Stross dissects cell phone schemes: lessons in pricing strategy

In an ideal world, mobile phone contracts and pricing would be freely accessible. In that world a few people would figure out the best deals, and would publicize them on ad supported web sites.

In that utopia phone companies wouldn't be able to pay pricing games.

In the real world mobile phone contracts are top secret. I tried to get just one from Sprint a year ago -- not possible.

Cell phone companies also change their new plans and pricing schemes every few weeks, so anyone trying to decrypt them will be foiled.

This is what's known as an asymmetric business relationship. They have immense resources to game us, and we can't really play in their league. All we can do is save up our enmity for the phone companies, waiting for the day Google takes 'em down.

In the meantime, geeks like Charles Stross occasionally try to figure out today'sgame played by Vodafone in the UK (where handsets are more switchable than here):

Charlie's Diary: Marketing Musings

... the sweet spot on Vodafone's tariff curve (in the Anytime business packages) seems to be Anytime 500 on a 18 month contract. (By the time you hit Anytime 500 on 12 month contract, costs are beginning to rise; and anything less than Anytime 500 on the 18 month contract is in the "soak the trend-follower" category.)

And there's my second point: 12 month tariffs are weighted on the assumption that you're a trend-follower and may be part of the general customer churn. They invariably have a much higher total cost of ownership than the 18 month tariffs...

... the total cost of a twelve month contract costs nearly 90% of the price of an eighteen month contract. If you take the twelve month contract and stay on it for eighteen months, you'd be paying a whisker under £800. The mark-up for going for a short contract is huge; they're counting on your natural reluctance to be locked in for an extra six months to lead you to pay hugely over the odds.

(Want a twelve month contract? You might as well buy an eighteen month contract — if you decide to switch telco, the break-even point is thirteen months. At that point you might as well buy a new phone, set call divert on your old number, take the old sim out and cut it up so you can't run up any additional charges, and get going: you're still ahead of the game. The system is loaded insofar as it relies on customers fixating on the contract lock-in period and not realizing that they can "buy themselves out" at any point by cutting up a SIM and making a note on their calendar to remind them to close the account when the lock-in expires. And on most people not running the total cost of ownership through a spreasheet before they buy.)..

...The TCO per minute for a phone purchased on the superficially cheap-looking Talk 75 tariff turns out to be two and a half times higher than the TCO per minute for Talk 200, and a ridiculous seven times higher than on Talk 500...

I don't have anywhere near the patience to play this game here, but I think the mid-length contract and mid-range phone ideas might be a good rule of thumb to follow.

John's MacWorld predictions

The TUAW Macworld 2008 Keynote Predictions - The Unofficial Apple Weblog (TUAW) collection is pretty good. Inspired by that list, here's mine:

• Home server: Microsoft's Home Server is a very good idea. Apple can do the same thing incorporating backup (including remote backup), video downloads and media library, and using 10.5 remote access (so it's headless). It will include streaming wireless audio/hd video and come with matching peripherals. I might actually buy this. (After I wrote this I see Christina of TUAW had it too.)
• iPhone 16 GB. Maybe they fix the headphone connector too. I am planning to buy this.
• ultraportable laptop (of course)
• video downloads (of course)
• bluetooth peripherals for iPhone (keyboard, etc)
• Aperture update: they could do this at the upcoming camera show. If Apple doesn't update Aperture in a big way it's toast.
• Way out: Adobe acquisition (per Cringely). (Actually this is more under - weirdest possible surprise)

The only one on this list that's not been widely predicted is the Home media server and, of course, the Adobe acquisition.

The Motorola ROKR and the Apple iPhone

Wired has a must-read summary of the birth of the iPhone.

The Untold Story: How the iPhone Blew Up the Wireless Industry

... It was a late morning in the fall of 2006. Almost a year earlier, Steve Jobs had tasked about 200 of Apple's top engineers with creating the iPhone. Yet here, in Apple's boardroom, it was clear that the prototype was still a disaster...

It's no surprise to read that months before the release date the iPhone was a disaster. My guess is that Apple's taking so long to add my "must have" features because the thing is held together with duct tape and bailing wire. It usually takes at least a year to dig out from a hole like that, so maybe they'll have a stable environment by this summer.

