Could this be Apple’s reason for its cash hoard?

Is Android responsible for Apple’s deep market discount?
[Via asymco]

At last night’s closing price Apple was trading at a P/E of 16.3. Excluding cash that ratio was at 13. On a conservative forward basis (my estimates) the stock is priced at less than 10 times next twelve months’ earnings.

These figures show a remarkable pessimism that has persisted around Apple for years. It was slightly, but not much, worse during the great recession. It persisted whether the company was growing at 30% of, as now, 95%.

There are many hypotheses about why Apple’s earnings and growth are considered worthless. They come and go with the whims of the age: recession, elitist, luxury branding, health issues, macro “headwinds”, earthquakes, phantom competition.

Lately it’s become fashionable to blame Android. That’s a curious thing to me, because Android has been discussed at length here and it has been shown to be, for the time being, benign. Apple has not “lost sales” to Android as it has been selling all it can produce. In some ways it’s been a boon as a co-belligerent against non-consumption.

The argument that the discount is in effect because of the future of Android has one first strike against it: the fact that the market does not often discount the distant future. Capital markets are notoriously incompetent in spotting disruptions and often reward those who are failing right up until the bitter end.

But let’s take the “Android hypothesis” (i.e. that Android is causal to Apple’s share price) seriously and analyze it. How could the impact be measured?

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After reading the entire post, the logical thing would be for Apple to buy Goggle. Fundamentals would indicate that the $170 billion purchase would generate $300 billion in value for Apple. SOunds like a good deal.

Apple has said it is holding onto the money in order to make strategic purchases. Could this be the one?

(Of course, such a purchase would probably not be allowed due to regulatory issues but it is a nice rebuttal to those on Wall Street that say Apple is hampered by Android.)

We simply house the bacteria that control us

Do bacteria control your brain?
[Via Boing Boing]

A new study has found evidence suggesting that you are not what you eat, so much as you are what’s living in your gut. In mice, at least, the presence of normal gut bacteria has a significant impact on how an individual mouse behaves, and how its brain develops.

this new study is the first to extensively evaluate the influence of gut bacteria on the biochemistry and development of the brain. The scientists raised mice lacking normal gut microflora, then compared their behavior, brain chemistry and brain development to mice having normal gut bacteria. The microbe-free animals were more active and, in specific behavioral tests, were less anxious than microbe-colonized mice. 

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We have data indicating that the types of bacteria on the gut have a direct effect on metabolism and obesity. Now they may affect our brains and nervous system.

I wonder if in the future we will take pills to populate our guts with ‘intelligence enhancing’ bacteria during certain stages of our childhood? That would be cool. If we actually knw what intelligence was.

Facts do not matter for the majority of people

by LadyDragonflyCC -Lamb Festival in April

Politics and self-confidence trump education on climate change
[Via Ars Technica]

This week saw the arrival of both a paper and a new survey which track the US public’s awareness of climate change. The two use slightly different sources and come to slightly different conclusions, but there’s one trend that trumps all: when it comes to climate change, politics dominates, eclipsing self-assessed knowledge and general education. In fact, it appears that your political persuasion might determine whether an education will make you more or less likely to believe the scientific community.

One set of polls, conducted by the University of New Hampshire, focused on a set of rural areas, including Alaska, the Gulf Coast, and Appalachia. These probably don’t reflect the US as a whole, but the pollsters had about 9,500 respondents. The second, published in the The Sociological Quarterly, took advantage of a decade’s worth of Earth Day polls conducted by Gallup. These each had in the area of 1,000 participants, which the authors pooled. That provided a lot more to work with statistically, but ended up pooling data on a topic where the public’s view is not fixed. In fact, the one timing analysis the authors performed showed that the gap between liberals and conservatives grew quite a bit larger over the last decade.

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The point here is not to gang up on conservatives because they are ‘wrong’ and liberals are ‘right.’ That might be the case this time but could change at another.

The point is that people’s acceptance of scientific points often has more to do with its resonance with their political views than with any real examination of the data. In many cases, conservatives become more anti-AGW the better educated they are, while liberals become more pro-AGW – the more each side knows the more they accept only that which fits their political view. Not because one side is necessarily more enlightened but because the political stance each take feeds that particular scientific view.

It takes some real training and experience – something most researchers have spent years doing – to separate the data from one’s preconceived notions. Most people do not think that way. There is an accumulating amount of data indicating that people will only accept and remember information that fits their views. And they will reject information that contradicts them.

In short, a liberal might have just as hard a time accepting data that indicated a free market solution would be the best approach as a conservative would that regulation would be best. For many, personal views color almost every bit of data that they examine.

