July 2, 2019--My East Flatbush Sweatshop

The New York Times reported that Apple is planning to end the manufacture in Austin Texas of its $8,000 a copy high-end desktop Mac Pro. This will mean that soon none of Apple's products will be made in America. The Mac Pro will be made in, of course, China.

Expect to hear cries of outrage from the White House but Apple CEO, Tim Cook, is dug in. 

He also claims that all of Apple's complex products are in effect made in many places, including the United States because they are totally designed and engineered here. Actual parts are made in many countries and in the case of the Mac Pro it will "only" be assembled in China where that is much cheaper than if it were to continue to be fabricated in Austin.

Raise your hand if you believe anything Tim Cook says about this.

I guess I get it. It's all about the bottom line, Always has been, always will be.

I also get it because many years ago, when I was about 10, I put together an assembly line on our dining room table in our apartment in East Flatbush. 

It was to assemble cigarette lighters from parts made in Japan. At that time Japan was our China, the country to which businessmen flocked to get their products made for about 10 percent of what it would have cost if they were made in the USA. "Made in Japan" stamped on a product was almost the equivalent of  labelling it "Junk." 

I am sure you are wondering about how I, just 10, got involved in this.

It was because of my Aunt Fanny and Uncle Jac for whom she worked.

Uncle Jac did business globally and among his many products was a knock-off version of Ronson's most popular pocket lighter. To get around customs and copyright regulations lighters made in Japan could not be imported if fully assembled. The lighter in question (see below) was made up of about a dozen small parts and they arrived disassembled. Thus they needed to be put together in America.

I was sick as I frequently was with the croup and this time I couldn't manage to shake it. I was home and seriously bored. My mother was having difficulty keeping me in bed. Fanny said to her, "Stevie is good with his hands. What if I brought him a dozen lighters to assemble? It will keep him occupied for days while he's recovering and he'll earn 75 cents, which is what it costs us to have a dozen assembled." 

My mother was desperate and agreed to give it a try. 

I too was desperately unhappy and thus quite excited when Fanny came by the next day with a shopping bag full of lighter bodies and the other parts that needed to spark and then flame when a smoker pressed the right button.

While Aunt Fanny joined my mother for a glass of tea in the kitchen I assembled all 12 lighters. Feeling good about myself, I didn't call out to them but rather remained smugly in bed, with my arms folded, waiting patiently for them to "discover" me with the dozen now assembled lighter, wrapped in tissue paper, and placed and in small cardboard boxes. Ready for my Uncle to sell to Gimbels while I was ready to get my hands on the 75 cents. Real money at that time.

"I told you he's a genius," Aunt Fanny said, "Another Einstein."

"Not quite," my mother valued the truth even though it was flattering to have her son compared to the father of the atomic bomb.

So the next day Fanny brought me five dozen lighters and a check for 75 cents. The first money I ever earned and the first check I ever received. Or, as I preferred to think about it, earned.

It took me a couple of hours to assemble them. Though no Einstein I was good at arithmetic and knew as a result I would get a check for $9:00

At the same time Uncle Jac said they were selling like "hotcakes." He couldn't ship them fast enough to Gimbels and the Five-and-Ten to keep up with the demand. He had a supply chain problem.

And so, after finally recovering from the croup, on Monday afternoon when I got home from school, on the front porch there was a huge wooden shipping crate, at least 8-feet-by-8-feet-by-8-feet, covered with Japanese writing.

I felt certain that there were many thousands of lighter bodies and parts there waiting for me to assemble.

When my father got home from work he borrowed a crowbar from a neighbor and pried off a couple of slats. Sure enough, it was completely full of counterfeit Ronson pocket lighters.

I realized immediately that this big a job was beyond my ability to take on on my own, and before I thought through the implications, I asked my father if he would be willing to help.

He indicated that he was but before agreeing I wanted to make sure that this was my project and that he was there to help, not take it over. It was a difficult conversation but he agreed and subsequently we did not have any ownership problems. "In fact," he said a day or two later, "You should keep the money. If we get all these assembled it will amount to quite a lot."

It took a number of evenings after dinner for us to get that first dozen-dozen done. We hardly made a dent in what had been packed in the crate. "We need more help," I said, "Maybe Aunt Fanny and Uncle Harry can come over on the weekend and help with some of the assembling. I can break it down into individuals steps and come up with something they each can handle."

