Roll Over Johann Gutenberg…

Ray Gustini at The Atlantic with a round-up. Gustini:

Amazon announced Monday that, over the past three months, Kindle book sales outnumbered those of hardcover books for the first time in the company’s history. The announcement comes less than a month after the company slashed the price of its flagship e-book reader from $259 to $189 amidst growing competition from Apple’s iPad. So far, the move seems to have paid off–Amazon CEO Jeff Bezos said Kindle sales have tripled since the price cut.

Charlie Sorrel at Wired:

As reported by my silver-tongued editor Dylan Tweney over on Epicenter [ED: flattery will get you nowhere], this has accelerated in the last month, with Amazon shifting 180 Kindle copies for every 100 hardbacks, and this is due to the price drop which saw the Kindle go from an expensive $260 to an affordable $190. Breaking the magic $200 mark has caused Kindle sales to rocket. Bezos again: “The growth rate of Kindle device unit sales has tripled since we lowered the price from $259 to $189.”

While the “growth rate of unit sales” is far too cryptic a metric to go by (note that the actual sales have not tripled) it shows that people are ready for e-books and e-readers, if they are priced right. It also shows that they completely disregard the big advantage of the paper book: buy it and it is yours. Whereas a Kindle book is pretty much still the property of Amazon, and can be deleted from afar whenever it likes, a paper book can be lent, resold and used to prop up a wobbly table.

The same limitations never held up the iTunes MP3 store, however. And the fact that you can read your Kindle books on almost any platform certainly helps to hide these problems. One thing is certain: with the number of e-book-capable screens we carry around today, it won’t be long before the paperbacks also fall into a minority market.

MG Sielger at TechCrunch:

Amazon also says that it sold three times as many Kindle books in the first half of 2010 as it did in the first half of 2009. The store now has over 630,000 books available for the Kindle. And over 510,000 of those are $9.99 or less — one clear advantage over Apple’s iBookstore, which is more expensive. Plus, Amazon has access to over 1.8 million free, out-of-copyright, pre-1923 books for the device.

Also interesting is that there have been five authors now that have sold over 500,000 Kindle version of their books: Charlaine Harris, Stieg Larsson, Stephenie Meyer, James Patterson, and Nora Roberts.

Earlier this month, Amazon also announced that an updated version its larger DX model with a better screen and a black frame.

All that said, Amazon is going to have a tough battle competing in hardware with the likes of Apple going forward. The Kindle, while great for reading, still offers only a fraction of what the iPad can do (and even Amazon highlights this). And I suspect another Kindle price cut down to $99 may be coming sometime in the next year. If Apple stays at $499 for the iPad, that should be enough to differentiate itself for a while. Amazon is also smart to offer its Kindle software on devices like the iPad, iPhone, and Android phones. This ensure that Amazon’s future in the book business will remain intact whether or not they’re the ones in charge of the hardware.

Also, why is Amazon issuing press releases about these numbers? They’ve famously shied away from saying much about the Kindle sales in the past. Of course, they weren’t the subject of a weekly “iPad is killing Kindle” story in the past.

Chris Morran at The Consumerist

Jared Newman at Technologizer:

I hope book publishers are encouraged, not frightened, by the news. They should be converting books into electronic form faster than ever to capitalize on the e-reader craze. But they might also liken e-books to paperbacks — both are less profitable than hardcovers — by delaying the digital versions to drum up hardcover sales.

Delaying the digital version of books is a bad move because there’s nothing comparable to hardcovers available in digital form. If publishers want to charge more for new releases — and they can with the agency model, which allows several major publishers to set their own e-book prices — that’s fine. But as Amazon’s latest numbers show, Kindle owners are determined to build their e-book libraries, and publishers should do everything they can not to hold those readers back.

Megan McArdle:

I now have an iPad and a Kindle, and while I think the Kindle reader for iPad is terrific, the device itself is too fragile for many uses, and the shinyness of the screen is a serious problem, because I can’t easily use it outside, or even in front of a big window.  I wouldn’t want to have just one or the other.

