Tag: iphone

Applesauce

 

The Wall Street Journal: “More fizzle than pop.”

The Los Angeles Times: “An evolution, not a revolution.”

The Washington Post: “It wasn’t exactly blowing my mind.”

FoxNews.com: “Lunch-bag letdown.”

Business Insider: “A huge disappointment, or just a regular sized disappointment?”

Analyst Roger Kay: “Underwhelming.”

 

People, please. There’s nothing wrong with evolution. Without evolution, we would still be apes. (Insert your own snide comment here.) Apple obviously thinks the new iPhone 4S is evolutionary. Otherwise Apple would have given it a new name, like, say, Shebang, or Razzmatazz, or maybe even Five.

Tesla
Lotus

But Apple’s new iPhone 4S is the same old iPhone 4 in the same way that a new Tesla Roadster is the same old Lotus Elise. Physically, they’re both sleek and sexy. Under the hood, though, the new model is revolutionary.

Not because of the dual-core processor. Other smartphones already have dual-core chips. Dual-band world phone? Faster upload and download speeds? Fancy camera and high-def video? Others have been there, done that.

No, the iPhone 4S is revolutionary because of Apple’s software, specifically iOS 5, iCloud, and Siri.

Disclaimer: I have not reviewed the iPhone 4S and have no idea if it works as advertised beyond the boundaries of Building 4 on Apple’s Cupertino campus. Apple stresses that the Siri personal assistant software is still in beta mode, even now, a week before the iPhone 4S goes on sale. But if the software does work in the real world, it’s a change as profound as replacing gasoline with electricity.

What is the future of the personal computer interface? Voice and gestures, not keyboards and mice.

Apple patented the capacitive multi-touch interface it introduced with the original iPhone. It included a gyroscope in the iPhone 4, transforming gameplay but also opening the way for new gesture controls. And now, with Siri (and backed by the new A5 and digital signal processors), Apple has added natural language voice control to the computer in your pocket.

Hello, Siri?

Remember the scene in one of the Star Trek movies where a bemused Scotty tries to control a 20th century computer by talking into a mouse? Seriously, does anyone doubt that our grandchildren will operate computers by voice?

Yes, Android phones introduced voice commands a while back. But from the day when Steve Jobs first walked through Xerox’s Palo Alto Research Center (PARC), Apple’s true genius has been to seize nascent technologies and make them so simple and elegant that they catch fire. Did Apple invent the MP3 player? No. Did Apple invent the mobile phone? No. Did it invent the portable game system? Negative. Did it invent the tablet computer? Nope. The music store? Uh-uh.

So, what are the best-selling MP3 players and game players and mobile phones and tablets and music stores in the world today? (SPOILER ALERT: iPod, iPod Touch, iPhone, iPad, iTunes Store.)

Did Apple invent the television? Wait, that’s likely to be the subject of a future column.

In my view, we’ve just seen a revolutionary shift from mobile phones to mobile personal assistants.

What’s on my calendar today? What’s the weather? What’s traffic like? How many calories in this bagel? Remind me to stop to buy coffee on the way home. Read me my mail. Send a message to Ben and Tim telling them I’ll be late to the office. Play this morning’s National Public Radio podcast. What’s the stock market doing now? Call my wife. Let me know when Steve gets to the office. Schedule a lunch with Dave and Kelley for tomorrow. When is Laura’s birthday?

The Siri software “understands” conversational language. It “understands” context. I am unaware of any other voice command system on any other smartphone that reaches this level of competence.

Add this to the intelligent ecosystem of iOS 5 and iCloud – comprising hundreds of new features, all of which make their debuts with the iPhone 4S – and it’s difficult to understand the griping and grousing that followed Apple’s announcement yesterday.

Was it also disappointing that Apple dropped the price of the original 8GB iPhone 4 to $99 (with the usual two-year mobile carrier contract)? Or that it dropped the price of the iPhone 3GS to free? Or that it priced the iPhone 4S at $199 and up? Those were evolutionary changes, too, but if I am Nokia, and my cheapest dumb phone is now the same price as Apple cheapest smartphone, my business plan just got sent back to the drawing board. Ditto Google-Motorola, now that the price bar for state-of-the-art smartphones has been set at $199.

