So in the wake of Apple missing analyst expectations for sales and profits during the December quarter, some members of the media have decided that Tim Cook has to go. It’s all his fault, and they need to get someone in there to fix what ails Apple. Or maybe call a medium and contact Steve Jobs in the afterlife and get him involved once again. Calling Dr. Frankenstein!
So why should Cook go? What did he do wrong, and where were the calls for Apple to fire all those failed executives who trashed the company after Steve Jobs was sent packing in the 1980s?
The main reason appears to be the fact that Apple has been missing estimates for sales and profits in recent quarters. It’s not that Apple is necessarily failing their own guidance, but the inflated numbers from others who may be using mediums and tea leaves to arrive at those figures. Or perhaps dragging them from dark places in their anatomies.
The failures? Well, Maps for one. Steve Jobs would never have allowed that thing to be released if he were on the job. Only the lessons of history show that Jobs had his missteps too, and I’m not going to bother to list them. The journalists who clamor for Cook to go just need to do their homework.
I suppose the critics are also complaining because the iMac was late, and is still constrained. The same is true for the iPhone 4, surprisingly, production of the iPhone 5 has only recently caught up with demand, and the iPad mini won’t catch up till later this quarter. Was there a failure, or is Apple pushing the supply chain as hard as possible to get these products out in sufficient quantities?
Consider the result to sales and profits if the iMac arrived with full availability a month earlier, without production bottlenecks, and the iPhone and iPad mini weren’t similarly constrained. Imagine how the results would have fared if Mac sales were on a par with last year, or a tad ahead, and Apple moved a few million more iPhones and iPad minis during the quarter. Forget about every other factor in Apple’s numbers, and tally the results. Revenue would be several billion dollars higher, and profits would have exceeded last year. End of complaint.
If Apple’s problems occurred because of a falloff in demand, that’s one thing. If the products weren’t almost universally praised by customers, and given high marks by reviewers, that would be another. If the production problems were somehow due to a Cook screwup of some sort, that would also be a factor in considering his future at Apple.
But Cook has been doing the operations thing at Apple since the 1990s, and he’s been a tremendous success at it. If, after their best efforts, Apple can’t meet the full demand for their products, that’s actually not a bad thing. It’s only a bad thing if lots of customers lose patience and go elsewhere rather than wait for delivery, even if the shipment arrives a few weeks later.
The other argument, which also betrays serious ignorance, is the claim that Apple must revolutionize a product category every single year. How, then, do you explain the lapse of six years between the introduction of the iPod in 2001 and the launch of the iPhone in 2007? Did the arrival of the iPad in 2010 mean that Apple must now enter a three-year cycle? If so, the year is still young, and, other than the usual product refreshes, nobody outside of Apple really knows what’s on tap for this year.
Sure, Cook is still dropping broad hints about something in the TV space. That two million copies of the Apple TV were sold in the last quarter would be amazing for any company other than Apple. To them, two million is still a hobby, though I can see where it can grow into a fairly mainstream product assuming a new generation model expands the ability to control your TV experience. I am not convinced that Apple really wants — or needs — to build a TV set to make a dent in that market. A pretty smart TV with a spiffy interface and some unique control functions might be a big seller, but hardly a revolution.
On the other hand, I’m not apologizing for Tim Cook. Were he to leave tomorrow, he could retire and travel the world for the rest of his life and never worry about the next car payment or electric bill. But I don’t see evidence of his failure, and I see sensible reasons why Apple didn’t do quite as well as the financial community expected.
The next six months, however, will be the key to how Apple’s ongoing prospects are perceived. But even if the growth rate slows to “normal” levels, that’s nothing to apologize for.
