On November 2, 2017, Professor Mohanbir Sawhwney (hereinafter, “the Professor”) penned the provocatively titled “The iPhone X Is the Beginning of the End for Apple“. (All quotes are from the article unless otherwise identified.)
No surprise, right? Pretty much everything is the “End for Apple”.
Years people have doubted Apple: 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 ~ Neil Cybart (@neilcybart) 11/7/17, 6:58 PM
But let’s be fair. The title of an article is often clickbait that is not representative of the article’s contents. So, is that the case here?
Nope.
Have we reached peak phone?
I would argue that we are indeed standing on the summit of peak “phone as hardware….”
Yowza. That’s quite a claim. Let’s take a look at the Professor’s reasoning. (I’ve added numbers to the sections on “Theory” and “The Next Vector” for added clarity)
1. Theory
1.1 To understand the future of phones, it helps to look at the history of…innovation.
1.2 Innovation in technology product categories tends to proceed along a specific dimension—a “vector of differentiation.”
1.2 Players pursue innovation along a vector of differentiation until the vector runs out of steam.
1.4 This happens for two reasons: limits to innovation along the vector of focus and the ability of competitors to catch up with market leaders.
1.5 (W)hen vectors of differentiation shift, … the focus of innovation shifts to a different vector and new market leaders emerge, … incumbents often get left behind and market leaders tend to fall by the wayside.
2. The Next Vector
2.1 Now, the vector of differentiation is shifting yet again, away from hardware altogether.
2.2 Sheets of glass are simply no longer the most fertile ground for innovation.
2.3 We are on the verge of a major shift in the phone and device space, from hardware as the focus to artificial intelligence (AI) and AI-based software and agents.
2.4 This means nothing short of redefinition of the personal electronics that matter most to us.
2.5 The shifting vector of differentiation to AI and agents does not bode well for Apple.
Well, of course, this “does not bode well for Apple” because nothing ever bodes well for Apple.
3. AI Leaders
In the brave new world of AI, Google and Amazon have the clear edge over Apple.
Oh brother, here we go.
Amazon is making rapid progress along this vector of differentiation, as are Google (with its TensorFlow open-source platform for AI apps) and even Microsoft.
In other words, everybody’s making progress in AI. Except for Apple. Because, you know. They’re Apple.
4. Nitpicking
I have some nits to pick with the Professor’s underlying premises. Have Smartphones really stagnated? Even if AI is the future, are we sure what that future will look like? And are we sure that the AI future is upon us here and now or is it still, you know, in the future? And what makes the Professor think that moving ahead toward AI necessarily means leaving hardware behind?
Inquiring minds want to know.
5. Predictions About the Future
Predictions are hard, especially ones about the future. ~ not Yogi Berra
The thing is, we can know the broad outlines of the future without having any inkling about what the specific details of that future are going to be.
— Everybody knew that cars were the future, but while everyone else was trying to make a better car, Ford made a better assembly line.
— Everybody knew that personal computers were the future, but while everyone else was trying to make a better computer, Microsoft made a better operating system.
— Everybody knew that mobile computing was the future, but while everyone else was trying to make better phones and tablets, Apple made a phone that was a tablet.
6. The Race
If the age of AI is upon us, where is the assembly line of AI? Or the Windows 95 of AI? Or the iPhone of AI?
Saying the age of AI is upon us is like saying that the age of mobile was upon us when Microsoft introduced their first tablet in 2000 or when RIM introduced their iconic Blackberry phone in 2002.
The mistake we commonly make is to talk about who is “ahead”. But like Microsoft with the tablet and RIM with the phone, it doesn’t matter how far “ahead” one is if they’re running in the wrong race. Microsoft, RIM, Nokia — even Palm — were ahead of Apple in the mobile phone race. Apple wasn’t even in the running. But Apple reset the game by starting a new race — the smartphone race. And in the smartphone race, Apple obtained an insurmountable lead while the incumbent mobile phone leaders were left helplessly behind, in part because Apple got there first, but just as importantly because the mobile phone incumbents didn’t know the new race had begun or didn’t know the new race was important or didn’t even know where the starting line was.
7. The Ladder
If the ladder is not leaning against the right wall, every step we take just gets us to the wrong place faster. ~ Stephen R. Covey
I hope you’ll forgive me, but let me use one more metaphor to drive home this point because I think it’s important.
