Apple is on it's death bed
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http://www.androidauthority.com/chromebooks-outselling-macs-693688/
Chromebooks are now outselling Macs
For the first time ever, Chromebooks outsold Macs across the board in Q1 of 2016. IDC analysts have confirmed with The Verge that “Chrome OS overtook Mac OS in the US in terms of shipments,” noting that the heaviest market for Chromebooks remains education systems targeting the K-12 demographic. Although they did not confirm a specific number of sales for Google’s low-cost notebooks, they do report that Mac shipments were in the ballpark of 1.76 million during the three-month interval, meaning Dell, Lenovo, and HP must have hocked somewhere close to 2 million Chromebooks.
Android is also taking up arms in this battle. Specifics regarding how Android’s slew of apps are expected to arrive on Chrome OS are expected to be unveiled at Google I/O this week, and this explosion of software diversity may must make Chromebooks more appealing to the kind of users that Google wants to target. While we watch and wait, let us know what you think of Chrome OS overtaking Mac in the comments below!
Chromebooks are now outselling Macs
For the first time ever, Chromebooks outsold Macs across the board in Q1 of 2016. IDC analysts have confirmed with The Verge that “Chrome OS overtook Mac OS in the US in terms of shipments,” noting that the heaviest market for Chromebooks remains education systems targeting the K-12 demographic. Although they did not confirm a specific number of sales for Google’s low-cost notebooks, they do report that Mac shipments were in the ballpark of 1.76 million during the three-month interval, meaning Dell, Lenovo, and HP must have hocked somewhere close to 2 million Chromebooks.
Android is also taking up arms in this battle. Specifics regarding how Android’s slew of apps are expected to arrive on Chrome OS are expected to be unveiled at Google I/O this week, and this explosion of software diversity may must make Chromebooks more appealing to the kind of users that Google wants to target. While we watch and wait, let us know what you think of Chrome OS overtaking Mac in the comments below!
Apple, Samsung, Facebook, Amazon & the case of the 'very bad' Q2
By Daniel Eran Dilger
Sunday, May 01, 2016, 11:03 am PT (02:03 pm ET)
Apple's fiscal Q2 earnings were the company's "worst ever" of the last decade in terms of year-over-year growth, but not in terms of actual commercial activity during the first three months of 2016. Take a closer look at Apple and three other firms: Samsung, Facebook and Amazon.
Apple's "very bad" quarter was its second best Q2 in history
While CNBC lines up pundits expressing their surprise about Apple not beating its record quarterly sales and earnings reported in the year ago quarter, the real surprise should be that Apple didn't perform worse.
After all, over the past quarter—and back into last December, before Apple had even reported its fiscal Q1 results for the end of 2015—reports had been rolling in from Japan's Nikkei, as echoed in the Wall Street Journal, that based on supply chain rumors, Apple was cutting iPhone production by 10 percent in the December quarter, and 30 percent in the March quarter.
Those supply chain rumors didn't materialize in any sales shortfall in the December quarter—iPhone 6s actually sold slightly better than the blockbuster iPhone 6 cycle had at the end of 2014, even despite unfavorable economic conditions including very ugly currency headwinds across most of Apple's international sales regions.
In March, iPhone sales were below the previous year, but not anywhere near the reported 30 percent supply chain cuts. They were, however, well above the previous iPhone 5s cycle, showing that the anomaly in Apple's consistent pattern of global growth wasn't so much this year, but last year.
The reports of my death have been greatly exaggerated
That makes the one data point of decline in Apple's history of iPhone sales a poor representation for an empire in decline.
Recall that when PC shipment growth declined in 2009 for the first time in the decade, it wasn't the sudden end of PC growth. However, PC growth did indeed grind to a halt later, and has consistently tumbled each year since 2011.
The root cause wasn't that PC vendors had run out of customers. Instead, PC sales were hit by two trends: one was iPad and other tablets offering an alternative computing form factor, and the other was iPhone and other smartphones offering a completely different computing model.
In contrast, there does not appear to be any new mobile form factor that is eroding away the success of Apple's iPhone. That's a popular narrative among Apple's most scathing critics, including one particularly nauseating screed by Nick Farrell titled "The Decline of the Apple Cult Comes to Pass," which boldly claimed Apple lost sales in China due to more "functional" phones from HTC and Samsung that also offered more novel design flourishes.
Farrell wrote, "as the Chinese economy retracted, overt shows of wealth gave way to functionality. HTC and Samsung phones had more bells and whistles, and looked much better.
"But Apple's refusal to have a good old redesign go at its iPhone, even returning to the iPhone 5 design this year, was just silly. Is it any wonder that Apple sold only 51.2 million iPhones this year?"
Never mind that Apple didn't "return to iPhone 5" at any time during the quarter. iPhone SE didn't even go on sale until the quarter ended. iPhone SE is also obviously not Apple's new design for the future.
iPhone SE is not iPhone 7
As Harry McCracken, wrote in response for Fast Company, "I'm not even going to ask whether 51.2 million iPhones is a figure which can reasonably be preceded by the word 'only.' Here's another question, though: How can Farrell talk about Chinese consumers opting to buy HTC and Samsung phones instead of iPhones when the latest smartphone market-share stats for China show that Apple, even during a rough quarter, remains in the top five—and HTC and Samsung are nowhere to be found?"
Apple itself provided answers about why it sold "only" 52.2 million iPhones in the March quarter. One of the most significant was exchange rates, particularly related to Hong Kong, which inflated the price of all of Apple's imports into Greater China.
However, sales data from China for the quarter showed an overall slowdown in smartphone sales year-over-year. Xiaomi—one company that's been hyped as a competitive threat to Apple—was also reported to have lost sales volume and share.
That points to an economic downturn, combined with unfavorable currency exchange rates, as exerting a temporary impact on iPhone growth. Unlike PCs, which have clearly taken a prolonged, serious dive as consumers move to mobile devices, smartphones (and iPhone in particular) are not really being eaten up by a new competitor.
Further, unlike its PC peers, Apple has been reporting nearly consistent growth in Macs throughout the years of collapse seen in generic PCs. And at the same time, Apple has also built up iPad as a secondary computing platform, resulting in two very profitable computing businesses (Macs, among the top five PC vendors globally, and iPad, the number one tablet by a wide margin).
That provides a strong basis for supporting the view that Apple's iPhone business will also weather today's temporary setbacks at least as well as its strongest competitors, and be able to grow even as high volume, low end commodity rivals take turns imploding—as generic PC makers have been doing throughout Apple's entire history.
iPhones aren't slowing the same as PCs
While new fears are being invented about the prospect of iPhone 6 users growing satisfied with the phone they have over buying a new iPhone 7, the reality is that iPhones have a relatively short life cycle for two good reasons.
First off, unlike PCs iPhones have evolved rapidly and relentlessly. A PC from four years ago is not that outdated, but a 3 year old iPhone feels pretty long in the tooth. Even more importantly, PCs typically sit on a desk or are handled with care. People walk down the street with their phone in hand.
Just look around any bar and you see shattered screens everywhere. Drops and general day to day wear take a lot more out of our mobile computer-phones than previous generations of the personal computer were ever exposed to.
iPhone upgrades are a stable recurring revenue source. And most importantly, Apple is not just a hardware company but rather a platform company, so it has the power to rapidly enhance users' experiences with new evolutions of software and hardware integration in ways that other commodity phone producers can't on their own. Touch ID, Apple Pay and 3D Touch are easy examples.
Apple's Mac and iPad platforms lie somewhere in the middle. As with iPhone, Apple owns the entire platform and can rapidly introduce new integrated innovations. However, iPad is clearly showing itself to have a longer replacement cycle than iPhone, and Macs can stay useful for even longer.
One other issue uniquely faced by Macs: they're still powered by processors from Intel, which means that Apple's ability to introduce faster, more powerful models is contingent upon an outside partner, much the same way that generic PC makers also rely upon Microsoft, and Android licenses have to coordinate their direction with Google.
Apple vs Samsung: March quarter results
Samsung would like to have its own platform like Apple's iOS, which is why it invested in Bada and then Tizen. The problem is that it could not develop a platform that its customers wanted.
In the March quarter, Samsung saw year-over-year growth in its smartphone sales, but that's because the valuable Galaxy segment of its smartphone business is gradually rebuilding from a crushing defeat at the hands of iPhone 6 last year, rather than being compared to the tremendous upgrade cycle that iPhone 6 achieved, as Apple is.
Suggesting that Apple failed to grow while Samsung achieved growth is therefore among the most facile and willfully ignorant observations one can make about the smartphone market this quarter, even before recognizing that Samsung sold many more phones but earned less than a quarter what Apple did.
But there's also another difference between Apple's performance in the March quarter and Samsung's. One of the primary factors Samsung itself noted in its results was the earlier than usual launch of its Galaxy S7 flagship.
Apple launched iPhone 6s in the previous quarter, and did not begin selling the new iPhone SE until the quarter had ended. Additionally, Apple manufactured more iPhone 6s models in the December quarter this year. Last year, Apple also entered the March quarter with a inventory deficit.
This year, Apple did the opposite, and it had the effect of pulling some growth out of the March quarter and into December. That made the holiday quarter look better. Further, the launch of iPhone SE, as well as the new 7.9 inch flagship iPad Pro, both helped to delay sales into the June quarter.
That appears to have been a strategic decision intentionally made to allow the March quarter to bear most of the year's worst news. Tim Cook is frequently contrasted with Steve Jobs, but the latter made the same call back in 1997, writing off Apple's glut of inventory in one fell swoop, allowing the company to move forward without carrying a lingering problem.
That timing also means that throughout the rest of 2016, there will be increased focus on Apple's upcoming iPhone 7, and when it arrives Samsung's own flagship will be further away in the rear view mirror.
Additionally, when you look at China in particular, Apple's disappointing performance as a premium brand there looks much better when you contrast Samsung's position of not even being in the top five anymore.
As well, Samsung's smartphone portfolio is far further downmarket, meaning it is more vulnerable to commoditization, especially so because it runs the generic Android platform just like the other, cheaper Chinese brands.
Apple, Facebook and a new kind of growth: monthly active users
Despite a single quarter of iPhone sales decline, Apple's pool of active users is actually growing. We know this because Apple's iPhone 6s Q2 was as bigger than the iPhone 5s Q2 in 2014, and even a million units higher than the peak holiday launch Q1 sales iPhone 5s achieved.
In other words, while sales of new iPhones didn't increase year over year, growth of Apple's iPhone user base continued, fueled by the strongest influx ever of Android switchers.
Compare Facebook's growth in users. Facebook earns nothing from new users who begin using its platforms (Facebook, Instagram, WhatsApp). It actually spends significant resources acquiring new users and maintaining services and supporting the software they use.
Facebook's revenue comes from showing ads to those users, which helped it collect about $12 per user last year.
Now compare Apple's business: it brought in, on average, around $670 per user buying an iPhone in fiscal 2015 (231 million of them). It also brought in about $420 each on every iPad sold (55 million) and $1200 on each of 20 million Mac sales. But those all all just the buy-in to join Apple's platforms.
The Facebook-like revenue that Apple earned on its user base was another $20 billion, which includes sales of apps, AppleCare, iBooks, iTunes and new Apple Music subscriptions. Apple now has 13 million new subscribers who will each pay about $120 per year for that service.
Apple Music subscribers are worth $120, Facebook users worth $12
So even with fewer users—Facebook claims about 1.65 billion MAUs, compared to Apple's "over 1 billion" active devices or 782 million active iCloud users—Apple just reported quarterly Services revenue of over $6 billion, compared to the $5.38 billion in advertising revenue Facebook brought in.
And while Facebook earned $1.51 billion in the quarter, Apple's Services alone—with a profit margin estimated by Piper Jaffray to be around 60 percent—means that Apple earned about $3.6 billion from its own non-hardware business.
Apple is a much larger company than Facebook, so it shouldn't be surprising that it earned about twice as much servicing its own user base, even if that user base is smaller. However, Facebook's market valuation has now reached $363 billion, nearly 74 percent that of Apple's $492 billion market cap.
That ignores the fact that Facebook gets no "platform admission profits" from its users (that "other" $213 billion Apple earned from hardware sales last year), or that outside of the U.S., its ability to earn revenues off its user base drops off rapidly.
And while there are fears that Apple might have some issues in China, Facebook is completely blocked out of the second largest market for tech in the world, with no real hope of entry. China already has its own Facebooks operating there.
Facebook's valuation is anchored in expectations of growth. But is no growth envisioned for Apple's own, already larger and much more profitable Services segment?
Apple just added another 3 million Apple Music subscribers in the March quarter, who will contribute as much new revenue this year as 30 million new active Facebook users sitting in front of ads between their cat videos. Apple Music users are literally worth ten times as much.
Apple is building like Amazon, but earning 20x as much FCF along the way
Apple's data center in Maiden, N.C.
Additionally, Apple is said to have already inked a deal with Alphabet worth $400 to $600 million to transfer some AWS tasks to Google Cloud, preparing for a departure from Amazon's services this year.
How impressed can investors be with Amazon's ability to build commodity cloud infrastructure when Google, Microsoft and many others are desperately racing to build out their own commodity cloud infrastructure, driving prices into the basement like PC vendors in the 1990s?
Without any real profitability, Amazon is rampantly investing in a very expensive retail operation where order fulfillment costs are so high that the company is basically performing a volunteer service at the expense of investors.
It's also building a Prime content service, something more directly comparable to Apple's own Services segment, but again with a more detached user base that can freely defect to content subscriptions from Netflix, Google or, in the future, Apple's own.
Amazon's valuation? $308.71 billion, or 62 percent of the current valuation of Apple. Despite revenues of $29.13 billion, compared to Apple's $50.6 billion in quarterly revenue in its "bad Q2."
Clearly, investors don't think Apple has any potential to build any functional business from its increasingly large pile of money, and only envision the firm falling off the precipice into the chasm of doom that pundits have been describing each year since forever.
It will be important for Apple to more clearly articulate going forward that not only does it have a vast hardware business that operates like a wildly profitable version of Samsung (x4), but that it also has a Services business twice as profitable as Facebook, and is building out new cloud infrastructure to feed that enormous audience, rather than speculatively building commodity cloud infrastructure like Amazon.
If Apple can communicate that it isn't just a commodity hardware business like HP or Samsung, it demand a valuation that reflects that its past growth wasn't just a fluke of being in the right place at the right time, and that it didn't just accidentally end up with $10 billion in quarterly free cash flow.
By Daniel Eran Dilger
Sunday, May 01, 2016, 11:03 am PT (02:03 pm ET)
Apple's fiscal Q2 earnings were the company's "worst ever" of the last decade in terms of year-over-year growth, but not in terms of actual commercial activity during the first three months of 2016. Take a closer look at Apple and three other firms: Samsung, Facebook and Amazon.
Apple's "very bad" quarter was its second best Q2 in history
While CNBC lines up pundits expressing their surprise about Apple not beating its record quarterly sales and earnings reported in the year ago quarter, the real surprise should be that Apple didn't perform worse.
