The Macalope Weekly: Mythperceptions
Is there any company besides Apple that engenders so many myths and misperceptions? An old saw favored by pundits is the as-yet-unannounced Apple product that they just know is going to fail. But Apple’s competition with Samsung is like a great fertile field of waving baloney.
Alas, poor iWatch
Wait, too late for what, exactly? March Madness?
Apple (NYSE:AAPL) is always highlighted in investing news, but buyer beware—sometimes hype is just hype.
It’s fairly safe to say that what is going on in regards to AAPL right now is not “hype,” unless negative hype is a thing.
Apple’s iWatch appears to be a reality …
“Readers, I can’t stress this enough, please be wary of hype. Now, let me tell you about this product that doesn’t exist …”
But that doesn’t mean it’s worth your time.
Ahhh, the watch puns just write themselves!
I say, several other companies are already producing “smartwatches.” So unless Apple comes up with something truly revolutionary, it is going to clock more down days than up, in the near term.
And Apple’s never come up with anything revolutionary before, so …
Apple is just playing catch-up.
Just like it did in digital music players, smartphones, and tablets! And look how that worked out!
Is it worth betting on (aka “investing in”) at this stage? My answer is, no.
Serious question: How is this “analysis” any better than casting bones to try to interpret the will of the gods?
The company had been trading at more than $700 in September, before it launched the iPhone 5, with its new connector plug (an issue for those with a variety of third-party iPhone products—an issue solved by a $29 accessory, as I mentioned on Seeking Alpha, but an issue all the same). By October, the company’s share price had fallen by more than $40, and it has only continued to decline since then.
So, Apple’s stock decline was because of the Lightning connector? Guess that makes about as much sense as anything else. Which is to say “none.”
At this point, an innovative product, such as a slap bracelet-style smartwatch, may help it gain ground, but with as little interest as has been generated about such products, it may only be enough to make sure it doesn’t lose any more ground than it already has.
Because it’s not like Apple has any more reach than Pebble, really.
Wait, let me start again …
WATCHES ARE STUPID.
The market is saturated with smartwatches, and upgrades really add little functionality. Hit the snooze button.
“The market is saturated with smartwatches.” She wrote that. She really did. It’s completely ridiculous, but she wrote it.
Well, at least Butler is consistent.
Wait. Is she Amish?
The punch line
Well, Samsung had a big product launch this week, and Phil Schiller had some comments about it the night before—comments that needed Henry Blodget’s keen insights.
“Reeling Apple Shoots Self In Foot As Samsung Launches Huge New Phone” (no link, of course, but tip o’ the antlers to the Jony Ive parody account on Twitter).
Oh, Henry! You’re just as understated as ever.
But coming as they did on Samsung’s big launch day, the comments seemed defensive, classless, and even desperate.
Defensive? Maybe. Are those Samsung ads featuring people lining up for iPhones defensive, too, then? And classless? Please. First, the idea that an unmitigated link-baiter like Blodget who’s been fined for securities fraud and banned from the industry has any leeway in calling someone classless would be laughable if our muscles weren’t already so tired from all the laughing at him that we’ve done to date. Second, maybe you haven’t heard of this before, but it’s called marketing and Apple wasn’t the only one getting its kicks in. HTC’s Twitter feed chimed in during the Samsung S4 launch event:
So…how off-Broadway is this production? #theNextBigFlop #HTCOne
As Benedict Evans dryly noted on Twitter:
Amused that Phil Schiller got so much attention for making obvious points about Android that everyone in tech knows.
So, what about the “desperate” part?
Well, speaking of Evans, let us examine a chart he provides. Just how much profit does Apple have to suck out of the smartphone market in order for it to not be considered desperate by Blodget? Almost two-thirds is apparently not enough, so three-quarters? A hundred percent? Infinity plus ten?
Also, in the days when Jobs was ridiculing the competition, Apple really was miles ahead of everyone. Now, after a couple of years in which competitors like Samsung have out-innovated Apple, it no longer is.
Out-innovated! Again with the double standard: Apple has roundly been accused of failing to innovate by not entering a new market or completely reinventing smartphones again. The product changes the company’s made in the last year and a half are met with derision from pundits (while still being bought by the pallet-full by consumers). Larger iPhone screen? Boring. Smaller iPad? Yawn.
Samsung, meanwhile, ships phones with one primary distinction—larger screens—and pundits like Blodget gush over how it’s out-innovating Apple.
