Friday, March 23, 2012

Apple can Terraform Mars

I'm not crazy, just optimistic.

As all internet people know, Apple Incorporated has a lot of money. And they're making a lot more money. Every day they make more money than you will (probably) make in your lifetime. They have so much money they're actually a little bit embarrassed about it. They have so much money that I think they quite honestly don't know what to do with it other than save it for a rainy day. At the last conference call Apple had $97.6 billion in cash and cash equivalents. But... you might say... didn't they just announce that they are going to spend all their cash? Well, sort of.

They announced a quarterly dividend of $2.65/share, with 932.4 million shares outstanding, this amounts to $2.47 billion or about 1/4 of their expected profits for coming quarters. They also announced that they will initiate a $10 billion share repurchase. But the share repurchase doesn't start until September 2013; by which time they will have accumulated more than an additional $10 billion, assuming current rates. What does this mean? It means the stockpile is only going to grow given current trends. A number of great ideas have been offered as to what Apple should do with their money: buy other companies, Bill Gates scale philanthropy, further vertical integration. I would like to propose a different idea:

Mr. Cook...

meet Mr. Musk

Mr. Musk is (arguably) the most successful entrepreneur on the planet. The co-founder of Paypal and Solar City (of which he is also currently chairman), the founder, CEO and Product Architect of Tesla Motors and the founder, CEO and CTO of SpaceX. Mr Musk's stated goal is to make human life multiplanetary, and terraforming Mars is our only real (no really!) option to make that happen right now. I think, that Musk might just be able to do it. 60 Minutes interviewer Scott Pelley recently said "‎Only four entities have launched a space capsule into orbit and successfully brought it back to the earth: the United States, Russia, China and Elon Musk" which I think goes some distance to show that the man knows what he's doing. When he first looked at space, he realized rockets were way too expensive. So he formed SpaceX and built his own. For 1/8th the cost of the competition. And then he built a bigger rocket, and a space capsule that can carry people but thus far has only carried cheese, SPACE cheese.

Musk's planned Falcon Heavy rocket can launch stuff into low earth orbit for $1000/lb. An order of magnitude cheaper than the competition. Unfortunately it's going to take a lot of pounds to terraform Mars. And when I say "a lot" I mean "the mass of a thousand nuclear reactors" kind of a lot. Also getting to Mars is rather trickier than getting to low earth orbit. But Musk thinks he can get the cost down to $500,000 a person (maybe with the help of his latest rocket idea) which means he thinks he can get the cost of transport to Mars down to about $2,000/lb.

$97.6billion/($2,000/lb) =4.88 million pounds. That might get you a few reactors.

Obviously there are other daunting hurdles both regulatory (getting FAA permission to launch Plutonium anyone?) and technical (pre-launch, orbital, or Martian reactor assembly?, how do you get it down?) obviously even $100 Billion won't finish the job. But keep in mind Apple's earnings approximate a growing perpetuity so they will continue to make more money.

Apple will die one day, all companies do. But if they really want to leave a mark on technology before they kick the bucket, I can't think of one that would be more monumental than this.

Can Apple and Elon do it? Probably not. But what if it they can?

Thursday, January 19, 2012

Grading the Crystal Ball

Last January I made several predictions regarding the tech industry in 2011 and since we've now stepped giddily into the new year... It's time to see how accurate the crystal ball was last year.

1. People come around to WP7 and Microsoft makes slow but steady gains.
Nothing saves a product like being good. And WP7 is good, their browser is still behind Google's and Apple's but the OS itself is world class and their app store will eventually catch up. If Microsoft hadn't (rightly) acquired such a poor name in the mobile sector they would probably be doing at least twice as well (from a sales perspective) as they are now, ahh how the sins of the past come back to haunt us...

Well here's a graph:

This graph has been put together after looking at data from Nielsen, ABI Research, Canalys, the NPD GroupKantar World Panel and comScore. Despite the multiple sources the data in this graph is not that solid because different organizations report data in different ways, for example sometimes sales share is given and sometimes marketshare, sometimes WP7 is grouped with legacy Microsoft mobile OSes and sometimes not. Sometimes global data is given and sometimes just US data. Additionally many media organizations ignorantly use the WP7 name to refer to all Microsoft made mobile OSes. I am confident with the first 3 data points but the fourth is taken from a different set of sources and is a little shakier. Honestly while this is slow steady growth, I expected WP7 to do better, I expected them to be around 4% at this point. I expect WP7 to hit about 7% domestic market share by this time next year.

