Apple, the Cloud and Two Jewish Chickens

On May 12, 2014, Ed Bott posted an article entitled: “Apple and the cloud: A magnificent missed opportunity“. It is a scathing critique of Apple’s efforts to master the cloud. It’s very well written and well worth a read.

Only, here’s the thing. While Mr. Bott’s obeservations seem accurate, his analysis and conclusions are wildly off base because the cloud “opportunity” he thinks Apple has missed is not the cloud opportunity Apple is — or should be — pursuing.

Target miss

Snippets

Here’s a couple of snippets from Mr. Bott’s article:

— So, three and a half years later, how far have Apple’s cloud efforts progressed? Compared to the leaders in the cloud ecosystem, not very far at all.

— Apple’s iCloud is, first and foremost, a backup target for iOS devices, a job it does reasonably well. But on every other modern yardstick for cloud computing it falls short.

— Apple has been bumbling along for a decade with @mac.com and @me.com and now @icloud.com addresses, but there’s no evidence they’ve gained any traction…

— Apple has some very capable iOS and OS X apps in its iWork suite: Pages, Numbers, and Keynote…but there are no equivalent apps for non-Apple-branded devices…

— Apple has nothing in (the general-purpose online storage) space.

— iCloud syncs photos and videos from iPhones to the cloud and then to other devices. … Windows PCs have limited support; Android devices are unsupported.

Bott concludes:

In short, Apple is in no danger of becoming a “devices and services” company anytime soon.

Misdiagnosis

When I read Ed Bott’s article and its conclusion, I simply have to shake my head. Bott points out target after target after target Apple has missed — apparently oblivious of the fact Apple is not, will not and should not be aiming at those targets.

Bott’s misdiagnosis of Apple’s aims is all the more baffling because he clearly identifies Apple’s goals at the very start of his article:

(Steve) Jobs…remained firmly wedded to Apple’s walled garden. His directive…is extraordinarily blunt: “tie all of our products together, so we further lock customers into our ecosystem.”

In other words, Apple is pursuing a vertical strategy. They want to own the whole “stack” — hardware, operating system, and services — and make that stack, i.e., that ecosystem, so appealing that new customers will be drawn to it and existing customers will never want to leave it. You can Google the words “Apple customer retention” and judge for yourself whether or not their strategy is succeeding.

why, Why, WHY?

If Ed Bott knows that Apple is pursuing a vertical strategy, then why is he bemoaning the fact that Apple is not pursuing a HORIZONTAL cloud strategy?

— Why, why, why would Apple need their mail client to “gain traction” so long as others are more than willing to fill that need?

— Why, why, why would Apple want to provide suites of apps that ran on non-Apple branded devices?

— Why, why, why would Apple want to enter and compete in the general purpose online storage space, a space that serves both Apple and non-Apple device owners?

— Why, why, why would Apple want to provide iCloud-like photo and video syncing to Windows and Android devices?

Microsoft And The Jewish Chicken

Mr. Bott normally analyzes Microsoft. In my opinion, for the past 15 years Microsoft has had one of the most convoluted and wrong-headed business models in all of tech. They had no focus, they had no aim, they had no guiding strategic vision.

Perhaps Mr. Bott has stared at the “sun” that is Microsoft for so long he is now blinded to the possibility that others do not want, have no interest, and are actively avoiding the trap of simultaneouly pursuing incompatible vertical and horitzonal business aims. Claiming that Apple is “missing” an opportunity to become a “devices and services” company is simply bizarre because that was Steve Ballmer’s deluded goal for Microsoft — never Steve Jobs’ goal for Apple.

Which reminds me of a joke:

Cartoon Frantic Brown Chicken

A Jewish woman had two chickens. One got sick, so the woman made chicken soup out of the other one to help the sick one get well. ~ Henny Youngman

Ed Bott wants Apple to kill their healthy vertical chicken and turn it into soup so it can be used to nurse to health a horizonal chicken that only exists in Ed Bott’s fevered imagination. It’s simply not going to happen.

Conclusion

Until Ed Bott understands the targets Apple is, and ought to be, aiming for, he should stay out of the business of judging whether or not Apple has hit those targets.

Some Tech Critics Are Like Eunuchs In A Harem

Some Tech critics are like eunuchs in a harem. They see it done, they see how it should be done, but they can’t do it themselves or derive any pleasure from it, so they conclude that it’s a waste of time and effort. ((Inspired by: “Critics are like eunuchs in a harem. They’re there every night, they see it done every night, they see how it should be done every night, but they can’t do it themselves. Brendan Behan, quoted in M. Sullivan, Brendan Behan: A Life (1997)”))

The Premise

Christopher Mims, writing for Quartz:

2013 was a lost year for tech

All in, 2013 was an embarrassment for the entire tech industry

[pullquote]Oh, look! A dead horse! Where’s my stick?[/pullquote]

Mim’s article has already been critiqued, in detail, by the likes of John Gruber, Apple 2.0, and Daniel Eran Dilger. But never let it be said that I’m above piling on. To paraphrase Dorothy Parker: “This is not an article to be tossed aside lightly. Rather, it should be thrown with great force.”

For that reason, I present to you (some of) what’s wrong with Christopher Mims’ critique of tech in 2013.

Commodities

2013 was the year smartphones became commodities…

Prices for good tablets have similarly collapsed.

What Mims claims is fine and all except for one thing — it just ain’t true.

A commodity is a class of goods for which there is demand, but which is supplied without qualitative differentiation across a market. A commodity has full or partial fungibility; that is, the market treats its instances as equivalent or nearly so with no regard to who produced them.

Phones and tablets are anything but commodities. I could prove that in some detail, but I don’t need to. One can tell that phones and tablets are not a commodity simply by looking at the wide disparity in their prices.

To miss something that obvious isn’t easy to do, but Mims — in this article, at least — seems to be up to the challenge.

LESSON #1: YOUR DEFINITIONS HAVE TO BE RIGHT

If you don’t know the proper definition of a term, don’t use that term to support your argument.

Creative Destruction

Mims cites all of the following as signs that ‘2013 Was a Lost Year for Tech’:

Microsoft lost nearly a billion dollars on the Surface RT tablet…

Microsoft CEO Steve Ballmer will be pushed out…

Microsoft bought Nokia‘s devices business….

The outlook wasn’t much better for Intel…

BlackBerry…proved to be a near-total loss.

(T)he best that can be said so far (of Hewlett-Packard) is that it’s gracefully managing its own decline.

[pullquote](E)very wrong attempt discarded is a step forward. ~ Thomas Edison[/pullquote]

In viewing the above, any student of economics would come to the exact opposite conclusion that Mims did. 2013 was not a lost year. Far from it. It was a year of turmoil and turnover — the very embodiment of creative destruction.

“Creative destruction is a process through which something new brings about the demise of whatever existed before it. The term is used in a variety of areas including economics, corporate governance, product development, technology and marketing. In product development, for example, creative destruction is roughly synonymous with disruptive technology.” ~ Wikipedia

LESSON #2: YOUR THEORY HAS TO BE RIGHT

If you don’t know the proper economic theory, don’t use it to support your argument.

Planned Obsolescence

(Apple) crippled many older iPhones and led to complaints of planned obsolescence.

John Gruber refutes this argument, in detail, here.

