Get with the fun, kids!
Good news: New CEO at RIM, which needed new leadership like I need a Bloody Mary on New Year’s Day. Bad news? It’s business at usual:
RIM Chief Executive Thorsten Heins joined the company’s chairman of the board, Barb Stymiest, in a conference call with investors on Monday morning. It was the first chance for investors to hear from RIM’s new CEO, who took over on Sunday after co-CEOs Mike Lazaridis and Jim Balsillie resigned.
Heins told analysts and investors that he is not pursuing strategic options for RIM like a sale of the company or a split. He also indicated he is focused on RIM’s current strategy, which involves the struggling PlayBook, a tablet that cost the company $485 million from unsold inventory last year.
Analyst Mike Abramsky with RBC Capital Markets said Heins seemed upbeat and optimistic about his new role at RIM. But he also said that RIM’s recent struggles have been a result of “process execution” and marketing, as opposed to product innovation.
Yes, introducing the world’s only tablet that couldn’t work your calendars or your email certainly had the virtue of never having been tried — but I still wouldn’t call that an innovation.
Fact is, RIM has failed on all counts, and had better start getting innovative in a hurry if it’s to survive.
“Channel stuffing” is an age-old practice for Detroit, and other industries, too. Manufacturers ship more widgets than consumers want, then try to generate Widget Excitement! by announcing how many widgets they’ve shipped. Never mind that widgets are stacking up, unsold, on store shelves, in shipping containers, rented parking lots, wherever. The important thing is to keep churning out product in the hopes that someone, somewhere can sell it all.
Example: Apple touts how many iPads and iPhones they sell to consumers, because they sell as many as they can make. Everybody else talks about how many phones and tablets they’ve shipped to retailers, and wait for the inevitable deep discounts to clear the shelves.
Keep that in mind when you read this:
Some Chevrolet dealers are turning down Volts that General Motors wants to ship to them, a potential stumbling block as GM looks to accelerate sales of the plug-in hybrid.
For example, consider the New York City market. Last month, GM allocated 104 Volts to 14 dealerships in the area, according to a person familiar with the matter.
Dealers took just 31 of them, the lowest take rate for any Chevy model in that market last month.
The story hastens to add that
many dealers have been waiting for resolution of the National Highway Traffic Safety Administration’s investigation into the risk of fires in the car’s battery pack. Last year three packs caught fire in the days or weeks following government test crashes.
But let’s be honest. If Volts were selling, dealers would take them — investigation or no investigation. (Oops: No investigation! Move along; nothing to see here.)
Fact is, Government Motors has to keep producing Volts, or risk severe embarrassment to its major shareholder: The Obama Administration. But you can stuff the channels only so deep. Eventually, GM will have to offer huge incentives to move Volts off the dealer lots — incentives, I imagine, that will make the existing $7,500 tax incentive (paid for by you and me) look small.
A politically-friendly electric motor allows GM to sell a $13,000 three-banger for about $33,000 (shoddily-equipped). Generous subsidies allow them to first mark up to price to $40,000. Somewhere between $13,000 and $33,000 is the real market-clearing price of this car.
Does $20,000 sound about right for an undersized family sedan that runs mostly on coal? The current hot car in the full-size family segment is the Hyundai Sonata, which has a base price just under $20k. If there’s a lesson in all this, I suppose it’s that GM sold about 7,500 Volts in the US last year, while Hyundai sold 225,961 Sonatas.
And, oh year: Korean taxpayers didn’t lose tens of billions (and counting) for the privilege of channel-stuffing overpriced cars nobody wants to buy.
But that’s how crony capitalism works: Robbing Peter to pay Paul while keeping up the appearance that Peter is the one getting the benefit. (Jobs! We saved GM jobs!) Eventually it all comes crashing down, since consumers won’t take even for free things they don’t like.
The Administration must have been hoping that there was no possible way for a low-volume, halo vehicle could overstuff the channels so quickly. But here you have it: Still more than nine months away from the election, and one simple story illustrates what an expensive flop GM has made of the Volt.
There’s political hay to be made here, and lots of it.
