AAPL - Apple Inc.

[supertutti]

What I found interesting about the whole thing is Apple's own hardware leasing upgrade program. By throwing in Apple Care, they are undercutting the carriers who would require their own insurance, or a purchase of Apple Care.

 

This seems like a brilliant move, as now there is no reason to lease from Verizon or ATT etc, and you are purchasing directly from the manufacturer.

 

Any idea what impact this could have on margins and the bottom line?

[johnny]

I don't know what the hardware business was worth, but the few numbers that i've seen (you can look back in this thread), and guesstimating at growth rates and margins, it was probably worth a fair chunk of change by itself. $200 headphones that probably cost less than $40 to manufacture have pretty good margins... Not a bad idea to own one of the most popular and profitable accessories/brands complementary to your main product (and also popular with Android users).

 

I think the margin guesstimation that most have implied on Beats is flawed. The BOM v. Retail Beats bashing is great for a laugh, but there are tons of companies that sell highly marked-up, low BOM goods that still don't generate amazing net margins (Coach, Adidas). My thinking on Beats really changed when I made a real effort to understand how they "succeeded". It was by absolutely saturating all the relevant (and irrelevant) media channels and then getting quick retail ubiquity. Unlike Apple, which is able to get both of these things done for free, Beats had to pay. I suspect the retail markups allowed to Best Buy, etc. were incredibly generous (compared to Apple's miserly allocation) and athletes, rappers, and pop-stars may as individuals be naive enough to do free product placement, but most of them have managers that will quickly make sure the deals represent economic reality.

 

That is a lot of assumption on my part, but I think it is somewhat bolstered by their financing activities in 2013. They spent the better part of the year trying (and failing) to make a debt deal work; then they ended up selling half of the company to Carlyle at a $1B valuation. This was in the midst of their incredible revenue growth, and their projected revenue for the year was well in excess of that number. So we have to wonder why that was the best they could do...

 

If you want to really suffer, start watching all of the most-viewed music videos of ~2013. Over half will have gratuitous, shallow depth-of-field lingering product placement shots of Beats gear. It is insane.

 

Finally, if you just read Apple's moves and messaging during and since the deal, it seems fairly clear that the headphones are the last business priority and, as objects, aren't held in very high esteem. Recall Tim Cook's internal memo announcing the deal. He went on for many paragraphs talking about how important Music and streaming was, and praising Iovine and Dre. And then in the last paragraph he mentioned the headphone, expressing no personal opinion about the headphones, but just providing objective descriptors and then closing out by suggesting that maybe Apple would get around to making them good.

 

Beats Electronics has become the brand of choice for headphones and speakers in both the music and sports world, just five years after its launch. They are among the most popular and highest-rated third-party products sold today in Apple’s retail and online stores. We see an incredible opportunity to bring Apple’s legendary design and engineering capabilities to these popular products under Phil’s leadership.

 

Funny thing about this post, I was 99% sure there were leaked Beats financials from 2012 that I *remembered* reading. I have spent 30 minutes searching for them and I'm now faced with the very discomforting probability that I totally fabricated that memory from nothing. So take my analysis for as much as it is worth coming from somebody with mild dementia.

 

 

Anyway, considering the only big product moves with Beats since the acquisition was digested have been 1. a product recall and 2. throwing a free pair in with laptop purchases for Back to School, I'm pretty comfortable inferring that Apple really cared mostly about putting the Music offering together, and saw the Beats legacy business as not especially attractive.

 

I expect eventually some new AppleBeats headphones will be released, but I find it hard to believe that the addition of the Beats mark will dramatically improve the financial performance of the product over what it would have been if it were simply Apple branded.

[johnny]

What I found interesting about the whole thing is Apple's own hardware leasing upgrade program. By throwing in Apple Care, they are undercutting the carriers who would require their own insurance, or a purchase of Apple Care.

 

This seems like a brilliant move, as now there is no reason to lease from Verizon or ATT etc, and you are purchasing directly from the manufacturer.

 

Any idea what impact this could have on margins and the bottom line?

 

I do not like the idea of Apple getting involved in the unpleasant side of the business (financing, contracts, collections, penalties, lawsuits). The carriers serve a very important function when they finance Apple's products: they get to be the bad guys who "gouge" customers, levy "unfair" fees, tie people down to onerous contracts, etc. That is the right sort of intermediary to have.

