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  • So What Exactly is the Best Start in iPhone History?

    October 17th, 2014

    Normally, when Tim Cook introduces an Apple media event, there are lots and lots of numbers. That’s Tim’s expertise, and you expect he’s working his Numbers spreadsheets overtime to select the results that are most favorable to Apple. That sort of happened during Apple’s Thursday media event, where new iPads and a 5K Retina iMac were introduced.

    But when it come to the raw figures, all I heard were crickets. Yes, this presentation was shorter and smoother than last month’s, which was plagued by frequent interruptions in the video stream and, for a time, an audible simultaneous Mandarin Chinese translation. This time, playing to a smaller venue at Apple’s Cupertino, CA headquarters, video quality was smooth, never missing a beat. Software chief Craig Federighi even had a few moments to banter via telephone with comedian Stephen Colbert, who was introduced as a mythical security czar to deal with product leaks.

    But what did we learn about the first month of iPhone 6 and iPhone 6 Plus sales? Cook said it was the best first month ever for the iPhone, “and I don’t mean by a little. By a lot. A whole lot.”

    So what does that mean? How many is “a whole lot” anyway? Cook didn’t say, and some of the stories I read didn’t even bother to consider the unanswered question. The first two weeks of sales will be revealed on October 20th, when Apple presents the results for the September quarter, but some real numbers to whet our appetites would have been welcomed.

    Still, Apple downplayed the negative connotations of other figures. So we know the total number of iPad sales since the product debut and the most recent year, but nothing about the impact of those declines that extended over two quarters. We know that nearly half the iOS user base has upgraded to iOS 8, but not that the rate is still behind the level achieved by iOS 7 in the comparable period. We do know that adoption level of the last major update to Google Android, version 4.4 KitKat, took almost a year to reach 25%. So Apple is still way ahead of the curve.

    With the release of iOS 8.1 due by October 20, which will add Apple Pay support and expected bug fixes, maybe the adoption rate will begin to soar. But let’s not forget all the new gear, iPhones and iPads, which will ship with iOS 8.1 and later. I still expect to see a 75-80% overall adoption level by the time iOS 9 is released next year.

    The cat was sort of out of the bag on the new hardware as Apple made a strong effort to boost the iPad lineup. The iPad Air 2, for example, is 18% thinner than last year’s “thinner” version, powered by an A8x processor, with an improved display, upgraded camera components, and Touch ID. Touch ID is also incorporated on the iPad mini 3. Apple also followed the iPhone 6 playbook by reducing the price of larger storage quantities. The standard 16GB configurations cost the same, but the 64GB and 128GB models are $100 cheaper than last year. An original Mac mini remains in the lineup at $249, which takes it closer to low-end Android tablet territory.

    Apple appears to be pulling out all the stops to push more product in a flat market, but the critics will continue to regard the changes as little more than minor refreshes. At the same time, they can’t actually detail in any useful way what Apple should have done to make a real difference, and it’s not just about adding useless features.

    The rumors were also correct about the arrival of a long-awaited Mac mini refresh. With higher performance and Thunderbolt 2, the mini returns to the price level of the original, $499. Apple’s more aggressive pricing makes it more difficult than ever to justify purchase of a Windows PC.

    The major Mac introduction was the predicted 27-inch iMac with Retina display, referred to as a “Retina 5K display” by Apple because of its 5,120 x 2,880 pixel resolution. That’s sufficient to edit a 4K movie in Final Cut Pro and still have screen space left for the controls and menus. There are also significant display hardware enhancements to get all those pixels into a single display, along with speedier processors and graphics chips.

    There’s a price penalty to get a “Retina 5K display” on an iMac, but not as much as you’d think. The basic 27-inch iMac remains in the lineup beginning at $1,799, and the high resolution version will start at $2,499, including a 1TB Fusion drive, which combines solid state and standard hard drive storage. Normally the Fusion drive is a $150 upgrade by itself, thus reducing the real price difference. A gussied up Retina iMac, maxed out with memory, along with a 4GHz Intel i7 processor, speedier graphics, and 1TB solid state storage, retails for $4,399, well into Mac Pro territory.

