1.  Get inside the factory

I’ve met too many people in this game who make one trip to China, pick a manufacturing partner, and never visit again. All of the companies they represent eventually end up with enormous problems when it comes time to launch. Get out on the manufacturing floor and talk to the line managers and operators. You’ll be amazed at what you learn about the manufacturing process and about your manufacturing partner. Seemingly small pieces of information from the factory floor can later help you refine product design for better manufacturability or even clue you in to larger issues with factory management.

In 2010, we had a supplier in China that had agreed to increase capacity by 50 percent over the next nine months. It had been a few months since anyone from my team had visited the factory, so I stopped by to see how the expansion was coming along. To my surprise, only about half of the new equipment needed was actually on order. After speaking with the floor manager, we learned that he was not given the resources to meet our expansion plans. Needless to say, we had to have a fairly direct conversation with senior management to get the expansion back on track.

2. Build prototypes close to home

3D printing houses and rapid prototyping shops are popping up all over the U.S.. You often get what you pay for in this realm, so it isn’t where you want to pinch pennies. Use the proto phase to refine, refine and refine some more. That way, when it comes time to spend money on pricey mass-production equipment, you only have to do it once. Mass production molds for plastic parts can cost upwards of $50,000, so finding out two parts just don’t fit together quite right after you’ve started mass production is an excellent way to jeopardize and even kill your company.

The added benefit of prototyping close to home is that your engineering team can iterate faster.  3D prototypes can be on your doorstep in a few days, compared to the four to six weeks needed for other prototyping methods. Expedited turnaround times accelerate overall development cycles, and in turn, reduce development costs. Rapid development also gets your product to market faster than the competition!

3. For mass production, China isn’t the only game in town

Examine the total cost of your supply chain. If you’re building product in China, you need to do the math on how it is getting to the U.S., where it will be packaged, cost of import duties, what happens if a product is defective, and a thousand other questions. Each of those factors has a cost implication, and when added together, startups sometimes discover that Chinese manufacturers are not price leaders after all.

Look for manufacturing opportunities closer to your customer. For instance, there is tremendous manufacturing talent and capacity in places like Guadalajara, Mexico, where you can benefit from NAFTA tariffs and reduced logistics costs, not to mention low cost of labor.

4.  The job doesn’t end after launch

Once you launch (congrats!), resist the temptation to sit back and watch it all happen. To the contrary, monitor your supply base like a hawk. There is a reason Apple has thousands of supply chain professionals on the ground in countries around the world. When things go wrong, they can go very wrong very fast. Actively monitoring supply chain data and maintaining a transparent relationship with managers at each node in the supply chain will prevent most issues.

When it comes to tracking data, inexperienced startups are often overwhelmed with the amount of data and tracking options a modern-day supply chain produces on a second-by-second basis. It doesn’t take an Apple-size team to avoid most supply chain issues. Figure out what your key data points are and track those on a daily or weekly basis. Take the time up front to build reporting tools that make it easy for you or your team to see at a glance if there is a problem building.

For instance, my team was able to monitor over a billion dollars of annual procurement across 22 factories using just six spreadsheets. Careful planning and foresight will go a long way towards ensuring that data can be used to proactively identify and resolve issues.

5.  Tim Cook is right – inventory is “fundamentally evil”

Most startups I’ve encountered are unaware of how excess inventory can quickly crush a small business. The simple answer to inventory management is to never carry more inventory than you absolutely, positively need (easier said than done). Before production starts, set realistic goals for inventory turns and days of inventory. If inventory exceeds pre-defined levels, shut down your supply chain. Shut it down entirely.

You simply can’t afford to have more product coming off the line if you’re not going to be able to sell it. You may find yourself in an uncomfortable position with your supply chain, but that discomfort is minor compared to the pain of writing off a massive inventory. If you don’t agree with this approach, please refer to RIM’s colossal $485 million inventory write-off at the end of 2011.

