Industry

All this talk about iPhones made us forget the easy solution. Straight from Apple:

Verizon Wireless will offer three bundles, all featuring an iPad Wi-Fi model and a Verizon MiFi 2200 Intelligent Mobile Hotspot, for a suggested retail price of $629.99 for iPad Wi-Fi 16GB + MiFi, $729.99 for iPad Wi-Fi 32GB + MiFi and $829.99 for iPad Wi-Fi 64GB + MiFi. Verizon Wireless is offering a monthly access plan to iPad customers of up to 1GB of data for just $20 a month.

In other words, there is no CDMA iPad yet. It’s hard to say who wanted this more. Apple surely wants to suck the air out of the holiday season for any upstart Android tablets—enough to agree to this duct-tape solution. At the same time, iPad sales figures—rumored to be bananas—have probably made Verizon anxious.

A Verizon iPad, especially in this configuration, also has fewer obstacles than a Verizon iPhone. I don’t think this strengthens any theory about iPhone timing. Nobody should be surprised that the two companies have been talking, though it is encouraging to see that they’ve agreed on something.

News Flash: shipping is hard. Reuters reports that LG’s planned Android tablet will be later than expected because LG hasn’t figured out how to build an Android tablet yet. Daring Fireball points out that this buys LG’s VP of mobile marketing, Chang Ma, some more time to look silly.

Here’s a shocker: the product you send out the door will probably come later, and with fewer features, than you intended. Time runs out. Unexpected complications arise. Bugs overwhelm the team. Your partner invalidates your plans. Something’s got to give. You need to either take something out, or wait longer. But if you’ve spent months blowing smoke, now everyone is waiting longer.

The problem with talking smack is you immediately put yourself on the clock. You almost guarantee public disappointment when the product does not ship as (or when) promised. If you just shut your mouth and let the product speak for itself—once you actually have a product—then there’s a much better chance for people to be pleasantly surprised. Some companies understand this. Others clearly do not.

On Monday, a (presumably former) global supply manager at Apple named Paul Shin Devine pleaded not guilty in federal court to 23 charges of wire fraud, money laundering, and illegal kickbacks. The indictment details an operation where he disclosed information about upcoming Apple products to suppliers in Asia, which the suppliers used to gain a stronger negotiating position with Apple and win better contracts. Devine’s arrest was reported by the San Jose Mercury News late last week, and Reuters claims to have uncovered some of the suppliers in question, who are predictably claiming ignorance. (Extra Style Bonus for whoever worked the word “gist” into a federal court document.)

This is high Silicon Valley drama: a bonafide racketeering and fraud operation built on Apple’s most guarded treasure, its trade secrets. Until now, egotistical thrill seekers have been the presumed sources of Apple leaks. The lost iPhone 4 and the early iPad 3G demo for Steve Wozniak, by contrast, were mistakes. These allegations, if true, are an eye-opening betrayal.

The indictment claims Devine received approximately $2.5 million in kickbacks from these dealings, which he split with a co-conspirator. That was merely his share of the pot, though: the effect of his alleged actions on supplier contracts presumably cost Apple much more—perhaps tens of millions of dollars. A pending civil suit filed by Apple against Devine may or may not detail Apple’s estimated financial exposure.

My understanding is that this sort of behavior is not at all unusual when doing business in China. Even if so, it won’t impress anyone in Cupertino. Apple surely cares about being ripped off by its suppliers, and certainly by its employees, but make no mistake: Devine’s true crime was disclosing confidential information. Doing so for profit, while a juicy twist, is almost immaterial. It wouldn’t surprise me to hear the Apple brass was happy Devine committed wire fraud—it means they can send him to jail for leaking company secrets.

Even after reading the indictment, questions remain. Who uncovered this mess? Apple? The IRS, upon randomly auditing Devine’s tax returns? Or was it part of a larger law enforcement operation? If Apple did the work, it was probably through a simple investigation into the numerous leaks that have materialized in the last year or two. Only when digging deeper would they have found that money and federal crimes were involved.

Additionally, how (if at all) will this affect the frequency or quality of leaks in the coming months? Was Devine a major source of details that have ultimately ended up in articles from DigiTimes, Taoviet, and others? Will his arrest scare off other sources?

Regardless, incidents like this will only intensify Apple’s frustration with external dependencies. Whether it be Java, Flash, or hardware production, Apple hates entrusting its business to third parties. If it can find a way to build one million iPhones per week, and Macs per month, without ever talking to companies like Foxconn, it will. With $46 billion and counting in cash, and huge ventures into retail and data centers already tackled, one wonders how far off an Apple-run manufacturing operation can be.

Earlier this month, Chevrolet announced a $5800 option for Corvette Z06 and ZR1 buyers to build their own engine right inside the Performance Build Center in Wixom, Michigan. They’ve posted a great HD video on YouTube illustrating the build process. It’s a wonderfully creative move that shows someone at GM is thinking about a company’s relationship with its customers.

Casual car owners may be wondering why one would pay extra money to do the manufacturer’s work. The type of customer who would buy these cars is not confused at all: for a true sports car enthusiast, there may be nothing more intimate than building an engine.

Most high-end sports car makers offer meaningless options and “experiences” designed only to extract more money from the target demographic: $1500 leather; $2000 paint jobs; $5000 “driving schools” with less than an hour behind the wheel. Yet here is GM, a company written off for dead by many observers, with perhaps the most memorable experience possible. What’s cooler than owning a 500-plus horsepower supercar? Building one with your own hands.

Between the employee time investment and the low volume of Z06 and ZR1 sales, this program will not be a moneymaker for GM. That’s not the point. This is a bold and brilliant move to establish a rapport with core customers, and to get the attention of enthusiasts and industry observers. It’s reminiscent of what Apple stayed true to while staging the biggest comeback in the history of business.

It’s very encouraging to see this kind of thinking still alive in Detroit. Companies in every industry should do more of it.

(Aside: Note “Corvette” is the stated brand in the video—GM wisely continues to distance its own tainted image. Don’t be surprised if Corvette becomes its own company in the next few years.)

Nokia took a witty jab at the iPhone 4 “Death Grip” issue this morning with a post asking “How do you hold your Nokia?” (Witty answer: “Not at all.”)

Speculation remains high on whether the issue is due to a software bug or a hardware design flaw. If it’s software, it should be fixable. If it’s an inherent problem with the phone itself, and the complaints increase, expect more competitors to joke around.

My personal experience with the issue has been unremarkable: I’ve seen the bars go down when held a certain way, but no real degradation in voice or data service. Connectivity, which has always been a bit spotty where I live, seems no different from my 3GS. If I hadn’t seen the headlines, I probably would not have noticed anything unusual. It’ll be at least a week of use before I can really tell.