apple – Page 4 – Tech.pinions

Back To The Past With Oculus Rift

The pundits tell us Facebook’s purchase of Oculus VR is proof virtual reality has arrived, at long last. The future is now.

Except all I can think about is the past.

That’s what I mostly want from Oculus, or from Sony’s Morpheus or any similar device: the past. Not virtual reality or virtual presence, but a virtual time portal, a way to explore — to feel fully a part of — the events that shaped this world, this country, my life.

I was there with Jobs and Woz when they first started Apple!

Full disclosure: I was not there with Jobs and Woz when they first started Apple.

Imagine putting on your Oculus headset and instead of playing the most amazing, immersive game of Halo, you are tasked with parachuting onto a Normandy beach. It’s D-Day. You are there as it happens. Understand, this is not at all to diminish anyone’s effort or sacrifice, or confuse reality with imagination, but to enable each of us to viscerally, visually behold great moments in history in all their nasty, sweaty, dull, grinding, vicious glory.

Let’s explore not just the building of the Great Pyramid but the discussions on its construction. Watch the burning(s) of the library of Alexandria. Witness our own birth.

With the amount of documentary video evidence now at our disposal, and all our computing power, social media data, location-based tweets, check-ins and other information, soon we will be able to reconstruct the momentous events of our present in such a way our children really can use VR to transport themselves back to today’s equivalent of the founding of Apple, or, yes, go inside the deadly flights of 9/11.

Imagine how much better we might understand people and cultures, events, greatness, failure and chance if we focused the development of Oculus not on virtual realities but on very human ones.

We have arrived at a point that is, for real this time, only a short distance from making virtual reality a reality. Let’s not blow this chance.

I’m not that old. Despite what my son thinks, I’m not. My parents are still alive. My grandmother died a few years ago — after being struck by a car. I can remember what it was like pre-iPhone; hell, before everyone had a PC in their home. It’s taken a long time to get here, to a future we expected would happen by the 1990s, which makes me uneasy that nearly all the focus and all the cash behind VR is centered on gaming.

This is exactly what Facebook founder Mark Zuckerberg stated when he bought Oculus:

When you put (Oculus) on, you enter a completely immersive computer-generated environment, like a game or a movie scene or a place far away.

and…

The (Oculus) Rift is highly anticipated by the gaming community, and there’s a lot of interest from developers in building for this platform.

Ugh, gaming.

It’s not just Zuckerberg, of course. The computer industry seems intent on constructing virtual reality mostly for gaming. So much, in fact, the tech press accepts this vision without comment. The Verge:

Nothing delivers a feeling of immersion better than VR. VR has been a dream of many gamers since the computer was invented.

In discussing their VR headset, Sony Studios president Shuhei Yoshida noted it was the “culmination of our work over the last three years to realize our vision of VR for games, and to push the boundaries of play.”

Explaining the amazing potential of virtual reality, Wired similarly focused almost exclusively on gaming.

In a traditional videogame, too much latency is annoying—you push a button and by the time your action registers onscreen you’re already dead. But with virtual reality, it’s nauseating. If you turn your head and the image on the screen that’s inches from your eyes doesn’t adjust instantaneously, your visual system conflicts with your vestibular system, and you get sick.

Videogame pioneer John Carmack is CTO of Oculus.

Oculus received major venture backing from Andreessen Horowitz, after the product was demoed at a gaming conference.

Really, I could not care less about games or gaming.

Imagine, instead, being ‘there’ the very first time the Beatles performed at the Cavern Club. Or witness a father watch the last of his six children die as the plague sweeps across western Europe.

Is it wrong to embrace the future yet be so utterly fascinated by the past?

How can any game compete with actual human history?

The pace of VR technology is accelerating. Delivering sight, sound, motion have nearly all been solved. But let’s not have the potential of this technology become so limited.

I have hope. Many developers are working on building immersive non-gaming experiences for Oculus and similar devices. Though not currently practical, this large-scale D-Day simulation points, ironically, to a rather stunning future.

Can such efforts succeed? That’s up to us, I suppose, and what we desire from our very best technologies.

Zuckerberg has also said “one day, we (at Facebook) believe this kind of immersive, augmented reality will become a part of daily life for billions of people.” I believe him. But instead of billions of us being entertained, which I understand is enticing, what if we could (almost literally) experience the reality of someone thousands of miles away, a person we will never otherwise meet, one who is so much unlike us?

Or, perhaps, following a nasty spat at work, HR makes us (virtually) experience the demands, deadlines and plainly different personal outlook of the boss we think we can’t stand because she refuses to understand our situation.

Virtual reality could soon become the very best way for businesses, clubs, universities, and start-ups to tell if you are the right ‘fit’ for their organization: “your resume is amazing, Mr. Hall, but let’s see how you interact with our staff and customers first before we make our decision. Here, wear this headset for the next 60 minutes.”

Call someone a forbidden word at school and the principal may require you don the VR headset to better understand how those slings and arrows do wound. Messy? Yes. But also transformative.

I am not sure we can even begin to fathom how ontologically disruptive this technology will be, even though it is on the cusp of becoming our new actual reality.

With virtual reality, we will connect with people in profound new ways. We can also connect with times and places. Ecotourism is a massive industry but I am far more excited about historical tourism — visiting a specific place not because it’s restful or beautiful but because of who was once there and what the place once meant.

I completely understand why Oculus and the others, including Microsoft’s Project Fortaleza, are starting first with gaming. Yes, I know there will be porn. But there can be so much more, and that’s what I most look forward to. Keep your high score. Take me to where and when our today was made possible.

Up-Selling The Mac

Yesterday, in “Whither Apple Or Wither Apple?” I wrote about Apple’s efforts to steal market share from Android. Today I focus on Apple’s efforts to up-sell their iPhone and iPad customers to the Mac.

Continuity

At WWDC 2014, Apple introduced the concept of continuity — a slew of new features for OS X that are designed to make using your iPhone, iPad and Mac one truly seamless experience. The message was clear — if you want to get the most out of your iPhone or iPad — buy a Mac. Here’s just a few of the continuity features that Apple introduced:

— Unified look and feel
— SMS messages on the Mac
— Phone calls on the Mac
— AirDrop will work between iOS and OS X devices
— Mail drop will work between iOS and OS X devices
— Family: you can now share purchased music, movies and apps with up to 6 people — so long as there’s one credit card linking the iTunes accounts
— Handoff

Handoff is my favorite of all the continuity features and it exemplifies what Apple is trying to accomplish. With handoff, you have the ability to pick up your work right where you left off — whether that be on an iPhone, an iPad or a Mac. For example, you can start an email on your phone, realize that it’s going to be complex, and seamlessly move to your Mac and pick up your writing right where you left. Or, conversely, you can start an email on your Mac, suddenly be called out of your home or office, and pick it up and finish it on your iPhone or iPad.

One Step Back, Two Steps Forward

Three years ago, Apple held a back-to-the-Mac event. In it, they introduced a slew of iOS features for the Mac. Some of these features worked well, but others missed their mark. What Apple was going for was comfort — they wanted their iPhone customers to feel at home when using the Mac. However, some of iOS-type features — like launchpad and single-window mode — just felt awkward and out of place on the Mac.

With “continuity”, I think Apple has hit the sweet spot of iOS and OS X integration. It has little to do with making the iPhone work like the Mac or the Mac work like the iPhone. Instead, it has to do making the work you’re doing on the iPhone transition seamlessly to and from the Mac.

Enterprise

Apple constantly touts the fact that 98% of Fortune 500 companies use iOS. But Apple wants more — much, much more. In order to make that happen, Apple introduced new features at WWDC 2014 that were developed specifically for Enterprise, including “new security features, enhanced Mail and Calendar, and better device management. Equally meaningful are app extensions, which will not only make power users happy, but also better enable corporations to create and meaningfully use proprietary line-of-business applications.” ((Ben Thompson)) Further, there’s integration with Box and OneDrive as storage options. Even Mark Up can be used as a way of adding on-line signatures to Enterprise documents.

Why Bother?

All this begs the question: Why bother? Isn’t the PC a shrinking market and isn’t the Mac a tiny niche within that shrinking market? Why throw all these resources at a 30 year old device – virtually a tech dinosaur — that’s headed for extinction anyway?

Another thing Steve taught us all was not to focus on the past. Be future focused. If you’ve done something great or terrible in the past, forget it and go on and create the next thing. ~ Tim Cook

Isn’t Apple violating its own principles? Shouldn’t they be burying the Mac instead of praising it? Shouldn’t they cut loose the anchor that is the Mac and sail unhindered into their mobile future?

The Mac is dead. Long live the iPhone! Long live the iPad!

Whoa! Hold your horses there, Bucko. Not only isn’t the Mac dead, it’s about to make a big time comeback.

The Mac is still alive and well. ~ Ben Bajarin (@BenBajarin)

Resurgence

It is rather incredible to think about a 30-year-old product being a growth story, but it absolutely is the case. ~ Ben Thompson

Even before WWDC 2014, the Mac was going strong and growing stronger:

Mac sales have exceeded PC growth and gained overall marketshare in 30 of the last 31 quarters.
The 4.1 million Macs sold last quarter were a March quarter record for the company. If Gartner and IDC were accurate in their estimates of personal computers shipped worldwide, Macs accounted for between 5.3% and 5.6% of the total.
Apple’s average Mac selling price was steady at $1300.
The ASP, or average selling price, of the Mac line actually increased 2% quarter-over-quarter, climbing from $1,322 to $1,344.

In other words, PCs are getting cheaper and consumers are buying less of them and Macs are getting more expensive and consumers are buying more of them. In what world does that make sense?

The Mac Is The Grand Piano Of PCs

Smartphones and tablets have replaced PCs as the primary computer for most normals. But that doesn’t mean there isn’t a role for the PC. As the PC (and the Mac) becomes a specialized tool used mostly by specialists, those self-same specialists will want to use the very best tools available.

To steal an analogy from Ben Thompson, there was a time when the grand piano was the only piano available. Then the upright piano — which wasn’t nearly as good, but which was cheaper, smaller and easier to move — took its place. However, there were still those – mostly concert pianists – who needed a grand piano. Were they going to go cheap when they purchased said grand piano? Hell no! This is their livelihood you’re talking about. They’re going to get the best piano they can afford.

The same rule holds true for computing. For example, at WWDC — and at the Microsoft Surface event that preceded the WWDC — almost all the reporters had notebooks, not tablets, and almost all of the notebooks were high-end MacBooks, not cheap PC knockoffs. Concert pianists need concert pianos because their livelihood depends upon the quality of their tool. Reporters need high-end computers because their livelihoods depends upon the quality of their tool. Are reporters going to go cheap when they purchase their computer? Hell no! This is their livelihood you’re talking about. They’re going to get the best computer they can afford.

Anytime anyone NEEDS a grand piano, they’re going to want to spend enough money to get the best. And anytime anyone NEEDS a PC, they’re going to want to spend enough money to get the best. The Mac is the grand piano of PCs. And any specialist who needs a PC is going to want to buy a Mac.

Post-WWDC

Only about 20% of the worldwide market for computers is premium. This is bad news for the iPhone which is rapidly approaching saturation. But this is incredibly GOOD news for the Mac, which is nowhere near saturation.

And the Mac’s share of the Enterprise? Fuggedaboudit. The upside is virtually unlimited.

iPhones and iPads already dominate upscale and Enterprise usage. Apple’s new continuity tools send those users a clear message:

If you already own an iPhone or an iPad and you need to own a PC, then the Mac is the only PC for you.

Whither Apple Or Wither Apple?

“Whither” means “to what place or state: whither are we bound?” Wither means “dry up; wilt, droop, go limp, fade, perish; shrink, waste away, atrophy.” Following Apple’s World Wide Developer Conference (WWDC), we now know “whither” Apple is headed. Their base is strong and they seek to expand it by stealing share from Android and up-selling the Mac. Is that enough to make Apple’s base grow? Or is it a strategy that all but guarantees Apple’s base will stagnate and wither?

Base

Apple’s base is incredibly deep and strong.

IOS

Over 100 million iPods;
Over 500 million iPhones; and
Over 200 million iPads.
Over 800 million iOS devices sold overall.

Over 230 million iOS devices sold in the past 12 months, alone.
Over 130 million of those 230 million iOS devices went to new users. That’s a lot of new users and that’s the polar opposite of “stagnation.”

89% of iOS users are running Apple’s latest iOS 7 operating system. By way of contrast, only 9% of Android users are on Android’s latest operating system, Kit-Kat.

OS X

Over 80 million Macs sold. Note that 80 million Macs is only a tenth of the 800 million iOS units that have been sold.

Over 40 million of those 80 million Mac users are running the latest Mavericks operating system. That’s a 51% adoption rate, the fastest PC adoption rate in history. By way of comparison, after two years, Windows 8 adoption is at 14%.

While overall PC sales have declined by 5% over the past year, Mac sales have actually increased by 12%. Again, this growth is important for our later analysis, so please make a mental note of it.

iOS and OS X

iOS and OS X users combined are rapidly approaching one billion users.