Oh, and one more thing:  Fire any engineer that ever says “it’s not possible.” That no-can-do mentality has no place at an innovative startup. Attitudes are infectious and that one is positively poisonous within an engineering organization that strives to innovate. People who are motivated by the challenge to push a manufacturing process to a smaller tolerance or a larger scale than ever achieved before are the lifeblood of innovative hardware organizations. Everyone else is just dead weight and a liability to your mission.

Bill Banta is currently a student at the Stanford Graduate School of Business and CEO of Stealth HD, which builds 360-degree video technology for the military and media broadcasters. Previously he worked at Square and also at Apple.

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Put simply, T-Mobile is upending the established business and device distribution models of the U.S. wireless industry, separating the handset from the service. It’s a model that’s thrived in Europe and other countries, but it’s one that’s failed to gain traction in the U.S. except in the prepaid market, namely because U.S. consumers like getting even the most sophisticated high-end phones on the cheap.

Traditionally a U.S. operator sells a device at a steep discount in an effort to lure customers. It doesn’t just write off that subsidy. It makes that money back and then some by charging higher rates for voice and data over a long contract term. It’s a model that’s worked well for big operators like AT&T and Verizon Wireless, turning them into two of the most profitable and highest revenue-generating operators in the world despite the fact that many multinational carriers have far more subscribers.

T-Mobile proposes to reverse the equation with its Value Plans. Customers pay the full cost of their device, either up front or in installments, or bring their own compatible handsets. In exchange, T-Mobile will offer them cheaper rates, in many cases $20 a month cheaper than it would charge for a subsidized phone plan. Do the math: that’s $480 in savings over two years, which in many cases is much more than the up-front discounts operators are offering on subsidized phones (For instance, a Samsung Galaxy S III subsidy on T-Mobile is $350 including rebate). Given that T-Mobile’s subsidized rates are already much cheaper than its major competitors, the savings from T-Mobile’s Value Plans are compounded.

The repercussions of T-Mobile’s strategy will be felt far beyond the point-of-sale and monthly bill, though. If successful, T-Mobile’s elimination of subsidies could have a huge impact throughout the U.S. mobile ecosystem, changing how we value our devices and our relationships with our carriers and handset manufacturers.

• The rise of phone financing: T-Mobile knows that it will take a while for consumers to overcome the sticker shock of a paying full freight for phones. T-Mo CEO John Legere said T-Mobile would implement financing programs that would mitigate those up-front costs. In the example he gave, a customer could get an “iconic smartphone” for $99 down with monthly installments of $15 to $20 for 20 months.  This will look pretty similar to a subsidy plan to most customers – the device payments will just be separate from the service fees on the monthly bill. But operators won’t necessarily be the only ones financing. Handset makers, electronics retailers could offer their own programs.
• Greater portability of handsets between carriers: There will always be restrictions on where you can bring your phone due to huge variation in network technologies used by U.S. carriers. But moving to an unsubsidized model means for the first time consumers can buy their devices and then select their carriers. Keep in mind T-Mobile’s Value Plans are still contract plans (for now), but it offers prepaid plans as wells. By buying their phones up front consumers would have more flexibility in moving GSM/HSPA phones between T-Mobile, AT&T and the growing number of mobile virtual network operators (MVNOs) that use their networks.
• Less carrier control: If your carrier isn’t selling you your device then they should have less say in what services or apps you can use. That could be a simple as avoiding the pre-installed apps carriers load onto our smartphones, but it could also mean that you’re no longer dependent on your carrier to ship you OS upgrades. It will also be more difficult for them to restrict over-the-top services over their networks (read FaceTime) or limit you to their mobile payment services.
• A larger selection of devices: Carriers have always acted as device gatekeepers in the U.S. Until recently, Nokia couldn’t make a dent in the U.S. because it couldn’t strike the right operator deals. Unsubsidized phones mean that vendors can start marketing and selling directly consumers with no carrier middleman.
• Huawei and ZTE could become household names: These two Chinese juggernauts have made some in-roads to the U.S., but they’ve only gotten as far as the carriers have let them. Mostly their U.S. business consists of low-end feature phones or inexpensive carrier-branded smartphones like T-Mobile’s MyTouch. But a vibrant direct-to-consumer market could benefit Huawei and ZTE immensely. Both can make high-end smartphones at low prices, which would be very appealing to consumers paying the full cost of their devices.
• The development of a vibrant phone resale market: Smartphones are expensive and sophisticated devices, but their low subsidized cost in the U.S. has caused us to treat them like throw-away electronics. But if customers are faced with full sticker price of their phones, they would be more inclined to reuse them and sell them to recover their costs, and customers on a budget would be more inclined to buy used and refurbished phones.

