DateFriday 16 July 2004

Apple: breaking the supply chains that bind us

When Steve Jobs returned to Apple in 1996/7, one of the first things he did was completely shake up its supply chain and logistics: he drove down inventory and got supply to match demand. For years, he would boast about how Apple had hours of inventory – less than Dell, the sine qua non of low-latency manufacturing.

Turns out he did it too well. Or else Apple got too used to being small sometime in the recession. For it’s a company now held back by its suppliers from doing far, far better.

There’s an interesting point in Apple Processor Seen As Issue For IBM where an analyst suggests that IBM’s delays in making 90-nanometre G5 chip cost IBM 2c per share. Now, IBM made profits of $1.99bn, or $1.16 per share. So 2c is $34m.

That’s the profits IBM would have made on selling the chips. Apple makes a lot more money putting the chips into machines. As it was, with constrained supply, Apple’s net profits for the quarter were $61m.

Now imagine it could have had $34m more worth of chips to repackage at a good markup. The profits could surely have been at least one-third greater – easily topping $100m. That’s something it hasn’t done since the fourth quarter of 2000. But before then, it used to do that amount, and more, all the time – see the roll of results.

Add to that the constraints on the tiny disk drives for the iPod Mini, plus its problems making enough of the cheap but showy Airport Express doodad (whose distribution has been delayed in the UK), and you realise that this is company which is in thrall to its suppliers. Who aren’t serving it so well. But being at the (b)leading edge, getting the smallest chips and drives, Apple is bound to get hit by this sort of act of God.

Good thing some people are buying iPods. Should I order the Powerbook G5 (surely a January announcement… but delivery when) now, do you think.?

Update (Saturday): great minds.. clearly someone at the Guardian was having much the same idea on Friday afternoon (I had it Friday night, without knowing). The business section editorial is here. I agree with its main point, which is that it’s not too smart to leave would-be buyers frustrated; they’re not used to *waiting* in this right-away world. Difference is, I crunched the numbers. And thinking more about it, consider that Apple could have done $150m profit if it had sold in line with demand. That’s one and a half times more profit than it did.

The slow train to BT Broadband

“Good news!” says the output at the BT Broadband popup-by-postcode checker.

Really? “The checker indicates that Broadband” – love the capital B – “will be available in your area on the 25th May 2005”.

Then it gets better. Or something. “..the preliminary check on your postcode suggests that the full range of Broadband services could not be delivered to your address because of the long distance between you and the local telephone exchange, however you should be able to receive Broadband service at 512kilobits per second downstream and up to 256kilobits per second upstream.”

Reminds me of the Soviet joke about the man who has a washing machine that of course breaks down. He gets on the phone to the officially-sanctioned fixer, who says: “I can do it. I’ve got a free spot in three years’ time.”

“Which day?” says the man.
“July 7th,” says the fixer.
“Morning or afternoon?” says the man.
“What, it’s three years away – why do you care if it’s the morning or afternoon?” says the fixer.
“Because the guy’s coming to fix the oven in the morning that day,” says the man. Brrrrrm-tish!

The chocolate teapot of the Telephone Preference Service

I just got a call on my mobile from a company called Communicate saying that I might be eligible for an upgrade to my mobile phone. I know that I’m not, as I got a Sony Ericsson T610 to replace my SE T68i a couple of months ago. (And have been regretting it every since; the T68i had the same usability flaws, but much better battery life, especially with Bluetooth turned on. But anyway.)

So, I asked the cold-caller, do you subscribe to the Telephone Preference Service? Yes, said she. In which case you’d know that my mobile number is on it, not wanting unsolicited marketing calls?

Possibly the answer to that wasn’t on her script. I asked where she had got my number. “From the orange” (or maybe Orange) she said. It’d be really annoying if my mobile operator is somehow passing on my number to these people.

But it also shows that there are loads of direct marketing (*spit*) companies out there who don’t bother with the TPS to wash their lists. Yet on visiting the TPS complaints page (written by people so expert the page title is “Untitled Document”) you find the list of options for numbers to complain about is “Residential / Sole trader / Partnership / Limited company / PLC” even though the paragraph above that mentions the fact you can register mobile numbers.

Anyway, let’s put in a complaint about Communicate (who rang off rather hurriedly rather than explain precisely where they did get their numbers) and see what happens. Will the paratroopers of the TPS kick in their windows? Or send them a Lord Butler-style letter? I wonder.

Update 15:12: By change I get an email from BASDA, which says:
At our BASDA Marketing Forum meeting this week we had an excellent presentation from Colin Lloyd, Chairman of the Telephone Preference Service.
You may not be aware that a Corporate Telephone Preference Service (CTPS) has now been set-up:-
Obviously you may register your company with the service to prevent unsolicited telephone calls, but more importantly, you should check your lists with the service before you embark on telephone sales campaigns. The penalties are seviere – heavy fines leading to the imprisonment of the Directors. [Like to see that – CA]
As Colin pointed out, “it is not the responsibility of the tele-sales house to ensure that companies have not registered with the CTPS, it is your responsibility”.
It is worth checking before using lists and mailing houses that they have been screened against the appropriate preference service.

Since you’re wondering, BASDA is the Business Software Developers’ Association. No idea why they’ve oared in to this.

Still hunting for a Mac to PC switcher

If anyone out there has switched, voluntarily, from a Mac to a PC, and lives in the UK*, could they get in touch? There’s been a deafening silence so far to my earlier request.

I’m interested to hear about experiences. Drop a comment or email me – . Ta.

(And no, I don’t need people who’ve gone Windows -> Mac or Windows -> Linux. There’s the opposite of a deafening silence on that one.)

* because The Independent is a UK-based paper. Though thanks to both those who have got in touch.

The problem with the “justifiable hacking” defence

Two Oxford University students on one of its papers hacked * in to the system to demonstrate flaws there after a tipoff – and now they’re up before the university beaks who are threatening all sorts of ills on them.

The idea that demonstrating flaws per se means you’ve broken the Computer Misuse Act has always seemed strange. It doesn’t allow for the reasonable defence that you’re showing flaws in a system (which is what Raphael Gray claimed). And it certainly makes all the penetration testing that security companies do instantly illegal. Though of course to allow it would allow all the badly-shaven mafia in east Europe to claim they were just demonstrating that various betting sites weren’t set up to withstand a vast ping flood. And then to charge a “consultancy” fee. Which is sort of what they do already. Extortion? No, of course not!

* yes, OK, hacker should in some places read cracker but it’s a very fine distinction.

In a spirit of condescension

It’s probably lucky for John Reid, secretary of state for health, that Caroline Quinn wasn’t allowed to slap or shoot him during their interview on this morning’s Today programme (requires Real Player, like all BBC clips). She was quizzing him very reasonably about the flaws in the Government’s position to Hutton over the September dossier on Iraq. He replied by avoiding the question – a subtle insult – and being condescending, which is more overt. Try counting how many times he addresses her as “Caroline” as though he were being pleasant, when in fact it’s a politician’s way of being anything but.

Interesting point made subsequently by Andrew Marr that “the number of Lib Dems in Parliament is like the tide – it’s rising”. It’s one bigger today. A problem for Labour and the Tories. Some voters might not see it that way at all, judging by the by-election results of last night.

And as a sidenote, it was an all-female Today: Caroline Quinn and Sara Montague doing the interviews, and Harriet Cass doing the news. They’ve got a female business presenter who does the pre-7am roundup from time to time. Now if they could only get a female sports presenter instead of the Alan Partridge who presently does it..