Apple's New Market(stratechery.com)
stratechery.com
Apple's New Market
http://stratechery.com/2015/apples-new-market/
12 comments
Carriers in the US are already moving away from the subsidized model. Verizon has the Edge program where you make monthly payments on the phone for the duration of your contract, but interest-free. Your payments are setup to last the full length of the contract, if you would like to leave the contract, all you have to do is pay the rest of the balance you owe on the phone.
T-Mobile does the same thing.
You can also buy unlocked iPhones directly from Apple. I've done it 4 times - 3G, 4S, 5C and now the 6. I bet Apple sells millions of them at full price, even in countries where subsidies are available.
You can also buy unlocked iPhones directly from Apple. I've done it 4 times - 3G, 4S, 5C and now the 6. I bet Apple sells millions of them at full price, even in countries where subsidies are available.
One of our networks in Switzerland (Sunrise) has a really innovative subscription model: They give you a cheapish subscription that's completely independent of the phone (~25-40$/m depending on whether you need unlimited free calls etc.) and which you can cancel/modify with every month. Then they offer you a leasing contract for your phone where you choose yourself how many monthly payments you'd like to make (payment per month inverse proportionate to the contract duration). At the end you can have about the same total cost of ownership as before, but you're much more flexible. The leasing contract amounts to ~5-8% interest on the upfront price for the whole duration and it's not dependent on how you set it up.
So, I wonder how many people will opt to just buy it up front now, when the subsidy isn't hidden anymore. It could also have a negative impact because some people will find it too complicated, however the widely trusted consumer review and comparison sites all give it a big thumbs up, so I think many will figure out why it's better.
So, I wonder how many people will opt to just buy it up front now, when the subsidy isn't hidden anymore. It could also have a negative impact because some people will find it too complicated, however the widely trusted consumer review and comparison sites all give it a big thumbs up, so I think many will figure out why it's better.
Finnish telecoms have mostly abandoned tying the phone to a mobile plan, just a few years after they were given that right by law. My personal guess as to why, is that they want to offer longer financing plans than the maximum of 24 months allowed for carrier-locked phones – with plans up to 36 months common.
Apparently the seller of an expensive phone like iPhone gets a decent chunk of money at market prices, because it's common for carriers not to take any interest with their financing plans – i.e. the phones costs the same bought upfront as they do over 36 monthly payments. The phone itself is in no way locked to any specific network.
Apparently the seller of an expensive phone like iPhone gets a decent chunk of money at market prices, because it's common for carriers not to take any interest with their financing plans – i.e. the phones costs the same bought upfront as they do over 36 monthly payments. The phone itself is in no way locked to any specific network.
"Free Mobile" in France works the same way; but I don't know the proportion of iPhones on their network.
T-Mobile in the US is pretty similar. The service plan is no-contract and can be changed every month (perhaps intra-month, I have done some dynamic changes and it seems to take effect in the middle of billing cycles). The hardware payment is separate with a fixed no-interest cost spread over 2 years. The hardware is the same cost if you buy it up front or spread payments out over the 2 year period.
> They have been disrupted in markets where phones compete on price.
Just not true.. Here's how they're doing in China: http://i.imgur.com/cVKCJmO.png
And their global marketshare is dramatically increasing in spite of nearly ubiquitous dirt-cheap android competition: http://i.imgur.com/QbUmJkk.png
(From Benedict Evans' excellent blog: http://ben-evans.com/benedictevans/2015/1/27/chart-dump-appl...)
Just not true.. Here's how they're doing in China: http://i.imgur.com/cVKCJmO.png
And their global marketshare is dramatically increasing in spite of nearly ubiquitous dirt-cheap android competition: http://i.imgur.com/QbUmJkk.png
(From Benedict Evans' excellent blog: http://ben-evans.com/benedictevans/2015/1/27/chart-dump-appl...)
This link(http://www.reuters.com/article/2014/01/17/us-apple-chinamobi...) indicates subsidy model is present in China.
In India we don't have any subsidy, i think Apple is share is less then 5%. They even tried to sell few year models at cheap rates to increase share. IPhone6 cost around $900 here. At those rates would it be a big hit anywhere without subsidies?
That link is outdated, Chinese subsidies were significantly cut for Apple's strongest quarter last year (Q4). Additionally, Tim Cook specifically called out that 80% of iPhones in China aren't subsidized:
http://www.patentlyapple.com/patently-apple/2014/10/apples-c...
Most of Europe doesn't subsidize cellphones, and Apple is doing phenomenally in nearly all of Europe:
http://www.dailytech.com/iPhone+6+Drives+Apple+Market+Share+...
http://www.patentlyapple.com/patently-apple/2014/10/apples-c...
Most of Europe doesn't subsidize cellphones, and Apple is doing phenomenally in nearly all of Europe:
http://www.dailytech.com/iPhone+6+Drives+Apple+Market+Share+...
