[RISK UPDATE] A solid Wall St close on Thur after more encouraging US data (weekly claims and Jul pending home sales) has not really been matched by Asia/Pac bourses o/n, with the Nikkei still hampered by Yen strength and general economic/political uncertainty, but overall sentiment remains firm going into the monthly NFP lottery. EU services PMIs have to be negotiated before Fri's key release, but given advanced notice of the main EMU surveys from the flash readings it is only the UK outcome that may really catch markets on the hop (especially if worse than f/c like its manuf and construction counterparts). Back to the US and the Aug jobs data, anecdotal evidence in the run up has been somewhat mixed, but with a weaker bias. However, the payrolls release is lagging by nature and the headline number will be partially obscured by backward revisions, as usual. Hence, non-manuf ISM may yet steal the show

Next time you’re sitting at an airport bar and hear two businesspeople debate whether Apple (AAPL) is a technology or design company, chime in: "Nope. What Steve Jobs sells is pricing."

Pricing? You bet. Jobs is a master of using pricing decoys, reference prices, bundling, and obscurity to make you think his shiny aluminum toys are a good deal. Apple’s Sept. 1 announcement of new products was a classic example. The popular iPod Touch media player has been revamped at three price points, $229, $299, and $399—all costing more than the iPhone, which does everything the Touch can plus make phone calls. What gives? Watch Apple, and you can learn pricing tricks for your own business.

First, understand that pricing games are vital for Apple, because competition is fierce in the tech world and product hits just don’t last. The current iPad costs $499 in its lowest-powered configuration, vs. the Archos 7 Home Tablet ($189) or the Dell Streak ($299 with a two-year AT&T contract). And competitors are rushing to offer more functionality for hundreds of dollars less—the Streak tablet throws in a videocam and phone, which iPads don’t yet match. Apple’s touchscreen buzz window is closing fast, and even though it will inevitably add features—I predict the iPad will sport a camera, videocam, and phone within two years—today’s tech wonders, like the much-copied iPhone, become tomorrow’s commodity.

So let’s count the ways Apple defends itself with pricing:

1. Price decoys. The Economic Daily News of Taiwan reported in August that Apple has started to build smaller, 7-inch versions of its iPad tablet, timed to hit U.S. shelves before Christmas. If you wonder why in the world Apple would add yet another potentially cannibalizing product to its lineup of iPods, iPod Touches, iPads, laptops, and computers, realize that this gadget is likely a decoy. Decoys, in marketing, are products, services, or price points that a business doesn’t really want you to take, but rather use as a reference to make another product look better. Economist Dan Ariely, author of Predictably Irrational, gives the classic example of a Realtor who shows you a home that needs a new roof, right before taking you to a higher-priced house she really wants to sell. It’s hard to tell if a $400,000 colonial is a good deal—but compared with a $380,000 home that needs work, it looks damn good. Now consider, $499 for an iPad? Well, compared with a smaller one with fewer features, it suddenly looks great.

Decoys explain why Apple often sells each gadget in a pricing series, such as the new iPod Touch’s $229, $299, and $399 price points for different storage capacities. You may gladly spend $229 to get a hot media player, thinking it’s a deal vs. the highest-priced version … and not blink that you could instead buy an iPhone 4 at the lower price of $199 with more features. The $399 "decoy" has clouded your judgment. Apple wins the best of both worlds—stoking demand for products that look like bargains and for all the decoys it sells at much higher prices. Yes, some people will spend $399 for a music player with slightly better technology—and Apple makes even fatter margins.

2. Establish a high reference price. Behaviorial economist Richard Thaler has noted that consumers are really bad at making decisions about value, so constantly need "reference prices" for comparison. A dress costs $80. Is that too much? Not if it’s marked down 50 percent from $160. Trick is, that artificial $160 reference price may not really exist. Apple has played this game with itself by launching products such as the iPhone at artificially high reference prices—the iPhone cost $599 when it first hit the streets—and then rapidly lowering that price. Today, a $199 iPhone seems a steal; Apple in essence is using its first-iteration pricing as a reference to make its current products feel affordable. You may be on the fence for a $499 iPad, but if it drops to $399 by Christmas, won’t you feel better?

