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  • Newsletter Issue #613

    August 29th, 2011

    THIS WEEK’S TECH NIGHT OWL RADIO UPDATE

    So I was seated in my office, doing post-production on one of my radio shows, when Mrs. Steinberg comes in and asks if I’ve heard the news? “What news?” “Steve Jobs resigned.”

    Well, it didn’t take very long to find the breaking headlines, about something I realized might be considered inevitable, but still a surprise. The short resignation letter made it clear, though, that while Jobs felt he couldn’t continue working as CEO, he would nonetheless assume the role of Chairman of the Board. This meant that his presence at Apple might involve fewer hours on the job, but he hasn’t left the company.

    Or at least that’s my impression, although most of the articles you read about Jobs’ departure as CEO sound like a eulogy. Yes, I realize he has been quite ill, and recent photos of his all-too-thin figure remain disturbing in their implications. But if he can somehow manage to survive, even 20 hours a week of Steve Jobs devising new products and strategy for Apple may be quite sufficient. Clearly he has assembled a deep bench of talent that will continue to execute his vision.

    With so many recent developments that affect Apple, we confined the impact of his resignation to just one interview on this week’s episode of The Tech Night Owl LIVE, where we called on industry analyst Stephen Baker, of the NPD Group, to provide a common sense point of view about the matter.

    In other coverage, we talked about the fallout from Google’s decision to buy Motorola Mobility, and HP’s decision to stop building WebOS gear, such as the failed TouchPad tablet.

    Along to analyze these and other recent developments and how they might affect Apple were Daniel Eran Dilger, from Roughly Drafted Magazine and AppleInsider, and Peter Cohen, co-host of the “Angry Mac Bastards” radio show and Executive Editor for The Loop.

    On this week’s episode of our other radio show, The Paracast: Gene and Chris present a special lunar roundtable, exploring the incredible mysteries on the Moon, and why we haven’t returned. Our guests include researcher Don Ecker, a forum moderator for The Paracast, and host of the Dark Matters radio show, and author, publisher and world traveler David Hatcher Childress.

    Now Shipping! The Official Paracast T-Shirt — Now with New Design! 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 selection of additional special custom-imprinted merchandise for fans of our show.

    THE STEVE JOBS RESIGNATION FALLOUT: ACCEPTANCE

    Imagine if Steve Jobs resigned as Apple CEO several years ago, when he was first diagnosed as suffering from cancer of the pancreas. Remember that there was no iPhone then, nor an iPad, though both were being designed in Apple’s testing facilities. Mac sales were growing at a reasonable clip, but they were still using PowerPC processors. Intel Inside was nowhere in sight, other than another Apple lab where a version of Mac OS X for Intel was being tested.

    Yes, if Jobs departed Apple then, the company might not have had the strength or vision to become number one in the tech industry and the largest company in the world by market cap, ahead of Exxon. Nobody knows.

    Without possessing the inside details of Jobs’ actions after his illness was discovered and revealed to the board and key executives at Apple, it would seem sensible that they devised succession plans in earnest. Maybe there were there previously, but the reality of Jobs departure became a near-certainty.

    During the three sick leaves Jobs has taken, the company hasn’t missed a beat. Well, maybe that iPhone 4 “Death Grip” might be an issue, but favoring design over practicality has happened before. Let’s not forget the Power Mac G4 Cube. But this time, there appears to be little evidence that the iPhone 4’s antenna is really all that much worse than the ones on other smartphones. Some are a bit better, some are not. But only Consumer Reports magazine seems unable to find evidence of signal drops in other mobile hardware if you hold them the “wrong way.”

    In any case, former COO Tim Cook certainly demonstrated he has the chops to hold the CEO post at Apple. Some suggest he’s just a nuts and bolts person without a “magical” product vision. But we don’t really know that. Sure he comes across as the quintessential southern gentleman in his public appearances, but he certainly knows the Apple party line, and he gets his points across.

    Certainly Apple’s board has taken the steps necessary to keep Cook around, granting him a million shares in stock options over the next ten years. They are worth over $386 million at current market prices. Clearly other companies would love to snag Cook, and it’s always possible he’d bolt as much as he evidently loves Apple. But with all that money at hand, he only has to worry about his performance over the next ten years and how that performance will impact his next Apple contract, should he choose to sign one.

    Perhaps another key job for Cook is to keep Jonathan Ive around as head designer, because it is his execution of the vision of Steve Jobs and others at Apple that created what many regard as amazing products. As the company’s creative brain, his loss would be felt as much as Cook, even if he’s assembled a staff of brilliant product designers that match him toe to toe.

    So far as Wall Street is concerned, everything is hunky dory for now. After a brief slide, the stock price has begun to grow once again. Clearly the near-term future of Apple is not under threat. Indeed, some of the other developments in the tech industry, such as Google’s purchase of Motorola Mobility, and HP’s abrupt decision to stop building WebOS tablets and smartphones, augers well for Apple’s strategy going forward.

    Indeed, as you examine the depth of Apple’s competition, you’ll find they are wanting. So far, none of the other tablets have shown any glimmer of potential success. Sales are paltry. Yes, maybe Samsung is shipping a million or two Galaxy Tabs, but it appears they are doing nothing but flooding the channel, rather than demonstrating the products are truly going to catch on. Certainly the rush to bring out new models clearly demonstrates a lack of confidence in existing product.

