Mobile carriers to attack Apple's margins?

When I researched replacing a stolen iPhone I was a bit surprised to learn that AT&T offers high value (corporate?) accounts a contract extension and subsidized iPhone upgrade as frequently as every 12 months. I did know that even a non-elite account are often eligible for subsidized iPhones (and contract extensions) after 18 months; 6 months ahead of the official end of contract.

This is surprising because AT&T probably pays Apple something like $550 for a 4S with a contract-price of $300 4S [1]. (I'd have to pay $750 were I to buy the same phone without a contract). Assuming AT&T gets a margin of $40 a month from each iPhone customer, it would take 6-7 months to start making money on the deal -- and a yearly subsidy means only five months of profit. (Customers who don't upgrade their phones on contract termination, but who stay with the AT&T's pricy plans, are pure profit. Carriers probably have rude nicknames for them.)

So why does AT&T offer this early renewal option at the same time that they're hiking upgrade fees (from $20 to $40 recently), SMS fees, and capping data on "unlimited" plans -- even as Apple kneecaps them with iMessage and FaceTime?

Presumably because, until recently, they thought they didn't have a choice. If AT&T reduced their subsidies, Verizon would take their customers. That's how competition works. The only way to escape this trap is to collude with competitors, so everyone agrees to confront Apple at the same time.

Collusion is, of course, illegal. I assume there are ways to do it though - certainly airlines seem to manage it. Signaling intent by coordinated media leaks for example (emphases mine) ....

Apple analyst raises estimated EPS 39%, downgrades stock - Apple 2.0 - Fortune Tech

The commentary by wireless operators is likely to be decidedly more firm in how they plan to continue to hold back the rising phone upgrade rates that are hurting their margins. Even weak operators like Sprint, which has a large contractual commitment with Apple, will likely experience a decline in iPhone sales based in part on changes to its upgrade policies last year. They will not be alone as we expect a similar trend at Verizon, Deutsche Telekom, Vodafone, America Movil and Telefonica, to name a few. In the United States, we expect iPhone sales to decline 4 million sequentially to 9 million with the largest impact coming from AT&T, Apple's largest customer.

Coordinated price increases are a tricky business, but clearly the carriers are desperate. Since Google's Android margins are almost zero, the carriers can't extract much money from them. They must be hoping that Microsoft/Nokia will save them, in which case I wonder if they'll offer Lumia contract upgrades before iPhone contract upgrades.

It's going to be interesting to see how this plays out, and how this strategy fits with AT&T's newly less restrictive unlock policy (aligns with Verizon). AT&T is making it curiously appealing for iPhone customers to move somewhere, anywhere, else.

Of course Apple has options too. They could respond by promoting pay-go options and cutting the cost of an unlocked iPhone to, say, $600. In that case, many of us would do what smart Europeans do -- buy the device outright and pay much less in monthly fees.

A dangerous road ...

See also:

• Apple's subsidy makes iPhone a nightmare for carriers - Feb. 8, 2012

[1] I am making these numbers up using some half-educated guesses. If you know some real numbers send them on! I couldn't find any, it's highly proprietary information of course.

The Modern Firm - a review

I like to read management books years after they're popular, not least for the unintended humor.

In 2004, for example, John Roberts' ($6 used, including shipping) used Nokia and BP as shining examples of corporate excellence, but mentioned Apple only as a company led astray by a CEO's enthusiam -- for the Newton.

Obviously things look different now. BP's fast moving culture led to the Deepwater Horizon spill and Nokia's pride blinded them to the Doom of Cupertino.

Of course if that's all there was to Roberts' book, I wouldn't be writing about it now. Yes, like all business books from The Prince to the latest fad, there's a healthy helping of CEO sychophancy in addition to the usual misguided analyses of the gem of the moment. Happily though, there's also a solid review of the history of corporate economics.

It's the economic history that's worth the $6. In particular, Chapter 3 on the "Nature and Purpose of the Firm" alone is worth the (used) price of admission. From Smith to Coase to Akerlof and information asymmetry Roberts ties together themes I've been pecking at for years.

