Tablets, Notebooks and Desktops Are The New “Other”

I have been following personal computing since the 1970s (yes, I am ancient). I was introduced to computing categories in the following order:

— First, there was the Desktop. The original Desktops were text input only. Then monitors were added. Then mouse input was added, which allowed Desktop computers to be user by a whole new class of users.

— Next there was the Notebook, which broke from the Desktop only in form factor. The Notebook made the Desktop transportable.

— Then there was the modern Smartphone, which broke from the Desktop and the Notebook both in form factor and in user input. While the form factor of the Notebook made it transportable, the form factor of the modern Smartphone made it mobile, pocketable and, with cellular and wifi connectivity, always connected to the internet. While input via a mouse was the preferred input metaphor for the Desktop and the Notebook, touch became the preferred input metaphor of the Smartphone.

— Then Steve Jobs introduced the modern Tablet and asked if there was room for a third category of personal computing device between the Notebook and the Phone. Note he did not identify the Desktop and the Notebook as different categories, which was probably correct. The Desktop and the Notebook are very similar to one another, while the gap then existing between the Notebook and the Smartphone was, and is, great. Steve Jobs was asking whether there was room in that gap for yet another category (the Tablet) and some are still asking that question today.

— Now, we see wearables as a potentially new computing category.


In addition to dividing personal computers by category — Desktop, Notebook, Tablet, Smartphone and Wearable — I have also always been careful to divide personal computers by user input.

While the Desktop and the Notebook use a mouse and a touchpad to manipulate a cursor, the Smartphone and the Tablet use the finger as the input device. Touch input is so different from cursor input, it required a radical re-writing of the computing operating system. Some, to this day, still do not recognize how very different — and how very incompatible — the mouse metaphor and the finger metaphor user inputs are.

Distinguishing between user inputs caused me to draw a bright line between Desktops/Notebooks that use cursor input and Tablets/Smartphone that use finger input.

Black device icons

Mea Culpa

Please pardon me for being late to the party, but I think I’ve been looking at personal computing all wrong. Because I divided personal computing by categories and because I divided personal computing by user input, I failed to see that what is really happening here is personal computing has divided into two camps: Smartphones…and everything else.

Smartphones Are The New PC

I’ve known for a while the Smartphone was a Super Computer in our Pocket and it is outselling other personal computing devices by more than 2 to 1.



However, I’ve never really given the Smartphone its due. I’ve always seen the Smartphone as being at the bottom of the personal computing pyramid, with Desktops at the top. Ben Bajarin says this is because we, who have grown up with personal computing, have a PC bias, and he is right. For most of those who did not grow up with desktops and notebooks, those devices are totally irrelevant. Old-timers like me find ourselves debating silly questions, like whether the tablet might be capable of replacing the Notebook when, in fact, the phone is more than capable of replacing the Notebook for many.

The Smartphone Is A Supercomputer In Our Pocket

For those in the West, the Smartphone combines many devices into one and for those who have never previously had access to computers, it gives them access to a plethora of devices and services they never had access to before.


The Smartphone puts previously unimaginable computing power at the service of the masses. While the richest nations benefit from the Smartphone, those who inhabit the poorest nations benefit most. Smartphones act as the great equalizer.


Some even postulate that “Mobile at work is the next Industrial Revolution“.

Running The Numbers

The are 6 billion people on Earth and it is estimated 5 billion of them will own Smartphones. Of that 5 billion, perhaps 2.5 billion will decide to own an additional Tablet, Notebook or Desktop.

You have a small screen in your pocket. You may also have a big one at home. It may be a laptop, desktop, or tablet, or some combination. ~ Benedict Evans (@BenedictEvans) 12/9/14

What this means is, in the very near future, everyone who has a computing device will have a Smartphone and only a subset of those Smartphone owners will have an additional computing device. And for many, the Smartphone will turn over every 2.5 years while the “additional” computing device may not turn over for 4 or 5 years.

Tablets, Notebooks and Desktops Competing Against One Another

While I have always thought of Tablets, Notebooks and Desktops as being separate categories, they really need to be lumped together as “Other”, i.e. other than Smartphones. Tablets, Notebooks and Desktops compete against one another for the coveted role of being our second computing device. Smartphones aren’t in competition with the “other” category. Computer owners may argue over whether to get a Tablet or Notebook or a Desktop but almost no one will think of getting a Tablet or a Notebook or a Desktop in lieu of a phone.

Tablets, Notebooks and Desktops Acting Like One Another

In addition, as different as Tablets and Notebooks and Desktops are, one from the other, they are also very alike in most of their use cases.

Looking at IBM US commerce data. Pretty clear it’s wrong to think of ‘mobile’ as smartphones + tablet. ~ Benedict Evans on Twitter


The Tablet form factor and input are completely different from the Notebook and the Desktop, but the Tablet’s use cases are far closer to the Notebook and the Desktop than they are to the phone.

The more I look at tablets the more I think of them as a continuation of the desktop to laptop transition, rather than part of ‘mobile’. Benedict Evans (@BenedictEvans) 12/9/14

Perhaps you came to a similar conclusion long ago. For me — and I suspect for many others — this is a whole new way of looking at Tablets, and at personal computers as a whole.

A New Definition Of Mobile

I think we need to redefine what we mean by “mobile”. For me at least, for a device to be categorized as “mobile”, it must be on one’s person or readily accessible at virtually all times and it must be connected to a cellular or WiFi network at virtually all times. Tablets should be removed from the mobile category and thought of, instead, as one of the three flavors of secondary computers available to those who can afford more than one computing device.


I, like many others, care about some computing categories because of what they were rather than because of what they are. Computing has re-aligned itself. It’s past time for my way of thinking about personal computing to do the same.

The Business Model of Never Growing Up

The very mortal Larry Page and the rapidly aging Ray Kurzweil, in their mad, sad dash to live forever, will fail in this utterly futile, mostly human effort at denying the inevitable, at fighting that greatest of fleshly trappings, that soul wrenching but unalterable truth which reveals the eternal equality of us all.

We are all going to die.


It is what it is.

Billions of years ago, literally, dying stars sent tiny pieces of themselves hurtling through space. A few trillion of those pieces, maybe more, reached Earth, falling unseen like manna from heaven. Fewer still, as if touched by (a) God, made it inside every one of us.

For what purpose, exactly?

google-calico-cover-0913We may never know. Till then, there’s money to be made. Lots of money. And it seems to me that by design or not, and unable to conquer death, Silicon Valley has instead embraced the business model of never growing up.

Mock if you wish but this is certainly more rational then what Larry Page and Sergey Brin are doing, spending untold amounts of Google money on “tackling aging” through a series of pricey ventures. The super-smart Calico is just one:

[Google-funded] Calico is a research and development company whose mission is to harness advanced technologies to increase our understanding of the biology that controls lifespan. 

And of course it will fail. Or worse. We could wind up with this horrid “singularity” vision as espoused by Google’s Kurzweil, where computers and AI progress to a point where humans can radically alter their minds and bodies — and anyone else’s — or ‘upload’ the equivalent of our consciousness into a thinking machine that allows each of us, you and me, to effectively live forever.

What a bleak existence.

It is what you feel, see, hear, taste, who you live with, your stumbles and successes, a good joke and a big slice of birthday cake that make you who you are and all of these, every single bit, will be irrelevant to the ‘you’ inside a computer.

Each moment you go inside a computer, you die just a little bit. Till there’s nothing left.

The futile Kurzweilian effort helps explain why, outside of Google, so much brainpower and money are flowing not in fighting mortality but instead in empowering us all with the illusion of never growing up.

What is Twitter but a mode for all of us, like some recent college graduate, to espouse to everyone, every single thing we think and feel the moment we think it or feel it? Isn’t all social media in fact optimized for talking without ever listening?

Selfies celebrate the self, obviously. Why think beyond our corporeal form, at this moment, in this place? Let us glorify the now — with the self at the center, fixed for all digital eternity.

Is Uber, with its $40 billion valuation, anything other than a way for all of us, like teenagers, to never have to own a car yet always have someone there, exactly then, to take us wherever we want to go?

Gamification is the dream of liberating ourselves from the drudgery of even a moment of the kind of work “adults” must engage in.

Wearables literally transform the profoundness of computing into me, me, me!

Augmented reality seems intent on transmuting the real world, with all its imperfections, into a multi-player amusement that keeps us entertained, as if we are forever children, forever awaiting delight.

Not ready to settle down? Just need a couch to crash on? AirBNB has you covered.

Here’s a tablet! Never be bored, never feel alone — and free yourself from the fears of change, time and mortality.

Is this why Silicon Valley seems to have become so ageist? Do tech companies fear that should they hire anyone over 40 — the horrors! — then every other staffer will be forced to acknowledge their own mortality? To see exactly what awaits them?

I do not expect Silicon Valley to embrace death. But I do hope the Valley evolves to where it’s ready to fully leverage its brains and its wealth on very adult problems, many of which may never be fun but all of which are necessary should we desire a better future for everyone, however long it may last.

Research: Who’s Buying What Tech around the Globe This Holiday Season

We have some research that gives us insight into what tech products are on the interest horizon for purchase over the next six months. While intent to purchase surveys don’t always lead to purchases, it does give us an indication of what products are top of mind and more importantly how that may differ from each region across the globe. This research comes from surveys across 32 different regions and over 30,000 people in total. With as much data as I have, I struggled with the best way to display it. Since percentages did not equal 100% and were also based on sample size from each region making the percentages vary, I decided to weight the values numerically by priority. 12 is the highest priority / interest to purchase over the next 6 months and one is the lowest.

Here is the chart from a global standpoint with all 32 regions included.

Screen Shot 2014-11-03 at 8.31.48 AM

As you can see, globally tablets, smartphones, and a PC (laptop) have the highest interest level/priority to purchase over the next six months. While mobile phone numbers shouldn’t be surprising, it is interesting that, in all regions, the tablet still remains the highest priority with the PC (laptop) third. As I look at what we see happening in the market, my gut tells me there is still a large number of global consumers struggling with whether to get a laptop or a tablet. I’ve been saying for some time that, when the consumer market moves and finally upgrades their PC, we will see how the tablet and PC conundrum plays out. Still, looking at the data, one has to believe companies like Microsoft and Intel look at this and believe the 2-1 value proposition is strong if a buyer is struggling between both products.

To look at the data more granularly, I’ve broken it out by some of the larger regions by population. The sample sizes were also quite a bit larger in these regions giving us better detail of who intends to buy what.

Screen Shot 2014-11-03 at 8.43.14 AM

As you see, most regions are prioritizing the tablet from a purchase intention standpoint. A few markets like China and the US are prioritizing mobile, thanks to these two regions being extremely seasonal with mobile purchases. When it comes to the PC, it still ranks high, but only Brazil consumers have it as their top priority over the next six months. What is interesting to me is other categories on this list which can also be served by a tablet should the consumer desire. Take the e-reader for example. While lower on the priority list, a tablet can also be an e-reader. Perhaps, as a consumer gets savvy to this, it sways their decision more toward a tablet or a 2-1 rather than a desktop or clamshell? The tablet or 2-1 could also conceivably fill the role of a game console or even a DVD player where access to digital movies exists. What this highlights is my point about the tablet as a much more diverse device due to its form factor than previous heavy computing devices like notebooks and desktops. The tablet form factor can simply “morph” into so many things thanks to the software and services. As consumers become more knowledgeable, I believe the value of the tablet increases.

One point that stands out and is worth highlighting is India’s intent to buy a mobile phone. Look at the data point and you would think buying a mobile is simply not a high priority for Indian consumers. When in reality it is the highest priority among the masses from a tech purchase standpoint. Keep in mind, to take this survey, you have to be online already in some capacity with a smartphone, PC, or tablet. The online population in India is still very small in contrast to India’s population (somewhere over 200m people are actively online). So people who are answering these questions from every region are already online in some way, shape or form. Google’s head of India estimated 5 million new Indian consumers are coming online every month. Most of those are coming from mobile devices. For the unconnected, the mobile phone is the highest purchase priority since it is most people’s first computer. Looking at the data, we are focusing a bit more on what the purchase intent of the already connected is for the next few months.

Where that reality stands out is when we look at what tech was purchased over the past six months. This is a question I like because it brings a bit more clarity to the picture since consumers are stating what they have actually purchased rather than what they intend to purchase. Similar to the above chart, I weighted the percentages numerically. The most purchased product over the past six months is a 12 while the least purchased product is a one.

