell it “rokc” and it’s still a rock. But put “little” in front of it and it’s the capital of Arkansas. Which is not an ark. Unless Noah is around. “The holy grail of search is to understand what the user wants,” Singhal says. “Then you are not matching words; you are actually trying to match meaning.”
Oh, and by the way, you’re a guinea pig every time you search for something, if you hadn’t guessed as much already. Google engineer Patrick Riley tells Levy, “On most Google queries, you’re actually in multiple control or experimental groups simultaneously.” It lets them constantly experiment on a smaller scale—even if they’re only conducting a particular experiment on .001 percent of queries, that’s a lot of data.
Be sure to check out the whole piece, it’s ridiculously fascinating, and borders on self-knowledge, given how much we all use Google (sorry, Bing). [Wired, Sweet graphic by Wired's Mauricio Alejo]
WTF Is Google Doing? [Google]
I don’t understand Google Shopper. Not because the function—searching for books, CDs, DVDs and more by using the cover art or barcode—is confusing. But because they already have a visual search app built into new Android phones, Goggles.
Goggles does the same thing: You take a picture of something, like a book cover, and it searches for it. I get that Shopper is slightly different, with more of a direct Amazon-competitive slant, since you can bookmark products to buy them later (presumably through Google Checkout).
But why not just integrate that into Goggles? Why the hell does this separate other product exist? Like Fake Steve says, WTF is going on over there? Android and Chrome OS? Wave and Buzz? (Okay, Buzz and Wave aren’t an entirely fair comparison, though try explaining them to a normal person.) Now Goggles and Shopper? Am I just missing something? [Google]
Windows Mobile’s Incredible Death Spiral
Source: http://feeds.gawker.com/~r/gizmodo/full/~3/YplxNHBy8r0/windows-mobiles-incredible-death-spiral
Before Windows Phone 7 was even an embryo of a concept, Windows Mobile was king: It powered nearly half of smartphones in use, a led the industry in features. Then, in 2007, things started to go wrong. Very, very wrong.
Silicon Alley Insider has charted Windows Mobile’s platform share, which is to say the proportion of users who were using it at a given time, over the last four years. For showing decline, figures like these are more telling than sales—they mean that, for years now, people haven’t been buying Windows Mobile phones nearly as fast as they’ve been ditching them.
More interesting than what it shows is what it projects: Windows Mobile 6.x phones have been collectively kneecapped by Microsoft’s announcement yesterday, and rendered spectacularly unbuyable outside of enterprise circles. In other words, that line—the one that dragged down past RIM in 2008, and that dropped past Apple last year—is going to keep plunging for the rest of this year, until Windows Phone 7 tries to haul it back up. And until then, it’s only going to get steeper. [Silicon Alley Insider]
The iPad Costs Apple As Little As $229.35 to Build
The $500 16GB, Wi-Fi only iPad costs Apple less than half that to build, according to a recent component breakdown from iSuppli. And for the 64GB 3G iPad, Apple clears nearly $500 in profit. Here’s how it breaks down:
Apple iPad Estimated Bill-of-Materials and Manufacturing Cost Analysis:
This will no doubt be updated once iSuppli and others are able to do a teardown of an actual device, but those estimated profit margins are pretty stunning, particularly on the higher-end models. iSuppli also points out that the 32GB versions of the iPad only cost $30 more to make than their 16GB counterparts, yet retail for $100 more—a good indication that that’s where they expect the sweet spot to be in the market.
Goes a long way to explaining why Apple’s so willing to be flexible on the price, no?[iSuppli]
Now that we’ve seen the iPad in the light of day, there’s a lot of chatter about what it can’t do. But Apple is now a massive threat to netbooks and ebook readers. Here’s why:
Generally speaking, the iPad’s goal is not to replace your netbook, assuming you own and love one. It’s not about replacing your Kindle either, assuming you cashed in for that as well. We have reviewed plenty of both, and know there’s plenty to like. If you derive pleasure out of using either, then Apple might have a hard time convincing you to switch to the iPad. But for the millions of people who aren’t on either bandwagon, yet have the money and interest in a “third” device between the phone and the computer, the iPad will have greater appeal.
250 Million iPods Earlier…
When the first iPod came out, its goal was not to grab the customers who Creative and Archos were fighting over, with their dueling 6GB “jukeboxes.” It was to grab everyone else. I remember listening to arguments about why Archos had a better device than Creative or even Apple. Lot of good that early-adopter love got them in the long run. The pocket media player market exploded, with Apple eating over half the pie consistently for almost a decade.
