After a big public announcement of the sort Apple had this week for the iPad CEO Steve Jobs often takes time in the day or two afterwards to have a Town Hall at One Infinite Loop, making himself available for questions from employees bold enough to stand up and take one right between the eyes.
This time, the big topics included Google and Adobe — no surprises there. Google recently unveiled its own Android-powered handset, the Nexus One, whose release Jan. 5 prompted Jobs to perhaps over-react by announcing on the same day that the iTunes store had served up three billion apps and that “… we see no signs of the competition catching up any time soon.” Apple’s billionth iPhone app download was greeted with great fanfare, but the two billionth not so much, so it felt a tad like Jobs was feeling some heat.
Jobs, characteristically, did not mince words as he spoke to the assembled, according to a person who was there who could not be named because this person is not authorized by Apple to speak with the press. On Google: We did not enter the search business, Jobs said. They entered the phone business. Make no mistake they want to kill the iPhone. We won’t let them, he says. Someone else asks something on a different topic, but there’s no getting Jobs off this rant. I want to go back to that other question first and say one more thing, he says. This don’t be evil mantra: “It’s bullshit.” Audience roars.
About Adobe: They are lazy, Jobs says. They have all this potential to do interesting things but they just refuse to do it. They don’t do anything with the approaches that Apple is taking, like Carbon. Apple does not support Flash because it is so buggy, he says. Whenever a Mac crashes more often than not it’s because of Flash. No one will be using Flash, he says. The world is moving to HTML5.
The world, of course, includes Google, which last week in a somewhat more modest development bypassed Apple’s iPhone app blockade by unveiling an html5 version of Google Voice, which takes full advantage of mobile Safari on the iPhone. Wired.com found it to be an impressive variation of the app Apple has neither approved nor officially rejected.
And it is, of course, in keeping with Google’s stated view (Android app marketplace notwithstanding) that the future is really in web-based applications and not in mobile apps at all. Web-based applications of the sort html5 makes much more viable.
So, great work rallying the troops, Steve — but be careful what you wish for.
NO doubt about it, 2009 was ne of the most economically challenging years because it has impacted the way Malaysians view their personal financial futures.
It may even trigger the Baby Boomers (aged 64 to 46) and Generation X’ers (aged 45 to 30) to relook their retirement planning processes to ensure financial sustainability for old age.
We will be confronted with situations of not having enough money for old age if our retirement savings suffer from continuous financial pressures like consumerism, inflation and financial market volatility.
And if this situation continues collectively as a nation, it can pose challenges for the Government in financing retirement, old age living and healthcare as we move towards an ageing society.
By 2020, Malaysia’s population above the age of 60 will increase to 3.2 million, or 9.5%. The United Nations, in its guidelines, classifies any nation with 10% of its population above the age of 60 as an aging nation.
Even if we are slightly under the 10% mark in 10 years’ time, we should be planning and implementing retirement policies now so that the future economic stresses of our ageing society are lessened.
Like the saying – “An ounce of prevention is worth a pound of cure” – year 2010 is the turning point of a new decade to implement new retirement strategies and policies, with collective effort required from the Government, employers and individuals.
The big picture
We must take a new approach to creating a progressive “silver society”. Retiring and growing old will no longer be synonymous with declining wealth and health if we start to take proactive steps while learning from developed countries.
The World Economic Forum September 2009 report on “Transforming Pensions and Healthcare in a Rapidly Ageing World: Opportunities and Collaborative Strategies” was published at a time when the economic crisis was stimulating new critical thinking about fundamental retirement and ageing challenges.
A concerted effort from government, private sectors and civil societies is essential to address an ageing population with declining labour force, and alarming healthcare and pension benefit costs, according to the report.
It highlights 11 strategic options to better cater for the changing retirement and healthcare expectations. While each strategic option could stand alone, their strength lies in their synergy and complementarity.
We shall focus on two of the 11 options which can be easily implemented, as the others require more effort and time.
Promote work for older cohorts
This implies shifting public policy, business practices and personal behaviour towards lifetime employability and active ageing. For many people, productive employment is now possible and desirable well into the 70s. Life expectancy has increased by around two decades in the last half century, while retirement ages in many countries have changed very little.
