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Please allow me to introduce myself…
You likely don’t care and would not believe the volume of blog posts, research reports, technical writings and analyst studies I sift through on a daily basis.
This is necessary both to stay informed and to re-evaluate my opinions as new facts emerge. I refuse to let my initial reactions to the latest rumors cement my long term perspective. Though I consider my views well-informed, reasoned and likely to be proven true in the due course of time, my peers disagree.
For your reading pleasure, below are opinions I hold that currently run counter to conventional wisdom.
Who’s side are you on?
Sympathy For The Devil
Unlike all of Silicon Valley, it seems, I applaud the EU’s ruling that affirms an individual’s “right to be forgotten.” I expect this ruling to become the global norm by the end of the decade. Technology should be empowering and liberating. Of course, I should be able to require Google, Facebook et al to obliterate any digital data on me they possess. Everyone should.
I consider Apple’s iMessage – SMS “bug” to be a sure sign of corporate hubris. The absolute worst trait any large company can have is hubris.
I love that Microsoft is sticking to its vision despite the doomsayers. Surface Pro 3 is meant to be both iPad and MacBook. Comparing it to just one device is skating to where the puck never was.
Yet, industry analysts seem universally opposed to the very idea of the Surface. They are wrong. The market for paid software licenses is, to quote Bob Dylan, rapidly fading. Microsoft should not even consider reigniting the licensing ecosystem of its glory days. Such a strategy will fail, miserably. iOS, OS X, Android, Chrome and Linux are now good enough and are cheaper and readily available. Microsoft must create its own devices for a bold new world even as its OEMs fall to pieces. The Surface Pro 3 has the potential to become the device we all really crave: both a tablet and a laptop.
Someone — anyone — says the word ‘grok’ and my brain instantly screams: poseur! I cannot turn this off. I refuse to believe this is wrong.
This recent New York Times piece that glowingly praises a smartphone app, backed by VCs, that sends under-employed Americans on a mad scurry to fetch groceries for harried tech warriors is, I suspect, that singular article we will all point to ten years from now as the glaring, obvious symbol of the last bubble.
Think about an iPhone 6. Go on. If it’s not a larger form factor, why do you even care? Odds are very high you don’t. I have to assume Apple knows this. No iPhone phablet this year and iPhone’s market share will plummet.
I can’t fault a Samsung lawyer for calling Apple “jihadists” considering the Steve Jobs “holy war” email.
But Then My Homework Was Never Quite Like This
Your assignment, dear reader, is to map the decision-making tree that led the Microsoft Corporation to offer the Surface keyboard as a separate item. I bet you fail. It is inexplicable.
Fitbit hires design icon Tory Burch. Intel partners with Barneys. Apple hires Burberry’s Angela Ahrendts. Rumors say Apple is dangling billions in front of cultural trendsetters Jimmy Iovine and Dr Dre. I think this is wise. Fashion boasts, fashion beguiles, fashion demands. Value and quality speak softly. It’s a big, noisy world out there.
Get a drone with a camera. Link it to your Oculus Rift glasses. Experience the world about you in profoundly new and different ways. Now, stream and share all you see and hear — on Facebook, of course. That’s Zuckerberg’s strategy.
One app, one task, one screen is a core value of iOS. If the new iPad allows two apps running on a screen, as rumors suggest, then we immediately know two things: 1) Apple is legitimately nervous about both Samsung and Surface, and 2) Apple intends to launch an assault on the enterprise. Smart and smarter.
I have serious doubts Tesla can ever build a car the 95% can afford.
We are all rock stars with our cool mobile phones.
Still Crazy After All These Years
The Samsung Galaxy Gear 2 is pretty. It’s also quite functional — provided you own a Samsung Galaxy. I think the bad reviews are all wrong.
I think a co-branded Mickey Mouse “iWatch” would be awesome.
Within ten years, schools and HR departments will have us wear Oculus Rift or a similar device to experience how others feel, think, and react differently to the very same people, words and actions.
The GoPro IPO, the rise of wearables, the Internet of Things, the budding Maker ecosystem. Hardware is eating the world, not software.
The best part of an iPhone phablet is it will create radically new experiences and app types. This Opera graphic reveals that phablet use is starkly different from smartphone and tablet use. No, I do not believe this is primarily driven by current phablet demographics. Rather, form factor.
I predict by 2017, apps will be made first for China for iPhone. Then for iPhone for America. Then Android. Then iPad. Then AOSP. Then Windows Phone. Then X or other.
Rhymin and Stealin
Dollar for dollar, there may be no better value in smartphones than the Lumia 630. And if I’m wrong, it’s because the Lumia 520, available for about $70, may be an even better value still. The Moto X and Moto E may prove me wrong yet again. Amazing, amazing technological evolution.
In 1997, Microsoft loaned Apple $150 million. Apple now has 1000X that just in cash. Also, one of these men is on the cusp of being a billionaire. No one saw either of those coming. We were all wrong.
Apple hardware is beautiful, understated, austere. Beats hardware is big, bold, gaudy. I have to believe an Apple – Beats acquisition horrifies Jony Ive.
It’s hard to overstate how much Google must fear Facebook. Facebook has over 1 billion users, mostly on mobile. Hundreds of millions voluntarily give Facebook highly personal information about themselves every single day, sometimes multiple times per day. This is not the same as unknowingly handing over select personal information to Google bots. By the decade’s end, search will be nothing more than a ‘signal’ for Facebook’s massive knowledge engine.
The other day, Yahoo flashed a pop-up on my screen asking me if I wanted to make Yahoo my default search engine. This made me laugh.