When the iPhone came out, BlackBerry users were like, “No flippin’ way.” And guess what, those people still buy BlackBerries. (And why shouldn’t they? Today’s BlackBerry is still great, and hardly distinguishable from the BB of 2007.) The point is, the iPhone wasn’t designed to win the hearts and minds of people who already knew their way around a smartphone. It came to convince people walking around with Samsung and LG flip phones that there was more to life. And it worked.
iPhones now account for more than half of AT&T’s phone sales. You can bet that WinMo, Palm and BB combined weren’t doing that kind of share pre-iPhone. Globally, the smartphone business grew from a niche thing for people in suits to being a 180-million unit per year business, says Gartner, eclipsing the entire notebook business—about 20% of which, I might add, are netbooks. The iPhone isn’t the sole driver of this growth, of course, but its popularity has opened many new doors for the category. Just ask anyone in the business of developing/marketing/selling Droids or Palm Pres.
You could say, “Those were Apple’s successes, what about their failures?” In the second age of Steve Jobs, there aren’t a whole lot. Apple TV is the standout—quite possibly because Apple discovered, after releasing the product, that there wasn’t a big enough market for it, or any of its competitors. Apple TV may be crowded out by connected Blu-ray players, home-theater PCs and HD video players, but Apple TV’s niche is, to this day, almost frustratingly unique.
So how do you know if a market exists? You ask the “other” Steve, Microsoft CEO Steve Ballmer.
It’s Business Time
There’s a famous Ballmerism, one he’s even said to me, that goes something like, “A business isn’t worth entering unless the sales potential is 50 million units or more.” 50 million. That’s why Ballmer is happy to go into the portable media player business and the game console business, but laughs about ebook readers. Microsoft may not sell 50 million Zunes, but it’s worth being a contender.
You can bet Apple thinks this way. You can easily argue that, despite its sheen of innovation, Apple is far more conservative than Microsoft. Apple TV is a bit of an anomaly, but with no major hardware refreshes and a few small-minded software updates, you can hardly accuse Apple of throwing good money after bad. Presumably Apple TV was a learning experience for Jobs & Co., one they’re not likely to repeat.
With that in mind, let’s look particularly at netbooks and ebook readers.
Like Notebooks, Only Littler
Netbooks are cooking, but it’s well known they’re cooking because notebooks are not. A netbook was originally conceived as something miraculously small and simple, running Linux with a warm fuzzy interface that dear old gran could use to bone up on pinochle before Friday’s showdown with the Rosenfelds. But instead of growing outward to this new audience (always with the grandmothers, it seems), it grew inward, cannibalizing real PC sales.
The Linux fell away, mostly because it was ill-conceived, and these simply became tiny, cheap, limited-function Windows PCs. They may have been a 40-million-unit business last year, according to DisplaySearch, but they only got cheaper, and the rest of the business was so depressed nobody was happy. (And just ask Ballmer how much he makes on those XP licenses, or even the “low-powered OS” that is Windows 7 Starter.)
Point is, nerds may love their netbooks, but the market that the netbook originally set out to reach is too far away, running farther away and screaming louder with every blog post about what chipset and graphics processor a netbook is rumored to have, or whether or not it is, indeed, a netbook at all. Clearly the audience is cheap geeks, and while that may be a good market to be in (just read Giz comments), it’s definitively not Steve Jobs’ market.
Easy on the Eyes
Now, about that Kindle. Best ebook reader out there. Every time we say that, we say it with a wink. We totally respect the Kindle (and I for one have hopes for Nook once it pulls itself out of the firmware mess it’s in), but we think e-ink is a limited medium.
Its functionality is ideal for a very specific task—simulating printed words on paper—and for that I have always sung its praise. The Kindle is ideal for delivering and serving up those kinds of books, and as a voracious reader of those kinds of books, I am grateful for its existence. But there are other kinds of books of which I am a consumer: Cookbooks, children’s books and comic books. (Notice, they all end in “book.”) The Kindle can’t do any of those categories well at all, because they are highly graphical. E-ink’s slow-refreshing, difficult-to-resize grayscale images are pretty much hideous. No big deal for the compleat Dickens, but too feeble to take on my dog-eared, saffron-stained Best-Ever Curry Cookbook.