- Apple, the WWDC and the Wacky Run-up After quite a run, and ahead of a 7-to-1 stock split, Apple's stock price had declined slightly before the WWDC keynote on Monday. I suppose this was to be expected. The event was presaged with optimism, skepticism and silly claims about what the company must do to survive. Some weeks back, for example, one online pundit who doesn't deserve to be named or linked suggested that the company would be toast if the iWatch wasn't released in 60 days. When that date passed, and Apple was still here, it merely represented yet another example of commentators lying through their teeth or making downright foolish claims to generate online traffic. Having a respect for facts and logic played second fiddle. There was also the "Apple must" meme, that the WWDC keynote must be filled with new hardware and new product categories, even though it was ostensibly for developers. Thus, we know there would be news about iOS 8 and OS 10.10 because Apple said as much. But expectations that there would be new hardware weren't met. There was no Apple TV or iWatch demonstration for developers, but the people who build apps for Apple gear still got plenty to consider, including a new simplified programming language known as Swift. But OS 10 Yosemite? What about that Looney Toons cartoon character? Clearly Apple isn't taking that into consideration with OS 10.10, which will sport the rumored flatter look and feel, reminiscent of iOS. The improved transparency effects and cleaner text and windows seem interesting enough if a new OS X skin appeals to you. While Mavericks was heavily laden with hardware improvements to use RAM and power more efficiently, Yosemite is heavily disposed towards improvements for Mac users. Front and center is Continuity, which greatly simplifies the passage from Mac to iPhone to iPad, and back again. Email and messages can begin on one, and be completed on another. You can also use your Mac or, with iOS 8, your iPad to make and receive phone calls on your iPhone. Of course your iPhone has to be active on the same Wi-Fi network for this Handoff process to work. SMS messaging is also supported; again with a networked iPhone. You can also use your iPhone to set up an Instant Hotspot, though that would appear to require support from your wireless carrier, as Apple indicates on their site. Clearly Apple's critics will complain that Continuity is yet another way for Apple to rope you in to depending on their ecosystem. But there's nothing wrong with that. Other companies and their sycophants in the tech media are probably jealous. So iCloud becomes iCloud Drive, since you can now use it as an online repository for all your files, and even set up a traditional file/folder hierarchy that can be accessed on all your Apple gear, including your iPhone and iPad, along with a Windows PC. In a sense, Apple is going after Dropbox and the cloud storage systems from Microsoft and Google to set up seamless ways for you to store and easily transfer larger files. Mail for Yosemite, with the promise of greater speed and efficiency, has a new feature, dubbed Mail Drop, which lets you use your iCloud Drive as an intermediary for file attachments of up to 5GB. This will help you avoid the usual problem of sending large files to a recipient. Email services traditionally limit attachments to less than 20MB. Windows users will simply receive a link in their email to retrieve the file, which definitely rains on Hightail's parade. Since iCloud now plays a larger role in storing your stuff, new storage plans are coming. You'll still get 5GB free, but 20GB is just 99 cents per month, and 200GB is $3.99 per month. For small businesses, or families with loads of photos and other files to store and back up, the latter plan is the sweet spot. You'll be able to get up to 1TB of storage once all the options are in place. Spotlight has been enhanced to include both online and local searches, which is something you can already do under Windows. I suppose Apple is hoping you'll move away from Safari searches and rely on Spotlight to find everything. Here's why: While Google search is still supported and remains the default on Safari, Spotlight uses Microsoft Bing. I wonder how Google will react when they get the memo. As with Mavericks, OS X Yosemite will be available this fall, probably between late September and late October, as a free download and is reportedly compatible with the very same Macs that can run OS 10.9. While developers are already downloading the first Yosemite preview, up to one million Mac users will receive access to Yosemite betas this summer. So be prepared to sign up as soon as possible. I expect they will want to get a few releases out before letting non-developers gain access to the seeds. While iOS 8 also comes across as a compelling release, Apple has yet