After all, over the past quarter—and back into last December, before Apple had even reported its fiscal Q1 results for the end of 2015—reports had been rolling in from Japan's Nikkei, as echoed in the Wall Street Journal, that based on supply chain rumors, Apple was cutting iPhone production by 10 percent in the December quarter, and 30 percent in the March quarter.
Those supply chain rumors didn't materialize in any sales shortfall in the December quarter—iPhone 6s actually sold slightly better than the blockbuster iPhone 6 cycle had at the end of 2014, even despite unfavorable economic conditions including very ugly currency headwinds across most of Apple's international sales regions.
In March, iPhone sales were below the previous year, but not anywhere near the reported 30 percent supply chain cuts. They were, however, well above the previous iPhone 5s cycle, showing that the anomaly in Apple's consistent pattern of global growth wasn't so much this year, but last year.
The reports of my death have been greatly exaggerated
That makes the one data point of decline in Apple's history of iPhone sales a poor representation for an empire in decline.
Recall that when PC shipment growth declined in 2009 for the first time in the decade, it wasn't the sudden end of PC growth. However, PC growth did indeed grind to a halt later, and has consistently tumbled each year since 2011.
The root cause wasn't that PC vendors had run out of customers. Instead, PC sales were hit by two trends: one was iPad and other tablets offering an alternative computing form factor, and the other was iPhone and other smartphones offering a completely different computing model.
In contrast, there does not appear to be any new mobile form factor that is eroding away the success of Apple's iPhone. That's a popular narrative among Apple's most scathing critics, including one particularly nauseating screed by Nick Farrell titled "The Decline of the Apple Cult Comes to Pass," which boldly claimed Apple lost sales in China due to more "functional" phones from HTC and Samsung that also offered more novel design flourishes.
Farrell wrote, "as the Chinese economy retracted, overt shows of wealth gave way to functionality. HTC and Samsung phones had more bells and whistles, and looked much better.
"But Apple's refusal to have a good old redesign go at its iPhone, even returning to the iPhone 5 design this year, was just silly. Is it any wonder that Apple sold only 51.2 million iPhones this year?"
Never mind that Apple didn't "return to iPhone 5" at any time during the quarter. iPhone SE didn't even go on sale until the quarter ended. iPhone SE is also obviously not Apple's new design for the future.
iPhone SE is not iPhone 7
As Harry McCracken, wrote in response for Fast Company, "I'm not even going to ask whether 51.2 million iPhones is a figure which can reasonably be preceded by the word 'only.' Here's another question, though: How can Farrell talk about Chinese consumers opting to buy HTC and Samsung phones instead of iPhones when the latest smartphone market-share stats for China show that Apple, even during a rough quarter, remains in the top five—and HTC and Samsung are nowhere to be found?"
Apple itself provided answers about why it sold "only" 52.2 million iPhones in the March quarter. One of the most significant was exchange rates, particularly related to Hong Kong, which inflated the price of all of Apple's imports into Greater China.
However, sales data from China for the quarter showed an overall slowdown in smartphone sales year-over-year. Xiaomi—one company that's been hyped as a competitive threat to Apple—was also reported to have lost sales volume and share.
That points to an economic downturn, combined with unfavorable currency exchange rates, as exerting a temporary impact on iPhone growth. Unlike PCs, which have clearly taken a prolonged, serious dive as consumers move to mobile devices, smartphones (and iPhone in particular) are not really being eaten up by a new competitor.
Further, unlike its PC peers, Apple has been reporting nearly consistent growth in Macs throughout the years of collapse seen in generic PCs. And at the same time, Apple has also built up iPad as a secondary computing platform, resulting in two very profitable computing businesses (Macs, among the top five PC vendors globally, and iPad, the number one tablet by a wide margin).
That provides a strong basis for supporting the view that Apple's iPhone business will also weather today's temporary setbacks at least as well as its strongest competitors, and be able to grow even as high volume, low end commodity rivals take turns imploding—as generic PC makers have been doing throughout Apple's entire history.
iPhones aren't slowing the same as PCs
While new fears are being invented about the prospect of iPhone 6 users growing satisfied with the phone they have over buying a new iPhone 7, the reality is that iPhones have a relatively short life cycle for two good reasons.
First off, unlike PCs iPhones have evolved rapidly and relentlessly. A PC from four years ago is not that outdated, but a 3 year old iPhone feels pretty long in the tooth. Even more importantly, PCs typically sit on a desk or are handled with care. People walk down the street with their phone in hand.
Just look around any bar and you see shattered screens everywhere. Drops and general day to day wear take a lot more out of our mobile computer-phones than previous generations of the personal computer were ever exposed to.
iPhone upgrades are a stable recurring revenue source. And most importantly, Apple is not just a hardware company but rather a platform company, so it has the power to rapidly enhance users' experiences with new evolutions of software and hardware integration in ways that other commodity phone producers can't on their own. Touch ID, Apple Pay and 3D Touch are easy examples.
Apple's Mac and iPad platforms lie somewhere in the middle. As with iPhone, Apple owns the entire platform and can rapidly introduce new integrated innovations. However, iPad is clearly showing itself to have a longer replacement cycle than iPhone, and Macs can stay useful for even longer.
One other issue uniquely faced by Macs: they're still powered by processors from Intel, which means that Apple's ability to introduce faster, more powerful models is contingent upon an outside partner, much the same way that generic PC makers also rely upon Microsoft, and Android licenses have to coordinate their direction with Google.
Apple vs Samsung: March quarter results
Samsung would like to have its own platform like Apple's iOS, which is why it invested in Bada and then Tizen. The problem is that it could not develop a platform that its customers wanted.
In the March quarter, Samsung saw year-over-year growth in its smartphone sales, but that's because the valuable Galaxy segment of its smartphone business is gradually rebuilding from a crushing defeat at the hands of iPhone 6 last year, rather than being compared to the tremendous upgrade cycle that iPhone 6 achieved, as Apple is.
Suggesting that Apple failed to grow while Samsung achieved growth is therefore among the most facile and willfully ignorant observations one can make about the smartphone market this quarter, even before recognizing that Samsung sold many more phones but earned less than a quarter what Apple did.
But there's also another difference between Apple's performance in the March quarter and Samsung's. One of the primary factors Samsung itself noted in its results was the earlier than usual launch of its Galaxy S7 flagship.
Apple launched iPhone 6s in the previous quarter, and did not begin selling the new iPhone SE until the quarter had ended. Additionally, Apple manufactured more iPhone 6s models in the December quarter this year. Last year, Apple also entered the March quarter with a inventory deficit.
This year, Apple did the opposite, and it had the effect of pulling some growth out of the March quarter and into December. That made the holiday quarter look better. Further, the launch of iPhone SE, as well as the new 7.9 inch flagship iPad Pro, both helped to delay sales into the June quarter.
That appears to have been a strategic decision intentionally made to allow the March quarter to bear most of the year's worst news. Tim Cook is frequently contrasted with Steve Jobs, but the latter made the same call back in 1997, writing off Apple's glut of inventory in one fell swoop, allowing the company to move forward without carrying a lingering problem.
That timing also means that throughout the rest of 2016, there will be increased focus on Apple's upcoming iPhone 7, and when it arrives Samsung's own flagship will be further away in the rear view mirror.
Additionally, when you look at China in particular, Apple's disappointing performance as a premium brand there looks much better when you contrast Samsung's position of not even being in the top five anymore.
As well, Samsung's smartphone portfolio is far further downmarket, meaning it is more vulnerable to commoditization, especially so because it runs the generic Android platform just like the other, cheaper Chinese brands.
Apple, Facebook and a new kind of growth: monthly active users
Despite a single quarter of iPhone sales decline, Apple's pool of active users is actually growing. We know this because Apple's iPhone 6s Q2 was as bigger than the iPhone 5s Q2 in 2014, and even a million units higher than the peak holiday launch Q1 sales iPhone 5s achieved.
In other words, while sales of new iPhones didn't increase year over year, growth of Apple's iPhone user base continued, fueled by the strongest influx ever of Android switchers.
Compare Facebook's growth in users. Facebook earns nothing from new users who begin using its platforms (Facebook, Instagram, WhatsApp). It actually spends significant resources acquiring new users and maintaining services and supporting the software they use.
Facebook's revenue comes from showing ads to those users, which helped it collect about $12 per user last year.
Now compare Apple's business: it brought in, on average, around $670 per user buying an iPhone in fiscal 2015 (231 million of them). It also brought in about $420 each on every iPad sold (55 million) and $1200 on each of 20 million Mac sales. But those all all just the buy-in to join Apple's platforms.
The Facebook-like revenue that Apple earned on its user base was another $20 billion, which includes sales of apps, AppleCare, iBooks, iTunes and new Apple Music subscriptions. Apple now has 13 million new subscribers who will each pay about $120 per year for that service.
Apple Music subscribers are worth $120, Facebook users worth $12
So even with fewer users—Facebook claims about 1.65 billion MAUs, compared to Apple's "over 1 billion" active devices or 782 million active iCloud users—Apple just reported quarterly Services revenue of over $6 billion, compared to the $5.38 billion in advertising revenue Facebook brought in.
And while Facebook earned $1.51 billion in the quarter, Apple's Services alone—with a profit margin estimated by Piper Jaffray to be around 60 percent—means that Apple earned about $3.6 billion from its own non-hardware business.
Apple is a much larger company than Facebook, so it shouldn't be surprising that it earned about twice as much servicing its own user base, even if that user base is smaller. However, Facebook's market valuation has now reached $363 billion, nearly 74 percent that of Apple's $492 billion market cap.
That ignores the fact that Facebook gets no "platform admission profits" from its users (that "other" $213 billion Apple earned from hardware sales last year), or that outside of the U.S., its ability to earn revenues off its user base drops off rapidly.
And while there are fears that Apple might have some issues in China, Facebook is completely blocked out of the second largest market for tech in the world, with no real hope of entry. China already has its own Facebooks operating there.
Facebook's valuation is anchored in expectations of growth. But is no growth envisioned for Apple's own, already larger and much more profitable Services segment?
Apple just added another 3 million Apple Music subscribers in the March quarter, who will contribute as much new revenue this year as 30 million new active Facebook users sitting in front of ads between their cat videos. Apple Music users are literally worth ten times as much.
Apple is building like Amazon, but earning 20x as much FCF along the way
Apple's data center in Maiden, N.C.
Additionally, Apple is said to have already inked a deal with Alphabet worth $400 to $600 million to transfer some AWS tasks to Google Cloud, preparing for a departure from Amazon's services this year.
How impressed can investors be with Amazon's ability to build commodity cloud infrastructure when Google, Microsoft and many others are desperately racing to build out their own commodity cloud infrastructure, driving prices into the basement like PC vendors in the 1990s?
Without any real profitability, Amazon is rampantly investing in a very expensive retail operation where order fulfillment costs are so high that the company is basically performing a volunteer service at the expense of investors.
It's also building a Prime content service, something more directly comparable to Apple's own Services segment, but again with a more detached user base that can freely defect to content subscriptions from Netflix, Google or, in the future, Apple's own.
Amazon's valuation? $308.71 billion, or 62 percent of the current valuation of Apple. Despite revenues of $29.13 billion, compared to Apple's $50.6 billion in quarterly revenue in its "bad Q2."
Clearly, investors don't think Apple has any potential to build any functional business from its increasingly large pile of money, and only envision the firm falling off the precipice into the chasm of doom that pundits have been describing each year since forever.
It will be important for Apple to more clearly articulate going forward that not only does it have a vast hardware business that operates like a wildly profitable version of Samsung (x4), but that it also has a Services business twice as profitable as Facebook, and is building out new cloud infrastructure to feed that enormous audience, rather than speculatively building commodity cloud infrastructure like Amazon.
If Apple can communicate that it isn't just a commodity hardware business like HP or Samsung, it demand a valuation that reflects that its past growth wasn't just a fluke of being in the right place at the right time, and that it didn't just accidentally end up with $10 billion in quarterly free cash flow.
The technology has a big future (the blockchain has a lot of potential). I think people get caught up on the currency which is just one method to record transactions on the blockchain. The programmable money (bitcoin) is interesting but the world's first global, open ledger is the interesting part. I think I've posted a few threads on the ramifications of that. The tech is the most important aspect of this and that's a real technological breakthough.
Damn near every company in the WORLD would like to be in the same place as APPLE. 
Apple is now the modern day Motorola and the iphone is now what the razor became.
Apple, Samsung, Facebook, Amazon & the case of the 'very bad' Q2
By Daniel Eran Dilger
Sunday, May 01, 2016, 11:03 am PT (02:03 pm ET)
Apple's fiscal Q2 earnings were the company's "worst ever" of the last decade in terms of year-over-year growth, but not in terms of actual commercial activity during the first three months of 2016. Take a closer look at Apple and three other firms: Samsung, Facebook and Amazon.
Apple's "very bad" quarter was its second best Q2 in history
While CNBC lines up pundits expressing their surprise about Apple not beating its record quarterly sales and earnings reported in the year ago quarter, the real surprise should be that Apple didn't perform worse.
After all, over the past quarter—and back into last December, before Apple had even reported its fiscal Q1 results for the end of 2015—reports had been rolling in from Japan's Nikkei, as echoed in the Wall Street Journal, that based on supply chain rumors, Apple was cutting iPhone production by 10 percent in the December quarter, and 30 percent in the March quarter.
Those supply chain rumors didn't materialize in any sales shortfall in the December quarter—iPhone 6s actually sold slightly better than the blockbuster iPhone 6 cycle had at the end of 2014, even despite unfavorable economic conditions including very ugly currency headwinds across most of Apple's international sales regions.
In March, iPhone sales were below the previous year, but not anywhere near the reported 30 percent supply chain cuts. They were, however, well above the previous iPhone 5s cycle, showing that the anomaly in Apple's consistent pattern of global growth wasn't so much this year, but last year.
The reports of my death have been greatly exaggerated
That makes the one data point of decline in Apple's history of iPhone sales a poor representation for an empire in decline.
Recall that when PC shipment growth declined in 2009 for the first time in the decade, it wasn't the sudden end of PC growth. However, PC growth did indeed grind to a halt later, and has consistently tumbled each year since 2011.
The root cause wasn't that PC vendors had run out of customers. Instead, PC sales were hit by two trends: one was iPad and other tablets offering an alternative computing form factor, and the other was iPhone and other smartphones offering a completely different computing model.
In contrast, there does not appear to be any new mobile form factor that is eroding away the success of Apple's iPhone. That's a popular narrative among Apple's most scathing critics, including one particularly nauseating screed by Nick Farrell titled "The Decline of the Apple Cult Comes to Pass," which boldly claimed Apple lost sales in China due to more "functional" phones from HTC and Samsung that also offered more novel design flourishes.
