• Newsletter Issue #751

    April 21st, 2014


    In October, it will be 12 years since The Tech Night Owl LIVE debuted on a now-defunct streaming network known as MacRadio. After a promising start, I left the network after they refused to embrace the iTunes podcast system. Curious, but true.

    In 2010, the show joined the Genesis Communications Network (GCN), which featured alternative radio covering many controversial subjects. The network has since taken on a more mainstream approach, and currently features 79 shows as if this writing.

    Well, while suffering through an irritating medical problem (don’t ask), I realized I hadn’t taken a vacation in 10 years. Not one, so I decided to take the night off this past weekend. We’ll be back next week with Adam Engst, observing 24 years of TidBITS and lots more. Stay tuned.

    Meantime, I think you’ll really enjoy the discussion with Adam, since the history of the weekly newsletter he publishes with his wife, Tanya Engst, in many ways follows the history of the Internet and Apple Inc. This will be a fascinating discussion, and I’m really looking forward to it.

    On this week’s episode of our other radio show, The Paracast: Gene and Chris present special interviews with James Fox and Tracy Torme, who have teamed up to produce a feature film tentatively title “701.” This figure represents the number of unexplained cases in Project Blue Book. James is best known for his films “Out of the Blue” and “I Know What I Saw.” Tracy was chief story editor for “Star Trek: Next Generation,” and is credited for developing the “Holodeck” concept. He also created, wrote and produced the TV series “Sliders,” wrote and produced the film about the Travis Walton case, “Fire in the Sky.”

    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.


    The headline may not make very much sense to most of you. After all, Apple is a first-class money-making machine, pulling in tens of billions of dollars every quarter. True, growth isn’t as fast as it used to be. If it was, Apple would, in a few more years, have more money than any country on the planet, so such levels cannot be sustained.

    But that doesn’t mean growth isn’t quite impressive. Apple still manages to show year-over-year gains for the most part. But there have been singular misses on sales of some products, and you can argue whether financial analysts have come up with estimates that defy common sense. I wouldn’t suggest they emerge from a dark place.

    On April 23, Apple will reveal details of sales for the March quarter, and financial pundits are already saying it won’t be terribly impressive. But that’s what Apple indicated in their own guidance for the period, ranging from $42 to $44 billion, compared to $43.6 billion last year.

    You see Apple is trying to give you a realistic picture of the expected earnings potential, which means that it’s possible sales may actually be down in some categories. So is this anything to be worried about?

    Well first and foremost, sales could be somewhat better than expected. That would seem less of a possibility because Apple CEO Tim Cook is a brilliant supply chain person and his crew probably had a pretty good grasp of how sales were trending when the guidance was announced during the quarterly conference call for the December 2013 quarter.

    The Wall Street consensus suggests flat Mac sales, despite release of the still-backordered Mac Pro. iPhone sales will be up a bit, but iPad sales will be down slightly.

    Now flat personal computer sales make sense. The PC is yesterday’s news and sales are down for most of the major players in the industry. If Apple keeps them on a relatively even keel, which is ahead of the market, that’s really a good thing. It shows that, in the twilight of the PC era, customers are being more selective in buying new computers. Clearly the Mac is getting a lot of the benefit.

    A slight increase in iPhone sales, if it really happens, would actually be a good thing. The smartphone market is highly saturated, in fact flooded at the low end. But it’s not that Apple’s competition is necessarily doing any better. The new Samsung Galaxy S5 hasn’t impressed the critics. Large carriers have already been discounting the thing, or offering two-for-one sales, despite the fact that the product is newly released. Does that make sense to you?

    It’s not a fact that seems to be getting much attention. That and flat earnings from Samsung are being taken in stride by tech and financial pundits who still evidently believe that the company’s patent disputes are about rounded corners, or Apple’s patents aren’t worth very much.

    But imagine, just imagine, if the rumored iPhone 6 arrived later this year and was heavily discounted by carriers on the very first day. The doom and gloom that you’d hear about Apple would be endless. You’re already reading stories filled with doom and gloom, so imagine if Apple actually made a major price cut or any price cut on the iPhone.

    Yes, Apple has cut the price of Macs, but only slightly, and that appears to be taken in stride.

    But there is one more element of Apple’s product portfolio that’s getting some negative attention, and that’s the iPad. If the industry consensus is accurate, why would sales drop, even if they dropped a little bit?

    After all, Apple did a fairly major iPad refresh last fall. The iPad mini with Retina display was predictable, but the iPad Air was downright stunning. Surprisingly thin and light, with great performance due to the 64-bit A7 processor. So why aren’t customers not still lapping them up in higher and higher quantities?

    That’s a good question, and perhaps Apple’s executive team will have more to say during this week’s quarterly conference call. But that assumes the consensus is accurate, and you can never tell with Apple how things will fly.

