Sep 28 2005

Scientific thinking

In the marketplace of ideas, the strongest arguments should (theoretically) triumph. Therefore, to help dispel the self destructive campaign of dumbing down our scientific future, here is the Index to Creationist Claims.

Its an incredibly detailed point by point refutation of all the failings, false statements and inaccuracies of the personal religous belief system of Creationism and Intelligent Design.

Sep 23 2005

Profit margin on Apple products

Market research firm iSuppli set out to satisfy the curiosity by
buying the $199 2-gigabyte version of the Nano and tearing it apart.
The verdict? It costs Apple $90.18 in materials to build the unit and
$8 to assemble it, leaving a profit margin before marketing and
distribution costs of about 50%. That’s consistent with the margins
on earlier iPod versions and serves as a reminder of what a profit
machine the iPod family of products has become for Apple since it was
introduced in 2001.

Margins on the computer-maker’s other products tend to be slimmer. An
iSuppli teardown of the Mac Mini found the cost of material and
manufacturing on that computer to be about $283, leaving a gross
margin of 44% before marketing and distribution costs.

WINNERS AND LOSERS. “Historically, Steve [Jobs] won’t accept
anything less than 20% gross margin on any product,” says Creative
Strategies analyst Tim Bajarin. “In the rare cases when the gross
margins have dropped below that, it has been a fluke.” Apple has sold
some 16 million iPods in the first nine months of fiscal 2005, and 21
million since its inception. Thus far in fiscal 2005, the iPod has
brought in $2.6 billion in revenue, accounting for about 25% of
Apple’s total.

Another set of questions answered by iSupply’s exercise: Who supplies
Nano’s components — and who got cut out of the pie? The analysis
found San Jose (Calif.)-based Cypress Semiconductor (CY ) to be a big
winner, at the expense of Synaptics (SYNA ). Synaptics specializes in
touch-sensitive technology that forms the basis of the click wheel
used to navigate between songs on previous iPods.

But Santa Clara (Calif.)-based Synaptics lost out to an Apple-
designed click wheel that has contains a 55-cent chip from Cypress,
says iSuppli analyst Chris Crotty. The Cypress chip appears to save
Apple about 45 cents on a comparable Synaptics chip, which costs
about $1, says David Carey, president of Portelligent, a research
firm that has analyzed other iPod models.

CHIP LEADERS. Snagging the chip inside the Nano is important for
Cypress, says Crotty. The coup is likely to boost interest in the
company’s programmable system-on-a-chip family of components that are
used widely in products ranging from lamps to exercise equipment, he
notes.

The Nano also marks the return of longtime iPod audio-chip supplier
PortalPlayer (PLAY) in Santa Clara, Calif., which has supplied the
audio chips for most of Apple’s iPods over the years but missed out
on the iPod Shuffle, released in January. For that product Apple used
a chip from SigmaTel (SGTL ), based in Austin, Tex.

Crotty says SigmaTel’s chips have often been the favorite of
companies building MP3 players that store music on flash memory
chips, which consume less power, while PortalPlayer has been favored
by companies whose players use hard drives. Before the Shuffle and
Nano, all iPods used hard drives for storage, so PortalPlayer was a
natural fit.

MEMORY HOG. Now, Apple’s decision to use PortalPlayer for the Nano
shows it’s making inroads with customers whose devices rely on flash
memory. “PortalPlayer ruled with hard-drive players, and Sigmatel
ruled flash players,” Crotty says. “Now, we’re seeing them invade
each other’s turf.”

Apple’s choice of memory supplier is making perhaps the biggest
waves. Having tied up 40% of the so-called NAND flash memory output
of South Korean chipmaker Samsung (see BW Online, 8/26/05, “A
Memorable Deal for Apple and Samsung?”), Crotty estimates that Apple
is paying $54 for 2 gigabytes worth of memory. That would cost any
other manufacturer $90, giving Apple a discount of about 40%.

