About Jean-Louis Gassée

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Posts by Jean-Louis Gassée:

The Real iPhone 1.0

Saint Peter offers a choice of hells to a recently dematerialized high-tech tycoon (pick your favorite sinner) with a long list of transgressions. The basic one, fire, floggings, and the premium one, plenty of music, drink, food and other pleasures of the flesh. Said tycoon picks the fun venue, Saint Peter pulls a lever, the industrialist falls to the one and only fiery hell. Agitated, feeling cheated, the sinner demands to know about the other hell, the eternal party.
Saint Peter: It’s a demo!

The joke comes to mind as I watch Steve Jobs introduce the iPhone on stage at San Francisco’s MacWorld Expo, on January 9th, 2007.
It is too good to be true, especially the part about running OS X. The demo looks magical, as with most of Steve’s acts. The iPhone looks like one shocking product. But is it real? Nothing specifically aimed at the demonstrator, I’ve seen – and given – too many demos, it’s a sinner speaking.

Six months later, I’m relieved. The first iPhones ship, enterprising programmers manage to inspect the firmware’s insides and, yes, it is OS X. A trimmed-down version, of course, but the core of the iPhone’s software engine is the genuine article. More

Fun AT&T numbers

by Jean-Louis Gassée

AT&T can’t seem to catch a break. A couple of weeks ago, at All Things Digital, an industry conference, Randall Stephenson, AT&T’s Chairman, got the audience to snicker and roll eyes. The conference is held by the Wall Street Journal, led by its digital guru, Walt Mossberg and, “by invitation only”, $5K a pop, gathers movers, shakers and wannabes of what is now broadly called the digital media industry.
Mr. Stephenson was on stage, answering Walt Mossberg apparently softball questions. But, when you look more closely, Walt applies a trial attorney’s precept: Only ask questions for which you already know the answers, let the jury see how the witness responds. We were the jury as Walt asked the AT&T top dog about its wireless network performance problems. The witness got off to a decent start: “Yes, when the iPhone 3G came out we weren’t ready.” Then, he proceeded to claim things had significantly improved. That’s when the snickering started. In Silicon Valley, we all know the blank spots, the bad 3G coverage, right in the heart of high-tech’s garment district. See the full interview here.

Later, Stephenson committed a faux pas of Detroit proportions: he claimed everything (phone, Internet connection, TV) worked well when he moved to his new home in Texas. Really? AT&T’s Chairman, CEO and President gets a good connection? In a further misguided attempt to connect with his audience, he even mentioned his Apple TV. Clearly, he’s one of us, a discerning Apple customer… More

Brilliant insights at the NYT

“If they start making products people don’t want, and start losing users, then Apple’s strategy will run into problems.” You can see the full NYT Business section story here. My wife and I love to read the papers in the morning. French-born, we still marvel at this American icon: the newspaper route, the nice deliveryman in his beat-up truck throwing the paper on our doorsteps in the wee hours.

But enough Norman Rockwell.

‘Who is this guy?’ My spouse is pointing at the NYT story. I had avoided it because we’re a couple of days away from Apple’s WWDC. Every year, in San Francisco, Apple holds the Worldwide Developers Conference for individuals and companies writing programs (applications) for its computers and, now, its smartphones. The rumor mill makes too much noise. Writers, bloggers, anal-ysts, pundits and kremlinologists attempt to top one another with predictably bad results.
Still, who is this guy? Is Brigitte referring to the article’s author, Brad Stone, a respected writer, or to Benjamin Reitzes, the Barclays Capital analyst quoted above? The doubt points to an all-too-common problem with business writing in our Valley: Cut-and-Paste stories, formulaic and, if not content-free, bland and devoid of insight or explanatory value. More

The VC Money Pump: NAV

The acronym stands for Net Asset Values. Be forewarned: this is the more boring installment in the VC Money Pump series of columns (see part 1 and part 2 ). Worse than spreadsheets and compound interest calculations, today’s topic forces us to deal with FASB (Federal Accounting Standard Board) regulations. Expensive futility as far as we are concerned.

For perspective, let’s go back to the previous crisis: the Internet Bubble. Fortunes were lost when Cisco’s stock went down by 90% — with the entire high-tech sector. But new fortunes were about to be made.
First, there were the political fortunes of posturing solons. Seeing the damage done by accounting fraud at Enron and WorldCom, canny politicians seized the opportunity to harness the public’s ire to their career’s progress. Paul Sarbanes and Michael Oxley begat what we now call Sarbox (the Sarbanes-Oxley Act of 2002), a new set of much stricter accounting rules. To the angry investing public, to the recently fired as a result of the downturn the senators’ message was clear: We’re here for you, we’ll throw the Armani-suited thieves in jail and we’re putting in place the safeguards needed to avoid a repeat of such catastrophe. More

Inside a Venture Capital fund: Reserves

Last week, with Excel’s help, we looked at the “simple” computation of a VC fund’s rate of return. This week: Reserves, a most important sets of numbers.

