Category Archives: Companies

Five myths about Apple’s tax avoidance

Tuesday’s hearing on Apple’s tax avoidance schemes made for pretty good Washington, D.C. theater. Apple CEO Tim Cook was friendly and forthcoming and most of the senators went out of their way to proffer their love of Apple products. So I doubt the hearing will help advance the much needed cause of corporate tax reform — probably the opposite. But Cook & Company also left the public with more than a few misconceptions, which I will try to clear up.

MYTH 1: Apple doesn’t owe U.S. taxes on its sales outside of the United States

U.S. tax law is clear. U.S. companies must pay corporate income tax on all profits earned anywhere in the world (here’s a good primer). The same is true for ordinary folk – if you have overseas income, you still owe Uncle Sam. There’s a credit for taxes paid to other countries and, for companies, an option to defer taxation until the money comes home. But the law of the land is U.S. taxation of worldwide income. Of course, the option to defer has long been abused, which leads to the next point.

MYTH 2: Apple is following the spirit of the tax laws

John F. Kennedy must have been rolling over in his grave when Tim Cook uttered this one. When multinational corporations avoided paying income tax by sending profits overseas and using sneaky methods to bring back the cash, President Kennedy pushed Congress to close the loopholes and we ended up with a 1962 law known as “Subpart F.” The very core of the law is to look past corporate shenanigans and tax overseas profits. Sound familiar? That’s exactly what Apple’s various Irish machinations achieved through loopholes that clever lawyers have found in Subpart F and behind-the-scenes lobbying made bigger.

MYTH 3: Apple doesn’t use tax gimmicks

Apple’s testimony on Tuesday claimed the company does not use tax gimmicks and then offered a list of a couple gimmicks it does not use – no Cayman Islands bank account, no revolving loans from foreign subsidiaries and so on. But, surprise, surprise, it’s a limited list that simply left out all of the tax gimmicks Apple does use and even invented, like the so-called Double Irish Dutch sandwich that shifts and shovels products and profits from here to there until deductible expenses end up in places with high tax rates like the United States and much of the profit – $74 billion in four years – ends up where there’s no taxes at all.

Richard Harvey, who worked in Ronald Reagan’s Treasury Department, at a Big 4 accounting firm and then at the IRS, said he nearly fell out of his chair when he read Apple’s no gimmicks claim. Apple’s denial is like notorious bank robbers Bonnie and Clyde saying they never robbed a 7-Eleven or a Safeway. About 4% of Apple’s employees and 1% of it sales are in Ireland but the Emerald Isle somehow ended up with 64% of Apple’s 2011 profits upon which it paid nearly zero tax. No gimmicks?

MYTH 4:  Apple pays the least taxes the law allows

As a couple of tax experts noted at Tuesday’s hearing, Apple’s tax maneuvers are aggressive but hardly the most aggressive in corporate America, where 30 large companies paid no taxes at all from 2008 to 2010. Just as an example, Apple has chosen to re-route almost all its profits outside of the Americas through no-tax subsidiaries in Ireland. But profits coming from Canada, Brazil and Mexico come home to be taxed in the U.S.

The whole argument that Apple is just doing what it must doesn’t stand up. Apple and other tech companies regularly make decisions that cost them money, such as to address poor working conditions at factories owned and run by subcontractors or to make their products more environmentally friendly. A variety of short and long term concerns can come into play when Apple decides what to do, not just what maximizes profits in the current financial quarter. With corporations gaming the tax system, contributing near 65-year lows in taxes as a proportion of the economy, society suffers – the very society where Apple must find its employees, customers and shareholders.

And it’s arguably worse than that specifically for Apple shareholders. As tax guru Ed Kleinbard has pointed out, the kinds of tax games Apple has played can be detrimental to the future prosperity of the company. So much cash has been piled up outside the United States that it cannot be deployed profitably or returned to shareholders through dividends. As a result, Apple is disappointing investors and depressing its stock price (Apple’s recent bond issue was a partial attempt to address this mess).

MYTH 5: Apple was singled out for criticism

Although Tuesday’s hearing was solely about Apple, the same Senate committee had execs from Hewlett-Packard and Microsoft up last September to air their tax avoidance dirty laundry. And two years ago, it was CEOs of the major oil companies under Congressional fire for their most beloved tax breaks. Next time it will probably be some executives from big pharmaceuticals.