The arrangement not only makes it tough for other manufacturers to
compete on price but will also cause them huge supply headaches,
since Samsung is the world’s biggest flash memory vendor. “How do you
compete if you can’t get the memory you need?” Crotty says. “And even
if you can get it, you’re not able to sell the volume needed to
negotiate a better price.”

NARROWING THE FIELD. Giving Apple a break — and in the process
squeezing other MP3 player manufacturers — also benefits Samsung’s
own MP3 player business, Crotty says. “The market is heading toward
consolidation, with its own big three, Apple, Samsung, and Sony,” he
says.

As of 2004, the top three manufacturers of flash-based players were
iRiver, Creative Technologies (CREAF ) and Samsung, according to IDC
analyst Susan Kevorkian, with Sony (SNE ) lagging far behind the
pack. Other companies in the business include Dell (DELL ) and
Matsushita (MC), which sells players under its Panasonic brand.
Still, some are feeling heat. D&M Holdings, owner of the Rio brand,
recently announced it was getting out of the business.

All in all, it looks like the Nano may have extended the iPod’s reign
– and given a major boon to select suppliers.

Sep 17 2005

Health costs

Starbucks Corp. will spend more on health insurance for its employees this year than on raw materials needed to brew its coffee, the company’s chairman said.

Isn’t that a pause for thought?

Sep 16 2005

Temple going to the dogs

“The newest acolyte at a temple on an outlying South Korea island is a dog who has learned to sit, stay and perform Buddhist prayer rituals alongside the monks.

Monks at Buljang Temple on Chindo island off the southwest coast said the stray called ‘Hama’ now joined them at prayer.

Hama — Korean for hippopotamus — follows monks into the temple and bows in the same manner for prayer, a temple official said. Some local Buddhists, who believe in reincarnation, are wondering what Hama may have been in a past life.

‘Since about a month ago, when the monks were performing a ceremony paying respect to Buddha, they were joined by this one-year-old dog,’ the official said by telephone.

Hama is one of a traditional Korean breed called chindo, which originated on the island.

Hama’s exploits have made the national news in South Korea and attracted a lot of curious onlookers to the temple, where about 30 other stray dogs live.

‘The dog bows just like a monk,’ said college student Park Sang-jin, who visited the temple after hearing about Hama.”

Sep 16 2005

Micropayment on the web

A Forrester Research Inc. analyst thinks Google’s plan to facilitate payments on the Internet may go much further than helping people sell stuff at virtual yard sales.

Google Inc.’s AdSense service already puts links on Web pages, why not add micropayment processing?

“Google (GOOG: news, chart, profile) could offer a subscription ‘pass’ that grants users access to premium content on multiple sites, with each site getting a share of the payment based on usage,” she wrote. Such an idea for bundled Web subscriptions was suggested several weeks ago by Martin Nisenholtz, senior vice president for Digital Operations at The New York Times.

The Forrester principal analyst reasons that with millions of producers of Web logs and podcasts wondering how to make some money, Google’s payment services venture might be a solution.

In remarks Tuesday, Google’s CEO, Eric Schmidt, confirmed the company is working on payment services which are “a natural evolution of Google’s existing online products and advertising programs,” according to a report by the Los Angeles Times.

A service like this could provide serious competition for the current standard of “free” content paid for by advertising revenues. It is not clear to me how many people see this coming but I am guessing it is not too many yet.

Sep 09 2005

Rail Line to Tibet Is a Marvel

The line heads south for a 685-mile run to Lhasa, the capital of Tibet, over what is often called the roof of the world. For long stretches the railway, which is fast nearing completion, will operate at altitudes higher than many small planes can fly, huffing and puffing far above the fragrant mists that roll down the Himalayan slopes. Indeed, the train, whose engines will need turbochargers just to get enough oxygen to run, will often soar above the clouds.

One day soon, perhaps as early as next year, the train, equipped with cars pressurized like jet planes, will make its maiden voyage on its final southward route, chugging across permanently frozen terrain and making stops along the way at stations like Tangula Shankou, which at 16,640 feet will be the world’s highest. For those bored with the scenery, or perhaps just dizzy, there will be other diversions: first-class accommodations include health spas and fancy restaurants.

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