Screen Shot 2014-11-03 at 8.59.54 AM

Here we see the clarity of the mobile priority. As expected the mobile phone has dominated purchases over the past six months. We also see the strength of the notebook and desktop rebound we are seeing as it shows up in this data. The desktop in particular was a frequently purchased product globally over the past six months. We had a hunch early last year the PC would do well this year and we were right. Partly based on similar intent to purchase data we got this time last year. In fact, the above chart showing who purchased what was very similar to the same intent to purchase data from a Q3 2013 survey.

We know about the centrality of mobile, but what intrigues me about this data is the continued interplay between tablets and PCs. As a part of my overall industry analysis of both categories, this remains a story line and one that does not have as crystal clear of an ending as other categories. I get this data every few quarters so we will check back early in 2015 and see how the story is playing out. My guess is that Mobile is still high, but where PCs and tablets fall is the key question.

Phone, Tablet, Desktop Usage


I’ve been staring at the above chart and I think there’s a lot we can learn from it.

1) Facts

1.1) Desktops are used most during working hours and their usage tails off at night.

1.2) Tablets are used least during working hours but their usage rises sharply at night, eclipsing even the usage of phones.

1.3) Phone usage remains almost constant both during working hours and after hours and pretty much throughout the time that we remain awake.

2) Speculation

2.1) Desktops are work machines, yes, but more and more they are becoming work only machines. As time goes on, I expect the pattern shown in the above chart to remain about the same but I expect the usage line to slowly sink lower and lower as desktops are overwhelmed by both tablets and especially by phones.

I wrote about this last week, but I don’t think many people realize how rapidly desktops are being eclipsed by tablets and and phones. This is because the raw number of desktops is remaining about the same but, as a percentage, the desktop’s share of the overall computer pie is rapidly shrinking.



Those of us who own desktops just don’t realize just how many new computer users never have — and never will – use a desktop computer in their lifetimes.

2.2) Tablet usage is lowest during working hours and highest during the evenings. I expect this pattern to remain about the same too but I expect the usage line to gradually rise as the desktop line gradually sinks. It’s not that tablet are replacing desktops. Tablets may take over the tasks of some very low-level desktop machines, but for the most part tablets are creating new computing jobs, not replacing the old computing tasks.

For example, Ben Bajarin wrote an article in which he talked about tablets taking over all the tasks that used to be done by clipboards. Think about that for a second. There are so many tasks that simply cannot be done by a desktop or notebook computer but can be easily accomplished by a tablet. Any task that should be done while standing favors the tablet over the desk bound desktop and notebook. As time goes on, we will continue to expand computing into areas where the desktop form factor previously made their use impractical.

2.3) Finally, the phone. The phone revolution began only seven years ago when the iPhone was introduced in 2007. Its a supercomputer in our pockets that we have access to all day long. And, according to the usage statistics, that’s exactly how we use it — all day long.

I expect the usage line for phones to continue to rise but only slowly. We are already using our phones in short bursts throughout the day. At some point, we’re going to max out. But that day hasn’t arrived yet.

More importantly, as Benedict Evans likes to point out, pretty soon almost every man, woman and child across the globe is going to have a supercomputer in their pocket. We need to think about this more if we want to comprehend the future of computing. What will it mean for everyone to be connected everywhere at any time? I think the ramifications are huge although my limited imagination cannot yet see what those ramifications will be.


The rules of computing are changing right before our eyes. It’s like playing chess but the pieces no longer move and act the way they did before.

The role of the desktop computer will continue to baffle many. It will remain the King of the computer chessboard but now the King is no longer the most important piece. To those who need power, the desktop will remain powerful. To those who don’t need the power of the desktop, the desktop will remain irrelevant. It’s a paradox that many can not — or will not — comprehend.

The tablet will be the Knight on the computer chessboard. Not as powerful as the desktop, but able to do things and go places that the desktop can not.

And the smartphone will be both the Pawn and the Queen of the computer chessboard. Simultaneously ubiquitous and powerful. Imagine playing chess with eight Queens. Now imagine a world where everyone has the power of computing with them at all times.

The pieces on the computing game board have changed. The way we play the game will be changing too.

The Microsoft Surface Is A Yachting Cap, Not A Yacht

Following Microsoft’s Earnings, a lot of people started talking about how “successful” the Surface 2-in-1 computer was becoming. That reminded me of the following anecdote:

    Tristan Bernard (1866–1947), was a French dramatist and novelist.

    A friend saw Tristan Bernard on the promenade at Deauville wearing a jaunty new yachting cap. When he remarked on it, Bernard replied that he had just bought it with his winnings from the previous night’s play at the casino. The friend congratulated him.

    “Ah,” said Bernard, “but what I lost would have bought me the yacht.” ((Excerpt From: Andre Bernard. “Bartlett’s Book of Anecdotes.” iBooks.

When we find ourselves tempted to congratulate Microsoft on the success of its Surface 2-in-1, let us remember that it is but a yachting cap, not a yacht.

The Consumer Tablet Growth Opportunity

A great deal of my tablet market analysis has been spent exploring opportunities for a PC in the form of a tablet. Opportunities not fulfilled by a PC in the form of a desktop or laptop. As I explained here, the enterprise or commercial tablet market’s upside is still quite large. But the question about the tablet opportunity for the consumer market looms.

Tablets grew faster and were more widely adopted than any previous electronics device in history. Continued triple digit growth was simply not sustainable. The tablet market slowdown was never a question of if but always of when. As you can see by the following chart, that time is now. ((I’m keeping iPads and the overall tablet market separate due to the extremely high sales of white box, low cost Android tablets sold that are used for nothing more than portable TVs and game players.))

Screen Shot 2014-10-23 at 8.23.07 PM

The tablet market, like all markets before it, is normalizing. Growth rates have slowed and now we can wrestle with the question of how much more growth is to be had.

Replacement Market vs. First Time Buyers

I find it helpful to focus on the question of whether the tablet market for consumers is a replacement market or if there is still a market for first time buyers. If the tablet is only a replacement, then it has peaked. However, I don’t believe that has happened. Apple keeps informing us 50% of iPad sales are to first time buyers. Which gives us an indication there are still new owners to be had. So how may that growth in first time buyers be had? I see two possibilities.

The first could be price. My friend Stephen Baker at NPD gave us some insights and holiday outlook for the tablet market. As Stephen points out for the US market, price could be a driver. I think it should be safe to assume that price war offerings for iPads and other tablets will be fierce in Western markets this holiday. Retailers use this pricing to get customers in stores where they hope they buy a plethora of other items. I’m guessing retailers will hope to leverage Apple’s new lineup with this strategy in mind. I believe Apple has a strong lineup from the original iPad mini to the newest iPad Air 2 covering many price points and giving retailers pricing flexibility with their offerings. In general, other branded tablet vendors have been seeing decreasing sales and Samsung in particular. It’s reasonable to assume Samsung tablets will see steep discounts this holiday at retail.

The second growth area is replacements and additions. It is very hard to predict when consumers will replace their tablets and more specifically their iPads. ((I point out the iPad specifically because it is the tablet brand that has the largest installed base by a healthy margin.)) As often is the case with Apple products, iPads are often handed down to other members of the family or to friends. In this scenario, the new iPad replaces the current owner’s device but another person gets their first iPad. Ultimately this is good because it builds the iPad owner base, who we would assume will be added to the future replacement opportunity. Continuing to build a large installed base will yield rewards. Whether the new lineup drives this upgrade and hand-me-down cycle we literally have no idea. But should it hit this quarter, it could be huge. While the iPad 2 is still a perfectly fine device, it has the highest installed base of all iPads. My firm’s estimates for active iPad 2s in use is over 60 million. We believe this base will upgrade at some point in time — we just don’t know when. It could be this quarter or it may not. But, given the price aggressiveness we assume we will see this holiday season, I’m guessing many iPad 2 owners may be enticed. Realistically, there is no better quarter to find deals than a holiday quarter. So this large installed base of iPad 2 owners would be smart to upgrade this quarter or risk waiting another full year. Given the channels I track, I should have a decent sense of what is happening before the quarter ends.

Stealing PC Owners: I still believe the traditional notebook and desktop form factor is overkill for most mainstream consumers. The decent sales numbers of PCs we are seeing are largely coming from enterprise and commercial markets such as education/students. The consumer market has yet to move in mass to upgrade their PCs. We believe at some point in time those consumers will make the move. And the wonderful unpredictability of many consumers leaves us guessing at what they will buy and when. Will they buy another PC? Or will they move to a tablet? This is the tension we will have to live with until we see a market indication of what is happening. The tablet will still have the price advantage this quarter and I suspect Windows 8 is still a hinderance. I do expect Macs to have a very strong holiday as well and, with the new iPhones in the mix, there is a lot competing for consumers’ wallets this holiday.

These are a few of the scenarios I think about when I look at the upside for consumer tablets. This quarter seems very hard to predict right now for nearly everything but for the  smartphone market. For the first time in a long time it’s hard to say with any accuracy how the consumer market for PCs and tablets is going to play out.

Did Apple Do Enough?

At Today’s Apple’s Event, I got a question over and over again. I thought I would share my thoughts on it. First off, the question, “Did Apple do enough?” is the wrong question. The correct question is, “Did Apple release a better product than they did last year?” Of course the answer is yes. A smart fellow once told me, “If it is worth doing, it is worth improving.”

We can view product enhancements and demand the revolutionary without realizing that revolutionary requires evolutionary improvements. Leaps in innovation don’t happen without the evolutionary cycles that come before them. But what matters is that each year’s product is better, in a fundamental way, to meet the needs of current and new customers.

I have a core thesis that Apple does not really have any competitors. I know many disagree and we can debate this from a business, strategy, and market standpoint, but from a product standpoint I believe this is true. In fact, I believe Apple’s primary competitive product benchmark is last year’s model. This is why the correct question is whether or not Apple released a better product compared to last year’s version.

Is the new iPad Air better? Yes. Is the new iMac better? Yes.

Getting that out of the way, let’s look at why it matters to today’s announcements.

Today’s Announcements

iPad. In my mind Apple did several important things for the iPad product family. The first is Touch ID. While it may seem like an obvious upgrade, it is also significant for two reasons. In enterprise accounts, where the iPad is nearly universally deployed in some way at Fortune 500 companies, Touch ID is an extremely important improvement. We can debate whether the iPad has peaked in consumer markets but one area I am absolutely certain it has not is in enterprise. What is key to understand about the iPad in enterprise accounts is it is not being deployed to replace notebooks or desktops in most cases. Rather, what it is doing is bringing a computer to a field worker who used a simple handheld device or no computer at all.

The iPad is being deployed to many mobile field workers who are generally on their feet all day. Public safety, construction, employees doing truck rolls or installs, compliance officers running routine safety checks on oil rigs, power plants, etc. These mobile field workers usually use a clipboard and have may never have used a computer regularly in their day job. Desktops and notebooks are designed to be used while sitting down, not walking around in the field. This is the enterprise use case for which the tablet form factor is best designed. But because these workers are mobile, they are also the more likely to lose or have their work tool stolen. This is where Touch ID is critical. Enterprise has been clamoring for Touch ID on iPads for the security elements they enable. The upside for the iPad in enterprise is still large and Apple’s partnership with IBM will greatly enhance this.

Enterprise sales alone won’t continue to drive annual iPad growth. So what is the current story for consumers?

Apple has shared a statistic over the past few quarters. 50% of iPad buyers are new to the iPad. This is a key metric. Rather than look at Apple’s lineup and wonder if it will drive upgrades, look at it and wonder if the current lineup is inviting to first time iPad buyers. Here is the full lineup.


From beginning to end, Apple has an iPad for nearly every price point. By keeping the original iPad mini in the mix at $249, Apple has an attractive price across the board. This is a key story when we think about first time buyers. Not everyone needs the current generation iPads. Last year’s models serve a purpose in helping fill price gaps and giving consumers more options.

The challenge of thinking about upgrades is we still have literally no idea what the consumer upgrade cycle is. We have estimates about how many Gen 1 and iPad 2s are still in use and it is a significant number. But we have no read on if those consumers will upgrade at this point. Because of that, predicting the consumer upgrade cycle is near impossible. It could happen one random quarter and catch everyone off guard or we may get early signs. But right now, we don’t know. So in my analysis, I’m focusing on the story for first time buyers. And that story is strong with the full iPad lineup.

