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The Northern Spy
July 2004

Summer Days Are Here Again

Rick Sutcliffe

Ever been to a game for a team that hadn't been doing so well, and that all of a sudden pulled off a fantastic series of plays that got the fans all excited and on side? Ever had the whole crowd break out in

"Summer days are here again

Skies above are clear again..."

It's corny all right, but the Spy has been in crowds like that. The long time fans that suffered through the tough times welcome the new fair weather folks with a kind of grim "I told you so" satisfaction, hunker down in their seats, and dream of a Stanley Cup or a Grey Cup parade at long last.

Remember a few years ago when the MS folk could do no wrong, bands of circling press sharks relentlessly attacked Apple, writing obituaries on a daily basis, certain the company was about to join the technological scrap heap? True, Apple marketing was abysmal, so bad it wasn't even wrong, the executive suite was a merry-go-round, and some products ill-conceived, but most quarters even then were profitable, the Macs never all that far behind in speed, the prices never far ahead, the OS always better. Still, the pundits smelled blood, perhaps (like political columnists) thought they could make news happen, and were determined to write Apple's doom.

One still occasionally sees that kind of comment, but in today's context it appears so retro, so dated. And, while 2004 has not seen the spectacular introductions that 2003 did (G5, Panther), a lot of people at Apple and in dependent industries must indeed be singing these days.

WWDC was, as the Spy expected, less exciting this year--a return to business as usual. Of course last year, Apple owed developers some big ones, and Steve paid off, but the venue is traditionally used to consolidate business as usual, not to make big announcements, so this year's conference was cast in a more traditional mode.

As expected, Apple announced a new line of flat screen monitors, including a thirty inch cinema display and new twenty and twenty-three inch models.

All have the wide screen aspect ratio, sport dual FireWire 400 and USB 2.0 ports and a new aluminium design. The biggest change is the use of DVI to connect to video cards instead of Apple's proprietary ADC interface -- making the new monitors compatible with Power Macs, PowerBooks, and PCs, but requiring different cabling and power arrangements. Will we return to the days of switched outlets on the back of the Mac?

Also no surprise, Jobs unveiled the next OS, code-named Tiger. Following earlier-telegraphed intentions, the complete product will not be available for another year, and the details revealed so far are somewhat sketchy. One innovation is the use of the expose screen to introduce Dashboard and its "gadgets". These are similar in execution, though not in underlying technology, to Konfabulator "widgets", and are best thought of as resurrecting the old Desk Accessories. Expect a return to the days of much creative energy poured into the creation of clocks, calculators, mini-editors, communications wizards, and infopedias are can be plugged into this interface for quick access.

Other changes include enhanced graphics, new features for iChat and Safari, Sync, voice control, and AppleScripting, plus many under-the hood and not-yet-announced changes summing to the usual one hundred fifty improvements (give or take a few thousand LOCs). Expect the retail version at about the time of the next WWDC.

Garnering somewhat more excitement was the new AirPort Express, billed as an 802.11g mobile base station featuring wireless Internet connections, USB printing and both analog and digital audio outputs that can be connected to a home stereo, all in a 6.7 ounce package (an "ounce" is a unit of weight in some countries). Install one of your router, others throughout the house as WAPs.

Together with AirTunes music networking software, the package gives users a simple way to wirelessly stream music from iTunes on a Mac or PC to any part of their house. iTunes 4.6 automatically detects the remote speakers and displays them in a pop-up list. Wireless USB printing requires Mac OS X version 10.2.7 or later, Windows XP or 2000, and a compatible printer. The range is supposed to be up to 150 feet per station, with chaining extending this, though actual figures are likely to be much less. Apple claims more than 80,000 pre-orders.

The one rock in the stream of good news is the delay in production for the new G5-based iMac until sometime in September. Apple apparently miscalculated IBM's ability to deliver chips in quantity for the new machines, and allowed the current line to dry up, prematurely leaving them with nothing to sell for about three months. The Spy hopes this isn't a reprise of Apple's supply problems with Motorola, but is insufficiently paranoid to agree with the conspiracy theory folk who were out in force to suggest a plot by IBM to curtail Apple's growing popularity.

Also to come in August, according to some sources, is yet another new iPod model. Reportedly, these will have features and pricing comparable to the current larger (white) models, but in packaging and styling more like the minis. Unit sales continue to grow, nearly matching those of Macs, and Apple begins to resemble more of an entertainment conglomerate than a computing company. Will dollar sales of iPods soon exceed those of Macs? Interestingly, sales of iPods appear to be driving a switch from windows to the Mac platform that Apple's much touted ads never did deliver.

Apple's bottom line was affected in two ways. On July 14, the company announced a $61 million net profit for its fiscal 2004 third quarter ended June 26, 2004. That is $0.16 per diluted share, beating the "street" estimates by a penny per share. These results compare to $19 million, or $0.05 per diluted share, in the comparable quarter a year ago. Revenue was $2.014 billion, up 30 percent from a year ago, and gross margin was 27.8 percent, up from 27.7 percent. Apple said it shipped 876,000 Macs and 860,000 iPods during the quarter, representing a 14 percent increase in CPU units and a 183 percent increase in iPods over the year-ago quarter.

