Quite simply, Amazon introduced the Kindle DX for $489. It’s a book reader with wireless, but without any computer features. There have been many questions about the the price, primarily that it’s high. But if you put it in the perspective of netbooks, the price become…well, quizzical. Computer makers are pushing prices down from $1,000, and have pretty much broken the $500 for limited feature laptops. Now, remember when Steve Jobs appeared during a financial conference call last October? He essentially said that Apple doesn’t know how to make a laptop that isn’t a piece of crap for less than $500. Well, how do you reconcile the $489 Kindle price and the $500 “crap” limit? It’s confusing to me, and I’m sure that it’s also confusing to the computer makers–and they have to make profit and I don’t. When Apple finally enters the netbook market, it’s going to be interesting.

I was recently poking around my Web statistics, and discovered some interesting patterns for those who are reading individual articles on the IFO Web site. My readers are entirely tech-savvy, info-types, and consequently are very specific in their interest to IFO, very fast and tend to gather the information and move on. I’ve noticed that Web traffic for individual articles tends to follow three patterns: quick up-and-down, quick up and slower down, and up-and-down followed by another bump. Here they are:

This is the first type of hit, that rises moderately after the item is posted, and then trails off slowly.

Here the traffic spikes very quickly…and trails off just as fast!

This double-bump is interesting–it most likely comes from initial exposure to regular readers of IFO, and then gets a bump from link-backs to the site from other Web pages, including those in other countries who see it somewhat later.

Either way, you can see that pageviews and hits can be very consistent over several weeks, and then will double or triple in just the space of a single day before returning to normal.

Nothing tells you more about the Apple experience than the recent news that outlines the release of Windows 7. As before, there will be various “editions” of the software, each with it more advanced features–and increased price. Now there will also be a “Starter Edition” that will be priced for OEMs as low as $15 a copy, which will help netbook makers retain a profit despite the low price of the computer. So, what’s missing from the Starter? First, you’ll only be able to run three applications at one time. There are apparently some memory limits (4 Gb in 32-bit mode, 8 Gb in 64-bit mode), no AAC, H.264 or MPEG-2 support, no Windows Media RME, and no Virtual XP mode. When a Wall Street Journal article noted that netbooks would be running the Starter Edition, Microsoft was quick to point out that netbooks can run any version of Windows 7. However, some netbook makers may choose to install the Starter OS to meet financial requirements. Ahhh, I get it. By the way, Microsoft says the Starter Edition will be available in retail channels in “developed markets,” while the Home Basic version of Windows 7 would only be available in “developing markets.” Now do you understand Apple’s approach? They create a single operating system, customized for each country’s language, but otherwise not encumbered, premium-ized or regionally limited in order to match some marketing scheme. You buy it, you get everything, and it works on every piece of Apple hardware.

USA Today reports that Apple has been in “high-level” talks with Verizon Wireless about selling the iPhone. When asked for comment, Apple’s spokesperson referred to Tim Cook’s recent conference call to analysts that Apple is “happy with the relationship that we have with AT&T” and has no plans to change it. Cook also mentioned the GSM technology that AT&T uses, and how it’s used by carriers in scores of other countries. Verizon, on the other hand, uses CDMA, which Cook noted is basically near its end-of-life. So who’s correct here? First, it doesn’t make any sense to drop AT&T, since they’ve been doing a very good (but perhaps not ‘excellent’) job of selling the iPhone. And most likely, Apple’s deal with AT&T guarantees exclusivity for some period of time. Looking the other way, going with Verizon would require an entirely new set of iPhone chips to implement CDMA. And the CDMA deployment map is light on Europe, moderate in Africa, and pretty heavy in Asia. But, lastly, as Cook points out, where is CDMA headed? So, back to the original question of whether Apple could be considering a Verizon deal. There may be contract restrictions on branching out. That leaves one issue: does going with Verizon pick you up more customers, both for sales of iPhone handsets, Macintosh computers and for media from the iTunes Store?

It’s not often that you’re able to hear Apple’s execs ramble on about anything in particular. Perhaps the most amazing occasion was during the financial analysts’ conference call last October, when Steve Jobs showed up in-person to better explain the background of the numbers. He explained in very clear terms why Apple wouldn’t be doing a netbook. At one point he explained, “We don’t know how to make a $500 computer that’s not a piece of junk, and our DNA will not let us ship that.” During this conference call, CEO Tim Cook took a similar approach. “For us, it’s about doing great products,” Cook said. “And when I look at what is being sold in the netbook space today, I see cramped keyboards, terrible software, junky hardware, very small screens, and just not a consumer experience, and not something that we would put the Mac brand on quite frankly.” He told the questioner that Apple isn’t interested in the niche “as it exists today” and doesn’t believe “that customers in the long term would be interested in.” But he did say they continue to look at netbooks,”and are interested to see our customers’ respond to it.” He noted that the iPhone and iPod touch are players in the netbook-type market, and fulfill many of its features and functions. He promised, “If we find a way where we can deliver an innovative product that really makes a contribution, then we will do that and we have some interesting ideas in the space.” This is impressive–a company studying the marketplace, and deciding whether to market a product based on its “greatness” and value to the customer. That’s quite a bit of restraint, especially compared to other companies who simply want to expand, expand, expand. Read the conference call transcript.