It's debatable if there are any real subsidies. My last but one iphone I bought for £99 plus 24 contacted payments of £38 each over the next couple of years = £1011. The next I bought for £529 cash. Thinking the first payment plan is a subsidy only really works if you don't understand maths.
That £38 included voice and data service, I hope... In principle it should be possible for the operators to offer you a better deal this way, though in practice they don't really have to, it seems.
Where have they been disrupted? There are places they've always done worse at but they aren't making 90% of industry profits last quarter just becuase of one region.
We've heard the tired argument before that Apple won't be able to sell in places like China that don't have a subsidized market. How's that prediction actually working out?
We've heard the tired argument before that Apple won't be able to sell in places like China that don't have a subsidized market. How's that prediction actually working out?
Strange that he thinks Xiaomi is the company of reference for this gigantic new market, when Google has very good alternatives for each one of the services. Whatever you might think of the Google versions, hard to see how Xiaomi will get more traction than Google outside of China.
Homekit -- Google Nest with Android Home.
Carplay -- Android Auto, not to mention what crazy things the self driving cars research will provide.
Apple Pay -- Google Wallet
Siri -- Google Now
HealthKit -- Google Fit
EDIT: BTW, I see that his refutation of Christensen hinges on the nebulous "user experience". It is not clear what "user experience" or the often repeated most Apple-like quality "design" actually entails. For a very good analysis of the pitfalls of just using “design” as a strategy to create market-defining products at Path, Dropbox, Square, Medium is by a designer
http://mokriya.com/designer-duds-losing-seat-table/
Why Apple is successful today, when its core principles have remained pretty much constant over the entire history is to be found outside Apple.
Homekit -- Google Nest with Android Home.
Carplay -- Android Auto, not to mention what crazy things the self driving cars research will provide.
Apple Pay -- Google Wallet
Siri -- Google Now
HealthKit -- Google Fit
EDIT: BTW, I see that his refutation of Christensen hinges on the nebulous "user experience". It is not clear what "user experience" or the often repeated most Apple-like quality "design" actually entails. For a very good analysis of the pitfalls of just using “design” as a strategy to create market-defining products at Path, Dropbox, Square, Medium is by a designer
http://mokriya.com/designer-duds-losing-seat-table/
Why Apple is successful today, when its core principles have remained pretty much constant over the entire history is to be found outside Apple.
You should read Thompson's article "Xiaomi's Ambition" (http://stratechery.com/2015/xiaomis-ambition/ and linked from this article).
Basically, he argues that Xiaomi is built around serving a market that neither Apple or Google are serving: young people that are technically savvy but don't have the funds to be early adopters. There's a whole generation of them in China that have grown up during China's boom. There aren't many of them in the US, but that's not the same thing as "outside of China." Xiaomi will probably find a lot of fans in South Asia (particularly India), South America (Brazil) and Africa (Nigeria, South Africa).
Basically, he argues that Xiaomi is built around serving a market that neither Apple or Google are serving: young people that are technically savvy but don't have the funds to be early adopters. There's a whole generation of them in China that have grown up during China's boom. There aren't many of them in the US, but that's not the same thing as "outside of China." Xiaomi will probably find a lot of fans in South Asia (particularly India), South America (Brazil) and Africa (Nigeria, South Africa).
Wasn't Xiaomi temporarily banned in India because of concerns that it is uploading data to China? This lack of confidence is going to be a roadblock if the end goal is take over the home. My understanding is that Xiaomi sells very little in India (some flash sales in tens of thousands of units). I know it is a smash hit in China. We'll just have to see.
Xiaomi was banned over patent issues for like a week before they resolved it.
The issue you are referring to, the Indian Air Force "warned" the use of Xiaomi devices because they tracked them uploading data to China. Xiaomi responded with an update which had one-click Mi Cloud turn off switch to stop that from happening. They were uploading meta data for their cloud services just like any other company. Xiaomi also announced a new datacentre in India to mitigate this concern. But they never got banned over this.
Xiaomi sold less than 2 million devices in India in 4-ish months. But to put things in perspective, they sold 8-9 times more than Google's Android One phones, another program targeting the same market. They sold the flagship Mi3 only for a couple weeks and then continued selling lower end device. They are launching Mi4 here this month, so that number will now probably go higher.
The issue you are referring to, the Indian Air Force "warned" the use of Xiaomi devices because they tracked them uploading data to China. Xiaomi responded with an update which had one-click Mi Cloud turn off switch to stop that from happening. They were uploading meta data for their cloud services just like any other company. Xiaomi also announced a new datacentre in India to mitigate this concern. But they never got banned over this.
Xiaomi sold less than 2 million devices in India in 4-ish months. But to put things in perspective, they sold 8-9 times more than Google's Android One phones, another program targeting the same market. They sold the flagship Mi3 only for a couple weeks and then continued selling lower end device. They are launching Mi4 here this month, so that number will now probably go higher.
I'd hazard to say that the nebulous "user experience" advantage for Apple boils down to consistently committing to integration of a handful of products.
Google seems to have an iterative sink or swim approach with many products (often overlapping) and to a lesser extent, so does Amazon.