Economic models aside, what else is interesting in the book? After a decade years of participant observation of the mysterious Peoples of the Firm I did find a few reasons to read the later chapters. Nokia is a great lesson of a corporation that did a lot of things, maybe most things, right -- and yet still got clobbered. It's worth remembering that sometimes stuff happens. If Steve Jobs had stayed at Disney Nokia might still be great. I recommend reading the chapters on "motivation", exploitation and exploration, and organizational structure to better understand why CEOs follow consulting company recommendations. These chapters can also help you catch the warning signs that you're in a dying division.

It's a good enough book, not least because of the quaint hand drawn diagrams, but there's much more to be told in books to come. 21st century corporations aren't really the kinds of machines Roberts dreams of -- they're more like feudal kingdoms or ecosystems rife with agendas and conspiracies (and now, of course, now they're Persons). Perhaps for reasons of self-preservation, and the timing of the book, Roberts steers clear of corrosive impact of winner-take-all executive compensation (watch for problems to come at Apple). He barely mentions China (2004 is a long time ago) and the role of economic geography and innovation clusters. There's nothing about how corporations use finance as weapon, or about regulatory capture, or the role of talent. Unsurprisingly, he's not interested in the corporation as an ant-hill like emergent entity.

The story of the 21st century corporation is yet to be told. I wonder if we'll have to wait for a (sentient) Corporation to write its own story.

See also:

• Why quality collapsed in the bubble years: Akerlof and the last good toaster (information asymmetry - Akerlof - 3/2012)
• How big should financial firms be? 3/2009
• Why do corporations (firms) exist?
• Ants, corporations and the great stagnation 12/2011
• Emergent computation -- the thinking world (Nature) 1/2004
• Speculation: The corporate ecosystem and American stasis 11/2010
• Self sustaining entities: corporations and the Spanish Inquisition 6/2006
• The Corporation - what next? 8/2010
• Canopy Economics 5/2004
• Beyond the first cause: Deepwater Horizon and the publicly traded company 6/2010
• Troubled capitalism: The corporate entity 8/2010
• The corporation as psychopath 5/2004
• Wanted: examples of publicly traded companies with accounting solutions that support internal collaborative projects 1/2008
• The American corporation and the centrally planned economies of the soviet empire 3/2008 - "Corporation as a Command Economy" DeLong.
• Llamas and my stegosaurus: Artificial Persons

Thinking about autism

There is truth here  ...

The Autism Wars - NYTimes.com

...The term has become so diffuse in the public mind that people start to see it as a fad,” said Emily Willingham, who is a co-editor of “The Thinking Person’s Guide to Autism.” “If we could identify individual needs based on specific gaps, instead of considering autism itself as a disorder, that would be preferable. We all have our gaps that need work.”...

Practically speaking, however, it will take years to separate services from labels -- even when the label are not terribly useful. The legal and regulatory framework is rigid by design.

Why did AT&T end its iPhone eternal carrier-lock program?

AT&T is ending it's post-contract carrier-lock program.

This is unexpected good news for current AT&T iPhone customers. Our used iPhones will become more valuable, particularly in the overseas market. It will be even simpler to use cost-effective services like H2O Wireless. The value and price of a used iPhone should increase, though it never fell as much as I'd expected (perhaps because the overseas device demand remained high despite AT&T's carrier-lock).

It's bad news for the unlocking industry, though they will still have work to do. It will also decrease Apple's sales of its $700+ unlocked devices.

It's mixed news for AT&T. More customers will do as we have, handing old iPhones off to our kids (not to bring to high school though!) with H20 Wireless SIMs rather than paying AT&T's high family plan texting and data fees. That will reduce AT&T revenue, but, on the other hand, AT&T wasn't earning any friends with their unusually restrictive policies. Macintouch reader reports have been aflame with posts by irate customers newly discovering that the phone they'd purchased for by contract and fee still belonged to AT&T. I'd sent my own letters off to a senator and the FCC. I've also wondered if a creative lawyer might decide that post-contract carrier locking was a form of theft.

The policy wasn't earning Apple any friends either, since AT&T routinely shifted blame to Apple. (Since Verizon and Sprint have had much less restrictive policies few believed AT&T.)