Article I, Section Six of the Constitution of the United States:
The Senators and Representatives shall receive a Compensation for their Services, to be ascertained by Law, and paid out of the Treasury of the United States. They shall in all Cases, except Treason, Felony and Breach of the Peace, be privileged from Arrest during their Attendance at the Session of their respective Houses, and in going to and returning from the same; and for any Speech or Debate in either House, they shall not be questioned in any other Place.
The Transportation Safety Administration of the United States:
The TSA says Sen. Rand Paul “was not detained at any point” but “triggered an alarm during routine airport screening and refused to complete the screening process in order to resolve the issue.”
“Passengers, as in this case, who refuse to comply with security procedures are denied access to the secure gate area,” the TSA adds. “He was escorted out of the screening area by local law enforcement.”
We didn’t detain the Senator; we just kept him back a little while and made him miss his flight.
I’ll drunkblog tonight’s GOP debate and tomorrow night’s State of the Union Address.
But on Thursday, the Republican contenders will have to go at it without my assistance. Turns out, I do have a limit — and it’s two drunkblogs per week, tops.
This might change, however, during the general election, and/or upon the perfection of the affordable robot liver.
Apple, Inc. is worth more than Greece, the country. Really:
Only Exxon Mobil (XOM, Fortune 500) has a higher valuation, at about $420 billion. PetroChina (PTR) is Apple’s closest competitor, at $270 billion, and Microsoft (MSFT, Fortune 500) follows at $235 billion.
Apple’s market cap is higher than the gross domestic product of Greece, Austria, Argentina, or South Africa.
I don’t have a mortgage, so I’m pretty sure I’m worth more than Greece.
It’s another epic production with a cast of thousands! Hear Marianne Gingrich spill the sordid details of Newt’s sex life! See the President’s new Chief of Staff deal with the Social Security crisis! Feel the terror of Pon Farr in Washington! And experience unbearable pain of Obama making your brain melt! All on another thrilling episode of… The Week in Blogs!
Rasputina – Live, from 2010: “The Olde Headboard.”
I had no idea Melora Creager & Co. were back together and touring. I might have to catch a show if they ever make it out this way.
With a tip of the hat to Jim Geraghty comes a story that’s just grrrrrrrrrrreat for the GOP in Oregon:
One of the races easily lost in the hubbub of the presidential race is the special election in Oregon’s 1st Congressional District, which was, until recently, represented by Democrat David Wu. You remember him.
A new poll, commissioned by the campaign of Republican Rob Cornilles, shows the GOP nominee within striking distance of Democrat Suzanne Bonamici in a fairly heavily Democratic-leaning district.
Wow. But there’s more, this time from Moore Information:
As ballots begin arriving in voters’ mailboxes, Cornilles appears to be surging. This surge is likely the primary reason the Democrat Congressional Campaign Committee has continued their aggressive spending and also helps explain the recent purchase of more than $200,000 in the Portland media market by the Democrat controlled House Majority Fund Super PAC.
I’ll be watching the special election very closely at the end of the month, along with an update or two to the Electoral College map.
The Royal Navy’s multi-billion pound fighter plane programme is under threat amid claims that its new all-purpose jets cannot land on aircraft carriers, it has emerged.
Leaked Pentagon documents claim a design flaw in the Joint Strike Fighter (JSF) has caused eight simulated landings to fail.
The “F-35 Joint Strike Fighter Concurrency Quick Look Review” claimed the flaw meant that the “arrestor” hook, used to stop the plane during landing, was too close to the plane’s wheels.
Time was, the F-35 was nicknamed the “Joint Strike Fighter,” because it would be the new all-purpose fighter for the Air Force, the Navy, and the Marines. Being unable to make carrier landings would make it slightly less Joint.
Of course, the Navy is looking at a RIF of a carrier task force or two, going from 11 flattops to ten or maybe just nine. But it won’t matter if they don’t have planes to put on them.
My own thinking? Rethink the carrier. More drones, smaller crews, shorter decks — and pump some of the savings into avoiding another RIF.
The 1,000-foot carrier might have its best days behind it. They also provide great big targets — which we can’t afford to lose even one of. More numerous, smaller, cheaper ships with fewer officers and men make losses bearable. And budgets, too.
The ten most valuable brands in the world, ranked by Bloomberg, are all American. Japan’s Toyota barely misses the Top Ten at the #11 spot, followed by Germany’s Mercedes. Google and Apple made huge gains, up 27% and 58%, respectively, in brand value, just in the last year.