Our mandatory retirement age in Malaysia is at 56 years for the private sector and 58 years for government employees. If life expectancy increases into the 70s, it will mean that, on average, a Malaysian will have almost 20 years of no work and no pay.
There are many positive implications of increasing the mandatory retirement age to, at least, 65. Baby boomers and generation X’ers have more years to earn money, more contributions to the Employees’ Provident Fund, more savings for investment opportunities and less years idling before passing on. Increasing the mandatory retirement age may also help to lessen the Government’s economic stress and overcome the declining labour market.
Financial education and planning advice
In the area of retirement, individuals are increasingly expected to take responsibility for the management of risks and determining their level of retirement income, and must bear the consequences of wrong or inappropriate decisions.
Financial education is the process by which individuals improve their understanding of insurance, investment, retirement saving products and concepts.
This enables them to become more aware of risks and opportunities, develop the skills and confidence they need to make informed choices, know where to go for help, and take effective action to ensure an adequate retirement fund.
Financially literate individuals are more likely to plan responsibly for their old age. However, policy-makers and financial providers must acknowledge that financial education alone may not be sufficient to overcome behavioral biases such as a tendency to procrastinate about retirement savings decisions.
“Every cloud has a silver lining” if we are successful in implementing some of these strategic options which are relevant to us in the next 10 years. I am sure there will be new opportunities to build a vibrant “silver economy” where wisdom and experience are valued as much as youth in our society.
Yip is a personal financial coach and also founder and CEO of Abacus for Money.
1. Promote work for older cohorts For many people, better health in old age means productive employment is now possible and desirable well into their 70s. Coordinated action to change public policy, business practices and personal behaviour can promote lifetime employability and active aging.
2. Shift delivery of healthcare to a patient-centred system Instead of a reactive focus on curing disease, patient-centred healthcare systems have a proactive focus on maintaining good health. Such a fundamental reorientation of healthcare systems can help reduce the incidence of preventable chronic diseases in old age.
Stimulate consumer empowerment
3. Promote wellness and enable healthy behaviours Lifestyle factors and behavioural choices play a major role in determining the level of health in old age. Making people aware of the health consequences of their choices must, however, be accompanied by creating physical and social environments that are conducive to healthy behaviours.
4. Provide financial education and planning advice Financially literate individuals are more likely to plan responsibly for their old age. Improving awareness and understanding of private pensions and retirement saving products enables people to make informed choices and take effective action to ensure an adequate retirement income.
Strengthen funding and savings
5. Encourage higher levels of retirement savings As public pensions increasingly offer lower replacement rates, retirees’ standards of living depend more on their level of complementary private benefits. Incentives and opportunities need to be provided to expand participation in, and increase contributions to, private pension systems.
6. Facilitate the conversion of property into retirement income Reverse mortgages (or “lifetime mortgages”) allow elderly individuals to release equity in their home without the need to sell the home and move to a smaller property. Borrowers can choose to receive the loan in the form of a lump sum, a series of payments or a lifetime annuity.
7. Stimulate micro-insurance and micropensions for the poor As an extension of the microfinance movement, micropensions are a combination of micro-insurance and microsavings products which have retirement income as their primary objective. They target poorer households, and the amounts contributed may be very small.
Optimize capital allocation
8. Enhance pension fund performance Pension fund performance is one of the key drivers of retirement benefits in capital-funded pension systems. It can be enhanced by measures to optimize the design of investment strategies and improve the quality of pension funds’ governance and administrative efficiency.
Improve efficiency and cost effectiveness
9. Realign incentives of healthcare suppliers Better health in old age is compromised by waste and inefficiency in healthcare systems that reward doctors and hospitals for services provided rather than health outcomes achieved. Pay-for-performance measures can improve efficiency by realigning incentives of healthcare providers.
10. Ensure that cross-border healthcare delivery benefits all stakeholders Cross-border healthcare delivery includes patients travelling overseas for treatment and patients interacting electronically with a healthcare provider in another country. It has the potential to be developed in ways that can benefit patients and countries of all income levels.
