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  • Newsletter Issue #700

    April 29th, 2013

    THIS WEEK’S TECH NIGHT OWL RADIO UPDATE

    Has the time for industry conferences at physical locations come and gone? Consider that Apple announced that tickets were available for their annual developer-oriented event, WWDC, and two or three minutes later, the tickets were gone. Well, except for a few offered selectively to additional developers.

    Of course, it’s also true that thousands and thousands of potential attendees had queued up at their computers, ready to click the button to order tickets at the moment they became available. The real problem, however, is that an event of this sort will never be able to include a decent percentage of those who really want to pay for a $1,599 conference. There’s just not enough capacity, unless Apple rents a stadium.

    Some suggest Apple would do better to take the whole shebang online and set up conferences in a way that anyone around the world can “attend” for a modest fee. It’s not as if the budding developer is necessarily prepared to travel to San Francisco and pay a $1,599 fee. Isn’t the iOS a great equalizer, allowing even the smallest developer to build apps that will sell a million copies overnight?

    Now on this weekend’s episode of The Tech Night Owl LIVE, we presented commentator Stephen Baker, Vice President for Industry Analysis at the NPD Group, who talked about Apple’s performance in the last financial quarter, the state of the PC industry, and about the potential for such future TV technologies as 4K, also known as Ultra HD.

    In the second half of the show, John Martellaro, Senior Editor, Analysis & Reviews for The Mac Observer, talked about ways in which Apple might change the setup for their Worldwide Developers Conference to accommodate more developers, “the power and scope of Apple,” and why it’s a good thing that Microsoft considers the iOS boring.

    On this week’s episode of our other radio show, The Paracast: Gene and Chris are joined once again by guest panelist Goggs Mackay as they explore the ramifications of the controversial episode about UFO videos with Blake Cousins, and the polarized listener reaction. This episode also focuses on the state of UFO and paranormal research, UFO promoter Steven Greer’s new UFO documentary allegedly showing the body of a miniature human who might be an alien, and even how to take your own UFO photos — real ones.

    Now Shipping! The Official Paracast T-Shirt! We’re taking orders direct from our new Official Paracast Store, where you can place your order and pay with a major credit card or PayPal. The shirts come in white, 100% cotton, and feature The Paracast logo on the front. The rear emblem states: “Separating Signal From Noise.” We’ve also added a huge selection of additional special custom-imprinted merchandise for fans of our show, along with a redesigned storefront.

    THE iPHONE VERSUS ANDROID: IT’S ABOUT CUSTOMER LOYALTY

    In the weeks ahead of the release of Samsung’s flagship smartphone, the Galaxy S4, we heard of at least one high-profile switch from iPhone to Android. Supposedly the Android universe offers a better user experience for those who want to customize their gadgets to a fare-thee-well.

    In passing, I am currently using a Galaxy S3, but not because I decided to make a permanent switch from the iPhone. It’s about doing a proper extended review and learning more about Android, although Samsung’s user experience is heavily modified. That it happened around the same time that the well-known tech columnist made his switch with lots of pomp and circumstance is, so far as I’m concerned, sheer coincidence.

    It was, however, troubling to read the columnist’s articles about his reasons for the switch, where he kept repeating the same points and made a huge deal to apologize for his decision, assuring his readers he still loved his Mac and his iPad. It came across as an act of reluctance, so why bother?

    Now public switches of that sort have the consequence of playing into the hands of Samsung, who is also known to pull dirty tricks against competitors. Consider the unfortunate episode in Taiwan, where they funded attacks against HTC. But nobody from Samsung is offering me anything to stick with a Galaxy smartphone. They simply offered product for review, same as any other company, even Apple. Nothing stops me from returning to an iPhone when the reviews are over and done with.

    Where the rubber meets the road is whether customers are satisfied. According to a recent Yankee Group survey, some 91% of the iPhone customers who participated plan to get another when they’re ready to upgrade. Only 6% of customers plan to switch to Android. With Android, the satisfaction rating is 76%. Of those who plan to switch, 18% will choose an iPhone next time.

    This is a pretty significant matter, because it hurts the long-term success of Android even though Google’s platform is number one around the world right now. To be fair, those satisfaction ratings are U.S. based, but that doesn’t mean Apple isn’t doing as well overseas.

    Where Android excels is in the lower-priced arena, where Apple doesn’t get involved, except for a free iPhone 4 with a subsidized carrier contract. Without the contract, the price is generally over $400, which is decidedly not cheap, particularly when customers have to pay the full price upfront, or load a credit card to make the transaction.

    In addition, as more and more people buy smartphones around the world, many upgrading from even cheaper feature phones, the market will inevitably become saturated. According to Stephen Baker, a noted industry analyst from the NPD Group who is a regular guest on my tech radio show, that is happening even now. What this means is that customer churn will become a more significant issue.

    Indeed, if you can believe recent surveys, the extremely high customer satisfaction ratings for iPhone users, if it continues, means that the iOS platform stands to gain over time against Android. That’s already happening in the U.S. With the iPhone now available from all the major carriers, it appears the percentage of customers who choose them remains higher than Android. This is the sort of customer base Apple depends on.

    Moreover, the happy customer will also look at other Apple gear, such as the iPad and Mac, when they want to make tablet or a PC. This is the ongoing value of Apple’s halo effect, and the tight integration of hardware and software.