    What I do expect to hear are complaints that people just don’t want to pay the “Apple premium” for a tablet, citing all that cheap gear that’s flooded the market. Quarter after quarter, it appears that the iPad’s share of the market is declining rapidly, although those numbers are also questionable. We have that not-surprising revelation at the Apple versus Samsung trial in a Northern California Federal Court that the latter lied about tablet sales a couple of years back. Evidently they pulled an all-too-common stunt to flood the channel with product that, in the end, ended up being unsold.

    Now if Apple did that, you can bet the critics would pounce on them. But Apple keeps close tabs on the supply chain, and rarely has more than a few week’s supply. So what is shipped is mostly sold, and thus the figures are far closer to the truth.

    You also have to wonder where those other tablet sales are coming from. Yes, you can buy a no-name brand tablet for as little as $50 at a consumer electronics store. I suppose they even work after a fashion, but clearly usage isn’t registering. What this means is that the iPad still has a hefty majority of the tablets measured as active online.

    Don’t forget when Cook famously wondered what those other tablets were being used for, if not to go online. Or perhaps they do not work well enough to sustain a presence, and disgruntled customers either return them or, not wishing to run to the store in crowded traffic, and put up with the usual 15% “restock fee,” they are placed in a drawer somewhere catching dust.

    But make no mistake about it. I am not going to pretend to offer insightful comments about Apple’s quarterly financials for the March quarter. It wouldn’t make sense, particularly since I’m writing this article days before the actual announcement.

    One thing is probably certain, and that is this: Even if Apple releases sales figures that are mostly more favorable than the financial community expected, that won’t stop the complaints. Where are the new products in new categories they will ask? But that question may have some positive answers at the WWDC in June. And the speculation continues.


    Has it been that long? On October 22, 2013, Apple released OS X Mavericks. Not since the early 1990s has Apple actually distributed a full OS release for Macs free of charge.

    Being free, uptake was pretty swift. It did help that OS 10.9 essentially runs on the same hardware as OS 10.8 Mountain Lion. That, however, may very well change when the successor to Mavericks, presumably 10.10, is announced, which should happen on June 2 during the WWDC keynote.

    As to Mavericks, despite the claims by some that it just wasn’t as successful as it should have been, adoption was measured at 49.5% as of March, according to Net Applications, which analyzes such metrics. Allowing for normal sampling errors, that’s a great figure.

    As to the rest: Well, roughly 20% will continue to run OS 10.6 Snow Leopard regardless, because they own hardware that can’t run OS 10.9, or are saddled with PowerPC software that requires Rosetta to run on an Intel-based Mac. Rosetta was discontinued as of OS 10.7 Lion.

    So it’s highly likely this number, while it may erode over time as users give up on those old apps, will remain reasonably steady. It’s not the same as the some 30% of Windows users who insisted on running Windows XP despite the constant urgings from Microsoft to get with the program and move to Windows 8.

    But Windows 8 is a known problem for Microsoft. It’s nowhere near the same as Mavericks, which has done pretty well, although some may still have problems with a few apps here and there.

    One particular Mavericks bugaboo has been Mail. Although feature changes were few, new bugs were notable, particularly those that impacted users of Gmail. While Apple’s maintenance updates, and we’re now at 10.9.2 with a rumored 10.9.3 forthcoming in the near future, have fixed many of the Mail problems, I’ve still heard from some people who are upset that it still doesn’t quite work as it should.

    No doubt Apple will address the remainder of the critical issues before long, so perhaps it’s time to consider what the presumed 10.10 might bring. Supposedly it’s being developed under the code-name Syrah, which represents a dark grape used in wine-making. But that will not be the final name, since Apple is applying prominent California place names nowadays, and I expect you won’t know what that name is until the June 2 WWDC keynote.

    Regardless, chief among the expected features set is a flat look, reminiscent of iOS 7. But before you get upset about the alleged iOSification of OS X, we’re just talking about visible interface elements, not the actual functionality, which can obviously remain the same however the icons and windows appear.

    Now simplifying the interface is nothing new for OS X. Some loyal Mac users criticized the original look of OS X, known as Aqua, when it first arrived. Steve Jobs famously called it “lickable,” but some felt they’d rather spit it out.

    No matter. Over time, the look of OS X has grown simpler, smoother. The best way to do the comparison is to examine the original 10.0 release, perhaps in old Mac book or magazine you might have handy (or a still-functioning older Mac), compared to Mavericks.

    All right, there have been criticisms about porting iOS apps, such as iBooks and Maps, but that doesn’t mean the OS works any different. All right, the look of the scroll bars were changed, and the “natural scrolling” scheme echoed the direction used in iOS, which was the reverse of the traditional Mac approach. However, the scrolling direction can be changed in the Mouse preference pane, so it shouldn’t have been such a big deal, though it was.

    Aside from an expected flatter interface, OS 10.10 will, like its predecessor, be free. That approach appears to be set in stone, and it does appear that annual updates are in the cards for the foreseeable future. This means that OS 10.10 will likely appear in late October, give or take a few weeks.

    But the time of its formal introduction is just weeks away. How time flies when you’re having fun.


    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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