So why did AT&T, a carrier desperately seeking fees to offset the end of SMS, cave now? Did the timing have anything to do with Tim Cook's forcing Apple to unlock a single customer's iPhone two weeks ago? Did AT&T jump, or were they pushed?

I think, even though the decision is somewhat in AT&T's interests, that they were pushed. Pushed by Apple, pushed by the FCC, pushed by US Senators, and, recently, pushed by the press. When sites like Macintouch and mainstream blogs start to figure things out, the NYT is not far behind [2].

I'll try unlocking our 3 older devices in a few weeks and I'll post what I learn on tech.kateva.org.

[1] Even as Apple enables iMessage on data and FaceTime on WiFi for all iOS devices. Sometimes I wonder if Cook despises AT&T.
[2] Marginal stories like this one take years to get from geek and specialist blogs to the NYT. Bigger issue stories tend to break everywhere, not least starting with the NYT.

Update 8/31/2012: A bit late, but after 3 unlocks I write a summary post.

Why we tolerate Facebook, but despise Google

Google is dead to us. Dead to we who admired, even liked, the Google of Schmidt and Brin.

I read Google's blogs, but they bore me. I use Google services every hour of the waking day, but sadly. Inside Google, morale is poor. At a meeting of data geeks, where once Google ruled, no-one speaks their name. Dying Yahoo gets more love. Hearts yearn for broken old Microsoft.

Why is this, some wonder? Is Google really more evil than Exxon or Facebook? I don't love Apple, but I buy their stuff willingly. I use Facebook, even though I'd never sell it to anyone.

Is it merely Google's hypocrisy?

It's more than hypocrisy.

We trusted Google. It wasn't just marketing, Google's actions were different from other public companies. That's why we gave Google control of our email, why we used Google's search tools, why I signed up for Blogger, why, even a year ago, when I should have known better, I let Google manage my net identity.

We were wrong. We feel betrayed.

Google made me feel stupid.

That's why we despise Google.

See also:

• Why I left Google - James Whittaker
• This is why Google is losing the future — GigaOm
• The Case Against Google - Honan
• Google, Facebook working to undermine Do Not Track privacy protections - Dailgers
• Gordon's Notes: I deleted my Google G+ Profile

Side-effect of the iOS in-app purchase model - the reviews are worthless

I haven't seen this mentioned elsewhere, so I'll get it on the record here.

Prior to the introduction of in-app purchases there was a difference between reviews of "free" (ad-supported) apps and honest apps. Reviews of free apps were worthless; a mix of fly-by reviews and scan reviews paid for by app revenue. Reviews of honest, pay for what you get, apps were useful. It was relatively costly to pay for a large number of favorable reviews.

With in-app purchasing freemium model apps though, the reviews ad-supported app quality - worth nothing.

Why doesn't the world's richest company make better software?

People who make their money on selling shares claim Apple stock will rise ...

Apple expected to become world's first trillion-dollar company by 2014 

... Shares of Apple have been projected to reach $1,000 in calendar year 2014, which would give the company a market capitalization of about a trillion dollars...

Maybe they're right, though similar things were once said of Microsoft -- and probably Hughes in its heyday. Certainly I cannot remember a company like Steve Jobs' Apple.

Which brings me to a puzzle. With all of its vast wealth, why isn't Apple's product quality better?

Over the past few weeks, for example, I've spent far too many hours managing quality problems in OS X Lion, iMovie, Aperture, iCloud and Time Capsule. Not to mention iWork.

Apple's software quality isn't necessarily worse than Microsoft or Adobe's quality, but it's not much better. So why don't they produce better quality products? It's clearly not a matter of money. Perhaps more importantly, will they ever pay a price for their poor quality?

I remember when Dell's product quality fell. It was a few years before their share price declined ...

Weird moments in tech - what's happening to home video and photography?

In the past few weeks I've been fighting a two front software war. On the one hand, iPhoto 8 and Aperture 3, on the other hand digitizing and managing our videos of our family.

It's been a tough slog. I expected trouble with the video editing, but I didn't realize how much trouble I'd have following Apple's advice to "prosumer" photographers. The migration from Aperture to iPhoto is fraught with bugs and bizarre pitfalls. (For example, a cryptic import option mysteriously determines the fate of iPhoto image titles.)