The iPhone 4S is still the thinnest and snazziest smartphone in the world. Okay, so it doesn’t have a four-inch screen, and it’s not shaped like a tear-drop. (Darn, I was hoping I’d have to go buy all-new iPhone accessories.) It does not have built-in near-field radio communications, which prevents me from using it to pay my toll when I board the subway in Seoul, since that’s about the only place I’ve seen that accepts NFC payments. Has anyone seen NFC payment terminals here in the States?

And speaking of NFC, is your mobile phone carrier so trustworthy and transparent that you would trust it handling your daily purchases? Would you trust AT&T as your bank?

Which leaves me to conclude that the biggest cause for pundit, analyst and fanboy disappointment with the new phone is that your friends and co-workers won’t be able to tell that you have the new iPhone 4S just by looking at it, obviating its value as a status symbol. Here’s an idea for a cheap upgrade: Paint a big number “5” on your iPhone case, and they’ll never know the difference.

10-4, Good Buddies

It’s official: Apple will unveil the iPhone 5 on Oct. 4.

But it is widely expected that they’ll make an announcement for the iPad, too:

Last week, Facebook CEO Mark Zuckerberg said Facebook would probably introduce an iPad app at some point. I suspect “at some point” means Oct. 4. And the Facebook iPhone app, which kinda sucks, deserves a refresh at the same time.

But wait: Aren’t Apple and Facebook wary of each other? Apple tried to launch its own social networking system last year. Remember Ping? And Apple is well aware that Facebook will soon have ONE BILLION USERS who don’t really care if they access Facebook on an iPhone, an iPad … or an Android phone, an Amazon tablet, an HP TouchPad (er, nevermind), a toaster, an Xbox, or an Etch-a-Sketch.

Facebook currently has 800 million regular users, and 350 million of them tap into Facebook on a mobile device, even though the mobile Facebook apps kinda suck.

Yes, Apple and Facebook are wary of one another. But they share a common enemy:

Oh, hi, Larry.

And, as the ancients so wisely noted, “The enemy of my enemy is my friend.”

Mobile is the future; Facebook lacks a strong mobile platform, which Apple can provide.

Social is the future; Apple lacks a strong social platform, which Facebook can provide.

Google is the enemy; Android competes against Apple’s iOS and Google just bought a mobile phone maker (Motorola Mobility for $12.5 billion), and Google+ (the fastest-growing social network in history) competes against Facebook, and everywhere Apple and Facebook want to go, Google is there waiting for them, licking its chops.

So, I expect Facebook to “friend” Apple, and vice versa, at next Tuesday’s events. And that, to me, is far more interesting than the incremental improvements we expect to see in the iPhone 5.

There is No Such Thing as an iPhone Killer

Samsung recently released its latest smart phone in the Galaxy S II line called the Epic 4G. Some in the media are hailing it as an iPhone killer, a statement that is at its deepest level entirely ignorant. Amazon will soon be releasing a tablet version of their popular Kindle e-reader and again people will proclaim or at least ask the question “is the Kindle Tablet an iPad killer.”

What I want to make clear is that there is no such thing in today’s technology landscape as an iPhone or iPad killer, or any other product killer for that matter. Many seem to assume that the tablet and the smart phone markets will be very similar to the historical PC landscape. Historically with PCs one dominant software operating system dominates and the rest have marginal market share at best. Even the PC landscape is changing.

The fact is that the market for PC’s, smart phones, tablets, and anything else we dream up will never again look the PC landscape during the 90’s and early 2000’s. There simply will not be one single OS that dominates the landscape. The market will support many and therefore there will be many choices and choice is good.

The reason for this is because when a market is maturing there is generally fewer or less quality options. There is in essence a market standard that leads the market to maturity. With PCs it was Microsoft and Windows which led the way as the standardized technology by which the market matured. With the Smart phone and tablet it will be the iPhone and the iPad that will lead the market into maturity. However once a market matures it begins to segment.

