This article is exclusively for subscribers to the Think.Tank.
“Whither” means “to what place or state: whither are we bound?” Wither means “dry up; wilt, droop, go limp, fade, perish; shrink, waste away, atrophy.” Following Apple’s World Wide Developer Conference (WWDC), we now know “whither” Apple is headed. Their base is strong and they seek to expand it by stealing share from Android and up-selling the Mac. Is that enough to make Apple’s base grow? Or is it a strategy that all but guarantees Apple’s base will stagnate and wither?
Apple’s base is incredibly deep and strong.
Over 100 million iPods;
Over 500 million iPhones; and
Over 200 million iPads.
Over 800 million iOS devices sold overall.
Over 230 million iOS devices sold in the past 12 months, alone.
Over 130 million of those 230 million iOS devices went to new users. That’s a lot of new users and that’s the polar opposite of “stagnation.”
89% of iOS users are running Apple’s latest iOS 7 operating system. By way of contrast, only 9% of Android users are on Android’s latest operating system, Kit-Kat.
Over 80 million Macs sold. Note that 80 million Macs is only a tenth of the 800 million iOS units that have been sold.
Over 40 million of those 80 million Mac users are running the latest Mavericks operating system. That’s a 51% adoption rate, the fastest PC adoption rate in history. By way of comparison, after two years, Windows 8 adoption is at 14%.
While overall PC sales have declined by 5% over the past year, Mac sales have actually increased by 12%. Again, this growth is important for our later analysis, so please make a mental note of it.
iOS and OS X
iOS and OS X users combined are rapidly approaching one billion users.
Apple will easily reach the milestone of 1 billion iOS devices sold this year. ~ Horace Dediu (@asymco)
Over 9 million registered developers, up 47% since 2013. Let me repeat that. Apple’s registered developers have increased by an astonishing FORTY-SEVEN PERCENT in the last year alone. Again, this is the very opposite of stagnation.
Everyone keep in mind that Apple Is Doomed ~ Alex Wilhelm (@alex)
Undoubtably, Apple is doing better than well today. However, that still leaves unanswered the question of tomorrow. Where will Apple’s future growth come from?
Apple has a lock on the premium MP3 ((The MP3 Market is fading fast.)), Smartphone, Tablet and PC ((Desktops and Notebooks)) markets. Apple’s grip on these market is very stable and not being seriously challenged. However, growth, not stability, is what one strives for. How then is Apple going to grow?
In his excellent analysis, “GROWING APPLE AT WWDC“, Ben Thompson of Stretechery breaks down the only two ways Apple can grow — either by stealing share from others or by up-selling to their existing client base. Today we’ll examine how Apple is trying to steal share from Android. Tomorrow, in my Insider article (subscription required), I’ll take long look at how Apple is trying to up-sell the Mac.
Stealing Share From Others
There are three ways for Apple to steal share from Android. The first is to expand sales into areas where only Android is for sale. That means expanding its base of carriers. Apple is doing that, so I won’t dwell on it here. The second way is marketing and the third way is to reduce barriers to entry — to eliminate “deal breakers” that might prevent Android users from switching to Apple devices.
Half the money I spend on advertising is wasted, and the trouble is I don’t know which half. ~ Lord Leverhulme
During the World Wide Developer Conference (WWDC), Apple went out of their way to trash Android. This was not an accident. If Apple wants potential customers to switch from Android to Apple then Apple has to highlight where Android’s problems lie and how Apples products serve as the solution to those problems.
— Apple pointed out that Android users were often unable to upgrade to the latest operating system and over one third of Android users were still using an operating system four or more years old. These users are not getting great new features, not running the latest apps and not getting security updates (and it shows.)
— Apple highlighted their own spectacular (97%) customer satisfaction ratings.
— Apple harped on the many privacy concerns that surround Android and Google products.
— Apple hammered Android on their lack of security, and in so doing, added the term “toxic hellstew” to the computing lexicon.
Renee Richie, has written an excellent article wherein he notes that Apple wants to be seen as number one where it matters most: engagement, affluence and value. This is not a new message. Apple has hammered home this theme over and over again.
