Nah

July 7, 2007:

WATERLOO–If Jim Balsillie is concerned about the arrival of Apple Inc.'s much-hyped iPhone, he's doing a good job of keeping it to himself.

The co-CEO of Research In Motion Ltd., which makes the popular line of BlackBerry email devices, said in an interview at RIM's Waterloo headquarters that he's not losing sleep over Apple's efforts to upend the wireless market in much the same way as its wildly popular iPod music devices changed the way people acquire and listen to music.

In fact, Balsillie said he couldn't even confirm whether anyone at RIM's sprawling campus has managed to get their hands on an iPhone, which went on sale in the United States a week ago amid a torrent of media coverage.

"I haven't seen one," he volunteered with a shrug of his shoulders and a bored expression.

"It's possible, I guess. I mean, you watch these things, but you really have to just focus and do your job."

Focus and denial can bear a strange resemblance Jim. RIMM investors, Munster Nation welcomes you with open arms.

Episode X: Symbians Battle the Androids

Episode X: 

Symbians Battle the Androids

It has been many years since the mighty Empire fell to the great

Knight OS X. OS X has since reformed The Order and become 

Grand Master of the Universe.

Peace has reigned and the Grand Master has prospered. Yet, just when OS X 

believed he would never again be challenged by the Dark Side, more news of 

the Symbian's feeble efforts to destroy the Force is delivered to him.

But lo, the Symbians must battle the Androids first, and they will suffer many hardships 

on the planet Google.

The news emboldens a vision in the Great Master . . . and the seeds of a grand plan begin 

to grow . . . .

Today's 'Droid Flareup

I've previously mentioned it here and here and here.

But today Google requeued the tape and played it again.

Looks like developers and carriers are now openly playing "Avoid the Droid".

Geez, I'm a broken record

Blockbuster or Netflix?

iTunes, by a mile.

Two Slot is on the Ropes

A call came through on the Piper land line from Cramer.

"Geno!"

"Cramer."

"I need some help pal."

"You bet. What can I do for you?"

"Schnitchel your $250 target on Apple Gene."

" Huh?"

"I told Cramerica to dump 75% of their Apple stock."

"You did what?"

"Just before Apple's annual lovefest. You probably saw it."

"Uh, I don't watch your show . . . ."

"There was too much hype about the iPhone! Now the stock is bouncing, so yesterday I had to use the Job's health scare nonsense. It didn't work! The stock went up. You gotta help me. I'm looking like, BAD, on that call."

"Geez Jim, I dunno. $250 might actually be low . . . did you see all those countries Apple will be selling into? GPS. Push mail. Everybody in the office wants one."

"I need some advice Gene. You have NO IDEA, NO IDEA."

"You're right. I don't. Good luck Jim."

Churn Baby Churn

Now Cramer's trying to save the banks with the Satan of last resort saves: Commissions. The retail nick is always the lowest card in the deck.

So, not only does he recommend selling Apple, but he recommended selling it in TWO transactions. Then he goes on to recommend a third transaction -- buying some back again tomorrow (minus what you'll need to save to pay capital gains) if the reviews on the new iPhone are good.

Check out the video clip for what passes as good investment advice these days. Note that Two-Slot can't recommend a better place to put that 75% of AAPL (other than Apple -- buy it back tomorrow) that he says you should sell.

Donkey quote: "I'm not a technologist ok."

Why does anyone listen to this guy?

The Beta Fraternity Weighs In

Apple has been on our Piper Jaffray Alpha list for months. Team Munster has a 'Buy' and $250 target on the stock.

The New York boys are late to the party again. They have to wait for Team Munster to do the research; then they choke it down and thrash around before they cough it back up.

Ask Team Munster (TM)

Q: How are Shaw Wu and Apple alike?

