When Steve Jobs announced the iPhone, he said that Apple expected to sell 10 million units by the end of 2008. By January 2007 Apple had already sold 40% of its self imposed goal. So, why are analysts increasingly doubtful that Apple will be successful?

On the surface it seems that Apple has been very successful in the U.S. Market data shows that right now Apple is the number 2 smartphone maker, just behind RIM (the makers of the Blackberry phones). However, in Europe initial numbers aren’t as impressive. In France, for example, Orange sold 90,000 units in December, short of their 100,000 target. All in all, only between 300,000 and 400,000 were sold in Europe. Analysts also expected Apple to sign deals in more European counties. Europe is much more than just the UK, Germany and France. The EU has a population of nearly 500 million and those three countries represent just over 41% of the total. This number clearly shows that Apple still has much work to do in Europe if they really want to be successful on that continent.

However, we all know that these numbers are clearly wrong. Since AT&T claims to have activated only slightly over 2 millions iPhones, that leaves about 1.3 million devices unaccounted for which have been very likely activated on cellular networks not approved by Apple (some in the U.S. but most overseas). We already know for example that about 400,000 iPhones are in use in China. That means that the iPhone is not as successful in the U.S. as Apple would like us to believe. It also means that about 30% of all iPhones are sold to customers who would not buy the device if it couldn’t be unlocked.

Until now, Apple has been very active fighting the grey market. In November they released firmware 1.1.2. It broke all known exploits but the enhanced security could still be circumvented through the use of a Turbo SIM (which was relatively expensive and hard to obtain). On January 15, Apple released firmware 1.1.3 which plugged that hole. In my experience, Apple was very successful slowing down the gray market during the second half of Q4 and they must have felt the results on their balance sheet. Now that Zibri has released an easy to use tool to unlock the iPhone, gray market sales are soaring again (based on anecdotal evidence observed in Mexico and other LA countries).

If we consider that the iPhone has been available for six months, that means that Apple has achieved weekly sales of approximately 190,000 a week, with 57,000 units going to the gray market. By improving their device security, Apple has lost at least eight weeks of gray market sales which accounts to more than 225,000 units. If Apple were able to produce an unlock-able device by early March, they would lose the opportunity of selling 2,500,000 units during 2008. Can Apple reach their goal of selling 10 million units by December 2008 without the help of the gray market? Maybe, but not just by maintaining their current course. Apple would have to significantly increase legal sales to compensate for that loss. The easiest way to achieve that result is by lowering unit prices as some recent rumors have been pointing to, but that would seriously harm the company margins and investors wouldn’t be pleased. There must be some serious debate inside Apple going on as to what their attitude toward this market should be.

The real question though is wether Apple will be scared enough by the prospect of not achieving their stated goal to tolerate the gray market or if they will continue cracking down on hackers, presumably with the release of firmware 1.1.4 which is expected to support third-party applications and was expected before the end of February.

My opinion is that Apple has no choice and will have to continue plugging the iPhone security holes in order to try to make the iPhone impenetrable. The reason is simple and has nothing to do with AT&T. If the iPhone can easily be hacked, it won’t be long before the cripto key used to digitally sign applications is found and everyone can start creating iPhone homebrew applications, defeating the whole purpose of signing applications. That is something that Apple has to avoid by any means if they are serious about security (or if they plan on making money by selling apps through the iTunes store, which is much more likely). That means that a price cut will come along the release of firmware version 1.1.4.

Meanwhile, each week that goes by with no firmware update Zibri can be credited with the sale of an additional 57,000 iPhones. That probably means that there isn’t much pressure on Apple engineers to release the SDK as planned and that a delay of a couple of months (say until WWDC) could have some nice side effects like increased unit sales with healthy margins and renewed interest for their developer’s conference. But then, I am sure that Apple will claim that they needed the additional time to polish their code.

[updated on February 26th: Apple has just released firmware 1.1.4. This new release doesn't seem to break unlock phones and ZiPhone seems to work fine, although some additional tweaking will be required in order to tune the tool for 1.1.4. Is this an indication that Apple is willing to compromise in order to achieve its sales target? Maybe, we will see.]

I just read a nice article on Yahoo about a programmer, Jonathan Coulton, turned songwriter. It is an interesting article and I encourage everyone to read it.

I haven’t listened to all his songs, but one of them, Code Monkey, really catched my attention. It is about a programmer, his life and his dreams. Not only is this a great song, I think that we geeks can all relate to it (here are the lyrics).