Of course, T-Mobile is just one carrier. The other operators have also expressed discontent with the subsidy model, but they aren’t going to give up on it overnight. In fact, they will probably attempt exploit T-Mobile’s big strategy shift for all its worth. Verizon, AT&T and Sprint have a huge advantage: they will “sell” the same iPhone for $200 that T-Mobile is asking customers to buy for $650 – that’s a powerful argument.

T-Mobile has a tough job ahead of it convincing customers they will save money and benefit from its model in the long run. If T-Mo succeeds, other carriers will follow its lead, changing the U.S. mobile industry for the better. If it doesn’t, this will be just another noble but failed experiment for the history books.

Feature photo courtesy of Shutterstock user Robert Kyllo; T-Mobile image courtesy of Flickr user swruler9284

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Even for a company now run by one of the most respected supply chain and operations minds in the business, this is a big milestone for Apple. It is by far the fastest it has ever rolled out a new product. Things weren’t looking good for the 100-country goal back in October and November, as the precision with which the phones needed to be assembled was proving somewhat vexing for Apple’s manufacturer in China. But it looks like those problems have been mostly resolved.

The countries getting the iPhone 5 this month include:

South Korea on Friday, December 7 and on Friday, December 14 in Albania, Antigua and Barbuda, Armenia, Bahamas, Bahrain, Bolivia, Brazil, Chile, China, Costa Rica, Cyprus, Ecuador, Grenada, Indonesia, Israel, Jamaica, Jordan, Kuwait, Macedonia, Malaysia, Moldova, Montenegro, Panama, Paraguay, Philippines, Qatar, Russia, Saudi Arabia, South Africa, Taiwan, Turkey, United Arab Emirates and Venezuela. iPhone 5 will also be available on Friday, December 21 in Barbados, Botswana, Cameroon, Central African Republic, Egypt, Guinea, Ivory Coast, Kenya, Madagascar, Mali, Mauritius, Morocco, Niger, Senegal, St. Kitts, St. Lucia, St.Vincent & the Grenadines, Tunisia, Uganda and Vietnam.

Inventory of the in-demand device has been tight from the moment it went on sale at the end of September. The natural question following this news is, how will this impact critical holiday gift ordering of a new iPhone? Well, right now, it appears Apple’s supply is just about the highest it’s been since initial release: the company’s website in the U.S. is showing ship times of all new iPhone models at 1 week. In New Zealand, they’re even lower: two to four days, as 9to5Mac noted.

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You’ll notice there’s a $200 price differential between the baseline LTE Fire HD and the Wi-Fi-only version, which is an unheard of mark-up. To be fair, the low-tier LTE tablet comes with an automatic 16 GB storage upgrade, so the price difference between a 32 GB LTE device and a 32 GB Wi-Fi device is $130, which happens to be the same premium Apple charges for 4G connectivity on its iPads.