A: They are both all over the map

Am Tech's chump analyst downgraded AAPL to "hold" and lowered his target just ahead of the April 23rd earnings announcement. Six weeks later he suddenly upped his rating to 'Buy' and set a $210 target on the stock. Here's the psychiatric profile on Wu, and it's from a blogging source you can trust. With a name like Zach Bass you know he's at least a quarter Minnesotan.

So how is Apple all over the map? Check this out.

RIM Puts a Nickel in the Parking Meter

Research in Motion, Thomson Reuters, and Royal Bank of Canada each ponied up to create a $150 million fund to bribe iPhone developers to port their software to the Blackberry.

It's a start -- about 15 minutes worth. They need to be careful. Those meters will bleed you worse than a trip to Leech Lake

Gonna Make Me Say It Again?

Blockbuster or Netflix?

iTunes

Aw Shucks

AppleInsider Poll

Who do you think is the most accurate Apple analyst?

Gene Munster (Piper Jaffray) 57.4%
Shaw Wu (AmTech) 13.2%
Rich Gardner (Citigroup) 10.5%
Mike Abramsky (RBC Capital) 7.0%
Ben Reitzes (Lehman Brothers) 5.0%
Tavis McCourt (Morgan Keegan) 2.7%
Katy Huberty (Morgan Stanley) 2.6%
Scott Craig (Bank of America) 1.6%

Total votes: 741

Conference Calls and Komodo Dragons

You can listen to it here.

Listen to the summary on the front end and skip to my line of questioning about half way through.

For the rest listen to Bob and Ray's classic, "The Komodo Dragon", second from the bottom on this page.

P.S. Microsoft saying they are being "cautious about the economy" is dishonest. They know what's really happening, and so does Munster Nation.

Wu Wu Ch'Boogie

Headin' for Fast Money with a pack on my back,
Tired of chump analysts handin' Apple the hack,
I love to hear the sound of hedgies gettin' the sack,
And see their hands a tremblin' as their sellin' their crack,
Blabbering such nonsense cause they don't know Mac,
So, I set them right back with the facts, Jack!

Wu wu, wu wu, ch'boogie!
Woo, woo, ooh,ooh, ch'boogie,
Choo, choo, choo, choo, ch'boogie,
I set them right back with the facts, Jack!

Amusing Ironies

Nokia's CEO says the iPhone is just a "niche" product. He added that Nokia is working to have an iPhone clone available the second half of 2008.

Marketwatch appears to be doing it's US economic reporting from Amman, Jordan. Folks I'm not outsourced . . . still in Minneapolis USA.

Merrill Lynch posted write downs of $2 billion for the first quarter and 4,000 in job cuts, but the CEO said the core business is fine.
Viv wants to know how much diesel they have left in the backup generator.

Watch out for the currency translation effect this earnings season. IBM got a boost (which got shoved under the rug) but Nokia took a hit (and you'd have to be deaf and blind not to know).

You're Welcome

Did you see me raise the average IQ by two hundred points on the Fast Money set? Heh. Just being on that show is a risk to my reputation . . . how about that Wallenda remark from Macke the Knife? Uff Duh.

You probably wonder about my connection with the Taiwanese suppliers. Let's just say it's good business to have a hot female Chinese language speaker on the team (thanks Viv). She rocks in Minnesotan too. Never, ever underestimate the Minneapolis-Asian connection. Northwest Orient is headquartered here. Go ahead, Google it. They dropped the Orient but we've been making tracks to Asia better and faster than anybody since the 60's.

One more thing to consider. Remember when Apple lowered the price on iPhone and customers threatened a nasty brawl? The rebates?
This time could they be selling off existing stock to give the market a little breathing room? Think about it. When the 3G is released Apple will sit in the fast innovation penalty box for five minutes vs. getting run over by the zamboni again. Staying ahead of the puck. That's what this is about.

Hey it's not like I've been sitting around eating bon-bons.

I know, I know, I've been remiss in posting to the blog. But friends I hope you now understand. We've been working on the report for weeks, and the team made me promise to stay focused and lay off the blogging until it was done.