As for me and my life, I am a very happy monkey. I feel I have it all, pretty girl included. As the song says, I am a very simple man with big warm fuzzy secret heart. I just wish my single daughters could find themselves a geeky boyfriend each. They deserve to be as happy as their mom and I.

Actor Roy Scheider died a week ago, on February 10. Although I do not write much about movies and actors, in this case I felt compelled to write something about him.

Everyone seems to remember Roy from is role as police chief Martin Brody in Jaws. I am not sure that the producers of that movie understood what kind of hit that movie would turn out to be. What I am totally sure about is that nobody could have predicted it by just reading the script. The story line is pretty much in the same league as Die Hard 2 or Speed 2 in terms of credibility (hint: absolutely unbelievable). Sure, nobody will ever forget the initial scene when the shark approaches his prey, but there wasn’t much else in that movie.

However, Roy Scheider participated in many other movies, often as a supporting character (that is how he received his single Oscar nomination). His performance in Marathon Man as Dustin Hoffman’s tough older brother was memorable as it highlighted just how vulnerable Dustin’s character, Thomas Levy, was.

In my case, I remember Roy for his principal role in Blue Thunder a John Badham movie from the eighties. The movie script and dialogues were not remarkable, but somehow the movie worked.

That is what really makes Roy’s work stand out. He wasn’t only a great actor, he made the movies he participated in better. Sheider belonged to a small category of great actors (Brian Dennehy comes also quickly to mind) that while not being major movie stars could improve a scene just by being part of it. The movie industry really needs more strong supporting characters like them as they can often turn a B-Movie into a really memorable flick.

Rest In Peace, Roy.

So, the results are in. On the Democrat side, Hillary Clinton fared well among Hispanics while Barak Obama got the support of the Black Community. That is what most analysts will tell you. What is missing is the explanations as to why there is such bad blood and mistrust between these communities. When we hear about Iraq we want to know why Kurds, Shiites and Sunni cannot get along. The same happens with the old Yugoslavia, we want to know why there is such hatred between Serbs and Albanians. However, if a comparable problem happens in the U.S. everyone chooses to ignore it, that is the politically correct way to behave. Is that the way to solve a problem? Frankly I do not know what to say, you figure it out.

As I wrote in a previous port I am currently in Vegas on holidays. Yesterday I went to see “Mamma Mia” a fun musical comedy based on music by ABBA. I really enjoyed the show, but that isn’t what I want to write about. You see, in the play three mature women who used to be best friends reunite and have a lot of fun remembering the good old days, behaving as if they still were young girls.

This situation isn’t unique to the play, it happens all the time. You can go to any cafe anywhere in the world and you will see groups of women having much fun and laughing. This rarely happens with men. We are much more serious, we feel silly if we behave foolishly. We have to be strong, in control. In many ways that is sad. I am sure that we would enjoy having fun like children again, but we refuse ourselves that luxury. I still remember the last time I felt like a child. A couple of friends and I had traveled to Xalapa to visit a customer. Suddenly, someone shouted “the last one to get to restaurant pays the bill” and we all started to run, pushing the others to avoid arriving last. We had a lot of fun but it made me think about all the time during which I hadn’t felt being a kid again.

There is a great French song, “Évidemment” performed by France Gall but composed by her late husband Michel Berger that summarizes the situation quite nicely, “We still laugh at silly things, obviously, but not like before”.

Women do not seem to suffer this problem. They are not as afraid of ridicule as most men are and as a result they have more fun. Good for them! This is something we men should learn from.

Yesteday I wrote about rude people. The problem extends well beyond discussion groups and forums. Until his show disappeared a couple of weeks ago, I used to watch religiously Robert Scoble’s technology interviews on PodTech.net. It was a great way to learn about emerging technologies and companies. In most cases I was really shocked at how little interest those interviewed had in what Robert had to say. They just wanted to send their message out. It was all about them. They probably did not realize that by not entering in a true conversation with him they were really hurting themselves. By the way, this is not something that I want PR people to learn, this should be something natural. No matter how interesting your message, in order to be successful you need to be able to listen with a good degree of empathy.

I am currently in Vegas, resting a couple of days after a very hard end of year and an even more complex year start. I had the opportunity to play a couple of minutes with the new Mac Book Air at the Fashion Mall Apple Store. It definitively is a sexy machine. I would love to have one at work to replace my IBM laptop. This is a great machine for e-mail, Internet browsing and customer presentations. It will not replace my MacBook Pro any time soon, but it is a great addition to the portable Mac line of products. Judging from the crowds the new laptop was drawing and the number of inquiries , I don’t expect it to be the failure many have predicted.

