RSS

Tag Archives: Apple

Apple’s Health App and HealthKit – Platforms for Next Gen Healthcare?

Business Analytics 3.0

mobile-applicationsGame on….I think we just witnessed a big next generation leap in Healthcare Data and Analytics.  Apple jumped into the health information business on June 2, 2014, launching both a new health app and a cloud-based health information platform with IOS 8.

The new App, called simply “Health”, will collect a number of body metrics including blood pressure, heart rate, and stats on diet and exercise.  Health will constantly monitor key health metrics (like blood sugar or blood pressure), and if any of them begin to move outside the healthy range, the app can send a notification to the user’s doctor.

The Health app will share all its information with a new cloud platform called “HealthKit.” The new health cloud platform is designed to act as a global repository for all the user’s health information. It will accept data collected by a variety of third-party devices and apps. For instance Nike is now working to…

View original post 526 more words

 
Leave a comment

Posted by on June 2, 2014 in Medical

 

Tags: ,

Apple, Amazon, Google, Microsoft

Last year we looked at the four companies and compared their business model over two quarters: Apple (hardware), Amazon (retail), Google (advertising), Microsoft (software). It struck me how far the integrated Wolfram Alpha technology has come in the last two years. It combines the symbolic computing capabilities of the Mathematica platform with curated data (for example financial data) and some pretty impressive linguistic analysis capabilities for free-form text input.

For example, in Wolfram Alpha, just type in the following query: “Googe vs. Amazon vs. Apple vs. Microsoft” The results are shown as a series of three screen-shots below:

ComparisonWolframAlpha1

ComparisonWolframAlpha2

ComparisonWolframAlpha3

Not only do you get the various data such as the fundamentals or the analysis of a mean-variance optimal portfolio displayed, but you get all the code needed to programmatically load such data. For example, if you want to get the breakdown of the analyst ratings, the system will expand it as follows:

AnalystRatings

So far we haven’t done any coding or bothered with integrating any data source. This amount of integration and automation is pretty impressive. I am often surprised how few companies are taking advantage of such advanced technology platforms.

 
Leave a comment

Posted by on April 28, 2013 in Financial

 

Tags: , , ,

Self-publishing to Apple bookstore

Self-publishing to Apple bookstore

Over the last couple of weeks I finished writing the book about my adventure of a lifetime: Panamerican Peaks, cycling from Alaska to Patagonia and climbing the highest mountain of every country along the way. By now I have successfully self-published the book to the Apple bookstore. This post gives a recap of the steps involved in that process, with a focus on the tools, logistics and finally some numbers and sales stats.

Disclaimer: In my personal life I am an avid Apple fan, and this post is heavily biased towards Apple products. In particular, the eBook is only available for the iPad. So the tools and publishing route described below may not be for everybody, but the process and lessons learnt may still be of interest.

Path to self-publishing on Apple bookstore

Creating Content

The first step is obviously to create, select and edit the content of the book. During the actual trip I tried documenting my experiences via the following:

  • Taking about 10,000 photos with digital camera (Olympus and Panasonic)
  • Taking daily notes with riding or climbing stats (on iPhone or NetBook)
  • Shooting about 200 video clips (Flip Mino)
  • Uploading photos (to Picasa) and videos (to YouTube)
  • Writing posts on my personal Blog

In the months after coming home I refined some of the above material. Using iMovie I created ~ 5 min long movies based on video clips, photos and map animations, typically with some iTunes song in the background and a bit of explanatory text or commentary. I shared those videos on my personal Blog and on my Panamerican Peaks YouTube channel.

I loaded all photos into Aperture on our iMac and tagged and rated them. That allowed me to organize them by topic or as required. The ‘Smart Folders’ feature of Aperture comes in handy here, as it allows to set up filters and select a subset of photos without having to copy them. For example, if I wanted photos rated 4 stars or higher related to camping, or photos of mountains in Central America, I just needed to create another Smart Folder. This was very useful for example for the Panamerican Peaks Synopsis video which features quick photo sets by topics (cycling, climbing, camping, etc.).