“You would think that shutting down software could be fairly simple from an end user’s view. If I ask you to shut it down, would you mind shutting it actually down, please? Well, it’s a bit more complicated than that, because you need to ask the user if they really want to shut down and if unsaved documents should be saved. And that warrants a patent that also covers Mac OS X. Next time you shut down Windows, remember how complicated it is for Windows to shut down. Perhaps that is the reason why this procedure can take minutes in some cases.”

Ping. Hmm, that sounds familiar. Isn't there another online service with a similar name? Also offered by a huge technology company? That was started in the mid-1970s?

Ding ding ding!

The Ping-Bing coincidence is surely one of those happenstances of this fast-changing and multifarious world — one in which many things occur at once and unrelated events often appear connected.

But isn't it tempting to think that at some point, in some Apple meeting during which Steve Jobs and company were choosing the name for their new social music service, some smart fellow brought up the major similarity between the working favorite name, Ping, and blood rival Microsoft's upstart search engine, Bing?

And that, at that moment, Jobs paused to think, smiled, and said, "All the better!"

(Apple declined to comment for this post; Microsoft has not yet responded to a request.)

As far as names go, you can't get any closer to Bing than Ping.  For starters, "bing" and "ping" are both onomatopoetic words for short little chime sounds. 

And the letters P and B are very close, both phonetically and orthographically. B is just a P with an extra curl on the bottom. And the B and P sounds are the English language's only two "bilabial plosives": speech sounds that use both lips and are created by stopping the airflow when you're speaking. (The M sound is bilabial but you don't have to stop the airflow — try making the sounds and you'll hear/feel the difference).

Even Microsoft likes the similarity of the word "ping": It looks like the Bing team was actually planning a feature called "Bing & Ping," which would help Bing users send search results to friends. Not clear whether Bing will be going forward with this.

Whether the naming similarity matters will depend on which service succeeds — and which fails.  Bing has increased its share of the search market more than 50% since last year. But it's had trouble stealing share from Google, which commands close to 65% of the market to Bing's 13.6%, according to Nielsen's July numbers.

Meanwhile, Ping is an upstart in the supersaturated social networking space, and it remains to be seen whether its rather baldly commercial aims will make it a strong Facebook competitor.

As far as which one is a better name? Well, Ping has several connotations that match with its underlying service. First, the musicality of the word itself, and second, the sense of connecting over a network that comes from the word's other, more technical meaning. Doesn't seem like "Bing" has much to do with searching, but I could be wrong.

Still, if Ping manages to become bigger than Bing, it will be a memorable zinger in the long battle between Apple and Microsoft.

– David Sarno

Image: A mash-up of the Bing and Ping logos. Credit: David Sarno / Los Angeles Times

The BBC has slammed the brakes on racing driver Ben Collins’s career as Top Gear’s The Stig following their High Court battle, according to sources.

Mr Collins is thought to be highly unlikely to return to television screens as the show’s faceless mystery driver after writing an autobiography.

There are also doubts over whether the character will reappear at all in the next series of the progr

ADVERTISEMENT

amme, even if another, different driver is found to play him.

A decision on whether The Stig will be axed altogether is expected in the next two months but is unlikely to be announced before the series starts in December.

The corporation took legal action to block publication by HarperCollins of the autobiography which would unmask Mr Collins’s identity.

But after more than a day of legal argument in private, Mr Justice Morgan said on Wednesday that he would not grant the BBC a temporary injunction.

Simon Dowson-Collins, HarperCollins’ director of legal services, said The Stig was in court yesterday – but added that the publisher would not confirm the mystery driver’s identity until the book launch on 16 September.

He said: “We were very surprised the BBC took such action to prevent freedom of expression. We maintained all along that the information is already in the public domain.”

It was widely reported that The Stig was Mr Collins after his company’s financial reports listed Top Gear among its work.

The BBC responded that this was “no surprise” as he had appeared numerous times on the programme and supplied drivers for it.

A spokesman for the BBC, which claimed the book would breach confidentiality obligations, said: “The Top Gear audience has always made it clear they enjoyed the mystery around the identity of The Stig. The BBC felt it important to protect that.”