Apple will easily reach the milestone of 1 billion iOS devices sold this year. ~ Horace Dediu (@asymco)

Developers

Over 9 million registered developers, up 47% since 2013. Let me repeat that. Apple’s registered developers have increased by an astonishing FORTY-SEVEN PERCENT in the last year alone. Again, this is the very opposite of stagnation.

Summary

Everyone keep in mind that Apple Is Doomed ~ Alex Wilhelm (@alex)

Undoubtably, Apple is doing better than well today. However, that still leaves unanswered the question of tomorrow. Where will Apple’s future growth come from?

Whither growth?

Apple has a lock on the premium MP3 ((The MP3 Market is fading fast.)), Smartphone, Tablet and PC ((Desktops and Notebooks)) markets. Apple’s grip on these market is very stable and not being seriously challenged. However, growth, not stability, is what one strives for. How then is Apple going to grow?

In his excellent analysis, “GROWING APPLE AT WWDC“, Ben Thompson of Stretechery breaks down the only two ways Apple can grow — either by stealing share from others or by up-selling to their existing client base. Today we’ll examine how Apple is trying to steal share from Android. Tomorrow, in my Insider article (subscription required), I’ll take long look at how Apple is trying to up-sell the Mac.

Stealing Share From Others

There are three ways for Apple to steal share from Android. The first is to expand sales into areas where only Android is for sale. That means expanding its base of carriers. Apple is doing that, so I won’t dwell on it here. The second way is marketing and the third way is to reduce barriers to entry — to eliminate “deal breakers” that might prevent Android users from switching to Apple devices.

Marketing

Half the money I spend on advertising is wasted, and the trouble is I don’t know which half. ~ Lord Leverhulme

During the World Wide Developer Conference (WWDC), Apple went out of their way to trash Android. This was not an accident. If Apple wants potential customers to switch from Android to Apple then Apple has to highlight where Android’s problems lie and how Apples products serve as the solution to those problems.

— Apple pointed out that Android users were often unable to upgrade to the latest operating system and over one third of Android users were still using an operating system four or more years old. These users are not getting great new features, not running the latest apps and not getting security updates (and it shows.)

— Apple highlighted their own spectacular (97%) customer satisfaction ratings.

— Apple harped on the many privacy concerns that surround Android and Google products.

— Apple hammered Android on their lack of security, and in so doing, added the term “toxic hellstew” to the computing lexicon.

Renee Richie, has written an excellent article wherein he notes that Apple wants to be seen as number one where it matters most: engagement, affluence and value. This is not a new message. Apple has hammered home this theme over and over again.

We are unique position of having world class hardware, software and service skills under one roof, which enables us to provide an unparalleled user experience to hundreds and millions of customers. Working with our vibrant developer community we have built a large and thriving ecosystem. We are winning with our products in all the ways that are most important to us, in customer satisfaction, in product usage and in customer loyalty. ~ Tim Cook

Removing Barriers

With iOS 8, Apple battles Android on its own turf, allowing its users more choice. ~ Gigaom (@gigaom)

In addition to marketing Android’s weaknesses and iOS’ corresponding strengths, Apple can steal share from Android by making it easier for Android users to switch. One way to do this is to remove barriers; to eliminate “deal breakers”; to annex popular, but unique to Android, features and make them their own. Apple did this, with a vengeance, at WWDC 2014. A few examples:

Notifications
Widgets
Messaging
Quicktype
Third-Party Keyboards
Exstensibility

Looks like the big news at WWDC is iOS becoming a power-user operating system. ~ Harry McCracken (@harrymccracken)

Tim Cook and Craig Federighi’s Apple?

Apple’s efforts to add geeky Android features to their own products may just be a market response — an attempt by Apple to attract more Android users. However, I think it may also be an area where the current management of Tim Cook and Craig Federighi diverge from their predecessors, Steve Jobs and Scott Forstall. Steve Jobs was a purist and I’m guessing he wouldn’t have wanted to use scarce resources to create features that he didn’t think were important to mainstream users. And make no mistake about it — because this mistake IS being made all across the Technosphere — many of the features Apple added on Monday are totally unnecessary to mainstream users.

One of the unique aspects of Apple has been its willingness to embrace counter-intuitive realities. For example, Apple alone seems to understand that the more you limit what a computer can do, the more likely it is that it can reliably do the things it can do. Another example is choice. Apple knows that simplifying a product has nothing to do with eliminating features and everything to do with eliminating the burden of decision making from its users.

[pullquote]The features we clamor for most are the features that normals use least[/pullquote]

This is, of course, heresy to the Technoratti. We live in our own little geeky bubble and don’t realize that the features we clamor for most are the features that normals use least. Being un-empathetic is a human condition, but neckbeards like us have raised obliviousness to an art form.

Apple is doing the things we told ourselves they’d never do in their stubbornness. ~ Gabriel Visser (@gvssr)

Hmm. Stubborn, ey?

When a person stands their ground and we agree with them, they are principled. When a person stands their ground and we disagree with them, they are stubborn. It’s all a matter of perspective and if there’s one thing the tech crowd is lacking, it’s perspective.

All we know is that the power features we so dearly love are essential TO US. Therefore, we assume these features must be essential TO EVERYONE. As Apple has demonstrated over and over and over again — it just ain’t so. Normals buy Apple products, not despite the geek features they lack, but BECAUSE they don’t have to deal with all that geekery.

Steve Jobs was a fanatic and we loved him or hated him for it. Tim Cook strikes me as a more practical sort of man. I’m told Craig Federighi is a bit more geeky than Scott Forstall was. It should, therefore, have come as no surprise to us that Apple was bending a little and becoming a little bit more Android-like.

It should have come as no surprise — but it still did.

Whither Apple or Wither Apple?

So, is this a good thing or a bad thing for Apple?

In the short run, it is great for public relations. The pundits and the techheads and the acolytes of “open” are eating this up. Google the words “Apple” and “WWDC” and “open” and you’ll find a dozen or so articles praising the “new” more “open” Apple.

My 2¢: for the past few years it’s felt like Apple’s only goal was to put us in our place. Now it feels like they might want to be friends. ~ Cabel Sasser (@cabel)

You know who needs a friend, Cabel? End users, that’s who. Because when developers become more important than end users you get — Microsoft.

Putting developers “in their place” — which is, to say, placed behind end users — is exactly what Apple should be doing.

So in the short-run, developers and geeks are loving the new friendlier, more open Apple. But how is that going to play in long run? Will the “new” Apple be a better Apple; a more successful Apple? Or has Apple begun to lose their way, betraying the very core of their being?

The Argument Against

There are a couple of very good arguments against Apple’s new approach. And, ironically, they come from no less a source than Tim Cook himself:

We believe in the simple, not the complex. ~ Tim Cook, Acting Apple CEO, January 2009 FQ1 2009 Earnings Call

We believe in saying no to thousands of projects so that we can really focus on the few that are truly important and meaningful to us. ~ Tim Cook, Acting Apple CEO, January 2009 FQ1 2009 Earnings Call

We don’t believe we can do things at the level of quality and link things as we want to between hardware, software and services so seamlessly if we do a lot of stuff. So we’re going to stick with our knitting with only doing a few things and doing them great. ~ Tim Cook

The Argument For

On the other hand, there’s this:

It’s not about pop culture, and it’s not about fooling people, and it’s not about convincing people that they want something they don’t. We figure out what we want. And I think we’re pretty good at having the right discipline to think through whether a lot of other people are going to want it, too. ~ Steve Jobs

Can we make a product that we all want? We think we’re reasonable proxies for others. So those are things we’d ask about any new product category. ~ Tim Cook

The Verdict?

Steve Jobs, Scott Forstall, Tim Cook and Craig Federighi all believed or believe that they were or are “reasonable proxies” for others. The proxies have changed. The products will too.

The technology isn’t the hard part. The hard part is, what’s the product? Or, who’s the customer? ~ Steve Jobs

As Steve Jobs said, the hard part is knowing who your customer is. So long as Tim Cook and Craig Federighi keep the customer in mind, no one will much mind if they make Apple just a tiny bit geekier.

Tomorrow

Tomorrow, in my Insider’s article (subscription required), I will take a hard look at the second part of Apple’s growth strategy: up-selling the Mac. It’s very counter-intuitive to seek growth in a shrinking market and one has to question how much of an impact this strategy can have. However, without question, up-selling the Mac is completely aligned with Apple’s business model and it may have much more upside that one would initially think.

UPDATE: The follow-up article, entitled: “Up-Selling The Mac” is now available, here. Subscription required.

Losing My Apple Religion. Seeking Salvation At WWDC.

I have crazy-high expectations for Apple’s worldwide developer conference. I expect, at minimum:

An iPhone phablet
iPad split-screen multi-tasking, necessary for the enterprise, awesome for gaming
Touch ID APIs to support mobile payments
Seamless inter-app communications
Apps that can actually push data onto the home screen — because we are adults and this is the 21st century
25GB free iCloud storage per device

That’s just for starters.

What I mostly expect from WWDC is neither new products nor long-overdue enhancements but rather, affirmation. Too often of late it appears that:

Ecosystem trumps product
Brand usurps technology
Growth precedes usability
Margin before accessibility

Does anyone else feel this way?

The creeping doubts refuse to leave — even as I happily work on my MacBook, play on my iPad and yearn for that large screen iPhone.

WWDC Pilgrimage

Today, we mark our annual pilgrimage to WWDC. We learn of the many new products, the updates to Apple’s operating systems, extensions to the platform, the new and better paths to monetize content and services. Everything, no doubt, will be better than before, better than what can be had anywhere else.

That should be enough. Why is it not?

Because we long time users — the Apple faithful — have always held Apple to a higher, more personal standard. Apple is more than a business, even as it has become the world’s biggest business. Why else would we care so much about a developer’s conference?

Apple will never again be run by Steve Jobs. Pirate Apple has become Corporate Apple. Understood. Nonetheless, we want Apple, more so than any other company, and no matter how big, how global, how rich it becomes, to stay motivated not by profits but by an absolute and unwavering:

commitment to innovation

Even as iPhone implants itself at the center of our computing life, we expect Apple to:

disrupt everything

Is this true of today’s Apple? WWDC will affirm our faith, or dash it.

Clearly, we hold Apple to an impossible standard, not merely a higher one. If Elon Musk can build a reusable space capsule capable of ferrying astronauts and supplies to the International Space Station, why can’t Apple? Why must Apple spend the equivalent of 150 Dragon V2 spacecraft on a single headphone company?

These are the wrong questions.

Apple cannot do everything, cannot be everything. It’s simply unfair and unproductive to make Apple our litmus test upon which to judge all technological advancement and innovation. They make computing products and services. Nonetheless, we can’t help but demand Apple, especially Apple, relentlessly innovate, incite countless new revolutions, lift humanity to ever greater heights, with little more than screens that connect us to the world and connect us to our talents, the parts known and the parts yet-to-be discovered.

Believe Different

Belief sustained the Apple faithful through the dark times. It is this same belief that is now called into question. We want badly to believe in today’s Apple, and not merely admire its many products.

We want to believe blocking our messages was a bug, not hubris.

We want to believe China is not just about more billions, but about bringing the best of American technology to the world.

We want to believe CarPlay and “HomePlay” and “HealthBook” and Passbook are about making our lives simpler, better, not merely add-ons to enrich the ecosystem.

We want to believe that positioning the iPhone at the center of our digital life is empowering, not lock-in.

We come to WWDC to be inspired.

One Of A Trillion

As Apple continues along its inexorable path toward a $1,000,000,000,000 valuation, we hope the company remains personally connected with each of us, somehow.

In a world of big data and globe-hopping algorithms, driverless cars and autonomous bots, we expect Apple, more than any other organization, to power personal connections and accelerate human ingenuity throughout the world. We want it all to just work, exactly as we desire, even as the company extends across a billion customers.

That Apple will introduce more and better devices and services at WWDC is a given. Success is assured. The iOS moat is already so wide, so deep, as to make the company practically unassailable. The company’s shimmering glass headquarters will soon rise over Cupertino, its future set for decades to comes.

It’s not enough. Not for me, not for many of us, I suspect.

Fair? Of course not. But past performance influences present expectations. Which is why I say: Be a crazy one once again, Apple. Show us you are fully prepared to disrupt yourself just as you gleefully disrupt the world. Make us believe that you do now and always will think different.

WWDC has begun. The floor is yours, Apple. No pressure.

The Terrible Tablet Tantrum, Part 2

Yesterday, in The Terrible Tablet Tantrum, Part 1, I raged at the notion that tablets were dead and enumerated facts that refuted that erroneous contention. Today, I take a deep dive into the two philosophical questions that seem to be perplexing Tablet Naysayers the most:

— Is the Tablet good enough to replace the PC?
— Is the Smartphone good enough to replace the Tablet?

The Tablet Is a Lousy PC/Smartphone

Many of the Tablet Naysayers justify their disdain for the Tablet form factor by pointing out the Tablet makes for a lousy PC or, on the other hand, it makes for a poor Smartphone. Jared Sinclair, in his article entitled, “Giving Up On the iPad” sums this argument up nicely:

The iPad can’t get better at these tasks without becoming either more like an iPhone or more like a Mac. For the iPad to become just as good as the iPhone, it would need to be smaller, equipped with a better camera, and sold with carrier subsidies and mobile data plans. But this would turn it into “just a big iPhone.” So this can’t be iPad’s future.

