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This is an Uber bad idea

A recent job posting by Uber.com shows the service is coming to both Cape Town and Joburg according to this job posting. If you’re like me you’re probably thinking: “what the hell is Uber.com?” Here are the details:

Uber is a venture-funded startup company based in San Francisco, California that makes a mobile application that connects passengers with drivers of luxury vehicles for hire. The company arranges pickups in the San Francisco Bay, New York City, Los Angeles, Seattle, Chicago, Boston, Washington, D.C., Toronto, Paris, Berlin, Philadelphia, Dallas, San Diego, Amsterdam, Atlanta, Denver, London, Melbourne, Minneapolis–Saint Paul, Munich, Baltimore Phoenix, Stockholm, Sydney, Baltimore, Detroit, Milan, Sacramento, Rome and Singapore.

 

Uber drivers have cars such as Lincoln Town Cars, Cadillac Escalades, BMW 7 Series, and Mercedes-Benz S550 sedans. Cars are reserved by sending a text message or by using a mobile app. Using the apps, customers can track their reserved car’s location.

 

Uber has indicated it is planning to expand operations to include non-taxi ridesharing in the near future.

Considering they’re taken the service to large parts of America, Europe, Australia and some parts of Asia I guess they’ve run out of places to try market the service. It’s great to see a massive startup looking at South Africa and Africa as a whole to enter however I wonder if someone forgot to do their homework. While it’s technologically a great product (you hail a car with your phone) and it’s going to be a good employer for drivers and the tech industry I’m skeptical.

With our complete lack of public transport you’d think that Uber would make a lot sense however there are two major issues here:

  1. South African’s love their cars: We spend fortunes on buying, maintaining and showing off our cars. Ownership of a car is for some, more important than a house.
  2. Cars are expensive in South Africa: Cheapest BMW 7-series in the US is $77,000 or about R800,000. Locally the cost of entry is just over a million.

Uber have money, they recently ended a $50 million funding round but the target market might be problematic. High end cars equates to high end consumers, the type who may have an iPhone probably would rather make a call than use an app to get a taxi. The other issue is that you load your credit card once and then it’s automatically billed after the trip. I’m pretty sure the average South African has the attitude of “you want to me to load my credit card with who?”

I’m fairly certain this will come down to the person who manages to run the project. A good Country Manager could make this work but anyone less than amazing and the service will flounder.

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Why Tim Cook shouldn’t tie his bonus to share price

We’ve spoken about the Apple share price before on Loosechange and now it’s emerged that Apple boss, Tim Cook has moved his bonus structure to be linked with the price of the stock. This is an interesting move:

When Cook took over as CEO in 2011, he was awarded a bonus of one million shares of Apple stock, half of which were set to vest in 2016 and the other half in 2021 — with the only condition being that Cook stay with the company. However, Apple’s board revealed in a filing with the Securities and Exchange Commission that it has approved a request from Cook to tie his bonus payout to the performance of the company’s stock — a move that seems intended to prove to investors that Apple’s leadership takes the stock price seriously.

“Mr. Cook is leading this initiative by example and has the full support of the Board of Directors,” Bruce Sewell, Apple’s SVP and general counsel, said in the filing. “He asked the Committee to apply a performance metric to his outstanding 2011 CEO equity award as well as any potential future awards. After careful deliberation, the Committee has approved a modification to Mr. Cook’s 2011 award.”

It’s interesting that Cook himself picked this option in order to prove his commitment to the company.

The share price has plummeted close on $300 per share in the past year and no one is really sure when or how it will improve. Share prices are usually linked to the potential earnings and growth of a company, the higher the potential, the higher the share price.

Now if Cook’s bonus is linked to the share price and Apple’s potential earnings are linked to innovation there will be a desperate need to release a multitude of amazing hardware and software products. It’s not impossible for Apple to do this, they had an amazing run with the iPhone, iPad and machines such as the Macbook Air. To continue that run, they’ll need to continue to release products that amaze.

The problem with constant innovation is potential quality issues associated with pumping out such high levels of innovation. Already we’re seeing some pretty wild changes with iOS 7. It’s great software and a brilliant departure from iOS 6 but we’re still to see whether the layman Apple user can cope with such a radical change. The same can be said for the announced Mac Pro; a machine that looks beautiful but is aimed at a market of hardcore professionals. There is a very large chance that they will be turned off by the new design.

Cook putting his bonus on the line is a brave move by someone trying to emulate Steve Jobs for being ballsy. Steve was a genius visionary, Tim is a genius operator. Apple is and always will be a great company but we’ll never see the share price at the heady levels of 2012.

