So, after it was announced that Motorola Mobility was being pawned off to Lenovo for $2.9 billion, the new owner boasted that they would soon beat Apple and Samsung when it comes to smartphone sales. As usual, that quote was repeated with no reality check whatsoever.
Consider that a company will not usually sell off a division unless there’s a problem. If Motorola Mobility was doing as well as it did in the 1990s, when Motorola handsets led the world, it would still be a part of the original company. Certainly if sales had increased under Google, and losses turned to profits, do you really believe the division would be sold off at a loss? What sense would that make?
Of course, Google isn’t exactly going to admit that they made this deal with Lenovo at a fire sale price because the division was failing. A corporation’s spin machine seldom recognizes reality. Whether Apple, Amazon, Google, Samsung or anyone, bad news is tempered with an excuse.
On the other hand, if anything Apple sells produces losses, the stock price would fall far more rapidly than it has in recent days (although it’s pretty flat as of the time I am writing this column). Even good news from Apple is frequently regarded as somehow bad. So Apple sells a record number of iPhones, claiming more could be sold if the product mix was right. That means they built too many copies of the iPhone 5c, and not enough of the iPhone 5s. What this means, regardless, is that the average transaction price no doubt skewed higher. Isn’t that a good thing? After all, it means higher profits.
Except that some Wall Street analysts pulled out higher estimates — from somewhere, but not necessarily from real sources.
But let’s return to Lenovo and their brazen boast. True, Lenovo does very well in the declining PC market. True, Lenovo seems to be growing smartphone sales in Asia, but how does that translate to a magical huge jump in sales soon as the Motorola brand name is affixed to those products? Even if the poor selling Motorola handsets are replaced with newly-designed gear, will it make any difference?
Why should a potential customer suddenly believe that Motorola is a competitive product to consider after years of falling sales? Can Lenovo’s influence somehow spark a new wave of innovation that hasn’t existed in recent years? Where’s Lenovo’s reputation for true innovation in the PC market? Why should that company’s executives be taken seriously?
Of course, this is nothing new. Whenever a rival to Apple comes out with a supposedly competing product, that claims will garner headlines by some segments of the media. The press release will be heavily quoted without critical comment, but few reporters will actually do their homework and check the company’s history to see how previous product introductions have fared. The goal is to somehow get Apple involved in the story–or at least the headline — even if there is no direct involvement, and no evidence whatever that potential Apple customers will prefer the rival product — now or ever.
You see some of this at the annual Consumer Electronics Show, where loads of new tech gear, both real and potential, are on display. In recent years, some companies have announced products that seem clearly aimed at what Apple might do. So in 2010, you saw new tablets being introduced, but most of them vanished in the haze when the iPad arrived.
Lenovo famously introduced a smart TV set some time back, though it appeared to be designed strictly for the Asian market. But it also came at a time when anticipation for a new Apple TV solution had reached a fever pitch. These days that anticipation is still there, but mostly simmering in the background as Apple TV quietly offers more streaming channels; the latest is a professional wrestling channel.
This year, in addition to revised connected TV sets with Ultra HD and less 3D, there were smartwatches. Pebble, Samsung — you name it. Yet it hasn’t been demonstrated yet just how well one of these gadgets will fare as mass market gear. Selling a few hundred thousand units here and there wouldn’t likely impress Apple.
But the headlines? It’s often about introducing something to head off Apple at the pass, compete with Apple, do something to Apple, do anything to Apple. Sure, if it’s a cheap smartphone or PC, it’s quite possible that Apple will be bested in total unit sales — as Samsung has done with mobile handsets — even though the profits from most of that gear will be lacking.
Fair competition, however, means going after Apple in its own markets. That means premium smartphones, premium tablets and premium personal computers. But when a company claims it can beat the competition, that’s little more than one wrestler saying they can wallop another wrestler. You take it with the same grain of salt until they actually produce.
Far too many members of the media, however, mistake the sales pitches for news.
- 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 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.
- 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.