With Windows and the PC it took the product nearly 25 years to reach maturity. Smart phones, tablets and more will not take nearly that long and in fact will mature in around 3-5 years.

Due to the rules of market maturity, I can confidently say there is no such thing as an iPhone or iPad killer. There are only other product choices. John Gruber over at Daring Fireball makes some similar observations on how the market will support multiple solutions.

Why do I know this you ask? Because a Toyota Corolla is not a Mercedes-Benz killer. A Ford Truck is not a Prius killer. And an even closer analogy, a BMW series 3 is not a Mercedes C300 killer or vice-versa. The market can sustain all these automobile products.

To use another example Pepsi is not going to release a Coca-Cola killer. You simply have a choice of Coke, Pepsi, Sprite, Root Beer, Mt Dew, etc.

I have been studying the automobile market as it relates to a mature consumer market for some several years now and the similarities between the automobile market history and the technology market history are strikingly similar. The big difference is that the automobile market is about 20 years more mature than the PC industry. However when you study how the market matured and consumers adopted new technologies in the automobile industry you find moments in time that are very similar to the moment in time our industry is currently in.

Therefore we learn a lot about how today’s fragmented yet competitive automobile market and what it can teach us about what the consumer technology landscape of the future will look like.

This is the reality in mature consumer markets. There is a dominant solution that leads the market to maturity as consumer who are interested in their first product in the maturing market go with the market leader. As they become more familiar with their needs or wants with that product they then begin to shop around based on preference.

This is why the abundance of Android smart phone in the early stage of a markets maturing is actually more harmful than productive for the Android solution. I have stated before that the Android market is too saturated for its own good and that will be the case until the smart phone market reaches peak maturity in 3-5 years.

The critical key to any company in the market wanting to maintain or grow market share is to be around when the market actually does peak. Because once it does it is very difficult, without a pure market disruption, for new entrants or those who have minimal market share to grow.

Establishing market share early is of the utmost importance.

It’s the User Experience, Stupid; How iPhone Critics Miss the Point

The title tells it all: 10 Reasons Why iPhone 5 Doesn’t Stand a chance Against Motorola Droid Bionic. The article, by Elias Samuel in International Business Times, not surprisingly, lists 10 ways in which the Droid Bionic, just announced for Verizon Wireless is superior to the the forthcoming Apple iPhone 5.

Photo of Droic BionicI don’t mean to pick on Mr. Samuel’s, whose other work I am not familiar with.  But this article is sadly typical of a common style of tech reviewing.

Never mind that we know very little about the iPhone 5 hardware, though that doesn’t stop everyone from speculating. The problem is that even if all of Samuels’ assumptions about the new iPhone are right, it just doesn’t matter. For example, you can probably count on your fingers the number of potential iPhone buyers who care that the Bionic’s  Texas Instruments OMAP 4430 processor has specifications superior to the iPhone’s presumed Apple A5.

Some of the other claims are downright inane. If the lack of support for Flash and absence of an external memory card slot mattered, they would have killed iPhone and iPad sales by now. Obviously, they haven’t. And the alleged “open source advantage” is of interest mainly to ideologues (not to mention the fact that Android’s open sourciness is questionable at best.)

What is entirely lacking in Samuels’ review, and many, many others of its ilk, is a discussion of the one thing we do know about the iPhone 5, it’s IOS 5 software and the improvements it is likely to bring to the iPhone’s already great user experience. There are many Android phones whose hardware equals or beats the iPhone. There are none whose user experience comes close. And that, not speeds and feeds, Flash and LTE, is what sells phones.

The Droid Bionic looks to be a fine handset and I expect it will do well. But to say “iPhone 5 may not stand a chance against Motorola’s flagship phone” is just plain silly.

[thumbsup group_id=”2471″ display=”both” orderby=”date” order=”ASC” show_group_title=”0″ show_group_desc=”0″ show_item_desc=”0″ show_item_title=”1″ ]

How Important is the Design of the iPhone 5 to its Success?