One of the most delicious parts is a sidebar comparing the Motorola ROKR vs. the iPhone

...Apple has created two music phones. The ROKR, made with Motorola in 2005, respected the traditional relationships between manufacturers and carriers. The iPhone, released last summer, completely overturned them....

Supposedly Jobs thought the RAZR was a sign that Motorola could build a good phone. As a RAZR owner, I'm surprised. I thought Jobs was smarter than that.

Anyway, he learned another lesson, and he must have staff who understood that the Motorola RAZR is very ugly software in a pretty shell.

China: the new driver with the 1.4 trillion dollar car

In this month's Atlantic James Fallows writes about China's 1.4 trillion US dollar financial reserves. The management of those reserves played a key role in his 2005 warning of American disaster.

It's a timely review, though he might have mentioned the parallels to Saudi Arabia's foreign reserve accumulations 1970s. The part that caught my attention came towards the end

The $1.4 Trillion Question

....The fair reason for concern is, again, the transparency problem. Twice in the past year, China has in nonfinancial ways demonstrated the ripples that a nontransparent policy creates. Last January, its military intentionally shot down one of its own satellites, filling orbital paths with debris. The exercise greatly alarmed the U.S. military, because of what seemed to be an implied threat to America’s crucial space sensors. For several days, the Chinese government said nothing at all about the test, and nearly a year later, foreign analysts still debate whether it was a deliberate provocation, the result of a misunderstanding, or a freelance effort by the military. In November, China denied a U.S. Navy aircraft carrier, the Kitty Hawk, routine permission to dock in Hong Kong for Thanksgiving, even though many Navy families had gone there for a reunion. In each case, the most ominous aspect is that outsiders could not really be sure what the Chinese leadership had in mind. Were these deliberate taunts or shows of strength? The results of factional feuding within the leadership? Simple miscalculations? In the absence of clear official explanations no one really knew, and many assumed the worst...

Bush's America has not been a paragon of reasoned action. It's reasonable to assume that China, now newly in command of vast financial power, might be similarly impulsive and unpredictable.

No wonder Moody's, a disgraced financial rating agency, whines about the difficulty of assessing risk in the new world. They have a point, even though they're trying to distract attention from their internal corruption.

Bike boxes: if they work, we want them

Three children have hammered my bike commuting habits, but I'll be back one day. In the days when I did commute, I learned the hard way to beware the driver turning right. I was hit at least once in my youth; drivers simply don't see bicyclists waiting by the right curb at a stop light.

The trick was to get out in front. For me that was to the left side of the right lane - nudging into the pedestrian crosswalk. Cars could turn to my right, but I was blocking the front. When the light changed I pulled out fast and then went right, so they could pass me -- but they couldn't avoid seeing me and there was no way to turn right into me.

In Portland two bicyclists died recently, supposedly because they didn't follow that practice (though I find it hard to believe a racer wouldn't do that, so maybe there was more to that story). Now Portland has changed intersections to ensure bicyclists take a visible position:

Portland, Ore., Acts to Protect Cyclists - New York Times:

... By allowing cyclists to wait in front of motorized traffic, the bike boxes are intended chiefly to reduce the risk of “right hook” collisions, the kind most frequently reported in Portland, in which a driver makes a right turn without seeing a cyclist who is in his path. Drivers will not be allowed to pass through the bike box to turn right on a red light, although many right hooks now occur after the light has turned green, when traffic quickly accelerates.

Right hooks were what killed the two cyclists in October, a college student and a bike racer hit by large trucks. The drivers say they did not see them...

I'm not sure how that will work -- drivers will be irritated if they can't turn right. An irritated driver is a dangerous driver. If the experiment does work I hope we adopt it in the Twin Cities.

The two edged sword cuts Maureen Dowd

Ooooh. This is good.

Jon Swift: The Crying of Maureen Dowd

When New York Times reporters walked into their offices last night, people were clustering around one office to watch what they thought they would never see: Maureen Dowd with the unmistakable look of tears in her eyes...

Maureen Dowd long ago traded integrity for popularity; she's a sad demonstration of both wasted talent and the lowly state of the American "elite". Today's Dowd dump is a typically annoying, and intensely personal, rip on Hillary Clinton's ocular discharge.

I had nothing useful to say about the column, but the infamous conservative* writer Jon Swift did a lovely job of sword inversion. Read Dowd first, then read Swift.