Google seems to have an iterative sink or swim approach with many products (often overlapping) and to a lesser extent, so does Amazon.
> I'd hazard to say that the nebulous "user experience" advantage for Apple boils down to consistently committing to integration of a handful of products.
This is a good example of what I'm talking about. You have redefined user experience to mean something that most people will not think of. Even giving you that, look at the current iPhone setup. Leaving aside the carrier aspect, you can buy worldwide a new
iphone 4s,5c,5s,6,6plus in multiple colors and sizes.
basically 3.5", 4", 4.6" and 5.5" screen for a phone. With prices points from $250 to $1000 in minor increments. In contrast, Google has only one phone currently on sale the Nexus 5. The 'focus', 'handful of products' mantra is repeated but is not true. Frankly, the only thing missing is the stylus and adding it would cover the entire gamut.
This is a good example of what I'm talking about. You have redefined user experience to mean something that most people will not think of. Even giving you that, look at the current iPhone setup. Leaving aside the carrier aspect, you can buy worldwide a new
iphone 4s,5c,5s,6,6plus in multiple colors and sizes.
basically 3.5", 4", 4.6" and 5.5" screen for a phone. With prices points from $250 to $1000 in minor increments. In contrast, Google has only one phone currently on sale the Nexus 5. The 'focus', 'handful of products' mantra is repeated but is not true. Frankly, the only thing missing is the stylus and adding it would cover the entire gamut.
The 4S, 5C/S, and 6/6Plus are all from separate years. It's not like Apple is refining the 4S and coming out with new versions of those devices. The only phones in their lineup is the 6 and 6 Plus. Using different storage sizes and device colors is barely going to make an impact in terms of spreading out priorities and losing focus.
Google only has one phone because that phone isn't even supposed to make money. It's a phone meant for Android developers both internally and third-party. Google may not lose focus from all the other handset manufacturers creating the thousands of different Android devices, but they certainly have a difficult time with integration.
Google only has one phone because that phone isn't even supposed to make money. It's a phone meant for Android developers both internally and third-party. Google may not lose focus from all the other handset manufacturers creating the thousands of different Android devices, but they certainly have a difficult time with integration.
What difference does it make if they are from the past. They are produced and shipped today, components have to be updated, they are sold today, their supply chains have to be managed today, iOS has to run on them today, they get the same warranty and customer support that 6 and 6 plus have. Right now, 75% of their phones are NOT 6 or 6 plus. It takes people and focus to do all of this.
EDIT: The way you are talking about 4s it would seem Apple only has a design team, once something is designed everything else happens automatically.
EDIT: The way you are talking about 4s it would seem Apple only has a design team, once something is designed everything else happens automatically.
> It's not like Apple is refining the 4S and coming out with new versions of those devices.
Actually, they are. You think the BOM hasn't changed? You think it's the exact same components being shipped from the exact same suppliers?
The specifications are the same, but the components are newly manufactured. I'm sure the BOM has rev'd. It's a mistake not to consider phones as part of their lineup which you can buy new, just because they have lesser specs and were initially released a few years ago.
I think this is an important part of Apple's strategy, which comes specifically from the way they maintain iOS, which other vendors have largely missed out on.
Actually, they are. You think the BOM hasn't changed? You think it's the exact same components being shipped from the exact same suppliers?
The specifications are the same, but the components are newly manufactured. I'm sure the BOM has rev'd. It's a mistake not to consider phones as part of their lineup which you can buy new, just because they have lesser specs and were initially released a few years ago.
I think this is an important part of Apple's strategy, which comes specifically from the way they maintain iOS, which other vendors have largely missed out on.
User experience is difficult to measure, which means companies that focus on it from a numbers perspective often miss the point.
Turns out actually meeting a market need is important (Path), having a functional business model (Square), knowing your target customer (Dropbox), and we'll see with Medium.
User experience is a differentiator. It's not the only thing.
User experience is a differentiator. It's not the only thing.
It's really hard to build a case against disruption theory, using a single product, especially when the competition has only been "good enough" just since the last year or so, with kitkat and apps using its design language, while there are other strong factors keeping iPhone strong, be it strong brand, stronger app ecosystem, and various lockup effects.
But I'll be happy to be proven wrong with other examples for Thompsons theory.
But I'll be happy to be proven wrong with other examples for Thompsons theory.
Technology has a delayed effect. As in what was high-tech back then is low-tech now. Computers have finally become low-tech.
Apple is top heavy, the ones in charge are the ones that scraped to the top and didn't retire or leave. They have with them the ideas that came about and pioneered in the 60's and 70's and are only finally now being in the position and getting around to implementing them.
Underneath them is a cadre of management that grew up and holding on to ideas from the 80's and 90's and only are now in a position to suggesting them to someone else with more power and abilities and getting the okay to try them.
Apple is really a stack of computing ideas from the 50's, 60's, 70's, 80's, and 90's. Starting with the Macintosh derived from the mother of all demos to now we're finally getting around to implementing the idea of a central mainframe with diskless devices accessing it.