Farrell wrote, "as the Chinese economy retracted, overt shows of wealth gave way to functionality. HTC and Samsung phones had more bells and whistles, and looked much better.
"But Apple's refusal to have a good old redesign go at its iPhone, even returning to the iPhone 5 design this year, was just silly. Is it any wonder that Apple sold only 51.2 million iPhones this year?"
Never mind that Apple didn't "return to iPhone 5" at any time during the quarter. iPhone SE didn't even go on sale until the quarter ended. iPhone SE is also obviously not Apple's new design for the future.
iPhone SE is not iPhone 7
As Harry McCracken, wrote in response for Fast Company, "I'm not even going to ask whether 51.2 million iPhones is a figure which can reasonably be preceded by the word 'only.' Here's another question, though: How can Farrell talk about Chinese consumers opting to buy HTC and Samsung phones instead of iPhones when the latest smartphone market-share stats for China show that Apple, even during a rough quarter, remains in the top five—and HTC and Samsung are nowhere to be found?"
Apple itself provided answers about why it sold "only" 52.2 million iPhones in the March quarter. One of the most significant was exchange rates, particularly related to Hong Kong, which inflated the price of all of Apple's imports into Greater China.
However, sales data from China for the quarter showed an overall slowdown in smartphone sales year-over-year. Xiaomi—one company that's been hyped as a competitive threat to Apple—was also reported to have lost sales volume and share.
That points to an economic downturn, combined with unfavorable currency exchange rates, as exerting a temporary impact on iPhone growth. Unlike PCs, which have clearly taken a prolonged, serious dive as consumers move to mobile devices, smartphones (and iPhone in particular) are not really being eaten up by a new competitor.
Further, unlike its PC peers, Apple has been reporting nearly consistent growth in Macs throughout the years of collapse seen in generic PCs. And at the same time, Apple has also built up iPad as a secondary computing platform, resulting in two very profitable computing businesses (Macs, among the top five PC vendors globally, and iPad, the number one tablet by a wide margin).
That provides a strong basis for supporting the view that Apple's iPhone business will also weather today's temporary setbacks at least as well as its strongest competitors, and be able to grow even as high volume, low end commodity rivals take turns imploding—as generic PC makers have been doing throughout Apple's entire history.
iPhones aren't slowing the same as PCs
While new fears are being invented about the prospect of iPhone 6 users growing satisfied with the phone they have over buying a new iPhone 7, the reality is that iPhones have a relatively short life cycle for two good reasons.
First off, unlike PCs iPhones have evolved rapidly and relentlessly. A PC from four years ago is not that outdated, but a 3 year old iPhone feels pretty long in the tooth. Even more importantly, PCs typically sit on a desk or are handled with care. People walk down the street with their phone in hand.
Just look around any bar and you see shattered screens everywhere. Drops and general day to day wear take a lot more out of our mobile computer-phones than previous generations of the personal computer were ever exposed to.
iPhone upgrades are a stable recurring revenue source. And most importantly, Apple is not just a hardware company but rather a platform company, so it has the power to rapidly enhance users' experiences with new evolutions of software and hardware integration in ways that other commodity phone producers can't on their own. Touch ID, Apple Pay and 3D Touch are easy examples.
Apple's Mac and iPad platforms lie somewhere in the middle. As with iPhone, Apple owns the entire platform and can rapidly introduce new integrated innovations. However, iPad is clearly showing itself to have a longer replacement cycle than iPhone, and Macs can stay useful for even longer.
One other issue uniquely faced by Macs: they're still powered by processors from Intel, which means that Apple's ability to introduce faster, more powerful models is contingent upon an outside partner, much the same way that generic PC makers also rely upon Microsoft, and Android licenses have to coordinate their direction with Google.
Apple vs Samsung: March quarter results
Samsung would like to have its own platform like Apple's iOS, which is why it invested in Bada and then Tizen. The problem is that it could not develop a platform that its customers wanted.
In the March quarter, Samsung saw year-over-year growth in its smartphone sales, but that's because the valuable Galaxy segment of its smartphone business is gradually rebuilding from a crushing defeat at the hands of iPhone 6 last year, rather than being compared to the tremendous upgrade cycle that iPhone 6 achieved, as Apple is.
Suggesting that Apple failed to grow while Samsung achieved growth is therefore among the most facile and willfully ignorant observations one can make about the smartphone market this quarter, even before recognizing that Samsung sold many more phones but earned less than a quarter what Apple did.
But there's also another difference between Apple's performance in the March quarter and Samsung's. One of the primary factors Samsung itself noted in its results was the earlier than usual launch of its Galaxy S7 flagship.
Apple launched iPhone 6s in the previous quarter, and did not begin selling the new iPhone SE until the quarter had ended. Additionally, Apple manufactured more iPhone 6s models in the December quarter this year. Last year, Apple also entered the March quarter with a inventory deficit.
This year, Apple did the opposite, and it had the effect of pulling some growth out of the March quarter and into December. That made the holiday quarter look better. Further, the launch of iPhone SE, as well as the new 7.9 inch flagship iPad Pro, both helped to delay sales into the June quarter.
That appears to have been a strategic decision intentionally made to allow the March quarter to bear most of the year's worst news. Tim Cook is frequently contrasted with Steve Jobs, but the latter made the same call back in 1997, writing off Apple's glut of inventory in one fell swoop, allowing the company to move forward without carrying a lingering problem.
That timing also means that throughout the rest of 2016, there will be increased focus on Apple's upcoming iPhone 7, and when it arrives Samsung's own flagship will be further away in the rear view mirror.
Additionally, when you look at China in particular, Apple's disappointing performance as a premium brand there looks much better when you contrast Samsung's position of not even being in the top five anymore.
As well, Samsung's smartphone portfolio is far further downmarket, meaning it is more vulnerable to commoditization, especially so because it runs the generic Android platform just like the other, cheaper Chinese brands.
Apple, Facebook and a new kind of growth: monthly active users
Despite a single quarter of iPhone sales decline, Apple's pool of active users is actually growing. We know this because Apple's iPhone 6s Q2 was as bigger than the iPhone 5s Q2 in 2014, and even a million units higher than the peak holiday launch Q1 sales iPhone 5s achieved.
In other words, while sales of new iPhones didn't increase year over year, growth of Apple's iPhone user base continued, fueled by the strongest influx ever of Android switchers.
Compare Facebook's growth in users. Facebook earns nothing from new users who begin using its platforms (Facebook, Instagram, WhatsApp). It actually spends significant resources acquiring new users and maintaining services and supporting the software they use.
Facebook's revenue comes from showing ads to those users, which helped it collect about $12 per user last year.
Now compare Apple's business: it brought in, on average, around $670 per user buying an iPhone in fiscal 2015 (231 million of them). It also brought in about $420 each on every iPad sold (55 million) and $1200 on each of 20 million Mac sales. But those all all just the buy-in to join Apple's platforms.
The Facebook-like revenue that Apple earned on its user base was another $20 billion, which includes sales of apps, AppleCare, iBooks, iTunes and new Apple Music subscriptions. Apple now has 13 million new subscribers who will each pay about $120 per year for that service.
Apple Music subscribers are worth $120, Facebook users worth $12
So even with fewer users—Facebook claims about 1.65 billion MAUs, compared to Apple's "over 1 billion" active devices or 782 million active iCloud users—Apple just reported quarterly Services revenue of over $6 billion, compared to the $5.38 billion in advertising revenue Facebook brought in.
And while Facebook earned $1.51 billion in the quarter, Apple's Services alone—with a profit margin estimated by Piper Jaffray to be around 60 percent—means that Apple earned about $3.6 billion from its own non-hardware business.
Apple is a much larger company than Facebook, so it shouldn't be surprising that it earned about twice as much servicing its own user base, even if that user base is smaller. However, Facebook's market valuation has now reached $363 billion, nearly 74 percent that of Apple's $492 billion market cap.
That ignores the fact that Facebook gets no "platform admission profits" from its users (that "other" $213 billion Apple earned from hardware sales last year), or that outside of the U.S., its ability to earn revenues off its user base drops off rapidly.
And while there are fears that Apple might have some issues in China, Facebook is completely blocked out of the second largest market for tech in the world, with no real hope of entry. China already has its own Facebooks operating there.
Facebook's valuation is anchored in expectations of growth. But is no growth envisioned for Apple's own, already larger and much more profitable Services segment?
Apple just added another 3 million Apple Music subscribers in the March quarter, who will contribute as much new revenue this year as 30 million new active Facebook users sitting in front of ads between their cat videos. Apple Music users are literally worth ten times as much.
Apple is building like Amazon, but earning 20x as much FCF along the way
Apple's data center in Maiden, N.C.
Additionally, Apple is said to have already inked a deal with Alphabet worth $400 to $600 million to transfer some AWS tasks to Google Cloud, preparing for a departure from Amazon's services this year.
How impressed can investors be with Amazon's ability to build commodity cloud infrastructure when Google, Microsoft and many others are desperately racing to build out their own commodity cloud infrastructure, driving prices into the basement like PC vendors in the 1990s?
Without any real profitability, Amazon is rampantly investing in a very expensive retail operation where order fulfillment costs are so high that the company is basically performing a volunteer service at the expense of investors.
It's also building a Prime content service, something more directly comparable to Apple's own Services segment, but again with a more detached user base that can freely defect to content subscriptions from Netflix, Google or, in the future, Apple's own.
Amazon's valuation? $308.71 billion, or 62 percent of the current valuation of Apple. Despite revenues of $29.13 billion, compared to Apple's $50.6 billion in quarterly revenue in its "bad Q2."
Clearly, investors don't think Apple has any potential to build any functional business from its increasingly large pile of money, and only envision the firm falling off the precipice into the chasm of doom that pundits have been describing each year since forever.
It will be important for Apple to more clearly articulate going forward that not only does it have a vast hardware business that operates like a wildly profitable version of Samsung (x4), but that it also has a Services business twice as profitable as Facebook, and is building out new cloud infrastructure to feed that enormous audience, rather than speculatively building commodity cloud infrastructure like Amazon.
If Apple can communicate that it isn't just a commodity hardware business like HP or Samsung, it demand a valuation that reflects that its past growth wasn't just a fluke of being in the right place at the right time, and that it didn't just accidentally end up with $10 billion in quarterly free cash flow.
Reads like a captain save a hoe article
Like 99% of the click bait trash that's been posted in here already.Reads like a captain save a hoe article
Or could it be that he's not trying to save your hoes?
Ethereum has had a really good year.
I stopped tracking Ethereum last year... fuck! I could have made some bread there (just read the @kayanation article )
Muthafuckaz on CNBC literally laughed "out loud" 16-17 years ago when Buffet auctioned off his wallet with a stock tip in the wallet.
The tip in the wallet was to buy REIT's. The dot.com run was in full swing. Folks were saying he was to old, he lost it. Blah blah blah...
Guess what ? The dot com bubble burst & REIT's went on an unprecedented run until the the economy crashed in 08-09. Buffet wasnt holding REIT's then, he cleaned up on value of those REIT's.
And he was waiting cash in hand to buy warrants on Goldman Sachs. When QE came in to bail out the banks. Guess what?
He made billion$$$ more.
Buffet buys value, not excitement.
AAPL @ 10 P/E is value. No the stock wont sore to $180 in 3 weeks anymore. But if you have cake , its getting a fresh coat of icing every 3 months. VALUE!
AAPL is wealthier than the US government. (hyperbole, I;m richer than the government technically)
The only real question is when & how they put that cash to use. They have almost half of their $500,000,000,000 market cap in cash.
Google any DOW 30 company that is near that in value.
^^^^^^
AAPL's largest shareholders sleeping @ night.
Buffets strategy is fundamental. It has nothing to do with " hot" trends.
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10-12 points before next earnings. Out short term dancing like sandman.
If you are not wash/sale approved... Skip
I fuck with rubbers. PUTS!
If you are not wash/sale approved... Skip
I fuck with rubbers. PUTS!
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Fitbit is buying Coin so it can make a fitness tracker that pays for things
Coin's smart credit card isn't part of the deal
By Chris Welch
on May 18, 2016 10:44 am
Fitbit, the biggest company in fitness tracking, has announced that it's acquiring Coin, the maker of a "smart" credit card that digitally holds all of your other credit cards on a single device. But Fitbit isn't buying Coin for its current Coin 2.0 gadget; that's actually being left out of the deal and Coin says its existing products can be used until their internal batteries die. Instead, Fitbit's primary interest in Coin is the company's work on wearable forms of payment.
It's not difficult to imagine using a future Fitbit tracker as a mobile wallet for on-the-go purchases; smartwatches already do it, after all. And the Up4, a product from Fitbit's big fitness rival Jawbone, can make mobile payments with American Express cards. In January, Coin announced that it would be working with MasterCard to help other companies build mobile payment NFC chips into a wider variety of devices.
Fitbit is being up front about the fact that it's too late to integrate Coin's technology into any other products coming out this year. In a press release, the company acknowledged "there are no plans to integrate Coin’s wearable payments technology into the 2016 Fitbit product roadmap." But that certainly leaves the door open for something next year, as the Coin purchase "accelerates Fitbit’s ability to develop an active NFC payment solution" that could eventually find its way into Fitbit's fitness tracker family.
The acquisition is already a done deal; Fitbit says it closed last week on May 12th. Coin Rewards and the Coin Developer Program are being shut down immediately, but existing Coin cards will remain under their one-year manufacturer's warranty and continue functioning until the battery gives out. No additional units will be produced.
http://www.theverge.com/2016/5/18/11700658/fitbit-coin-acquisition-announced
Coin's smart credit card isn't part of the deal
By Chris Welch
on May 18, 2016 10:44 am
Fitbit, the biggest company in fitness tracking, has announced that it's acquiring Coin, the maker of a "smart" credit card that digitally holds all of your other credit cards on a single device. But Fitbit isn't buying Coin for its current Coin 2.0 gadget; that's actually being left out of the deal and Coin says its existing products can be used until their internal batteries die. Instead, Fitbit's primary interest in Coin is the company's work on wearable forms of payment.
It's not difficult to imagine using a future Fitbit tracker as a mobile wallet for on-the-go purchases; smartwatches already do it, after all. And the Up4, a product from Fitbit's big fitness rival Jawbone, can make mobile payments with American Express cards. In January, Coin announced that it would be working with MasterCard to help other companies build mobile payment NFC chips into a wider variety of devices.
Fitbit is being up front about the fact that it's too late to integrate Coin's technology into any other products coming out this year. In a press release, the company acknowledged "there are no plans to integrate Coin’s wearable payments technology into the 2016 Fitbit product roadmap." But that certainly leaves the door open for something next year, as the Coin purchase "accelerates Fitbit’s ability to develop an active NFC payment solution" that could eventually find its way into Fitbit's fitness tracker family.
