Denki News

October 7, 2007

My belated reaction to the iPhone price drop

Filed under: iPod & iTunes — icruise @ 5:51 pm

I usually agree with with John Gruber over at He’s got a good head on his shoulders. But I can’t agree with his consistent defense of Apple’s recent $200 iPhone price cut.

In a recent entry, he points out what he thinks is an inconsistency with Silicon Valley Insider’s position against the iPhone price cut and their suggestion that Hannah Montana charge $200 instead of $63 for her concert tickets. The idea is that because the tickets are being scalped for prices over $200 anyway, it’s better if the money went to the people actually involved in making the music, rather than scalpers. Gruber says that this is what Apple did with the price of the iPhone. I’m not going to touch the issue of whether tickets should be more expensive (I can’t help but think there are better ways to stop scalping). But I do take issue with the idea that Apple’s pricing strategy was somehow a reasonable choice designed to keep demand from outstripping supply.

Chris Biagini has summed up my reaction to the price cut perfectly (emphasis is mine):

Those of us who’ve already bought an iPhone knew full well that they’d be hot sellers, and that Apple was making a killing off of them at $599. But this price drop shows that Apple was making more of a killing than anyone could have possibly imagined, more than anyone could have possibly thought was fair. I mean, you could probably figure out the raw cost of a pork belly, but an iPhone is a little harder to pin down. In other words, everyone assumed that the iPhone was priced more-or-less as fairly as Apple’s other products and made our valuation decisions accordingly—and we were wrong.

Assuming that the iPhone and iPod touch are now priced more-or-less as fairly as Apple’s other products, this means one of two things happened:

1. Apple gambled on the crazy-high initial price tag and lost.
2. Apple knew $599 was not sustainable if they wanted to meet their sales goals, and they knowingly screwed over the early adopters.

Either way, Apple tried to screw over customers—it’s just a matter of how many. Personally, my money is on Scenario 2. Scenario 1 would require that they underestimated the iPhone’s sales potential. Given Apple’s experience in introducing high-demand products, this seems unlikely. That leaves Scenario 2, which I think is actually a little worse. Both send a big “Thanks, suckers!” to early adopters, but Scenario 2 is just a little more evil.

Remember how Steve Jobs bent over backwards during his keynote to emphasize that it was reasonable to charge the same for the iPhone as what people paid for a smartphone + iPod? I myself defended the price, citing the long development time and other costs that Apple had to recoup, and Gruber himself said that if anything it was too low). We’d never seen anything quite like the iPhone, so it was hard to compare it to other products. We thought we were paying a fair price for the product (fair, at least, compared to Apple’s other product lines). The bottom line is that the early iPhone adopters had no idea that we were paying a $200 premium for getting the iPhone a few weeks earlier than everybody else.

However, I disagree with both Biagini and Gruber about one thing. I have a lot of trouble believing that Apple had a price drop (at least of this magnitude) planned from the start — even if they say so themselves. Not because Apple is too nice to screw over their customers, but because they are too smart not to know how people would react. I think it’s likely that iPhone sales simply weren’t as good as they had hoped. Yes, they were selling well, but not “Nintendo Wii” well, and not as well as you might have expected given the amount of excitement before the launch. Apple knew they couldn’t go into the Christmas season with sales as they were (and keep in mind that most of the hardcore Apple lovers had already bought theirs, so if anything sales were going to go down from the initial numbers). They decided that a drastic price cut was their only choice. I just can’t believe that Apple would plan to slash the price only two months after the iPhone’s release if it really had been meeting all of their sales goals. It’s never been done in their history, and it would take a remarkable tone deafness to their customer base not to know how a move like this would be received by their users and by the press. I imagine that they had the $100 store credit thing as a backup plan in case the reaction was worse than expected (and indeed, it threatened to overshadow the introduction of the new iPods.

By the way, I still love my iPhone (and the iPod nano that I paid for mostly with the $100 store credit is also nice).


July 2, 2007

iPhone blog

Filed under: iPod & iTunes — icruise @ 4:47 pm

I’ve been writing a “blog” over at the MacNN forums where I am a moderator about my impressions of the iPhone, including waiting in line, unboxing, activation, and use. Give it a look if you’re still not sick of all of the iPhone coverage on the net.