A "cloud" with black mirrors everywhere giving you value? Oh, my, that sounds like what Larry Ellison saw as the future with the Network Computer back in 1996.
I'm old though. Accepting this new reality that this red-headed stepchild of a computer we used to argue about during elementary school recess about which is better turns out to become the most valuable company in a world and is finally in a position to push through something as magical as instant access to computing everywhere.
That is freakin' amazing.
Apple is top heavy, the ones in charge are the ones that scraped to the top and didn't retire or leave. They have with them the ideas that came about and pioneered in the 60's and 70's and are only finally now being in the position and getting around to implementing them.
Underneath them is a cadre of management that grew up and holding on to ideas from the 80's and 90's and only are now in a position to suggesting them to someone else with more power and abilities and getting the okay to try them.
Apple is really a stack of computing ideas from the 50's, 60's, 70's, 80's, and 90's. Starting with the Macintosh derived from the mother of all demos to now we're finally getting around to implementing the idea of a central mainframe with diskless devices accessing it.
A "cloud" with black mirrors everywhere giving you value? Oh, my, that sounds like what Larry Ellison saw as the future with the Network Computer back in 1996.
I'm old though. Accepting this new reality that this red-headed stepchild of a computer we used to argue about during elementary school recess about which is better turns out to become the most valuable company in a world and is finally in a position to push through something as magical as instant access to computing everywhere.
That is freakin' amazing.
I share the feeling, but at the same time Apple seems to be what Sony was back in the day. They have central very successful products, and are spreading their influence in numerous new markets while betting a lot on artificial restrictions keeping users in their ecosystem.
Sony wasn't the biggest company in the world I think, and the game was a lot more primitive back then, but I remember owning a walkman with a Cybershot, a Sony music compo and at the end a matching laptop because all of there where integrated. If I had the money at the time I'd bought a Handicam and a matching TV in a heartbeat.
Sony seemed unstoppable, until the pieces just crumbled; there would be way better laptops, the camera market evolved and there were far from keeping in touch with the best players in the field, then the music industry moved on, and keeping the integration going on becomes more and more compromising.
With today's Apple, while they are spreading, the same cracks seem to appear to me.
They still have very competitive products on each market, but these are more and more compromised as deep design decisions are made and the competition is getting better.
As an anecdote, a year ago I broke my iPhone and decided to go android for a few month waiting for the iPhone 6, and surprisingly to me it didn't really matter much in my day to day use, except for the artificial limitations (no iCloud, no iMessage) on the integration. But these limitations instead of being a deal breaker, really forced me to go into Google/third party centric services on my laptop/ipad/other family members devices. In a Apple heavy household there is now one device that forces the others to change service providers for central things like email, messaging, calendar, online storage, and the thing is it's not really difficult nor handicapping, the pros and cons balance very well.
Interestingly enough, with Apple Pay, Apple is starting to step on the feet of the new Sony who've been investing in payment processing and ecosystem for so many years now.
TLDR; I think Apple has started playing a game that put them in a position where they have to be better than everyone else at basically everything. Right now I don't think they are at the top of their game, especially in giving options to their customers or software quality/reliability. So, while they have a ton of money and are super successful, I think there is even bigger pitfalls waiting for them ahead. Hope they don't fall.
Sony wasn't the biggest company in the world I think, and the game was a lot more primitive back then, but I remember owning a walkman with a Cybershot, a Sony music compo and at the end a matching laptop because all of there where integrated. If I had the money at the time I'd bought a Handicam and a matching TV in a heartbeat.
Sony seemed unstoppable, until the pieces just crumbled; there would be way better laptops, the camera market evolved and there were far from keeping in touch with the best players in the field, then the music industry moved on, and keeping the integration going on becomes more and more compromising.
With today's Apple, while they are spreading, the same cracks seem to appear to me.
They still have very competitive products on each market, but these are more and more compromised as deep design decisions are made and the competition is getting better.
As an anecdote, a year ago I broke my iPhone and decided to go android for a few month waiting for the iPhone 6, and surprisingly to me it didn't really matter much in my day to day use, except for the artificial limitations (no iCloud, no iMessage) on the integration. But these limitations instead of being a deal breaker, really forced me to go into Google/third party centric services on my laptop/ipad/other family members devices. In a Apple heavy household there is now one device that forces the others to change service providers for central things like email, messaging, calendar, online storage, and the thing is it's not really difficult nor handicapping, the pros and cons balance very well.
Interestingly enough, with Apple Pay, Apple is starting to step on the feet of the new Sony who've been investing in payment processing and ecosystem for so many years now.
TLDR; I think Apple has started playing a game that put them in a position where they have to be better than everyone else at basically everything. Right now I don't think they are at the top of their game, especially in giving options to their customers or software quality/reliability. So, while they have a ton of money and are super successful, I think there is even bigger pitfalls waiting for them ahead. Hope they don't fall.
Sony absolutely couldve continued to own the portable media player market.
