Weekly Roundup, Friday 13 March 2015

A poster from the golden era of flight.  See final item, below.
A poster from the golden era of flight. See final item, below.

Good morning

Black Friday again today, I hope you don’t have to travel much.  This is the second of what will be three Black Fridays this year.

Apple’s big launch event on Monday for its new watch had no surprises – at least, as regards the watch product.  Apple did surprise with other products also announced unexpectedly, and the watch part of the presentation, at the tail end and taking less than half the total time, seemed almost like an after-thought.

I quickly released an analysis of the new watch product on Monday, and I’ve been adding to it subsequently as more information has come to light about what the watch is and is not, and after thinking about and discussing the matter further with other industry commentators.  The article is appended at the end of this newsletter.  I also wrote an introduction to smart watches in general last week.

Prior to the launch, I was increasingly predisposed to buy an Apple watch, but try as I might, with the reality now revealed, I can’t convince myself it would make sense.  Instead, I find myself drawn to either the Moto 360 or the LG G Watch R, both of which are Android based watches, and, at least to my mind, more visually appealing and perhaps more generally useful, as well as being tremendously better value.

The Apple watch starts at $349, and quickly goes up to $1000 in its standard configurations – much more than the unsubsidized cost of an iPhone.and then in its luxury form, ranges in price from $10,000 to $17,000.  In typical Apple fashion, they designed the watch with special band connectors so only Apple watch bands can be connected to the watch, and the cost of a fairly ordinary normal stainless steel watch band – something you can buy generically for less than $10 – goes up to $450.  This is more than the cost of the watch itself, including a cheaper band.  Are there other watches where the band cost exceeds that of the watch itself, one wonders?

Amazingly, the only difference between the cheapest and the most expensive Apple watch is its exterior casing and band.  You don’t get any extra memory or functions or battery or anything.  You do get an ounce or so of gold ($1150 an ounce at present) on the $10k – $17k watches, and of course the nonsensically expensive bands.

But, Apple very sensibly is positioning this new product as a ‘fashion accessory’ more than as a valuable productivity tool.  In the high fashion arena, value isn’t a priority consideration.  Plus, there are countless millions of people who will buy a (lower priced!) Apple watch solely because it is a new Apple product.

So, will the watch succeed or fail?  My sense is that there will be a large number sold to start with, but then reduced levels of ongoing sales, and that Apple’s watch will cause people to look more carefully at other smart watch products, boosting sales of all such products.

As soon as the Android based watches will become compatible with Apple iPhones (expected to happen later this year, possibly to be announced as soon as May), I’ll consider an Android smart watch.

Or perhaps I’ll buy one of these watches, today.

What else this week?  Please keep reading for :

  • 2014 Airline Profit Results
  • Another Airline to Fly between the US and Europe
  • More on the ‘Nut Rage’ Case
  • A Good Year to Go to Europe
  • Should Customs Be Able to Access Your Data?
  • The Best Wireless Company for Data Speeds
  • Veitch Versus Virgin
  • And Lastly This Week….

2014 Airline Profit Results

The numbers are now in, and 2014 saw a total $7.3 billion in profit earned by the ten publicly traded US airlines.  This is down from 2013’s $11.6 billion, which was the industry’s best year ever, but is still the fifth year in a row where the airlines as a group ended up with a collective profit.

The ten airlines reported $158.6 billion in revenue, up 5% from 2013, and showing their net profit to be 4.6% of gross revenue.  This is not an unduly excessive level of net profit and we shouldn’t begrudge the airlines such a profit level, although we can fairly criticize the path they took to generate that profit.

Flown passenger miles increased by 2.1%.

After years of stagnation and in many cases reductions in capacity, the airlines are starting to add more flights, and they say there will be a 5.6% increase in available seat miles for sale in the second quarter this year compared to the second quarter last year.  But don’t go expecting to have an empty middle seat next to you on your next flight – we expect (and so too do the airlines) that much of this small amount of extra capacity will be soaked up by more people traveling.  More details here.

In case you wondered, the ten publicly listed US airlines are Alaska Airlines, Allegiant Air, American Airlines, Delta Air Lines, Hawaiian Airlines, JetBlue Airways, Southwest Airlines, Spirit Airlines, United Airlines and Virgin America.

Another Airline to Fly between the US and Europe

Tiny little Iceland based airline, Wow Air, will start flights on 27 March from Boston and Washington to its Keflavik (Reykjavik) hub, where passengers can then connect on to other European destinations.  Iceland is almost directly on the path of flights from many US cities to many European cities, so changing planes there is as convenient as anywhere, and more convenient than most other hubs, and Wow offers low fares.

Wow plans to add service to more US cities next year, and we wish them well.  While currently their two A321s make an almost impossibly-too-small-to-measure impact on the total capacity across the Atlantic, all competition is good competition and can only be to our benefit.

More on the ‘Nut Rage’ Case

The ‘storm in a nutbowl’ over the incident when a Korean Airlines Senior VP remonstrated with flight attendants prior to a flight’s departure from JFK has yet to subside, even now the executive has been sentenced to a gobsmackingly severe one year in prison for her actions (and for the unstated ‘crime’ of being a privileged woman in a male-dominated pretend-egalitarian society).

Now the hapless flight attendant who failed to serve the nuts correctly in the first place is doubling down.  Not only has she seen her boss sent to prison, she is now suing for compensatory and punitive damages in a New York court.  It will be interesting to see how the case is viewed in the US rather than Korean jurisdiction, and obviously the flight attendant and her attorneys feel that here is the better place to seek a financial payout.

Details here.