I believe Yahoo is on the cusp of what could be its worst-run, costliest period ever — and that, dear reader, is saying something. In her tenure as Yahoo CEO, Marissa Mayer has proven without a doubt her greatest strength is spending money. Sadly, her signal weakness is getting a return on said spending. If you are an investor, it’s time to storm the gates, else those Alibaba lotto winnings will be gone — fast.
Am I wrong? Share your thoughts.
This article is exclusively for subscribers to the Think.Tank.
This article is exclusively for subscribers to the Think.Tank.
We stand at the intersection of the Internet of Things and the Connected Car. Soon, Cortana shall summon to us a driverless, fully autonomous vehicle, shared by the community, owned by no one, that will safely transport us to our chosen locale, as we tweet, stream, and tap away from the comfort of the back seat. Mostly, this is good. For most even, it will likely be very good. But I fear one of humanity’s greatest inventions, the car, will be reduced to yet another boring box, stuffed with computer chips, powered by lines of codes, and possessing no soul.
Please Silicon Valley, do not kill my love for the car.
One Piece At A Time
A revolution is taking place within the automotive industry. It began not in Detroit, Germany or Tokyo, but as with all revolutions, from the outside. In this case, Silicon Valley. The spread of computing, connectivity and the cloud has at last reached our cars. Driving — and automobiles — will never be the same.
Per the glorious visions of venture capitalists, the new market dreams of old world automakers and the ceaseless, prosaic functions of the Internet of Things, this is our car’s very-near future: Sensors under the hood, inside the dash, within the tires, sensors embedded in the roads and placed above traffic lights, all pumping out streams of data in real time, sent via telemetry to nearby vehicles, transmitted to the web for processing and analysis, shared with the crowd, then acted upon by the many computer chips within our own increasingly self-aware vehicle, all part of a highly monetizable big data ecosystem.
I am not at all opposed to this. Such efforts will almost certainly lead to faster commutes, a greener planet, fewer accidents and many saved lives. The Silicon Valley vision for the car of tomorrow should be lauded.
I ask only that the very best aspects of the car be carried forward into the future and not de-constructed into little more than a cubicle on wheels.
As a native Detroiter, I know cars are more than just data generators. Cars are freedom, independence, liberty, aspiration, mobility. In so many ways, cars disconnect us from the world as they reconnect us with our primal emotions. Cars are beautiful, personal, powerful. I want this not to go away.
I am not at all convinced we can trust Silicon Valley to transform these glorious mechanical objects into anything other than another node in a data-fueled, globe spanning web.
Let Me Ride
While driverless cars, as Google has promoted, are likely a decade away from practical use, semi-autonomous vehicles should be available in the developed world well before the end of this decade. The Internet of Things will enable these semi-autonomous, ‘situationally aware’ vehicles to keep us properly centered in the lane, to apply the brakes if we, the ‘driver,’ fail to spot the pedestrian in the crosswalk. They can ease off the throttle should they sense another vehicle is too close.
The car of 2020, and probably much sooner, will inform us when we are driving too fast given the current road conditions — and take corrective action should we fail to heed its informed advice.
These semi-autonomous vehicles will communicate with other cars, busses, navigation services and transit authorities as much as they communicate with us. This is good. As a proponent of mobile technologies, the cloud, wearables, sensors, Bluetooth, et al, I fully appreciate the value that comes from the open sharing of our data. If I am stuck in traffic, by all means let my car inform others of a better route. If a driver’s car wishes to inform those of us a few minutes behind that there’s a hidden police stop, good for us.
Above all however, the connected car will make for safer roads. Over 95% of all car accidents are caused by driver error. The Internet of Things will put a stop to this.
According to Intel, which is keen to put still more computing chips into our cars, with a mere one second warning, over 90% of all car accidents could be prevented. A half-second warning will prevent over 50% of all car accidents. Sensors and computer chips can act faster than us. They can also behave far more rationally. If we are being dumb, careless, foolish or simply unaware behind the wheel, our connected car can save us from ourselves — and save many others as well.
Over one million people die each year from car accidents. The benefits of integrating connectivity and computing inside our cars and within our road systems is significant.
I still want the car to remain mostly mechanical, always beautiful, powerful, visceral — all those things that are never considered relevant in Silicon Valley.
Where I come from, it was absolutely no coincidence the boy whose father let him borrow the Camaro Z28 happened to be dating the prom queen.
No parallel to this exists for the young man with the biggest PC tower or the newest smartphone.
When it comes to our cars, whether for 2015 or 2025, let us not place clock speed above top speed, throughput over horsepower, or user interface above road handling. Nodes have primal desires, too.
No Particular Place To Go
While few things in life are as joyous as a fast car, top down, the open road beckoning, music blaring, such moments are rare. No matter how beautiful or powerful the car, the daily commute can be a grind. The connected car helps mitigate this, delivering all the comforts of our modern, fully connected world, accessible via a tap on the screen, or a command from our voice.
Stuck in traffic? No worries. The smartphone-like cars of post-2015 will offer:
- streaming music, your favorite podcasts, even videos (for the kiddies)
- news, weather, market data — read aloud, even personalized, as your new car, like a giant rolling Siri, knows your interests
- geofenced notifications
- Twitter and Facebook updates, voice driven, naturally
- the fastest routes to everywhere you want to go
- the nearest gas stations and restaurants
- driving analysis, perhaps even a driver ‘Klout’ score based on your speed, how hard you brake, how close you were driving to other vehicles
- engine diagnostics
These are all good. Silicon Valley is actively seeking to disrupt our commute. I stand with them. As our cars become increasingly more connected, tapping more computing power, more crowd wisdom, more algorithmic analysis, our driving should improve, our commutes should become more enjoyable, and ultimately, personal productivity should increase. Quite possibly, stress levels will all go down.
