Thursday, August 24, 2017

physiological constants and constraints

I wonder how much discontinuity is created by physical, in particular physiological, constraints?  And I wonder how much those discontinuities are exploited in investment decisions and forecasts.  I'm thinking about things such as body sizes, minimum sleep periods, and elimination functions and their relationship with economies of scale and extrapolation of product sizes and uses.  For example, cars have a hard time getting smaller than a certain limit because people generally fit within a certain band (and so you get oddly proportioned vehicles such as a Smart).

Friday, August 18, 2017

American Political Parties and Trump

Political party affiliation in the U.S. is a funny thing.  The fluidity with which people can switch parties and the lack of any requirement beyond indicating one's current preference mean that being a "member" of a party is really based on personal integrity.

Which brings us to the funny situation of the Republican party not being able to use expulsion as leverage over Trump (unclear if they would want to expel but not even having the tool is a handicap).  Trump, of course, is not a Republican (or a Democrat) but, more importantly, as someone without personal integrity, the traditional constraint on abuse of a claim of membership falls away.  And so he hijacked the Republican party machinery and nomination rules to become president.

I raise this because such a threat of expulsion (during the election or now, during the presidency) could spur the creation of new parties (with new platforms and alignments) but, unfortunately, because the threat cannot be invoked, that creation remains unlikely.

And so, we will have a populist democrat president in three years who will likely be just as inept and destructive (albeit in different forms and perhaps less obvious forms) as Trump.

Thursday, July 27, 2017

local politics and residential real estate funds

How much will the increased presence of residential real estate funds in some neighborhoods affect local voting?  And what are the likely changes in voting patterns for things like tax increases for schools?

Wednesday, May 3, 2017

Wearables

To get a sense of what Apple's "wearables" business might look like, I think of:

1) the Watch as an iPod;
2) AirPods as an iPhone accessory; and
3) Beats as transient.

From that view, given that iPods sold about 40-50 million per year from 2006-2012, it seems plausible that the Watch could sell 40 million per year.  As noted before, the Watch is cheaper than most iPods were and is far more versatile than any except the Touch.

Airpods have a meaningful cost but are not outrageously expensive relative to other truly wireless headphones.  If I treat any headphones (including Beats) with a W1 (which is really the key to the AirPod), I can imagine 10% of iPhone buyers also buying AirPods.  Approximately 200m iPhones are sold each year so this is about 20m AirPods a year.

I think Beats sales (actually, sales of all expensive large headphones, of which Beats is the largest brand) are a bit of a fad so, except for those that include the W1, I assume Beats withers away over time.

Based on this and an average Watch price of $300 (this excludes accessory sales) and AirPod price of $150, we see easily $3.7b per quarter in revenues without any significant advances over what is out there today (some incremental advances over time of course, but no sharp breaks).  Assuming that accessories, Beats, AppleTV and others in Apple's "other products" segment are non-zero, it seems reasonable to think there is well more than an additional $4b in revenue a year from the Watch and AirPods.  Or, as one might think of them, from the S and W series chips.

Thursday, April 6, 2017

international soups

Just realized that miyeok guk is a close cousin of caldo verde.

Monday, March 20, 2017

Apple iPad Pricing

If Apple is sincere in its stated belief that iPad is the future of personal computing (i.e., “PCs aretrucks”), Apple’s relatively low pricing strategy makes great sense.  Setting up an established base of users can create a virtuous circle of application development to defend against an assault by an alternative future.  And setting such a base up quickly makes sense if establishing that defensive wall is the goal.

I say "relatively" low pricing strategy as I know iPad prices are not low.  But they are lower than one might expect of Apple.  This is a company that still wants to make sure it makes money when it sells something and so maintains healthy unit profit margins.

To balance these competing goals (margin and scale), Apple must keep its prices realistic and this has resulted in a pace of advancement that is likely slower than what Apple is actually capable of (iPads could probably run macOS if they had to).  But that is fine if advancement isn’t necessary to grow the market or, put alternatively, if the market can be grown more quickly through price than with specifications.

Thursday, March 9, 2017

check back in October 2017 and 2018

Apple hired a person who may be the smartest person on the planet to play a large role in Siri.  I know him personally and believe we will see something remarkable over the next 6-18 months.  Just wanted to set this out now for credibility (or claimchowder) in the future.