Fanny was a talented knitter and so with her manual dexterity I had her insert wicks and flints, both essential to causing a spark and ignition. Harry, who in truth was quiet clumsy I had adding lighter fluid through the port at the base of the body. My only fear was that with their combustable relationship, as a combative couple, they would literally ignite one weekend night and set fire to our apartment.

Next, Aunt Tanna and Uncle Eli joined the assembly line. My aunt had worked in a women's notions store and was thus skilled at boxing and wrapping things. And so that became her job--to wrap assembled lighters elegantly in tissue paper before nesting them in their boxes.

I had Uncle Eli testing the lighters after they were fully assembled and put aside those that didn't work properly. My father was the self-designated head of the repair department, sometimes stubbornly spending hours on a lighter that resisted fixing. 

"We only get paid for the ones that work," he kept saying when I prodded him to move on since we still had thousands to complete. But he insisted someone needed to do it; and for the most part, since he was an insomniac, he ran his repair operation after midnight.

And my mother served as our bookkeeper. Not that she didn't trust her brother. It was because she wanted to avoid mistakes. At our end as well as his. There were so many lighters it would be easy for things to, as she put it, get "mixed up." And because of her nothing ever was mixed up and every dollar was kept track of.

It took us more than six weeks of day and night work to get all the lighters  assembled. We had a wonderful time. Stories about that time together became part of family lore and legend.

And altogether the final accounting showed that we made more than $1,000 dollars. I gave everyone $50 and with the rest bought myself a set of Sam Snead golf clubs and a new Schwinn Racer. I even had enough left to help pay for my bar mitzvah, which in fact never happened. But that's a story for another day.

April 29, 2016--Apple of Discord

Apple, Inc. by capitalization is the world's largest corporation valued at more than $700 billion.

Earlier this week they reported second quarter earnings.

For the first time in 13 years they not only failed to meet earnings projections but saw revenue fall in comparison to last year's Q2 income by nearly $7.5 billion. Down to $50.6 billion from $58.0.

Third quarter projections are looking even bleaker.

What's going on?

Mainly problems with iPhones, the company's cashest cow since it was first released in 2007.

This past quarter iPhone sales were down by 10 million units--51.2 compared to 61.2 in 2015.

This may be cyclical--people holding on to their current phones in anticipation of rushing to line up to buy the new model later this year. Or, it may be that the air is beginning to come out of Apple's balloon. I almost said bubble.

Since Steve Jobs died, new products have all been pretty much failures. The Apple watch, for example. Anyone know somebody who owns one? I don't.

The Apple we know is still Job's company. What has been and still is profitable are all things designed and marketed during his brilliant time heading the company--iPods, iPads, MacBooks, tablets, and of course iPhones. All the ongoing success derives from the momentum he imparted to the company.

Further, Apple has been the go-to place for consumer electronics in large part because its products have been aesthetically beautiful and, more important, "cool."

Thus Apple is vulnerable because so much of its success depends on its continuing to be convey status.

This could evanesce in a hurry if someone else's smart phone--the Samsung android, for example--is viewed to be cool.

Cool, by definition, doesn't last forever. In fact, iPhones have been most desirable for much longer than the past history of cool things might suggest.

As soon as the kids and hip-hoppers move on to whatever becomes the "latest," that will be when we really will see Apple's earnings and stock value fall off a cliff. This is apparently already happening in China.

If I had any Apple stock, I'd get out of it right now.

January 20, 2016--What's Playing in Somalia and On Reunion Island?

I love my Netflix.

I know there is current controversy about their ratings--the company is coy about them, which suggests they are not as high as advertised. The concern about the truth is not academic or about the truth itself but about Netflix's valuation--how much it is worth and how justifiable is its current lofty stock price.

I don't care about that except that I do have an investor's interest in the so-called FANG stocks. Facebook, Amazon, Netflix, and Google. I do not at this point in my life believe in owning that many shares of individual companies, preferring broad-based securities funds, but I do own a decent amount of Amazon stock, am thinking about buying more, and am considering making an equivalent investment in Netflix.

After all, boldly last week, the CEO of Netflix announced that they are making their streaming service available in 190 large and small countries from China to Somalia.

And just yesterday Netflix announced that they are signing up surprising numbers of subscribers in many out-of-the-way places.

Now people from Madagascar to Reunion Island can catch Orange Is the New Black and House of Cards.

"They must have pretty good Internet connections," CEO Reed Hastings joked the other day when he learned that the Reunion Island folks were among the first to subscribe.

Now Netflix is scrambling to dub their shows in dozens of languages to keep up with the already burgeoning demand.