Enhance risk management and risk sharing
11. Promote annuities markets and instruments to hedge longevity risk Longevity risk is the uncertainty surrounding future improvements in mortality and life expectancy. Annuities protect individuals against this risk. The functioning of annuity markets can be improved by further developing longevity indexes and issuing longevity-indexed bonds.
There is little question that banks need to be reigned in and watched closely – it’s a question of how much
THE international banking community, after having brought the world to the brink of disaster and having wreaked havoc on the economies of the world, is now griping, really griping.
The gripes stem from efforts being made around the world to regulate bank activities, particularly by US President Barack Obama who announced a number of key measures to help ensure that there is no repeat of the crisis that threatened to crash the world.
This, extracted from Obama’s speech last week on the financial reforms, outlines succinctly the changes: “For while the financial system is far stronger today than it was one year ago, it’s still operating under the same rules that led to its near collapse. These are rules that allowed firms to act contrary to the interests of customers; to conceal their exposure to debt through complex financial dealings; to benefit from taxpayer-insured deposits while making speculative investments; and to take on risks so vast that they posed threats to the entire system.
“That’s why we are seeking reforms to protect consumers; we intend to close loopholes that allowed big financial firms to trade risky financial products like credit default swaps and other derivatives without oversight; to identify system-wide risks that could cause a meltdown; to strengthen capital and liquidity requirements to make the system more stable; and to ensure that the failure of any large firm does not take the entire economy down with it. Never again will the American taxpayer be held hostage by a bank that is ‘too big to fail’.”
It was quite clear to anyone who watched the situation closely the reasons for the financial crisis. Banks were taking too much risks with depositors money and were not doing the business of banking properly. Bankers were being rewarded when huge risks they took resulted in extraordinary profits for them, paying themselves millions of ringgit in bonus. There were substantial incentives to take risk. The average bonus at Goldman Sachs for instance was almost US$500,000 a year!
This high figure is because of many staff who routinely earned millions of dollars a year. Goldman’s bonuses amounted to an incredible nearly 40% of revenue – revenue, not profit. And most of its revenues came from proprietary trading – trading for its own account. Because of their huge size, banks have tonnes of deposits.
Citibank’s deposits amount to over US$800bil. If they muscle into proprietary trading – and many of them have – they can move markets by using just a small portion of their deposits. These can be in the commodities, foreign exchange, derivatives or other markets.
In fact major investor/speculator/manipulator – depending on who you talk to – George Soros said at the World Economic Forum at Davos earlier this week that Obama did not go far enough to push banking reform. His arguments ran counter to those by bankers who predictably wanted less regulation. In situations like these, common sense should prevail.
And how about this one which Obama formulated with former Federal Reserve chief Paul Volcker: “It’s for these reasons that I’m proposing a simple and common-sense reform, which we’re calling the ‘Volcker Rule’ – after this tall guy behind me. Banks will no longer be allowed to own, invest, or sponsor hedge funds, private equity funds, or proprietary trading operations for their own profit, unrelated to serving their customers. If financial firms want to trade for profit, that’s something they’re free to do. Indeed, doing so – responsibly – is a good thing for the markets and the economy. But these firms should not be allowed to run these hedge funds and private equities funds while running a bank backed by the American people.”
Around the world people should stand up and fight against this attempt by banks to stop close supervision of their activities, arguing that this will crimp their profits and cut the creation of jobs. The world needs to be protected against bad banking.
We should take heart in this extract of that speech by Obama: “So if these folks want a fight, it’s a fight I’m ready to have. And my resolve is only strengthened when I see a return to old practices at some of the very firms fighting reform; and when I see soaring profits and obscene bonuses at some of the very firms claiming that they can’t lend more to small business, they can’t keep credit card rates low, they can’t pay a fee to refund taxpayers for the bailout without passing on the cost to shareholders or customers – that’s the claims they’re making. It’s exactly this kind of irresponsibility that makes clear reform is necessary.” Well said Obama.
Managing editor P. Gunasegaram says there is no harm done and every benefit derived, from requiring banks to be prudent. After all, are they not the custodians of our money?
Too Big to Fail: Inside the battle to save Wall Street Author: Andrew Ross Sorkin Publisher: Allen Lane
IN the 2008 recession, millions of Americans lost their homes and jobs. While banks developed a sudden aversion to lending, businesses suffered as a result of tight financing. Negative sentiments shrouded the financial markets, confidence evaporated, and stock prices nose dived at unprecedented rates.