 

I also think this undoes what may have been an accidentally brilliant selection device for Applecare+. Since the sort of people that need installment plans to afford new phones had to go to carriers, they tended to buy insurance from the carriers. I assume that these people were relatively bad risks, so keeping them out of the Applecare+ risk pool may have been part of what made Applecare+ such a great program for those of us who buy phones up-front at the Apple store.

 

Maybe this ultimately doesn't matter, and they have such a well oiled refurbishment and replacement apparatus that the deductibles end up covering almost all of the expense. But I don't like anything about this move. Maybe this too is about positioning an offering to make sure that carriers don't start slacking on their own financing programs?

[portfolio14]

-I still don't understand how the iPhone can still start at only 16GB though.

"Decoys, in marketing, are products, services, or price points that a business doesn't really want you to take, but rather use as a reference to make another product look better. Economist Dan Ariely, author of Predictably Irrational, gives the classic example of a Realtor who shows you a home that needs a new roof, right before taking you to a higher-priced house she really wants to sell. It's hard to tell if a $400,000 colonial is a good deal—but compared with a $380,000 home that needs work, it looks damn good."

 

http://www.bloomberg.com/bw/technology/content/sep2010/tc2010091_060916.htm

 

 

[Liberty]

So is the long-press functionality an iOS9 feature or is it only available on the 6S?

 

There's already long-presses all over iOS. This depends on force applied, not on length, so it's different and requires the new hardware (pressure-sensitive screen + haptic feedback module to let you know when you're activating these different kinds of 'deeper' touches).

[Liberty]

I don't know what the hardware business was worth, but the few numbers that i've seen (you can look back in this thread), and guesstimating at growth rates and margins, it was probably worth a fair chunk of change by itself. $200 headphones that probably cost less than $40 to manufacture have pretty good margins... Not a bad idea to own one of the most popular and profitable accessories/brands complementary to your main product (and also popular with Android users).

 

I think the margin guesstimation that most have implied on Beats is flawed. The BOM v. Retail Beats bashing is great for a laugh, but there are tons of companies that sell highly marked-up, low BOM goods that still don't generate amazing net margins (Coach, Adidas). My thinking on Beats really changed when I made a real effort to understand how they "succeeded". It was by absolutely saturating all the relevant (and irrelevant) media channels and then getting quick retail ubiquity. Unlike Apple, which is able to get both of these things done for free, Beats had to pay. I suspect the retail markups allowed to Best Buy, etc. were incredibly generous (compared to Apple's miserly allocation) and athletes, rappers, and pop-stars may as individuals be naive enough to do free product placement, but most of them have managers that will quickly make sure the deals represent economic reality.

 

That is a lot of assumption on my part, but I think it is somewhat bolstered by their financing activities in 2013. They spent the better part of the year trying (and failing) to make a debt deal work; then they ended up selling half of the company to Carlyle at a $1B valuation. This was in the midst of their incredible revenue growth, and their projected revenue for the year was well in excess of that number. So we have to wonder why that was the best they could do...

 

If you want to really suffer, start watching all of the most-viewed music videos of ~2013. Over half will have gratuitous, shallow depth-of-field lingering product placement shots of Beats gear. It is insane.

 

Finally, if you just read Apple's moves and messaging during and since the deal, it seems fairly clear that the headphones are the last business priority and, as objects, aren't held in very high esteem. Recall Tim Cook's internal memo announcing the deal. He went on for many paragraphs talking about how important Music and streaming was, and praising Iovine and Dre. And then in the last paragraph he mentioned the headphone, expressing no personal opinion about the headphones, but just providing objective descriptors and then closing out by suggesting that maybe Apple would get around to making them good.

 

Beats Electronics has become the brand of choice for headphones and speakers in both the music and sports world, just five years after its launch. They are among the most popular and highest-rated third-party products sold today in Apple’s retail and online stores. We see an incredible opportunity to bring Apple’s legendary design and engineering capabilities to these popular products under Phil’s leadership.

 

Funny thing about this post, I was 99% sure there were leaked Beats financials from 2012 that I *remembered* reading. I have spent 30 minutes searching for them and I'm now faced with the very discomforting probability that I totally fabricated that memory from nothing. So take my analysis for as much as it is worth coming from somebody with mild dementia.

