New York Times on Apple Job Growth

The New York Times has published a rather silly article in which they claim that Apple has never contributed any jobs to the economy.

Well – they do not put it exactly that way – but their article practically says it outright.

I will agree with the quote:

… said Gary P. Pisano, a professor of business administration at Harvard Business School. “It’s hard to say the exact size.”

I agree as well that the methods used by the company they hired could be the subject of legitimate debate (as long as that statement is NOT interpreted as an innuendo that someone was dishonest.)

However, the following quote is a bit odd:

David Autor, an economics professor at the Massachusetts Institute of Technology, said via e-mail that the “entire business of claiming ‘direct and indirect’ job creation is disreputable” because most of the workers Apple is taking credit for would have been employed elsewhere in the company’s absence.

They go on to note:

Mr. Cappelli said. “If you say, ‘If there had been no Apple, those people would not have jobs,’ that’s not true.”

Of course it is not true that every single one of those individuals would be jobless, but if there were no Apple and engineer X took a job at HP then there would be some other engineer who would not have a job.

According to the logic provided, then no business anywhere creates any jobs at all. Everybody else would have been working somewhere else. This is – of course – utter foolishness.

I will admit that they do conclude with the statement:

Apple is, however, an innovative company that created a market for tablets and radically increased demand for smartphones.

In reality – the smartphones existing before the iPhone are not today considered smartphone. Additionally, the app business was relatively nonexistent prior to the iPhone, so perhaps they should be credited with ALL the apps developers (snicker).

As for people buying alternative products if Apple did not exist… sure they would be buying Asus and Lenovo computer that are totally designed, engineered, and built in China in factories with absolutely NO oversight at all. And…

They would be running DOS 12.1. (What a pleasant thought.)

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A review/analysis of the Kindle Fire

I am working on a review/analysis of the new Kindle Fire, by Amazon. This will be a set of permanent pages on a sister blog.

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Kindle Fire, Full Color 7″ Multi-touch Display, Wi-Fi 

My First Take:

Amazon’s new Kindle Fire was announced the other day, and it has set off quite a debate on what it is going to do in the tablet market place.

Specs | Features | Discussion | Impact | Analysis

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Bloomberg on the new Amazon Kindle Fire

Re: Bloomberg Article:

http://www.bloomberg.com/news/2011-09-29/amazon-bargain-tablet-to-grow-market-without-being-ipad-killer-.html

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Overall this is a pretty good article, but I thought I might make a couple of criticisms.

1-

You write:

• …Sebastian said. “The iPad’s more powerful, and when you restrict it to Amazon’s Android app market, you’re missing a lot.”

The reference here is confusing. I think you should have it read something like “…restrict it [The Fire] to Amazon’s…”

Otherwise it says that the iPad is restricted to…

2-

• …The number of people who really want the front-facing camera are going to be small relative to the people who want to pay $199 for this thing.”

Of course this is also a quote, but you should note that the Fire has NO camera at all, not missing only a  front facing one, which is what the isolated statement implies. BTW, I believe that FaceTime – and other video chat systems such as Skype –  actually is a very big selling point for the iPad.

3-

• That compares with a $350 cost of production for Apple’s tablet, giving the Cupertino, California-based company a profit of $149 per unit.

A financial magazine should be the last to confuse gross margin with profit!!! Apple’s profit on the base iPad is much much smaller. They do make significantly higher margins/profits on the upgraded models.

On my personal analysis…

1. I think the 2 quotes really point out what will happen. The Kindle Fire will be regarded as a “poor man’s iPad” with its many limitations. The quote on which you end “You’re not going to beat Apple at its own game, but Amazon can create its own [game].” is the most relevant. Most of the customers will be ones who are either just looking for an e-reader, or really cannot afford the iPad, neither of which are Apple  customers.  I think in a perverse way, while it will of course take some customers from iPad, it may also bolster iPad amongst others. I think some people will jump into the Fire only to realize the reduced experience, and later go back to the iPad.
2. I think that Amazon may run into some trouble here on price. It appears to be losing $50 on each   device sold, and this does not include marketing, and other costs related to the device. With the original Kindles they could count on making up that amount in e-books. After all, this was the only thing it did (pretty much) and only from Amazon. With the Fire, however, this is more problematic. General tablet buyers are not necessarily big book buyers. Nor are Android users big on paying for apps. (Google loves this fact since they can then tap into the advertising revenue.) Amazon Prime is just another loss leader to garner overall customers. Somehow, the need to makeup $150 per device in order to make the thing worth while. I believe this will be difficult for them to do.