Sunday, October 28, 2012

New Voices: Apple's profits from cheap labor give little incentive to innovate

It's no secret that Apple has become the darling of Wall Street, given its success in the smartphone arena. The company's ability to invent consumer electronics blending form and function so seamlessly has earned it the largest market cap in history, nearing $600 billion, and crowned its founder as the "secular savior."

To suggest the company's success has come from anything but sleek marketing and design would be equivalent to telling an Apple fanboy that Microsoft Windows is superior to Mac OS. This, however, is exactly the case. There is a more important factor that has lifted Apple in its ascendancy — the exploitation of cheap overseas labor.

While this is no surprise to a world that has purchased more than 240 million iPhones to date, it is clear that the fanboy mentality has gotten the best of us. There is too wide a disparity for us to comprehend that the maker of our favorite e-gadgets indirectly employs workers at $1.25 per hour to manufacture its products.

To bridge that gap, it is helpful to break down those numbers to a digestible form. Foxconn, Apple's preferred manufacturer, employs more than 400,000 workers at its Shenzhen, China plant responsible for producing Apple products. Employees make $350 per month, and account for 2 percent of the cost per iPhone.

In comparison, an American paid the federal minimum wage and working the same roughly 70-hour week as the Chinese worker would make $2,030 per month. Over five years (about one year less than that of iPhone production through 2012), Apple paid Foxconn employees $40.3 billion less than it would have paid American workers under the same hourly requirements.

Let's say Apple hired American employees over the past five years to manufacture its products. Employees would have earned $48.7 billion, assuming they worked 30 hours of overtime per week at minimum wage. The personal savings rate in the U.S. has hovered around 5 percent over that time. Therefore, those workers would have spurred the economy in its most desperate times, spending $39.3 billion on domestic goods. The $7.3 billion in taxes generated would fund Big Bird's Corporation for Public Broadcasting for the next 32 years.

In reality, Apple would have depended upon labor from 700,000 Americans working 40-hour weeks, rather than that of their 400,000 wage slaves. Adding that many people to the labor force would have reduced the unemployment rate 0.5 percent to 7.3 percent.

But none of this occurred. Instead, Apple has $100 billion in cash on hand — about half of which can be accounted for due to exploitation of foreign workers — sitting idle on its balance sheet. Meanwhile, the company continues to ration its products one frivolous upgrade at a time, generating gross margins above 50 percent on iPhone sales.

Instead of using its resources to innovate, Apple can choose to spend its cash from misconceived globalization by swallowing up competing patents, and to litigate against those companies that pose a challenge by offering alternative platforms.

No matter your moral stance on the treatment of foreign workers, or your political affiliation as it stands in the upcoming election, there is something to be said about the role of corporate responsibility and how we, as consumers, regulate it. It's easy to fall into fanboy mode as we play with our apps and watch Apple's celebrity ad campaigns confirm our self-serving attitudes. But we also have a responsibility to check those powers that can control us.

Numbers don't lie. We're rewarding Apple for paying overseas workers low wages, stifling innovation and harming the American economy.

Now if only the iPhone 5 were restocked so I could forget about all of this and upgrade to the sweeter screen.

Friday, October 26, 2012

Apple Ignores Judge

I wonder what the Judge will say about this one?  Apple was supposed to post the message about the ruling  that the iPad NOT being copied in the UK in 14pt Arial font. Instead, they used 11pt Calibri font.  I will repost it here in case it wasn't big enough for you to read. They buried under a bunch of other legal mumbo-jumbo with a back-handed comment basically stating that it really was copied (we all know it wasn't).

...the U.K. court did not find Samsung guilty of infringement...

Conan Slams the iPad mini

Thursday, October 25, 2012

45% of iPad Owners Not Happy About iPad 4

About 45% of iPad owners are not happy about the timing of Apple’s new iPad 4 launch, which comes just seven months after the debut of the iPad 3.

A new study by Toluna QuickSurveys — which was conducted among 2,000 consumers — revealed iPad owners are upset about how soon the company launched its next-generation tablet and, consequently, made the iPad 3 obsolete. The news came as a surprise to many fans when it was revealed on Tuesday at its iPad mini press event.