 

 

Anyway, considering the only big product moves with Beats since the acquisition was digested have been 1. a product recall and 2. throwing a free pair in with laptop purchases for Back to School, I'm pretty comfortable inferring that Apple really cared mostly about putting the Music offering together, and saw the Beats legacy business as not especially attractive.

 

I expect eventually some new AppleBeats headphones will be released, but I find it hard to believe that the addition of the Beats mark will dramatically improve the financial performance of the product over what it would have been if it were simply Apple branded.

 

You bring up good points, and may very well be right about this.

 

By the way, one very popular teardown of Beats headphones that everybody was passing around not too long ago turned out to be of knock off headphones and not of actual Beats..

 

I still think the headphone business can be of significant value. The fact that Beats itself wasn't able (if that's the case) to get it to be very profitable doesn't necessarily mean that it can't be; when in startup mode, you often sacrifice profitability for growth. Apple can either keep those dials that way (re-invest massively in promotion) or dial that back down and start increasing the margins. Just having the free placement in Apple stores and the association with Apple probably helps reduce that marketing spend.

 

Regular people didn't use to pay a lot for headphones and see them as status symbol. Beats was creating/filling a new niche, and they were smart to be very aggressive with growth during the land-grab phase, IMO.

 

I think you're right that Apple was most interested in leveraging the music streaming side of the business, though. But it's not because they are most interested on that side of the business for product reasons that on the financial side they felt the headphone business wasn't worth a large portion of the price. I wouldn't be surprised if they were working on the next wave of headphones that they'll like more, and if they got at least company-average margins on them quickly, if that isn't already the case.

[johnny]

I agree. I'm not actually negative on the idea of Beats Headphones being under the Apple umbrella. Apple is probably the most well equipped company on Earth to take a high-gross margin, heavily marketed consumer electronics brand and keep ASPs up while letting advertising normalize. I'm sure they also have a good amount of internal R&D in the Beats product space that they could give to Beats to begin the long process of rehabilitating their reputation with audiophiles.

 

So I am not at all negative on the marriage. In fact, I am generally more optimistic about the prospects of the headphone business than the Music effort, lol.

 

[Liberty]

I agree. I'm not actually negative on the idea of Beats Headphones being under the Apple umbrella. Apple is probably the most well equipped company on Earth to take a high-gross margin, heavily marketed consumer electronics brand and keep ASPs up while letting advertising normalize. I'm sure they also have a good amount of internal R&D in the Beats product space that they could give to Beats to begin the long process of rehabilitating their reputation with audiophiles.

 

So I am not at all negative on the marriage. In fact, I am generally more optimistic about the prospects of the headphone business than the Music effort, lol.

 

Makes sense. I agree.

 

I also think the music streaming is a bit of a mess right now. Lots of really good ideas, but too much iTunes legacy spagethi code and cluttered UI. They have a bit of a microsoft problem there, which is that it's really hard to remove things because some people still have iPods that they synch in, some people have bought huge libraries of videos and audio on iTunes, some people synch their ebooks, do their device backups, etc..

 

They need to do a rewrite and probably split these things into at least 2 apps. I wouldn't be surprised if that was the plan over time. I think there's enough of a kernel of good ideas that once they remove the bad parts, it could be a very nice product.

[Liberty]

So I wrote a little about today's event in my investing journal. Thought I'd share it here if anyone's interested:

 

I watched the whole Apple event live. It's a bit less exciting than before now that there's basically a 24/7 worldwide industrial espionage apparatus focused solely on the company. There are fewer true surprises.

 

But as usual, the talking heads will judge the company based on how impressive the demos are and how many "innovations" the company had, while the market - over time - will judge the company based on a handful of things that actually make their products better to use day-to-day. Better to have a few truly useful things that work really well than a ton of half-baked ideas that demo well but that nobody ends up using in the real world...

 

I think they did well on that front. I think the pressure-sensitive '3D Touch' on the iPhone will probably be a bit like TouchID. Something that most regular people aren't too excited about at first, and then get used to and feel that any device that doesn't have it is broken and quaint. It'll be fun to see how app developers will use pressure-sensitivity and the 'taptic' engine to do cool stuff that nobody has thought of yet.

 

I also like how they basically made a modern version of the animated GIF, but smartly incorporated it into regular photos and turned it on by default. This all but guarantees widespread adoption, and it's a really cool idea. There are so many photos from my past that I wish I could see in motion, even if just a second or two. It gives you such a sense of reality over a static photo, which is why I started taking lots of 5-10 second videos of various places on my last trip to Spain.