The gap here with AGW for most people has more to do  with political beliefs than with any really unbiased examination of the data. This makes it even harder for the group that really does need to change its views, to change its views.

LinkedIn Maps are fun

I mentioned my social map from LikedIn a few weeks ago. I’ve done a little seeding and thought you might like the new look.

Here is the one from February:

And here is April:

Besides the color change, which I have no control over, there are a couple of noticeable changes. The blue network has broken into two distinct but interconnected groups, at least by this programs algorithms. I have not myself been able to discern what the difference is but I’ll keep looking

The lower right portion of the graph has been enhanced.The right seems to mainly be filled with acquaintances who really aren’t connected to many others in my linked in network. I guess I could make them all tighter by inviting them to a party and having them connect online but I don’t think that will really add much.

I guess it’ll be interesting to see how it changes a year from now.

Apple does create novel new jobs in the US

iPad 2 resellers camp out overnight for $400/day profits
[Via Edible Apple]

If you thought the iPad 2 was a hot commodity here in the US, then it shouldn’t come as much of a surprise that Apple’s next-gen tablet is even higher demand overseas, and especially in countries where the device has yet to go on sale.

Case in point – China, where iPad 2s are selling for so much money that they’ve created a mini burgeoning industry where folks lineup outside of Apple stores here in the US for hours to get their hands on the iPad 2 where they can then turn around and re-sell the device in China at huge markups.

The New York Times recently profiled this not-so-old strategy at an Apple Store in SoHo. When reporter Nick Bilton was told that the store was out of stock, he asked an Apple employee what time he should arrive the next day when a new shipments of iPad 2s was scheduled to arrive.

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Netting $400 a day because of Apple. Not bad at all.

See, Apple has created jobs here in the US. No other computer company has created jobs like these. In fact, I am not aware of any other consumer company here that has.

Take that Google!

Of course, waiting a day and a half to get that $400 does mean that the hourly wage is $11.11, still much better than the minimum wage of $7.25 in most states with Apple stores.

Not very interesting though. I guess they can use Apple’s free WiFi to connect with the world. And have ‘co-workers’ hold their place when they go to the bathroom.

Facts don’t change people’s minds. People change people’s minds

by *clairity*

The Science of Why We Don’t Believe Science
[Via Daring Fireball]

Chris Mooney on why cold hard facts and scientific evidence seldom change the minds of those who already hold a strong opinion. (E.g., climate-change deniers, vaccines-cause-autism believers.) Fascinating but utterly depressing.

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While a depressing observation, it is true. Scientists may be able to deal with a world in shadowy shades of gray but most people do not have that luxury. So they have developed rules of thumb that help them deal with a complex world.

And they will simply not make changes in those rules because some facts come along. They know that gray is a mixture of black and white so they emphasize the white and explain away the black.

That is why so many researchers, whose training and experience provides their own rules of thumb, often get very frustrated with lay people. Facts do change researcher’s minds. But seldom do they change non-scientists.

So, how to change minds? The article has the best advice we have learned so far: If you want someone to accept new evidence, make sure to present it to them in a context that doesn’t trigger a defensive, emotional reaction.

Context and framing do work. But it can take time, much longer than the simple recitation of facts and data. And it smacks of marketing – twisting peoples perceptions by presenting emotional arguments rather than factual.

Scientists try to remove the emotional aspect from their work since they know how confirmation bias can cloud the results. So having to use emotional appeals to convince others goes against the researchers own set uf rules.

That is why it is so hard to find effective communicators between science on the general populace.

However, we no longer have the luxury of using just a few great communicators. we have too many complex problems to solve that will require all of us to take a part. Researchers must do a better job finding the contextual frames to get people to hear and to change.

And, I think, it will need to be an emotional sort of frame rather than strictly factual.

“Gatekeepers don’t make much sense.”

by ellenm1

Why Does The Entertainment Industry Seek To Kill Any Innovation That’s Helping It Adapt?
[Via Techdirt]

The LA Times recently had a good article about Hulu’s struggles with its corporate parents, the various TV companies. While Hulu itself has been massively successful, the TV companies are suddenly claiming it’s a threat (even though they own it) and are seeking to cripple the service in a misguided and shortsighted bid to “protect” their legacy offerings.

Combine that with our recent story about the record labels crippling Spotify and the Hollywood studios seeking to cripple Netflix, and you’ve got a pattern. Any time a new service comes along that helps drag the content industries into the present, the industry’s hit back by trying to kill off or cripple the golden goose.