I continue to watch with amusement the various pictures and speculative drawings for the iPhone 5. And the rumor mills are working over time trying to figure out what the iPhone 5 might look like. In fact, the folks at MacRumors have one of the best mock up drawings I have seen on the rumored iPhone 5 and, at the very least, it is cool to see what an iPhone 5 might possibly look like.

But how important is the new design really to the iPhone 5’s success? Yes, it could have a bigger screen and maybe even be a bit slimmer, but I contend that the iPhone momentum is already so strong that no matter what Apple does with the design of the iPhone 5, it will be a monster hit and could sell as many as 30 million in the holiday quarter. (Apple sold 20 million iPhones in the last quarter.) In fact, our research shows huge pent up demand from both ATT and Verizon customers in the US and very strong demand for this new phone around the world.

I know that the design of the iPhone itself will make the most news when it is launched but there is an even more important technology that needs to be factored into the iPhones future success. To understand this technology, let me relate to you something that happened when the first iPhone came out.

When the iPhone was launched, I had a briefing from the top executives at Apple responsible for the iPhone. After they showed me its design and specs, they did something very pointed and telling. They laid the iPhone on the table and asked me what I saw. I knew this was a trick question and I could have answered it a lot of different ways. But what I said is that I saw a device with a blank screen on it. They affirmed my answer and went on to say that this is what they want people to see. Although they were very proud of the iPhone design, they told me that by itself and when not turned on, it is just a dumb device. However, when you turn it on and the OS and apps get fired up, that is when the iPhone becomes an iPhone.

From the beginning, Apple built into the iPhone’s success equation an ecosystem of hardware, software, applications and services that together make it the iPhone. Yes, the design of the phone is important. But when turned off, it is not very smart. On the other hand, when it is turned on and the screen lights up, that is when the magic takes place. The hardware is only 1/3rd of the iPhones success equation. And while Apple may tweak the design of the iPhone on a yearly basis and add things like more memory, better communications features, better camera, etc, I would argue that what they do with iOS is much more important to the iPhone’s overall success and increased world wide demand. It is what you can do with the iPhone that matters.

So while you might be hyperventilating about the potential features and design of the iPhone 5, keep in mind that the iPhone itself is only part of the iPhone’s success equation. I believe that what Apple does in the next version of IOS and future versions of their mobile OS is actually much more important to the continued growth and success of the iPhone. It is the software that will determine the real future of this important Apple product.

Why iPhone Competitors Should Release Less Products

The Next Web asks an interesting question in this article titled “As Apple’s smartphone sales boom, should its rivals release fewer handsets?”

As I pointed out in my article “Why it matters that Apple is the number 1 smart phone maker,” Apple only needs one product each year to dominate the smart phone market. They are the only company that takes this approach. Every other smart phone manufacturer releases a plethora of handsets each year, many of them based on Android.

Arguably this massive amount of handset choice is one of the leading reasons Android has such a large market share. The interesting question TNW brings up is whether or not Apple’s strategy of one handset each year is a better strategy for each manufacturer.

For Apple they focus all their research, design, engineering, hardware, software, and services teams on just one product. The result is the single best selling handset year after year.

There are rumors that Apple may fragment the iPhone line and offer different priced options but for that we will have to wait and see. Even if Apple did that it would still be the iPhone brand.

The challenge Android has, which TNW brings up, is the Android brand – more specifically the Droid brand. This brand did wonders for Android in the very beginning as Motorola and Verizon spent millions of dollars marketing the Droid brand. Now however it is unclear to the end consumer what devices are “Droids” and which ones aren’t.

On top of the Droid brand we have manufacturers launching products with random names all the time. The Bionic, Sensation, Revoluion, Captivate, Status, Thrill, Photon, Triumph, and XPRT to name a few of the most recent. You have to be a gadget freak or gadget blogger to know what the difference between all those devices I just listed are and those are only half of the Android devices released since January of this year.