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The business of iOS 7

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October 2012, Apple reaches it’s highest price of over $700 a share. Today, it’s currently hovering around $430.

Two weeks ago we saw the announcement of iOS 7. Reactions are mixed, some people love the new look and others think it’s a candy coloured mix of chaos. My favourite commentary on iOS 7 has to be the Matt Gemmell post where he puts the iOS 6 and iOS 7 next to each other for this image:

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The two weeks I’ve had with the operating system have left me extremely confused. It’s pretty but ironically very cluttered and since it’s still a beta the OS is very buggy as is expected. iOS 7 feels like someone smashed iOS 6, Android and Windows Phone 8 together in a blender and the resultant flurry is iOS 7. I’m not mad over it and those who are comfortable with iOS 6 (read between the lines: old people) are going to hate it for being quite different visually.

For the Apple stock price, whether people love it or hate it is irrelevant.

Right now Apple is seen as being in a creative slump. Their products are languishing and their software, particularly mobile, is lagging behind market leader Android. Samsung is kicking them in the proverbial teeth for market share and even Apple die-hards are starting to consider their options.

Right now, all the stock price needs to improve is to be different.

iOS 7 is that, different. It’s irrelevant whether it’s similar to Android or Windows Phone. It’s irrelevant whether people love or loath the operating system, it just needs to be a departure both functionally and creatively. It is.

Currently iOS 7 isn’t that great. It fills a few gaps in iOS 6 but doesn’t do anything revolutionary and still needs some catching up to do to be in pole position as it has for the past 5 years.

Apple will be releasing iOS 7 in a few months and based on how different it is, I’m pretty sure we’re going to see a fairly substantial stock price increase.

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Do we need another mobile OS?

Android, iOS, Windows Phone, Blackberry 10, Ubuntu mobile, Firefox OS, Jolla as well as Facebook Home and now Smartisan.

We live in a world where people enjoy choice and mobile OS developers are starting to offer this choice. Android alone has so many different variants from major manufacturers without even considering major forks such as Facebook Home and Smartisan. The question I pose: “Is there any need for another mobile OS?”

The business behind mobile makes a lot of sense to allow for multiple OS’s. According to some research by eMarketer mobile revenue is going to be in excess of $15 billion with over half that revenue going to Google. Of course Android’s adoption and their advertising platform help this but the “other” section are making a lot of money as well.

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For a mobile OS developer, if they could start helping to likes of Google or Facebook to grow their revenues even further by sending a decent amount of traffic through their OS there’s a good chance of an acquisition or even a revenue cut.

It’s currently a land grab, one that makes a lot of sense for advertisers and the platforms but no one seemed to consider the group that suffers: the buyers of these smartphones.

Look at Windows Phone 8: It’s a very good platform but it completely lacks in the apps department. This is due to devs not seeing the money trail and who could blame them? It’s a tough industry to break into and nothing would be more disheartening to a new mobile dev than if their app being download a handful of times. So how do small OS’s hope to compete? I have no idea. End of the day: the people using the OS will be stuck without a decent app store collection.

If I were a dev the opportunity to create an app on a big platform and be acquired makes more sense than an entirely new OS. Why bother reinventing the wheel?

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Often I really hate Twitter

I often think to myself: “what did I do before Twitter when I’m bored?”

The truth is, the 140 characters of time wasting are great to keep you busy and entertained however I can’t help but find complete disdain for the sins performed on Twitter. I will now demonstrate these sins with my own examples:

  • Sin 1: “My life is so f*&king awesome:

This was me posting a picture of spending a Friday in a small plane. Why… I want to look awesome.

  • Sin 2: “Here’s an article I think will make me look smart”:

I’m so smart,  I read Business Insider.

  •  Sin 3: “I’ll argue with you even though I would never do this to your face”:

Some backstory here: I was shooting down a South African startup that I don’t really know much about. It wasn’t constructive and it was said in a flippant manner. We’re all guilty of this.

  • Sin 4: “The subtweet”:

I don’t have a good example here. I’ve deleted these tweets because I feel like a tool

-Saul Kropman (@saulkza)

I don’t have a specific example here because I’ve tried to remove all of them because I feel like a complete idiot once the moment passes. This is typically found in the form of a tweet saying something like: “You’re so vain, you probably think this song is about you.”

