$1,400 iPhone & The Veblen Effect

Christopher Mims: “The launch of a pricey new iPhone has big implications for Apple’s financials, and it also bodes well for Apple’s continued dominance in mobile phones. Here are five reasons for Apple to go big, price-wise:” 1 Halo Effect: “An ultraexpensive edition of the iPhone makes sense as a shot in the arm for the whole brand … 2 Crazy New Tech: A big reason companies have halo products is that they give them a way to test new technologies.” 3 Supply & Demand: “If Apple’s high-end iPhone is aimed at a new segment—people willing to pay more than $1,000 for a phone—Apple can charge whatever it likes to balance supply and demand for the device, rather than worrying about whether increasing the price will hurt its overall market share.”

4 Average Selling Price: “With a phone priced upward of $1,400, Apple would have the opportunity to move the single most important metric on its balance sheet: the average selling price of a new iPhone.” 5 The Veblen Effect: “The final reason a pricey iPhone makes sense is that, paradoxically, the more expensive Apple makes the device, the more people will lust after it. Conspicuous consumption was first described in ‘The Theory of the Leisure Class’ by the economist and sociologist Thorstein Veblen, who singled out products that, contrary to logic, sold better when their prices went up.”

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The Remakery: Fix-It-Yourself Retail

Fast Company: “The British social entrepreneur Sophie Unwin thinks there’s room for a new kind of repair shop with an entirely new business model. The Edinburgh Remakery, her shop in the Scottish capital of Edinburgh, is part thrift shop, part maker space, part repair shop, and part learning center. It doesn’t just repair broken electronics, furniture, or textiles–it teaches customers to fix things themselves. Because the Remakery’s policy is that they always fix your stuff in front of you, the focus shifts from a transactional service to a learning experience.”

“For Unwin, the goal of Remakery is twofold. First, the company helps prevent waste from going to the landfill–a valuable proposition for local governments, since she says they typically spend about $160 per ton of waste … Second, Remade is showing how investing in repair and repair education creates jobs. Unwin believes that given the number of cities and towns in the U.K. and the success of the Edinburgh Remakery so far, there’s the potential to create 8,000 jobs in computer and electronics, furniture, and textile repair education.”

“In 2018, Remade will start a bona fide franchise, where anyone who wants to start up a Remakery will receive branding, templates, consulting time, and training to help with funding, location, recruitment, and business planning. After a launch period of 18 months, new Remakeries will pay 5% of their income back to the larger organization in return for continued support and to remain a part of the network. Unwin hopes to also use Remade to advocate for designing products that are built to last.”

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Aldi Conquers With Cromwell Gin

Business Insider: “The £9.97 Oliver Cromwell London Dry Gin from Aldi won a gold medal at the International Wine and Spirits Competition (IWSC) this week. In doing so, the budget retailer’s gin beat bottles costing up to four times the price in the blind taste test.”

“A spokesperson at the International Spirits Challenge said: “The display of awards achieved by Aldi this year at the International Spirits Challenge was fantastic. They consistently showcased high quality products in the blind tastings, which demonstrates that you don’t have to compromise on price to enjoy great tasting drinks.”

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Is Alcohol a Creative Juicer?

Pacific Standard: “A new study “reports that, while moderate inebriation doesn’t boost your ability to generate innovative ideas, it can help you avoid one major barrier to creative breakthroughs: getting stuck in a mental rut … The study featured 70 young adults between the ages of 19 and 32. They began the experiment by taking one test measuring executive function, and two measuring creative potential: the Remote Associates Test, and the Alternative Uses Task.”

“For the first, they were presented with three unrelated words (such as cottage, blue, and cake) and asked to come up with a fourth word “that provides an unexpected connection between them” (such as cheese). They tried their hand at 10 such sets of words. For the second test, they were given two and a half minutes to come up with creative uses for specific common objects, such as an umbrella or shoe … The key result: Solution rates on the Remote Associates Test were higher among those who had been drinking. There were no significant differences on the Alternative Uses Task.”

“The researchers offer one likely explanation for the divergent results. They note that, in creative problem solving, ‘initial solution attempts (often) get on the wrong track.’ Unable to see or acknowledge that we’ve gotten off course, we often get stuck at this point, fixated on making our initial idea work rather than searching in more productive places. ‘Alcohol may reduce fixation effects by loosening the focus of attention,’ Benedek and his colleagues write.”

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Surprise #1: Google+ Is Most-Loved Network

The Washington Post: “Google+ has topped the American Consumer Satisfaction Index’s 2017 list evaluating how users feel about Internet social media companies … For those who don’t remember the social network or didn’t think it was still around, Google+ was Google’s largely failed attempt to answer the rise of Facebook and Twitter … It didn’t take off for many reasons, including: its complexity, the fact that people were pretty set in their social media ways and Google’s somewhat ham-handed attempts to require people to use it to comment on YouTube.”