For the iPad to become just as good as the Mac, it would need to be larger, faster, equipped with expansion ports, and powered by software that supports legacy features like windowed applications and an exposed file system. But this would turn the iPad into a Macbook Pro with a touch screen and a detachable keyboard. This can’t be iPad’s future, either.

I can’t find a way out of an uncomfortable conclusion. In order for the iPad to fulfill its supposed Post-PC destiny, it has to either become more like an iPhone or more like a Mac. But it can’t do either without losing its raison d’être. ~ Jared Sinclair

NOT A PC

The future of the iPad is not to be a better Mac. ~ Ben Thompson

Here’s the thing the Tablet Naysays don’t seem to grok. THE TABLET DOES NOT ASPIRE TO BE A NOTEBOOK PC. The iPad is not, nor does it want to be, a Notebook replacement. It has much higher standards than that.

Further, nobody (outside of the fine folks living in Redmond) buys a Tablet in order to use it as a Notebook replacement. If anything, people buy Tablets in order to AVOID using it as a Notebook PC.

Timothy Leary once said:

Women who seek to be equal with men lack ambition.

Similarly, Tablets that seek to be equal with PCs lack ambition. The Tablet is so much more than the PC — why would it try to emulate it?

With the right approach, an iPad can do anything. You just have to stop thinking like a desktop user. ~ Darren Davies (@darrendotcom)

NOT A SMARTPHONE

“A smartphone is a great device for what I call ‘guerrilla usage’ — many different impromptu activities you can quickly perform with one hand, while walking, when idle at a bus stop or waiting somewhere, etc. All activities that make a smartphone the best tool for its (relatively) small size and practicality (one example for all: taking photos). But when I’m out and about with just my iPhone, for example, and I have time to sit and relax in a café, I’d like to have a bigger device for longer sessions of whatever I feel like doing (browsing, email, reading, writing, etc.) and the iPhone is not enough — and a 5-inch smartphone wouldn’t be enough either, sorry.” ~

Riccardo Mori

Let’s get the discussion of screen sizes back in perspective. People DO NOT WANT smaller tablet screens. They TOLERATE smaller screens.

People want the largest damn screen they can have. But they don’t want a large screen at the price of pocketability (If Microsoft can make up words, then so can I), one hand use, weight and inconvenience. When pocketability is not at issue, people choose the larger screen most every time.

NOT DONE YET

The truth about Tablets: We’re still figuring out how they fit. ~ Ryan Faas

People keep forgetting the modern Tablet is only four years old. It’s barely past the toddler stage. It has a lot of growing left to do and it has a lot left to show us.

That’s why I love what we do. Because we make these tools and they’re constantly surprising us in new ways what we can do with them. ~ Steve Jobs

NOT A TWEENER

The role of the Tablet is, in part, misunderstood because we metaphorically sandwich it between the Smartphone and the PC categories.

However the tablet category is not bound by either of those categories. The Smartphone, Tablet and PC are on a one dimensional computing axis. If you add another axis and label it “life activities”, the Tablet has far greater breadth and depth than either the Smartphone or the Notebook will ever have.

The whole idea of the Macintosh was a computer for people who want to use a computer rather than learn how to use a computer. ~ Steve Jobs

You have to learn how to use a Notebook. You have to learn how to use a smartphone. (If you don’t think that’s true, try handing a Smartphone to your grandmother.) I believe the ideal of a computer we don’t have to learn has (almost) been achieved in the iPad.

The older people all want to know how it does what it does, but the younger people just want to know what it can do. ~ Steve Jobs

Steve Jobs made that statement in the eighties. I think it no longer holds. With today’s modern tablets, children of all ages no longer ask what it does, they simply ask what it can do.

NOT A REAL ISSUE

Normally we do not so much look at things as overlook them. ~ Alan Watts

What a crock this whole “The Tablet Is A Lousy Notebook” argument is. Have you seen the iPad’s satisfaction numbers? They’re consistently in the nineties. People wouldn’t feel that way about a device that left them wanting. It is only geeks like us that find the Tablet wanting because what we really want is something other than the tablet. (This geek tragedy of asking the tablet to be what it is not and never was intended to be is embodied in Microsoft’s latest Surface efforts.)

The Tablet Is Altogether Unnecessary

Of late there has been a huge groundswell for the idea that the Tablets are unnecessary, were always unnecessary and will soon be absorbed by the PC from the above and disrupted by the Smartphone from below. Here are some quotes culled from yesterday’s article that support this contention.

The (Smartphone and the Tablet) are nearly identical in their technical specifications. They’re constructed from similar materials. They have the same operating system, chips, and sensors. It seems they differ only in size. ~ Jared Sinclair

While good at some of the things and pretty to look at, iPad (and other tablets) aren’t particularly useful. ~ Javed Anwer

Young people are growing up on the mobile phone as their primary computing device, which has fundamentally changed the way they use and think about the internet. Tablets are simply unnecessary for them… ~ Dustin Curtis

Young people don’t use tablets because they don’t see them as necessary ~ Owen Williams

Contention: people are discovering that tablets are not really a thing, and that in general, the gap between phone and PC barely exists. ~ Peter Bright (@DrPizza)

As battery life gets better and screen sizes grow, it’s likely tablets and smartphones will eventually just converge into one device that can be simply slipped into a pocket, instead of two devices that overlap each other in many areas. ~ Owen Williams

I don’t think tablets will ever disappear, but for mass-market use, they’re going to keep getting squeezed from both sides: larger-screened phones and smaller, lighter laptops. The percentage of people whose primary computing device is a tablet may have already peaked

Over the next few years, I suspect an increasing number of people will choose not to replace old tablets, instead just choosing to use their phones for everything… ~ Marco Arment

I think the future of the iPad is for it to disappear, absorbed at the low end by iPhones with large displays and at the high end by Macs running a more iOS-like flavor of OS X. Perhaps it won’t disappear completely. After all, for certain niche uses – especially those listed above – the iPad is great because it’s neither a phone nor a PC. But these are still niche uses and can’t possibly sustain the long, bountiful future that many hope the iPad has. ~ Jared Sinclair

History

To understand why the Tablet is not going to go away, let’s first look at how it arrived.

The modern PC arrived in the late 1970’s. It wasn’t as powerful or as versatile as the Mini-computers that preceded it, but it was much cheaper, could sit on your desk, and could be used by an individual. Thus the term “personal” entered the lexicon of computers, which gave us the Personal Computer (PC) we now know, love and love to hate.

The modern Notebook arrived approximately 20 years later in the late nineties. It too wasn’t as powerful or as versatile as the desktop PC that had preceded it, but its one great strength was transportability — you could pick it up, take it with you and use it at work or at home or on your way to and from work and home. It disrupted the PC, just as much as the PC had disrupted the Mini-computer before it.

In 2007, the iPhone arrived. Most people view it as a mobile phone replacement, but it’s really a pocket sized PC. It was clearly inferior to the Notebook computer in many ways but it wasn’t just transportable — it was pocketable as well. Pocketable made it mobile. Cellular antennas made it always connected to the internet. This changed everything.

In 2010, Steve Jobs famously introduced the iPad tablet and asked whether there was room for a new category of device between the Smartphone and the Notebook. The answer, obviously, was yes, but it is important to understand why so many people originally answered that question with a resounding, “NO!”

Study the past, if you would divine the future. ~ Confucius

The Tablet As A Separate Category From The Notebook

The benefit of an iPad was its simplicity. The touch user interface made computing accessible to the nine month old, the ninety nine year old and every age in between.

[pullquote]The computer geek defines “everything” as “everything a computer can do”. The Normal defines “everything” as “everything I can do.”[/pullquote]

The PC appeared to be able to do everything an iPad could do and more but only if you use a very stilted definition of what “everything” is. The computer geek defines “everything” as “everything a computer can do”. The Normal defines “everything” as “everything I can do.” The Notebook did more computer tasks than did the Tablet and it did them better. However, the Tablet did more life tasks than the Notebook could ever dream of doing.

The things we humans wish to do are so much more varied: sing, play, dance, even, I suppose, make spreadsheets. It is a spectrum, of which traditional “compute” activities are only a small part. ~ Ben Thompson

When the PC was the one and only computer we had, it was a generalist. It literally defined what could and could not be done on a computer.

When the iPad arrived, the PC became a specialist. The PC is really, really good at spreadsheets and tasks that require more processing power and tasks that require multiple or larger screens. The iPad — with its simpler and more approachable user interface — became the new general computer. It couldn’t do the edge cases nearly as well as the PC or the Smartphone, but it could do a whole lot of things that were never, ever, envisioned by the Notebook and it did them with a much shallower learning curve.

The Tablet Is The New General Purpose Computer. ~ Matthew Panzarino (@panzer)

The Tablet As A Separate Category From The Smartphone

We can take the very same analysis we just used to explain why there was room for a Tablet category beneath the PC to explain why there is room for a Tablet category above the Smartphone.

The benefit of the Tablet is still its simplicity. The larger screen real estate makes most computer tasks far easier to perform on a Tablet than on a Smartphone. That is the main reason why older people quickly gravitate to the Tablet while the young — who are more nimble and more willing to tolerate the inconvenience of a smaller screen (and who have less money) — gravitate to the smartphone. (But don’t be fooled into assuming the young prefer the Smartphone over the tablet. As soon as they enter the workforce, their tablet use begins to increase.)

At first blush, a Smartphone appears to be able to do everything a Tablet can do and more but at the cost of additional complexity. This is a totally acceptable tradeoff to make when we need to have our computer (Smartphone) with us at all times. Conversely, it is a totally UNACCEPTABLE tradeoff to make when no tradeoff is required, i.e., when we’re at home or when we otherwise have access to both our Smartphone AND our Tablet.

[pullquote] We choose efficiency when we must. We choose effectiveness when we can.[/pullquote]

Let me put this another way: Smartphones excel at mobility and efficiency. Tablets excel at effectiveness. We choose efficiency when we must. We choose effectiveness when we can.

Conclusion

The tablet Naysayers are simply wrong. The facts are against them and the analysis is against them too. Remember when the Tablet was born, both the Smartphone and the Notebook already existed. Why the Naysayers now contend no one really wants to use a tablet when consumers just spent the last four years throwing their dollars at Tablets is beyond me. What do the Naysayers think — the people who bought tablets were too stupid to realize they could have purchased Smartphones or PCs instead?

I return to my mother. She first looked at the iPad as cool, but foreign. Now you can barely pry it out of her hands. It is her computer. ~ MG Siegler

People adore their tablets. If you think the tablet is going away, it is because you think too highly of thinking and you don’t think enough about the awesome power unleashed by feelings.

The Terrible Tablet Tantrum: Part 1

In the first quarter of 2014, Apple sold 16.4 million iPads, a 16% drop compared to the number of units sold in the same quarter one year ago. Apple CEO, Tim Cook, explained the news away, but the tech press was having none of it.

Sales of iPad were flat. Sales were less than flat. Sales were depressed. Sales were depressing. Sales were awful. Sales were catastrophic. The Tablet world was about to come to an end! The iPad was hanging on by its finger tips!

You think I’m exaggerating, right? Employing hyperbole? I’ll let you be the judge. Here are some typical headlines and comments that have been written about Tablets generally and the iPad specifically over the past two weeks — many of them by some of the finest and most respected names in tech.

Headlines

Apple’s iPad Business Is Collapsing ~ Jim Edwards

Are the iPad’s go-go years over? ~ Jean-Louis Gassée

Contention: people are discovering that tablets are not really a thing, and that in general, the gap between phone and PC barely exists. ~ Peter Bright (@DrPizza)

Giving Up On The iPad ~ Jared Sinclair

Have we already reached peak iPad? ~ Brad Reed

I can’t find a way out of an uncomfortable conclusion. In order for the iPad to fulfill its supposed Post-PC destiny, it has to either become more like an iPhone or more like a Mac. But it can’t do either without losing its raison d’être. ~ Jared Sinclair

There is, however, a growing perception that the iPad growth could continue to stall. ~ Ryan Faas

Tablet demand hits a wall ~ Jon Fingas

I don’t think tablets will ever disappear, but for mass-market use, they’re going to keep getting squeezed from both sides: larger-screened phones and smaller, lighter laptops. The percentage of people whose primary computing device is a tablet may have already peaked.

