Archive for February, 2012

Countdown to Big Sur!

February 11th, 2012, 1:53am by Jake

Is it really only 3 weeks away… what the heck! So I know the plan is pretty sketch now, but seems like this is the best place to plan, more or less. So, what are the must-see sights in the Monterey-Big Sur area? A quick glance found a lodge at the park in Big Sur. And a whole website devoted to killer hikes. Mostly I’m looking forward to hanging out with good friends. Maybe a few brews, a bit of hiking and probably way too many photos. Beyond that, it’s all good as someone besides me has a plan.

Parable of the Apple Seed

February 8th, 2012, 3:38pm by Kelvin

I’ve been seeing a lot of stories like this one bemoaning the plight of the wireless carriers and all the money they are losing due to the iPhone. These stories are missing out on the basic economics of the subsidy-subscriber model.

Once upon a time, there was a young man who was heading into town to buy a cow. On the way, he was approached by a old woman, who sold him some magic apple seeds for $450. The man planted the seeds, and once a month, he picked the apples from the tree and sold them in town for $80. After 6 months, he was happy because he had made back all the money he’d spent on the seeds. In the 7th month, he was happy because he was getting money for free! He was so happy that he wished he had more seeds to plant!

Pretty obviously, if $1980 over 2 years is worth an upfront $450 cost to acquire a customer, then the more iPhone customers you get, the better. This is just an accounting quirk that carriers are reporting such huge losses in the launch quarter. Wonder why the subsidy isn’t amortized over the life of the contract? That would reflect the economics more accurately.

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