They decided to use smaller, more expensive storage, with no discernible reason to choose their players over existing ones that used standard storage like SD cards.
I worked for an electronics retailler around the time that the iPod came out (our store didnt sell Apple products at all) but it was obvious that Sony would burn out their loyal customer base just from the number of people we had coming in complaining about their memory costing 2-3x for the exact same storage size.
People got turned off the brand due to bad experiences
They decided to use smaller, more expensive storage, with no discernible reason to choose their players over existing ones that used standard storage like SD cards.
I worked for an electronics retailler around the time that the iPod came out (our store didnt sell Apple products at all) but it was obvious that Sony would burn out their loyal customer base just from the number of people we had coming in complaining about their memory costing 2-3x for the exact same storage size.
People got turned off the brand due to bad experiences
Totally. They had a string of bad decisions when it came to the overall experience, the network walkman with loading the songs from usb was a nightmare too, hardware quality also degraded over time.
I've been reminded of these when I has to sync to my computer to load arbitrary mp3 in the iOS library. The tracks are on a NAS, I could get them through dropbox as well, or any other way, really. But I have to go through iTunes if I want to add it to the library and listem to them through the main music player (and since at the start every app duplicating existing fonctionnality were refused, there's just no compelling, high quality alternative player not relying on the song library)
This is a single bit of annoyance, but then you still have to juggle with the libraries' respective itunes accounts, getting your tracks randomly deleted while syncing to a new computer etc.
It's still somewhat better than what I had to deal with when I was using a Sony MD with digital tracks. But for comparison I don't have these music related pbs on android.
I've been reminded of these when I has to sync to my computer to load arbitrary mp3 in the iOS library. The tracks are on a NAS, I could get them through dropbox as well, or any other way, really. But I have to go through iTunes if I want to add it to the library and listem to them through the main music player (and since at the start every app duplicating existing fonctionnality were refused, there's just no compelling, high quality alternative player not relying on the song library)
This is a single bit of annoyance, but then you still have to juggle with the libraries' respective itunes accounts, getting your tracks randomly deleted while syncing to a new computer etc.
It's still somewhat better than what I had to deal with when I was using a Sony MD with digital tracks. But for comparison I don't have these music related pbs on android.
I'll tell you the secret why: Sony aggressively expanded in the 80's and got into the media business.
The values couldn't and didn't align.
The idea is the synergy of Sony electronics and Sony entertainment would create something amazing but the reality was Sony electronics and Sony entertainment couldn't, wouldn't, and didn't play together.
Whatever the electronics side made, even if technically better than anything on market, had to be locked down to appease the entertainment side.
But the entertainment side didn't get big enough to be making such demands.
Sony also didn't make the jump to digital as fast as it could so upstarts were able to come in. I remember the transition from minidisc to MP3 player. THAT WAS PAINFUL and did not need to happen. Nor the subsequent jumps of oh hey, buy content again and again as different formats to fit into your playstation or your TV or your walkman.
There's a massive treasure chest, massive inertia, massive momentum, and again... it's freakin' amazing to me how much we clutch our little black mirrors and how central everything has been.
I'm rooting for a Wintel underdog comback.
The values couldn't and didn't align.
The idea is the synergy of Sony electronics and Sony entertainment would create something amazing but the reality was Sony electronics and Sony entertainment couldn't, wouldn't, and didn't play together.
Whatever the electronics side made, even if technically better than anything on market, had to be locked down to appease the entertainment side.
But the entertainment side didn't get big enough to be making such demands.
Sony also didn't make the jump to digital as fast as it could so upstarts were able to come in. I remember the transition from minidisc to MP3 player. THAT WAS PAINFUL and did not need to happen. Nor the subsequent jumps of oh hey, buy content again and again as different formats to fit into your playstation or your TV or your walkman.
There's a massive treasure chest, massive inertia, massive momentum, and again... it's freakin' amazing to me how much we clutch our little black mirrors and how central everything has been.
I'm rooting for a Wintel underdog comback.
Personally I would make a lot of sacrificies to have a super solid software/hardware solution.
Where sony lost me was the abyssimal software quality of their products. Ignore the DRM, ignore the licensing limitations. Their music management software was clunky, limited, slow, had critical bugs and barely had enough functionnalities to be usable. I was loosing my time clicking and dragging everywhere to transfer my music, the NetMD went to a drawer and I bought an ipod. I just seems so hard for traditional big japanese companies to benefit from talented developpers.
Their laptop line has/had good specs, but the windows integration is perfectible at best. I can't imagine trying to update the drivers or doing anything non sanctionned on them. One of my relatives has one, and my MBA performs better 4 years down the line while it went out roughly at the same time for the same price. I don't see wintel becoming an underdog anytime soon, but I'd love ubuntu in this role.
Where sony lost me was the abyssimal software quality of their products. Ignore the DRM, ignore the licensing limitations. Their music management software was clunky, limited, slow, had critical bugs and barely had enough functionnalities to be usable. I was loosing my time clicking and dragging everywhere to transfer my music, the NetMD went to a drawer and I bought an ipod. I just seems so hard for traditional big japanese companies to benefit from talented developpers.