Retina iMac. Lots of interesting things about this computer. The first is I joked Apple made a 27″ 5K TV for $2499 (less than a 4K HDTC) that just happens to include a computer. The display is something to behold when you see it. With this product, Apple continues to cater to their bread and butter customers – the creative professionals. This is a product a creative professional will see and say it is NEEDED not it is just wanted.

Whether you make movies, TV shows, create graphic arts, edit photos, etc., there is literally no better option than this 5K Retina iMac. I expect significant demand for this iMac and let’s hope Apple can keep up with it.

Tying it All Together

Again Apple has emphasized the story of their ecosystem. During the event I tweeted:

The hardware story, iOS 8 and OS X Yosemite with features like Handoff and Continuity strengthen the ecosystem. No other company is addressing the full lineup from desktop, notebook, tablet, smartphone, and soon a smartwatch, to work together this harmoniously from a user experience standpoint. If you are going to own any combination of computers from PCs, tablets, smartphones, and eventually a smartwatch, Apple’s seamless ecosystem is presenting itself with the strongest offering across categories. This is the heart of the “only Apple” narrative.

First Half 2014 Tablet Report

The tablet market is easily the most fascinatingly diverse consumer electronics category I have ever studied. If you have read my commentary on tablets, it is the unique form and function of the product that allows it to be so nuanced. Both the smartphone and the tablet are relatively small pieces of glass. Both are brought to life by their software. However ,with smartphones, we see more clear consistency in application. We don’t see the rich segmentation in smartphones we are seeing in tablets. The tablet is a blank piece of glass that can take on many general computing use cases and unlike the smartphone which has a focus, the tablet can be many things to many people. This, at a root level, is why I believe so many people misunderstand the tablet category.

Without question, the tablet saw explosive initial growth. This was driven primarily by Apple and benefited from a latent PC refresh cycle. Looking back, there are certain market dynamics which contributed to the tablet category allowing it to be rapidly adopted. I would argue those dynamics have changed and, if the tablet was released for the first time in 2014, the product would not have the same initial ramp up. That in no way means the tablet category is dead or, more importantly, not a viable category. It simply highlights the tablet market is still not fully mature.

Coming Back Down to Earth

Many of the charts I’ll be showing are a part of a much larger and in depth PC/Tablet Report I’m publishing through my industry analyst firm Creative Strategies. I’ve broken a few of these charts out to give a high level view of the tablet market.

As you can see, YoY growth of tablets has come back down to earth. For nearly a year, the tablet was experiencing anywhere from 120%-220% growth YoY in certain markets. YoY growth prior to Q1 2013 remained high — 70% up to 135% depending on the quarter. But after Q1 2013, the growth normalized and as you can see, the tablet category is now performing similar to desktops and notebooks.

Screen Shot 2014-10-06 at 10.14.47 AM

I’ve included in this chart my estimates for the next few quarters and into 2015. These of course are still subject to revision should we see any major trends which cause us to revise. But as of now, we believe the tablet will still remain in slightly positive, but low, growth territory, where notebooks and desktops remain slightly off going forward. The one caveat to the tablet line could be the effect of large phones on tablet growth. This is the one factor that could cause the tablet line to move closer to the notebook and desktop line.

Another interesting way to slice the same chart is to add Apple’s YoY growth of iPads. I’ve done that in this chart and you can see the impact iPad sales have on the tablet market as a whole.

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Tablets vs. Notebooks

A key discussion point for those of us who analyze both the tablet and PC market is what impact tablets are having on PCs? There is little evidence to suggest tablets are replacing PCs but that they are more of an extension to them. Perhaps a good way to understand the tablet vs. the notebook is to think in terms of computer literacy. To use a notebook one has to be PC literate. Users need to know their way around a desktop OS, mouse, and keyboard. Not every person on the planet is computer literate. However, thanks to smartphones, many are touch computing and touch OS literate. This is why the tablet running a mobile OS provides greater upside in our view.

The notebook form factor has taken the mobile PC as far as it can go. At this point, if you need a notebook for your day job, student life, or any other use case, you know it. Therefore, we believe the notebook addressable market is tapped out. However, the tablet represents a form and function of a device that can bring a “computer” to those who did not use one before either in their life or work place. For example, corporate field workers are being given tablets to replace walking around with clip boards on the job site. Tablets, as a work opportunity, bring computing to field workers who did not use a computer in their day job. For these workers, the notebook was simply not mobile enough. Tablets are filling those holes.

We also believe the tablet represents an opportunity for first time PC owners. Those who are not computer literate but looking for more capabilities than their smartphone offers. It is within this view we continue to watch tablets as a category.

The last point to make on this topic is not all tablets are created equal. If we count tablets that are not branded and being sold sub-$80 in many emerging markets, we can probably argue the tablet market may be larger than the PC market. But when we only look at branded tablets from PC or mobile companies, we see the tablet market may be shaped more like the notebook market than the entire PC category.

Here I charted only branded tablets from companies like Apple, Samsung, Lenovo, Asus, etc. You can see the tablet category is comparable to the notebook category when we attempt, as best we can, to compare apples to apples.

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While I try to point out there is some comparison to be made to the notebook and branded tablet market, there is one area the tablet category is quite different than the PC market. Tablets, including branded tablets by the vendors I mentioned above, are more seasonal purchases. Part of this has to do with the more consumer focused play of tablets for now, but also their pricing. PCs maintained a fairly high ASP for most of their life. Even now the ASP of PCs is still over $600 while the ASP of the tablet category is just over $300.

As you can see from this chart, the seasonality of tablets is more dramatic than any other class of PC.

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Note, the chart looking forward includes my estimates subject to revision depending on the trends we see.

Tablets, in essence, operate similarly to both the notebook and the smartphone. The smartphone category also experiences dramatic seasonality purchases in the calendar Q4, although we are seeing smartphone seasonality slow down as the global audience comes online.

The seasonality of tablets is also visualized when we look at QoQ growth since Q1 2013. While YoY growth, charted earlier, smoothes the tablet line, QoQ growth highlights the seasonality of that growth.

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From a marketing standpoint, this chart tells us tablet marketing is best spent in calendar Q4. Bottom line, I don’t see the seasonality of the tablet category going away any time soon.


I talk a lot about the the white box tablet market. These are non-branded tablets coming from the China tech manufacturing ecosystem and selling for less than $80 on average. Knowing that, when we plot the ASP YoY growth of tablets, it shows how dramatic both the low cost Android push and the white box tablet market have had on tablet ASPs.

Screen Shot 2014-10-06 at 1.15.45 PM

As you can see, the tablet market as a whole has been a troublesome one to really make money at for nearly all but Apple. Vendors like Samsung would move many as a promotion through the carrier channel with the purchase of another Samsung smartphone. Other than those two, no one really sells tablets in any meaningful volume.

As we look at ASPs going forward, the line is still trending down. One caveat on tablets would be if we see fewer branded tablets on the market as certain companies get out of the market due to lack of volume or monetization. In which case, the tablet market would be driven by Apple and white-box as far as volume goes.


As many of my charts highlight, much of the key growth in tablets appears to have slowed and, in some cases, disappeared entirely. Revisiting the question of whether or not the tablet category is as large as the PC category seems like a re-kindled debate. From what I see right now the answer is both yes and no. If we combine all tablet sales, including those low cost white box tablets from the China tech manufacturers, then I can see how we sell more tablets than PCs worldwide annually (not necessarily quarterly). However, since not all tablets are created equal, this may not be a metric worth spending more time on.

Comparing branded tablets like the iPad for example, and tracking them against notebook sales does seem like a valid metric worth tracking. But, as a few of my charts point out, it is questionable whether the branded tablet category is bigger than that of PCs. Rather, it seems it is more similar in terms of volume to notebooks than the entire PC category. Given its form factor and use case, this makes sense.

As we track tablet sales and try to articulate the bigger picture of how they fit into computing as well as the broader consumer electronics picture, we strive to look at ways the tablet is extending computing in meaningful ways to those who were not true “computer users” before. We know nearly everyone on the planet will have a smartphone. We have reasonable assumptions the smartphone is not the only computing product they will own. We have strong doubts, based on the point of computer literacy, that the notebook or desktop will be the first computer of choice for current smartphone-only customer. We believe, for this market, the tablet represents the most interesting opportunity as the first large screen computer of choice.

What cannot be overstated in this discussion is the meaningful impact of bringing computers to the masses. It should not matter the shape or manner, only that we deliver on that promise. Each form factor — the desktop, notebook, tablet, and smartphone — will play a role in bringing computing and the internet to the masses. Some form factors will be more affordable than others. Some more capable. Some more portable. No matter their size, shape, or capabilities, we are seeing computing advance in ways we never could have before thanks to the many shapes a personal computer can take in the 21st century.

In New Job Steve Ballmer Forces Windows on the L.A. Clippers

I was fascinated to read a recent article about Steve Ballmer and how, in his role as owner of the L.A. Clippers, he has told his entire staff to get rid of their iPads. From now on they will be a Microsoft only facility. I was especially interested in this part of the article:

 “Most of the Clippers on are Windows, some of the players and coaches are not,” Ballmer said.”And Doc (Clippers coach)  kind of knows that’s a project. It’s one of the first things he said to me: ‘We are probably going to get rid of these iPads, aren’t we?’ And I said, ‘Yeah, we probably are.’ But I promised we would do it during the off season.”

To his credit, he is trying to make the online experience at their arena work via Wifi and Bluetooth with any device. But for his staff, it is all Microsoft, all the time. Of course as owner of the Clippers he has the right to do this. But it is his total lack of understanding that we are no longer in a homogenous device world and are now in a heterogeneous world where people or users make the choice of the product they want to use and actually hire them based on personal needs and preferences that surprises me. IT has had to embrace this BYOD approach for some time and have made it work in most cases.

It was his blind loyalty to Microsoft and Windows that kept Microsoft from being a leader in smartphones and tablets. Everything had to be Windows based even though Windows was not an optimal OS for a smartphone. Instead, they spent years trying to push the round peg of a desktop OS into the square hole of a smartphone device while Apple and Samsung created mobile operating systems from scratch and left Microsoft in the dust.

This blind loyalty also caused him to miss an opportunity to make MS Office the de facto standard productivity tool outside of the Windows world and forced Microsoft to create subpar versions of Microsoft apps that worked poorly on other operating systems. This crippled any real chance for the applications group to win big in a heterogenous computing world where Microsoft no longer sits at the center and the biggest growth in personal computing has shifted to pocket computing dominated by Apple and Google.

This push to force Windows on his new company just says to me Ballmer still does not get it. I am also certain his coaches and players are not about to give up their iPads and will use them behind his back while being forced to use Windows-based products during business hours whether they like it or not. Yes, I know he is the boss and he can do anything he wants but to force them to use Windows only, I believe, will frustrate his staff.

The good news is there is a new sheriff running Microsoft and from what I have read and heard from folks inside, their new CEO Satya Nadella is not as narrow-minded as Ballmer and in fact has become more focused on creating great products around their own brand as well as make all of their apps world class on other operating systems, too. This says to me Nadella actually understands we live in a heterogenous world and will embrace it as part of his goal to make Microsoft relevant again.

To me this is a big deal. When I first went to visit Microsoft in the early 1980’s, the company had less than 100 employees. In fact, I was one of the first actual analysts invited to meet with them in their early days and was one of the first they reached out to when they formally created an analyst relations group in the early 1980’s. This means I got a ring side seat to watch Microsoft develop and grow. In fact, many times in the 1980’s, Ballmer would call me up and ask me to lunch when he was in town to run by some new project or effort they were doing in order to get my feedback and ultimately to try and get me to support it.

During those days, Microsoft was the only game in town. That is how they grew. The good news is because they were so focused on Windows and Windows apps they grew the company exponentially. The bad news is they were so focused on Windows they missed the major rise of operating systems beyond the desktop and laptops. This has left the company scrambling to even be competitive in the world of mobile where all the real growth has shifted to in the last 7 years.

Satya Nedella’s approach to the market embraces heterogeneous computing and is important but he also walks a fine line when it comes to Windows. Windows 10 hopefully buys him some much needed grace in the eyes of the consumers and IT and by making all of their apps “world class” on multiple operating systems keeps them in the game. However, with the PC market shrinking and mobile rising, Nadella really has hard task ahead thanks to Ballmer’s narrow minded strategies.