* Ok. So with a pen name like "Swift" certain self-descriptions may be suspect.

Update: That was it?!

Hilary is the new Al. I might become a fan ...

EJ Dionne, in praising Obama, makes Clinton more appealing ...

E. J. Dionne Jr. - A Candidacy's Prose and Cons - washingtonpost.com

...There is a certain melancholy in watching Clinton do battle. Obviously aware that the bottom is falling out from under her, she choked up Monday during her last day of campaigning here. By way of proving her tenacity and the depth of her policy knowledge, she has subjected herself to unremitting rounds of questions from voters about every issue from health care to global warming.

Clinton knows her stuff and would pass the most rigorous test available under any "No Policy Left Behind" program for politicians. If we chose a president by examination rather than election, she would win. In Hampton on Sunday night, Maggie Wood Hassan, a prominent state senator, said of Clinton's savvy on health care: "There isn't a single piece of the puzzle she hasn't figured out." True, but voters right now are not thinking about intricate puzzles....

We know Hilary has been been brought low because Gloria Steinem is saying her problems are gender related. (I couldn't make myself read the Steinem article. For Hilary I imagine it adds insult to injury.)

Obama entertains. Hilary is smart, passionate, ambitious, knowledgeable. America is bored. America wants someone fun. Gore Hilary is no fun.

Yes, Hilary is the new Al.

I like Al. I remember what happened the last time America had too many drinks and decided to go for a wild fling with the fun fighter pilot.

I'm starting to get over the pain of "Bush-Clinton-Bush-Clinton". Mind you, that's a huge hurdle, but Bill isn't being much of a factor these days. If Hilary were to change her name to Rodham I could be a supporter. (I liked President Bill Clinton, it's the hereditary aristocracy part I don't care for.)

Ah well, we have two very good Democratic candidates and one wild card who could be anything from disappointing to great. It could be a lot worse. America isn't about to go into rehab, so I'll support whichever Dem the process delivers.

PS. Emily senses the hidden hand of Karl Rove behind the cult of Obama ...

Update 1/9/08: James Fallows has a nice post expanding on this theme. I must be channeling the gestalt!

Irving Kristol and the NYT OpEd conspiracy

James Fallows reveals our plans...

James Fallows (January 07, 2008) - The NYT introduces a wordsmith

... Perhaps this is more proof of a cunning, leftist NYT master plot? Bringing in a conservative who will demonstrate that conservatives have little interesting to say? Inquiring minds want to know. But only time will tell...

We tested the waters with David Brooks. Could we really get away making an articulate but mockable propagandist the NYT spokesperson for the GOP?

It worked; even the GOP was pleased. Perfect. Now for Phase II. Compared to Kristol even Brooks is semi-sentient.

The Trilateral Commission is pleased. Our plan for the rehabilitation of the GOP is proceeding smoothly.

Mormonism in the GOP - a NYT Magazine discussion

Romney, alas, is going down. I really hoped he'd get the nomination, because he would give the GOP the time out of power needed for reform.

He is, after all, running for the party that, has a traditional Christian core. If you believe in a harsh God who gates Paradise, then you care about theological rigor. Mormonism is way beyond the theological tolerance range of conservative Protestantism -- or even less conservative Catholicism. (No-one has dared ask what Pope whatshisname thinks of Mormonism.) From their perspective a vote for Romney is vote for Hell -- only an atheist or Muslim could be worse.

This seems to be hard for many commentators to understand. They assume Romney's vulnerability is based in traditional bigotry. That may be so, but most pundits really don't spend enough time studying theology. I'm as agnostic as they get (functional atheist, philosophical agnostic), but I like studying religion. For religious conservatives, details matter.

Consider the Trinity. Compared to thousand year battles over the relationship of God to the Holy Spirit Mormonism is a whole 'nother kettle of fish.