And ultimately, I’m not sure how much Amazon cares how much profit it makes on the Kindle–the machine is a way to sell more content, not a profit center on its own.  So far, Apple is trying to pull all of its profit out of the device, not the content stream, but I wonder if that will last.  The more powerful Apple gets, the more disenchanted the hard-core tech fans become.  Meanwhile, they’re getting stronger and stronger competition from devices like the Droid, which may push their margins down the way they pummeled the margins on the Kindle.

If Apple needs to pull more revenue out of its content stream, it will be interesting to watch.  They haven’t positioned themselves as the low-cost or the high-performance provider in that space; everyone I’ve talked to with an iPad reads their books on the Kindle reader, not iBooks.

iDominance

Ed Oswald at Technologizer:

In a sign of Apple’s continuing ascension to the top of the technology heap, at 2:30pm ET today the company became the most valuable technology company in the world with a market capitalization of $227.1 billion. This was slightly morethan Microsoft’s $226.3 billion.

Both shares took a significant tumble late in the afternoon as the market gave up its gains and then some in the final hour of trading. Even so, Apple still finished in front at $222.1 billion, far ahead of Redmond at $219.2 billion.

How important is this? On the entire New York Stock Exchange there is only one American company that is more value, and that is oil giant Exxon Mobil. It also completes what could really be called a stunning comeback for Apple, which as recently as teh years ago had been in bad financial shape.

One ironic point: Microsoft itself could be credited with helping bring back Apple from the dead: in 1997, the company made a $150 million investment in the company shortly after Steve Jobs returned for his second and current stint as CEO

MG Siegler at TechCrunch:

Some publications reported this milestone happened back in April, but that was a slightly different metric. That was the market cap on the S&P 500, which uses float-adjusted numbers. Today’s milestone is straight-up market cap: numbers of shares outstanding multiplied by share price.

Of course, just how much this number means is a matter of debate. The truth is that it really doesn’t mean that much in terms how strong or weak a company is from a financial perspective. But it is a good indicator of trends, and obviously stock performance. That trend is obviously that over the past five years or so, Apple has been destroying Microsoft is gaining stock value.

Over those past five years, Microsoft’s stock has been largely stagnant: it’s up about 4%. Apple’s stock, meanwhile, is up some 550% over that same time frame.

Regardless of how the market closes today, you can likely expect Apple market cap to surge ahead in the coming days. A week from this coming Monday is Steve Jobs’ keynote at Apple’s WWDC event. There, he’s widely expected to unveil the new iPhone — and undoubtedly some other things. The mere speculation about what he’ll unveil will fuel the price. Microsoft, meanwhile, is losing key executives.

Dylan Tweney at Wired:

Ten years ago, Apple was all but written off by most expert commentators. An also-ran computer company that once dominated geeks’ hearts and minds with the Apple II and the Macintosh, Apple made serious missteps in the 1990s that relegated it to a tiny niche of the overall computer market, with market share in the low single digits. It was all but certain that its share would continue dwindling until the company faded away entirely, like Commodore, Atari, Tandy and dozens of other computer makers before it.

What the commentators didn’t count on was the string of hits Apple would deliver over the next 10 years. Founder Steve Jobs returned to Apple in 1996 and removed then-CEO Gil Amelio in 1997, making himself interim CEO (and then eventually dropping the interim title).

Jobs then instituted what can now clearly been seen as a far-reaching strategy to consolidate and simplify Apple’s product line, while gradually leveraging the company’s strengths (ease of use, consumer-friendly branding, attractive design, and high margins) to expand into new areas of consumer technology.

Jobs also carefully created a new company culture, one that’s centered on innovation, control and secrecy. That approach has alienated many people — and runs counter to Silicon Valley received wisdom about the value of openness and sharing — but the proof is in the pudding. With a CEO of Jobs’ caliber, at least, that kind of top-down control works.