None too surprisingly, shares of Apple opened up nearly $3 from the previous close following Apple's report, recovering their losses from the previous three weeks.

The Spy notes, however, that Apple's apparent financial picture stands to be adversely affected when new accounting rules come into affect that require companies to cost stock options. Since the company has a higher than average exposure on this score, its reported earnings could be reduced by nearly 70% under the new rules, increasing PE ratios and possibly affecting stock prices, though savvy investors should already have taken this into account.

It's also worth speculating what Apple will do with its hefty and growing bank account. In recent times, the acquisition route has proven unpopular at 1 Infinite Loop, but if Apple is to further reduce its own dependence on MS, a productivity suite is essential, and buying a word processor and spreadsheet might prove attractive. There is currently little to lose vis a vis MS.

In other dog days news, the Spy notes that MS has now paid fines to the European Union ($613M) and the state of Minnesota ($5M cash and $177M in vouchers) to settle anti-trust cases. OTOH, this is chump change to Bill, but OTOH it may presage a day when he has to employ more lawyers than programmers. The Spy has long believed that software writers, manufacturers, and distributors will eventually be held legally accountable for flaws in the same way that makers of hard products have been for two generations. Once that day arrives, the billions accumulated thus far could melt away rapidly.

BTW, in case you were wondering what happened to anti-virus maker Network Associates, the company has changed its name to McAfee. It that sounds familiar, it's what NA was called before it became NA. Confusing? Well yes, but there's probably a reason.

Sometimes the law gets it right department.

Two recent court cases illustrate.

The U.S. Court of Appeals for the First Circuit's affirmed a district court ruling dismissing a criminal wiretap charge against Bradford C. Councilman, former vice president of Interloc Inc., a rare book listing service, that provided an eMail service to book dealer customers. In January 1998, Councilman instructed employees to read incoming eMail messages from rival book dealer Amazon.

He was charged with violating the U.S. Wiretap Act, prohibiting private citizens from intercepting communications, but appeals court Judge Juan R. Torruella wrote that U.S. law does not prohibit ISPs and other eMail providers from reading eMail on their servers. According to Torruella, the Wiretap Act gives wire and oral communication more protection against interception of stored communications than it does electronic communication.

"We believe that the language of the (wiretap) statute makes clear that Congress meant to give lesser protection to electronic communications than wire and oral communications," Torruella wrote. "Moreover, at this juncture, much of the protection may have been eviscerated by the realities of modern technology. We observe, as most courts have, that the language may be out of step with the technological realities of computer crimes. However, it is not the province of this court to graft meaning onto the statute where Congress has spoken plainly."

Note that part about eviscerating protection. Had Torruella ruled otherwise, it would have been an attempt to enforce stupidity, contravening the Spy's first law. Of course eMail isn't private. It can be read on any one of the dozen or so machines it traverses from source to destination. Indeed, to control spam sufficiently to keep systems working, it must be. Like it or no, eMail cannot be made private except by heavy encryption, and once quantum computers are available, even that won't help.

In a second case, Canada's Supreme Court ruled on June 30 that Internet service providers do not have to pay royalties to composers and artists for music downloaded by Web customers. The court said in a 9-0 ruling that Companies providing access to the Web are "intermediaries" and not bound to enforce Canadian copyright legislation. The Society of Composers, Authors and Music Publishers of Canada, or SOCAN, had wanted to force Internet service providers to pay a tariff. SOCAN also wanted to extend Canadian copyright law to offshore Web sites that serve Canadians.

This one couldn't have gone any other way. It's the owner of the web site you have to go after, folks, and unless she's a citizen of the country doing the enforcing, lotsa luck. For better or for worse, censoring the Internet is effectively impossible.

And sometimes we wonder

On July 15, U.S. District Judge Robert Lasnik struck down Washington state's ban on selling violent video games to minors, calling it an unconstitutional violation of free speech. The trade association representing the entertainment industry that sued to challenge the ban said it welcomed the ruling but would work with the state to make sure parents have enough information about the games to make informed decisions about their suitability for children.

Does this mean that there is no responsibility for what is published, for what is said? Seems to be the direction we're going, but the Spy thinks a society in which there are only rights and no responsibilities will be a very sad place.

And in a final shot, we note a Paul Murphy article on MacNewsWorld telling us what we probably already knew. Mac users are smarter than PC users. Of course they are. They read

--The Northern Spy

Want to discuss this and other Northern Spy columns? Surf on over to ArjayBB.com. Participate and you could win free web hosting from the WebNameHost.net subsidiary of Arjay Web Services. Rick Sutcliffe's fiction can be purchased in various eBook formats from Fictionwise, and in dead tree format from Bowker's Booksurge.


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MacNewsWorld Articlehttp://www.macnewsworld.com/story/35130.html

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