Apple wants to charge existing iPod touch owners $20 for 5 new applications.

Don't get me wrong, I don't hate Apple like many people do.
In fact, I own 4 Macs 4 iPods and bought an iPod touch on Jan 12, 2008 3 days too early to get an iPod touch with the 5 additional new apps pre-loaded. see here

I believe it's an marketing BUG in Apple's operation -- it seems their pricing department misunderstood one single business logic -- which is more important $20 or a loyal customer that have spent dozens of thousands dollars on Apple product over the years -- put it straight, I do have $20 -- I donated more than that to software writers and charities.  

I have no problem spend my money on Apple products either, I've spend dozens of thousands of dollars on Apple products. 

However, when the apps are free to iPhone and NEW iPod touch users, 

PUNISHING CUSTOMERS ADOPT APPLE PRODUCT EARLY IS STUPIDLY GREEDY.

It is even worse than the $200 price drop of the iPhone which resulted a $100 credit for early iPhone buyers -- this $20 charge for apps specifically identified a special group -- namely the iPod touch buyers bought iPod touch before Jan 15th 2008 -- read "hey stupid buyers, since you can $400 on an unfinished product, apparently you are rich, and should pay $20 more now to get your product complete, Oh, for those smart enough not to jump in and give their hard earned money to us early (so that we can sustain the product line) we'll though in the apps as free so that we can attract people that don't buy unfinished products even if it's from Apple -- read those people don't love Apple as much".

Keep doing this Apple, you will get lots of $20 bills and will loss lots of loyal customers that have came back to Apple and purchased again and again.

$20 is a great income for Apple, it is also an easy way to send away customers that could have spend much more on Apple products. 

As a hi-tech company you need to keep the early adopters happy.  Those are the ones buy your products when they are still in its infancy, so that you can sustain your new products.  Bad business practice like charge $20 simply because we bought a product early, is stupid -- even if we give you this $20 this time, do you think we will buy your other more expensive products again?

Wake UP, Apple, you are good, but not that good!

Your pricing department needs some serious business 101 training. 

I'm putting all my Apple purchasing (planed spending is over $2000) on hold until Apple provide free update to existing iPod touch owners so that we can upgrade our iPod touch to the level of the new units sold after Jan 15, 2008

BTW, you can sign a petition for this matter if you already owns an iPod touch. there are lots of petitions about this issue, this one has the most signed owners (on Jan 21, more than 10K). 

Economy "De-Couple"? Is rest of the world really ignoring US resession and enjoys their growth?

One rhetoric topic these days is “because the emerging economy, the rest of the world no longer coupled with US economy”, specifically, the rest of the world will not have a recession if US goes in to recession.

If you look at world currency market, it is even more convincing – the USD has been depressed more than 1/3 in the past 4 years.

Is it really true? Well, on one hand because the emerging markets are becoming bigger economies and hence have more resilience to external turbulence (read US recession), so the influence of US economy to other economies are less significant than it use to be.

However, somewhere in the world there is a saying – the thinnest camel is bigger than a horse – which is very true in describing the current situation of US.

The “reduced” influence of US economy is still too significant to be “ignored”.

The truth is in the past 3 to 4 years, it is not a US recession, rather the fear of a US recession drove US dollar down. And the fact that it’s the “fear of recession” instead of a real recession is the cause easily explains the “de-couple” theory.

Because US is not in a recession, US consumers are still spending, so the rest of the world can still sell to US, and that’s why their economy is still growing -- why its not “de-coupling”? -- Because US economy was also growing, despite wide spread fear of a recession. That has been the case for the past 3 years.

Or you can say it was the “fear” de-coupled, not the economy. In China and India where economy expands in double digits, it’s far harder for them to think about recession – in comparison to in the US where economy was growing 2 or 3 percent a year, it is much closer to the magical number “0” – where positive and negative cross.

And recently, when US is really in the recession (at least US business and consumers are spending less), you can see all over the world, the economy starting to choke. Some people out there was surprised and said world economy “re-coupled” – not quite right, it is just this time, the wolf really attacked, unlike previous occasion “wolf is coming” was shouted just for the sake of fear.

I feel some people are driven by fear and hatred more than hope and love. The new order of the world is not that US collapse, it is that other nation rise – it’s not about US getting unimportant, it is about other nation also getting important – it’s not about US is in trouble, it is about other nations are out of trouble.

For the “new order” of economy, I would not expect in the short term that US will be irrelevant – a US recession, will still cause world economy slow down. The change is, now if China goes into recession, the world economy will also slow down, big time!

It’s not that world de-coupled with US, it is other economies are coupled with the world better now.

Oil exporting country dump USD peg .vs. China allow its currency to rise.

Stop using USD as Oil price currency will be long term bull for USD, although that is unlikely to happen any time soon.

I seldom comment on issues out of IT industry -- you can tell from my other blog posts. Well, let's do something new in the New Year then. (Not really, I majored in ERP which is a hybrid combining IS with business.)