The thing is that Apple is known for spec-inflation. Amazon has the opposite reputation. As my colleague Kevin Tofel points out, Amazon has always taken the attitude that it makes its money on services and cuts its customers a deal on hardware. Amazon CEO Jeff Bezos made the same point at the new Fire’s unveiling, claiming it makes its money when customers use its products, rather then when they buy them.

Well, apparently its LTE tablet is the exception. Amazon is playing the same pricing game as Apple, grossly overcharging customers for upgrades and additional features. If it really cost $130 to add LTE to a device than there would be no such thing as $150 LTE smartphone, yet MetroPCS somehow manages to sell two such devices without any subsidy.

Amazon is taking the same attitude of many of its tablet-making peers: 4G is for suckers.

So why the big mark-up? Amazon appears to be embedding a very expensive cellular modem into the Fire. It hasn’t revealed detailed specs just yet, but it claims to have engineered a modem that supports 10 bands, which includes multiple LTE frequencies as well as global HSPA and 2G airwaves.

Cramming that many radios and that many bands into a device isn’t cheap and most likely involves using new active antenna technology developed by companies like Ethertronics. But each new band requires its own power amplifiers, filters and other components, yet Amazon has packed them into a modem only 2.2 millimeters thick. It’s a hell of an engineering feat, and Amazon most likely did this to save it supply chain headaches. Rather than design separate tablets for different regions of the world or different carriers, it can ship the same device globally.

I doubt such a modem costs $130 to manufacture, but even if it does, Amazon could have saved a lot of cost by scaling down its radio ambitions. Instead it chose to make a universal device and pass the expense along to its customers.

Maybe when it comes to tablets, 4G is an unnecessary luxury – those who want it can afford to pay for it. But if tablet makers keep treating their customers like chumps, mobile broadband will always remain an overpriced luxury.

Image courtesy of Mind of the Geek

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Users are increasingly alarmed by the amount of data being collected, with whom the data is being shared and how it is being used. Clearly, there needs to be better engagement among key stakeholders and joined-up thinking throughout organizations — from the chief marketing officer to the IT department — to develop guidelines and best practices for the usage, storage and transfer of data both inside and outside the business.

From the information security standpoint, the key issues surrounding big data tend to fall into the following five areas:

1.  Cyber security: With more transactions, conversations, interactions and data now online, there are greater incentives for cyber criminals than ever before. According to the Information Security Forum’s (ISF’s) January 2012 report, “Cyber Security Strategies: Achieving Cyber Resilience,” today’s cyber criminals are better organized, more professional and have access to powerful tools and capabilities, which they use to identify, target and attack. When things go wrong, they can go wrong big time for an organization. It’s not the one-off data breaches or hacker attacks stories that hit the headlines, but those with far-reaching consequences that can mean reputational damage, legal liability and even financial ruin. Cyber resilience and preparedness strategies are crucial for big data.
2. Data in the cloud: The pressure for businesses to quickly adopt and implement new technologies such as cloud services – often to support big data’s challenging storage and processing needs – comes with unforeseen risks and unintended consequences. Big data in the cloud is a highly attractive target for cyber criminals looking to harvest information. This places more demand on businesses to get their secure cloud sourcing strategy right. 
3. Consumerization: Hand in hand with the growth of big data is the proliferation of new mobile devices, used to gather, store, access and transfer data. Businesses are now faced with the challenge of managing and securing employees’ personal devices in the workplace and balancing the need for security with productivity. The volume of smartphone analytics and Web browsing details are the stuff of security nightmares, particularly when these are blended with both home and work data. Businesses should ensure that their employee acceptable usage policies are in place and continue to manage mobile devices in line with their established security policy.
4. Interconnected supply chains: Organizations are part of often complex, global and interdependent supply chains, which can be their weakest link. Information is what binds supply chains together, ranging from simple mundane data, to trade or commercial secrets and intellectual property – loss of which can lead to reputational damage and financial or legal penalties. There is a key role for information security in coordinating the contracting and provisioning of business relationships, including outsourcers, offshorers and supply chain and cloud providers.
5. Privacy: As larger amounts of data are generated, stored and analyzed, privacy concerns will become an even bigger issue in the years to come. Start planning for new data protection requirements as soon as possible, while monitoring for further legislative and regulatory developments.