 

I think the iPad Pro is a very good idea. Having the equivalent of almost two full-size iPads side by side with screen-splitting would be so useful when I'm reading documents and taking notes here, or just browsing around with Twitter open or whatever. Also picture-in-picture video for taking notes of various speeches and conferences (which I'll be able to do on my Air 2, but even better on iPad Pro).

I wonder if the new iPhones have the variable refresh rate screen that the iPad Pro has. I'm sure that'll make its way into all their mobile devices for power-efficiency.

 

Apple TV was also impressive to me. They're totally right that the TV experience sucks and is antiquated, and this seems like a better way to do things. And we know they're not done, it'll be even more interesting once they have deals with more content and cablecos.

 

I think the app store on it will be big over time. Universal apps are very good, since you just buy once in the ecosystem and it'll give people a few things to try right away if they've already bought some universal apps on their iPhone.

 

I've been predicting that the Apple TV as a gaming console for a while, and it's finally happening. That mid-market in between casual gaming on phones and iPads and hardcore gamine on PCs and consoles is probably bigger than anyone thinks, and nobody really targets it. Nintendo kind of did with the original Wii, and they had a huge hit, but they couldn't keep it going.

 

And if they keep updating Apple TV every year or two, they could get into console-territory power fairly quickly, as consoles are on 5-7 year cycles and won't keep up unless that industry changes how they do things (which is harder since their low-margin hardware is already pretty expensive, as are their games).

 

I thought it was interesting that they didn't even have time to talk much about iOS 9 and El Capitan again. Most regular consumers probably haven't followed WWDC last June, so the new stuff will be mostly a surprise. I think the power-saving stuff will be noticed most (hey everybody, here's a free extra hour of battery life), while personally I'm looking forward to the multitasking on the iPad and the smart keyboard gesture thing that moves your cursor around...

 

They should have had native apps on the Watch from the start, but better late than never. These tough engineering projects (hey, cram a whole computer with RF antennas and health sensors in a watch) never follow strict schedules, especially not for versions 1.0, so some compromises must be made. But now it's here, and the fact that it's before the first holiday season for this product is very good. People are too focused on V.1.0 and not enough on what it'll be in version 2, 3, 4, etc...

[innerscorecard]

Only Apple. Brings out the trolls.

 

Anyways, this article from today is a good companion piece/show notes to the keynote:

 

http://www.bloomberg.com/features/2015-how-apple-built-3d-touch-iphone-6s/

 

All in all, I liked the keynote. One interesting point of tension: both the Apple TV and iPad Pro start at the more-than-sufficient 32 GB, but the iPhone 6s still starts at only 16 GB (which though usable with app thinning and such, is not "good" in 2015). I think it's obvious that Apple thinks 32 GB is how much space you really need. Perhaps production concerns rather than pure margin are the reason the iPhone 6s still starts at 16 GB.

[innerscorecard]

On the whole I think Apple TV has a very good interface, but I think the visual on-screen interface is a bit too conservative. It was funny when Eddy Cue used the phrase "just like in iTunes," which I think it should not be.

[Viking]

Here is my read on where Apple sits today:

1.) iPhone: nice incremental improvements; lineup of 6S, 6S plus, 6, 6 plus and 5S is better than last year. My guess is they will sell more total units and as a result post higher profits.

2.) iPad: new iPad Pro may not sell many units but at a base price of $799 will provide some much needed revenue growth and should slow the bleeding in iPad category when it is launched in November. iPad total results (sales and profits) may finally stop bleeding. $99 for iPencil and $149 for keyboard will also help.

3.) Mac: no new news; category performing well and this should continue (does iPad Pro cannibalize MacBook sales?)

4.) Watch: new OS2 solid improvement. Still a future product but should see solid growth each quarter for the next few years.

5.) AppleTV: new hardware and software and App Store. Another stool leg for the future. Hardware and App sales will provide some nice revenue and profit growth for their respective categories.

 

Here is the key takeaway after today: Apple has never been better positioned from a competitive standpoint. Apple now has 5 hardware devices that each lead their respective categories. The Apple ecosystem is getting even more sticky as it grows larger and all the devices are designed to work seamlessly together. It is going to be an Apple Christmas this year for many, many families.