It doesn’t matter most how high you climb the ladder of success. What matters most is whether your ladder is leaning against the right wall. In mobile technology, Microsoft, RIM, etc. were at the top of their respective ladders. But with the smartphone, Apple leaned their ladder against the right wall.
Google, Amazon, Microsoft may or may not be “ahead” in AI. But that only matters if they’ve placed their AI ladder against the right wall.
8. From Hardware
One of the Professor’s most baffling assertions is that the dawn of AI must necessarily coincide with the sunset of hardware. The following quotes from his article exemplify this attitude (numbers and emphasis added):
8.1 “(T)he vector of differentiation is shifting yet again, away from hardware altogether.”
8.2 “We are on the verge of a major shift in the phone and device space, from hardware as the focus to artificial intelligence (AI) and AI-based software and agents.”
8.3 “(W)e shift from hardware-based innovation to differentiation around AI-driven technologies.”
8.4 “Apple is falling behind in the AI race, as it remains a hardware company at its core and it has not embraced the open-source and collaborative approach that Google and Amazon are pioneering in AI.”
9. Premise Refuted
The proposition that a move toward AI is a move away from hardware is refuted right within the article itself. Note how even as the Professor praises Amazon and Google for their AI prowess and their AI promise, he does so by referring — at least in part — to how their HARDWARE will use AI. (Again, the added emphasis is mine.)
The advent of Amazon’s skill store and similar innovations speak to the need to create an AI-rich ecosystem where hardware, software, and third-party contributors work in concert to enhance consumer experience across life domains.
Consider Google’s Pixel 2 phone: Driven by AI-based technology, it offers unprecedented photo-enhancement features and deeper hardware-software integration.
As it happens, Ben Thompson — who was a student of the Professor’s — was thinking along the same lines as I. (Great minds, and all that.)
“The presumption is that the usage of Technology B necessitates no longer using Technology A; it follows, then, that once Technology B becomes more important, Technology A is doomed.”
“In fact, though, most paradigm shifts are layered on top of what came before. The Internet was used on PCs, social networks are used alongside search engines. … In other words, there is no reason to expect that the arrival of artificial intelligence means that people will no longer care about what smartphone they use.”
Ben Thompson’s entire article on this matter is well worth a read. You can find it here.
10. Premise Disputed
Let’s re-review the Professor’s basic chain of logic (using my words, not his):
— Apple is a hardware company; and
— AI is the future; therefore
— The move from hardware to AI will leave a hardware maker, like Apple, in its wake.
As I’ve already pointed out, the chain of logic is flawed because the move toward AI is not a move away from hardware.
Furthermore, did you notice anything else odd about the Professor’s assertions? His argument is founded upon the premise that Apple is a hardware company. But what industry expert worth their salt would describe Apple as “a hardware company”?
Apple is not just a maker of hardware like, say, HTC, or LG. Apple makes the whole widget. They make both the hardware and software; both the phone and the operating system; both the iPhone and the iOS. What makes Apple unique is that they are a provider of integrated solutions.
Why does that matter? Why does it matter that Apple makes both the hardware and the software? It matters because saying AI is unrelated to hardware makes little sense. But saying AI is unrelated to software makes no sense whatsoever.
The Professor, I think, has it exactly backward. He thinks that AI is going to somehow be independent of phones, and therefore companies like Apple are going to suffer. But isn’t if far more likely that devices like the iPhone are going to be the platform that AI builds upon?
11. Apple AI
Next-generation devices will use AI and deep learning to recognize our voices, faces, and emotions. – (the Professor)
We don’t have to wait until the next generation of devices to use AI for those purposes. Apple does most of those things already.
It seems to me that the Professor did not look carefully at the iPhone X before he wrote his article. He’s not only ignoring the phone’s future possibilities, he’s also ignoring its present capabilities. Apple is baking AI right into their chip design. And Apple uses AI, for example, to allow Face ID to adjust to changes in one’s face over time. The iPhone X is chock full of AI.
I can’t fathom the idea that Apple is behind in AI. Its devices are packed it with it. ~ Joshua Gans, @joshgans
12. Apple AR
As AI-driven phones like Google’s Pixel 2 and virtual agents like Amazon Echo proliferate, smart devices that understand and interact with us and offer a virtual and/or augmented reality will become a larger part of our environment. Today’s smartphones will likely recede into the background.
