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Friday, March 17, 2006

That $100 Laptop Again

That other war, the undeclared one between internet rivals Microsoft and Google rumbled on again yesterday, with BillGates taking a hardly veiled sideswipe at the Google backed One Child One Laptop project. (and here, and here).

'The last thing you want for a shared-use computer is for it to be something without a disk, and with a tiny little screen,' said Gates.

'If you are going to have people sharing the computer, get a broadband connection and have somebody there who can support the user.'

Gates also blasted the crank system that can provide some of the laptop's power. 'Geez, get a decent computer where you can actually read the text and you're not sitting there cranking the thing while you're trying to type,' he said.

Gates, who was named as the world's richest man this month with a 50-billion-dollar fortune, also told the Government Leaders Forum that phones would soon become 'digital wallets' that store and coordinate personal information for everyday use.

He showed off an ultra-mobile computer Microsoft developed together with Samsung that will cost between 600 to 1,000 dollars.

Wednesday, March 15, 2006

Sustaining the Insustainable

Brad Setser notwithstanding, I am deeply unsympathetic to this kind of speculation:

"The US current account deficit suffered its fastest quarterly deterioration in the final months of last year, ballooning to a record 7 per cent of national income. The worse-than-expected deficit rekindled fears among economists that global imbalances would undermine the dollar."

While many are not, I at least am convinced that ageing related issues will mean that there will be no 'lasting recovery' in Germany and Japan. The US ca deficit is of course 'long run non-sustainable', but Italian government debt and the Spanish housing bubble are even more unsustainable, and this over a relatively shorter time period methinks. So the bottom line is that the euro isn't going to be rising sharply anytime soon, the yen isn't either, and the Chinese seem to be stubbornly hanging on to a modified version of their peg. In the light of all this, I am at a loss to see how a sustained fall in the value of the dollar would work.

Actually I seem to find myself rather more in agreement with Ronald Rubin:

The U.S. government's budget deficit together with the current account gap represent ``unsound underpinnings'' in an otherwise ``good'' economic landscape, Robert Rubin, chairman of Citigroup Inc.'s executive committee and former Treasury Secretary in President Bill Clinton's administration, said in a Feb. 22 interview. ``At some point, these kinds of deficits are not viable,'' Rubin said. ``The probabilities are extremely high that if we don't address these imbalances, then at some point, and it could be years down the road, we'll pay a very big price.''

It's the years down the road bit that I go for. The problem is obviously an important one, but the US situation is the least unsustainable of all those 'unsustainable' situations we can see oput there right now, which means that, in the short to mid term, the dollar will hold. If any thinging I my outlook is for it to be marginally up on the year in 2006, and if anything should go wrong in Euroland, then that would be revised from marginally to significantly: ie the risk to my forecast is upwards.

Web Storage Space

Well, Google's GDrive proposal seems to be setting the pace, but others now seem to be in the mood to try and keep up: this seems to be a very reasonable offer. As in make me an offer I can't refuse.

Monday, March 13, 2006

What is Google Up To?

The backround to this post is the announcement of Gdrive discussed here. This started me thinking. Then a flurry of articles later in the week gave me even more food for thought: like this one, and this one,and this one, and this one(in fact this whole damn thread), and this one, and this one, and especially don't miss this paragraph:

Another advantage is simplicity. For the same reason rockets tend to work while space shuttles tend to explode, future operating systems may have an advantage if they are simple rather than complicated. Just like there are far too many things to go wrong on a space shuttle, any one of which can end in tragedy, Windows has reached a similar level of complexity: It is virtually impossible to ensure that it will never crash. But if all your PC is doing is serving up a web site, then it does not need even a fraction of the power, complexity and inherent unreliability of Windows, MacOS or even Linux. With a simple operating system such as QNX or some future tiny system, your PC would not have to run as fast, as hot or as noisily as it does today. It would have a much longer battery life, be silent and could be comfortably placed on your lap without any question of its effect on your reproductive future. Best of all, you would never need to go to the store to buy software. You would not need to install software. You would not need to download updates, patches, service packs or anything else. You would not need anti-virus programs or worry about spyware. These would all be the responsibility of the application service providers.

So what do I think this is all about. Well let's step back a minute and think about former MIT medialab director Nicholas Negroponte and his One Laptop Per Child (or $100 laptop) project. Now just look what I found in a WSJ article from late last year:

"Although no contracts with governments have been signed, Mr. Negroponte says current plans call for producing five to ten million units beginning in late 2006 or early 2007, with tens of millions more a year later. Five companies -- Google Inc., Advanced Micro Devices Inc., Red Hat Inc., News Corp. and Brightstar Corp. -- have each provided $2 million to fund a nonprofit organization called One Laptop Per Child that was set up to oversee the project. Mr. Negroponte says five companies are bidding to make the laptop, although he declined to name them".

So Google, arch rival of Microsoft and AMD, arch rival of Intel, are funding Negroponte. Hmmmm.

Now lets look at another aspect of this. Google wants to sell videos. Google is also interested in books. In order to do this, Google has started digitising books:

During a briefing with international journalists at CES, Mr Schmidt and Mr Page sought to reassure concerns about Google's book digitisation project. "Google book search is about building the world's largest card catalogue," said Mr Schmidt. "We are not taking copyrighted information". Google is working with Harvard University, Stanford University, the University of Michigan, the New York Public Library and Oxford University on the digitisation project.

and guess what:

As well as concerns from groups representing publishers and authors, Google faces competition from a similar rival plan to scan books by the Open Content Alliance. The group counts Microsoft, Yahoo and the Internet Archive among its backers.

So what have we got? Well as far as I can see one day or another there is a head on head battle coming between Google and MS. The driving application here (killer app??) may well be a cheaper than cheap de-bowdlerised lapdop with only very simple and basic components. It will only need very basic components since eevrything else you need will be up in cyberspace, courtesy of Google. Principal victim of this new 'leap forward', Microsoft, who will find it hard to leverage much revenue from an excessively sophistocated Operating System which is priced out of its bracket by the extraordinarily cheap computer.

What's in it for Google? Well think contents. All that video, text, film, music etc etc which could be made available as and when you want it via a subscription based service. Maybe itunes is only scratching the surface on what could be a very deep ocean.