We are unique position of having world class hardware, software and service skills under one roof, which enables us to provide an unparalleled user experience to hundreds and millions of customers. Working with our vibrant developer community we have built a large and thriving ecosystem. We are winning with our products in all the ways that are most important to us, in customer satisfaction, in product usage and in customer loyalty. ~ Tim Cook
With iOS 8, Apple battles Android on its own turf, allowing its users more choice. ~ Gigaom (@gigaom)
In addition to marketing Android’s weaknesses and iOS’ corresponding strengths, Apple can steal share from Android by making it easier for Android users to switch. One way to do this is to remove barriers; to eliminate “deal breakers”; to annex popular, but unique to Android, features and make them their own. Apple did this, with a vengeance, at WWDC 2014. A few examples:
- Third-Party Keyboards
Looks like the big news at WWDC is iOS becoming a power-user operating system. ~ Harry McCracken (@harrymccracken)
Tim Cook and Craig Federighi’s Apple?
Apple’s efforts to add geeky Android features to their own products may just be a market response — an attempt by Apple to attract more Android users. However, I think it may also be an area where the current management of Tim Cook and Craig Federighi diverge from their predecessors, Steve Jobs and Scott Forstall. Steve Jobs was a purist and I’m guessing he wouldn’t have wanted to use scarce resources to create features that he didn’t think were important to mainstream users. And make no mistake about it — because this mistake IS being made all across the Technosphere — many of the features Apple added on Monday are totally unnecessary to mainstream users.
One of the unique aspects of Apple has been its willingness to embrace counter-intuitive realities. For example, Apple alone seems to understand that the more you limit what a computer can do, the more likely it is that it can reliably do the things it can do. Another example is choice. Apple knows that simplifying a product has nothing to do with eliminating features and everything to do with eliminating the burden of decision making from its users.
[pullquote]The features we clamor for most are the features that normals use least[/pullquote]
This is, of course, heresy to the Technoratti. We live in our own little geeky bubble and don’t realize that the features we clamor for most are the features that normals use least. Being un-empathetic is a human condition, but neckbeards like us have raised obliviousness to an art form.
Apple is doing the things we told ourselves they’d never do in their stubbornness. ~ Gabriel Visser (@gvssr)
Hmm. Stubborn, ey?
When a person stands their ground and we agree with them, they are principled. When a person stands their ground and we disagree with them, they are stubborn. It’s all a matter of perspective and if there’s one thing the tech crowd is lacking, it’s perspective.
All we know is that the power features we so dearly love are essential TO US. Therefore, we assume these features must be essential TO EVERYONE. As Apple has demonstrated over and over and over again — it just ain’t so. Normals buy Apple products, not despite the geek features they lack, but BECAUSE they don’t have to deal with all that geekery.
Steve Jobs was a fanatic and we loved him or hated him for it. Tim Cook strikes me as a more practical sort of man. I’m told Craig Federighi is a bit more geeky than Scott Forstall was. It should, therefore, have come as no surprise to us that Apple was bending a little and becoming a little bit more Android-like.
It should have come as no surprise — but it still did.
Whither Apple or Wither Apple?
So, is this a good thing or a bad thing for Apple?
In the short run, it is great for public relations. The pundits and the techheads and the acolytes of “open” are eating this up. Google the words “Apple” and “WWDC” and “open” and you’ll find a dozen or so articles praising the “new” more “open” Apple.
My 2¢: for the past few years it’s felt like Apple’s only goal was to put us in our place. Now it feels like they might want to be friends. ~ Cabel Sasser (@cabel)
You know who needs a friend, Cabel? End users, that’s who. Because when developers become more important than end users you get — Microsoft.
Putting developers “in their place” — which is, to say, placed behind end users — is exactly what Apple should be doing.
So in the short-run, developers and geeks are loving the new friendlier, more open Apple. But how is that going to play in long run? Will the “new” Apple be a better Apple; a more successful Apple? Or has Apple begun to lose their way, betraying the very core of their being?
The Argument Against
There are a couple of very good arguments against Apple’s new approach. And, ironically, they come from no less a source than Tim Cook himself:
We believe in the simple, not the complex. ~ Tim Cook, Acting Apple CEO, January 2009 FQ1 2009 Earnings Call
We believe in saying no to thousands of projects so that we can really focus on the few that are truly important and meaningful to us. ~ Tim Cook, Acting Apple CEO, January 2009 FQ1 2009 Earnings Call
We don’t believe we can do things at the level of quality and link things as we want to between hardware, software and services so seamlessly if we do a lot of stuff. So we’re going to stick with our knitting with only doing a few things and doing them great. ~ Tim Cook
The Argument For
On the other hand, there’s this:
It’s not about pop culture, and it’s not about fooling people, and it’s not about convincing people that they want something they don’t. We figure out what we want. And I think we’re pretty good at having the right discipline to think through whether a lot of other people are going to want it, too. ~ Steve Jobs
Can we make a product that we all want? We think we’re reasonable proxies for others. So those are things we’d ask about any new product category. ~ Tim Cook
Steve Jobs, Scott Forstall, Tim Cook and Craig Federighi all believed or believe that they were or are “reasonable proxies” for others. The proxies have changed. The products will too.