[pullquote]People everywhere confuse what they read … with news. ~ A. J. Liebli[/pullquote]

Mims’ naked assertion that iOS7 crippled older iPhones is particularly grating. If you’re going to build an argument, you have to build it on a firm foundation. And if you’re going to make an extraordinary claim, then you have to provide extraordinary proof to support it. Instead, people like Mims simply make spurious claims and then build elaborate arguments on top of virtually nothing. It’s the equivalent of building a skyscraper on quicksand.

LESSON #3: YOUR FACTS HAVE TO BE RIGHT

If you can’t support your facts, don’t use them to support your arguments.

Making Us Sick

(Apple introduced) animate(d) 3D effects that make some users feel ill…

Really?

Seriously?

[pullquote]Little things affect little minds. ~ Disraeli[/pullquote]

This is one of the buttresses Mims uses to support his contention that 2013 was a lost year in tech? Would he have similarly claimed that the Model-T, and every car that succeeded it, was a failure because it made some people car sick?

This is a textbook display of the cognitive distortion known as all-or-nothing thinking:

“All-or-nothing thinking: seeing things in black or white as opposed to shades of gray; thinking in terms of false dilemmas. Involves using terms like “always”, “every” or “never” when this is neither true, nor equivalent to the truth.”

Yes, some very few users of iOS 7 did suffer from motion sickness. Yes, Apple immediately released an update to remove the offending motion, if desired. Talk about throwing out the baby with the bath water. Mims discards all that is good in iOS 7 because he detects one trivial, easily correctable, flaw.

If Mims believes that progress comes without problems — and that any problem, no matter how trivial, outweighs all of progresses’ benefits — then he’d better get used to disappointment. And he’d better stop writing about tech.

LESSON #4: YOU’VE GOT TO KEEP THINGS IN PERSPECTIVE

One should never make a mountain out of a molehill.

Lulls

If it’s in the nature of progress to move in leaps, there are necessarily lulls in between. …2013 was a great big dud for technology as a whole.

[pullquote] We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten. ~ Bill Gates[/pullquote]

Lull? Lull? Does Mim even know what a lull is?

Geez, get some perspective man. 2013 was anything but a “lull”. Rather, it was a rapid acceleration of some important trends — like a car accelerating from 30 mph to 60 mph. Technology moved so fast in 2013, it was like trying to read Playboy magazine with your wife turning the pages.

Millions upon millions of people who never before had access to cellular or WiFi data connected in 2013. Millions upon millions of people who never before owned a computer bought one in 2013. Millions upon millions of feature phones were converted into smartphones in 2013.

More smartphones – which is A COMPUTER THAT FITS IN YOUR POCKET – were sold in a single quarter of 2013 than PCs were sold all year.

Perhaps Mims’ world wasn’t rocked in 2013 — but the worlds of tens of millions of ordinary folk was, and the world, as a whole, was changed forever.

LESSON #5: PERSPECTIVE MATTERS

If you don’t know the difference between gliding and accelerating, then stop criticizing the racers and stay safely on the sidelines.

No Breakthrough Products

Not a single breakthrough product was unveiled…

Apple’s new iOS7 mobile operating system…felt “more like a Microsoft release”…

(A) faster processor in the iPhone 5S…

(A) fingerprint sensor that solved a problem that wasn’t exactly pressing.

[pullquote]What? No unicorns in 2013? All of 2013? Shame. ~ Horace Dediu (@asymco)[/pullquote]

Mim’s whining that there were no tech breakthroughs in 2013 comes off as childish, impatient, petulant. He’s the worst kind of critic — having accomplished nothing himself, he demands annual miracles from others.

But that’s not the worst of it. Mim’s true sin is that he exposes his embarrassing lack of competence for all to see.

The role of the critic is to learn more, know more, understand more about their chosen field and to expose the unseen and explain the misunderstood to his audience. Even more, excellent critiquing consists of seeing what everybody else has seen and noticing what nobody else has noticed.

Does Mims do that? On the contrary.

Big things start small. The gardner sees the giant oak tree in the smallest acorn. Mims, on the other hand, expects the oak tree to appear fully grown.

LESSON #6: The great thing in this world is not so much where you stand, as in what direction you are moving. ~ Oliver Wendell Holmes

Conclusion

[pullquote]You are not superior just because you see the world in an odious light. ~ Vicomte de Chateaubriand[/pullquote]

If one looks for the bad in tech, one will surely find it. But is that the proper goal of tech journalism?

It seems to me that our job is to illuminate the fog. And while some use the light to illuminate, others use it to obscure.

Some people seem to think that innovation means change. And some think that change means innovation. But innovation doesn’t just mean change, it means making things better. And if you measure 2013 by that standard, then 2013 wasn’t a lost year, it was a year of change and change for the better.

And that’s worth writing about.

Apple’s Definition Of “Winning”

We are winning with our products in all the ways that are most important to us, in customer satisfaction, in product usage and in customer loyalty. ~ Tim Cook, Apple earnings call

Customer satisfaction. Product usage. Customer loyalty.

Is Tim Cook right? Is Apple really winning in those areas? And is that really what’s most important?

Customer Satisfaction

Based on their most recently published research, ChangeWave measured a 96% customer satisfaction rate among iPhone users and a 99% customer satisfaction rate among those who owned iPads. Impressive, to say the least.

Product Usage

Experian reported that iPhone users spend an average of 53% more time each day on their phones than Android phone users. Nearly two-thirds of iOS devices are already running iOS 7. The App Store now has over 60 billion downloads. And Apple has nearly doubled its total payout to app developers this year — now at $13 billion, up from $7 billion in January.

“Regardless of what you might hear or read about how many are bought or sold or activated, iPad is used more than any of the rest. And not just a little more, a lot more. The iPad is used more than four times more than all of those other tablets put together.” ~ Tim Cook

Now before your read on, stop and think about that for a moment. The iPad is used four times more than all other tablets put together. Astounding.

Industry analyst, Alexander, noted that “In an increasingly bifurcated tablet market, Apple has yet to experience any serious competition for the premier customer, particularly those users wanting to do more with a tablet than watch videos, surf the Web, and do email….”

If usage is the defining criterion, then there are actually very few tablets that are directly competing with the iPad.

Customer Loyalty

Based on the most recently published research, Kantar measured a 92% customer loyalty rate among Apple customers, significantly higher than that of the competition.

Summary

Based on the above, I think it’s fair to conclude that Apple is “winning” in Customer Satisfaction, Product Usage, and Customer Loyalty. But is that what matters? What about things like profits, growth, innovation, and market share? Aren’t they what really matter?

But, Apple Is Not Growing…

True enough. Apple has not released any significant new products over the past year and, consequently, they have not grown over they past year either. But they have remained extremely profitable.

apple-profitsFor example, Apple’s sales of 33.8 million iPhones earned more than the combined sales of 211.2 million phones sold by the rest of the world’s top 5 phone makers.

Still, profit without growth is like sex without love. It’s an empty experience…

…but, as empty experiences go, it’s one of the very best.

Eventually, Apple will have to grow or die. But in the meantime. Apple, can take solace in the fact that they’re making money hand over fist, while simultaneously screwing the competition, to boot.

But, But, Lack Of Innovation…

Many analysts covering Apple are bearish, citing ‘dwindling catalysts.’ But seriously, who are they to judge? Those self-same analysts missed every catalyst that Apple ever caught on their ride from last to first.