Windows will probably work well for the Clippers management and team. Although, I have a sneaky suspicion from the comment of Clippers coach Doc Rivers they would have preferred to use their iPads. As boss, Balmer has the right to push the tools he wants the team to use. But it would have been interesting if he had to deal with his IT the way most of the IT world has to today by supporting BYOD and innovating around that reality. Instead, the Clippers are a recipient of the old school thinking of Ballmer and will just have to work with what he has given them.

How Microsoft and Apple’s Ads Define Their Strategy

Recently, after spending a lot of time with many of Microsoft’s OEM partners and looking at their overall strategic view of the PC and tablet markets of the future, it has become clear to me there really is a huge difference between how Microsoft and their partners view the computing market compared to the way Apple designs and markets their Macs and tablets to these same users. This divide in strategy is very pronounced.

In a sense Microsoft approaches the market from the top down, while Apple goes after the market from the bottom up.

Microsoft centralizes their strategy around their belief that everyone needs tools for a wide range of productivity tasks, regardless of who they are. Microsoft and their partners, including Intel, are designing all of their products around this focus. Of course, productivity is Microsoft’s sweet spot and a strong push to create products with an eye on productivity first makes sense. This is why they keep pushing the 2 in 1 concept. Is it a tablet or is it a laptop? As far as they are concerned, it doesn’t matter to the customer. The tagline for 2 in 1’s is “It is a PC when you need it and a tablet when you want one”. They believe that, in this product, they can push the customer to cover all of their bases and hope in the process these 2 in 1’s revive the lagging PC market and get it back on track. The problem is, since the focus of these designs really emphasize the productivity aspect of the experience, 2 in 1’s turn out to be OK laptops and, in many cases, mediocre tablets.

On the other hand, Apple approaches the market from the bottom up. When Steve Jobs introduced the iPad in 2010, he put a huge emphasis on the fact it was a “consumption” device first. In fact, he downplayed any possible productivity features although he did hedge his bet by creating a version of Pages, Numbers and Keynote apps for those who “might” want them. But when Apple created ads for the iPad they were all focused on consumption. Only in the last 18 months have they even added the focus on the iPad as a serious “creation” tool. Notice the distinct difference even in terminology. For Microsoft, the term “productivity” is key to their marketing while Apple uses “creativity” instead. Microsoft shows ads of people mostly working while Apple shows ads of people doing cool things with their iPhones and iPads. Microsoft’s ads invoke work while Apple’s ads show you how to use their products to create and play.

In a good article on TUAW written by Yoni Heisler entitled “Microsoft still doesn’t get why the iPhone succeeded,” Heisler says:

As Microsoft continues its push to remain relevant in the mobile space, it still doesn’t appreciate the factors that allowed Apple to enter a market it had no previous experience in, and turn that market on its head with the iPhone. Arguably blinded by the profits brought in by its Windows monopoly and its suite of productivity software, Microsoft still doesn’t seem to fully comprehend how the iPhone was able to push established players like RIM to the brink of irrelevancy in just a few years.

As an illustration, here is Nadella’s response to a question from Joshua Topolsky regarding Microsoft’s strategy to sell more devices to consumers.

You’re defining the market as “It’s already done, Apple and Google have won, because they won the consumer side.” And I’m going to question that. I’m going to say “No, any thinking consumer should consider Microsoft because guess what, you’re not just a consumer. You’re also going to go to work, you’re also going to be productive and we can do a better job for you in there.” And that’s what I want to appeal to.

And therein lies the problem. Consumers primarily buy mobile devices that make their lives easier and more fun, work be damned. Microsoft Office wasn’t available on the iPhone until June of 2013. An iPad version wasn’t released until four months ago! And guess what, hundreds of millions of consumers bought iPhones and iPads anyhow.

Heisler captures the essence of the difference between Microsoft and Apple well. Microsoft is all about productivity while Apple wants to give people a break from work and let technology do cool things for their customers. While this may seem like semantics, it actually drives a very different mental picture to consumers about how they view their devices. As Apple has proven, this approach is highly successful and brings into real question whether Microsoft’s productivity push will help them get customers outside of the enterprise to buy their products in the future.

In fact, Apple drives a solid line between productivity and content creation vs creativity and content consumption. Tim Cook and team are adamant that, when it comes to productivity, they believe that Macs are at the center of this activity. They have created innovative laptops, especially the MacBook Air and these products continue to defy the downward market trend in PCs and every quarter Apple sells at least 4 million Macs worldwide. They then focus iPads and iPhones on the more fun activities one can use technology for and again, have sold massive amounts of these products to very satisfied customers.

Of course, there is an actual dichotomy in the ultimate use of iPads in many people’s lives. Although Apple designs their iPads as pure tablets, people and companies have found their own ways to use them for actual work and productivity. But ironically, it was never at the center of Steve Jobs’ design and its role as a productivity tool has come mostly from third party products like external keyboards and companies and individuals creating apps and tools that allow them to adapt iPads and even iPhones for work when needed.

Satya Natella’s heavy focus on productivity is an interesting one and using 2 in 1’s to bridge the gap between a laptop and tablet will be driving their strategy forward. With the goal of creating a single OS that runs on laptops, tablets and smartphones, Microsoft is at least creating an OS environment less confusing than in the past. However, Apple has shown there is success in making great laptops, tablets and smartphones each with different goals in mind. However, if Microsoft continues down this heavy productivity road I suspect they will be challenged in their quest to gain any serious ground against Apple and even Google, who at the moment have the lion’s share of the mobile market. Apple with the Mac and Google with the Chromebooks are seriously eating into the Windows market share and have changed the dynamics of the personal computing marketplace forever.

Counterpoint: Tablets Were Never Supposed To Be The Next Smartphone

I’m (supposed to be) on vacation this week, but I saw an article by Peter Bright of Ars Tecnica, that got my dander up: “Op-Ed: Tablets really are the new PCs; nobody needs to buy them any more.”

Peter Bright’s article looks for trouble, finds it where it doesn’t exist, diagnoses it incorrectly, and applies the wrong remedy. So here’s my (not-so-very) quick ((Apparently, even my “quick” responses are over 1,000 words.)) response.

I need a six month vacation…twice a year.

Some Joly Analysis

    “The tablet market is tapped out. We saw signs of this when Apple reported that its iPad sales were down year-on-year and we’re seeing a similar message from retailers. Re/code’s Walt Mossberg recently talked to Best Buy CEO Hubert Joly, who said that tablet sales had “crashed.””

With all due respect, Hubert Joly doesn’t appear to know the difference between “flattening” and “crashed.” It is fortunate for us all he is not an air traffic controller.


    “Global tablet sales are still rising—though less quickly than they once were…”

Again, “rising” is very different from “crashing”

    “…but in developed markets the tablet boom may be over.

That’s a mighty big “may”.

    “…Joly reported that PC sales—which the tablet was supposed to kill—have picked up. He attributed that resurgence partially to the end of support of Windows XP.”

One of these arguments is not like the other, one of these arguments doesn’t belong…. ~ Sesame Street

Tablets Aren’t The Next Smartphone

    “The computer industry has to face an uncomfortable truth. Tablets aren’t the next smartphone. They’re the next PC.”

Agree and disagree. Tablets were never the next smartphone. Phones are smaller, fit in our pockets and are expected to be with us at all times. Plus — “duh” — they’re telephones. This means they will be ubiquitous.

Smartphones are the first stage of computing where the addressable market isn’t a segment, group, industry or demo, but everyone on earth. ~ Benedict Evans (@BenedictEvans) 7/13/14

If anyone ever contended that tablets were the new smartphone, the blame falls squarely upon the faulty analysis, not upon the tablet.

Tablets Aren’t The Next PC

As for tablets being the next PC? Well, that isn’t really true either.

Apple sells more iPads each quarter than PCs were being sold when Windows 95 was launched. ~ Benedict Evans (@BenedictEvans)

There are at least twice as many iPads as Macs in use today. ~ Benedict Evans (@BenedictEvans) 7/24/14

But let’s set aside the fact the four year old tablet market is already about to eclipse the sales of the 40 year old PC market and continue with Peter’s analysis:

    “The low-hanging fruit of easy incremental improvements [for tablets] seems to be tapped out. Short of an unpredictable revolutionary new feature, our staff felt that they’d stick with their tablets until they broke, their batteries became useless, or they ceased to receive software updates.”

Gee, Peter. It’s August and that prediction could be proven wrong by as early next month when the Fall tablets arrive.

Tablets Aren’t The Next Netbooks

    “Unable to win sales by making PCs substantially better, the OEMs slashed prices. Netbooks epitomized this; they cut dozens of corners in screen quality, keyboard size and quality, thickness, and even performance. But they sure were cheap.”

Yeah, about that. iPads are not netbooks. Netbooks were HATED. Tablets are not only respected, they are, by many, adored.

(W)hat’s most important to us is that customers are enjoying their iPads and using them heavily. In a survey conducted in May by ChangeWave, iPad Air registered a 98% customer satisfaction rate, while iPad Mini with retina display received an astonishing 100% customer satisfaction rate. ~ Tim Cook


Tablets Are Not Big iPod Touches

    “A large screen smartphone can do all the things a smartphone does (including important things like fit in your pocket and make phone calls) and it can do all the things a tablet can do… just with a slightly smaller screen. And among large screen devices, the laptop always has the edge as the richer, more capable device.”

    “Who needs tablets?”

Wow. I’ve stepped into a time warp and it’s 2010 all over again.

“There is no surprise with this device; it is just a huge iPod touch. ~ John C. Dvorak, MarketWatch, 26 March 2010

Adoption Cycles

(H)ere’s what that S-curve of adoption looks like. It puts saturation of the market for iPads sometime around 2018, not 2014. … Something like half the people who will someday own iPads haven’t even purchased them yet. ~ Horace Dediu


Tablets Are A Separate Category

Is there room for a third category of device in the middle? Something that’s between a laptop and a smartphone? ~ Steve Jobs

In order to really create a new category of device those devices are going to have to be far better at doing key tasks. Better than the smartphone, better than the laptop. ~ Steve Jobs

Let’s keep this analysis simple. For many tasks, a larger screen is better than a smaller screen. The end.

Not believing a bigger screen is important is the same as not believing in gravity and I’m not going to waste my time arguing with you about either.

It’s so much more intimate than a laptop, and it’s so much more capable than a smartphone. ~ Steve Jobs

When the iPad appeared in 2010, it had its doubters. For a humorous look back, check out The iPad Death Watch. Apparently four years of experience has taught us nothing. The doomsayers have retaken the forum.

The only thing experience teaches us is that experience teaches us nothing. ~ Andre Maurois

Human beings, who are almost unique in having the ability to learn from the experience of others, are also remarkable for their apparent disinclination to do so. ~ Douglas Adams


Here’s the thing. Despite its recent lull in sales, the tablet is BELOVED by many. You can’t pry it out of the hands of most owners (and especially seniors).

I think I have become addicted to my iPad. — my mom ~ Rene Ritchie (@reneritchie)

Sometimes tech people outsmart themselves. You’ve got two pieces of evidence before you. Customers love their tablets. Tablet rates flattened for two quarters. For one to assume that tablet growth is over, one has to ignore the former and put all of their analytical weight on the latter.

There are some ideas so wrong that only a very intelligent person could believe in them. ~ George Orwell

Post Script

For an excellent analysis of what’s really happening in tablets, check out “Why Ipad Shipments Aren’t Growing, But Might Start Again Soon” by Jan Dawson.

iPads At The Border

I believe (nearly) every child that comes to America seeking refuge should be welcome. I fully understand if you disagree. It is a complex issue after all. 

We are told tens of thousands of children are showing up at America’s southern border hoping to be allowed permanent entry. The President has requested many billions of dollars to help address this pressing entanglement. The opposition party has similarly offered up many billions, albeit far fewer than the President says are necessary.

What then?

Assuming some, most, or all of these children are allowed permanent entry into the United States, what then?

I have no answer for this. I do have a suggestion, however: I think we should give every single one of these children – every child in America, in fact – a tablet, preferably an iPad.


What would my proposal cost?

Estimates, which vary wildly, suggest 100,000 children will seek refuge in America this year, and another 100,000 next year. An iPad mini with Retina display retails for $400. Sold in bulk, and for goodwill, Apple may be ready to part with these for $200. Certainly, other tablet vendors would be so willing.

