April 2010

As mentioned in a Feb 2010 blog post, Amazon wants to sell bestselling ebooks at a discount ($9.99 in the U.S.) to encourage more people to browse its store and to buy books in the Kindle ebook format. Under its current wholesale pricing model, Amazon pays book publishers a fixed price per copy of ebook sold (usually half the list price of a hardcover version of the book) and then is allowed to price the ebooks as it sees fit.

If the publisher is getting a fixed license fee per book, why should it care what the retailer charges its customers for the book? In fact, shouldn’t it want the retailer to charge a low price in order to maximize the total sales and thus the publisher’s profits? The answer is maybe.

The wholesale pricing model works fine for publishers when selling rights to the softcover edition of books, since softcover books appear several months after the hardcover edition and so do not compete directly. Further, the difference in quality between hardcover and softcover makes it obvious to the customer that one is less valuable than the other.

However, this isn’t true with ebooks. They often appear at the same time as the hardcover edition, sometimes even before the hardcover edition. And many people now prefer to read ebooks over paper books. Thus, many publishers dislike discounted ebooks since they think that the low price debases the value of their hardcover books. This can reduce demand for hardcover books, which is where publishers make most of their money. In this case, the publisher would like to control the price that the retailer charges for an ebook, a practice called retail price maintenance.

To address publisher’s concerns, Apple has set ebook licensing agreements with several publishers using an agency pricing model in which the publisher sets the price and keeps 70% of the revenue, with Apple taking 30%. Most publishers have eagerly accepted Apple’s offer. And many are eager to get the same arrangement from Amazon.

I was surprised that publishers like this. By setting prices themselves, publishers are now competing with their own customers, the book wholesalers and retailers. This can put them in a very tough situation because under the Robinson-Patman Act, providing discounts on discriminatory terms can lead to civil penalties. You can bet the American Booksellers Association is watching this very carefully and will pounce if it perceives any antitrust violations.

Today, the Wall St. J. reports that Amazon and Pearson’s Penguin Group have still not set a licensing agreement for ebooks. To put pressure on Penguin to accept its terms, Amazon has decided to sell the hardcover edition of Penguin’s best sellers for $9.99. An example is shown below.


A Penguin bestseller. Image from Amazon

In the image above, notice that the link to the Kindle Edition is still available. However, if you click on it, you get the error message shown below.


A failure to communicate. Image from Amazon

Things may get more interesting if Google launches its Google Editions cloud-based bookstore later this year. However, as far as I know, Google has no reading device under development. Also, it has poor relationships with publishers because of the controversy resulting from its Google Books copyright lawsuit and eventual settlement agreement.

The Chicago Tribune recently reported a story about a woman named Emily Grudzinski who is preparing to donate her kidney to her mother. The mother is a patient at Kovler Organ Transplant Center at Northwestern Memorial Hospital. The hospital requested that the younger Ms. Grudzinski undergo an additional echocardiogram because of a known heart condition. The woman has no health insurance and could not afford the test. Because it is a pre-existing condition, her mother’s insurance wouldn’t cover the cost as part of the transplant. The newspaper’s problem solvers team intervened and was able to get the hospital to absorb the cost.


Emily Grudzinski. Photo from Chicago Tribune

I assume the problem with coordination of insurance coverage between the patient and donor is very common (see Sept 2009). In order to control costs, the patient’s insurance, whether it is private or Medicare, doesn’t want to pay for any of the donor’s medical costs that are not directly related to the transplant. The donor’s insurance, or in this case the donor, doesn’t want to pay for a test they would only get because of the transplant.

I wonder how many transplants are cancelled because the donor or patient aren’t savvy enough to navigate through the medical and financial obstacles required to be accepted by a transplant program. This is another area where a community outreach program, like the one I plan to start, could help patients and thus improve medical outcomes.

[Update: Ms Grudzinski was able to get the test paid for and donate a kidney to her mother (Chicago Tribune Jun 2010).]

