Very interesting article by Peter Kafka in AllThingsD this morning about Time Inc.'s frustration with Apple. Apparently Time executives are mystified as to why Apple won't give them control to sell their own subscriptions via an app for the iPad.

Well, I'll tell you why: Apple loves to control the billing relationship. They don't want to give it up. This was the brilliance of iTunes and how they ended up taking control of digital music from the music industry. It was the music industry's huge strategic error. Apple knows that if they control the billing relationship, they control the access to the customer, and therefore can dictate the terms of just about any ecommerce relationship.

Why Time Inc. executives are so "mystified" by this is a mystery to me. Apparently their magazine executives are not talking to executives in the same company that got reamed in the music business. Apple wants to control billing, they want to control pricing, and they want to control the consumer. Period. You want to try to mess with that? Take a hike.

This is one reason why I don't think the iPad will be the "savior" of the media industry that everybody has made it out to be. Unless Apple opens up, and starts sharing a bigger piece of the pie with content and applications producers, it will be the same movie all over again.

The Wall Street Journal pay survey is a fascinating read. My initial impression was surprise that Steve Jobs was only number five. But the thing that shocked me the most is that Barry Diller, the CEO of IACI, is number two on that list, having made $1.14B over the years 2000-1010.

This is egregious. Not because Barry Diller is incompetent. He's a a smart guy, and a media visionary. It's because it's way out of line with what his company did. If you include Expedia shares, an IACI spinoff, IACI shareholders lost 18% over the decade period in which Dillar's compenstation was measured, according to the Wall Street Journal. In fact, IACI alone stock fell 80% during the time that Barry Diller made $1B.

Don't you love the way that Apple dominates the news? Steve Jobs could put out a press release saying he's going to have his teeth cleaned and it would dominate the news flow on Financial TV. Oh really? Who's the dentist? Will this delay a product release?

Yesterday, of course was the release of the new iPhone 4, which had every tech pundit and their cousin covering every angle. For that reason, I'll keep this post short, giving you a few links to coverage and a few thoughts for what it means for Apple.

The main points of iPhone 4:

• It's slimmer, .37 inches vs. .45 inches for the prior iPhone (PC World review)
• It's got video calling (mirror.co.uk).
• It's got a sharper screen. And a Gyroscope (CNN)
• Actually, they are calling the screen a "retina display," because its density of 326 pixels per square inche allegedly rivals the human retina. Yeah, right Apple (Tom's Guide).
• IOS 4, which includes support for multitasking, iBooks, and other stuff (Mashable).

Okay, so what's it all mean? What's interesting to me is the statement that Apple has made with its last two releases: iPad and the iPhone 4. Have you noticed that Apple and Steve Jobs in particular claim to be "driving industries forward." For example, the message of the iPad as that it will enable the publishing industry to function in the digital world.

But rather than focus on whether or not the iPhone is driving some industries forward I can't help but think how it's driving the telecommunications industry backward. What do I mean by that? It is becoming more evident that the iFranchise is making the telecommunications provider increasingly commoditized and irrelevant.

What's AT&T's role in the iPhone franchise other than to connect the thing to a mobile network and then disappoint users. is AT&T adding any other value at all?

If all of the innovation is coming from Apple, what value are the service providers adding? What does this mean for the future of the mobile telecommunications industyr? Check out the videoconferencing component of iPhone which uses a WiFi connection and could certainly accelerate the trend of Internet communications platforms cannibalizing service provider networks.

Think about that, AT&T: Just look at what's happened to Apple's shareprice when compared to yours. Clearly they are the innovator and you are now the commoditized service provider.

 

Now, who has derived the most value out of the iPhone franchise?

I'm in the media business. Hahahahahaah. Is that a sick joke? Is there even a media business any more? Last I checked it looked like one of those smoldering post-napalm scenes from Apocalypse Now.

No, you certainly can't hammer on a typewriter next to Cary Grant and enjoy a two-martini lunch and a union paycheck anymore, I will tell you that. Those days are over.

Why even bring this up? Because apparently Steve Jobs is telling the media world they need to cut their prices to survive. Hahahahah. The prices are already cut, Steve. MOST STUFF IS FREE, geddit?! We're already broke, how does cutting prices help?

Looks like it's Steve Jobs Wednesday here in the tech media world. Lots of stuff coming out of the Wall Street Journal's D8 Conference, where Jobs spoke at length. There were some especially interesting comments on the iPhone, the iPad, and the service from AT&T.