$200 x 200,000 children = $40 million

But let’s not give tablets only to new entrants, but to all children in America, at least those of school age. There are approximately 45 million children, ages 6-17, in the United States. Thus:

45,000,000 x $200 = $9 billion

Yes, that’s a staggering sum. Except, Americans already spend over $650 billion every single year on public K-12 education and another $350 billion every year on  higher education, at minimum. An iPad mini is reasonably future-proof, and likely to last at least three years, for example. Even if we factor my potential tablet spend against only one year of K-12 expenditures, that’s:

$9,000,000,000 / $650,000,000,000 = 0.014

That’s less than 1.5% of one year’s K-12 spend. With this, 45 million children have a tablet — a tablet that can come preloaded with literally thousands of free books; books which reveal America’s history, greatness and failures. Books that teach, warn, inspire.

That’s just the start. There are thousands of free apps that promote creativity and collaboration. We can preload twenty or so on every device. Already, Apple includes iMovie, GarageBand, Pages and Numbers, among others, with every iPad.


Should the child be fortunate enough to have access to WiFi, YouTube offers amazing resources for self-directed learning. All free. iTunes U similarly offers a wealth of free courses for those with access.

Perhaps Fox will donate the entire Cosmos series toward this effort, helping us to inspire a generation to embrace science, discovery and their innate smartness.

A front facing camera will enable every child to take a picture of themselves and their surroundings, offering a document of their life and their world unmatched in scale.

The Diamond Age

Why do this?

Two reasons:

This is very likely the first and only time in human history where a nation can afford to provide every single child with a fully accessible, easily manipulated tool that contains or can retrieve nearly the entirety of that nation’s history, culture, great works of fiction, film, television, lectures, puzzles and knowledge.

Let’s seize this amazing opportunity!

In his Hugo-winning work, The Diamond Age, author Neal Stephenson posited a future where a young girl, poor, living on the margins, came into possession of a interactive book — what we now call a tablet — that educates and empowers her, leading her to achieve what was once assumed unattainable.

There are only two such ‘books’ in Stephenson’s future world. What a much better world we have now. In fact, in our present day reality, there are already hundreds of millions of such tablets. Even better: almost every one of them can be used, misused, manipulated and managed by nearly any child of any background without any prompting or guidance.

This is profoundly revolutionary.

The System Of The World

The second reason is self-directed learning has many lasting benefits.

Google founders Sergey Brin and Larry Page have famously credited Montessori schooling for spurring their entrepreneurial success. Montessori adheres to a self-directed learning model. Children follow their interests and avail themselves to information and knowledge in their own way and on their own time. Per Larry Page:

“I think (founding Google) was part of that training of not following rules and orders, and being self motivated, questioning what’s going on in the world and doing things a little bit differently.”

 Will Wright, video game pioneer and creator of The Sims, stated this of his self-directed Montessori education:

“Montessori taught me the joy of discovery. It showed you can become interested in pretty complex theories, like Pythagorean theory, say, by playing with blocks. SimCity comes right out of Montessori.”

Amazon CEO Jeff Bezos also attended Montessori school as a child.

Correlation is not causation. What leads a child toward success is no doubt a multi-variant process. But tablets can expose children to untold learning resources, creative opportunities, collaborative play and work. This seems like an opportunity the country should not pass up.

Recently, two villages in Ethiopia were provided with (Motorola Xoom) tablets preloaded with various apps, ebooks, movies, drawing programs and alphabet games. The First Grade children who received the tablets were illiterate, had never used paper and pencil, yet within a few months had taught themselves to read.

“Within five days, they were using 47 apps per child, per day. Within two weeks, they were singing ABC songs in the village, and within five months, they had hacked Android.”

It almost seems unjust to not provide every child with a tablet.

I know there are questions. Who will pay for this? What about theft? What about illicit online activities? Who decides which books to embed? Will the children spend too much time with their tablet

These are all answerable. Yes, really.

The larger question: Will it work? Haven’t laptops, PCs and other technologies in the schools failed to incite a learning revolution?

Perhaps. But at no point before now has there existed reasonably affordable, highly interactive tools that are personal, mobile, configurable, pose almost no barriers to operation, and which can store truly stunning amounts of knowledge and learning resources — all of it accessible with the swipe of a finger.

The children are here. The opportunity exists. Let’s be willing to fail with this.

Apple Earnings: iPad Struggles and iTunes Revenue Importance

There were several interesting narratives out of Apple’s earnings report yesterday. The most glaring, and most confusing to many, was the struggles of the iPad. I’ll return to that in a moment. The Mac surprised many, but should not have surprised our readers. I wrote this in December of last year, and I explained the PCs upside in 2014. The PC will remain steady but we are still nowhere near the eventual bottom of annual cycles. We are seeing a refresh, mostly by corporations and education, and Apple, like many vendors, is positioned to capitalize on the upside. In an upcoming Insider post, I’ll layout why I think the Mac is actually a strong growth story for Apple.

But the iPad remains an important narrative. The tablet market is functioning exactly like the typical PC market. Therefore, our deep knowledge of PC cycles helps us understand the tablet market. There is one difference though and it is a significant one which has led to many to misunderstand the tablet market.

The tablet is still the fastest adopted technology in our industry history. Take a look at my install base estimates broken down by device.

Screen Shot 2014-07-23 at 8.52.00 AM

Despite what you conclude about tablets, for a category which began in 2010, garnering 22% of the estimated current installed base is impressive. What gets lost is the speed in which this category grew.

Screen Shot 2014-07-23 at 8.56.59 AM

It could be argued the iPad hit the perfect storm of lagging PC cycles, the mainstream’s desire for simplified computing paradigms vs complicated ones (the PC), and the Windows 8 debacle, all of which accelerated the adoption of the category. This burst led many to conclude the size of the tablet market was much larger than it actually is — potentially billions in annual unit shipments. Our forecasts were never that aggressive. While we believe the tablet market will remain a healthy segment, it will also be segmented. Segmentation will be what influences the total size of the tablet market.

With regard to iPad sales slowing, several things need to be mentioned. The first is the iPad had been experiencing solid growth in education and, to a degree, still is. However, new competition in the Chromebook has arisen for Apple in the education market. Every Chromebook manufacturer we speak with highlights to us they can not make enough to meet demand. Google announced they had sold one million Chromebooks to education in the second quarter, and the Chromebook segment is on pace to sell more than 5m units in 2014. While the iPad does more than double that number per quarter, the rising challenge of the Chromebook could be a factor in Apple’s education sector for iPads.

The enterprise is the other significant opportunity for iPad growth. I’ve spoken with a number of job market analysts and have heard numbers in the 300m-500m range for workers who don’t use a PC in their day job today but could benefit from a tablet computer. Things like construction, health, oil/gas/electic, factory workers, etc. Apple’s deal with IBM could help this, if for no other reason than it makes Apple in the enterprise more credible. Being viewed as credible to IT departments means they have more confidence to fully commit to iOS. This lack of credibility regarding Apple in the enterprise has been one of the things we hear from IT on why they hesitate to commit fully to iOS in their enterprise.

Lastly, replacement cycles are central to understand the tablet market. Fellow analyst colleague and Tech.pinions columnist Jan Dawson created a tremendous chart which we must dig into.

Jan has created a chart very similar in philosophy to ones used by all the PC vendors. It estimates the age of devices as a part of the active installed base. When I wrote earlier in the year about why I felt the PC would have a good 2014, it was based on a similar philosophy of estimates that there were around 300m PCs in active use five years or older. Knowing the replacement cycle for PCs to be in the 5-6 yr range, it was easy to conclude a large number would be upgraded soon. Using that same philosophy Jan has created this chart.


What we don’t know is the refresh cycles of tablets and, specifically, the iPad. Apple is somewhat cursed by the fact their products last so long without breaking. Consumers, on the other hand, are blessed by that reality. But if we simply look at the number of iPad’s still in use that are in the three yearr old range we can estimate the number to be around 50m units that should be eligible for upgrade in the near future.

Another key point to iPads we realized is the device is often handed down as new ones are purchased. Again, the value of the long life of the product allows this to happen. The impact of this will add to the overall installed base, but also could lead to a larger and difficult to predict refresh cycle at some point in time.

Adding new customers is the key metric to watch in this analysis. Apple reports frequently that 50% of iPad’s quarterly sales are to people who are first time iPad owners. Maintaining that statistic in our model is key as we track the installed base, growth cycle, and attempt to understand refresh patterns.

All of this brings us back to an important point about Apple’s business model. As I pointed out in my article on why Apple is immune to disruption, I specifically mention Apple has not and does not need to change their business model. What they do have to do, however, is capture more value per user. This is why watching iTunes services and revenue grow is a key statistic in the overall Apple narrative.

More Than One Jony Ive At Apple Now

Does Jonathan Ive really want an iPhone “phablet”? I have doubts. Ive resisted increasing the size of the original iPhone, yet today’s larger iPhones (5/c/s) seems far too small for much of the world. Ive’s iconic design will doubtless change yet again, soon, driven not by design principals but by market demand. 

This is to be expected. The market never sleeps.

What I had not expected, however, yet which appears now almost certain to happen, is that Jony Ive likely won’t be involved in several major Apple hardware designs. Apple has simply become too big.

In yesterday’s earnings call, Tim Cook said he “can’t wait” to introduce several new products and services to the market. Ive may have overseen the design of all of these, but that’s not likely to remain true. What does this mean for Apple products going forward?

Mostly good things, I believe, with an explosion of not only new products, but new looks and new identities.

Cook Brings In Ringers

Does anyone really expect Dr. Dre and Jimmy Iovine to have their (Beats) headphones, speakers and related audio accessories conform to any Jony Ive preferences?

Yes, Ive is Senior Vice President, Design, in charge of software and hardware design. He has certainly earned his reputation as a peerless product designer. But I think Cook is right to bring in ‘ringers’ as the company steadily moves into new markets, new products and new regions, propelled by the world’s insatiable appetite for the high margin iPhone.

As Jan Dawson‘s latest chart reveals, iPhone revenues simply dwarf everything else at Apple — practically everything else everywhere.


Tim Cook has no intention of allowing this trend line to falter on his watch. More iPhones are to be sold to more people, with iPhone sales and margins protected by a range of hardware accessories. Beats, wearables, watches; these will be the start. Not all new hardware design will be overseen by Jony Ive.

Consider these Beats headphones. What will be Ive’s input into future Beats designs? Will he have any input? 


It’s not just headphones and speakers, of course. Angela Ahrendts, the new Senior Vice President, Retail and Online Stores, has brought to life numerous fashions and accessories for Burberry, a company she almost singlehandedly rescued.


Ahrendts proved her deft touch in determining what products would sell to discerning customers, particularly in China — factors extremely important to Tim Cook’s grand plans. It seems silly to believe the future Dame Ahrendts will only be involved in the look and feel of Apple Stores given her uncanny ability to understand fashion, luxury, design and desire.

In fact, there may be no one at Apple with a stronger intellectual and emotional connection to Steve Jobs than this newest member of Apple’s executive team. Consider these quotes from a Vogue interview with Ahrendts:

Upon her arrival in London, she discovered that there weren’t many high-level Burberry executives who shared her enthusiasm for the label. Within a year, she sacked the entire Hong Kong design team and closed factories.

The label was in need of a dramatic overhaul, its famous plaid having become diluted by wide-spread, cheap copies.

Ahrendts and Christopher Bailey have taken (Burberry) back to its pure heritage.”

Ahrendts bought back 23 licenses that Burberry had sold to another companies, which had meant other firms could use its signature check on products such as disposable nappies for dogs. “I feel like I spent my first few years here buying back the company – not the most pleasant or creative task,” she said. “But we had to do it. If you can’t control everything, you can’t control anything, not really.”

Just like Cook didn’t acquire Beats solely for its margins on headphones, he did not bring in Ahrendts simply because she understands how to optimize profits per square foot.

A New Apple Design Template

I believe we are on the cusp of a product explosion at Apple. Given the new hires and acquisitions, I think a design explosion is also percolating inside Apple.

Just look at the talent.

This is a new Apple and one person, not even one team, can design every product for every market segment. Is Ive really best for each of these — or all of them?

  • Tablets and laptops
  • iWatch and wearables
  • iPhone cases and accessories
  • The look and feel of CarPlay — including built-in hardware — in vehicles ranging from a Mercedes AMG to a Chevrolet
  • iBeacons. iPods. Beats.
  • iPhone (all versions)

Putting Ive in charge of all of this is like putting Elvis in movies. Suboptimal results all around. Cook knows this. Therefore, he brought in significant talent from the outside. Ahrendts, Iovine, Dre, men and women with design experience in watches, fitness bands and wearables. Men and women with a keen, proven ability to attract Chinese consumers. Those with a keen ability to attract urban youth. Those who desire fashion and those who demand function.