Soon, what began as an American credit crisis became global, affecting businesses around the globe and causing millions to lose their jobs. But this is not the way things are supposed to be; at least not what modern economics wants them to be.
Notwithstanding the cyclical nature of business, modern economics and its faith in free markets and globalisation have promised growth and prosperity. Furthermore, in the modern economy, financial innovations ranging from conventional options and futures to the more exotic mortgage-backed securities are supposed to hedge away risks, enabling predictability and safeguarding value of investments.
Or, at least that was what we were told, what Alan Greenspan believed, and what his optimism led us into believing. But theory crashed with reality in 2007. Not only were financial derivatives one of the causes of the crash, markets were not as efficient as it was said to be because prices of assets did not reflect the looming danger behind subprime mortgages.
More importantly, globalisation made the world so interconnected that a plague in the American financial system quickly became a contagion, wiping out jobs, wealth and savings and sending millions of people from less developed countries into poverty.
For those affected by the crisis and wish to gain insights into the circle of culprits and the events that unfolded behind closed doors months prior to the melt down, Andrew Ross Sorkin’s Too Big to Fail enlightens as much as it piques.
It is a narrative masterpiece that reads like a novel. From one emergency to another, it takes us to stories, rumours, events, meetings and conversations between regulators and a cadre of investment brokers and bankers guilty of mismanaging their institutions.
Together they scrambled to rescue beleaguered, cash-strapped financial institutions in attempts to avoid a financial tsunami that was fast unravelling in early 2008 and which peaked in September 2008 with Lehman Brothers’s bankruptcy.
Though it spans over 550 pages, the book is highly readable as it focuses on people and their emotions, rather than on the technicalities related to the crisis. One may think of Warren Buffett as callous only to find him gentle and mild when approached as a potential saviour for the troubled Lehman Brothers.
The Wall Street crowd, however, is a different story. A glimpse into this small circle of elite who sit atop of the world of finance reveals that greed was not the only driving force behind the meltdown. These people, CEOs of Goldman Sachs, Morgan Stanley, Lehman Brothers, JP Morgan, Bear Sterns and Merrill Lynch, in their own endeavour to outshine each other, had driven their firms into engaging in increasingly riskier transactions.
In the end, it was jealousy, ego, greed and their relentless pursuits of short term profit that ruined them as well as their century-old financial institutions, once the epitome of high finance.
However, Sorkin did not so much criticise these CEOs as mock them. If they are, in real life, boastful and vainglorious as any billionaire would be, then their dialogues documented in this book made them look more like a bunch of rollicking teenagers railing about the enormity of a problem presented in front of them.
Much to my surprise, however, the job of rescuing the financial sector was saddled on the shoulders of a few, namely Hank Paulson, former Treasury Secretary under the Bush Administration, Tim Geithner, who succeeded Paulson as Treasury Secretary, and Ben Bernanke, the present Chairman of Federal Reserve. While each of them was impressive in their own way as pragmatic regulators who displayed their feat of strength and leadership in the face of adversity, their former president, George W. Bush, may struck one as senile. On one occasion when Paulson and Bernanke explained to him the negative impact a failed AIG would have on savings and retirement of millions of Americans, the former president asked innocently: “AIG does all that?”
For all its exhaustive reporting, Too Big to Fail is a wonderful human drama but some may find it offers insufficient analysis as to why the crisis happened, what it means, how and where we go from here, and what next.
Furthermore, Sorkin, in his haste to go from one bad firm to another, often explains the financial concepts at play in just a few words. Hence, anybody interested in understanding mortgage-backed securities and credit default swaps and how they were responsible for the collapse will not find much help in this book.
That said, any criticism that the book has failed as an analytic source undermines Sorkin’s objective. As a financial reporter for New York Times and a columnist for Vanity Fair, Sorkin is there for the story, not the analysis. And the story, were it not all so frighteningly true, would have made a wondrous financial thriller.
All eyes of the tech world were on Apple Wednesday as its CEO Steve Jobs showered his team's "latest creation" a tablet computer "iPad" in front of the palpitating industry, media and Apple fans.