    But consider that the cost of a separate 27-inch 5K display will run in the neighborhood of $2,500. That’s based on the expected pricing of the Dell Ultrasharp 27-inch display, which is due later this year. Getting similar high-resolution joy with a full computer inside starting at the same price doesn’t seem such a stretch.

    Yes I do expect there will be fewer potential customers for the Mac Pro. But there will still be workflows where the superior processor and graphics of Apple’s workstation computer will be preferred.

    Overall, the Mac lineup has expanded in a sensible way, with more choices for more potential customers. If reports that Mac sales are continuing to rise at a pretty good clip are true, Apple will have some terrific news to report next week during the conference call with financial analysts.

    As part of the product intros, OS X Yosemite and Yosemite-savvy versions of iWork were released on Thursday for download, and the new Macs are shipping immediately in standard configurations. The refreshed iPads will ship late next week.

    Still missing in action was news about the next version of Apple TV, which ought to have 4K support according to some predictions. But I suppose Apple could do that with a simple press release. If there are no significant feature improvements, a media event is unnecessary, and there would still be a new product to sell for the holiday season. But I’m not taking bets on whether this is going to happen this year.



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    5 Responses to “So What Exactly is the Best Start in iPhone History?”

    1. dfs says:

      “There’s a price penalty to get a “Retina 5K display” on an iMac, but not as much as you’d think.” That’s a whopper of an understatement. According to Apple’s page of tech specs, the new iMac sports an IPS panel, not a TN one. Until now, a large-screen IPS monitor has cost at least three grand and you needed a Mac Pro to drive it (and believe me, you want IPS, not TN– as soon as the price comes down on IPS, TN will quickly disappear). So the Retina iMac is an incredible bargain, as Gene says it can do lots of serious work that previously required a Mac Pro. Even if you buy it maxed out with every available upgrade it’s still a good buy.

      I can think of only two criticisms. First, for such a sophisticated piece of equipment the entry-level 8 gb. of RAM is pretty chintzy, it should start at 16. And, as time goes on televisions get more and more like computers and computers get more and more like televisions. It’s easy to predict that soon they will converge. A Retina iMac with an HDMI port or even an onboard tuner could double as an absolutely great t. v. monitor for somebody living in a dorm room or small studio apartment. Sooner or later I expect Apple will take this final step. Why didn’t they go ahead and add that HDMI port now? If you look at the price of 4k televisions currently on the market, that would have made the Retina iMac a REALLY incredible bargain!

    2. dfs says:

      This is the most informative hands-on review I’ve seen so far:

      http://www.marco.org/2014/10/16/retina-imac-vs-mac-pro

      • @dfs, I agree with the premise of that article. More and more Mac users can get the performance they need from an iMac, and the 5K model is just another argument in support. But this doesn’t mean the Mac Pro is going away. A certain set of users will continue to require a multicore workstation of this sort.

        It’s interesting when you realize how the iMac started, as a relatively low-cost consumer computer based on notebook parts.

        Peace,
        Gene

    3. dfs says:

      Yes, them and also people who need multiple monitors, and that’s pretty much all that’s left, so the MacPro is more than ever a piece of specialized lab/studio equipment. The circle keeps shrinking.

      What’s interesting in all of this has to do with Apple’s corporate strategy — the new Retina iMac is dramatic evidence that Apple is unconcerned about cannibalizing the Mac Pro.

      • @dfs, Apple never worries about cannibalizing their own gear. Tim Cook said that some iPad sales were lost in the last quarter to Macs and likely the iPhone 6 Plus. Also, the 5K Retina iMac can reach professional users for whom a Mac Pro is just too expensive, particularly when you consider the need for a display that isn’t even available yet.

        Peace,
        Gene

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