Prediction: The iconic look and feel of Apple products will likely no longer be the single, driving element behind the company’s hardware. Rather, the depth of its integration to the iPhone. The days of ‘universal’ Apple products designed to satisfy everyone are coming to an end.

The future Apple will release some duds, no doubt, but I think there will mostly be an incredible range of beautiful, functional products. 

Microsoft Removed Chesterton’s Fence

On Saturday, I explained why The Smartphone Is Not Merging With the PC. Apple and Google are moving in almost opposite directions from one another. But Microsoft? Their personal computing design philosophy is taking them nowhere fast. And one of the reasons for this failure in design is Microsoft is guilty of removing Chesterton’s Fence.

Chesterton’s fence is the principle that you should never take a fence down until you know the reason why it was put up.

The paraphrased quotation, was ascribed to Gilbert Keith Chesterton by John F. Kennedy in a 1945 notebook. The correct quotation is from Chesterton’s 1929 book, The Thing, in the chapter entitled, “The Drift from Domesticity”

      In the matter of reforming things, as distinct from deforming them, there is one plain and simple principle; a principle which will probably be called a paradox. There exists in such a case a certain institution or law; let us say, for the sake of simplicity, a fence or gate erected across a road. The more modern type of reformer goes gaily up to it and says, “I don’t see the use of this; let us clear it away.” To which the more intelligent type of reformer will do well to answer: “If you don’t see the use of it, I certainly won’t let you clear it away. Go away and think. Then, when you can come back and tell me that you do see the use of it, I may allow you to destroy it. ~


For a decade, Microsoft tried, and failed, to master the tablet form factor. In April 2010, Apple introduced the iPad. In less than six months, Apple had sold more tablets than Microsoft had sold in the previous ten years. How could this be?


Apple built a Chesterton’s fence between the desktop and the tablet. The desktop used a mouse to enter pixel specific input. The tablet used a finger to enter touch input. Each form of input was separate, one from the other.

Remember, the iPad — especially in comparison to the Windows’ tablets that had preceded it — was wildly successful. However, Microsoft treated that success with utter disdain. They gaily came upon Apple’s method of using separate inputs for separate form factors and said: “I don’t see the use of this; let us clear it away.” They did not “go away and think”, they simply took the fence down without knowing the reason why it was put up in the first place.

Bill Gates’ Interview

The truth is actually a little more ominous than this. Listen to what Bill Gates had to say in this 2007 AllThingsD interview conducted by Walt Mossberg:

      MOSSBERG: What’s your device in five years that you’ll rely on the most.

GATES: I don’t think you’ll have one device…

I think you’ll have a full-screen device that you can carry around and you’ll do dramatically more reading off of that – yeah, I believe in the tablet form factor…

…and then you’ll have the device that fits in your pocket…

…and then we’ll have the evolution of the portable machine. And the evolution of the phone will both be extremely high volume, complementary–that is, if you own one, you’re more likely to own the other.

Sounds a lot like the iPad and the iPhone, right? And it doesn’t sound at all like the 2-in-1 Frankenstein’s monster Microsoft is trying to foist upon its unsuspecting customers.


The truth is, Microsoft didn’t take down Chesterton’s fence because they didn’t know any better. They took it down DESPITE knowing better. They took it down because they had to — because Apple’s separation of desktop and tablet inputs conflicted with Microsoft’s Windows business model. And having now removed the fence, Microsoft is seeing why it was put there in the first place. And so, in closing, the principle of Chesterton’s fence remains:

Never take a fence down until you know the reason why it was put up.

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?

dragon v2

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.  

WWDC faithful

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


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)


      “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.


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


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.


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


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.


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.


HangingSales 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.


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.


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!

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


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


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.)

Microsoft Is At War With Itself

On Tuesday, May 20, Microsoft held an event to unveil the Surface Pro 3 Tablet. You can view the webcast here. ((Ironically, the video stream provided by Microsoft is in Adobe Flash, so if you’re on a mobile device, you’re out of luck.)) NOTE: The quotes, below, are time stamped so you can locate them on the video.

I am breaking my coverage of the Microsoft Surface Tablet Event into two separate articles. Today, I will review the six minute introduction given by Microsoft CEO, Satya Nadella. In my opinion, Nadella’s statements were very revealing but not in the way he might have wished. Once we look “beneath the Surface” or “behind the curtain,” we can see that the contradictions inherent within Microsoft’s overall strategy force it to war with its customers, its partners and itself.

Tomorrow, in my Insider Article (subscription required), (now available, here) I will turn my attention to the specifics of why Microsoft’s grand strategy is self-contradictory and self-defeating. In essence, Microsoft is playing a game of Roshambo (rock, paper, scissors) and wants to simultaneously throw the rock, the paper and the scissors — with wholly predictable results.

Microsoft’s Mission?

    01:53: “It starts for us with this obsession of empowering every individual and organization to do more and be more. That is what we at Microsoft are all about. This is what is the unifying theme for the company across everything that we do. We want products and technologies that enable people to dream and get stuff done, we want products and technologies that enable people to be able to get more out of every moment of their life. that’s the mission we are on.”


The good news is Satya Nadella seems to be able to articulate Microsoft’s vision better than Steve Ballmer ever did.

The bad news is the vision Nadella articulated wasn’t very compelling. I’m willing to give Nadella and Microsoft a pass on this because, if we are grading on a curve, very few companies have compelling visions. Not everyone, however, graded on a curve:

Ugh. Can someone please get Microsoft a new mission statement? Classic best-to-worst. ~ Ben Thompson (@monkbent)

It will be awfully hard for Microsoft to ever again create a mission statement as great as “A computer on every desk and in every home.” ((Bill Gates, Microsoft chairman and chief executive officer, 1980)) but merely saying Microsoft’s Mission is to create products and technologies that enable people to dream and get stuff done won’t cut it in the long run.

Competing Against Customers?

      00:45: “Our cloud enables everyone on every device.”

03:09: “(T)hat’s what has led us to build the ubiquitous software products that we’ve built today.”

These statements raise more questions than they answer. If Microsoft wants to be on every device, if they want to have ubiquitous software, then does it make sense for them to build hardware too? Isn’t it an inherent conflict of interest to ask other companies to use your cloud services on their devices while simultaneously trying to replace their devices with your own?

Gemini sisters fighting on a white background

Competing Against Partners?

    04:55 “We’re not interested in competing with our OEMs ((OEM = Original Equipment Manufacturers))when it comes to hardware.”

Really? You sure have a funny way of showing it.

Nadella says that Microsoft isn’t interested in competing with its OEMs when it comes to hardware, a stance I don’t really understand. ~ Harry McCracken (@harrymccracken)

If Microsoft is not interested in competing with their OEMs — then why are they doing it? The Surface Tablet competes directly with Microsoft’s own (so-called) hardware partners. And what hardware company in their right mind wants to license software from Microsoft in order to build hardware that then has to compete against Microsoft-branded, and Microsoft software-integrated, hardware?

The hardest thing to explain is the glaringly evident which everybody had decided not to see. ~ Ayn Rand


Why Hardware?

    04:05 “The question that needs to be asked and answered is why hardware?

I give Nadella full credit for asking the exact right question. I can’t, however, give him full marks for actually answering the question.

    …We are not building hardware for hardware’s sake. We want to build experiences that bring together all the capabilities of our company…to build these mobile first productivity experiences. That’s the mission.”

Hmm. Not really answering the question of “why hardware” just yet.

    …In fact our goal is to create new categories and spark new demand for our entire ecosystem. That’s what inspires us and motivates us with what we’re doing in our devices and hardware.

Hmm. Microsoft wants to create new categories and spark new demand. Sounds good, as far as it goes. But honestly, what company doesn’t want to create new categories and spark new demand? The real question then is: “What category is the Surface Tablet creating and does that category deserve to exist?”

    05:30 Can we design and build a device that takes the best of the tablet and the laptop and enables any individual to be able to read and to be able to create and write; allows you to watch a movie and make a movie; enjoy art and create art — that’s the device we want to create.

CAPTION: The Surface Hybrid seeks to create a new category between the PC and the Tablet

Now the picture is coming into focus. Microsoft doesn’t believe tablets are always good enough. Microsoft doesn’t believe notebooks are always good enough. What people really want, what people really need, according to Satya Nadella, is a hybrid computer — like the Surface Tablet — that’s the best of both worlds. A device both a tablet AND a PC — one device that can do it all.

It is not the writer’s task to answer questions but to question answers. ~ Edward Abbey

However, if Microsoft’s answer to the question: “Why Hardware?” is “New Category Creation”, that begets a whole new set of questions:

  1. If the hybrid category is so compelling, so wanted, so needed, then why couldn’t Microsoft’s hardware partners have taken the Windows 8 operating system, applied their hardware designs to it, and created the hybrid category on their own?
  2. Not every category deserves to exist. What makes Microsoft think the hybrid is deserving of being a category of its own?
  3. Creating a category is hard. Creating a category in hardware, which is outside of Microsoft’s core skill set, is harder still. Aside from “sparking new demand”, is there another, more obvious reason why Microsoft feels the need to create this new category?


The only interesting answers are those which destroy the questions. ~ Susan Sontag

Tomorrow, I take a deep dive into those questions and many more as well. Here’s a hint as to what we’ll be finding:

In business, as in Roshambo, you can never beat your competitors if you’re always beating yourself first.


Microsoft Needs To Burn More Bridges, Faster

I have been one of Microsoft’s most vocal critics (although, to be fair, just one of many). With profits as their north star, Microsoft has spent the past 15 years adrift. lost at sea, subject to the mercy of the winds and tides, with no harbor to shelter them, with no port as their destination.

Thankfully Microsoft has recently changed captains, naming Satya Nadella their new CEO on February, 4, 2014. The change has been transformative to the good ship Microsoft. They seem rejuvenated, like a whole new company ready, once again, to challenge the winds and the waves of commerce, to set their sails and head in a new direction rather than to merely allow themselves to be swept along by events.

Having said all that, Microsoft is making several announcements tomorrow, Tuesday, May 20th, 2014. According to all reports, chief among those announcements will be one or more brand new Surface Tablets. And I have to ask this question:


I’ll start by conceding, sight unseen, the new Surface tablets will be much better than their predecessors, a technological wonder to behold. But that’s the answer to the wrong question. The question we should be asking is: What purpose do new Surface Tablets serve? How do they align with Microsoft’s goals and how do they help propel Microsoft toward those goals?

  1. Does a Surface Tablet help Microsoft’s hardware partners to compete? No, it does not.
  2. Is a Surface Tablet going to be part of a sea change that will transform tablet/notebook hybrids from niche to mainstream computing devices? No, it is not.
  3. Is a Surface Tablet going to justify Microsoft hybrid – neither fish nor fowl – Windows 8 operating system? No, it is not.

The Surface was one of the mistakes of Nadella’s predecessor. It is the hardware prosthetic used to support the Frankenstein’s monster that is Windows 8. It should not be embraced nor given new life.

Like an anchor holding back the ship, the Surface Tablets should be cut loose and allowed to sink beneath the inky waves of history.

The hardest thing to learn in life is which bridge to cross and which to burn. ~ David Russell


But apparently that’s not going to happen. It makes me wonder whether Nadella will be able to cut his anchors fast enough — to burn the bridges he needs to burn soon enough — to allow Microsoft to leave their past behind and move, unencumbered, toward their future.

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.

Apple suppliers

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…)


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.

iphone revenues

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.]

Unified OS Advocates Are Out Of “Touch” With Reality

Last week, Phil Schiller, Craig Federighi and Bud Tribble were interviewed as part of the Mac’s 30th anniversary. They — in no uncertain terms — slammed the door shut on the idea that Apple was planning on merging iOS (the operating system for their phones and tablets) with OS X (the operating system for their notebooks and desktops).

“We don’t waste time thinking, ‘But it should be one [interface]!’ How do you make these [operating systems] merge together?’ What a waste of energy that would be,” Schiller said.

“To say [OS X and iOS] should be the same, independent of their purpose? Let’s just converge, for the sake of convergence? [It’s] absolutely a nongoal,” Federighi said.