Data aggregation and big data analytics promise businesses a treasure trove of marketing intelligence. The ability to target customers based on the combination of past buying patterns, sentiment and previously “private” preferences are the Holy Grail for marketers. But business leaders eager to adopt these new technologies for business benefit will be well advised to understand the legal and other restrictions that may apply across multiple jurisdictions. They should also implement privacy best practices and design them into the analytics programs, build in transparency and accountability, and never lose sight of big data’s effect on people, processes and technology.

It goes without saying that securing both the data inputs and big data outputs present a key challenge that can impact not just potential business campaigns and opportunities, but also have far reaching legal implications. The answer? Stay agile and ideally anticipate changes to regulation rather than being caught when they suddenly appear.

That being said, it is still early days and we have not yet seen a tremendous amount of external requirements mandating that businesses assure information integrity. However, the sheer scale of information processed by businesses remains on the increase and with big data analytics bringing business decisions closer and closer to raw data, the quality of information has become increasingly important. If the same sophisticated analysis can be applied to relevant security data, big data may even be used to improve information security.

While such solutions may not yet appear to be widespread, you can be assured they are well on the way with big data analytics already being used for fraud prevention, cyber security detection, social analysis and real-time multimodal surveillance.

Steve Durbin is global vice president of the Information Security Forum (ISF). His main areas of focus include the emerging security threat landscape, cyber security, consumerization and outsourced cloud security. Previously, he was senior vice president at Gartner. 

Image courtesy of Flickr user KellBailey.

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When the two finally did meet, Jobs tried to impress Weeks with his knowledge of glass, and Weeks had to tell him to shut up — Corning, of course, has been making glass and ceramics for a century.

This anecdote is partly funny, partly troubling. It is made funnier by the fact that Corning, due to customer NDAs, cannot publicly confirm that the meeting ever took place. It is troubling, because few Valley companies look at companies in Kansas or Kenya as potential suppliers or partners — though their CEOS are happy to fly there to close a big customer sale.

In broader terms, it is symptomatic of how little the Valley knows about how much technology is being developed in corporate America. And in reverse, it hints at how little corporate America knows about the world class operations of many Valley companies. Both sides should wake up to the consumerization of enterprise tech and the enterprising of consumer tech.

The consumerization of enterprise tech

When I started research for my book, “The New Technology Elite,” I assumed that about ten industries (autos, medical devices, etc.) and a few outlier companies, such as Nike with its sensor-enabled shoes, were leading the way when it comes to embedding technology in products and services. My assumption was quickly proven wrong. I discovered a wide range of companies offering “smart” products and services, and I ended up covering more than 75 industries in my book. Here are just a few examples:

•    The smart shirt from Under Armour has a removable sensor pack with a triaxial accelerometer, a processor and two gigabytes of storage to measure athlete performance.

•    Do (as in Dough) in Atlanta is serving up a smart restaurant. Not only has it replaced paper menus with iPads, but the tablets can also be used to tell the valet to pull up your car.

•    Moen is making the shower smarter. The IOdigital wall-mounted control panel with a handheld remote lets you set and maintain water temperatures and bath levels.

•    Rain Birdʼs ESP-SMT irrigation controller makes lawn maintenance smarter. It utilizes historical and real-time weather data (you input data such as your zip code, allowed watering days and the plant and soil type for each zone) to determine the optimum watering time and amount.

•    John Deereʼs FarmSight initiative helps farmers in three areas: Machine optimization for increased up-time, logistics optimization for better fleet management, and decision support with user-friendly monitors, sensors and wireless networks to enable access to machinery and agronomic data.

