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Vista Achieves Touted "Wow" Effect, Albeit Through Massive Price Drop
Computers | Feb 26, 07
The top of the line version of Microsoft's new operating system is starting off life with a fall in price best described as "rock-like". While sooner or later this decline should abate, it's an open question whether this species of Vista has yet found even a temporary bottom.
The OS in question is the "full" DVD version of Microsoft Windows Vista Ultimate, currently the most popular operating system on PriceSCAN.com. Just following the Vista launch five weeks ago it was going for at least $425, and now may be had for just shy of $340, a decline of some 20% from the introductory price (see graph below).
Time Period: 1/15/2007 through 2/19/2007
Each tick mark represents one week
Red = High Price, Blue = Average Price, Green = Low Price
Interestingly, the price of the full DVD version of Microsoft Windows Vista Home Premium has shown no such sharp decline, with the lowest vendor price on PriceSCAN falling only about 2% over the last month.
In any event, if you need Vista's business applications but also want the media center capabilities of Home Premium, the Ultimate version will get you there. And, as a reward for waiting the past few weeks to make your purchase, you can now do so at a substantial discount to the intro price. Just goes to show that when it comes to new products, it sometimes pays to wait, even for a very short period of time.
Posted by jeffrey.trester at 9:09 PM | Comments (0) | TrackBack
How Steve Jobs Could Show He's Sincere About Eliminating DRM
Electronics | Feb 12, 07
If Apple wants to show it sincerely desires a world without digital rights management (DRM), it could offer to distribute DRM-free downloads right now, for any act or label that wishes to avail itself of that option.
Steve Jobs' recent call for record labels to eliminate DRM on music downloads would undermine a key competitive advantage of CDs, and that may be why many in the music industry are so resistant to the idea. So long as music bought over the Web is saddled with anti-copying software, it remains an inferior product to music purchased on DRM-free CDs. To understand why the labels prefer a CD-based world, you have to go back to the 1970s, when the industry discovered the amazing economies of scale inherent in promoting the albums of a handful of "superstar" acts, particularly in the wake of "Frampton Comes Alive" (the architects of this strategy and their effect on creativity are chronicled in Fredric Dannon's appropriately titled "Hit Men" ). In this model, the album format forces the purchase of many songs just to obtain the one track the consumer might actually desire (in fairness, some artists also prefer the album format as a way to offer an integrated vision over more than one song). Further, the costs of vinyl and, later, CD album production, coupled with the distribution relationships between the labels and physical store retail chains, presented formidable barriers to entry for independent record companies and musicians. This gave the majors the ability to restrict the number of artists they released. By eliminating the need to back a wide range of acts, promotional monies could be deployed more efficiently, at least from the standpoint of profitability.
Now contrast this situation with a market dominated by downloadable music. Songs are purchased a la carte, and distribution is controlled by internet retailers with potentially weaker ties to the labels. Production barriers to entry are sharply lower, a factor amplified by the emergence of inexpensive studio technologies and software like GarageBand. Consumer choice is expanded across a wide spectrum of artists, resulting in a highly segmented, even atomized market. A lot more artists may make a living, but at the expense of the economies of scale associated with the star system. In short, not a great deal for a major label.
However, as Jobs points out, only a small fraction of music residing on iPods are actually purchased downloads; much of the rest has been ripped from DRM-free CDs. If DRM-free music becomes available for download, eliminating the competitive advantage of CDs, it's likely the slowing rise of this mode of distribution will begin to accelerate again, at the expense of disks. This may explain the RIAA's counterproposal of having Apple make its FairPlay DRM standard available to other manufacturers and e-tailers, thus preserving the DRM-crippled nature of downloaded music.
As of this writing Apple has not embraced this suggestion, let alone the proposal I made at the beginning of this piece. Jobs has reason to try to turn attention from Apple's own DRM to the industry's policies, as members of the European Union are objecting to the inability of consumers to use music purchased from iTunes on non-Apple players (the EU also has issues with Apple offering less favorable royalty terms to independents versus the majors). Yet there are tentative signs that Cupertino's vision may carry the day. Late last week came word that the RIAA's united front may be crumbling, as EMI was said to be soliciting bids from online sellers for the right to deliver music from its catalogue free of DRM. It's possible that the majors see the handwriting on the wall, as they watch CD sales decline as even DRM-hobbled download purchases continue to grow. The rise of indie bands promotion on MySpace through downloads free not only of DRM but of any cost whatsoever must surely give these firms pause. In the end, they may have to adapt to a world of greater choice, trading the star system's efficiencies for the benefits of Web-enabled viral marketing.