They are ill discoverers that think there is no land, when they can see nothing but sea.” ~ Francis Bacon

Apple naysayers act like small children who think that if something is out of sight, it ceases to exist. Just because THEY can’t see what’s coming down the pike doesn’t mean that Apple and others can’t see it. As always, it’s a question of vision. And I’d put Apple’s vision up against the analysts’ any day of the week.

But, But, But, Growth Should Be Constant, Continuous, Ever Upward…

Really? Show me an example of something healthy, where growth was constant and ever upward and I’ll show you the exception to the rule.

A child of five would understand this. Send someone to fetch a child of five. ~ Groucho Marx

NO ONE is always at their best. Well, I take that back…

Only the mediocre are always at their best.” ~ Jean Giraudoux

Sun Tzu said that “Energy may be likened to the bending of a crossbow; decision, to the releasing of a trigger.” A bowman needs to pull the bow before releasing the arrow. The arrow won’t go very far if he doesn’t take the time and effort to do so. Similarly, a company needs to do the preparation before releasing a new product.

I means, seriously, do I really need to cite Sun Tzu in order to make this point? New products take time to prepare. Duh.

There Is A Season For Everything

You’d be a pretty poor farmer if you planted the seed and then walked away before the harvest. And you’d be a pretty poor investor if you thought that every season was harvest season and no season was to be set aside for the planting.

Don’t judge each day by the harvest you reap, but by the seeds you plant. ~ Robert Louis Stevenson

Apples critics deny the realities of life. They want rain without thunder and lightning. They want crops without plowing the ground. ((Inspired by Frederick Douglass))

When clouds form in the skies we know that rain will follow but we must not wait for it. Nothing will be achieved by attempting to interfere with the future before the time is ripe. Patience is needed. ~ I Ching

I mean, are you prepared to argue with the freakin’ I Ching?

I didn’t think so.

When you walk through a farm, some see the (beauty), some only observe the manure. ~ Henri Matisse

Manure is often used to fertilize crops. If you can’t stand the sight of manure and you can’t patiently wait for the seed to ripen, don’t become a farmer. And if you can’t stand the turmoil of the market and you can’t patiently wait for an investment to mature, don’t become an investor.

Warren Buffett said Apple is run ‘for the investors who are going to stay, not the ones who are going to leave.’ Which are you? Do you walk away in the Spring or do you wait for the Autumn to arrive?

But, But, But, But, market share, Market Share, MARKET SHARE!!!

If you see the world in black and white, you’re missing important grey matter.” ~ Jack Fyock

Apple regularly fires some of its customers for the sake of empowering its target market. News Flash: Apple has been “ignoring” a large portion of its potential customer base since 1996. They could have done worse.

For example since Google’s IPO, Google is up 833.8%. On the other hand, since Google’s IPO, Apple is up 3200.2%. Not bad for a company that doesn’t cow-tow to market share.

What the heck do you think the phrase “target market” means anyway? If you “target” everyone, you target no one. Seems to me that Apple is aiming for the premium market and their aim, so far, has been spot on.

And remember, just because YOU’RE not the target market doesn’t mean there is no target market.

The Critics Have Big Buts

“Critics? I love every bone in their heads.” ~ Eugene O’Neill

There seems to be a law in human nature which draws us to passionately condemn the preeminently successful. For every action there is an equal and opposite critical reaction.

The critics are always ready to give Apple the full benefit of their inexperience and are never without multiple ways for how Apple should spend its wealth. Some critics even think that they are more powerful than God. After all, Jesus was only able to turn water into a wine but critics are able to turn anything they focus upon into a whine.

Look, everyone has the right to be stupid. But some of Apple’s critics are abusing the privilege.

Watch Carefully What Apple’s Competitors Are Complaining About

Companies like Samsung and Microsoft spend their time criticizing those very aspects of Apple that they would most like to emulate. Samsung mocks Apple’s customer’s for standing in line? Microsoft mocks Apple’s tablets for their inability to do “real” work? Don’t kid yourself. They’d both cut off your right arm to have what Apple has.

Watch what people are cynical about, and one can often discover what they lack. ~ George S. Patton

Turns out that copying products is easy. Copying the culture that produced those products is hard.

Investors

The eight most terrifying words for any CEO must be: “I’m Carl Icahn and I’m here to help.”

Sheesh, thanks but no thanks.

And as if Carl Icahn weren’t bad enough, other investors are demanding that Apple lower its prices in order to capture more market share. Market share sounds great and all, but what they’re really talking about is a price war. As Pliny the Younger put it, “An object in possession seldom retains the same charm that it had in pursuit.” A price war is a delightful thing to those who don’t have to participate in it, but a rather frightful thing for those who have to pay for it.

When the gods wish to punish us, they answer our prayers. ~ Oscar Wilde

Sadly, A CEO must always be prepared to defend his company against his investors.

The right to be heard does not automatically include the right to be taken seriously. ~ Hubert H. Humphrey

Lessons To Unlearn

We should be careful to get out of an experience only the wisdom that is in it—and stop there; lest we be like the cat that sits down on a hot stove-lid. She will never sit down on a hot stove-lid again—and that is well; but also she will never sit down on a cold one anymore. ~ Mark Twain

I think that most critics are like a cat that sat on a hot stove-lid. They got burned when Apple fell in the nineties, misdiagnosed the cause of that failure as missing market share, and they haven’t stopped lecturing Apple on the wrong lesson ever since.

Memory is the greatest of artists… ~ Maurice Baring

Meanwhile, the very actions that the critics are begging Apple to stop taking are also the very actions that have made Apple successful for the past 13 years. It’s like telling a football coach that wins Super Bowl, after Super Bowl, After Super Bowl, that he’s doing it all wrong.

New Facts Demand New Conclusions

Logic?” Jim says. “What’s that?” The professor says, “I’ll give you an example. Do you own a weed eater?” “Yeah.” “Then logically speaking, because you own a weed eater, I presume you have a yard.” “That’s true, I do have a yard.” “I’m not done,” the professor says. “Because you have a yard, I think that logically speaking, you have a house.” “Yes, I do have a house.” “And because you have a house, I think that you might logically have a family.” “Yes, I have a family.” “So, because you have a family, then logically you must have a wife. And because you have a wife, then logic tells me you must be a heterosexual.” “I am a heterosexual. That’s amazing! You were able to find out all of that just because I have a weed eater.”

Excited to take the class, Jim shakes the professor’s hand and leaves to go meet Bob at the bar. He tells Bob about how he is signed up for Logic. “Logic?” Bob says, “What’s that?” “I’ll give you an example,” says Jim. “Do you have a weed eater?” “No.” “Then you’re gay.”

Apple’s critics seem to rely upon a similar chain of “logic” to predict Apple’s future. Apple doesn’t have majority market share (a weed eater) so they must be doomed.

We should all be so lucky as to be as “doomed” as Apple is.

After a battle in the War of the Spanish Succession (1701–14) Villars, the defeated commander of the French forces, was justified in writing to King Louis, “If God gives us another defeat like this, your Majesty’s enemies will be destroyed.” His judgment was prophetic in so far as the battle proved to have cost the allies their hopes of victory in the war.

Apple could rightfully claim nearly the same as Villars. Should Apple “suffer” another “disastrous” year like 2013, their competitors will be utterly destroyed.

Look, maybe Apple is doomed, maybe they’re not. But Apple’s critics have got to start coming up with better reasons for predicting Apple’s demise ’cause the same tired old reasons they keep trotting out and using over and over again just ain’t cutting it.

