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  • The Apple Myth Makers Prosper

    September 13th, 2013

    So I listened to a talking head on one of the cable news/commentary networks, MSNBC. In being asked why Apple's stock price declined sharply on Tuesday and Wednesday of this week, he said that Apple isn't good at producing iterative upgrades. They only succeed when they overhaul a market.

    Or at least that's what he said.

    Now as most of you know, MSNBC was originally established as a partnership between the NBC TV network and Microsoft. But Microsoft eventually bailed. In any case, the interviewer didn't bother to follow up this statement; that's all-too-common on TV news nowadays. Unfortunately, that supposed expert was just plain wrong.

    If you look at Apple's sales over the years, you'll see the peaks in 2012 and 2013 were reached without releasing any game changers, unless you can call the iPad mini a game changer. While undeniably successful, it's just a smaller version of the regular iPad. The iPad market already existed, so this was at most an iterative update.

    Well, it's not as if pundits will admit when they are shown to be wrong time and time again.

    But the "Apple-fail-to-innovate" game has been in full force in recent months. Whatever Apple does, it's just not enough. They should be doing more.

    Consider the iPhone 5s. Yes, it looks very much like its predecessor, but there are a whole lot of significant changes inside. No, not just installing faster parts, as Samsung did when they went from the Galaxy S3 to the Galaxy S4 (with a slightly bigger display). By going to 64-bit, it's not just for bragging rights, but a legitimate effort to improve performance and pave the way to a future that might include desktop-grade products with ARM chips.

    The M7 coprocessor works with the phone's motion sensors and is optimized for fitness software and Maps. So your iPhone 5s will know when you are walking or driving, and deliver the appropriate answers. Having the M7 also means less drag on the A7 chip, which helps to improve battery life. Consider there's a lot more power hogging stuff in the iPhone 5s, but with a slightly larger battery life, it means a longer wait between charges.

    Sure, some of this is theoretical. When the product is released and thoroughly tested, we'll have a better picture on how well it does in the real world. But consider this: On an iPhone and an iPad, Apple's battery life estimates tend to be really close to the mark. It's not the same as a MacBook, where you have to basically let it run and do very little to match Apple's claims.

    However, along with improved camera components and software and the Touch ID fingerprint, it does appear that the iPhone 5s is actually a major upgrade. The original iPhone 5's biggest feature was a larger display. There's a lot more going on in the 5s.

    Sure, Apple might upset the industry between now and 2014 with an iWatch or maybe a smart TV, but the company is still moving ahead of the competition with honest-to-goodness improvements on existing gear, rather than junk that looks great on a spec sheet, but has little practical value.

    But the largest amount of criticisms are focused on the iPhone 5c. Yes, it's basically a plastic-based iPhone 5 with a higher capacity battery and some minor refinements. But having a current product for a more affordable price is apt to capture more customers than just selling last year's model.

    But for those who still regard the 5c as too costly, Apple is keeping the iPhone 4s in stock free with a two-year contract; T-Mobile, by the way, plans to sell the 5c for nothing down on a two-year payment plan.

    It has also been reported that the three-year-old iPhone 4 is still available in China, Brazil and a few other countries. With more aggressive pricing, is that the true entry-level iPhone? Well, it still works quite well, and iOS 7 supports that model. More to the point, when you compare an iPhone 4 to the entry-level junk that runs an older version of Android, which is the better smartphone?

    Now some are suggesting the iPhone 4 might disappear when stocks are depleted. Maybe, or maybe Apple will keep building them so long as demand remains high in some parts of the world.

    Unfortunately, some hoped the iPhone 5c would carry an entry-level price, rather than merely being $100 less than a comparable iPhone 5s. But it's a sure thing demand will be high, and many customers will decide they don't care about the fingerprint sensor, 64-bit, a coprocessor, or a better camera if a perfectly good smartphone can be had for less money.

    In any case, when you read this article, preorders will be in full force. It remains to be seen how quickly Apple will sell out, and how many will be left to sell on September 20. Remember that the iPhone 5 debuted to five million sales the first weekend. What's going to happen this time, and will the skeptics be satisfied? Probably not.



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    2 Responses to “The Apple Myth Makers Prosper”

    1. […] “The Apple Myth Makers Prosper: So I listened to a talking head on one of the cable news/commentary networks, MSNBC. In being asked why Apple’s stock price declined sharply on Tuesday and Wednesday of this week, he said that Apple isn’t good at producing iterative upgrades. They only succeed when they overhaul a market.” — “The Tech Night Owl” (www.technightowl.com) […]

    2. Constable Odo says:

      Apple shareholders are being pounded to death by the new media. Not even one iPhone has reached the hands of consumers and yet all the conclusions had already been drawn on how big a failure both iPhones would be. These analysts and pundits are uncanny about predicting the future, especially when it comes to Apple products. They take one look at an Apple product, declare it's too expensive and they they just start screaming about how no one will be able to afford it and Apple will have another sales failure on its hands. Wall Street seems to just love cheap products that can make instant major market share. Wall Street is clearly pessimistic about Apple because it sells higher priced products. As far as the iPhone 5C is concerned, Apple can always make price adjustments in the future if the product doesn't sell as well as can be expected. It wouldn't be the first time Apple has dropped the iPhone's price. Apple may be just testing to see what the market can bear in terms of higher pricing.

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