to say anything about side-by-side multitasking for iPads. I suppose that could come later. Meantime, in addition to the Swift development language, Apple is moving towards giving developers more flexility in building and selling iOS apps. There is, for example, support for Touch ID and third-party keyboards. So, although the new QuickType predictive keyboard scheme may appeal to most users, those who want a Swype or another third-party keyboard to replace Apple's will get full system support. Would that were true with other apps, and it would be nice to be able to pick something else as the default for such tasks as email and browsing. As predicted, HealthKit will be designed to allow developers of health and fitness apps to seamlessly communicate with your iOS device and the new Health app. Such major medical institutions as Mayo Clinic have announced full support, which means you'll be a tap away from monitoring your physical condition, and your doctor can receive immediate updates should test results require their attention. Apple, by the way, promises what appears to be bulletproof security for Health and also for HomeKit, a tool for developers to build apps to better integrate your connected home. The HomeKit feature is called Secure Pairing, which supposedly means that only a registered iOS device can unlock your home, adjust the lights, turn on the microwave, or perform many other functions in your home. Developers will be able to bundle apps at a special discount and offer beta testing functions via the App Store. A new "Explore" feature will make it easier for you to discover the more than 1.2 billion apps now available for iOS users. While iOS 8 won't look altogether different from iOS 7, and thus isn't apt to be quite as polarizing, that can't be said for Yosemite. Right after the initial announcement appeared in the tech media, one of my friends, who has already had a love/hate relationship with Mavericks, responded with just one word, "YUK!" Her concern is that it looks more like iOS, but I reminded her that it's still OS X and her Mac will still run like a Mac despite the changes. Oh, and by the way, the iPhone 4 is not on the iOS 8 compatibility list. It was hit or miss with iOS 7, so it makes sense it has been retired from future iOS updates. In any case, Apple's stock price resumed its upward climb Tuesday morning. Evidently Wall Street was impressed.
- 2014 — The Year the Sky Didn’t Fall for Apple At the start of 2014, even the most diehard Apple fanatic might have wondered about the future prospects of their favorite fruit company. Sales didn't always meet Wall Street projections, and profits were flattening. The stock price was way down from historic highs. To no surprise, some members of the mainstream media were calling for CEO Tim Cook to take a hike. Could it be that Steve Jobs' handpicked successor was a monumental screw up, or was there a long-term plan in place that would set things right before long? Questions, questions. Many of the particulars are ably recorded in a no-holds barred editorial from Daniel Eran Dilger, a frequent guest on The Tech Night Owl LIVE, over at AppleInsider. So I will be brief about some of the details. Now understand that the perception that Apple was on the rocks was largely manufactured. When Steve Jobs introduced iterative upgrades to Apple gear, that was part of the standard upgrade cycle. When Tim Cook did the same, there must be something terribly wrong with Apple's mojo, and the company clearly lost its power to innovate. After all, Cook was the supply chain expert. What right did he have to operate a company known for its amazing innovation? You'd think that Apple was supposed to upend a market every year. The critics forget the years that passed between the first iPod, the first iPhone and the first iPad. Miracles don't come every day, but where were the trendsetting products from Tim Cook's Apple? This didn't stop iPhone sales from climbing, at a time when Samsung's sales began to falter. The claim that Samsung had it all over Apple when it came to high sales and meeting the needs of a variety of customers was shown to be shaky. Yes, Samsung still sold loads of mobile handsets, but far too many were cheap, with little profit. While Apple continued to make huge profits from iPhones, Samsung's margins continued to shrink. Tepid response to the latest Galaxy series didn't help. Apple moved far more iPhones. Amid rising sales, Apple's first maneuvers for 2014 were financial. Stock buybacks and the seven-to-one stock split pleased Wall Street. But was Apple just stalling, avoiding the question of what innovative products were in the pipeline? Yes, Apple made promises, but when were they going to deliver? WWDC came, as usual, in June. The critics said it was all about the software, but Apple added an amazing number of new