Again, my selfish concern is that these measurable goods will increasingly lead to an emphasis on “cars” that maximize efficiency, comfort, UIs, and that offer the best search, the most up-to-date data, the sharpest display.
Help Me, Apple. You’re My Only Hope
Is it possible to have the best of tomorrow with the best of yesterday?
I believe in the beneficent power of technology and innovation. I fully appreciate that Big Tech, Big VC, and Big Government want a lead role in the multi-trillion-dollar Internet of Things revolution. All are eager to remake our existing infrastructure, to place “intelligence” inside our cars, to link driver, car, road, and metro transit system into a cohesive, smartly flowing whole. I accept their work will alter not only driving but possibly even remake our towns and cities.
Why, then, does this make me a bit uneasy?
I do not fear my next car will experience a blue screen of death. Well, not much. Nor am I terribly worried hackers will access my car’s data, which will no doubt be linked to a payment system that lets me speed through electronic tollbooths.
I fear Silicon Valley will fail to divine the value in what makes cars glorious, and reduce the ultimate driving machine to just one more computing device.
Should I be disheartened or joyful that Apple SVP Eddy Cue joined the Ferrari board in 2012? Or that Apple SVP Phil Schiller sees fit to have a Racer X avatar on his Twitter profile?
Will these Apple executives help keep our cars from becoming just the latest personal computer box? I can’t afford a Ferrari, although I can pretend I’m Racer X — or possibly his brother, Speed. The question is, how long can I maintain the dream?
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What can you do with a billion iPhones? What can all of us do with a billion iPhones?
Analysts, telcos, networking firms and research consultants expect more than 4 billion smartphones in use by the end of this decade, maybe sooner. I agree. Where I diverge from most other experts, however, is that I believe Apple is well positioned to capture a quarter of this market, possibly more. That’s one billion iPhones.
What then? No, not what for Apple. I am not terribly interested in Apple’s valuation nor its ability to negotiate the best content deals or carrier subsidies. I am, however, extremely interested in what one billion iPhones means for all of us, as nearly everyone of these devices will have similar functions, use the same OS, possess the ability to track us in time and space and, through iTunes, include a user-specific payment service. That’s significant collective power.
Making The Case
Are one billion iPhones in use possible? My math says yes.
There are approximately 1.5 billion smartphones in use today, still far short of the 4+ billion smartphones I am estimating for 2020.
A key driver of smartphone growth is affordable, accessible mobile broadband service (3G/4G). Ericsson estimates that mobile broadband connections around the world will quadruple by 2019. This will result in 5.6 billion smartphone “subscriptions.” Some people may have multiple subscriptions (e.g. using multiple SIM cards on same phone to minimize voice and data costs), so this number is higher than the actual number of individual smartphones in use. Being on the conservative side, I estimate 4.5 billion individual smartphones in active use by 2020, a tripling of what we have today.
What will be Apple’s share of those 4.5 billion smartphones?
Here, I get a bit aggressive. Apple has nearly 20% of the market for smartphones in use — about 300 million iPhones. (Over 500 million iPhones have been sold since 2007.)
If Apple can maintain a global marketshare at around 20%, and the smartphone market climbs from 1.5 billion to 4.5 billion as I expect, Apple has close to 900 million iPhones in use — within striking distance of a billion iPhones.
Confession: I think Apple will do better.
iPhone consistently receives higher customer satisfaction scores than competitive devices. A higher percentage of Android users switch to iPhone than the reverse. These trends disproportionately favor iPhone going forward.
Then there’s Apple’s secret sauce — slowly, slowly improving hardware and features while holding the line on price, even dropping the price at times. We can confidently expect iPhones to get better year after year even as prices fall. In a market that is rapidly expanding, this is a huge advantage.
Imagine if today’s iPhone 5s was faster, simpler, more capable, and Apple cut the price in half. I expect exactly this to happen, albeit in slow motion. When it does, many of today’s very best smartphone makers will be unable to effectively compete. This means even more room for Apple to grow. Indeed, I think most analysts, blindly focused on Apple’s current margins, are wildly underestimating iPhone’s long-term market potential.
Consider the following:
Smartphones and tablets are highly functional, highly personal computers. By this definition, nearly 95% of every computer Apple sells today is priced under $1,000. Note: I derive this 95% figure thusly: Last quarter, Apple shipped 43.7 million iPhones. Their highest-priced version is the iPhone 5s with 64gb hard drive. It retails for $849. Apple shipped 16.4 million iPads. The highest-priced iPad sells for $929. The company sold just over 4 million Macs, most of them priced above $1,000. Add it up and 60.1 million personal computers out of a total of 64.1 million are priced under $1,000.
Given Apple’s commitment to improvement while holding the line on price, I expect that in a few years, certainly before this decade is out, that 95% of every computer Apple sells will not be priced under $1,000, but perhaps even under $500, and far better than today’s very best. How will high-end and mid-tier competitors survive in such an environment? Will there be Panasonic smartphones in 2020? Sony? BlackBerry? Xiaomi? LG? I’m not sure. Apple? Absolutely. Remember, Apple actually earns a hefty profit on each personal computer it sells.
Add it up and a billion iPhones in use by 2020 is an extremely likely possibility.
At One Billion iPhones
Okay, so what then?
First, as this is about all of us, we must consider the potential of a billion iPhones in the aggregate, and not what a singular iPhone in 2020 will offer.