The technology isn’t the hard part. The hard part is, what’s the product? Or, who’s the customer? ~ Steve Jobs
As Steve Jobs said, the hard part is knowing who your customer is. So long as Tim Cook and Craig Federighi keep the customer in mind, no one will much mind if they make Apple just a tiny bit geekier.
Tomorrow, in my Insider’s article (subscription required), I will take a hard look at the second part of Apple’s growth strategy: up-selling the Mac. It’s very counter-intuitive to seek growth in a shrinking market and one has to question how much of an impact this strategy can have. However, without question, up-selling the Mac is completely aligned with Apple’s business model and it may have much more upside that one would initially think.
UPDATE: The follow-up article, entitled: “Up-Selling The Mac” is now available, here. Subscription required.
Through the graciousness of Techpinions and Apple Inc., I was able to attend the Apple World Wide Developer Conference (WWDC), held this past Monday, June 10, 2013. I have a couple of in-depth articles that I’m working on, but since we, here at Techpinions, are far more about perspective and far less about the latest news coverage, I’m going to give those articles a little time to “breathe” so that I can develop them further. I’m very excited about these upcoming articles and I’m looking forward to sharing them with you in the very near future.
In the meantime, since the WWDC was so broad and so far-reaching, I thought that I would go through the conference video, step-by-step and provide some “snap” analyses of some of the less well known – or perhaps less well appreciated – aspects of the keynote speech. If you have additional insights, please let us know in the comments, below.
Overall Impression: Apple events are incredibly well-organized. The presentation was two hours long and it was packed full. The pace of the presentation was fast and furious as Apple tried to deliver as much information in those two hours as they possibly could.
“Only Apple could do this…” – Tim Cook
00:10: If you want to know how Apple sees itself or, at the very least, how Apple wants the world to see them, watch the video that opens the conference. There’s a lot of depth to this short video. Expect to read much more about it, here, in a future Techpinions’ article.
Developers, Developers, Developers, Developers
03:20: 6 million registered developers. 1.5 million new developers in the past year alone. Sold out the developer’s conference in 71 seconds.
07:40: 50 billion Apps.
That’s a lot of zeroes (50,000,000,000).
375,000 apps designed specifically for the iPad. Competitors? In the hundreds. One of Apple’s key differentiators.
575,000 million accounts, most with credit cards attached. Don’t underestimate the value of this. It’s HUGE. Think iTunes. Think iTunes Radio. Think payments. Think BIG.
“More accounts with credit cards than any store on the internet that we’re aware of” ~ Tim Cook
08:48: Apple paid developers 10 billion dollars.
5 billion of that paid just in the last year … three times more than all other platforms combined.” ~ Tim Cook
If there is one thing that the analysts are overlooking, it is this. If you want to truly measure which operating system is doing better, don’t look at the number of sales, look at the number of developers and the number of dollars being paid to those developers. By that measure, Apple is running away from the pack.
OS X: Mavericks
With Apple, it’s not about gathering the latest features together, it’s about having features that work the greatest together. Apple doesn’t strive to be the first, they strive to be the best.
36:15: Apple will suggest, retain and maintain your passwords and credit card numbers. I’ll have to see how this works in practice before I make a final judgment, but this was the first of many times when I thought, “Aha!”:
– My mom could do this, moment #1
Apple’s Technology Philosophy
An aside about Apple’s technology adoption and legacy philosophy. Apple is quick to discard the old, slow to adopt the new. It’s a weird mix that confuses many observers. Google aggressively moves forward. Microsoft aggressively retains backwards compatibility. Apple moves forward conservatively and discards the old aggressively.
Weird, right? Get used to it. It ain’t going to change anytime soon.
In the age of the iPad, what is the future of the notebook?
48:00: (Hint from Apple: “It’s the MacBook Air”.)
The new MacBook Air is almost identical to the old MacBook Air except that it contains Intel’s newest Haswell processor. The key difference is battery life:
— 9 hours for the 11 inch MacBook Air
— 12 hours for the 13 inch MacBook Air
TWELVE HOURS! Yikes.