So, e-ink’s known weaknesses aside, let’s talk again about Ballmer’s favorite number, 50 million. Guess how many Kindles are estimated to have been sold ever since the very first one launched? 2.5 million. Nobody knows for sure because Amazon won’t release the actual figures. Guess how many ebook readers are supposedly going to sell this year, according to Forrester? Roughly 6 million. In a year. Compare that to 21 million iPods sold last quarter, along with 9 million iPhones.
I am not suggesting that the iPod or iPhone is a worthwhile replacement for reading, but I am saying that, for better or worse, there are probably at least 2.5 million iPod or iPhone users who read books on those devices.
Are you starting to see the larger picture here? I am not trying to convince you to buy an Apple iPad, I am trying to explain to you why you probably will anyway. As the Kindle fights just to differentiate itself while drowning in a milk-white e-ink sea of God-awful knockoffs, you’ll see that color screen shining in the distance.
Sure the iPad may not be as easy on the eyes as a Kindle. But you will be able to read in bed without an additional light source. You will be able to read things online without banging your head against a wall to get to the right page. And, once the publishers get their acts together, you will be able to enjoy comics, cookbooks, and children’s books, with colorful images. Even before you set them into motion, dancing around the screen, they’ll look way better than they would on e-ink. (I haven’t even mentioned magazines, but once that biz figures out what to do with this thing, they will make it work, because they need color screens, preferably touchscreens.)
Tide Rollin’ In
So we have this new device, carefully planned by a company with a unique ability to reach new markets. And we have two types of products that have effectively failed to reach those markets. And you’re going to bet on the failures? The iPad has shortcomings, but they only betray Apple’s caution, just like what happened with iPhone No. 1. Now every 15-year-old kid asks for an iPhone, and the ones that don’t get them get iPod Touches.
We can sit here in our geeky little dorkosphere arguing about it all day, but as much as Apple clearly enjoys our participation, the people Jobs wants to sell this to don’t read our rants. They can’t even understand them. My step-mother refuses to touch computers, but nowadays checks email, reads newspapers and plays Solitaire on an iPod Touch, after basically picking it up by accident one day. That’s a future iPad user if I ever saw one.
Jobs doesn’t care about the netbook business, or the ebook business. He’s just aiming for the same people they were aiming at. The difference is, he’s going to reach them. And the fight will be with whoever enters into the tablet business with him. Paging Mr. Ballmer…
PS – If I’ve gotten to the end of this lengthy piece without telling you much about the iPad at all, it’s because other Giz staffers have already done such a handsome job of that already. If you missed out, here are the best four links to get you up to speed:
• Apple iPad: Everything You Need To Know
• Apple iPad Just Tried to Assassinate Laptops
• 8 Things That Suck About Apple iPad
Source: http://feeds.gawker.com/~r/gizmodo/full/~3/9IJFaADoLr0/apple-the-iphone-company
Apple watchers can now see how truly huge the company’s iPhone business has become, thanks to a new accounting method the company started using this past quarter.
In less than three years, the iPhone has grown to become Apple’s biggest business—up from zero.
Specifically, during Apple’s December quarter, the company reported $5.6 billion of iPhone-related revenue, up 90% year-over-year. That edged out the Mac business ($4.5 billion) and iPod business ($3.4 billion) for the second quarter in a row and the third time ever. It was the first time the iPhone has beat the Mac and iPod businesses by more than $1 billion each.
And this despite Apple missing Wall Street’s expectations for iPhone sales, thanks to increased competition from Google Android and other smartphones.
Why the new visibility? During the quarter, Apple started taking advantage of new accounting rules that lets it report the vast majority of revenue from iPhones and Apple TV devices immediately. Previously, it had to spread the revenue over 24 months to account for free software updates it would offer those customers.
Source: http://feeds.gawker.com/~r/gizmodo/full/~3/xZHNT92BICw/bing-could-catch-yahoo-by-the-end-of-the-year
Since Microsoft’s Bing search engine launched last summer, it has gained market share at the expense of Yahoo. If the trends stay consistent, Bing could pass Yahoo in the U.S. by the end of November.
To be sure, some (most?) of Microsoft’s gains have come with an expense: The company is buying up toolbar deals to become the default search engine for more users — less-valuable, paid traffic that Yahoo seems happy to give up. And Microsoft has spent a lot of money advertising Bing.
But there’s no doubt that Yahoo’s declining search business, long term, is bad news for the company. Especially because its deal to farm out its search technology to Bing will only generate revenue for searches conducted through Yahoo, not through Bing, even though Yahoo is selling the ads on Bing.
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