Well, I hope you will forgive me. And I hope you like the report. 45 millions phones are in the bag for 2009.

So bring it on, fud-slinging nay sayers! You will be proven wrong yet again. Did the iPod teach you anything?

Air is adding to mac sales... who knew?

This just in!!!!

Apple saw particular strength in notebook systems, which rose 64 percent in units and 67 percent in revenues, suggesting strong sell-through of the company's new MacBook Air, noted Hargreaves.

"Macbook Air sales appear to be additive to total sales, rather than replacing Macbook Pro sales," he said. "We believe a new set of corporate customers make up a meaningful portion of MacBook Air buyers."

Gee now let's see, didn't we hear something about that being the case? Back in February I think it was...

Oh yeah that's right, it was ME!

Why iPhone Will Storm Enterprise

People have been asking me why Apple would license Microsoft Exchange ActiveSync. Analysts at Tidbits.com say it best:

"Apple surprised many industry watchers by announcing that they'd licensed Microsoft Exchange ActiveSync from Microsoft, as Apple rarely licenses anything that's core to their purpose. But in the enterprise, Exchange is one of the kings, and Apple had to pay obeisance to get the pieces necessary to perform robust synchronization and communication. With full Exchange support, Apple can directly take on Research in Motion (RIM) and its BlackBerry communicators. Apple took aim at RIM by criticizing their single-point-of-failure approach to having all email and messaging pass through RIM's servers; two recent brief failures have highlighted RIM's vulnerability. In Apple's approach, the iPhone will communicate directly with the enterprise's servers."


Security and dependability matter. Which system would you choose for your business?

AAPL Target: $250

She'll be OK, I think

Thanks to Viv for the magnolia tea tip. And thanks for all your concerned emails. Even the one from "AAPL Anna" up in Mille Lacs. The lady offered to run down with dried "infusion" leaves from her magical fence screener plants (Yah, can you believe it? At the next cc I'm gonna ask why there's no background checking on Apple shareholders.)

Anyway, Violet was so agitated by the time I got over there she insisted on calling her lawyer. She wants to start a class action against Sprint.

So I had to tell her Sprint has a big ass hole in their bucket.

That didn't go over very well. OK . . . it was a disaster. So I'm blogging from Regions ER . . . they say it will be just five stitches.

Oopsie Daisy

My cousin Violet is a sucker for deceptive TV ads.

By age three (1988) we had the diagnosis. It was the year of the "Oopsie Daisy" fad, a "smart" doll that crawled, fell down, cried "Mama", then righted herself and continued crawling.

Saturday morning TV Oopsie ads were Violet's gateway drug. Cue the music to "Pop goes the Weasel". "Oopsie daisy's learning to crawl, she's such a pretty baby...oop! oopsie daisy!"

To sane adults -- which her parents were at the time -- it was nauseating. But little Violet HAD to have that doll, a fact she reminded her parents about until it drove them to distraction.

So on Christmas morning, 1988, her father took it from the box and quickly installed two C batteries (while Violet was jumping up and down and holding her crotch). Dad turned on the doll and set her into crawl position.

Violet started screaming. The relatives were baffled, and had trouble yelling over the gear grinding noise coming from the toy. The same noise that was scaring the bejeezus out of Violet. She began to cry. "That wasn't on the TV commercial", she wailed.

The Oopsie Daisy Christmas was just the beginning. No matter how hard we work as a family to help her overcome this addiction she periodically falls into the trap.

So Violet saw the latest Sprint Blackberry Pearl "smart" phone ad, the one that features a guy on a moving sidewalk in an airport. He's using a combination finger/laser pointer to write words in the air, which are magically transmitted as text messages or email or something.

Violet bit for it. You bet, I got the call this time. Her parents couldn't be bothered; they were busy logging on to hypnosisdownloadsfortraumatizedparents.com.