The simplistic answer is that the entertainment industry is all about control, and they freak out about these success stories (that make them money) because they realize they’re losing control. I think it’s a little more complex than that, but not too much. The established entertainment business, for many, many years, has operated under the principle of being the gatekeeper to their industry. They’ve (incorrectly) believed that their value and the key to their business is in being the gatekeeper. But the amazing thing about the internet is that it knocks down fences and walls with ease.

Gatekeepers don’t make much sense.

[More]

The TV studios and TV companies fail to realize that their purpose is not to constrain access and make money but to enable access to make money. If they cut off Netflix, then Netflix must adapt or die. So what to do? How about become its own enabler? They outbid HBO!

The actions of the studios has been to empower Netflix to perform what had previously been done by the studios. They have now created a competitor.

A competitor who is more connected with what the market wants and has the agility to get it to them. Not too smart.

If they have worked to enable Netflix to do a better job streaming, they would never done that. Now they look to do the same with Hulu.

They are actually weakening their positions by trying to stay gatekeepers. If they simply enabled Netflix, Hulu and others to serve as conduits, they might have had a chance and might have prevented the creation of high powered competitors.

Gatekeepers want to get paid a fee just for keeping the gate. They reduce access.

People want easy access to content. Netflix and others enable that. The studios seldom do. What succeeds today are the business plans that do the best job getting customers what they want and need.

Hard to see the studios accomplishing that.

Is the iPad king because it is not necessary?

by pasukaru76 (out of town)

Will the iPad be as Unbeatable as the iPod? – Yahoo! News
[Via PC World]

When Steve Jobs unveiled the first iPad, many observers (including me) called it a big iPod Touch. We were talking about the similarities in design and functionality. But as time has gone on, I’ve started to think the iPad and the iPod may share another trait: Invincibility.

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This is a really interesting point. Could the invincibility of the iPad be similar to the iPod for the same reason – neither is a necessity?

People need a computer and will make a compromise on quality to get one at an affordable price. The same with a phone.

But with an iPad, people can wait, they do not need it now. They can wait. If they want to buy one they can buy the best. Why get a cheaper knockoff?

And it will be hard to make the price more affordable for competitors as APple has the component market pretty well wrapped up, garnering a price few can match.

As the article puts it:

Both personally and professionally, I hope this analysis is wrong. As the editor of PCWorld, it’s better for my business to have a spirited, interesting tablet competition to cover. It’s more fun to report on and brings in more readers. And as an average technology citizen, I think Apple’s got enough power already without completely dominating an important new product category.

But as I look at the tablet market, I feel more and more like I’ve seen this movie before. It starred the iPod … and a bunch of other actors I’ve long since forgotten.

10 years after iTunes, Google still trying and moving backwards

by Theoddnote

Google’s talks with music labels are ‘broken’, have ‘gone backwards’
[Via MacDailyNews]

“Google has spent a year trying to build a music service that could compete with Apple’s iTunes,” Peter Kafka reports for AllThingsD. “But those efforts seem to have stalled again.”

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iTunes itself came out 10 years ago, even before the iPod. Google still does not have anything for dealing with a music library.

The iTunes store opened 8 years ago. Nothing from Google and it looks like nothing will be seen for a while.

Where is the Google ecosystem in this arena?

Stock manipulation of Apple in today’s world

The Apple slingshot is primed
[Via Brainstorm Tech: Technology blogs, news and analysis from Fortune Magazine » Apple 2.0]

The pullback in advance of the company’s Q2 earnings report has gone far enough

“If you can keep a good stock down, then you are able to load up for the ride back up. It’s like a slingshot — the harder you pull, the more propulsion you generate.”

That’s how Jason Schwarz, an author and investment adviser, described the game that hedge funds play with Apple (AAPL) in an article entitled “Apple: Seven Reasons Shorts Love It,” — a Dec. 2009 piece we liked enough to feature the next day.

One of the points he made then is worth remembering now, with the stock hovering near a three month low and the company expected to report record second fiscal quarter earnings on Wednesday:

Apple always bounces back. Over the long run, Apple fundamentals will certainly take the stock higher, but hedge funds want to maximize the ride. Keeping a great stock down allows them to profit from quick predetermined trades rather than being fully invested all the time.

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So, Wall Street guys manipulate a stock price for their own reasons. And this is supposed to be a free and open, and RATIONAL,  market?

The future of the PC in an iPad world

How the iPad Is Really Eating the PC
[Via Cult of Mac]

Nearly a year ago, I predicted in my Computerworld column that Apple’s iPad would not only eat into netbook sales, but sales of laptops and even desktop PCs. It was an unpopular prediction.