•    Progressive Insurance offers Snapshot, a small telematics device that connects to the carʼs electronic diagnostic port and allows Progressive to monitor your driving patterns. And if the data shows that you are a safe driver, Progressive promises to discount your premium by up to 30 percent.

Many in the Valley still talk contemptuously of Xerox or Blockbuster and think corporate America does little interesting in the way of technological innovation. Based on the list above, thatʼs clearly a dated perspective.

The enterprising of consumer tech

In reverse, corporate America dismisses much of the Valley as “consumer” tech. Instead, it should be studying the operations at tech companies. For example, corporate America has much to learn from HPʼs complex global supply chain and how it can adjust to countless hiccups — including ones caused by the Japanese tsunami and the Icelandic volcano — and also how it deals with longer-term shifts as it integrates acquisitions and transitions from PCs to laptops to Ultrabooks. Similarly, Apple is running retail operations better than Nordstrom. eBayʼs PayPal unit is running better operations than many banks. Google and Facebook are running data centers far more efficiently than IBM. There are many more examples that show that Valley companies are the new “best practice” leaders in many operational areas.

The new technology elite

The convergence of the two powerful trends described above is revising the definition of technology excellence and who qualifies today as a “technology elite.” It is no longer just about being fluent in the geeky jargon of Big Data and cloud architectures.

Today’s tech elite are focused on:
•    Product design elegance
•    Physical presence in strategic retail locations
•    Ecosystems of developers and thriving app stores
•    Social savvy
•    Combating hacker groups such as LulzSec and Anonymous
•    Pragmatism in a world where attorneys are even more influential than engineers
•    Being able to fly to Xiamen or Xanadu at a momentʼs notice

Geoffrey Moore popularized the saying “crossing the chasm.” Itʼs time for companies on both sides to “traverse the Valley.” Thereʼs much to learn from each other.

Vinnie Mirchandani is the author of “The New Technology Elite” and other books on technology enabled innovation. He also consults with CIOs on technology strategy. He can be emailed at vm AT dealarchitect DOT com.

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Daisey’s infamy has grown following the decision of This American Life on March 16th to retract an earlier report after discovering that Daisey could not account for key facts in both his monologue (The Agony and Ecstasy of Steve Jobs) and in his statements to This American Life for a report on Apple and manufacturing that got widespread attention. Among other things, Daisey completely made up an anecdote in which he had supposedly invoked a sense of child-like wonder in a former Foxconn worker with a hand mangled on the iPad production line by showing the man a working iPad for the very first time.

After his uncomfortable performance on “Retraction,” Daisey defended his work, writing on his personal blog that “my show is a theatrical piece whose goal is to create a human connection between our gorgeous devices and the brutal circumstances from which they emerge. It uses a combination of fact, memoir, and dramatic license to tell its story, and I believe it does so with integrity.” Given more time to think about it, he actually doubled down, attacking his critics: “Given the tenor of the condemnation, you would think I had concocted an elaborate, fanciful universe filled with furnaces in which babies are burned to make iPhone components, or that I never went to China, never stood outside the gates of Foxconn, never pretended to be a businessman to get inside of factories, never spoke to any workers.“

However, it later emerged that Daisey had insisted on printing “this is a work of non-fiction” on playbills for his monologue, making it clear that he wanted audiences to walk away from the performance seeing Daisey as a courageous muckraker unafraid to tell the stories others wouldn’t touch.

Daisey’s conscience finally caught up with him over the weekend. On Sunday, he wrote the following:

When I said onstage that I had personally experienced things I in fact did not, I failed to honor the contract I’d established with my audiences over many years and many shows. In doing so, I not only violated their trust, I also made worse art. This is not the place for me to try and explain my good intentions. We all know where the road paved with good intentions leads. In fact, I think it might lead to where I’m sitting right now.  I had an acting teacher, years ago, who always taught that the calling of an artist is to be humble before the work. He knew, I think, how easy it can be to lose one’s way.