Saskatchewan Energy Minister Bill Boyd said Thursday the province has commissioned an independent review of any takeover of fertilizer maker PotashCorp.

The Conference Board of Canada will analyze the risks and opportunities a deal would present.

Bill Boyd, the Saskatchewan minister of energy, says the review will be used in Saskatchewan’s submissions during the regulatory review of the PotashCorp takeover. (CBC)

Australian miner BHP Billiton launched a hostile $38.6-billion US, or $130-a-share, bid on Aug. 17.

PotashCorp rejected the BHP bid as too low, but a sweetened offer or white-knight bidder has yet to emerge.

The announcement came the same day as a large Alberta-based pension fund said it had been approached by potential rival bidders to help with an offer.

Leo de Bever, CEO of AIMCo, said it has been approached by some government wealth funds and others to make an offer.

De Bever said in a later interview that AIMCo and other funds had been approached by brokers looking to connect Chinese partners with Canadian players, with an eye to taking some kind of run at PotashCorp.

But de Bever cautioned that talks so far had been “academic and preliminary” and that no actual negotiations had taken place.

Chinese, Australian and other companies are also said to be weighing such bids, but they would likely have to line up Canadian financing partners such as AIMCo, the Canada Pension Plan Investment Board or the Ontario Teachers Pension Plan to help facilitate a rival bid.

Generally in these situations, a foreign bidder may seek “local cover” from pension funds to make the bid more “palatable,” de Bever said.

AIMCo is one of Canada’s biggest investment funds and handles $71 billion in assets on behalf of the Alberta government and its workers.

De Bever said he has had trouble working out an economic justification for a higher bid than BHP’s.

“Getting into a bidding war with BHP is not the best way to deploy our capital,” he told a news conference in Calgary ahead of the release of the pension fund’s annual report.

Maximum benefits

Boyd said the independent review will ensure that the people of Saskatchewan get the maximum benefits from the development of the province’s potash industry.

“No matter who owns the potash mines, the people of Saskatchewan own the potash,” Boyd said in a release.

The Conference Board will look at how a deal would affect jobs, government revenues, Saskatchewan’s position in the global potash industry and its reputation as a place to invest.

The government also wants the review to assess what governments can do to lower risk and increase opportunities.

Boyd said he wants the report done by Sept. 30th and promised to make it public.

He said it will be used in Saskatchewan’s submissions to Industry Canada, the federal agency that would review a takeover under the Investment Canada Act.

With files from The Canadian Press

The Consumer Product Safety Commission on Thursday issued a recall of 41,000 Toshiba laptops after reports of some overheating and even melting.

Toshiba posted its own recall of several models of its Satellite T130 laptops on its product support forums last week.

The CPSC said 129 instances of “overheating and deforming the plastic casing area around the AC adapter plug” had been reported. Two of those reports resulted in “minor burn injuries that did not require medical attention” and two in minor property damage.

For more of this story, read Toshiba recalls 41,000 laptops for overheating on CNET News.

A fuel tanker carrying 9 million litres of diesel fuel has run aground in the Northwest Passage, the Canadian Coast Guard confirmed Thursday.

Coast guard officials say the merchant tanker Nanny, which is owned by Woodward’s Oil Ltd., ran aground on a sandbar Wednesday in Simpson Strait, about 50 kilometres southwest of the community of Gjoa Haven in western Nunavut.

“The coast guard ship Henry Larsen has just entered the area. I believe it’s at anchor just off of Gjoa Haven as we speak,” Larry Trigatti, an environmental response official with the coast guard, told CBC News on Thursday afternoon.

“It’s monitoring the situation by helicopter. As you can imagine, there are some shoals in the area, so we want to be very careful in going into that zone.”

Woodward’s is a major oil supplier to Canada’s Arctic. The tanker has been carrying diesel to resupply Gjoa Haven and other remote communities in the region.

No diesel is believed to have spilled, and the ship’s crew is safe, Trigatti said. The ship is a modern double-hulled product tanker, according to the coast guard.

View Larger Map

Samsung Electronics Co. is unveiling a new tablet PC named Galaxy Tab as the latest device meant to rival Apple Inc.’s popular iPad.

Samsung Europe executive Thomas Richter said Thursday the device will offer users “a new galaxy of possibilities” with features such as mobile video conferencing and a video chat function.

