Category Archives: Quick Digestibles

Apple to Remove Headphone Jack…For What?

Rumors have surfaced that Apple plans to abandon the ubiquitous 3.5mm headphone jack.  This story developed when Apple blog, 9to5mac, discovered that Apple submitted a design specification to its licensing program which would connect headphones using the Lightning port.

For Apple, this is a smart move.  By removing the classic headphone port, Apple makes all previously designed headphones obsolete.  This wipes out products of competitors, and maybe most importantly, it sheds more light on the significance of the $3 billion Beats Electronics acquisition.  Rather than collaborating with Beats Electronics to create headphones with Lightning port accessibility, Apple now has the ability to earn exponentially more money from license fees and adaptor sales.  The fact that such headphones would probably retain the iconic Beats logo only adds to Apple’s gain, as both brands are synonymous with current popular culture.

Moreover, this innovation, or business ploy, should instigate new technology developments from other competitors, only making Apple diverse and exclusive.  Without a headphone jack, Apple perpetuates its own longevity by locking consumers in to purchasing more Apple products.

Sometimes the wellbeing of the customer is not considered at all.  With this move, we stand to lose big time.  Now that our beloved headphones are obsolete, we must either purchase bulky adaptors or new headphones all together.  Those Beats Studio headphones you just bought? Yea, those are no longer functional, which means shelling out another $200+ to listen to music.

Its funny how the simplest changes result in huge revenues for a company.  I can’t say I’m upset with the Beats acquisition or this news because its kind of ingenious.  For a full read on this recent development, check out the article on Forbes.

Maxwell

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Quick Digestibles: Rival and Excludable Goods

Welcome back to another installment of Young Economics.  Today, I break down the differences between rivalrous and excludable goods with perhaps the savior of online education, Khan Academy.

Rivalry occurs in an economy when one person’s consumption of one unit of a good or service means no one else is able to consume it. Contrastingly, nonrival suggests that one person’s consumption of a good does not interfere with another’s consumption.

Excludability is defined as the inability to a consume a good so long as it is not paid for.  Therefore, a nonexcludable good constitutes as something that is consumed whether the good is paid for, as it is impossible to be prevented.

There are many scenarios in which a good may be any combination of both rival and excludable, rival and non excludable, non rival and non excludable, etc.  For example, private goods, such as my Oreos, which I refuse to share with anyone, are both rival and excludable.  My consumption of America’s favorite cookie directly inhibits my roommate or brother from coming along and trying to consume my delectable cookies.  Moreover, there is no legal way for me to eat Oreos unless I pay for them…I wonder how much money I spend a year on this Kryptonite.  Other private goods include, clothing (attention sneakerheads), haircuts, and even the laundry at college.

Then there are public goods, or non rival and non excludable goods, enter Khan Academy.  In a lot of cases, public goods are supplied by the government, like national defense and public schooling, but in this situation a public good, such as education, is being supplied by the super teacher, Salman Khan.  Khan Academy is a non-profit educational website that was created to provide “a free, world-class education for anyone, anywhere.”  My use of Khan Academy on their website or on YouTube, while I’m cramming for finals has no baring on the eighth grader in Texas trying to learn pre-Algebra.  You see, Khan Academy is so innovative and revolutionary because it has completely altered the perception of public education.  We all know that the public educational system in the United States needs reform, but with this website everyone of all ages can receive a free, world-class education without even leaving their home.  I guess that’s why Google and the Gates Foundation have each donated over $1 million dollars to the organization.  Avail yourself to the website , don’t you have some studying to do?

Maxwell

WTF is a Bitcoin?

Over the past several months, following the discovery of Silk Road, I’ve been hearing a lot about Bitcoins, the online currency.  For those of you who don’t know what Silk Road is, long story short, an inconspicuous man named, Ross William Ulbricht, was arrested by the FBI in early October for allegedly running an illegal online marketplace which housed everything from hitmen to illegal drugs.  According to reports, the market place is responsible for over $28 million in consumer transactions, the catch though, its all anonymous.  If you are interested about this former underground cyber network, I encourage you to check out this synopsis by USA Today .

Having been a pretty obscure and widespread news story, I feel as though a lot of people, including myself, don’t exactly know what a Bitcoin is.  I did some research so I could make this digestible post for you all.

A Bitcoin is not physical currency.  It was created in 2009 by pseudonymous developer Satoshi Nakamoto, as an online and anonymous currency.  It is not monitored or controlled by any federal entities, like the US Federal Reserve or the Federal Deposit Insurance Corporation, which means money invested in Bitcoin is at risk of being lost pending any major crashes in the volatile market.

Since Bitcoins are only online, they are created, or found, through a process called “mining” in which computer users attempt to solve mathematical algorithms related to the current number of Bitcoins.  The actual number of Bitcoins to be in circulation is fixed.  The Bitcoin Foundation claims that there can only be 21 million Bitcoins at a time; in circulation right now are about 12.3 million.  Don’t take this post and run with this whole idea of mining for Bitcoins, though.  The process takes up a large amount of space on a computer and special programs are utilized to complete the mining.

Currently, Bitcoin is a legal monetary system. It is a viable alternative for some because of its privacy, much like cash, and because it is unregulated by the government, those cynics and independent ‘stick-it-to-the-man’ hipster types can truly be autonomous with their finances.

CoinYe
Kanye West inspired Bitcoin

Right now, Bitcoin is hot.  Just last month a new Bitcoin company created their form of crypto-currency around rapper, Kanye West, calling it CoinYe.  Unfortunately, due to an ensuing legal battle with the rapper, Coinye has abandoned their project.  As a young investor or as someone who is looking for a ‘get rich quick’ scheme, I can see the allure of Bitcoin.  According to BlockChain , the market for Bitcoins was soaring over $900 USD until it took a tumble to a little over $500 earlier this month.  These fluctuations are not unfamiliar in this market.  You can see on the graph how many spikes and dips occurred over the past couple of months.  For now, Bitcoin is a mysterious novelty that continues to grow in popularity and infamy each and everyday.  As a young and prospective investor myself, I am wary of its volatility.  Perhaps one day it can become a stable and consistently profitable market.

Maxwell