• Newsletter Issue #765

    July 28th, 2014


    Since Apple’s latest financial statements became, as usual, a major story at the financial sites and in the financial sections of daily newspapers, we focused a lot of attention on that subject on this week’s episode of The Tech Night Owl LIVE, where we talked about Apple’s June quarter financials. Some pundits say the numbers were “meh,” while others say they were pretty decent overall. Two supposedly respected industry outlets, however, have erroneously reported that Mac sales were down in the U.S., whereas Apple reported that they increased in the double-digits. So we tried to separate fact from fiction. We also discussed the Apple/IBM marketing deal, the OS X Yosemite Public Beta, which was released to up to one million Mac users on July 24, and some of the possibilities for new gear from Apple this fall.

    Our guests included Adam Engst, of TidBITS and Take Control Books, and Jeff Gamet, Managing Editor for The Mac Observer.

    I’ll get into the financials and their implications in the next column, so I’ll just concentrate instead on the continuing fallout about the Apple/IBM deal. To some, it was proof that Apple had lost its mojo and thus had to engage in stock manipulations, company acquisitions and new marketing deals to divert your attention from the real issue, which is alleged lack of new products and services.

    But these people also seem to forget that Apple is quite capable of walking and chewing gum at the same time. That Tim Cook can manage multiple facets of running a multinational corporation without missing a beat ought to be a good thing. But some pundits still predict that Apple is destined, any day/month/year now, to return to niche status, and thus they aren’t to be taken seriously ever again unless they listen to those pundits and do exactly as they say, no ifs, ands or buts. Or something like that.

    On this week’s episode of our other radio show, The Paracast: Gene and Chris present long-time paranormal researcher Stan Gordon. During this segment we’ll be bringing you up to date on the December 9, 1965 Kecksburg, PA UFO crash. Was it possibly a test aircraft, and what about the weird hieroglyphic-style lettering on the alleged craft?  Are there any new developments that will help advance research into this classic UFO case? You’ll also hear about this year’s Kecksburg UFO Festival, along with the extensive range of Bigfoot, UFO and other strange events that have occurred in Pennsylvania over the years.

    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.


    After Apple allegedly missed estimates that ten million copies of the iPhone 5 would be sold over the first weekend it went on sale in 2012 — they only managed five million, which was a record for the industry — Apple’s stock price began to take a battering. Every perceived miss from inflated expectations brought new rounds of criticism that something was amiss in Cupertino, CA.

    A lot of the criticism centered on Tim Cook and his alleged inability to focus on developing fabulous new products. Forgetting the trendsetting Mac Pro, first announced at the 2013 WWDC, everything Apple did was iterative. Although it normally took at least several years for Apple to have a breakthrough product, suddenly it had to happen every week.

    If Cook failed to deliver on these insane expectations, that was his fault pure and simple and he must pay for this alleged evidence of abject incompetence. A 64-bit ARM-based processor? Smoke and mirrors because it didn’t offer any advantage with low-resource mobile apps, despite evidence to the contrary. Touch ID? Well, Apple’s fingerprint sensor wasn’t exactly perfect, so it should have been tested and fixed before release. And don’t get me started with Apple’s Maps.

    It didn’t matter that other attempts at putting a fingerprint sensor on a smartphone were far worse. The most blatant example was the Samsung Galaxy S5, where prominent reviewers complained that it barely worked and was far too finicky to use.

    Indeed, Samsung was the media darling, along with Google and Amazon. It didn’t matter that Amazon rarely shows more than a slight profit each quarter, or that the actual sales of the Kindle are at best rough estimates from industry analysts. Amazon has only reported tens of millions of sales, but over how long a period?

    So Amazon was magic, Google was magic, Samsung would overwhelm Apple.

    That, as they say, was that.

    A funny thing happened on a way to the reality check. Samsung began to report lackluster sales of premium smartphones, and lower profit warnings. They were being squeezed at the high-end by that “beleaguered” tech company in Cupertino, and at the low-end by some Chinese mobile handset makers who undercut Samsung on price. Revenue and profits were thus going to decline.