I read the news today, oh boy. The Mainichi Daily News carried two stories describing the end of two unrelated eras. The first story is that the Kabuki-Za Theater in Tokyo’s Chuo Ward had its final performance today after 59 years. A crowd of people stood and stared.

1646   Photo from Mainichi Daily

The second story was not entirely unexpected. But still the news was rather sad. Sony, the inventor of the 3.5-inch floppy disk, which isn’t very floppy, announced it would discontinue sales of the disks in Japan by the end of its fiscal year, in March 2011. As a longtime Mac user, and a Lisa user before that, I mourn the passing of this classic format. But I admit 30 years is an amazingly long run for any single format in the computer industry. (Just let me dig out my old SyQuest cartridges from the basement.)

sony-floppy-discs-vertical    Photo from CBC


When I was working on the college newspaper, we made the transition from outsourced punched tape typesetting to in-house computerized typesetting using a Compugraphic machine on campus. Prior to having a Compugraphic machine available, we sent all of our copy to a print shop across town. They generated yards of punched tape and fed it into the photoimager to generate the galleys which were then developed. The whole place reeked of photographic fixer. Then, if there were any changes, we had to set additional lines of type and used X-Acto knives and wax to cover over the older lines. Sometimes, if you were in a hurry, you just dug through the pile of scrap galleys and cut out individual letters or words and pasted them into place.

Using the Compugraphic wasn’t much different. You still couldn’t edit stories after they were saved to the 8-inch floppy disks. However, it was a bit easier to request a new printout of a story that contained the one or two lines with your desired change. The real improvement was it saved the drive across town, a major concern on days it snowed, or when finals were coming up. Ah, those were the days.

by George Taniwaki

Today, I have my eighth appointment at UWMC. to give blood samples for a crossmatch test.

If you are testing to become a donor for someone you know, the HLA crossmatch test is done early in the evaluation process. If your blood type and HLA type are not compatible with the patient, then the testing usually stops then. (It is sometimes possible to continue evaluation even if you don’t match if the transplant center participates in a kidney exchange or can provide remove the patient’s antibodies in a procedure called desensitization.)

For a nondirected donor like myself, the process is a little different. I don’t have to match any particular patient. So the transplant center completes the evaluation first. Then, if I am suitable for surgery, the transplant center finds a patient that can accept my kidney.

The first step in finding a match for me is called a virtual crossmatch. A blood sample is taken from me and analyzed to determine the set of human leukocyte antigens I have. Then a blood sample is taken from every patient to see if they have anti-HLA antibodies that would attack these antigens. Using computer software, a list of all the patients who do not have antibodies to my antigens is produced.

In an ideal world, all of these patients could safely accept my kidney. However, the tests used to measure anti-HLA antibody levels is not 100% accurate. Also, antibody levels can rise and fall over time. Thus, the final test is a physical crossmatch. In this test, a lab will take a sample of my blood and mix it with the patient’s blood to see if they react, indicating the patient has antibodies that would attack my kidney, and could lead to organ rejection.

What is it? HLA crossmatch test
Why is it needed? Ensures your kidney can be safely transplanted into the patient
How is it done? A sample of your blood is taken and mixed with a sample of the patient’s blood. If they react, then you are NOT a match
Preparation None
Test time A few minutes to take blood sample. A few hours to run the test itself (you do not have to wait for the results)
Risks None
Discomfort A needle prick in the forearm, there may be a slight bruise



The line at the UWMC blood draw was short today, so I quickly take a seat at a station.  The phlebotomist takes seven vials of blood! I presume they plan to run the test using one vial of my blood against the first person on the list. If I don’t match, they will continue down the list until they find a match. I can’t believe they will have to run the test on more than one or two potential recipients. But I guess it’s better to take a large number of samples at once rather than having me drive into Seattle repeatedly to give blood samples.

The blood draw only takes a few minutes. I was in and out in less than a half hour. Let’s hope the transplant center finds a match soon and my surgery proceeds without a hitch. I need to stay healthy for the next couple months. I just have to remember to stay away from kids with runny noses.


