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JUNE 25, 2007
Edited by Deborah Stead and Mich Talk Show "[It] is so far off the scale, it defies any attempts to make sense out of it." —David Menlow, president of research firm IPO Financial Network, on the bonanza awaiting Blackstone Group Chief Executive Stephen Schwarzman when the private equity firm goes public in the coming months, as reported by The Washington Post. BUYER'S GUIDE Five Things To Know About The iPhone 1. WHERE CAN I GET ONE? The iPhone goes on sale at 6 p.m. on June 29 in AT&T (formerly Cingular) stores, Apple outlets, and the Apple.com Web site. If a store is sold out, you can still buy a phone (and select a plan) for later pickup or delivery. Officials at the companies believe it will be available to anyone who wants one by the end of July. Both AT&T and Apple are hiring additional staff to handle the early crush of sales. But as Apple has been training its store and telephone support staff since May to walk customers through the iPhone's many features, you may want to head there first. These folks, after all, will let you play with the gear. 2. WHO'S IT FOR? The iPhone is being sold as an all-in-one replacement for your iPod, BlackBerry, and digital camera. Someday it may be just that. But $499 is a lot to spend for only 4 gigabytes of memory. And don't forget the $60 a month you may pay for service and a data plan. Such an expensive device should appeal to gadget lovers who want to connect to their corporate e-mail and other serious work applications, though typing may be awkward on the virtual keyboard. The phone allows you to grab personal e-mail from services such as Google (GOOG ) and Yahoo!, but security issues may prompt big employers to prevent access to corporate accounts. Ask your IT folks if they have a plan. And there's no easy way to sync up with Microsoft Outlook e-mail. 3. SHOULD I WAIT UNTIL THEY WORK OUT THE KINKS? There are sure to be glitches in this first version. The good news: Apple plans automatic updates you can download when you sync the phone with iTunes. Slow connection speeds will be mitigated by built-in Wi-Fi that lets you Web-surf at broadband hotspots. 4. WHAT IF I GET IT HOME AND DON'T LIKE IT? AT&T usually offers 30-day, no-questions returns, but here it's deferring to Apple's 14-day return policy. Wireless service problems should be directed to AT&T; Apple will handle most hardware and software issues. Ask about warranty coverage; it is usually limited to 90 days and doesn't cover breakage. Apple sells extended warranties. 5. HOW'S IT COMPARE WITH OTHER HIGH-END PHONES? The upside: The iPhone's "multi-touch" screen is simplicity itself, ditching mechanical buttons to free up screen space. The display adjusts to save power. The downside: iPhone is locked in to AT&T's network. Roaming fees can pile up if you're on other GSM networks, such as Rogers Wireless (RG ) in Canada and Orange in Europe. You may not get a data connection everywhere. And the battery isn't replaceable, so keep a charger handy. By Cliff Edwards   BUYER'S GUIDE Online Extra: Video: iPhone Anticipation In this video, BusinessWeek Senior Technology Editor Cliff Edwards gives us the lowdown on the most highly anticipated piece of technology this year—the iPhone. Apple is hoping to shake up the smart phone category with its release. Cliff will give us his perspective on it and tips on the best way to get your hands on one when they are available on June 29th. REWIND Roadblocks Ahead For Investors? As bridges, roads, and other parts of America's infrastructure are increasingly privatized, they've become a hot commodity on Wall Street (BW—May 7). Now some Democrats on the Hill are trying to check the trend, in which investors pay into the billions for leases on assets like the Chicago Skyway or the Indiana Toll Road in exchange for the cash flows from tolls and other user fees. On June 4, two key Democrats on the House Transportation & Infrastructure Committee issued a report asserting that such public-private transportation partnerships "can supplement—but not provide a substitute for—public investments." Committee Chairman James Oberstar (D-Minn.) and Representative Peter DeFazio (D-Ore.) called on states to protect the public from price gouging and ensure that state revenues garnered from such deals are used solely for transportation. They also want to shorten lease periods, which can run to 99 years. Experts estimate that $100 billion worth of public property could change hands in the next two years. But the Democrats' stance—backed by the trucking industry, which fears rising tolls—could be a political roadblock for investors like Goldman Sachs (GS ), which has raised a multibillion-dollar infrastructure fund to pursue such deals. By Eamon Javers SKILL-BUILDING The Games Managers Play That colleague who sneaks online to play games during work just might be your boss someday. According to a new study by IBM (IBM ), some multiplayer games teach skills needed to manage a modern multinational. The computer giant hired software maker Seriosity to watch people play hundreds of hours of games where leadership is required. IBM also surveyed more than 200 players among its own managers. The finding:Those immersed in online worlds linking millions of participants, such as World of Warcraft, get good at gathering information from far-flung sources, assessing risk, and moving quickly to the next challenge. IBM says the study, to be released on June 15, shows such games could be "management flight simulators" for those trying to lead global teams. IBM has good reason to stress the positives of online gaming. It has been fashioning itself as the go-to consultant for businesses considering using games, with more than 250 clients. Come September, it will launch its own game for companies, Innov8, which lets players test their hands at, say, redesigning a call center. And you thought golf was the way to get ahead. By Aili McConnon SPORTING PLASTIC Take Me Out With A Gift Card This Father's Day, Major League Baseball is hoping the kids skip ties and tools for plastic. Teaming up with gift-card titan Blackhawk Network, baseball is marketing $25 and $50 cards to be used toward tickets, merchandise, and concessions. Blackhawk, a unit of Safeway (SWY ), already distributes gift cards for Visa and more than 225 retail