(All comments are moderated)

Looking for the best Google Reader replacement, don’t forget the plumbing

the feedly rss reader app on androidGoogle is shutting down Google Reader, its RSS feed collector, in July. Google’s bare bones reader web site was never the greatest way to actually read your RSS feeds, automatically updated collections of all your blog post subscriptions. There were plenty of alternatives for that function — I was using Reeder on my iPad and Press on Android, for example. But Google did provide a couple of essential behind-the-scenes functions and it provided them extremely well.

While I’m not going to miss the bland web site, I will miss Google’s ability to quickly and reliably update blog feeds and, maybe most of all, synchronize my reading history across all my devices. Even though I might read a few blog posts in Press on my Galaxy Nexus or with Reeder on my iPad, it was Google that kept track of which articles I had read and where I left off. Quite a few RSS reader apop makers have promised to build their own replacement back-end but there’s still a problem for omnivorous gadghet users like me — most of the app makers stick to one platform. So if Reeder and Press each start offering their own back-end to sync RSS feedss, that won’t help me because Reeder is mac and iOS only and Press in Android only.

That has me searching for a multi-platform reader replacement, much as I switched to Postbox for my email and 1Password for, well, passwords. So far, the only one I’ve found that I like is called Feedly. It works on the web, iOS, Android and Kindle. It’s also beautifully laid out and designed. I have my RSS feeds split into topical folders. As you can see in the picture above, Feedly lets me know there are fresh posts in a folder by showing it with a bright color. Folders with no new posts are grey. I also looked at Newsblur, which covers the web, iOS and Android. But it costs $24 a year if you follow more than 64 feeds and I didn’t think the apps were as good looking. It also has some social sharing features that seem a bit too intrusive to me.

Right now, Feedly is still running using Google’s back end, so I just had to sign in to my Google account and Feedly grabbed all my feeds and kept my whole folder structure intact. Phew. I also changed one setting. By default, Feedly shows you a sort of spread out, magazine-style view of the latest posts in your feeds, much like Flipboard, but I prefer a simpler list view. So I went to the app’s settings, tapped ‘advanced settings’ and changed the default view from Magazine to List.

It remains to be seen if Feedly, Newsblur — or anyone else — will be able to replace Google Reader’s plumbing with as reliable and speedy a service. I have my fingers crossed but I’ll report back as soon as the new services start coming online.

For additional coverage and suggestions, TheVerge had a good rundown of possible replacements, as did Lifehacker.

It’s not about the specs – dumping my fancy pants camera

relectFor the past year or so, I’ve been taking pictures with one of the most well-reviewed and highly spec-ed out digital cameras on the market, the Sony NEX-7. It didn’t come cheap and a couple of additional lens added to the bill but this was supposedly one of the great cameras out there. Considerably smaller and lighter than a D-SLR, the mirrorless NEX-7 had a largest-in-class sensor to pick up tons of detail, a real view finder, extensive video capabilities, a built-in flash and a highly customizable array of dials, buttons and other controls.

There was only one problem: I couldn’t seem to get it to take the pictures I wanted. Despite the accolades and endless list of killer specifications, the Sony was a beast to actually use — more like a complicated, poorly thought out computing device than a camera. Too many of the dials and buttons were poorly placed leading to frequent accidental changes in settings. Otherwise, the whole process slowed down as you hit a button to lock our changes, then unlocked the lock out to make changes, then locked out again. The video button was a particular villain in this regard. There were other significant issues too, especially the lack of great, affordable lens. That amazingly detailed sensor cries out for great glass, but Sony was deaf to the need.

So the other day, I put the NEX-7 up for sale on eBay. And, after a ton of research, I bought a much simpler camera that hardly compares on paper with the Sony, a Fujifilm X-E1. The Sony has a bigger sensor with way more pixels, higher ISO range, more autofocus points, more video settings, a larger and higher resolution LED screen on the back, weighs less and on and on. But the Fujifilm is one well-designed mother fucker, no two ways around it.

Instead of covering the camera body with a bevy of blank-faced, multi-function, programmable doo-dads like Sony, Fuji chose to have just a few dedicated controls on the X-E1. On top, set the shutter speed and exposure compensation. On the lens, set the F stop. Done. Both dials also have an automatic setting, which means no more messing around with “aperture priority mode” and “exposure priority mode.” And because the dials are labeled, you can see with your own eyes instantaneously how the camera is set for the next picture. I feel like I am taking pictures again, not trying to remember how to work some crazy-complex gizmo. It doesn’t hurt that the camera came with a great prime lens and a fast zoom lens, neither of which were available for the NEX-7 (at least in my price range).

And, as you can see above, now I can take the cool pictures I always wanted to get with no muss and no fuss — and I’m having fun doing it.

