The Macalope Weekly: Blind spots
We all have our blind spots, the Macalope supposes. His happens to be that spot where he can’t see cars behind his antlers. For other pundits, however, they seem to be fairly common mistakes in Apple analysis. First, there are some people you just don’t quote when talking about Apple (you know who). Second, just because you can’t see Apple innovating right in front of your eyes doesn’t mean innovation at Apple is dead.
An important lesson: Just because a site has the word “Mac” in its name doesn’t mean they don’t make massive mistakes in their articles about Apple. Like, for example, who they quote.
Apple usually keeps a very tight lid on secrecy regarding products in its pipeline, but the rumor mill is definitely working overtime regarding a possible iWatch that would launch later this year.
Indeed! And what has the vaunted Apple rumor mill come up with?
“Uh … they might be making a watch? Uh … Oh! Oh! It might run iOS.”
Way to go out on a limb, there, rumoristas.
OK, so, we’re talking about Apple, we’re talking about rumors, we’re talking about wearable computing. Hmm. Who would be a good expert to interview to add depth to this story?
“Steve Jobs was very aggressive with leaks,” Rob Enderle, principal analyst at the Enderle Group, told MacNewsWorld.
BOO-YEAH. Look, it just makes sense, people. Rob has his own letterhead. They don’t just let anyone buy letterhead.
They do? Oh.
Apple did not respond to our request to comment for this story.
Steve Jobs never would have not responded to someone writing an article with Rob Enderle in it!
Wait, that’s not right.
Apple head designer Jon Ives …
The Macalope doesn’t usually like to harp on editorial errors but Sir Jony Ive did not go to four years of awesome school and get knighted by the actual Queen to be called “Jon Ives.”
“There’s a fitness craze, and I think this is a market where Apple can just go in and grab a whole piece off the bat with health or other apps,” Andrew Eisner, a director at Retrevo, suggested.
“You’re talking about a device that’s far smaller than the iPhone is, and you’re going to have to connect them, which means some new interoperability work, some new types of drivers, and the technology to keep the two devices linked,” Enderle said.
Oh, my God, he said “drivers.”
“This is [Apple’s] first real effort to remote the screen and interface to another device…”
It should not be surprising that Enderle is unfamiliar with a little technology known as “AirPlay.”
“It can’t be done! ‘Tis witchcraft!”
Battery life is another problem the design team is trying to resolve, according to published reports.
Yeah, look, these are all engineering issues. And Apple happens to be kinda good at that. Bob Mansfield just stands around, menacingly cracking the knuckles on his oven-mitt-sized hands, until an engineer gets an idea.
The Macalope is neither a proponent of an “iWatch” nor a believer of the Apple rumor mill. But these people who purport to be able to discuss devices they have never seen would do better to keep their fingers off the keyboard until they have a clue what they’re typing about.
The Apple double standard
It’s not new that Apple is held to a different standard than other companies. But it is annoying.
Get ready for some classic groupthink!
“In the 18 months since Steve Jobs died, the company hasn’t done very much right.”
Well, there were some wildly successful product introductions and record-breaking quarters. But other than that, totally.
“There have been a lot of missteps, they messed up the mapping product on the iPhone, the new iPads haven’t been universally acclaimed as innovative. They’ve lost their way a bit.”
This is the catch-22 that Apple finds itself in. Innovation for other companies—cough, Samsung, cough—is slapping a different screen size or another feature on a phone and shipping it. Apple ships an iPad that’s thinner than anyone else’s tablet and with a different screen size, and that’s not innovating.
See how that works? Innovation, for Apple, means it has to remake a whole market. Samsung can just add a stylus.
About Tim Cook Goodwins says:
“He isn’t a visionary, he hasn’t come through.”
In the year and a half since he took over, how many markets has he remade? None! Steve Jobs used to remake four markets before breakfast and another 4 before lunch!
“‘Cause all they do is produce a mobile phone, a tablet and a laptop computer. That’s where they get their money from. They’re not an innovative powerhouse anymore.”
Anymore. Because the company only make a few products. As opposed to when it made 84 kinds of Performas and the Newton, the Macalope supposes.
“Google do an awful lot of innovation anyway because they know as well as any other large company the danger of depending on a single product for most of your money. So they’re doing lots of innovation: the Google Glass, a sort of virtual reality headset, and they’ve got self-driving cars. None of this is going to make Google much money but it gives it an aura of constantly looking for new markets.”
See, a lot of people will look at stupid things like P/E ratio, or profit, or cash on hand when evaluating a stock, and they’ll be shocked to learn that Apple’s share price is ridiculously low when you take these into account. But smart analysts look at the aura ratio and see a company that’s still heavily overvalued because it doesn’t turn its product development into performance art.
