Category Archives: Apple

What’s in a year? How about 2007?

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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…

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Apple mania

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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…

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Apple’s iWatch in iDecline?

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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

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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

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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. ↩

The Apple watch: a solution in search of a problem

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As some readers know, I’m not a fan of the Apple watch. Nor, it turns out, is the Guardian‘s Alex Hern:

The future of the watch can’t be the same iterative improvements that Apple has pulled off with the iPhone, iPod and iPad. The interface is just too ill-thought-through to work, even if the device itself is sped up significantly. But the most obvious alternative is to massively increase the amount of voice control the watch offers, and Apple simply doesn’t have the technical chops to do so. While Google and Amazon have been creating voice assistants that people seem to actually use and wax lyrical about, Apple … hasn’t. There’s no easy solution there.

But the saving grace for Apple is that the broader problem isn’t the company’s fault. It’s that smartwatches are a solution in search of a problem. A technology created, not to serve consumer demand, but to serve the need of device manufacturers to fill the revenue hole created by declining smartphone growth. You don’t need one, and neither do I. It just took me nine months of wearing it to realise.

Yep.

BUT… This thoughtful comment from a reader:

If you have a significant medical condition like Diabetics, particularly if you have diabetic kids, the Apple Watch and their Android equivalent is revolutionizing how you can go out in the world. I have neighbors who would have never allowed their 8 year old daughter go out for a sleepover because they need to check their blood sugar levels so often and now all they have to do is glance at their watch to track their behavior. Previously that sort of equipment was over $50,000 and now you can do it for a few hundred.

Apple vs. FBI ought to have gone to the Supreme Court

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Today’s Observer column:

So the FBI sought a court order to compel Apple to write a special version of the operating system without this ingenious destructive mechanism – which could then be downloaded to the phone. Apple refused, on various grounds both technological and legalistic, and the stage was set – so some of us thought – for a legal battle that would go all the way to the supreme court.

In the end, it didn’t happen. The FBI bought a hack from an Israeli security company which had already found a way round the problem, called off the legal suit, and nobody got their day in front of the supremes. Which was a pity, because it means that a really important question posed by digital technology remains unresolved. Put simply, it’s this: what limits, if any, should be placed on the power of encryption technology to render citizens’ communications invisible to law enforcement and security authorities?

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Resources, resources, resources

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Here’s an instructive story:

Just three months after launching Facebook Live to all users, Mark Zuckerberg decided to go big, realizing in a February meeting that the company should make Live a top priority. A BuzzFeed story on Live tells us what happens next, quoting Facebook Media’s product lead Fidjij Simo:

“The original Live team was composed of only a dozen or so people. But the vision laid out for the product at that February meeting would require more than 100 engineers to build. ‘The meeting was on a Thursday, and on Monday, [Facebook Media engineering lead Maher] Saba and I were standing in front of 150 engineers,’ said Simo.”

From 12 engineers to 150 in less than a week. That’s the new pace of the media business.

Now here’s another instructive question: how many engineers are working on the iPhone camera?

50?

150?

Nope. At the moment, there are 800 engineers working just on the camera.

Which leads me to wonder how many people work in the R&D divisions of Nikon and Canon?

See what conventional companies are up against?

flickr_stats

At present, the most popular cameras among Flickr users are all iPhone models. By a mile.

Deja vu: the Tesla Model 3 and the iPhone

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I’m clearly not the only one to have a feeling of deja vu when reading the coverage of, and commentary about, Elon Musk’s launch of his Model 3.

Here, for example, is Tim Stevens:

I didn’t live-blog last night’s Model 3 event at the Tesla Design Studio in Hawthorne, California, mostly because there wasn’t anywhere to sit and type. I did my best to do the same effect via Twitter and the reaction was…well, it was pretty amazing. It was unlike anything I’ve experienced this side of an iPhone launch. (A real iPhone launch, that is, not down-sized rehash.)

I don’t need to iterate the parallels between an iPhone launch and the Model 3 launch, but I will anyway.

First there was the endless speculation and anticipation, the frantic forum debates arguing the veracity of various dubious sources. Then came the supposed leak which, of course, proved completely bogus. There were the lines, the self-perpetuating wave of preorder hysteria and, finally, the exclusive event with throngs of cheering attendees — plus a gaggle of mostly bitter journalists eyeing each other suspiciously in fear of a missed exclusive.

To call it deja vu would be an overstatement, but Thursday night’s Model 3 unveiling was unlike anything I’ve felt since the last time I heard the phrase “one more thing” uttered on the stage at a certain campus in Cupertino, California. Actually, I found last night’s Model 3 unveiling far more engaging.

The commentary about the car has also been eerily evocative of the commentary that followed Steve Jobs’s launch of the first iPhone in 2007. Here, for example, is the venerable Financial Times, pointing out the problems and challenges that lie ahead:

Yet annual sales of pure electric cars still total a mere 550,000, a fraction of a per cent of the global fleet. There are still big barriers to overcome before they can become mainstream: battery technology has not improved as quickly as hoped; charging takes time; and other issues such as cars’ resale value would become more pressing if they become more popular.

If he succeeds in creating a buzz around electric vehicles and bringing them into the mainstream, he will be performing a public service.

Scaling up production will already be a test of Tesla’s business model and its finances. It is alone in making almost all its own components and selling direct to consumers, a strategy that soaks up cash. The affluent enthusiasts that bought its earlier high-end models were tolerant of delays, but those who purchase the Model 3 may be less able to wait if there are similar hitches — especially since any significant delay could mean they were unable to take advantage of US government subsidies that are due to be phased out.

All true, of course. But what I remember most about 2007 was how dubious many people (including yours truly) were about the Apple device. I mean to say: the mobile phone industry was a mature global industry, dominated by one huge company (Nokia) and a few sizeable ones (Motorola, Blackberry, et al); Apple had no experience in that market — a market that was dominated by the carriers, not the manufacturers; battery life was poor and you couldn’t even replace the battery, for God’s sake; there was no real keyboard; the screen was too small to give a satisfactory browsing experience; etc., etc.

All true too. And yet, all wrong, or at any rate irrelevant — because it turned out that none of that mattered once you realised that you could SSH into the damn thing.