Over the next few years, I suspect an increasing number of people will choose not to replace old tablets, instead just choosing to use their phones for everything… ~ Marco Arment

As battery life gets better and screen sizes grow, it’s likely tablets and smartphones will eventually just converge into one device that can be simply slipped into a pocket, instead of two devices that overlap each other in many areas. ~ Owen Williams

Young people are growing up on the mobile phone as their primary computing device, which has fundamentally changed the way they use and think about the internet. Tablets are simply unnecessary for them… ~ Dustin Curtis

I think the future of the iPad is for it to disappear, absorbed at the low end by iPhones with large displays and at the high end by Macs running a more iOS-like flavor of OS X. Perhaps it won’t disappear completely. After all, for certain niche uses – especially those listed above – the iPad is great because it’s neither a phone nor a PC. But these are still niche uses and can’t possibly sustain the long, bountiful future that many hope the iPad has. ~ Jared Sinclair

The iPad is dead. ~ Steve Kovach (@stevekovach)

The iPad is so over, even Apple seems to be moving on. ~ Galen Gruman (@MobileGalen)

The iPad may already be past its prime. ~ Brad Reed

While good at some of the things and pretty to look at, iPad (and other tablets) aren’t particularly useful. ~ Javed Anwer

Why Apple’s iPad Is in Big Trouble ~ Adam Levine-Weinberg

Young people don’t use tablets because they don’t see them as necessary ~ Owen Williams

Get Real

Whenever you find yourself on the side of the majority, it is time to pause and reflect. ~ Mark Twain

I cannot agree with the tablet doomsayers and I would respectfully suggest the facts don’t agree with them either.

1) PREMATURE: Talk about resting your entire argument on a thin reed. We’re talking about a single down quarter in a non-holiday period that has already been explained away as a glitch in the supply chain. Much of this speculation rests on a foundation so fragile a single robust quarter of sales will blow it into the dustbin of history.

2) AGE: The iPad is only four years old — FOUR YEARS — and has sold 210 million units.

3) PCs MANUFACTURED: If you count the iPad as a personal computer (and you should) Apple is, even excluding the Macintosh, the largest manufacturer of PCs in the world. For those of us who remember the days of Windows domination, that statement is absolutely mindblowing.

In 2013 alone Apple sold nearly as many iPad’s as they did Mac’s between the years 1991-2010. ~ Ben Bajarin (@BenBajarin)

4) STANDALONE BUSINESS: Based on the last 12 months of revenue, the iPad would be in the top 100 companies in the Fortune 500. ~ via MG Siegler

CAPTION: The iPad is only 17% of Apple’s revenues, but if it were split off, it would be a Fortune 100 company.

5) REVENUE:

In 2006 — the year before the iPhone — Apple had revenue of 19.32 billion.

In 2009 — the year before the iPad — Apple had revenue of 36.54 billion.

In the first 90 days of 2014 — the quarter that generated all of the angst-filled headlines — the iPad generated revenue of approximately 11.5 billion.

In other words, using back-of-the-envelope calculations, it appears that last quarter’s disappointing iPad revenues were twice as large as the revenues generated by all of pre-iPhone Apple and larger than the revenues generated by all of pre-iPad Apple. Most companies would kill for such disappointing results.

6) NEW USERS: Tim Cook reported over two-thirds of people registering an iPad in the past six months were new to the iPad.

Let me repeat — over two-thirds of the people buying iPads are NEW to the form factor.

Sounds like the opposite of stagnation to me.

7) EDUCATION AND ENTERPRISE: The iPad has captured an overwhelming 91% of the Education market and 95% of the Enterprise purchases. And yet we think the sales of the iPad are going to stagnate? With kids being handed iPads in their schools? With adults being handed iPads at their place of work? Seriously? Am I the only one who thinks that conclusion runs counter to all the evidence and is completely bonkers?

St. Paul schools dumps Dell after one year; students to get iPads

8) ANECDOTAL: A middle school teacher recently caught a student with this:

If you think a product that inspires kids to hollow out their books so they can sneak it INTO class is generating no interest amongst the young and is on the verge of extinction, then you are mad, I tell you, STARK RAVING MAD!

CAPTION: Picture of the typical analyst, trying to kill the iPad.

Adoption

Tablet naysayers are totally ignoring the existence of the adoption cycle.

A) The adoption rate of tablets has been extraordinary.

— The iPad is selling at nearly twice the rate the iPhone did during the iPhone’s first four years.

— The install base of tablets worldwide is almost as much as the install base of desktops. ~ Ben Bajarin (@BenBajarin)

— It took the PC approximately 15 years to reach one billion units sold. It will likely take the tablet 5-6 yrs. ~ Ben Bajarin (@BenBajarin)

— On its current trajectory, the iPad, by itself, will soon eclipse the entire PC market in terms of sales. The broader tablet market, of course, already did that some time ago. (Remember, this was all done in only four years.)

B) Rapid Adoption is highly predictive.

Historically, products which become ‘mainstream’ or widely adopted follow an S-curve during that adoption. The curve is remarkably predictable given a limited set of points….We are fortunate that data also exists for Tablets. ~ Horace Dediu

It is highly improbable that tablet penetration would rise from 0 to 42%, in a mere four years and then suddenly come to a screeching halt (more or less reversing itself). Such a claim is so out of keeping with historical norms the proof required to sustain it would have to be extraordinarily strong.

Exceptional claims demand exceptional evidence. ~ Christopher Hitchens

C) Some tablet naysayers claim the tablet market is saturated. I’ll let Mary Meeker respond to them:

We think tablets can be nearly pervasive but only six percent of people have one today. ~ Mary Meeker

Tomorrow

I may not agree with you, but I’ll defend to the death my right to tell you to shut up. ~ Andy Borowitz

Tomorrow, I take a deep dive into the two questions that seem to be perplexing Tablet naysayers the most:

— Is the Tablet good enough to replace the PC?
— Is the Smartphone good enough to replace the Tablet?

Turns out, the logic used to explain why the tablet deserved to be a category separate from the PC is also the very same logic that can be used to explain why the tablet will remain a separate category from the smartphone. Join me tomorrow and I’ll explain why. (INSIDER ARTICLE, Subscription Required.)

Has iPhone Lost The Best Value Crown?

Smartphones have gotten so good, so fast, and become so vital and accessible in such a short time, it’s difficult to accurately predict the direction of this market over just the next year, and nearly impossible over say, the next five years.

One aspect of the smartphone market that has remained steady throughout, however, is the iPhone always offered the best value.

No more.

A new crop of Android devices and remarkably low priced Windows Phones appear to have usurped iPhone along the value vector. This should put Apple on notice — and will almost certainly impact their branding, possibly even their pricing going forward.

No one ever got fired for buying the iPhone

The iPhone began as a revolution, turning the industry upside down. Since launch, Apple has worked diligently to improve the iPhone, expand its capabilities, and integrate it with other Apple devices and services. iPhone quickly became not just the best smartphone but the best smartphone for the buck.

There have always been solid reasons for not choosing iPhone, obviously, but value was not one of them.

Perhaps you couldn’t afford iPhone. You did not want a device with a locked-down ecosystem. The iPhone form factor(s) was not to your liking. All valid reasons for choosing ‘Other’. Now however, there may be another reason to consider a non-iPhone device: value. If so, this is a remarkable shift in the market and a new inflection point in the battle for market share and lock-in.

It’s hard to put a specific number on ‘value,’ especially as it can vary so greatly from person to person. It’s not just about design or usability. For example, iPhone’s value includes, at minimum:

device quality
integration with iPad and Mac
AirPlay
iCloud synch
free iWork
the most available apps
regular, free OTA updates
the most available digital content
minimal crapware
easy returns and superior support (for those near an Apple Store)
the largest range of accessories

The list is long.

Add to this list, the iPhone’s disproportionately high resale value. Dollar-for-dollar it’s hard to beat the iPhone — regardless of any personal preference for iOS.

Nonetheless, it appears new devices may now trump the iPhone, dollar-for-dollar.

For the Price of one iPhone 5s, you get 4 Moto E phones

It will cost you $650 for a 16gb iPhone 5s. For the same price, you can…

…Buy 4 Moto E smartphones.

No, the Moto E is not as good as iPhone 5s, not even close. It works only on 3G (not 4G). The screen is not nearly as nice. The camera is only 5MP — and there is no front facing camera. It also has only 4GB of memory, although this is easily expandable.

But, Moto E runs on Android KitKat, a very solid OS. It runs nearly every app, plays nearly every game you can have on your iPhone. Calls and messaging, social media and search, mapping and web browsing are all there.

On a per-dollar basis, it’s hard to think any smartphone offers a better value than Moto E.

Except, the Lumia 630, a mere $159 in the US, may offer a better value still.

Lika all Nokia devices, the Lumia 630 is beautiful, colorful and built to last. It runs on Windows Phone, which I prefer to Android although admittedly the platform continues to suffer from a lack of quality apps. It includes Cortana, Microsoft’s Siri competitor.

In my experience, Cortana offers fewer functions but has superior voice recognition.

The 630 has a 4.5 inch display, a remarkable 1.2GHz Snapdragon processor and 8GB of storage. I have not tested this, but reviews suggest the battery bests the iPhone’s. There is a 5MP camera but no front facing camera. In my experience, the embedded HERE Maps and turn-by-turn navigation Nokia offers is superior to Apple Maps. The 630 also has a swipe keyboard, which many users prefer.

Ready to buy? Ready to get one for you, your spouse and your two children — all for the price of a single iPhone 5s?

No? I completely understand. Apple has long made the very best, most desired smartphone. That’s the device most of us covet. If you can afford it, there’s little reason to not choose the iPhone. Nonetheless, the price, quality and functionality of the Lumia 630 and similar devices has to put Apple on notice.

Apple’s Loss is Our Gain

Apple devices, be they smartphones, tablets or laptops, have long been among the most expensive on the market. But, they have also consistently offered the best value, year after year after year.

Can we say that in a world where the new OnePlus One phablet is available for $350? This Android smartphone comes with 64GB of memory and has received gushing reviews. It is also obviously beautiful.

If the iPhone no longer offers the best smartphone value, dollar-for-dollar, then Apple will need to re-tool its marketing strategy as well as its product plans.

Tough for Apple, but a win for the rest of us.

The One Where Brian Is Wrong About Everything

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.

Apple, the Cloud and Two Jewish Chickens

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

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

Snippets

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

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

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

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

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

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

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

Bott concludes:

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

Misdiagnosis

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

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

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

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

why, Why, WHY?

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

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

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

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

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

Microsoft And The Jewish Chicken

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

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

Which reminds me of a joke:

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

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

Conclusion

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

What Is Apple Up To? Beats Me

Shooting Down Trial Balloons

On Thursday, May 8, 2014, a strongly supported rumor stated Apple was preparing to purchase Beats Electronics for 3.2 billion dollars. As the news flooded the technosphere, it seemed as though most every pundit felt the need to float a trial balloon in order to keep their virtual heads above the virtual flood waters. As I wasn’t able to generate enough hot air to inflate even a trial balloon of my own, I spent an enjoyable weekend sniping at others and shooting down their poorly constructed balloons instead.

What fun.

[pullquote]What if there were no hypothetical questions? ~ George Carlin[/pullquote]

I mean, after all, what’s the point of being an analyst if one can’t be anal once in a while, right?

But now it’s time to get back to the serious job of analyzing the Beats purchase…

…or is it?

CAPTION: The Beats Rumor Turned The Tech World On Its Head

Opining Is What We Do (Even When We Know We Don’t Know What We’re Doing)

Of course, the real expert opinion on why Apple would buy Beats is something like “damned if I know.” ~ Harry McCracken (@harrymccracken)

Speculation, Speculation Everywhere But No One Stops To Think

Kontra – as usual – has put his finger on the problem:

You can buy a lot of theories for $3.2B. ~ Kontra (@counternotions)

[pullquote]I think I am, therefore I am. I think. ~ George Carlin[/pullquote]

When Apple spends 3.2 billion dollars to buy something, we feel we need say something — even when we have nothing to say.

Informed Speculation vs. Uninformed Speculation

To paraphrase Mark Twain, the difference between informed speculation and the uninformed speculation is the difference between lightning and a lightning bug.

Premature Much?

[pullquote]Never trouble trouble till trouble troubles you. ~ American Proverb[/pullquote]

Did Apple buy Beats yet? ~ Matt Rosoff (@MattRosoff)

I’m 1,596 words into my Apple/Beats article; it would be really nice to have official confirmation before I publish! ~ Ben Thompson (@monkbent)

Analyzing The Analysts

So far the Beats deal has told us a little about Apple or Beats. But it’s told us a lot about analysts.

The Beats deal is a tech Rorschach Blot: no-one can see what it is so everyone projects their own view of Apple onto it. ~ Benedict Evans (@BenedictEvans)

Conclusion

You came to us, hungry for knowledge. Now, some ~2,000 pointless articles later, you are fed up.

To forget one’s purpose is the commonest form of stupidity. ~ Friedrich Nietzsche

[pullquote]What is left out…is as important as, if not more important than, what is put in. ~ Katherine Paterson[/pullquote]

The analyst’s job (like God’s, but with far fewer resources than God had) is to bring order out of chaos. Creating more chaos is not the way to get that job done. Sometimes one simply has to accept the fact the best analysis is no analysis at all. This is one of those times.

Which reminds me of a story:

Ted Koppel interviewed William F. Buckley on ABC’s popular Nightline show. As the show drew to a close, Koppel said to his famous guest, “Mr. Buckley, we have only a few moments left. Could you sum up in ten seconds?” The loquacious Buckley startled Koppel but endeared himself to viewers when he replied:

No.

Please Silicon Valley. Do Not Turn The Car Into Another Boring Box.

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.

And yet…

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.

A box.

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?