Take Blodget’s post-Galaxy S4 announcement reaction:
“Samsung’s New Galaxy S4 Makes Apple’s iPhone 5 Look Like A Toy”
The piece is simply a picture of the two side by side, the implication being that the S4’s giant screen makes the iPhone 5 look useless.
He backed that up on Twitter:
I haven’t actually played with the Samsung S4 yet, but sounds like they have vaulted miles beyond Apple …
"Miles" being the new technical term for "one inch larger diagonally."
That is, of course, not the only double standard that Blodget applies to Apple. He also had kind words about Google’s recent decision to remove Andy Rubin as the head of Android.
This move makes strategic sense …
Ah. And what was Blodget’s reaction when Scott Forstall was forced out?
Looks like Apple threw Forstall under bus for Siri and Maps disasters
Google ousting executives: smart. Apple ousting executives: vindictive.
Oh, and Blodget hasn’t given up on his iOS-versus-Android-is-just-like-the-Mac-versus-Windows argument.
In a trend that is reminiscent of the PC industry in the 1980s and 1990s, the Android operating system has become the dominant global mobile operating system over the last several years.
Apple’s operating system, meanwhile, iOS, has been reduced to a niche player.
Again, refer to Evans’s charts: Apple’s smartphone market share has fluctuated between about 15 and 25 percent for four years, while its share of all phones has consistently grown. So, either Blodget doesn’t know the meaning of the word “reduced” or he’s just being a jerk.
OK, both is also a possibility.
In “platform markets” like these, in which third-party companies build apps and services that run on top of these operating systems, market share is very important.
Hey, you know what’s even more important? Users who actually buy and use apps.
We have, of course, pointed this out to Blodget before, but it never penetrates his novelty “Android is winning!” beer hat to reach his skull.
Now, there is a conversation we could have about whether or not Schiller should have made these comments and whether Apple needs to spend more on marketing. It is not, however, a conversation that someone like Blodget should be included in.
At least you can’t accuse Blodget of not having a sense of humor. Here’s the punch line to all of this:
“DEAR APPLE: Now That You’re Secretly Emailing Journalists, I’d Love To Hear From You!”
For whatever reason, though, I haven’t been invited into the Apple fold.
Yeah, it’s a real mystery.
A dose of reality
With the launch of the Galaxy S4, get set for some ka-ray-zee hyperbole! The Apple doom-ometer is about to go to 11! (It’s unclear exactly what the units of measurement on this thing are.)
The Wall Street Journal’s Lorraine Luk says “For Apple Suppliers, Galaxy S 4 Isn’t Good News”:
The wraps have barely come off Samsung’s new Galaxy S 4 but analysts are saying it’s likely to snatch more market share from Apple Inc. …
NOOOOOoooh, wait, she said “market share,” not “profit share.”
“The only hope for Apple and its suppliers …”
Apple’s fate rests on this spunky little R2 unit trying to get a message to Obi-Wan Kenobi!
“… is the possible launch of a low-cost iPhone later this year, which may help the U.S. company to gain market share in fast-growing emerging markets such as China,” said Capital Securities analyst Diana Wu.
You’re going to see a lot of this, despite the fact that we heard pretty much the same thing about the Galaxy S3. It apparently hasn’t occurred to pundits that this is kinda how the smartphone industry works: Companies come up with new models at different times and time is linear.
So, just how super-awesome is the Galaxy S4? Phillip Elmer-Dewitt’s roundups of opinions from analysts and press seem to fall squarely in the “good, but not revolutionary” category. Still, just so you know, Apple’s doomed. Doomed like a Soviet space dog.
Pretty much all of this attitude is based on misperceptions about Apple. Take this exchange Horace Dediu had in an interview with Le Temps of Switzerland:
Q: Can Apple regain the lead in the smartphone market? If yes, how?
A: Apple had leadership in the phone market for two quarters (see graphic below.)
It’s a myth to think that Apple was dominant for any extended period of time.
Whaaaaa? Please, Horace, everyone knows that Apple’s smartphone market share was something like 99 percent beginning in January 2007, when the iPhone was announced (even though it didn’t ship for six months), and lasting until it was washed away by the inexorable Android tsunami.
No, what really happened was that for a while there was a famous company with a signature phone that had low market share—Apple—and then a bunch of other vendors with completely forgettable phones. Then Samsung took those vendors’ market share—not Apple’s—and now we have a two-horse race.
Why do these myths about Apple perpetuate? John Gruber pretty much hits the nail on the head.
They’re declaring “The King is dead; long live the King” not because the king has actually died or abdicated the throne, but because they’re bored with the king and want to write a new coronation story.
People like stories. Even—and sometimes especially—if they’re not true.