This list of product rollouts tells the story:

• iMac (Bondi Blue) – 1998
• iBook (clamshell) – 1999
• iPod with scroll wheel – 2001
• Mac OS X – 2001
• iTunes Store – 2003
• MacBook (switch to Intel) – 2006
• iPhone – 2007
• App Store + iPhone SDK – 2008
• iPad – 2010

By 2010, Apple had firmly established its dominance (in mindshare and innovation, if not in absolute numbers) in three areas: computers, MP3 players and smartphones; the company also controls an increasingly large marketplace for music, video and applications with iTunes, which counts its users in the hundreds of millions and has served more than 10 billion songs, 200 million TV shows, 2 million films and 3 billion apps. Apple’s now the largest distributor of music in the United States with 26.7 percent market share, according to a Billboard analysis.

The recent introduction of the iPad — Apple claims over a million have been sold so far — may not move the needle much in terms of revenue, but it’s probably what pushed the company’s stock over the top. Early numbers of 200,000 sales per week suggest that Apple’s iPad is on track to outsell the Mac.

Ina Fried at cnet:

Macs still account for fewer than one in 10 computers sold, but its market share has increased significantly in recent years and the company has built a consumer juggernaut that extends well beyond the computer.

As for Microsoft, the company remains highly profitable, but investors and analysts alike are concerned that Microsoft remains dependent on its Office and Windows franchises for the lion’s share of its profits. The company has poured billions into its cell phone, online advertising and other new businesses that have yet to really help the company’s balance sheet.

Even its desktop franchises are seen as vulnerable in the longer term, particularly as Google aims to deliver many of the same capabilities through the browser.

So where will things go from here? Will Microsoft be able to transform itself into a company whose cloud computing and search efforts someday produce returns on the scale of Windows and Office? Will Apple’s remarkable run continue? Sound off below.

Derek Thompson at The Atlantic:

Where’s Google, you wonder? A bit behind, with a market cap value of about $150 billion according to Yahoo Finance. Rounding out the top six, as of March 2010, according to the Financial Times Global 500, are Wal-mart, Berkshire Hathaway, and General Electric.

Kevin Kelleher at Big Money

UPDATE: Reihan Salam at The Daily Beast

Jay-Z’s Got 23 Points, But A B*&%h Ain’t One

CNN:

Attention scrabble players! Mattel, the company that produces the popular game, is changing the rules. It’s allowing you to score points by spelling out proper nouns.

A spokesperson told the BBC it will add a new dimension to the game by allowing an element of pop culture, which could attract a new, younger generation of players.

“This could cause a power shift between the generations, with those possessing a keen knowledge of the top 40 singles’ chart legitimately able to cite such high-scoring examples as singers N-Dubz (17 points) and Jay-Z (23 points),” the spokeswoman told the BBC.

Ariane Sherine at The Guardian:

That’s right: Sugababes, Toyota and Clearasil could soon be coming to a Scrabble board near you, if you’re the kind of deviant who embraces expedient marketing decisions. Throw out the dictionary! Replace it with Heat magazine! Why confine yourself to the mere 171,476 words in the OED?

“We believe that people who are already fans of the game will enjoy the changes,” fibbed a Mattel spokesperson, fully aware of the wrath and welcome publicity that would ensue. “They will also enable younger players and families to get involved.” Are these demographics allergic to uncapitalised words? Are they so in thrall to brands that they need to incorporate them into every second of their leisure time?

But why stop at proper nouns? Surely foreign words should no longer be verboten? If new Scrabble better accommodates the young, just imagine how Euro Scrabble could improve relations avec nos continental neighbours. Txtspk Scrabble would be next, in all languages including Esperanto, swiftly followed by Creative Scrabble, where you make up your own words. Dissent will not be tolerated: innovation can only advance our development, never hinder it. Those of us who claim to prefer the lexical beauty and simplicity of classic Scrabble clearly fear change, and are standing stubbornly in the way of progress.

Andrew Swift at Foreign Policy:

Finally my dream of using “Reykjavik” (30 base points), “Kyrgyzstan” (30 base points), and countless others (readers, feel free to chime in your favorites) has finally been realized. (Anticipate long arguments over the spelling of “Qaddafi.”)

Purists take heart, the classic version will still be available — but I won’t be playing with you.

(Note: there is only one “Z” available for play, but using a blank tile would still give a base score of 24 points for former-President Jimmy Carter’s National Security Advisor.)