 

What does it mean for investors in Apple? In the short term, who knows? My guess is Apple will grow total sales and total profits in fiscal 2016. Current estimates are for Apple to earn $9/share in fiscal 2015 end of Sept) and $10/share in fiscal 2016 and given what I saw today this looks pretty reasonable to me. So the stock is trading at about 12 times fiscal 2015 earnings with net cash in excess of $150 billion.

 

What are the key risks?

1.) will iPhone unit sales in fiscal 2016 fall below unit sales in fiscal 2015? If this happens, Apple will be hard pressed to grow total profitability. Cook has said repeatedly that only about 30% of the install base has upgraded to 6 or 6 plus so a very large 70% has yet to upgrade. We also know that Apple is getting more Android switchers and we should see this trend continuing. I also think the phone lineup is better this year than last year (4 models offer the larger screen size). We also know that Apple, after launch last year, was short supply of 6 and 6 plus into calendar 2015 And they likely have their supply chain able to provide more units this year.

2.) when will iPad category sales stop declining? iPad Pro may do this given it is new to category and expensive. Apple is showing once again that it can deal with revenue headwinds in a category by going upmarket... sell a bigger device for more money. Even if it sells less units it may actually end up with a higher revenue number and more total profits in the iPad category in fiscal 2016. I am not sure they will get back to revenue growth with iPad in fiscal 2016 but iPad Pro will certainly help.

3.) China: will sales decline due to economic weakness? No idea. Apple said sales are solid in August and this is good enough for me. If a competitor was hurting them in the premium segment I would be more concerned; their competitors in the premium segment in China are falling further behind.

[Viking]

Liberty, thanks for posting your summary. Nice to get other perspectives...

[bargainman]

a few random thoughts/observations

 

no new iPad Air..  disappointed since I wanted one.  It may drive folks to iPad Pro, but not this folk :)  I'll have to wait.

iPad keyboard had no trackpad.  Also the swinging mechanism looked interesting.  It might be usable on your lap, unlike the surface pro which digs into your leg.

no iPhones are really free with most carriers anymore.  So the perceived price diff between a 'free' 5s and a 6s is not as large as it used to be.

TV was missing amazon prime.

Watch guy's presentation came off as wooden.

 

Also, skimmed article about 3d force creation, and the bemoaning of having to jump back to home all the time..  There's an easy solution..  permanent back and menu buttons like andriod has!  iOS lack of consistent back and menu button positions annoy me.  It introduces ui complexity and discoverability issues.  How do I know where and when to use 3d force?  no idea..  Sometimes apple seems to miss the complexity mark imho.  They add complexity to feint simplicity.  Like not adding a right mouse button for a decade!  anyway.. off topic. :)

[Viking]

Yes, the person presenting the watch was definitely not a great presenter and it was painful to watch Fortunately, the watch hardware and software looks like it is on the right track and should grow nicely as a category over time. In a few years watch should be a very nice business for Apple.

 

TV is the real new news to me. I think the new TV puck/remote and TV App Store could be a bigger deal than people realize right now. Over the next year we should see lots and lots of great new developments now that developers have a platform to work with and Apple TV could really grow (in terms of how many consumers buy a TV puck and how much content is consumed via an App on a TV versus watching traditional TV channels).

[Palantir]

So basically Apple just released a Surface with a stylus to boot. So much for Apple being innovative. I remember when Cookie Monster was mocking companies merging laptops and tablets.  Changed his mind.

 

Yeah, sure, and while we're looking at things at their most meaningless superficial level, Windows Phones are the same as iPhones, right? Consumers should like Windows Phones just as much, and it should be as successful, right?

 

When Apple criticizes something, they usually criticize a particular implementation of an idea (ie. something that isn't a great laptop and isn't a great tablet because of both the software and hardware), they're not saying that the idea can't possibly be made to work ever (ie. they didn't want to make a large phone before they could make it thin enough for it to be a good experience. A phone the size of an iPhone 6 plus but the thickness of an iPhone 4 would've been a brick..).

 

Looks like you're taking it personally. I wonder why? Are you emotionally attached to Apple that you can't let criticism slide?  ;D

 

Surface is clearly a laptop with the added functionality of a tablet. Apple mocked the concept, along with that of a stylus. Two years later, they make a tablet with the functionality of a laptop....with a keyboard and a stlys! No they didn't criticize the implementation, they were criticizing the concept.

 

As I've stated before, Apple isn't very innovative, they are copying what other companies have shown to work and improving the user experience. Nothing wrong with that though.