The thin tablet device weighs 13.4 ounces (380 grams) and has a 7-inch (18-centimeter) touch screen. Richter said it comes with Google Inc.’s Android 2.2 operating system and Adobe’s Flash Player.

Samsung said at a Berlin consumer electronics fair the price of the device will depend on telecommunications operators through which it will be available starting next month.

The Associated Press

NEW YORK — The bidding contest between computer makers Hewlett-Packard (NYSE: HPQ) and Dell (Nasdaq: DELL) for the data storage company 3Par (NYSE: PAR) is ovber

 Even before Dell could make its latest offer public on Thursday, HP came back with a higher bid.

Dell shortly thereafter conceded defeat.

Dell said Thursday it won’t match HP’s offer to pay $33 per share for 3Par, or about $2.07 billion. Dell’s decision came barely an hour after 3Par announced it had received Dell’s revised offer of $32 per share and then the even stronger bid from HP.

In a statement, 3Par said Dell’s revised offer contained new terms that it found unacceptable, including a multiyear reseller agreement with Dell that would remain in effect even if 3Par were to be bought by another company.

The board of 3Par deemed HP’s offer superior. It’s 83 percent above Dell’s first offer and more than three times what 3Par stock was trading at then.

"We took a measured approach throughout the process and have decided to end these discussions," said Dave Johnson, Dell’s senior vice president for corporate strategy.

Shares of 3Par increased 74 cents, or 2.3 percent, to $32.82 in morning trading Thursday. Before Dell conceded, 3Par shares were trading as high as $33.84 as investors expected Dell to match or beat HP’s $33-per-share offer.

Dell shares jumped 15 cents, or 1.3 percent, to $12.29, while shares of HP, which is based in Palo Alto, Calif., increased 21 cents, or 0.5 percent, to $39.42.

Dell, which is based in Round Rock, Texas, made the first offer for 3Par on Aug. 16, at $18 per share. As part of an agreement between the two companies, Fremont, Calif.-based 3Par must pay Dell a $72 million termination fee.

HP and Dell, two of the world’s largest personal computer makers, were looking at 3Par as a way to build up their data center and "cloud computing" businesses, delivering software, data storage and other services to customers over the Internet.

Both companies are racing to expand beyond the PC business, where profits are shrinking. Computer makers have been slashing prices to stay competitive, while the cost of LCD screens, memory and other parts has increased.

The hardware and consulting services that Dell, HP and others sell to big enterprises come with richer profits; now, technology providers see cloud computing as the next area of big growth and sweeter profits.

Increasingly, companies aren’t buying their own computer servers for certain tasks anymore. Instead, they’re paying to have software they would have stored on those machines delivered to them over the Internet.

Dell, HP and others are taking advantage of the nascent trend by offering cloud-computing services on a subscription basis and selling equipment and software to help customers build their own cloud systems.

Cloud computing can help reduce data-center expenses because the systems are designed to be shared by multiple customers, which spreads out the cost of operating pricey equipment. The servers and storage computers need to ramp up or scale down quickly based on demand to give all the customers the same high level of service. Storage machines from 3Par are made for that kind of system.

Analysts have been divided on whether buying 3Par was a make-or-break move for either Dell or HP. HP has its own line of high-end storage appliances similar to what 3Par could bring, while Dell resells technology from data-storage leader EMC Corp.

Shaw Wu, a Kaufman Bros. analyst, questioned the extent to which Dell or HP would benefit in the near term from buying 3Par. In a recent interview, Wu likened the bidding for 3Par with the contest last year between EMC and rival NetApp Inc. for a company called Data Domain. EMC ultimately won.

"One could argue, has it really transformed EMC? Not really," Wu said. "Has not buying – has it hurt NetApp? Not really."

But Forrester Research analyst Andrew Reichman took the opposing stance.

"I think that in this acquisition, both HP and Dell cannot afford to lose," said Reichman.

The analyst said he doesn’t believe there’s another comparable company that Dell could buy to round out its product line.

HP’s own technology is also aging, Reichman said. He said that if HP lost after being willing to pay so much for 3Par, it would have had a hard time convincing customers that its existing line of storage system was adequate.