A sympathetic NYT Magazine article provides us with the an informed rationalist perspective that still sort of misses the point:

Mitt Romney - Mormonism - Mormons - Presidential Election of 2008 - Politics - Elections - New York Times

.... Still, even among those who respect Mormons personally, it is still common to hear Mormonism’s tenets dismissed as ridiculous. This attitude is logically indefensible insofar as Mormonism is being compared with other world religions. There is nothing inherently less plausible about God’s revealing himself to an upstate New York farmer in the early years of the Republic than to the pharaoh’s changeling grandson in ancient Egypt. But what is driving the tendency to discount Joseph Smith’s revelations is not that they seem less reasonable than those of Moses; it is that the book containing them is so new. When it comes to prophecy, antiquity breeds authenticity. Events in the distant past, we tend to think, occurred in sacred, mythic time. Not so revelations received during the presidencies of James Monroe or Andrew Jackson...

Well, yes, to a secular humanist all of these revelations are equally respectable -- but to a fundamentalist believer there's a rather huge difference.

As in an eternity of Hellfire.

That's rather a meaningful distinction!

Emergence in action: Plaxo is an ex-canary

Plaxo's opt out mechanism was broken the other day. I see variations of this all the time, at work and at home.

Everyone has finite resources. Do they put those into sales, marketing, maintaining core services, or making sure "opt out" or "account termination" or "data transfer" or interoperability services are working?

Obviously services that allow customers to leave are the first to go when times get tough. Exit services are the proverbial canary in the coal mine -- they die first. When customers complained about problems leaving AOL, AOL was on the way to the grave.

Nobody has to plan these sorts of emergent behaviors. They're inevitable.

Plaxo is an ex-canary.

Another best analysis of the Iowa outcomes

It's definitely inside baseball humor, but it's great ...

Jon Swift: Iowa Caucus Results Explained

... The biggest loser of all was Hillary Clinton. If she can't win in Iowa, where can she win? In every contested race since 1972 (Bill Clinton ran unopposed in 1996), the winner of the Iowa caucuses for the Democrats has gone on to be elected President, except for 1972, 1976, 1980, 1984, 1988, 1992, 2000 and 2004 when the winner did not go on to be elected President. Iowans have an uncanny ability to predict which Democrat can win in the general election, which means Hillary's campaign may be doomed. Look for members of the party establishment to start looking for another candidate, maybe even going outside the party to someone like McCain who could win both the Republican and Democrat nominations and run on a unity ticket with Mike Bloomberg or Joe Lieberman as his vice president, sparing voters the burden of having to make a hard choice in November. David Broder and his friends are already ecstatic at the prospect....

Was American media coverage always as bad as it is now?

At this rate Hilary is going to earn a sympathy vote from me.

Ok, my real choice is the Dem who will win given the electoral college (not the popular vote or national polls) against either Huckabee or McCain given the entrance of either Bloomberg or Nader. I think anyone would win against Romney or Giuliani and the media so despises Thompson that he won't be a contender.

If we had decent journalists, they'd be setting up electoral college predictions with those matchups so I'd know where to send my money.

Fashionable light bulbs and that darned mercury

Low energy light bulbs are justly praised -- but there's a wee little mercury problem:

...Official advice from the Department of the Environment states that if a low-energy bulb is smashed, the room needs to be vacated for at least 15 minutes.

A vacuum cleaner should not be used to clear up the debris, and care should be taken not to inhale the dust.

Instead, rubber gloves should be used, and the broken bulb put into a sealed plastic bag - which should be taken to the local council for disposal.

Used bulbs are likewise toxic waste.

I've written about this before. The risk for adults is probably very low, but it's infants and children we need answers for. It's quite annoying to have one division of government strongly encouraging adoption (esp. in Canada) and another sending us across the city to a toxic waste dump. In the current state of affairs, the bulbs need prominent toxic waste labels on the packaging.

Where are those darned toxic-but-not-dangerous LED bulds we were promised two years ago?

Andy Olmsted's post-mortem good-bye.

I don't remember reading Andrew Olmstead's posts, but I'm sure I have at various times.

He left a message to be published were he to die in Iraq. It was published today.

Obsidian Wings: Andy Olmsted

...If it turns out a specific number of tears will, in fact, bring me back to life, then by all means, break out the onions...

It's moving.

Treating explosive aggression in special needs adults - a huge placebo effect

A study on Risperdal in special needs adults is being described as showing that Risperdal has no  benefit.

That's interesting, though the drug is approved for use in children with autism, not for the group that was studied. The most interesting result, however, is the incredible placebo effect seen in the study group...

Treating impulsive aggression: HUGE placebo effect is better than Risperdal

... Impulsive and irritable aggression is a big issue in low IQ adults and children. Risperdal, in particular, has been heavily prescribed for this problem over the past ten years...