    Google? Well the largest portion of their revenue comes from targeted ads. But the “bid prices” for those targeted ads have declined in recent quarters, which means Google has to have more of them, or derive extra income from other business. Since the Android mobile OS is being given away, they have to also depend on their share of Google Play revenue, sales of the Chromecast media streamer, Nest smart thermostats and Google Glass. Yes, the cloud and docs business is growing, but Microsoft’s finally got the competitive spirit in the cloud and has greatly expanded their offerings along with higher drive capacities at lower prices.

    Microsoft? Unfortunately, some 18,000 Microsoft employees, including thousands who joined the company as the result of the acquisition of Nokia’s handset division, are wondering where they will find their next paychecks after being axed.

    And now comes the word that Amazon had higher-than-expected losses in the last quarter, and they’d be worse this quarter. Part of that is blamed on the costly launch of the Fire Phone, which has received at best tepid reviews from key tech commentators. Aside from a few gee-whiz features that few care about, the Fire Phone, which is being sold for essentially the same price as the direct competition from Apple and Samsung, is only available to AT&T subscribers.

    Yes, Apple got away with a similar scheme when the first iPhone was released. But that was because AT&T was the only carrier to allow Apple to have full control over the software and services on their new gadget. Once the iPhone became a runaway success, other carriers were only too happy to get in line to make the very same deal.

    Amazon? Well, if the Fire Phone doesn’t take off big time, it’ll be heavily discounted and will soon disappear. Meantime, the company will continue to make the excuse that cash is being put back into the company to fuel growth. But that’s the same excuse investors in Amazon have heard for years, with no indication that things will ever change, except for brief spurts of small profits.

    It’s not that Amazon is destined to go out of business soon, or suffer from serious sales reverses. Indeed, for most customers — myself included — Amazon is a great way to buy all sorts of stuff at favorable prices, and get mostly great service. They have revolutionized online retailing, and even killed many brick and mortar book and music sellers. This unfortunate side-effect mirrors what Walmart did to local retailers as they spread across the world.

    But if the dream of profits at Amazon is all smoke and mirrors, you can see why Wall Street is getting antsy. The latest financials triggered a nearly 10% drop in the stock price last Friday. If that happened to Apple, you can bet the critics would be out in full force claiming the company was about to buy the farm. Amazon? Well, I suppose they’ll be given a little slack once the stock price declines to a more reasonable level.

    Apple’s financials, meantime, were mostly positive. Sure they didn’t sell as many iPads as many expected, although Apple claims they met internal expectations, but sales of the iPhone and even Macs grew at pretty decent rates. After an initial dip in after-hours trading once the financials were released, Apple’s stock price has mostly been on the upside.

    You see, there’s a lot of optimism about Apple’s expected products and services this fall. The public beta of OS X Yosemite has gotten mostly great reviews, and everything looks positive. Sure, Apple could blow it all with buggy Yosemite and iOS 8 releases, a poorly received iPhone upgrade, and the failure to deliver on the promise of new products in new categories this fall.

    But if Apple executes on all cylinders over the next few months, maybe some of the media and financial critics will shut up and focus their venom on other more worthy victims, at least for a while.


    As of the time I’m writing this article, Apple has not as yet hit the one million user limit for the Yosemite Public Beta. So if you’re still interested in being at the cutting edge, there’s still time.

    But don’t take it casually. A beta OS can cause crashes, damage data and even affect the hard drive file system. It’s all quite unpredictable, although I can’t say I’ve seen examples of the latter two. Still, observe the cautions, the first of which is to have a full backup in case things go wrong and you want to return to Mavericks.

    Yes, I’m sure Apple has been very cautious in delivering a reasonably reliable beta to the public, but don’t take any chances and don’t say I didn’t warn you.

