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Iphone

Apple's 16GB IPhone 6S Is a Serious Strategic Mistake 324

HughPickens.com writes: Matthew Yglesias writes at Vox that Apple's recent announcement of an entry level iPhone 6S is a serious strategic mistake because it contains just 16GB of storage — an amount that was arguably too low even a couple of years back. According to Yglesias, the user experience of an under-equipped iPhone can be quite bad, and the iPhone 6S comes with features — like the ability to shoot ultra-HD video — that are going to fill up a 16GB phone in the blink of an eye. "It's not too hard to figure out what Apple is up to here," writes Yglesias. "Leaving the entry-level unit at 16GB of storage rather than 32GB drives higher profit margins in two ways. One, it reduces the cost of manufacturing the $649 phone, which increases profit margins on sales of the lowest-end model. Second, and arguably more important, it pushes a lot of people who might be happy with a 32GB phone to shell out $749 for the 64GB model."

But this raises the question of what purpose is served by Apple amassing more money anyhow. Apple pays out large (and growing) sums of cash to existing shareholders in the form of dividends and buybacks, but its enormous cash stockpile keeps remorselessly marching up toward $200 billion. "Killing the 16GB phone and replacing it with a 32GB model at the low end would obtain things money can't buy — satisfied customers, positive press coverage, goodwill, a reputation for true commitment to excellence, and a demonstrated focus on the long term. A company in Apple's enviable position ought to be pushing the envelop forward on what's considered an acceptable baseline for outfitting a modern digital device, not squeezing extra pennies out of customers for no real reason."
Piracy

Belgian Media Group Demanding Copyright Levy for Internet Access 162

An anonymous reader writes with this tidbit from PC World about Sabam's latest demand for copyright levies: "Sabam, the Belgian association of authors, composers and publishers, has sued the country's three biggest ISPs, saying that they should be paying copyright levies for offering access to copyright protected materials online. Sabam wants the court to rule that Internet access providers Belgacom, Telenet and Voo should pay 3.4 percent of their turnover in copyright fees, because they profit from offering high speed Internet connections that give users easy access to copyright protected materials, the collecting organization said in a news release Tuesday." Sabam has previously demanded money from truckers for listening to the radio, and wanted to charge libraries royalties for reading to children.
The Almighty Buck

The Psychology of Steam Wallet & Microsoft Points 190

Hugh Pickens writes "Ever bought something from Xbox Live Arcade? The first time, you may have been a bit bamboozled by the process because Microsoft doesn't just let you put $15 on your credit card to buy a new game; purchases are done in 'Microsoft Points' that you deposit into a virtual wallet and you use the points to buy stuff. 'Gamers possessed of equal parts suspicion and curiosity may wonder why our gaming overlords adopted such a strange system instead of just letting us pay real money for our purchases,' writes game psychologist James Madigan. He says the real reason for Microsoft Points is that sometimes you are going to have some points left over in your account. Leaving money on the table or in your Xbox Live account makes most of us a bit uncomfortable (PDF) because it feels wasteful. 'It's similar to overeating at a buffet or doubling your paper towel use after buying the 124 roll jumbo pack,' says Madigan. 'Even though you could just let those paper towels or Nintendo Points sit there until you have a good reason to use them, spending real money on something else seems wasteful.' And Microsoft isn't the only one – Sony and Nintendo have similar systems, and Valve has even rolled out a 'Steam Wallet' for in-game microtransactions."
Music

RIAA Accounting — How Labels Avoid Paying Musicians 495

An anonymous reader writes "Last week, we discussed Techdirt's tale of 'Hollywood Accounting,' which showed how movies like Harry Potter still officially 'lose' money with some simple accounting tricks. This week Techdirt is taking on RIAA accounting and demonstrating why most musicians — even multi-platinum recording stars — may never see a dime from their album sales. 'They make you a "loan" and then take the first 63% of any dollar you make, get to automatically increase the size of the "loan" by simply adding in all sorts of crazy expenses (did the exec bring in pizza at the recording session? that gets added on), and then tries to get the loan repaid out of what meager pittance they've left for you. Oh, and after all of that, the record label still owns the copyrights.' The average musician on a major record deal 'gets' about $23 per $1,000 made... and that $23 still never gets paid because it has to go to 'recouping' the loan... even though the label is taking $630 out of that $1,000, and not counting it towards the advance. Remember all this the next time a record label says they're trying to protect musicians' revenue."
Businesses

EA Introduces "Online Pass" To Get In On Used Games Market 223

EA Sports has unveiled a new feature that they hope will help them get a piece of the lucrative used games market: the Online Pass. Each of their new titles will come with a one-time code that allows access to "premium" content and features. Players who buy the games used can get the same content, but will need to pay $10 for the privilege. "According to EA, the content can include anything from title updates and downloads to features like online leagues — and even online gameplay and multiplayer modes. ... EA will offer 10-day trials of Pass content so that users can see what they would be getting. So far, EA seems to be limiting the premium add-on experiment to its sports portfolio. ... The company has apparently gained the support of retailer GameStop, which has been watching with a close eye efforts on the part of publishers to discourage its thriving used games business. According to the retailer, encouraging premium content add-ons still benefits GameStop, since it sells PlayStation Network and Microsoft Points cards. It praised EA's Online Pass as 'forward-thinking.'"
The Almighty Buck