The acquisition is already a done deal; Fitbit says it closed last week on May 12th. Coin Rewards and the Coin Developer Program are being shut down immediately, but existing Coin cards will remain under their one-year manufacturer's warranty and continue functioning until the battery gives out. No additional units will be produced.
http://www.theverge.com/2016/5/18/11700658/fitbit-coin-acquisition-announced
Report: Apple orders supply chain to produce 72-78 million iPhone 7 units this year, significantly above analyst estimates
Benjamin Mayo 4 hours ago @bzamayo
A new report from Economic Daily News is shining some positive news on the Apple iPhone outlook, after several months of narratives regarding slowing iPhone growth. The report suggests that Apple has ordered production of around 72-78 million iPhone 7 devices this year, significantly above analyst estimates.
The 72-78 million target is in fact a record for iPhone production in recent years, implying that the iPhone 7 could return Apple’s smartphone division to sales growth later in the year. Apple supply chain partners are booming today in the markets following the news; Pegatron stock is currently up 10%. Consensus from analysts had expected production circa 65 million, so a jump in ten million units is significant.
Foxconn will continue to be the primary manufacturer for iPhone 7, with Pegatron assisting as usual. Beyond assembly, these companies are also expected to participate in dual camera production. Rumors about iPhone 7 have run rampant in the last few months but a significant external design change does not appear to be on the cards. Case and schematic leaks present an iPhone 7 design that largely mirrors the iPhone 6s, with various camera upgrades and redesigned antenna lines on the back side.
Internally, the phone will no doubt feature many upgrades to components such as Apple’s A10 processor (faster CPU, GPU), an increase in RAM to 3GB and a possible 256 GB storage option. There has also been several rumors that the iPhone 7 will be waterproof for the first time. A major external design revamp is currently pinpointed for 2017 with an all-glass AMOLED ‘iPhone 8’.
The company records its first non-record revenue quarter for the first time in 13 years last month, mainly due to to slowing iPhone sales year-over-year. Assuming the Economic Daily report turns out to be true, Apple is looking to return to iPhone growth with its next-generation model. Apple is expected to announce the iPhone 7 at a media press event in the fall, likely around September.
http://9to5mac.com/2016/05/23/repor...s-year-significantly-above-analyst-estimates/
Benjamin Mayo 4 hours ago @bzamayo
A new report from Economic Daily News is shining some positive news on the Apple iPhone outlook, after several months of narratives regarding slowing iPhone growth. The report suggests that Apple has ordered production of around 72-78 million iPhone 7 devices this year, significantly above analyst estimates.
The 72-78 million target is in fact a record for iPhone production in recent years, implying that the iPhone 7 could return Apple’s smartphone division to sales growth later in the year. Apple supply chain partners are booming today in the markets following the news; Pegatron stock is currently up 10%. Consensus from analysts had expected production circa 65 million, so a jump in ten million units is significant.
Foxconn will continue to be the primary manufacturer for iPhone 7, with Pegatron assisting as usual. Beyond assembly, these companies are also expected to participate in dual camera production. Rumors about iPhone 7 have run rampant in the last few months but a significant external design change does not appear to be on the cards. Case and schematic leaks present an iPhone 7 design that largely mirrors the iPhone 6s, with various camera upgrades and redesigned antenna lines on the back side.
Internally, the phone will no doubt feature many upgrades to components such as Apple’s A10 processor (faster CPU, GPU), an increase in RAM to 3GB and a possible 256 GB storage option. There has also been several rumors that the iPhone 7 will be waterproof for the first time. A major external design revamp is currently pinpointed for 2017 with an all-glass AMOLED ‘iPhone 8’.
The company records its first non-record revenue quarter for the first time in 13 years last month, mainly due to to slowing iPhone sales year-over-year. Assuming the Economic Daily report turns out to be true, Apple is looking to return to iPhone growth with its next-generation model. Apple is expected to announce the iPhone 7 at a media press event in the fall, likely around September.
http://9to5mac.com/2016/05/23/repor...s-year-significantly-above-analyst-estimates/
Apple CEO Tim Cook reveals the Apple Watch's 'holy grail'
By Kif Leswing1 hour ago 5/24/2016
Apple CEO Tim Cook spoke about Apple's health ambitions at the Startup Fest Europe conference in Amsterdam on Tuesday.
He confirmed that Apple is "really focused" on health, and that the Apple Watch is the company's ticket into the massive but complicated healthcare market.
"I love the watch. One day, this is my prediction, we will look back and we will wonder: how can I ever have gone without the Watch? Because the holy grail of the watch is being able to monitor more and more of what's going on in the body," Cook said during an interview with former European Competition Commissioner Neelie Kroes. "It's not technologically possible to do it today to the extent that we can imagine, but it will be."
"The things that interest us the most are things where we can bring our ability to integrate hardware, software, services into something that's magical, and enriches people in some way. If you look at some of the things that do not drive revenue, but have massive interest in them from our teams, health is very much one of those," Cook said. "We've done some things with the Apple Watch to encourage activity, but we've also gotten interested in research, and launched ResearchKit."
"We believe that health is something that is a huge problem in the world, and we think it is ripe for simplicity and a new view, and we'd like to contribute to that," Cook said.
It's starting to become clear that the Apple Watch is a long-term play to break into the healthcare space.
Last month, Silicon Valley analyst Tim Bajarin said that Apple executives were motivated by former Apple CEO Steve Jobs' battle with pancreatic cancer. They've decided to take on the healthcare system at large, using technology to bridge the gap between a person and their doctors, and they're using the Apple Watch to do it.
Apple continues to hire scores of professionals with healthcare and medical experience, including registered nurses that staff a research lab. The company now has three toolkits — ResearchKit, HealthKit, and CareKit — for making health-related apps. Clearly Apple is making a major investment in health.
"In my view, if Apple is still genius, what you're seeing now with ResearchKit and CareKit is the iPod, and then the iPod Video and the iPhone is yet to come," Ahmed Albaiti, CEO of digital health consultancy Medullan, told Business Insider.
Now Apple's CEO admits the Watch's "holy grail" is adding more health sensors. That's close to confirmation that Apple is working on adding sensors like an non-invasive glucometer to future versions of the Apple Watch and will continue to take on the healthcare industry.
"If you think about some of society's biggest problems and challenges, one of the ones that we are really focused on is health," Cook said.
http://www.onemorething.nl/2016/05/kijk-vanaf-1100-live-tim-cook-startup-fest-europe/
By Kif Leswing1 hour ago 5/24/2016Apple CEO Tim Cook spoke about Apple's health ambitions at the Startup Fest Europe conference in Amsterdam on Tuesday.
He confirmed that Apple is "really focused" on health, and that the Apple Watch is the company's ticket into the massive but complicated healthcare market.
"I love the watch. One day, this is my prediction, we will look back and we will wonder: how can I ever have gone without the Watch? Because the holy grail of the watch is being able to monitor more and more of what's going on in the body," Cook said during an interview with former European Competition Commissioner Neelie Kroes. "It's not technologically possible to do it today to the extent that we can imagine, but it will be."
"The things that interest us the most are things where we can bring our ability to integrate hardware, software, services into something that's magical, and enriches people in some way. If you look at some of the things that do not drive revenue, but have massive interest in them from our teams, health is very much one of those," Cook said. "We've done some things with the Apple Watch to encourage activity, but we've also gotten interested in research, and launched ResearchKit."
"We believe that health is something that is a huge problem in the world, and we think it is ripe for simplicity and a new view, and we'd like to contribute to that," Cook said.
It's starting to become clear that the Apple Watch is a long-term play to break into the healthcare space.
Last month, Silicon Valley analyst Tim Bajarin said that Apple executives were motivated by former Apple CEO Steve Jobs' battle with pancreatic cancer. They've decided to take on the healthcare system at large, using technology to bridge the gap between a person and their doctors, and they're using the Apple Watch to do it.
Apple continues to hire scores of professionals with healthcare and medical experience, including registered nurses that staff a research lab. The company now has three toolkits — ResearchKit, HealthKit, and CareKit — for making health-related apps. Clearly Apple is making a major investment in health.
"In my view, if Apple is still genius, what you're seeing now with ResearchKit and CareKit is the iPod, and then the iPod Video and the iPhone is yet to come," Ahmed Albaiti, CEO of digital health consultancy Medullan, told Business Insider.
Now Apple's CEO admits the Watch's "holy grail" is adding more health sensors. That's close to confirmation that Apple is working on adding sensors like an non-invasive glucometer to future versions of the Apple Watch and will continue to take on the healthcare industry.
"If you think about some of society's biggest problems and challenges, one of the ones that we are really focused on is health," Cook said.
http://www.onemorething.nl/2016/05/kijk-vanaf-1100-live-tim-cook-startup-fest-europe/
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How Apple Watch became the iPod of the future
By Daniel Eran Dilger
Thursday, May 19, 2016, 12:42 pm PT (03:42 pm ET)
While ridiculed by many as a flop and often misunderstood as a product, Apple Watch has very successfully worked to turn around the fortunes of Apple's Other Products segment, essentially becoming the modern iPod for the next decade. Here's how.
iPod: a tethered Mac peripheral
Almost fifteen years ago, Steve Jobs introduced iPod, a self contained "pod" for taking music from your Mac's iTunes library along with you. While music playback was its primary feature, iPods also let users carry a synced copy of their contacts and calendar, then gained photo support, video playback and eventually the ability to play simple games in 2006.
As a product, iPod took nearly four years to develop into an outstanding smash success. After four years of blockbuster iPod sales, Apple applied many of the manufacturing lessons it had learned from building mass market iPods to produce the first iPhone in 2007, which unlike earlier iPods ran a scaled down version of Apple's desktop Mac OS, using a mobile-optimized UI with the ability to run powerful "desktop class" native apps.
Even as iPhone sales rapidly grew, Apple kept developing new iPods in parallel. The iPod nano, first released in 2005, shrunk down into a "fat" 3G form factor in 2007 with video playback capabilities.
After returning to its original stick design for the next two years, Apple reintroduced a compact, new square 6G iPod nano in 2010 (below), featuring a touchscreen display similar to the iPhone and iPod touch (albeit not running iOS).
"It's so small," Steve Jobs announced, "we're able to put a clip on it too, so it's instantly wearable."
The new wearable iPod nano let users tap and swipe the display for navigation, and Apple also focused attention on its fitness tracking capabilities, oriented around an accelerometer for tracking steps.
The original Apple watch was an iPod nano
Third parties—not Apple—created the first watch band for the 6th generation iPod nano. However, the next year Apple not only noticed the brewing popularity of wearing the new iPod nano as a watch, but also embraced it.
Phil Schiller, then Apple's senior vice president of Worldwide Product Marketing, introduced a refreshed 6G iPod nano in 2011, noting the availability of third party wrist bands and stating that the company "thought that was really fun," so it added 16 clock faces users could choose between when wearing it as a watch.
"Why not, right?" Schiller asked the crowd.
The original Apple Watch was an iPod nano
The next year, however, Apple abruptly discontinued the watch-like iPod nano and replaced it with a new model that looked like a shrunken down iPhone, featuring basic apps (lacking an App Store) that appeared as round icons (and still not running iOS). Apple continues to sell that 7th generation iPod nano model, which first introduced in 2012.
The case of the disappearing iPod nano watch
The 2012 realignment of iPod models appeared—at the time—to be a simple refocusing of resources on iPhone and newly introduced iPad models. Interest in basic iPods had already started to wane. Sales of iPods had peaked around 2009, and the majority of remaining demand focused upon the iOS-based iPod touch, a model that helped convince many feature phone users—along with Symbian, Blackberry and Windows Mobile users—to upgrade to an iPhone with the same UI and features.
However, if you listen to what Apple executives later said about Apple Watch, you'll note that its development began "years" before its announcement in September 2014.
Apple hired Adobe's chief technology officer Kevin Lynch in early 2013, but at that time, little was known about what he'd be doing apart from the fact that he had significant experience in user interface design.
Lynch had worked on UI for such apps as FrameMaker and Dreamweaver, and prior to that, developing user interface elements for early mobile devices at General Magic (a portable computing company Apple spun off in 1990 to focus its efforts on the Newton Message Pad) as well as platform development experience related to Adobe Flash middleware.
Shortly before Lynch was hired in early 2013, Apple announced an executive shakeup at the end of 2012 that resulted in the ouster of Scott Forstall as the head of iOS development. It also resulted in the creation of a new Technology group led by executive hardware guru Bob Mansfield, who had previously announced plans to retire that year.
Tim Cook had initially retained Mansfield in an advisory role (referring to him as "the top silicon expert in the world"), then convinced Mansfield to stay for at least another two years to lead Technology; Lynch later noted that he had been hired to report to Mansfeld before even knowing what he'd be working on. It was, of course, Apple Watch, which had been conceptualized but not yet even reached hardware prototyping.
The timing of these events makes it clear that Apple began realizing the potential of a watch wearable in 2011, and that evolved into an understanding that it would need to be more than an iPod nano strapped to the user's wrist.
While iPod had started out as a Mac-tethered peripheral for syncing music and other content on the go, by 2011 it was clear that the entire future was going mobile, and that a desirable wearable product would need to do more than just carry music and do the same kinds of fitness tracking that a phone could do by itself.
The wearable iPod of the future would need to start off tethered to iPhone, and would need to perform key tasks better than an iPhone could by itself. As a watch, it would need to be able to compete for attention against existing fashion watches, not merely be a block of technology strapped to the wrist of a minority of tech enthusiasts.
Metamorphosis of the wearable iPod
Rather than incrementally developing iPod nano into a watch in public view, Apple reverted to selling an embellished version of its original iPod nano form factor and took its watch development behind closed doors. It developed a series of technologies required to release a new iPod-like wearable as a real watch, one that a broad spectrum of users would want to wear, rather than just a subset of early technology adopters.
That included materials and manufacturing capabilities used by the premium watch industry, along with the development of a series of bands spanning the gamut from fashionable and classy to casual and athletic, in order to draw broad appeal. By offering a range of watch band types in a shifting palette of colors, Apple could also create a cyclical new fashion-oriented set of accessories that Apple Watch users could regularly buy, far more frequently than they might replace their watch outright.
Apple Watch also leveraged the work already done to bring the Mac OS platform to iPhone. Just as iOS devices required a clean UI rethinking and an overhaul of how apps would work on a smaller, mobile, always-networked device, Apple Watch created new interface conventions required to deliver a wrist worn computer with a usable interaction model that could provide information at a glance. That was necessary both because it's tiring to hold your arm up for an extended period of time, and because of the limitations inherent in a battery-driven computer running a powerful operating system.
The original Apple Watch makes a series of engineering design choices intended to achieve all day battery life, while still supporting sophisticated features that basic iPods lacked, including the Bluetooth-based Continuity features that first debuted at WWDC 2014, just months before Apple Watch was launched.
The combination of high end materials, water resistance, heart monitoring fitness tracking and Bluetooth Continuity for remotely answering your phone, replying to text messages, sending Digital Touch, following Maps directions, getting notifications, transacting with Apple Pay and accessing Siri resulted in a product that generated significant interest at prices ranging from $349 to $1099 (not counting the high end, solid gold Edition models priced between $10,000 and $17,000).