    When it comes to smartphones, the same holds true. New models are introduced almost weekly, it seems, while Apple is still selling a product that came out in the middle of 2010, and a second entry-level model that was released the previous year, with little indication that sales of the iPhone 4 are taking a dive. Indeed, you have to wonder what the rumored iPhone 4GS or iPhone 5 will bring to the table, other than snappier performance and possibly a better camera. How many of you will trade your iPhone 4’s on Day One, even if your wireless contract lets you upgrade without paying a penalty?

    This time, there are rumors that Apple will hit a home run with the four largest wireless carriers in the U.S., meaning that you’ll be able to buy the next iPhone from Sprint and possibly even T-Mobile. Yes, I know T-Mobile is hoping to merge with AT&T, but that’s not going to happen until next near at the earliest, giving Apple plenty of time to sell versions of the iPhone for both carriers. Besides, it’s not as if your T-Mobile mobile handsets will magically stop working after the deal is consummated, if it’s consummated.

    So far as Apple’s future is concerned, if Steve Jobs is healthy enough to continue to watch over the company he co-founded as Chairman of the Board, nothing is going to change for many, many years. If conditions force him to leave that post as well, perhaps other stars will rise at Apple. Yes, I realize that companies are known to falter when their charismatic leaders depart. It’s also true that big companies go through cycles of success and failure, and Apple has had its share.

    But if Jobs stays around, maybe this reduced role, not having to deal with the numerous issues that face a CEO each day having nothing to do with products and strategy, may allow him to become even more productive in guaranteeing Apple’s future.

    THE APPLE TV AS A TV

    This week Apple confirmed they are abandoning the grand experiment of renting TV shows for 99 cents each. Since only two networks participated, it’s not as if you had a rich selection of all or most of your favorite network shows available. Besides, how many of you would actually spend that amount for every single show you watch? If your viewing fare consists of several programs each and every day, it can add up real fast. Suddenly paying $1 to $4 a day for a full slate of programming from your cable or satellite provider doesn’t seem such a large expense.

    Where Apple TV will go from here remains an open question. Some suggest Apple will launch a real subscription service to compete with cable and satellite. Others suggest an acquisition, such as Hulu, to allow Apple to provide a full slate of services that include subscriptions to all or most major network programming, perhaps as a true alternative to traditional TV delivery services. But that depends on all the entertainment companies signing up.

    And that’s largely entertainment and sports programming. What about news from cable or local stations? What about the content that fills the schedules of over 300 stations each and every day? Would an Apple subscription TV service be meant as a supplement to traditional fare? If so, you’d still need to break out that TV antenna, or at least get basic cable or satellite. Apple TV would still remain the option, and would it truly be a better deal?

    Now if Apple wanted to deliver a 24/7 TV streaming service, to accommodate all or most of your needs, including local stations, would they have the bandwidth in the cloud to deliver such programming? More to the point, how quickly would your cable or telecom Internet service freak out over the bandwidth that you used? While most services here in the U.S. still claim unlimited bandwidth, even if it’s not mentioned clearly in the Terms of Service, they will put strict caps on major offenders, the tiny percentage of users who keep pulling multimedia content from the cloud for hours and hours on end every single day.

    I suppose Apple could pay a percentage of their income from a TV subscription service to compensate the cable providers for use of their pipes. That would possibly eliminate the bandwidth caps, at the expense of losing subscribers to their own TV programming. But income is income, so maybe it won’t matter, assuming they had the capacity to meet the needs of millions of potential Apple customers. Such a move, should it occur, would turn the concept of network neutrality on its head of course.

    And I am still only speculating.

    The other possibility is that Apple will, as rumored, bring out a line of high-end flat panel TVs affording all the interface and feature niceties they can dream up in an iOS environment. Certainly Bose, a well known speaker and headphone maker, got into that game, but their set costs over $5,000, and likely has few takers. If Apple wants to enter that market, would they stick to the high end, or choose to go head-to-head with the likes of of Samsung, LG, Panasonic and Sony — and perhaps VIZIO — for the volume segments? But isn’t that market too saturated already? How would Apple make a difference?

    After all, how many TV viewers care all that much about extra apps to supplement the standard allotment of TV fare beyond the usual round of streaming services? What percentage of users even visit the menus after the initial installation? If may happen then only if a setup assistant of some sort is launched?

    Well, they said the iPhone would fail in a saturated market, but there was plenty of room to grow for the smartphone segment. Tablets never caught until until the iPhone arrived. But tens of millions of TVs are sold every year already. Is there any room for sets bearing the Apple logo?

    Or does Apple still have other ideas for their “hobby” product, the Apple TV? I suppose if I knew the answers, I would be finding a way to build my own set top boxes and making a few million dollars for my retirement.

    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 #613”

    1. […] Continue Reading… Please Link to Us!<a href="http://www.technightowl.com/2011/08/newsletter-issue-613-the-steve-jobs-resignation-fallout-acceptance/&quot; >Newsletter Issue #613: The Steve Jobs Resignation Fallout: Acceptance</a>Related Articles:Forget the iPhone OS! What About the Next Mac OS?Things We Don’t Care AboutApple Making Waves AgainDo You Think You Can Run Apple Better than Steve Jobs?Reading the Apple Tea Leaves […]

    2. Kaleberg says:

      Apple TV makes the most sense if you consider the television set itself to just be an Apple TV docking station. I’m wondering if that is what Apple is thinking about.

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