If you look at the 300+ comments attached to that piece, you’ll see that the majority of commenters at the time thought I was crazy, stupid or both.

One wrote: “Obviously Mike Elgan has gone off the deep end on this one. This article is so naive to the real world, and so far fetched it makes me think this is nothing but, once again, a biased article by an iSheep in its purest form.”

Another said: “This article made me laugh out loud. I thought I was reading The Onion!”

Still others were more direct: “I’m pretty sure this is the stupidest article on the internet.”

You still hear people dissing the iPad these days, of course, but nobody dismisses it. Sales of the iPad have far exceeded the expectations of all but a tiny minority of us who were very bullish from the start. Analysts have had to raise and raise again their unit-sales estimates. Early doubters have been silenced.

Now, you might think I’ve come to brag that I was right and my critics were wrong about iPad replacing PCs. A Gartner report published this week says that PC shipments are down from last year. Overall PC shipments in the United States fell by 6.1 percent. HP was down 3.5 percent. Dell dropped 12 percent. And Acer took a nearly 25 percent hit in unit sales. Meanwhile, Apple’s sales grew nearly 20 percent.

One analyst at Gartner said the PC declines resulted from buyers “turning their attention” to media tablets and other devices. The “media tablet” market is a euphemism for the iPad, which owns 70 percent market share and is expected to sell in the 45 million unit range this year.

But no, I’m not here to brag. The replacement of PCs I predicted hasn’t quite begun in earnest. The replacement will come. And I will brag. But for now, it’s more interesting to see how the iPad is gradually undermining the foundations of PC dominance.

Here’s how Apple’s iPad is setting the stage for the decline of the PC.

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Maybe we are now getting a hint of what Jobs meant by a post-PC world. Computing innovation will be driven by things that are not PCs except in very general sense. What has been called a PC for the last 30 will not have much relevance in such a world.

Pretty scary to a lot of companies. Those that cannot adapt rapidly to the app economy spreading through the industry.

The worst movie out today?

Atlas Shrugged: A movie this demented ought to be against the law [Video]
[Via io9]

Every cult needs its own wacky trainwreck of a movie. Scientology got Battlefield Earth, and now the cult of Ayn Rand gets Atlas Shrugged, Part 1. But how does Atlas stand up to Battlefield Earth?

Quite well, actually. Atlas Shrugged Part 1, which just opened in theaters today, is a grand addition to the roster of movies that are both kooky and clunky. A movie this hideously wonderful really ought to be against the law.

Spoilers ahead…

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Read the whole thing and then realize why it makes perfect sense to review it on a science fiction site.

Which pays more: iOS or Android? id Knows

id Software: iOS Game Development Is Addictive, But Android Isn’t Worth It
[Via Cult of Mac]

id software is a game developing company known for pushing the hardware of any platform they embrace, starting from their earliest triumphs on the PC with Wolfenstein 3D, Doom and Quake and continuing last year with Rage HD on iOS.

Don’t expect to see id software release their games on Android any time soon, though. It’s just not worth their effort, and it’s all about the benjamins… or at least jacksons.

According to lead programmer and co-founder John Carmack, “Every six months I’d take a look at the scope of the Android, and decide if it was time to start really looking at it… At the last Quakecon I took a show of hands poll, and it was interesting to see how almost as many people there had an Android device as an iOS device. But when I asked how many people had spent 20 bucks on a game in the Android store, there was a big difference.

“You’re just not making money in the Android space as you are in the iOS space,” Carmack concluded.

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Interestingly, the original games from id were developed on NeXT computers from Jobs’ previous company. I imagine that is part of why they like developing for iOS – it is still based on the same principles and development software as what they first started with.

Besides the whole makes more money thing.

Even if that was not a problem, Android is based on ad revenues where Google determines the rates. So a developer will always be beholden to Google’s choices. And Google’s needs may not always coincide with the developer.

It Gets Better: Apple

Another moving video in the series. Some amazing stories.

Another one bites the dust

Leaving in a Huff
[Via Marco.org]

Eric D. Snider’s hilarious account of one of AOL’s many recent layoffs. He’s obviously a professional (and quite good) writer: had anyone else written an account of the same events, it would have read like every other “I hate my job” rant, but I was laughing through this entire masterfully written story.

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I had wondered what happened to one of my favorite movie sites. Cinematical used to have a huge number of posts a day. Then it was down to one or two.

Not it becomes clear. It is another casualty of the Huffington Model. Too bad.