Interviewer: “For the future, what can we expect from each of them? On the Apple side, Apple TV, Apple watch. And on the Google side, what?”
Goodwins: “On the Google side, we don’t know what they’re going to do next.”
If you’re assuming Apple is going to do a watch and a TV then we kind of do know what the two companies are going to do for the next few years. Google does its R&D out in the open while Apple does its behind closed doors. Whatever Apple’s not showing us—TV, watch, impenetrable exoskeleton bristling with advanced weaponry—may be at the same awkward stage as Google Glass. Which is why the company’s not showing it to us yet.
“Do people want a new watch and a new TV? Is that what’s going to keep driving the world’s biggest company? We’ll have to see.”
Which does not seem to be the tack that investors are taking by lighting their Apple shares on fire and jumping out of a window, but …
Interviewer: “So, too soon to write off Apple, do you think?”
Goodwins: “Oh, it’s one of the world’s most successful companies. But it better start doing something soon.”
APPLE’S NEVER GONE THREE YEARS WITHOUT INTRODUCING SOMETHING GROUNDBREAKING HURRY HURRY HURRY OH GOD I’VE BEEN WAITING BY THE COMPUTER THE WHOLE TIME AND I HAVE TO GO TO THE BATHROOM.
If Goodwins’s “analysis”—which is nothing more than a few loosely connected bits of conventional wisdom, some of which are contradictory—is how the investment community explains its rationale for getting out of AAPL, then you’d do about as well taking investment advice from the guy in Memento.
Publishing and perishing
Of course, it’s not just the investment community that has a bad case of object impermanance around Apple’s ability to innovate (“If I can’t see it, it doesn’t exist!”). Our hallowed halls of learning also harbor the infected.
Question, professor: Isn’t it just AAPL that’s ailing and not Apple?
Since October the price of Apple shares have fallen from $700 to about $425. No one should be surprised—the company has been misstepping for a long time.
Like, a hundred years or more, when you think about it.
Without the genius of Steve Jobs for neat, wholly-new products …
Steve Jobs designed the chips and burned the EEPROMS himself! You can’t deny that! I’m wearing my special underwear! I like Jell-O!
… it is going to take tougher management, and a change in the company’s core business strategy to match its past record of profitability.
This about the company that announced record profit again last quarter. For those of you observing this from the planet Earth.
Apple customers eventually evolved into an elite cult.
Indeed! Hey, let’s do the handshake! Don’t forget your blazer and fez for the next meeting! Mekka lekka hi, mekka hiney ho!
Those factors permitted Apple to be both high priced and ubiquitous, yielding big margins and its huge cash horde; however, along the way, Apple made mistakes only its market dominance at the high end would permit a firm to tolerate.
It offshored and outsourced too much manufacturing, separating in critical ways product design and manufacturing.
I really have nothing here, so I’m just going to start throwing some accusations on paper and then go have lunch.
That slowed and screened the feedback from the latter to the former, causing troublesome glitches in new products—such as iPads that overheat and iPhones with inadequate antennas.
Right. Because all Apple products were perfect before Apple shipped manufacturing overseas and having your iPad get warm—indeed, even less warm than your competitors’ tablets—is an intolerable failure.
Also, correct the Macalope if he’s wrong, but who was the CEO during the greatest phone design failure in the history of all phone designs (which it turns out pretty much every phone has)? Can’t think of the name. Rhymes with Reeve Hobbes …
Well, it’ll come to him eventually.
In the automobile and other rapidly advancing industries, the most able competitors keep the manufacture of critical components, or at least systems comprised by those components, close and accessible to their product designers: Samsung does this. Apple does not.
Uh, yeah, other than the chips—basically the heart of the device—which Apple designs rather than buying stock chips from someone else. So, other than keeping control of the really critical piece and outsourcing the less critical pieces, you’re totally right that Apple doesn’t control the critical pieces.
Consequently, Apple produces a high priced, high cost to make product—Samsung does not.
Because it’d be so much cheaper if Apple did all the manufacturing in California. Other than having to build an entire industry that doesn’t exist there.
The late Steve Jobs was able to circumvent this kind of competitive disadvantage by coming up with wholly new products …
Yeah, yeah, yeah, only Steve Jobs could innovate, and by “innovate” pundits mean “Apple innovate” not “Samsung innovate,” which is just slapping some features on a phone.
Chris “The Bouffant of Knowledge” Breen predicted another annoying aspect of this analysis:
I think that we can safely posit that when Apple releases its next Wow Product, we’ll see headlines containing the word “comeback.”
Exactly. Pundits like Goodwins and Morici won’t realize or admit that it’s been business as usual at Apple all along. They’ll just think that they were right: that something was terribly wrong inside One Infinite Loop and Apple somehow turned it around. Magically. On a dime.
Punditry can never fail, it can only be failed.