Enjoying the new trendy device, many are also asking questions like: will iPad lead and set pace in the consumer electronics as iPod and iPhone did, and how far could it repackage the traditional media and become a benchmark of the industry.
Tablet computer is not a new idea. Companies including Apple, Microsoft and Hewlett-Packard have attempted to enter the market before with limited success due to technical bugs, bulky sizes and high prices.
The top challenge for Apple appears to be whether it could forge a new ground of consumer needs and wants, and fit it into people's daily life.
"iPad creates and defines an entirely new category of devices that will connect users with their apps and content in a much more intimate, intuitive and fun way than ever before," Jobs said.
How could Apple persuade consumers to purchase a hybrid device crossing between a laptop and a smartphone as they already have both? Jobs said the iPad is "so much more intimate than a laptop and so much more capable than a smartphone."
Jobs and his team hope to create an ultimate multimedia experience with iPad through browsing the web, reading and sending email, enjoying photos, watching videos, listening to music, playing games, reading e-books and much more.
A newspaper reading program from The New York Times and the new iBooks store appears to be one of the main selling points of iPad.
Last week, The New York Times announced that it planned to demand payment for access to its website, which has been linked to the new Apple tablet by analysts.
It was announced at the Wednesday event that consumers could purchase e-books from large publishers in the iBooks store including Penguin, HaperCollins, Simon&Schuster, Macmillan and Hachette Book Group.
Apple is reported to have been amassing digital reading material for iPad since last year. Jobs and his team have sent representatives to the Frankfurt Book Fair last October and have been in talks with News Corp, The New York Times Co., Conde Nast Publications (publisher of 18 magazines), HarperCollins Publishers and television networks including CBS and Disney, according to reports last week from the Wall Street Journal which have always had the first-hand information on the Cupertino-based firm.
Meanwhile, the publishing industry have been holding the highest expectations to the iPad, hoping the innovative device could repackage their business model and usher in a digital future with more profits.
For example, The Financial Times is looking at a system of paying for selected articles, whose publisher Pearson, also a major textbooks producer, has expressed its high expectations to Apple's tablet.
However, trials are also waiting for the new device as the market of electronic reading has been shared by many such as Amazon's Kindle, Sony's Reader and Barney and Noble's Nook. Amazon and Sony were reported to upgrade their products this year.
Analysts pointed out that a low-end e-reader priced at 200 dollars could do a great job in e-reading and Apple needs to create a special reading experience to beat these inevitable rivals.
"Amazon has done a great job of pioneering this functionality with the Kindle," Jobs said. "We are going to stand on their shoulders."
PRICE TAG
Starting at 499 dollars, the price tag of iPad looks not to become a problem and polls showed that iPad has got a ready and waiting base before it is shipped to stores in March.
According to a survey on more than 3,300 U.S. consumers conducted by ChangeWave Research earlier this month, 4 percent of the people polled said they were "very likely" to buy an Apple tablet when it is available, while another 14 percent said they were "somewhat likely" to purchase the device.
Meanwhile, some 37 percent of consumers interested in the product said they would like to spend over 700 dollars, and 75 percent of those said they would pay 500 dollars or more.
There are six models with the basic starting at 499 dollars and the most expensive at 829 dollars. An estimated sale of 5 million units in the first year has been seen in several projections.
OTHER OBSTACLES
Although iPad is widely expected to shake up the industry, some analysts said some factors could make the device become an epic failure.
The virtual keyboard could be inconvenient to use as consumers have been complaining about the keyboard of iPhone.
Apple gave the solution to this by creating an almost full-size soft keyboard and iPad can also connects to a keyboard dock with a full-size traditional keyboard. However, people have just seen what it looks like and then consumers have to play with it and then pass judgments. For another, if TV networks and media outlets are not willing (or too willing, resulting in high prices) to partner with Apple, the content could be a stunting factor for the success of iPad. According to reports from the Wall Street Journal, the company has faced resistance from television companies and cable-network providers over its plan to license just their best content rather than all of it.
Besides, costs of 3G connectivity and the price of data could be another problem. It is unknown whether consumers are willing to pay for an additional tablet data plan besides their iPhone bills.