Google Earth proved to be a very useful tool as I could easily create maps of the trip based on the recorded GPS coordinates from my SPOT tracker. One can even retrace the trip in often astonishing detail thanks to Google Street View. For example, in many places along the Pacific Coast I can look at campgrounds or road-side restaurants where I stopped during my journey. I even created a video illustrating the climbing route on Mount Logan from within Google Earth.

The heart and soul of any book is of course the story and the text used to tell it. I created multiple chapters using MS Word because I am so used to it, but one can of course use any modern text writing tool. In addition, I created some slides for presentations I gave last summer using Keynote.

Book Layout

Once all the ingredients were available, it was time to compose the actual book. As I had decided to build an eBook for the iPad I used Apple’s new iBooks Author tool on my MacBook Pro. This meant choosing the layout and including the text and media. iBooks provides a few interactive widgets and accepts all widgets that can be installed into the OS X dashboard. This in particular allowed me to link to the various YouTube videos. I could always get a preview of the book copied out to my attached iPad 2.

After many weeks of busy work putting the finishing touches on the book and adding various edits from a few trusted friends I got to the point where I needed to figure out how to get the book published in Apple’s bookstore. There are two steps required here:

  1. Creating a developer account with Apple via iTunes Connect
  2. Managing one’s content via iTunes Producer

The creation of the account is fairly straightforward through the web browser. To get started, I visited Apple’s Content Provider FAQ page and filled out an application. One submits basic information such as name, address, tax ID, credit card information, and ties it all to an existing Apple account. It can take a while. I never received the account validation email I was promised. So after a few days I started inquiring in Apple’s support forum. This had happened to others. Finally I just tried connecting via web browser to itunesconnect.apple.com and it worked – I had an account to publish from.

The packaging of all material and uploading is done via the free iTunes Producer app on the Mac. iBooks Author exports the book in .ibooks format, which becomes part of the iTunes Producer package. One can also provide a free sample for the book. This can be any subset or variation of the full book, unlike with Amazon’s bookstore, where the free sample is always the first N pages.

Next, one needs to provide additional metadata such as book category, description, author name, optional sample screen shots etc. One also has to provide an ISBN (International Standard Book Number) for the book. These can be obtained from publishers or directly purchased from Bowker. This stems from the need to catalogue and identify physical books in inventory or libraries, but seems a bit anachronistic for electronic books. The prices for ISBNs are very high, especially for small volumes (1 for $125, 10 for $250, 100 for $500, 1000 for $1000). But since Bowker has a monopoly in the US you don’t have a choice in that matter. This expense seemed to be the only marginal upfront cost to publishing the book (aside from the tools to create the content).

Finally one can determine the pricing and the markets where the content is to be sold. Apple follows the agency model of book publishing: As author you get to set the price. As distributors they take a share of your proceeds, here 30%. (By contrast, in the wholesale model you sell to the distributor at a discount, say 50% of the suggested retail price; the seller has sole discretion to set the price.)

Book Review

Much has been written about the very restrictive terms and conditions Apple puts on authors using their iBooks Author tool. Essentially it locks you in as an author to sell only through Apple. For many authors that is not a viable option. It also allows Apple to reject your work at their sole discretion. So as an author you are completely at the mercy of Apple’s review process.

Apple is also strict with enforcing certain rules regarding the content it allows you to sell. For example, your book cannot contain any links to YouTube videos or Amazon books. They rejected my first revision with YouTube links and suggested to embed all videos. This would have bloated the download size of the book by more than 1 GB. As a compromise, I created short 1 min teaser versions of all videos and included those. At the end they display a screen to go to the companion website (my personal Blog) for the full versions.

After 3 revision cycles and about a week later I finally had my book on sale in 24 countries around the world, for $9.99 or the equivalent in Euro or other countries’ currencies.