Some Potential Downsides for an Apple TV

Another year, another quarterly earnings announcement, a mere month before WWDC, and not a hint of an Apple Television. Don’t hold your breath. While many of us may crave the idea of an Apple Television and certainly millions of us are not pleased with our present television “experience,” there is little for Apple to gain by offering such a product. Indeed, Apple could actually be harmed by offering an Apple Television.

This is especially true for Apple’s two largest markets, America and China. In both, smartphones are commanding more of our time, more of our attention, more of our dollars. An Apple Television may do little more than shift our focus (and thus our dollars) away from the iPhone juggernaut. That would be a costly mistake for the company.

Stay On Target

The iPhone generates more than half of Apple’s revenues and profits. While some may insist this is a reason for the company to further diversify, such a sentiment is ignoring two critical facts:

The total addressable market for the iPhone extends into the billions of units. Nothing else comes close. Nothing. Apple’s primary focus therefore should be on aggressively growing the iPhone user base and maximizing the iPhone ASP, and not on lesser markets such as television.
The gains from an Apple Television (and any supplemental iTunes revenues) must be greater than any revenues and profits they might potentially steal from iPhone. There is no guarantee of this.

It is that second point which I think other analysts are missing. An Apple Television carries with it the very real possibility of dampening iPhone revenues. How? By diminishing iPhone engagement.

iPhone engagement — not margins, not prices, not functionality — is what so clearly separates the iPhone from Android. The rumored Apple Television carries with it the potential of reducing iPhone engagement.

Why take such a gamble?

Smartphones in general and the iPhone in particular have succeeded in doing what every other technology of the past 75 years has failed to do — capture our time and our attention at a level equivalent to or even greater than television. The “second screen” — the smartphone — is, in fact, quickly on its way to becoming our first screen. For Apple to risk shifting our focus away from the iPhone, even just a little, could precipitate a decline in iPhone engagement. Any such decline would directly impact iPhone usage, cut into iPhone sales, possibly bleed into the iPhone’s remarkable ASP.

In this light, an Apple Television seems needlessly risky, especially given iPhone growth appears to be slowing so appreciably.

While Apple no doubt would endeavor to build a television that fosters deep integration with the iPhone, any television worthy of the Apple brand carries with it the very real possibility of drawing our time and attention away from our beloved and far more personal second screen.

The iPhone In Prime Time

Despite television’s decades-long hold on our collective attention span, its days as our “first screen” are quickly fading. A recent survey offered a startling conclusion: time with our smartphone has now eclipsed TV time in the US.

While other studies somewhat counter these findings, the smartphone’s rapid rise in capturing so much of our limited attention is but one aspect of the profoundly shifting “screen” landscape. Recent Nielsen research concludes the obvious; even with the television blaring, our eyes are being drawn toward the smaller, more intimate smartphone screen:

Not only is smartphone penetration growing, with over two-thirds (67%) of mobile subscribers in the U.S. owning smartphones in Q4 2013, but consumer usage of phones is rapidly shifting toward increased screen time with entertainment and social media.

Americans simply can’t bear to turn away from their smartphones even while their favorite television programs are playing. Already, over 40% of us are regularly tapping, talking and staring at our smartphones — “multiscreening” — as the TV fades into the background.

For that multiscreening audience, 70 percent are looking and “unrelated content” (called “stacking”).

The other 30 percent are exploring related content or taking some action tied to the content or advertising on TV (“meshing”).

Television is becoming just one more feed inside our smartphone.

The data above is for the US market. The situation facing the original “first screen” is even more dire in China, where the smartphone extracts far more total time than the television.

Chinese smartphone owners spend nearly eight hours looking at electronic screens each day, the third longest in the world, with smartphones and laptops dominating their “screen time,”

Smartphones (170 minutes per day) and laptops (161 minutes per day) dominate their “screen time,” while TV holds their attention for only 89 minutes per day.

Death To The First Screen

Why enter a market that is becoming less relevant in our lives? Why risk detracting from iPhone usage?

A Kleiner Perkins Caufield and Byers study last year found the average user checks their smartphone 150 times a day. This number is higher still for the average iPhone user, as various metrics consistently show iPhone users spend more time on their device, more time on the mobile web, more time with apps.

Of course, it’s not just about how much time we all look at our smartphone screens but how we use them.

For a growing number of us in the US, China and every where else, the smartphone is simply more entertaining, more engaging, more attention-grabbing than anything and everything available to us on TV. Seen in this light, why would Tim Cook and Apple even consider such a product?

The derisively labeled “second screen” has become our first screen, and as with banks, that’s where the money is. Even the most aggressive analysis of the Apple Television’s potential suggest limited upside to the company’s value.

Perhaps Apple is working on a complete re-construction of the very idea of “television,” in which case my analysis is wrong. Or perhaps once Apple has sold as many iPhones as possible, then it might make sense to tackle the television market. If I were Tim Cook, I would take a pass, at least for now. What are your thoughts?

iPhone At 1 Billion. A Tipping Point.

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. America Wins The Smartphone Wars.

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.

From Microsoft:

“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.”

From Facebook:

Mobile active users are 1.01 billion as of March 31, 2014, an increase of 34% year-over-year.

From Apple:

“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?

Yes.

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.

Apple

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

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.

Facebook

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.

Microsoft

Despite the well reviewed Windows Phone 8.1 OS, Microsoft has yet to reveal it can create a thriving mobile-first business.

Manufacturing

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.

Why Apple Is Not Like A Movie Studio

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

Seriously?

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.

Shazam! Why iPhone Integration With Shazam Really Is A Big Deal.

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.

Peering Inside The Apple Rumors Prism

Steve Jobs fully understood the value in surprise, the wonder of magic, and the awe a beautiful, functional, highly personal computing device can evoke when unwrapped for the very first time. Rumors, particularly a stream of unceasing rumors of all kinds, tend to sully this ideal.

Not much can be done about it, unfortunately. Not only because Jobs is now gone but because Apple is far, far bigger than it has ever been. The company now comprises ten of thousands of employees, a massive retail chain, strategic partnerships with nearly every big name in media, relationships with automakers and contractors by the score. The Apple ecosystems spans nearly half a billion active users, a global supply chain that touches 4 million workers, hundreds of suppliers, and 18 worldwide final assembly plants. Leaks and rumors are inevitable.

In addition to leaks, there may be story plants, trial balloons, media spin, hurt feelings from those let go, false leads from those gunning for a promotion, snapshots from an anonymous line worker in China, misdirections from a savvy executive and slip ups by trusted employees. Given the scope of today’s Apple, shutting down the rumor-media industrial complex is simply not possible.

The end result of all of this?

We don’t know what we don’t know and we aren’t always sure what we do know. To be sure, all the rumors and all the talk may help whet our appetite for the next great Apple product. It can also lead to far too many brain cells preoccupied with even the most ridiculous Apple tales.

For example…iRing. Yes, leading Apple sites have written about and thoroughly dissected the very real possibility of a computerized ring, forged by Apple, which could be, it is presumed, a means to support digital payments, possibly serve as a remote control for the wearer’s music collection, and all manner of other nonsensical functions.

This will not happen. There will be no iRing. None. If for no other reason than should Apple even dare release such a product, every sneer, every cutting remark made by any and every Apple hater everywhere since the beginning of time would instantly be made whole. I can barely write the word ‘iRing’ without laughing.

I am certain, however, that talk of an iRing will persist.

The Apple Rumor Prism

Like it or not, expect no end to the Apple rumors and tall tales that emerge from the amorphous flotsam the media periodically feasts upon. This is all exacerbated by the fact Apple PR, whom I have been in contact with on many occasions, nearly always refuses to comment on any rumor. Realistically, they have little other choice.

Which begs the question: Is there a way to pre-determine the veracity of a Apple rumor?

(Wait for it…)

No.

The best we have so far are a few very well connected Apple writers, such as Jim Dalrymple, who can deliver a yay or nay but only at certain times and only for certain rumors. With Apple, rumors are like weeds, and no one person can stomp down all of them.

For example, thanks to the ongoing court battles with Samsung, we recently learned Apple has been rather concerned over the sales growth of large display smartphones, which it does not yet offer.

Surprise! Days later, we are treated to pictures of new iPhone molds suggesting a larger iPhone! Is this a plant from Apple? A false lead? Or some kid in Taiwan not very good with Photoshop? We don’t know. Worse, we tend to latch onto any data point, such as it is, that confirms our biases or affirms our hopes.

What then, is the best means of determining if a rumor is even merely likely when Apple refuses to say and the best Apple sources can’t (yet) verify? I focus on what I do know with a high degree of certainty and run the latest rumor through that prism. This may lead to some dead ends or errors, but it typically keeps me on the right trail.

I know with a high degree of certainty that…

Tim Cook is firmly in charge of Apple
Jony Ive is firmly in charge of the look and feel of Apple products — all of it, inside and out
Tim Cook has essentially removed Jony Ive from the bowels of the Apple design labs and made him a quite respectable SVP, which almost certainly means Ive won’t be as intimately involved with each and every product, manufacturing process and innovative material going forward
Cook’s big name hires have been in retail and branding, though he’s also hired veterans from the fitness and medical devices industry
Apple works on products and prototypes for years before it believes everything is just right for launch
iPhone margins are massive and counter to the direction of the marketplace
Apple cannot go down market ¹
Apple is comfortable with offering seemingly confusing choices for consumers (e.g. iPad Mini RD vs iPad 2 vs iPad 3, I think)
Core Apple products such as the iPhone, iPad and the Mac are typically replaced by users every 1-5 years, and many of these are not junked but rather re-sold by the original customer or a third party
Apple possesses a near religious fealty to the notion of continuous product improvement
Optimizing and innovating all hardware in pursuit of product improvement — and product margins — is hardwired into the company’s DNA
Apple’s relationships with IT decision makers and procurement personnel in government, the enterprise and businesses with more than 20 employees is woefully lacking
Apple is worth more than $450 billion and is sitting on approximately $160 billion in cash and equivalents

These guide me whenever I dare pick apart an Apple rumor or chase down the latest crazy Apple tale.

Caution: these ‘knowns’ are not equal!

The majority of Apple’s revenues come from the iPhone. The addressable market for the iPhone is radically larger than the market for any other extant Apple product. Each fact from above, even if entirely true in isolation, is not inviolable should it ever even potentially bring harm to iPhone sales and iPhone margins.

The Apple Rumor Mill

Running rumors though this iPhone prism serves as my handy guide in understanding if a rumor has legitimacy or not.

For example:

An iWatch should almost certainly integrate with (and be made most useful by) the iPhone. An iWatch will likely demand a keen sense of style, luxury branding and retail sales savvy. Given what I know, iWatch rumors are absolutely within the bounds of certainty.

An Apple television would not be appreciably enhanced by the iPhone. Televisions are kept in use far longer than five years. There’s little to justify this rumor, no matter its persistence.

A line of wearables or ‘smart’ accessories that all tie back to the iPhone? Absolutely. These enhance the iPhone’s value and should extend iPhone sales.

That Apple has to do anything this month, this quarter, this fiscal year to ensure its success? Complete nonsense.

A revolutionary new product that just might “disrupt” the iPhone? No. Repeat after me: No. For Apple to even consider disrupting its golden iPhone goose would not only be foolish but darn close to a dereliction of duty. Buttressing this is another fact: there is nothing on the horizon, nothing at all, even remotely ready to replace the iPhone (or any high end smartphone). Nothing. Not Google Glass. Not Oculus Rift. Nothing. We are in the early days of the smartphone market. Do not make me repeat myself.

Within a week of reading this, probably sooner, you will hear yet another rumor about Apple. Before considering it, pro or con, first make sure you run it through your list of knowns. Most of the time, you will immediately recognize the rumor as utter nonsense. On rare occasions however and no matter the source, you will stumble upon a rumor more true than not.

Such is life for those that follow Apple Inc and the hundreds of millions who love its products. The true story of Apple does not begin or end at product launch. Those are merely two data points in an ongoing and very rewarding chase.

—

^{1. [Feel free to counter my claim Apple cannot go down market. Remember, however, even the ‘cheap’ iPhone, the iPhone 5c, is one of the most expensive on the market, and note also the major Apple retail hires come from luxury brand companies.]↩}

Apple Is The Disney World Of Tech

On Twitter, Ben Bajarin, and others, recently argued that the value in tech tends to inevitably shift from software to hardware and, finally, to services.

Hardware to software to services. Apple is in a unique position to capture content. ~ Ben Bajarin (@BenBajarin)

Ben, you’re essentially saying Apple is beginning a new business model around iOS. ~ eric perlberg (@eric_perlberg)

I’m not so sure.

I think Apple’s business model is similar to the Disney World business model. There are boardwalks and amusement fairs aplenty, but there is only one Disney World. It it the crème de la crème of amusement parks. Similarly, there are smartphones and tablets aplenty but there is only one “Apple World.” It is the crème de la crème of mobile computing.

Disney World does not charge per ride. Rather, they charge a single admission fee to allow admission to their parks. Similarly, Apple does not charge for its platform. The iPod Touch, iPhone or iPad is the price of admission to their ecosystem — the “ticket” to “Apple World.”