features to iOS and OS X. The bill of particulars was far larger than what Google and Microsoft were promising. True, some suggested Apple bit off a little too much this time, but the bugs are being vanquished, and the end result presents many new opportunities for developers to make a profit and to benefit customers. For regular people, the real significant event came in September, with the introduction of the iPhone 6 and the iPhone 6 Plus, a phablet with a 5.5-inch display. The critics had been long clamoring for Apple to enter the larger smartphone space, but Apple, as usual, took its sweet time about developing the right product. Certainly the public embraced the new gear, with record sales the very first weekend and chronic shortages through most of the holiday season. But some people realized that the romantic ideal of the larger smartphone wasn't quite so compelling after you spent a little time with one. One-handed operation meant something, and the larger handsets could be difficult to fit in a smaller pocket or purse. And don't forget Apple Watch. An early production model was demonstrated, and delivery was promised in early 2015. October brought new iPads, but the flagship model, the iPad Air 2, thinner than its predecessor, was the lone compelling upgrade. The iPad mini 3 was little different from its predecessor aside from Touch ID, and it still cost $100 more. It wasn't such a great deal, and the jury is out how well tablets sold this holiday season. But the iPad Air 2 is, as my friends across the Atlantic are apt to say, a marvelous piece of kit. It will be hard for my wife to give up the one she is using when the Apple editorial loan expires in February. The other product intro in October, the iMac 5K, was simply stunning, particularly the picture and the technology that makes it happen for a price that even Dell couldn't match. Last I checked, Dell's 5K display is just about the same price as the 5K iMac, but Apple gives you the computer as part of the package. None of this means everything went perfect for Apple. Don't forget the missteps — or alleged missteps — depending on your point of view. So those celebrities whose nude photos, stored in iCloud, were hacked and circulated online have only themselves to blame for poor password choices. Why did they have those pictures there in the first place? But the iOS 8.0.1 update was the worst sort of failure, fixing most iPhones, but causing some to lose their cellular connections and Touch ID capability. Apple pulled the update in little over an hour, and released a fixed version the very next day, but the publicity fallout continues. Yes, Microsoft has done worse, far worse, but this is Apple. Please don't get me started about iTunes 12. The complaints haven't been stilled, and I wonder whether Apple needs to get back to the drawing board to sort things out. Some alleged scandals were just nonsense. An iPhone 6 Plus was no more prone to bending than other large mobile handsets. No, Apple didn't suddenly out of the blue sneak a security update onto Macs with OS X Mountain Lion, Mavericks and Yosemite. That particular update came using the App Store update mechanism, the successor to Software Update. Where there's an automatic install option, as there is in Yosemite, you can switch it off. Besides, the NTP security flaw, impacting the time syncing feature of OS X, Unix and even Linux distributions, could allow a remote attacker to gain control of your computer. Even the U.S. Department of Homeland Security got in the act to report the danger, so was it wrong for Apple to protect you in a way that did no harm? For 2015, we know the Apple Watch is coming, but there is no consistency on how well it'll do. And what about the fate of Apple TV? Is there an Apple TV set on the horizon? An iPad Pro, a version with a display that's 12 inches or more? Is there something out of the blue in store? And what will Apple do to flesh out the features for iOS 9 and OS X 10.11? And I will not speculate on the code name for the next Mac OS.
- Apple and the Media’s Death Wish Typical of any publicly-traded corporation, Apple's stock price has had its ups and downs. This reminds me of the time I met a friend, his name is Mark, at the Macworld Expo in San Francisco. He accompanied me and my son, Grayson, to the Steve Jobs keynote. My press pass accommodated extra "helpers." After experiencing the famous Steve Jobs "reality distortion field," Mark called his stock broker and ordered up a few hundred thousand dollars worth of Apple stock, which were trading for over $23 a share at the time. He said he sold it some months later for a decent profit. But imagine if he hung onto that investment for the full decade. Don't forget the recent seven-for-one stock split. His investment would have appreciated nearly 35 times over the original purchase