Attention, Attention! The naysayers have been predicting Apple’s demise since 1997 – and for the very same reasons. All the while Apple, by ignoring their critics, has merely grown to become the richest company in the free world.

Criticize Apple all you want, but please, come up with something that hasn’t been proven wrong year after year after year for the past 13 years.

“We’ve clearly never seen a tech company like this before. Perhaps it’s time to stop using tired PC tech company metaphors to predict their future.” ~ Ben Thompson

Listening For Genius

The principle mark of genius is not perfection but originality, the opening of new frontiers.” ~ Arthur Koestler

If a company values its profits more than its vision, it will first forfeit its vision and subsequently forfeit its profits, too.

Talent hits a target no one else can hit. Genius hits a target no one else can see.” ~ Arthur Schopenhauer

Look, there’s risk in everything. But Apple has proven itself successful by doing things their way.

I’d rather be a failure in something that I love than a success in something that I hate. ~ George Burns

The Stoic Philosopher, Thales, when asked “What is difficult?” replied “To know oneself.” When asked “What is easy?” he said “To give another advice.”

Critics shout boldly, but genius speaks in a whisper. Perhaps, in lieu of shouting instructions at Apple, we should be quietly listening and learning from them, instead.

Markets, Not Pundits, Matter

pundit |ˈpəndit| noun | An expert in a particular subject or field who is frequently called on to give opinions about it to the public.

I write about tech. I like to pretend that I’m an expert. So I guess I could describe myself as a pundit.

An expert is one who knows more and more about less and less. ~ Nicholas Murray Butler

Sadly, I’ve become discouraged with many of my fellow pundits. (Present company excepted, of course!) Oh, there’s the click-baiters (and the master-click-baiters) out there, but I’m not talking about them. I’m talking about people who take their opinions seriously…but perhaps just a bit too seriously.

A man is getting along on the road to wisdom when he begins to realize that his opinion is just an opinion.

I can only assume that many of these pundits have miraculously learned how to write without learning how to read because, if they could read their stuff, they would surely stop writing it.

Blessed is the man who, having nothing to say, abstains from giving in words evidence of the fact. ~ George Eliot

Let me just throw out two quick examples for your consideration:

  • In the Summer, Apple announced iOS7. Pundits were horrified. Tasteless. Childish. A sure sign that Apple was doomed.

    And the public reaction to iOS7? Oh yeah, a big hit.

  • In the Fall, Apple announced a gold iPhone 5S. Pundits were horrified. Tasteless. Childish. A sure sign that Apple was doomed.

    And the public reaction to the gold iPhone? Last I heard, gold iPhones were being sold for as much as $1,800 a pop on eBay.

New Apple product X is announced. Pundits & analysts say X will fail. X breaks all previous sales records. Step. Rinse. Repeat. ~ Nick Bilton (@nickbilton)

I’m not saying that Pundits shouldn’t express their opinions – of course they should, and in the strongest terms.

I have opinions of my own, strong opinions, but I don’t always agree with them. ~ G.W. Bush

All I’m saying is that we should keep in mind that it is the opinion of the market — not the opinion of the pundit — that matters. The pundit votes with their opinions. The market votes with their dollars. The market wins every time. We should be trying to shape our opinions to reflect the market not pretending that the market is a reflection of our opinions.

I am a thinker with writing problems. ~ John Kirk

Now, don’t get me wrong. I have no trouble with stirring the pot. As a former attorney, I can find a problem for every solution. But stirring the pot is supposed to improve the stew, not burn it.

Be a fountain, not a drain. ~ Rex Hudler

Arthur C. Clarke once said that new ideas pass through three periods (in the minds of critics):

— It can’t be done.
— It probably can be done, but it’s not worth doing.
— I knew it was a good idea all along!

It’s a given that critics will always think this way. But if we’re doing our job as pundits, we should be watchful of – and cautioning against – falling into the traps set by stages 1 and 2.

It may be asking too much to expect Pundits to act as Prophets, but is it really asking so very much that they not play the role of fools and jackanapes?

You don’t write because you want to say something; you write because you’ve got something to say.” ~ F. Scott Fitzgerald

Author’s Note: I’ve been twittering a lot of late. Come join me @johnkirk and get your tweet quoted in my next article (…or not).

Apple And The “Noah” Rule

Critics: Apple Has Nothing Under Construction

Following Apple’s iPhone Event last Tuesday, September 10th, the Pundits – echoed by the stock market – have been relentlessly critical of Apple’s iPhone 5C pricing strategy. Investors have driven Apple’s shares down more than 10% since last week’s event. Snippets from some of the commentary:

(Author’s note: You don’t have to read every snippet. But you might want to re-read them after I’ve made my point.)

  • (A) common theme emerges: Apple should have used the device to establish a new iPhone price band low enough to drive growth in big, price-sensitive markets like China. But it chose not to, essentially doubling down on the market’s increasingly more saturated higher end, and protecting its high margins. And, in doing so, it has — for the time being — forfeited the market’s massive not-at-all-saturated lower end to Android. ~ Source
  • “(Innovation) has slowed down,” said Laurence Balter, chief market strategist at Oracle Investment Research, when asked about innovation at Apple. ~ Source
  • (I)nvestors and consumers alike are wondering if innovation is truly stalled without the late co-founder Steve Jobs at the helm. ~ Source
  • Jobs is believed to have left Apple with a pipeline of product plans and new ideas, but the longer we get from his passing, and the longer it takes for those products to come out, the more investors may question their existence. ~ Source
  • In his (biography of Steve Jobs), Isaacson wrote that Jobs left Apple a pipeline of innovative products for several years. “We are not seeing them yet,” Isaacson said. ~ Source
  • Indeed, (what they’ve shown us is) not an innovation at all, but merely a refinement and systematic roll-out of an old idea…. ~ Source
  • Many expected chief designer Jony Ive to carry Jobs’s visionary torch, but so far, it’s not clear if he has the equivalent vision.” ~ Source
  • “The C in 5C does not mean ‘cheap’ as I had hoped. It means clueless, as in clueless about how the vast majority of new smartphone users are paying for their phones.” ~ Fred Wilson
  • “Just how far behind is Apple trying to fall? I do not get Tuesday’s release and product launches. Something is just wrong,” Doug Kass of Seabreeze Partners Management said in a note Wednesday. Customers in emerging markets are price-sensitive and want a lower-priced phone, but the iPhone 5C — or “iPhone dud,” as Kass describes it — won’t be cheap enough to drive market share gains that could lead to earnings growth.
  • “I think (Steve jobs) would have abhorred plastic, he would have thrown that out the window,” said Balter.” ~ Source
  • “Maybe we should call him ‘Timid Tim,’” Troy Wolverton writes for The San Jose Mercury News. “As Tuesday’s iPhone event showed yet again, Apple under CEO Tim Cook is anything but bold,” Wolverton writes.
  • (Cook) has demonstrated a spectacular lack of imagination as to how to spend Apple’s riches. ~ Source
  • What (the pricing policy) doesn’t represent is any clear answer about where Apple goes when that engine finally runs out of fuel. ~ Source
  • People keep believing there will be a “next big thing” at some point, but the fact is there is no next iPhone, at least in terms of the amount of value it has created in such a short time. ~ Source
  • (Apple) seems to have no idea what to do with that embarrassment of riches except to try to grow it just a bit more and that isn’t a strategy, it’s score keeping. ~ Source
  • Apple is suffering a classic case of The Innovator’s Dilemma. It invented the modern smartphone, profited wildly, and is watching the industry change beneath it. But it can’t seem to do anything about it except try to wring out as much profit from the existing business model as possible. ~ Source
  • It’s hard to be the one to kill your own golden goose and it’s much harder to know when the right time to do that is, but increasingly it feels like the time has already come for Apple. ~ Source
  • In the end, Cook chose to spare the golden goose. But the goose will eventually be cooked. Whether the CEO has a plan for that remains to be seen. ~ Source
  • These days, Apple is more like a fashion label than an electronics company….Apple is becoming more like Prada and less like Edison. ~ Source
  • Some are questioning how much more innovation is really even possible in smartphones right now. Scott McGregor, CEO of Broadcom Inc. BRCM +2.45%  said a few weeks ago in a press round table discussion that he believed innovation in smartphones had stalled. ~ Source

Pop Quiz #1

Who said:

“If you’re long-term oriented, customer interests and shareholder interests are aligned.”