Book Marketing

Publishing is not selling. Here are some of the things I did to promote my own book:

  • Email – Customized note to Hotmail contacts (~ 300 contacts)
  • Twitter – Tweets and direct messages to influencers for retweets (~ 2000 followers)
  • FaceBook – My daughter posted on her wall (~ 1000+ friends)

Sending the emails was not without hiccups. I used MS Word and Outlook to do a mail merge with text blocks and individual text from an Excel spreadsheet. First, the Mail Merge Filter condition dialog has a bug which replicates the last AND condition and adds it as an OR condition. This screws up your filter and ends up selecting lots of folks you didn’t mean to. I found this bug during a test with the first 5 addresses. (I sent them each an apologetic email explaining this.) Then after I did the filtering all in the spreadsheet it worked and Outlook cranked out the emails. After a short while, Hotmail decided that my account had apparently been hacked and used for spam, so they locked my account down! In a way this is good, but I didn’t consider my carefully crafted and personalized emails spam. So I had to change my password and unlock my account again.
The email was very effective. I got lots of positive responses and a few folks decided to buy right away. I had sold my first copy. Every journey of 1000 miles starts with a single step.

As a result of my daughter posting the news on Facebook I noticed a spike (4x average) in the views of my Blog and Book page. I also offered promo codes for free book download to influential twitter users if they would retweet the book announcement to their followers. Within a couple of days a handful of them accepted the offer and retweeted, which exposed the tweet to a total of 2,000+ followers.

I had emailed the Apple bookstore, and to my delight they actually featured my book in their Travel & Adventure category.

My book featured in Apple’s bookstore, Travel & Adventure section

Book Sales

With all these promotion efforts I couldn’t wait until the next morning to see the sales numbers. (iTunes Connect updates their sales numbers only once a day.) I had the first ratings and reviews come in, all at 5-stars. Naturally, I hoped to see the sales numbers go up. After all, I had reached hundreds, if not thousands of people, most of which either know me or are somewhat interested in adventure. The result? Tiny sales numbers. To date after one week I have sold 14 copies, with a maximum of four (4) copies per day. At my $10 price and 70% share this amounts to just under $100 for the first week. Not exactly enough to retire on.

I’ll revisit this topic at some point in the future when I have more data. Obviously, the iPad is just a fraction of the entire book market with Kindle, Nook and other devices. (Although, the iBook looks much better on the iPad than on many other readers, in particular the smaller black & white e-Ink display Kindle readers.) While the selection of titles seems comparable on Apple’s and Amazon’s bookstores, about 1.35 million each (see a spreadsheet of my recent sample here), there don’t appear to be many shoppers in Apple’s bookstore. Of course, Travel & Adventure is only a small fraction of the book market. But even there, on a day where I sold two copies my book briefly ranked 30.th in the Top Charts. 30.th out of 11,800 titles (in Travel & Adventure)! That means the other 11,770 titles sold even less than mine (i.e. one or none) during the sampling time interval. Book sales appear very unevenly distributed, another case of huge online inequality.

But more importantly, most of the people reached by my promotional efforts don’t engage to the level of actually following the links, downloading the sample and finally buying the book. From my experience, one needs to reach more than 100 people for every one book sold. Fellow adventure traveller and author Andrew Hyde – whose book coincidentally is featured just above mine in the screen-shot above – has recently written about his book sales here. His stats show a similar small fraction of sales to views. I just don’t have the millions of Twitter followers to generate meaningful sales this way!

 
1 Comment

Posted by on June 21, 2012 in Recreational

 

Tags:

Faceplant with Facebook?

With the Facebook IPO coming up this Friday there is a lot of attention around its business model and financials. I’m not an expert in this area, but my hunch is that a lot of people will lose a lot of money by chasing after Facebook shares. Why?

I think there are two types of answers. One from reasoning and one from intuition.