UPDATE: The Bloomberg link died overnight, so try this one instead.
QE1 pumped $2,000,000,000,000 into the economy, with nothing to show for it. QE2 — a steal at just $600,000,000,000 didn’t do much, either. So then, naturally, here comes QE3:
The Federal Reserve is likely to step in with $1 trillion worth of easing that could be announced as soon as this month, according to a growing consensus of economists who see the recent uptick in economic growth as unsustainable.
What’s another $1,000,000,000,000 among friends?
It’s difficult to overstate the importance of what Apple announced this morning in New York:
Digital textbooks available for iBooks 2 on iPad will come at a significant discount over regular paper-based books, with prices at $14.99 or less from major publishers like McGraw Hill and Pearson.
Titles announced at Thursday’s media event from Pearson include Algebra I, Biology, Environmental Science, Geometry. These titles are used by more than 4 million high school students.
McGraw Hill is also on board, Apple’s Phil Schiller revealed. They are offering Algebra I, Biology, Chemistry, Geometry and Physics titles as of today on the iBookstore with iBooks 2.
$14.99 or less for textbooks, with major publishers already on board. And these are improved, multimedia textbooks, not mere PDFs of existing books.
UPDATE: Video of these things in action here, and it’s impressive.
Only in modern America, folks:
Six House Democrats, led by Rep. Dennis Kucinich (D-Ohio), want to set up a “Reasonable Profits Board” to control gas profits.
The Democrats, worried about higher gas prices, want to set up a board that would apply a “windfall profit tax” as high as 100 percent on the sale of oil and gas, according to their legislation. The bill provides no specific guidance for how the board would determine what constitutes a reasonable profit.
The Gas Price Spike Act, H.R. 3784, would apply a windfall tax on the sale of oil and gas that ranges from 50 percent to 100 percent on all surplus earnings exceeding “a reasonable profit.” It would set up a Reasonable Profits Board made up of three presidential nominees that will serve three-year terms. Unlike other bills setting up advisory boards, the Reasonable Profits Board would not be made up of any nominees from Congress.
Hat tip to Jazz Shaw, who I had to remind on Twitter that, “for progressives, Atlas Shrugged is an instruction manual.”
Rick Perry is out, although it was almost as if he was never really in. All the promise he showed as Governor of one of the best-run states in the Union was squandered by a just-plain-lousy campaign. His early debate performances — the single most-important metric this season — were awful. But he studied hard, and from there, they became comically awful.
But I think Perry’s biggest problem was he never articulated a vision as President. It was, as I’ve remarked before, as though he were running for Governor of America. That also showed up in a looseness, an unseriousness, on the stump, better suited to a glad-handing local pol than the next President of the United States.
The last straw had to have been a recent poll showing him running third behind Romney and Gingrich in Texas. When you’re the third-favorite son? Your campaign is over.
Word is, Perry will endorse Gingrich, on the eve of Gingrich’s immolation-by-ex-wife courtesy of ABC News. I’m not sure why Perry feels the need to endorse anyone at this stage, except perhaps as part of an anyone-but-Romney movement. It looks to be a little late for that, so I honestly don’t understand what he’s thinking.
But that’s been pretty much the case since Fabulous Governor Perry became Terrible Candidate Perry. And what a shame for a guy who — on paper — was one of the best candidates the GOP field had to offer.
But is that better or worse than Carter?
One of Washington’s more corrupt figures has drawn a primary challenge:
Alabama State Senator Scott Beason (R-AL) announced his candidacy for Alabama’s 6th Congressional district late last week against 10-term incumbent, Spencer Bachus (R-AL). This comes on the heels of multiple accounts of corruption exposed initially in Peter Schweizer’s best selling book, “Throw Them All Out.”
Since Schweizer’s book came out, CBS’ 60 Minutes did a feature on Congressman Bachus’ insider trading, and that of others. Since then, his own constituents held a rally demanding Bachus’ resignation. In response, he committed to hold hearings on the STOCK Act, an effort to reform insider trading. Later, the Congressman reneged.
His constituents reacted angrily, committing to recruit a strong candidate against the Congressman, and many names were floated. Just after Christmas, Judicial Watch named Bachus one of the top 10 most corrupt politicians in Washington.