Of course, no retina display. As Renee Ritchie of iMore is fond of saying, smaller, better battery life or retina display…pick two.
There was no mention of the MacBook Pro at the event, but rumor has it that it too will appear with a Haswell chip AND a retina display in the next 3 to 4 months.
By the way, is Apple seriously going after the PC market too? Stay tuned. More on that from Techpinions, yet to come.
“Can’t innovate anymore, my ass.” – Phil Schiller
52:15: Some say that Phil Schiller’s comment, above, was defensive. Hmm. I would say that words like “defiant”, “decisive” or “determined” would be much more aptly employed to describe the true tenor of his remark.
The Mac Pro has incredible design, power and speed, all housed in a teeny-tiny casing. The numbers being thrown around to describe the device were pure tech porn to the nerds attending the convention ((Nerds like me)).
However, while the Mac Pro will undoubtably be great…will it be great for anybody? Sure it will be perfect for someone like Pixar. But how many Pixar’s are out there? Will it truly be practical for many others? Not so sure. We’ll just have to wait and see.
Designed in California, Assembled in USA
01:39: This is Apple’s new tagline. Apple is now making the Mac Pro in the United States and they’re naming their OS X software after locations in California (starting with “Mavericks”). This is about as politically correct as it gets.
Expect to see this new tagline…like…ya’ know, – A LOT.
The Mac Is Back
60:00: One. Full. Hour.
Spent on the Mac.
If you thought that the Mac was dead, you were dead wrong. And it you thought the Mac was going to become the iPad, then get used to disappointment.
iWork In The iCloud
Create on your Mac, edit on your PC, present on your iPhone.
62:00: Sort of Apple’s take on Google Docs. I’ll have to wait until I get my hands on it but, without a doubt, a fascinating new direction for Apple.
Is iOS Both The Best AND The Most Popular OS?
69:30: Tim Cook seems to think so.
You can bet your life that I’ll be “liberating” large parts of this portion of the keynote for use in constructing an Insider’s article on this topic in the very near future.
If you can’t wait and want to have it served to you straight from the Cook’s kitchen, go have a look at the video starting at the 69:30, mark.
Apple’s Design Philosophy
“True simplicity is derived from so much more than just the absence of clutter and ornamentation. It’s about bringing order to complexity.” ~ Jony Ive
75:10: If you want to understand what Apple’s design philosophy is, go watch this video…
…then watch it again.
Tim Cook And Company Relish The Challenge
79:45: If you want to see a happy Tim Cook – a genuinely happy Tim Cook – just watch the video, starting at the 79:45 mark.
Apple may be under pressure from Wall Street but, if they are, Tim Cook and company seem to relish the challenge. I’ve never seen Steve Job’s captains look more upbeat, more excited, more confident or more determined than they did in this presentation. A lot of humor. A lot of enthusiasm. A lot of energy. A lot of optimism. Lot’s and lot’s of of optimism.
iOS 7’s Icons
81:15: Saying that iOS 7 is doomed to fail just because of the look of the icons introduced at the World Wide Developer Conference, is like saying that a bride is doomed to ugliness just because of how she looks, sans makeup, when she’s having her wedding dress fitted.
Let’s all take a deep breath, step back and give this thing a chance to unfold, shall we?
I’m not saying that there has been a rush to judgment…
…I’m saying that there has been a “gush” of judgment – most of which will, hopefully, be flushed away by the tides of time.
My take: They say there is nothing new in iOS 7. But there’s also nothing new in a cake or souffle. It’s not new ingredients that count, it’s how the ingredients are put together that makes a meal a masterpiece. ((Tip o’ the hat to Jean-Louise Gasse, for the analogy.)) Let’s give this cake a little time to bake and see if it rises, okay?
Gestures For Moving In And Out…
85:10: Universal gesture from left edge of display for moving in and out of apps…
– My mom could do this, moment #2
87:20: A universal gesture, available from anywhere, even on your lock screen.
– My mom could do this, moment #3
88:00: Simple. Powerful. Simply powerful.
And as Ben Bajarin reminded me, this may be an even MORE powerful feature on the iPad.
– My mom could do this, moment #4
101:45: New interface; new voices; new commands; answers more questions; hooks to wikipedia, twitter and Bing….
Hmm. Definitely a wait and see kind of deal.
iOS In The Car
103:25 Very quiet introduction. May be a much bigger thing than people realize. Need to wrap my brain around it. Go see Horace Dediu’s initial thoughts on it, here.