The iPhone has lost its lead and needs a rethink, not a retread

“iPhone is a revolutionary and magical product that is literally five years ahead of any other mobile phone,” Steve Jobs, Jan 9, 2007

Introducing the iPhone

From the first version of the iPhone through at least a couple of revisions of its hardware and software, the thing stood so far ahead of any other phone in existence that anyone without one just cried and moaned and if you had the chance to get one you jumped. If your mom or your cousin or the guy three cubicles down asked which phone to buy, you replied without hesitation: get the iPhone.

Starting a few years ago, other phone makers started to catch up and the choice got harder — or at least more interesting. You paused for a few seconds, thought about Android or maybe web OS, but gave the usual advice: get the iPhone.

But finally, in the past year or two, the choice of smart phone got a lot more complicated, especially if you weren’t already deeply invested in Apple’s vast iTunes ecosystem. Among other recent and obvious evidence, check longtime Mac columnist Andy Ihnatko’s column about switching to Android, uber Apple booster Matt Siegler’s positive review of the Google Nexus 4 and Macworld writer Lex Friedman’s general praise of the Nokia Lumia 920 phone running Windows Phone 8. What’s next? Long time Apple blogger John Gruber admits he’s head over heels for Samsung’s Bada-Tizen hybrid phone love child?

Sixth anniversary celebration, anyone?

Personally, I finally got rid of work-mandated Blackberries and got an iPhone 3GS in 2009. But curiosity and a predilection for Google services got the better of me and I switched to a Nexus S running Android in December, 2010. I tried to switch back via the iPhone 4S for a few months in late 2011, but ended up not liking it, mainly for software-related reasons. Lately, I’m quite happy with a Galaxy Nexus and looking forward to trying the Nexus 4 soon.

None of this is to say that the iPhone is about to collapse or immediately decline in popularity. But what’s happened is others have closed the gap and have been able to grab more share in the still fast-expanding global market for smart phones. Eventually, those gains can’t help but eat into Apple’s future sales.

Given how Apple let its early lead in personal computing slip away, but did not let an early lead in iPods evaporate, the company knows what it needs to do, I suspect. Apple slipped in PCs when it ignored where the market was headed and what customers wanted (more recently, its fortunes revived with cheaper models and a broader range of choices). In the case of the iPod, Apple broadened its line by adding offerings at various sizes, colors and price points while still innovating at the cutting edge with the iPod Touch. Competitors were left no empty spaces to get a toe hold.

For a while, the iPhone was so far ahead of the competition that Apple’s simple product line was more than enough to capture huge market share. But as Android phone makers have caught up, the iPhone’s worldwide share peaked and started to slip. Apple so far has left several “open spaces” in the market, allowing competitors like Samsung to thrive by offering phones with larger screen sizes and at lower prices (even the “free” iPhone 4S in the United States costs $450 without a subsidy from a wireless carrier).

At this juncture, I expect the next iPhone will be a 5S-ish upgrade and will do quite well in isolation. But Apple should do what it did with the iPod and hit more price points and physical outlines. The software could use a lot more than that, updating a look that’s grown stale. Otherwise, it could be back to the PC future for Apple.

Post PC Vacationing: kids, cameras, iPads but no laptops

Ocean Beach in San Francisco

Just back from a short family vacation to San Francisco where much fun was had. We traveled light, or at least light-ish, for this wired day and age. We took smart phones, digital cameras and iPads but we didn’t bring a laptop. For the most part, everything went well. The iPad makes a great travel companion, whether it’s providing maps for driving around the city, instant web searching for cool spots to eat or an ebook or movie for entertainment during down time at the hotel.

Apple has thankfully worked to make the process of using an iOS device the iPad without a computer easier and easier. We downloaded apps and music right to our iPads and never needed to sync anything to anything. Email is all “in the cloud,” so we could access important messages with our travel confirmations from any of our devices. It was all very smooth.

On our first day tooling around the Bay Area in our throwback, sky blue Crown Victoria, we wanted to find Bette’s Ocean View Diner in Berkeley. An iPad 3 with built-in LTE and GPS proved a trusty navigational aid taking us over the Bay Bridge and right onto 4th Street, Berkeley’s more swich shopping district away from the UCal campus. My wife, Whitney Connaughton, is an expert at parking honking large vehicles so we nimble-y parallel parked despite crowded conditions. Unfortunately, by 9 o’clock on a Saturday morning, the wait at Bette’s (which really does have the world’s best pancakes) was over an hour. So we had to make due with the excellent Mexican style Cafe M around the corner. I was snapping photos mainly with my Samsung NX200, a relatively pocketable mirrorless digital camera that takes very fine shots. Later, we checked out the college campus, grabbed some amazing doughnuts in Oakland and headed back to San Fran for a burger and shake dinner.