Anyway she said it's all Apple's fault. After all, they show how the iPhone works on their TV ads, with the touches and all. The Blackberry ad didn't have tiny print disclaimer on the screen, you know, "Dramatization -- don't try this at home" or whatever. Violet assumed Blackberry had honestly invented air writing to beat iPhone. It looked so cool, she said.

Ugh. I'm going over with oolong magnolia tea to help Violet through this latest "oopsie" episode.

Those Berenstain Bears!

Folks I've mentioned the Berenstain Bears and their imploding tree house here numerous times, so when Toni Sacconaghi blustered about missing iPhones and iPod sales recently I didn't even bother to mention it.

Yes, the chump analyst spoke out of turn.

Stay the course investors. Great things to come.

So last week I called Apple

and offered to send TC to the Goldman Sachs Tech Symposium. Joanie, in Investor Relations said, "It's ok, we've got him. He can hit. He can pitch. He can make a triple play." Imagine my surprise when it turned out to be Tim Cook. And oh yes, he hit it out of the park.

Papparazi Task Force

Thanks to all the Minnesota Oscar winners. I can move around town in relative obscurity for a couple weeks.

Hey, how about them Coens were trying to low key it? They'll be hiding behind Diablo as they trot through the airport (after all, the shine is off the Craig Memorial Men's Bathroom Stall). Heck, them Coens are pretty smart. They bought into Viv's set up to get Diablo Cody into a Wilma Flintstone dress. Ex-strippers from Minneapolis in bad fashion will trump. Folks are already starting a pool to guess the location of the other tattoos. You bet, the local Pap will be swilling her faster than frat boys on a keg.

Hang in there Apple investors.

Apple announced a new product recently, and it's selling, and not cannibalizing other product sales --- Good, right?

Wrong. The media types *cue Jaws music here* have to "angle" it, and what better way than by comparing the new product's sales to another existing blockbuster seller?
The result is here.

Katie buried the Munster money quote at the bottom of the article: "[For these] reason[s] resellers indicate that sales of the MacBook Air have been additive to their overall Mac sales in the quarter," Munster advised clients. "The MacBook Air addresses the need for mobility unlike any other Mac, and as such we believe it is not cannibalizing sales of other Mac laptops."

Better headline: Apple Taps New Mobility Market with MacBook Air.

Motorola Dead, Nokia in Denial

and strangled chokes are emanating from the Blackberry company (RIMM):

"Clear! Clear!"

Research might be in motion, but disaster recovery needs to check into rehab.

New Charity Buyout Candidate: Sony

See here. The author wonders out loud why Apple doesn't just buy Sony.

You betcha -- Apple is dying to buy Sony to get their hands on that advanced joystick technology. Does the writer work for Microsoft? Because buying Sony would be the fastest way to dilute Apple's focus and slow the innovation machine. Apple management isn't a bunch of whiplash sadists foaming at the mouth to experience the pain of Sony's culture. Yah, Mr. Pesek, you got that one right.

Recently Rumored Apple Buyouts

Takeover Target	Less Obvious Reasons to Buy (Compliments of Team Munster Research)
Yahoo!	Just to piss off Microsoft
Palm	1. Newton Nostagia Move 2. Ensure the historical preservation of gray-on-green screens
Disney	1. Burning desire to build "his and her" Minnie and Mickey Macs 2. To piss off Time Warner/AOL
Nintendo	1. Convert old joystick technology to multi-touch 2. To piss off Microsoft
TiVO	1. Rhymes with early prototype codename for Apple TV, which was "STEVO" 2.To piss off Comcast
Napster	1. To hold customers hostage for monthly rental payments 2. After all, loan sharking is illegal
Motorola cell phone biz	1. College marketing interns wanted to work on selling ROKR ("we can sell it, we know we can!")
Universal Music	1. iTunes has already captured all earthbound music 2. To piss off RIAA
Sun	1. Revenge against IBM for the G4 processor 2. To put it out of its misery.
Adobe	1. To kill Flash 2.To piss off Microsoft
Sprint/Nextel	1. Idea from the young engineers at Apple -- they missed Walkie Talkies the first time around
Google	1.Why buy Yahoo when you can get the Alpha dog? 2.To piss off Microsoft

Droids are Lost in Space

As I've previously mentioned and re-mentioned, the Google Android smart phone software development effort is a teen skateboard-park project.