“This (Spencer Bachus) is clearly not proper representation of the good people of Alabama” said Deanna Frankowski, of Rainy Day Patriots, a local Tea Party group. “I told Scott Beason that we need his leadership against Bachus, and that I would help him if he ran.”
Good. The GOP is undergoing a period of eating its own, which hurts in the short run. But the party got fat, corrupt, and lazy during the Naughts, and must now pay the price.
In the long run, this is a good thing. In the short run, you end up with some deeply weird candidates like Christine O’Donnell and Sharon Angle. But more stories like the one above, and the process might be mostly sorted out by 2014 or even 2012.
Rick Moranis — yes, that Rick Moranis — has a devastating piece of satire in today’s WSJ:
This morning, while I was grinding my blend of French, Colombian and Italian coffee beans, it occurred to me that I could be doing harm to the coffee shop and diner businesses in my neighborhood by making my own coffee at home. Might I have a responsibility and obligation to consume their product, either within their premises or brought right to my door by one of their speedy, undocumented-alien delivery men?
I also wondered whether still using my old, reliable German-brand coffee grinder, manufactured in China, might be an unpatriotic betrayal of American kitchen-appliance makers by choosing not to buy their Chinese-made grinder.
As I poured some house-brand almond milk into my homemade granola, I thought about the depressed demand and earnings on the higher-priced product manufacturers that I wasn’t patronizing, their resulting order and production declines, and the backlogged inventories and possible layoffs at their factories.
How much of this country’s economy am I personally destroying by my consumption preferences? I honestly never intended to do so much harm.
Now go read the whole thing.
(H/T, Will Collier.)
To do this. Computers were invented to make this video.
Philip Klein — could Mitt Romney sweep all 50 states? It looks possible:
Think about it. Romney has a commanding lead in Florida, and will simply obliterate the field if he enters the Sunshine State after having won South Carolina. And if he does win South Carolina and Florida, what will become of the rest of the field? Rick Perry, who came in fifth in Iowa and bailed on New Hamphshire, already has very little justification for continuing. A distant finish in South Carolina would give him even less reason. It’s true that there are states in which Rick Santorum and Newt Gingrich can theoretically beat Romney, but if they can’t beat him in South Carolina, where will they go from there? Even now, Romney has a 23-point lead nationally, according to Gallup.
Sure, perhaps Rep. Ron Paul’s fervent supporters can out-hustle Romney’s organization in a caucus here or there. But it’s also possible that Romney will run the table. Remember, as the field gets narrowed, it’ll get a lot harder for Paul to outright win a state, because he’ll have to start getting into the 40-50-plus point range.
Bill Whittle likes to say “a perfect Democratic storm” of events swept Barack Obama into office in 2008 — and even then he could garner only 53% of the vote. Something similar could be happening in this GOP primary for the unloved Romney.
I was about to add something about the GOP’s shallow bench this year, but really that’s just one of the elements of Romney’s “perfect RINO storm.”
Is the iPad a personal computer? Interesting debate going on at Asymco, but it doesn’t really matter. The iPad is a competitor to portable PCs, having effectively gutted the netbook market since its introduction in 2010. This chart from Fortune tells the story.
In other words, if you count the iPad as a PC, then Apple just became the world’s Number One computer maker. That’s a long, hard slog from the Ugly Times in the mid-90s, when Apple was nearing bankruptcy and Microsoft was selling a clearly-superios operating system.
But if you don’t count the iPad as a PC, it really doesn’t matter. Consumers dropped zero-margin netbooks from Acer, HP, Dell, and the rest, to buy high-margin iPads from Apple. Nearly two years into (yet another) Apple-redefined market, there is still no clear competitor. For example: How many zero-margin Kindle Fires did Amazon sell last quarter? Amazon ain’t saying. Wall Street thinks Apple sold between 11 million and 18 million iPads during that time.
If I had to guess, Apple’s biggest-selling version is the 32GB iPad with 3G — by a plurality, not a majority, share of sales. It retails for $729. At a guestimate 35% margin, that adds up to…
…lot of darn dollars.
Is the iPad a PC? Well, if you define “personal computer” to mean “a race-to-the-bottom device which generates very tiny profits,” then, no, the iPad is most certainly not a PC.