Truth And Lies About Apple

Brian S Hall / November 18th, 2013

I regularly provide analysis of the computing market, trends inside Silicon Valley, the current state of the smartphone wars. This week, I offer instead my observations on Apple. Starting now…

The persistent view among analysts that Apple can (magically) go down market, whenever they want, is, in my view, utter nonsense. It’s the same as suggesting Burberry, for example, can be WalMart. Apple is high-end, high-margin, brand and image focused, and companies cannot magically transform their market approach. To remake their products, their hardware, to radically expand customer service and to effectively give up the lead role in their global retail footprint — all necessary to go down-market — would make Apple no longer Apple.

To those that point to the iPod as some sort of proof that Apple can go down market, even that is wrong. The iPod was (always) a high-end flash drive with minimal computing capabilities.

That Google continues to develop and support services optimized for iPhone is all you need to know about those who scream that IPHONE IS DOOMED. They are either ignorant or they are lying to you. Why do you continue to reward them with your attention?

Google’s biggest mistake was wildly overpaying for Motorola, which continues to be a noose around the company. The second biggest mistake, however, was saddling iPhone users — for years — with an inferior version of Google Maps. I am not the only one that now uses Apple Maps almost exclusively. I suspect they have learned their lesson, the hard way.

In the most recent Apple patent trial, Phil Schiller stated that “almost everyone” at Apple works on iPhones, not Mac. This is true. It’s also remarkable. The iPhone was an unexpected blessing for Apple, raining down more in profits than anyone ever imagined it could. But, Apple’s management team still doesn’t get the credit they deserve for effectively re-making Apple, once the Mac company, into the iPhone company.

The next iPhone will be just like the new Nokia Lumia 1520. Large display. Unapologetically plastic. Colorful. 20mp camera.

Apple will be forced to develop a “phablet” because the market wants larger display devices. For most, a phablet is simply a better alternative to buying both a smartphone and a tablet. This is especially true for Apple, with its over-priced iPad line. Steve Jobs intended iPad to rest in sort of that middle ground between laptop and smartphone. A great idea for those who can afford three devices. The vast majority of the world cannot.

iOS 7 is beautiful. There is a core design flaw, however. The world is eagerly embracing the visual web — Pinterest, Snapchat, the new Twitter. In an increasingly mobile, real-time existence, visuals convey a great deal of information in an instant. iOS 7 runs counter to this trend. Note that your iOS 7 device insists on using text even where visuals would obviously work better, such as when telling you the current weather. Jony Ive’s legend is no doubt secure, but I expect iOS will quickly evolve to incorporate more visual elements. Form should follow function and most of the time the market wins.

With Rockstar, Apple becomes a patent troll. Rockstar is absolutely no different from Lodsys. That said, there is absolutely validity to Jobs’ thermonuclear war. There was nothing available like the iPhone or like the iPad until the iPhone and iPad. Intellectual property and design should be protected and compensated. On this, I fully stand behind Apple.

I have covered the smartphone wars as long, as diligently as anyone on the planet. Nonetheless, despite the growth of iPhone and the global smartphone market in general, I never thought it would be easier for me to buy more and better software for Apple products than Microsoft products.

Nintendo is hurting. Sony is hurting. We recently discovered that Xbox may not even be a money-maker for Microsoft. The premiere gaming company in the world is…Apple? I know, shocking. At least for those of us who grew up on PCs and game consoles.

The new iWork is so bad primarily because of Apple’s insistence on a ‘one-size-fits-all’ software strategy, forcing the product to be the same on a smartphone, a tablet and a laptop. This will always fail. Giving it away won’t change how bad it is. The only question now is, how long before Apple abandons this silly notion and gives us a productivity suite that works well?

As bad as the new iWork is, Apple does not get the credit it deserves as a software company. iTunes may not be on every desktop, but its close. iOS is now on hundreds of millions of smartphones and tablets. Mavericks is on millions of laptops. Apple’s global software presence is approaching Microsoft’s. This was even recently unthinkable. Even more, Apple’s software is on a larger array of usable devices — tablet, phone, laptop, desktop, set top — and built for multiple modes: touch, keyboard and voice. Remarkable achievement.