The much simpler iPod nano had been selling for $129-149—in increasingly smaller volumes—back in 2011. In its first year, Apple Watch (according to Canalys estimates) sold 12 million units, comparable to the number of Macs Apple sold over those three quarters, or nearly as many units as the total number of iPods sold in 2014, the year before Apple Watch went on sale.
In fiscal 2015, Apple stopped reporting iPod unit sales, and began grouping them together with other products like Apple TV, accessories and the new Apple Watch. That same year, Apple's other products segment reversed its trajectory from a 17 percent annual decline to 20 percent annual growth, largely due to the reinvention of the iPod nano into today's Apple Watch.
Last spring IDC press releases outrageously claimed that the Apple Watch market entry generating $1.44 billion in a quarter was merely "within striking distance of the market leader," when Fitbit actually had revenues of just $390 million. It also claimed Apple Watch was about on par with Xiaomi, which had at most collected $77 million.
While apparently intended to make Apple Watch look bad, IDC's tireless work to emphasize worthless data while minimizing the most significant information in the press releases it generates for public consumption appears to have blunted rivals' interest in aggressively pursuing the smartwatch market, giving Apple more breathing room to dominate the real market while competitors seek to dump out large numbers of low end wrist strap "wearables" with little potential value.
Apple Watch a sign of a responsive, prudently risk taking company
Apple's executives—and in particular Cook—have famously noted that the company doesn't fear cannibalization, and instead embraces change rather than seeking to resist clear demand trends in an effort to maintain a status quo. It is well known how the company migrated its focus from iPod to iPhone, for example, and today it offers iPad Pro models without any apparent political infighting between an iPad group and a separate Mac division.
When it launched Apple Watch, many observers wondered why the company had spent significant efforts developing a single new product, one that didn't appear to have the same unit sales potential as iPhone or even iPad. Looking at the origin of Apple Watch, it becomes more clear that it is closer to being a revamped continuation of iPod than an entirely new concept.
Further, rather than being a huge, high risk, speculative investment, Apple Watch borrows heavily from Apple's existing core competencies and technologies, while also necessitating the creation of prerequisite technologies that benefit its other product lines, including Continuity and Apple Pay.
Apple Watch also taught the company how to sell a new class of products, one that is equal parts fashion and technology, and which requires a different type of retail experience. Those lessons will help the company venture into new markets. Automotive sales are far closer to the sales model of luxury watches than selling boxes of electronics.
And finally, Apple Watch holds true to the philosophy of Steve Jobs, who once stated, "I think if you do something and it turns out pretty good, then you should go do something else wonderful, not dwell on it for too long. Just figure out what's next."
Apple could have held onto the past and kept spinning its wheels introducing a broad portfolio of new, slightly different iPod models. Instead, it has moved on with a far higher tier of ultramobile device, one that casts a halo of luxury over its other products while tightly integrating with them, bringing the concept of a mobile pod into a more sophisticated and inherently more valuable market, while also pushing forward goals related to health and fitness.
Even if Apple Watch were only moderately profitable, it would already be an outstanding accomplishment and a strategic success. We actually know that Apple Watch has been far more than that however.
Last year alone, it generated around $7 billion in revenue with high margins. That's comparable with the performance of Amazon Web Services cloud business, and by itself as a product is already far more valuable than the entire hardware business of Amazon Fire, Google Nexus, Alphabet Nest, or Microsoft Surface.
At its Worldwide Developer Conference next month, Apple will be introducing more information about the future of Apple Watch and watchOS, which we discuss in the article Anticipating WWDC 2016: what's ahead for Apple Watch 2 and watchOS 3.
http://appleinsider.com/articles/16/05/19/how-apple-watch-became-the-ipod-of-the-future
By Daniel Eran Dilger
Thursday, May 19, 2016, 12:42 pm PT (03:42 pm ET)
While ridiculed by many as a flop and often misunderstood as a product, Apple Watch has very successfully worked to turn around the fortunes of Apple's Other Products segment, essentially becoming the modern iPod for the next decade. Here's how.
iPod: a tethered Mac peripheral
Almost fifteen years ago, Steve Jobs introduced iPod, a self contained "pod" for taking music from your Mac's iTunes library along with you. While music playback was its primary feature, iPods also let users carry a synced copy of their contacts and calendar, then gained photo support, video playback and eventually the ability to play simple games in 2006.
As a product, iPod took nearly four years to develop into an outstanding smash success. After four years of blockbuster iPod sales, Apple applied many of the manufacturing lessons it had learned from building mass market iPods to produce the first iPhone in 2007, which unlike earlier iPods ran a scaled down version of Apple's desktop Mac OS, using a mobile-optimized UI with the ability to run powerful "desktop class" native apps.
Even as iPhone sales rapidly grew, Apple kept developing new iPods in parallel. The iPod nano, first released in 2005, shrunk down into a "fat" 3G form factor in 2007 with video playback capabilities.
After returning to its original stick design for the next two years, Apple reintroduced a compact, new square 6G iPod nano in 2010 (below), featuring a touchscreen display similar to the iPhone and iPod touch (albeit not running iOS).
"It's so small," Steve Jobs announced, "we're able to put a clip on it too, so it's instantly wearable."
The new wearable iPod nano let users tap and swipe the display for navigation, and Apple also focused attention on its fitness tracking capabilities, oriented around an accelerometer for tracking steps.
The original Apple watch was an iPod nano
Third parties—not Apple—created the first watch band for the 6th generation iPod nano. However, the next year Apple not only noticed the brewing popularity of wearing the new iPod nano as a watch, but also embraced it.
Phil Schiller, then Apple's senior vice president of Worldwide Product Marketing, introduced a refreshed 6G iPod nano in 2011, noting the availability of third party wrist bands and stating that the company "thought that was really fun," so it added 16 clock faces users could choose between when wearing it as a watch.
"Why not, right?" Schiller asked the crowd.
The original Apple Watch was an iPod nano
The next year, however, Apple abruptly discontinued the watch-like iPod nano and replaced it with a new model that looked like a shrunken down iPhone, featuring basic apps (lacking an App Store) that appeared as round icons (and still not running iOS). Apple continues to sell that 7th generation iPod nano model, which first introduced in 2012.
The case of the disappearing iPod nano watch
The 2012 realignment of iPod models appeared—at the time—to be a simple refocusing of resources on iPhone and newly introduced iPad models. Interest in basic iPods had already started to wane. Sales of iPods had peaked around 2009, and the majority of remaining demand focused upon the iOS-based iPod touch, a model that helped convince many feature phone users—along with Symbian, Blackberry and Windows Mobile users—to upgrade to an iPhone with the same UI and features.
However, if you listen to what Apple executives later said about Apple Watch, you'll note that its development began "years" before its announcement in September 2014.
Apple hired Adobe's chief technology officer Kevin Lynch in early 2013, but at that time, little was known about what he'd be doing apart from the fact that he had significant experience in user interface design.
Lynch had worked on UI for such apps as FrameMaker and Dreamweaver, and prior to that, developing user interface elements for early mobile devices at General Magic (a portable computing company Apple spun off in 1990 to focus its efforts on the Newton Message Pad) as well as platform development experience related to Adobe Flash middleware.
Shortly before Lynch was hired in early 2013, Apple announced an executive shakeup at the end of 2012 that resulted in the ouster of Scott Forstall as the head of iOS development. It also resulted in the creation of a new Technology group led by executive hardware guru Bob Mansfield, who had previously announced plans to retire that year.
Tim Cook had initially retained Mansfield in an advisory role (referring to him as "the top silicon expert in the world"), then convinced Mansfield to stay for at least another two years to lead Technology; Lynch later noted that he had been hired to report to Mansfeld before even knowing what he'd be working on. It was, of course, Apple Watch, which had been conceptualized but not yet even reached hardware prototyping.
The timing of these events makes it clear that Apple began realizing the potential of a watch wearable in 2011, and that evolved into an understanding that it would need to be more than an iPod nano strapped to the user's wrist.
While iPod had started out as a Mac-tethered peripheral for syncing music and other content on the go, by 2011 it was clear that the entire future was going mobile, and that a desirable wearable product would need to do more than just carry music and do the same kinds of fitness tracking that a phone could do by itself.
The wearable iPod of the future would need to start off tethered to iPhone, and would need to perform key tasks better than an iPhone could by itself. As a watch, it would need to be able to compete for attention against existing fashion watches, not merely be a block of technology strapped to the wrist of a minority of tech enthusiasts.
Metamorphosis of the wearable iPod
Rather than incrementally developing iPod nano into a watch in public view, Apple reverted to selling an embellished version of its original iPod nano form factor and took its watch development behind closed doors. It developed a series of technologies required to release a new iPod-like wearable as a real watch, one that a broad spectrum of users would want to wear, rather than just a subset of early technology adopters.
That included materials and manufacturing capabilities used by the premium watch industry, along with the development of a series of bands spanning the gamut from fashionable and classy to casual and athletic, in order to draw broad appeal. By offering a range of watch band types in a shifting palette of colors, Apple could also create a cyclical new fashion-oriented set of accessories that Apple Watch users could regularly buy, far more frequently than they might replace their watch outright.
Apple Watch also leveraged the work already done to bring the Mac OS platform to iPhone. Just as iOS devices required a clean UI rethinking and an overhaul of how apps would work on a smaller, mobile, always-networked device, Apple Watch created new interface conventions required to deliver a wrist worn computer with a usable interaction model that could provide information at a glance. That was necessary both because it's tiring to hold your arm up for an extended period of time, and because of the limitations inherent in a battery-driven computer running a powerful operating system.
The original Apple Watch makes a series of engineering design choices intended to achieve all day battery life, while still supporting sophisticated features that basic iPods lacked, including the Bluetooth-based Continuity features that first debuted at WWDC 2014, just months before Apple Watch was launched.
The combination of high end materials, water resistance, heart monitoring fitness tracking and Bluetooth Continuity for remotely answering your phone, replying to text messages, sending Digital Touch, following Maps directions, getting notifications, transacting with Apple Pay and accessing Siri resulted in a product that generated significant interest at prices ranging from $349 to $1099 (not counting the high end, solid gold Edition models priced between $10,000 and $17,000).
The much simpler iPod nano had been selling for $129-149—in increasingly smaller volumes—back in 2011. In its first year, Apple Watch (according to Canalys estimates) sold 12 million units, comparable to the number of Macs Apple sold over those three quarters, or nearly as many units as the total number of iPods sold in 2014, the year before Apple Watch went on sale.
In fiscal 2015, Apple stopped reporting iPod unit sales, and began grouping them together with other products like Apple TV, accessories and the new Apple Watch. That same year, Apple's other products segment reversed its trajectory from a 17 percent annual decline to 20 percent annual growth, largely due to the reinvention of the iPod nano into today's Apple Watch.
Last spring IDC press releases outrageously claimed that the Apple Watch market entry generating $1.44 billion in a quarter was merely "within striking distance of the market leader," when Fitbit actually had revenues of just $390 million. It also claimed Apple Watch was about on par with Xiaomi, which had at most collected $77 million.
While apparently intended to make Apple Watch look bad, IDC's tireless work to emphasize worthless data while minimizing the most significant information in the press releases it generates for public consumption appears to have blunted rivals' interest in aggressively pursuing the smartwatch market, giving Apple more breathing room to dominate the real market while competitors seek to dump out large numbers of low end wrist strap "wearables" with little potential value.
Apple Watch a sign of a responsive, prudently risk taking company
Apple's executives—and in particular Cook—have famously noted that the company doesn't fear cannibalization, and instead embraces change rather than seeking to resist clear demand trends in an effort to maintain a status quo. It is well known how the company migrated its focus from iPod to iPhone, for example, and today it offers iPad Pro models without any apparent political infighting between an iPad group and a separate Mac division.
When it launched Apple Watch, many observers wondered why the company had spent significant efforts developing a single new product, one that didn't appear to have the same unit sales potential as iPhone or even iPad. Looking at the origin of Apple Watch, it becomes more clear that it is closer to being a revamped continuation of iPod than an entirely new concept.
Further, rather than being a huge, high risk, speculative investment, Apple Watch borrows heavily from Apple's existing core competencies and technologies, while also necessitating the creation of prerequisite technologies that benefit its other product lines, including Continuity and Apple Pay.
Apple Watch also taught the company how to sell a new class of products, one that is equal parts fashion and technology, and which requires a different type of retail experience. Those lessons will help the company venture into new markets. Automotive sales are far closer to the sales model of luxury watches than selling boxes of electronics.
And finally, Apple Watch holds true to the philosophy of Steve Jobs, who once stated, "I think if you do something and it turns out pretty good, then you should go do something else wonderful, not dwell on it for too long. Just figure out what's next."
Apple could have held onto the past and kept spinning its wheels introducing a broad portfolio of new, slightly different iPod models. Instead, it has moved on with a far higher tier of ultramobile device, one that casts a halo of luxury over its other products while tightly integrating with them, bringing the concept of a mobile pod into a more sophisticated and inherently more valuable market, while also pushing forward goals related to health and fitness.
Even if Apple Watch were only moderately profitable, it would already be an outstanding accomplishment and a strategic success. We actually know that Apple Watch has been far more than that however.
Last year alone, it generated around $7 billion in revenue with high margins. That's comparable with the performance of Amazon Web Services cloud business, and by itself as a product is already far more valuable than the entire hardware business of Amazon Fire, Google Nexus, Alphabet Nest, or Microsoft Surface.
At its Worldwide Developer Conference next month, Apple will be introducing more information about the future of Apple Watch and watchOS, which we discuss in the article Anticipating WWDC 2016: what's ahead for Apple Watch 2 and watchOS 3.
http://appleinsider.com/articles/16/05/19/how-apple-watch-became-the-ipod-of-the-future
I can't believe I'm been sleeping on Ethereum this hard. I remember when I first read it out... I was like...sounds promising but I doubted they would deliver and thought the name was stupid
I can't believe I'm been sleeping on Ethereum this hard. I remember when I first read it out... I was like...sounds promising but I doubted they would deliver and thought the name was stupid
yeah my eyes are wide open on this one
Man. I'm still disgusted by knowing about bitcoin relatively early and just sitting on the sidelines.. could have made so much money
Man. I'm still disgusted by knowing about bitcoin relatively early and just sitting on the sidelines.. could have made so much money
other opps will come around though, we are young enough
Apple's iPhone is no Blackberry: a closer look at AI and the world's biggest company
By Daniel Eran Dilger
Monday, May 30, 2016, 04:42 pm PT (07:42 pm ET)
Last week, developer Marco Arment suggested in a blog posting that if Apple were to fail to grasp the potential for voice-based Artificial Intelligence to change the nature of smartphone demand, the company's core revenue generator could suffer the same fate as RIM's Blackberry, which a decade prior had similarly failed to see the importance of iPhone's advanced multitouch experience until it was too late to do anything about it.