So far, two data plans from AT&T in the U.S. were also announced with 14.99 dollars per month for 250 megabytes of data and 29.99 dollars for unlimited data usage.
Source:Xinhua
2) Analysts say iPad is bit too pricey
Apple Inc's iPad tablet may take a year to turn into a "breakout" product with mass-market appeal as consumers wait for the price to drop below $499 and for more publishers to get on board, Piper Jaffray & Co said.
"It needs to be $300 to $400," said Gene Munster, an analyst with Piper Jaffray in Minneapolis. "It's an amazing device, but investors should have measured enthusiasm about how long it takes for something like this to gain traction."
Chief Executive Officer Steve Jobs introduced the iPad, pitching it as a "magical" new category of mobile devices between Apple's MacBook laptop and the iPhone. The iPad, with a 25-cm color touch screen, lets users play music, videos and games, check e-mail and surf the Web.
Apple will start selling three models in the US in March, priced between $499 and $699, that let users connect to the Internet over Wi-Fi networks. Three models that work with AT&T Inc's 3G wireless-phone network will go on sale in April for $629 to $829, with an additional $14.99 or $29.99 a month for a service plan.
Jobs also said the gadget will include software called iBooks for displaying electronic books, setting up a challenge to dedicated e-book readers from Sony Corp and Amazon.com Inc, which offers its Kindle starting at $259.
Munster said he expects Apple will sell 3 million to 4 million iPads in the first year. It may sell as many 8 million in 2011, which would add $4.6 billion to revenue, almost equivalent to Apple's current iPod business. Some of those gains will likely come at the expense of Apple's current 3.5-inch iPod Touch player.
Munster has recommended buying Apple stock since 2004, according to Bloomberg data. The shares have soared more than 12-fold in that period.
Goldman Sachs Group Inc's David Bailey predicts sales of as many as 6 million iPads this year, adding $3.9 billion in revenue and 99 cents a share in profit.
"Apple's announcement highlights what we think is the company's multi-year lead in mobile devices," Bailey said. "That said, we expect the near-term impact on the stock to be muted as investor sentiment had been bullish ahead of the event."
Apple already has signed agreements with five publishers, including Pearson Plc's Penguin and News Corp's HarperCollins, and intends to form alliances with others that will be able to sell their titles through the company's new iBookstore, Jobs said. Pricing for iBook titles hasn't yet been disclosed.
Source: China Daily
3) Reverse Psychology: Chinese Knock-Off Firm to Sue Apple Over iPad
You'll need to put your best thinking cap on before tackling this one: That Chinese firm responsible for the iPhone-clone-esque tablet PC, that predated the iPad by several months, is crazy angry at Apple for copying them. And may sue.
Read that again. Get it? Okay, I'll try again: A company unashamedly rips-off Apple's iPhone design and look-and-feel and bolts it into a Windows tablet PC that's technically not too dissimilar from other similar tablet PCs. Apple then releases the iPad--a device that's been in the making, on and off, for over 20 years, and which builds on Apple's already wildly successful device designs (mostly the iPhone). The Chinese firm accuses Apple of copying it's design, and threatens to sue if Apple tries to sell iPads in China.
The news has surfaced over at Shanghaiist again, where they even have a quote from apparently incensed president of the Shenzen Great Long Brother Industrial company, Wu Xiaolong: "I was very angry and flabbergasted when I saw the news of the iPad presentation two days ago... It is certainly our design. They've stolen because we present our P88 to everyone six months ago at the IFA [in Berlin]."
Erm, Wu? It's not your design, mate. Your P88 looks just like a bloody big iPhone, running XP, and with an absolutely dreadful battery life. You may well have patented it in China (or at least you've begun that lengthy process) but I suspect Apple's patents are teeny bit more reliable on this front. And thank goodness you're admitting you "must follow the law," but I have to say that if you do go ahead and "sue them this Spring" if Apple sells iPads in China, then you're going to look like a right twit. If you'd come up with a totally original, compelling and consumer-exciting tablet all of your own design, then you'd probably not have anything to be so angry about. And we wouldn't have this intractable Gordian Knot of a who-designed-what-first patent problem to think about on a lazy Friday afternoon.