Automatic System And App Updates
105:35: – My mom will love this, moment #5
Music Match And iTunes Radio Integration
106:00: Hmm. Not hearing much buzz surrounding this. Yet I think it could be huge.
Music Match iCloud integration makes it easy to recover your music from the cloud. iTunes Radio makes it easy to discover your music from the cloud. Music Match costs $24.99 per year. iTunes Radio is free with ads…or free without ads if you are a Music Match subscriber.
Hmm. Music discoverability…built right into your existing music app…integrated with iTunes…easy, one-button purchases…that play on your iPod, iPhone, iPad, Mac or Apple TV. That’s not a big deal?
Now the discoverability portion of the product is a complete unknown. That will make or break this service. Will iTunes Radio be another Ping…or will it be the next big thing?
– My mom could do this, moment #6
112:05: If an unauthorized person tries to turn off “Find My iPhone” or wipe my device, they won’t be able to reactivate it. A powerful theft deterrent.
– My mom could understand the importance of this, moment #7
1,500 New APIs
112:55: ‘Nuff said. ((One possible caveat: An API to integrate with 3rd party game controllers? Hmm. Start packing your bags, game console makers.))
“Biggest Change To iOS Since The Introduction Of The iPhone”
115:05: By my count, Tim Cook and company said words to this effect on three – perhaps four – occasions.
iOS is not just a coat of paint. It is designed to be a “comprehensive end-to-end redesign of the user experience.”
Apple’s goal with iOS can be summed up this way:
It’s like getting an entirely new phone, but one that you already know how to use.
That is one truly ambitious goal. Only time – and the market – (and definitely NOT the critics) – will tell if Apple was able to pull it off.
116:45 Final video and Apple’s future Ad campaign. A branding campaign, not a product campaign. And what does Apple want their brand to stand for?
— This is what matters.
— The experience of a product.
— How it makes someone feel – delight, surprise, love, connection.
— Does it deserve to exist?
This is our signature…and it means everything.
(M)ore than just words…values we live by… ~ Tim Cook
If you don’t get Apple after watching this video…you just don’t get it.
In just a few hours the next Apple WWDC (WorldWide Developers Conference) will take place. A stage that has announced true global game changers, like the iPhone and the iPad.
In the end, right now it’s still about the App store. With 600,000 downloadable games, magazines and productivity tools, Apple is the application leader. But the others are not far behind. As quoted in Bloomberg earlier today, “The success of Apple’s App Store has helped create an economy for downloading mobile applications that will reach $58 billion in sales in 2014.”
Surely, Apple will continue App dominance – and its track record of suspense and big announcements at WWDC. Will we see the next iPhone? News on OS X Mountain Lion? A new social platform? The next “Big Thing” that none of us have even contemplated yet? It’s hard not to wonder where Apple goes from here, without Steve Jobs at the helm… but we’ll find out in just a few short hours.
This is a question I ask over and over in my upcoming eBook on Apple, “The Magic and Moxie of Apple – An Insider’s View.”
“… So where does Apple – a company that started out as two guys making and selling circuit boards out of their garage, which transformed into one of the biggest international technology companies in the world – go from here? Following the loss of Steve Jobs, that question seems challenging to answer. As we know all too well, Apple has seen itself rise and fall from grace before and reinvent itself more than once, and the company is counting on the fact that it’s cemented its place at the top so profoundly that nothing will stop it from continuing to grow. Continually releasing new products (and upgrading the old) may do this, but fundamentally, what direction does it take next? The iPhone, iPad, and iPod have already seen several generations of upgrades. What groundbreaking innovations will propel Apple in the same way that the iPod, iPhone, MacBook Air and iPad did? The answer to that question isn’t what new product will they come out with, but rather who will be dream it up without Steve? … ”
Like many of you, I’m eagerly awaiting iOS 6 and Mountain Lion – which brings some of the most popular features found on other Apple products to the Mac, such as GameCenter, notes, etc. A personal favorite is that Mountain Lion will send messages to anyone on an Apple product – so you’ll be able to begin a message on your Mac and pick it back up on your iPhone or iPad later on. We’ll see today what else Apple has in store for us – the world of believers, creators and brand advocates.
And although the race continues without Steve Jobs to lead the pack – only his company to carry on the dream – it will not be easy to watch WWDC without him taking the stage.
Kelli Richards, President and CEO
The All Access Group, LLC
PS: If you’d like to pre-order a copy of my book, “The Magic and Moxie of Apple – An Insider’s View,” please go to http://www.allaccessgroup.com/?p=2287.