A Good Year to Go to Europe

The Euro has been falling, falling, falling, against the dollar.  It has lost 12% of its value (compared to the dollar) this year alone, and is 23% down on its value this time last year.

Currently the wholesale Euro rate is about $1.06, which is the lowest it has been since January 2003.  Will it continue to drop?  There is now the start of a bit of a push back by US manufacturers and exporters, complaining that the strong dollar is starting to eat into their profit margins and ability to sell competitively in Europe, but on the other hand, some people are projecting parity between the Euro and dollar, and the US can’t readily adjust its own currency value when the world is shunning the Euro.  More details here.

So, yes, it might be a good year to visit Europe.  We can probably still squeeze another couple onto our lovely Poseidon Arctic Expedition, and if you added some time elsewhere in Europe before or after the cruise, that could be a wonderful treat for 2015.

Should Customs Be Able to Access Your Data?

These days, many of us carry our entire ‘electronic lives’ on our computer hard drives, or even in our smart phones and tablets.  All our contacts, all our email, copies of written correspondence, password lists, and so on.

You can understand why, if a law officer was investigating you for a crime in which there was the possibility of information that might incriminate you being on your phone or computer, they’d want to be able to view the contents of the device.  They’d go get a search warrant, and then take your computer/phone, or download/clone it, or something.  That’s the way the Fourth Amendment envisages such things working.

But what if you’re simply passing through Customs on your way into a country.  We understand that Customs officers should be allowed to search your bags for contraband.  But if your phone is a permitted item to bring with you, why should they be allowed to search the digital contents and files on the phone?

Well, there is a sort of an answer – what if your phone was full of illegal and offensive images of young people?  Should the Customs people be allowed to search for those?  For sure, you’d be in hot water if you had printed out hard copies of such images, and there’s plenty of case law that has decided that electronic images are just as illegal as printed ones.

Maybe that means the Customs officer can check through your image files, but how about reading through your emails?  Making a copy of your Contacts list?

These things have nothing to do with controlling the flow of restricted goods across borders and are all to do with the modern day propensity of law enforcement to ‘hoover up’ everything they can about everyone they can do so to.

The situation in the US tends to favor the Customs officer.  They can seize our electronic equipment and require us to provide them with our passwords to access the data on them.  This article talks some more about what to expect when entering some other countries.

The last few weeks has seen controversy over this issue erupt in Canada and New Zealand.  Sadly, this seems to be an unstoppable trend.

The biggest concern I have is not so much showing and sharing everything on my laptop and phone, but rather what happens if Customs decide to impound the devices for a day or week or month or who-knows-how-long?  Sure, I could keep a backup hard drive with me, but of course they’d seize that too.

Yes, I could also back everything up into the cloud, but that’s not always possible when traveling through places with appallingly slow and very expensive internet access.

The Best Wireless Company for Data Speeds

Talking about internet speeds, a new report by wireless phone service consultancy OpenSignal has some very interesting data about actual realworld wireless/phone data speeds experienced by the people who have their monitoring service loaded onto their smartphone (it is free and you can add it to your phone too).  With over 5 billion signal readings in their database, from locations all around the world, they have a realistic and comprehensive perspective on the type of data service and speed you will receive.

Their report looked at the latest LTE type data service in 29 countries.  The country with the most widespread LTE coverage was South Korea (95% coverage), the country with the fastest LTE service was Spain (18 Mbps).  The least amount of coverage was in Argentina (34%) and the slowest LTE speeds were in Saudi Arabia (3 Mbps).

That’s a huge range of values, and there were also major variations within each country.

As for the US, we scored reasonably high on coverage (77%) but came a dismal 25th out of the 29 countries for speed (7 Mbps).  The carrier with the best coverage in the US was Verizon (86%), followed by AT&T (78%), T-Mobile (76%) and Sprint at 59%.  The carrier with the fastest speed was T-Mobile (10 Mbps) followed by Verizon and AT&T (both 7 Mbps) and then Sprint with a dismal 4 Mbps.

Canada saw Rogers with the best network and Bell with the fastest speeds.  The UK scored poorly in terms of network reach, with EE/T-Mobile a clear winner (and the 3 network with the lowest coverage of any network in any country), and the same spread of results for speeds, with EE/T-Mobile decisively winning and 3 equally decisively losing the speed race.

Here’s the full report.

Veitch Versus Virgin

Colin Veitch is the former CEO of Norwegian Cruise Line.  In a lawsuit filed this week, he claims that he entered into a partnership with Sir Richard Branson to create the new cruise line, Virgin Cruises, but after a year of work by Veitch, including his lining up capital for the venture and arranging for the construction of the first ship for the new cruise line, Branson then acted unilaterally to change their agreement and reduce his role to merely an employee.

Veitch is now suing for $300 million, and asking the court to stop Virgin proceeding with the cruise line concept that Veitch claims is his.

Details here.

And Lastly This Week….

If you like old classic airline posters, such as the one at the opening of this week’s newsletter, you can see a collection of others showcased here, as a sample from a new book soon to be published, ‘Airline Visual Identity, 1945-1975’.  Thanks to ARTA for the link.

I wrote last week of people who drove their rental car into the sea while blindly following the directions on their GPS and not realizing the route they were following was for ferries.

This week, more trusting tourists followed their GPS directions onto a non-existent former road and straight down the side of a hill.

So perhaps we should be delighted to learn of another company believed to be developing a self-driving car, and possibly releasing it later this year.  Which of the auto makers is it this time?  None of them – it is another internet search company, emulating Google’s involvement – Baidu.  If you’ve not heard of Baidu, that’s because they’re Chinese – yet another example of the activity and, yes, innovation too, that is occurring largely under our radar in China.  Details here.

Until next week, please enjoy safe travels






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