[TheAiGuy]

So basically Apple just released a Surface with a stylus to boot. So much for Apple being innovative. I remember when Cookie Monster was mocking companies merging laptops and tablets.  Changed his mind.

 

Yeah, sure, and while we're looking at things at their most meaningless superficial level, Windows Phones are the same as iPhones, right? Consumers should like Windows Phones just as much, and it should be as successful, right?

 

When Apple criticizes something, they usually criticize a particular implementation of an idea (ie. something that isn't a great laptop and isn't a great tablet because of both the software and hardware), they're not saying that the idea can't possibly be made to work ever (ie. they didn't want to make a large phone before they could make it thin enough for it to be a good experience. A phone the size of an iPhone 6 plus but the thickness of an iPhone 4 would've been a brick..).

 

Looks like you're taking it personally. I wonder why? Are you emotionally attached to Apple that you can't let criticism slide?  ;D

 

Surface is clearly a laptop with the added functionality of a tablet. Apple mocked the concept, along with that of a stylus. Two years later, they make a tablet with the functionality of a laptop....with a keyboard and a stlys! No they didn't criticize the implementation, they were criticizing the concept.

 

As I've stated before, Apple isn't very innovative, they are copying what other companies have shown to work and improving the user experience. Nothing wrong with that though.

 

Pretty sure your just trolling us at this point.

 

In other news, what do people think of the partnership with Hermés? This is a weak spot for me analytically, but I'm encouraged by it. It seems like they are positioning the watch as a direct competitor to the Swiss, as opposed to a more popular device like the iPod.

 

This seems smart to me -- the watch industry has a lot of aspirational buying, especially in Asia (Hing Kong, for example, is blanketed in watch stores). My guess if their bales to successful compare themselves to an Omega, for example, they may be able to attract people who would like an aspirational watch, but can't afford one.

[johnny]

I thought the Hermès thing was one of the most important parts of the Keynote and I frankly there is no good excuse for why they didn't have at least one major partnership like this at launch. Pairing the bands with custom, tastefully branded watchfaces is perfect. And the pricing of the middle-range steel models now makes sense since it gives enough room for players like Hermès to achieve the gross margins that they consider necessary.

 

It is absolutely critical that Apple Watch gets fashion credibility -immediately- and I think the Hermès bands do a good job of acknowledging that the device itself is sort of massive, and so the only fashionable way to present it is to "own it" and just make a strap that is also big and loud and, to borrow a word from Ive, unapologetic.

 

I also really am encouraged by the fact that they had some MDs up there talking about Watch apps. Doctors are a huge huge huge potential early market for the Watch. The only non-dev Watch owners I know of are all MDs, and I think the value proposition is starting to spread throughout that community. Some of those demo'd features are really silly (being able to see a patient's fetus' heartrate on your Watch) but just the fact that they had a doctor up there I think suggests that -they- know that it is a domain where the product has a lot to offer.

 

As I've stated before, Apple isn't very innovative, they are copying what other companies have shown to work and improving the user experience. Nothing wrong with that though.

 

Palantir, you seem to take Apple's competitive posturing a little too literally. They don't necessarily split hairs between concept and implementation quite in the way that you do. Not rushing to be first-to-market with every concept doesn't make them less innovative, it is a sign that they prioritize the credibility of their brand and have the luxury of waiting.

 

And that is important, because it means when Apple finally does enter a product category that some other companies have been playing with for a few years, there are millions of people who take their entry as a signal that the technology is actually good enough to consider. Microsoft, Google, and Samsung all rush to get things to market first, and since so many of those efforts tend to be half-baked, they have a difficult time getting the benefit of the doubt from consumers. By all accounts the Microsoft Surface Pro 3 is a pretty compelling device, and there are signs that product line has a lot of potential. Unfortunately, this is after MSP1 and MSP2 being notoriously compromised devices that produced humiliating, large write-downs that were covered by all the financial news outlets. That is the price paid by a company obsessed with trying to prove how innovative it is.

 

[writser]

http://www.theverge.com/2015/9/9/9297805/apple-ipad-pro-microsoft-surface-comic-prediction

[Phaceliacapital]

http://hijinksensue.com/wp-content/uploads/2013/08/2012-06-19-surface-tension.jpg

 

Posted in 2012: http://hijinksensue.com/comic/surface-tension/

 

"Chief among Apple’s key strategies is waiting for years after a new service, feature or function is adopted and implemented by every other competitive platform before putting their own spin on it and taking all the credit as if it were their own invention. They are almost always the last to the party, but they are always the best dressed, the most interesting, the sexiest and the only one everyone remembers the next day.