He went on to apologize to his other theater performers, human-rights advocates, and journalists that had interviewed him for stories in which he repeated all his falsehoods. “Things came out of my mouth that just weren’t true, and over time, I couldn’t even hear the difference myself,” he wrote.

But Mike Daisey forgot to apologize to the entity that was the direct target of his lies: Apple.

Original Sin

Daisey’s selection of Apple and Jobs as the centerpieces of his monologue was not a coincidence. A self-confessed Apple fanboy, he held great admiration for the work that Apple contributed to the world under Jobs’ second term as CEO as well as immense disgust for the conditions under which modern consumer electronics devices are produced. Given that Apple is the largest producer of modern mobile devices made in factories such as Foxconn’s, and given the intense scrutiny that is paid to all things Apple both inside and outside the tech industry, it’s not hard to see why Daisey chose Apple and Jobs as protagonists in his work.

But in reality, Daisey exposed nothing about Apple’s manufacturing issues that wasn’t already known. It’s not that his whole account was fabricated: workers manufacturing products for Apple have been poisoned by dangerous chemicals, killed in explosions that were preventable, and have committed suicide in groups over the last few years.

Steve Jobs Announces iPhone

What Daisey did do, however, was present made-up emotional and personal stories about those issues as if they were new. He spent months on a media blitz linking Apple as the main contributor to the widespread labor and safety issues at companies like Foxconn (which builds products for an entire industry) based on fabricated accounts of his travels in China.

He implied that the company was covering up even worse violations, such as the widespread use of child labor, in one of the most dramatic scenes of his monologue. He wrote an op-ed in the New York Daily News the day before the latest iPad was released, saying “I traveled to the factories in China, spoke to dozens of workers, heard their stories firsthand and went undercover into factories and dormitories. … The company has been choosing profit over workers’ lives.”

And perhaps worst of all, on the day after Jobs died Daisey repeated the story about the Foxconn worker with the mangled hand in The New York Times, linking Jobs’ legacy to a horrific anecdote that never happened.  After This American Life published its retraction earlier this month, the Times removed that paragraph from its archived copy of the article.

The Daisey And The Damage Done

There is no doubt that the consumer electronics industry needs to do more to improve the working conditions under which its products are made, and that Apple, as the leading consumer electronics company of our time, is in a position to make an outsized impact. But Daisey’s contribution to this issue was not just to raise attention to the problem at large (which he definitely did), it was also to generate publicity for his Apple-themed show. He did that with lies that declared not only was Apple not doing as much as it could to solve the problem, but that it was actually a worse actor than its peers.

On a petition circulated by Change.org following the airing of the first episode of This American Life, over 255,000 people affixed their names to a call for Apple to do more to protect workers. They said things like “I can still make the decision to buy PC instead for the sake of my conscience and the wellbeing of other people” and “As a Mac user for 17 years, this is the first issue that could make me stop buying from Apple.” A petition to retract that petition following the exposure of Daisey’s lies has just 373 signatures.

Mike Daisey built the key parts of his monologue–and much of his current fame–on lies he told about Apple. He has one more apology to make.

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The MacBook Air was the only notebook that saw increased shipments during the quarter, according to Digitimes Research, which said on Monday that notebook shipments slowed by 8.7 percent sequentially to 48.59 million units worldwide during the quarter.

In Apple’s last quarterly earnings report, it reported 4.89 million Macs sold, meaning if we use Digitimes’ estimate of 1 million MacBook Airs sold, the notebook represented roughly 20 percent of the total. We know Apple’s iMac is also performing well, but it’s logical to assume the Air is growing in influence in terms of the overall Mac picture. Expect that trend to continue, since analysts expect the so-called Ultrabook category to explode in the next six years.

Apple doesn’t usually break out sales of individual Mac lines from the overall Mac category total, but it will still be interesting to see if it has any official comment on the success of the Air during its quarterly earnings conference call on Jan. 24.