Hardware As A Ticket

Pundits often ignore the value of Apple’s ecosystem. They compare Apple’s hardware to the hardware of Apple’s competitor’s and, finding it wanting, proclaim it to be “overpriced”. But if one includes the Apple ecosystem in the cost of the hardware, then the premium charged by Apple for their hardware is more than justified.

Without a doubt, Disney World generates huge amounts of money from the sale of foods, concessions and hotels, but it is the Disney Park that draws the customers. Similarly, Apple makes huge amounts of money from the sale of apps, music, TV and movies but it is Apple’s entire ecosystem — not just their content — that draws the customers.

Strategy Bonus

Microsoft sells its software licenses to Original Equipment Manufacturers (OEMs). They, not the consumer, are Microsoft’s true customers. Google gives away its services and sells consumer eyeballs to advertisers. The advertisers, not the consumers, are Google’s true customers. Apple, on the other hand, sells their hardware — their “ticket” to their ecosystem — directly to the end user.

Microsoft, Google and Apple all want the end user to have a superior user experience. But since Apple sells their hardware directly to consumers, it is easier for them to stay focused on that task. With Apple, the customer and the end user are one and the same. Apple’s desire to help its customers is perfectly aligned with Apple’s desire to help its end users. One might call this a Strategy Bonus. Microsoft and Google, try as they might to please the end user, have a customer layer between themselves and that end user. Apple does not.

Different, Not Best

Am I saying Apple’s business model is superior? Not at all. Throughout my life, I’ve enjoyed going to my local boardwalk and I would be unable to do that if the Disney World model were the only amusement business model available. On the other hand, it took a unique man with a unique vision to create a unique place like Disney World. It’s a one of a kind, world class, amusement experience. And the world would be a lesser place without it.

Similarly, it took a unique man with a unique vision to create “Apple World”. I’m glad the world has Microsoft and Google. But the world would be a lesser place without the unique vision that created Apple. It’s the Disney World of tech.

Panic Inside Apple and Cheers for Satya

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:

A7

M7

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.

The Genius Of Steve Jobs Or Why Google And Facebook Must Make Big Bets

The ghost of Steve Jobs haunts Google and Facebook. Unlike Apple, which has always aligned its interests with its users, both Google and Facebook must serve two masters: users and customers. They are not the same. Indeed, the divergent demands of these two groups has placed both web giants at a long term competitive disadvantage against Apple — one that will cost them billions to correct and will likely never be fully resolved.

Steve Jobs repeatedly veered from conventional Silicon Valley wisdom. His successes were legion. Given Apple’s current size and dominance, it’s easy to forget how so many of the big strategic gambles Jobs made were almost laughable at the time.

Vertical integration
Make both hardware and software
Keep design in-house
Create a global retail chain
Lock down your ecosystem
Make money on the hardware
Focus on fashion
Touchscreens are superior to physical keyboards

Google is, despite occasional shout outs to “openness”, absolutely following the Apple playbook which Jobs crafted decades ago. Facebook will follow as best it can, I suspect.

It’s not going to be enough.

Jobs made an even more profound strategic decision, one neither Google nor Facebook can ever match. It was a decision stunningly obvious in its simplicity, yet even today, despite Apple’s success, is still rejected throughout the Valley. That primal Jobsian strategy?

Your users are your customers and your customers are your users.

Sounds so simple, so obvious, yet think of nearly every start-up success in Silicon Valley this millennium, every hot new business model trend. Is the actual end user the actual paying customer?

In nearly every case, the answer is no.

In this disconnect, there is much weakness.

By linking Apple’s fortunes with the happiness of its actual users, Steve Jobs unleashed a slow-motion revolution that haunts Google and Facebook even now. Others, too. Even once dominant Microsoft, which remains radically dependent upon corporate buyers — not the actual users of their product — is hurting.

Obvious is not always easy.

The High Cost of Serving Two Masters

The divergent interests of users and customers is why Google and Facebook have been on such a massive buying spree recently. I do not expect a slowdown.

The latest acquisitions are not, as so many confounded analysts suggest, a sign Google and Facebook lack Apple’s “focus”. Rather, the fault lines in the Google and Facebook business models demand these acquisitions. That is, to make users happy and to make advertisers happy and to ensure an uneasy peace across both consumes enormous resources. Google and Facebook will always need to keep the checkbook handy. It’s not a lack of focus which explains their acquisitions. Just the opposite, in fact. Their focus is on a two-headed beast.

Before I go any further analyzing Google and Facebook acquisitions, I must acknowledge there are other, less critical factors at play:

Real Control
Fake Money

Google’s and Facebook’s founders have radically disproportionate voting control relative to their total ownership share. They can buy, even on a whim, and almost without explanation. Steve Jobs had no such control, nor does Tim Cook. Essentially, Larry Page and Mark Zuckerberg can buy whatever they wish without a single voice being raised.

In addition, the respective CEO-owners of Google and Facebook are fortunate enough to have inexplicably high PE values. $GOOG is at 31, $FB is 92 — that’s not a misprint. $AAPL on the other hand, trades at a stunningly reasonable 13. Whether you think the market is appropriately valuing these three companies is a separate issue. For now, the market is throwing money at Google and Facebook and money is of no use if it’s not being spent. I suspect if the market pushed Apple’s share price to a PE of 31, that Cook would likewise go on a shopping spree.

These two fortunate, albeit anomalous realities notwithstanding, the primary motivator behind the massive Google and Facebook spending sprees is, in fact, their respective CEO’s keen understanding of what their businesses require to succeed.

Think of a gushing well that nonetheless requires continuous priming.

Encourage. Capture. Present.

To continue earning billions, both Google and Facebook must:

Encourage use — to the point where they pay whatever is necessary to get billions more people online.
Capture our personal data — including where we are, who we are with, what we are doing, even how we are feeling.
Offer screens, tools, services and platforms so their paying customers — advertisers — can effectively present their message.

All their respective acquisitions are to maximize these three building blocks: Encourage. Capture. Present.

Thus, while couched in feel-good language, it’s shrewd business to encourage more people go online.

Last year Facebook and other tech companies launched Internet.org, a global partnership to make the internet available to the two thirds of the world’s population that doesn’t have it.

Thus, cool-sounding “AI” projects are really little more than a means of better extracting maximum value from the captured information of a billion plus users:

By teaching a computer to think, Facebook hopes to better understand how its users do too. So today the company announced that one of the world’s leading deep learning and machine learning scientists, NYU’s Professor Yann LeCun, will lead its new artificial intelligence laboratory.

Thus, a few years from now, when we spend as much time inside ‘virtual reality’ as we now do staring at our smartphones, Facebook will need to have a suitable platform for its advertisers to present their message. Enter: Oculus Rift.

SWOT

Of course, each company has its own unique strengths. As the graph below illustrates, I contend Google does a far better job of capturing user information — via Play, Wallet, Android, search, Maps, etc.

Both Google and Facebook do an equally good job of encouraging use.

Facebook offers advertisers more and better options to present their message — Facebook, Instagram, WhatsApp.

We should therefore expect both companies to acquire other firms, talent and technologies that enable them to further enhance their existing strengths and to shore up their weaknesses. For example, Facebook needs to build or buy tools to more effectively capture critical personal data. Might this lead to buying Foursquare, for example, with all its user-location data?

As we increasingly look to our wearables and smart watches, expect Google to buy or build tools to ensure their advertisers can present their message onto these new screens.

There’s still another consideration for potential acquisitions. The companies currently are split in the type(s) of information they are best at encouraging, capturing and presenting.

Facebook’s superiority is better suited for encouraging us to share how we feel, and its platforms allow users to more fully express themselves. Google by contrast, is far better at capturing what we want and what we are doing.

Given this, I suspect while both Google and Facebook will acquire companies that help them shore up weaknesses across the feeling-doing-wanting-expressing spectrum, the really big money will be spent on ensuring their current leadership is almost impossible to surpass.

Focused Acquisitions

Was $19 billion too much for WhatsApp? Likely. As was $2 billion for Oculus and $3+ billion for Nest. Fair enough. But, these acquisitions do not reveal a lack of focus – just the opposite:

Driverless cars will present ads and content in a captive environment without distraction.
Internet drones, lasers and balloons encourage more of us onto the web and onto the many and varied Google and Facebook platforms.
If any of us spends any appreciable time in the “metaverse”, then Facebook’s Oculus Rift gamble will enable advertisers to present a stream of messages into our eyes and ears, without any of the real world’s messiness.
Google Glass can (soon) present the latest reviews of the newest restaurant as we walk past — or instantly display where we can get a better price on our favorite gear.
Nest will help Google capture our home information.
WhatsApp encourages us to share a great deal of personal information.
Instagram encourages us to express ourselves.

The list goes on.

Therefore, when you read financial analysts, such as Felix Salmon, who insist Facebook’s latest acquisitions aren’t related, they are missing the big picture.

Look at his big purchases — Instagram, WhatsApp, Oculus. None of them are likely to be integrated into the core Facebook product any time soon; none of them really make it better in any visible way. I’m sure he promised something similar to Snapchat, too.

Wrong. It’s not about being “integrated into the core Facebook product.” Rather, it’s about encouraging use, capturing use, and maximizing its value to advertisers — which means enabling those advertisers to present their message to every user at any time, in all places, on all screens.

And it will never end.

Apple must make its customers happy. That’s no easy task. Google and Facebook, however, must make both their customers and their users happy. That’s much harder. The checkbooks will remain at the ready.

Market Share Metaphysics

Twice before I have used Aristotle’s concept of “Essentialism” to explain why tablets are “real” computers and why OS X will not be merging with iOS. Today, I go to the well one last time ((…unless I need to go there again in my desire to quench my thirst for knowledge (or drown my stubborn opponents therein).)) in an attempt to definitively and finally put an end to the messianic myth that market share equals platform. Hopefully, we shall never speak of this again. ((Fat chance.))

Essentialism

What attributes make things what they are? Or, what attributes make things not what they aren’t? (Confused yet?)

Aristotle drew a distinction between “essential” and “nonessential” properties. ((Actually, Aristotle called “nonessential” properties “accidental” properties. That’s totally confusing so I “accidentally” changed Aristotle’s wording from “accidental” to “nonessential”. It’s my article, I can do what I want.))

Essential properties are those without which a thing wouldn’t be what it is. Nonessential properties are those that determine how a thing is, but not what it is. For example, Aristotle thought rationality was essential to being a human being and, since Socrates was a human being, Socrates’s rationality was essential to his being Socrates. Without the property of rationality, Socrates simply wouldn’t be Socrates. He wouldn’t even be a human being, so how could he be Socrates?

On the other hand, Aristotle thought Socrates’s property of being snubnosed was merely nonessential; snub-nosed was part of how Socrates was, but it wasn’t essential to what or who he was. To put it another way, take away Socrates’s rationality, and he’s no longer Socrates, but give him plastic surgery, and he’s Socrates with a nose job.

The Elephant In The Room

One could describe an elephant as being big, gray and wrinkled. But are those essential or nonessential attributes?

Are there elephants who aren’t big? Sure. Baby elephants are small. So were prehistoric dwarf elephants.
Are there elephants who aren’t gray? Sure. There are brownish elephants. There may even be albino elephants.
Are there elephants who aren’t wrinkled? Sure. Maybe. Or maybe not. Who knows.

In other words, bigness, grayness, and wrinkledness all fail Aristotle’s test of defining what an elephant essentially is. Instead, they describe how elephants are, generally and nonessentially.

The Church of Market Share

The Church of Market Share says majority market share is essential for a computing platform to thrive. But is this even close to being true?

Are there successful platforms that aren’t big? Sure.
Are there successful platforms that don’t have majority market share? Sure.
Are there successful platforms that aren’t wrinkled? Uh, maybe. Or maybe not.

In other words, massive market share fails Aristotle’s test of defining what a successful platform is. Arguing market share size makes a platform successful is like arguing being “big” makes an animal an elephant. That’s simply a “whale” of a lie.

What Is Essential

What is “essential” to a computing platform is an operating system which forms the foundation upon which third party developers can develop; developers who create desirable products; and consumers who desire and acquire those products. Bigness may be nice, but it ain’t “essential.”

In other words, bigness, grayness, and wrinkledness all fail Aristotle’s test of defining what an elephant essentially is. Instead they describe how elephants are, generally and non-essentially.

Likewise, bigness, majority market share and wrinkledness all fail Aristotle’s test of defining what a successful platform is. Instead, they describe how platforms are, generally and non-essentially.

This is true only up to a point. Something as small, white, and round as an aspirin cannot be an elephant, and confronted with such an object, we would not be tempted to ask, “Is that an aspirin you’re taking or an atypical elephant?”

Market share as small as Microsoft’s Windows 8 and Blackberry’s cannot be dominant platforms. Confronted with such a platform, we would not be tempted to ask, “Is that an insubstantial, unfounded stereotype you’re swallowing whole and without critical analysis…or an atypical platform?”

The point is that bigness, grayness, and wrinkledness are not precise enough terms to be the essential qualities of an elephant. Likewise, bigness, majority market share and wrinkledness are not precise enough terms to be the essential qualities of a platform.