As a rule, for every dollar initially invested in a company, we immediately set aside an additional $2 or even $3 as a reserve for future rounds, future injections of capital. Entrepreneurs often tell us they’ll only need one round, this round of financing before reaching the cash-flow positive nirvana. I know, when an entrepreneur, I did it (to) myself, several times… We don’t argue, we smile, nod and enter the appropriate reserve amount in a spreadsheet.
Next, we try to forecast the additional rounds: one round in 15 months, perhaps, and another one 18 months later.
As we do this for every company in our portfolio, the spreadsheet tells us how much capital we’ve invested so far and, as companies develop and need more capital, how much will be required and when.

Then, the hard work starts. More

The New Papyrus

Once upon a time, in 1986, Bill Gates commissioned a book, The New Papyrus, subtitled: The Current and Future State of the Art. I recall an animated conversation with Bill as we were having dinner on top of Seattle’s Space Needle. He was hard at work promoting the CDI, the interactive CD and pushing Japanese manufacturers to give momentum to the CDI-PC, a personal computer centered around the huge storage capabilities (seven hundred megabytes!) afforded by the new medium. Imagine: an entire encyclopedia would fit on just one CD-ROM. The New Papyrus was the future of paper. And, for a while, I thought Bill was right. I treasured the OED II (The Oxford English Dictionary, Second Edition) on CD-ROM. I had lovingly paid about $10K for the paper edition on night at the old Kepler’s bookstore in Menlo Park, happily loading the 20 volumes in my car’s trunk (boot for British readers). A few years later, the CD-ROM edition cost only $700 or so… This was the future. More

More on sensors [digital photography]

In the (now waning) days of analog photography, much was made of which film was best: Kodak’s Kodachrome, Ektachrome, Fuji’s, Konica, Agfa, Ferrania… to name but a few of the old standards. Today, a similar debate goes on regarding the altogether simpler digital sensors. In the April 5th Monday Note #80, I took a first pass at the sensor size question, one that is, I believe, deliberately obscured by manufacturers. Showing their always flattering view of our intelligence, they peddle the number of pixels in the sensor, regardless of the size of those pixels. Never mind that (everything else being equal) pixel size makes the most important contribution to image quality.

Fortunately, the Web comes to the rescue with tutorials, charts and even calculators. Cambridge In Color features nice tutorials such as this one. A French company, DxO Labs, offers a sophisticated sensor rating site: You’ll see what I mean by sophisticated as the site provides numbers for color depth, dynamic range and low-light ISO. More

The Apple Tax

Today, let’s have a little fun with Microsoft’s latest attempt at countering Apple’s “Get a Mac” campaign. Their premise is simple: for the same amount of computing power you pay more for a Mac, you pay an Apple Tax. As Steve Ballmer, Microsoft’s CEO, puts it: You pay $500 to slap an Apple logo on a laptop.
Microsoft is right: Macs cost more.
Pundits and advocates on both sides use contorted arguments to make a point either way, but the point remains: Macs cost more – at the time of purchase.

But, before we go on, a few words on the color of my skin. Especially the operating system layer.I’ve been in the high-tech industry for 41 years this coming June and I’ve used (or even caused at Apple and Be) system software of many flavors. Regarding Microsoft, I’ve been a DOS and, later Windows user; a happy customer, an occasionally proud one as I acquired the skills to fix or quickly re-install systems in my family or at the office. Naturally, after leaving Apple, I continued to use Macs, even after my company, Be, lost the Apple opportunity to Steve Jobs’ NeXT. More

Revenue Model Breakthrough?

Micro-payments are an old idea, some say a bad fantasy. Chief, we’re rich: I found a way to get a millicent per page view…

So far, not much has happened. Unless you look at a tidy, not tiny, little billion-dollar business called iTunes. Three years ago, in February 2006, 1 billion songs served, sold, cashed in, since 2003. July 2007, 3 billion. June 19th, 2008, 5 billion songs. January 2009, 6 billion. Tidy it is at 99 cents for every song. A little so now, with three stages, 69, 99 and 129 cents, without DRM, without copy protection.

But, you’ll justifiably object, this is a unique phenomenon, it doesn’t replicate elsewhere. How can we draw lessons from Apple’s idiosyncratic, proprietary, ferociously monolithic, militantly anal practices? True when it comes to Apple’s style, but less so when it comes to substance, to the replicability, to the potential for use elsewhere. Apple’s competitors are rushing to build their own App Store; for their smartphones, they yearn for their own applications distribution platform. This certainly makes the case for the idea’s replication.

But what idea?

What Apple did was lowering the mental cost of the transaction. More

Pixels: Size vs. Number

OMG, says the blogger, the next iPhone’s camera will have 3.2 million pixels instead of today’s measly 2 million! The blog entry gave me the final push for an occasional, meaning at irregular intervals, series of columns on digital photography. The idea is to find insights into what’s really going on in this very dynamic industry, to extract a few useful ideas from the flow of markitecture BS coming from hardware and software vendors on a daily basis. As you’ll see, these columns are intended for the ‘interested’ digital camera user and, on occasion, for the technophobe, but not for the pro – they use cameras to make money, not to have fun like we do. More