- Apple in 2014: Are There No Original Ideas? So you've heard nearly the same chatter from a number of sources about what Apple might do in 2014. Certainly Tim Cook has made some big promises, about great products and some new product categories. That ought to be quite sufficient to fuel the speculation, and there has been plenty of that. But even the vaunted tech site Ars Technica hasn't delivered any compelling new ideas. It's all about variations on the theme. Now before I go on, let me confess that I am not a product designer or engineer, and I do not play either on radio or TV. But I have written sci-fi novels and I do have a slight feeling for the future, so maybe I can contribute a little. I would, though, expect more of the tech media, and it doesn't seem they are delivering very much. So first we have the usual iterative upgrades. A faster, more energy-efficient Mac lineup, an iPad that, after a major change to the flagship product this year, will be confined to modest updates in 2014. Maybe there will be slight changes to the aging iPod lineup, but then there's the iPhone. Apple revises form factors in alternate years, even though the media hasn't gotten the memo. It would seem, then, that an iPhone 6 would look at least somewhat different. Maybe it'll have a larger screen, and several measurements between 4.5 and 5 inches have been bandied about. Logic dictates that the iPhone 5s and 5c will be sold for $99 less, each, meaning the 5c will be free with a two-year contract. Nothing surprising so far. In fact, if the iPhone 6 goes this route, the only question will be whether Apple will divide the product line with more than one new size. But since fragmentation isn't their game, I expect not. Sure, it'll have snazzy looks and all, with more powerful guts, perhaps more battery life and a camera with a higher megapixel count, but there are no surprises in any of that. So what's left? Well, the tech bloggers, and the financial pundits for that matter, demand Apple do something original. But when you ask them what they are thinking about, it's pretty much the iWatch and an Apple connected TV set. Sure, perhaps there will be an iWatch or some other wearable device of some sort. There is that unconfirmed rumor that Apple has over 100 engineers working on the product, and some executives from the fashion industry might have been hired to handle the development and marketing of wearable gear. Apple is also trademarking iWatch in some countries, but that could be a defensive move to reserve the name in case something does come down the pike. It doesn't mean it's happening in 2014. Indeed, is there a demand for a smartwatch from anyone? Does Apple have to build one? So far, smartwatches haven't gone very far. The overpriced and underpowered Samsung Galaxy Gear was a miserable failure, with Samsung being forced to confess that the claim of 800,000 sales was based solely on shipments. But that's their usual game when it comes to reporting sales. The other supposed "lock" from Apple is some sort of enhanced Apple TV box, a connected TV, or perhaps both. Much of this seems to come from the statement from Steve Jobs in that authorized biography about developing the magic interface that will revolutionize the industry. Maybe. But Jobs might also have said that to spook the competition, forcing them to deliver something, anything, to head off Apple. Just remember how a number of tablets were introduced ahead of the arrival of the iPad in 2010, but most never saw the light of day when Apple's tablet solution was launched. Of course, they've been saying that Apple has a TV set in development for a couple of years now if not longer. There are rumors that several display sizes have been sampled, no doubt for prototypes. There are no doubt prototypes aplenty in Apple's secret labs, but most of those prototypes will never be released for manufacturing and sale. True, Tim Cook has said that TV and the living room remain areas of intense interest for the company, but how or when that interest will manifest itself is still anyone's guess. All right, that's the 2014 story that you've heard about in various and sundry ways across the media. There are minor variations here and there, but does any of it come as a surprise? Well, maybe a larger iPad, but is that all Apple can do? The real question is whether there are other product segments that Apple is working on that may be reflected in new products this coming year and beyond. That's the real question that isn't being answered. Just this week, there were published reports about Google's pact with Audi, the luxury car maker owned by Volkswagen, which would install Android as part of the brand's infotainment systems. Microsoft is already there with mixed results. It seems to do all right with the Kia UVO system, but not nearly so well with MyFordTouch, a flawed design that has caused Ford to get far lower initial quality and reliability ratings. Apple has iOS in the Car under development, and Siri support is already beginning to appear. The media wants to portray this as a fight to the death between Apple and Google to control the auto interface. So far so good. But that is fairly predictable. It doesn't mean Apple will release an iCar, a full-blown motor vehicle. What's more, purchasing Tesla, the electric car maker, wouldn't make very much sense either, although some have demanded just that. At the end of the day, is Apple planning something us that'll amaze us and send us scurrying to consult credit card and checking account balances? That's the real question, but I've yet to see a compelling answer.