Putting yourself in the consumers shoes and trying to research and make a decision on which Android phone to buy could be daunting. I pointed out in a column I wrote for SlashGear earlier in the year that too much choice can be paralyzing for many consumers.

This is why the iPhone strategy has been so brilliant. It simplifies the decision making progress but is also arguably the best handset on the market as evidenced by huge sales. Apple’s less complicated product strategy and laser focus on making THE best handset is paying off.

The biggest benefit I can see for iPhone competitors to release less handsets each year would be that those competitors could pour more resources into fewer designs. The result I would assume would be better smart phones.

Personally I would love to see what a company like HTC, Motorola or Samsung could do if they poured all of their resources into one single device to try and take on the iPhone.

The problem is I don’t think they will do it.

The Stage is Set for An iPhone Christmas

Data from Piper Jaffray analyst Gene Munster was released Monday that resulted in similar data to research my firm has been conducting. The conclusion of Munster’s data is that there is huge pent up demand for Apple’s next version of the iPhone, the iPhone 5. Munster’s data revealed several key points.

  • Among those who do not have an iPhone but plan to buy an iPhone next, 60% are specifically waiting for the iPhone 5
  • Of those Verizon subs who do not have an iPhone but plan to buy an iPhone next, 74% are specifically waiting for the iPhone 5
  • Among existing iPhone users, 94% expect to buy another iPhone (6% expect to switch to Android)
  • Among existing Android users 47% expect to buy another Android smartphone (42% expect to switch to iPhone).

Granted his sample size was relatively small at 216 people however the data resulted in similar findings to our own independent research. Our interest was in non-smart phone customers primarily but we did survey a mix of current early generation smart phone owners as well. This research is still underway but early conclusions are showing something similar to Munster’s, which is a large amount of consumers are waiting for the iPhone 5.

Over 75% of those we have surveyed so far state that they are waiting for the iPhone 5 for their first smart phone. In fact I was speaking with a college student who has a two year old and very worn BlackBerry. When I asked him what his plans were for his next phone he looked at me like I was crazy and said “duh the iPhone 5.”

What else is interesting is that when we dig into the kinds of consumers we are talking to we find out that they are largely in the early majority and late majority. These happen to be the largest group of consumers and demand for smart phones is entering into the largest sector of the market. What Munster’s data and our early analysis is showing is that a significant number of people will be in the market for new phones this holiday season, smart phones in particular, and their overwhelming choice appears to be the iPhone 5.

Another interesting bit of information we are finding is that a large number of BlackBerry consumers are due for upgrades this holiday season and are in the market for a new smart phone. We are in the process of finding out the mix of Android to iPhone preference in these consumers and will release those stats when we have them.

The bottom line is if you combine the number of new consumers in the market for a smart phone this fall who are leaning toward an iPhone with the number of consumers upgrading, the result is a huge holiday season for smart phones in general but may tip heavily in Apple’s favor with the iPhone 5.

I would not be surprised if in the US this holiday season more iPhones are sold than Android phones.

Why Apple’s Earnings Reports Matter

Today Apple released their earnings report for the third quarter of 2011. As was expected there was much anticipation regarding the earnings, not only from Wall St but also from media outlets. Apple did not disappoint having their best non-holiday quarter ever as well as selling more iPads and iPhones than any other quarter. Outside of continually delivering reports that shock people there is a more significant point about Apple and their earnings progress that i’d like to highlight.

Namely that Apple’s earnings are one of the biggest indicators that not only show the healthy life of the technology economy but they should also give other companies hope. That hope is that if a company truly delivers value to the market place it will be rewarded. They should find hope that consumers aren’t just after the cheapest thing on the market but that consumers truly desire products that add value to their lives and they are willing to pay for it.

It’s not a race to the bottom its a race to provide value. Apple’s earnings continually re-enforce this point.

Below are the key points from the earnings.