Let’s use Facebook as an example. They have over 1 billion active mobile users. At last week’s F8 developer conference, Facebook offered new tools which enable deep linking and de facto integration across disparate mobile apps — taking you straight from your smartphone map to Yelp to your digital wallet, for example. This should prove useful for users and developers alike. This effort can only succeed, however, if there are enough smartphone users and enough of them have Facebook credentials and enough app developers can directly benefit by allowing Facebook to manage a user’s identity. Now there are.
Absolute numbers at massive scale enable new forms of innovation that otherwise could not exist. I expect the same to occur when we reach 1 billion iPhones.
Crowdsourcing Ideas For Peak iPhone
I am confident in my predictions and so I put it to you: where are your ideas?
My inclination is to focus first on media. The business model that today forces us to pay for content we don’t want simply to get the content we do want — aka cable television — likely fades away. Perhaps Apple offers a “Pandora for television” service, with virtually every TV program and movie available. With 1 billion users, it would be foolish to not let your content participate.
Mix iTunes, AirDrop and a billion users, all with their credit card info on file, and there now exists the potential to revolutionize how we consume and share media — it may become possible that each of us can financially benefit from our various online recommendations.
Entirely new forms of social networking also become commonplace. Apple’s new multi-peer service (“multi-peer connectivity framework”) essentially enables ad-hoc, proximity-based, peer-to-peer networking of iPhones. Imagine watching the University of Michigan football team alongside 100,000 screaming fans. There’s a great play, which is instantly available on your iPhone. Share and discuss the play with thousands of others, in real-time, in physical space, and in forms not previously possible. Now take these tools to a political protest.
A billion users on the same platform, each with their credit card information stored by Apple, will significantly impact the direction of online and offline payments. At such a scale, retailers everywhere might readily accept cash, charge or iPhone. No need for Bitcoin, PayPal or any other digital alternative.
Yes, Apple could indeed roll out its very own search engine with little concern of Google pushback should the company reach 1 billion iPhone users.
Perhaps it also becomes practical for every mall, every college campus, every city to place iBeacons everywhere, creating deeper links between people, place and time.
Of course, if Apple ever does reach a billion smartphones, the company’s value will almost certainly exceed $1 trillion. That’s Standard Oil territory, which resulted in a forced break-up. That idea also doesn’t seem farfetched.
Nokia has fallen. Not even the name will remain. America’s victory in the smartphone wars is complete — for now.
Last week’s news from the front lines of the smartphone wars illuminates the scope of America’s rapid mobile ascendency.
“Microsoft acquires Nokia’s smartphone and mobile phone businesses, its design team, most of its manufacturing and assembly facilities and operations, and sales and marketing support.”
Mobile active users are 1.01 billion as of March 31, 2014, an increase of 34% year-over-year.
“We sold almost 44 million iPhones, setting a new March-quarter record.”
And the week before, from Google:
Q1 2014 earnings totaled $15.4 billion in revenue, a 19% increase over the previous year’s $12.95 billion. Oh, and their Android platform is on nearly 80% of every smartphone in the world.
Designed By Apple And Google And Microsoft In America
iOS, Android and Windows Phone – American designed, American-led operating platforms all – account for nearly 98% of the global smartphone market, a truly stunning statistic. There appears no line on the horizon.
As the world rushes to replace their mobile phones with smartphones, even Microsoft, now a distant third, is well positioned to fully capitalize on mobile. Their takeover of Nokia includes the company’s very popular Asha brand of hybrid smartphones/featurephones, as well as Nokia’s traditional handset business, which still ships more than 200 million devices a year. (Second only to Samsung)
Should America celebrate these results?
Should the rest of the world take bold, perhaps costly action to limit the continued rise of America’s mobile dominance?
Probably they should try.
The Pivot To Mobile
How did America so convincingly win the smartphone wars? First and foremost by attracting, developing, retaining, and fully incentivizing the best and brightest.
Vision and execution are also paramount. Consider:
- Apple’s relentless pursuit of optimizing hardware while simultaneously improving upon and expanding the modes of interaction with that hardware.
- Google encourages, captures and then attempts to make sense of (and profit from) the multiple data streams we generate.
- Facebook seeks to connect the world on a fully human level.
- Microsoft has spent the past four decades making computer applications more empowering and productive.
Also, and despite their vast size, these companies move with speed. Witness Facebook’s head-turning pivot to mobile. I think Mark Zuckerberg should be hailed for this accomplishment.
Weaknesses Along The Front Lines
Are there weaknesses in America’s smartphone leadership? Several, in fact.
iTunes is the center of Apple. It’s what locks us in, it’s what helps lure new customers. iTunes revenues are falling on a per-user basis. If iTunes spending falls on a per-user basis, I believe hardware margins will follow suit. Apple is optimized for hardware margins. The iTunes trend line thus appears ominous.
Google still does not have an effective messaging strategy. This is confounding. There may be no more important mini-platform in the near term than messaging. Facebook, of course, battered its way into this critical market, dropping $20 billion on Instagram and WhatsApp in a single year. Google will almost certainly need to do the same. Larry Page has the wherewithal to follow suit — does he have the necessary humility? I am not convinced.
Google’s primary response to date, requiring SMS and messaging to default to Google’s Hangouts service, seems a rather anemic response.
Though it claims over a billion mobile users, Facebook has no smartphone platform. This perpetually locks them out from critical user, usage and location data. That Facebook is now looking to buy its way into the wearables market, which potentially delivers incredible amounts of user data, should be no surprise.
That said, what will Mark Zuckerberg do when the ‘monopoly’ money runs out? Successful businesses aren’t sustained on buying up others’ creations.
Despite the well reviewed Windows Phone 8.1 OS, Microsoft has yet to reveal it can create a thriving mobile-first business.
