Paul Wallbank – Brilliant Communications

Tag: apple

  • Holy wars and internet empires

    Holy wars and internet empires

    A regular topic of this blog has been the rise of the internet empires that want to lock users into their kingdoms.

    On the edges of these empires things can get ugly as the competing groups fight for supremacy and to capture users.

    In these wars, no-one was capable of getting uglier that Steve Jobs.

    Which makes Steve Jobs’ declaration that 2011 would be a year of Holy War with Google unsurprising.

    The statement typical Jobsian hyperbole, but we should under estimate just how serious Apple’s staff would take such a statement.

    Apple’s intention to wage ‘holy war’ illustrates just how high the stakes as the online empires try to capture users.

    Those Holy Wars and the reason they are being fought is something all of us should keep in mind when we’re asked to choose between Apple, Google or Microsoft.

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  • Apple’s long game

    Apple’s long game

    It’s always risky to make predictions about Apple, particularly when they are silly. The company plays a long game and isn’t known for panicked releases of me-too products.

    Time is ticking for Apple to announce an iWatch, say analysts is a good example of a silly prediction about Apple’s future products and something that’s quite rightly criticised by Daring Fireball’s John Gruber.

    As I’ve pointed out before, the watch market is tiny compared to the smartphone with the entire global wristwatch industry’s sales making up only one-seventh of Apple’s iPhone sales.

    Part of the problem with stories like CNBC’s is the tech media’s focus on consumer goods, particularly in the internet of things and wearable technology markets.

    Analysts like those quoted in CNBC’s story fall for this fallacy and overlook that the IoT market profits are going to come from the backend, B2B applications of the technologies.

    With Apple we’re already seeing this with iBeacon being deployed in sports stadiums and shopping centres – Apple’s recent partnership with United Airlines to provide inflight entertainment is another step towards locking up business deals.

    There’s no doubt those business deals will flow into the consumer market and an iWatch may well be part of Apple’s longer plan to lock customers into their products.

    However claiming Apple have 60 days to launch an iWatch is plain silly, particularly when you have a company with a track record of not being panicked into launching me-too products and playing the long game.

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  • Avoiding the smartphone commodity trap

    Avoiding the smartphone commodity trap

    HTC’s announcement that the company going to focus on lower margin, mid market smartphones illustrates the maturing of the phone marketplace.

    Smartphones have been a huge, and immensely profitable, business for cellphone manufacturers however the devices are now becoming a commodity as the high end western markets become saturated and cheaper devices start to enter the marketplace.

    Having been comprehensively defeated in the high end marketplace by Samsung and Apple, Taiwanese manufacturer HTC hopes to make money in the lower end of the market.

    For HTC it’s questionable how profitable these cheaper markets will be; rebates to telcos and distributor markups tend to eat up most the margin while pushing up retail costs.

    The biggest factor of all though is the entry of newer Chinese businesses into the market, it’s going to be a tough for the Taiwanese manufacturer to compete with these suppliers.

    Even Apple and Samsung are being affected by the slowing demand for high end smartphones.

    HTC’s dilemma would be familiar to most electronic manufacturers; the high end of the market is a narrow niche – the premium smartphone market, like PCs, is dominated by Apple – while the other suppliers fight not to find themselves locked into the commodity end of the market.

    For HTC the trap is not to fall into the commodity trap; although it’s hard to see how they’ll do this in a smartphone market that’s increasingly becoming a low margin, high volume game where, like the PC market, there is no middle ground.

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  • Lowered expectations – What is the future for Apple?

    Lowered expectations – What is the future for Apple?

    Last Friday I had a story in Business Spectator on the future of Apple in light of the company’s warning of a 20% fall in revenue next quarter.

    The clear message from Apple’s executives was that the company is facing a terminal decline in iPod sales and the iPhone – it’s most profitable and highest selling product – is facing slower sales.

    So the search is on to find something that will replicate the iPhone’s success, with the biggest candidate being the iWatch.

    The problem with that is the entire wearable technology market is only forecast to be $6bn which is a seventh of Apple’s $42 billion profit last year, so the iWatch can never replace falling iPhone sales.

    It may well be for Apple that the period of massive profits and growth is drawing to an end, it doesn’t mean the company is dying – for a start they has nearly $200bn in cash reserves and a healthy $150 billion in sales each year.

    Short of Tim Cook unveiling something similar to the iPhone, the future for Apple is probably going to be a bit modest than past few years of huge growth, that’s not a bad thing.

    Rather than being the end of Apple, it’s more a revision to the role the company has held for most of it’s existence – a high profit, niche business that sells on quality and brand rather than fighting in the commodity markets.

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  • Milestones of the personal computer industry

    Milestones of the personal computer industry

    “There have only been two milestone products in our industry to date,” Steve Jobs told the Boston Computing Club in 1984. “The first was Apple II in 1977 and the second was the IBM PC in 1981.”

    Jobs at the time was announcing the third breakthrough – the Apple Mac – which turned 30 last week.

    Looking back over the four decades of the PC industry, Jobs’ claim that the Apple Mac was the sector’s third milestone stands up to scrutiny, however the greatest milestone of all for the PC was the launch of Window 3.0 in 1990.

    The rise of Windows

    Windows 3.0 changed the business model of the industry, it established software vendors – particularly Microsoft – as being dominant over hardware manufacturers, that shift nearly killed Apple and eventually sent most PC builders to the wall.

    Microsoft’s advantage over Apple, IBM, Atari and dozens of other systems, was that users weren’t locked into one vendor’s products. It was possible

    The Windows 3.0 milestone was even more important in that it forced a shakeout in the software industry as well, many of the incumbent vendors – most notably WordPerfect – though the Windows Graphic User Interface (GUI) was a flash in the pan and that most office workers would prefer to use keyboard instructions rather than mouse clicks.

    WordPerfect was horribly, horribly wrong in judging the market and by the time they released the Windows versions of their product Microsoft had captured key market share for Word and the bundled Office suite that dominates the business world today.

    Going mobile

    So things were good for Microsoft until the next milestone, which again was marked by Steve Jobs, the launch of the iPhone genuinely did change the smartphone industry and was the first inkling of mobile would eventually destabilise the PC sector.

    It’s interesting comparing Jobs’ iconic 2007 iPhone which sets the standard for product launches with the somewhat rough at the edges 1984 Boston presentation although both show how Steve Jobs was a master salesperson and a passionate believer in his products.

    The PC’s final milestone

    Three years later Steve Jobs delivered the milestone product that marked the beginning of the end for the PC industry, the iPad finally delivered a mobile computing device that businesses and consumers wanted.

    Apple’s iPad also marked a fundamental shift in the computer industry – no longer did the software companies control the market, power had shifted back to the manufacturers.

    From that moment on the PC, and Microsoft’s Windows business, started a terminal decline.

    The rise and fall of the personal computer is a great illustration of a transition technology. That Steve Jobs bookmarked the beginning and the end of the PC industry is an interesting note about a technology that changed the home and workplace.

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