See answer, below.

How Construction Works And How Construction Looks To Outsiders

(I)t’s worth noting that Apple’s strategic choice is confounding for another reason. Consider the lucky man who builds a great business and finds himself wealthy beyond imagination. He builds a grand palace overlooking the ocean. Over time, though, he realizes the cliffs are eroding beneath his palace. He could do something radical, like move his palace to higher ground or spread his real estate holdings across many different regions. Instead, he chooses to buy some new carpet and repaint. ~ Mark Rogowsky

Really, Mark? Apple’s just been sitting on its hands, not doing any additional construction? If that’s what you think, then it is no wonder that you’re confounded. Let’s take your analogy and run with it, shall we?

Construction houseIn construction, there are roughly five phases: ((There are, of course many phases, which use many names. This is just one variant.)) Foundation, Framing, Rough-In, Close-In and Finish.

Foundation: Easy to see progress. Big earth movers come in, dig out the foundation and block is laid.

Framing: Also easy for outsiders to see progress. The outline of the building quickly rises atop the foundation.

Rough-In: At this point, if you’re watching the construction, you may feel that everything has come to a screeching halt. This is when the water, electric, sewer, etc, is connected to the house. Much of the work is done underground and all of it is nearly invisible to the outside observer.

Close-In: After the Rough-In is completed, the house is “closed-in” – made watertight – and the interior infrastructure, such as air and heating ducts, electrical wiring, plumbing, etc. is added. This phase is frustrating to watch too. Although lots and lots of work is going, to the casual observers, it seems like little is happening.

Finish: Now we’re talking. Lots of action and lots to see. The floors go in, the drywall goes up, there’s spackling and painting and the cabinets and tubs, etc. are put in. Lots or motion, lots of changes, lots of progress for the casual observer to readily appreciate.

Mark Rogowsky, and the other pundits, are claiming that Apple is idly watching the metaphorical ground beneath its business being washed away while taking no more action than to “buy some new carpet and repaint.” I think this is a childish claim that blatantly ignores the known facts. Apple is doing lots and lots and lots of new “construction” to their business, however, to the casual observer, the construction appears to have come to a grinding halt because Apple is currently moving from the “Rough-In” phase of the construction to the “Close-In” phase. But just because the casual observer cannot SEE a lot of activity does not mean that Apple has not been active. On the contrary, the savvy observer can clearly see that Apple – like any good construction company – is quietly installing the infrastructure necessary to support a huge additional build-out.

Pop Quiz #2

Who said:

“We are willing to think long-term. We start with the customer and work backwards. And, very importantly, we are willing to be misunderstood for long periods of time.”

See answer, below.

Close-In

So, what kind of infrastructure (mostly hidden from the public eye) has Apple been putting into place recently? Well, contrary to common belief, there’s been a LOT of activity, so let’s just list it in alphabetical order.

Appearances often are deceiving. ~ Aesop

A7 Processor:

— “Desktop class architecture”

Speed to spare, and hard to catch from behind.

While Samsung was going for brawn w/ 8 cores, Apple went for brains w/ 64-bit. ~ Adam J. Reid (@read_reid)

No one else can go 64-bit any time soon because the backward compatibility tax is too large to support. ~ Steve Cheney (@stevecheney)

It will be amazing to see what developers do to take advantage of 64 bit and create new class of applications. ~ ßen ßajarin (@BenBajarin)

Apple TV:

— Not the one that exists today, but the the one that is yet to come; the one powered by the new A7 chip, running iOS and using the new gaming controls (see “Games”).

Bluetooth:

— Bluetooth Low Energy (BLE), a technology that has been in Apple laptops since 2011 and in all phones since the iPhone 4S. Apple simply throws a switch, and 200 million users are good to go — no waiting for NFC chips.

Carriers

— DoCoMo: Biggest carrier in Japan

— China Mobile: Biggest carrier in world

— ‘Nuff said.

Cases:

— “Cases?”, I hear you say. “Cases aren’t innovative. Well, just chew on the following data a bit before you make a final decision on that point:

Apple’s case for the iPhone 5S: $39 For the 5C: $29 Nokia’s average selling price for feature phones: $34 ~ Benedict Evans (@BenedictEvans)

Enterprise:

Forrester jumping on the “5S will be a big deal for business” bandwagon (I’m the driver) ~ Ben Thompson (@monkbent)

Free Software:

— iOS 7, All five iOS iWork and iLife apps, iWorks and iLife in the Cloud, (and possibly OS X Mavericks, too) all free.

Games

Game Controller Framework

Apple’s big bet on iOS 7 gaming

iBeacons:

— With iBeacon, Apple is going to embrace the internet of things.

Bluetooth Low Energy support in the form of iBeacons. An announcement that might well start a little revolution, not so much because Apple invented it (in fact they did not…) but because iOS support of any protocol that more of less makes sense usually ends up in a drastic uptake of its usage, and this particular protocol happens to really make sense.

— Replacing NFC

Indoor applications for iBeacons

Cash Registers

eCommerce

The Internet of things

iPhone 5C Product Placement:

— For all intents and purposes, Apple’s mainstream iPhone (the iPhone 5C) just dropped in price by $100.

What exactly did Apple just do? Amongst other things, halved the US price of the iPhone. ~ Benedict Evans (@BenedictEvans)

— You can’t market a one-year-old phone. Apple is already marketing the begeezus out of the iPhone 5C.

The 5C to me seems more like a play at not making the iPhone 5 feel like the “old version.” Which could work brilliantly ~ Abdel Ibrahim (@abdophoto)

— The iPhone 5C is to the MacBook as the iPhone 5S is to the MacBook Pro. The former is the company’s standard, the latter is company’s premium offering.

Does anyone really think typical consumers will see a blue iPhone 5c in store & say “oh, it’s just last year’s chipset in a new enclosure”? ~ Benedict Evans (@BenedictEvans)

iOS 7:

“The vivid realization of hardware and software together in one device.”

iTunes Radio:

Pandora’s box might have just been slammed shut.

M7 Coprocessor:

— M7 knows when you’re walking, running, or even driving. The combination of the M7 and iBeacon promises richer contextual computing.