Half (50%) of iPad 3 owners say they were disgruntled about the launch of the iPad 4, followed by iPad 2 owners (45%) and first-generation iPad owners (40%).

In addition, one in four respondents believes Apple’s reputation has been tarnished after removing Google Maps from its iOS software update and replacing it with Apple Maps.

But the survey also found that consumers are ready and willing to purchase the 7.85-inch iPad mini, Apple’s smallest tablet so far. About 15% say they will definitely buy the smaller tablet, while 32% say they would “probably buy it.” Meanwhile, about 21% say they would purchase the iPad mini as a gift for the holidays.

However, when asked which device they would prefer among the iPad Mini, Kindle Fire and Nexus 7 Tablet, the Kindle came out on top with 46%, followed by the iPad Mini (40%) and Nexus (14%).

The findings also indicate that iPad owners are more likely to purchase the iPad Mini with 71% saying they would “definitely” or “probably” purchase the tablet. Respondents are most impressed by the size of the small, lightweight device (26%), followed by “speed and performance” (23%) and enhanced battery life (22%).

Wednesday, October 10, 2012

The New Crapware: Apple’s Desire to Force Its Apps on Customers


“Crapware.” It’s a term familiar to nearly anyone who purchased a name brand PC in the last 15 years. It represents the ultimate triumph of a company’s interests over those of its customers, and a frustrating phenomenon that gave Windows-based PCs an even worse reputation than they already had. But in this new post-PC era, have the roles been reversed? Has Apple taken over from companies like HP and Dell as the “King of Crapware?” 

Crapware was a good idea on paper. Computer makers, facing razor-thin margins, would be paid by software companies to bundle utilities and games with new computers. The computer makers would make a little extra on each sale, software companies could get their products in front of millions of customers, and, as the theory goes, customers who may be new to computers could get a free sampling of software.
The problems began immediately for obvious reasons. Software that a company pays to give away isn’t going to be very good. And so customers, excited by their new PC, would boot it up and wait while ten different system utilities, an anti-virus, a trial version of an office productivity suite, and fifteen games all loaded in the background.
Most of the software was complete junk, and the software that may have been worth something was only offered in an extremely limited form until the customer paid to upgrade. Worse, all of the crapware slowed a customer’s computer down significantly. Apple even dedicated a "Get a Mac" commercial  to the topic.
Thankfully, customers with sufficient technical knowledge could simply wipe the hard drive and reinstall Windows from a clean installation source. This “nuke and pave” approach became a common first step for many purchasers of new PCs.
In the end, however, what crapware truly symbolized was an effort by companies to force products on their paying customers, with many of those customers who lacked the technical knowledge to reinstall Windows stuck and out of luck. In the post-PC era of tablets and smartphones, Apple is now the dominant player, and Cupertino’s own version of crapware has taken hold. True to Apple’s commitment to “Think Different,” the third-party interests from the PC crapware days have been replaced by Apple’s own interests and what it feels is necessary to force upon consumers.
Since the first release of iOS over five years ago, Apple has insisted on a strictly controlled platform. The company preinstalls many different types of applications in iOS and gives customers a very limited ability to remove or hide them.
In the early, pre-App Store days of iOS, this was a necessity to ensure basic functionality; there were no alternative native applications for a customer to turn to. Now that we have a robust appecosystem, nearly every built-in Apple app has at least a dozen viable alternatives on the App Store.
Empty NewsstandNot the most efficent use of space.
So why does Apple still prohibit a user from removing or hiding undesired applications? Like many iOS users, I have found superior alternatives to Apple’s Stocks, Weather, Notes, and Calendar apps and, on my iPhone, I don’t use Newsstand or Passbook. Newsstand in particular is annoying because there’s no way to officially hide it away in a folder. It just sits empty on my home screen, mocking me.
As I mentioned above, putting all of these unused Apple apps into a folder is a solution, but not a very good one. Why force a user to put up with even a single undesired folder?
Others may argue that the Apple apps are built into iOS itself and are therefore crucial to the system’s overall functionality. That’s understandable. But still, why not allow the user to simply hide unwanted apps with a toggle in Settings? Apple already knows how to do this: pre-iOS 6, the YouTube app could be hidden from the device by turning on parental controls and instructing the phone not to display the app.
Such a system would simple to implement, and makes the case that all Apple apps, possibly with the exception of the Phone app (for safety reasons), should be able to be removed or disabled by the user.
So why doesn’t Apple allow this? Consistency is likely one reason. Apple wants a basic, fundamental level of consistency across its iDevices, and the company may believe that the core applications it includes in iOS are the bare minimum necessary to deliver a consistent and functional product. As I mentioned, however, while this may have been true before the App Store, I cannot accept this reasoning today.
Another reason may be financial. If users could turn off the iTunes, App, iBooks, and Newsstand stores on their devices, they will be less likely to make impulse purchases while on the go.
Many iOS users who find value in all of Apple’s included applications will no doubt argue that “crapware” is too harsh a term. After all, PC crapware negatively affected the performance of the computer, while the inclusion of Apple’s apps do not noticeably impact system performance at all.
As I mentioned above, however, crapware was, at its most basic level, the idea that a company could force something on to a paying customer. Under that definition, Apple is certainly guilty of it and, in a way, the situation may be slightly worse than that of its PC ancestor. With a PC, a user could wipe away all undesired software, something that, as we’ve discussed, is not possible on iOS.
StifleStand Puts Newsstand in a FolderStifleStand lets users trick their iPhone
into putting Newsstand into a folder.
There are workarounds to many of these problems, including software released Monday  that can hide Newsstand in a folder. But these workarounds are a piecemeal and incomplete answer to the larger problem.
To be fair, Apple is not the only company that forces built-in applications on its customers. Android in particular has been modified by many hardware makers to include all sorts of undesired software. But Apple is supposed to be different, it is supposed to lead the pack on customer experience.
There is a difference between a closed system and a lack of basic customization. Users on OS X can uninstall almost any included Apple application and, if uninstallation is not possible, the application can be easily hidden from view. That same philosophy should apply to the company’s mobile devices.