“And that”, I thought to myself, “finally puts an end to that discussion.”

Boy, was I wrong.

The Loyal Opposition

Brian S. Hall makes an impassioned case for operating system unification, right here at Tech.Pinions:

I want my various “computers”…to essentially operate as similarly as possible, preferably with a unified user interface and application set across all.

It’s troubling to me that the world’s biggest computer company (Apple) can’t seem to make this work. When I hear Apple execs mocking Microsoft’s UI strategy I think it’s an opportunity lost.

(I)t bothers me that it is Apple which seems so determined to accept multiple OSes across multiple form factors. Here’s a case, frankly, where I hope Microsoft wins.

Kyle Russell, of Business Insider, reviews the various operating system comments made by the Apple executives and comes to a similar conclusion, here:

As much as a well-executed touchscreen MacBook could make for an amazing device — maybe even “redefine laptop computing” — it seems that Apple doesn’t want people to get caught up on the idea, even if it is true.

(Emphasis added)

Do you fully grasp what both of these commentators are implying? It’s not, they contend, that Apple CANNOT create a unified operating system, it’s simply that Apple REFUSES to do so. If only Apple would not be so gol’ darn stubborn and get on the unified operating system bandwagon, Apple could not only make a device that would run on a unified operating system but they could make a unified device that would be totally AWESOME!

Bull hockey

[pullquote]A word to the wise is infuriating. ~ Unknown Source[/pullquote]

I VEHEMENTLY disagree. Operating system unification is not a “lost opportunity.” It’s not an “opportunity” at all. It’s a disaster because A TOUCH OPERATING SYSTEM IS WHOLLY INCOMPATIBLE WITH A DESKTOP OPERATING SYSTEM.

We have at least the courage of our convictions to say we don’t think this is part of what makes a great product; we’re going to leave it out. Some people are going to not like that… ~ Steve Jobs

The Interview

Metaphors Matter

“An incredible amount of thought and creativity went into the original Mac metaphor,” Tribble said.

A Tool Should Work The Way We Think, Not Make Us Think About The Way It Works

(T)he underlying principles behind them—that the Mac should be easily approachable and learnable by just looking at it, that it should bend to the will of the person and not bend the person’s will to the technology—those underlying threads also apply to our other products.

One Size Does Not Fit All

And I think what we are focused on is delivering the tailored, optimal experience for those kinds of ways that you work, without trying to take a one-size-fits-all solution to it.

No Touch Screens on Notebooks or Desktops

“It’s obvious and easy enough to slap a touchscreen on a piece of hardware, but is that a good experience?” Federighi said. “We believe, no.” ((Dr. Drang (@drdrang) has a thoughtful essay, here, on why touch screens WOULD work on notebooks and desktops. MY TAKE: This issue confused me for a while. It was clear to me that the input methods for notebooks and desktops were, and should remain, distinct from those of phones and tablets. On the other hand, it was also clear that phones and tablets were training us all to touch our computing screens. Ultimately, I concluded that metaphor mattered most. Using touch on a machine designed for a desktop metaphor only works SOME of the time and would ultimately cause confusion in the user’s mind. Better to make a clean break and have users to gestures on a touchpad, instead.))

The Personal Computer Has Been Honed To Work With A Keyboard And Mice; The Tablet Has Been Honed To Work With Your Finger

“This device,” Federighi said, pointing at a MacBook Air screen, “has been honed over 30 years to be optimal” for keyboards and mice. Schiller and Federighi both made clear that Apple believes that competitors who try to attach a touchscreen to a PC or a clamshell keyboard onto a tablet are barking up the wrong tree.

“The reason OS X has a different interface than iOS isn’t because one came after the other or because this one’s old and this one’s new,” Federighi said. Instead, it’s because using a mouse and keyboard just isn’t the same as tapping with your finger.”

The Metaphysics

Aristotle drew a distinction between essential and accidental properties. The way he put it is that essential properties are those without which a thing wouldn’t be what it is, and accidental properties are those that determine how a thing is, but not what it is.

Touch is ACCIDENTAL to a Personal Computer. It may enhance its usefulness but it doesn’t change the essence of what it is. Touch is ESSENTIAL to a Tablet. It’s the essence of what it is.

Pixel specific input is ANATHEMA to a Tablet. It destroys its very essence. A Touch device can literally not work with pixel sized input targets. But pixel specific input is ESSENTIAL to a Personal Computer. A Personal Computer can literally not operate without it.

A touch input metaphor and a pixel input metaphor not only should be, but MUST be, wholly different and wholly incompatible with one another. It’s not just that they do not comfortably co-exist within one form factor, it’s also that they do not comfortably co-exist within our minds eye.

In plain words, it’s no accident that the operating systems for tablets and notebooks are distinctly different from one another. On the contrary, their differences — their incompatibilities — are the essence of what makes them what they are.

Motorcycle-Motorcar ((Why Motorcar instead of car or automobile? Because I like alliteration, that’s why.)) Metaphor

A car and a motorcycle are both motor vehicles but they employ two very different user interfaces.

On a car:
— You use your left hand to steer;
— You use your right hand to shift gears; ((At least, you did before automatic transmissions came into vogue.))
— You use your right foot to accelerate and brake; and
— You use your left foot to keep time with the radio.

On a motorcycle:
— You use your left hand to work the clutch;
— You use your left foot to shift the gears;
— You use your right hand to work the front wheel brake; and
— You use your right foot to work the back wheel brake.

[pullquote]The mythical unified operating system is an insoluble problem, masquerading as a great good.[/pullquote]

You could put a hand brake on a car or a steering wheel on a motorcycle or a foot clutch on a car or a stick shift on a motorcycle — but none of those additions would make much sense. All would be confusing and most would be dangerous as all get out.

Unifying the features of a motorcycle and a car or a tablet and a desktop is not the goal. User understanding and usability IS the goal.

The Theory In Practice

That’s the theory. So what’s the reality?

Experience without theory is blind, but theory without experience is mere intellectual play. ~ Kant

The Tablet — Sans Desktop Interface — Is A Runaway Success

The iPad — and all the derivative tablets within the Android operating system — have only one operating system and only one input (touch) and they are fantastically successful.

By the end of 2014 the install base of tablets will be just over half that of PCs. ~ Ben Bajarin (@BenBajarin)

Take a deep breath and re-read that again. It only took FOUR YEARS for install base of tablets to reach half of that of Personal Computers!


If the tablet is only half-a loaf — if the unified operating system is the Holy Grail of computing — then why has the tablet been SO successful and why has Microsoft’s 2-in-1 effort been such an abject failure?

The failure of Apple critics is not that they don’t understand that Apple’s iPad/iPhone are selling. It is that they don’t understand why. ~ Ben Bajarin (@BenBajarin)


The Surface 2-In-1 Approach Is A Train Wreck

Design makes what is complex feel simpler, and makes what is simpler feel richer.

[pullquote]Microsoft’s Windows 8 operating system is as pure as the driven slush.[/pullquote]

Ask yourself this question: “Is Windows 8’s 2-in-1 user interface simpler?” Heck no, Why, Microsoft can’t even get their own flagship apps to work well on Windows 8.

I’m really not sure that there’s a worse app to use with Windows 8 tablets than Outlook. The idea that MS thinks this is acceptable is crazy. ~ Ian Betteridge (@ianbetteridge)

When Steve Jobs introduced the iPad in 2010, he asked “Is there room for a third category of device (between the phone and the notebook)?” Now Microsoft is trying to introduce yet another category between the tablet and the notebook. If it is to succeed, then it must pass the same litmus test that Steve Jobs proposed for the iPad:

The bar’s pretty high. In order to really create a new category of devices, those devices are going to have to be far better at doing some key tasks. Better than a laptop. Better than a smartphone. (Author’s note: And better than a tablet.)

[pullquote]You can’t sit on two horses with one behind. ~ Yiddish proverb[/pullquote]

Now let me ask you this: What tasks is the Surface FAR better at?

The Surface, which is the embodiment of combining two operating systems into one, has failed and failed miserably.


It turns out that Apple had long-ago asked — and long-ago definitively answered — the question of whether they would be combining a tablet with a notebook. And that answer was “Yes”:

QUESTION: “What would happen if a MacBook met an iPad?”

ANSWER: The MacBook Air. ((New MacBook Air announcement))

[pullquote]Microsofts strategy and products will appeal to millions while Google and Apple’s will appeal to billions. ~ Ben Bajarin (@BenBajarin)[/pullquote]

Tablet and notebook interfaces are not combining because it simply won’t work. Great products are not defined by the absence of weakness, but rather, by the presence of clear strengths.

In 2007, when the iPhone was introduced, Steve Jobs famously said:

(A)re you getting it? These are not three separate devices, this is one device, and we are calling it iPhone.

When it comes to phones, tablets and notebook/desktops, we can reverse that and paraphrase Steve Jobs by saying:

Are you getting it? This is not one device. These are three separate devices, and we’re calling them the smartphone, tablet and notebook/desktop.

Phil Schiller put it this way:

“It’s not an either/or,” Schiller said. “It’s a world where you’re going to have a phone, a tablet, a computer, you don’t have to choose. And so what’s more important is how you seamlessly move between them all…. It’s not like this is a laptop person and that’s a tablet person. It doesn’t have to be that way.”


Wise men profit more from fools than fools from wise men; for the wise men shun the mistakes of fools, but fools do not imitate the successes of the wise. ~ Cato the Elder

[pullquote]It is hard to get to the summit, harder to stay on it, but hardest to come down. ~ Aleksander Fredro[/pullquote]

Apple showed Microsoft the way to do tablets right, but Microsoft refused to follow Apple’s example because they knew that it would mean the end of their existing Window’s monopoly.

Many are stubborn in pursuit of the path they have chosen, few in pursuit of the goal. ~ Friedrich Nietzsche

Microsoft thinks they’re in the Windows business. They’ve forgotten their mission, their purpose. They’ve forgotten that they’re in the computing business.

ctrl-alt-delMicrosoft should Control-Alt-Delete their attempts at a unified operating system, but I don’t think there’s any chance that that will happen. Based on the statements coming out of Redmond, Microsoft is doubling-down on their current strategy which, in my opinion, is a tragic mistake. Besides, asking Microsoft to fix what’s wrong with Windows 8 is like making them the detective in a crime movie where they’re also the murderer.

Yogi Berra once famously said:

It’s not over until it’s over.

It’s over.

Tech Toy Story

Microsoft’s newest ad campaign is breath taking but not, I think, in the way that Microsoft imagines.


Just a toy“, my ass. ~ Steven Aquino (@steven_aquino)

This is why Microsoft will lose. This shows they don’t get it…“ ~ Ben Bajarin (@BenBajarin)

Is there some sort of Redmond Triangle — a mysterious zone where ad executives of talent disappear without a trace? The Microsoft ad is ignorant, insulting, and shockingly naive. How could a company as successful as Microsoft get it so very, very wrong?

History Repeats

[pullquote]The only new thing is history we don’t know. ~ Harry S. Truman[/pullquote]

Of course, Microsoft is not the first — nor will they be the last — to dismiss their competitor’s products as mere “toys.” There is a long and storied history of such foolish behavior.

Most recently, Blackberry, a.k.a, RIM, proudly boasted that their phones were “not a toy“.

Bad omen for Microsoft: It’s using BlackBerry’s ‘tools not toys’ line. ~ BGR (@BGR)

I remember the last company to push the “tools not toys” line: BlackBerry. Worked out awesome for them. ~ Brad Reed (@bwreedbgr)

[pullquote]History is a very good teacher, but he has very few students. ~ Wael El-Manzalawy[/pullquote]

But the story of dismissing the new as mere toys, goes back over a hundred years and surely extends throughout all of history.

While theoretically and technically television may be feasible, commercially and financially, I consider it an impossibility, a development of which we need waste little time dreaming. ~ Lee De Forest, inventor, 1926

I have determined that there is no market for talking pictures. ~ Thomas A. Edison, 1926

Airplanes are interesting toys but of no military value. ~ Marechal Ferdinand Foch, Professor of Strategy, Ecole Superieure de Guerre , France

X-rays will prove to be a hoax. ~ Lord Kelvin, British mathematician and physicist, 1896

When the Paris Exhibition closes, the electric light will close with it, and very little more will be heard about it. ~ Professor Erasmus Wilson, 1878

It’s only a toy. ~ Gardiner Greene Hubbard, future father-in-law of Alexander Graham Bell, on seeing Bell’s telephone, 1876

Although it is…an interesting novelty, the telephone has no commercial application. ~ J. P. Morgan, to Alexander Graham Bell

Well-informed people know it is impossible to transmit the voice over wires as may be done with dots and dashes and signals of the Morse code, and that were it possible to do so, the thing would be of no practical value. ~ Editorial in the Boston Post, 1865

Disruption Repeats

Disruption seems to follow a fairly steady pattern:

Stage 1: The incumbent over-serves the vast majority of their customers.