Their laptop line has/had good specs, but the windows integration is perfectible at best. I can't imagine trying to update the drivers or doing anything non sanctionned on them. One of my relatives has one, and my MBA performs better 4 years down the line while it went out roughly at the same time for the same price. I don't see wintel becoming an underdog anytime soon, but I'd love ubuntu in this role.
>I'm rooting for a Wintel underdog comback.
Yes, if only because Wintel has a history of relative openness and backward compatibility.
However, the new Microsoft board is going in a different direction, prioritizing cloud and cross-platform over Windows. Hence Win10 will be cheap/free and continually updated by the cloud without notice, i.e. it becomes a non-deterministic magic box. Businesses will have to pay for Windows not to change.
Yes, if only because Wintel has a history of relative openness and backward compatibility.
However, the new Microsoft board is going in a different direction, prioritizing cloud and cross-platform over Windows. Hence Win10 will be cheap/free and continually updated by the cloud without notice, i.e. it becomes a non-deterministic magic box. Businesses will have to pay for Windows not to change.
You're assuming those two things are survival traits
Apple improved on Sony's success by understanding how to integrate open or semi-open ecosystems which Sony still doesn't really comprehend.
Apple's analog is web services, which, to their credit they have tried harder to figure out then Sony ever did with open ecosystems, but which they likely will never be able to compete with Google.
That said, I'm still not seeing the cracks yet since their software/hardware integration UX combo and ongoing mindshare with creatives is setting a bar that no one else has the vertical integration to approach. Google's services are clearly superior to Apple, but that only puts Android on equal footing with iPhone, it's a long way from a knockout blow.
Apple's analog is web services, which, to their credit they have tried harder to figure out then Sony ever did with open ecosystems, but which they likely will never be able to compete with Google.
That said, I'm still not seeing the cracks yet since their software/hardware integration UX combo and ongoing mindshare with creatives is setting a bar that no one else has the vertical integration to approach. Google's services are clearly superior to Apple, but that only puts Android on equal footing with iPhone, it's a long way from a knockout blow.
I think Apple really learned from Sony that they need to master the whole stack for a product. Windows was really a bad bad fit for Sony, i seriously think they should have bet the farm and tried to have their own OS, be it linux or a BSD variant and licensing a professional looking office suite.
They did it with Playstation, they would have been in a better shape if they went this way from the start.
About the cracks in Apple's integration, I think even the most vocal people only have mild complaints for now. But it seems money and power and mindshare are not enough for Apple to get the resources to fix these, and there are obviously planning to spread even thinner.
I also think the competition doesn't have to be absolutely better than Apple, just bring unmatched features that would tip the balance for specific consumers. Like the digitizer in the MS surface, or waterproof android phones, etc. Once one of the device is a non Apple one, it brings the potential value of the whole ecosystem way down.
They did it with Playstation, they would have been in a better shape if they went this way from the start.
About the cracks in Apple's integration, I think even the most vocal people only have mild complaints for now. But it seems money and power and mindshare are not enough for Apple to get the resources to fix these, and there are obviously planning to spread even thinner.
I also think the competition doesn't have to be absolutely better than Apple, just bring unmatched features that would tip the balance for specific consumers. Like the digitizer in the MS surface, or waterproof android phones, etc. Once one of the device is a non Apple one, it brings the potential value of the whole ecosystem way down.
To me Sony lost because they didn't understand non embedded 'software'. Sony had talent and mastery over hardware internals and interfaces (fixed set of physical inputs). It was new and difficult, you had to make strict physical compromises, something nowadays software doesn't have to. Their pre 90s hardware did what you wanted earlier and better than others, now they're selling sub par products (they don't own TVs, laptops, media devices like they did) thanks to their past glory.
The thing is, their skills aren't worthless, I often wonder how they managed to design and ship things that would work right away without the ability to fix it later at low-cost like a software patch. Also, I kinda miss dedicated physical interfaces. As amazing as speaking to your phone is, I think that touching stuff is valuable for mammals.
The thing is, their skills aren't worthless, I often wonder how they managed to design and ship things that would work right away without the ability to fix it later at low-cost like a software patch. Also, I kinda miss dedicated physical interfaces. As amazing as speaking to your phone is, I think that touching stuff is valuable for mammals.
Upvoted and really appreciate your comment.
I recently think one reason that makes Apple to offer larger screen iPhone is that the Apple Watch may compensate the need for a single hand-held device experience.
The Steve Jobs quote mentioned about bicycles for the mind is cool https://www.youtube.com/watch?v=ob_GX50Za6c . I know it's old but I hadn't seen it before. The rest of the article is kind of intellectual mush starting from saying "litigated against" in the first sentence when he hasn't and continuing in a similar vein.