I remember back in the day, when nation-buidling still seemed to some like a good idea, that the thought was that if we could help bring versions of Western democracy to underdeveloped places such as Iraq, Syria, and Libya young people especially would clamor for MTV and once they could tune in all would be well in the world.

We see now what that culturally imperialist and naive strategy has yielded. Among other things--ISIS.

Now here comes Netflix.

To some in Yemen, seeing the evil Kevin Spacey character, fictional U.S. president Francis Underwood ensconced in the White House, will feel that what they believe to be true about our actual president is in fact true.

March 11, 2015--iWatch

Though many financial analysts and new media savants are predicting that Apple will sell tens of millions of iWatches, though I know relatively little about the new media and less about iSales, I am predicting that the new watch will be Apple's version of New Coke.

Though some kids are probably already camped out in front of Apple stores around the world waiting for the April launch, the watch is going to be an embarrassing flop.

For two or three basic reasons--

First, since to make the watch perform buyers will also need a switch-on iPhone to power the watch's features, the watch will not replace the phone but rather live off it as a version of an electronic parasite, draining down the phone's battery life, which already, even without the watch living off it, can be a problem for heavy iPhone users.

Second, who really needs an iWatch? What's so new about it that millions will shell out at least $350 to buy one? The fact that you can monitor your heart rate continuously? What Millennial 20-year-old cares so much about that that they'll want to have their heart thumping away all day on their wrist? I think not that many.

Third, the new Apply leadership forgot one of Steve Job's most important insights--to make sure that even if a new product does not initially address an unmet need, at the very least it should be sleek and aesthetically beautiful.

The iWatch looks more like a Mickey Mouse watch than a MacBook Air. It's chunky, the opposite of sleek and cool. And how many young people wear watches these days anyway? Almost none. So how will Apple convince millions of them to buy a clunky watch with a cheesy plastic band that looks more like those Medical Alerts old folks wear to call 911 in an emergency?

November 13, 2014--T-Shirts Make the Man

Like so many other things in Silicone Valley this trend likely started with Steve Jobs, for many years Apple's guiding genius.

Once, twice a year he would stride out on stage at their headquarters in Cupertino, CA, for a show-and-tell that featured the latest iPod, iPad or iPhone. Prior to that this was not what traditional CEOs did to launch their latest products. They would hang back in their corner offices and leave it to the sales and PR people to announce new Game Boys or office software.

Jobs, super salesman and egoist that he was, did this himself in dramatic fashion--in dark ambient light with only him, the Apple logo, and the newest MacBook Pro theatrically illuminated. And rather than appearing in a bespoke suit and Turnbull & Asser shirt and tie, he wore lived-in jeans and a body-revealing black mock-turtleneck shirt with the sleeves pushed up.

This became just as much his signature look as Gloria Steinem's aviator glasses or Donald Trump's comb-over. It also set the tone for other IT magnates. Everyone from Microsoft's CEO Steve Ballmer to Facebook's Mark Zuckerberg subsequently took to rolling out new products and services casually dressed. Zuckerberg shows up in his legendary hoodie or, more recently, in his Steve-Job's jeans and short- or long-sleeved T-shirt.

As reported in Tuesday's New York Times, Mark Zuckerberg, in spite of appearances, thinks a lot about his--if I can call it that--attire.

He wears an identical gray T-shirt every day. He said, "I want to clear my life so I have to make as few decisions as possible beyond serving this community." (My italics)

I get it--not having to think about clothes clears his mind. He avoids the angst of needing to think should it be the gray T-shirt again or maybe a blue or black one. It also saves closet space--one drawer is all he needs for a half dozen or so.

In the Times piece he did acknowledge Steve Job's inspiration--well and good--but claimed he is also influenced sartorially by Barack Obama.

Yes, he did comment about the "simplicity" of Obama's wardrobe. He didn't elaborate, but I suppose he means that Obama always turns out in one of his signature navy or dark gray Hart Shaffner Marx suits. Like Zuckerberg that too enables the president to make as few decisions as possible while serving the community. In his case that community being the United States of America.

In the meantime I worry about poor Steve Ballmer, former CEO of Microsoft, and Eric Schmidt, chairman of Google. Both are far from buff, a bit roly-poly and though they try to look sleek and youthful, when they appear on stage to reveal the latest in cloud computing or Google Glasses in their version of Jobs-Zuckerberg outfits, they look a bit disheveled.

But at least they don't try to stuff themselves into T-shirts.