April 3, 2007

Why the DS outsells the PSP

Filed under: Video Games — icruise @ 4:03 pm

Why does the DS outsell the PSP? Lots of people have theories. They say there aren’t enough good games (something that a glance at the top rated games for each system will disprove). Or maybe they say it’s too expensive. And people will go on about how innovative DS games are in comparison with many PSP games. But the reality is that most people play crap like Hannah Montana DS or the Suite Life of Zach and Cody. It’s not the quality of the games that makes the real difference here. I think the answer is simple. At least to some extent, Sony misread the portable game market.

A huge number of Game Boy owners were kids. Why? Because the system was affordable, portable, and under their complete control. And of course, this also led to a lot of games being produced that appealed to kids. Nintendo pretty much kept this up with the DS (although it was originally a little on the large and pricey side compared to the Game Boy).

Sony on the other hand, went a different way. They priced their portable machine well out of the reach of most kids, and made games that were not very accessible to them as well. $40 for a game is a lot of money for a kid, and with a few exceptions, the PSP just doesn’t have the kind of games that kids like. Even games that should be kid friendly, like LocoRoco, are actually a bit on the hard side. The result is that the PSP is a system mostly for older teens and adults. Contrast this with the DS, which can be enjoyed by BOTH young kids and adults. Maybe Sony thought that the market for high-end portables with multimedia capabilities was higher than it actually was. Maybe they overestimated the appeal of playing console-style games on a portable. But I think it’s clear that alienating children as a market was a mistake.

In short, I think the biggest reason behind the difference in sales between the two systems is simply that the PSP just isn’t very kid-friendly. In fact, if you removed kids from the equation, it wouldn’t surprise me if the two systems were nearly even in sales. It’s possible that the decision to target an older market was the correct one to make, however. If Sony had tried to compete directly with Nintendo for kids’ gaming dollars, they might have failed miserably rather than becoming a respectable second-place player in the portable gaming market.

Thoughts? (I personally prefer the PSP to the DS, but I think Nintendo did a lot of things right in marketing the DS.)

March 27, 2007

Xbox 360 “Elite” — The Black Xbox 360 is a reality (for $479)

Filed under: Uncategorized — icruise @ 11:35 pm

The rumored black Xbox is now official. It’s basically the same as the Xbox 360 Premium, but with a 120GB hard drive and HDMI. And it’s in black. It doesn’t use a smaller, cooler CPU, and doesn’t have integrated wi-fi or HD-DVD.

The thing is, it actually makes the 20GB PS3 look like a bargain. For an extra $20, you get a Blu-ray player, after all. I personally think this is the wrong direction for MS to go with the system. Adding a “deluxe” model like this isn’t going to strike fear into Sony’s heart. Not when their low-end model already beats it (with a few exceptions, like storage space, of course). They need to be making their system even cheaper.  I figured MS was going to try and be aggressive about their pricing, maybe introducing this model at the same price point as the current premium model and getting rid of the core system.

BTW, the price for the 120GB HD by itself is $179…

March 24, 2007

Folding@Home: PS3s beating all other platforms combined

Filed under: Technology, Video Games — icruise @ 1:59 am

A couple of days ago, Sony released version 1.6 of the PS3 software, which included the ability to run the Folding@Home client. Folding@Home is a project run by Stanford university that uses the combined power of thousands of computers to perform calculations that would otherwise take expensive supercomputers months or even years to complete. The data is part of research on curing diseases like Alzheimer’s or Parkinson’s (more information can be found in this CNN article). The amazing thing is that since the PS3 has been added to the mix, it has quickly pulled ahead of all other platforms. As of this writing, it had almost twice as many TFLOPS as all of the other platforms combined. That’s about 19,000 PS3s beating out about 200,000 other computers! I’m currently letting my PS3 fold when it’s not in use and I suggest anyone who has one do the same.

EDIT: Just to be fair, it has been pointed out to me that the PS3 and PC clients aren’t doing precisely the same thing. The PS3 is a lot faster than the PC at the work that it is being given, but the PC is doing some calculations that the PS3 can’t do.

March 12, 2007

Buying songs from the Japanese iTunes Store

Filed under: iPod & iTunes, Japan — icruise @ 3:06 pm

I’m not a big fan of what is commonly called “J-Pop” but when I lived in Japan I made a conscious effort to find some Japanese artists that I did like. I rented a lot of CDs (yes you can rent CDs in Japan — a good thing, since they are close to $30 apiece) and eventually found quite a number of artists that a liked a lot. But when I moved back to the US, I was pretty much cut off. It is possible to import Japanese CDs to the US, but it’s expensive and you certainly can’t do much experimenting with new bands that you’ve never heard of before.