2. RIM's "meteoric" descent continues.
I've been saying it for a year and half and it's still true. RIM's smartphone OS is not competitive with Google's, Apple's or Microsoft's. Their hardware is not competitive either. I expect them to end 2011 with less than 17% market share in the American market.

I was fairly bold here in giving a hard number, this data is all from comScore, I didn't have to monkey around with data like I did for WP7 because the data was less ambiguous:

The Crystal Ball is looking like it gets full marks on this one with the last data point at 16.6%, but keep in mind that the last data point is November not December so the final tally is likely around 14% though I've heard rumors as low as 11%. Despite some positive stock activity I expect RIM's decline to continue, they have simply not kept up with Apple and Google.

3. Wireless carriers will suck.
This is not so much a prediction as it is a complaint or an observation. The wireless carriers all suck and I see no reason for that to change. Because they have customers that are locked in and largely ignorant they can force their MBA shenanigans down the consumer's throat. Take for instance the consistent and intentional sabotage of Android through pointless restrictions (no tethering in 2.2? why can't I do whatever the heck I want with the data that I already bought from you? Oh. so you can charge me separately for that, I see) and undeletable junkware like VZW's browser favorites and "AT&T Music."
Hey carriers, stop trying to "diversify," you exist to provide wireless transmission of data, focus on doing that better if you want to make more money.

Between VZW delaying the Galaxy Nexus and giving bogus excuses for why it didn't have Google Wallet (when their clear motivation was to keep GW off because it competes with a service they plan to launch in q3 or later this year), the continued practice of carrier mandated uninstallable bloatware and the Carrier IQ fiasco I have to say that this was once again unfortunately predictable. Kudos to Sprint though for not crippling their devices and giving the best response to Carrier IQ.

4. AMD loses more market share.

It's not that I don't like AMD, but Intel's micro-architecture is now at least 35% better on a performance per watt per dollar basis and their process technology has a similar advantage. Combine that with endless delays to Bulldozer and the situation just doesn't look very good. Intel could probably snuff the life out of AMD but they won't... because then they'd be a monopoly and get hosed by the gov, so expect Intel to allow AMD to limp on forever and ever amen.

5. Operating systems become Instruction Set Architecture agnostic.
It used to be that Windows and x86 dominated computing but as computers move to different form factors and different thermal requirements and a greater number of companies move into processor and OS design this once homogeneous market will become much more complicated. We already know that Intel has a version of Android that runs on x86, plus Microsoft has announced that Windows 8 will run on ARM and nVidia has announced a project to create an in-house processor that runs on the ARM instruction set. There is also much evidence that Apple is designing it's own CPU's, likely for iOS devices, likely ARM based, though I doubt that this effort will be announced by Apple until 2012 or beyond.

With Android now running on real x86 hardware and Windows 8 now running on ARM this is happening, though a little bit slower than I had guessed. Oh, and MIPS is coming to the party.

6. Chinese smartphone design firms break into the American market.
There's no reason it won't happen, so it will. The top suspects are Meizu and Huawei. Expect them to pull an HTC and start at the low end of the market and go up from there (though Huawei just introduced a mid-range device at CES so maybe it will be more interesting).

Huawei made it. Meizu didn't.

7. Electric cars will not achieve cost effectiveness.
They will replace gas cars, but 2011 won't be the year it happens. Batteries are still too expensive to manufacture.

This wasn't really a prediction, I'd have bet a million dollars on it. I just included it so readers would stay realistic about the prospects of electric cars. It won't happen this year either.

8. HPalm will launch a bunch of medicocre WebOS devices.
Considering that Palm's top talent largely left after the HP acquisition and that we haven't heard a peep out of them since, I am going to bet that they come out with a bunch of devices that are better than RIM's but worse than Google/Apple/Microsoft's. WebOS was once so promising but alas... no longer, way to scare off the people that made it great HP, I'm sure your management knew better than they did (<-- yes that is sarcasm).

It's even worse than I thought, instead of a bunch only a handful of mediocre WebOS devices were launched. WebOS, which was once so bright and new, is all but dead.

9. A high percentage of OECD countries intentionally jack up inflation and devalue their currencies.
This assertion would take way to much text to back up, so I won't even try. Just watch the price of raw materials to see if I'm right. I expect Australia to be an exception. 

You: Hey this isn't about about tech
Me: Neither is the next one

You decide.

10. Hugo Chavez, Kim Jong-Un, Vladimir Putin and Mahmoud Ackmydinnersbad, will unite to create the new technology conglomerate, Supervillains Incorporated.
Their secret underground labs will devise one technology that makes their voices sound even more disingenuous than they already do and another that allows their egos to inflate unrestricted by the world's free press.

Oh Vlad, you silly silly man.