Latest news is the deadline for the Developer's Challenge (aka "Developer's Nightmare") has been delayed due to significant updates to the SDK (System Developer's Kit).

Anyway, if you didn't know this was going south the day they announced the whole thing, it was crystal clear when they implemented an "Issue Tracker" system. This is never a good sign, because these systems don't get installed until there are about 150 "issues" piled up in the queue. Trust me on this. I've been there.

And Viv -- God Bless her because she's always right about these things -- said "Gene, anything with "roid" in the name is gonna be a pain in the butt. Guaranteed."

You betcha, she called it right (again).

A New Vista!

It's called Yahoo!, and Microsoft hopes it will be delivering Net-based applications to a machine (which will likely be running Mac OSX or Linux) near you.

They paid $44 billion for this latest shot in the dark.

It's not over until Klondike Kate sings

See here.


And is it just me, or did the losing Klondike Kate contestants show up at the Queen of the Snows competition?

Last one out, turn off the lights

Well, is Palm's CEO Holigan still so sure that the " "PC guys are not going to just figure this out. They're not going to just walk in''? Seems Palm is closing virtually all their stores. Must be because sales are killing?

The company's biggest threats may be its rivals. Research in Motion's BlackBerry smartphones have proven extremely popular with businessmen and other professionals, while the general public is taking to Apple's iPhone, favored for its storage and simpler user interface despite a $400 pricetag. Analyst Avi Greengart of Current Analysis argues that while Palm is by no means out of the fight, the company's prospects may depend on the release of a new Linux plaftorm, expected by the end of the year.

Linux. Yeah, that'll do it.

MOT. PALM.

RIM, are you watching this?

OK, Chew On This: Did CDs Survive iTunes?

Apparently not. Money quotes: '"I sure am going to miss the CD," said Paul McCartney, whose Beatles are one of the last groups to refuse to sell their albums on iTunes. "On the bright side, new technology means that Beatles lovers now can buy our albums for the third or fourth time."' Among reasons to ditch CDs: "No more cellophane wrap. Those genius scientists figured out how to cram 10,000 songs onto an iPod small enough to hold in your butt crack, but could never invent a plastic wrap on CDs that didn't take minutes to get off, dangerously heighten your blood pressure and occasionally require stitches when you resorted to scissors."

Will Netflix Survive iTunes Movie Rentals?

That is what Seeking Alpha wants to know.

No.

Apple Earnings Sucked Into Black Hole

and the focus was on guidance, released into a blinding snowstorm and hastily gathering energy. Sell orders triggered more sell orders. Prices collapsed as a distressed market fed on itself.

Risk management and stop loss systems around the world had been triggered by Societe General's sell actions early in the week.

Financial institutions with liquidity problems have put their traders on a "short leash", leading to imposition of daily trading limits which shorten investment horizons. Think of troubled hedge funds and institutions. Naturally they will take measures to protect themselves from what has increasingly become daily news shocks (bank write downs, rogue traders, subprime/housing news, falling dollar, dogs and cats living together).

Naturally such institutional actions exacerbate volatility in markets.

So, you betcha, this driving wind is fear of the future -- fear of liquidity shocks, fear of recession and falling consumer spending, fear of rising oil and commodity prices, etc. These events may or may not come to pass but fear of them causes a run on the equity market today.

And, don't cha know, many good companies with excellent fundamentals and growth prospects are caught up in the blizzard.

But snow melts. Spring will arrive. Now it's time to venture across the river and visit Winter Carnival.