    Meantime, the initial demand brought down Apple’s servers, or simply caused problems for Mac users redeeming their Mac App Store codes to download a copy. Apple’s answer to the latter was just to reload the page, with a Command-R, same as with Safari. That seems to work, and if you had problems downloading the Yosemite beta the first day, and you’re determined to give it a try, it should work properly by now.

    Now despite reports that the first public beta was the same build as DP 4, released last Monday to registered Mac developers, it happens to be one build later. Having installed both, I do notice that the Messages Buddy List works on my 2010 17-inch MacBook Pro, running the public beta, but not on the external drive of my late 2009 27-inch iMac, which has the developer release. I wouldn’t presume to guess at this point whether that’s due to the hardware difference or something fixed in the beta build.

    Apple also states that updates for developers and public beta testers will not come at the same time, although both will get the final release via a software update. I don’t know if this includes the so-called Golden Master build that goes out to developers two or three weeks before the final version is posted. Certainly it would make sense to give Mac users one last crack at a prerelease build to see if there are last minute bugs that must be fixed.

    Without going into any detail, I am not at the point of saying that I’ll be relying on the prerelease on my production Mac. I still switch back and forth, and I’m still testing. If the process goes as smoothly as Mavericks, I’ll probably make that move four to six weeks ahead of the actual release. But we’ll see where that takes us; it’s really not a critical issue, so long as the final release is stable and all of the mission-critical apps I use are compatible.

    Now we won’t know the final verdict on Yosemite till the final release. It’s telling that Apple seeded key members of the media with a developer build with an embargo until the day ahead of the release of the public beta. Evidently there’s plenty of confidence this will be a top-notch release. At the very least, there are far more changes than has been the case with previous OS X upgrades, although nothing is so jarring that the Mac user experience is hurt.

    Sure, even if you don’t dig the flatter icons and buttons, or the various translucency schemes, there’s little there that will confuse even the casual Mac user. With Mac sales growing way ahead of the PC industry overall, it makes sense for Apple to continue to invest plenty of money to build the platform.

    Indeed, if you want to see how well Apple is doing, just compare the response to the Windows 8 public beta and the Yosemite public beta. They are worlds apart. The difference is that Microsoft wasn’t listening, and continued to develop Windows 8 in the tradition of the first beta. Only later did they begin to backtrack on the features, such as the lack of a traditional Start menu, which users expect.

    I think back to that long-time client of mine, who uttered “Yuk!” upon seeing the original Yosemite demonstration. She hasn’t repeated that statement since I told her that the traditional Mac user experience will be mostly unchanged. Once Yosemite is released — and assuming it’s quite stable — I’ll make a direct suggestion that she reconsider, though I still urge early adopters to be cautious.


    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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    3 Responses to “Newsletter Issue #765”

    1. Arnold Ziffel says:


      I agree – the original iteration of Touch ID was not perfect, but it was still damned good! It worked for me 95% of the time on first attempt. Running the latest version of iOS 7, I’d say Touch ID works a minimum 99% of the time on the first attempt. It’s so good, it’s invisible.

      Regarding Maps, again, there were problems at first, but they were overly hyped by the anti-Apple, rumor-mongering, so-called journalists. I use Maps more and more frequently and find it to be accurate and useful.

      As for gaining traction on Wall Street, yes, AAPL has been moving upward in price, but it’s all controlled by the thieves and liars like Goldman Sachs, who’ve been engineering economic collapses since the late ’20s.

    2. Aardman says:

      I am almost giddy with anticipation over what Apple will introduce alongside the iPhone 6. You can almost see what it will be if you put together the different parts that have been revealed so far: Carplay, Homekit, the IBM partnership, sapphire, the key hires from the watch, health, and fitness industries, iBeacons, Continuity and Hand Off. It all points to massive and comprehensive expansion of the iOS/OSX ecosystem. Apple will roll out the major components of an ecosystem that lets us run and manage the major facets of our lives using our iPhones. Prepare to be blown away by the sheer comprehensiveness of Apple’s September introductions.

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