Microsoft’s purchase of Nokia notwithstanding, the vast majority of manufacturing of every piece of smartphone hardware is outsourced. The case has been made that regular interaction with new materials and new manufacturing processes will lead to those companies (and nations) becoming the primary source of innovation, thus trumping Apple, Google et al. This idea has not been borne out and I suspect it never will. Shedding our manufacturing abilities has no doubt damaged America’s middle class, but not its technology leadership.
Money and the Snowden factor
Smartphone platforms almost certainly contribute to a nation’s economic well-being and security. Smartphones link people, telecommunications and banking, holds our most personal information, tracks our movements, manages our identity, logs our purchases, connects us to first responders, and provides vital access to news, cultural and learning resources. We have to assume larger nations in particular are keenly incentivized to repel America’s technological reach. This is especially true in a post-Edward Snowden environment.
It’s not simply a matter of geopolitics, of course. Real money is at stake. Google and Facebook are effectively banned in China — and the in-country alternatives are now worth billions.
Over 90 million smartphones sell in China every quarter. China may decide to lock out Apple and Microsoft — or demand unreasonable ‘rents’. If China creates barriers to Apple, for example, or perhaps does all it can to promote or subsidize homegrown companies such as Xiaomi, then certainly Apple’s growth potential will be diminished.
I would also not be surprised if government sponsored firms in India or Indonesia, for example, purchase BlackBerry or commit significant resources to improving the open source version of Android (AOSP), which is free of all Google services. Success by any means necessary.
Why This Matters
Smartphones are the next great phase in computing’s decades long remaking of work, play, learning, commerce, creativity and connectivity around the planet. They connect us with nearly everything. America is in the lead now. Americans may wish to celebrate this. To remain at the top, however, will demand vigilance, daring and vision.
Each phase of the computing revolution appears to come faster than the one before. The smartphone wars will soon be the technology revolution of the past.
On April 22, 2014, Walt Mossberg wrote an article entitled: “Why Apple Is Like A Movie Studio.”
Is This The Beginning Of The End?
- “Some have argued that Apple’s era of greatness is over, that with CEO Tim Cook sitting in Mr. Jobs’s chair, the magic is gone, and Apple is now, at best, just an ordinary company. Others have countered that, financially, Apple is still doing quite well, and that there’s no evidence that it’s out of ideas.” ~ Walt Mossberg
Let’s make one thing crystal clear from the start. This is not a new debate. The debate over whether Apple’s “magic” is gone didn’t start with Steve Jobs’ death, it started with Apple’s birth. The only difference between the Apple doomsayers of today and the Apple doomsayers of yesteryear is pundits used to say Apple was doomed BECAUSE of Steve Jobs. Today pundits say Apple is doomed because of the ABSENCE of Steve Jobs. The doomsayers have altered their lyrics, but they haven’t changed their tune.
Where Is This Parade Of Which You Speak?
- “Steve Jobs has been dead for about two and a half years now, and it’s hard not to notice that the regular parade of game-changing Apple products for which he was famous seems to have disappeared with him.” ~ Walt Mossberg
The founding premise, upon which Mr. Mossberg’s entire article is built, simply doesn’t exist. There never was and there never will be a “regular parade of game-changing (tech) products” under Steve Jobs or anyone else. True game-changers are few and far between. And they appear sporadically and at anything but regular intervals.
Expecting Steve Jobs’ successor or Steve Jobs himself or anyone for that matter, to produce disruptive, game-changing, category busting products every couple of years simply ignores reality. Tech game-changers are to tech iteration as diamonds are to coal: rare, extremely hard to discover and precious.
Is Apple Like A Movie Studio?
- “…I think the most useful way of thinking about Apple is to see it as a movie studio. Studios release blockbuster franchise movies every few years, and then try to live off a series of sequels until the next big, successful franchise.” ~ Walt Mossberg
With all due respect, you simply cannot compare the creation of a movie franchise to the creation of a disruptive, game-changing, category creating product. They’re at different orders of magnitude.
- A movie franchise emerges once every few years.
- A game-changing product emerges once every few decades.
- A movie franchise alters the course a company.
- A game-changing technology product alters the course of an industry.
Take, as a single example, the notebook computer.
The notebook computer was basically re-invented when the PowerBook was introduced in 1991.
(T)he first PowerBook would set the standard for basic laptop design for the next twenty years, a fact that still surprises everyone. “We hit a homerun with the PowerBook,” Brunner said. “It surprised me to death. There were so many flaws with that machine and that design. I thought it was going to be a huge failure. But looking back today, basically all laptops are that design—a recessed keyboard, palm rests, a central pointing device.” ~ Excerpt From: Leander Kahney. “Jony Ive.”
The basic design for the notebook wasn’t changed again until the introduction of the tablet in 2010 — some nineteen years later.
Demanding Apple “re-invent” computing again — only 4 years after the release of the iPad — is akin to demanding the movie industry evolve from live stage performances, to silent films, to talkies, to digital special effects, every few years. It’s simply unreasonable.
Is It Now Or Never For The Sequel To The iPad?
- (S)equel time is almost up. It’s time for a new franchise. And it had better be desirable, logical and elegant. ~ Walt Mossberg
Are you kidding me?
You say: “time is almost up.” Why is that?
Wasn’t there time enough for the iPod to disrupt the MP3 market? Wasn’t there time enough for the iPhone to disrupt the smartphone market? Wasn’t there time enough for the iPad to disrupt the tablet market?
History’s Answer: “Yes, yes, and oh hell yes.”
You say Apple’s offering “had better be desirable, logical and elegant.” Why is that?
