• Newsletter Issue #870

    August 1st, 2016


    The tale of the Apple Car has taken on yet another, and perhaps more plausible turn this past week. While I have suggested from time to time that Project Titan might be more about automotive technology than building a motor vehicle from scratch, most of the published speculation has still focused on the car.

    I was willing to accept that speculation as credible, particularly following the report that former Apple hardware executive Bob Mansfield, engaged in doing special projects for Tim Cook, had been put in charge. True, he doesn’t have experience with an automobile manufacturer in his resume, but if he can whip a development project into shape, it may not matter. I suppose he could always be replaced by a seasoned car executive once an Apple Car appears.

    Then came the report that software developer Dan Dodge, the former CEO of BlackBerry’s QNX, a mobile operating system, had joined Project Titan, working under Mansfield. Dodge’s is also the co-creator of the QNX CAR Platform for Infotainment, which is no doubt what attracted interest by Apple. While he couldn’t use any QNX technologies in building a new interface for Apple, he could certainly leverage his expertise to perhaps expand the capabilities of CarPlay, which is based on iOS.

    So it may very well be that Apple is doing what Google is doing, which is to create a full-blown autonomous driving system that could be licensed to automobile manufacturers, same as they license CarPlay. The advantage would be that Apple wouldn’t have to go through the drudgery of building their own motor vehicle. Not that Apple couldn’t or wouldn’t do it, but the overriding question has always been what they could contribute to a business that usually records far lower margins than is the normal for the company. What’s more, many car makers are already expanding their forays into electric vehicles. If Tesla Motors overcomes its teething pains and becomes as successful as it hopes to be, where would there even be room for an Apple Car ?

    This doesn’t mean it’s not going to turn out that way. But I felt at the beginning, as expressed in these columns and on my tech radio show, that it was more about the services than the hardware. This would be in keeping with expanding one of the fastest growing divisions of the company.

    In any case, on this weekend’s episode of  The Tech Night Owl LIVE, we featured Jeff Gamet, Managing Editor for The Mac Observer. The discussion began with a pop culture session, covering the latest super hero shows, the selection of a new actor to play Superman on TV, and the curious differences between DC Comics TV shows and movies, which exist in what appear to be separate universes. Moving on to the tech world, Gene and Jeff talked about the recent appointment of Bob Mansfield to lead Apple’s Project Titan, which reportedly is focusing on autonomous driving and a potential Apple Car. There was also a discussion of Apple’s financials and the possibility that the company is slowly starting to rise again from the doldrums.

    I should mention, in passing, that it seems that I mispronounced the name of the new Superman actor, Tyler Hoechlin, who first became famous for his role on the ‘Teen Wolf” TV series. Published photos of Hoechlin in action in his Superman costume, and as mild-mannered reporter Clark Kent, do demonstrate that, from looks alone, he was the perfect choice for the part.

    You’ll also heard from ethical hacker Dr. Timothy Summers, President of Summers & Company, a cyber strategy and organizational design consulting firm, who focused the main part of his discussion on the recent hacks of Democratic National Committee (DNC) emails, and how hackers might conspire to influence the U.S. election for President. Is there an object lesson here, that anything in an email is potentially vulnerable to hacking? And what about the security of voting machines? Can hackers manipulate the results? Dr. Summers also discussed the Summer 2016 Olympics in Rio De Janeiro. Does the arrival of hundreds of thousands of people create the climate for hackers to steal money from tourists by taking over ATM machines and performing other criminal acts? How do you protect yourself from theft while traveling abroad?

    On this week’s episode of our other radio show, The Paracast: Gene and Chris are visited by Marc Dantonio, the chief photo and video analyst for the Mutual UFO Network (MUFON). In this episode, Marc wears his astronomer hat as he talks at length about the ongoing discovery of exoplanets, which orbit other star systems. As we continue to uncover evidence that some of these planets may be Earth-like, does that increase the possibility that life exists there? Would it be life as we know it? Can such discoveries lead us to finding proof that intelligent races are visiting Earth? Marc also explores the potential that humans may some day perfect some sort of warp drive, for faster-than-light travel across space. And what about across dimensions, through wormholes? Does that lead us to the potential f9r a stargate? You’ll also hear Marc describe his own paranormal encounters, and his views on UFO photos and videos.


    When you look over Apple’s history, and its brushes with disaster in the mid-1990s, maybe you can understand the reason for skepticism about the company’s ongoing success. But after nearly 20 years, one would think that such fears, or hopes, would fade away. No company that rises to the heights of Apple, and remains there for so long, could have gotten there by a fluke.

    Despite the fact that sales have dropped for the past two quarters, Apple has sold more than one billion iPhones. How is that a fluke? Besides, iPhones are hugely profitable. No other mobile handset maker comes close, not even Samsung. Sure, Samsung sells more units than Apple overall, but not of the high-end smartphones. Even at reduced numbers, tens of millions of iPhones find their way into the hands of customers every quarter.