It’s a certain size range and a certain color range that, among other qualities, determine whether or not something is an elephant. It’s a certain size range and a certain market share that, among other qualities, determine whether or not something is a successful computing platform.

Wrinkledness, on the other hand, may be a red herring, or perhaps a “whistling herring”.

The Wrong Question Will Get You The Wrong Answer

Abe: I got a riddle for you, Sol. What’s green, hangs on the wall, and whistles?

Sol: I give up.

Abe: A herring.

Sol: But a herring isn’t green.

Abe: So you can paint it green.

Sol: But a herring doesn’t hang on the wall.

Abe: Put a nail through it, it hangs on the wall.

Sol: But a herring doesn’t whistle!

Abe: So? It doesn’t whistle.

Microsoft’s Windows platform was big, a monopoly and it whistled (or it didn’t whistle). But that doesn’t mean that it was or is the one and only way to create a successful platform. And anyone who says it is, is telling you a fish story.

Post-Moretm

Feel free to steal this argument and use it since I essentially (not accidentally) ~~stole it~~, er, borrowed it from Thomas Cathcart: “Plato and a Platypus Walk Into a Bar.”

Of course, a link to this article would be nice…

…just not “essential”.

The Computer Chronicles

Why are you here? Why are you even reading this?

Me? I know why and am grateful for the odd, stirring, mostly unplanned path that brought me here.

My father spent over 30 years working inside an auto factory, the first 20 “on the line”. When he heard “computers were the future”, he saved up, found one at a garage sale and proudly brought it home. It was a Commodore 64. I loved it from the start.

Confession: I have never cared much for coding, programming or building my own computer. I was however — and still am — acutely interested in what I could do with a computer. In the case of my 64, I was a kid, so mostly gaming. Lucky for me, dad’s garage sale booty included a “floppy drive”, several games and various “educational” programs.

In short time, I became reasonably expert at H.E.R.O., Fort Apocalypse, and Summer Games. There was a time when I engaged in far more virtual Raid(s) over Moscow than any of today’s most capable generals.

The Commodore 64 cost far more than my parents could reasonably afford. So from the start they made it plain it was very important, not at all a toy (despite how I used it), and repeated this to me like grace before dinner. Computers, they insisted, are the future. Be a part of that.

That’s why I’m here.

Intel Inside. And Maybe Hopes & Dreams.

Of course my native Detroit was far away from Silicon Valley, the fast beating heart of the computing revolution. It didn’t matter. The 64 carried me here. For all the machines that followed, the used Mac, the shiny new Mac LC, the Toshiba laptops and many more, it was that first 64 which shed a light on my future, a future where people and data and machines and ideas and random musings are all connected.

The Commodore 64 lured me down the rabbit hole that was online bulletin boards, which led me to Prodigy, Dialog, Compuserve and others. From there, I discovered Mosaic, then Netscape. By then I had a career in computer tech, almost without planning it; my parents’ intentions realized.

I can’t stop now. I don’t want to stop. It’s not just there’s more to come. More is coming faster, and it’s even more amazing.

Consider the scary-exciting merger of healthcare and computing. Acknowledge the rapid rise of Facebook and global messaging, from nothing to vital in a few short years. Reflect upon the astounding functionality of the iPhone, the utter pervasiveness of Google, how giant Microsoft is morphing before our eyes. We have new media, mobile payments, crypto currencies and experimental forms of retail. Global connectivity has dethroned the sovereigns of time and distance. Yet, both real time and precise location are now more critical to more of what we do and say (and even think, see and feel) than ever before. I did not see that coming.

I am here as well because the visions, proclamations and inspired work of the early computing pioneers really did come true. Their words, their mad tinkerings quickly spread far beyond Silicon Valley, where the shrouded potential of their creations seeped into our computer-less consciousness, found their way into the local news and duly informed my parents who went straight out and acquired for me everything they were told I would need to become a part of the future.

I am pleased to still be part of this long running serial.

Yes, our industry failed at much. The endemic spread of pornography, the utter devaluation of personal privacy, our rather casual silence at how the latest waves of computing technology are displacing good, smart, hardworking people by the millions, leaving them with little to do but hope self-employment, freelancing and the sharing of labor and tools can somehow enable them to get by. There is much to fix.

Random Access

The arrival of that Commodore 64 led to another serendipitous find. We could afford only one television in those days, no cable, and when home, my father religiously watched the local news and all sports. Big-ticket purchases like the 64, however, demanded he work on Saturdays — time and a half made those 8 extra hours of work equal 12 hours of pay, which mattered dearly. Which led to him being gone one particular Saturday. Which led me to gleefully run through all 9 channels. Which is when I stumbled upon The Computer Chronicles.

“the amazing palmtop computer”

The Computer Chronicles documented, almost from the very beginning, the rise, the spread, the incredible innovation of personal computing. It proved to me — because it was on television — a career in computers was viable, no matter where I lived.

I am more excited, more convinced of the transformative power of computing tech and its ability to achieve net good than ever before. This is one reason why I never play favorites. It’s why I can’t suggest you buy Bitcoin, no matter how hyped it has become, or why I cannot recommend the iPhone 5c, no matter how greatly I admire Apple. It’s why my posts cause numerous CEOs and VCs (and several editors) to immediately block me from their Twitter feeds, and limit my access.

All worth it. This stuff matters to me and I fully appreciate how it impacts you.

We are the screen. The screen is the world.

Whatever the reasons you are here, I am glad you are. Now hang on tight.

As Google and Facebook appear to buy up everything that was only yesterday considered cutting edge, as venture capital becomes, somehow, even more of an insider’s game, with not even scraps available to the rest of us, I nonetheless stay positive. I know money, computing power, networking, software, the creeping of technology into all aspects of our life and into every personal and business endeavor, and the random, very human mutations that takes hold inside this swirling glorious mix will continue to create still more and larger revolutions, more big and bigger bangs, more insanely great.

We are rapidly transitioning from the era of personal computing to an era where each person is a computer — with eyewear, wristbands and clothing all capturing who we are, what we do, and how, when and where. Then sending this data floating off, joining up with 7 billion similar nodes.

We are the screen. The screen is the world.

I say this all not because I have a product to sell you or because the larger, more pumped the market, the greater the return on my quickie investments. I say this because it’s true: The computer chronicles have only just started.

Rebuttal: Why Android Wear Is Not the Beginning of the Wearable Devices Era

Molly Wood, writing for the New York Times, thinks that Android Wear is the beginning of the wearable devices era.

I doubt that.

The Line Of Reasoning

This is Woods’ argument in a nutshell:

1) Nascent technology needs a platform to be successful.

2) Android Wear gives wearables that platform.

3) The availability of an operating system for wearables will lead to an almost immediate boom in device development.

4) The hardest thing about creating a platform is creating the software.

5) By offloading the development of the platform to Google, the smart watch makers can get down to making devices people actually want to wear.

6) The mockups are hot…

7) Ecosystems matter and Android is currently the most popular ecosystem in the world.

8) Android Wear will jump-start the wearables industry in a meaningful way.

9) Apple just fell a little farther behind.

There are, in my opinion, lots of holes in Woods’ argument, but let’s just focus on two: First To Market and the Job To Be Done.

First To Market

First, let’s address the ludicrous argument that “Apple just fell a little farther behind.”

It’s not who’s “first” that matters, it’s who gets it right first that matters. Microsoft was ten years ahead of Apple with their tablet solution but none of that mattered because the iPad was the first to get it right. Smartphones were years ahead of Apple’s iPhone but, again, it meant nothing because they were on the wrong path. Their supposed “lead” in smartphones evaporated seemingly overnight as first Palm, then Microsoft’s Windows Mobile, then Nokia’s Symbian and finally RIM’s Blackberry rode off into the sunset.

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

I mean, seriously, why are we still having this sort of discussion? The press is so damn anxious to see who’s first, they never seem to bother to ask themselves: “First at what?” And that reminds me of a joke:

A shark comes home covered in fresh blood. Pretty soon all the other sharks smell the blood and begin to hassle him about where he’s been hunting. He told them to go away and let him get some sleep but they persisted until finally he gave in. “OK, follow me” he said and swam out with hundreds of sharks behind him. Farther and farther and farther they swam. Finally the bloody shark slowed down and all the other sharks excitedly milled around him. “Now, do you see that boat over there?” he asked. “Yes”, they all responded as one. “And do you see that propeller on the other side of the boat?” “Yes, Yes, Yes!” the sharks all screamed in a frenzy. “Good” said the bloody shark, “Because I sure as hell didn’t!”

MORAL: Being first is not always best. If you smell blood in the water, it may be your own.

Questions

[pullquote]Confound those who have made our comments before us. ~ Aelius Donatus[/pullquote]

At this point I was going to ask a bunch of questions, but the inimitable Jean-Louis Gassée beat me to it with his Monday Note entitled: “Wearables Fever.”

As Monsieur Gassée so aptly put it:

“Smartwatches and other wearables produce more pageviews than profits.”

So let’s turn our attention away from the many questions that dog wearables and focus instead on the one question that really matters:

What Job Are Wearables Being Hired To Do?

Let’s return to my summary of Molly Woods’ argument:

“5) By offloading the development of the platform to Google, the smart watch makers can get down to making devices people actually want to wear.”

That sounds very, very backwards to me — a problem seeking a solution.

Do you remember Google TV? Well neither does anyone else. Google TV was supposed to revolutionize TV viewing. Google made the software and its partners made the hardware. It was perfect except for the fact that no one in their right mind wanted it or needed it.

Pundits get so caught up in technology, that they forget that the technology has to serve a purpose and that the purpose is defined by the user — not the creator — of the technology. The dog at right is standing on a “platform.” It’s an amazing trick. But so what? It’s just a trick, not a sustainable platform. Amazing is not enough. Amazing is a novelty, soon to wear thin. For a product to be successful, it has to be both useful and desirable.

Steve Jobs reminds us of what matters:

The technology isn’t the hard part. The hard part is, what’s the product? Or, who’s the customer? ~ Steve Jobs

So again: “What job is the wearable being hired to do?”

Vendors want to sell features, but customers want to buy benefits. For example, hardware stores try to sell us drills, while we, the potential customers, are trying to buy holes. We don’t care about a products features, we only care about its benefits.

The question then is, what “hole” in our lives does Android Wear seek fill? Again, Steve Jobs gives us a clue:

It’s really great when you show somebody something and you don’t have to convince them they have a problem this solves. They know they have a problem, you can show them something, they go, “oh, my God, I need this.” ~ Steve Jobs

If you can tell me what job Android Wear Is going to be hired to do and by whom it is going to be hired to do it, then I may well change my tune. But if Android Wear is Google’s answer to wearables, then I think Google may need to change their question.

You can tell whether a man is clever by his answers. You can tell whether a man is wise by his questions. ~ Naguib

Why Bitcoin Still Does Not Matter

You can buy Bitcoin today, swap your next mortgage payment for this aggressively hyped “cryptocurrency,” lose it all to crime, fraud or incompetence, no questions asked. Yet you are still legally barred from even participating in crowdfunded investments of fully vetted Bitcoin start-ups.

Clearly, something is wrong.

Marc Andreessen and his A16Z venture capital group have regularly taken to Twitter to preach the Bitcoin gospel. Andreessen is such a believer in the expansive financial power of Bitcoin he intends to significantly increase his firm’s $50 million investment in the Bitcoin ecosystem — hinting he may invest upwards of hundreds of millions over the next few years:

Like the Internet, Bitcoin will emerge as an accepted technology, Mr. Andreessen argues, as it becomes more regulated and consumers and businesses become more comfortable with the idea of digital currencies.

Want to ride the Bitcoin start-up wave? Sorry, you can’t. The government considers you a lowly “non-accredited” person. Meaning, you cannot put any of your money into any venture capital fund or into any of its portfolio companies. You cannot even participate in a equity “crowdfunding” service, the kind that pools small fund amounts from dozens, potentially thousands of investors, eager to be part of the next big thing.

No matter how much you believe in Bitcoin, no matter how fully you believe in Andreessen et al, as a non-accredited person you won’t be able to legally invest in any of their well-promoted start-ups; at least, not during these heady land rush days. Your only hope is to buy a Bitcoin and pray for the best.

The early financing game continues to route around you.

Fair? Surprisingly, many think so, even those who have directly benefitted from the web’s otherwise open nature.

Tech news blogger site, GigaOm, which has received millions from venture capital, recently editorialized that preventing the “crowd” — that’s you and me — from investing just like venture capitalists is actually a good thing:

Full-blown crowdfunding — which allows anybody to buy shares in any company on the internet — has attracted hype, but it’s still not here. There are good reasons for that.

I disagree.

I believe the short history of the Internet reveals empowering individuals ultimately creates more new net value. Disruption works. There is nothing more disruptive than access to money — and the more you have, the greater the access. Being able to invest in start-ups from the start can do just that.

We can vote, own a gun, volunteer to serve in the military, run for public office, purchase Bitcoin, post intimate photos of our junk on social media. Yet we are still prevented by law from getting in on the ground floor.

This makes no sense.

