The Macalope Weekly: Stating the obvious

Almost anything is possible in the wacky world of technology. Leaders rise and fall, some products succeed, others don’t. But stating that Apple doom is always technically a possibility isn’t really news. We know that. It’s just not that likely.

Ask not for whom the doom tolls

The Motley Fool’s Ashraf Eassa pushes the panic button!

“Apple Can’t Afford to Wait Until September”

Are you sure about that? The company has a lot of cash. Technically, it could probably afford to wait until September of 2015.

We are just on the verge of the launch of Samsung’s next generation Galaxy S5 flagship phone.

With its revolutionary Samsung-totally-thought-of-this-itself fingerprint sensor in the home button.

The rumors are running rampant …

Such is their wont, yes. Eassa admits the rumors are confusing and constantly shifting, like a herd of random animals that isn’t actually a herd at all but is still presented like one in technology coverage. But the potential utter wrongness of these rumors doesn’t matter. It does not matter!

At any rate, the key takeaway is that Apple can’t afford to wait until September to counter.

We know nothing about the Galaxy S5 except that it is a harbinger of Apple doom. That we know in our bones.

It’s clear that a fairly large portion of the smartphone market (no pun intended) is moving toward these larger smartphone form factors.

At last count about 20 percent of the market, a significant proportion of whom are in Korea and may just be buying whatever the home team is selling. Still, Apple’s got to make one!

Given the company’s willingness to release something like the iPhone 5c to address lower price points …

More like margin points.

… it stands to reason that larger phones (perhaps a 4.7-inch and a 5.5-inch as rumored) would form a pretty compelling product stack.

Still a fifth as compelling as smaller phones, apparently.

That being said, Apple probably needs to move quickly if it is to truly capitalize on this opportunity.

Because once the Galaxy S5 ships, no one will buy another smartphone ever again.

… Apple is unlikely to be able to wait until September before it has to pretty aggressively cut prices on the iPhone 5s in order to maintain its market share at the high end.

Ah, market share! There you are. You always turn up, just like a bad penny. A really rancid, fetid penny made out of discarded animal lips.

Apple is going to need to “wow” consumers with a next generation iPhone in order to fend off the Android hordes from eating into its outsized portion of the smartphone industry’s profits.

Apple has actually increased its profit share during the period in which we’ve been hearing how innovation is dead at Apple. So … you know.

As always, time will tell.

Indeed. Thank you for the reminder of the linear nature of time. Good information.

The hunter becomes the hunted

Also writing for the Motley Fool, Daniel Kline asks:

“Is Apple One Failed iPhone Away From Being BlackBerry?” (tip o’ the antlers to Shawn King).

Short answer: No.

Long answer: Noooooooooooooooooooooo.

OK, yes, as Shakespeare said, “Nothing lasts forever but the Earth and sky,” but it’s going to take a little more than one failed iPhone to turn Apple into the Nickelback of smartphones.

Besides, the Macalope keeps hearing how the iPhone 5c is such a collosafail. Aren’t we there yet?

Apple has enjoyed three major successes in recent years, first with the iPod then with the iPhone and iPad.

2001 is “recent years”? Why is it that everyone seems to think that the successes Apple has managed to string together over the last 13 years all just happened in the last four? And none of them since Steve Jobs died. According to the collective consciousness of the technology press, the iPod, iPhone, and iPad were all introduced between 2009 and 2011.

But with the iPod nearing the end of its run and the iPad not producing anywhere near the profit that the iPhone does, Apple’s long-term profitability today relies heavily on the company continuing to sell new iPhone models.

And it’s not like people like iPhones or something.

The iPhone, according to Apple’s year-end report, accounts for 53.4% of the company’s profit. That number has steadily climbed since 2007 …

It is shocking that the iPhone’s percentage of Apple’s profits has risen since it was first introduced, isn’t it?

… and while Apple is not a one-product company, having more than half of your profit come from a single product makes a business especially vulnerable.

Technically, it’s one product line made up of four basic phone designs.

Only a few short years ago, BlackBerry was the dominant player in the smartphone market—a market it essentially created.

It’s cute how pundits will inform us in one breath how Apple’s market share is a fraction of Android’s and then, in the next, set Cupertino up as the dominant smartphone maker, poised for a big fall from grace.