These problems aren't hard to find, nor are they hard to fix. In some cases simple documentation would do the trick. So why aren't these problems fixed? Why aren't Apple's Discussion forums full of complaints? (They don't seem to delete those as aggressively as they once did.)

I have begun to suspect things are quiet because all but a few hard core geeks have given up. Perhaps the software doesn't get fixed because hardly anyone uses it.

So if Aperture and iPhoto are so troublesome, what's happening to those millions of photographs and videos shared every day?

I suspect they simply vanish from memory. My generation had photo albums. Generations to come may have nothing ...

The world has people like this: Ngozi Okonjo-Iweala and the World Bank

Salmon was pissed that Summers, an ultra-wealthy beneficiary of government service, was considered a candidate for the World Bank. He preferred another intellectual superstar, Nigeria's Ngozi Okonjo-Iweala. In the end Obama nominated the well regarded Kim John Kim of Dartmouth College.

Kim seems a great choice, but I want to share Ngozi's story as quoted by Samon. I remember Biafra ...

Larry Summers, the revolving door, and the World Bank | Felix Salmon

... From 1967 to ’70, Nigeria fought a war: the Nigeria-Biafra war. And in the middle of that war, I was 14 years old… We were on the Biafran side. And we were down to eating one meal a day, running from place to place, but wherever we could help we did. At a certain point in time, in 1969, things were really bad. We were down to almost nothing in terms of a meal a day. People, children were dying of kwashiorkor. I’m sure some of you who are not so young will remember those pictures. Well, I was in the middle of it. In the midst of all this, my mother fell ill with a stomach ailment for two or three days. We thought she was going to die. My father was not there. He was in the army. So I was the oldest person in the house. My sister fell very ill with malaria. She was three years old and I was 15. And she had such a high fever. We tried everything. It didn’t look like it was going to work.

Until we heard that 10 kilometers away there was a doctor, who was able … who was giving … looking at people and giving them meds. Now I put my sister on my back, burning, and I walked 10 kilometers with her strapped on my back. It was really hot. I was very hungry. I was scared because I knew her life depended on my getting to this woman. We heard there was a woman doctor who was treating people. I walked 10 kilometers, putting one foot in front of the other. I got there and I saw huge crowds. Almost a thousand people were there, trying to break down the door. She was doing this in a church. How was I going to get in? I had to crawl in between the legs of these people with my sister strapped on my back, find a way to a window. And while they were trying to break down the door, I climbed in through the window, and jumped in. This woman told me it was in the nick of time. By the time we jumped into that hall, she was barely moving. She gave a shot of her chloroquine, what I learned was the chloroquine, then gave her some, it must have been a re-hydration, and some other therapies, and put us in a corner. In about two to three hours, she started to move. And then, they toweled her down because she started sweating, which was a good sign. And then my sister woke up. And about five or six hours later, she said we could go home. I strapped her on my back. I walked the 10 kilometers back and it was the shortest walk I ever had. I was so happy that my sister was alive. Today, she’s 41 years old, a mother of three, and she’s a physician saving other lives...

The world has people like this.

Liberals and conservatives - it's in our programming

It helps if you think of humans as biological robots with varying programming ...

Politics, Odors and Soap - Kristof - NYTimes.com

... “The Righteous Mind,” by Jonathan Haidt, a University of Virginia psychology professor, argues that, for liberals, morality is largely a matter of three values: caring for the weak, fairness and liberty. Conservatives share those concerns (although they think of fairness and liberty differently) and add three others: loyalty, respect for authority and sanctity...

It has some face validity; it certainly fits my own values (hint - 'respect for authority' is not one of them, which is a bit of a disadvantage in corporate and military settings). I don't think it captures the full difference however; conservatives [1] and liberals have very different attitudes towards the (non-genetically related) weak. Perhaps in conservatives of all colors, cultures, times, and places loyalty is tied to notions of tribe (race) and family. The unrelated weak are a distant abstraction.

