Tyler Cowen on the iPhone

Like many others, I’ve been reflecting on the tenth anniversary of the iPhone. The Computer History Museum ran a fascinating two-hour show in which John Markoff talked to some of the people who designed and built the first phone. Tyler Cowen also devoted his latest Bloomberg column to it and, as usual, he’s come up with an angle that I hadn’t thought about much:

First, we’ve learned that, even in this age of bits and bytes, materials innovation still matters. The iPhone is behind the scenes a triumph of mining science, with a wide variety of raw materials and about 34 billion kilograms (75 billion pounds) of mined rock as an input to date, as discussed by Brian Merchant in his new and excellent book “The One Device: The Secret History of the iPhone”. A single iPhone has behind it the production of 34 kilos of gold ore, with 20.5 grams (0.72 ounces) of cyanide used to extract the most valuable parts of the gold.

Especially impressive as a material is the smooth touch-screen, and the user’s ability to make things happen by sliding, swiping, zooming and pinching it — the “multitouch” function. That advance relied upon particular materials, as the screen is chemically strengthened, made scrape-resistant and embedded with sensitive sensors. Multitouch wasn’t new, but Apple understood how to build it into a highly useful product.

Imagine putting together a production system that could make 1.2 billion of these devices.

Ten years on

Infographic: 1.2 Billion iPhones in 10 Years | Statista You will find more statistics at Statista

Ten years ago today, the first iPhone went on sale. Is it the most successful product of all time? Probably not. But it’s definitely one of the most influential, in that it was the first real smartphone and thereby kicked off the technology that has shaped the way the Internet — and society — has evolved ever since. And of course it also made Apple the most valuable company in the world.

So the iPad is “done”. Really?

This morning’s Observer column:

My eye was caught by a headline in the Register, an invaluable online source of tech news and opinion. “Clearance sale shows Apple’s iPad is over. It’s done,” it read. This was a quotation from a piece by Volker Weber on the latest product announcements from Apple. “iPad is the biggest news,” he wrote, “and it says: the iPad is done. Apple is just refining the components, but there isn’t much they can do these days to make yet another super-duper Earth-shattering innovation here.”

Since I was reading this on my iPad Pro, which is probably the most useful electronic device I have ever owned, it came as a bit of a shock. But in fact Volker was really just articulating a truth about digital hardware, which is that the evolution of all such products (and a good deal else besides) follows a sigmoid curve.

It sounds complicated, but it isn’t really…

Read on

What’s in a year? How about 2007?

This morning’s Observer column:

It’s interesting how particular years acquire historical significance: 1789 (the French Revolution); 1914 (outbreak of the first world war); 1917 (the Russian revolution); 1929 (the Wall Street crash); 1983 (switching on of the internet); 1993 (the Mosaic Web browser, which started the metamorphosis of the internet from geek sandpit to the nervous system of the planet). And of course 2016, the year of Brexit and Trump, the implications of which are, as yet, unknown.

But what about 2007? That was the year when Slovenia adopted the euro, Bulgaria and Romania joined the EU, Kurt Vonnegut died, smoking in enclosed public places was banned in the UK, a student shot 32 people dead and wounded 17 others at Virginia Tech, Luciano Pavarotti died and Benazir Bhutto was assassinated. Oh – and it was also the year that Steve Jobs launched the Apple iPhone.

And that, I suspect, is the main – perhaps the only – reason that 2007 will be counted as a pivotal year, because it was the moment that determined how the internet would evolve…

Read on

Apple mania

This morning’s Observer column:

It’s that time of year again. Apple has released its results for the fiscal quarter ended 24 September 2016 and we are immediately plunged into “Has Apple peaked?” speculation. How come? Well, the company posted quarterly revenue of $46.9bn and net income of $9bn. Not bad, eh? Ah, yes, but not if you’re a Wall Street analyst, because these numbers compare to revenue of $51.5bn and net income of $11.1bn in the same quarter the year before. And – shock, horror! – the company’s gross margin was only 38% compared to 39.9% a year ago. The numbers are down, in other words.

Cue fevered speculation about the fate of the company. The numbers, burbled one analyst, show “the danger of being a one-trick pony when everyone already owns a pony. The company’s reliance on the smartphone, which is now a mature and saturated market in the developed world, is starting to create a growth problem for Apple. Breaking through will be a challenge, reminding investors Apple’s fundamentals and stock price have peaked.”

Pause for a reality check: Apple has cash reserves of $237.6bn, up $32bn from last year. At $622bn (at 26 October 2016), it is the most valuable company in the world…

Read on

Apple’s iWatch in iDecline?

iwatch

From Statista:

According to IDC’s most recent data, Apple Watch shipments declined by 71.6 percent in the past quarter compared to the same period last year. It’s the second consecutive quarter of high double-digit sales declines for Apple’s smartwatch, indicating that demand is quickly fading after a decent start. As our chart illustrates, the Apple Watch’s early sales figures were as good as the iPad’s and much better than the iPhone’s were in 2007. However, it took the iPhone nine years and the iPad three years to see their first year-over-year sales decline. Apple Watch sales started going downhill after just one year on the market.