The French Connection

Rogue: Having savage or destructive tendencies

French Rogue: Ditto, on a global scale

Bottom is in

How do I know? Client emails which include:

•Wall Street is nothing but a bunch of crooks!
•I am writing a letter to Apple IR!
•Why isn't Steve releasing a PR to defend us?
•I just threw up.

I saved a spotlight search that looks for these terms in my inbox, and sure enough they coincide with the bottom of the other aapl selloffs.

Nutsy Cuckoo

I got an interesting response during today's conference call to my question about the high end consumer's health as it relates to Apple's projected business results in 2008. Oppenheimer pointed out that revenue growth was 27% in US and 46% OUS last quarter.


So . . . any other consumer products companies with these results in the holiday quarter? Anybody? Bueller?


His point: Apple showed outstanding strength in the face of a challenging economic environment. Is it likely to continue?


Judy says the market reaction after hours was "nutsy cuckoo".


I agree. Time to go shopping.

Weekend Musings

Why do so many business books use the word "Shark" in the title? Viv noted this phenomenon the other day, in titles such as Invest like a Shark, Swim with the Sharks, The Way of the Shark, Snipers, Shills and Sharks, Shark Tank, How to Beat the Sharks, The White Sharks of Wall Street, How to Beat the Money Sharks, Doing Business with Sharks, Flame-broiled Shark etc., etc. She recommended "Shark Repellent Investing: Avoid Nasty Bites in Your Portfolio" as my first book title. She says that the book will "write itself", and a shark title all but guarantees sales.

Hey, does anyone in management notice that the twelve hour, "your attendance required" seminar called "Work and Life Balance" creates twelve hours of catch-up work at the office? Not to mention a bottom- line deficit of 24 hours of your life wasted -- 24 hours you'll
never get back.

Munster Nation Tip: Always hire good people with rare and unusual talents (multi-linguists, track stars, hog-calling champions). This might not seem important at first. But at some future date a uniquely-talented employee will use theirability to give you an edge. Recent example: I have sharpshooter (extremely far) eyesight. This comes in handy at MacWorld keynotes. I can read the plethora of notes hastily scribbled in the margins on Steve's script, way up there on the stage.

As practiced as they seem, these talks are really off-the-cuff fare, and "loose cannon" Steve's handler's are worried he might lose it and go off-script. After all, the guy is past 50, so anything can happen. Anyway, to prevent disaster the margins are filled with stuff like "don't reveal iPhone sales numbers x,xxx,xxx!" and "NO telling Macbook sales y,yyy,yyy!" and "NO, don't mention products Z and ZZ yet!".

Oh yes. Corn is still in season.

Andrew says he won't miss the house flipping channel

that he was forced to purchase with his bundled cable TV package. Judy says she never watched Spike TV either. But they anted up for those lovely "value added" channels because they're included with the "package" they needed to get the one channel they really wanted.

Thanks to iTunes, we can buy 99 cent singles.

Like iTunes, with over 4 billion sold to date, Apple TV will become the new standard for on-demand video consumption.

MacWorld keynotes are as much about what Jobs doesn't say as they are about what he explicitly presents.

Viv says he's like a great mystery writer. He plants clues, and the savvy reader is richly rewarded.

Read, Munster Nation, read well.

Stay iTuned

To recap:

Netflix or Blockbuster?

Blu Ray or HD-DVD?

Apple.

Well done Steve. You've herded the Hollywood Cats.

Best of Show at CES

Julio at Pioneer Press named the top 15 tech products presented at last week's Consumer Electronics Show (CES).

Clearly he had some tough decisions to make.

Roughly Drafted "gets it"

"With Bonjour Ready, it will be as if the web transforms from a huge cloud of millions of websites to also become a series of local clouds that vend tailored information and services. Other hardware vendors can barely manage to develop local web administration pages for their wireless routers and other devices; Apple has already solved the problem of simple administration of its AirPort devices, including remote management of lots of devices. Apple’s lead in wireless networking is often overlooked. It shouldn’t be."