**Update: It appears the new version will not be sold in North America, where Hasbro owns the rights to the game (Mattel owns the rights to Scrabble elsewhere in the world.) Perhaps someone should just make my dream come true, and create a (solely) international relations Scrabble edition?

Robert Quigley at Geekosystem:

I’m a fairly serious competitive Scrabble player (no, really), which is why I was seriously freaked out to read this morning that Mattel was changing the rules of the game for the first time in 62 years to allow proper nouns like “Jay-Z” and “Shakira” as playable words. The story has been enthusiastically picked up by British media outlets, including The Telegraph, the Daily Mail, and BBC News.

This would be a nightmare for a number of reasons, not least of which would be deciding which nouns are “proper”: Which brands, celebrities, and acronyms are “big” enough that they warrant dictionary entries? Does “TomKat,” for Tom Cruise and Katie Holmes’ annoyingly portmanteaued relationship, work? Is “Bennifer” still valid even though Ben Affleck and Jennifer Lopez have since broken up? All of which raises another point: Scrabble as we know it would become really dumb.

Fortunately, we got in touch with a Mattel rep, and he confirmed that the rumors of a Scrabble rule change making the rounds in the British press are wildly overblown.

Philip Nelkon, a representative for Mattel and a legendary Scrabble player in his own right, told us that the proposed rule changes applied to a family-oriented new variant on the game, but that classic Scrabble would continue to exist as it currently does, with no changes to the rules or the dictionary.

[The British press] refers to a new edition of the classic game that introduces new twists on the classic rules. One of the new rules includes the opportunity for players to play proper nouns and there are others included such as playing a word backwards or stealing opponent’s tiles, introducing new dimensions of play. The new rules provide a great new opportunity for families to get involved in word play.

The new game will appear later in the year, the classic game will still be available and will not change.

Interestingly, despite all of the “outrage!” stories popping up about the largely made-up Scrabble rule change, some of the more photographically-memoried expert-level Scrabble players might actually welcome such a change, as it would give them more words to memorize and thus more tools with which to trounce their competition: With an expanded dictionary, there would be an expanded number of better optimum plays in many positions.

Jared Newman at Technologizer:

Here’s where technology comes in: Scrabble, or games like it, have become quite popular on computers and mobile devices. Scrabulous was one of the most popular games on Facebook before it was suspended amidst lawsuits from Hasbro and Mattel (the game eventually came back as Lexulous). One of my favorite iPhone apps is Words With Friends, another Scrabble clone that lets you play remotely with friends at your leisure, and it’s at least popular enough to have its own fan site.

So I reject the notion that Mattel needs to bend the rules in order to attract more players. The players are there, it’s just that Mattel hasn’t been able to capture them itself.

My hope is that Mattel’s rule change doesn’t creep into any online versions of Scrabble. Enforcing the proper use of proper nouns online would be difficult, and a computer-made set of rules would make it impossible for players to debate which words qualify and which are clearly made up.

Dave Levy at Mediaite:

I was being mildly generous with the laws of random chance related to tiles while steering clear of multipliers for scoring; I did observe some of the major rules of letter distribution from the English version as best as possible, though. This last rule has me heartbroken: With only 1 z in the standard, 100-tile game, there’s no way you could  end up with a pocket of ZZEINEB and turn “SKI” into Brzezinski (which would be a savage 152 point play on a triple-word score if it was humanly possible). There is still a lot more out there though, so let’s get this going.

Cable News Division

Mika Brzezinski may be out thanks to one too many Zs, but that doesn’t mean her other Morning Joe counterparts couldn’t help you out. With high letter frequency, GEIST could be a nice early play. Carrying a hand of  OORSUHG and you could turn the measly four-letter CARB into a bingo driven SCARBOROUGH. Willie will only get you 6 points, but Morning Joe himself could be good for a minimum of 69 without multipliers, which would be tough to avoid on a word that long.

= 6

= 69 (with Bingo)

Let’s stay on the 24-hour nets for our next one: picking between Glenn Beck and Rachel Maddow? The Scrabble board says the MSNBC host is going to slightly more productive for your scoring needs, but as Beck would point out, you’d have to get more handouts from the bank after you play Rachel’s name for only one additional point. And he just doesn’t understand why he’s the only one pointing that out.