Every tech blogger I read, and I think I read them all, is a poor stock analyst. Please do not buy or sell stock, whether $AAPL, $AMZN, $GOOG or other, based on what a tech blogger says. Ever. They are cheerleaders. Save your money.

The next Apple app revolution will be…email.

Email, that boring, dated, derided yet almost universal tool, used — with great reluctance — for personal and professional reasons, is on the cusp of a revolution. At least, I hope so. Here’s an example of what I think Apple will do — what I think only Apple can do. Use the Open Table app, for example, to make a restaurant reservation. Now imagine that the reservation confirmation email you receive contains visually appealing, pre-embedded Yelp reviews of the chef’s best dishes, a PassBook coupon, Facebook credits, Foursquare check-in rewards, your friends list for those having dinner with you, and Apple Maps directions to the restaurant. This is all contained within the email. All secure because each ‘chunk’ of personalized app data is run only through Apple servers. Speed, simplicity, convenience, enhanced benefits. Think Google Now, only on steroids, because Apple will allow its massive app ecosystem to take part. Delivering it all through iOS Mail servers is a nice little knife in Google’s side, as well. That’s my vision, at least.

I look forward to your comments on what you think is true and what you think are lies.

Next week: Truth and lies about Silicon Valley

Brian S Hall

Brian S Hall writes about mobile devices, crowdsourced entertainment, and the integration of cars and computers. His work has been published with Macworld, CNBC, Wall Street Journal, ReadWrite and numerous others. Multiple columns have been cited as "must reads" by AllThingsD and Re/Code and he has been blacklisted by some of the top editors in the industry. Brian has been a guest on several radio programs and podcasts.
  • P.

    Hello? Did someone just randomly publish excerpts from your drafts folder? It reads like a mix of lies and truths, alright — it’s non-obvious which is which. And then sprinkling of unsubstantiated statements about future Apple products to top it off. What is this?

    • RBB

      What P. said. I was following along until “the next iPhone will be just like the new Nokia Lumia 1520” and then “forced to develop a phablet”??? That’s where the wheels just come completely off. If there’s anything that’s true about the 21st century Apple is that it doesn’t get “forced” to do any product. Any prediction that I have ever read by an analyst that Apple will be “forced” has been pretty much flat out wrong. So which is it, is that phablet truth, or a lie?

      • benbajarin

        I think part of it is Brian inviting people to comment on what they think is true and why and what they think is not true and why.

      • That is a good point. I began this piece stating these are my “observations” on Apple, when instead it should read these are my “views”.

      • The headline for this seemed so obvious and worked so well (in my head!) but probably I should have made it…”thoughts and observations on Apple.” Thanks for the comment.

    • benbajarin

      I think Brian is being vague on purpose to invite comments on opinions on certain points. To a degree letting the reader comment on what they think is true or not and why.

  • benbajarin

    I certainly don’t agree that Apple is anything like Lodsys. Lodsys goes after everything and anything where Apple and others will use this portfolio to defend particular IP in related categories to their own. I’m yet to talk to an IP lawyer I respect who feels as though this wasn’t a smart move from a companies IP portfolio and defense move.

    To the iPod question and Apple going downstream, we have to remember that cost will not be pursued at the expense of an experience. I think Tim Cook in his business week interview and others have proven that if the “Apple experience” can still be offered on lower cost product, they will do it. So while I certainly believe Apple will still go downstream with products they question is how low will they go. They don’t need to be the cheapest product in the market since differentiation can command a premium but we have to remember that the Apple experience is more important that driving cost down.

    So we will see over the next 3 years how low they go with prices but it will not come at the expense of quality hardware, software, and services simply to hit a price point.

    • David Olson

      I agree Ben with your view on Rockstar. It seems a way to do thermonuclear war without becoming an army and thus distracted from what they need to be about.

      Brian, I think you bring good insights to understanding Apple’s business.

    • rattyuk

      “Lodsys goes after everything and anything”
      But at the bottom level, messing with the ecosystem from below. If they were true to their words they should have aimed for Apple straight off the bat, but they don’t have the money to do that.