Apple® today announced financial results for its fiscal 2011 third quarter ended June 25, 2011. The Company posted record quarterly revenue of $28.57 billion and record quarterly net profit of $7.31 billion, or $7.79 per diluted share. These results compare to revenue of $15.70 billion and net quarterly profit of $3.25 billion, or $3.51 per diluted share, in the year-ago quarter. Gross margin was 41.7 percent compared to 39.1 percent in the year-ago quarter. International sales accounted for 62 percent of the quarter’s revenue.

– The Company sold 20.34 million iPhones in the quarter, representing 142 percent unit growth over the year-ago quarter.
– Apple sold 9.25 million iPads during the quarter, a 183 percent unit increase over the year-ago quarter.
– The Company sold 3.95 million Macs during the quarter, a 14 percent unit increase over the year-ago quarter.
– Apple sold 7.54 million iPods, a 20 percent unit decline from the year-ago quarter.

Overall:
– Apple reported quarterly revenue of $28.57 billion, and profit of $7.31 billion, representing year-over-year growth of 82% and 125%, respectively
– We’ve now sold 222 million iOS devices to date
– International sales made up 62% of the quarter’s revenue, compared with 59% in FYQ2
– Gross margin was 41.7%, above our guidance for the quarter
– Apple closed the quarter with $76.2 billion in cash, compared with $65.8 billion at the end of the previous quarter
Mac:
– 3.95 million Macs were sold, a record for the June quarter
– Mac sales grew 14% year-over-year, four times the global PC market growth, according to IDC
– The Mac has outgrown the PC market for 21 straight quarters – more than five years
– International Mac sales continue to be strong, growing 57% year-over-year in Asia Pacific
– Peter Oppenheimer shared that Lion, the new version of OS X, will be available tomorrow
iPhone:
– Apple sold an all-time record of 20.3 million iPhones during the quarter, compared with 8.4 million in the year-ago quarter, 2X IDC’s growth estimate for the smartphone market
– iPhone is being deployed or piloted by more than 95% of Fortune 500 companies, and by 57% of the Global 500
– iPhone is now available in 105 countries through 228 carriers, and year-over-year sales quadrupled in Asia Pacific
iPad:
– Apple sold 9.2 million iPads in the quarter, up from 3.3 million in the year-ago quarter
– Supply improved and we’re still selling every iPad we can make – iPad is now available in 64 countries
– iPad is now being deployed or piloted in 86% of Fortune 500 companies and 47% of the Global 500
– There are more than 100,000 apps designed for iPad in the App Store
Music:
– Apple sold 7.54 million iPods, with iPod touch continuing to make-up over half of the iPods sold
– iPod maintained over 70% marketshare in the US, according to NPD, and is the top-selling MP3 player in most countries for which we have data
– iTunes Store revenue was up 36% year-over-year, reaching $1.4 billion
– We have paid over $2.5 billion out to developers, as the 425,000+ apps in the App Store have been downloaded more than 15 billion times
Retail:
– Apple plans to open 30 new stores this quarter, for a total of 40 new stores this fiscal year
– Mac sales in our retail stores totaled 768,000, up 13% from the year ago quarter, and 50% were to people new to the Mac
– Apple’s retail stores brought in $3.5 billion in the quarter, up from $2.6 billion in the year ago quarter

Apple Retail is Key to Their Competitive Advantage

Apple has several things I consider to be keys to their competitive advantage. Fundamental advantages that when you study become clear differentiators as well as roadblocks for Apple competitors. However if I were to prioritize, their retail strategy would be near the top as a key to their competitive advantage – here is why.

Continue reading Apple Retail is Key to Their Competitive Advantage

Why Apple Has a Strong Competitive Advantage

One of the primary things about being an effective technology industry analyst is that I have to clearly communicate our perspectives about the technology industry as a whole to my firms clients. This requires more than just the regurgitation of information as we gather it in the field. It requires explaining more fundamental elements of what is happening and why. It is because of this that we seem to get one question common to many of the companies that we speak with and provide services to. That question is: “Why is Apple doing so well and what can we do to compete?”
Continue reading Why Apple Has a Strong Competitive Advantage