Full article here.

Not that I believe in conspiracy theories

but here's another one. In the WSJ I'm quoted as saying: "Given the fact that the pace of Apple product improvements is between two times and four times faster than PC-based products, Apple buyers will always have a higher degree of buyer's remorse," says Gene Munster, an analyst at Piper Jaffray. What I really said: "Given the fact that the pace of Apple product improvements is between two times and four times faster than PC-based products, Apple will always have higher-pedigreed buyers, of course."

Uff Duh.

Don't Panic, Munster Nation

The guy at the Star Tribune tried to paraphrase what I said and, well, what can I say? He gets it wrong sometimes. Viv reminds me that any publicity is good publicity. Right. Here's the article. Anyway, please visit these guys at MacWorld. They're from North Dakota. They need your support.

So there's a line where Lee writes, "Munster says he finds it odd that Ntractive would target such a small market" (small businesses on Macs). What I really said was "I find my iPod attractive and the competition targets such a small market." You see how things get messed up in these dang phone interviews. In their defense, the Strib cut their staff a while back and they're doing their reporting on the cheap. What can I say except that he did follow it with a statement about how Apple market share is growing. But then again, he also omitted my money quote: '' Microsoft Vista is a dog that don't hunt."

Met with Paul at APS

Well after Paul's email about the Apple Peripherals Show, I thought I'd go take a look for myself. Yep, it's just like he said, and I told clients as much as Elmer Fud blogged about.

GS Plate Techtonics, Part 2

So Goldman tried for another volcanic event today. Since you've been reading this blog you all know how dependable their calls are.

Anyway, today they said we're in a recession. Apple stock went up 5%.

Honestly those guys don't know obsidian from pumice.

Starbucks' Extreme Makeover

It's today's office pool (courtesy of Judy).

What will Howard Schultz, comeback Starbucks CEO, do to "re-ignite the emotional attachment with customers"?

My choices are:

A) No brainer stuff: Shut down underperforming stores (Shhh. We've saturated the market for pricey lattes, but don't tell the shareholders)
B) Low risk: Offer hand waxing, back waxing, pedicure, or other spa "mini-services" with each purchase of two beverages
C) Medium risk: Free windshield wash and tire air pressure check at the drive thru window
D) Big Time Risky: Replace Tall, Grande and Venti with Small, Medium, Large beverage size choices
E) Huge innovation: Offer free internet access instead of T-Mobile restricted

There's also an "other" (recommend your own makeover idea) category. Anyway we don't cover SBUX, so I'm thinking of investing a dollar here. I'd appreciate any Munster Nation ideas.

Gates: See Ya

Here's what he had for the MS-Faithful tonight:

"The trend here is clear: all media and entertainment will be software-driven. The first digital decade has been fantastically successful."

Bill, Bill, Bill. No matter how good the driver is, every driver needs a great vehicle to drive. And that's why Apple is coming on like gangbusters. They've got the software and the hardware. Maybe it's best you watch this next chapter from the cheap seats. I'm sure Ballmer will do just fine.

Take care, Bill.

The writing is on the wall when

the owner of Down in the Valley indie record stores (Steve Hyland, Minneapolis) says "My kid's got 1,000 songs in his MP3, and he didn't buy any of them from me."

See here.

10 to 1 he could keep his store going if he transitioned to Apple peripherals and iTunes cards. Even the big boys like JVC know that's the way to survive.

Stay iTuned.

CES=School Science Fair, or Apple Third-Party Show?

From Paul...

Hey Gene, decided to rent a car a drive to the CES. I took a walk around yesterday, and let me tell you it's bleak Gene. The stuff looks old. Fujitsu has a tablet out that looks like the Pismo! Remember that Powerbook? Here look:






So where does that put the designers.... about seven years behind Apple? Yikes. Actually I think the Pismo still looks better, don't you? But hey at least that's more up to date than Grundig. They've got a "new" shortwave radio out.