Drugs Offer No Benefit in Curbing Aggression, Study Finds - New York Times

... The new study tracked 86 adults with low I.Q.’s in community housing in England, Wales and Australia over more than a month of treatment. It found a 79 percent reduction in aggressive behavior among those taking dummy pills, compared with a reduction of 65 percent or less in those taking antipsychotic drugs.

...After a month, people in all three groups had settled down, losing their temper less often and causing less damage when they did. Yet unexpectedly, those in the placebo group improved the most, significantly more so than those on medication....

Holy cow. That's one hell of a placebo effect.

A typical placebo effect should have been around 30% improvement. In that case Risperdal would be looking great today.

In this group the placebo effect is MUCH larger than expected.

If this is born out in f/u studies, we need to figure out how to leverage that. Why was the placebo effect so large? Was it due to a change how peers and caregivers treated the study participants? A synergistic effect between the study participants expectations and behaviors and those of his (most are male) caregivers...

It's hard to get funding to study a placebo effect. Drug companies, obviously, aren't interested. It will take some serious work to get funding to find out why the placebo effect was so successful in this study. If the effect is real, and we can harness it, we can make a huge difference to the lives of many people.

We really need to find out how large this effect is in children.

Summary of Iowa 2008

TP has a good analysis. Here's the GOP side:

Talking Points Memo | Where We Are

...Purely for my own reasons, I would have liked Romney to do better tonight, because I think he'd be a very weak national candidate. Rudy's already toast. Trailing Ron Paul tonight was just a confirmation of that. He's not even relevant...

McCain had a pretty poor night tonight, coming in fourth behind the comatose Fred Thompson. But let's not kid ourselves. Romney took a big blow tonight. And if he can't come back strong in New Hampshire his collapse will be McCain's gain -- not because McCain's on fire or has any money or really is in any kind of strong position by most objective measures. The truth, though, is that there's simply no one left. It ain't Thompson; ain't Rudy. You can't say Huckabee's out of it but put me down with those that just don't think he can overcome the twin hurdles of a) running amongst more moderate and cosmopolitan Republican electorates and b) running against almost the entire GOP establishment. And that leaves you with McCain.

The truth is that the Republican party tonight is in complete disarray. The best financed candidate just fell on his face. Their big winner of the evening is opposed by almost the entire establishment of his party. The frontrunner of recent months is lost down in Florida shakily repeating '9/11' under his breath like a hobo who needs a stiff drink.

McCain's just the only guy left. And that ain't nothing. Because one of them does have to win. And I'd rather see the Dems face Romney than McCain.

My favorite GOP candidate was also Romney. Primarily because I was pretty sure he'd lose, especially after his dismal 'any religion is ok as long as it's Judeo-Mormon-Christian' speech. Also, if he perchance won the election (Americans can do anything), he's probably the least bad of the bad after McCain.

Huckabee is going to play Reagan for all it's worth. I believe Josh Marshall when he says that won't work for him.

So it's McCain. There's much to admire about him, so I'm disappointed that he'll likely be the GOP candidate.

On the Dem side I hope Edwards still has some staying power. I worry that Obama hasn't had nearly enough nasty attacks. The GOP are going to go after him like a ton of bricks. I also worry about his ego. Presidents are never humble, but he could use another ten years of living.

The wild cards are Nader and Bloomberg ...

Open Left: Still No Specifics From AWWMNUUBM

... It would be nice, for once, if the constant drumbeat from Aging Wealthy White Men for National Unity Under Billionaire Media Moguls (AWWMNUUBM for short) decrying polarization, the lack of bi-partisanship and gridlock in Washington would actually provide specifics on what legislation their hated polarization, partisanship and gridlock is blocking. Of course, they won't actually do that, because blaming national problems on vague, undefined concepts like 'polarization' and 'gridlock' is much easier than actually analyzing the contemporary political scene in America...

If it's Obama or Edwards I don't think Nader will do anything. I'm hoping he's truly finished, but the man is a curse that keeps on giving.

Bloomberg would probably stay out if it's McCain vs. Obama. If it were Huckabee vs. Edwards I'm sure he'd run, but in that case he'd kill the GOP and give Edwards a large victory ...