I can’t wait to see what type of building Apple’s architects will design for the future Halsted Street store in Chicago. It’s an isoseles triangle, with a couple of very sharp corners. Get these dimensions: a north and east face of 212 feet, and a southwest face of 313 feet. Even with some slight reductions for sidewalks, green space and landscaping, these are some huge figures for a single building retail store. It would make sense for the main door to be on the North Clybourn Avenue side, since that would provide the most impressive interior view and movement space for visitors. Naturally, the store will be two-stories, to help provide space for a sufficiently-large Genius Bar and training areas. What do you do with those other faces? You make one of them all-glass to provide some panorama for visitors, and you make one of them stone or stainless steel to broadcast the brand to passing vehicles and pedestrians. Maybe something along the lines of Sanlitun?

I’ve ranted about Tivo here many times, mostly saying that Tivo just doesn’t understand its market, its customers or its technology. If only a company like Apple would take it over! If you want an example of those complaints, take a look at the companies latest ratings report (pdf), which are so impenetrable as to be meaningless. The report itself is formatted so badly, written so poorly, and the numbers so poorly explained that it’s easy to see why Tivo went so long without a profit. Who creates a document with 1/8th-inch borders? Who uses incomplete sentences to explain statistics? And what the heck is Juenger explaining at the top of page three? They still have no clue what their customers want in a device, and from this report, it’s clear they don’t know the significance of–or can’t easily explain–why their customers are watching TV.

In the advertising battle between Apple and Microsoft, I surrender to the enemy. Unable to attack Apple on coolness, Microsoft has now launched a hardware advertising campaign that points out that Apple gear is more expensive. I agree–without asking why Microsoft is running hardware ads in the first place. Aren’t they a software company? Are H-P and Dell so ineffective in their advertising that Microsoft has to help? Well…anyway. I agree that the cost of purchasing a Macintosh is usually higher than buying a Dell. But, even in this time of economic stress, if only cost were the only component of a purchase decision. It’s not. And I won’t list all my components here–again. At this point, I’m just enjoying the advertising that is being produced, and watching all the reaction. That’s almost as enjoyable as using my Mac.

Well, Microsoft is at it again. After falling down and scraping their knees with the “Seinfeld” TV commercials, their ad agency has now come up with with a “Laptop Hunters” series of commercials. In the first of the series, a young woman is promised $1,000 to buy the laptop of her dreams–and she visits the Third Street Promenade Apple store (shown only from the outside and the location isn’t identified) to discover that there is just one laptop under $1,000. She comes out of the store, laments the small 13-inch screen, jumps in her car and heads off to Best Buy. While inside (the camera follows her inside this time), she discovers row upon row of various brands, all running Windows. Finally, an anonymous hand appears on the right side of the screen with ten $100 bills and hands them to the young lady, who is giddy with delight. I’m sure the message is supposed to be, “Windows-based laptops come in all sorts of configurations and designs, and some are available for less than $1,000.” However, in reality, the TV commercial is really saying, “If you set an arbitrary limit of $1,000 on the price of a computer, and promise to give someone $1,000 to buy it (and keep any change), they’ll buy the cheapest damn thing they can find and be happy about it.” I think we knew that all along, right? Update: Several bloggers have responded to the TV commercial, noting the woman is a paid union actress, and that there is an irregularity with her visit to the store. That is, a balding man with a camera is in nearly the same walking position as she enters the store, and when she leaves the store. The man’s presence indicates the actress did not actually enter the Apple store, but simply walked towards the front door, turned around and walked away from the door. Search the Web for the video—the link I have is dead.

Palm intends to announce its new Pre smartphone in June, hoping to take advantage of the thousands of 2-year iPhone contracts that will start expiring then. I guess that’s a smart move. Elevation Partners (EP) is one of Palm’s private equity partners, buying $100 million in Palm shares last December. Then EP partner Roger McNamee reminded a Bloomberg News reporter last week of the iPhone contract expiration and the Palm Pre introduction. Of the expiring iPhone owners, he said, “Not one of those people will still be using an iPhone a month later.” Pretty brash. Apparently Palm has taken a look at McNamee’s brag, did the math, and made a formal retraction in an SEC document. Palm issued a statement saying, “The statement in the second paragraph of the article that ‘not one’ person who bought an Apple Inc. iPhone on the first shipment date ‘will still be using an iPhone a month’ after the two-year anniversary of that day is an exaggerated prediction of consumer behavior pattern and is withdrawn.” Oops! And then today’s announcement–Palm will be selling stock to help raise $100 million just so it can launch the Pre. In doing so, they offered EP an increased stake in the company, up to 33%. So it’s pretty obvious they’ve mortgaged the business for the Pre intro, betting heavily that it will take the company forward.

You might think that Apple’s products just show up at the stores and are sold. Well, in fact, there’s a ton of things going on to get them onto your desk. Robert Scoble is touring China to get a better understanding of its participation in the product cycle, and he interviewed Liam Casey, an relocated Irish businessman who runs PCH, a supply chain management company. If you thought conceiving, designing, manufacturing, packaging and shipping a brand new product was complicated, wait until you hear what his company does–fascinating stuff. He must be making a fortune, acting as a complete intermediary between product creators and China’s many resources. Maybe most interesting is that Casey says China used to be manufacturing only. Now they’ve moved into all the other positions, including design and fulfillment. Check out the 16-minute video.

The 1 Tb Time Capsule is selling for $112 below its $499 price on Amazon.com. It’s an absolutely fantastic device, offering wireless connections, transparent back-up via Time Machine and a network hub. The price drop seems to signal an upcoming model upgrade. But even so, you can’t go wrong buying one of these neat devices.