The Downside Of The Muni WiFi Hype Cycle Rolls On
Municipal WiFi got hyped up to such ridiculous levels that it was bound to be seen as a failure, often by the same media that whipped up expectations in the first place. Now, in Toronto, the paper notes that the citywide WiFi network there has seen usage fall since its free trial period ended. What? You mean more people will use a WiFi network when it’s free than when they have to pay? Shocking, we know. The company behind the network says that it’s converting more free users to paid subscribers than it had planned, but that doesn’t seem to placate the reporter of the original story, who manages to work in another yarn of hype by saying the WiFi network “may soon be irrelevant” because of the emergence of WiMAX. In reality, the approach of Toronto Hydro, the company that built and runs the network, seems pretty good. Its interest began with using WiFi for a pragmatic purpose — remote meter reading — and it then decided to extend its network to offer public internet access. The company’s public network now covers only six square kilometers, and it’s waiting to attract a sufficient number of users before expanding citywide, rather than jumping in whole-hog and experiencing the problems other providers have faced when launching much bigger networks. This relentless build-’em-up-then-knock-’em-down hype cycle doesn’t help anybody, but when it comes to muni WiFi, it doesn’t look like it’s going to stop anytime soon.
Nobody Loves Palm (And Really, Why Should They?)
There have been long-running rumors that Palm was up for sale, with the things getting so ridiculous that at one point it looked like they were made up to boost the share price. The company has never been sold, though private equity firm Elevation Partners bought a 25% stake last month and brought in some new management. Some people wondered at the time if Palm went down this road because it couldn’t find anybody interested in buying the whole company; an SEC filing about the Elevation deal suggests that this was indeed the case. The deal in and of itself does nothing to solve Palm’s long-standing problems (and neither will its recently announced and wholly underwhelming Foleo product), and in the meantime the bad news rolls on: Palm also said this week that devices using a Linux-based follow-up to Palm OS 5 — like it’s been talking about since 2004 — have been delayed until next year.
Don’t Buy In To Those iPhone Per-Unit Profits Just Yet
Soon after the release of every new Apple product (and other companies’ new gadgets as well), some analysts tear one open and try to figure out how much its components cost to get an idea of the margins on each unit that’s sold. A recent teardown of the iPhone suggested a per-unit cost of $200 for the 4 GB version, and $220 for the 8 GB one, suggesting that Apple’s making a huge profit on each iPhone it sells. But, as Stephen Wildstrom at BusinessWeek points out, taking these teardown estimates too seriously can be foolish. As he notes, the cost of many of the components — including the device’s centerpiece, that huge, glorious touchscreen — is little more than a guess at this point. But perhaps more importantly, focusing on the components’ cost ignores the not inconsiderable costs Apple sunk into developing and marketing the iPhone. Certainly the iPhone has the potential to reap huge profits for Apple, but it’s a little premature to be tallying up the figures just yet. Furthermore, as the initial supply looks to be drying up, it’s worth wondering just how long Apple can keep the sales momentum going.
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