Apple co-opting wearable tech by putting the … sensors into the phone. ~ Benedict Evans (@BenedictEvans)

Apple saw a job to be done around fitness so they did the only sensible thing: designed and built a new chip, the motion coprocessor. ~ Horace Dediu (@asymco)

Maps:

Around this time a year ago, Tim Cook wrote a letter to Apple’s customers apologizing for Maps. Exactly a month later, Apple announced a major executive reshuffle. Forstall resigned. Jony Ive took charge of Human Interface in addition to Industrial Design. A new Technologies group was created, led by Bob Mansfield, who returned from retirement. Federighi and Cue took over additional responsibilities as well.

Failure is success if we learn from it. – Malcolm Forbes

Mac Pro:

Over the top power.

OS X Mavericks

— Pending…any day now…

Passbook

— Mobile payments — The Holy Grail of eCommerce.

Passbook seems like a good way to extend finger scanner to 3rd parties. Controlled, no 3rd party code. ‘Unlock this pass with your finger’ ~ Benedict Evans (@BenedictEvans)

Touch ID:

— The foundation for customer convenience, personal privacy, enterprise and government security, in-person and on-line payments, and more.

The above items are the building blocks for Apple’s future. They are the equivalent of the infrastructure – ducts and the pipes and the electrical wiring – that is the very blood and guts of a new home.

Apple has not been idle – far from it. They’ve been patiently laying the groundwork for a whole new Apple, one built on a whole new foundation.

Pop Quiz #3

Who said:

“Invention requires a long-term willingness to be misunderstood. You do something that you genuinely believe in, that you have conviction about, but for a long period of time, well-meaning people may criticize that effort. When you receive criticism from well-meaning people, it pays to ask, ‘Are they right?’ And if they are, you need to adapt what they’re doing. If they’re not right, if you really have conviction that they’re not right, you need to have that long-term willingness to be misunderstood.”

See answer, below.

Finish

A building has integrity just like a man. And just as seldom. ~ Ayn Rand

What will Apple’s construction look like when it’s finished? It’s always hard to tell during the Close-In phase, and it’s even harder to tell when one is looking on from the outside, as we are. So I make no promises.

PATIENT: Doctor Doctor, will this ointment clear up my spots?
DOCTOR: I never make rash promises!

However, I – and anyone who has been truly paying attention – can tell you that Apple is slowly, methodically, painstakingly, laying the foundation for the next stage of their existence. To think or say otherwise is simply wrong-headed.

There are no shortcuts to any place worth going. ~ Publilius Syrus

Conclusion

No innovation at all…Tim Cook has demonstrated a spectacular lack of imagination as to how to spend Apple’s riches…Apple has no answer about where to go when the profit engine finally runs out of fuel…There is no next iPhone…Apple is watching the industry change beneath it, but can’t seem to do anything about it…One wonders how much more innovation is really even possible…

Really? Seriously? Honestly?

Are the pundits watching the same Apple that you and I are watching?

Things happen fairly slowly, you know. They do. These waves of technology, you can see them way before they happen, and you just have to choose wisely which ones you’re going to surf. If you choose unwisely, then you can waste a lot of energy, but if you choose wisely it actually unfolds fairly slowly. It takes years. ~ Steve Jobs

Based on the available evidence, which seems more likely: Apple has stopped working on innovating or the pundits have forgotten how innovation works?

Worldly wisdom teaches that it is better for reputation to fail conventionally than to succeed unconventionally.’ — John Maynard Keynes, The General Theory of Employment, Interest and Money.

The pundits want Apple to fail in the conventional way (like Microsoft, and so many other tech companies have). Apple has a different idea in mind. They want to succeed in an unconventional way.

Apple believes in the “Noah” rule.” ((Predicting rain doesn’t count; building arks does. ~ Warren Buffett)) While the pundits are spending their time predicting rain, Apple is spending their time building an Ark.

Pop Quiz Redux

Who said:

“If you’re long-term oriented, customer interests and shareholder interests are aligned.”

“We are willing to think long-term. We start with the customer and work backwards. And, very importantly, we are willing to be misunderstood for long periods of time.”

“Invention requires a long-term willingness to be misunderstood. You do something that you genuinely believe in, that you have conviction about, but for a long period of time, well-meaning people may criticize that effort. When you receive criticism from well-meaning people, it pays to ask, ‘Are they right?’ And if they are, you need to adapt what they’re doing. If they’re not right, if you really have conviction that they’re not right, you need to have that long-term willingness to be misunderstood.”

Answers:

1) Jeff Bezos
2) Jeff Bezos
3) Jeff Bezos

Surprised? The pundits love Jeff Bezos. Why don’t they love Apple? Apple is following Bezos’ advice to a “T”.

Pompous Premature Postulations And Predictions Are The Pontificating Pundits’ Purpose And Purview

A PUNDIT walks into a bar and starts drinking quite heavily. After a while he starts bothering the barman, (who happens to beTim Cook), about the air-conditioning – first he asks for the air-conditioning to be turned up because it is too hot, then he asks for it to be turned down because it is too cold. This goes on for a couple of hours. To the surprise of others, the barman is very patient, walking back and forth and being very accommodating. Finally an observer asks, ‘Why don’t you just throw him out?’

‘Oh, I don’t care,’ says Tim Cook with a grin.

‘We don’t actually have an air-conditioner…

Tim Cook is ignoring the pundits’ constant griping. We should too.

Apple Can’t Innovate Anymore, My A$$

I am sick to death of pundits proclaiming that Apple can no longer innovate. Apparently, the less one knows about a subject, the more strident one’s opinion on that subject becomes. Nevertheless, this nonsensical posturing has simply got to stop, for it is easier to believe a lie that you have heard a thousand times, than the truth that you have heard only once.

Can’t innovate anymore, my ass. ~ Phil Schiller

The critic’s arguments seem to break into two categories, which are really two sides of the same coin:
— Apple desperately needs to enter a new product category;
— (But it’s already too late because) Apple can’t innovate anymore.

Apple Desperately Needs To Enter A New Product Category

Apple again seen losing steam, new products needed desperately
Apple managed to earn $9.5 billion in profit on $43.6 billion in sales last quarter without launching any exciting new devices, but the long wait for new launches is expected to begin taking its toll this quarter.

Apple’s business model forces it to constantly come up with groundbreaking new products
“At most companies, a year without a major new product release isn’t cause for panic. But Apple isn’t most companies. The problem with that business model is that it forces Apple to constantly come up with a groundbreaking new product.”

Apple needs new hardware
“There’s two reasons Apple needs new hardware: To prove it can still create killer new product categories post-Steve Jobs and because that’s how it makes its money.”

Find a new category to go innovate
“I keep trying to tell Apple…” Misek says, “Find a new category to go innovate.”

Any man who thinks he knows all the answers most likely misunderstood the questions.

Apple, a once-great innovator
“With Apple wrapping up its developer conference this week, the contrast between the once-great innovator that brought the world into the smartphone and tablet era and current Silicon Valley revolutionary Google couldn’t have been more stark … innovation is ideas like Google Glass, which represent new paradigms of human interaction with technology.”

Apple’s trailblazing days are over
“Google’s gaming console: The latest sign that Apple’s trailblazing days are over?”

Apple hasn’t been able to enter any major new product categories in years
“Apple’s stock hasn’t slid because it’s been putting out uninspired hardware — it’s slid because the company hasn’t been able to enter any major new product categories in years….”

If it can’t reinvent a category again soon, Apple could be in big trouble “(Apple) transformed itself from a niche company in the computer world to one that created entirely new categories of gadgets. If it can’t do that again soon, Apple could be in big trouble.”