It’s not as if Apple’s tech competitor’s have gotten any traction in the marketplace with the “next great thing” in tech. In fact, when it comes to products like wearables, tech companies clearly don’t have a clue what they should be offering. They keep throwing every conceivable sort of device at the consumer in the hope something sticks and the consumer, in their turn, keeps chucking everything right back at them.
Why The Double Standard?
Why does Apple and Apple alone have to release a new “franchise” every couple of years? Why are there no calls for semi-annual new “franchises” from other tech companies?
Some of the “rules of thumb” regarding success are nothing succeeds like success; success breeds success; past success is a predictor of future success. However, when it comes to Apple — and only Apple — pundits instead apply a “rule of dumb”: Apple succeeded through sheer dumb luck and the odds are bound to catch up with them sooner rather than later; Apple is a one-hit wonder with, admittedly, a string of hits, which only makes it all the more certain their next offering will be a flop; while everyone else is taking target practice, Apple is playing Russian Roulette — each and every time Apple successfully pulls the trigger on another category, it also adds another bullet to the chamber, another nail in the coffin that has been patiently waiting for them these many years.
Worldly wisdom teaches that it is better for reputation to fail conventionally than to succeed unconventionally. ~ John Maynard Keynes
Does Apple Want To Be Pixar?
Apple is not like a movie studio. Pixar is like a movie studio. Pixar had only one innovation but it was a beaut– a process for creating hit animated films. Since then, Pixar has only iterated and iterated and iterated. And not only is that good enough, it’s great. It’s turned Pixar into a movie making hit machine.
Why would Apple want to become Pixar? Think about it. Apple has done everything that Pixar has done, and more. It is Pixar, that might aspire to become Apple. And to do so, they would have to create a new process — a process that would not only revolutionize the way Pixar made movies, but a process that revolutionized the way everyone made movies.
Then they would have to do it again.
And again and again.
Every once in a while a revolutionary product comes along that changes everything. It’s very fortunate if you can work on just one of these in your career. Apple’s been very fortunate in that it’s introduced a few of these. ~ Steve Jobs
Will Apple Ever Be Disruptive Again?
Apple is a hit machine, like Pixar, but they’re also serial disruptors — like no one else I’ve ever seen. The hits come out year after year after year. The disruptions (Apple II, Macintosh, iPod, iPhone and iPad) arrive not so regularly and not so much.
Don’t cry because it’s over. Smile because it happened. ~ Dr. Seuss
I honestly don’t know if Apple will ever create another disruptive product. Truth be told, we should be amazed Apple has created as many game-changers as they have. When you look at the careers of geniuses, almost all of them had their breakthroughs before they were thirty. Steve Jobs had breakthroughs before the age of thirty but as the days of his life dwindled, the speed and size of his disruptive innovations grew. And despite his premature death, his biggest disruption may be still to come.
I discovered that the best innovation is sometimes the company, the way you organize a company. The whole notion of how you build a company is fascinating. ~ Steve Jobs
Pixar has created a process that routinely churns out mega-successful movie hits. Did Steve Jobs create a process that would allow Apple to remain a serial disruptor? Only time will tell…
…but time knows how to keep a secret and it probably won’t be telling us any time too soon.
I believe most analysts, including those that monitor Apple’s every move, are seriously underestimating the ramifications of Apple baking Shazam’s music identification service into iOS 8. This is not merely about increasing song downloads. Rather, this move marks Apple’s determined leap to re-position the iPhone in our lives. The digital hub metaphor is now much too limiting. As the physical and digital worlds mix, merge and mash together to create entirely new forms of interaction and new modes of awareness, the iPhone will become our nerve center. It will guide us, direct us, watch, listen and even feel on our behalf.
A bold statement, I know, especially given the prosaic nature of the rumor. Let’s start then with the original Bloomberg report:
(Apple) is planning to unveil a song discovery feature in an update of its iOS mobile software that will let users identify a song and its artist using an iPhone or iPad.
Apple is working with Shazam Entertainment Ltd., whose technology can quickly spot what’s playing by collecting sound from a phone’s microphone and matching it against a song database.
Song discovery? Ho hum. Only, look beyond the immediate and there’s potential for so much more. That late last year, Shazam updated its iPhone app to support an always-on, always-listening ‘Auto Shazam’ feature is no coincidence. Our phones are becoming increasingly aware of their surroundings. I expect Apple to leverage this technological confluence for our mutual benefit.
Today, Song Discovery.
Apple’s move no doubt satisfies a near term need. While Shazam has been around since 2008, and the company claims 90 million monthly users across all platforms, having their service baked into the iPhone will almost certainly spur increased sales. Song downloads have slowed — not just with iTunes, the world’s largest seller of music — but across the industry.
Instead of having to download the Shazam app, iPhone users will now simply point their device near a sound source and summon Siri: “what song is playing?” So notified, they can then buy it instantly from iTunes.
Little surprise music industry site MusicWeek was generally positive about the news. Little surprise, also, the tech industry could not muster much excitement. Thus…the Verge essentially summarized Bloomberg’s report.
Daring Fireball’s John Gruber offered little more than “sounds like a great feature.”
Windows Phone Central readers offered only gentle mocking, reminding all who would listen this feature is already embedded in Windows Phone.
That’s about it. Scarcely even a mention Shazam has a similar, if less developed TV show identification feature which could also prove a boon for iTunes video sales.
Place me at the other end of the spectrum. I think the rumored Shazam integration is a big deal and not because I care about the vagaries of the music business. This is not about yet another mental task the iPhone makes easier. Rather, this move reveals Apple’s intent to enable our iPhones to sense — to hear, see and inform, even as our eyes, ears and awareness are overwhelmed or focused elsewhere.