Frankly, I’m not surprised. Although I continue to wear my Apple watch most days (especially on busy days when I’m expecting urgent emails or messages), I find it more or less useless for everything else. I’ve given up bringing it with me on overnight trips — can’t be bothered lugging a charger and cable. And of course at home it sits in its charging dock every night. Leading-edge uselessness, methinks.

How the tech industry differs from the automobile business

Reading a fascinating WashPo interview with Apple’s CEO, Tim Cook, I was struck by this:

We’re a bit larger today, so we can do a bit more than we could do 10 years ago or even five years ago. But we still have, for our size, an extremely focused product line. You can literally put every product we make on this table. That really is an indication of how focused it is. I think that’s a good thing. Regardless of who you are, there’s only so many things that you can do at a very high-quality and deep, deep level — personally and in business. And so we’re not going to change that. That’s core to our model and way of thinking.

This seems very different to the way most successful modern companies operate. With them, the game appears to be to provide a product to match every discernible market niche.

Take Mercedes, for example. I’m perpetually baffled by the various Mercedes model I see on our roads. So I went to the company’s site to try and get a handle on the range.

Here’s what I found. Mercedes sell 28 different types of consumer vehicle in the UK (I’ve ignored the commercial stuff), to wit:

  • 3 types of hatchback
  • 4 types of saloon
  • 4 types of estate car
  • 6 different coupés
  • 4 different models of cabriolet/roadster
  • 6 SUV models
  • 1 MPV

My guess (I haven’t checked) that the BMW range is just as diverse/confusing. It must be a hell of a challenge to maintain some level of coherence in this profusion. How do Mercedes sales personnel keep up? Maybe they instantly categorise every customer who comes in the door. As in: Here comes an estate-car customer. Oh, bet she’s a coupé type. He’s definitely S-class material. And so on.

Maybe the contrast between Mercedes and Apple is emblematic of the cultural differences between the tech and the auto industries. In that sense, Elon Musk’s approach to the Tesla range seems much closer to Apple’s.

Digital Dominance: forget the ‘digital’ bit

Some reflections on the symposium on “Digital Dominance: Implications and Risks” held by the LSE Media Policy Project on July 8, 2016.

In thinking about the dominance of the digital giants1 we are ‘skating to where the puck has been’ rather than to where it is headed. It’s understandable that scholars who are primarily interested in questions like media power, censorship and freedom of expression should focus on the impact that these companies are having on the public sphere (and therefore on democracy). And these questions are undoubtedly important. But this focus, in a way, reflects a kind of parochialism that the companies themselves do not share. For they are not really interested in our information ecosystem per se, nor in democracy either, if it comes to that. They have bigger fish to fry.

How come? Well, there are two reasons. The first is that although those of us who work in media and education may not like to admit it, our ‘industries’ are actually pretty small beer in industrial terms. They pale into insignificance compared with, say, healthcare, energy or transportation. Secondly, surveillance capitalism, the business model of the two ‘pure’ digital companies — Google and Facebook — is probably built on an unsustainable foundation, namely the mining, processing, analysis and sale of humanity’s digital exhaust. Their continued growth depends on a constant increase in the supply of this incredibly valuable (and free) feedstock. But if people, for one reason or another, were to decide that they would prefer to be doing something other than incessantly checking their phones, Googling or updating their social media statuses, then the evaporation of those companies’ stock market valuations would be a sight to behold. And while one can argue that such an outcome seems implausible, because of network effects and other factors, then a glance at the history of the IT industry might give you pause for thought.

The folks who run these companies understand this. For if there is one thing that characterizes the leaders of Google and Facebook it is their determination to take the long, strategic view. This is partly a matter of temperament, but it is powerfully boosted by the way their companies are structured: the founders hold the ‘golden shares’ which ensures their continued control, regardless of the opinions of Wall Street analysts or ordinary shareholders. So if you own Google or Facebook stock and you don’t like what Larry Page or Mark Zuckerberg are up to, then your only option is to dispose of your shares.

Being strategic thinkers, these corporate bosses are positioning their organizations to make the leap from the relatively small ICT industry into the much bigger worlds of healthcare, energy and transportation. That’s why Google, for example, has significant investments in each of these sectors. Underpinning these commitments is an understanding that their unique mastery of cloud computing, big data analytics, sensor technology, machine learning and artificial intelligence will enable them to disrupt established industries and ways of working in these sectors and thereby greatly widen their industrial bases. So in that sense mastery of the ‘digital’ is just a means to much bigger ends. This is where the puck is headed.

So, in a way, Martin Moore’s comparison2 of the digital giants of today with the great industrial trusts of the early 20th century is apt. But it underestimates the extent of the challenges we are about to face, for our contemporary versions of these behemoths are likely to become significantly more powerful, and therefore even more worrying for democracy.


  1. Or GAFA — Google, Apple, Facebook, Amazon — as our Continental friends call them, incorrectly in my view: Apple and Amazon are significantly different from the two ‘pure’ digital outfits. 

  2. Tech Giants and Civic Power, King’s College London, 2016.