For reasoning one needs to look at a more technical assessment of the business model and financials. Some have written extensively about the comparative lack of innovation in Facebook’s business model and core product. Some have compared Facebook’s performance in advertising to Google – the estimates are that Google’s ad performance is 100x better than that of Facebook. Some have pointed out that many of Facebook’s core metrics such as visits/person, pages/visit or Click-Through-Rates have been declining for two years and go as far as calling this the Facebook ad scam. One can question the wisdom of the Instagram acquisition, buying a company with 12 employees and zero revenues for $1B. One can question the notion that the 28 year old founder will have 57% of the voting rights of the public company. One could look at stories about companies discontinuing their ad Facebook efforts such as the Forbes article about GM pulling a $10m account because they found it ineffective. The list goes on.

Here is a more positive leaning infographic from an article looking at “Facebook: Business Model, Hardware Patents and IPO“:

Analysis Infographic of pre-IPO Facebook (source: Gina Smith, anewdomain.net)

To value a startup at 100x last year’s income seems just extremely high – but then Amazon’s valuation is in similarly lofty territory. As for reasoning and predicting the financial success of Facebook’s IPO, people can cite numbers to justify their beliefs both ways. At the end of the day, it’s unpredictable and nobody can know for sure.

The other answer to why I am not buying into the hype is more intuitive and comes from my personal experience. Here is a little thought experiment as to how valuable a company is for your personal life: Imagine for a moment if the company with all its products and services would disappear overnight. How much of an impact would it have for you as an individual? If I think about companies like Apple, Google, Microsoft, or Amazon the impact for me would be huge. I use their products and services every day. Think about it:

No Apple = no iPhone, no iPad, no iTunes music on the iPod or via AppleTV on our home stereo. That would be a dramatic setback.

No Google = no Google search, no GMail, no YouTube, no Google maps, no Google Earth. Again, very significant impact for me personally. Not to mention the exciting research at Google in very different areas such as self-driving vehicles.

No Facebook = no problem (at least for me). I deactivated my own Facebook account months ago simply because it cost me a lot of time and I got very little value out of it. In fact, I got annoyed with compulsively looking at updates from mere acquaintances about mundane details of their lives. Why would I care? I finally got around to actually deleting my account, although Facebook makes that somewhat cumbersome (which probably inflates the account numbers somewhat).

I’m not saying Facebook isn’t valuable to some people. Having nearly 1B user accounts is very impressive. Hosting by far the largest photo collection on the planet is extraordinary. Facebook exploded because it satisfied our basic need of sharing, just like Google did with search, Amazon did with shopping or eBay did with selling. But the entry barrier to sharing is small (see LinkedIn, Twitter or Pinterest) and Facebook doesn’t seem to be particularly well positioned for mobile.

I strongly suspect that Facebook’s valuation is both initially inflated – the $50 per account estimate of early social networks doesn’t scale up with the demographics of the massive user base – as well as lately hyped up by greedy investors who sense an opportunity to make a quick buck. My hunch is that FB will trade below its IPO price within the first year, possibly well below. But then again, I have been surprised before…

I’m not buying the hype. What am I missing? Let me know what you think!

UPDATE 8/16/2012: Well, here we are after one quarter, and Facebook’s stock valuation hasn’t done so well. Look at the first 3 month chart of FB:

First 3 month of Facebook stock price (Screenshot of StockTouch on iPad)

What started as a $100b market valuation is now at $43b. One has to hand it to Mark Zuckerberg, he really extracted maximum value out of those shares. It turns out sitting on the sidelines was the right move for investors in this case.

 
1 Comment

Posted by on May 16, 2012 in Financial, Socioeconomic

 

Tags: , , , , , , ,

Quarterly Comparison: Apple, Microsoft, Google, Amazon

Quarterly Comparison: Apple, Microsoft, Google, Amazon

Last quarter we looked at the financials and underlying product & service portfolios of four of the biggest technology companies in the post “Side by Side: Apple, Microsoft, Google, Amazon“. With the recent reporting of results for Q1 2012 it is a good time to revisit this subject.

Comparison of Financials Q4 2011 and Q1 2012 for Apple, Microsoft, Google, and Amazon.