Tomorrow, Super Awareness.
Our smartphones are always on, always connected to the web, always connected to a specific location (via GPS) and, with minimal hardware tweaks, can always be listening, via the mic, and even always be watching, via the cameras.
What sights, sounds, people, toxins, movements, advertisements, songs, strange or helpful faces, and countless other opportunities and interactions, some heretofore impossible to assess or even act upon, are we exposed to every moment of every day? We cannot possibly know this, but our smartphones can, or soon will. I believe this Shazam integration points the way.
It’s not just about hearing a song and wanting to know the artist. It’s about picking up every sound, including those beyond human earshot, and informing us if any of them matter. Now apply this same principle to every image and face we see though do not consciously process.
Our smartphone’s mic, cameras, GPS and various sensors can record the near-infinite amount of real and virtual data we receive every moment of every day. Next, couple that with the fact our smartphone’s ‘desktop-class’ processing will be able to toss out the overwhelming amounts of cruft we are exposed to, determine what’s actually important, and notify us in real-time of that which should demand our attention. That is huge.
Going forward, the iPhone becomes not simply more important than our PC, for example, but vital for the successful optimization of our daily life. This is not evolution, but revolution.
The Age Of iPhone Awareness
Yes, it’s fun to have Siri magically tell us the name of a song. Only, this singular action portends so much more. At the risk of annoying Android and Windows Phone users, Apple’s move sanctions and accelerates the birth of an entirely new class of services and applications which I call ambient apps.
Ambient apps hear, see and record all the ‘noise’ surrounding us, instantly combine this with our location, time, history, preferences — then run this data against global data stores — to inform us of what is relevant. What is that bird flying overhead? Where is that bus headed? What is making that noise? Who is the person approaching me from behind? Is there anything here I might like?
Your smartphone’s mic, GPS, camera, sensors and connectivity to the web need never sleep. Set them to pick up, record, analyze, isolate and act upon every sound you hear, every sight you see.
This has long been the dream of some, though till now was impossible due to limited battery life, limited connectivity, meager on-board processing and data access. No longer.
Let’s start with a simple example.
Why ask Siri “what song is this”? Why not simply say, for example, “Siri, listen for every song I hear (whether at the grocery store, in the car, at Starbucks, etc.). At the end of the day, provide an iTunes link to every song. I’ll decide which ones I want to purchase. Thank you, Siri.”
Utterly doable right now. Except, why limit this service to music?
For example, perhaps our smartphone can detect and take action based upon the fact that, unbeknownst to you, the sound of steps behind you are getting closer. It can sense, record and act upon the fact you walk faster each time you hear this particular song. Or you slowed down when passing a particular restaurant. What do you want it to do based upon its “awareness” of your own actions — actions which you were not consciously aware of?
Our smartphone can hear and see. It is always with us. It makes sense then to allow it to optimize and prioritize our responses to the real and virtual people and things we interact with every day, even those outside our conscious involvement.
Ambient Apps Are The New Magic
The utility of our smartphone’s responses will only get better. Smartphones sense by having ears (mic), eyes (cameras), by knowing our exact location (GPS) and by being connected to the internet. These continue to improve. It is smartphone sensors, however, that parallel our many nerve endings, feeling and collecting all manner of data and notifying us when an appropriate action should be taken.
Though still a relatively young technology, smartphones have added a wealth of new sensors with each iteration. The inclusion of these sensors should radically supplement the recording, tracking and ambient ‘awareness’ of our smartphones, and thus further optimize our interactions, both online and offline.
Jan Dawson posted this Qualcomm chart which illustrates the amazing breadth of sensors added to the Samsung Galaxy line over just the past five years. What becomes standard five years from now?
Hear, see, sense. The smartphone’s combination of hardware, sensors, cloud connectivity, location awareness and Shazam-like algorithms will increasingly be used to uncover the most meaningful bits of our lives then help us act upon them, as needed. This is not serendipity, this is design. I think Apple is pointing the way.
This article is exclusively for subscribers to the Think.Tank.
This article is exclusively for subscribers to the Think.Tank.
The blogosphere has suddenly discovered the incredible array of products, tools and services Microsoft has long possessed. Better late than never, I suppose. Fact is, their realization of the obvious is in large part due to the accessible dynamism and well-regarded tech cred of Microsoft’s new CEO, Satya Nadella.
Nadella’s hire makes for a great story on many levels. I will get to those in time. The more important story however, is the potential trouble brewing inside Apple.
Yes, Apple is the richest tech company in the world. Its laptops, smartphones and tablets are the established market leaders. But as we learned last week, from still another Apple-Samsung court case, Apple is clearly in the throes of that great ontological concern sure to stricken all those with immense wealth and power: Who am I?
The very question could prove debilitating.
Since being named CEO, Nadella has rallied the troops, made the necessary overtures to developers, appeased the critics, silenced the doubters and taken rather bold, once unthinkable actions to ensure Microsoft has a prosperous future in mobile, in the cloud, in homes and businesses, on Apple, the web, and the Internet of Things. Not a bad two months.
The talk about Apple? There’s still no large display iPhone and the iPhone 5c is still unwanted.
All Our Yesterdays
Thanks to Apple’s ongoing “holy war” against Google — and the court documents that are now public — we learned last week what we already suspected:
- Samsung’s ads attacking Apple users are particularly powerful.
- The market for smartphones costing less than $300 is growing like mad — and this greatly concerns Apple.
- The market for smartphones with displays larger than the iPhone 5 and 5s is growing like mad — and this greatly concerns Apple.
We learned something else, however. Something I had not previously considered — there is dissension among the upper ranks of Apple.