As I said at the start, Apple could go a long way to making a DRM-free world a reality if they would allow artists and labels to go DRM-free right now. It could do this in the MP3 format, thus allowing use by non-iPod consumers. And, while they're at it, they could offer indies the same royalty sales deals they offer the majors.
Steve?
Posted by jeffrey.trester at 9:02 PM | Comments (0) | TrackBack
"So I'll Take Vista, And Guess I'll Need More RAM, And Some New Peripherals – Aw, Just Give Me A New System…"
Computers | Feb 5, 07
Like global warming, Microsoft Vista took a long time to arrive, but we're finally feeling its impact. Now it's time to figure out the pros and cons, and how best to deal with it.
Gates and Co.'s new operating system has some serious advantages. There's no question the Aero interface is pretty. Windows are displayed in 3-D perspective and sport translucent borders so you can more easily shuffle through them. Users who envy the cool aspects of OS X will find features to cheer, like Explorer's fully integrated search bar and thumbnails with live miniatures of windows. Critics have praised the Photo Gallery's organization and editing features, as well as easier networking.
But many of those same critics have pointed out that drivers for older peripherals are hard to come by (especially for the 64-bit version). Unsurprisingly, that cool interface comes at a price, taxing memory and processor alike. Indeed, requirements for the Premium version of Vista (which includes Aero) are significantly higher than the minimal requirements necessary for a machine to be labeled "Vista Capable". According to Microsoft, that lower standard only requires an 800 Mhz processor, 512 MB of memory and a DirectX 9 capable graphics processor. But to run Premium, the bare minimum requirements include 1 GB of RAM (and reports are you'll need a fair bit more to run many applications smoothly), 1 GHz 32-bit (x86) or 64-bit (x64) processor, DirectX 9 support with a WDDM driver, 128 GB of graphics memory, Pixel Shredder 2.0, 32 bits per pixel, 15 GB of free space on a 40 GB hard drive, a DVD-ROM drive and of course the requisite audio output and internet access.
All this may be good news for hardware manufacturers, as users of less advanced systems find their machines choke on Redmond's new offering and feel compelled to upgrade. While increased demand may tend to at least stabilize hardware prices, this space has become intensely competitive, and many firms may see this as an opportunity to grab market share even if they have to forgo some per unit revenue. So if your old system can't be made to embrace Redmond's new Vista, be sure to compare prices here before buying, as you may find some outstanding deals in the ensuing upgrade melee.
Posted by jeffrey.trester at 11:11 AM | Comments (0) | TrackBack
PS3 Postmortem?
Video Games | Feb 1, 07
The PS3 has a competitive problem. Why? Wii. I know, sounds like a line from Abbot and Costello's "Who's on first" routine, but it's true. And, to be fair, Xbox is getting a few licks in, too.
Sony sold the PlayStation 3 at a loss in a gambit to seize market share, yet even at the price of lost profits, dominance of the game space has proved elusive. Now, published reports have Sony contemplating further price cuts, and it's easy to see why. Just as the Japanese electronics giant's quarterly results were dragged down by the PS3, Nintendo has been riding high on the success of its motion-sensing entrant in the video game console sweepstakes. The Wii remote's capacity to become a sword, gun, racket etc. (not to mention a potential source of damage to humans, screens, wall, and, occasionally, pets, as chronicled by the fan site wiihaveaproblem.com) has captured the imagination of gamers. More importantly, the PS3 is about twice as expensive as the Wii, meaning by going Nintendo a parent can be a hero while spending half as much.
To be sure, the PS3 is a very advanced machine, with its Cell processor and Blu-ray HD drive. But high def fans can now by a 1080p Xbox 360 HD-DVD drive - see "So Xbox Has A 1080p HD-DVD – Blu-ray's Still A Cooler Name (You Can Tell By The Dropped Vowel)". It runs just under $200, which when added to the approximately $300 or $400 for the Xbox 360 Core or Xbox 360 Premium, respectively, is still cheaper than the nearly $700 that the PS3 – 60 GB system is going for. So even at the higher end, Sony finds itself at a price disadvantage.
Dropping the PS3's price to compete with the Xbox, let alone the far cheaper Wii, will only deepen the per unit loss Sony faces as it tries to gain acceptance for its console. But the PS3 is an important part of Sony's efforts to secure the dominance of its Blu-ray standard, and so we may soon see the firm bite the bullet, or, more appropriately, the remote.
Posted by jeffrey.trester at 12:03 AM | Comments (0) | TrackBack