  • klahanas

    From a philosophical point of view (as I would be prone to look at it as well) Apple is Lodsys. Everyone is Lodsys. From a practical point of view, Apple will use Rockstar not so much to make money directly, but rather to exert control by locking out competitors or forcing them into inferiority. What the patent system has devolved to is “let the courts figure it out”. Many (most?) patents could be invalidated, but then you need a stash the size of Apple’s to do it (and be willing to spend it on that). IMO I’m in the camp that software should be covered under copyright, not patent.

    I think you made a mistake when you said that there was nothing like the iPhone/iPad until Apple. The LG Prada predated it. There was also a lot of conceptual prior art, without it necessarily have been made into a full device. Where you are right is if you look at the whole bundle device/ecosystem. Lock in and “integrated exclusivity” were the innovations there. Software repositories such as Handango, Mobile Planet, PPC4All, etc. existed long before the App Store, and you could buy from all of them. Much (not all) of my criticism of Apple would go away if that could still be done.

    Much talk has been spent on these very boards on whether tablets are PC’s. If they are, then each platform is a market unto it’s own, due to technical barriers. They are distinct. If you accept that argument at all, then Apple has monopoly control over theirs. WP does on software (not hardware), Android doesn’t, Symbian is dead, and BB is almost dead. Don’t even think of mentioning game consoles, these are not even rumored to be PC’s, though I philosophically agree that they too are monopolies.

    Regarding Apple as the leading game platform…Hmmm… Maybe the leading mobile gaming platform, maybe. That’s assuming your counting sheer number of games. PC’s (yes, and Macs) have far more games available. Then it’s the types of games. Mobile is predominantly (not exclusively) 2D games, I don’t see the A7 running Crysis anytime soon, regardless of “bits”.
    Anyway, this is another POV, not an attack. Thanks for an honest article.

    • What the patent system has devolved to is “let the courts figure it out”.

      Actually, that is precisely why these cases go to court. Determining valid from invalid, enforceable from unenforceable patents is an integral part of the process, and that process occurs in the courtroom.

      The facile narrative that has developed in the tech media regarding around “going to court” has people believing that the very concept of companies filing lawsuits against each other is something Apple started, or that it is a relatively new idea, or both. Nothing can be further from the truth. Corporations and companies have been taking each other to court over intellectual property from the time the first corporations and companies were created. As with everything regarding tech companies these days, if Apple does it, it’s major news. Which leads to forums full of bozos who had never heard of software patents, courts or lawsuits before truly believing that Apple is some global aggressor by suing over IP infringement as if this an heretofore unheard of development.

      • klahanas

        Actually, the patent office is so overburdened, they’ve opened the floodgates and delegated their responsibility to check validity to the courts. They are too cursory in their review. This is dysfunctional, since all patents are valid by definition, and can only be invalidated.
        Software patents are a relatively recent innovation. Like I said, IMO they shouldn’t exist. When a company like Apple takes trade dress, which CAN be an amalgam of simple, age old concepts, to court, you bet it’s news. Each case is a precedent.

        • Great point re patent office simply off-loading their responsibilities to the court. Thanks.

        • They are too cursory in their review.

          No amount of validation from the patent office would prevent a company from fighting a case against them or stop them from suing a competitor that employed patented technologies without a license.

          • klahanas

            There’s nothing stopping anyone from suing over anything. But even when you win, you lose! Anyway, that’s not relevant to the point. There’s good patents and bad patents. Being that patents are valid upon issue, it’s much more costly to challenge bad patents than to do the correct thing and never issue them to begin with.

          • Anyway, that’s not relevant to the point.

            It is entirely the point. The patent office cannot be the final word.

          • klahanas

            But it is…until overturned or upheld in court. The patent office issues “deeds” to “intellectual property”.

          • But it is…until overturned or upheld in court.

            So you are unclear on the meaning of “final”…

          • klahanas

            About as much as you are on “too many”…
            I got news for you. Courts don’t issue patents, they correct wrongly issued patents.