Stage 2: A challenger appears with a cheaper and/or simpler product or service that only performs a subset of the incumbent’s services. However, that subset served is the set of tasks that the vast majority of users wish to enjoy or perform.

Stage 3: The incumbent dismisses the challenger’s product or services as “beneath contempt”. Calling a new and inferior product a “toy” is a subset of such disdain ((Inspired by Horace Dediu)).

Who says you can’t do “real work” on a non-Microsoft tablet?

Just because Microsoft SAYS non-Microsoft tablet don’t do real work, doesn’t make it so.

In sales environments, a tablet is a better and more useful tool [than a PC]… ~ Nicholas Paredes

James Kendrick, of ZDnet, certainly seems to think that he gets “real work” done on his tablet.

And the way that Enterprises are snapping up non-Microsoft tablets suggests that SOMEBODY — and a whole lot of somebody’s — thinks that tablets are eminently capable of doing “real work.”

How many people use PC’s for “real work” anyway?

BeLifydCUAAMKDjBenedict Evans poses — and then answers — the question: “How many people use PCs for ‘real work’?

One problem with saying that you need a PC to do ‘real work’ is that a large % of people don’t actually use their PC for ‘real work’ ~ Benedict Evans (@BenedictEvans)

[pullquote]The easiest software incumbent to disrupt is the one prioritizing the needs of its strategy over the needs of its customer. ~ Aaron Levie (@levie)[/pullquote]

Microsoft has the question backwards. They’re asking: “How many tablets can run programs like Excel, Word and Powerpoint?” What they should be asking is: “How many people who use tablets need to use programs like Excel, Word and Powerpoint?”

Efficiency is doing things right. Effectiveness is doing the right things. Microsoft’s tablets may or may not be efficient, but they’re not effective because they’re not doing the right things.

What’s So Wrong With Being A Toy?

Quite often, when incumbents think a new entrant product is a toy, they’re right. ~ Benedict Evans (@BenedictEvans)

[pullquote]The supreme accomplishment is to blur the line between work and play. ~ Arnold J. Toynbee[/pullquote]

Being called a “toy” is not the insult Microsoft thinks it is. It may, in fact, be the ultimate compliment.

In the war between platforms you can use for real work and platforms that are just toys, the toys always win. ~ Benedict Evans (@BenedictEvans)

Creating a computer that does real work is the act of an engineer. Creating a computer that makes work feel like play is an act of genius.

I LIKE the tools that help me get work done. I LOVE the tools that make my work fun to do.

When the craftsman made the first wheel, industry veterans pointed out you couldn’t use it for real work. ~ Benedict Evans (@BenedictEvans)

It made for a fun toy though. ~ John Gruber (@gruber)

Microsoft Just Doesn’t Get It

[pullquote]Wisdom doesn’t necessarily come with age. Sometimes age just shows up all by itself. ~ Tom Wilson[/pullquote]

Microsoft seems to make the same mistake over and over and over again. The phrase “less is more” is literally untrue; it’s a logical impossibility. But when people use this expression, they’re not speaking logically, they’re using self-contradictory phrasing to describe an important principle — that keeping things simple; that avoiding unnecessary detail; often improves things.

Microsoft just can’t seem to learn this lesson. And, ironically, the longer they think of their competitor’s products as toys, the less likely it will be that their prospective customers take them seriously.

The Next Steve Jobs Will Destroy Apple

Apple is the biggest tech company in the world, worth at least $100 billion more than either Microsoft or Google. Apple has over 350 million active users. Within a few short years, I suspect a billion people will be using Apple computers every single day.

How did this happen? Thus: Steve Jobs proved us all wrong.

steve_jobs-wideIn so many ways, ways we now take for granted, ways that Google and Microsoft are rapidly trying to copy, it was Jobs who showed us the way — even as we all were convinced of his wrongness. Jobs proved us wrong not just on technical matters, but on profound aspects of both technology and business.

A few examples of Steve Jobs proving us all wrong:

  1. Building a global retail chain
  2. Requiring customers to pay for content
  3. Demanding high-margins for hardware
  4. Choosing margin share over market share
  5. Emphasizing design over commoditization
  6. Building a touchscreen-only line of computers
  7. Banishing pornography

All of these were business decisions that went against the accepted order. All were correct.

In this same way, Jobs taught us — for we did not initially believe — that:

  1. The big money resides at the top of the pyramid
  2. Walled gardens and well-controlled APIs are the future of the web
  3. Existing standards and popular features are of almost no consequence
  4. There is more money in consumer computing than the enterprise
  5. Set prices, clearly stated, benefit buyer and seller
  6. The web — websites, web pages, web standards — is less important than apps
  7. More users, more developers, more content providers directly benefit from a closed ecosystem than an open one


And here we are today, following decades of Jobs wandering the wilderness, steadfastly implementing the many and varied pieces of his mad grand vision.

Now, developers choose Apple first, others second (if at all).  Apple towers above Microsoft. Apple isn’t just the biggest computing company, it may also be the world’s biggest, most popular, most profitable gaming company. Symbian, BlackBerry, Palm, Motorola and Windows Phone have been crushed by iPhone. Dell has gone private. HP remains MIA. Jobsian tremors are still being felt across multiple industries as content, data, apps and services all collapse inside the iPhone — or its copiers.

In what turned out to be one of his very last shareholder letters, Microsoft CEO Steve Ballmer spoke with language clearly influenced by Jobs:

“We will continue to work with a vast ecosystem of partners to deliver a broad spectrum of Windows PCs, tablets and phones. We do this because our customers want great choices and we believe there is no way one size suits over 1.3 billion Windows users around the world. There will be times when we build specific devices for specific purposes, as we have chosen to do with Xbox and the recently announced Microsoft Surface. In all our work with partners and on our own devices, we will focus relentlessly on delivering delightful, seamless experiences across hardware, software and services. This means as we, with our partners, develop new Windows devices we’ll build in services people want. Further, as we develop and update our consumer services, we’ll do so in ways that take full advantage of hardware advances, that complement one another and that unify all the devices people use daily. So right out of the box, a customer will get a stunning device that is connected to unique communications, productivity and entertainment services from Microsoft as well as access to great services and applications from our partners and developers around the world.”

And, breathe…

Understand, I do not come here to mock Ballmer. Nor should the Apple faithful: Tim Cook is probably more like Ballmer than Jobs, after all. Besides, Ballmer did far too much to benefit the company he so dearly loved. And yet, in that single paragraph above, where Ballmer references billions of users, seamless experiences, delight, the integration of hardware and software, sounding so much like Steve Jobs, he grounds everything in the obvious, and the near-term. Contained within that same single paragraph Ballmer specifically mentions…Windows, PCs, tablets, phones, Windows, Xbox, Surface, Windows, Microsoft, partners, partners, partners, partners, and developers.

Ballmer’s statement is the beatification of the current product set, the glorification of the existing order, and fully aligned with the rational. This is not surprising. It’s nearly impossible to not be rational. Certainly this is true if you are the CEO of a publicly traded company.

Steve Jobs was not rational. His vision of the future was not dependent upon existing products, existing form factors, partners, developers, nor the established wisdom.

I lived through the years when Microsoft absolutely controlled the direction of personal computing. I was there for the rise of Google — and its destruction of the value of content and user privacy. I would not have dared believe that the radical visions of Steve Jobs would so thoroughly flourish in this world. It’s all so profoundly non-rational.

Steve Jobs was firm in his vision, proudly revolutionary, shrewd enough to avoid the trappings of both success and failure, and fully prepared to prove all of us completely wrong, no matter how long it took.

I am sorry for ever having doubted him.

All of which is prologue to the obvious: Apple is today’s monolith. All must acknowledge, possibly fear, every move Apple makes, each market it enters. We hang on the company’s every word, spin tales from its silence, and have grown comfortable in the knowledge that, as is the new natural order of things, Apple will succeed with each new release, each blessed launch.

Which is prologue to the less obvious: The next Steve Jobs, when she or he finally arrives, will have Apple squarely in their sites. Then blow it to bits.

Grading My Predictions For 2013


Time to fess up and see how badly I did in last year’s predictions. You can find them all here.

Criticism may not be agreeable, but it is necessary. 
It fulfills the same function as pain in the human body. 
It calls attention to an unhealthy state of things. ~ Winston Churchill

Prediction #1: There Is Little Room For A Category Between The Tablet And The Notebook.

This is still in dispute. Many still feel that a hybrid category between the tablet and the notebook will eventually emerge.

Not me. And it surely didn’t happen in 2013, so I’m chalking this one up as “correct”.

Here’s the thing: The touch user input (finger) is wholly incompatible with pixel specific forms of user input (mouse and stylus). And putting both side-by-side on a single device is not the solution, it’s the problem.

Why (my wife) hates Windows 8? In her words, “It doesn’t do what I’m telling it to do!” ~ Brad Reed (@bwreedbgr)

It’s anecdotal, but that’s about as damning a criticism as a product can receive.

In 1995, Cynthia Heimel wrote a book entitled: “If you leave me, can I come too?” I think that’s today’s de facto motto for Microsoft. Microsoft wants to have it both ways – sell you an all-in-one notebook AND tablet — and consumers are having none of it.

Prediction #2: Tablets Are Going To Be Even Bigger Than We Thought.

Worldwide the number of smartphones will surpass the number of PCs in the next 6 months. ~ Benedict Evans

Screen Shot 2013-12-18 at 17.51.51

Nailed it. 2 for 2.

Tablets were the biggest story in 2013. And they may well be the biggest story in 2014, too.

Prediction #3: Apple Will Create A New iPad Mini In The Spring.

Wrong, wrong wrong. I thought that Apple would target the tablet for the education market. But Apple has opted, instead, to move almost ALL product launches — iPod, iPhone, iPad – and maybe even Macs — to the holiday quarter.

2 for 3.

Prediction #4: iOS will become the premium model, Android will take the rest.

Sounds about right to me.

There a persistent misunderstanding of the Apple business model.

…Apple simply doesn’t care about market share. As a properly capitalist company it cares about the profits…

Apple has repeatedly said that it’s not interested in being a top Chinese or anywhere else smartphone player. It’s interested in being a top player at the top end of the smartphone market which is an entirely different thing. ~ Tim Worstall

No one seriously argues that Burberry should be more like Walmart ((Analogy borrowed from Brian S. Hall.)). Why ever does anyone think that Apple should be more like Samsung?

That makes me 3 for 4.

Prediction #5: Samsung Will Be Forced To Create Their Own Ecosystem.

Hmm. Lots and lots of talk about such a thing happening but almost zero action. Got that one definitely wrong.

Final score: 3 for 5.


I don’t really have much faith in my predictions anyway. I don’t pretend that I’m a seer who can peek into a future that no one else can see. As I often say, I prefer to predict the past — it’s safer. Easier too.

I more or less see my role as trying show people that the future they’re resisting is already here today — that the things that they are denying have already happened.

To most men, experience is like the stern lights of a ship,
 which illumine only the track it has passed. ~ Samuel Coleridge

Here’s a couple examples for 2014.

A) Microsoft is in more trouble than people seem to realize. Microsoft is making lots of money — which is good — but consumers are about to fire Microsoft from its current job and Microsoft doesn’t have any obvious prospects for obtaining future income — which is bad, bad, bad.

B) Phones and tablets are a thing. Notebooks and Desktops are a niche. Still getting lots of resistance to this fait accompli, and that resistance is warping the analysis of many.

C) Android is not the Windows of the 1990’s. Apple is not the Apple of the 1990’s. If you can’t see that today’s marketplace is entirely different from the computing marketplace of the 1990s, it’s because you refuse to see what is right before your eyes. The evidence is all around you.

There’s more, of course, but this isn’t a prediction article, it’s a mea culpa article. I was extremely conservative in my predictions and I still got 2 of 5 wrong. C’est la vie.

Happy New Year to all…and one last prediction:

I predict it will be an unpredictable year.