Perhaps I should litigate against people that say I haven't when they can't be bothered to follow the very next link in the next sentence: http://stratechery.com/2013/clayton-christensen-got-wrong/
Or this one, linked a few paragraphs later: http://stratechery.com/2013/obsoletive/
Here's another one, for good measure: http://stratechery.com/2014/best/
So actually, I have. Mush indeed.
Or this one, linked a few paragraphs later: http://stratechery.com/2013/obsoletive/
Here's another one, for good measure: http://stratechery.com/2014/best/
So actually, I have. Mush indeed.
You know that when a dictionary calls a definition of a word "archaic", they mean "no longer correct", right? Using "litigate" to simply mean "argue against" or "dispute" is to confusingly misuse the word.
> when a dictionary calls a definition of a word "archaic", they mean "no longer correct",
I just checked a few dictionary definitions of 'archaic' and none of them say anything about no longer being correct.
I just checked a few dictionary definitions of 'archaic' and none of them say anything about no longer being correct.
OED lists as:
> Belonging to an earlier period, no longer in common use,
> though still retained either by individuals, or
> generally, for special purposes, poetical, liturgical
Nothing about 'not common' or 'special purposes' implies 'incorrect'. There are many perfectly good words and phrases in English that are not commonly used or are only used for special purposes, but that in no way makes them incorrect.
While technically the iPhone keeps getting better and better, and Apple has all these other initiatives that make it and its ecosystem impressive, I would doubt that this has anything to do with their massive profits.
It might be why a lot of techies buy the phone (though I'm still loyal to my Lumia :)) but surely the primary reason remains the fact that the iPhone is a premier fashion item and/or has most of the apps?
It might be why a lot of techies buy the phone (though I'm still loyal to my Lumia :)) but surely the primary reason remains the fact that the iPhone is a premier fashion item and/or has most of the apps?
> the primary reason remains the fact that the iPhone is a premier fashion item
But what does that mean? _Why_ is the iPhone a fashion item and other phones are not? Why does the iPhone command such a high degree of customer loyalty compared to its competitors?
Perhaps it's not what you meant, but when I read the argument that the iPhone is only/primarily successful because it's a fashion item, I feels like what is implied is that the iPhone as a product is similar to it's competitors and is only differentiated by better marketing. Which I think is BS. But if it were true, it would be even more astounding, considering Apple spends only a fraction of the amount Samsung does on marketing.
But what does that mean? _Why_ is the iPhone a fashion item and other phones are not? Why does the iPhone command such a high degree of customer loyalty compared to its competitors?
Perhaps it's not what you meant, but when I read the argument that the iPhone is only/primarily successful because it's a fashion item, I feels like what is implied is that the iPhone as a product is similar to it's competitors and is only differentiated by better marketing. Which I think is BS. But if it were true, it would be even more astounding, considering Apple spends only a fraction of the amount Samsung does on marketing.
No that's not what I meant. There is much about it that's amazing - its screens are certainly better than my 920 for example. What I was saying is that the technical aspects of the phone are (mostly) irrelevant when it comes to its sales.
Most people, I would assume, don't go out and decide between the phones based on which has the best performance or interface merits. They just go out and get an iPhone.
Most people, I would assume, don't go out and decide between the phones based on which has the best performance or interface merits. They just go out and get an iPhone.
There is no doubt when the original iPhone came out it was streets ahead of the competition, the likes of Nokia and Blackberry had become complacent, Apple turned the industry upside down.
The competition hasn't stood still since then though, the difference between a Lumia a Samsung and an iPhone much.
So why do people continue to pay a large premium for a small increase (if any) in functionality?
The competition hasn't stood still since then though, the difference between a Lumia a Samsung and an iPhone much.
So why do people continue to pay a large premium for a small increase (if any) in functionality?
Anecdotally people seem to think differently about IPhones. They expect them to last a few years and retain value. People are more likely to protect them with cases and actually use the warrenty. A lot of other phones feel much more flimsy and you never seriously expect them to last more than a year or two. And because they are cheaper you can always just get another one.
A large premium? Outright, an iPhone is the same price as a Galaxy S5/Note. The Lumia on the other hand is much cheaper, which is one of the reasons my girlfriend wanted a 930 for Christmas (which I got her), the other being that she really likes Windows Phone. I personally prefer the iPhone, but I use Apple everything.
its marketed as a hip, cool, and high tech, with a hint of luxury (emphasis on aluminum cases and such), that the average person can afford. Remember the stereotype of the pretentious twits sitting in Starbucks with their Macbooks?
Once your sold on their product its not simple to leave, let alone the simple fact that their products just work and do not require of you much to continue to do so.
Once your sold on their product its not simple to leave, let alone the simple fact that their products just work and do not require of you much to continue to do so.
> Apple spends only a fraction of the amount Samsung does on marketing
Apple doesn't need to spend that much on marketing when it has an army of fanboys with blogs.
Apple doesn't need to spend that much on marketing when it has an army of fanboys with blogs.
status
To some extent the iPhone is a Veblen good, whereby its price conveys some status.