When I wanted to review my pictures for the day, I grabbed the iPad and attached the SD card adapter from Apple’s Camera Connection Kit. You may be familiar with this trick — you can import photos directly into the iOS photo gallery off your camera’s memory card. Once I had the pictures aboard, however, things were not quite so great. You can only do a few, limited things with pictures like upload to Facebook or post to Twitter. Upload to Flickr or post to App.net? See you later. With my laptop and Adobe’s fabulous Lightroom program, I have plug-ins to send my pictures to all the services I choose. I tried using some of my other services’ iOS apps, like Zenfolio, but it choked and crashed without uploading my pictures.

treesThe next day, we traveled down to Big Basin Redwoods State Park, an amazing place-out-of-time wilderness area with huge stands of Redwood trees, many more than a thousand years old. On the way, we discovered a limitation of navigation by iPad. Driving up into the mountains where cell phone signals are sketchy at best, the iPad’s maps app lost track of where we were, couldn’t download maps and generally left us blind. We thought we’d be okay since we’d asked the app to get the directions list while we still had a good signal. But we stopped for lunch and let the iPad screen go blank. Logging back in, we discovered that the directions hadn’t been saved, even though no other app had run. Luckily, we were near the park at that point and a few helpful road signs were all it took. Inside the park, iPads stayed in the trunk of the car and we enjoying the gorgeous and lush Redwood forest unwired. If we’d gotten our directions the old-fashioned way (from Google maps on a laptop web browser), we’d probably have printed them out back at the hotel, avoiding the out of service issue.

As far as keeping in touch with friends and family, the iPads and phones were plenty suitable for reading and writing emails, Facebook posts and future blog entries. I kept up with the sports news back home via BostonGloble.com, checked out restaurants on the SF bulletin boards of Chowhound.com and almost finished the latest ebook in Hugh Howey’s “Wool” series.

At night, back at our hotel, everybody wound down with a little technology. Watching video on the go can be an a problem with our 3G and LTE-enabled iPads, however, and we had to be very careful. Sitting in your hotel watching a couple of episodes of the “House of Cards” series on Netflix, for example, can burn through more than half of your entire month’s  broadband usage allowance. And downloading a movie for rent from the iTunes store will actually use up the whole pie and send you into the land of overage charges. Hotel wifi was expensive, slow and limited us to one connected device per room per 24 hours. Ugh. I keep a gazillion movies on my laptop and an accompanying external drive but we didn’t have access to that bounty on this trip.

Golden Gate BridgeNo one among us took any pictures with their iPads, thankfully. Casual snapshots were all iPhone and Galaxy Nexus and I used my Samsung camera for the important stuff. As I mentioned, it’s quite light and — with its pancake 30mm lens — even pocketable in my jacket. It does suffer from a lack of truly great lens, a problem for almost all sub-DSLR size camera systems. That meant some of my low light shots didn’t come out as well as I’d hoped and I didn’t get the kind of mind-blowing semi-focused photos a great DSLR can take when paired with a great (yet still affordable)  lens. I used to rely on a combination of a relatively tiny Canon S-100 and a bulky, full size Canon DSLR. Sometimes the tiny camera let you down, but as long as you didn’t mind carrying around the bigger camera, amazing photos were easy. After this trip, I’m rethinking my switch the middle ground and its lack of upper-end greatness.

The iPads also served ably on the airplane trips out and back. No need to worry about power. Unlike a laptop, an iPad easily lasts for a full cross-continental flight, even showing videos the whole time. That’s a big relief when JetBlue’s multi-channel video system is showing reruns of Seinfeld and movies you don’t want to see.

In the end, I’d call our Post-PC vacation a success with just a few minor hassles. No need to lug that laptop around the world with you anymore. An iPad can set you free.

Yikes, Microsoft’s Time Machine clone leaves out tons of important stuff

(Updated to include a way to unhide files and add them to a “library” for backup)

Basically, this post is a warning to anyone using the new File History backup program in Windows 8. The program is severely limited because it will only back up files in a few preset locations that can’t be expanded. If you have almost any third-party program that saves its own data, File History is leaving you exposed. There is a fix, but it takes a little mucking around.

In my case, for example, I have gazillions of email messages stored by the program Postbox. The mail is kept in a huge folder in my personal Windows user folder under PostBox’s own folder in the application data area. None of the stuff that your applications have saved here is backed up by File History — none. And you can’t add it, either.