 

I don’t fault Apple for this type of behaviour because all they are really doing is letting the other guys take the risks and make the mistakes and gauging public response based on other products, before taking all of that knowledge and refining the hell out of their own product before launching it two or three years after the first one came out. Then we, not Apple, create the notion that Apple did something new, different and spectacular."

 

edit: I didn't see writser posted it already, apologies!

[Jurgis]

http://www.theverge.com/2015/9/9/9297805/apple-ipad-pro-microsoft-surface-comic-prediction

 

You invented that!!!

[Liberty]

Doing something first can give you some bragging rights I suppose, but what matters is who does it best, and features as they relate to a good product when looked at as a whole (who cares if you have one good thing if the rest sucks?). Apple rarely claims to have invented a new thing entirely, but they are very proud of the innovation that goes into their implementations and how they integrate things. It's kind of like how Henry Ford didn't invent the automobile, but his Model T was defining for the industry for many reasons. Tons of other companies come out with dozens of half-baked ideas that they can claim to be "first!!!!1111" about, but in the end, it's about products, not feature demos.

 

Apple Watch wasn't first smartwatch. iPad wasn't first tablet. iPhone wasn't first smartphone. iPod wasn't first digital music player. Etc..

 

http://core0.staticworld.net/images/idge/imported/article/nww/2013/02/apple_newton_messagepad-100274461-orig.jpg

 

Pretty sure surface wasn't first tablet with a stylus and keyboard, and the keyboard in the cover is inspired by the original iPad's magnetic smartcover anyway... Also pretty sure the Surface wouldn't look what it looks like without the iPad. But that's not convenient to the cherry picking.

 

But hey, if all you care about is bashing companies rather than having an understanding of things, I guess a three panel comic is about the right amount of context.

[Palantir]

I told you guys, Steve Ballmer was a visionary. Nobody believed me then. :D

[Liberty]

So basically Apple just released a Surface with a stylus to boot. So much for Apple being innovative. I remember when Cookie Monster was mocking companies merging laptops and tablets.  Changed his mind.

 

Yeah, sure, and while we're looking at things at their most meaningless superficial level, Windows Phones are the same as iPhones, right? Consumers should like Windows Phones just as much, and it should be as successful, right?

 

When Apple criticizes something, they usually criticize a particular implementation of an idea (ie. something that isn't a great laptop and isn't a great tablet because of both the software and hardware), they're not saying that the idea can't possibly be made to work ever (ie. they didn't want to make a large phone before they could make it thin enough for it to be a good experience. A phone the size of an iPhone 6 plus but the thickness of an iPhone 4 would've been a brick..).

 

Looks like you're taking it personally. I wonder why? Are you emotionally attached to Apple that you can't let criticism slide?  ;D

 

Surface is clearly a laptop with the added functionality of a tablet. Apple mocked the concept, along with that of a stylus. Two years later, they make a tablet with the functionality of a laptop....with a keyboard and a stlys! No they didn't criticize the implementation, they were criticizing the concept.

 

As I've stated before, Apple isn't very innovative, they are copying what other companies have shown to work and improving the user experience. Nothing wrong with that though.

 

Nothing personal, just correcting your statement and explaining why you are missing the point. The Surface and iPad Pros might look similar at first glance, but they take very different approaches and that matters. Apple never mocked using keyboards and stylii on tablets, you could already buy all those accessories in any Apple store and many people did. What they thought didn't work was trying to use a desktop OS and desktop software that isn't optimized for touch on a tablet, and having a confusing OS that switches between modes, because that's a major compromise and results in a bad experience. They didn't do that with the iPad Pro.

 

I care about understanding what products actually are, not about some superficial comparison for point-scoring in some pointless religious war between Apple and other companies. There's no point in that, and it's not like Microsoft is winning in the consumer mobile device space...

[giofranchi]

Liberty,

I am gradually getting more and more convinced that you are right about AAPL.

As you already know I give a great importance to capital allocation. And that’s probably the only issue that I still have before pulling the trigger: do you think Cook is a great capital allocator? If yes, why?

Or do you think AAPL doesn’t need a great capital allocator?

 

Thank you,

 

Gio