It also doesn't fully explain the historical paranoia of the American right (peaking again) in a whitewater world. For that we need to look at responses to novelty as well as to threats to power, tribe, and authority.

The model isn't complete then, but it's useful. It's easier to live with America's conservatives if we understand it's not their fault. Liberals and conservatives just have different operating systems; politics is our essential interface.

[1] So are libertarians a form of conservative or a third branch? They are less interested in caring for the weak than many conservatives.

Macintosh technology 2000-2003

Just for fun. It turned this up while sorting through some old photos. I took the picture when I was discarding some obsolete gear. Note the SCSI to ethernet adapter!

SCSI was terrible.

Note how compact the MacBook 165 was. It was roughly the size of the plastic white MacBook, though heavier and with a lower resolution gray scale screen. The PowerBook Duo was comparable to the modern MacBook Air.

Victims of a mass murderer

A US Army sergeant murders16 men, women and children -- and all we hear about is his personal hardship.

This would be enlightened progress -- if Americans were routinely sympathetic to the stresses of adult mass murderers. Alas, I haven't noticed that. In Texas, for example, even mentally retarded or psychotic people are executed for murder.

It's getting so bad that even American journalists are starting to notice. Helpfully, Al Jazeera provides a corrective ...

No one asked their names | Al Jazeera Blogs 

...The dead:
Mohamed Dawood son of Abdullah
Khudaydad son of Mohamed Juma
Nazar Mohamed
Payendo
Robeena
Shatarina daughter of Sultan Mohamed
Zahra daughter of Abdul Hamid
Nazia daughter of Dost Mohamed
Masooma daughter of Mohamed Wazir
Farida daughter of Mohamed Wazir
Palwasha daughter of Mohamed Wazir
Nabia daughter of Mohamed Wazir
Esmatullah daughter of Mohamed Wazir
Faizullah son of Mohamed Wazir
Essa Mohamed son of Mohamed Hussain
Akhtar Mohamed son of Murrad Ali

The wounded:
Haji Mohamed Naim son of Haji Sakhawat
Mohamed Sediq son of Mohamed Naim
Parween
Rafiullah
Zardana
Zulheja

Medicine 2020: Integrative Personal Omics (iPOP) identifies RSV triggered onset of Type II Diabetes

Speaking as a physician, and as someone who was involved in a genomics project two years ago, I find this astounding. It's a snapshot of Medicine 2020, or perhaps Medicine 2030 - with a slice of Big (BIG) Data on the side. Notice the project had one subject (the lead researcher) and 40 collaborators ...

Examining His Own Body, Stanford Geneticist Stops Diabetes in Its Tracks - ScienceNOW  

... Over a 14-month period, the molecular geneticist at Stanford University in Palo Alto, California, analyzed his blood 20 different times to pluck out a wide variety of biochemical data depicting the status of his body's immune system, metabolism, and gene activity. In today's issue of Cell, Snyder and a team of 40 other researchers present the results ... an integrative personal omics profile (iPOP) ... genomics (study of one's DNA), metabolomics (study of metabolism), and proteomics (study of proteins)... 

... Snyder, now 56, says he began the study 2 years ago because of a slew of technological advances that make it feasible to view the working of the body more intimately than ever before. "The way we're practicing medicine now seems woefully inadequate," he says. "When you go to the doctor's office and they do a blood test, they typically measure no more than 20 things. With the technology out there now, we feel you should be able to measure thousands if not tens of thousands if not ultimately millions of things. That would be a much clearer picture of what's going on." 

... Snyder had a cold at the first blood draw, which allowed the researchers to track how a rhinovirus infection alters the human body in perhaps more detail than ever before. The initial sequencing of his genome had also showed that he had an increased risk for type 2 diabetes ... later became infected with respiratory syncytial virus, and his group saw that a sharp rise in glucose levels followed almost immediately... 

A physician later diagnosed Snyder with type 2 diabetes, leading him to change his diet and increase his exercise. It took 6 months for his glucose levels to return to normal...

The serendipity of capturing the evolution of type II DM resembles many 'happy accidents' in medical history. This will energize an already very active research program on RSV and DM II. Vaccine development for DM II susceptible adults will become much more interesting, and of course there will be a need to closely follow children who develop RSV infection.