Market cap has grown roughly by 25% for both Apple and Amazon, whereas Microsoft and Google only added 5% or less. A sequential quarter comparison can be misleading due to seasonal changes, which impact different industries and business models in a different way. For example, Google’s ad revenue is somewhat less impacted by seasonal shopping than the other companies.

Sequential quarter comparison of financials

Apple and Microsoft seem to be impacted in a similar way by seasonal changes. For Amazon, which already has by far the lowest margin of all four companies, operating income decreased by 40% while it increased its headcount by 17%. This leads to much lower income per employee and with increased stock price to a doubling of its already very high P/E ratio. I’m not a stock market analyst, but Amazon’s P/E ratio of now near 200 seems extraordinarily high. By comparison, the other companies look downright cheap: Apple 8.8, Microsoft 10.5, Google 14.5

Horace Dediu from asymco.com has also revisited this topic in his post “Which is best: hardware, software, or services?“. What’s striking is that all three companies (except Amazon) now have operating margins between 30-40% – very high for such large businesses – with Apple taking the top near 40%. Over the last 5 years, Apple has doubled it’s margin (20% to 40%), whereas Microsoft (35-40%) and Google (30-35%) remained near their levels.

(Source: Asymco.com)

Long term the most important aspect of a business is not how big it has become, but how profitable it is. In that regard Amazon is the odd one out. Their operating income last quarter was about 1% of revenue. Amazon needs to move $100 worth of goods to earn $1. They employ 65,000 people and had revenue of $13.2b last quarter, yet only earned $130m during that time! Apple earns more money just with their iPad covers! Amazon’s strategy is to subsidize the initial Kindle Fire sale and hoping to make money on the additional purchases over the lifetime of the product. In light of these numbers, do you think Amazon has a future with it’s Kindle Fire tablet against the iPad?

But what really struck me about the extreme differences in profitability is this comparison of Apple and Microsoft product lines (source: @asymco twitter):

(source: @asymco twitter)

This shows what an impressive and sustained success the iPhone has been. And the iPad is on track to grow even faster. Horace Dediu guesses that Apple’s iPad will be a bigger profit generator than Windows in one quarter, and a bigger profit generator than Google (yes, all of Google) in three quarters. We will check on those predictions when the time comes…

 
2 Comments

Posted by on May 2, 2012 in Financial, Industrial

 

Tags: , , , , , ,

Side by Side: Apple, Microsoft, Google, Amazon

Side by Side: Apple, Microsoft, Google, Amazon

Ed Bott at ZDNet.com wrote a post with the title: Microsoft, Apple, and Google: where does the money come from? He looked at the quarterly reports of these companies (links to sources in the article) and displayed a pie-chart of the revenue mix for each of them. Inspired by that, I added a fourth company – Amazon (source: 10-K for 2011) – and aggregated those pie-charts into one graphic.

Revenue Mix for Apple, Microsoft, Google, and Amazon

All four are large consumer-oriented technology companies; like millions of customers, I use many of their products and services every day. They each operate with different businesses models:

  • Microsoft: Software
  • Apple: Hardware
  • Google: Advertising
  • Amazon: Retail

Yet as a consumer I rarely think about these differences. All of them use state-of-the-art technologies like cloud-computing and mobile devices to achieve integrated end-to-end experiences geared to increase revenues in personal computing (Microsoft), smart mobile devices (Apple), online search (Google) or shopping (Amazon). And arguably all of them derive major competitive advantage from their software, such as Apple’s iOS which introduced the touch interface.

Perhaps most surprising is Google’s almost singular reliance on advertising, which makes it a very different business model. They offer all their technology for free – from search to mapping to operating systems and social media – to grow and retain online attention as enabling condition for advertising revenue. For a business this big the near complete dependence on one source of revenue is unusual; perhaps its time for Google’s leadership to seriously consider a diversification strategy? Without it Google is arguably more prone to disruption (such as from Facebook) than the other companies. Speaking of disruption: Apple derives almost 3/4 of its revenue (73%) from iPhone and iPad, neither of which existed 5 years ago. As Ed Bott points out, those two products now drive an astonishing $33.5b revenue per quarter!

