Tag: apple

Revitalising the tablet market

Ahead of tomorrow’s announcements by Apple, the strategic leaks are happening fast on both the next version of the iPad and Google’s Nexus appearing in the media today.

The problem for tablet manufacturers is that sales have stagnated in recent times with the products no longer flying off the shelves.

Part of the reason for this is customers are happy with their existing products; a three year old tablet will do most of things a brand new one will do so there’s little reason for upgrading.

For vendors like Apple and Google it’s further proof that the PC industry model of three year upgrades is firmly dead, the sector will need something more than planned obsolescence to drive growth.

Attacking Apple iPhone 6

Attacking Apple is not the way to beat them in the marketplace

One of the saddest things in life is the company that bleats ‘but we thought of it first’ when overtaken by a smarter or more credible competitor.

Since the release of the iPhone 6, the knives are out for Apple with Samsung, HTC and even Sony poking fun at the new product pointing out the features already in their products.

The problem for Apple’s competitors is the market isn’t listening to the attack ads. In China alone a million iPhones were sold in first hour they went on sale.

For companies competing with Apple they have to find a compelling product, not be sniping at the market leader. For Samsung in particular with its falling revenues it needs to be generating some excitement in the market, not depressing its customers.

Here’s the Samsung ad; while it’s pointing in the wrong direction it’s good in that it holds the critics to account but it makes not a spit of different to the marketplace.

iPhone ME — Apple risks becoming the new Microsoft

Is Apple’s current inattention to detail a worrying trend?

It’s been a tough week for Apple, after the spectacular launch of the iPhone 6 the company has had two humiliating and worrying setbacks that indicate standards may be slipping at the once untouchable giant.

The iPhone 6 Plus should have been a triumph, and for a while it was, but the news the phones bend and distort has tarnished the product.

Compounding the bendable phone problem are the claims users are being charged to replace their damaged handsets.

On its own this problem might have been manageable like the iPhone4’s antenna problems in 2010, however today’s news that the latest iOS8 has had to be withdrawn after user complaints indicates a sloppiness has crept into the company.

Both problems, or all three problems if it turns out the stories of Genius Bars charging to replace damaged phones, show Apple isn’t paying attention to detail to the degree they’ve become known for.

The botched iOS8.0.1 rollout is sloppy work while the bendable phone is very much an uncharacteristic lapse in design.

For a premium brand with a large dose of arrogance, shipping defective products is both an embarrassment and damages the company’s name.

This inattention to detail is horribly reminiscent of Microsoft’s horror days at the turn of the Century where the company repeatedly rushed incomplete products to market — Windows ME being the most notorious example.

So maybe we are seeing Apple become the new Microsoft and the iPhone 6 Plus as the Windows ME of our time.

That doesn’t mean we’ll see the end of Apple, Microsoft is still a huge corporation, but it may be the tech industry’s most iconic business is beginning to lose its edge.

Image of Steve Jobs and Bill Gates via Wikipedia

Time to strike deals

It’s time to strike deals as banks and other big businesses start to feel the effects of global competition

It didn’t take long for the competition in the payments market to heat  up after the announcement of Apple Pay last week as PayPal launched a campaign asking if you’d trust your financials to a business who can’t protect your selfies.

While PayPal  pokes fun at Apple, there are more serious competitive pressures developing as the companies start negotiating with credit card providers and banks to reduce their rates. This is something that will be an immediate benefit for businesses of all sizes who are prepared to renegotiate their contracts.

Most businesses, big and small, are poor at monitoring what they pay for a service; while they’ll shop around and negotiate when they’re looking for provider, they’ll let often these contracts go for years without reviewing them – something that utilities like banks, telcos and power companies take advantage of.

I was reminded of this earlier this week at a lunch with some senior Qantas accountants who were quite open about how every supplier’s contract was constantly reviewed and discounts were aggressively pursued. It’s a tough life for the airline’s subcontractors.

Times are tough for Qantas though, having sustained a 2.8 billion Aussie dollar loss last year along with constant declines in market share and stock prices. So it’s not surprising they have an aggressive cost cutting strategy in place.

Many other industries are now looking at the same problem as the global economy is now in a phase of at best anemic growth for the foreseeable future, which makes it essential for all businesses to start reviewing their costs.

With the banking sector now being disrupted by companies like PayPal and Apple, it might be time for all businesses to ask some hard questions of their banks and payment providers. The time is right to strike a deal.

Changing the payments industry

The effects of Apple Pay are being felt by the payments industry

It didn’t take long for the effects of Apple’s payment service to be felt by the industry, within a day of the announcement Bloomberg reported Apple is negotiating with US banks to shift transaction fees from merchants.

At the same time Bank Innovation reports the major credit card companies are considering changing the definition of ‘cardholder present’ rules which would make app based purchases cheaper.