    • Herding_sheep

      The LG Prada was NOT like the iPhone. Not even close. A famous man once said “design is how something works, not how it looks.” The Prada was not a fully sophisticated desktop-class computing environment, the iPhone was. The Prada was a phone, and thats it.

      The iPhone OPERATED entirely different from any device before it. No concept art/tech demo/prior product anticipated the iPhone interface metaphor. Sorry. You can convince yourself otherwise, but reality is reality. The iPhone had orders of magnitude richer interactions than any device prior, where swiping on the display gave a sense of momentum/physics and bouncing. It introduced this notion of swiping, and the speed/weight in which you swiped correlated to an immediate appropriate action on-screen. I could go on and on listing the entire iPhone operation metaphor that Apple pioneered. But its not about the INDIVIDUAL ideas. Its about the collection of ideas into a single metaphor, figuring out the rules to an unestablished metaphor. A chef does not invent ingredients, they invent the recipe. Ingredients don’t just collect themselves into recipes, it takes a chef to establish these rules and conventions.

      Everyone takes these things for granted today, but that doesn’t make the discoveres any less significant. The most ingenious inventions are the ones people immediately take for granted, because they are concepts that make so much sense people don’t even need to think about them.

      • klahanas

        I agree about the ingredients and the collective design. I thought I said as much. Where I disagree is that the patent describes the collective based on the properties of individual elements. This is like a songwriter laying claim to writing lyrics for ALL songs.
        Regarding physics… Apple did not invent physics. It’s use in an interface is a matter of trade dress not invention. Even so, every physics ballistics demo is prior art. Physics has been part of PC gameplay since, forever….
        Regarding the Prada… this is a look and feel quarrel….

      • macyourday

        Exactly. Every phone was a turd before the iPhone if you wanted to do more than make a call. Only nerds and other masochists could extol the “vertues” of any device before the iPhone let alone attempt any less than excruciating interaction with them. The palm was the closest to being usable or even having a point, but even that was a stripped down version of the newton and the calendar was bought from apple. Then the was the Winblows phone/device. CE wasn’t even stable on the top of the line Navman 4 years ago. A single function device with barely any user input. It would have gone in a blender if there wasn’t a chance of getting some money back on it. It was the most vile electronic device I’ve had the misfortune to be suckered into.
        The iPhone is the communications device I had been dreaming of since my first mobile communicator (a Nokia).

        • Clustered

          CE was not unstable. I had windows mobile from 2004 -2006 and it was an awful UI but never unstable. The iPhone was a revolution alright but you are a revisionist without knowledge..

    • qka

      What the patent system has devolved to is “let the courts figure it out”.

      And how has this changed in 100 years? A hundred years ago, the Selden and Wright patents were stifling innovation in the nascent auto and airplane industries, respectively. In both cases, the patents were overly broad and issued with disregard for prior art.

      Some things never change!

      • klahanas

        Well, for one, there were no software or business patents then. Even 20 years ago. It used to be you could only patent a physical object, or tie an idea to a physical object that can actually be made by one skilled in the art. Secondly, I contend that it happens more today due to sheer volume of patent applications. But you’re right, it always happened, now it’s a matter of extent.

    • rattyuk

      “The LG Prada predated it.”
      The Prada was shown in the previous November. If you really think that Apple ripped that off in less than 6 weeks before the announcement in Jan, then you are basically implying that Apple “went back to the drawing board” and put a product out in 6 weeks.

      When Google saw the iPhone and went back to the drawing board it took them over a year to get the design “good enough”.

      • klahanas

        Since this involves a patent, there is always the prior art. An existing idea will prevent a patent if “one skilled in the art” can reasonably reproduce it. The Prada was one such example of prior art.

        • steve_wildstrom

          When you are talking about patents and prior art, you must always look at the issues in terms of specific patents and specific claims. The iPhone did not resemble the LG Prada nearly as closely as the Samsung Galaxy resembled the iPhone–and not nearly closely enough for Apple to have infringed on any LG design patent. And in terms of functional patents, the two phones really had very little in common other than a capacitatave touch screen, on which Apple did not claim fundamental patents.

