Localytics used the top 20 countries for mobile devices between December 1 and 20 to establish a baseline. The average daily activation rate for this period was compared to the average for December 25 and 26, to allow for devices given on Christmas to be activated the next day.

In episode 3 of their excellent Critical Path podcast, Horace Dediu and Dan Benjamin raise the prospect of Apple using its $66 billion cash horde to ramp production throughput.

Many cash-rich companies encountering a supply problem might be tempted to take the obvious path of acquiring a manufacturer; a number of industry commentators have suggested over recent months that Apple should simply buy Foxconn or Pegatron. Apple, however, has already employed a more lateral approach – one that avoids the pitfalls many companies might fall into. As Horace pointed out in his show, Apple is using its cash to offer supplier finance to selected device manufacturers, in return for favorable terms. I believe Apple has thoughtfully chosen this strategy over overtly buying into a manufacturer.

Here are my Top Five reasons why Apple might not want to buy its factories:

5) Loss of clout: Apple’s buying power commands a lot of attention from the huge number of suppliers of the components in its products. Choosing favorites by buying some suppliers risks losing the attention of the others – potentially handing their preference to Apple’s competitors. Retaining a broad range of partnerships gives Apple leverage and builds resilience into their supply chain.

4) Innovation occurs in the supply chain: Apple does well by cherry-picking components from a broad range of component suppliers. They need the ability to switch out components and suppliers at will.

3) Commoditisation: Apple tends to introduce new technologies earlier than the broader market, so they end up funding development of manufacturing techniques. However, as production improvements and volume commoditises new components, Apple needs competition between manufacturers to drive prices down.

2) Competition: Apple is able to leverage the risk that it may take it’s business elsewhere as a tool for keeping prices low. They do this with Foxconn and Pegatron; Samsung and Taiwan Semiconductor; Qualcomm and Infineon; etc.

The number one reason that I don’t think Apple would buy a manufacturer is…

1) Labour arbitrage: Apple is just too successful to own a factory in China, Taiwan or Brazil. If Apple bought Foxconn, for example, they would be besieged by demands for pay increases from the workforce. The only reason this doesn’t happen now is that the labour movement in China knows Apple can take it’s business elsewhere if they push too hard. There is a reason Apple is helping Foxconn open factories in Brazil.

It seems to me Apple’s options for managing supply constraints are more limited than they might seem at face value, but Apple is once again very cleverly treading a treacherous path by making strategic (and secret) investments in their partner’s capabilities, in return for favorable terms.

• Android 33% (up 7%)
• BlackBerry 29% (down 5%)
• iPhone 25% (flat)

Blodget goes on to say:

The Android gains matter because technology platform markets tend to standardize around a single dominant platform. And the more dominant the platform becomes, the more valuable it becomes and the harder it becomes to dislodge. The network effect kicks in, and developers building products designed to work with the platform devote more and more of their energy to the platform. The reward for building and working with other platforms, meanwhile, drops, and gradually developers stop developing for them.

But is market share a reliable metric of network effect? Google doesn’t charge handset manufacturers or carriers for using Android, so it should sell more strongly than Apple’s more expensive iPhone. It takes a conscious decision to pay extra for an iPhone, whereas carriers are giving Android handsets to many customers by default.  These customers may have little or no loyalty to the Android brand. In fact, many of them do not even know their phone is running Android.

As an alternative to market share as a metric of network effect, it may be more objective to consider mind share. Network effect is at least partly a social phenomenon. While ever a platform consciously commands people’s hearts and minds, it is presumably more likely to become dominant over competing platforms.

The Google Insights for Search chart below offers a comparison of worldwide search patterns for the terms ‘iPhone’, ‘iPad’, ‘Android’, ‘BlackBerry’ and ‘Windows Mobile’ over the 65 months since the iPhone was first rumoured. While searches for the term ‘Android’ are keeping pace with the term ‘iPad’, they have a long way to go before they catch searches for ‘iPhone’.

The chart may suggest that Apple remains well ahead in the race toward mind share, and therefore platform domination.

It’s a familiar refrain from the music industry: revenue is down and piracy is to blame. That’s the gist of the the International Federation of the Phonographic Industry’s (IFPI) annual Digial Music Report, which points to a slowdown in the growth of digital music sales.

It’s piracy, not licensing, that the IFPI cites as the major obstacle to a thriving music industry, citing job losses and “victimized” developing artists. Addressing this, according to the report, is the government’s responsibility, and it argues that as such it can “turn the tide against piracy in 2011.”

But I say there’s a longer-standing, more potent reason the music industry is in tatters.

Back in its hey-day, music companies gave music to radio stations around the world, in the form of albums and singles. In return, radio stations promoted the label’s artists and created buzz for them. The radio industry could ‘chart’ a new act to national fame and fortune in weeks. Every successful artist earned millions for the music labels. This is how the Beatles, the Rolling Stones, Abba and Stevie Wonder were made.

But the music industry got greedy. They decided to start charging radio stations for the right to play their music. In doing so, they forced the radio industry to adopt two new strategies that would ultimately damage the entire music value chain:

1. Radio stations pared back their playlists to a small range of cheaper ‘back catalogue’ songs. Stations became ‘golden oldies’, ‘hits of the eighties’ or ‘classic rock’. No new acts were broken, because no new tracks were licensed. The music labels had effectively begun starving their own pipeline.
2. The stations increased the ratio of Advertisements & Talk Vs Music in a two-pronged approach: to reduce the number of tracks they played (thereby reducing royalty payments); and increase ad revenue in order to afford the royalty fees on those tracks they did play. Audience numbers suffered, as listeners grew frustrated at the lack of music played. At around this time Apple released the iPod, delivering a completely ad-free music experience to consumers.

Without radio stations curating or commercialising acts, discovery of new artists is incredibly difficult for the average consumer. iTunes and Amazon endlessly rehash Justin Timberlake, Kanye West and Shakira because they simply don’t have the means attract attention to new acts. They can only sell the artists who have already generated buzz elsewhere.

The music industry will continue to blame piracy for their declining sales, but the reality is that they started suffocating themselves years ago by closing off their most effective avenue to market.

Microsoft CEO, Steve Ballmer, announced Windows Phone 7 in New York on Monday. Ballmer hopes his new mobile OS will pull back the market share he has lost to smartphone rivals RIMM, Apple and Android.

Windows Phone 7 starts with a handicap, missing key features that are available in some competitor’s phones but not present in Microsoft’s new devices. These include copy/paste, tethering, Flash support, HTML5 support and multi-tasking.

The Sydney Morning Herald says Windows Phone 7 will be available in Australia soon:

Over the next two months five Windows Phone 7 handsets will be available in Australia from HTC, LG and Samsung. The handsets, the first of which will be launched next week, include the HTC 7 Mozart and 7 Trophy, the LG Optimus 7 and Optimus 7 Q and the Samsung Omnia 7.