Before the iPhone, Samsung had to copy RIM's Blackberry
Arment's think piece described Blackberry (which a decade ago was known as RIM) as the "king of smartphones" prior to the iPhone's introduction in 2007, writing that "they were the best and most successful at what most smartphones were for at the time: email and phone calls."
He then posited that "today, Amazon, Facebook, and Google are placing large bets on advanced AI, ubiquitous assistants, and voice interfaces, hoping that these will become the next thing that our devices are for. If they're right — and that's a big 'if' — I'm worried for Apple."
He added "... if Google's right, there's no quick fix. It won't be enough to buy Siri's creators again or partner with Yelp for another few years."
There are some core problems with piece, but the biggest one is that Biz Carson of Business Insider latched onto it to drive a fear mongering amplification for her own clickbait audience.
If Carson had put some thought into critically examining what Arment wrote, she might have realized how fragile the entire idea actually was. Instead, she just replicated it for her own audience next to her site's own ads (a sort of Google Verbatim Appropriation, you might say).
Oh dear, is Tim Cook worried too?
Peak iPhone Panic
Stories of panic that paint a credible path to Apple's rapid demise have always been popular as link-bait, but today the attraction is simply off the charts, due to the fact that the Internet has shifted from an alternative way for print and television journalists to distribute their ideas into an ad-supported trough where the dumbest ideas which can generate the most outrage best serve as co-conduits for paid messages.
Welcome to Google's ad internet, where the New Content is ads and the headlines are just tricking you into reading them! This problem is tightly bound to another problem: a complete ignorance of why Apple, not Google, is generating so much free cash flow and how Apple ever got to its current position when everyone knows, via Google's ad supported news channels, that Android is winning!
Fortunately both ideas are so tightly bound together that they can be dissected in one article.
Peak iPhone? The consumption of computers is not over
There appears to be a broad consensus among pundits that iPhone growth is going away, and that without selling increasing volumes of iPhones each quarter—and without Steve Jobs to invent some new product category—Apple will be unable to maintain its position as the world's largest and most valuable tech company.
The idea that Apple could become a Blackberry is therefore a provocatively attractive one. However, once you begin taking a closer look at the history of Apple and RIM, the surface comparison begins to implode under the weight of facts.
First, take a look at where Apple was prior to the iPhone. Coincidentally, criticism of Apple back then was shockingly similar to where it is again today. One might say this all happened before.
Remember Peak iPod?
A year or two prior the point of Peak iPod—which in retrospect we know actually occured in 2008, based on unit sales figures—the storyline of Apple's impending demise began to orbit around how poorly positioned the company was because in comparison to iPods its Mac business almost didn't matter anymore (iPods were outselling Macs by 10x), and the core value of iPods at the time was centered on their ability to play MP3s, a feature that an emerging number of smartphones (and even feature phones) had already begun to deliver.
Apple is going to be stuck trying to sell iPods to a market already satisfied with their MP3-playing phones, pundits claimed in near perfect unison. Additionally, they claimed that Apple had no ability to enter the phone business because the market already had many experienced, entrenched players who were much larger than Apple and would offer fierce competition to any new upstart trying to muscle into their territory.
In hindsight, and equipped with our knowledge of how remarkably well Apple entered and then mastered the phone business, the idea that Apple would remain wedded to the past and fail to translate its past success into the future seems so wrong that it's almost hard to believe that anyone ever thought that.
Apple had previously made a series of transitions that were virtually unprecedented in the industry. It had switched the Mac's chip architecture twice already, once to PowerPC and then to Intel. It had also shifted its Mac platform OS from an embedded System Software to a "modern" Unix based OS using advanced developer frameworks and a futuristic vector graphics compositing engine.
And in iPods, it had also transitioned from high end hard-drive based designs to new generations of solid state flash storage, deftly conquering new segments of the market. And while doing that, it fended off competitive threats from much larger companies, ranging from the Walkman-originator Sony to Microsoft and its Windows Media Player licensees, which were almost universally expected to gobble up Apple's iPod sales via commodity devices.
Apple should have earned at least a little benefit of the doubt. Today however, that's even more true.
VR, AI and Peak iPhone
Yet virtually the exact same scenario is playing out today, where we are increasingly told that "everyone who wants an iPhone already has one," (even though that is obviously false) and that the future will be delivered by companies who are working on Virtual Reality and/or Artificial Intelligence concepts in public view, companies that have already shown some initial prototypes and even delivered consumer products fit for early adopters.
Those same companies also previously introduced NFC payments, fingerprint scanners, music subscriptions, voice services and a variety of other concepts years in advance of Apple, without actually holding on to their lead once Apple began competing in those same fields. In part, that's because Apple worked on its own solutions in private, and delivered them once they were ready.
There are some other key differences between today and decade ago. This time around, Apple is bigger and more powerful than every other company in the industry, even while it remains unique in its ability to make money (in PCs, phones, tablets, smartwatches, Apple sells virtually all of the products that are actually profitable).
In 2006, there were a broad array of profitable smartphone makers; building smartphones was considered to basically be picking money off trees. Today, most of the smartphone makers are losing money.
Apple doesn't look like Blackberry at all
Also, the product that is now supposedly going to turn Apple into a Blackberry is not an existing device that virtually everyone already owns but which Apple does not make (a 2006 mobile phone), but rather an application of the device that everyone owns and which Apple already makes.
Apple's iPhone overwhelmingly dominates premium smartphone sales. No previous competing feature has ever threatened that, despite many being clearly valuable (such as having support for LTE mobile networks, a feature Apple belatedly joined years after its rivals). A key reason is Apple's vast scale.
When Apple launches a new iPhone, it now sells about 70 million during its launch quarter (most of those are the newest model; all of them are premium smartphones). When Apple's next largest competitor launches a new Galaxy S, it ships out 10 million or fewer in the launch quarter, along with a huge volume of devices that are not premium smartphones capable of demanding a significant profit.
Samsung's premium smartphone sales peaked a few years ago and its IM Mobile profits haven't recovered since. Samsung has experienced two years' worth of quarters where profits haven't come close to what they once were at Peak Galaxy, a fact that nobody likes to talk about (because why kick a company when its down?).
Apple has had one quarter that was down from its year-ago surge related to the mega-launch of iPhone 6. It's currently impossible to write about Apple without noting that Apple's Q1 sales (and perhaps its next quarter of sales) were down, the first time this has happened since something like 2003.
But it's okay to kick Apple because it's not really down. Even with a temporary drop in quarterly sales, Apple still makes more money than the rest of the smartphone industry combined. That's an important detail.
Source: Canaccord Tenuity
Apple's sales would have to collapse by about 75 percent for Apple to even be at the level of Samsung. A few years ago, Samsung Mobile shipped twice as many phones as Apple but made about the same amount of money. Today it sells about half again as many more, but brings in profits that are a quarter of Apple's.
Apple is not in a downward spiral. Comparing Apple with its current competition and looking for ways Apple could be outmaneuvered requires some seriously naive leaps of logic, simply because Apple is not just larger, but also far better managed, focused and competent at delivering its objectives.
Five years of iPhone
That's a radically different competitive environment from 2006. Back then, Apple's annual profits were $2.4 billion, and the company was valued at around $60 billion, roughly equal to Dell. Blackberry maker RIM was valued at $16 billion, just over a third more than Apple.
Blackberry didn't have the best phones nor was it the "king of smartphones." Blackberry's devices were also not "the best and most successful at what most smartphones were for at the time."
What the company uniquely had was the Blackberry Enterprise Server (BES), a proprietary messaging infrastructure that made its devices very sticky to enterprise customers. That's where most of the company's profits came from.
RIM's share of the 2006 smartphone market was just 8.3 percent, not all much larger than Motorola or Palm.
Today, Apple sells nearly twice as many iPhones per quarter in its slowest quarter than all smartphone vendors combined did back in 2006. Apple didn't just convert RIM users to iPhone users; it dramatically expanded the smartphone market by making iPhones attractive to vast new audiences.
Source: Canalys
The real king of smartphones was Nokia, with a market cap of $100 billion—nearly as big as Google at $120 billion. Microsoft (whose share of smartphones was scattered among its licensees) was valued at almost $240 billion. Looking at those numbers, it's not extremely hard to understand why nobody expected Apple to replicate its iPod magic in phones, given the size of its rivals.
Apple's primary apparent competition was not really Blackberry, but rather Nokia's Symbian and Microsoft's Windows Phone platform—which was benefitting from its connection to the successful Windows PC platform (and a recent deal that had converted about half of Palm's users to Windows Mobile-powered Palm smartphones).
Five years later, after the launch of iPhone and iPad, Apple's profits had ballooned to more than $16 billion annually, and its market valuation had soared to $323 billion. RIM's valuation had only grown slightly, to less than $26 billion.
It's not hard to understand how the once-important Blackberry failed to replicate Apple's iOS when it finally woke up years later and began assembling the components of its own QNX-based BB10 starting in 2010. By that time, it was less than a tenth Apple's size, and it had wasted four years in me-too surface competition.
The companies investing in AI today are not ten times bigger than Apple, and they haven't successfully deployed a universally attractive new product that Apple has ignored for the last four years.
Apple's iPhone disrupted RIM's BES
Additionally, Apple didn't disrupt RIM by launching an iPhone with apps. Blackberry had apps. RIM didn't fail to recognize the importance of a third party app store.
Blackberry OS had been a Java Mobile platform, similar in some respects to Nokia's Symbian. Windows Mobile had apps. Palm OS had apps. All of those platforms could run Java apps. Apple didn't invent the idea of a smartphone and outsmart companies who didn't see the value of running third party software. Apple was actually late to that party.
But when Apple did arrive, it brought a vastly more powerful operating system, more powerful development frameworks and more powerful hardware to run them, delivered as the premium-priced iPhone. Blackberry, Nokia and Microsoft literally laughed off Apple's approach, until they belatedly realized it was working.
What Apple did do is target where RIM was making its money: BES. It did this by partnering with Microsoft to deliver ActiveSync push messaging, along with its own push notifications and MobileMe (remember that huge failure that pundits like to mock?) to erase the value BES was providing to Blackberry users.
BES vs Apple's ActiveSync
That factual context is lethal to the idea that Apple is fated to experience Blackberry's demise if it fails to join Google in talking about its plans for AI. Apple didn't just introduce a new way to interact with smartphones. It radically revolutionized how phones were sold, who was in control of the user experience, and how money could be made in the industry. That's something its competitors, including Blackberry, failed to grasp soon enough back then, and it's something Apple's smartphone rivals still haven't matched.
The Apple of 2010
Across those same five years of iPhone (and iPad) that earned Apple a market cap of $323 billion, Google's valuation had only grown to $172 billion, and Microsoft had actually fallen backward to just below $220 billion. Nokia, once the leader of smartphones globally, had collapsed to just above $30 billion.
Apple's development of iOS, and its successful deployment of it on a phone and a tablet, wasn't just a successful event. It radically changed the playing field. The much smaller Blackberry failed to similarly radically turn the industry around, and even Microsoft completely bungled two attempts to match the iPhone and iPad: first in porting its own Windows to ARM to battle the iPad with Surface RT, and secondly to establish Windows Phone as a contender on phones.
The ability for a new company to break into phones and radically change the landscape (and steal away a significant portion of Apple's premium market) was even by 2011 an exponentially more difficult leap than Apple's own play in turning its advanced OS X development tools and the iPod's high volume premium hardware business into mass market hit.
Android: today's Netscape
Apple's iPhone so devastated the existing players in the smartphone market that the only technology anyone else could use ended up being Google's poorly managed, technically inferior Android experiment, which was run like an arrogant pirate startup so assured of its victory that it laughed off its most serious competitor as a befuddled relic stuck in an anachronistic Walled Garden.
Android became the Netscape of the 2010 decade. Back in 1996, Netscape had similarly expected to destroy Microsoft's ubiquitous Windows platform by simply showing up and offering an "open" alternative, with only a weak idea about how it would fund that initiative if it gave away its web browser.
Despite the fact that Microsoft had initially completely failed to recognize the rise of the web, once it identified the much smaller Netscape as a threat it decisively leveraged its size, power and position to obliterate its rival and turn the web into another feature of Windows via Internet Explorer—which was an acquisition of the sort that Arment imagined today's Apple will be unable to similarly master in the realm of AI.
Targeting the profit center
Microsoft erased Netscape's power by effectively targeting its profit center: sales of web servers. Microsoft's own "good enough" IIS web server was bundled for free with Windows, sort of like how Apple bundled its own Maps and Spotlight search in iOS, erasing Google's ability to get paid for supplying search results.
And really, if you want to talk about potential for disruption, Apple has far more power to leverage its platform of a billion active devices to cut the advertising pipe supplying Google's revenues than Google or other AI vendors have in trying to get users to leave iOS for a new platform with a verbal interface talking them through paid placement results.
Apple doesn't even have to do this on its own. European carriers are already looking at filtering out mobile ads on the network level in response to the massive data impact that surveillance-based advertising and user-tracking places on their networks.
Ten years of iOS
Fast forward to today—another five years later—and Apple's market cap is now about $540 billion (and that's over $200 billion less than its peak valuation reached last year, thanks to the current irrational stock panic cycle). The former RIM is now valued at less than $4 billion. Google's valuation is $503 billion (just $30 billion from its peak), and Microsoft is valued at $411 billion.
Those are all market caps, which reflect the mindset of investors and short term traders. Looking at revenues and profit, Apple brought in $227.5 billion over the last four quarters, and earned over $50 billion. Despite having a valuation near Apple's (and having briefly passed it on two occasions over the past quarter), Google only brought in $78 billion, and earned just $17 billion over the same period, close to 1/3 of Apple's actual profitability and revenues.
Microsoft earned just over $10 billion on sales of almost $87 billion. That's a fifth of Apple's profits, despite carrying a valuation three-fourths of Apple's. Also, Microsoft has slightly more employees than Apple's 110,000, while Google has roughly 55 percent as many.
Overall, that tells us that Apple has maintained a decade of solid growth while maintaining a rapidly expanding platform of mobile devices. No other vendor of smartphones or tablets or more conventional PCs has performed anything like Apple has over the past decade.
Google's incompetent handling of Android
While Android enthusiasts like to talk about Google maintaining some important share (or even market dominance!) of smartphones with Android, the reality is that Google has failed to benefit very much from the trend toward mobile devices over the past decade, both as an advertiser and most certainly as an aspiring hardware maker—a role it has performed so poorly at that it has all but abandoned its hardware hopes.
For Google to really transform the demand for smartphones, it needs to have some real power in the industry. But what it has done is actually fail repeatedly to deliver its ideas, first with Nexus, then using Motorola, then Android Silver and most recently Android One. Google's software platform exerts very little of the power Microsoft Windows had over PCs.
Over the past year, Google failed to even roll out its latest Android Marshmallow software to even a tenth of its users. Offering an AI app isn't going to dramatically shift its licensees' hardware from low end "carrier friendly, good enough" devices into profitable hardware on the level of iPhone.
