The real losers in the Apple-Samsung US decision

The real losers in the US Apple-Samsung decision
(and it’s not Samsung)

I am sure the jury in the Apple-Samsung US case followed the instructions carefully and did their job, but it reinforced to me that the patent system is broken. (Subsequent to writing this – people are questioning the 22 hours spent reviewing 109 pages and forms they were required to fill in AND remember a judge in the UK threw this out and made apple put an apology on their web site for 6 months)

The case exposes in detail how Apple conceives many of their innovative patents (none of which to me seemed truly groundbreaking – bounce to refresh, and pinch to zoom – hmmmm…). According to Apple’s testimony, they have a few guys in special super-secure section at Apple’s Cupertino HQ called the Purple Dorm, sitting around a kitchen table and banging out ideas.

Don’t get me wrong – I think innovation is terrific, but that some of these innovations shouldn’t be a case for a patent. Spend US$100m on developing and running trials on a new drug. That deserves a genuine patent.

There are guys in Pakistan, India, China, and Vietnam, all doing the same thing as the guys at Palo Alto kitchen table. They’re sitting in coffee shops, talking about innovation, but the difference is that Apple can then spend the hundreds of thousands of dollars on patenting those ideas.

Why I give Samsung credit!
Samsung does do something incredibly admirable, which Apple does not. Samsung produces a range of phones and devices which meet a wide range of budgets. Steve Jobs would say they he didn’t want to comprise the “experience” (or his profits). But Steve missed the point – that leaves a whole lot of people who will “go without.” Price is important in the third world and emerging markets, and Apple focuses only on the high-end segments.

Apple misses a huge potential consumer base by not being innovative in the low end. A typical Level 1 Philippine technical support guy will be lucky to be making ₱15,000 (US$355) per month. So a 16Gb iPhone 4, which costs $649 in the US, is far out of his/her budget.

In these emerging markets, Apple has “re-launched” the iPhone 3GS, but at US$350 it is still 3 to 4 times more expensive then an entry-level Samsung phone running Android.

And if the local telcom subsidizes the cost of the phone? The price of the phone still has to be covered one way or another – so the plans are still well outside the amount the locals can pay.

So along came the Android guys with smart phones starting at US$70. Sure, they have neither the same big screen nor the immersive experience, but they bring technology to a market that cannot afford the high-end iPhone – I think that is important.

Perhaps the guys in building Purple Dorm should be figuring out how to produce a phone which can appeal to the masses and not just one sector of the market (which they then want to lock up at the expense of everyone else).

Another Story
As a matter of interest, a 64Gb iPhone 4S costs a whopping 37% more in the Philippines than it does in the US. As you can see below, the differences are huge – but that’s another story.

Model  –  US  –  Philippines  –  Difference

16Gb  –  US$649  –  ₱37,690 ($894)  –  US$245

32Gb  –  US$749  –  ₱43,490 ($1,031)  –  US$282

64Gb  –  US$849  –  ₱49,290 ($1,169)  –  US$320


Note: The author’s first job was working for an Apple reseller. He currently owns and collects *LOTS* of Apple computers, uses an iPhone 4S and Galaxy Note, and is fast becoming a fan of Ubuntu.




Ink-Jet Nirvana

Six months ago I thought I had found it: Ink-Jet Nirvana. A land of never-ending rainbows of inexpensive colour.

Ink-Jet printers have revolutionized colour printing. It didn’t take long for printer manufactures to develop a winning business model: they nearly give away the printer, but the ink cartridges cost you an arm, a leg, and three of your offspring (and I mean the good offspring – not the ones that are going to wind up in prison).

Now, I am ok with this subsidized model except for the fact that they give you an infinitesimally small amount of ink. I guess the ink must be made of rare-earth minerals, which is why it is rationed with an eye-dropper. Not to mention that can anywhere between two and seven cartridges will all seem to need replacing at the most inconvenient time. And as soon as you replace one, there is another flashing light.

Hoarding didn’t work…
And don’t try to buy cartridges “on special!” and store them. I had an unused HP ink cartridge that when inserted told me it had expired: “The old ink might damage the print head, please insert a NEW cartridge”. Bloody hell, guys, it’s one thing to charge me a small fortune for the cartridge, but limiting the life of the cartridge using the lame-o excuse that it might damage the print head is highway robbery. If you’ll remember – the printer cost me next to nothing; why I am worried about damaging the print heads? I’ll just get another one – after all, they’re almost given away!

Clone cartridges didn’t work…
Next, I tried using clone cartridges from China. These typically include a box-cutter blade so you can cut the IC chip off the genuine ink cartridge and stick it on the clone with the enclosed double sided tape. This never seemed to work reliably. My HP wide-format printer always seemed to know when I was trying to fool it.

Bulk Tanks didn’t work…
I have also tried several aftermarket, bolt-on ink tank solutions – all with disastrous consequences. Not only have I destroyed two printers in attempting to install these tank systems (that’s ok they didn’t cost me much) but if you get a leak…it’s a tech problem that just “keeps on giving.” The bottom of the printer fills up with ink, the print head moves and sloshes the ink everywhere, and in your haste, you try to move the printer and ink overflows everywhere. I still have ink stains on my desk, walls, floors, and rubbish bins. Unmitigated Disaster.

Bulk ink system - get an expert to install :-)

Hello, Epson L100!
The folks over at Epson have created a printer that includes bulk ink containers on the side. There are trying to tap the price sensitivities of the local market. “Hassle Free and Ultra Low Running Cost with Super High Ink Capacity” is what the box says.

The printer itself costs about US$180. It is a narrow format A4, and its print speed is 27 pages/minute. There are four ink tanks: cyan, magenta, yellow, and black (black is a double sized tank).

Now this is a pretty simple printer: no LED, no display, no fancy micro chip readers to make sure we’re using genuine Epson ink. But before you go and get all excited (like I did)…there is a catch.


The Catch
The printer driver (the software on the PC) requires you to enter the 13 digit serial number on the bottle of ink. So they still want you to buy ink. I can live with that, but it’s a pain in the arse to enter them all, and we had to find some workarounds for our ubuntu workstations. To Refill we just swap the printer out (see below)

So what is the bottom line?

The ink is about $6 bottle for 70ml. I can live with that. It works out to be a cent for grayscale printing and two cents per colour page.

We have about 10 of these now through out the office.

There is no ethernet port on the L100, just USB, so we use ethernet to USB servers, which work well. If there is a hint of a problem with a printer, a serious paper jam or the ink needs recharging, we just swap the printer with a spare and the techs fix it or recharge the ink later. The advantage with the ethernet/USB is that you are not changing the IP address of the device when you swap out printers.

There is even a tap on the printer which is used to turn the ink off so you can move it without the risk of ink leakage.

As foolproof as the Epson L100 is, I still managed to brand myself. (Maybe this is a sign that I should go colour laser.)

In a business like ours that is growing fast and doubling our staff numbers every 3 to 6 months, we obviously encourage our staff to work paperless. Sometimes, though, it just isn’t an option. When printing is a must, we need to do it as cost effectively as possible, making the Epson L100 is pretty good option.

So there you have it, this is not an article about how to rip off your Ink Jet company but more about they ways some organisation configure their product to sell into emerging markets.