Update: As several commenters have noted, there is a way to get this data added to the backup set. In the Windows File Explorer, navigate to your personal directory and under the View section of the ribbon bar, click for a check in the box called “hidden files.” Then a folder in your directory called AppData should be exposed. Right click on the folder and choose “Include in library…” and add the folder to one of the libraries which is backed up by File History. Phew!

All that File History will save by default are “files that are in your libraries, contacts, favorites, Microsoft SkyDrive and on your desktop,” according to Microsoft. That is a huge hole, especially if you don’t rely on the My Documents, My Pictures and other “library” folders set up in Windows. Even if you do, third-party programs that store their data exactly where they are supposed to will not benefit from File History unless you use the trick above to add them.

That’s a shame because File History is supposed to be Microsoft’s version of the drop-dead easy to use Apple backup program Time Machine. Both work behind the scenes to back stuff up on an automatic schedule without the user having to remember. And both give quick access to old versions of files within the File Explorer/Finder program. But you can set Time Machine to backup anything from just a few files to your entire disk.

The agony and the irony of Tim Cook

Steve Jobs and Tim CookWhen Tim Cook took over as permanent CEO of Apple in 2011, he brought his unmatched, incredible decade-long track record as the Mozart of supply chain management. Under Jobs II, Apple got rid of its factories and outsourced all its manufacturing to quicker, cheaper Asian builders. Overhead was slashed, flexibility enhanced. As the iPod business grew into a titan, Cook was striking better deals, setting up faster supply chains, keeping the trains moving on time and frying it up in a pan.

And so when Cook took over as CEO, the fears and warnings were about everything else — how would Apple’s sense of style and design survive without Jobs? What would happen to innovation and creativity? Would there ever be another massively market disruptive product like the iPhone or the iPad again? No one — NO ONE — said wow, I wonder if Cook is up to the task of scaling Apple’s manufacturing and supply chain to deal with its tremendous rate of growth.

And then came the fourth quarter of 2012. Apple had an amazing, record breaking three months but it was not as big as it could have been and not as big as some Apple shareholders wanted. Listen to Cook on the company’s call with stock analysts today¹. What happened with iPhone sales? Supply constraints hampered sales, even of the older models. What about iPads? Couldn’t make enough iPads to satisfy demand. And even the lowly iMac? Took too long to bake ‘em.

Cook emphasized the pent up demand. He wants you to think that all those unsatisfied customers are waiting, sitting on their hands (and credit cards) until Apple catches up. And I’m sure that’s true in some cases. But this was the holiday quarter, the quarter with Black Friday so named for as the day when the frenzy of sales pushes retailers into profits for the whole year. A lot of those iPads, iMacs and iPhones that were going under the tree (or the menorah), got replaced with something else, be it a Galaxy Tab, Coach briefcase or North Face winter running outfit.

For what it’s worth, I buy the explanation. I don’t think that the Apple gloom and doomers have it right, at all. This wasn’t the beginning of the end for Apple, not by a long shot. But irony of ironies, Cook aced the innovation, offered much sought after new products (maybe too many, introduced too close to the holidays, though) and then flunked the execution worse than Tom Brady’s fourth quarter comeback attempt against the Ravens last week. Ugly.

Notes:

¹”We did have significant shortages due to robust demand on both iPad mini and both models of the iMac that persisted the entire quarter. And we are still short of both of those today as the matter of fact. Additionally, supply of iPhone 5 which short to demand until late in the quarter and iPhone 4 was short for the entire quarter, we believe that we can achieve a supply demand balance on iPad mini during this quarter and on iPhone 4 during this quarter. On iMac, we are confident that we are going to significantly increase the supply, but the demand here is very strong and we are not certain that we will achieve a supply demand balance during the quarter.” -Tim Cook, Jan 23, 2013 conference call

 

I know Apple, Apple is a friend of mine. Lenovo, you’re no Apple

Lenovo CEO Yang Yuanqing made an interest declaration the other day. He’s going to split their PC business into two units, one that does basic stuff aimed at consumers and businesses and another one that will get the Thinkpad brand and shoot for the higher end. The “Think” brand is needed to better compete with Apple, he said. As someone who recently switched to a Thinkpad after more than a decade on Apple laptops, all I can say is that Lenovo has a lot of work if it wants to even approach Apple’s customer service. Don’t get me wrong — I love the Thinkpad hardware. But almost everything dealing with Lenovo has been suboptimal.

The whole thing reminded me of that classic put down Senator Lloyd Bentsen delivered to Dan Quayle back in the 1988 campaign: Senator, I served with Jack Kennedy. I knew Jack Kennedy. Jack Kennedy was a friend of mine. Senator, you’re no Jack Kennedy.