          Samsung made the prior art claim in the Apple trial and lost, so that ought to be a settled issue. Once a competent court has considered and ruled on an issue like this, we really ought to stop arguing about it.

          • klahanas

            Prior art is not so much about resemblance, as it is about the elements that got put together and their individual function. Most patent applications are rejected because, at the judgment of the examiner, they found prior art, that the hypothetical “one skilled in the art” could have come up with the same invention given the prior art information. This is a test of being “novel” which is required of all patents.

          • steve_wildstrom

            You are failing to distinguish between design patents and functional patents (the Apple-Samsung case involved both.) A design patent behaves a lot more like a trademark (or trade dress) with the important difference that it is only granted for a period of time. It is very hard to invalidate a design patent, but at the same time, it is hard to derive a great deal of protection from design patents alone. In any event, the design patent components of the Apple-Samsung case are increasingly of purely historical interest as current Samsung products don’t look much like their Apple counterparts.

          • klahanas

            Thanks for pointing that out. Trade Dress makes a lot of sense and I know next to nothing on design patents, other than I don’t believe they should exist. The law, however, is the law…

    • twilightmoon

      You were doing good until you pulled out the troll-worthy LG Prada example. Really? So a pile of sand and a couple of bricks is the same as the Great Pyramids of Giza?

      Simple having a touch screen is not what makes the iPhone what it is, not even close. That you could make that argument with a straight face disqualifies you from having anything meaningful to contribute to e discussion at all.

      I suggest you stick to topics that you have some meaningful knowledge of, perhaps sports, or cars.

      • klahanas

        The Prada was the first full face touchscreen with rows of icons.

  • pk_de_cville

    Brian,

    I’ve been reading you for years. Bold predictions in this one, as always.

    They’re always creative and thoughtful and sometimes you’re right!

    Great article. Thanks

  • FalKirk

    Wow. What a fascinating article. I find your ideas to be thought-provoking, to say the least.

    I agree with you on Apple can’t go down-market; that Google’s support of iOS is telling; that Google made a mistake with Motorola (although I think they’ll easily survive it) and that they made another huge mistake with denying turn-by-turn maps to Apple; that the Apple management team doesn’t get enough credit for transitioning the company from the Mac to the iPod to the iPhone;

    I don’t think I agree with a single word you say after that…

    …but whether I agree or disagree, I find your thoughts clear, concise, well-stated and well-thought out.

    Well done. Very well done indeed.

    • Thanks! Sort of;-)

      • FalKirk

        Listen, just because I disagree with you doesn’t mean I think you’re wrong. It just means I have to learn more and in the meantime, I appreciate you challenging my preconceptions.

        Again I say, well done.

  • stefnagel

    Email. Nice. If Apple simply offered to preserve and protect all of my messages and images, I would be there in a lead pipe second.

  • pk_de_cville

    Apple and Lodsys…

    Lodsys carpet bombs hundreds, perhaps thousands, of small businesses with highly aggressive shakedown letters. The intent of these letters is not to open negotiations and determine whether the patent in question is valid and infringed.

    Lodsys learned a thing or two about extortion from the Mafia. Replace the brass knuckles and guns with these letters whose subtext is, “Hand over your money. We don’t care whether your in violation, just give us the dough.”

    Apple, in fact, has attempted to stop the shakedown of app devs on a troll prowered patent. Apple has licensed the patent for the App Store with the intent that its costly license would protect devs.

    Apple, for the most part, uses its IP in the patent wars waged against other corporate behemoths.

  • pk_de_cville

    BTW, email arriving with promotions and ads within, is a great idea. It will be done by someone, perhaps Apple.

  • Bill Smith

    I was with you until you started predicting the future.

    it’s one thing to make an accurate summary of the past, and I praise for you doing a great job of it. Your assessment of where things are going and why…well…

  • chano1

    Ah, Brian. You’re back.
    I hope you realise that your writing is the only reason I visit this site, even if it is a less colourful and iconoclastic voice here, in these filtered environs!
    At the very least you are thought-provoking, which is rare on the web.
    Keep on keeping on Brian.