= 13

= 12

Late Night TV Division

Team Leno or Team Conan? The math says that Conan will get you a slight advantage, especially in the 18-34 demographic. However, massively appropriately, David Letterman takes care of both them quite easily in the game of Scrabble. If LET or MAN are on the board, it won’t take significant luck to get the tiles you need to make a quick strike on your opponent.

= 4

= 7

= 11

Bad Pop Culture Reference Section

Some great news for everyone who got a chance to read Rachel Sklar’s excellent breakdown of the Release the Kraken meme: ZEUS beats BIEBER in the Scrabble test. If that’s not good news from the universe, I don’t know what is.

= 13

= 10

dd

Take Off Your Shoes, Belt, Open Your Bag, Post Procedures On The Internet

Christopher Weber at Politics Daily:

The Transportation Security Administration says secrets about airport screening practices were inadvertantly posted on the Internet as part of a contract solicitation.

The TSA’s 93-page Standard Operating Procedures manual went online with some sections redacted, ABC News first reported. But hackers were able to easily undo the redactions and top secret passages were distributed across the Web.

The details revealed involve special screening rules for diplomats, CIA agents, and police.

The manual provides easily copied images of credentials used by members of Congress, the Federal Air Marshals, the CIA and the Bureau of Alcohol, Tobacco, Firearms and Explosives. It also reveals that only 20 percent of checked bags are hand searched for explosives, and it details limitations of x-ray screening, ABC reported.

“This is an appalling and astounding breach of security that terrorists could easily exploit,” said Clark Kent Ervin, the former inspector general at the Department of Homeland Security. “The TSA should immediately convene an internal investigation and discipline those responsible.”

News of the security breach comes one day before the Senate Homeland Security Committee is scheduled to hold a hearing on preventing terrorists from traveling.

Ed Morrissey:

Part of maintaining a security protocol is securing the protocol itself.  Those wishing to breach security for whatever purpose maintain a constant watch on procedures and training, looking for chinks in the armor.  Normally that takes a lot of trial and error, with plenty of risk for the malefactors for detection and capture.  Overcoming that intensive dedication to lost resources would be a prime goal of any terrorist network, but especially those whose numbers have been greatly reduced by a full-blown war conducted by the US on them — primarily al-Qaeda in this instance.

The publication of this data removes the requirement to throw lots of resources against the security protocol to learn its weak points.  That means that people flying now are at higher risk, thanks to the exposure of this information.  It almost certainly means that TSA will have to change these procedures, which will mean longer waits at security checkpoints for the foreseeable future, as they attempt to close the breach they themselves created.

Israel Matzav

Ed Oswald at Technologizer:

TSA officials are claiming that the document is “outdated,” however critics argue that the screening process has likely not changed that drastically that the procedures detailed here are worthless to terrorists and other interested parties.

Certainly this breach is a threat to national security, and I tend to agree with those critics who say this one is pretty serious. 9/11 was a product of terrorists understanding the loopholes in our airport security procedures, and this breach now threatens to give our enemies insight into how we’re keeping them out.

Not good at all.

James Joyner:

Some of what’s now been revealed would have been easy enough to guess.  Presumably, al Qaeda isn’t going to send people with Saudi and Yemeni passports to blow up planes, anyway. And that a wheelchair and orthopedic shoes would likely lessen the suspicion with which you’re viewed by security officials isn’t exactly shocking — although that doesn’t mean TSA won’t now start aggressively screening wheelchair-bound grannies.  Thankfully, there are seldom more than 2 or 3 of those on a flight, anyway, so the additional delays and stupidity will be modest.

Nor am I terribly concerned that photocopies of CIA credentials have been published. Presumably, people skilled enough to counterfeit them already have more useful models from which to work.   And the average terrorist plotter, even those who consider themselves al Qaeda operatives, lack the skillsets to make use of this information.

More troubling is the detailed information on the limitations of screening equipment.  Again, that’s information for which there were surely alternate paths for well organized terrorist cells.   But would-be terrorists now have a pretty good idea of how TSA deals with those limitations.

Cory Doctorow at Boing Boing