It probably doesn't hurt that some of Apple's design choices reinforce that conveyed status: https://www.techdirt.com/articles/20150211/05455029985/green...
a premier fashion item
Especially now that screen sizes are in the same ballpark, the iPhone and its interface don't look markedly different from competing Samsung/HTC/Nexus phones. People like how iPhones work.
Especially now that screen sizes are in the same ballpark, the iPhone and its interface don't look markedly different from competing Samsung/HTC/Nexus phones. People like how iPhones work.
So... in Star Trek Terms... if they can be the ship's computer for Earth everyone will pay loads for really nice communicators?
HP wants to be the new mainframe for Earth, by developing memristors that they won't sell to anyone except via hosted software.
Hey, that's Google's new market too!
They foresee a dystopian future with driverless cars, intelligent ads, perfect synergy and communication between our brains through implants. It's dystopic not because of what it promises, but how much control these providers will get over public services. Pure Philip K. Dick.
Welcome Google, Apple and Amazon, the companies of the future, the companies that help us on our most mundane and daily tasks. From waking up, drinking coffee, conmuting, working and going to bed. Of course, this keeps their stock value high, not doing it, but reaching for it. Cannot really blame them.
They foresee a dystopian future with driverless cars, intelligent ads, perfect synergy and communication between our brains through implants. It's dystopic not because of what it promises, but how much control these providers will get over public services. Pure Philip K. Dick.
Welcome Google, Apple and Amazon, the companies of the future, the companies that help us on our most mundane and daily tasks. From waking up, drinking coffee, conmuting, working and going to bed. Of course, this keeps their stock value high, not doing it, but reaching for it. Cannot really blame them.
You don't have to use their services or products
Not yet. A few years/decades after self-driving cars become common, though, I wouldn't be shocked to see manually driven cars banned or strictly limited for safety reasons. What then?
Then there will likely be several companies competing in the self-driving car market? It's not like when horse and buggy went out of fashion, we all had to rush out and buy a Ford.
Apple, Google, Microsoft, etc. compete in the smartphone world but all are privacy disasters in one way or another. I don't expect things like self-driving cars to buck that trend.
What the article doesn't explain or maybe cannot is that apple's strategy, if correctly stated, depends upon two factors:
1) the willingness of others to produce things that integrate with the iPhone;
2) how much trust end users are willing to place in apple.
Actually the complete opposite is happening. Apple isn't modularising. They are unifying.
Apple has built a unified SDK for iOS and OSX that has been used in the Photos app. This means that going forward we could see a single development platform across all Apple devices. When you combine this with Continuity and iCloud and it's a pretty big deal.
Seamless movement between devices that of course only works with the Apple ecosystem.
Apple has built a unified SDK for iOS and OSX that has been used in the Photos app. This means that going forward we could see a single development platform across all Apple devices. When you combine this with Continuity and iCloud and it's a pretty big deal.
Seamless movement between devices that of course only works with the Apple ecosystem.
You've zoomed in on one aspect of Apple while Ben Thompson is looking at the company as a whole. Apple has integrated on what they perceive to be the important parts of the value chain (which is why Apple designs chips but doesn't manufacture them).
> Apple has built a unified SDK for iOS and OSX that has been used in the Photos app.
I think the important point about modularizing was about Apple Pay, HomeKit, etc. Apple's interfaces with 3rd party components are modular. Apple is setting up the modular infrastructure for other people to take advantage, not necessarily being modular about how you develop apps for their platform.
I think the important point about modularizing was about Apple Pay, HomeKit, etc. Apple's interfaces with 3rd party components are modular. Apple is setting up the modular infrastructure for other people to take advantage, not necessarily being modular about how you develop apps for their platform.
Apple Pocket Phone
http://blog.benwen.com/opinion/product/2015/01/29/apple-pock...
http://blog.benwen.com/opinion/product/2015/01/29/apple-pock...
Reasonable assertions followed by breathless hype for the Apple watch.
I didn't get that at all. In fact he seems to be suggesting what Apple's thinking may be in terms of the Apple Watch fitting into their strategy.
The entire Apple's New Market section is muddled. Apple will "leave smartphones behind" for "foundational services" which are accessed...through a smartphone.
Its because we're coming to the end of the smartphone boom. Processors are about as fast as they can go within the energy and heat envelope of current technology and displays high enough resolution that they are the start of the VR boom. But the easy gains are gone because no one has any idea how to make a smartphone which will run at full power for 24 hours.
The content of the article relating to the watch boils down to 'this is why it makes sense for Apple to make a watch' and you regard that as hype?
They have been disrupted in markets where phones compete on price. Their most successful market, by a wide margin, is the one where phones are capped at $200. The comparison to BMW that is often made is laughable. If only BMW sold to dealerships who then turned around and sold the car for the same price as a Toyota. It's a droll-worthy position to be in, that's for sure.
It would be interesting to see how the U.S. market changed if there were no subsidies. My guess is that payment plans would be more common so it wouldn't be such a tremendous blow. But I always wonder if "good enough" Nexus style devices would become more popular and the Galaxy Ses and iPhones a little bit less.