  • chano1

    … but honestly now, which do you prefer:
    Burmart; or
    Walberry?

  • TheEternalEmperor

    iPad, by definition, is not overpriced. People vote with their wallets. It’s like saying I’m overpaid because some other developer doesn’t make as much. So flawed…

    • Great point. Perhaps I should have said…”overpriced to fulfill Steve Jobs vision.” That is, I don’t think for most people, even in the developed world, that the iPad is cheap enough to purchase in addition to a smartphone and laptop.

      • Space Gorilla

        At some point though, why can’t the iPad add ‘phone’ to its capability? Perhaps some sort of wearable accessory that allows me to carry my iPad and make phone calls on a Star Trek communicator badge, or bracelet? Voila! There’s your smartphone and laptop all in one device.

        • Great idea! iPad plus iWatch. I keep thinking of this in terms of iWatch as standalone or complement to iPhone. May be even more use cases matched with iPad.

        • steve_wildstrom

          Technically, it would be easy enough. The question is whether this is the form factor people want. I carry my phone with me all the time–for example, the three hours I just spent collecting leaves. But I’m not going to carry an iPad, even a mini, in circumstances like that.

          • Space Gorilla

            The wearable accessory would pair just as well with your iPhone, allowing you to keep the phone in your pocket more. I expect iPhones and iPads to become ‘computing engines’ that easily hook up to all kinds of accessories, from wearables to sensors to second screens to keyboards to TVs, and so on.

            In that sense the iPhone with two accessories (keyboard, second screen) becomes a laptop. There’s all sorts of neat possibilities.

      • TheEternalEmperor

        At some point, we’ve got to stop suggesting what “Steve Jobs” wanted? SJ was in control when the price was set and Apple as stuck to that price since 2010.

        And isn’t tablets supposedly, slowly displacing laptops. Can you be certain that in the choice between smartphones, laptops and tablets, that laptops won’t lose?

        Paraphrase Walt French, “The vendors are telling you in the most sincere way they know how that their tablets are not worth as much as the iPad.” Each time someone buys an iPad, the price is justified.

        I just sold a gen 1 16gb wifi-only circa 2010 iPad to Target for a $200 gift card and am getting $250 for my old iPhone 4 and 4S, The world has spoken. The devices seem to hold their value.

        • klahanas

          The US “world” also elected George Bush, it doesn’t mean they’re right. They’re just entitled to have him. 🙂

          • TheEternalEmperor

            First, let’s no matter what you believe, let’s keep this politics free. There are many sites where you can debate politics. This isn’t one of them.

            Second, people outside the US have purchased iPads and have said, pretty conclusively that iPads are NOT over-priced. Whether you, klahanas agrees is irrelevant. Apple’s sales speaks louder than your words.

  • No way Apple does a phablet, and if the Nokia Windows savior has any good features, which seems to be the case, I wouldn’t mind Apple borrowing a few ideas. But like it. No chance.

    The mail idea has merit, and I’d trust Apple to protect my privacy. Not Google. Apple will eventually win for that reason alone. I can trust them because they don’t make money selling me to third parties, because they don’t have razor thin margins that force them to seek alternate sources of revenue.

  • e92m3

    Absolutely zero evidence of any tangible education in semi-conductors, code, system security or market driven decisions based on gaining market share. Because you lack education in the critical subjects detailed above, your ability to grasp the requirements of enterprise are wholly inadequate.

    You’re completely without value in technical commentary.

    Horrendously terrible command of English, sprinkled with so much delusional nonsense one almost could not believe such ignorance is possible. Please, get a basic education in the above areas before you attempt to ‘write’ about anything slightly technical again.

    Like the average relatively uneducated, low-wage yet strangely smug apple victim, your complete technical inadequacy stands out with the clarity of a small man who compensates for his shortcomings with a giant vehicle.

    I think you’re self-serving little smirk sums up your worth to society and particularly IT ‘journalism’ (you’re really the lowest common denominator in IT, a real accomplishment!) rather nicely.

Protected by Gerben Law