Jobs downplayed his knowledge of "how telecom networks work," but he did answer a question that we all want to know the answer to: When will AT&T fix its iPhone service issues? Much of this involves around the challenges of high-speed mobile data, especially via the backhaul networks. This is the topic of our new report, "The Mobile Data Deluge."

As a long-time journalist, I know that the media world is hopelessly slanted toward negative news. But unfortunately, this week's bad news is all real -- and not exaggerated. Greece is melting down, sovereign debt issues plague the globe, and now we have a massive environmental and economic catastrophe in the Gulf of Mexico. Can you cut us a break, boss? Here's a rundown on what's going on on this dreary Monday:

• The Gulf oil spill will probably take months to contain (Washington Post)
• BP says it's ready to pay (Reuters) But it also says it's not to blame... figure that one out.
• Will the spill affect Obama's new "drill, drill, drill" policy?(CNN) That's what Barry gets for pretending to be Ronald Reagan.
• Deepwater Horizon had a history of problems, before the spill (Nola.com)
• Apparently blowout preventers fail frequently... (Kansascity.com)
• On to Greece... The Baklava Bailout is finally here (BusinessWeek). That's the slowest cooking Baklava, ever.
• Germany's share is $30B (Associated Press). And Angela Merkel can say goodbye now.
• Apple iPad 3G estimated to have sold 300K on launch weekend (Apple Insider). AT&T engineers trying to figure out what to do now.
• Is an anti-trust investigation at hand for Apple's app world? (New York Post). Steve Jobs' squeaky clean, integrated world may be just a little too integrated.
• Roger Ebert hates 3D (Newsweek). Funny, given that he's not exactly 2D.
• Is IronMan 2 about Bill Gates and Steve Jobs? (TechCrunch) If so, I'm glad they went with an allegory, instead of real life.
• A detailed analysis of Groupon (TechCrunch).

The Black Swan is one of my favorite books, if only because it proves the absurdity and unpredictability of life. It ratified something I had suspected for many years: Nobody has any idea what's going to happen next. Take the volcano ash, for example. I don't imagine a lot of people this week thought  that they could wake up on Thursday to find that a large volcanic eruption in Iceland had pretty much shut down most air travel in Europe... and that it might extend through the weekend. Just like  CEO of Bear Stearns played golf, having no clue that his company could be vaporized in a matter of days. Whoops! Yes, Nassim Nicholas Taleb is onto something. Black Swans happen all the time! So let's review the strange and unpredictable things that are happening on this news day:

• The volcanic ash cloud is spreading and getting worse, wreaking havoc on European air travel.
• The ash cloud may prevent President Obama from attending the state funeral for late Polish President Lech Kaczynski (Associated Press)
• Obama says that we will end up on Mars, in his lifetime (SFgate.com). Funny he can't even get to Europe but thinks we can get to Mars.
• What's up with Larry King and 8 wives? See this video clip: Why the ladies Love Larry King. Um, the money? The fame? um... I just dunno.And, by the way, somebody says he didn't have a prenup.
• The hottest blondes in sports (Bleacher Report). I dunno, I realize this has nothing to do with anything. It's Friday. I just felt like I had to link that that.
• The HTC Droid Incredible will be out on Verizon by the end of April (PCWorld).
• How about that meteor (Telegraph). Or was it something else?
• Headline of the week: "'Tyrant King' Leech Discovered, Attacks Orifices" (National Geographic). You just have to see the picture. By the way, don't look if you haven't had breakfast.
• Don't you hate it when you find a Python in your hotel room? (Associated Press). In the toilet!
• "Has Steve Jobs gone mad?" (Fortune). Another great headline.
• The SEC is suing Goldman Sachs (Bloomberg). Good luck, SEC. You couldn't even catch Bernie Madoff.
• The Bank of America has returned to profitability (Bloomberg). That has a nice ring to it. We hope it's real.
• China has adjusted policy on home ownership, requiring larger down payments (Wall Street Journal). You think they don't learn from us?

If there is a technology guru and review who can make a break a technology's future with a few keystrokes, it's Walt Mossberg. The veteran gear reviewer for the Wall Street Journal is now out with his take on the iPad, and he calls it nothing short of revolutionary. Oh boy. This should uncork any remaining iPad hype that hadn't already boosted the press  into oxygen-depleted zones of the atmosphere.  The iPad is now akin to the discovery of the wheel.