- The Apple “Must” Report Did you hear that Apple may descend into irrelevance real soon now if they don't make some big changes? But how could that be? After all, wasn't Apple just named, for the seventh year in a row the "World's Most Admired Company" company in a Fortune magazine survey? What a disconnect. But that doesn't stop some tech pundits from assuming they know more than the "World's Most Admired Company" when it comes to products, product strategy, and product pricing. Forget for the moment the faux controversy over the alleged delay in producing a fix for the SSL bug. We don't know there was any delay other than the normal time it takes to make even a simple update, and test it before being deployed around the world. It's not as if there are reports that millions of iPhones, iPads and Macs are suddenly self-destructing as a result, so the updates appear to be successful. And it's not been disclosed that people were actually compromised by what was clearly a very serious security leak. So let's move on. There's a report this week that repeats an oft-repeated meme, that Apple has lost the ability to innovate. One alleged reason is that Google is buying more companies than Apple, or at least more high-profile companies, as if you cannot innovate without a checkbook. I wondered, in passing, whether the writer in question ever heard of Motorola Mobility, and how Google had to sell it at fire sale prices — some $3 billion — to Lenovo — thus leaving a company with a long pedigree in the mobile handset industry in the hands of yet another owner. This came after quarter after quarter of red ink, but you wonder why the media hasn't made a huge deal about this abject failure. Instead they quote the promise by Lenovo that Motorola handset sales are going to exceed those of Apple and Samsung. Right, sure! Well, there's always the next company. So, among Google's recent acquisitions, curiously for $3 billion, is Nest, a company co-founded by former Apple iPod executive Tony Fadell. Aha! He worked for Apple and was instrumental in the iPod's unexpected success, so why doesn't Apple want to make intelligent thermostats and smoke detectors? Besides, how would Apple magically become innovative from buying Nest, unless they rejiggered the product in some major way so it took on new markets? What's more, how many companies did Google acquire that never resulted in some trend-setting product, or set the tech world afire? There is Android, of course, and nobody denies the success of the number one mobile platform on the planet, but was it innovation that convinced Google to build an OS in the image of Apple's iOS, and for licensees to build cheaper and cheaper gear to spread smartphone joy to the masses? Profits? Well, Google earns money from the targeted ads, which is what they've always done. Is that innovation? As far as the handset makers are concerned, only Samsung, among all Android licenses, is making good profits. When Apple acquires a company, it's primarily to bring new technology in-house that will later appear in an Apple product or service. We all know about Siri, and PA Semi is one of the developers of Apple's A-series mobile chips. The Touch ID fingerprint sensor came as the result of buying yet another company, AuthenTec. So you can see honest-to-goodness advantages in these acquisitions. But you may not see the fruits of other acquisitions until some time in the future. But to some, they just aren't flashy, as if flash equates with innovation. Maybe Apple should buy out the Tesla electric car company and build $70,000 battery-powered motor cars. Sure, a Tesla is a well-reviewed product, with high safety ratings, and there will be cheaper models in the next few years. But is Apple's next success the car business? Besides, how innovative would it be to buy out Tesla, which Apple could do quite easily if CEO Elon Musk was amenable? To be fair, Apple has reportedly had conversations with Tesla, though some suggest it's about making deals about future battery technology, which would benefit both companies. Beyond making flashy acquisitions for some purpose or other, there is the constant demand that Apple build cheaper gear, or at least cut the prices of exciting products. The argument goes that Apple will make up the difference in high sales, not realizing that the stock market will freak if Apple sacrifices profits. And if sales don't increase enough to make up for the difference, where does that leave Apple? It's not as if it would be convenient to just restore prices back to where they were without any potential customer impact. If you think some might be upset Apple's prices are too high, what if they cut those prices and then changed them back to what they were? Talk about destroying customer goodwill. Today, you know where Apple stands. Well, many do, if not some members of the tech and business media who believe that Apple is losing credibility because of not buying as many companies as Google, or because there are no $200 unlocked iPhones to be had. Yes, if Apple sales really and truly suffered, rather than flatten, you can bet the company would find it necessary to take appropriate measures. But record sales and continued high profits don't define a company that's in trouble, except for those who wish otherwise.
This article was posted on Tuesday, February 4th, 2014 at 12:00 AM and is filed under News and tagged with: 3D, Amazon, Apple Tv, CES, Consumer Electronics Show, Google, iPad, Iphone, iPhone 5C, iPhone 5S, Lenovo, Motorola, Pebble, Samsung, smartphone, smartwatch, Ultra HD.