Tuesday, October 9, 2012

Mac-focused malware is big and getting bigger

Despite the Mac reputation as being more secure because of Apple’s tight control over its vertically integrated ecosystem, Mac-specific malware and advanced persistent attacks (APTs) against human rights groups is on the rise, cautions Citizen Lab Senior Security Analyst Seth Hardy.

Hardy gave a presentation  during this year’s SecTor Conference in Toronto, Canada, noting that a new development for 2012 is APTs that now often include malware specifically designed to compromise Macs.

“Mac users have long thought they’re safe, for a variety of reasons including: ‘nobody ever targets us’ (not anymore!), ‘Macs are based on Unix so have additional security’ (not if new vulnerabilities are found, or you choose to run the program), and ‘we’re not using Internet Explorer or Outlook so most threats don’t work’ (other software can be just as buggy),” noted Lidija Sabados, Citizens Lab researcher, in introducing the talk.

Aside from the well-documented Flashback botnet, which was believed by Kaspersky to at one point to control 700,000 machines, malware families like the one that includes SabPab (related to the known LuckyCat campaign), Lamadai and MacControl are becoming more prevalent, Hardy cautioned.

Hardy offered some forensics in his talk, according to Forbes:  The Olyx/Lamadai/Sadpab Mac APT family is directly related to CVE-2011-3544, he explained, which is an Oracle Java vulnerability. SadPab offers victims a link that directs the user to Web pages with Java .jar files. "Sabpab is seen by organizations that are regularly targeted," Hardy said. "We'll probably see more of this one in the future."

The Maccontrol APT attack meanwhile is bundled into a zip file with a hardcoded link to the APT author's command and control center. Hardy said Maccontrol is still an ongoing threat, with multiple generators sending out material.

But Apple itself may be too complacent in its belief that Macs are inherently more secure: It took four months to patch the SabPab flaw after Oracle provided a public update. And the Flashback malware, which began seriously infecting Macs in February and March 2012, was not patched until May.

Thus, end users should remain vigilant, Hardy noted. "This is a new space, people are building up their tools and authors, and just getting started," he said. "Targeted groups will not stop being targeted."

A recent report by Sophos found that one in five Macs harbor malware. That was out of an analysis of 100,000 Mac computers running its anti-virus software.

Hardy suggested that aside from avoiding clicking on unknown links, Mac users should use a trusted service like Google Drive to open and share items online, and only with known companions.