Tens of millions have already been lost on Bitcoin, still more on day trading. Gambling is legal, much of it state-sponsored. There remains a plethora of “no money down” mortgage options that surround us. Given these high-risk, middling-reward options available, why then is the government still preventing us from investing in the high-risk high-reward field we know so well? Few understand the value of Snapchat, or Airbnb, or some amazing new smartphone beacon technology as keenly as we, yet still we are denied the opportunity to partake in the wealth-creating, sanctified pursuit that is venture capital.

In the valley of disruption, the biggest disruption of all eludes us.

The Crowd Is Kept Waiting

I would, right now, hand Marc Andreesson my spare $1,000 and have him place it in any A16Z fund, or directly into a Bitcoin-specific investment, such as their $25+ million investment in Bitcoin “wallet” Coinbase.

Even though I think Bitcoin itself is toxic.

I want in. I want in now. I know there is ample room.

According to the National Venture Capital Association (NVCA), there are approximately 450 venture capital firms in the US (based on available 2010 data). VC firms are managing $177 billion in committed capital. The average fund size (again, for 2010) was $149 million, with about 2,750 companies receiving funds — 1,000 received funding for the first time.

I believe I can do better than most of these sanctioned venture capitalists, at least in web tech — if given the chance.

You, like me, read up on this industry daily. We work in this industry, and have for many years. We know the CEOs, the investors, the products, the markets, the technologies, the dreamers. We understand the potential and respect the risks. But still we are kept on the outside, looking in. This is not merely denying our abilities, it is denying our potential to further empower this great country.

Again, from the NVCA:

Venture capital is a catalyst for job creation, innovation, technology advancement, international competitiveness and increased tax revenues.

If venture capital achieves all that now, imagine how much more good can be accomplished when you and I and everyone we know can directly add our monies and our smarts to the industry, right from the start. Question: Why haven’t the venture capital firms fought for empowering the crowd as eagerly as they have hyped the still suspect ‘currency’ they expect the crowd to use?

The Wisdom of the Government

I am an expert in technology, not investing. This has not prevented me, however, from leasing a car, mortgaging a house, buying stock in numerous companies, some with share prices hovering around $1. I am now ready to invest in start-ups. I know this industry and I know what can work. Regrettably, the government still won’t let me.

For the government, it’s still a rich man’s game. The only way you can contribute money to a venture capital fund (or even to a equity crowdfunding platform), is if the US government labels you an “accredited investor.” To earn this lofty designation, you must…

“…have a net worth of at least one million US dollars, not including the value of (your) primary residence or have income at least $200,000 each year for the last two years or $300,000 together with (your) spouse if married and have the expectation to make the same amount this year.”

Anything less, and you are callously labeled “non-accredited.” It breaks down like this: If you’re not riding the Google Bus, you probably don’t qualify. Doesn’t seem fair, I know.

This could all change, however, and perhaps quite soon.

The 2012 Jumpstart Our Business Startups (JOBS) Act altered many of the rules for funding start-ups. Title III of the JOBS Act could potentially allow those of us who are non-accredited to finally invest in start-ups, just like ‘real’ venture capitalists, should the SEC give the ok.

Be warned. There are several caveats to the rules changes the SEC is pondering:

Most notably, the government appears to still remain highly suspicious of the “equity model” of crowdfunding. (Kickstarter-like models, with no money on the line, are acceptable.)

The SEC appears set to require that any start-up seeking to raise money via equity crowdfunding will only be able to raise up to $1 million every 12 months. In addition, there will be rather arduous disclosure requirements that will cost start-ups dearly — money they obviously do not have. Worse, the very act of going through the crowdfunding disclosure process will likely brand any such start-up as unworthy to (ever) be invested in by Big Venture Capital, which can review the start-up’s unique assets behind closed doors. Thus, those with the most promising of ideas or technologies will remain incentivized to bypass the crowd. (Again, that’s you and me.)

In addition, we “non-accredited” investors will only be able to invest about 5% and no more than 10% of our income or assets.

Despite all this, the gate is rattling.

The SEC has apparently finished listening to comments on crowdfunding. Now, they are mulling exactly what to do. Perhaps it’s my techno-optimism, but unlike many financial analysts I fully expect the SEC to do the right thing. Once they do, once they allow the likes of you and me to invest in start-ups, expect a massive sea change.

It Don’t Take A Weatherman

I am no pollyanna. I’m quite certain clubby insiders will wish to remain clubby. The very best VCs will continue to grow their massive funds from institutional investors, not folks like you and me. Fraud will not magically disappear despite the vigilant buzz of the crowd picking through every document a crowdfunded start-up lays bare. The “magic the gathering” Bitcoin ‘bank’ painfully proved to far too many unfortunates that fraud and failure remain part of the human condition, even at the farthest reaches of the technology galaxy.

But we will finally have our shot.

Yes, we know venture capital is risky, even in small amounts. Is it any more risky than buying $10,000 in Mt Gox Bitcoins? Is it any more risky than flipping houses? We understand, as the Wall Street Journal states, that “over 60% of high-tech start-ups…failed to return any capital, and just 7 percent were essentially jackpots, generating returns of five times or more.” So be it. True equity crowdfunding will finally offer me a shot to invest at the start — just like blogging came along and enabled me to become a professional writer.

In fact, I have already registered with the “equity crowdfunding” site Startup Valley. No, they can’t legally allow me in, not yet. I am also registered at the crowd funding portal RockthePost. Still waiting there as well. That’s all right. My money is patient.

Who Will Be My Venture Capitalist While I Cannot?

It strikes me as both odd and extremely unfair that anyone in America can, with a bit of effort, buy Bitcoin. They can spend their life savings on it, in fact, and lose everything, and do so with almost no real recourse. Yet, for nearly all of us, including those of us who track this industry so closely, we cannot invest in any of the start-ups that are explicitly focused on growing the Bitcoin ecosystem!

Look, don’t touch. Buy, don’t own. So much for the belief in the wisdom of the crowd.

Sure, you can go on Kickstarter right now and “invest” in, say, that new Veronica Mars movie. If the producer generates enough, you might earn a free download of the final product. As for a financial stake? Forget about it.

We are being played. Worse — we are kept from playing. Still.

Billions in venture capital will be invested in the US this year alone. How much of it are you a part of? Zero, no doubt. You’re kept on the outside looking in, even in Silicon Valley — the land of the great disruptor.

Check out some of the top VC-backed tech companies. You know these intimately. You use their products. You have followed them from the beginning, contributed to their success. Yet you are unable to garner any potential windfalls when they go public.

The first start-up to receive venture financing was Fairchild Semiconductor — in 1959. That was 55 years ago. It’s been a long, long wait to allow all adult Americans to be part of this extraordinarily cozy, massively wealthy, highly influential sector we glorify so dearly. I am confident it will happen very soon.

No more…Brian S Hall. Writer.

Soon…Brian S Hall. Writer. Venture Capitalist.

As it should be.

Better For The World? Apple Or Google?

Arguably, Apple and Google are the largest, richest, most powerful, most influential technology companies on the planet. Across many markets their products, services and technologies directly compete with one another. Yet, in countless endeavors, each benefits the other, enabling both to earn more, reach more, do more, grow ever larger, their creations touching nearly all of us.

Which begs the question: which company creates more good in this world? Apple or Google?

Unknowable?

I think the question a valid one. Despite their many similarities, the companies have profoundly divergent strategies when it comes to the development, release and spread of technology. Seeking the answer to this question might help us better understand how we should construct future tech companies, offer insights into what we should value most and whose methods we should help foster.

Pay To Play

As both Apple and Google continue to extend their reach deeper into our lives, the more obvious differences between the two begin to peel away. Once, Apple was hardware and Google was software. Now, both are mobile devices, cloud computing, entertainment, maps, apps, payments, productivity, music, messaging and — even if poorly — social media. We have to look deeper.

Start with pricing. Apple, whose products no one is required to purchase, is regularly blasted for ‘premium’ pricing. Google, whose products are mostly free, generates no such acrimony.

Is it better to demand customers pay for a product, to enter into a covenant where value is promised at a specific price, as Apple requires? Or is offering services for free the superior model? Certainly free seems better, but the price of free in today’s world is constant advertising, payment of which is continuous mining of our personal data. Does the Google way — pulling off tiny pieces of ourselves, bit by bit, moment by moment, and then selling these off to an unknowable coterie of people and businesses — better serve humanity?

I want to be in favor of free, but in its current form, the price of free seems too steep for me. For the rest of the world, I think in pricing Google trumps Apple, whether I wish it so or not.

No Product Before Its Time

Another core difference: product development and release.

Is it better to release products only when they are ready, as Apple does, or as soon as they reach sanctioned beta stage, as Google does, allowing anyone to experiment with their creation, make it better, expand its reach? Again, this seems to favor Google.

While we wait for the next insanely great product from Apple, a hyperfast-moving Google is — right now — helping us understand the pitfalls and benefits of driverless cars. Google Glass is forcing us to consider our views on personal privacy in public spaces and it must be acknowledged, pushing the technical boundaries and design limits of wearable technologies.

Google is meeting with city leaders, exploring methods to offer cheaper, radically faster broadband. They are unleashing ‘balloons‘ to bring the Internet to all points of the world. Push, push, push, now, now, now. The Google Way seems more right for our world.

Meanwhile, Apple…what, exactly? An iWatch likely few can afford once its finally released?

Tim Cook recently tweeted:

“Remembering Steve on his birthday: ‘Details matter, it’s worth waiting to get it right.'”

Is this true? Is this best for the 7+ billion of us on the planet? To wait?

Consider Android. Android is now the most widely used operating system in the world in part because Google unleashed it, for free, even while its business model remained in flux, and without waiting for agreement from potential stakeholders like Java’s Oracle. Nor was it perfect, by any stretch. Our gain.

We are rapidly connecting with one another, linking to astoundingly low-cost information resources whose total value is nearly incalculable, thanks in large part to this essentially free, freely available and extraordinarily robust mobile operating system. Humanity has been aided by Android, clearly.

Step back. Did Apple’s deliberate plodding make all this possible?

Look at an Android device pre-iPhone: it is an evolutionary dead-end. Think of all the apps, services, knowledge, entertainment and productivity we garner from all the phones that came only after Apple and the iPhone cleared the way. Consider the rather glaring limitations of Android, pre-iPhone. Had Apple launched iPhone before it was ready, before all the “details” were just right, the entire smartphone industry, now over a billion users strong, may have taken a completely different path – and died on the vine.

Might the same thing happen in wearables — likely the next iteration of the ongoing personal computing revolution? As wearable technologies abound in type and quantity, we await Apple’s entry.

Yet it may be wearables can only achieve their fullest potential for improving our health, our fitness, our connectedness to our minds and bodies only after the details are exactly right. That is, only after Apple clears a broad, lasting path just as they did with Mac (PCs), iPhone (smartphones), and iPad (tablets).

We have significant evidence Apple’s entry into a category has disproportionately, even radically re-shaped all that came before and all that follows. Perhaps we are better served in our analysis if instead of viewing Apple as sitting atop the ‘high end’ or ‘premium’ segment of a market, we acknowledge their products as a sort of official start, or a big bang of a new product category, unleashing and enabling the full potential of such technologies.

Thus, it may be that Apple better serves humanity even as their products are viewed by many as the tools of the wealthy. Apple made possible the very revolutions Google has seized upon. I think when it comes to the development, creation and release of products, Apple does humanity better.

Origin Myths

While I harbor suspicions regarding some of Google’s actions, I deeply admire their speed and scale, along with their willingness to try, to fail, to push. Google’s fast, expansive focus seems much more aligned with our nature and certainly more aligned with our times. Google’s beliefs include:

fast is better than slow
democracy on the web works, and
great just isn’t good enough

Thanks in part to such beliefs we most likely will have faster broadband, more bandwidth, radically cheaper smartphones connecting the world, tablets everywhere, a nearly infinitely scalable and mobile-optimized real-time web, all manner of affordable information and content, search, driverless cars, and whatever else Google is cooking up in its labs or scouting for acquisition.

That’s a substantial list.

It took Google for us to have YouTube, free maps, real-time-anywhere search, and the ability to live our lives within a fully digital realm. Yes, this comes at the creeping and rising cost of advertising everywhere and aggressively lobbied laws that do not necessarily favor our privacy interests. Almost seems fair.

Apple’s mission, by contrast, is shockingly prosaic:

Apple designs Macs, the best personal computers in the world, along with OS X, iLife, iWork and professional software. Apple leads the digital music revolution with its iPods and iTunes online store. Apple has reinvented the mobile phone with its revolutionary iPhone and App Store, and is defining the future of mobile media and computing devices with iPad.

That’s it? No move fast and break things? No do no evil? Not even a computer in every purse?

In vision and purpose, I say Google bests Apple.

I suspect that despite their overlapping business interests, core differences between the companies are inextricably linked back to their founding — the mad, beautiful and deceptively detailed vision of computing borne inside the mind of Steve Jobs, versus the youthful, audacious and limitless grandiosity of Page and Brin.

Apple and Google are a mere five miles from one another, yet the difference in their work and world views appears an impassable chasm. I do not know who does more for humanity. I am greatly proud, nonetheless, that these two giants of innovation are American-born, American-led, and are both, separately and together, creating a better world.