There will be a lot more like this. It's potentially Nobel class work.

Whatever happened to the Fuel Cell?

In November of 2001 British Telecomunications published a white paper prepared by two futurists - Ian Pearson and Ian Neild. It's a bit hard to find online now, but there's an html version on ariska.org and the original PDF here. I came across it while running one of my custom google searches across my identity archives.

The two Ians are still in business, but I hope they're a bit more cautious these days. Their 2001 forecasts were a bit ... aggressive. The ones they got right were mostly prosaic - mostly gene sequencing, basic demographics, and internet growth.  They missed the rise of China and were oddly too optimistic about mobile internet access.

Otherwise they were way off. In particular, they were absurdly optimistic about the rise of the AI. It's interesting to look at how far off. For example:

Chat show hosted by robot  2003 
Confessions to AI priest   2004 
AI teachers in school      2004 
Computers that write most of their own software  2005 
Domestic appliances with personality and talking head interface 2007 
AI students 2007 
Highest earning celebrity is synthetic 2010 
AI houses which react to occupants 2010 
25 % of TV celebrities synthetic 2010 
Computer agents start being thought of as colleagues instead of 
tools 2013 
Direct electronic pleasure production 2010 
Online surgeries dominate first line medical care 2010 
Orgasm by email 2010 
Quiz shows screen for implant technologies 2010 
Artificial senses, sensors directly stimulating nerves 2012 
Some implants seen as status symbols 2012...

It's a long list. I kept it because in 2001 it was fun but preposterous. I like to think it was prepared at the local pub with a dartboard and a stack of science fiction novels; I hope British Telecomm published it to confuse their enemies. (It makes my own list of failed predictions seems absurdly prescient. Maybe BT should be paying me.)

One of their big misses is, however, interesting for other reasons ...

... Home fuel cell based 7kW generator 2001...

I remember fuel cells. It wasn't only that we were supposed to have them in our homes. They were supposed to power our hydrogen cars; pop magazines had major articles about Canada's BC Based fuel cell industry. Toshiba was a year away, once upon a time, from methanol fuel cells for laptops.

Obviously, none of that happened. Instead fuel cells are showing up in data centers -- and that's supposed to be news.

So why did the Fuel Cell future fail? Ben Wiens, who worked at that BC based fuel cell company, has a good technical description...

A few years ago it looked like micro fuel cells would soon be powering many portable electronic products. But this has not come to pass. One issue is that batteries have become much more powerful, and electronic devices smaller. Also, it has been hard to fit the fuel cell into the same thin profile of the battery. Another issue is that there is a problem with certain fuels being transported by passengers on aircraft. There are still some technical issues to be solved. The present price of fuel cells is higher than batteries. In my opinion the reason why micro fuel cells haven't penetrated the market however has nothing to do with the above factors....

... Fuel cells produce electricity. This is not the desired form of energy for transportation. The electricity must be converted into mechanical power using an electric motor. The Otto or Diesel cycle produces the required mechanical power directly. This gives them an advantage compared to fuel cell powered automobiles.

Presently Otto and Diesel cycle engines seem to be able to comply with extremely stringent pollution regulations, are inexpensive to produce, produce reasonable fuel economy, and use readily available liquid fuels. Fuel cell vehicles have a much greater chance of being accepted however in the future when fuel prices are higher and liquid fossil fuels are in short supply. However fuel cell vehicles will then be competing with electric vehicles which will be cheaper to operate but have problems with recharging...

Wiens article is the best I can find. Which brings up the real point of this post. Why hasn't there been more journalism on what happened to the fuel cell? Doesn't a failed revolution deserve a bit of an obituary? The rise and fall the Fuel Cell, and associated (extreme) hype and post-collapse silence, would make a great cautionary tale. Reading Wiens' summary, it seems as though a few wee issues in thermodynamics and hydrogen production were overlooked. Isn't it worth understanding why these things were missed? Aren't their lessons there that would serve us well now, as the rationalists among us consider our carbon-constrained energy options?

Journalists, where are you?