To compare the companies by their absolute numbers, here is a bar chart of market capitalization, revenue and profit: (all in billions of Dollars and for Q4 2011, market cap as of 2/3/12)

Market Cap, Revenue and Profit for Apple, Microsoft, Google, and Amazon

Market cap of these four companies combined is approaching $ 1 trillion. Much has been written about the differences in market valuations relative to revenue and most importantly profit. The markets undervalue Apple and overvalue Google and Amazon. Let’s compare these dimensions (and number of employees) in the following radar plot:

Relative business performance for Apple, Microsoft, Google, and Amazon

The plot shows the relative performance of all with the highest in each dimension normalized to 100%. Amazon shows by far the smallest profit in the last quarter. Given it’s retail nature, it’s profit margins have always been smaller; and CEO Jeff Bezos has long emphasized the strategy of investing in future growth at the expense of present profits. Microsoft continues to enjoy very solid profit margins in a large, well diversified business. Google has incredible talent and for now is the undisputed king of online advertising. But Apple leads in all three factors, and it achieves 2x Microsoft’s results with less than half the number of employees! Apple’s profit is 1.5 times that of the other three combined! And it makes more than 60% of the profit with less than 20% of the employees. In fact, Apple’s market capitalization is now higher than $10m per employee! It must feel pretty special to be one of them these days…

Postscript: On Feb-13 analyst Horace Dediu at Asymco.com published an article with time-series data for the above companies (except Amazon) over the last 18 quarters (since 2007). It shows the evolution over time as depicted in this chart:

Apple Microsoft Google - Revenue and Operating Income 2007-2011

The article is called “The World’s Biggest Startup“. It’s main point is this: Microsoft and Google both grew their businesses steadily, but did not change their type of business. Apple did some of that in its established business segments, but more importantly and disruptively it added new categories (iPhone and iPad) for dramatic growth. That’s what startups do. Just so happens that Apple – whose stock today for the first time hit $500 – is also the most highly capitalized company in the world (around $460B). If Apple is a startup now, what will they look like when they are fully established?

 
3 Comments

Posted by on February 6, 2012 in Financial, Industrial

 

Tags: , , , , , ,

Market Capitalization Inequality in the Steve Jobs era

The excellent analyst website asymco.com recently published a post titled Visualizing the Steve Jobs era. In it they display an area chart of the relative size of market capitalization of about 15 companies they have tracked for the last 15 years.

Since I had looked at the Gini index of a similar set of companies in an earlier post on Visualizing Inequality I contacted the author Dirk Schmidt. Thankfully he shared the underlying data. From that I calculated the Gini index for every quarter and overlaid a line chart with their area chart.

Share of Market Capitalization Area Chart overlaid with Gini Index

Dirk elaborated in his post and identified three distinct periods in his post:

  • Restructuring of Apple 1997-2000 – Gini remains very high near 0.85 due to MSFT dominance
  • iTunes era 2001-2006 – Gini decreases to ~ 0.55 due to AAPL increase and taking share from other established players
  • Mobile devices era 2007-2011 – Gini increases again to 0.65 due to increasing dominance of AAPL and irrelevance of smaller players

Regardless of the absolute value of the Gini index – note the caveat from the earlier post that it is very sensitive to the number of contributors – the trend in the Gini can be an interesting signal. One company dwarfing every other like a monopoly corresponds to high Gini (here 0.85 due to MSFT dominance). A return to lower Gini values (here down to ~0.5) signals stronger competition with multiple entrants. The recent reversal of the Gini trend (up to 0.65 due to AAPL dominance) is a sign that investors see less choices when it comes to buying shares in those tech companies. Whether that’s a leading indicator for consumers seeing less choices in the marketplace is another question…

 
Leave a comment

Posted by on September 29, 2011 in Financial, Industrial

 

Tags: , , ,

 
%d bloggers like this: