Tag: iphone

Apple keeps ticking over

Once again Apple beats the market and shows the way to its competitors

Once again Apple keeps surprising the market with Apple second quarter results beating the analysts’ estimates roundly and putting the company on track to becoming the first US corporation to have a trillion dollar market valuation.

Coupled to nearly fourteen billion dollars in profit for the last quarter is that the company is looking to return $200 billion of cash back to shareholders.

A particular high point in Apple’s results are its China sales with the company showing seventy percent year on year growth, showing it’s possible for western companies to sell into the PRC.

Those results are from iPhone sales and, given the Chinese smartphone market is ruthlessly competitive, it puts the managers of all US and European companies on notice that there are no longer any excuses about not performing in the Middle Kingdom.

Another key takeaway from Apple’s results is the tablet market is limited with iPad sales down 23% compared to last year.

The question now is how big are watch sales going to be? It may well turn out that the Apple Watch is similar to the iPad – a market defining product but one that isn’t the company’s mainstay.

Regardless of how well the Apple Watch, the iPad or the iPhone’s Chinese sales perform next quarter, it’s safe to say Apple will probably break more records over the next year.

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A triumph over orthodoxy – Seven years of the iPhone

The Apple iPhone reinvented the smartphone and mobile internet industries. Can it also define the internet of things?

“Once in a while a revolutionary product comes along that changes everything.”

Those were Steve Jobs’ words when he launched the iPhone seven years ago.

It was a strong opening that was reinforced by the event’s tag line, “Today Apple reinvents the phone.”

It wasn’t an idle boast, the iPhone was a leapfrog development – using Jobs’ words – over the existing clunky smartphones and it changed the entire industry and spawned some new ones.

Smart Company’s Yolanda Redrup asked me for a few comments on her story on the iPhone’s birthday and her questions triggered some thoughts on just how the iPhone changed the mobile phone and telco industries.

A triumph over orthodoxy

Apple’s iPhone triumph was born out of the established players’ orthodoxy; companies like Nokia, Blackberry and Palm were wedded to the idea that a tactile QWERTY keyboard was essential for a smartphone.

Those keyboards took away nearly half the real estate on the phone, Jobs called it “the lower forty”, and it made surfing the net a painful task, let alone watching videos or movies.

Full featured keyboards made making calls difficult as well. One of the barriers of adopting smartphones was that using the things as phones was quite difficult.

By having software keyboard and dialling pads that only appeared when needed, Apple solved the problems that faced smartphone users.

Disrupting the telcos

The other orthodoxy in the smartphone industry was that the telcos were essential gatekeepers. Nokia and the other incumbents put the needs of telecommunications companies over users of their phones.

As a consequence email and web browsing capabilities of the existing smartphones were crippled as the telcos tried to lock their customers into their own proprietary networks rather that giving them access to the public internet.

With the iPhone, Apple broke out of that telco dominance and started to dictate terms to the phone companies. This wouldn’t have been possible if the iPhone hadn’t been a far better, and much more popular, product.

Building the app store

Another area where the iPhone disrupted the phone companies’ business was with the App Store. Every smartphone had its own add-on programs but they were expensive with poor functionality and developers had to build versions for every company’s operating system.

Both the telcos and the phone vendors could see that app stores were a potentially lucrative area but systemically failed to execute on the idea with clunky and expensive software.

The App Store showed how smartphones should work and coupled with music, another area where the handset vendors dismally failed, Apple is now earning over a billion dollars a month from iTunes.

Technological change

Some of the iPhone’s success was due to technologies maturing; earlier smartphones were crippled by slow data connections over 2G or CDMA networks and cloud computing, or software-as-a-service as it was then called, was just beginning to mature as a technology.

Cloud services and 3G connectivity meant the iPhone could hand off most apps’ processing needs to the service provider, something that the earlier smartphones couldn’t do because the technology wasn’t there.