Then, the bottom fell out. BlackBerry, for reasons that have never entirely been explained, only made minor tweaks to its phones between 2009 and 2011 and did not release a new model until 2013.

BlackBerry screwed up. What’s to explain?

… Apple now has something it hasn’t had for years—an actual competitor.

The Macalope hears this canard every year. “This year Apple has real competition!” It’s always had competition. It continues to do well because people like its products.

While recent iPhones—some would say iPhones since the death of Apple founder Steve Jobs—have not wowed anyone, they have steadily (albeit boringly) moved the line forward.

OK, fine. But what have Apple’s competitors done but the same? Has anyone else redefined the smartphone market? No.

The reason BlackBerry faltered is because it didn’t see how the iPhone changed everything. Until someone else does the same to the smartphone market again, incremental maturation of the market is the name of the game.

Apple’s unlikely to reinvent smartphones again because it’s already making the best iPhones it knows how to make. Everyone else takes their major cues from Apple.

What if the public moves away from phones to wearable devices like Google Glass?

Then the aliens will be right to destroy us.

Remember when netbooks were a rising category?

Yeah! Say, what company’s product killed netbooks, anyway?

(Could you have picked a worse example?)

Of course, the smartphone killer—if it ever happens—may come from Apple in the same way the company made its own iPod irrelevant. But if it comes from Google, Samsung, or some genius working in his parent’s garage, Apple is vulnerable.

OK, for starters, Samsung—the company with its own mining and weapons divisions—is never going to make that product. Ever. In a million years. Google, maybe. But in this entire piece there is one company that’s been the actual disruptor: Apple. Is it possible for Apple itself to be the disruptee instead of the disruptor? Sure. But the Macalope likes Apple’s chances.

Analysts gotta analyze

Hey, we haven’t checked in with our pals at Business Insider recently. Wonder what they’re writing abou …

“APPLE IS THE NEW MICROSOFT: …”

Wow. OK. Phew.

CAPS LOCK IS HOW JAY YAROW FEELS ON THE INSIDE ALL THE TIME.

“… Barclays Downgrades Apple, Says It’s Doomed To Be Range-Bound” (no link but tip o’ the antlers to Kyle Cardno).

Now, Business Insider is very upset that the Macalope doesn’t link to their pieces. It really hurts their feelings. :-(

But look at that barking headline. Just look at it. Caps lock and doom. These are not behaviors we reward. No, sir, they are not. Jay Yarow may be a very nice person. He may be a very smart person. But he works at a tremendous crap factory. That’s not the Macalope’s fault; that is Jay Yarow’s fault.

The Macalope doesn’t really understand how Apple can be “the new Microsoft” … sorry, “THE NEW MICROSOFT!!!!11ONE11!!!” … when the old Microsoft still isn’t done being Microsoft.

Apple is the new Microsoft, says Barclays analyst Ben Reitzes.

Well, we’ll see if Ben gets to ask a question on the next quarterly conference call with that attitude.

“Frankly, we just couldn’t quite bring ourselves to use smart watches or TVs as reasons to raise numbers – nor were we fully convinced that these products could move the needle like new categories did in the old days,” says Reitzes.

That is one opinion. Another is that of Morgan Stanley’s Katy Huberty.

“iWatch could be worth as much as iPhone & iPad first-year sales combined, says Morgan Stanley”

Zoinks!

So, here we have one analyst who says “iWatch. Meh.” and another who says “IWATCH, ZOMG!” Which one is right?

Allow the Macalope to proffer the idea that neither of these analysts has the slightest idea how many iWatches Apple could sell if Apple could sell, would sell iWatches. Why? Isn’t it obvious? No one has seen an iWatch or has any idea what it would do.

These predictions are like a 8-year-old jumping up and down on the diving board yelling “Look at me, mom! Mom! Mom! Mom! Look at me! Look at me, mom! Mom! Mom! Mom! Mom! Mum! Mummie! Mom! Mom! Mom! Mom! MOMMMMMMMMMMMMMMMMM!”

Yes. Yes. We see you, Katy, honey. We see you, Ben, sweetie.

We see you.

[eye roll]

[returns to reading book]

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