    Also consider the iPad, where Apple has moved tens of millions since it debuted in 2010. True, sales hit the skids for a while, and they were lower this past quarter as well. But the sales mix has begun to favor the more expensive iPad Pro. The result is that total revenue actually increased. With iOS 10, Apple has removed compatibility from a number of older models, which may fuel spur upgrades this fall.

    All right, the Mac has hit sales headwinds as well. With an 11 percent sales decrease for the June quarter, the Mac has actually fallen behind the rest of the PC industry for once. That doesn’t mean it’s a trend, though hardware makers are having a whale of a time to convince customers to buy new PCs. The arrival of Microsoft Windows 10 surely didn’t help, since upgrades were free for the first year. If it wasn’t free, there’s little doubt that its market share would be far less.

    Indeed, it appeared that Microsoft had to trick many people to upgrade. There have been complaints about unwanted background downloads and, in some cases, Windows 10 installers launching without anyone’s permission. One way to accomplish this skullduggery was to quietly change a Windows interface convention, where dismissing a dialog about the upgrade had the effect of accepting it rather than, as one usually expects, dismissing it.

    In recent days, Apple’s stock price has actually increased, largely because the expected sales drop was already factored into the current stock price. When the company did better than expected in the June quarter, things changed. Indeed, Apple’s guidance for the current quarter, though lower than the year-ago quarter, is also better than originally predicted by so-called Wall Street analysts.

    One reason is no doubt the unexpected success of the iPhone SE. Apple should have released it earlier, since there was clearly a decent-sized market for a smaller iPhone. But rather than be saddled with a two-year-old model, Apple smartly put most of the guts of the iPhone 6s into the smaller iPhone 5s case. True, the cheaper, smaller iPhone may cannibalize sales of the larger handsets, or maybe not so much. It’s possible some people have remained on the sidelines because the larger models were just too large for their needs.

    Of course, the critics will continue to fret and moan over the success of the iPhone SE, claiming it’s hurting Apple somehow. They complained about the iPhone 5c too, even though it evidently did far better than you might have expected given all the doom and gloom.

    The other day, one of the Apple fact-checkers wrote about someone who came up with the lame idea that Apple ought to be licensing iOS to other companies. I won’t even bother to consider the illogic behind such a request. It’s not that Apple actually sells iOS to customers. Even if Apple seriously considered such a foolish move, the job of making the OS compatible with hundreds or thousands of models, rather than just a few, would be nightmarish.

    Besides, why would Apple abandon tens of billions of dollars of revenue anyway? The very idea is just as dumb as the one that the macOS ought to be licensed. Although this ought to be obvious by now, Apple is not in the same business as Google or Microsoft. Google’s efforts to sell hardware have failed. Microsoft’s hardware results have been so-so. The Xbox gaming console does well enough after years and billions of dollars of tax deductible losses. The billions spent to acquire the fading Nokia handset division were wasted. Sales were poor, and thousands of Nokia’s former employees have been given pink slips. The Surface tablet continues to sell in low, but steady numbers, and is hardly a rousing success, but Microsoft’s software and services divisions seem to be doing well enough.

    Google has yet to figure out a way to expand much beyond its core ad sales business. Services are doing better and better for Apple, and the revenue could help compensate for lower sales in other divisions as markets saturate. The billions that Apple appears to be investing on Project Titan may also end up involving services and software. There may not be an Apple Car after all, but if whatever Apple does delivers a big return, it won’t matter.

    True, nothing is forever. But Apple is run by smart people who rightly ignore the critics and do their thing. That’s why they continue to succeed despite the haters.


    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
    Sales and Marketing: Andy Schopick
    Worldwide Licensing: Sharon Jarvis

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    2 Responses to “Newsletter Issue #870”

    1. C. Howitt Fielz says:

      For the time being, I think the lies constantly being spread about Apple is a good thing because it may have a tendency to scare off investors and keep the share price down while Apple is doing the buybacks. As an Apple shareholder, I will continue to remain loyal to the company and those share buybacks are a good thing for those who have patience. The less shares, the better, in the long run because it means I may see higher dividends and it will make it easier for Apple to afford to pay those dividends. So let the analysts and news media keep trying to scare potential investors into believing Apple is a dying company. Everything Apple does is seen as some failure with the critics always saying they could do a lot better. Maybe they’re right. Apple seems like its just coasting along and not being aggressive at all like other tech companies.

      All I know is Apple is still hiring employees (meaning no layoffs I know of) and they’re still opening and expanding stores. The business is still relatively strong even if growth has slowed. I’m not worried about Apple going out of business but I can easily understand why most investors are flocking towards Amazon, Alphabet and Microsoft because they can get faster returns from those companies. Tim Cook is a very boring CEO and he doesn’t inspire very much confidence compared to a CEO like Bezos or Musk. Apple requires pure revenue and profits to increase the share price and that’s how it’s always going to be. Apple will never have a fat P/E like most tech companies so I can’t expect much more than decent dividends. Amazon and Alphabet are making Apple look downright pathetic in terms of share gains because Apple isn’t growing its business like those companies are.

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