Escape from North Korea's Camp 14

Life in the empire of the Kims:

How one man escaped from a North Korean prison camp | Books | The Guardian

... The South Korean government estimates there are about 154,000 prisoners in North Korea's labour camps, while the US state department puts the number as high as 200,000. The biggest is 31 miles long and 25 miles wide, an area larger than the city of Los Angeles. Numbers 15 and 18 have re-education zones where detainees receive remedial instruction in the teachings of Kim Jong-il and Kim Il-sung, and are sometimes released. The remaining camps are "complete control districts" where "irredeemables" are worked to death...

... One day, Shin joined his mother at work, planting rice. When she fell behind, a guard made her kneel in the hot sun with her arms in the air until she passed out...

.. in June 1989, Shin's teacher, a guard who wore a uniform and a pistol on his hip, sprang a surprise search of the six-year-olds. When it was over, he held five kernels of corn. They all belonged to a slight girl Shin remembers as exceptionally pretty. The teacher ordered the girl to the front of the class and told her to kneel. Swinging his wooden pointer, he struck her on the head again and again. As Shin and his classmates watched in silence, lumps puffed up on her skull, blood leaked from her nose and she toppled over on to the concrete floor. Shin and his classmates carried her home. Later that night, she died...

... Trust among friends was poisoned by constant competition. Trying to win extra food rations, children told guards what their neighbours were eating, wearing and saying...

... On the morning after he betrayed his mother and brother, uniformed men came to the schoolyard for Shin. He was handcuffed, blindfolded and driven in silence to an underground prison...

... chief's lieutenants pulled off Shin's clothes and trussed him up. When they were finished, his body formed a U, his face and feet toward the ceiling, his bare back toward the floor. The chief interrogator shouted more questions. A tub of burning charcoal was dragged beneath Shin, then the winch lowered towards the flames. Crazed with pain and smelling his burning flesh, Shin twisted away. One of the guards grabbed a hook and pierced the boy in the abdomen, holding him over the fire until he lost consciousness....

... Uncle nursed Shin, rubbing salty cabbage soup into his wounds as a disinfectant and massaging Shin's arms and legs so his muscles would not atrophy. "Kid, you have a lot of days to live," Uncle said. "They say the sun shines even on mouse holes."...

... The new teacher sometimes sneaked food to Shin. He also assigned him less arduous work and stopped the bullying. Shin put on some weight. The burns healed. Why the new teacher made the effort, Shin never knew...

... In the summer of 2004, while he was carrying one of these cast-iron machines, it slipped and broke beyond repair. Sewing machines were considered more valuable than prisoners: the chief foreman grabbed Shin's right hand and hacked off his middle finger just above the first knuckle...

... In December 2004, Shin began thinking about escape. Park's spirit, his dignity and his incendiary information gave Shin a way to dream about the future. He suddenly understood where he was and what he was missing. Camp 14 was no longer home; it was a cage. And Shin now had a well-travelled friend to help him get out...

... Without hesitation, Shin crawled over his friend's body. He was nearly through when his legs slipped off Park's torso and came into contact with the wire....

... Shallow and frozen, the river here was about a hundred yards wide. He began to walk. Halfway across, he broke through and icy water soaked his shoes. He crawled the rest of the way to China.

Within two years, he was in South Korea. Within four, he was living in southern California, an ambassador for Liberty in North Korea (LiNK), an American human rights group.

His name is now Shin Dong-hyuk. His overall physical health is excellent. His body, though, is a roadmap of the hardships of growing up in a labour camp that the North Korean government insists does not exist. Stunted by malnutrition, he is short and slight – 5ft 6in and about 120lb (8.5 stone). His arms are bowed from childhood labour. His lower back and buttocks are covered with scars. His ankles are disfigured by shackles. His right middle finger is missing. His shins are mutilated by burns from the fence that failed to keep him inside Camp 14.

I don't generally think that Hell is a good idea, but it is tempting to make an exception for the Kims.

North Korea is China's great shame. In a just world, for the sin of North Korea alone, China's leaders would join Dick Cheney in prison.

See also:

• You too can visit North Korea 1/2010
• The harshness of mortal life - hidden refugees from North Korea 3/2005
• North Korea 2/2011