price. His stash of Apple stock would be worth millions. Regardless, there is the delusion these days that Apple's stock price didn't actually crater until after Tim Cook took over as CEO. But if you examine the trends, that is just not so. But the media often considers only the most recent stock price slide that began after the iPhone 5 shipped in 2012. Despite record sales of five million units on the launch weekend, tech and financial analysts insisted Apple must sell up to 10 million, thus the results were erroneously perceived as disappointing. It didn't matter that Apple couldn't meet demand. Maybe they should have built phantom smartphones or something. Over the next few months, there were published reports claiming that Apple had reduced orders for iPhone 5 components, thus creating the impression of poor demand despite record sales. In the next quarterly conference call with financial analysts, Cook said you cannot gauge sales from isolated supply chain metrics. This ought to have been obvious to anyone who pretends to understand the tech industry. Besides, it's normal for a company to reduce orders after the holiday quarter, since sales would naturally be expected to decline for most consumer products. That's only logical. But logic and reason didn't calm the market, and Apple's stock price continued to dive from record levels. At the same time, some members of the media demanded Cook's head. They said he wasn't up to the job. He was a supply chain geek and not the visionary who could step into the shoes of Steve Jobs and keep Apple running. They seemed to forget that Cook had worked at Apple since the 1990s, and had stepped in for Steve Jobs several times when Apple's co-founder took sick leaves. Maybe he wasn't quite the product visionary, but he had other talents, and Apple had a smart executive bench to handle the other chores. Remember that Jobs wasn't a supply chain wizard; he had to hire someone else to get that job done. Apple's perceived roller coaster ride didn't end. Any time sometimes inflated revenue and profit estimates were missed, or appeared to have been missed. Apple got hit between the eyes. Now Jobs famously told Cook before the former's death not to ask what his predecessor might do, but to move forward and do what he thought was right. That didn't stop the media from assuming that Jobs would have acted differently when it came to various product and strategy moves. So Jobs would never have approved production of an iPad mini, since he denigrated small tablets. But that skepticism once applied to mobile phones before the iPhone was launched. Jobs was famous for attacking a product one day and launching Apple's version the next. I remember when Apple executives said they'd never build a cheap Mac in late 2004. The following January, they introduced the $499 Mac mini. What's more, Steve Jobs reportedly didn't exactly jump at the opportunity to produce the iPod when the concept was first brought to him. He often attacked an idea only to embrace it later on. In short, there is no way to predict how he might have reacted to any decisions Tim Cook has made. That Cook has made the company more open may seem anathema to the Jobs approach, but things change, and making predictions is a fool's errand. These days the demands that Cook be dismissed are no longer as loud. On the other hand, while Apple reports record revenues, and the market cap is now hovering in the $700 range ahead of Thanksgiving, one online publication has tried to make hay of the company's perceived recent failures, referring to them collectively as another "tech turkey." So non-original. Consider the fact that a number of entertainers with iCloud accounts were hacked, and their explicit photos revealed, is attributed to Apple's failure. But Apple made it clear at the time, and the statement has not been disproven, that those compromised accounts were hacked by the usual methods, such as guessing usernames and passwords. It doesn't mean Apple couldn't make their systems more secure, and they did expand two-factor authentication capabilities. But that doesn't let the victims off the hook. Knowing they were targets, they should have been more careful in their online behavior. Apple continues to be blamed for the abortive iOS 8.0.1 update that killed cellular access and Touch ID on 40,000 new iPhones. Remember that Apple is not the only company to have issued a faulty software update, and it was withdrawn in a little over an hour. The fix came out the very next day, and those impacted were given simple online instructions on how to restore their gear. So, yes, Apple has goofed from time to time, but don't tell me Google and Microsoft are perfect. Still, Apple is huge, and even a minor failure or perceived failure must be a big deal, particularly for people who wish Apple would just go away.