Now serving customer L605. Photo by George Taniwaki

For more information on becoming a kidney donor, see my Kidney donor guide.

[Update: Added a summary table.]

After being accepted as a nondirected donor by the Univ. Washington Medical Center’s transplant (Mar 11), I told them I wanted to try one last time to start a kidney donor chain. As I suspected, another month of waiting on the donor list for the National Kidney Registry didn’t make a difference. I didn’t match anyone on their list. Unless matching rules change, someone with AB blood type like me will be very unlikely to ever match anyone on an exchange list. (For an explanation, see this Mar 2010 blog post.) So now I will let the UWMC match me with a patient on the UNOS waiting list.

My donor nephrectomy is now tentatively scheduled for Wed, Jun 30. I picked the week of June 28th for my surgery because it is the week before Independence Day. That way I can get paid for the holiday. I won’t get paid for my other sick days off, so getting one extra day of pay will be nice. The UWMC kidney transplant unit always schedules their elective surgeries on Wednesdays. I’m sure this simplifies the life for their surgeons who must juggle teaching, research, patient care, and managing the surgical program. How can a single person be good in all four of these areas?

My friend Carol Borthwick sent me a link to 20 photographs of vintage computers featured in Time. The photographs are by Mark Richards, who has a book out entitled Core Memory: A Visual Survey of Vintage Computers.

CoreMemory    Image from Amazon.com

Most of those pictures are for devices that are before my time. So maybe you want more recent images of the 10 worst keyboards of all time as judged by PCWorld in 2007. It’s amazing to see how much variation there was in the past for something that is so standardized today.

WorstKeyboards  Image from PCWorld

But of course why dwell on the quaintness or horrors from the past. At the other end of the scale is a brand new computer keyboard that does everything. The Optimus Maximus keyboard has an OLED screen on the top of each of its 113 keys. Each key-top screen is programmable so that it can display a variety of images, or even video at 10 frames per second. And it’s yours for only $2,400.


Video from ThinkGeek

There are actually some practical uses for a keyboard that has programmable key labels. First, if you like to use keyboard shortcuts or are unable to use a mouse because of a disability, then having the feature list appear when you press a modifier key like Shift, Alt (Option on a Mac), AltGr, Ctrl, Windows (Command on a Mac), or Function would really aid in recall of the features available.

Second, if you customize key bindings, which someone who uses keyboard shortcuts a lot does, then being able to modify the key label would be helpful to remind you which key is associated with which command. It would also serve as a notification to a guest user that the keys have been mapped in a nonstandard way.

Third, if you are bilingual and often type in another language you may discover that you need two keyboards, one for each language’s keyboard layout, and switch between them. Alternatively, you can stick with the keyboard for your primary language and use a character map utility to find and insert characters needed for your secondary language but not available on the keyboard of your primary language. Using either method is a big hassle. Having a keyboard with programmable key labels would allow you to use a single keyboard and switch mappings to enter text for both languages easily and conveniently.

Finally, in the very rare case that you are a professional software tester specializing in internationalization and localization or a prodigious multilingual savant, then you can switch between all the available keyboards in the world and type every Unicode character without switching between physical keyboards.

Of course, keyboards will be obsolete soon, if you believe the leaders of the natural user interface (NUI) movement. We’ll soon be using gestures and voice to interact with computers. So this whole blog entry is moot.

Recently, Apple released a beta of the latest version of its iPhone operating system, called iPhone OS 4.0. As part of the release, it is distributing a new version of the software development kit (SDK) so that developers can write software that will take advantage of the new features of iPhone OS 4.0. The biggest advance is the ability to run multiple applications at once, called multitasking.

Currently, if you are using a third-party app and you answer the phone, the app quits. Further, third-party apps cannot run in the background and update (like you would want for weather, navigation, IM, etc.) The iPhone, like any modern personal computer runs many processes simultaneously. However, the ability of external developers to control this was limited in earlier releases of the iPhone OS. (Note that this limitation only applied external developers. Apple’s own apps multitask easily. For instance, you can take pictures or get maps while using talking on the phone.)


iPhone 4, now with multitasking. Video still from Apple

Some developers have reported that Apple has made some subtle but significant changes to the SDK license agreement for iPhone 4.0. These changes increase Apple’s ability to generate revenue from users to the detriment of developers.