The list of areas where Apple can repeat its act is dwindling
“In the past, Apple snuck up on people. It entered markets filled with clunky, overly-geeky products, released groundbreaking consumer-friendly versions, and established its dominance before rivals had the chance to respond … But today, we have huge companies investing millions of dollars in products that Apple “may release in the future.” … If there’s any area in which Apple can innovate, chances are, someone has already imagined it, written a blog post about it, Photoshopped it, and created a ready-made blueprint for any company that wants to gamble on it. … The list of areas where Apple can repeat its swoop-in-and-turn-the-industry-upside-down act is dwindling. ((The list of areas where Apple’s opportunities are supposedly dwindling: “TV? Microsoft beat Apple to the punch with futuristic voice and gesture control, and Hollywood doesn’t appear willing to let anyone innovate on the content distribution front. Wearables? Everyone and their mother is making a smartwatch, and Google has Glass locked, loaded, and almost ready to fire. Mobile/desktop PC convergence? Microsoft has already put its chips in that basket. … and then there’s gaming. The established players Sony and Microsoft are continuing to innovate, and now that Google is reportedly making this Android-based gaming console, that’s one less way that Apple can sneak in the backdoor and set the house on fire”.))

By the time Apple does it, it will have already been done
“(L)ike just about every other possible area of innovation, it’s becoming less and less likely that we’ll see more Apple “trailblazing.” … By the time Apple does it (no matter what it is), it will have already been done … and probably much more elegantly than the pre-iPod MP3 players, pre-iPhone smartphones, or pre-iPad tablet PCs.”

iWatch will be another hobby
“Just Like Apple TV, The Apple iWatch Will Be Another Hobby For Tim Cook”

Apple outfoxed: Foxconn first
“Apple outfoxed: Foxconn first to debut iPhone-compatible smartwatch”

Samsung is already working on a watch
“…Samsung …is already working on a watch of its own.”
Samsung unveiled games console first
“Sorry Google And Apple: Samsung Unveiled Games Console First”

Google to beat Apple to products Apple is reportedly developing
“WSJ: Google working on an Android-powered game system, smart watch and new Nexus Q … its reason for jumping into all these categories is to beat products Apple is reportedly developing in the same categories….”

(But It’s Already Too Late Because) Apple Can’t Innovate Anymore

It’s harder to innovate once you’re the incumbent
“Apple’s problem is that it becomes harder to innovate once you’re the incumbent rather than the challenger”.

Apple is not innovative
“Quite frankly, Apple is not innovative…”

Apple aren’t innovating any more
“(Apple) have a right to be proud of their accomplishments, but it’s not surprising that pundits claim they aren’t innovating any more.”

Apple is no longer a leader
“Apple is no longer a leader. Apple has become a challenger that now needs to look up to other leaders across the multiple categories it competes in and figure out what to do next.”

Apple is just another product company
“(T)herein lies the rub and the real tragedy: Apple is quickly becoming just another product company….”

Another company out-innovating Apple
“Cramer: Another Company Out-Innovating Apple?”

Apple has become a design follower
“Apple has become a design follower instead of a leader — and it may be just fine with that”

Apple is a lagging brand
“Apple’s Fall From Leading To Lagging Brand”

Stunning nine month gap between product events
“Apple will hold its first major product event in nine months on Monday, a stunning gap for a company that relies on regularly impressing customers with new innovations.”

A bear walks into a bar and says, “Bartender, I’d like a gin . . . . . . . . . . . . . . . . and tonic.” And the bartender says, “Sure, but what’s with the big pause?”

Jony Ive is meddling in software
“Sir Jony has been trapped in a monochromatic hardware world of his own making for so long that now that he’s allowed to meddle in software, he’s pulled out that box of Crayolas he’s kept locked in the bottom drawer and let loose his inner Wonderland.”

The end for Apple exceptionalism
“iOS 7 redesign: the beginning of the end for Apple”

Apple plays catch up
“Apple’s primary motivation (with iOS 7) was to play catch up with… no, not Android but with Microsoft.”

All been done before “…Apple has not only failed to truly innovate in its own right, the changes and additions it has introduced (in iOS 7) have all been done before.”

Nothing new
“Is iOS 7 Apple’s admission that it has nothing new to bring to the table?”

I miss John Dvorak and Rob Enderle…but my aim is improving. ~ John Kirk

The Wide Lens

“The farther back you can look, the farther forward you are likely to see.” ~ Winston Churchill

I mean, honestly, could Apple’s critics be any more wrong? Could they have it any more backwards? Do they know nothing at all about Apple or the Tech industry? The very people who seem most certain of Apple’s future (or lack thereof) are also the very people who seem most ignorant of Apple’s past. The following lengthy excerpts are quoted from Ron Adner’s: “The Wide Lens: What Successful Innovators See That Others Miss.”

[pullquote]Jobs tended to be late for everything because he wanted everything to be ready for him[/pullquote]

“(Steve) Jobs tended to be late for everything because he wanted everything to be ready for him. Jobs understood that the natural trajectory of challenges is toward the (smart mover, not the) first mover. (When the co-innovation of an ecosystem is required), the pioneer has no advantage. In fact, the pioneer is at a slight market share disadvantage relative to laggards. The “system” works to resolve co-innovation challenges, while industry rivals figure out execution.” “Reflecting on catching technology waves in 2008, (Steve Jobs) said:

“Things happen fairly slowly, you know. They do. Those waves of technology, you can see them way before they happen, and you just have to choose wisely which ones you’re going to surf. If you choose unwisely, then you can waste a lot of energy, but if you choose wisely, it actually unfolds fairly slowly. It takes years.”

“His insight was to ‘surf’ the co-innovation wave, knowing that its challenges would be resolved over time. His brilliance was to wait to expend his energy on the execution challenge.”

Waiting To Catch The MP3 Wave “Steve Job’s iPod journey is an exemplary illustration. Jobs knew that, on its own, an MP3 player was useless. He understood that, in order for the device to have value, other co-innovators in the MP3 player ecosystem first needed to be aligned.” “Jobs constructed the iPod ecosystem. (Then) Apple waited, and then waited some more…. As the iPod’s co-innovation risks faded away — when (the) pieces were solidly in place — both MP3s and broadband were finally widely available — (Apple) finally made its move, putting the last two pieces in place to create a winning innovation: an attractive, simple device supported by smart software.” “With its proprietary hardware-software combination, (Jobs) didn’t just put down the last piece, he put down the last two pieces. And he made sure they interlocked. Apple didn’t launch the iPod as a product. In combination with its iTunes music management software, the iPod was a solution.” “By shifting to offering solutions, Apple increased the execution challenge for itself as well as for everyone else, effectively lowering the value of competitor’s previous efforts and increasing the barrier for rivals to achieve future success.”

Waiting To Catch The Smart Phone Wave

[pullquote]Once again, Jobs was late – five years late[/pullquote]

“Once again (with the iPhone), Jobs was late – five years late.” “And rivals didn’t seem to care.” “Reacting to Apple’s January 2007 announcement of the iPhone (six months before its launch), Jim Balsillie, co-CEO of BlackBerry shrugged, “It’s kind of one more entrant into an already very busy space with lots of choice for consumers.” “Asked to react to the announcement of the iPhone, Microsoft CEO Steve Ballmer literally laughed out loud.” “Steve Jobs could smile because he knew what (his) ecosystem carryover meant. Of the 22 million iPods sold during the 2007 holiday season, 60 percent went to buyers who already owned at least one iPod. The iPhone was not going to be a new entrant fighting to capture attention in a crowded mobile phone market. It was the next generation iPod. By carrying over the key elements of the iPod ecosystem, he would carry over his buyers too.”