There's a bunch of little robots and helicopters all over the place. The whole thing reminds of my grade school science fair. On the plus side, it's starting to become more of a showcase for third party Apple stuff from companies that want to reach folks who might not go to macworld. Here, check this out:

Gates is speaking tonight. I guess it's his last time. They've been trying to paper the hall all day to get him an audience.

Well, that's it Gene. I'll let you know if I spot anything good that isn't somehow related to Apple. Not looking too likely though. Hey maybe they'll just change the name next year to the Apple Peripherals Show (APS).

~Paul

Just when you thought corn was out of season

Well what do you know! My grocer just got a truckload of sweet corn in, and it's on sale!

You know my mantra with corn sales: Don't load the cart all at once.

Happy shopping.

Doug, Doug, Doug

Pop Quiz time Doug Kass, based on your oh-so-bearish article.

So, what do the PC companies do? Probably add lower prices to new features. Macs are expensive. A recession is probably coming. "Cool" may be nice, but not when a consumer can't afford it.

Which is tougher: (a) reversing your loss of market share with wannabe products that can't get any cheaper because your margins are already stretched too thin, or (b) going from 5% market share to 10% with the best computers and added-value software in the world?

Did you pay any attention to what was happening in December? For God's sake man, pay attention during the next two weeks. More strikeouts at CES, and then Steve will step to the plate with the bases loaded.

Hastings of Netflix joins the Denial Boyz

"If (Apple) does what has been reported, they will reach a very big market," Hastings said. "But the addition of Apple to the rental market isn’t causing us to lose any sleep." ~Reed Hastings, Netflix

"The co-CEO of Research In Motion Ltd., which makes the popular line of BlackBerry email devices, said in an interview at RIM's Waterloo headquarters that he's not losing sleep over Apple's efforts to upend the wireless market in much the same way as its wildly popular iPod music devices changed the way people acquire and listen to music." ~Jim Balsillie, RIM

"We've learned and struggled for a few years here figuring out how to make a decent phone,'' he said. "PC guys are not going to just figure this out. They're not going to just walk in.'' ~Ed Holigan, Palm

"We're expecting a good fight but they're coming out with something [iPod Shuffle] that's five generations older. It's our first generation MuVo One product feature, without display, just have a (shuffle feature). We had that — that's a four-year-old product. So I think the whole industry will just laugh at it, because the flash people — it's worse than the cheapest Chinese player. Even the cheap, cheap Chinese brand today has display and has FM. They don't have this kind of thing, and they expect to come out with a fight; I think it's a non-starter to begin with." ~Sim Wong Hoo, Creative

"Screw the nano," said Zander. "What the hell does the nano do? Who listens to 1,000 songs? People are going to want devices that do more than just play music, something that can be seen in many other countries with more advanced mobile phone networks and savvy users," he said. ~Ed Zander, (formerly) Motorola

"There's no chance that the iPhone is going to get any significant market share. No chance," said Ballmer. "It's a $500 subsidized item. They may make a lot of money. But if you actually take a look at the 1.3 billion phones that get sold, I'd prefer to have our software in 60% or 70% or 80% of them, than I would to have 2% or 3%, which is what Apple might get." ~Steve Ballmer, Microsoft

""We're going to be communicating to people that it's stupid to buy an iPod." ~William Gorog, Napster

And of course....when asked what he would do if he were Apple's CEO:

“What would I do? I’d shut it down,” replied Michael Dell, “and give the money back to the shareholders.” ~Michael Dell

CNBC's new year's resolution

Take a look at the "guests" on CNBC this morning: Najarian, Cramer, Deutsch. Hey, don't they all have shows on..... CNBC? A little too inbred for my tastes. I think they better get back to the markets. Having me on the show soon would be a good start.

Think Fox has 'em a little shook up?

Choices, choices

Netflix or Blockbuster?

HD DVD or Blu-ray?

Apple. Stay iTuned.