Crytek Thinks Free Game Demos Will Soon Be Extinct 379

An anonymous reader writes with this quote from Develop: "The CEO of indie studio Crytek has defended EA's divisive 'premium downloadable content' strategy, while also predicting the extinction of free game demos. ... Crytek's co-founder Cevat Yerli said he wasn't sure that a demo of Crysis 2 was going to be released. He said: 'A free demo is a luxury we have in the game industry that we don't have in other industries such as film. Because we've had this free luxury for so long, now there are plans to change this people are complaining about it. The reality is that we might not see any free game demos in the long term. ... Yes it is quite unpopular, but this is a messaging issue. The problem with any new strategy like this is it initially may appear as a blood-hungry, money-grabbing strategy. But I think there is a genuine interest here to give gamers something more than a small demo released for free. Really, what this is, is an attempt to salvage a problem. The industry is still losing a lot of money to piracy as the market becomes more online-based. So it’s encouraging to see strategies outlined to combat this.'"
Books

Sherlock Holmes and the Copyright Tangle 290

spagiola passes along a New York Times piece on the copyright travails of Sherlock Holmes. "At his age [123 years], Holmes would logically seem to have entered the public domain. But not only is the character still under copyright in the United States, for nearly 80 years he has also been caught in a web of ownership issues so tangled that Professor Moriarty wouldn't have wished them upon him."
It's funny.  Laugh.

VC Defends Farmville, Touts Virtual Tractor Sales 148

theodp writes "In a blog post, venture capitalist Fred Wilson gives his thoughts on ripe areas for tech investment in 2010 — mobile, gaming, new forms of commerce/currency, Cloud platforms/APIs, education and energy/environment. Asked to comment on scams and social gaming (he is an investor in Zynga), Wilson defended Zynga's Farmville: 'Zynga makes almost all of its revenue on virtual goods. I said in my etsy/san telmo post the other day that more tractors are sold every day in Farmville than are sold in the US every year. That's where the money is in social gaming. The "scammy ads" thing is total red herring that everyone got excited about but is almost entirely irrelevant.'"
Communications

Verizon Defends Doubling of Early Termination Fee 319

I Don't Believe in Imaginary Property writes "Verizon is defending its decision to double its Early Termination Fee from $175 to $350 after being called to account by the FCC. They claim it's because the higher fees allow them to offer more expensive phones with a lower up-front cost (PDF), and they also say that because they pro-rate the fee depending on how much of your contract is left, they still lose money. Apparently doing something about the Verizon customer service horror stories isn't as good a way to retain customers as telling them that they have to pay several hundred dollars to leave."
Social Networks

Mafia Wars CEO Brags About Scamming Users 251

jamie writes with a follow-up to our recent discussion of social gaming scams: "Mark Pincus, CEO of the company that brought us Mafia Wars, says: 'I did every horrible thing in the book just to get revenues right away. I mean, we gave our users poker chips if they downloaded this Zwinky toolbar, which was like, I don't know... I downloaded it once and couldn't get rid of it.'" TechCrunch also ran a interesting tell-all from the CEO of a company specializing in Facebook advertisements, who provided some details on similarly shady operations at the popular social networking site.
Cellphones

Verizon Droid Tethering Comes At a Hefty Price 555

Pickens writes "Tom Bradley reports in PC World that the new Motorola Droid smartphone will cost users $199.99 with a 2-year contract, with an additional $30 per month for the mandatory 'unlimited' data plan that has a monthly cap of 5Gb. Verizon will charge $50 for each additional gigabyte over the 5Gb limit on the unlimited data plan. Verizon has confirmed that tethering will cost another $30 per month for an additional unlimited data plan that is also limited to 5Gb. If you want tethering you will pay $60 above and beyond the monthly contract for service for an 'unlimited' 10Gb of data per month, and if you plan on connecting with an Microsoft Exchange email account you have to pay another $15 a month. 'Verizon seems to be doing everything it can to make the Droid as unappealing as possible by nickel and diming customers so that actually using it is not cost-effective,' writes Bradley. 'After all of the hype around Verizon's marketing efforts, and generally favorable reviews of the Motorola Droid, users that rush out to get the new device may be in for a shock.' Droid users will have to wait until sometime in 2010 for tethering. 'That service is on our schedule for next year,' says Verizon spokeswoman Brenda Raney. The delay is because 'the service has to be tested on the phone so until we know it works, we don't offer the service. It is not uncommon for us to introduce the phone and continue to test the service and offer it later.'"
IBM

Arrested IBM Exec Goes MIA On the Web 185

theodp writes "Among those charged in the largest hedge-fund insider trading case in US history was IBM Sr. VP Robert W. Moffat, the heir apparent to IBM CEO Sam Palmisano and the guy behind Big Blue's 'workforce rebalancing' and the sale of IBM's PC unit to Lenovo. IBM's not talking about the incident, but it's interesting that Moffat's bio is MIA at IBM.com ('Biography you tried to access does not exist.'), and his Smarter Planet video can no longer be found ('This video has been removed by the user.') at IBM's YouTube Channel. Do you need approval from the Feds before tidying up after someone who's under investigation? BTW, if stories and comments appearing in the Times Herald-Record and Poughkeepsie Journal are any indication, Moffat may want to avoid a local jury trial. 'I have talked to a few IBMers today, and there seems to be a lot of cheering in the halls of IBM over his arrest,' said Lee Conrad of Alliance@IBM."

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