- Apple and Product Saturation Once upon a time, it was a very rare thing to see anyone with an Apple product. Consider all those years where the Mac barely made a dent in the PC business, and many people who did use Macs were often regarded as being just a little weird. Well, maybe I just took it personally, but it was a lonely world out there when I visited friends and family and found computers that, to me, were more than a little alien. Now even though Apple owns the premium PC market nowadays, and the overall market has seen better days, it appears that there’s still plenty of room for the Mac to grow. Apple clearly isn’t following Microsoft’s playbook — to merge desktop and mobile platforms — and there still appear to be a fair number of people for whom a tablet is not a PC replacement. In other words, there are still untapped markets for Apple to sell more Macs, at least so long as PC demand remains fairly decent. But if it continues to fall at the current rate, Apple will be playing in a smaller and smaller market. In the mobile universe, smartphones and tablets have grown really fast. It’s hard to find anyone nowadays who doesn’t have one or the other — or both. Even folks at the low end of the income scale can get a smartphone free or at a really low price with a fairly cheap wireless plan. Tablets can be had for $50-$100, although I wouldn’t say much about the quality. And I suppose if a smartphone does a decent job of handling phone calls and texting, that may be all that some people actually need. Regardless, smartphones dominate, so it seems that fewer and fewer people don’t have one. This means that the handset makers, and that includes Apple and Samsung, are fighting to make new sales in a smaller and smaller pool of customers who don’t have one of these gadgets. In the U.S., the wireless carriers have made sales a little more difficult by lengthening the time before they allow early upgrades. Well, that’s one excuse Apple CEO Tim Cook gave for fewer iPhone sales. But he ignored the fact that the largest wireless carriers were also busy advertising extra-cost schemes where you could upgrade your mobile handsets more frequently. What this means, though, is that a large portion of customers for current smartphones are upgraders. It’s not their first purchase, so sales growth is being reduced. If the upgrade cycle lengthens, as it has with the PC, it also hurts sales, and it’s clear Apple isn’t the only tech company to see reduced growth. Apple, however, shows no inkling of moving down-market. The iPhone 5c, which may or may not have been successful — depending on whom you ask — was simply a repackaging of the previous year’s technology for $100 less. Apple clearly intends to play in the most profitable segments, as they’ve done with Macs. So will Apple have to accept growing sales at maybe a few percent a year, which is typical for a large company serving a saturated market, or are there different ways to go? One way is to succeed in emerging markets where a growing middle class will aspire to more expensive gear. This is the logic behind Apple’s expansion into China. If Apple’s efforts to gain traction in China, India and elsewhere succeed, sales may grow at a faster rate, but probably nowhere near the levels achieved in the early days of the iPhone and iPad. So what is Apple to do? Well, the financial community demands new products in new categories, and Tim Cook keeps claiming they are planning just that. In fact, he’s said it again and again, and I can well understand why some media pundits might just be a tad skeptical. But it’s also true that the refreshed Mac Pro clearly demonstrates that Apple still has it in them to innovate in surprising ways, although that product obviously didn’t create a new product category. So if the pressure was high in 2013, it is far higher in 2014, particularly after releasing financials and guidance that the investment community regards as underwhelming. But what are the new product categories that Apple plans to enter? Cook says more than one, so where does Apple go next? Clearly Apple won’t tell you, although it’s possible, I suppose, for increased pressures, particularly from the investment community, to force disclosure of at least a few hints. Up till now, Apple hasn’t listened to Wall Street because, frankly, financial analysts have never understood the company. That may not change now, but if the hopes and dreams for new product initiatives don’t play out by spring or summer, increasing skepticism from the media and Wall Street could force a different response. But there’s clearly precedent. Remember that the original iPhone was announced months before it was actually released. There was no product to make obsolete, of course, and it’s also true that FCC testing would have revealed its existence before long. Certainly one excuse Apple gives to withhold information on a new product is how it would impact sales of existing models. If those existing products are made by other companies, of course, Apple could still stage an early preview, build demand, and, in turn, possibly kill sales of the competition as customers wait for Apple’s solution. This could play out nicely with a smartwatch, the rumored iWatch. If Apple plans a connected TV set, a surprise demonstration might really spook the rest of the industry, particularly since most competing products were already presented at the CES earlier this month. Sure, Apple usually doesn’t spill the beans on future products, except, of course, when they do. Maybe it’s time for Cook to rethink the strategy, not just to satisfy Wall Street but to tempt millions of potential customers. There’s a lot to be said for building demand early, particularly if Apple has a real hit or two in the wings.