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The how and why of pricing

DigiTimes published its interpretation of the chatter it’s hearing on Tuesday, suggesting we could see a Wi-Fi iPad 2 starting at $299, then a mid-tier iPad 3 with beefier specs including an A6 processor but the same resolution display as the iPad 2 starting at $399, and finally a high-end iPad 3 with the A6 and a 2048×1536 high-res display starting at $499. The idea that what separates the two iPad 3 models is the presence of a Retina Display makes sense, since other supposed differentiators provided in the past (slightly different camera sensors) didn’t seem to justify the price difference from a consumer perspective.

Not without precedent

Having three versions of the iPad available at once seems like a bit of a leap from the current sales model, which simply offers different connectivity and storage options for one device, but it’s not like Apple hasn’t done this before. The iPhone, for instance, now offers three distinct models: the 3GS, the iPhone 4 and the iPhone 4S. The iPhone 4 and the 4S resemble each other closely but are separated by $100 in terms of entry-level pricing for new models, just as DigiTimes anticipates the two tiers of iPad 3 to be.

Overlap and confusion

The issue is that with the iPhone, the 4S came along as a successor to the 4 and when the older model remained on the market, Apple essentially clipped its wings by offering only 8 GB of onboard storage. Introducing two new devices at once and keeping an existing model, presumably with different connectivity and storage configurations, as DigiTimes suggests, would result in a lot of overlap of pricing and generate confusion for customers. Apple has traditionally eschewed overly complicated product offerings in favor of a simplicity that helps focus customer buying decisions.

Three is unnecessary, but two is smart

Despite this new report, it makes the most sense for Apple to focus on two devices in light of the above considerations. Covering the pricing gap with an iPad 2 starting at $299, then ranging up based on configuration options and offering the iPad 3 at $499 makes the most sense if Apple really does want to attack the low-cost market while also giving its next-gen tablet the best chance to repeat the success of its predecessor.

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First there is that date: DigiTimes’ source says Apple will do the unveiling on Jan. 26 at iWorld, which is a new component of Macworld, an annual conference Apple pulled out of years ago in favor of hosting and managing its own media events. The January date is also early compared to what we have heard recently, which suggests a later date in February might be more likely.

Then there is the description of the separate models Apple intends to launch. The iPad 2 will remain on sale as an entry-level device, the report claims, while Apple will introduce two new iPads to compete at the mid- to high-end tablet price points. While I think Apple would do well to keep the iPad 2 around as a low-cost option and have said as much in the past, the DigiTimes report’s description of the other two versions of the device leave me skeptical.

Both would have 9.7-inch screens, with 2,048 x 1,536 resolution Retina Displays, lit by dual-LED light bars for better brightness. Quad-core A6 processors would replace the iPad’s dual-core A5 as the chip powering the next-gen tablets, according to the sources, and they would be outfitted with high-capacity batteries that could offer double the juice of the current version. The only difference between the two, according to the report? The high-end model will get an 8 megapixel CMOS image sensor, while the mid-tier version will get only a 5 megapixel.

The problem is that the camera on the iPad is more of an afterthought than a feature that will prompt users to pay an extra hundred or more dollars to upgrade to a higher-tiered device. On the current iPad, the rear camera captures still photos at less than a megapixel, which is fine, because if you are using your 10-inch tablet as a camera for anything other than the odd emergency situation or when making a video call, you are doing it wrong. Especially since most people with iPads are walking around with 5 to 8 megapixel shooters in their smartphones anyway.

A lot of the report does make sense: the iPad 2 as a low-cost option; better backlighting and a high-resolution display, as we have seen in previous reports; and improved battery life. But overall, it doesn’t hang together. Instead, it reads like a wish list combined with a flight of fancy about camera components. We will see new iPads early in the next year, but don’t get your hopes up for three arriving in January.

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