It starts at the start. Go to Lenovo’s web site and try to order a customized Thinkpad.

For the X1 Carbon, there’s a laundry list of features on the customizing list – CPU, display, graphics system, memory and so on., Slowly click your way through the list — there’s a delay between every click. Click, sigh, click, sigh. But it’s all a trick. Almost nothing can be customized on the X1. Not the CPU, not the display or graphics system. But they’re still all on the list. On most models, you can’t even upgrade the RAM from 4 GB to 8 GB. Why? What the…

Oh well. So you finally order and your new laptop arrives. Time to boot it up. It’s not quite as speedy as you expected and when it’s done you can see why. Crapware is everywhere. There’s a ton of Lenovo nonsense — taking over simple functions like the wifi settings, the battery, it’s own software update app. Why do I need all this? Then there’s the actual crapware. Nitro Pro PDF, Norton VIP Access, SugarSync. There’s a cost to users from all this crapware. After the first week or two, my machine couldn’t load any Windows updates, not even critical security patches. The Lenovo support boards were filled with angry customers and no answers. Eventually, the answer turned out to be that the Nitro crapware program was interfering with Windows Update. A patch would be available soon. Hello, I have a quicker fix, Lenovo – don’t install crapware on my new computer.

I paid extra for the extended three-year warranty. I got an email with a spreadsheet attached, which I had to fill out with my serial number, model number and other gibberish and email back to Lenovo to activate my policy. Why? They have all this information — they just took my order and sent me the machine. Maybe they have outsourced the warranty to some third party but why is that my problem?

I ordered right before the Windows 8 roll out. I did it on purpose so I’d get a machine with Windows 7 in case there were big problems with the newer version. After a couple of weeks, I was ready to upgrade. Buried on Lenovo’s site was a 3-page list of instructions, including a list of programs I should uninstall before updating. I followed all the steps and held my breath. Almost everything worked fine but later, looking at the device manager in the control panel, I could see a few hardware driver problems. Resolving all the problems took multiple visits to the support web site, running the Lenovo update program over and over and some additional fishing around on Google for advice. Not smooth.

Apple, obviously, makes none of these mistakes. The ordering and customization process on the web is simple, quick and easy. First boot is clean and quick. There is no crapware to remove because there is no crapware. Small system updates arrive as needed and install. Information about your AppleCare warranty arrives in the mail. And when it’s time for a major OS update, it too arrives via the system updates and simply installs.

Lenovo has great hardware chops but if they want to take on Apple in the high-end computer market, they’ve got to make some serious improvements.

Fail Fail Fail iPad

Checking out the 20 inch luggable tablet from sony“If the heap of new products that Microsoft showed here Sunday is any indication of the future of computing, the desktop PC is old news,” or so read the lead story from the annual Consumer Electronics Show in Las Vegas. Yeah, desktop sales are tanking. Tablet sales are exploding. Yeah, desktops are old news, right on. Oh wait, that’s the lead story from PC World’s report on CES in November 2000, more than 12 years ago.

I offer this little historical gem as a bit of perspective and, perhaps, counter-prediction to much of the snarky and dismissive commentary emanating from this year’s CES. Sure, there are some great targets for comedy, like bragging about a phone you can take in the shower (“The Xperia Z can even survive being dropped in the toilet” – great, does it dispense hand sanitizer after that?). But with the entire computer industry in the midst of a transition from boring old form factors to exciting new varieties, that ugly dog you laugh at today may become best in show in a few years.

Looking back at earlier efforts to build tablet computers, you can see the ideas and the technologies evolve. Slowly, the expanding computing abilities of tablets enabled more and better uses and at more affordable prices. The iPad only came along after many, many duds and failures, including even from Apple (although the ill-fated Newton did produce one of the funniest bits ever in Doonesbury).

It wasn’t obvious from the start which features would be most compelling. Bill Gates’ original vision focused on a hybrid of the features of computer applications and a pad of paper. In the first couple of years, the big manufacturers all got on board and built tablets but in a dizzying array of different forms — folding tablets, hybrid tablets with keyboards, many of the same form factors that have shown up again this year at CES, oddly enough. None had mobile broadband and most weighed as much or more than laptops.

I’m not trying to argue that we will all one day be playing virtual air hockey on our computers. But there is some merit to the larger tablets and luggable touch screen computers that will only increase as they get lighter and more powerful.