- The Apple Media Event Report: Let the Silliness Begin Ahead of Tuesday's Apple media shindig, the skeptics were claiming that Apple was in disarray, and anything less than a grand slam would be a failure. They gave us chapter and verse on what Apple had to do to stay credible and survive, forgetting that the credibility of some of the critics might just be the real question. So we have the example of one commentator, who shall remain unnamed and not linked, who claimed that the iPhone 6 was just more of the same, using components taken from the parts bin. Not mentioned was the fact that the mainstream model and the iPhone 6 Plus both use the same A8 and M8 chips, NFC, and other components, so basic performance capabilities out to be essentially the same, although twice as many pixels need to be moved around on the Plus. The major hardware differences, beyond the displays and screen resolutions, are optical image stabilization and a beefier battery for the Plus. Parts bin my eye! Worse, the columnist didn't even get the specs right, imagining that the iPhone 6 limited you to 720p videos. The specs specifically state both models offer 1080p video at both 30 and 60 fps. As usual, some sites reviewed the new iPhones on the basis of known specs, rather than how well they work in the real world. This is the same mistake usually made by commentators who never seem to get Apple, and continue to want to judge the company in ways that superficially favor the competition. One article claimed that the Samsung Galaxy S5 was the one to beat, although reception has been decidedly lukewarm. Nowhere was it mentioned that the Samsung's fingerprint sensor is barely functional. The iPhone 6 series depends on Touch ID to perform some of its magic, including authorizing Apple Pay transactions. That would be impossible on a Galaxy S5 because you'd have to swipe the button sensor over and over with no guarantee of success. Besides, how can you possibly review a product that has not, in fact, been released? True, some journalists already have one or both versions of the iPhone 6 in hand, and the reviews will be published next week. Once those reviews, and actual benchmarks appear, there will be genuine comparisons. But not now. The skepticism about Apple Pay is predictable. It's a new service, and previous mobile payment schemes from Google and other companies have largely failed. Apple's advantage is to build a rich ecosystem that includes the hardware components, software, enhanced security and, most important, credit card companies, banks and retailers. If everything works as advertised, with relatively few glitches at the checkout counter, tens of millions of users will be ready to use Apple Pay for mobile and online commerce as they acquire new iPhones. That could jump start the industry, and push more people into considering an iPhone or Apple Watch above that the competition offers. But it's a long-range plan. As older iPhones that do not support Apple Pay are retired, the user base will continue to soar. And the rest of the mobile handset industry will be left on the sidelines, since Apple will not open its technology to other hardware makers. Still, it's an experiment, but the potential is tremendous. That takes us to the Apple Watch. Again the skeptics assert that we don't need yet another mobile accessory, that people by and large have given up on wristwatches. Besides, existing smartwatches haven't really done so well, so where does Apple have the temerity to believe that their gadget will be different? Besides, isn't a $349 starting price a bit much? It's almost like paying $399 for a portable digital music player, but we all know how that turned out. True, the Apple Watch is likely to get real expensive as you move up the product line, and I read suggestions that the 18-karat gold versions may carry five figure price tags, typical of fine jewelry. But customers will have choices for many budgets, and enough options to make one their own. Just starting with two sizes — the so-called men's and women's models although they aren't identified that way — makes them more useful than existing gear. The other skeptical voice is about battery life. Apple implies it's one day in mentioning nightly charging. Further, it's reported they are working to improve battery life ahead of the early 2015 release date. I suppose power efficiencies and better batteries might give it up to two days use under normal use, whatever that's supposed to be, but I'll make no predictions. Besides, there will ultimately be an Apple Watch Two, and Apple Watch Three, and so on and so forth. The technology is young, and Apple doesn't enter a new market without long range plans. Whatever shortcomings appear in the first version will be massaged away as development continues. Sure, it may well be true that the Apple Watch won't sell in near the quantities as the iPhone, or even the iPad for that matter. But being heads and shoulders above the rest might move the nascent smartwatch market to far higher levels, whatever they might be. Regardless, Apple doesn't have to sell 50 million of them a year to be successful. Now the real value of the new gadgets and services won't be clear until they are actually available. That makes sense to me, although some might have other points of view. Special Note to Our Readers: I'm sad to report that the print version of IDG's Macworld — one of the original Mac magazines — is being discontinued. There will still be an online version, but most of the bylines with which you are familiar will no longer be there. They are in the process of being laid off. As some of you know, I wrote for Macworld for a while during the 1990s, only to switch to the main rival, MacUser, a few months before it folded and was absorbed into Macworld. Thus continues the march from print to web.
This article was posted on Friday, January 25th, 2013 at 12:00 AM and is filed under News and tagged with: Apple, Apple Tv, iMac, iPad, iPad mini, Iphone, iPhone 4, Iphone 5, Ipod, Steve Jobs, supply chain, Tim Cook.