When the iTunes Music Store opened in Japan, I had hoped that it would allow me to buy Japanese songs, much as the US version of the iTS had helped me keep in touch with American music while I was in Japan. But unfortunately, they required you to have a credit card with a Japanese billing address just to open an account. You can listen to the 30-second previews, but not download anything — even the weekly free songs.

However, I recently found out that if you buy an iTS prepaid card from Japan, you can use it to create a Japanese iTS account without any credit card at all, allowing you to download Japanese songs. There are even places on the net (such as J-List) that sell Japanese cards for this express purpose. There are instructions on the J-List page telling how to go about creating an account with a prepaid card. You need to have the card first, though, since if you try and create an account without it, it will insist that you have a credit card. The only tricky part is that you have to have a Japanese address of some kind (even though it will likely never be used). I don’t know how strict the system is about putting in a real address, but J-List has said that you can even use their address as a dummy. However, I couldn’t find their Japanaese address on the site, though, so you might need to contact them if you want to try that.

Anyway, I can finally download Japanese music now, so I’m happy. Here are some of my favorite Japanese artists. Clicking the links will take you to their iTS page. Unfortunately, the iTS doesn’t have the greatest selection for some of them — I have 13 albums by my favorite band Spitz, and only one of them is on the iTS. They do have a couple of greatist hits albums that have some of their best stuff, though. There are also some major artists that aren’t on the iTS at all, such as Mr. Children and the Southern All Stars.
Utada Hikaru
Yamazaki Masayoshi
Inoue Yousui
Makihara Noriyuki
UA (prononuced Ooh-Ah)
Chage and Aska
Yaida Hitomi

January 14, 2007

Is the PS3 really overpriced?

Filed under: Video Games — icruise @ 11:11 am

If you spend any time at all discussing the next-gen consoles, someone is bound to bring up the idea that the PS3 is overpriced. But is that really the case? There’s no mistaking the fact that it’s expensive — too expensive, in fact for many people to afford. But of course that’s also true of the Xbox 360. It’s too bad that this generation of game consoles (with the exception of the Wii) seems to be out of reach of so many. I think this is a big reason why the portable systems and the PS2 are so popular. But is the PS3 really overpriced? (More after the jump.)


January 10, 2007

A quick next-gen system comparison from someone who owns all three

Filed under: Video Games — icruise @ 3:09 pm

I suppose having all of the consoles in a particular generation isn’t that unusual, but it’s also true that most people only buy one console (and maybe one portable). So I thought I would write something from the perspective of someone who has owned and used all of the next-gen systems. I have a longer piece on the back burner examining each of the consoles in detail, but I don’t know if I’ll ever get the time to finish it, so I thought I’d go ahead and get this abbreviated version out while it’s still topical. (More after the jump.)


iPhone announced!

Filed under: iPod & iTunes, Macintosh — icruise @ 6:57 am

By now you probably know that yesterday Apple announced the iPhone, a combination iPod and smartphone. I for one am still in shock, since this is the first time in a long time that Apple has delivered something that makes even the rumors and mockups look bad. Let’s take a look at it. (More after the jump.) (more…)

December 12, 2006

And the top-selling video game system for November is…

Filed under: Video Games — icruise @ 9:11 am

This article at Next-Generation gives the sales figures for video games in November:

PS3: 197,000 units
Nintendo Wii: 476,000 units
Xbox 360: 511,000 units
PS2: 664,000 units

Obviously the PS3 and Wii sales are constrained by supply — they’ve both sold out completely. The interesting news here is that the PS2 is actually the top selling home console. I think its price — about half that of the next cheapest console (the Wii) — is a major factor, combined with its unmatched game library.

Sales of portables were as follows:

PSP: 412,000 units
DS: 918,000 units

Obviously the DS is doing very well, but the PSP’s sales are also very respectable, having increased almost 50% from the same time last year. One thing the article doesn’t mention is Game Boy Advance sales. I’m very interested to know how many GBA SPs and Micros were sold. I’m sure it’s in the hundreds of thousands of units, despite the fact that the system is clearly in its last days.

EDIT: This article has an interesting paragraph that answers my question:

“Nintendo hardware outsold all others combined. Nintendo sold 476,000 Wiis, 918,000 Nintendo DS portables, 641,000 Game Boy Advance handhelds and 64,000 GameCube consoles that have them selling 2.1 million of the 3.9 million systems purchased for the month.”

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