“But Google+ did find footing with groups looking to make community pages, and now has an estimated 111 million users, according to Forbes — about one-third of Twitter, or 1/6 of Facebook. It’s continued to work on the product for those customers. And that, at least in terms of customer satisfaction, seems to have paid off.”

This “could indicate that, the smaller or more specialized an audience, the more you can do to focus your network to fit. The survey credits Pinterest’s high ranking, for example, to ‘increasing site efficiency and search technology’ as well as moves to make it easier to shop directly from the site … For Facebook, the right path may not be as clear when looking for direction from 2 billion users. The upshot of the report seems to be that if you want people to be happy on the Internet, you should go niche and really listen to your community.”

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Surprise #2: Microsoft is Leading PC Innovation

Farhad Manjoo: Microsoft “is making the most visionary computers in the industry, if not the best machines, period. In the last two years, while Apple has focused mainly on mobile devices, Microsoft has put out a series of computers that reimagine the future of PCs in thrilling ways … perhaps because it’s way behind Apple, Microsoft’s hardware division is creating products more daring than much of what has been coming out of its rival lately.”

“Under Panos Panay, Microsoft’s Surface chief, the company has given its designers and engineers license to rethink the future of PCs in grand ways — to sit in an empty room, dream big things, and turn those visions into reality … The mind-set has resulted in several shining ideas. For Surface Studio, Microsoft built a brilliant companion device called Surface Dial — a palm-size knob that sits on your drafting-table screen, creating a tactile interface with which to control your computer.”

You can use Dial for basic things like turning up the volume. But in the hands of a designer, it becomes a lovely tool; you can scrub through edits in a video or change your pen color in Photoshop with a turn of the wheel … Dial is one of those interface breakthroughs that we might have once looked to Apple for. Now, it’s Microsoft that’s pushing new modes of computing … it’s unlikely that Microsoft’s PC hardware business will beat Apple’s anytime soon. But anyone who cares about the future of the PC should be thrilled that Apple now faces a serious and creative competitor.”

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Mom & Pop Groceries: A Crisis in Rural America

The New York Times: “R&R Market — the oldest business in Colorado, built by descendants of Spanish conquistadors … is in danger, at the edge of closing just as rural groceries from Maine to California face similar threats to their existence … Across the country, mom-and-pop markets are among the most endangered of small-town businesses … The phenomenon is a ‘crisis’ that is turning America’s breadbaskets into food deserts … erasing a bedrock of local economies just as rural communities face a host of other problems.”

“The market was built in 1857 by José Dario Gallegos … who turned his store into a hub. His descendants have operated it since, filling the shelves with vegetables, locally grown bolita beans and hand-packed chiles.” His great-great-grandson, Felix Romero, and his wife, Claudia “offer food on credit, supply baptisms and funerals, cash checks, issue hunting licenses, pay local taxes. But they are exhausted. And yearning to retire.” However: “Those who want to take on these stores can find it impossible to buy. If you’re poor — and many people in these towns are — and interested in a risky deal, few banks will give you a loan.”

“In recent years, some communities have united to save their grocery. In Walsh, Colo.; Iola, Kan.; and Anita, Iowa, residents rescued their markets by forming cooperatives or public-private partnerships … Here in San Luis, the Romeros are trying to sell their market and six upstairs apartments for $600,000, half of what an appraiser gave as its value … Now, Mr. Romero is making peace with the fact that the shop could pass out of the family under his watch. If it stays open at all.”

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Disney Machine-Learns for Laughs

Quartz: Disney “is using machine learning to assess the audience’s reactions to films based on their facial expressions, it wrote in a new research paper. It uses something called factorized variational auto-encoders, or FVAEs, to predict how a viewer will react to the rest of a film after tracking their facial expressions for a few minutes.”

“The FVAEs learn a set of facial expressions, such as smiles and laughter, from the audience, and then make correlations between audience members to see if a movie is getting laughs or other reactions when it should be—a much more sophisticated version of how Amazon and Netflix make suggestions for new things to buy or watch based on your shopping or viewing history.”

“By placing four infrared cameras and infrared illuminators above a theater screen, the researchers were able to identify 16 million facial landmarks, or expressions, from more than 3,100 theatergoers during 150 screenings of nine Disney movies … the data was then analyzed with a computer. (Before this gets too creepy, Disney isn’t tracking your every move at your local theater. The experiment took place during screenings at one particular 400-seat theater. And audiences likely had to choose to participate.)”

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