Apple is struggling to understand the bounds between margins and market share and how best to maintain the profit stranglehold its iPhone franchise has on the industry.
If Apple doesn’t know, this game just got really interesting.
Guess what? Apple doesn’t know.
The iPhone 5c has made that painfully clear.
With iPhone sales growth rapidly decelerating, SVP Phil Schiller is rightly worried “customers want what we don’t have.”
What Apple doesn’t have of course, is two things: an iPhone under $300 and an iPhone with a larger Lumia 1520-like display — the two areas where most of the smartphone growth is coming from.
Expect a larger display iPhone this year.
The low cost iPhone was supposed to be here already: the iPhone 5c.
Someone at Apple clearly blinked.
Given Phil Schiller’s exhortations for a low cost device, my suspicion is Schiller is now on the opposite side of Jony Ive and possibly even Tim Cook. Given the early growing pains of iCloud, perhaps Eddy Cue also was opposed to a low cost iPhone. They really needed to have decided all that before launching 5c.
Tomorrow and Tomorrow and Tomorrow
The iPhone 5c was meant to be the “low cost” iPhone but has failed at this one job. It’s almost comically overpriced. I’m now convinced internal divisions, corporate concerns over margins, branding and sourcing all forced Apple to blink and price the 5c far higher than it ever should have been.
As I wrote in a previous Insiders post (subscription required):
Apple’s iPhone 5c has been a striking failure, however, selling far fewer devices than Apple expected, likely dampening overall iPhone sales, and, if well-placed rumors are correct, very soon to be no longer of this world.
It all began, of course, with so much promise. The iPhone 5c — aka the “cheap iPhone” — was, we were convinced, going to be the aggressively priced new iPhone, ready to dismantle Android throughout the developing world, possibly beyond. It would (quickly) add tens of millions, ultimately hundreds of millions of new users into the Apple/iOS ecosystem.
Based on the court documents we saw last week, which make clear many inside Apple understood the pressing threat from the low end, such a low priced device was commissioned. Only…Apple doesn’t do low end.
But it must.
But Apple doesn’t do low end.
The end result: a failed product, at least. Given Apple’s strengths, that’s easy to recover from. If there are splits within Apple’s executive ranks, however, that could prove a lasting harm.
The iPhone 5c should not exist unless it’s priced at about $300 or so. The forces within Apple demanding such a device obviously clashed with the forces that demanded margins — and brand equity — trump new users.
I confess I find this fascinating.
I find it even more intriguing now that the giant, bloated, aging Microsoft has been rather stunningly re-energized.
In my earlier Insiders post on the iPhone 5c, I was troubled with the question, ‘why’. Why did the 5c happen and how?
Explain this: A 16gig 5c retails for $549. A 16gig 5s retails for $649. Why?
For that extra $100, the iPhone 5s buyer receives the following additional hardware, services and benefits:
- TouchID sensor
- Lighter weight
- True Tone flash and larger 8 MP sensor
- Slo-mo video
- Enhanced imaging features
I stated then Apple had foolishly devalued its hardware by making a mere $100 price differential between iPhone 5s and iPhone 5c:
The most egregious, most confounding failure of the 5c, and the one I think will haunt Apple, is that the 5c effectively declares to all the world that one or all iPhones are radically overpriced. I am at a loss to understand how Apple allowed this to happen.
Now I know. Internal divisions. The 5c is a fine product, one explicitly designed to bring millions more into the iOS ecosystem. Only, the counter-forces decided another piece of beautiful, functional Apple hardware could not be priced with other ‘mid-tier’ devices.
That’s just not Apple.
Full Of Sound And Fury
The iPhone still accounts for the majority of the Apple’s revenues. The focus then is on building out the iPhone base, maximizing its profit potential, surrounding it with more and more devices, services and accessories to ensure lock-in. This is Tim Cook’s wheelhouse.
You can brand Cook as not being a ‘product guy’ like Steve Jobs, or not a true techie like Satya Nadella, but there is probably no one better suited for growing Apple and the iPhone business.
With Cook in charge, and given his keen ability to scale manufacturing and optimize profits, expect the iPhone to be the center of the Apple universe for years to come, probably through at least this decade.
Apple wearables will require the iPhone. CarPlay will require the iPhone. New Apple accessories will be optimized for the iPhone. iBeacons will work best with the iPhone. New forms of peer-to-peer and point-to-point sharing, via the iPhone, will be rolled out over the months and years.
This is all very wise.
But I confess the failure of Apple to deliver a low cost iPhone, when so many obviously want one, when its top execs understand the potential for one, does make me question Cook’s ability to guide Apple toward the post-iPhone revolution.
Unfair? Perhaps. Even if I’m right, given I expect iPhones — smartphones, in general — to be our primary mode of computing and connectivity through this decade, Apple likely won’t feel the least bit of pain.
We are, after all, still well into the evolutionary phase of smartphone and tablet computing. This year’s iPhone, this year’s iPad, will be better than last year’s. Next year’s will be better still. And so on and so on. But a revolutionary new product? One that can live outside of the iPhone or iTunes sphere? Do not expect any such breakthrough product or service anytime in the near future from Apple. Apple is on a very direct course, set by Tim Cook, with its mission being to ensure the iPhone continues to print money. A low cost iPhone would have threatened the vision Cook holds for Apple’s future. It’s a vision I believe is almost guaranteed to succeed yet also highly predictable.
At Microsoft meanwhile, everything is in flux.
Which brings me back to Satya Nadella. He has the benefit of knowing his core moneymakers are nearing the end of their life. Tim Cook is not yet aware of such horrors.
When that day does come, I cannot say if he will still be the best person to lead Apple.