That connectivity did come at a cost, the iPhone and its competitors created huge challenges for telcos as they struggled to meet the data demands of their enthusiastic web surfing customers.

Looking at the future

While the iPhone came to dominate the smartphone market, that dominance didn’t last as Google Android devices started to flood the marketplace. Now Samsung is as big a player as Apple and a wave of cheap Chinese products are now flooding the industry.

For Apple and the other smartphone vendors the opportunities now lie in the internet of things (IoT) as connected cars, workplaces and homes require a device to control them. That device is often the smartphone.

In the next few years the market battleground is going to be creating the applications, platforms and ecosystems around these IoT technologies and its no coincidence that Apple has partnered with BMW on providing software for their smartcar.

Jobs finished his iPhone presentation with the Wayne Gretzky quote, “I skate to where the puck is going to be, not where it has been” and committed Apple to always being where the market is going to be.

Where the market is going to be in the next seven years is anyone’s guess, but it would be dangerous to count Apple out.

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Steve Jobs’ golden path

Every tech product demonstration is theatre and Steve Jobs showed how it was done with the iPhone launch

“Today Apple reinvents the smartphone.” Steve Jobs announced at the 2007 Macworld Conference when he showed off the new Apple iPhone.

As with most of Jobs’ speeches, the iPhone launch was an impressive display combining the man’s talents, vision and technology to rally Apple’s adoring masses.

Last week the New York Times magazine had an excellent feature on the story behind the landmark launch of the iPhone. It’s worthwhile reading to understand the theatre that goes behind a major tech company’s launch event.

In the case of the iPhone, a myriad of tricks had to be performed to make sure the still being developed device didn’t fail in Steve Jobs’ hands during the launch – one can be sure the Apple founder wouldn’t have been as relaxed as Bill Gates when a Windows 98 system crashed onstage a decade earlier.

A key part of Jobs’ presentation was the ‘Golden Path’, a script that would showcase the iPhone’s features while avoiding known problems.

Hours of trial and error had helped the iPhone team develop what engineers called “the golden path,” a specific set of tasks, performed in a specific way and order, that made the phone look as if it worked.

Much to the relief of Jobs’ staff, the demonstration worked flawlessly and Jobs’ polished presentation showed why he was one of the most admired, if flawed, business leaders of his generation.

While most tech CEOs could never dream of emulating Steve Jobs, almost every one has a ‘golden path’ to show off their product in a new light.

Something we should remember when watching these demonstrations and the press coverage that follows is that most of them are carefully staged theatre and we should hang onto our wallets until well after these devices are on the shop shelves.

As it turned out, the iPhone was a spectacular success and did re-invent the smartphone industry. Along with being able to deliver a killer presentation, Steve Jobs was also good at driving teams to deliver his vision.

Steve Jobs image courtesy of Wikimedia.

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Cranking up the phone wars

Can Apple recapture its mojo with the next iPhone?

According to All Things D, Apple will be announcing their next iPhone on September 10.

With Samsung and Android phones steadily chipping away at Apple’s market share, it’s an opportunity for the company to recapture some of the brand’s allure after the passing of Steve Jobs.

The market will be expecting a stunning announcement. Should the company disappoint, the pundits will be calling the end of Apple’s dominance and we can expect the firm’s share price can also expect to get further punished with it already down 35% from the $700 peak of a year ago.

What Apple’s announcement will do is trigger another round of the phone wars as we approach the Christmas buying season. It might be a good time to buy a phone.

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ABC Weekend Computers – should you buy an iPhone 5?

On ABC Sydney this weekend we look at whether the new iPhone is for you.

With the usual hooplah, Apple announced their new iPhone last week. Should consumers drop their existing phones and buy the new iPhone?

On ABC 702 Sydney Weekend computers this Sunday, September 16 from 10.15am Paul Wallbank and Simon Marnie will be looking at the choices in the smartphone market.

Some of the topics we’ll discuss include;

We love to hear from listeners so feel free call in with your questions or comments on 1300 222 702 or text on 19922702.