The Critics Have Gotten It All Wrong

Apple’s critics seem to be diagonally parked in a parallel universe

After reading the excerpts from Ron Adner’s book, you can see just how wrong the critics have been.

A bartender walks into a church, a temple and a mosque. He has no idea how jokes work.

Some technology pundits appear to have no idea how tech works, either.

“Some people get lost in thought because it’s such unfamiliar territory.” ~ G. Behn

Not only have the critics gotten it wrong, but they have gotten it exactly backwards. Their advice constitutes the worst possible course of action for Apple, not the best.

Listening to free advice of a certain kind costs you nothing…unless you act upon it.

The critics don’t remember Apple’s history or tech history or the history of innovation.

Why don’t Apple’s innovation critics make ice-cubes? They can’t remember the recipe.

[pullquote]Stop telling us that you can predict the future when you can’t even recall the past[/pullquote]

Apple’s critics need to stop telling us that they can predict Apple’s future when they’ve already proven that they are not even capable of accomplishing the far simpler task of recalling Apple’s past.

The past, the present and the future walked into a bar. Then things got tense.

The facts can always be ignored, but one does so at one’s peril.

A drunk walks into a bar. “Ouch!” he says.

Nor does ignoring the facts change the facts or make them go away.

“Facts do not cease to exist because they are ignored.” ~ Aldous Huxley

When you’ve got your facts wrong, the second thing you need to do is more research.

I went to a bookstore and asked the saleswomen, “Where’s the self-help section?” she said if she told me, it would defeat the purpose.

When you’ve got your facts wrong, the first thing you need to do is just shut up.

First law on holes – when you’re in one, stop digging. ~ Denis Healey

Categories

What is this nonsense about there not being any more tech categories to conquer? The best way to evaluate whether Apple could enter a market is to ask whether people are satisfied with their current user experience. Where there is dissatisfaction, there is opportunity.

First

What is this obsession with being first to market?

[pullquote]It is better to be a smart mover than a first mover[/pullquote]

— Did being first help MP3 Man in MP3 Players, Palm, Nokia or Rim in smart phones, Microsoft in tablets, Microsoft or Google in TVs?
— Did not being first hurt Apple in iPods, iPhones or iPads?

No, in an ecosystem that demands co-innovation, it is better to be a smart mover than a first mover. Arguing that Apple has missed the streaming music or the console or the TV or the wearables market is like arguing that Apple has missed the train when the tracks have yet to be laid.

Apple Is Surfing The Innovation Wave (Like Mavericks)

Apple is doing what it has always done – and what it has always done successfully. They are surfing the innovation wave, just waiting for the complementary ecosystem parts to catch up. Apple isn’t late, the co-innovation wave is late. And when that co-innovation wave finally arrives, history tells us that Apple will be ready.

Rainbows & Innovations

images-70Rainbow

Rainbows don’t appear when it isn’t raining or in the darkness of the night or after every rain shower, but that doesn’t mean that there will never be a rainbow ever again. Rainbows only occur when all the conditions are right.

Significant tech innovation doesn’t appear every day, or every month, or every year, and new tech categories are rarer than hen’s teeth, but that doesn’t mean that there will never be innovation ever again.

Innovations only occur when the conditions are right.

Study the industry. Wait for the conditions to be right. And while you’re waiting for the next tech innovation, the next tech category, or even the next rainbow…

…don’t be an a$$.

What Do iPhone 5 Critics Want?

iPhone 5 photoApple’s announcement of the iPhone 5 has unleashed a remarkable wailing and gnashing of teeth in the tech media (for example): Apple has failed to hit us with shock and awe. Apple has become the new Microsoft, resting on its laurels and letting its platform petrify. Apple can’t innovate anymore.

Most of this nonsense seems to be the work of jaded writers who simply don’t have a whole lot to say. What almost all of this criticism fails to do is tell us what the new iPhone ought to have been other than something different from what it is. The complaints seem to boil down to “Apple failed to wow us in some way we didn’t expect.” But as I and many others have pointed out, the smartphone market is maturing fast and changes that add value, rather than changes made for their own sake, are getting harder to come by.

Some writers complained that Apple failed to overhaul the user interface. This is true, but what is the argument for changing what remains, five years after it first challenged the limits of BlackBerry and Palm and the horrors of Windows Mobile, an exceptionally intuitive and elegant design. Apple has been very careful in evolving the iOS interface. But it hasn’t been static. For example, it solved the problem of modal notifications in iOs 5. Should it add live tiles? Of course, this would require a completely new UI. And if the best argument for live tiles is Windows Phone, that platform’s failure so far to make any headway is not much of a case for the appeal of that approach.

Apple has been roundly criticized for failure to incorporate NFC. But as my colleague Ben Bajarin points out, NFC is a mostly solution in search of a problem. Especially in the U.S., there has been little movement by retailers to install the infrastructure needed to support NFC,

The new iPhone screen size has been the subject of rather odd criticism, since the company is accused of imitating Android by going to a larger display when the particular display size it chose is unique. Apple deliberately avoided the sort of mega-screen that had graced recent high-end Android phones, going instead for a screen that is taller than the current iPhone but the same width. One reason Apple avoided a wider display is to maintain the ability to operated the iPhone one-handed, especially for people—like many women—with smaller hands.

I can’t explain just why but the new phone feels very good in hand. It’s actually only a bit lighter than the iPhone 4, but the difference seems more significant, perhaps because the long, relatively narrow design, makes it better balanced. The differences are subtle, but the new aluminum back and precision-machined sides just feel right.

Of course, there are two major changes in the new model. One, which no one is criticizing, is the addition of high-speed LTE wireless. The other is the replacement of the venerable 30-pin dock connector with a new design, dubbed Lightning. (Dan Frakes at Macworld has an excellent rundown on Lightning’s capabilities and deficiencies.)

Lightning has inspired the collective ire of tech writers. Slate’s Farhad Manjoo, for example, calls it “incredibly irksome.” It’s unfortunate that it orphans nearly a decade worth of cables and accessories based on the 30-pin design, and even more so that Apple plans to charge $30 for a Lightning to 30-pin adapter (I expect cheaper third-party versions are not very far away.)

On the other hand, the 30-pin’s time was up. The connector, always a rather fiddly bit, just claimed too much precious device real estate. Manjoo and others criticize Apple for not using the standardized micro-USB connector, and this objection has some merit. But Lightning has distinct advantages over micro-USB. It’s sturdier and reversible. I found I could easily insert it with my eyes closed on the first try, something difficult if not impossible to do with micro-USB.

Probably the oddest complaint is that Apple no longer surprises us a product announcement. First, this isn’t really true. Although all the salient features of the new iPhone were known before the Sept. 12 unveiling, both the details of the new iPod touch and the existence of a redesigned iPod nano were not known in advance. The lack of secrecy about the iPhone, though, is now inevitable. By scheduling the announcement just 10 days before it expects to ship millions of phones, Apple has to deploy a vast supply chain on a scale that makes its former secrecy impossible.

I know that in my decades as a journalist, I never complained about my success in finding out things that the people I was covering didn’t want me to know about. Hearing people other than Apple executives complain the secrets were found out suggests that some writers don’t have enough real work to do.