  • Sin 5: “Brand hatred”:

It’s so easy to complain to a brand online. It’s relatively safe and anonymous and social media was created so brands could listen right? Notice my words: “listen” not “abuse”. Be nice out there, don’t look like a tosser.

  • Sin 6: “I’m so angry about politics tweets”:

The truth is, politicians are so taken with social media that they’re sitting online all day waiting for the complaints of their constituents. Complaining on Twitter about politics is about as useful as pissing into an oncoming wind.

Twitter has become a place for complaints, moans, whinging and general outbursts. Sadly, it’s a medium where the loudest (and usually the dumbest) climb to the top. I’m not saying it’s a bad place to spend time during the day however I am saying think before you tweet your latest complaint.

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Netflix over torrents

With nearly 30 million streaming subscribers in the U.S. alone, Netflix is one the major providers of online video entertainment. Not only do they offer a great service but they manage something that no other content provider can: the ability to combat piracy.

It’s simple, for $8,99 you get access to a ton of content including unique content such as House Of Cards and the upcoming season 4 of Arrested Development. It’s a great service (info on how to get access from outside of the US here) and interestingly it’s beating piracy as an option.

Netflix’s Chief Content Officer Ted Sarandos reports he has some evidence to back up this claim of beating piracy. In a recent interview with Stuff, Sarandos notes that BitTorrent traffic dips every time the video provider opens up shop in a new location.

“One of the things is we get ISPs to publicise their connection speeds – and when we launch in a territory the BitTorrent traffic drops as the Netflix traffic grows. So I think people do want a great experience and they want access – people are mostly honest.”

In other words, many people who previously pirated movies via BitTorrent stop doing so when Netflix becomes available. Choice is also the key to solving the piracy problem according to the Netflix CCO.

“The best way to combat piracy isn’t legislatively or criminally but by giving good options,” Sarandos says.

Good quality content at a capped price per month. All you can eat for a fixed price; what’s not to like?

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The magic of Rando

I recently got introduced to an interesting app called “Rando” for iOS. Normally I wouldn’t do an entire blog post on an app but the social constructs behind it.

It’s an extremely simple photo sharing app with a difference; you can only share a photo with a total random using the app and you can only receive a picture if you send one. The interface looks like this:

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You receive an image and then can tap on that image in order to see where the pic is from. There’s no way to comment, like or interact with that person ever again unless by some random chance your pictures match up again.

It’s a really stupid mechanism but for some reason I am totally entranced. The random stream of consciousness you receive is fascinating however the lack of any interaction makes it frustrating at times. I have something of a love/hate relationship with the app. I do think it could be improved:

  1. Allow for an image to be passed on
  2. Allow for you to choose a country or continent to send it to
  3. Links to your social profiles in order to continue the conversation

I suppose this would make the app more of a modern day penpal application but I think it would add to the interest factor. Go download it now for your iOS device; it’s strangely addictive.

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The link between advertising and revenue

If you’re not reading Asymco for insight into the business behind mobile technology you’re missing out. Writer and analyst Horace Dediu put a great tweet out earlier today about the marketing spend of some of the worlds biggest retail companies:

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Interesting to see that Samsung spends the most although this does make sense in that they’re advertising everything from the latest Galaxy phone to a TV or laptop (for full info on what falls under Samsung Electronics click here). These are interesting numbers but nothing without context. Twitter user @Chiphanna went and ran these numbers in order to compare marketing spend vs revenue and came up with some interesting figures:

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Essentially for every dollar Apple spends on marketing, they make $156 in revenue. Compare that to Samsung that have to spend a dollar to only make a  relatively low $46 in revenue and you wonder if someone like Samsung is doing something wrong?

The fascinating insight is that of Coca-Cola, they spend over three billion dollars a year to and only make $14 for every dollar they spend. This brings us to wonder whether the advertising that Coca-Cola puts out is actually irrelevant or are they over advertising?

Another interesting question is what would happen if Dell spent $200 million more a year (bringing them into parity with HP spend) would their sales increase to the level of HP? I would assume this is unlikely as proportionally they need to spend more than the $200 million in order to get to a level of parity.

Coca-Cola continually have to spend billions for the reason that they need to be top of mind before anyone heads to the soda fridge to buy a drink. More expensive products from brands such as HP and Apple require more research, more information and aren’t impulse purchases. As such, they can advertise less.

The number one take out for me: You don’t to have great adverts or spend billions, you need to have a product people love. Apple makes so much revenue per ad dollar for the simple reason that their products are great. As a whole this can be seen for HP and even to some extent Microsoft.