I get a lot of questions about SOA. It turns out that my white paper “Successful SOA Implementation” has been quite popular and I get questions from all over the world. What I find surprising is that a large majority of those who contacted me don’t even bother to thank me once they get their answer. Do they think it is my job to reply to SOA questions? Is it the medium? I am not sure. What is evident though is that the Internet is not the best place to learn good manners. No matter what site you go to, discussions are rarely civilized. Most posters seem to believe they are geniuses and those who disagree are dumbasses at best.

So, the true question is, are people showing their true nature on the Internet? Are they just having fun by trying to create controversy? I am not sure, but I don’t really like what I see.

During the week-end I updated my internal 17” Powerbook hard drive with a new Samsung HM320JI. The operation is actually quite easy if you have the right tools and some patience. You just need to follow the illustrated manuals published by the nice people at ExtremeTech or iFixIt. Replacing the drive was actually quite fast, it can easily be done in half an hour. The problem is re-installing the OS and migrating the contents of your old startup disk to the new one. Even though Leopard features a nice migration assistant that takes care of everything for you, the operation can take over two hours for a relatively small 120GB disk.

Anyways, I am really happy with my new drive and I encourage everyone to perform such an upgrade. However, be aware that finding a large capacity laptop drive was much harder than expected. It turns out that the largest 2.5” internal drive I could find at Fry’s or Best Buy were relatively small and old 160GB models. Knowing that 500GB models are already available on the web, I was quite disappointed. The store clerk told me that there wasn’t much demand for such drives. I find it hard to believe. I finally bought an external 320GB 2.5” drive. The enclosure now holds my old disk and this made it easy to transfer the data to my new disk. If you do the same, just make sure the disk is a SATA drive. Good luck!

On my way to the airport I passed a church that had a sign that said “No perfect people allowed”. I found that quite intriguing and looked for the phrase on the Internet. It turns out that it is the title of a book written by a John Burke. According to Amazon, this book “challenges Christian leaders to engage in the messy art of creating the right culture to reach our postmodern, post-Christian society. Through real stories of Gods perfect work in the lives of imperfect people, you will experience the power of an authentic church community and learn how to deconstruct barriers and bring hope and healing to Americas most unchurched generation”.

Frankly, I still don’t get it. Does this mean that perfect people (assuming such thing exists) do not need to go to church? I don’t think so, churches are first and foremost about worshiping, and this applies to everyone. Does it then mean that the church expects people to have imperfections and keep them? Unlikely, it is clear that all churches have a pretty clear defined image of how people should be and behave.

The truth is that I fully understand what this book is all about. It is about getting more people to church, accepting more people who previously would have been social outcasts. This is something that the catholic church has long done. It is easier to cater to the imperfect, as they are a much, much larger group. On the other hand, Protestants have historically had “higher standards”, marginalizing sinners until they truly repent, although this has clearly changed over time. At least that is my perception, having been raised in lutheran Utrecht and calvinist Geneva. The problem is that since so many people do no longer attend church, it has finally become impossible for any religion in the Western world, even in small towns, to hurt those sheep who abandon the herd by excluding them from the group. It is therefore necessary to move to plan B. That is what John Burke proposes, reaching to a new demographic to become relevant again.

This strategy is hardly new. We have seen this happen many times in the Western World. In the 60’s Pope Paul VI arguably started the revolution at the Second Vatican Council, but society has kept modernizing much faster than any church and that is why religious people keep looking for solutions to the exodus that most churches are suffering. The problem that I see is that like all products who change their image in order to appeal to new customers, they take the risk of losing their identity. Phony products don’t appeal to their original audience nor to the new target group.

Abandoning faith during adolescence was a difficult decision for me. Being an atheist in the early eighties was much more difficult then than it is today. Who knows, if I had faced hardships my belief in the lack of a God could have been shaken and I may have been drawn back to religion. However, this is totally impossible today. The lack of certitudes displayed by all western religions is so obvious that it has become part of the problem. Nobody likes presidential candidates, companies or churches that flip-flop. Consistency is a strength, specially for churches. Need proof? Look at the muslims, their message hasn’t changed in 1200 years. But hey, what do I know, I am one of those imperfect persons.