Liberty

http://www.macworld.com/article/2984416/apple-phone/3d-touch-is-a-hard-problem-that-apple-got-just-right.html Great piece about the importance of integrating software and hardware, and how hard that is.

What's the goal? If it is to improve human civilization, then I'm pretty sure that even most silicon valley types working in social-media app companies would agree that their talents would be better used working on other things. Same with all the physicists and mathematicians working for HFT and writing derivatives on Wall Street; in aggregate all their work is probably a net loss for society, and their talents would be more useful elsewhere... But if the primary goal t is to make money, then they may be right, it's probably easier to make money that way. But those are different things, and it's not about being smarter or not; it's about looking at what direction they are driving in and where that leads. (and yes, social-media is changing the world for the better in many way -- all I'm saying is that other fields that could also make a big difference are under-developed in comparison because they are harder problems, which is what makes Elon Musk special, he does the hard stuff). Second in a row post by Liberty that I agree with. Did I get transported to a parallel universe while sleeping? :) Probably should buy a lottery ticket today. If I jackpot, we split. 8) I've always written stuff like this, welcome to the past six thousand posts ;)

https://www.canadianinsider.com

More for entertainment than anything, but here's Tim Cook being interviewed by Stephen Colbert: https://www.youtube.com/watch?v=zuY0hXkqTWA

With iOS 9 about to come out, here's a few good reviews for those who are interested: http://arstechnica.com/apple/2015/09/ios-9-thoroughly-reviewed/ https://www.macstories.net/stories/ios-9-review/ http://www.imore.com/ios-9-review Interestingly, iOS 8 now has 87% adoption among the iOS ecosystem (and this is considered a slow release for Apple because of some unfortunate bug and space issues at launch), a year after release. On the Android side, Jelly Bean, which first came out in the summer of 2012, still has almost 1/3 of the installed base: https://developer.android.com/about/dashboards/index.html

There are two books with almost the same title that I almost always confuse, so apologies if this is the wrong one, but I think Billion Dollar Lessons is worth a read: http://www.amazon.ca/Billion-Dollar-Lessons-Inexcusable-Business/dp/1591842891/ I don't remember it too vividly because I read it a while ago, but I gave it a good grade on my list of books I read, so I must've liked it at the time :)

What's the goal? If it is to improve human civilization, then I'm pretty sure that even most silicon valley types working in social-media app companies would agree that their talents would be better used working on other things. Same with all the physicists and mathematicians working for HFT and writing derivatives on Wall Street; in aggregate all their work is probably a net loss for society, and their talents would be more useful elsewhere... But if the primary goal t is to make money, then they may be right, it's probably easier to make money that way. But those are different things, and it's not about being smarter or not; it's about looking at what direction they are driving in and where that leads. (and yes, social-media is changing the world for the better in many way -- all I'm saying is that other fields that could also make a big difference are under-developed in comparison because they are harder problems, which is what makes Elon Musk special, he does the hard stuff).

Out of curiosity, what is your source for saying she has Aspergers? I don't remember seeing that anywhere.

What's misleading is that a subsidy is generally not something that is paid back. If the government gives a subsidy to the oil industry, that's different from a loan. What carriers are doing is offering financing, which people pay back over the life of the contract. And many people get screwed because if you keep the phone longer than your contract, your monthly fee doesn't usually go down so you keep paying for something that you've already paid for. Whoever started calling it a subsidy was probably trying to fool people into thinking they were getting something for free, which definitely wasn't the case.

Sounds like you're having one of those years. I've had them, and it sucks. What you have to wonder is: Are you having bad luck despite a good investing process, or do you need to rethink your approach? Personally, I ended up rethinking my approach.

What's a better way of putting it? Jurgis is right. "Silicon Valley" is very broad and includes many things. But if you mean if the aggregate market capitalization of silicon valley companies in bubble territory, then your answer is no. The industry is also very different from 2000 when profits were hard to find; nowadays, silicon valley is bringing in tens and tens of billions of free cash flow every year and most of the big players are selling for relatively low multiples.

The word "subsidy" when applied to phones is misleading anyway. There was never a real subsidy, the price was just amortized over X months after an upfront cost. The new model often means that there's no upfront cost, and the phone is still paid in installements, so if anything, it might be a positive.

Mikes Fries and Jeff Bewkes in interview: http://youtu.be/SY1bkKfUwXs

Digging around Sweden, apparently: http://www.prnewswire.com/news-releases/netadmin-systems-acquired-by-volaris-group-527660901.html

http://www.bloomberg.com/news/articles/2015-09-15/malone-says-still-seeking-common-ground-for-liberty-vodafone-m-a

Interesting read: http://www.asymco.com/2015/09/14/apple-assurance/

I just had a look at TTM. Yes.

I disagree -- I think Apple really does care where you buy your phone. I think they want you to buy your phone at the Apple store with their knowledgable staff and well-designed layout, instead of at a Verizon store where they might try to sell you a Samsung. I think they care about the customer experience of buying a phone, and they can only control that at their store, and I think they care about squeezing out the carrier as your primary point of contact for competitive reasons. I agree with that. My choice of words was poor. I meant more: as long as you buy an iPhone, anywhere, they're happy. But defenitely happier in an Apple store...