If you’re on Twitter you can tweet 702 Sydney on @702sydney and Paul at @paulwallbank.

Should you not be in the Sydney area, you can stream the broadcast through the 702 Sydney website and call in anyway. Everyone’s views are welcome.

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Throwing down the gauntlet

The iPhone continues to disrupt once profitable markets

The interesting thing with Apple’s announcement of  the new iPhone and iPod was the emphasis on gaming with two demonstrations showing off the capabilities of the new devices.

While the iPod and iPhone can’t compete with gaming consoles in a straight out hardware comparison, customers like the idea of being able to play advanced games on their handheld devices.

More worryingly for the console manufacturers is the pricing in the App stores. The traditional gaming model of expensive games subsidising devices starts to fall over when 99 cent, or even $19.99 downloads kill the fat margins.

It’s not just games companies threatened by the iPhone and Android smartphones, probably the biggest threat from today’s launch is to Microsoft.

Last week’s botched Lumia 920 launch throws into stark relief how Windows Phone is struggling to meet its October release date.

The pressure is now right on Microsoft to deliver, the continued evolution of the iPhone is also leaving Blackberry and Motorola increasingly looking flat footed and vulnerable in a market that’s leaving them behind.

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The business of baffling choices

Why do computer and phone companies offer so many plans and models?

In his Daring Fireball blog, John Gruber’s takes to task the view that Apple suffers through not having a wide product range.

John makes the valid point that Samsung seems to stealing market share from HTC rather than Apple but the whole theory of offering too many choices strikes to the heart of two industry’s business models.

Those two industries are the mobile telco business and the Windows personal computer sector.

In the PC world, the wide range of models has been both an advantage and a weakness; it’s allowed Dell and others to create custom machines to meet customer needs but also leaves consumers – both corporate and home buyers – confused and suspicious they many have been taken advantage of.

All too often customer were being had; frequently buyers found they’d bought an underpowered system stuffed with software that either was irrelevant to their needs or an upgrade was necessary to get the features they hoped for.

The entire PC industry was guilty of this and Microsoft were the most obvious – the confusing range of operating systems and associated software like the dozen version of Microsoft Office was deliberately designed to confuse customers and increase revenue.

For the PC industry, the “baffle the customer” model reached its zenith, or nadir, with Windows Vista where Microsoft deliberately put out an underspecced ‘Home’ edition designed to push sales up the value chain.

Compounding the problem, most of the manufacturers followed Microsoft’s lead and put out horribly underpowered systems in the hope that customers would upgrade with more memory, better graphics card and bigger, faster hard drives.

Most customers didn’t upgrade and as a result the Vista operating system – which was horrible anyway – enhanced its well deserved reputation for poor performance.

In the telco sector, consumer confusion lies at the heart of their profitable business model; a bewildering range of phones and plans often leaves the customer spending too much, either through an overpriced plan or paying punative charges for ‘excess’ use.

Having a hundred different types of Android phone adds to the confusion and, by restricting updates, they can cajole customers into ‘upgrading’ to a new phone and another restrictive plan every year or so. This is why you get phone calls from your mobile phone company offering a new handset deal 18 months into a two year plan.

Apple’s model has been different; in their computer range there has never been a wide choice, just a few configurations that meet certain price points. The same model has used for their phones and iPads.

For Apple, this means a predictable business model and a loyal customer base. They don’t have to compete on price and they don’t have to fight resellers and telcos who want to ‘own’ the customer. It’s one of the reasons mobile phone companies desperately want an alternative to the iPhone.

Companies using the baffling choices business model – Microsoft, HP, Dell and your local mobile telco – may well continue to do okay, but that business model is coming under challenge as new entrants are finding new niches.

For all of us as consumers all we can do is make the choices that are simple are reject complexity. Warren Buffett has always maintained he doesn’t invest in businesses he doesn’t understand, perhaps we should have the same philosophy with the purchases we make.

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