First, Apple added a clause to prohibit the use of third-party compilers to create code for the iPhone. Most developers already use the Apple tools and are not affected by new restriction. The exceptions are developers who use, or want to use, Adobe Flash. Just a few days before Apple released the new iPhone SDK, Adobe Systems released the latest version of its tools to create web sites and rich Internet applications (RIA) called Creative Suite 5. One of the big feature of CS5 that Adobe had been touting was the ability to create apps using Flash and compiling them to run on iPhones.

After several days of tense negotiations and public sniping, Adobe has finally thrown in the towel. In his blog, Mike Chambers, the Flash product manager, says:

“We will still be shipping the ability to target the iPhone and iPad in Flash CS5. However, we are not currently planning any additional investments in that feature.

…if you want to develop for the iPhone you have to be prepared for Apple to reject or restrict your development at anytime, and for seemingly any reason.”

By refusing to support Flash, either in its Safari browser or in applications, Apple ensures that developers for the iPhone must use its tools to create the applications. In turn, this means the developers must use the iTunes store to distribute them. These restrictions ensure that Apple will get a cut of the revenues and prevent distribution of apps that are not desirable. Adobe’s failure to anticipate Apple’s moves or create a viable mobile strategy is described in today’s Business Insider.

A lot of the content on the iPhone is free, so it may seem that Apple has generated a lot of negative publicity for itself for little benefit. However, having complete control over the single source of content for the iPhone will become even more important as Apple negotiates distribution of apps and content for its new iPad. If every book publisher, magazine publisher, television network, and movie distributor has to get approval from Apple for its content to appear on the iPad, then Apple is in a position to control pricing, promotion, and exclusive distribution rights. This can be very powerful and profitable indeed. [Disclosure: I do not own any stock in Apple or Adobe Systems, except as part of mutual funds that I have no control over.]


Last week, another developer revealed that Apple has also added a clause to its iPhone SDK license to prohibit “the use of third-party software to collect and send device data to a third-party for processing or analysis.”

In passing, this would be seem to be a good thing. It appears to prevent application developers from invading the privacy of Apple’s customers, or using location services to display annoying ads targeted by geolocation data. However, it is important to view this ban as part of the wider battle between Apple and Adobe (and others) over mobile strategy. That’s because Apple doesn’t want to prevent developers from tracking users and showing them ads. It just wants to prevent them from using another company’s tools when doing so.

Last fall, Adobe Systems acquired Omniture, a web analytics firm, for $1.8 billion. At the time, I didn’t understand the logic. Adobe sells web and print design tools to designers. Web analytics software is purchased by marketing and advertising professionals. They are not the same people. Why would anyone care that they could now buy both products from the same company? But now as Adobe releases the latest version of its Creative Suite 5 web and print design software, it is pretty obvious what the advantage is. CS5 makes it easy for designers to integrate analytical markers into web content that can then be measured using Adobe’s web analytics tools. And as much of the web moves to mobile devices, distributing location-based advertising could be a critical source of revenue for Adobe.

Most software developers for mobile devices are not advertising-savvy. To help them, Apple recently purchased Quattro Wireless for $275 million and is using the technology from that acquisition to launch as its new iAd mobile advertising platform. Apple will sell the ads and give 60% of the revenue to developers.


iAd mobile ad service, I insist you like it. Video still from Apple

However, by altering the SDK license to ban application developers from using third-party software, Apple is locking in developers to its service and shutting out Google, Adobe, and others. Through its actions, Apple has strengthened its ties to its most loyal developers, pushed away the ones that were using outside tools, stopped its competitors, and done it all in a way that isn’t highly visible to end users. These strong armed moves may not withstand antitrust scrutiny. But if they work, they will produce great revenue streams for Apple.

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