Doesn't Apple's deal also come with Applecare+ (beefed up warranty)? That's worth something, though T-Mobile's deal might still be cheaper (though with more strings attached). Either way, I don't think Apple cares too much where you buy your iPhone. I think there's probably a segment of top customers who would have upgraded yearly but were discouraged by the hassle of dealing with carriers and breaking contracts and such, and now they might do it because their phone is their most useful possession and a few hundred dollars a year isn't material to them. Apple will also make a bit of money on the embedded interest in the monthly price. I think this is all positive.

+1. Right there. It is Apple's value generator. This is the asset not on the balance sheet and so intangible that the market and Wall St can't comprehend. Apple's value, moat and optionality are all rooted in its culture. (Or some people think in terms of "priority".) Operating a toll booth requires no specific culture. Operating Apple does. Screwing it up Apple will go through a slow death. I reckon there is no better material to understand this than Catmull's "Creativity Inc". When your business depends on seizing the infrequent positive black swans, you need the right culture, be it Pixar or Apple. One thing that I watch closely is whether the recent wave of new external hires in the mgmt team will dilute or destroy its culture. Yep. I'm reminded of an anecdote about Pixar. Someone asked Brad Bird (I think), one of their directors, on Twitter something like: "Where are Pixar's bad movies?" and he replied "We don't release them." Pixar's not perfect, but they certainly had a better streak than almost anyone for a while, and even now that they've had a few lesser movies (mostly after being acquired by Disney, which might have had an impact -- though on the flipside they've also turned around Disney's own animation studio and helped them produce mega-hits there), they still have an incredible batting average. That's not because they only have good ideas, it's because they're ready to work on ideas longer, and kill their own ideas when they are not up to the high standards that they hold themselves to, and their culture rewards good stories and quality movies above all else. I'm sure there's stuff that they were very advanced on when they killed it, and they could have released it and still made hundreds of millions, cashing in on their name to get people in the theathers, but that's not the way to play the long-game and attract and retain the very best talent that cares about the final product as much as about the money. Catmull was a huge influence on Steve Jobs (and vice versa), and it shows when you study both companies.

If malware keeps getting worse on Android, that could provide some more tailwind for Apple.. http://www.loopinsight.com/2015/09/10/android-wins/

Exactly. People who think Apple is a "hardware company" miss the point. A very large part of the differentiation of their products, which is what allows them to have these margins, comes from the software (and services to a much lesser extent). It's just that they monetize that software by selling hardware. But that doesn't mean that people are only paying for the hardware and would pay as much/desire as much a Mac or iPhone if it ran Windows or Android.

Since there seems to be newcomers to this thread, I thought this was a good read to better understand the company: https://stratechery.com/2015/apples-new-market/ There's this idea that Apple is so integrated while it's competitors are so modulars, but that's not quite correct. Apple is very modular when it comes to commodity aspects, and very integrated when it comes to the differentiated aspects.

You're right. It's actually quite the contrary: the first firm spends a disproportionate amount of resources and effort in creating something which can then be copied and/or improved upon at a fraction of the cost in the absence of sustainable competitive advantages or effective differentiation. Business history is full of examples (cars, airlines, railways, etc.) What's that quote in Moneyball about the first guy over the wall always getting bloodied? There's some of that, but the point is more about the fact that the "first" of something is usually not ready for prime time. So you can brag about being first, but you usually won't make a great product out of it (ie. Microsoft has been working on tablets for a very long time, but they sucked for years and years). Companies like Apple are very product-focused and they wait until things are good enough. There's probably tons of stuff that has been in the lab for years that they just never show because it's not good enough yet (you better believe that they had mockups of phones of all sizes in 0.1 inch increments for years before they actually made bigger screens). But on top of it not being a race and the prize not going to the first over the line, there's also the fact that there's often more effort that goes into making something really good than actually went into coming up with the idea in the first place. iPhone might not have been the first smartphone, but it certainly doesn't mean that Apple just came in and copied the smartphones that preceded it and it was easy. They spent years on it and had to make thousands of decisions about every little detail to get it as right as they got it. People always say that the mouse and graphical windows interface was copied from Xerox PARC by Apple and then Microsoft, but if you find info about that original mouse and interface, it wasn't what actually came out in the Macintosh, it was extremely rough and certainly a much, much worse experience. A lot of work went into making it ready for prime time. I find the idea of being obsessed with who came with it first kind of adolescent. It's like when I was 13 and I was obsessed by how fast guitarists could play solos rather than focusing on what they were playing. It's availability bias, I suppose; focusing on what is easy to measure and clear cut rather than on what actually matters, even if it's harder to figure out and more nuanced.

Some on point criticism of apple's app model, which I hope they improve over time: https://stratechery.com/2015/from-products-to-platforms/