Facebook and Amazon's epic failures in smartphones
Facebook and Amazon, two other AI espousing companies, feature stratospheric valuations and very little real profitability, but more importantly have dramatically failed to sell hardware or influence the smartphone market as intended. Facebook Phone and Facebook Home for Android were spectacular failures, and Amazon's own flopped effort to launch Fire Phone was just as poorly executed.
Facebook couldn't even take over Android after lining up lots of partners
Even if Facebook, Amazon, Google or another competitor were able to launch a new product that did manage to begin changing the smartphone market and seriously threatening Apple's iPhone business, Apple would have years and scores of billions of dollars to leverage against them.
Did anyone notice what just occured in the "smartwatch" business? Apple showed up two years late and obliterated Android Wear and Samsung Tizen with its own much more expensive Apple Watch, paired with fashion styling that nobody in the commodity hardware business even thought about.
The future of computers
A decade ago, Apple was increasingly seen as "the iPod maker," to the point where Apple itself ditched "Computer" from its corporate name in 2007 when it introduced iPhone. Since the rise of iPhones, Apple has increasingly taken on the identity of the iPhone maker, and indeed iPhones now account for the majority of Apple's sales.
A key aspect of the iPhone's success is that Apple built it on top of its existing computing platform. Prior to iOS, Apple's product mix included ARM-based iPods and Airport Base Stations that were essentially standalone embedded computers with a singular purpose, but iPhone was a general purpose computing platform. So was iPad.
Today, Apple is a much larger computer maker than it was ten years ago, when it was still known as Apple Computer. Instead of making around 6 million Macs and an array of simpler, peripherals (including iPod), Apple now sells about 20 million Macs, 50 million iPads and around 250 million iPhones per year, along with about 12-15 million first-year sales of Apple Watch. Those ~340 million devices are all computers based on a similar core operating system.
Who will muscle into Apple's computing empire? Microsoft has proven that it can barely sustain its partners' Windows ecosystem, and its own Surface sales are hovering around 5 million annually, after three years of trying.
Google and its Android partners have done little but copy Apple's product for sale to a lower end demographic. However, that demographic is feeding iOS because an increasing number of Android users have been migrating to iPhones.
The consumption of computers is not going to end. It may shift, as it clearly has from desktop Windows PCs to handheld mobile computers (where Android plays the broad funnel feeding Apple's premium, profitable iPhone sales) and tablets (where Apple not only leads volume sales, but also makes virtually all the available profits).
It may also change slightly in character, as it has from PCs and tablets what IDC like to call "Detachables," a "new" category that Apple has already dominated with iPad Pro sales within its first three months—in competition against Microsoft's third year of Surface.
The computing market may also expand, as it has with wearables, which Apple also dominated with Apple Watch, already an even larger market than IDC's hybrid tablet-laptops.
And now that Apple has a variant of iOS working on both on a wearable device and in a home-oriented box with Apple TV, it has the potential to identify new kinds of small, dedicated computer devices that would benefit from the app platform and development tools its owns, and the Continuity features it has already used to stitch together Macs, iPods, iPhones and Apple Watch into a connected mesh.
Radically shifting Apple's customer base to a rival platform is going to be vastly more difficult than converting basic smartphone buyers to iPhone was for Apple in the last decade, or shifting conventional PC demand to a simpler, easier to manage iPad. Nobody assumed either of those migrations were even possible, let alone could be done so decisively within just a few years.
When a competitor introduces a new product that causes Apple's revenues to collapse by 75 percent (the way iPhone 6 gutted Samsung's entire mobile unit), we can start talking about the potential for Apple to retaliate with its massive cash hoard. Until then, the idea that the world will simply stop buying computers—because that's the only way Apple could fail—is hard to take seriously.
http://appleinsider.com/articles/16...ser-look-at-ai-and-the-worlds-biggest-company
By Daniel Eran Dilger
Monday, May 30, 2016, 04:42 pm PT (07:42 pm ET)
Last week, developer Marco Arment suggested in a blog posting that if Apple were to fail to grasp the potential for voice-based Artificial Intelligence to change the nature of smartphone demand, the company's core revenue generator could suffer the same fate as RIM's Blackberry, which a decade prior had similarly failed to see the importance of iPhone's advanced multitouch experience until it was too late to do anything about it.
Before the iPhone, Samsung had to copy RIM's Blackberry
Arment's think piece described Blackberry (which a decade ago was known as RIM) as the "king of smartphones" prior to the iPhone's introduction in 2007, writing that "they were the best and most successful at what most smartphones were for at the time: email and phone calls."
He then posited that "today, Amazon, Facebook, and Google are placing large bets on advanced AI, ubiquitous assistants, and voice interfaces, hoping that these will become the next thing that our devices are for. If they're right — and that's a big 'if' — I'm worried for Apple."
He added "... if Google's right, there's no quick fix. It won't be enough to buy Siri's creators again or partner with Yelp for another few years."
There are some core problems with piece, but the biggest one is that Biz Carson of Business Insider latched onto it to drive a fear mongering amplification for her own clickbait audience.
If Carson had put some thought into critically examining what Arment wrote, she might have realized how fragile the entire idea actually was. Instead, she just replicated it for her own audience next to her site's own ads (a sort of Google Verbatim Appropriation, you might say).
Oh dear, is Tim Cook worried too?
Peak iPhone Panic
Stories of panic that paint a credible path to Apple's rapid demise have always been popular as link-bait, but today the attraction is simply off the charts, due to the fact that the Internet has shifted from an alternative way for print and television journalists to distribute their ideas into an ad-supported trough where the dumbest ideas which can generate the most outrage best serve as co-conduits for paid messages.
Welcome to Google's ad internet, where the New Content is ads and the headlines are just tricking you into reading them! This problem is tightly bound to another problem: a complete ignorance of why Apple, not Google, is generating so much free cash flow and how Apple ever got to its current position when everyone knows, via Google's ad supported news channels, that Android is winning!
Fortunately both ideas are so tightly bound together that they can be dissected in one article.
Peak iPhone? The consumption of computers is not over
There appears to be a broad consensus among pundits that iPhone growth is going away, and that without selling increasing volumes of iPhones each quarter—and without Steve Jobs to invent some new product category—Apple will be unable to maintain its position as the world's largest and most valuable tech company.
The idea that Apple could become a Blackberry is therefore a provocatively attractive one. However, once you begin taking a closer look at the history of Apple and RIM, the surface comparison begins to implode under the weight of facts.
First, take a look at where Apple was prior to the iPhone. Coincidentally, criticism of Apple back then was shockingly similar to where it is again today. One might say this all happened before.
Remember Peak iPod?
A year or two prior the point of Peak iPod—which in retrospect we know actually occured in 2008, based on unit sales figures—the storyline of Apple's impending demise began to orbit around how poorly positioned the company was because in comparison to iPods its Mac business almost didn't matter anymore (iPods were outselling Macs by 10x), and the core value of iPods at the time was centered on their ability to play MP3s, a feature that an emerging number of smartphones (and even feature phones) had already begun to deliver.
Apple is going to be stuck trying to sell iPods to a market already satisfied with their MP3-playing phones, pundits claimed in near perfect unison. Additionally, they claimed that Apple had no ability to enter the phone business because the market already had many experienced, entrenched players who were much larger than Apple and would offer fierce competition to any new upstart trying to muscle into their territory.
In hindsight, and equipped with our knowledge of how remarkably well Apple entered and then mastered the phone business, the idea that Apple would remain wedded to the past and fail to translate its past success into the future seems so wrong that it's almost hard to believe that anyone ever thought that.
Apple had previously made a series of transitions that were virtually unprecedented in the industry. It had switched the Mac's chip architecture twice already, once to PowerPC and then to Intel. It had also shifted its Mac platform OS from an embedded System Software to a "modern" Unix based OS using advanced developer frameworks and a futuristic vector graphics compositing engine.
And in iPods, it had also transitioned from high end hard-drive based designs to new generations of solid state flash storage, deftly conquering new segments of the market. And while doing that, it fended off competitive threats from much larger companies, ranging from the Walkman-originator Sony to Microsoft and its Windows Media Player licensees, which were almost universally expected to gobble up Apple's iPod sales via commodity devices.
Apple should have earned at least a little benefit of the doubt. Today however, that's even more true.
VR, AI and Peak iPhone
Yet virtually the exact same scenario is playing out today, where we are increasingly told that "everyone who wants an iPhone already has one," (even though that is obviously false) and that the future will be delivered by companies who are working on Virtual Reality and/or Artificial Intelligence concepts in public view, companies that have already shown some initial prototypes and even delivered consumer products fit for early adopters.
Those same companies also previously introduced NFC payments, fingerprint scanners, music subscriptions, voice services and a variety of other concepts years in advance of Apple, without actually holding on to their lead once Apple began competing in those same fields. In part, that's because Apple worked on its own solutions in private, and delivered them once they were ready.
There are some other key differences between today and decade ago. This time around, Apple is bigger and more powerful than every other company in the industry, even while it remains unique in its ability to make money (in PCs, phones, tablets, smartwatches, Apple sells virtually all of the products that are actually profitable).
In 2006, there were a broad array of profitable smartphone makers; building smartphones was considered to basically be picking money off trees. Today, most of the smartphone makers are losing money.
Apple doesn't look like Blackberry at all
Also, the product that is now supposedly going to turn Apple into a Blackberry is not an existing device that virtually everyone already owns but which Apple does not make (a 2006 mobile phone), but rather an application of the device that everyone owns and which Apple already makes.
Apple's iPhone overwhelmingly dominates premium smartphone sales. No previous competing feature has ever threatened that, despite many being clearly valuable (such as having support for LTE mobile networks, a feature Apple belatedly joined years after its rivals). A key reason is Apple's vast scale.
When Apple launches a new iPhone, it now sells about 70 million during its launch quarter (most of those are the newest model; all of them are premium smartphones). When Apple's next largest competitor launches a new Galaxy S, it ships out 10 million or fewer in the launch quarter, along with a huge volume of devices that are not premium smartphones capable of demanding a significant profit.
Samsung's premium smartphone sales peaked a few years ago and its IM Mobile profits haven't recovered since. Samsung has experienced two years' worth of quarters where profits haven't come close to what they once were at Peak Galaxy, a fact that nobody likes to talk about (because why kick a company when its down?).
Apple has had one quarter that was down from its year-ago surge related to the mega-launch of iPhone 6. It's currently impossible to write about Apple without noting that Apple's Q1 sales (and perhaps its next quarter of sales) were down, the first time this has happened since something like 2003.
But it's okay to kick Apple because it's not really down. Even with a temporary drop in quarterly sales, Apple still makes more money than the rest of the smartphone industry combined. That's an important detail.
Source: Canaccord Tenuity
Apple's sales would have to collapse by about 75 percent for Apple to even be at the level of Samsung. A few years ago, Samsung Mobile shipped twice as many phones as Apple but made about the same amount of money. Today it sells about half again as many more, but brings in profits that are a quarter of Apple's.
Apple is not in a downward spiral. Comparing Apple with its current competition and looking for ways Apple could be outmaneuvered requires some seriously naive leaps of logic, simply because Apple is not just larger, but also far better managed, focused and competent at delivering its objectives.
Five years of iPhone
That's a radically different competitive environment from 2006. Back then, Apple's annual profits were $2.4 billion, and the company was valued at around $60 billion, roughly equal to Dell. Blackberry maker RIM was valued at $16 billion, just over a third more than Apple.
Blackberry didn't have the best phones nor was it the "king of smartphones." Blackberry's devices were also not "the best and most successful at what most smartphones were for at the time."
What the company uniquely had was the Blackberry Enterprise Server (BES), a proprietary messaging infrastructure that made its devices very sticky to enterprise customers. That's where most of the company's profits came from.
RIM's share of the 2006 smartphone market was just 8.3 percent, not all much larger than Motorola or Palm.
Today, Apple sells nearly twice as many iPhones per quarter in its slowest quarter than all smartphone vendors combined did back in 2006. Apple didn't just convert RIM users to iPhone users; it dramatically expanded the smartphone market by making iPhones attractive to vast new audiences.
Source: Canalys
The real king of smartphones was Nokia, with a market cap of $100 billion—nearly as big as Google at $120 billion. Microsoft (whose share of smartphones was scattered among its licensees) was valued at almost $240 billion. Looking at those numbers, it's not extremely hard to understand why nobody expected Apple to replicate its iPod magic in phones, given the size of its rivals.
Apple's primary apparent competition was not really Blackberry, but rather Nokia's Symbian and Microsoft's Windows Phone platform—which was benefitting from its connection to the successful Windows PC platform (and a recent deal that had converted about half of Palm's users to Windows Mobile-powered Palm smartphones).
Five years later, after the launch of iPhone and iPad, Apple's profits had ballooned to more than $16 billion annually, and its market valuation had soared to $323 billion. RIM's valuation had only grown slightly, to less than $26 billion.
It's not hard to understand how the once-important Blackberry failed to replicate Apple's iOS when it finally woke up years later and began assembling the components of its own QNX-based BB10 starting in 2010. By that time, it was less than a tenth Apple's size, and it had wasted four years in me-too surface competition.
The companies investing in AI today are not ten times bigger than Apple, and they haven't successfully deployed a universally attractive new product that Apple has ignored for the last four years.
Apple's iPhone disrupted RIM's BES
Additionally, Apple didn't disrupt RIM by launching an iPhone with apps. Blackberry had apps. RIM didn't fail to recognize the importance of a third party app store.
Blackberry OS had been a Java Mobile platform, similar in some respects to Nokia's Symbian. Windows Mobile had apps. Palm OS had apps. All of those platforms could run Java apps. Apple didn't invent the idea of a smartphone and outsmart companies who didn't see the value of running third party software. Apple was actually late to that party.
But when Apple did arrive, it brought a vastly more powerful operating system, more powerful development frameworks and more powerful hardware to run them, delivered as the premium-priced iPhone. Blackberry, Nokia and Microsoft literally laughed off Apple's approach, until they belatedly realized it was working.
What Apple did do is target where RIM was making its money: BES. It did this by partnering with Microsoft to deliver ActiveSync push messaging, along with its own push notifications and MobileMe (remember that huge failure that pundits like to mock?) to erase the value BES was providing to Blackberry users.
BES vs Apple's ActiveSync
That factual context is lethal to the idea that Apple is fated to experience Blackberry's demise if it fails to join Google in talking about its plans for AI. Apple didn't just introduce a new way to interact with smartphones. It radically revolutionized how phones were sold, who was in control of the user experience, and how money could be made in the industry. That's something its competitors, including Blackberry, failed to grasp soon enough back then, and it's something Apple's smartphone rivals still haven't matched.
The Apple of 2010
Across those same five years of iPhone (and iPad) that earned Apple a market cap of $323 billion, Google's valuation had only grown to $172 billion, and Microsoft had actually fallen backward to just below $220 billion. Nokia, once the leader of smartphones globally, had collapsed to just above $30 billion.