It's pretty clear that the Apple and Google fistfight is coming. This should be fun to watch -- kind of like watching two preppy investment bankers go at each other in the corporate parking lot. A little background: I think the defining moment came last summer when Google CEO Eric Schmidt resigned from Apple's board. Today, developer Tim Bray showed us why Google is gearing up for a fight with Apple with Android, and why it could be worthy.Both Google and Apple are headed for a collision course because they both want a large piece of mobile apps and mobile services. I've been doing some research, and Android is real, and it's coming soon (we'll have a comprehensive report next week!). Here are my top ten reasons why I look forward to this: 10) Fawning press reports on the iPhone and Google get boring. 9) It would be interesting to watch the iPad fail, just to mix things up for a change. Eight) Google has a point: Apple's system is far too closed. 7) Apple has a point: They make better user interfaces than anyone. Period. 6) It would make the world seem less obvious. 5) Googlers need to prove they can do something other than Adwords. 4) It doesn't involve Redmond. 3) Maybe there's a chance we get to see Eric Schmidt go Steve Ballmer on us? 2) We'll get cheaper phones. 1) It's the battle of the arrogant preppies! Somebody will lose!

Good morning! Welcome from Big Sky country, where I'm proud to say we have an account surplus. That's petty nice to know in this world of red ink, where entire nations are going the way of Enron. The news these days appears to be dominated by two things: 1) Apple and 2) Paul Volcker. Not necessarily in that order. [caption id="attachment_932" align="alignleft" width="300" caption="Don't mess with Paul Volcker"][/caption] Many of our younger readers may not remember Paul Volcker, as he became Chairman of the Federal Reserve in 1979, back with the Buick LeSabre was a popular vehicle. My uncle had a Buick Lesabre. Fine ride.But the 1970s were not a lot of fun, economically. Good music mind you. Mr. Volcker is one of those people that is "widely credited" with helping to cure many of the economic ills of the 1970s, namely, "stagflation," where there was little growth in the economy but lots of inflation. The worry is that we are entering a similar period in which the government is trying to solve a recession by printing a whole lot of cash. Will Volcker's technique from the 1970s  -- clamping down on banks and jacking up interest rates -- stave off a the reappearance of the 1970s? Big debate. It is interesting that Volcker is winning out in the battle of the Obama Adminstration's economic advisors, with his hawkish approach to bank reform. [caption id="attachment_933" align="alignright" width="614" caption="1979 Buick LeSabre"][/caption] He is testifying before the Senate today and it will be very interesting to see if the dummies in Congress actually listen to this sensible man. Here are just a few of the stories circulating this morning:

• Volcker says hedge funds should be allowed to fail (Bloomberg).
• WSJ Primer on the "Volcker Rule (Seeking Alpha via the WSJ).
• Chris Dodd may kill Volcker Rule (NY Mag). Of course he will. Fiscal discipline isn't any fun if you are in Congress.
• Davos Bankers Seek One Message on Volcker Rule (New York Times).
• Volcker to Spell Out the Future of Banks (BBC). It might go something like this: They have to stop looting and pillaging with government funds.
• Battle over the Volcker Rule Set to Begin (WSJ).

Okay, now let's shift gears from one 1970s/1980s icon to another. Apple Computer. Remember them? They brought you the "desktop" interface, which was subsequently stolen by Microsoft. [caption id="attachment_925" align="aligncenter" width="753" caption="Apple founders Steve Jobs and Steve Wozniak"][/caption]

Now, interestingly, they are bringing to market yet another interface -- which has been floating around for some time -- in the form of the tablet computer. The wires and bloggers this morning are abuzz with the news that there are already many more tablet computers in the works, with all sorts of new features such as cameras  and whatnot:

• Apple rumored to have another tablet in the works (TechCrunch). No way, they're working on more stuff to sell?
• IPad Camera rumor becoming a reality (Mission: Repair Blog). Funny, this is what the world has come to. Photos of miscellaneous electronics parts making national news.
• A first taste of what the Google tablet's interface will look like (TechCrunch).
• A little chip designed by Apple itself (New York Times). Apple is so crafty. Design your own chips. Cut your chip suppliers out of the margines. Vertical integration at its best.
• You biggest Apple iPad Questions, answered (Fox News).

Well, that's all I got for you today, a whole lot of Volcker and Apple. Think there's something else going on in the world? Go find out for yourself.