The changes Apple Pay is bringing in is part of a wider move to easier, frictionless commerce as Stripe co-founder John Collison discussed on this site last week.

For the banks and credit card companies this means a very different operating environment. What was once a very profitable business is now changing rapidly and profits may not be so easy to come by.

Apple and the long game

Apple’s real game is in controlling a large part of the payments industry and the internet of things. The iPhone6 and watch are key steps in that strategy.

As expected, Apple announced their new range of iPhones and a smart watch today with many digital trees being felled as the tech media falls over to describe all the shiny features of the new devices.

Buried in Apple’s announcements though are the company’s real long game in payments and the Internet of Things.

For the IoT, the various ‘kits’ Apple have announced in the last year — HomeKit, HealthKit and now CloudKit — are the serious plays in this space as they bundle together programs, devices and data streams across health and smarthome applications.

CloudKit moves Apple onto another level as it makes it easier for developers to build back end applications that tie into smart devices; even if someone isn’t using Apple equipment they still may find themselves firmly in the walled garden of Cuptertino.

The long awaiting release of Apple Pay leverages iTunes’ strength as a payment platform, bundling a secure chip into the new iPhone adds to the company’s pitch of being a trusted partner to merchants and payments processors.

What today’s announcements of new hardware, software and APIs indicate is Apple’s shoring up the perimeters of its walled garden.

For it’s competitors, this raises the ante; Google Wallet has nothing like the market penetration or customer acceptance that iTunes has and earlier this week Amazon effectively admitted the Fire smartphone has been a failure by slashing prices. Facebook has made promising noises about payments but still remains locked in an advertising driven business model.

While there’s no doubt the new iPhone will be a success, although the jury is out on the smart watch, Apple’s real game is in controlling a large part of the payments industry and the internet of things. Today’s announcements are a key step in that strategy.

How Apple will have to think differently about the smartwatch

How Apple will have to think different about the smartwatch

Unsurprisingly the hype ahead of Tuesday’s media announcement by Apple is reaching a crescendo, with the consensus being that a smart watch will be the day’s main announcement.

The constant stream of targeted leaks by Apple to friendly outlets is quite tiring, however one thing that will be fascinating if all the stories are true is the software the device will run.

As Microsoft have discovered, the idea of running the same operating system across all devices just doesn’t work.

While how users interact with the devices will be the main factor, the most immediate problem will be power. If Apple Insider’s report that prototypes need to be recharged twice a day is true, then the limitations of smaller batteries are going to be considerable and software is going to have to be much more stingy with power usage.

The other big challenge for the iWatch, if that’s what it’s called, is the entire global watch market is a tiny fraction of the smartphone industry so expectations Apple’s new product will replace smartphones and tablets as a huge growth driver for the company are probably misguided.

So it’s good for Apple and its acolytes that the iPhone6 will probably be announced as well. If this has the features expected, then its likely to give the company’s slowing smartphone sales a boost.

Regardless of what’s announced on Wednesday, Apple does have the luxury of being one of the most profitable and richest companies on the planet. if a smartwatch is the major new product they have the resources and time to finesse the product and its software.

 

Apple’s security challenge

As Apple move into the internet of things, they are going to have to take cloud security more seriously.

This week’s news about celebrities’ personal photos being stolen from their iCloud accounts would be irritating Apple ahead of their September 9 media event.

Unfortunately for Apple they seemed to have walked into this by making things convenient for users rather than enforcing strong security measures.

As Arik Hesseldahl in Re/Code describes, this breach was probably due to Apple not encouraging two factor authentication and not limiting the number of password guesses.

The latter is particularly irritating as it shouldn’t be hard for a system to pick when a brute force attack — a computer guessing a password millions of times a second — is being staged against a user.

It’s also trivial to limit the number of guesses as most other services do.

For users, the best protection is to have complex passwords which reduces the effectiveness of brute force attacks. It’s also worthwhile being careful with your personal nudie photos.

The consequences of having your iCloud account compromised are more than just losing your embarrassing photos, Wired’s Mat Honan had his entire digital life hijacked through this method two years ago.

With Apple aspiring to control the smarthome and smartcar markets, the consequences of accounts being breached becomes exponentially greater. These are issues Apple and the rest of the internet of things industry need to take seriously.

Hopefully at Apple’s big media event next week, some brave journalist will stand out of the assembled masses of sycophant hacks and ask CEO Tim Cook some hard questions about security on the shiny new iDevices.

Frenemies in the age of tectonic shifts

In an age where business is changing dramatically it’s worth keeping your rivals close.

“Apple lives in an ecosystem,” Steve Jobs told the 1997 MacWorld conference. “It helps other partners and it needs the help of other partners.”

A few minutes later Jobs unveiled Apple’s deal with Microsoft, much to the disgust of many of the company’s true believers in the audience – something not helped by Bill Gates appearing on video midway through the presentation.