Apple's development of iOS, and its successful deployment of it on a phone and a tablet, wasn't just a successful event. It radically changed the playing field. The much smaller Blackberry failed to similarly radically turn the industry around, and even Microsoft completely bungled two attempts to match the iPhone and iPad: first in porting its own Windows to ARM to battle the iPad with Surface RT, and secondly to establish Windows Phone as a contender on phones.
The ability for a new company to break into phones and radically change the landscape (and steal away a significant portion of Apple's premium market) was even by 2011 an exponentially more difficult leap than Apple's own play in turning its advanced OS X development tools and the iPod's high volume premium hardware business into mass market hit.
Android: today's Netscape
Apple's iPhone so devastated the existing players in the smartphone market that the only technology anyone else could use ended up being Google's poorly managed, technically inferior Android experiment, which was run like an arrogant pirate startup so assured of its victory that it laughed off its most serious competitor as a befuddled relic stuck in an anachronistic Walled Garden.
Android became the Netscape of the 2010 decade. Back in 1996, Netscape had similarly expected to destroy Microsoft's ubiquitous Windows platform by simply showing up and offering an "open" alternative, with only a weak idea about how it would fund that initiative if it gave away its web browser.
Despite the fact that Microsoft had initially completely failed to recognize the rise of the web, once it identified the much smaller Netscape as a threat it decisively leveraged its size, power and position to obliterate its rival and turn the web into another feature of Windows via Internet Explorer—which was an acquisition of the sort that Arment imagined today's Apple will be unable to similarly master in the realm of AI.
Targeting the profit center
Microsoft erased Netscape's power by effectively targeting its profit center: sales of web servers. Microsoft's own "good enough" IIS web server was bundled for free with Windows, sort of like how Apple bundled its own Maps and Spotlight search in iOS, erasing Google's ability to get paid for supplying search results.
And really, if you want to talk about potential for disruption, Apple has far more power to leverage its platform of a billion active devices to cut the advertising pipe supplying Google's revenues than Google or other AI vendors have in trying to get users to leave iOS for a new platform with a verbal interface talking them through paid placement results.
Apple doesn't even have to do this on its own. European carriers are already looking at filtering out mobile ads on the network level in response to the massive data impact that surveillance-based advertising and user-tracking places on their networks.
Ten years of iOS
Fast forward to today—another five years later—and Apple's market cap is now about $540 billion (and that's over $200 billion less than its peak valuation reached last year, thanks to the current irrational stock panic cycle). The former RIM is now valued at less than $4 billion. Google's valuation is $503 billion (just $30 billion from its peak), and Microsoft is valued at $411 billion.
Those are all market caps, which reflect the mindset of investors and short term traders. Looking at revenues and profit, Apple brought in $227.5 billion over the last four quarters, and earned over $50 billion. Despite having a valuation near Apple's (and having briefly passed it on two occasions over the past quarter), Google only brought in $78 billion, and earned just $17 billion over the same period, close to 1/3 of Apple's actual profitability and revenues.
Microsoft earned just over $10 billion on sales of almost $87 billion. That's a fifth of Apple's profits, despite carrying a valuation three-fourths of Apple's. Also, Microsoft has slightly more employees than Apple's 110,000, while Google has roughly 55 percent as many.
Overall, that tells us that Apple has maintained a decade of solid growth while maintaining a rapidly expanding platform of mobile devices. No other vendor of smartphones or tablets or more conventional PCs has performed anything like Apple has over the past decade.
Google's incompetent handling of Android
While Android enthusiasts like to talk about Google maintaining some important share (or even market dominance!) of smartphones with Android, the reality is that Google has failed to benefit very much from the trend toward mobile devices over the past decade, both as an advertiser and most certainly as an aspiring hardware maker—a role it has performed so poorly at that it has all but abandoned its hardware hopes.
For Google to really transform the demand for smartphones, it needs to have some real power in the industry. But what it has done is actually fail repeatedly to deliver its ideas, first with Nexus, then using Motorola, then Android Silver and most recently Android One. Google's software platform exerts very little of the power Microsoft Windows had over PCs.
Over the past year, Google failed to even roll out its latest Android Marshmallow software to even a tenth of its users. Offering an AI app isn't going to dramatically shift its licensees' hardware from low end "carrier friendly, good enough" devices into profitable hardware on the level of iPhone.
Facebook and Amazon's epic failures in smartphones
Facebook and Amazon, two other AI espousing companies, feature stratospheric valuations and very little real profitability, but more importantly have dramatically failed to sell hardware or influence the smartphone market as intended. Facebook Phone and Facebook Home for Android were spectacular failures, and Amazon's own flopped effort to launch Fire Phone was just as poorly executed.
Facebook couldn't even take over Android after lining up lots of partners
Even if Facebook, Amazon, Google or another competitor were able to launch a new product that did manage to begin changing the smartphone market and seriously threatening Apple's iPhone business, Apple would have years and scores of billions of dollars to leverage against them.
Did anyone notice what just occured in the "smartwatch" business? Apple showed up two years late and obliterated Android Wear and Samsung Tizen with its own much more expensive Apple Watch, paired with fashion styling that nobody in the commodity hardware business even thought about.
The future of computers
A decade ago, Apple was increasingly seen as "the iPod maker," to the point where Apple itself ditched "Computer" from its corporate name in 2007 when it introduced iPhone. Since the rise of iPhones, Apple has increasingly taken on the identity of the iPhone maker, and indeed iPhones now account for the majority of Apple's sales.
A key aspect of the iPhone's success is that Apple built it on top of its existing computing platform. Prior to iOS, Apple's product mix included ARM-based iPods and Airport Base Stations that were essentially standalone embedded computers with a singular purpose, but iPhone was a general purpose computing platform. So was iPad.
Today, Apple is a much larger computer maker than it was ten years ago, when it was still known as Apple Computer. Instead of making around 6 million Macs and an array of simpler, peripherals (including iPod), Apple now sells about 20 million Macs, 50 million iPads and around 250 million iPhones per year, along with about 12-15 million first-year sales of Apple Watch. Those ~340 million devices are all computers based on a similar core operating system.
Who will muscle into Apple's computing empire? Microsoft has proven that it can barely sustain its partners' Windows ecosystem, and its own Surface sales are hovering around 5 million annually, after three years of trying.
Google and its Android partners have done little but copy Apple's product for sale to a lower end demographic. However, that demographic is feeding iOS because an increasing number of Android users have been migrating to iPhones.
The consumption of computers is not going to end. It may shift, as it clearly has from desktop Windows PCs to handheld mobile computers (where Android plays the broad funnel feeding Apple's premium, profitable iPhone sales) and tablets (where Apple not only leads volume sales, but also makes virtually all the available profits).
It may also change slightly in character, as it has from PCs and tablets what IDC like to call "Detachables," a "new" category that Apple has already dominated with iPad Pro sales within its first three months—in competition against Microsoft's third year of Surface.
The computing market may also expand, as it has with wearables, which Apple also dominated with Apple Watch, already an even larger market than IDC's hybrid tablet-laptops.
And now that Apple has a variant of iOS working on both on a wearable device and in a home-oriented box with Apple TV, it has the potential to identify new kinds of small, dedicated computer devices that would benefit from the app platform and development tools its owns, and the Continuity features it has already used to stitch together Macs, iPods, iPhones and Apple Watch into a connected mesh.
Radically shifting Apple's customer base to a rival platform is going to be vastly more difficult than converting basic smartphone buyers to iPhone was for Apple in the last decade, or shifting conventional PC demand to a simpler, easier to manage iPad. Nobody assumed either of those migrations were even possible, let alone could be done so decisively within just a few years.
When a competitor introduces a new product that causes Apple's revenues to collapse by 75 percent (the way iPhone 6 gutted Samsung's entire mobile unit), we can start talking about the potential for Apple to retaliate with its massive cash hoard. Until then, the idea that the world will simply stop buying computers—because that's the only way Apple could fail—is hard to take seriously.
http://appleinsider.com/articles/16...ser-look-at-ai-and-the-worlds-biggest-company
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Iphone 6 exploded because of pent up demand. Users will fail to upgrade in record numbers with the 7 if uses the same design, and a modest processor upgrade.
3d touch ended up not being embraced by the masses and developers. Unless Apple revolutionizes battery technology, or enhances the user experience their market share will continue to deteriorate.
3d touch ended up not being embraced by the masses and developers. Unless Apple revolutionizes battery technology, or enhances the user experience their market share will continue to deteriorate.
I had an iPhone 6, I have an iPhone 6S (they sent it to me when I lost my 6 for some reason) and bruh, I still barely understand 3D touch and if it wasn't for a commercial I'd still be wondering what that "live" shit is at the top of the screen when you take a pic
Well I have the iPhone 6plus but I'm thinking bout getting a Note 6( I also have note 4 which contract bout to end) tired of Apple Not Upgrading their phones- same tired ass screen, no water proof, terrible battery life no remote charge etc, etc, so if the specs are true bout Note 6 I'm gonna make that jump back to Samsung
Apple jumps from fifth to third in 2016 Fortune 500 list
By Roger Fingas
Monday, June 06, 2016, 08:01 am PT (11:01 am ET)
Despite recent setbacks Apple nevertheless climbed from fifth to third place in this year's Fortune 500, ranking major U.S. corporations based on their gross revenues.
Apple managed over $233.7 billion for the 2016 list — published on Monday — versus just under $182.8 billion in 2015. The company displaced Chevron, which fell out of the top 10, while remaining behind big-box retailer Walmart and oil giant Exxon Mobil. Totaling over $482.1 billion, Walmart's revenues were nearly twice those of Exxon.
Apple was well ahead of its rivals in the technology industry however, and in fact the only other high-tech firm in the top 10 was AT&T — sitting in 10th place with about $146.8 billion.
Fortune commented that while Apple is the world's most profitable publicly-traded company, it "finally appeared to hit a wall" in 2015, as iPad sales continued to slide and its latest iPhones "barely outsold" the iPhone 6 and 6 Plus. The business magazine also pointed to "modest" Apple Watch sales, and problems in Asia towards the end of the year.
The company's immediate hopes are said to lay with next-generation iPhones and a focus on its relatively untapped Indian market. In the longer term, though, Fortune pointed to Project Titan, which it described as an "effort to leapfrog the automobile market with an electric masterpiece." Apple typically isn't expected to ship a car until at least 2019 or 2020.
http://appleinsider.com/articles/16/06/06/apple-jumps-from-fifth-to-third-in-2016-fortune-500-list
By Roger Fingas
Monday, June 06, 2016, 08:01 am PT (11:01 am ET)
Despite recent setbacks Apple nevertheless climbed from fifth to third place in this year's Fortune 500, ranking major U.S. corporations based on their gross revenues.
Apple managed over $233.7 billion for the 2016 list — published on Monday — versus just under $182.8 billion in 2015. The company displaced Chevron, which fell out of the top 10, while remaining behind big-box retailer Walmart and oil giant Exxon Mobil. Totaling over $482.1 billion, Walmart's revenues were nearly twice those of Exxon.
Apple was well ahead of its rivals in the technology industry however, and in fact the only other high-tech firm in the top 10 was AT&T — sitting in 10th place with about $146.8 billion.
Fortune commented that while Apple is the world's most profitable publicly-traded company, it "finally appeared to hit a wall" in 2015, as iPad sales continued to slide and its latest iPhones "barely outsold" the iPhone 6 and 6 Plus. The business magazine also pointed to "modest" Apple Watch sales, and problems in Asia towards the end of the year.
The company's immediate hopes are said to lay with next-generation iPhones and a focus on its relatively untapped Indian market. In the longer term, though, Fortune pointed to Project Titan, which it described as an "effort to leapfrog the automobile market with an electric masterpiece." Apple typically isn't expected to ship a car until at least 2019 or 2020.
http://appleinsider.com/articles/16/06/06/apple-jumps-from-fifth-to-third-in-2016-fortune-500-list
fucking crazy
looks like that shit can backfire in a big way
thinking about when cacs really tried hard to do democracy and it ended up in "world" wars
i don't think their selfish nature lends itself to principle of ubuntu
it's just a matter of time........
http://www.bgol.us/forum/index.php?...o-outstrip-supply-months-after-launch.901525/
iPhone SE demand continues to outstrip supply months after launch
After failing to make a significant impact with the iPhone 5c back in 2013, Apple has a bonafide hit on its hands with this year’s iPhone SE. Nearly three months after the phone’s launch, retailers are still struggling to keep up with demand.
According to AppleInsider, Apple retail stores are reporting two-week waiting periods for new iPhone SE shipments as of this week. Although strong demand for Apple products isn’t exactly news, it is somewhat surprising to see that Apple hasn’t been able to produce enough iPhone SE units to meet it.
Shortly after launch, it was reported that Apple had increased iPhone SE orders significantly, with plans to build over 5 million units in the quarter. Considering the fact that shipping delays are still the norm, it appears that either the report was incorrect, or demand for the iPhone SE has only grown.
“We’re thrilled with the response that we’ve seen on it,” Tim Cook said during the company’s conference call in April. “It’s clear there’s a demand there that’s much beyond what we thought, which is why we have the constraint that we have.”
Either way, it’s hard to see this as anything but positive for Apple. It would be preferable if the company could meet the demands of its customers, but if this really is the cause of overwhelming demand rather than supply chain issues, it’s a good problem for Apple to have, especially following the first quarterly dip in iPhone sales since the iPhone debuted in 2007.
iPhone SE demand continues to outstrip supply months after launch
After failing to make a significant impact with the iPhone 5c back in 2013, Apple has a bonafide hit on its hands with this year’s iPhone SE. Nearly three months after the phone’s launch, retailers are still struggling to keep up with demand.
According to AppleInsider, Apple retail stores are reporting two-week waiting periods for new iPhone SE shipments as of this week. Although strong demand for Apple products isn’t exactly news, it is somewhat surprising to see that Apple hasn’t been able to produce enough iPhone SE units to meet it.
Shortly after launch, it was reported that Apple had increased iPhone SE orders significantly, with plans to build over 5 million units in the quarter. Considering the fact that shipping delays are still the norm, it appears that either the report was incorrect, or demand for the iPhone SE has only grown.
“We’re thrilled with the response that we’ve seen on it,” Tim Cook said during the company’s conference call in April. “It’s clear there’s a demand there that’s much beyond what we thought, which is why we have the constraint that we have.”
Either way, it’s hard to see this as anything but positive for Apple. It would be preferable if the company could meet the demands of its customers, but if this really is the cause of overwhelming demand rather than supply chain issues, it’s a good problem for Apple to have, especially following the first quarterly dip in iPhone sales since the iPhone debuted in 2007.
3d touch being adopted by younger folks quickly.
If you have fb scroll through your friends lists and see how many of their profile pictures move, those are live photos.
The 7 will do major numbers.
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