The other day, my eight-year-old daughter and I were in a local Best Buy perusing one of these weird new form factors — Sony’s Tab computer. That’s it pictured at the top of the post.  It’s your basic all-in-one desktop computer with a 20″ screen. But by adding a small battery and touch sensors, Sony’s also created a giant, luggable tablet. It weighs about 12 pounds and the battery lasts for only an hour or two, but you can see where it’s going. My daughter enjoyed the drawing program, sorting photos and editing photos was a whole new experience and it’s a fine way to watch a movie.

So maybe it’s time to reconsider that most infamous 2001 prediction Gates made about tablets — “within five years I predict it will be the most popular form of PC sold in America.” After being claim chowdered to death on that one, now it seems he was just a bit optimistic on the timing.

 

iPad, Nexus, Kindle Fire – which tablet should I buy?

Compare the ipad, nexus and kindle fire tablets

What a crazy time to be shopping for a tablet computer. There are so many, many choices. Which tablet should you buy? I have some advice — and please give me your intelligent feedback in the comments section below — on the biggest sellers, all of which I have personally used: Apple’s iPad line, Google’s Nexus family and Amazon’s Kindle Fire HD offerings.

Unlike past years, the competition at the beginning of 2013 is hotter than ever, making a decision more complicated than ever. To to simplify, let’s review three basic factors and then I’ll have some advice at the end.

budget | content | uses

budget

How much do you have spend for a new tablet? If you want to hit that magic $199 price point or less, it’s between Amazon’s 7″ Kindle Fire HD and Google’s 7″ Nexus. If you can go up to the $300 to $400 range, you can reach the 10″ Nexus, the 9″ Kindle Fire and the 8″ iPad mini. Heading to $500 and over, you reach the full 10″ iPad.

Adding a mobile broadband radio, which you may want if you plan to travel a lot with your tablet, costs more:

+$100 to the minimum Nexus 7 (also doubles your memory) = $299

+$200 to the entry level 9″ Kindle Fire HD (and more memory) = $499

+$130 to iPad mini = $459

+$130 to the big iPad = $629

(The Nexus 10 and 7″ Kindle Fire HD aren’t sold with built in mobile broadband)

content

A lot of people will tell you that the easy way to decide on a tablet is to review your so-called ecosystem, or the existing collection of digital music, books, movies and TV shows along with any premium apps you have bought. Just stick with your ecosystem, they say. But I think it’s not nearly so simple anymore. Ecosystems matter less than ever.

First, for music, the vendor is all but irrelevant. Music files now a days are no longer locked to any company’s devices with digital rights management, or DRM, software and can be easily (and legally) trafficked among the brands. The new cloud services, Apple’s iTunes Match, Amazon’s Cloud Music Player and Google Music, all keep track of your songs and let you download them onto multiple computers and devices. And how important is owning all your music? At least in my house, the kids today are far more interested in using subscription music services like Spotify and Rdio, which work great on all the devices, too.

Next come ebooks, which sadly do still carry DRM locks. But even here, for most users, ebooks can travel onto many kinds of devices. That’s because the two leading sellers, Amazon and Barnes & Noble, provide software to read their ebooks for all the different platforms. I’m a Kindle fan and I’ve read my ebooks on devices not just from Amazon but also from Apple, Google and BlackBerry. Google offers ebook software for Android and the iPad but Apple sticks just to iOS (for what it’s worth, I think that’s reason enough to avoid them completely).

Apps are an in-between case. Many are free or cost just 99 cents, so the lost investment of switching platforms is pretty small. Remember just a few years ago when switching, say, from Windows to the Mac meant spending hundreds of dollars just to restore a few key apps like Microsoft Office. In tablet world, this so-called “applications barrier to entry” is almost non-existent.

And many of the most popular apps are available on all three platforms. Amazon has the most limited supply and Apple tends to have the best new apps. But if you’re wondering, it’s pretty easy to see which apps you may be able to keep if you switch platforms by checking the web stores of Google and Amazon.

There is still one area where you might have serious investments locked to one ecosystem: movies and television shows. Apple’s iTunes store has been around for a decade and I know we’re not atypical with our vast holdings of hard-to-transfer iTunes videos. Likewise, movies and shows bought from Google won’t play on the iPad or Kindle. Amazon has built an app to let you watch its videos on the iPad, though not yet on Google’s Android devices (you can watch via the web site on the Nexus if you are willing to install Adobe Flash software).

Like music, however, video is an also an area where the ownership model is slipping away. Do you watch most of your shows on Netflix, Hulu Plus, HBO Go or some other subscription service app? Those apps are offered on all three platforms.

A final consideration is Amazon’s amazing deals for anyone subscribing to its $79/year free shipping service known as Prime. If you pay for Prime you get access to a ton of movies and TV shows for free. That can save a lot of money in the future in addition to any savings by buying a Kindle Fire now.

