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  • Where Unsuccessful Products Are Successful

    May 18th, 2017

    I don’t want to consider the crazy developments in the world of politics, where the definition of “fake news” depends on your belief system. Instead, let’s look at the crazy developments in the tech world, where Apple is always failing or about to, and supposedly successful products really aren’t successful after all.

    In yesterday’s column, I mentioned a main offender, Microsoft Surface PCs. Quarter after quarter, sales failed to grow all that much. They exceeded one billion dollars and then they dropped 26% in the March quarter.

    But every time Microsoft had something new to announce, it was proclaimed potentially disastrous for Apple. Even the $2,999.99 Surface Studio, a large all-in-one PC with a touchscreen display that can lay nearly flat, didn’t help to boost sales. Well, maybe it kept them from going even lower. I mean, it’s not a bad idea, but it sort of brings to mind the complicated articulated arm of an iMac G4, though the latter wasn’t nearly as flexible in the way you could move the screen.

    When Apple introduced the MacBook Pro with Touch Bar, the critics dissected every element of the design. It didn’t need to be slimmer and lighter. The Touch Bar was a needless extravagance, and why doesn’t it have 32GB of RAM? Ignored was the fact that Surface notebooks also appear to top out at 16GB.

    In the end, Mac sales were up, Surface sales were, as I said, down.

    Then there are suggestions that Apple is behind the curve by not competing with the Amazon Echo. Not said is the fact that an iPhone may be a more flexible voice assistant, and it certainly has better security. Apple’s Messages is compatible with standard SMS protocols, so anyone with a smartphone, any smartphone, can exchange messages with you. Amazon’s proprietary messaging on the Echo works only with another Echo.

    Echo sales may be as high as 11 million, which isn’t bad, until you consider it was first announced in 2014. So what Apple product do you compare it to? Even the Apple Watch has higher sales.

    Now we have Samsung. Whenever there’s a new flagship Galaxy smartphone, Apple is in deep trouble. Reviewers fawn over the new gadgets, even when there are serious flaws. So consider the first attempt to attach a fingerprint sensor to one some years back, which failed to match the iPhone’s Touch ID in recognition accuracy. This doesn’t mean Apple’s solution is perfect, but Samsung’s has almost always been worse.

    The Galaxy S8, just released a few weeks ago, has already been criticized for the awkward rear positioning of its fingerprint sensor. You are apt to touch the camera lens instead, causing smudges. The facial recognition can be fooled with a photo, and the iris detection feature doesn’t work so well if you wear glasses, or in darkness or bright sunlight. In other words, critical security features are undependable.

    And do you remember how last year’s Galaxy smartphones, which were supposedly water-resistant, failed dunk tests? I will avoid the flaming Galaxy Note 7.

    Are these products supposed to be better than iPhones?

    Then there are sales. Although Apple didn’t reveal any figures for the iPhone 7’s launch weekend, they have always managed to move millions during that three-day period. Some 13 million units were sold when the iPhone 6s debuted in 2015.

    Now to put things in further perspective: When a Samsung Galaxy arrives, carriers will commence heavy-duty promotion, often with two-for-one deals. So you get two handsets for the price of one. Sometimes it’s part of a deal to attract customers from other carriers, but you wonder why it happens so quickly. Doesn’t Samsung or its carrier partners have any confidence at all that their high-priced gear can sell at full price without incentives or discounts, at least for the first few weeks?

    True, you can get two-for-one deals on an iPhone 7 nowadays. But it’s also eight months since it went on sale. It’s nearing the end of its initial product cycle, and customers are already waiting for Apple’s next act. So it stands to reason that carriers will want to make deals in order to peel off customers from rivals.

    So with all those discounts, just how well is the Galaxy S8 and its larger brother, the Galaxy S8+, doing? Well, according to Samsung, they sold five million in the first month. Yes, it took a full month to reach that number. In comparison, the Galaxy S7 and the S7 Edge sold an estimated 7-9 million units during last year’s launch month.

    Outspoken tech columnist Daniel Eran Dilger, writing in AppleInsider, reports that Galaxy smartphone sales peaked in 2013, when Samsung sold 10 million copies of the Galaxy S4. Total sales have dipped since then, even as iPhone sales mostly increased. Even when Apple reported somewhat lower sales for the iPhone 6s, they were still far higher than Samsung can manage with its flagship Galaxies. True, Samsung still sells more handsets than Apple, but most of those sales are confined to lower-cost gear, where very few profits are made. Apple continues to deliver most of the profits in the smartphone industry.

    Expectations are high for the next iPhone lineup, which is rumored to include an iPhone 8 to honor the product’s 10th anniversary. If there are indeed three separate models, which would include an iPhone 7s and an iPhone 7s Plus, sales could be off the charts. Consider the alleged pause in sales of the iPhone 7 due to early rumors about the next model. Expectations are said to be high.

    None of this means that Apple can grow the market every single year. Clearly they’ve hit severe headwinds in China, though the start of iPhone SE production in India may signal much higher sales potential in that country. But, when it comes to the tech industry, up is now down, and the claims that Apple isn’t doing well, or has no vision, are just more examples of fake news.



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