    One major problem in the Android universe is that you can buy two different smartphones using the platform that are otherwise fairly equal in specs and end up with what seem to be totally different gadgets. In making Android open source and leaving handset makers and carriers free to pack on their own junkware and custom interface elements, consistent branding has played second fiddle.

    What this means is that, once a customer gets used to the way things are organized on a Samsung Galaxy S, if they come home with an HTC One next time, there is the potential for plenty of confusion. Sure, the experienced user will be able to modify the settings with the usual poking and prodding of the preference panels. But someone who wants things to just work may be disappointed. This may also explain why, amid the app overload on the new Samsung Galaxy S4, there’s an Easy Mode to set all that junk aside and let you just use the thing.

    Sure, Apple can screw up. Certainly the so-called Mapgate uproar, when Apple introduced their first home-grown navigation system, didn’t exactly please the fan base. But it doesn’t seem that customers are any less satisfied with their iPhones. If Google is at all concerned about making Android survive and prosper on the long haul, they need to pay attention to the reasons why customers want to switch platforms, and why the vast majority will buy iPhones. That may not mean much right now, but it will if things don’t change over the next few years.

    SO WHEN WILL APPLE’S NEXT NEW PRODUCT ARRIVE?

    It’s a sure thing that many loyal Apple customers were highly disappointed when Tim Cook made it clear, during last week’s quarterly call with financial analysts, that new product launches will happen between fall and all of 2014. So does that really mean a dearth of refreshed gadgets between now and then?

    Apple has already indicated it plans to talk about the next versions of iOS and OS X at the WWDC in early June. But that doesn’t mean you’ll be able to get your copies then and there. No doubt Apple wants to give developers two or three months to play with betas and report significant bugs, so expect a fall introduction for both.

    Sure, this situation won’t satisfy those who expected to get the goods on OS 10.9 by now, since Apple has moved to roughly annual upgrades. It may also be true that giving Jonathan Ive authority over human interface probably meant a longer gestation period, since more serious changes have to be made. With iOS 7, you would expect the upgrade to coincide with the arrival of a new iPhone, which is also expected this fall.

    But what about Apple’s note-books? There’s already talk of upgrades arriving in June that will include the forthcoming Intel Haswell chips. One prediction says that the MacBook Air and the regular MacBook Pros will be refreshed by late June, which is bound to boost sales numbers for the June quarter. However, the Retina Display models will arrive later, since it supposedly takes longer to get the high resolution displays. But if they use the same display components as the current models, that would make no sense whatever.

    So much for paying attention to analyst predictions.

    But that doesn’t mean there won’t be a MacBook Air with Retina display. The real impediment is whether the hardware is cheap enough to allow Apple to abandon regular displays, and the answer may still be no unless Apple has managed to make production costs and yields far more efficient. We’ll see.

    However, I suppose just popping faster parts into an existing model is a relatively minor upgrade in the scheme of things, so it could happen without necessarily invalidating Cooks’ prediction about new gear not arriving until fall. I suppose Apple could reveal a major upgrade to the Mac Pro, and hold off actual shipments until August or September — close enough to the fall promise.

    Besides, if Apple manages to get such products out ahead of time, they come off as heroes by anyone’s estimate, except for the usual offenders among industry and financial analysts.

    The real issue, however, is whether release schedules make that much of a difference unless they are delayed by a significant amount of time. Any of the refreshes expected of current Apple gear would be coming within months or as long as a year. That’s pretty normal in the Apple universe, but things seem longer this time because Apple introduced so many upgraded products last fall. I suppose if the iMac was postponed until this year, fewer skeptics would be complaining.

    Regardless, the most important issue is whether Apple introduces buggy products, or products that require several severe firmware and OS upgrades to behave reliably. Sure, new Macs often get a maintenance upgrade or two within the first few weeks, but the problems usually aren’t too serious.

    But it’s also true that the first generation Intel-based note-books, circa 2006, had serious annoyances, such as running too hot, or having defective batteries. It may well be true that Apple rushed the Intel transition for strategic reasons, but it also left customers with hardware that required repair, or firmware upgrades to work best. However, the CEO at the time was Steve Jobs, so those who now want to see Tim Cook fired have little to complain about.

    I also think Cook is more sensitive than Jobs to the harm caused by allowing new gear to go on sale with a few too many bugs, and is more willing to hold off releasing the latest and greatest hardware until they pass through more thorough Q&A tests. But that still won’t be good enough for some who want Apple to upend an industry at least four times a week, and twice on Sunday.

    THE FINAL WORD

    The Tech Night Owl Newsletter is a weekly information service of Making The Impossible, Inc.

    Publisher/Editor: Gene Steinberg
    Managing Editor: Grayson Steinberg
    Marketing and Public Relations: Barbara Kaplan
    Worldwide Licensing: Sharon Jarvis



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    2 Responses to “Newsletter Issue #700”

    1. DaveD says:

      There were many betas of OS X 10.8.3 and it appeared to have paid off. I haven’t read of many complaints that the update broke my Mac. Perhaps, future iOS updates need to be baked in the oven longer.

      I do agree with you about Mr. Tim Cook. With the experience of Maps behind him, he would not want to go through it again. To me, that is a good thing. I would rather wait for Apple to solidly test a product before releasing. I like when “it just works.”

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