So take a survey. Ignoring music, do you have tons of video and possibly ebooks that you bought from Apple for your iPhone or iPod touch? And is it the kind of stuff you want to come back to and watch or read over and over again? That could be a lot of lost value if you switch tablets just to save a little on the upfront cost. On the other hand, Amazon’s ebooks and video can play on the iPad (and sort of on the Nexus) and you get all the free stuff if you subscribe to Prime. Google’s ebooks but not video play on the iPad.

There’s also the rest of our digital life’s ecosystem to consider. For file storage and syncing, calendars, contacts and email, some people are deeply embedded in Apple’s iCloud. Others are all Google, all the time. What do they say about Harry Potter and Voldemort? Neither can live while the other survives? Apple-istas will do best sticking with the iPad. iCloud doesn’t do Android. Google-ites? In the past, I have found syncing Google data to iOS devices to be a huge pain and subject to major limitations, but I should point out for more experienced users, Google has made the process easier recently, as explained by TheVerge. Nexus devices, obviously were made for it. You can also sync your Google account with the Amazon Kindle Fire’s calendar, email and contacts apps but, again, nothing for iCloud.

usage

What are you actually doing with your tablet? When I reviewed the very first Kindle Fire, I said it was a good deal because it could do most of what you wanted to do on an iPad for less than half the price. And that’s still true today. If you want a tablet for mostly web surfing, reading ebooks, watching video, playing the occasional game and doing light email, the Kindle Fire HD line is hard to beat. Amazon has a smaller but more cultivated app store than Google and lags far behind Apple. But the actual hardware devices are pretty nifty, with really good screens, and at a bargain price. They also have the most innovative child control software by far.

Are you going to be doing “real” work or using your tablet as a laptop replacement? In this case, the Kindle Fires are a lot less appealing. They don’t play as well with other platforms. The iPad has plenty of software for writing, making presentations, editing photos and all that plus it benefits from the widest choices of keyboards. The Nexus works really well if your work is often via Google Docs and other Google services.

What about sharing a device or and handing one of these tablets off to your kids? The iPad stinks for sharing, absolutely stinks. Signing in and out of email accounts, iCloud accounts and the like is inconvenient and apps and movies and what not can’t be shared between iTunes store accounts. Given how annoying it already is to move and arrange apps just the way you want them on iOS, having other people move your cheese is no fun either. The Nexus is much better in this area — a recent software update added true multiple user accounts. And the Nexus is smart, storing only one copy of an app or other content that appears in more than one user’s account.

Amazon’s child control feature, called Freetime, brings sort of, kind of the notion of multiple user accounts to the Kindle Fire. It does offer by far the best and smartest child controls of any tablet if a kid is the primary user. The iPad child control screen is a nightmare.

And how much traveling will you be doing? While it’s possible to use the wifi hot spot feature on your phone to connect your tablet, it’s so quick and convenient to have built-in mobile broadband. It’s not free, typically adding about $20 a month to your cell phone bill, or $10 if you have a family plan on AT&T or Verizon. There’s nothing like the feeling of flicking on your tablet and getting right to work without having to mess with wifi sign ons or other devices to get connected.

bottom line

If you’ve considered all the the issues above, you may have already come to a realization about which tablet to buy. People deeply invested in either the entertainment or business-y ecosystems of Apple or Google probably have the most obvious answers. If not, I would suggest that for the most budget-minded, for those planning to use their tablet mostly at home and for more for entertainment purposes, the Kindle Fire HDs are a great bargain. The savings come not just in the lower price but also with all the free content you can access from Amazon.

If you are looking to get some business done, it’s time to spend a bit more for the iPad, which not only has a far more robust and diverse selection of apps but also a better selection of accessories like keyboards, cases and other add-ons (blood pressure monitor anyone?). The Nexus line is second best here by a fair margin but totally workable and far better in the realm of Gmail, Google calendar and voice and all that.

As far as whether to go for 7″ to 8″ screens or the larger screens, think again about your budget and your usage. Small screens are cheaper and work best on-the-go. They’re also good for reading. Try holding a full size iPad in one hand for more than a few minutes – forget it. I don’t love the screen resolution of the iPad mini — both the 7″ Kindle Fire HD and Nexus 7 are much sharper. But after a short time using a lower resolution screen, it seems not many people can even tell the difference, so I wouldn’t get too hung up on that one spec.

By the way, if you can’t even decide whether to get a tablet versus a laptop or e-ink electronic book reader, I have looked at that question as well.