“We have to let go of the idea that for Apple to win, Microsoft has to lose;” said Jobs after the booing died down.

I was reminded of Jobs’ and Gates’ deal when talking to Pat Gelsinger, the CEO of virtualisation software company VM Ware at their annual VM World conference in San Francisco this week.

Gelsinger was discussing the myriad deals VM Ware has made with companies that are their superficially their rivals as markets radically change. The company has even gone as far to embrace the open source Open Stack that was originally set up as competition to VM Ware’s proprietary technology.

“The idea of frenemies – or co-competition – isn’t new to the IT industry.” Said Gelsinger, “as we are in this period that we’ve called the tectonic shifts that are underway.”

“All of us need to be somewhat careful about who’s our friends and who’s our enemies as we go through that period and be as nice as we can to everybody because who’s our friends and who’s our enemies in six months or twelve months could change a whole lot.”

That lesson has been harsh in the IT industry as various unstoppable businesses have found the market has shifted rapidly against them. A process that’s accelerating as cloud computing changes the software industry.

“I always quip that ten years ago or fifteen years ago Sun would have been buying Oracle. Those shifts can occur quite rapidly,” Gelsinger says.

VM Ware itself is on the brunt of one of those shifts as its core business of creating virtual services in company’s data centres is being disrupted by cloud computing companies like Amazon, Google and – ironically – Microsoft.

Adapting to that changing market is the key task for Gelsinger and VM Ware’s management team, “our philosophy has been about doing the right thing that technology enables us to do.” Gesliner states, “do the right things for our customers and enable the ecosystem to join us on the journey.”

For companies like VM Ware and Microsoft no-one predicted that one of their biggest threats would come from an online book retailer, yet Amazon Web Services has upended the entire software industry.

The challenges for VM Ware today or Apple nearly two decades ago are being repeated in many other industries as competitors appear from unexpected directions, which is why it’s important not to ignore and sometimes co-operate with your competitors.

We shouldn’t also ignore the other main reason why companies like Apple, Microsoft and, possibly, VM Ware have survived massive market shifts over time – a deep and loyal customer base.

Understanding and responding to your customers’ needs is possibly the greatest management skill needed in every business today. Are you listening to what your market is telling you?

Paul travelled to VM World in San Francisco as a guest of VM Ware

Picture of Steve Jobs and Bill Gates via Joi Ito on Flickr

Reaching Peak Tablet as iPad and android sales begin to plateau

An electrical retailer’s financial results might mark turning points in two different economies.

Today Australian electronics retailer JB Hi Fi released its annual results. They confirm what’s been becoming apparent over the last year that tablet computer sales seem to have peaked.

A plateauing of tablet sales is bad news for retailers like JB whose stock price fell by 8% on the news.

It’s not surprising that tablet computer sales have peaked as the growth had been spectacular and, unlike PCs of a decade ago, there isn’t an obvious five year replacement cycle.

That the old PC industry business model doesn’t apply to tablets is why Apple is focusing on other revenue sources like the App Store and internet of things plays such as HomeKit and HealthKit.

Once again, the industry leaders are finding they have to pivot to stay up with a rapidly evolving market.

The other notable point from JB’s management was that Australian consumer confidence is tanking, which might indicate the economy is entering its first recession in twenty years.

If it is true that the Aussie economy is entering a recession, then it might be time for the adults to take charge in a very immature government. Some of the Liberal Party’s pampered princelings may have to start earning their salaries soon.

Apple builds the iHome

Apple makes its stake for the smarthome while Canada builds the smart fridge

On the seventh anniversary the release of the iPhone, Apple makes it clear they see smarthome as the next opportunity.

The latest Apple ad showcases the iPhone at the centre of the connected home controlling baby monitors, GPS enabled pet collars and smart lights. The massage is Apple’s iHome brings families together.

While Apple is showing its cuddly side, those vendors who think an iHome is going to a great opportunity may well find they’re working with a ruthless competitor as reports claim Apple is about to launch its own range of smart home devices.

Meanwhile in Canada, they have better things to do with smart kitchen appliances…..

Amazon and the battle for your pocket

Will an Amazon phone succeed in tethering customers to the company?

Today Amazon is expected to launch a smartphone which the New York Times suggests will tether consumers to the company.

With 240,0000 apps in its Kindle store, Amazon will be formidable competitor to Google Android devices and Apple. Like iTunes, Amazon also have a strength in already knowing the customer’s credit card details.

The question is can Amazon be trusted? As we see with the Hachette book publishers dispute, Amazon is a company that’s ruthless in bullying suppliers and has a mandate to do so from its shareholders.

With the smartphone becoming the centre of the connected lifestyle, the stakes are high as whoever controls the customer’s pocket controls the customer’s smarthome, smartcar, retail and health applications.

Of course whoever wins this battle, they’ll still have to pay Microsoft for patents.