I think the Professor has gotten this backward too. Where he see’s stagnation in iPhone innovation, I see the potential for dynamic growth.
The Professor bemoans the fact that Apple is falling behind in AR. Maybe I’m missing something here (I’m not) but it seems to me that with the iPhone 8 and, in particular, with the iPhone X, that — far from falling behind — Apple has taken a substantial lead in the practical implementation of AR. They and they alone have the hardware and the software chops necessary to create AR that actually works for millions upon millions of people, right now, today. What’s more, Apple’s already substantial lead in implementing AR in already existing products may be about to become much, much bigger.
In 2007, Apple introduced the iPhone to the world. But it wasn’t until 2008 — with the addition of the App Store — that the iPhone’s full potential was revealed. It was then that the iPhone went from a being a proprietary device, made only by Apple, to becoming a platform, available to all. And that changed everything because a platform allows one to harness the abilities of others. And not only do those others create things for you without getting paid by you, you actually get to charge them a percentage of their profits for the privilege of doing so!
From the beginning, the iPhone was a blank canvas. But the APIs necessary for developers to create apps was the paint. The App store invited the most creative minds in tech to create things that Apple could never, themselves, have imagined. And Developers accepted the invitation with enthusiasm and proceeded with gusto.
That was 2008. This is 2017. And in 2017 Apple may — at least in part — have replicated the miracle of the App store, all over again. With the App Store, Apple created a canvas for Apps. Today, Apple has created a new canvas suitable for the creation of AR. And there are literally tens of thousands of developers who are focusing their efforts on painting the next Mona Lisa of AR
Just as an example of what is already possible, Warby Parker is using face mapping on the iPhone to provide glasses recommendations.
And here are some “Mindblowing examples” of AR made while ARKit was still in beta.
And, as the following headline attests, Animoji Karaoke is a thing.
Animoji karaoke is the new iPhone X feature taking over the internet ~ Evening Standard
It’s hard to believe that Apple will not, in future iterations of the iPhone, use the front-facing camera to extend one’s ability to turn animate objects into Anamojis. And the possibilities there seem, well, endless.
And the thing is, we simply do not know — and can not know — what the new AR platform may produce. When Apple introduced the App store in 2008, we could not imagine an Uber or an Airbnb or a million other apps that would soon be created and sold in the App Store. Similarly, now that Apple has introduced AR to the phone, we simply can not possibly imagine the uses developers may make of it. It’s like trying to imagine the unimaginable.
That’s the beauty of a platform. And Apple — and only Apple — is currently in a position to make that all happen.
This isn’t the end for the iPhone as the Professor contends. It may, in fact, be a new beginning. We’re about to see the start of a new wave of third-party developer creativity. And perhaps that wave will swell into a tidal wave of innovation.
13. Apple Glasses
I would argue that we are indeed standing on the summit of peak “phone as hardware”: While Apple’s newest iPhone offers some impressive hardware features, it does not represent the beginning of the next 10 years of the smartphone, as Apple claims.
Sheets of glass are simply no longer the most fertile ground for innovation.
While the Professor bemoans the fact that Apple is a mere hardware shop, he ignores the fact that there is no one better positioned to move from phones to glasses than is Apple. And as the following two articles attest, Apple may well be preparing to make that exact move.
Apple to Ramp Up Work on Augmented Reality Headset ~ Mark Gurman, November 8, 2017
Apple, Inc.’s Augmented Reality Glasses Could Be Closer Than You Think ~ Evan Niu, CFA, The Motley Fool
The Professor contends that iPhones are going to be mooted by the next “vector of innovation” and Apple is going to suffer for it. But for all we know, Apple glasses may be the next “vector of innovation” and Apple may own it in the same way they currently own the smartphone revolution.
Turns out that “sheets of glass” may still be fertile ground for innovation. And far from being relegated to a maker of legacy products, as the Professor contends, Apple may well be on the verge of a second renaissance.
14. Conclusion
When it comes to the demise of the iPhone, we can but recall Mark Twain’s reaction upon reading his own, somewhat premature, obituary.
The reports of my death are greatly exaggerated.
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