brands, including Macy's (M ), Best Buy (BBY ), and Starbucks (SBUX ). Problem is, sales are seasonal: More than 40% come in November and December. (The gift card industry as a whole gets about 30% of its sales in the holiday months, according to Mercator Advisory Group.) Cards for pro sports could spread out those sales, says Jim Strabo, vice-president for Blackhawk's sports initiative. Blackhawk offers an MLB card that can be used leaguewide. It has also struck deals with the NBA, NFL, NHL, and Major League Soccer, expecting a majority of teams in each—except the newest, MLS—to sell cards by yearend. Available through team Web sites and retailers, and redeemable online or at games, the cards can double as a marketing tool. The San Francisco Giants gives them to season ticket holders and groups and may use them as vouchers for rained-out games. Ken Logan, the Giants' IT director, says 2006 gift card sales topped $1 million. The cards, he says, are "a great opportunity to get the brand buzzing all year round." By Elizabeth Woyke FOODSTUFF O.K. Kids, Name That Chip Nacho Cheese, Cool Ranch... X-13D? The mysterious name is on packages of the latest flavor of Doritos, which hit stores last month. Following its user-created Super Bowl ads earlier this year, Doritos is asking consumers to name the new product—which tastes a bit like a mayo-sauced cheeseburger—by submitting suggestions on the Web. The promotion is all about enticing teenagers and spreading Dorito buzz online, says Ann Mukherjee, vice-president for marketing at Frito-Lay (PEP ). To spark curiosity, Doritos sold the black bags of chips on eBay (EBAY ) two weeks ahead of shipping them to stores. With 100,000 suggestions so far (Cheeseburgeritos, anyone?), Doritos says it hasn't decided whether it will use any of them—or even if it will re-release the flavor after the 5 million-bag shipment sells out. Sparking consumer involvement is the point, says Mukherjee. It's savvy marketing, says Jeff Jaffe, president of consultancy Crayon. "This partners with the consumer," he says, "and puts the product front-and-center as the hero." By Burt Helm BLOGSPOTTING China Syndrome benross.net/wordpress Benjamin Ross of Kansas City went to China in 2004 to teach English and stayed to immerse himself in Chinese life. His blog—sprawling as the southeastern province of Fujian, where he lives—gives a real feel for what has and hasn't changed in China. From his perch at the barber shop where he's a trainee (a monthlong gig), Ross, who also writes for online Journal Orbus Investor, delivers some keen insights on China's working class. By Kristen Lease OUTSOURCING Hello India? Er, Des Moines? Most call centers catering to American customers are in the U.S., not overseas, contrary to what many people may think. That's just one finding in a new study—the largest ever—of 2,500 call centers in 17 countries. Led by Cornell University, the survey shows that most call centers serve their own domestic markets. India is an obvious exception, with 73% serving foreigners. (Indian centers also average 741 employees, compared with 96 to 396 in the U.S., depending on the sector.) "The kinds of calls that are going offshore continue to be very simple transactions," says Rosemary Batt, professor of human resource studies at Cornell and a lead author of the report. Here's a sampling of what else the researchers found about the world on the other end of the line. By Kerry Miller OUTSOURCING 
TV GUISE Hot Young CEOs With Time To Burn? Americans can't get enough TV shows about cops and docs. Suits are another matter. The $treet, a stock-trader drama, was canceled after 12 episodes on Fox in 2001. Still, ABC will try the corporate setting with this fall's Big Shots, an hour-long drama series—airing on Thursday nights after the popular Grey's Anatomy—about the professional and personal problems of a quartet of CEOs. Creator Jon Harmon Feldman, a writer and producer for The Wonder Years and Dawson's Creek, has the show's CEOs run outfits with real-enough names. James (Michael Vartan, formerly of Alias) heads up Amerimart, a thinly disguised Wal-Mart (WMT ), and Duncan (Dylan McDermott, ex-star of The Practice) runs Reveal—think Revlon (REV ) Cosmetics. Then there's Karl (onetime West Wing actor Joshua Malina): He's chief of Fidelity Pharmaceuticals, which, in one scene, has a problem with a Viagra shipment. The only CEO who's not at a giant corporation, Brody (comedian Christopher Titus), heads his own consultancy, Alpha. "I thought it was great to not have to do another doctor or lawyer show," Feldman says. "I wanted to be 10 years ahead." (He may have competition sooner: Doug Ellin, who created HBO's Entourage, is planning a series for the cable network about a hedge fund tycoon.) Snippets of the show provided by ABC contain some dialogue that might pass for C-suite talk: murmurs about insider-trading charges in a crowd scene and a reference to Herb Allen's annual Sun Valley conference. Still, this is Hollywood. All the Big Shots are in their late 30s. (According to executive search firm Spencer Stuart, the median age of CEOs of S&P 500 companies hovers around 55.) And buff. Their fictional jobs allow enough gym time for them to look great lounging poolside at the country club they use as a refuge from work and wives. As they talk about their steamy personal lives, they occasionally morph into Desperate Husbands. (Charles McDougall, a Desperate Housewives director, did this show's pilot.) Feldman makes no apologies for taking liberties. "It's not a documentary," he says. "Is there a hospital with doctors who look like the cast of Grey's Anatomy?" By Reena Jana Question Of The Week With Apple's (AAPL ) feature-laden iPhone about to launch, we ask: What have mobile makers overlooked? "The mobile carriers should open their networks so our phones can add software as easily as our PCs can." — Esther Dyson, chairman, EDventure "I'd like a subscription plan that provides a new phone every three months and recycles the old phone somehow—sort of a steak-of-the-month club for geeks." — John Maeda, associate research director, MIT Media Lab "I think a cool new function a phone should have is photo editing, so that you can give a photo some quick touch-ups." — Sean Zaccheo, 17, senior, Birmingham High School, Lake Balboa, Calif.
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