OK, here is what the topic about -- in 2007 about US Dollar. Lots of buzz that crude oil exporters will decouple from the USD and every time this rumor surface, the USD had a big hit – it depreciate in response.
On the other side of the coin, every single US politicians is pushing China to let its' RMB to appreciate significantly. . .


"USD is oil dollar!" if oil exporters abandon selling oil in USD, USD will worth nothing -- at least Iranian president said so.

Wait a minute, that's too straightforward to be true though (if that's really that simple, I guess we don't need PhD in Economy anymore - one of the most daunting topic is now simply understood by everyone). Usually I doubt about things that too obvious -- something too good seldom is true.

Let's have a look at crude oil price -- fundamental only for now, (the speculators and opportunists are the ones who want us believe in "simple rules" so they can predict our reaction and take advantage of us.)

Oil is priced in USD, at beginning of Jan 2002 it was $16.65; at the end of Dec 2007 it was $95.98 -- a 5.8 time rise.

During the same period, EUR/USD rose from 0.86 to 1.4586. So, if you measure Oil in Euro, it only appreciated 3.4 times.

So in the face of rising oil price, America took 5.8 time hit, while because of the freedom Euro zone enjoyed, they only took a hit of 3.4 times. No wonder why Euro economy is much less hit by the recent recession (though some may argue a recession is yet to come in US).

All exporters are greedy (hey nothing wrong about that, if I have a crude oil well in my backyard, do you think I will offer it as charity? It's perfectly humane to be greedy when you have something other people want!) They (with the help of opportunists) see a chance to get more money. Because Oil is valued in USD, so US has to take the biggest hit (I'm not talking about why US gets the biggest hit which everyone has their own speech to make, just the math no politics please). While for all other economy who can fluctuate their currency, can ward off this hit somewhat by allowing USD to depreciate - so that the increase in Oil price is offset a little.

Why Euro zone economy is still robust when its currency nearly doubled in the past 5 years? One thing is in current global economy energy cost is one of the biggest part of all cost, and why Euro appreciated, Oil is measured in USD, so the real cost of energy to Euro zone companies are not as huge as it is for the US companies, and because the appreciated Euro, workers in Euro zone relatively had enjoyed a somewhat more "affordable" life compare to their US counterparts - so they can spend "more". (or in other words, they were hit much less than their US counterparts).

So is it really true that if Oil is no longer valued in USD, USD will collapse? Well in short term it might. Because if that's the case, Oil exporting countries may need to sell some USD, and European companies will no longer need USD to by Oil.
However, that's not the end of the world, why? Cause if you check who has the biggest reserve of USD outside of US? You guessed right, China.

Some people say that USD can maintain its dominancy only because Oil is valued in USD. While it may sound like music to anti-American ears (which means – a lot of people), it stands on shaky ground.

Oil is not exported by US, they don't have control over Oil -- if they did, there would be no Oil crisis in the 70's and it will not reach 100USD in 2008. Yes, they want to control it, (who doesn't?) but they simply can't.

OPEC controls it and like it or not, they decided to price Oil in USD. Why? Because US buys the most of the Oil. And since China's RMB is pegged to USD, the combined volume of Oil sold in USD is much higher than any other currency. So selling Oil in USD, makes Oil exporter's financial book much easier to keep.

So if someone really thinks that it’s US warship in the gulf kept Oil exporters to sell Oil in USD, they are politics obsessed. I found most of this kind of people has a background of living in an arbitrariness or dictatorship – where everything is controlled by the government.
In a free world, there are more than politics in this world. It’s not that the “governments in a free world” are any ethic, it’s just they don’t have the arbitrary power dictatorship enjoyed to implement their will.
However, people with experience living in a dictatorship tend to over estimate the ability of governments (in other words tend to underestimate influence of other forces in a free world).

Now why it’s long term bull for USD if Oil is sold in another currency? We mentioned that because Oil is priced in USD, US actually saw a 5.8 time price rise while Euro zone only see a 3.4 time rise. So Euro is having a much lighter hit than US has. That’s why. If Oil is priced in something else, let’s say something hyper theoretical – OPEC-D. Euro and USD then will each price their currency against this Oil Dollar. And Euro won’t need to depress USD to reduce the Oil price impact.

Of course in short term, lots of countries will sell some USD to buy OPEC-D, but that’ will not be the end of the world -- As long as China do not sell its' USD, USD will be ok. May loss another 10% or 20% but will not collapse.

And at the end of the day, Oil exporters and China have the same reason to peg their currency to USD – they export to US and USD is what their biggest customer (read United States) will give them. So it’s interesting to see that many US politicians WANT Oil exporters to use USD to price Oil (another evidence that US is managed by a bunch of stupid politicians) and on the same time, pushes China to un-peg their currency.
Like it or not, the consequence of China un-peg its currency is far more destructive than Oil priced in Euro.